§ 2540. Establishment of loan guarantee program (a) ESTABLISHMENT.-In order to meet the national security objectives in section 2501(a) of this title, the Secretary of Defense shall establish a program under which the Secretary may issue guarantees assuring a lender against losses of principal or interest, or both principal and interest, arising out of the financing of the sale or long-term lease of defense articles, defense services, or design and construction services to a country referred to in subsection (b). (b) COVERED COUNTRIES.-The authority under subsection (a) applies with respect to the following countries: (1) A member nation of the North Atlantic Treaty Organization (NATO). (2) A country designated as of March 31, 1995, as a major non-NATO ally pursuant to section 2350a(i)(3) of this title. (3) A country in Central Europe that, as determined by the Secretary of State (A) has changed its form of national government from a nondemocratic form of government to a democratic form of government since October 1, 1989; or (B) is in the process of changing its form of national government from a nondemocratic form of government to a democratic form of government. (4) A noncommunist country that was a member nation of the Asia Pacific Economic Cooperation (APEC) as of October 31, 1993. (c) AUTHORITY SUBJECT TO PROVISIONS OF APPROPRIATIONS.— The Secretary may guarantee a loan under this subchapter only to such extent or in such amounts as may be provided in advance in appropriations Acts. (Added P.L. 104-106, § 1321(a)(1), Feb. 10, 1996, 110 Stat. 475.) § 2540a. Transferability A guarantee issued under this subchapter shall be fully and freely transferable. (Added P.L. 104-106, § 1321(a)(1), Feb. 10, 1996, 110 Stat. 476.) § 2540b. Limitations (a) TERMS AND CONDITIONS OF LOAN GUARANTEES.-In issuing a guarantee under this subchapter for a medium-term or long-term loan, the Secretary may not offer terms and conditions more beneficial than those that would be provided to the recipient by the Export-Import Bank of the United States under similar circumstances in conjunction with the provision of guarantees for nondefense articles and services. (b) LOSSES ARISING FROM FRAUD OR MISREPRESENTATION.-No payment may be made under a guarantee issued under this subchapter for a loss arising out of fraud or misrepresentation for which the party seeking payment is responsible. (c) NO RIGHT OF ACCELERATION.-The Secretary of Defense may not accelerate any guaranteed loan or increment, and may not pay any amount, in respect of a guarantee issued under this subchapter, other than in accordance with the original payment terms of the loan. (Added P.L. 104-106, § 1321(a)(1), Feb. 10, 1996, 110 Stat. 476.) § 2540c. Fees charged and collected (a) EXPOSURE FEES.-The Secretary of Defense shall charge a fee (known as "exposure fee") for each guarantee issued under this subchapter. (b) AMOUNT OF EXPOSURE FEE.-To the extent that the cost of the loan guarantees under this subchapter is not otherwise provided for in appropriations Acts, the fee imposed under subsection (a) with respect to a loan guarantee shall be fixed in an amount that is sufficient to meet potential liabilities of the United States under the loan guarantee. (c) PAYMENT TERMS.-The fee under subsection (a) for each guarantee shall become due as the guarantee is issued. In the case of a guarantee for a loan which is disbursed incrementally, and for which the guarantee is correspondingly issued incrementally as portions of the loan are disbursed, the fee shall be paid incrementally in proportion to the amount of the guarantee that is issued. (d) ADMINISTRATIVE FEES.—(1) The Secretary of Defense shall charge a fee for each guarantee issued under this subchapter to reflect the additional administrative costs of the Department of Defense that are directly attributable to the administration of the program under this subchapter. Such fees shall be credited to a special account in the Treasury. Amounts in the special account shall be available, to the extent and in amounts provided in appropriations Acts, for paying the costs of administrative expenses of the Department of Defense that are attributable to the loan guarantee program under this subchapter. (2)(A) If for any fiscal year amounts in the special account established under paragraph (1) are not available (or are not anticipated to be available) in a sufficient amount for administrative expenses of the Department of Defense for that fiscal year that are directly attributable to the administration of the program under this subchapter, the Secretary may use amounts currently available for operations and maintenance for Defense-wide activities, not to exceed $500,000 in any fiscal year, for those expenses. (B) The Secretary shall, from funds in the special account established under paragraph (1), replenish operations and maintenance accounts for amounts expended under subparagraph (A) as soon as the Secretary determines practicable. (Added P.L. 104-106, § 1321(a)(1), Feb. 10, 1996, 110 Stat. 476; P.L. 106–398, § 1[1081(a)], Oct. 30, 2000, 114 Stat. 1654, 1654A-284.) § 2540d. Definitions In this subchapter: (1) The terms "defense article", "defense services", and "design and construction services" have the meanings given those terms in section 47 of the Arms Export Control Act (22 U.S.C. 2794). (2) The term "cost", with respect to a loan guarantee, has the meaning given that term in section 502 of the Congressional Budget and Impoundment Control Act of 1974 (2 U.S.C. 661a). (Added P.L. 104-106, § 1321(a)(1), Feb. 10, 1996, 110 Stat. 477.) 2541c. 2541d. Administration. Transferability, additional limitations, and definition. § 2541. Establishment of loan guarantee program (a) ESTABLISHMENT.-In order to meet the national security objectives in section 2501(a) of this title, the Secretary of Defense shall establish a program under which the Secretary may issue guarantees assuring lenders against losses of principal or interest, or both principal and interest, for loans made to qualified commercial firms to fund, in whole or in part, any of the following activities: (1) The improvement of the protection of the critical infrastructure of the commercial firms. (2) The refinancing of improvements previously made to the protection of the critical infrastructure of the commercial firms. (b) QUALIFIED COMMERCIAL FIRMS.