H. R. 2854—247
‘‘(E) ADMINISTRATION.—The Center may not use more
than 3 percent of the amounts in the Fund for a fiscal
year for the administration of the Center.
‘‘(F) INFLUENCING LEGISLATION.—None of the amounts
in the Fund may be used to influence legislation.
‘‘(G) ACCOUNTING.—To be eligible to receive amounts
from the Fund, an entity must agree to account for the
amounts using generally accepted accounting principles.
‘‘(H) USES OF FUND.—The Center may use amounts
in the Fund to—
‘‘(i) participate with Federal and State agencies
in financing activities that are in accordance with a
strategic plan submitted under subsection (d), includ-
ing participation with several States in a regional
effort;
‘‘(ii) participate with other public and private fund-
ing sources in financing activities that are in accord-
ance with the strategic plan, including participation
in a regional effort;
‘‘(iii) provide security for, or make principal or
interest payments on, revenue or general obligation
bonds issued by a State, if the proceeds from the sale
of the bonds are deposited in the Fund;
‘‘(iv) accrue interest;
‘‘(v) guarantee or purchase insurance for local
obligations to improve credit market access or reduce
interest rates for a project that is in accordance with
the strategic plan; or
‘‘(vi) sell assets, loans, and equity interests
acquired in connection with the financing of projects
funded by the Center.
‘‘(4) LOANS.—
‘‘(A) RATE.—A loan from the Fund may be made at
an interest rate that is below the market rate or may
be interest free.
‘‘(B) TERM.—The term of a loan may not exceed the
shorter of—
‘‘(i) the useful life of the activity financed; or
‘‘(ii) 40 years.
‘‘(C) SOURCE
OF
REPAYMENT.—The Center may not
make a loan from the Fund unless the recipient establishes
an assured source of repayment.
‘‘(D) PROCEEDS.—All payments of principal and interest
on a loan made from the Fund shall be deposited into
the Fund.
‘‘(5) MAINTENANCE OF EFFORT.—The Center shall use the
Fund only to supplement and not to supplant Federal, State,
and private funds expended for rural development.
‘‘(6) FUNDING.—
‘‘(A) DEPOSIT OF FUNDS.—All Federal and non-Federal
amounts received by the Center to carry out this section
shall be deposited in the Fund.
‘‘(B) MANDATORY FUNDS.—Out of any moneys in the
Treasury not otherwise appropriated, the Secretary of the
Treasury shall provide to the Center not to exceed
$20,000,000 to carry out this section.
H. R. 2854—248
‘‘(C) ADDITIONAL FUNDS.—In addition to any funds pro-
vided under subparagraph (B), there is authorized to be
appropriated $30,000,000 to carry out this section.
‘‘(D) PRIVATIZATION.—No additional Federal funds shall
be used to carry out this section beginning on the earlier
of—
‘‘(i) the date that is 10 years after the date of
enactment of this section; or
‘‘(ii) the day after a total of $50,000,000 has been
made available under subparagraphs (B) and (C) to
carry out this section.
‘‘(f) BOARD OF DIRECTORS.—
‘‘(1) IN GENERAL.—The management of the Center shall
be vested in a Board of Directors.
‘‘(2) POWERS.—The Board shall—
‘‘(A) be responsible for the general supervision of the
Center;
‘‘(B) review any grant, loan, contract, or cooperative
agreement to be made or entered into by the Center and
any financial assistance provided to the Center;
‘‘(C) make the final decision, by majority vote, on
whether and how to provide assistance to an applicant;
and
‘‘(D) develop and establish a budget plan and a long-
term operating plan to carry out the goals of the Center.
‘‘(3) COMPOSITION.—The Board shall be composed of—
‘‘(A) 7 voting members, of whom—
‘‘(i) 4 members shall be active producers of sheep
or goats in the United States;
‘‘(ii) 2 members shall have expertise in finance
and management; and
‘‘(iii) 1 member shall have expertise in lamb, wool,
goat, or goat product marketing; and
‘‘(B) 2 nonvoting members, of whom—
‘‘(i) 1 member shall be the Under Secretary of
Agriculture for Rural Development; and
‘‘(ii) 1 member shall be the Under Secretary of
Agriculture for Research, Education, and Economics.
‘‘(4) NOMINATION.—
‘‘(A) NOMINATING BODY.—The Secretary shall appoint
the voting members of the Board from nominations submit-
ted by organizations described in subparagraph (B).
‘‘(B) NATIONAL ORGANIZATIONS.—A national organiza-
tion is described in this subparagraph if the organization—
‘‘(i) consists primarily of active sheep or goat
producers in the United States; and
‘‘(ii) has as the primary interest of the organization
the production of sheep or goats in the United States.
