110 HR 7264 IH: Government-Sponsored Enterprises Free Market Reform Act of 2008
U.S. House of Representatives
2008-10-03
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.
(a)This Act may be cited as the Reliable Economic Stabilization, Capital Utilization, and Enterprise Reform Act of 2008
.
(b)The table of contents for this Act is as follows:
Sec. 1. Short title, etc.
Title I—Incentives for Economic Stabilization and Capital Utilization
Sec. 101. Reduction in capital gain rate for sales and exchanges for certain troubled assets.
Sec. 102. 5-year carryback of losses.
Sec. 103. Incentives to reinvest foreign earnings in United States.
Sec. 104. Gain or loss from sale or exchange of certain preferred stock.
Sec. 105. Repeal of Community Reinvestment Act.
Sec. 106. Net worth certificate program.
Title II—Government-Sponsored Enterprises Free Market Reform
Sec. 201. Short title.
Sec. 202. Definitions.
Sec. 203. Termination of current conservatorship.
Sec. 204. Limitation of enterprise authority upon emergence from conservatorship.
Sec. 205. Requirement to periodically renew charter until wind down and dissolution.
Sec. 206. Required wind down of operations and dissolution of enterprise.
<enum>I</enum><header>Incentives for Economic Stabilization and Capital Utilization</header>
<section id="H7A5D9B3CB27141B4B55F7C1F4D9DAAF" section-type="subsequent-section"><enum>101.</enum><header>Reduction in capital gain rate for sales and exchanges for certain troubled assets</header>
<subsection id="H5CB35DFEE11C4799BB2270FCED09716B"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Part I of subchapter P of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> of the Internal Revenue Code of 1986 (relating to treatment of capital gains) is amended by adding at the end the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H7F1F0BFF3F914CEBA09DF55400B4EB6" style="OLC">
<section id="H3B035E6C7FA54F038FCAE7727EEF6617"><enum>1203.</enum><header>Gain on troubled assets</header>
<subsection id="H556A95AFC82546F28C49000137F5A63F"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Gross income shall not include the applicable percentage of any gain from the sale or exchange of a troubled asset held for more than 1 year.</text> </subsection>
<subsection id="H6A92252FA17E4E0AAB00EAD7836CD2F1"><enum>(b)</enum><header>Applicable percentage</header><text display-inline="yes-display-inline">For purposes of subsection (a), the applicable percentage shall be determined in accordance with the following table:</text>
<table align-to-level="section" blank-lines-before="1" colsep="0" frame="none" line-rules="no-gen" rowsep="0" rule-weights="0.0.0.0.0.0" table-template-name="Generic: 2 text, 1 num" table-type="">
<tgroup cols="3" grid-typeface="1.1" rowsep="0" thead-tbody-ldg-size="10.10.10" ttitle-size="10"><colspec coldef="txt" colname="column1" colwidth="184pts" min-data-value="120"/><colspec coldef="txt" colname="column2" colwidth="213pts" min-data-value="120"/><colspec align="right" coldef="txt-no-ldr" colname="column3" colwidth="81pts" min-data-value="60"/>
<tbody>
<row><entry colname="column1" leader-modify="clr-ldr" nameend="column3" namest="column1" rowsep="0" stub-definition="txt-ldr"></entry> </row>
<row><entry colname="column1" leader-modify="clr-ldr" nameend="column2" namest="column1" rowsep="0" stub-definition="txt-ldr">In the case of sales and exchanges— </entry><entry colname="column3" leader-modify="clr-ldr" rowsep="0">The applicable </entry> </row>
<row><entry colname="column1" leader-modify="clr-ldr" rowsep="0" stub-definition="txt-ldr">After:</entry><entry colname="column2" leader-modify="clr-ldr" rowsep="0">Before:</entry><entry colname="column3" leader-modify="clr-ldr" rowsep="0">percentage is:</entry> </row>
<row><entry align="left" colname="column1" leader-modify="force-ldr-bottom" stub-definition="txt-ldr" stub-hierarchy="1">Date of enactment of this section</entry><entry colname="column2" leader-modify="force-ldr-bottom" rowsep="0">End of 2-year period beginning on such date</entry><entry colname="column3" leader-modify="clr-ldr" rowsep="0">100 percent</entry> </row>
<row><entry align="left" colname="column1" leader-modify="force-ldr-bottom" stub-definition="txt-ldr" stub-hierarchy="1">End of such 2-year period </entry><entry colname="column2" leader-modify="force-ldr-bottom" rowsep="0">End of 4-year period beginning on such date</entry><entry colname="column3" leader-modify="clr-ldr" rowsep="0">67 percent</entry> </row>
<row><entry align="left" colname="column1" leader-modify="force-ldr-bottom" stub-definition="txt-ldr" stub-hierarchy="1">End of such 4-year period</entry><entry colname="column2" leader-modify="force-ldr-bottom" rowsep="0">End of 6-year period beginning on such date</entry><entry colname="column3" leader-modify="clr-ldr" rowsep="0">33 percent</entry> </row>
<row><entry colname="column1" leader-modify="force-ldr-bottom" rowsep="0" stub-definition="txt-ldr">End of such 6-year period</entry><entry colname="column2" leader-modify="force-ldr-bottom" rowsep="0"></entry><entry colname="column3" leader-modify="force-ldr-bottom" rowsep="0">0 percent.</entry> </row> </tbody> </tgroup> </table> </subsection>
<subsection id="H91E6470A0DD745E18B287900637125E7"><enum>(c)</enum><header>Troubled assets</header><text display-inline="yes-display-inline">The term <term>troubled assets</term> means 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 which are acquired after the date of enactment of this section and before January 1, 2010.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="HF3F76DFF310A42C59FEAD68FD2601CC0"><enum>(b)</enum><header>Conforming amendment</header><text display-inline="yes-display-inline">The table of sections for part I of subchapter P of chapter 1 of such Code is amended by adding at the end the following new item:</text>
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<toc container-level="quoted-block-container" idref="H7F1F0BFF3F914CEBA09DF55400B4EB6" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration">
<toc-entry idref="H3B035E6C7FA54F038FCAE7727EEF6617" level="section">Sec. 1203. Gain on troubled assets.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection commented="no" id="HC3025C7DA3284D5B9E07545C7124937D"><enum>(c)</enum><header>Effective date</header><text display-inline="yes-display-inline">The amendments made by this section shall apply to sales and exchanges after the date of the enactment of this Act.</text> </subsection></section>
<section id="H64D8AF81BF6248DBAD509C8236315D68" section-type="subsequent-section"><enum>102.</enum><header>5-year carryback of losses</header>
<subsection id="H8486A264168241F9A49BAE7E94D17158"><enum>(a)</enum><header>In general</header><text>Subparagraph (H) of <external-xref legal-doc="usc" parsable-cite="usc/26/172">section 172(b)(1)</external-xref> of the Internal Revenue Code of 1986 is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H193EA30BDA634573A69B8F36C36ECF00" style="OLC">
<subparagraph id="H391C41B0A5D74A6DAC70E4C7B79DBB3"><enum>(H)</enum><header>5-year carryback of certain losses</header>
<clause id="H851A39187B174F698EBCE217FF001819"><enum>(i)</enum><header>Taxable years ending during 2001 and 2002</header><text>In the case of a net operating loss for any taxable year ending during 2001 or 2002, subparagraph (A)(i) shall be applied by substituting <quote>5</quote> for <quote>2</quote> and subparagraph (F) shall not apply.</text> </clause>
<clause id="H3FC9F45D921749659BA8788DA4539A"><enum>(ii)</enum><header>Taxable years ending during 2007, 2008, and 2009</header><text>In the case of a net operating loss for any taxable year ending during 2007, 2008, or 2009—</text>
<subclause id="H8823796C86114E929C1F42C1CB272E18"><enum>(I)</enum><text>subparagraph (A)(i) shall be applied by substituting <quote>5</quote> for <quote>2</quote>,</text> </subclause>
<subclause id="H6E8348D9DAFE45ADA261C6D7EB52AB40"><enum>(II)</enum><text>subparagraph (E)(ii) shall be applied by substituting <quote>4</quote> for <quote>2</quote>, and</text> </subclause>
<subclause id="H5B0EC55722994DBDACD72AC4377823E"><enum>(III)</enum><text>subparagraph (F) shall not apply.</text> </subclause></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection display-inline="no-display-inline" id="H57A219D96635493FBF8F29412E1EAAB2"><enum>(b)</enum><header>Temporary suspension of 90 percent limit on certain NOL carrybacks and carryovers</header>
<paragraph id="HBD88DAF38CFF4C1D9C267590BE21920"><enum>(1)</enum><header>In general</header><text>Subclause (I) of section 56(d)(1)(A)(ii) of such Code is amended—</text>
<subparagraph id="H23DC387423E94124B5D6D06BCB827811"><enum>(A)</enum><text>by inserting <quote>and 2007, 2008, or 2009</quote> after <quote>2001 or 2002</quote>, and</text> </subparagraph>
<subparagraph id="H675626F9E7CC473698BBF9EA5030A400"><enum>(B)</enum><text display-inline="yes-display-inline">by inserting <quote>and 2007, 2008, and 2009</quote> after <quote>2001 and 2002</quote>.</text> </subparagraph></paragraph>
<paragraph id="H3D7FDC30AF094C5499EF8D44266B00FE"><enum>(2)</enum><header>Conforming amendment</header><text>Subclause (I) of section 56(d)(1)(A)(i) of such Code is amended by inserting <quote>amount of such</quote> before <quote>deduction described in clause (ii)(I)</quote>.</text> </paragraph></subsection>
