(10) In the case of sewers and waste disposal system, no Federal funds shall be advanced hereunder unless the appropriate State water pollution control agency shall certify that the effluent therefrom shall conform with appropriate State and Federal water pollution control standards when and where established.

(b) Curtailment or limitation of service prohibited. The service provided or made available through any such association shall not be curtailed or limited by inclusion of the area served by such association within the boundaries of any municipal corporation or other public body, or by the granting of any private franchise for similar service within such area during the term of such loan; nor shall the happening of any such event be the basis of requiring such association to secure any franchise, license, or permit as a condition to continuing to serve the area served by the association at the time of the occurrence of such event.

(c) Repealed. Pub. L. 91-606, title III, § 302(2), Dec. 31, 1970, 84 Stat. 1759.

(d) Carryover of unused authorizations for appropriations.

Any amounts appropriated under this section shall remain available until expended, and any amounts authorized for any fiscal year under this section but not appropriated may be appropriated for any succeeding fiscal year. (Pub. L. 87-128, title III, § 306, Aug. 8, 1961, 75 Stat. 308; Pub. L. 87-703, title IV, § 401(2), Sept. 27, 1962, 76 Stat, 632; Pub. L. 89-240; § 1, Oct. 7, 1965, 79 Stat. 931; Pub. L. 90-488, §§ 3-5, Aug. 15, 1968, 82 Stat. 770; Pub. L. 91-524, title VIII, § 806 (a), Nov. 30, 1970, 84 Stat. 1383; Pub. L. 91-606, title III, § 302(2), Dec. 31, 1970, 84 Stat. 1759; Pub. L. 91-617, § 1(a), Dec. 31, 1970, 84 Stat. 1855.)

REFERENCES IN TEXT

This chapter, referred to in subsec. (a) of this section, was in the original “this Act", meaning the Consolidated Farmers Home Administration Act of 1961. For classification of this Act, see Short Title note set out under section 1921 of this title.

The Act of August 28, 1937, as amended, referred to in subsec. (a) (5), refers to act Aug. 28, 1937, ch. 870, 50 Stat. 869, as amended, which was formerly classified to sections 590r to 590x-4 of Title 16, Conservation, was repealed by section 341(a) of Pub. L. 87-128, and is now covered by this chapter.

AMENDMENTS

1970 Subsec. (a) (1). Pub. L. 91-617 required inclusion in gross income of the interest or other income paid to an insured holder when any loan made for a purpose specified in subsec. (a) (1) is sold out of the Agricultural Credit Insurance Fund as an insured loan.

Subsec. (c). Pub. L. 91-606 repealed subsec. (c), added by Pub. L. 89-769, § 6(b), Nov. 6, 1966, 80 Stat. 1318, which related to loans to associations in areas suffering major disasters. See section 4401 et seq. of Title 42, The Public Health and Welfare.

Subsec. (d). Pub. L. 91-524 added subsec. (d).

1968 Subsec. (a). Pub. L. 90-488 substituted "$100,000,000" for "$50,000,000" in par. (2), "October 1, 1971" for "October 1, 1968" in par. (3), and "$15,000,000" for "$5,000,000" in par. (6), respectively.

1966 Subsec. (c). Pub. L. 89-769 added subsec. (c). 1965-Subsec. (a). Pub. L. 89-246 designated existing provisions as par. (1), struck out "including the development of recreational facilities" following "shifts in land use", substituted "drainage or waste disposal facilities" for "drainage facilities", inserted "and recreational developments", deleted provisions which prohib

ited loans which would cause an association's unpaid principal indebtedness to exceed $500,000, in the case of direct loans and $1,000,000 in the case of insured loans at any one time, and added pars. (2)—(10).

1962-Subsec. (a). Pub. L. 87-703 authorized loans to be made or insured to provide for the application or establishment of shifts in land use including the development of recreational facilities.

EFFECTIVE DATE OF 1970 AMENDMENT

Section 1(b) of Pub. L. 91-617 provided that: "The amendment made by subsection (a) [to subsec. (a)(1) of this section] shall apply to the insured loans sold out of the Agricultural Credit Insurance Fund after the date of the enactment of this Act [Dec. 31, 1970]."

