§ 4532. Loans to private business enterprises

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 2009

   Defense Production Act Reauthorization of 2009

   Pub. L. 111–67 § 7 · 123 Stat. 2006

   Enacted · 50 U.S.C. § 4532

   (Sept. 8, 1950, ch. 932, title III, § 302, as added Pub. L. 111–67, § 7, Sept. 30, 2009, 123 Stat. 2012.)

   Source evidence

   Code source credit
   (Sept. 8, 1950, ch. 932, title III, § 302, as added Pub. L. 111–67, § 7, Sept. 30, 2009, 123 Stat. 2012.)

   Enacted provision · exact public law section
   SEC. 7. EXPANSION OF PRODUCTIVE CAPACITY AND SUPPLY.   Title III of the Defense Production Act of 1950 (50 U.S.C. App. 2091 et seq.) is amended to read as follows: “TITLE III— EXPANSION OF PRODUCTIVE CAPACITY AND SUPPLY “SEC. 301. PRESIDENTIAL AUTHORIZATION FOR THE NATIONAL DEFENSE. “(a) Expediting Production and Deliveries or Services.— “(1) Authorized activities.— To reduce current or projected shortfalls of industrial resources, critical technology items, or essential materials needed for national defense purposes, subject to such regulations as the President may prescribe, the President may authorize a guaranteeing agency to provide guarantees of loans by private institutions for the purpose of financing any contractor, subcontractor, provider of critical infrastructure, or other person in support of production capabilities or supplies that are deemed by the guaranteeing agency to be necessary to create, maintain, expedite, expand, protect, or restore production and deliveries or services essential to the national defense. “(2) Presidential determinations required.— Except during a period of national emergency declared by Congress or the President, a loan guarantee may be entered into under this section only if the President determines that— “(A) the loan guarantee is for an activity that supports the production or supply of an industrial resource, critical technology item, or material that is essential for national defense purposes; “(B) without a loan guarantee, credit is not available to the loan applicant under reasonable terms or conditions sufficient to finance the activity; “(C) the loan guarantee is the most cost effective, expedient, and practical alternative for meeting the needs of the Federal Government; “(D) the prospective earning power of the loan applicant and the character and value of the security pledged provide a reasonable assurance of repayment of the loan to be guaranteed; “(E) the loan to be guaranteed bears interest at a rate determined by the Secretary of the Treasury to be reasonable, taking into account the then-current average yield on outstanding obligations of the United States with remaining periods of maturity comparable to the maturity of the loan; “(F) the loan agreement for the loan to be guaranteed provides that no provision of the loan agreement may be amended or waived without the consent of the fiscal agent of the United States for the guarantee; and “(G) the loan applicant has provided or will provide— “(i) an assurance of repayment, as determined by the President; and “(ii) security— “(I) in the form of a performance bond, insurance, collateral, or other means acceptable to the fiscal agent of the United States; and “(II) in an amount equal to not less than 20 percent of the amount of the loan. “(3) Limitations on loans.— Loans under this section may be— “(A) made or guaranteed under the authority of this section only to the extent that an appropriations Act— “(i) provides, in advance, budget authority for the cost of such guarantees, as defined in section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a); and “(ii) establishes a limitation on the total loan principal that may be guaranteed; and “(B) made without regard to the limitations of existing law, other than section 1341 of title 31, United States Code. “(b) Fiscal Agents of the United States.— “(1) In general.— Any Federal agency or any Federal reserve bank, when designated by the President, is hereby authorized to act, on behalf of any guaranteeing agency, as fiscal agent of the United States in the making of such contracts of guarantee and in otherwise carrying out the purposes of this section. “(2) Funds.— All such funds as may be necessary to enable any fiscal agent described in paragraph (1) to carry out any guarantee made by it on behalf of any guaranteeing agency shall be supplied and disbursed by or under authority from such guaranteeing agency. “(3) Limit on liability.— No fiscal agent described in paragraph (1) shall have any responsibility or accountability, except as agent in taking any action pursuant to or under authority of this section. “(4) Reimbursements.— Each fiscal agent described in paragraph (1) shall be reimbursed by each guaranteeing agency for all expenses and losses incurred by such fiscal agent in acting as agent on behalf of such guaranteeing agency, including, notwithstanding any other provision of law, attorneys’ fees and expenses of litigation. “(c) Oversight.— “(1) In general.— All actions and operations of fiscal agents under authority of or pursuant to this section shall be subject to the supervision of the President, and to such regulations as the President may prescribe. “(2) Other authority.