161

1 amount, as determined under subsection (c), he shall adjust 2 the amount of such basic grant entitlement over a period not 3 exceeding three years, so that the city's basic grant entitle4 ment will be increased, by such steps as the Secretary deter5 mines to be equitable and feasible, from an amount equal 6 to 135 per centum of its hold-harmless amount up to its full 7 basic grant entitlement. Any amounts not used by virtue of 8 the operation of the preceding sentence shall be available for 9 use by the Secretary, first, for hold-harmless purposes in any 10 metropolitan area, and second, for grants to States and 11 units of general local government for use in any metropolitan

12

13

area.

(e) The remainder of the allocation for any metro14 politan area shall be allocated by the Secretary to States 15 and units of general local government for use in that metro16 politan area, taking into consideration such factors as popu17 lation, extent of poverty, extent of housing overcrowding, 18 and other social and fiscal conditions in that metropolitan 19 area. Any portion of the remainder of the allocation for each 20 metropolitan area which the Secretary determines will be 21 unused at the end of the fiscal year for which it was allocated 22 shall be available for use in any metropolitan area.

2 23

24

(f) Any unit of general local government which is not

a metropolitan city shall be eligible for annual grants in an

162

1 aggregate amount at least equal to its hold-harmless amount

2

as computed under the provisions of subsection (c), if, during 3 the five fiscal years preceding the date of the enactment 4 of this Act, one or more urban renewal projects or neigh5 borhood development programs were being carried out by 6 such unit of general local government pursuant to commit7 ments for assistance entered into during such five-year period 8 under title I of the Housing Act of 1949.

9

(g) of the amount available for obligation under section 10 406 (a), 20 per centum shall be allocated by the Secretary— (1) first, for hold-harmless purposes outside of metropolitan areas; and

11

12

23

13

14

15

16

17

18

(2) second, for grants to States and units of general local government for use outside of metropolitan areas, taking into consideration such factors as population,

extent of poverty, extent of housing deficiencies, and other social and fiscal conditions.

(h) If, at the time the Secretary computes the amount 19 of any allocation or the amount of any annual grants to 20 which a unit of general local government is entitled under 21 this title, the full amount of funds authorized to be appropri22 ated is not available for obligation as prescribed in section 23 406 (a), the Secretary may (notwithstanding any other 24 provision of this title) make such adjustments in that

163

1 computation as he deems desirable to maintain a distribution

2 of funds consistent with the objectives of this Act.

3 (i) In the case of new community development pro

4

grams which meet the eligibility standards of section 712

5 of the Urban Growth and New Community Development Act 6 of 1970, or of title IV of the Housing and Urban Develop7 ment Act of 1968, the Secretary shall make allocations, 8 under subsections (e) and (g) of this section and the last 9 sentence of subsection (d), which take into account the as10 sistance required for community development activities which 11 the Secretary determines are necessary or desirable for the new community involved.

12

13

(j) All computations and determinations by the Sec14 retary under this section shall be final and conclusive.

15

16

LOANS FOR LAND ACQUISITION

SEC. 408. (a) The Secretary is authorized to make 17 loans to States and units of general local government to pro18 vide financing for real property acquisition activities author19 ized under section 405 (a) (1) (A) with respect to which

grants are to be distributed under section 407. A loan made

by the Secretary under this section shall

(1) bear interest at a rate specified by the Secretary

which shall not be less than a rate determined by the

Secretary of the Treasury taking into consideration the

current average market yield on outstanding marketable

164

1 obligations of the United States with remaining periods

2

3

4

5

6

7

8

9

to maturity comparable to the average maturities of

such loans, plus one-eighth of 1 per centum;

(2) be secured in such manner and repaid within

such period as may be prescribed by the Secretary; and (3) have a principal amount which the Secretary determines is sufficient to finance the acquisition of the real property.

(b) To obtain funds for loans under this section, the 10 Secretary may issue and have outstanding at any one time 11 obligations for purchase by the Secretary of the Treasury 12 in an amount which shall not, unless authorized by the 13 President, exceed one-fourth of the total amount which is 14 available under section 406 for distribution during the 15 fiscal year ending June 30, 1974. For the purpose of estab16 lishing unpaid obligations as of a given date against the au17 thorization contained in the preceding sentence, the Secre18 tary shall estimate the maximum amount to be required to be 19 borrowed from the Treasury and outstanding at any one time 20 with respect to loan commitments in effect on such date. The 21 obligations issued under this subsection shall have such ma22 turities and bear such rate or rates of interest as shall be 23 determined by the Secretary of the Treasury. The Secretary 24 of the Treasury is authorized and directed to purchase any 25 obligations so issued, and for that purpose he is authorized to

165

1

use as a public debt transaction the proceeds from the sale

2 of any securities issued under the Second Liberty Bond Act, 3 and the purposes for which securities may be issued under 4 that Act are extended to include purchases of the obligations 5 hereunder. The Secretary of the Treasury may at any time 6 sell any of the obligations acquired by him under this section. 7 All redemptions, purchases, and sales by the Secretary of 8 the Treasury of such obligations shall be treated as public 9 debt transactions of the United States.

10 (c) The Secretary is authorized to consent to a pledge

.

11 by any State or unit of general local government of a loan 12 contract entered into pursuant to subsection (a), and of any 13 or all of its rights thereunder, as security for the repayment 14 of the principal of and the interest on loan funds obtained 15 from sources other than the Federal Government for the 16 purpose set forth in subsection (a). Obligations issued by a 17 unit of general local government which are secured by a 18 pledge of the loan contract pursuant to the preceding sen19 tence and bear, or are accompanied by, a certificate of the 20. Secretary that such obligations are so secured, shall be in21 contestable in the hands of a bearer, and the full faith and 22 credit of the United States is pledged to the payment of all 23 amounts agreed to be paid by the Secretary as security for 24 such obligations.