[Pages S10748-S10750]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

By Mr. LEVIN (for himself, Mr. Bond, Ms. Stabenow, Mr. Voinovich,
Mr. Brown, Mr. Specter, and Mr. Casey):
S. 3715. A bill to provide for emergency bridge loan assistance to
automobile manufacturers and component suppliers; to the Committee on
Appropriations.
Mr. President, I am pleased to introduce with my colleagues the Auto
Industry Emergency Bridge Loan Act.
This legislation is the product of a bipartisan effort to provide
bridge loans of up to $25 billion to the auto industry. Auto industries
around the world, including China and Europe, are requesting loans from
their governments because of the dramatic decline of the global economy
and the drastic reduction in car purchases and the availability of
credit.
Our proposition is not only bipartisan. It is a hybrid proposal
combining provisions from many sources.
We incorporate Leader Reid's provisions on strong taxpayer
protections, including stock warrants for the government, provisions
restricting executive compensation, including bonuses and golden
parachutes, and provisions requiring long term plans for financial
viability. Suppliers are also made eligible for the loans.
The language of Chairman Barney Frank, of the House Financial
Services Committee, was heavily utilized including retention of Section
136's environmental standards, such as 25 percent improvement in fuel
economy and Tier II emissions standards. His oversight board membership
approach is also included.
The White House opposed the use of any of the $700 billion, already-
appropriated stabilization fund, and the Majority Leader said yesterday
that there were not enough votes in the Senate to pass an amendment
using those funds. We cannot allow the issue of which source of already
appropriated funds will be used for the essential purpose of preventing
the economy from sliding into a depression, which is a real possibility
if one or more of the domestic auto companies goes under, given the
impact of the auto industry on millions of jobs, on suppliers that are
in most of our States and on all of our communities which have Big 3
auto dealers.
So we agreed that the only alternative which can prevent those
disastrous results is for the funding stream for the loans to come from
the so-called Section 136 appropriation that we provided earlier this
year in the consolidated Security, Disaster Assistance, and Continuing
Appropriations Act, 2009. However, the structure of Section 136 is
preserved in permanent law for the balance of its appropriation not
utilized for loans, and the environmental standards of section 136,
including strengthened fuel economy and emissions standards, are
preserved. Also, loan repayments will be used to replenish Section 136,
along with any proceeds from the sale of company stock owned by the
government.
Under our proposal, this emergency bridge loan program would be
administered by the Secretary of Commerce.
The time for Congress to act on this pressing issue is growing short.
People in communities across this country are anxiously watching to see
what we are going to do. They are sick with worry. Not acting on a
solution will provoke anger and frustration in hundreds of communities
which supply components or have auto dealers. This is a Main Street
issue--a direct jobs issue for millions of families.
I know there is frustration with the past actions of the U.S. auto
companies. Some blame them for the quality problems of the 1970s, or
for paying their executives and their workers too much, or for not
moving aggressively enough to produce advanced technology, fuel
efficient cars. But we can't throw millions of jobs, a vital segment of
our industrial base and our economy overboard just because of this
frustration.
President Bush, President-elect Obama, and the leadership and
probably a majority of the Congress all agree that we needed to provide
bridge loans to support the U.S. auto industry, and I am pleased that
the leadership of the Congress has said that we will address this issue
beginning December 8.
The stakes for our future economic security and well-being are
enormous. One way or another, we must provide the bridge loans for the
domestic auto industry--for the sake of millions of workers and their
future and to keep our economy from being pushed into a depression.
I want to thank the cosponsors of this legislation, Senator Bond,
Senator Stabenow, Senator Voinovich, Senator Brown, Senator Specter and
Senator Casey for their assistance in preparing this bipartisan
legislation, and I urge my colleagues to join us in supporting it.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:

[[Page S10749]]

S. 3715

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Auto Industry Emergency
Bridge Loan Act''.

SEC. 2. DEFINITIONS.

In this Act:
(1) Automobile manufacturer or component supplier.--The
term ``automobile manufacturer or component supplier'' means
an automobile manufacturer or component supplier or any
successor thereto.
(2) Golden parachute payment.--The term ``golden parachute
payment'' means any payment to a senior executive officer for
departure from a company for any reason.
(3) Financial viability.--The term ``financial viability''
means, using generally acceptable accounting principles, that
there is a reasonable prospect that the applicant will be
able to make payments of principal and interest on the loan
as and when such payments become due under the terms of the
loan documents, and that the applicant has a net present
value that is positive.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Commerce.
(5) Senior executive officer.--The term ``senior executive
officer'' means an individual who is 1 of the top 5 most
highly paid executives of a public company, whose
compensation is required to be disclosed pursuant to the
Securities Exchange Act of 1934, and any regulations issued
thereunder, and nonpublic company counterparts.

