[House Report 110-903]
[From the U.S. Government Publishing Office]
110th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 110-903
======================================================================
PROVIDING FOR CONSIDERATION OF THE SENATE AMENDMENT TO THE BILL (H.R.
3997) TO AMEND THE INTERNAL REVENUE CODE OF 1986 TO PROVIDE EARNINGS
ASSISTANCE AND TAX RELIEF TO MEMBERS OF THE UNIFORMED SERVICES,
VOLUNTEER FIREFIGHTERS, AND PEACE CORPS VOLUNTEERS, AND FOR OTHER
PURPOSES
_______
September 29 (legislative day, September 28)--Referred to the House
Calendar and ordered to be printed
_______
Ms. Slaughter, from the Committee on Rules, submitted the following
R E P O R T
[To accompany H. Res. 1517]
The Committee on Rules, having had under consideration
House Resolution 1517, by a nonrecord vote, report the same to
the House with the recommendation that the resolution be
adopted.
SUMMARY OF PROVISIONS OF THE RESOLUTION
The resolution provides for consideration of the Senate
amendment to the House amendment to the Senate amendment to
H.R. 3997, the Emergency Economic Stabilization Act of 2008.
The resolution makes in order a motion by the Chairman of the
Committee on Financial Services to concur in the Senate
amendment to the House amendment to the Senate amendment with
the text of the House amendment printed in this report. The
rule waives all points of order against the motion and provides
that the Senate amendment and the motion shall be considered as
read. The rule provides three hours of debate on the motion
equally divided and controlled by the chairman and ranking
minority member of the Committee on Financial Services. The
rule provides that the Chair may postpone further consideration
of the motion to a time designated by the Speaker.
EXPLANATION OF WAIVERS
The waiver of all points of order against the motion
includes a waiver of clause 10 of rule XXI regarding PAYGO and
a waiver of clause 7 of rule XVI regarding germaneness.
SUMMARY OF THE HOUSE AMENDMENT MADE IN ORDER
The amendment provides up to $700 billion to the Secretary
of the Treasury to buy mortgages and other assets that are
clogging the balance sheets of financial institutions and
making it difficult to access credit. The amendment also
establishes a program that would allow companies to insure
their troubled assets.
The amendment requires the Treasury to modify troubled
loans wherever possible to help American families keep their
homes. It also directs other Federal agencies to modify loans
that they own or control. Finally, it improves the HOPE for
Homeowners program by expanding eligibility and increasing the
tools available to the Department of Housing and Urban
Development to help more families keep their homes.
The amendment requires companies that sell some of their
bad assets to the government to provide warrants so that
taxpayers will benefit from any future growth these companies
may experience as a result of participation in this program.
The amendment also requires the President to submit legislation
that would cover any losses to taxpayers resulting from this
program from financial institutions.
In order to participate in this program, companies will
lose certain tax benefits and, in some cases, must limit
executive pay. In addition, the amendment limits ``golden
parachutes'' and requires that unearned bonuses be returned.
Rather than giving the Treasury all the funds at once, the
legislation gives the Treasury $250 billion immediately, then
requires the President to certify that additional funds are
needed ($100 billion, then $350 billion subject to
Congressional disapproval). The Treasury must report on the use
of the funds and the progress in addressing the crisis. The
amendment also establishes an Oversight Board and establishes a
special inspector general to protect against waste, fraud and
abuse.
TEXT OF THE HOUSE AMENDMENT MADE IN ORDER
In lieu of the matter proposed to be inserted by the
amendment of the Senate to the amendment of the House to the
amendment of the Senate, insert the following:
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Emergency
Economic Stabilization Act of 2008''.
(b) Table of Contents.--The table of contents for this Act is
as follows:
Sec. 1. Short title and table of contents.
Sec. 2. Purposes.
Sec. 3. Definitions.
TITLE I--TROUBLED ASSETS RELIEF PROGRAM
Sec. 101. Purchases of troubled assets.
Sec. 102. Insurance of troubled assets.
Sec. 103. Considerations.
Sec. 104. Financial Stability Oversight Board.
Sec. 105. Reports.
Sec. 106. Rights; management; sale of troubled assets; revenues and sale
proceeds.
Sec. 107. Contracting procedures.
Sec. 108. Conflicts of interest.
Sec. 109. Foreclosure mitigation efforts.
Sec. 110. Assistance to homeowners.
Sec. 111. Executive compensation and corporate governance.
Sec. 112. Coordination with foreign authorities and central banks.
Sec. 113. Minimization of long-term costs and maximization of benefits
for taxpayers.
Sec. 114. Market transparency.
Sec. 115. Graduated authorization to purchase.
Sec. 116. Oversight and audits.
Sec. 117. Study and report on margin authority.
Sec. 118. Funding.
Sec. 119. Judicial review and related matters.
Sec. 120. Termination of authority.
Sec. 121. Special Inspector General for the Troubled Asset Relief
Program.
Sec. 122. Increase in statutory limit on the public debt.
Sec. 123. Credit reform.
Sec. 124. HOPE for Homeowners amendments.
Sec. 125. Congressional Oversight Panel.
Sec. 126. FDIC authority.
Sec. 127. Cooperation with the FBI.
Sec. 128. Acceleration of effective date.
Sec. 129. Disclosures on exercise of loan authority.
Sec. 130. Technical corrections.
Sec. 131. Exchange Stabilization Fund reimbursement.
Sec. 132. Authority to suspend mark-to-market accounting.
Sec. 133. Study on mark-to-market accounting.
Sec. 134. Recoupment.
Sec. 135. Preservation of authority.
TITLE II--BUDGET-RELATED PROVISIONS
Sec. 201. Information for congressional support agencies.
Sec. 202. Reports by the Office of Management and Budget and the
Congressional Budget Office.
Sec. 203. Analysis in President's Budget.
Sec. 204. Emergency treatment.
TITLE III--TAX PROVISIONS
Sec. 301. Gain or loss from sale or exchange of certain preferred stock.
Sec. 302. Special rules for tax treatment of executive compensation of
employers participating in the troubled assets relief program.
Sec. 303. Extension of exclusion of income from discharge of qualified
principal residence indebtedness.
SEC. 2. PURPOSES.
The purposes of this Act are--
(1) to immediately provide authority and facilities
that the Secretary of the Treasury can use to restore
liquidity and stability to the financial system of the
United States; and
(2) to ensure that such authority and such facilities
are used in a manner that--
(A) protects home values, college funds,
retirement accounts, and life savings;
(B) preserves homeownership and promotes jobs
and economic growth;
(C) maximizes overall returns to the
taxpayers of the United States; and
(D) provides public accountability for the
exercise of such authority.
SEC. 3. DEFINITIONS.
For purposes of this Act, the following definitions shall
apply:
(1) Appropriate committees of congress.--The term
``appropriate committees of Congress'' means--
(A) the Committee on Banking, Housing, and
Urban Affairs, the Committee on Finance, the
Committee on the Budget, and the Committee on
Appropriations of the Senate; and
(B) the Committee on Financial Services, the
Committee on Ways and Means, the Committee on
the Budget, and the Committee on Appropriations
of the House of Representatives.
(2) Board.--The term ``Board'' means the Board of
Governors of the Federal Reserve System.
(3) Congressional support agencies.--The term
``congressional support agencies'' means the
Congressional Budget Office and the Joint Committee on
Taxation.
(4) Corporation.--The term ``Corporation'' means the
Federal Deposit Insurance Corporation.
(5) Financial institution.--The term ``financial
institution'' means any institution, including, but not
limited to, any bank, savings association, credit
union, security broker or dealer, or insurance company,
established and regulated under the laws of the United
States or any State, territory, or possession of the
United States, the District of Columbia, Commonwealth
of Puerto Rico, Commonwealth of Northern Mariana
Islands, Guam, American Samoa, or the United States
Virgin Islands, and having significant operations in
the United States, but excluding any central bank of,
or institution owned by, a foreign government.
(6) Fund.--The term ``Fund'' means the Troubled
Assets Insurance Financing Fund established under
section 102.
(7) Secretary.--The term ``Secretary'' means the
Secretary of the Treasury.
(8) TARP.--The term ``TARP'' means the Troubled Asset
Relief Program established under section 101.
(9) Troubled assets.--The term ``troubled assets''
means--
(A) residential or commercial mortgages and
any securities, obligations, or other
instruments that are based on or related to
such mortgages, that in each case was
originated or issued on or before March 14,
2008, the purchase of which the Secretary
determines promotes financial market stability;
and
(B) any other financial instrument that the
Secretary, after consultation with the Chairman
of the Board of Governors of the Federal
Reserve System, determines the purchase of
which is necessary to promote financial market
stability, but only upon transmittal of such
determination, in writing, to the appropriate
committees of Congress.
TITLE I--TROUBLED ASSETS RELIEF PROGRAM
SEC. 101. PURCHASES OF TROUBLED ASSETS.
(a) Offices; Authority.--
(1) Authority.--The Secretary is authorized to
establish the Troubled Asset Relief Program (or
``TARP'') to purchase, and to make and fund commitments
to purchase, troubled assets from any financial
institution, on such terms and conditions as are
determined by the Secretary, and in accordance with
this Act and the policies and procedures developed and
published by the Secretary.
(2) Commencement of program.--Establishment of the
policies and procedures and other similar
administrative requirements imposed on the Secretary by
this Act are not intended to delay the commencement of
the TARP.
(3) Establishment of treasury office.--
(A) In general.--The Secretary shall
implement any program under paragraph (1)
through an Office of Financial Stability,
established for such purpose within the Office
of Domestic Finance of the Department of the
Treasury, which office shall be headed by an
Assistant Secretary of the Treasury, appointed
by the President, by and with the advice and
consent of the Senate, except that an interim
Assistant Secretary may be appointed by the
Secretary.
(B) Clerical amendments.--
(i) Title 5.--Section 5315 of title
5, United States Code, is amended in
the item relating to Assistant
Secretaries of the Treasury, by
striking ``(9)'' and inserting
``(10)''.
(ii) Title 31.--Section 301(e) of
title 31, United States Code, is
amended by striking ``9'' and inserting
``10''.
(b) Consultation.--In exercising the authority under this
section, the Secretary shall consult with the Board, the
Corporation, the Comptroller of the Currency, the Director of
the Office of Thrift Supervision, and the Secretary of Housing
and Urban Development.
(c) Necessary Actions.--The Secretary is authorized to take
such actions as the Secretary deems necessary to carry out the
authorities in this Act, including, without limitation, the
following:
(1) The Secretary shall have direct hiring authority
with respect to the appointment of employees to
administer this Act.
(2) Entering into contracts, including contracts for
services authorized by section 3109 of title 5, United
States Code.
(3) Designating financial institutions as financial
agents of the Federal Government, and such institutions
shall perform all such reasonable duties related to
this Act as financial agents of the Federal Government
as may be required.
(4) In order to provide the Secretary with the
flexibility to manage troubled assets in a manner
designed to minimize cost to the taxpayers,
establishing vehicles that are authorized, subject to
supervision by the Secretary, to purchase, hold, and
sell troubled assets and issue obligations.
(5) Issuing such regulations and other guidance as
may be necessary or appropriate to define terms or
carry out the authorities or purposes of this Act.
(d) Program Guidelines.--Before the earlier of the end of the
2-business-day period beginning on the date of the first
purchase of troubled assets pursuant to the authority under
this section or the end of the 45-day period beginning on the
date of enactment of this Act, the Secretary shall publish
program guidelines, including the following:
(1) Mechanisms for purchasing troubled assets.
(2) Methods for pricing and valuing troubled assets.
(3) Procedures for selecting asset managers.
(4) Criteria for identifying troubled assets for
purchase.
(e) Preventing Unjust Enrichment.--In making purchases under
the authority of this Act, the Secretary shall take such steps
as may be necessary to prevent unjust enrichment of financial
institutions participating in a program established under this
section, including by preventing the sale of a troubled asset
to the Secretary at a higher price than what the seller paid to
purchase the asset. This subsection does not apply to troubled
assets acquired in a merger or acquisition, or a purchase of
assets from a financial institution in conservatorship or
receivership, or that has initiated bankruptcy proceedings
under title 11, United States Code.
SEC. 102. INSURANCE OF TROUBLED ASSETS.
(a) Authority.--
(1) In general.--If the Secretary establishes the
program authorized under section 101, then the
Secretary shall establish a program to guarantee
troubled assets originated or issued prior to March 14,
2008, including mortgage-backed securities.
(2) Guarantees.--In establishing any program under
this subsection, the Secretary may develop guarantees
of troubled assets and the associated premiums for such
guarantees. Such guarantees and premiums may be
determined by category or class of the troubled assets
to be guaranteed.
