exceed $5,000,000 for the period July 1, 1976, through September 30, 1976, and not to exceed $20,000,000 for each of the five fiscal years during the period beginning October 1, 1976, and ending September 30, 1981.

(b) Such sums as the Congress shall appropriate to carry out the purposes of this title pursuant to subsection (a) shall be distributed by the Secretary as follows:

(1) 4 per centum to be used by the Secretary for Federal administration, national coordination, and program assistance to the States;

(2) 10 per centum to be allocated by the Secretary to States to finance work serving two or more States in which universities in two or more States cooperate or which is conducted by one university to serve two or more States;

(3) 20 per centum shall be allocated equally among the States; (4) 66 per centum shall be allocated to each State, as follows: One-half in an amount which bears the same ratio to the total amount to be allotted as the rural population of the States bears to the total rural population of all the States as determined by the last preceding decennial census current at the time each such additional sum is first appropriated; and one-half in an amount which bears the same ratio to the total amount to be allotted as the farm population of the State bears to the total farm population of all States as determined by the last preceding decennial census current at the time such additional sum is first appropriated.

(c) There are hereby authorized to be appropriated to carry out the purposes of subsections (c) and (d) of section 502 of this title not to exceed $20,000,000 for each of the fiscal years ending September 30, 1978, September 30, 1979, September 30, 1980, and September 30, 1981.

(d) Such sums as Congress shall appropriate to carry out the purposes of this title pursuant to subsection (c) of this section shall be distributed by the Secretary as follows:

(1) 4 per centum to be used by the Secretary for Federal administration;

(2) 19 per centum to be allocated among the several States to carry out the programs authorized in subsection (c) of section 502 of this title in such amounts as determined by the Secretary; and

(3) 77 per centum to be allocated among the several States to carry out the programs authorized in subsection (d) of section 502 of this title in such amounts as determined by the Secretary. (e) Funds appropriated under this title may be used to pay salaries and other expenses of personnel employed to carry out the functions authorized by this title to obtain necessary supplies, equipment, services, and rent, repair, and maintenance of other facilities needed, but may not be used to purchase or construct buildings.

(f) Payment of funds to any State for programs authorized under section 502 (a), (b), (c) and (d) shall be contingent upon the Secretary's approval of an annual plan and budget for programs conducted under each part and compliance with such regulations as the Secretary may issue under this title. In those States that contain more than

one institution or university accepting the benefits of the Morrill Act of 1862 or 1890 (or both), including Tuskegee Institute, such annual plan and budget shall be jointly developed by mutual agreement of the chief administrative officers of all such institutions or universities. Funds shall be available for use by the State in the fiscal year for which appropriated and the next fiscal year following the year for which appropriated. Funds shall be budgeted and accounted for on such forms and at such times as the Secretary shall prescribe.

(g) Funds provided to each State under this title may be used to finance programs through or at private and publicly supported colleges and universities other than the university responsible for administering the programs authorized by this title.

SEC. 504.5 COOPERATING COLLEGES AND UNIVERSITIES.-(a) Each of the programs authorized by this title shall be organized and conducted by one or more colleges or universities in each State so as to provide a coordinated program in each State.

(b) To assure national coordination with programs under the SmithLever Act of 1914 and the Hatch Act (as amended, August 11, 1955), administration of each State program shall be a responsibility of the institution or university accepting the benefits of the Morrill Act of 1862 (12 Stat. 503) as amended. Such administration shall be in association with the programs conducted under the Smith-Lever Act and the Hatch Act. The Secretary shall pay funds available to each State to said institution or university.

(c) All private and publicly supported colleges and universities in a State including the land-grant colleges of 1890 (26 Stat. 417) shall be eligible to conduct or participate in conducting programs authorized under this title. Officials at universities or colleges other than those responsible for administering programs authorized by this title who wish to participate in these programs shall submit program proposals to the university officials responsible for administering these programs and they shall be responsible for approval of said proposals.

(d) The university in each State responsible for administering the program authorized by this title shall designate an official who shall be responsible for programs authorized by each part of section 502 and an official who shall be responsible for the overall coordination of said programs.

