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apart from records and accounts not related to that business concern; and

(ii) is independently or cooperatively (not including borrowers under the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq.]) owned and operated as defined by the Board; or

(B) an individual who plans to organize and operate an entity of the type described

in subparagraph (A), that meets any additional requirements that are established by the Board to carry out the intent of sections 2007a to 2007e of this title. (5) Rural area

The term "rural area" means all territory of a State that is not within the outer boundary of any city or town having a population of 20,000 or more based on the latest decennial census of the United States, and any neighboring urbanized area as defined by the Board. (6) Rural Fund

The terms “Rural Fund” and “Fund" mean the Rural Business Investment Fund established under section 2007c(a) of this title. (7) Secretary

The term "Secretary" means the Secretary of Agriculture, unless otherwise specified in sections 2007a to 2007e of this title. (8) State

The term “State" means any State to which the Secretary has made sections 2007a to 2007e of this title applicable under section

2007(b)(1) of this title. (Pub. L. 101-624, title XXIII, § 2311, Nov. 28, 1990, 104 Stat. 3982; Pub. L. 102-237, title VII, $ 702(b), Dec. 13, 1991, 105 Stat. 1880.)

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8 2007a. Definitions

As used in sections 2007a to 2007e of this title: (1) Approved local business

The term “approved local business" means a local business that is approved to receive assistance from the revolving fund of an eligible entity as provided under the provisions of sections 2007a to 2007e of this title. (2) Eligible entity

The term “eligible entity" means an entity(A) that is

(i) a nonprofit private corporation or a public entity that is,

(I) the governing body of each public regional organization (such as the governing body of an economic development district) that is chartered or otherwise organized under State law for the purpose of promoting economic development;

(II) the agency of each State that is primarily responsible for rural economic development programs within the State;

(III) the governing body of a county or other political subdivision of a State;

(IV) the governing body of a town or township within a State; or

(V) an incorporated public organization or a nonprofit private community development corporation, similar nonprofit private organization, that is chartered or otherwise organized under State law for the purpose of promoting economic development; or

(ii) an Indian tribe (as defined in section 450b(e) of title 25), an Indian organization or entity chartered under the Act of June 18, 1934 (25 U.S.C. 461 et seq.), commonly known as the "Indian Reorganization Act", or any tribal organization (as defined in section 450b(l) of title 25); and (B) that,

(i) possesses the powers reasonably necessary to perform the functions and activities described in sections 2007a to 2007e of this title;

(ii) has a professional staff nd management ability (including adequate accounting, legal, and business servicing abilities or experience); and

(iii) meets any other requirements established by the Board to carry out sec

tions 2007a to 2007e of this title. (3) Investment Board

The terms "Investment Board" and “Board” mean the Rural Partnerships Investment Board established in section 2007b(a) of this title. (4) Local business The term "local business" means

(A) a business concern, located in a rural area, that

(i) is incorporated or otherwise organized under State law so that financial records and accounts are maintained regarding the business concern separate and

B

REFERENCES IN TEXT Act of June 18, 1934, referred to in par. (2)AXii), is act June 18, 1934, ch. 576, 48 Stat. 984, as amended, popularly known as the Indian Reorganization Act, which enacted sections 461, 462, 463, 464, 465, 466 to 470, 471, 472, 473, 474, 475, 476 to 478, and 479 of Title 25, Indians. For complete classification of this Act to the Code, see Short Title note set out under section 461 of Title 25 and Tables.

The Rural Electrification Act of 1936, referred to in par. (4)(A)(ii), is act May 20, 1936, ch. 432, 49 Stat. 1363, as amended, which is classified generally to chapter 31 ($ 901 et seq.) of this title. For complete classification of this Act to the Code, see section 901 of this title and Tables.

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CODIFICATION Section was enacted as part of the Rural Economic Development Act of 1990, and also as part of the Food, Agriculture, Conservation, and Trade Act of 1990, and not as part of the Consolidated Farm and Rural Development Act which comprises this chapter.

