US (United States) Code. Title 15. Chapter 45: Emergency Loan Guarantees to Business Enterprises

Codificación normativa de EEUU (Estados Unidos). Legislación federal estadounidense # Commerce and Trade

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-CITE-

15 USC CHAPTER 45 - EMERGENCY LOAN GUARANTEES TO BUSINESS

ENTERPRISES 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 45 - EMERGENCY LOAN GUARANTEES TO BUSINESS ENTERPRISES

.

-HEAD-

CHAPTER 45 - EMERGENCY LOAN GUARANTEES TO BUSINESS ENTERPRISES

-MISC1-

Sec.

1841. Emergency Loan Guarantee Board; establishment; membership;

voting.

1842. Authority for loan guarantees; terms and conditions.

1843. Limitations and conditions of loan guarantees.

(a) Necessary findings.

(b) Term of loans; renewal.

(c) Interest rates, determination; guarantee fee.

1844. Security for loan guarantees.

1845. Requirements applicable to loan guarantees.

(a) Stock dividends or other payments, prohibition;

waiver.

(b) Managerial changes.

(c) Financial statement; access to documents.

(d) Exhaustion of remedies.

(e) Protective provisions; advances.

(f) Loan security, priority; collateral.

1846. Powers and duties.

(a) Board; inspection of documents; disapproval of

certain transactions.

(b) General Accounting Office; audit; report to Board

and Congress.

1847. Maximum obligation.

1848. Emergency loan guarantee fund.

(a) Establishment; use; investment.

(b) Guarantee fee; deposits in fund.

(c) Payments; issuance of notes or other obligations

when fund moneys insufficient: forms and

denominations, maturities, terms and

conditions, interest rate; public debt

transaction.

1849. Federal Reserve banks as fiscal agents.

1850. Protection of Government's interest.

(a) Attorney General, enforcement authority; payments

into emergency loan guarantee fund.

(b) Recovery rights; subrogation.

1851. Reports to Congress; recommendations.

1852. Termination date.

-CITE-

15 USC Sec. 1841 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 45 - EMERGENCY LOAN GUARANTEES TO BUSINESS ENTERPRISES

-HEAD-

Sec. 1841. Emergency Loan Guarantee Board; establishment;

membership; voting

-STATUTE-

There is created an Emergency Loan Guarantee Board (referred to

in this chapter as the ''Board'') composed of the Secretary of the

Treasury, as Chairman, the Chairman of the Board of Governors of

the Federal Reserve System, and the Chairman of the Securities and

Exchange Commission. Decisions of the Board shall be made by

majority vote.

-SOURCE-

(Pub. L. 92-70, Sec. 2, Aug. 9, 1971, 85 Stat. 178.)

-MISC1-

SHORT TITLE

Section 1 of Pub. L. 92-70 provided that: ''This Act (enacting

this chapter) may be cited as the 'Emergency Loan Guarantee Act'.''

EMERGENCY STEEL LOAN GUARANTEES AND EMERGENCY OIL AND GAS

GUARANTEED LOANS

Pub. L. 106-51, Aug. 17, 1999, 113 Stat. 252, as amended by Pub.

L. 106-102, title VII, Sec. 734, Nov. 12, 1999, 113 Stat. 1478;

Pub. L. 107-63, title III, Sec. 336(a), Nov. 5, 2001, 115 Stat.

472, provided that:

''CHAPTER 1

''Sec. 101. Emergency Steel Loan Guarantee Program. (a) Short

Title. - This chapter may be cited as the 'Emergency Steel Loan

Guarantee Act of 1999'.

''(b) Congressional Findings. - Congress finds that -

''(1) the United States steel industry has been severely harmed

by a record surge of more than 40,000,000 tons of steel imports

into the United States in 1998, caused by the world financial

crisis;

''(2) this surge in imports resulted in the loss of more than

10,000 steel worker jobs in 1998, and was the imminent cause of

three bankruptcies by medium-sized steel companies, Acme Steel,

Laclede Steel, and Geneva Steel;

''(3) the crisis also forced almost all United States steel

companies into -

''(A) reduced volume, lower prices, and financial losses; and

''(B) an inability to obtain credit for continued operations

and reinvestment in facilities;

''(4) the crisis also has affected the willingness of private

banks and investment institutions to make loans to the United

States steel industry for continued operation and reinvestment in

facilities;

''(5) these steel bankruptcies, job losses, and financial

losses are also having serious negative effects on the tax base

of cities, counties, and States, and on the essential health,

education, and municipal services that these government entities

provide to their citizens; and

''(6) a strong steel industry is necessary to the adequate

defense preparedness of the United States in order to have

sufficient steel available to build the ships, tanks, planes, and

armaments necessary for the national defense.

