15 USC 9042 - Emergency relief and taxpayer protections

U.S Code last checked for updates: Nov 22, 2024

§ 9042.

Emergency relief and taxpayer protections

(a)

In general

(b)

Loans, loan guarantees, and other investments

Loans, loan guarantees, and other investments made pursuant to subsection (a) shall be made available as follows:

(1)

Not more than $0 shall be available to make loans and loan guarantees for passenger air carriers, eligible businesses that are certified under part 145 of title 14, Code of Federal Regulations, and approved to perform inspection, repair, replace, or overhaul services, and ticket agents (as defined in section 40102 of title 49).

(2)

Not more than 0 1

 So in original. Probably should be preceded by a dollar sign.

shall be available to make loans and loan guarantees for cargo air carriers.

(3)

Not more than 0 ¹ shall be available to make loans and loan guarantees for businesses critical to maintaining national security.

(4)

Not more than the sum of $0 and any amounts available under paragraphs (1), (2), and (3) that are not used as provided under those paragraphs shall be available to make loans and loan guarantees to, and other investments in, programs or facilities established by the Board of Governors of the Federal Reserve System for the purpose of providing liquidity to the financial system that supports lending to eligible businesses, States, or municipalities by—

(A)

purchasing obligations or other interests directly from issuers of such obligations or other interests;

(B)

purchasing obligations or other interests in secondary markets or otherwise; or

(C)

making loans, including loans or other advances secured by collateral.

(c)

Terms and conditions

(1)

In general

(A)

Forms; terms and conditions

(B)

Procedures

(2)

Loans and loan guarantees

The Secretary may enter into agreements to make loans or loan guarantees to 1 or more eligible businesses under paragraphs (1), (2) and (3) of subsection (b) if the Secretary determines that, in the Secretary’s discretion—

(A)

the applicant is an eligible business for which credit is not reasonably available at the time of the transaction;

(B)

the intended obligation by the applicant is prudently incurred;

(C)

the loan or loan guarantee is sufficiently secured or is made at a rate that—

(i)

reflects the risk of the loan or loan guarantee; and

(ii)

is to the extent practicable, not less than an interest rate based on market conditions for comparable obligations prevalent prior to the outbreak of the coronavirus disease 2019 (COVID–19);

(D)

the duration of the loan or loan guarantee is as short as practicable and in any case not longer than 5 years;

(E)

the agreement provides that, until the date 12 months after the date the loan or loan guarantee is no longer outstanding, neither the eligible business nor any affiliate of the eligible business may purchase an equity security that is listed on a national securities exchange of the eligible business or any parent company of the eligible business, except to the extent required under a contractual obligation in effect as of March 27, 2020;

(F)

the agreement provides that, until the date 12 months after the date the loan or loan guarantee is no longer outstanding, the eligible business shall not pay dividends or make other capital distributions with respect to the common stock of the eligible business;

(G)

the agreement provides that, until September 30, 2020, the eligible business shall maintain its employment levels as of March 24, 2020, to the extent practicable, and in any case shall not reduce its employment levels by more than 10 percent from the levels on such date;

(H)

the agreement includes a certification by the eligible business that it is created or organized in the United States or under the laws of the United States and has significant operations in and a majority of its employees based in the United States; and

(I)

for purposes of a loan or loan guarantee under paragraphs (1), (2), and (3) of subsection (b), the eligible business must have incurred or is expected to incur covered losses such that the continued operations of the business are jeopardized, as determined by the Secretary.

(3)

Federal reserve programs or facilities

(A)

Terms and conditions

(i)

Definition

In this paragraph, the term “direct loan” means a loan under a bilateral loan agreement that is —

(I)

entered into directly with an eligible business as borrower; and

(II)

not part of a syndicated loan, a loan originated by a financial institution in the ordinary course of business, or a securities or capital markets transaction.

(ii)

Restrictions

The Secretary may make a loan, loan guarantee, or other investment under subsection (b)(4) as part of a program or facility that provides direct loans only if the applicable eligible businesses agree—

(I)

until the date 12 months after the date on which the direct loan is no longer outstanding, not to repurchase an equity security that is listed on a national securities exchange of the eligible business or any parent company of the eligible business while the direct loan is outstanding, except to the extent required under a contractual obligation that is in effect as of March 27, 2020;

(II)

until the date 12 months after the date on which the direct loan is no longer outstanding, not to pay dividends or make other capital distributions with respect to the common stock of the eligible business; and

(III)

to comply with the limitations on compensation set forth in section 9043 of this title.

