To create a program to guarantee loans made to manufacturing companies in order to promote increased domestic lending to the United States manufacturing industry.

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.

Summary: 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.