I 

111TH CONGRESS 

2D SESSION H. R. 4629 

To create a loan program to provide funds to State special purpose vehicles 

for use in collateral support programs and loan participation programs 

to benefit qualified manufacturers. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 22, 2010 

Mr. LEVIN (for himself, Mr. FRANK of Massachusetts, Mr. PETERS, Mr. 

MOORE of Kansas, Mr. DINGELL, Mr. KANJORSKI, Mr. RANGEL, Ms. 

FUDGE, Mr. KILDEE, Mr. PASCRELL, Mr. LIPINSKI, Mr. DOYLE, Ms. 

SCHWARTZ, Mr. BUTTERFIELD, Mr. ETHERIDGE, and Mr. RYAN of Ohio) 

introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To create a loan program to provide funds to State special 

purpose vehicles for use in collateral support programs 

and loan participation programs to benefit qualified manufacturers. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Manufacturing Mod5 ernization and Diversification Act of 2010’’. 


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1 SEC. 2. DEFINITIONS. 

2 For purposes of this Act: 

3 (1) BANK.—The term ‘‘bank’’ means— 

4 (A) an insured depository institution, as 

5 such term is defined under section 3(c)(2) of 

6 the Federal Deposit Insurance Act (12 U.S.C. 

7 1813(c)(2)); and 

8 (B) an insured credit union, as such term 

9 is defined under section 101(7) of the Federal 

10 Credit Union Act (12 U.S.C. 1752(7)). 

11 (2) COLLATERAL SUPPORT PROGRAM.—The 

12 term ‘‘Collateral Support Program’’ means a pro13 gram described under section 4. 

14 (3) LOAN PARTICIPATION PROGRAM.—The term 

15 ‘‘Loan Participation Program’’ means a program de16 scribed under section 5. 

17 (4) QUALIFIED MANUFACTURER.—The term 

18 ‘‘qualified manufacturer’’ means a business that is 

19 engaged in manufacturing and— 

20 (A) has less than $50,000,000 in annual 

21 revenue; and 

22 (B) has less than $50,000,000 in assets. 

23 (5) REVOLVING LOAN FUND.—The term ‘‘re24 volving loan fund’’ means the revolving loan fund es25 tablished under section 3(d). 


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1 (6) SECRETARY.—The term ‘‘Secretary’’ means 

2 the Secretary of the Treasury. 

3 (7) SPV.—The term ‘‘SPV’’ means a special 

4 purpose vehicle created by a State. 

5 (8) TERMINATION DATE.—The term ‘‘termi6 nation date’’ means the date that is the end of the 

7 2-year period beginning on the date the Secretary 

8 issues regulations pursuant to section 3(b)(4). 

9 SEC. 3. FEDERAL LOAN PROGRAM TO SPVS. 

10 (a) IN GENERAL.—The Secretary shall certify SPVs 

11 to take part in a program to carry out Collateral Support 

12 Programs and Loan Participation Programs for the ben13 efit of qualified manufacturers (hereinafter in this section 

14 described as the ‘‘loan program’’). 

15 (b) APPLICATION PROCESS.— 

16 (1) IN GENERAL.—Each SPV wishing to par17 ticipate in the loan program shall submit an applica18 tion to the Secretary, in such form and manner as 

19 the Secretary may require, containing— 

20 (A) a detailed proposal for the structure of 

21 the Collateral Support Program the SPV pro22 poses to carry out, including what criteria the 

23 SPV intends to use to determine which quali24 fied manufacturers will be eligible to partici25 pate; 


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1 (B) a detailed proposal for the structure of 

2 the Loan Participation Program the SPV pro3 poses to carry out, including what criteria the 

4 SPV intends to use to determine which quali5 fied manufacturers will be eligible to partici6 pate; and 

7 (C) such other information as the Sec8 retary may require. 

9 (2) ADDITIONAL REQUIREMENTS.— 

10 (A) INTEREST RATE.—Loans made to 

11 SPVs by the Secretary under the loan program 

12 shall be made with an interest rate of 0.5 per13 cent. 

14 (B) TREATMENT OF PAYMENTS FROM

15 QUALIFIED MANUFACTURERS.—The amount of 

16 all fees and interest payments paid by qualified 

17 manufacturers to an SPV under Collateral Sup18 port Programs and Loan Participation Pro19 grams that is more than the amount required 

20 by the SPV to repay the principal and interest 

21 amounts on loans made to the SPV under the 

22 loan program shall be retained by the SPV. 