AMENDMENTS 1991–Par. (2XA)(ii). Pub. L. 102-237, $ 702(b)(1), substituted "section 450b(e) of title 25" for "section 450b(b) of title 25" and "section 450b(l) of title 25" for "the section 450b(c) of title 25".

Par. (4), Pub. L. 102-237, Š 702(6X2), substituted "sections 2007a to 2007e of this title" for "this Act" in concluding provisions.

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EFFECTIVE DATE OF 1991 AMENDMENT Amendment by Pub. L. 102-237 effective as if includ. ed in provision of Pub. L. 101-624 to which it relates, see section 1101(b)(7) of Pub. L. 102-237, set out as a note under section 1421 of this title.

EFFECTIVE DATE Section effective Oct. 1, 1991, see section 2007(d) of this title.

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 2007, 2007b, 2007c, 2007d, 2007e of this title.

(6) Compensation Members of the Board

(A) specified under subparagraphs (A), (B), and (C) of paragraph (1) shall receive reasonable allowances for necessary expenses of travel, lodging, and subsistence incurred in attending meetings and other activities of the Investment Board, as set forth in the bylaws issued by the Board of Directors, except that such level shall not exceed the maximum fixed by subchapter 1 2 of chapter 57 of title 5 for officers and employees of the United States; and

(B) appointed under subparagraph (D) of paragraph (1) shall receive compensation for the time devoted to meetings and other activities at a daily rate not to exceed the daily rate of compensation prescribed for level III of the Executive Schedule under section 5314 of title 5, and reasonable allowances for necessary expenses of travel, lodging, and subsistence incurred in attending meetings and other activities of the Investment Board, as set forth in the bylaws issued by the Board of Directors, except that such level shall not exceed the maximum fixed by subchapter 1 2 of chapter 57 of title 5 for officers and employees of the

United States. (7) Rules and records

The Board shall adopt such rules and procedures as it may consider appropriate for the transaction of the business of the Investment Board, and shall keep permanent and accurate records and minutes of its acts and proceedings.

8 2007b. Rural Partnerships Investment Board (a) Establishment

There is established a “Rural Partnerships Investment Board" to provide lines of credit to eligible entities to enable such entities to establish, maintain, or expand revolving funds that are used to make or guarantee loans, or to make capital investments in new or expanding local businesses in conjunction with loans or investments made by depository institutions (as defined in section 1813(c)(1) of title 12,1 State owned banks whose deposits are backed by the full faith and credit of the State, or community development credit unions chartered by the National Credit Union Administration under the Federal Credit Union Act (12 U.S.C. 1751 et seq.). (b) Board of Directors (1) In general

The Board of Directors of the Investment Board shall consist of

(A) the Administrator of the Rural Electrification Administration;

(B) the Administrator of the Rural Development Administration;

(C) the Administrator of the Extension Service of the Department of Agriculture; and (D) two members who shall be

(i) experienced in rural development and related matters;

(ii) appointed by the President with the advice and consent of the Senate; and

(iii) from different political parties. (2) Chairperson

The Chairperson of the Board shall be the Administrator of the Rural Development Administration. (3) Vacancies

Vacancies on the Board shall be filled in the same manner as the vacant position was previously filled. (4) Chief executive officer

A chief executive officer shall be selected by the Board and shall serve at the pleasure of the Board. (5) Quorum

A quorum shall consist of three members of the Board. All decisions made by the Board shall require an affirmative vote of a majority of the members.

(c) Powers of Investment Board

The Investment Board shall be a body corporate that shall have the power to

(1) operate under the direction of its Board;

(2) adopt, alter, and use a corporate seal, which shall be judicially noted;

(3) provide for one or more officers, employees, and agents, as may be necessary, define their duties, and require surety bonds or make other provisions against losses occasioned by acts of such persons;

(4) hire, promote, compensate, and discharge officers and employees of the Investment Board, without regard to title 5, except that no such officer or employee shall receive an annual rate of basic pay in excess of the rate prescribed for level III of the Executive Schedule under section 5314 of title 5;

(5) prescribe by its Board its bylaws, that shall be consistent with law, and that shall provide for the manner in which

(A) its officers, employees, and agents are to be selected;

(B) its property is to be acquired, held, and transferred;

(C) its general operations are to be conducted; and

(D) the privileges granted by law are to be exercised and enjoyed;

So in original. A closing parenthesis probably should precede the comma.

