§940c–2. Rural development loans and grants

(a) In general

The Secretary shall provide grants or zero interest loans to borrowers under this chapter for the purpose of promoting rural economic development and job creation projects, including funding for project feasibility studies, start-up costs, incubator projects, and other reasonable expenses for the purpose of fostering rural development.

(b) Repayments

In the case of zero interest loans, the Secretary shall establish such reasonable repayment terms as will encourage borrower participation.

(c) Proceeds

All proceeds from the repayment of such loans made under this section shall be returned to the subaccount that the Secretary shall maintain in accordance with sections 940c(b)(2) and 940c–2(f) of this title.

(d) Number of grants

Loans and grants required under this section shall be made to the full extent of the amounts made available under subsection (e).

(e) Funding

(1) Discretionary funding

In addition to other funds that are available to carry out this section, there is authorized to be appropriated not more than $10,000,000 for each of fiscal years 2019 through 2023 to carry out this section, to remain available until expended.

(2) Mandatory funding

Of the funds of the Commodity Credit Corporation, the Secretary shall credit to the subaccount to use for the cost of grants and loans under this section $5,000,000 for each of fiscal years 2022 through 2024, to remain available until expended.

(3) Other funds

In addition to the funds described in paragraphs (1) and (2), the Secretary shall use, without fiscal year limitation, to provide grants and loans under this section-

(A) the interest differential sums credited to the subaccount described in subsection (c); and

(B) subject to section 940c–1(e)(2) of this title, the fees described in subsection (c)(4) of such section.

(f) Maintenance of account

The Secretary shall maintain the subaccount described in section 940c(b)(2) of this title, as in effect in fiscal year 2017, for purposes of carrying out this section.

(May 20, 1936, ch. 432, title III, §313B, as added Pub. L. 115–334, title VI, §6504(c), Dec. 20, 2018, 132 Stat. 4773 ; amended Pub. L. 118–22, div. B, title I, §102(d)(4), Nov. 17, 2023, 137 Stat. 116 .)

Editorial Notes

Amendments

2023-Subsec. (e)(2). Pub. L. 118–22 substituted "through 2024" for "and 2023".

Statutory Notes and Related Subsidiaries

Effective Date of 2023 Amendment

Amendment by Pub. L. 118–22 to be applied and administered as if enacted on Sept. 30, 2023, see section 102(g) of Pub. L. 118–22, set out in an Extension of Agricultural Programs note under section 9001 of this title.

Additional Funding for Fiscal Year 2024

Pub. L. 118–42, div. B, title VII, §780, Mar. 9, 2024, 138 Stat. 118 , provided that: "Section 313B(a) of the Rural Electrification Act of 1936 (7 U.S.C. 940c–2(a)), shall be applied for fiscal year 2024 and each fiscal year thereafter until the specified funding has been expended as if the following were inserted after the final period: 'In addition, the Secretary shall use $9,465,000 of the funds available to carry out this section in fiscal year 2024 for an additional amount for the same purpose and under the same terms and conditions as the Rural Business Development Grants authorized by section 310B of the Consolidated Farm and Rural Development Act (7 U.S.C. 1932(c)).'."

Implementation of Loan and Grant Program

Pub. L. 115–334, title VI, §6504(e), Dec. 20, 2018, 132 Stat. 4774 , provided that:

"(1) Subject to section 313B(e) of the Rural Electrification Act of 1936 (as added by this section) [7 U.S.C. 940c–2(e)], the Secretary of Agriculture shall carry out the loan and grant program required under such section in the same manner as the loan and grant program under section 313(b)(2) of such Act [7 U.S.C. 940c(b)(2)] is carried out on the day before the date of the enactment of this Act [Dec. 20, 2018], until such time as any regulations necessary to carry out the amendments made by this section [enacting this section and amending sections 912, 940c, and 940c–1 of this title] are fully implemented.

"(2) Paragraph (1) shall take effect on the date of the enactment of this Act."