II Calendar No. 121 110th CONGRESS 2d Session S. 3688 IN THE SENATE OF THE UNITED STATES November 17 (legislative day, September 17), 2008 Mr. Reid introduced the following bill; which was read the first time November 18, 2008 Read the second time and placed on the calendar under authority of the order of the Senate of November 17 (legislative day, September 17), 2008 A BILL To provide for additional emergency unemployment compensation, to amend the Emergency Economic Stabilization Act of 2008 to authorize loans to automobile manufacturers and component suppliers, and for other purposes.
<enum>I</enum><header>Unemployment Compensation</header> <section id="id09E1CAB9992E45519B8D46F36B48DEC5"><enum>101.</enum><header>Short title</header><text display-inline="no-display-inline">This title may be cited as the <quote><short-title>Unemployment Compensation Extension Act of 2008</short-title></quote>.</text> </section><section id="HE9FB38D51C4741998CB452F639683B3E" section-type="subsequent-section"><enum>102.</enum><header>Additional first-tier benefits</header><text display-inline="no-display-inline">Section 4002(b)(1) of the Supplemental Appropriations Act, 2008 (26 U.S.C. 3304 note) is amended—</text> <paragraph id="H86757CC3107446BFAD13C936F5878784"><enum>(1)</enum><text>in subparagraph (A), by striking <quote>50</quote> and inserting <quote>80</quote>; and</text> </paragraph><paragraph id="H3CD384288B2D4CB98F94A9A8EF46BF51"><enum>(2)</enum><text>in subparagraph (B), by striking <quote>13</quote> and inserting <quote>20</quote>.</text> </paragraph></section><section id="H21CCE5D2AA45434DB535025E2F32C369" section-type="subsequent-section"><enum>103.</enum><header>Second-tier benefits</header><text display-inline="no-display-inline">Section 4002 of the Supplemental Appropriations Act, 2008 (26 U.S.C. 3304 note) is amended by adding at the end the following:</text> <quoted-block display-inline="no-display-inline" id="H1BFB823DAC8C48EEA44B71D78BA6B853" style="OLC"> <subsection id="HBD7D7FF3998A4C11B146AF9E05FE5C7"><enum>(c)</enum><header>Special rule</header> <paragraph id="H443FD219E65C418F8E5C35FCB17C4454"><enum>(1)</enum><header>In general</header><text>If, at the time that the amount established in an individual’s account under subsection (b)(1) is exhausted or at any time thereafter, such individual’s State is in an extended benefit period (as determined under paragraph (2)), such account shall be augmented by an amount equal to the lesser of—</text> <subparagraph id="HB0C2152B92414E8E99E4432E978EDDD9"><enum>(A)</enum><text>50 percent of the total amount of regular compensation (including dependents’ allowances) payable to the individual during the individual’s benefit year under the State law, or</text> </subparagraph><subparagraph id="H1994B873B8894FC0B23B008D1E30F500"><enum>(B)</enum><text>13 times the individual’s average weekly benefit amount (as determined under subsection (b)(2)) for the benefit year.</text> </subparagraph></paragraph><paragraph id="H4491A6D822E74A1B965F9EE297B898C7"><enum>(2)</enum><header>Extended benefit period</header><text>For purposes of paragraph (1), a State shall be considered to be in an extended benefit period, as of any given time, if—</text> <subparagraph id="HD0443575D7504FA2BD75B3915BCAA583"><enum>(A)</enum><text>such a period is then in effect for such State under the Federal-State Extended Unemployment Compensation Act of 1970;</text> </subparagraph><subparagraph id="HA8AF18C6EF844DCFB344DEE4BB38C990"><enum>(B)</enum><text>such a period would then be in effect for such State under such Act if section 203(d) of such Act—</text> <clause id="H9FD333EA46F6421AB3DB8982F8C4BDA"><enum>(i)</enum><text>were applied by substituting <quote>4</quote> for <quote>5</quote> each place it appears; and</text> </clause><clause id="H19DD41D88FE24531A82CAD18153EC7D1"><enum>(ii)</enum><text>did not include the requirement under paragraph (1)(A) thereof; or</text> </clause></subparagraph><subparagraph id="HEB630DA999F7457FA057C59789B00E3"><enum>(C)</enum><text>such a period would then be in effect for such State under such Act if—</text> <clause id="H93C8A9DD9E90438681AC2F006BE78DEF"><enum>(i)</enum><text>section 203(f) of such Act were applied to such State (regardless of whether the State by law had provided for such application); and</text> </clause><clause id="HE661D4E3D48B436EB2D050EBB1352EAB"><enum>(ii)</enum><text>such section 203(f)—</text> <subclause id="H211B22D2C8824719BE01691410BC0918"><enum>(I)</enum><text>were applied by substituting <quote>6.0</quote> for <quote>6.5</quote> in paragraph (1)(A)(i) thereof; and</text> </subclause><subclause id="H57B3D4F94DC443CD96FD1652D048E00"><enum>(II)</enum><text>did not include the requirement under paragraph (1)(A)(ii) thereof.