''(c) Definitions. - For purposes of this section:

''(1) Board. - The term 'Board' means the Loan Guarantee Board

established under subsection (e).

''(2) Program. - The term 'Program' means the Emergency Steel

Guarantee Loan Program established under subsection (d).

''(3) Qualified steel company. - The term 'qualified steel

company' means any company that -

''(A) is incorporated under the laws of any State;

''(B) is engaged in the production and manufacture of a

product defined by the American Iron and Steel Institute as a

basic steel mill product, including ingots, slab and billets,

plates, flat-rolled steel, sections and structural products,

bars, rail type products, pipe and tube, and wire rod; and

''(C) has experienced layoffs, production losses, or

financial losses since the beginning of the steel import

crisis, in January 1998 or that operates substantial assets of

a company that meets these qualifications.

''(d) Establishment of Emergency Steel Guarantee Loan Program. -

There is established the Emergency Steel Guarantee Loan Program, to

be administered by the Board, the purpose of which is to provide

loan guarantees to qualified steel companies in accordance with

this section.

''(e) Loan Guarantee Board Membership. - There is established a

Loan Guarantee Board, which shall be composed of -

''(1) the Secretary of Commerce;

''(2) the Chairman of the Board of Governors of the Federal

Reserve System, or a member of the Board of Governors of the

Federal Reserve System designated by the Chairman, who shall

serve as Chairman of the Board; and

''(3) the Chairman of the Securities and Exchange Commission,

or a commissioner of the Securities and Exchange Commission

designated by the Chairman.

''(f) Loan Guarantee Program. -

''(1) Authority. - The Program may guarantee loans provided to

qualified steel companies by private banking and investment

institutions in accordance with the procedures, rules, and

regulations established by the Board.

''(2) Total guarantee limit. - The aggregate amount of loans

guaranteed and outstanding at any one time under this section may

not exceed $1,000,000,000.

''(3) Individual guarantee limit. - The aggregate amount of

loans guaranteed under this section with respect to a single

qualified steel company may not exceed $250,000,000.

''(4) Timelines. - The Board shall approve or deny each

application for a guarantee under this section as soon as

possible after receipt of such application.

''(5) Additional costs. - For the additional cost of the loans

guaranteed under this subsection, including the costs of

modifying the loans as defined in section 502 of the

Congressional Budget Act of 1974 (2 U.S.C. 661a), there is

appropriated $140,000,000 to remain available until expended.

''(g) Requirements for Loan Guarantees. - A loan guarantee may be

issued under this section upon application to the Board by a

qualified steel company pursuant to an agreement to provide a loan

to that qualified steel company by a private bank or investment

company, if the Board determines that -

''(1) credit is not otherwise available to that company under

reasonable terms or conditions sufficient to meet its financing

needs, as reflected in the financial and business plans of that

company;

''(2) the prospective earning power of that company, together

with the character and value of the security pledged, furnish

reasonable assurance of repayment of the loan to be guaranteed in

accordance with its terms;

''(3) the loan to be guaranteed bears interest at a rate

determined by the Board 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 such loan;

''(4) the company has agreed to an audit by the General

Accounting Office prior to the issuance of the loan guarantee and

annually thereafter while any such guaranteed loan is

outstanding; and

''(5) in the case of a purchaser of substantial assets of a

qualified steel company, the qualified steel company establishes

that it is unable to reorganize itself.

''(h) Terms and Conditions of Loan Guarantees. -

''(1) Loan duration. - All loans guaranteed under this section

shall be payable in full not later than December 31, 2015, and

the terms and conditions of each such loan shall provide that the

loan may not be amended, or any provision thereof waived, without

the consent of the Board.

''(2) Loan security. - Any commitment to issue a loan guarantee

under this section shall contain such affirmative and negative

covenants and other protective provisions that the Board

determines are appropriate. The Board shall require security for

the loans to be guaranteed under this section at the time at

which the commitment is made.