EFFECTIVE DATE OF 1966 AMENDMENT

Amendment by Pub. L. 89-769 applicable with respect to any major disaster occurring after Oct. 3, 1964, see section 14 of Pub. L. 89-769, set out as a note under section 1855aa of Title 42, The Public Health and Welfare.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1927, 1983 of this title and in title 42 sections 1855dd, 3914.

§ 1927. Repayment period; interest rate; fees and charges; mortgages, liens and other security.

(a) The period for repayment of loans under this subchapter shall not exceed forty years. The Secretary shall from time to time establish the interest rate or rates at which loans for various purposes will be made or insured under this subchapter but not in excess of 5 per centum per annum. The borrower shall pay such fees and other charges as the Secretary may require.

(b) The Secretary shall take as security for the obligations entered into in connection with loans, mortgages on farms with respect to which such loans are made or such other security as the Secretary may require, and for obligations in connection with loans to associations under section 1926 of this title, shall take liens on the facility or such other security as he may determine to be necessary. Such security instruments shall constitute liens running to the United States notwithstanding the fact that the notes may be held by lenders other than the United States. (Pub. L. 87-128, title III, § 307, Aug. 8, 1961, 75 Stat. 308.)

§ 1928. Time limitation on insured loans; servicing and purchase of loans; computation of charges on principal unpaid balance of loan; full faith and credit of United States; incontestability.

Until October 1, 1971, loans under this subchapter may be insured by the Secretary whenever funds are advanced or a loan is purchased by a lender other than the United States. In connection with insurance of loans, the Secretary

(a) is authorized to make agreements with respect to the servicing of loans insured hereunder and to purchase such loans on such terms and conditions as he may prescribe; and

(b) may retain out of payments by the borrower a charge at a rate specified in the insurance agreement applicable to the loan.

Any contract of insurance executed by the Secretary under this subchapter shall be an obligation supported by the full faith and credit of the United States and incontestable except for fraud or misrepresentation of which the holder has actual knowledge. (Pub. L. 87-128, title III, § 308, Aug. 8,

1961, 75 Stat. 308; Pub. L. 87-798, Oct. 11, 1962, 76 Stat. 908; Pub. L. 89-240, § 2(a), Oct. 7, 1965, 79 Stat. 932; Pub. L. 90-488, § 6, Aug. 15, 1968, 82 Stat. 770.)

AMENDMENTS

1968-Pub. L. 90-488 authorized insurance of loans until Oct. 1, 1971, without the $450,000,000 limitation on aggregate amount in any one year.

1965-Pub. L. 89-240 substituted "$450,000,000" for "$200,000,000", "may retain" for "shall retain", and "specified in the insurance agreement applicable to the loan" for "determined by the Secretary from time to time equivalent to not less than one-half of 1 per centum per annum on the principal unpaid balance of the loan", and struck out "except that no agreement shall provide for purchase by the Secretary at a date sooner than three years from the date of the note" following "he may prescribe."

1962-Pub. L. 87-798 increased the aggregate amount of loans that may be insured in any one year from $150,000,000 to $200,000,000.

LOANS TO INDIANS

Authority of the Secretary of Agriculture to make loans to Indian tribes and tribal corporations to acquire land within reservations, see sections 488 to 492 of Title 25, Indians.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in title 42 section 1485.

§ 1929. Agricultural Credit Insurance Fund. (a) Revolving fund.

The fund established pursuant to section 11(a) of the Bankhead-Jones Farm Tenant Act, as amended, shall hereafter be called the Agricultural Credit Insurance Fund and is hereinafter in this subchapter referred to as the "fund". The fund shall remain available as a revolving fund for the discharge of the obligations of the Secretary under agreements insuring loans under this subchapter and loans and mortgages insured under prior authority.

(b) Deposits of funds; investments; purchase of notes.