</text> </subclause></clause></subparagraph></paragraph><paragraph id="H0BE3CFBB87CE4F8D924FA42BB9BA5F07"><enum>(3)</enum><header>Limitation</header><text>The account of an individual may be augmented not more than once under this subsection.</text> </paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </section><section id="HC6F11CBE5718413DA31B4FD2F1C5EA35"><enum>104.</enum><header>Phaseout provisions</header><text display-inline="no-display-inline">Section 4007(b) of the Supplemental Appropriations Act, 2008 (26 U.S.C. 3304 note) is amended—</text> <paragraph id="HBF4E47CD37664EB1B18FA320D1CB9F4"><enum>(1)</enum><text>in paragraph (1), by striking <quote>paragraph (2),</quote> and inserting <quote>paragraphs (2) and (3),</quote>; and</text> </paragraph><paragraph id="H4E2B390F987444E300DFAA88AC7F26B1"><enum>(2)</enum><text>by striking paragraph (2) and inserting the following:</text> <quoted-block display-inline="no-display-inline" id="HA9D24986EE574252A523DD2B75A5B4FB" style="OLC"> <paragraph commented="no" id="H6CE049A6AD114BB39B1375A98E0E57B"><enum>(2)</enum><header>No augmentation after March 31, 2009</header><text display-inline="yes-display-inline">If the amount established in an individual’s account under subsection (b)(1) is exhausted after March 31, 2009, then section 4002(c) shall not apply and such account shall not be augmented under such section, regardless of whether such individual’s State is in an extended benefit period (as determined under paragraph (2) of such section).</text> </paragraph><paragraph id="H4288E928B8BE423688FA0011B5E400A2"><enum>(3)</enum><header>Termination</header><text display-inline="yes-display-inline">No compensation under this title shall be payable for any week beginning after August 27, 2009.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></section><section id="HD0481D850C9B400088ED5CEBC6447600"><enum>105.</enum><header>Temporary Federal matching for the first week of extended benefits for States with no waiting week</header><text display-inline="no-display-inline">With respect to weeks of unemployment beginning after the date of the enactment of this Act and ending on or before December 8, 2009, subparagraph (B) of section 204(a)(2) of the Federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note) shall not apply.</text> </section><section id="H6DABEEE019AC4F9FA36FB7F598588FC"><enum>106.</enum><header>Effective date</header> <subsection id="HBA43654B1CAD49D085D0CBCA57D24FF"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The amendments made by sections 102, 103, and 104 shall apply as if included in the enactment of the Supplemental Appropriations Act, 2008, subject to subsection (b).</text> </subsection><subsection id="H158C4F90DB654D75B8C400EABA6F241"><enum>(b)</enum><header>Additional benefits</header><text>In applying the amendments made by sections 102 and 103, any additional emergency unemployment compensation made payable by such amendments (which would not otherwise have been payable if such amendments had not been enacted) shall be payable only with respect to any week of unemployment beginning on or after the date of the enactment of this Act.</text> </subsection></section><enum>II</enum><header>Automobile Industry Emergency Assistance</header> <section id="id2257C756BAF84E39846D4A6929392AD2"><enum>201.</enum><header>Direct bridge loans to manufacturers and suppliers</header> <subsection id="idD4D9C735D8C44D648062186C90FA3125"><enum>(a)</enum><header>In general</header><text>The Emergency Economic Stabilization Act of 2008 (division A of Public Law 110–343) is amended by adding at the end the following:</text> <quoted-block display-inline="no-display-inline" id="id2C96297FBC514EBB9617F57CBB2693E4" style="OLC"> <title id="id55686D20870A44C4B70EB43EF918D8EB"><enum>IV</enum><header>Direct bridge loan provisions</header> <section id="idD90E2969E7E949E2A9D46608AD595672"><enum>401.