23 U.S.C. § 122 — Payments to States for bond and other debt instrument financing

This section lets states get federal reimbursement for costs of financing transportation projects with bonds or similar debt. (a) Definition of Eligible Debt Financing Instrument. This defines "eligible debt financing instrument" as a bond or other debt instrument — including a note, certificate, mortgage, or lease agreement — issued by a state, a political subdivision of a state, or a public authority, where the money raised is used for an eligible project under this title. (b) Federal Reimbursement. Subject to (c) and (d), the Secretary may reimburse a state (or a political subdivision) or a public authority for: (1) interest payments on the debt instrument; (2) paying down the debt's principal; (3) the cost of issuing the instrument; (4) the cost of insuring it; and (5) any other incidental cost of selling it, as the Secretary decides. (c) Conditions on Payment. The Secretary can only pay this reimbursement once the state or public authority has followed all the same requirements under this title that would apply if it were instead being paid directly under section 121. (d) Federal Share. The reimbursement under this section can't exceed the normal federal cost-share limit set for the project under section 120. (e) Statutory Construction. This subsection makes clear that a debt instrument being eligible for reimbursement does not mean: (1) the United States has promised, guaranteed, or is obligated to pay the instrument's principal or interest; or (2) any outside party (a "third party") gains a right to sue the United States for payment on the instrument.