[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4629 Introduced in House (IH)]
111th CONGRESS
2d Session
H. R. 4629
To create a loan program to provide funds to State special purpose
vehicles for use in collateral support programs and loan participation
programs to benefit qualified manufacturers.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 22, 2010
Mr. Levin (for himself, Mr. Frank of Massachusetts, Mr. Peters, Mr.
Moore of Kansas, Mr. Dingell, Mr. Kanjorski, Mr. Rangel, Ms. Fudge, Mr.
Kildee, Mr. Pascrell, Mr. Lipinski, Mr. Doyle, Ms. Schwartz, Mr.
Butterfield, Mr. Etheridge, and Mr. Ryan of Ohio) introduced the
following bill; which was referred to the Committee on Financial
Services
_______________________________________________________________________
A BILL
To create a loan program to provide funds to State special purpose
vehicles for use in collateral support programs and loan participation
programs to benefit qualified manufacturers.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Manufacturing Modernization and
Diversification Act of 2010''.
SEC. 2. DEFINITIONS.
For purposes of this Act:
(1) Bank.--The term ``bank'' means--
(A) an insured depository institution, as such term
is defined under section 3(c)(2) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(c)(2)); and
(B) an insured credit union, as such term is
defined under section 101(7) of the Federal Credit
Union Act (12 U.S.C. 1752(7)).
(2) Collateral support program.--The term ``Collateral
Support Program'' means a program described under section 4.
(3) Loan participation program.--The term ``Loan
Participation Program'' means a program described under section
5.
(4) Qualified manufacturer.--The term ``qualified
manufacturer'' means a business that is engaged in
manufacturing and--
(A) has less than $50,000,000 in annual revenue;
and
(B) has less than $50,000,000 in assets.
(5) Revolving loan fund.--The term ``revolving loan fund''
means the revolving loan fund established under section 3(d).
(6) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury.
(7) SPV.--The term ``SPV'' means a special purpose vehicle
created by a State.
(8) Termination date.--The term ``termination date'' means
the date that is the end of the 2-year period beginning on the
date the Secretary issues regulations pursuant to section
3(b)(4).
SEC. 3. FEDERAL LOAN PROGRAM TO SPVS.
(a) In General.--The Secretary shall certify SPVs to take part in a
program to carry out Collateral Support Programs and Loan Participation
Programs for the benefit of qualified manufacturers (hereinafter in
this section described as the ``loan program'').
(b) Application Process.--
(1) In general.--Each SPV wishing to participate in the
loan program shall submit an application to the Secretary, in
such form and manner as the Secretary may require, containing--
(A) a detailed proposal for the structure of the
Collateral Support Program the SPV proposes to carry
out, including what criteria the SPV intends to use to
determine which qualified manufacturers will be
eligible to participate;
(B) a detailed proposal for the structure of the
Loan Participation Program the SPV proposes to carry
out, including what criteria the SPV intends to use to
determine which qualified manufacturers will be
eligible to participate; and
(C) such other information as the Secretary may
require.
(2) Additional requirements.--
(A) Interest rate.--Loans made to SPVs by the
Secretary under the loan program shall be made with an
interest rate of 0.5 percent.
(B) Treatment of payments from qualified
manufacturers.--The amount of all fees and interest
payments paid by qualified manufacturers to an SPV
under Collateral Support Programs and Loan
Participation Programs that is more than the amount
required by the SPV to repay the principal and interest
amounts on loans made to the SPV under the loan program
shall be retained by the SPV.
(C) No disqualification by reason of
participation.--Participation in a Collateral Support
Program or a Loan Participation Program by a qualified
manufacturer shall not disqualify such manufacturer
from receiving assistance related to such loan under
other Federal programs as well, including programs
carried out by the Small Business Administration and
the Department of Agriculture.
(D) Limitations on spvs.--Only 1 SPV per State may
be certified to participate in the loan program.
(E) Oversight.--The Secretary shall issue
regulations to require each SPV participating in the
loan program to make periodic reports to the Secretary
at any time such SPV has a loan outstanding under the
loan program. Such reports shall contain such
information as the Secretary determines appropriate to
maintain oversight of the funds used in the loan
program.
(3) Determination factors.--In making the determination of
which SPVs should be certified to take part in the loan
program, the Secretary shall consider--
(A) all information submitted in the application of
an SPV under paragraph (1);
(B) the number of jobs that will likely be created
by programs proposed by the SPV;
(C) the amount of economic distress experienced by
the State in which the SPV is located, including the
unemployment rate of such State; and
(D) the likelihood that the SPV will be able to
successfully administer the programs proposed by the
SPV.
(4) Rulemaking.--The Secretary shall issue all regulations
necessary for the submission of applications described under
paragraph (1) no later than 90 days after the date of the
enactment of this Act.
(c) Loan-Making Process.--
(1) In general.--Each time a certified SPV wishes to make a
loan under a Collateral Support Program or a Loan Participation
Program, the certified SPV shall make a request to the
Secretary, who shall loan the requested amount to the SPV from
the revolving loan fund, as long as sufficient amounts remain
in the fund.
(2) Time period.--An SPV may not make any new loans under a
Collateral Support Program or a Loan Participation Program
after the termination date.
(d) Revolving Loan Fund.--
(1) In general.--There is established in the Treasury a
revolving loan fund for the loan program.