(3) Extent of guarantee.--Upon request of a financial
institution, the Secretary may guarantee the timely
payment of principal of, and interest on, troubled
assets in amounts not to exceed 100 percent of such
payments. Such guarantee may be on such terms and
conditions as are determined by the Secretary, provided
that such terms and conditions are consistent with the
purposes of this Act.
(b) Reports.--Not later than 90 days after the date of
enactment of this Act, the Secretary shall report to the
appropriate committees of Congress on the program established
under subsection (a).
(c) Premiums.--
(1) In general.--The Secretary shall collect premiums
from any financial institution participating in the
program established under subsection (a). Such premiums
shall be in an amount that the Secretary determines
necessary to meet the purposes of this Act and to
provide sufficient reserves pursuant to paragraph (3).
(2) Authority to base premiums on product risk.--In
establishing any premium under paragraph (1), the
Secretary may provide for variations in such rates
according to the credit risk associated with the
particular troubled asset that is being guaranteed. The
Secretary shall publish the methodology for setting the
premium for a class of troubled assets together with an
explanation of the appropriateness of the class of
assets for participation in the program established
under this section. The methodology shall ensure that
the premium is consistent with paragraph (3).
(3) Minimum level.--The premiums referred to in
paragraph (1) shall be set by the Secretary at a level
necessary to create reserves sufficient to meet
anticipated claims, based on an actuarial analysis, and
to ensure that taxpayers are fully protected.
(4) Adjustment to purchase authority.--The purchase
authority limit in section 115 shall be reduced by an
amount equal to the difference between the total of the
outstanding guaranteed obligations and the balance in
the Troubled Assets Insurance Financing Fund.
(d) Troubled Assets Insurance Financing Fund.--
(1) Deposits.--The Secretary shall deposit fees
collected under this section into the Fund established
under paragraph (2).
(2) Establishment.--There is established a Troubled
Assets Insurance Financing Fund that shall consist of
the amounts collected pursuant to paragraph (1), and
any balance in such fund shall be invested by the
Secretary in United States Treasury securities, or kept
in cash on hand or on deposit, as necessary.
(3) Payments from fund.--The Secretary shall make
payments from amounts deposited in the Fund to fulfill
obligations of the guarantees provided to financial
institutions under subsection (a).
SEC. 103. CONSIDERATIONS.
In exercising the authorities granted in this Act, the
Secretary shall take into consideration--
(1) protecting the interests of taxpayers by
maximizing overall returns and minimizing the impact on
the national debt;
(2) providing stability and preventing disruption to
financial markets in order to limit the impact on the
economy and protect American jobs, savings, and
retirement security;
(3) the need to help families keep their homes and to
stabilize communities;
(4) in determining whether to engage in a direct
purchase from an individual financial institution, the
long-term viability of the financial institution in
determining whether the purchase represents the most
efficient use of funds under this Act;
(5) ensuring that all financial institutions are
eligible to participate in the program, without
discrimination based on size, geography, form of
organization, or the size, type, and number of assets
eligible for purchase under this Act;
(6) providing financial assistance to financial
institutions, including those serving low- and
moderate-income populations and other underserved
communities, and that have assets less than
$1,000,000,000, that were well or adequately
capitalized as of June 30, 2008, and that as a result
of the devaluation of the preferred government-
sponsored enterprises stock will drop one or more
capital levels, in a manner sufficient to restore the
financial institutions to at least an adequately
capitalized level;
(7) the need to ensure stability for United States
public instrumentalities, such as counties and cities,
that may have suffered significant increased costs or
losses in the current market turmoil;
(8) protecting the retirement security of Americans
by purchasing troubled assets held by or on behalf of
an eligible retirement plan described in clause (iii),
(iv), (v), or (vi) of section 402(c)(8)(B) of the
Internal Revenue Code of 1986, except that such
authority shall not extend to any compensation
arrangements subject to section 409A of such Code; and
(9) the utility of purchasing other real estate owned
and instruments backed by mortgages on multifamily
properties.
SEC. 104. FINANCIAL STABILITY OVERSIGHT BOARD.
(a) Establishment.--There is established the Financial
Stability Oversight Board, which shall be responsible for--
(1) reviewing the exercise of authority under a
program developed in accordance with this Act,
including--
(A) policies implemented by the Secretary and
the Office of Financial Stability created under
sections 101 and 102, including the appointment
of financial agents, the designation of asset
classes to be purchased, and plans for the
structure of vehicles used to purchase troubled
assets; and
(B) the effect of such actions in assisting
American families in preserving home ownership,
stabilizing financial markets, and protecting
taxpayers;
(2) making recommendations, as appropriate, to the
Secretary regarding use of the authority under this
Act; and
(3) reporting any suspected fraud, misrepresentation,
or malfeasance to the Special Inspector General for the
Troubled Assets Relief Program or the Attorney General
of the United States, consistent with section 535(b) of
title 28, United States Code.
(b) Membership.--The Financial Stability Oversight Board
shall be comprised of--
(1) the Chairman of the Board of Governors of the
Federal Reserve System;
(2) the Secretary;
(3) the Director of the Federal Housing Finance
Agency;
(4) the Chairman of the Securities Exchange
Commission; and
(5) the Secretary of Housing and Urban Development.
(c) Chairperson.--The chairperson of the Financial Stability
Oversight Board shall be elected by the members of the Board
from among the members other than the Secretary.
(d) Meetings.--The Financial Stability Oversight Board shall
meet 2 weeks after the first exercise of the purchase authority
of the Secretary under this Act, and monthly thereafter.
(e) Additional Authorities.--In addition to the
responsibilities described in subsection (a), the Financial
Stability Oversight Board shall have the authority to ensure
that the policies implemented by the Secretary are--
(1) in accordance with the purposes of this Act;
(2) in the economic interests of the United States;
and
(3) consistent with protecting taxpayers, in
accordance with section 113(a).
(f) Credit Review Committee.--The Financial Stability
Oversight Board may appoint a credit review committee for the
purpose of evaluating the exercise of the purchase authority
provided under this Act and the assets acquired through the
exercise of such authority, as the Financial Stability
Oversight Board determines appropriate.
(g) Reports.--The Financial Stability Oversight Board shall
report to the appropriate committees of Congress and the
Congressional Oversight Panel established under section 125,
not less frequently than quarterly, on the matters described
under subsection (a)(1).
(h) Termination.--The Financial Stability Oversight Board,
and its authority under this section, shall terminate on the
expiration of the 15-day period beginning upon the later of--
(1) the date that the last troubled asset acquired by
the Secretary under section 101 has been sold or
transferred out of the ownership or control of the
Federal Government; or
(2) the date of expiration of the last insurance
contract issued under section 102.
SEC. 105. REPORTS.
(a) In General.--Before the expiration of the 60-day period
beginning on the date of the first exercise of the authority
granted in section 101(a), or of the first exercise of the
authority granted in section 102, whichever occurs first, and
every 30-day period thereafter, the Secretary shall report to
the appropriate committees of Congress, with respect to each
such period--
(1) an overview of actions taken by the Secretary,
including the considerations required by section 103
and the efforts under section 109;
(2) the actual obligation and expenditure of the
funds provided for administrative expenses by section
118 during such period and the expected expenditure of
such funds in the subsequent period; and
(3) a detailed financial statement with respect to
the exercise of authority under this Act, including--
(A) all agreements made or renewed;
(B) all insurance contracts entered into
pursuant to section 102;
(C) all transactions occurring during such
period, including the types of parties
involved;
(D) the nature of the assets purchased;
(E) all projected costs and liabilities;
(F) operating expenses, including
compensation for financial agents;
(G) the valuation or pricing method used for
each transaction; and
(H) a description of the vehicles established
to exercise such authority.
(b) Tranche Reports to Congress.--
(1) Reports.--The Secretary shall provide to the
appropriate committees of Congress, at the times
specified in paragraph (2), a written report,
including--
(A) a description of all of the transactions
made during the reporting period;
(B) a description of the pricing mechanism
for the transactions;
(C) a justification of the price paid for and
other financial terms associated with the
transactions;
(D) a description of the impact of the
exercise of such authority on the financial
system, supported, to the extent possible, by
specific data;
(E) a description of challenges that remain
in the financial system, including any
benchmarks yet to be achieved; and
(F) an estimate of additional actions under
the authority provided under this Act that may
be necessary to address such challenges.
(2) Timing.--The report required by this subsection
shall be submitted not later than 7 days after the date
on which commitments to purchase troubled assets under
the authorities provided in this Act first reach an
aggregate of $50,000,000,000 and not later than 7 days
after each $50,000,000,000 interval of such commitments
is reached thereafter.
(c) Regulatory Modernization Report.--The Secretary shall
review the current state of the financial markets and the
regulatory system and submit a written report to the
appropriate committees of Congress not later than April 30,
2009, analyzing the current state of the regulatory system and
its effectiveness at overseeing the participants in the
financial markets, including the over-the-counter swaps market
and government-sponsored enterprises, and providing
recommendations for improvement, including--
(1) recommendations regarding--
(A) whether any participants in the financial
markets that are currently outside the
regulatory system should become subject to the
regulatory system; and
(B) enhancement of the clearing and
settlement of over-the-counter swaps; and
(2) the rationale underlying such recommendations.
(d) Sharing of Information.--Any report required under this
section shall also be submitted to the Congressional Oversight
Panel established under section 125.
(e) Sunset.--The reporting requirements under this section
shall terminate on the later of--
(1) the date that the last troubled asset acquired by
the Secretary under section 101 has been sold or
transferred out of the ownership or control of the
Federal Government; or
(2) the date of expiration of the last insurance
contract issued under section 102.
SEC. 106. RIGHTS; MANAGEMENT; SALE OF TROUBLED ASSETS; REVENUES AND
SALE PROCEEDS.
(a) Exercise of Rights.--The Secretary may, at any time,
exercise any rights received in connection with troubled assets
purchased under this Act.
(b) Management of Troubled Assets.--The Secretary shall have
authority to manage troubled assets purchased under this Act,
including revenues and portfolio risks therefrom.
(c) Sale of Troubled Assets.--The Secretary may, at any time,
upon terms and conditions and at a price determined by the
Secretary, sell, or enter into securities loans, repurchase
transactions, or other financial transactions in regard to, any
troubled asset purchased under this Act.
(d) Transfer to Treasury.--Revenues of, and proceeds from the
sale of troubled assets purchased under this Act, or from the
sale, exercise, or surrender of warrants or senior debt
instruments acquired under section 113 shall be paid into the
general fund of the Treasury for reduction of the public debt.
(e) Application of Sunset to Troubled Assets.--The authority
of the Secretary to hold any troubled asset purchased under
this Act before the termination date in section 120, or to
purchase or fund the purchase of a troubled asset under a
commitment entered into before the termination date in section
120, is not subject to the provisions of section 120.
SEC. 107. CONTRACTING PROCEDURES.
(a) Streamlined Process.--For purposes of this Act, the
Secretary may waive specific provisions of the Federal
Acquisition Regulation upon a determination that urgent and
compelling circumstances make compliance with such provisions
contrary to the public interest. Any such determination, and
the justification for such determination, shall be submitted to
the Committees on Oversight and Government Reform and Financial
Services of the House of Representatives and the Committees on
Homeland Security and Governmental Affairs and Banking,
Housing, and Urban Affairs of the Senate within 7 days.
(b) Additional Contracting Requirements.--In any solicitation
or contract where the Secretary has, pursuant to subsection
(a), waived any provision of the Federal Acquisition Regulation
pertaining to minority contracting, the Secretary shall develop
and implement standards and procedures to ensure, to the
maximum extent practicable, the inclusion and utilization of
minorities (as such term is defined in section 1204(c) of the
Financial Institutions Reform, Recovery, and Enforcement Act of
1989 (12 U.S.C. 1811 note)) and women, and minority- and women-
owned businesses (as such terms are defined in section
21A(r)(4) of the Federal Home Loan Bank Act (12 U.S.C.
1441a(r)(4)), in that solicitation or contract, including
contracts to asset managers, servicers, property managers, and
other service providers or expert consultants.
(c) Eligibility of FDIC.--Notwithstanding subsections (a) and
(b), the Corporation--
(1) shall be eligible for, and shall be considered
in, the selection of asset managers for residential
mortgage loans and residential mortgage-backed
securities; and
(2) shall be reimbursed by the Secretary for any
services provided.
SEC. 108. CONFLICTS OF INTEREST.
(a) Standards Required.--The Secretary shall issue
regulations or guidelines necessary to address and manage or to
prohibit conflicts of interest that may arise in connection
with the administration and execution of the authorities
provided under this Act, including--
(1) conflicts arising in the selection or hiring of
contractors or advisors, including asset managers;
(2) the purchase of troubled assets;
(3) the management of the troubled assets held;
(4) post-employment restrictions on employees; and
(5) any other potential conflict of interest, as the
Secretary deems necessary or appropriate in the public
interest.
