Chrysler Corporation Loan Guarantee Act of 1979
PL 96-185 (H.R.5860), enacted 01/07/1980

93 STAT. 1324 
PUBLIC LAW 96-185—JAN. 7, 1980 
Public Law 96-185 
96th Congress 
An Act 
— 
• ' 
— 
To authorize loan guarantees to the Chrysler Corporation. 
[H.R. 5860] 
Be it enacted by the Senate and House of Representatives of the 
Chrysler 
United States of America in Congress assembled. 
Corporation 
Loan Guarantee 
Act of 1979. 
SHORT TITLE 
15 use 1861 
SECTION 1. This Act may be cited as the "Chrysler Corporation 
note. 
Loan Guarantee Act of 1979". 
DEFINITIONS 
15 use 1861. 
SEC. 2. For purposes of this Act— 
(1) the term "Board" means the Chrysler Corporation Loan 
Guarantee Board established by section 3; 
(2) the term "borrower" means the Chrysler Corporation, any 
of its subsidiaries or affiliates, or any other entity the Board may 
designate from time to time which borrows funds for the benefit 
or use of the Corporation; 
(3) the term "Corporation" means the Chrysler Corporation 
and its subsidiaries and affiliates; 
(4) the term "financing plan" means a plan designed to meet 
the financing needs of the Corporation as reflected in the 
operating plan and indicating in accordance with the require-
ments of section 8 the amounts to be provided at dates specified 
(for each year of the plan) from internally generated sources 
(including earnings and cost reduction measures), from loans 
guaranteed under this Act, and from nonfederally guaranteed 
assistance as required pursuant to section 4(a)(4); 
(5) the term "fiscal year" means the fiscal year of the 
Corporation; 
(6) the term "going concern" means a corporation the net 
earnings of which, as projected in the plan required under 
section 4(a)(3), are determined to be sufficient to maintain long-
term profitability after taking into account probable fluctuations 
in the automobile market, and which meets such other tests of 
viability £is the Board shall prescribe; 
(7) the term "labor organization" has the same meaning as in 
29 use 152. 
section 2 of the Natonal Labor Relations Act; 
(8) the term "operating plan" means a document detailing 
production, distribution, and sales plans of the Corporation, 
together with the expenditures needed to carry out those plans 
(including budget and cash flow projections), on an annual basis, 
a productivity improvement plan setting forth steps to be taken 
by the Corporation and its workers to achieve a higher productiv-
ity growth rate, and an energy efficiency plan setting forth steps 
to be taken by the Corporation to reduce United States depen-
dence on petroleum, in accordance with section 4(aX3); 
PUBLIC LAW 96-185—JAN. 7, 1980 
93 STAT. 1325 
(9) the term "persons with an existing economic stake in the 
health of the Corporation" means banks, financial institutions, 
and other creditors, suppliers, dealers, stockholders, labor 
unions, employees, management, State, local, and other govern-
ments, and others directly deriving benefit from the production, 
distribution, or sale of products of the Corporation; and 
(10) the term "wages and benefits" means any direct or 
indirect compensation paid by the Corporation to employees of 
the Corporation and shall include, but is not limited to, amounts 
paid in accordance with wage scales, straight time hourly wage 
rates, base wage rates, base salary rates, salary scales, and 
periodic salary grades, overtime premiums, night shift premi-
ums, vacation payments, holiday payments, relocation allow-
ance, call-in pay, bonuses, bereavement pay, jury duty pay, paid 
absence allowances, short-term military duty pay, paid leaves of 
absence, holiday pay including personal holidays, and medical, 
health, accident, sickness, disability, hospitalization, insurance, 
pension, educational, and supplemental unemployment benefits. 
CHRYSLER CORPORATION LOAN GUARANTEE BOARD 
SEC. 3. There is established a Chrysler Corporation Loan Guarantee 
Board which shall consist of the Secretary of the Treasury who shall 
be the Chairperson of the Board, the Chairman of the Board of 
Governors of the Federal Reserve System, and the Comptroller 
General of the United States. The Secretary of Labor and the 
Secretary of Transportation shall be ex officio nonvoting members of 
the Board. 
Establishment. 
Membership. 
15 use 1862. 
AUTHORITY FOR COMMITMENTS FOR LOAN GUARANTEES 
SEC. 4. (a) Subject to the provisions of this Act, the Board, on such 15 USC 1863 
terms and conditions as it deems appropriate, may make commit-
ments to guarantee the payment of principal and interest on loans to 
a borrower only if at the time the commitment is issued, the Board 
determines that— 
(1) there exists an energy-savings plan which— 
(A) is satisfactory to the Board; 
(B) is developed in consultation with other appropriate 
Federal agencies; 
(C) focuses on the national need to lessen United States 
dependence on petroleum; and 
(D) can be carried out by the borrowers; 
(2) the commitment is needed to enable the Corporation to 
continue to furnish goods or services, and failure to meet such 
need would adversely and seriously affect the economy of, or 
employment in, the United States or any region thereof; 
(3)(A) the Corporation has submitted to the Board a satisfac-
tory operating plan (including budget and cash flow projections) 
for the 1980 fiscal year and the next succeeding three fiscal years 
demonstrating the ability of the Corporation to continue oper-
ations as a going concern in the automobile business, and after 
December 31, 1983, to continue such operations as a going 
concern without additional guarantees or other Federal financ-
ing; and 
(B) the Board has received such assurances as it shall require 
that the operating plan is realistic and feasible; 
Operating plan, 
submittal to 
Board. 
