SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Manufacturing Modernization and 
Diversification Act of 2010''.

SEC. 2. DEFINITIONS.

    For purposes of this Act:
            (1) Bank.--The term ``bank'' means--
                    (A) an insured depository institution, as such term 
                is defined under section 3(c)(2) of the Federal Deposit 
                Insurance Act (12 U.S.C. 1813(c)(2)); and
                    (B) an insured credit union, as such term is 
                defined under section 101(7) of the Federal Credit 
                Union Act (12 U.S.C. 1752(7)).
            (2) Collateral support program.--The term ``Collateral 
        Support Program'' means a program described under section 4.
            (3) Loan participation program.--The term ``Loan 
        Participation Program'' means a program described under section 
        5.
            (4) Qualified manufacturer.--The term ``qualified 
        manufacturer'' means a business that is engaged in 
        manufacturing and--
                    (A) has less than $50,000,000 in annual revenue; 
                and
                    (B) has less than $50,000,000 in assets.
            (5) Revolving loan fund.--The term ``revolving loan fund'' 
        means the revolving loan fund established under section 3(d).
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
            (7) SPV.--The term ``SPV'' means a special purpose vehicle 
        created by a State.
            (8) Termination date.--The term ``termination date'' means 
        the date that is the end of the 2-year period beginning on the 
        date the Secretary issues regulations pursuant to section 
        3(b)(4).

SEC. 3. FEDERAL LOAN PROGRAM TO SPVS.

    (a) In General.--The Secretary shall certify SPVs to take part in a 
program to carry out Collateral Support Programs and Loan Participation 
Programs for the benefit of qualified manufacturers (hereinafter in 
this section described as the ``loan program'').
    (b) Application Process.--
            (1) In general.--Each SPV wishing to participate in the 
        loan program shall submit an application to the Secretary, in 
        such form and manner as the Secretary may require, containing--
                    (A) a detailed proposal for the structure of the 
                Collateral Support Program the SPV proposes to carry 
                out, including what criteria the SPV intends to use to 
                determine which qualified manufacturers will be 
                eligible to participate;
                    (B) a detailed proposal for the structure of the 
                Loan Participation Program the SPV proposes to carry 
                out, including what criteria the SPV intends to use to 
                determine which qualified manufacturers will be 
                eligible to participate; and
                    (C) such other information as the Secretary may 
                require.
            (2) Additional requirements.--
                    (A) Interest rate.--Loans made to SPVs by the 
                Secretary under the loan program shall be made with an 
                interest rate of 0.5 percent.
                    (B) Treatment of payments from qualified 
                manufacturers.--The amount of all fees and interest 
                payments paid by qualified manufacturers to an SPV 
                under Collateral Support Programs and Loan 
                Participation Programs that is more than the amount 
                required by the SPV to repay the principal and interest 
                amounts on loans made to the SPV under the loan program 
                shall be retained by the SPV.
                    (C) No disqualification by reason of 
                participation.--Participation in a Collateral Support 
                Program or a Loan Participation Program by a qualified 
                manufacturer shall not disqualify such manufacturer 
                from receiving assistance related to such loan under 
                other Federal programs as well, including programs 
                carried out by the Small Business Administration and 
                the Department of Agriculture.
                    (D) Limitations on spvs.--Only 1 SPV per State may 
                be certified to participate in the loan program.
                    (E) Oversight.--The Secretary shall issue 
                regulations to require each SPV participating in the 
                loan program to make periodic reports to the Secretary 
                at any time such SPV has a loan outstanding under the 
                loan program. Such reports shall contain such 
                information as the Secretary determines appropriate to 
                maintain oversight of the funds used in the loan 
                program.
            (3) Determination factors.--In making the determination of 
        which SPVs should be certified to take part in the loan 
        program, the Secretary shall consider--
                    (A) all information submitted in the application of 
                an SPV under paragraph (1);
                    (B) the number of jobs that will likely be created 
                by programs proposed by the SPV;
                    (C) the amount of economic distress experienced by 
                the State in which the SPV is located, including the 
                unemployment rate of such State; and
                    (D) the likelihood that the SPV will be able to 
                successfully administer the programs proposed by the 
                SPV.
            (4) Rulemaking.--The Secretary shall issue all regulations 
        necessary for the submission of applications described under 
        paragraph (1) no later than 90 days after the date of the 
        enactment of this Act.
    (c) Loan-Making Process.--
            (1) In general.--Each time a certified SPV wishes to make a 
        loan under a Collateral Support Program or a Loan Participation 
        Program, the certified SPV shall make a request to the 
        Secretary, who shall loan the requested amount to the SPV from 
        the revolving loan fund, as long as sufficient amounts remain 
        in the fund.
            (2) Time period.--An SPV may not make any new loans under a 
        Collateral Support Program or a Loan Participation Program 
        after the termination date.
    (d) Revolving Loan Fund.--
            (1) In general.--There is established in the Treasury a 
        revolving loan fund for the loan program.
            (2) Initial transfer.--
                    (A) Funding from the tarp.--Of funds made available 
                to the Secretary under title I of the Emergency 
                Economic Stabilization Act of 2008 (12 U.S.C. 5211 et 
                seq.) that remain unobligated, the Secretary shall 
                transfer and credit $20,000,000,000 to the revolving 
                loan fund.
                    (B) Authorization.--The amounts transferred under 
                subparagraph (A) shall be deemed to be for actions 
                authorized under title I of the Emergency Economic 
                Stabilization Act of 2008.
            (3) Expenditures.--The Secretary shall use the amounts in 
        the revolving loan fund to carry out the loan program.
            (4) Deposits.--The Secretary shall deposit amounts received 
        as payment and interest on loans provided under the loan 
        program into the revolving loan fund.
    (e) Termination of Loan Program.--On and after the termination 
date--
            (1) no additional loans may be made by the Secretary under 
        the loan program;
            (2) all amounts in the revolving loan fund shall be paid 
        into the general fund of the Treasury; and
            (3) all amounts that would otherwise have been paid into 
        the revolving loan fund shall be paid into the general fund of 
        the Treasury.

