§934 Authorized financial transactions; interim notes; purchase of obligations for resale; sale of notes and certificates; liens

Summary

The Secretary can issue short-term IOUs to the Treasury to get money needed to pay the fund’s bills, make loans, and cover other allowed expenses. The Treasury and the Secretary agree on the IOUs’ form, amounts, and repayment dates. The Treasury sets the interest rate by looking at similar U.S. securities. The Treasury must buy those IOUs and can use money from selling other government securities to do it. Those Treasury actions count as public debt and are not included in federal budget totals or subject to general budget limits on spending and lending. The Treasury must also buy obligations insured by the fund when the Secretary offers them and may later resell them on terms the Treasury sets. Those buys and resales are also excluded from budget totals and limits. The Secretary may sell or assign notes in the fund, or sell ownership certificates in them, to the Treasury or private buyers, with or without insurance. Such sales are treated as asset sales under chapter 11 of title 31 even if the Secretary keeps the loan papers and acts as trustee or custodian for the buyer. Security documents taken with those notes can create liens in favor of the United States even after the notes are sold.