(e) The chief administrative officer of the university in each State responsible for administering the program authorized by this title shall appoint a State Rural Development Advisory Council, consisting of not more than fifteen members. The administrative head of agriculture of that university shall serve as chairman. The administrative head of a principal school of engineering in the State shall be a member. There shall be at least ten additional members who shall include persons representing farmers, business, labor, banking, local government, multicounty planning and development districts, public and private colleges and Federal and State agencies involved in rural development.

It shall be the function of the Council to review and approve annual program plans conducted under this title and to advise the chief administrative officer of the university on matters pertaining to the program authorized.

57 U.S.C. 2664.

SEC. 505. AGREEMENTS AND PLANS.-(a) Programs authorized under this title shall be conducted as mutually agreed upon by the Secretary and the university responsible for administering said programs in a memorandum of understanding which shall provide for the coordination of the programs authorized under this title, coordination of these programs with other rural development programs of Federal, State, and local government, and such other matters as the Secretary shall determine.

(b) Annually said university shall submit to the Secretary an annual program plan for programs authorized under this title which shall include plans for the programs to be conducted by each cooperating and participating university or college and such other information as the Secretary shall prescribe. Each State program must include research and extension activities directed toward identification of programs which are likely to have the greatest impact upon accomplishing the objectives of rural development in both the short and longer term and the use of these studies to support the State's comprehensive program to be supported under this title.

SEC. 506. WITHHOLDING FUNDS.-When the Secretary determines that a State is not eligible to receive part or all of the funds to which it is otherwise entitled because of a failure to satisfy conditions specified in this title, or because of a failure to comply with regulations issued by the Secretary under this title, the facts and reasons therefor shall be reported to the President, and the amount involved shall be kept separate in the Treasury until the expiration of the Congress next succeeding a session of the legislature of the State from which funds. have been withheld in order that the State may, if it should so desire, appeal to Congress from the determination of the Secretary. If the next Congress shall not direct such sum to be paid, it shall be covered into the Treasury. If any portion of the moneys received by the designated officers of any State for the support and maintenance of programs authorized by this title shall by any action or contingency be diminished or lost, or be misapplied, it shall be replaced by said State. SEC. 507.8 DEFINITIONS. For the purposes of this title

(a) "Rural development" means the planning, financing, and development of facilities and services in rural areas that contribute to making these areas desirable places in which to live and make private and business investments; the planning, development, and expansion of business and industry in rural areas to provide increased employment and income; the planning, development, conservation, and use of land, water, and cther natural resources of rural areas to maintain or enhance the quality of the environment for people and business in rural areas; and processes and procedures that have said objectives as their major purposes.

(b) The word "State" means the several States, Guam, the Commonwealth of the Northern Mariana Islands, American Samoa, the Virgin Islands of the United States, and the Commonwealth of Puerto Rico.

$7 U.S.C. 2665.

17 U.S.C. 2666.

$7 U.S.C. 2667. Amended by the National Agricultural Research, Extension, and Teaching Policy Act of 1977, Public Law 95-113. section 1442. 91 Stat. 1006, which added subsection (e) and by the Rural Development Policy Act of 1980, Public Law 96-355, section 4, 94 Stat. 1174, which expanded the definition of "State" to include "Guam,

(c) "Small farmer" means any farmer with gross sales from farming of $20,000 or less per year.

SEC. 508. REGULATIONS.-The Secretary is authorized to issue such regulations as may be necessary to carry out the provisions of this title.

SEC. 509.10 SECRETARY'S AUTHORIZATION.-(a) The Secretary is authorized and directed to formulate and carry out a pilot program for the production and marketing of industrial hydrocarbons derived from agricultural commodities and forest products for the purpose of stabilizing and expanding the market for such commodities and products and expanding the Nation's supply of industrial hydro

carbons.

(b) The Secretary shall provide for four pilot projects for the production of industrial hydrocarbons and alcohols from agricultural commodities and forest products by guaranteeing loans, not to exceed $15,000,000 per each such project, to public, private, or cooperative organizations organized for profit or nonprofit, or to individuals for a term not to exceed twenty years at a rate of interest agreed upon by the borrower and lender.

