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such annual contribution shall be equal to the amount of the annual payment which such balance would yield over such fixed period of years in an annuity computed at the going Federal rate of interest at the time such grant is made. The Authority shall embody the provisions for such annual contributions in a contract guaranteeing such fixed and uniform payments over such fixed period.

(c) No loans pursuant to this section shall be made or be outstanding for any low-rent-housing project in an amount greater than the development or acquisition cost of such project, less the total value (at the time when made) of any grant pursuant to subsection (b) of this section. Any such loan shall bear interest at such rate, be secured in such manner, and be repaid within such period, not exceeding sixty years, as may be deemed advisable by the Authority.

SEC. 10. The Authority may make loans to limited-profit housing agencies to assist the development or acquisition of low-rent-housing projects : Provided, That not more than $25,000,000 shall be so loaned in any one fiscal year. Any such loan shall not exceed 85 per centum of the development or acquisition cost of the project involved, shall bear interest at not less than the going Federal rate at the time such loan is made, and shall be secured in such manner, and be repaid within such period not exceeding sixty years, as may be deemed advisable by the Authority.

DEMONSTRATION PROJECTS

SEC. 11. (a) The Authority may develop and administer low-rent-housing and slum-clearance demonstration projects in order to demonstrate to localities the benefits to be derived therefrom. No such demonstration project shall be commenced in any locality without the advice and at the request of either the local governing body, a public housing agency, a public housing society representing families needing the project, or a local committee of representative and responsible citizens.

(b) As soon as practicable the Authority shall sell its demonstration projects: Provided, That low-rent-housing projects shall be sold only to public housing agencies.

(c) Pending sale, the Authority may lease any low-rent-housing demonstration project in whole or in part to a public housing agency or a public housing society, or enter into contracts for the administration of any such project in whole or in part by any such agency: Provided, That a project shall be leased to or administered by a public housing society only with the consent of a public housing agency in the locality if such an agency exists: And provided further, That the tenants of such project shall not be limited to the members of such society. The provisions of section 321 of the Act of June 30, 1932 (U. S. C., Supp. VIII, title 40, sec. 303 (b)), shall not apply to any such lease or contract.

(d) The Authority may dedicate land for parks, playgrounds, and other recreational facilities, for sewers, for the opening or widening of streets, for incidental improvements, or for any other public purpose, and may grant licenses and easements upon such terms as it deems reasonable.

(e) The Authority may sell' or exchange at public or private sale, or lease, any real property (except low-rent-housing projects, the disposition of which is governed elsewhere in this Act) or personal property, and sell or exchange any securities or obligations, the retention of which is not desirable in performing its functions under this Act, upon such terms as it may fix. To facilitate the Bale of such securities or obligations any other securities or obligations retained by the Authority may be subordinated to those sold.

(f) In connection with the development or administration of any low-renthousing or slum-clearance project pursuant to this section the Authority may acquire real or personal property or any interest therein by purchase, eminent domain, gift, devise, lease, or otherwise. In the acquisition of any land or site the provisions of section 355 of the Revised Statutes, as amended, shall not apply, but the Authority may avail itself of the services of the Attorney General acting in accord with his powers under such section to procure information relating to the state of title. The Attorney General shall, upon the application of the Authority, institute condemnation proceedings in its name. The practice and procedure governing such proceedings by the United States shall be followed, and the Authority shall likewise be entitled to proceed in accordance with the provisions of an Act of Congress approved February 26, 1931 (46 Stat. 1421), and an Act of Congress approved March 1, 1929 (45 Stat. 1415). The Authority may enter into agreements to reimburse any State or political subdivision thereof for expenses incurred in the acquisition, by condemnation or otherwise, of property to be conveyed to the Authority for the development of a low-rent-housing or slum-clearance project.

(g) The acquisition by the Authority of any real property pursuant to this Act shall not deprive any State or political subdivision thereof of its civil and criminal jurisdiction in and over such property, or impair the civil rights under the State or local law of the inhabitants on such property; and insofar as ans such jurisdiction may have been taken away or any such rights impaired by reason of any such acquisition (including the transfer of property to the Authority pursuant to section 4 (d)), such jurisdiction and such rights are hereby fully restored.

(h) The Authority may enter into agreements to pay annual sums in lieu of taxes to any State or political subdivision thereof with respect to any low-renthousing or slum-clearance owned by the Authority. The amount so paid for any year upon any such project shall not exceed the taxes that would be paid to the State or subdivision, as the case may be, upon such project if it were not exempt from taxation thereby.

