USC - Assistance for rural entities

View all text of Subchapter I [§ 1922 - § 1936c]

§ 1932. Assistance for rural entities

(a) Loans to private business enterprises

(1) DefinitionsIn this subsection:

(A) Aquaculture

(B) Solar energy

(2) Loan purposesThe Secretary may make and insure loans to public, private, or cooperative organizations organized for profit or nonprofit and private investment funds that invest primarily in cooperative organizations, to Indian tribes on Federal and State reservations or other federally recognized Indian tribal groups, or to individuals for the purposes of—

(A) improving, developing, or financing business, industry, and employment (including through the financing of working capital) and improving the economic and environmental climate in rural communities, including pollution abatement and control;

(B) the conservation, development, and use of water for aquaculture purposes in rural areas;

(C) reducing the reliance on nonrenewable energy resources by encouraging the development and construction of solar energy systems and other renewable energy systems (including wind energy systems and anaerobic digestors for the purpose of energy generation), including the modification of existing systems, in rural areas; and

(D) to facilitate economic opportunity for industries undergoing adjustment from terminated Federal agricultural price and income support programs or increased competition from foreign trade.

(3) Loan guarantees

(4) Maximum amount of principal

(b) Solid waste management grants

(1) In general

(2) Authorization of appropriations

(1) In general

(2) Eligible entitiesThe Secretary may make grants under this subsection to—

(A) governmental entities;

(B) Indian tribes; and

(3) Eligible purposes for grantsEligible entities that receive grants under this subsection may use the grant funds for—

(A) business opportunity projects that—

(i) identify and analyze business opportunities;

(ii) identify, train, and provide technical assistance to existing or prospective rural entrepreneurs and managers;

(iii) assist in the establishment of new rural businesses and the maintenance of existing businesses, including through business support centers;

(iv) conduct regional, community, and local economic development planning and coordination, and leadership development; and

(v) establish centers for training, technology, and trade that will provide training to rural businesses in the use of interactive communications technologies to develop international trade opportunities and markets; or

(B) projects that support the development of business enterprises that finance or facilitate—

(i) the development of small and emerging private business enterprise;

(ii) the establishment, expansion, and operation of rural distance learning networks;

(iii) the development of rural learning programs that provide educational instruction or job training instruction related to potential employment or job advancement to adult students; and

(iv) the provision of technical assistance and training to rural communities for the purpose of improving passenger transportation services or facilities.

(4) Authorization of appropriations

(A) In general

(B) Allocation

(d) Joint loans or grants for private business enterprises; restrictions; system of certification for expeditious processing of requests for assistance; prior approval of grant or loan; equity investment as condition for loan commitment; issuance of certificates of beneficial ownership of notes

(1) The Secretary may participate in joint financing to facilitate development of private business enterprises in rural areas with the Economic Development Administration, the Small Business Administration, and the Department of Housing and Urban Development and other Federal and State agencies and with private and quasi-public financial institutions, through joint loans to applicants eligible under subsection (a) for the purpose of improving, developing, or financing business, industry, and employment and improving the economic and environmental climate in rural areas or through joint grants to applicants eligible under subsection (c) for such purposes, including in the case of loans or grants the development, construction, or acquisition of land, buildings, plants, equipment, access streets and roads, parking areas, utility extensions, necessary water supply and waste disposal facilities, refining, service and fees.

(2) No financial or other assistance shall be extended under any provision of this section, except for cases in which such assistance does not exceed $1,000,000 or for cases in which direct employment will not be increased by more than fifty employees, that is calculated to or is likely to result in the transfer from one area to another of any employment or business activity provided by operations of the applicant, but this limitation shall not be construed to prohibit assistance for the expansion of an existing business entity through the establishment of a new branch, affiliate, or subsidiary of such entity if the establishment of such branch, affiliate, or subsidiary will not result in an increase in unemployment in the area of original location or in any other area where such entity conducts business operations unless there is reason to believe that such branch, affiliate, or subsidiary is being established with the intention of closing down the operations of the existing business entity in the area of its original location or in any other area where it conducts such operations.

(3) No financial or other assistance shall be extended under any provision of this section, except for cases in which such assistance does not exceed $1,000,000 or for cases in which direct employment will not be increased by more than fifty employees, which is calculated to or likely to result in an increase in the production of goods, materials, or commodities, or the availability of services or facilities in the area, when there is not sufficient demand for such goods, materials, commodities, services, or facilities, to employ the efficient capacity of existing competitive commercial or industrial enterprises, unless such financial or other assistance will not have an adverse effect upon existing competitive enterprises in the area.

