10 U.S.C. § 8475 — Acceptance of guarantees with gifts for major projects

(a) Acceptance Authority. Subject to (c), the Secretary of the Navy may accept, from one or more donors, a qualified guarantee for completing a major project that benefits the Naval Academy.

(b) Obligation Authority. The amount of a qualified guarantee accepted under this section counts as contract authority, providing obligation authority for federal fiscal and contracting purposes. Funds available for a project with an accepted guarantee may be obligated and spent on the project even if the total funds and other resources available for the project (not counting the guarantee) would not otherwise be enough to pay^* for finishing it.

(c) Notice of Proposed Acceptance. The Secretary of the Navy may not accept a qualified guarantee for a major project until 30 days after a report on the proposed guarantee is submitted to Congress, or, if sooner, 14 days after a copy of that report is provided electronically under section 480 of this title.

(d) Prohibition on Commingling of Funds. The Secretary of the Navy may not enter into any contract or transaction that uses a qualified guarantee and appropriated funds together in the same contract or transaction.

(e) Definitions. In this section:
(1) Major project. A "major project" means a project to purchase, otherwise procure, construct, renovate, or repair real or personal property, where the total cost is, or is estimated to be, at least $1,000,000.
(2) Qualified guarantee. A "qualified guarantee," for a major project, means a guarantee that: (A) one or more people make, tied to a donation just for that project, of cash or securities the Secretary of the Navy determines is enough to defray a substantial part of the project's total cost; (B) is made to help or speed up finishing the project, in reasonable expectation that other donors will contribute enough funds or resources to pay for finishing it; (C) is a written agreement in which the donor promises to provide, in cash or securities, in addition to the donor's other gifts for the project, any extra amount needed to pay for finishing the project if other donors or sources don't provide enough funds or resources; and (D) is backed by either — (i) an irrevocable and unconditional standby letter of credit for the Naval Academy's benefit, in the amount of the guarantee, issued by a major United States commercial bank; or (ii) a qualified account control agreement.
(3) Qualified account control agreement. A "qualified account control agreement," for a donor's guarantee, means an agreement among the donor, the Secretary of the Navy, and a major United States investment management firm that: (A) ensures enough funds or other financial resources are available to pay the guaranteed amount during the guarantee period; (B) provides for a security interest in the account's assets, for the United States for the Naval Academy's benefit, with the highest available priority for liens and security interests under applicable law; (C) requires the donor to maintain account assets worth at least 130 percent of the guaranteed amount; and (D) requires the investment management firm, whenever the account's value drops below what (C) requires, to sell any noncash assets in the account and reinvest the proceeds in Treasury bills issued under section 3104 of title 31.
(4) Major United States commercial bank. A "major United States commercial bank" is a commercial bank that: (A) is an insured bank as defined in section 3 of the Federal Deposit Insurance Act; (B) is headquartered in the United States; and (C) has net assets in a total amount the Secretary of the Navy considers enough to qualify the bank as a major bank.
(5) Major United States investment management firm. A "major United States investment management firm" means any broker, dealer, investment adviser, or provider of investment supervisory services (as those terms are defined in the Securities Exchange Act of 1934 or the Investment Advisers Act of 1940) — or a major United States commercial bank — that: (A) is headquartered in the United States; and (B) holds investment assets for others in a total amount the Secretary of the Navy considers enough to qualify the firm as a major investment management firm.