F:\JMW\FS110\EMERG\AMEND_001.XML AMENDMENT SENATE AMENDMENT TO THE TO H.R. 3997 lllllllll 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 fol- lowing: 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 CONTENTS.—The table of contents for OF 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 pro- ceeds. 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 tax- payers. Sec. 114. Market transparency. Sec. 115. Graduated authorization to purchase. Sec. 116. Oversight and audits. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00001 Fmt 6652 Sfmt 6211 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 2 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 Congres- sional 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 employ- ers 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 facili- 4 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 fa- 8 cilities are used in a manner that— f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 3 1 (A) protects home values, college funds, re- 2 tirement accounts, and life savings; 3 (B) preserves homeownership and pro- 4 motes jobs and economic growth; 5 (C) maximizes overall returns to the tax- 6 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 CON- COMMITTEES OF 13 GRESS.—The term ‘‘appropriate committees of Con- 14 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 Com- 18 mittee on Appropriations of the Senate; and 19 (B) the Committee on Financial Services, 20 the Committee on Ways and Means, the Com- 21 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. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 4 1 (3) CONGRESSIONAL SUPPORT AGENCIES.—The 2 term ‘‘congressional support agencies’’ means the 3 Congressional Budget Office and the Joint Com- 4 mittee on Taxation. 5 (4) CORPORATION.—The term ‘‘Corporation’’ 6 means the Federal Deposit Insurance Corporation. 7 (5) FINANCIAL INSTITUTION.—The term ‘‘fi- 8 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 pos- 13 session of the United States, the District of Colum- 14 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 Trou- 21 bled Assets Insurance Financing Fund established 22 under section 102. 23 (7) SECRETARY.—The term ‘‘Secretary’’ means 24 the Secretary of the Treasury. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 5 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 instru- 8 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 pur- 11 chase of which the Secretary determines pro- 12 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 Re- 16 serve System, determines the purchase of which 17 is necessary to promote financial market sta- 18 bility, but only upon transmittal of such deter- 19 mination, in writing, to the appropriate commit- 20 tees of Congress. TITLE I—TROUBLED ASSETS 21 RELIEF PROGRAM 22 23 SEC. 101. PURCHASES OF TROUBLED ASSETS. 24 (a) OFFICES; AUTHORITY.— f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 6 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 com- 4 mitments to purchase, troubled assets from any fi- 5 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 devel- 8 oped and published by the Secretary. 9 (2) COMMENCEMENT OF PROGRAM.—Establish- 10 ment of the policies and procedures and other simi- 11 lar administrative requirements imposed on the Sec- 12 retary by this Act are not intended to delay the com- 13 mencement of the TARP. 14 (3) ESTABLISHMENT OF TREASURY OFFICE.— 15 (A) IN GENERAL.—The Secretary shall im- 16 plement any program under paragraph (1) 17 through an Office of Financial Stability, estab- 18 lished for such purpose within the Office of Do- 19 mestic Finance of the Department of the Treas- 20 ury, which office shall be headed by an Assist- 21 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.— f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 7 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 insert- 5 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 author- 15 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 au- 19 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 finan- 25 cial agents of the Federal Government, and such in- f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 8 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 de- 6 signed to minimize cost to the taxpayers, estab- 7 lishing vehicles that are authorized, subject to super- 8 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 pe- 17 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. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 9 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 un- 4 just enrichment of financial institutions participating in 5 a program established under this section, including by pre- 6 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 as- 10 sets from a financial institution in conservatorship or re- 11 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 pro- 21 gram under this subsection, the Secretary may de- 22 velop guarantees of troubled assets and the associ- 23 ated premiums for such guarantees. Such guaran- 24 tees and premiums may be determined by category 25 or class of the troubled assets to be guaranteed. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 10 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 per- 5 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 estab- 12 lished under subsection (a). 13 (c) PREMIUMS.— 14 (1) IN GENERAL.—The Secretary shall collect 15 premiums from any financial institution partici- 16 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 pursu- 20 ant to paragraph (3). 21 (2) AUTHORITY TO BASE PREMIUMS ON PROD- 22 RISK.—In establishing any premium under UCT 23 paragraph (1), the Secretary may provide for vari- 24 ations in such rates according to the credit risk as- 25 sociated with the particular troubled asset that is f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 11 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 participa- 5 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 be- 16 tween the total of the outstanding guaranteed obli- 17 gations and the balance in the Troubled Assets In- 18 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 estab- 23 lished under paragraph (2). 24 (2) ESTABLISHMENT.—There is established a 25 Troubled Assets Insurance Financing Fund that f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 12 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 Treas- 4 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 im- 15 pact on the national debt; 16 (2) providing stability and preventing disrup- 17 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 di- 23 rect purchase from an individual financial institu- 24 tion, the long-term viability of the financial institu- f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 13 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 dis- 5 crimination based on size, geography, form of orga- 6 nization, or the size, type, and number of assets eli- 7 gible for purchase under this Act; 8 (6) providing financial assistance to financial 9 institutions, including those serving low- and mod- 10 erate-income populations and other underserved 11 communities, and that have assets less than 12 $1,000,000,000, that were well or adequately cap- 13 italized as of June 30, 2008, and that as a result 14 of the devaluation of the preferred government-spon- 15 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 Ameri- 24 cans by purchasing troubled assets held by or on be- 25 half of an eligible retirement plan described in clause f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 14 1 (iii), (iv), (v), or (vi) of section 402(c)(8)(B) of the 2 Internal Revenue Code of 1986, except that such au- 3 thority shall not extend to any compensation ar- 4 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 Fi- 11 nancial Stability Oversight Board, which shall be respon- 12 sible for— 13 (1) reviewing the exercise of authority under a 14 program developed in accordance with this Act, in- 15 cluding— 16 (A) policies implemented by the Secretary 17 and the Office of Financial Stability created 18 under sections 101 and 102, including the ap- 19 pointment of financial agents, the designation 20 of asset classes to be purchased, and plans for 21 the structure of vehicles used to purchase trou- 22 bled assets; and 23 (B) the effect of such actions in assisting 24 American families in preserving home owner- f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 15 1 ship, stabilizing financial markets, and pro- 2 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, misrepresen- 7 tation, or malfeasance to the Special Inspector Gen- 8 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 Over- 12 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 Fi- 17 nance Agency; 18 (4) the Chairman of the Securities Exchange 19 Commission; and 20 (5) the Secretary of Housing and Urban Devel- 21 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 Sec- 25 retary. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 16 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 en- 8 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 ac- 13 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 appro- 20 priate. 21 (g) REPORTS.—The Financial Stability Oversight 22 Board shall report to the appropriate committees of Con- 23 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). f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 17 1 (h) TERMINATION.—The Financial Stability Over- 2 sight Board, and its authority under this section, shall ter- 3 minate on the expiration of the 15-day period beginning 4 upon the later of— 5 (1) the date that the last troubled asset ac- 6 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 ex- 15 ercise of the authority granted in section 102, whichever 16 occurs first, and every 30-day period thereafter, the Sec- 17 retary shall report to the appropriate committees of Con- 18 gress, with respect to each such period— 19 (1) an overview of actions taken by the Sec- 20 retary, including the considerations required by sec- 21 tion 103 and the efforts under section 109; 22 (2) the actual obligation and expenditure of the 23 funds provided for administrative expenses by sec- 24 tion 118 during such period and the expected ex- f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 18 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, includ- 5 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 com- 14 pensation for financial agents; 15 (G) the valuation or pricing method used 16 for each transaction; and 17 (H) a description of the vehicles estab- 18 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, includ- 23 ing— 24 (A) a description of all of the transactions 25 made during the reporting period; f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 19 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 trans- 5 actions; 6 (D) a description of the impact of the exer- 7 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 bench- 12 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 sub- 17 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 in- 22 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 f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 20 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 over- 5 the-counter swaps market and government-sponsored en- 6 terprises, and providing recommendations for improve- 7 ment, including— 8 (1) recommendations regarding— 9 (A) whether any participants in the finan- 10 cial markets that are currently outside the reg- 11 ulatory system should become subject to the 12 regulatory system; and 13 (B) enhancement of the clearing and set- 14 tlement of over-the-counter swaps; and 15 (2) the rationale underlying such recommenda- 16 tions. 17 (d) SHARING INFORMATION.—Any report re- OF 18 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 ac- 24 quired by the Secretary under section 101 has been f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 21 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 AS- 6 SETS; REVENUES AND SALE PROCEEDS. 7 (a) EXERCISE RIGHTS.—The Secretary may, at OF 8 any time, exercise any rights received in connection with 9 troubled assets purchased under this Act. 10 (b) MANAGEMENT OF TROUBLED ASSETS.—The Sec- 11 retary shall have authority to manage troubled assets pur- 12 chased under this Act, including revenues and portfolio 13 risks therefrom. 14 (c) SALE TROUBLED ASSETS.—The Secretary OF 15 may, at any time, upon terms and conditions and at a 16 price determined by the Secretary, sell, or enter into secu- 17 rities loans, repurchase transactions, or other financial 18 transactions in regard to, any troubled asset purchased 19 under this Act. 20 (d) TRANSFER TREASURY.—Revenues of, and TO 21 proceeds from the sale of troubled assets purchased under 22 this Act, or from the sale, exercise, or surrender of war- 23 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. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00021 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 22 1 (e) APPLICATION SUNSET TROUBLED AS- OF TO 2 SETS.—The authority of the Secretary to hold any trou- 3 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 be- 6 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 deter- 15 mination, shall be submitted to the Committees on Over- 16 sight and Government Reform and Financial Services of 17 the House of Representatives and the Committees on 18 Homeland Security and Governmental Affairs and Bank- 19 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, pur- 23 suant to subsection (a), waived any provision of the Fed- 24 eral Acquisition Regulation pertaining to minority con- 25 tracting, the Secretary shall develop and implement stand- f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 23 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 minority- 6 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 consult- 11 ants. 12 (c) ELIGIBILITY FDIC.—Notwithstanding sub- OF 13 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 se- 17 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— f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00023 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 24 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 au- 20 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 Home- 23 owners Program under section 257 of the National Hous- 24 ing Act or other available programs to minimize fore- 25 closures. In addition, the Secretary may use loan guaran- f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 25 1 tees and credit enhancements to facilitate loan modifica- 2 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 securi- 6 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 Hous- 9 ing and Urban Development, and other Federal Govern- 10 ment entities that hold troubled assets to attempt to iden- 11 tify opportunities for the acquisition of classes of troubled 12 assets that will improve the ability of the Secretary to im- 13 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 residen- 17 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 main- 21 tain decent and safe conditions at the property. 22 (c) CONSENT REASONABLE LOAN MODIFICATION TO 23 REQUESTS.—Upon any request arising under existing in- 24 vestment contracts, the Secretary shall consent, where ap- 25 propriate, and considering net present value to the tax- f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 26 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 resi- 15 dential mortgage loans and mortgage-backed se- 16 curities held by any bridge depository institu- 17 tion pursuant to section 11(n) of the Federal 18 Deposit Insurance Act; and 19 (C) the Board, with respect to any mort- 20 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 con- 24 trolled in connection with open market oper- 25 ations under section 14 of the Federal Reserve f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 27 1 Act (12 U.S.C. 353), or as collateral for an ad- 2 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 Fed- 14 eral property manager holds, owns, or controls mort- 15 gages, mortgage backed securities, and other assets 16 secured by residential real estate, including multi- 17 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 con- 21 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. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 28 1 (2) MODIFICATIONS.—In the case of a residen- 2 tial mortgage loan, modifications made under para- 3 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, modifica- 9 tions made under paragraph (1) shall ensure— 10 (A) the continuation of any existing Fed- 11 eral, State, and local rental subsidies and pro- 12 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 CONGRESS.