§5919. Loan guarantees and commitments for alternative fuel demonstration facilities

(a) Statement of purpose

It is the purpose of this section-

(1) to assure adequate Federal support to foster a demonstration program to produce alternative fuels from coal, oil shale, biomass, and other domestic resources;

(2) to authorize assistance, through loan guarantees under subsection ¹ (b) and (y) of this section for construction and startup and related costs, to demonstration facilities for the conversion of domestic coal, oil shale, biomass, and other domestic resources into alternative fuels; and

(3) to gather information about the technological, economic, environmental, and social costs, benefits, and impacts of such demonstration facilities.

(b) Issuance of obligations for alternative fuel conversion facilities; terms and conditions; rules and regulations; informational requirements; concurrence of Secretary of Treasury to terms and conditions; pledge of full faith and credit of United States; cooperative agreements for construction, etc., of modular facilities; bidding practices

(1) Except as provided in paragraph (5) of this subsection and subsection (y) of this section the Secretary is authorized, in accordance with such rules and regulations as he shall prescribe after consultation with the Secretary of the Treasury, to guarantee and to make commitments to guarantee, in such manner and subject to such conditions (not inconsistent with the provisions of this chapter) as he deems appropriate, the payment of interest on, and the principal balance of, bonds, debentures, notes, and other obligations issued by, or on behalf of, any borrower for the purpose of financing the construction and startup costs of demonstration facilities for the conversion of domestic coal, oil shale, biomass, and other domestic resources into alternative fuels: Provided, That no loan guarantee for a full sized oil shale facility shall be provided under this section until after successful demonstration of a modular facility producing between six and ten thousand barrels per day, taking into account such considerations as water usage, environmental effects, waste disposal, labor conditions, health and safety, and the socioeconomic impacts on local communities: Provided further, That no loan guarantee shall be available under this subsection for the manufacture of component parts for demonstration facilities eligible for assistance under this subsection.

(2) An applicant for any financial assistance under this section shall provide information to the Secretary in such form and with such content as the Secretary deems necessary.

(3) Prior to issuing any guarantee under this section the Secretary shall obtain the concurrence of the Secretary of the Treasury with respect to the timing, interest rate, and substantial terms and conditions of such guarantee. The Secretary of the Treasury shall insure to the maximum extent feasible that the timing, interest rate, and substantial terms and conditions of such guarantee will have the minimum possible impact on the capital markets of the United States, taking into account other Federal direct and indirect securities activities.

(4) The full faith and credit of the United States is pledged to the payment of all guarantees issued under this section with respect to principal and interest.

(5)(A) The Secretary is authorized, in the case of a facility for the conversion of oil shale to alternative fuels which is determined by the Secretary pursuant to the proviso in paragraph (1) of this subsection, to be constructed at a modular size, to enter into a cooperative agreement with the applicant in accordance with section 5907 of this title and the other provisions of this chapter to share the estimated total design and construction costs, plus operation and maintenance costs, of such modular facility. The Federal share shall not exceed 75 per centum of such costs. All receipts for the sale of any products produced during the operation of the facility shall be used to offset the costs incurred in the operation and maintenance of the facility. The provisions of subsections (d), (e), (k), (m), (p), (s), (t), (u), (v), (w), and (x) of this section shall apply to any such modular facility. The provisions of this section shall apply to any loan guarantee for such modular facility.

(B) After successful demonstration of the modular facility, as determined by the Secretary, the facility is eligible for financial assistance under this section for purposes of expansion to a full sized facility and the applicant may purchase the Federal interest in the modular facility as represented by the Federal share thereof by means of (i) a cash payment to the United States, or (ii) a share of the product or sales resulting from such expanded operation, as determined by the Secretary. If expansion of such facility is determined not to be warranted by the Secretary, he may, at the option of the applicant, dispose of the modular facility to the applicant at not less than fair market value, as determined by the Secretary as of the date of the disposal, or otherwise dispose of it, in accordance with applicable provisions of law, and distribute the net proceeds thereof, after expenses of such disposal, to the applicant in proportion to the applicant's share of the costs of such facility.

(6) To the extent possible, loan guarantees shall be issued on the basis of competitive bidding among guarantee applicants in a particular technology area.

(c) Prerequisites

The Secretary, with due regard for the need for competition, shall guarantee or make a commitment to guarantee any obligation under subsection (b) or (y) of this section only if-

(1) the Secretary is satisfied that the financial assistance applied for is necessary to encourage financial participation;

(2) the amount guaranteed to any borrower at any time does not exceed-

(A) an amount equal to 75 per centum of the project cost of the demonstration facility as estimated at the time the guarantee is issued, which cost shall not include amounts expended for facilities and equipment used in the extraction of a mineral other than coal or shale, and in the case of coal only to the extent that the Secretary determines that the coal is to be converted to alternative fuel; and

(B) an amount equal to 60 per centum of that portion of the actual total project cost of any demonstration facility which exceeds the project cost of such facility as estimated at the time the loan guarantee is issued;

(3) the Secretary has determined that there will be a continued reasonable assurance of full repayment;

(4) the obligation is subject to the condition that it not be subordinated to any other financing;

