H. R. 1664

One Hundred Sixth Congress

of the

United States of America

AT THE FIRST SESSION

Begun and held at the City of Washington on Wednesday,

the sixth day of January, one thousand nine hundred and ninety-nine

An Act

Providing emergency authority for guarantees of loans to qualified steel and iron

ore companies and to qualified oil and gas companies, and for other purposes.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled, That the

following sums are appropriated, out of any money in the Treasury

not otherwise appropriated, for the fiscal year ending September

30, 1999, and for other purposes, namely:

CHAPTER 1

SEC. 101. EMERGENCY STEEL LOAN GUARANTEE PROGRAM. (a)

SHORT TITLE.—This chapter may be cited as the ‘‘Emergency Steel

Loan Guarantee Act of 1999’’.

(b) CONGRESSIONAL FINDINGS.—Congress finds that—

(1) the United States steel industry has been severely

harmed by a record surge of more than 40,000,000 tons of

steel imports into the United States in 1998, caused by the

world financial crisis;

(2) this surge in imports resulted in the loss of more than

10,000 steel worker jobs in 1998, and was the imminent cause

of three bankruptcies by medium-sized steel companies, Acme

Steel, Laclede Steel, and Geneva Steel;

(3) the crisis also forced almost all United States steel

companies into—

(A) reduced volume, lower prices, and financial losses;

and

(B) an inability to obtain credit for continued

operations and reinvestment in facilities;

(4) the crisis also has affected the willingness of private

banks and investment institutions to make loans to the United

States steel industry for continued operation and reinvestment

in facilities;

(5) these steel bankruptcies, job losses, and financial losses

are also having serious negative effects on the tax base of

cities, counties, and States, and on the essential health, education, and municipal services that these government entities

provide to their citizens; and

(6) a strong steel industry is necessary to the adequate

defense preparedness of the United States in order to have

sufficient steel available to build the ships, tanks, planes, and

armaments necessary for the national defense.

(c) DEFINITIONS.—For purposes of this section:

(1) BOARD.—The term ‘‘Board’’ means the Loan Guarantee

Board established under subsection (e).
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(2) PROGRAM.—The term ‘‘Program’’ means the Emergency

Steel Guarantee Loan Program established under subsection

(d).

(3) QUALIFIED STEEL COMPANY.—The term ‘‘qualified steel

company’’ means any company that—

(A) is incorporated under the laws of any State;

(B) is engaged in the production and manufacture of

a product defined by the American Iron and Steel Institute

as a basic steel mill product, including ingots, slab and

billets, plates, flat-rolled steel, sections and structural products, bars, rail type products, pipe and tube, and wire

rod; and

(C) has experienced layoffs, production losses, or

financial losses since the beginning of the steel import

crisis, in January 1998 or that operates substantial assets

of a company that meets these qualifications.

(d) ESTABLISHMENT OF EMERGENCY STEEL GUARANTEE LOAN

PROGRAM.—There is established the Emergency Steel Guarantee

Loan Program, to be administered by the Board, the purpose of

which is to provide loan guarantees to qualified steel companies

in accordance with this section.

(e) LOAN GUARANTEE BOARD MEMBERSHIP.—There is

established a Loan Guarantee Board, which shall be composed

of—

(1) the Secretary of Commerce;

(2) the Chairman of the Board of Governors of the Federal

Reserve System, who shall serve as Chairman of the Board;

and

(3) the Chairman of the Securities and Exchange

Commission.

(f ) LOAN GUARANTEE PROGRAM.—

(1) AUTHORITY.—The Program may guarantee loans provided to qualified steel companies by private banking and

investment institutions in accordance with the procedures,

rules, and regulations established by the Board.

(2) TOTAL GUARANTEE LIMIT.—The aggregate amount of

loans guaranteed and outstanding at any one time under this

section may not exceed $1,000,000,000.

(3) INDIVIDUAL GUARANTEE LIMIT.—The aggregate amount

of loans guaranteed under this section with respect to a single

qualified steel company may not exceed $250,000,000.

(4) TIMELINES.—The Board shall approve or deny each

application for a guarantee under this section as soon as possible after receipt of such application.

