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Title 42, The Public Health and WelfareRelease 119-110

§16503 Sugar Ethanol Loan Guarantee Program

Title 42 › CHAPTER 149 — NATIONAL ENERGY POLICY AND PROGRAMS › SUBCHAPTER XIV — ETHANOL AND MOTOR FUELS › § 16503

Last updated Sep 23, 2026|Official source

Summary

Money can be used to pay for loan guarantees under title XIV to support commercial test projects that make ethanol from sugarcane, bagasse, or other sugarcane leftovers. The Secretary can give these guarantees to projects that aim to prove they can produce ethanol from those feedstocks on a commercial scale. Applicants must show four things: the design was tested in a continuous-operation facility, the project had a full technical review, it will be financially viable with the guarantee, and there is a reasonable chance the loan will be repaid. Guarantees can cover up to 80% of a project’s estimated cost and cannot exceed $50,000,000 per project. The Secretary may add extra guarantees for cost overruns covering up to 80% of the extra costs but not more than 15% of the original guarantee, and must guarantee 100% of principal and interest on those extra guarantees.

Full Legal Text

Title 42, §16503

The Public Health and Welfare, Source: USLM XML via OLRC

(a)In general
Funds may be provided for the cost (as defined in section 661a of title 2) of loan guarantees issued under title XIV to carry out commercial demonstration projects for ethanol derived from sugarcane, bagasse, and other sugarcane byproducts.
(b)Demonstration projects
The Secretary may issue loan guarantees under this section to projects to demonstrate commercially the feasibility and viability of producing ethanol using sugarcane, sugarcane bagasse, and other sugarcane byproducts as a feedstock.
(c)Requirements
An applicant for a loan guarantee under this section may provide assurances, satisfactory to the Secretary, that—
(1)the project design has been validated through the operation of a continuous process facility;
(2)the project has been subject to a full technical review;
(3)the project, with the loan guarantee, is economically viable; and
(4)there is a reasonable assurance of repayment of the guaranteed loan.
(d)Limitations
(1)Maximum guarantee
Except as provided in paragraph (2), a loan guarantee under this section— (A)
(B)shall not exceed $50,000,000 for any 1 project.
(2)Additional guarantees
(A)In general
The Secretary may issue additional loan guarantees for a project to cover—
(i)up to 80 percent of the excess of actual project costs; but
(ii)not to exceed 15 percent of the amount of the original loan guarantee.
(B)Principal and interest
Subject to subparagraph (A), the Secretary shall guarantee 100 percent of the principal and interest of a loan guarantee made under subparagraph (A).

Legislative History

Notes & Related Subsidiaries

Editorial Notes

References in Text

Title XIV, referred to in subsec. (a), is title XIV of Pub. L. 109–58, Aug. 8, 2005, 119 Stat. 1061, which enacted subchapter XIII of this chapter and section 13557 of this title.

Reference

Citations & Metadata

Citation

42 U.S.C. § 16503

Title 42, The Public Health and Welfare

Last Updated

Sep 23, 2026

Release point: 119-110