93 STAT. 1326 
PUBLIC LAW 96-185-JAN. 7, 1980 
Financing plan. 
Stock. 
Existing 
creditors, 
waiver. 
Nonfederally 
guaranteed 
assistance. 
Definitions. 
(4) the Corporation has submitted to the Board a satisfactory 
financing plan which meets the financing needs of the Corpora-
tion as reflected in the operating plan for the period covered by 
such plan, and which includes an aggregate amount of nonfeder-
ally guaranteed assistance of at least $1,430,000,000 as deter-
mined under subsection Qi)— 
(A) from financial commitments or concessions from per-
sons with an existing economic stake in the health of the 
Corporation in excess of commitments or concessions out-
standing as of October 17, 1979, or from other persons; 
(B) from capital to be obtained through merger, sale of 
securities or otherwise after October 17,1979; 
(C) from cash to be obtained from the disposition of assets 
of the Corporation after October 17,1979; and 
(D) from the issuance of $100,000,000 of common stock of 
the Corporation which shall be made available by the Corpo-
ration to its employees and labor organizations which are 
parties to collective bargaining agreements with the Corpo-
ration; 
(5) the Board has received adequate assurances regarding the 
availability of all financing contemplated by the financing plan 
and that such financing is adequate (taking into account the 
amount of guarantees to be made available and the amount of 
wages and benefits not to be paid as a result of section 6) to meet 
all the Corporation's projected financing needs during the period 
covered by the financing plan; 
(6) the Corporation's existing creditors have certified to the 
Board that they will waive their rights to recover under any prior 
credit commitment which may be in default unless the Board 
determines that the exercise of those rights would not adversely 
affect the operating plan submitted under paragraph (3) or the 
financing plan submitted under paragraph (4); 
(7) no credit extended or committed on a nonguaranteed basis 
prior to October 17,1979, is being converted to a guaranteed basis 
pursuant to this Act; and 
(8) the financing plan submitted under paragraph (4) provides 
that expenditures under such financing plan will contribute to 
the domestic economic viability of the Corporation. 
(bXD For the purpose of computing the aggregate amount of at 
least $1,430,000,000 in nonfederally guaranteed assistance required 
to be provided under subsection (a)(4)— 
(A) the term "financial commitment" means a legally binding 
commitment to provide additional nonfederally guaranteed as-
sistance to meet the financing needs of the Corporation in excess 
of any such commitments outstanding as of October 17, 1979; 
(B) the term "concession" means a legally binding commit-
ment (or in the case of a concession from a State, local, or other 
government, a concession for which the Board has received 
adequate assurances) which will result in a reduction in the 
financing needs of the Corporation by an amount which is more 
than the amount of any reduction accomplished by any conces-
sions outstanding as of October 17,1979, and, except for a loan or 
other credit, shall be nonrecoupable; 
(C) the term "capital" means sales of equity securities, any 
other transactions involving non-interest-bearing investments in 
the Corporation, or subordinated loans on which payment of 
principal and interest is deferred until after all guaranteed loans 
are repaid; and 
PUBLIC LAW 96-185—JAN. 7, 1980 
93 STAT. 1327 
(D) the amount of "cash to be obtained from the disposition of 
assets of the Corporation" shall be determined by the Board 
based on a conservative estimate of the minimum value realiz-
able in a sale, with reference to the potential circumstances 
surrounding such a sale. 
(2) In computing the aggregate amount of at least $1,430,000,000 in 
nonfederally guaranteed assistance required to be provided under 
subsection (a)(4), there shall be excluded— 
(A) the extent of any contribution, concession, or other element 
that does not actually and substantively contribute to meeting 
the Corporation's financing needs as defined in the financing 
plan required by this section; and 
(B) deferral of any dividends on common or preferred stock 
outstanding as of October 17,1979. 
(c) The aggregate amount of nonfederally guaranteed assistance of 
at least $1,430,000,000 required to be provided under subsection (a) 
shall include— 
(1) at least $500,000,000 from United States banks, financial 
institutions, and other creditors, of which— 
(A) at least $400,000,000 shall be new loans or credits, in 
addition to the extension of the full principal amount of any 
loans committed to be made but not outstanding as of 
October 17,1979; and 
(B) at least $100,000,000 shall be concessions with respect 
to outstanding debt of the Corporation; 
(2) at least $150,000,000 shall be from foreign banks, financial 
institutions, and other creditors in the form of new loans or 
credits, in addition to the extension of the full principal amount 
of any loans committed to be made but not outstanding as of 
October 17,1979; 
(3) at least $300,000,000 shall be from the disposition of assets 
of the Corporation; 
(4) at least $250,000,000 shall be from State, local, and other 
governments; 
(5) at least $180,000,000 shall be from suppliers and dealers, of 
which at least $50,000,000 shall be in the form of capital as 
defined in subsection (b); and 
(6) at least $50,000,000 shall be from the sale of additional 
equity securities. 
