[Congressional Record Volume 145, Number 44 (Friday, March 19, 1999)]
[Senate]
[Page S2985]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            MORNING BUSINESS

  Mr. STEVENS. Mr. President, I ask unanimous consent there now be a 
period for morning business with Senators permitted to speak therein 
for not to exceed 10 minutes, and that this period expire at 11 a.m.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SHELBY. Mr. President, I was pleased to cosponsor the provision 
of the Senator from West Virginia for an Emergency Steel Loan Guarantee 
program when the Committee on Appropriations reported the bill to the 
Senate earlier this month. I felt then, as I do now, that many steel 
companies have suffered significant economic injury as a result of the 
illegal dumping of foreign steel. In my own State of Alabama, at least 
one steel mill I know of is now teetering on the brink of bankruptcy 
due to this illegal activity. I was, therefore, very pleased by the 
Senator from West Virginia's effort to address this problem and provide 
some short-term needed relief to our steel companies. I know Senator 
Sessions shares my support for this provision because of our concern 
with the plight of local steel mills in our State of Alabama.
  Mr. SESSIONS. Mr. President, I too am concerned with the dilemma 
facing our local steel mills in Alabama and I want to commend the 
Senator from West Virginia for his leadership, working, in a bipartisan 
manner with Senators from all the steel-producing and other adversely 
affected states, to address the substantial economic injury that the 
illegal dumping of imported steel has caused across the country through 
an Emergency Steel Loan Guarantee program, which is to be part of the 
Emergency Supplemental appropriations bill, for the fiscal year ending 
September 30, 1999. My understanding is that the intent of the 
Emergency Steel Loan Guarantee program is to afford all qualified steel 
companies with the opportunity to obtain a loan guarantee, whether or 
not the company is now or is placed in a situation where it must seek 
to reorganize under Chapter 11 of the United States bankruptcy laws 
before the end of this year? Is my understanding of the program 
correct?
  Mr. BYRD. The Senator is correct.
  Mr. SHELBY. As you know, several companies have already been forced 
into bankruptcy because of the ``critical circumstances'' that these 
unprecedented levels of imports have caused--Acme, Laclede, and Geneva 
Steel come to mind--and that several other companies are in a 
distressed financial condition, including companies in West Virginia 
and Alabama. Senator Sessions and I have met with the workers of steel 
companies on numerous occasions since this crisis started last fall. We 
have been told that because of this dire situation, companies are no 
longer able to borrow money in the private sector because of the 
disruptive and uncertain market. In which they must operate and that 
the immediate implementation of the Emergency Steel Loan Program is 
essential to the continued viability of these companies. It is my 
understanding that this programs is specifically designed to encourage 
the private sector to make such loans available and that the Board will 
expedite its review of loan guarantee applicants that are in immediate 
need of such financial assistance.
  Mr. BYRD. The Senator is correct. The Emergency Steel Loan program is 
designed to provide immediate access to necessary working capital and 
to allow companies to refinance long-term debt obligations on 
reasonable terms and conditions, which will improve their immediate 
cash flow positions so they can stay in business until this crisis 
passes. We do not want to have companies be deprived of on economic 
life-line when they are drowning and need a helping hand.
  Mr. SESSIONS. As you know, the Senate Judiciary Committee, of which I 
am a member, spent a great deal of time last year examining the 
bankruptcy law and how to improve it for both doctors and creditors, I 
am particularly concerned that companies that seek to reorganize under 
Title 11 of the U.S. Code, are not precluded from obtaining a loan 
guarantee under this program since by definition the debts of such 
companies exceed their assets. Let me be specific, if a company does 
not have traditional forms of available ``security,'' such as is 
defined in the 11 U.S.C. Sec. 101, would the Board consider an order of 
the federal bankruptcy judge finding that a guarantee is necessary to 
enable the company to operate its business or reorganize meets that 
requirement?
  Mr. BYRD. The Senator is correct that the bill was written so that 
``security,'' as defined in the bill, would cover such a situation, 
however if further clarification is required we will work to address 
that and similar issues so that such companies are not excluded from 
the assistance provided in this emergency loan program.
  Mr. SHELBY. Is it the Committee's intent that the Emergency Steel 
Loan Guarantee Program, established under S. 544, be made available to 
all qualified steel companies that satisfy the requisite security 
requirements in section (h)(2) at the time loan commitment is made as 
well as available at the time the loan becomes effective, regardless of 
whether or not a qualified steel company is now or could be required to 
reorganize under Chapter 11 of Title II of the U.S. Code?
  Mr. BYRD. The Senator is correct, and if necessary we will clarify 
that further.
  Mr. SESSIONS. The power of a United States bankruptcy court already 
provide that a court may issue any order that is necessary or 
appropriate to carry out its responsibilities of the bankruptcy law to 
protect the custody of the estate and its administration. Specifically, 
11 U.S.C. Section 364 requires a debtor to obtain the permission of the 
court as a prerequisite to incurring additional credit. If a United 
States bankruptcy court determines that a qualified steel company under 
its jurisdiction requires the immediate access to a guarantee in an 
amount less that $25 million, would that company be precluded from 
participating in the program because it has an immediate need of a 
lesser amount of guarantee than specified in section f(4)?
  Mr. BYRD. That was not the intent of the Committee and we would 
expect the Board to afford substantial deference to such a 
determination by a United States bankruptcy court and we will further 
clarify that if required.

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