(b) Timing.--Regulations or guidelines required by this
section shall be issued as soon as practicable after the date
of enactment of this Act.
SEC. 109. FORECLOSURE MITIGATION EFFORTS.
(a) Residential Mortgage Loan Servicing Standards.--To the
extent that the Secretary acquires mortgages, mortgage backed
securities, and other assets secured by residential real
estate, including multifamily housing, the Secretary shall
implement a plan that seeks to maximize assistance for
homeowners and use the authority of the Secretary to encourage
the servicers of the underlying mortgages, considering net
present value to the taxpayer, to take advantage of the HOPE
for Homeowners Program under section 257 of the National
Housing Act or other available programs to minimize
foreclosures. In addition, the Secretary may use loan
guarantees and credit enhancements to facilitate loan
modifications to prevent avoidable foreclosures.
(b) Coordination.--The Secretary shall coordinate with the
Corporation, the Board (with respect to any mortgage or
mortgage-backed securities or pool of securities held, owned,
or controlled by or on behalf of a Federal reserve bank, as
provided in section 110(a)(1)(C)), the Federal Housing Finance
Agency, the Secretary of Housing and Urban Development, and
other Federal Government entities that hold troubled assets to
attempt to identify opportunities for the acquisition of
classes of troubled assets that will improve the ability of the
Secretary to improve the loan modification and restructuring
process and, where permissible, to permit bona fide tenants who
are current on their rent to remain in their homes under the
terms of the lease. In the case of a mortgage on a residential
rental property, the plan required under this section shall
include protecting Federal, State, and local rental subsidies
and protections, and ensuring any modification takes into
account the need for operating funds to maintain decent and
safe conditions at the property.
(c) Consent to Reasonable Loan Modification Requests.--Upon
any request arising under existing investment contracts, the
Secretary shall consent, where appropriate, and considering net
present value to the taxpayer, to reasonable requests for loss
mitigation measures, including term extensions, rate
reductions, principal write downs, increases in the proportion
of loans within a trust or other structure allowed to be
modified, or removal of other limitation on modifications.
SEC. 110. ASSISTANCE TO HOMEOWNERS.
(a) Definitions.--As used in this section--
(1) the term ``Federal property manager'' means--
(A) the Federal Housing Finance Agency, in
its capacity as conservator of the Federal
National Mortgage Association and the Federal
Home Loan Mortgage Corporation;
(B) the Corporation, with respect to
residential mortgage loans and mortgage-backed
securities held by any bridge depository
institution pursuant to section 11(n) of the
Federal Deposit Insurance Act; and
(C) the Board, with respect to any mortgage
or mortgage-backed securities or pool of
securities held, owned, or controlled by or on
behalf of a Federal reserve bank, other than
mortgages or securities held, owned, or
controlled in connection with open market
operations under section 14 of the Federal
Reserve Act (12 U.S.C. 353), or as collateral
for an advance or discount that is not in
default;
(2) the term ``consumer'' has the same meaning as in
section 103 of the Truth in Lending Act (15 U.S.C.
1602);
(3) the term ``insured depository institution'' has
the same meaning as in section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813); and
(4) the term ``servicer'' has the same meaning as in
section 6(i)(2) of the Real Estate Settlement
Procedures Act of 1974 (12 U.S.C. 2605(i)(2)).
(b) Homeowner Assistance by Agencies.--
(1) In general.--To the extent that the Federal
property manager holds, owns, or controls mortgages,
mortgage backed securities, and other assets secured by
residential real estate, including multifamily housing,
the Federal property manager shall implement a plan
that seeks to maximize assistance for homeowners and
use its authority to encourage the servicers of the
underlying mortgages, and considering net present value
to the taxpayer, to take advantage of the HOPE for
Homeowners Program under section 257 of the National
Housing Act or other available programs to minimize
foreclosures.
(2) Modifications.--In the case of a residential
mortgage loan, modifications made under paragraph (1)
may include--
(A) reduction in interest rates;
(B) reduction of loan principal; and
(C) other similar modifications.
(3) Tenant protections.--In the case of mortgages on
residential rental properties, modifications made under
paragraph (1) shall ensure--
(A) the continuation of any existing Federal,
State, and local rental subsidies and
protections; and
(B) that modifications take into account the
need for operating funds to maintain decent and
safe conditions at the property.
(4) Timing.--Each Federal property manager shall
develop and begin implementation of the plan required
by this subsection not later than 60 days after the
date of enactment of this Act.
(5) Reports to congress.--Each Federal property
manager shall, 60 days after the date of enactment of
this Act and every 30 days thereafter, report to
Congress specific information on the number and types
of loan modifications made and the number of actual
foreclosures occurring during the reporting period in
accordance with this section.
(6) Consultation.--In developing the plan required by
this subsection, the Federal property managers shall
consult with one another and, to the extent possible,
utilize consistent approaches to implement the
requirements of this subsection.
(c) Actions With Respect to Servicers.--In any case in which
a Federal property manager is not the owner of a residential
mortgage loan, but holds an interest in obligations or pools of
obligations secured by residential mortgage loans, the Federal
property manager shall--
(1) encourage implementation by the loan servicers of
loan modifications developed under subsection (b); and
(2) assist in facilitating any such modifications, to
the extent possible.
(d) Limitation.--The requirements of this section shall not
supersede any other duty or requirement imposed on the Federal
property managers under otherwise applicable law.
SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE.
(a) Applicability.--Any financial institution that sells
troubled assets to the Secretary under this Act shall be
subject to the executive compensation requirements of
subsections (b) and (c) and the provisions under the Internal
Revenue Code of 1986, as provided under the amendment by
section 302, as applicable.
(b) Direct Purchases.--
(1) In general.--Where the Secretary determines that
the purposes of this Act are best met through direct
purchases of troubled assets from an individual
financial institution where no bidding process or
market prices are available, and the Secretary receives
a meaningful equity or debt position in the financial
institution as a result of the transaction, the
Secretary shall require that the financial institution
meet appropriate standards for executive compensation
and corporate governance. The standards required under
this subsection shall be effective for the duration of
the period that the Secretary holds an equity or debt
position in the financial institution.
(2) Criteria.--The standards required under this
subsection shall include--
(A) limits on compensation that exclude
incentives for senior executive officers of a
financial institution to take unnecessary and
excessive risks that threaten the value of the
financial institution during the period that
the Secretary holds an equity or debt position
in the financial institution;
(B) a provision for the recovery by the
financial institution of any bonus or incentive
compensation paid to a senior executive officer
based on statements of earnings, gains, or
other criteria that are later proven to be
materially inaccurate; and
(C) a prohibition on the financial
institution making any golden parachute payment
to its senior executive officer during the
period that the Secretary holds an equity or
debt position in the financial institution.
(3) Definition.--For purposes of this section, the
term ``senior executive officer'' means an individual
who is one of the top 5 highly paid executives of a
public company, whose compensation is required to be
disclosed pursuant to the Securities Exchange Act of
1934, and any regulations issued thereunder, and non-
public company counterparts.
(c) Auction Purchases.--Where the Secretary determines that
the purposes of this Act are best met through auction purchases
of troubled assets, and only where such purchases per financial
institution in the aggregate exceed $300,000,000 (including
direct purchases), the Secretary shall prohibit, for such
financial institution, any new employment contract with a
senior executive officer that provides a golden parachute in
the event of an involuntary termination, bankruptcy filing,
insolvency, or receivership. The Secretary shall issue guidance
to carry out this paragraph not later than 2 months after the
date of enactment of this Act, and such guidance shall be
effective upon issuance.
(d) Sunset.--The provisions of subsection (c) shall apply
only to arrangements entered into during the period during
which the authorities under section 101(a) are in effect, as
determined under section 120.
SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES AND CENTRAL BANKS.
The Secretary shall coordinate, as appropriate, with foreign
financial authorities and central banks to work toward the
establishment of similar programs by such authorities and
central banks. To the extent that such foreign financial
authorities or banks hold troubled assets as a result of
extending financing to financial institutions that have failed
or defaulted on such financing, such troubled assets qualify
for purchase under section 101.
SEC. 113. MINIMIZATION OF LONG-TERM COSTS AND MAXIMIZATION OF BENEFITS
FOR TAXPAYERS.
(a) Long-Term Costs and Benefits.--
(1) Minimizing negative impact.--The Secretary shall
use the authority under this Act in a manner that will
minimize any potential long-term negative impact on the
taxpayer, taking into account the direct outlays,
potential long-term returns on assets purchased, and
the overall economic benefits of the program, including
economic benefits due to improvements in economic
activity and the availability of credit, the impact on
the savings and pensions of individuals, and reductions
in losses to the Federal Government.
(2) Authority.--In carrying out paragraph (1), the
Secretary shall--
(A) hold the assets to maturity or for resale
for and until such time as the Secretary
determines that the market is optimal for
selling such assets, in order to maximize the
value for taxpayers; and
(B) sell such assets at a price that the
Secretary determines, based on available
financial analysis, will maximize return on
investment for the Federal Government.
(3) Private sector participation.--The Secretary
shall encourage the private sector to participate in
purchases of troubled assets, and to invest in
financial institutions, consistent with the provisions
of this section.
(b) Use of Market Mechanisms.--In making purchases under this
Act, the Secretary shall--
(1) make such purchases at the lowest price that the
Secretary determines to be consistent with the purposes
of this Act; and
(2) maximize the efficiency of the use of taxpayer
resources by using market mechanisms, including
auctions or reverse auctions, where appropriate.
(c) Direct Purchases.--If the Secretary determines that use
of a market mechanism under subsection (b) is not feasible or
appropriate, and the purposes of the Act are best met through
direct purchases from an individual financial institution, the
Secretary shall pursue additional measures to ensure that
prices paid for assets are reasonable and reflect the
underlying value of the asset.
(d) Conditions on Purchase Authority for Warrants and Debt
Instruments.--
(1) In general.--The Secretary may not purchase, or
make any commitment to purchase, any troubled asset
under the authority of this Act, unless the Secretary
receives from the financial institution from which such
assets are to be purchased--
(A) in the case of a financial institution,
the securities of which are traded on a
national securities exchange, a warrant giving
the right to the Secretary to receive nonvoting
common stock or preferred stock in such
financial institution, or voting stock with
respect to which, the Secretary agrees not to
exercise voting power, as the Secretary
determines appropriate; or
(B) in the case of any financial institution
other than one described in subparagraph (A), a
warrant for common or preferred stock, or a
senior debt instrument from such financial
institution, as described in paragraph (2)(C).
(2) Terms and conditions.--The terms and conditions
of any warrant or senior debt instrument required under
paragraph (1) shall meet the following requirements:
(A) Purposes.--Such terms and conditions
shall, at a minimum, be designed--
(i) to provide for reasonable
participation by the Secretary, for the
benefit of taxpayers, in equity
appreciation in the case of a warrant
or other equity security, or a
reasonable interest rate premium, in
the case of a debt instrument; and
(ii) to provide additional protection
for the taxpayer against losses from
sale of assets by the Secretary under
this Act and the administrative
expenses of the TARP.
(B) Authority to sell, exercise, or
surrender.--The Secretary may sell, exercise,
or surrender a warrant or any senior debt
instrument received under this subsection,
based on the conditions established under
subparagraph (A).
(C) Conversion.--The warrant shall provide
that if, after the warrant is received by the
Secretary under this subsection, the financial
institution that issued the warrant is no
longer listed or traded on a national
securities exchange or securities association,
as described in paragraph (1)(A), such warrants
shall convert to senior debt, or contain
appropriate protections for the Secretary to
ensure that the Treasury is appropriately
compensated for the value of the warrant, in an
amount determined by the Secretary.
(D) Protections.--Any warrant representing
securities to be received by the Secretary
under this subsection shall contain anti-
dilution provisions of the type employed in
capital market transactions, as determined by
the Secretary. Such provisions shall protect
the value of the securities from market
transactions such as stock splits, stock
distributions, dividends, and other
distributions, mergers, and other forms of
reorganization or recapitalization.
(E) Exercise price.--The exercise price for
any warrant issued pursuant to this subsection
shall be set by the Secretary, in the interest
of the taxpayers.
(F) Sufficiency.--The financial institution
shall guarantee to the Secretary that it has
authorized shares of nonvoting stock available
to fulfill its obligations under this
subsection. Should the financial institution
not have sufficient authorized shares,
including preferred shares that may carry
dividend rights equal to a multiple number of
common shares, the Secretary may, to the extent
necessary, accept a senior debt note in an
amount, and on such terms as will compensate
the Secretary with equivalent value, in the
event that a sufficient shareholder vote to
authorize the necessary additional shares
cannot be obtained.
