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What happens if the power line project “goes bust”?  And, can the bank/lending agency seize the land on which the improvements are placed?

Q: What happens if the power line project “goes bust”? And, can the bank/lending agency seize the land on which the improvements are placed?

Feb 11, 2016

The short answer is “no.” The lending agency will be the Rural Utility Service, which is a division of the US Department of Agriculture (USDA) administering the rural development loan program. The loan will be secured by the infrastructure improvements – not the land on which it sits – and pursuant to a loan contract (hence the need to have a limited waiver of sovereign immunity). A vast majority of the new power line will be located within a Mohave County right-of-way along Diamond Bar Road or on Bureau of Land Management (BLM) holdings, with the remaining portion located on tribal land. The USDA has no jurisdiction over tribal entities.

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