<subsection display-inline="no-display-inline" id="H81FC3CE627814001A62179E72F5DDB7C"><enum>(c)</enum><header>Anti-abuse rules</header><text display-inline="yes-display-inline">The Secretary of the Treasury or the Secretary’s designee shall prescribe such rules as are necessary to prevent the abuse of the purposes of the amendments made by this section, including antistuffing rules, antichurning rules (including rules relating to sale-leasebacks), and rules similar to the rules under <external-xref legal-doc="usc" parsable-cite="usc/26/1091">section 1091</external-xref> of the Internal Revenue Code of 1986 relating to losses from wash sales.</text> </subsection>
<subsection display-inline="no-display-inline" id="H7B51A8317BD1450EB19648BD006D8494"><enum>(d)</enum><header>Effective dates</header>
<paragraph id="H4CBE9849DDEE4675B4F327D3762F947C"><enum>(1)</enum><header>Subsection <enum-in-header>(a)</enum-in-header></header>
<subparagraph id="HBC3D011E583249F289296956F92419EF"><enum>(A)</enum><header>In general</header><text>Except as provided in subparagraph (B), the amendments made by subsection (a) shall apply to net operating losses arising in taxable years ending in 2007, 2008, or 2009.</text> </subparagraph>
<subparagraph id="H1B292B77A0174649B4F07D8700B7C25"><enum>(B)</enum><header>Election</header><text>In the case of any taxpayer with a net operating loss for a taxable year ending during 2007 or 2008—</text>
<clause id="HF9C571274CA346D3BD42CE229DBFC8F2"><enum>(i)</enum><text>any election made under <external-xref legal-doc="usc" parsable-cite="usc/26/172">section 172(b)(3)</external-xref> of the Internal Revenue Code of 1986 may not withstanding such section) be revoked before October 15, 2009, and</text> </clause>
<clause id="HB1AA33A3A21F4FB29754FBA8EED238D8"><enum>(ii)</enum><text>any election made under section 172(j) of such Code shall (notwithstanding such section) be treated as timely made if made before October 15, 2009.</text> </clause></subparagraph></paragraph>
<paragraph id="H74968246EED543E199AC42BEE4CA1DE5"><enum>(2)</enum><header>Subsection <enum-in-header>(b)</enum-in-header></header><text>The amendments made by subsection (b) shall apply to taxable years ending after December 31, 2006.</text> </paragraph></subsection></section>
<section id="H387B563E6AC44DDA86EA9933CFEE7C98" section-type="subsequent-section"><enum>103.</enum><header>Incentives to reinvest foreign earnings in United States</header>
<subsection id="HBBDB566A16FC4745A0E9D1C5A6DD2C64"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/965">Section 965</external-xref> of the Internal Revenue Code of 1986 is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HD2F239F1D88C40AA00C9AE11F9B9707" style="OLC">
<section id="H2F81E4B8A4174B5EA233632F17007211"><enum>965.</enum><header>Deduction for dividends received</header>
<subsection id="H2715C99036D240F3A7FB9D59C85E79FE"><enum>(a)</enum><header>Deduction</header>
<paragraph id="H8A6930551528413E92CA21BC955CC288"><enum>(1)</enum><header>In general</header><text>In the case of a corporation which is a United States shareholder and for which the election under this section is in effect for the taxable year, there shall be allowed as a deduction an amount equal to the applicable percentage of cash dividends which are received during such taxable year by such shareholder from controlled foreign corporations.</text> </paragraph>
<paragraph id="H9564384512EF4A1A8B04BDE84DD8D4F"><enum>(2)</enum><header>Applicable percentage</header><text>For purposes of paragraph (1)—</text>
<subparagraph id="H6E638CEAF6AA4A9B00AC004B4CF04135"><enum>(A)</enum><header>In general</header><text>Except as provided by subparagraph (B), the term <term>applicable percentage</term> means 85 percent.</text> </subparagraph>
<subparagraph id="H8C7A22FFC3AB437F9360343C6BF4F0A6"><enum>(B)</enum><header>Distressed debt</header><text>In the case of dividends received with respect to which the requirements of subsection (b)(4)(B) are met, such term means 100 percent.</text> </subparagraph></paragraph>
<paragraph id="H01AA3D5155984264930036EDA5E20720"><enum>(3)</enum><header>Dividends paid indirectly from controlled foreign corporations</header><text>If, within the taxable year for which the election under this section is in effect, a United States shareholder receives a cash distribution from a controlled foreign corporation which is excluded from gross income under section 959(a), such distribution shall be treated for purposes of this section as a cash dividend to the extent of any amount included in income by such United States shareholder under section 951(a)(1)(A) as a result of any cash dividend during such taxable year to—</text>
<subparagraph id="H2E0DDF514D5F433FA65407B97591CE92"><enum>(A)</enum><text>such controlled foreign corporation from another controlled foreign corporation that is in a chain of ownership described in section 958(a), or</text> </subparagraph>
<subparagraph id="H4E7527B240694A25A763766BE3325399"><enum>(B)</enum><text>any other controlled foreign corporation in such chain of ownership, but only to the extent of cash distributions described in section 959(b) which are made during such taxable year to the controlled foreign corporation from which such United States shareholder received such distribution.</text> </subparagraph></paragraph></subsection>
<subsection id="H3B73AB416AE84A75971747CD8E422F61"><enum>(b)</enum><header>Limitations</header>
<paragraph id="H8FCF43B8F4224CE8A02B82B9BFB2E3CC"><enum>(1)</enum><header>In general</header><text>The amount of dividends taken into account under subsection (a) shall not exceed the greater of—</text>
<subparagraph id="H9DD4E7C1CF464F13BC30B2925DA6286"><enum>(A)</enum><text>$500,000,000,</text> </subparagraph>
<subparagraph id="H90951E9E055749B3A1009BC84007CA6"><enum>(B)</enum><text>the amount shown on the applicable financial statement as earnings permanently reinvested outside the United States, or</text> </subparagraph>
<subparagraph id="HD7C04584361145F797B2E3DD339D91C"><enum>(C)</enum><text>in the case of an applicable financial statement which fails to show a specific amount of earnings permanently reinvested outside the United States and which shows a specific amount of tax liability attributable to such earnings, the amount equal to the amount of such liability divided by 0.35.</text> </subparagraph><continuation-text continuation-text-level="paragraph">The amounts described in subparagraphs (B) and (C) shall be treated as being zero if there is no such statement or such statement fails to show a specific amount of such earnings or liability, as the case may be.</continuation-text></paragraph>
<paragraph id="H82FEBF19AEE04636A4B17C816B3CE464"><enum>(2)</enum><header>Dividends must be extraordinary</header><text>The amount of dividends taken into account under subsection (a) shall not exceed the excess (if any) of—</text>
<subparagraph id="H1CDA62BA67814ED38FB37DB06C0643F2"><enum>(A)</enum><text>the cash dividends received during the taxable year by such shareholder from controlled foreign corporations, over</text> </subparagraph>
<subparagraph id="HC15F70B590EB4483A421CBCE61C818C9"><enum>(B)</enum><text>the sum of—</text>
<clause id="HE2699B4BADC844E98F374CD20032D500"><enum>(i)</enum><text>the dividends received during the base period year by such shareholder from controlled foreign corporations,</text> </clause>
<clause id="H683337BAC6D249429CF3284F10FD91EF"><enum>(ii)</enum><text>the amounts includible in such shareholder’s gross income for the base period year under section 951(a)(1)(B) with respect to controlled foreign corporations, and</text> </clause>
<clause id="HFC1BB0098B2841B1B926923CB3C16044"><enum>(iii)</enum><text>the amounts that would have been included for the base period year but for section 959(a) with respect to controlled foreign corporations.</text> </clause><continuation-text continuation-text-level="subparagraph">The amount taken into account under clause (iii) for the base period year shall not include any amount which is not includible in gross income by reason of an amount described in clause (ii) with respect to a prior taxable year. Amounts described in subparagraph (B) for the base period year shall be such amounts as shown on the most recent return filed for such year; except that amended returns filed after June 30, 2007, shall not be taken into account.</continuation-text></subparagraph></paragraph>
<paragraph id="H1E57F56173D944899BAFC9345EBF64F5"><enum>(3)</enum><header>Reduction of benefit if increase in related party indebtedness</header><text>The amount of dividends which would (but for this paragraph) be taken into account under subsection (a) shall be reduced by the excess (if any) of—</text>
<subparagraph id="H8A21119779DA4D319BA61CBB7BB1B123"><enum>(A)</enum><text>the amount of indebtedness of the controlled foreign corporation to any related person (as defined in section 954(d)(3)) as of the close of the taxable year for which the election under this section is in effect, over</text> </subparagraph>