</enum><header>Findings</header><text display-inline="no-display-inline">Congress finds that extraordinary and exigent circumstances have prevented the automobile industry from securing essential credit and liquidity from other sources and that the failure of the automobile industry to obtain such credit and liquidity will have a systemic adverse effect on the economy.</text> </section><section id="ID1adba7d6fd7c4e5a919f92b5fbcca140"><enum>402.</enum><header>Purposes</header><text display-inline="no-display-inline">The purposes of this title are—</text> <paragraph id="ID8a35aabcfa9348daad166c9f1c16a7b6"><enum>(1)</enum><text>to clarify that authority and facilities are available to be used immediately by the Secretary to restore liquidity and stability to the automobile industry in the United States;</text> </paragraph><paragraph id="ID78dd797bbbd241f0ab57b01a570a1f8d"><enum>(2)</enum><text>to ensure that such authority and such facilities are used in a manner that—</text> <subparagraph id="ID8b9953761ea34cf39d3fd0c7e3bf81cc"><enum>(A)</enum><text>stimulates manufacturing and sales of automobiles produced by automobile manufacturers in the United States;</text> </subparagraph><subparagraph id="id86DC6959297D4734B80EF9529032F7E6"><enum>(B)</enum><text>enhances the ability and the capacity of the domestic automobile industry to pursue the timely and aggressive production of energy-efficient advanced technology vehicles;</text> </subparagraph><subparagraph id="IDe6038ba9ab5841b6b3f4ac484d194d67"><enum>(C)</enum><text>preserves and promotes the jobs of 355,000 workers in the United States directly employed by the automobile industry and an additional 4,500,000 workers in the United States employed in related industries; and</text> </subparagraph><subparagraph id="IDe2268c390401447380cec2c0fcf276c4"><enum>(D)</enum><text>safeguards the ability of the domestic automobile industry to provide retirement and health care benefits for 1,000,000 retirees and their spouses and dependents; and</text> </subparagraph></paragraph><paragraph id="IDfa41e35eaeed4216b1fab2fcede1365b"><enum>(3)</enum><text>to reaffirm the purposes of section 2, which include providing the Secretary with broad authority to restore liquidity and stability to financial institutions, including automobile finance companies.</text> </paragraph></section><section id="ID540992001c0e40a880ce2e176f6fc932"><enum>403.</enum><header>Emergency direct loan program</header> <subsection id="id4F333419DCF44B2AAD4D8A32656EB6BB"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">The Secretary shall make loans in an aggregate amount equal to $25,000,000,000, to automobile manufacturers and component suppliers that have—</text> <paragraph id="idDC82CD5C59A84751B40F733B359E2934"><enum>(1)</enum><text>submitted an application for a loan under this title that includes a statement of need for Government funding under this title to prevent a systemic adverse effect on the United States economy;</text> </paragraph><paragraph id="idF9D265A7B0E648A680833F46AA800DD1"><enum>(2)</enum><text display-inline="yes-display-inline">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 enactment of this title; and</text> </paragraph><paragraph id="idC7D7F55419B141CB8E31E9836D636DE5"><enum>(3)</enum><text display-inline="yes-display-inline">operations in the United States the failure of which would have a systemic adverse effect on the overall United States economy, as determined by the Secretary.</text> </paragraph></subsection><subsection id="id34928B49CF424294B6D2775C640ED931"><enum>(b)</enum><header>Allocation</header><text display-inline="yes-display-inline">In allocating loan amounts under this title, the Secretary shall prioritize the distribution of loans under this section based on 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.</text> </subsection><subsection id="ID9d6fadb6197a4dd29d974e3f880bb82b"><enum>(c)</enum><header>Plan for long-term financial viability</header><text>At the time of application for a loan under this title, an automobile manufacturer or component supplier shall submit to the Secretary a detailed plan on how the Government funds requested will be utilized to ensure the long-term financial posture of the company, and how such funds will stimulate automobile production in the United States and improve the capacity of the company to pursue the timely and aggressive production of energy-efficient advanced technology vehicles.