§ 3741. Definitions

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1981

   Veterans’ Health Care, Training, and Small Business Loan Act of 1981

   Pub. L. 97–72 title III § 302(a) · 95 Stat. 1047

   Enacted · 38 U.S.C. § 3741

   Added Pub. L. 97–72, title III, § 302(a), Nov. 3, 1981, 95 Stat. 1055, § 1841

   Source evidence

   Code source credit
   Added Pub. L. 97–72, title III, § 302(a), Nov. 3, 1981, 95 Stat. 1055, § 1841

   Enacted provision · exact public law section
   (a) Chapter 37 is amended by adding at the end thereof the following new subchapter: “Subchapter IV— Small Business Loans “§ 1841. Definitions “For the purposes of this subchapter— “(1) The term ‘disabled veteran’ means (A) a veteran who is entitled to compensation under laws administered by the Veterans’ Administration for a disability rated at 30 per centum or more, or (B) a veteran whose discharge or release from active duty was for a disability incurred or aggravated in line of duty. “(2) The term ‘veteran of the Vietnam era’ means a person (A) who served on active duty for a period of more than one hundred and eighty days, any part of which occurred during the Vietnam era, and who was discharged or released therefrom with other than a dishonorable discharge, or (B) who was discharged or released from active duty for a service-connected disability if any part of such active duty was performed during the Vietnam era. “§ 1842. Small business loan program “(a) (1) Subject to subsection (b) of this section, the Administrator may provide financial assistance to veterans’ small business concerns for the purpose of (A) financing plant construction, conversion, or expansion (including the acquisition of land), (B) financing the acquisition of equipment, facilities, machinery, supplies, or materials, or (C) supplying such concerns with working capital. “(2) Subject to paragraph (3)(A) of this subsection, financial assistance under this section may be provided in the form of (A) loan guaranties, or (B) direct loans. “(3) The Administrator shall specify in regulations the criteria to be met for a business concern to qualify as a veterans’ small business concern for the purposes of this subchapter. Such regulations shall Requirements. include requirements— “(A) that at least 51 per centum of a business concern must be owned by individuals who are veterans of the Vietnam era or disabled veterans in order for such concern to qualify for a loan guaranty and that at least 51 per centum of a business concern must be owned by disabled veterans in order for such concern to qualify for a direct loan; and “(B) that the management and daily business operations of the concern must be directed by one or more of the veterans whose ownership interest is part of the majority ownership for the purposes of meeting the requirement in clause (A) of this paragraph. “(b) The availability of financial assistance under subsection (a) of Limitations. this section is subject to the following limitations: “(1) The Administrator may not make a direct loan under this section unless the veterans’ small business concern applying for the loan shows to the satisfaction of the Administrator that the concern is unable to obtain a loan guaranteed by the Veterans’ Administration under this section or made or guaranteed by the Small Business Administration. “(2) The Administrator may not guarantee a loan under this section if the loan bears a rate of interest in excess of the maximum rate of interest prescribed under section 1845 of this title. “(3) The Administrator may not make or guarantee a loan under this section for an amount in excess of $200,000. “(4) The original liability of the Administrator on any loan guaranteed under this section may not exceed 90 per centum of the amount of the loan, and such liability shall decrease or increase pro rata with any decrease or increase of the amount of the unpaid portion of the loan, but such liability may not exceed the amount of the original guaranty. “(c) Each loan made or guaranteed under this subchapter shall be of such sound value, taking into account the creditworthiness of the veterans’ small business concern (and the individual owners) applying for such loan, or so secured as reasonably to assure payment. “(d) (1) Except as provided in paragraph (2) of this subsection, the Administrator may not make or guarantee a loan under this subchapter to a veterans’ small business concern in which an ownership interest is held by a veteran who also has an ownership interest in another small business concern if such ownership interest was considered in qualifying that other concern for an outstanding loan made or guaranteed under this subchapter or the Small Business Act (15 U.S.C. 631 et seq.). “(2) Paragraph (1) of this subsection shall not apply if 51 per centum or more of the business concern seeking a direct or guaranteed loan under this subchapter is owned by veterans of the Vietnam era or disabled veterans without including the ownership interest of the veteran whose ownership interest in another small business concern was previously considered in qualifying that other concern for an outstanding guaranteed or direct business loan under this subchapter or the Small Business Act (15 U.S.C. 631 et seq.). “(e) (1) In order to protect the interest of the United States, upon application by a veterans’ small business concern which is the recipient of a loan guaranteed under this subchapter, the Administrator (subject to the provisions of this subsection) may undertake the veterans’ small business concern’s obligation to make payments under such loan or, if the loan was a direct loan made by the Administrator, may suspend such obligation. While such payments are being made by the Administrator pursuant to the undertaking of such obligation or while such obligation is suspended, no such payment with respect to the loan may be required from the concern. “(2) The Administrator may undertake or suspend a veterans’ small business concern’s obligation under this subsection only if— “(A) such undertaking or suspension of the obligation is, in the judgment of the Administrator, necessary to protect the interest of the United States; “(B) with the undertaking or suspension of the obligation, the small business concern would, in the judgment of the Administrator, become or remain a viable small business entity; and “(C) the small business concern executes an agreement in writing satisfactory to the Administrator as provided by paragraph (4) of this subsection. “(3) The period of time for which the Administrator undertakes or suspends the obligation on a loan under this subsection may not exceed five years. The Administrator may extend the maturity of any loan on which the Administrator undertakes or suspends the obligation under this subsection for a corresponding period of time. “(4) (A) Before the Administrator may undertake or suspend a Agreement. veterans’ small business concern’s obligation under