(4) No financial or other assistance shall be extended under any provision of this section, except for cases in which such assistance does not exceed $1,000,000 or for cases in which direct employment will not be increased by more than fifty employees, if the Secretary of Labor certifies within 30 days after the matter has been submitted to him by the Secretary of Agriculture that the provisions of paragraphs (2) and (3) of this subsection have not been complied with. The Secretary of Labor shall, in cooperation with the Secretary of Agriculture, develop a system of certification which will insure the expeditious processing of requests for assistance under this section.

(5) No grant or loan authorized to be made under this chapter shall require or be subject to the prior approval of any officer, employee, or agency of any State.

(6) No loan commitment issued under this section shall be conditioned upon the applicant investing in excess of 10 per centum in the business or industrial enterprise for which purpose the loan is to be made unless the Secretary determines there are special circumstances which necessitate an equity investment by the applicant greater than 10 per centum.

(7) No provision of law shall prohibit issuance by the Secretary of certificates evidencing beneficial ownership in a block of notes insured or guaranteed under this chapter or Title V of the Housing Act of 1949 [42 U.S.C. 1471 et seq.]; any sale by the Secretary of such certificates shall be treated as a sale of assets for the purposes of chapter 11 of title 31. Any security representing beneficial ownership in a block of notes guaranteed or insured under this chapter or Title V of the Housing Act of 1949 issued by a private entity shall be exempt from laws administered by the Securities and Exchange Commission, except sections 77q, 77v, and 77x of title 15; however, the Secretary shall require (i) that the issuer place such notes in the custody of an institution chartered by a Federal or State agency to act as trustee and (ii) that the issuer provide such periodic reports of sales as the Secretary deems necessary.

(e) Rural cooperative development grants

(1) DefinitionsIn this subsection:

(A) Nonprofit institution

(B) United States

(2) Grants

(3) Goals

(4) ApplicationAny nonprofit institution seeking a grant under paragraph (2) shall submit to the Secretary an application containing a plan for the establishment and operation by the institution of a center or centers for cooperative development. The Secretary may approve the application if the plan contains the following:

(A) A provision that substantiates that the center will effectively serve rural areas in the United States.

(B) A provision that the primary objective of the center will be to improve the economic condition of rural areas through cooperative development.

(C) A description of the activities that the center will carry out to accomplish the objective. The activities may include the following:

(i) Programs for applied research and feasibility studies that may be useful to individuals, cooperatives, small businesses, and other similar entities in rural areas served by the center.

(ii) Programs for the collection, interpretation, and dissemination of information that may be useful to individuals, cooperatives, small businesses, and other similar entities in rural areas served by the center.

(iii) Programs providing training and instruction for individuals, cooperatives, small businesses, and other similar entities in rural areas served by the center.

(iv) Programs providing loans and grants to individuals, cooperatives, small businesses, and other similar entities in rural areas served by the center.

(v) Programs providing technical assistance, research services, and advisory services to individuals, cooperatives, small businesses, and other similar entities in rural areas served by the center.

(vi) Programs providing for the coordination of services and sharing of information among the center.1

1 So in original. Probably should be “centers.”

(D) A description of the contributions that the activities are likely to make to the improvement of the economic conditions of the rural areas for which the center will provide services.

(E) Provisions that the center, in carrying out the activities, will seek, where appropriate, the advice, participation, expertise, and assistance of representatives of business, industry, educational institutions, the Federal Government, and State and local governments.

(F) Provisions that the center will take all practicable steps to develop continuing sources of financial support for the center, particularly from sources in the private sector.

(G) Provisions for—

(i) monitoring and evaluating the activities by the nonprofit institution operating the center; and

(ii) accounting for money received by the institution under this section.

