§ 6943. Rural Housing and Community Development Service

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. 1994

   Department of Agriculture Reorganization Act of 1994

   Pub. L. 103–354 title II § 233 · 108 Stat. 3178

   Enacted · 7 U.S.C. § 6943

   Pub. L. 103–354, title II, § 233, Oct. 13, 1994, 108 Stat. 3219

   Source evidence

   Code source credit
   Pub. L. 103–354, title II, § 233, Oct. 13, 1994, 108 Stat. 3219

   Enacted provision · exact public law section
   SEC. 233. RURAL HOUSING AND COMMUNITY DEVELOPMENT SERVICE. (a) Establishment Authorized.— Notwithstanding any other provision of law, the Secretary is authorized to establish and main-tain within the Department the Rural Housing and Community Development Service and to assign to the Service such functions as the Secretary considers appropriate. (b) Functions.— If the Secretary establishes the Rural Housing and Community Development Service under subsection (a), the Secretary is authorized to assign to the Service jurisdiction over the following: (1) Programs and activities under title V of the Housing Act of 1949 (42 U.S.C. 1471 et seq.). (2) Programs and activities authorized under section 310B(i) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(i)) and related provisions of law. (3) Programs and activities that relate to rural community lending programs, including programs authorized by sections 365 through 369 of the Consolidated Farm and Rural Development Act (7 U.S.C. 2008–2008d).

2. 1996

   Federal Agriculture Improvement and Reform Act of 1996

   Pub. L. 104–127 title VII · 110 Stat. 888

   1. Redesignated · 7 U.S.C. § 6943(b)(2); 7 U.S.C. § 6943(b)(3)

      Pub. L. 104–127 redesignated par. (3) as (2)

   2. Substituted · 7 U.S.C. § 6943(b)(2); 7 U.S.C. § 6943(b)(3)

      Pub. L. 104–127 substituted “section 2008d of this title” for “sections 2008 through 2008d of this title”

   3. Struck · 7 U.S.C. § 6943(b)(2); 7 U.S.C. § 6943(b)(3)

      Pub. L. 104–127 struck out former par. (2) which read as follows: “Programs and activities authorized under section 1932(i) of this title and related provisions of law.”

   Source evidence

   Code amendment note
   Subsec. (b)(2), (3). Pub. L. 104–127 redesignated par. (3) as (2), substituted “section 2008d of this title” for “sections 2008 through 2008d of this title”, and struck out former par. (2) which read as follows: “Programs and activities authorized under section 1932(i) of this title and related provisions of law.”