‘‘(5) TERM OF OFFICE.—
‘‘(A) IN GENERAL.—Subject to subparagraph (B), the
term of office of a voting member of the Board shall be
3 years.
‘‘(B) STAGGERED
INITIAL
TERMS.—The initial voting
members of the Board (other than the chairperson of the
initially established Board) shall serve for staggered terms
of 1, 2, and 3 years, as determined by the Secretary.
H. R. 2854—249
‘‘(C) REELECTION.—A voting member may be reelected
for not more than 1 additional term.
‘‘(6) VACANCY.—
‘‘(A) IN GENERAL.—A vacancy on the Board shall be
filled in the same manner as the original Board.
‘‘(B) REELECTION.—A member elected to fill a vacancy
for an unexpired term may be reelected for 1 full term.
‘‘(7) CHAIRPERSON.—
‘‘(A) IN GENERAL.—The Board shall select a chairperson
from among the voting members of the Board.
‘‘(B) TERM.—The term of office of the chairperson shall
be 2 years.
‘‘(8) ANNUAL MEETING.—
‘‘(A) IN GENERAL.—The Board shall meet not less than
once each fiscal year at the call of the chairperson or
at the request of the executive director appointed under
subsection (g)(1).
‘‘(B) LOCATION.—The location of a meeting of the Board
shall be established by the Board.
‘‘(9) VOTING.—
‘‘(A) QUORUM.—A quorum of the Board shall consist
of a majority of the voting members.
‘‘(B) MAJORITY VOTE.—A decision of the Board shall
be made by a majority of the voting members of the Board.
‘‘(10) CONFLICTS OF INTEREST.—
‘‘(A) IN GENERAL.—Except as provided in subparagraph
(D), a member of the Board shall not vote on any matter
respecting any application, contract, claim, or other particu-
lar matter pending before the Board in which, to the knowl-
edge of the member, an interest is held by—
‘‘(i) the member;
‘‘(ii) any spouse of the member;
‘‘(iii) any child of the member;
‘‘(iv) any partner of the member;
‘‘(v) any organization in which the member is serv-
ing as an officer, director, trustee, partner, or employee;
or
‘‘(vi) any person with whom the member is nego-
tiating or has any arrangement concerning prospective
employment or with whom the member has a financial
interest.
‘‘(B) REMOVAL.—Any action by a member of the Board
that violates subparagraph (A) shall be cause for removal
from the Board.
‘‘(C) VALIDITY
OF
ACTION.—An action by a member
of the Board that violates subparagraph (A) shall not
impair or otherwise affect the validity of any otherwise
lawful action by the Board.
‘‘(D) DISCLOSURE.—
‘‘(i) IN GENERAL.—If a member of the Board makes
a full disclosure of an interest and, prior to any partici-
pation by the member, the Board determines, by major-
ity vote, that the interest is too remote or too incon-
sequential to affect the integrity of any participation
by the member, the member may participate in the
matter relating to the interest, except as provided in
subparagraph (E)(iii).
H. R. 2854—250
‘‘(ii) VOTE.—A member that discloses an interest
under clause (i) shall not vote on a determination
of whether the member may participate in the matter
relating to the interest.
‘‘(E) REMANDS.—
‘‘(i) IN GENERAL.—The Secretary may vacate and
remand to the Board for reconsideration any decision
made pursuant to subsection (e)(3)(H) if the Secretary
determines that there has been a violation of this
paragraph or any conflict of interest provision of the
bylaws of the Board with respect to the decision.
‘‘(ii) REASONS.—In the case of any violation and
remand of a funding decision to the Board under clause
(i), the Secretary shall inform the Board of the reasons
for the remand.
‘‘(iii) CONFLICTED
MEMBERS
NOT
TO
VOTE
ON
REMANDED DECISIONS.—If a decision with respect to
a matter is remanded to the Board by reason of a
conflict of interest faced by a Board member, the mem-
ber may not participate in any subsequent decision
with respect to the matter.
‘‘(11) COMPENSATION.—
‘‘(A) IN GENERAL.—A member of the Board shall not
receive any compensation by reason of service on the Board.
‘‘(B) EXPENSES.—A member of the Board shall be
reimbursed for travel, subsistence, and other necessary
expenses incurred by the member in the performance of
a duty of the member.
‘‘(12) BYLAWS.—The Board shall adopt, and may from time
to time amend, any bylaw that is necessary for the proper
management and functioning of the Center.
‘‘(13) PUBLIC HEARINGS.—Not later than 1 year after the
date of enactment of this section, the Board shall hold public
hearings on policy objectives of the program established under
this section.
‘‘(14) ORGANIZATIONAL SYSTEM.—The Board shall provide
a system of organization to fix responsibility and promote effi-
ciency in carrying out the functions of the Board.
