1222 
HR 6 PAP 
section shall be not more than 25 percent of eli-
gible project costs; 
‘‘(C) not more than $200,000,000 in Federal 
financial assistance shall be provided to any in-
dividual eligible project; and 
‘‘(D) an eligible project shall not be eligible 
for financial assistance from any other Federal 
grant program during any period that Federal 
financial assistance (other than a Federal loan 
or loan guarantee) is provided to the eligible 
project under this section. 
‘‘(3) SELECTION AMONG ELIGIBLE PROJECTS.— 
‘‘(A) ESTABLISHMENT OF SELECTION CRI-
TERIA.—The Board, in consultation with the 
Secretary and ƒthe Interagency Coordinating 
Committee on Climate Change Technology estab-
lished under section 1610(c)(1)≈, shall, in ac-
cordance with the regulations issued under sub-
section (b)(4)(A), establish criteria for selecting 
which eligible projects will receive assistance 
under this section. 
‘‘(B) REQUIREMENTS.—The selection cri-
teria shall include a determination by the Board 
of the extent to which—
1223 
HR 6 PAP 
‘‘(i) the eligible project reduces green-
house gas intensity beyond reductions 
achieved by technology available as of Octo-
ber 15, 1992; 
‘‘(ii) financing for the eligible project 
has appropriate security features, such as a 
rate covenant, to ensure repayment; 
‘‘(iii) assistance under this section for 
the eligible project would foster innovative 
public-private partnerships and attract pri-
vate debt or equity investment; 
‘‘(iv) assistance under this section for 
an eligible project would enable the eligible 
project to proceed at an earlier date than 
would otherwise be practicable; and 
‘‘(v) the eligible project uses new tech-
nologies that enhance the efficiency, reduce 
greenhouse gas intensity, improve the reli-
ability, or improve the safety, of the eligible 
project. 
‘‘(C) FINANCIAL INFORMATION.—An appli-
cation for assistance for an eligible project under 
this section shall include such information as the 
Secretary determines to be necessary con-
cerning—
1224 
HR 6 PAP 
‘‘(i) the amount of budget authority re-
quired to fund the Federal credit instru-
ment requested for the eligible project; 
‘‘(ii) the estimated construction costs of 
the proposed eligible project; 
‘‘(iii) estimates of construction and op-
erating costs of the eligible project; 
‘‘(iv) projected revenues from the eligi-
ble project; and 
‘‘(v) any other financial aspects of the 
eligible project, including assurances, that 
the Board determines to be appropriate. 
‘‘(D) PRELIMINARY
RATING
OPINION
LET-
TER.—The Board shall require each applicant 
seeking assistance for an eligible project under 
this section to provide a preliminary rating 
opinion letter from at least 1 credit rating agen-
cy indicating that the senior obligations of the 
eligible project have the potential to achieve an 
investment-grade rating. 
‘‘(E) RISK
ASSESSMENT.—Before entering 
into any agreement to provide assistance for an 
eligible project under this section, the Board, in 
consultation with the Secretary, the Director of 
the Office of Management and Budget, and each
1225 
HR 6 PAP 
credit rating agency providing a preliminary 
rating opinion letter under subparagraph (D), 
shall determine and maintain an appropriate 
capital reserve subsidy amount for each line of 
credit established for the eligible project, taking 
into account the information contained in the 
preliminary rating opinion letter. 
‘‘(F) INVESTMENT-GRADE RATING REQUIRE-
MENT.— 
‘‘(i) IN GENERAL.—The funding of any 
assistance under this section shall be contin-
gent on the senior obligations of the eligible 
project receiving an investment-grade rating 
from at least 1 credit rating agency. 
‘‘(ii) 
CONSIDERATIONS.—In 
deter-
mining whether an investment-grade rating 
is appropriate under clause (i), the credit 
rating agency shall take into account the 
availability of Federal financial assistance 
under this section. 
