[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3119 Introduced in Senate (IS)]







110th CONGRESS
  2d Session
                                S. 3119

      To stimulate the economy by encouraging energy efficiency, 
 infrastructure and workforce investment, and homeownership retention, 
 and by amending the Internal Revenue Code of 1986 to provide certain 
      business tax relief and incentives, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 12, 2008

  Ms. Collins introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
      To stimulate the economy by encouraging energy efficiency, 
 infrastructure and workforce investment, and homeownership retention, 
 and by amending the Internal Revenue Code of 1986 to provide certain 
      business tax relief and incentives, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Economic Recovery 
Act of 2008''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                        TITLE I--TAX PROVISIONS

Sec. 101. Credit for replacement of wood-burning stoves meeting 
                            environmental standards.
Sec. 102. Renewable electricity production credit.
Sec. 103. Permanent increase in limitations on expensing of certain 
                            depreciable business assets; study on 
                            expensing limits.
Sec. 104. 15-year straight-line cost recovery for qualified restaurant 
                            property.
                      TITLE II--ENERGY PROVISIONS

Sec. 201. Weatherization assistance.
Sec. 202. Energy Star programs.
                  TITLE III--TRANSPORTATION PROVISIONS

                    Subtitle A--Build America Bonds

Sec. 301. Credit to holders of Build America bonds.
Sec. 302. Transportation Finance Corporation.
               Subtitle B--Commercial Truck Fuel Savings

Sec. 311. Short title.
Sec. 312. Findings.
Sec. 313. Definitions.
Sec. 314. Waiver of highway funding reduction relating to weight of 
                            vehicles using Interstate System highways.
Sec. 315. GAO truck safety demonstration report.
Sec. 316. Responsibilities of States.
                    TITLE IV--WORKFORCE DEVELOPMENT

Sec. 401. Statewide and local workforce investment systems.
                      TITLE V--HOUSING PROVISIONS

Sec. 501. Insurance of homeownership retention mortgages.
Sec. 502. Study of auction or bulk refinance program.

                        TITLE I--TAX PROVISIONS

SEC. 101. CREDIT FOR REPLACEMENT OF WOOD-BURNING STOVES MEETING 
              ENVIRONMENTAL STANDARDS.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to nonrefundable 
personal credits) is amended by inserting after section 25D the 
following new section:

``SEC. 25E. REPLACEMENT OF WOOD-BURNING STOVES.

    ``(a) Allowance of Credit.--In the case of an individual, there 
shall be allowed as a credit against the tax imposed by this chapter 
for the taxable year an amount equal to the qualified stove replacement 
expenditures paid or incurred by the taxpayer for the taxable year.
    ``(b) Limitation.--The amount of the credit under subsection (a) 
with respect to the replacement of each non-compliant wood stove shall 
not exceed $500.
    ``(c) Qualified Stove Replacement Expenditures.--For purposes of 
this section--
            ``(1) In general.--The term `qualified stove replacement 
        expenditures' means expenditures made by the taxpayer for the 
        purchase and installation of a compliant stove which--
                    ``(A) is installed in a dwelling unit located in 
                the United States, and
                    ``(B) replaces a noncompliant wood stove used in 
                such dwelling unit.
        Such term includes expenditures for labor costs properly 
        allocable to the onsite preparation, assembly, or original 
        installation of the compliant stove.
            ``(2) Compliant stove.--The term `compliant stove' means--
                    ``(A) a wood-burning stove which meets the 
                requirements set forth in the `Standards of Performance 
                for New Residential Wood Heaters' issued by the 
                Environmental Protection Agency, and
                    ``(B) a pellet or corn-burning stove.
            ``(3) Noncompliant wood stove.--The term `noncompliant wood 
        stove' means any wood-burning stove that is not a compliant 
        stove.
    ``(d) Joint Occupancy, Cooperative Housing Corporations, and When 
Expenditure Made.--Rules similar to the rules of paragraphs (4), (5), 
and (8) of section 25D(e) shall apply for purposes of this section.
    ``(e) Basis Adjustment.--For purposes of this subtitle, if a credit 
is allowed under this section for any expenditure with respect to any 
property, the increase in the basis of such property which would (but 
for this subsection) result from such expenditure shall be reduced by 
the amount of the credit so allowed.
    ``(f) Termination.--This section shall not apply to expenditures 
made after December 31, 2010.''.
    (b) Conforming Amendments.--
            (1) Subsection (a) of section 1016 of the Internal Revenue 
        Code of 1986 is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (35),
                    (B) by striking the period at the end of paragraph 
                (36) and inserting ``, and'', and
                    (C) by adding at the end the following new 
                paragraph:
            ``(37) to the extent provided in section 25E(e), in the 
        case of amounts with respect to which a credit has been allowed 
        under section 25E.''.
            (2) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 of such Code is amended by inserting 
        after the item relating to section 25D the following new item:

``Sec. 25E. Replacement of wood-burning stoves.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to expenditures for stoves purchased after the date of the 
enactment of this Act.

SEC. 102. RENEWABLE ELECTRICITY PRODUCTION CREDIT.

    (a) Extension.--Section 45(d) of the Internal Revenue Code of 1986 
(relating to qualified facilities) is amended by striking ``January 1, 
2009'' each place it appears in paragraphs (1), (2), (3), (4), (5), and 
(7) and inserting ``January 1, 2012''.
    (b) Repeal of Municipal Solid Waste as Qualified Resource.--
            (1) In general.--Paragraph (1) of section 45(c) of the 
        Internal Revenue Code of 1986 is amended by inserting ``and'' 
        at the end of subparagraph (F) and by striking subparagraph 
        (G).
            (2) Conforming amendment.--Subsection (d) of section 45 of 
        such Code is amended by striking paragraph (6).
            (3) Effective date.--The amendments made by this subsection 
        shall apply to property placed in service after the date of the 
        enactment of this Act.
    (c) Extension of Credit for Residential Energy Efficient 
Property.--Subsection (g) of section 25D of the Internal Revenue Code 
of 1986 (relating to termination) is amended by striking ``December 31, 
2008'' and inserting ``December 31, 2012''.

SEC. 103. PERMANENT INCREASE IN LIMITATIONS ON EXPENSING OF CERTAIN 
              DEPRECIABLE BUSINESS ASSETS; STUDY ON EXPENSING LIMITS.

