
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 23, 2000]
[Document not affected by Public Laws enacted between
  January 23, 2000 and December 4, 2001]
[CITE: 42USC6881]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
          CHAPTER 81--ENERGY CONSERVATION AND RESOURCE RENEWAL
 
 SUBCHAPTER III--ENERGY CONSERVATION AND RENEWABLE-RESOURCE ASSISTANCE 
                         FOR EXISTING BUILDINGS
 
Part B--Energy Conservation and Renewable-Resource Obligation Guarantees
 
Sec. 6881. Energy resource and renewable-resource obligation 
        guarantee program
        

(a) Authorization; requirements for guarantees and commitments to 
        guarantee; procedures

    (1) The Secretary may, in accordance with this section and such 
rules as he shall prescribe after consultation with the Secretary of the 
Treasury, guarantee and issue commitments to guarantee the payment of 
the outstanding principal amount of any loan, note, bond, or other 
obligation evidencing indebtedness, if--
        (A) such obligation is entered into or issued by any person or 
    by any State, political subdivision of a State, or agency and 
    instrumentality of either a State or political subdivision thereof; 
    and
        (B) the purpose of entering into or issuing such obligation is 
    the financing of any energy conservation measure or renewable-
    resource energy measure which is to be installed or otherwise 
    implemented in any building or industrial plant owned or operated by 
    the person or State, political subdivision of a State, or agency or 
    instrumentality of either a State or political subdivision thereof, 
    (i) which enters into or issues such obligation, or (ii) to which 
    such measure is leased.

    (2) No guarantee or commitment to guarantee may be issued under this 
subsection with respect to any obligation--
        (A) which is a general obligation of a State; or
        (B) which is entered into or issued for the purpose of financing 
    any energy conservation measure or renewable-resource energy measure 
    which is to be installed or otherwise implemented in a residential 
    building containing 2 or fewer dwelling units.

    (3) Before prescribing rules pursuant to this subsection, the 
Secretary shall consult with the Administrator of the Small Business 
Administration in order to formulate procedures which would assist small 
business concerns in obtaining guarantees and commitments to guarantee 
under this section.

(b) Preconditions for issuance of guarantees and commitments to 
        guarantee

    No obligation may be guaranteed, and no commitment to guarantee an 
obligation may be issued, under subsection (a) of this section, unless 
the Secretary finds that the measure which is to be financed by such 
obligation--
        (1) has been identified by an energy audit to be an energy 
    conservation measure or a renewable-resource energy measure; or
        (2) is included on a list of energy conservation measures and 
    renewable-resource energy measures which the Secretary publishes 
    under section 6325(e)(1) of this title.

Before issuing a guarantee under subsection (a) of this section, the 
Secretary may require that an energy audit be conducted with respect to 
an energy conservation measure or a renewable-resource energy measure 
which is on a list described in paragraph (2) and which is to be 
financed by the obligation to be guaranteed under this section. The 
amount of any obligation which may be guaranteed under subsection (a) of 
this section may include the cost of an energy audit.

(c) Limitations on availability of guarantees; term of guarantees; 
        aggregate outstanding principal amount of obligations of one 
        borrower

    (1) The Secretary shall limit the availability of a guarantee 
otherwise authorized by subsection (a) of this section to obligations 
entered into by or issued by borrowers who can demonstrate that 
financing is not otherwise available on reasonable terms and conditions 
to allow the measure to be financed.
    (2) No obligation may be guaranteed by the Secretary under 
subsection (a) of this section unless the Secretary finds--
        (A) there is a reasonable prospect for the repayment of such 
    obligation; and
        (B) in the case of an obligation issued by a person, such 
    obligation constitutes a general obligation of such person for such 
    guarantee.

    (3) The term of any guarantee issued under subsection (a) of this 
section may not exceed 25 years.
    (4) The aggregate outstanding principal amount which may be 
guaranteed under subsection (a) of this section at any one time with 
respect to obligations entered into or issued by any borrower may not 
exceed $5,000,000.

(d) Limitations on original principal amount guaranteed; revocation of 
        guarantees and commitments to guarantee; conclusiveness of 
        guarantee

    The original principal amount guaranteed under subsection (a) may 
not exceed 90 percent of the cost of the energy conservation measure or 
the renewable-resource energy measure financed by the obligation 
guaranteed under such subsection; except that such amount may not exceed 
25 percent of the fair market value of the building or industrial plant 
being modified by such energy conservation measure or renewable-resource 
energy measure. No guarantee issued, and no commitment to guarantee, 
which is issued under subsection (a) of this section shall be 
terminated, canceled, or otherwise revoked except in accordance with 
reasonable terms and conditions prescribed by the Secretary, after 
consultation with the Secretary of the Treasury, and contained in the 
written guarantee or commitment to guarantee. The full faith and credit 
of the United States is pledged to the payment of all guarantees made 
under subsection (a) of this section. Any such guarantee made by the 
Secretary shall be conclusive evidence of the eligibility of the 
obligation involved for such guarantee, and the validity of any 
guarantee so made shall be incontestable in the hands of a holder of the 
guaranteed obligation except for fraud or material misrepresentation on 
the part of such holder.