(5) the Secretary has determined, taking into consideration all reasonably available forms of assistance under this section and other Federal and State statutes, that the impacts resulting from the proposed demonstration facility have been fully evaluated by the borrower, the Secretary, and the Governor of the affected State, and that effective steps have been taken or will be taken in a timely manner to finance community planning and development costs resulting from such facility under this section, under other provisions of law, or by other means;

(6) the maximum maturity of the obligation does not exceed twenty years, or 90 per centum of the projected useful economic life of the physical assets of the demonstration facility covered by the guarantee, whichever is less, as determined by the Secretary;

(7) the Secretary has determined that, in the case of any demonstration or modular facility planned to be located on Indian lands, the appropriate Indian tribe, with the approval of the Secretary of the Interior, has given written consent to such location;

(8) the obligation provides for the orderly and ratable retirement of the obligation and includes sinking fund provisions, installment payment provisions or other methods of payments and reserves as may be reasonably required by the Secretary. Prior to approving any repayment schedule the Secretary may consider the date on which operating revenues are anticipated to be generated by the project. To the maximum extent possible repayment or provision therefor shall be required to be made in equal payments payable at equal intervals; and

(9) the obligation provides that the Secretary shall, after a period of not less than ten years from issuance of the obligation, taking into consideration whether the Government's needs for information to be derived from the project have been substantially met and whether the project is capable of commercial operation, determine the feasibility and advisability of terminating the Federal participation in the project. In the event that such determination is positive, the Secretary shall notify the borrower and provide the borrower with not less than two nor more than three years in which to find alternative financing. At the expiration of the designated period of time, if the borrower has been unable to secure alternative financing, the Secretary is authorized to collect from the borrower an additional fee of 1 per centum per annum on the remaining obligation to which the Federal guarantee applies.

(d) Repealed. Pub. L. 96–470, title I, §109, Oct. 19, 1980, 94 Stat. 2239

(e) Impact on communities, States, and Indian tribes; notice to State and local officials; procedures applicable for further action by Secretary subsequent to negative recommendation by State Governor; criteria and determinations relating to approval by Secretary of construction and operation plans; establishment, membership, etc., of advisory panel

(1) As soon as the Secretary knows the geographic location of a proposed facility for which a guarantee or a commitment to guarantee or cooperative agreement is sought under this section, he shall inform the Governor of the State, and officials of each political subdivision and Indian tribe, as appropriate, in which the facility would be located or which would be impacted by such facility. The Secretary shall not guarantee or make a commitment to guarantee or enter into a cooperative agreement under subsection (b) or subsection (y) of this section, if the Governor of the State in which the proposed facility would be located recommends that such action not be taken, unless the Secretary finds that there is an overriding national interest in taking such action in order to achieve the purpose of this section. If the Secretary decides to guarantee or make a commitment to guarantee or enter into a cooperative agreement despite a Governor's recommendation not to take such action, the Secretary shall communicate, in writing, to the Governor reasons for not concurring with such recommendation. This Secretary's decision, pursuant to this subsection, shall be final unless determined upon judicial review initiated by the Governor to be unlawful by the reviewing court pursuant to section 706(2)(A) through (D) of title 5. Such review shall take place in the United States court of appeals for the circuit in which the State involved is located, upon application made within ninety days from the date of such decision. The Secretary shall, by regulation, establish procedures for review of, and comment on, the proposed facility by States, local political subdivisions, and Indian tribes which may be impacted by such facility, and the general public.

(2) The Secretary shall review and approve the plans of the applicant for the construction and operation of any demonstration and related facilities constructed or to be constructed with assistance under this section. Such plans and the actual construction shall include such monitoring and other data-gathering costs associated with such facility as are required by the comprehensive plan and program under this section. The Secretary shall determine the estimated total cost of such demonstration facility, including, but not limited to, construction costs, startup costs, costs to political subdivisions and Indian tribe by such facility, and cost of any water storage facilities needed in connection with such demonstration facility, and determine who shall pay such costs. Such determination shall not be binding upon the States, political subdivisions, or Indian tribes.

(3) There is hereby established a panel to advise the Secretary on matters relating to the program authorized by this section, including, but not limited to, the impact of the demonstration facilities on communities and States and Indian tribes, the environmental and health and safety effects of such facilities, and the means, measures, and planning for preventing or mitigating such impacts, and other matters relating to the development of alternative fuels and other energy sources under this section. The panel shall include such Governors or their designees as shall be designated by the Chairman of the National Governors Conference. Representatives of Indian tribes, industry, environmental organizations, and the general public shall be appointed by the Secretary. The Chairman of the panel shall be selected by the Secretary. No person shall be appointed to the panel who has a financial interest in any applicant applying for assistance under this section. Members of the panel shall serve without compensation. The provisions of section 5816(e) of this title shall apply to the panel.

(f) Termination, cancellation, revocation; conclusiveness; contestability

Except in accordance with reasonable terms and conditions contained in the written contract of guarantee, no guarantee issued or commitment to guarantee made under this section shall be terminated, canceled, or otherwise revoked. Such a guarantee or commitment shall be conclusive evidence that the underlying obligation is in compliance with the provisions of this section and that such obligation has been approved and is legal as to principal, interest, and other terms. Subject to the conditions of the guarantee or commitment to guarantee, such a guarantee shall be incontestable in the hands of the holder of the guaranteed obligation, except as to fraud or material misrepresentation on the part of the holder.

