619 



(2) Criteria under which the Secretary shall 

 review each coastal state's compliance with the 

 requirements of subsection (g)(2>. 



(3) Criteria and procedures for evaluating the 

 extent to which any loan or guarantee under 

 subsection (d) (1) or (2) which is applied for 

 by any coastal state or unit of general purpose 

 local government can be repaid through its ordi- 

 nary methods and rates for generating tax reve- 

 nues. Such procedures shall require such state or 

 unit to submit to the Secretary such information 

 which is specified by the Secretary to be neces- 

 sary for such evaluation, including, but not 

 limited to — 



(A) a statement as to the number of addi- 

 tional individuals who are expected to become 

 employed in the new or expanded coastal en- 

 ergy activity involved, and the related new 

 population, who reside in such state or unit; 



(B) a description, and the estimated costs, 

 of the new or improved public facilities or 

 public services needed or likely to be needed 

 as a result of such expected employment and 

 related new population; 



(C) a projection of such state's or unit's 

 estimated tax receipts during such reasonable 

 time thereafter, not to exceed 30 years, which 

 will be available for the repayment of such 

 loan or guarantee; and 



(D) a proposed repayment schedule. 

 The procedures required by this paragraph shall 

 also provide for the periodic verification, review, 

 and modification (if necessary) by the Secretary 

 of the information or other material required to 

 be submitted pursuant to this paragraph. 



(4) Requirements, terms, and conditions 

 (which may include the posting of security) 

 which shall be imposed by the Secretary, in con- 

 nection with loans and guarantees made under 

 subsections (d) (1) and (2), in order to assure 

 repayment within the time fixed, to assure that 

 the proceeds thereof may not be used to pro- 

 vide public services for an unreasonable length 

 of time, and otherwise to protect the financial 

 interests of the United States. 



(5) Criteria under which the Secretary shall 

 establish rates of interest on loans made under 

 subsections (d) (1) and (3). Such rates shall 

 not exceed the current average market yield on 

 outstanding marketable obligations of the United 

 States with remaining periods to maturity com- 

 parable to the maturity of such loans. 



In developing rules and regulations under this sub- 

 section, the Secretary shall, to the extent prac- 

 ticable, request the views of, or consult with, ap- 

 propriate persons regarding impacts resulting from 

 coastal energy activity. 



(f) (1) Bonds or other evidences of indebtedness 

 guaranteed imder subsection (d) (2) shall be guar- 

 anteed on such terms and conditions as the Secre- 

 tary shall prescribe, except that — 



(A) no guarantee shall be made unless the 

 indebtedness involved will be completely amor- 

 tized within a reasonable period, not to exceed 

 30 years ; 



(B) no guarantee shall be made unless the 

 Secretary determines that such bonds or other 

 evidences of indebtedness will — 



(i) be issued only to investors who meet the 

 requirements prescribed by the Secretary, or, 

 if an offering to the public is contemplated, be 

 underwritten upon terms and conditions ap- 

 proved by the Secretary ; 



(ii) bear interest at a rate found not to be 

 excessive by the Secretary; and 



(iii) contain, or be subject to, repayment, 

 maturity, and other provisions which are sat- 

 isfactory to the Secretary; 



(C) the approval of the Secretary of the 

 Treasury shall be required with respect to any 

 such guarantee, unless the Secretary of the 

 Treasury waives such approval; and 



(D) no guarantee shall be made after Septem- 

 ber 30, 1986. 



(2) The fuU faith and credit of the United States 

 is pledged to the payment, imder paragraph (5), 

 of any default on any indebtedness guaranteed 

 under subsection (d) (2) . Any such guarantee made 

 by the Secretary shall be conclusive evidence of the 

 eligibility of the obligation involved for such guar- 

 antee, and the validity of any such guarantee so 

 made shall be incontestable in the hands of a holder 

 of the guaranteed obligation, except for fraud or 

 material misrepresentation on the part of the 

 holder, or known to the holder at the time acquired. 



( 3 ) The Secretary shall prescribe and collect fees 

 in connection with guarantees made under subsec- 

 tion (d) (2) . These fees may not exceed the amount 

 which the Secretary estimates to be necessary to 

 cover the administrative costs pertaining to such 

 guarantees. 



(4) The interest paid on any obligation which is 

 guaranteed under subsection (d)(2) and which is 

 received by the purchaser thereof (or the pur- 

 chaser's successor in interest) , shall be included in 

 gross income for the purpose of chapter 1 of the 

 Internal Revenue Code of 1954. The Secretary may 

 pay out of the Fund to the coastal state or the unit 

 of general purpose local government issuing such 

 obligations not more than such portion of the in- 

 terest on such obligations as exceeds the amount of 

 interest that would be due at a comparable rate de- 

 termined for loans made under subsection (d) (1). 



(5) (A) Payments required to be made as a re- 

 sult of any guarantee made under subsection (d) 

 (2) shall be made by the Secretary from sums ap- 

 propriated to the Fund or from, moneys obtained 

 from the Secretary of the Treasury pursuant to 

 paragraph (6). 



(B) If there is a default by a coastal state or imit 

 of general purpose local government in any pay- 

 ment of principal or interest due under a bond or 

 other evidence of indebtedness guaranteed by the 

 Secretary under subsection (d) (2), 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 obli- 

 gation as they become due. The Secretary, after 

 investigating the facts presented by the holder, 