* So in original. Probably should be subchapter "I".

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(6) with the consent of any executive department or independent agency, use the information, services, staff, and facilities of such in carrying out sections 2007a to 2007e of this title;

(7) enter into contracts and make advance, progress, or other payments with respect to such contracts;

(8) sue and be sued in its corporate name, and complain and defend in courts of competent jurisdiction;

(9) acquire, hold, lease, mortgage, or dispose of, at public or private sale, real and personal property, and otherwise exercise all the usual incidents of ownership of property necessary and convenient to its operations;

(10) modify or consent to the modification of any contract or agreement to which it is a party or in which it has an interest under sections 2007a to 2007e of this title;

(11) make such rules and regulations as the Board determines necessary and appropriate to carry out the authority vested in the Board under sections 2007a to 2007e of this title;

(12) procure the temporary (not in excess of 2 years) or intermittent services of experts or consultants or organizations thereof, without regard to the civil service and classification laws and without regard to section 5 of title 41, at rates not to exceed the daily equivalent of the highest rate payable under section 5332 of title 5, including traveltime, and while such individual is away from the home or reg. ular place of business of such individual, travel expenses as authorized under section 5703 of title 5; and

(13) exercise other powers as set forth in sections 2007a to 2007e of this title, and such other incidental powers as are necessary to carry out its powers, duties, and functions in accordance with sections 2007a to 2007e of

this title. (Pub. L. 101-624, title XXIII, § 2312, Nov. 28, 1990, 104 Stat. 3984.)

REFERENCES IN TEXT The Federal Credit Union Act, referred to in subsec. (a), is act June 26, 1934, ch. 750, 48 Stat. 1216, as amended, which is classified generally to chapter 14 ($ 1751 et seq.) of Title 12, Banks and Banking. For complete classification of this Act to the Code, see section 1751 of Title 12 and Tables.

The civil service laws, referred to in subsec. (c)(12), are set forth in Title 5, Government Organization and Employees. See, particularly, section 3301 et seq. of Title 5.

The classification laws, referred to in subsec. (c)(12), are classified to chapter 51 (5101 et seq.) and subchapter III ($ 5331 et seq.) of chapter 53 of Title 5.

CODIFICATION Section was enacted as part of the Rural Economic Development Act of 1990, and also as part of the Food, Agriculture, Conservation, and Trade Act of 1990, and not as part of the Consolidated Farm and Rural Development Act which comprises this chapter.

EFFECTIVE DATE Section effective Oct. 1, 1991, see section 2007(d) of this title.

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 2007, 2007a, 2007c, 2007d, 2007e of this title.

(b) Use
(1) Lines of credit

Amounts in the Rural Business Investment Fund shall be used by the Board to provide lines of credit in amounts determined appropriate by the Board, but in no event shall any such line of credit exceed $750,000 annually (up to a total amount of $2,250,000) to an approved eligible entity. Each line of credit shall be made available over a period of time established by the Board for each such entity, but in no event shall any such period of time extend beyond the date on which the Investment Board is terminated under section 2007d(n) of this title. (2) Exception

Notwithstanding paragraph (1), if the approved eligible entity is the agency of any State that is primarily responsible for the rural economic development programs within such State, the Board may provide a line of credit to such agency in an amount that shall not exceed $1,250,000 annually (up to a total amount of $3,750,000) in the manner described in paragraph (1). (3) Amounts drawn front line

Amounts drawn from each line of credit by each approved eligible entity shall be used solely as provided under sections 2007a to 2007e of this title and shall be drawn only as needed to provide loans, investments, or to

carry out a guarantee. (c) Applications of eligible entities for lines of credit (1) Federal Register notices

