30 U.S.C. § 1141 : US Code - Section 1141: Establishment of loan guaranty program

Search 30 U.S.C. § 1141 : US Code - Section 1141: Establishment of loan guaranty program

(a) Congressional declaration of policy
It is the policy of the Congress to encourage and assist in the
commercial development of practicable means to produce useful
energy from geothermal resources with environmentally acceptable
processes. Accordingly, it is the policy of the Congress to
facilitate such commercial development by authorizing the Chairman
of the Project to designate an appropriate Federal agency to
guarantee loans for such purposes.
(b) Authorization of heads of designated agencies to guarantee
loans
In order to encourage the commercial production of energy from
geothermal resources, the head of the designated agency is
authorized to, in consultation with the Secretary of the Treasury,
guarantee, and to enter into commitments to guarantee, lenders
against loss of principal or interest on loans made by such lenders
to qualified borrowers for the purposes of -
(1) the determination and evaluation of the resource base;
(2) research and development with respect to extraction and
utilization technologies;
(3) acquiring rights in geothermal resources;
(4) development, construction, and operation of facilities for
the demonstration or commercial production of energy using
geothermal resources; or
(5) construction and operation of a new commercial,
agricultural, or industrial structure or facility or modification
and operation of an existing commercial, agricultural, or
industrial structure or facility, when geothermal hot water or
steam is to be used within or by such structure or facility, or
modification thereto, for the purposes of space heating or
cooling, industrial or agricultural processes, onsite generation
of electricity for use other than for sale or resale in commerce,
other commercial applications, or combinations of applications
separately eligible under this subchapter for loan guarantee
assistance.
(c) Extent of guarantee
Any guaranty under this subchapter shall apply only to so much of
the principal amount of any loan as does not exceed 75 percent of
the aggregate cost of the project with respect to which the loan is
made, except that any guarantee made for a loan to an electric,
housing, or other cooperative, or to a municipality (as defined in
section 796(7) of title 16), may apply to so much of the principal
amount of the loan as does not exceed 90 percent of the aggregate
cost of the project. In determining the aggregate cost of a project
for purposes of the preceding sentence, there shall be excluded the
cost of constructing electrical transmission lines to the extent
that the cost of constructing such lines exceeds 25 percent of the
aggregate cost of the project (as determined without regard to this
sentence); except that the Secretary may waive or limit the
application of this sentence with respect to any project located in
the State of Hawaii upon a finding that such project is remote from
the area of primary consumption, that a transmission line is
required before the geothermal reservoir can be developed, and that
the particular transmission line involved will be used for more
than the plant which is the subject of the loan guarantee. In the
case of a guaranty for the purposes specified in subsection (b)(5)
of this section, the aggregate cost of the project shall be deemed
to be that portion of the total cost of construction and operation
which is directly related to the utilization of geothermal energy
within the structure or facility in question, except that the
aggregate cost of the project with respect to which the loan is
made may be the total cost including construction and operation in
cases where the facility or structure has been located near a
geothermal energy resource predominantly for the purpose of
utilizing geothermal energy, or as determined by the Secretary of
Energy the economic viability of the project is substantially
dependent upon the performance of the geothermal reservoir.
(d) Terms and conditions of guaranties
Loan guaranties under this subchapter shall be on such terms and
conditions as the head of the designated agency determines, except
that a guaranty shall be made under this subchapter only if -
(1) the loan bears interest at a rate not to exceed such annual
per centum on the principal obligation outstanding as the head of
the designated agency determines to be reasonable, taking into
account the range of interest rates prevailing in the private
sector for similar loans and risks by the United States;
(2) the terms of such loan require full repayment over a period
not to exceed thirty years, or the useful life of any physical
asset to be financed by such loan, whichever is less (as
determined by the head of the designated agency);
(3) in the judgment of the head of the designated agency, the
amount of the loan (when combined with amounts available to the
qualified borrower from other sources) will be sufficient to
carry out the project; and
(4) in the judgment of the head of the designated agency, there
is reasonable assurance of repayment of the loan by the qualified
borrower of the guaranteed indebtedness.
(e) Limitations on amount of guaranty; exceptions; procedures
applicable
The amount of the guaranty for any loan for a project shall not
exceed $100,000,000: Provided, That in the case of a guaranty under
subsection (b)(5) of this section, the amount of the guaranty for
any loan for a project shall not exceed $50,000,000 and the amount
of the guaranty for any combination of loans for any single
qualified borrower shall not exceed $200,000,000, unless the
Secretary of Energy determines in writing that a guaranty in excess
of these amounts is in the national interest. Any such
determination shall be submitted to the Speaker of the House and
the Committee on Science, Space, and Technology of the House of
Representatives, and to the President of the Senate and the
Committee on Energy and Natural Resources of the Senate,
accompanied by a full and complete report on the proposed project
and guaranty. The proposed guaranty or commitment to guarantee
shall not be finalized under authority granted by this chapter
prior to the expiration of thirty calendar days (not including any
date on which either House of Congress is not in session) from the
date on which such report is received by the Speaker of the House
and the President of the Senate.
(f) "Qualified borrower" defined
As used in this subchapter, the term "qualified borrower" means
any public or private agency, institution, association,
partnership, corporation, political subdivision, or other legal
entity which (as determined by the head of the designated agency)
has presented satisfactory evidence of an interest in geothermal
resources and is capable of performing research or completing the
development and production of energy in an acceptable manner.
(g) Payment of interest; criteria
With respect to any guaranty 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
subchapter and for which the interest paid on such obligation and
received by the purchaser thereof is included in gross income for
the purposes of chapter 1 of title 26, the Secretary of Energy
shall pay to such issuer out of the fund established by this
subchapter such portion of the interest on such obligations, as
determined by the Secretary of Energy, in consultation with the
Secretary of the Treasury, to be appropriated after taking into
account current market yields (1) on obligations of such issuer, if
any, or (2) 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 Energy shall require in
consultation with the Secretary of the Treasury.
(h) Pledge of full faith and credit of United States to guaranties
The full faith and credit of the United States is pledged to the
payment of all guaranties issued under this subchapter with respect
to principal and interest.
(i) Fees for guaranties; amount, collection, etc.
The Secretary of Energy shall charge and collect fees for
guaranties in amounts sufficient in his judgment to cover
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 each guaranty. Fees
collected under this subsection shall be deposited in the fund
established by this subchapter.
(j) Minimization of capital market impact of guaranties
The Secretary of the Treasury shall insure to the maximum extent
feasible that the timing, interest rate, and substantial terms and
conditions of any guaranty exceeding $25,000,000 will have the
minimum possible impact on the capital markets of the United
States, taking into account other Federal direct and indirect
commercial securities activities.