    (a) In General.--Subsection (b) of section 179 of the Internal 
Revenue Code of 1986 (relating to limitations) is amended--
            (1) by striking ``$25,000'' and all that follows in 
        paragraph (1) and inserting ``$128,000.'',
            (2) by striking ``$200,000'' and all that follows in 
        paragraph (2) and inserting ``$512,000.'',
            (3) by striking ``after 2007 and before 2011, the $125,000 
        and $500,000'' in paragraph (5)(A) and inserting ``after 2008, 
        the $128,000 and the $512,000'',
            (4) by striking ``2006'' in paragraph (5)(A)(ii) and 
        inserting ``2007'', and
            (5) by striking paragraph (7).
    (b) Study.--
            (1) In general.--The Secretary of the Treasury shall 
        conduct a study on the use and impact of increased limitations 
        on expensing of depreciable business assets under section 179 
        of the Internal Revenue Code of 1986, including--
                    (A) the use of expensing following the increase of 
                limitations in 2003, 2007, and 2008;
                    (B) the impact of higher limitations on expensing 
                on small businesses, including information on 
                businesses by size and industry; and
                    (C) the impact of higher limitations on expensing 
                on economic activity, including business investment, 
                business expansion, and job growth.
            (2) Report.--The Secretary of the Treasury shall, not later 
        than one year after the date of the enactment of this Act, 
        submit a report on the results of the study required under 
        paragraph (1) to the Committee on Ways and Means of the House 
        of Representatives and the Committee on Finance of the Senate.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2008.

SEC. 104. 15-YEAR STRAIGHT-LINE COST RECOVERY FOR QUALIFIED RESTAURANT 
              PROPERTY.

    (a) In General.--Clause (v) of section 168(e)(3)(E) of the Internal 
Revenue Code of 1986 (relating to 15-year property) is amended by 
striking ``January 1, 2008'' and inserting ``January 1, 2010''.
    (b) Effective Date.--The amendment made by this section shall apply 
to property placed in service after December 31, 2007.

                      TITLE II--ENERGY PROVISIONS

SEC. 201. WEATHERIZATION ASSISTANCE.

    Section 422 of the Energy Conservation and Production Act (42 
U.S.C. 6872) is amended to read as follows:

``SEC. 422. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated to carry out the 
weatherization program under this part--
            ``(1) $1,000,000,000 for fiscal year 2009;
            ``(2) $1,200,000,000 for fiscal year 2010; and
            ``(3) $1,400,000,000 for fiscal year 2011.''.

SEC. 202. ENERGY STAR PROGRAMS.

    There are authorized to be appropriated for use in carrying out the 
Energy Star program under section 324A of the Energy Policy and 
Conservation Act (42 U.S.C. 6294a)--
            (1) to the Administrator of the Environmental Protection 
        Agency, $100,000,000 for each fiscal year; and
            (2) to the Secretary of Energy, $12,000,000 for each fiscal 
        year.

                  TITLE III--TRANSPORTATION PROVISIONS

                    Subtitle A--Build America Bonds

SEC. 301. CREDIT TO HOLDERS OF BUILD AMERICA BONDS.

    (a) In General.--Subpart H of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to nonrefundable credit 
to holders of certain bonds) is amended by adding at the end the 
following new section:

``SEC. 54A. CREDIT TO HOLDERS OF BUILD AMERICA BONDS.