SEC. 4. COLLATERAL SUPPORT PROGRAM.

    (a) In General.--With respect to an SPV, a program is described 
under this section if, under such program--
            (1) a qualified manufacturer that wishes to receive a loan 
        from a bank, but would not otherwise have sufficient collateral 
        to qualify for such a loan, may ask the bank to seek collateral 
        support for such loan from the SPV;
            (2) the bank submits an application to the SPV to 
        participate in the collateral support program, in such form and 
        manner and containing such information as the SPV may require;
            (3) the SPV, if approving such application, deposits cash 
        with the bank in an interest bearing account under the SPV's 
        name, and allows such cash to act as collateral support for the 
        qualified manufacturer's loan;
            (4) the interest paid on such cash deposit is paid to the 
        SPV; and
            (5) as the qualified manufacturer repays the loan over 
        time, the SPV draws down the amount deposited with the bank.
    (b) Additional Requirements.--A program described under subsection 
(a) shall additionally have the following requirements:
            (1) Deposit limits.--The cash deposit made by the SPV may 
        not represent more than 49.9 percent of the total loan amount 
        and may not be in an amount more than 49.9 percent of the non-
        equity capital of the qualified manufacturer at the time the 
        loan is made.
            (2) Loan amount.--The SPV may not provide more than 
        $20,000,000 to any one qualified manufacturer under the 
        collateral support program.
            (3) Fees.--The SPV shall require a fee or fees to be paid 
        by the qualified manufacturer to the SPV, at loan closing or 
        annually, which shall consist of no more than 3 percent of the 
        value of the cash deposit per fee. The SPV may determine 
        whether such fee should be paid in cash or in options to 
        purchase equity in the qualified manufacturer, but in no case 
        may such options allow for the purchase of equity in the 
        qualified manufacturer that would result in the SPV holding 
        more than 15 percent of the voting rights of the equity of such 
        qualified manufacturer.
            (4) Exit fee.--In the event that the qualified manufacturer 
        defaults on the loan made under the collateral support program, 
        the bank shall repay to the SPV an amount equal to 5 percent of 
        the initial deposit made by the SPV.
            (5) Oversight.--The SPV shall require--
                    (A) the bank to make periodic reports to the SPV 
                during the life of the loan; and
                    (B) such other reports from the bank and the 
                qualified manufacturer as the SPV determines 
                appropriate to maintain oversight.