(3) Exceptions.--
(A) De minimis.--The Secretary shall
establish de minimis exceptions to the
requirements of this subsection, based on the
size of the cumulative transactions of troubled
assets purchased from any one financial
institution for the duration of the program, at
not more than $100,000,000.
(B) Other exceptions.--The Secretary shall
establish an exception to the requirements of
this subsection and appropriate alternative
requirements for any participating financial
institution that is legally prohibited from
issuing securities and debt instruments, so as
not to allow circumvention of the requirements
of this section.
SEC. 114. MARKET TRANSPARENCY.
(a) Pricing.--To facilitate market transparency, the
Secretary shall make available to the public, in electronic
form, a description, amounts, and pricing of assets acquired
under this Act, within 2 business days of purchase, trade, or
other disposition.
(b) Disclosure.--For each type of financial institutions that
sells troubled assets to the Secretary under this Act, the
Secretary shall determine whether the public disclosure
required for such financial institutions with respect to off-
balance sheet transactions, derivatives instruments, contingent
liabilities, and similar sources of potential exposure is
adequate to provide to the public sufficient information as to
the true financial position of the institutions. If such
disclosure is not adequate for that purpose, the Secretary
shall make recommendations for additional disclosure
requirements to the relevant regulators.
SEC. 115. GRADUATED AUTHORIZATION TO PURCHASE.
(a) Authority.--The authority of the Secretary to purchase
troubled assets under this Act shall be limited as follows:
(1) Effective upon the date of enactment of this Act,
such authority shall be limited to $250,000,000,000
outstanding at any one time.
(2) If at any time, the President submits to the
Congress a written certification that the Secretary
needs to exercise the authority under this paragraph,
effective upon such submission, such authority shall be
limited to $350,000,000,000 outstanding at any one
time.
(3) If, at any time after the certification in
paragraph (2) has been made, the President transmits to
the Congress a written report detailing the plan of the
Secretary to exercise the authority under this
paragraph, unless there is enacted, within 15 calendar
days of such transmission, a joint resolution described
in subsection (c), effective upon the expiration of
such 15-day period, such authority shall be limited to
$700,000,000,000 outstanding at any one time.
(b) Aggregation of Purchase Prices.--The amount of troubled
assets purchased by the Secretary outstanding at any one time
shall be determined for purposes of the dollar amount
limitations under subsection (a) by aggregating the purchase
prices of all troubled assets held.
(c) Joint Resolution of Disapproval.--
(1) In general.--Notwithstanding any other provision
of this section, the Secretary may not exercise any
authority to make purchases under this Act with regard
to any amount in excess of $350,000,000,000 previously
obligated, as described in this section if, within 15
calendar days after the date on which Congress receives
a report of the plan of the Secretary described in
subsection (a)(3), there is enacted into law a joint
resolution disapproving the plan of the Secretary with
respect to such additional amount.
(2) Contents of joint resolution.--For the purpose of
this section, the term ``joint resolution'' means only
a joint resolution--
(A) that is introduced not later than 3
calendar days after the date on which the
report of the plan of the Secretary referred to
in subsection (a)(3) is received by Congress;
(B) which does not have a preamble;
(C) the title of which is as follows: ``Joint
resolution relating to the disapproval of
obligations under the Emergency Economic
Stabilization Act of 2008''; and
(D) the matter after the resolving clause of
which is as follows: ``That Congress
disapproves the obligation of any amount
exceeding the amounts obligated as described in
paragraphs (1) and (2) of section 115(a) of the
Emergency Economic Stabilization Act of
2008.''.
(d) Fast Track Consideration in House of Representatives.--
(1) Reconvening.--Upon receipt of a report under
subsection (a)(3), the Speaker, if the House would
otherwise be adjourned, shall notify the Members of the
House that, pursuant to this section, the House shall
convene not later than the second calendar day after
receipt of such report;
(2) Reporting and discharge.--Any committee of the
House of Representatives to which a joint resolution is
referred shall report it to the House not later than 5
calendar days after the date of receipt of the report
described in subsection (a)(3). If a committee fails to
report the joint resolution within that period, the
committee shall be discharged from further
consideration of the joint resolution and the joint
resolution shall be referred to the appropriate
calendar.
(3) Proceeding to consideration.--After each
committee authorized to consider a joint resolution
reports it to the House or has been discharged from its
consideration, it shall be in order, not later than the
sixth day after Congress receives the report described
in subsection (a)(3), to move to proceed to consider
the joint resolution in the House. All points of order
against the motion are waived. Such a motion shall not
be in order after the House has disposed of a motion to
proceed on the joint resolution. The previous question
shall be considered as ordered on the motion to its
adoption without intervening motion. The motion shall
not be debatable. A motion to reconsider the vote by
which the motion is disposed of shall not be in order.
(4) Consideration.--The joint resolution shall be
considered as read. All points of order against the
joint resolution and against its consideration are
waived. The previous question shall be considered as
ordered on the joint resolution to its passage without
intervening motion except two hours of debate equally
divided and controlled by the proponent and an
opponent. A motion to reconsider the vote on passage of
the joint resolution shall not be in order.
(e) Fast Track Consideration in Senate.--
(1) Reconvening.--Upon receipt of a report under
subsection (a)(3), if the Senate has adjourned or
recessed for more than 2 days, the majority leader of
the Senate, after consultation with the minority leader
of the Senate, shall notify the Members of the Senate
that, pursuant to this section, the Senate shall
convene not later than the second calendar day after
receipt of such message.
(2) Placement on calendar.--Upon introduction in the
Senate, the joint resolution shall be placed
immediately on the calendar.
(3) Floor consideration.--
(A) In general.--Notwithstanding Rule XXII of
the Standing Rules of the Senate, it is in
order at any time during the period beginning
on the 4th day after the date on which Congress
receives a report of the plan of the Secretary
described in subsection (a)(3) and ending on
the 6th day after the date on which Congress
receives a report of the plan of the Secretary
described in subsection (a)(3) (even though a
previous motion to the same effect has been
disagreed to) to move to proceed to the
consideration of the joint resolution, and all
points of order against the joint resolution
(and against consideration of the joint
resolution) are waived. The motion to proceed
is not debatable. The motion is not subject to
a motion to postpone. A motion to reconsider
the vote by which the motion is agreed to or
disagreed to shall not be in order. If a motion
to proceed to the consideration of the
resolution is agreed to, the joint resolution
shall remain the unfinished business until
disposed of.
(B) Debate.--Debate on the joint resolution,
and on all debatable motions and appeals in
connection therewith, shall be limited to not
more than 10 hours, which shall be divided
equally between the majority and minority
leaders or their designees. A motion further to
limit debate is in order and not debatable. An
amendment to, or a motion to postpone, or a
motion to proceed to the consideration of other
business, or a motion to recommit the joint
resolution is not in order.
(C) Vote on passage.--The vote on passage
shall occur immediately following the
conclusion of the debate on a joint resolution,
and a single quorum call at the conclusion of
the debate if requested in accordance with the
rules of the Senate.
(D) Rulings of the chair on procedure.--
Appeals from the decisions of the Chair
relating to the application of the rules of the
Senate, as the case may be, to the procedure
relating to a joint resolution shall be decided
without debate.
(f) Rules Relating to Senate and House of Representatives.--
(1) Coordination with action by other house.--If,
before the passage by one House of a joint resolution
of that House, that House receives from the other House
a joint resolution, then the following procedures shall
apply:
(A) The joint resolution of the other House
shall not be referred to a committee.
(B) With respect to a joint resolution of the
House receiving the resolution--
(i) the procedure in that House shall
be the same as if no joint resolution
had been received from the other House;
but
(ii) the vote on passage shall be on
the joint resolution of the other
House.
(2) Treatment of joint resolution of other house.--If
one House fails to introduce or consider a joint
resolution under this section, the joint resolution of
the other House shall be entitled to expedited floor
procedures under this section.
(3) Treatment of companion measures.--If, following
passage of the joint resolution in the Senate, the
Senate then receives the companion measure from the
House of Representatives, the companion measure shall
not be debatable.
(4) Consideration after passage.--
(A) In general.--If Congress passes a joint
resolution, the period beginning on the date
the President is presented with the joint
resolution and ending on the date the President
takes action with respect to the joint
resolution shall be disregarded in computing
the 15-calendar day period described in
subsection (a)(3).
(B) Vetoes.--If the President vetoes the
joint resolution--
(i) the period beginning on the date
the President vetoes the joint
resolution and ending on the date the
Congress receives the veto message with
respect to the joint resolution shall
be disregarded in computing the 15-
calendar day period described in
subsection (a)(3), and
(ii) debate on a veto message in the
Senate under this section shall be 1
hour equally divided between the
majority and minority leaders or their
designees.
(5) Rules of house of representatives and senate.--
This subsection and subsections (c), (d), and (e) are
enacted by Congress--
(A) as an exercise of the rulemaking power of
the Senate and House of Representatives,
respectively, and as such it is deemed a part
of the rules of each House, respectively, but
applicable only with respect to the procedure
to be followed in that House in the case of a
joint resolution, and it supersedes other rules
only to the extent that it is inconsistent with
such rules; and
(B) with full recognition of the
constitutional right of either House to change
the rules (so far as relating to the procedure
of that House) at any time, in the same manner,
and to the same extent as in the case of any
other rule of that House.
SEC. 116. OVERSIGHT AND AUDITS.
(a) Comptroller General Oversight.--
(1) Scope of oversight.--The Comptroller General of
the United States shall, upon establishment of the
troubled assets relief program under this Act (in this
section referred to as the ``TARP''), commence ongoing
oversight of the activities and performance of the TARP
and of any agents and representatives of the TARP (as
related to the agent or representative's activities on
behalf of or under the authority of the TARP),
including vehicles established by the Secretary under
this Act. The subjects of such oversight shall include
the following:
(A) The performance of the TARP in meeting
the purposes of this Act, particularly those
involving--
(i) foreclosure mitigation;
(ii) cost reduction;
(iii) whether it has provided
stability or prevented disruption to
the financial markets or the banking
system; and
(iv) whether it has protected
taxpayers.
(B) The financial condition and internal
controls of the TARP, its representatives and
agents.
(C) Characteristics of transactions and
commitments entered into, including transaction
type, frequency, size, prices paid, and all
other relevant terms and conditions, and the
timing, duration and terms of any future
commitments to purchase assets.
(D) Characteristics and disposition of
acquired assets, including type, acquisition
price, current market value, sale prices and
terms, and use of proceeds from sales.
(E) Efficiency of the operations of the TARP
in the use of appropriated funds.
(F) Compliance with all applicable laws and
regulations by the TARP, its agents and
representatives.
(G) The efforts of the TARP to prevent,
identify, and minimize conflicts of interest
involving any agent or representative
performing activities on behalf of or under the
authority of the TARP.
(H) The efficacy of contracting procedures
pursuant to section 107(b), including, as
applicable, the efforts of the TARP in
evaluating proposals for inclusion and
contracting to the maximum extent possible of
minorities (as such term is defined in 1204(c)
of the Financial Institutions Reform, Recovery,
and Enhancement Act of 1989 (12 U.S.C. 1811
note), women, and minority- and women-owned
businesses, including ascertaining and
reporting the total amount of fees paid and
other value delivered by the TARP to all of its
agents and representatives, and such amounts
paid or delivered to such firms that are
minority- and women-owned businesses (as such
terms are defined in section 21A of the Federal
Home Loan Bank Act (12 U.S.C. 1441a)).
(2) Conduct and administration of oversight.--
(A) GAO presence.--The Secretary shall
provide the Comptroller General with
appropriate space and facilities in the
Department of the Treasury as necessary to
facilitate oversight of the TARP until the
termination date established in section 120.
(B) Access to records.--To the extent
otherwise consistent with law, the Comptroller
General shall have access, upon request, to any
information, data, schedules, books, accounts,
financial records, reports, files, electronic
communications, or other papers, things, or
property belonging to or in use by the TARP, or
any vehicles established by the Secretary under
this Act, and to the officers, directors,
employees, independent public accountants,
financial advisors, and other agents and
representatives of the TARP (as related to the
agent or representative's activities on behalf
of or under the authority of the TARP) or any
such vehicle at such reasonable time as the
Comptroller General may request. The
Comptroller General shall be afforded full
facilities for verifying transactions with the
balances or securities held by depositaries,
fiscal agents, and custodians. The Comptroller
General may make and retain copies of such
books, accounts, and other records as the
Comptroller General deems appropriate.
