LOAN GUARANTEES UNDER DEFENSE DUAL-USE ASSISTANCE EXTENSION PROGRAM.

SEC. 1114. LOAN GUARANTEES UNDER DEFENSE DUAL-USE ASSISTANCE EXTENSION PROGRAM. (a) Memorandum of Understanding to Administer Loan Guarantee Program.— (1) For fiscal year 1995, the Secretary of Defense may enter into a memorandum of understanding with the Administrator of the Small Business Administration, the Administrator of the Economic Development Administration of the Department of Commerce, or the head of any other Federal agency having expertise regarding the provision of loan guarantees, under which such agency may— (A) process applications for loan guarantees under section 2524(b)(3) of title 10, United States Code, during that fiscal year; (B) guarantee repayment of the resulting loans; and (C) provide any other services to the Secretary to administer the loan guarantee program under such section during that fiscal year. (2) From funds made available for the loan guarantee program under such section, the Secretary of Defense may transfer to the agency or agencies that are parties to the memorandum of understanding such sums as may be necessary for the agency or agencies to carry out activities under the loan guarantee program. 108 STAT. 2867 (3) The Secretary of Defense shall enter into the memorandum of understanding authorized by paragraph (1) within 60 days after the date of the enactment of this Act for the administration of the loan guarantee program under such section during fiscal year 1995. (4) The total amount allocated under section 1111(b)(11)(B) to cover the costs of loan guarantees during fiscal year 1995 under the loan guarantee program shall be divided between small business concerns and medium-sized business concerns (as defined in section 2524(g) of title 10, United States Code) as follows: (A) 60 percent for small business concerns. (B) 40 percent for medium-sized business concerns. (b) Special Requirements Regarding Loan Guarantees.— Subsection (e) of section 2524 of title 10, United States Code, is amended to read as follows: “(e) Special Requirements Regarding Loan Guarantees.— (1) The Secretary shall carry out the loan guarantee program authorized under subsection (b)(3) during any fiscal year for which funds are specifically made available to cover the costs of loan guarantees to be issued pursuant to such subsection. “(2) In addition to the selection criteria specified in subsection (f), the selection criteria in the case of the loan guarantee program under subsection (b)(3) shall also include the following: “(A) The extent to which the loans to be guaranteed would support the retention of defense workers whose employment would otherwise be permanently or temporarily terminated as a result of reductions in expenditures by the United States for defense, the termination or cancellation of a defense contract, the failure to proceed with an approved major weapon system, the merger or consolidation of the operations of a defense contractor, or the closure or realignment of a military installation. “(B) The extent to which the loans to be guaranteed would stimulate job creation and new economic activities in communities most adversely affected by reductions in expenditures by the United States for defense, the termination or cancellation of a defense contract, the failure to proceed with an approved major weapon system, the merger or consolidation of the operations of a defense contractor, or the closure or realignment of a military installation. “(C) The extent to which the loans to be guaranteed would be used to acquire (or permit the use of other funds to acquire) capital equipment to modernize or expand the facilities of the borrower to enable the borrower to remain in the national technology and industrial base available to the Department of Defense. “(3) To be eligible for a loan guarantee under subsection (b)(3), a borrower must be able to demonstrate to the satisfaction of the Secretary that at least 25 percent of the value of the borrower’s sales dining the preceding fiscal year were derived from— “(A) contracts with the Department of Defense or the defense-related activities of the Department of Energy; or “(B) subcontracts in support of defense-related prime contracts. “(4) The maximum amount of loan principal that the Secretary may guarantee under the loan guarantee program during a fiscal year may not exceed— 108 STAT. 2868 “(A) $1,250,000, with respect to a small business concern; and “(B) $10,000,000 with respect to a medium-sized business concern.”. (c) Conforming Amendment.— Subsection (f) of such section is amended by striking out “Selection Criteria.—” and inserting in lieu thereof the following: “Selection Process and Criteria.—Competitive procedures shall be used in the selection of programs to receive assistance under this section.”.