Regulation (or any successor regulation), known as 
Rule 144A(a) of the Securities and Exchange Com-
mission and issued under the Securities Act of 1933 
(15 U.S.C. 77a et seq.)). 
(3) LOAN GUARANTEE.—The term ‘‘loan guar-
antee’’ has the meaning given the term ‘‘loan guar-
antee’’ in section 502 of the Federal Credit Reform 
Act of 1990 (2 U.S.C. 661a). 
(4) 
NON-FEDERAL
BORROWER.—The 
term 
‘‘non-Federal borrower’’ means— 
(A) a State (including a department, agen-
cy, or political subdivision of a State); or 
(B) a conservancy district, irrigation dis-
trict, canal company, water users’ association, 
Indian tribe, an agency created by interstate 
compact, or any other entity that has the ca-
pacity to contract with the United States under 
Federal reclamation law. 
(5) 
OBLIGATION.—The 
term 
‘‘obligation’’ 
means a loan or other debt obligation that is guar-
anteed under this section. 
(6) PROJECT.—The term ‘‘project’’ means— 
(A) a rural water supply project (as de-
fined in section 102(9)); or
(B) an extraordinary operation and main-
tenance activity for, or the rehabilitation of, a 
facility— 
(i) that is authorized by Federal rec-
lamation law and constructed by the 
United States under such law; or 
(ii) in connection with which there is 
a repayment or water service contract exe-
cuted by the United States under Federal 
reclamation law. 
(7) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Interior. 
SEC. 203. PROJECT ELIGIBILITY. 
(a) ELIGIBILITY CRITERIA.— 
(1) IN GENERAL.—The Secretary shall develop 
and publish in the Federal Register criteria for de-
termining the eligibility of a project for financial as-
sistance under section 204. 
(2) INCLUSIONS.—Eligibility criteria shall in-
clude— 
(A) submission of an application by the 
lender to the Secretary; 
(B) demonstration of the creditworthiness 
of the project, including a determination by the 
Secretary that any financing for the project has
appropriate security features to ensure repay-
ment; 
(C) demonstration by the non-Federal bor-
rower, to the satisfaction of the Secretary, of 
the ability of the non-Federal borrower to repay 
the project financing from user fees or other 
dedicated revenue sources; 
(D) demonstration by the non-Federal bor-
rower, to the satisfaction of the Secretary, of 
the ability of the non-Federal borrower to pay 
all operations, maintenance, and replacement 
costs of the project facilities; and 
(E) such other criteria as the Secretary de-
termines to be appropriate. 
(b) WAIVER.—The Secretary may waive any of the 
criteria in subsection (a)(2) that the Secretary determines 
to be duplicative or rendered unnecessary because of an 
action already taken by the United States. 
(c) PROJECTS PREVIOUSLY AUTHORIZED.—A project 
that was authorized for construction under Federal rec-
lamation laws prior to the date of enactment of this Act 
shall be eligible for assistance under this title, subject to 
the criteria established by the Secretary under subsection 
(a).
(d) 
CRITERIA
FOR
RURAL
WATER
SUPPLY 
PROJECTS.—A rural water supply project that is deter-
mined to be feasible under section 106 is eligible for a 
loan guarantee under section 204. 
SEC. 204. LOAN GUARANTEES. 
(a) AUTHORITY.—Subject to the availability of ap-
propriations, the Secretary may make available to lenders 
for a project meeting the eligibility criteria established in 
section 203 loan guarantees to supplement private-sector 
or lender financing for the project. 
(b) TERMS AND LIMITATIONS.— 
(1) IN GENERAL.—Loan guarantees under this 
section for a project shall be on such terms and con-
ditions and contain such covenants, representations, 
warranties, and requirements as the Secretary deter-
mines to be appropriate to protect the financial in-
terests of the United States. 
(2) AMOUNT.—Loan guarantees by the Sec-
retary shall not exceed an amount equal to 90 per-
cent of the cost of the project that is the subject of 
the loan guarantee, as estimated at the time at 
which the loan guarantee is issued. 
(3) INTEREST RATE.—An obligation shall bear 
interest at a rate that does not exceed a level that 
the Secretary determines to be appropriate, taking
into account the prevailing rate of interest in the 
private sector for similar loans and risks. 
(4) AMORTIZATION.—A loan guarantee under 
this section shall provide for complete amortization 
of the loan guarantee within not more than 40 
years. 
(5) NONSUBORDINATION.—An obligation shall 
be subject to the condition that the obligation is not 
subordinate to other financing. 
(c) PREPAYMENT AND REFINANCING.—Any prepay-
ment or refinancing terms on a loan guarantee shall be 
negotiated between the non-Federal borrower and the 
lender with the consent of the Secretary. 
SEC. 205. DEFAULTS. 
(a) PAYMENTS BY SECRETARY.— 
(1) IN GENERAL.—If a borrower defaults on the 
obligation, the holder of the loan guarantee shall 
have the right to demand payment of the unpaid 
amount from the Secretary. 
(2) PAYMENT
REQUIRED.—By such date as 
may be specified in the loan guarantee or related 
agreements, the Secretary shall pay to the holder of 
the loan guarantee the unpaid interest on, and un-
paid principal of, the obligation with respect to 
which the borrower has defaulted, unless the Sec-
retary finds that there was not default by the bor-
rower in the payment of interest or principal or that 
the default has been remedied. 