(c) No loan may be guaranteed under this section unless (1) research indicates the total energy content of the products and byproducts to be manufactured by the loan applicant will exceed the total energy input from fossil fuels used in the manufacture of such products and byproducts, and (2) such other conditions as the Secretary deems appropriate to achieve the purposes of this section are met.

(d) In order to assure that the recipients of loans made under this section have a dependable supply of agricultural commodities at a stable price for use in the pilot projects provided for in this section, the Secretary is authorized to enter into long-term contracts, not exceeding five years, with the recipients of such loans. Such contracts shall guarantee the recipients of such loans a specified quantity of agricultural commodities annually at mutually agreed upon prices, but the agricultural commodities shall not be sold under any such contracts at less than the price support level prescribed for the commodity concerned unless the commodities are out of condition, unstorable, or samplegrade or lower, as prescribed in Department of Agriculture standards. (e) The Secretary shall supply from Commodity Credit Corporation stocks or, to such extent or in such amounts as are provided in appropriation Acts, purchase such quantities of agricultural commodities as may be necessary to comply with the terms of agreements entered into under this section.

(f) The provisions of this section shall be carried out through the Commodity Credit Corporation.

SEC. 510.11 REPORTS.-The Secretary shall evaluate annually the effectiveness of the programs established under subsections (c) and (d) of section 502 of this title and make a report to Congress not later than February 1 of each year on that evaluation and the operation of the programs during the preceding fiscal year.

7 U.S.C. 2668.

10 7 U.S.C. 2669. Added by Public Law 95-113, section 1420, see note 8. 11 7 U.S.C. 2670. Added by Public Law 95-113, section 1443, see note 8.

SEC. 607.12 RURAL DEVELOPMENT POLICY.-(a) The Secretary of Agriculture shall provide leadership within the executive branch for, and shall assume responsibility for coordinating, a nationwide rural development program using the services of executive branch departments and agencies, including, but not limited to, the agencies, bureaus, offices, and services of the Department of Agriculture, in coordination with rural development programs of State and local governments.

(b) POLICY DEVELOPMENT.-(1) The Secretary shall conduct a systematic review of Federal programs affecting rural areas to (A) determine whether such areas are benefiting from such programs in an equitable proportion to the benefits received by urban areas and (B) identify any factors that may restrict accessibility to such programs in rural areas or limit participation in such programs.

(2) Subject to the Privacy Act of 1974, the Secretary may secure directly from any Federal department or agency information necessary to carry out the Secretary's duties under this section. Upon request of the Secretary under this paragraph, the head of any such Federal department or agency shall furnish such information to the Secretary.

(3) The Secretary shall develop a process through which multistate, State, substate, and local rural development needs, goals, objectives, plans, and recommendations can be received and assessed on a continuing basis. Such process may include the use of those rural development experts, advisors, and consultants that the Secretary deems appropriate, as well as the establishment of temporary advisory committees under the terms of the Federal Advisory Committee Act. (4) The Secretary may undertake cooperative efforts with other Federal departments and agencies to improve the coordination and effectiveness of Federal programs, services, and actions affecting rural areas. The Secretary may request the heads of other Federal departments and agencies to participate in any working groups that the Secretary deems necessary to carry out the purposes of this section.

(5) The Secretary may hold public hearings and receive comments on any matter that the Secretary determines may have a significant impact on rural development or the economic development of rural communities.

(c) RURAL DEVELOPMENT STRATEGY.-(1) The Secretary shall prepare a comprehensive rural development strategy based on the needs, goals, objectives, plans, and recommendations of local communities, substate areas, States, and multistate regions, which is designed to

(A) maximize the effectiveness, increase the responsiveness, and improve the delivery of Federal programs to rural areas; (B) increase the coordination of Federal programs with the development needs, objectives, and resources of local communities, substate areas, States, and multistate regions; and

(C) achieve the most effective combinations of Federal, State, and local resources to meet the needs of rural areas for orderly growth and development.

(2) The rural development strategy shall take into account the

need to

(A) improve the economic well-being of all rural residents and alleviate the problems of low income, elderly, minority, and otherwise disadvantaged rural residents;

#7 U.S.C. 2204b. Added by Public Law 96–355, section 2, see note 8.