(C) Reimbursement of costs.--The Treasury
shall reimburse the Government Accountability
Office for the full cost of any such oversight
activities as billed therefor by the
Comptroller General of the United States. Such
reimbursements shall be credited to the
appropriation account ``Salaries and Expenses,
Government Accountability Office'' current when
the payment is received and remain available
until expended.
(3) Reporting.--The Comptroller General shall submit
reports of findings under this section, regularly and
no less frequently than once every 60 days, to the
appropriate committees of Congress, and the Special
Inspector General for the Troubled Asset Relief Program
established under this Act on the activities and
performance of the TARP. The Comptroller may also
submit special reports under this subsection as
warranted by the findings of its oversight activities.
(b) Comptroller General Audits.--
(1) Annual audit.--The TARP shall annually prepare
and issue to the appropriate committees of Congress and
the public audited financial statements prepared in
accordance with generally accepted accounting
principles, and the Comptroller General shall annually
audit such statements in accordance with generally
accepted auditing standards. The Treasury shall
reimburse the Government Accountability Office for the
full cost of any such audit as billed therefor by the
Comptroller General. Such reimbursements shall be
credited to the appropriation account ``Salaries and
Expenses, Government Accountability Office'' current
when the payment is received and remain available until
expended. The financial statements prepared under this
paragraph shall be on the fiscal year basis prescribed
under section 1102 of title 31, United States Code.
(2) Authority.--The Comptroller General may audit the
programs, activities, receipts, expenditures, and
financial transactions of the TARP and any agents and
representatives of the TARP (as related to the agent or
representative's activities on behalf of or under the
authority of the TARP), including vehicles established
by the Secretary under this Act.
(3) Corrective responses to audit problems.--The TARP
shall--
(A) take action to address deficiencies
identified by the Comptroller General or other
auditor engaged by the TARP; or
(B) certify to appropriate committees of
Congress that no action is necessary or
appropriate.
(c) Internal Control.--
(1) Establishment.--The TARP shall establish and
maintain an effective system of internal control,
consistent with the standards prescribed under section
3512(c) of title 31, United States Code, that provides
reasonable assurance of--
(A) the effectiveness and efficiency of
operations, including the use of the resources
of the TARP;
(B) the reliability of financial reporting,
including financial statements and other
reports for internal and external use; and
(C) compliance with applicable laws and
regulations.
(2) Reporting.--In conjunction with each annual
financial statement issued under this section, the TARP
shall--
(A) state the responsibility of management
for establishing and maintaining adequate
internal control over financial reporting; and
(B) state its assessment, as of the end of
the most recent year covered by such financial
statement of the TARP, of the effectiveness of
the internal control over financial reporting.
(d) Sharing of Information.--Any report or audit required
under this section shall also be submitted to the Congressional
Oversight Panel established under section 125.
(e) Termination.--Any oversight, reporting, or audit
requirement under this section shall terminate on the later
of--
(1) the date that the last troubled asset acquired by
the Secretary under section 101 has been sold or
transferred out of the ownership or control of the
Federal Government; or
(2) the date of expiration of the last insurance
contract issued under section 102.
SEC. 117. STUDY AND REPORT ON MARGIN AUTHORITY.
(a) Study.--The Comptroller General shall undertake a study
to determine the extent to which leverage and sudden
deleveraging of financial institutions was a factor behind the
current financial crisis.
(b) Content.--The study required by this section shall
include--
(1) an analysis of the roles and responsibilities of
the Board, the Securities and Exchange Commission, the
Secretary, and other Federal banking agencies with
respect to monitoring leverage and acting to curtail
excessive leveraging;
(2) an analysis of the authority of the Board to
regulate leverage, including by setting margin
requirements, and what process the Board used to decide
whether or not to use its authority;
(3) an analysis of any usage of the margin authority
by the Board; and
(4) recommendations for the Board and appropriate
committees of Congress with respect to the existing
authority of the Board.
(c) Report.--Not later than June 1, 2009, the Comptroller
General shall complete and submit a report on the study
required by this section to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives.
(d) Sharing of Information.--Any reports required under this
section shall also be submitted to the Congressional Oversight
Panel established under section 125.
SEC. 118. FUNDING.
For the purpose of the authorities granted in this Act, and
for the costs of administering those authorities, the Secretary
may use the proceeds of the sale of any securities issued under
chapter 31 of title 31, United States Code, and the purposes
for which securities may be issued under chapter 31 of title
31, United States Code, are extended to include actions
authorized by this Act, including the payment of administrative
expenses. Any funds expended or obligated by the Secretary for
actions authorized by this Act, including the payment of
administrative expenses, shall be deemed appropriated at the
time of such expenditure or obligation.
SEC. 119. JUDICIAL REVIEW AND RELATED MATTERS.
(a) Judicial Review.--
(1) Standard.--Actions by the Secretary pursuant to
the authority of this Act shall be subject to chapter 7
of title 5, United States Code, including that such
final actions shall be held unlawful and set aside if
found to be arbitrary, capricious, an abuse of
discretion, or not in accordance with law.
(2) Limitations on equitable relief.--
(A) Injunction.--No injunction or other form
of equitable relief shall be issued against the
Secretary for actions pursuant to section 101,
102, 106, and 109, other than to remedy a
violation of the Constitution.
(B) Temporary restraining order.--Any request
for a temporary restraining order against the
Secretary for actions pursuant to this Act
shall be considered and granted or denied by
the court within 3 days of the date of the
request.
(C) Preliminary injunction.--Any request for
a preliminary injunction against the Secretary
for actions pursuant to this Act shall be
considered and granted or denied by the court
on an expedited basis consistent with the
provisions of rule 65(b)(3) of the Federal
Rules of Civil Procedure, or any successor
thereto.
(D) Permanent injunction.--Any request for a
permanent injunction against the Secretary for
actions pursuant to this Act shall be
considered and granted or denied by the court
on an expedited basis. Whenever possible, the
court shall consolidate trial on the merits
with any hearing on a request for a preliminary
injunction, consistent with the provisions of
rule 65(a)(2) of the Federal Rules of Civil
Procedure, or any successor thereto.
(3) Limitation on actions by participating
companies.--No action or claims may be brought against
the Secretary by any person that divests its assets
with respect to its participation in a program under
this Act, except as provided in paragraph (1), other
than as expressly provided in a written contract with
the Secretary.
(4) Stays.--Any injunction or other form of equitable
relief issued against the Secretary for actions
pursuant to section 101, 102, 106, and 109, shall be
automatically stayed. The stay shall be lifted unless
the Secretary seeks a stay from a higher court within 3
calendar days after the date on which the relief is
issued.
(b) Related Matters.--
(1) Treatment of homeowners' rights.--The terms of
any residential mortgage loan that is part of any
purchase by the Secretary under this Act shall remain
subject to all claims and defenses that would otherwise
apply, notwithstanding the exercise of authority by the
Secretary under this Act.
(2) Savings clause.--Any exercise of the authority of
the Secretary pursuant to this Act shall not impair the
claims or defenses that would otherwise apply with
respect to persons other than the Secretary. Except as
established in any contract, a servicer of pooled
residential mortgages owes any duty to determine
whether the net present value of the payments on the
loan, as modified, is likely to be greater than the
anticipated net recovery that would result from
foreclosure to all investors and holders of beneficial
interests in such investment, but not to any individual
or groups of investors or beneficial interest holders,
and shall be deemed to act in the best interests of all
such investors or holders of beneficial interests if
the servicer agrees to or implements a modification or
workout plan when the servicer takes reasonable loss
mitigation actions, including partial payments.
SEC. 120. TERMINATION OF AUTHORITY.
(a) Termination.--The authorities provided under sections
101(a), excluding section 101(a)(3), and 102 shall terminate on
December 31, 2009.
(b) Extension Upon Certification.--The Secretary, upon
submission of a written certification to Congress, may extend
the authority provided under this Act to expire not later than
2 years from the date of enactment of this Act. Such
certification shall include a justification of why the
extension is necessary to assist American families and
stabilize financial markets, as well as the expected cost to
the taxpayers for such an extension.
SEC. 121. SPECIAL INSPECTOR GENERAL FOR THE TROUBLED ASSET RELIEF
PROGRAM.
(a) Office of Inspector General.--There is hereby established
the Office of the Special Inspector General for the Troubled
Asset Relief Program.
(b) Appointment of Inspector General; Removal.--(1) The head
of the Office of the Special Inspector General for the Troubled
Asset Relief Program is the Special Inspector General for the
Troubled Asset Relief Program (in this section referred to as
the ``Special Inspector General''), who shall be appointed by
the President, by and with the advice and consent of the
Senate.
(2) The appointment of the Special Inspector General shall be
made on the basis of integrity and demonstrated ability in
accounting, auditing, financial analysis, law, management
analysis, public administration, or investigations.
(3) The nomination of an individual as Special Inspector
General shall be made as soon as practicable after the
establishment of any program under sections 101 and 102.
(4) The Special Inspector General shall be removable from
office in accordance with the provisions of section 3(b) of the
Inspector General Act of 1978 (5 U.S.C. App.).
(5) For purposes of section 7324 of title 5, United States
Code, the Special Inspector General shall not be considered an
employee who determines policies to be pursued by the United
States in the nationwide administration of Federal law.
(6) The annual rate of basic pay of the Special Inspector
General shall be the annual rate of basic pay provided for
positions at level IV of the Executive Schedule under section
5315 of title 5, United States Code.
(c) Duties.--(1) It shall be the duty of the Special
Inspector General to conduct, supervise, and coordinate audits
and investigations of the purchase, management, and sale of
assets by the Secretary of the Treasury under any program
established by the Secretary under section 101, and the
management by the Secretary of any program established under
section 102, including by collecting and summarizing the
following information:
(A) A description of the categories of troubled
assets purchased or otherwise procured by the
Secretary.
(B) A listing of the troubled assets purchased in
each such category described under subparagraph (A).
(C) An explanation of the reasons the Secretary
deemed it necessary to purchase each such troubled
asset.
(D) A listing of each financial institution that such
troubled assets were purchased from.
(E) A listing of and detailed biographical
information on each person or entity hired to manage
such troubled assets.
(F) A current estimate of the total amount of
troubled assets purchased pursuant to any program
established under section 101, the amount of troubled
assets on the books of the Treasury, the amount of
troubled assets sold, and the profit and loss incurred
on each sale or disposition of each such troubled
asset.
(G) A listing of the insurance contracts issued under
section 102.
(2) The Special Inspector General shall establish, maintain,
and oversee such systems, procedures, and controls as the
Special Inspector General considers appropriate to discharge
the duty under paragraph (1).
(3) In addition to the duties specified in paragraphs (1) and
(2), the Inspector General shall also have the duties and
responsibilities of inspectors general under the Inspector
General Act of 1978.
(d) Powers and Authorities.--(1) In carrying out the duties
specified in subsection (c), the Special Inspector General
shall have the authorities provided in section 6 of the
Inspector General Act of 1978.
(2) The Special Inspector General shall carry out the duties
specified in subsection (c)(1) in accordance with section
4(b)(1) of the Inspector General Act of 1978.
(e) Personnel, Facilities, and Other Resources.--(1) The
Special Inspector General may select, appoint, and employ such
officers and employees as may be necessary for carrying out the
duties of the Special Inspector General, subject to the
provisions of title 5, United States Code, governing
appointments in the competitive service, and the provisions of
chapter 51 and subchapter III of chapter 53 of such title,
relating to classification and General Schedule pay rates.
(2) The Special Inspector General may obtain services as
authorized by section 3109 of title 5, United States Code, at
daily rates not to exceed the equivalent rate prescribed for
grade GS-15 of the General Schedule by section 5332 of such
title.
(3) The Special Inspector General may enter into contracts
and other arrangements for audits, studies, analyses, and other
services with public agencies and with private persons, and
make such payments as may be necessary to carry out the duties
of the Inspector General.
(4)(A) Upon request of the Special Inspector General for
information or assistance from any department, agency, or other
entity of the Federal Government, the head of such entity
shall, insofar as is practicable and not in contravention of
any existing law, furnish such information or assistance to the
Special Inspector General, or an authorized designee.
(B) Whenever information or assistance requested by the
Special Inspector General is, in the judgment of the Special
Inspector General, unreasonably refused or not provided, the
Special Inspector General shall report the circumstances to the
appropriate committees of Congress without delay.
(f) Reports.--(1) Not later than 60 days after the
confirmation of the Special Inspector General, and every
calendar quarter thereafter, the Special Inspector General
shall submit to the appropriate committees of Congress a report
summarizing the activities of the Special Inspector General
during the 120-day period ending on the date of such report.
Each report shall include, for the period covered by such
report, a detailed statement of all purchases, obligations,
expenditures, and revenues associated with any program
established by the Secretary of the Treasury under sections 101
and 102, as well as the information collected under subsection
(c)(1).