‘‘(4) MAXIMUM AVAILABLE CLIMATE CREDIT SUP-
PORT.—Notwithstanding any assistance limitation 
under any other provision of this section, the Sec-
retary shall not provide energy credit support to any 
eligible project in the form of a secured loan or loan
1226 
HR 6 PAP 
guarantee under subsection (f), production incentive 
payments under subsection (g), or other credit-based 
financial assistance under subsection (h), the com-
bined total of which exceeds 25 percent of eligible 
project costs, excluding the value of standby default 
coverage under subsection (d) and standby interest 
coverage under subsection (e), as determined by the 
Secretary. 
‘‘(d) STANDBY DEFAULT COVERAGE.— 
‘‘(1) AGREEMENTS; USE OF PROCEEDS.— 
‘‘(A) AGREEMENTS.— 
‘‘(i) IN GENERAL.—Subject to subpara-
graph (B), the Board, in consultation with 
the Secretary, may enter into agreements to 
provide standby default coverage for ad-
vanced climate technologies or systems of an 
eligible project. 
‘‘(ii) 
RECIPIENTS.—Coverage 
under 
clause (i) may be provided to 1 or more ob-
ligors and debt holders to be triggered at fu-
ture dates on the occurrence of certain 
events for any eligible project selected under 
subsection (c). 
‘‘(B) USE OF PROCEEDS.—The proceeds of 
standby default coverage made available under
1227 
HR 6 PAP 
this subsection shall be available to reimburse all 
or part of the debt obligation for an eligible 
project issued by an obligor and funded by a 
lender, plus all or part of obligor equity, in the 
event that, because of a regulatory failure or 
other event specified by the Secretary pursuant 
to this section, an eligible advanced climate tech-
nology or system for an eligible project fails to 
receive an operating license in a period of time 
specified by the Board in accordance with this 
subsection. 
‘‘(2) TERMS AND LIMITATIONS.— 
‘‘(A) IN
GENERAL.—Standby default cov-
erage under this subsection with respect to an el-
igible project shall be on such terms and condi-
tions and contain such covenants, representa-
tions, warranties, and requirements (including 
requirements for audits) as the Board determines 
to be appropriate. 
‘‘(B) 
MAXIMUM
AMOUNTS.—The 
total 
amount of standby default coverage provided for 
an eligible project shall not exceed 25 percent of 
the reasonably anticipated eligible project costs, 
including debt and equity.
1228 
HR 6 PAP 
‘‘(C) EXERCISE.—Any exercise on the 
standby default coverage shall be made only if a 
facility involved with the eligible project fails, 
because of regulatory failure or other specific 
issues specified by the Secretary, to receive an 
operating license by such deadline as the Sec-
retary shall establish. 
‘‘(D) COST
OF
COVERAGE.—The cost of 
standby default coverage shall be assumed by the 
Secretary subject to the risk assessment calcula-
tion required under subsection (c)(4)(E) and the 
availability of funds for that purpose. 
‘‘(E) FEES.—In carrying out this section, 
the Secretary may— 
‘‘(i) establish fees at a level sufficient 
to cover all or a portion of the administra-
tive costs incurred by the Federal Govern-
ment in providing standby default coverage 
under this subsection; and 
‘‘(ii) require that the fees be paid upon 
application for a standby default coverage 
agreement under this subsection. 
‘‘(F) PERIOD
OF
AVAILABILITY.—In the 
event that regulatory approval to operate a facil-
ity is suspended as a result of regulatory failure
1229 
HR 6 PAP 
or other circumstances specified by the Secretary, 
standby default coverage shall be available begin-
ning on the date of substantial completion and 
ending not later than 5 years after the date on 
which operation of the facility is scheduled to 
commence. 
‘‘(G) RIGHTS
OF
THIRD-PARTY
CREDI-
TORS.— 
‘‘(i) 
AGAINST
FEDERAL
GOVERN-
MENT.—A third-party creditor of an obligor 
shall not have any right against the Federal 
Government with respect to any amounts 
other than those specified in clause (ii). 
‘‘(ii) ASSIGNMENT.—An obligor may 
assign all or part of the standby default 
coverage for an eligible project to 1 or more 
lenders or to a trustee on behalf of the lend-
ers. 
