I
106TH CONGRESS
1ST SESSION
H. R. 1822
To establish an emergency loan guarantee program for steel and iron ore
companies.
IN THE HOUSE OF REPRESENTATIVES
MAY 14, 1999
Mr. REGULA (for himself, Mr. NEY, Mr. CALLAHAN, and Mr. ADERHOLT) in-
troduced the following bill; which was referred to the Committee on
Banking and Financial Services, and in addition to the Committee on the
Budget, for a period to be subsequently determined by the Speaker, in
each case for consideration of such provisions as fall within the jursidition
of the committee concerned
A BILL
To establish an emergency loan guarantee program for steel
and iron ore companies.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Emergency Steel Loan
Guarantee Program’’.
SEC. 2. 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 3 bankruptcies by me-
dium-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 fi-
nancial losses; and
(B) an inability to obtain credit for contin-
ued operations and reinvestment in facilities;
(4) the crisis also has affected the willingness
of private banks and investment institutions to make
loans to the U.S. steel industry for continued oper-
ation and reinvestment in facilities;
(5) these steel bankruptcies, job losses, and fi-
nancial losses are also having serious negative ef-
fects on the tax base of cities, counties, and States,
and on the essential health, education, and munic-
ipal 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.
SEC. 3. DEFINITIONS.
For purposes of this Act—
(1) the term ‘‘Board’’ means the Loan Guar-
antee Board established under section 5;
(2) the term ‘‘Program’’ means the Emergency
Steel Guaranteed Loan Program established under
section 4; and
(3) 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 man-
ufacture 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, after January 1, 1998.
SEC. 4. ESTABLISHMENT OF EMERGENCY STEEL GUARAN-
TEED LOAN PROGRAM.
There is established the Emergency Steel Guaranteed
Loan Program, to be administered by the Board, the pur-
pose of which is to provide loan guarantees to qualified
steel companies in accordance with this Act.
SEC. 5. LOAN GUARANTEE BOARD MEMBERSHIP.
There is established a Loan Guarantee Board, which
shall be composed of—
(1) the Secretary of Commerce, who shall serve
as Chairman of the Board;
(2) the Secretary of Labor; and
(3) the Secretary of the Treasury.
SEC. 6. LOAN GUARANTEE PROGRAM.
(a) AUTHORITY.—The Program may guarantee loans
provided to qualified steel companies by private banking
and investment institutions in accordance with the proce-
dures, rules, and regulations established by the Board.
(b) TOTAL
GUARANTEE
LIMIT.—The aggregate
amount of loans guaranteed and outstanding at any one
time under this Act may not exceed $1,000,000,000.
(c) INDIVIDUAL GUARANTEE LIMIT.—The aggregate
amount of loans guaranteed under this Act with respect
to a single qualified steel company may not exceed
$250,000,000.
(d) MINIMUM GUARANTEE AMOUNT.—No single loan
in an amount that is less than $25,000,000 may be guar-
anteed under this Act, except that the Board may, in ex-
ceptional circumstances, guarantee smaller loans.
(e) TIMELINES.—The Board shall approve or deny
each application for a guarantee under this Act as soon
as possible after receipt of such application.
(f) ADDITIONAL COSTS.—For the additional cost of
the loans guaranteed under this section, 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 authorized to be appropriated $140,000,000, to
remain available until expended.
(g) REQUIREMENTS
FOR LOAN GUARANTEES.—A
loan guarantee may be issued under this Act upon applica-
tion 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 suffi-
cient to meet its financing needs, as reflected in the
financial and business plans of that company;
(2) the prospective earning power of that com-
pany, together with the character and value of the
security pledged, furnish reasonable assurance of re-
payment 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 out-
standing obligations of the United States with re-
maining periods of maturity comparable to the ma-
turity of such loan; and
(4) the company has agreed to an audit by the
General Accounting Office, prior to the issuance of
the loan guarantee and annually while any such
guaranteed loan is outstanding.
(h) TERMS
AND CONDITIONS
OF LOAN GUARAN-
TEES.—
(1) LOAN
DURATION.—All loans guaranteed
under this Act 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, with-
out the consent of the Board.
(2) LOAN
SECURITY.—Any commitment to
issue a loan guarantee under this Act 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 Act at the time
at which the commitment is made.
(3) FEES.—A qualified steel company receiving
a guarantee under this Act shall pay a fee in an
amount equal to 0.5 percent of the outstanding prin-
cipal balance of the guaranteed loan to the Depart-
ment of the Treasury.
(i) REPORTS TO CONGRESS.—The Secretary of Com-
merce shall submit to the Congress annually a full report
of the activities of the Board under this Act during fiscal
years 1999 and 2000, and annually thereafter, during
such period as any loan guaranteed under this Act is out-
standing.
SEC. 7. SALARIES AND ADMINISTRATIVE EXPENSES.
For necessary expenses to administer the Program,
there is authorized to be appropriated to the Department
of Commerce $5,000,000, to remain available until ex-
pended, which may be transferred to the Office of the As-
sistant Secretary for Trade Development of the Inter-
national Trade Administration.
SEC. 8. TERMINATION OF GUARANTEE AUTHORITY.
The authority of the Board to make commitments to
guarantee any loan under this Act shall terminate on De-
cember 31, 2001.
SEC. 9. REGULATORY ACTION.
The Board shall issue such final procedures, rules,
and regulations as may be necessary to carry out this Act
not later than 60 days after the date of enactment of this
Act.
SEC. 10. IRON ORE COMPANIES.
(a) IN GENERAL.—Subject to the requirements of
this section, an iron ore company incorporated under the
law of any State shall be treated as a qualified steel com-
pany for purposes of the Program.
(b) TOTAL GUARANTEE LIMIT FOR IRON ORE COM-
PANIES.—Of the aggregate amount of loans authorized to
be guaranteed and outstanding at any one time under sec-
tion 6(b), not to exceed $30,000,000 of the amount of
loans guaranteed and outstanding at any one time shall
be loans with respect to iron ore companies.
(c) MINIMUM IRON ORE COMPANY GUARANTEE
AMOUNT.—Notwithstanding section 6(d), a single loan to
an iron ore company in an amount of not less than
$6,000,000 may be guaranteed under this section.
SEC. 11. EMERGENCY DESIGNATION.
The entire amount made available to carry out this
Act—
(1) is designated by the Congress as an emer-
gency requirement pursuant to section 251(b)(2)(A)
of the Balanced Budget and Emergency Deficit Con-
trol Act of 1985 (2 U.S.C. 901(b)(2)(A)); and
(2) shall be available only to the extent that an
official budget request that includes designation of
the entire amount of the request as an emergency
requirement (as defined in the Balanced Budget and
Emergency Deficit Control Act of 1985) is trans-
mitted by the President to the Congress.
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