(5) Awarding grantsGrants made under paragraph (2) shall be made on a competitive basis. In making grants under paragraph (2), the Secretary shall give preference to grant applications providing for the establishment of centers for rural cooperative development that—

(A) demonstrate a proven track record in carrying out activities to promote and assist the development of cooperatively and mutually owned businesses;

(B) demonstrate previous expertise in providing technical assistance in rural areas to promote and assist the development of cooperatively and mutually owned businesses;

(C) demonstrate the ability to assist in the retention of businesses, facilitate the establishment of cooperatives and new cooperative approaches, and generate employment opportunities that will improve the economic conditions of rural areas;

(D) commit to providing technical assistance and other services to underserved and economically distressed areas in rural areas of the United States;

(E) demonstrate a commitment to—

(i) networking with and sharing the results of the efforts of the center with other cooperative development centers and other organizations involved in rural economic development efforts; and

(ii) developing multiorganization and multistate approaches to addressing the economic development and cooperative needs of rural areas; and

(F) commit to providing a 25 percent matching contribution with private funds and in-kind contributions, except that the Secretary shall not require non-Federal financial support in an amount that is greater than 5 percent in the case of a 1994 institution (as defined in section 532 of the Equity in Educational Land-Grant Status Act of 1994 (7 U.S.C. 301 note; Public Law 103–382)).

(6) Grant period

(A) In general

(B) Multiyear grants

(7) Authority to extend grant period

(8) Technical assistance to prevent excessive unemployment or underemployment

(9) Grants to defray administrative costs

(10) Cooperative research program

(11) Addressing needs of minority communities

(A) Definition of socially disadvantaged group

(B) Reservation of funds

(i) In generalIf the total amount appropriated under paragraph (13) for a fiscal year exceeds $7,500,000, the Secretary shall reserve an amount equal to 20 percent of the total amount appropriated for grants for cooperative development centers, individual cooperatives, or groups of cooperatives—(I) that serve socially disadvantaged groups; and(II) a majority of the boards of directors or governing boards of which are comprised of individuals who are members of socially disadvantaged groups.

(ii) Insufficient applications

(12) Interagency working group

(13) Authorization of appropriations

(f) Repealed. Pub. L. 115–334, title VI, § 6601(a)(1)(B), Dec. 20, 2018, 132 Stat. 4775

(g) Business and industry direct and guaranteed loans

(1) Definition of business and industry loan

(2) Loan guarantees for the purchase of cooperative stock

(A) In general

(B) Processing contracts during initial period

(3) Loans to cooperatives

(A) Eligibility

(i) In general

(ii) Equity

(B) RefinancingA cooperative organization that is eligible for a business and industry loan shall be eligible to refinance an existing business and industry loan with a lender if—

(i) the cooperative organization—(I) is current and performing with respect to the existing loan; and(II) is not, and has not been, in payment default, or the collateral of which has not been converted, with respect to the existing loan; and

(ii) there is adequate security or full collateral for the refinanced loan.

(4) Loan appraisals

(5) Fees

(6) Loan guarantees in nonrural areas

(A) In generalThe Secretary may guarantee a business and industry loan to a cooperative organization for a facility that is not located in a rural area if—

(i) the primary purpose of the loan guarantee is for a facility to provide value-added processing for agricultural producers that are located within 80 miles of the facility;

(ii) the applicant demonstrates to the Secretary that the primary benefit of the loan guarantee will be to provide employment for residents of a rural area; and

(iii) the total amount of business and industry loans guaranteed for a fiscal year under this paragraph does not exceed 10 percent of the business and industry loans guaranteed for the fiscal year under subsection (a)(2)(A).

(B) Principal amounts

(7) Intangible assets

(A) In general

(B) Accounts receivable

(8) Limitations on loan guarantees for cooperative organizations

(A) Principal amount

(i) In general

(ii) UseTo be eligible for a guarantee under this subsection for a business and industry loan made to a cooperative organization, the principal amount of the any such loan in excess of $25,000,000 shall be used to carry out a project that—(I)(aa) is in a rural area; and(bb) provides for the value-added processing of agricultural commodities; or(II) significantly benefits 1 or more entities eligible for assistance for the purposes described in subsection (a)(1), as determined by the Secretary.

(B) ApplicationsIf a cooperative organization submits an application for a guarantee under this subsection of a business and industry loan with a principal amount that is in excess of $25,000,000, the Secretary—

(i) shall review and, if appropriate, approve the application; and

(ii) may not delegate the approval authority.

(9) Locally or regionally produced agricultural food products

(A) DefinitionsIn this paragraph:

(i) Locally or regionally produced agricultural food productThe term “locally or regionally produced agricultural food product” means any agricultural food product that is raised, produced, and distributed in—(I) the locality or region in which the final product is marketed, so that the total distance that the product is transported is less than 400 miles from the origin of the product; or(II) the State in which the product is produced.

