[Congressional Record (Bound Edition), Volume 154 (2008), Part 4]
[Senate]
[Pages 5237-5304]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 4438. Mrs. LINCOLN (for herself and Mr. Smith) submitted an 
amendment intended to be proposed to amendment SA 4387 submitted by Mr. 
Dodd (for himself and Mr. Shelby) to the bill H.R. 3221, moving the 
United States toward greater energy independence and security, 
developing innovative new technologies, reducing carbon emissions, 
creating green jobs, protecting consumers, increasing clean renewable 
energy production, and modernizing our energy infrastructure, and to 
amend the Internal Revenue Code of 1986 to provide tax incentives for 
the production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       On page 82, between lines 7 and 8, insert the following:

                      TITLE VII--TIMBER PROVISIONS

     SEC. 700. AMENDMENTS TO 1986 CODE.

       Except as otherwise expressly provided, whenever in this 
     title an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Internal Revenue Code of 1986.

[[Page 5238]]



     SEC. 701. DEDUCTION FOR QUALIFIED TIMBER GAIN.

       (a) In General.--Part I of subchapter P of chapter 1 is 
     amended by adding at the end the following new section:

     ``SEC. 1203. DEDUCTION FOR QUALIFIED TIMBER GAIN.

       ``(a) In General.--In the case of a taxpayer which elects 
     the application of this section for a taxable year, there 
     shall be allowed a deduction against gross income in an 
     amount equal to 60 percent of the lesser of--
       ``(1) the taxpayer's qualified timber gain for such year, 
     or
       ``(2) the taxpayer's net capital gain for such year.
       ``(b) Qualified Timber Gain.--For purposes of this section, 
     the term `qualified timber gain' means, with respect to any 
     taxpayer for any taxable year, the excess (if any) of--
       ``(1) the sum of the taxpayer's gains described in 
     subsections (a) and (b) of section 631 for such year, over
       ``(2) the sum of the taxpayer's losses described in such 
     subsections for such year.
       ``(c) Special Rules for Pass-Thru Entities.--
       ``(1) In the case of any qualified timber gain of a pass-
     thru entity (as defined in section 1(h)(10)) other than a 
     real estate investment trust, the election under this section 
     shall be made separately by each taxpayer subject to tax on 
     such gain.
       ``(2) In the case of any qualified timber gain of a real 
     estate investment trust, the election under this section 
     shall be made by the real estate investment trust.
       ``(d) Election.--An election under this section may be made 
     only with respect to the first taxable year beginning after 
     the date of the enactment of this section.''.
       (b) Coordination With Maximum Capital Gains Rates.--
       (1) Taxpayers other than corporations.--Paragraph (2) of 
     section 1(h) is amended to read as follows:
       ``(2) Reduction of net capital gain.--For purposes of this 
     subsection, the net capital gain for any taxable year shall 
     be reduced (but not below zero) by the sum of--
       ``(A) the amount which the taxpayer takes into account as 
     investment income under section 163(d)(4)(B)(iii), and
       ``(B) in the case of a taxable year with respect to which 
     an election is in effect under section 1203, the lesser of--
       ``(i) the amount described in paragraph (1) of section 
     1203(a), or
       ``(ii) the amount described in paragraph (2) of such 
     section.''.
       (2) Corporations.--Section 1201 is amended by redesignating 
     subsection (b) as subsection (c) and inserting after 
     subsection (a) the following new subsection:
       ``(b) Qualified Timber Gain Not Taken Into Account.--For 
     purposes of this section, in the case of a corporation with 
     respect to which an election is in effect under section 1203, 
     the net capital gain for any taxable year shall be reduced 
     (but not below zero) by the corporation's qualified timber 
     gain (as defined in section 1203(b)).''.
       (c) Deduction Allowed Whether or Not Individual Itemizes 
     Other Deductions.--Subsection (a) of section 62 is amended by 
     inserting before the last sentence the following new 
     paragraph:
       ``(22) Qualified timber gains.--The deduction allowed by 
     section 1203.''.
       (d) Deduction Allowed in Computing Adjusted Current 
     Earnings.--Subparagraph (C) of section 56(g)(4) is amended by 
     adding at the end the following new clause:
       ``(vii) Deduction for qualified timber gain.--Clause (i) 
     shall not apply to any deduction allowed under section 
     1203.''.
       (e) Deduction Allowed in Computing Taxable Income of 
     Electing Small Business Trusts.--Subparagraph (C) of section 
     641(c)(2) is amended by inserting after clause (iii) the 
     following new clause:
       ``(iv) The deduction allowed under section 1203.''.
       (f) Treatment of Qualified Timber Gain of Real Estate 
     Investment Trusts.--Paragraph (3) of section 857(b) is 
     amended by inserting after subparagraph (F) the following new 
     subparagraph:
       ``(G) Treatment of qualified timber gain.--For purposes of 
     this part, in the case of a real estate investment trust with 
     respect to which an election is in effect under section 
     1203--
       ``(i) Reduction of net capital gain.--The net capital gain 
     of the real estate investment trust for any taxable year 
     shall be reduced (but not below zero) by the real estate 
     investment trust's qualified timber gain (as defined in 
     section 1203(b)).
       ``(ii) Adjustment to shareholder's basis attributable to 
     deduction for qualified timber gains.--

       ``(I) In general.--The adjusted basis of shares in the 
     hands of the shareholder shall be increased by the amount of 
     the deduction allowable under section 1203(a) as provided in 
     subclauses (II) and (III).
       ``(II) Allocation of basis increase for distributions made 
     during taxable year.--For any taxable year of a real estate 
     investment trust for which an election is in effect under 
     section 1203, in the case of a distribution made with respect 
     to shares during such taxable year of amounts attributable to 
     the deduction allowable under section 1203(a), the adjusted 
     basis of such shares shall be increased by the amount of such 
     distributions.
       ``(III) Allocation of excess.--If the deduction allowable 
     under section 1203(a) for a taxable year exceeds the amount 
     of distributions described in subclause (II), the excess 
     shall be allocated to every shareholder of the real estate 
     investment trust at the close of the trust's taxable year in 
     the same manner as if a distribution of such excess were made 
     with respect to such shares.
       ``(IV) Designations.--To the extent provided in 
     regulations, a real estate investment trust shall designate 
     the amounts described in subclauses (II) and (III) in a 
     manner similar to the designations provided with respect to 
     capital gains described in subparagraphs (C) and (D).
       ``(V) Definitions.--As used in this subparagraph, the terms 
     `share' and `shareholder' shall include beneficial interests 
     and holders of beneficial interests, respectively.

       ``(iii) Earnings and profits deduction for qualified timber 
     gains.--The deduction allowable under section 1203(a) for a 
     taxable year shall be allowed as a deduction in computing the 
     earnings and profits of the real estate investment trust for 
     such taxable year. The earnings and profits of any such 
     shareholder which is a corporation shall be appropriately 
     adjusted in accordance with regulations prescribed by the 
     Secretary.''.
       (g) Loss Attributable to Basis Adjustment for Deduction for 
     Qualified Timber Gain of Real Estate Investment Trusts.--
       (1) Section 857(b)(8) is amended by redesignating 
     subparagraphs (B) and (C) as subparagraphs (C) and (D), 
     respectively, and by inserting after subparagraph (A) the 
     following new subparagraph:
       ``(B) Loss attributable to basis adjustment for deduction 
     for qualified timber gain.--If--
       ``(i) a shareholder of a real estate investment trust 
     receives a basis adjustment provided under subsection 
     (b)(3)(G)(ii), and
       ``(ii) the taxpayer has held such share or interest for 6 
     months or less,

     then any loss on the sale or exchange of such share or 
     interest shall, to the extent of the amount described in 
     clause (i), be disallowed.''.
       (2) Subparagraph (D) of section 857(b)(8), as redesignated 
     by paragraph (1), is amended by striking ``subparagraph (A)'' 
     and inserting ``subparagraphs (A) and (B)''.
       (h) Conforming Amendments.--
       (1) Subparagraph (B) of section 172(d)(2) is amended to 
     read as follows:
       ``(B) the exclusion under section 1202, and the deduction 
     under section 1203, shall not be allowed.''.
       (2) Paragraph (4) of section 642(c) is amended by striking 
     the first sentence and inserting ``To the extent that the 
     amount otherwise allowable as a deduction under this 
     subsection consists of gain described in section 1202(a) or 
     qualified timber gain (as defined in section 1203(b)), proper 
     adjustment shall be made for any exclusion allowable to the 
     estate or trust under section 1202 and for any deduction 
     allowable to the estate or trust under section 1203.''
       (3) Paragraph (3) of section 643(a) is amended by striking 
     the last sentence and inserting ``The exclusion under section 
     1202 and the deduction under section 1203 shall not be taken 
     into account.''.
       (4) Subparagraph (C) of section 643(a)(6) is amended to 
     read as follows:
       ``(C) Paragraph (3) shall not apply to a foreign trust. In 
     the case of such a trust--
       ``(i) there shall be included gains from the sale or 
     exchange of capital assets, reduced by losses from such sales 
     or exchanges to the extent such losses do not exceed gains 
     from such sales or exchanges, and
       ``(ii) the deduction under section 1203 shall not be taken 
     into account.''.
       (5) Paragraph (4) of section 691(c) is amended by inserting 
     ``1203,'' after ``1202,''.
       (6) Paragraph (2) of section 871(a) is amended by inserting 
     ``or 1203,'' after ``1202,''.
       (7) The table of sections for part I of subchapter P of 
     chapter 1 is amended by adding at the end the following new 
     item:

``Sec. 1203. Deduction for qualified timber gain.''.

       (i) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 702. EXCISE TAX NOT APPLICABLE TO SECTION 1203 DEDUCTION 
                   OF REAL ESTATE INVESTMENT TRUSTS.

       (a) In General.--
       (1) Ordinary income.--Subparagraph (B) of section 
     4981(e)(1) is amended to read as follows:
       ``(B) by not taking into account--
       ``(i) any gain or loss from the sale or exchange of capital 
     assets (determined without regard to any reduction that would 
     be applied for purposes of section 857(b)(3)(G)(i)), and
       ``(ii) any deduction allowable under section 1203, and''.
       (2) Capital gain net income.--Section 4981(e)(2) is amended 
     by adding at the end the following new subparagraph:
       ``(D) Qualified timber gain.--The amount determined under 
     subparagraph (A) shall be determined without regard to any 
     reduction that would be applied for purposes of section 
     857(b)(3)(G)(i) but shall be reduced for any deduction 
     allowable under section 1203 for such calendar year.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable

[[Page 5239]]

     years beginning after the date of the enactment of this Act.

     SEC. 703. TIMBER REIT MODERNIZATION.

       (a) In General.--Section 856(c)(5) is amended by adding 
     after subparagraph (G) the following new subparagraph:
       ``(H) Treatment of timber gains.--
       ``(i) In general.--Gain from the sale of real property 
     described in paragraph (2)(D) and (3)(C) shall include gain 
     which is--

       ``(I) recognized by an election under section 631(a) from 
     timber owned by the real estate investment trust, the cutting 
     of which is provided by a taxable REIT subsidiary of the real 
     estate investment trust;
       ``(II) recognized under section 631(b); or
       ``(III) income which would constitute gain under subclause 
     (I) or (II) but for the failure to meet the 1-year holding 
     period requirement.

       ``(ii) Special rules.--

       ``(I) For purposes of this subtitle, cut timber, the gain 
     of which is recognized by a real estate investment trust 
     pursuant to an election under section 631(a) described in 
     clause (i)(I) or so much of clause (i)(III) as relates to 
     clause (i)(I), shall be deemed to be sold to the taxable REIT 
     subsidiary of the real estate investment trust on the first 
     day of the taxable year.
       ``(II) For purposes of this subtitle, income described in 
     this subparagraph shall not be treated as gain from the sale 
     of property described in section 1221(a)(1).

       ``(iii) Termination.--This subparagraph shall not apply to 
     dispositions after the termination date.''.
       (b) Termination Date.--Subsection (c) of section 856 is 
     amended by adding at the end the following new paragraph:
       ``(8) Termination date.--For purposes of this subsection, 
     the term `termination date' means the last day of the first 
     taxable year beginning after the date of the enactment of 
     this paragraph.''.
       (c) Effective Date.--The amendments made by subsection (a) 
     shall apply to dispositions in taxable years beginning after 
     the date of the enactment of this Act.

     SEC. 704. MINERAL ROYALTY INCOME QUALIFYING INCOME FOR TIMBER 
                   REITS.

       (a) In General.--Section 856(c)(2) is amended by striking 
     ``and'' at the end of subparagraph (G), by inserting ``and'' 
     at the end of subparagraph (H), and by adding after 
     subparagraph (H) the following new subparagraph:
       ``(I) mineral royalty income earned in the first taxable 
     year beginning after the date of the enactment of this 
     subparagraph from real property owned by a timber real estate 
     investment trust held, or once held, in connection with the 
     trade or business of producing timber by such real estate 
     investment trust;''.
       (b) Timber Real Estate Investment Trust.--Section 
     856(c)(5), as amended by this Act, is amended by adding after 
     subparagraph (H) the following new subparagraph:
       ``(I) Timber real estate investment trust.--The term 
     `timber real estate investment trust' means a real estate 
     investment trust in which more than 50 percent in value of 
     its total assets consists of real property held in connection 
     with the trade or business of producing timber.''.
       (c) Effective Date.--The amendments by this section shall 
     apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 705. MODIFICATION OF TAXABLE REIT SUBSIDIARY ASSET TEST 
                   FOR TIMBER REITS.

       (a) In General.--Section 856(c)(4)(B)(ii) is amended by 
     inserting ``(in the case of a quarter which closes on or 
     before the termination date, 25 percent in the case of a 
     timber real estate investment trust)'' after ``not more than 
     20 percent of the value of its total assets is represented by 
     securities of one or more taxable REIT subsidiaries''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after the date of the 
     enactment of this Act.

     SEC. 706. SAFE HARBOR FOR TIMBER PROPERTY.

       (a) In General.--Section 857(b)(6) (relating to income from 
     prohibited transactions) is amended by adding at the end the 
     following new subparagraph:
       ``(G) Special rules for sales to qualified organizations.--
       ``(i) In general.--In the case of sale of a real estate 
     asset (as defined in section 856(c)(5)(B)) to a qualified 
     organization (as defined in section 170(h)(3)) exclusively 
     for conservation purposes (within the meaning of section 
     170(h)(1)(C)), subparagraph (D) shall be applied--

       ``(I) by substituting `2 years' for `4 years' in clause 
     (i), and
       ``(II) by substituting `2-year period' for `4-year period' 
     in clauses (ii) and (iii).

       ``(ii) Termination.--This subparagraph shall not apply to 
     sales after the termination date.''.
       (b) Prohibited Transactions.--Section 857(b)(6)(D)(v) is 
     amended by inserting ``or, in the case of a sale on or before 
     the termination date, a taxable REIT subsidiary'' after 
     ``independent contractor (as defined in section 856(d)(3)) 
     from whom the trust itself does not derive or receive any 
     income''.
       (c) Sales That Are Not Prohibited Transactions.--Section 
     857(b)(6), as amended by subsection (a), is amended by adding 
     at the end the following new subparagraph:
       ``(H) Sales of property that are not a prohibited 
     transaction.--In the case of a sale on or before the 
     termination date, the sale of property which is not a 
     prohibited transaction through application of subparagraph 
     (D) shall be considered property held for investment or for 
     use in a trade or business and not property described in 
     section 1221(a)(1) for all purposes of this subtitle.''.
       (d) Termination Date.--Section 857(b)(6), as amended by 
     subsections (a) and (c), is amended by adding at the end the 
     following new subparagraph:
       ``(I) Termination date.--For purposes of this paragraph, 
     the term `termination date' means the last day of the first 
     taxable year beginning after the date of the enactment of 
     this subparagraph.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to dispositions in taxable years beginning after 
     the date of the enactment of this Act.
                                 ______
                                 
  SA 4439. Mrs. LINCOLN submitted an amendment intended to be proposed 
to amendment SA 4387 submitted by Mr. Dodd (for himself and Mr. Shelby) 
to the bill H.R. 3221, moving the United States toward greater energy 
independence and security, developing innovative new technologies, 
reducing carbon emissions, creating green jobs, protecting consumers, 
increasing clean renewable energy production, and modernizing our 
energy infrastructure, and to amend the Internal Revenue Code of 1986 
to provide tax incentives for the production of renewable energy and 
energy conservation; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. CLARIFICATION OF SCOPE OF APPLICABLE RATE PROVISION.

       Section 44(f) of the Federal Deposit Insurance Act (12 
     U.S.C. 1831u(f)) is amended by adding at the end the 
     following new paragraphs:
       ``(3) Other lenders.--In the case of any other lender doing 
     business in the State described in paragraph (1), the maximum 
     interest rate or amount of interest, discount points, finance 
     charges, or other similar charges that may be charged, taken, 
     received, or reserved from time to time in any loan, 
     discount, or credit sale made, or upon any note, bill of 
     exchange, financing transaction, or other evidence of debt 
     issued to or acquired by any other lender shall be equal to 
     not more than the greater of the rates described in 
     subparagraph (A) or (B) of paragraph (1).
       ``(4) Other lender defined.--For purposes of paragraph (3), 
     the term `other lender' means any person engaged in the 
     business of selling or financing the sale of personal 
     property (and any servicers incidental to the sale of 
     personal property) in such State, except that, with regard to 
     any person or entity described in such paragraph, such term 
     does not include--
       ``(A) an insured depository institution; or
       ``(B) any person or entity engaged in the business of 
     providing a short-term case advance to any consumer in 
     exchange for--
       ``(i) a consumer's personal check or share draft, in the 
     amount of the advance plus a fee, where presentment or 
     negotiation of such check or share draft is deferred by 
     agreement of the parties until a designated future date; or
       ``(ii) a consumer authorization to debit the consumer's 
     transaction account, in the amount of the advance plus a fee, 
     where such account will be debited on or after a designated 
     future date.''.
                                 ______
                                 
  SA 4440. Mr. NELSON of Nebraska submitted an amendment intended to be 
proposed to amendment SA 4387 submitted by Mr. Dodd (for himself and 
Mr. Shelby) to the bill H.R. 3221, moving the United States toward 
greater energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       On page 73, strike lines 19 through 21 and insert the 
     following:
       (d) Modification of Definition of Qualified Home 
     Improvement Loan.--Paragraph (4) of section 143(k) of the 
     Internal Revenue Code of 1986 (relating to qualified home 
     improvement loan) is amended to read as follows:
       ``(4) Qualified home improvement loan.--The term `qualified 
     home improvement loan' means the financing (in an amount 
     which does not exceed 50 percent of the purchase price 
     limitation that would be applicable to the residence to be 
     improved under subsection (e) if such residence were to be 
     acquired by the mortgagor at the time of execution of the 
     qualified home improvement loan)--

[[Page 5240]]

       ``(A) of alterations, repairs, and improvements on or in 
     connection with an existing residence by the owner thereof, 
     but
       ``(B) only of such items as substantially protect or 
     improve the basic livability or energy efficiency of the 
     property.''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.
                                 ______
                                 
  SA 4441. Mr. REID (for Mr. Obama) submitted an amendment intended to 
be proposed by Mr. Reid to the bill H.R. 3221, moving the United States 
toward greater energy independence and security, developing innovative 
new technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the end, add the following:

                       TITLE VIII--MORTGAGE FRAUD

     SEC. 801. MORTGAGE FRAUD.

       (a) In General.--Chapter 63 of title 18, United States 
     Code, is amended by adding at the end the following:

     ``Sec. 1351. Mortgage fraud

       ``(a) In General.--It shall be unlawful for any mortgage 
     professional to knowingly execute, or attempt to execute, a 
     scheme or artifice--
       ``(1) to defraud any natural person, financial institution, 
     or purchaser of consumer credit or an interest in consumer 
     credit in connection with the offer or extension of consumer 
     credit (as such term is defined in subsections (e) and (h) 
     under section 103 of the Truth in Lending Act (15 U.S.C. 
     1602(e) and (h))), which credit is, is to be, or is portrayed 
     as being secured by an interest--
       ``(A) in real property; or
       ``(B) in personal property used or expected to be used as 
     the principal dwelling (as such term is defined under section 
     103(v) of the Truth in Lending Act (15 U.S.C. 1602(v))) of 
     the natural person to whom such consumer credit is offered or 
     extended; or
       ``(2) to obtain, by means of false or fraudulent pretenses, 
     representations, or promises, any money or property, 
     including without limitation in the form of fees or charges, 
     from a natural person in connection with an extension of 
     consumer credit which is, is to be, or is portrayed as being 
     secured by an interest--
       ``(A) in real property; or
       ``(B) in personal property used or expected to be used as 
     the principal dwelling of such natural person;
       ``(b) Penalties.--
       ``(1) Criminal penalties.--Any mortgage professional who 
     violates subsection (a) shall be fined not more than 
     $5,000,000, or imprisoned not more than 35 years, or both.
       ``(2) Civil penalties.--Any mortgage professional who 
     violates subsection (a) shall be liable for an amount equal 
     to the sum of all finance charges and fees paid or payable by 
     the natural person, financial institution, or purchaser who 
     was defrauded unless the mortgage professional demonstrates 
     that such violation is not material.
       ``(c) Private Right of Action by Persons Aggrieved.--
       ``(1) In general.--Any person aggrieved by a violation of 
     this section, or any regulation under this section may, but 
     shall not be required to, file suit in any district court of 
     the United States or any State court having jurisdiction of 
     the parties to such suit--
       ``(A) without respect to the amount in controversy;
       ``(B) without regard to the citizenship of the parties; and
       ``(C) without regard to exhaustion of any administrative 
     remedies.
       ``(2) Remedies.--Any court in which a civil action has been 
     brought under paragraph (1) may--
       ``(A) award damages and appropriate declaratory and 
     injunctive relief for each violation of this section; and
       ``(B) provide such additional relief as the court deems 
     appropriate, including the award of court costs, 
     investigative costs, and reasonable attorneys' fees incurred 
     by persons aggrieved.
       ``(d) Rule of Construction.--Nothing in this section shall 
     be construed to modify, lessen, or otherwise affect any other 
     provision of this title relating to the rights afforded to 
     financial institutions or purchasers of consumer credit or 
     interests in consumer credit.
       ``(e) Definition.--As used in this section, the term 
     `mortgage professional' includes real estate appraisers, real 
     estate accountants, real estate attorneys, real estate 
     brokers, mortgage brokers, mortgage underwriters, mortgage 
     processors, mortgage settlement companies, mortgage title 
     companies, mortgage loan originators, and any other provider 
     of professional services engaged in the mortgage process.''.
       (b) Table of Sections.--The table of sections for chapter 
     63 of title 18, United States Code, is amended by inserting 
     after the item relating to section 1350 the following:

``1351. Mortgage fraud.''.

       (c) Conforming Amendment.--Section 3293(2) of title 18, 
     United States Code, is amended by striking ``or 1343'' and 
     inserting ``, 1343, or 1351''.
                                 ______
                                 
  SA 4442. Mr. REID (for Mr. Obama) submitted an amendment intended to 
be proposed by Mr. Reid to the bill H.R. 3221, moving the United States 
toward greater energy independence and security, developing innovative 
new technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the end, add the following:

    TITLE VIII--DEBARRED OR CENSURED MORTGAGE PROFESSIONAL DATABASE

     SEC. 801. DEBARRED OR CENSURED MORTGAGE PROFESSIONAL 
                   DATABASE.

       (a) Establishment.--
       (1) In general.--Not later than 18 months after the date of 
     enactment of this Act, the Attorney General shall establish a 
     Debarred or Censured Mortgage Professional Database that may 
     be accessed by authorized depository institutions, mortgage 
     lenders, mortgage professionals, securities and bond rating 
     agencies, and consumers to determine the Federal and State 
     bar status of mortgage professionals regulated by any Federal 
     or State agency.
       (2) Private certification boards.--Any widely accepted 
     private certification board shall have authority to access, 
     maintain, and update the Debarred or Censured Mortgage 
     Professional Database established in paragraph (1) for 
     purposes of adding or removing the information of any 
     mortgage professional contained in such Database.
       (3) Widely accepted private certification board.--Not later 
     than 18 months after the date of enactment of this Act, the 
     Attorney General, in consultation with the Secretary of the 
     Treasury, shall--
       (A) determine the definition of the term ``widely accepted 
     private certification board''; and
       (B) issue procedures and guidance on how officers, agents, 
     and employees of such boards shall conduct the 
     responsibilities described in paragraph (2).
       (4) Public availability.--The Attorney General shall make 
     the Debarred or Censured Mortgage Professional Database 
     established in paragraph (1) available to the public on the 
     Internet, without fee or other access charge, in a 
     searchable, sortable, and downloadable manner.
       (b) Immunity From Civil Liability.--Any officer, agent, or 
     employee of a widely accepted private certification board, 
     who in good faith follows the procedures and guidance set 
     forth under subsection (a)(3)(B), shall not be liable in any 
     court of any State or the United States to any mortgage 
     professional or other person--
       (1) for carrying out the responsibilities described in 
     subsection (a)(2); or
       (2) for nondisclosure to that mortgage professional or 
     other person that such conduct occurred.
       (c) Whistleblower Protection.--
       (1) In general.--No officer, agent, or employee of a widely 
     accepted private certification board may be discharged, 
     demoted, threatened, suspended, harassed, or in any other 
     manner discriminated against in the terms and conditions of 
     the employment of such officer, agent, or employee because of 
     any lawful act done by such officer, agent, or employee to 
     provide information, cause information to be provided, or 
     otherwise assist in an investigation regarding any--
       (A) possible violation of this section, including not 
     following the procedures and guidance set forth under 
     subsection (a)(3)(B); or
       (B) other misconduct, by any other officer, agent, or 
     employee of the board.
       (2) Civil action.--An officer, agent, or employee injured 
     by a violation of paragraph (1) may, in a civil action, 
     obtain appropriate relief.
       (d) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to establish 
     and maintain the database required under subsection (a).
                                 ______
                                 
  SA 4443. Mrs. LINCOLN (for herself and Mr. Smith) submitted an 
amendment intended to be proposed by her to the bill H.R. 3221, moving 
the United States toward greater energy independence and security, 
developing innovative new technologies, reducing carbon emissions, 
creating green jobs, protecting consumers, increasing clean renewable 
energy production, and modernizing our energy infrastructure, and to 
amend the Internal Revenue Code of 1986 to provide tax incentives for 
the

[[Page 5241]]

production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       On page 82, between lines 7 and 8, insert the following:

          TITLE VII--COMMUNITY RESTORATION AND REVITALIZATION

     SEC. 701. MODIFICATIONS TO RULES FOR DETERMINING THE 
                   APPLICABLE PERCENTAGE FOR CERTAIN BUILDINGS 
                   ELIGIBLE FOR LOW-INCOME HOUSING CREDIT.

       (a) In General.--Subparagraph (B) of section 42(b)(2) of 
     the Internal Revenue Code of 1986 (relating to the method of 
     prescribing the applicable percentage) is amended by striking 
     ``and'' at the end of clause (i), by striking the period at 
     the end of clause (ii) and inserting a comma, and by adding 
     at the end the following new clauses:
       ``(iii) 87.5 percent of the qualified basis of a building 
     described in paragraph (1)(A), if the basis of the building 
     is subject to the basis adjustment for rehabilitation credit 
     property required under section 50(c), and
       ``(iv) 37.5 percent of the qualified basis of a building 
     described in paragraph (1)(B), if the basis of the building 
     is subject to the basis adjustment for rehabilitation credit 
     property required under section 50(c).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to--
       (1) housing credit dollar amounts allocated after December 
     31, 2006, and
       (2) buildings placed in service after such date to the 
     extent paragraph (1) of section 42(h) of the Internal Revenue 
     Code of 1986 does not apply to any building by reason of 
     paragraph (4) thereof, but only with respect to bonds issued 
     after such date.

     SEC. 702. MODIFICATION TO BASIS ADJUSTMENT RULE.

       (a) In General.--Paragraph (3) of section 50(c) of the 
     Internal Revenue Code of 1986 (relating to special rules for 
     determining basis) is amended by inserting ``or 
     rehabilitation credit'' after ``energy credit''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2006.

     SEC. 703. INCREASE IN THE REHABILITATION CREDIT FOR CERTAIN 
                   SMALLER PROJECTS.

       (a) In General.--Section 47 of the Internal Revenue Code of 
     1986 (relating to rehabilitation credit) is amended by adding 
     at the end the following new subsection:
       ``(e) Special Rule Regarding Certain Smaller Projects.--
       ``(1) In general.--In the case of any qualified 
     rehabilitated building or portion thereof--
       ``(A) which is placed in service after the date of the 
     enactment of this subsection, and
       ``(B) which is a smaller project,

     subsection (a)(2) shall be applied by substituting `40 
     percent' for `20 percent' with respect to qualified 
     rehabilitation expenditures not over $1,000,000, and `20 
     percent' with respect to qualified rehabilitation 
     expenditures of over $1,000,000.
       ``(2) Smaller project defined.--For purposes of this 
     section, the term `smaller project' means any qualified 
     rehabilitated building or portion thereof as to which--
       ``(A) the qualified rehabilitation expenditures reported by 
     the taxpayer for purposes of calculating the credit under 
     this section are not over $2,000,000, except that for 
     purposes of making this determination, qualified 
     rehabilitation expenditures attributable to the provisions of 
     subsection (c)(2)(E) shall be disregarded, and
       ``(B) no credit was allowable under this section during any 
     of the two prior taxable years, provided that this 
     subparagraph shall not apply to any building as to which the 
     election provided for in subsection (d)(5) shall have been 
     made.
       ``(3) Coordination with subsection (d).--With respect to 
     any building as to which the election provided for in 
     subsection (d)(5) shall have been made, such building shall 
     be deemed a smaller project only if the qualified 
     rehabilitation expenditures reported by the taxpayer for 
     purposes of calculating the credit under this section with 
     respect to the taxable years to which such election shall 
     apply are, in the aggregate, not over $2,000,000.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 704. USE FOR LODGING NOT TO DISQUALIFY FOR 
                   REHABILITATION CREDIT PROPERTY WHICH IS NOT A 
                   CERTIFIED HISTORIC STRUCTURE.

       (a) In General.--Subparagraph (C) of section 50(b)(2) of 
     the Internal Revenue Code of 1986 (relating to property 
     eligible for the investment credit) is amended by striking 
     ``certified historic structure'' and inserting ``qualified 
     rehabilitated building''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 705. DATE BY WHICH BUILDING MUST BE FIRST PLACED IN 
                   SERVICE.

       (a) In General.--Subparagraph (B) of section 47(c)(1) of 
     the Internal Revenue Code of 1986 (relating to the date by 
     which building must be first placed in service) is amended--
       (1) by striking ``Building must be first placed in service 
     before 1936'' in the heading and inserting ``Date by which 
     building must first be placed in service'', and
       (2) by striking ``before 1936'' in the text and inserting 
     ``no less than 50 years prior to the year in which qualified 
     rehabilitation expenditures are taken into account under 
     subsection (b)(1)''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 706. MODIFICATIONS REGARDING CERTAIN TAX-EXEMPT USE 
                   PROPERTY.

       (a) In General.--Subclause (I) of section 47(c)(2)(B)(v) of 
     the Internal Revenue Code of 1986 (relating to tax-exempt use 
     property) is amended by inserting ``, except that for 
     purposes of this clause, `50 percent' shall be substituted 
     for `35 percent' in applying section 168(h)(1)(B)(iii))'' 
     before the period at the end.
       (b) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 707. INCREASE IN REHABILITATION CREDIT FOR BUILDINGS IN 
                   HIGH COST AREAS.

       (a) In General.--Paragraph (2) of section 47(c) of the 
     Internal Revenue Code of 1986 (relating to the definition of 
     qualified rehabilitation expenditures) is amended by adding 
     at the end the following new subparagraph:
       ``(E) Increase in credit for buildings in high cost 
     areas.--
       ``(i) In general.--In the case of any qualified 
     rehabilitated building located in a qualified census tract or 
     difficult development area which is designated for purposes 
     of this subparagraph, the qualified rehabilitation 
     expenditures for purposes of this section shall be 130 
     percent of such expenditures determined without regard to 
     this subparagraph.
       ``(ii) Rules.--For purposes of clause (i), rules similar to 
     the rules of section 42(d)(5)(C) (excluding clause (i) 
     thereof) shall be applied.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 708. RECAPTURE OF REHABILITATION CREDIT FOR CERTIFIED 
                   HISTORIC STRUCTURE NOT TRIGGERED BY CONDOMINIUM 
                   TRANSACTION.

