---
kind: "section"
citation: "42 U.S.C. § 8402"
title: "42"
title_heading: "The Public Health and Welfare"
number: "8402"
heading: "Loans to assist powerplant acquisitions of air pollution control equipment"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/8402"
units:
  - "Chapter 92 — Powerplant and Industrial Fuel Use"
  - "Subchapter VI — Financial Assistance"
---

# §8402. Loans to assist powerplant acquisitions of air pollution control equipment

- (a) **Authority to make loans—** The [Secretary](/usc/42/8302.md?p=a-1) may, in accordance with the provisions of this section and such rules and regulations as he shall prescribe, make a loan (and may make a commitment to loan) to any [person](/usc/42/8302.md?p=a-2) who owns or operates any [existing electric powerplant](/usc/42/8302.md?p=a-9-A) converting to [coal](/usc/42/8302.md?p=a-5) or other [alternate fuel](/usc/42/8302.md?p=a-6) as its [primary energy source](/usc/42/8302.md?p=a-15) after the effective date of this chapter for the purpose of financing the purchase and [installation](/usc/42/8302.md?p=a-10-A) of one or more certified air pollution control devices for such [electric powerplant](/usc/42/8302.md?p=a-7-A).
- (b) **Limitations and conditions—** A loan made under this section shall—
  - (1) not exceed two-thirds of the cost of purchasing and installing the certified air pollution control devices;
  - (2) have a maturity date not extending beyond 10 years after the date such loan is made;
  - (3) bear interest at a rate not less than (A) a rate determined by the [Secretary](/usc/42/8302.md?p=a-1) of the Treasury, taking into consideration the average market yield of outstanding Treasury obligations of comparable maturity, plus (B) 1 percent;
  - (4) be made on the condition of payment to the [Secretary](/usc/42/8302.md?p=a-1) of a loan fee in an amount equal to (A) such insurance fee as the [Secretary](/usc/42/8302.md?p=a-1) determines is necessary to avoid a Federal revenue loss under this section, plus (B) 1 percent of the loan amount; and
  - (5) be made only if the [Secretary](/usc/42/8302.md?p=a-1) finds that—
    - (A) the financial assistance applied for is not otherwise available from other [Federal agencies](/usc/42/8302.md?p=a-25);
    - (B) the applicant is unable to obtain sufficient funds on reasonable terms and conditions from any other source;
    - (C) there is continued reasonable assurance of full repayment of the principal, interest, and fees; and
    - (D) competition among private entities for the provision of air pollution control devices for [electric powerplants](/usc/42/8302.md?p=a-7-A) using [coal](/usc/42/8302.md?p=a-5) as their [primary energy source](/usc/42/8302.md?p=a-15) to be assisted under this section will be in no way limited or precluded.
- (c) **Allocation and priorities—** In making loans or commitments to loan pursuant to this section, the [Secretary](/usc/42/8302.md?p=a-1) shall—
  - (1) allocate a minimum of 25 percent of available financial assistance to existing small municipal and rural [powerplants](/usc/42/8302.md?p=a-7-A); and
  - (2) give priority consideration to requests for financial assistance by [existing electric powerplants](/usc/42/8302.md?p=a-9-A) subject to any prohibition under subchapter III (or under [section 792 of title 15](/usc/15/792.md)).
- (d) **Definitions—** For purposes of this section—
  - (1) The term “certified pollution control device” means a new identifiable device which—
    - (A) is used, in connection with a [powerplant](/usc/42/8302.md?p=a-7-A), to abate or control atmospheric pollution by removing, altering, disposing, storing, or preventing the emission of pollutants;
    - (B) the appropriate [State](/usc/42/2021b.md?p=14) [air pollution control agency](/usc/42/8302.md?p=a-22) has certified to the [Administrator](/usc/42/4005.md?p=1) of the Environmental Protection [Agency](/usc/42/8262.md?p=1) that such device is needed to meet, and is in conformity with, [State](/usc/42/2021b.md?p=14) requirements for abatement or control of atmospheric pollution or contamination;
    - (C) the [Administrator](/usc/42/4005.md?p=1) of the Environmental Protection [Agency](/usc/42/8262.md?p=1) has certified to the [Secretary](/usc/42/8302.md?p=a-1) as not duplicating or displacing existing air pollution control devices with a remaining useful economic life in excess of 2 years and as otherwise being in furtherance of the requirements and purposes of the Clean Air Act [[42 U.S.C. 7401](/usc/42/7401.md) et seq.];
    - (D) does not constitute or include a building, or a structural component of a building, other than a building used exclusively for the purposes set forth in [subparagraph (A)](#d-1-A); and
    - (E) the [construction](/usc/42/8302.md?p=a-14) of which began after the effective date of this chapter.
  - (2) The term “small municipal or rural cooperative [electric powerplant](/usc/42/8302.md?p=a-7-A)” means an [electric generating unit](/usc/42/8302.md?p=a-7-B), which—
    - (A) by design is not capable of consuming fuel at a fuel heat input rate in excess of a rate determined appropriate by the [Secretary](/usc/42/8302.md?p=a-1) by rule; and
    - (B) is owned or operated by a municipality or a rural electric cooperative.
- (e) **Records—**
  - (1) The [Secretary](/usc/42/8302.md?p=a-1) shall require all [persons](/usc/42/8302.md?p=a-2) receiving financial assistance under this section to keep such records as the [Secretary](/usc/42/8302.md?p=a-1) shall prescribe, including records which fully disclose the amount and disposition by such recipient of the proceeds of such assistance, the total cost of the [project](/usc/42/13641.md?p=2) or undertaking in connection with which such assistance was given or used, the amount of that portion of the cost of the [project](/usc/42/13641.md?p=2) or undertaking supplied by other sources, and such other records as will facilitate an effective audit.
  - (2) The [Secretary](/usc/42/8302.md?p=a-1) and the Comptroller General of the United States, or any of their duly authorized representatives, shall, until the later of—
    - (A) the expiration of 3 years after completion of the [project](/usc/42/13641.md?p=2) or undertaking referred to in [subsection (a)](#a), or
    - (B) full repayment of interest and principal on a loan made under this section, occurs,

