169 1 (b) The Secretary is authorized to transfer the assets 2 and liabilities of any program of housing or urban develop3 ment which is superseded or inactive by reason of this title 4 to the revolving fund for liquidating programs established 5 pursuant to title II of the Independent Offices Appropria6 tion Act of 1955 (Public Law 81-428; 68 Stat. 272, 295). TITLE V-STATE DEVELOPMENT AGENCIES 7 8 9 13 DECLARATION OF PURPOSE SEC. 501. It is the purpose of this title to encourage the 10 formation of State development agencies which have broad 11 and flexible authority to carry out development activities 12 designed to (1) provide housing and related facilities for persons and families of low and moderate income, (2) pro14 mote the sound growth and development of neighborhoods 15 through the revitalization of slum and blighted areas, and 16 (3) increase and improve employment opportunities for 17 the unemployed and underemployed through the development 18 and redevelopment of industrial, manufacturing, and com19 mercial facilities. 220 21 ELIGIBLE DEVELOPMENT AGENCIES SEC. 502. (a) A State development agency is eligible 22 for assistance under this title only if the Secretary deter23 mines that it is fully empowered and has adequate authority, 24 acting as a large-scale developer, to carry out the purposes 25 specified in clauses (1), (2), and (3) of section 501, 170 1 including the authority to sell, lease, or otherwise dispose of 2 its interest in projects undertaken by it in carrying out the 3 purposes of this title, to participate in programs or projects 4 carried on by Federal, State, or local governments, to pro5 vide for the relocation of persons, families, business concerns, 6 and nonprofit organizations displaced in carrying out its de7 velopment activities, to exercise its powers and functions 8 through subsidiaries established by it, and to establish com9 munity advisory committees to advise it concerning its pro10 posed activities in any area. 11 (b) For the purposes of this title, a "State development 12 agency" is any public body or agency, publicly sponsored 13 corporation, or instrumentality of one or more States which 14 is designated by the Governor (or Governors in the case of 15 an interstate development agency) for purposes of this title. (c) As used in this title, the term "State" means any 17 State of the United States, the District of Columbia, the 18 Commonwealth of Puerto Rico, or any territory or posses19 sion of the United States. 16 222 20 GUARANTEES OF OBLIGATIONS 21 SEC. 503. (a) The Secretary of Housing and Urban Development (hereinafter referred to as the "Secretary") 22 23 is authorized to guarantee, and enter into commitments to 24 guarantee, the bonds, debentures, notes, and other obliga25 tions issued by State development agencies to finance devel 7 171 1 opment activities as determined by him to be in furtherance 2 of the purpose of this title. The Secretary may make such 3 guarantees and enter into such commitments upon such terms 4 and conditions as he may prescribe; except that no obligation 5 shall be guaranteed under this title if the income from such 6 obligation is exempt from Federal taxation. The Secretary is authorized to make grants to any State development 8 agency the obligations of which are guaranteed under this 9 title in amounts estimated by him not to exceed the differ10 ence between the interest paid on such obligations and the 11 interest (as estimated by him) which would be paid under 12 the interest rate (decreased by one-half of 1 per centum) 13 on similar obligations the income from which is exempt from 14 Federal taxation. 15 (b) The full faith and credit of the United States is 16 pledged to the payment of all guarantees made under this 17 title with respect to principal, interest, and any redemption 18 premiums. Any such guarantee made by the Secretary shall be conclusive evidence of the eligibility of the obligations in 19 20 volved for such guarantee, and the validity of any guarantee 22220 21 so made shall be incontestable in the hands of a holder of the 22 guaranteed obligation. 23 (c) The Secretary is authorized to establish and col 24 lect such fees and charges for and in connection with guaran tees made under this title as he considers reasonable. 172 1 (d) The aggregate principal amount of the obligations 2 which may be guaranteed under this title and outstanding 3 at any one time shall not exceed $500,000,000. 4 5 LIMITATION ON GUARANTEES SEC. 504. The Secretary shall take such steps as he con 6 siders reasonable to assure that bonds, debentures, notes, and 7 other obligations which are guaranteed under section 503 8 will 25 (1) be issued only to investors approved by, or meeting requirements prescribed by, the Secretary, or, if an offering to the public is contemplated, be underwritten upon terms and conditions approved by the Secretary; (2) bear interest at a rate satisfactory to the Secretary; (3) contain or be subject to repayment, maturity, and other provisions satisfactory to the Secretary; and (4) contain or be subject to provisions with respect to the protection of the security interests of the United States, including any provisions deemed appropriate by the Secretary relating to subrogation, liens, and releases of liens, payment of taxes, cost certification procedures, escrow or trusteeship requirements, or other matters. REVOLVING FUND SEC. 505. (a) The Secretary is authorized to establish 26 a revolving fund to provide for the timely payment of any 11 173 1 liabilities incurred as a result of guarantees or grants under 2 section 503 and for the payment of obligations issued to the 3 Secretary of the Treasury under subsection (b) of this sec4 tion. Such revolving fund shall be comprised of (1) receipts 5 from fees and charges; (2) recoveries under security, sub6 rogation, and other rights; (3) repayments, interest income, 7 and any other receipts obtained in connection with guar8 antees made under section 503; (4) proceeds of the obliga9 tions issued to the Secretary of the Treasury pursuant to 10 subsection (b) of this section; and (5) such sums, which are hereby authorized to be appropriated, as may be required 12 for the purpose of making grants to agencies under section 13 503, and for other purposes under this title. Money in the 14 revolving fund not currently needed for the purpose of this 15 title shall be kept in cash on hand or on deposit, or invested 16 in obligations of the United States or guaranteed thereby, 17 or in obligations, participations, or other instruments which 18 are lawful investments for fiduciary, trust, or public funds. (b) The Secretary may issue obligations to the Secre20 tary of the Treasury in an amount sufficient to enable the 21 Secretary to carry out his functions with respect to the guar22 antees authorized by section 503. The obligations issued 23 under this subsection shall have such maturities and bear 24 such rate or rates of interest as shall be determined by the 25 Secretary of the Treasury. The Secretary of the Treasury 26 is authorized and directed to purchase any obligations so 19 |