   Enacted provision · exact public law
   TITLE VII— RURAL DEVELOPMENT Subtitle A— Amendments to the Food, Agriculture, Conservation, and Trade Act of 1990 CHAPTER 1— GENERAL PROVISIONS SEC. 701. RURAL INVESTMENT PARTNERSHIPS. Subtitle B of title XXIII of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 2007 et seq.) is repealed. SEC. 702. WATER AND WASTE FACILITY FINANCING. Section 2322 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 1926–1) is repealed. SEC. 703. RURAL WASTEWATER CIRCUIT RIDER PROGRAM. Section 2324 of the Food, Agriculture, Conservation, and Trade Act of 1990 (Public Law 101–624; 7 U.S.C. 1926 note) is repealed. SEC. 704. TELEMEDICINE AND DISTANCE LEARNING SERVICES IN RURAL AREAS. Chapter 1 of subtitle D of title XXIII of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 950aaa et seq.) is amended to read as follows: “CHAPTER 1— TELEMEDICINE AND DISTANCE LEARNING SERVICES IN RURAL AREAS “SEC. 2331. PURPOSE. “The purpose of this chapter is to encourage and improve telemedicine services and distance learning services in rural areas through the use of telecommunications, computer networks, and related advanced technologies by students, teachers, medical professionals, and rural residents. “SEC. 2332. DEFINITIONS. “In this chapter: “(1) Construct.— The term ‘construct’ means to construct, acquire, install, improve, or extend a facility or system. “(2) Cost of money loan.— The term ‘cost of money loan’ means a loan made under this chapter bearing interest at a rate equal to the then current cost to the Federal Government of loans of similar maturity. “(3) Secretary.— The term ‘Secretary’ means the Secretary of Agriculture. “SEC. 2333. TELEMEDICINE AND DISTANCE LEARNING SERVICES IN RURAL AREAS. “(a) Services to Rural Areas.— The Secretary may provide financial assistance for the purpose of financing the construction of facilities and systems to provide telemedicine services and distance learning services in rural areas. “(b) Financial Assistance.— “(1) In general.— Financial assistance shall consist of grants or cost of money loans, or both. “(2) Form.— The Secretary shall determine the portion of the financial assistance provided to a recipient that consists of grants and the portion that consists of cost of money loans so as to result in the maximum feasible repayment to the Federal Government of the financial assistance, based on the ability to repay of the recipient and full utilization of funds made available to carry out this chapter. “(c) Recipients.— “(1) In general.— The Secretary may provide financial assistance under this chapter to— “(A) entities using telemedicine services or distance learning services; and “(B) entities providing or proposing to provide telemedicine service or distance learning service to other persons at rates calculated to ensure that the benefit of the financial assistance is passed through to the other persons. “(2) Electric or telecommunications borrowers.— “(A) Loans to borrowers.— Subject to subparagraph (B), the Secretary may provide a cost of money loan under this chapter to a borrower of an electric or telecommunications loan under the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.). A borrower receiving a cost of money loan under this paragraph shall— “(i) make the funds provided available to entities that qualify under paragraph (1) for projects satisfying the requirements of this chapter; “(ii) use the funds provided to acquire, install, improve, or extend a system referred to in subsection (a); or “(iii) use the funds provided to install, improve, or extend a facility referred to in subsection (a). “(B) Limitations.— A borrower of an electric or telecommunications loan under the Rural Electrification Act of 1936 shall— “(i) make a system or facility funded under subparagraph (A) available to entities that qualify under paragraph (1); and “(ii) neither retain from the proceeds of a loan provided under subparagraph (A), nor assess a qualifying entity under paragraph (1), any amount except as may be required to pay the actual costs incurred in administering the loan or making the system or facility available. “(3) Appeal.— If the Secretary rejects the application of a borrower who applies for a cost of money loan or grant under this section, the borrower may appeal the decision to the Secretary not later than 10 days after the borrower is notified of the rejection. “(4) Assistance to provide or improve services.— Financial assistance may be provided under this chapter for a facility regardless of the location of the facility if the Secretary determines that the assistance is necessary to provide or improve telemedicine services or distance learning services in a rural area. “(d) Priority.— The Secretary shall establish procedures to prioritize financial assistance under this chapter considering— “(1) the need for the assistance in the affected rural area; “(2) the financial need of the applicant; “(3) the population sparsity of the affected rural area; “(4) the local involvement in the project serving the affected rural area; “(5) geographic diversity among the recipients of financial assistance; “(6) the utilization of the telecommunications facilities of any telecommunications provider serving the affected rural area; “(7) the portion of total project financing provided by the applicant from the funds of the applicant; “(8) the portion of project financing provided by the applicant with funds obtained from non-Federal sources; “(9) the joint utilization of facilities financed by other financial assistance; “(10) the coordination of the proposed project with regional projects or networks; “(11) service to the greatest practical number of persons within the general geographic area covered by the financial assistance; “(12) conformity with the State strategic plan as prepared under section 38 ID of the Consolidated Farm and Rural Development Act; and “(13) other factors determined appropriate by the Secretary. “(e) Maximum Amount of Assistance to Individual Recipients.— The Secretary may establish the maximum amount of financial assistance to be made available to an individual recipient for each fiscal year under this chapter, by publishing notice of the maximum amount in the Federal Register not more than 45 days after funds are made available for the fiscal year to carry out this chapter. “(f) Use of Funds.— Financial assistance provided under this chapter shall be used for— “(1) the development and acquisition of instructional programming; “(2) the development and acquisition, through lease or purchase, of computer hardware and software, audio and visual equipment, computer network components, telecommunications terminal equipment, telecommunications transmission facilities, data terminal equipment, or interactive video equipment, or other facilities that would further telemedicine services or distance learning services; “(3) providing technical assistance and instruction for the development or use of the programming, equipment, or facilities referred to in paragraphs (1) and (2); or “(4) other uses that are consistent with this chapter, as determined by the Secretary. “(g) Salaries and Expenses.— Notwithstanding subsection (f), financial assistance provided under this chapter shall not be used for paying salaries or administrative expenses. “(h) Expediting Coordinated Telephone Loans.— “(1) In general.— The Secretary may establish and carry out procedures to ensure that expedited consideration and determination is given to applications for loans and advances of funds submitted by local exchange carriers under this chapter and the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.) to enable the exchange carriers to provide advanced telecommunications services in rural areas in conjunction with any other projects carried out under this chapter. “(2) Deadline imposed on secretary.— Not later than Notification. 45 days after the receipt of a completed application for an expedited telephone loan under paragraph (1), the Secretary shall notify the applicant in writing of the decision of the Secretary regarding the application. “(i) Notification of Local Exchange Carrier.— “(1) Applicants.— Each applicant for a grant for a telemedicine or distance learning project established under this chapter shall notify the appropriate local telephone exchange carrier regarding the application filed with the Secretary for the grant. “(2) Secretary.— The Secretary shall— “(A) publish notice of applications received for grants under this chapter for telemedicine or distance learning projects; and “(B) make the applications available for inspection. “SEC. 2334. ADMINISTRATION. “(a) Nonduplication.— The Secretary shall ensure that facilities constructed using financial assistance provided under this chapter do not duplicate adequate established telemedicine services or distance learning services. “(b) Loan Maturity.— The maturities of cost of money loans shall be determined by the Secretary, based on the useful life of the facility being financed, except that the loan shall not be for a period of more than 10 years. “(c) Loan Security and Feasibility.— The Secretary shall make a cost of money loan only if the Secretary determines that the security for the loan is reasonably adequate and that the loan will be repaid within the period of the loan. “(d) Encouraging Consortia.— The Secretary shall encourage the development of consortia to provide telemedicine services or distance learning services through telecommunications in rural areas served by a telecommunications provider. “(e) Coordination With Other Agencies.— The Secretary shall coordinate, to the extent practicable, with other Federal and State agencies with similar grant or loan programs to pool resources for funding meritorious proposals in rural areas. “(f) Informational Efforts.— The Secretary shall establish and implement procedures to carry out informational efforts to advise potential end users located in rural areas of each State about the program authorized by this chapter. “SEC. 2335. REGULATIONS. “Not later than 180 days after the date of enactment of the Federal Agriculture Improvement and Reform Act of 1996, the Secretary shall issue regulations to carry out this chapter. “SEC. 2335A. AUTHORIZATION OF APPROPRIATIONS. “There are authorized to be appropriated to carry out this chapter $100,000,000 for each of fiscal years 1996 through 2002.”. SEC. 705. LIMITATION ON AUTHORIZATION OF APPROPRIATIONS FOR RURAL TECHNOLOGY GRANTS. Section 2347 of the Food, Agriculture, Conservation, and Trade Act of 1990 (Public Law 101–624; 104 Stat. 4034) is amended— (1) by striking “(a) In General.—”; and (2) by striking subsection (b). SEC. 706. DEMONSTRATION PROJECTS. Section 2348 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 2662a) is repealed. SEC. 707. MONITORING THE ECONOMIC PROGRESS OF RURAL AMERICA. Section 2382 of the Food, Agriculture, Conservation, and Trade Act of 1990 (Public Law 101–624; 13 U.S.C. 141 note) is repealed. SEC. 708. ANALYSIS BY OFFICE OF TECHNOLOGY ASSESSMENT. Section 2385 of the Food, Agriculture, Conservation, and Trade Act of 1990 (Public Law 101–624; 7 U.S.C. 950aaa-4 note) is repealed. SEC. 709. RURAL HEALTH INFRASTRUCTURE IMPROVEMENT. Section 2391 of the Food, Agriculture, Conservation, and Trade Act of 1990 (Public Law 101–624; 7 U.S.C. 2662 note) is repealed. SEC. 710. CENSUS OF AGRICULTURE. Section 2392 of the Food, Agriculture, Conservation, and Trade 13 USC 142 note. Act of 1990 (Public Law 101–624; 104 Stat. 4057) is repealed. SEC. 711. STUDY OF THE TRANSPORTATION OF FERTILIZER AND AGRICULTURAL CHEMICALS TO FARMERS. Section 2517 of the Food, Agriculture, Conservation, and Trade Act of 1990 (Public Law 101–624; 104 Stat. 4077) is repealed. CHAPTER 2— ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION SEC. 721. DEFINITIONS. Section 1657(c) of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5901(c)) is amended— (1) by striking paragraphs (3) and (4); (2) by redesignating paragraph (5) as paragraph (3); (3) by redesignating paragraphs (6) through (12) as paragraphs (7) through (13), respectively; and (4) by inserting after paragraph (3) (as redesignated by paragraph (2)) the following: “(4) Corporate board.— The term ‘Corporate Board’ means the Board of Directors of the Corporation described in section 1659. “(5) Corporation.— The term ‘Corporation’ means the Alternative Agricultural Research and Commercialization Corporation established under section 1658. “(6) Executive director.— The term ‘Executive Director’ means the Executive Director of the Corporation appointed under section 1659(e).”. SEC. 722. ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION CORPORATION. (a) In General.— Section 1658 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5902) is amended to read as follows: “SEC. 1658. ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION CORPORATION. “(a) Establishment.— To carry out this subtitle, there is created a body corporate to be known as the Alternative Agricultural Research and Commercialization Corporation, which shall be an agency of the United States, within the Department of Agriculture, subject to the general supervision and direction of the Secretary, except as specifically provided for in this subtitle. “(b) Purpose.— The purpose of the Corporation is to— “(1) expedite the development and market penetration of industrial, nonfood, nonfeed products from agricultural and forestry materials; and “(2) assist the private sector in bridging the gap between the results of research into nonfood, non feed products and the commercialization of the research. “(c) Place of Incorporation.— The Corporation shall be incorporated District of Columbia. in the District of Columbia. “(d) Central Office.— The Secretary shall provide facilities for the principal office of the Corporation within the Washington, D.C., metropolitan area. “(e) Wholly-Owned Government Corporation.— The Corporation shall be considered a wholly-owned government corporation in accordance with chapter 91 of title 31, United States Code. “(f) General Powers.— In addition to any other powers granted to the Corporation under this subtitle, the Corporation— “(1) shall have succession in its corporate name; “(2) may adopt, alter, and rescind any bylaw and adopt and alter a corporate seal, which shall be judicially noticed; “(3) may enter into any agreement or contract with a person or private or governmental agency, except that the Corporation shall not provide any financial assistance unless specifically authorized by this subtitle; “(4) may lease, purchase, accept a gift or donation of, or otherwise acquire, use, own, hold, improve, or otherwise deal in or with, and sell, convey, mortgage, pledge, lease, exchange, or otherwise dispose of, any property or interest in property, as the Corporation considers necessary in the transaction of the business of the Corporation, except that this paragraph shall not provide authority for carrying out a program of real estate investment; “(5) may sue and be sued in the corporate name of the Corporation, except that— “(A) no attachment, injunction, garnishment, or similar process shall be issued against the Corporation or property of the Corporation; and “(B) exclusive original jurisdiction shall reside in the district courts of the United States, but the Corporation may intervene in any court in any suit, action, or proceeding in which the Corporation has an interest; “(6) may independently retain legal representation; “(7) may provide for and designate such committees, and the functions of the committees, as the Corporate Board considers necessary or desirable; “(8) may indemnify the Executive Director and other officers of the Corporation, as the Corporate Board considers necessary and desirable, except that the Executive Director and officers shall not be indemnified for an act outside the scope of employment; “(9) may, with the consent of any board, commission, independent establishment, or executive department of the Federal Government, including any field service, use information, services, facilities, officials, and employees in carrying out this subtitle, and pay for the use, which payments shall be transferred to the applicable appropriation account that incurred the expense; “(10) may obtain the services and fix the compensation of any consultant and otherwise procure temporary and intermittent services under section 3109(b) of title 5, United States Code; “(11) may use the United States mails on the same terms and conditions as the Executive agencies of the Federal Government; “(12) shall have the rights, privileges, and immunities of the United States with respect to the right to priority of payment with respect to debts due from bankrupt, insolvent, or deceased creditors; “(13) may collect or compromise any obligations assigned to or held by the Corporation, including any legal or equitable rights accruing to the Corporation; “(14) shall determine the character of, and necessity for, obligations and expenditures of the Corporation and the manner in which the obligations and expenditures shall be incurred, allowed, and paid, subject to provisions of law specifically applicable to Government corporations; “(15) may make final and conclusive settlement and adjustment of any claim by or against the Corporation or a fiscal officer of the Corporation; “(16) may sell assets, loans, and equity interests acquired in connection with the financing of projects funded by the Corporation; and “(17) may exercise all other lawful powers necessarily or reasonably related to the establishment of the Corporation to carry out this subtitle and the powers, purposes, functions, duties, and authorized activities of the Corporation. “(g) Specific Powers.