42 USC 8833 - Guaranteed construction loans

U.S Code last checked for updates: Nov 22, 2024

§ 8833.

Guaranteed construction loans

(a)

Authority of Secretary of Energy

(b)

Estimated project construction costs as determinative of revised amount of guarantee

(c)

Terms and conditions

(d)

Termination, cancellation, or revocation, and conclusive nature of 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 Secretary for such payment on terms and conditions, including interest, which the Secretary determines are sufficient to protect the financial interests of the United States.

(f)

Preconditions

(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 behalf 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 successors in interest) shall be included in gross income 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 obligations (other than obligations secured by the full faith and credit of the issuer as a general obligation of the issuer), the Secretary of Energy is authorized to pay only to the issuer any portion of the interest on such obligations, as determined 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 without being so guaranteed by the Secretary of Energy and the interest rate actually paid on the obligations when issued as taxable obligations. Such payments shall be made in amounts determined by the Secretary of Energy, and in accordance 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 guarantee 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.)

cite as: 42 USC 8833