I am posting this information, because I feel it is the duty of every citizen to know what it's government is doing on his or her behalf. I hope everyone would take the time to read it. This is the bill that was defeated yesterday.
AMENDMENT TO THE SENATE AMENDMENT TO H.R. 3997 OFFERED BY
In lieu of the matter proposed to be inserted by the
amendment of the Senate to the amendment of the
House to the amendment of the Senate, insert the following:
1 SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
2 (a) SHORT TITLE.-This Act may be cited as the
3 ‘‘Emergency Economic Stabilization Act of 2008''.
4 (b) TABLE OF CONTENTS.-The table of contents for
5 this Act is as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Purposes.
Sec. 3. Definitions.
TITLE I-TROUBLED ASSETS RELIEF PROGRAM
Sec. 101. Purchases of troubled assets.
Sec. 102. Insurance of troubled assets.
Sec. 103. Considerations.
Sec. 104. Financial Stability Oversight Board.
Sec. 105. Reports.
Sec. 106. Rights; management; sale of troubled assets; revenues and sale proceeds.
Sec. 107. Contracting procedures.
Sec. 108. Conflicts of interest.
Sec. 109. Foreclosure mitigation efforts.
Sec. 110. Assistance to homeowners.
Sec. 111. Executive compensation and corporate governance.
Sec. 112. Coordination with foreign authorities and central banks.
Sec. 113. Minimization of long-term costs and maximization of benefits for taxpayers.
Sec. 114. Market transparency.
Sec. 115. Graduated authorization to purchase.
Sec. 116. Oversight and audits.
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Sec. 117. Study and report on margin authority.
Sec. 118. Funding.
Sec. 119. Judicial review and related matters.
Sec. 120. Termination of authority.
Sec. 121. Special Inspector General for the Troubled Asset Relief Program.
Sec. 122. Increase in statutory limit on the public debt.
Sec. 123. Credit reform.
Sec. 124. HOPE for Homeowners amendments.
Sec. 125. Congressional Oversight Panel.
Sec. 126. FDIC authority.
Sec. 127. Cooperation with the FBI.
Sec. 128. Acceleration of effective date.
Sec. 129. Disclosures on exercise of loan authority.
Sec. 130. Technical corrections.
Sec. 131. Exchange Stabilization Fund reimbursement.
Sec. 132. Authority to suspend mark-to-market accounting.
Sec. 133. Study on mark-to-market accounting.
Sec. 134. Recoupment.
Sec. 135. Preservation of authority.
TITLE II-BUDGET-RELATED PROVISIONS
Sec. 201. Information for congressional support agencies.
Sec. 202. Reports by the Office of Management and Budget and the Congressional
Budget Office.
Sec. 203. Analysis in President's Budget.
Sec. 204. Emergency treatment.
TITLE III-TAX PROVISIONS
Sec. 301. Gain or loss from sale or exchange of certain preferred stock.
Sec. 302. Special rules for tax treatment of executive compensation of employers
participating in the troubled assets relief program.
Sec. 303. Extension of exclusion of income from discharge of qualified principal
residence indebtedness.
1 SEC. 2. PURPOSES.
2 The purposes of this Act are-
3 (1) to immediately provide authority and facili4
ties that the Secretary of the Treasury can use to
5 restore liquidity and stability to the financial system
6 of the United States; and
7 (2) to ensure that such authority and such fa8
cilities are used in a manner that-
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1 (A) protects home values, college funds, re2
tirement accounts, and life savings;
3 (B) preserves homeownership and pro4
motes jobs and economic growth;
5 (C) maximizes overall returns to the tax6
payers of the United States; and
7 (D) provides public accountability for the
8 exercise of such authority.
9 SEC. 3. DEFINITIONS.
10 For purposes of this Act, the following definitions
11 shall apply:
12 (1) APPROPRIATE COMMITTEES OF CON13
GRESS.-The term ‘‘appropriate committees of Con14
gress'' means-
15 (A) the Committee on Banking, Housing,
16 and Urban Affairs, the Committee on Finance,
17 the Committee on the Budget, and the Com18
mittee on Appropriations of the Senate; and
19 (B) the Committee on Financial Services,
20 the Committee on Ways and Means, the Com21
mittee on the Budget, and the Committee on
22 Appropriations of the House of Representatives.
23 (2) BOARD.-The term ‘‘Board'' means the
24 Board of Governors of the Federal Reserve System.
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1 (3) CONGRESSIONAL SUPPORT AGENCIES.-The
2 term ‘‘congressional support agencies'' means the
3 Congressional Budget Office and the Joint Com4
mittee on Taxation.
5 (4) CORPORATION.-The term ‘‘Corporation''
6 means the Federal Deposit Insurance Corporation.
7 (5) FINANCIAL INSTITUTION.-The term ‘‘fi8
nancial institution'' means any institution, including,
9 but not limited to, any bank, savings association,
10 credit union, security broker or dealer, or insurance
11 company, established and regulated under the laws
12 of the United States or any State, territory, or pos13
session of the United States, the District of Colum14
bia, Commonwealth of Puerto Rico, Commonwealth
15 of Northern Mariana Islands, Guam, American
16 Samoa, or the United States Virgin Islands, and
17 having significant operations in the United States,
18 but excluding any central bank of, or institution
19 owned by, a foreign government.
20 (6) FUND.-The term ‘‘Fund'' means the Trou21
bled Assets Insurance Financing Fund established
22 under section 102.
23 (7) SECRETARY.-The term ‘‘Secretary'' means
24 the Secretary of the Treasury.
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1 (8) TARP.-The term ‘‘TARP'' means the
2 Troubled Asset Relief Program established under
3 section 101.
4 (9) TROUBLED ASSETS.-The term ‘‘troubled
5 assets'' means-
6 (A) residential or commercial mortgages
7 and any securities, obligations, or other instru8
ments that are based on or related to such
9 mortgages, that in each case was originated or
10 issued on or before March 14, 2008, the pur11
chase of which the Secretary determines pro12
motes financial market stability; and
13 (B) any other financial instrument that the
14 Secretary, after consultation with the Chairman
15 of the Board of Governors of the Federal Re16
serve System, determines the purchase of which
17 is necessary to promote financial market sta18
bility, but only upon transmittal of such deter19
mination, in writing, to the appropriate commit20
tees of Congress.
21 TITLE I-TROUBLED ASSETS
22 RELIEF PROGRAM
23 SEC. 101. PURCHASES OF TROUBLED ASSETS.
24 (a) OFFICES; AUTHORITY.-
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1 (1) AUTHORITY.-The Secretary is authorized
2 to establish the Troubled Asset Relief Program (or
3 ‘‘TARP'') to purchase, and to make and fund com4
mitments to purchase, troubled assets from any fi5
nancial institution, on such terms and conditions as
6 are determined by the Secretary, and in accordance
7 with this Act and the policies and procedures devel8
oped and published by the Secretary.
9 (2) COMMENCEMENT OF PROGRAM.-Establish10
ment of the policies and procedures and other simi11
lar administrative requirements imposed on the Sec12
retary by this Act are not intended to delay the com13
mencement of the TARP.
14 (3) ESTABLISHMENT OF TREASURY OFFICE.-
15 (A) IN GENERAL.-The Secretary shall im16
plement any program under paragraph (1)
17 through an Office of Financial Stability, estab18
lished for such purpose within the Office of Do19
mestic Finance of the Department of the Treas20
ury, which office shall be headed by an Assist21
ant Secretary of the Treasury, appointed by the
22 President, by and with the advice and consent
23 of the Senate, except that an interim Assistant
24 Secretary may be appointed by the Secretary.
25 (B) CLERICAL AMENDMENTS.-
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1 (i) TITLE 5.-Section 5315 of title 5,
2 United States Code, is amended in the
3 item relating to Assistant Secretaries of
4 the Treasury, by striking ‘‘(9)'' and insert5
ing ‘‘(10)''.
6 (ii) TITLE 31.-Section 301(e) of title
7 31, United States Code, is amended by
8 striking ‘‘9'' and inserting ‘‘10''.
9 (b) CONSULTATION.-In exercising the authority
10 under this section, the Secretary shall consult with the
11 Board, the Corporation, the Comptroller of the Currency,
12 the Director of the Office of Thrift Supervision, and the
13 Secretary of Housing and Urban Development.
14 (c) NECESSARY ACTIONS.-The Secretary is author15
ized to take such actions as the Secretary deems necessary
16 to carry out the authorities in this Act, including, without
17 limitation, the following:
18 (1) The Secretary shall have direct hiring au19
thority with respect to the appointment of employees
20 to administer this Act.
21 (2) Entering into contracts, including contracts
22 for services authorized by section 3109 of title 5,
23 United States Code.
24 (3) Designating financial institutions as finan25
cial agents of the Federal Government, and such in-
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1 stitutions shall perform all such reasonable duties
2 related to this Act as financial agents of the Federal
3 Government as may be required.
4 (4) In order to provide the Secretary with the
5 flexibility to manage troubled assets in a manner de6
signed to minimize cost to the taxpayers, estab7
lishing vehicles that are authorized, subject to super8
vision by the Secretary, to purchase, hold, and sell
9 troubled assets and issue obligations.
10 (5) Issuing such regulations and other guidance
11 as may be necessary or appropriate to define terms
12 or carry out the authorities or purposes of this Act.
13 (d) PROGRAM GUIDELINES.-Before the earlier of
14 the end of the 2-business-day period beginning on the date
15 of the first purchase of troubled assets pursuant to the
16 authority under this section or the end of the 45-day pe17
riod beginning on the date of enactment of this Act, the
18 Secretary shall publish program guidelines, including the
19 following:
20 (1) Mechanisms for purchasing troubled assets.
21 (2) Methods for pricing and valuing troubled
22 assets.
23 (3) Procedures for selecting asset managers.
24 (4) Criteria for identifying troubled assets for
25 purchase.
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1 (e) PREVENTING UNJUST ENRICHMENT.-In making
2 purchases under the authority of this Act, the Secretary
3 shall take such steps as may be necessary to prevent un4
just enrichment of financial institutions participating in
5 a program established under this section, including by pre6
venting the sale of a troubled asset to the Secretary at
7 a higher price than what the seller paid to purchase the
8 asset. This subsection does not apply to troubled assets
9 acquired in a merger or acquisition, or a purchase of as10
sets from a financial institution in conservatorship or re11
ceivership, or that has initiated bankruptcy proceedings
12 under title 11, United States Code.
13 SEC. 102. INSURANCE OF TROUBLED ASSETS.
14 (a) AUTHORITY.-
15 (1) IN GENERAL.-If the Secretary establishes
16 the program authorized under section 101, then the
17 Secretary shall establish a program to guarantee
18 troubled assets originated or issued prior to March
19 14, 2008, including mortgage-backed securities.
20 (2) GUARANTEES.-In establishing any pro21
gram under this subsection, the Secretary may de22
velop guarantees of troubled assets and the associ23
ated premiums for such guarantees. Such guaran24
tees and premiums may be determined by category
25 or class of the troubled assets to be guaranteed.
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1 (3) EXTENT OF GUARANTEE.-Upon request of
2 a financial institution, the Secretary may guarantee
3 the timely payment of principal of, and interest on,
4 troubled assets in amounts not to exceed 100 per5
cent of such payments. Such guarantee may be on
6 such terms and conditions as are determined by the
7 Secretary, provided that such terms and conditions
8 are consistent with the purposes of this Act.
9 (b) REPORTS.-Not later than 90 days after the date
10 of enactment of this Act, the Secretary shall report to the
11 appropriate committees of Congress on the program estab12
lished under subsection (a).
13 (c) PREMIUMS.-
14 (1) IN GENERAL.-The Secretary shall collect
15 premiums from any financial institution partici16
pating in the program established under subsection
17 (a). Such premiums shall be in an amount that the
18 Secretary determines necessary to meet the purposes
19 of this Act and to provide sufficient reserves pursu20
ant to paragraph (3).
21 (2) AUTHORITY TO BASE PREMIUMS ON PROD22
UCT RISK.-In establishing any premium under
23 paragraph (1), the Secretary may provide for vari24
ations in such rates according to the credit risk as25
sociated with the particular troubled asset that is
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1 being guaranteed. The Secretary shall publish the
2 methodology for setting the premium for a class of
3 troubled assets together with an explanation of the
4 appropriateness of the class of assets for participa5
tion in the program established under this section.
6 The methodology shall ensure that the premium is
7 consistent with paragraph (3).
8 (3) MINIMUM LEVEL.-The premiums referred
9 to in paragraph (1) shall be set by the Secretary at
10 a level necessary to create reserves sufficient to meet
11 anticipated claims, based on an actuarial analysis,
12 and to ensure that taxpayers are fully protected.
13 (4) ADJUSTMENT TO PURCHASE AUTHORITY.-
14 The purchase authority limit in section 115 shall be
15 reduced by an amount equal to the difference be16
tween the total of the outstanding guaranteed obli17
gations and the balance in the Troubled Assets In18
surance Financing Fund.
19 (d) TROUBLED ASSETS INSURANCE FINANCING
20 FUND.-
21 (1) DEPOSITS.-The Secretary shall deposit
22 fees collected under this section into the Fund estab23
lished under paragraph (2).
24 (2) ESTABLISHMENT.-There is established a
25 Troubled Assets Insurance Financing Fund that
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1 shall consist of the amounts collected pursuant to
2 paragraph (1), and any balance in such fund shall
3 be invested by the Secretary in United States Treas4
ury securities, or kept in cash on hand or on deposit,
5 as necessary.
6 (3) PAYMENTS FROM FUND.-The Secretary
7 shall make payments from amounts deposited in the
8 Fund to fulfill obligations of the guarantees provided
9 to financial institutions under subsection (a).
10 SEC. 103. CONSIDERATIONS.
11 In exercising the authorities granted in this Act, the
12 Secretary shall take into consideration-
13 (1) protecting the interests of taxpayers by
14 maximizing overall returns and minimizing the im15
pact on the national debt;
16 (2) providing stability and preventing disrup17
tion to financial markets in order to limit the impact
18 on the economy and protect American jobs, savings,
19 and retirement security;
20 (3) the need to help families keep their homes
21 and to stabilize communities;
22 (4) in determining whether to engage in a di23
rect purchase from an individual financial institu24
tion, the long-term viability of the financial institu-
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1 tion in determining whether the purchase represents
2 the most efficient use of funds under this Act;
3 (5) ensuring that all financial institutions are
4 eligible to participate in the program, without dis5
crimination based on size, geography, form of orga6
nization, or the size, type, and number of assets eli7
gible for purchase under this Act;
8 (6) providing financial assistance to financial
9 institutions, including those serving low- and mod10
erate-income populations and other underserved
11 communities, and that have assets less than
12 $1,000,000,000, that were well or adequately cap13
italized as of June 30, 2008, and that as a result
14 of the devaluation of the preferred government-spon15
sored enterprises stock will drop one or more capital
16 levels, in a manner sufficient to restore the financial
17 institutions to at least an adequately capitalized
18 level;
19 (7) the need to ensure stability for United
20 States public instrumentalities, such as counties and
21 cities, that may have suffered significant increased
22 costs or losses in the current market turmoil;
23 (8) protecting the retirement security of Ameri24
cans by purchasing troubled assets held by or on be25
half of an eligible retirement plan described in clause
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1 (iii), (iv), (v), or (vi) of section 402(c)(8)(B) of the
2 Internal Revenue Code of 1986, except that such au3
thority shall not extend to any compensation ar4
rangements subject to section 409A of such Code;
5 and
6 (9) the utility of purchasing other real estate
7 owned and instruments backed by mortgages on
8 multifamily properties.