</text> </subsection></section><section id="IDc9b8e438a9c34f169a6c6b9223032163"><enum>404.</enum><header>Funding from third tranche; treatment of loan amounts</header><text display-inline="no-display-inline">The costs incurred by the Federal Government in making loans under this title, including credit subsidy costs and administrative expenses, shall be covered out of the funds made available to the Secretary generally under section 118 and, specifically, not from funds which are described in paragraph (1) or (2) of section 115(a), but with respect to the availability of which the reporting and procedural requirements contained in paragraph (3) of such section and section 115(c) shall not apply.</text> </section><section id="IDe193bdc407c34efd9615e52e808045ac"><enum>405.</enum><header>Timing of disbursements</header> <subsection id="ID007588676c22453a9ee050cad560ee57"><enum>(a)</enum><header>Applications</header><text>On and after the date that is 3 days after the date of enactment of this title, the Secretary shall accept applications for loans under this title.</text> </subsection><subsection id="id2D9069066FB64F99A3CCB4DC12305D24"><enum>(b)</enum><header>Determination of eligibility</header><text>Not later than 15 days after the date on which the Secretary receives an application for a loan under subsection (a), the Secretary shall make a determination regarding the eligibility of the applicant, based on whether the applicant meets the requirements of section 403(a).</text> </subsection><subsection id="IDf2000b9c1ac24d0893ed53f875ad945c"><enum>(c)</enum><header>Disbursement</header><text>The Secretary shall begin disbursement of the proceeds of a loan under this title to an eligible applicant not later than 7 days after the date on which the Secretary receives a disbursal request from the applicant, upon a determination of the Secretary that the applicant is eligible under subsection (b).</text> </subsection></section><section id="ID574294f091e6481ab821e1313dbb9be8"><enum>406.</enum><header>Terms and conditions</header> <subsection id="id9157FDA5FC124C6FA501CD8600584690"><enum>(a)</enum><header>Term to maturity</header><text>The term to maturity of any loan made under this title shall be 10 years, or such longer period as the Secretary may determine with respect to such loan.</text> </subsection><subsection id="idAB1C47082DF243289FC36B8E8FB91C5E"><enum>(b)</enum><header>Rate of interest</header><text display-inline="yes-display-inline">The annual rate of interest for a loan under this title shall be—</text> <paragraph id="id22E6A9DF99934765AA5A0563CA139655"><enum>(1)</enum><text>5 percent during the 5-year period beginning on the date on which the Secretary disburses the loan; and</text> </paragraph><paragraph id="id7ED3DA9EB0744FCD9DD61F8CB6DEF361"><enum>(2)</enum><text>9 percent after the end of the period described in paragraph (1).</text> </paragraph></subsection><subsection id="ID9c1cad065e5c4ccc906a35eecdff40f2"><enum>(c)</enum><header>Warrants and debt instruments</header><text>The Secretary may not make a loan under this title unless the Secretary receives from the automobile manufacturer or component supplier a warrant or senior debt instrument made in accordance with the requirements for a warrant or senior debt instrument by a financial institution under section 113(d).</text> </subsection><subsection id="ID36c44b3885a7419b88f245d74a9efb50"><enum>(d)</enum><header>No prepayment penalty</header><text>A loan made under this title shall be prepayable without penalty at any time.</text> </subsection><subsection id="ID6285c6c5093f4258b3ef9530dcc37189"><enum>(e)</enum><header>Executive compensation</header> <paragraph id="id2B024A2D133C45F89B6160C793DB892B"><enum>(1)</enum><header>Standards required</header><text>The Secretary shall require any recipient of a loan under this title to meet appropriate standards for executive compensation and corporate governance.</text> </paragraph><paragraph id="id1598EA893944423DBA79EFC92C812519"><enum>(2)</enum><header>Specific requirements</header><text>The standards established under paragraph (1) shall include the following:</text> <subparagraph id="IDe1cafa1aac1c432d8242a0cc4bb7b1b8"><enum>(A)</enum><text>Limits on compensation that exclude incentives for senior executive officers of a recipient of a loan under this title to take unnecessary and excessive risks that threaten the value of such recipient during the period that the loan is outstanding.