43 U.S.C. § 2422 — Project eligibility

Page 638 TITLE 43—PUBLIC LANDS § 2409 1 So in original. Probably should be ‘‘Regulations’’. 2 See References in Text note below. § 2409. Termination of authority The authority of the Secretary to carry out this subchapter terminates on September 30, 2016. (Pub. L. 109–451, title I, § 110, Dec. 22, 2006, 120 Stat. 3356.) SUBCHAPTER II—TWENTY-FIRST CENTURY WATER WORKS § 2421. Definitions In this subchapter: (1) Indian tribe The term ‘‘Indian tribe’’ has the meaning given the term in section 5304 of title 25. (2) Lender The term ‘‘lender’’ means— (A) a non-Federal qualified institutional buyer (as defined in section 230.144A(a) of title 17, Code of Federal Regulation 1 (or any successor regulation), known as Rule 144A(a) of the Securities and Exchange Commission and issued under the Securities Act of 1933 (15 U.S.C. 77a et seq.)); or (B) a clean renewable energy bond lender (as defined in section 54(j)(2) 2 of title 26 (as in effect on December 22, 2006)). (3) Loan guarantee The term ‘‘loan guarantee’’ has the meaning given the term ‘‘loan guarantee’’ in section 661a of title 2. (4) Non-Federal borrower The term ‘‘non-Federal borrower’’ means— (A) a State (including a department, agen- cy, or political subdivision of a State); or (B) a conservancy district, irrigation dis- trict, canal company, water users’ associa- tion, Indian tribe, an agency created by interstate compact, or any other entity that has the capacity to contract with the United States under Federal reclamation law. (5) Obligation The term ‘‘obligation’’ means a loan or other debt obligation that is guaranteed under this section. (6) Project The term ‘‘project’’ means— (A) a rural water supply project (as defined in section 2401(9) of this title); (B) an extraordinary operation and main- tenance activity for, or the rehabilitation or replacement of, a facility— (i) that is authorized by Federal rec- lamation law and constructed by the United States under such law; or (ii) in connection with which there is a repayment or water service contract exe- cuted by the United States under Federal reclamation law; or (C) an improvement to water infrastruc- ture directly associated with a reclamation project that, based on a determination of the Secretary— (i) improves water management; and (ii) fulfills other Federal goals. (7) Secretary The term ‘‘Secretary’’ means the Secretary of the Interior. (Pub. L. 109–451, title II, § 202, Dec. 22, 2006, 120 Stat. 3356.) Editorial Notes REFERENCES IN TEXT The Securities Act of 1933, referred to in par. (2)(A), is title I of act May 27, 1933, ch. 38, 48 Stat. 74, which is classified generally to subchapter I (§ 77a et seq.) of chapter 2A of Title 15, Commerce and Trade. For com- plete classification of this Act to the Code, see section 77a of Title 15 and Tables. Section 54 of title 26, referred to in par. (2)(B), was re- pealed by Pub. L. 115–97, title I, § 13404(a), Dec. 22, 2017, 131 Stat. 2138. Statutory Notes and Related Subsidiaries SHORT TITLE This subchapter known as the ‘‘Twenty-First Century Water Works Act’’, see Short Title note set out under section 2401 of this title. § 2422. Project eligibility (a) Eligibility criteria (1) In general The Secretary shall develop and publish in the Federal Register criteria for determining the eligibility of a project for financial assist- ance under section 2423 of this title. (2) Inclusions Eligibility criteria shall include— (A) submission of an application by the lender to the Secretary; (B) demonstration of the creditworthiness of the project, including a determination by the Secretary that any financing for the project has appropriate security features to ensure repayment; (C) demonstration by the non-Federal bor- rower, to the satisfaction of the Secretary, of the ability of the non-Federal borrower to repay the project financing from user fees or other dedicated revenue sources; (D) demonstration by the non-Federal bor- rower, to the satisfaction of the Secretary, of the ability of the non-Federal borrower to pay all operations, maintenance, and re- placement costs of the project facilities; and (E) such other criteria as the Secretary de- termines to be appropriate. (b) Waiver The Secretary may waive any of the criteria in subsection (a)(2) that the Secretary deter- mines to be duplicative or rendered unnecessary because of an action already taken by the United States. (c) Projects previously authorized A project that was authorized for construction under Federal reclamation laws prior to Decem- ber 22, 2006, shall be eligible for assistance under this subchapter, subject to the criteria estab- lished by the Secretary under subsection (a). Page 639 TITLE 43—PUBLIC LANDS § 2424 (d) Criteria for rural water supply projects A rural water supply project that is deter- mined to be feasible under section 2405 of this