9 SEC. 104. FINANCIAL STABILITY OVERSIGHT BOARD.
10 (a) ESTABLISHMENT.-There is established the Fi11
nancial Stability Oversight Board, which shall be respon12
sible for-
13 (1) reviewing the exercise of authority under a
14 program developed in accordance with this Act, in15
cluding-
16 (A) policies implemented by the Secretary
17 and the Office of Financial Stability created
18 under sections 101 and 102, including the ap19
pointment of financial agents, the designation
20 of asset classes to be purchased, and plans for
21 the structure of vehicles used to purchase trou22
bled assets; and
23 (B) the effect of such actions in assisting
24 American families in preserving home owner-
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1 ship, stabilizing financial markets, and pro2
tecting taxpayers;
3 (2) making recommendations, as appropriate, to
4 the Secretary regarding use of the authority under
5 this Act; and
6 (3) reporting any suspected fraud, misrepresen7
tation, or malfeasance to the Special Inspector Gen8
eral for the Troubled Assets Relief Program or the
9 Attorney General of the United States, consistent
10 with section 535(b) of title 28, United States Code.
11 (b) MEMBERSHIP.-The Financial Stability Over12
sight Board shall be comprised of-
13 (1) the Chairman of the Board of Governors of
14 the Federal Reserve System;
15 (2) the Secretary;
16 (3) the Director of the Federal Housing Fi17
nance Agency;
18 (4) the Chairman of the Securities Exchange
19 Commission; and
20 (5) the Secretary of Housing and Urban Devel21
opment.
22 (c) CHAIRPERSON.-The chairperson of the Financial
23 Stability Oversight Board shall be elected by the members
24 of the Board from among the members other than the Sec25
retary.
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1 (d) MEETINGS.-The Financial Stability Oversight
2 Board shall meet 2 weeks after the first exercise of the
3 purchase authority of the Secretary under this Act, and
4 monthly thereafter.
5 (e) ADDITIONAL AUTHORITIES.-In addition to the
6 responsibilities described in subsection (a), the Financial
7 Stability Oversight Board shall have the authority to en8
sure that the policies implemented by the Secretary are-
9 (1) in accordance with the purposes of this Act;
10 (2) in the economic interests of the United
11 States; and
12 (3) consistent with protecting taxpayers, in ac13
cordance with section 113(a).
14 (f) CREDIT REVIEW COMMITTEE.-The Financial
15 Stability Oversight Board may appoint a credit review
16 committee for the purpose of evaluating the exercise of
17 the purchase authority provided under this Act and the
18 assets acquired through the exercise of such authority, as
19 the Financial Stability Oversight Board determines appro20
priate.
21 (g) REPORTS.-The Financial Stability Oversight
22 Board shall report to the appropriate committees of Con23
gress and the Congressional Oversight Panel established
24 under section 125, not less frequently than quarterly, on
25 the matters described under subsection (a)(1).
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1 (h) TERMINATION.-The Financial Stability Over2
sight Board, and its authority under this section, shall ter3
minate on the expiration of the 15-day period beginning
4 upon the later of-
5 (1) the date that the last troubled asset ac6
quired by the Secretary under section 101 has been
7 sold or transferred out of the ownership or control
8 of the Federal Government; or
9 (2) the date of expiration of the last insurance
10 contract issued under section 102.
11 SEC. 105. REPORTS.
12 (a) IN GENERAL.-Before the expiration of the 60-
13 day period beginning on the date of the first exercise of
14 the authority granted in section 101(a), or of the first ex15
ercise of the authority granted in section 102, whichever
16 occurs first, and every 30-day period thereafter, the Sec17
retary shall report to the appropriate committees of Con18
gress, with respect to each such period-
19 (1) an overview of actions taken by the Sec20
retary, including the considerations required by sec21
tion 103 and the efforts under section 109;
22 (2) the actual obligation and expenditure of the
23 funds provided for administrative expenses by sec24
tion 118 during such period and the expected ex-
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1 penditure of such funds in the subsequent period;
2 and
3 (3) a detailed financial statement with respect
4 to the exercise of authority under this Act, includ5
ing-
6 (A) all agreements made or renewed;
7 (B) all insurance contracts entered into
8 pursuant to section 102;
9 (C) all transactions occurring during such
10 period, including the types of parties involved;
11 (D) the nature of the assets purchased;
12 (E) all projected costs and liabilities;
13 (F) operating expenses, including com14
pensation for financial agents;
15 (G) the valuation or pricing method used
16 for each transaction; and
17 (H) a description of the vehicles estab18
lished to exercise such authority.
19 (b) TRANCHE REPORTS TO CONGRESS.-
20 (1) REPORTS.-The Secretary shall provide to
21 the appropriate committees of Congress, at the times
22 specified in paragraph (2), a written report, includ23
ing-
24 (A) a description of all of the transactions
25 made during the reporting period;
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1 (B) a description of the pricing mechanism
2 for the transactions;
3 (C) a justification of the price paid for and
4 other financial terms associated with the trans5
actions;
6 (D) a description of the impact of the exer7
cise of such authority on the financial system,
8 supported, to the extent possible, by specific
9 data;
10 (E) a description of challenges that remain
11 in the financial system, including any bench12
marks yet to be achieved; and
13 (F) an estimate of additional actions under
14 the authority provided under this Act that may
15 be necessary to address such challenges.
16 (2) TIMING.-The report required by this sub17
section shall be submitted not later than 7 days
18 after the date on which commitments to purchase
19 troubled assets under the authorities provided in this
20 Act first reach an aggregate of $50,000,000,000 and
21 not later than 7 days after each $50,000,000,000 in22
terval of such commitments is reached thereafter.
23 (c) REGULATORY MODERNIZATION REPORT.-The
24 Secretary shall review the current state of the financial
25 markets and the regulatory system and submit a written
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1 report to the appropriate committees of Congress not later
2 than April 30, 2009, analyzing the current state of the
3 regulatory system and its effectiveness at overseeing the
4 participants in the financial markets, including the over5
the-counter swaps market and government-sponsored en6
terprises, and providing recommendations for improve7
ment, including-
8 (1) recommendations regarding-
9 (A) whether any participants in the finan10
cial markets that are currently outside the reg11
ulatory system should become subject to the
12 regulatory system; and
13 (B) enhancement of the clearing and set14
tlement of over-the-counter swaps; and
15 (2) the rationale underlying such recommenda16
tions.
17 (d) SHARING OF INFORMATION.-Any report re18
quired under this section shall also be submitted to the
19 Congressional Oversight Panel established under section
20 125.
21 (e) SUNSET.-The reporting requirements under this
22 section shall terminate on the later of-
23 (1) the date that the last troubled asset ac24
quired by the Secretary under section 101 has been
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1 sold or transferred out of the ownership or control
2 of the Federal Government; or
3 (2) the date of expiration of the last insurance
4 contract issued under section 102.
5 SEC. 106. RIGHTS; MANAGEMENT; SALE OF TROUBLED AS6
SETS; REVENUES AND SALE PROCEEDS.
7 (a) EXERCISE OF RIGHTS.-The Secretary may, at
8 any time, exercise any rights received in connection with
9 troubled assets purchased under this Act.
10 (b) MANAGEMENT OF TROUBLED ASSETS.-The Sec11
retary shall have authority to manage troubled assets pur12
chased under this Act, including revenues and portfolio
13 risks therefrom.
14 (c) SALE OF TROUBLED ASSETS.-The Secretary
15 may, at any time, upon terms and conditions and at a
16 price determined by the Secretary, sell, or enter into secu17
rities loans, repurchase transactions, or other financial
18 transactions in regard to, any troubled asset purchased
19 under this Act.
20 (d) TRANSFER TO TREASURY.-Revenues of, and
21 proceeds from the sale of troubled assets purchased under
22 this Act, or from the sale, exercise, or surrender of war23
rants or senior debt instruments acquired under section
24 113 shall be paid into the general fund of the Treasury
25 for reduction of the public debt.
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1 (e) APPLICATION OF SUNSET TO TROUBLED AS2
SETS.-The authority of the Secretary to hold any trou3
bled asset purchased under this Act before the termination
4 date in section 120, or to purchase or fund the purchase
5 of a troubled asset under a commitment entered into be6
fore the termination date in section 120, is not subject
7 to the provisions of section 120.
8 SEC. 107. CONTRACTING PROCEDURES.
9 (a) STREAMLINED PROCESS.-For purposes of this
10 Act, the Secretary may waive specific provisions of the
11 Federal Acquisition Regulation upon a determination that
12 urgent and compelling circumstances make compliance
13 with such provisions contrary to the public interest. Any
14 such determination, and the justification for such deter15
mination, shall be submitted to the Committees on Over16
sight and Government Reform and Financial Services of
17 the House of Representatives and the Committees on
18 Homeland Security and Governmental Affairs and Bank19
ing, Housing, and Urban Affairs of the Senate within 7
20 days.
21 (b) ADDITIONAL CONTRACTING REQUIREMENTS.-In
22 any solicitation or contract where the Secretary has, pur23
suant to subsection (a), waived any provision of the Fed24
eral Acquisition Regulation pertaining to minority con25
tracting, the Secretary shall develop and implement stand-
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1 ards and procedures to ensure, to the maximum extent
2 practicable, the inclusion and utilization of minorities (as
3 such term is defined in section 1204(c) of the Financial
4 Institutions Reform, Recovery, and Enforcement Act of
5 1989 (12 U.S.C. 1811 note)) and women, and minority6
and women-owned businesses (as such terms are defined
7 in section 21A(r)(4) of the Federal Home Loan Bank Act
8 (12 U.S.C. 1441a(r)(4)), in that solicitation or contract,
9 including contracts to asset managers, servicers, property
10 managers, and other service providers or expert consult11
ants.
12 (c) ELIGIBILITY OF FDIC.-Notwithstanding sub13
sections (a) and (b), the Corporation-
14 (1) shall be eligible for, and shall be considered
15 in, the selection of asset managers for residential
16 mortgage loans and residential mortgage-backed se17
curities; and
18 (2) shall be reimbursed by the Secretary for
19 any services provided.
20 SEC. 108. CONFLICTS OF INTEREST.
21 (a) STANDARDS REQUIRED.-The Secretary shall
22 issue regulations or guidelines necessary to address and
23 manage or to prohibit conflicts of interest that may arise
24 in connection with the administration and execution of the
25 authorities provided under this Act, including-
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1 (1) conflicts arising in the selection or hiring of
2 contractors or advisors, including asset managers;
3 (2) the purchase of troubled assets;
4 (3) the management of the troubled assets held;
5 (4) post-employment restrictions on employees;
6 and
7 (5) any other potential conflict of interest, as
8 the Secretary deems necessary or appropriate in the
9 public interest.
10 (b) TIMING.-Regulations or guidelines required by
11 this section shall be issued as soon as practicable after
12 the date of enactment of this Act.
13 SEC. 109. FORECLOSURE MITIGATION EFFORTS.
14 (a) RESIDENTIAL MORTGAGE LOAN SERVICING
15 STANDARDS.-To the extent that the Secretary acquires
16 mortgages, mortgage backed securities, and other assets
17 secured by residential real estate, including multifamily
18 housing, the Secretary shall implement a plan that seeks
19 to maximize assistance for homeowners and use the au20
thority of the Secretary to encourage the servicers of the
21 underlying mortgages, considering net present value to the
22 taxpayer, to take advantage of the HOPE for Home23
owners Program under section 257 of the National Hous24
ing Act or other available programs to minimize fore25
closures. In addition, the Secretary may use loan guaran-
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25
1 tees and credit enhancements to facilitate loan modifica2
tions to prevent avoidable foreclosures.
3 (b) COORDINATION.-The Secretary shall coordinate
4 with the Corporation, the Board (with respect to any
5 mortgage or mortgage-backed securities or pool of securi6
ties held, owned, or controlled by or on behalf of a Federal
7 reserve bank, as provided in section 110(a)(1)(C)), the
8 Federal Housing Finance Agency, the Secretary of Hous9
ing and Urban Development, and other Federal Govern10
ment entities that hold troubled assets to attempt to iden11
tify opportunities for the acquisition of classes of troubled
12 assets that will improve the ability of the Secretary to im13
prove the loan modification and restructuring process and,
14 where permissible, to permit bona fide tenants who are
15 current on their rent to remain in their homes under the
16 terms of the lease. In the case of a mortgage on a residen17
tial rental property, the plan required under this section
18 shall include protecting Federal, State, and local rental
19 subsidies and protections, and ensuring any modification
20 takes into account the need for operating funds to main21
tain decent and safe conditions at the property.
22 (c) CONSENT TO REASONABLE LOAN MODIFICATION
23 REQUESTS.-Upon any request arising under existing in24
vestment contracts, the Secretary shall consent, where ap25
propriate, and considering net present value to the tax-
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1 payer, to reasonable requests for loss mitigation measures,
2 including term extensions, rate reductions, principal write
3 downs, increases in the proportion of loans within a trust
4 or other structure allowed to be modified, or removal of
5 other limitation on modifications.