</text> </subparagraph><subparagraph id="idC817B02BDD7C4A49931290D0B97D0922"><enum>(B)</enum><text>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.</text> </subparagraph><subparagraph id="IDeb0004ef4e2745c082b6c2317c4242ee"><enum>(C)</enum><text>A prohibition on such recipient making any golden parachute payment to a senior executive officer during the period that the loan under this title is outstanding.</text> </subparagraph><subparagraph id="ID29b939f354a74f03ab2e28c6ea50dd30"><enum>(D)</enum><text>A prohibition on such recipient paying or accruing any bonus or incentive compensation during the period that the loan is outstanding to any executive whose annual base compensation exceeds $250,000 (which amount shall be adjusted by the Secretary for inflation).</text> </subparagraph><subparagraph id="ID0afc7ee49710459ab5da3eda5c3f695f"><enum>(E)</enum><text>A prohibition on any compensation plan that could encourage manipulation of the reported earnings of the recipient to enhance the compensation of any of its employees.</text> </subparagraph></paragraph><paragraph id="ID1ea7e467fef642a8a1ad9ba1d947ad45"><enum>(3)</enum><header>Definitions</header><text>For purposes of this subsection, the following definitions shall apply:</text> <subparagraph id="IDe1fe21b2741f4fff85ea9aabf712a7cd"><enum>(A)</enum><header>Senior executive officer</header><text>The term <quote>senior executive officer</quote> 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 non-public company counterparts.</text> </subparagraph><subparagraph id="IDde77c21e073c480db4bffa6a860dacca"><enum>(B)</enum><header>Golden parachute payment</header><text>The term <quote>golden parachute payment</quote> means any payment to a senior executive officer for departure from a company for any reason.</text> </subparagraph></paragraph></subsection><subsection id="ID38fb1dbbffaf4b0d9676da1a0ec404ae"><enum>(f)</enum><header>Prohibition on payment of dividends</header><text>No common stock dividends may be paid by any recipient of a loan under this title for the duration of the loan.</text> </subsection></section><section id="id4148E105EF224E0A8A9FF739DB070EB0"><enum>407.</enum><header>Oversight</header> <subsection id="id18A2DA87C3324CE09D895EC41D72D567"><enum>(a)</enum><header>In general</header><text>The provisions of sections 105, 116, 121, and 125 shall apply with respect to any loans made under this title, to the extent possible, in the same manner and to the same extent as such sections apply to transactions made under the authority of title I.</text> </subsection></section>. (b)
Technical and conforming amendments
(1)
Table of contents
The table of contents in section 1(b) of the Emergency Economic Stabilization Act of 2008 (division A of Public Law 110–343) is amended— (A)by inserting after the item relating to section 3 the following new item: Sec. 4. References. ; and(B)by adding at the end the following: TITLE IV—Direct bridge loan provisions Sec. 401. Findings. Sec. 402. Purposes. Sec. 403. Emergency direct loan program. Sec. 404. Funding from third tranche; treatment of loan amounts. Sec. 405. Timing of disbursements. Sec. 406. Terms and conditions. Sec. 407. Oversight. ; and(2)
References
The Emergency Economic Stabilization Act of 2008 (division A of Public Law 110–343) is amended by inserting after section 3 the following new section:
4.
References
Any reference— (1)in this division to this Act or any subdivision thereof is a reference to this division A or any subdivision thereof; (2)in division (B) to this Act or any subdivision thereof is a reference to division B or any subdivision thereof; and (3)in division (C) to this Act or any subdivision thereof is a reference to division C or any subdivision thereof.
. <enum>III</enum><header>Emergency treatment</header> <section id="IDfeb3ea54a8594059a93e1900c6853aed"><enum>301.</enum><header>Emergency treatment</header><text display-inline="no-display-inline">All provisions of this Act and the amendments made by this Act are designated as an emergency requirement and necessary to meet emergency needs pursuant to section 204(a) of S. Con. Res 21 (110th Congress), the concurrent resolution on the budget for fiscal year 2008.</text> </section> November 18, 2008 Read the second time and placed on the calendar