<subparagraph id="HCAF99D2A5608496E0006A7F657B99971"><enum>(B)</enum><text>the amount of indebtedness of the controlled foreign corporation to any related person (as so defined) as of the close of September 26, 2008.</text> </subparagraph><continuation-text continuation-text-level="paragraph">All controlled foreign corporations with respect to which the taxpayer is a United States shareholder shall be treated as 1 controlled foreign corporation for purposes of this paragraph. The Secretary may prescribe such regulations as may be necessary or appropriate to prevent the avoidance of the purposes of this paragraph, including regulations which provide that cash dividends shall not be taken into account under subsection (a) to the extent such dividends are attributable to the direct or indirect transfer (including through the use of intervening entities or capital contributions) of cash or other property from a related person (as so defined) to a controlled foreign corporation.</continuation-text></paragraph>
<paragraph id="HFA471C096F3F46E98754EA7E7456CE25"><enum>(4)</enum><header>Requirements</header>
<subparagraph id="H812E73245DA2455284521283F25D772B"><enum>(A)</enum><header>Requirement to invest in United States</header><text display-inline="yes-display-inline">Except as provided by subparagraph (B), subsection (a) shall not apply to any dividend received by a United States shareholder unless the amount of the dividend is invested in the United States pursuant to a domestic reinvestment plan which—</text>
<clause id="HD0162F51991A4D32BFF1C5301ED7D800"><enum>(i)</enum><text>is approved by the taxpayer’s president, chief executive officer, or comparable official before the payment of such dividend and subsequently approved by the taxpayer’s board of directors, management committee, executive committee, or similar body, and</text> </clause>
<clause id="HB5510E2D810348C8BB228371C932F7D8"><enum>(ii)</enum><text>provides for the reinvestment of such dividend in the United States (other than as payment for executive compensation), including as a source for the funding of worker hiring and training, infrastructure, research and development, capital investments, or the financial stabilization of the corporation for the purposes of job retention or creation.</text> </clause></subparagraph>
<subparagraph id="HFFEC77C603BE44ADAD092428B3979300"><enum>(B)</enum><header>Distressed debt</header><text display-inline="yes-display-inline">The requirements of this subparagraph are met if amounts repatriated are invested in distressed debt (as defined by the Secretary) for at least one year.</text> </subparagraph></paragraph></subsection>
<subsection id="H941E00D59996409494444EA8E6D7EDE5"><enum>(c)</enum><header>Definitions and special rules</header><text display-inline="yes-display-inline">For purposes of this section—</text>
<paragraph id="HE7BD5CCC627049F29E1F13C5E19A800"><enum>(1)</enum><header>Applicable financial statement</header><text display-inline="yes-display-inline">The term <term>applicable financial statement</term> means—</text>
<subparagraph id="HEF76A868CD5045DC00AAFED9E0CF8C40"><enum>(A)</enum><text>with respect to a United States shareholder which is required to file a financial statement with the Securities and Exchange Commission (or which is included in such a statement so filed by another person), the most recent audited annual financial statement (including the notes which form an integral part of such statement) of such shareholder (or which includes such shareholder)—</text>
<clause id="HFB4E1BF6BFB04D7081F5AEDBE956C3A3"><enum>(i)</enum><text>which was so filed on or before June 30, 2007, and</text> </clause>
<clause id="H0B84C00AF0D041C68DB299DAE83B0003"><enum>(ii)</enum><text>which was certified on or before June 30, 2007, as being prepared in accordance with generally accepted accounting principles, and</text> </clause></subparagraph>
<subparagraph id="H7663974A3DD14F0900BC7CEB84B788A9"><enum>(B)</enum><text>with respect to any other United States shareholder, the most recent audited financial statement (including the notes which form an integral part of such statement) of such shareholder (or which includes such shareholder)—</text>
<clause id="H7B725C23ECD040BFAF4CD46FCCA5F0A9"><enum>(i)</enum><text>which was certified on or before June 30, 2007, as being prepared in accordance with generally accepted accounting principles, and</text> </clause>
<clause id="H0BA360C21B9943ABB1B93340243CA179"><enum>(ii)</enum><text>which is used for the purposes of a statement or report—</text>
<subclause id="H043B43979730423BB201EA27C5797D28"><enum>(I)</enum><text>to creditors,</text> </subclause>
<subclause id="H760866CCC9574A0CA88538BA81C50024"><enum>(II)</enum><text>to shareholders, or</text> </subclause>
<subclause id="H06D2933EF29B4423B300E5F367DEC3F1"><enum>(III)</enum><text>for any other substantial nontax purpose.</text> </subclause></clause></subparagraph></paragraph>
<paragraph id="H0CE74C1C071C439981203E148535D894"><enum>(2)</enum><header>Base period year</header>
<subparagraph commented="no" id="H9A2DE19406174B7CB10195FB53763216"><enum>(A)</enum><header>In general</header><text>The base period year is the first taxable year ending in 2007.</text> </subparagraph>
<subparagraph id="HE2E89DF9B6AC4DFB9660A6E73537DCED"><enum>(B)</enum><header>Mergers, acquisitions, etc.</header>
<clause id="H382D78DDE66D443BAE00C4F5413B2D1"><enum>(i)</enum><header>In general</header><text>Rules similar to the rules of subparagraphs (A) and (B) of section 41(f)(3) shall apply for purposes of this paragraph.</text> </clause>
<clause id="H9D27140F1E314A1E97DED0D04458A7B2"><enum>(ii)</enum><header>Spin-offs, etc</header><text>If there is a distribution to which section 355 (or so much of section 356 as relates to section 355) applies during the base period year and the controlled corporation (within the meaning of section 355) is a United States shareholder—</text>
<subclause id="H9468A03DEC7449F1BDF72437EB7FB3"><enum>(I)</enum><text>the controlled corporation shall be treated as being in existence during the period that the distributing corporation (within the meaning of section 355) is in existence, and</text> </subclause>
<subclause id="HCD5CD5562FDA4912B9A953DD01DAFEAE"><enum>(II)</enum><text>for purposes of applying subsection (b)(2) to the controlled corporation and the distributing corporation, amounts described in subsection (b)(2)(B) which are received or includible by the distributing corporation or controlled corporation (as the case may be) before the distribution referred to in subclause (I) from a controlled foreign corporation shall be allocated between such corporations in proportion to their respective interests as United States shareholders of such controlled foreign corporation immediately after such distribution.</text> </subclause><continuation-text continuation-text-level="clause">Subclause (II) shall not apply if neither the controlled corporation nor the distributing corporation is a United States shareholder of such controlled foreign corporation immediately after such distribution.</continuation-text></clause></subparagraph></paragraph>
<paragraph id="HEEBB859AA1274FE696A1A9A001218DE"><enum>(3)</enum><header>Dividend</header><text>The term <term>dividend</term> shall not include amounts includible in gross income as a dividend under section 78, 367, or 1248. In the case of a liquidation under section 332 to which section 367(b) applies, the preceding sentence shall not apply to the extent the United States shareholder actually receives cash as part of the liquidation.</text> </paragraph>
<paragraph id="HCC5949448A824F2DA44D54349854E64E"><enum>(4)</enum><header>Coordination with dividends received deduction</header><text>No deduction shall be allowed under section 243 or 245 for any dividend for which a deduction is allowed under this section.</text> </paragraph>
<paragraph id="H2D9D103E3B934E218CFA7D9EBFA305AA"><enum>(5)</enum><header>Controlled groups</header>
<subparagraph id="H8468AF831C82486282F481CFB8E3072F"><enum>(A)</enum><header>In general</header><text>All United States shareholders which are members of an affiliated group filing a consolidated return under section 1501 shall be treated as one United States shareholder.</text> </subparagraph>
<subparagraph id="H501CAB5C63174B148DE359A4CC7CD673"><enum>(B)</enum><header>Application of $500,000,000 limit</header><text display-inline="yes-display-inline">All corporations which are treated as a single employer under section 52(a) shall be limited to one $500,000,000 amount in subsection (b)(1)(A), and such amount shall be divided among such corporations under regulations prescribed by the Secretary.</text> </subparagraph>
<subparagraph id="H8A5C2D356BE6416796BC9BD000AD48B4"><enum>(C)</enum><header>Permanently reinvested earnings</header><text>If a financial statement is an applicable financial statement for more than 1 United States shareholder, the amount applicable under subparagraph (B) or (C) of subsection (b)(1) shall be divided among such shareholders under regulations prescribed by the Secretary.</text> </subparagraph></paragraph></subsection>
<subsection id="HE99415859A24492FA7D12FB3A6F516FE"><enum>(d)</enum><header>Denial of foreign tax credit; denial of certain expenses</header>
<paragraph id="HF1A7050F394F4BC7AFD2D728F22DD16F"><enum>(1)</enum><header>Foreign tax credit</header><text>No credit shall be allowed under section 901 for any taxes paid or accrued (or treated as paid or accrued) with respect to the deductible portion of—</text>
<subparagraph id="H8A3B9ABC04DC4D6CAA9DAE8EC0A40834"><enum>(A)</enum><text>any dividend, or</text> </subparagraph>
<subparagraph id="HADDA176CCC574F1B94C0279054E9DDDB"><enum>(B)</enum><text>any amount described in subsection (a)(2) which is included in income under section 951(a)(1)(A).</text> </subparagraph><continuation-text continuation-text-level="paragraph">No deduction shall be allowed under this chapter for any tax for which credit is not allowable by reason of the preceding sentence.</continuation-text></paragraph>