SEC. 3. AUTO INDUSTRY EMERGENCY BRIDGE LOAN PROGRAM.

On or before March 31, 2009, the Secretary shall make loans
from funds provided under this section to automobile
manufacturers or component suppliers that have--
(1) operations in the United States, the failure of which
would have a systemic adverse effect on the overall United
States economy or a significant loss of United States jobs,
as determined by the Secretary;
(2) operated a manufacturing facility for the purposes of
producing automobiles or automobile components in the United
States throughout the 20-year period ending on the date of
the enactment of this Act; and
(3) submitted a complete application for a loan under this
section pursuant to section 4(a), which has been determined
eligible under section 4(b).

SEC. 4. PLAN TO ENSURE FINANCIAL VIABILITY OF BORROWER.

(a) In General.--At the time of application for a loan
under this Act, an automobile manufacturer or component
supplier shall submit to the Secretary a detailed plan that
describes how the requested Government funds--
(1) would be utilized to ensure the financial viability of
the manufacturer or supplier; and
(2) would stimulate automobile production in the United
States; and
(3) would improve the capacity of the manufacturer or
supplier to pursue the timely and aggressive production of
energy-efficient advanced technology vehicles.
(b) Plan Contents.--A plan submitted under this section
shall detail cost control measures and performance goals and
milestones.

SEC. 5. APPLICATIONS, ELIGIBILITY AND DISBURSEMENTS.

(a) Applications.--On and after the date that is 3 days
after the date of the enactment of this Act, the Secretary
shall accept applications for loans under this Act.
(b) Determination of Eligibility.--Not later than 15 days
after the date on which the Secretary receives a complete
application for a loan under subsection (a), the Secretary
shall, after consultation with other Executive Branch
officials, determine whether--
(1) the applicant meets the requirements described in
sections 3 and 4;
(2) the disbursement of funds and the successful
implementation of the required plan would ensure the
financial viability of the applicant; and
(3) the applicant is therefore eligible to receive a loan
under this Act.
(c) Disbursement.--The Secretary shall begin disbursement
of the proceeds of a loan under this Act to an eligible
applicant not later than 7 days after the date on which the
Secretary receives a disbursal request from the applicant.
(d) Warrants and Debt Instruments.--The Secretary may not
make a loan under this Act unless the Secretary receives from
the automobile manufacturer or component supplier a warrant
or senior debt instrument from the manufacturer made in
accordance with the requirements for a warrant or senior debt
instrument by a financial institution under section 113(d) of
the Emergency Economic Stabilization Act of 2008 (division A
of Public Law 110-343).

SEC. 6. REPLENISHMENT OF ADVANCED TECHNOLOGY VEHICLE
MANUFACTURING INCENTIVE PROGRAM.

(a) Equity Sales.--
(1) Sales authorized.--The Secretary may sell, exercise, or
surrender any equity instrument received under this Act.
(2) Turnaround profits to restore advanced vehicles
manufacturing incentive program.--Proceeds received from a
sale, exercise, or surrender under paragraph (1) may be
credited to the appropriate Government financing account made
available to fulfill the advanced technology vehicle
manufacturing incentive purpose under section 136 of the
Energy Independence and Security Act of 2007 (Public Law 110-
140; 42 U.S.C. 17013) until the amount loaned under this Act
has been repaid.
(3) Reduction of public debt.--Proceeds received from a
sale, exercise, or surrender under paragraph (1) that takes
place after the amount loaned under this Act has been repaid
in accordance with paragraph (2) may be used to reduce the
public debt.
(b) Repaid Loan Funds.--
(1) In general.--Loan amounts repaid under this Act may be
credited to the appropriate Government financing account made
available to fulfill the advanced technology vehicle
manufacturing incentive purpose of section 136 of the Energy
Independence and Security Act of 2007 until the amount loaned
under this Act is repaid.
(2) Reduction of public debt.--Loan amounts repaid under
this Act after the amount loaned under this Act has been
repaid may be used to reduce the public debt.

SEC. 7. LIMITS ON EXECUTIVE COMPENSATION.

(a) Standards Required.--The Secretary shall require any
recipient of a loan under this Act to meet appropriate
standards for executive compensation and corporate
governance.
(b) Specific Requirements.--The standards established under
subsection (a) shall include the following:
(1) Limits on compensation that exclude incentives for
senior executive officers of a recipient of a loan under this
Act to take unnecessary and excessive risks that threaten the
value of such recipient during the period that the loan is
outstanding.
(2) A provision for the recovery by such recipient of any
bonus or incentive compensation paid to a senior executive
officer based on statements of earnings, gains, or other
criteria that are later found to be materially inaccurate.
(3) A prohibition on such recipient making any golden
parachute payment to a senior executive officer during the
period that the loan under this Act is outstanding.
(4) A prohibition on such recipient paying or accruing any
bonus or incentive compensation during the period that the
loan under this Act is outstanding to any executive whose
annual base compensation exceeds $250,000 (which amount shall
be adjusted by the Secretary for inflation).
(5) A prohibition on any compensation plan that could
encourage manipulation of the reported earnings of the
recipient to enhance compensation of any of its employees.