(g) Default by borrower; procedures applicable to payment by Secretary and rights of subrogation; notice to Attorney General by Secretary for further action; protection for benefit of United States of patents and technologies of defaulting project through agreements, etc.

(1) If there is a default by the borrower, as defined in regulations promulgated by the Secretary and in the guarantee contract, the holder of the obligation shall have the right to demand payment of the unpaid amount from the Secretary. Within such period as may be specified in the guarantee or related agreements, the Secretary shall pay to the holder of the obligation the unpaid interest on, and unpaid principal of, the guaranteed obligation as to which the borrower has defaulted, unless the Secretary finds that there was no default by the borrower in the payment of interest or principal or that such default has been remedied. Nothing in this section shall be construed to preclude any forebearance by the holder of the obligation for the benefit of the borrower which may be agreed upon by the parties to the guaranteed obligation and approved by the Secretary.

(2) If the Secretary makes a payment under paragraph (1) of this subsection, the Secretary shall be subrogated to the rights of the recipient of such payment (and such subrogation shall be expressly set forth in the guarantee or related agreements), including the authority to complete, maintain, operate, lease, or otherwise dispose of any property acquired pursuant to such guarantee or related agreements, or any other property of the borrower (of a value equal to the amount of such payment) to the extent that the guarantee applies to amounts in excess of the estimated project cost under subsection (c)(2)(B) of this section, without regard to the provisions of the Federal Property and Administrative Services Act of 1949, as amended [40 U.S.C. 471 et seq.], except section 207 of that Act (40 U.S.C. 488), or any other law, or to permit the borrower, pursuant to an agreement with the Secretary, to continue to pursue the purposes of the demonstration facility if the Secretary determines that this is in the public interest. The rights of the Secretary with respect to any property acquired pursuant to such guarantee or related agreements, shall be superior to the rights of any other person with respect to such property.

(3) In the event of a default on any guarantee under this section, the Secretary shall notify the Attorney General, who shall take such action as may be appropriate to recover the amounts of any payments made under paragraph (1) including any payment of principal and interest under subsection (h) of this section from such assets of the defaulting borrower as are associated with the demonstration facility, or from any other security included in the terms of the guarantee.

(4) For purposes of this section, patents, including any inventions for which a waiver was made by the Secretary under section 5908 of this title, and technology resulting from the demonstration facility, shall be treated as project assets of such facility. The guarantee agreement shall include such detailed terms and conditions as the Secretary deems appropriate to protect the interests of the United States in the case of default and to have available all the patents and technology necessary for any person selected, including, but not limited to the Secretary, to complete and operate the defaulting project. Furthermore, the guarantee agreement shall contain a provision specifying that patents, technology, and other proprietary rights which are necessary for the completion or operation of the demonstration facility shall be available to the United States and its designees on equitable terms, including due consideration to the amount of the United States default payments. Inventions made or conceived in the course of or under such guarantee, title to which is vested in the United States under this chapter, shall not be treated as project assets of such facility for disposal purposes under this subsection, unless the Secretary determines in writing that it is in the best interests of the United States to do so.

(h) Contracts to pay, and payment of principal and interest by Secretary of unpaid balance of guaranteed obligations; prerequisites

With respect to any obligation guaranteed under this section, the Secretary is authorized to enter into a contract to pay, and to pay, holders of the obligations, for and on behalf of the borrowers, from the fund established by this section, the principal and interest payments which become due and payable on the unpaid balance of such obligation if the Secretary finds that-

(1) the borrower is unable to meet such payments and is not in default; it is in the public interest to permit the borrower to continue to pursue the purposes of such demonstration facility; and the probable net benefit to the Federal Government in paying such principal and interest will be greater than that which would result in the event of a default;

(2) the amount of such payment which the Secretary is authorized to pay shall be no greater than the amount of principal and interest which the borrower is obligated to pay under the loan agreement; and

(3) the borrower agrees to reimburse the Secretary for such payment on terms and conditions, including interest, which are satisfactory to the Secretary.

(i) Time for issuance of regulations; procedures applicable to issuance of regulations and amendments

Regulations required by this section shall be issued within one hundred and eighty days after February 25, 1978. All regulations under this section and any amendments thereto shall be issued in accordance with section 553 of title 5.

(j) Fees for guarantees of obligations; determination of amounts; excepted guarantees

The Secretary shall charge and collect fees for guarantees of obligations authorized by subsection (b)(1) of this section, in amounts which (1) are sufficient in the judgment of the Secretary to cover the applicable administrative costs, and (2) reflect the percentage of projects costs guaranteed. In no event shall the fee be less than 1 per centum per annum of the outstanding indebtedness covered by the guarantee. Nothing in this subsection shall be construed to apply to community planning and development assistance pursuant to subsection (k) of this section.