— To carry out this subtitle, the Corporation may— “(1) make grants to, and enter into cooperative agreements and contracts with, eligible applicants for research, development, and demonstration projects in accordance with section 1660; “(2) make loans and interest subsidy payments and invest venture capital in accordance with section 1661; “(3) collect and disseminate information concerning State, regional, and local commercialization projects; “(4) search for new nonfood, nonfeed products that may be produced from agricultural commodities and for processes to produce the products; “(5) administer, maintain, and dispense funds from the Fund to facilitate the conduct of activities under this subtitle; and “(6) engage in other activities incident to carrying out the functions of the Corporation.”. (b) Wholly-Owned Government Corporation.— Section 9101(3) of title 31, United States Code, is amended— (1) by redesignating subparagraph (N) (relating to the Uranium Enrichment Corporation) as subparagraph (O); and (2) by adding at the end the following: “(Q) the Alternative Agricultural Research and Commercialization Corporation.” (c) Conforming Amendment.— Section 211(b)(5) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6911(b)(5)) is amended by striking “Alternative Agricultural Research and Commercialization Board” and inserting “Corporate Board of the Alternative Agricultural Research and Commercialization Corporation”. SEC. 723. BOARD OF DIRECTORS. EMPLOYEES, AND FACILITIES. (a) In General.— Section 1659 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5903) is amended to read as follows: “SEC. 1659. BOARD OF DIRECTORS, EMPLOYEES, AND FACILITIES. “(a) In General.— The powers of the Corporation shall be vested in a Corporate Board. “(b) Members of the Corporate Board.— The Corporate Board shall consist of 11 members as follows: “(1) The Under Secretary of Agriculture for Rural Development. “(2) The Under Secretary of Agriculture for Research, Education, and Economics. “(3) 5 members appointed by the Secretary, of whom— “(A) at least 1 member shall be a representative of the leading scientific disciplines relevant to the activities of the Corporation; “(B) at least 1 member shall be a producer or processor of agricultural commodities; “(C) at least 1 member shall be a person who is privately engaged in the commercialization of new nonfood, nonfeed products from agricultural commodities; and “(D) at least 1 member shall have expertise in financial management. A different member shall be appointed pursuant to each subparagraph of this paragraph. “(4) 2 members appointed by the Secretary who— “(A) have expertise in areas of applied research relating to the development or commercialization of new nonfood, nonfeed products; and “(B) shall be appointed from a group of at least 4 individuals nominated by the Director of the National Science Foundation if the nominations are made not later than 60 days after the date a vacancy occurs. “(5) 2 members appointed by the Secretary who— “(A) have expertise in financial and managerial matters; and “(B) shall be appointed from a group of at least 4 individuals nominated by the Secretary of Commerce if the nominations are made not later than 60 days after the date a vacancy occurs. “(c) Responsibilities of the Corporate Board.— “(1) In general.— The Corporate Board shall— “(A) be responsible for the general supervision of the Corporation and Regional Centers established under section 1663; “(B) determine (in consultation with Regional Centers) high priority commercialization areas to receive assistance under section 1663; “(C) review any grant, contract, or cooperative agreement to be made or entered into by the Corporation under section 1660 and any financial assistance to be provided under section 1661; “(D) make the final decision, by majority vote, on whether and how to provide assistance to an applicant; and “(E) develop and establish a budget plan and a longterm operating plan to carry out this subtitle. “(2) Authority of the secretary.— “(A) In general.— The Secretary shall vacate and remand to the Corporate Board for reconsideration any decision made pursuant to paragraph (1)(D) if the Secretary determines that there has been a violation of subsection (j), or any conflict of interest provisions of the bylaws of the Corporate Board, with respect to the decision. “(B) Reasons.— In the case of any violation and referral of a funding decision to the Corporate Board, the Secretary shall inform the Corporate Board of the reasons for any remand pursuant to subparagraph (A). “(d) Chairperson.— The members of the Corporate Board shall select a Chairperson from among the members of the Corporate Board. The term of office of the Chairperson shall be 2 years. The members referred to in paragraphs (1) and (2) of subsection (b) may not serve as Chairperson. “(e) Executive Director.— “(1) Appointment.— The Corporate Board shall appoint an Executive Director, subject to the approval of the Secretary. “(2) Duties.— The Executive Director shall be the chief executive officer of the Corporation, with such power and authority as may be conferred by the Corporate Board. “(3) Compensation.— The Executive Director shall receive basic pay at the rate provided for level IV of the Executive Schedule under section 5315 of title 5, United States Code. “(f) Officers.— The Corporate Board shall establish the offices and appoint the officers of the Corporation, including a Secretary, and define the duties of the officers in a manner consistent with this subtitle. “(g) Meetings.— The Corporate Board shall meet at least 3 times each fiscal year at the call of the Chairperson or at the request of the Executive Director. The location of the meetings shall be subject to approval of the Executive Director. A quorum of the Corporate Board shall consist of a majority of the members. The decisions of the Corporate Board shall be made by majority vote. “(h) Term; Vacancies.— “(1) In general.— The term of office of a member of the Corporate Board shall be 4 years, except that the members initially appointed shall be appointed to serve staggered terms. A member appointed to fill a vacancy for an unexpired term may be appointed only for the remainder of the term. A vacancy on the Corporate Board shall be filled in the same manner as the original appointment. The Secretary may remove a member of the Corporate Board only for cause. “(2) Transition measure.— The Secretary may appoint to the Corporate Board an individual who, on the day before the date of enactment of the Federal Agriculture Improvement and Reform Act of 1996, was serving on the former Alternative Agricultural Research and Commercialization Board, for a term that does not exceed the term for which the individual was appointed to the former Board. “(i) Compensation.— A member of the Corporate Board who is an officer or employee of the United States shall not receive any additional compensation by reason of service on the Corporate Board. Any other member shall receive, for each day (including travel time) the member is engaged in the performance of the functions of the Corporate Board, compensation at a rate not to exceed the daily equivalent of the annual rate in effect for Level IV of the Executive Schedule. A member of the Corporate Board shall be reimbursed for travel, subsistence, and other necessary expenses incurred by the member in the performance of the duties of the member. “(j) Conflict of Interest; Financial Disclosure.— “(1) Conflict of interest.— Except as provided in paragraph (3), no member of the Corporate Board shall vote on any matter respecting any application, contract, claim, or other particular matter pending before the Corporation, in which, to the knowledge of the member, the member, spouse, or child of the member, partner, or organization in which the member is serving as officer, director, trustee, partner, or employee, or any person or organization with whom the member is negotiating or has any arrangement concerning prospective employment, has a financial interest. “(2) Violations.— Violation of paragraph (1) by a member of the Corporate Board shall be cause for removal of the member, but snail not impair or otherwise affect the validity of any otherwise lawful action by the Corporation in which the member participated. “(3) Exceptions.— The prohibitions contained in paragraph (1) shall not apply if a member of the Corporate Board advises the Corporate Board of the nature of the particular matter in which the member proposes to participate, and if the member makes a full disclosure of the financial interest, prior to any participation, and the Corporate Board determines, by majority vote, that the financial interest is too remote or too inconsequential to affect the integrity of the member’s services to the Corporation in that matter. The member involved shall not vote on the determination. “(4) Financial disclosure.— A Board member shall be subject to the financial disclosure requirements set forth in subchapter B of chapter XVI of title 5, Code of Federal Regulations (or any corresponding or similar regulation or ruling), applicable to a special Government employee (as defined in section 202(a) of title 18, United States Code). “(k) Delegation of Authority.— “(1) In general.— The Corporate Board may, by resolution, delegate to the Chairperson, the Executive Director, or any other officer or employee any function, power, or duty assigned to the Corporation under this subtitle, other than a function, power, or duty expressly vested in the Corporate Board by subsections (c) through (n). “(2) Prohibition on delegation.— Notwithstanding any other law, the Secretary and any other officer or employee of the United States shall not make any delegation to the Corporate Board, the Chairperson, the Executive Director, or the Corporation of any power, function, or authority not expressly authorized by this subtitle, unless the delegation is made pursuant to an authority in law that expressly makes reference to this section. “(3) Reorganization act.— Notwithstanding any other law, the President (through authorities provided under chapter 9 of title 5, United States Code) may not authorize the transfer to the Corporation of any power, function, or authority in addition to powers, functions, and authorities provided by law. “(l) Bylaws.— Notwithstanding section 1658(f)(2), the Corporate Board shall adopt, and may from time to time amend, any bylaw that is necessary for the proper management and functioning of the Corporation. The Corporate Board shall not adopt any bylaw that has not been reviewed and approved by the Secretary. “(m) Organization.— The Corporate Board shall provide a system of organization to fix responsibility and promote efficiency. “(n) Personnel and Facilities of Corporation.— “(1) Appointment and compensation of personnel.— The Corporation may select and appoint officers, attorneys, employees, and agents, who shall be vested with such powers and duties as the Corporation may determine. “(2) Use of facilities and services of the department of agriculture.— Notwithstanding any other provision of law, to perform the responsibilities of the Corporation under this subtitle, the Corporation may partially or jointly utilize the facilities of and the services of employees of the Department of Agriculture, without cost to the Corporation. “(3) Government employment laws.—An officer or employee of the Corporation shall be subject to all laws of the United States relating to governmental employment.”. (b) Conforming Amendment.— Section 5315 of title 5, United States Code, is amended by adding at the end the following: “Executive Director of the Alternative Agricultural Research and Commercialization Corporation.”. SEC. 724. RESEARCH AND DEVELOPMENT GRANTS, CONTRACTS, AND AGREEMENTS. Section 1660 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5904) is amended— (1) by striking “Center” each place it appears and inserting “Corporation”; (2) in subsection (c), by striking “Board” and inserting “Corporate Board”; and (3) in subsection (f), by striking “non-Center” and inserting “non-Corporation”. SEC. 725. COMMERCIALIZATION ASSISTANCE. Section 1661 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5905) is amended— (1) by striking “Center” each place it appears and inserting “Corporation”; (2) by striking “Board” each place it appears and inserting “Corporate Board”; (3) by striking subsection (c); (4) by redesignating subsections (d), (e), and (f) as subsections (c), (d), and (e), respectively; and (5) in subsection (c) (as so redesignated)— (A) in the subsection heading of paragraph (1), by striking “director” and inserting “executive director”; and (B) by striking “Director” each place it appears and inserting “Executive Director”. SEC. 726. GENERAL RULES REGARDING THE PROVISION OF ASSISTANCE. Section 1662 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5906) is amended— (1) by striking “Center” each place it appears (except in subsection (b)) and inserting “Corporation”; (2) by striking “Board” each place it appears and inserting “Corporate Board”; and (3) in subsection (b)— (A) in the second sentence, by striking “Board, a Regional Center, or the Advisory Council” and inserting “Board or a Regional Center”; and (B) by striking the third sentence. SEC. 727. REGIONAL CENTERS. Section 1663 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5907) is amended— (1) by striking “Board” each place it appears and inserting “Corporate Board”; (2) in subsection (e)(8), by striking “Center” and inserting “Corporation”; and (3) in subsection (f)— (A) in paragraph (2), by striking “in consultation with the Advisory Council appointed under section 1661(c)”; and (B) by striking paragraphs (3) and (4) and inserting the following: “(3) Recommendation.— The Regional Director, based on the comments of the reviewers, shall make and submit a rec ommendation to the Board, which shall not be binding on the Board.”. SEC. 728. ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION REVOLVING FUND. Section 1664 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5908) is amended to read as follows: “SEC. 1664. ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION REVOLVING FUND. “(a) Establishment.— There is established in the Treasury of the United States a revolving fund to be known as the Alternative Agricultural Research and Commercialization Revolving Fund. The Fund shall be available to the Corporation, without fiscal year limitation, to carry out this subtitle. “(b) Contents of Fund.— There shall be deposited in the Fund— “(1) such amounts as may be appropriated or transferred to support programs and activities of the Corporation; “(2) payments received from any source for products, services, or property furnished in connection with the activities of the Corporation; “(3) fees and royalties collected by the Corporation from licensing or other arrangements relating to commercialization of products developed through projects funded in whole or part by grants, contracts, or cooperative agreements executed by the Corporation; “(4) proceeds from the sale of assets, loans, and equity interests made in furtherance of the purposes of the Corporation; “(5) donations or contributions accepted by the Corporation to support authorized programs and activities; and “(6) any other funds acquired by the Corporation. “(c) Funding Allocations.— Funding of projects and activities under this subtitle shall be subject to the following restrictions: “(1) Of the total amount of funds made available for a fiscal year under this subtitle— “(A) not more than the lesser of 15 percent or $3,000,000 may be set aside to be used for authorized administrative expenses of the Corporation; “(B) not more than 1 percent may be set aside to be used for generic studies and specific reviews of individual proposals for financial assistance; and “(C) except as provided in subsection (e), not less than 84 percent shall be set aside to be awarded to qualified applicants who file project applications with, or respond to requests for proposals from, the Corporation under sections 1660 and 1661. “(2) Any funds remaining uncommitted at the end of a fiscal year shall be credited to the Fund and added to the total program funds available to the Corporation for the next fiscal year. “(d) Authorized Administrative Expenses.— For the purposes of this section, authorized administrative expenses shall include all ordinary and necessary expenses, including all compensation for personnel and consultants, expenses for computer usage, or space needs of the Corporation and similar expenses. Funds authorized for administrative expenses shall not be available for the acquisition of real property. “(e) Project Monitoring.— The Corporate Board may establish, in the bylaws of the Corporate Board, that a percentage (which shall not exceed 1 percent) of the funds provided under subsection (c) for any commercialization project shall be expended to ensure that project funds are being utilized in accordance with the project agreement. “(f) Termination of the Fund.— On expiration of the authority provided by this subtitle, all assets (after payment of all outstanding obligations) of the Fund shall revert to the general fund of the Treasury. “(g) Authorization of Appropriations; Capitalization.— “(1) Authorization of appropriation.