The Board may, as necessary, modify the amounts of assistance 
required to be provided by any of the categories referred to in this 
subsection, so long as the aggregate amount of at least $1,430,000,000 
in nonfederally guaranteed assistance is provided under subsection 
(a)(4). 
REQUIREMENTS FOR LOAN GUARANTEES 
SEC. 5. (a) A loan guarantee may be issued under this Act only 
pursuant to a commitment issued under section 4. The terms of any 
such commitment shall provide that a loan guarantee may be issued 
under this Act only if at the time the loan guarantee is issued, the 
Board determines that— 
(1) credit is not otherwise available to the Corporation under 
reasonable terms or conditions sufficient to meet its financing 
needs as reflected in the financing plan; 
(2) the prospective earning power of the Corporation, together 
with the character and value of the security pledged, furnish 
reasonable assurance of repayment of the loan to be guaranteed 
in accordance with its terms; 
Computation of 
aggregate 
amount, 
exclusions. 
Categories of 
nonfederally 
guaranteed 
assistance. 
15 use 1864. 
93 STAT. 1328 
PUBLIC LAW 96-185—JAN. 7, 1980 
Submitted of 
revised 
operating plan, 
financial plan, 
and related 
reports. 
Determinations. 
Report to 
congressional 
committees. 
Guarantee fees. 
(3) the loan to be guaranteed bears interest at a rate deter-
mined by the Board to be reasonable taking into account the 
current average yield on outstanding obligations of the United 
States with remaining periods to maturity comparable to the 
maturity of such loan; 
(4) the operating plan and the financing plan of the Corpora-
tion continue to meet the requirements of section 4 and appropri-
ate revisions to such plans (including extensions of such plans to 
cover the then current four-year period) have been submitted to 
the Board to meet such requirements; 
(5) the Corporation is in compliance with such plans; 
(6) the Board has received such assurances as it may require 
that such plans are realistic and feasible; 
(7) the Corporation has agreed for as long as guarantees issued 
under this Act are outstanding— 
(A) to have prepared and submitted on or before the 
thirtieth day preceding each fiscal year beginning after 
December 31, 1980, a revised operating plan and financial 
plan which cover the four-year period commencing with 
such fiscal year and which meet the requirements of section 
4; and 
(B) to prepare and deliver to the Board within one hundred 
and twenty days following the close of each fiscal year, an 
analysis reconciling the Corporation's actual performance 
for such fiscal year with the operating plan and the financial 
plan in effect at the start of such fiscal year; 
(8) there is no substantial likelihood that Chrysler Corporation 
will be absorbed by or merged with any foreign entity; and 
(9) the borrower is in compliance with the terms and conditions 
of the commitment to issue the guarantees required by the Board 
pursuant to section 9(b), except to the extent that such terms and 
conditions are modified, amended, or waived by the Board. 
(b) Any determination by the Board that the conditions established 
by this Act have been met shall be conclusive, and such determina-
tion shall be evidenced by the issuance of the guarantee or commit-
ment for which such determination is required. The Board shall 
transmit to the appropriate committees of the Congress a written 
report setting forth each such determination under this Act and the 
resisons therefor not less than fifteen days prior to the issuance of any 
guarantee. The validity of any guarantee when made by the Board 
under this Act shall be incontestable in the hands of a holder, except 
for fraud or material misrepresentation on the part of such holder. 
The Board is authorized to determine the form in which any guaran-
tee made under this Act shall be issued. 
(c) The Board shall prescribe and collect no less frequently than 
annually a guarantee fee in connection with each guarantee made 
under this Act. Such fee shall be sufficient to compensate the 
Government for all of the Government's administrative expense 
related to the guarantee, but in no case may such fee be less than one-
half of 1 per centum per annum of the outstanding principal amount 
of loans guaranteed under this Act computed daily. 
(d) To the maximum extent feasible, the Board shall ensure that 
the Government is compensated for the risk assumed in making 
guarantees under this Act, and for such purpose the Board is 
authorized to— 
(1) prescribe and collect a guarantee fee in addition to the fee 
required by subsection (c); 
PUBLIC LAW 96-185—JAN. 7, 1980 
93 STAT. 1329 
(2) enter into contracts under which the Government, contin-
gent upon the financial success of the Corporation, would partici-
pate in gains of the Corporation or ite security holders; or 
(3) use other instruments deemed appropriate by the Board. 
(e) All amounts collected by the Board pursuant to subsections (c) 
and (d) shall be deposited in the Treasury as miscellaneous receipts. 
(f) Nothing in this Act shall be interpreted to mean that any loan 
guarantee of 
the Federal Government under this Act is in any way an 
asset of the Corporation which can be sold or assigned by the Chrysler 
Corporation to any foreign entity. 
Contract 
authority. 
