§51320 Acceptance of Guarantees with Gifts for Major Projects

Summary

Allows the Maritime Administrator to accept a special donor promise, called a qualified guarantee, to help finish big projects at the United States Merchant Marine Academy. A major project costs at least $1,000,000 to buy, build, renovate, or repair property. A major United States commercial bank is an FDIC‑insured bank headquartered in the U.S. with assets large enough by the Maritime Administrator’s view. A major United States investment management firm is a broker‑dealer, an investment adviser, or a major bank that holds other people’s investments and meets the Administrator’s size test. A qualified guarantee is a donor’s written promise, tied to a donation that covers a big part of the project, to pay any shortfall and speed completion, and it must include either an irrevocable standby letter of credit from a major U.S. commercial bank for the guarantee amount or a qualified account control agreement. A qualified account control agreement is a deal among the donor, the Maritime Administrator, and a major investment firm that keeps funds available, gives the United States top priority on the account, requires the account to hold at least 130 percent of the guaranteed amount, and if the value drops the firm must sell noncash assets and invest the proceeds in Treasury bills under section 3104 of title 31. The Maritime Administrator may accept such guarantees, but only after 30 days from sending a report about the proposed guarantee to Congress. An accepted guarantee counts as contract authority so funds can be obligated and spent even if cash without the guarantee would not finish the project. The Administrator may not use a qualified guarantee and appropriated funds in the same contract or transaction.