(5) ADDITIONAL COSTS.—For the additional cost of the loans

guaranteed under this subsection, including the costs of modifying the loans as defined in section 502 of the Congressional

Budget Act of 1974 (2 U.S.C. 661a), there is appropriated

$140,000,000 to remain available until expended.

(g) REQUIREMENTS FOR LOAN GUARANTEES.—A loan guarantee

may be issued under this section upon application to the Board

by a qualified steel company pursuant to an agreement to provide

a loan to that qualified steel company by a private bank or investment company, if the Board determines that—

(1) credit is not otherwise available to that company under

reasonable terms or conditions sufficient to meet its financing
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needs, as reflected in the financial and business plans of that

company;

(2) the prospective earning power of that company, together

with the character and value of the security pledged, furnish

reasonable assurance of repayment of the loan to be guaranteed

in accordance with its terms;

(3) the loan to be guaranteed bears interest at a rate

determined by the Board to be reasonable, taking into account

the current average yield on outstanding obligations of the

United States with remaining periods of maturity comparable

to the maturity of such loan;

(4) the company has agreed to an audit by the General

Accounting Office prior to the issuance of the loan guarantee

and annually thereafter while any such guaranteed loan is

outstanding; and

(5) in the case of a purchaser of substantial assets of

a qualified steel company, the qualified steel company establishes that it is unable to reorganize itself.

(h) TERMS AND CONDITIONS OF LOAN GUARANTEES.—

(1) LOAN DURATION.—All loans guaranteed under this section shall be payable in full not later than December 31, 2005,

and the terms and conditions of each such loan shall provide

that the loan may not be amended, or any provision thereof

waived, without the consent of the Board.

(2) LOAN SECURITY.—Any commitment to issue a loan guarantee under this section shall contain such affirmative and

negative covenants and other protective provisions that the

Board determines are appropriate. The Board shall require

security for the loans to be guaranteed under this section

at the time at which the commitment is made.

(3) FEES.—A qualified steel company receiving a guarantee

under this section shall pay a fee to the Department of the

Treasury to cover costs of the program, but in no event shall

such fee exceed an amount equal to 0.5 percent of the outstanding principal balance of the guaranteed loan.

(4) GUARANTEE LEVEL.—No loan guarantee may be provided

under this section if the guarantee exceeds 85 percent of the

amount of principal of the loan.

(i) REPORTS TO CONGRESS.—The Secretary of Commerce shall

submit to Congress a full report of the activities of the Board

under this section during each of fiscal years 1999 and 2000, and

annually thereafter, during such period as any loan guaranteed

under this section is outstanding.

( j) SALARIES AND ADMINISTRATIVE EXPENSES.—For necessary

expenses to administer the Program, $5,000,000 is appropriated

to the Department of Commerce, to remain available until expended,

which may be transferred to the Office of the Assistant Secretary

for Trade Development of the International Trade Administration.

(k) TERMINATION OF GUARANTEE AUTHORITY.—The authority

of the Board to make commitments to guarantee any loan under

this section shall terminate on December 31, 2001.

(l) REGULATORY ACTION.—The Board shall issue such final

procedures, rules, and regulations as may be necessary to carry

out this section not later than 60 days after the date of the enactment of this Act.

(m) IRON ORE COMPANIES.—
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(1) IN GENERAL.—Subject to the requirements of this subsection, an iron ore company incorporated under the laws of

any State shall be treated as a qualified steel company for

purposes of the Program.

(2) TOTAL GUARANTEE LIMIT FOR IRON ORE COMPANY.—

Of the aggregate amount of loans authorized to be guaranteed

and outstanding at any one time under subsection (f )(2), an

amount not to exceed $30,000,000 shall be loans with respect

to iron ore companies.

FEDERAL ADMINISTRATIVE AND TRAVEL EXPENSES

(RESCISSIONS)

SEC. 102. (a) Of the funds available in the nondefense category

to the agencies of the Federal Government, $145,000,000 are hereby

rescinded: Provided, That rescissions pursuant to this subsection

shall be taken only from administrative and travel accounts: Provided further, That rescissions shall be taken on a pro rata basis

from funds available to every Federal agency, department, and

office in the executive branch, including the Office of the President.

