22 U.S.C. § 2186 — Loan guarantees to Israel program
submitted 34 years ago by Pub. L. 87-195 to r/title-22-FOREIGN-RELATIONS-AND-INTERCOURSE · 1,864 words · no verdicts yet
The President may guarantee losses on qualifying loans to Israel during the stated period, up to the stated annual and total amounts. The section limits the geographic use of the guarantees, sets fees and loan terms, permits suspension, and provides reporting and economic-policy rules.
(a) Subject to this section, from October 1, 1992, through September 30, 1997, the President may issue guarantees against losses on loans to Israel made because Israel was resettling and absorbing immigrants from the former Soviet republics, Ethiopia, and other countries. If the full amount authorized under subsection (b) is not issued during that period, the authority to issue the balance is available in the fiscal year ending September 30, 1998.
(b) The President may issue guarantees for this section's purposes. Subject to subsection (d), the total principal may be up to $10 billion: up to $2 billion in fiscal year 1993 beginning October 1, 1992, and up to $2 billion in each fiscal year 1994 through 1997 beginning October 1. Unissued amounts authorized for a fiscal year may be issued in any later fiscal year ending by September 30, 1998.
(b)(4) By September 1 each year beginning in fiscal year 1993, the President must tell the appropriate congressional committees in writing how the President intends to use the authority in the fiscal year beginning October 1, including the proposed total principal, if any. The committees are Senate Appropriations and Foreign Relations and House Appropriations and Foreign Affairs.
(c) Guarantees may support activities only in geographic areas administered by Israel before June 5, 1967.
(d) The authorized but unissued amount must be reduced by the amount Israel spent, or is estimated to have spent, in the prior year on activities the President finds inconsistent with this section's objectives or the United States-Israel understandings about the program. By September 30 of each program fiscal year, the President must report the calculated deduction and the amount to be deducted from the next fiscal year's authorization.
(e)(1) Each year's fee is an annual origination fee equal to the estimated subsidy cost of that year's guarantees, as calculated by the Office of Management and Budget under the Federal Credit Reform Act of 1990, plus the Agency for International Development's administrative expenses. Israel must pay the fees to the United States. Israel may use funds made available under part 4 of subchapter II to pay them. No additional subsidy-cost appropriation is needed for fiscal year 1993 or the next four fiscal years.
(e)(2) The origination fee is payable pro rata as each guarantee for each loan or increment is issued.
(f) Except as subsections (l) and (m) provide, the President sets the guarantee terms and conditions. If they are breached, the President may suspend or end all or part of additional guarantees not yet issued. The President must submit the decision and its basis to the Speaker and the Senate President pro tempore.
(g) A suspension or termination ends if Congress enacts a joint resolution within 30 days authorizing the assistance. Senate consideration follows section 601(b) of the International Security Assistance and Arms Export Control Act of 1976. A House motion to proceed after committee reporting is highly privileged. If Congress does not enact such a resolution, guarantees may resume only when the President determines and reports that the reasons are resolved or resumption is otherwise in the national interest.
(h) Congress recognizes that absorbing the immigrants requires investment and economic restructuring, and that Israel is developing a multi-year strategy based on prudent macroeconomic policies and structural reforms. Congress also recognizes that the strategy is intended to reduce direct government involvement, promote private enterprise, and support stability and sustainable growth.
(i) Congress states that Israel and the United States should continue consultations on economic and financial measures Israel should take during the program, including budget policy, privatization, trade liberalization, financial and capital markets, labor markets, competition policy, and deregulation.
(j) During the program, in the context of those reforms, Israel's larger population and trade liberalization are expected to substantially increase purchases of United States investment goods and services for use in or concerning Israel.
(k) The President must report to Congress by December 31 of each fiscal year through December 31, 1999, on implementation.
(l) Section 2183 applies to these guarantees as it applies to guarantees under section 2182, except that sections 2183(a), (e)(1), (g), and (j) do not apply, and the Federal Credit Reform Act controls if inconsistent. The guarantees may be made without regard to sections 2181, 2182, and 2198(c). Despite section 2183(f), a loan interest rate may include a reasonable fee for program costs and borrower fees if the borrower does not finance those costs from principal. Issued guarantees are unconditional and fully and freely transferable.
(m)(1) Each guarantee covers 100 percent of the loan principal and interest.
