§ 2509. — Loan guarantees.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 15USC2509]
TITLE 15--COMMERCE AND TRADE
CHAPTER 52--ELECTRIC AND HYBRID VEHICLE RESEARCH, DEVELOPMENT, AND
DEMONSTRATION
Sec. 2509. Loan guarantees
(a) Congressional policy
It is the policy of the Congress to assist in the introduction into
the Nation's transportation fleet of electric and hybrid vehicles and to
assure that qualified small business concerns and other qualified
borrowers are not excluded from participation in such development due to
lack of adequate capital. Accordingly, it is the policy of the Congress
to provide guarantees of loans made for such purposes.
(b) Encouragement of commercial production; purpose of loans
In order to encourage the commercial production of electric and
hybrid vehicles, the Secretary of Energy is authorized to guarantee, and
to enter into commitments to guarantee, principal and interest on loans
made by lenders to qualified borrowers, primarily small business
concerns, for the purposes of--
(1) research and development related to electric and hybrid
vehicle technology;
(2) prototype development for such vehicles and parts thereof;
(3) construction of capital equipment related to research on,
and development and production of, electric and hybrid vehicles and
components; or
(4) initial operating expenses associated with the development
and production of electric and hybrid vehicles and components.
(c) Maximum amount of loan guarantee
Any guarantee under this section shall apply only to so much of the
principal amount of the loan involved as does not exceed 90 percentum of
the aggregate cost of the activity with respect to which the loan is
made.
(d) Terms and conditions of guarantee
Loan guarantees under this section shall be on such terms and
conditions as the Secretary of Energy determines, except that a
guarantee shall be made under this section only if--
(1) the loan bears interest at a rate not to exceed such annual
percent on the principal obligation outstanding as the Secretary of
Energy 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 15 years;
(3) in the judgment of the Secretary of Energy, the amount of
the loan (when combined with amounts available to the qualified
borrower from other sources) will be sufficient to carry out the
activity with respect to which the loan is made;
(4) in the judgment of the Secretary of Energy, there is
reasonable assurance of repayment of the loan by the qualified
borrower; and
(5) no loan shall be guaranteed by the Secretary of Energy under
subsection (b) of this section unless the Secretary of Energy finds
that no other reasonable means of financing or refinancing is
reasonably available to the applicant.
(e) Maximum guarantee per loan; maximum of aggregate guarantees;
Electric and Hybrid Vehicle Development Fund; establishment,
funding, etc.
(1) The amount of the guarantee of any loan shall not exceed
$3,000,000, unless the Secretary of Energy finds that a higher guarantee
level for specific loan guarantees is necessary in order to carry out
the purposes of this chapter. If the Secretary of Energy makes such
finding, he shall immediately report that finding to the Speaker of the
House of Representatives, the President of the Senate, the Committee on
Science, Space, and Technology of the House of Representatives, and the
Committee on Commerce, Science, and Transportation of the Senate.
(2) The aggregate amount of guarantees outstanding under this
section at any one time shall not exceed $60,000,000.
(3)(A) There is established in the Treasury of the United States an
Electric and Hybrid Vehicle Development Fund (hereinafter in this
paragraph referred to as the ``fund''), which shall be available to the
Secretary of Energy for carrying out the loan guarantee and principal
and interest assistance program authorized by this chapter, including
the payment of administrative expenses incurred in connection therewith.
Moneys in the fund not needed for current operations may, with the
approval of the Secretary of the Treasury, be invested in bonds or other
obligations of, or guaranteed by, the United States.
(B) There shall be paid into the fund such part of the amounts
appropriated pursuant to section 2514 of this title as the Secretary of
Energy deems necessary to carry out the purposes of this chapter and
such amounts as may be returned to the United States pursuant to
subsection (g) of this section, and the amounts in the fund shall remain
available until expended, except that after the expiration of the 7-year
period established by subsection (h) of this section such amounts in the
fund as are not required to secure outstanding guarantee obligations
shall be paid into the general fund of the Treasury.
(C) If at any time the moneys available in the fund are insufficient
to enable the Secretary of Energy to discharge his responsibilities
under this section, 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. This borrowing authority
shall be effective only to such extent or in such amounts as are
specified in appropriation Acts. Such authority shall be without fiscal
year limitation. Redemption of such notes or obligations shall be made
by the Secretary of Energy from appropriations or other moneys available
under this chapter. 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.
(D) Business-type financial reports covering the operations of the
fund shall be submitted to the Congress by the Secretary of Energy
annually upon the completion of the appropriate accounting period.
