§122 — Title 23 Highways | U.S. Code

Summary

The Secretary may pay back a State, a local government, or a public authority for costs tied to a bond or similar loan used on an eligible project. An "eligible debt financing instrument" means a bond, note, certificate, mortgage, lease, or similar debt issued by a State, local government, or public agency to fund the project. Covered costs include interest, paying off principal, the cost to issue the debt, insurance, and other sale-related fees. Payments are allowed only after the State or public authority follows the project's rules, including the steps needed for payment under section 121. The federal share cannot be larger than the share set in section 120. Being eligible for repayment does not make the United States promise to pay the debt or give anyone a right to collect from the United States.

Title 23, §122

Highways — Source: USLM XML via OLRC

(a)In this section, the term “eligible debt financing instrument” means a bond or other debt financing instrument, including a note, certificate, mortgage, or lease agreement, issued by a State or political subdivision of a State or a public authority, the proceeds of which are used for an eligible project under this title.

(b)Subject to subsections (c) and (d), the Secretary may reimburse a State for expenses and costs incurred by the State or a political subdivision of the State and reimburse a public authority for expenses and costs incurred by the public authority for—

(1)interest payments under an eligible debt financing instrument;

(2)the retirement of principal of an eligible debt financing instrument;

(3)the cost of the issuance of an eligible debt financing instrument;

(4)the cost of insurance for an eligible debt financing instrument; and

(5)any other cost incidental to the sale of an eligible debt financing instrument (as determined by the Secretary).

(c)The Secretary may reimburse a State or public authority under subsection (b) with respect to a project funded by an eligible debt financing instrument after the State or public authority has complied with this title with respect to the project to the extent and in the manner that would be required if payment were to be made under section 121.

(d)The Federal share of the cost of a project payable under this section shall not exceed the Federal share of the cost of the project as determined under section 120.

(e)Notwithstanding any other provision of law, the eligibility of an eligible debt financing instrument for reimbursement under subsection (b) shall not—

(1)constitute a commitment, guarantee, or obligation on the part of the United States to provide for payment of principal or interest on the eligible debt financing instrument; or

(2)create any right of a third party against the United States for payment under the eligible debt financing instrument.

Notes & Related Subsidiaries

Editorial Notes

Amendments

1995—Pub. L. 104–59 amended section generally, substituting present provisions for provisions which authorized States to use portion of Federal highway payments to retire principal of bonds proceeds of which were used for certain Federal highway projects. 1987—Pub. L. 100–17 inserted “or for substitute highway projects approved under section 103(e)(4) of this title” before “and the retirement” in first sentence. 1983—Pub. L. 97–424 inserted “or for substitute highway projects approved under section 103(e)(4) of this title,” after “highway systems in urban areas,” and “or on highway projects approved under section 103(e)(4) of this title” after “expenditure on such system”. 1978—Pub. L. 95–599 inserted provisions relating to the retirement of bonds the proceeds of which were used for program projects, provisions that section was not to be construed as a commitment on the part of the United States to pay the principal of any such bonds, and provisions prohibiting inclusion of interest and incidental costs of bonds in estimated cost of completion.

Statutory Notes and Related Subsidiaries

Payment of Interest on Bonds Issued Prior to and After November 6, 1978 Pub. L. 95–599, title I, § 115(c), Nov. 6, 1978, 92 Stat. 2698, provided that: “No interest shall be paid under authority of section 122 of title 23, United States Code, on any bonds issued prior to the date of enactment of this Act [Nov. 6, 1978], unless such bonds were issued for projects which were under

Construction

on January 1, 1978. Interest on bonds issued in any fiscal year by a State after the date of enactment of this Act may be paid under authority of section 122 of title 23, United States Code, only if (1) such State was eligible to obligate funds of another State under subsection (a) of this section during such fiscal year and (2) the Secretary of Transportation certifies that such eligible State utilized, or will utilize, to the fullest extent possible during such fiscal year its authority to obligate funds under such subsection (a) of this section [amending section 118(b) of this title]. No interest shall be paid under section 122 of title 23, United States Code, on that part of the proceeds of bonds issued after the date of enactment of this Act used to retire or otherwise refinance bonds issued prior to such date.”

§122 Payments to States for bond and other debt instrument financing