    ``(a) Allowance of Credit.--If a taxpayer holds a Build America 
bond on 1 or more credit allowance dates of the bond occurring during 
any taxable year, there shall be allowed as a credit against the tax 
imposed by this chapter for the taxable year an amount equal to the sum 
of the credits determined under subsection (b) with respect to such 
dates.
    ``(b) Amount of Credit.--
            ``(1) In general.--The amount of the credit determined 
        under this subsection with respect to any credit allowance date 
        for a Build America bond is 25 percent of the annual credit 
        determined with respect to such bond.
            ``(2) Annual credit.--The annual credit determined with 
        respect to any Build America bond is the product of--
                    ``(A) the applicable credit rate, multiplied by
                    ``(B) the outstanding face amount of the bond.
            ``(3) Applicable credit rate.--For purposes of paragraph 
        (2), the applicable credit rate with respect to an issue is the 
        rate equal to an average market yield (as of the day before the 
        date of sale of the issue) on outstanding long-term corporate 
        debt obligations (determined in such manner as the Secretary 
        prescribes).
            ``(4) Credit allowance date.--For purposes of this section, 
        the term `credit allowance date' means--
                    ``(A) March 15,
                    ``(B) June 15,
                    ``(C) September 15, and
                    ``(D) December 15.
        Such term includes the last day on which the bond is 
        outstanding.
            ``(5) Special rule for issuance and redemption.--In the 
        case of a bond which is issued during the 3-month period ending 
        on a credit allowance date, the amount of the credit determined 
        under this subsection with respect to such credit allowance 
        date shall be a ratable portion of the credit otherwise 
        determined based on the portion of the 3-month period during 
        which the bond is outstanding. A similar rule shall apply when 
        the bond is redeemed or matures.
    ``(c) Limitation Based on Amount of Tax.--The credit allowed under 
subsection (a) for any taxable year shall not exceed the excess of--
            ``(1) the sum of the regular tax liability (as defined in 
        section 26(b)) plus the tax imposed by section 55, over
            ``(2) the sum of the credits allowable under this part 
        (other than subpart C, section 1400N(l), and this section).
    ``(d) Credit Included in Gross Income.--Gross income includes the 
amount of the credit allowed to the taxpayer under this section 
(determined without regard to subsection (c)) and the amount so 
included shall be treated as interest income.
    ``(e) Build America Bond.--For purposes of this section, the term 
`Build America bond' means any bond issued as part of an issue if--
            ``(1) 95 percent or more of the proceeds of such issue are 
        to be used for expenditures incurred after the date of the 
        enactment of this section for 1 or more qualified projects 
        pursuant to an allocation of such proceeds to such project or 
        projects by the Transportation Finance Corporation,
            ``(2) the bond is issued by the Transportation Finance 
        Corporation and is in registered form (within the meaning of 
        section 149(a)),
            ``(3) the Transportation Finance Corporation certifies that 
        it meets the State contribution requirement of subsection (l) 
        with respect to such project, as in effect on the date of 
        issuance,
            ``(4) the Transportation Finance Corporation certifies that 
        the State in which an approved qualified project is located 
        meets the requirement described in subsection (m),
            ``(5) the face amount of such bond, when added to the face 
        amount of all Build America bonds previously issued in the 
        calendar year, does not exceed the Build America bond 
        limitation for such year under subsection (g),
            ``(6) the term of each bond which is part of such issue 
        does not exceed 30 years,
            ``(7) the payment of principal with respect to such bond is 
        the obligation of the Transportation Finance Corporation, and
            ``(8) the issue meets the requirements of subsection (h).
    ``(f) Qualified Project.--For purposes of this section, the term 
`qualified project' means the capital improvements to any 
transportation infrastructure project of any governmental unit or other 
person, including roads, bridges, rail and transit systems, ports, and 
inland waterways, proposed by 1 or more States and approved by the 
Transportation Finance Corporation, but does not include costs of 
operations or maintenance with respect to such project.
    ``(g) Limitation on Amount of Bonds Designated.--
            ``(1) National limitation.--There is a Build America bond 
        limitation for each calendar year. Such limitation is--
                    ``(A) $5,000,000,000 for 2009,
                    ``(B) $5,000,000,000 for 2010,
                    ``(C) $10,000,000,000 for 2011,
                    ``(D) $10,000,000,000 for 2012,
                    ``(E) $10,000,000,000 for 2013,
                    ``(F) $10,000,000,000 for 2014, and
                    ``(G) except as provided in paragraph (4), zero 
                thereafter.
            ``(2) Minimum allocations to states.--In making allocations 
        for each calendar year under subsection (e)(1), the 
        Transportation Finance Corporation shall ensure that the amount 
        allocated for qualified projects located in each State for such 
        calendar year is not less than 1 percent of the total amount 
        allocated for such year.
            ``(3) Carryover of unused issuance limitation.--If for any 
        calendar year the limitation amount imposed by paragraph (1) 
        exceeds the amount of Build America bonds issued during such 
        year, such excess shall be carried forward to one or more 
        succeeding calendar years as an addition to the limitation 
        imposed by paragraph (1) and until used by issuance of Build 
        America bonds.
            ``(4) Issuance of small denomination bonds.--From the Build 
        America bond limitation for each year, the Transportation 
        Finance Corporation shall issue a limited quantity of Build 
        America bonds in small denominations suitable for purchase as 
        gifts by individual investors wishing to show their support for 
        investing in America's transportation infrastructure.
    ``(h) Special Rules Relating to Expenditures.--
            ``(1) In general.--An issue shall be treated as meeting the 
        requirements of this subsection if, as of the date of issuance, 
        the Transportation Finance Corporation reasonably expects--
                    ``(A) at least 95 percent of the proceeds of such 
                issue are to be spent for 1 or more qualified projects 
                within the 5-year period beginning on such date,
                    ``(B) to incur a binding commitment with a State or 
                third party to spend at least 10 percent of the 
                proceeds of such issue, or to commence construction, 
                with respect to such projects within the 12-month 
                period beginning on such date, and
                    ``(C) to proceed with due diligence to complete 
                such projects and to spend the proceeds of such issue.
            ``(2) Rules regarding continuing compliance after 5-year 
        determination.--To the extent that less than 95 percent of the 
        proceeds of such issue are expended by the close of the 5-year 
        period beginning on the date of issuance, the Transportation 
        Finance Corporation shall redeem all of the nonqualified bonds 
        within 90 days after the end of such period. For purposes of 
        this paragraph, the amount of the nonqualified bonds required 
        to be redeemed shall be determined in the same manner as under 
        section 142.
            ``(3) Reallocation.--In the event the recipient of an 
        allocation under subsection (g) after notice and a reasonable 
        opportunity to take corrective action fails to demonstrate to 
        the satisfaction of the Transportation Finance Corporation that 
        its actions will allow the Transportation Finance Corporation 
        to meet the requirements under this subsection, the 
        Transportation Finance Corporation may redistribute the 
        allocation meant for such recipient to other recipients.
    ``(i) Special Rules Relating to Arbitrage.--A bond which is a part 
of an issue shall not be treated as a Build America bond unless, with 
respect to the issue of which such bond is a part, the Transportation 
Finance Corporation satisfies the arbitrage requirements of section 148 
with respect to proceeds of the issue.
    ``(j) Recapture of Portion of Credit Where Cessation of 
Compliance.--If any bond which when issued purported to be a Build 
America bond ceases to be such a bond, the Transportation Finance 
Corporation shall pay to the United States (at the time required by the 
Secretary) an amount equal to the sum of--
            ``(1) the aggregate of the credits allowable under this 
        section with respect to such bond (determined without regard to 
        subsection (c)) for taxable years ending during the calendar 
        year in which such cessation occurs and each succeeding 
        calendar year ending with the calendar year in which such bond 
        is redeemed by the Transportation Finance Corporation, and
            ``(2) interest at the underpayment rate under section 6621 
        on the amount determined under paragraph (1) for each calendar 
        year for the period beginning on the first day of such calendar 
        year.
    ``(k) Build America Bonds Trust Account.--
            ``(1) In general.--The following amounts shall be held in a 
        Build America Bonds Trust Account by the Transportation Finance 
        Corporation:
                    ``(A) The proceeds from the sale of all bonds 
                issued under this section.
                    ``(B) The investment earnings on proceeds from the 
                sale of such bonds.
                    ``(C) The amount described in paragraph (2).
                    ``(D) Any earnings on any amounts described in 
                subparagraph (A), (B), or (C).
            ``(2) Appropriation of revenues.--There is hereby 
        appropriated to the Build America Bonds Trust Account an amount 
        equal to the lesser of--
                    ``(A) the revenues resulting from the imposition of 
                fees pursuant to section 13031 of the Consolidated 
                Omnibus Budget Reconciliation Act of 1985 (19 U.S.C. 
                58c) for fiscal years beginning after September 31, 
                2008, or
                    ``(B) $50,000,000,000.
            ``(3) Use of funds.--Amounts in the Build America Bonds 
        Trust Account may be used only to pay costs of qualified 
        projects, redeem Build America bonds, and fund the operations 
        of the Transportation Finance Corporation, except that amounts 
        withdrawn from the Build America Bonds Trust Account to pay 
        costs of qualified projects may not exceed the proceeds from 
        the sale of Build America bonds described in subsection (e)(1).
            ``(4) Use of remaining funds in build america bonds trust 
        account.--Upon the redemption of all Build America bonds issued 
        under this section, any remaining amounts in the Build America 
        Bonds Trust Account shall be available to the Transportation 
        Finance Corporation to pay the costs of any qualified project.
            ``(5) Applicability of federal law.--The requirements of 
        any Federal law, including titles 23, 40, and 49 of the United 
        States Code, which would otherwise apply to projects to which 
        the United States is a party or to funds made available under 
        such law and projects assisted with those funds shall apply 
        to--
                    ``(A) funds made available under the Build America 
                Bonds Trust Account for similar qualified projects, 
                including contributions required under subsection (l), 
                and
                    ``(B) similar qualified projects assisted by the 
                Transportation Finance Corporation through the use of 
                such funds.
            ``(6) Investment.--Subject to subsections (h) and (i), it 
        shall be the duty of the Transportation Finance Corporation to 
        invest in investment grade obligations such portion of the 
        Build America Bonds Trust Account as is not, in the judgment of 
        the Board of Directors of the Transportation Finance 
        Corporation, required to meet current withdrawals. To the 
        maximum extent practicable, investments should be made in 
        securities that support infrastructure investment at the State 
        and local level.
    ``(l) State Contribution Requirements.--
            ``(1) In general.--For purposes of subsection (e)(3), the 
        State contribution requirement of this subsection is met with 
        respect to any qualified project if the Transportation Finance 
        Corporation has received from 1 or more States, not later than 
        the date of issuance of the bond, written commitments for 
        matching contributions of not less than 20 percent (or such 
        smaller percentage as determined under title 23, United States 
        Code, for such State) of the cost of the qualified project.
            ``(2) State matching contributions may not include federal 
        funds.--For purposes of this subsection, State matching 
        contributions shall not be derived, directly or indirectly, 
        from Federal funds, including any transfers from the Highway 
        Trust Fund under section 9503.
    ``(m) Utilization of Updated Construction Technology for Qualified 
Projects.--For purposes of subsection (e)(4), the requirement of this 
subsection is met if the appropriate State agency relating to the 
qualified project is utilizing updated construction technologies.
    ``(n) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Bond.--The term `bond' includes any obligation.
            ``(2) Transportation finance corporation.--The term 
        `Transportation Finance Corporation' means the corporation 
        established under section 302(a) of the Economic Recovery Act 
        of 2008.
            ``(3) Partnership; s corporation; and other pass-thru 
        entities.--
                    ``(A) In general.--In the case of a partnership, 
                trust, S corporation, or other pass-thru entity, rules 
                similar to the rules of section 41(g) shall apply with 
                respect to the credit allowable under subsection (a).
                    ``(B) No basis adjustment.--In the case of a bond 
                held by a partnership or an S corporation, rules 
                similar to the rules under section 1397E(i) shall 
                apply.
            ``(4) Bonds held by regulated investment companies.--If any 
        Build America bond is held by a regulated investment company, 
        the credit determined under subsection (a) shall be allowed to 
        shareholders of such company under procedures prescribed by the 
        Secretary.
            ``(5) Credits may be stripped.--Under regulations 
        prescribed by the Secretary--
                    ``(A) In general.--There may be a separation 
                (including at issuance) of the ownership of a Build 
                America bond and the entitlement to the credit under 
                this section with respect to such bond. In case of any 
                such separation, the credit under this section shall be 
                allowed to the person who on the credit allowance date 
                holds the instrument evidencing the entitlement to the 
                credit and not to the holder of the bond.
                    ``(B) Certain rules to apply.--In the case of a 
                separation described in subparagraph (A), the rules of 
                section 1286 shall apply to the Build America bond as 
                if it were a stripped bond and to the credit under this 
                section as if it were a stripped coupon.
            ``(6) Credits may be transferred.--Nothing in any law or 
        rule of law shall be construed to limit the transferability of 
        the credit or bond allowed by this section through sale and 
        repurchase agreements.
            ``(7) Reporting.--The Transportation Finance Corporation 
        shall submit reports similar to the reports required under 
        section 149(e).
            ``(8) Prohibition on use of highway trust fund.--
        Notwithstanding any other provision of law, no funds derived 
        from the Highway Trust Fund established under section 9503 
        shall be used to pay for credits under this section or for the 
        administrative costs of the Transportation Finance 
        Corporation.''.
    (b) Reporting.--Subsection (d) of section 6049 of the Internal 
Revenue Code of 1986 (relating to returns regarding payments of 
interest) is amended by adding at the end the following new paragraph:
            ``(9) Reporting of credit on build america bonds.--
                    ``(A) In general.--For purposes of subsection (a), 
                the term `interest' includes amounts includible in 
                gross income under section 54A(d) and such amounts 
                shall be treated as paid on the credit allowance date 
                (as defined in section 54A(b)(4)).
                    ``(B) Reporting to corporations, etc.--Except as 
                otherwise provided in regulations, in the case of any 
                interest described in subparagraph (A), subsection 
                (b)(4) shall be applied without regard to subparagraphs 
                (A), (H), (I), (J), (K), and (L)(i) of such subsection.
                    ``(C) Regulatory authority.--The Secretary may 
                prescribe such regulations as are necessary or 
                appropriate to carry out the purposes of this 
                paragraph, including regulations which require more 
                frequent or more detailed reporting.''.
    (c) Conforming Amendment.--Section 54(c)(2) of the Internal Revenue 
Code of 1986 is amended by inserting ``section 54A,'' after ``subpart 
C,''.
    (d) Clerical Amendments.--The table of sections for subpart H of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new item:

``Sec. 54A. Credit for holders of Build America bonds.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to bonds issued after the date of the enactment of this Act.

SEC. 302. TRANSPORTATION FINANCE CORPORATION.

    (a) Recognition and Status.--Congress grants consent and 
recognition to the establishment by 2 or more State infrastructure 
banks (established under section 610 of title 23, United States Code) 
of a multistate organization to be known as the ``Transportation 
Finance Corporation'' (hereafter in this section referred to as the 
``Corporation''). Additional State infrastructure banks may join the 
Transportation Finance Corporation subsequent to its establishment.
    (b) Functions of Corporation.--The Corporation--
            (1) is authorized to issue Build America bonds for the 
        financing of qualified projects as required under section 54A 
        of the Internal Revenue Code of 1986,
            (2) is authorized to establish and operate the Build 
        America Bonds Trust Account as required under section 54A(k) of 
        such Code,
            (3) is authorized to act as a centralized entity to provide 
        financing for qualified projects (as defined in section 54A(f) 
        of such Code),
            (4) may--
                    (A) leverage resources and stimulate public and 
                private investment in transportation infrastructure,
                    (B) encourage States to create additional 
                opportunities for the financing of transportation 
                infrastructure,
                    (C) perform any other function the sole purpose of 
                which is to carry out the financing of qualified 
                projects through Build America bonds, and
            (5) not later than February 15 of each year shall submit a 
        report to Congress describing the activities of the Corporation 
        for the preceding year.
    (c) Exemption From Taxes.--
            (1) In general.--The Corporation, including its franchise, 
        capital, reserves, surplus, sinking funds, mortgages or other 
        security holdings, and income, shall be exempt from all 
        taxation now or hereafter imposed by the United States, by any 
        territory, dependency, or possession thereof, or by any State, 
        county, municipality, or local taxing authority, except that 
        any real property of the Corporation shall be subject to State, 
        territorial, county, municipal, or local taxation to the same 
        extent according to its value as other real property is taxed.
            (2) Financial obligations.--Build America bonds or other 
        obligations issued by the Corporation and the interest on or 
        tax credits with respect to its bonds or other obligations 
        shall not be subject to taxation by any State, county, 
        municipality, or local taxing authority.
    (d) Construction Regarding Recognition and Status.--
            (1) In general.--Nothing in this section shall be construed 
        to establish the Corporation as a department, agency, or 
        instrumentality of the United States Government, to establish 
        the members of any governing board or the officers and 
        employees of the Corporation, as officers or employees of the 
        United States Government, or to subject the Corporation to the 
        provisions of title 31, United States Code.
            (2) United states not obligated.--The deposit of Federal 
        funds into the Build America Bonds Trust Account established 
        under section 54A(k) of the Internal Revenue Code of 1986 shall 
        not be construed as a commitment, guarantee, or obligation on 
        the part of the United States to any third party, nor shall any 
        third party have any right against the United States for 
        payment solely by virtue of the contribution. Any security or 
        debt-financing instrument issued by the Corporation shall 
        expressly state that the security or instrument does not 
        constitute a commitment, guarantee, or obligation of the United 
        States.