''(3) Fees. - A qualified steel company receiving a guarantee

under this section shall pay a fee to the Department of the

Treasury to cover costs of the program, but in no event shall

such fee exceed an amount equal to 0.5 percent of the outstanding

principal balance of the guaranteed loan.

''(4) Guarantee level. -

''(A) In general. - Except as provided in subparagraphs (B)

and (C), any loan guarantee provided under this section shall

not exceed 85 percent of the amount of principal of the loan.

''(B) Increased level one. - A loan guarantee may be provided

under this section in excess of 85 percent, but not more than

90 percent, of the amount of principal of the loan, if -

''(i) the aggregate amount of loans guaranteed at such

percentage and outstanding under this section at any one time

does not exceed $100,000,000; and

''(ii) the aggregate amount of loans guaranteed at such

percentage under this section with respect to a single

qualified steel company does not exceed $50,000,000.

''(C) Increased level two. - A loan guarantee may be provided

under this section in excess of 85 percent, but not more than

95 percent, of the amount of principal of the loan, if -

''(i) the aggregate amount of loans guaranteed at such

percentage and outstanding under this section at any one time

does not exceed $100,000,000; and

''(ii) the aggregate amount of loans guaranteed at such

percentage under this section with respect to a single

qualified steel company does not exceed $50,000,000.

''(i) Reports to Congress. - The Secretary of Commerce shall

submit to Congress a full report of the activities of the Board

under this section during each of fiscal years 1999 and 2000, and

annually thereafter, during such period as any loan guaranteed

under this section is outstanding.

''(j) Salaries and Administrative Expenses. - For necessary

expenses to administer the Program, $5,000,000 is appropriated to

the Department of Commerce, to remain available until expended,

which may be transferred to the Office of the Assistant Secretary

for Trade Development of the International Trade Administration.

''(k) Termination of Guarantee Authority. - The authority of the

Board to make commitments to guarantee any loan under this section

shall terminate on December 31, 2003.

''(l) Regulatory Action. - The Board shall issue such final

procedures, rules, and regulations as may be necessary to carry out

this section not later than 60 days after the date of the enactment

of this Act (Aug. 17, 1999).

''(m) Iron Ore Companies. -

''(1) In general. - Subject to the requirements of this

subsection, an iron ore company incorporated under the laws of

any State shall be treated as a qualified steel company for

purposes of the Program.

''(2) Total guarantee limit for iron ore company. - Of the

aggregate amount of loans authorized to be guaranteed and

outstanding at any one time under subsection (f)(2), an amount

not to exceed $30,000,000 shall be loans with respect to iron ore

companies.

''FEDERAL ADMINISTRATIVE AND TRAVEL EXPENSES

''(RESCISSIONS)

''Sec. 102. (a) Of the funds available in the nondefense category

to the agencies of the Federal Government, $145,000,000 are hereby

rescinded: Provided, That rescissions pursuant to this subsection

shall be taken only from administrative and travel accounts:

Provided further, That rescissions shall be taken on a pro rata

basis from funds available to every Federal agency, department, and

office in the executive branch, including the Office of the

President.

''(b) Within 30 days after the date of the enactment of this Act

(Aug. 17, 1999), the Director of the Office of Management and

Budget shall submit to the Committees on Appropriations of the

House of Representatives and the Senate a listing of the amounts by

account of the reductions made pursuant to the provisions of

subsection (a) of this section.

''CHAPTER 2

''Sec. 201. Petroleum Development Management. (a) Short Title. -

This chapter may be cited as the 'Emergency Oil and Gas Guaranteed

Loan Program Act'.

''(b) Findings. - Congress finds that -

''(1) consumption of foreign oil in the United States is

estimated to equal 56 percent of all oil consumed, and that

percentage could reach 68 percent by 2010 if current prices

prevail;

''(2) the number of oil and gas rigs operating in the United

States is at its lowest since 1944, when records of this tally

began;

''(3) if prices do not increase soon, the United States could

lose at least half its marginal wells, which in aggregate produce

as much oil as the United States imports from Saudi Arabia;

''(4) oil and gas prices are unlikely to increase for at least

several years;

''(5) declining production, well abandonment, and greatly

reduced exploration and development are shrinking the domestic

oil and gas industry;

''(6) the world's richest oil producing regions in the Middle

East are experiencing increasingly greater political instability;

''(7) United Nations policy may make Iraq the swing oil

producing nation, thereby granting Saddam Hussein tremendous

power;

''(8) reliance on foreign oil for more than 60 percent of our

daily oil and gas consumption is a national security threat;

''(9) the level of United States oil security is directly

related to the level of domestic production of oil, natural gas

liquids, and natural gas; and

''(10) a national security policy should be developed that

ensures that adequate supplies of oil are available at all times

free of the threat of embargo or other foreign hostile acts.