<paragraph id="HA7871922C0444ED98600C8CB7F9E5BA7"><enum>(2)</enum><header>Expenses</header><text>No deduction shall be allowed for expenses properly allocated and apportioned to the deductible portion described in paragraph (1).</text> </paragraph>
<paragraph id="HDE1FF4B0DE7B4DD4A99900F2A000B3DC"><enum>(3)</enum><header>Deductible portion</header><text display-inline="yes-display-inline">For purposes of paragraph (1), unless the taxpayer otherwise specifies, the deductible portion of any dividend or other amount is the amount which bears the same ratio to the amount of such dividend or other amount as the amount allowed as a deduction under subsection (a) for the taxable year bears to the amount described in subsection (b)(2)(A) for such year.</text> </paragraph>
<paragraph id="H85C3532D2F9247D3A9431389EAE0B59E"><enum>(4)</enum><header>Coordination with section 78</header><text>Section 78 shall not apply to any tax which is not allowable as a credit under section 901 by reason of this subsection.</text> </paragraph></subsection>
<subsection id="H300DF30D405E4EDDA4AA2E2A7460249"><enum>(e)</enum><header>Increase in tax on included amounts not reduced by credits, etc</header>
<paragraph id="HCB7BDAF77549470EBAFF06BABE7C5D99"><enum>(1)</enum><header>In general</header><text>Any tax under this chapter by reason of nondeductible CFC dividends shall not be treated as tax imposed by this chapter for purposes of determining—</text>
<subparagraph id="H855C0D0940EA497289D808D853F4493E"><enum>(A)</enum><text>the amount of any credit allowable under this chapter, or</text> </subparagraph>
<subparagraph id="HE1BE0914892C4DEA91A37C1C736C2CE8"><enum>(B)</enum><text>the amount of the tax imposed by section 55.</text> </subparagraph><continuation-text continuation-text-level="paragraph">Subparagraph (A) shall not apply to the credit under section 53 or to the credit under section 27(a) with respect to taxes which are imposed by foreign countries and possessions of the United States and are attributable to such dividends.</continuation-text></paragraph>
<paragraph id="H800E304CD9C24FB7A277B984352BCC2C"><enum>(2)</enum><header>Limitation on reduction in taxable income, etc</header>
<subparagraph id="H6B4BA9A3B3D14AAE0028BAC8C13176C7"><enum>(A)</enum><header>In general</header><text>The taxable income of any United States shareholder for any taxable year shall in no event be less than the amount of nondeductible CFC dividends received during such year.</text> </subparagraph>
<subparagraph id="HAD01BCF1FFF5489ABEEBADE9FB7D92D"><enum>(B)</enum><header>Coordination with section 172</header><text>The nondeductible CFC dividends for any taxable year shall not be taken into account—</text>
<clause id="H35A31EAE8E6646D7B3182020C417E5A8"><enum>(i)</enum><text>in determining under section 172 the amount of any net operating loss for such taxable year, and</text> </clause>
<clause id="HB52D400A27BF418C891B40DFDFC7794E"><enum>(ii)</enum><text>in determining taxable income for such taxable year for purposes of the 2nd sentence of section 172(b)(2).</text> </clause></subparagraph></paragraph>
<paragraph id="H6E49267A92CF40F196AEB05457C3AA80"><enum>(3)</enum><header>Nondeductible CFC dividends</header><text>For purposes of this subsection, the term <term>nondeductible CFC dividends</term> means the excess of the amount of dividends taken into account under subsection (a) over the deduction allowed under subsection (a) for such dividends.</text> </paragraph></subsection>
<subsection id="H1FA14EE26E25458697007640BCBA3F9B"><enum>(f)</enum><header>Election</header><text display-inline="yes-display-inline">The taxpayer may elect to apply this section to—</text>
<paragraph id="H196CB4F918A645398F7BD7AE74006842"><enum>(1)</enum><text>the taxpayer’s last taxable year which begins before the date of the enactment of this section, or</text> </paragraph>
<paragraph id="H6AFE2D4423C54828A3B21BFFBE763706"><enum>(2)</enum><text>the taxpayer’s first taxable year which begins during the 1-year period beginning on such date.</text> </paragraph><continuation-text continuation-text-level="subsection">Such election may be made for a taxable year only if made before the due date (including extensions) for filing the return of tax for such taxable year.</continuation-text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H850399BAAE7C418AA81BDD60312BE4C7"><enum>(b)</enum><header>Clerical amendment</header><text display-inline="yes-display-inline">The item in the table of sections for subpart F of part III of subchapter N of chapter 1 of such Code relating to section 965 is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HBC4913DBE1584F5BA6DB04F73877573F" style="OLC">
<toc container-level="quoted-block-container" idref="HD2F239F1D88C40AA00C9AE11F9B9707" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration">
<toc-entry idref="H2F81E4B8A4174B5EA233632F17007211" level="section">Sec. 965. Deduction for dividends received.</toc-entry> </toc> <after-quoted-block>.</after-quoted-block></quoted-block> </subsection>
<subsection id="H47202DBB586C430E8728AF1CDFC6B867"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years ending on or after the date of the enactment of this Act.</text> </subsection></section>
<section display-inline="no-display-inline" id="H76922546B43D447D80F3F63BD9CD3065" section-type="subsequent-section"><enum>104.</enum><header>Gain or loss from sale or exchange of certain preferred stock</header>
<subsection id="HAB50621027AB45B3B621C2F3683273E1"><enum>(a)</enum><header>In general</header><text>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.</text> </subsection>
<subsection id="H6C19C52138F04BA48E01B7F9E32CC309"><enum>(b)</enum><header>Applicable preferred stock</header><text>For purposes of this section, the term <term>applicable preferred stock</term> means any stock—</text>
<paragraph id="HC3EF203083954C77B5BD5DE3E97ED995"><enum>(1)</enum><text>which is preferred stock in—</text>
<subparagraph id="H27C018E71235460A007F988901061556"><enum>(A)</enum><text>the Federal National Mortgage Association, established pursuant to the Federal National Mortgage Association Charter Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1716">12 U.S.C. 1716 et seq.</external-xref>), or</text> </subparagraph>
<subparagraph id="H0E6D3491524340C7B989DA089F7D7906"><enum>(B)</enum><text>the Federal Home Loan Mortgage Corporation, established pursuant to the Federal Home Loan Mortgage Corporation Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1451">12 U.S.C. 1451 et seq.</external-xref>), and</text> </subparagraph></paragraph>
<paragraph id="HB5F7C1F331F144010010B4D309937F00"><enum>(2)</enum><text>which—</text>
<subparagraph id="H1B0003FE291840E00025851334697300"><enum>(A)</enum><text>was held by the applicable financial institution on September 6, 2008, or</text> </subparagraph>
<subparagraph id="H2B7246201AE34B36B6CFC31A241FE70"><enum>(B)</enum><text>was sold or exchanged by the applicable financial institution on or after January 1, 2008, and before September 7, 2008.</text> </subparagraph></paragraph></subsection>
<subsection id="H2ECFB4286A224459845CEF0062209839"><enum>(c)</enum><header>Applicable financial institution</header><text>For purposes of this section:</text>
<paragraph id="HD8D227CAC8224260BADA2395F79DD0AE"><enum>(1)</enum><header>In general</header><text>Except as provided in paragraph (2), the term <term>applicable financial institution</term> means—</text>
<subparagraph id="H00D1A6BB857743709B69F9E2B8C7273D"><enum>(A)</enum><text>a financial institution referred to in <external-xref legal-doc="usc" parsable-cite="usc/26/582">section 582(c)(2)</external-xref> of the Internal Revenue Code of 1986, or</text> </subparagraph>
<subparagraph id="HA76F0F71146D4B6DA3EF2E112D758747"><enum>(B)</enum><text>a depository institution holding company (as defined in section 3(w)(1) of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813(w)(1)</external-xref>)).</text> </subparagraph></paragraph>
<paragraph id="HEB7EB267614B419288CA33223DB9A998"><enum>(2)</enum><header>Special rules for certain sales</header><text>In the case of—</text>
<subparagraph id="H170C31C72C154E199D86E553976EAC65"><enum>(A)</enum><text>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</text> </subparagraph>
<subparagraph id="HCF4C9B26C61C46C68723C574C4AA4E39"><enum>(B)</enum><text>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.</text> </subparagraph></paragraph></subsection>
<subsection id="H8202FC4A91A04F769992D24DC9DEBA4"><enum>(d)</enum><header>Special rule for certain property not held on September 6, 2008</header><text>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—</text>
<paragraph id="H82D7F9A6807F441CB30718B80885DDD"><enum>(1)</enum><text>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</text> </paragraph>
<paragraph id="H2E306AF73B16408882E5884984B69EBB"><enum>(2)</enum><text>the applicable financial institution is a partner in a partnership which—</text>
<subparagraph id="H755E2E8BB4314E0F9CCC1DFDF75C193"><enum>(A)</enum><text>held such stock on September 6, 2008, and later sold or exchanged such stock, or</text> </subparagraph>