SEC. 12. Subject to the specific limitations or standards in this Act governing the terms of sales, rentals, leases, loans, grants, annual contributions. or agreements, the Authority may, whenever it deems it necessary or desirable in the fulfillment of the purposes of this Act, consent to the modification, with respect to rate of interest, time of payment of any installment of principal or interest, security, amount of annual contribution, or any other term, of any contract or agreement of any kind to which the Authority is a party or which has been transferred to it pursuant to this Act. Any rule of law contrary to this provision shall be deemed inapplicable.

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STANDARDS

SEC. 13. In making any loan or grant for the development of a project pursuant to section 9, or any loan for the development of a project pursuant to section 10, and in undertaking any demonstration project pursuant to section 11, the Authority shall be guided by these considerations :

(1) In the case of a low-rent-housing project, that there exists in the community concerned a shortage of decent, safe, and sanitary dwellings within the financial reach of families of low income, which is not being remedied adequately by private enterprise :

(2) In the case of a slum-clearance project, that there exist in the community concerned slum areas that are not being remedied adequately by private enterprise, and that either (a) the clearance of the area will not make it difficult for the dispossessed inhabitants thereof to secure equivalent dwellings elsewhere at no higher cost to them, or (b)) that such inhabitants will be provided for by the development of sufficient low-rent housing, within their financial reach, either upon the site to be cleared or in some other suitable locality;

(3) That the project conforms to a general program formulated by the Authority to distribute the benefits of this Act as widely as practicable throughout the United States, consistently with the needs of the several States and their political subdivisions ;

(4) That the form of assistance to the project is an appropriate means of carrying out the purposes of this Act in the particular case, and that the amount of financial assistance to be afforded such project by the Authority will not be in excess of the amount necessary for such purposes ;

(5) That the site on which a project is or shall be developed is suitable for the project and has been or will be purchased for a reasonable price.

SEC. 14. In order to insure that the low-rent character of housing projects will be preserved, and thus to protect private industry from the competition that would exist, either if such projects were made available to families able to afford decent, safe, and sanitary dwellings without public assistance or if such projects were withdrawn from the financial reach of families of low income, it is hereby provided that

(1) When a loan or grant is made pursuant to section 9, and when a loan is made pursuant to section 10, the Authority shall retain the right (subject to any mortgage or ctlier lien of a third party) to take possession of, administer, and dispose of the low-lent-housing project involved in the event of a substantial breach of the covenant (which shall be embodied in the deed, mortgage, or other contract providing for such loan or grant) to maintain the low-rent

character of such housing project. Any such covenant shall run in the case of å grant for a period of sixty years, and in the case of a loan for a period equal to the maximum period allowed for the repayment in full of such loan: Prorided, That no such covenant shall continue to run after the acquisition of such project in a bona-fide foreclosure under a mortgage or other lien held by a third party if the Authority has received actual notice in writing of such foreclosure proceedings at least thir days before sale.

(2) When a loan is made pursuant to section 9 or section 10, the Authority shall retain the right, in the event of a substantial breach of the covenant (pursuant to paragraph 1 of this section) to maintain the low-rent character. of the housing project involved or in the event of the acquisition of such project by a third party in any manner including a bona fide foreclosure under a mortgage or other lien held by a third party, to increase the interest payable thereafter on said loan to a rate not in excess of the going Federal rate (at the time of such breach) plus 2 per centum per annum or to declare the unpaid principal on said loan due forthwith.

(3) When a grant or any part thereof shall be made payable in annual contributions pursuant to section 9 (b), the Authority shall retain the right, in the event of a substantial breach of the covenant (pursuant to paragraph 1 of this section) to maintain the low-rent character of the housing project involved, to reduce or terminate said annual contributions. In the event of the acquisition of such project by a third party in any manner including a bona-fide foreclosure under a mortgage or other lien held by a third party, such annual contributions shall terminate.

(4) When a lease or contract for the administration of a low-rent housing project is made pursuant to section 11 (c), the Authority shall retain the right to terminate such lease or contract in the event of a substantial breach of the covenant (which shall be embodied in such lease or contract) to maintain the low-rent character of such housing project.

(5) The Authority may also insert in any contract of loan or grant, contract of sale, lease, contract of administration, mortgage, or any other agreement or instrument made pursuant to this Act, such other covenants, conditions, or provisions as it may deem necessary in order to insure the low-rent character of the housing project involved.