       (a) In General.--Subsection (a) of section 50 of the 
     Internal Revenue Code of 1986 (relating to recapture of 
     credits upon disposition of property) is amended by adding at 
     the end thereof the following new paragraph:
       ``(6) Special rule for certified historic structures.--In 
     the case of the rehabilitation credit determined under 
     section 47(a)(2), paragraphs (1) and (2) shall not apply to a 
     transaction in which a portion of the building is transferred 
     as a condominium unit.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to transfers after the date of enactment of this 
     Act.
                                 ______
                                 
  SA 4444. Mrs. BOXER submitted an amendment intended to be proposed by 
her to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the end, insert the following:

                    TITLE VIII--SENSE OF THE SENATE

     SEC. 801. SENSE OF THE SENATE.

       It is the sense of the Senate that in implementing or 
     carrying out any provision of this Act, or any amendment made 
     by this Act, the Senate supports a policy of noninterference 
     regarding local government requirements that the holder of a 
     foreclosed property maintain that property.
                                 ______
                                 
  SA 4445. Mrs. BOXER submitted an amendment intended to be proposed by 
her to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. NOTIFICATION OF SALE OR TRANSFER OF MORTGAGE LOANS.

       The Truth in Lending Act (15 U.S.C. 1601 et seq.) is 
     amended by inserting after section 129 the following new 
     section:

     ``SEC. 129A. NOTICE OF NEW CREDITOR.

       ``(a) In General.--In addition to other disclosures 
     required by this title, not later than

[[Page 5242]]

     30 days after the date on which a mortgage loan is sold or 
     otherwise transferred or assigned to a third party, the 
     creditor that is the new owner or assignee of the debt shall 
     notify the borrower in writing of such transfer, including--
       ``(1) the identity, address, telephone number of the new 
     creditor;
       ``(2) the date of transfer;
       ``(3) how to reach an agent or party having authority to 
     act on behalf of the new creditor;
       ``(4) the location of the place where transfer of ownership 
     of the debt is recorded; and
       ``(5) any other relevant information regarding the new 
     creditor.
       ``(b) Definition.--As used in this section, the term 
     `mortgage loan' means any consumer credit transaction that is 
     secured by the principal dwelling of a consumer.''.
                                 ______
                                 
  SA 4446. Mr. LEAHY (for himself and Mr. Sanders) submitted an 
amendment intended to be proposed by him to the bill H.R. 3221, moving 
the United States toward greater energy independence and security, 
developing innovative new technologies, reducing carbon emissions, 
creating green jobs, protecting consumers, increasing clean renewable 
energy production, and modernizing our energy infrastructure, and to 
amend the Internal Revenue Code of 1986 to provide tax incentives for 
the production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. NATIONWIDE DISTRIBUTION OF RESOURCES.

       Notwithstanding any other provision of this Act or the 
     amendments made by this Act, each State shall receive not 
     less than 0.5 percent of funds made available under each of 
     section 301 (relating to emergency assistance for the 
     redevelopment of abandoned and foreclosed homes) and section 
     401 (relating to housing counseling resources).
                                 ______
                                 
  SA 4447. Ms. LANDRIEU submitted an amendment intended to be proposed 
by her to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       On page 53, strike lines 23 through 25, and insert the 
     following:
       (C) establish land banks for homes that have been 
     foreclosed upon;
       (D) establish or support land banks for homes that have 
     been damaged or destroyed as a result of Hurricanes Katrina 
     or Rita of 2005, or to rehabilitate or redevelop such damaged 
     or destroyed homes which have been conveyed by the State or 
     unit of local government; and
       (E) demolish blighted structures.
                                 ______
                                 
  SA 4448. Ms. LANDRIEU submitted an amendment intended to be proposed 
to amendment SA 4387 submitted by Mr. Dodd (for himself and Mr. Shelby) 
to the bill H.R. 3221, moving the United States toward greater energy 
independence and security, developing innovative new technologies, 
reducing carbon emissions, creating green jobs, protecting consumers, 
increasing clean renewable energy production, and modernizing our 
energy infrastructure, and to amend the Internal Revenue Code of 1986 
to provide tax incentives for the production of renewable energy and 
energy conservation; which was ordered to lie on the table; as follows:

       On page 76, strike line 13 through page 77, line 9, and 
     insert the following:
     structure that is--
       ``(i) a residence--

       ``(I) upon which foreclosure has been filed pursuant to the 
     laws of the State in which the residence is located, and
       ``(II) which--

       ``(aa) is a new previously unoccupied residence for which a 
     building permit was issued and construction began on or 
     before September 1, 2007, or
       ``(bb) was occupied as a principal residence by the 
     mortgagor for at least 1 year prior to the foreclosure 
     filing, or
       ``(ii) a residence that is damaged as a result of Hurricane 
     Katrina, Hurricane Rita, or Hurricane Wilma, and that has 
     been sold or transferred to a State or local government as a 
     result of such damage.
       ``(B) Single-family.--For purposes of subparagraph (A)(ii), 
     the term `single-family' includes 2, 3, or 4 family 
     residences one unit of which was occupied by the owner of the 
     units at the time of the occurrence of the damage described 
     in such subparagraph.
       ``(C) Certification.--
       ``(i) New previously unoccupied residence.--In the case of 
     an eligible single-family residence described in subparagraph 
     (A)(i)(II)(aa), no credit shall be allowed under this section 
     unless the purchaser submits a certification by the seller of 
     such residence that such residence meets the requirements of 
     such subparagraph.
       ``(ii) Residence transferred as a result of hurricane.--In 
     the case of an eligible single-family residence described in 
     subparagraph (A)(ii), no credit shall be allowed under this 
     section unless the purchaser submits a certification by the 
     appropriate State or local government that such residence 
     meet the requirements of such subparagraph.
       On page 79, between lines 3 and 4, insert the following:
       ``(4) Homes transferred as a result of hurricane.--In the 
     case of a qualified principal residence described in 
     subsection (c)(2)(A)(ii)--
       ``(A) Limitation based on income.--No credit shall be 
     allowed under this section if the taxpayer's adjusted gross 
     income for the taxable year exceeds $50,000 ($100,000 in the 
     case of a joint return).
       ``(B) Recapture period.--Subsection (e) shall be applied by 
     substituting `36 months' for `24 months'.
                                 ______
                                 
  SA 4449. Mr. ENSIGN submitted an amendment intended to be proposed by 
him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       On page 54, strike line 17 and all that follows through 
     page 55, line 9, and insert the following:
       (3) Reinvestment of profits.--
       (A) Profits from sales, rentals, and redevelopment.--
       (i) 2-year reinvestment period.--During the 2-year period 
     following the date of enactment of this Act, any revenue 
     generated from the sale, rental, redevelopment, 
     rehabilitation, or any other eligible use that is in excess 
     of the cost to acquire and redevelop (including reasonable 
     development fees) or rehabilitate an abandoned or foreclosed 
     upon home or residential property shall be provided to and 
     used by the State or unit of general local government in 
     accordance with, and in furtherance of, the intent and 
     provisions of this section.
       (ii) Deposits in the treasury.--

       (I) Profits.--Upon the expiration of the 2-year period set 
     forth under clause (i), any revenue generated from the sale, 
     rental, redevelopment, rehabilitation, or any other eligible 
     use that is in excess of the cost to acquire and redevelop 
     (including reasonable development fees) or rehabilitate an 
     abandoned or foreclosed upon home or residential property 
     shall be deposited in the Treasury of the United States as 
     miscellaneous receipts.
       (II) Other amounts.--Upon the expiration of the 2-year 
     period set forth under clause (i), any other revenue not 
     described under subclause (I) generated from the sale, 
     rental, redevelopment, rehabilitation, or any other eligible 
     use of an abandoned or foreclosed upon home or residential 
     property shall be deposited in the Treasury of the United 
     States as miscellaneous receipts.

       (B) Other revenues.--Any revenue generated under 
     subparagraphs (A), (C) or (D) of subsection (c)(3) shall be 
     provided to and used by the State or unit of general local 
     government in accordance with, and in furtherance of, the 
     intent and provisions of this section.
       (4) Sale requirement.--If a State or unit of general local 
     government purchases or otherwise acquires an abandoned or 
     foreclosed upon home or residential property with funds 
     received pursuant to this section or with any amounts derived 
     or generated from activities authorized under this section, 
     that State or unit of general local government shall sell 
     such home or property by a date that is not later than 4 
     years after the date of enactment of this Act.
                                 ______
                                 
  SA 4450. Mr. ENSIGN submitted an amendment intended to be proposed to 
amendment SA 4387 submitted by Mr. Dodd (for himself and Mr. Shelby) to 
the bill H.R. 3221, moving the United States toward greater energy 
independence and security, developing innovative new technologies, 
reducing carbon emissions, creating green jobs, protecting consumers, 
increasing clean renewable energy production, and modernizing our 
energy infrastructure, and to amend the Internal Revenue Code of 1986 
to provide tax incentives for the production of renewable energy and 
energy conservation; which was ordered to lie on the table; as follows:


[[Page 5243]]

       On page 70, strike lines 14 through 21 and insert the 
     following:
       ``(A) Increase for 2008.--In the case of calendar year 
     2008, the State ceiling for each State shall be increased by 
     an amount equal to $10,000,000,000 multiplied by a fraction--
       ``(i) the numerator of which is the number of foreclosures 
     on residential property filed in such State, and
       ``(ii) the denominator of which is the total number of 
     foreclosures on residential property filed in all States.
                                 ______
                                 
  SA 4451. Mr. ENSIGN submitted an amendment intended to be proposed to 
amendment SA 4387 submitted by Mr. Dodd (for himself and Mr. Shelby) to 
the bill H.R. 3221, moving the United States toward greater energy 
independence and security, developing innovative new technologies, 
reducing carbon emissions, creating green jobs, protecting consumers, 
increasing clean renewable energy production, and modernizing our 
energy infrastructure, and to amend the Internal Revenue Code of 1986 
to provide tax incentives for the production of renewable energy and 
energy conservation; which was ordered to lie on the table; as follows:

       On page 70, strike lines 14 through 22 and insert the 
     following:
       ``(A) Increase for 2008.--In the case of calendar year 
     2008, the State ceiling for each State shall be increased by 
     an amount equal to the greater of--
       ``(i) $10,000,000,000 multiplied by a fraction--

       ``(I) the numerator of which is the number of foreclosures 
     on residential property filed in such State, and
       ``(II) the denominator of which is the total number of 
     foreclosures on residential property filed in all States, or

       ``(ii) the amount determined under subparagraph (B).
       ``(B) Minimum amount.--The amount determined under this 
     subparagraph is--
       ``(i) in the case of a State (other than a possession) or 
     Puerto Rico, $90,300,606, and
       ``(ii) in the case of a possession of the United States 
     (other than Puerto Rico) with a population less than the 
     least populous State (other than a possession), the product 
     of--

       ``(I) a fraction the numerator of which is $90,300,606 and 
     the denominator of which is population of the least populous 
     State (other than a possession), and
       ``(II) the population of such possession.

     In the case of any possession of the United States not 
     described in clause (i) or (ii), the amount determined under 
     this subparagraph shall be zero.
       ``(C) Set aside.--
                                 ______
                                 
  SA 4452. Mr. BROWNBACK submitted an amendment intended to be proposed 
by him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       On page 34, line 13, insert after the period the following: 
     ``Notwithstanding any other provision of this Act or 
     regulations promulgated under this Act, the Secretary shall, 
     in addition to information regarding individual mortgagees, 
     develop criteria to quantify risks associated with individual 
     originators or lenders. In developing such criteria, the 
     Secretary shall develop a system for grading the performance 
     of individual originators and lenders that considers the 
     adequacy of quality controls to ensure the accuracy of 
     information supplied as part of any loan application, file, 
     or agreement. The Secretary shall promulgate such rules as 
     are necessary to facilitate the collection and evaluation of 
     information necessary to establish the criteria specified in 
     this subsection. The Secretary shall amend any planned 
     implementation of risk-based premiums to incorporate 
     information on originator and lender performance in the 
     determination or calculation of any risk based premium.''.
                                 ______
                                 
  SA 4453. Mr. BROWNBACK submitted an amendment intended to be proposed 
by him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the end, add the following new title:

                      TITLE VIII--FEDERAL RESERVE

     SEC. 801. FINDINGS.

       Congress finds that--
       (1) recent disruptions in the housing market and the market 
     for mortgage-backed securities have had an adverse impact on 
     the availability and price of credit associated with home 
     mortgages;
       (2) improving the ability of Government agencies, 
     government-sponsored enterprises, financial institutions, and 
     investors to better assess risks associated with mortgage 
     lending is critical to the restoration of confidence and 
     liquidity to those markets;
       (3) the proper evaluation of risks associated with 
     individual loans requires not only an evaluation of 
     information about the prospective borrower and assessment of 
     the adequacy if the collateral, but also the reliability and 
     accuracy of information submitted by originators to 
     prospective underwriters;
       (4) developing a timely system of rating loans that 
     incorporates an objective and standardized evaluation of 
     risks associated with loans originated or funded initially by 
     individual entities or institutions; and
       (5) such a system would facilitate a more accurate rating 
     of securities that loans are included in.

     SEC. 802. RULEMAKING REQUIRED.

       (a) Study and Evaluation.--
       (1) In general.--Not later than 90 days after the date of 
     enactment of this Act, the Board of Governors of the Federal 
     Reserve System (in this title, referred to as the ``Board'') 
     shall, in a manner determined by the Chairman of the Board, 
     undertake an evaluation and study of the efficacy of 
     including risks associated with the quality controls and data 
     accuracy of market participants in the rating of individual 
     mortgage loans.
       (2) Consultation.--In conducting the study and evaluation 
     required by this subsection, the Board shall consult with 
     private sector entities to evaluate private sector products 
     that may exist and be currently utilized by various market 
     participants to quantify risks associated with originator and 
     lender quality controls and information.
       (b) Rulemaking.--Not later than 180 days after the date of 
     completion of the study and evaluation prescribed under 
     subsection (a), the Board shall promulgate regulations to 
     implement a system of creating scores associated with 
     mortgage loans that incorporates information about borrowers, 
     originators, underwriters, and lenders. Such system shall be 
     developed in a manner that allows for a more objective and 
     complete evaluation of risks associated with individual loans 
     to facilitate their inclusion in mortgage backed securities.
       (c) Requirement for Securitization and Guarantee.--
     Beginning 180 days after the effective date of the 
     regulations promulgated under this section, it shall be 
     unlawful to include any loan as part of any mortgage backed 
     security offered for sale by any Government agency, 
     government-sponsored enterprise, or financial institution 
     that is subject to regulation by the Board or the Securities 
     and Exchange Commission.
                                 ______
                                 
  SA 4454. Mr. BROWNBACK submitted an amendment intended to be proposed 
by him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       On page 12, at the end of line 22, add the following: ``The 
     report shall also include an evaluation of the quality 
     control procedures and accuracy of information utilized in 
     the process of underwriting loans guaranteed by the Fund. 
     Such evaluation shall include a review of the risk 
     characteristics of loans based not only on borrower 
     information and performance, but on risks associated with 
     loans originated or funded by various entities or financial 
     institutions.''.
                                 ______
                                 
  SA 4455. Mr. BROWNBACK submitted an amendment intended to be proposed 
by him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       On page 14, line 18, strike ``and'' and all that follows 
     through ``to meet'' on line 19 and insert the following:
       ``(B) to develop objective and standardized criteria to 
     quantify risks associated with individual originators or 
     lenders, for which

[[Page 5244]]

     purpose, the Secretary shall develop a system for grading the 
     performance of individual originators and lenders that 
     considers the adequacy of quality controls to quantify the 
     soundness and control of internal processes; and
       ``(C) to meet''.
                                 ______
                                 
  SA 4456. Mr. GREGG submitted an amendment intended to be proposed by 
him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       On page 50, strike line 14 and all that follows through 
     page 58, line 2.
                                 ______
                                 
  SA 4457. Mr. GREGG submitted an amendment intended to be proposed to 
amendment SA 4387 submitted by Mr. Dodd (for himself and Mr. Shelby) to 
the bill H.R. 3221, moving the United States toward greater energy 
independence and security, developing innovative new technologies, 
reducing carbon emissions, creating green jobs, protecting consumers, 
increasing clean renewable energy production, and modernizing our 
energy infrastructure, and to amend the Internal Revenue Code of 1986 
to provide tax incentives for the production of renewable energy and 
energy conservation; which was ordered to lie on the table; as follows:

       On page 63, strike line 3 and all that follows through page 
     68, line 13 and inserting the following:

     SEC. 601. DEFINITION OF ELIGIBLE TAXPAYER.

       Section 168(k) of the Internal Revenue Code of 1986 is 
     amended by adding at the end the following new paragraph:
       ``(4) Eligible taxpayer.--For purposes of paragraph (5), 
     the term `eligible taxpayer' means any taxpayer who could 
     claim a deduction under this subsection.''.
                                 ______
                                 
  SA 4458. Mr. GREGG submitted an amendment intended to be proposed by 
him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       On page 58 between lines 2 and 3, insert the following:

     SEC. 302. LIMITATION ON USE OF FUNDS WITH RESPECT TO EMINENT 
                   DOMAIN.

       No State or unit of general local government may use any 
     amounts received pursuant to section 301 to fund any activity 
     or project that involves, includes, or is associated with the 
     use of eminent domain by such State or unit of general local 
     government.
                                 ______
                                 
  SA 4459. Mr. GREGG submitted an amendment intended to be proposed by 
him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the end of the bill, insert the following:

TITLE VIII--ENSURING ASSISTANCE IS NOT USED IN CONJUNCTION WITH EMINENT 
                            DOMAIN AUTHORITY

     SEC. 801. LIMITATION ON USE OF FUNDS.

       (a) Definition.--For purposes of this section, the term 
     ``housing assistance'' means the following:
       (1) Any amounts appropriated, authorized to be 
     appropriated, or otherwise made available under this Act, or 
     any amendment made by this Act.
       (2) Any qualified mortgage bond issued by a State or 
     political subdivision or any other entity or organization 
     pursuant to section 143(k)(12) of the Internal Revenue Code, 
     as added by section 602 of this Act.
       (3) Any tax credit related to certain home purchases 
     allowable under section 25E of the Internal Revenue Code of 
     1986, as added by section 603 of this Act.
       (4) Any assistance, loan, loan guarantee, housing, housing 
     assistance, or other housing related program administered, in 
     whole or in part, by the Secretary of Housing and Urban 
     Development, the Secretary of Veterans Affairs, or any other 
     Federal agency.
       (b) Limitation on Use of Assistance With Eminent Domain 
     Authority.--Any State or local government entity that 
     receives housing assistance shall be prohibited from using 
     any such assistance or authority in conjunction with any 
     project that involves, includes, or relies on the use of 
     eminent domain by such State or local government or pursuant 
     to a delegation of such authority by the same.
       (c) Limitation on Changing the Nature of Property.--Any 
     State or local government entity that receives housing 
     assistance shall be prohibited from using any such assistance 
     to change the nature of the residential property or rezone 
     the property for commercial use.
                                 ______
                                 
  SA 4460. Mr. SPECTER (for himself and Mr. Casey) submitted an 
amendment intended to be proposed by him to the bill H.R. 3221, moving 
the United States toward greater energy independence and security, 
developing innovative new technologies, reducing carbon emissions, 
creating green jobs, protecting consumers, increasing clean renewable 
energy production, and modernizing our energy infrastructure, and to 
amend the Internal Revenue Code of 1986 to provide tax incentives for 
the production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. EXTENSION OF MOVING TO WORK DEMONSTRATION AGREEMENT.

       (a) In General.--Notwithstanding any other provision of 
     law, the Secretary of Housing and Urban Development (in this 
     section referred to as the ``Secretary'') shall extend the 
     effective period of the Moving to Work Demonstration 
     Agreement entered into between the Philadelphia Housing 
     Authority and the Department of Housing and Urban Development 
     on or about February 28, 2002, pursuant to section 204 of the 
     Omnibus Consolidated Rescissions and Appropriations Act of 
     1996, under the heading ``Public Housing/Moving to Work 
     Demonstration'' (Public Law 104-134, 110 Stat. 1321-281) for 
     the 45-day period beginning on April 1, 2008.
       (b) Compliance Review.--If the Philadelphia Housing 
     Authority submits certifications by an independent expert 
     verifying that at least 5 percent of its public housing units 
     are in compliance with section 504 of the Rehabilitation Act 
     of 1973, and such certifications are satisfactory to the 
     Secretary, the Secretary shall further extend the Moving to 
     Work Demonstration Agreement for an additional 1 year period.
       (c) Terms and Conditions.--Any extension of the Moving to 
     Work Demonstration Agreement under this section shall be 
     under the same terms and conditions as were applicable to the 
     original agreement.
       (d) Limitation on Actions of the Secretary.--The Secretary 
     may not terminate or take any adverse action with respect to 
     an agreement described in subsection (a) or any extension 
     thereto--
       (1) unless there has been an express finding, on the 
     record, after opportunity for a hearing, of a failure by the 
     Housing Authority to comply with the terms of the agreement 
     or otherwise applicable provisions of law; and
       (2) before the expiration of the 30-day period beginning on 
     the date on which the Secretary has filed with the 
     appropriate committees of Congress a full written report of 
     the circumstances and the grounds for such action.
                                 ______
                                 
  SA 4461. Mr. CASEY (for himself and Mr. Martinez) submitted an 
amendment intended to be proposed by him to the bill H.R. 3221, moving 
the United States toward greater energy independence and security, 
developing innovative new technologies, reducing carbon emissions, 
creating green jobs, protecting consumers, increasing clean renewable 
energy production, and modernizing our energy infrastructure, and to 
amend the Internal Revenue Code of 1986 to provide tax incentives for 
the production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. ___. PROPERTY APPRAISAL REQUIREMENTS.

       (a) In General.--Section 129 of the Truth in Lending Act 
     (15 U.S.C. 1639) is amended by adding at the end the 
     following new subsection:
       ``(m) Property Appraisal Requirements.--
       ``(1) In general.--A creditor may not extend credit in the 
     form of a mortgage referred to in section 103(aa) to any 
     consumer, without first obtaining a written appraisal of the 
     property to be mortgaged, prepared in accordance with the 
     requirements of this subsection.

[[Page 5245]]

       ``(2) Appraisal requirements.--
       ``(A) Physical property visit.--An appraisal of property to 
     be secured by a mortgage referred to in section 103(aa) does 
     not meet the requirements of this subsection unless it is 
     performed by a qualified appraiser who conducts a physical 
     property visit of the interior of the mortgaged property.
       ``(B) Second appraisal under certain circumstances.--
       ``(i) In general.--If the purpose of a mortgage referred to 
     in section 103(aa) is to finance the purchase or acquisition 
     of the mortgaged property from a person within 180 days of 
     the date of purchase or acquisition of such property by that 
     person at a price that was lower than the current sale price 
     of the property, the creditor shall obtain a second appraisal 
     from a different qualified appraiser. The second appraisal 
     shall include an analysis of the difference in sale prices, 
     changes in market conditions, and any improvements made to 
     the property between the date of the previous sale and the 
     current sale.
       ``(ii) No cost to consumer.--The cost of any second 
     appraisal required under clause (i) may not be charged to the 
     consumer.
       ``(C) Qualified appraiser defined.--For purposes of this 
     subsection, the term `qualified appraiser' means a person 
     who--
       ``(i) is certified or licensed by the State in which the 
     property to be appraised is located; and
       ``(ii) performs each appraisal in conformity with the 
     Uniform Standards of Professional Appraisal Practice and 
     title XI of the Financial Institutions Reform, Recovery, and 
     Enforcement Act of 1989, and the regulations prescribed under 
     such title, as in effect on the date of the appraisal.
       ``(3) Free copy of appraisal.--A creditor shall provide 1 
     copy of each appraisal conducted in accordance with this 
     subsection in connection with a mortgage referred to in 
     section 103(aa) to the consumer without charge, at least 3 
     days prior to the transaction closing date.
       ``(4) Consumer notification.--At the time of the initial 
     mortgage application, the consumer shall be provided with a 
     statement by the creditor that any appraisal prepared for the 
     mortgage is for the sole use of the creditor, and that the 
     consumer may choose to have a separate appraisal conducted at 
     their own expense.
       ``(5) Violations.--In addition to any other liability to 
     any person under this title, a creditor found to have 
     willfully failed to obtain an appraisal as required in this 
     subsection shall be liable to the consumer for the sum of 
     $2,000.''.
       (b) Equal Credit Opportunity Act Amendment.--Section 701(e) 
     of the Equal Credit Opportunity Act (15 U.S.C. 1691(e)) is 
     amended to read as follows:
       ``(e) Copies Furnished to Applicants.--
       ``(1) In general.--Each creditor shall furnish to an 
     applicant, a copy of all appraisal reports and valuations 
     developed in connection with the applicant's application for 
     a loan that is or would have been secured by a lien on 
     residential real property.
       ``(2) Procedures.--Appraisal reports shall be furnished 
     under this subsection upon written request by the applicant, 
     made within a reasonable period of time of the application 
     and before closing.
       ``(3) Reimbursement.--The creditor may require the 
     applicant to pay a reasonable fee for the provision of copies 
     of appraisal reports under this subsection.
       ``(4) Notification to consumers.--The creditor shall notify 
     (pursuant to regulations prescribed by the Board) an 
     applicant in writing of the right to receive a copy of each 
     appraisal report, under this subsection.''.
       (c) Unfair and Deceptive Acts and Practices Relating to 
     Certain Consumer Credit Transactions.--Chapter 2 of the Truth 
     in Lending Act (15 U.S.C. 1631 et seq.) is amended by 
     inserting after section 129 the following new section:

     ``SEC. 129A. UNFAIR AND DECEPTIVE ACTS AND PRACTICES RELATING 
                   TO CERTAIN CONSUMER CREDIT TRANSACTIONS.

       ``(a) In General.--It shall be unlawful, in providing any 
     mortgage lending services for a consumer credit transaction 
     secured by the principal dwelling of the consumer or any 
     mortgage brokerage services for such a transaction, to engage 
     in any unfair or deceptive act or practice.
       ``(b) Appraisal Independence.--For purposes of subsection 
     (a), unfair and deceptive acts or practices shall include--
       ``(1) any appraisal of a property offered as security for 
     repayment of the consumer credit transaction that is 
     conducted in connection with such transaction, in which a 
     person with an interest in the underlying transaction 
     coerces, bribes, extorts, colludes, or otherwise improperly 
     influences a person conducting or involved in an appraisal, 
     or attempts to coerce, bribe, extort, collude, or otherwise 
     improperly influence such a person, for the purpose of 
     causing the appraised value assigned under the appraisal to 
     the property to be based on any factor other than the 
     independent judgment of the appraiser;
       ``(2) mischaracterizing or suborning any 
     mischaracterization of, the appraised value of the property 
     securing the extension of credit;
       ``(3) seeking to influence an appraiser or otherwise to 
     encourage a targeted value in order to facilitate the making 
     or pricing of the transaction; and
       ``(4) failing to timely compensate an appraiser for a 
     completed appraisal, regardless of whether the transaction 
     closes.
       ``(c) Exceptions.--The requirements of subsection (b) may 
     not be construed as prohibiting a mortgage lender, mortgage 
     broker, mortgage banker, real estate broker, or any other 
     person with an interest in a real estate transaction from 
     asking an appraiser to correct errors in the appraisal 
     report.
       ``(d) Rulemaking Proceedings.--The Board and the Federal 
     Trade Commission--
       ``(1) shall jointly prescribe regulations defining with 
     specificity acts or practices which are unfair or deceptive 
     in the provision of mortgage lending services for a consumer 
     credit transaction secured by the principal dwelling of the 
     consumer or mortgage brokerage services for such a 
     transaction, within the meaning of subsections (a), (b), and 
     (c); and
       ``(2) may jointly issue interpretive guidelines and general 
     statements of policy with respect to unfair or deceptive acts 
     or practices in the provision of mortgage lending services 
     for a consumer credit transaction secured by the principal 
     dwelling of the consumer and mortgage brokerage services for 
     such a transaction, within the meaning of subsections (a), 
     (b), and (c).
       ``(e) Definitions.--For purposes of this section--
       ``(1) the terms `mortgage brokerage services' and `mortgage 
     lending services', have the meanings given such terms in 
     section 13(f) of the Real Estate Settlement Procedures Act of 
     1974 (12 U.S.C. 2611(f)); and
       ``(2) the term `improperly influence' means any attempt to 
     manipulate, through coercion, extortion, collusion, non-
     payment for services rendered, direct or indirect 
     compensation, or bribery, the development, reporting, result, 
     or review of a property appraisal.
       ``(f) Penalties.--
       ``(1) First violation.--In addition to the enforcement 
     provisions referred to in section 130, each person who 
     violates this section shall forfeit and pay a civil penalty 
     of not more than $10,000 for each day during which any such 
     violation continues.
       ``(2) Subsequent violations.--In the case of any person on 
     whom a civil penalty has been imposed under paragraph (1), 
     paragraph (1) shall be applied by substituting `$20,000' for 
     `$10,000' with respect to all subsequent violations.
       ``(3) Assessment.--The agency referred to in subsection (a) 
     or (c) of section 108 with respect to any person described in 
     paragraph (1) shall assess any penalty under this subsection 
     to which such person is subject.''.
       (d) Clerical Amendment.--The table of sections for chapter 
     2 of the Truth in Lending Act is amended by inserting after 
     the item relating to section 129 the following new item:

``Sec. 129A. Unfair and deceptive practices and acts relating to 
              certain consumer credit transactions.''.
                                 ______
                                 
  SA 4462. Mr. KERRY (for himself, Mr. Grassley, Mrs. Boxer, and Ms. 
Cantwell) submitted an amendment intended to be proposed to amendment 
Sa 4387 submitted by Mr. Dodd (for himself and Mr. Shelby) to the bill 
H.R. 3221, moving the United States toward greater energy independence 
and security, developing innovative new technologies, reducing carbon 
emissions, creating green jobs, protecting consumers, increasing clean 
renewable energy production, and modernizing our energy infrastructure, 
and to amend the Internal Revenue Code of 1986 to provide tax 
incentives for the production of renewable energy and energy 
conservation; which was ordered to lie on the table; as follows:

       On page 82, between lines 7 and 8, insert the following:

     SEC. ___. INCREASE OF AMT REFUNDABLE CREDIT AMOUNT FOR 
                   INDIVIDUALS WITH LONG-TERM UNUSED CREDITS FOR 
                   PRIOR YEAR MINIMUM TAX LIABILITY, ETC.

