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 7 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) 15 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 19 be conclusive evidence of the eligibility of the obligations in20 volved for such guarantee, and the validity of any guarantee 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 col24 lect such fees and charges for and in connection with guaran 25 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 (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 a revolving fund to provide for the timely payment of any 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 11 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 19 174. 1 issued, and for that purpose he is authorized to use as a 2 public debt transaction the proceeds from the sale of any 3 securities issued under the Second Liberty Bond Act, and 4 the purposes for which securities may be issued under that 5 Act are extended to include purchases of the obligations 6 hereunder. 7 (c) Notwithstanding any other provision of law relating 8 to the acquisition, handling, improvement, or disposal of real 9 and other property by the United States, the Secretary shall 10 have power, for the protection of the interests of the fund 11 authorized under this section, to pay out of such fund all 12 expenses or charges in connection with the acquisition, han13 dling, improvement, or disposal of any property, real or 14 personal, acquired by him as a result of recoveries under 15 security, subrogation, or other rights. 16 17 TECHNICAL ASSISTANCE SEC. 506. The Secretary is authorized to provide, either 18 directly or by contract or other arrangements, technical as19 sistance to State development agencies to assist them in con20 nection with planning and carrying out development 21 activities in furtherance of the purpose of this title. 23 SEC. 507. All laborers and mechanics employed by con24 tractors or subcontractors in development activities assisted 25 under this title shall be paid wages at rates not less than 175 1 those prevailing on similar work in the locality as determined 2 by the Secretary of Labor in accordance with the Davis3 Bacon Act, as amended (40 U.S.C. 276a-276a-5): Pro4 vided, That this section shall apply to the construction of 5 residential property only if such residential property is de6 signed for residential use for eight or more families. No 7 assistance shall be extended under this title with respect to 8 any development activities without first obtaining adequate 9 assurance that these labor standards will be maintained upon 10 the work involved in such activities. The Secretary of Labor 11 shall have, with respect to the labor standards specified in 12 this section, the authority and functions set forth in Re13 organization Plan Numbered 14 of 1950 (64 Stat. 1267), 14 and section 2 of the Act of June 13, 1934 (40 U.S.C. 15 276c). 16 17 GENERAL PROVISIONS SEC. 508. (a) In the performance of, and with respect 18 to, the functions, powers, and duties vested in him by this 19 title, the Secretary, in addition to any authority otherwise 20 vested to him, shall 21 22220 (1) have the power, notwithstanding any other provision of law, in connection with any assistance under this title, whether before or after default, to provide by contract for the extinguishment upon default of any redemption, equitable, legal, or other right, title, or in |