§ 1142. — Payment of guaranteed obligation by Secretary of Energy.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 30USC1142]
TITLE 30--MINERAL LANDS AND MINING
CHAPTER 24--GEOTHERMAL ENERGY RESEARCH, DEVELOPMENT, AND DEMONSTRATION
SUBCHAPTER II--LOAN GUARANTIES
Sec. 1142. Payment of guaranteed obligation by Secretary of
Energy
(a) Default by borrower and demand by holder of obligation of unpaid
amount; amount of payment by Secretary of Energy; defenses
available; forebearance by holder of obligation
If there is a default by the borrower, as defined in regulations
promulgated by the Secretary of Energy and set forth in the guarantee
contract, the holder of the obligation shall have the right to demand
payment of the unpaid amount from the Secretary of Energy. Within such
period as may be specified in the guarantee or related agreements, the
Secretary of Energy shall pay to the holder of the obligation the unpaid
interest on, and unpaid principal of the guaranteed obligation as to
which the borrower has defaulted, unless the Secretary of Energy finds
that there was no default by the borrower in the payment of interest or
principal or that such default has been remedied. Nothing in this
section shall be construed to preclude any forebearance by the holder of
the obligation for the benefit of the borrower which may be agreed upon
by the parties to the guaranteed obligation and approved by the
Secretary of Energy.
(b) Rights and authorities of Secretary of Energy upon payment
If the Secretary of Energy makes a payment under subsection (a) of
this subsection,\1\ the Secretary of Energy shall be subrogated to the
rights of the recipient of such payment as specified in the guarantee or
related agreements including, where appropriate, the authority
(notwithstanding any other provision of law) to complete, maintain,
operate, lease, or otherwise dispose of any property acquired pursuant
to such guarantee or related agreements, or to permit the borrower,
pursuant to an agreement with the Secretary of Energy, to continue to
pursue the purposes of the project if the Secretary of Energy determines
this to be in the public interest. The rights of the Secretary of Energy
with respect to any property acquired pursuant to such guarantee or
related agreements, shall be superior to the rights of any other person
with respect to such property.
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\1\ So in original. Probably should be ``this section,''.
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(c) Rights and authorities of Attorney General upon default on any
guarantee
In the event of a default on any guarantee under this subchapter,
the Secretary of Energy shall notify the Attorney General, who shall
take such action as may be appropriate to recover the amounts of any
payments made under subsection (a) of this section, including any
payment of principal and interest under subsection (d) of this section,
from such assets of the defaulting borrower as are associated with the
project, or from any other security included in the terms of the
guarantee.
(d) Contracts to pay, and payment, from Geothermal Resources Development
Fund of principal and interest of unpaid balance of obligation;
preconditions
With respect to any obligation guaranteed under this subchapter, the
Secretary of Energy is authorized to enter into a contract to pay, and
to pay, holders of the obligation, for and on behalf of the borrower,
from the Geothermal Resources Development Fund, the principal and
interest payments which become due and payable on the unpaid balance of
such obligation if the Secretary of Energy finds that--
(1) the borrower is unable to meet such payments and is not in
default; it is in the public interest to permit the borrower to
continue to pursue the purposes of such project; and the probable
net benefit to the Federal Government in paying such principal and
interest will be greater than that which would result in the event
of a default;
(2) the amount of such payment 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; and
(3) the borrower agrees to reimburse the Secretary of Energy for
such payment on terms and conditions, including interest, which are
satisfactory to the Secretary of Energy.
(Pub. L. 93-410, title II, Sec. 202, Sept. 3, 1974, 88 Stat. 1087; Pub.
L. 95-91, title III, Sec. 301(a), title VII, Secs. 703, 707, Aug. 4,
1977, 91 Stat. 577, 606, 607; Pub. L. 95-238, title V, Sec. 510, Feb.
25, 1978, 92 Stat. 88.)
Amendments
1978--Subsec. (a). Pub. L. 95-238 substituted provisions relating to
default by the borrower and payment by the Administrator of the
guaranteed amount remaining unpaid upon demand by the holder of the
obligation, for provisions relating to contracts to pay, and payment, by
the head of the designated agency to the lender on behalf of the
borrower of interest charges on the unpaid balance of any guaranteed
loan where the borrower is unable to meet the interest charges and the
amount payable is the same as the amount the borrower would be required
to pay.
Subsec. (b). Pub. L. 95-238 substituted provisions relating to
rights and authorities of the Administrator subsequent to making a
payment under subsec. (a) of this section, for provisions relating to
rights and authorities of the head of the designated agency and the
Attorney General upon payment of the guaranty subsequent to default on a
guaranteed loan.
Subsecs. (c), (d). Pub. L. 95-238 added subsecs. (c) and (d).
Transfer of Functions
``Secretary of Energy'' substituted in text for ``Administrator''
(meaning Administrator of Energy Research and Development
Administration, see section 501(2) of Pub. L. 95-238, title V, Feb. 25,
1978, 92 Stat. 86), pursuant to sections 301(a), 703, and 707 of Pub. L.
95-91, which are classified to sections 7151(a), 7293, and 7297 of Title
42, The Public Health and Welfare, and which terminated Energy Research
and Development Administration and transferred its functions and
functions of Administrator thereof (with certain exceptions) to
Secretary of Energy.
Section Referred to in Other Sections
This section is referred to in section 1145 of this title.