       (a) In General.--Paragraph (2) of section 53(e) of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(2) AMT refundable credit amount.--For purposes of 
     paragraph (1), the term `AMT refundable credit amount' means, 
     with respect to any taxable year, the amount (not in excess 
     of the long-term unused minimum tax credit for such taxable 
     year) equal to the greater of--
       ``(A) 50 percent of the long-term unused minimum tax credit 
     for such taxable year, or
       ``(B) the amount (if any) of the AMT refundable credit 
     amount determined under this paragraph for the taxpayer's 
     preceding taxable year.''.
       (b) Treatment of Certain Underpayments, Interest, and 
     Penalties Attributable to the Treatment of Incentive Stock 
     Options.--Section 53 of the Internal Revenue Code of 1986 is 
     amended by adding at the end the following new subsection:

[[Page 5246]]

       ``(f) Treatment of Certain Underpayments, Interest, and 
     Penalties Attributable to the Treatment of Incentive Stock 
     Options.--
       ``(1) Abatement.--Any underpayment of tax outstanding on 
     the date of the enactment of this subsection which is 
     attributable to the application of section 56(b)(3) for any 
     taxable year ending before January 1, 2008 (and any interest 
     or penalty with respect to such underpayment which is 
     outstanding on such date of enactment), is hereby abated. No 
     credit shall be allowed under this section with respect to 
     any amount abated under this paragraph.
       ``(2) Increase in credit for certain interest and penalties 
     already paid.--Any interest or penalty paid before the date 
     of the enactment of this subsection which would (but for such 
     payment) have been abated under paragraph (1) shall be 
     treated for purposes of this section as an amount of adjusted 
     net minimum tax imposed for the taxable year of the 
     underpayment to which such interest or penalty relates.''.
       (c) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendment made by this section shall apply to taxable years 
     beginning after December 31, 2007.
       (2) Abatement.--Section 53(f)(1) of the Internal Revenue 
     Code of 1986, as added by subsection (b), shall take effect 
     on the date of the enactment of this Act.
                                 ______
                                 
  SA 4463. Mr. BROWNBACK submitted an amendment intended to be proposed 
by him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       On page 27, beginning on line 20, strike ``conform with 
     those customarily used by secondary market purchasers of 
     residential mortgage loans'' and insert the following: 
     ``improve the overall default risk evaluation currently used 
     by secondary market purchasers of residential mortgage loans. 
     Particular attention shall be given to the development and 
     utilization of processes and technologies that provide a 
     means to standardize the measurement of risk to the Fund as 
     well as to the consumer''.
                                 ______
                                 
  SA 4464. Mr. CRAPO (for himself and Mr. Johnson) submitted an 
amendment intended to be proposed by him to the bill H.R. 3221, moving 
the United States toward greater energy independence and security, 
developing innovative new technologies, reducing carbon emissions, 
creating green jobs, protecting consumers, increasing clean renewable 
energy production, and modernizing our energy infrastructure, and to 
amend the Internal Revenue Code of 1986 to provide tax incentives for 
the production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. COMMUNITY DEVELOPMENT INVESTMENT AUTHORITY FOR 
                   DEPOSITORY INSTITUTIONS.

       (a) Depository Institution Community Development 
     Investments.--
       (1) National banks.--The first sentence of the paragraph 
     designated as the ``Eleventh'' of section 5136 of the Revised 
     Statutes of the United States (12 U.S.C. 24) (as amended by 
     section 305(a) of the Financial Services Regulatory Relief 
     Act of 2006) is amended by striking ``promotes the public 
     welfare by benefitting primarily'' and inserting ``is 
     designed primarily to promote the public welfare, including 
     the welfare of''.
       (2) State member banks.--The first sentence of the 23rd 
     paragraph of section 9 of the Federal Reserve Act (12 U.S.C. 
     338a) is amended by striking ``promotes the public welfare by 
     benefitting primarily'' and inserting ``is designed primarily 
     to promote the public welfare, including the welfare of''.
       (b) Investments by Federal Savings Associations to Promote 
     Public Welfare.--Section 5(c) of the Home Owners' Loan Act 
     (12 U.S.C. 1464(c)) is amended--
       (1) in paragraph (3)--
       (A) by striking subparagraph (A); and
       (B) by redesignating subparagraphs (B) and (C), as 
     subparagraphs (A) and (B), respectively; and
       (2) in paragraph (4), by adding at the end the following 
     new subparagraph:
       ``(G) Direct investments to promote the public welfare.--
       ``(i) In general.--A Federal savings association may make 
     investments, directly or indirectly, each of which is 
     designed primarily to promote the public welfare, including 
     the welfare of low- and moderate-income communities or 
     families through the provision of housing, services, and 
     jobs.
       ``(ii) Direct investments or acquisition of interest in 
     other companies.--Investments under clause (i) may be made 
     directly or by purchasing interests in an entity primarily 
     engaged in making such investments.
       ``(iii) Prohibition on unlimited liability.--No investment 
     may be made under this subparagraph which would subject a 
     Federal savings association to unlimited liability to any 
     person.
       ``(iv) Single investment limitation to be established by 
     director.--Subject to clauses (v) and (vi), the Director 
     shall establish, by order or regulation, limits on--

       ``(I) the amount that any savings association may invest in 
     any 1 project; and
       ``(II) the aggregate amount of investment of any savings 
     association under this subparagraph.

       ``(v) Flexible aggregate investment limitation.--The 
     aggregate amount of investments of any savings association 
     under this subparagraph may not exceed an amount equal to the 
     sum of 5 percent of the capital stock of the savings 
     association actually paid in and unimpaired and 5 percent of 
     the unimpaired surplus of the savings association, unless--

       ``(I) the Director determines that the savings association 
     is adequately capitalized; and
       ``(II) the Director determines, by order, that the 
     aggregate amount of investments in a higher amount than the 
     limit under this clause would pose no significant risk to the 
     affected Deposit Insurance Fund.

       ``(vi) Maximum aggregate investment limitation.--
     Notwithstanding clause (v), the aggregate amount of 
     investments of any savings association under this 
     subparagraph may not exceed an amount equal to the sum of 15 
     percent of the capital stock of the savings association 
     actually paid in and unimpaired and 15 percent of the 
     unimpaired surplus of the savings association.
       ``(vii) Investments not subject to other limitation on 
     quality of investments.--No obligation that a Federal savings 
     association acquires or retains under this subparagraph shall 
     be taken into account for purposes of the limitation 
     contained in section 28(d) of the Federal Deposit Insurance 
     Act on the acquisition and retention of any corporate debt 
     security not of investment grade.
       ``(viii) Applicability of standards to each investment.--
     The standards and limitations of this subparagraph shall 
     apply to each investment under this subparagraph made by a 
     savings association directly and by its subsidiaries.''.
                                 ______
                                 
  SA 4465. Mr. VITTER (for himself and Mr. Inhofe) submitted an 
amendment intended to be proposed by him to the bill H.R. 3221, moving 
the United States toward greater energy independence and security, 
developing innovative new technologies, reducing carbon emissions, 
creating green jobs, protecting consumers, increasing clean renewable 
energy production, and modernizing our energy infrastructure, and to 
amend the Internal Revenue Code of 1986 to provide tax incentives for 
the production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       At the end, add the following:

     TITLE VIII--ENSURING ASSISTANCE IS PROVIDED ONLY TO DESERVING 
                               HOMEOWNERS

     SEC. 801. LIMITATION ON USE OF FUNDS.

       (a) Definition.--For purposes of this section, the term 
     ``housing assistance'' means the following:
       (1) Any amounts appropriated, authorized to be 
     appropriated, or otherwise made available under this Act, or 
     any amendment made by this Act.
       (2) Any qualified mortgage bond issued by a State or 
     political subdivision or any other entity or organization 
     pursuant to section 143(k)(12) of the Internal Revenue Code, 
     as added by section 602 of this Act.
       (3) Any tax credit related to certain home purchases 
     allowable under section 25E of the Internal Revenue Code of 
     1986, as added by section 603 of this Act.
       (b) Limitation.--Housing assistance shall not be provided 
     or distributed to, or used by, any homeowner that made--
       (1) any material misstatement or misrepresentation on his 
     or her original mortgage application; or
       (2) any false statements on his or her original mortgage 
     application to qualify for the home loan.
                                 ______
                                 
  SA 4466. Mr. VITTER (for himself and Mr. Inhofe) submitted an 
amendment intended to be proposed by him to the bill H.R. 3221, moving 
the United States toward greater energy independence and security, 
developing innovative new technologies, reducing carbon emissions, 
creating green jobs, protecting consumers, increasing clean renewable 
energy production, and modernizing our energy infrastructure, and to 
amend the Internal Revenue Code of 1986 to provide tax incentives for 
the production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:


[[Page 5247]]

       At the end, add the following:

     TITLE VIII--ENSURING ASSISTANCE IS PROVIDED ONLY TO DESERVING 
                               HOMEOWNERS

     SEC. 801. LIMITATION ON USE OF FUNDS.

       (a) Limitation.--None of the amounts appropriated, 
     authorized to be appropriated, or otherwise made available 
     under this Act, or any amendment made by this Act, shall be 
     provided or distributed to, or used by, any homeowner that 
     made--
       (1) any material misstatement or misrepresentation on his 
     or her original mortgage application; or
       (2) any false statements on his or her original mortgage 
     application to qualify for the home loan.
                                 ______
                                 
  SA 4467. Mr. ENSIGN submitted an amendment intended to be proposed by 
him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       Strike all after the first word and insert the following:

     1. SHORT TITLE; ETC.

       (a) Short Title.--This Act may be cited as the ``Clean 
     Energy Tax Stimulus Act of 2008''.
       (b) Amendment of 1986 Code.--Except as otherwise expressly 
     provided, whenever in this Act an amendment or repeal is 
     expressed in terms of an amendment to, or repeal of, a 
     section or other provision, the reference shall be considered 
     to be made to a section or other provision of the Internal 
     Revenue Code of 1986.
       (c) Table of Contents.--The table of contents for this Act 
     is as follows:
Sec. 1. Short title; etc.

        TITLE I--EXTENSION OF CLEAN ENERGY PRODUCTION INCENTIVES

Sec. 101. Extension and modification of renewable energy production tax 
              credit.
Sec. 102. Extension and modification of solar energy and fuel cell 
              investment tax credit.
Sec. 103. Extension and modification of residential energy efficient 
              property credit.
Sec. 104. Extension and modification of credit for clean renewable 
              energy bonds.
Sec. 105. Extension of special rule to implement FERC restructuring 
              policy.

     TITLE II--EXTENSION OF INCENTIVES TO IMPROVE ENERGY EFFICIENCY

Sec. 201. Extension and modification of credit for energy efficiency 
              improvements to existing homes.
Sec. 202. Extension and modification of tax credit for energy efficient 
              new homes.
Sec. 203. Extension and modification of energy efficient commercial 
              buildings deduction.
Sec. 204. Modification and extension of energy efficient appliance 
              credit for appliances produced after 2007.

        TITLE I--EXTENSION OF CLEAN ENERGY PRODUCTION INCENTIVES

     SEC. 101. EXTENSION AND MODIFICATION OF RENEWABLE ENERGY 
                   PRODUCTION TAX CREDIT.

       (a) Extension of Credit.--Each of the following provisions 
     of section 45(d) (relating to qualified facilities) is 
     amended by striking ``January 1, 2009'' and inserting 
     ``January 1, 2010'':
       (1) Paragraph (1).
       (2) Clauses (i) and (ii) of paragraph (2)(A).
       (3) Clauses (i)(I) and (ii) of paragraph (3)(A).
       (4) Paragraph (4).
       (5) Paragraph (5).
       (6) Paragraph (6).
       (7) Paragraph (7).
       (8) Paragraph (8).
       (9) Subparagraphs (A) and (B) of paragraph (9).
       (b) Production Credit for Electricity Produced From Marine 
     Renewables.--
       (1) In general.--Paragraph (1) of section 45(c) (relating 
     to resources) is amended by striking ``and'' at the end of 
     subparagraph (G), by striking the period at the end of 
     subparagraph (H) and inserting ``, and'', and by adding at 
     the end the following new subparagraph:
       ``(I) marine and hydrokinetic renewable energy.''.
       (2) Marine renewables.--Subsection (c) of section 45 is 
     amended by adding at the end the following new paragraph:
       ``(10) Marine and hydrokinetic renewable energy.--
       ``(A) In general.--The term `marine and hydrokinetic 
     renewable energy' means energy derived from--
       ``(i) waves, tides, and currents in oceans, estuaries, and 
     tidal areas,
       ``(ii) free flowing water in rivers, lakes, and streams,
       ``(iii) free flowing water in an irrigation system, canal, 
     or other man-made channel, including projects that utilize 
     nonmechanical structures to accelerate the flow of water for 
     electric power production purposes, or
       ``(iv) differentials in ocean temperature (ocean thermal 
     energy conversion).
       ``(B) Exceptions.--Such term shall not include any energy 
     which is derived from any source which utilizes a dam, 
     diversionary structure (except as provided in subparagraph 
     (A)(iii)), or impoundment for electric power production 
     purposes.''.
       (3) Definition of facility.--Subsection (d) of section 45 
     is amended by adding at the end the following new paragraph:
       ``(11) Marine and hydrokinetic renewable energy 
     facilities.--In the case of a facility producing electricity 
     from marine and hydrokinetic renewable energy, the term 
     `qualified facility' means any facility owned by the 
     taxpayer--
       ``(A) which has a nameplate capacity rating of at least 150 
     kilowatts, and
       ``(B) which is originally placed in service on or after the 
     date of the enactment of this paragraph and before January 1, 
     2010.''.
       (4) Credit rate.--Subparagraph (A) of section 45(b)(4) is 
     amended by striking ``or (9)'' and inserting ``(9), or 
     (11)''.
       (5) Coordination with small irrigation power.--Paragraph 
     (5) of section 45(d), as amended by subsection (a), is 
     amended by striking ``January 1, 2010'' and inserting ``the 
     date of the enactment of paragraph (11)''.
       (c) Sales of Electricity to Regulated Public Utilities 
     Treated as Sales to Unrelated Persons.--Section 45(e)(4) 
     (relating to related persons) is amended by adding at the end 
     the following new sentence: ``A taxpayer shall be treated as 
     selling electricity to an unrelated person if such 
     electricity is sold to a regulated public utility (as defined 
     in section 7701(a)(33).''.
       (d) Trash Facility Clarification.--Paragraph (7) of section 
     45(d) is amended--
       (1) by striking ``facility which burns'' and inserting 
     ``facility (other than a facility described in paragraph (6)) 
     which uses'', and
       (2) by striking ``combustion''.
       (e) Effective Dates.--
       (1) Extension.--The amendments made by subsection (a) shall 
     apply to property originally placed in service after December 
     31, 2008.
       (2) Modifications.--The amendments made by subsections (b) 
     and (c) shall apply to electricity produced and sold after 
     the date of the enactment of this Act, in taxable years 
     ending after such date.
       (3) Trash facility clarification.--The amendments made by 
     subsection (d) shall apply to electricity produced and sold 
     before, on, or after December 31, 2007.

     SEC. 102. EXTENSION AND MODIFICATION OF SOLAR ENERGY AND FUEL 
                   CELL INVESTMENT TAX CREDIT.

       (a) Extension of Credit.--
       (1) Solar energy property.--Paragraphs (2)(A)(i)(II) and 
     (3)(A)(ii) of section 48(a) (relating to energy credit) are 
     each amended by striking ``January 1, 2009'' and inserting 
     ``January 1, 2017''.
       (2) Fuel cell property.--Subparagraph (E) of section 
     48(c)(1) (relating to qualified fuel cell property) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2017''.
       (3) Qualified microturbine property.--Subparagraph (E) of 
     section 48(c)(2) (relating to qualified microturbine 
     property) is amended by striking ``December 31, 2008'' and 
     inserting ``December 31, 2017''.
       (b) Allowance of Energy Credit Against Alternative Minimum 
     Tax.--Subparagraph (B) of section 38(c)(4) (relating to 
     specified credits) is amended by striking ``and'' at the end 
     of clause (iii), by striking the period at the end of clause 
     (iv) and inserting ``, and'', and by adding at the end the 
     following new clause:
       ``(v) the credit determined under section 46 to the extent 
     that such credit is attributable to the energy credit 
     determined under section 48.''.
       (c) Repeal of Dollar Per Kilowatt Limitation for Fuel Cell 
     Property.--
       (1) In general.--Section 48(c)(1) (relating to qualified 
     fuel cell), as amended by subsection (a)(2), is amended by 
     striking subparagraph (B) and by redesignating subparagraphs 
     (C), (D), and (E) as subparagraphs (B), (C), and (D), 
     respectively.
       (2) Conforming amendment.--Section 48(a)(1) is amended by 
     striking ``paragraphs (1)(B) and (2)(B) of subsection (c)'' 
     and inserting ``subsection (c)(2)(B)''.
       (d) Public Electric Utility Property Taken Into Account.--
       (1) In general.--Paragraph (3) of section 48(a) is amended 
     by striking the second sentence thereof.
       (2) Conforming amendments.--
       (A) Paragraph (1) of section 48(c), as amended by this 
     section, is amended by striking subparagraph (C) and 
     redesignating subparagraph (D) as subparagraph (C).
       (B) Paragraph (2) of section 48(c), as amended by 
     subsection (a)(3), is amended by striking subparagraph (D) 
     and redesignating subparagraph (E) as subparagraph (D).
       (e) Effective Dates.--

[[Page 5248]]

       (1) Extension.--The amendments made by subsection (a) shall 
     take effect on the date of the enactment of this Act.
       (2) Allowance against alternative minimum tax.--The 
     amendments made by subsection (b) shall apply to credits 
     determined under section 46 of the Internal Revenue Code of 
     1986 in taxable years beginning after the date of the 
     enactment of this Act and to carrybacks of such credits.
       (3) Fuel cell property and public electric utility 
     property.--The amendments made by subsections (c) and (d) 
     shall apply to periods after the date of the enactment of 
     this Act, in taxable years ending after such date, under 
     rules similar to the rules of section 48(m) of the Internal 
     Revenue Code of 1986 (as in effect on the day before the date 
     of the enactment of the Revenue Reconciliation Act of 1990).

     SEC. 103. EXTENSION AND MODIFICATION OF RESIDENTIAL ENERGY 
                   EFFICIENT PROPERTY CREDIT.

       (a) Extension.--Section 25D(g) (relating to termination) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.
       (b) No Dollar Limitation for Credit for Solar Electric 
     Property.--
       (1) In general.--Section 25D(b)(1) (relating to maximum 
     credit) is amended by striking subparagraph (A) and by 
     redesignating subparagraphs (B) and (C) as subparagraphs (A) 
     and (B), respectively.
       (2) Conforming amendments.--Section 25D(e)(4) is amended--
       (A) by striking clause (i) in subparagraph (A),
       (B) by redesignating clauses (ii) and (iii) in subparagraph 
     (A) as clauses (i) and (ii), respectively, and
       (C) by striking ``, (2),'' in subparagraph (C).
       (c) Credit Allowed Against Alternative Minimum Tax.--
       (1) In general.--Subsection (c) of section 25D is amended 
     to read as follows:
       ``(c) Limitation Based on Amount of Tax; Carryforward of 
     Unused Credit.--
       ``(1) Limitation based on amount of tax.--In the case of a 
     taxable year to which section 26(a)(2) does not apply, the 
     credit allowed under subsection (a) for the taxable year 
     shall not exceed the excess of--
       ``(A) the sum of the regular tax liability (as defined in 
     section 26(b)) plus the tax imposed by section 55, over
       ``(B) the sum of the credits allowable under this subpart 
     (other than this section) and section 27 for the taxable 
     year.
       ``(2) Carryforward of unused credit.--
       ``(A) Rule for years in which all personal credits allowed 
     against regular and alternative minimum tax.--In the case of 
     a taxable year to which section 26(a)(2) applies, if the 
     credit allowable under subsection (a) exceeds the limitation 
     imposed by section 26(a)(2) for such taxable year reduced by 
     the sum of the credits allowable under this subpart (other 
     than this section), such excess shall be carried to the 
     succeeding taxable year and added to the credit allowable 
     under subsection (a) for such succeeding taxable year.
       ``(B) Rule for other years.--In the case of a taxable year 
     to which section 26(a)(2) does not apply, if the credit 
     allowable under subsection (a) exceeds the limitation imposed 
     by paragraph (1) for such taxable year, such excess shall be 
     carried to the succeeding taxable year and added to the 
     credit allowable under subsection (a) for such succeeding 
     taxable year.''.
       (2) Conforming amendments.--
       (A) Section 23(b)(4)(B) is amended by inserting ``and 
     section 25D'' after ``this section''.
       (B) Section 24(b)(3)(B) is amended by striking ``and 25B'' 
     and inserting ``, 25B, and 25D''.
       (C) Section 25B(g)(2) is amended by striking ``section 23'' 
     and inserting ``sections 23 and 25D''.
       (D) Section 26(a)(1) is amended by striking ``and 25B'' and 
     inserting ``25B, and 25D''.
       (d) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     apply to taxable years beginning after December 31, 2007.
       (2) Application of egtrra sunset.--The amendments made by 
     subparagraphs (A) and (B) of subsection (c)(2) shall be 
     subject to title IX of the Economic Growth and Tax Relief 
     Reconciliation Act of 2001 in the same manner as the 
     provisions of such Act to which such amendments relate.

     SEC. 104. EXTENSION AND MODIFICATION OF CREDIT FOR CLEAN 
                   RENEWABLE ENERGY BONDS.

       (a) Extension.--Section 54(m) (relating to termination) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.
       (b) Increase in National Limitation.--Section 54(f) 
     (relating to limitation on amount of bonds designated) is 
     amended--
       (1) by inserting ``, and for the period beginning after the 
     date of the enactment of the Clean Energy Tax Stimulus Act of 
     2008 and ending before January 1, 2010, $400,000,000'' after 
     ``$1,200,000,000'' in paragraph (1),
       (2) by striking ``$750,000,000 of the'' in paragraph (2) 
     and inserting ``$750,000,000 of the $1,200,000,000'', and
       (3) by striking ``bodies'' in paragraph (2) and inserting 
     ``bodies, and except that the Secretary may not allocate more 
     than \1/3\ of the $400,000,000 national clean renewable 
     energy bond limitation to finance qualified projects of 
     qualified borrowers which are public power providers nor more 
     than \1/3\ of such limitation to finance qualified projects 
     of qualified borrowers which are mutual or cooperative 
     electric companies described in section 501(c)(12) or section 
     1381(a)(2)(C)''.
       (c) Public Power Providers Defined.--Section 54(j) is 
     amended--
       (1) by adding at the end the following new paragraph:
       ``(6) Public power provider.--The term `public power 
     provider' means a State utility with a service obligation, as 
     such terms are defined in section 217 of the Federal Power 
     Act (as in effect on the date of the enactment of this 
     paragraph).'', and
       (2) by inserting ``; Public Power Provider'' before the 
     period at the end of the heading.
       (d) Technical Amendment.--The third sentence of section 
     54(e)(2) is amended by striking ``subsection (l)(6)'' and 
     inserting ``subsection (l)(5)''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

     SEC. 105. EXTENSION OF SPECIAL RULE TO IMPLEMENT FERC 
                   RESTRUCTURING POLICY.

       (a) Qualifying Electric Transmission Transaction.--
       (1) In general.--Section 451(i)(3) (defining qualifying 
     electric transmission transaction) is amended by striking 
     ``January 1, 2008'' and inserting ``January 1, 2010''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to transactions after December 31, 2007.
       (b) Independent Transmission Company.--
       (1) In general.--Section 451(i)(4)(B)(ii) (defining 
     independent transmission company) is amended by striking 
     ``December 31, 2007'' and inserting ``the date which is 2 
     years after the date of such transaction''.
       (2) Effective date.--The amendment made by this subsection 
     shall take effect as if included in the amendments made by 
     section 909 of the American Jobs Creation Act of 2004.

     TITLE II--EXTENSION OF INCENTIVES TO IMPROVE ENERGY EFFICIENCY

     SEC. 201. EXTENSION AND MODIFICATION OF CREDIT FOR ENERGY 
                   EFFICIENCY IMPROVEMENTS TO EXISTING HOMES.

       (a) Extension of Credit.--Section 25C(g) (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2009''.
       (b) Qualified Biomass Fuel Property.--
       (1) In general.--Section 25C(d)(3) is amended--
       (A) by striking ``and'' at the end of subparagraph (D),
       (B) by striking the period at the end of subparagraph (E) 
     and inserting ``, and'', and
       (C) by adding at the end the following new subparagraph:
       ``(F) a stove which uses the burning of biomass fuel to 
     heat a dwelling unit located in the United States and used as 
     a residence by the taxpayer, or to heat water for use in such 
     a dwelling unit, and which has a thermal efficiency rating of 
     at least 75 percent.''.
       (2) Biomass fuel.--Section 25C(d) (relating to residential 
     energy property expenditures) is amended by adding at the end 
     the following new paragraph:
       ``(6) Biomass fuel.--The term `biomass fuel' means any 
     plant-derived fuel available on a renewable or recurring 
     basis, including agricultural crops and trees, wood and wood 
     waste and residues (including wood pellets), plants 
     (including aquatic plants), grasses, residues, and fibers.''.
       (c) Modifications of Standards for Energy-Efficient 
     Building Property.--
       (1) Electric heat pumps.--Subparagraph (B) of section 
     25C(d)(3) is amended to read as follows:
       ``(A) an electric heat pump which achieves the highest 
     efficiency tier established by the Consortium for Energy 
     Efficiency, as in effect on January 1, 2008.''.
       (2) Central air conditioners.--Section 25C(d)(3)(D) is 
     amended by striking ``2006'' and inserting ``2008''.
       (3) Water heaters.--Subparagraph (E) of section 25C(d) is 
     amended to read as follows:
       ``(E) a natural gas, propane, or oil water heater which has 
     either an energy factor of at least 0.80 or a thermal 
     efficiency of at least 90 percent.''.
       (4) Oil furnaces and hot water boilers.--Paragraph (4) of 
     section 25C(d) is amended to read as follows:
       ``(4) Qualified natural gas, propane, and oil furnaces and 
     hot water boilers.--
       ``(A) Qualified natural gas furnace.--The term `qualified 
     natural gas furnace' means any natural gas furnace which 
     achieves an annual fuel utilization efficiency rate of not 
     less than 95.
       ``(B) Qualified natural gas hot water boiler.--The term 
     `qualified natural gas hot water boiler' means any natural 
     gas hot water boiler which achieves an annual fuel 
     utilization efficiency rate of not less than 90.
       ``(C) Qualified propane furnace.--The term `qualified 
     propane furnace' means any propane furnace which achieves an 
     annual fuel utilization efficiency rate of not less than 95.

[[Page 5249]]

       ``(D) Qualified propane hot water boiler.--The term 
     `qualified propane hot water boiler' means any propane hot 
     water boiler which achieves an annual fuel utilization 
     efficiency rate of not less than 90.
       ``(E) Qualified oil furnaces.--The term `qualified oil 
     furnace' means any oil furnace which achieves an annual fuel 
     utilization efficiency rate of not less than 90.
       ``(F) Qualified oil hot water boiler.--The term `qualified 
     oil hot water boiler' means any oil hot water boiler which 
     achieves an annual fuel utilization efficiency rate of not 
     less than 90.''.
       (d) Effective Date.--The amendments made this section shall 
     apply to expenditures made after December 31, 2007.

     SEC. 202. EXTENSION AND MODIFICATION OF TAX CREDIT FOR ENERGY 
                   EFFICIENT NEW HOMES.

       (a) Extension of Credit.--Subsection (g) of section 45L 
     (relating to termination) is amended by striking ``December 
     31, 2008'' and inserting ``December 31, 2010''.
       (b) Allowance for Contractor's Personal Residence.--
     Subparagraph (B) of section 45L(a)(1) is amended to read as 
     follows:
       ``(B)(i) acquired by a person from such eligible contractor 
     and used by any person as a residence during the taxable 
     year, or
       ``(ii) used by such eligible contractor as a residence 
     during the taxable year.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to homes acquired after December 31, 2008.

     SEC. 203. EXTENSION AND MODIFICATION OF ENERGY EFFICIENT 
                   COMMERCIAL BUILDINGS DEDUCTION.

       (a) Extension.--Section 179D(h) (relating to termination) 
     is amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.
       (b) Adjustment of Maximum Deduction Amount.--
       (1) In general.--Subparagraph (A) of section 179D(b)(1) 
     (relating to maximum amount of deduction) is amended by 
     striking ``$1.80'' and inserting ``$2.25''.
       (2) Partial allowance.--Paragraph (1) of section 179D(d) is 
     amended--
       (A) by striking ``$.60'' and inserting ``$0.75'', and
       (B) by striking ``$1.80'' and inserting ``$2.25''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.

     SEC. 204. MODIFICATION AND EXTENSION OF ENERGY EFFICIENT 
                   APPLIANCE CREDIT FOR APPLIANCES PRODUCED AFTER 
                   2007.

       (a) In General.--Subsection (b) of section 45M (relating to 
     applicable amount) is amended to read as follows:
       ``(b) Applicable Amount.--For purposes of subsection (a)--
       ``(1) Dishwashers.--The applicable amount is--
       ``(A) $45 in the case of a dishwasher which is manufactured 
     in calendar year 2008 or 2009 and which uses no more than 324 
     kilowatt hours per year and 5.8 gallons per cycle, and
       ``(B) $75 in the case of a dishwasher which is manufactured 
     in calendar year 2008, 2009, or 2010 and which uses no more 
     than 307 kilowatt hours per year and 5.0 gallons per cycle 
     (5.5 gallons per cycle for dishwashers designed for greater 
     than 12 place settings).
       ``(2) Clothes washers.--The applicable amount is--
       ``(A) $75 in the case of a residential top-loading clothes 
     washer manufactured in calendar year 2008 which meets or 
     exceeds a 1.72 modified energy factor and does not exceed a 
     8.0 water consumption factor,
       ``(B) $125 in the case of a residential top-loading clothes 
     washer manufactured in calendar year 2008 or 2009 which meets 
     or exceeds a 1.8 modified energy factor and does not exceed a 
     7.5 water consumption factor,
       ``(C) $150 in the case of a residential or commercial 
     clothes washer manufactured in calendar year 2008, 2009, or 
     2010 which meets or exceeds 2.0 modified energy factor and 
     does not exceed a 6.0 water consumption factor, and
       ``(D) $250 in the case of a residential or commercial 
     clothes washer manufactured in calendar year 2008, 2009, or 
     2010 which meets or exceeds 2.2 modified energy factor and 
     does not exceed a 4.5 water consumption factor.
       ``(3) Refrigerators.--The applicable amount is--
       ``(A) $50 in the case of a refrigerator which is 
     manufactured in calendar year 2008, and consumes at least 20 
     percent but not more than 22.9 percent less kilowatt hours 
     per year than the 2001 energy conservation standards,
       ``(B) $75 in the case of a refrigerator which is 
     manufactured in calendar year 2008 or 2009, and consumes at 
     least 23 percent but no more than 24.9 percent less kilowatt 
     hours per year than the 2001 energy conservation standards,
       ``(C) $100 in the case of a refrigerator which is 
     manufactured in calendar year 2008, 2009, or 2010, and 
     consumes at least 25 percent but not more than 29.9 percent 
     less kilowatt hours per year than the 2001 energy 
     conservation standards, and
       ``(D) $200 in the case of a refrigerator manufactured in 
     calendar year 2008, 2009, or 2010 and which consumes at least 
     30 percent less energy than the 2001 energy conservation 
     standards.''.
       (b) Eligible Production.--
       (1) Similar treatment for all appliances.--Subsection (c) 
     of section 45M (relating to eligible production) is amended--
       (A) by striking paragraph (2),
       (B) by striking ``(1) In general'' and all that follows 
     through ``the eligible'' and inserting ``The eligible'', and
       (C) by moving the text of such subsection in line with the 
     subsection heading and redesignating subparagraphs (A) and 
     (B) as paragraphs (1) and (2), respectively.
       (2) Modification of base period.--Paragraph (2) of section 
     45M(c), as amended by paragraph (1) of this section, is 
     amended by striking ``3-calendar year'' and inserting ``2-
     calendar year''.
       (c) Types of Energy Efficient Appliances.--Subsection (d) 
     of section 45M (defining types of energy efficient 
     appliances) is amended to read as follows:
       ``(d) Types of Energy Efficient Appliance.--For purposes of 
     this section, the types of energy efficient appliances are--
       ``(1) dishwashers described in subsection (b)(1),
       ``(2) clothes washers described in subsection (b)(2), and
       ``(3) refrigerators described in subsection (b)(3).''.
       (d) Aggregate Credit Amount Allowed.--
       (1) Increase in limit.--Paragraph (1) of section 45M(e) 
     (relating to aggregate credit amount allowed) is amended to 
     read as follows:
       ``(1) Aggregate credit amount allowed.--The aggregate 
     amount of credit allowed under subsection (a) with respect to 
     a taxpayer for any taxable year shall not exceed $75,000,000 
     reduced by the amount of the credit allowed under subsection 
     (a) to the taxpayer (or any predecessor) for all prior 
     taxable years beginning after December 31, 2007.''.
       (2) Exception for certain refrigerator and clothes 
     washers.--Paragraph (2) of section 45M(e) is amended to read 
     as follows:
       ``(2) Amount allowed for certain refrigerators and clothes 
     washers.--Refrigerators described in subsection (b)(3)(D) and 
     clothes washers described in subsection (b)(2)(D) shall not 
     be taken into account under paragraph (1).''.
       (e) Qualified Energy Efficient Appliances.--
       (1) In general.--Paragraph (1) of section 45M(f) (defining 
     qualified energy efficient appliance) is amended to read as 
     follows:
       ``(1) Qualified energy efficient appliance.--The term 
     `qualified energy efficient appliance' means--
       ``(A) any dishwasher described in subsection (b)(1),
       ``(B) any clothes washer described in subsection (b)(2), 
     and
       ``(C) any refrigerator described in subsection (b)(3).''.
       (2) Clothes washer.--Section 45M(f)(3) (defining clothes 
     washer) is amended by inserting ``commercial'' before 
     ``residential'' the second place it appears.
       (3) Top-loading clothes washer.--Subsection (f) of section 
     45M (relating to definitions) is amended by redesignating 
     paragraphs (4), (5), (6), and (7) as paragraphs (5), (6), 
     (7), and (8), respectively, and by inserting after paragraph 
     (3) the following new paragraph:
       ``(4) Top-loading clothes washer.--The term `top-loading 
     clothes washer' means a clothes washer which has the clothes 
     container compartment access located on the top of the 
     machine and which operates on a vertical axis.''.
       (4) Replacement of energy factor.--Section 45M(f)(6), as 
     redesignated by paragraph (3), is amended to read as follows:
       ``(6) Modified energy factor.--The term `modified energy 
     factor' means the modified energy factor established by the 
     Department of Energy for compliance with the Federal energy 
     conservation standard.''.
       (5) Gallons per cycle; water consumption factor.--Section 
     45M(f) (relating to definitions), as amended by paragraph 
     (3), is amended by adding at the end the following:
       ``(9) Gallons per cycle.--The term `gallons per cycle' 
     means, with respect to a dishwasher, the amount of water, 
     expressed in gallons, required to complete a normal cycle of 
     a dishwasher.
       ``(10) Water consumption factor.--The term `water 
     consumption factor' means, with respect to a clothes washer, 
     the quotient of the total weighted per-cycle water 
     consumption divided by the cubic foot (or liter) capacity of 
     the clothes washer.''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to appliances produced after December 31, 2007.
                                 ______
                                 
  SA 4468. Mr. KYL submitted an amendment intended to be proposed by 
him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the

[[Page 5250]]

production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

             TITLE   --EXTENSION OF EXPIRING TAX PROVISIONS

     SEC. -00. AMENDMENT OF 1986 CODE.