(2) Nothing in this subsection shall be construed to
authorize the public disclosure of information that is--
(A) specifically prohibited from disclosure by any
other provision of law;
(B) specifically required by Executive order to be
protected from disclosure in the interest of national
defense or national security or in the conduct of
foreign affairs; or
(C) a part of an ongoing criminal investigation.
(3) Any reports required under this section shall also be
submitted to the Congressional Oversight Panel established
under section 125.
(g) Funding.--(1) Of the amounts made available to the
Secretary of the Treasury under section 118, $50,000,000 shall
be available to the Special Inspector General to carry out this
section.
(2) The amount available under paragraph (1) shall remain
available until expended.
(h) Termination.--The Office of the Special Inspector General
shall terminate on the later of--
(1) the date that the last troubled asset acquired by
the Secretary under section 101 has been sold or
transferred out of the ownership or control of the
Federal Government; or
(2) the date of expiration of the last insurance
contract issued under section 102.
SEC. 122. INCREASE IN STATUTORY LIMIT ON THE PUBLIC DEBT.
Subsection (b) of section 3101 of title 31, United States
Code, is amended by striking out the dollar limitation
contained in such subsection and inserting
``$11,315,000,000,000''.
SEC. 123. CREDIT REFORM.
(a) In General.--Subject to subsection (b), the costs of
purchases of troubled assets made under section 101(a) and
guarantees of troubled assets under section 102, and any cash
flows associated with the activities authorized in section 102
and subsections (a), (b), and (c) of section 106 shall be
determined as provided under the Federal Credit Reform Act of
1990 (2 U.S.C. 661 et. seq.).
(b) Costs.--For the purposes of section 502(5) of the Federal
Credit Reform Act of 1990 (2 U.S.C. 661a(5))--
(1) the cost of troubled assets and guarantees of
troubled assets shall be calculated by adjusting the
discount rate in section 502(5)(E) (2 U.S.C.
661a(5)(E)) for market risks; and
(2) the cost of a modification of a troubled asset or
guarantee of a troubled asset shall be the difference
between the current estimate consistent with paragraph
(1) under the terms of the troubled asset or guarantee
of the troubled asset and the current estimate
consistent with paragraph (1) under the terms of the
troubled asset or guarantee of the troubled asset, as
modified.
SEC. 124. HOPE FOR HOMEOWNERS AMENDMENTS.
Section 257 of the National Housing Act (12 U.S.C. 1715z-23)
is amended--
(1) in subsection (e)--
(A) in paragraph (1)(B), by inserting before
``a ratio'' the following: ``, or thereafter is
likely to have, due to the terms of the
mortgage being reset,'';
(B) in paragraph (2)(B), by inserting before
the period at the end ``(or such higher
percentage as the Board determines, in the
discretion of the Board)'';
(C) in paragraph (4)(A)--
(i) in the first sentence, by
inserting after ``insured loan'' the
following: ``and any payments made
under this paragraph,''; and
(ii) by adding at the end the
following: ``Such actions may include
making payments, which shall be
accepted as payment in full of all
indebtedness under the eligible
mortgage, to any holder of an existing
subordinate mortgage, in lieu of any
future appreciation payments authorized
under subparagraph (B).''; and
(2) in subsection (w), by inserting after
``administrative costs'' the following: ``and payments
pursuant to subsection (e)(4)(A)''.
SEC. 125. CONGRESSIONAL OVERSIGHT PANEL.
(a) Establishment.--There is hereby established the
Congressional Oversight Panel (hereafter in this section
referred to as the ``Oversight Panel'') as an establishment in
the legislative branch.
(b) Duties.--The Oversight Panel shall review the current
state of the financial markets and the regulatory system and
submit the following reports to Congress:
(1) Regular reports.--
(A) In general.--Regular reports of the
Oversight Panel shall include the following:
(i) The use by the Secretary of
authority under this Act, including
with respect to the use of contracting
authority and administration of the
program.
(ii) The impact of purchases made
under the Act on the financial markets
and financial institutions.
(iii) The extent to which the
information made available on
transactions under the program has
contributed to market transparency.
(iv) The effectiveness of foreclosure
mitigation efforts, and the
effectiveness of the program from the
standpoint of minimizing long-term
costs to the taxpayers and maximizing
the benefits for taxpayers.
(B) Timing.--The reports required under this
paragraph shall be submitted not later than 30
days after the first exercise by the Secretary
of the authority under section 101(a) or 102,
and every 30 days thereafter.
(2) Special report on regulatory reform.--The
Oversight Panel shall submit a special report on
regulatory reform not later than January 20, 2009,
analyzing the current state of the regulatory system
and its effectiveness at overseeing the participants in
the financial system and protecting consumers, and
providing recommendations for improvement, including
recommendations regarding whether any participants in
the financial markets that are currently outside the
regulatory system should become subject to the
regulatory system, the rationale underlying such
recommendation, and whether there are any gaps in
existing consumer protections.
(c) Membership.--
(1) In general.--The Oversight Panel shall consist of
5 members, as follows:
(A) 1 member appointed by the Speaker of the
House of Representatives.
(B) 1 member appointed by the minority leader
of the House of Representatives.
(C) 1 member appointed by the majority leader
of the Senate.
(D) 1 member appointed by the minority leader
of the Senate.
(E) 1 member appointed by the Speaker of the
House of Representatives and the majority
leader of the Senate, after consultation with
the minority leader of the Senate and the
minority leader of the House of
Representatives.
(2) Pay.--Each member of the Oversight Panel shall
each be paid at a rate equal to the daily equivalent of
the annual rate of basic pay for level I of the
Executive Schedule for each day (including travel time)
during which such member is engaged in the actual
performance of duties vested in the Commission.
(3) Prohibition of compensation of federal
employees.--Members of the Oversight Panel who are
full-time officers or employees of the United States or
Members of Congress may not receive additional pay,
allowances, or benefits by reason of their service on
the Oversight Panel.
(4) Travel expenses.--Each member shall receive
travel expenses, including per diem in lieu of
subsistence, in accordance with applicable provisions
under subchapter I of chapter 57 of title 5, United
States Code.
(5) Quorum.--Four members of the Oversight Panel
shall constitute a quorum but a lesser number may hold
hearings.
(6) Vacancies.--A vacancy on the Oversight Panel
shall be filled in the manner in which the original
appointment was made.
(7) Meetings.--The Oversight Panel shall meet at the
call of the Chairperson or a majority of its members.
(d) Staff.--
(1) In general.--The Oversight Panel may appoint and
fix the pay of any personnel as the Commission
considers appropriate.
(2) Experts and consultants.--The Oversight Panel may
procure temporary and intermittent services under
section 3109(b) of title 5, United States Code.
(3) Staff of agencies.--Upon request of the Oversight
Panel, the head of any Federal department or agency may
detail, on a reimbursable basis, any of the personnel
of that department or agency to the Oversight Panel to
assist it in carrying out its duties under this Act.
(e) Powers.--
(1) Hearings and sessions.--The Oversight Panel may,
for the purpose of carrying out this section, hold
hearings, sit and act at times and places, take
testimony, and receive evidence as the Panel considers
appropriate and may administer oaths or affirmations to
witnesses appearing before it.
(2) Powers of members and agents.--Any member or
agent of the Oversight Panel may, if authorized by the
Oversight Panel, take any action which the Oversight
Panel is authorized to take by this section.
(3) Obtaining official data.--The Oversight Panel may
secure directly from any department or agency of the
United States information necessary to enable it to
carry out this section. Upon request of the Chairperson
of the Oversight Panel, the head of that department or
agency shall furnish that information to the Oversight
Panel.
(4) Reports.--The Oversight Panel shall receive and
consider all reports required to be submitted to the
Oversight Panel under this Act.
(f) Termination.--The Oversight Panel shall terminate 6
months after the termination date specified in section 120.
(g) Funding for Expenses.--
(1) Authorization of appropriations.--There is
authorized to be appropriated to the Oversight Panel
such sums as may be necessary for any fiscal year, half
of which shall be derived from the applicable account
of the House of Representatives, and half of which
shall be derived from the contingent fund of the
Senate.
(2) Reimbursement of amounts.--An amount equal to the
expenses of the Oversight Panel shall be promptly
transferred by the Secretary, from time to time upon
the presentment of a statement of such expenses by the
Chairperson of the Oversight Panel, from funds made
available to the Secretary under this Act to the
applicable fund of the House of Representatives and the
contingent fund of the Senate, as appropriate, as
reimbursement for amounts expended from such account
and fund under paragraph (1).
SEC. 126. FDIC AUTHORITY.
(a) In General.--Section 18(a) of the Federal Deposit
Insurance Act (12 U.S.C. 1828(a)) is amended by adding at the
end the following new paragraph:
``(4) False advertising, misuse of fdic names, and
misrepresentation to indicate insured status.--
``(A) Prohibition on false advertising and
misuse of fdic names.--No person may represent
or imply that any deposit liability,
obligation, certificate, or share is insured or
guaranteed by the Corporation, if such deposit
liability, obligation, certificate, or share is
not insured or guaranteed by the Corporation--
``(i) by using the terms `Federal
Deposit', `Federal Deposit Insurance',
`Federal Deposit Insurance
Corporation', any combination of such
terms, or the abbreviation `FDIC' as
part of the business name or firm name
of any person, including any
corporation, partnership, business
trust, association, or other business
entity; or
``(ii) by using such terms or any
other terms, sign, or symbol as part of
an advertisement, solicitation, or
other document.
``(B) Prohibition on misrepresentations of
insured status.--No person may knowingly
misrepresent--
``(i) that any deposit liability,
obligation, certificate, or share is
insured, under this Act, if such
deposit liability, obligation,
certificate, or share is not so
insured; or
``(ii) the extent to which or the
manner in which any deposit liability,
obligation, certificate, or share is
insured under this Act, if such deposit
liability, obligation, certificate, or
share is not so insured, to the extent
or in the manner represented.
``(C) Authority of the appropriate federal
banking agency.--The appropriate Federal
banking agency shall have enforcement authority
in the case of a violation of this paragraph by
any person for which the agency is the
appropriate Federal banking agency, or any
institution-affiliated party thereof.
``(D) Corporation authority if the
appropriate federal banking agency fails to
follow recommendation.--
``(i) Recommendation.--The
Corporation may recommend in writing to
the appropriate Federal banking agency
that the agency take any enforcement
action authorized under section 8 for
purposes of enforcement of this
paragraph with respect to any person
for which the agency is the appropriate
Federal banking agency or any
institution-affiliated party thereof.
``(ii) Agency response.--If the
appropriate Federal banking agency does
not, within 30 days of the date of
receipt of a recommendation under
clause (i), take the enforcement action
with respect to this paragraph
recommended by the Corporation or
provide a plan acceptable to the
Corporation for responding to the
situation presented, the Corporation
may take the recommended enforcement
action against such person or
institution-affiliated party.
``(E) Additional authority.--In addition to
its authority under subparagraphs (C) and (D),
for purposes of this paragraph, the Corporation
shall have, in the same manner and to the same
extent as with respect to a State nonmember
insured bank--
``(i) jurisdiction over--
``(I) any person other than a
person for which another agency
is the appropriate Federal
banking agency or any
institution-affiliated party
thereof; and
``(II) any person that aids
or abets a violation of this
paragraph by a person described
in subclause (I); and
``(ii) for purposes of enforcing the
requirements of this paragraph, the
authority of the Corporation under--
``(I) section 10(c) to
conduct investigations; and
``(II) subsections (b), (c),
(d) and (i) of section 8 to
conduct enforcement actions.
``(F) Other actions preserved.--No provision
of this paragraph shall be construed as barring
any action otherwise available, under the laws
of the United States or any State, to any
Federal or State agency or individual.''.
(b) Enforcement Orders.--Section 8(c) of the Federal Deposit
Insurance Act (12 U.S.C. 1818(c)) is amended by adding at the
end the following new paragraph:
``(4) False advertising or misuse of names to
indicate insured status.--
``(A) Temporary order.--
``(i) In general.--If a notice of
charges served under subsection (b)(1)
specifies on the basis of particular
facts that any person engaged or is
engaging in conduct described in
section 18(a)(4), the Corporation or
other appropriate Federal banking
agency may issue a temporary order
requiring--
``(I) the immediate cessation
of any activity or practice
described, which gave rise to
the notice of charges; and
``(II) affirmative action to
prevent any further, or to
remedy any existing, violation.
``(ii) Effect of order.--Any
temporary order issued under this
subparagraph shall take effect upon
service.