‘‘(H) RESULT
OF
EXERCISE
OF
STANDBY 
DEFAULT
COVERAGE.—If standby default cov-
erage is exercised by the obligor of an eligible 
project— 
‘‘(i) the Federal Government shall be-
come the sole owner of the eligible project,
1230 
HR 6 PAP 
with all rights and appurtenances to the eli-
gible project; and 
‘‘(ii) in accordance with applicable 
provisions of law, the Board shall dispose of 
the assets of the eligible project on terms 
that are most favorable to the Federal Gov-
ernment, which may include continuing to 
licensing and commercial operation or re-
sale of the eligible project, in whole or in 
part, if that is the best course of action in 
the judgment of the Board. 
‘‘(I) ESTIMATE OF ASSETS AT TIME OF TER-
MINATION.—If standby default coverage is exer-
cised and an eligible project is terminated, the 
Board, in making a determination of whether to 
dispose of the assets of the eligible project or con-
tinue the eligible project to licensing and com-
mercial operation, shall obtain a fair and im-
partial estimate of the eligible project assets at 
the time of termination. 
‘‘(J) RELATIONSHIP TO OTHER CREDIT IN-
STRUMENTS.—An eligible project that receives 
standby default coverage under this subsection 
may receive a secured loan or loan guarantee 
under subsection (f), production incentive pay-
1231 
HR 6 PAP 
ments under subsection (g), or assistance through 
a credit-based financial assistance mechanism 
under subsection (h). 
‘‘(K) OTHER
CONDITIONS
AND
REQUIRE-
MENTS.—The Secretary may impose such other 
conditions and requirements in connection with 
any insurance provided under this subsection 
(including requirements for audits) as the Sec-
retary determines to be appropriate. 
‘‘(e) STANDBY INTEREST COVERAGE.— 
‘‘(1) IN GENERAL.— 
‘‘(A) AGREEMENTS.—Subject to subpara-
graph (B), the Board, in consultation with the 
Secretary, may enter into agreements to make 
standby interest coverage available to 1 or more 
obligors in the form of loans for advanced cli-
mate or energy technologies or systems to be 
made by the Board at future dates on the occur-
rence of certain events for any eligible project se-
lected under subsection (c)(4). 
‘‘(B) USE OF PROCEEDS.—Subject to sub-
section (c)(3), the proceeds of standby interest 
coverage made available under this subsection 
shall be available to pay the debt service on 
project obligations issued to finance eligible
1232 
HR 6 PAP 
project costs of an eligible project if a delay in 
commercial operations occurs due to a regulatory 
failure or other condition determined by the Sec-
retary. 
‘‘(2) TERMS AND LIMITATIONS.— 
‘‘(A) IN GENERAL.—Standby interest cov-
erage under this subsection with respect to an el-
igible project shall be made on such terms and 
conditions (including a requirement for an 
audit) as the Secretary determines appropriate. 
‘‘(B) MAXIMUM AMOUNTS.— 
‘‘(i) 
TOTAL
AMOUNT.—The 
total 
amount of standby interest coverage for an 
eligible project under this subsection shall 
not exceed 25 percent of the reasonably an-
ticipated eligible project costs of the eligible 
project. 
‘‘(ii) 1-YEAR
DRAWS.—The amount 
drawn in any 1 year for an eligible project 
under this subsection shall not exceed 25 
percent of the total amount of the standby 
interest coverage for the eligible project. 
‘‘(C) PERIOD OF AVAILABILITY.—The stand-
by interest coverage for an eligible project shall 
be available during the period—
1233 
HR 6 PAP 
‘‘(i) beginning on a date following sub-
stantial completion of the eligible project 
that regulatory approval to operate a facil-
ity under the eligible project is suspended as 
a result of regulatory failure or other condi-
tion determined by the Secretary; and 
‘‘(ii) ending on a date that is not later 
than 5 years after the eligible project is 
scheduled to commence commercial oper-
ations. 