(k) Community development and planning assistance guarantees; terms and conditions; rules and regulations; concurrence of Secretary of Treasury to terms and conditions; payment of taxes in event of default by borrower; additional direct loans and grants; redemption of debt obligations; funding requirements and authorizations; facility title vesting and status upon default

(1) In accordance with such rules and regulations as the Secretary in consultation with the Secretary of the Treasury shall prescribe, and subject to such terms and conditions as he deems appropriate, the Secretary is authorized, for the purpose of financing essential community development and planning which directly result from, or are necessitated by, one or more demonstration facilities assisted under this section to-

(A) guarantee and make commitments to guarantee the payment of interest on, and the principal balance of obligations for such financing issued by eligible States, political subdivisions, or Indian tribes,

(B) guarantee and make commitments to guarantee the payment of taxes imposed on such demonstration facilities by eligible non-Federal taxing authorities which taxes are earmarked by such authorities to support the payment of interest and principal on obligations for such financing, and

(C) require that the applicant for assistance for a demonstration facility under this section advance sums to eligible States, political subdivisions, and Indian tribes to pay for the financing of such development and planning: Provided, That the State, political subdivision, or Indian tribe agrees to provide tax abatement credits over the life of the facilities for such payments by such applicant.

(2) Prior to issuing any guarantee under this subsection, the Secretary shall obtain the concurrence of the Secretary of the Treasury with respect to the timing, interest rate, and substantial terms and conditions of such guarantee. The Secretary of the Treasury shall insure to the maximum extent feasible that the timing, interest rate, and substantial terms and conditions of such guarantee will have the minimum possible impact on the capital markets of the United States, taking into account other Federal direct and indirect securities activities.

(3) In the event of any default by the borrower in the payment of taxes guaranteed by the Secretary under this subsection, the Secretary shall pay out of the fund established by this section such taxes at the time or times they may fall due, and shall have by reason of such payment a claim against the borrower for all sums paid plus interest.

(4) If after consultation with the State, political subdivision, or Indian tribe, the Secretary finds that the financial assistance programs of paragraph (1) of this subsection will not result in sufficient funds to carry out the purposes of this subsection, then the Secretary may-

(A) make direct loans to the eligible States, political subdivisions, or Indian tribes for such purposes: Provided, That such loans shall be made on such reasonable terms and conditions as the Secretary shall prescribe: Provided further, That the Secretary may waive repayment of all or part of a loan made under this paragraph, including interest, if the State or political subdivision or Indian tribe involved demonstrates to the satisfaction of the Secretary that due to a change in circumstances there will be net adverse impacts resulting from such demonstration facility that would probably cause such State, subdivision, or tribe to default on the loan; or

(B) require that any community development and planning costs which are associated with, or result from, such demonstration facility and which are determined by the Secretary to be appropriate for such inclusion shall be included in the total costs of the demonstration facility.

(5) The Secretary is further authorized to make grants to States, political subdivisions, or Indian tribes for studying and planning for the potential economic, environmental, and social consequences of demonstration facilities, and for establishing related management expertise.

(6) At any time the Secretary may, with the concurrence of the Secretary of the Treasury, redeem, in whole or in part, out of the fund established by this section, the debt obligations guaranteed or the debt obligations for which tax payments are guaranteed under this subsection.

(7) When one or more States, political subdivisions, or Indian tribes would be eligible for assistance under this subsection, but for the fact that construction and operation of the demonstration facilities occurs outside its jurisdiction, the Secretary is authorized to provide, to the greatest extent possible, arrangements for equitable sharing of such assistance.

(8) Such amounts as may be necessary for direct loans and grants pursuant to this subsection shall be available as provided in annual authorization Acts.

(9) The Secretary, if appropriate, shall provide assistance in the financing of up to 100 per centum of the costs of the required community development and planning pursuant to this subsection.

(10) In carrying out the provisions of this subsection, the Secretary shall provide that title to any facility receiving financial assistance under this subsection shall vest in the applicable State, political subdivision, or Indian tribe, as appropriate, and in the case of default by the borrower on a loan guarantee such facility shall not be considered a project asset for the purposes of subsection (g) of this section.

(l) Annual reporting requirements; contents, etc.

(1) The Secretary is directed to submit a report to the Congress within one hundred and eighty days after February 25, 1978, setting forth his recommendations on the best opportunities to implement a program of Federal financial assistance with the objective of demonstrating production and conservation of energy. Such report shall be updated and submitted to Congress at least annually and shall include specific comments and recommendations by the Secretary of the Treasury on the methods and procedures set forth in subparagraph (B)(viii) of this subsection, including their adequacy, and changes necessary to satisfy the objectives stated in this subsection. This report shall include-

(A) a study of the purchase or commitment to purchase by the Federal Government, for the use by the United States, of all or a portion of the products of any alternative fuel facilities constructed pursuant to this program as a direct or an alternate form of Federal assistance, which assistance, if recommended, shall be carried out pursuant to section 5906(a)(4) of this title; and

(B) a comprehensive plan and program to acquire information and evaluate the environmental, economic, social, and technological impacts of the demonstration program under this section. In preparing such a comprehensive plan and program, the Secretary shall consult with the Environmental Protection Agency, the Department of Housing and Urban Development, the Department of the Interior, the Department of Agriculture, and the Department of the Treasury, and shall include therein, but not be limited to, the following:

(i) information about potential demonstration facilities proposed in the program under this section;

(ii) any significant adverse impacts which may result from any activity included in the program;

(iii) the extent to which it is feasible to commercialize the technologies as they affect different regions of the Nation;

(iv) proposed regulations required to carry out the purposes of this section;

(v) a list of Federal agencies, governmental entities, and other persons that will be consulted or utilized to implement the program;

(vi) the methods and procedures by which the information gathered under the program will be analyzed and disseminated;

(vii) a plan for the study and monitoring of the health effects of such facilities on workers and other persons, including, but not limited to, any carcinogenic effect of alternative fuels; and

(viii) the methods and procedures to insure that (I) the use of the Federal assistance for demonstration facilities is kept to the minimum level necessary for the information objectives of this section, (II) the impact of loan guarantees on the capital markets of the United States is minimized, taking into account other Federal direct and indirect securities activities, and any economic sectors which may be negatively impacted as a result of the reduction of capital by the placement of guaranteed loans, and (III) the granting of Federal loan guarantees under this chapter does not impede movement toward improvement in the climate for attracting private capital to develop alternative fuels without continued direct Federal incentives.