(f) Qualified borrower
As used in this section, the term ``qualified borrower'' means any
partnership, corporation, or other legal entity which (as determined by
the Secretary of Energy) has presented satisfactory evidence of an
interest in electric or hybrid vehicle technology and is capable of
performing research or completing the development and production of
electric or hybrid vehicles or any components thereof in an acceptable
manner.
(g) Payment of principal and interest; default; recovery of losses
(1) With respect to any loan guaranteed pursuant to this section,
the Secretary of Energy is authorized to enter into a contract to pay,
and to pay, the lender for and on behalf of the borrower the principal
and interest charges which become due and payable on the unpaid balance
of such loan if the Secretary of Energy finds--
(A) that the borrower is unable to meet principal and interest
charges, that it is in the public interest to permit the borrower to
continue to pursue the purposes of the project, and that the
probable net cost to the Federal Government in paying such principal
will be less than that which would result in the event of a default;
and
(B) that the amount of such principal and interest charges which
the Secretary of Energy is authorized to pay shall be no greater
than the amount of principal and interest which the borrower is
obligated to pay under the loan agreement.
(2) In the event of any default by a qualified borrower on a
guaranteed loan, the Secretary of Energy is authorized to make payment
in accordance with the guarantee, and the Attorney General shall take
such action as may be appropriate to recover the amounts of such
payments (including any payment of principal and interest under
paragraph (1)) from such assets of the defaulting borrower as are
associated with the activity with respect to which the loan was made or
from any other surety included in the terms of the guarantee.
(h) Seven year limitation
No loan guarantee shall be made, or interest assistance contracts
entered into, pursuant to this section, after the expiration of the 7-
year period following September 17, 1976.
(i) Citizenship of applicant; corporations; waiver
An applicant seeking a guarantee under this section must be a
citizen or national of the United States. A corporation, partnership,
firm, or association shall not be deemed to be a citizen or national of
the United States unless the Secretary of Energy determines that it
satisfactorily meets all the requirements of sections 802 and 803 of
title 46, Appendix, for determining such citizenship, except that the
provisions in section 802(a) of title 46, Appendix, concerning (1) the
citizenship of officers or directors of a corporation, and (2) the
interest required to be owned in the case of a corporation, association,
or partnership operating a vessel in the coastwise trade, shall not be
applicable. The Secretary of Energy, in consultation with the Secretary
of State, may waive such requirements in the case of a corporation,
partnership, firm, or association, controlling interest in which is
owned by citizens of countries which are participants in the
International Energy Agreement.
(j) Pledge of full faith and credit of United States
The full faith and credit of the United States is pledged to the
payment of all obligations incurred under this section.
(Pub. L. 94-413, Sec. 10, Sept. 17, 1976, 90 Stat. 1267; Pub. L. 95-91,
title III, Sec. 301(a), Aug. 4, 1977, 91 Stat. 577; Pub. L. 95-238,
title VI, Sec. 603, Feb. 25, 1978, 92 Stat. 93; Pub. L. 103-437,
Sec. 5(d)(2), Nov. 2, 1994, 108 Stat. 4582.)
Codification
In subsec. (e)(3)(C), ``chapter 31 of title 31'' and ``that
chapter'' substituted for ``the Second Liberty Bond Act, as amended''
and ``that Act'', respectively, on authority of Pub. L. 97-258,
Sec. 4(b), Sept. 13, 1982, 96 Stat. 1067, the first section of which
enacted Title 31, Money and Finance.
Amendments
1994--Subsec. (e)(1). Pub. L. 103-437 substituted ``Committee on
Science, Space, and Technology'' for ``Committee on Science and
Technology'' and ``Committee on Commerce, Science, and Transportation''
for ``Committee on Commerce''.
1978--Subsec. (e)(3). Pub. L. 95-238, Sec. 603(a)(1), added par.
(3).
Subsec. (g). Pub. L. 95-238, Sec. 603(b), inserted provisions
relating to payment of principal by the Administrator.
Subsec. (h). Pub. L. 95-238, Sec. 603(c), substituted ``7'' for
``5''.
Subsec. (j). Pub. L. 95-238, Sec. 603(a)(2), added subsec. (j).
Change of Name
Committee on Science, Space, and Technology of House of
Representatives treated as referring to Committee on Science of House of
Representatives by section 1(a) of Pub. L. 104-14, set out as a note
preceding section 21 of Title 2, The Congress.
Transfer of Functions
``Secretary of Energy'' substituted for ``Administrator'' in
subsecs. (b), (d), (e)(1), (f), and (i) pursuant to section 301(a) of
Pub. L. 95-91, see Codification note set out under section 2502 of this
title.
Section Referred to in Other Sections
This section is referred to in title 42 section 2473.
