I 111th CONGRESS 2d Session H. R. 5125 IN THE HOUSE OF REPRESENTATIVES April 22, 2010 Ms. Eshoo (for herself and Ms. Speier) introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Emergency Economic Stabilization Act of 2008 to establish a fund to be used to make local governments whole for losses incurred from the Lehman Brothers Holding, Inc., bankruptcy.

1.

Short title

This Act may be cited as the Restitution for Local Government Act of 2010.

2.

TARP profits used to purchase certain instruments from local governments

(a)

Restitution for local governments

Title I of the Emergency Economic Stabilization Act of 2008 is amended by adding at the end the following new section:

137.

Restitution for local governments

(a)

Purchases of certain instruments from local governments

(1)

In general

Notwithstanding section 106(d), and with respect to troubled assets purchased from a specific financial institution, the amount of any profit made by the Secretary with respect to such troubled assets shall by used by the Secretary to purchase from local governments securities, bonds, and other financial instruments issued by Lehman Brothers Holding, Inc. that were held by such governments on September 12, 2008. (2)

Limitations

(A)

Dollar amount

The aggregate amount of all purchases made by the Secretary under paragraph (1) shall not exceed $1,700,000,000. (B)

Nonapplicability to pension funds

Financial instruments held by a pension fund may not be purchased pursuant to paragraph (1). (3)

Purchase amount

For purposes of determining the purchase price of a financial instrument under paragraph (1)— (A)with respect to stock of Lehman Brothers Holding, Inc., the purchase price of such stock shall be calculated based on the value of such stock at the close of trading on September 12, 2008; and (B)with respect to any other financial instrument, the purchase price shall be the principal amount of such instrument. (b)

Substitution of Secretary

Notwithstanding any other provision of this title, the Secretary shall be substituted for any local government from which the Secretary purchases any financial instrument pursuant to subsection (a)(1) as a creditor in any proceeding under title 11, United States Code, pursuant to the petition filed on September 15, 2008, by Lehman Brothers Holdings Inc., and shall have the same standing in such proceedings with respect to other creditors as the local government for which the Secretary is substituted. (c)

Reporting requirement

Each local government from which the Secretary makes purchases under subsection (a)(1) must issue a report to the Congress— (1)stating how the local government used the funds received through such purchase; and (2)demonstrating job creation, retention, and economic activity equal to the difference between— (A)the amount of the funds received by the local government through such purchase; and (B)the amount of funds received by the Secretary by reason of being substituted as a creditor with respect to the instruments that are the basis of such purchases, pursuant to subsection (b). (d)

Rulemaking

The Secretary shall issue such regulations as are necessary to carry out the provisions of this section. (e)

Local government defined

For purposes of this section, the term local government means any county, city, town, village, or other general purpose political subdivision of a State.

. (b)

Clerical amendment

The table of contents of the Emergency Economic Stabilization Act of 2008 is amended by inserting after the item relating to section 136 the following: Sec. 137. Restitution for local governments. .