REQUIREMENTS APPLICABLE TO EMPLOYEES 
SEC. 6. (a) No loan guarantee may be issued under this Act if at the 
time of issuance or the proposed issuance the Board determines 
that— 
(1) collective bargaining agreements entered into by the Corpo-
ration after September 14,1979, with labor organizations repre-
senting employees of the Corporation which govern the payment 
of wages and benefits to such employees from September 14, 
1979, to September 14,1982, have not been modified so that the 
cost to the Corporation of 
such wages and benefits, as determined 
by the Board, shall be reduced by a total amount of at least 
$462,500,000 for the three-year period ending on September 14, 
1982, below the cost of such wages and benefits which the 
Corporation would otherwise have been obligated to incur during 
such period, except that such dollar amount shall include 
$203,000,000 in wages and benefits to be foregone pursuant to the 
master collective bargaining agreement entered into on October 
25,1979, between the Corporation and the International Union, 
United Automobile Aerospace and Agricultural Implement 
Workers of 
America; or 
(2) the Corporation has not put into effect a plan for achieving 
at least $125,000,000 in concessions as defined in section 4(b)(1)(B) 
from employees not represented by a labor organization. 
(b) The limitations set forth in subsection (a) of this section shall 
not apply to any increase in wages or benefits required by law. 
(c) Any increase in the wages and benefits of a person employed by 
the Corporation resulting from reclassification or reevaluation of a 
job or a promotion effected in order to evade the provisions of this 
section shall be considered an indirect form of compensation. 
(dXD To meet the requirements of this section, the Corporation 
shall not enter into a collective bargaining agreement with a labor 
organization which— 
(A) reduces the amounts and levels of wages and benefits 
provided by such a collective bargaining agreement beyond the 
labor organization's proportionate share, as determined by the 
Board; or 
(B) reduces wages and benefits below the levels and amounts 
provided on September 13,1979. 
(2) For purposes of this subsection, the proportionate share of a 
labor organization shall be determined by multiplying the total 
reduction required by paragraph (1) by the quotient obtained by 
dividing the total number of 
the Corporation's employees represented 
by that labor organization whose proportionate share is to be deter-
mined by the total number of the Corporation's employees repre-
sented by labor organizations. 
Wage and 
benefit 
reductions. 
15 u s e 1865. 
59-194 O — 81 
86 : QL3 
93 STAT. 1330 
PUBLIC LAW 96-185—JAN. 7, 1980 
Cash 
contributions. 
(e) The cost reduction realized by the Corporation under the terms 
of this subsection shall not be recoupable. 
(f) If the Board determines that cash contributions from labor 
organizations or employees are legally committed so that the total 
contributions from employees and labor organizations during the 
period of September 13,1979, through September 13,1982, will exceed 
the total amount of wages and benefits not paid as a result of 
subsection (a), the Board may permit an increase in the levels and 
amounts of employee wages and benefits beyond the levels and 
amounts in effect on September 13, 1979, which would otherwise be 
prohibited by subsection (a), if (1) such increase will not impair the 
ability of the Corporation to continue as a going concern, or to meet 
such other tests of viability as the Board shall prescribe, and (2) the 
amount of such increase does not exceed the amount of the cash 
contributions committed. 
15 use 1866. 
26 use 4975. 
26 use 410. 
26 use 415. 
26 u s e 401. 
Employer 
contributions. 
EMPLOYEE STOCK OWNERSHIP PLAN 
SEC. 7. (a) No guarantee or commitment to guarantee any loan may 
be made under this Act until the Chrysler Corporation, in a written 
agreement with the Board which is satisfactory to the Board, 
agrees— 
(1) to establish a trust which forms part of an employee stock 
ownership plan meeting the requirements of subsection (c); 
(2) to make employer contributions to such trust in accordance 
with such plan; and 
(3) to issue additional shares of qualified common stock at such 
times as such shares are required to be contributed to such trust. 
(b) No guarantee or commitment to guarantee any loan may be 
made under this Act after the close of the one hundred and eighty-day 
period beginning on the date of the enactment of this Act unless the 
Chrysler Corporation has established a trust which forms part of an 
employee stock ownership plan meeting the requirements of subsec-
tion (c). 
(c) An employee stock ownership plan meets the requirements of 
this subsection only if— 
(1) such plan is maintained by the Chrysler Corporation; 
(2) such plan satisfies the requirements of section 4975(e)(7) of 
the Internal Revenue Code of 1954 (determined without regard to 
subparagraph (A) of section 410(b)(2) of such Code); 
(3) such plan provides that— 
(A) employer contributions to the trust may be made only 
in accordance with requirements of subsection (d); 
(B) each participant in the plan has a nonforfeitable right 
to the participant s accrued benefit under the plan; 
(C) each employer contribution to the trust shall be allo-
cated in equal amounts (to the extent not inconsistent with 
the requirements of section 415(c) of such Code) to the 
accounts of all participants in the plan; and 
(D) distributions from the trust under the plan will be 
made in accordance with the requirements of section 
401(k)(2XB) of the Internal Revenue Code of 1954; and 
(4) such plan benefits 90 percent or more of all employees of the 
Corporation, excluding the employees who have not satisfied the 
minimum wage and service requirements, if any, prescribed by 
the plan as a condition of participation. 