(b) Within 30 days after the date of the enactment of this

Act, the Director of the Office of Management and Budget shall

submit to the Committees on Appropriations of the House of Representatives and the Senate a listing of the amounts by account

of the reductions made pursuant to the provisions of subsection

(a) of this section.

CHAPTER 2

SEC. 201. PETROLEUM DEVELOPMENT MANAGEMENT. (a) SHORT

TITLE.—This chapter may be cited as the ‘‘Emergency Oil and

Gas Guaranteed Loan Program Act’’.

(b) FINDINGS.—Congress finds that—

(1) consumption of foreign oil in the United States is

estimated to equal 56 percent of all oil consumed, and that

percentage could reach 68 percent by 2010 if current prices

prevail;

(2) the number of oil and gas rigs operating in the United

States is at its lowest since 1944, when records of this tally

began;

(3) if prices do not increase soon, the United States could

lose at least half its marginal wells, which in aggregate produce

as much oil as the United States imports from Saudi Arabia;

(4) oil and gas prices are unlikely to increase for at least

several years;

(5) declining production, well abandonment, and greatly

reduced exploration and development are shrinking the

domestic oil and gas industry;

(6) the world’s richest oil producing regions in the Middle

East are experiencing increasingly greater political instability;

(7) United Nations policy may make Iraq the swing oil

producing nation, thereby granting Saddam Hussein tremendous power;

(8) reliance on foreign oil for more than 60 percent of

our daily oil and gas consumption is a national security threat;
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(9) the level of United States oil security is directly related

to the level of domestic production of oil, natural gas liquids,

and natural gas; and

(10) a national security policy should be developed that

ensures that adequate supplies of oil are available at all times

free of the threat of embargo or other foreign hostile acts.

(c) DEFINITIONS.—In this section:

(1) BOARD.—The term ‘‘Board’’ means the Loan Guarantee

Board established by subsection (e).

(2) PROGRAM.—The term ‘‘Program’’ means the Emergency

Oil and Gas Guaranteed Loan Program established by subsection (d).

(3) QUALIFIED OIL AND GAS COMPANY.—The term ‘‘qualified

oil and gas company’’ means a company that—

(A) is—

(i) an independent oil and gas company (within

the meaning of section 57(a)(2)(B)(i) of the Internal

Revenue Code of 1986); or

(ii) a small business concern under section 3 of

the Small Business Act (15 U.S.C. 632) (or a company

based in Alaska, including an Alaska Native Corporation created pursuant to the Alaska Native Claims

Settlement Act (43 U.S.C. 1601 et seq.)) that is an

oil field service company whose main business is providing tools, products, personnel, and technical solutions on a contractual basis to exploration and production operators that drill, complete wells, and produce,

transport, refine, and sell hydrocarbons and their

byproducts as the main commercial business of the

concern or company; and

(B) has experienced layoffs, production losses, or financial losses since the beginning of the oil import crisis,

after January 1, 1997.

(d) EMERGENCY OIL AND GAS GUARANTEED LOAN PROGRAM.—

(1) IN GENERAL.—There is established the Emergency Oil

and Gas Guaranteed Loan Program, the purpose of which shall

be to provide loan guarantees to qualified oil and gas companies

in accordance with this section.

(2) LOAN GUARANTEE BOARD.—There is established to

administer the Program a Loan Guarantee Board, to be composed of—

(A) the Secretary of Commerce;

(B) the Chairman of the Board of Governors of the

Federal Reserve System, who shall serve as Chairman

of the Board; and

(C) the Chairman of the Securities and Exchange

Commission.

(e) AUTHORITY.—

(1) IN GENERAL.—The Program may guarantee loans provided to qualified oil and gas companies by private banking

and investment institutions in accordance with procedures,

rules, and regulations established by the Board.

(2) TOTAL GUARANTEE LIMIT.—The aggregate amount of

loans guaranteed and outstanding at any one time under this

section shall not exceed $500,000,000.
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(3) INDIVIDUAL GUARANTEE LIMIT.—The aggregate amount

of loans guaranteed under this section with respect to a single

qualified oil and gas company shall not exceed $10,000,000.

(4) EXPEDITIOUS ACTION ON APPLICATIONS.—The Board

shall approve or deny an application for a guarantee under

this section as soon as practicable after receipt of an application.