``(B) Effective period of temporary order.--A
temporary order issued under subparagraph (A)
shall remain effective and enforceable, pending
the completion of an administrative proceeding
pursuant to subsection (b)(1) in connection
with the notice of charges--
``(i) until such time as the
Corporation or other appropriate
Federal banking agency dismisses the
charges specified in such notice; or
``(ii) if a cease-and-desist order is
issued against such person, until the
effective date of such order.
``(C) Civil money penalties.--Any violation
of section 18(a)(4) shall be subject to civil
money penalties, as set forth in subsection
(i), except that for any person other than an
insured depository institution or an
institution-affiliated party that is found to
have violated this paragraph, the Corporation
or other appropriate Federal banking agency
shall not be required to demonstrate any loss
to an insured depository institution.''.
(c) Unenforceability of Certain Agreements.--Section 13(c) of
the Federal Deposit Insurance Act (12 U.S.C. 1823(c)) is
amended by adding at the end the following new paragraph:
``(11) Unenforceability of certain agreements.--No
provision contained in any existing or future
standstill, confidentiality, or other agreement that,
directly or indirectly--
``(A) affects, restricts, or limits the
ability of any person to offer to acquire or
acquire,
``(B) prohibits any person from offering to
acquire or acquiring, or
``(C) prohibits any person from using any
previously disclosed information in connection
with any such offer to acquire or acquisition
of,
all or part of any insured depository institution,
including any liabilities, assets, or interest therein,
in connection with any transaction in which the
Corporation exercises its authority under section 11 or
13, shall be enforceable against or impose any
liability on such person, as such enforcement or
liability shall be contrary to public policy.''.
(d) Technical and Conforming Amendments.--Section 18 of the
Federal Deposit Insurance Act (12 U.S.C. 1828) is amended--
(1) in subsection (a)(3)--
(A) by striking ``this subsection'' the first
place that term appears and inserting
``paragraph (1)''; and
(B) by striking ``this subsection'' the
second place that term appears and inserting
``paragraph (2)''; and
(2) in the heading for subsection (a), by striking
``Insurance Logo.--'' and inserting ``Representations
of Deposit Insurance.--''.
SEC. 127. COOPERATION WITH THE FBI.
Any Federal financial regulatory agency shall cooperate with
the Federal Bureau of Investigation and other law enforcement
agencies investigating fraud, misrepresentation, and
malfeasance with respect to development, advertising, and sale
of financial products.
SEC. 128. ACCELERATION OF EFFECTIVE DATE.
Section 203 of the Financial Services Regulatory Relief Act
of 2006 (12 U.S.C. 461 note) is amended by striking ``October
1, 2011'' and inserting ``October 1, 2008''.
SEC. 129. DISCLOSURES ON EXERCISE OF LOAN AUTHORITY.
(a) In General.--Not later than 7 days after the date on
which the Board exercises its authority under the third
paragraph of section 13 of the Federal Reserve Act (12 U.S.C.
343; relating to discounts for individuals, partnerships, and
corporations) the Board shall provide to the Committee on
Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives
a report which includes--
(1) the justification for exercising the authority;
and
(2) the specific terms of the actions of the Board,
including the size and duration of the lending,
available information concerning the value of any
collateral held with respect to such a loan, the
recipient of warrants or any other potential equity in
exchange for the loan, and any expected cost to the
taxpayers for such exercise.
(b) Periodic Updates.--The Board shall provide updates to the
Committees specified in subsection (a) not less frequently than
once every 60 days while the subject loan is outstanding,
including--
(1) the status of the loan;
(2) the value of the collateral held by the Federal
reserve bank which initiated the loan; and
(3) the projected cost to the taxpayers of the loan.
(c) Confidentiality.--The information submitted to the
Congress under this section may be kept confidential, upon the
written request of the Chairman of the Board, in which case it
shall made available only to the Chairpersons and Ranking
Members of the Committees described in subsection (a).
(d) Applicability.--The provisions of this section shall be
in force for all uses of the authority provided under section
13 of the Federal Reserve Act occurring during the period
beginning on March 1, 2008 and ending on the after the date of
enactment of this Act, and reports described in subsection (a)
shall be required beginning not later than 30 days after that
date of enactment, with respect to any such exercise of
authority.
(e) Sharing of Information.--Any reports required under this
section shall also be submitted to the Congressional Oversight
Panel established under section 125.
SEC. 130. TECHNICAL CORRECTIONS.
(a) In General.--Section 128(b)(2) of the Truth in Lending
Act (15 U.S.C. 1638(b)(2)), as amended by section 2502 of the
Mortgage Disclosure Improvement Act of 2008 (Public Law 110-
289), is amended--
(1) in subparagraph (A), by striking ``In the case''
and inserting ``Except as provided in subparagraph (G),
in the case''; and
(2) by amending subparagraph (G) to read as follows:
``(G)(i) In the case of an extension of
credit relating to a plan described in section
101(53D) of title 11, United States Code--
``(I) the requirements of
subparagraphs (A) through (E) shall not
apply; and
``(II) a good faith estimate of the
disclosures required under subsection
(a) shall be made in accordance with
regulations of the Board under section
121(c) before such credit is extended,
or shall be delivered or placed in the
mail not later than 3 business days
after the date on which the creditor
receives the written application of the
consumer for such credit, whichever is
earlier.
``(ii) If a disclosure statement furnished
within 3 business days of the written
application (as provided under clause (i)(II))
contains an annual percentage rate which is
subsequently rendered inaccurate, within the
meaning of section 107(c), the creditor shall
furnish another disclosure statement at the
time of settlement or consummation of the
transaction.''.
(b) Effective Date.--The amendments made by subsection (a)
shall take effect as if included in the amendments made by
section 2502 of the Mortgage Disclosure Improvement Act of 2008
(Public Law 110-289).
SEC. 131. EXCHANGE STABILIZATION FUND REIMBURSEMENT.
(a) Reimbursement.--The Secretary shall reimburse the
Exchange Stabilization Fund established under section 5302 of
title 31, United States Code, for any funds that are used for
the Treasury Money Market Funds Guaranty Program for the United
States money market mutual fund industry, from funds under this
Act.
(b) Limits on Use of Exchange Stabilization Fund.--The
Secretary is prohibited from using the Exchange Stabilization
Fund for the establishment of any future guaranty programs for
the United States money market mutual fund industry.
SEC. 132. AUTHORITY TO SUSPEND MARK-TO-MARKET ACCOUNTING.
(a) Authority.--The Securities and Exchange Commission shall
have the authority under the securities laws (as such term is
defined in section 3(a)(47) of the Securities Exchange Act of
1934 (15 U.S.C. 78c(a)(47)) to suspend, by rule, regulation, or
order, the application of Statement Number 157 of the Financial
Accounting Standards Board for any issuer (as such term is
defined in section 3(a)(8) of such Act) or with respect to any
class or category of transaction if the Commission determines
that is necessary or appropriate in the public interest and is
consistent with the protection of investors.
(b) Savings Provision.--Nothing in subsection (a) shall be
construed to restrict or limit any authority of the Securities
and Exchange Commission under securities laws as in effect on
the date of enactment of this Act.
SEC. 133. STUDY ON MARK-TO-MARKET ACCOUNTING.
(a) Study.--The Securities and Exchange Commission, in
consultation with the Board and the Secretary, shall conduct a
study on mark-to-market accounting standards as provided in
Statement Number 157 of the Financial Accounting Standards
Board, as such standards are applicable to financial
institutions, including depository institutions. Such a study
shall consider at a minimum--
(1) the effects of such accounting standards on a
financial institution's balance sheet;
(2) the impacts of such accounting on bank failures
in 2008;
(3) the impact of such standards on the quality of
financial information available to investors;
(4) the process used by the Financial Accounting
Standards Board in developing accounting standards;
(5) the advisability and feasibility of modifications
to such standards; and
(6) alternative accounting standards to those
provided in such Statement Number 157.
(b) Report.--The Securities and Exchange Commission shall
submit to Congress a report of such study before the end of the
90-day period beginning on the date of the enactment of this
Act containing the findings and determinations of the
Commission, including such administrative and legislative
recommendations as the Commission determines appropriate.
SEC. 134. RECOUPMENT.
Upon the expiration of the 5-year period beginning upon the
date of the enactment of this Act, the Director of the Office
of Management and Budget, in consultation with the Director of
the Congressional Budget Office, shall submit a report to the
Congress on the net amount within the Troubled Asset Relief
Program under this Act. In any case where there is a shortfall,
the President shall submit a legislative proposal that recoups
from the financial industry an amount equal to the shortfall in
order to ensure that the Troubled Asset Relief Program does not
add to the deficit or national debt.
SEC. 135. PRESERVATION OF AUTHORITY.
With the exception of section 131, nothing in this Act may be
construed to limit the authority of the Secretary or the Board
under any other provision of law.
TITLE II--BUDGET-RELATED PROVISIONS
SEC. 201. INFORMATION FOR CONGRESSIONAL SUPPORT AGENCIES.
Upon request, and to the extent otherwise consistent with
law, all information used by the Secretary in connection with
activities authorized under this Act (including the records to
which the Comptroller General is entitled under this Act) shall
be made available to congressional support agencies (in
accordance with their obligations to support the Congress as
set out in their authorizing statutes) for the purposes of
assisting the committees of Congress with conducting oversight,
monitoring, and analysis of the activities authorized under
this Act.
SEC. 202. REPORTS BY THE OFFICE OF MANAGEMENT AND BUDGET AND THE
CONGRESSIONAL BUDGET OFFICE.
(a) Reports by the Office of Management and Budget.--Within
60 days of the first exercise of the authority granted in
section 101(a), but in no case later than December 31, 2008,
and semiannually thereafter, the Office of Management and
Budget shall report to the President and the Congress--
(1) the estimate, notwithstanding section 502(5)(F)
of the Federal Credit Reform Act of 1990 (2 U.S.C.
661a(5)(F)), as of the first business day that is at
least 30 days prior to the issuance of the report, of
the cost of the troubled assets, and guarantees of the
troubled assets, determined in accordance with section
123;
(2) the information used to derive the estimate,
including assets purchased or guaranteed, prices paid,
revenues received, the impact on the deficit and debt,
and a description of any outstanding commitments to
purchase troubled assets; and
(3) a detailed analysis of how the estimate has
changed from the previous report.
Beginning with the second report under subsection (a), the
Office of Management and Budget shall explain the differences
between the Congressional Budget Office estimates delivered in
accordance with subsection (b) and prior Office of Management
and Budget estimates.
(b) Reports by the Congressional Budget Office.--Within 45
days of receipt by the Congress of each report from the Office
of Management and Budget under subsection (a), the
Congressional Budget Office shall report to the Congress the
Congressional Budget Office's assessment of the report
submitted by the Office of Management and Budget, including--
(1) the cost of the troubled assets and guarantees of
the troubled assets,
(2) the information and valuation methods used to
calculate such cost, and
(3) the impact on the deficit and the debt.
(c) Financial Expertise.--In carrying out the duties in this
subsection or performing analyses of activities under this Act,
the Director of the Congressional Budget Office may employ
personnel and procure the services of experts and consultants.
(d) Authorization of Appropriations.--There are authorized to
be appropriated such sums as may be necessary to produce
reports required by this section.
SEC. 203. ANALYSIS IN PRESIDENT'S BUDGET.
(a) In General.--Section 1105(a) of title 31, United States
Code, is amended by adding at the end the following new
paragraph:
``(35) as supplementary materials, a separate
analysis of the budgetary effects for all prior fiscal
years, the current fiscal year, the fiscal year for
which the budget is submitted, and ensuing fiscal years
of the actions the Secretary of the Treasury has taken
or plans to take using any authority provided in the
Emergency Economic Stabilization Act of 2008,
including--
``(A) an estimate of the current value of all
assets purchased, sold, and guaranteed under
the authority provided in the Emergency
Economic Stabilization Act of 2008 using
methodology required by the Federal Credit
Reform Act of 1990 (2 U.S.C. 661 et seq.) and
section 123 of the Emergency Economic
Stabilization Act of 2008;
``(B) an estimate of the deficit, the debt
held by the public, and the gross Federal debt
using methodology required by the Federal
Credit Reform Act of 1990 and section 123 of
the Emergency Economic Stabilization Act of
2008;
``(C) an estimate of the current value of all
assets purchased, sold, and guaranteed under
the authority provided in the Emergency
Economic Stabilization Act of 2008 calculated
on a cash basis;
``(D) a revised estimate of the deficit, the
debt held by the public, and the gross Federal
debt, substituting the cash-based estimates in
subparagraph (C) for the estimates calculated
under subparagraph (A) pursuant to the Federal
Credit Reform Act of 1990 and section 123 of
the Emergency Economic Stabilization Act of
2008; and
``(E) the portion of the deficit which can be
attributed to any action taken by the Secretary
using authority provided by the Emergency
Economic Stabilization Act of 2008 and the
extent to which the change in the deficit since
the most recent estimate is due to a reestimate
using the methodology required by the Federal
Credit Reform Act of 1990 and section 123 of
the Emergency Economic Stabilization Act of
2008.''