23 (C) NO DISQUALIFICATION BY REASON OF

24 PARTICIPATION.—Participation in a Collateral 

25 Support Program or a Loan Participation ProVerDate Nov 24 2008 07:03 Feb 23, 2010 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4629.IH H4629

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1 gram by a qualified manufacturer shall not dis2 qualify such manufacturer from receiving as3 sistance related to such loan under other Fed4 eral programs as well, including programs car5 ried out by the Small Business Administration 

6 and the Department of Agriculture. 

7 (D) LIMITATIONS ON SPVS.—Only 1 SPV 

8 per State may be certified to participate in the 

9 loan program. 

10 (E) OVERSIGHT.—The Secretary shall 

11 issue regulations to require each SPV partici12 pating in the loan program to make periodic re13 ports to the Secretary at any time such SPV 

14 has a loan outstanding under the loan program. 

15 Such reports shall contain such information as 

16 the Secretary determines appropriate to main17 tain oversight of the funds used in the loan pro18 gram. 

19 (3) DETERMINATION FACTORS.—In making the 

20 determination of which SPVs should be certified to 

21 take part in the loan program, the Secretary shall 

22 consider— 

23 (A) all information submitted in the appli24 cation of an SPV under paragraph (1); 


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1 (B) the number of jobs that will likely be 

2 created by programs proposed by the SPV; 

3 (C) the amount of economic distress expe4 rienced by the State in which the SPV is lo5 cated, including the unemployment rate of such 

6 State; and 

7 (D) the likelihood that the SPV will be 

8 able to successfully administer the programs 

9 proposed by the SPV. 

10 (4) RULEMAKING.—The Secretary shall issue 

11 all regulations necessary for the submission of appli12 cations described under paragraph (1) no later than 

13 90 days after the date of the enactment of this Act. 

14 (c) LOAN-MAKING PROCESS.— 

15 (1) IN GENERAL.—Each time a certified SPV 

16 wishes to make a loan under a Collateral Support 

17 Program or a Loan Participation Program, the cer18 tified SPV shall make a request to the Secretary, 

19 who shall loan the requested amount to the SPV 

20 from the revolving loan fund, as long as sufficient 

21 amounts remain in the fund. 

22 (2) TIME PERIOD.—An SPV may not make any 

23 new loans under a Collateral Support Program or a 

24 Loan Participation Program after the termination 

25 date. 


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1 (d) REVOLVING LOAN FUND.— 

2 (1) IN GENERAL.—There is established in the 

3 Treasury a revolving loan fund for the loan program. 

4 (2) INITIAL TRANSFER.— 

5 (A) FUNDING FROM THE TARP.—Of funds 

6 made available to the Secretary under title I of 

7 the Emergency Economic Stabilization Act of 

8 2008 (12 U.S.C. 5211 et seq.) that remain un9 obligated, the Secretary shall transfer and cred10 it $20,000,000,000 to the revolving loan fund. 

11 (B) AUTHORIZATION.—The amounts 

12 transferred under subparagraph (A) shall be 

13 deemed to be for actions authorized under title 

14 I of the Emergency Economic Stabilization Act 

15 of 2008. 

16 (3) EXPENDITURES.—The Secretary shall use 

17 the amounts in the revolving loan fund to carry out 

18 the loan program. 

19 (4) DEPOSITS.—The Secretary shall deposit 

20 amounts received as payment and interest on loans 

21 provided under the loan program into the revolving 

22 loan fund. 

23 (e) TERMINATION OF LOAN PROGRAM.—On and 

24 after the termination date— 


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1 (1) no additional loans may be made by the 

2 Secretary under the loan program; 

3 (2) all amounts in the revolving loan fund shall 

4 be paid into the general fund of the Treasury; and 

5 (3) all amounts that would otherwise have been 

6 paid into the revolving loan fund shall be paid into 

7 the general fund of the Treasury. 

8 SEC. 4. COLLATERAL SUPPORT PROGRAM. 

9 (a) IN GENERAL.—With respect to an SPV, a pro10 gram is described under this section if, under such pro11 gram— 

12 (1) a qualified manufacturer that wishes to re13 ceive a loan from a bank, but would not otherwise 

14 have sufficient collateral to qualify for such a loan, 

15 may ask the bank to seek collateral support for such 

16 loan from the SPV; 

17 (2) the bank submits an application to the SPV 

18 to participate in the collateral support program, in 

19 such form and manner and containing such informa20 tion as the SPV may require; 

21 (3) the SPV, if approving such application, de22 posits cash with the bank in an interest bearing ac23 count under the SPV’s name, and allows such cash 

24 to act as collateral support for the qualified manu25 facturer’s loan; 


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1 (4) the interest paid on such cash deposit is 

2 paid to the SPV; and 

3 (5) as the qualified manufacturer repays the 

4 loan over time, the SPV draws down the amount de5 posited with the bank. 

