View all text of Subchapter II [§ 4531 - § 4535]
§ 4531. Presidential authorization for the national defense
(a) Expediting production and deliveries or services
(1) Authorized activities
(2) Presidential determinations requiredExcept 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 loansLoans 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 661a of title 2; 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.
(b) Fiscal agents of the United States
(1) In general
(2) Funds
(3) Limit on liability
(4) Reimbursements
(c) Oversight
(1) In general
(2) Other authorityThe 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 generalIf the making of any guarantee or obligation of the Federal Government under this subchapter 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 authorizedThe 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 limitationsThe 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.
(Sept. 8, 1950, ch. 932, title III, § 301, as added Pub. L. 111–67, § 7, Sept. 30, 2009, 123 Stat. 2010.)