— There are authorized to be appropriated to the Fund $75,000,000 for each of fiscal years 1996 through 2002. “(2) Capitalization.— The Executive Director may pay in as capital of the Corporation, out of dollar receipts made available through annual appropriations, $75,000,000 for each of fiscal years 1996 through 2002. On the payment of an amount of capital by the Executive Director, the Corporation shall issue an equivalent amount of capital stock to the Secretary of the Treasury. “(3) Transfer.— All obligations, assets, and related rights and responsibilities of the former Alternative Agricultural Research and Commercialization Center established under former section 1658 of this Act (as in effect on the day before the date of enactment of the Federal Agriculture Improvement and Reform Act of 1996) are transferred to the Corporation.”. SEC. 729. PROCUREMENT PREFERENCES FOR PRODUCTS RECEIVING CORPORATION ASSISTANCE. Subtitle G of title XVI of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5901 et seq.) is amended by adding at the end the following: “SEC. 1665. PROCUREMENT OF ALTERNATIVE AGRICULTURAL RESEARCH AND COMMERCIALIZATION PRODUCTS. “(a) Definition of Executive Agency.— In this section, the term ‘executive agency’ has the meaning provided the term in section 4(1) of the Office of Federal Procurement Policy Act (41 U.S.C. 403(1)). “(b) Procurement.— To further the achievement of the purposes specified in section 1657(b), an executive agency may, for any procurement involving the acquisition of property, establish set-asides and preferences for property that has been commercialized with assistance provided under this subtitle. “(c) Set-Asides.— Procurements solely for property may be set aside exclusively for products developed with commercialization assistance provided under section 1661. “(d) Preferences.— Preferences for property developed with assistance provided under this subtitle in procurements involving the acquisition of property may be— “(1) a price preference, if the procurement is solely for property, of not greater than a percentage to be determined within the sole discretion of the head of the procuring agency; or “(2) a technical evaluation preference included as an award factor or subfactor as determined within the sole discretion of the head of the procuring agency. “(e) Notice.— Each competitive solicitation or invitation for bids selected by an executive agency for a set-aside or preference under this section shall contain a provision notifying offerors where a list of products eligible for the set-aside or preference may be obtained. “(f) Eligibility.— Offerors shall receive the set-aside or preference required under this section if, in the case of products developed with financial assistance under— “(1) section 1660, less than 10 years have elapsed since the expiration of the grant, cooperative agreement, or contract; “(2) paragraph (1) or (2) of section 1661(a), less than 5 years have elapsed since the date the loan was made or insured; “(3) section 1661(a)(3), less than 5 years have elapsed since the date of sale of any remaining government equity interest in the company; or “(4) section 1661(a)(4), less than 5 years have elapsed since the date of the final payment on the repayable grant.”. SEC. 730. BUSINESS PLAN AND FEASIBILITY STUDY AND REPORT. (a) Business Plan.— Not later than 180 days after the date of enactment of this Act, the Alternative Agricultural Research and Commercialization Corporation established by section 1658 of the Food, Agriculture, Conservation, and Trade Act of 1990 shall— (1) develop a 5-year business plan pursuant to section 1659(c)(1)(E) of the Act; and (2) submit the plan to the Secretary of Agriculture, the Committee on Agriculture of the House of Representatives, and the Committee on Agriculture, Nutrition, and Forestry of the Senate. (b) Feasibility Study and Report.— (1) Study.— The Secretary of Agriculture shall conduct a study of, and prepare a report on, the continued feasibility of the Alternative Agricultural Research and Commercialization Corporation. In conducting the study, the Secretary shall examine options for privatizing the Corporation and converting the Corporation to a Government-sponsored enterprise. (2) Report.— Not later than December 31, 2001, the Secretary shall transmit the report required by paragraph (1) to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate. Subtitle B— Amendments to the Consolidated Farm and Rural Development Act CHAPTER 1— GENERAL PROVISIONS SEC. 741. WATER AND WASTE FACILITY LOANS AND GRANTS. (a) In General.— Section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)) is amended— (1) in the first sentence of paragraph (2), by striking “$500,000,000” and inserting “$590,000,000”; (2) by striking paragraph (7) and inserting the following: “(7) Definition of rural and rural areas.— For the purpose of water and waste disposal grants and direct and guaranteed loans provided under paragraphs (1) and (2), the terms ‘rural’ and ‘rural area’ mean a city, town, or unincorporated area that has a population of no more than 10,000 inhabitants.”; (3) by striking paragraphs (9), (10), and (11) and inserting the following: “(9) Conformity with state drinking water standards.— No Federal funds shall be made available under this section for a water system unless the Secretary determines that the water system will make significant progress toward meeting the standards established under title XIV of the Public Health Service Act (commonly known as the ‘Safe Drinking Water Act’) (42 U.S.C. 300f et seq.). “(10) Conformity with federal and state water pollution control standards.— No Federal funds shall be made available under this section for a water treatment discharge or waste disposal system unless the Secretary determines that the effluent from the system conforms with applicable Federal and State water pollution control standards. “(11) Rural business opportunity grants.— “(A) In general.— The Secretary may make grants, not to exceed $1,500,000 annually, to public bodies, private nonprofit community development corporations or entities, or such other agencies as the Secretary may select to enable the recipients— “(i) to identify and analyze business opportunities, including opportunities in export markets, that will use local rural economic and human resources; “(ii) to identify, train, and provide technical assistance to existing or prospective rural entrepreneurs and managers; “(iii) to establish business support centers and otherwise assist in the creation of new rural businesses, the development of methods of financing local businesses, and the enhancement of the capacity of local individuals and entities to engage in sound economic activities; “(iv) to conduct regional, community, and local economic development planning and coordination, and leadership development; and “(v) to establish centers for training, technology, and trade that will provide training to rural businesses in the utilization of interactive communications technologies to develop international trade opportunities and markets. “(B) Criteria.— In awarding the grants, the Secretary shall consider, among other criteria to be established by the Secretary— “(i) the extent to which the applicant provides development services in the rural service area of the applicant; and “(ii) the capability of the applicant to accomplish the activities described in the relevant clauses of subparagraph (A). “(C) Coordination.— The Secretary shall ensure, to the maximum extent practicable, that assistance provided under this paragraph is coordinated with and delivered in cooperation with similar services or assistance provided to rural residents by the Cooperative State Research, Education, and Extension Service or other Federal agencies. “(D) Authorization of appropriations.— There are authorized to be appropriated to carry out this paragraph $7,500,000 for each of fiscal years 1996 through 2002.”; (4) by striking paragraphs (14) and (15); (5) by redesignating paragraphs (16) through (20) as paragraphs ( 14) through (18), respectively; and (6) in paragraph (14) (as so redesignated)— (A) by striking “(14)(A) The” and inserting the following: “(14) Rural water and wastewater technical assistance and training programs.— “(A) In general.— The”; (B) in subparagraph (A)— (i) by striking “(i) identify” and inserting the following: “(i) identify”; (ii) by striking “(ii) prepare” and inserting the following: “(ii) prepare”; and (iii) by striking “(iii) improve” and inserting the following: “(iii) improve”; (C) in subparagraph (B), by striking “(B) In” and inserting the following: “(B) Selection priority.— In”; and (D) in subparagraph (C)— (i) by striking “(C) Not” and inserting the following: “(C) Funding.— Not”; and (ii) by striking “2 per centum of any funds provided in appropriations Acts” and inserting “3 percent of any funds appropriated”. (b) Conforming Amendment.— The second sentence of section 309A(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1929a(a)) (as amended by section 661(c)(1) is amended by striking “, 306(a)(14),”. SEC. 742. EMERGENCY COMMUNITY WATER ASSISTANCE GRANT PROGRAM FOR SMALL COMMUNITIES. Section 306A of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926a) is amended— (1) in subsection (e)— (A) in paragraph (1)(A), by striking “15,000” and inserting “10,000”; and (B) in paragraph (2), by striking “5,000” and inserting “3,000”; and (2) by striking subsection (i) and inserting the following: “(i) Authorization of Appropriations.— There are authorized to be appropriated to carry out this section $35,000,000 for each of fiscal years 1996 through 2002.”. SEC. 743. EMERGENCY COMMUNITY WATER ASSISTANCE GRANT PROGRAM FOR SMALLEST COMMUNITIES. Section 306B of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926b) is repealed. SEC. 744. AGRICULTURAL CREDIT INSURANCE FUND. Section 309(f) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1929(f)) is amended— (1) by striking paragraph (1); and (2) by redesignating paragraphs (2) through (6) as paragraphs (1) through (5), respectively. SEC. 745. RURAL DEVELOPMENT INSURANCE FUND. Section 309A(g) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1929a(g)) is amended— (1) by striking paragraph (1); and (2) by redesignating paragraphs (2) through (8) as paragraphs (1) through (7), respectively. SEC. 746. INSURED WATERSHED AND RESOURCE CONSERVATION AND DEVELOPMENT LOANS. Section 310A of the Consolidated Farm and Rural Development Act (7 U.S.C. 1931) is repealed. SEC. 747. RURAL INDUSTRIALIZATION ASSISTANCE. (a) In General.— Section 310B of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932) is amended— (1) in the first sentence of subsection (a)— (A) by striking “and” at the end of clause (2); and (B) by inserting before the period the following: “, and (4) to facilitate economic opportunity for industries undergoing adjustment from terminated Federal agricultural price and income support programs or increased competition from foreign trade”; (2) in subsection (b), by striking “(b)(1)” and all that follows through “(2) The” and inserting the following: “(b) Solid Waste Management Grants.— The”; (3) in subsection (c)— (A) by striking “(c)(1) The” and inserting the following: “(c) Rural Business Enterprise Grants.— “(1) In general.— The”; (B) in paragraph (1), by inserting “(including nonprofit entities)” after “private business enterprises”; (C) in paragraph (2)— (i) by striking “(2) The” and inserting the following: “(2) Passenger transportation services or facilities.— The”; and (ii) by striking “make grants” and inserting “award grants on a competitive basis”; and (D) by adding at the end the following: “(3) Grants to aid industries in adjusting to terminated federal agricultural programs or increased foreign competition.— The Secretary may make grants under this section to facilitate economic opportunity for industries undergoing adjustment from terminated Federal agricultural price and income support programs or increased competition from foreign trade.”; (4) by striking subsection (e) and inserting the following: “(e) Rural Cooperative Development Grants.— “(1) Definitions.— In this subsection: “(A) Nonprofit institution.— The term ‘nonprofit institution’ means any organization or institution, including an accredited institution of higher education, no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual. “(B) United states.— The term ‘United States’ means the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the other territories and possessions of the United States. “(2) Grants.— The Secretary shall make grants under this subsection to nonprofit institutions for the purpose of enabling the institutions to establish and operate centers for rural cooperative development. “(3) Goals.— The goals of a center funded under this subsection shall be to facilitate the creation of jobs in rural areas through the development of new rural cooperatives, value added processing, and rural businesses. “(4) Application.— Any 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. “(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 grants.— Grants 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 administering a nationally coordinated, regionally or State-wide operated project; “(B) demonstrate previous expertise in providing technical assistance in rural areas; “(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) demonstrate the ability to create horizontal linkages among businesses within and among various sectors in rural areas of the United States and vertical linkages to domestic and international markets; “(E) commit to providing technical assistance and other services to underserved and economically distressed areas in rural areas of the United States; and “(F) commit to providing greater than a 25 percent matching contribution with private funds and in-kind contributions. “(6) 1-year grants; authority to approve grant for 1 additional year without application.— The Secretary shall make grants under this subsection for a period of 1 year. The Secretary shall evaluate programs receiving assistance under this subsection. If the Secretary determines it to be in the best interest of the program, the Secretary may award an additional grant to the program for the immediately succeeding year without application for the grant. “(7) Technical assistance to prevent excessive unemployment or underemployment.— In carrying out this subsection, the Secretary may provide technical assistance to alleviate or prevent conditions of excessive unemployment, underemployment, outmigration, or low employment growth in economically distressed rural areas that the Secretary determines have a substantial need for the assistance. The assistance may include planning and feasibility studies, management and operational assistance, and studies evaluating the need for development potential of projects that increase employment and improve economic growth in the areas. “(8) Grants to defray administrative costs.— The Secretary may make grants to defray not to exceed 75 percent of the costs incurred by organizations and public bodies to carry out projects for which grants or loans are made under this subsection. For purposes of determining the non-Federal share of the costs, the Secretary shall consider contributions in cash and in kind, fairly evaluated, including premises, equipment, and services. “(9) Authorization of appropriations.— There are authorized to be appropriated to carry out this subsection $50,000,000 for each of fiscal years 1996 through 2002.”; (5) by striking subsections (f), (g), (h), and (i); (6) by redesignating subsection (j) as subsection (f); and (7) by adding at the end the following: “(g) Loan Guarantees for the Purchase of Cooperative Stock.— “(1) Definition of farmer.— In this subsection, the term ‘farmer’ means any farmer that the Secretary determines is a family farmer. “(2) Loan guarantees.— The Secretary may guarantee loans under this section to individual farmers for the purpose of purchasing start-up capital stock of a farmer cooperative established for the purpose of processing an agricultural commodity. “(3) Eligibility.— To be eligible for a loan guarantee under this subsection, a farmer must produce the agricultural commodity that will be processed by the cooperative.”. (b) Conforming Amendments.— (1) Clause (iii) of section 307(a)(6)(B) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1927(a)(6)(B)) (as redesignated by section 661(a)(2)) is amended by striking “subsections (d) and (e) of section 310B” and inserting “section 310B(d)”. (2) Section 232(c)(2) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6942(c)(2)) is amended— (A) by striking “310B(b)(2)” and inserting “310B(b)”; and (B) by striking “1932(b)(2)” and inserting “1932(b)”. (3) Section 233(b) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6943(b)) is amended— (A) by striking paragraph (2); and (B) by redesignating paragraph (3) as paragraph (2). SEC. 748. ADMINISTRATION. Section 331(b)(4) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1981(b)(4)) is amended— (1) by inserting after “claims” the following: “(including debts and claims arising from loan guarantees)”; (2) by striking “Farmers Home Administration or” and inserting “Consolidated Farm Service Agency, Rural Utilities Service, Rural Housing Service, Rural Business-Cooperative Service, or a successor agency, or”; and (3) by inserting after “activities under the Housing Act Notification. of 1949.” the following: “In the case of a security instrument entered into under the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.), the Secretary shall notify the Attorney General of the intent of the Secretary to exercise the authority of the Secretary under this paragraph.”