(2) Initial transfer.--
(A) Funding from the tarp.--Of funds made available
to the Secretary under title I of the Emergency
Economic Stabilization Act of 2008 (12 U.S.C. 5211 et
seq.) that remain unobligated, the Secretary shall
transfer and credit $20,000,000,000 to the revolving
loan fund.
(B) Authorization.--The amounts transferred under
subparagraph (A) shall be deemed to be for actions
authorized under title I of the Emergency Economic
Stabilization Act of 2008.
(3) Expenditures.--The Secretary shall use the amounts in
the revolving loan fund to carry out the loan program.
(4) Deposits.--The Secretary shall deposit amounts received
as payment and interest on loans provided under the loan
program into the revolving loan fund.
(e) Termination of Loan Program.--On and after the termination
date--
(1) no additional loans may be made by the Secretary under
the loan program;
(2) all amounts in the revolving loan fund shall be paid
into the general fund of the Treasury; and
(3) all amounts that would otherwise have been paid into
the revolving loan fund shall be paid into the general fund of
the Treasury.
SEC. 4. COLLATERAL SUPPORT PROGRAM.
(a) In General.--With respect to an SPV, a program is described
under this section if, under such program--
(1) a qualified manufacturer that wishes to receive a loan
from a bank, but would not otherwise have sufficient collateral
to qualify for such a loan, may ask the bank to seek collateral
support for such loan from the SPV;
(2) the bank submits an application to the SPV to
participate in the collateral support program, in such form and
manner and containing such information as the SPV may require;
(3) the SPV, if approving such application, deposits cash
with the bank in an interest bearing account under the SPV's
name, and allows such cash to act as collateral support for the
qualified manufacturer's loan;
(4) the interest paid on such cash deposit is paid to the
SPV; and
(5) as the qualified manufacturer repays the loan over
time, the SPV draws down the amount deposited with the bank.
(b) Additional Requirements.--A program described under subsection
(a) shall additionally have the following requirements:
(1) Deposit limits.--The cash deposit made by the SPV may
not represent more than 49.9 percent of the total loan amount
and may not be in an amount more than 49.9 percent of the non-
equity capital of the qualified manufacturer at the time the
loan is made.
(2) Loan amount.--The SPV may not provide more than
$20,000,000 to any one qualified manufacturer under the
collateral support program.
(3) Fees.--The SPV shall require a fee or fees to be paid
by the qualified manufacturer to the SPV, at loan closing or
annually, which shall consist of no more than 3 percent of the
value of the cash deposit per fee. The SPV may determine
whether such fee should be paid in cash or in options to
purchase equity in the qualified manufacturer, but in no case
may such options allow for the purchase of equity in the
qualified manufacturer that would result in the SPV holding
more than 15 percent of the voting rights of the equity of such
qualified manufacturer.
(4) Exit fee.--In the event that the qualified manufacturer
defaults on the loan made under the collateral support program,
the bank shall repay to the SPV an amount equal to 5 percent of
the initial deposit made by the SPV.
(5) Oversight.--The SPV shall require--
(A) the bank to make periodic reports to the SPV
during the life of the loan; and
(B) such other reports from the bank and the
qualified manufacturer as the SPV determines
appropriate to maintain oversight.
SEC. 5. LOAN PARTICIPATION PROGRAM.
(a) In General.--With respect to an SPV, a program is described
under this section if, under such program--
(1) a qualified manufacturer that wishes to receive a loan
from a bank, but would not otherwise qualify for such a loan,
may ask the bank to seek loan participation for such loan from
the SPV;
(2) the bank submits an application to the SPV to
participate in the loan participation program, in such form and
manner and containing such information as the SPV may require;
(3) the SPV, if approving such application, will agree to
purchase between 1 to 49.9 percent of such loan, upon the bank
making such loan;
(4) the bank shall continue to service the entire loan; and
(5) the SPV may, in coordination with the bank, permit the
qualified manufacturer to forbear payments of interest or defer
payments of principal on the amount of such loan purchased by
the SPV for a period of no longer than 3 years from the date
such loan is made.
(b) Additional Requirements.--A program described under subsection
(a) shall additionally have the following requirements:
(1) Loan amount.--The SPV may not pay more than $20,000,000
for any portion of loans made to any one qualified manufacturer
under the loan participation program.
(2) Fee.--
(A) One-time fee.--The SPV shall require a one-time
fee from the qualified manufacturer in exchange for the
SPV participating in the loan participation program.
(B) Annual fee.--The bank shall require the
qualified manufacturer to pay an annual fee to the bank
of a minimum of 0.5 percent, and a maximum of 2
percent, of the amount of the portion of the loan
purchased by the SPV under the loan participation
program.
(3) Oversight.--The SPV shall require--
(A) the bank to make periodic reports to the SPV
during the life of the loan; and
(B) such other reports from the bank and the
qualified manufacturer as the SPV determines
appropriate to maintain oversight.
SEC. 6. REPORT.
Not later than the end of the 6-month period beginning on the date
of the enactment of this Act, and quarterly thereafter while any loan
remains outstanding under the loan program carried out under section 3,
the Secretary shall issue a report to the Congress containing--
(1) a list of the active participants in Collateral Support
Programs and Loan Participation Programs; and
(2) an estimate of the impact the loan program has had on--
(A) the overall economy; and
(B) the creation of new jobs or the preservation of
existing jobs.
<all>