§ 8833. Guaranteed construction loans

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1980

   Energy Security Act

   Pub. L. 96–294 title II § 233 · 94 Stat. 611

   Enacted · 42 U.S.C. § 8833

   Pub. L. 96–294, title II, § 233, June 30, 1980, 94 Stat. 698

   Source evidence

   Code source credit
   Pub. L. 96–294, title II, § 233, June 30, 1980, 94 Stat. 698

   Enacted provision · exact public law section
   Sec. 233. guaranteed construction loans (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. (b) 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 (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 the Internal Revenue Code of 1954. 26 USC 1 et seq. (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) (1) A fee or fees may be charged and collected by the Secretary of Fee charge. 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.

2. 1986

   Tax Reform Act of 1986

   Pub. L. 99–514 § 2 · 100 Stat. 2085

   Substituted · 42 U.S.C. § 8833(g)(1)

   Pub. L. 99–514 substituted “Internal Revenue Code of 1986” for “Internal Revenue Code of 1954”, which for purposes of codification was translated as “title 26” thus requiring no change in text

   Source evidence

   Code amendment note
   Subsec. (g)(1). Pub. L. 99–514 substituted “Internal Revenue Code of 1986” for “Internal Revenue Code of 1954”, which for purposes of codification was translated as “title 26” thus requiring no change in text.

   Enacted provision · exact public law section
   SEC. 2. INTERNAL REVENUE CODE OF 1986. (a) Redesignation of 1954 Code.— The Internal Revenue Title enacted August 16, 1954, as heretofore, hereby, or hereafter amended, may be cited as the “Internal Revenue Code of 1986”. (b) References in Laws, Etc.— Except when inappropriate, any reference in any law, Executive order, or other document— (1) to the Internal Revenue Code of 1954 shall include a reference to the Internal Revenue Code of 1986, and (2) to the Internal Revenue Code of 1986 shall include a reference to the provisions of law formerly known as the Internal Revenue Code of 1954.

2 of 2 references resolved to an enrolled provision