10 U.S.C. § 4981: Establishment of loan…

Summary

The Secretary of Defense must set up a program that can guarantee loans so lenders won’t lose loan principal, interest, or both. The loans can pay for improving or refinancing protection of a company’s critical infrastructure. A qualified commercial firm is one that: (1) does a lot of its research, development, engineering, and manufacturing in the United States; (2) is mostly U.S.-owned or controlled or has a parent in a country that encourages R&D consortia and protects U.S. intellectual property; (3) supplies technology critical to the Department of Defense; (4) meets DoD cyberterrorism prevention rules; and (5) agrees to send the required report. The total amount of loan principal the program can guarantee in a fiscal year is capped at $10,000,000 for all borrowers. The Secretary must create goals and standards to judge how the guarantees are used. The Secretary can only guarantee loans up to the amounts Congress provides in advance in appropriations Acts.

Title 10, §4981

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(a)Establishment.—

In order to meet the national security objectives in section 4811(a) of this title, the Secretary of Defense shall establish a program under which the Secretary may issue guarantees assuring lenders against losses of principal or interest, or both principal and interest, for loans made to qualified commercial firms to fund, in whole or in part, any of the following activities:

(1)The improvement of the protection of the critical infrastructure of the commercial firms.

(2)The refinancing of improvements previously made to the protection of the critical infrastructure of the commercial firms.

(b)Qualified Commercial Firms.—

For purposes of this section, a qualified commercial firm is a company or other business entity (including a consortium of such companies or other business entities, as determined by the Secretary) that the Secretary determines—

(1)conducts a significant level of its research, development, engineering, and manufacturing activities in the United States;

(2)is a company or other business entity the majority ownership or control of which is by United States citizens or is a company or other business of a parent company that is incorporated in a country the government of which—

(A)encourages the participation of firms so owned or controlled in research and development consortia to which the government of that country provides funding directly or provides funding indirectly through international organizations or agreements; and

(B)affords adequate and effective protection for the intellectual property rights of companies incorporated in the United States;

(3)provides technology products or services critical to the operations of the Department of Defense;

(4)meets standards of prevention of cyberterrorism applicable to the Department of Defense; and

(5)agrees to submit the report required under section 4985 of this title.

(c)Loan Limits.—

The maximum amount of loan principal guaranteed during a fiscal year under this section may not exceed $10,000,000, with respect to all borrowers.

(d)Goals and Standards.—

The Secretary shall prescribe regulations setting forth goals for the use of the loan guarantees provided under this section and standards for evaluating whether those goals are met by each entity receiving such loan guarantees.

(e)Authority Subject to Provisions of Appropriations.—

The Secretary may guarantee a loan under this subchapter only to such extent or in such amounts as may be provided in advance in appropriations Acts.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2021—Pub. L. 116–283, § 1873(b), (c)(2), renumbered section 2541 of this title as this section. Subsec. (a). Pub. L. 117–81, which directed the substitution of “section 4811(a)” for “section 2501(a)”, could not be executed in introductory provisions because of the intervening amendment by Pub. L. 116–283, § 1883(b)(2). See note below. Pub. L. 116–283, § 1883(b)(2), substituted “section 4811(a)” for “section 2501(a)” in introductory provisions. Subsec. (b)(5). Pub. L. 116–283, § 1873(e)(1), substituted “section 4985” for “section 2541d”.

Statutory Notes and Related Subsidiaries

Effective Date

of 2021 AmendmentAmendment by Pub. L. 117–81 to take effect immediately after the

Amendments

made by title XVIII of Pub. L. 116–283 have taken effect, see section 1701(a)(3) of Pub. L. 117–81, set out in a note preceding section 3001 of this title and note below. Amendment by Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed implementation and applicability of existing law, see section 1801(d) of Pub. L. 116–283, set out as a note preceding section 3001 of this title.

§4981 Establishment of Loan Guarantee Program

Summary

Title 10, §4981

Notes & Related Subsidiaries

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Amendments

Citations & Metadata