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U.S. Code as of:
01/19/04
Section 1574b. Federal guarantee for issuance of revenue bonds or other obligations
(a) Application to Secretary of the Interior; contents
When authorized under subsection (b) of section 1574a of this
title, the government of the Virgin Islands may apply to the
Secretary of the Interior (hereinafter referred to as the
"Secretary") for a guarantee of any issue of bonds or other
obligations authorized to be issued under subsection (a) of section
1574a of this title. Any such application shall contain such
information as the Secretary may prescribe.
(b) Terms and conditions of guarantee or commitment to guarantee;
determination by Secretary of approval
The Secretary is authorized, with the approval of the Secretary
of the Treasury, to guarantee and to enter into commitments to
guarantee, upon such terms and conditions as he may prescribe,
payment of principal and interest on bonds and other obligations
issued by the government of the Virgin Islands under subsection (a)
of section 1574a of this title. No guarantee or commitment to
guarantee shall be made unless the Secretary determines -
(1) that the proceeds of such issue will be used only for
public works or other capital projects, except that $28,000,000
of the guaranteed bonding authority will be used for water
producing and power projects, including maintenance and overhaul
of electrical generating and distribution mechanisms, and
$12,000,000 of the guaranteed bonding authority will be used for
repair and improvements of the water distribution and storage
systems;
(2) taking into account anticipated expenditures by the
government of the Virgin Islands while the bonds or other
obligations forming a part of such issue will be outstanding, all
outstanding obligations of the government of the Virgin Islands
which will mature while the bonds or other obligations forming a
part of such issue will be outstanding, and such other factors as
he deems pertinent, that the revenues expected to be received
under section 7652(b)(3) of title 26 will be sufficient to pay
the principal of, and interest on, the bonds or other obligations
forming a part of such issue;
(3) that credit is not otherwise available on reasonable terms
and conditions and that there is reasonable assurance of
repayment, and
(4) that the maturity of any obligations to be guaranteed does
not exceed thirty years or 90 per centum of the useful life of
the physical assets to be financed by the obligation, whichever
is less as determined by the Secretary.
(c) Administrative costs; deposit of fees
The Secretary shall charge and collect fees in amounts sufficient
in his judgment to cover the costs of administering this section.
Fees collected under this subsection shall be deposited in the
revolving fund created under subsection (g) of this section.
(d) Conclusiveness and incontestability; pledge of full faith and
credit
Any guarantee made by the Secretary shall be conclusive evidence
of the eligibility of the obligation for such guarantee, and the
validity of any guarantee so made shall be incontestable, except
for fraud or material misrepresentation, in the hands of the holder
of the guaranteed obligation. Such guarantee shall constitute a
pledge of the full faith and credit of the United States for such
obligation.
(e) Interest on guaranteed obligations taxable
The interest on any obligation guaranteed under this section
shall be included in gross income for purposes of chapter 1 of the
Internal Revenue Code of 1986 [26 U.S.C. 1 et seq.].
(f) Maximum amount guaranteed; time limitations on commitments to
guarantee, obligation of guaranteed but unobligated funds, and
repayment of unobligated proceeds of bonds or other obligations
The aggregate principal amount of obligations which may be
guaranteed under this Act shall not exceed $101,000,000. No
commitment to guarantee may be issued by the Secretary, and no
guaranteed but unobligated funds may be obligated by the government
of the Virgin Islands after October 1, 1990. After October 1, 1990,
any unobligated proceeds of bonds or other obligations issued by
the government of the Virgin Islands pursuant to this section shall
be repaid immediately by the government of the Virgin Islands to
the lenders with the agreed upon interest. Should there be any
delay in the government of the Virgin Islands' making such
repayment, the Secretary shall deduct the requisite amounts from
moneys under his control that would otherwise be paid to the
government of the Virgin Islands under section 7652(b)(3) of title
26.
(g) Revolving fund; establishment; submission of budget to
Congress; payments; transfers from fund to general fund of
Treasury; issuance and sale of notes or other obligations for
guarantees
(1) There is hereby created within the Treasury a separate fund
(hereinafter referred to as "the fund") which shall be available to
the Secretary without fiscal year limitation as revolving fund for
the purpose of this Act. A business-type budget for the fund shall
be prepared, transmitted to the Congress, considered, and enacted
in the manner prescribed by law (sections 9103 and 9104 of title
31) for wholly owned Government corporations.
(2) All expenses, including reimbursements to other government
accounts, and payments pursuant to operations of the Secretary
under this Act shall be paid from the fund. If at any time the
Secretary determines that moneys in the fund exceed the present and
any reasonably prospective future requirements of the fund, such
excess may be transferred to the general fund of the Treasury.
(3) If at any time the moneys available in the fund are
insufficient to enable the Secretary to discharge his
responsibilities under guarantees under this Act, he 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 which are hereby authorized
for this purpose. Such notes or other obligations shall bear
interest at a rate determined by the Secretary of the Treasury,
which shall not be 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 shall purchase any notes or other
obligations issued hereunder and for that purpose he is authorized
to use as a public debt transaction the proceeds from the sale of
any securities issued under chapter 31 of title 31 and the purposes
for which securities may be issued under that chapter are extended
to include any purchase of such notes or obligations. The Secretary
of the Treasury may at any time sell any of the notes or other
obligations acquired by him under this subsection. All redemptions,
purchases, and sales by the Secretary of the Treasury of such notes
or other obligations shall be treated as public debt transactions
of the United States.
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