(e) Information and assurances required prior to guarantees and 
        commitments to guarantee; maintenance and availability of 
        records; fees to borrowers; exceptions

    (1) No guarantee and no commitment to guarantee may be issued under 
subsection (a) of this section unless the Secretary obtains any 
information reasonably requested and such assurances as are in his 
judgment (after consultation with the Secretary of the Treasury) 
reasonable to protect the interests of the United States and to assure 
that such guarantee or commitment to guarantee is consistent with and 
will further the purpose of this subchapter. The Secretary shall require 
that records be kept and made available to the Secretary or the 
Comptroller General, or any of their duly authorized representatives, in 
such detail and form as are determined necessary to facilitate (A) an 
effective financial audit of the energy conservation measure or 
renewable-resource energy measure investment involved, and (B) an 
adequate evaluation of the effectiveness of this section. The Secretary 
and the Comptroller General, or any of their duly authorized 
representatives, shall have access to pertinent books, documents, 
papers, and records of any recipient of Federal assistance under this 
section.
    (2) The Secretary may collect a fee from any borrower with respect 
to whose obligation a guarantee or commitment to guarantee is issued 
under subsection (a) of this section; except that the Secretary may 
waive any such fee with respect to any such borrower or class of 
borrowers. Fees shall be designed to recover the estimated 
administrative expenses incurred under this part; except that the total 
of the fees charged any such borrower may not exceed (A) one percent of 
the amount of the guarantee, or (B) one-half percent of the amount of 
the commitment to guarantee, whichever is greater. Any amount collected 
under this paragraph shall be deposited in the miscellaneous receipts of 
the Treasury.

(f) Default in payment of principal due under guaranteed obligation; 
        procedures applicable

    (1) If there is a default by the obligor in any payment of principal 
due under an obligation guaranteed under subsection (a) of this section, 
and if such default continues for 30 days, the holder of such obligation 
or his agent has the right to demand payment by the Secretary of the 
unpaid principal of such obligation, consistent with the terms of the 
guarantee of such obligation. Such payment may be demanded within such 
period as may be specified in the guarantee or related agreements, which 
period shall expire not later than 90 days from the date of such 
default. If demand occurs within such specified period, then not later 
than 60 days from the date of such demand, the Secretary shall pay to 
such holder the unpaid principal of such obligation, consistent with the 
terms of the guarantee of such obligation; except that (A) the Secretary 
shall not be required to make any such payment if he finds, prior to the 
expiration of the 60-day period beginning on the date on which the 
demand is made, that there was no default by the obligor in the payment 
of principal or that such default has been remedied, and (B) no such 
holder shall receive payment or be entitled to retain payment in a total 
amount which together with any other recovery (including any recovery 
based upon any security interest) exceeds the actual loss of principal 
by such holder.
    (2) If the Secretary makes payment to a holder under paragraph (1), 
the Secretary shall thereupon--
        (A) have all of the rights granted to him by law or agreement 
    with the obligor; and
        (B) be subrogated to all of the rights which were granted such 
    holder, by law, assignment, or security agreement applicable to the 
    guaranteed obligation.

    (3) The Secretary may, in his discretion, take possession of, 
complete, recondition, reconstruct, renovate, repair, maintain, operate, 
remove, charter, rent, sell, or otherwise dispose of any property or 
other interests obtained by him pursuant to this subsection. The terms 
of any such sale or other disposition shall be as approved by the 
Secretary.
    (4) If there is a default by the obligor in any payment due under an 
obligation guaranteed under subsection (a) of this section, the 
Secretary shall take such action against such obligor or any other 
person as is, in his discretion, necessary or appropriate to protect the 
interests of the United States. Such an action may be brought in the 
name of the United States or in the name of the holder of such 
obligation. Such holder shall make available to the Secretary all 
records and evidence necessary to prosecute any such suit. The Secretary 
may, in his discretion, accept a conveyance of property in full or 
partial satisfaction of any sums owed to him. If the Secretary receives, 
through the sale of property, an amount greater than his cost and the 
amount paid to the holder under paragraph (1), he shall pay such excess 
to the obligor.