—Each Federal TO 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 num- 24 ber and types of loan modifications made and the f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 29 1 number of actual foreclosures occurring during the 2 reporting period in accordance with this section. 3 (6) CONSULTATION.—In developing the plan re- 4 quired by this subsection, the Federal property man- 5 agers shall consult with one another and, to the ex- 6 tent possible, utilize consistent approaches to imple- 7 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 sub- 15 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 appli- 21 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 f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 30 1 be subject to the executive compensation requirements of 2 subsections (b) and (c) and the provisions under the Inter- 3 nal Revenue Code of 1986, as provided under the amend- 4 ment by section 302, as applicable. 5 (b) DIRECT PURCHASES.— 6 (1) IN GENERAL.—Where the Secretary deter- 7 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 Sec- 11 retary receives a meaningful equity or debt position 12 in the financial institution as a result of the trans- 13 action, the Secretary shall require that the financial 14 institution meet appropriate standards for executive 15 compensation and corporate governance. The stand- 16 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 in- 19 stitution. 20 (2) CRITERIA.—The standards required under 21 this subsection shall include— 22 (A) limits on compensation that exclude in- 23 centives for senior executive officers of a finan- 24 cial institution to take unnecessary and exces- 25 sive risks that threaten the value of the finan- f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 31 1 cial institution during the period that the Sec- 2 retary holds an equity or debt position in the fi- 3 nancial institution; 4 (B) a provision for the recovery by the fi- 5 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 institu- 11 tion making any golden parachute payment to 12 its senior executive officer during the period 13 that the Secretary holds an equity or debt posi- 14 tion in the financial institution. 15 (3) DEFINITION.—For purposes of this section, 16 the term ‘‘senior executive officer’’ means an indi- 17 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 de- 23 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- f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 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 offi- 4 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 effec- 9 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 to- 18 ward the establishment of similar programs by such au- 19 thorities and central banks. To the extent that such for- 20 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 trou- 23 bled assets qualify for purchase under section 101. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 33 1 SEC. 113. MINIMIZATION OF LONG-TERM COSTS AND MAXI- 2 MIZATION OF BENEFITS FOR TAXPAYERS. 3 (a) LONG-TERM COSTS AND BENEFITS.— 4 (1) MINIMIZING NEGATIVE IMPACT.—The Sec- 5 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 as- 9 sets purchased, and the overall economic benefits of 10 the program, including economic benefits due to im- 11 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 re- 18 sale for and until such time as the Secretary 19 determines that the market is optimal for sell- 20 ing such assets, in order to maximize the value 21 for taxpayers; and 22 (B) sell such assets at a price that the Sec- 23 retary determines, based on available financial 24 analysis, will maximize return on investment for 25 the Federal Government. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 34 1 (3) PRIVATE PARTICIPATION.—The SECTOR 2 Secretary shall encourage the private sector to par- 3 ticipate in purchases of troubled assets, and to in- 4 vest in financial institutions, consistent with the pro- 5 visions of this section. 6 (b) USE MARKET MECHANISMS.—In making pur- OF 7 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 tax- 12 payer resources by using market mechanisms, in- 13 cluding auctions or reverse auctions, where appro- 14 priate. 15 (c) DIRECT PURCHASES.—If the Secretary deter- 16 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 indi- 19 vidual financial institution, the Secretary shall pursue ad- 20 ditional measures to ensure that prices paid for assets are 21 reasonable and reflect the underlying value of the asset. 22 (d) CONDITIONS PURCHASE AUTHORITY ON FOR 23 WARRANTS AND DEBT INSTRUMENTS.— 24 (1) IN GENERAL.—The Secretary may not pur- 25 chase, or make any commitment to purchase, any f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00034 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 35 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 insti- 9 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 in- 17 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 fol- 21 lowing requirements: 22 (A) PURPOSES.—Such terms and condi- 23 tions shall, at a minimum, be designed— 24 (i) to provide for reasonable participa- 25 tion by the Secretary, for the benefit of f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 36 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 in- 12 strument received under this subsection, based 13 on the conditions established under subpara- 14 graph (A). 15 (C) CONVERSION.—The warrant shall pro- 16 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 ex- 20 change or securities association, as described in 21 paragraph (1)(A), such warrants shall convert 22 to senior debt, or contain appropriate protec- 23 tions for the Secretary to ensure that the 24 Treasury is appropriately compensated for the f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00036 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 37 1 value of the warrant, in an amount determined 2 by the Secretary. 3 (D) PROTECTIONS.—Any warrant rep- 4 resenting securities to be received by the Sec- 5 retary under this subsection shall contain anti- 6 dilution provisions of the type employed in cap- 7 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, divi- 11 dends, and other distributions, mergers, and 12 other forms of reorganization or recapitaliza- 13 tion. 14 (E) EXERCISE PRICE.—The exercise price 15 for any warrant issued pursuant to this sub- 16 section shall be set by the Secretary, in the in- 17 terest of the taxpayers. 18 (F) SUFFICIENCY.—The financial institu- 19 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 suffi- 23 cient authorized shares, including preferred 24 shares that may carry dividend rights equal to 25 a multiple number of common shares, the Sec- f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00037 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 38 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 ad- 6 ditional shares cannot be obtained. 7 (3) EXCEPTIONS.— 8 (A) DE MINIMIS.—The Secretary shall es- 9 tablish de minimis exceptions to the require- 10 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 in- 19 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 f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 39 1 form, a description, amounts, and pricing of assets ac- 2 quired under this Act, within 2 business days of purchase, 3 trade, or other disposition. 4 (b) DISCLOSURE.—For each type of financial institu- 5 tions that sells troubled assets to the Secretary under this 6 Act, the Secretary shall determine whether the public dis- 7 closure required for such financial institutions with re- 8 spect to off-balance sheet transactions, derivatives instru- 9 ments, contingent liabilities, and similar sources of poten- 10 tial exposure is adequate to provide to the public sufficient 11 information as to the true financial position of the institu- 12 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 f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 40 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 trans- 5 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 resolu- 9 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 PURCHASE PRICES.—The OF 14 amount of troubled assets purchased by the Secretary out- 15 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 exer- 21 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 f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00040 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 41 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 addi- 4 tional amount. 5 (2) CONTENTS OF JOINT RESOLUTION.