Moneys in the fund not needed for current operations shall be deposited in the Treasury of the United States to the credit of the fund or invested in direct obligations of the United States or obligations guaranteed by the United States. The Secretary may purchase with money in the fund any notes issued by the Secretary to the Secretary of the Treasury for the purpose of obtaining money for the fund.

(c) Notes; form and denominations; maturities; terms and conditions; interest rate; purchase by Treasury; public debt transaction.

The Secretary is authorized to make and issue notes to the Secretary of the Treasury for the purpose of obtaining funds necessary for discharging obligations under this section and for authorized expenditures out of the fund. Such notes shall be in such form and denominations and have such maturities and be subject to such terms and conditions as may be prescribed by the Secretary with the approval of the Secretary of the Treasury. Such notes shall bear interest at a rate fixed by the Secretary of the Treasury, taking into consideration the current average market yield of outstanding marketable obligations of the United States having maturities comparable to the notes issued by the Secretary under this subchapter. The Secretary of

the Treasury is authorized and directed to purchase any notes of the Secretary issued hereunder, and, for that purpose, the Secretary of the Treasury is authorized to use as a public debt transaction the proceeds from the sale of any securities issued under the Second Liberty Bond Act, as amended, and the purposes for which such securities may be issued under such Act, as amended, are extended to include the purchase of notes issued by the Secretary. All redemptions, purchases, and sales by the Secretary of the Treasury of such notes shall be treated as public debt transactions of the United States.

(d) Notes and security as part of fund; collection or sale of notes; deposit of net proceeds in fund. Notes and security acquired by the Secretary in connection with loans insured under this subchapter and under prior authority shall become a part of the fund. Notes may be held in the fund and collected in accordance with their terms or may be sold by the Secretary with or without agreements for insurance thereof at the balance due thereon, or on such other basis as the Secretary may determine from time to time. All net proceeds from such collections, includes sales of notes or property, shall be deposited in and become a part of the fund. (e) Deposit in fund of portion of charge on outstanding principal obligations; availability of remainder of charge, and merger with appropriation, for administrative expenses.

The Secretary shall deposit in the fund all or a portion, not to exceed one-half of 1 per centum of the unpaid principal balance of the loan, of any charge collected in connection with the insurance of loans; and any remainder of any such charge shall be available for administrative expenses of the Farmers Home Administration, to be transferred annually and become merged with any appropriation for administrative expenses.

(f) Utilization of fund.

The Secretary may utilize the fund

(1) to make loans which could be insured under this subchapter whenever the Secretary has reasonable assurance that they can be sold without undue delay, and may sell and insure such loans. The aggregate of the principal of such loans made and not disposed of shall not exceed $100,000,000 at any one time;

(2) to pay the interest to which the holder of the note is entitled on loans heretofore or hereafter insured accruing between the date of any prepayments made by the borrower and the date of transmittal of any such prepayments to the lender. In the discretion of the Secretary, prepayments other than final payments need not be remitted to the holder until due;

(3) to pay to the holder of the notes any defaulted installment or, upon assignment of the note to the Secretary at the Secretary's request, the entire balance due on the loan;

(4) to purchase notes in accordance with agreements previously entered into; and

(5) to pay taxes, insurance, prior liens, expenses necessary to make fiscal adjustments in connection with the application and transmittal of col

lections and other expenses and advances authorized in section 1985 (a) of this title in connection with insured loans.

(Pub. L. 87-128, title III, § 309, Aug. 8, 1961, 75 Stat. 309; Pub. L. 87-703, title IV, § 401(3), Sept. 27, 1962, 76 Stat. 632; Pub. L. 89-240, § 2 (b), (c), Oct. 7, 1965, 79 Stat. 932; Pub. L. 89-633, Oct. 8, 1966, 80 Stat. 879; Pub. L. 90-488, § 7, Aug. 15, 1968, 82 Stat. 771.)