       Except as otherwise expressly provided, whenever in this 
     title an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Internal Revenue Code of 1986.

                 Subtitle A--Individual Tax Provisions

                  PART I--PROVISIONS EXPIRING IN 2007

     SEC. -01. NONBUSINESS ENERGY PROPERTY.

       (a) Extension of Credit.--Section 25C(g) (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. -02. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME FOR 
                   PURPOSES OF THE EARNED INCOME CREDIT.

       (a) In General.--Subclause (II) of section 32(c)(2)(B)(vi) 
     (defining earned income) is amended by striking ``January 1, 
     2008'' and inserting ``January 1, 2010''.
       (b) Conforming Amendment.--Paragraph (4) of section 6428, 
     as amended by the Economic Stimulus Act of 2008, is amended 
     to read as follows:
       ``(4) Earned income.--The term `earned income' has the 
     meaning set forth in section 32(c)(2) except that such term 
     shall not include net earnings from self-employment which are 
     not taken into account in computing taxable income.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after December 31, 2007.

     SEC. -03. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND 
                   SECONDARY SCHOOL TEACHERS.

       (a) In General.--Subparagraph (D) of section 62(a)(2) 
     (relating to certain expenses of elementary and secondary 
     school teachers) is amended by striking ``or 2007'' and 
     inserting ``2007, 2008, or 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. -04. DISTRIBUTIONS FROM RETIREMENT PLANS TO INDIVIDUALS 
                   CALLED TO ACTIVE DUTY.

       (a) In General.--Clause (iv) of section 72(t)(2)(G) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``January 1, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to individuals ordered or called to active duty 
     on or after December 31, 2007.

     SEC. -05. MODIFICATION OF MORTGAGE REVENUE BONDS FOR 
                   VETERANS.

       (a) Qualified Mortgage Bonds Used To Finance Residences for 
     Veterans Without Regard to First-Time Homebuyer 
     Requirement.--Subparagraph (D) of section 143(d)(2) (relating 
     to exceptions) is amended by inserting ``and after the date 
     of the enactment of the Foreclosure Prevention Act and before 
     January 1, 2010'' after ``January 1, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

     SEC. -06. DEDUCTION FOR STATE AND LOCAL SALES TAXES.

       (a) In General.--Subparagraph (I) of section 164(b)(5) is 
     amended by striking ``January 1, 2008'' and inserting 
     ``January 1, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. -07. ARCHER MSAS.

       (a) In General.--Subsection (i) of section 220 (relating to 
     limitation on number of taxpayers having Archer MSAs) is 
     amended--
       (1) by striking ``2007'' each place it appears in 
     paragraphs (2) and (3)(B) and inserting ``2009'',
       (2) by striking ``2007'' in the heading of paragraph (3)(B) 
     and inserting ``2009''.
       (b) Conforming Amendments.--Subsection (j) of section 220 
     is amended--
       (1) by striking ``or 2006'' each place it appears in 
     paragraph (2) and inserting ``2006, 2007, or 2008'',
       (2) by striking ``or 2006'' in the heading for paragraph 
     (2) and inserting ``2006, 2007, or 2008'', and
       (3) by striking ``and 2006'' in paragraph (4) and inserting 
     ``2006, 2007, and 2008''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to calendar years beginning after December 31, 
     2007.

     SEC. -08. DEDUCTION OF QUALIFIED TUITION AND RELATED 
                   EXPENSES.

       (a) In General.--Subsection (e) of section 222 (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. -09. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT 
                   PLANS FOR CHARITABLE PURPOSES.

       (a) In General.--Subparagraph (F) of section 408(d)(8) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distributions made in taxable years beginning 
     after December 31, 2007.

     SEC. -10. STOCK IN RIC FOR PURPOSES OF DETERMINING ESTATES OF 
                   NONRESIDENTS NOT CITIZENS.

       (a) In General.--Paragraph (3) of section 2105(d) (relating 
     to stock in a RIC) is amended by striking ``December 31, 
     2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to decedents dying after December 31, 2007.

                  PART II--PROVISIONS EXPIRING IN 2008

     SEC. -11. RESIDENTIAL ENERGY EFFICIENT PROPERTY.

       Subsection (g) of section 25D (relating to termination) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.

                  Subtitle B--Business Tax Provisions

                  PART I--PROVISIONS EXPIRING IN 2007

     SEC. -21. RESEARCH ACTIVITIES.

       (a) In General.--Section 41(h) (relating to termination) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2009'' in paragraph (1)(B).
       (b) Effective Date.--The amendment made by this section 
     shall apply to amounts paid or incurred after December 31, 
     2007.

     SEC. -22. INDIAN EMPLOYMENT CREDIT.

       (a) In General.--Subsection (f) of section 45A (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. -23. RAILROAD TRACK MAINTENANCE.

       (a) In General.--Subsection (f) of section 45G (relating to 
     application of section) is amended by striking ``January 1, 
     2008'' and inserting ``January 1, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to expenditures paid or incurred during taxable 
     years beginning after December 31, 2007.

     SEC. -24. PRODUCTION OF FUEL FROM A NONCONVENTIONAL SOURCE AT 
                   CERTAIN FACILITIES.

       (a) In General.--Subsection (f)(1)(B) of section 45K 
     (relating to extension for certain facilities) is amended by 
     striking ``January 1, 2008'' and inserting ``January 1, 
     2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to fuels produced and sold after December 31, 
     2007.

     SEC. -25. ENERGY EFFICIENT APPLIANCES.

       (a) In General.--Subsection (b) of section 45M (relating to 
     applicable amount) is amended by striking ``calendar year 
     2006 or 2007'' each place it appears in paragraphs (1)(A)(i), 
     (1)(B)(i), (1)(C)(ii)(I), and (1)(C)(iii)(I), and inserting 
     ``calendar year 2006, 2007, 2008, or 2009''.
       (b) Restart of Credit Limitation.--Paragraph (1) of section 
     45M(e) (relating to aggregate credit amount allowed) is 
     amended by inserting ``beginning after December 31, 2007'' 
     after ``for all prior taxable years''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to appliances produced after December 31, 2007.

     SEC. -26. 15-YEAR STRAIGHT-LINE COST RECOVERY FOR QUALIFIED 
                   LEASEHOLD IMPROVEMENTS AND QUALIFIED RESTAURANT 
                   IMPROVEMENTS.

       (a) In General.--Clauses (iv) and (v) of section 
     168(e)(3)(E) (relating to 15-year property) are each amended 
     by striking ``January 1, 2008'' and inserting ``January 1, 
     2010''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. -27. SEVEN-YEAR COST RECOVERY PERIOD FOR MOTORSPORTS 
                   RACING TRACK FACILITY.

       (a) In General.--Subparagraph (D) of section 168(i)(15) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. -28. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON 
                   INDIAN RESERVATION.

       (a) In General.--Paragraph (8) of section 168(j) (relating 
     to termination) is amended by striking ``December 31, 2007'' 
     and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. -29. QUALIFIED CONSERVATION CONTRIBUTIONS.

       (a) In General.--Clause (vi) of section 170(b)(1)(E) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (b) Contributions by Corporate Farmers and Ranchers.--
     Clause (iii) of section 170(b)(2)(B) (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2009''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to contributions made in taxable years beginning 
     after December 31, 2007.

     SEC. -30. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF 
                   FOOD INVENTORY.

       (a) In General.--Clause (iv) of section 170(e)(3)(C) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.

[[Page 5251]]

       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made after December 31, 2007.

     SEC. -31. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF 
                   BOOK INVENTORY.

       (a) In General.--Clause (iv) of section 170(e)(3)(D) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (b) Clerical Amendment.--Clause (iii) of section 
     170(e)(3)(D) (relating to certification by donee) is amended 
     by inserting ``of books'' after ``to any contribution''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to contributions made after December 31, 2007.

     SEC. -32. ENHANCED CHARITABLE DEDUCTION FOR CORPORATE 
                   CONTRIBUTIONS OF COMPUTER EQUIPMENT FOR 
                   EDUCATIONAL PURPOSES.

       (a) In General.--Subparagraph (G) of section 170(e)(6) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made after December 31, 2007.

     SEC. -33. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.

       (a) In General.--Subsection (h) of section 198 (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to expenditures paid or incurred after December 
     31, 2007.

     SEC. -34. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME 
                   ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES 
                   IN PUERTO RICO.

       (a) In General.--Subparagraph (C) of section 199(d)(8) 
     (relating to termination) is amended--
       (1) by striking ``first 2 taxable years'' and inserting 
     ``first 4 taxable years'', and
       (2) by striking ``January 1, 2008'' and inserting ``January 
     1, 2010''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. -35. SPECIAL RULE FOR SALES OR DISPOSITIONS TO IMPLEMENT 
                   FERC OR STATE ELECTRIC RESTRUCTURING POLICY.

       (a) In General.--Paragraph (3) of section 451(i) (relating 
     to qualifying electric transmission transaction) is amended 
     by striking ``January 1, 2008'' and inserting ``January 1, 
     2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to transactions occurring after December 31, 
     2007.

     SEC. -36. MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS 
                   TO CONTROLLING EXEMPT ORGANIZATIONS.

       (a) In General.--Clause (iv) of section 512(b)(13)(E) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to payments received or accrued after December 
     31, 2007.

     SEC. -37. SUSPENSION OF TAXABLE INCOME LIMIT WITH RESPECT TO 
                   MARGINAL WELLS.

       (a) In General.--Subparagraph (H) of section 613A(c)(6) 
     (relating to temporary suspension of taxable income limit 
     with respect to marginal production) is amended by striking 
     ``January 1, 2008'' and inserting ``January 1, 2010''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. -38. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED 
                   INVESTMENT COMPANIES.

       (a) Interest-Related Dividends.--Subparagraph (C) of 
     section 871(k)(1) (defining interest-related dividend) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2009''.
       (b) Short-Term Capital Gain Dividends.--Subparagraph (C) of 
     section 871(k)(2) (defining short-term capital gain dividend) 
     is amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2009''.
       (c) Disposition of Investment in United States Real 
     Property.--Clause (ii) of section 897(h)(4)(A) (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2009''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to dividends with respect to taxable years of 
     regulated investment companies beginning after December 31, 
     2007.

     SEC. -39. BASIS ADJUSTMENT TO STOCK OF S CORPORATIONS MAKING 
                   CHARITABLE CONTRIBUTIONS OF PROPERTY.

       (a) In General.--The last sentence of section 1367(a)(2) 
     (relating to decreases in basis) is amended by striking 
     ``December 31, 2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made in taxable years beginning 
     after December 31, 2007.

     SEC. -40. EXTENSION OF QUALIFIED ZONE ACADEMY BONDS.

       (a) In General.--Paragraph (1) of section 1397E(e) is 
     amended by striking ``and 2007'' and inserting ``2007, 2008, 
     and 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. -41. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF 
                   COLUMBIA.

       (a) Designation of D.C. Enterprise Zone.--Subsection (f) of 
     section 1400 (relating to time for which designation 
     applicable) is amended by striking ``December 31, 2007'' each 
     place it appears in paragraphs (1) and (2) and inserting 
     ``December 31, 2009''.
       (b) Tax-Exempt D.C. Empowerment Zone Bonds.--Subsection (b) 
     of section 1400A (relating to period of applicability) is 
     amended by inserting ``, and after the date of the enactment 
     of the Foreclosure Prevention Act and before Janaury 1, 
     2009'' after ``December 31, 2007''.
       (c) Acquisition Date for Eligibility for Zero-Percent 
     Capital Gains Rate for Investment in D.C..--Subsection (b) of 
     section 1400B (relating to D.C. zone asset) is amended by 
     striking ``January 1, 2008'' each place it appears in 
     paragraphs (2)(A)(i), (3)(A), (4)(A)(i), and (4)(B)(i)(I) and 
     inserting ``January 1, 2010''.
       (d) Tax Credit for First-Time D.C. Homebuyers.--Subsection 
     (i) of section 1400C (relating to application of section) is 
     amended by striking ``January 1, 2008'' and inserting 
     ``January 1, 2010''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to transactions after December 31, 2007.

                  PART II--PROVISIONS EXPIRING IN 2008

     SEC. -46. BIODIESEL AND RENEWABLE DIESEL USED AS FUEL.

       Subsection (g) of section 40A (relating to termination) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.

     SEC. -47. ELECTRICITY PRODUCED FROM CERTAIN RENEWABLE 
                   RESOURCES; PRODUCTION OF REFINED COAL AND 
                   INDIAN COAL.

       Section 45(d) (relating to qualified facilities) is amended 
     by striking ``January 1, 2009'' each place it appears in 
     paragraphs (1), (2), (3), (4), (5), (6), (7), (8), (9), and 
     (10) and inserting ``January 1, 2010''.

     SEC. -48. NEW MARKETS TAX CREDIT.

       Subparagraph (D) of section 45D(f)(1) (relating to national 
     limitation on amount of investments designated) is amended by 
     striking ``and 2008'' and inserting ``2008, and 2009''.

     SEC. -49. EXTENSION OF NEW ENERGY EFFICIENT HOME CREDIT.

       Subsection (g) of section 45L (relating to termination) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.

     SEC. -50. EXTENSION OF MINE RESCUE TEAM TRAINING CREDIT.

       Section 45N(e) (relating to termination) is amended by 
     striking ``December 31, 2008'' and inserting ``December 31, 
     2009''.

     SEC. -51. EXTENSION OF ENERGY CREDIT.

       (a) Solar Energy Property.--Paragraphs (2)(A)(i)(II) and 
     (3)(A)(ii) of section 48(a) (relating to energy credit) are 
     each amended by striking ``January 1, 2009'' and inserting 
     ``January 1, 2010''.
       (b) Fuel Cell Property.--Subparagraph (E) of section 
     48(c)(1) (relating to qualified fuel cell property) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.
       (c) Microturbine Property.--Subparagraph (E) of section 
     48(c)(2) (relating to qualified microturbine property) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.

     SEC. -52. 5-YEAR NOL CARRYBACK FOR CERTAIN ELECTRIC UTILITY 
                   COMPANIES.

       Subparagraph (I)(i) of section 172(b)(1) (relating to 
     transmission property and pollution control investment) is 
     amended--
       (1) by striking ``January 1, 2009'' and inserting ``January 
     1, 2010'', and
       (2) by striking ``January 1, 2006'' and inserting ``January 
     1, 2007''.

     SEC. -53. EXTENSION OF ENERGY EFFICIENT COMMERCIAL BUILDINGS 
                   DEDUCTION.

       Section 179D(h) (relating to termination) is amended by 
     striking ``December 31, 2008'' and inserting ``December 31, 
     2009''.

     SEC. -54. EXTENSION OF ELECTION TO EXPENSE ADVANCED MINE 
                   SAFETY EQUIPMENT.

       Section 179E(g) (relating to termination) is amended by 
     striking ``December 31, 2008'' and inserting ``December 31, 
     2009''.

     SEC. -55. EXTENSION AND MODIFICATION OF EXPENSING RULES FOR 
                   QUALIFIED FILM AND TELEVISION PRODUCTIONS.

       Section 181(f) (relating to termination) is amended by 
     striking ``December 31, 2008'' and inserting ``December 31, 
     2009''.

     SEC. -56. SUBPART F EXCEPTION FOR ACTIVE FINANCING INCOME.

       (a) Exempt Insurance Income.--Paragraph (10) of section 
     953(e) (relating to application) is amended--
       (1) by striking ``January 1, 2009'' and inserting ``January 
     1, 2010'', and
       (2) by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.
       (b) Exception to Treatment as Foreign Personal Holding 
     Company Income.--Paragraph (9) of section 954(h) (relating to 
     application) is amended by striking ``January 1, 2009'' and 
     inserting ``January 1, 2010''.

[[Page 5252]]



     SEC. -57. EXTENSION OF LOOK-THRU RULE FOR RELATED CONTROLLED 
                   FOREIGN CORPORATIONS.

       Subparagraph (B) of section 954(c)(6) (relating to 
     application) is amended by striking ``January 1, 2009'' and 
     inserting ``January 1, 2010''.

                   Subtitle C--Excise Tax Provisions

                  PART I--PROVISIONS EXPIRING IN 2007

     SEC. -61. INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAX 
                   TO PUERTO RICO AND THE VIRGIN ISLANDS.

       (a) In General.--Paragraph (1) of section 7652(f) is 
     amended by inserting ``, and after the date of the enactment 
     of the Foreclosure Prevention Act and before January 1, 
     2010'' after ``January 1, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distilled spirits brought into the United 
     States after the date of the enactment of this Act.

     SEC. -62. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO 
                   MENTAL HEALTH BENEFITS.

       (a) In General.--Subsection (f) of section 9812 (relating 
     to application of section) is amended--
       (1) by striking ``and'' at the end of paragraph (2),
       (2) by striking the period at the end of paragraph (3) and 
     inserting ``, and before the date of the enactment of the 
     Foreclosure Prevention Act'', and
       (3) by adding at the end the following new paragraph:
       ``(4) after December 31, 2009.''.
       (b) Amendment to the Employee Retirement Income Security 
     Act of 1974.--Section 712(f) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1185a(f)) is amended 
     by inserting ``, and before the date of the enactment of the 
     Foreclosure Prevention Act, and after December 31, 2009'' 
     after ``December 31, 2007''.
       (c) Amendment to the Public Health Service Act.--Section 
     2705(f) of the Public Health Service Act (42 U.S.C. 300gg-
     5(f)) is amended by inserting ``, and before the date of the 
     enactment of the Foreclosure Prevention Act, and after 
     December 31, 2009'' after ``December 31, 2006''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to benefits for services furnished on or after 
     the date of the enactment of this Act.

     SEC. -63. EXTENSION OF ECONOMIC DEVELOPMENT CREDIT FOR 
                   AMERICAN SAMOA.

       (a) In General.--Subsection (d) of section 119 of division 
     A of the Tax Relief and Health Care Act of 2006 is amended--
       (1) by striking ``first two taxable years'' and inserting 
     ``first 4 taxable years'', and
       (2) by striking ``January 1, 2008'' and inserting ``January 
     1, 2010''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

                  PART II--PROVISIONS EXPIRING IN 2008

     SEC. -66. SPECIAL RULE FOR QUALIFIED METHANOL OR ETHANOL FUEL 
                   FROM COAL.

       Subparagraph (D) of section 4041(b)(2) (relating to 
     termination) is amended by striking ``January 1, 2009'' and 
     inserting ``January 1, 2010''.

     SEC. -67. BIODIESEL MIXTURE CREDIT AND CREDIT FOR FUELS USED 
                   FOR NONTAXABLE PURPOSES.

       (a) Biodiesel Mixtures.--Paragraph (6) of section 6426(c) 
     (relating to termination) is amended by striking ``December 
     31, 2008'' and inserting ``December 31, 2009''.
       (b) Biodiesel Used for Nontaxable Purposes.--Paragraph 
     (5)(B) of section 6427(e) (relating to termination) is 
     amended by striking ``December 31, 2008'' and inserting 
     ``December 31, 2009''.

               Subtitle D--Tax Administration Provisions

                  PART I--PROVISIONS EXPIRING IN 2007

     SEC. -71. DISCLOSURES TO FACILITATE COMBINED EMPLOYMENT TAX 
                   REPORTING.

       (a) In General.--Subparagraph (B) of section 6103(d)(5) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendments made by this subsection 
     shall apply to disclosures after the date of the enactment of 
     this Act.

     SEC. -72. DISCLOSURE OF RETURN INFORMATION TO APPRISE 
                   APPROPRIATE OFFICIALS OF TERRORIST ACTIVITIES.

       (a) In General.--Clause (iv) of section 6103(i)(3)(C) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to disclosures after the date of the enactment of 
     this Act.

     SEC. -73. DISCLOSURE UPON REQUEST OF INFORMATION RELATING TO 
                   TERRORIST ACTIVITIES.

       (a) In General.--Subparagraph (E) of section 6103(i)(7) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to disclosures after the date of the enactment of 
     this Act.

     SEC. -74. DISCLOSURE OF RETURN INFORMATION TO CARRY OUT 
                   INCOME CONTINGENT REPAYMENT OF STUDENT LOANS.

       (a) In General.--Subparagraph (D) of section 6103(l)(13) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to disclosures after the date of the enactment of 
     this Act.

     SEC. -75. AUTHORITY FOR UNDERCOVER OPERATIONS.

       (a) In General.--Paragraph (6) of section 7608(c) (relating 
     to application of section) is amended by striking ``January 
     1, 2008'' each place it appears and inserting ``January 1, 
     2010''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to operations conducted after the date of the 
     enactment of this Act.

                  PART II--PROVISIONS EXPIRING IN 2008

     SEC. -76. EXTENSION OF REPORTING OF INTEREST OF EXEMPT 
                   ORGANIZATIONS IN INSURANCE CONTRACTS.

       Section 6050V(e) (relating to termination) is amended by 
     striking ``the date which is 2 years after the date of the 
     enactment of this section'' and inserting ``December 31, 
     2009''.

     SEC. -77. DISCLOSURES RELATING TO CERTAIN PROGRAMS 
                   ADMINISTERED BY THE DEPARTMENT OF VETERANS 
                   AFFAIRS.

       (a) In General.--Section 6103(l)(7)(D) (relating to 
     programs to which rule applies) is amended by striking 
     ``September 30, 2008'' and inserting ``December 31, 2009''.
       (b) Technical Amendment.--Section 6103(l)(7)(D)(viii)(III) 
     is amended by striking ``sections 1710(a)(1)(I), 1710(a)(2), 
     1710(b), and 1712(a)(2)(B)'' and inserting ``sections 
     1710(a)(2)(G), 1710(a)(3), and 1710(b)''.
                                 ______
                                 
  SA 4469. Mr. KYL submitted an amendment intended to be proposed by 
him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the appropriate place, insert the following:

             TITLE  --EXTENSION OF EXPIRING TAX PROVISIONS

     SEC. -00. AMENDMENT OF 1986 CODE.

       Except as otherwise expressly provided, whenever in this 
     title an amendment or repeal is expressed in terms of an 
     amendment to, or repeal of, a section or other provision, the 
     reference shall be considered to be made to a section or 
     other provision of the Internal Revenue Code of 1986.

                 Subtitle A--Individual Tax Provisions

     SEC. -01. NONBUSINESS ENERGY PROPERTY.

       (a) Extension of Credit.--Section 25C(g) (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. -02. ELECTION TO INCLUDE COMBAT PAY AS EARNED INCOME FOR 
                   PURPOSES OF THE EARNED INCOME CREDIT.

       (a) In General.--Subclause (II) of section 32(c)(2)(B)(vi) 
     (defining earned income) is amended by striking ``January 1, 
     2008'' and inserting ``January 1, 2009''.
       (b) Conforming Amendment.--Paragraph (4) of section 6428, 
     as amended by the Economic Stimulus Act of 2008, is amended 
     to read as follows:
       ``(4) Earned income.--The term `earned income' has the 
     meaning set forth in section 32(c)(2) except that such term 
     shall not include net earnings from self-employment which are 
     not taken into account in computing taxable income.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to taxable years ending after December 31, 2007.

     SEC. -03. DEDUCTION FOR CERTAIN EXPENSES OF ELEMENTARY AND 
                   SECONDARY SCHOOL TEACHERS.

       (a) In General.--Subparagraph (D) of section 62(a)(2) 
     (relating to certain expenses of elementary and secondary 
     school teachers) is amended by striking ``or 2007'' and 
     inserting ``2007, or 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. -04. DISTRIBUTIONS FROM RETIREMENT PLANS TO INDIVIDUALS 
                   CALLED TO ACTIVE DUTY.

       (a) In General.--Clause (iv) of section 72(t)(2)(G) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``January 1, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to individuals ordered or called to active duty 
     on or after December 31, 2007.

     SEC. -05. MODIFICATION OF MORTGAGE REVENUE BONDS FOR 
                   VETERANS.

       (a) Qualified Mortgage Bonds Used To Finance Residences for 
     Veterans Without Regard to First-Time Homebuyer 
     Requirement.--Subparagraph (D) of section 143(d)(2)

[[Page 5253]]

     (relating to exceptions) is amended by inserting ``and after 
     the date of the enactment of the Foreclosure Prevention Act 
     and before January 1, 2009'' after ``January 1, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to bonds issued after the date of the enactment 
     of this Act.

     SEC. -06. DEDUCTION FOR STATE AND LOCAL SALES TAXES.

       (a) In General.--Subparagraph (I) of section 164(b)(5) is 
     amended by striking ``January 1, 2008'' and inserting 
     ``January 1, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. -07. ARCHER MSAS.

       (a) In General.--Subsection (i) of section 220 (relating to 
     limitation on number of taxpayers having Archer MSAs) is 
     amended--
       (1) by striking ``2007'' each place it appears in 
     paragraphs (2) and (3)(B) and inserting ``2008'',
       (2) by striking ``2007'' in the heading of paragraph (3)(B) 
     and inserting ``2008''.
       (b) Conforming Amendments.--Subsection (j) of section 220 
     is amended--
       (1) by striking ``or 2006'' each place it appears in 
     paragraph (2) and inserting ``2006, or 2007'',
       (2) by striking ``or 2006'' in the heading for paragraph 
     (2) and inserting ``2006, or 2007'', and
       (3) by striking ``and 2006'' in paragraph (4) and inserting 
     ``2006, or 2007''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to calendar years beginning after December 31, 
     2007.

     SEC. -08. DEDUCTION OF QUALIFIED TUITION AND RELATED 
                   EXPENSES.

       (a) In General.--Subsection (e) of section 222 (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. -09. TAX-FREE DISTRIBUTIONS FROM INDIVIDUAL RETIREMENT 
                   PLANS FOR CHARITABLE PURPOSES.

       (a) In General.--Subparagraph (F) of section 408(d)(8) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distributions made in taxable years beginning 
     after December 31, 2007.

     SEC. -10. STOCK IN RIC FOR PURPOSES OF DETERMINING ESTATES OF 
                   NONRESIDENTS NOT CITIZENS.

       (a) In General.--Paragraph (3) of section 2105(d) (relating 
     to stock in a RIC) is amended by striking ``December 31, 
     2007'' and inserting ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to decedents dying after December 31, 2007.

                  Subtitle B--Business Tax Provisions

     SEC. -11. RESEARCH ACTIVITIES.

       (a) In General.--Section 41(h) (relating to termination) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008'' in paragraph (1)(B).
       (b) Effective Date.--The amendment made by this section 
     shall apply to amounts paid or incurred after December 31, 
     2007.

     SEC. -12. INDIAN EMPLOYMENT CREDIT.

       (a) In General.--Subsection (f) of section 45A (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. -13. RAILROAD TRACK MAINTENANCE.

       (a) In General.--Subsection (f) of section 45G (relating to 
     application of section) is amended by striking ``January 1, 
     2008'' and inserting ``January 1, 2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to expenditures paid or incurred during taxable 
     years beginning after December 31, 2007.

     SEC. -14. PRODUCTION OF FUEL FROM A NONCONVENTIONAL SOURCE AT 
                   CERTAIN FACILITIES.

       (a) In General.--Subsection (f)(1)(B) of section 45K 
     (relating to extension for certain facilities) is amended by 
     striking ``January 1, 2008'' and inserting ``January 1, 
     2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to fuels produced and sold after December 31, 
     2007.

     SEC. -15. ENERGY EFFICIENT APPLIANCES.

       (a) In General.--Subsection (b) of section 45M (relating to 
     applicable amount) is amended by striking ``calendar year 
     2006 or 2007'' each place it appears in paragraphs (1)(A)(i), 
     (1)(B)(i), (1)(C)(ii)(I), and (1)(C)(iii)(I), and inserting 
     ``calendar year 2006, 2007, or 2008''.
       (b) Restart of Credit Limitation.--Paragraph (1) of section 
     45M(e) (relating to aggregate credit amount allowed) is 
     amended by inserting ``beginning after December 31, 2007'' 
     after ``for all prior taxable years''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to appliances produced after December 31, 2007.

     SEC. -16. 15-YEAR STRAIGHT-LINE COST RECOVERY FOR QUALIFIED 
                   LEASEHOLD IMPROVEMENTS AND QUALIFIED RESTAURANT 
                   IMPROVEMENTS.

       (a) In General.--Clauses (iv) and (v) of section 
     168(e)(3)(E) (relating to 15-year property) are each amended 
     by striking ``January 1, 2008'' and inserting ``January 1, 
     2009''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. -17. SEVEN-YEAR COST RECOVERY PERIOD FOR MOTORSPORTS 
                   RACING TRACK FACILITY.

       (a) In General.--Subparagraph (D) of section 168(i)(15) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. -18. ACCELERATED DEPRECIATION FOR BUSINESS PROPERTY ON 
                   INDIAN RESERVATION.

       (a) In General.--Paragraph (8) of section 168(j) (relating 
     to termination) is amended by striking ``December 31, 2007'' 
     and inserting ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to property placed in service after December 31, 
     2007.

     SEC. -19. QUALIFIED CONSERVATION CONTRIBUTIONS.

       (a) In General.--Clause (vi) of section 170(b)(1)(E) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2008''.
       (b) Contributions by Corporate Farmers and Ranchers.--
     Clause (iii) of section 170(b)(2)(B) (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2008''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to contributions made in taxable years beginning 
     after December 31, 2007.

     SEC. -20. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF 
                   FOOD INVENTORY.

       (a) In General.--Clause (iv) of section 170(e)(3)(C) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made after December 31, 2007.

     SEC. -21. ENHANCED CHARITABLE DEDUCTION FOR CONTRIBUTIONS OF 
                   BOOK INVENTORY.

       (a) In General.--Clause (iv) of section 170(e)(3)(D) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2008''.
       (b) Clerical Amendment.--Clause (iii) of section 
     170(e)(3)(D) (relating to certification by donee) is amended 
     by inserting ``of books'' after ``to any contribution''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to contributions made after December 31, 2007.

     SEC. -22. ENHANCED CHARITABLE DEDUCTION FOR CORPORATE 
                   CONTRIBUTIONS OF COMPUTER EQUIPMENT FOR 
                   EDUCATIONAL PURPOSES.