               Subtitle B--Commercial Truck Fuel Savings

SEC. 311. SHORT TITLE.

    This subtitle may be cited as the ``Commercial Truck Fuel Savings 
Demonstration Act of 2008''.

SEC. 312. FINDINGS.

    Congress finds that--
            (1) diesel fuel prices have increased more than 50 percent 
        during the 1-year period between May 2007 and May 2008;
            (2) laws governing Federal highway funding effectively 
        impose a limit of 80,000 pounds on the weight of vehicles 
        permitted to use highways on the Interstate System;
            (3) the administration of that provision in many States has 
        forced heavy tractor-trailer and tractor-semitrailer 
        combination vehicles traveling in those States to divert onto 
        small State and local roads on which higher vehicle weight 
        limits apply under State law;
            (4) the diversion of those vehicles onto those roads 
        increases fuel costs because of increased idling time and total 
        travel time along those roads; and
            (5) permitting heavy commercial vehicles, including tanker 
        trucks carrying hazardous material and fuel oil, to travel on 
        Interstate System highways when fuel prices are high would 
        provide significant savings in the transportation of goods 
        throughout the United States.

SEC. 313. DEFINITIONS.

    In this subtitle:
            (1) Commissioner.--The term ``Commissioner'' means the 
        Commissioner of Transportation of a State.
            (2) Covered interstate system highway.--
                    (A) In general.--The term ``covered Interstate 
                System highway'' means a highway designated as a route 
                on the Interstate System.
                    (B) Exclusion.--The term ``covered Interstate 
                System highway'' does not include any portion of a 
                highway that, as of the date of the enactment of this 
                Act, is exempt from the requirements of subsection (a) 
                of section 127 of title 23, United States Code, 
                pursuant to a waiver under that subsection.
            (3) Interstate system.--The term ``Interstate System'' has 
        the meaning given the term in section 101(a) of title 23, 
        United States Code.

SEC. 314. WAIVER OF HIGHWAY FUNDING REDUCTION RELATING TO WEIGHT OF 
              VEHICLES USING INTERSTATE SYSTEM HIGHWAYS.

    (a) Prohibition Relating to Certain Vehicles.--Notwithstanding 
section 127(a) of title 23, United States Code, the total amount of 
funds apportioned to a State under section 104(b)(1) of that title for 
any period may not be reduced under section 127(a) of that title if a 
State permits a vehicle described in subsection (b) to use a covered 
Interstate System highway in the State in accordance with the 
conditions described in subsection (c).
    (b) Combination Vehicles in Excess of 80,000 Pounds.--A vehicle 
described in this subsection is a vehicle having a weight in excess of 
80,000 pounds that--
            (1) consists of a 3-axle tractor unit hauling a single 
        trailer or semitrailer; and
            (2) does not exceed any vehicle weight limitation that is 
        applicable under the laws of a State to the operation of the 
        vehicle on highways in the State that are not part of the 
        Interstate System, as those laws are in effect on the date of 
        enactment of this Act.
    (c) Conditions.--This section shall apply at any time at which the 
weighted average price of retail number 2 diesel in the United States 
is $3.50 or more per gallon.
    (d) Effective Date and Termination.--This section shall not remain 
in effect--
            (1) after the date that is 2 years after the date of 
        enactment of this Act; or
            (2) before the end of that 2-year period, after any date on 
        which the Secretary of Transportation--
                    (A) determines that--
                            (i) operation of vehicles described in 
                        subsection (b) on covered Interstate System 
                        highways has adversely affected safety on the 
                        overall highway network; or
                            (ii) a Commissioner has failed faithfully 
                        to use the highway safety committee as 
                        described in section 316(2)(A) or to collect 
                        the data described in section 316(3); and
                    (B) publishes the determination, together with the 
                date of termination of this section, in the Federal 
                Register.
    (e) Consultation Regarding Termination for Safety.--In making a 
determination under subsection (d)(2)(A)(i), the Secretary of 
Transportation shall consult with the highway safety committee 
established by a Commissioner in accordance with section 316.

SEC. 315. GAO TRUCK SAFETY DEMONSTRATION REPORT.

    The Comptroller General of the United States shall carry out a 
study of the effects of participation in the program under section 314 
on the safety of the overall highway network in States participating in 
that program.

SEC. 316. RESPONSIBILITIES OF STATES.

    For the purpose of section 314, a State shall be considered to meet 
the conditions under this section if the Commissioner of the State--
            (1) submits to the Secretary of Transportation a plan for 
        use in meeting the conditions described in paragraphs (2) and 
        (3);
            (2) establishes and chairs a highway safety committee 
        that--
                    (A) the Commissioner uses to review the data 
                collected pursuant to paragraph (3); and
                    (B) consists of representatives of--
                            (i) agencies of the State that have 
                        responsibilities relating to highway safety;
                            (ii) municipalities of the State;
                            (iii) organizations that have evaluation or 
                        promotion of highway safety among the principal 
                        purposes of the organizations; and
                            (iv) the commercial trucking industry; and
            (3) collects data on the net effects that the operation of 
        vehicles described in section 314(b) on covered Interstate 
        System highways have on the safety of the overall highway 
        network, including the net effects on single-vehicle and 
        multiple-vehicle collision rates for those vehicles.