6 SEC. 110. ASSISTANCE TO HOMEOWNERS.
7 (a) DEFINITIONS.-As used in this section-
8 (1) the term ‘‘Federal property manager''
9 means-
10 (A) the Federal Housing Finance Agency,
11 in its capacity as conservator of the Federal
12 National Mortgage Association and the Federal
13 Home Loan Mortgage Corporation;
14 (B) the Corporation, with respect to resi15
dential mortgage loans and mortgage-backed se16
curities held by any bridge depository institu17
tion pursuant to section 11(n) of the Federal
18 Deposit Insurance Act; and
19 (C) the Board, with respect to any mort20
gage or mortgage-backed securities or pool of
21 securities held, owned, or controlled by or on
22 behalf of a Federal reserve bank, other than
23 mortgages or securities held, owned, or con24
trolled in connection with open market oper25
ations under section 14 of the Federal Reserve
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27
1 Act (12 U.S.C. 353), or as collateral for an ad2
vance or discount that is not in default;
3 (2) the term ‘‘consumer'' has the same meaning
4 as in section 103 of the Truth in Lending Act (15
5 U.S.C. 1602);
6 (3) the term ‘‘insured depository institution''
7 has the same meaning as in section 3 of the Federal
8 Deposit Insurance Act (12 U.S.C. 1813); and
9 (4) the term ‘‘servicer'' has the same meaning
10 as in section 6(i)(2) of the Real Estate Settlement
11 Procedures Act of 1974 (12 U.S.C. 2605(i)(2)).
12 (b) HOMEOWNER ASSISTANCE BY AGENCIES.-
13 (1) IN GENERAL.-To the extent that the Fed14
eral property manager holds, owns, or controls mort15
gages, mortgage backed securities, and other assets
16 secured by residential real estate, including multi17
family housing, the Federal property manager shall
18 implement a plan that seeks to maximize assistance
19 for homeowners and use its authority to encourage
20 the servicers of the underlying mortgages, and con21
sidering net present value to the taxpayer, to take
22 advantage of the HOPE for Homeowners Program
23 under section 257 of the National Housing Act or
24 other available programs to minimize foreclosures.
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1 (2) MODIFICATIONS.-In the case of a residen2
tial mortgage loan, modifications made under para3
graph (1) may include-
4 (A) reduction in interest rates;
5 (B) reduction of loan principal; and
6 (C) other similar modifications.
7 (3) TENANT PROTECTIONS.-In the case of
8 mortgages on residential rental properties, modifica9
tions made under paragraph (1) shall ensure-
10 (A) the continuation of any existing Fed11
eral, State, and local rental subsidies and pro12
tections; and
13 (B) that modifications take into account
14 the need for operating funds to maintain decent
15 and safe conditions at the property.
16 (4) TIMING.-Each Federal property manager
17 shall develop and begin implementation of the plan
18 required by this subsection not later than 60 days
19 after the date of enactment of this Act.
20 (5) REPORTS TO CONGRESS.-Each Federal
21 property manager shall, 60 days after the date of
22 enactment of this Act and every 30 days thereafter,
23 report to Congress specific information on the num24
ber and types of loan modifications made and the
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1 number of actual foreclosures occurring during the
2 reporting period in accordance with this section.
3 (6) CONSULTATION.-In developing the plan re4
quired by this subsection, the Federal property man5
agers shall consult with one another and, to the ex6
tent possible, utilize consistent approaches to imple7
ment the requirements of this subsection.
8 (c) ACTIONS WITH RESPECT TO SERVICERS.-In any
9 case in which a Federal property manager is not the owner
10 of a residential mortgage loan, but holds an interest in
11 obligations or pools of obligations secured by residential
12 mortgage loans, the Federal property manager shall-
13 (1) encourage implementation by the loan
14 servicers of loan modifications developed under sub15
section (b); and
16 (2) assist in facilitating any such modifications,
17 to the extent possible.
18 (d) LIMITATION.-The requirements of this section
19 shall not supersede any other duty or requirement imposed
20 on the Federal property managers under otherwise appli21
cable law.
22 SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE
23 GOVERNANCE.
24 (a) APPLICABILITY.-Any financial institution that
25 sells troubled assets to the Secretary under this Act shall
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1 be subject to the executive compensation requirements of
2 subsections (b) and (c) and the provisions under the Inter3
nal Revenue Code of 1986, as provided under the amend4
ment by section 302, as applicable.
5 (b) DIRECT PURCHASES.-
6 (1) IN GENERAL.-Where the Secretary deter7
mines that the purposes of this Act are best met
8 through direct purchases of troubled assets from an
9 individual financial institution where no bidding
10 process or market prices are available, and the Sec11
retary receives a meaningful equity or debt position
12 in the financial institution as a result of the trans13
action, the Secretary shall require that the financial
14 institution meet appropriate standards for executive
15 compensation and corporate governance. The stand16
ards required under this subsection shall be effective
17 for the duration of the period that the Secretary
18 holds an equity or debt position in the financial in19
stitution.
20 (2) CRITERIA.-The standards required under
21 this subsection shall include-
22 (A) limits on compensation that exclude in23
centives for senior executive officers of a finan24
cial institution to take unnecessary and exces25
sive risks that threaten the value of the finan-
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1 cial institution during the period that the Sec2
retary holds an equity or debt position in the fi3
nancial institution;
4 (B) a provision for the recovery by the fi5
nancial institution of any bonus or incentive
6 compensation paid to a senior executive officer
7 based on statements of earnings, gains, or other
8 criteria that are later proven to be materially
9 inaccurate; and
10 (C) a prohibition on the financial institu11
tion making any golden parachute payment to
12 its senior executive officer during the period
13 that the Secretary holds an equity or debt posi14
tion in the financial institution.
15 (3) DEFINITION.-For purposes of this section,
16 the term ‘‘senior executive officer'' means an indi17
vidual who is one of the top 5 highly paid executives
18 of a public company, whose compensation is required
19 to be disclosed pursuant to the Securities Exchange
20 Act of 1934, and any regulations issued thereunder,
21 and non-public company counterparts.
22 (c) AUCTION PURCHASES.-Where the Secretary de23
termines that the purposes of this Act are best met
24 through auction purchases of troubled assets, and only
25 where such purchases per financial institution in the ag-
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32
1 gregate exceed $300,000,000 (including direct purchases),
2 the Secretary shall prohibit, for such financial institution,
3 any new employment contract with a senior executive offi4
cer that provides a golden parachute in the event of an
5 involuntary termination, bankruptcy filing, insolvency, or
6 receivership. The Secretary shall issue guidance to carry
7 out this paragraph not later than 2 months after the date
8 of enactment of this Act, and such guidance shall be effec9
tive upon issuance.
10 (d) SUNSET.-The provisions of subsection (c) shall
11 apply only to arrangements entered into during the period
12 during which the authorities under section 101(a) are in
13 effect, as determined under section 120.
14 SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES
15 AND CENTRAL BANKS.
16 The Secretary shall coordinate, as appropriate, with
17 foreign financial authorities and central banks to work to18
ward the establishment of similar programs by such au19
thorities and central banks. To the extent that such for20
eign financial authorities or banks hold troubled assets as
21 a result of extending financing to financial institutions
22 that have failed or defaulted on such financing, such trou23
bled assets qualify for purchase under section 101.
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1 SEC. 113. MINIMIZATION OF LONG-TERM COSTS AND MAXI2
MIZATION OF BENEFITS FOR TAXPAYERS.
3 (a) LONG-TERM COSTS AND BENEFITS.-
4 (1) MINIMIZING NEGATIVE IMPACT.-The Sec5
retary shall use the authority under this Act in a
6 manner that will minimize any potential long-term
7 negative impact on the taxpayer, taking into account
8 the direct outlays, potential long-term returns on as9
sets purchased, and the overall economic benefits of
10 the program, including economic benefits due to im11
provements in economic activity and the availability
12 of credit, the impact on the savings and pensions of
13 individuals, and reductions in losses to the Federal
14 Government.
15 (2) AUTHORITY.-In carrying out paragraph
16 (1), the Secretary shall-
17 (A) hold the assets to maturity or for re18
sale for and until such time as the Secretary
19 determines that the market is optimal for sell20
ing such assets, in order to maximize the value
21 for taxpayers; and
22 (B) sell such assets at a price that the Sec23
retary determines, based on available financial
24 analysis, will maximize return on investment for
25 the Federal Government.
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1 (3) PRIVATE SECTOR PARTICIPATION.-The
2 Secretary shall encourage the private sector to par3
ticipate in purchases of troubled assets, and to in4
vest in financial institutions, consistent with the pro5
visions of this section.
6 (b) USE OF MARKET MECHANISMS.-In making pur7
chases under this Act, the Secretary shall-
8 (1) make such purchases at the lowest price
9 that the Secretary determines to be consistent with
10 the purposes of this Act; and
11 (2) maximize the efficiency of the use of tax12
payer resources by using market mechanisms, in13
cluding auctions or reverse auctions, where appro14
priate.
15 (c) DIRECT PURCHASES.-If the Secretary deter16
mines that use of a market mechanism under subsection
17 (b) is not feasible or appropriate, and the purposes of the
18 Act are best met through direct purchases from an indi19
vidual financial institution, the Secretary shall pursue ad20
ditional measures to ensure that prices paid for assets are
21 reasonable and reflect the underlying value of the asset.
22 (d) CONDITIONS ON PURCHASE AUTHORITY FOR
23 WARRANTS AND DEBT INSTRUMENTS.-
24 (1) IN GENERAL.-The Secretary may not pur25
chase, or make any commitment to purchase, any
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1 troubled asset under the authority of this Act, unless
2 the Secretary receives from the financial institution
3 from which such assets are to be purchased-
4 (A) in the case of a financial institution,
5 the securities of which are traded on a national
6 securities exchange, a warrant giving the right
7 to the Secretary to receive nonvoting common
8 stock or preferred stock in such financial insti9
tution, or voting stock with respect to which,
10 the Secretary agrees not to exercise voting
11 power, as the Secretary determines appropriate;
12 or
13 (B) in the case of any financial institution
14 other than one described in subparagraph (A),
15 a warrant for common or preferred stock, or a
16 senior debt instrument from such financial in17
stitution, as described in paragraph (2)(C).
18 (2) TERMS AND CONDITIONS.-The terms and
19 conditions of any warrant or senior debt instrument
20 required under paragraph (1) shall meet the fol21
lowing requirements:
22 (A) PURPOSES.-Such terms and condi23
tions shall, at a minimum, be designed-
24 (i) to provide for reasonable participa25
tion by the Secretary, for the benefit of
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1 taxpayers, in equity appreciation in the
2 case of a warrant or other equity security,
3 or a reasonable interest rate premium, in
4 the case of a debt instrument; and
5 (ii) to provide additional protection
6 for the taxpayer against losses from sale of
7 assets by the Secretary under this Act and
8 the administrative expenses of the TARP.
9 (B) AUTHORITY TO SELL, EXERCISE, OR
10 SURRENDER.-The Secretary may sell, exercise,
11 or surrender a warrant or any senior debt in12
strument received under this subsection, based
13 on the conditions established under subpara14
graph (A).
15 (C) CONVERSION.-The warrant shall pro16
vide that if, after the warrant is received by the
17 Secretary under this subsection, the financial
18 institution that issued the warrant is no longer
19 listed or traded on a national securities ex20
change or securities association, as described in
21 paragraph (1)(A), such warrants shall convert
22 to senior debt, or contain appropriate protec23
tions for the Secretary to ensure that the
24 Treasury is appropriately compensated for the
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1 value of the warrant, in an amount determined
2 by the Secretary.
3 (D) PROTECTIONS.-Any warrant rep4
resenting securities to be received by the Sec5
retary under this subsection shall contain anti6
dilution provisions of the type employed in cap7
ital market transactions, as determined by the
8 Secretary. Such provisions shall protect the
9 value of the securities from market transactions
10 such as stock splits, stock distributions, divi11
dends, and other distributions, mergers, and
12 other forms of reorganization or recapitaliza13
tion.
14 (E) EXERCISE PRICE.-The exercise price
15 for any warrant issued pursuant to this sub16
section shall be set by the Secretary, in the in17
terest of the taxpayers.
18 (F) SUFFICIENCY.-The financial institu19
tion shall guarantee to the Secretary that it has
20 authorized shares of nonvoting stock available
21 to fulfill its obligations under this subsection.
22 Should the financial institution not have suffi23
cient authorized shares, including preferred
24 shares that may carry dividend rights equal to
25 a multiple number of common shares, the Sec-
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1 retary may, to the extent necessary, accept a
2 senior debt note in an amount, and on such
3 terms as will compensate the Secretary with
4 equivalent value, in the event that a sufficient
5 shareholder vote to authorize the necessary ad6
ditional shares cannot be obtained.
7 (3) EXCEPTIONS.-
8 (A) DE MINIMIS.-The Secretary shall es9
tablish de minimis exceptions to the require10
ments of this subsection, based on the size of
11 the cumulative transactions of troubled assets
12 purchased from any one financial institution for
13 the duration of the program, at not more than
14 $100,000,000.
15 (B) OTHER EXCEPTIONS.-The Secretary
16 shall establish an exception to the requirements
17 of this subsection and appropriate alternative
18 requirements for any participating financial in19
stitution that is legally prohibited from issuing
20 securities and debt instruments, so as not to
21 allow circumvention of the requirements of this
22 section.
23 SEC. 114. MARKET TRANSPARENCY.
24 (a) PRICING.-To facilitate market transparency, the
25 Secretary shall make available to the public, in electronic
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1 form, a description, amounts, and pricing of assets ac2
quired under this Act, within 2 business days of purchase,
3 trade, or other disposition.
4 (b) DISCLOSURE.-For each type of financial institu5
tions that sells troubled assets to the Secretary under this
6 Act, the Secretary shall determine whether the public dis7
closure required for such financial institutions with re8
spect to off-balance sheet transactions, derivatives instru9
ments, contingent liabilities, and similar sources of poten10
tial exposure is adequate to provide to the public sufficient
11 information as to the true financial position of the institu12
tions. If such disclosure is not adequate for that purpose,
13 the Secretary shall make recommendations for additional
14 disclosure requirements to the relevant regulators.
15 SEC. 115. GRADUATED AUTHORIZATION TO PURCHASE.
16 (a) AUTHORITY.-The authority of the Secretary to
17 purchase troubled assets under this Act shall be limited
18 as follows:
19 (1) Effective upon the date of enactment of this
20 Act, such authority shall be limited to
21 $250,000,000,000 outstanding at any one time.
22 (2) If at any time, the President submits to the
23 Congress a written certification that the Secretary
24 needs to exercise the authority under this paragraph,
25 effective upon such submission, such authority shall
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1 be limited to $350,000,000,000 outstanding at any
2 one time.
3 (3) If, at any time after the certification in
4 paragraph (2) has been made, the President trans5
mits to the Congress a written report detailing the
6 plan of the Secretary to exercise the authority under
7 this paragraph, unless there is enacted, within 15
8 calendar days of such transmission, a joint resolu9
tion described in subsection (c), effective upon the
10 expiration of such 15-day period, such authority
11 shall be limited to $700,000,000,000 outstanding at
12 any one time.
13 (b) AGGREGATION OF PURCHASE PRICES.-The
14 amount of troubled assets purchased by the Secretary out15
standing at any one time shall be determined for purposes
16 of the dollar amount limitations under subsection (a) by
17 aggregating the purchase prices of all troubled assets held.
18 (c) JOINT RESOLUTION OF DISAPPROVAL.-
19 (1) IN GENERAL.-Notwithstanding any other
20 provision of this section, the Secretary may not exer21
cise any authority to make purchases under this Act
22 with regard to any amount in excess of
23 $350,000,000,000 previously obligated, as described
24 in this section if, within 15 calendar days after the
25 date on which Congress receives a report of the plan
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1 of the Secretary described in subsection (a)(3), there
2 is enacted into law a joint resolution disapproving
3 the plan of the Secretary with respect to such addi4
tional amount.