‘‘(15) USE OF DEPARTMENT OF AGRICULTURE.—The Board
may, with the consent of the Secretary, utilize the facilities
of and the services of employees of the Department of Agri-
culture, without cost to the Center.
‘‘(g) OFFICERS AND EMPLOYEES.—
‘‘(1) EXECUTIVE DIRECTOR.—
‘‘(A) IN GENERAL.—The Board shall appoint an execu-
tive director to be the chief executive officer of the Center.
‘‘(B) TENURE.—The executive director shall serve at
the pleasure of the Board.
‘‘(C) COMPENSATION.—Compensation for the executive
director shall be established by the Board.
‘‘(2) OTHER
OFFICERS
AND
EMPLOYEES.—The Board may
select and appoint officers, attorneys, employees, and agents
who shall be vested with such powers and duties as the Board
may determine.
‘‘(3) DELEGATION.—The Board may, by resolution, delegate
to the chairperson, the executive director, or any other officer
or employee any function, power, or duty of the Board other
H. R. 2854—251
than voting on a grant, loan, contract, agreement, budget, or
annual strategic plan.
‘‘(h) CONSULTATION.—To carry out this section, the Board may
consult with—
‘‘(1) State departments of agriculture;
‘‘(2) Federal departments and agencies;
‘‘(3) nonprofit development corporations;
‘‘(4) colleges and universities;
‘‘(5) banking and other credit-related agencies;
‘‘(6) agriculture and agribusiness organizations; and
‘‘(7) regional planning and development organizations.
‘‘(i) OVERSIGHT.—
‘‘(1) IN GENERAL.—The Secretary shall review and monitor
compliance by the Board and the Center with this section.
‘‘(2) SANCTIONS.—If, following notice and opportunity for
a hearing, the Secretary finds that the Board or the Center
is not in compliance with this section, the Secretary may—
‘‘(A) cease making deposits to the Fund;
‘‘(B) suspend the authority of the Center to withdraw
funds from the Fund; or
‘‘(C) impose other appropriate sanctions, including
recoupment of money improperly expended for purposes
prohibited or not authorized by this Act and disqualification
from receipt of financial assistance under this section.
‘‘(3) RESCISSION
OF
SANCTIONS.—The Secretary shall
rescind sanctions imposed under paragraph (2) on a finding
by the Secretary that there is no longer any failure by the
Board or the Center to comply with this section or that the
noncompliance will be promptly corrected.’’.
SEC. 759A. COOPERATIVE AGREEMENTS.
Section 607(b) of the Rural Development Act of 1972 (7 U.S.C.
2204b(b)) is amended by striking paragraph (4) and inserting the
following:
‘‘(4) COOPERATIVE AGREEMENTS.—
‘‘(A) IN GENERAL.—Notwithstanding chapter 63 of title
31, United States Code, the Secretary may enter into
cooperative agreements with other Federal agencies, State
and local governments, and any other organization or
individual to improve the coordination and effectiveness
of Federal programs, services, and actions affecting rural
areas, including the establishment and financing of inter-
agency groups, if the Secretary determines that the objec-
tives of the agreement will serve the mutual interest of
the parties in rural development activities.
‘‘(B) COOPERATORS.—Each cooperator, including each
Federal agency, to the extent that funds are otherwise
available, may participate in any cooperative agreement
or working group established pursuant to this paragraph
by contributing funds or other resources to the Secretary
to carry out the agreement or functions of the group.’’.
SEC. 759B. ELIGIBILITY FOR GRANTS TO BROADCASTING SYSTEMS.
Section 310B(f) of the Consolidated Farm and Rural Develop-
ment Act (7 U.S.C. 1932(f)) (as redesignated by section 747(a)(6))
is amended by striking ‘‘SYSTEMS.—The’’ and inserting ‘‘SYSTEMS.—
‘‘(1) DEFINITION
OF
STATEWIDE.—In this subsection, the
term ‘statewide’ means having a coverage area of not less
H. R. 2854—252
than 90 percent of the population of a State and not less
than 80 percent of the rural land area of the State (as deter-
mined by the Secretary).
‘‘(2) GRANTS.—The’’.
CHAPTER 2—RURAL COMMUNITY ADVANCEMENT
PROGRAM
SEC. 761. RURAL COMMUNITY ADVANCEMENT PROGRAM.
The Consolidated Farm and Rural Development Act (7 U.S.C.
1921 et seq.) is amended by adding at the end the following:
‘‘Subtitle E—Rural Community
Advancement Program
‘‘SEC. 381A. DEFINITIONS.
‘‘In this subtitle:
‘‘(1) RURAL AND RURAL AREA.—The terms ‘rural’ and ‘rural
area’ mean, subject to section 306(a)(7), a city, town, or unincor-
porated area that has a population of 50,000 inhabitants or
less, other than an urbanized area immediately adjacent to
a city, town, or unincorporated area that has a population
in excess of 50,000 inhabitants.
