§421e Municipal and Industrial Water Supply Delivery and Distribution; Allocation of Loan Funds; Loan Repayment Contract Requirements; Rate of Interest

Summary

Municipal and industrial water delivery and distribution are allowed uses for a project unless the law that approved the project says otherwise. When needed, loan money must be split between irrigation and municipal/industrial uses in a way the Secretary accepts. Loan agreements must make the borrower pay interest on the unpaid loan amount assigned each year to municipal and industrial uses, including interest during construction. The interest rate is the one in the project’s approving law, or if there is none, a rate set by the Secretary of the Treasury at the start of the fiscal year when the contract (or its amendment) is signed. That rate is based on the Treasury’s average rate for marketable securities not due or callable for 15 years and is rounded to the nearest one‑eighth of one percent.