<subparagraph id="H7FDF7B5C5F574C97A88EC500EA043C68"><enum>(B)</enum><text>sold or exchanged such stock during the period described in subsection (b)(2)(B).</text> </subparagraph></paragraph></subsection>
<subsection id="H2D65A415C1AF4E5B005F46D2B1F4780"><enum>(e)</enum><header>Regulatory authority</header><text>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.</text> </subsection>
<subsection id="H8A69DD50A255453A9CFD27C26DA87B1E"><enum>(f)</enum><header>Effective date</header><text>This section shall apply to sales or exchanges occurring after December 31, 2007, in taxable years ending after such date.</text> </subsection></section>
<section id="H887536E4086043E7BB5931B122BFE2D"><enum>105.</enum><header>Repeal of Community Reinvestment Act</header><text display-inline="no-display-inline">The Community Reinvestment Act of 1977 (<external-xref legal-doc="usc" parsable-cite="usc/12/2901">12 U.S.C. 2901 et seq.</external-xref>) is hereby repealed.</text> </section>
<section id="HC2E987FFA36F4BB194BBE330B9FB8679"><enum>106.</enum><header>Net worth certificate program</header>
<subsection id="H203D524DE5B740CCAF708F864212801D"><enum>(a)</enum><header>Establishment; purposes</header>
<paragraph id="H0413E5238DDD4477BD79CDAE22907E12"><enum>(1)</enum><header>Establishment</header><text display-inline="yes-display-inline">As soon as possible after the date of the enactment of this Act, the Board of Directors of the Federal Deposit Insurance Corporation (in this section referred to as the <quote>Corporation</quote>) shall establish a net worth certificate program under this section to provide capital to insured depository institutions (as such term is defined in section 3 of the Federal Deposit Insurance Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1813">12 U.S.C. 1813</external-xref>) to assist such institutions to resolve solvency problems.</text> </paragraph>
<paragraph id="H3A1A895E7A5D4AAAB06D17860039DA21"><enum>(2)</enum><header>Purposes</header><text>The purposes of the net worth certificate program established under this section shall be—</text>
<subparagraph id="HEFCFCE3E72E24FA49D1D923CD772407"><enum>(A)</enum><text>to improve the capital position of troubled insured depository institutions with real estate holdings;</text> </subparagraph>
<subparagraph id="HD91553A583CE43408D03756E99A7AE53"><enum>(B)</enum><text>to provide such insured depository institutions the ability to sell and restructure assets; and</text> </subparagraph>
<subparagraph id="H961E3AA5E71145C8863BD3B734AD1629"><enum>(C)</enum><text>to assist such institutions in their recovery without use of taxpayer funds.</text> </subparagraph></paragraph></subsection>
<subsection id="H2D17CB87CFEC4BD3BFB81C9531D58C66"><enum>(b)</enum><header>Principles</header><text>The net worth program established under this section shall—</text>
<paragraph id="H0BC8A247D1AD47E7AB366B039CD1C577"><enum>(1)</enum><text display-inline="yes-display-inline">be based upon the Federal Savings and Loan Insurance Corporation net worth program established under title II of the Garn-St Germain Depository Institutions Act of 1982 (<external-xref legal-doc="public-law" parsable-cite="pl/97/320">Public Law 97–320</external-xref>; 96 Stat. 1489);</text> </paragraph>
<paragraph id="H93F77BDFCF9742AB98CB04A4C64FEEC5"><enum>(2)</enum><text>be made available only for troubled financial depository institutions that the Corporation determines could be financially viable if provided solvency assistance under the program;</text> </paragraph>
<paragraph id="H9F9A7E5B3DF84A648F5BA3226E14FFF6"><enum>(3)</enum><text>provide for the Corporation to purchase capital in troubled insured depository institutions in the form of subordinated debentures or net worth certificates in such institutions;</text> </paragraph>
<paragraph id="H731111BE31A843D0BA4C42AB41719EC8"><enum>(4)</enum><text>provide that insured depository institutions participating in the program shall agree to such regulations and terms of the program as the Corporation shall provide, which shall include strict oversight and supervision, including limitations on the compensation of senior executive officers of such institutions and terms for removal of officers for poor management;</text> </paragraph>
<paragraph id="H5BCB099B56EA4E5C90EC00F680F07DEE"><enum>(5)</enum><text>provide that the Corporation shall fund net worth certificates under the program by issuance of Corporation senior notes and obligations to participating insured depository institutions;</text> </paragraph>
<paragraph id="H29CF8E8A4648483481FA0944506F3C82"><enum>(6)</enum><text>provide that the interest rate on net worth certificates issued under the program and the senior notes and obligations issued under the program by the Corporation shall be identical;</text> </paragraph>
<paragraph id="H7E253B52DCA444CF9923911C5963161D"><enum>(7)</enum><text display-inline="yes-display-inline">not involve any subsidy, appropriation of funds, or other cash outlay or use of taxpayer funds; and</text> </paragraph>
<paragraph id="H69A3DEB533FC49C993525FDB372E80A5"><enum>(8)</enum><text>provide that asset sale transactions under the program be held in the private market.</text> </paragraph></subsection>
<subsection id="HE3A4F6DB845443DD905CE79F2F00000"><enum>(c)</enum><header>Regulations</header><text display-inline="yes-display-inline">The Board of Directors of the Corporation shall issue any regulations necessary to carry out the net worth certificate program under this section.</text> </subsection></section>
<enum>II</enum><header>Government-Sponsored Enterprises Free Market Reform </header>
<section id="HB078B7204D9244A2866C00F2A8CF6B4E" section-type="subsequent-section"><enum>201.</enum><header>Short title</header><text display-inline="no-display-inline">This title may be cited as the <quote><short-title>Government-Sponsored Enterprises Free Market Reform Act of 2008</short-title></quote>.</text> </section>
<section id="H6E3EBF6257504226A37EBC43A9BDCEC7"><enum>202.</enum><header>Definitions</header><text display-inline="no-display-inline">For purposes of this title, the following definitions shall apply:</text>
<paragraph id="HE4E175EBE86B447C98007C06771075FE"><enum>(1)</enum><header>Charter</header><text>The term <term>charter</term> means—</text>
<subparagraph id="HCAA2B213EC574EBBA26D796DD02E4DB"><enum>(A)</enum><text>with respect to the Federal National Mortgage Association, the Federal National Mortgage Association Charter Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1716">12 U.S.C. 1716 et seq.</external-xref>); and</text> </subparagraph>
<subparagraph id="H1FC0C292F7EA43DFA9EE0002AFCDFC4"><enum>(B)</enum><text>with respect to the Federal Home Loan Mortgage Corporation, the Federal Home Loan Mortgage Corporation Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1451">12 U.S.C. 1451 et seq.</external-xref>).</text> </subparagraph></paragraph>
<paragraph id="H7D6F597336F6470BB6804749F3EF3E7"><enum>(2)</enum><header>Director</header><text display-inline="yes-display-inline">The term <term>Director</term> means the Director of the Federal Housing Finance Agency</text> </paragraph>
<paragraph id="H30D8A8A1750B4E73A6B03E7DF0C8D9F9"><enum>(3)</enum><header>Enterprise</header><text>The term <term>enterprise</term> means—</text>
<subparagraph id="HF6AF06882D164B0CBA694987005E7579"><enum>(A)</enum><text>the Federal National Mortgage Association; and</text> </subparagraph>
<subparagraph id="H11BB94F55AC24D6E95C0271DA2AC5B63"><enum>(B)</enum><text>the Federal Home Loan Mortgage Corporation.</text> </subparagraph></paragraph>
<paragraph id="HE45188F86AC74DFAABCF20269473F43"><enum>(4)</enum><header>Guarantee</header><text display-inline="yes-display-inline">The term <term>guarantee</term> means, with respect to an enterprise, the credit support of the enterprise that is provided by the Federal Government through its charter as a government-sponsored enterprise.</text> </paragraph></section>
<section id="HF7764CCB639547058E064D6979A00000" section-type="subsequent-section"><enum>203.</enum><header>Termination of current conservatorship</header>
<subsection id="H65D394A7A56B4332B9B1AC1F5E5E9540"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Upon the expiration of the period referred to in subsection (b), the Director of the Federal Housing Finance Agency shall determine, with respect to each enterprise, if the enterprise is financially viable at that time and—</text>
<paragraph id="HEAFCC187EAF64BA2BFE7D1F31C2C39FF"><enum>(1)</enum><text>if the Director determines that the enterprise is financially viable, immediately take all actions necessary to terminate the conservatorship for each of the enterprises; or</text> </paragraph>
<paragraph id="HE94C2EC8515D4534BCA34D25ED76000"><enum>(2)</enum><text display-inline="yes-display-inline">if the Director determines that the enterprise is not financially viable, immediately appoint the Federal Housing Finance Agency as receiver under section 1367 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 and carry out such receivership under the authority of such section.</text> </paragraph></subsection>
<subsection id="H4FE0C00834F04771A53D92D31C00BFB7"><enum>(b)</enum><header>Timing</header><text display-inline="yes-display-inline">The period referred to in this subsection is, with respect to an enterprise—</text>
<paragraph id="H8C98A9516F6940F3B4A5AB9EF3B041A7"><enum>(1)</enum><text>except as provided in paragraph (2), the 24-month beginning upon the date of the enactment of this Act; or</text> </paragraph>