‘‘(2) STATE.—The term ‘State’ means each of the 50 States,
the District of Columbia, the Commonwealth of Puerto Rico,
Guam, the Virgin Islands of the United States, American
Samoa, the Commonwealth of the Northern Mariana Islands,
the Trust Territory of the Pacific Islands, and the Federated
States of Micronesia.
‘‘(3) STATE
DIRECTOR.—The term ‘State director’ means,
with respect to a State, the Director of the Rural Economic
and Community Development State Office.
‘‘SEC. 381B. ESTABLISHMENT.
‘‘The Secretary shall establish a rural community advancement
program to provide grants, loans, loan guarantees, and other assist-
ance to meet the rural development needs of local communities
in States and federally recognized Indian tribes.
‘‘SEC. 381C. NATIONAL OBJECTIVES.
‘‘The national objectives of the program established under this
subtitle shall be to—
‘‘(1) promote strategic development activities and collabo-
rative efforts by State and local communities, and federally
recognized Indian tribes, to maximize the impact of Federal
assistance;
‘‘(2) optimize the use of resources;
‘‘(3) provide assistance in a manner that reflects the
complexity of rural needs, including the needs for business
development, health care, education, infrastructure, cultural
resources, the environment, and housing;
‘‘(4) advance activities that empower, and build the capacity
of, State and local communities to design unique responses
to the special needs of the State and local communities, and
federally recognized Indian tribes, for rural development assist-
ance; and
H. R. 2854—253
‘‘(5) adopt flexible and innovative approaches to solving
rural development problems.
‘‘SEC. 381D. STRATEGIC PLANS.
‘‘(a) IN GENERAL.—The Secretary shall direct each of the Direc-
tors of Rural Economic and Community Development State Offices
to prepare a strategic plan—
‘‘(1) for each State for the delivery of assistance under
this subtitle in the State; and
‘‘(2) for each federally recognized Indian tribe for the deliv-
ery of assistance under this subtitle to the Indian tribe.
‘‘(b) ASSISTANCE.—
‘‘(1) IN GENERAL.—Financial assistance for rural develop-
ment provided under this subtitle for a State or a federally
recognized Indian tribe shall be used only for orderly commu-
nity development that is consistent with the strategic plan
of the State or Indian tribe.
‘‘(2) RURAL AREA.—Assistance under this subtitle may only
be provided in a rural area.
‘‘(3) SMALL
COMMUNITIES.—In carrying out this subtitle
in a State, the Secretary shall give priority to communities
with the smallest populations and lowest per capita income.
‘‘(c) REVIEW.—The Secretary shall review the strategic plan
of each State and federally recognized Indian tribe not later than
60 days after receiving the plan, and at least once every 5 years
thereafter.
‘‘(d) CONTENTS.—A strategic plan of a State or federally recog-
nized Indian tribe under this section shall be a plan that—
‘‘(1) coordinates economic, human, and community develop-
ment plans and related activities proposed for an affected area;
‘‘(2) provides that the State or federally recognized Indian
tribe, as appropriate, and an affected community (including
local institutions and organizations that have contributed to
the planning process) shall act as full partners in the process
of developing and implementing the plan;
‘‘(3) identifies goals, methods, and benchmarks for measur-
ing the success of carrying out the plan and how the plan
relates to local or regional ecosystems;
‘‘(4) in the case of a State, provides for the involvement,
in the preparation of the plan, of State, local, private, and
public persons, State rural development councils, federally rec-
ognized Indian tribes in the State, and community-based
organizations;
‘‘(5) identifies the amount and source of Federal and non-
Federal resources that are available for carrying out the plan;
and
‘‘(6) includes such other information as may be required
by the Secretary.
‘‘SEC. 381E. RURAL DEVELOPMENT TRUST FUND.
‘‘(a) ESTABLISHMENT.—There is established in the Treasury of
the United States a trust fund which shall be known as the Rural
Development Trust Fund (in this subtitle referred to as the ‘Trust
Fund’).
‘‘(b) ACCOUNTS.—There are established in the Trust Fund the
following accounts:
‘‘(1) The rural community facilities account.
‘‘(2) The rural utilities account.
H. R. 2854—254
‘‘(3) The rural business and cooperative development
account.
‘‘(4) The national reserve account.
‘‘(5) The federally recognized Indian tribe account.