(d)(1) Employer contributions meet the requirements of this subsec-
tion only if such contributions— 
PUBLIC LAW 96-185—JAN. 7, 1980 
93 STAT. 1331 
(A) will total not less than $162,500,000 before the close of the 
four-year period beginning not later than the one hundred and 
eightieth day after the date of the enactment of this Act; 
(B) are made in such amounts and at such times that no time 
during such four-year period will the amount of employer contri-
butions to the trust be less than the amount such contributions 
would have been if made in installments of $40,625,000 made at 
the end of 
each year in such period; and 
(C) are made in the additional qualified common stock which 
the Chrysler Corporation issues by reason of subsection (a)(3). 
(2)(A) In the case of a qualified loan to the trust for the purchase of 
qualified common stock the amount of such stock purchased with the 
proceeds of such loan shall be treated for purposes of paragraph (1) as 
an employer contribution to the trust made on the date such stock is 
so purchased. 
(B) For purposes of subparagraph (A), the term "qualified loan" 
means any loan— 
(i) which may be repaid only in substantially equal install-
ments; 
(ii) which has a term of 
not more than ten years; and 
(iii) the proceeds of which are used only to purchase an amount 
of the additional qualified common stock which the Chrysler 
Corporation issues by reason of 
subsection (a)(3). 
(e) For purposes of this section, the term "qualified common stock" 
means stock of the class of common stock of the Chrysler Corporation 
which is outstanding on October 17, 1979, and which is readily 
tradeable on an established securities market. 
(f) An amount equal to $162,500,000 of the additional qualified 
common stock issued by the Corporation by reason of subsection (a)(3) 
shall not be treated for purposes of this Act as assistance received by 
the Chrysler Corporation from other than the Federal Government 
pursuant to section 4(c). 
"Qualified loan.' 
"Qualified 
common stock; 
LIMITATIONS ON GUARANTEE AUTHORITY 
SEC. 8. (a) The authority of the Board to extend loan guarantees i5 use 1867. 
under this Act shall not at any time exceed $1,500,000,000 in the 
aggregate principal amount outstanding. 
(b) Subject to subsection (a), the totel principal amount of loans 
which are guaranteed under this Act and which are outstanding at 
any time shall not exceed the amount of nonfederally guaranteed 
assistance under section 4(a) and the amount of concessions and 
contributions under section 6 which have accrued to the Corporation. 
TERMS AND CONDITIONS OF LOAN GUARANTEES 
SEC. 9. (a) Loans guaranteed under this Act shall be payable in full 15 use 1868. 
not later than December 31, 1990, and the terms and conditions of 
such loans shall provide that they cannot be amended, or any 
provision waived, without the Board's consent. 
(bXD Any commitment to issue guarantees entered into pursuant 
to this Act shall contain all the affirmative and negative covenants 
and other protective provisions that the Board determines are appro-
priate. The Board shall require security for the loans to be guaran-
teed under this Act at the time the commitment is made. 
93 STAT. 1332 
PUBLIC LAW 96-185—JAN. 7, 1980 
INSPECTION OF DOCUMENTS; AUDIT BY THE GENERAL ACCOUNTING 
OFFICE 
15 use 1869. 
SEC. 10. (a) At any time a request for a loan guarantee under this 
Act is pending or a loan guaranteed under this Act is outstanding, the 
Board is authorized to inspect and copy all accounts, books, records, 
memoranda, correspondence, and other documents and transactions 
of the Corporation and any other borrower requesting a guarantee 
under this Act. 
0)) The General Accounting Office may make such audits as may be 
deemed appropriate by the Comptroller General of the United States 
of all accounts, books, records, memoranda, correspondence, and 
other documents and transactions of the Corporation and any other 
borrower. No guarantee may be made under this Act unless and until 
the Corporation and any other borrower agree, in writing, to allow 
the General Accounting Office to make such audits. The General 
Accounting Office shall report the results of all such audits to the 
Congress. 
(c) The Board is empowered to investigate and shall investigate any 
allegations of fraud, dishonesty, incompetence, misconduct, or irregu-
larity in the management of the affairs of the Corporation which are 
material to the Corporation's ability to repay the loans guaranteed 
under this Act. 
PROTECTION OF GOVERNMENT'S INTEREST 
15 use 1870. 
SEC. 11. (a) The Board shall take such action as may be appropriate 
to enforce any right accruing to the United States or any officer or 
agency thereof as a result of the commitment or issuance of guaran-
tees under this Act. 
O
b
) If the Corporation undertakes a sale of any asset having a value 
in excess of $5,000,000, and if the Board determines such sale is likely 
to impair the ability and capacity of the Corporation to repay the 
guaranteed loans as scheduled, or to impair the ability of the 
Corporation to continue as a going concern or to meet such other tests 
of viability as the Board shall prescribe, the Board shall not issue any 
further guarantees for loans under this Act, and all guaranteed loans 
made prior to such determination shall be due and payable in full. 
