Page:United States Statutes at Large Volume 84 Part 1.djvu/408

 350

PUBLIC LAW 91-296-JUNE 30, 1970

Right of recovery, waiver.

68A Stat. 3. 26 USC 1-1388. Sales p r o c e e d s, deposit and u s e.

Appropriation.

[84 STAT.

" (C) shall provide that, in the event of any default by the public agency to which such loan was made in payment of principal and interest due on such loan, the Secretary shall, upon notification to the purchaser (or to the successor in interest of such purchaser), have the option to close out such loan (and any obligations of the Secretary with respect thereto) by paying to the purchaser (or his successor in interest) the total amount of outstanding principal and interest due thereon at the time of such notification; and " (D) shall provide that, in the event such loan is closed out as provided in subparagraph (C), or in the event of any other loss incurred by the Secretary by reason of the failure of such public agency to make payments of principal and interest on such loan, the Secretary shall be subrogated to all rights of such purchaser for recovery of such loss from such public agency. " (d) The Secretary may, for good cause, waive any right of recovery which he has against a public agency by reason of the failure of such agency to make payments of principal and interest on a loan made to such agency under this part. " (e) After any loan to a public agency under this part has been sold and guaranteed, interest paid on such loan and any interest subsidy paid by the Secretary with respect to such loan which is received by the purchaser thereof (or his successor in interest) shall be included in gross income for the purposes of chapter 1 of the Internal Revenue Code of 1954. "(f) Amounts received by the Secretary as proceeds from the sale of loans under this section shall be deposited in the loan fund established by section 626, and shall be available to the Secretary for the making of further loans under this part in accordance with the provisions of subsection (a)(2) of such section. "(g) There is authorized to be appropriated to the Secretary, for deposit in the loan fund established by section 626, $30,000,000 to provide initial capital for the making of direct loans by the Secretary to public agencies for the modernization or construction of facilities referred to in subsection (a)(1)." AMENDMENT TO FEDERAL N A T I O N A L MORTGAGE ASSOCIATION CHARTER ACT

68 Stat. 6 1 3; 75 Stat. 176; 82 Stat. 537. 12 USC 1717. Ante,

p. 344.

SEC. 202. The first sentence of section 302(b) of the Federal National Mortgage Association Charter Act is amended by inserting after the first semicolon the following: "and to purchase, service, sell, or otherwise deal in any loans made to a public agency under part B of title VI of the Public Health Service Act;". TITLE III — G E A N T S FOR C O N S T R U C T I O N OR MODERNI Z A T I O N OF E M E R G E N C Y ROOMS O F GENERAL HOSPITALS SEC. 301. Title VI of the Public Health Service Act is further amended by adding after part B (added by section 201 of this Act) the following new part:

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