(2) The Secretary shall annually submit a detailed report to the Congress concerning-

(A) the actions taken or not taken by the Secretary under this section during the preceding fiscal year, and including, but not be limited to (i) a discussion of the status of each demonstration facility and related facilities financed under this section, including progress made in the development of such facilities, and the expected or actual production from each such facility, including byproduct production therefrom, and the distribution of such products and byproducts, (ii) a detailed statement of the financial conditions of each such demonstration facility, (iii) data concerning the environmental, community, and health and safety impacts of each such facility and the actions taken or planned to prevent or mitigate such impacts, (iv) the administrative and other costs incurred by the Secretary and other Federal agencies in carrying out this program, and (v) such other data as may be helpful in keeping Congress and the public fully and currently informed about the program authorized by this section; and

(B) the activities of the fund referred to in subsection (n) of this section during the preceding fiscal year, including a statement of the amount and source of fees or other moneys, property, or assets deposited into the funds, all payments made, the notes or other obligations issued by the Secretary, and such other data as may be appropriate.

(3) The annual reports required by this subsection shall be a part of the annual report required by section 5914 of this title, except that the matters required to be reported by this subsection shall be clearly set out and identified in such annual reports. Such reports and the one-hundred-and-eighty-day report required in paragraph (1) of this subsection shall be transmitted to the Speaker of the House of Representatives and the House Committee on Science, Space, and Technology and to the President of the Senate and the Committee on Energy and Natural Resources of the Senate.

(m) Congressional finalization of guarantee, etc., subsequent to report to Congressional committees; scope of authority

Prior to issuing any guarantee or commitment to guarantee or cooperative agreement pursuant to subsection (b) or subsection (y) of this section the Secretary shall submit to the Committee on Science, Space, and Technology of the House of Representatives and the Committee on Energy and Natural Resources of the Senate a full and complete report on the proposed demonstration facility and such guarantee, agreement, or contract. Such guarantee, commitment to guarantee, cooperative agreement, or contract shall not be finalized under the authority granted by this section prior to the expiration of ninety calendar days (not including any day on which either House of Congress is not in session because of an adjournment of more than three calendar days to a day certain) from the date on which such report is received by such committees: Provided, That, where the cost of a demonstration facility to be assisted with a guarantee or cooperative agreement pursuant to subsection (b) or subsection (y) of this section exceeds $50,000,000 such guarantee or commitment to guarantee or cooperative agreement shall not be finalized unless (1) the making of such guarantee or commitment or agreement is specifically authorized by legislation hereafter enacted by the Congress or (2) both Houses pass a resolution stating in substance that the Congress favors the making of such guarantee or commitment or agreement.

(n) Revolving fund; creation; funding; payments and transfers to general fund of Treasury; issuance, redemption, etc., of notes or obligations; applicability to direct loans or planning grants

(1) There is hereby created within the Treasury a separate fund (hereafter in this section called the "fund") which shall be available to the Secretary without fiscal year limitation as a revolving fund for the purpose of carrying out the program authorized by subsection (b)(1) of this section and subsections (g), (h), (k), and (y) of this section.

(2) There are hereby authorized to be appropriated to the fund for administrative expenses from time to time such amounts as may be necessary to carry out the purposes of the applicable provisions of this section, including, but not limited to, the payments of interest and principal and the payment of interest differentials and redemption of debt. All amounts received by the Secretary as interest payments or repayments of principal on loans which are guaranteed under this section, fees, and any other moneys, property, or assets derived by him from operations under this section shall be deposited in the fund.

(3) All payments on obligations, appropriate expenses (including reimbursements to other Government accounts), and repayments pursuant to operations of the Secretary under this section shall be paid from the fund subject to appropriations. If at any time the Secretary determines that moneys in the fund exceed the present and reasonably foreseeable future requirements of the fund, such excess shall be transferred to the general fund of the Treasury.

(4) If at any time the moneys available in the fund are insufficient to enable the Secretary to discharge his responsibilities as authorized by subsections (b)(1), (g), (h), and (y) of this section, the Secretary shall issue to the Secretary of the Treasury notes or other obligations in such forms and denominations, bearing such maturities, and subject to such terms and conditions as may be prescribed by the Secretary of the Treasury. Redemption of such notes or obligations shall be made by the Secretary from appropriations or other moneys available under paragraph (2) of this subsection for loan guarantees authorized by subsection (b)(1) of this section and subsections (g), (h), (k), and (y) of this section. Such notes or other obligations shall bear interest at a rate determined by the Secretary of the Treasury, which shall be not less than a rate determined by taking into consideration the average market yield on outstanding marketable obligations of the United States of comparable maturities during the month preceding the issuance of the notes or other obligations. The Secretary of the Treasury may at any time sell any of the notes or other obligations acquired by him under this subsection.