5 (2) CONTENTS OF JOINT RESOLUTION.-For
6 the purpose of this section, the term ‘‘joint resolu7
tion'' means only a joint resolution-
8 (A) that is introduced not later than 3 cal9
endar days after the date on which the report
10 of the plan of the Secretary referred to in sub11
section (a)(3) is received by Congress;
12 (B) which does not have a preamble;
13 (C) the title of which is as follows: ‘‘Joint
14 resolution relating to the disapproval of obliga15
tions under the Emergency Economic Stabiliza16
tion Act of 2008''; and
17 (D) the matter after the resolving clause of
18 which is as follows: ‘‘That Congress disapproves
19 the obligation of any amount exceeding the
20 amounts obligated as described in paragraphs
21 (1) and (2) of section 115(a) of the Emergency
22 Economic Stabilization Act of 2008.''.
23 (d) FAST TRACK CONSIDERATION IN HOUSE OF REP24
RESENTATIVES.-
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1 (1) RECONVENING.-Upon receipt of a report
2 under subsection (a)(3), the Speaker, if the House
3 would otherwise be adjourned, shall notify the Mem4
bers of the House that, pursuant to this section, the
5 House shall convene not later than the second cal6
endar day after receipt of such report;
7 (2) REPORTING AND DISCHARGE.-Any com8
mittee of the House of Representatives to which a
9 joint resolution is referred shall report it to the
10 House not later than 5 calendar days after the date
11 of receipt of the report described in subsection
12 (a)(3). If a committee fails to report the joint resolu13
tion within that period, the committee shall be dis14
charged from further consideration of the joint reso15
lution and the joint resolution shall be referred to
16 the appropriate calendar.
17 (3) PROCEEDING TO CONSIDERATION.-After
18 each committee authorized to consider a joint resolu19
tion reports it to the House or has been discharged
20 from its consideration, it shall be in order, not later
21 than the sixth day after Congress receives the report
22 described in subsection (a)(3), to move to proceed to
23 consider the joint resolution in the House. All points
24 of order against the motion are waived. Such a mo25
tion shall not be in order after the House has dis-
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1 posed of a motion to proceed on the joint resolution.
2 The previous question shall be considered as ordered
3 on the motion to its adoption without intervening
4 motion. The motion shall not be debatable. A motion
5 to reconsider the vote by which the motion is dis6
posed of shall not be in order.
7 (4) CONSIDERATION.-The joint resolution
8 shall be considered as read. All points of order
9 against the joint resolution and against its consider10
ation are waived. The previous question shall be con11
sidered as ordered on the joint resolution to its pas12
sage without intervening motion except two hours of
13 debate equally divided and controlled by the pro14
ponent and an opponent. A motion to reconsider the
15 vote on passage of the joint resolution shall not be
16 in order.
17 (e) FAST TRACK CONSIDERATION IN SENATE.-
18 (1) RECONVENING.-Upon receipt of a report
19 under subsection (a)(3), if the Senate has adjourned
20 or recessed for more than 2 days, the majority lead21
er of the Senate, after consultation with the minority
22 leader of the Senate, shall notify the Members of the
23 Senate that, pursuant to this section, the Senate
24 shall convene not later than the second calendar day
25 after receipt of such message.
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1 (2) PLACEMENT ON CALENDAR.-Upon intro2
duction in the Senate, the joint resolution shall be
3 placed immediately on the calendar.
4 (3) FLOOR CONSIDERATION.-
5 (A) IN GENERAL.-Notwithstanding Rule
6 XXII of the Standing Rules of the Senate, it is
7 in order at any time during the period begin8
ning on the 4th day after the date on which
9 Congress receives a report of the plan of the
10 Secretary described in subsection (a)(3) and
11 ending on the 6th day after the date on which
12 Congress receives a report of the plan of the
13 Secretary described in subsection (a)(3) (even
14 though a previous motion to the same effect has
15 been disagreed to) to move to proceed to the
16 consideration of the joint resolution, and all
17 points of order against the joint resolution (and
18 against consideration of the joint resolution)
19 are waived. The motion to proceed is not debat20
able. The motion is not subject to a motion to
21 postpone. A motion to reconsider the vote by
22 which the motion is agreed to or disagreed to
23 shall not be in order. If a motion to proceed to
24 the consideration of the resolution is agreed to,
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1 the joint resolution shall remain the unfinished
2 business until disposed of.
3 (B) DEBATE.-Debate on the joint resolu4
tion, and on all debatable motions and appeals
5 in connection therewith, shall be limited to not
6 more than 10 hours, which shall be divided
7 equally between the majority and minority lead8
ers or their designees. A motion further to limit
9 debate is in order and not debatable. An
10 amendment to, or a motion to postpone, or a
11 motion to proceed to the consideration of other
12 business, or a motion to recommit the joint res13
olution is not in order.
14 (C) VOTE ON PASSAGE.-The vote on pas15
sage shall occur immediately following the con16
clusion of the debate on a joint resolution, and
17 a single quorum call at the conclusion of the de18
bate if requested in accordance with the rules of
19 the Senate.
20 (D) RULINGS OF THE CHAIR ON PROCE21
DURE.-Appeals from the decisions of the Chair
22 relating to the application of the rules of the
23 Senate, as the case may be, to the procedure re24
lating to a joint resolution shall be decided
25 without debate.
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1 (f) RULES RELATING TO SENATE AND HOUSE OF
2 REPRESENTATIVES.-
3 (1) COORDINATION WITH ACTION BY OTHER
4 HOUSE.-If, before the passage by one House of a
5 joint resolution of that House, that House receives
6 from the other House a joint resolution, then the fol7
lowing procedures shall apply:
8 (A) The joint resolution of the other House
9 shall not be referred to a committee.
10 (B) With respect to a joint resolution of
11 the House receiving the resolution-
12 (i) the procedure in that House shall
13 be the same as if no joint resolution had
14 been received from the other House; but
15 (ii) the vote on passage shall be on
16 the joint resolution of the other House.
17 (2) TREATMENT OF JOINT RESOLUTION OF
18 OTHER HOUSE.-If one House fails to introduce or
19 consider a joint resolution under this section, the
20 joint resolution of the other House shall be entitled
21 to expedited floor procedures under this section.
22 (3) TREATMENT OF COMPANION MEASURES.-
23 If, following passage of the joint resolution in the
24 Senate, the Senate then receives the companion
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1 measure from the House of Representatives, the
2 companion measure shall not be debatable.
3 (4) CONSIDERATION AFTER PASSAGE.-
4 (A) IN GENERAL.-If Congress passes a
5 joint resolution, the period beginning on the
6 date the President is presented with the joint
7 resolution and ending on the date the President
8 takes action with respect to the joint resolution
9 shall be disregarded in computing the 15-cal10
endar day period described in subsection (a)(3).
11 (B) VETOES.-If the President vetoes the
12 joint resolution-
13 (i) the period beginning on the date
14 the President vetoes the joint resolution
15 and ending on the date the Congress re16
ceives the veto message with respect to the
17 joint resolution shall be disregarded in
18 computing the 15-calendar day period de19
scribed in subsection (a)(3), and
20 (ii) debate on a veto message in the
21 Senate under this section shall be 1 hour
22 equally divided between the majority and
23 minority leaders or their designees.
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1 (5) RULES OF HOUSE OF REPRESENTATIVES
2 AND SENATE.-This subsection and subsections (c),
3 (d), and (e) are enacted by Congress-
4 (A) as an exercise of the rulemaking power
5 of the Senate and House of Representatives, re6
spectively, and as such it is deemed a part of
7 the rules of each House, respectively, but appli8
cable only with respect to the procedure to be
9 followed in that House in the case of a joint
10 resolution, and it supersedes other rules only to
11 the extent that it is inconsistent with such
12 rules; and
13 (B) with full recognition of the constitu14
tional right of either House to change the rules
15 (so far as relating to the procedure of that
16 House) at any time, in the same manner, and
17 to the same extent as in the case of any other
18 rule of that House.
19 SEC. 116. OVERSIGHT AND AUDITS.
20 (a) COMPTROLLER GENERAL OVERSIGHT.-
21 (1) SCOPE OF OVERSIGHT.-The Comptroller
22 General of the United States shall, upon establish23
ment of the troubled assets relief program under
24 this Act (in this section referred to as the ‘‘TARP''),
25 commence ongoing oversight of the activities and
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1 performance of the TARP and of any agents and
2 representatives of the TARP (as related to the agent
3 or representative's activities on behalf of or under
4 the authority of the TARP), including vehicles es5
tablished by the Secretary under this Act. The sub6
jects of such oversight shall include the following:
7 (A) The performance of the TARP in
8 meeting the purposes of this Act, particularly
9 those involving-
10 (i) foreclosure mitigation;
11 (ii) cost reduction;
12 (iii) whether it has provided stability
13 or prevented disruption to the financial
14 markets or the banking system; and
15 (iv) whether it has protected tax16
payers.
17 (B) The financial condition and internal
18 controls of the TARP, its representatives and
19 agents.
20 (C) Characteristics of transactions and
21 commitments entered into, including trans22
action type, frequency, size, prices paid, and all
23 other relevant terms and conditions, and the
24 timing, duration and terms of any future com25
mitments to purchase assets.
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1 (D) Characteristics and disposition of ac2
quired assets, including type, acquisition price,
3 current market value, sale prices and terms,
4 and use of proceeds from sales.
5 (E) Efficiency of the operations of the
6 TARP in the use of appropriated funds.
7 (F) Compliance with all applicable laws
8 and regulations by the TARP, its agents and
9 representatives.
10 (G) The efforts of the TARP to prevent,
11 identify, and minimize conflicts of interest in12
volving any agent or representative performing
13 activities on behalf of or under the authority of
14 the TARP.
15 (H) The efficacy of contracting procedures
16 pursuant to section 107(b), including, as appli17
cable, the efforts of the TARP in evaluating
18 proposals for inclusion and contracting to the
19 maximum extent possible of minorities (as such
20 term is defined in 1204(c) of the Financial In21
stitutions Reform, Recovery, and Enhancement
22 Act of 1989 (12 U.S.C. 1811 note), women,
23 and minority- and women-owned businesses, in24
cluding ascertaining and reporting the total
25 amount of fees paid and other value delivered
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1 by the TARP to all of its agents and represent2
atives, and such amounts paid or delivered to
3 such firms that are minority- and women-owned
4 businesses (as such terms are defined in section
5 21A of the Federal Home Loan Bank Act (12
6 U.S.C. 1441a)).
7 (2) CONDUCT AND ADMINISTRATION OF OVER8
SIGHT.-
9 (A) GAO PRESENCE.-The Secretary shall
10 provide the Comptroller General with appro11
priate space and facilities in the Department of
12 the Treasury as necessary to facilitate oversight
13 of the TARP until the termination date estab14
lished in section 120.
15 (B) ACCESS TO RECORDS.-To the extent
16 otherwise consistent with law, the Comptroller
17 General shall have access, upon request, to any
18 information, data, schedules, books, accounts,
19 financial records, reports, files, electronic com20
munications, or other papers, things, or prop21
erty belonging to or in use by the TARP, or
22 any vehicles established by the Secretary under
23 this Act, and to the officers, directors, employ24
ees, independent public accountants, financial
25 advisors, and other agents and representatives
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1 of the TARP (as related to the agent or rep2
resentative's activities on behalf of or under the
3 authority of the TARP) or any such vehicle at
4 such reasonable time as the Comptroller Gen5
eral may request. The Comptroller General
6 shall be afforded full facilities for verifying
7 transactions with the balances or securities held
8 by depositaries, fiscal agents, and custodians.
9 The Comptroller General may make and retain
10 copies of such books, accounts, and other
11 records as the Comptroller General deems ap12
propriate.
13 (C) REIMBURSEMENT OF COSTS.-The
14 Treasury shall reimburse the Government Ac15
countability Office for the full cost of any such
16 oversight activities as billed therefor by the
17 Comptroller General of the United States. Such
18 reimbursements shall be credited to the appro19
priation account ‘‘Salaries and Expenses, Gov20
ernment Accountability Office'' current when
21 the payment is received and remain available
22 until expended.
23 (3) REPORTING.-The Comptroller General
24 shall submit reports of findings under this section,
25 regularly and no less frequently than once every 60
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1 days, to the appropriate committees of Congress,
2 and the Special Inspector General for the Troubled
3 Asset Relief Program established under this Act on
4 the activities and performance of the TARP. The
5 Comptroller may also submit special reports under
6 this subsection as warranted by the findings of its
7 oversight activities.
8 (b) COMPTROLLER GENERAL AUDITS.-
9 (1) ANNUAL AUDIT.-The TARP shall annually
10 prepare and issue to the appropriate committees of
11 Congress and the public audited financial statements
12 prepared in accordance with generally accepted ac13
counting principles, and the Comptroller General
14 shall annually audit such statements in accordance
15 with generally accepted auditing standards. The
16 Treasury shall reimburse the Government Account17
ability Office for the full cost of any such audit as
18 billed therefor by the Comptroller General. Such re19
imbursements shall be credited to the appropriation
20 account ‘‘Salaries and Expenses, Government Ac21
countability Office'' current when the payment is re22
ceived and remain available until expended. The fi23
nancial statements prepared under this paragraph
24 shall be on the fiscal year basis prescribed under
25 section 1102 of title 31, United States Code.
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1 (2) AUTHORITY.-The Comptroller General
2 may audit the programs, activities, receipts, expendi3
tures, and financial transactions of the TARP and
4 any agents and representatives of the TARP (as re5
lated to the agent or representative's activities on
6 behalf of or under the authority of the TARP), in7
cluding vehicles established by the Secretary under
8 this Act.
9 (3) CORRECTIVE RESPONSES TO AUDIT PROB10
LEMS.-The TARP shall-
11 (A) take action to address deficiencies
12 identified by the Comptroller General or other
13 auditor engaged by the TARP; or
14 (B) certify to appropriate committees of
15 Congress that no action is necessary or appro16
priate.
17 (c) INTERNAL CONTROL.-
18 (1) ESTABLISHMENT.-The TARP shall estab19
lish and maintain an effective system of internal
20 control, consistent with the standards prescribed
21 under section 3512(c) of title 31, United States
22 Code, that provides reasonable assurance of-
23 (A) the effectiveness and efficiency of oper24
ations, including the use of the resources of the
25 TARP;
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1 (B) the reliability of financial reporting, in2
cluding financial statements and other reports
3 for internal and external use; and
4 (C) compliance with applicable laws and
5 regulations.
6 (2) REPORTING.-In conjunction with each an7
nual financial statement issued under this section,
8 the TARP shall-
9 (A) state the responsibility of management
10 for establishing and maintaining adequate in11
ternal control over financial reporting; and
12 (B) state its assessment, as of the end of
13 the most recent year covered by such financial
14 statement of the TARP, of the effectiveness of
15 the internal control over financial reporting.