       (a) In General.--Subparagraph (G) of section 170(e)(6) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made after December 31, 2007.

     SEC. -23. EXPENSING OF ENVIRONMENTAL REMEDIATION COSTS.

       (a) In General.--Subsection (h) of section 198 (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to expenditures paid or incurred after December 
     31, 2007.

     SEC. -24. DEDUCTION ALLOWABLE WITH RESPECT TO INCOME 
                   ATTRIBUTABLE TO DOMESTIC PRODUCTION ACTIVITIES 
                   IN PUERTO RICO.

       (a) In General.--Subparagraph (C) of section 199(d)(8) 
     (relating to termination) is amended--
       (1) by striking ``first 2 taxable years'' and inserting 
     ``first 3 taxable years'', and
       (2) by striking ``January 1, 2008'' and inserting ``January 
     1, 2009''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. -25. SPECIAL RULE FOR SALES OR DISPOSITIONS TO IMPLEMENT 
                   FERC OR STATE ELECTRIC RESTRUCTURING POLICY.

       (a) In General.--Paragraph (3) of section 451(i) (relating 
     to qualifying electric transmission transaction) is amended 
     by striking ``January 1, 2008'' and inserting ``January 1, 
     2009''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to transactions occurring after December 31, 
     2007.

     SEC. -26. MODIFICATION OF TAX TREATMENT OF CERTAIN PAYMENTS 
                   TO CONTROLLING EXEMPT ORGANIZATIONS.

       (a) In General.--Clause (iv) of section 512(b)(13)(E) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to payments received or accrued after December 
     31, 2007.

     SEC. -27. SUSPENSION OF TAXABLE INCOME LIMIT WITH RESPECT TO 
                   MARGINAL WELLS.

       (a) In General.--Subparagraph (H) of section 613A(c)(6) 
     (relating to temporary suspension of taxable income limit 
     with respect to marginal production) is amended by striking 
     ``January 1, 2008'' and inserting ``January 1, 2009''.

[[Page 5254]]

       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

     SEC. -28. TREATMENT OF CERTAIN DIVIDENDS OF REGULATED 
                   INVESTMENT COMPANIES.

       (a) Interest-Related Dividends.--Subparagraph (C) of 
     section 871(k)(1) (defining interest-related dividend) is 
     amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (b) Short-Term Capital Gain Dividends.--Subparagraph (C) of 
     section 871(k)(2) (defining short-term capital gain dividend) 
     is amended by striking ``December 31, 2007'' and inserting 
     ``December 31, 2008''.
       (c) Disposition of Investment in United States Real 
     Property.--Clause (ii) of section 897(h)(4)(A) (relating to 
     termination) is amended by striking ``December 31, 2007'' and 
     inserting ``December 31, 2008''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to dividends with respect to taxable years of 
     regulated investment companies beginning after December 31, 
     2007.

     SEC. -29. BASIS ADJUSTMENT TO STOCK OF S CORPORATIONS MAKING 
                   CHARITABLE CONTRIBUTIONS OF PROPERTY.

       (a) In General.--The last sentence of section 1367(a)(2) 
     (relating to decreases in basis) is amended by striking 
     ``December 31, 2007'' and inserting ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to contributions made in taxable years beginning 
     after December 31, 2007.

     SEC. -30. EXTENSION OF QUALIFIED ZONE ACADEMY BONDS.

       (a) In General.--Paragraph (1) of section 1397E(e) is 
     amended by striking ``and 2007'' and inserting ``2007, and 
     2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. -31. TAX INCENTIVES FOR INVESTMENT IN THE DISTRICT OF 
                   COLUMBIA.

       (a) Designation of D.C. Enterprise Zone.--Subsection (f) of 
     section 1400 (relating to time for which designation 
     applicable) is amended by striking ``December 31, 2007'' each 
     place it appears in paragraphs (1) and (2) and inserting 
     ``December 31, 2008''.
       (b) Tax-Exempt D.C. Empowerment Zone Bonds.--Subsection (b) 
     of section 1400A (relating to period of applicability) is 
     amended by inserting ``, and after the date of the enactment 
     of the Foreclosure Prevention Act and before January 1, 
     2009'' after ``December 31, 2007''.
       (c) Acquisition Date for Eligibility for Zero-Percent 
     Capital Gains Rate for Investment in D.C..--Subsection (b) of 
     section 1400B (relating to D.C. zone asset) is amended by 
     striking ``January 1, 2008'' each place it appears in 
     paragraphs (2)(A)(i), (3)(A), (4)(A)(i), and (4)(B)(i)(I) and 
     inserting ``January 1, 2009''.
       (d) Tax Credit for First-Time D.C. Homebuyers.--Subsection 
     (i) of section 1400C (relating to application of section) is 
     amended by striking ``January 1, 2008'' and inserting 
     ``January 1, 2009''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to transactions after December 31, 2007.

                   Subtitle C--Excise Tax Provisions

     SEC. -41. INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAX 
                   TO PUERTO RICO AND THE VIRGIN ISLANDS.

       (a) In General.--Paragraph (1) of section 7652(f) is 
     amended by inserting ``, and after the date of the enactment 
     of the Foreclosure Prevention Act and before January 1, 
     2009'' after ``January 1, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to distilled spirits brought into the United 
     States after the date of the enactment of this Act.

     SEC. -42. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO 
                   MENTAL HEALTH BENEFITS.

       (a) In General.--Subsection (f) of section 9812 (relating 
     to application of section) is amended--
       (1) by striking ``and'' at the end of paragraph (2),
       (2) by striking the period at the end of paragraph (3) and 
     inserting ``, and before the date of the enactment of the 
     Foreclosure Prevention Act'', and
       (3) by adding at the end the following new paragraph:
       ``(4) after December 31, 2008.''.
       (b) Amendment to the Employee Retirement Income Security 
     Act of 1974.--Section 712(f) of the Employee Retirement 
     Income Security Act of 1974 (29 U.S.C. 1185a(f)) is amended 
     by inserting ``, and before the date of the enactment of the 
     Foreclosure Prevention Act, and after December 31, 2008'' 
     after ``December 31, 2007''.
       (c) Amendment to the Public Health Service Act.--Section 
     2705(f) of the Public Health Service Act (42 U.S.C. 300gg-
     5(f)) is amended by inserting ``, and before the date of the 
     enactment of the Foreclosure Prevention Act, and after 
     December 31, 2008'' after ``December 31, 2006''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to benefits for services furnished on or after 
     the date of the enactment of this Act.

     SEC. -43. EXTENSION OF ECONOMIC DEVELOPMENT CREDIT FOR 
                   AMERICAN SAMOA.

       (a) In General.--Subsection (d) of section 119 of division 
     A of the Tax Relief and Health Care Act of 2006 is amended--
       (1) by striking ``first two taxable years'' and inserting 
     ``first 3 taxable years'', and
       (2) by striking ``January 1, 2008'' and inserting ``January 
     1, 2009''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2007.

               Subtitle D--Tax Administration Provisions

     SEC. -51. DISCLOSURES TO FACILITATE COMBINED EMPLOYMENT TAX 
                   REPORTING.

       (a) In General.--Subparagraph (B) of section 6103(d)(5) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2008''.
       (b) Effective Date.--The amendments made by this subsection 
     shall apply to disclosures after the date of the enactment of 
     this Act.

     SEC. -52. DISCLOSURE OF RETURN INFORMATION TO APPRISE 
                   APPROPRIATE OFFICIALS OF TERRORIST ACTIVITIES.

       (a) In General.--Clause (iv) of section 6103(i)(3)(C) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to disclosures after the date of the enactment of 
     this Act.

     SEC. -53. DISCLOSURE UPON REQUEST OF INFORMATION RELATING TO 
                   TERRORIST ACTIVITIES.

       (a) In General.--Subparagraph (E) of section 6103(i)(7) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to disclosures after the date of the enactment of 
     this Act.

     SEC. -54. DISCLOSURE OF RETURN INFORMATION TO CARRY OUT 
                   INCOME CONTINGENT REPAYMENT OF STUDENT LOANS.

       (a) In General.--Subparagraph (D) of section 6103(l)(13) 
     (relating to termination) is amended by striking ``December 
     31, 2007'' and inserting ``December 31, 2008''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to disclosures after the date of the enactment of 
     this Act.

     SEC. -55. AUTHORITY FOR UNDERCOVER OPERATIONS.

       (a) In General.--Paragraph (6) of section 7608(c) (relating 
     to application of section) is amended by striking ``January 
     1, 2008'' each place it appears and inserting ``January 1, 
     2009''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to operations conducted after the date of the 
     enactment of this Act.
                                 ______
                                 
  SA 4470. Mrs. FEINSTEIN (for herself, Mr. Martinez, Mrs. Boxer, Mr. 
Obama, Mrs. Dole, Mr. Durbin, Mr. Salazar, Mrs. Clinton, Ms. Klobuchar, 
and Ms. Mikulski) submitted an amendment intended to be proposed by her 
to the bill H.R. 3221, moving the United States toward greater energy 
independence and security, developing innovative new technologies, 
reducing carbon emissions, creating green jobs, protecting consumers, 
increasing clean renewable energy production, and modernizing our 
energy infrastructure, and to amend the Internal Revenue Code of 1986 
to provide tax incentives for the production of renewable energy and 
energy conservation; which was orderd to lie on the table; as follows:

       At the end, add the following:

              TITLE VIII--S.A.F.E. MORTGAGE LICENSING ACT

     SEC. 801. SHORT TITLE.

       (a) Short Title.--This title may be cited as the ``Secure 
     and Fair Enforcement for Mortgage Licensing Act of 2008'' or 
     ``S.A.F.E. Mortgage Licensing Act of 2008''.
       (b) Table of Contents.--The table of contents for this 
     title is as follows:

Sec. 801. Short title; table of contents.
Sec. 802. Purposes and methods for establishing a mortgage licensing 
              system and registry.
Sec. 803. Definitions.
Sec. 804. License or registration required.
Sec. 805. State license and registration application and issuance.
Sec. 806. Standards for State license renewal.
Sec. 807. System of registration administration by Federal banking 
              agencies.
Sec. 808. Secretary of Housing and Urban Development backup authority 
              to establish a loan originator licensing system.
Sec. 809. Backup authority to establish a nationwide mortgage licensing 
              and registry system.
Sec. 810. Fees.
Sec. 811. Background checks of loan originators.

[[Page 5255]]

Sec. 812. Confidentiality of information.
Sec. 813. Liability provisions.
Sec. 814. Enforcement under HUD backup licensing system.
Sec. 815. Preemption of State law.
Sec. 816. Reports and recommendations to Congress.
Sec. 817. Study and reports on defaults and foreclosures

     SEC. 802. PURPOSES AND METHODS FOR ESTABLISHING A MORTGAGE 
                   LICENSING SYSTEM AND REGISTRY.

       In order to increase uniformity, reduce regulatory burden, 
     enhance consumer protection, and reduce fraud, the States, 
     through the Conference of State Bank Supervisors and the 
     American Association of Residential Mortgage Regulators, are 
     hereby encouraged to establish a Nationwide Mortgage 
     Licensing System and Registry for the residential mortgage 
     industry that accomplishes all of the following objectives:
       (1) Provides uniform license applications and reporting 
     requirements for State-licensed loan originators.
       (2) Provides a comprehensive licensing and supervisory 
     database.
       (3) Aggregates and improves the flow of information to and 
     between regulators.
       (4) Provides increased accountability and tracking of loan 
     originators.
       (5) Streamlines the licensing process and reduces the 
     regulatory burden.
       (6) Enhances consumer protections and supports anti-fraud 
     measures.
       (7) Provides consumers with easily accessible information, 
     offered at no charge, utilizing electronic media, including 
     the Internet, regarding the employment history of, and 
     publicly adjudicated disciplinary and enforcement actions 
     against, loan originators.
       (8) Establishes a means by which residential mortgage loan 
     originators would, to the greatest extent possible, be 
     required to act in the best interests of the consumer.
       (9) Facilitates responsible behavior in the subprime 
     mortgage market place and provides comprehensive training and 
     examination requirements related to subprime mortgage 
     lending.

     SEC. 803. DEFINITIONS.

       For purposes of this title, the following definitions shall 
     apply:
       (1) Federal banking agencies.--The term ``Federal banking 
     agencies'' means the Board of Governors of the Federal 
     Reserve System, the Comptroller of the Currency, the Director 
     of the Office of Thrift Supervision, the National Credit 
     Union Administration, and the Federal Deposit Insurance 
     Corporation.
       (2) Depository institution.--The term ``depository 
     institution'' has the same meaning as in section 3 of the 
     Federal Deposit Insurance Act, and includes any credit union.
       (3) Loan originator.--
       (A) In general.--The term ``loan originator''--
       (i) means an individual who--

       (I) takes a residential mortgage loan application; and
       (II) offers or negotiates terms of a residential mortgage 
     loan for compensation or gain;

       (ii) does not include any individual who is not otherwise 
     described in clause (i) and who performs purely 
     administrative or clerical tasks on behalf of a person who is 
     described in any such clause; and
       (iii) does not include a person or entity that only 
     performs real estate brokerage activities and is licensed or 
     registered in accordance with applicable State law, unless 
     the person or entity is compensated by a lender, a mortgage 
     broker, or other loan originator or by any agent of such 
     lender, mortgage broker, or other loan originator.
       (B) Other definitions relating to loan originator.--For 
     purposes of this subsection, an individual ``assists a 
     consumer in obtaining or applying to obtain a residential 
     mortgage loan'' by, among other things, advising on loan 
     terms (including rates, fees, other costs), preparing loan 
     packages, or collecting information on behalf of the consumer 
     with regard to a residential mortgage loan.
       (C) Administrative or clerical tasks.--The term 
     ``administrative or clerical tasks'' means the receipt, 
     collection, and distribution of information common for the 
     processing or underwriting of a loan in the mortgage industry 
     and communication with a consumer to obtain information 
     necessary for the processing or underwriting of a residential 
     mortgage loan.
       (D) Real estate brokerage activity defined.--The term 
     ``real estate brokerage activity'' means any activity that 
     involves offering or providing real estate brokerage services 
     to the public, including--
       (i) acting as a real estate agent or real estate broker for 
     a buyer, seller, lessor, or lessee of real property;
       (ii) bringing together parties interested in the sale, 
     purchase, lease, rental, or exchange of real property;
       (iii) negotiating, on behalf of any party, any portion of a 
     contract relating to the sale, purchase, lease, rental, or 
     exchange of real property (other than in connection with 
     providing financing with respect to any such transaction);
       (iv) engaging in any activity for which a person engaged in 
     the activity is required to be registered or licensed as a 
     real estate agent or real estate broker under any applicable 
     law; and
       (v) offering to engage in any activity, or act in any 
     capacity, described in clause (i), (ii), (iii), or (iv).
       (4) Loan processor or underwriter.--
       (A) In general.--The term ``loan processor or underwriter'' 
     means an individual who performs clerical or support duties 
     at the direction of and subject to the supervision and 
     instruction of--
       (i) a State-licensed loan originator; or
       (ii) a registered loan originator.
       (B) Clerical or support duties.--For purposes of 
     subparagraph (A), the term ``clerical or support duties'' may 
     include--
       (i) the receipt, collection, distribution, and analysis of 
     information common for the processing or underwriting of a 
     residential mortgage loan; and
       (ii) communicating with a consumer to obtain the 
     information necessary for the processing or underwriting of a 
     loan, to the extent that such communication does not include 
     offering or negotiating loan rates or terms, or counseling 
     consumers about residential mortgage loan rates or terms.
       (5) Nationwide mortgage licensing system and registry.--The 
     term ``Nationwide Mortgage Licensing System and Registry'' 
     means a mortgage licensing system developed and maintained by 
     the Conference of State Bank Supervisors and the American 
     Association of Residential Mortgage Regulators for the State 
     licensing and registration of State-licensed loan originators 
     and the registration of registered loan originators or any 
     system established by the Secretary under section 809.
       (6) Nontraditional mortgage product.--The term 
     ``nontraditional mortgage product'' means any mortgage 
     product other than a 30-year fixed rate mortgage.
       (7) Registered loan originator.--The term ``registered loan 
     originator'' means any individual who--
       (A) meets the definition of loan originator and is an 
     employee of a depository institution or a wholly-owned 
     subsidiary of a depository institution; and
       (B) is registered with, and maintains a unique identifier 
     through, the Nationwide Mortgage Licensing System and 
     Registry.
       (8) Residential mortgage loan.--The term ``residential 
     mortgage loan'' means any loan primarily for personal, 
     family, or household use that is secured by a mortgage, deed 
     of trust, or other equivalent consensual security interest on 
     a dwelling (as defined in section 103(v) of the Truth in 
     Lending Act) or residential real estate upon which is 
     constructed or intended to be constructed a dwelling (as so 
     defined).
       (9) Secretary.--The term ``Secretary'' means the Secretary 
     of Housing and Urban Development.
       (10) State-licensed loan originator.--The term ``State-
     licensed loan originator'' means any individual who--
       (A) is a loan originator;
       (B) is not an employee of a depository institution or any 
     wholly-owned subsidiary of a depository institution; and
       (C) is licensed by a State or by the Secretary under 
     section 808 and registered as a loan originator with, and 
     maintains a unique identifier through, the Nationwide 
     Mortgage Licensing System and Registry.
       (11) Unique identifier.--
       (A) In general.--The term ``unique identifier'' means a 
     number or other identifier that--
       (i) permanently identifies a loan originator;
       (ii) is assigned by protocols established by the Nationwide 
     Mortgage Licensing System and Registry and the Federal 
     banking agencies to facilitate electronic tracking of loan 
     originators and uniform identification of, and public access 
     to, the employment history of and the publicly adjudicated 
     disciplinary and enforcement actions against loan 
     originators; and
       (iii) shall not be used for purposes other than those set 
     forth under this title.
       (B) Responsibility of states.--To the greatest extent 
     possible and to accomplish the purpose of this title, States 
     shall use unique identifiers in lieu of social security 
     numbers.

     SEC. 804. LICENSE OR REGISTRATION REQUIRED.

       (a) In General.--An individual may not engage in the 
     business of a loan originator without first--
       (1) obtaining and maintaining, through an annual renewal--
       (A) a registration as a registered loan originator; or
       (B) a license and registration as a State-licensed loan 
     originator; and
       (2) obtaining a unique identifier.
       (b) Loan Processors and Underwriters.--
       (1) Supervised loan processors and underwriters.--A loan 
     processor or underwriter who does not represent to the 
     public, through advertising or other means of communicating 
     or providing information (including the use of business 
     cards, stationery, brochures, signs, rate lists, or other 
     promotional items), that such individual can or will perform 
     any of the activities of a loan originator shall not be 
     required to be a State-licensed loan originator or a 
     registered loan originator.
       (2) Independent contractors.--An independent contractor may 
     not engage in residential mortgage loan origination 
     activities as a loan processor or underwriter unless such 
     independent contractor is a State-licensed loan originator or 
     a registered loan originator.

[[Page 5256]]



     SEC. 805. STATE LICENSE AND REGISTRATION APPLICATION AND 
                   ISSUANCE.

       (a) Background Checks.--In connection with an application 
     to any State for licensing and registration as a State-
     licensed loan originator, the applicant shall, at a minimum, 
     furnish to the Nationwide Mortgage Licensing System and 
     Registry information concerning the applicant's identity, 
     including--
       (1) fingerprints for submission to the Federal Bureau of 
     Investigation, and any governmental agency or entity 
     authorized to receive such information for a State and 
     national criminal history background check; and
       (2) personal history and experience, including 
     authorization for the System to obtain--
       (A) an independent credit report obtained from a consumer 
     reporting agency described in section 603(p) of the Fair 
     Credit Reporting Act; and
       (B) information related to any administrative, civil or 
     criminal findings by any governmental jurisdiction.
       (b) Issuance of License.--The minimum standards for 
     licensing and registration as a State-licensed loan 
     originator shall include the following:
       (1) The applicant has never had a loan originator license 
     revoked in any governmental jurisdiction.
       (2) The applicant has never been convicted of, or pled 
     guilty or nolo contendere to, a felony in a domestic, 
     foreign, or military court.
       (3) The applicant has demonstrated financial 
     responsibility, character, and general fitness such as to 
     command the confidence of the community and to warrant a 
     determination that the loan originator will operate honestly, 
     fairly, and efficiently within the purposes of this title.
       (4) The applicant has completed the pre-licensing education 
     requirement described in subsection (c).
       (5) The applicant has passed a written test that meets the 
     test requirement described in subsection (d).
       (6) The applicant has met either a minimum net worth or 
     surety bond requirement.
       (c) Pre-Licensing Education of Loan Originators.--
       (1) Minimum educational requirements.--In order to meet the 
     pre-licensing education requirement referred to in subsection 
     (b)(4), a person shall complete at least 20 hours of 
     education approved in accordance with paragraph (2), which 
     shall include at least--
       (A) 3 hours of Federal law and regulations;
       (B) 3 hours of ethics, which shall include instruction on 
     fraud, consumer protection, and fair lending issues; and
       (C) 2 hours of training related to lending standards for 
     the nontraditional mortgage product marketplace.
       (2) Approved educational courses.--For purposes of 
     paragraph (1), pre-licensing education courses shall be 
     reviewed, and approved by the Nationwide Mortgage Licensing 
     System and Registry.
       (3) Limitation and standards.--
       (A) Limitation.--To maintain the independence of the 
     approval process, the Nationwide Mortgage Licensing System 
     and Registry shall not directly or indirectly offer pre-
     licensure educational courses for loan originators.
       (B) Standards.--In approving courses under this section, 
     the Nationwide Mortgage Licensing System and Registry shall 
     apply reasonable standards in the review and approval of 
     courses.
       (d) Testing of Loan Originators.--
       (1) In general.--In order to meet the written test 
     requirement referred to in subsection (b)(5), an individual 
     shall pass, in accordance with the standards established 
     under this subsection, a qualified written test developed by 
     the Nationwide Mortgage Licensing System and Registry and 
     administered by an approved test provider.
       (2) Qualified test.--A written test shall not be treated as 
     a qualified written test for purposes of paragraph (1) 
     unless--
       (A) the test consists of a minimum of 100 questions; and
       (B) the test adequately measures the applicant's knowledge 
     and comprehension in appropriate subject areas, including--
       (i) ethics;
       (ii) Federal law and regulation pertaining to mortgage 
     origination;
       (iii) State law and regulation pertaining to mortgage 
     origination;
       (iv) Federal and State law and regulation, including 
     instruction on fraud, consumer protection, the nontraditional 
     mortgage marketplace, and fair lending issues.
       (3) Minimum competence.--
       (A) Passing score.--An individual shall not be considered 
     to have passed a qualified written test unless the individual 
     achieves a test score of not less than 75 percent correct 
     answers to questions.
       (B) Initial retests.--An individual may retake a test 3 
     consecutive times with each consecutive taking occurring in 
     less than 14 days after the preceding test.
       (C) Subsequent retests.--After 3 consecutive tests, an 
     individual shall wait at least 14 days before taking the test 
     again.
       (D) Retest after lapse of license.--A State-licensed loan 
     originator who fails to maintain a valid license for a period 
     of 5 years or longer shall retake the test, not taking into 
     account any time during which such individual is a registered 
     loan originator.
       (e) Mortgage Call Reports.--Each mortgage licensee shall 
     submit to the Nationwide Mortgage Licensing System and 
     Registry reports of condition, which shall be in such form 
     and shall contain such information as the Nationwide Mortgage 
     Licensing System and Registry may require.

     SEC. 806. STANDARDS FOR STATE LICENSE RENEWAL.

       (a) In General.--The minimum standards for license renewal 
     for State-licensed loan originators shall include the 
     following:
       (1) The loan originator continues to meet the minimum 
     standards for license issuance.
       (2) The loan originator has satisfied the annual continuing 
     education requirements described in subsection (b).
       (b) Continuing Education for State-Licensed Loan 
     Originators.--
       (1) In general.--In order to meet the annual continuing 
     education requirements referred to in subsection (a)(2), a 
     State-licensed loan originator shall complete at least 8 
     hours of education approved in accordance with paragraph (2), 
     which shall include at least--
       (A) 3 hours of Federal law and regulations;
       (B) 2 hours of ethics, which shall include instruction on 
     fraud, consumer protection, and fair lending issues; and
       (C) 2 hours of training related to lending standards for 
     the nontraditional mortgage product marketplace.
       (2) Approved educational courses.--For purposes of 
     paragraph (1), continuing education courses shall be 
     reviewed, and approved by the Nationwide Mortgage Licensing 
     System and Registry.
       (3) Calculation of continuing education credits.--A State-
     licensed loan originator--
       (A) may only receive credit for a continuing education 
     course in the year in which the course is taken; and
       (B) may not take the same approved course in the same or 
     successive years to meet the annual requirements for 
     continuing education.
       (4) Instructor credit.--A State-licensed loan originator 
     who is approved as an instructor of an approved continuing 
     education course may receive credit for the originator's own 
     annual continuing education requirement at the rate of 2 
     hours credit for every 1 hour taught.
       (5) Limitation and standards.--
       (A) Limitation.--To maintain the independence of the 
     approval process, the Nationwide Mortgage Licensing System 
     and Registry shall not directly or indirectly offer any 
     continuing education courses for loan originators.
       (B) Standards.--In approving courses under this section, 
     the Nationwide Mortgage Licensing System and Registry shall 
     apply reasonable standards in the review and approval of 
     courses.

     SEC. 807. SYSTEM OF REGISTRATION ADMINISTRATION BY FEDERAL 
                   BANKING AGENCIES.

       (a) Development.--
       (1) In general.--The Federal banking agencies shall 
     jointly, through the Federal Financial Institutions 
     Examination Council, develop and maintain a system for 
     registering employees of depository institutions or 
     subsidiaries of depository institutions as registered loan 
     originators with the Nationwide Mortgage Licensing System and 
     Registry. The system shall be implemented before the end of 
     the 1-year period beginning on the date of the enactment of 
     this title.
       (2) Registration requirements.--In connection with the 
     registration of any loan originator who is an employee of a 
     depository institution or a wholly-owned subsidiary of a 
     depository institution with the Nationwide Mortgage Licensing 
     System and Registry, the appropriate Federal banking agency 
     shall, at a minimum, furnish or cause to be furnished to the 
     Nationwide Mortgage Licensing System and Registry information 
     concerning the employees's identity, including--
       (A) fingerprints for submission to the Federal Bureau of 
     Investigation, and any governmental agency or entity 
     authorized to receive such information for a State and 
     national criminal history background check; and
       (B) personal history and experience, including 
     authorization for the Nationwide Mortgage Licensing System 
     and Registry to obtain information related to any 
     administrative, civil or criminal findings by any 
     governmental jurisdiction.
       (b) Coordination.--
       (1) Unique identifier.--The Federal banking agencies, 
     through the Financial Institutions Examination Council, shall 
     coordinate with the Nationwide Mortgage Licensing System and 
     Registry to establish protocols for assigning a unique 
     identifier to each registered loan originator that will 
     facilitate electronic tracking and uniform identification of, 
     and public access to, the employment history of and publicly 
     adjudicated disciplinary and enforcement actions against loan 
     originators.
       (2) Nationwide mortgage licensing system and registry 
     development.--To facilitate the transfer of information 
     required by subsection (a)(2), the Nationwide Mortgage 
     Licensing System and Registry shall coordinate with the 
     Federal banking agencies,

[[Page 5257]]

     through the Financial Institutions Examination Council, 
     concerning the development and operation, by such System and 
     Registry, of the registration functionality and data 
     requirements for loan originators.
       (c) Consideration of Factors and Procedures.--In 
     establishing the registration procedures under subsection (a) 
     and the protocols for assigning a unique identifier to a 
     registered loan originator, the Federal banking agencies 
     shall make such de minimis exceptions as may be appropriate 
     to paragraphs (1)(A) and (2) of section 804(a), shall make 
     reasonable efforts to utilize existing information to 
     minimize the burden of registering loan originators, and 
     shall consider methods for automating the process to the 
     greatest extent practicable consistent with the purposes of 
     this title.

     SEC. 808. SECRETARY OF HOUSING AND URBAN DEVELOPMENT BACKUP 
                   AUTHORITY TO ESTABLISH A LOAN ORIGINATOR 
                   LICENSING SYSTEM.

       (a) Back up Licensing System.--If, by the end of the 1-year 
     period, or the 2-year period in the case of a State whose 
     legislature meets only biennially, beginning on the date of 
     the enactment of this title or at any time thereafter, the 
     Secretary determines that a State does not have in place by 
     law or regulation a system for licensing and registering loan 
     originators that meets the requirements of sections 805 and 
     806 and subsection (d) of this section, or does not 
     participate in the Nationwide Mortgage Licensing System and 
     Registry, the Secretary shall provide for the establishment 
     and maintenance of a system for the licensing and 
     registration by the Secretary of loan originators operating 
     in such State as State-licensed loan originators.
       (b) Licensing and Registration Requirements.--The system 
     established by the Secretary under subsection (a) for any 
     State shall meet the requirements of sections 805 and 806 for 
     State-licensed loan originators.
       (c) Unique Identifier.--The Secretary shall coordinate with 
     the Nationwide Mortgage Licensing System and Registry to 
     establish protocols for assigning a unique identifier to each 
     loan originator licensed by the Secretary as a State-licensed 
     loan originator that will facilitate electronic tracking and 
     uniform identification of, and public access to, the 
     employment history of and the publicly adjudicated 
     disciplinary and enforcement actions against loan 
     originators.
       (d) State Licensing Law Requirements.--For purposes of this 
     section, the law in effect in a State meets the requirements 
     of this subsection if the Secretary determines the law 
     satisfies the following minimum requirements:
       (1) A State loan originator supervisory authority is 
     maintained to provide effective supervision and enforcement 
     of such law, including the suspension, termination, or 
     nonrenewal of a license for a violation of State or Federal 
     law.
       (2) The State loan originator supervisory authority ensures 
     that all State-licensed loan originators operating in the 
     State are registered with Nationwide Mortgage Licensing 
     System and Registry.
       (3) The State loan originator supervisory authority is 
     required to regularly report violations of such law, as well 
     as enforcement actions and other relevant information, to the 
     Nationwide Mortgage Licensing System and Registry.
       (e) Temporary Extension of Period.--The Secretary may 
     extend, by not more than 24 months, the 1-year or 2-year 
     period, as the case may be, referred to in subsection (a) for 
     the licensing of loan originators in any State under a State 
     licensing law that meets the requirements of sections 805 and 
     806 and subsection (d) if the Secretary determines that such 
     State is making a good faith effort to establish a State 
     licensing law that meets such requirements, license mortgage 
     originators under such law, and register such originators 
     with the Nationwide Mortgage Licensing System and Registry.
       (f) Contracting Authority.--The Secretary may enter into 
     contracts with qualified independent parties, as necessary to 
     efficiently fulfill the obligations of the Secretary under 
     this section.

     SEC. 809. BACKUP AUTHORITY TO ESTABLISH A NATIONWIDE MORTGAGE 
                   LICENSING AND REGISTRY SYSTEM.

       If at any time the Secretary determines that the Nationwide 
     Mortgage Licensing System and Registry is failing to meet the 
     requirements and purposes of this title for a comprehensive 
     licensing, supervisory, and tracking system for loan 
     originators, the Secretary shall establish and maintain such 
     a system to carry out the purposes of this title and the 
     effective registration and regulation of loan originators.

     SEC. 810. FEES.

       The Federal banking agencies, the Secretary, and the 
     Nationwide Mortgage Licensing System and Registry may charge 
     reasonable fees to cover the costs of maintaining and 
     providing access to information from the Nationwide Mortgage 
     Licensing System and Registry, to the extent that such fees 
     are not charged to consumers for access to such system and 
     registry.

     SEC. 811. BACKGROUND CHECKS OF LOAN ORIGINATORS.

       (a) Access to Records.--Notwithstanding any other provision 
     of law, in providing identification and processing functions, 
     the Attorney General shall provide access to all criminal 
     history information to the appropriate State officials 
     responsible for regulating State-licensed loan originators to 
     the extent criminal history background checks are required 
     under the laws of the State for the licensing of such loan 
     originators.
       (b) Agent.--For the purposes of this section and in order 
     to reduce the points of contact which the Federal Bureau of 
     Investigation may have to maintain for purposes of subsection 
     (a), the Conference of State Bank Supervisors or a wholly 
     owned subsidiary may be used as a channeling agent of the 
     States for requesting and distributing information between 
     the Department of Justice and the appropriate State agencies.