REFERENCES IN TEXT

Section 11(a) of the Bankhead-Jones Farm Tenant Act, as amended, referred to in subsec. (a), refers to section 11(a) of act July 22, 1937, ch. 517, title I, as added Aug. 14, 1946, ch. 964, § 5, 60 Stat. 1072, which was formerly classified to section 1005a of this title and was repealed by section 341(a) of Pub. L. 87-128.

The Second Liberty Bond Act, as amended, referred to in subsec. (c), is classified to sections 745, 752-754b, 757, 757b, 757c, 757d, 757e, 758, 760, 764-766, 769, 771, 773, and 774 of Title 31, Money and Finance.

AMENDMENTS

1968 Subsec. (f)(1). Pub. L. 90-488 increased from $50,000,000 to $100,000,000 the aggregate amount of loans to be sold and insured and undisposed of at any one time.

1966-Subsec. (f) (2).

Pub. L. 89-633 substituted "until due" for "until the due date of the annual installment." 1965-Subsec. (e). Pub. L. 89-240, § 2(b), substituted "all or a portion, not to exceed one-half of 1 per centum of the unpaid principal balance of the loan of any charge collected in connection with the insurance of loans; and any remainder of any such charge" for "such portion of the charge collected in connection with the insurance of loans at least equal to a rate of one-half of 1 per centum per annum on the outstanding principal obligations and the remainder of such charge."

Subsec. (f) (1). Pub. L. 89-240, § 2(c), substituted “$50,000,000" for "$25,000,000".

1962 Subsec. (f)(1). Pub. L. 87-703 increased from $10,000,000 to $25,000,000 the aggregate amount of loans to be sold and insured and undisposed of at any one time.

LOANS TO INDIANS

Authority of the Secretary of Agriculture to make loans to Indian tribes and tribal corporations to acquire land within reservations, see sections 488 to 492 of Title 25, Indians.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in title 42 section 1485.

§ 1930. Continued availability of appropriated funds for direct real estate loans to farmers and ranchers.

Funds appropriated for the purpose of making direct real estate loans to farmers and ranchers under this subchapter shall remain available until expended. (Pub. L. 87-128, title III, § 310, as added Pub. L. 91-524, title VIII, § 806(b), Nov. 30, 1970, 84 Stat. 1383.)

SUBCHAPTER II.-OPERATING LOANS

SUBCHAPTER REFERRED TO IN OTHER SECTIONS This subchapter is referred to in sections 1961, 1962, 1964, 1983 of this title.

§ 1941. Persons eligible for loans.

The Secretary is authorized to make loans under this subchapter to farmers and ranchers in the United States and in Puerto Rico and the Virgin Islands who (1) are citizens of the United States, (2) have a farm background and training or farming experience which the Secretary determines is sufficient to assure reasonable prospects of success in the proposed farming operation, (3) are or will

become operators of not larger than family farms, and (4) are unable to obtain sufficient credit elsewhere to finance their actual needs at reasonable rates and terms, taking into consideration prevailing private and cooperative rates and terms in the community in or near which the applicant resides for loans for similar purposes and periods of time. (Pub. L. 87-128, title III, § 311, Aug. 8, 1961, 75 Stat. 310.)

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in section 1942 of this title.

§ 1942. Purposes of loans.

Loans may be made under this subchapter for (1) paying costs incident to reorganizing the farming system for more profitable operation, (2) purchasing livestock, poultry, and farm equipment, (3) purchasing feed, seed, fertilizer, insecticides, and farm supplies and to meet other essential farm operating expenses including cash rent, (4) financing land and water development, use, and conservation, (5) without regard to the requirements of section 1941 (2) and (3) of this title, to individual farmers or ranchers to finance outdoor recreational enterprises or to convert to recreational uses their farming or ranching operations, including those heretofore financed under this chapter, (6) enterprises needed to supplement farm income, (7) refinancing existing indebtedness, (8) other farm and home needs including but not limited to family subsistence, and (9) for loan closing costs. (Pub. L. 87-128, title III, § 312, Aug. 8, 1961, 75 Stat. 310; Pub. L. 87-703, title IV, § 401 (4), Sept. 27, 1962, 76 Stat. 632; Pub. L. 90-488, § 8, Aug. 15, 1968, 82 Stat. 771.)

