Section 129 Loans

Section 129(a)(7) of Title 23 codifies the provisions for a Section 129 loan.

Title 23 - Chapter 1

§ 129. Toll roads, bridges, tunnels, and ferries 

(8) Loans. -

(A) In general. -

(i) Loans. - Using amounts made available under this title, a State may loan to a public or private entity constructing or proposing to construct under this section a toll facility or non-toll facility with a dedicated revenue source an amount equal to all or part of the Federal share of the cost of the project if the project has a revenue source specifically dedicated to the project.

(ii) Dedicated revenue sources. - Dedicated revenue sources for non-toll facilities include excise taxes, sales taxes, motor vehicle use fees, tax on real property, tax increment financing, and such other dedicated revenue sources as the Secretary determines appropriate.

(B) Compliance with federal laws. - As a condition of receiving a loan under this paragraph, the public or private entity that receives the loan shall ensure that the project will be carried out in accordance with this title and any other applicable Federal law, including any applicable provision of a Federal environmental law.

(C) Subordination of debt. - The amount of any loan received for a project under this paragraph may be subordinated to any other debt financing for the project.

(D) Obligation of funds loaned. - Funds loaned under this paragraph may only be obligated for projects under this paragraph.

(E) Repayment. - The repayment of a loan made under this paragraph shall commence not later than 5 years after date on which the facility that is the subject of the loan is open to traffic.

(F) Term of loan. - The term of a loan made under this paragraph shall not exceed 30 years from the date on which the loan funds are obligated.

(G) Interest. - A loan made under this paragraph shall bear interest at or below market interest rates, as determined by the State, to make the project that is the subject of the loan feasible.

(H) Reuse of funds. - Amounts repaid to a State from a loan made under this paragraph may be obligated -

(i) for any purpose for which the loan funds were available under this title; and

(ii) for the purchase of insurance or for use as a capital reserve for other forms of credit enhancement for project debt in order to improve credit market access or to lower interest rates for projects eligible for assistance under this title.

(I) Guidelines. - The Secretary shall establish procedures and guidelines for making loans under this paragraph.