The Board shall publish notices of solicitations for applications for lines of credit in the Federal Register and such notices shall contain

(A) the application procedures established by the Board;

(B) the application requirements of paragraph (3);

(C) the deadlines for submission of applications (which shall be not less than 150 days after the publication of the applicable notice);

(D) a copy of all available response forms;

(E) a summary of the functions of the Board regarding applications; and

(F) other information determined appropriate by the Board. (2) Submission and consideration

An eligible entity that desires to receive a line of credit under sections 2007a to 2007e of this title shall submit an application to the Board at such time, in such form, and containing such information and documentation, including a description of the areas to be served, as the Board shall prescribe under paragraph (1), and the Board shall consider each such application based on the requirements of sections 2007a to 2007e of this title. (3) Eligible entity (A) Matching funds or letters of intent

In order for an application to be considered for approval by the Board for a line of credit, each eligible entity that submits an application shall

(i) certify in writing that the entity shall use such funds as part of a revolving fund to invest in, and make or guarantee loans to, local businesses in accordance with sections 2007a to 2007e of this title; and

(ii)(I) agree to provide matching funds (Federal funds shall not be used to satisfy such matching requirement) in amounts that are at least equal to the amount of the line of credit to be provided by the Board, that shall be in the form of

(aa) cash or cash equivalents; or

(bb) letters of credit in favor of the eligible entity issued or submitted by depository institutions (as defined in section 1813(c)(1) of title 12), insurance companies, similar Federally regulated financial institutions, State owned banks, local or State government or private philanthrophic' foundations, as determined appropriate and acceptable by the Board; or

(II) demonstrate, through procedures determined appropriate and acceptable by the Board, that depository institutions (as so defined) or community development credit unions described in section 2007b(a) of this title, are prepared to participate with the eligible entity in a loan, guarantee, or investment program for the benefit of local businesses, and that the total financial commitment demonstrated by the letters of intent or other documents is at least equal to the value of the line of credit for which the eligible entity is ap

plying. (B) Exception for certain eligible entities (i) Low per capita income areas

If the average per capita income level of the identified rural areas served by an eligible entity is less than 70 percent of the national average per capita income for the most recent year for which such information is available, such eligible entity shall only be required to match 50 percent

of the funds provided by the Board in the
same manner as described in subclause (I)
or (II) of subparagraph (A)(ii). A list of
the average per capita income and popula-
tion of each county in the United States
that contains rural areas, and the nation-
al average per capita income for such
year, shall be published in the Federal
Register and otherwise made available by
the Board to the public.
(ii) Indian tribal council participation
(I) In general

Community or tribal development cor-
porations operated by Federally recog-
nized tribal councils that desire to ad-
minister a local revolving fund may par-
ticipate in the program established
under sections 2007a to 2007e of this
title if such corporations meet the rules
and procedures established under sec-
tions 2007a to 2007e of this title that are
determined by the Board to be perti-
nent.
(II) Establishment of special rules and proce-

dures
(aa) In general

Not later than 220 days after No-
vember 28, 1990, the Board shall es-
tablish rules and procedures to enable
such community or tribal develop-
ment corporations serving rural areas
located on Federally recognized reser-
vations (including former reservations
in Oklahoma) to participate in the
program established under sections
2007a to 2007e of this title through
the operation of revolving funds used
for investing in, and making or guar-
anteeing loans to, new or expanding
local businesses.
(bb) Contents

Rules and procedures established under item (aa) shall be established to ensure that development corporations that receive Federal lines of credit under sections 2007a to 2007e of this title serve needy reservation areas, including areas that have low per capita income, high unemployment, high poverty rates, depressed or lagging local economies, and other factors de

termined appropriate by the Board. (III) Matching requirements

The requirements of subsection (c)(3) of this section and section 2007d(d) of this title concerning the provision of matching funds and the requirement of partnerships for loans, and any related matching requirements, shall not apply to the development corporations receiv

ing assistance under this clause. (4) Reapplication for lines of credit (A) In general