‘‘(D) COST OF COVERAGE.—Subject to sub-
section (c)(4)(E), the cost of standby interest cov-
erage for an eligible project under this subsection 
shall be borne by the Secretary. 
‘‘(E) DRAWS.—Any draw on the standby 
interest coverage for an eligible project shall— 
‘‘(i) represent a loan; 
‘‘(ii) be made only if there is a delay 
in commercial operations after the substan-
tial completion of the eligible project; and 
‘‘(iii) be subject to the overall credit 
support limitations established under sub-
section (c)(5). 
‘‘(F) INTEREST RATE.—
1234 
HR 6 PAP 
‘‘(i) IN
GENERAL.—Subject to clause 
(ii), the interest rate on a loan resulting 
from a draw on standby interest coverage 
under this subsection shall be established by 
the Secretary. 
‘‘(ii) MINIMUM
RATE.—The interest 
rate on a loan resulting from a draw on 
standby interest coverage under this sub-
section shall not be less than the current av-
erage market yield on outstanding market-
able obligations of the United States with a 
maturity of 10 years, as of the date on 
which the standby interest coverage is obli-
gated. 
‘‘(G) SECURITY.—The standby interest cov-
erage for an eligible project— 
‘‘(i) shall be payable, in whole or in 
part, from dedicated revenue sources gen-
erated by the eligible project; 
‘‘(ii) shall require security for the 
project obligations; and 
‘‘(iii) may have a lien on revenues de-
scribed in clause (i), subject to any lien se-
curing project obligations.
1235 
HR 6 PAP 
‘‘(H) RIGHTS
OF
THIRD-PARTY
CREDI-
TORS.— 
‘‘(i) 
AGAINST
FEDERAL
GOVERN-
MENT.—A third-party creditor of the obligor 
shall not have any right against the Federal 
Government with respect to any draw on 
standby interest coverage under this sub-
section. 
‘‘(ii) ASSIGNMENT.—An obligor may 
assign the standby interest coverage to 1 or 
more lenders or to a trustee on behalf of the 
lenders. 
‘‘(I) SUBORDINATION.—A secured loan for 
an eligible project made under this subsection 
shall be subordinate to senior private debt issued 
by a lender for the eligible project. 
‘‘(J) NONRECOURSE
STATUS.—A secured 
loan for an eligible project under this subsection 
shall be nonrecourse to the obligor in the event 
of bankruptcy, insolvency, or liquidation of the 
eligible project. 
‘‘(K) FEES.—The Board may impose fees at 
a level sufficient to cover all or part of the costs 
to the Federal Government of providing standby
1236 
HR 6 PAP 
interest coverage for an eligible project under 
this subsection. 
‘‘(3) REPAYMENT.— 
‘‘(A) TERMS
AND
CONDITIONS.—The Sec-
retary shall establish a repayment schedule and 
terms and conditions for each loan for an eligible 
project under this subsection based on the pro-
jected cash flow from revenues for the eligible 
project. 
‘‘(B) REPAYMENT
SCHEDULE.—Scheduled 
repayments of principal or interest on a loan 
under this subsection shall— 
‘‘(i) commence not later than 5 years 
after the end of the period of availability 
specified in paragraph (2)(C); and 
‘‘(ii) be completed, with interest, not 
later than 10 years after the end of the pe-
riod of availability. 
‘‘(C) SOURCES
OF
REPAYMENT
FUNDS.— 
The sources of funds for scheduled loan repay-
ments under this subsection shall include— 
‘‘(i) the sale of electricity or generating 
capacity; 
‘‘(ii) the sale or transmission of energy;
1237 
HR 6 PAP 
‘‘(iii) revenues associated with energy 
efficiency gains; or 
‘‘(iv) other dedicated revenue sources, 
such as carbon use. 
‘‘(D) PREPAYMENT.— 
‘‘(i) USE OF EXCESS REVENUES.—At 
the discretion of the obligor, any excess reve-
nues that remain after satisfying scheduled 
debt service requirements on the project obli-
gations and secured loan, and all deposit 
requirements under the terms of any trust 
agreement, bond resolution, or similar 
agreement securing project obligations, may 
be applied annually to prepay the secured 
loan without penalty. 