—For 6 the purpose of this section, the term ‘‘joint resolu- 7 tion’’ means only a joint resolution— 8 (A) that is introduced not later than 3 cal- 9 endar days after the date on which the report 10 of the plan of the Secretary referred to in sub- 11 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 obliga- 15 tions under the Emergency Economic Stabiliza- 16 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 REP- 24 RESENTATIVES.— f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00041 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 42 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 Mem- 4 bers of the House that, pursuant to this section, the 5 House shall convene not later than the second cal- 6 endar day after receipt of such report; 7 (2) REPORTING AND DISCHARGE.—Any com- 8 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 resolu- 13 tion within that period, the committee shall be dis- 14 charged from further consideration of the joint reso- 15 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 resolu- 19 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 mo- 25 tion shall not be in order after the House has dis- f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00042 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 43 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 dis- 6 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 consider- 10 ation are waived. The previous question shall be con- 11 sidered as ordered on the joint resolution to its pas- 12 sage without intervening motion except two hours of 13 debate equally divided and controlled by the pro- 14 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 lead- 21 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. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00043 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 44 1 (2) PLACEMENT ON CALENDAR.—Upon intro- 2 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 begin- 8 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 debat- 20 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, f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00044 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 45 1 the joint resolution shall remain the unfinished 2 business until disposed of. 3 (B) DEBATE.—Debate on the joint resolu- 4 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 lead- 8 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 res- 13 olution is not in order. 14 (C) VOTE ON PASSAGE.—The vote on pas- 15 sage shall occur immediately following the con- 16 clusion of the debate on a joint resolution, and 17 a single quorum call at the conclusion of the de- 18 bate if requested in accordance with the rules of 19 the Senate. 20 (D) RULINGS OF THE CHAIR ON PROCE- 21 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 re- 24 lating to a joint resolution shall be decided 25 without debate. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00045 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 46 1 (f) RULES RELATING SENATE HOUSE TO AND 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 fol- 7 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 f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00046 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 47 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-cal- 10 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 re- 16 ceives the veto message with respect to the 17 joint resolution shall be disregarded in 18 computing the 15-calendar day period de- 19 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. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00047 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 48 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, re- 6 spectively, and as such it is deemed a part of 7 the rules of each House, respectively, but appli- 8 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 constitu- 14 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 establish- 23 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 f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00048 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 49 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 es- 5 tablished by the Secretary under this Act. The sub- 6 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 tax- 16 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 trans- 22 action type, frequency, size, prices paid, and all 23 other relevant terms and conditions, and the 24 timing, duration and terms of any future com- 25 mitments to purchase assets. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00049 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 50 1 (D) Characteristics and disposition of ac- 2 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 in- 12 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 appli- 17 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 In- 21 stitutions Reform, Recovery, and Enhancement 22 Act of 1989 (12 U.S.C. 1811 note), women, 23 and minority- and women-owned businesses, in- 24 cluding ascertaining and reporting the total 25 amount of fees paid and other value delivered f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00050 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 51 1 by the TARP to all of its agents and represent- 2 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 OVER- 8 SIGHT.— 9 (A) GAO PRESENCE.—The Secretary shall 10 provide the Comptroller General with appro- 11 priate space and facilities in the Department of 12 the Treasury as necessary to facilitate oversight 13 of the TARP until the termination date estab- 14 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 com- 20 munications, or other papers, things, or prop- 21 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, employ- 24 ees, independent public accountants, financial 25 advisors, and other agents and representatives f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00051 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 52 1 of the TARP (as related to the agent or rep- 2 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 Gen- 5 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 ap- 12 propriate. 13 (C) REIMBURSEMENT COSTS.—The OF 14 Treasury shall reimburse the Government Ac- 15 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 appro- 19 priation account ‘‘Salaries and Expenses, Gov- 20 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 f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00052 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 53 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 ac- 13 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 Account- 17 ability Office for the full cost of any such audit as 18 billed therefor by the Comptroller General. Such re- 19 imbursements shall be credited to the appropriation 20 account ‘‘Salaries and Expenses, Government Ac- 21 countability Office’’ current when the payment is re- 22 ceived and remain available until expended. The fi- 23 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. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00053 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 54 1 (2) AUTHORITY.—The Comptroller General 2 may audit the programs, activities, receipts, expendi- 3 tures, and financial transactions of the TARP and 4 any agents and representatives of the TARP (as re- 5 lated to the agent or representative’s activities on 6 behalf of or under the authority of the TARP), in- 7 cluding vehicles established by the Secretary under 8 this Act. 9 (3) CORRECTIVE RESPONSES TO AUDIT PROB- 10 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 appro- 16 priate. 17 (c) INTERNAL CONTROL.— 18 (1) ESTABLISHMENT.—The TARP shall estab- 19 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 oper- 24 ations, including the use of the resources of the 25 TARP; f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00054 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 55 1 (B) the reliability of financial reporting, in- 2 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 an- 7 nual financial statement issued under this section, 8 the TARP shall— 9 (A) state the responsibility of management 10 for establishing and maintaining adequate in- 11 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 ac- 24 quired by the Secretary under section 101 has been f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00055 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 56 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 under- 7 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 Commis- 14 sion, the Secretary, and other Federal banking agen- 15 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 re- 19 quirements, and what process the Board used to de- 20 cide whether or not to use its authority; 21 (3) an analysis of any usage of the margin au- 22 thority by the Board; and 23 (4) recommendations for the Board and appro- 24 priate committees of Congress with respect to the 25 existing authority of the Board. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00056 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 57 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 INFORMATION.—Any reports re- OF 8 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 secu- 15 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 ex- 18 tended to include actions authorized by this Act, including 19 the payment of administrative expenses. Any funds ex- 20 pended or obligated by the Secretary for actions author- 21 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.— f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00057 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 58 1 (1) STANDARD.—Actions by the Secretary pur- 2 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 de- 17 nied by the court within 3 days of the date of 18 the request. 19 (C) PRELIMINARY INJUNCTION.—Any re- 20 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. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00058 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 59 1 (D) PERMANENT INJUNCTION.—Any re- 2 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 Proce- 10 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 con- 17 tract with the Secretary. 18 (4) STAYS.—Any injunction or other form of 19 equitable relief issued against the Secretary for ac- 20 tions pursuant to section 101, 102, 106, and 109, 21 shall be automatically stayed. The stay shall be lift- 22 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.— f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00059 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 60 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 au- 8 thority of the Secretary pursuant to this Act shall 9 not impair the claims or defenses that would other- 10 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 hold- 21 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, in- 24 cluding partial payments. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00060 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 61 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 Sec- 6 retary, upon submission of a written certification to Con- 7 gress, may extend the authority provided under this Act 8 to expire not later than 2 years from the date of enact- 9 ment of this Act. Such certification shall include a jus- 10 tification of why the extension is necessary to assist Amer- 11 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 TROU- 14 BLED ASSET RELIEF PROGRAM. 15 (a) OFFICE INSPECTOR GENERAL.—There is OF 16 hereby established the Office of the Special Inspector Gen- 17 eral for the Troubled Asset Relief Program. 18 (b) APPOINTMENT INSPECTOR GENERAL; RE- OF 19 MOVAL.—(1) The head of the Office of the Special Inspec- 20 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 In- 23 spector General’’), who shall be appointed by the Presi- 24 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 f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00061 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 62 1 ability in accounting, auditing, financial analysis, law, 2 management analysis, public administration, or investiga- 3 tions. 4 (3) The nomination of an individual as Special In- 5 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 pur- 14 sued by the United States in the nationwide administra- 15 tion of Federal law. 16 (6) The annual rate of basic pay of the Special In- 17 spector General shall be the annual rate of basic pay pro- 18 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- f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00062 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 63 1 gram established under section 102, including by col- 2 lecting and summarizing the following information: 3 (A) A description of the categories of troubled 4 assets purchased or otherwise procured by the Sec- 5 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 infor- 15 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 trou- 20 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. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00063 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 64 1 (2) The Special Inspector General shall establish, 2 maintain, and oversee such systems, procedures, and con- 3 trols as the Special Inspector General considers appro- 4 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 du- 7 ties and responsibilities of inspectors general under the In- 8 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, OTHER RE- AND 17 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 In- 20 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. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00064 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 65 1 (2) The Special Inspector General may obtain serv- 2 ices as authorized by section 3109 of title 5, United States 3 Code, at daily rates not to exceed the equivalent rate pre- 4 scribed for grade GS–15 of the General Schedule by sec- 5 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 nec- 10 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, agen- 13 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 informa- 16 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 f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00065 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 66 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 Inspec- 4 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 pur- 7 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 infor- 10 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 na- 17 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 estab- 22 lished under section 125. 23 (g) FUNDING.—(1) Of the amounts made available 24 to the Secretary of the Treasury under section 118, f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00066 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 67 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 Inspec- 6 tor General shall terminate on the later of— 7 (1) the date that the last troubled asset ac- 8 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 limita- 17 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 au- 24 thorized in section 102 and subsections (a), (b), and (c) 25 of section 106 shall be determined as provided under the f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00067 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 68 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 cur- 15 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 be- 23 fore ‘‘a ratio’’ the following: ‘‘, or thereafter is 24 likely to have, due to the terms of the mortgage 25 being reset,’’; f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00068 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 69 1 (B) in paragraph (2)(B), by inserting be- 2 fore the period at the end ‘‘(or such higher per- 3 centage as the Board determines, in the discre- 4 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 para- 9 graph,’’; and 10 (ii) by adding at the end the fol- 11 lowing: ‘‘Such actions may include making 12 payments, which shall be accepted as pay- 13 ment in full of all indebtedness under the 14 eligible mortgage, to any holder of an ex- 15 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 ‘‘ad- 19 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 sec- 24 tion referred to as the ‘‘Oversight Panel’’) as an establish- 25 ment in the legislative branch. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00069 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 70 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 au- 8 thority under this Act, including with re- 9 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 informa- 15 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 mini- 21 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- f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00070 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 71 1 retary of the authority under section 101(a) or 2 102, and every 30 days thereafter. 