Sec. 31324. Lines of credit
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/bill/116/hr/2/eh/section-31324A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Subject to paragraphs
(2)through (4), the Assistant Secretary may enter into agreements to make available to one or more obligors lines of credit in the form of direct loans to be made by the Assistant Secretary at future dates on the occurrence of certain events for any project selected under section 31322. The proceeds of a line of credit made available under this section shall be available to pay debt service on project obligations issued to finance eligible project costs, extraordinary repair and replacement costs, operation and maintenance expenses, and costs associated with unexpected Federal or State environmental restrictions. Except as provided in subparagraph (B), before entering into an agreement under this subsection, the Assistant Secretary, in consultation with the Director of the Office of Management and Budget and each rating agency providing a preliminary rating opinion letter under section 31322(b)(2)(A), shall determine an appropriate capital reserve subsidy amount for each line of credit, taking into account the rating opinion letter. Before entering into an agreement under this subsection to make available a line of credit for a small project, the Assistant Secretary, in consultation with the Director of the Office of Management and Budget, shall determine an appropriate capital reserve subsidy amount for each such line of credit, taking into account the alternative documentation provided under section 31322(b)(2)(B) instead of preliminary rating opinion letters provided under section 31322(b)(2)(A). The funding of a line of credit under this section shall be contingent on— the senior obligations of the project receiving an investment-grade rating from 2 rating agencies; or in the case of a small project, the project meeting an alternative standard that the Assistant Secretary shall establish under section 31325 for purposes of this paragraph. A line of credit under this section with respect to a project shall be on such terms and conditions and contain such covenants, representations, warranties, and requirements (including requirements for audits) as the Assistant Secretary determines to be appropriate. The total amount of a line of credit under this section shall not exceed 33 percent of the reasonably anticipated eligible project costs. Any draw on a line of credit under this section shall— represent a direct loan; and be made only if net revenues from the project (including capitalized interest, but not including reasonably required financing reserves) are insufficient to pay the costs specified in subsection (a)(2). The interest rate on a direct loan resulting from a draw on the line of credit shall be not less than the yield on 30-year United States Treasury securities, as of the date of execution of the line of credit agreement. A line of credit issued under this section— shall— be payable, in whole or in part, from— amounts charged to— subscribers of broadband service for such service; or subscribers of any related service provided over the same infrastructure for such related service; user fees; payments owing to the obligor under a public-private partnership; or other dedicated revenue sources that also secure the senior project obligations; and include a coverage requirement or similar security feature supporting the project obligations; and may have a lien on revenues described in subparagraph (A), subject to any lien securing project obligations. The full amount of a line of credit under this section, to the extent not drawn upon, shall be available during the 10-year period beginning on the date of substantial completion of the project. A third-party creditor of the obligor shall not have any right against the Federal Government with respect to any draw on a line of credit under this section. An obligor may assign a line of credit under this section to— one or more lenders; or a trustee on the behalf of such a lender. Except as provided in subparagraph (B), a direct loan under this section shall not be subordinated to the claims of any holder of project obligations in the event of bankruptcy, insolvency, or liquidation of the obligor. The Assistant Secretary shall waive the requirement of subparagraph
(A)for a public agency borrower that is financing ongoing capital programs and has outstanding senior bonds under a preexisting indenture, if— the line of credit— is rated in the A category or higher; or in the case of a small project, meets an alternative standard that the Assistant Secretary shall establish under section 31325 for purposes of this subclause; the BIFIA program loan resulting from a draw on the line of credit is payable from pledged revenues not affected by project performance, such as a tax-backed revenue pledge or a system-backed pledge of project revenues; and the BIFIA program share of eligible project costs is 33 percent or less. If the Assistant Secretary waives the nonsubordination requirement under this subparagraph— the maximum credit subsidy to be paid by the Federal Government shall be not more than 10 percent of the principal amount of the secured loan; and the obligor shall be responsible for paying the remainder of the subsidy cost. The Assistant Secretary may establish fees at a level sufficient to cover all or a portion of the costs to the Federal Government of providing a line of credit under this section. A project that receives a line of credit under this section also shall not receive a secured loan or loan guarantee under section 31323 in an amount that, combined with the amount of the line of credit, exceeds 49 percent of eligible project costs. The Assistant Secretary shall establish repayment terms and conditions for each direct loan under this section based on— the projected cash flow from project revenues and other repayment sources; and the useful life of the infrastructure for the provision of broadband service being financed. All repayments of principal or interest on a direct loan under this section shall be scheduled— to commence not later than 5 years after the end of the period of availability specified in subsection (b)(6); and to conclude, with full repayment of principal and interest, by the date that is 25 years after the end of the period of availability specified in subsection (b)(6).