(5) The provisions of this subsection do not apply to direct loans or planning grants made under subsection (k) of this section.

(o) Definitions

For the purposes of this section, the term-

(1) "State" means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, the Virgin Islands, American Samoa, any territory or possession of the United States,

(2) "United States" means the several States, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, and American Samoa,

(3) "borrower" or "applicant" shall include any individual, firm, corporation, company, partnership, association, society, trust, joint venture, joint stock company, or other non–Federal entity, and

(4) "biomass" shall include, but is not limited to, animal and timber waste, municipal and industrial waste, sewage, sludge, and oceanic and terrestrial crops.

(p) Citizenship or nationality requirements for applicants; waiver

(1) An applicant seeking a guarantee or cooperative agreement under subsection (b) or subsection (y) of this section must be a citizen or national of the United States. A corporation, partnership, firm, or association shall not be deemed to be a citizen or national of the United States unless the Secretary determines that it satisfactorily meets all the requirements of section 802 of title 46, Appendix, for determining such citizenship, except that the provisions in subsection (a) of such section 802 concerning (A) the citizenship of officers or directors of a corporation, and (B) the interest required to be owned in the case of a corporation, association, or partnership operating a vessel in the coastwise trade, shall not be applicable.

(2) The Secretary, in consultation with the Secretary of State, may waive such requirements in the case of a corporation, partnership, firm, or association, controlling interest in which is owned by citizens of countries which are participants in the International Energy Agreement.

(q) Transfer of part of program to other agency or authority

No part of the program authorized by this section shall be transferred to any other agency or authority, except pursuant to Act of Congress enacted after February 25, 1978.

(r) Statutory provisions applicable to inventions

Inventions made or conceived in the course of or under a guarantee authorized by this section shall be subject to the title and waiver requirements and conditions of section 5908 of this title.

(s) Compliance by persons receiving financial assistance with Federal and State environmental, etc., laws and regulations, and licensing requirements

Nothing in this section shall be construed as affecting the obligations of any person receiving financial assistance pursuant to this section to comply with Federal and State environmental, land use, water, and health and safety laws and regulations or to obtain applicable Federal and State permits, licenses, and certificates.

(t) Availability of information; procedures applicable; scope of disclosure; persons to whom disclosure may be made; "person" defined

The information maintained by the Secretary under this section shall be made available to the public subject to the provision of section 552 of title 5 and section 1905 of title 18 and to other Government agencies in a manner that will facilitate its dissemination: Provided, That upon a showing satisfactory to the Secretary by any person that any information, or portion thereof obtained under this section by the Secretary directly or indirectly from such person would, if made public, divulge (1) trade secrets or (2) other proprietary information of such person, the Secretary shall not disclose such information and disclosure thereof shall be punishable under section 1905 of title 18: Provided further, That the Secretary shall, upon request, provide such information to (A) any delegate of the Secretary for the purpose of carrying out this chapter, and (B) the Attorney General, the Secretary of Agriculture, the Secretary of the Interior, the Federal Trade Commission, the Environmental Protection Agency, the General Accounting Office, other Federal agencies, or heads of other Federal agencies, when necessary to carry out their duties and responsibilities under this and other statutes, but such agencies and agency heads shall not release such information to the public. This section is not authority to withhold information from Congress, or from any committee of Congress upon request of the Chairman. For the purposes of this subsection, the term "person" shall include the borrower.

(u) Scope of exercise of statutory authorities

Notwithstanding any other provision of this section, the authority provided in this section to make guarantees or commitments to guarantee or enter into cooperative agreements under subsection (b)(1) or subsection (y) of this section, to make guarantees or commitments to guarantees, or to make loans or grants, under subsection (k) of this section, to make contracts under subsection (h) of this section, and to use fees and receipts collected under subsections (b), (j), and (y) of this section, and the authorities provided under subsection (n) of this section shall be effective only to the extent provided, without fiscal year limitation, in appropriation Acts enacted after February 25, 1978.

(v) Nondiscrimination requirements; scope of exemption from requirements for Indian tribes

No person in the United States shall on the grounds of race, color, religion, national origin, or sex, be excluded from participation in, be denied benefits of, or be subjected to discrimination under any program or activity funded in whole or in part with assistance made available under this section: Provided, That Indian tribes are exempt from the operation of this subsection: Provided further, That such exemption shall be limited to the planning and provision of public facilities which are located on reservations and which are provided for members of the affected Indian tribes as the primary beneficiaries.

(w) Participation by small business concerns in program

In carrying out his functions under this section, the Secretary shall provide a realistic and adequate opportunity for small business concerns to participate in the program to the optimum extent feasible consistent with the size and nature of each project.

(x) Recordkeeping requirements; audit by Comptroller General; labor standards at construction facilities

(1) Recipients of financial assistance under this section shall keep such records and other pertinent documents, as the Secretary shall prescribe by regulation, including, but not limited to, records which fully disclose the disposition of the proceeds of such assistance, the cost of any facility, the total cost of the provision of public facilities for which assistance was used and such other records as the Secretary may require to facilitate an effective audit. The Secretary and the Comptroller General of the United States, or their duly authorized representative shall have access, for the purpose of audit, to such records and other pertinent documents.

