Page:United States Statutes at Large Volume 106 Part 1.djvu/775

 PUBLIC LAW 102-325—JULY 23, 1992 106 STAT. 743 "(6) The term 'interest' includes accredited value or any other payment constituting interest on an obligation. "(7) The term 'outstanding*, when used with respect to bonds, shall not include bonds the payment of which shall have been provided for by the irrevocable deposit in trust of obligations maturing as to principal and interest in such amounts and at such times as will ensure the availability of sufficient moneys '> to make pa3maents on such bonds. "(8) The term 'designated bonding authority* means the private, for-profit corporation selected by the Secretary pursuant to section 725(1) for the purpose of issuing taxable construction bonds in furtherance of the purposes of this part. "(9) The term 'Advisory Board' means the Advisory Board established by section 727 of this part. "SEC. 723. FEDERAL INSURANCE FOR BONDS. 20 USC 1132c-2. "(a) GENERAL RULE.— Subject to the limitations in section 724, the Secretary is authorized to enter into insurance agreements to provide fuiancial insurance to guarantee the full payment of principal and interest on qualified bonds upon the conditions set forth in subsections (b), (c) and (d). "(b) RESPONSIBILITIES OF THE DESIGNATED BONDING AUTHORITY. — The Secretary may not enter into an insurance agreement described in subsection (a) unless the Secretary designates a qualified bonding authority in accordance with sections 725(1) and 726 and the designated bonding authority agrees in such agreement to— "(1) use the proceeds of the qualified bonds, less costs of issuance not to exceed 2 percent of the principal amount thereof, to make loans to eligible institutions or for deposit into an escrow account for repayment of the bonds; "(2) provide in each loan agreement with respect to a loan that not less than 95 percent of the proceeds of the loan will be used— "(A) to finance the repair, renovation, and, in exceptional cases, construction or acquisition, of a capitsJ project; or "(B) to refinance an obligation the proceeds of which were used to finance the repair, renovation, and, in exceptional cases, construction or acquisition, of a capital project; "(3)(A) charge such interest on loans, and provide for such a schedule of repayments of loans, as will, upon the timely repayment of the loans, provide adequate and timely funds for the payment of principal and interest on the bonds; and "(B) require that any payment on a loan expected to be necessary to make a payment of principal and interest on the bonds be due not less than 60 days prior to the date of the payment on the bonds for which such loan payment is expected to be needed; "(4) prior to the making of any loan, provide for a credit review of the institution receiving the loan and assure the Secretary that, on the basis of such credit review, it is reasonable to anticipate that the institution receiving the loan will be able to repay the loan in a timely manner pursuant to the terms thereof; "(5) provide in each loan agreement with respect to a loan that, if a delinquency on such loan results in a funding xinder the insurance agreement, the institution obligated on such loan

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