[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3715 Introduced in Senate (IS)]
110th CONGRESS
2d Session
S. 3715
To provide for emergency bridge loan assistance to automobile
manufacturers and component suppliers.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
November 20, 2008
Mr. Levin (for himself, Mr. Bond, Ms. Stabenow, Mr. Voinovich, Mr.
Brown, Mr. Specter, and Mr. Casey) introduced the following bill; which
was read twice and referred to the Committee on Appropriations
_______________________________________________________________________
A BILL
To provide for emergency bridge loan assistance to automobile
manufacturers and component suppliers.
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 one of the top five 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;
(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 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.
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