''(c) Definitions. - In this section:

''(1) Board. - The term 'Board' means the Loan Guarantee Board

established by subsection (e).

''(2) Program. - The term 'Program' means the Emergency Oil and

Gas Guaranteed Loan Program established by subsection (d).

''(3) Qualified oil and gas company. - The term 'qualified oil

and gas company' means a company that -

''(A) is -

''(i) an independent oil and gas company (within the

meaning of section 57(a)(2)(B)(i) of the Internal Revenue

Code of 1986 (26 U.S.C. 57(a)(2)(B)(i))); or

''(ii) a small business concern under section 3 of the

Small Business Act (15 U.S.C. 632) (or a company based in

Alaska, including an Alaska Native Corporation created

pursuant to the Alaska Native Claims Settlement Act (43

U.S.C. 1601 et seq.)) that is an oil field service company

whose main business is providing tools, products, personnel,

and technical solutions on a contractual basis to exploration

and production operators that drill, complete wells, and

produce, transport, refine, and sell hydrocarbons and their

byproducts as the main commercial business of the concern or

company; and

''(B) has experienced layoffs, production losses, or

financial losses since the beginning of the oil import crisis,

after January 1, 1997.

''(d) Emergency Oil and Gas Guaranteed Loan Program. -

''(1) In general. - There is established the Emergency Oil and

Gas Guaranteed Loan Program, the purpose of which shall be to

provide loan guarantees to qualified oil and gas companies in

accordance with this section.

''(2) Loan guarantee board. - There is established to

administer the Program a Loan Guarantee Board, to be composed of

-

''(A) the Secretary of Commerce;

''(B) the Chairman of the Board of Governors of the Federal

Reserve System, or a member of the Board of Governors of the

Federal Reserve System designated by the Chairman, who shall

serve as Chairman of the Board; and

''(C) the Chairman of the Securities and Exchange Commission,

or a commissioner of the Securities and Exchange Commission

designated by the Chairman.

''(e) Authority. -

''(1) In general. - The Program may guarantee loans provided to

qualified oil and gas companies by private banking and investment

institutions in accordance with procedures, rules, and

regulations established by the Board.

''(2) Total guarantee limit. - The aggregate amount of loans

guaranteed and outstanding at any one time under this section

shall not exceed $500,000,000.

''(3) Individual guarantee limit. - The aggregate amount of

loans guaranteed under this section with respect to a single

qualified oil and gas company shall not exceed $10,000,000.

''(4) Expeditious action on applications. - The Board shall

approve or deny an application for a guarantee under this section

as soon as practicable after receipt of an application.

''(5) Additional costs. - For the additional cost of the loans

guaranteed under this subsection, including the costs of

modifying the loans as defined in section 502 of the

Congressional Budget Act of 1974 (2 U.S.C. 661a), there is

appropriated $122,500,000 to remain available until expended.

''(f) Requirements for Loan Guarantees. - The Board may issue a

loan guarantee on application by a qualified oil and gas company

under an agreement by a private bank or investment company to

provide a loan to the qualified oil and gas company, if the Board

determines that -

''(1) credit is not otherwise available to the company under

reasonable terms or conditions sufficient to meet its financing

needs, as reflected in the financial and business plans of the

company;

''(2) the prospective earning power of the company, together

with the character and value of the security pledged, provide a

reasonable assurance of repayment of the loan to be guaranteed in

accordance with its terms;

''(3) the loan to be guaranteed bears interest at a rate

determined by the Board 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; and

''(4) the company has agreed to an audit by the General

Accounting Office before issuance of the loan guarantee and

annually while the guaranteed loan is outstanding.

''(g) Terms and Conditions of Loan Guarantees. -

''(1) Loan duration. - All loans guaranteed under this section

shall be repayable in full not later than December 31, 2010, and

the terms and conditions of each such loan shall provide that the

loan agreement may not be amended, or any provision of the loan

agreement waived, without the consent of the Board.