<paragraph id="H44221DCB4549454C97D7A971973546AD"><enum>(2)</enum><text>if the Director determines before the expiration of the period referred to in paragraph (1) that the financial markets would be adversely affected without the extension of such period under this paragraph with respect to that enterprise, the 30-month period beginning upon the date of the enactment of this Act.</text> </paragraph></subsection>
<subsection commented="no" id="H53D922A1B270425EB3E8631B78F9C51B"><enum>(c)</enum><header>Financial viability</header><text>The Director may not determine that an enterprise is financially viable for purposes of subsection (a) if the Director determines that any of the conditions for receivership set forth in paragraph (3) or (4) of section 1367(a) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (<external-xref legal-doc="usc" parsable-cite="usc/12/4617">12 U.S.C. 4617(a)</external-xref>) exists at the time with respect to the enterprise.</text> </subsection></section>
<section id="HE325A804E4804B6DAC5C7219578B6BA0"><enum>204.</enum><header>Limitation of enterprise authority upon emergence from conservatorship</header>
<subsection id="HF270BCBDBCE4473E984DD00CE03A9A5"><enum>(a)</enum><header>Revised authority</header><text>Upon the expiration of the period referred to in section 203(b), if the Director makes the determination under section 203(a)(1), the following provisions shall take effect:</text>
<paragraph id="H00213DB5A8814054BD97A37C7BDF9E24"><enum>(1)</enum><header>Portfolio limitations</header><text display-inline="yes-display-inline">Subtitle B of title XIII of the Housing and Community Development Act of 1992 (<external-xref legal-doc="usc" parsable-cite="usc/12/4611">12 U.S.C. 4611 et seq.</external-xref>) is amended by adding at the end the following new section:</text>
<quoted-block display-inline="no-display-inline" id="H928D1EF143CC44B3AACD3423792BAD01" style="OLC">
<section id="HF4AE6F4679BD4188B4CA97EFEFAA5F1"><enum>1369E.</enum><header>Restriction on mortgage assets of enterprises</header>
<subsection id="H057D7109EA5E4FBF96293E509DD90000"><enum>(a)</enum><header>Restriction</header><text display-inline="yes-display-inline">No enterprise shall own, as of any applicable date in this subsection or thereafter, mortgage assets in excess of—</text>
<paragraph id="H8A1CD9D84CF94EF6A71253D9EE25FBB2"><enum>(1)</enum><text>upon the expiration of the period referred to in section 203(b) of the <short-title>Government-Sponsored Enterprises Free Market Reform Act of 2008</short-title>, $850,000,000,000; or</text> </paragraph>
<paragraph id="H35C20901653C42618D8EF6AF07A75581"><enum>(2)</enum><text>on December 31 of each year thereafter, 80.0 percent of the aggregate amount of mortgage assets of the enterprise as of December 31 of the immediately preceding calendar year;</text> </paragraph><continuation-text continuation-text-level="subsection">except that in no event shall an enterprise be required under this section to own less than $250,000,000,000 in mortgage assets.</continuation-text></subsection>
<subsection id="HF8F876D29E5E46578801003535C5C35F"><enum>(b)</enum><header>Definition of mortgage assets</header><text display-inline="yes-display-inline">For purposes of this section, the term <term>mortgage assets</term> means, with respect to an enterprise, assets of such enterprise consisting of mortgages, mortgage loans, mortgage-related securities, participation certificates, mortgage-backed commercial paper, obligations of real estate mortgage investment conduits and similar assets, in each case to the extent such assets would appear on the balance sheet of such enterprise in accordance with generally accepted accounting principles in effect in the United States as of September 7, 2008 (as set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board from time to time; and without giving any effect to any change that may be made after September 7, 2008, in respect of Statement of Financial Accounting Standards No. 140 or any similar accounting standard).</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph>
<paragraph id="H790C7C1572044554001DBFF9B56187CE"><enum>(2)</enum><header>Increase in minimum capital requirement</header><text display-inline="yes-display-inline">Section 1362 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (<external-xref legal-doc="usc" parsable-cite="usc/12/4612">12 U.S.C. 4612</external-xref>), as amended by section 1111 of the Housing and Economic Recovery Act of 2008 (<external-xref legal-doc="public-law" parsable-cite="pl/110/289">Public Law 110–289</external-xref>), is amended—</text>
<subparagraph id="HB4450AB1BC474C58B6D200890617DFFB"><enum>(A)</enum><text>in subsection (a), by striking <quote>For purposes of this subtitle, the minimum capital level for each enterprise shall be</quote> and inserting <quote>The minimum capital level established under subsection (g) for each enterprise may not be lower than</quote>;</text> </subparagraph>
<subparagraph id="HAF73BFF791E44514A7F78D15F7F6FEDD"><enum>(B)</enum><text>in subsection (c)—</text>
<clause id="H78265D552E7840C0B4F5AA9DF8FF22D6"><enum>(i)</enum><text>by striking <quote>subsections (a) and</quote> and inserting <quote>subsection</quote>;</text> </clause>
<clause id="H570EF634A94F4B3CADDB382F40475B3C"><enum>(ii)</enum><text>by striking <quote>regulated entities</quote> the first place such term appears and inserting <quote>Federal Home Loan Banks</quote>;</text> </clause>
<clause id="HE22F738BE241472998AF0982CB0076C7"><enum>(iii)</enum><text>by striking <quote>for the enterprises,</quote>;</text> </clause>
<clause id="HF5372E619FB842888CF025DA5EA745C0"><enum>(iv)</enum><text>by striking <quote>, or for both the enterprises and the banks,</quote>;</text> </clause>
<clause id="H81DAB4989E674C7AB09B76BADD9E9792"><enum>(v)</enum><text>by striking <quote>the level specified in subsection (a) for the enterprises or</quote>; and</text> </clause>
<clause id="HC749CC956A7540FD894130FBAFB051C"><enum>(vi)</enum><text>by striking <quote>the regulated entities operate</quote> and inserting <quote>such banks operate</quote>;</text> </clause></subparagraph>
<subparagraph id="H92191A03947149749700EECF9409FED5"><enum>(C)</enum><text>in subsection (d)(1)—</text>
<clause id="H26906849E03A49758FB331B0D9D98F5B"><enum>(i)</enum><text>by striking <quote>subsections (a) and</quote> and inserting <quote>subsection</quote>; and</text> </clause>
<clause id="H7E9C4DF497F84F6DB6D18E009029157"><enum>(ii)</enum><text>by striking <quote>regulated entity</quote> each place such term appears and inserting <quote>Federal home loan bank</quote>;</text> </clause></subparagraph>
<subparagraph id="H66E86D64C27A4D42934400E0D3DB22B9"><enum>(D)</enum><text display-inline="yes-display-inline">in subsection (e), by striking <quote>regulated entity</quote> each place such term appears and inserting <quote>Federal home loan bank</quote>;</text> </subparagraph>
<subparagraph id="H2B1BE65992D74D40AB8456EA9BC58465"><enum>(E)</enum><text>in subsection (f)—</text>
<clause id="HC468B744C2074DBBB23F30A5DFBA169C"><enum>(i)</enum><text>by striking <quote>the amount of core capital maintained by the enterprises,</quote>; and</text> </clause>
<clause id="HBF56DDA5BB404543A46F3B3834292EA1"><enum>(ii)</enum><text>by striking <quote>regulated entities</quote> and inserting <quote>banks</quote>; and</text> </clause></subparagraph>
<subparagraph id="H23984BA808A8455AB9C2A6852E422E8F"><enum>(F)</enum><text>by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="HAEE64C55FCFE44618700BC35BC13D822" style="OLC">
<subsection id="H0FA3F39670AB48FBB584C4A56009882"><enum>(g)</enum><header>Establishment of revised minimum capital levels</header>
<paragraph id="HB0301B40748A4FF283921B2579F4A85D"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">The Director shall cause the enterprises to achieve and maintain adequate capital by establishing minimum levels of capital for the enterprises,which may include any prudential standards necessary to ensure long-term institutional viability and competitive equity in the market, and by using such other methods as the Director deems appropriate.</text> </paragraph>
<paragraph id="HE49814C832B84FB08F844CF7F04F3BC"><enum>(2)</enum><header>Authority</header><text>The Director shall have the authority to establish such minimum level of capital for an enterprise in excess of the level specified under subsection (a) as the Director, in the Director’s discretion, deems to be necessary or appropriate in light of the particular circumstances of the enterprise.</text> </paragraph></subsection>
<subsection id="HE5CB504B74E5418BA2D077724923645F"><enum>(h)</enum><header>Failure To maintain revised minimum capital levels</header>
<paragraph id="HAE3249619C9349849E717C749972E3B9"><enum>(1)</enum><header>Unsafe and unsound practice or condition</header><text display-inline="yes-display-inline">Failure of a enterprise to maintain capital at or above its minimum level as established pursuant to subsection (c) of this section may be deemed by the Director, in his discretion, to constitute an unsafe and unsound practice or condition within the meaning of this title.</text> </paragraph>
<paragraph id="H437A22F4A0564AEAB96CAE52539E1465"><enum>(2)</enum><header>Directive to achieve capital level</header>