REFERENCES IN TEXT

In the original "this chapter" read "this title", meaning the Consolidated Farmers Home Administration Act of 1961, Title III of Pub. L. 87-128. For distribution of such Title in the Code, see Short Title note under section 1921 of this title.

AMENDMENTS

1968-Pub. L. 90-488 deleted from item (4) the concluding phrase, "including recreational uses and facilities", added items (5) and (6), and renumbered former items (5)-(7) as (7)-(9), respectively.

1962-Pub. L. 87-703 authorized, in item (4), loans to be made for recreational uses and facilities.

§ 1943. Limitations and prohibitions on loans.

The Secretary shall make no loan under this subchapter (1) which would cause the total principal indebtedness outstanding at any one time for loans made under this subchapter and under section 21 of the Bankhead-Jones Farm Tenant Act, as amended, to exceed $35,000, (2) for the purchasing or leasing of land other than for cash rent, or for carrying on any land leasing or land purchasing program, or (3) in excess of an amount certified by the county committee. (Pub. L. 87-128, title III, § 313, Aug. 8, 1961, 75 Stat. 310; Pub. L. 90-488, § 9, Aug. 15, 1968, 82 Stat. 771.)

REFERENCES IN TEXT

Section 21 of the Bankhead-Jones Farm Tenant Act, as amended, referred to in the text, refers to section 21 of act July 22, 1937, ch. 517, title II, 50 Stat. 524, as amended, which was formerly classified to section 1007 of this title and was repealed by section 341 (a) of Pub. L. 87-128.

Said Acts, referred to in the text, refers to this subchapter and section 21 of the Bankhead-Jones Farm Tenant Act, as amended.

AMENDMENTS

1968-Pub. L. 90-488 struck out from item (1) the proviso which limited the amount to be used for loans which would cause the indebtedness of any borrower to exceed $15,000 to 25 per centum of the sums made available for loans.

§ 1944. Soil conservation district loans; limitation; purchase of conservation equipment.

Loans aggregating not more than $500,000 in any one year may also be made to soil conservation districts which cannot obtain necessary credit elsewhere upon reasonable terms and conditions for the purchase of equipment customarily used for soil conservation purposes. (Pub. L. 87-128, title III, § 314, Aug. 8, 1961, 75 Stat. 311.)

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1983 of this title.

§ 1945. Participating loans.

The Secretary is authorized to participate in loans which could otherwise be made by the Secretary under this subchapter which are made by commercial banks, cooperative lending agencies, or other legally organized agricultural lending agencies up to 80 per centum of the amount of the loan. (Pub. L. 87-128, title III, § 315, Aug. 8, 1961, 75 Stat. 311.)

§ 1946. Liability of borrower; interest rate; security; maturity; renewal.

The Secretary shall make all loans under this subchapter upon the full personal liability of the borrower and upon such security as the Secretary may prescribe. Such loans shall be payable in not more than seven years, but may be renewed for not more than five additional years. Loans made under this subchapter shall bear interest at a rate determined by the Secretary of the Treasury taking into consideration the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of such loans, adjusted to the nearest one-eighth of 1 per centum, plus not to exceed 1 per centum per annum as determined by the Secretary. (Pub. L. 87-128, title III, § 316, Aug. 8, 1961, 75 Stat. 311; Pub. L. 90-488, § 10, Aug. 15, 1968, 82 Stat. 771.)

AMENDMENTS

1968-Pub. L. 90-488 substituted provisions for determination of interest rate by taking into consideration current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities of the loans, adjusted to the nearest one-eighth of 1 per centum, plus not to exceed 1 per centum per annum as determined by the Secretary, for former prohibition of an interest rate exceeding 5 per centum per annum.

SUBCHAPTER III.-EMERGENCY LOANS

§ 1961. Designation of emergency areas; persons eligible for loans.