(c) If the Corporation enters into any contract, including but not 
limited to future wage and benefit settlements, having an aggregate 
value of $10,000,000 or more, the Board shall determine and certify 
that the performance of the obligations of the Corporation pursuant 
to such contract will not reduce the ability of the Corporation to 
repay the guaranteed loans as scheduled, will not conflict with the 
Corporation's operating plan or financing plan as required under this 
Act, and will not impair the ability of the Corporation to continue as a 
going concern or to meet such other tests of viability as the Board 
shall prescribe. If in any case such determination and certification 
cannot be made, the Board shall not issue any further guarantees for 
loans under this Act until such certification can be made, and all 
loans guaranteed under this Act shall be due and payable in full. 
(d) The Board shall be entitled to recover from the borrower, or 
from any other person liable therefor, the amount of all payments 
made pursuant to any guarantee entered into under this Act, and 
upon making any such payment, the Board shall be subrogated to all 
the rights of the recipient thereof. 
PUBLIC LAW 96-185-JAN. 7, 1980 
93 STAT. 1333 
Compliance, 
court action. 
Invalidity of 
provisions. 
Debts due to 
United States. 
(e) The remedies provided in this Act shall be cumulative and not in 
limitation of or substitution for any other remedy available to the 
Board or the United States. 
if) The Board may bring action in any United States district court 
or any other appropriate court to enforce compliance with the 
provisions of the Act or any agreement related thereto and such court 
shall have jurisdiction to enforce such compliance and enter such 
orders as may be appropriate. 
(g) A loan shall not be guaranteed under this Act if the income from 
such loan is excluded from gross income for purposes of chapter 1 of 
the Internal Revenue Code of 1954 or if the guarantee provides 26 USC l et seq. 
significant collateral or security to other obligations, the income from 
which is so excluded. 
(h) If any provision of this Act is held to be invalid or the 
application of such provision to any person or circumstance is held to 
be invalid by a court of competent jurisdiction, the remainder of this 
Act, or the application of such provision to persons or circumstances 
other than those as to which it is held invalid, shall not be affected 
thereby. 
(i)(l) Notwithstanding any other provision of law and subject to 
paragraphs (2), (3), and (4), whenever any person is indebted to the 
United States as a result of any loan guarantee issued under this Act 
and such person is insolvent or is a debtor in a case under title 11, 
United States Code, the debts due to the United States shall be 
satisfied first. 
(2) Subject to paragraphs (3) and (4), the Board may waive the Waivers. 
priority established in paragraph (1) if— 
(A) the Board determines that the waiver of such priority is 
necessary to facilitate the ability of the Corporation or any 
borrower to obtain financing; and 
(B) the Board determines that, despite such waiver, there is a 
reasonable prospect of repayment of the loans guaranteed under 
this Act. 
(3) Subject to paragraph (4), waivers under paragraph (2) may only 
be issued— 
(A) with respect to any State or local government; 
(B) with respect to a supplier of the Corporation, except that no 
supplier of the Corporation may receive waivers under para-
graph (2) with respect to claims of such supplier in an amount of 
more than $100,000; and 
(C) with respect to loans made after October 17, 1979, by any 
creditor of the Corporation up to a total of $400,000,000. 
(4) A waiver under paragraph (2) with respect to a supplier of the 
Corporation or any creditor of the Corporation under paragraph (3XC) 
may not by its terms subordinate the claims of the United States 
under this Act to those of any other creditor of the Corporation or of 
any borrower. 
(j) The Corporation may not pay any dividend on its common or 
preferred stock during the period beginning on the date of the 
enactment of this Act and ending on the date on which loan 
guarantees issued under this Act are no longer outstanding. 
Dividend 
payment. 
LONG-TERM PLANNING STUDY 
SEC. 12. (a) The Secretary of Transportation, after consultation 
with the Secretary of Energy and the Secretary of Labor, shall submit 
to the Board and to the Congress as soon as practicable, but not later 
than six months after the date of enactment of this Act, an assess-
Submittal to 
Board and 
C!ongress. 
15 USC 1871. 
93 STAT. 1334 
PUBLIC LAW 96-185—JAN. 7, 1980 
Annual 
comprehensive 
assessments to 
C!ongress. 
Economic and 
emplo5rment 
trends. 
ment of the lon^-term viability of the Corporation's involvement in 
the automobile mdustry. The study shall assess the impact of likely 
energy trends and events on the automobile industry, including long-
term capital requirements, productivity growth rate, rate of techno-
logical change, shifting market characteristics, the capability of the 
industry as a whole to respond to the requirements of the 1980's, and 
shall evaluate the adequacy of the industry's existing structure to 
make necessary technological and corporate adjustments. The study 
shall include an examination of the Corporation's capability to 
produce for sale an automobile similar to those vehicles developed 
under the research safety vehicle program of the National Highway 
Traffic Safety Administration. The study shall consider government 
procurement as one means of establishing a market for this auto-
mobile. 