(iii)

Waiver

(B)

Federal Reserve Act taxpayer protections and other requirements apply

(C)

United States businesses

(D)

Assistance for mid-sized businesses

(i)

In general

Without limiting the terms and conditions of the programs and facilities that the Secretary may otherwise provide financial assistance to under subsection (b)(4), the Secretary shall endeavor to seek the implementation of a program or facility described in subsection (b)(4) that provides financing to banks and other lenders that make direct loans to eligible businesses including, to the extent practicable, nonprofit organizations, with between 500 and 10,000 employees, with such direct loans being subject to an annualized interest rate that is not higher than 2 percent per annum. For the first 6 months after any such direct loan is made, or for such longer period as the Secretary may determine in his discretion, no principal or interest shall be due and payable. Any eligible borrower applying for a direct loan under this program shall make a good-faith certification that—

(I)

the uncertainty of economic conditions as of the date of the application makes necessary the loan request to support the ongoing operations of the recipient;

(II)

the funds it receives will be used to retain at least 90 percent of the recipient’s workforce, at full compensation and benefits, until September 30, 2020;

(III)

the recipient intends to restore not less than 90 percent of the workforce of the recipient that existed as of February 1, 2020, and to restore all compensation and benefits to the workers of the recipient no later than 4 months after the termination date of the public health emergency declared by the Secretary of Health and Human Services on January 31, 2020, under section 247d of title 42 in response to COVID–19;

(IV)

the recipient is an entity or business that is domiciled in the United States with significant operations and employees located in the United States;

(V)

the recipient is not a debtor in a bankruptcy proceeding;

(VI)

the recipient is created or organized in the United States or under the laws of the United States and has significant operations in and a majority of its employees based in the United States;

(VII)

the recipient will not pay dividends with respect to the common stock of the eligible business, or repurchase an equity security that is listed on a national securities exchange of the recipient or any parent company of the recipient while the direct loan is outstanding, except to the extent required under a contractual obligation that is in effect as of March 27, 2020;

(VIII)

the recipient will not outsource or offshore jobs for the term of the loan and 2 years after completing repayment of the loan;

(IX)

the recipient will not abrogate existing collective bargaining agreements for the term of the loan and 2 years after completing repayment of the loan; and

(X)

that the recipient will remain neutral in any union organizing effort for the term of the loan.

(ii)

Main street lending program

(E)

Government participants

(d)

Financial protection of government

(1)

Warrant or senior debt instrument

The Secretary may not issue a loan to, or a loan guarantee for, an eligible business under paragraph (1), (2), or (3) of subsection (b) unless—

(A)

(i)

the eligible business has issued securities that are traded on a national securities exchange; and

(ii)

the Secretary receives a warrant or equity interest in the eligible business; or

(B)

in the case of any eligible business other than an eligible business described in subparagraph (A), the Secretary receives, in the discretion of the Secretary—

(i)

a warrant or equity interest in the eligible business; or

(ii)

a senior debt instrument issued by the eligible business.

(2)

Terms and conditions

The terms and conditions of any warrant, equity interest, or senior debt instrument received under paragraph (1) shall be set by the Secretary and shall meet the following requirements:

(A)

Purposes

(B)

Authority to sell, exercise, or surrender

(C)

Sufficiency

(3)

Prohibition on loan forgiveness

(e)

Deposit of proceeds

Notwithstanding any other provision of law, amounts collected under subsection (b) shall be deposited in the following order of priority:

(1)

Into the financing accounts established under section 505 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661d) to implement this part, up to an amount equal to the sum of—

(A)

the amount transferred from the appropriation made under

(B)

the amount necessary to repay any amount lent from the Treasury to such financing accounts.

(2)

After the deposits specified in paragraph (1) of this subsection have been made, into the Federal Old-Age and Survivors Insurance Trust Fund established under section 401(a) of title 42.

(f)

Administrative provisions

Notwithstanding any other provision of law, the Secretary may use not greater than 61,000,000 ¹ of the funds made available under section 9061 of this title to pay costs and administrative expenses associated with the loans, loan guarantees, and other investments authorized under this section. The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this part, including, without limitation—

(1)

using direct hiring authority to hire employees to administer this part;

(2)

entering into contracts, including contracts for services authorized by this part;

(3)

establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase, hold, and sell assets and issue obligations; and

(4)

issuing such regulations and other guidance as may be necessary or appropriate to carry out the authorities or purposes of this part.

(g)

Financial agents

The Secretary is authorized to designate financial institutions, including but not limited to, depositories, brokers, dealers, and other institutions, as financial agents of the United States. Such institutions shall—

(1)

perform all reasonable duties the Secretary determines necessary to respond to the coronavirus; and

(2)

be paid for such duties using appropriations available to the Secretary to reimburse financial institutions in their capacity as financial agents of the United States.

(h)

Loans made by or guaranteed by the Department of the Treasury treated as indebtedness for tax purposes

(1)

In general

(2)

Regulations or guidance

(Pub. L. 116–136, div. A, title IV, § 4003, Mar. 27, 2020, 134 Stat. 470; Pub. L. 116–260, div. N, title X, §§ 1003(b)(1), 1004, Dec. 27, 2020, 134 Stat. 2146; Pub. L. 117–328, div. LL, § 102(d)(1)(A), Dec. 29, 2022, 136 Stat. 6103.)

cite as: 15 USC 9042