(a) The Secretary may designate any area in the United States and in Puerto Rico and the Virgin Islands as an emergency area if he finds (1) that there exists in such area a general need for agricultural credit which cannot be met for temporary periods of time by private, cooperative, or other responsible sources (including loans the Secretary is authorized to make under subchapter II of this

chapter or to make or insure under subchapter I of this chapter or any other Act of Congress), at reasonable rates and terms for loans for similar purposes and periods of time, and (2) that the need for such credit in such area is the result of a natural disaster. (b) The Secretary is authorized to make loans in any such area (1) to established farmers, ranchers, or oyster planters who are citizens of the United States and (2) to private domestic corporations or partnerships engaged primarily in farming, ranching, or oyster planting provided they have experience and resources necessary to assure a reasonable prospect for successful operation with the assistance of such loan, and are unable to obtain sufficient credit elsewhere to finance their actual needs at reasonable rates and terms, taking into consideration prevailing private and cooperative rates and terms in the community in or near which the applicant resides for loans for similar purposes and periods of time. (Pub. L. 87-128, title III, § 321, Aug. 8, 1961, 75 Stat. 311; Pub. L. 87-832, Oct. 15, 1962, 76 Stat. 958.)

AMENDMENTS

1962 Subsec. (b). Pub. L. 87-832 authorized loans to established oyster planters and to private domestic corporations or partnerships engaged primarily in oyster planting.

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1965, 1983 of this title; title 15 section 636; title 42 section 4021. § 1962. Purpose of loans.

Loans may be made under this subchapter for any of the purposes authorized for loans under subchapter I or II of this chapter. (Pub. L. 87-128, title III, § 322, Aug. 8, 1961, 75 Stat. 311.)

§ 1963. Limitation of loans to amount certified by county committee.

The Secretary shall make no loan under this subchapter in excess of an amount certified by the county committee. (Pub. L. 87-128, title III, § 323, Aug. 8, 1961, 75 Stat. 311.)

§ 1964. Liability of borrower; interest rate; maturity; security.

The Secretary shall make all loans under this subchapter at a rate of interest not in excess of 3 per centum per annum repayable at such times as the Secretary may determine, taking into account the purpose of the loan and the nature and effect of the emergency, but not later than provided for loans for similar purposes under subchapters I and II of this chapter, and upon the full personal liability of the borrower and upon such security as the Secretary may prescribe. (Pub. L. 87-128, title III, § 324, Aug. 8, 1961, 75 Stat. 311.)

§ 1965. Persons suffering isolated production losses and indebted borrowers eligible for loans. The Secretary may make loans without regard to the designation of emergency areas under section 1961 (a) of this title to persons or corporations (1) who have suffered severe production losses not general to the area or (2) who are indebted to the Secretary for loans under the Act of April 6, 1949, as amended, or the Act of August 31, 1954, as

amended, to the extent necessary to permit the orderly repayment or liquidation of said prior indebtedness. (Pub. L. 87-128, title III, § 325, Aug. 8, 1961, 75 Stat. 311.)

REFERENCES IN TEXT

The Act of April 6, 1949, as amended, referred to in the text, refers to act Apr. 6, 1949, ch. 49, 63 Stat 43, as amended, which was formerly classified to sections 1148a1 to 1148a-3 of Title 12, Banks and Banking, was repealed by section 341 (a) of Pub. L. 87-128, and is now covered by this chapter.

The Act of August 31, 1954, as amended, referred to in the text, refers to act Aug. 31, 1954, ch. 1145, 68 Stat. 999, as amended, which was formerly classified as a note under section 1148a-1 of Title 12, Banks and Banking, was repealed by section 341 (a) of Pub. L. 87-128, and is now covered by this chapter.

§ 1966. Emergency Credit Revolving Fund utilization. The Secretary is authorized to utilize the revolving fund created by section 1148(a) of Title 12 (hereinafter in this subchapter referred to as the "Emergency Credit Revolving Fund") for carrying out the purposes of this subchapter. (Pub. L. 87-128, title III, § 326, Aug. 8, 1961, 75 Stat. 312.)

§ 1967. Emergency Credit Revolving Fund appropriations.