                    TITLE IV--WORKFORCE DEVELOPMENT

SEC. 401. STATEWIDE AND LOCAL WORKFORCE INVESTMENT SYSTEMS.

    Section 137 of the Workforce Investment Act of 1998 (29 U.S.C. 
2872) is amended to read as follows:

``SEC. 137. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) Youth Activities.--
            ``(1) Fiscal year 2009.--There is authorized to be 
        appropriated and there is appropriated to carry out the 
        activities described in section 127(a), $1,174,000,000 for 
        fiscal year 2009.
            ``(2) Fiscal year 2010.--There are authorized to be 
        appropriated to carry out the activities described in section 
        127(a), such sums as may be necessary for fiscal year 2010.
    ``(b) Adult Employment and Training Activities.--
            ``(1) Fiscal year 2009.--There is authorized to be 
        appropriated and there is appropriated to carry out the 
        activities described in section 132(a)(1), $1,099,000,000 for 
        fiscal year 2009.
            ``(2) Fiscal year 2010.--There are authorized to be 
        appropriated to carry out the activities described in section 
        132(a)(1), such sums as may be necessary for fiscal year 2010.
    ``(c) Dislocated Worker Employment and Training Activities.--
            ``(1) Fiscal year 2009.--There is authorized to be 
        appropriated and there is appropriated to carry out the 
        activities described in section 132(a)(2), $1,945,000,000 for 
        fiscal year 2009.
            ``(2) Fiscal year 2010.--There are authorized to be 
        appropriated to carry out the activities described in section 
        132(a)(2), such sums as may be necessary for fiscal year 
        2010.''.

                      TITLE V--HOUSING PROVISIONS

SEC. 501. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES.

    (a) Mortgage Insurance Program.--Title II of the National Housing 
Act (12 U.S.C. 1707 et seq.) is amended by adding at the end the 
following new section:

``SEC. 257. INSURANCE OF HOMEOWNERSHIP RETENTION MORTGAGES.