‘‘(c) DEPOSITS INTO ACCOUNTS.—Notwithstanding any other
provision of law, each fiscal year—
‘‘(1) all amounts made available to carry out the authorities
described in subsection (d)(1) for the fiscal year shall be depos-
ited into the rural community facilities account of the Trust
Fund;
‘‘(2) all amounts made available to carry out the authorities
described in subsection (d)(2) for the fiscal year shall be depos-
ited into the rural utilities account of the Trust Fund; and
‘‘(3) all amounts made available to carry out the authorities
described in subsection (d)(3) for the fiscal year shall be depos-
ited into the rural business and cooperative development
account of the Trust Fund.
‘‘(d) FUNCTION CATEGORIES.—The function categories described
in this subsection are the following:
‘‘(1) RURAL COMMUNITY FACILITIES.—The rural community
development category consists of all amounts made available
for—
‘‘(A) community facility direct and guaranteed loans
under section 306(a)(1); or
‘‘(B) community facility grants under section 306(a)(19).
‘‘(2) RURAL UTILITIES.—The rural utilities category consists
of all amounts made available for—
‘‘(A) water or waste disposal grants or direct or guaran-
teed loans under paragraph (1) or (2) of section 306(a);
‘‘(B) rural water or wastewater technical assistance
and training grants under section 306(a)(14);
‘‘(C) emergency community water assistance grants
under section 306A; or
‘‘(D) solid waste management grants under section
310B(b).
‘‘(3) RURAL BUSINESS AND COOPERATIVE DEVELOPMENT.—
The rural business and cooperative development category con-
sists of all amounts made available for—
‘‘(A) rural business opportunity grants under section
306(a)(11)(A);
‘‘(B) business and industry guaranteed loans under
section 310B(a)(1); or
‘‘(C) rural business enterprise grants or rural edu-
cational network grants under section 310B(c).
‘‘(e) NATIONAL RESERVE ACCOUNT.—
‘‘(1) TRANSFERS INTO ACCOUNT.—
‘‘(A) INITIAL TRANSFER.—Each fiscal year, the Secretary
shall transfer to the national reserve account of the Trust
Fund from each account specified in subsection (c) not
more than the applicable percentage of the amount depos-
ited in each such account for the fiscal year under sub-
section (c).
‘‘(B) REPOOLING
OF
UNOBLIGATED
FUNDS
ALLOCATED
AMONG
THE
STATES.—Not earlier than July 15 of each
fiscal year, the Secretary shall transfer to the national
reserve account from each account specified in subsection
(c) any amount in the account that is allocated for any
H. R. 2854—255
State, and has not been obligated by the State director
or obligated for specific approved projects in the State.
‘‘(2) USE.—The Secretary may use amounts in the national
reserve account of the Trust Fund, pursuant to any authority
described in subsection (d)—
‘‘(A) in the case of a fiscal year other than fiscal year
2001 or 2002—
‘‘(i) to meet situations of exceptional need;
‘‘(ii) to meet emergency situations; or
‘‘(iii) to provide funds to entities whose applications
for funds provided under this subtitle have been
approved and who have not received funds sufficient
to meet the needs of the projects described in the
applications; or
‘‘(B) in the case of fiscal years 2001 and 2002—
‘‘(i) to meet situations of exceptional need; or
‘‘(ii) to meet emergency situations.
‘‘(3) APPLICABLE PERCENTAGE DEFINED.—In paragraph (1),
the term ‘applicable percentage’ means, with respect to a fiscal
year—
‘‘(A) 15 percent for fiscal year 1997;
‘‘(B) 12.5 percent for fiscal year 1998;
‘‘(C) 10 percent for fiscal year 1999;
‘‘(D) 7.5 percent for fiscal year 2000;
‘‘(E) 5 percent for fiscal year 2001; and
‘‘(F) 5 percent for fiscal year 2002.
‘‘(f) FEDERALLY RECOGNIZED INDIAN TRIBE ACCOUNT.—
‘‘(1) TRANSFERS INTO ACCOUNT.—Each fiscal year, the Sec-
retary shall transfer to the federally recognized Indian tribe
account of the Trust Fund 3 percent of the amount deposited
into the Trust Fund for the fiscal year under subsection (d).
‘‘(2) USE OF FUNDS.—The Secretary shall make available
to federally recognized Indian tribes the amounts in the feder-
ally recognized Indian tribe account for use pursuant to any
authority described in subsection (d).
‘‘(g) ALLOCATION AMONG STATES.—The Secretary shall allocate
the amounts in each account specified in subsection (c) among
the States in a fair, reasonable, and appropriate manner that takes
into consideration rural population, levels of income, unemployment,
and other relevant factors, as determined by the Secretary.
‘‘(h) AVAILABILITY OF FUNDS ALLOCATED FOR STATES.—The Sec-
retary shall make available to each State the total amount allocated
for the State under subsection (g) of this section that remains
after applying section 381G.
‘‘SEC. 381F. TRANSFERS OF FUNDS.