6 (b) ADDITIONAL REQUIREMENTS.—A program de7 scribed under subsection (a) shall additionally have the 

8 following requirements: 

9 (1) DEPOSIT LIMITS.—The cash deposit made 

10 by the SPV may not represent more than 49.9 per11 cent of the total loan amount and may not be in an 

12 amount more than 49.9 percent of the non-equity 

13 capital of the qualified manufacturer at the time the 

14 loan is made. 

15 (2) LOAN AMOUNT.—The SPV may not provide 

16 more than $20,000,000 to any one qualified manu17 facturer under the collateral support program. 

18 (3) FEES.—The SPV shall require a fee or fees 

19 to be paid by the qualified manufacturer to the SPV, 

20 at loan closing or annually, which shall consist of no 

21 more than 3 percent of the value of the cash deposit 

22 per fee. The SPV may determine whether such fee 

23 should be paid in cash or in options to purchase eq24 uity in the qualified manufacturer, but in no case 

25 may such options allow for the purchase of equity in 


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1 the qualified manufacturer that would result in the 

2 SPV holding more than 15 percent of the voting 

3 rights of the equity of such qualified manufacturer. 

4 (4) EXIT FEE.—In the event that the qualified 

5 manufacturer defaults on the loan made under the 

6 collateral support program, the bank shall repay to 

7 the SPV an amount equal to 5 percent of the initial 

8 deposit made by the SPV. 

9 (5) OVERSIGHT.—The SPV shall require— 

10 (A) the bank to make periodic reports to 

11 the SPV during the life of the loan; and 

12 (B) such other reports from the bank and 

13 the qualified manufacturer as the SPV deter14 mines appropriate to maintain oversight. 

15 SEC. 5. LOAN PARTICIPATION PROGRAM. 

16 (a) IN GENERAL.—With respect to an SPV, a pro17 gram is described under this section if, under such pro18 gram— 

19 (1) a qualified manufacturer that wishes to re20 ceive a loan from a bank, but would not otherwise 

21 qualify for such a loan, may ask the bank to seek 

22 loan participation for such loan from the SPV; 

23 (2) the bank submits an application to the SPV 

24 to participate in the loan participation program, in 


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1 such form and manner and containing such informa2 tion as the SPV may require; 

3 (3) the SPV, if approving such application, will 

4 agree to purchase between 1 to 49.9 percent of such 

5 loan, upon the bank making such loan; 

6 (4) the bank shall continue to service the entire 

7 loan; and 

8 (5) the SPV may, in coordination with the 

9 bank, permit the qualified manufacturer to forbear 

10 payments of interest or defer payments of principal 

11 on the amount of such loan purchased by the SPV 

12 for a period of no longer than 3 years from the date 

13 such loan is made. 

14 (b) ADDITIONAL REQUIREMENTS.—A program de15 scribed under subsection (a) shall additionally have the 

16 following requirements: 

17 (1) LOAN AMOUNT.—The SPV may not pay 

18 more than $20,000,000 for any portion of loans 

19 made to any one qualified manufacturer under the 

20 loan participation program. 

21 (2) FEE.— 

22 (A) ONE-TIME FEE.—The SPV shall re23 quire a one-time fee from the qualified manu24 facturer in exchange for the SPV participating 

25 in the loan participation program. 


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1 (B) ANNUAL FEE.—The bank shall require 

2 the qualified manufacturer to pay an annual fee 

3 to the bank of a minimum of 0.5 percent, and 

4 a maximum of 2 percent, of the amount of the 

5 portion of the loan purchased by the SPV under 

6 the loan participation program. 

7 (3) OVERSIGHT.—The SPV shall require— 

8 (A) the bank to make periodic reports to 

9 the SPV during the life of the loan; and 

10 (B) such other reports from the bank and 

11 the qualified manufacturer as the SPV deter12 mines appropriate to maintain oversight. 

13 SEC. 6. REPORT. 

14 Not later than the end of the 6-month period begin15 ning on the date of the enactment of this Act, and quar16 terly thereafter while any loan remains outstanding under 

17 the loan program carried out under section 3, the Sec18 retary shall issue a report to the Congress containing— 

19 (1) a list of the active participants in Collateral 

20 Support Programs and Loan Participation Pro21 grams; and 

22 (2) an estimate of the impact the loan program 

23 has had on— 

24 (A) the overall economy; and 


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1 (B) the creation of new jobs or the preser2 vation of existing jobs. 

Æ 


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