I 

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. 

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 ‘‘Bill to Underwrite In5 creased Lending to Domestic (BUILD) Manufacturing 

6 Act’’ or the ‘‘BUILD Manufacturing Act’’. 

7 SEC. 2. DEFINITIONS. 

8 For purposes of this Act: 


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1 (1) MANUFACTURING COMPANY.—The term 

2 ‘‘manufacturing company’’ means a company en3 gaged in the mechanical, physical, or chemical trans4 formation or production of materials, substances, or 

5 components into new products. 

6 (2) TALF.—The term ‘‘TALF’’ means the 

7 Term Asset-Backed Securities Loan Facility estab8 lished by the Board of Governors of the Federal Re9 serve System and announced on March 3, 2009. 

10 SEC. 3. FINDINGS. 

11 The Congress finds the following: 

12 (1) Manufacturing is a crucial component of the 

13 United States economy, creating wealth through the 

14 value-added production of quality goods. 

15 (2) Manufacturing employed 13.5 million Amer16 icans in 2008. 

17 (3) The manufacturing sector comprises 13.6 

18 percent of the United States national GDP, totaling 

19 $1.6 trillion in value as of 2007, and generates ap20 proximately two-thirds of the Nation’s exports. 

21 (4) Domestic manufacturing is vital to our Na22 tion’s national security, is a source of long-term 

23 strategic advantage, and ensures a reliable and dedi24 cated source of production for essential materials 

25 and goods. 


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1 (5) The current economic crisis has had par2 ticularly negative effects on the manufacturing sec3 tor, leading to sharp reductions in employment, out4 put, and factory operating rates. 

5 (6) Continued reductions in the domestic manu6 facturing sector would result in increased depend7 ence on foreign factories, greater job loss, and de8 clines in long-term competitiveness of the United 

9 States economy. 

10 (7) The recovery and expansion of the United 

11 States manufacturing sector is being hampered by 

12 an absence of affordable and available credit, caused 

13 by the financial sector and subprime crisis. 

14 (8) While the United States Treasury has made 

15 available significant financial resources for recovery 

16 of the United States financial sector, lending to com17 mercial and private entities has not followed suit. 

18 (9) Available and affordable credit will be cru19 cial to the recovery of the manufacturing sector, en20 abling renewed capital and asset purchases, facility 

21 expansions, investment in new product lines, and in22 creased hiring and employment. 


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1 SEC. 4. SENSE OF THE CONGRESS ON LENDING TO THE DO2 MESTIC MANUFACTURING SECTOR. 

3 It is the sense of the Congress that the President, 

4 acting through the Secretary of the Treasury, should use 

5 all available powers to encourage financial institutions 

6 that are in receipt of Federal financial support to imme7 diately increase lending to the domestic manufacturing 

8 sector. 

9 SEC. 5. MANUFACTURING LOAN GUARANTEE PROGRAM. 

10 (a) ESTABLISHMENT.— 

11 (1) IN GENERAL.—There is hereby established 

12 within the Department of the Treasury a program to 

13 be known as the ‘‘Manufacturing Loan Guarantee 

14 Program’’ (hereinafter referred to in this section as 

15 the ‘‘Program’’). 

16 (2) HEAD OF THE PROGRAM.—The Program 

17 shall be headed by the Administrator of the TALF 

18 (hereinafter referred to in this section as the ‘‘Ad19 ministrator’’). 

20 (b) LOAN GUARANTEE PROGRAM.— 

21 (1) PURPOSE.—The purpose of the Program 

22 under this section is to guarantee loans made to 

23 manufacturing companies. 

24 (2) APPLICATION.—An insured depository insti25 tution (as such term is defined in section 3(c) of the 

26 Federal Deposit Insurance Act (12 U.S.C. 1813(c))) 


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1 that wishes to make loans that are guaranteed under 

2 the Program may submit an application to take part 

3 in the Program to the Administrator in such form 

4 and manner and containing such information as the 

5 Administrator may require. 

6 (3) SELECTION CRITERIA.—The Administrator 

7 shall approve any depository institution submitting a 

8 full and complete application under paragraph (2) 

9 for participation in the Program, and shall guar10 antee loans on a first-come-first-served basis. In11 sured depository institutions shall submit all loans 

12 made as part of the Program. 