     SEC. 812. CONFIDENTIALITY OF INFORMATION.

       (a) System Confidentiality.--Except as otherwise provided 
     in this section, any requirement under Federal or State law 
     regarding the privacy or confidentiality of any information 
     or material provided to the Nationwide Mortgage Licensing 
     System and Registry or a system established by the Secretary 
     under section 809, and any privilege arising under Federal or 
     State law (including the rules of any Federal or State court) 
     with respect to such information or material, shall continue 
     to apply to such information or material after the 
     information or material has been disclosed to the system. 
     Such information and material may be shared with all State 
     and Federal regulatory officials with mortgage industry 
     oversight authority without the loss of privilege or the loss 
     of confidentiality protections provided by Federal and State 
     laws.
       (b) Nonapplicability of Certain Requirements.--Information 
     or material that is subject to a privilege or confidentiality 
     under subsection (a) shall not be subject to--
       (1) disclosure under any Federal or State law governing the 
     disclosure to the public of information held by an officer or 
     an agency of the Federal Government or the respective State; 
     or
       (2) subpoena or discovery, or admission into evidence, in 
     any private civil action or administrative process, unless 
     with respect to any privilege held by the Nationwide Mortgage 
     Licensing System and Registry or the Secretary with respect 
     to such information or material, the person to whom such 
     information or material pertains waives, in whole or in part, 
     in the discretion of such person, that privilege.
       (c) Coordination With Other Law.--Any State law, including 
     any State open record law, relating to the disclosure of 
     confidential supervisory information or any information or 
     material described in subsection (a) that is inconsistent 
     with subsection (a) shall be superseded by the requirements 
     of such provision to the extent State law provides less 
     confidentiality or a weaker privilege.
       (d) Public Access to Information.--This section shall not 
     apply with respect to the information or material relating to 
     the employment history of, and publicly adjudicated 
     disciplinary and enforcement actions against, loan 
     originators that is included in Nationwide Mortgage Licensing 
     System and Registry for access by the public.

     SEC. 813. LIABILITY PROVISIONS.

       The Secretary, any State official or agency, any Federal 
     banking agency, or any organization serving as the 
     administrator of the Nationwide Mortgage Licensing System and 
     Registry or a system established by the Secretary under 
     section 809, or any officer or employee of any such entity, 
     shall not be subject to any civil action or proceeding for 
     monetary damages by reason of the good-faith action or 
     omission of any officer or employee of any such entity, while 
     acting within the scope of office or employment, relating to 
     the collection, furnishing, or dissemination of information 
     concerning persons who are loan originators or are applying 
     for licensing or registration as loan originators.

     SEC. 814. ENFORCEMENT UNDER HUD BACKUP LICENSING SYSTEM.

       (a) Summons Authority.--The Secretary may--
       (1) examine any books, papers, records, or other data of 
     any loan originator operating in any State which is subject 
     to a licensing system established by the Secretary under 
     section 808; and
       (2) summon any loan originator referred to in paragraph (1) 
     or any person having possession, custody, or care of the 
     reports and records relating to such loan originator, to 
     appear before the Secretary or any delegate of the Secretary 
     at a time and place named in the summons and to produce such 
     books, papers, records, or other data, and to give testimony, 
     under oath, as may be relevant or material to an 
     investigation of such loan originator for compliance with the 
     requirements of this title.
       (b) Examination Authority.--
       (1) In general.--If the Secretary establishes a licensing 
     system under section 808 for any State, the Secretary shall 
     appoint examiners for the purposes of administering such 
     section.
       (2) Power to examine.--Any examiner appointed under 
     paragraph (1) shall have power, on behalf of the Secretary, 
     to make any examination of any loan originator operating in 
     any State which is subject to a licensing system established 
     by the Secretary

[[Page 5258]]

     under section 808 whenever the Secretary determines an 
     examination of any loan originator is necessary to determine 
     the compliance by the originator with this title.
       (3) Report of examination.--Each examiner appointed under 
     paragraph (1) shall make a full and detailed report of 
     examination of any loan originator examined to the Secretary.
       (4) Administration of oaths and affirmations; evidence.--In 
     connection with examinations of loan originators operating in 
     any State which is subject to a licensing system established 
     by the Secretary under section 808, or with other types of 
     investigations to determine compliance with applicable law 
     and regulations, the Secretary and examiners appointed by the 
     Secretary may administer oaths and affirmations and examine 
     and take and preserve testimony under oath as to any matter 
     in respect to the affairs of any such loan originator.
       (5) Assessments.--The cost of conducting any examination of 
     any loan originator operating in any State which is subject 
     to a licensing system established by the Secretary under 
     section 808 shall be assessed by the Secretary against the 
     loan originator to meet the Secretary's expenses in carrying 
     out such examination.
       (c) Cease and Desist Proceeding.--
       (1) Authority of secretary.--If the Secretary finds, after 
     notice and opportunity for hearing, that any person is 
     violating, has violated, or is about to violate any provision 
     of this title, or any regulation thereunder, with respect to 
     a State which is subject to a licensing system established by 
     the Secretary under section 808, the Secretary may publish 
     such findings and enter an order requiring such person, and 
     any other person that is, was, or would be a cause of the 
     violation, due to an act or omission the person knew or 
     should have known would contribute to such violation, to 
     cease and desist from committing or causing such violation 
     and any future violation of the same provision, rule, or 
     regulation. Such order may, in addition to requiring a person 
     to cease and desist from committing or causing a violation, 
     require such person to comply, or to take steps to effect 
     compliance, with such provision or regulation, upon such 
     terms and conditions and within such time as the Secretary 
     may specify in such order. Any such order may, as the 
     Secretary deems appropriate, require future compliance or 
     steps to effect future compliance, either permanently or for 
     such period of time as the Secretary may specify, with such 
     provision or regulation with respect to any loan originator.
       (2) Hearing.--The notice instituting proceedings pursuant 
     to paragraph (1) shall fix a hearing date not earlier than 30 
     days nor later than 60 days after service of the notice 
     unless an earlier or a later date is set by the Secretary 
     with the consent of any respondent so served.
       (3) Temporary order.--Whenever the Secretary determines 
     that the alleged violation or threatened violation specified 
     in the notice instituting proceedings pursuant to paragraph 
     (1), or the continuation thereof, is likely to result in 
     significant dissipation or conversion of assets, significant 
     harm to consumers, or substantial harm to the public interest 
     prior to the completion of the proceedings, the Secretary may 
     enter a temporary order requiring the respondent to cease and 
     desist from the violation or threatened violation and to take 
     such action to prevent the violation or threatened violation 
     and to prevent dissipation or conversion of assets, 
     significant harm to consumers, or substantial harm to the 
     public interest as the Secretary deems appropriate pending 
     completion of such proceedings. Such an order shall be 
     entered only after notice and opportunity for a hearing, 
     unless the Secretary determines that notice and hearing prior 
     to entry would be impracticable or contrary to the public 
     interest. A temporary order shall become effective upon 
     service upon the respondent and, unless set aside, limited, 
     or suspended by the Secretary or a court of competent 
     jurisdiction, shall remain effective and enforceable pending 
     the completion of the proceedings.
       (4) Review of temporary orders.--
       (A) Review by secretary.--At any time after the respondent 
     has been served with a temporary cease-and-desist order 
     pursuant to paragraph (3), the respondent may apply to the 
     Secretary to have the order set aside, limited, or suspended. 
     If the respondent has been served with a temporary cease-and-
     desist order entered without a prior hearing before the 
     Secretary, the respondent may, within 10 days after the date 
     on which the order was served, request a hearing on such 
     application and the Secretary shall hold a hearing and render 
     a decision on such application at the earliest possible time.
       (B) Judicial review.--Within--
       (i) 10 days after the date the respondent was served with a 
     temporary cease-and-desist order entered with a prior hearing 
     before the Secretary; or
       (ii) 10 days after the Secretary renders a decision on an 
     application and hearing under paragraph (1), with respect to 
     any temporary cease-and-desist order entered without a prior 
     hearing before the Secretary,

     the respondent may apply to the United States district court 
     for the district in which the respondent resides or has its 
     principal place of business, or for the District of Columbia, 
     for an order setting aside, limiting, or suspending the 
     effectiveness or enforcement of the order, and the court 
     shall have jurisdiction to enter such an order. A respondent 
     served with a temporary cease-and-desist order entered 
     without a prior hearing before the Secretary may not apply to 
     the court except after hearing and decision by the Secretary 
     on the respondent's application under subparagraph (A).
       (C) No automatic stay of temporary order.--The commencement 
     of proceedings under subparagraph (B) shall not, unless 
     specifically ordered by the court, operate as a stay of the 
     Secretary's order.
       (5) Authority of the secretary to prohibit persons from 
     serving as loan originators.--In any cease-and-desist 
     proceeding under paragraph (1), the Secretary may issue an 
     order to prohibit, conditionally or unconditionally, and 
     permanently or for such period of time as the Secretary shall 
     determine, any person who has violated this title or 
     regulations thereunder, from acting as a loan originator if 
     the conduct of that person demonstrates unfitness to serve as 
     a loan originator.
       (d) Authority of the Secretary To Assess Money Penalties.--
       (1) In general.--The Secretary may impose a civil penalty 
     on a loan originator operating in any State which is subject 
     to licensing system established by the Secretary under 
     section 808, if the Secretary finds, on the record after 
     notice and opportunity for hearing, that such loan originator 
     has violated or failed to comply with any requirement of this 
     title or any regulation prescribed by the Secretary under 
     this title or order issued under subsection (c).
       (2) Maximum amount of penalty.--The maximum amount of 
     penalty for each act or omission described in paragraph (1) 
     shall be $25,000.

     SEC. 815. PREEMPTION OF STATE LAW.

       Nothing in this title may be construed to preempt the law 
     of any State, to the extent that such State law provides 
     greater protection to consumers than is provided under this 
     title.

     SEC. 816. REPORTS AND RECOMMENDATIONS TO CONGRESS.

       (a) Annual Reports.--Not later than 1 year after the date 
     of enactment of this title, and annually thereafter, the 
     Secretary shall submit a report to Congress on the 
     effectiveness of the provisions of this title, including 
     legislative recommendations, if any, for strengthening 
     consumer protections, enhancing examination standards, and 
     streamlining communication between all stakeholders involved 
     in residential mortgage loan origination and processing.
       (b) Legislative Recommendations.--Not later than 6 months 
     after the date of enactment of this title, the Secretary 
     shall make recommendations to Congress on legislative reforms 
     to the Real Estate Settlement Procedures Act of 1974, that 
     the Secretary deems appropriate to promote more transparent 
     disclosures, allowing consumers to better shop and compare 
     mortgage loan terms and settlement costs.

     SEC. 817. STUDY AND REPORTS ON DEFAULTS AND FORECLOSURES.

       (a) Study Required.--The Secretary shall conduct an 
     extensive study of the root causes of default and foreclosure 
     of home loans, using as much empirical data as is available.
       (b) Preliminary Report to Congress.--Not later than 6 
     months after the date of enactment of this title, the 
     Secretary shall submit to Congress a preliminary report 
     regarding the study required by this section.
       (c) Final Report to Congress.--Not later than 12 months 
     after the date of enactment of this title, the Secretary 
     shall submit to Congress a final report regarding the results 
     of the study required by this section, which shall include 
     any recommended legislation relating to the study, and 
     recommendations for best practices and for a process to 
     provide targeted assistance to populations with the highest 
     risk of potential default or foreclosure.
                                 ______
                                 
  SA 4471. Mr. KOHL (for himself and Mrs. Lincoln) submitted an 
amendment intended to be proposed by him to the bill H.R. 3221, moving 
the United States toward greater energy independence and security, 
developing innovative new technologies, reducing carbon emissions, 
creating green jobs, protecting consumers, increasing clean renewable 
energy production, and modernizing our energy infrastructure, and to 
amend the Internal Revenue Code of 1986 to provide tax incentives for 
the production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       On page 82, between lines 7 and 8, insert the following:

                  TITLE VII--FORECLOSURE RESCUE FRAUD

     SEC. 701. DEFINITIONS.

       In this title:
       (1) Commission.--The term ``Commission'' means the Federal 
     Trade Commission.

[[Page 5259]]

       (2) Foreclosure consultant.--The term ``foreclosure 
     consultant''--
       (A) means a person who directly or indirectly makes any 
     solicitation, representation, or offer to a homeowner facing 
     foreclosure on residential real property to perform, with or 
     without compensation, or who performs, with or without 
     compensation, any service that such person represents will 
     prevent, postpone, or reverse the effect of such foreclosure; 
     and
       (B) does not include--
       (i) an attorney licensed to practice law in the State in 
     which the property is located who has established an 
     attorney-client relationship with the homeowner;
       (ii) a housing counseling agency approved by the Secretary; 
     or
       (iii) a person licensed as a real estate broker or 
     salesperson in the State where the property is located, and 
     such person engages in acts permitted under the licensure 
     laws of such State.
       (3) Homeowner.--The term ``homeowner'', with respect to 
     residential real property for which an action to foreclose on 
     the mortgage or deed of trust on such real property is filed, 
     means the person holding record title to such property as of 
     the date on which such action is filed.
       (4) Loan servicer.--The term ``loan servicer'' has the same 
     meaning as the term ``servicer'' in section 6(i)(2) of the 
     Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 
     2605(i)(2)).
       (5) Residential mortgage loan.--The term ``residential 
     mortgage loan'' means any loan primarily for personal, 
     family, or household use that is secured by a mortgage, deed 
     of trust, or other equivalent consensual security interest on 
     a dwelling (as defined in section 103(v) of the Truth in 
     Lending Act (15 U.S.C. 1602)(v)) or residential real estate 
     upon which is constructed or intended to be constructed a 
     dwelling (as so defined).
       (6) Residential real property.--The term ``residential real 
     property'' has the meaning given the term ``dwelling'' in 
     section 103 of the Consumer Credit Protection Act (15 U.S.C. 
     1602).
       (7) Secretary.--The term ``Secretary'' means the Secretary 
     of Housing and Urban Development.

     SEC. 702. MORTGAGE RESCUE FRAUD PROTECTION.

       (a) Limits on Foreclosure Consultants.--A foreclosure 
     consultant may not--
       (1) claim, demand, charge, collect, or receive any 
     compensation from a homeowner for services performed by such 
     foreclosure consultant with respect to residential real 
     property until such foreclosure consultant has fully 
     performed each service that such foreclosure consultant 
     contracted to perform or represented would be performed with 
     respect to such residential real property;
       (2) hold any power of attorney from any homeowner, except 
     to inspect documents, as provided by applicable law;
       (3) receive any consideration from a third party in 
     connection with services rendered to a homeowner by such 
     third party with respect to the foreclosure of residential 
     real property, unless such consideration is fully disclosed 
     to such homeowner in writing before such services are 
     rendered;
       (4) accept any wage assignment, any lien of any type on 
     real or personal property, or other security to secure the 
     payment of compensation with respect to services provided by 
     such foreclosure consultant in connection with the 
     foreclosure of residential real property; or
       (5) acquire any interest, directly or indirectly, in the 
     residence of a homeowner with whom the foreclosure consultant 
     has contracted.
       (b) Contract Requirements.--
       (1) Written contract required.--A foreclosure consultant 
     may not provide to a homeowner a service related to the 
     foreclosure of residential real property--
       (A) unless--
       (i) a written contract for the purchase of such service has 
     been signed and dated by the homeowner; and
       (ii) such contract complies with the requirements described 
     in paragraph (2); and
       (B) before the end of the 3-business day period beginning 
     on the date on which the contract is signed.
       (2) Terms and conditions of contract.--The requirements 
     described in this paragraph, with respect to a contract, are 
     as follows:
       (A) The contract includes, in writing--
       (i) a full and detailed description of the exact nature of 
     the contract and the total amount and terms of compensation;
       (ii) the name, physical address, phone number, email 
     address, and facsimile number, if any, of the foreclosure 
     consultant to whom a notice of cancellation can be mailed or 
     sent under subsection (d); and
       (iii) a conspicuous statement in at least 12 point bold 
     face type in immediate proximity to the space reserved for 
     the homeowner's signature on the contract that reads as 
     follows: ``You may cancel this contract without penalty or 
     obligation at any time before midnight of the 3rd business 
     day after the date on which you sign the contract. See the 
     attached notice of cancellation form for an explanation of 
     this right.''.
       (B) The contract is written in the principal language used 
     by the homeowner.
       (C) The contract is accompanied by the form required by 
     subsection (c)(2).
       (c) Right to Cancel Contract.--
       (1) In general.--With respect to a contract between a 
     homeowner and a foreclosure consultant regarding the 
     foreclosure on the residential real property of such 
     homeowner, such homeowner may cancel such contract without 
     penalty or obligation by mailing a notice of cancellation not 
     later than midnight of the 3rd business day after the date on 
     which such contract is executed or would become enforceable 
     against the parties to such contract.
       (2) Cancellation form and other information.--Each contract 
     described in paragraph (1) shall be accompanied by a form, in 
     duplicate, that--
       (A) has the heading ``Notice of Cancellation'' in boldface 
     type; and
       (B) contains in boldface type the following statement:
       ``You may cancel this contract, without any penalty or 
     obligation, at any time before midnight of the 3rd day after 
     the date on which the contract is signed by you.
       ``To cancel this contract, mail or deliver a signed and 
     dated copy of this cancellation notice or any other 
     equivalent written notice to [insert name of foreclosure 
     consultant] at [insert address of foreclosure consultant] 
     before midnight on [insert date].
       ``I hereby cancel this transaction on [insert date] [insert 
     homeowner signature].''.
       (d) Waiver of Rights and Protections Prohibited.--
       (1) In general.--A waiver by a homeowner of any protection 
     provided by this section or any right of a homeowner under 
     this section--
       (A) shall be treated as void; and
       (B) may not be enforced by any Federal or State court or by 
     any person.
       (2) Attempt to obtain a waiver.--Any attempt by any person 
     to obtain a waiver from any homeowner of any protection 
     provided by this section or any right of the homeowner under 
     this section shall be treated as a violation of this section.
       (3) Contracts not in compliance.--Any contract that does 
     not comply with the applicable provisions of this title shall 
     be void and may not be enforceable by any party.

     SEC. 703. WARNINGS TO HOMEOWNERS OF FORECLOSURE RESCUE SCAMS.

       (a) In General.--If a loan servicer finds that a homeowner 
     has failed to make 2 consecutive payments on a residential 
     mortgage loan and such loan is at risk of being foreclosed 
     upon, the loan servicer shall notify such homeowner of the 
     dangers of fraudulent activities associated with foreclosure.
       (b) Notice Requirements.--Each notice provided under 
     subsection (a) shall--
       (1) be in writing;
       (2) be included with a mailing of account information;
       (3) have the heading ``Notice Required by Federal Law'' in 
     a 14-point boldface type in English and Spanish at the top of 
     such notice; and
       (4) contain the following statement in English and Spanish: 
     ``Mortgage foreclosure is a complex process. Some people may 
     approach you about saving your home. You should be careful 
     about any such promises. There are government and nonprofit 
     agencies you may contact for helpful information about the 
     foreclosure process. Contact your lender immediately at 
     [____], call the Department of Housing and Urban Development 
     Housing Counseling Line at (800) 569-4287 to find a housing 
     counseling agency certified by the Department to assist you 
     in avoiding foreclosure, or visit the Department's Tips for 
     Avoiding Foreclosure website at http://www.hud.gov/
 foreclosure for additional assistance.'' (the blank space to 
     be filled in by the loan servicer).

     SEC. 704. CIVIL LIABILITY.

       (a) Liability Established.--Any foreclosure consultant who 
     fails to comply with any provision of section 702 or 703 with 
     respect to any other person shall be liable to such person in 
     an amount equal to the sum of the amounts determined under 
     each of the following paragraphs:
       (1) Actual damages.--The greater of--
       (A) the amount of any actual damage sustained by such 
     person as a result of such failure; or
       (B) any amount paid by the person to the foreclosure 
     consultant.
       (2) Punitive damages.--In the case of any action by an 
     individual, such amount (in addition to damages described in 
     paragraph (1)) as the court may allow.
       (3) Attorneys' fees.--In the case of any successful action 
     to enforce any liability under paragraph (1) or (2), the 
     costs of the action, together with reasonable attorneys' 
     fees.
       (b) Factors to Be Considered in Awarding Punitive 
     Damages.--In determining the amount of any liability of any 
     foreclosure consultant under subsection (a)(2), the court 
     shall consider, among other relevant factors--
       (1) the frequency and persistence of noncompliance by the 
     foreclosure consultant;
       (2) the nature of the noncompliance; and
       (3) the extent to which such noncompliance was intentional.

     SEC. 705. ADMINISTRATIVE ENFORCEMENT.

       (a) Enforcement by Federal Trade Commission.--

[[Page 5260]]

       (1) Unfair or deceptive act or practice.--A violation of a 
     prohibition described in section 702 or a failure to comply 
     with any provision of section 702 or 703 shall be treated as 
     a violation of a rule defining an unfair or deceptive act or 
     practice described under section 18(a)(1)(B) of the Federal 
     Trade Commission Act (15 U.S.C. 57a(a)(1)(B)).
       (2) Actions by the federal trade commission.--The Federal 
     Trade Commission shall enforce the provisions of sections 702 
     and 703 in the same manner, by the same means, and with the 
     same jurisdiction, powers, and duties as though all 
     applicable terms and provisions of the Federal Trade 
     Commission Act (15 U.S.C. 41 et seq.) were incorporated into 
     and made part of this title.
       (b) State Action for Violations.--
       (1) Authority of states.--In addition to such other 
     remedies as are provided under State law, whenever the chief 
     law enforcement officer of a State, or an official or agency 
     designated by a State, has reason to believe that any person 
     has violated or is violating the provisions of section 702 or 
     703, the State--
       (A) may bring an action to enjoin such violation;
       (B) may bring an action on behalf of its residents to 
     recover damages for which the person is liable to such 
     residents under section 704 as a result of the violation; and
       (C) in the case of any successful action under subparagraph 
     (A) or (B), shall be awarded the costs of the action and 
     reasonable attorney fees, as determined by the court.
       (2) Rights of federal trade commission.--
       (A) Notice to commission.--The State shall serve prior 
     written notice of any civil action under paragraph (1) upon 
     the Commission and provide the Commission with a copy of its 
     complaint, except in any case in which such prior notice is 
     not feasible, in which case the State shall serve such notice 
     immediately upon instituting such action.
       (B) Intervention.--The Commission shall have the right--
       (i) to intervene in any action referred to in subparagraph 
     (A);
       (ii) upon so intervening, to be heard on all matters 
     arising in the action; and
       (iii) to file petitions for appeal in such actions.
       (3) Investigatory powers.--For purposes of bringing any 
     action under this subsection, nothing in this subsection 
     shall prevent the chief law enforcement officer, or an 
     official or agency designated by a State, from exercising the 
     powers conferred on the chief law enforcement officer or such 
     official by the laws of such State to conduct investigations 
     or to administer oaths or affirmations, or to compel the 
     attendance of witnesses or the production of documentary and 
     other evidence.
       (4) Limitation.--Whenever the Federal Trade Commission has 
     instituted a civil action for a violation of section 702 or 
     703, no State may, during the pendency of such action, bring 
     an action under this section against any defendant named in 
     the complaint of the Commission for any violation of section 
     702 or 703 that is alleged in that complaint.

     SEC. 706. PREEMPTION.

       Nothing in this title affects any provision of State or 
     local law respecting any foreclosure consultant, residential 
     mortgage loan, or residential real property that provides 
     equal or greater protection to homeowners than what is 
     provided under this title.
  SA 4472. Mr. SCHUMER submitted an amendment intended to be proposed 
by him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       On page 82, line 3, insert ``by any law enacted'' after 
     ``increased''.

                                 ______
                                 
  SA 4473. Mr. DeMINT submitted an amendment intended to be proposed by 
him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       On page 12, after line 25, insert the following:

     SEC. 202. LIMITATION ON DISTRIBUTION OF FUNDS.

       (a) In General.--None of the funds made available under 
     this title or title III shall be distributed to--
       (1) an organization which has been indicted for a violation 
     under Federal law relating to an election for Federal office; 
     or
       (2) an organization which employs applicable individuals.
       (b) Applicable Individuals Defined.--In this section, the 
     term ``applicable individual'' means an individual who--
       (1) is--
       (A) employed by the organization in a permanent or 
     temporary capacity;
       (B) contracted or retained by, or volunteers with, the 
     organization; or
       (C) acting on behalf of, or with the express or apparent 
     authority of, the organization; and
       (2) has been indicted for a violation under Federal law 
     relating to an election for Federal office.
                                 ______
                                 
  SA 4474. Mr. DeMINT submitted an amendment intended to be proposed by 
him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       On page 50, strike line 14 and all that follows through 
     page 58, line 2.
                                 ______
                                 
  SA 4475. Mr. DeMINT submitted an amendment intended to be proposed by 
him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the end, add the following:
TITLE VIII--ENSURING ASSISTANCE IS NOT USED IN CONJUNCTION WITH EMINENT 
                            DOMAIN AUTHORITY

     SEC. 801. LIMITATION ON USE OF FUNDS.

         (a) Definition.--For purposes of this section, the term 
     ``housing assistance'' means the following:
         (1) Any amounts appropriated, authorized to be 
     appropriated, or otherwise made available under this Act, or 
     any amendment made by this Act.
         (2) Any qualified mortgage bond issued by a State or 
     political subdivision or any other entity or organization 
     pursuant to section 143(k)(12) of the Internal Revenue Code, 
     as added by section 602 of this Act.
         (3) Any tax credit related to certain home purchases 
     allowable under section 25E of the Internal Revenue Code of 
     1986, as added by section 603 of this Act.
         (b) Limitation on Use of Assistance With Eminent Domain 
     Authority.--Any State or local government entity that 
     receives housing assistance shall be prohibited from using 
     any such assistance or authority in conjunction with any 
     project that involves, includes, or relies on the use of 
     eminent domain by such State or local government or pursuant 
     to a delegation of such authority by the same.
                                 ______
                                 
  SA 4476. Mr. DeMINT submitted an amendment intended to be proposed by 
him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the end, add the following:

TITLE VIII--ENSURING ASSISTANCE IS NOT USED IN CONJUNCTION WITH EMINENT 
                            DOMAIN AUTHORITY

     SEC. 801. LIMITATION ON USE OF FUNDS.

       None of the funds provided to a State or unit of general 
     local government under this Act shall be used in conjunction 
     with any project that involves, includes, or relies on the 
     use of eminent domain by such State or unit of general local 
     government or pursuant to a delegation of such authority by 
     the same.
                                 ______
                                 
  SA 4477. Mrs. MURRAY (for herself, Mr. Schumer, Mr. Casey, and Mr. 
Brown) submitted an amendment intended to be proposed by her to the 
bill

[[Page 5261]]

H.R. 3221, moving the United States toward greater energy independence 
and security, developing innovative new technologies, reducing carbon 
emissions, creating green jobs, protecting consumers, increasing clean 
renewable energy production, and modernizing our energy infrastructure, 
and to amend the Internal Revenue Code of 1986 to provide tax 
incentives for the production of renewable energy and energy 
conservation; which was ordered to lie on the table; as follows:

       On page 50, line 23, strike ``$4,000,000,000'' and insert 
     ``$3,900,000,000''.
       On page 58, line 10, strike ``$100,000,000'' and insert 
     ``$200,000,000''.
                                 ______
                                 
  SA 4478. Mrs. MURRAY (for herself, Mr. Schumer, Mr. Casey, and Mr. 
Brown) submitted an amendment intended to be proposed by her to the 
bill H.R. 3221, moving the United States toward greater energy 
independence and security, developing innovative new technologies, 
reducing carbon emissions, creating green jobs, protecting consumers, 
increasing clean renewable energy production, and modernizing our 
energy infrastructure, and to amend the Internal Revenue Code of 1986 
to provide tax incentives for the production of renewable energy and 
energy conservation; which was ordered to lie on the table; as follows:

       At the appropriate place in the bill, insert:
       Sec.__. Notwithstanding any other provision of this Act, 
     the amount appropriated under section 301(a) of this Act 
     shall be $3,900,000,000 and the amount appropriated under 
     section 401 of this Act shall be $200,000,000.
                                 ______
                                 
  SA 4479. Mrs. MURRAY (for herself and Mr. Schumer) submitted an 
amendment intended to be proposed by her to the bill H.R. 3221, moving 
the United States toward greater energy independence and security, 
developing innovative new technologies, reducing carbon emissions, 
creating green jobs, protecting consumers, increasing clean renewable 
energy production, and modernizing our energy infrastructure, and to 
amend the Internal Revenue Code of 1986 to provide tax incentives for 
the production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       On page 50, line 24, after the word ``for'', insert: 
     ``(1)''
       On page 51, between lines 4 and 5 insert:
       ``(2) Targeted housing counseling activities to be provided 
     through Neighborhood Reinvestment Corporation to make grants 
     to counseling intermediaries approved by the Department of 
     Housing and Urban Development (HUD) or State Housing Finance 
     Agencies to provide mortgage foreclosure mitigation 
     assistance primarily to States and areas with high rates of 
     defaults and foreclosures primarily in the sub prime housing 
     market to help eliminate the default and foreclosure of 
     mortgages of owner-occupied single-family homes that are at 
     risk of such foreclosure.''
       On page 51, line 6, before the word ``The'' insert:
       ``(A) Of the amounts made available under this section, 
     $3,900,000,000 shall be made available for the purposes of 
     subsection (a)(1) of this section and $100,000,000 shall be 
     made available for the purposes of subsection (a)(2) of this 
     section.
       (B)''
       On page 51, line 8, following the word ``under'' insert 
     ``subsection (a)(1) of''
       On page 51, line 13, after ``(1)'' insert ``(B)''
       On page 51, line 17, after ``(1)'' insert ``(B)''
       On page 51, line 18, following the word ``under'' insert 
     ``subsection (a)(1) of''
       On page 52, line 9, following the word ``under'' insert 
     ``subsection (a)(1) of''
       On page 52, line 11, after ``(1)'' insert ``(B)''
       On page 52, at the beginning of line 17, insert 
     ``subsection (a)(1) of''
       On page 52, at the beginning of line 23, insert 
     ``subsection (a)(1) of''
       On page 53, line 12, insert after the word ``under'', 
     ``subsection (a)(1) of''
       On page 54, line 3, insert after the word ``under'', 
     ``subsection (a)(1) of''
       On page 55, line 15, following the word ``under'' insert 
     ``subsection (a)(1) of''
       On page 56, line 3, following the word ``under'' insert 
     ``subsection (a)(1) of''
       On page 56, line 14, after the word ``the'' insert 
     ``Committees on Appropriations of the House of 
     Representatives and the Senate and''
       On page 56, line 25, following the word ``under'' insert 
     ``subsection (a)(1) of''
       On page 57, line 6, following the word ``under'' insert 
     ``subsection (a)(1) of''
                                 ______
                                 
  SA 4480. Mr. CARPER (for himself and Mr. Crapo) submitted an 
amendment intended to be proposed by him to the bill H.R. 3221, moving 
the United States toward greater energy independence and security, 
developing innovative new technologies, reducing carbon emissions, 
creating green jobs, protecting consumers, increasing clean renewable 
energy production, and modernizing our energy infrastructure, and to 
amend the Internal Revenue Code of 1986 to provide tax incentives for 
the production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. FEDERAL HOME LOAN BANK REFINANCING AUTHORITY FOR 
                   CERTAIN RESIDENTIAL MORTGAGE LOANS.