SEC. 8. PROHIBITION ON THE USE OF LOAN PROCEEDS FOR LOBBYING
ACTIVITIES.

(a) In General.--A recipient of a loan under this Act may
not use such funds for any lobbying expenditures or political
contributions.
(b) Definitions.--In this section:
(1) Lobbying expenditures.--The term ``lobbying
expenditures'' has the meaning given the term in section
4911(c)(1) of the Internal Revenue Code of 1986.
(2) Political contributions.--The term ``political
contribution'' means any contribution on behalf of a
political candidate or to a separate segregated fund
described in section 316(b)(2)(C) of the Federal Election
Campaign Act of 1971 (2 U.S.C. 441b(b)(2)(C)).

SEC. 9. PROHIBITION ON PAYMENT OF DIVIDENDS.

No common stock dividends may be paid by any recipient of a
loan under this Act for the duration of the loan.

SEC. 10. AUTO INDUSTRY EMERGENCY BRIDGE LOAN OVERSIGHT BOARD.

(a) Establishment.--There is established the Auto Industry
Emergency Bridge Loan Oversight Board (in this section
referred to as the ``Board''), which shall be responsible for
reviewing and providing advice concerning the exercise of
authority under this Act, including--
(1) the progress of the applicant in meeting the
performance goals and milestones under its financial
viability plan required under section 4;
(2) recommending changes, as necessary and appropriate, to
the Secretary in meeting the goals and milestones under the
financial viability plan, and senior management and board of
directors to the automobile manufacturers and component
suppliers assisted under this Act; and
(3) reporting any suspected fraud, misrepresentation, or
malfeasance to the Inspector General of the Department of
Commerce or the Attorney General of the United States,
consistent with section 535(b) of title 28, United States
Code.
(b) Membership.--The Board shall be comprised of--
(1) the Secretary of Commerce;
(2) the Secretary of Energy;
(3) the Secretary of Transportation;
(4) the Secretary of the Treasury;
(5) the Secretary of Labor; and
(6) the Administrator of the Environmental Protection
Agency.
(c) Chairperson.--The chairperson of the Board shall be the
Secretary of Commerce.
(d) Meetings.--The Board shall meet--
(1) not later than 14 days after the first disbursement of
funds provided under this Act; and
(2) not less frequently than monthly thereafter.
(e) Reports.--The Board shall report to the appropriate
committees of Congress, not less frequently than quarterly,
on the matters described under this section.
(f) Oversight of Transactions and Financial Condition.--
(1) Duty to inform.--During the period in which any loan
extended under this Act remains outstanding, the recipient of
such

[[Page S10750]]

loan shall promptly inform the Secretary and the Board of--
(A) any asset sale, investment, or commitment for any asset
sale or investment proposed to be entered into by such
recipient that has a value in excess of $25,000,000; and
(B) any other material change in the financial condition of
such recipient.
(2) Authority of the secretary.--During the period in which
any loan extended under this Act remains outstanding, the
Secretary, in consultation with the Board, may--
(A) promptly review any asset sale or investment described
in paragraph (1) or any commitment for such asset sale or
investment; and
(B) direct the recipient of the loan that it should not
consummate such proposed sale or investment or commitment for
such sale or investment.
(3) Regulations.--The Board may establish, by regulation,
procedures for conducting any review under this subsection.
(g) Termination.--The Board, and its authority under this
section, shall terminate not later than 6 months after the
date on which the last loan amounts under this section are
repaid.

SEC. 11. PRIORITIZATION OF LOAN ALLOCATIONS.

In allocating loan amounts under this Act, the Secretary
shall consider the magnitude of the impact of the
manufacturing operations of the applicant in the United
States on the overall economy of the United States and other
segments of the automobile industry, including the impact on
levels of employment, domestic manufacturing of automobiles
and automobile components, and automobile dealerships.

SEC. 12. RATE OF INTEREST.

The annual rate of interest for a loan under this Act shall
be--
(a) 5 percent during the 5-year period beginning on the
date on which the Secretary disburses the loan; and
(b) 9 percent after the end of the period described in
paragraph (1).

SEC. 13. NO PREPAYMENT PENALTY.

A loan made under this Act shall be prepayable without
penalty at any time.

SEC. 14. DISCHARGE.

A discharge under title 11, United States Code, shall not
discharge the borrower from any debt for funds authorized to
be disbursed under this Act.