. SEC. 749. AUTHORIZATION OF APPROPRIATIONS. (a) In General.— Section 338 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1988) is amended— (1) by striking subsections (b), (c), (d), and (e); and (2) by redesignating subsection (f) as subsection (b). (b) Conforming Amendments.— (1) The first sentence of section 309(g)(1) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1929(g)(1)) is amended by inserting after “section 338(c)” the following: “(before the amendment made by section 749(a)(1) of the Federal Agriculture Improvement and Reform Act of 1996)”. (2) Section 343(b) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1991(b)) is amended by striking “338(f),” and inserting “338(b),”. SEC. 750. TESTIMONY BEFORE CONGRESSIONAL COMMITTEES. Section 345 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1993) is repealed. SEC. 751. PROHIBITION ON USE OF LOANS FOR CERTAIN PURPOSES. Section 363 of the Consolidated Farm and Rural Development Act (7 U.S.C. 2006e) is amended by adding at the end the following: “This section shall not apply to a loan made or guaranteed under this title for a utility line.” SEC. 752. RURAL DEVELOPMENT CERTIFIED LENDERS PROGRAM. The Consolidated Farm and Rural Development Act is amended by inserting after section 363 (7 U.S.C. 2006e) the following: “SEC. 364. RURAL DEVELOPMENT CERTIFIED LENDERS PROGRAM. “(a) Certified Lenders Program.— “(1) In general.— The Secretary may establish a program under which the Secretary may guarantee a loan for any rural development program that is made by a lender certified by the Secretary. “(2) Certification requirements.— The Secretary may certify a lender if the lender meets such criteria as the Secretary may prescribe in regulations, including the ability of the lender to properly make, service, and liquidate the guaranteed loans of the lender. “(3) Condition of certification.— As a condition of certification, the Secretary may require the lender to undertake to service the guaranteed loan using standards that are not less stringent than generally accepted banking standards concerning loan servicing that are used by prudent commercial or cooperative lenders. “(4) Guarantee.— Notwithstanding any other provision of law, the Secretary may guarantee not more than 80 percent of a loan made by a certified lender described in paragraph (1), if the borrower of the loan meets the eligibility requirements and such other criteria for the loan guarantee that are established by the Secretary. “(5) Certifications.— With respect to loans to be guaranteed, the Secretary may permit a certified lender to make appropriate certifications (as provided in regulations issued by the Secretary)— “(A) relating to issues such as creditworthiness, repayment ability, adequacy of collateral, and feasibility of the operation; and “(B) that the borrower is in compliance with all requirements of law, including regulations issued by the Secretary. “(6) Relationship to other requirements.— This sub section shall not affect the responsibility of the Secretary to determine eligibility, review financial information, and other wise assess an application. “(b) Preferred Certified Lenders Program.— “(1) In general.— The Secretary may establish a preferred certified lenders program for lenders who establish their— “(A) knowledge of, and experience under, the program established under subsection (a); “(B) knowledge of the regulations concerning the particular guaranteed loan program; and “(C) proficiency related to the certified lender program requirements. “(2) Additional lending institutions.— The Secretary may certify any lending institution as a preferred certified lender if the institution meets such additional criteria as the Secretary may prescribe by regulation. “(3) Revocation of designation.— The designation of a lender as a preferred certified lender shall be revoked if the Secretary determines that the lender is not adhering to the rules and regulations applicable to the program or if the loss experiences of the preferred certified lender are greater than other preferred certified lenders, except that the suspension or revocation shall not affect any outstanding guarantee. “(4) Condition of certification.— As a condition of the preferred certification, the Secretary shall require the lender to undertake to service the loan guaranteed by the Secretary under this subsection using generally accepted banking standards concerning loan servicing employed by prudent commercial or cooperative lenders. The Secretary shall, at least annually, monitor the performance of each preferred certified lender to ensure that the conditions of the certification are being met. “(5) Effect of preferred lender certification.— Notwithstanding any other provision of law, the Secretary may— “(A) guarantee not more than 80 percent of any approved loan made by a preferred certified lender as described in this subsection, if the borrower meets the eligibility requirements and such other criteria as may be applicable to loans guaranteed by the Secretary; and “(B) permit preferred certified lenders to make all decisions, with respect to loans to be guaranteed by the Secretary under this subsection relating to creditworthiness, the closing, monitoring, collection, and liquidation of loans, and to accept appropriate certifications, as provided in regulations issued by the Secretary, that the borrower is in compliance with all requirements of law and regulations issued by the Secretary.”. SEC. 753. SYSTEM FOR DELIVERY OF CERTAIN RURAL DEVELOPMENT PROGRAMS. (a) In General.— Section 365 of the Consolidated Farm and Rural Development Act (7 U.S.C. 2008) is repealed. (b) Conforming Amendments.— (1) Section 2375 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 6613) is amended— (A) in subsection (e), by striking “, as defined in section 365(b)(2) of the Consolidated Farm and Rural Development Act,”; and (B) by adding at the end the following: “(g) Definition of Designated Rural Development Program.— In this section, the term ‘designated rural development program’ means a program carried out under section 304(b), 306(a), or 310B(e) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1924(b), 1926(a), and 1932(e)) for which funds are available at any time during the fiscal year.”. (2) Paragraph (2) of section 233(b) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6943(b)) (as redesignated by section 747(b)(3)(B)) is amended by striking “sections 365 through 369 of the Consolidated Farm and Rural Development Act (7 U.S.C. 2008–2008d)” and inserting “section 369 of the Consolidated Farm and Rural Development Act (7 U.S.C. 2008d)”. SEC. 754. STATE RURAL ECONOMIC DEVELOPMENT REVIEW PANEL. Section 366 of the Consolidated Farm and Rural Development Act (7 U.S.C. 2008a) is repealed. SEC. 755. LIMITED TRANSFER AUTHORITY OF LOAN AMOUNTS. Section 367 of the Consolidated Farm and Rural Development Act (7 U.S.C. 2008b) is repealed. SEC. 756. ALLOCATION AND TRANSFER OF LOAN GUARANTEE AUTHORITY. Section 368 of the Consolidated Farm and Rural Development Act (7 U.S.C. 2008c) is repealed. SEC. 757. WATER SYSTEMS FOR RURAL AND NATIVE VILLAGES IN ALASKA. The Consolidated Farm and Rural Development Act is amended by inserting after section 306C (7 U.S.C. 1926c) the following: “SEC. 306D. WATER SYSTEMS FOR RURAL AND NATIVE VILLAGES IN ALASKA. “(a) In General.— The Secretary may make grants to the State of Alaska for the benefit of rural or Native villages in Alaska to provide for the development and construction of water and wastewater systems to improve the health and sanitation conditions in those villages. “(b) Mactching Funds.— To be eligible to receive a grant under subsection (a), the State of Alaska shall provide equal matching funds from non-Federal sources. “(c) Consultation With the State of Alaska.— The Secretary shall consult with the State of Alaska on a method of prioritizing the allocation of grants under subsection (a) according to the needs of, and relative health and sanitation conditions in, each village. “(d) Authorization of Appropriations.— There are authorized to be appropriated to carry out this section $15,000,000 for each of fiscal years 1996 through 2002.”. SEC. 758. APPLICATION REQUIREMENTS RELATING TO WATER AND WASTE DISPOSAL LOAN AND GRANT PROGRAMS. Section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 926(a)) is amended by inserting after paragraph (4) the following: “(5) Application requirements.— Not earlier than 60 days before a preliminary application is filed for a loan under paragraph (1) or a grant under paragraph (2) for a water or waste disposal purpose, a notice of the intent of the applicant to apply for the loan or grant shall be published in a general circulation newspaper. The selection of engineers for a project design shall be done by a request for proposals by the applicant.”. SEC. 759. NATIONAL SHEEP INDUSTRY IMPROVEMENT CENTER. The Consolidated Farm and Rural Development Act (as amended by section 649) is amended by adding at the end the following: Goats. 7 USC 2008j. “SEC. 375. NATIONAL SHEEP INDUSTRY IMPROVEMENT CENTER. “(a) Definitions.— In this section: “(1) Board.— The term ‘Board’ means the Board of Directors established under subsection (f). “(2) Center.— The term ‘Center’ means the National Sheep Industry Improvement Center established under subsection (b). “(3) Eligible entity.— The term ‘eligible entity’ means an entity that promotes the betterment of the United States sheep or goat industries and that is— “(A) a public, private, or cooperative organization; “(B) an association, including a corporation not operated for profit; “(C) a federally recognized Indian Tribe; or “(D) a public or quasi-public agency. “(4) Fund.— The term ‘Fund’ means the National Sheep Industry Improvement Center Revolving Fund established under subsection (e). “(b) Establishment of Center.— The Secretary shall establish a National Sheep Industry Improvement Center. “(c) Purposes.— The purposes of the Center shall be to— “(1) promote strategic development activities and collaborative efforts by private and State entities to maximize the impact of Federal assistance to strengthen and enhance production and marketing of sheep or goat products in the United States; “(2) optimize the use of available human capital and resources within the sheep or goat industries; “(3) provide assistance to meet the needs of the sheep or goat industry for infrastructure development, business development, production, resource development, and market and environmental research; “(4) advance activities that empower and build the capacity of the United States sheep or goat industry to design unique responses to the special needs of the sheep or goat industries on both a regional and national basis; and “(5) adopt flexible and innovative approaches to solving the long-term needs of the United States sheep or goat industry. “(d) Strategic Plan.— “(1) In general.— The Center shall submit to the Secretary an annual strategic plan for the delivery of financial assistance provided by the Center. “(2) Requirements.— A strategic plan shall identify— “(A) goals, methods, and a benchmark for measuring the success of carrying out the plan and how the plan relates to the national and regional goals of the Center; “(B) the amount and sources of Federal and non-Federal funds that are available for carrying out the plan; “(C) funding priorities; “(D) selection criteria for funding; and “(E) a method of distributing funding. “(e) Revolving Fund.— “(1) Establishment.— There is established in the Treasury the National Sheep Industry Improvement Center Revolving Fund. The Fund shall be available to the Center, without fiscal year limitation, to carry out the authorized programs and activities of the Center under this section. “(2) Contents of fund.— There shall be deposited in the Fund— “(A) such amounts as may be appropriated, transferred, or otherwise made available to support programs and activities of the Center; “(B) payments received from any source for products, services, or property furnished in connection with the activities of the Center; “(C) fees and royalties collected by the Center from licensing or other arrangements relating to commercialization of products developed through projects funded, in whole or part, by grants, contracts, or cooperative agreements executed by the Center; “(D) proceeds from the sale of assets, loans, and equity interests made in furtherance of the purposes of the Center; “(E) donations or contributions accepted by the Center to support authorized programs and activities; and “(F) any other funds acquired by the Center. “(3) Use of fund.— “(A) In general.— The Center may use amounts in the Fund to make grants and loans to eligible entities in accordance with a strategic plan submitted under sub section (d). “(B) Continued existence.— The Center shall manage the Fund in a manner that ensures that sufficient amounts are available in the Fund to carry out subsection (c). “(C) Diverse area.— The Center shall, to the maximum extent practicable, use the Fund to serve broad geographic areas and regions of diverse production. “(D) Variety of loans and grants—The Center shall, to the maximum extent practicable, use the Fund to provide a variety of grants and intermediate- and long-term loans. “(E) Administration.— The Center may not use more than 3 percent of the amounts in the Fund for a fiscal year for the administration of the Center. “(F) Influencing legislation.— None of the amounts in the Fund may be used to influence legislation. “(G) Accounting.— To be eligible to receive amounts from the Fund, an entity must agree to account for the amounts using generally accepted accounting principles. “(H) Uses of fund.— The Center may use amounts in the Fund to— “(i) participate with Federal and State agencies in financing activities that are in accordance with a strategic plan submitted under subsection (d), including participation with several States in a regional effort; “(ii) participate with other public and private funding sources in financing activities that are in accordance with the strategic plan, including participation in a regional effort; “(iii) provide security for, or make principal or interest payments on, revenue or general obligation bonds issued by a State, if the proceeds from the sale of the bonds are deposited in the Fund; “(iv) accrue interest; “(v) guarantee or purchase insurance for local obligations to improve credit market access or reduce interest rates for a project that is in accordance with the strategic plan; or “(vi) sell assets, loans, and equity interests acquired in connection with the financing of projects funded by the Center. “(4) Loans.— “(A) Rate.— A loan from the Fund may be made at an interest rate that is below the market rate or may be interest free. “(B) Term.— The term of a loan may not exceed the shorter of— “(i) the useful life of the activity financed; or “(ii) 40 years. “(C) Source of repayment.— The Center may not make a loan from the Fund unless the recipient establishes an assured source of repayment. “(D) Proceeds.— All payments of principal and interest on a loan made from the Fund shall be deposited into the Fund. “(5) Maintenance of effort.— The Center shall use the Fund only to supplement and not to supplant Federal, State, and private funds expended for rural development. “(6) Funding.— “(A) Deposit of funds.— All Federal and non-Federal amounts received by the Center to carry out this section shall be deposited in the Fund. “(B) Mandatory funds.— Out of any moneys in the Treasury not otherwise appropriated, the Secretary of the Treasury shall provide to the Center not to exceed $20,000,000 to carry out this section. “(C) Additional funds.— In addition to any funds provided under subparagraph (B), there is authorized to be appropriated $30,000,000 to carry out this section. “(D) Privatization.— No additional Federal funds shall be used to carry out this section beginning on the earlier of— “(i) the date that is 10 years after the date of enactment of this section; or “(ii) the day after a total of $50,000,000 has been made available under subparagraphs (B) and (C) to carry out this section. “(f) Board of Directors.— “(1) In general.— The management of the Center shall be vested in a Board of Directors. “(2) Powers.— The Board shall— “(A) be responsible for the general supervision of the Center; “(B) review any grant, loan, contract, or cooperative agreement to be made or entered into by the Center and any financial assistance provided to the Center; “(C) make the final decision, by majority vote, on whether and how to provide assistance to an applicant; and “(D) develop and establish a budget plan and a longterm operating plan to carry out the goals of the Center. “(3) Composition.— The Board shall be composed of— “(A) 7 voting members, of whom— “(i) 4 members shall be active producers of sheep or goats in the United States; “(ii) 2 members shall have expertise in finance and management; and “(iii) 1 member shall have expertise in lamb, wool, goat, or goat product marketing; and “(B) 2 nonvoting members, of whom— “(i) 1 member shall be the Under Secretary of Agriculture for Rural Development; and “(ii) 1 member shall be the Under Secretary of Agriculture for Research, Education, and Economics. “(4) Nomination.— “(A) Nominating body.