42 U.S.C. § 291j — Loans

submitted 82 years ago by Pub. L. 88-443 to r/title-42-THE-PUBLIC-HEALTH-AND-WELFARE · 563 words · no verdicts yet

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Besides grants, the Surgeon General can make direct construction loans to qualifying applicants. Loan amounts are capped, interest is tied to Treasury rates, loans last up to 40 years, and the loan comes due immediately if the facility is later sold or misused improperly.

(a) Authorization: To further help states, the Surgeon General may lend money to an applicant for a construction or modernization project — as long as the project meets all the same conditions that would apply to a grant under this part. (b) Approval and payment: Except as this section says otherwise, a loan application goes through the same approval process, limits, and conditions as a grant application would. It can only be approved if that year's allotment for that type of project has enough money left. All loans are paid directly to the applicant. (c) Terms: (1) A loan can't exceed the federal share of the project's estimated cost, and if both a loan and a grant are given for the same project, together they still can't exceed that federal share. The interest rate equals the current average yield on outstanding U.S. government securities (as of the last day of the month before the loan is approved), plus one-quarter of one percent, rounded to the nearest eighth of a percent. Loans must be fully repaid within 40 years, though the applicant can pay some or all of it off early at any time. Beyond that, the applicant and the Surgeon General agree on the other repayment terms and conditions. (2) The Surgeon General can later change a loan's terms if that's necessary to protect the government's financial interest. (3) If, before the loan is fully repaid, the facility is improperly sold or stops being used as required (the situations covered in section 291i), the entire unpaid loan balance becomes due immediately — and whoever the facility was transferred to also becomes responsible for repaying it. (d) Source of funds: Loans come from the same allotment that would otherwise fund a grant for that project. Interest and principal payments received on loans go into the U.S. Treasury as miscellaneous receipts.

the actual law source: uscode.house.gov ↗public domain

(a) Authorization; conditions

In order further to assist the States in carrying out the purposes of this subchapter, the Surgeon General is authorized to make a loan of funds to the applicant for any project for construction or modernization which meets all of the conditions specified for a grant under this part.

(b) Approval; payments to applicants

Except as provided in this section, an application for a loan with respect to any project under this part shall be submitted, and shall be approved by the Surgeon General, in accordance with the same procedures and subject to the same limitations and conditions as would be applicable to the making of a grant under this part for such project. Any such application may be approved in any fiscal year only if sufficient funds are available from the allotment for the type of project involved. All loans under this section shall be paid directly to the applicant.

(1)

The amount of a loan under this part shall not exceed an amount equal to the Federal share of the estimated cost of construction or modernization under the project. Where a loan and a grant are made under this part with respect to the same project, the aggregate amount of such loan and such grant shall not exceed an amount equal to the Federal share of the estimated cost of construction or modernization under the project. Each loan shall bear interest at the rate arrived at by adding one-quarter of 1 per centum per annum to the rate which the Secretary of the Treasury determines to be equal to the current average yield on all outstanding marketable obligations of the United States as of the last day of the month preceding the date the application for the loan is approved and by adjusting the result so obtained to the nearest one-eighth of 1 per centum. Each loan made under this part shall mature not more than forty years after the date on which such loan is made, except that nothing in this part shall prohibit the payment of all or part of the loan at any time prior to the maturity date. In addition to the terms and conditions provided for, each loan under this part shall be made subject to such terms, conditions, and covenants relating to repayment of principal, payment of interest, and other matters as may be agreed upon by the applicant and the Surgeon General.

(2)

The Surgeon General may enter into agreements modifying any of the terms and conditions of a loan made under this part whenever he determines such action is necessary to protect the financial interest of the United States.

(3)

If, at any time before a loan for a project has been repaid in full, any of the events specified in clause (a) or clause (b) of section 291i 1 of this title occurs with respect to such project, the unpaid balance of the loan shall become immediately due and payable by the applicant, and any transferee of the facility shall be liable to the United States for such repayment.

(d) Funds; miscellaneous receipts

Any loan under this part shall be made out of the allotment from which a grant for the project concerned would be made. Payments of interest and repayments of principal on loans under this part shall be deposited in the Treasury as miscellaneous receipts.

Source credit: (July 1, 1944, ch. 373, title VI, § 610, as added Pub. L. 88–443, § 3(a), Aug. 18, 1964, 78 Stat. 457.)

history & why it existsrecord from the source credit

1944Enacted · Pub. L. 88-443 · 78 Stat. 457

A history note hasn’t been published yet. The record shows enactment by Pub. L. 88-443 on 1944-07-01.

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