DEFENSE LOAN AND TECHNICAL ASSISTANCE PROGRAM.

SEC. 507. DEFENSE LOAN AND TECHNICAL ASSISTANCE PROGRAM. (a) DELTA Program Authorized.— (1) In general.— The Administrator may administer the Defense Loan and Technical Assistance program in accordance with the authority and requirements of this section. (2) Expiration of authority.— The authority of the Administrator to carry out the DELTA program under paragraph (1) shall terminate when the funds referred to in subsection (g)(1) have been expended. (3) DELTA program defined.— In this section, the terms “Defense Loan and Technical Assistance program” and “DELTA program” mean the Defense Loan and Technical Assistance program that has been established by a memorandum of understanding entered into by the Administrator and the Secretary of Defense on June 26, 1995. (b) Assistance.— (1) Authority.— Under the DELTA program, the Administrator may assist small business concerns that are economically dependent on defense expenditures to acquire dual-use capabilities. (2) Forms of assistance.— Forms of assistance authorized under paragraph (1) are as follows: (A) Loan guarantees.— Loan guarantees under the terms and conditions specified under this section and other applicable law. (B) Nonfinancial assistance.— Other forms of assistance that are not financial. (c) Administration of Program.— In the administration of the DELTA program under this section, the Administrator shall— (1) process applications for DELTA program loan guarantees; (2) guarantee repayment of the resulting loans in accordance with this section; and (3) take such other actions as are necessary to administer the program. (d) Selection and Eligibility Requirements for DELTA Loan Guarantees.— (1) In general.— The selection criteria and eligibility requirements set forth in this subsection shall be applied in the selection of small business concerns to receive loan guarantees under the DELTA program. (2) Selection criteria.— The criteria used for the selection of a small business concern to receive a loan guarantee under this section are as follows: (A) The selection criteria established under the memorandum of understanding referred to in subsection (a)(3). (B) 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 111 STAT. 2626by 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 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. (D) 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) Eligibility requirements.— To be eligible for a loan guarantee under the DELTA program, a borrower must demonstrate to the satisfaction of the Administrator that, during any 1 of the 5 preceding operating years of the borrower, not less than 25 percent of the value of the borrower’s sales 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. (e) Maximum Amount of Loan Principal.— With respect to each borrower, the maximum amount of loan principal for which the Administrator may provide a guarantee under this section during a fiscal year may not exceed $1,250,000. (f) Loan Guaranty Rate.— The maximum allowable guarantee percentage for loans guaranteed under this section may not exceed 80 percent. (g) Funding.— (1) In general.— The funds that have been made available for loan guarantees under the DELTA program and have been transferred from the Department of Defense to the Small Business Administration before the date of the enactment of this Act shall be used for carrying out the DELTA program under this section. (2) Continued availability of existing funds.— The funds made available under the second proviso under the heading “Research, Development, Test and Evaluation, Defense-Wide” in Public Law 103–335 (108 Stat. 2613) shall be available until expended— (A) to cover the costs (as defined in section 502(5) of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5))) of loan guarantees issued under this section; and (B) to cover the reasonable costs of the administration of the loan guarantees.