''(2) Loan security. - A commitment to issue a loan guarantee

under this section shall contain such affirmative and negative

covenants and other protective provisions as the Board determines

are appropriate. The Board shall require security for the loans

to be guaranteed under this section at the time at which the

commitment is made.

''(3) Fees. - A qualified oil and gas company receiving a loan

guarantee under this section shall pay a fee to the Department of

the Treasury to cover costs of the program, but in no event shall

such fee exceed an amount equal to 0.5 percent of the outstanding

principal balance of the guaranteed loan.

''(4) Guarantee level. - No loan guarantee may be provided

under this section if the guarantee exceeds 85 percent of the

amount of principal of the loan.

''(h) Reports. - During fiscal year 1999 and each fiscal year

thereafter until each guaranteed loan has been repaid in full, the

Secretary of Commerce shall submit to Congress a report on the

activities of the Board.

''(i) Salaries and Administrative Expenses. - For necessary

expenses to administer the Program, $2,500,000 is appropriated to

the Department of Commerce, to remain available until expended,

which may be transferred to the Office of the Assistant Secretary

for Trade Development of the International Trade Administration.

''(j) Termination of Guarantee Authority. - The authority of the

Board to make commitments to guarantee any loan under this section

shall terminate on December 31, 2001.

''(k) Regulatory Action. - Not later than 60 days after the date

of the enactment of this Act (Aug. 17, 1999), the Board shall issue

such final procedures, rules, and regulations as are necessary to

carry out this section.

''FEDERAL ADMINISTRATIVE AND TRAVEL EXPENSES

''(RESCISSIONS)

''Sec. 202. (a) Of the funds available in the nondefense category

to the agencies of the Federal Government, $125,000,000 are hereby

rescinded: Provided, That rescissions pursuant to this subsection

shall be taken only from administrative and travel accounts:

Provided further, That rescissions shall be taken on a pro rata

basis from funds available to every Federal agency, department, and

office in the executive branch, including the Office of the

President.

''(b) Within 30 days after the date of the enactment of this Act

(Aug. 17, 1999), the Director of the Office of Management and

Budget shall submit to the Committees on Appropriations of the

House of Representatives and the Senate a listing of the amounts by

account of the reductions made pursuant to the provisions of

subsection (a) of this section.

''CHAPTER 3

''GENERAL PROVISIONS

''Sec. 301. No part of any appropriation contained in the Act

shall remain available for obligation beyond the current fiscal

year unless expressly so provided herein.

''This Act may be cited as the 'Emergency Steel Loan Guarantee

and Emergency Oil and Gas Guaranteed Loan Act of 1999'.''

(Pub. L. 107-63, title III, Sec. 336(b), Nov. 5, 2001, 115 Stat.

472, provided that: ''The amendments made by this section (amending

section 101 of Pub. L. 106-51, set out above) shall apply only with

respect to any guarantee issued on or after the date of the

enactment of this Act (Nov. 5, 2001).'')

-CITE-

15 USC Sec. 1842 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 45 - EMERGENCY LOAN GUARANTEES TO BUSINESS ENTERPRISES

-HEAD-

Sec. 1842. Authority for loan guarantees; terms and conditions

-STATUTE-

The Board, on such terms and conditions as it deems appropriate,

may guarantee, or make commitments to guarantee, lenders against

loss of principal or interest on loans that meet the requirements

of this chapter.

-SOURCE-

(Pub. L. 92-70, Sec. 3, Aug. 9, 1971, 85 Stat. 178.)

-CITE-

15 USC Sec. 1843 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 45 - EMERGENCY LOAN GUARANTEES TO BUSINESS ENTERPRISES

-HEAD-

Sec. 1843. Limitations and conditions of loan guarantees

-STATUTE-

(a) Necessary findings

A guarantee of a loan may be made under this chapter only if -

(1) the Board finds that (A) the loan is needed to enable the

borrower to continue to furnish goods or services and failure to

meet this need would adversely and seriously affect the economy

of or employment in the Nation or any region thereof, (B) credit

is not otherwise available to the borrower under reasonable terms

or conditions, and (C) the prospective earning power of the

borrower, together with the character and value of the security

pledged, furnish reasonable assurance that it will be able to

repay the loan within the time fixed, and afford reasonable

protection to the United States; and

(2) the lender certifies that it would not make the loan

without such guarantee.

(b) Term of loans; renewal

Loans guaranteed under this chapter shall be payable in not more

than five years, but may be renewable for not more than an

additional three years.

