880 



"(f) The Secretary shall prescribe and collect a fee in connection with guaran- 

 tees made under this section. This fee may not exceed the amount which the 

 Secretary estimate sto be necessary to cover the administrative costs of carrying 

 out this section. Fees collected under this subsection shall be deposited in the 

 revolving fund established under subsection (i) . 



"(g) With respect to any obligation guaranteed under this section, the interest 

 payment paid on such obligation and received by the purchaser thereof (or his 

 successor in interest) shall be included in gross income for the purpose of chapter 

 1 of the Internal Revenue Code of 1954. 



"(h) (1) Payments required to be made as a result of any guarantee made 

 under this section shall be made by the Secretary from funds which may be 

 appropriated to the revolving fund established by subsection (i) or from funds 

 obtained from the Secretary of the Treasury and deposited in such revolving 

 fund pursuant to subsection (i) (2) . 



"(2) If there is a default by a coastal state or unit of general purpose local 

 government in any payment of principal or interest due under a bond or other 

 evidence of indebtedness guaranteed by the Secretary under this section, any 

 holder of such bond or other evidence of indebtedness may demand payment by 

 the Secretary of the unpaid interest on and the unpaid principal of such obliga- 

 tion as they become due. The Secretary, after investigating the facts presented 

 by the holder, shall pay to the holder the amount which is due him, unless the 

 Secretary finds that there was no default by the coastal state or unit of general 

 purpose local government or that such default has been remedied. If the Secre- 

 tary makes a payment under this paragraph, the United States shall have a 

 right of reimbursement against the coastal state or unit of general purpose local 

 government for which the payment was made for the amount of such payment 

 plus interest at the prevailing current rate as determined by the Secretary. If 

 any revenue becomes due to such coastal state or unit of general purix)se local 

 government under section 308(a) of this title, the Secretary shall, in lieu of 

 paying such coastal state or unit of general purpose local government such 

 revenue, deposit such revenue in the revolving fund established under subsection 

 (i) until the right of reimbursement has been satisfied. 



"(3) The Attorney General shall, upon request of the Secretary, take such 

 action as may be appropriate to enforce any right accruing to tlie United States 

 as a result of the issuance of any guarantee under this section. Any sum recovered 

 pursuant to this paragraph shall be paid into the revolving fund established by 

 subsection (i). 



"(i)(l) The Secretary shall establish a revolving fund to provide for the 

 timely payment of any liability incurred as a result of guarantees made under 

 this section, for the payment of costs of administering this section, and for the 

 payment of obligations issued to the Secretary of the Treasury under paragraph 

 (2) of this subsection. This revolving fund shall be comprised of — 

 "(A) receipts from fees collected inider this section : 

 "(B) recoveries under security, subrogation, and other rights ; 

 "(C) reimbursements, interest income, and any other receipts obtained in 

 connection with guarantees made under this section ; 



"(D) proceeds of the obligations issued to the Secretary of the Treasury 

 pursuant to paragraph (2) of this subsection ; and 



"(E) such sums as may be appropriated to carry out the provisions of 

 this section. 

 Funds in the revolving fund not currently needed for the purpose of this section 

 shall be kept on deposit or invested in obligations of the United States or guar- 

 anteed thereby or in obligations, participation, or other instruments which are 

 lawful investments for fiduciary, trust, or public funds. 



"(2) The Secretary may, for the purpose of carrying out the functions of 

 this section, issue obligations to the Secretary of the Treasury only to such 

 extent or in such amounts as may be provided in appropriation Acts. The obliga- 

 tions issued under this paragraph shall have such maturities and bear such rate 

 or rates of interest as shall be determined by the Secretary of the Treasury. The 

 Secretary of the Treasury shall purchase any obligation so issued, and for that 

 purpose he is authorized to use as a public debt transaction the proceeds from 

 the sale of any security issued under the Second Liberty Bond Act. and the 

 purposes for which securities may be issued under that Act are extended to 

 include purchases of the obligations hereunder. Proceeds obtained by the Secre- 

 tary from the issuance of obligations under this paragraph shall be deposited 

 in the revolving fund established in paragraph (1) . 