— The Secretary shall appoint the voting members of the Board from nominations submitted by organizations described in subparagraph (B). “(B) National organizations.— A national organization is described in this subparagraph if the organization— “(i) consists primarily of active sheep or goat producers in the United States; and “(ii) has as the primary interest of the organization the production of sheep or goats in the United States. “(5) Term of office.— “(A) In general.— Subject to subparagraph (B), the term of office of a voting member of the Board shall be 3 years. “(B) Staggered initial terms.— The initial voting members of the Board (other than the chairperson of the initially established Board) shall serve for staggered terms of 1, 2, and 3 years, as determined by the Secretary. “(C) Reelection.— A voting member may be reelected for not more than 1 additional term. “(6) Vacancy.— “(A) In general.— A vacancy on the Board shall be filled in the same manner as the original Board. “(B) Reelection.— A member elected to fill a vacancy for an unexpired term may be reelected for 1 full term. “(7) Chairperson.— “(A) In general.— The Board shall select a chairperson from among the voting members of the Board. “(B) Term.— The term of office of the chairperson shall be 2 years. “(8) Annual meeting.— “(A) In general.— The Board shall meet not less than once each fiscal year at the call of the chairperson or at the request of the executive director appointed under subsection (g)(1). “(B) Location.— The location of a meeting of the Board shall be established by the Board. “(9) Voting.— “(A) Quorum.— A quorum of the Board shall consist of a majority of the voting members. “(B) Majority vote.— A decision of the Board shall be made by a majority of the voting members of the Board. “(10) Conflicts of interest.— “(A) In general.— Except as provided in subparagraph (D), a member of the Board shall not vote on any matter respecting any application, contract, claim, or other particular matter pending before the Board in which, to the knowledge of the member, an interest is held by— “(i) the member; “(ii) any spouse of the member; “(iii) any child of the member; “(iv) any partner of the member; “(v) any organization in which the member is serving as an officer, director, trustee, partner, or employee; or “(vi) any person with whom the member is negotiating or has any arrangement concerning prospective employment or with whom the member has a financial interest. “(B) Removal.— Any action by a member of the Board that violates subparagraph (A) shall be cause for removal from the Board. “(C) Validity of action.— An action by a member of the Board that violates subparagraph (A) shall not impair or otherwise affect the validity of any otherwise lawful action by the Board. “(D) Disclosure.— “(i) In general.— If a member of the Board makes a full disclosure of an interest and, prior to any participation by the member, the Board determines, by majority vote, that the interest is too remote or too inconsequential to affect the integrity of any participation by the member, the member may participate in the matter relating to the interest, except as provided in subparagraph (E)(iii). “(ii) Vote.— A member that discloses an interest under clause (i) shall not vote on a determination of whether the member may participate in the matter relating to the interest. “(E) Remands.— “(i) In general.— The Secretary may vacate and remand to the Board for reconsideration any decision made pursuant to subsection (e)(3)(H) if the Secretary determines that there has been a violation of this paragraph or any conflict of interest provision of the bylaws of the Board with respect to the decision. “(ii) Reasons.— In the case of any violation and remand of a funding decision to the Board under clause (i), the Secretary shall inform the Board of the reasons for the remand. “(iii) Conflicted members not to vote on remanded decisions.— If a decision with respect to a matter is remanded to the Board by reason of a conflict of interest faced by a Board member, the member may not participate in any subsequent decision with respect to the matter. “(11) Compensation.— “(A) In general.— A member of the Board shall not receive any compensation by reason of service on the Board. “(B) Expenses.— A member of the Board shall be reimbursed for travel, subsistence, and other necessary expenses incurred by the member in the performance of a duty of the member. “(12) Bylaws.— The Board shall adopt, and may from time to time amend, any bylaw that is necessary for the proper management and functioning of the Center. “(13) Public hearings.— Not later than 1 year after the date of enactment of this section, the Board shall hold public hearings on policy objectives of the program established under this section. “(14) Organizational system.— The Board shall provide a system of organization to fix responsibility and promote efficiency in carrying out the functions of the Board. “(15) Use of department of agriculture.— The Board may, with the consent of the Secretary, utilize the facilities of and the services of employees of the Department of Agriculture, without cost to the Center. “(g) Officers and Employees.— “(1) Executive director.— “(A) In general.— The Board shall appoint an executive director to be the chief executive officer of the Center. “(B) Tenure.— The executive director shall serve at the pleasure of the Board. “(C) Compensation.— Compensation for the executive director shall be established by the Board. “(2) Other officers and employees.— The Board may select and appoint officers, attorneys, employees, and agents who shall be vested with such powers and duties as the Board may determine. “(3) Delegation.— The Board may, by resolution, delegate to the chairperson, the executive director, or any other officer or employee any function, power, or duty of the Board other than voting on a grant, loan, contract, agreement, budget, or annual strategic plan. “(h) Consultation.— To carry out this section, the Board may consult with— “(1) State departments of agriculture; “(2) Federal departments and agencies; “(3) nonprofit development corporations; “(4) colleges and universities; “(5) banking and other credit-related agencies; “(6) agriculture and agribusiness organizations; and “(7) regional planning and development organizations. “(i) Oversight.— “(1) In general.— The Secretary shall review and monitor compliance by the Board and the Center with this section. “(2) Sanctions.— If, following notice and opportunity for a hearing, the Secretary finds that the Board or the Center is not in compliance with this section, the Secretary may— “(A) cease making deposits to the Fund; “(B) suspend the authority of the Center to withdraw funds from the Fund; or “(C) impose other appropriate sanctions, including recoupment of money improperly expended for purposes prohibited or not authorized by this Act and disqualification from receipt of financial assistance under this section. “(3) Rescission of sanctions.— The Secretary shall rescind sanctions imposed under paragraph (2) on a finding by the Secretary that there is no longer any failure by the Board or the Center to comply with this section or that the noncompliance will be promptly corrected.”. SEC. 759A. COOPERATIVE AGREEMENTS. Section 607(b) of the Rural Development Act of 1972 (7 U.S.C. 2204b(b)) is amended by striking paragraph (4) and inserting the following: “(4) Cooperative agreements.— “(A) In general.— Notwithstanding chapter 63 of title 31, United States Code, the Secretary may enter into cooperative agreements with other Federal agencies. State and local governments, and any other organization or individual to improve the coordination and effectiveness of Federal programs, services, and actions affecting rural areas, including the establishment and financing of interagency groups, if the Secretary determines that the objectives of the agreement will serve the mutual interest of the parties in rural development activities. “(B) Cooperators.— Each cooperator, including each Federal agency, to the extent that funds are otherwise available, may participate in any cooperative agreement or working group established pursuant to this paragraph by contributing funds or other resources to the Secretary to carry out the agreement or functions of the group.”. SEC. 759B. ELIGIBILITY FOR GRANTS TO BROADCASTING SYSTEMS. Section 310B(f) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(f)) (as redesignated by section 747(a)(6)) is amended by striking “Systems.—The” and inserting “Systems.— “(1) Definition of statewide.— In this subsection, the term ‘statewide’ means having a coverage area of not less than 90 percent of the population of a State and not less than 80 percent of the rural land area of the State (as determined by the Secretary). “(2) Grants.— The”. CHAPTER 2— RURAL COMMUNITY ADVANCEMENT PROGRAM SEC. 761. RURAL COMMUNITY ADVANCEMENT PROGRAM. The Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.) is amended by adding at the end the following: “Subtitle E— Rural Community Advancement Program “SEC. 381A. DEFINITIONS. “In this subtitle: “(1) Rural and rural area.— The terms ‘rural’ and ‘rural area’ mean, subject to section 306(a)(7), a city, town, or unincorporated area that has a population of 50,000 inhabitants or less, other than an urbanized area immediately adjacent to a city, town, or unincorporated area that has a population in excess of 50,000 inhabitants. “(2) State.— The term ‘State’ means each of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Virgin Islands of the United States, American Samoa, the Commonwealth of the Northern Mariana Islands, the Trust Territory of the Pacific Islands, and the Federated States of Micronesia. “(3) State director.— The term ‘State director’ means, with respect to a State, the Director of the Rural Economic and Community Development State Office. “SEC. 381B. ESTABLISHMENT. “The Secretary shall establish a rural community advancement program to provide grants, loans, loan guarantees, and other assistance to meet the rural development needs of local communities in States and federally recognized Indian tribes. “SEC. 381C. NATIONAL OBJECTIVES. “The national objectives of the program established under this subtitle shall be to— “(1) promote strategic development activities and collaborative efforts by State and local communities, and federally recognized Indian tribes, to maximize the impact of Federal assistance; “(2) optimize the use of resources; “(3) provide assistance in a manner that reflects the complexity of rural needs, including the needs for business development, health care, education, infrastructure, cultural resources, the environment, and housing; “(4) advance activities that empower, and build the capacity of, State and local communities to design unique responses to the special needs of the State and local communities, and federally recognized Indian tribes, for rural development assistance; and “(5) adopt flexible and innovative approaches to solving rural development problems. “SEC. 381D. STRATEGIC PLANS. “(a) In General.— The Secretary shall direct each of the Directors of Rural Economic and Community Development State Offices to prepare a strategic plan— “(1) for each State for the delivery of assistance under this subtitle in the State; and “(2) for each federally recognized Indian tribe for the delivery of assistance under this subtitle to the Indian tribe. “(b) Assistance.— “(1) In general.— Financial assistance for rural development provided under this subtitle for a State or a federally recognized Indian tribe shall be used only for orderly community development that is consistent with the strategic plan of the State or Indian tribe. “(2) Rural area.— Assistance under this subtitle may only be provided in a rural area. “(3) Small communities.— In carrying out this subtitle in a State, the Secretary shall give priority to communities with the smallest populations and lowest per capita income. “(c) Review.— The Secretary shall review the strategic plan of each State and federally recognized Indian tribe not later than 60 days after receiving the plan, and at least once every 5 years thereafter. “(d) Contents.— A strategic plan of a State or federally recognized Indian tribe under this section shall be a plan that— “(1) coordinates economic, human, and community development plans and related activities proposed for an affected area; “(2) provides that the State or federally recognized Indian tribe, as appropriate, and an affected community (including local institutions and organizations that have contributed to the planning process) shall act as full partners in the process of developing and implementing the plan; “(3) identifies goals, methods, and benchmarks for measuring the success of carrying out the plan and how the plan relates to local or regional ecosystems; “(4) in the case of a State, provides for the involvement, in the preparation of the plan, of State, local, private, and public persons, State rural development councils, federally recognized Indian tribes in the State, and community-based organizations; “(5) identifies the amount and source of Federal and non-Federal resources that are available for carrying out the plan; and “(6) includes such other information as may be required by the Secretary. “SEC. 381E. RURAL DEVELOPMENT TRUST FUND. “(a) Establishment.— There is established in the Treasury of the United States a trust fund which shall be known as the Rural Development Trust Fund (in this subtitle referred to as the ‘Trust Fund’). “(b) Accounts.— There are established in the Trust Fund the following accounts: “(1) The rural community facilities account. “(2) The rural utilities account. “(3) The rural business and cooperative development account. “(4) The national reserve account. “(5) The federally recognized Indian tribe account. “(c) Deposits Into Accounts.— Notwithstanding any other provision of law, each fiscal year— “(1) all amounts made available to carry out the authorities described in subsection (d)(1) for the fiscal year shall be deposited into the rural community facilities account of the Trust Fund; “(2) all amounts made available to carry out the authorities described in subsection (d)(2) for the fiscal year shall be deposited into the rural utilities account of the Trust Fund; and “(3) all amounts made available to carry out the authorities described in subsection (d)(3) for the fiscal year shall be deposited into the rural business and cooperative development account of the Trust Fund. “(d) Function Categories.— The function categories described in this subsection are the following: “(1) Rural community facilities.— The rural community development category consists of all amounts made available for— “(A) community facility direct and guaranteed loans under section 306(a)(1); or “(B) community facility grants under section 306(a)(19). “(2) Rural utilities.— The rural utilities category consists of all amounts made available for— “(A) water or waste disposal grants or direct or guaranteed loans under paragraph (1) or (2) of section 306(a); “(B) rural water or wastewater technical assistance and training grants under section 306(a)(14); “(C) emergency community water assistance grants under section 306A; or “(D) solid waste management grants under section 310B(b). “(3) Rural business and cooperative development.— The rural business and cooperative development category consists of all amounts made available for— “(A) rural business opportunity grants under section 306(a)(11)(A); “(B) business and industry guaranteed loans under section 310B(a)(1); or “(C) rural business enterprise grants or rural educational network grants under section 310B(c). “(e) National Reserve Account.— “(1) Transfers into account.— “(A) Initial transfer.— Each fiscal year, the Secretary shall transfer to the national reserve account of the Trust Fund from each account specified in subsection (c) not more than the applicable percentage of the amount deposited in each such account for the fiscal year under subsection (c). “(B) Repooling of unobligated funds allocated among the states.— Not earlier than July 15 of each fiscal year, the Secretary shall transfer to the national reserve account from each account specified in subsection (c) any amount in the account that is allocated for any State, and has not been obligated by the State director or obligated for specific approved projects in the State. “(2) Use.— The Secretary may use amounts in the national reserve account of the Trust Fund, pursuant to any authority described in subsection (d)— “(A) in the case of a fiscal year other than fiscal year 2001 or 2002— “(i) to meet situations of exceptional need; “(ii) to meet emergency situations; or “(iii) to provide funds to entities whose applications for funds provided under this subtitle have been approved and who have not received funds sufficient to meet the needs of the projects described in the applications; or “(B) in the case of fiscal years 2001 and 2002— “(i) to meet situations of exceptional need; or “(ii) to meet emergency situations. “(3) Applicable percentage defined.— In paragraph (1), the term ‘applicable percentage’ means, with respect to a fiscal year— “(A) 15 percent for fiscal year 1997; “(B) 12.5 percent for fiscal year 1998; “(C) 10 percent for fiscal year 1999; “(D) 7.5 percent for fiscal year 2000; “(E) 5 percent for fiscal year 2001; and “(F) 5 percent for fiscal year 2002. “(f) Federally Recognized Indian Tribe Account.— “(1) Transfers into account.