3 (2) SPECIAL RE- REPORT ON REGULATORY 4 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 regu- 7 latory system and its effectiveness at overseeing the 8 participants in the financial system and protecting 9 consumers, and providing recommendations for im- 10 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. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00071 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 72 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 equiv- 10 alent of the annual rate of basic pay for level I of 11 the Executive Schedule for each day (including trav- 12 el time) during which such member is engaged in 13 the actual performance of duties vested in the Com- 14 mission. 15 (3) PROHIBITION OF COMPENSATION OF FED- 16 EMPLOYEES.—Members of the Oversight ERAL 17 Panel who are full-time officers or employees of the 18 United States or Members of Congress may not re- 19 ceive additional pay, allowances, or benefits by rea- 20 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. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00072 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 73 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 Over- 15 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 depart- 20 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.— f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00073 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 74 1 (1) HEARINGS AND SESSIONS.—The Oversight 2 Panel may, for the purpose of carrying out this sec- 3 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 au- 9 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 Over- 13 sight Panel may secure directly from any depart- 14 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 re- 20 ceive and consider all reports required to be sub- 21 mitted to the Oversight Panel under this Act. 22 (f) TERMINATION.—The Oversight Panel shall termi- 23 nate 6 months after the termination date specified in sec- 24 tion 120. 25 (g) FUNDING FOR EXPENSES.— f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00074 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 75 1 (1) AUTHORIZATION APPROPRIATIONS.— OF 2 There is authorized to be appropriated to the Over- 3 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 contin- 7 gent fund of the Senate. 8 (2) REIMBURSEMENT AMOUNTS.—An OF 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 Over- 13 sight Panel, from funds made available to the Sec- 14 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 De- 21 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 IN- 25 SURED STATUS.— f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00075 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 76 1 ‘‘(A) PROHIBITION ADVER- ON FALSE 2 TISING AND MISUSE OF FDIC NAMES.—No per- 3 son may represent or imply that any deposit li- 4 ability, obligation, certificate, or share is in- 5 sured or guaranteed by the Corporation, if such 6 deposit liability, obligation, certificate, or share 7 is not insured or guaranteed by the Corpora- 8 tion— 9 ‘‘(i) by using the terms ‘Federal De- 10 posit’, ‘Federal Deposit Insurance’, ‘Fed- 11 eral Deposit Insurance Corporation’, any 12 combination of such terms, or the abbre- 13 viation ‘FDIC’ as part of the business 14 name or firm name of any person, includ- 15 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 adver- 20 tisement, solicitation, or other document. 21 ‘‘(B) PROHIBITION ON MISREPRESENTA- 22 TIONS OF INSURED STATUS.—No person may 23 knowingly misrepresent— 24 ‘‘(i) that any deposit liability, obliga- 25 tion, certificate, or share is insured, under f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00076 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 77 1 this Act, if such deposit liability, obliga- 2 tion, certificate, or share is not so insured; 3 or 4 ‘‘(ii) the extent to which or the man- 5 ner in which any deposit liability, obliga- 6 tion, certificate, or share is insured under 7 this Act, if such deposit liability, obliga- 8 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 para- 14 graph by any person for which the agency is the 15 appropriate Federal banking agency, or any in- 16 stitution-affiliated party thereof. 17 ‘‘(D) CORPORATION AUTHORITY IF THE 18 APPROPRIATE FEDERAL BANKING AGENCY 19 FAILS TO FOLLOW RECOMMENDATION.— 20 ‘‘(i) RECOMMENDATION.—The Cor- 21 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 f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00077 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 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 ap- 5 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 Corpora- 10 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 addi- 16 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 per- 23 son for which another agency is the 24 appropriate Federal banking agency f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00078 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 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 re- 8 quirements of this paragraph, the author- 9 ity of the Corporation under— 10 ‘‘(I) section 10(c) to conduct in- 11 vestigations; and 12 ‘‘(II) subsections (b), (c), (d) and 13 (i) of section 8 to conduct enforce- 14 ment actions. 15 ‘‘(F) OTHER PRESERVED.—No ACTIONS 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 para- 23 graph: 24 ‘‘(4) FALSE ADVERTISING OR MISUSE OF 25 NAMES TO INDICATE INSURED STATUS.— f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00079 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 80 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 pre- 15 vent any further, or to remedy any ex- 16 isting, violation. 17 ‘‘(ii) EFFECT OF ORDER.—Any tem- 18 porary order issued under this subpara- 19 graph shall take effect upon service. 20 ‘‘(B) EFFECTIVE PERIOD OF TEMPORARY 21 ORDER.—A temporary order issued under sub- 22 paragraph (A) shall remain effective and en- 23 forceable, pending the completion of an admin- 24 istrative proceeding pursuant to subsection f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00080 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 81 1 (b)(1) in connection with the notice of 2 charges— 3 ‘‘(i) until such time as the Corpora- 4 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 effec- 9 tive date of such order. 10 ‘‘(C) CIVIL MONEY PENALTIES.—Any vio- 11 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 in- 14 sured depository institution or an institution-af- 15 filiated party that is found to have violated this 16 paragraph, the Corporation or other appro- 17 priate Federal banking agency shall not be re- 18 quired to demonstrate any loss to an insured 19 depository institution.’’. 20 (c) UNENFORCEABILITY CERTAIN AGREE- OF 21 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 AGREE- 25 MENTS.—No provision contained in any existing or f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00081 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 82 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, in- 11 cluding any liabilities, assets, or interest therein, in 12 connection with any transaction in which the Cor- 13 poration exercises its authority under section 11 or 14 13, shall be enforceable against or impose any liabil- 15 ity on such person, as such enforcement or liability 16 shall be contrary to public policy.’’. 17 (d) TECHNICAL CONFORMING AMENDMENTS.— AND 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 ‘‘para- 23 graph (1)’’; and f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00082 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 83 1 (B) by striking ‘‘this subsection’’ the sec- 2 ond place that term appears and inserting 3 ‘‘paragraph (2)’’; and 4 (2) in the heading for subsection (a), by strik- 5 ing ‘‘INSURANCE LOGO.—’’ and inserting ‘‘REP- 6 DEPOSIT INSURANCE.—’’. RESENTATIONS OF 7 SEC. 127. COOPERATION WITH THE FBI. 8 Any Federal financial regulatory agency shall cooper- 9 ate with the Federal Bureau of Investigation and other 10 law enforcement agencies investigating fraud, misrepre- 11 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 Re- 15 lief Act of 2006 (12 U.S.C. 461 note) is amended by strik- 16 ing ‘‘October 1, 2011’’ and inserting ‘‘October 1, 2008’’. 