Bill to Underwrite Increased Lending to Domestic (BUILD) Manufacturing Act or BUILD Manufacturing Act - Expresses the sense of Congress that the President should use all available powers to encourage financial institutions that are in receipt of federal financial support to immediately increase lending to the domestic manufacturing sector.
Establishes within the Treasury the Manufacturing Loan Guarantee Program, headed by the Administrator of the Term Asset-Backed Securities Loan Facility (established by the Board of Governors of the Federal Reserve System), to guarantee loans made by depository institutions to U.S. manufacturing companies. Prohibits any such loan from equaling or exceeding 1.5 times the gross net worth of the company receiving the loan. Allows a company to have more than one guaranteed loan, within aggregate dollar limits.
Authorizes the Administrator to adjust Program loan guarantee percentages in order to maximize lending and to minimize default rates of participating manufacturers.
Expresses the sense of Congress that the Administrator should encourage participating depository institutions to focus on lending to small- and medium-sized manufacturers.
[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2936 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 2936
To create a program to guarantee loans made to manufacturing companies
in order to promote increased domestic lending to the United States
manufacturing industry.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 18, 2009
Mr. Lipinski (for himself, Mr. Tim Murphy of Pennsylvania, Mr. Tonko,
Mr. Ehlers, Mr. Dingell, Ms. Kaptur, Mr. Costello, and Mr. Manzullo)
introduced the following bill; which was referred to the Committee on
Financial Services
_______________________________________________________________________
A BILL
To create a program to guarantee loans made to manufacturing companies
in order to promote increased domestic lending to the United States
manufacturing industry.
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 ``Bill to Underwrite Increased Lending
to Domestic (BUILD) Manufacturing Act'' or the ``BUILD Manufacturing
Act''.
SEC. 2. DEFINITIONS.
For purposes of this Act:
(1) Manufacturing company.--The term ``manufacturing
company'' means a company engaged in the mechanical, physical,
or chemical transformation or production of materials,
substances, or components into new products.
(2) TALF.--The term ``TALF'' means the Term Asset-Backed
Securities Loan Facility established by the Board of Governors
of the Federal Reserve System and announced on March 3, 2009.
SEC. 3. FINDINGS.
The Congress finds the following:
(1) Manufacturing is a crucial component of the United
States economy, creating wealth through the value-added
production of quality goods.
(2) Manufacturing employed 13.5 million Americans in 2008.
(3) The manufacturing sector comprises 13.6 percent of the
United States national GDP, totaling $1.6 trillion in value as
of 2007, and generates approximately two-thirds of the Nation's
exports.
(4) Domestic manufacturing is vital to our Nation's
national security, is a source of long-term strategic
advantage, and ensures a reliable and dedicated source of
production for essential materials and goods.
(5) The current economic crisis has had particularly
negative effects on the manufacturing sector, leading to sharp
reductions in employment, output, and factory operating rates.
(6) Continued reductions in the domestic manufacturing
sector would result in increased dependence on foreign
factories, greater job loss, and declines in long-term
competitiveness of the United States economy.
(7) The recovery and expansion of the United States
manufacturing sector is being hampered by an absence of
affordable and available credit, caused by the financial sector
and subprime crisis.
(8) While the United States Treasury has made available
significant financial resources for recovery of the United
States financial sector, lending to commercial and private
entities has not followed suit.
(9) Available and affordable credit will be crucial to the
recovery of the manufacturing sector, enabling renewed capital
and asset purchases, facility expansions, investment in new
product lines, and increased hiring and employment.
SEC. 4. SENSE OF THE CONGRESS ON LENDING TO THE DOMESTIC MANUFACTURING
SECTOR.
It is the sense of the Congress that the President, acting through
the Secretary of the Treasury, should use all available powers to
encourage financial institutions that are in receipt of Federal
financial support to immediately increase lending to the domestic
manufacturing sector.
SEC. 5. MANUFACTURING LOAN GUARANTEE PROGRAM.
(a) Establishment.--
(1) In general.--There is hereby established within the
Department of the Treasury a program to be known as the
``Manufacturing Loan Guarantee Program'' (hereinafter referred
to in this section as the ``Program'').
(2) Head of the program.--The Program shall be headed by
the Administrator of the TALF (hereinafter referred to in this
section as the ``Administrator'').
(b) Loan Guarantee Program.--
(1) Purpose.--The purpose of the Program under this section
is to guarantee loans made to manufacturing companies.
(2) Application.--An insured depository institution (as
such term is defined in section 3(c) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(c))) that wishes to make loans
that are guaranteed under the Program may submit an application
to take part in the Program to the Administrator in such form
and manner and containing such information as the Administrator
may require.
(3) Selection criteria.--The Administrator shall approve
any depository institution submitting a full and complete
application under paragraph (2) for participation in the
Program, and shall guarantee loans on a first-come-first-served
basis. Insured depository institutions shall submit all loans
made as part of the Program.
(4) Oversight.--
(A) Loan terms.--Not later than 7 days after a loan
guaranteed under the Program is originated, the insured
depository institution making such loan shall submit
all information about the terms and conditions of such
loan to the Administrator.
(B) Suspension and termination authority.--
Notwithstanding paragraph (3), the Administrator shall,
not less than yearly, review all of the loans made by
each insured depository institution that are guaranteed
under the Program, and may suspend or terminate any
insured depository institution's future participation
in the Program if the Administrator finds that such
institution has engaged in fraud or abuse with respect
to the Program, or has consistently made loans
guaranteed under the Program that are not repaid by the
borrower in accordance with the terms of the loan.