— Each fiscal year, the Secretary shall transfer to the federally recognized Indian tribe account of the Trust Fund 3 percent of the amount deposited into the Trust Fund for the fiscal year under subsection (d). “(2) Use of funds.— The Secretary shall make available to federally recognized Indian tribes the amounts in the federally recognized Indian tribe account for use pursuant to any authority described in subsection (d). “(g) Allocation Among States.— The Secretary shall allocate the amounts in each account specified in subsection (c) among the States in a fair, reasonable, and appropriate manner that takes into consideration rural population, levels of income, unemployment, and other relevant factors, as determined by the Secretary. “(h) Availability of Funds Allocated for States.— The Secretary shall make available to each State the total amount allocated for the State under subsection (g) of this section that remains after applying section 381G. “SEC. 381F. TRANSFERS OF FUNDS. “(a) General Authority.— Subject to subsection (b) of this section, the State Director of any State may, during any fiscal year, transfer from each account specified in section 381E(c) a total of not more than 25 percent of the amount in the account that is allocated for the State for the fiscal year to any other account in which amounts are allocated for the State for the fiscal year. “(b) Limitation.— Except as provided in subsection (c) of this section, a transfer otherwise authorized by subsection (a) of this section to be made during a fiscal year may not be made to the extent that the sum of the amount to be transferred and all amounts so transferred by State directors under subsection (a) of this section during the fiscal year exceeds 10 percent of the total amount made available to carry out the authorities described in section 381E(d) for the fiscal year. “(c) Exceptions.— Subsections (a) and (b) shall not apply to a transfer of funds by a State director if the State director certifies to the Secretary that— “(1) there is an approved application for a project in the function category to which the funds are to be transferred but funds are not available for the project in the function category; and “(2) (A) there is no such approved application in the function category from which the funds are to be transferred; or “(B) the community that would benefit from the project has a smaller population and a lesser per capita income than any community that would benefit from a project in the function category from which the funds are to be transferred. “SEC. 381G. GRANTS TO STATES. “(a) Simple Grants.— “(1) Mandatory grant.— The Secretary shall make a grant to any eligible State for any fiscal year for which the State requests a grant under this section in an amount equal to 5 percent of the total amount allocated for the State under section 381E(g). “(2) Permissive grant.— Before July 15 of each fiscal year, the Secretary may make a grant to any State to defray the cost of any subsidy associated with a guarantee provided by an eligible public entity of the State under section 381H in an amount that does not exceed 5 percent of the total amount allocated for the State under section 381E(g). “(3) Source of funds.— The Secretary shall make grants to a State under paragraphs (1) and (2) from amounts allocated for the State in the accounts specified in section 381E(c), by reducing each such allocated amount by the same percentage. “(b) Matching Grants.— “(1) In general.— Subject to paragraph (2), the Secretary shall make a grant to any eligible State for any fiscal year for which the State requests a grant under this section in an amount equal to 5 percent of the amount allocated for the State for the fiscal year under section 381E(h). “(2) Eligibility.— A State shall be eligible for a grant under paragraph (1) if the State makes commitments to the Secretary to— “(A) expend from non-Federal sources in accordance with subsection (c) an amount that is not less than 200 percent of the amount of the grant; and “(B) maintain the amounts paid to the State under this subsection and the amount referred to in subparagraph (A) in an account separate from all other State funds until expended in accordance with subsection (c). “(3) Source of Funds.— If the Secretary makes a grant under paragraph (1) before July 15 of the fiscal year, the grant shall be made from amounts allocated for the State in the accounts specified in section 381E(c) for the fiscal year, by reducing each allocated amount by the same percentage. “(c) Use of Funds.— A State to which funds are provided under this section shall use the funds in rural areas for any activity authorized under the authorities described in section 381E(d) in accordance with the State strategic plan referred to in section 381D. “(d) Maintenance of Effort.— The State shall provide assurances to the Secretary that funds provided to the State under this section will be used only to supplement, not to supplant, the amount of Federal, State, and local funds otherwise expended for rural development assistance in the State. “(e) Appeals.— The Secretary shall provide to a State an opportunity to appeal any action taken with respect to the State under this section. “(f) Administrative Costs.— Federal funds shall not be used for any administrative costs incurred by a State in carrying out this subtitle. “(g) Expenditure of Funds by State.— “(1) In general.— Payments to a State from a grant under this section for a fiscal year shall be obligated by the State in the fiscal year or in the succeeding fiscal year. A State shall obligate funds under this section to provide assistance to rural areas. “(2) Failure to obligate.— If a State fails to obligate payments in accordance with paragraph (1), the Secretary shall make an equal reduction in the amount of payments provided to the State under this section for the immediately succeeding fiscal year. “(3) Noncompliance.— “(A) Review.— The Secretary shall review and monitor State compliance with this section. “(B) Penalty.— If the Secretary finds that there has been misuse of grant funds provided under this section, or noncompliance with any of the terms and conditions of a grant, after reasonable notice and opportunity for a hearing— “(i) the Secretary shall notify the State of the finding; and “(ii) no further payments to the State shall be made with respect to the programs funded under this section until the Secretary is satisfied that there is no longer any failure to comply or that the noncompliance will be promptly corrected. “(C) Other sanctions.— In the case of a finding of noncompliance made pursuant to subparagraph (B), the Secretary may, in addition to, or in lieu of, imposing the sanctions described in subparagraph (B), impose other appropriate sanctions, including recoupment of money improperly expended for purposes prohibited or not authorized by this section and disqualification from the receipt of financial assistance under this section. “(h) No Entitlement to Contract, Grant, or Assistance.— Nothing in this subtitle— “(1) entitles any person to assistance or a contract or grant; or “(2) limits the right of a State to impose additional limitations or conditions on assistance or a contract or grant under this section. “SEC. 381H. GUARANTEE AND COMMITMENT TO GUARANTEE LOANS. “(a) Definition of Eligible Public Entity.— In this section, the term ‘eligible public entity’ means any unit of general local government. “(b) Guarantee and Commitment.— The Secretary, on such terms and conditions as the Secretary may prescribe, may guarantee and make commitments to guarantee notes or other obligations issued by eligible public entities, or by public agencies designated by the eligible public entities, for the purposes of financing rural development activities authorized and funded under section 381G. “(c) Limitation.— The Secretary may not make a guarantee or commitment to guarantee with respect to a note or other obligation if the total amount of outstanding notes or obligations guaranteed under this section (excluding any amount repaid under the contract entered into under subsection (e)(1)(A)) for issuers in the State would exceed an amount equal to 5 times the sum of the total amount of grants made to the State under section 381G. “(d) Payment of Principal, Interest, and Costs.— Notwithstanding any other provision of this subtitle, a State to which a grant is made under section 381G may use the grant (including program income derived from the grant) to pay principal and interest due (including such servicing, underwriting, or other costs as may be specified in regulations of the Secretary) on any note or other obligation guaranteed under this section. “(e) Repayment Contract; Security.— “(1) In general.— To ensure the repayment of notes or other obligations and charges incurred under this section and as a condition for receiving the guarantees, the Secretary shall require the issuer to— “(A) enter into a contract, in a form acceptable to the Secretary, for repayment of notes or other obligations guaranteed under this section; “(B) pledge any grant for which the issuer may become eligible under this subtitle; and “(C) furnish, at the discretion of the Secretary, such other security as may be considered appropriate by the Secretary in making the guarantees. “(2) Security.— To assist in ensuring the repayment of notes or other obligations and charges incurred under this section, a State shall pledge any grant for which the State may become eligible under this subtitle as security for notes or other obligations and charges issued under this section by any eligible public entity in the State. “(f) Pledged Grants for Repayments.—Notwithstanding any other provision of this subtitle, the Secretary may apply grants pledged pursuant to paragraphs (1)(B) and (2) of subsection (e) to any repayments due the United States as a result of the guarantees. “(g) Outstanding Obligations.— The total amount of outstanding obligations guaranteed on a cumulative basis by the Secretary pursuant to subsection (b) shall not at any time exceed such amount as may be authorized to be appropriated for such purpose for any fiscal year. “(h) Purchase of Guaranteed Obligations by Federal Financing Bank.— Notes or other obligations guaranteed under this section may not be purchased by the Federal Financing Bank. “(i) Full Faith and Credit.— The full faith and credit of the United States is pledged to the payment of all guarantees made under this section. Any such guarantee made by the Secretary shall be conclusive evidence of the eligibility of the obligations for the guarantee with respect to principal and interest. The validity of the guarantee shall be incontestable in the hands of a holder of the guaranteed obligations. “SEC. 381I. LOCAL INVOLVEMENT. “An application for assistance under this subtitle shall include evidence of significant community support for the project for which the assistance is requested. In the case of assistance for a community facilities or infrastructure project, the evidence shall be in the form of a certification of support for the project from each affected general purpose local government. “SEC. 381J. INTERSTATE COLLABORATION. “The Secretary shall permit the establishment of voluntary pooling arrangements among States, and regional fund-sharing agreements, to carry out projects receiving assistance under this subtitle. “SEC. 381K. ANNUAL REPORT. “(a) In General.— The Secretary, in collaboration with State, local, public, and private entities, State rural development councils, and community-based organizations, shall prepare an annual report that contains evaluations, assessments, and performance outcomes concerning the rural community advancement programs carried out under this subtitle. “(b) Submission.— Not later than March 1 of each year, the Secretary shall— “(1) submit the report required by subsection (a) to Congress and the chief executives of the States participating in the program established under this subtitle; and “(2) make the report available to State and local participants. “SEC. 381L. RURAL DEVELOPMENT INTERAGENCY WORKING GROUP. “(a) In General.— The Secretary shall provide leadership within the Executive branch for, and assume responsibility for, establishing an interagency working group chaired by the Secretary. “(b) Duties.— The working group shall establish policy for, coordinate, make recommendations with respect to, and evaluate the performance of, all Federal rural development efforts. “SEC. 381M. DUTIES OF RURAL ECONOMIC AND COMMUNITY DEVELOPMENT STATE OFFICES. “In carrying out this subtitle, the Director of a Rural Economic and Community Development State Office shall— “(1) to the maximum extent practicable, ensure that the State strategic plan referred to in section 381D is implemented; “(2) coordinate community development objectives within the State; “(3) establish links between local, State, and field office program administrators of the Department of Agriculture; “(4) ensure that recipient communities comply with applicable Federal and State laws and requirements; and “(5) integrate State development programs with assistance under this subtitle. “SEC. 381N. ELECTRONIC TRANSFER. “The Secretary shall transfer funds in accordance with this subtitle through electronic transfer as soon as practicable after the date of enactment of this subtitle. “SEC. 381O. RURAL VENTURE CAPITAL DEMONSTRATION PROGRAM. “(a) In General.— The Secretary may designate for each fiscal year up to 10 community development venture capital organizations to demonstrate the utility of guarantees to attract increased private investment in rural private business enterprises. “(b) Rural Business Investment Pool.— “(1) Establishment.— To be eligible to participate in the demonstration program, an organization referred to in subsection (a) shall establish a rural business private investment pool (referred to in this subsection as a ‘pool’) for the purpose of making equity investments in rural private business enterprises. “(2) Guarantee.— From amounts in the national reserve account of the Trust Fund, the Secretary shall guarantee the funds in a pool against loss, except that the guarantee shall not exceed an amount equal to 30 percent of the total funds in the pool. “(3) Amount.— The Secretary shall issue guarantees covering not more than $15,000,000 of contingent liabilities for each of fiscal years 1996 through 2002. “(4) Term.— The term of a guarantee provided under this subsection shall not exceed 10 years. “(5) Submission of plan.— To be eligible to participate in the demonstration program, an organization referred to in subsection (a) shall submit a plan that describes— “(A) potential sources and uses of the pool to be established by the organization; “(B) the utility of the guarantee authority in attracting capital for the pool; and “(C) on selection, mechanisms for notifying State, local, and private nonprofit business development organizations and businesses of the existence of the pool. “(6) Competition.— “(A) In general.— The Secretary shall conduct a competition for the designation and establishment of pools. “(B) Priority.— In conducting the competition, the Secretary shall give priority to organizations that— “(i) have a demonstrated record of performance, or have a board and executive director with experience, in venture capital, small business equity investment, or community development finance; “(ii) propose to serve low-income communities; “(iii) propose to maintain an average investment of not more than $500,000 from the pool of the organization; “(iv) invest funds statewide or in a multicounty region; and “(v) propose to target job opportunities resulting from the investments primarily to economically dis-advantaged individuals, as determined by the Secretary. “(C) Geographic diversity.— To the extent practicable, the Secretary shall designate organizations in diverse geographic areas.”. SEC. 762. SIMPLIFIED, UNIFORM APPLICATION FOR ASSISTANCE FROM ALL FEDERAL RURAL DEVELOPMENT PROGRAMS. Not later than 1 year after the date of enactment of this Act, the Secretary of Agriculture shall develop a streamlined, simplified, and uniform application which shall be used in applying for assistance under all of the following: (1) Sections 304(b), 306, 306A, 306C, 306D, 310B, and 375 and subtitle E of the Consolidated Farm and Rural Development Act (7 U.S.C. 1924(b), 1926, 1926a, 1926c, 1926d, and 1932). (2) Subtitle G of title XVI and sections 2281, 2333, and 2381 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5901–5908, 5177a, 950aaa-2, and 3125b). (3) Subtitle C of title IX of the Food, Agriculture, Conservation, and Trade Act Amendments of 1991 (Public Law 102–237: 7 U.S.C. 5930 note). (4) Section 1323(b) of the Food Security Act of 1985 (Public Law 99–198; 7 U.S.C. 1932 note). (5) Title V and section 603(c) of the Rural Development Act of 1972 (7 U.S.C. 2661–2669 and 2204a(c)). (6) Sections 5 and 311 and title IV of the Rural Electrification Act of 1936 (7 U.S.C. 905, 940a, and 941–950b). SEC. 763. COMMUNITY FACILITIES GRANT PROGRAM. Section 306(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1926(a)) (as amended by section 741(a)(5)) is amended by adding at the end the following: “(19) Community facilities grant program.— “(A) In general.— The Secretary may make grants, in a total amount not to exceed $10,000,000 for any fiscal year, to associations, units of general local government, nonprofit corporations, and federally recognized Indian tribes to provide the Federal share of the cost of developing specific essential community facilities in rural areas. “(B) Federal share.