(b) The Secretary of Transportation shall prepare and transmit to 
the Congress annual comprehensive assessments of the state of the 
automobile industry and its interaction in an integrated economy. 
Each annual assessment shall include, but not be limited to, issues 
pertaining to personal mobility, capital and material requirements 
and availability, national and regional employment, productivity 
growth rate, trade and the balance of pajmients, the industry's 
competitive stioicture, and the effects of utilization of other modes of 
transportation. 
(c) The Board shall take the results of the study and each annual 
assessment into account when examining and evaluating the Corpo-
ration's financing plan and operating plan. 
(d) In the study and assessments required by subsection (a) and (b), 
the Secretary in consultation with appropriate agencies and depart-
ments shall identify any adverse effects on the economy of or on 
employment in the United States or any region thereof and shall 
make recommendations for dealing with the adverse economic and 
emplojnnent trends identified in such study and for proposed pro-
grams or structural or modifications of existing programs, as well as 
funding requirements, in such areas as economic development, com-
munity development, job retraining, and worker relocation. In addi-
tion, the Secretary may make any additional recommendations he 
deems appropriate to address the long term national and regional 
impact of reduced activity of the Corporation or of the automobile 
industry. 
PROHIBITION ON USE OF THE FEDERAL FINANCING BANK 
15 use 1872. 
SEC. 13. Notwithstanding the provisions of section 6 of the 
Federal Financing Bank Act of 1973 (12 U.S.C. 2285) or any other 
provision of law, none of the loans guaranteed or committed to be 
guaranteed under this Act shall be eligible for purchase by, or 
commitment to purchase by, or sale or issuance to, the Federal 
Financing Bank or any other Federal agency or department or entity 
owned in whole or in part by the United States. 
REPORTS TO CONGRESS 
15 use 1873. 
SEC. 14. (a) The Board shall submit to the Congress semiannually a 
full report of its activities under this Act during fiscal years 1980 and 
1981, and annually thereafter so long as any loan guaranteed under 
Future Federal 
this Act is outstanding. The final report for 1981 shall include an 
loan guarantees, evaluation of the long-term economic implications of the Chrysler 
loan guarantee program, with findings, conclusions, and recommen-
PUBLIC LAW 96-185—JAN. 7, 1980 
93 STAT. 1335 
dations for legislative and administrative actions considered appro-
priate to future Federal loan guarantee programs. The study shall 
also consider for inclusion in any guidelines covering future assist-
ance to corporations the following factors: 
(1) the prospective economic environment at the time the 
assistance would have its intended effect, and the impact that 
either the granting or denial of assistance will have on the 
environment, 
(2) the importance, in terms of size and in terms of goods and 
services rendered, or the corporation or business entity to the 
national economy, 
(3) the appropriateness of aggregate limits for such Federal 
assistance per fiscal year, 
(4) the order of preference for specific types of assistance, and 
(5) the degree to which assisted corporations or business 
entities should be required to adhere to other governmental 
policies as a condition for the assistance. 
(b) Not less than fifteen days before the issuance of any loan 
guarantee under this Act, the Board shall transmit to the appropriate 
committees of the C!ongress a written report containing— 
(1) the details of 
such loan guarantee; 
(2) the specific assurances received by the Board under the 
provisions of 
sections 4 and 5; and 
(3) the specific determinations made by the Board under the 
provisions of 
sections 4 and 5. 
(c) The Board shall have the power to require the Secretary of 
Transportation to complete, within six months of such request, an 
assessment of the economic impact on the automobile industry of 
Federal regulatory requirements and the necessity thereof. 
Federal 
regulatory 
requirements, 
economic impact 
assessment. 
AUTHORIZATION OF APPROPRIATIONS 
SEC. 15. (a) There are authorized to be appropriated beginning 
October 1, 1979, and to remain available without fiscal year limita-
tion, such sums as may be necessary to carry out the provisions of this 
Act. 
(b) Notwithstanding any other provision of this Act, the 
authority of the Board to make any loan guarantee under this Act 
shall be limited to the extent such amounts are provided in advance 
in appropriation Acts. 
TERMINATION 
SEC. 16. The authority of the Board to make commitments to 
guarantee or to issue guarantees under this Act expires on December 
31,1983. 
ASSISTANCE TO AUTOMOBILE DEALERS 
SEC. 17. (a) The Congress finds that— 
(1) automobile dealerships are, for the most part, small busi-
nesses, and 
(2) current economic conditions have adversely affected auto-
mobile dealers to an unusual extent. 
(b) The Administrator of the Small Business Administration (here-
inafter in this section referred to as the "Administrator") shall 
investigate the financial problems faced by small business auto-
mobile dealers and determine what assistance through loans and 
loan guarantees may be needed and can be made available to 
15 u s e 1874. 
15 u s e 1875. 
15 u s e 631 note. 
SBA 
investigation. 
93 STAT. 1336 
PUBLIC LAW 96-185—JAN. 7, 1980 
Report to 
alleviate such problems. The Administrator shall report the results of 
Congress. 
such investigation to the Senate and the House of Representatives 
not later than sixty days after the date of the enactment of this Act. 