(b) Consultation.--In implementing this section, the Director
of Office of Management and Budget shall consult periodically,
but at least annually, with the Committee on the Budget of the
House of Representatives, the Committee on the Budget of the
Senate, and the Director of the Congressional Budget Office.
(c) Effective Date.--This section and the amendment made by
this section shall apply beginning with respect to the fiscal
year 2010 budget submission of the President.
SEC. 204. EMERGENCY TREATMENT.
All provisions of this Act are designated as an emergency
requirement and necessary to meet emergency needs pursuant to
section 204(a) of S. Con. Res 21 (110th Congress), the
concurrent resolution on the budget for fiscal year 2008 and
rescissions of any amounts provided in this Act shall not be
counted for purposes of budget enforcement.
TITLE III--TAX PROVISIONS
SEC. 301. GAIN OR LOSS FROM SALE OR EXCHANGE OF CERTAIN PREFERRED
STOCK.
(a) In General.--For purposes of the Internal Revenue Code of
1986, gain or loss from the sale or exchange of any applicable
preferred stock by any applicable financial institution shall
be treated as ordinary income or loss.
(b) Applicable Preferred Stock.--For purposes of this
section, the term ``applicable preferred stock'' means any
stock--
(1) which is preferred stock in--
(A) the Federal National Mortgage
Association, established pursuant to the
Federal National Mortgage Association Charter
Act (12 U.S.C. 1716 et seq.), or
(B) the Federal Home Loan Mortgage
Corporation, established pursuant to the
Federal Home Loan Mortgage Corporation Act (12
U.S.C. 1451 et seq.), and
(2) which--
(A) was held by the applicable financial
institution on September 6, 2008, or
(B) was sold or exchanged by the applicable
financial institution on or after January 1,
2008, and before September 7, 2008.
(c) Applicable Financial Institution.--For purposes of this
section:
(1) In general.--Except as provided in paragraph (2),
the term ``applicable financial institution'' means--
(A) a financial institution referred to in
section 582(c)(2) of the Internal Revenue Code
of 1986, or
(B) a depository institution holding company
(as defined in section 3(w)(1) of the Federal
Deposit Insurance Act (12 U.S.C. 1813(w)(1))).
(2) Special rules for certain sales.--In the case
of--
(A) a sale or exchange described in
subsection (b)(2)(B), an entity shall be
treated as an applicable financial institution
only if it was an entity described in
subparagraph (A) or (B) of paragraph (1) at the
time of the sale or exchange, and
(B) a sale or exchange after September 6,
2008, of preferred stock described in
subsection (b)(2)(A), an entity shall be
treated as an applicable financial institution
only if it was an entity described in
subparagraph (A) or (B) of paragraph (1) at all
times during the period beginning on September
6, 2008, and ending on the date of the sale or
exchange of the preferred stock.
(d) Special Rule for Certain Property Not Held on September
6, 2008.--The Secretary of the Treasury or the Secretary's
delegate may extend the application of this section to all or a
portion of the gain or loss from a sale or exchange in any case
where--
(1) an applicable financial institution sells or
exchanges applicable preferred stock after September 6,
2008, which the applicable financial institution did
not hold on such date, but the basis of which in the
hands of the applicable financial institution at the
time of the sale or exchange is the same as the basis
in the hands of the person which held such stock on
such date, or
(2) the applicable financial institution is a partner
in a partnership which--
(A) held such stock on September 6, 2008, and
later sold or exchanged such stock, or
(B) sold or exchanged such stock during the
period described in subsection (b)(2)(B).
(e) Regulatory Authority.--The Secretary of the Treasury or
the Secretary's delegate may prescribe such guidance, rules, or
regulations as are necessary to carry out the purposes of this
section.
(f) Effective Date.--This section shall apply to sales or
exchanges occurring after December 31, 2007, in taxable years
ending after such date.
SEC. 302. SPECIAL RULES FOR TAX TREATMENT OF EXECUTIVE COMPENSATION OF
EMPLOYERS PARTICIPATING IN THE TROUBLED ASSETS
RELIEF PROGRAM.
(a) Denial of Deduction.--Subsection (m) of section 162 of
the Internal Revenue Code of 1986 is amended by adding at the
end the following new paragraph:
``(5) Special rule for application to employers
participating in the troubled assets relief program.--
``(A) In general.--In the case of an
applicable employer, no deduction shall be
allowed under this chapter--
``(i) in the case of executive
remuneration for any applicable taxable
year which is attributable to services
performed by a covered executive during
such applicable taxable year, to the
extent that the amount of such
remuneration exceeds $500,000, or
``(ii) in the case of deferred
deduction executive remuneration for
any taxable year for services performed
during any applicable taxable year by a
covered executive, to the extent that
the amount of such remuneration exceeds
$500,000 reduced (but not below zero)
by the sum of--
``(I) the executive
remuneration for such
applicable taxable year, plus
``(II) the portion of the
deferred deduction executive
remuneration for such services
which was taken into account
under this clause in a
preceding taxable year.
``(B) Applicable employer.--For purposes of
this paragraph--
``(i) In general.--Except as provided
in clause (ii), the term `applicable
employer' means any employer from whom
1 or more troubled assets are acquired
under a program established by the
Secretary under section 101(a) of the
Emergency Economic Stabilization Act of
2008 if the aggregate amount of the
assets so acquired for all taxable
years exceeds $300,000,000.
``(ii) Disregard of certain assets
sold through direct purchase.--If the
only sales of troubled assets by an
employer under the program described in
clause (i) are through 1 or more direct
purchases (within the meaning of
section 113(c) of the Emergency
Economic Stabilization Act of 2008),
such assets shall not be taken into
account under clause (i) in determining
whether the employer is an applicable
employer for purposes of this
paragraph.
``(iii) Aggregation rules.--Two or
more persons who are treated as a
single employer under subsection (b) or
(c) of section 414 shall be treated as
a single employer, except that in
applying section 1563(a) for purposes
of either such subsection, paragraphs
(2) and (3) thereof shall be
disregarded.
``(C) Applicable taxable year.--For purposes
of this paragraph, the term `applicable taxable
year' means, with respect to any employer--
``(i) the first taxable year of the
employer--
``(I) which includes any
portion of the period during
which the authorities under
section 101(a) of the Emergency
Economic Stabilization Act of
2008 are in effect (determined
under section 120 thereof), and
``(II) in which the aggregate
amount of troubled assets
acquired from the employer
during the taxable year
pursuant to such authorities
(other than assets to which
subparagraph (B)(ii) applies),
when added to the aggregate
amount so acquired for all
preceding taxable years,
exceeds $300,000,000, and
``(ii) any subsequent taxable year
which includes any portion of such
period.
``(D) Covered executive.--For purposes of
this paragraph--
``(i) In general.--The term `covered
executive' means, with respect to any
applicable taxable year, any employee--
``(I) who, at any time during
the portion of the taxable year
during which the authorities
under section 101(a) of the
Emergency Economic
Stabilization Act of 2008 are
in effect (determined under
section 120 thereof), is the
chief executive officer of the
applicable employer or the
chief financial officer of the
applicable employer, or an
individual acting in either
such capacity, or
``(II) who is described in
clause (ii).
``(ii) Highest compensated
employees.--An employee is described in
this clause if the employee is 1 of the
3 highest compensated officers of the
applicable employer for the taxable
year (other than an individual
described in clause (i)(I)),
determined--
``(I) on the basis of the
shareholder disclosure rules
for compensation under the
Securities Exchange Act of 1934
(without regard to whether
those rules apply to the
employer), and
``(II) by only taking into
account employees employed
during the portion of the
taxable year described in
clause (i)(I).
``(iii) Employee remains covered
executive.--If an employee is a covered
executive with respect to an applicable
employer for any applicable taxable
year, such employee shall be treated as
a covered executive with respect to
such employer for all subsequent
applicable taxable years and for all
subsequent taxable years in which
deferred deduction executive
remuneration with respect to services
performed in all such applicable
taxable years would (but for this
paragraph) be deductible.
``(E) Executive remuneration.--For purposes
of this paragraph, the term `executive
remuneration' means the applicable employee
remuneration of the covered executive, as
determined under paragraph (4) without regard
to subparagraphs (B), (C), and (D) thereof.
Such term shall not include any deferred
deduction executive remuneration with respect
to services performed in a prior applicable
taxable year.
``(F) Deferred deduction executive
remuneration.--For purposes of this paragraph,
the term `deferred deduction executive
remuneration' means remuneration which would be
executive remuneration for services performed
in an applicable taxable year but for the fact
that the deduction under this chapter
(determined without regard to this paragraph)
for such remuneration is allowable in a
subsequent taxable year.
``(G) Coordination.--Rules similar to the
rules of subparagraphs (F) and (G) of paragraph
(4) shall apply for purposes of this paragraph.
``(H) Regulatory authority.--The Secretary
may prescribe such guidance, rules, or
regulations as are necessary to carry out the
purposes of this paragraph and the Emergency
Economic Stabilization Act of 2008, including
the extent to which this paragraph applies in
the case of any acquisition, merger, or
reorganization of an applicable employer.''.
(b) Golden Parachute Rule.--Section 280G of the Internal
Revenue Code of 1986 is amended--
(1) by redesignating subsection (e) as subsection
(f), and
(2) by inserting after subsection (d) the following
new subsection:
``(e) Special Rule for Application to Employers Participating
in the Troubled Assets Relief Program.--
``(1) In general.--In the case of the severance from
employment of a covered executive of an applicable
employer during the period during which the authorities
under section 101(a) of the Emergency Economic
Stabilization Act of 2008 are in effect (determined
under section 120 of such Act), this section shall be
applied to payments to such executive with the
following modifications:
``(A) Any reference to a disqualified
individual (other than in subsection (c)) shall
be treated as a reference to a covered
executive.
``(B) Any reference to a change described in
subsection (b)(2)(A)(i) shall be treated as a
reference to an applicable severance from
employment of a covered executive, and any
reference to a payment contingent on such a
change shall be treated as a reference to any
payment made during an applicable taxable year
of the employer on account of such applicable
severance from employment.
``(C) Any reference to a corporation shall be
treated as a reference to an applicable
employer.
``(D) The provisions of subsections
(b)(2)(C), (b)(4), (b)(5), and (d)(5) shall not
apply.
``(2) Definitions and special rules.--For purposes of
this subsection:
``(A) Definitions.--Any term used in this
subsection which is also used in section
162(m)(5) shall have the meaning given such
term by such section.
``(B) Applicable severance from employment.--
The term `applicable severance from employment'
means any severance from employment of a
covered executive--
``(i) by reason of an involuntary
termination of the executive by the
employer, or
``(ii) in connection with any
bankruptcy, liquidation, or
receivership of the employer.
``(C) Coordination and other rules.--
``(i) In general.--If a payment which
is treated as a parachute payment by
reason of this subsection is also a
parachute payment determined without
regard to this subsection, this
subsection shall not apply to such
payment.
``(ii) Regulatory authority.--The
Secretary may prescribe such guidance,
rules, or regulations as are
necessary--
``(I) to carry out the
purposes of this subsection and
the Emergency Economic
Stabilization Act of 2008,
including the extent to which
this subsection applies in the
case of any acquisition,
merger, or reorganization of an
applicable employer,
``(II) to apply this section
and section 4999 in cases where
one or more payments with
respect to any individual are
treated as parachute payments
by reason of this subsection,
and other payments with respect
to such individual are treated
as parachute payments under
this section without regard to
this subsection, and
``(III) to prevent the
avoidance of the application of
this section through the
mischaracterization of a
severance from employment as
other than an applicable
severance from employment.''.
(c) Effective Dates.--
(1) In general.--The amendment made by subsection (a)
shall apply to taxable years ending on or after the
date of the enactment of this Act.
(2) Golden parachute rule.--The amendments made by
subsection (b) shall apply to payments with respect to
severances occurring during the period during which the
authorities under section 101(a) of this Act are in
effect (determined under section 120 of this Act).
SEC. 303. EXTENSION OF EXCLUSION OF INCOME FROM DISCHARGE OF QUALIFIED
PRINCIPAL RESIDENCE INDEBTEDNESS.
(a) Extension.--Subparagraph (E) of section 108(a)(1) of the
Internal Revenue Code of 1986 is amended by striking ``January
1, 2010'' and inserting ``January 1, 2013''.
(b) Effective Date.--The amendment made by this subsection
shall apply to discharges of indebtedness occurring on or after
January 1, 2010.