Page:United States Statutes at Large Volume 110 Part 2.djvu/875

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PUBLIC LAW 104-182—AUG. 6, 1996 110 STAT. 1667 "(f) TYPES OF ASSISTANCE.— Except as otherwise limited by State law, the amounts deposited into a State loan fund under this section may be used only— "(1) to make loans, on the condition that— "(A) the interest rate for each loan is less than or equal to the market interest rate, including an interest free loan; "(B) principal and interest payments on each loan will commence not later than 1 year after completion of the project for which the loan was made, and each loan will be fully amortized not later than 20 years after the completion of the project, except that in the case of a disadvantaged community (as defined in subsection (d)(3)), a State may provide an extended term for a loan, if the extended term— "(i) terminates not later than the date that is 30 years after the date of project completion; and "(ii) does not exceed the expected design life of the project; "(C) the recipient of each loan will establish a dedicated source of revenue (or, in the case of a privately owned system, demonstrate that there is adequate security) for the repa3rment of the loan; and "(D) the State loan fund will be credited with all pay- ments of principal and interest on each loan; "(2) to buy or refinance the debt obligation of a municipality or an intermunicipal or interstate agency within the State at an interest rate that is less than or equal to the market interest rate in any case in which a debt obligation is incurred after July 1, 1993; "(3) to guarantee, or purchase insurance for, a local obligation (all of the proceeds of which finance a project eligible for assistance under this section) if the guarantee or purchase would improve credit market access or reduce the interest rate applicable to the obligation; "(4) as a source of revenue or security for the payment of principal and interest on revenue or general obligation bonds issued by the State if the proceeds of the sale of the bonds will be deposited into the State loan fund; and "(5) to earn interest on the amounts deposited into the State loan fund. "(g) ADMINISTRATION OF STATE LOAN FUNDS.— " (1) COMBINED FINANCIAL ADMINISTRATION.— Notwithstanding subsection (c), a State may (as a convenience and to avoid unnecessary administrative costs) combine, in accordance with State law, the financial administration of a State loan fund established under this section with the financial administration of any other revolving fund established by the State if otherwise not prohibited by the law under which the State loan fund was established and if the Administrator determines that— "(A) the grants under this section, together with loan repayments and interest, will be separately accounted for and used solely for the purposes specified in subsection (a); and "(B) the authority to establish assistance priorities and carry out oversight and related activities (other than financial administration) with respect to assistance remains with