(3) FORBEARANCE.—Nothing in this subsection 
precludes any forbearance by the holder of the obli-
gation for the benefit of the non-Federal borrower 
that may be agreed on by the parties to the obliga-
tion and approved by the Secretary. 
(b) SUBROGATION.— 
(1) IN GENERAL.—If the Secretary makes a 
payment under subsection (a), the Secretary shall be 
subrogated to the rights of the recipient of the pay-
ment as specified in the loan guarantee or related 
agreements, including, as appropriate, the authority 
(nothwithstanding any other provision of law) to— 
(A) complete, maintain, operate, lease, or 
otherwise dispose of any property acquired pur-
suant to the loan guarantee or related agree-
ments; or 
(B) permit the non-Federal borrower, pur-
suant to an agreement with the Secretary, to 
continue to pursue the purposes of the project 
if the Secretary determines the purposes to be 
in the public interest.
(2) SUPERIORITY OF RIGHTS.—The rights of 
the Secretary, with respect to any property acquired 
pursuant to a loan guarantee or related agreement, 
shall be superior to the rights of any other person 
with respect to the property. 
(c) PAYMENT OF PRINCIPAL AND INTEREST BY SEC-
RETARY.—With respect to any obligation guaranteed 
under this section, the Secretary may enter into a contract 
to pay, and pay, holders of the obligation, for and on be-
half of the non-Federal borrower, from funds appropriated 
for that purpose, the principal and interest payments that 
become due and payable on the unpaid balance of the obli-
gation if the Secretary finds that— 
(1)(A) the non-Federal borrower is unable to 
meet the payments and is not in default; 
(B) it is in the public interest to permit the 
non-Federal borrower to continue to pursue the pur-
poses of the project; and 
(C) the probable net benefit to the Federal Gov-
ernment in paying the principal and interest will be 
greater than that which would result in the event of 
a default; 
(2) the amount of the payment that the Sec-
retary is authorized to pay shall be no greater than 
the amount of principal and interest that the non-
Federal borrower is obligated to pay under the 
agreement being guaranteed; and 
(3) the borrrower agrees to reimburse the Sec-
retary for the payment (including interest) on terms 
and conditions that are satisfactory to the Secretary. 
(d) ACTION BY ATTORNEY GENERAL.— 
(1) NOTIFICATION.—If the non-Federal bor-
rower defaults on an obligation, the Secretary shall 
notify the Attorney General of the default. 
(2) RECOVERY.—On notification, the Attorney 
General shall take such action as is appropriate to 
recover the unpaid principal and interest due from— 
(A) such assets of the defaulting non-Fed-
eral borrower as are associated with the obliga-
tion; or 
(B) any other security pledged to secure 
the obligation. 
SEC. 206. OPERATIONS, MAINTENANCE, AND REPLACE-
MENT COSTS. 
(a) IN GENERAL.—The non-Federal share of oper-
ations, maintenance, and replacement costs for a project 
receiving Federal assistance under this title shall be 100 
percent. 
(b) PLAN.—On request of the non-Federal borrower, 
the Secretary may assist in the development of an oper-
ation, maintenance, and replacement plan to provide the 
necessary framework to assist the non-Federal borrower 
in establishing rates and fees for project beneficiaries. 
SEC. 207. TITLE TO NEWLY CONSTRUCTED FACILITIES. 
(a) NEW
PROJECTS
AND
FACILITIES.—All new 
projects or facilities constructed in accordance with this 
title shall remain under the jurisdiction and control of the 
non-Federal borrower subject to the terms of the repay-
ment agreement. 
(b) EXISTING PROJECTS AND FACILITIES.—Nothing 
in this title affects the title of— 
(1) reclamation projects authorized prior to the 
date of enactment of this Act; 
(2) works supplemental to existing reclamation 
projects; or 
(3) works constructed to rehabilitate existing 
reclamation projects. 
SEC. 208. WATER RIGHTS. 
(a) IN GENERAL.—Nothing in this title preempts or 
affects State water law or an interstate compact governing 
water. 
(b) COMPLIANCE REQUIRED.—The Secretary shall 
comply with State water laws in carrying out this title. 
Nothing in this title affects or preempts State water law 
or an interstate compact governing water.
SEC. 209. INTERAGENCY COORDINATION AND COOPERA-
TION. 
(a) CONSULTATION.—The Secretary shall consult 
with the Secretary of Agriculture before promulgating cri-
teria with respect to financial appraisal functions and loan 
guarantee administration for activities carried out under 
this title. 
(b) MEMORANDUM OF AGREEMENT.—The Secretary 
and the Secretary of Agriculture may enter into a memo-
randum of agreement providing for Department of Agri-
culture financial appraisal functions and loan guarantee 
administration for activities carried out under this title. 
SEC. 210. RECORDS; AUDITS. 
(a) IN GENERAL.—A recipient of a loan guarantee 
shall keep such records and other pertinent documents as 
the Secretary shall prescribe by regulation, including such 
records as the Secretary may require to facilitate an effec-
tive audit. 
(b) ACCESS.—The Secretary and the Comptroller 
General of the United States, or their duly authorized rep-
resentatives, shall have access, for the purpose of audit, 
to the records and other pertinent documents. 
SEC. 211. FULL FAITH AND CREDIT. 
The full faith and credit of the United States is 
pledged to the payment of all guarantees issued under this 
section with respect to principal and interest.
SEC. 212. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated such sums 
as are necessary to carry out this title, to remain available 
until expended. 
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