‘‘(a) GENERAL AUTHORITY.—Subject to subsection (b) of this
section, the State Director of any State may, during any fiscal
year, transfer from each account specified in section 381E(c) a
total of not more than 25 percent of the amount in the account
that is allocated for the State for the fiscal year to any other
account in which amounts are allocated for the State for the fiscal
year.
‘‘(b) LIMITATION.—Except as provided in subsection (c) of this
section, a transfer otherwise authorized by subsection (a) of this
section to be made during a fiscal year may not be made to the
extent that the sum of the amount to be transferred and all amounts
H. R. 2854—256
so transferred by State directors under subsection (a) of this section
during the fiscal year exceeds 10 percent of the total amount made
available to carry out the authorities described in section 381E(d)
for the fiscal year.
‘‘(c) EXCEPTIONS.—Subsections (a) and (b) shall not apply to
a transfer of funds by a State director if the State director certifies
to the Secretary that—
‘‘(1) there is an approved application for a project in the
function category to which the funds are to be transferred
but funds are not available for the project in the function
category; and
‘‘(2)(A) there is no such approved application in the function
category from which the funds are to be transferred; or
‘‘(B) the community that would benefit from the project
has a smaller population and a lesser per capita income than
any community that would benefit from a project in the function
category from which the funds are to be transferred.
‘‘SEC. 381G. GRANTS TO STATES.
‘‘(a) SIMPLE GRANTS.—
‘‘(1) MANDATORY GRANT.—The Secretary shall make a grant
to any eligible State for any fiscal year for which the State
requests a grant under this section in an amount equal to
5 percent of the total amount allocated for the State under
section 381E(g).
‘‘(2) PERMISSIVE GRANT.—Before July 15 of each fiscal year,
the Secretary may make a grant to any State to defray the
cost of any subsidy associated with a guarantee provided by
an eligible public entity of the State under section 381H in
an amount that does not exceed 5 percent of the total amount
allocated for the State under section 381E(g).
‘‘(3) SOURCE OF FUNDS.—The Secretary shall make grants
to a State under paragraphs (1) and (2) from amounts allocated
for the State in the accounts specified in section 381E(c), by
reducing each such allocated amount by the same percentage.
‘‘(b) MATCHING GRANTS.—
‘‘(1) IN GENERAL.—Subject to paragraph (2), the Secretary
shall make a grant to any eligible State for any fiscal year
for which the State requests a grant under this section in
an amount equal to 5 percent of the amount allocated for
the State for the fiscal year under section 381E(h).
‘‘(2) ELIGIBILITY.—A State shall be eligible for a grant
under paragraph (1) if the State makes commitments to the
Secretary to—
‘‘(A) expend from non-Federal sources in accordance
with subsection (c) an amount that is not less than 200
percent of the amount of the grant; and
‘‘(B) maintain the amounts paid to the State under
this subsection and the amount referred to in subparagraph
(A) in an account separate from all other State funds
until expended in accordance with subsection (c).
‘‘(3) SOURCE OF FUNDS.—If the Secretary makes a grant
under paragraph (1) before July 15 of the fiscal year, the
grant shall be made from amounts allocated for the State
in the accounts specified in section 381E(c) for the fiscal year,
by reducing each allocated amount by the same percentage.
H. R. 2854—257
‘‘(c) USE
OF FUNDS.—A State to which funds are provided
under this section shall use the funds in rural areas for any activity
authorized under the authorities described in section 381E(d) in
accordance with the State strategic plan referred to in section
381D.
‘‘(d) MAINTENANCE OF EFFORT.—The State shall provide assur-
ances to the Secretary that funds provided to the State under
this section will be used only to supplement, not to supplant,
the amount of Federal, State, and local funds otherwise expended
for rural development assistance in the State.
‘‘(e) APPEALS.—The Secretary shall provide to a State an oppor-
tunity to appeal any action taken with respect to the State under
this section.
‘‘(f) ADMINISTRATIVE COSTS.—Federal funds shall not be used
for any administrative costs incurred by a State in carrying out
this subtitle.
‘‘(g) EXPENDITURE OF FUNDS BY STATE.—
‘‘(1) IN GENERAL.—Payments to a State from a grant under
this section for a fiscal year shall be obligated by the State
in the fiscal year or in the succeeding fiscal year. A State
shall obligate funds under this section to provide assistance
to rural areas.
‘‘(2) FAILURE
TO
OBLIGATE.—If a State fails to obligate
payments in accordance with paragraph (1), the Secretary shall
make an equal reduction in the amount of payments provided
to the State under this section for the immediately succeeding
fiscal year.
‘‘(3) NONCOMPLIANCE.—
‘‘(A) REVIEW.—The Secretary shall review and monitor
State compliance with this section.