(c) Interest rates, determination; guarantee fee

(1) Loans guaranteed under this chapter shall bear interest

payable to the lending institutions at rates determined by the

Board taking into account the reduction in risk afforded by the

loan guarantee and rates charged by lending institutions on

otherwise comparable loans.

(2) The Board shall prescribe and collect a guarantee fee in

connection with each loan guaranteed under this chapter. Such fee

shall reflect the Government's administrative expense in making the

guarantee and the risk assumed by the Government and shall not be

less than an amount which, when added to the amount of interest

payable to the lender of such loan, produces a total charge

appropriate for loan agreements of comparable risk and maturity if

supplied by the normal capital markets.

-SOURCE-

(Pub. L. 92-70, Sec. 4, Aug. 9, 1971, 85 Stat. 178.)

-CITE-

15 USC Sec. 1844 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 45 - EMERGENCY LOAN GUARANTEES TO BUSINESS ENTERPRISES

-HEAD-

Sec. 1844. Security for loan guarantees

-STATUTE-

In negotiating a loan guarantee under this chapter, the Board

shall make every effort to arrange that the payment of the

principal of and interest on any plan guaranteed shall be secured

by sufficient property of the enterprise to collateralize fully the

amount of the loan guarantee.

-SOURCE-

(Pub. L. 92-70, Sec. 5, Aug. 9, 1971, 85 Stat. 179.)

-CITE-

15 USC Sec. 1845 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 45 - EMERGENCY LOAN GUARANTEES TO BUSINESS ENTERPRISES

-HEAD-

Sec. 1845. Requirements applicable to loan guarantees

-STATUTE-

(a) Stock dividends or other payments, prohibition; waiver

A guarantee agreement made under this chapter with respect to an

enterprise shall require that while there is any principal or

interest remaining unpaid on a guaranteed loan to that enterprise

the enterprise may not -

(1) declare a dividend on its common stock; or

(2) make any payment on its other indebtedness to a lender

whose loan has been guaranteed under this chapter.

The Board may waive either or both of the requirements set forth in

this subsection, as specified in the guarantee agreement covering a

loan to any particular enterprise, if it determines that such

waiver is not inconsistent with the reasonable protection of the

interests of the United States under the guarantee.

(b) Managerial changes

If the Board determines that the inability of an enterprise to

obtain credit without a guarantee under this chapter is the result

of a failure on the part of management to exercise reasonable

business prudence in the conduct of the affairs of the enterprise,

the Board shall require before guaranteeing any loan to the

enterprise that the enterprise make such management changes as the

Board deems necessary to give the enterprise a sound managerial

base.

(c) Financial statement; access to documents

A guarantee of a loan to any enterprise shall not be made under

this chapter unless -

(1) the Board has received an audited financial statement of

the enterprise; and

(2) the enterprise permits the Board to have the same access to

its books and other documents as the Board would have under

section 1846 of this title in the event the loan is guaranteed.

(d) Exhaustion of remedies

No payment shall be made or become due under a guarantee entered

into under this chapter unless the lender has exhausted any

remedies which it may have under the guarantee agreement.

(e) Protective provisions; advances

(1) Prior to making any guarantee under this chapter, the Board

shall satisfy itself that the underlying loan agreement on which

the guarantee is sought contains all the affirmative and negative

covenants and other protective provisions which are usual and

customary in loan agreements of a similar kind, including previous

loan agreements between the lender and the borrower, and that it

cannot be amended, or any provisions waived, without the Board's

prior consent.

(2) On each occasion when the borrower seeks an advance under the

loan agreement, the guarantee authorized by this chapter shall be

in force as to the funds advanced only if -

(A) the lender gives the Board at least ten days' notice in

writing of its intent to provide the borrower with funds pursuant

to the loan agreement;

(B) the lender certifies to the Board before an advance is made

that, as of the date of the notice provided for in subparagraph

(A), the borrower is not in default under the loan agreement:

Provided, That if a default has occurred the lender shall report

the facts and circumstances relating thereto to the Board and the

Board may expressly and in writing waive such default in any case

where it determines that such waiver is not inconsistent with the

reasonable protection of the interests of the United States under

the guarantee; and

(C) the borrower provides the Board with a plan setting forth

the expenditures for which the advance will be used and the

period during which the expenditures will be made, and, upon the

expiration of such periods, reports to the Board any instances in

which amounts advanced have not been expended in accordance with

the plan.