‘‘(ii) USE
OF
PROCEEDS
OF
REFI-
NANCING.—The secured loan may be pre-
paid at any time without penalty from the 
proceeds of refinancing from non-Federal 
funding sources. 
‘‘(f) SECURED LOANS AND LOAN GUARANTEES.— 
‘‘(1) IN GENERAL.— 
‘‘(A) AGREEMENTS.—Subject to subpara-
graph (B), the Board, in consultation with the 
Secretary, may enter into agreements with 1 or
1238 
HR 6 PAP 
more obligors to make secured loans for eligible 
projects involving advanced climate technologies 
or systems. 
‘‘(B) USE OF PROCEEDS.—Subject to para-
graph (2), the proceeds of a secured loan for an 
eligible project made available under this sub-
section shall be available, in conjunction with 
the equity of the obligor and senior debt financ-
ing for the eligible project, to pay for eligible 
project costs. 
‘‘(2) TERMS AND LIMITATIONS.— 
‘‘(A) IN GENERAL.—A secured loan under 
this subsection with respect to an eligible project 
shall be made on such terms and conditions (in-
cluding requirements for an audit) as the Board, 
in consultation with the Secretary, determines 
appropriate. 
‘‘(B) MAXIMUM AMOUNT.—Subject to sub-
section (c)(5), the total amount of the secured 
loan for an eligible project under this subsection 
shall not exceed 25 percent of the reasonably an-
ticipated eligible project costs of the eligible 
project. 
‘‘(C) PERIOD OF AVAILABILITY.—The Board 
may enter into a contract with the owner or op-
1239 
HR 6 PAP 
erator of an eligible project to provide a secured 
loan during the period— 
‘‘(i) beginning on the date that the fi-
nancial structure of the eligible project is es-
tablished; and 
‘‘(ii) ending on the date of the start of 
construction of the eligible project. 
‘‘(D) COST OF COVERAGE.—Subject to sub-
section (c)(4)(E), the cost of a secured loan for 
an eligible project under this subsection shall be 
borne by the Secretary. 
‘‘(E) INTEREST RATE.— 
‘‘(i) IN
GENERAL.—Subject to clause 
(ii), the interest rate on a secured loan 
under this subsection shall be established by 
the Secretary. 
‘‘(ii) MINIMUM
RATE.—The interest 
rate on a loan resulting from a secured loan 
under this subsection shall not be less than 
the current average market yield on out-
standing marketable obligations of the 
United States of comparable maturity, as of 
the date of the execution of the loan agree-
ment. 
‘‘(F) SECURITY.—The secured loan—
1240 
HR 6 PAP 
‘‘(i) shall be payable, in whole or in 
part, from dedicated revenue sources gen-
erated by the eligible project; 
‘‘(ii) shall include a rate covenant, cov-
erage requirement, or similar security fea-
ture supporting the project obligations; and 
‘‘(iii) may have a lien on revenues de-
scribed in clause (i), subject to any lien se-
curing project obligations. 
‘‘(G) RIGHTS
OF
THIRD-PARTY
CREDI-
TORS.— 
‘‘(i) 
AGAINST
FEDERAL
GOVERN-
MENT.—A third-party creditor of the obligor 
shall not have any right against the Federal 
Government with respect to any payments 
due to the Federal Government under this 
subsection. 
‘‘(ii) ASSIGNMENT.—An obligor may 
assign the secured loan to 1 or more lenders 
or to a trustee on behalf of the lenders. 
‘‘(H) SUBORDINATION.—A secured loan for 
an eligible project made under this subsection 
shall be subordinate to senior private debt issued 
by a lender for the eligible project.
1241 
HR 6 PAP 
‘‘(I) NONRECOURSE
STATUS.—A secured 
loan for an eligible project under this subsection 
shall be non-recourse to the obligor in the event 
of bankruptcy, insolvency, or liquidation of the 
eligible project. 