‘‘(B) PENALTY.—If the Secretary finds that there has
been misuse of grant funds provided under this section,
or noncompliance with any of the terms and conditions
of a grant, after reasonable notice and opportunity for
a hearing—
‘‘(i) the Secretary shall notify the State of the
finding; and
‘‘(ii) no further payments to the State shall be
made with respect to the programs funded under this
section until the Secretary is satisfied that there is
no longer any failure to comply or that the noncompli-
ance will be promptly corrected.
‘‘(C) OTHER SANCTIONS.—In the case of a finding of
noncompliance made pursuant to subparagraph (B), the
Secretary may, in addition to, or in lieu of, imposing the
sanctions described in subparagraph (B), impose other
appropriate sanctions, including recoupment of money
improperly expended for purposes prohibited or not author-
ized by this section and disqualification from the receipt
of financial assistance under this section.
‘‘(h) NO ENTITLEMENT TO CONTRACT, GRANT, OR ASSISTANCE.—
Nothing in this subtitle—
‘‘(1) entitles any person to assistance or a contract or grant;
or
‘‘(2) limits the right of a State to impose additional limita-
tions or conditions on assistance or a contract or grant under
this section.
H. R. 2854—258
‘‘SEC. 381H. GUARANTEE AND COMMITMENT TO GUARANTEE LOANS.
‘‘(a) DEFINITION OF ELIGIBLE PUBLIC ENTITY.—In this section,
the term ‘eligible public entity’ means any unit of general local
government.
‘‘(b) GUARANTEE AND COMMITMENT.—The Secretary, on such
terms and conditions as the Secretary may prescribe, may guarantee
and make commitments to guarantee notes or other obligations
issued by eligible public entities, or by public agencies designated
by the eligible public entities, for the purposes of financing rural
development activities authorized and funded under section 381G.
‘‘(c) LIMITATION.—The Secretary may not make a guarantee
or commitment to guarantee with respect to a note or other obliga-
tion if the total amount of outstanding notes or obligations guaran-
teed under this section (excluding any amount repaid under the
contract entered into under subsection (e)(1)(A)) for issuers in the
State would exceed an amount equal to 5 times the sum of the
total amount of grants made to the State under section 381G.
‘‘(d) PAYMENT OF PRINCIPAL, INTEREST, AND COSTS.—Notwith-
standing any other provision of this subtitle, a State to which
a grant is made under section 381G may use the grant (including
program income derived from the grant) to pay principal and
interest due (including such servicing, underwriting, or other costs
as may be specified in regulations of the Secretary) on any note
or other obligation guaranteed under this section.
‘‘(e) REPAYMENT CONTRACT; SECURITY.—
‘‘(1) IN GENERAL.—To ensure the repayment of notes or
other obligations and charges incurred under this section and
as a condition for receiving the guarantees, the Secretary shall
require the issuer to—
‘‘(A) enter into a contract, in a form acceptable to
the Secretary, for repayment of notes or other obligations
guaranteed under this section;
‘‘(B) pledge any grant for which the issuer may become
eligible under this subtitle; and
‘‘(C) furnish, at the discretion of the Secretary, such
other security as may be considered appropriate by the
Secretary in making the guarantees.
‘‘(2) SECURITY.—To assist in ensuring the repayment of
notes or other obligations and charges incurred under this
section, a State shall pledge any grant for which the State
may become eligible under this subtitle as security for notes
or other obligations and charges issued under this section by
any eligible public entity in the State.
‘‘(f) PLEDGED GRANTS FOR REPAYMENTS.—Notwithstanding any
other provision of this subtitle, the Secretary may apply grants
pledged pursuant to paragraphs (1)(B) and (2) of subsection (e)
to any repayments due the United States as a result of the guaran-
tees.
‘‘(g) OUTSTANDING OBLIGATIONS.—The total amount of outstand-
ing obligations guaranteed on a cumulative basis by the Secretary
pursuant to subsection (b) shall not at any time exceed such amount
as may be authorized to be appropriated for such purpose for
any fiscal year.
‘‘(h) PURCHASE
OF GUARANTEED OBLIGATIONS
BY FEDERAL
FINANCING BANK.—Notes or other obligations guaranteed under
this section may not be purchased by the Federal Financing Bank.
H. R. 2854—259
‘‘(i) FULL FAITH AND CREDIT.—The full faith and credit of the
United States is pledged to the payment of all guarantees made
under this section. Any such guarantee made by the Secretary
shall be conclusive evidence of the eligibility of the obligations
for the guarantee with respect to principal and interest. The validity
of the guarantee shall be incontestable in the hands of a holder
of the guaranteed obligations.
‘‘SEC. 381I. LOCAL INVOLVEMENT.