16 (d) SHARING OF INFORMATION.-Any report or audit
17 required under this section shall also be submitted to the
18 Congressional Oversight Panel established under section
19 125.
20 (e) TERMINATION.-Any oversight, reporting, or
21 audit requirement under this section shall terminate on
22 the later of-
23 (1) the date that the last troubled asset ac24
quired by the Secretary under section 101 has been
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1 sold or transferred out of the ownership or control
2 of the Federal Government; or
3 (2) the date of expiration of the last insurance
4 contract issued under section 102.
5 SEC. 117. STUDY AND REPORT ON MARGIN AUTHORITY.
6 (a) STUDY.-The Comptroller General shall under7
take a study to determine the extent to which leverage
8 and sudden deleveraging of financial institutions was a
9 factor behind the current financial crisis.
10 (b) CONTENT.-The study required by this section
11 shall include-
12 (1) an analysis of the roles and responsibilities
13 of the Board, the Securities and Exchange Commis14
sion, the Secretary, and other Federal banking agen15
cies with respect to monitoring leverage and acting
16 to curtail excessive leveraging;
17 (2) an analysis of the authority of the Board to
18 regulate leverage, including by setting margin re19
quirements, and what process the Board used to de20
cide whether or not to use its authority;
21 (3) an analysis of any usage of the margin au22
thority by the Board; and
23 (4) recommendations for the Board and appro24
priate committees of Congress with respect to the
25 existing authority of the Board.
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1 (c) REPORT.-Not later than June 1, 2009, the
2 Comptroller General shall complete and submit a report
3 on the study required by this section to the Committee
4 on Banking, Housing, and Urban Affairs of the Senate
5 and the Committee on Financial Services of the House of
6 Representatives.
7 (d) SHARING OF INFORMATION.-Any reports re8
quired under this section shall also be submitted to the
9 Congressional Oversight Panel established under section
10 125.
11 SEC. 118. FUNDING.
12 For the purpose of the authorities granted in this
13 Act, and for the costs of administering those authorities,
14 the Secretary may use the proceeds of the sale of any secu15
rities issued under chapter 31 of title 31, United States
16 Code, and the purposes for which securities may be issued
17 under chapter 31 of title 31, United States Code, are ex18
tended to include actions authorized by this Act, including
19 the payment of administrative expenses. Any funds ex20
pended or obligated by the Secretary for actions author21
ized by this Act, including the payment of administrative
22 expenses, shall be deemed appropriated at the time of such
23 expenditure or obligation.
24 SEC. 119. JUDICIAL REVIEW AND RELATED MATTERS.
25 (a) JUDICIAL REVIEW.-
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1 (1) STANDARD.-Actions by the Secretary pur2
suant to the authority of this Act shall be subject to
3 chapter 7 of title 5, United States Code, including
4 that such final actions shall be held unlawful and set
5 aside if found to be arbitrary, capricious, an abuse
6 of discretion, or not in accordance with law.
7 (2) LIMITATIONS ON EQUITABLE RELIEF.-
8 (A) INJUNCTION.-No injunction or other
9 form of equitable relief shall be issued against
10 the Secretary for actions pursuant to section
11 101, 102, 106, and 109, other than to remedy
12 a violation of the Constitution.
13 (B) TEMPORARY RESTRAINING ORDER.-
14 Any request for a temporary restraining order
15 against the Secretary for actions pursuant to
16 this Act shall be considered and granted or de17
nied by the court within 3 days of the date of
18 the request.
19 (C) PRELIMINARY INJUNCTION.-Any re20
quest for a preliminary injunction against the
21 Secretary for actions pursuant to this Act shall
22 be considered and granted or denied by the
23 court on an expedited basis consistent with the
24 provisions of rule 65(b)(3) of the Federal Rules
25 of Civil Procedure, or any successor thereto.
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1 (D) PERMANENT INJUNCTION.-Any re2
quest for a permanent injunction against the
3 Secretary for actions pursuant to this Act shall
4 be considered and granted or denied by the
5 court on an expedited basis. Whenever possible,
6 the court shall consolidate trial on the merits
7 with any hearing on a request for a preliminary
8 injunction, consistent with the provisions of rule
9 65(a)(2) of the Federal Rules of Civil Proce10
dure, or any successor thereto.
11 (3) LIMITATION ON ACTIONS BY PARTICIPATING
12 COMPANIES.-No action or claims may be brought
13 against the Secretary by any person that divests its
14 assets with respect to its participation in a program
15 under this Act, except as provided in paragraph (1),
16 other than as expressly provided in a written con17
tract with the Secretary.
18 (4) STAYS.-Any injunction or other form of
19 equitable relief issued against the Secretary for ac20
tions pursuant to section 101, 102, 106, and 109,
21 shall be automatically stayed. The stay shall be lift22
ed unless the Secretary seeks a stay from a higher
23 court within 3 calendar days after the date on which
24 the relief is issued.
25 (b) RELATED MATTERS.-
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1 (1) TREATMENT OF HOMEOWNERS' RIGHTS.-
2 The terms of any residential mortgage loan that is
3 part of any purchase by the Secretary under this Act
4 shall remain subject to all claims and defenses that
5 would otherwise apply, notwithstanding the exercise
6 of authority by the Secretary under this Act.
7 (2) SAVINGS CLAUSE.-Any exercise of the au8
thority of the Secretary pursuant to this Act shall
9 not impair the claims or defenses that would other10
wise apply with respect to persons other than the
11 Secretary. Except as established in any contract, a
12 servicer of pooled residential mortgages owes any
13 duty to determine whether the net present value of
14 the payments on the loan, as modified, is likely to
15 be greater than the anticipated net recovery that
16 would result from foreclosure to all investors and
17 holders of beneficial interests in such investment,
18 but not to any individual or groups of investors or
19 beneficial interest holders, and shall be deemed to
20 act in the best interests of all such investors or hold21
ers of beneficial interests if the servicer agrees to or
22 implements a modification or workout plan when the
23 servicer takes reasonable loss mitigation actions, in24
cluding partial payments.
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1 SEC. 120. TERMINATION OF AUTHORITY.
2 (a) TERMINATION.-The authorities provided under
3 sections 101(a), excluding section 101(a)(3), and 102
4 shall terminate on December 31, 2009.
5 (b) EXTENSION UPON CERTIFICATION.-The Sec6
retary, upon submission of a written certification to Con7
gress, may extend the authority provided under this Act
8 to expire not later than 2 years from the date of enact9
ment of this Act. Such certification shall include a jus10
tification of why the extension is necessary to assist Amer11
ican families and stabilize financial markets, as well as
12 the expected cost to the taxpayers for such an extension.
13 SEC. 121. SPECIAL INSPECTOR GENERAL FOR THE TROU14
BLED ASSET RELIEF PROGRAM.
15 (a) OFFICE OF INSPECTOR GENERAL.-There is
16 hereby established the Office of the Special Inspector Gen17
eral for the Troubled Asset Relief Program.
18 (b) APPOINTMENT OF INSPECTOR GENERAL; RE19
MOVAL.-(1) The head of the Office of the Special Inspec20
tor General for the Troubled Asset Relief Program is the
21 Special Inspector General for the Troubled Asset Relief
22 Program (in this section referred to as the ‘‘Special In23
spector General''), who shall be appointed by the Presi24
dent, by and with the advice and consent of the Senate.
25 (2) The appointment of the Special Inspector General
26 shall be made on the basis of integrity and demonstrated
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1 ability in accounting, auditing, financial analysis, law,
2 management analysis, public administration, or investiga3
tions.
4 (3) The nomination of an individual as Special In5
spector General shall be made as soon as practicable after
6 the establishment of any program under sections 101 and
7 102.
8 (4) The Special Inspector General shall be removable
9 from office in accordance with the provisions of section
10 3(b) of the Inspector General Act of 1978 (5 U.S.C. App.).
11 (5) For purposes of section 7324 of title 5, United
12 States Code, the Special Inspector General shall not be
13 considered an employee who determines policies to be pur14
sued by the United States in the nationwide administra15
tion of Federal law.
16 (6) The annual rate of basic pay of the Special In17
spector General shall be the annual rate of basic pay pro18
vided for positions at level IV of the Executive Schedule
19 under section 5315 of title 5, United States Code.
20 (c) DUTIES.-(1) It shall be the duty of the Special
21 Inspector General to conduct, supervise, and coordinate
22 audits and investigations of the purchase, management,
23 and sale of assets by the Secretary of the Treasury under
24 any program established by the Secretary under section
25 101, and the management by the Secretary of any pro-
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1 gram established under section 102, including by col2
lecting and summarizing the following information:
3 (A) A description of the categories of troubled
4 assets purchased or otherwise procured by the Sec5
retary.
6 (B) A listing of the troubled assets purchased
7 in each such category described under subparagraph
8 (A).
9 (C) An explanation of the reasons the Secretary
10 deemed it necessary to purchase each such troubled
11 asset.
12 (D) A listing of each financial institution that
13 such troubled assets were purchased from.
14 (E) A listing of and detailed biographical infor15
mation on each person or entity hired to manage
16 such troubled assets.
17 (F) A current estimate of the total amount of
18 troubled assets purchased pursuant to any program
19 established under section 101, the amount of trou20
bled assets on the books of the Treasury, the
21 amount of troubled assets sold, and the profit and
22 loss incurred on each sale or disposition of each such
23 troubled asset.
24 (G) A listing of the insurance contracts issued
25 under section 102.
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1 (2) The Special Inspector General shall establish,
2 maintain, and oversee such systems, procedures, and con3
trols as the Special Inspector General considers appro4
priate to discharge the duty under paragraph (1).
5 (3) In addition to the duties specified in paragraphs
6 (1) and (2), the Inspector General shall also have the du7
ties and responsibilities of inspectors general under the In8
spector General Act of 1978.
9 (d) POWERS AND AUTHORITIES.-(1) In carrying out
10 the duties specified in subsection (c), the Special Inspector
11 General shall have the authorities provided in section 6
12 of the Inspector General Act of 1978.
13 (2) The Special Inspector General shall carry out the
14 duties specified in subsection (c)(1) in accordance with
15 section 4(b)(1) of the Inspector General Act of 1978.
16 (e) PERSONNEL, FACILITIES, AND OTHER RE17
SOURCES.-(1) The Special Inspector General may select,
18 appoint, and employ such officers and employees as may
19 be necessary for carrying out the duties of the Special In20
spector General, subject to the provisions of title 5, United
21 States Code, governing appointments in the competitive
22 service, and the provisions of chapter 51 and subchapter
23 III of chapter 53 of such title, relating to classification
24 and General Schedule pay rates.
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1 (2) The Special Inspector General may obtain serv2
ices as authorized by section 3109 of title 5, United States
3 Code, at daily rates not to exceed the equivalent rate pre4
scribed for grade GS-15 of the General Schedule by sec5
tion 5332 of such title.
6 (3) The Special Inspector General may enter into
7 contracts and other arrangements for audits, studies,
8 analyses, and other services with public agencies and with
9 private persons, and make such payments as may be nec10
essary to carry out the duties of the Inspector General.
11 (4)(A) Upon request of the Special Inspector General
12 for information or assistance from any department, agen13
cy, or other entity of the Federal Government, the head
14 of such entity shall, insofar as is practicable and not in
15 contravention of any existing law, furnish such informa16
tion or assistance to the Special Inspector General, or an
17 authorized designee.
18 (B) Whenever information or assistance requested by
19 the Special Inspector General is, in the judgment of the
20 Special Inspector General, unreasonably refused or not
21 provided, the Special Inspector General shall report the
22 circumstances to the appropriate committees of Congress
23 without delay.
24 (f) REPORTS.-(1) Not later than 60 days after the
25 confirmation of the Special Inspector General, and every
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1 calendar quarter thereafter, the Special Inspector General
2 shall submit to the appropriate committees of Congress
3 a report summarizing the activities of the Special Inspec4
tor General during the 120-day period ending on the date
5 of such report. Each report shall include, for the period
6 covered by such report, a detailed statement of all pur7
chases, obligations, expenditures, and revenues associated
8 with any program established by the Secretary of the
9 Treasury under sections 101 and 102, as well as the infor10
mation collected under subsection (c)(1).
11 (2) Nothing in this subsection shall be construed to
12 authorize the public disclosure of information that is-
13 (A) specifically prohibited from disclosure by
14 any other provision of law;
15 (B) specifically required by Executive order to
16 be protected from disclosure in the interest of na17
tional defense or national security or in the conduct
18 of foreign affairs; or
19 (C) a part of an ongoing criminal investigation.
20 (3) Any reports required under this section shall also
21 be submitted to the Congressional Oversight Panel estab22
lished under section 125.
23 (g) FUNDING.-(1) Of the amounts made available
24 to the Secretary of the Treasury under section 118,
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1 $50,000,000 shall be available to the Special Inspector
2 General to carry out this section.
3 (2) The amount available under paragraph (1) shall
4 remain available until expended.
5 (h) TERMINATION.-The Office of the Special Inspec6
tor General shall terminate on the later of-
7 (1) the date that the last troubled asset ac8
quired by the Secretary under section 101 has been
9 sold or transferred out of the ownership or control
10 of the Federal Government; or
11 (2) the date of expiration of the last insurance
12 contract issued under section 102.
13 SEC. 122. INCREASE IN STATUTORY LIMIT ON THE PUBLIC
14 DEBT.
15 Subsection (b) of section 3101 of title 31, United
16 States Code, is amended by striking out the dollar limita17
tion contained in such subsection and inserting
18 ‘‘$11,315,000,000,000''.
19 SEC. 123. CREDIT REFORM.
20 (a) IN GENERAL.-Subject to subsection (b), the
21 costs of purchases of troubled assets made under section
22 101(a) and guarantees of troubled assets under section
23 102, and any cash flows associated with the activities au24
thorized in section 102 and subsections (a), (b), and (c)
25 of section 106 shall be determined as provided under the
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1 Federal Credit Reform Act of 1990 (2 U.S.C. 661 et.
2 seq.).
3 (b) COSTS.-For the purposes of section 502(5) of
4 the Federal Credit Reform Act of 1990 (2 U.S.C.
5 661a(5))-
6 (1) the cost of troubled assets and guarantees
7 of troubled assets shall be calculated by adjusting
8 the discount rate in section 502(5)(E) (2 U.S.C.
9 661a(5)(E)) for market risks; and
10 (2) the cost of a modification of a troubled
11 asset or guarantee of a troubled asset shall be the
12 difference between the current estimate consistent
13 with paragraph (1) under the terms of the troubled
14 asset or guarantee of the troubled asset and the cur15
rent estimate consistent with paragraph (1) under
16 the terms of the troubled asset or guarantee of the
17 troubled asset, as modified.