SEC. 15. In order to protect the financial position of the Authority, and to prevent Federal assistance to any low-rent-housing project in excess of that contemplated by this Act

(1) The sale by the Authority of any low-rent-housing project shall be for a consideration, in whatever form may be satisfactory to the Authority, equal to at least 55 per centum of the development or acquisition cost of the project less such allowance for depreciation as the Authority shall fix. The amount by which such development or acquisition cost (less depreciation) exceeds the sales price shall be considered a grant pursuant to section 9 (b), and the project shall then become eligible for a loan pursuant to section 9 (c) and for annual contributions pursuant to section 9 (b).

(2) In the administration by the Authority of any low-rent-housing project, and in the leasing or administration under contract of any such project pursuant to section 11 (c), the Authority shall fix the rentals (which in the case of a lease pursuant to section 11 (c) means the rentals payable by the public housing agency or the public housing society to the Authority) at an amount at least sufficient to pay (a) all necessary and proper administrative expenses of the project (if administered by the Authority or administered under contract) ; (b) such sums as will suffice to repay, within a period not exceeding sixty years, at least 55 per centum of the development or acquisition cost of the project, together with interest at such rate as the Authority deems advisable.

SEC. 16. In order to protect labor standards

(1) The provisions of the Act of August 30, 1935, entitled "An Act to amend the Act approved March 3, 1931, relating to the rate of wages for laborers and mechanics employed by contractors and subcontractors on public buildings" (49 Stat. 1011), and of the Act of August 24, 1935, entitled "An Act requiring contracts for the construction, alteration, and repair of any public building or public work of the United States to be accompanied by a performance bond protecting the United States and by an additional bond for the protection of persons furnishing material and labor for the construction, alteration, and repair for the said public buildings and public works" (U. S. C., Supp., 1934 edition, title 40, sec. 270 (a) to (d), inclusive), shall apply to contracts in connection with the development or administration of low-rent-housing or slumclearance projects owned by the Authority and the furnishing of materials and labor for such projects: Provided, That suits shall be brought in the name of the Authority and that the Authority shall itself perform the duties prescribed by section 3 (a) of the Act of August 30, 1935, and section 3 of the Act of August 24, 1935.

(2) Any contract for a loan, grant, annual contribution, sale, lease, or ad. ministration with a housing agency shall contain a provision requiring that the wages prevailing in the locality, as determined by the Authority, shall be paid to all laborers and mechanics employed in the development or administration of the low-rent-housing or slum-clearance project involved.

(3) The Act entitled "An Act limiting the hours of daily services of laborers and mechanics employed upon work done for the United States, or for any Territory, or for the District of Columbia, and for other purposes”, as amended (37 Stat. 137), shall apply to contracts of the Authority for work in connection with the development and administration of low-rent-housing or slum-clearance demonstration projects.

(4) The benefits of the Act entitled "An Act to provide compensation for employees of the United States suffering injuries while in the porformance of their duties, and for other purposes” (39 Stat. 742), shall extend to officers and employees of the Authority.

(5) The provisions of sections 1 and 2 of the Act of June 13, 1934 (U. S. C., title 40, sec. 276 (b) and (c)), shall apply to any low-rent-housing or slumclearance project financed in whole or in part with funds made available pu:suant to this Act.

FINANCIAL PROVISIONS

SEC. 17. The Authority shall have a capital stock of $1,000,000, which shall be subscribed by the United States and paid by the Secretary of the Treasury out of any available funds. Receipt for such payment shall be issued to the Secretary of the Treasury by the Authority and shall evidence the stock ownership of the United States of America.

SEC. 18. There is hereby authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, the sum of $51,000,000 for the fiscal year ending June 30, 1937, of which $1,000,000 shall be available to pay the subscription to the capital stock of the Authority, and there is authorized to be appropriated the sum of $75,000,000 for the fiscal year ending June 30, 1938, and the sum of $100,000,000 for each of the fiscal years ending June 30, 1939 and 1940, respectively. All such sums, and all receipts and assets of the Authority, shall be available for the purposes of this Act until expended.

SEC. 19. Any funds available under any Act of Congress for allocation for low-rent housing or slum clearance may, in the discretion of the President, be allocated to the Authority for the purposes of this Act.