SEC. 5. LOAN PARTICIPATION PROGRAM.

    (a) In General.--With respect to an SPV, a program is described 
under this section if, under such program--
            (1) a qualified manufacturer that wishes to receive a loan 
        from a bank, but would not otherwise qualify for such a loan, 
        may ask the bank to seek loan participation for such loan from 
        the SPV;
            (2) the bank submits an application to the SPV to 
        participate in the loan participation program, in such form and 
        manner and containing such information as the SPV may require;
            (3) the SPV, if approving such application, will agree to 
        purchase between 1 to 49.9 percent of such loan, upon the bank 
        making such loan;
            (4) the bank shall continue to service the entire loan; and
            (5) the SPV may, in coordination with the bank, permit the 
        qualified manufacturer to forbear payments of interest or defer 
        payments of principal on the amount of such loan purchased by 
        the SPV for a period of no longer than 3 years from the date 
        such loan is made.
    (b) Additional Requirements.--A program described under subsection 
(a) shall additionally have the following requirements:
            (1) Loan amount.--The SPV may not pay more than $20,000,000 
        for any portion of loans made to any one qualified manufacturer 
        under the loan participation program.
            (2) Fee.--
                    (A) One-time fee.--The SPV shall require a one-time 
                fee from the qualified manufacturer in exchange for the 
                SPV participating in the loan participation program.
                    (B) Annual fee.--The bank shall require the 
                qualified manufacturer to pay an annual fee to the bank 
                of a minimum of 0.5 percent, and a maximum of 2 
                percent, of the amount of the portion of the loan 
                purchased by the SPV under the loan participation 
                program.
            (3) Oversight.--The SPV shall require--
                    (A) the bank to make periodic reports to the SPV 
                during the life of the loan; and
                    (B) such other reports from the bank and the 
                qualified manufacturer as the SPV determines 
                appropriate to maintain oversight.

SEC. 6. REPORT.

    Not later than the end of the 6-month period beginning on the date 
of the enactment of this Act, and quarterly thereafter while any loan 
remains outstanding under the loan program carried out under section 3, 
the Secretary shall issue a report to the Congress containing--
            (1) a list of the active participants in Collateral Support 
        Programs and Loan Participation Programs; and
            (2) an estimate of the impact the loan program has had on--
                    (A) the overall economy; and
                    (B) the creation of new jobs or the preservation of 
                existing jobs.
Manufacturing Modernization and Diversification Act of 2010 - Directs the Secretary of the Treasury to certify special purpose vehicles (SPVs) created by a state to take part in a program to carry out collateral support and loan participation programs for the benefit of qualified manufacturers (manufacturers with less than $50 million in annual revenue and less than $50 million in assets). Outlines SPV application requirements.

Allows, under the collateral support program, a qualified manufacturer that wishes to receive a bank loan but has insufficient collateral to ask the bank to seek collateral loan support from the SPV. Prohibits an SPV from providing more than $20 million in collateral support to any one manufacturer. Requires manufacturers to be charged a fee for such support.

Allows, under the loan participation program, a qualified manufacturer that wishes to receive a bank loan but would not otherwise qualify for the loan to ask the bank to seek participation for such loan from the SPV. Prohibits an SPV from providing more than $20 million in participation support to any one manufacturer. Requires manufacturers to be charged a fee for such support.

Requires: (1) periodic reports from such banks to participating SPVs; and (2) quarterly reports from the Secretary to Congress on participants in and impacts of the support and participation programs.
{"src": "billsum_test", "title": "To create a loan program to provide funds to State special purpose vehicles for use in collateral support programs and loan participation programs to benefit qualified manufacturers."}