18 SEC. 124. HOPE FOR HOMEOWNERS AMENDMENTS.
19 Section 257 of the National Housing Act (12 U.S.C.
20 1715z-23) is amended-
21 (1) in subsection (e)-
22 (A) in paragraph (1)(B), by inserting be23
fore ‘‘a ratio'' the following: ‘‘, or thereafter is
24 likely to have, due to the terms of the mortgage
25 being reset,'';
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69
1 (B) in paragraph (2)(B), by inserting be2
fore the period at the end ‘‘(or such higher per3
centage as the Board determines, in the discre4
tion of the Board)'';
5 (C) in paragraph (4)(A)-
6 (i) in the first sentence, by inserting
7 after ‘‘insured loan'' the following: ‘‘and
8 any payments made under this para9
graph,''; and
10 (ii) by adding at the end the fol11
lowing: ‘‘Such actions may include making
12 payments, which shall be accepted as pay13
ment in full of all indebtedness under the
14 eligible mortgage, to any holder of an ex15
isting subordinate mortgage, in lieu of any
16 future appreciation payments authorized
17 under subparagraph (B).''; and
18 (2) in subsection (w), by inserting after ‘‘ad19
ministrative costs'' the following: ‘‘and payments
20 pursuant to subsection (e)(4)(A)''.
21 SEC. 125. CONGRESSIONAL OVERSIGHT PANEL.
22 (a) ESTABLISHMENT.-There is hereby established
23 the Congressional Oversight Panel (hereafter in this sec24
tion referred to as the ‘‘Oversight Panel'') as an establish25
ment in the legislative branch.
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1 (b) DUTIES.-The Oversight Panel shall review the
2 current state of the financial markets and the regulatory
3 system and submit the following reports to Congress:
4 (1) REGULAR REPORTS.-
5 (A) IN GENERAL.-Regular reports of the
6 Oversight Panel shall include the following:
7 (i) The use by the Secretary of au8
thority under this Act, including with re9
spect to the use of contracting authority
10 and administration of the program.
11 (ii) The impact of purchases made
12 under the Act on the financial markets and
13 financial institutions.
14 (iii) The extent to which the informa15
tion made available on transactions under
16 the program has contributed to market
17 transparency.
18 (iv) The effectiveness of foreclosure
19 mitigation efforts, and the effectiveness of
20 the program from the standpoint of mini21
mizing long-term costs to the taxpayers
22 and maximizing the benefits for taxpayers.
23 (B) TIMING.-The reports required under
24 this paragraph shall be submitted not later
25 than 30 days after the first exercise by the Sec-
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71
1 retary of the authority under section 101(a) or
2 102, and every 30 days thereafter.
3 (2) SPECIAL REPORT ON REGULATORY RE4
FORM.-The Oversight Panel shall submit a special
5 report on regulatory reform not later than January
6 20, 2009, analyzing the current state of the regu7
latory system and its effectiveness at overseeing the
8 participants in the financial system and protecting
9 consumers, and providing recommendations for im10
provement, including recommendations regarding
11 whether any participants in the financial markets
12 that are currently outside the regulatory system
13 should become subject to the regulatory system, the
14 rationale underlying such recommendation, and
15 whether there are any gaps in existing consumer
16 protections.
17 (c) MEMBERSHIP.-
18 (1) IN GENERAL.-The Oversight Panel shall
19 consist of 5 members, as follows:
20 (A) 1 member appointed by the Speaker of
21 the House of Representatives.
22 (B) 1 member appointed by the minority
23 leader of the House of Representatives.
24 (C) 1 member appointed by the majority
25 leader of the Senate.
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1 (D) 1 member appointed by the minority
2 leader of the Senate.
3 (E) 1 member appointed by the Speaker of
4 the House of Representatives and the majority
5 leader of the Senate, after consultation with the
6 minority leader of the Senate and the minority
7 leader of the House of Representatives.
8 (2) PAY.-Each member of the Oversight Panel
9 shall each be paid at a rate equal to the daily equiv10
alent of the annual rate of basic pay for level I of
11 the Executive Schedule for each day (including trav12
el time) during which such member is engaged in
13 the actual performance of duties vested in the Com14
mission.
15 (3) PROHIBITION OF COMPENSATION OF FED16
ERAL EMPLOYEES.-Members of the Oversight
17 Panel who are full-time officers or employees of the
18 United States or Members of Congress may not re19
ceive additional pay, allowances, or benefits by rea20
son of their service on the Oversight Panel.
21 (4) TRAVEL EXPENSES.-Each member shall
22 receive travel expenses, including per diem in lieu of
23 subsistence, in accordance with applicable provisions
24 under subchapter I of chapter 57 of title 5, United
25 States Code.
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1 (5) QUORUM.-Four members of the Oversight
2 Panel shall constitute a quorum but a lesser number
3 may hold hearings.
4 (6) VACANCIES.-A vacancy on the Oversight
5 Panel shall be filled in the manner in which the
6 original appointment was made.
7 (7) MEETINGS.-The Oversight Panel shall
8 meet at the call of the Chairperson or a majority of
9 its members.
10 (d) STAFF.-
11 (1) IN GENERAL.-The Oversight Panel may
12 appoint and fix the pay of any personnel as the
13 Commission considers appropriate.
14 (2) EXPERTS AND CONSULTANTS.-The Over15
sight Panel may procure temporary and intermittent
16 services under section 3109(b) of title 5, United
17 States Code.
18 (3) STAFF OF AGENCIES.-Upon request of the
19 Oversight Panel, the head of any Federal depart20
ment or agency may detail, on a reimbursable basis,
21 any of the personnel of that department or agency
22 to the Oversight Panel to assist it in carrying out its
23 duties under this Act.
24 (e) POWERS.-
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1 (1) HEARINGS AND SESSIONS.-The Oversight
2 Panel may, for the purpose of carrying out this sec3
tion, hold hearings, sit and act at times and places,
4 take testimony, and receive evidence as the Panel
5 considers appropriate and may administer oaths or
6 affirmations to witnesses appearing before it.
7 (2) POWERS OF MEMBERS AND AGENTS.-Any
8 member or agent of the Oversight Panel may, if au9
thorized by the Oversight Panel, take any action
10 which the Oversight Panel is authorized to take by
11 this section.
12 (3) OBTAINING OFFICIAL DATA.-The Over13
sight Panel may secure directly from any depart14
ment or agency of the United States information
15 necessary to enable it to carry out this section. Upon
16 request of the Chairperson of the Oversight Panel,
17 the head of that department or agency shall furnish
18 that information to the Oversight Panel.
19 (4) REPORTS .-The Oversight Panel shall re20
ceive and consider all reports required to be sub21
mitted to the Oversight Panel under this Act.
22 (f) TERMINATION.-The Oversight Panel shall termi23
nate 6 months after the termination date specified in sec24
tion 120.
25 (g) FUNDING FOR EXPENSES.-
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1 (1) AUTHORIZATION OF APPROPRIATIONS.-
2 There is authorized to be appropriated to the Over3
sight Panel such sums as may be necessary for any
4 fiscal year, half of which shall be derived from the
5 applicable account of the House of Representatives,
6 and half of which shall be derived from the contin7
gent fund of the Senate.
8 (2) REIMBURSEMENT OF AMOUNTS.-An
9 amount equal to the expenses of the Oversight Panel
10 shall be promptly transferred by the Secretary, from
11 time to time upon the presentment of a statement
12 of such expenses by the Chairperson of the Over13
sight Panel, from funds made available to the Sec14
retary under this Act to the applicable fund of the
15 House of Representatives and the contingent fund of
16 the Senate, as appropriate, as reimbursement for
17 amounts expended from such account and fund
18 under paragraph (1).
19 SEC. 126. FDIC AUTHORITY.
20 (a) IN GENERAL.-Section 18(a) of the Federal De21
posit Insurance Act (12 U.S.C. 1828(a)) is amended by
22 adding at the end the following new paragraph:
23 ‘‘(4) FALSE ADVERTISING, MISUSE OF FDIC
24 NAMES, AND MISREPRESENTATION TO INDICATE IN25
SURED STATUS.-
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1 ‘‘(A) PROHIBITION ON FALSE ADVER2
TISING AND MISUSE OF FDIC NAMES.-No per3
son may represent or imply that any deposit li4
ability, obligation, certificate, or share is in5
sured or guaranteed by the Corporation, if such
6 deposit liability, obligation, certificate, or share
7 is not insured or guaranteed by the Corpora8
tion-
9 ‘‘(i) by using the terms ‘Federal De10
posit', ‘Federal Deposit Insurance', ‘Fed11
eral Deposit Insurance Corporation', any
12 combination of such terms, or the abbre13
viation ‘FDIC' as part of the business
14 name or firm name of any person, includ15
ing any corporation, partnership, business
16 trust, association, or other business entity;
17 or
18 ‘‘(ii) by using such terms or any other
19 terms, sign, or symbol as part of an adver20
tisement, solicitation, or other document.
21 ‘‘(B) PROHIBITION ON MISREPRESENTA22
TIONS OF INSURED STATUS.-No person may
23 knowingly misrepresent-
24 ‘‘(i) that any deposit liability, obliga25
tion, certificate, or share is insured, under
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1 this Act, if such deposit liability, obliga2
tion, certificate, or share is not so insured;
3 or
4 ‘‘(ii) the extent to which or the man5
ner in which any deposit liability, obliga6
tion, certificate, or share is insured under
7 this Act, if such deposit liability, obliga8
tion, certificate, or share is not so insured,
9 to the extent or in the manner represented.
10 ‘‘(C) AUTHORITY OF THE APPROPRIATE
11 FEDERAL BANKING AGENCY.-The appropriate
12 Federal banking agency shall have enforcement
13 authority in the case of a violation of this para14
graph by any person for which the agency is the
15 appropriate Federal banking agency, or any in16
stitution-affiliated party thereof.
17 ‘‘(D) CORPORATION AUTHORITY IF THE
18 APPROPRIATE FEDERAL BANKING AGENCY
19 FAILS TO FOLLOW RECOMMENDATION.-
20 ‘‘(i) RECOMMENDATION.-The Cor21
poration may recommend in writing to the
22 appropriate Federal banking agency that
23 the agency take any enforcement action
24 authorized under section 8 for purposes of
25 enforcement of this paragraph with respect
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78
1 to any person for which the agency is the
2 appropriate Federal banking agency or any
3 institution-affiliated party thereof.
4 ‘‘(ii) AGENCY RESPONSE.-If the ap5
propriate Federal banking agency does not,
6 within 30 days of the date of receipt of a
7 recommendation under clause (i), take the
8 enforcement action with respect to this
9 paragraph recommended by the Corpora10
tion or provide a plan acceptable to the
11 Corporation for responding to the situation
12 presented, the Corporation may take the
13 recommended enforcement action against
14 such person or institution-affiliated party.
15 ‘‘(E) ADDITIONAL AUTHORITY.-In addi16
tion to its authority under subparagraphs (C)
17 and (D), for purposes of this paragraph, the
18 Corporation shall have, in the same manner and
19 to the same extent as with respect to a State
20 nonmember insured bank-
21 ‘‘(i) jurisdiction over-
22 ‘‘(I) any person other than a per23
son for which another agency is the
24 appropriate Federal banking agency
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79
1 or any institution-affiliated party
2 thereof; and
3 ‘‘(II) any person that aids or
4 abets a violation of this paragraph by
5 a person described in subclause (I);
6 and
7 ‘‘(ii) for purposes of enforcing the re8
quirements of this paragraph, the author9
ity of the Corporation under-
10 ‘‘(I) section 10(c) to conduct in11
vestigations; and
12 ‘‘(II) subsections (b), (c), (d) and
13 (i) of section 8 to conduct enforce14
ment actions.
15 ‘‘(F) OTHER ACTIONS PRESERVED.-No
16 provision of this paragraph shall be construed
17 as barring any action otherwise available, under
18 the laws of the United States or any State, to
19 any Federal or State agency or individual.''.
20 (b) ENFORCEMENT ORDERS.-Section 8(c) of the
21 Federal Deposit Insurance Act (12 U.S.C. 1818(c)) is
22 amended by adding at the end the following new para23
graph:
24 ‘‘(4) FALSE ADVERTISING OR MISUSE OF
25 NAMES TO INDICATE INSURED STATUS.-
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1 ‘‘(A) TEMPORARY ORDER.-
2 ‘‘(i) IN GENERAL.-If a notice of
3 charges served under subsection (b)(1)
4 specifies on the basis of particular facts
5 that any person engaged or is engaging in
6 conduct described in section 18(a)(4), the
7 Corporation or other appropriate Federal
8 banking agency may issue a temporary
9 order requiring-
10 ‘‘(I) the immediate cessation of
11 any activity or practice described,
12 which gave rise to the notice of
13 charges; and
14 ‘‘(II) affirmative action to pre15
vent any further, or to remedy any ex16
isting, violation.
17 ‘‘(ii) EFFECT OF ORDER.-Any tem18
porary order issued under this subpara19
graph shall take effect upon service.
20 ‘‘(B) EFFECTIVE PERIOD OF TEMPORARY
21 ORDER.-A temporary order issued under sub22
paragraph (A) shall remain effective and en23
forceable, pending the completion of an admin24
istrative proceeding pursuant to subsection
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81
1 (b)(1) in connection with the notice of
2 charges-
3 ‘‘(i) until such time as the Corpora4
tion or other appropriate Federal banking
5 agency dismisses the charges specified in
6 such notice; or
7 ‘‘(ii) if a cease-and-desist order is
8 issued against such person, until the effec9
tive date of such order.
10 ‘‘(C) CIVIL MONEY PENALTIES.-Any vio11
lation of section 18(a)(4) shall be subject to
12 civil money penalties, as set forth in subsection
13 (i), except that for any person other than an in14
sured depository institution or an institution-af15
filiated party that is found to have violated this
16 paragraph, the Corporation or other appro17
priate Federal banking agency shall not be re18
quired to demonstrate any loss to an insured
19 depository institution.''.
20 (c) UNENFORCEABILITY OF CERTAIN AGREE21
MENTS.-Section 13(c) of the Federal Deposit Insurance
22 Act (12 U.S.C. 1823(c)) is amended by adding at the end
23 the following new paragraph:
24 ‘‘(11) UNENFORCEABILITY OF CERTAIN AGREE25
MENTS.-No provision contained in any existing or
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1 future standstill, confidentiality, or other agreement
2 that, directly or indirectly-
3 ‘‘(A) affects, restricts, or limits the ability
4 of any person to offer to acquire or acquire,
5 ‘‘(B) prohibits any person from offering to
6 acquire or acquiring, or
7 ‘‘(C) prohibits any person from using any
8 previously disclosed information in connection
9 with any such offer to acquire or acquisition of,
10 all or part of any insured depository institution, in11
cluding any liabilities, assets, or interest therein, in
12 connection with any transaction in which the Cor13
poration exercises its authority under section 11 or
14 13, shall be enforceable against or impose any liabil15
ity on such person, as such enforcement or liability
16 shall be contrary to public policy.''.