title is eligible for a loan guarantee under sec- tion 2423 of this title. (Pub. L. 109–451, title II, § 203, Dec. 22, 2006, 120 Stat. 3357.) § 2423. Loan guarantees (a) Authority Subject to the availability of appropriations, the Secretary may make available to lenders for a project meeting the eligibility criteria estab- lished in section 2422 of this title loan guaran- tees to supplement private-sector or lender fi- nancing for the project. (b) Terms and limitations (1) In general Loan guarantees under this section for a project shall be on such terms and conditions and contain such covenants, representations, warranties, and requirements as the Secretary determines to be appropriate to protect the fi- nancial interests of the United States. (2) Amount Loan guarantees by the Secretary shall not exceed an amount equal to 90 percent of the cost of the project that is the subject of the loan guarantee, as estimated at the time at which the loan guarantee is issued. (3) Interest rate An obligation shall bear interest at a rate that does not exceed a level that the Secretary determines to be appropriate, taking into ac- count the prevailing rate of interest in the pri- vate sector for similar loans and risks. (4) Amortization A loan guarantee under this section shall provide for complete amortization of the loan guarantee within not more than 40 years. (5) Nonsubordination An obligation shall be subject to the condi- tion that the obligation is not subordinate to other financing. (c) Prepayment and refinancing Any prepayment or refinancing terms on a loan guarantee shall be negotiated between the non-Federal borrower and the lender with the consent of the Secretary. (Pub. L. 109–451, title II, § 204, Dec. 22, 2006, 120 Stat. 3358.) § 2424. Defaults (a) Payments by Secretary (1) In general If a borrower defaults on the obligation, the holder of the loan guarantee shall have the right to demand payment of the unpaid amount from the Secretary. (2) Payment required By such date as may be specified in the loan guarantee or related agreements, the Sec- retary shall pay to the holder of the loan guar- antee the unpaid interest on, and unpaid prin- cipal of, the obligation with respect to which the borrower has defaulted, unless the Sec- retary finds that there was not default by the borrower in the payment of interest or prin- cipal or that the default has been remedied. (3) Forbearance Nothing in this subsection precludes any for- bearance by the holder of the obligation for the benefit of the non-Federal borrower that may be agreed on by the parties to the obliga- tion and approved by the Secretary. (b) Subrogation (1) In general If the Secretary makes a payment under subsection (a), the Secretary shall be sub- rogated to the rights of the recipient of the payment as specified in the loan guarantee or related agreements, including, as appropriate, the authority (notwithstanding any other pro- vision of law) to— (A) complete, maintain, operate, lease, or otherwise dispose of any property acquired pursuant to the loan guarantee or related agreements; or (B) permit the non-Federal borrower, pur- suant to an agreement with the Secretary, to continue to pursue the purposes of the project if the Secretary determines the pur- poses to be in the public interest. (2) Superiority of rights The rights of the Secretary, with respect to any property acquired pursuant to a loan guarantee or related agreement, shall be supe- rior to the rights of any other person with re- spect to the property. (c) Payment of principal and interest by Sec- retary With respect to any obligation guaranteed under this section, the Secretary may enter into a contract to pay, and pay, holders of the obliga- tion, for and on behalf of the non-Federal bor- rower, from funds appropriated for that purpose, the principal and interest payments that be- come due and payable on the unpaid balance of the obligation if the Secretary finds that— (1)(A) the non-Federal borrower is unable to meet the payments and is not in default; (B) it is in the public interest to permit the non-Federal borrower to continue to pursue the purposes of the project; and (C) the probable net benefit to the Federal Government in paying the principal and inter- est will be greater than that which would re- sult in the event of a default; (2) the amount of the payment that the Sec- retary is authorized to pay shall be no greater than the amount of principal and interest that the non-Federal borrower is obligated to pay under the agreement being guaranteed; and (3) the borrower agrees to reimburse the Sec- retary for the payment (including interest) on terms and conditions that are satisfactory to the Secretary. (d) Action by Attorney General (1) Notification If the non-Federal borrower defaults on an obligation, the Secretary shall notify the At- torney General of the default.