‘‘An application for assistance under this subtitle shall include
evidence of significant community support for the project for which
the assistance is requested. In the case of assistance for a commu-
nity facilities or infrastructure project, the evidence shall be in
the form of a certification of support for the project from each
affected general purpose local government.
‘‘SEC. 381J. INTERSTATE COLLABORATION.
‘‘The Secretary shall permit the establishment of voluntary
pooling arrangements among States, and regional fund-sharing
agreements, to carry out projects receiving assistance under this
subtitle.
‘‘SEC. 381K. ANNUAL REPORT.
‘‘(a) IN GENERAL.—The Secretary, in collaboration with State,
local, public, and private entities, State rural development councils,
and community-based organizations, shall prepare an annual report
that contains evaluations, assessments, and performance outcomes
concerning the rural community advancement programs carried
out under this subtitle.
‘‘(b) SUBMISSION.—Not later than March 1 of each year, the
Secretary shall—
‘‘(1) submit the report required by subsection (a) to Con-
gress and the chief executives of the States participating in
the program established under this subtitle; and
‘‘(2) make the report available to State and local partici-
pants.
‘‘SEC. 381L. RURAL DEVELOPMENT INTERAGENCY WORKING GROUP.
‘‘(a) IN GENERAL.—The Secretary shall provide leadership
within the Executive branch for, and assume responsibility for,
establishing an interagency working group chaired by the Secretary.
‘‘(b) DUTIES.—The working group shall establish policy for,
coordinate, make recommendations with respect to, and evaluate
the performance of, all Federal rural development efforts.
‘‘SEC. 381M. DUTIES OF RURAL ECONOMIC AND COMMUNITY DEVELOP-
MENT STATE OFFICES.
‘‘In carrying out this subtitle, the Director of a Rural Economic
and Community Development State Office shall—
‘‘(1) to the maximum extent practicable, ensure that the
State strategic plan referred to in section 381D is implemented;
‘‘(2) coordinate community development objectives within
the State;
‘‘(3) establish links between local, State, and field office
program administrators of the Department of Agriculture;
‘‘(4) ensure that recipient communities comply with
applicable Federal and State laws and requirements; and
H. R. 2854—260
‘‘(5) integrate State development programs with assistance
under this subtitle.
‘‘SEC. 381N. ELECTRONIC TRANSFER.
‘‘The Secretary shall transfer funds in accordance with this
subtitle through electronic transfer as soon as practicable after
the date of enactment of this subtitle.
‘‘SEC. 381O. RURAL VENTURE CAPITAL DEMONSTRATION PROGRAM.
‘‘(a) IN GENERAL.—The Secretary may designate for each fiscal
year up to 10 community development venture capital organizations
to demonstrate the utility of guarantees to attract increased private
investment in rural private business enterprises.
‘‘(b) RURAL BUSINESS INVESTMENT POOL.—
‘‘(1) ESTABLISHMENT.—To be eligible to participate in the
demonstration program, an organization referred to in sub-
section (a) shall establish a rural business private investment
pool (referred to in this subsection as a ‘pool’) for the purpose
of making equity investments in rural private business enter-
prises.
‘‘(2) GUARANTEE.—From amounts in the national reserve
account of the Trust Fund, the Secretary shall guarantee the
funds in a pool against loss, except that the guarantee shall
not exceed an amount equal to 30 percent of the total funds
in the pool.
‘‘(3) AMOUNT.—The Secretary shall issue guarantees cover-
ing not more than $15,000,000 of contingent liabilities for each
of fiscal years 1996 through 2002.
‘‘(4) TERM.—The term of a guarantee provided under this
subsection shall not exceed 10 years.
‘‘(5) SUBMISSION
OF
PLAN.—To be eligible to participate
in the demonstration program, an organization referred to in
subsection (a) shall submit a plan that describes—
‘‘(A) potential sources and uses of the pool to be estab-
lished by the organization;
‘‘(B) the utility of the guarantee authority in attracting
capital for the pool; and
‘‘(C) on selection, mechanisms for notifying State, local,
and private nonprofit business development organizations
and businesses of the existence of the pool.
‘‘(6) COMPETITION.—
‘‘(A) IN GENERAL.—The Secretary shall conduct a com-
petition for the designation and establishment of pools.
‘‘(B) PRIORITY.—In conducting the competition, the Sec-
retary shall give priority to organizations that—
‘‘(i) have a demonstrated record of performance,
or have a board and executive director with experience,
in venture capital, small business equity investment,
or community development finance;
‘‘(ii) propose to serve low-income communities;
‘‘(iii) propose to maintain an average investment
of not more than $500,000 from the pool of the
organization;
‘‘(iv) invest funds statewide or in a multicounty
region; and
‘‘(v) propose to target job opportunities resulting
from the investments primarily to economically dis-