— “(i) In general.— Except as provided in clauses (ii) and (iii), the Secretary shall, by regulation, establish the amount of the Federal share of the cost of the facility under this paragraph. “(ii) Maximum amount.— The amount of a grant provided under this paragraph for a facility shall not exceed 75 percent of the cost of developing the facility, “(iii) Graduated scale.— The Secretary shall provide for a graduated scale for the amount of the Federal share provided under this paragraph, with higher Federal shares for facilities in communities that have lower community population and income levels, as determined by the Secretary.”. Subtitle C— Amendments to the Rural Electrification Act of 1936 SEC. 771. PURPOSES; INVESTIGATIONS AND REPORTS. Section 2 of the Rural Electrification Act of 1936 (7 U.S.C. 902) is amended— (1) by striking “Sec. 2. (a) The Secretary of Agriculture is” and inserting the following: “SEC. 2. GENERAL AUTHORITY OF THE SECRETARY OF AGRICULTURE. “(a) Loans.— The Secretary of Agriculture (referred to in this Act as the ‘Secretary’) is”; (2) in subsection (a)— (A) by striking “and the furnishing” the first place it appears and all that follows through “central station service”; and (B) by striking “systems; to make” and all that follows and inserting “systems.”; and (3) by striking subsection (b) and inserting the following: “(b) Investigations and Reports.— The Secretary may make, or cause to be made, studies, investigations, and reports regarding matters, including financial, technological, and regulatory matters, affecting the condition and progress of electric, telecommunications, and economic development in rural areas, and publish and disseminate information with respect to the matters.”. SEC. 772. AUTHORIZATION OF APPROPRIATIONS. (a) In General.— Section 3 of the Rural Electrification Act of 1936 (7 U.S.C. 903) is amended to read as follows: SEC. 3. AUTHORIZATION OF APPROPRIATIONS. “There are authorized to be appropriated such sums as are necessary to carry out this Act.”. (b) Conforming Amendments.— (1) Section 301(a) of the Rural Electrification Act of 1936 (7 U.S.C. 931(a)) is amended— (A) by striking “(a)” the first place the term appears; and (B) in paragraph (3), by striking “notwithstanding section 3(a) of title I,”. (2) Section 302(b)(2) of the Rural Electrification Act of 1936 (7 U.S.C. 932(b)(2)) is amended by striking “pursuant to section 3(a) of this Act”. (3) The last sentence of section 406(a) of the Rural Electrification Act of 1936 (7 U.S.C. 946(a)) is amended by striking “pursuant to section 3(a) of this Act”. SEC. 773. LOANS FOR ELECTRICAL PLANTS AND TRANSMISSION LINES. Section 4 of the Rural Electrification Act of 1936 (7 U.S.C. 904) is amended— (1) in the first sentence— (A) by striking “for the furnishing of” and all that follows through “central station service and”; and (B) by striking “the provisions of sections 3(d) and 3(e) but without regard to the 25 per centum limitation therein contained,” and inserting “section 3,”; (2) in the second sentence, by striking “: Provided further, That all” and all that follows through “loan: And provided further, That” and inserting “, except that”; and (3) in the third sentence, by striking “and section 5”. SEC. 774. LOANS FOR ELECTRICAL AND PLUMBING EQUIPMENT. (a) In General.— Section 5 of the Rural Electrification Act of 1936 (7 U.S.C. 905) is repealed. (b) Conforming Amendments.—Section 12(a) of the Rural Electrification Act of 1936 (7 U.S.C. 912(a)) is amended— (1) by striking “: Provided, however, That” and inserting “, except that,”; and (2) by striking “, and with respect to any loan made under section 5,” and all that follows through “section 3”. SEC. 775. TESTIMONY ON BUDGET REQUESTS. Section 6 of the Rural Electrification Act of 1936 (7 U.S.C. 906) is amended by striking the second sentence. SEC. 776. TRANSFER OF FUNCTIONS OF ADMINISTRATION CREATED BY EXECUTIVE ORDER. Section 8 of the Rural Electrification Act of 1936 (7 U.S.C. 908) is repealed. SEC. 777. ANNUAL REPORT. Section 10 of the Rural Electrification Act of 1936 (7 U.S.C. 910) is repealed. SEC. 778. PROHIBITION ON RESTRICTING WATER AND WASTE FACILITY SERVICES TO ELECTRIC CUSTOMERS. The Rural Electrification Act of 1936 is amended by inserting after section 16 (7 U.S.C. 916) the following: 7 USC 917. “SEC. 17. PROHIBITION ON RESTRICTING WATER AND WASTE FACILITY SERVICES TO ELECTRIC CUSTOMERS. “(a) Prohibition.— Assistance under any rural development program administered by the Secretary or any agency of the Department of Agriculture shall not be conditioned on any requirement that the recipient of the assistance accept or receive electric service from any particular utility, supplier, or cooperative. “(b) Ensuring Compliance.— The Secretary shall establish, by regulation, adequate safeguards to ensure that assistance under any rural development program is not subject to such a condition. The safeguards shall include periodic certifications and audits, and appropriate measures and sanctions against any person violating, or attempting to violate subsection (a). “(c) Definition of Rural Development Programs.— In this section, the term ‘rural development program’ means the following: “(1) Sections 304(b), 306, 306A, 306C, 306D, 310B, and 375 and subtitle E of the Consolidated Farm and Rural Development Act (7 U.S.C. 1924(b), 1926, 1926a, 1926c, 1926d, and 1932). “(2) Subtitle G of title XVI and sections 2281, 2333, and 2381 of the Food, Agriculture, Conservation, and Trade Act of 1990 (7 U.S.C. 5901–5908, 5177a, 950aaa-2, and 3125b). “(3) Subtitle C of title IX of the Food, Agriculture, Conservation, and Trade Act Amendments of 1991 (Public Law 102–237; 7 U.S.C. 5930 note). “(4) Section 1323(b) of the Food Security Act of 1985 (Public Law 99–198; 7 U.S.C. 1932 note). “(5) Title V and section 603(c) of the Rural Development Act of 1972 (7 U.S.C. 2661–2669 and 2204a(c)). “(6) Sections 5 and 311 and title IV of this Act (7 U.S.C. 905, 940a, and 941–950b). “(d) Regulations.— Not later than 60 days after the date of enactment of the Federal Agriculture Improvement and Reform Act of 1996, the Secretary shall issue final regulations to ensure compliance with subsection (a).”. SEC. 779. TELEPHONE LOAN TERMS AND CONDITIONS. Section 309 of the Rural Electrification Act of 1936 (7 U.S.C. 939) is amended— (1) in subsection (a), by striking “(a) In General.—”; and (2) by striking subsection (b). SEC. 780. PRIVATIZATION PROGRAM. Section 311 of the Rural Electrification Act of 1936 (7 U.S.C. 940a) is repealed. SEC. 781. RURAL BUSINESS INCUBATOR FUND. (a) In General.— Section 502 of the Rural Electrification Act of 1936 (7 U.S.C. 950aa-1) is repealed. (b) Conforming Amendments.— Section 501 of the Rural Electrification Act of 1936 (7 U.S.C. 950aa) is amended— (1) in paragraph (5), by inserting “and” at the end; (2) in paragraph (6), by striking “; and” at the end and inserting a period; and (3) by striking paragraph (7). Subtitle D— Miscellaneous Rural Development Provisions SEC. 791. INTEREST RATE FORMULA. (a) Bankhead-Jones Farm Tenant Act.— Section 32(e) of the Bankhead-Jones Farm Tenant Act (7 U.S.C. 1011) is amended by striking the fifth sentence and inserting the following: “A loan under this subsection shall be made under a contract that provides, under such terms and conditions as the Secretary considers appropriate, for the repayment of the loan in not more than 30 years, with interest at a rate not to exceed the current market yield for outstanding municipal obligations with remaining periods to maturity comparable to the average maturity for the loan, adjusted to the nearest ⅛ of 1 percent”. (b) Watershed Protection and Flood Prevention Act.— Section 8 of the Watershed Protection and Flood Prevention Act (16 U.S.C. 1006a) is amended by striking the second sentence and inserting the following: “A loan or advance under this section shall be made under a contract or agreement that provides, under such terms and conditions as the Secretary considers appropriate, for the repayment of the loan or advance in not more than 50 years from the date when the principal benefits of the works of improvement first become available, with interest at a rate not to exceed the current market yield for outstanding municipal obliga-tions with remaining periods to maturity comparable to the average maturity for the loan, adjusted to the nearest Vs of 1 percent.”. SEC. 792. GRANTS FOR FINANCIALLY STRESSED FARMERS, DISLOCATED FARMERS, AND RURAL FAMILIES. (a) In General.— Section 502 of the Rural Development Act of 1972 (7 U.S.C. 2662) is amended by striking subsection (f). (b) Conforming Amendments.— (1) Section 2389 of the Food, Agriculture, Conservation, and Trade Act of 1990 (Public Law 101–624; 7 U.S.C. 2662 note) is amended by striking subsection (d). (2) Section 503(c) of the Rural Development Act of 1972 (7 U.S.C. 2663(c)) is amended— (A) in paragraph (1)— (i) by striking “(1)”; (ii) by striking “section 502(e)” and all that follows through “shall be distributed” and inserting “subsections (e), (h), and (i) of section 502 shall be distributed”; and (iii) by striking “objectives of” and all that follows through “title” and inserting “objectives of subsections (e), (h), and (i) of section 502”; and (B) by striking paragraph (2). SEC. 793. FUND FOR RURAL AMERICA. (a) In General.— There is established in the Treasury of the United States an account to be known as the Fund for Rural America (referred to in this section as the “Account”) to provide funds for activities described in subsection (c). (b) Funding.— (1) In general.— On January 1, 1997, October 1, 1998, and October 1, 1999, out of any funds in the Treasury not otherwise appropriated, the Secretary of the Treasury shall transfer $100,000,000 to the Account. (2) Entitlement.— The Secretary of Agriculture (referred to in this section as the “Secretary”)— (A) shall be entitled to receive the funds transferred to the Account under paragraph (1); (B) shall accept the funds; and (C) shall use the funds to carry out this section. (3) Purposes.— Subject to subsection (d), of the amounts transferred to the Account for a fiscal year, the Secretary shall make available— (A) for activities described in subsection (c)(1), not less than ⅓ and not more than ⅔ of the funds in the Account; and (B) for activities described in subsection (c)(2), all funds in the Account not made available by the Secretary for activities described in subsection (c)(1). (c) Activities.— (1) Rural development.— (A) In general.— The Secretary may use the funds in the Account for a rural development activity— (i) authorized under the Housing Act of 1949 for— (I) direct loans to low-income borrowers under section 502 (42 U.S.C. 1472); (II) loans for financial assistance for housing for domestic farm laborers under section 514 (42 U.S.C. 1484); (III) financial assistance for housing for domestic farm laborers under section 516 (42 U.S.C. 1486); (IV) payments for elderly who are not now receiving rental assistance under section 521 (42 U.S.C. 1490a); (V) grants and contracts for mutual and self-help housing under section 523(b)(1)(A) (42 U.S.C. 1490c(b)(1)(A)); or (VI) grants for rural housing preservation under section 533 (42 U.S.C. 1490m); or (ii) conducted under any rural development program, including a program authorized under— (I) the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq.); (II) subtitle G of title XVI and title XXIII of the Food, Agriculture, Conservation, and Trade Act of 1990; (III) title V of the Rural Development Act of 1971 (7 U.S.C. 2661 et seq.); or (IV) section 1323(b) of the Food Security Act of 1985 (Public Law 99–198; 7 U.S.C. 1932 note). (B) Limitation on programs funded.— The Secretary may not expend funds made available to carry out activities described in subparagraph (A) for any activity that did not receive appropriations for fiscal year 1995. Funds expended under this section for any program purpose shall be spent in accordance with and subject to the applicable program limitations, restrictions, and priorities found in the underlying program authority and this Act. (C) Limitation on housing assistance.— Not more than 20 percent of the funds made available to carry out activities described in subparagraph (A) shall be made available to carry out activities described in subparagraph (A)(i). (D) Disclosure of allocation.— For any fiscal year, the Secretary shall not disclose the allocation of funds under this section for any activity described in subparagraph (A) until the date that is 1 day after the date of enactment of legislation authorizing appropriations for the Department of Agriculture for any period in the fiscal year. (2) Research.— (A) In general.— The Secretary may use the funds in the Account for research, extension, and education grants to— (i) increase international competitiveness, efficiency, and farm profitability; (ii) reduce economic and health risks; (iii) conserve and enhance natural resources; (iv) develop new crops, new crop uses, and new agricultural applications of biotechnology; (v) enhance animal agricultural resources; (vi) preserve plant and animal germplasm; (vii) increase economic opportunities in farming and rural communities; and (viii) expand locally-owned value-added processing. (B) Eligible grantee.— The Secretary may make a grant under this paragraph to— (i) a Federal research agency; (ii) a national laboratory; (iii) a college or university or a research foundation maintained by a college or university; or (iv) a private research organization with an established and demonstrated capacity to perform research or technology transfer. (C) Use of grant.— (i) In general.— A grant made under this paragraph may be used by a grantee for 1 or more of the following uses: (I) Outcome-oriented research at the discovery end of the spectrum to provide breakthrough results. (II) Exploratory and advanced development and technology with well-identified outcomes. (III) A national, regional, or multi-State program oriented primarily toward extension programs and education programs demonstrating and supporting the competitiveness of United States agriculture. (ii) Smaller institutions.— Of the amounts made available for activities described in this paragraph, not less than 15 percent shall be awarded to colleges, universities, or research foundations eligible for a grant under subparagraph (B)(iii) that rank in the lowest ⅓ of such colleges, universities, and foundations on the basis of Federal research funds received under a provision of law other than this section. (D) Administration.— (i) Priority.— In administering this paragraph, the Secretary shall— (I) establish criteria for allocating grants based on the priorities in subparagraph (A) and in consultation with the National Agricultural Research, Extension, Education, and Economics Advisory Board established under section 1408 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3123); (II) seek and accept proposals for grants; (III) determine the relevance and merit of proposals through a system of peer review and review by the National Agricultural Research, Extension, Education, and Economics Advisory Board; and (IV) award grants on the basis of merit, quality, and relevance to advancing the purposes of federally supported agricultural research, extension, and education provided in section 1402 of the National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7 U.S.C. 3101). (ii) Competitive basis.— A grant under this para graph shall be awarded on a competitive basis. (iii) Terms.— A grant under this paragraph shall have a term that does not exceed 5 years. (iv) Matching funds.— As a condition of making a grant under this paragraph, the Secretary shall require the funding of the grant with equal matching funds from a non-Federal source if the grant is— (I) for applied research that is commodity-specific; and (II) not of national scope. (v) Delegation.— The Secretary shall administer this section through the Cooperative State Research, Education, and Extension Service of the Department of Agriculture. (vi) Availability of funds.— Funds shall be avail able for obligation under this paragraph for a 2-year period. (vii) Administrative costs.— The Secretary may use not more than 4 percent of the funds made available for activities described in this paragraph for administrative costs incurred by the Secretary in carrying out this paragraph. (viii) Buildings.— Funds made available for activities described in this paragraph shall not be used for the construction of a new building or the acquisition, expansion, remodeling, or alteration of an existing building (including site grading and improvement and architect fees). (d) Limitations.— Amounts in the Account may not be used for an activity described in subsection (c) for a fiscal year if the program funding level for the fiscal year for the activity is less than 90 percent of the amount appropriated for the activity for fiscal year 1996, adjusted for inflation. SEC. 794. UNDER SECRETARY OF AGRICULTURE FOR RURAL ECONOMIC AND COMMUNITY DEVELOPMENT RENAMED THE UNDER SECRETARY OF AGRICULTURE FOR RURAL DEVELOPMENT. (a) In General.— Section 231 of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6941) is amended— (1) in the section heading, by striking “economic and community”; and (2) by striking “Economic and Community” each place such term appears in subsections (a), (b), and (c). (b) Conforming Amendment.— Section 5314 of title 5, United States Code, is amended by striking “Economic and Community”.

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