17 (d) TECHNICAL AND CONFORMING AMENDMENTS.-
18 Section 18 of the Federal Deposit Insurance Act (12
19 U.S.C. 1828) is amended-
20 (1) in subsection (a)(3)-
21 (A) by striking ‘‘this subsection'' the first
22 place that term appears and inserting ‘‘para23
graph (1)''; and
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1 (B) by striking ‘‘this subsection'' the sec2
ond place that term appears and inserting
3 ‘‘paragraph (2)''; and
4 (2) in the heading for subsection (a), by strik5
ing ‘‘INSURANCE LOGO.-'' and inserting ‘‘REP6
RESENTATIONS OF DEPOSIT INSURANCE.-''.
7 SEC. 127. COOPERATION WITH THE FBI.
8 Any Federal financial regulatory agency shall cooper9
ate with the Federal Bureau of Investigation and other
10 law enforcement agencies investigating fraud, misrepre11
sentation, and malfeasance with respect to development,
12 advertising, and sale of financial products.
13 SEC. 128. ACCELERATION OF EFFECTIVE DATE.
14 Section 203 of the Financial Services Regulatory Re15
lief Act of 2006 (12 U.S.C. 461 note) is amended by strik16
ing ‘‘October 1, 2011'' and inserting ‘‘October 1, 2008''.
17 SEC. 129. DISCLOSURES ON EXERCISE OF LOAN AUTHOR18
ITY.
19 (a) IN GENERAL.-Not later than 7 days after the
20 date on which the Board exercises its authority under the
21 third paragraph of section 13 of the Federal Reserve Act
22 (12 U.S.C. 343; relating to discounts for individuals, part23
nerships, and corporations) the Board shall provide to the
24 Committee on Banking, Housing, and Urban Affairs of
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1 the Senate and the Committee on Financial Services of
2 the House of Representatives a report which includes-
3 (1) the justification for exercising the authority;
4 and
5 (2) the specific terms of the actions of the
6 Board, including the size and duration of the lend7
ing, available information concerning the value of
8 any collateral held with respect to such a loan, the
9 recipient of warrants or any other potential equity in
10 exchange for the loan, and any expected cost to the
11 taxpayers for such exercise.
12 (b) PERIODIC UPDATES.-The Board shall provide
13 updates to the Committees specified in subsection (a) not
14 less frequently than once every 60 days while the subject
15 loan is outstanding, including-
16 (1) the status of the loan;
17 (2) the value of the collateral held by the Fed18
eral reserve bank which initiated the loan; and
19 (3) the projected cost to the taxpayers of the
20 loan.
21 (c) CONFIDENTIALITY.-The information submitted
22 to the Congress under this section may be kept confiden23
tial, upon the written request of the Chairman of the
24 Board, in which case it shall made available only to the
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85
1 Chairpersons and Ranking Members of the Committees
2 described in subsection (a).
3 (d) APPLICABILITY.-The provisions of this section
4 shall be in force for all uses of the authority provided
5 under section 13 of the Federal Reserve Act occurring
6 during the period beginning on March 1, 2008 and ending
7 on the after the date of enactment of this Act, and reports
8 described in subsection (a) shall be required beginning not
9 later than 30 days after that date of enactment, with re10
spect to any such exercise of authority.
11 (e) SHARING OF INFORMATION.-Any reports re12
quired under this section shall also be submitted to the
13 Congressional Oversight Panel established under section
14 125.
15 SEC. 130. TECHNICAL CORRECTIONS.
16 (a) IN GENERAL.-Section 128(b)(2) of the Truth in
17 Lending Act (15 U.S.C. 1638(b)(2)), as amended by sec18
tion 2502 of the Mortgage Disclosure Improvement Act
19 of 2008 (Public Law 110-289), is amended-
20 (1) in subparagraph (A), by striking ‘‘In the
21 case'' and inserting ‘‘Except as provided in subpara22
graph (G), in the case''; and
23 (2) by amending subparagraph (G) to read as
24 follows:
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1 ‘‘(G)(i) In the case of an extension of cred2
it relating to a plan described in section
3 101(53D) of title 11, United States Code-
4 ‘‘(I) the requirements of subpara5
graphs (A) through (E) shall not apply;
6 and
7 ‘‘(II) a good faith estimate of the dis8
closures required under subsection (a) shall
9 be made in accordance with regulations of
10 the Board under section 121(c) before
11 such credit is extended, or shall be deliv12
ered or placed in the mail not later than
13 3 business days after the date on which
14 the creditor receives the written application
15 of the consumer for such credit, whichever
16 is earlier.
17 ‘‘(ii) If a disclosure statement furnished
18 within 3 business days of the written applica19
tion (as provided under clause (i)(II)) contains
20 an annual percentage rate which is subse21
quently rendered inaccurate, within the mean22
ing of section 107(c), the creditor shall furnish
23 another disclosure statement at the time of set24
tlement or consummation of the transaction.''.
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1 (b) EFFECTIVE DATE.-The amendments made by
2 subsection (a) shall take effect as if included in the
3 amendments made by section 2502 of the Mortgage Dis4
closure Improvement Act of 2008 (Public Law 110-289).
5 SEC. 131. EXCHANGE STABILIZATION FUND REIMBURSE6
MENT.
7 (a) REIMBURSEMENT.-The Secretary shall reim8
burse the Exchange Stabilization Fund established under
9 section 5302 of title 31, United States Code, for any funds
10 that are used for the Treasury Money Market Funds
11 Guaranty Program for the United States money market
12 mutual fund industry, from funds under this Act.
13 (b) LIMITS ON USE OF EXCHANGE STABILIZATION
14 FUND.-The Secretary is prohibited from using the Ex15
change Stabilization Fund for the establishment of any
16 future guaranty programs for the United States money
17 market mutual fund industry.
18 SEC. 132. AUTHORITY TO SUSPEND MARK-TO-MARKET AC19
COUNTING.
20 (a) AUTHORITY.-The Securities and Exchange Com21
mission shall have the authority under the securities laws
22 (as such term is defined in section 3(a)(47) of the Securi23
ties Exchange Act of 1934 (15 U.S.C. 78c(a)(47)) to sus24
pend, by rule, regulation, or order, the application of
25 Statement Number 157 of the Financial Accounting
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1 Standards Board for any issuer (as such term is defined
2 in section 3(a)(8) of such Act) or with respect to any class
3 or category of transaction if the Commission determines
4 that is necessary or appropriate in the public interest and
5 is consistent with the protection of investors.
6 (b) SAVINGS PROVISION.-Nothing in subsection (a)
7 shall be construed to restrict or limit any authority of the
8 Securities and Exchange Commission under securities
9 laws as in effect on the date of enactment of this Act.
10 SEC. 133. STUDY ON MARK-TO-MARKET ACCOUNTING.
11 (a) STUDY.-The Securities and Exchange Commis12
sion, in consultation with the Board and the Secretary,
13 shall conduct a study on mark-to-market accounting
14 standards as provided in Statement Number 157 of the
15 Financial Accounting Standards Board, as such standards
16 are applicable to financial institutions, including deposi17
tory institutions. Such a study shall consider at a min18
imum-
19 (1) the effects of such accounting standards on
20 a financial institution's balance sheet;
21 (2) the impacts of such accounting on bank fail22
ures in 2008;
23 (3) the impact of such standards on the quality
24 of financial information available to investors;
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1 (4) the process used by the Financial Account2
ing Standards Board in developing accounting
3 standards;
4 (5) the advisability and feasibility of modifica5
tions to such standards; and
6 (6) alternative accounting standards to those
7 provided in such Statement Number 157.
8 (b) REPORT.-The Securities and Exchange Commis9
sion shall submit to Congress a report of such study before
10 the end of the 90-day period beginning on the date of the
11 enactment of this Act containing the findings and deter12
minations of the Commission, including such administra13
tive and legislative recommendations as the Commission
14 determines appropriate.
15 SEC. 134. RECOUPMENT.
16 Upon the expiration of the 5-year period beginning
17 upon the date of the enactment of this Act, the Director
18 of the Office of Management and Budget, in consultation
19 with the Director of the Congressional Budget Office, shall
20 submit a report to the Congress on the net amount within
21 the Troubled Asset Relief Program under this Act. In any
22 case where there is a shortfall, the President shall submit
23 a legislative proposal that recoups from the financial in24
dustry an amount equal to the shortfall in order to ensure
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1 that the Troubled Asset Relief Program does not add to
2 the deficit or national debt.
3 SEC. 135. PRESERVATION OF AUTHORITY.
4 With the exception of section 131, nothing in this Act
5 may be construed to limit the authority of the Secretary
6 or the Board under any other provision of law.
7 TITLE II-BUDGET-RELATED
8 PROVISIONS
9 SEC. 201. INFORMATION FOR CONGRESSIONAL SUPPORT
10 AGENCIES.
11 Upon request, and to the extent otherwise consistent
12 with law, all information used by the Secretary in connec13
tion with activities authorized under this Act (including
14 the records to which the Comptroller General is entitled
15 under this Act) shall be made available to congressional
16 support agencies (in accordance with their obligations to
17 support the Congress as set out in their authorizing stat18
utes) for the purposes of assisting the committees of Con19
gress with conducting oversight, monitoring, and analysis
20 of the activities authorized under this Act.
21 SEC. 202. REPORTS BY THE OFFICE OF MANAGEMENT AND
22 BUDGET AND THE CONGRESSIONAL BUDGET
23 OFFICE.
24 (a) REPORTS BY THE OFFICE OF MANAGEMENT AND
25 BUDGET.-Within 60 days of the first exercise of the au-
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1 thority granted in section 101(a), but in no case later than
2 December 31, 2008, and semiannually thereafter, the Of3
fice of Management and Budget shall report to the Presi4
dent and the Congress-
5 (1) the estimate, notwithstanding section
6 502(5)(F) of the Federal Credit Reform Act of 1990
7 (2 U.S.C. 661a(5)(F)), as of the first business day
8 that is at least 30 days prior to the issuance of the
9 report, of the cost of the troubled assets, and guar10
antees of the troubled assets, determined in accord11
ance with section 123;
12 (2) the information used to derive the estimate,
13 including assets purchased or guaranteed, prices
14 paid, revenues received, the impact on the deficit
15 and debt, and a description of any outstanding com16
mitments to purchase troubled assets; and
17 (3) a detailed analysis of how the estimate has
18 changed from the previous report.
19 Beginning with the second report under subsection (a), the
20 Office of Management and Budget shall explain the dif21
ferences between the Congressional Budget Office esti22
mates delivered in accordance with subsection (b) and
23 prior Office of Management and Budget estimates.
24 (b) REPORTS BY THE CONGRESSIONAL BUDGET OF25
FICE.-Within 45 days of receipt by the Congress of each
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1 report from the Office of Management and Budget under
2 subsection (a), the Congressional Budget Office shall re3
port to the Congress the Congressional Budget Office's
4 assessment of the report submitted by the Office of Man5
agement and Budget, including-
6 (1) the cost of the troubled assets and guaran7
tees of the troubled assets,
8 (2) the information and valuation methods used
9 to calculate such cost, and
10 (3) the impact on the deficit and the debt.
11 (c) FINANCIAL EXPERTISE.-In carrying out the du12
ties in this subsection or performing analyses of activities
13 under this Act, the Director of the Congressional Budget
14 Office may employ personnel and procure the services of
15 experts and consultants.
16 (d) AUTHORIZATION OF APPROPRIATIONS.-There
17 are authorized to be appropriated such sums as may be
18 necessary to produce reports required by this section.
19 SEC. 203. ANALYSIS IN PRESIDENT'S BUDGET.
20 (a) IN GENERAL.-Section 1105(a) of title 31,
21 United States Code, is amended by adding at the end the
22 following new paragraph:
23 ‘‘(35) as supplementary materials, a separate
24 analysis of the budgetary effects for all prior fiscal
25 years, the current fiscal year, the fiscal year for
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1 which the budget is submitted, and ensuing fiscal
2 years of the actions the Secretary of the Treasury
3 has taken or plans to take using any authority pro4
vided in the Emergency Economic Stabilization Act
5 of 2008, including-
6 ‘‘(A) an estimate of the current value of all
7 assets purchased, sold, and guaranteed under
8 the authority provided in the Emergency Eco9
nomic Stabilization Act of 2008 using method10
ology required by the Federal Credit Reform
11 Act of 1990 (2 U.S.C. 661 et seq.) and section
12 123 of the Emergency Economic Stabilization
13 Act of 2008;
14 ‘‘(B) an estimate of the deficit, the debt
15 held by the public, and the gross Federal debt
16 using methodology required by the Federal
17 Credit Reform Act of 1990 and section 123 of
18 the Emergency Economic Stabilization Act of
19 2008;
20 ‘‘(C) an estimate of the current value of all
21 assets purchased, sold, and guaranteed under
22 the authority provided in the Emergency Eco23
nomic Stabilization Act of 2008 calculated on a
24 cash basis;
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1 ‘‘(D) a revised estimate of the deficit, the
2 debt held by the public, and the gross Federal
3 debt, substituting the cash-based estimates in
4 subparagraph (C) for the estimates calculated
5 under subparagraph (A) pursuant to the Fed6
eral Credit Reform Act of 1990 and section 123
7 of the Emergency Economic Stabilization Act of
8 2008; and
9 ‘‘(E) the portion of the deficit which can
10 be attributed to any action taken by the Sec11
retary using authority provided by the Emer12
gency Economic Stabilization Act of 2008 and
13 the extent to which the change in the deficit
14 since the most recent estimate is due to a re15
estimate using the methodology required by the
16 Federal Credit Reform Act of 1990 and section
17 123 of the Emergency Economic Stabilization
18 Act of 2008.''
19 (b) CONSULTATION.-In implementing this section,
20 the Director of Office of Management and Budget shall
21 consult periodically, but at least annually, with the Com22
mittee on the Budget of the House of Representatives, the
23 Committee on the Budget of the Senate, and the Director
24 of the Congressional Budget Office.
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1 (c) EFFECTIVE DATE.-This section and the amend2
ment made by this section shall apply beginning with re3
spect to the fiscal year 2010 budget submission of the
4 President.
5 SEC. 204. EMERGENCY TREATMENT.
6 All provisions of this Act are designated as an emer7
gency requirement and necessary to meet emergency needs
8 pursuant to section 204(a) of S. Con. Res 21 (110th Con9
gress), the concurrent resolution on the budget for fiscal
10 year 2008 and rescissions of any amounts provided in this
11 Act shall not be counted for purposes of budget enforce12
ment.