(f) Loan security, priority; collateral

(1) A guarantee agreement made under this chapter shall contain a

requirement that as between the Board and the lender, the Board

shall have a priority with respect to, and to the extent of, the

lender's interest in any collateral securing the loan and any

earlier outstanding loans. The Board shall take all steps

necessary to assure such priority against any other persons.

(2) As used in paragraph (1) of this subsection, the term

''collateral'' includes all assets pledged under loan agreements

and, if appropriate in the opinion of the Board, all sums of the

borrower on deposit with the lender and subject to offset under

section 68 of the Bankruptcy Act.

-SOURCE-

(Pub. L. 92-70, Sec. 6, Aug. 9, 1971, 85 Stat. 179.)

-REFTEXT-

REFERENCES IN TEXT

Section 68 of the Bankruptcy Act, referred to in subsec. (f)(2),

was classified to section 108 of former Title 11, Bankruptcy. The

Bankruptcy Act was repealed effective Oct. 1, 1979, by Pub. L.

95-598, Sec. 401(a), 402(a), Nov. 6, 1978, 92 Stat. 2682, section

101 of which enacted revised Title 11. See sections 502(b)(3) and

553 of Title 11.

-CITE-

15 USC Sec. 1846 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 45 - EMERGENCY LOAN GUARANTEES TO BUSINESS ENTERPRISES

-HEAD-

Sec. 1846. Powers and duties

-STATUTE-

(a) Board; inspection of documents; disapproval of certain

transactions

The Board is authorized to inspect and copy all accounts, books,

records, memoranda, correspondence, and other documents of any

enterprise which has received financial assistance under this

chapter concerning any matter which may bear upon (1) the ability

of such enterprise to repay the loan within the time fixed

therefor; (2) the interests of the United States in the property of

such enterprise; and (3) the assurance that there is reasonable

protection to the United States. The Board is authorized to

disapprove any transaction of such enterprise involving the

disposition of its assets which may affect the repayment of a loan

that has been guaranteed pursuant to the provisions of this

chapter.

(b) General Accounting Office; audit; report to Board and Congress

The General Accounting Office shall make a detailed audit of all

accounts, books, records, and transactions of any borrower with

respect to which an application for a loan guarantee is made under

this chapter. The General Accounting Office shall report the

results of such audit to the Board and to the Congress.

-SOURCE-

(Pub. L. 92-70, Sec. 7, Aug. 9, 1971, 85 Stat. 180.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1845 of this title.

-CITE-

15 USC Sec. 1847 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 45 - EMERGENCY LOAN GUARANTEES TO BUSINESS ENTERPRISES

-HEAD-

Sec. 1847. Maximum obligation

-STATUTE-

The maximum obligation of the Board under all outstanding loans

guaranteed by it shall not exceed at any time $250,000,000.

-SOURCE-

(Pub. L. 92-70, Sec. 8, Aug. 9, 1971, 85 Stat. 181.)

-CITE-

15 USC Sec. 1848 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 45 - EMERGENCY LOAN GUARANTEES TO BUSINESS ENTERPRISES

-HEAD-

Sec. 1848. Emergency loan guarantee fund

-STATUTE-

(a) Establishment; use; investment

There is established in the Treasury an emergency loan guarantee

fund to be administered by the Board. The fund shall be used for

the payment of the expenses of the Board and for the purpose of

fulfilling the Board's obligations under this chapter. Moneys in

the fund not needed for current operations may be invested in

direct obligations of, or obligations that are fully guaranteed as

to principal and interest by, the United States or any agency

thereof.

(b) Guarantee fee; deposits in fund

The Board shall prescribe and collect a guarantee fee in

connection with each loan guaranteed by it under this chapter.

Sums realized from such fees shall be deposited in the emergency

loan guarantee fund.