       Section 10(j)(2) of the Federal Home Loan Bank Act (12 
     U.S.C. 1430(j)(2) is amended--
       (1) in subparagraph (A), by striking ``or'' at the end;
       (2) in subparagraph (B), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(C) during the 2-year period beginning on the date of 
     enactment of this subparagraph, refinance loans that are 
     secured by a first mortgage on a primary residence of any 
     family having an income at or below 80 percent of the median 
     income for the area.''.
                                 ______
                                 
  SA 4481. Mr. BAUCUS (for himself, Ms. Snowe, and Mr. Whitehouse) 
submitted an amendment intended to be proposed by him to the bill H.R. 
3221, moving the United States toward greater energy independence and 
security, developing innovative new technologies, reducing carbon 
emissions, creating green jobs, protecting consumers, increasing clean 
renewable energy production, and modernizing our energy infrastructure, 
and to amend the Internal Revenue Code of 1986 to provide tax 
incentives for the production of renewable energy and energy 
conservation; which was ordered to lie on the table; as follows:

       On page 51, strike line 5 and all that follows through page 
     52, line 13, and insert the following:
       (b) Allocation of Appropriated Amounts.--
       (1) Minimum amount.--Each State shall be allocated not less 
     than 0.50 percent of the total amount appropriated or 
     otherwise made available under this section.
       (2) Remaining amounts.--Upon the distribution of amounts 
     pursuant to paragraph (1), all remaining amounts appropriated 
     or otherwise made available under this section shall be 
     allocated based on a funding formula established by the 
     Secretary of Housing and Urban Development (in this title 
     referred to as the ``Secretary)''.
       (3) Formula to be devised swiftly.--The funding formula 
     required under paragraph (2) shall be established not later 
     than 60 days after the date of enactment of this section.
       (4) Criteria.--The funding formula required under paragraph 
     (2) shall ensure that any amounts appropriated or otherwise 
     made available under this section are allocated to States and 
     units of general local government with the greatest need, as 
     such need is determined in the discretion of the Secretary 
     based on--
       (A) the number and percentage of home foreclosures in each 
     State or unit of general local government;
       (B) the number and percentage of homes financed by a 
     subprime mortgage related loan in each State or unit of 
     general local government; and
       (C) the number and percentage of homes in default or 
     delinquency in each State or unit of general local 
     government.
       (5) Distribution.--Amounts appropriated or otherwise made 
     available under this section shall be distributed according 
     to the funding formula established under paragraph (2) not 
     later than 30 days after the establishment of such formula.
                                 ______
                                 
  SA 4482. Ms. MIKULSKI submitted an amendment intended to be proposed 
by her to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       On page 58, line 10, strike ``$100,000,000'' and insert 
     ``$137,500,000''.
       On page 58, line 17, strike the period and insert the 
     following: ``: Provided, That, of such amounts $37,500,000 
     shall be used by the Neighborhood Reinvestment Corporation 
     (referred to in this section as the `NRC') to (1) make grants 
     to counseling intermediaries approved by the Department of 
     Housing and Urban Development or the NRC to hire attorneys 
     trained and capable of assisting homeowners of owner-occupied 
     homes with

[[Page 5262]]

     mortgages in default, in danger of default, or subject to or 
     at risk of foreclosure who have legal issues that cannot be 
     handled by counselors already employed by such 
     intermediaries, and (2) support NRC partnerships with State 
     and local legal organizations and organizations described in 
     section 501(c)(3) of the Internal Revenue Code of 1986 and 
     exempt from tax under section 501(a) of that Code with 
     demonstrated relevant legal experience in home foreclosure 
     law, as such experience is determined by the Chief Executive 
     Officer of NRC: Provided further, That for the purpose of the 
     prior proviso the term `relevant experience' means experience 
     representing homeowners in negotiations and/or legal 
     proceedings aimed at preventing or mitigating foreclosure or 
     providing legal research and technical legal expertise to 
     community based organizations whose goal is to reduce, 
     prevent, or mitigate foreclosure: Provided further, That of 
     the amounts provided for in the prior provisos the NRC shall 
     give priority consideration to counseling intermediaries and 
     legal organizations that (1) provide legal assistance in the 
     100 metropolitan statistical areas (as defined by the 
     Director of the Office of Management and Budget) with the 
     highest home foreclosure rates, and (2) have the capacity to 
     begin using the financial assistance within 90 days after 
     receipt of the assistance.''.

     SEC. 302. EMERGENCY DESIGNATION.

       For purposes of Senate enforcement, section 301 is 
     designated as emergency requirements and necessary to meet 
     emergency needs pursuant to section 204 of S. Con. Res. 21 
     (110th Congress), the concurrent resolution on the budget for 
     fiscal year 2008.
                                 ______
                                 
  SA 4483. Mr. CORNYN submitted an amendment intended to be proposed by 
him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the end of title VII, insert the following:

     SEC. __. RESCISSION OF AMOUNTS APPROPRIATED FOR FISCAL YEAR 
                   2008.

       (a) In General.--The discretionary amounts made available 
     by Consolidated Appropriations Act, 2008 (121 Stat. 1845; 
     Public Law 110-161), that are unobligated on the date of 
     enactment of this Act are reduced on a pro rata basis by 
     $4,100,000,000 and are rescinded, except for any amounts made 
     available under--
       (1) Division E (Department of Homeland Security 
     Appropriations Act, 2008);
       (2) Division I (Military Construction and Veterans Affairs 
     and Related Agencies Appropriations Act, 2008); and
       (3) Division L (Emergency Supplemental Appropriations for 
     Operation Enduring Freedom and for Other Purposes).
       (b) Administration.--The Director of the Office of 
     Management and Budget shall--
       (1) administer the reduction specified in subsection (a); 
     and
       (2) submit to the Committee on Appropriations of the Senate 
     and the Committee on Appropriations of the House of 
     Representatives a report specifying the account and the 
     amount of each reduction made pursuant to subsection (a).
                                 ______
                                 
  SA 4484. Mr. CORNYN submitted an amendment intended to be proposed by 
him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the end, add the following:

                  TITLE VIII--VETERANS HOUSING MATTERS

     SEC. 801. HOME IMPROVEMENTS AND STRUCTURAL ALTERATIONS FOR 
                   TOTALLY DISABLED MEMBERS OF THE ARMED FORCES 
                   BEFORE DISCHARGE OR RELEASE FROM THE ARMED 
                   FORCES.

       Section 1717 of title 38, United States Code, is amended by 
     adding at the end the following new subsection:
       ``(d)(1) In the case of a member of the Armed Forces who, 
     as determined by the Secretary, has a disability permanent in 
     nature incurred or aggravated in the line of duty in the 
     active military, naval, or air service, the Secretary may 
     furnish improvements and structural alterations for such 
     member for such disability or as otherwise described in 
     subsection (a)(2) while such member is hospitalized or 
     receiving outpatient medical care, services, or treatment for 
     such disability if the Secretary determines that such member 
     is likely to be discharged or released from the Armed Forces 
     for such disability.
       ``(2) The furnishing of improvements and alterations under 
     paragraph (1) in connection with the furnishing of medical 
     services described in subparagraph (A) or (B) of subsection 
     (a)(2) shall be subject to the limitation specified in the 
     applicable subparagraph.''.

     SEC. 802. ELIGIBILITY FOR SPECIALLY ADAPTED HOUSING BENEFITS 
                   AND ASSISTANCE FOR MEMBERS OF THE ARMED FORCES 
                   WITH SERVICE-CONNECTED DISABILITIES AND 
                   INDIVIDUALS RESIDING OUTSIDE THE UNITED STATES.

       (a) Eligibility.--Chapter 21 of title 38, United States 
     Code, is amended by inserting after section 2101 the 
     following new section:

     ``Sec. 2101A. Eligibility for benefits and assistance: 
       members of the Armed Forces with service-connected 
       disabilities; individuals residing outside the United 
       States

       ``(a) Members With Service-Connected Disabilities.--(1) The 
     Secretary may provide assistance under this chapter to a 
     member of the Armed Forces serving on active duty who is 
     suffering from a disability that meets applicable criteria 
     for benefits under this chapter if the disability is incurred 
     or aggravated in line of duty in the active military, naval, 
     or air service. Such assistance shall be provided to the same 
     extent as assistance is provided under this chapter to 
     veterans eligible for assistance under this chapter and 
     subject to the same requirements as veterans under this 
     chapter.
       ``(2) For purposes of this chapter, any reference to a 
     veteran or eligible individual shall be treated as a 
     reference to a member of the Armed Forces described in 
     subsection (a) who is similarly situated to the veteran or 
     other eligible individual so referred to.
       ``(b) Benefits and Assistance for Individuals Residing 
     Outside the United States.--(1) Subject to paragraph (2), the 
     Secretary may, at the Secretary's discretion, provide 
     benefits and assistance under this chapter (other than 
     benefits under section 2106 of this title) to any individual 
     otherwise eligible for such benefits and assistance who 
     resides outside the United States.
       ``(2) The Secretary may provide benefits and assistance to 
     an individual under paragraph (1) only if--
       ``(A) the country or political subdivision in which the 
     housing or residence involved is or will be located permits 
     the individual to have or acquire a beneficial property 
     interest (as determined by the Secretary) in such housing or 
     residence; and
       ``(B) the individual has or will acquire a beneficial 
     property interest (as so determined) in such housing or 
     residence.
       ``(c) Regulations.--Benefits and assistance under this 
     chapter by reason of this section shall be provided in 
     accordance with such regulations as the Secretary may 
     prescribe.''.
       (b) Conforming Amendments.--
       (1) Repeal of superseded authority.--Section 2101 of such 
     title is amended--
       (A) by striking subsection (c); and
       (B) by redesignating subsection (d) as subsection (c).
       (2) Limitations on assistance.--Section 2102 of such title 
     is amended--
       (A) in subsection (a)--
       (i) by striking ``veteran'' each place it appears and 
     inserting ``individual''; and
       (ii) in paragraph (3), by striking ``veteran's'' and 
     inserting ``individual's'';
       (B) in subsection (b)(1), by striking ``a veteran'' and 
     inserting ``an individual'';
       (C) in subsection (c)--
       (i) by striking ``a veteran'' and inserting ``an 
     individual''; and
       (ii) by striking ``the veteran'' each place it appears and 
     inserting ``the individual''; and
       (D) in subsection (d), by striking ``a veteran'' each place 
     it appears and inserting ``an individual''.
       (3) Assistance for individuals temporarily residing in 
     housing of family member.--Section 2102A of such title is 
     amended--
       (A) by striking ``veteran'' each place it appears (other 
     than in subsection (b)) and inserting ``individual'';
       (B) in subsection (a), by striking ``veteran's'' each place 
     it appears and inserting ``individual's''; and
       (C) in subsection (b), by striking ``a veteran'' each place 
     it appears and inserting ``an individual''.
       (4) Furnishing of plans and specifications.--Section 2103 
     of such title is amended by striking ``veterans'' both places 
     it appears and inserting ``individuals''.
       (5) Construction of benefits.--Section 2104 of such title 
     is amended--
       (A) in subsection (a), by striking ``veteran'' each place 
     it appears and inserting ``individual''; and
       (B) in subsection (b)--
       (i) in the first sentence, by striking ``A veteran'' and 
     inserting ``An individual'';
       (ii) in the second sentence, by striking ``a veteran'' and 
     inserting ``an individual''; and
       (iii) by striking ``such veteran'' each place it appears 
     and inserting ``such individual''.
       (6) Veterans' mortgage life insurance.--Section 2106 of 
     such title is amended--

[[Page 5263]]

       (A) in subsection (a)--
       (i) by striking ``any eligible veteran'' and inserting 
     ``any eligible individual''; and
       (ii) by striking ``the veterans' '' and inserting ``the 
     individual's'';
       (B) in subsection (b), by striking ``an eligible veteran'' 
     and inserting ``an eligible individual'';
       (C) in subsection (e), by striking ``an eligible veteran'' 
     and inserting ``an individual'';
       (D) in subsection (h), by striking ``each veteran'' and 
     inserting ``each individual'';
       (E) in subsection (i), by striking ``the veteran's'' each 
     place it appears and inserting ``the individual's'';
       (F) by striking ``the veteran'' each place it appears and 
     inserting ``the individual''; and
       (G) by striking ``a veteran'' each place it appears and 
     inserting ``an individual''.
       (7) Heading amendments.--(A) The heading of section 2101 of 
     such title is amended to read as follows:

     ``Sec. 2101. Acquisition and adaptation of housing: eligible 
       veterans''.

       (B) The heading of section 2102A of such title is amended 
     to read as follows:

     ``Sec. 2102A. Assistance for individuals residing temporarily 
       in housing owned by a family member''.

       (8) Clerical amendments.--The table of sections at the 
     beginning of chapter 21 of such title is amended--
       (A) by striking the item relating to section 2101 and 
     inserting the following new item:

``2101. Acquisition and adaptation of housing: eligible veterans.'';
       (B) by inserting after the item relating to section 2101, 
     as so amended, the following new item:

``2101A. Eligibility for benefits and assistance: members of the Armed 
              Forces with service-connected disabilities; individuals 
              residing outside the United States.'';

     and
       (C) by striking the item relating to section 2102A and 
     inserting the following new item:

``2102A. Assistance for individuals residing temporarily in housing 
              owned by a family member.''.

     SEC. 803. SPECIALLY ADAPTED HOUSING ASSISTANCE FOR 
                   INDIVIDUALS WITH SEVERE BURN INJURIES.

       Section 2101 of title 38, United States Code, is amended--
       (1) in subsection (a)(2), by adding at the end the 
     following new subparagraph:
       ``(E) The disability is due to a severe burn injury (as 
     determined pursuant to regulations prescribed by the 
     Secretary).''; and
       (2) in subsection (b)(2)--
       (A) by striking ``either'' and inserting ``any''; and
       (B) by adding at the end the following new subparagraph:
       ``(C) The disability is due to a severe burn injury (as so 
     determined).''.

     SEC. 804. EXTENSION OF ASSISTANCE FOR INDIVIDUALS RESIDING 
                   TEMPORARILY IN HOUSING OWNED BY A FAMILY 
                   MEMBER.

       Section 2102A(e) of title 38, United States Code, is 
     amended by striking ``after the end of the five-year period 
     that begins on the date of the enactment of the Veterans' 
     Housing Opportunity and Benefits Improvement Act of 2006'' 
     and inserting ``after December 31, 2011''.

     SEC. 805. INCREASE IN SPECIALLY ADAPTED HOUSING BENEFITS FOR 
                   DISABLED VETERANS.

       (a) In General.--Section 2102 of title 38, United States 
     Code, is amended--
       (1) in subsection (b)(2), by striking ``$10,000'' and 
     inserting ``$12,000'';
       (2) in subsection (d)--
       (A) in paragraph (1), by striking ``$50,000'' and inserting 
     ``$60,000''; and
       (B) in paragraph (2), by striking ``$10,000'' and inserting 
     ``$12,000''; and
       (3) by adding at the end the following new subsection:
       ``(e)(1) Effective on October 1 of each year (beginning in 
     2009), the Secretary shall increase the amounts described in 
     subsection (b)(2) and paragraphs (1) and (2) of subsection 
     (d) in accordance with this subsection.
       ``(2) The increase in amounts under paragraph (1) to take 
     effect on October 1 of a year shall be by an amount of such 
     amounts equal to the percentage by which--
       ``(A) the residential home cost-of-construction index for 
     the preceding calendar year, exceeds
       ``(B) the residential home cost-of-construction index for 
     the year preceding the year described in subparagraph (A).
       ``(3) The Secretary shall establish a residential home 
     cost-of-construction index for the purposes of this 
     subsection. The index shall reflect a uniform, national 
     average change in the cost of residential home construction, 
     determined on a calendar year basis. The Secretary may use an 
     index developed in the private sector that the Secretary 
     determines is appropriate for purposes of this subsection.''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on July 1, 2008, and shall apply with 
     respect to payments made in accordance with section 2102 of 
     title 38, United States Code, on or after that date.

     SEC. 806. REPORT ON SPECIALLY ADAPTED HOUSING FOR DISABLED 
                   INDIVIDUALS.

       (a) In General.--Not later than December 31, 2008, the 
     Secretary of Veterans Affairs shall submit to the Committee 
     on Veterans' Affairs of the Senate and the Committee on 
     Veterans' Affairs of the House of Representatives a report 
     that contains an assessment of the adequacy of the 
     authorities available to the Secretary under law to assist 
     eligible disabled individuals in acquiring--
       (1) suitable housing units with special fixtures or movable 
     facilities required for their disabilities, and necessary 
     land therefor;
       (2) such adaptations to their residences as are reasonably 
     necessary because of their disabilities; and
       (3) residences already adapted with special features 
     determined by the Secretary to be reasonably necessary as a 
     result of their disabilities.
       (b) Focus on Particular Disabilities.--The report required 
     by subsection (a) shall set forth a specific assessment of 
     the needs of--
       (1) veterans who have disabilities that are not described 
     in subsections (a)(2) and (b)(2) of section 2101 of title 38, 
     United States Code; and
       (2) other disabled individuals eligible for specially 
     adapted housing under chapter 21 of such title by reason of 
     section 2101A of such title (as added by section 802(a) of 
     this Act) who have disabilities that are not described in 
     such subsections.

     SEC. 807. REPORT ON SPECIALLY ADAPTED HOUSING ASSISTANCE FOR 
                   INDIVIDUALS WHO RESIDE IN HOUSING OWNED BY A 
                   FAMILY MEMBER ON PERMANENT BASIS.

       Not later than December 31, 2008, the Secretary of Veterans 
     Affairs shall submit to the Committee on Veterans' Affairs of 
     the Senate and the Committee on Veterans' Affairs of the 
     House of Representatives a report on the advisability of 
     providing assistance under section 2102A of title 38, United 
     States Code, to veterans described in subsection (a) of such 
     section, and to members of the Armed Forces covered by such 
     section 2102A by reason of section 2101A of title 38, United 
     States Code (as added by section 802(a) of this Act), who 
     reside with family members on a permanent basis.

     SEC. 808. REDIRECTION OF INTERNAL REVENUE SERVICE FEES.

       Section 3 under the heading ``Administrative Provisions--
     Internal Revenue Service'' of title I of Public Law 103-329 
     is amended by striking ``The Secretary of the Treasury may 
     spend'' in the second sentence and inserting ``Except with 
     respect to the first $10,000,000,000 in receipts, which shall 
     be deposited in the general fund of the Treasury as 
     miscellaneous receipts for any fiscal year beginning after 
     September 30, 2007, the Secretary of the Treasury may 
     spend''.
                                 ______
                                 
  SA 4485. Mr. SANDERS submitted an amendment intended to be proposed 
by him to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       On page 6, between lines 13 and 14, insert the following:
       (c) Maximum Insured Mortgage Loan Rate.--The annual 
     percentage rate applicable to any loan that is insured under 
     title II of the National Housing Act may not exceed by more 
     than 8 percentage points the rate established under section 
     6621(a)(2) of the Internal Revenue Code of 1986.
                                 ______
                                 
  SA 4486. Ms. SNOWE submitted an amendment intended to be proposed by 
her to the bill H.R. 3221, moving the United States toward greater 
energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       At the end of the bill, add the following:

               TITLE VIII--FEDERAL BOARD OF CERTIFICATION

     SEC. 801. SHORT TITLE.

       This title may be cited as the ``Restore Confidence in 
     Mortgage Securities Act of 2008''.

     SEC. 802. PURPOSE.

       It is the purpose of this title to establish a Federal 
     Board of Certification, which shall certify that the 
     mortgages within a security instrument meet the underlying 
     standards they claim to meet with regards to mortgage 
     characteristics including but not limited to: documentation, 
     loan to value ratios, debt

[[Page 5264]]

     service to income ratios, and borrower credit standards and 
     geographic concentration. The purpose of this certification 
     process is to increase the transparency, predictability and 
     reliability of securitized mortgage products.

     SEC. 803. DEFINITIONS.

       As used in this title--
       (1) the term ``Board'' means the Federal Board of 
     Certification established under this title;
       (2) the term ``mortgage security'' means an investment 
     instrument that represents ownership of an undivided interest 
     in a group of mortgages;
       (3) the term ``insured depository institution'' has the 
     same meaning as in section 3 of the Federal Deposit Insurance 
     Act (12 U.S.C. 1803); and
       (4) the term ``Federal financial institutions regulatory 
     agency'' has the same meaning as in section 1003 of the 
     Federal Financial Institutions Examination Council Act of 
     1978 (12 U.S.C. 3302).

     SEC. 804. VOLUNTARY PARTICIPATION.

       Market participants, including firms that package mortgage 
     loans into mortgage securities, may elect to have their 
     mortgage securities evaluated by the Board.

     SEC. 805. STANDARDS.

       The Board is authorized to promulgate regulations 
     establishing enumerated security standards which the Board 
     shall use to certify mortgage securities. The Board shall 
     promulgate standards which shall certify that the mortgages 
     within a security instrument meet the underlying standards 
     they claim to meet with regards to documentation, loan to 
     value ratios, debt service to income rations and borrower 
     credit standards. The standards should protect settled 
     investor expectations, and increase the transparency, 
     predictability and reliability of securitized mortgage 
     products.

     SEC. 806. COMPOSITION.

       (a) Establishment; Composition.--There is established the 
     Federal Board of Certification, which shall consist of--
       (1) the Comptroller of the Currency;
       (2) the Secretary of Housing and Urban Development;
       (3) a Governor of the Board of Governors of the Federal 
     Reserve System designated by the Chairman of the Board;
       (4) the Undersecretary of the Treasury for Domestic 
     Finance; and
       (5) the Chairman of the Securities and Exchange Commission.
       (b) Chairperson.--The members of the Board shall select the 
     first chairperson of the Board. Thereafter the position of 
     chairperson shall rotate among the members of the Board.
       (c) Term of Office.--The term of each chairperson of the 
     Board shall be 2 years.
       (d) Designation of Officers and Employees.--The members of 
     the Board may, from time to time, designate other officers or 
     employees of their respective agencies to carry out their 
     duties on the Board.
       (e) Compensation and Expenses.--Each member of the Board 
     shall serve without additional compensation, but shall be 
     entitled to reasonable expenses incurred in carrying out 
     official duties as such a member.

     SEC. 807. EXPENSES.

       The costs and expenses of the Board, including the salaries 
     of its employees, shall be paid for by excise fees collected 
     from applicants for security certification from the Board, 
     according to fee scales set by the Board.

     SEC. 808. BOARD RESPONSIBILITIES.

       (a) Establishment of Principles and Standards.--The Board 
     shall establish, by rule, uniform principles and standards 
     and report forms for the regular examination of mortgage 
     securities.
       (b) Development of Uniform Reporting System.--The Board 
     shall develop uniform reporting systems for use by the Board 
     in ascertaining mortgage security risk. The Board shall 
     assess, and publicly publish, how it evaluates and certifies 
     the composition of mortgage securities.
       (c) Affect on Federal Regulatory Agency Research and 
     Development of New Financial Institutions Supervisory 
     Agencies.--Nothing in this title shall be construed to limit 
     or discourage Federal regulatory agency research and 
     development of new financial institutions supervisory methods 
     and tools, nor to preclude the field testing of any 
     innovation devised by any Federal regulatory agency.
       (d) Annual Report.--Not later than April 1 of each year, 
     the Board shall prepare and submit to Congress an annual 
     report covering its activities during the preceding year.
       (e) Reporting Schedule.--The Board shall determine whether 
     it wants to evaluate mortgage securities at issuance, on a 
     regular basis, or upon request.

     SEC. 809. BOARD AUTHORITY.

       (a) Authority of Chairperson.--The chairperson of the Board 
     is authorized to carry out and to delegate the authority to 
     carry out the internal administration of the Board, including 
     the appointment and supervision of employees and the 
     distribution of business among members, employees, and 
     administrative units.
       (b) Use of Personnel, Services, and Facilities of Federal 
     Financial Institutions Regulatory Agencies, and Federal 
     Reserve Banks.--In addition to any other authority conferred 
     upon it by this title, in carrying out its functions under 
     this title, the Board may utilize, with their consent and to 
     the extent practical, the personnel, services, and facilities 
     of the Federal financial institutions regulatory agencies, 
     and Federal Reserve banks, with or without reimbursement 
     therefor.
       (c) Compensation, Authority, and Duties of Officers and 
     Employees; Experts and Consultants.--The Board may--
       (1) subject to the provisions of title 5, United States 
     Code, relating to the competitive service, classification, 
     and General Schedule pay rates, appoint and fix the 
     compensation of such officers and employees as are necessary 
     to carry out the provisions of this title, and to prescribe 
     the authority and duties of such officers and employees; and
       (2) obtain the services of such experts and consultants as 
     are necessary to carry out this title.

     SEC. 810. BOARD ACCESS TO INFORMATION.

       For the purpose of carrying out this title, the Board shall 
     have access to all books, accounts, records, reports, files, 
     memorandums, papers, things, and property belonging to or in 
     use by Federal financial institutions regulatory agencies, 
     including reports of examination of financial institutions, 
     their holding companies, or mortgage lending entities from 
     whatever source, together with work papers and correspondence 
     files related to such reports, whether or not a part of the 
     report, and all without any deletions.

     SEC. 811. REGULATORY REVIEW.

       (a) In General.--Not less frequently than once every 10 
     years, the Board shall conduct a review of all regulations 
     prescribed by the Board, in order to identify outdated or 
     otherwise unnecessary regulatory requirements imposed on 
     insured depository institutions.
       (b) Process.--In conducting the review under subsection 
     (a), the Board shall--
       (1) categorize the regulations described in subsection (a) 
     by type; and
       (2) at regular intervals, provide notice and solicit public 
     comment on a particular category or categories of 
     regulations, requesting commentators to identify areas of the 
     regulations that are outdated, unnecessary, or unduly 
     burdensome.
       (c) Complete Review.--The Board shall ensure that the 
     notice and comment period described in subsection (b)(2) is 
     conducted with respect to all regulations described in 
     subsection (a), not less frequently than once every 10 years.
       (d) Regulatory Response.--The Board shall--
       (1) publish in the Federal Register a summary of the 
     comments received under this section, identifying significant 
     issues raised and providing comment on such issues; and
       (2) eliminate unnecessary regulations to the extent that 
     such action is appropriate.
       (e) Report to Congress.--Not later than 30 days after 
     carrying out subsection (d)(1) of this section, the Board 
     shall submit to the Congress a report, which shall include a 
     summary of any significant issues raised by public comments 
     received by the Board under this section and the relative 
     merits of such issues.

     SEC. 812. LIABILITY.

       Any publication, transmission, or webpage containing an 
     advertisement for or invitation to buy a mortgage security 
     shall include the following notice, in conspicuous type: 
     ``Certification by the Federal Board of Certification can in 
     no way be considered a guarantee of the mortgage security. 
     Certification is merely a judgment by the Federal Board of 
     Certification of the degree of risk offered by the security 
     in question. The Federal Board of Certification is not liable 
     for any actions taken in reliance on such judgment of 
     risk.''.
                                 ______
                                 
  SA 4487. Mr. DORGAN submitted an amendment intended to be proposed to 
amendment SA 4387 submitted by Mr. Dodd (for himself and Mr. Shelby) to 
the bill H.R. 3221, moving the United States toward greater energy 
independence and security, developing innovative new technologies, 
reducing carbon emissions, creating green jobs, protecting consumers, 
increasing clean renewable energy production, and modernizing our 
energy infrastructure, and to amend the Internal Revenue Code of 1986 
to provide tax incentives for the production of renewable energy and 
energy conservation; which was ordered to lie on the table; as follows:

       At the end of title V add the following:

     SEC. 503. ENFORCEMENT.

       (a) In General.--In accordance with section 917 of the 
     Truth in Lending Act (15 U.S.C. 1693o), the Federal Trade 
     Commission shall--
       (1) initiate a rulemaking proceeding within 90 days after 
     the date of enactment of this Act to the extent necessary to 
     implement the amendments made by section 502; and
       (2) initiate a rulemaking proceeding with respect to 
     subprime mortgage lending and nontraditional mortgage loans 
     in accordance with section 553 of title 5, United States 
     Code, notwithstanding section 18 of the Federal Trade 
     Commission Act (15 U.S.C. 57a) or any other provision of law.
       (b) Enforcement by State Attorneys General.--

[[Page 5265]]

       (1) In general.--Except as provided in paragraph (6), a 
     State, as parens patriae, may bring a civil action on behalf 
     of its residents in an appropriate State or district court of 
     the United States to enforce the provisions of the Federal 
     Trade Commission Act or any other Act enforced by the Federal 
     Trade Commission to obtain penalties and relief provided 
     under such Acts whenever the attorney general of the State 
     has reason to believe that the interests of the residents of 
     the State have been or are being threatened or adversely 
     affected by a violation of section 128 of the Truth in 
     Lending Act (15 U.S.C. 1638), as amended by section 502 of 
     this Act, any other provision of that Act or any subprime 
     mortgage lending rule or nontraditional mortgage loan rule 
     promulgated by the Federal Trade Commission.
       (2) Notice.--The State shall serve written notice to the 
     Commission of any civil action under subsection (a) at least 
     60 days prior to initiating such civil action. The notice 
     shall include a copy of the complaint to be filed to initiate 
     such civil action, except that if it is not feasible for the 
     State to provide such prior notice, the State shall provide 
     notice immediately upon instituting such civil action.
       (3) Intervention by ftc.--Upon receiving the notice 
     required by paragraph (2), the Commission may intervene in 
     such civil action and upon intervening--
       (A) be heard on all matters arising in such civil action;
       (B) remove the action to the appropriate United States 
     district courtand
       (C) file petitions for appeal of a decision in such civil 
     action.
       (4) Savings clause.--Nothing in this subsection shall 
     prevent the attorney general of a State from exercising the 
     powers conferred on the attorney general by the laws of such 
     State to conduct investigations or to administer oaths or 
     affirmations or to compel the attendance of witnesses or the 
     production of documentary and other evidence. Nothing in this 
     section shall prohibit the attorney general of a State, or 
     other authorized State officer, from proceeding in State or 
     Federal court on the basis of an alleged violation of any 
     civil or criminal statute of that State.
       (5) Venue; service of process; joinder.--In a civil action 
     brought under paragraph (1)--
       (A) the venue shall be a judicial district in which the 
     lender or a related party operates or is authorized to do 
     business;
       (B) process may be served without regard to the territorial 
     limits of the district or of the State in which the civil 
     action is instituted; and
       (C) a person who participated with a lender or related 
     party to an alleged violation that is being litigated in the 
     civil action may be joined in the civil action without regard 
     to the residence of the person.
       (6) Preemptive action by ftc.--Whenever a civil action or 
     an administrative action has been instituted by or on behalf 
     of the Commission for violation of any provision of law or 
     rule described in paragraph (1), no State may, during the 
     pendency of such action instituted by or on behalf of the 
     Commission, institute a civil action under that paragraph 
     against any defendant named in the complaint in such action 
     for violation of any rule as alleged in such complaint.
       (7) Award of costs and fees.--If the attorney general of a 
     State prevails in any civil action under paragraph (1), the 
     State can recover reasonable costs and attorney fees from the 
     lender or related party.
                                 ______
                                 
  SA 4488. Mrs. McCASKILL submitted an amendment intended to be 
proposed by her to the bill H.R. 3221, moving the United States toward 
greater energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       On page 18, strike line 1 and all that follows through page 
     20, line 24, and insert the following:

     SEC. 122. HOME EQUITY CONVERSION MORTGAGES.