SEC. 20. (a) The Reconstruction Finance Corporation shall make advances to the Authority from time to time upon its request, but not to exceed, in the aggregate outstanding, the sum of $100,000,000, which shall bear interest at a rate not exceeding cost plus one-eighth of 1 per centum per annum and shall be repaid in full by the Authority to said Corporation or its successor within a period of sixty years from the time when made. Such advances shall be available for the purposes of this Act until expended. The Authority shall apply toward such repayment the net income from, and the proceeds of the sale of, assets transferred to it pursuant to section 4 (d) of this Act, but the Reconstruction Finance Corporation shall not have a lien upon, nor exercise any control over, the administration or disposition of such assets. The amount of notes, debentures, and bonds or other obligations which said corporation is authorized and empowered to have outstanding at any one time, pursuant to section 9 of the Reconstruction Finance Corporation Act, as amended, is hereby increased by the sum necessary for such purposes, not to exceed $100,000,000.

SEC. 21. (a) In addition to obligations incurred pursuant to section 20, the Authority is authorized to issue obligations, in the form of notes, bonds, or otherwise, which it may sell to obtain funds for the purposes of this Act. The Authority may issue such obligations in an amount not to exceed $100,000,000 on or after July 1, 1936, an additional amount not to exceed $150,000,000 on or after July 1, 1937, an additional amount not to exceed $150,000,000 on or after July 1, 1938, and an additional amount not to exceed $150,000,000 on or after July 1, 1939. Such obligations shall be in such forms and denominations, mature within such periods not exceeding sixty years from date of issue, bear such rates of interest not exceeding. 4 per centum per annum, be subject to such terms and conditions, and be issued in such manner and sold at such prices as may be prescribed by the Authority, with the approval of the Secretary of the Treasury.

(b) Such obligations shall be exempt, both as to principal and interest, from all taxation (except surtaxes, estate, inheritance, and gift taxes) now or hereafter imposed by the United States or by any State, county, municipality, or local taxing authority.

(c) Such obligations shall be fully and unconditionally guaranteed upon their face by the United States, as to the payment of both interest and principal, and in the event that the Authority shall be unable to make any such payment upon demand when due, payment shall be made to the holder by the Secretary of the Treasury with money hereby authorized to be appropriated for such purpose out of any money in the Treasury not otherwise appropriated. To the extent of such payment the Secretary of the Treasury shall succeed to all the rights of the holder.

(d) Such obligations shall be lawful investments, and may be accepted as security, for all fiduciary, trust, and public funds, the investment or deposit of which shall be under the authority or control of the United States or any officer or agency thereof. The Secretary of the Treasury is likewise authorized to purchase any such obligations, and for such purchases he may use as a public-debt transaction the proceeds from the sale of any securities hereafter issued under the second Liberty Bond Act, as amended, and the purposes for which securities may be issued under such Act, as amended, are extended to include any such purchases. The Secretary of the Treasury may at any time sell any of the obligations acquired by him pursuant to this section, and all redemptions, purchases, and sales by him of such obligations shall be treated as public-debt transactions of the United States.

(e) Such obligations may be marketed for the Authority at its request by the Secretary of the Treasury, utilizing all the facilities of the Treasury Department now authorized by law for the marketing of obligations of the United States.

Sec. 22. (a) Any money of the Authority not otherwise employed may be deposited, subject to check, with the Treasurer of the United States or in any Federal Reserve bank, or may be invested in obligations of the United States or used in the purchase or retirement or redemption of any obligations issued by the Authority.

(b) The Federal Reserve banks are authorized and directed to act as depositories, custodians, and fiscal agents for the Authority in the general exercise of its powers, and the Authority may reimburse any such bank for its services in such manner as may be agreed upon.

(c) The Authority may be employed as a financial agent of the Government. When designated by the Secretary of the Treasury, and subject to such regulations as he may prescribe, the Authority shall be a depository of public money, except receipts from customs.

PENALTIES

SEC. 23. All general penal statutes relating to the larceny, embezzlement, or conversion, or to the improper handling, retention, use, or disposal of public moneys or property of the United States, shall apply to the moneys and property of the Authority and to moneys and properties of the United States entrusted to the Authority.

SEC. 24. Any person who, with intent to defraud the Authority or to deceive any director, officer, or employee thereof or any officer or employee of the United States, makes any false entry in any book of the Authority or makes any false report or statement to or for the Authority, shall, upon conviction thereof, be find not more than $1,000 or imprisoned for not more than one year, or both.

SEC. 25. Any person who shall receive any compensation, rebate, or reward, or shall enter into any conspiracy, collusion, or agreement, express or implied, with intent to defraud the Authority or with intent unlawfully to defeat its purposes, shall, upon conviction thereof, be fined not more than $1,000 or imprisoned for not more than one year, or both.

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