42 USC 16512 - Terms and conditions

View all text of Subchapter XV [§ 16511 - § 16517]

§ 16512. Terms and conditions

(a) In general

(b) Specific appropriation or contribution

(1) In general

(2) Insufficient appropriationsIf sufficient appropriated funds to pay the cost of a guarantee are not available, then the guarantee shall not be made unless—

(A) the Secretary has received from the borrower a payment in full for the cost of the guarantee and deposited the payment into the Treasury; or

(B) a combination of one or more appropriations and one or more payments from the borrower under this subsection has been made that is sufficient to cover the cost of the guarantee.

(3) Source of payments

(d) Repayment

(1) Requirement

(A) In general

(B) Reasonable prospect of repaymentThe Secretary shall base a determination of whether there is reasonable prospect of repayment under subparagraph (A) on a comprehensive evaluation of whether the borrower has a reasonable prospect of repaying the guaranteed obligation for the eligible project, including, as applicable, an evaluation of—

(i) the strength of the contractual terms of the eligible project (if commercially reasonably available);

(ii) the forecast of noncontractual cash flows supported by market projections from reputable sources, as determined by the Secretary;

(iii) cash sweeps and other structure enhancements;

(iv) the projected financial strength of the borrower—(I) at the time of loan close; and(II) throughout the loan term after the project is completed;

(v) the financial strength of the investors and strategic partners of the borrower, if applicable; and

(vi) other financial metrics and analyses that are relied on by the private lending community and nationally recognized credit rating agencies, as determined appropriate by the Secretary.

(2) Amount

(3) Subordination

(e) Interest rate

(f) TermThe term of an obligation shall require full repayment over a period not to exceed the lesser of—

(1) 30 years; or

(2) 90 percent of the projected useful life of the physical asset to be financed by the obligation (as determined by the Secretary).

(g) Defaults

(1) Payment by Secretary

(A) In general

(B) Payment required

(2) Subrogation

(A) In generalIf the Secretary makes a payment under paragraph (1), the Secretary shall be subrogated to the rights of the recipient of the payment as specified in the guarantee or related agreements including, where appropriate, the authority (notwithstanding any other provision of law) to—

(i) complete, maintain, operate, lease, or otherwise dispose of any property acquired pursuant to such guarantee or related agreements; or

(ii) permit the borrower, pursuant to an agreement with the Secretary, to continue to pursue the purposes of the project if the Secretary determines this to be in the public interest.

(B) Superiority of rights

(C) Terms and conditionsA guarantee agreement shall include such detailed terms and conditions as the Secretary determines appropriate to—

(i) protect the interests of the United States in the case of default; and

(ii) have available all the patents and technology necessary for any person selected, including the Secretary, to complete and operate the project.

(3) Payment of principal and interest by SecretaryWith respect to any obligation guaranteed under this section, the Secretary may enter into a contract to pay, and pay, holders of the obligation, for and on behalf of the borrower, from funds appropriated for that purpose, the principal and interest payments which become due and payable on the unpaid balance of the obligation if the Secretary finds that—

(A)

(i) the borrower is unable to meet the payments and is not in default;

(ii) it is in the public interest to permit the borrower to continue to pursue the purposes of the project; and

(iii) the probable net benefit to the Federal Government in paying the principal and interest will be greater than that which would result in the event of a default;

(B) the amount of the payment that the Secretary is authorized to pay shall be no greater than the amount of principal and interest that the borrower is obligated to pay under the agreement being guaranteed; and

(C) the borrower agrees to reimburse the Secretary for the payment (including interest) on terms and conditions that are satisfactory to the Secretary.

(4) Action by Attorney General

(A) Notification

(B) RecoveryOn notification, the Attorney General shall take such action as is appropriate to recover the unpaid principal and interest due from—

(i) such assets of the defaulting borrower as are associated with the obligation; or

(ii) any other security pledged to secure the obligation.

(h) Fees

(1) In general

(2) AvailabilityFees collected under this subsection shall—

(A) be deposited by the Secretary into the Treasury; and

(B) remain available until expended, subject to such other conditions as are contained in annual appropriations Acts.

(3) Reduction in fee amount

(i) Records; audits

(1) In general

(2) Access

(j) Full faith and credit

(k) Wage rate requirements

(l) Restructuring of loan guarantees

(m) Written analysis

(1) Requirement

(2) Transmission

(3) Explanation

(n) Application status

(1) Request

(2) ResponseNot later than 10 days after receiving a request from an applicant under paragraph (1), the Secretary shall provide to the applicant a response that includes—

(A) a description of the current status of review of the application;

(B) a summary of any factors that are delaying a final decision on the application, a list of what items are required in order to reach a final decision, citations to authorities stating the reasons why such items are required, and a list of actions the applicant can take to expedite the process; and

(o) OutreachIn carrying out this subchapter, the Secretary shall—

(1) provide assistance with the completion of applications for a guarantee under this subchapter;

(2) conduct outreach, including through conferences and online programs, to disseminate information to potential applicants;

(3) conduct outreach to encourage participation of supporting finance institutions and private lenders in eligible projects and projects described in section 16517(a) of this title.

(p) Coordination

(q) ReportNot later than 2 years after December 27, 2020, and every 3 years thereafter, the Secretary shall submit to Congress a report on the status of applications for, and projects receiving, guarantees under this title, including—

(1) a list of such projects, including the guarantee amount, construction status, and financing partners of each such project;

(2) the status of each such project’s loan repayment, including interest paid and future repayment projections;

(3) an estimate of the air pollutant or greenhouse gas emissions avoided or reduced from each such project;

(4) data regarding the number of direct and indirect jobs retained, restored, or created by such projects;

(5) identification of—

(A) technologies deployed by projects that have received guarantees that have subsequently been deployed commercially without guarantees; and

(B) novel technologies that have been deployed by such projects and deployed in the commercial energy market;

(6) the number of new projects projected to receive a guarantee under this subchapter during the next 2 years and the aggregate guarantee amount;

(7) the number of outreach engagements conducted with potential applicants;

(8) the number of applications received and currently pending for each open solicitation; and

(9) any other metrics the Secretary finds appropriate.

(r)1

1 So in original. Two subsecs. (r) have been enacted.

Conflicts of interest

(r)1 State energy financing institutions

(1) EligibilityTo be eligible for a guarantee under this subchapter, a project receiving financial support or credit enhancements from a State energy financing institution—

(A) shall meet the requirements of

(B) shall not be required to meet the requirements of section 16513(a)(2) of this title.

(2) Partnerships authorized

(Pub. L. 109–58, title XVII, § 1702, Aug. 8, 2005, 119 Stat. 1117; Pub. L. 111–85, title III, § 310, Oct. 28, 2009, 123 Stat. 2873; Pub. L. 112–74, div. B, title III, § 305(1), Dec. 23, 2011, 125 Stat. 877; Pub. L. 116–260, div. Z, title IX, § 9010(a), Dec. 27, 2020, 134 Stat. 2603; Pub. L. 117–58, div. D, title IV, § 40401(a)(1), (3), (c)(2), Nov. 15, 2021, 135 Stat. 1033, 1034, 1037; Pub. L. 117–169, title V, §§ 50141(f), 50144(d), Aug. 16, 2022, 136 Stat. 2044, 2045; Pub. L. 117–328, div. D, title III, § 308, Dec. 29, 2022, 136 Stat. 4645.)