Page:United States Statutes at Large Volume 94 Part 1.djvu/748

 94 STAT. 698

PUBLIC LAW 96-294—JUNE 30, 1980 GUARANTEED CONSTRUCTION LOANS

42 USC 8833.

Terms and conditions.

Payment to lender, conditions.

SEC, 233. (a) Subject to sections 235 and 236, the Secretary of Energy may commit to guarantee, 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 involved, as estimated by the Secretary on the date of the guarantee or commitment to guarantee. 0)) 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, guarantee, against loss on up to 90 per centum of the principal and interest, a loan for so much of the additional estimated total costs as does not exceed 10 per centum of the total estimated costs. (c) The terms and conditions of loan guarantees under this section shall provide that, if the Secretary 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 subrogation shall be expressly set forth in the loan guarantee or related agreements). (d) Any loan guarantee under this section shall not be terminated, canceled, or otherwise revoked, except in accordance with the terms thereof and shall be conclusive evidence that such guarantee complies fully with the provisions of this title and of the approval and legality of the principal amount, interest rate, and all other terms of the securities, obligations, or loans and of the guarantee. (e) 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) A loan may not be guaranteed under this section unless the applicant for such loan has established to the satisfaction of the Secretary of Energy that the lender is not willing without such a guarantee to extend credit to the applicant 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)(1) With respect to any loan or debt obligation which is— (A) issued after the date of the enactment of this Act 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

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