<subparagraph id="HA360158BD19E4DA1A8F0C275C73D13B6"><enum>(A)</enum><header>Authority</header><text display-inline="yes-display-inline">In addition to, or in lieu of, any other action authorized by law, including paragraph (1), the Director may issue a directive to an enterprise that fails to maintain capital at or above its required level as established pursuant to subsection (c) of this section.</text> </subparagraph>
<subparagraph id="HA0C8DB934CFF42D68E1432120039485F"><enum>(B)</enum><header>Plan</header><text>Such directive may require the enterprise to submit and adhere to a plan acceptable to the Director describing the means and timing by which the enterprise shall achieve its required capital level.</text> </subparagraph>
<subparagraph id="H59256D9C53A447A6BD6CE54087CFF878"><enum>(C)</enum><header>Enforcement</header><text>Any such directive issued pursuant to this paragraph, including plans submitted pursuant thereto, shall be enforceable under the provisions of subtitle C of this title to the same extent as an effective and outstanding order issued pursuant to subtitle C of this title which has become final.</text> </subparagraph></paragraph>
<paragraph id="H7DA70598FF2242CA97BD0847BC427445"><enum>(3)</enum><header>Adherence to plan</header>
<subparagraph id="HDAC81A235ED04AA7A222BA94DF489754"><enum>(A)</enum><header>Consideration</header><text display-inline="yes-display-inline">The Director may consider such enterprise’s progress in adhering to any plan required under this subsection whenever such enterprise seeks the requisite approval of the Director for any proposal which would divert earnings, diminish capital, or otherwise impede such enterprise’s progress in achieving its minimum capital level.</text> </subparagraph>
<subparagraph id="HFD16948707064F8998E9134302B30134"><enum>(B)</enum><header>Denial</header><text>The Director may deny such approval where it determines that such proposal would adversely affect the ability of the enterprise to comply with such plan.</text> </subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block> </subparagraph></paragraph>
<paragraph id="H61D858F5492540E1B7CB28CFFE9878E"><enum>(3)</enum><header>Repeal of increases to conforming loan limits</header>
<subparagraph id="H7122F743ABCF4F808635001D9D2219BC"><enum>(A)</enum><header>Repeal of temporary increase in Economic Stimulus Act</header><text display-inline="yes-display-inline">Section 201 of the Economic Stimulus Act of 2008 (<external-xref legal-doc="public-law" parsable-cite="pl/110/185">Public Law 110–185</external-xref>) is hereby repealed.</text> </subparagraph>
<subparagraph id="HE1979D518C784F5BBABB1D1800F2AEF3"><enum>(B)</enum><header>Repeal of general limit and permanent high-cost area increase</header><text>Paragraph (2) of section 302(b) of the Federal National Mortgage Association Charter Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1717">12 U.S.C. 1717(b)(2)</external-xref>) and paragraph (2) of section 305(a) of the Federal Home Loan Mortgage Corporation Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1454">12 U.S.C. 1454(a)(2)</external-xref>) are each amended to read as such sections were in effect immediately before the enactment of the Housing and Economic Recovery Act of 2008 (<external-xref legal-doc="public-law" parsable-cite="pl/110/289">Public Law 110–289</external-xref>).</text> </subparagraph>
<subparagraph id="H8B16CEE16FF14938BE71D1408D38165"><enum>(C)</enum><header>Repeal of new housing price index</header><text display-inline="yes-display-inline">Section 1322 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as added by section 1124(d) of the Housing and Economic Recovery Act of 2008 (<external-xref legal-doc="public-law" parsable-cite="pl/110/289">Public Law 110–289</external-xref>), is hereby repealed.</text> </subparagraph>
<subparagraph id="HD28FFB45222F4854BABBCCA9BC629FC3"><enum>(D)</enum><header>Repeal</header><text display-inline="yes-display-inline">Section 1124 of the Housing and Economic Recovery Act of 2008 (<external-xref legal-doc="public-law" parsable-cite="pl/110/289">Public Law 110–289</external-xref>) is hereby repealed.</text> </subparagraph>
<subparagraph id="HC6FBBD5A0B554FF98FCB1432B45805B8"><enum>(E)</enum><header>Establishment of conforming loan limit</header><text display-inline="yes-display-inline">For the year in which the expiration of the period referred to in section 203(b) of this section occurs, the limitations governing the maximum original principal obligation of conventional mortgages that may be purchased by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, referred to in section 302(b)(2) of the Federal National Mortgage Association Charter Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1717">12 U.S.C. 1717(b)(2)</external-xref>) and section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1454">12 U.S.C. 1454(a)(2)</external-xref>), respectively, shall be considered to be—</text>
<clause id="H5AD04125BFCC43D298DACD127C73FB02"><enum>(i)</enum><text display-inline="yes-display-inline">$417,000 for a mortgage secured by a single-family residence,</text> </clause>
<clause id="H201ACDBC081A4568B92398B0EC3B88BD"><enum>(ii)</enum><text>$533,850 for a mortgage secured by a 2-family residence,</text> </clause>
<clause id="H2F81C5FBD2794B39805C9E9DC681DEA7"><enum>(iii)</enum><text>$645,300 for a mortgage secured by a 3-family residence, and</text> </clause>
<clause id="H029AC8D53CC14CDBA800B471DFB11878"><enum>(iv)</enum><text>$801,950 for a mortgage secured by a 4-family residence,</text> </clause><continuation-text continuation-text-level="subparagraph">and such limits shall be adjusted effective each January 1 thereafter in accordance with such sections 302(b)(2) and 305(a)(2).</continuation-text></subparagraph>
<subparagraph id="HAEB5A072D68C4D02B1F79300211816C4"><enum>(F)</enum><header>Prohibition of purchase of mortgages exceeding median area home price</header>
<clause id="H8D6E6BC5FE6F4C33B25E483F16712DF1"><enum>(i)</enum><header>Fannie mae</header><text display-inline="yes-display-inline">Section 302(b)(2) of the Federal National Mortgage Association Charter Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1717">12 U.S.C. 1717(b)(2)</external-xref>) is amended by adding at the end the following new sentence: <quote>Notwithstanding any other provision of this title, the corporation may not purchase any mortgage for a property having a principal obligation that exceeds the median home price, for properties of the same size, for the area in which such property subject to the mortgage is located.</quote>.</text> </clause>
<clause id="H7448464A29334E01955DE30479BAE300"><enum>(ii)</enum><header>Freddie mac</header><text display-inline="yes-display-inline">Section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1454">12 U.S.C. 1454(a)(2)</external-xref>) is amended by adding at the end the following new sentence: <quote>Notwithstanding any other provision of this title, the Corporation may not purchase any mortgage for a property having a principal obligation that exceeds the median home price, for properties of the same size, for the area in which such property subject to the mortgage is located.</quote>.</text> </clause></subparagraph></paragraph>
<paragraph id="H2DA4F1A4456F45B1A8EECEC60B92EF0"><enum>(4)</enum><header>Requirement to pay State and local taxes</header>
<subparagraph id="H81A2BF6899934AB08B426784F0ACC480"><enum>(A)</enum><header>Fannie mae</header><text display-inline="yes-display-inline">Paragraph (2) of section 309(c) of the Federal National Mortgage Association Charter Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1723a">12 U.S.C. 1723a(c)(2)</external-xref>) is amended—</text>
<clause id="H79413BA1AD6248528B24FD50D4E36500"><enum>(i)</enum><text>by striking <quote>shall be exempt from</quote> and inserting <quote>shall be subject to</quote>; and</text> </clause>
<clause id="H63F7F1B9FE6C4FA9A55BA4FDDD8B5D6F"><enum>(ii)</enum><text>by striking <quote>except that any</quote> and inserting <quote>and any</quote>.</text> </clause></subparagraph>
<subparagraph id="HCAFF5AAB7C5D4B3C80904525AB7100DC"><enum>(B)</enum><header>Freddie mac</header><text display-inline="yes-display-inline">Section 303(e) of the Federal Home Loan Mortgage Corporation Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1452">12 U.S.C. 1452(e)</external-xref>) is amended—</text>
<clause id="H33BBFD0DEE544BC5BED5D10995F57B0"><enum>(i)</enum><text>by striking <quote>shall be exempt from</quote> and inserting <quote>shall be subject to</quote>; and</text> </clause>
<clause id="HDA6DB177E23A4DAE9FA4C84D99CA005D"><enum>(ii)</enum><text>by striking <quote>except that any</quote> and inserting <quote>and any</quote>.</text> </clause></subparagraph></paragraph>
<paragraph id="H97FA1EA271CE402E9C3224E8BC85C5EC"><enum>(5)</enum><header>Repeals relating to registration of securities</header>
<subparagraph id="HE0B97383A6124FD2ABDA45DAEF04C73"><enum>(A)</enum><header>Fannie Mae</header>
<clause id="HC95A376BFA4A45329CADA78077785BCB"><enum>(i)</enum><header>Mortgage-backed securities</header><text display-inline="yes-display-inline">Section 304(d) of the Federal National Mortgage Association Charter Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1719">12 U.S.C. 1719(d)</external-xref>) is amended by striking the fourth sentence.</text> </clause>