An eligible entity that has received a line of credit under this section may reapply in subsequent years for additional lines of

So in original. Probably should be "philanthropic".

credit if the Board makes a determination that

(i) the applicant has demonstrated that the funds previously allocated under such line of credit have been substantially obligated and that additional demand for lending, investment, or guaranteed fund. ing exists in the service area of the applicant;

(ii) the applicant will meet the matching requirements under subsection (c)(3) of this section; and

(iii) the applicant has administered the revolving fund consistent with sections 2007a to 2007e of this title and has the capacity to administer additional funds in

the same manner. (B) Priority

Eligible entities qualified to receive an initial line of credit or that will serve a service area not served by another entity shall receive priority over any applicant seeking a

second or subsequent line of credit. (5) Monitoring compliance

The Board shall establish procedures to monitor the compliance of each eligible entity participating in the program authorized by sections 2007a to 2007e of this title with the requirements of sections 2007a to 2007e of this title. (6) Eligible entity revolving fund requirement

To be eligible to receive a line of credit from the Rural Business Investment Fund, the applicant eligible entity shall

(A) demonstrate its ability or potential capacity to make sound business, lending, and investment decisions and to provide business counseling and technical assistance;

(B) demonstrate its ability to operate consistent with the requirements of sections 2007a to 2007e of this title and to increase the availability of credit in rural areas to promote the creation or expansion of viable businesses in rural areas;

(C) identify the proposed service area and define a strategy for serving that area that should describe such characteristics as simi. lar industrial, labor, or other markets, similar geographic or socioeconomic conditions, or other related considerations, and, to the extent that such area includes any towns or townships, make a commitment to serve such towns or townships in their entirety;

(D) provide an assurance that its service area will consist of

(i) all rural areas in a county if the median household income of the county is less than the Statewide nonmetropolitan median household income; or (ii) identified rural areas in a county if

(I) the median household income of the county is not less than the Statewide nonmetropolitan median household income; and

(II) the median household income of each rural city, town, or township to be served, and of each separate contiguous rural area to be served, is less than the Statewide nonmetropolitan median household income;

(iii) identified rural areas in a State in which the average per capita income is less than 70 percent of the nationwide per capita income; or

(iv) any county where the net migration population loss is at least 5 percent or greater from April 1, 1980, to July 1, 1987, as reported by the Census Bureau of the Department of Commerce; and

(E) provide a notification that an application has been filed with the Board to each county or other local unit of government having jurisdiction over some or all of the proposed service area under procedures de.

veloped by the Board. (7) Factors in approval of applications

In determining which applications to approve, and the maximum amount of funds to be offered in each line of credit, the Board shall grant a preference to eligible entities

(A) that have experience in serving local credit or equity needs and in making sound business and investment decisions, or that have the ability to serve such needs and make such decisions;

(B) whose boards of directors (or governing bodies if no such board exists) are composed of a cross-section of individuals (such as individuals with backgrounds in business, community development, or regional development, individuals who are State, local, or county government officials, or individuals involved in banking, financial, or other investment activities);

(C) that are likely to stimulate significant job creation or retention and new business creation or business expansion per dollar of funds provided under this section;

(D) that submit applications that demonstrate the ability and willingness to provide to local businesses continuing technical and management assistance, training, financial and business guidance, and planning;

(E) that demonstrate that the activities of the eligible entity are consistent with State, county, or local goals, whichever is applicable, regarding long-term economic growth and community development;

(F) that submit applications containing a comprehensive investment strategy, devel. oped in consultation with the applicable State, regional council or government, and county or other general purpose unit of local government; and (G) that propose to serve a service area

(i) whose unemployment or poverty rates exceed the Statewide nonmetropolitan average;

(ii) with special needs arising from actual or threatened severe unemployment arising from economic dislocation; or

(iii) that includes any county in which the net migration population loss is at least 5 percent or greater from April 1, 1980, to July 1, 1987, as reported by the Census Bureau of the Department of Commerce.

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