13 (4) OVERSIGHT.— 

14 (A) LOAN TERMS.—Not later than 7 days 

15 after a loan guaranteed under the Program is 

16 originated, the insured depository institution 

17 making such loan shall submit all information 

18 about the terms and conditions of such loan to 

19 the Administrator. 

20 (B) SUSPENSION AND TERMINATION AU21 THORITY.—Notwithstanding paragraph (3), the 

22 Administrator shall, not less than yearly, review 

23 all of the loans made by each insured depository 

24 institution that are guaranteed under the Pro25 gram, and may suspend or terminate any inVerDate Nov 24 2008 20:33 Jun 19, 2009 Jkt 079200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2936.IH H2936

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1 sured depository institution’s future participa2 tion in the Program if the Administrator finds 

3 that such institution has engaged in fraud or 

4 abuse with respect to the Program, or has con5 sistently made loans guaranteed under the Pro6 gram that are not repaid by the borrower in ac7 cordance with the terms of the loan. 

8 (5) LOAN ELIGIBILITY.—A loan can only be 

9 guaranteed under the Program if at meets the fol10 lowing requirements: 

11 (A) NET WORTH LIMITATION ON LOAN

12 AMOUNT.—The amount of such loan is less 

13 than 1.5 times the gross net worth of the man14 ufacturing company receiving the loan. 

15 (B) USE OF LOAN.—Such loan is only used 

16 for the purchase of capital, assets, energy effi17 ciency upgrades, productivity enhancements, or 

18 building expenses, paying payroll expenses, or 

19 paying operating costs. Such loan is not used to 

20 pay down existing debt, pay outstanding obliga21 tions, or to pay for an increase in salary 

22 amounts for executives of the manufacturing 

23 company receiving the loan. 

24 (C) SPECIFIC TERM REQUIREMENTS.—The 

25 term of such loan is no more than— 


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1 (i) 30 years, in the case of a loan used 

2 to purchase real estate or to pay for build3 ing expenses; 

4 (ii) the lesser of 15 years or the useful 

5 life of the machinery or equipment, in the 

6 case of a loan used to purchase machinery 

7 or equipment; and 

8 (iii) 5 years, in the case of any other 

9 loan. 

10 (D) INTEREST RATES.—Notwithstanding 

11 the provisions of the constitution of any State 

12 or the laws of any State limiting the rate or 

13 amount of interest which may be charged, 

14 taken, received, or reserved, the maximum legal 

15 rate of interest on such loan shall not sub16 stantively differ from the current average mar17 ket yield on outstanding marketable obligations 

18 of similar privately held loans with remaining 

19 periods to maturity comparable to such loan. 

20 (6) MULTIPLE GUARANTEES PERMITTED; AG21 GREGATE DOLLAR AMOUNT LIMITATION.—A single 

22 manufacturing company is permitted to have more 

23 than one loan guaranteed under this section, but the 

24 aggregate amount of all such loans guaranteed for 

25 a single manufacturing company may be no more 


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1 than $50,000,000. The Administrator shall have the 

2 discretion to raise such limit from $50,000,000 to 

3 $75,000,000 for a particular manufacturing com4 pany if the Administrator determines doing so will 

5 advance the purpose of this section. 

6 (7) GOVERNMENT GUARANTEE.— 

7 (A) LEVEL OF PARTICIPATION.—Loans 

8 guaranteed under the Program shall be guaran9 teed in the following percentages: 

10 (i) for loans under $10,000,000, 70 

11 percent; 

12 (ii) for loans between $10,000,000 

13 and $30,000,000, 65 percent; and 

14 (iii) for loans over $30,000,000, 60 

15 percent. 

16 (B) PERCENTAGE ADJUSTMENTS.— 

17 (i) IN GENERAL.—The Administrator 

18 shall have the power to adjust loan guar19 antee percentages for loans guaranteed 

20 under the Program in order to maximize 

21 lending and minimize default rates of par22 ticipating manufacturers. Any such adjust23 ments must further the goals of the Pro24 gram. 


