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(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.)

SUBCHAPTER VII—CRITICAL INFRASTRUCTURE

PROTECTION LOAN GUARANTEES

Sec.
2541. Establishment of loan guarantee program.
2541a. Fees charged and collected.
2541b. Administration.
2541c. Transferability, additional limitations, and definition.
2541d. Reports.
$ 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 re

port. (Added P.L. 106–398, § 1[1033(a)(1)), Oct. 30, 2000, 114 Stat. 1654, 1654A-260.)

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2646.

Travel services: procurement for official and unofficial travel under one

contract.

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sons.

$ 2631. Supplies: preference to United States vessels

(a) Only vessels of the United States or belonging to the United States may be used in the transportation by sea of supplies bought for the Army, Navy, Air Force, or Marine Corps. However, if the President 1 finds that the freight charged by those vessels is excessive or otherwise unreasonable, contracts for transportation may be made as otherwise provided by law. Charges made for the transportation of those supplies by those vessels may not be higher than the charges made for transporting like goods for private per

(b)(1) In each request for proposals to enter into a time-charter contract for the use of a vessel for the transportation of supplies under this section, the Secretary of Defense shall require that any reflagging or repair work on a vessel for which a proposal is submitted in response to the request for proposals be performed in the United States (including any territory of the United States).

(2) In paragraph (1), the term “reflagging or repair work” means work performed on a vessel

(A) to enable the vessel to meet applicable standards to become a vessel of the United States; or

(B) to convert the vessel to a more useful military configuration.

(3) The Secretary of Defense may waive the requirement described in paragraph (1) if the Secretary determines that such waiver is critical to the national security of the United States. The Secretary shall immediately notify the Congress of any such waiver and the reasons for such waiver. (Aug. 10, 1956, ch. 1041, 70A Stat. 146; Nov. 30, 1993, P.L. 103–160, $315(a), 107 Stat. 1619.)

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$ 2646. Travel services: procurement for official and unoffi

cial travel under one contract (a) AUTHORITY.—The head of an agency may enter into a contract for travel-related services that provides for the contractor to furnish services for both official travel and unofficial travel.

1 The functions of the President under section 2631(a) were delegated to the Secretary of De. fense, with authority for redelegation, by a memorandum of the President of August 7, 1985 (50 Fed. Reg. 36565).

(b) CREDITS, DISCOUNTS, COMMISSIONS, FEES.—(1) A contract entered into under this section may provide for credits, discounts, or commissions or other fees to accrue to the Department of Defense. The accrual and amounts of credits, discounts, or commissions or other fees may be determined on the basis of the volume * (measured in the number or total amount of transactions or otherwise) of the travel-related sales that are made by the contractor under the contract.

(2) The evaluation factors applicable to offers for a contract under this section may include a factor that relates to the estimated aggregate value of any credits, discounts, commissions, or other fees that would accrue to the Department of Defense for the travel-related sales made under the contract.

(3) Commissions or fees received by the Department of Defense as a result of travel-related sales made under a contract entered into under this section shall be distributed as follows:

(A) For amounts relating to sales for official travel, credit to-appropriations available for official travel for the fiscal year in which the amounts were charged.

(B) For amounts relating to sales for unofficial travel, deposit in nonappropriated fund accounts available for morale, welfare, and recreation programs. (c) DEFINITIONS.— In this section:

(1) The term “head of an agency” has the meaning given that term in section 2302(1) of this title.

(2) The term “official travel” means travel at the expense of the Federal Government.

(3) The term "unofficial travel" means personal travel or other travel that is not paid for or reimbursed by the Federal Government out of appropriated funds.

(d) INAPPLICABILITY TO COAST GUARD AND NASA.—This section does not apply to the Coast Guard when it is not operating as a service in the Navy, nor to the National Aeronautics and Space Administration. (Added P.L. 105–261, $ 813, Oct. 17, 1998, 112 Stat. 2087.)

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