(m)(2) Standard terms are 30 years: interest-only payments twice a year for the first 10 years, followed by level twice-yearly principal-and-interest payments for 20 years. One transaction may use different maturities, rates, and payment terms if its total scheduled debt service equals that of a same-size loan with the standard terms. The guarantor may not accelerate a guaranteed loan or pay under a guarantee except under the loan's original payment terms. For the maximum principal, a discount loan uses its original issue price excluding transaction costs; an interest-bearing loan uses its stated principal.
Subject to the terms and conditions of this section, during the period beginning October 1, 1992, and ending September 30, 1997, the President is authorized to issue guarantees against losses incurred in connection with loans to Israel made as a result of Israel’s extraordinary humanitarian effort to resettle and absorb immigrants into Israel from the republics of the former Soviet Union, Ethiopia and other countries. In the event that less than the full amount authorized to be issued under subsection (b) of this section is issued in such period, the authority to issue the balance of such guarantees shall be available in the fiscal year ending on September 30, 1998.
The President is authorized to issue guarantees in furtherance of the purposes of this section. Subject to subsection (d), the total principal amount of guarantees which may be issued by the President under this section shall be up to $10,000,000,000 which may be issued as follows:
in fiscal year 1993, up to $2,000,000,000 may be issued on October 1, 1992 or thereafter;
subject to subsection (d), in fiscal years 1994 through 1997, up to $2,000,000,000 in each fiscal year may be issued on October 1 or thereafter.
If less than the full amount of guarantees authorized to be made available in a fiscal year pursuant to paragraphs (1) and (2) of this subsection is issued to Israel during that fiscal year, the authority to issue the balance of such guarantees shall extend to any subsequent fiscal year ending on or before September 30, 1998.
Not later than September 1 of each year during the period in which the President is authorized to issue loan guarantees under subsection (a), beginning in fiscal year 1993, the President shall notify the appropriate congressional committees in writing of his intentions regarding the exercise of that authority for the fiscal year beginning on October 1 of that year, including a statement of the total principal amount of guarantees, if any, that the President proposes to issue for that fiscal year.
For purposes of this paragraph, the term “appropriate congressional committees” means the Committee on Appropriations and the Committee on Foreign Relations of the Senate and the Committee on Appropriations and the Committee on Foreign Affairs of the House of Representatives.
Guarantees may be issued under this section only to support activities in the geographic areas which were subject to the administration of the Government of Israel before June 5, 1967.
The amount of authorized but unissued guarantees that the President is authorized to issue as specified in subsection (b) shall be reduced by an amount equal to the amount extended or estimated to have been extended by the Government of Israel during the previous year for activities which the President determines are inconsistent with the objectives of this section or understandings reached between the United States Government and the Government of Israel regarding the implementation of the loan program. The President shall submit a report to Congress no later than September 30 of each fiscal year during the pendency of the program specifying the amount calculated under this subsection and that will be deducted from the amount of guarantees authorized to be issued in the next fiscal year.
Fees charged for the loan guarantee program under this section each year shall be an aggregate annual origination fee equal to the estimated subsidy cost of the guarantees issued under this section for that year, calculated by the Office of Management and Budget for the Federal Credit Reform Act of 1990 [2 U.S.C. 661 et seq.]. This shall also include an amount for the administrative expenses of the Agency for International Development in administering the program under this section. All such fees shall be paid by the Government of Israel to the Government of the United States. Funds made available for Israel under part 4 of subchapter II of this chapter, may be utilized by the Government of Israel to pay such fees to the United States Government. No further appropriations of subsidy cost are needed for the loan guarantee authorized hereunder for fiscal year 1993 and the four succeeding fiscal years.
The origination fee shall be payable to the United States Government on a pro rata basis as each guarantee for each loan or increment is issued.
Except as provided in subsections (l) and (m) of this section, the President shall determine the terms and conditions for issuing guarantees. If the President determines that these terms and conditions have been breached, the President may suspend or terminate the provision of all or part of the additional loan guarantees not yet issued under this section. Upon making such a determination to suspend or terminate the provision of loan guarantees, the President shall submit to the Speaker of the House of Representatives and the President Pro Tempore of the Senate his determination to do so, including the basis for such suspension or termination.
Any suspension or termination pursuant to subsection (f) shall be in accordance with the following procedures:
Upon making a determination to suspend or terminate the provision of loan guarantees, the President shall submit to the Speaker of the House of Representatives and the President Pro Tempore of the Senate his determination to do so, including the basis for such suspension or termination.
Such a suspension or termination shall cease to be effective if Congress enacts, within 30 days of submission, a joint resolution authorizing the assistance notwithstanding the suspension.