17 SEC. 129. DISCLOSURES ON EXERCISE OF LOAN AUTHOR- 18 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, part- 23 nerships, and corporations) the Board shall provide to the 24 Committee on Banking, Housing, and Urban Affairs of f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00083 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 84 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 lend- 7 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 Fed- 18 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 confiden- 23 tial, upon the written request of the Chairman of the 24 Board, in which case it shall made available only to the f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00084 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 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 re- 10 spect to any such exercise of authority. 11 (e) SHARING INFORMATION.—Any reports re- OF 12 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 sec- 18 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 subpara- 22 graph (G), in the case’’; and 23 (2) by amending subparagraph (G) to read as 24 follows: f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00085 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 86 1 ‘‘(G)(i) In the case of an extension of cred- 2 it relating to a plan described in section 3 101(53D) of title 11, United States Code— 4 ‘‘(I) the requirements of subpara- 5 graphs (A) through (E) shall not apply; 6 and 7 ‘‘(II) a good faith estimate of the dis- 8 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 deliv- 12 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 applica- 19 tion (as provided under clause (i)(II)) contains 20 an annual percentage rate which is subse- 21 quently rendered inaccurate, within the mean- 22 ing of section 107(c), the creditor shall furnish 23 another disclosure statement at the time of set- 24 tlement or consummation of the transaction.’’. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00086 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 87 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 Dis- 4 closure Improvement Act of 2008 (Public Law 110-289). 5 SEC. 131. EXCHANGE STABILIZATION FUND REIMBURSE- 6 MENT. 7 (a) REIMBURSEMENT.—The Secretary shall reim- 8 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 USE EXCHANGE STABILIZATION ON OF 14 FUND.—The Secretary is prohibited from using the Ex- 15 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 AC- 19 COUNTING. 20 (a) AUTHORITY.—The Securities and Exchange Com- 21 mission shall have the authority under the securities laws 22 (as such term is defined in section 3(a)(47) of the Securi- 23 ties Exchange Act of 1934 (15 U.S.C. 78c(a)(47)) to sus- 24 pend, by rule, regulation, or order, the application of 25 Statement Number 157 of the Financial Accounting f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00087 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 88 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 Commis- 12 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 deposi- 17 tory institutions. Such a study shall consider at a min- 18 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 fail- 22 ures in 2008; 23 (3) the impact of such standards on the quality 24 of financial information available to investors; f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00088 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 89 1 (4) the process used by the Financial Account- 2 ing Standards Board in developing accounting 3 standards; 4 (5) the advisability and feasibility of modifica- 5 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 Commis- 9 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 deter- 12 minations of the Commission, including such administra- 13 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 in- 24 dustry an amount equal to the shortfall in order to ensure f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00089 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 90 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. TITLE II—BUDGET-RELATED 7 PROVISIONS 8 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 connec- 13 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 stat- 18 utes) for the purposes of assisting the committees of Con- 19 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 OFFICE MANAGEMENT BY THE OF AND 25 BUDGET.—Within 60 days of the first exercise of the au- f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00090 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 91 1 thority granted in section 101(a), but in no case later than 2 December 31, 2008, and semiannually thereafter, the Of- 3 fice of Management and Budget shall report to the Presi- 4 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 guar- 10 antees of the troubled assets, determined in accord- 11 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 com- 16 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 dif- 21 ferences between the Congressional Budget Office esti- 22 mates delivered in accordance with subsection (b) and 23 prior Office of Management and Budget estimates. 24 (b) REPORTS CONGRESSIONAL BUDGET OF- BY THE 25 FICE.—Within 45 days of receipt by the Congress of each f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00091 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 92 1 report from the Office of Management and Budget under 2 subsection (a), the Congressional Budget Office shall re- 3 port to the Congress the Congressional Budget Office’s 4 assessment of the report submitted by the Office of Man- 5 agement and Budget, including— 6 (1) the cost of the troubled assets and guaran- 7 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 du- 12 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 APPROPRIATIONS.—There OF 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 f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00092 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 93 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 pro- 4 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 Eco- 9 nomic Stabilization Act of 2008 using method- 10 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 Eco- 23 nomic Stabilization Act of 2008 calculated on a 24 cash basis; f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00093 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 94 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 Fed- 6 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 Sec- 11 retary using authority provided by the Emer- 12 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 re- 15 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 Com- 22 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. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00094 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 95 1 (c) EFFECTIVE DATE.—This section and the amend- 2 ment made by this section shall apply beginning with re- 3 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 emer- 7 gency requirement and necessary to meet emergency needs 8 pursuant to section 204(a) of S. Con. Res 21 (110th Con- 9 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 enforce- 12 ment. TITLE III—TAX PROVISIONS 13 14 SEC. 301. GAIN OR LOSS FROM SALE OR EXCHANGE OF 15 CERTAIN PREFERRED STOCK. 16 (a) IN GENERAL.—For purposes of the Internal Rev- 17 enue Code of 1986, gain or loss from the sale or exchange 18 of any applicable preferred stock by any applicable finan- 19 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 Asso- 25 ciation, established pursuant to the Federal Na- f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00095 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 96 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 Fed- 5 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 in- 9 stitution on September 6, 2008, or 10 (B) was sold or exchanged by the applica- 11 ble financial institution on or after January 1, 12 2008, and before September 7, 2008. 13 (c) APPLICABLE FINANCIAL INSTITUTION.—For pur- 14 poses of this section: 15 (1) IN GENERAL.—Except as provided in para- 16 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 com- 22 pany (as defined in section 3(w)(1) of the Fed- 23 eral Deposit Insurance Act (12 U.S.C. 24 1813(w)(1))). f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00096 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 97 1 (2) SPECIAL RULES FOR CERTAIN SALES.