— The President is authorized to prescribe— “(A) either specifically or by maximum limits or otherwise, rates of interest, guarantee and commitment fees, and other charges which may be made in connection with loans, discounts, advances, or commitments guaranteed by the guaranteeing agencies through fiscal agents under this section; and “(B) regulations governing the forms and procedures (which shall be uniform to the extent practicable) to be utilized in connection with such guarantees. “(d) Aggregate Guarantee Amounts.— “(1) Industrial resource and critical technology shortfalls.— “(A) In general.— If the making of any guarantee or obligation of the Federal Government under this title relating to a domestic industrial base shortfall would cause the aggregate outstanding amount of all guarantees for such shortfall to exceed $50,000,000, any such guarantee may be made only— “(i) if the President has notified the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives in writing of the proposed guarantee; and “(ii) after the 30-day period following the date on which notice under clause (i) is provided. “(B) Waivers authorized.— The requirements of subparagraph (A) may be waived— “(i) during a period of national emergency declared by Congress or the President; or “(ii) upon a determination by the President, on a nondelegable basis, that a specific guarantee is necessary to avert an industrial resource or critical technology item shortfall that would severely impair national defense capability. “(2) Other limitations.— The authority conferred by this section shall not be used primarily to prevent the financial insolvency or bankruptcy of any person, unless— “(A) the President certifies that the insolvency or bankruptcy would have a direct and substantially adverse effect upon national defense production; and “(B) a copy of the certification under subparagraph (A), together with a detailed justification thereof, is transmitted to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives not later than 10 days prior to the exercise of that authority for such use. “SEC. 302. LOANS TO PRIVATE BUSINESS ENTERPRISES. “(a) Loan Authority.— To reduce current or projected shortfalls of industrial resources, critical technology items, or materials essential for the national defense, the President may make provision for loans to private business enterprises (including nonprofit research corporations and providers of critical infrastructure) for the creation, maintenance, expansion, protection, or restoration of capacity, the development of technological processes, or the production of essential materials, including the exploration, development, and mining of strategic and critical metals and minerals. “(b) Conditions of Loans.— Loans may be made under this section on such terms and conditions as the President deems necessary, except that— “(1) financial assistance may be extended only to the extent that it is not otherwise available from private sources on reasonable terms; and “(2) during periods of national emergency declared by the Congress or the President, no such loan may be made unless the President determines that— “(A) the loan is for an activity that supports the production or supply of an industrial resource, critical technology item, or material that is essential to the national defense; “(B) without the loan, United States industry cannot reasonably be expected to provide the needed capacity, technological processes, or materials in a timely manner; “(C) the loan is the most cost-effective, expedient, and practical alternative method for meeting the need; “(D) the prospective earning power of the loan applicant and the character and value of the security pledged provide a reasonable assurance of repayment of the loan in accordance with the terms of the loan, as determined by the President; and “(E) the loan bears interest at a rate determined by the Secretary of the Treasury to be reasonable, taking into account the then-current average yield on outstanding obligations of the United States with remaining periods of maturity comparable to the maturity of the loan. “(c) Limitations on Loans.— Loans under this section may be— “(1) made or guaranteed under the authority of this section only to the extent that an appropriations Act— “(A) provides, in advance, budget authority for the cost of such guarantees, as defined in section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a); and “(B) establishes a limitation on the total loan principal that may be guaranteed; and “(2) made without regard to the limitations of existing law, other than section 1341 of title 31, United States Code. “(d) Aggregate Loan Amounts.— “(1) In general.— If the making of any loan under this section to correct a shortfall would cause the aggregate outstanding amount of all obligations of the Federal Government under this title relating to such shortfall to exceed $50,000,000, such loan may be made only— “(A) if the President has notified the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives, in writing, of the proposed loan; and “(B) after the 30-day period following the date on which notice under subparagraph (A) is provided. “(2) Waivers authorized.