<clause id="HCA2DF4D9919E421996A37BCFFC38C797"><enum>(ii)</enum><header>Subordinate obligations</header><text>Section 304(e) of the Federal National Mortgage Association Charter Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1719">12 U.S.C. 1719(e)</external-xref>) is amended by striking the fourth sentence.</text> </clause></subparagraph>
<subparagraph id="HD90977AE8224424F8E20E85779F09DCA"><enum>(B)</enum><header>Freddie Mac</header><text display-inline="yes-display-inline">Section 306 of the Federal Home Loan Mortgage Corporation Act (<external-xref legal-doc="usc" parsable-cite="usc/12/1455">12 U.S.C. 1455</external-xref>) is amended by striking subsection (g).</text> </subparagraph></paragraph>
<paragraph id="H5232F794438C4EC1B1CD5789406F2CBC"><enum>(6)</enum><header>Recoupment of costs for Federal guarantee</header>
<subparagraph id="H8BAD9BC653694559B1D46CBF1F071D00"><enum>(A)</enum><header>Assessments</header><text display-inline="yes-display-inline">The Director of the Federal Housing Finance Agency shall establish and collect from each enterprise assessments in the amount determined under subparagraph (B). In determining the method and timing for making such assessments, the Director shall take into consideration the determinations and conclusions of the study under subsection (b) of this section.</text> </subparagraph>
<subparagraph id="H0CC8EA1330544D1898C0FC9D07CA22F8"><enum>(B)</enum><header>Determination of costs of guarantee</header><text display-inline="yes-display-inline">Assessments under subparagraph (A) with respect to an enterprise shall be in such amount as the Director determines necessary to recoup to the Federal Government the full value of the benefit the enterprise receives from the guarantee provided by the Federal Government for the obligations and financial viability of the enterprise, based upon the dollar value of such benefit in the market to such enterprise when not operating under conservatorship or receivership. To determine such amount, the Director shall establish a risk-based pricing mechanism as the Director considers appropriate, taking into consideration the determinations and conclusions of the study under subsection (b) of this section.</text> </subparagraph>
<subparagraph id="HD2C806328A514474877825DF7EE4BBD8"><enum>(C)</enum><header>Treatment of recouped amounts</header><text>The Director shall cover into the general fund of the Treasury any amounts received from assessments made under this paragraph.</text> </subparagraph></paragraph></subsection>
<subsection id="H18B9449307304257827EA1149300119D"><enum>(b)</enum><header>GAO study regarding recoupment of costs for Federal Government guarantee</header><text>The Comptroller General of the United States shall conduct a study to determine a risk-based pricing mechanism to accurately determine the value of the benefit the enterprises receive from the guarantee provided by the Federal Government for the obligations and financial viability of the enterprises. Such study shall establish a dollar value of such benefit in the market to each enterprise when not operating under conservatorship or receivership, shall analyze various methods of the Federal Government assessing a charge for such value received (including methods involving an annual fee or a fee for each mortgage purchased or securitized), and shall make a recommendation of the best such method for assessing such charge. Not later than 12 months after the date of the enactment of this Act, the Comptroller General shall submit to the Congress a report setting forth the determinations and conclusions of such study.</text> </subsection></section>
<section id="HB2FD3B9FE8C64248AB136DBD1D5005B"><enum>205.</enum><header>Requirement to periodically renew charter until wind down and dissolution</header>
<subsection id="H28BC5C82C1CF4717AFE7EFE0FD567642"><enum>(a)</enum><header>Required renewal; wind down and dissolution upon non-renewal</header><text display-inline="yes-display-inline">Upon the expiration of the 3-year period that begins upon the expiration of the period referred to in section 203(b), unless the charter of an enterprise is renewed pursuant to subsection (b) of this section, section 206 (relating to wind down of operations and dissolution of enterprise) shall apply to the enterprise.</text> </subsection>
<subsection id="HF42AB0E04EF74996AD28619DE77C1640"><enum>(b)</enum><header>Renewal procedure</header>
<paragraph id="H0E92870F5D014696BAE5D460A483CBE3"><enum>(1)</enum><header>Application; timing</header><text>The Director shall provide for each enterprise to apply to the Director, before the expiration of the 3-year period under subsection (a), for renewal of the charter of the enterprise.</text> </paragraph>
<paragraph id="H36F0D07AB6C140C18CAC1647D2000062"><enum>(2)</enum><header>Standard</header><text>The Director shall approve the application of an enterprise for the renewal of the charter of the enterprise if—</text>
<subparagraph id="H410F4B428F0F457D916D8CD13BFE485C"><enum>(A)</enum><text>the application includes a certification by the enterprise that the enterprise is financially sound and is complying with all provisions of, and amendments made by, section 204 of this title applicable to such enterprise; and</text> </subparagraph>
<subparagraph id="HD80C0F33876448D0ADB8FCD12821F3EA"><enum>(B)</enum><text>the Director verifies that the certification made pursuant to subparagraph (A) is accurate.</text> </subparagraph></paragraph></subsection>
<subsection id="HC79B82BD69774243833339FB58A84649"><enum>(c)</enum><header>Option To reapply</header><text>Nothing in this section may be construed to require an enterprise to apply under this section for renewal of the charter of the enterprise.</text> </subsection></section>
<section id="H0720CB774B984FB9934CED2255A56E71"><enum>206.</enum><header>Required wind down of operations and dissolution of enterprise</header>
<subsection id="HA1859FEA92C74BBE8E76DEB1A6C9FF22"><enum>(a)</enum><header>Applicability</header><text display-inline="yes-display-inline">This section shall apply to an enterprise—</text>
<paragraph id="HE12E2A0E05EF4794B0AB196EAB0B289"><enum>(1)</enum><text>upon the expiration of the 3-year period referred to in such section 205(a), to the extent provided in such section; and</text> </paragraph>
<paragraph id="HA741562713FD43DDB6E55B63D9BF84DB"><enum>(2)</enum><text display-inline="yes-display-inline">if this section has not previously applied to the enterprise, upon the expiration of the 6-year period that begins upon the expiration of the period referred to in section 203(b).</text> </paragraph></subsection>
<subsection id="H628DD5A499574A9885450064FC2CE56E"><enum>(b)</enum><header>Wind down</header><text display-inline="yes-display-inline">Upon the applicability of this section to an enterprise, the Director and the Secretary of the Treasury shall jointly take such action, and may prescribe such regulations and procedures, as may be necessary to wind down the operations of an enterprise as an entity chartered by the United States Government over the duration of the 10-year period beginning upon the applicability of this section to the enterprise (pursuant to subsection (a)) in an orderly manner consistent with this Act and the ongoing obligations of the enterprise.</text> </subsection>
<subsection id="H830932F1F8924AA38F3F8527B3E5B71E"><enum>(c)</enum><header>Division of assets and liabilities; authority To establish holding corporation and dissolution trust fund</header><text>The action and procedures required under subsection (b)—</text>
<paragraph id="H23FC0C3510B84E21923EC4964D008D94"><enum>(1)</enum><text>shall include the establishment and execution of plans to provide for an equitable division and distribution of assets and liabilities of the enterprise, including any liability of the enterprise to the United States Government or a Federal reserve bank that may continue after the end of the period described in subsection (b); and</text> </paragraph>
<paragraph id="HC1DF78F268E84B939271F5D9F89377BA"><enum>(2)</enum><text display-inline="yes-display-inline">may provide for establishment of—</text>
<subparagraph id="H3D676ACF2568473D831FDF603645F5C"><enum>(A)</enum><text>a holding corporation organized under the laws of any State of the United States or the District of Columbia for the purposes of the reorganization and restructuring of the enterprise; and</text> </subparagraph>
<subparagraph id="H56D82488018447F09BFEDB717056F730"><enum>(B)</enum><text>one or more trusts to which to transfer—</text>
<clause id="HEF60C214F6854C429312E2EE004985D1"><enum>(i)</enum><text>remaining debt obligations of the enterprise, for the benefit of holders of such remaining obligations; or</text> </clause>
<clause id="H8D5A06C50193441384FBF980F4F97872"><enum>(ii)</enum><text>remaining mortgages held for the purpose of backing mortgage-backed securities, for the benefit of holders of such remaining securities.</text> </clause></subparagraph></paragraph></subsection>
<subsection id="H76C5FBB65D1D455CB4B00BE4F004871"><enum>(d)</enum><header>Repeal of charter</header><text display-inline="yes-display-inline">Effective upon the expiration of the 10-year period referred to in subsection (b) for an enterprise, the charter for the enterprise is repealed, except that the provisions of such charter in effect immediately before such repeal shall continue to apply with respect to the rights and obligations of any holders of outstanding debt obligations and mortgage-backed securities of the enterprise.</text> </subsection></section>