42 U.S.C. § 8833 — Guaranteed construction loans

Page 7659 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 8833 (c) Required statements The comprehensive plan under this section shall include a statement setting forth— (1) the anticipated research, development, demonstration, and commercialization objec- tives to be achieved; (2) the management structure and approach to be adopted to carry out such plan; (3) the program strategies, including de- tailed milestone goals to be achieved; (4) the specific funding requirements for in- dividual program elements and activities, in- cluding the total estimated construction costs of proposed projects; and (5) the estimated relative financial contribu- tions of the Federal Government and non-Fed- eral participants in the program. (d) Report to President and Congress; contents Not later than January 1, 1982, the Secretary shall prepare and submit to the President and the Congress a report containing a complete de- scription of any financial, institutional, envi- ronmental, and social barriers to the develop- ment and application of technologies for the re- covery of energy from municipal wastes. (Pub. L. 96–294, title II, § 231, June 30, 1980, 94 Stat. 696.) § 8832. Construction loans (a) Authority of Secretary of Energy Subject to sections 8835 and 8836 of this title, the Secretary of Energy may commit to make, and make, loans for the construction of munic- ipal waste energy projects. (b) Estimated project construction costs as deter- minative of initial and revised amount of loan; interest rate (1) Any loan under this section— (A) may not exceed 80 per centum of the total estimated cost of the construction of the municipal waste energy project involved, and (B) shall bear interest at a rate determined by the Secretary of Energy (taking into con- sideration the current average market yield on outstanding marketable obligations of the United States with remaining periods to ma- turity comparable to the average maturities of such loans) plus not to exceed one per cen- tum, as determined by the Secretary of En- ergy, and adjusted to the nearest one-eighth of one per centum. (2) In the event the total estimated costs of construction of the project thereafter exceed the total estimated costs initially determined by the Secretary of Energy, the Secretary may in addition, upon application therefor, make a loan for so much of the additional estimated costs as does not exceed 10 per centum of the initial total estimated costs of construction. (c) Preconditions A loan may not be made under this section un- less the person applying for such loan has estab- lished to the satisfaction of the Secretary of En- ergy that the applicant is unable without such a loan to obtain sufficient credit elsewhere at rea- sonable rates and terms, taking into consider- ation prevailing market rates and terms for loans for similar periods of time, to finance the construction of the project for which such loan is sought. (Pub. L. 96–294, title II, § 232, June 30, 1980, 94 Stat. 697.) § 8833. Guaranteed construction loans (a) Authority of Secretary of Energy Subject to sections 8835 and 8836 of this title, the Secretary of Energy may commit to guar- antee, and guarantee, against loss on up to 90 per centum of the principal and interest, any loan which is made solely to provide funds for the construction of a municipal waste energy project and which does not exceed 90 per centum of the cost of the construction of the project in- volved, as estimated by the Secretary on the date of the guarantee or commitment to guar- antee. (b) Estimated project construction costs as deter- minative of revised amount of guarantee In the event the total estimated costs of con- struction of the project thereafter exceed the total estimated costs initially determined by the Secretary of Energy, the Secretary may in addition, upon application therefor, guarantee, against loss on up to 90 per centum of the prin- cipal and interest, a loan for so much of the ad- ditional estimated total costs as does not exceed 10 per centum of the total estimated costs. (c) Terms and conditions The terms and conditions of loan guarantees under this section shall provide that, if the Sec- retary of Energy makes a payment of principal or interest upon the default by a borrower, the Secretary shall be subrogated to the rights of the recipient of such payment (and such sub- rogation shall be expressly set forth in the loan guarantee or related agreements). (d) Termination, cancellation, or revocation, and conclusive nature of guarantee Any loan guarantee under this section shall not be terminated, canceled, or otherwise re- voked, except in accordance with the terms thereof and shall be conclusive evidence that such guarantee complies fully with the provi- sions of this chapter and of the approval and le- gality of the principal amount, interest rate, and all other terms of the securities, obliga- tions, or loans and of the guarantee. (e) Payment to lender If the Secretary of Energy determines that— (1) the borrower is unable to meet payments and is not in default, (2) it is in the public interest to permit the borrower to continue to pursue the purposes of such project, and (3) the probable net benefit to the United States in paying the principal and interest due under a loan guarantee agreement will be greater than that which would result in the event of a default, then the Secretary may pay to the lender under a loan guarantee agreement an amount not greater than the principal and interest which the borrower is obligated to pay to such lender, if the borrower agrees to reimburse the Sec- Page 7660 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 8834 1 So in original. No subpar. (B) has been enacted. retary