[Congressional Record Volume 154, Number 177 (Thursday, November 20, 2008)]
[Senate]
[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.
                                 ______