SEC. 15. FEES.

(a) In General.--The Secretary may charge and collect fees
for disbursements under this Act in amounts that the
Secretary determines are sufficient to cover applicable
administrative expenses.
(b) Availability.--Fees collected under this section--
(1) shall be deposited by the Secretary into the Treasury
of the United States;
(2) shall be used by the Secretary to pay administrative
expenses of making awards and loans under this Act; and
(3) shall remain available until expended, without further
appropriation.

SEC. 16. JUDICIAL REVIEW AND RELATED MATTERS.

(a) Standards.--Actions by the Secretary pursuant to the
authority of this Act shall be subject to chapter 7 of title
5, United States Code, including that such final actions
shall be held unlawful and set aside if found to be
arbitrary, capricious, an abuse of discretion, or not in
accordance with law.
(b) Limitations on Equitable Relief.--
(1) Injunction.--No injunction or other form of equitable
relief shall be issued against the Secretary for actions
pursuant to this Act, other than to remedy a violation of the
Constitution.
(2) Temporary restraining order.--Any request for a
temporary restraining order against the Secretary for actions
pursuant to this Act shall be considered and granted or
denied by the court within 3 days of the date of the request.
(3) Preliminary injunction.--Any request for a preliminary
injunction against the Secretary for actions pursuant to this
Act shall be considered and granted or denied by the court on
an expedited basis consistent with the provisions of rule
65(b)(3) of the Federal Rules of Civil Procedure, or any
successor to such rule.
(4) Permanent injunction.--Any request for a permanent
injunction against the Secretary for actions pursuant to this
Act shall be considered and granted or denied by the court on
an expedited basis. Whenever possible, the court shall
consolidate trial on the merits with any hearing on a request
for a preliminary injunction, consistent with the provisions
of rule 65(a)(2) of the Federal Rules of Civil Procedure, or
any successor to such rule.
(5) Limitation on actions by participating companies.--No
action or claims may be brought against the Secretary by any
person that divests its assets with respect to its
participation in a program under this Act, except as provided
in paragraph (1), other than as expressly provided in a
written contract with the Secretary.
(6) Stays.--Any injunction or other form of equitable
relief issued against the Secretary for actions pursuant to
this Act shall be automatically stayed. The stay shall be
lifted, unless the Secretary seeks a stay from a higher court
within 3 calendar days after the date on which the relief is
issued.
(c) Savings Clause.--Any exercise of the authority of the
Secretary pursuant to this section shall not impair the
claims or defenses that would otherwise apply with respect to
persons other than the Secretary.

SEC. 17. FUNDING.

(a) In General.--The $7,500,000,000 appropriated for fiscal
year 2009 for direct loans under section 129 of the
Consolidated Security, Disaster Assistance, and Continuing
Appropriations Act, 2009 (division A of Public Law 110-329)
is rescinded.
(b) Appropriations.--There is appropriated to the Secretary
of Commerce $7,500,000,000 to the ``Department of Commerce -
Emergency Bridge Loan Program Account'' for the cost of
direct loans authorized under this Act, which shall remain
available until expended. Commitments for direct loans using
such amount shall not exceed $25,000,000,000 in total loan
principal. The cost of such direct loans, including the cost
of modifying such loans, shall be calculated in accordance
with section 502 of the Congressional Budget Act of 1974 (2
U.S.C. 661a).
(c) Transfers for Direct Loans.--Following the receipt of a
notice from the Secretary of Energy certifying the approval
of a loan under the program authorized under section 136 of
the Energy Independence and Security Act of 2007 (Public Law
110-140; 42 U.S.C. 17013), the Secretary may transfer amounts
made available under this Act to the Secretary of Energy, in
an amount sufficient for the cost of the direct loans if such
transfer would not cause the Secretary to exceed the total
appropriation and total commitment level authorized under
subsection (b). Any amounts so transferred shall be available
to the Secretary of Energy without fiscal year limitation and
subject to the terms and conditions described in section 129
of the Consolidated Security, Disaster Assistance, and
Continuing Appropriations Act, 2009.
(d) Use of Remaining Amounts.--Amounts appropriated under
subsection (b) which remain available after March 31, 2009,
shall be transferred to the Secretary of Energy and shall be
used to carry out section 136 of the Energy Independence and
Security Act of 2007, subject to the terms and conditions
described in section 129 of the Consolidated Security,
Disaster Assistance, and Continuing Appropriations Act, 2009.

SEC. 18. COORDINATION WITH OTHER LAWS REGARDING PROMOTION OF
ADVANCED TECHNOLOGY VEHICLE MANUFACTURING.

Nothing in the Act may be construed as altering, affecting,
or superseding the provisions of section 136 of the Energy
Independence and Security Act of 2007, relating to the
technology requirements for energy efficient vehicles.
______