(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).
(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.
References in Text
Chapter 1 of the Internal Revenue Code of 1986, referred to in subsec. (e), means chapter 1 (§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, §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, §4(b)(1), and Pub. L. 98–146, §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, §4(b)(2), and Pub. L. 98–146, §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.
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