(ii) Underserved communityThe term “underserved community” means a community (including an urban or rural community and an Indian tribal community) that has, as determined by the Secretary—(I) limited access to affordable, healthy foods, including fresh fruits and vegetables, in grocery retail stores or farmer-to-consumer direct markets; and(II) a high rate of hunger or food insecurity or a high poverty rate.

(B) Loan and loan guarantee program

(i) In general

(ii) Requirement

(iii) Priority

(iv) Reservation of funds(I) In general(II) Availability of funds

(h) Loan guarantees for certain loans

(i) Appropriate technology transfer for rural areas program

(1) Definition of national nonprofit agricultural assistance institutionIn this subsection, the term “national nonprofit agricultural assistance institution” means an organization that—

(A) is described in section 501(c)(3) of title 26 and exempt from taxation under 2

2 So in original. The word “section” probably should appear.

501(a) of that title;

(B) has staff and offices in multiple regions of the United States;

(D) expands markets for the agricultural commodities produced by producers through the use of practices that enhance the environment, natural resource base, and quality of life; and

(E) improves the economic viability of agricultural operations.

(2) EstablishmentThe Secretary shall establish a national appropriate technology transfer for rural areas program to assist agricultural producers that are seeking information to—

(A) reduce input costs;

(B) conserve energy resources;

(D) expand markets for agricultural commodities produced by the producers by using practices that enhance the environment, natural resource base, and quality of life.

(3) Implementation

(A) In general

(B) Grant amount

(4) Authorization of appropriations

(j) Rural economic area partnership zones

(Pub. L. 87–128, title III, § 310B, as added Pub. L. 92–419, title I, § 118(a), Aug. 30, 1972, 86 Stat. 663; amended Pub. L. 91–524, title VIII, § 817, as added Pub. L. 93–86, § 1(27)(B), Aug. 10, 1973, 87 Stat. 241; Pub. L. 95–113, title XV, § 1503(b), Sept. 29, 1977, 91 Stat. 1021; Pub. L. 95–334, title I, § 112, Aug. 4, 1978, 92 Stat. 424; Pub. L. 96–358, § 5, Sept. 25, 1980, 94 Stat. 1187; Pub. L. 96–438, § 1(2), Oct. 13, 1980, 94 Stat. 1871; Pub. L. 99–409, § 2, Aug. 28, 1986, 100 Stat. 923; Pub. L. 100–203, title I, § 1504, Dec. 22, 1987, 101 Stat. 1330–28; Pub. L. 101–624, title XXIII, §§ 2325, 2337, 2347, formerly 2347(a), 2386, 2388(b), (c), Nov. 28, 1990, 104 Stat. 4013, 4022, 4034, 4051, 4052; Pub. L. 102–237, title VII, § 701(c), (h)(1)(C), (D), Dec. 13, 1991, 105 Stat. 1879, 1880; Pub. L. 102–552, title V, § 516(d), Oct. 28, 1992, 106 Stat. 4137; Pub. L. 102–554, § 6, Oct. 28, 1992, 106 Stat. 4144; Pub. L. 104–127, title VI, §§ 635(b), 661(d), title VII, §§ 705(1), 747(a), 759B, Apr. 4, 1996, 110 Stat. 1093, 1107, 1112, 1125, 1138; Pub. L. 104–180, title VII, § 731, Aug. 6, 1996, 110 Stat. 1600; Pub. L. 107–171, title VI, §§ 6007(b), 6013–6017, May 13, 2002, 116 Stat. 355, 358, 359; Pub. L. 110–234, title VI, §§ 6012(a), (b)(2), 6013–6017, May 22, 2008, 122 Stat. 1164–1169; Pub. L. 110–246, § 4(a), title VI, §§ 6012(a), (b)(2), 6013–6017, June 18, 2008, 122 Stat. 1664, 1925, 1927–1931; Pub. L. 113–79, title VI, §§ 6010(a), (b), 6011, 6012(a), 6013–6016, Feb. 7, 2014, 128 Stat. 843–845; Pub. L. 113–188, title I, § 101(c), Nov. 26, 2014, 128 Stat. 2017; Pub. L. 115–334, title VI, §§ 6410–6415, 6601(a)(1)(B), 6701(c), (d)(1), Dec. 20, 2018, 132 Stat. 4762, 4775, 4778.)