(g) Limitation on aggregate outstanding principal amount of obligations 
        guaranteed; time limitation on guarantees and commitments to 
        guarantee; authorization of appropriations

    (1) The aggregate outstanding principal amount of obligations which 
may be guaranteed under this section may not at any one time exceed 
$2,000,000,000. No guarantee or commitment to guarantee may be issued 
under subsection (a) of this section after September 30, 1979.
    (2) There is authorized to be appropriated for the payment of 
amounts to be paid under subsection (f) of this section, not to exceed 
$60,000,000. Any amount appropriated pursuant to this paragraph shall 
remain available until expended.
    (3) There is authorized to be appropriated to carry out the 
provisions of this part, including administrative costs, but not for the 
payment of amounts to be paid under subsection (f) of this section--
        (A) for the fiscal year ending September 30, 1977, not to exceed 
    $1,836,000; and
        (B) for the fiscal year ending September 30, 1978, not to exceed 
    $4,950,000.

(h) Wages paid laborers and mechanics; labor standards

    All laborers and mechanics employed in construction, alteration, or 
repair which is financed by an obligation guaranteed under subsection 
(a) of this section shall be paid wages at rates not less than those 
prevailing on similar construction in the locality, as determined by the 
Secretary of Labor in accordance with the Davis-Bacon Act [40 U.S.C. 
276a et seq.]. The Secretary shall not guarantee any obligations under 
subsection (a) of this section without first obtaining adequate 
assurance that these labor standards will be maintained during such 
construction, alteration, or repair. The Secretary of Labor shall, with 
respect to the labor standards in this subsection, have the authority 
and functions set forth in Reorganization Plan Numbered 14 of 1950 and 
section 276c of title 40.

(i) Definitions

    As used in this part:
        (1) The term ``Secretary'' means the Secretary of Energy.
        (2) The term ``Comptroller General'' means the Comptroller 
    General of the United States.
        (3) The terms ``energy audit'', ``energy conservation measure'', 
    ``renewable-resource energy measure'', ``building'', and 
    ``industrial plant'' have the meanings prescribed for such terms in 
    section 6326 of this title.

(Pub. L. 94-385, title IV, Sec. 451, Aug. 14, 1976, 90 Stat. 1165; Pub. 
L. 95-70, Sec. 5, July 21, 1977, 91 Stat. 277; Pub. L. 95-91, title III, 
Sec. 301(a), title VII, Secs. 703, 707, Aug. 4, 1977, 91 Stat. 577, 606, 
607; Pub. L. 104-316, title I, Sec. 122(q), Oct. 19, 1996, 110 Stat. 
3838.)

                       References in Text

    This subchapter, referred to in subsec. (e)(1), was in the original 
``this title'', meaning title IV of Pub. L. 94-385, known as the Energy 
Conservation in Existing Buildings Act of 1976, which enacted this 
subchapter, section 6327 of this title, and section 1701z-8 of Title 12, 
Banks and Banking, amended sections 6323, 6325, and 6326 of this title, 
and enacted provisions set out as a note under section 6801 of this 
title. For complete classification of this Act to the Code, see Short 
Title note set out under section 6801 of this title and Tables.
    The Davis-Bacon Act, referred to in subsec. (h), is act Mar. 3, 
1931, ch. 411, 46 Stat. 1494, as amended, which is classified generally 
to sections 276a to 276a-5 of Title 40, Public Buildings, Property, and 
Works. For complete classification of this Act to the Code, see Short 
Title note set out under section 276a of Title 40 and Tables.
    Reorganization Plan Numbered 14 of 1950, referred to in subsec. (h), 
is set out in the Appendix to Title 5, Government Organization and 
Employees.

                          Codification

    In subsec. (i)(1), ``The term `Secretary' means the Secretary of 
Energy'' substituted for ``The term `Administrator' means the 
Administrator of the Federal Energy Administration; except that after 
such Administration ceases to exist, such term means any officer of the 
United States designated by the President for purposes of this part'' in 
view of termination of Federal Energy Administration and transfer of its 
functions and functions of Administrator thereof (with certain 
exceptions) to Secretary of Energy pursuant to sections 301(a), 703, and 
707 of Pub. L. 95-91, which are classified to sections 7151(a), 7293, 
and 7297 of this title.


                               Amendments

    1996--Subsecs. (d), (e)(1). Pub. L. 104-316 struck out ``and the 
Comptroller General'' after ``Secretary of the Treasury''.
    1977--Subsec. (g)(3). Pub. L. 95-70 added par. (3).

                          Transfer of Functions

    ``Secretary'', meaning Secretary of Energy, substituted for 
``Administrator'', meaning Administrator of Federal Energy 
Administration, in subsecs. (a) to (f) and (h) pursuant to sections 
301(a), 703, and 707 of Pub. L. 95-91, which are classified to sections 
7151(a), 7293, and 7297 of this title and which terminated Federal 
Energy 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 6325 of this title.