(5) ADDITIONAL COSTS.—For the additional cost of the loans

guaranteed under this subsection, including the costs of modifying the loans as defined in section 502 of the Congressional

Budget Act of 1974 (2 U.S.C. 661a), there is appropriated

$122,500,000 to remain available until expended.

(f ) REQUIREMENTS FOR LOAN GUARANTEES.—The Board may

issue a loan guarantee on application by a qualified oil and gas

company under an agreement by a private bank or investment

company to provide a loan to the qualified oil and gas company,

if the Board determines that—

(1) credit is not otherwise available to the company under

reasonable terms or conditions sufficient to meet its financing

needs, as reflected in the financial and business plans of the

company;

(2) the prospective earning power of the company, together

with the character and value of the security pledged, provide

a reasonable assurance of repayment of the loan to be guaranteed in accordance with its terms;

(3) the loan to be guaranteed bears interest at a rate

determined by the Board to be reasonable, taking into account

the current average yield on outstanding obligations of the

United States with remaining periods of maturity comparable

to the maturity of the loan; and

(4) the company has agreed to an audit by the General

Accounting Office before issuance of the loan guarantee and

annually while the guaranteed loan is outstanding.

(g) TERMS AND CONDITIONS OF LOAN GUARANTEES.— (1) LOAN DURATION.—All loans guaranteed under this

section shall be repayable in full not later than December

31, 2010, and the terms and conditions of each such loan

shall provide that the loan agreement may not be amended,

or any provision of the loan agreement waived, without the

consent of the Board.

(2) LOAN SECURITY.—A commitment to issue a loan guarantee under this section shall contain such affirmative and

negative covenants and other protective provisions as the Board

determines are appropriate. The Board shall require security

for the loans to be guaranteed under this section at the time

at which the commitment is made.

(3) FEES.—A qualified oil and gas company receiving a

loan guarantee under this section shall pay a fee to the Department of the Treasury to cover costs of the program, but in

no event shall such fee exceed an amount equal to 0.5 percent

of the outstanding principal balance of the guaranteed loan.

(4) GUARANTEE LEVEL.—No loan guarantee may be provided

under this section if the guarantee exceeds 85 percent of the

amount of principal of the loan.

(h) REPORTS.—During fiscal year 1999 and each fiscal year

thereafter until each guaranteed loan has been repaid in full, the

Secretary of Commerce shall submit to Congress a report on the

activities of the Board.
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(i) SALARIES AND ADMINISTRATIVE EXPENSES.—For necessary expenses to administer the Program, $2,500,000 is appropriated

to the Department of Commerce, to remain available until expended,

which may be transferred to the Office of the Assistant Secretary

for Trade Development of the International Trade Administration.

( j) TERMINATION OF GUARANTEE AUTHORITY.—The authority

of the Board to make commitments to guarantee any loan under

this section shall terminate on December 31, 2001.

(k) REGULATORY ACTION.—Not later than 60 days after the

date of the enactment of this Act, the Board shall issue such

final procedures, rules, and regulations as are necessary to carry

out this section.

FEDERAL ADMINISTRATIVE AND TRAVEL EXPENSES

(RESCISSIONS)

SEC. 202. (a) Of the funds available in the nondefense category to the agencies of the Federal Government, $125,000,000 are hereby

rescinded: Provided, That rescissions pursuant to this subsection

shall be taken only from administrative and travel accounts: Provided further, That rescissions shall be taken on a pro rata basis

from funds available to every Federal agency, department, and

office in the executive branch, including the Office of the President.

(b) Within 30 days after the date of the enactment of this

Act, the Director of the Office of Management and Budget shall

submit to the Committees on Appropriations of the House of Representatives and the Senate a listing of the amounts by account

of the reductions made pursuant to the provisions of subsection

(a) of this section.

CHAPTER 3

GENERAL PROVISIONS

SEC. 301. No part of any appropriation contained in the Act

shall remain available for obligation beyond the current fiscal year

unless expressly so provided herein.

This Act may be cited as the ‘‘Emergency Steel Loan Guarantee

and Emergency Oil and Gas Guaranteed Loan Act of 1999’’.

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.