    ``(a) Authority.--
            ``(1) In general.--The Secretary shall, subject only to the 
        absence of qualified request for insurance under this section 
        and to the limitations under subsection (e) of this section and 
        section 531(a), make commitments to insure and insure any 
        mortgage covering a 1- to 4-family residence that is made for 
        the purpose of paying or prepaying outstanding obligations 
        under an existing mortgage or mortgages on the residence if the 
        mortgage being insured under this section meets the 
        requirements of this section, as established by the Secretary, 
        and of section 203, except as modified by this section.
            ``(2) Establishment and implementation of program 
        requirements.--The Secretary shall establish program 
        requirements and standards under this section and the Secretary 
        shall implement such requirements and standards. The Secretary 
        may establish and implement any requirements or standards 
        through interim guidance and mortgage letters.
    ``(b) Requirements.--To be eligible for insurance under this 
section, a mortgage shall comply with all of the following 
requirements:
            ``(1) Owner occupied principal residence requirement.--The 
        residence to be covered by the mortgage insured under this 
        section shall be occupied by the mortgagor as the principal 
        residence of the mortgagor.
            ``(2) Lack of capacity to pay existing mortgage or 
        mortgages.--
                    ``(A) Borrower certification.--The mortgagor shall 
                provide a certification to the originator of the 
                mortgage that the mortgagor has not intentionally 
                defaulted on the existing mortgage or mortgages.
                    ``(B) Loss mitigation responsibilities.--This 
                section may not be construed to alter or in any way 
                affect the responsibilities of any party (including the 
                mortgage servicer) to engage in any or all loan 
                modification or other loss mitigation strategies to 
                maximize value to investors as established by any 
                applicable contract.
            ``(3) Eligibility of mortgages by date of origination.--The 
        existing senior mortgage shall have been originated on before 
        December 31, 2007.
            ``(4) Maximum loan to value ratio for new loans.--The 
        mortgage being insured under this section shall involve a 
        principal obligation (including such initial service charges, 
        appraisal, inspection, and other fees as the Secretary shall 
        approve and including the mortgage insurance premium paid 
        pursuant to subsection (d)(1)) in an amount not to exceed 90 
        percent of the current appraised value of the property. Section 
        203(d) shall not apply to mortgages insured under this section.
            ``(5) Required waiver of prepayment penalties and fees.--
        All penalties for prepayment of the existing mortgage or 
        mortgages, and all fees and penalties related to default or 
        delinquency on all existing mortgage or mortgages, shall be 
        waived or forgiven.
            ``(6) Required loan reduction.--
                    ``(A) Reduction of indebtedness under existing 
                senior mortgage.--The amount of indebtedness on the 
                existing mortgage or mortgages on the residence shall 
                have been substantially reduce by such percentage as 
                the Secretary may require, and such reduction shall at 
                least be sufficient to--
                            ``(i) provide for the refinancing of such 
                        existing mortgage or mortgages in an amount not 
                        greater than 90 percent of the current 
                        appraised value of the property involved;
                            ``(ii) pay the full amount of the single 
                        premium to be collected pursuant to subsection 
                        (d)(1) (which shall be an amount up to 3.0 
                        percent of the amount of the original insured 
                        principal obligation of the mortgage insured 
                        under this section and which shall serve as an 
                        additional reserve to cover possible loan 
                        losses); and
                            ``(iii) pay the full amount of the loan 
                        origination fee and any other closing costs, 
                        not to exceed 2.0 percent of the amount of the 
                        original insured principal obligation of the 
                        mortgage insured under this section.
                    ``(B) Extinguishment of debt by refinancing.--
                            ``(i) Required agreement.--All existing 
                        holders of mortgage liens on the property 
                        involved shall agree to accept the proceeds of 
                        the insured loan as payment in full of all 
                        indebtedness under all existing mortgages, and 
                        all encumbrances related to such mortgages 
                        shall be removed. The Secretary may take such 
                        action as the Secretary considers necessary or 
                        appropriate to facilitate coordination and 
                        agreement between the holders of the existing 
                        senior mortgage and any existing subordinate 
                        mortgages, taking into consideration the 
                        subordinate lien status of such subordinate 
                        mortgages, to comply with the requirement under 
                        this subparagraph.
                            ``(ii) Treatment of multiple mortgage 
                        liens.--In addition to clause (i), the 
                        Secretary shall adopt 1 of the following 
                        approaches for all mortgages or such classes of 
                        mortgages as the Secretary may determine and 
                        may, from time to time, reconsider:
                                    ``(I) Fixed price.--As a 
                                requirement for participation in this 
                                program, all existing lien holders will 
                                agree to not provide any payment to 
                                subordinate lien holders other than 
                                such payment in accordance with a 
                                formula established by the Secretary as 
                                set forth in clause (iii); except that 
                                the Secretary may establish a short 
                                period within which first and 
                                subordinate lien holders may negotiate 
                                to extinguish all subordinate liens for 
                                compensation that may be different from 
                                the amount determined under such 
                                formula set forth in clause (iii).
                                    ``(II) Shared equity.--The 
                                Secretary may require the mortgagor 
                                under a mortgage insured under this 
                                section to agree to share a portion of 
                                any future equity in the mortgaged 
                                property with holders of existing 
                                subordinate mortgages, in accordance 
                                with a formula for such shared equity 
                                established by the Secretary as set 
                                forth in clause (iii), except that 
                                payments of such shared equity may be 
                                made only after the Secretary recovers 
                                all amounts owed to the Secretary with 
                                respect to such mortgage pursuant to 
                                the program under this section 
                                (including amounts owed pursuant to 
                                paragraph (8)).
                            ``(iii) Formula.--In determining a formula 
                        for determining any payments to subordinate 
                        lien holders pursuant to subclauses (I) and 
                        (II) of clause (ii), and in any reconsideration 
                        of such formula as the Secretary may from time 
                        to time undertake, the Secretary shall take 
                        into consideration the current market value of 
                        such liens.
                            ``(iv) Voluntary program.--This 
                        subparagraph may not be construed to require 
                        any holder of any existing mortgage to 
                        participate in the program under this section 
                        generally, or with respect to any particular 
                        loan.
                            ``(v) Source of payments for subordinate 
                        loans.--Any amounts paid to holders of any 
                        existing subordinate mortgages in connection 
                        with the origination and insurance of a 
                        mortgage under this section shall derive only 
                        from--
                                    ``(I) the holder of the existing 
                                senior mortgage; or
                                    ``(II) in the case only of the 
                                shared equity approach under clause 
                                (ii)(II), the mortgagor under the 
                                mortgage insured under this section.
            ``(7) Required reduction of debt service.--The debt service 
        payments due under the mortgage insured under this section 
        shall be in an amount that is substantially reduced from the 
        debt service payments due under the existing mortgage or 
        mortgages, which reduction may be achieved through a reduction 
        of indebtedness, a reduction in the interest rate being paid, 
        or an extension of the term of the mortgage, or any combination 
        thereof.
            ``(8) Financial recovery to federal government through exit 
        premium.--
                    ``(A) Subordinate lien.--The mortgage shall provide 
                that the Secretary shall retain a lien on the residence 
                involved, which shall be subordinate to the mortgage 
                insured under this section but senior to all other 
                mortgages on the residence that may exist at any time, 
                and which shall secure the repayment of the amount due 
                under subparagraph (D).
                    ``(B) No interest or payment during mortgage.--The 
                amount secured by the lien retained by the Secretary 
                pursuant to subparagraph (A) shall not bear interest 
                and shall not be repayable to the Secretary except as 
                provided in subparagraph (D) of this paragraph.
                    ``(C) Net proceeds available for exit premium.--
                Upon the sale, refinancing, or other disposition of the 
                residence covered by a mortgage insured under this 
                section, any proceeds resulting from such disposition 
                that remain after deducting the remaining insured 
                principal balance of the mortgage insured under this 
                section shall be available to meet the obligation under 
                subparagraph (D).
                    ``(D) Exit premium.--Upon any refinancing of the 
                mortgage insured under this section or any sale or 
                disposition of the residence covered by the mortgage, 
                the Secretary shall, subject to the availability of 
                sufficient net proceeds in subparagraph (C), receive 
                the greater of--
                            ``(i) 3 percent of the amount of the 
                        original insured principal obligation of the 
                        mortgage; or
                            ``(ii) a percentage of the portion of the 
                        net proceeds described in subparagraph (C), 
                        which shall be--
                                    ``(I) in the case of any 
                                refinancing, sale, or disposition 
                                occurring during the first year of the 
                                term of the mortgage, 100 percent of 
                                such net proceeds;
                                    ``(II) in the case of any 
                                refinancing, sale, or disposition 
                                occurring during the second year of the 
                                term of the mortgage, 80 percent;
                                    ``(III) in the case of any 
                                refinancing, sale, or disposition 
                                occurring during the third year of the 
                                term of the mortgage, 60 percent;
                                    ``(IV) in the case of any 
                                refinancing, sale or disposition 
                                occurring during the fourth year of the 
                                term of the mortgage, 40 percent;
                                    ``(V) in the case of any 
                                refinancing, sale, or disposition 
                                occurring during the fifth year of the 
                                term of the mortgage, 20 percent; and
                                    ``(VI) in the case of any 
                                refinancing, sale, or disposition 
                                occurring after the end of the fifth 
                                year, 0 percent.
                    ``(E) Authority to prohibit new second liens.--The 
                Secretary may prohibit borrowers from granting a new 
                second lien on the mortgaged property during the first 
                5 years of the term of the mortgage insured under this 
                section.
            ``(9) Documentation and verification of income.--In 
        complying with the FHA underwriting requirements under the 
        program under this section, the mortgagee under the mortgage 
        shall document and verify the income of the mortgagor in 
        accordance with procedures and standards that the Secretary 
        shall establish.
            ``(10) Fixed rate mortgage.--The mortgage insured under 
        this section shall bear interest at a single rate that is fixed 
        for the entire term of the mortgage.
    ``(c) Flexible Underwriting Criteria.--The Secretary shall 
establish underwriting standards for mortgages insured under this 
section that--
            ``(1) ensure that each mortgagor under a mortgage insured 
        under this section has a reasonable expectation of repaying the 
        mortgage, taking into consideration the mortgagor's income, 
        assets, liabilities, payment history, and other applicable 
        criteria; and
            ``(2) provide for the underwriter of the insured loan to 
        provide such representations and warranties as the Secretary 
        considers necessary or appropriate for the Secretary to enforce 
        compliance with all underwriting and appraisal standards of the 
        program.
    ``(d) Premiums.--For each mortgage insured under this section, the 
Secretary shall establish and collect--
            ``(1) at the time of insurance, a single premium payment in 
        an amount up to 3.0 percent of the amount of the original 
        insured principal obligation of the mortgage, which shall be 
        paid from the proceeds of the mortgage being insured under this 
        section, through the reduction of the amount of indebtedness on 
        the existing senior mortgage required under subsection 
        (b)(6)(A);
            ``(2) in addition to the premium under paragraph (1), 
        annual premium payments in an amount up to 1.50 percent of the 
        remaining insured principal balance of the mortgage; and
            ``(3) an exit premium in the amount determined under 
        subsection (b)(8), but which shall not be less than 3.0 percent 
        of the original insured principal obligation of the mortgage, 
        subject only to the availability of sufficient net proceeds 
        from sale, refinancing, or other disposition of the property, 
        as determined in subsection (b)(8).
    ``(e) Limitation on Aggregate Insurance Authority.--The aggregate 
original principal obligation of all mortgages insured under this 
section may not exceed $300,000,000,000.
    ``(f) Enhancement of FHA Capacity.--The Secretary shall take such 
actions as may be necessary to--
            ``(1) contract for the establishment of underwriting 
        criteria, automated underwriting systems, pricing standards, 
        and other factors relating to eligibility for mortgages insured 
        under this section;
            ``(2) contract for independent quality reviews of 
        underwriting, including appraisal reviews and fraud detection, 
        of mortgages insured under this section or pools of such 
        mortgages; and
            ``(3) increase personnel of the Department as necessary to 
        process or monitor the processing of mortgages insured under 
        this section.
    ``(g) Monitoring of Underwriting Risk.--
            ``(1) Monitoring of designated underwriters.--The Secretary 
        shall monitor independent quality reviews as established 
        pursuant to subsection (f)(2) to--
                    ``(A) determine compliance of designated 
                underwriters with underwriting standards;
                    ``(B) determine rates of delinquency, claims rates, 
                and loss rates of designated underwriters; and
                    ``(C) terminate eligibility of designated 
                underwriters that do not meet minimum performance 
                standards as the Secretary may establish and implement.
            ``(2) Reports by oversight board.--The Secretary shall 
        submit monthly reports to Congress identifying the progress of 
        the program for mortgage insurance under this section, which 
        shall contain the following information for each month:
                    ``(A) The number of new mortgages insured under 
                this section, including the location of the properties 
                subject to such mortgages by census tract.
                    ``(B) The aggregate principal obligation of new 
                mortgages insured under this section.
                    ``(C) The average amount by which the indebtedness 
                on existing mortgages is reduced in accordance with 
                subsection (b)(6).
                    ``(D) The average amount by which the debt service 
                payments on existing mortgages is reduced in accordance 
                with subsection (b)(7).
                    ``(E) The amount of premiums collected for 
                insurance of mortgages under this section.
                    ``(F) The claim and loss rates for mortgages 
                insured under this section.
                    ``(G) The race, ethnicity, gender, and income of 
                the mortgagors, aggregated by geographic areas at least 
                as specific as census tracts, except where necessary to 
                protect the privacy of the borrower.
                    ``(H) Any other information that the Secretary 
                considers appropriate.
            ``(3) Report by inspector general.--The Inspector General 
        of the Department of Housing and Urban Development shall 
        conduct an annual audit of the program for mortgage insurance 
        under this section to determine compliance with this section 
        and program rules.
    ``(h) Definitions.--For purposes of this section, the following 
definitions apply:
            ``(1) Existing mortgage.--The term `existing mortgage' 
        means, with respect to a mortgage insured under this section, a 
        mortgage that is to be extinguished, and paid or prepaid, from 
        the proceeds of the mortgage insured under this section.
            ``(2) Existing senior mortgage.--The term `existing senior 
        mortgage' means, with respect to a mortgage insured under this 
        section, the existing mortgage that has superior priority.
            ``(3) Existing subordinate mortgage.--The term `existing 
        subordinate mortgage' means, with respect to a mortgage insured 
        under this section, an existing mortgage that has subordinate 
        priority to the existing senior mortgage.
    ``(i) Sunset.--The authority of the Secretary to make any new 
commitment to insure any mortgage under this section shall terminate 
upon the expiration of the 2-year period beginning on the date of the 
enactment of the Economic Recovery Act of 2008.''.

