---
kind: "section"
citation: "42 U.S.C. § 16503"
title: "42"
title_heading: "The Public Health and Welfare"
number: "16503"
heading: "Sugar ethanol loan guarantee program"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/16503"
units:
  - "Chapter 149 — National Energy Policy and Programs"
  - "Subchapter XIV — Ethanol and Motor Fuels"
---

# §16503. Sugar ethanol loan guarantee program

- (a) **In general—** Funds may be provided for the cost (as defined in [section 661a of title 2](/usc/2/661a.md)) of [loan guarantees](/usc/42/16371.md?p=8) issued under title XIV[^1] to carry out commercial demonstration [projects](/usc/42/16371.md?p=12) for ethanol derived from sugarcane, bagasse, and other sugarcane byproducts.
- (b) **Demonstration projects—** The [Secretary](/usc/42/15801.md?p=4) may issue [loan guarantees](/usc/42/16371.md?p=8) under this section to [projects](/usc/42/16371.md?p=12) to demonstrate commercially the feasibility and viability of producing ethanol using sugarcane, sugarcane bagasse, and other sugarcane byproducts as a feedstock.
- (c) **Requirements—** An applicant for a [loan guarantee](/usc/42/16371.md?p=8) under this section may provide assurances, satisfactory to the [Secretary](/usc/42/15801.md?p=4), that—
  - (1) the [project](/usc/42/16371.md?p=12) design has been validated through the operation of a continuous process facility;
  - (2) the [project](/usc/42/16371.md?p=12) has been subject to a full technical review;
  - (3) the [project](/usc/42/16371.md?p=12), with the [loan guarantee](/usc/42/16371.md?p=8), is economically viable; and
  - (4) there is a reasonable assurance of repayment of the guaranteed loan.
- (d) **Limitations—**
  - (1) **Maximum guarantee—** Except as provided in [paragraph (2)](#d-2), a [loan guarantee](/usc/42/16371.md?p=8) under this section—
    - (A) may be issued for up to 80 percent of the estimated cost of a [project](/usc/42/16371.md?p=12); but
    - (B) shall not exceed $50,000,000 for any 1 [project](/usc/42/16371.md?p=12).
  - (2) **Additional guarantees—**
    - (A) **In general—** The [Secretary](/usc/42/15801.md?p=4) may issue additional [loan guarantees](/usc/42/16371.md?p=8) for a [project](/usc/42/16371.md?p=12) to cover—
      - (i) up to 80 percent of the excess of actual [project](/usc/42/16371.md?p=12) costs; but
      - (ii) not to exceed 15 percent of the amount of the original [loan guarantee](/usc/42/16371.md?p=8).
    - (B) **Principal and interest—** Subject to [subparagraph (A)](#d-2-A), the [Secretary](/usc/42/15801.md?p=4) shall guarantee 100 percent of the principal and interest of a [loan guarantee](/usc/42/16371.md?p=8) made under [subparagraph (A)](#d-2-A).

## Footnotes

[^1]: See References in Text note below.

## Source credit

(Pub. L. 109–58, title XV, § 1516, Aug. 8, 2005, 119 Stat. 1091.)

## Notes

### Editorial Notes

### References in Text

Title XIV, referred to in subsec. (a), is title XIV of Pub. L. 109–58, Aug. 8, 2005, 119 Stat. 1061, which enacted subchapter XIII of this chapter and section 13557 of this title.