13 TITLE III-TAX PROVISIONS
14 SEC. 301. GAIN OR LOSS FROM SALE OR EXCHANGE OF
15 CERTAIN PREFERRED STOCK.
16 (a) IN GENERAL.-For purposes of the Internal Rev17
enue Code of 1986, gain or loss from the sale or exchange
18 of any applicable preferred stock by any applicable finan19
cial institution shall be treated as ordinary income or loss.
20 (b) APPLICABLE PREFERRED STOCK.-For purposes
21 of this section, the term ‘‘applicable preferred stock''
22 means any stock-
23 (1) which is preferred stock in-
24 (A) the Federal National Mortgage Asso25
ciation, established pursuant to the Federal Na-
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1 tional Mortgage Association Charter Act (12
2 U.S.C. 1716 et seq.), or
3 (B) the Federal Home Loan Mortgage
4 Corporation, established pursuant to the Fed5
eral Home Loan Mortgage Corporation Act (12
6 U.S.C. 1451 et seq.), and
7 (2) which-
8 (A) was held by the applicable financial in9
stitution on September 6, 2008, or
10 (B) was sold or exchanged by the applica11
ble financial institution on or after January 1,
12 2008, and before September 7, 2008.
13 (c) APPLICABLE FINANCIAL INSTITUTION.-For pur14
poses of this section:
15 (1) IN GENERAL.-Except as provided in para16
graph (2), the term ‘‘applicable financial institution''
17 means-
18 (A) a financial institution referred to in
19 section 582(c)(2) of the Internal Revenue Code
20 of 1986, or
21 (B) a depository institution holding com22
pany (as defined in section 3(w)(1) of the Fed23
eral Deposit Insurance Act (12 U.S.C.
24 1813(w)(1))).
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1 (2) SPECIAL RULES FOR CERTAIN SALES.-In
2 the case of-
3 (A) a sale or exchange described in sub4
section (b)(2)(B), an entity shall be treated as
5 an applicable financial institution only if it was
6 an entity described in subparagraph (A) or (B)
7 of paragraph (1) at the time of the sale or ex8
change, and
9 (B) a sale or exchange after September 6,
10 2008, of preferred stock described in subsection
11 (b)(2)(A), an entity shall be treated as an appli12
cable financial institution only if it was an enti13
ty described in subparagraph (A) or (B) of
14 paragraph (1) at all times during the period be15
ginning on September 6, 2008, and ending on
16 the date of the sale or exchange of the pre17
ferred stock.
18 (d) SPECIAL RULE FOR CERTAIN PROPERTY NOT
19 HELD ON SEPTEMBER 6, 2008.-The Secretary of the
20 Treasury or the Secretary's delegate may extend the appli21
cation of this section to all or a portion of the gain or
22 loss from a sale or exchange in any case where-
23 (1) an applicable financial institution sells or
24 exchanges applicable preferred stock after Sep25
tember 6, 2008, which the applicable financial insti-
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98
1 tution did not hold on such date, but the basis of
2 which in the hands of the applicable financial insti3
tution at the time of the sale or exchange is the
4 same as the basis in the hands of the person which
5 held such stock on such date, or
6 (2) the applicable financial institution is a part7
ner in a partnership which-
8 (A) held such stock on September 6, 2008,
9 and later sold or exchanged such stock, or
10 (B) sold or exchanged such stock during
11 the period described in subsection (b)(2)(B).
12 (e) REGULATORY AUTHORITY.-The Secretary of the
13 Treasury or the Secretary's delegate may prescribe such
14 guidance, rules, or regulations as are necessary to carry
15 out the purposes of this section.
16 (f) EFFECTIVE DATE.-This section shall apply to
17 sales or exchanges occurring after December 31, 2007, in
18 taxable years ending after such date.
19 SEC. 302. SPECIAL RULES FOR TAX TREATMENT OF EXECU20
TIVE COMPENSATION OF EMPLOYERS PAR TICIPATING IN THE TROUBLED ASSETS RE LIEF PROGRAM.
23 (a) DENIAL OF DEDUCTION.-Subsection (m) of sec24
tion 162 of the Internal Revenue Code of 1986 is amended
25 by adding at the end the following new paragraph:
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1 ‘‘(5) SPECIAL RULE FOR APPLICATION TO EM2
PLOYERS PARTICIPATING IN THE TROUBLED ASSETS
3 RELIEF PROGRAM.-
4 ‘‘(A) IN GENERAL.-In the case of an ap5
plicable employer, no deduction shall be allowed
6 under this chapter-
7 ‘‘(i) in the case of executive remunera8
tion for any applicable taxable year which
9 is attributable to services performed by a
10 covered executive during such applicable
11 taxable year, to the extent that the amount
12 of such remuneration exceeds $500,000, or
13 ‘‘(ii) in the case of deferred deduction
14 executive remuneration for any taxable
15 year for services performed during any ap16
plicable taxable year by a covered execu17
tive, to the extent that the amount of such
18 remuneration exceeds $500,000 reduced
19 (but not below zero) by the sum of-
20 ‘‘(I) the executive remuneration
21 for such applicable taxable year, plus
22 ‘‘(II) the portion of the deferred
23 deduction executive remuneration for
24 such services which was taken into ac-
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1 count under this clause in a preceding
2 taxable year.
3 ‘‘(B) APPLICABLE EMPLOYER.-For pur4
poses of this paragraph-
5 ‘‘(i) IN GENERAL.-Except as pro6
vided in clause (ii), the term ‘applicable
7 employer' means any employer from whom
8 1 or more troubled assets are acquired
9 under a program established by the Sec10
retary under section 101(a) of the Emer11
gency Economic Stabilization Act of 2008
12 if the aggregate amount of the assets so
13 acquired for all taxable years exceeds
14 $300,000,000.
15 ‘‘(ii) DISREGARD OF CERTAIN ASSETS
16 SOLD THROUGH DIRECT PURCHASE.-If
17 the only sales of troubled assets by an em18
ployer under the program described in
19 clause (i) are through 1 or more direct
20 purchases (within the meaning of section
21 113(c) of the Emergency Economic Sta22
bilization Act of 2008), such assets shall
23 not be taken into account under clause (i)
24 in determining whether the employer is an
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1 applicable employer for purposes of this
2 paragraph.
3 ‘‘(iii) AGGREGATION RULES.-Two or
4 more persons who are treated as a single
5 employer under subsection (b) or (c) of
6 section 414 shall be treated as a single em7
ployer, except that in applying section
8 1563(a) for purposes of either such sub9
section, paragraphs (2) and (3) thereof
10 shall be disregarded.
11 ‘‘(C) APPLICABLE TAXABLE YEAR.-For
12 purposes of this paragraph, the term ‘applicable
13 taxable year' means, with respect to any em14
ployer-
15 ‘‘(i) the first taxable year of the em16
ployer-
17 ‘‘(I) which includes any portion
18 of the period during which the au19
thorities under section 101(a) of the
20 Emergency Economic Stabilization
21 Act of 2008 are in effect (determined
22 under section 120 thereof), and
23 ‘‘(II) in which the aggregate
24 amount of troubled assets acquired
25 from the employer during the taxable
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102
1 year pursuant to such authorities
2 (other than assets to which subpara3
graph (B)(ii) applies), when added to
4 the aggregate amount so acquired for
5 all preceding taxable years, exceeds
6 $300,000,000, and
7 ‘‘(ii) any subsequent taxable year
8 which includes any portion of such period.
9 ‘‘(D) COVERED EXECUTIVE.-For pur10
poses of this paragraph-
11 ‘‘(i) IN GENERAL.-The term ‘covered
12 executive' means, with respect to any ap13
plicable taxable year, any employee-
14 ‘‘(I) who, at any time during the
15 portion of the taxable year during
16 which the authorities under section
17 101(a) of the Emergency Economic
18 Stabilization Act of 2008 are in effect
19 (determined under section 120 there20
of), is the chief executive officer of the
21 applicable employer or the chief finan22
cial officer of the applicable employer,
23 or an individual acting in either such
24 capacity, or
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103
1 ‘‘(II) who is described in clause
2 (ii).
3 ‘‘(ii) HIGHEST COMPENSATED EM4
PLOYEES.-An employee is described in
5 this clause if the employee is 1 of the 3
6 highest compensated officers of the appli7
cable employer for the taxable year (other
8 than an individual described in clause
9 (i)(I)), determined-
10 ‘‘(I) on the basis of the share11
holder disclosure rules for compensa12
tion under the Securities Exchange
13 Act of 1934 (without regard to wheth14
er those rules apply to the employer),
15 and
16 ‘‘(II) by only taking into account
17 employees employed during the por18
tion of the taxable year described in
19 clause (i)(I).
20 ‘‘(iii) EMPLOYEE REMAINS COVERED
21 EXECUTIVE.-If an employee is a covered
22 executive with respect to an applicable em23
ployer for any applicable taxable year, such
24 employee shall be treated as a covered ex25
ecutive with respect to such employer for
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1 all subsequent applicable taxable years and
2 for all subsequent taxable years in which
3 deferred deduction executive remuneration
4 with respect to services performed in all
5 such applicable taxable years would (but
6 for this paragraph) be deductible.
7 ‘‘(E) EXECUTIVE REMUNERATION.-For
8 purposes of this paragraph, the term ‘executive
9 remuneration' means the applicable employee
10 remuneration of the covered executive, as deter11
mined under paragraph (4) without regard to
12 subparagraphs (B), (C), and (D) thereof. Such
13 term shall not include any deferred deduction
14 executive remuneration with respect to services
15 performed in a prior applicable taxable year.
16 ‘‘(F) DEFERRED DEDUCTION EXECUTIVE
17 REMUNERATION.-For purposes of this para18
graph, the term ‘deferred deduction executive
19 remuneration' means remuneration which would
20 be executive remuneration for services per21
formed in an applicable taxable year but for the
22 fact that the deduction under this chapter (de23
termined without regard to this paragraph) for
24 such remuneration is allowable in a subsequent
25 taxable year.
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105
1 ‘‘(G) COORDINATION.-Rules similar to
2 the rules of subparagraphs (F) and (G) of para3
graph (4) shall apply for purposes of this para4
graph.
5 ‘‘(H) REGULATORY AUTHORITY.-The Sec6
retary may prescribe such guidance, rules, or
7 regulations as are necessary to carry out the
8 purposes of this paragraph and the Emergency
9 Economic Stabilization Act of 2008, including
10 the extent to which this paragraph applies in
11 the case of any acquisition, merger, or reorga12
nization of an applicable employer.''.
13 (b) GOLDEN PARACHUTE RULE.-Section 280G of
14 the Internal Revenue Code of 1986 is amended-
15 (1) by redesignating subsection (e) as sub16
section (f), and
17 (2) by inserting after subsection (d) the fol18
lowing new subsection:
19 ‘‘(e) SPECIAL RULE FOR APPLICATION TO EMPLOY20
ERS PARTICIPATING IN THE TROUBLED ASSETS RELIEF
21 PROGRAM.-
22 ‘‘(1) IN GENERAL.-In the case of the sever23
ance from employment of a covered executive of an
24 applicable employer during the period during which
25 the authorities under section 101(a) of the Emer-
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106
1 gency Economic Stabilization Act of 2008 are in ef2
fect (determined under section 120 of such Act), this
3 section shall be applied to payments to such execu4
tive with the following modifications:
5 ‘‘(A) Any reference to a disqualified indi6
vidual (other than in subsection (c)) shall be
7 treated as a reference to a covered executive.
8 ‘‘(B) Any reference to a change described
9 in subsection (b)(2)(A)(i) shall be treated as a
10 reference to an applicable severance from em11
ployment of a covered executive, and any ref12
erence to a payment contingent on such a
13 change shall be treated as a reference to any
14 payment made during an applicable taxable
15 year of the employer on account of such appli16
cable severance from employment.
17 ‘‘(C) Any reference to a corporation shall
18 be treated as a reference to an applicable em19
ployer.
20 ‘‘(D) The provisions of subsections
21 (b)(2)(C), (b)(4), (b)(5), and (d)(5) shall not
22 apply.
23 ‘‘(2) DEFINITIONS AND SPECIAL RULES.-For
24 purposes of this subsection:
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1 ‘‘(A) DEFINITIONS.-Any term used in
2 this subsection which is also used in section
3 162(m)(5) shall have the meaning given such
4 term by such section.
5 ‘‘(B) APPLICABLE SEVERANCE FROM EM6
PLOYMENT.-The term ‘applicable severance
7 from employment' means any severance from
8 employment of a covered executive-
9 ‘‘(i) by reason of an involuntary ter10
mination of the executive by the employer,
11 or
12 ‘‘(ii) in connection with any bank13
ruptcy, liquidation, or receivership of the
14 employer.
15 ‘‘(C) COORDINATION AND OTHER
16 RULES.-
17 ‘‘(i) IN GENERAL.-If a payment
18 which is treated as a parachute payment
19 by reason of this subsection is also a para20
chute payment determined without regard
21 to this subsection, this subsection shall not
22 apply to such payment.
23 ‘‘(ii) REGULATORY AUTHORITY.-The
24 Secretary may prescribe such guidance,
25 rules, or regulations as are necessary-
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1 ‘‘(I) to carry out the purposes of
2 this subsection and the Emergency
3 Economic Stabilization Act of 2008,
4 including the extent to which this sub5
section applies in the case of any ac6
quisition, merger, or reorganization of
7 an applicable employer,
8 ‘‘(II) to apply this section and
9 section 4999 in cases where one or
10 more payments with respect to any in11
dividual are treated as parachute pay12
ments by reason of this subsection,
13 and other payments with respect to
14 such individual are treated as para15
chute payments under this section
16 without regard to this subsection, and
17 ‘‘(III) to prevent the avoidance of
18 the application of this section through
19 the mischaracterization of a severance
20 from employment as other than an
21 applicable severance from employ22
ment.''.
23 (c) EFFECTIVE DATES.-
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1 (1) IN GENERAL.-The amendment made by
2 subsection (a) shall apply to taxable years ending on
3 or after the date of the enactment of this Act.
4 (2) GOLDEN PARACHUTE RULE.-The amend5
ments made by subsection (b) shall apply to pay6
ments with respect to severances occurring during
7 the period during which the authorities under sec8
tion 101(a) of this Act are in effect (determined
9 under section 120 of this Act).
10 SEC. 303. EXTENSION OF EXCLUSION OF INCOME FROM
11 DISCHARGE OF QUALIFIED PRINCIPAL RESI12
DENCE INDEBTEDNESS.
13 (a) EXTENSION.-Subparagraph (E) of section
14 108(a)(1) of the Internal Revenue Code of 1986 is amend15
ed by striking ‘‘January 1, 2010'' and inserting ‘‘January
16 1, 2013''.
17 (b) EFFECTIVE DATE.-The amendment made by
18 this subsection shall apply to discharges of indebtedness
19 occurring on or after January 1, 2010.
◊
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Comments(2)