---
kind: "section"
citation: "42 U.S.C. § 16501"
title: "42"
title_heading: "The Public Health and Welfare"
number: "16501"
heading: "Commercial byproducts from municipal solid waste and cellulosic biomass loan guarantee program"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/16501"
units:
  - "Chapter 149 — National Energy Policy and Programs"
  - "Subchapter XIV — Ethanol and Motor Fuels"
---

# §16501. Commercial byproducts from municipal solid waste and cellulosic biomass loan guarantee program

- (a) **Definition of municipal solid waste—** In this section, the term “municipal solid waste” has the meaning given the term “solid waste” in [section 6903 of this title](/usc/42/6903.md).
- (b) **Establishment of program—** The [Secretary](/usc/42/15801.md?p=4) shall establish a program to provide guarantees of loans by private institutions for the [construction](/usc/42/300s–3.md?p=7) of facilities for the processing and conversion of municipal solid waste and cellulosic biomass into fuel ethanol and other commercial byproducts.
- (c) **Requirements—** The [Secretary](/usc/42/15801.md?p=4) may provide a [loan guarantee](/usc/42/16371.md?p=8) under [subsection (b)](#b) to an applicant if—
  - (1) without a [loan guarantee](/usc/42/16371.md?p=8), credit is not available to the applicant under reasonable terms or conditions sufficient to finance the [construction](/usc/42/300s–3.md?p=7) of a facility described in [subsection (b)](#b);
  - (2) the prospective earning power of the applicant and the character and value of the security pledged provide a reasonable assurance of repayment of the loan to be guaranteed in accordance with the terms of the loan; and
  - (3) the loan bears interest at a rate determined by the [Secretary](/usc/42/15801.md?p=4) to be reasonable, taking into account the current average yield on outstanding obligations of the United States with remaining periods of maturity comparable to the maturity of the loan.
- (d) **Criteria—** In selecting recipients of [loan guarantees](/usc/42/16371.md?p=8) from among applicants, the [Secretary](/usc/42/15801.md?p=4) shall give preference to proposals that—
  - (1) meet all applicable Federal and [State](/usc/42/15951.md?p=b-2) permitting requirements;
  - (2) are most likely to be successful; and
  - (3) are located in local markets that have the greatest need for the facility because of—
    - (A) the limited availability of land for waste [disposal](/usc/42/2021b.md?p=7);
    - (B) the availability of sufficient quantities of cellulosic biomass; or
    - (C) a high level of demand for fuel ethanol or other commercial byproducts of the facility.
- (e) **Maturity—** A loan guaranteed under [subsection (b)](#b) shall have a maturity of not more than 20 years.
- (f) **Terms and conditions—** The loan agreement for a loan guaranteed under [subsection (b)](#b) shall provide that no provision of the loan agreement may be amended or waived without the consent of the [Secretary](/usc/42/15801.md?p=4).
- (g) **Assurance of repayment—** The [Secretary](/usc/42/15801.md?p=4) shall require that an applicant for a [loan guarantee](/usc/42/16371.md?p=8) under [subsection (b)](#b) provide an assurance of repayment in the form of a performance bond, insurance, collateral, or other means acceptable to the [Secretary](/usc/42/15801.md?p=4) in an amount equal to not less than 20 percent of the amount of the loan.
- (h) **Guarantee fee—** The recipient of a [loan guarantee](/usc/42/16371.md?p=8) under [subsection (b)](#b) shall pay the [Secretary](/usc/42/15801.md?p=4) an amount determined by the [Secretary](/usc/42/15801.md?p=4) to be sufficient to cover the administrative costs of the [Secretary](/usc/42/15801.md?p=4) relating to the [loan guarantee](/usc/42/16371.md?p=8).
- (i) **Full faith and credit—** The full faith and credit of the United States is pledged to the payment of all guarantees made under this section. Any such guarantee made by the [Secretary](/usc/42/15801.md?p=4) shall be conclusive evidence of the eligibility of the loan for the guarantee with respect to principal and interest. The validity of the guarantee shall be incontestable in the hands of a holder of the guaranteed loan.
- (j) **Reports—** Until each guaranteed loan under this section has been repaid in full, the [Secretary](/usc/42/15801.md?p=4) shall annually submit to Congress a report on the activities of the [Secretary](/usc/42/15801.md?p=4) under this section.
- (k) **Authorization of appropriations—** There are authorized to be appropriated such sums as are necessary to carry out this section.
- (l) **Termination of authority—** The authority of the [Secretary](/usc/42/15801.md?p=4) to issue a [loan guarantee](/usc/42/16371.md?p=8) under [subsection (b)](#b) terminates on the date that is 10 years after August 8, 2005.

## Source credit

(Pub. L. 109–58, title XV, § 1510, Aug. 8, 2005, 119 Stat. 1085.)