(2) All laborers and mechanics employed by contractors or subcontractors in the performance of construction work financed in whole or in part with assistance under this section shall be paid wages at rates not less than those prevailing on similar construction in the locality as determined by the Secretary of Labor in accordance with the Davis-Bacon Act, as amended (40 U.S.C. 276a-276a–5). The Secretary of Labor shall have, with respect to such labor standards, the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (15 F.R. 3176; 64 Stat. 1267) and section 276c of title 40.

(y) Issuance of obligations for synthetic fuel conversion facilities and municipal organic waste energy generation facilities; rules and regulations; statutory provisions inapplicable; limitation on outstanding indebtedness; additional procedural requirements and terms and conditions applicable

(1) The Secretary is authorized in accordance with such rules and regulations as he shall prescribe after consultation with the Secretary of the Treasury, to guarantee and to make commitments to guarantee the payment of interest on, and the principal balance of, bonds, debentures, notes, and other obligations issued by or on behalf of any borrower for the purpose of (A) financing the construction and startup costs of demonstration facilities for the conversion of municipal or industrial waste, sewage sludge, or other municipal organic wastes into synthetic fuels, and (B) financing the construction and startup costs of demonstration facilities to generate desirable forms of energy (including synthetic fuels) from municipal or industrial waste, sewage sludge, or other municipal organic waste. With respect to a guarantee or a commitment to guarantee authorized by this subsection; the following subsections of this section shall not apply: (b)(1), (b)(5), (c)(2), (c)(5), (c)(6), (c)(7), (c)(8), (c)(9), (e)(3), (j), (k), and (q).

(2) In the case where the Secretary seeks to guarantee or to make commitments to guarantee as provided by this subsection he is authorized to incur an outstanding indebtedness which at no time shall exceed $300,000,000.

(3) The Secretary shall apply the following provisions thereto:

(A) With respect to any demonstration facility for the conversion of solid waste (as the term is defined in the Resource Conservation and Recovery Act (42 U.S.C. 6903)), the Secretary, prior to issuing any guarantee under this section, must be in receipt of a certification from the Secretary of the Environmental Protection Agency and any appropriate State or areawide solid waste management planning agency that the proposed application for a guarantee is consistent with any applicable suggested guidelines published pursuant to section 1008(a) of the Resource Conservation and Recovery Act [42 U.S.C. 6907(a)], and any applicable State or regional solid waste management plan.

(B) The amount guaranteed shall not exceed 75 per centum of the total cost of the commercial demonstration facility, as determined by the Secretary: Provided, That the amount guaranteed may not exceed 90 per centum of the total cost of the commercial demonstration facility during the period of construction and startup.

(C) The maximum maturity of the obligation shall not exceed thirty years, or 90 per centum of the projected useful economic life of the physical assets of the commercial demonstration facility covered by the guarantee, whichever is less, as determined by the Secretary.

(D) The Secretary shall charge and collect fees for guarantees of obligations in amounts sufficient in the judgment of the Secretary to cover the applicable administrative costs and probable losses on guaranteed obligations, but in any event not to exceed 1 per centum per annum of the outstanding indebtedness covered by the guarantee.

(E) No part of the program authorized by this section shall be transferred to any other agency or authority, except pursuant to Act of Congress enacted after February 25, 1978: Provided, That project agreements entered into pursuant to this section for any commercial demonstration facility for the conversion or bioconversion of solid waste (as that term is defined in the Resource Conservation and Recovery Act [42 U.S.C. 6901 et seq.]) shall be administered in accordance with the May 7, 1976, Interagency Agreement between the Environmental Protection Agency and the Energy Research and Development Administration on the Development of Energy From Solid Wastes, and provided specifically that in accordance with this agreement (i) for those energy-related projects of mutual interest, planning will be conducted jointly by the Environmental Protection Agency and the Secretary, following which project responsibility will be assigned to one agency; (ii) energy-related projects for recovery of synthetic fuels or other forms of energy from solid waste shall be the responsibility of the Secretary; and (iii) the Environmental Protection Agency shall retain responsibility for the environmental, economic, and institutional aspects of solid waste projects and for assurance that such projects are consistent with any applicable suggested guidelines pursuant to section 1008 of the Resource Conservation and Recovery Act of 1976, as amended [42 U.S.C. 6907], and any applicable State or regional solid waste management plan.

(F) With respect to any obligation which is issued after February 25, 1978, by, or in behalf of, any State, political subdivision, or Indian tribe and which is either guaranteed under, or supported by taxes levied by said issuer which are guaranteed under, this section, the interest paid on such obligation and received by the purchaser thereof (or the purchaser's successor in interest) shall be included in gross income for the purpose of chapter 1 of title 26: Provided, That the Secretary shall pay to such issuer out of the fund established by this section such portion of the interest on such obligations, as determined by the Secretary of the Treasury to be appropriate after taking into account current market yields (i) on obligations of said issuer, if any, and (ii) on other obligations with similar terms and conditions the interest on which is not so included in gross income for purposes of chapter 1 of title 26, and in accordance with, such terms and conditions as the Secretary of the Treasury shall require.