Any such joint resolution shall be considered in the Senate in accordance with the provisions of section 601(b) of the International Security Assistance and Arms Export Control Act of 1976.
For the purpose of expediting the consideration and enactment of joint resolutions under this subsection, a motion to proceed to the consideration of any such joint resolution after it has been reported by the appropriate committee shall be treated as highly privileged in the House of Representatives.
In the event that the President suspends the provision of additional loan guarantees under subsection (f) and Congress does not enact a joint resolution pursuant to this subsection, the provision of additional loan guarantees under the program established by this section may be resumed only if the President determines and so reports to Congress that the reasons for the suspension have been resolved or that the resumption is otherwise in the national interest.
The effective absorption of immigrants into Israel from the republics of the former Soviet Union and Ethiopia within the private sector requires large investment and economic restructuring to promote market efficiency and thereby contribute to productive employment and sustainable growth. Congress recognizes that the Government of Israel is developing an economic strategy designed to achieve these goals, and that the Government of Israel intends to adopt a comprehensive, multi-year economic strategy based on prudent macroeconomic policies and structural reforms. Congress also recognizes that these policies are being designed to reduce direct involvement of the government in the economic system and to promote private enterprise, important prerequisites for economic stability and sustainable growth.
It is the sense of the Congress that, as agreed between the two Governments and in order to further the policies specified in subsection (h), Israel and the United States should continue to engage in consultations concerning economic and financial measures, including structural and other reforms, that Israel should undertake during the pendency of this program to enable its economy to absorb and resettle immigrants and to accommodate the increased debt burden that will result from loans guaranteed pursuant to this section. It is the sense of the Congress that these consultations on economic measures should address progress and plans in the areas of budget policies, privatization, trade liberalization, financial and capital markets, labor markets, competition policy, and deregulation.
During the pendency of the loan program authorized under this section, it is anticipated that, in the context of the economic reforms undertaken pursuant to subsections (h) and (i) of this section, Israel’s increased population due to its absorption of immigrants, and the liberalization by the Government of Israel of its trade policy with the United States, the amount of United States investment goods and services purchased for use in or with respect to the country of Israel will substantially increase.
The President shall report to Congress by December 31 of each fiscal year until December 31, 1999, regarding the implementation of this section.
Section 2183 of this title shall apply to guarantees issued under subsection (a) in the same manner as such section applies to guarantees issued under section 2182 of this title, except that subsections (a), (e)(1), (g), and (j) of section 2183 of this title shall not apply to such guarantees and except that, to the extent section 2183 of this title is inconsistent with the Federal Credit Reform Act of 1990 [2 U.S.C. 661 et seq.], that Act shall apply. Loans shall be guaranteed under this section without regard to sections 2181, 2182, and 2198(c) 1 of this title. Notwithstanding section 2183(f) of this title, the interest rate for loans guaranteed under this section may include a reasonable fee to cover the costs and fees incurred by the borrower in connection with this program or financing under this section in the event the borrower elects not to finance such costs or fees out of loan principal. Guarantees once issued hereunder shall be unconditional and fully and freely transferable.
Each loan guarantee issued under this section shall guarantee 100 percent of the principal and interest payable on such loans.
The standard terms of any loan or increment guaranteed under this section shall be 30 years with semiannual payments of interest only over the first 10 years, and with semiannual payments of principal and interest on a level payment basis, over the last 20 years thereof, except that the guaranteed loan or any increments issued in a single transaction may include obligations having different maturities, interest rates, and payment terms if the aggregate scheduled debt service for all obligations issued in a single transaction equals the debt service for a single loan or increment of like amount having the standard terms described in this sentence. The guarantor shall not have the right to accelerate any guaranteed loan or increment or to pay any amounts in respect of the guarantees issued other than in accordance with the original payment terms of the loan. For purposes of determining the maximum principal amount of any loan or increment to be guaranteed under this section, the principal amount of each such loan or increment shall be—
in the case of any loan issued on a discount basis, the original issue price (excluding any transaction costs) thereof; or
in the case of any loan issue 2 on an interest-bearing basis, the stated principal amount thereof.
Source credit: (Pub. L. 87–195, pt. I, § 226, as added Pub. L. 102–391, title VI, § 601, Oct. 6, 1992, 106 Stat. 1699.)
- 1992Enacted · Pub. L. 87-195 · 106 Stat. 1699
A history note hasn’t been published yet. The record shows enactment by Pub. L. 87-195 on 1992-10-06.
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