
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: 48USC1574b]

 
              TITLE 48--TERRITORIES AND INSULAR POSSESSIONS
 
                       CHAPTER 12--VIRGIN ISLANDS
 
                   SUBCHAPTER III--LEGISLATIVE BRANCH
 
Sec. 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.

(Pub. L. 94-392, Sec. 2, Aug. 19, 1976, 90 Stat. 1193; Pub. L. 96-205, 
title IV, Sec. 407, Mar. 12, 1980, 94 Stat. 89; Pub. L. 98-146, title I, 
Nov. 4, 1983, 97 Stat. 931, 932; Pub. L. 98-213, Sec. 4(b), Dec. 8, 
1983, 97 Stat. 1460; Pub. L. 99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 
2095.)

                       References in Text

    Chapter 1 of the Internal Revenue Code of 1986, referred to in 
subsec. (e), means chapter 1 (Sec. 1 et seq.) of Title 26, Internal 
Revenue Code.
    This Act, referred to in subsecs. (f) and (g), is Pub. L. 94-392, 
Aug. 19, 1976, 90 Stat. 1193, as amended, which enacted sections 1574a 
to 1574d of this title, amended section 1397 of this title, and enacted 
a provision set out as a note under section 1574a of this title. For 
complete classification of this Act to the Code, see Tables.

                          Codification

    In subsecs. (b)(2) and (f), ``section 7652(b)(3) of title 26'' 
substituted for ``section 28(b) of the Revised Organic Act of the Virgin 
Islands [68 Stat. 508]'', which was classified to section 3350(c) of 
former Title 26, Internal Revenue Code, on authority of section 7852(b) 
of Title 26, Internal Revenue Code, which provided that any reference in 
any other law to a provision of the Internal Revenue Code of 1939 be 
deemed a reference to the corresponding provision of the Internal 
Revenue Code of 1986.
    In subsec. (g)(1) and (3), ``sections 9103 and 9104 of title 31'' 
substituted for ``sections 102, 103, and 104 of the Government 
Corporation Control Act (31 U.S.C. 847-849)'', and ``chapter 31 of title 
31'' and ``that chapter'' were substituted for ``the Second Liberty Bond 
Act'' 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.
    Section was not enacted as part of the Revised Organic Act of the 
Virgin Islands which comprises this chapter.


                               Amendments

    1986--Subsec. (e). Pub. L. 99-514 substituted ``Internal Revenue 
Code of 1986'' for ``Internal Revenue Code of 1954''.
    1983--Subsec. (b)(1). Pub. L. 98-213, Sec. 4(b)(1), and Pub. L. 98-
146, Sec. 100(1), made nearly identical amendments relating to the use 
of the amounts of $28,000,000 and $12,000,000 of the guaranteed bonding 
authority. The text reflects the amendment by Pub. L. 98-213.
    Subsec. (f). Pub. L. 98-213, Sec. 4(b)(2), and Pub. L. 98-146, 
Sec. 100(2), amended subsec. (f) identically, substituting 
``$101,000,000'' for ``$61,000,000'' and ``1990'' for ``1984'' in two 
places.
    1980--Subsec. (f). Pub. L. 96-205 substituted provisions relating to 
prohibitions on commitments to guarantee by the Secretary and obligation 
by the Virgin Islands government of guaranteed but unobligated funds, 
and repayment by the government of unobligated proceeds of bonds or 
other obligations after Oct. 1, 1984, for provisions relating to 
entering into under Pub. L. 94-392, after Oct. 1, 1979, of commitments 
to guarantee.

                  Section Referred to in Other Sections

    This section is referred to in sections 1574a, 1574c, 1645 of this 
title.
