[106th Congress Public Law 51]
[From the U.S. Government Printing Office]
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[DOCID: f:publ051.106]
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EMERGENCY STEEL LOAN GUARANTEE AND EMERGENCY OIL AND GAS GUARANTEED LOAN
ACT OF 1999
[[Page 113 STAT. 252]]
Public Law 106-51
106th Congress
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. <<NOTE: Aug. 17, 1999 - [H.R. 1664]>>
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, <<NOTE: Emergency Steel
Loan Guarantee and Emergency Oil and Gas Guaranteed Loan Act of
1999.>> 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 <<NOTE: Emergency Steel Loan Guarantee Act of 1999. 15 USC
1841 note.>>
15 USC
1841 note.
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).
[[Page 113 STAT. 253]]
(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) <<NOTE: Establishment.>> 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
[[Page 113 STAT. 254]]
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.--
[[Page 113 STAT. 255]]
(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. <<NOTE: 15 USC 1841 note.>> (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) <<NOTE: Deadline. Reports.>> 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 <<NOTE: Emergency Oil and Gas Guaranteed Loan Program Act. 15
USC 1841 note.>> 2
15 USC
1841 note.
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;
[[Page 113 STAT. 256]]
(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 <<NOTE: Establishment.>> 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.
[[Page 113 STAT. 257]]
(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.
[[Page 113 STAT. 258]]
(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. <<NOTE: 15 USC 1841 note.>> (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) <<NOTE: Deadline. Reports.>> 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. <<NOTE: 15 USC 1841 note.>> 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''.
Approved August 17, 1999.
LEGISLATIVE HISTORY--H.R. 1664:
---------------------------------------------------------------------------
HOUSE REPORTS: No. 106-125 (Comm. on Appropriations).
CONGRESSIONAL RECORD, Vol. 145 (1999):
May 6, considered and passed House.
June 15, 17, 18, considered and passed Senate, amended.
Aug. 4, House concurred in Senate amendments.
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