(a) All sums received by the Secretary from the liquidation of loans made under the provisions of this subchapter or under the Act of April 6, 1949, as amended, or the Act of August 31, 1954, and from the liquidation of any other assets acquired with money from the Emergency Credit Revolving Fund shall be added to and become a part of such fund.

(b) There are authorized to be appropriated to the Emergency Credit Revolving Fund such additional sums as the Congress shall from time to time determine to be necessary. (Pub. L. 87-128, title III, § 327, Aug. 8, 1961, 75 Stat. 312.)

REFERENCES IN TEXT

The Act of April 6, 1949, as amended, referred to in subsec. (a), refers to act Apr. 6, 1949, ch. 49, 63 Stat. 43, as amended, which was formerly classified to sections 1148a-1 to 1148a-3 of Title 12, Banks and Banking, was repealed by section 341 (a) of Pub. L. 87-128, and is now covered by this chapter.

The Act of August 31, 1954, referred to in subsec. (a), refers to act Aug. 31, 1954, ch. 1145, 68 Stat. 999, which was formerly classified as a note under section 1148a-1 of Title 12, Banks and Banking, was repealed by section 341(a) of Pub. L. 87-128, and is now covered by this chapter.

SUBCHAPTER IV.-ADMINISTRATIVE

PROVISIONS

§ 1981. Farmers Home Administration; appointment and compensation of Administrator; transfer of powers, duties and assets pertaining to agricultural credit; powers of Secretary of Agriculture. For the purposes of this chapter and for the administration of assets under the jurisdiction of the Secretary of Agriculture pursuant to the Farmers Home Administration Act of 1946, as amended, the Bankhead-Jones Farm Tenant Act, as amended, the Act of August 28, 1937, as amended, the Act of April 6, 1949, as amended, the Act of August 31, 1954, as amended, and the powers and duties of the Secretary under any other Act authorizing agricultural credit, the Secretary may assign and transfer such powers, duties, and assets to the Farmers Home 47-500 0-71-vol. 1- -71

Administration, to be headed by an Administrator, appointed by the President, by and with the advice and consent of the Senate, without regard to the civil service laws or chapter 51 and subchapter III of chapter 53 of Title 5, who shall receive basic compensation as provided by law for that office.

The Secretary may

(a) administer his powers and duties through such national, area, State, or local offices and employees in the United States and in Puerto Rico and the Virgin Islands as he determines to be necessary and may authorize an office to serve the area composed of two or more States if he determines that the volume of business in the area is not sufficient to justify separate State offices;

(b) accept and utilize voluntary and uncompensated services, and, with the consent of the agency concerned, utilize the officers, employees, equipment, and information of any agency of the Federal Government, or of any State, territory, or political subdivision;

(c) within the limits of appropriations made therefor, make necessary expenditures for purchase or hire of passenger vehicles, and such other facilities and services as he may from time to time find necessary for the proper administration of this Act;

(d) compromise, adjust, or reduce claims, and adjust anad modify the terms of mortgages, leases, contracts, and agreements entered into or administered by the Farmers Home Administration under any of its programs, as circumstances may require, but compromises, adjustments, or reductions of claims of $15,000 or more shall not be made without the approval of the Administrator: Provided, however, That

(1) compromise, adjustment, or reduction of claims shall be based on the value of the security and a determination by the Secretary of the debtor's reasonable ability to pay considering his other assets and income at the time of the action and with or without the payment of any consideration at the time of such adjustment or reduction;

(2) releases from personal liability may also be made with or without payment of any consideration at the time of adjustment of claims against

(A) borrowers who have transferred the security property to approved applicants under agreements assuming the outstanding secured indebtedness;

(B) borrowers who have transferred the security property to approved applicants under agreements assuming that portion of the secured indebtedness equal to the current market value of the security property or transferred the security property to the Secretary;

(C) borrowers who have transferred the security property to other than approved applicants under agreements assuming the full amount of, or that portion of the secured indebtedness equal to, the current market value of the security property on terms not to exceed five annual installments with interest