Loan Guarantees - Notice of proposed rulemaking
Contact: Randy Christopherson, (303) 445-2729
Twenty-First Century Water Works Act (Title II of Pub. L. 109-451) authorized the Secretary of the Interior to issue loan guarantees. Authority and responsibility for implementing the provisions of the Act are delegated to the Bureau of Reclamation. The intent of this rule is to provide program requirements and eligibility criteria for both the non-federal borrower and lenders.
The proposed rule provides an overview of the loan guarantee program, including how applications will be evaluated and prioritized; describes roles and responsibilities for potential borrowers, lenders, as well as Reclamation; identifies terms and conditions of guaranteed loans; and describes default actions, proceedings, and timelines for guaranteed loans.
The purpose of the loan guarantee program is to provide Federal assistance to eligible non-Federal borrowers for eligible projects defined as follows: (a) Rural water supply projects as defined in the Reclamation Rural Water Supply Act of 2006 (Title I of Pub. L. 109-451); (b) Extraordinary operation and maintenance activity for, or the rehabilitation or replacement of, a facility that is authorized by Federal reclamation laws and constructed by the United States under such law; or in connection with which there is a repayment or water service contract executed by the United States under Federal reclamation law; or (c) Improvement to water infrastructure directly associated with a reclamation project that, based on a determination of the Secretary, improves water management and fulfills other Federal goals. The loan guarantee program does not include loans for routine Operation and Maintenance work.
The public was involved in developing the framework documents which were utilized in preparing the rule. Reclamation specifically addressed the loan guarantee program during public meetings held in Salt Lake City, UT on September 19 and 20, 2006.
To be eligible for a loan guarantee, an entity must be either: (a) A State (including department, agency, or political subdivision of a State); or (b) A conservancy district, irrigation district, canal company, water users association, Indian tribe, an agency created by interstate compact or any other entity that has the capacity to contract with the United States under Federal reclamation law (e.g., a rural water association or a Joint Power Authority).
When the proposed rule is final, Reclamation will issue solicitations to invite the submission of applications for loan guarantees for eligible projects.
Last Updated: October 8, 2008
Relevant Links:
News Release: Loan Guarantee Program Proposed Rule Available for Review