Sec. 11606. LOAN TERMS AND REPAYMENT

758 words·~3 min read·/statute-compilations/comps-13423/sec-11606

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

## SEC. 11606 LOAN TERMS AND REPAYMENT ###

(a)Prerequisites for Assistance Section 502(g)(1) (45 U.S.C. 822(g)(1)) is amended by striking “ 35 years from the date of its execution ” and inserting the following: > “the lesser of— > > > ##### “(A) > > 35 years after the date of substantial completion of the project; or > > > ##### “(B) > > the estimated useful life of the rail equipment or facilities to be acquired, rehabilitated, improved, developed, or established” > . ###

(b)Repayment Schedules Section 502(j) (45 U.S.C. 822(j)) is amended— ####

(1)in paragraph

(1)by striking “the sixth anniversary date of the original loan disbursement” and inserting “5 years after the date of substantial completion”; and ####

(2)by adding at the end the following: > > #### “(3) Deferred payments > > > ##### “(A) In general > > If at any time after the date of substantial completion the obligor is unable to pay the scheduled loan repayments of principal and interest on a direct loan provided under this section, the Secretary, subject to subparagraph (B), may allow, for a maximum aggregate time of 1 year over the duration of the direct loan, the obligor to add unpaid principal and interest to the outstanding balance of the direct loan. > > > ##### “(B) Interest > > A payment deferred under subparagraph

(A)shall— > > > ###### “(i) > > continue to accrue interest under paragraph

(2)until the loan is fully repaid; and > > > ###### “(ii) > > be scheduled to be amortized over the remaining term of the loan. > > > #### “(4) Prepayments > > > ##### “(A) Use of excess revenues > > With respect to a direct loan provided by the Secretary under this section, any excess revenues that remain after satisfying scheduled debt service requirements on the project obligations and direct loan and all deposit requirements under the terms of any trust agreement, bond resolution, or similar agreement securing project obligations may be applied annually to prepay the direct loan without penalty. > > > ##### “(B) Use of proceeds of refinancing > > The direct loan may be prepaid at any time without penalty from the proceeds of refinancing from non-Federal funding sources.” > . ###

(c)Sale of Direct Loans Section 502 (45 U.S.C. 822) is amended by adding at the end the following: > > ### “(k) Sale of Direct Loans > > > #### “(1) In general > > Subject to paragraph

(2)and as soon as practicable after substantial completion of a project, the Secretary, after notifying the obligor, may sell to another entity or reoffer into the capital markets a direct loan for the project if the Secretary determines that the sale or reoffering has a high probability of being made on favorable terms. > > > #### “(2) Consent of obligor > > In making a sale or reoffering under paragraph (1), the Secretary may not change the original terms and conditions of the secured loan without the prior written consent of the obligor.” > . ###

(d)Nonsubordination Section 502 (45 U.S.C. 822) is further amended by adding at the end the following: > > ### “(l) Nonsubordination > > > #### “(1) In general > > Except as provided in paragraph (2), a direct loan provided by the Secretary 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. > > > #### “(2) Preexisting indentures > > > ##### “(A) In general > > The Secretary may waive the requirement under paragraph

(1)for a public agency borrower that is financing ongoing capital programs and has outstanding senior bonds under a preexisting indenture if— > > > ###### “(i) > > the direct loan is rated in the A category or higher; > > > ###### “(ii) > > the direct loan is secured and payable from pledged revenues not affected by project performance, such as a tax-based revenue pledge or a system-backed pledge of project revenues; and > > > ###### “(iii) > > the program share, under this title, of eligible project costs is 50 percent or less. > > > ##### “(B) Limitation > > The Secretary may impose limitations for the waiver of the nonsubordination requirement under this paragraph if the Secretary determines that such limitations would be in the financial interest of the Federal Government.” > .

Connections3 off-index

3 references not yet in our index

45 USC 822(g)(1)
45 USC 822(j)
45 USC 822

Citation graph

cites case law

Sec. 11606

LOAN TERMS AND REPAYMENT

Cite45 USC 822(g)(1)

Cite45 USC 822(j)

Cite45 USC 822

Cites 3Cited by 0 across 0 sources