— The requirements of paragraph (1) may be waived— “(A) during a period of national emergency declared by the Congress or the President; and “(B) upon a determination by the President, on a nondelegable basis, that a specific loan is necessary to avert an industrial resource or critical technology shortfall that would severely impair national defense capability. “SEC. 303. OTHER PRESIDENTIAL ACTION AUTHORIZED. “(a) In General.— “(1) In general.— To create, maintain, protect, expand, or restore domestic industrial base capabilities essential for the national defense, the President may make provision— “(A) for purchases of or commitments to purchase an industrial resource or a critical technology item, for Government use or resale; “(B) for the encouragement of exploration, development, and mining of critical and strategic materials, and other materials; “(C) for the development of production capabilities; and “(D) for the increased use of emerging technologies in security program applications and the rapid transition of emerging technologies— “(i) from Government-sponsored research and development to commercial applications; and “(ii) from commercial research and development to national defense applications. “(2) Treatment of certain agricultural commodities.— A purchase for resale under this subsection shall not include that part of the supply of an agricultural commodity which is domestically produced, except to the extent that such domestically produced supply may be purchased for resale for industrial use or stockpiling. “(3) Terms of sales.— No commodity purchased under this subsection shall be sold at less than— “(A) the established ceiling price for such commodity, except that minerals, metals, and materials shall not be sold at less than the established ceiling price, or the current domestic market price, whichever is lower; or “(B) if no ceiling price has been established, the higher of— “(i) the current domestic market price for such commodity; or “(ii) the minimum sale price established for agricultural commodities owned or controlled by the Commodity Credit Corporation, as provided in section 407 of the Agricultural Act of 1949 (7 U.S.C. 1427). “(4) Delivery dates.— No purchase or commitment to purchase any imported agricultural commodity shall specify a delivery date which is more than 1 year after the date of termination of this section. “(5) Presidential determinations.— Except as provided in paragraph (7), the President may not execute a contract under this subsection unless the President determines that— “(A) the industrial resource, material, or critical technology item is essential to the national defense; and “(B) without Presidential action under this section, United States industry cannot reasonably be expected to provide the capability for the needed industrial resource, material, or critical technology item in a timely manner. “(6) Notification to congress of shortfall.— “(A) In general.— Except as provided in paragraph (7), the President shall provide written notice to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives of a domestic industrial base shortfall prior to taking action under this subsection to remedy the shortfall. The notice shall include the determinations made by the President under paragraph (5). “(B) Aggregate amounts.— If the taking of any action under this subsection to correct a domestic industrial base shortfall would cause the aggregate outstanding amount of all such actions for such shortfall to exceed $50,000,000, the action or actions may be taken only after the 30-day period following the date on which the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives have been notified in writing of the proposed action. “(7) Waivers authorized.— The requirements of paragraphs (1) through (6) may be waived— “(A) during a period of national emergency declared by the Congress or the President; or “(B) upon a determination by the President, on a nondelegable basis, that action is necessary to avert an industrial resource or critical technology item shortfall that would severely impair national defense capability. “(b) Exemption for Certain Limitations.— Subject to the limitations in subsection (a), purchases and commitments to purchase and sales under subsection (a) may be made without regard to the limitations of existing law (other than section 1341 of title 31, United States Code), for such quantities, and on such terms and conditions, including advance payments, and for such periods, but not extending beyond a date that is not more than 10 years from the date on which such purchase, purchase commitment, or sale was initially made, as the President deems necessary, except that purchases or commitments to purchase involving higher than established ceiling prices (or if no such established ceiling prices exist, currently prevailing market prices) or anticipated loss on resale shall not be made, unless it is determined that supply of the materials could not be effectively increased at lower prices or on terms more favorable to the Government, or that such purchases are necessary to assure the availability to the United States of overseas supplies. “(c) Presidential Findings.— “(1) In general.— The President may take the actions described in paragraph (2), if the President finds that— “(A) under generally fair and equitable ceiling prices, for any raw or nonprocessed material, there will result a decrease in supplies from high-cost sources of such material, and that the continuation of such supplies is necessary to carry out the objectives of this title; or “(B) an increase in cost of transportation is temporary in character and threatens to impair maximum production or supply in any area at stable prices of any materials. “(2) Subsidy payments authorized.