50 U.S.C. § 4531 — Presidential authorization for the national defense

(a)(1) To reduce current or expected shortages of industrial resources^*, critical technology^* items, or essential materials^* needed for national defense^*, and subject to Presidential regulations, the President may authorize a guaranteeing agency^* to guarantee private-institution loans financing a contractor, subcontractor, critical-infrastructure provider, or other person^*. The financing must support production or supplies the agency considers necessary to create, maintain, speed up, expand, protect, or restore production, deliveries, or services^* essential to national defense. (2) Unless Congress or the President has declared a national emergency, the President may make a guarantee only after finding that: (A) it supports an essential defense resource, technology item, or material; (B) without it, reasonable credit is unavailable; (C) it is the most cost-effective, speedy, and practical Federal option; (D) the applicant’s expected earnings and pledged security reasonably assure repayment; (E) the interest rate, set by the Treasury Secretary, is reasonable in light of the current average yield on comparable United States obligations; (F) the loan agreement cannot be changed or waived without the United States fiscal agent’s consent; and (G) the applicant provides or will provide (i) repayment assurance set by the President and (ii) acceptable security, such as a performance bond, insurance, or collateral, worth at least 20 percent of the loan. (3) Loans may be made or guaranteed only if an appropriations Act provides advance budget authority for guarantee costs as defined in section 661a of title 2 and limits total guaranteed principal. They may be made despite other law except section 1341 of title 31. (b)(1) A Federal agency or Federal Reserve bank designated by the President may act as the guaranteeing agency’s United States fiscal agent. (2) The guaranteeing agency must supply and disburse funds needed for that agent to carry out its guarantees. (3) The agent has no responsibility or accountability except as agent taking action under this section. (4) The guaranteeing agency must reimburse the agent for all expenses and losses, including attorney fees and litigation expenses. (c)(1) Fiscal-agent actions are supervised by the President and subject to Presidential regulations. (2) The President may set interest rates, guarantee and commitment fees, and other charges, specifically or by limits, and may regulate guarantee forms and procedures, uniform as far as practicable. (d)(1)(A) If a domestic industrial-base shortfall guarantee would make all guarantees for that shortfall exceed $50 million, it may be made only after written notice to the Senate Banking, Housing, and Urban Affairs Committee and House Financial Services Committee and waiting 30 days. (B) The notice-and-waiting rules may be waived during a declared national emergency or if the President, personally and nondelegably, finds a specific guarantee necessary to prevent a shortfall that would severely impair national defense. (2) This authority may not mainly prevent a person’s insolvency or bankruptcy unless (A) the President certifies it would directly and substantially harm national-defense production and (B) the certification and detailed justification reach both committees at least 10 days before using the authority for that purpose.