Sec. 5004. Guarantees
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The Administrator may make a guarantee under this title for an obligation for construction of a large water infrastructure project in accordance with the requirements of this section. The Administrator shall establish criteria for selecting among large water infrastructure projects in making guarantees under this title. In establishing selection criteria under this paragraph, the Administrator shall include consideration of the following: The extent to which the project is nationally or regionally significant.
The creditworthiness of the project, including a determination by the Administrator that any financing has appropriate features to ensure repayment. The extent to which the project uses new technologies that enhance the environmental benefits of the project. The cost of a guarantee under this title. The extent to which the project helps restore, maintain, or protect the environment. The Administrator may not utilize more than 10 percent of the funds made available under this title for a fiscal year to make guarantees under this section during that fiscal year.
The Administrator may make a guarantee for a large water infrastructure project under this title on such terms and conditions (including requirements for audits) as the Administrator determines appropriate. The Administrator shall require a borrower to use a rate covenant, coverage requirement, or similar security feature adequate to ensure repayment of the obligation. The Administrator may make a guarantee under this title only if the Administrator determines that there is a high probability of repayment by the borrower of the principal and interest on the obligation.
The Administrator may make a guarantee under this title only if the amount of the obligation does not exceed 75 percent of the total cost of the large water infrastructure project, as estimated at the time at which the guarantee is issued. The Administrator may make a guarantee under this title only if the Administrator determines that the amount of the obligation, when combined with amounts available from other sources, will be sufficient to carry out the project. The Administrator may make a guarantee under this title only if the guarantee is not subordinate to other financing.
The Administrator may make a guarantee under this title only if the Administrator determines that the interest rate on the obligation is appropriate, taking into account the prevailing rate of interest in the private sector for similar obligations. The Administrator may make a guarantee under this title only if— repayment of the obligation is required over a period not to exceed the lesser of— 35 years; or 90 percent of the projected useful life of the large water infrastructure project to be financed by the obligation (as determined by the Administrator); and payments on the obligation are scheduled to commence not later than 5 years after the date of substantial completion of the large water infrastructure project.
The Administrator may make a guarantee for a large water infrastructure project under this title only if the owner or operator of such project commits to develop and implement a fiscal sustainability plan that meets the requirements of section 603(d)(1)(E) of the Federal Water Pollution Control Act, as added by this Act. The Administrator may make a guarantee for a large water infrastructure project under this title only if such project is on a State priority list under section 603(g) of the Federal Water Pollution Control Act ( 33 U.S.C. 1383(g) ), as amended by this Act.
The requirements of sections 211, 511(c)(1), and 513 of the Federal Water Pollution Control Act ( 33 U.S.C. 1291 , 1371(c)(2), and 1372) apply to the construction of a large water infrastructure project carried out in whole or in part with financing made available through an obligation guaranteed under this title in the same manner as treatment works for which grants are made available under the Federal Water Pollution Control Act. If a borrower defaults on an obligation guaranteed under this title (as defined in regulations promulgated by the Administrator and specified in the guarantee contract), the holder of the guarantee shall have the right to demand payment of the unpaid amount from the Administrator.
Within such period as may be specified in the guarantee or related agreements, the Administrator shall pay to the holder of a guarantee the unpaid interest on, and unpaid principal of, the obligation guaranteed under this title as to which the borrower has defaulted, unless the Administrator finds that there was no default by the borrower in the payment of interest or principal or that the default has been remedied. Nothing in this subsection precludes any forbearance by the holder of a guarantee for the benefit of the borrower which may be agreed upon by the parties to the obligation and approved by the Administrator.
If the Administrator makes a payment under paragraph (1), the Administrator shall be subrogated to the rights of the holder of the guarantee as specified in the guarantee or related agreements. The rights of the Administrator, with respect to any property acquired pursuant to a guarantee or related agreements, shall be superior to the rights of any other person with respect to the property. With respect to any obligation guaranteed under this title, the Administrator may enter into a contract to pay, and pay, a holder of the guarantee, 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 Administrator finds that— the borrower is unable to meet the payments and is not in default; it is in the public interest to permit the borrower to continue to pursue the purposes of the project; 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; and the State or region in which the project is located is experiencing a period of local or regional economic hardship that has affected the borrower's ability to meet the payments.
The amount of the payment that the Administrator is authorized to pay under this subsection shall be no greater than the amount of principal and interest that the borrower is obligated to pay under the obligation. A payment may be made under this subsection only if the borrower agrees to reimburse the Administrator for the payment (including interest) on terms and conditions that are satisfactory to the Administrator. The Administrator shall charge and collect fees from borrowers for guarantees made under this title in amounts the Administrator determines are sufficient to cover the administrative expenses associated with carrying out this title and, as provided in advance in appropriations Acts, use such amounts to cover such expenses.
A borrower shall keep such records and other pertinent documents as the Administrator shall prescribe by regulation, including such records as the Administrator may require to facilitate an effective audit of guarantees made under this title. The Administrator and the Comptroller General of the United States, or their duly authorized representatives, shall have access, for the purpose of audits, to records and other pertinent documents kept under paragraph (1). The full faith and credit of the United States is pledged to the payment of all guarantees made under this title.
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