— Upon a finding under paragraph (1), the President may make provision for subsidy payments on any such domestically produced material, other than an agricultural commodity, in such amounts and in such manner (including purchases of such material and its resale at a loss), and on such terms and conditions, as the President determines to be necessary to ensure that supplies from such high-cost sources are continued, or that maximum production or supply in such area at stable prices of such materials is maintained, as the case may be. “(d) Incidental Authority.— The procurement power granted to the President by this section shall include the power to transport and store and have processed and refined any materials procured under this section. “(e) Installation of Equipment in Industrial Facilities.— “(1) Installation authorized.— If the President determines that such action will aid the national defense, the President is authorized— “(A) to procure and install additional equipment, facilities, processes or improvements to plants, factories, and other industrial facilities owned by the Federal Government; “(B) to procure and install equipment owned by the Federal Government in plants, factories, and other industrial facilities owned by private persons; “(C) to provide for the modification or expansion of privately owned facilities, including the modification or improvement of production processes, when taking actions under section 301, 302, or this section; and “(D) to sell or otherwise transfer equipment owned by the Federal Government and installed under this subsection to the owners of such plants, factories, or other industrial facilities. “(2) Indemnification.— The owner of any plant, factory, or other industrial facility that receives equipment owned by the Federal Government under this section shall agree— “(A) to waive any claim against the United States under section 107 or 113 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9607 and 9613); and “(B) to indemnify the United States against any claim described in paragraph (1) made by a third party that arises out of the presence or use of equipment owned by the Federal Government. “(f) Excess Metals, Minerals, and Materials.— “(1) In general.— Notwithstanding any other provision of law to the contrary, metals, minerals, and materials acquired pursuant to this section which, in the judgment of the President, are excess to the needs of programs under this Act, shall be transferred to the National Defense Stockpile established by the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98 et seq.), when the President deems such action to be in the public interest. “(2) Transfers at no charge.— Transfers made pursuant to this subsection shall be made without charge against or reimbursement from funds appropriated for the purposes of the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98 et seq.), except that costs incident to such transfer, other than acquisition costs, shall be paid or reimbursed from such funds. “(g) Substitutes.— When, in the judgement of the President, it will aid the national defense, the President may make provision for the development of substitutes for strategic and critical materials, critical components, critical technology items, and other industrial resources. “SEC. 304. DEFENSE PRODUCTION ACT FUND. “(a) Establishment of Fund.— There is established in the Treasury of the United States a separate fund to be known as the ‘Defense Production Act Fund’ (in this section referred to as the ‘Fund’). “(b) Moneys in Fund.— There shall be credited to the Fund— “(1) all moneys appropriated for the Fund, as authorized by section 711; and “(2) all moneys received by the Fund on transactions entered into pursuant to section 303. “(c) Use of Fund.— The Fund shall be available to carry out the provisions and purposes of this title, subject to the limitations set forth in this Act and in appropriations Acts. “(d) Duration of Fund.— Moneys in the Fund shall remain available until expended. “(e) Fund Balance.— The Fund balance at the close of each fiscal year shall not exceed $750,000,000, excluding any moneys appropriated to the Fund during that fiscal year or obligated funds. If, at the close of any fiscal year, the Fund balance exceeds $750,000,000, the amount in excess of $750,000,000 shall be paid into the general fund of the Treasury. “(f) Fund Manager.— The President President. shall designate a Fund manager. The duties of the Fund manager shall include— “(1) determining the liability of the Fund in accordance with subsection (g); “(2) ensuring the visibility and accountability of transactions engaged in through the Fund; and “(3) reporting to the Congress each year regarding activities of the Fund during the previous fiscal year. “(g) Liabilities Against Fund.— When any Contracts. agreement entered into pursuant to this title after December 31, 1991, imposes any contingent liability upon the United States, such liability shall be considered an obligation against the Fund.” .

1 of 1 references resolved to an enrolled provision