46 U.S.C. § 51320 — Acceptance of guarantees with gifts for major projects
submitted 9 years ago by Pub. L. 115-91 to r/title-46-SHIPPING · 832 words · no verdicts yet
This law lets the Maritime Administrator accept financial guarantees tied to large donated projects. A guarantee must be backed by a bank letter of credit or a similar investment account agreement. The Administrator must wait 30 days after notifying Congress, and cannot mix guarantee funds with regular appropriations.
(a) Definitions. A "major project" means a project to buy, build, renovate, or repair real or personal property that costs at least $1,000,000. A "major United States commercial bank" means an insured, U.S.-headquartered bank with enough total assets for the Maritime Administrator to consider it major. A "major United States investment management firm" means a broker or dealer, an investment adviser, or a major U.S. commercial bank that is headquartered in the U.S. and holds enough assets for others to count as a major investment firm.
A "qualified guarantee" for a major project is a guarantee that: (A) comes from donors giving cash or securities the Administrator finds sufficient to cover a substantial part of the project's cost; (B) is meant to speed up the project while reasonably expecting other donors to contribute enough too; (C) is a written agreement where the donor promises to add more cash or securities if other donors don't provide enough to finish the project; and (D) comes with either an irrevocable standby letter of credit from a major U.S. commercial bank, for the Academy's benefit, or a qualified account control agreement.
A "qualified account control agreement" is an agreement between the donor, the Administrator, and a major investment firm that: (A) makes sure enough money is available to pay the guaranteed amount during the guarantee period; (B) gives the U.S. the highest-priority security interest in the account's assets, for the Academy's benefit; (C) requires the donor to keep assets worth at least 130 percent of the guaranteed amount in the account; and (D) requires the firm to sell any noncash assets and reinvest in Treasury bills whenever the account's value drops below that 130 percent level.
(b) Acceptance Authority. Subject to subsection (d), the Administrator may accept a qualified guarantee from one or more donors to complete a major project benefiting the Academy*.
(c) Obligation Authority. An accepted guarantee counts as contract authority, giving obligation authority under federal fiscal rules. Project funds can be spent even if the total money and resources available for the project -- not counting the guarantee itself -- isn't enough on its own to finish the project.
(d) Notice. The Administrator cannot accept a guarantee until 30 days after sending Congress a report on the facts of the proposed guarantee.
(e) Prohibition on Commingling Funds. The Administrator cannot combine a qualified guarantee with appropriated federal funds in the same contract or transaction.
In this section:
The term “major project” means a project estimated to cost at least $1,000,000 for—
the purchase or other procurement of real or personal property; or
the construction, renovation, or repair of real or personal property.
The term “major United States commercial bank” means a commercial bank that—
is an insured bank (as defined in section 3(h) of the Federal Deposit Insurance Act (12 U.S.C. 1813(h)));
is headquartered in the United States; and
has total net assets of an amount considered by the Maritime Administrator to qualify the bank as a major bank.
The term “major United States investment management firm” means—
any broker or dealer (as such terms are defined in section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c));
any investment adviser or provider of investment supervisory services (as such terms are defined in section 202 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–2)); or
a major United States commercial bank that—
is headquartered in the United States; and
holds for the account of others investment assets in a total amount considered by the Maritime Administrator to qualify the bank as a major investment management firm.
The term “qualified guarantee”, with respect to a major project, means a guarantee that—
is made by 1 or more persons in connection with a donation for the project of a total amount in cash or securities that the Maritime Administrator determines is sufficient to defray a substantial portion of the total cost of the project;
is made to facilitate or expedite the completion of the project in reasonable anticipation that other donors will contribute sufficient funds or other resources in amounts sufficient to pay for completion of the project;
is set forth as a written agreement providing that the donor will furnish in cash or securities, in addition to the donor’s other gift or gifts for the project, any additional amount that may become necessary for paying the cost of completing the project by reason of a failure to obtain from other donors or sources funds or other resources in amounts sufficient to pay the cost of completing the project; and
is accompanied by—
an irrevocable and unconditional standby letter of credit for the benefit of the United States Merchant Marine Academy* that is in the amount of the guarantee and is issued by a major United States commercial bank; or
a qualified account control agreement.
The term “qualified account control agreement”, with respect to a guarantee of a donor, means an agreement among the donor, the Maritime Administrator, and a major United States investment management firm that—
ensures the availability of sufficient funds or other financial resources to pay the amount guaranteed during the period of the guarantee;
provides for the perfection of a security interest in the assets of the account for the United States for the benefit of the United States Merchant Marine Academy with the highest priority available for liens and security interests under applicable law;
requires the donor to maintain in an account with the investment management firm assets having a total value that is not less than 130 percent of the amount guaranteed; and
requires the investment management firm, whenever the value of the account is less than the value required to be maintained under subparagraph (C), to liquidate any noncash assets in the account and reinvest the proceeds in Treasury bills issued under section 3104 of title 31.
Subject to subsection (d), the Maritime Administrator may accept a qualified guarantee from a donor or donors for the completion of a major project for the benefit of the United States Merchant Marine Academy.
The amount of a qualified guarantee accepted under this section shall be considered as contract authority to provide obligation authority for purposes of Federal fiscal and contractual requirements. Funds available for a project for which such a guarantee has been accepted may be obligated and expended for the project without regard to whether the total amount of funds and other resources available for the project (not taking into account the amount of the guarantee) is sufficient to pay for completion of the project.
The Maritime Administrator may not accept a qualified guarantee under this section for the completion of a major project until 30 days after the date on which a report of the facts concerning the proposed guarantee is submitted to Congress.
The Maritime Administrator may not enter into any contract or other transaction involving the use of a qualified guarantee and appropriated funds in the same contract or transaction.
Source credit: (Added Pub. L. 115–91, div. C, title XXXV, § 3510(a), Dec. 12, 2017, 131 Stat. 1916.)
- 2017Enacted · Pub. L. 115-91 · 131 Stat. 1916
A history note hasn’t been published yet. The record shows enactment by Pub. L. 115-91 on 2017-12-12.
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