Evaluation 
program. 
Regulations. 
Average fuel 
economy, 
calculation 
procedures. 
ELECTRIC AND HYBRID VEHICLE RESEARCH, DEVELOPMENT, AND 
DEMONSTRATION ACT AMENDMENTS 
SEC 18. Section 13(c) of the Electric and Hybrid Vehicle Research, 
Development, and Demonstration Act of 1976 (15 U.S.C. 2512(c)) is 
amended by adding the following new subparagraphs: 
"(1) The Secretary of Energy in consultation with the Secre-
tary of Transportation and the Administrator of the Environ-
mental Protection Agency is authorized and directed to conduct a 
seven-year evaluation program of the inclusion of electric vehi-
cles, as defined in section 512(b)(2) of the Motor Vehicle Informa-
tion and Cost Savings Act (15 U.S.C. 2012(b)(2)), in the calculation 
of average fuel economy pursuant to section 503(a) (1) and (2) of 
the Motor Vehicle Information and Cost Savings Act (15 U.S.C. 
2003(a) (1) and (2)) to determine the value and implications of 
such inclusion as an incentive for the early initiation of indus-
trial engineering development and initial commercialization of 
electric vehicles in the United States. The evaluation program 
shall be conducted in parallel with the research and development 
activities of section 6 and demonstration activities of section 7 (15 
U.S.C. 2505 and 2506) to provide all necessary information no 
later than January 1, 1987, for the private sector and Federal, 
State and local officials to make required decisions for the full 
commercialization of electric vehicles in the United States. 
"(2) The Administrator of the Environmental Protection 
Agency, in consultation with the Secretary of Energy and the 
Secretary of Transportation, shall implement immediately the 
evaluation program by promulgating, within sixty days of enact-
ment of the Act, regulations to include electric vehicles in 
average fuel economy calculations under section 503(a) (1) and 
(2) of the Motor Vehicle Information and Cost Savings Act. The 
Motor Vehicle Information and Cost Savings Act (15 U.S.C. 
2003), as amended, is further amended by adding a new section 
503(a)(3) (15 U.S.C. 2003(a)(3)), which reads as follows: 
" '(3) In the event that a manufacturer manufactures electric 
vehicles, as defined in section 512(b)(2) (15 U.S.C. 2012(b)(2)), the 
average fuel economy will be calculated under 503(a) (1) and (2) to 
include equivalent petroleum based fuel economy values for 
various classes of electric vehicles in the following manner: 
" '(A) The Secretary of Energy will determine equivalent 
petroleum based fuel economy values for various classes of 
electric vehicles. Determination of these fuel economy val-
ues will take into account the following parameters: 
*"(i) the approximate electrical energy efficiency of 
the vehicles considering the vehicle type, mission, and 
weight; 
" *(ii) the national average electricity generation and 
transmission efficiencies; 
" *(iii) the need of the Nation to conserve all forms of 
energy, and the relative scarcity and value to the Nation 
of all fuel used to generate electricity; 
" '(iv) the specific driving patterns of electric vehicles 
as compared with those of petroleum fueled vehicles. 
PUBLIC LAW 96-185—JAN. 7, 1980 
93 STAT. 1337 
"'(B) The Secretary of Energy will propose equivalent 
petroleum based fuel economy values within four months of 
enactment of the Act. Final promulgation of the values is 
required no later than six months after the proposal of the 
values. 
" '(C) The Secretary of Energy will review these values on Review 
an annual basis and will propose revisions, if necessary.'. 
"(3) The Secretary of Energy, in consultation with th« Secre-
tary of Transportation and the Administrator of the Environ-
mental Protection Agency, shall include a full discussion of this 
evaluation program in the annual report required by section 14 
(15 U.S.C. 2513) in each year after promulgation of the regula-
tions under paragraph (2). The Secretary of Energy, in consulta-
tion with the Secretary of Transportation and the Administrator 
of the Environmental Protection Agency, shall submit to the 
Congress on January 1, 1987, a final report on the results of the 
evaluation program and any recommendations regarding the 
continued inclusion of electric vehicles in the average fuel 
economy calculations under the Motor Vehicle Information and 
Cost Savings Act.". 
Results, final 
report to 
Congress. 
Approved January 7, 1980. 
15 use 1901 
note. 
LEGISLATIVE HISTORY: 
HOUSE REPORTS: No. 96-690 (Comm. on Banking, Finance, and Urban Affairs) and 
No. 96-730 (Comm. of Conference). 
SENATE REPORT No. 96-463 accompanying S. 2094 (Comm. on Banking, Housing, 
and Urban Affairs.) 
CONGRESSIONAL RECORD, Vol. 125 (1979): 
Dec. 17, S. 2094 considered in Senate. 
Dec. 18, S. 2094 considered in Senate; H.R. 5860 considered and passed House. 
Dec. 19, H.R. 5860 considered and passed Senate, amended, in lieu of S. 2094. 
Dec. 20, House and Senate agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 16, No. 1: 
Jan. 7, Presidential statement.