this subsection, the Administrator shall require the small business concern to execute an agreement to repay the aggregate amount of the payments which were required under the loan during the period for which the obligation was undertaken or suspended— “(i) by periodic payments not less in amount or less frequently falling due than those which were due under the loan during such period, “(ii) pursuant to a repayment schedule agreed upon by the Administrator and the small business concern, or “(iii) by a combination of the method of payments described in clauses (i) and (ii) of this subparagraph. “(B) In addition to requiring the small business concern to execute the agreement described in subparagraph (A) of this paragraph, the Administrator shall, before the undertaking or suspension of the obligation, take such action and require the small business concern to take such action as the Administrator considers appropriate in the circumstances, including the provision of such security as the Administrator considers necessary or appropriate, to assure that the rights and interests of the United States and any lender will be safeguarded adequately during and after the period in which such obligation is so undertaken or suspended. “§ 1843. Liability on loans “Each individual who has an ownership interest in a veterans’ small business concern that is provided a direct loan under this subchapter, or that obtains a loan guaranteed under this subchapter, shall execute a note or other document evidencing the direct or guaranteed business loan, and such individuals shall be jointly and severally liable to the United States for the amount of such direct loan or, in the case of a guaranteed loan, for any amount paid by the Administrator on account of such loan. “§ 1844. Approval of loans by the Administrator “(a) Except as provided in subsection (b) of this section, a loan may not be guaranteed under this subchapter unless, before the closing of the loan, it is submitted to the Administrator for approval and the Administrator grants approval. “(b) The Administrator may exempt any lender of a class of lenders listed in section 1802(d) of this title from the prior approval requirement in subsection (a) of this section if the Administrator determines that the experience of such lender or class of lenders warrants such exemption. “(c) The Administrator may at any time upon thirty days’ notice require loans to be made by any lender or class of lenders under this subchapter to be submitted to the Administrator for prior approval. No guaranty shall exist with respect to any such loan unless evidence of the guaranty is issued by the Administrator. “§ 1845. Interest on loans “(a) Loans guaranteed under this subchapter shall bear interest not in excess of such rate as the Administrator may from time to time find the loan market demands. In establishing the rate of interest that shall be applicable to such loans, the Administrator shall consult with the Administrator of the Small Business Administration. “(b) The rate of interest on any direct loan made by the Administrator under this subchapter may not exceed the maximum rate in effect under subsection (a) of this section at the time the direct loan is made. “§ 1846. Maturity of loans “The maturity of a loan made or guaranteed under this subchapter that is used in whole or in part for the construction, conversion, or expansion of facilities or for acquisition of real property may not exceed twenty years plus such additional reasonable time as the Administrator may determine, at the time the loan is made, is required to complete the construction, acquisition, or expansion of such facilities. The maturity of any other loan made or guaranteed under this subchapter may not exceed ten years. “§ 1847. Eligible financial institutions “The Administrator may not guarantee under this subchapter a loan made by an entity not subject to examination and supervision by an agency of the United States or of a State. “§ 1848. Preference for disabled veterans “In the extension of financial assistance under this subchapter, the Administrator shall give preference, first, to veterans’ small business concerns in which disabled veterans who have successfully completed a vocational rehabilitation program for self-employment in a small business enterprise under chapter 31 of this title have a significant ownership interest, and, second, to veterans’ small business concerns in which other disabled veterans have a significant ownership interest. “§ 1849. Revolving fund “(a) There is established in the Treasury a revolving fund to be known as the ‘Veterans’ Administration Small Business Loan Revolving Fund’ (hereinafter in this section referred to as the ‘fund’). “(b) Amounts in the fund shall be available to the Administrator without fiscal year limitation for all loan guaranty and direct loan operations under this subchapter other than administrative expenses and may not be used for any other purpose. “(c) (1) Effective for fiscal year 1982 and fiscal years thereafter, there is authorized to be appropriated to the fund a total of $25,000,000. “(2) There shall be deposited into the fund all amounts received by the Administrator derived from loan operations under this subchapter, including all collection of principal and interest and the proceeds from the use of property held or of property sold. “(d) The Administrator shall determine annually whether there has developed in the fund a surplus which, in the Administrator’s judgment, is more than necessary to meet the needs of the fund. Any such surplus shall immediately be transferred into the general fund of the Treasury. “(e) Not later than two years after the termination of the authority of the Administrator to make new commitments for financial assist-ance under this subchapter, the Administrator shall transfer into the general fund of the Treasury all amounts in the fund except those that the Administrator determines may be required for the liquidation of obligations under this subchapter. All amounts received thereafter derived from loan operations under this subchapter, except so much thereof as the Administrator may determine to be necessary for liquidating outstanding obligations under this subchapter, shall also be so deposited. “§ 1850. Incorporation of other provisions by the Administrator “The Administrator may provide that the provisions of sections of other subchapters of this chapter that are not otherwise applicable to loans made or guaranteed under this subchapter shall be applicable to loans made or guaranteed under this subchapter. The Administrator Publication in Federal Register. shall exercise authority under the preceding sentence by regulations prescribed after publication in the Federal Register and a period of not less than thirty days for public comment. “§ 1851. Termination of program “The Administrator may not make commitments for financial assistance under this subchapter after September 30, 1986.”.