SEC. 502. STUDY OF AUCTION OR BULK REFINANCE PROGRAM.

    (a) Study.--The Board of Governors of the Federal Reserve System 
(in this section referred to as the ``Board of Governors''), in 
consultation with the Secretary of Housing and Urban Development, shall 
conduct a study of the need for and efficacy of an auction or bulk 
refinancing mechanism to facilitate refinancing of existing residential 
mortgages that are at risk for foreclosure into mortgages insured under 
the mortgage insurance program under title II of the National Housing 
Act. The study shall identify and examine various options for 
mechanisms under which lenders and servicers of such mortgages may make 
bids for forward commitments for such insurance in an expedited manner.
    (b) Content.--
            (1) Analysis.--The study required under subsection (a) 
        shall analyze--
                    (A) the feasibility of establish a mechanism that 
                would facilitate the more rapid refinancing of 
                borrowers at risk of foreclosure into performing 
                mortgages insured under title II of the National 
                Housing Act;
                    (B) whether such a mechanism would provide an 
                effective and efficient mechanism to reduce 
                foreclosures on qualified existing mortgages;
                    (C) whether the use of an auction or bulk refinance 
                program is necessary to stabilize the housing market 
                and reduce the impact of turmoil in that market on the 
                economy of the United States;
                    (D) whether there are other mechanisms or authority 
                that would be useful to reduce foreclosure; and
                    (E) any other factors that the Board of Governors 
                considers relevant.
            (2) Determinations.--To the extent that the Board of 
        Governors finds that a facility of the type described in 
        paragraph (1) is feasible and useful, the study shall--
                    (A) determine and identify any additional authority 
                or resources needed to establish and operate such a 
                mechanism;
                    (B) determine whether there is a need for 
                additional authority with respect to the loan 
                underwriting criteria included in section 257 of the 
                National Housing Act or with respect to the eligibility 
                of participating borrowers, lenders, or holders of 
                liens; and
                    (C) determine whether such underwriting criteria 
                should be established on the basis of individual loans, 
                in the aggregate, or otherwise to facilitate the goal 
                of refinancing borrowers at risk of foreclosure into 
                viable loans insured under the National Housing Act.
    (c) Report.--Not later than the expiration of the 60-day period 
beginning on the date of the enactment of this Act, the Board of 
Governors shall submit a report regarding the results of the study 
conducted under this section to the Committee on Financial Services of 
the House of Representatives and the Committee on Banking, Housing, and 
Urban Affairs of the Senate. The report shall include a detailed 
description of the analyses required under subsection (b)(1) and the 
determinations made pursuant to subsection (b)(2), and shall include 
any other findings and recommendations of the Board of Governors 
pursuant to the study, including identifying various options for 
mechanisms described in subsection (a).
                                 <all>