(5) Loan eligibility.--A loan can only be guaranteed under
the Program if at meets the following requirements:
(A) Net worth limitation on loan amount.--The
amount of such loan is less than 1.5 times the gross
net worth of the manufacturing company receiving the
loan.
(B) Use of loan.--Such loan is only used for the
purchase of capital, assets, energy efficiency
upgrades, productivity enhancements, or building
expenses, paying payroll expenses, or paying operating
costs. Such loan is not used to pay down existing debt,
pay outstanding obligations, or to pay for an increase
in salary amounts for executives of the manufacturing
company receiving the loan.
(C) Specific term requirements.--The term of such
loan is no more than--
(i) 30 years, in the case of a loan used to
purchase real estate or to pay for building
expenses;
(ii) the lesser of 15 years or the useful
life of the machinery or equipment, in the case
of a loan used to purchase machinery or
equipment; and
(iii) 5 years, in the case of any other
loan.
(D) Interest rates.--Notwithstanding the provisions
of the constitution of any State or the laws of any
State limiting the rate or amount of interest which may
be charged, taken, received, or reserved, the maximum
legal rate of interest on such loan shall not
substantively differ from the current average market
yield on outstanding marketable obligations of similar
privately held loans with remaining periods to maturity
comparable to such loan.
(6) Multiple guarantees permitted; aggregate dollar amount
limitation.--A single manufacturing company is permitted to
have more than one loan guaranteed under this section, but the
aggregate amount of all such loans guaranteed for a single
manufacturing company may be no more than $50,000,000. The
Administrator shall have the discretion to raise such limit
from $50,000,000 to $75,000,000 for a particular manufacturing
company if the Administrator determines doing so will advance
the purpose of this section.
(7) Government guarantee.--
(A) Level of participation.--Loans guaranteed under
the Program shall be guaranteed in the following
percentages:
(i) for loans under $10,000,000, 70
percent;
(ii) for loans between $10,000,000 and
$30,000,000, 65 percent; and
(iii) for loans over $30,000,000, 60
percent.
(B) Percentage adjustments.--
(i) In general.--The Administrator shall
have the power to adjust loan guarantee
percentages for loans guaranteed under the
Program in order to maximize lending and
minimize default rates of participating
manufacturers. Any such adjustments must
further the goals of the Program.
(ii) Timing of adjustments.--Adjustments
under clause (i) may not be made before the
date that is 3 months after the date of the
enactment of this Act, and may not be made more
often than every 3 months.
(iii) Equal adjustments required.--
Adjustments under clause (i) must adjust each
percentage under subparagraphs (A)(i), (A)(ii),
and (A)(iii) by the same amount.
(iv) Minimum levels.--In making an
adjustment under clause (i), the Administrator
shall seek to ensure that such adjustment will
result in the maintained interest of insured
depository institutions in participating in the
Program.
(C) Payment of accrued interest.--
(i) In general.--Any insured depository
institution making a claim for payment on the
guaranteed portion of a loan guaranteed under
the Program shall be paid the accrued interest
due on the loan from the earliest date of
default to the date of payment of the claim at
a rate not to exceed the rate of interest on
the loan on the date of default, minus one
percent.
(ii) Loans sold on secondary market.--If a
loan described in clause (i) is sold on the
secondary market, the amount of interest paid
to an insured depository institution described
in that clause from the earliest date of
default to the date of payment of the claim
shall be no more than the agreed upon rate,
minus one percent.
(8) Regulations.--The Administrator shall promulgate any
regulations needed to carry out this section.
(9) Funding.--
(A) In general.--$20,000,000,000 of the funds made
available to the TALF, or any successor entity, shall
be used to carry out the Program, of which
$10,000,000,000 shall be used to guarantee loans made
to manufacturing companies employing less then 500
individuals.
(B) Administrative costs.--Of the amount described
in paragraph (A), not more than $1,000,000 per year may
be used to pay for salaries and other administrative
fees associated with carrying out the Program.
(c) Sense of the Congress on Small Business Participation.--It is
the sense of the Congress that the Administrator should encourage
insured depository institutions taking part in the Program to focus on
lending to small- and medium-sized manufacturers.
(d) Reports Required.--
(1) Administrator reports.--Not later than 180 days after
the date of the enactment of this Act, and yearly thereafter,
the Administrator shall submit a report to the Congress, and
make such report available on a website, detailing all loans
guaranteed under the Program, the effect of such guarantees on
the manufacturing industry of the United States, and the
overall effectiveness of the Program.
(2) GAO reports.--Notwithstanding section 714(b) of title
31, United States Code, not later than 1 year after the date of
the enactment of this Act, and yearly thereafter through the
end of 2011, the Comptroller General of the United States shall
transmit a report to the Congress detailing--
(A) the implementation of this section;
(B) any waste, fraud, abuse, or mismanagement of
funds discovered in the implementation of this section;
(C) any insured depository institution that appears
to have repeatedly made loans guaranteed under the
Program for which the borrowers on such loans were not
able to make timely payments as required by the loan
terms;
(D) recommendations to improve the implementation
of this section;
(E) the impact of the provisions of this section on
the economy of the United States, specifically focusing
on the manufacturing sector; and
(F) adjustments to the loan guarantee percentages
and their impact on domestic lending to the United
States manufacturing industry.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
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