(c) Payments; issuance of notes or other obligations when fund

moneys insufficient: forms and denominations, maturities, terms

and conditions, interest rate; public debt transaction

Payments required to be made as a consequence of any guarantee by

the Board shall be made from the emergency loan guarantee fund. In

the event that moneys in the fund are insufficient to make such

payments, in order to discharge its responsibilities, the Board is

authorized to issue to the Secretary of the Treasury notes or other

obligations in such forms and denominations, bearing such

maturities, and subject to such terms and conditions as may be

prescribed by the Board with the approval of the Secretary of the

Treasury. Such notes or other obligations shall bear interest at a

rate determined by the Secretary of the Treasury, taking into

consideration the current average market yield on outstanding

marketable obligations of the United States of comparable

maturities during the month preceding the issuance of the notes or

other obligations. The Secretary of the Treasury is authorized and

directed to purchase any notes and other obligations issued

hereunder and for that purpose he is authorized to use as a public

debt transaction the proceeds from the sale of any securities

issued under chapter 31 of title 31 and the purposes for which

securities may be issued under that chapter are extended to include

any purchase of such notes and obligations.

-SOURCE-

(Pub. L. 92-70, Sec. 9, Aug. 9, 1971, 85 Stat. 181.)

-COD-

CODIFICATION

In subsec. (c), ''chapter 31 of title 31'' and ''that chapter''

substituted for ''the Second Liberty Bond Act, as amended,'' and

''that Act'', respectively, on authority of Pub. L. 97-258, Sec.

4(b), Sept. 13, 1982, 96 Stat. 1067, the first section of which

enacted Title 31, Money and Finance.

-CITE-

15 USC Sec. 1849 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 45 - EMERGENCY LOAN GUARANTEES TO BUSINESS ENTERPRISES

-HEAD-

Sec. 1849. Federal Reserve banks as fiscal agents

-STATUTE-

Any Federal Reserve bank which is requested to do so shall act as

fiscal agent for the Board. Each such fiscal agent shall be

reimbursed by the Board for all expenses and losses incurred by it

in acting as agent on behalf of the Board.

-SOURCE-

(Pub. L. 92-70, Sec. 10, Aug. 9, 1971, 85 Stat. 181.)

-CITE-

15 USC Sec. 1850 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 45 - EMERGENCY LOAN GUARANTEES TO BUSINESS ENTERPRISES

-HEAD-

Sec. 1850. Protection of Government's interest

-STATUTE-

(a) Attorney General, enforcement authority; payments into

emergency loan guarantee fund

The Attorney General shall take such action as may be appropriate

to enforce any right accruing to the United States or any officer

or agency thereof as a result of the issuance of guarantees under

this chapter. Any sums recovered pursuant to this section shall be

paid into the emergency loan guarantee fund.

(b) Recovery rights; subrogation

The Board shall be entitled to recover from the borrower, or any

other person liable therefor, the amount of any payments made

pursuant to any guarantee agreement entered into under this

chapter, and upon making any such payment, the Board shall be

subrogated to all the rights of the recipient thereof.

-SOURCE-

(Pub. L. 92-70, Sec. 11, Aug. 9, 1971, 85 Stat. 181.)

-CITE-

15 USC Sec. 1851 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 45 - EMERGENCY LOAN GUARANTEES TO BUSINESS ENTERPRISES

-HEAD-

Sec. 1851. Reports to Congress; recommendations

-STATUTE-

The Board shall submit to the Congress annually a full report of

its operations under this chapter. In addition, the Board shall

submit to the Congress a special report not later than June 30,

1973, which shall include a full report of the Board's operations

together with its recommendations with respect to the need to

continue the guarantee program beyond the termination date

specified in section 1852 of this title. If the Board recommends

that the program should be continued beyond such termination date,

it shall state its recommendations with respect to the appropriate

board, agency, or corporation which should administer the program.

-SOURCE-

(Pub. L. 92-70, Sec. 12, Aug. 9, 1971, 85 Stat. 182.)

-CITE-

15 USC Sec. 1852 01/06/03

-EXPCITE-

TITLE 15 - COMMERCE AND TRADE

CHAPTER 45 - EMERGENCY LOAN GUARANTEES TO BUSINESS ENTERPRISES

-HEAD-

Sec. 1852. Termination date

-STATUTE-

The authority of the Board to enter into any guarantee or to make

any commitment to guarantee under this chapter terminates on

December 31, 1973. Such termination does not affect the carrying

out of any contract, guarantee, commitment, or other obligation

entered into pursuant to this chapter prior to that date, or the

taking of any action necessary to preserve or protect the interests

of the United States in any amounts advanced or paid out in

carrying on operations under this chapter.

-SOURCE-

(Pub. L. 92-70, Sec. 13, Aug. 9, 1971, 85 Stat. 182.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 1851 of this title.

-CITE-