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Title 43, Public LandsRelease 119-110

§421c Conditions of Loan for Distribution and Drainage Systems; Reconveyance by Secretary of Lands, Interests in Lands, and Distribution Works Heretofore Conveyed to the United States; Conditions of Reconveyance; Rights of Way

Title 43 › CHAPTER 12 — RECLAMATION AND IRRIGATION OF LANDS BY FEDERAL GOVERNMENT › SUBCHAPTER III — INSTITUTION AND CONSTRUCTION OF PROJECTS › § 421c

Last updated Sep 23, 2026|Official source

Summary

The Secretary must make these rules part of any loan. The borrower must pay up to 10% of the construction cost, counted in cash or the fair value of materials, labor, land, or land rights (this includes costs to buy land). The project plans must follow sound engineering and meet the goals the project was approved for. The borrower must keep clear records of how loan money is spent and must immediately return any unspent loan funds so they can be applied to paying off the loan. Any group that agrees to repay a loan must run and maintain its distribution and drainage works under reasonable contract rules the government sets to protect the United States. The Secretary may give back to borrowers lands, land interests, and works that were transferred to the United States, but only if the repayment contract is changed to include whatever terms are needed to assure prompt repayment. Heads of federal agencies may grant revocable permission to use federal lands needed for building, operating, or maintaining these works under rules like other federal land laws, except that permission cannot be given for lands managed as national parks, national monuments, or for wildlife purposes.

Full Legal Text

Title 43, §421c

Public Lands, Source: USLM XML via OLRC

The Secretary shall require, as conditions to any such loan, that the borrower contribute in money or materials, labor, lands, or interests in land, computed at their reasonable value, a portion not in excess of 10 per centum, of the construction cost of the distribution and drainage system (including all costs of acquiring lands and interests in land), that the plans for the system be in accord with sound engineering practices and be such as will achieve the purposes for which the system was authorized, and that the borrower agree to account in full in regard to all disbursements of borrowed funds and to return at once for application toward amortization of the loan all funds which are not expended in the construction of the distribution and drainage system. Every organization contracting for repayment of a loan under sections 421a to 421h of this title shall operate and maintain its distribution and drainage works in conformity with reasonable contractual requirements determined to be appropriate for the protection of the United States. The Secretary is hereby authorized to reconvey to borrowers all lands or interests in lands and distribution works transferred to the United States under the provisions of sections 421a to 421h of this title: Provided, That any reconveyance shall be upon the condition that the repayment contract of the borrower be amended to include such provisions as the Secretary shall deem necessary or proper to provide assurance of and security for prompt repayment of the loan. The head of any department or agency of the Government within whose administrative jurisdiction are lands owned by the United States the use of which is reasonably necessary for the construction, operation, and maintenance of distribution and drainage works under sections 421a to 421h of this title may grant to a borrower or prospective borrower under sections 421a to 421h of this title revocable permission for the use thereof in like manner as under section 79 and 524 of title 16, sections 323 to 328 of title 25, section 8124 of title 38, or sections 931a to 931d, 946 to 950, 956, and 959 of this title, or any other similar Act which is applicable to the lands involved: Provided, That no such permission shall be granted in the case of lands being administered for national park, national monument, or wildlife purposes.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

References in Text

The

References in Text

to section 79 of title 16 and section 959 of this title are translations of a reference in the original to the act of “
February 15, 1901 (31 Stat. 790), as amended (16 U.S.C. 79, 522; 43 U.S.C. 959)”, meaning act of Feb. 15, 1901, ch. 372, which is classified to section 959 of Title 43, Public Lands. The Act, insofar as it related to National Park System units, was repealed and reenacted as section 100902(a) of Title 54, National Park Service and Related Programs, by Pub. L. 113–287, §§ 3, 7, Dec. 19, 2014, 128 Stat. 3094, 3272. Codification “Section 8124 of title 38” substituted in text (see 1991 Amendment note below) for “section 5024 of title 38”, which previously had been substituted for “section 5014 of title 38” as the probable intent of Congress in view of the renumbering of section 5014 of title 38 as section 5024 by Pub. L. 96–22, title III, § 301(b)(1),
June 13, 1979, 93 Stat. 61. Previously, “section 5014 of title 38” had been substituted for “section 11i of title 38” on authority of Pub. L. 85–857, § 5(a), Sept. 2, 1958, 72 Stat. 1281, the first section of which enacted Title 38, Veterans’ Benefits.

Amendments

1991—Pub. L. 102–40 substituted “section 8124 of title 38” for “section 5024 of title 38”. See Codification note above. 1972—Pub. L. 92–487 inserted provision subjecting drainage systems to the requirements of this section, substituted provisions authorizing the Secretary to reconvey to borrowers all land or interests in land and distribution works transferred to the United States under the provisions of sections 421a to 421h of this title, with the proviso relating to the amendment of the repayment contract, for provisions requiring borrowers, prior to the consummation of any loan, to transfer to the United States any lands or interests in lands presently held or acquired in the future which the Secretary finds necessary for the

Construction

, operation, or maintenance of distribution systems, with title to all such lands, etc., subject to retransfer to the borrower by the Secretary upon repayment of the loan, to remain in the United States, and struck out provisions which restricted applicability of provisions to provisions relating to Federal reclamation laws. 1956—Act May 14, 1956, provided that the Secretary, as conditions to loan, require borrower to account for disbursements of borrowed funds and return for application toward amortization of the loan all funds not expended in the

Construction

of the distribution system, required, prior to the consummation of any loan, the transfer to the United States of titles to lands or interests in lands held by the borrower, and that titles to such lands, interests, and distribution works remain in United States until repayment, and provided for issuance of revocable permits for the use of lands owned by United States, in lieu of the formerly authorized actual conveyance to the districts of the rights-of-way.

Reference

Citations & Metadata

Citation

43 U.S.C. § 421c

Title 43, Public Lands

Last Updated

Sep 23, 2026

Release point: 119-110