-For purposes of this section, a qualified commercial firm is a company or other business entity (including a consortium of such companies or other business entities, as determined by the Secretary) that the Secretary determines (1) conducts a significant level of its research, development, engineering, and manufacturing activities in the United States; (2) is a company or other business entity the majority ownership or control of which is by United States citizens or is a company or other business of a parent company that is incorporated in a country the government of which— (A) encourages the participation of firms so owned or controlled in research and development consortia to which the government of that country provides funding directly or provides funding indirectly through international organizations or agreements; and (B) affords adequate and effective protection for the intellectual property rights of companies incorporated in the United States; (3) provides technology products or services critical to the operations of the Department of Defense; (4) meets standards of prevention of cyberterrorism applicable to the Department of Defense; and (5) agrees to submit the report required under section 2541d of this title. (c) LOAN LIMITS.-The maximum amount of loan principal guaranteed during a fiscal year under this section may not exceed $10,000,000, with respect to all borrowers. (d) GOALS AND STANDARDS.-The Secretary shall prescribe regulations setting forth goals for the use of the loan guarantees provided under this section and standards for evaluating whether those goals are met by each entity receiving such loan guarantees. (e) AUTHORITY SUBJECT TO PROVISIONS OF APPROPRIATIONS.— The Secretary may guarantee a loan under this subchapter only to such extent or in such amounts as may be provided in advance in appropriations Acts. (Added P.L. 106-398, § 1[1033(a)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A-258.) § 2541a. Fees charged and collected (a) FEE REQUIRED.-The Secretary of Defense shall assess a fee for providing a loan guarantee under this subchapter. (b) AMOUNT OF FEE.-The amount of the fee shall be not less than 75 percent of the amount incurred by the Secretary to provide the loan guarantee. (c) SPECIAL ACCOUNT.-(1) Such fees shall be credited to a special account in the Treasury. (2) Amounts in the special account shall be available, to the extent and in amounts provided in appropriations Acts, for paying the costs of administrative expenses of the Department of Defense that are attributable to the loan guarantee program under this subchapter. (3)(A) If for any fiscal year amounts in the special account established under paragraph (1) are not available (or are not anticipated to be available) in a sufficient amount for administrative expenses of the Department of Defense for that fiscal year that are directly attributable to the administration of the program under this subchapter, the Secretary may use amounts currently available for operations and maintenance for Defense-wide activities, not to exceed $500,000 in any fiscal year, for those expenses. (B) The Secretary shall, from funds in the special account established under paragraph (1), replenish operations and maintenance accounts for amounts expended under subparagraph (A). (Added P.L. 106-398, § 1[1033(a)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A-259.) § 2541b. Administration (a) AGREEMENTS REQUIRED.-The Secretary of Defense may enter into one or more agreements, each with an appropriate Federal or private entity, under which such entity may, under this subchapter (1) process applications for loan guarantees; (2) administer repayment of loans; and (3) provide any other services to the Secretary to administer this subchapter. (b) TREATMENT OF COSTS.-The costs of such agreements shall be considered, for purposes of the special account established under section 2541a(c), to be costs of administrative expenses of the Department of Defense that are attributable to the loan guarantee program under this subchapter. (Added P.L. 106-398, § 1[1033(a)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A-259.) § 2541c. Transferability, additional limitations, and defini tion The following provisions of subchapter VI of this chapter apply to guarantees issued under this subchapter: (1) Section 2540a, relating to transferability of guarantees. (2) Subsections (b) and (c) of section 2540b, providing limitations. (3) Section 2540d(2), providing a definition of the term "cost". (Added P.L. 106-398, § 1[1033(a)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A-260; amended P.L. 107-107, § 1048(a)(24), Dec. 28, 2001, 115 Stat. 1224.) § 2541d. Reports (a) REPORT BY COMMERCIAL FIRMS TO SECRETARY OF DEFENSE. The Secretary of Defense shall require each qualified commercial firm for which a loan is guaranteed under this subchapter to submit to the Secretary a report on the improvements financed or refinanced with the loan. The report shall include an assessment of the value of the improvements for the protection of the critical infrastructure of that commercial firm. The Secretary shall prescribe the time for submitting the report. (b) ANNUAL REPORT BY SECRETARY OF DEFENSE TO CONGRESS. Not later than March 1 of each year in which guarantees are made under this subchapter, the Secretary of Defense shall submit to Congress a report on the loan guarantee program under this subchapter. The report shall include the following: (1) The amounts of the loans for which guarantees were issued during the year preceding the year of the report. (2) The success of the program in improving the protection of the critical infrastructure of the commercial firms covered by the guarantees. (3) The relationship of the loan guarantee program to the critical infrastructure protection program of the Department of Defense, together with an assessment of the extent to which the loan guarantee program supports the critical infrastructure protection program. (4) Any other information on the loan guarantee program that the Secretary considers appropriate to include in the report. (Added P.L. 106–398, § 1[1033(a)(1)], Oct. 30, 2000, 114 Stat. 1654, 1654A-260.) |