an amount not exceeding $500,000,000 (or such greater amount as may be approved by the President) notes or other obligations in such forms and denominations, bearing such maturities, and 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, taking into consideration the current average market yield on outstanding marketable obligations of the United States of comparable maturities during the month preceding the issuance of such notes or other obligations.

§ 1923

CONSOLIDATED FARMERS HOME

ADMINISTRATION

CONSOLIDATED FARMERS HOME ADMINISTRATION ACT OF 1961, AS AMENDED

1921.

[Public Law 87-128, 75 Stat. 307, 7 U.S.C. 1921]

Congressional findings

The Congress hereby finds that the statutory authority of the Secetary of Agriculture, hereinafter referred to in this chapter as the Secretary," for making and insuring loans to farmers and ranchers hould be revised and consolidated to provide for more effective redit services to farmers.

1922. Persons eligible for loans

The Secretary is authorized to make and insure loans under this ubchapter to farmers and ranchers in the United States and in Puerto Rico and the Virgin Islands who (1) are citizens of the United States, 2) have a farm background, except with respect to veterans as defined n section 1983 (e) of this title, a farm background shall not be required as a condition precedent to obtaining any loan, and either raining or farming experience which the Secretary determines is sufficient to assure reasonable prospects of success in the proposed farming operations, (3) are or will become owner-operators of not larger than family farms, and (4) are unable to obtain sufficient credit elsewhere to finance their actual needs at reasonable rates and terms, taking into consideration prevailing private and cooperative rates and terms in the community in or near which the applicant resides for loans for similar purposes and periods of time.

1923. Purposes of loans; preferences

(a)1 Loans may be made or insured under this subchapter for (1) acquiring, enlarging, or improving farms, including farm buildings, land and water development, use and conservation, (2) recreational uses and facilities, (3) enterprises needed to supplement farm income, (4) refinancing existing indebtedness, and (5) loan closing costs. In making or insuring loans for farm purchase, the Secretary shall give preference to persons who are married or have dependent families and, wherever practicable, to persons who are able to make initial downpayments, or who are owners of livestock and farm implements necessary successfully to carry on farming operations. (b) For purposes of this subtitle

(1) the term "improving farms" includes, but is not limited to, the acquisition and installation af any qualified non-fossil energy system in any residential structure located on a family farm; and

(2) the term "qualified non-fossile energy system" means any system that utilizes technologies to generate fuel, energy, or

1 Sec. 1448 of the Food and Agriculture Act of 1977, Public Law 95-113, approved September 29, 1977, amended section 1923 by inserting (a) and inserted new subsection (b).

energy intensive products from products other than fossil fuels as included in the Federal Non-Nuclear Energy Research and Devel opment Act of 1974, as amended, which meets such standards as may be prescribed by the Secretary, taking into consideration appropriate and available standards prescribed by the Secretary of Housing and Urban Development.

§ 1924. Soil and water conservation, recreational facilities and uses, and rural enterprise loans

(a) Loans may also be made or insured under this subchapter to any farmowners or tenants without regard to the requirements of section 1922(1), (2), and (3) of this title for the purposes only of land and water development, use and conservation, not including recreational uses and facilities, and without regard to the requirements of section 1922 (2) and (3) of this title, to individual farmowners or tenants to finance outdoor recreational enterprises or to convert to recreational uses their farming or ranching operations. including those heretofore financed under this chapter.

(b) Loans may also be made or insured under this subchapter to residents of rural areas without regard to the requirements of clauses (2) and (3) of section 1922 of this title to acquire or establish in rural areas small business enterprises to provide such residents with essential income.

§1925. Limitation on amount of loan

The Secretary shall make or insure no loan under sections 1929 1923, and 1924 of this title which would cause (a) the unpaid in debtedness against the farm or other security at the time the loan is made to exceed $225,000 or the value of the farm or other security (b) the loans under such sections to any one borrower to exceed $100.000, or (c) the loan to exceed the amount certified by the county com mittee. In determining the value of the farm, the Secretary shall consider appraisals made by competent appraisers under rules estab lished by the Secretary.

§ 1926. Water and waste facility loans and grants-Criteria; definitions; limitation on allowable uses of Federal

funds; inclusion of interest or other income in gross income on sale of insured loan

(a) (1) The Secretary is also authorized to make or insure loans to associations, including corporations not operated for profit, Indian tribes on Federal and State reservations and other federally recognized Indian tribes, and public and quasi-public agencies to provide for the application or establishment of soil conservation practices, shifts in land use, the conservation, development, use, and control of water, and the installation or improvement of drainage or waste disposal facilities, recreational developments, and essential community facilities including necessary related equipment, all primarily serving farmers ranchers, farm tenants, farm laborers, and other rural residents, and to furnish financial assistance or other aid in planning projects for such purposes. When any loan made for a purpose specified in this paragraph is sold out of the Agricultural Credit Însurance Fund as an insured loan, the interest or other income thereon paid to an insured holder shall be included in gross income for purposes of chapter 1 of

Title 26.