‘‘(J) FEES.—The Board may establish fees 
at a level sufficient to cover all or a portion of 
the costs to the Federal Government of making 
secured loans for an eligible project under this 
subsection. 
‘‘(3) REPAYMENT.— 
‘‘(A) SCHEDULE AND TERMS.—The Board 
shall establish a repayment schedule and terms 
and conditions for each secured loan for an eligi-
ble project under this subsection based on the 
projected cash flow from revenues for the eligible 
project. 
‘‘(B) REPAYMENT
SCHEDULE.—Scheduled 
repayments on a secured loan for an eligible 
project under this subsection shall— 
‘‘(i) commence not later than 5 years 
after the scheduled start of commercial oper-
ations of the eligible project; and 
‘‘(ii) be completed, with interest, not 
later than 35 years after the scheduled date
1242 
HR 6 PAP 
of the start of commercial operations of the 
eligible project. 
‘‘(C) SOURCES
OF
REPAYMENT
FUNDS.— 
The sources of funds for scheduled loan repay-
ments under this subsection shall include— 
‘‘(i) the sale of carbon or carbon com-
pounds; 
‘‘(ii) the sale of electricity or gener-
ating capacity; 
‘‘(iii) the sale of sequestration services; 
‘‘(iv) the sale or transmission of en-
ergy; 
‘‘(v) revenues associated with energy ef-
ficiency gains; or 
‘‘(vi) other dedicated revenue sources. 
‘‘(D) DEFERRED PAYMENTS.— 
‘‘(i) AUTHORIZATION.—If, at any time 
during the 10-year period beginning on the 
date of the scheduled start of commercial 
operation of an eligible project, the eligible 
project is unable to generate sufficient reve-
nues to pay the scheduled loan repayments 
of principal or interest on the secured loan, 
the Secretary may, subject to clause (iii), 
allow the obligor to add unpaid principal
1243 
HR 6 PAP 
or interest to the outstanding balance of the 
secured loan. 
‘‘(ii) INTEREST.—Any payment de-
ferred under clause (i) shall— 
‘‘(I) continue to accrue interest in 
accordance with paragraph (2)(E) 
until fully repaid; and 
‘‘(II) be scheduled to be amortized 
over the number of years remaining in 
the term of the loan in accordance with 
subparagraph (B). 
‘‘(iii) CRITERIA.— 
‘‘(I) IN GENERAL.—Any payment 
deferral under clause (i) shall be con-
tingent on the eligible project meeting 
criteria established by the Secretary. 
‘‘(II) REPAYMENT STANDARDS.— 
The criteria established under sub-
clause (I) shall include standards for 
reasonable assurance of repayment. 
‘‘(E) PREPAYMENT.— 
‘‘(i) USE OF EXCESS REVENUES.—At 
the discretion of the obligor, any excess reve-
nues that remain after satisfying scheduled 
debt service requirements on the project obli-
1244 
HR 6 PAP 
gations and secured loan, and all deposit 
requirements under the terms of any trust 
agreement, bond resolution, or similar 
agreement securing project obligations, may 
be applied annually to prepay the secured 
loan without penalty. 
‘‘(ii) USE
OF
PROCEEDS
OF
REFI-
NANCING.—The secured loan may be pre-
paid at any time without penalty from the 
proceeds of refinancing from non-Federal 
funding sources. 
‘‘(4) SALE OF SECURED LOANS.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graph (B), as soon as practicable after substan-
tial completion of an eligible project and after 
notifying the obligor, the Board may sell to an-
other entity or reoffer into the capital markets a 
secured loan for the eligible project if the Board 
determines that the sale or reoffering can be 
made on favorable terms. 
‘‘(B) CONSENT OF OBLIGOR.—In making a 
sale or reoffering under subparagraph (A), the 
Board may not change the original terms and 
conditions of the secured loan without the writ-
ten consent of the obligor.
1245 
HR 6 PAP 
‘‘(5) LOAN GUARANTEES.— 
‘‘(A) IN GENERAL.—The Board may pro-
vide a loan guarantee to a lender, in lieu of 
making a secured loan, under this subsection if 
the Board determines that the budgetary cost of 
the loan guarantee is substantially the same as 
that of a secured loan. 