    have access for the purposes of audit, evaluation, examination to any books, documents, papers, and records of such receipts which in the opinion of the [Secretary](/usc/42/8302.md?p=a-1) or the Comptroller General may be related or pertinent to such loan.

- (f) **Default—**
  - (1) If there is a default in any payment by the obligor of interest or principal due under a loan entered into by the [Secretary](/usc/42/8302.md?p=a-1) under this section and such default has continued for 90 days, the [Secretary](/usc/42/8302.md?p=a-1) has the right to demand payment of such unpaid amount, unless the [Secretary](/usc/42/8302.md?p=a-1) finds that such default has been rem­edied, or a satisfactory plan to remedy such default by the obligor has been accepted by the [Secretary](/usc/42/8302.md?p=a-1).
  - (2) In demanding payment of unpaid interest or principal by the obligor, the [Secretary](/usc/42/8302.md?p=a-1) has all rights specified in the loan-related agreements with respect to any security which he held with respect to the loan, including the authority to complete, maintain, operate, lease, sell, or otherwise dispose of any property acquired pursuant to such loan or related agreements.
  - (3) If there is a default under any loan, the [Secretary](/usc/42/8302.md?p=a-1) shall notify the Attorney General who shall take such action against the obligator or other parties liable thereunder as is, in his discretion, necessary to protect the interests of the United States. The holder of such loan shall make available to the United States all records and evidence necessary to prosecute any such suit.
- (g) **Deposit of receipts—** Amounts received by the [Secretary](/usc/42/8302.md?p=a-1) as principal, interest, fees, proceeds from security acquired following default, or other amounts received by the [Secretary](/usc/42/8302.md?p=a-1) in connection with loans made under this section shall be paid into the Treasury of the United States as miscellaneous receipts.
- (h) **Authorization of appropriation—** There are hereby authorized to be appropriated to the [Secretary](/usc/42/8302.md?p=a-1) such sums as may be necessary to carry out the purposes of this section, but not to exceed $400,000,000 for fiscal year 1979 and $400,000,000 for fiscal year 1980. Authority granted to the [Secretary](/usc/42/8302.md?p=a-1) under [subsection (a)](#a) may be exercised only to the extent as may be provided in advance in appropriation Acts.

## Source credit

(Pub. L. 95–620, title VI, § 602, Nov. 9, 1978, 92 Stat. 3327.)

## Notes

### Editorial Notes

### References in Text

The effective date of this chapter, referred to in subsecs. (a) and (d)(1)(E), is the effective date of Pub. L. 95–620. See section 901 of Pub. L. 95–620, set out as an Effective Date note under section 8301 of this title.

The Clean Air Act, referred to in subsec. (d)(1)(C), is act July 14, 1955, ch. 360, 69 Stat. 322, which is classified generally to chapter 85 (§ 7401 et seq.) of this title. For complete classification of this Act to the Code, see Short Title note set out under section 7401 of this title and Tables.