(Pub. L. 93–577, §19, as added Pub. L. 95–238, title II, §207(b), Feb. 25, 1978, 92 Stat. 61 ; amended Pub. L. 96–470, title I, §109, Oct. 19, 1980, 94 Stat. 2239 ; Pub. L. 99–514, §2, Oct. 22, 1986, 100 Stat. 2095 ; Pub. L. 103–437, §15(c)(9), Nov. 2, 1994, 108 Stat. 4592 ; Pub. L. 104–316, title I, §122(o), Oct. 19, 1996, 110 Stat. 3838 .)

References in Text

The Federal Property and Administrative Services Act of 1949, as amended, referred to in subsec. (g)(2), is act June 30, 1949, ch. 288, 63 Stat. 377 , as amended. Provisions of that act relating to disposal of government property are classified to chapter 10 (§471 et seq.) of Title 40, Public Buildings, Property, and Works. For complete classification of this Act to the Code, see Short Title note set out under section 471 of Title 40 and Tables.

The Davis-Bacon Act, as amended, referred to in subsec. (x)(2), is act Mar. 3, 1931, ch. 411, 46 Stat. 1494 , as amended, which is classified generally to sections 276a to 276a–5 of Title 40. For complete classification of this Act to the Code, see Short Title note set out under section 276a of Title 40 and Tables.

Reorganization Plan Numbered 14 of 1950, referred to in subsec. (x)(2), is set out in the Appendix to Title 5, Government Organization and Employees.

The Resource Conservation and Recovery Act of 1976, referred to in subsec. (y)(3)(A), (E), is Pub. L. 94–580, Oct. 21, 1976, 90 Stat. 2796 , as amended, which is classified generally to chapter 82 (§6901 et seq.) of this title. For complete classification of this Act to the Code, see Short Title of 1976 Amendment note set out under section 6901 of this title and Tables.

Codification

The words "the Federal Energy Administration," after "the Environmental Protection Agency," in subsec. (l)(1)(B) and after "the Federal Trade Commission," in subsec. (t)(B), and the words "the Federal Power Commission," after "the Environmental Protection Agency," in subsec. (t)(B) omitted from text in view of termination of Federal Energy Administration and Federal Power Commission and transfer of their functions (with certain exceptions) to Secretary of Energy pursuant to sections 301, 703, and 707 of Pub. L. 95–91, Aug. 4, 1977, 91 Stat. 577 , 606, 607, which are classified to sections 7151, 7293, and 7297 of this title. This transfer would result in subsecs. (l)(1)(B) and (t)(B) being redundant in that it would require Secretary of Energy to consult with or provide information to himself. See Transfer of Functions note below.

Another section 19 of Pub. L. 93–577 was classified to section 5918 of this title prior to repeal by Pub. L. 104–106.

Amendments

1996-Subsec. (x)(1). Pub. L. 104–316 struck out subpar. (A) designation before "Recipients of financial" and struck out subpar. (B) which read as follows: "Within 6 months after February 25, 1978, and at 6-month intervals thereafter, the Comptroller General of the United States shall make an audit of recipients of financial assistance under this section. The Comptroller General may prescribe such regulations as he deems necessary to carry out this subparagraph."

1994-Subsecs. (l)(3), (m). Pub. L. 103–437 substituted "Committee on Science, Space, and Technology" for "Committee on Science and Technology".

1986-Subsec. (y)(3)(F). 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.

1980-Subsec. (d). Pub. L. 96–470 struck out subsec. (d) which provided that prior to submitting a report to Congress pursuant to subsec. (m) of this section on each guarantee and cooperative agreement, the Administrator request from the Attorney General and the Chairman of the Federal Trade Commission written views and recommendations concerning the impact of such guarantee, commitment, or agreement on competition and concentration in the production of energy and give due consideration to the views and recommendations received, except that if either official, within 60 days after receipt of such request or at any time prior to the Administrator submitting such report to Congress, recommends against making the proposed guarantee, commitment, or agreement, the proposed guarantee, commitment, or agreement be referred to the President, and the Administrator not do so unless the President determines in writing that the guarantee, commitment, or agreement is in the national interest.

Change of Name

Committee on Science, Space, and Technology of House of Representatives treated as referring to Committee on Science of House of Representatives by section 1(a) of Pub. L. 104–14, set out as a note preceding section 21 of Title 2, The Congress.

Transfer of Functions

"Secretary" and "Secretary's", meaning Secretary of Energy, substituted for "Administrator" and "Administrator's", respectively, meaning Administrator of Energy Research and Development Administration, in text and for "Energy Research and Development Administration" in subsec. (y)(3)(E)(i), (ii) pursuant to sections 301(a), 703, and 707 of Pub. L. 95–91, Aug. 4, 1977, 91 Stat. 577 , 606, 607, which are classified to sections 7151(a), 7293, and 7297 of this title and which terminated Energy Research and Development Administration and transferred its functions and functions of Administrator thereof (with certain exceptions) to Secretary of Energy.

Nonapplicability of Title II of Pub. L. 95–238 to Any Authorization or Appropriation for Military Application of Nuclear Energy, Etc.; Definitions

Nonapplicability of provisions of title II of Pub. L. 95–238 with respect to any authorization or appropriation for any military application of nuclear energy, etc., see section 209 of Pub. L. 95–238, set out as a note under section 5821 of this title.

Section Referred to in Other Sections

This section is referred to in sections 5906, 8837 of this title.

¹ So in original. Probably should be "subsections".