‘‘(B) TERMS.— 
‘‘(i) IN GENERAL.—Except as provided 
in clause (ii), the terms of a guaranteed 
loan shall be consistent with the terms for 
a secured loan under this subsection. 
‘‘(ii) INTEREST RATE; PREPAYMENT.— 
The interest rate on the guaranteed loan 
and any prepayment features shall be estab-
lished by negotiations between the obligor 
and the lender, with the consent of the 
Board. 
‘‘(g) PRODUCTION INCENTIVE PAYMENTS.— 
‘‘(1) SECURED LOAN.— 
‘‘(A) IN
GENERAL.—The Secretary may 
enter into an agreement with 1 or more obligors 
to make a secured loan for an eligible project se-
lected under subsection (c)(4) that employs 1 or 
more advanced climate technologies or systems.
1246 
HR 6 PAP 
‘‘(B) PRODUCTION INCENTIVE PAYMENTS.— 
‘‘(i) IN GENERAL.—Amounts loaned to 
an obligor under subparagraph (A) shall be 
made available in the form of a series of 
production incentive payments provided by 
the Board to the obligor during a period of 
not more than 10 years, as determined by 
the Board, beginning after the date on 
which commercial project operations start 
at the eligible project. 
‘‘(ii) AMOUNT.—Production incentive 
payments under clause (i) shall be for an 
amount equal to 25 percent of the value 
of— 
‘‘(I) the energy produced or trans-
mitted by the eligible project during 
the applicable year; or 
‘‘(II) any gains in energy effi-
ciency achieved by the eligible project 
during the applicable year. 
‘‘(2) TERMS AND LIMITATIONS.— 
‘‘(A) IN GENERAL.—A secured loan under 
this subsection shall be subject to such terms and 
conditions, including any covenant, representa-
tion, warranty, and requirement (including a re-
1247 
HR 6 PAP 
quirement for an audit) that the Secretary deter-
mines to be appropriate. 
‘‘(B) AGREEMENT COSTS.—Subject to sub-
section (c)(4), the cost of carrying out an agree-
ment entered into under paragraph (1)(A) shall 
be paid by the Secretary. 
‘‘(C) INTEREST RATE.— 
‘‘(i) IN
GENERAL.—Subject to clause 
(ii), the interest rate on a secured loan 
under this subsection shall be established by 
the Secretary. 
‘‘(ii) MINIMUM
RATE.—The interest 
rate on a secured loan under this subsection 
shall not be less than the current average 
market yield on outstanding marketable ob-
ligations of the United States of comparable 
maturity, as of the date on which the agree-
ment under paragraph (1)(A) is executed. 
‘‘(D) SECURITY.—The secured loan— 
‘‘(i) shall be payable, in whole or in 
part, from dedicated revenue sources gen-
erated by the eligible project; 
‘‘(ii) shall include a rate covenant, cov-
erage requirement, or similar security fea-
1248 
HR 6 PAP 
ture supporting the eligible project obliga-
tions; and 
‘‘(iii) may have a lien on revenues de-
scribed in clause (i), subject to any lien se-
curing eligible project obligations. 
‘‘(E) RIGHTS
OF
THIRD-PARTY
CREDI-
TORS.— 
‘‘(i) 
AGAINST
FEDERAL
GOVERN-
MENT.—A third-party creditor of the obligor 
shall not have any right against the Federal 
Government with respect to any payments 
due to the Federal Government under the 
agreement entered into under paragraph 
(1)(A). 
‘‘(ii) ASSIGNMENT.—An obligor may 
assign production incentive payments to 1 
or more lenders or to a trustee on behalf of 
the lenders. 
‘‘(F) 
SUBORDINATION.—A 
secured 
loan 
under this subsection shall be subordinate to sen-
ior private debt issued by a lender for the eligible 
project. 
‘‘(G) NONRECOURSE
STATUS.—A secured 
loan under this subsection shall be nonrecourse to