2. 1986

   Pub. L. 99–576 title VII § 702(9) · 100 Stat. 3248

   1. Substituted · 38 U.S.C. § 3741

      Pub. L. 99–576 substituted “percent” for “per centum” in par. (2)

   2. Substituted · 38 U.S.C. § 3741

      Pub. L. 99–576 substituted “180” for “one hundred and eighty” in par. (2)

   Source evidence

   Code amendment note
   Pub. L. 99–576 substituted “percent” for “per centum” in par. (1) and “180” for “one hundred and eighty” in par. (2).

   Enacted provision · exact public law section
   (9) Section 1841 is amended— (A) by striking out “per centum” in paragraph (1) and inserting in lieu thereof “percent”; and (B) by striking out “one hundred and eighty days” in paragraph (2) and inserting in lieu thereof “180 days”.

3. 1991

   Pub. L. 102–83 § 5(a) · 105 Stat. 378

   Changed · 38 U.S.C. § 3741

   Pub. L. 102–83, § 5(a), renumbered section 1841 of this title as this section

   Source evidence

   Code amendment note
   Pub. L. 102–83, § 5(a), renumbered section 1841 of this title as this section.

   Enacted provision · exact public law section
   (a) Redesignation of Sections to Conform to Chapter Numbers.— Each section contained in any of chapters 11 through 23 is redesignated by replacing the first digit of the section number with the number of the chapter containing that section. Each section contained in any of chapters 24 through 42 is redesignated so that the first two digits of the section number of that section are the same as the chapter number of the chapter containing that section.

4. 1991

   Pub. L. 102–83 § 4(a)(1) · 105 Stat. 378

   Substituted · 38 U.S.C. § 3741(1)

   Pub. L. 102–83, § 4(a)(1), substituted “administered by the Secretary” for “administered by the Veterans’ Administration”

   Source evidence

   Code amendment note
   Par. (1). Pub. L. 102–83, § 4(a)(1), substituted “administered by the Secretary” for “administered by the Veterans’ Administration”.

   Enacted provision · exact public law section
   (1) Title 38 is amended by striking out “administered by the Veterans’ Administration” each place it appears and inserting in lieu thereof “administered by the Secretary”.

5 of 5 references resolved to an enrolled provision