(2) The Secretary is authorized to make grants aggregating not O exceed $300,000,000 in any fiscal year to such associations to finance pecific projects for works for the development, storage, treatment, urification, or distribution of water or the collection, treatment, or isposal of waste in rural areas. The amount of any grant made under e authority of this paragraph shall not exceed 50 per centum of the evelopment cost of the project to serve the area which the association etermines can be feasibly served by the facility and to adequately erve the reasonably foreseeable growth needs of the area.

(3) No grant shall be made under paragraph (2) of this subsecon in connection with any project unless the Secretary determines at the project (i) will serve a rural area which, if such project is arried out, is not likely to decline in population below that for hich the project was designed, (ii) is designed and constructed so nat adequate capacity will or can be made available to serve the resent population of the area to the extent feasible and to serve he reasonably foreseeable growth needs of the area, and (iii) is ecessary for an orderly community development consistent with a omprehensive community water, waste disposal, or other development plan of the rural area and not inconsistent with any planned evelopment provided in any State, multijurisdictional, county, or nunicipal plan approved by competent authority for the area in which the rural community is located, and the Secretary shall require the submission of all applications for financial assistance unler this section to the multijurisdictional substate area wide general purpose planning and development agency that has been officially designated as a clearinghouse agency under Office of Management nd Budget Circular A-95 and to the county or municipal governnent having jurisdiction over the area in which the proposed project is to be located for review and comment within a designated period of time not to exceed 30 days concerning among other consideritions, the effect of the project upon the area wide goals and plans of such agency or government. No loan under this section shall be nade that is inconsistent with any multijurisdictional planning and levelopment district areawide plan of such agency. The Secretary s authorized to reimburse such agency or government for the cost of making the required review. Until October 1, 1973, the Secretary may make grants prior to the completion of the comprehensive plan, if the preparation of such plan has been undertaken for the area. (4) (A) The term "development cost" means the cost of construcion of a facility and the land, easements, and rights-of-way, and water rights necessary to the construction and operation of the facility.

(B) The term "project" shall include facilities providing central service or facilities serving individual properties, or both.

(5) Repealed. Pub. L. 92-419, Title I, § 110, Aug. 30, 1972, 86 Stat.

659.

(6) The Secretary may make grants aggregating not to exceed $30,000,000 in any fiscal year to public bodies or such other agencies as the Secretary may determine having authority to prepare comprehensive plans for the development of water or waste disposal systems in rural areas which do not have funds available for immediate undertaking of the preparation of such plan.

(7) As used in this chapter, the terms "rural" and "rural area” shall not include any area in any city or town which has a popula

tion in excess of ten thousand inhabitants, except that for purposes of loans and grants for private business enterprises under sections 1924 (b), 1932, and 1942(b), (c), and (d) of this title the terms “rural" and "rural area" may include all territory of a State, the Commonwealth of Puerto Rico and the Virgin Islands, that is not within the outer boundary of any city having a population of fifty thousand or more and its immediately adjacent urbanized and urbanizing areas with a population density of more than one hundred persons per square mile, as determined by the Secretary of Agriculture according to the latest decennial census of the United States: Provided, That special consideration for such loans and grants shall be given to areas other than cities having a population of more than twenty-five thousand.

(8) In each instance where the Secretary receives two or more applications for financial assistance for projects that would serve substantially the same group of residents within a single rural area, and one such application is submitted by a city, town, county or other unit of general local government, he shall, in the absence of substantial reasons to the contrary, provide such assistance to such city, town, county or other unit of general local government.

(9) No Federal funds shall be authorized for use unless it be certified by the appropriate State water pollution control agency that the water supply system authorized will not result in pollution of waters of the State in excess of standards established by that agency.

(10) In the case of sewers and waste disposal systems, no Federal funds shall be advanced hereunder unless the appropriate State water pollution control agency shall certify that the effluent therefrom shall conform with appropriate State and Federal water pollution control standards when and where established.

(11) The Secretary may make grants, not to exceed $10,000,000 annually, to public bodies or such other agencies as he may select to prepare comprehensive plans for rural development or such aspects of rural development as he may specify.

(12) In the making of loans and grants for community waste disposal and water facilities under paragraphs (1) and (2) of this subsection the Secretary shall accord highest priority to the application of any municipality or other public agency (including an Indian tribe on a Federal or State reservation or other federally recognized Indian tribal group) in a rural community having a population not in excess of five thousand five hundred and which, in the case of water facility loans, has a community water supply system, where the Secretary determines that due to unanticipated diminution or deterioration of its water supply, immediate action is needed, or in the case of waste disposal, has a community waste disposal system, where the Secretary determines that due to unanticipated occurrences the system is not adequate to the needs of the community. The Secretary shall utilize the Soil Conservation Service in rendering technical assistance to applicants under this paragraph to the extent he deems appropriate.

(13) (A) The Secretary, under such reasonable rules and conditions as he shall establish, shall make grants to eligible volunteer fire departments for up to 50 per centum of the cost of firefighting equipment needed by such departments but which such departments are unable to purchase through the resources otherwise available to them, and for the cost of the training necessary to enable such departments to use such equipment efficiently.