for such payment on terms and condi- tions, including interest, which the Secretary determines are sufficient to protect the finan- cial interests of the United States. (f) Preconditions A loan may not be guaranteed under this sec- tion unless the applicant for such loan has es- tablished to the satisfaction of the Secretary of Energy that the lender is not willing without such a guarantee to extend credit to the appli- cant at reasonable rates and terms, taking into consideration prevailing market rates and terms for loans for similar periods of time, to finance the construction of the project for which such loan is sought. (g) Payment of interest; tax consequences (1) With respect to any loan or debt obligation which is— (A) issued after June 30, 1980, by, or on be- half of, any State or any political subdivision or governmental entity thereof, (B) guaranteed by the Secretary of Energy under this section, and (C) not supported by the full faith and credit of the issuer as a general obligation of the issuer, the interest paid on such obligation and received by the purchaser thereof (or the purchaser’s suc- cessors in interest) shall be included in gross in- come for the purposes of chapter 1 of title 26. (2) With respect to the amount of obligations described in paragraph (1) that the issuer would have been able to issue as tax exempt obliga- tions (other than obligations secured by the full faith and credit of the issuer as a general obliga- tion of the issuer), the Secretary of Energy is authorized to pay only to the issuer any portion of the interest on such obligations, as deter- mined by the Secretary of the Treasury after taking into account the interest rate which would have been paid on the obligations had they been issued as tax exempt obligations with- out being so guaranteed by the Secretary of En- ergy and the interest rate actually paid on the obligations when issued as taxable obligations. Such payments shall be made in amounts deter- mined by the Secretary of Energy, and in ac- cordance with such terms and conditions as the Secretary of the Treasury shall require. (h) Fees (1) A fee or fees may be charged and collected by the Secretary of Energy for any loan guar- antee under this section. (2) The amount of such fee shall be based on the estimated administrative costs and risk of loss, except that such fee may not exceed 1 per centum of the maximum of the guarantee. (Pub. L. 96–294, title II, § 233, June 30, 1980, 94 Stat. 698; Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095.) Editorial Notes REFERENCES IN TEXT This chapter, referred to in subsec. (d), was in the original ‘‘this title’’, meaning title II of Pub. L. 96–294, June 30, 1980, 94 Stat. 683, known as the Biomass Energy and Alcohol Fuels Act of 1980, which enacted this chap- ter, sections 1435 and 3129 of Title 7, Agriculture, and section 3391a of Title 15, Commerce and Trade, and amended sections 341, 342, 3104, and 3154 of Title 7, sec- tion 753 of Title 15, and sections 590h and 1642 of Title 16, Conservation. For complete classification of title II to the Code, see Short Title note set out under section 8801 of this title and Tables. AMENDMENTS 1986—Subsec. (g)(1). Pub. L. 99–514 substituted ‘‘Inter- nal Revenue Code of 1986’’ for ‘‘Internal Revenue Code of 1954’’, which for purposes of codification was trans- lated as ‘‘title 26’’ thus requiring no change in text. § 8834. Price support loans and price guarantees (a) Authority of Secretary of Energy with respect to loans for existing projects; disbursements, etc. (1) In the case of any existing municipal waste energy project which produces and sells biomass energy, the Secretary of Energy may commit to make, and make, a price support loan in amounts determined under paragraph (3) for the operation of such project. Payments under any such loan shall be disbursed on an annual basis, as determined (in accordance with paragraph (3)) on the basis of the amount of biomass energy produced and sold by that project during the 12- month period involved and the type and cost of fuel displaced by the biomass energy sold. (2)(A) 1 In the case of any support loan under this section for an existing municipal waste en- ergy project— (i) disbursements under such loan may not be made for more than 5 consecutive 12-month periods; (ii) the amount of the disbursement for the second and any subsequent 12-month period for which disbursements are to be made under the support loan shall be reduced by an amount determined by multiplying the amount cal- culated under paragraph (3) by a factor deter- mined by dividing the number of 12-month pe- riods for which disbursements are made under the support loan into the number of such peri- ods which have elapsed; (iii) commencing at the end of the last of such 12-month periods, the support loan shall be repayable over a period equal to the then remaining useful life of the project (as deter- mined by the Secretary) or 10 years, whichever is shorter; and (iv) commencing at the end of such last 12- month period, such loan shall bear interest at a rate determined by the Secretary of Energy (taking into consideration the current average market yield on outstanding marketable obli- gations of the United States with remaining periods to maturity comparable to the average maturities of such loans) plus not to exceed one per centum, as determined by the Sec- retary of Energy, and adjusted to the nearest one-eighth of one per centum. (3) The amount of the loan payment to be dis- bursed under this subsection for any year with respect to each type of biomass energy produced and sold by an existing municipal waste energy project shall be equal to— (A)(i) the standard support price reduced by the cost of the fuel displaced by the biomass