—In 2 the case of— 3 (A) a sale or exchange described in sub- 4 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 ex- 8 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 appli- 12 cable financial institution only if it was an enti- 13 ty described in subparagraph (A) or (B) of 14 paragraph (1) at all times during the period be- 15 ginning on September 6, 2008, and ending on 16 the date of the sale or exchange of the pre- 17 ferred stock. 18 (d) SPECIAL RULE CERTAIN PROPERTY NOT FOR 19 HELD SEPTEMBER 6, 2008.—The Secretary of the ON 20 Treasury or the Secretary’s delegate may extend the appli- 21 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 Sep- 25 tember 6, 2008, which the applicable financial insti- f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00097 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 98 1 tution did not hold on such date, but the basis of 2 which in the hands of the applicable financial insti- 3 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 part- 7 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 EXECU- 20 TIVE COMPENSATION OF EMPLOYERS PAR- 21 TICIPATING IN THE TROUBLED ASSETS RE- 22 LIEF PROGRAM. 23 (a) DENIAL DEDUCTION.—Subsection (m) of sec- OF 24 tion 162 of the Internal Revenue Code of 1986 is amended 25 by adding at the end the following new paragraph: f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00098 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 99 1 ‘‘(5) SPECIAL RULE FOR APPLICATION TO EM- 2 PLOYERS PARTICIPATING IN THE TROUBLED ASSETS 3 RELIEF PROGRAM.— 4 ‘‘(A) IN GENERAL.—In the case of an ap- 5 plicable employer, no deduction shall be allowed 6 under this chapter— 7 ‘‘(i) in the case of executive remunera- 8 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 ap- 16 plicable taxable year by a covered execu- 17 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- f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00099 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 100 1 count under this clause in a preceding 2 taxable year. 3 ‘‘(B) APPLICABLE EMPLOYER.—For pur- 4 poses of this paragraph— 5 ‘‘(i) IN GENERAL.—Except as pro- 6 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 Sec- 10 retary under section 101(a) of the Emer- 11 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 PURCHASE.—If SOLD THROUGH DIRECT 17 the only sales of troubled assets by an em- 18 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 Sta- 22 bilization Act of 2008), such assets shall 23 not be taken into account under clause (i) 24 in determining whether the employer is an f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00100 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 101 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 em- 7 ployer, except that in applying section 8 1563(a) for purposes of either such sub- 9 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 em- 14 ployer— 15 ‘‘(i) the first taxable year of the em- 16 ployer— 17 ‘‘(I) which includes any portion 18 of the period during which the au- 19 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 f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00101 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 102 1 year pursuant to such authorities 2 (other than assets to which subpara- 3 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 pur- 10 poses of this paragraph— 11 ‘‘(i) IN GENERAL.—The term ‘covered 12 executive’ means, with respect to any ap- 13 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 there- 20 of), is the chief executive officer of the 21 applicable employer or the chief finan- 22 cial officer of the applicable employer, 23 or an individual acting in either such 24 capacity, or f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00102 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 103 1 ‘‘(II) who is described in clause 2 (ii). 3 ‘‘(ii) HIGHEST EM- COMPENSATED 4 PLOYEES.—An employee is described in 5 this clause if the employee is 1 of the 3 6 highest compensated officers of the appli- 7 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 share- 11 holder disclosure rules for compensa- 12 tion under the Securities Exchange 13 Act of 1934 (without regard to wheth- 14 er those rules apply to the employer), 15 and 16 ‘‘(II) by only taking into account 17 employees employed during the por- 18 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 em- 23 ployer for any applicable taxable year, such 24 employee shall be treated as a covered ex- 25 ecutive with respect to such employer for f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00103 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 104 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 deter- 11 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 para- 18 graph, the term ‘deferred deduction executive 19 remuneration’ means remuneration which would 20 be executive remuneration for services per- 21 formed in an applicable taxable year but for the 22 fact that the deduction under this chapter (de- 23 termined without regard to this paragraph) for 24 such remuneration is allowable in a subsequent 25 taxable year. f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00104 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 105 1 ‘‘(G) COORDINATION.—Rules similar to 2 the rules of subparagraphs (F) and (G) of para- 3 graph (4) shall apply for purposes of this para- 4 graph. 5 ‘‘(H) REGULATORY AUTHORITY.—The Sec- 6 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 reorga- 12 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 sub- 16 section (f), and 17 (2) by inserting after subsection (d) the fol- 18 lowing new subsection: 19 ‘‘(e) SPECIAL RULE APPLICATION EMPLOY- FOR TO 20 PARTICIPATING TROUBLED ASSETS RELIEF ERS IN THE 21 PROGRAM.— 22 ‘‘(1) IN GENERAL.—In the case of the sever- 23 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- f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00105 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 106 1 gency Economic Stabilization Act of 2008 are in ef- 2 fect (determined under section 120 of such Act), this 3 section shall be applied to payments to such execu- 4 tive with the following modifications: 5 ‘‘(A) Any reference to a disqualified indi- 6 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 em- 11 ployment of a covered executive, and any ref- 12 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 appli- 16 cable severance from employment. 17 ‘‘(C) Any reference to a corporation shall 18 be treated as a reference to an applicable em- 19 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: f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00106 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 107 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 EM- 6 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 ter- 10 mination of the executive by the employer, 11 or 12 ‘‘(ii) in connection with any bank- 13 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 para- 20 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— f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00107 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 108 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 sub- 5 section applies in the case of any ac- 6 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 in- 11 dividual are treated as parachute pay- 12 ments by reason of this subsection, 13 and other payments with respect to 14 such individual are treated as para- 15 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 employ- 22 ment.’’. 23 (c) EFFECTIVE DATES.— f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00108 Fmt 6652 Sfmt 6201 C:\TEMP\AMEND_~1.XML HOLCPC F:\JMW\FS110\EMERG\AMEND_001.XML 109 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 amend- 5 ments made by subsection (b) shall apply to pay- 6 ments with respect to severances occurring during 7 the period during which the authorities under sec- 8 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 RESI- 12 DENCE INDEBTEDNESS. 13 (a) EXTENSION.—Subparagraph (E) of section 14 108(a)(1) of the Internal Revenue Code of 1986 is amend- 15 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. ◊ f:\V10\092808\092808.059.xml (415138|1) September 28, 2008 (9:10 p.m.) VerDate 0ct 09 2002 21:10 Sep 28, 2008 Jkt 000000 PO 00000 Frm 00109 Fmt 6652 Sfmt 6301 C:\TEMP\AMEND_~1.XML HOLCPC