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1 (ii) TIMING OF ADJUSTMENTS.—Ad2 justments under clause (i) may not be 

3 made before the date that is 3 months 

4 after the date of the enactment of this Act, 

5 and may not be made more often than 

6 every 3 months. 

7 (iii) EQUAL ADJUSTMENTS RE8 QUIRED.—Adjustments under clause (i) 

9 must adjust each percentage under sub10 paragraphs (A)(i), (A)(ii), and (A)(iii) by 

11 the same amount. 

12 (iv) MINIMUM LEVELS.—In making 

13 an adjustment under clause (i), the Admin14 istrator shall seek to ensure that such ad15 justment will result in the maintained in16 terest of insured depository institutions in 

17 participating in the Program. 

18 (C) PAYMENT OF ACCRUED INTEREST.— 

19 (i) IN GENERAL.—Any insured deposi20 tory institution making a claim for pay21 ment on the guaranteed portion of a loan 

22 guaranteed under the Program shall be 

23 paid the accrued interest due on the loan 

24 from the earliest date of default to the 

25 date of payment of the claim at a rate not 


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1 to exceed the rate of interest on the loan 

2 on the date of default, minus one percent. 

3 (ii) LOANS SOLD ON SECONDARY MAR4 KET.—If a loan described in clause (i) is 

5 sold on the secondary market, the amount 

6 of interest paid to an insured depository 

7 institution described in that clause from 

8 the earliest date of default to the date of 

9 payment of the claim shall be no more 

10 than the agreed upon rate, minus one per11 cent. 

12 (8) REGULATIONS.—The Administrator shall 

13 promulgate any regulations needed to carry out this 

14 section. 

15 (9) FUNDING.— 

16 (A) IN GENERAL.—$20,000,000,000 of the 

17 funds made available to the TALF, or any suc18 cessor entity, shall be used to carry out the 

19 Program, of which $10,000,000,000 shall be 

20 used to guarantee loans made to manufacturing 

21 companies employing less then 500 individuals. 

22 (B) ADMINISTRATIVE COSTS.—Of the 

23 amount described in paragraph (A), not more 

24 than $1,000,000 per year may be used to pay 


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1 for salaries and other administrative fees asso2 ciated with carrying out the Program. 

3 (c) SENSE OF THE CONGRESS ON SMALL BUSINESS

4 PARTICIPATION.—It is the sense of the Congress that the 

5 Administrator should encourage insured depository insti6 tutions taking part in the Program to focus on lending 

7 to small- and medium-sized manufacturers. 

8 (d) REPORTS REQUIRED.— 

9 (1) ADMINISTRATOR REPORTS.—Not later than 

10 180 days after the date of the enactment of this Act, 

11 and yearly thereafter, the Administrator shall sub12 mit a report to the Congress, and make such report 

13 available on a website, detailing all loans guaranteed 

14 under the Program, the effect of such guarantees on 

15 the manufacturing industry of the United States, 

16 and the overall effectiveness of the Program. 

17 (2) GAO REPORTS.—Notwithstanding section 

18 714(b) of title 31, United States Code, not later 

19 than 1 year after the date of the enactment of this 

20 Act, and yearly thereafter through the end of 2011, 

21 the Comptroller General of the United States shall 

22 transmit a report to the Congress detailing— 

23 (A) the implementation of this section; 


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1 (B) any waste, fraud, abuse, or mis2 management of funds discovered in the imple3 mentation of this section; 

4 (C) any insured depository institution that 

5 appears to have repeatedly made loans guaran6 teed under the Program for which the bor7 rowers on such loans were not able to make 

8 timely payments as required by the loan terms; 

9 (D) recommendations to improve the im10 plementation of this section; 

11 (E) the impact of the provisions of this 

12 section on the economy of the United States, 

13 specifically focusing on the manufacturing sec14 tor; and 

15 (F) adjustments to the loan guarantee per16 centages and their impact on domestic lending 

17 to the United States manufacturing industry. 

Æ 


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