       (a) In General.--Section 255 of the National Housing Act 
     (12 U.S.C. 1715z-20) is amended--
       (1) in subsection (b)(2), insert `` `real estate,' '' after 
     `` `mortgagor','';
       (2) by amending subsection (d)(1) to read as follows:
       ``(1) have been originated by a mortgagee approved by the 
     Secretary;'';
       (3) by amending subsection (d)(2)(B) to read as follows:
       ``(B) has received adequate counseling, as provided in 
     subsection (f), by an independent third party that is not, 
     either directly or indirectly, associated with or compensated 
     by a party involved in-
       ``(i) originating or servicing the mortgage;
       ``(ii) funding the loan underlying the mortgage; or
       ``(iii) the sale of annuities, investments, long-term care 
     insurance, or any other type of financial or insurance 
     product;'';
       (4) in subsection (f)--
       (A) by striking ``(f) Information Services for 
     Mortgagors.--'' and inserting ``(f) Counseling Services and 
     Information for Mortgagors.--''; and
       (B) by amending the matter preceding paragraph (1) to read 
     as follows: ``The Secretary shall provide or cause to be 
     provided adequate counseling for the mortgagor, as described 
     in subsection (d)(2)(B). Such counseling shall be provided by 
     counselors that meet qualification standards and follow 
     uniform counseling protocols. The qualification standards and 
     counseling protocols shall be established by the Secretary 
     within 12 months of the date of enactment of the Reverse 
     Mortgage Proceeds Protection Act. The protocols shall require 
     a qualified counselor to discuss with each mortgagor 
     information which shall include--''
       (5) in subsection (g), by striking ``established under 
     section 203(b)(2)'' and all that follows through ``located'' 
     and inserting ``limitation established under section 
     305(a)(2) of the Federal Home Loan Mortgage Corporation Act 
     for a 1-family residence'';
       (6) in subsection (i)(1)(C), by striking ``limitations'' 
     and inserting ``limitation'';
       (8) by redesignating subsection (m) as subsection (l);
       (9) by amending subsection (l), as so redesignated, to read 
     as follows:
       ``(l) Funding for Counseling.--The Secretary may use a 
     portion of the mortgage insurance premiums collected under 
     the program under this section to adequately fund the 
     counseling and disclosure activities required under 
     subsection (f), including counseling for those homeowners who 
     elect not to take out a home equity conversion mortgage, 
     provided that the use of such funds is based upon accepted 
     actuarial principles.''; and
       (10) by adding at the end the following new subsection:
       ``(m) Authority To Insure Home Purchase Mortgage.--
       ``(1) In general.--Notwithstanding any other provision of 
     this section, the Secretary may insure, upon application by a 
     mortgagee, a home equity conversion mortgage upon such terms 
     and conditions as the Secretary may prescribe, when the home 
     equity conversion mortgage will be used to purchase a 1- to 
     4-family dwelling unit, one unit of which that the mortgagor 
     will occupy as a primary residence, and to provide for any 
     future payments to the mortgagor, based on available equity, 
     as authorized under subsection (d)(9).
       ``(2) Limitation on principal obligation.--A home equity 
     conversion mortgage insured pursuant to paragraph (1) shall 
     involve a principal obligation that does not exceed the 
     dollar amount limitation determined under section 305(a)(2) 
     of the Federal Home Loan Mortgage Corporation Act for a 1-
     family residence.
       ``(n) Requirements on Mortgage Originators.--
       ``(1) In general.--The mortgagee and any other party that 
     participates in the origination of a mortgage to be insured 
     under this section shall--
       ``(A) not participate in, be associated with, or employ any 
     party that participates in or is associated with any other 
     financial or insurance activity; or
       ``(B) demonstrate to the Secretary that the mortgagee or 
     other party maintains, or will maintain, firewalls and other 
     safeguards designed to ensure that--
       ``(i) individuals participating in the origination of the 
     mortgage shall have no involvement with, or incentive to 
     provide the mortgagor with, any other financial or insurance 
     product; and
       ``(ii) the mortgagor shall not be required, directly or 
     indirectly, as a condition of obtaining a mortgage under this 
     section, to purchase any other financial or insurance 
     product.
       ``(2) Approval of other parties.--All parties that 
     participate in the origination of a mortgage to be insured 
     under this section shall be approved by the Secretary.
       ``(o) Prohibition Against Requirements to Purchase 
     Additional Products.--The mortgagee or any other party shall 
     not be required by the mortgagor or any other party to 
     purchase an insurance, annuity, or other additional product 
     as a requirement or condition of eligibility for a mortgage 
     authorized under subsection (c).
       ``(p) Regulations to Protect Elderly Homeowners.--Not later 
     than 12 months after the date of enactment of the Reverse 
     Mortgage Proceeds Protection Act, the Secretary shall, in 
     consultation with other relevant Federal departments and 
     agencies, promulgate regulations to help protect elderly 
     homeowners from the marketing of financial products not in 
     the interest of such homeowners, including the marketing or 
     sale of an annuity or investment associated with obtaining, 
     or as a condition of obtaining, any home equity conversion 
     mortgage. This subsection shall not be construed to preempt, 
     supercede, or alter the authority of any State to regulate 
     the provision of insurance in that State, including the sale 
     or marketing of any insurance product.
       ``(q) Study to Determine Consumer Protections and 
     Underwriting Standards.--

[[Page 5266]]

     The Secretary shall conduct a study to examine and determine 
     appropriate consumer protections and underwriting standards 
     to ensure that the purchase of products referred to in 
     subsection (o) is appropriate for the consumer. In conducting 
     such study, the Secretary shall consult with consumer 
     advocates (including recognized experts in consumer 
     protection), industry representatives, representatives of 
     counseling organizations, and other interested parties.''.
       (b) Mortgages for Cooperatives.--Subsection (b) of section 
     255 of the National Housing Act (12 U.S.C. 1715z-20(b)) is 
     amended--
       (1) in paragraph (4)--
       (A) by inserting ``a first or subordinate mortgage or 
     lien'' before ``on all stock'';
       (B) by inserting ``unit'' after ``dwelling''; and
       (C) by inserting ``a first mortgage or first lien'' before 
     ``on a leasehold''; and
       (2) in paragraph (5), by inserting ``a first or subordinate 
     lien on'' before ``all stock''.
       (c) Limitation on Origination Fees.--Section 255 of the 
     National Housing Act (12 U.S.C. 1715z-20), as amended by the 
     preceding provisions of this section, is further amended by 
     adding at the end the following new subsection:
       ``(r) Limitation on Origination Fees.--The Secretary shall 
     establish limits on the origination fee that may be charged 
     to a mortgagor under a mortgage insured under this section, 
     which limitations shall--
       ``(1) equal 1.5 percent of the maximum claim amount of the 
     mortgage unless adjusted thereafter on the basis of--
       ``(A) the costs to the mortgagor; and
       ``(B) the impact of such fees on the reverse mortgage 
     market;
       ``(2) be subject to a minimum allowable amount;
       ``(3) provide that the origination fee may be fully 
     financed with the mortgage;
       ``(4) include any fees paid to correspondent mortgagees 
     approved by the Secretary; and
       ``(5) have the same effective date as subsection (m)(2) 
     regarding the limitation on principal obligation.''.
                                 ______
                                 
  SA 4489. Mrs. McCASKILL submitted an amendment intended to be 
proposed by her to the bill H.R. 3221, moving the United States toward 
greater energy independence and security, developing innovative new 
technologies, reducing carbon emissions, creating green jobs, 
protecting consumers, increasing clean renewable energy production, and 
modernizing our energy infrastructure, and to amend the Internal 
Revenue Code of 1986 to provide tax incentives for the production of 
renewable energy and energy conservation; which was ordered to lie on 
the table; as follows:

       On page 18, strike line 1 and all that follows through page 
     20, line 24, and insert the following:

     SEC. 122. HOME EQUITY CONVERSION MORTGAGES.

       (a) In General.--Section 255 of the National Housing Act 
     (12 U.S.C. 1715z-20) is amended--
       (1) in subsection (b)(2), insert `` `real estate,' '' after 
     `` `mortgagor','';
       (2) by amending subsection (d)(1) to read as follows:
       ``(1) have been originated by a mortgagee approved by the 
     Secretary;'';
       (3) by amending subsection (d)(2)(B) to read as follows:
       ``(B) has received adequate counseling, as provided in 
     subsection (f), by an independent third party that is not, 
     either directly or indirectly, associated with or compensated 
     by a party involved in--
       ``(i) originating or servicing the mortgage;
       ``(ii) funding the loan underlying the mortgage; or
       ``(iii) the sale of annuities, investments, long-term care 
     insurance, or any other type of financial or insurance 
     product;'';
       (4) in subsection (f)--
       (A) by striking ``(f) Information Services for 
     Mortgagors.--'' and inserting ``(f) Counseling Services and 
     Information for Mortgagors.--''; and
       (B) by amending the matter preceding paragraph (1) to read 
     as follows: ``The Secretary shall provide or cause to be 
     provided adequate counseling for the mortgagor, as described 
     in subsection (d)(2)(B). Such counseling shall be provided by 
     counselors that meet qualification standards and follow 
     uniform counseling protocols. The qualification standards and 
     counseling protocols shall be established by the Secretary 
     within 12 months of the date of enactment of the Reverse 
     Mortgage Proceeds Protection Act. The protocols shall require 
     a qualified counselor to discuss with each mortgagor 
     information which shall include--''
       (5) in subsection (g), by striking ``established under 
     section 203(b)(2)'' and all that follows through ``located'' 
     and inserting ``limitation established under section 
     305(a)(2) of the Federal Home Loan Mortgage Corporation Act 
     for a 1-family residence'';
       (6) in subsection (i)(1)(C), by striking ``limitations'' 
     and inserting ``limitation'';
       (7) by striking subsection (l);
       (8) by redesignating subsection (m) as subsection (l);
       (9) by amending subsection (l), as so redesignated, to read 
     as follows:
       ``(l) Funding for Counseling.--The Secretary may use a 
     portion of the mortgage insurance premiums collected under 
     the program under this section to adequately fund the 
     counseling and disclosure activities required under 
     subsection (f), including counseling for those homeowners who 
     elect not to take out a home equity conversion mortgage, 
     provided that the use of such funds is based upon accepted 
     actuarial principles.''; and
       (10) by adding at the end the following new subsection:
       ``(m) Authority To Insure Home Purchase Mortgage.--
       ``(1) In general.--Notwithstanding any other provision of 
     this section, the Secretary may insure, upon application by a 
     mortgagee, a home equity conversion mortgage upon such terms 
     and conditions as the Secretary may prescribe, when the home 
     equity conversion mortgage will be used to purchase a 1- to 
     4-family dwelling unit, one unit of which that the mortgagor 
     will occupy as a primary residence, and to provide for any 
     future payments to the mortgagor, based on available equity, 
     as authorized under subsection (d)(9).
       ``(2) Limitation on principal obligation.--A home equity 
     conversion mortgage insured pursuant to paragraph (1) shall 
     involve a principal obligation that does not exceed the 
     dollar amount limitation determined under section 305(a)(2) 
     of the Federal Home Loan Mortgage Corporation Act for a 1-
     family residence.
       ``(n) Requirements on Mortgage Originators.--
       ``(1) In general.--The mortgagee and any other party that 
     participates in the origination of a mortgage to be insured 
     under this section shall--
       ``(A) not participate in, be associated with, or employ any 
     party that participates in or is associated with any other 
     financial or insurance activity; or
       ``(B) demonstrate to the Secretary that the mortgagee or 
     other party maintains, or will maintain, firewalls and other 
     safeguards designed to ensure that--
       ``(i) individuals participating in the origination of the 
     mortgage shall have no involvement with, or incentive to 
     provide the mortgagor with, any other financial or insurance 
     product; and
       ``(ii) the mortgagor shall not be required, directly or 
     indirectly, as a condition of obtaining a mortgage under this 
     section, to purchase any other financial or insurance 
     product.
       ``(2) Approval of other parties.--All parties that 
     participate in the origination of a mortgage to be insured 
     under this section shall be approved by the Secretary.
       ``(o) Prohibition Against Requirements to Purchase 
     Additional Products.--The mortgagee or any other party shall 
     not be required by the mortgagor or any other party to 
     purchase an insurance, annuity, or other additional product 
     as a requirement or condition of eligibility for a mortgage 
     authorized under subsection (c).
       ``(p) Regulations to Protect Elderly Homeowners.--Not later 
     than 12 months after the date of enactment of the Reverse 
     Mortgage Proceeds Protection Act, the Secretary shall, in 
     consultation with other relevant Federal departments and 
     agencies, promulgate regulations to help protect elderly 
     homeowners from the marketing of financial products not in 
     the interest of such homeowners, including the marketing or 
     sale of an annuity or investment associated with obtaining, 
     or as a condition of obtaining, any home equity conversion 
     mortgage. This subsection shall not be construed to preempt, 
     supercede, or alter the authority of any State to regulate 
     the provision of insurance in that State, including the sale 
     or marketing of any insurance product.
       ``(q) Study to Determine Consumer Protections and 
     Underwriting Standards.--The Secretary shall conduct a study 
     to examine and determine appropriate consumer protections and 
     underwriting standards to ensure that the purchase of 
     products referred to in subsection (o) is appropriate for the 
     consumer. In conducting such study, the Secretary shall 
     consult with consumer advocates (including recognized experts 
     in consumer protection), industry representatives, 
     representatives of counseling organizations, and other 
     interested parties.''.
       (b) Mortgages for Cooperatives.--Subsection (b) of section 
     255 of the National Housing Act (12 U.S.C. 1715z-20(b)) is 
     amended--
       (1) in paragraph (4)--
       (A) by inserting ``a first or subordinate mortgage or 
     lien'' before ``on all stock'';
       (B) by inserting ``unit'' after ``dwelling''; and
       (C) by inserting ``a first mortgage or first lien'' before 
     ``on a leasehold''; and
       (2) in paragraph (5), by inserting ``a first or subordinate 
     lien on'' before ``all stock''.
       (c) Limitation on Origination Fees.--Section 255 of the 
     National Housing Act (12 U.S.C. 1715z-20), as amended by the 
     preceding provisions of this section, is further amended by 
     adding at the end the following new subsection:

[[Page 5267]]

       ``(r) Limitation on Origination Fees.--The Secretary shall 
     establish limits on the origination fee that may be charged 
     to a mortgagor under a mortgage insured under this section, 
     which limitations shall--
       ``(1) equal 1.5 percent of the maximum claim amount of the 
     mortgage unless adjusted thereafter on the basis of--
       ``(A) the costs to the mortgagor; and
       ``(B) the impact of such fees on the reverse mortgage 
     market;
       ``(2) be subject to a minimum allowable amount;
       ``(3) provide that the origination fee may be fully 
     financed with the mortgage;
       ``(4) include any fees paid to correspondent mortgagees 
     approved by the Secretary; and
       ``(5) have the same effective date as subsection (m)(2) 
     regarding the limitation on principal obligation.''.
                                 ______
                                 
  SA 4490. Mr. HAGEL (for himself and Mr. Sununu) submitted an 
amendment intended to be proposed by him to the bill H.R. 3221, moving 
the United States toward greater energy independence and security, 
developing innovative new technologies, reducing carbon emissions, 
creating green jobs, protecting consumers, increasing clean renewable 
energy production, and modernizing our energy infrastructure, and to 
amend the Internal Revenue Code of 1986 to provide tax incentives for 
the production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       At the end, add the following:

             DIVISION B--FEDERAL HOUSING ENTERPRISE REFORM

     SECTION 2001. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Division may be cited as the 
     ``Federal Housing Enterprise Regulatory Reform Act of 2008''.
       (b) Table of Contents.--The table of contents for this 
     Division is as follows:

             DIVISION 2--FEDERAL HOUSING ENTERPRISE REFORM

Sec. 2001. Short title; table of contents.
Sec. 2002. Definitions.

              TITLE I--REFORM OF REGULATION OF ENTERPRISES

      Subtitle A--Improvement of Safety and Soundness Supervision

Sec. 2101. Establishment of the Federal Housing Enterprise Regulatory 
              Agency.
Sec. 2102. Duties and authorities of Director.
Sec. 2103. Federal Housing Enterprise Board.
Sec. 2104. Authority to require reports by regulated entities.
Sec. 2105. Examiners and accountants; authority to contract for reviews 
              of regulated entities.
Sec. 2106. Assessments.
Sec. 2107. Regulations and orders.
Sec. 2108. Prudential management and operations standards.
Sec. 2109. Capital levels and holdings.
Sec. 2110. Risk-Based capital test for enterprises.
Sec. 2111. Registration of enterprise securities.
Sec. 2112. Limit on golden parachutes.
Sec. 2113. Reporting of fraudulent loans.

             Subtitle B--Improvement of Mission Supervision

Sec. 2121. Transfer of program approval and housing goal oversight.
Sec. 2122. Review of enterprise products.
Sec. 2123. Monitoring and enforcing compliance with housing goals.
Sec. 2124. Assumption by Director of other HUD responsibilities.
Sec. 2125. Administrative and judicial enforcement proceedings.
Sec. 2126. Conforming loan limits.
Sec. 2127. Reporting of mortgage data; housing goals.
Sec. 2128. Duty to serve underserved markets.
Sec. 2129. Home purchase goal.

                  Subtitle C--Prompt Corrective Action

Sec. 2141. Critical capital levels.
Sec. 2142. Capital classifications.
Sec. 2143. Supervisory actions applicable to undercapitalized regulated 
              entities.
Sec. 2144. Supervisory actions applicable to significantly 
              undercapitalized regulated entities.
Sec. 2145. Authority over critically undercapitalized regulated 
              entities.

                    Subtitle D--Enforcement Actions

Sec. 2151. Cease-and-desist proceedings.
Sec. 2152. Temporary cease-and-desist proceedings.
Sec. 2153. Removal and prohibition authority.
Sec. 2154. Enforcement and jurisdiction.
Sec. 2155. Civil money penalties.
Sec. 2156. Criminal penalty.
Sec. 2157. Notice after separation from service.
Sec. 2158. Subpoena authority.

                     Subtitle E--General Provisions

Sec. 2161. Conforming and technical amendments.
Sec. 2162. Presidentially appointed directors of enterprises.
Sec. 2163. Effective date.

                   TITLE II--FEDERAL HOME LOAN BANKS

Sec. 2201. Directors.
Sec. 2202. Definitions.
Sec. 2203. Agency oversight of Federal home loan banks.
Sec. 2204. Federal Home Loan Bank Finance Facility.
Sec. 2205. Exclusion from certain securities reporting requirements.
Sec. 2206. Mergers.
Sec. 2207. Authority to reduce districts.
Sec. 2208. Management of home loan banks.

TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFHEO AND 
                   THE FEDERAL HOUSING FINANCE BOARD

                           Subtitle A--OFHEO

Sec. 2301. Abolishment of OFHEO.
Sec. 2302. Continuation and coordination of certain regulations.
Sec. 2303. Transfer and rights of employees of OFHEO.
Sec. 2304. Transfer of property and facilities.

               Subtitle B--Federal Housing Finance Board

Sec. 2311. Abolishment of the Federal Housing Finance Board.
Sec. 2312. Continuation and coordination of certain regulations.
Sec. 2313. Transfer and rights of employees of the Federal Housing 
              Finance Board.
Sec. 2314. Transfer of property and facilities.

                     TITLE IV--STUDIES AND REPORTS

Sec. 2401. Study and report on Basel II and enterprise debt.
Sec. 2402. Affordable housing audits.
Sec. 2403. Report on insured depository institution holdings of 
              regulated entity debt and mortgage-backed securities.
Sec. 2404. Report on risk-based capital levels.
Sec. 2405. Report on resources and allocations.
Sec. 2406. Study and report on guarantee fees.
Sec. 2407. Report on conforming loan limits.
Sec. 2408. Reviews and studies relating to enterprises and related 
              foundations.
Sec. 2409. Recommendations.

     SEC. 2002. DEFINITIONS.

       (a) Federal Safety and Soundness Act Definitions.--Section 
     1303 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4502) is amended--
       (1) in each of paragraphs (8), (9), (10), and (19), by 
     striking ``Secretary'' each place that term appears and 
     inserting ``Director'';
       (2) in paragraph (14), by striking ``Office of Federal 
     Housing Enterprise Oversight of the Department of Housing and 
     Urban Development'' and inserting ``Federal Housing 
     Enterprise Regulatory Agency'';
       (3) by redesignating paragraphs (16) through (19) as 
     paragraphs (22) through (25), respectively;
       (4) by striking paragraph (15) and inserting the following:
       ``(21) Regulated entity.--The term `regulated entity' 
     means--
       ``(A) the Federal National Mortgage Association and any 
     affiliate thereof;
       ``(B) the Federal Home Loan Mortgage Corporation and any 
     affiliate thereof; and
       ``(C) any Federal Home Loan Bank.'';
       (5) by striking paragraph (13);
       (6) by redesignating paragraph (7) as paragraph (13);
       (7) by redesignating paragraphs (11), (12), and (14) as 
     paragraphs (18) through (20), respectively;
       (8) by striking paragraphs (8) through (10) and inserting 
     the following:
       ``(15) Low-income.--The term `low-income' means a family 
     income that is less than 50 percent of the area median 
     income, or a family income that is less than 50 percent of 
     the area median income.
       ``(16) Median income.--The term `area median income' 
     means--
       ``(A) the median family income for a metropolitan 
     statistical area (as designated under 13 U.S.C. 421), if the 
     family is located in a metropolitan statistical area; or
       ``(B) the statewide nonmetropolitan median family income, 
     if the family is located outside a metropolitan statistical 
     area.
       ``(17) Moderate-income.--The term `moderate-income' means 
     an individual income that is at least 50 percent and less 
     than 80 percent of the area median income, or a median family 
     income that is at least 50 percent and not more than 80 
     percent of the area median income.'';
       (9) in paragraph (5)--
       (A) by striking ``(5)'' and inserting ``(9)''; and
       (B) by striking ``Office of Federal Housing Enterprise 
     Oversight of the Department of Housing and Urban 
     Development'' and inserting ``Federal Housing Enterprise 
     Regulatory Agency'';
       (10) by redesignating paragraph (6) as paragraph (10);
       (11) by redesignating paragraphs (2) through (4) as 
     paragraphs (5) through (7), respectively;
       (12) by inserting after paragraph (7), as redesignated, the 
     following:
       ``(8) Default; in danger of default.--
       ``(A) Default.--The term `default' means, with respect to a 
     regulated entity, any adjudication or other official 
     determination by

[[Page 5268]]

     any court of competent jurisdiction, or the Agency, pursuant 
     to which a conservator, receiver, limited-life regulated 
     entity, or legal custodian is appointed for a regulated 
     entity.
       ``(B) In danger of default.--The term `in danger of 
     default' means a regulated entity with respect to which--
       ``(i) in the opinion of the Agency--

       ``(I) the regulated entity is not likely to be able to pay 
     the obligations of the regulated entity in the normal course 
     of business; or
       ``(II) the regulated entity has incurred or is likely to 
     incur losses that will deplete all or substantially all of 
     its capital; and

       ``(ii) there is no reasonable prospect that the capital of 
     the regulated entity will be replenished.'';
       (13) by inserting after paragraph (1) the following:
       ``(2) Agency; director.--The term--
       ``(A) `Agency' means the Federal Housing Enterprise 
     Regulatory Agency established under section 1311; and
       ``(B) `Director' means the Director of the Agency, 
     appointed under section 1312;
       ``(3) Authorizing statutes.--The term `authorizing 
     statutes' means--
       ``(A) the Federal National Mortgage Association Charter 
     Act;
       ``(B) the Federal Home Loan Mortgage Corporation Act; and
       ``(C) the Federal Home Loan Bank Act.
       ``(4) Board.--The term `Board' means the Federal Housing 
     Enterprise Board established under section 1313A.'';
       (14) by inserting after paragraph (10), as redesignated, 
     the following:
       ``(11) Entity-affiliated party.--The term `entity-
     affiliated party' means--
       ``(A) any director, officer, employee, or controlling 
     stockholder of, or agent for, a regulated entity;
       ``(B) any shareholder, affiliate, consultant, or joint 
     venture partner of a regulated entity, and any other person, 
     as determined by the Director (by regulation or on a case-by-
     case basis) that participates in the conduct of the affairs 
     of a regulated entity, provided that a member of a Federal 
     Home Loan Bank shall not be deemed to have participated in 
     the affairs of that Bank solely by virtue of being a 
     shareholder of, and obtaining advances from, that Bank;
       ``(C) any independent contractor for a regulated entity 
     (including any attorney, appraiser, or accountant), if--
       ``(i) the independent contractor knowingly or recklessly 
     participates in--

       ``(I) any violation of any law or regulation;
       ``(II) any breach of fiduciary duty; or
       ``(III) any unsafe or unsound practice; and

       ``(ii) such violation, breach, or practice caused, or is 
     likely to cause, more than a minimal financial loss to, or a 
     significant adverse effect on, the regulated entity; and
       ``(D) any not-for-profit corporation that receives its 
     principal funding, on an ongoing basis, from any regulated 
     entity; and
       ``(E) the Finance Facility.
       ``(12) Finance facility.--The term `Finance Facility' means 
     the Federal Home Loan Bank Finance Facility established under 
     section 11A of the Federal Home Loan Bank Act.
       ``(13) Limited-life regulated entity.--The term `limited-
     life regulated entity' means an entity established by the 
     Agency under section 1367(i) with respect to a Federal Home 
     Loan Bank in default or in danger of default or with respect 
     to an enterprise in default or in danger of default.'';
       (15) in paragraph (25), as so redesignated by this section, 
     by striking ``60'' each place that term appears and inserting 
     ``30''; and
       (16) by adding at the end the following:
       ``(26) Upper- and middle-income.--
       ``(A) Upper-income.--The term `upper-income' means a family 
     income that is 120 percent of the area median income or 
     greater.
       ``(B) Middle-income.--The term `middle-income' means a 
     family income that is not less than 80 percent but less than 
     120 percent of the area median income, or a median family 
     income that is at least 80 percent and not more than 120 
     percent.
       ``(27) Violation.--The term `violation' includes any action 
     (alone or in combination with another or others) for or 
     toward causing, bringing about, participating in, counseling, 
     or aiding or abetting a violation.''.
       (b) References in This Division.--As used in this Division, 
     unless otherwise specified--
       (1) the term ``Agency'' means the Federal Housing 
     Enterprise Regulatory Agency;
       (2) the term ``Director'' means the Director of the Agency; 
     and
       (3) the terms ``enterprise'', ``Finance Facility'', 
     ``regulated entity'', and ``authorizing statutes'' have the 
     same meanings as in section 1303 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992, as 
     amended by this Division.

              TITLE I--REFORM OF REGULATION OF ENTERPRISES

      Subtitle A--Improvement of Safety and Soundness Supervision

     SEC. 2101. ESTABLISHMENT OF THE FEDERAL HOUSING ENTERPRISE 
                   REGULATORY AGENCY.

       The Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by 
     striking sections 1311 and 1312 and inserting the following:

     ``SEC. 1311. ESTABLISHMENT OF THE FEDERAL HOUSING ENTERPRISE 
                   REGULATORY AGENCY.

       ``(a) Establishment.--There is established the Federal 
     Housing Enterprise Regulatory Agency, which shall be an 
     independent agency of the Federal Government.
       ``(b) General Supervisory and Regulatory Authority.--
       ``(1) In general.--Each regulated entity shall, to the 
     extent provided in this title, be subject to the supervision 
     and regulation of the Agency.
       ``(2) Authority over fannie mae, freddie mac, the federal 
     home loan banks, and the finance facility.--The Director 
     shall have general regulatory authority over each regulated 
     entity and the Finance Facility, and shall exercise such 
     general regulatory authority, including such duties and 
     authorities set forth under section 1313, to ensure that the 
     purposes of this Act, the authorizing statutes, and any other 
     applicable law are carried out.
       ``(c) Savings Provision.--The authority of the Director to 
     take actions under subtitles B and C shall not in any way 
     limit the general supervisory and regulatory authority 
     granted to the Director under subsection (b).

     ``SEC. 1312. DIRECTOR.

       ``(a) Establishment of Position.--There is established the 
     position of the Director of the Agency, who shall be the head 
     of the Agency.
       ``(b) Appointment; Term.--
       ``(1) Appointment.--The Director shall be appointed by the 
     President, by and with the advice and consent of the Senate, 
     from among individuals who are citizens of the United States, 
     have a demonstrated understanding of financial management or 
     oversight, and have a demonstrated understanding of capital 
     markets, including the mortgage securities markets and 
     housing finance.
       ``(2) Term.--The Director shall be appointed for a term of 
     6 years, unless removed before the end of such term for cause 
     by the President.
       ``(3) Vacancy.--A vacancy in the position of Director that 
     occurs before the expiration of the term for which a Director 
     was appointed shall be filled in the manner established under 
     paragraph (1), and the Director appointed to fill such 
     vacancy shall be appointed only for the remainder of such 
     term.
       ``(4) Service after end of term.--An individual may serve 
     as the Director after the expiration of the term for which 
     appointed until a successor has been appointed.
       ``(5) Transitional provision.--Notwithstanding paragraphs 
     (1) and (2), during the period beginning on the effective 
     date of the Federal Housing Enterprise Regulatory Reform Act 
     of 2008, and ending on the date on which the Director is 
     appointed and confirmed, the person serving as the Director 
     of the Office of Federal Housing Enterprise Oversight of the 
     Department of Housing and Urban Development on that effective 
     date shall act for all purposes as, and with the full powers 
     of, the Director.
       ``(c) Deputy Director of the Division of Enterprise 
     Regulation.--
       ``(1) In general.--The Agency shall have a Deputy Director 
     of the Division of Enterprise Regulation, who shall be 
     designated by the Director from among individuals who are 
     citizens of the United States, have a demonstrated 
     understanding of financial management or oversight, and have 
     a demonstrated understanding of mortgage securities markets 
     and housing finance.
       ``(2) Functions.--The Deputy Director of the Division of 
     Enterprise Regulation shall have such functions, powers, and 
     duties with respect to the oversight of the enterprises as 
     the Director shall prescribe.
       ``(d) Deputy Director of the Division of Federal Home Loan 
     Bank Regulation.--
       ``(1) In general.--The Agency shall have a Deputy Director 
     of the Division of Federal Home Loan Bank Regulation, who 
     shall be designated by the Director from among individuals 
     who are citizens of the United States, have a demonstrated 
     understanding of financial management or oversight, and have 
     a demonstrated understanding of the Federal Home Loan Bank 
     System and housing finance.
       ``(2) Functions.--The Deputy Director of the Division of 
     Federal Home Loan Bank Regulation shall have such functions, 
     powers, and duties with respect to the oversight of the 
     Federal Home Loan Banks as the Director shall prescribe.
       ``(e) Deputy Director for Housing Mission and Goals.--
       ``(1) In general.--The Agency shall have a Deputy Director 
     for Housing Mission and Goals, who shall be designated by the 
     Director from among individuals who are citizens of the 
     United States, and have a demonstrated understanding of the 
     housing markets and housing finance.
       ``(2) Functions.--The Deputy Director for Housing Mission 
     and Goals shall have such functions, powers, and duties with 
     respect to the oversight of the housing mission and goals of 
     the regulated entities as the Director shall prescribe.
       ``(f) Acting Director.--In the event of the death, 
     resignation, sickness, or absence of the Director, the 
     President shall designate either the Deputy Director of the 
     Division of Enterprise Regulation, the Deputy Director of the 
     Division of Federal Home Loan Bank Regulation, or the Deputy 
     Director for Housing Mission and Goals, to serve as acting 
     Director until the return of the Director, or the

[[Page 5269]]

     appointment of a successor pursuant to subsection (b).
       ``(g) Limitations.--The Director and each of the Deputy 
     Directors may not--
       ``(1) have any direct or indirect financial interest in any 
     regulated entity or entity-affiliated party;
       ``(2) hold any office, position, or employment in any 
     regulated entity or entity-affiliated party; or
       ``(3) have served as an executive officer or director of 
     any regulated entity or entity-affiliated party at any time 
     during the 3-year period preceding the date of appointment of 
     such individual as Director or Deputy Director.''.

     SEC. 2102. DUTIES AND AUTHORITIES OF DIRECTOR.

       (a) In General.--Section 1313 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4513) is amended to read as follows:

     ``SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR.

       ``(a) Duties.--
       ``(1) Principal duties.--The principal duties of the 
     Director shall be--
       ``(A) to oversee the prudential operations of each 
     regulated entity; and
       ``(B) to ensure that--
       ``(i) each regulated entity operates in a safe and sound 
     manner, including maintenance of adequate capital and 
     internal controls;
       ``(ii) the operations and activities of each regulated 
     entity foster liquid, efficient, competitive, and resilient 
     national housing finance markets (including activities 
     relating to mortgages on housing for low- and moderate-income 
     families involving a reasonable economic return that may be 
     less than the return earned on other activities);
       ``(iii) each regulated entity complies with this title and 
     the rules, regulations, guidelines, and orders issued under 
     this title and the authorizing statutes;
       ``(iv) each regulated entity carries out its statutory 
     mission only through activities that are authorized under and 
     consistent with this title and the authorizing statutes;
       ``(v) the activities of each regulated entity and the 
     manner in which such regulated entity is operated are 
     consistent with the public interest;
       ``(vi) each regulated entity remains adequately 
     capitalized, after due consideration of the risk to such 
     regulated entity; and
       ``(vii) in the case of the Federal Home Loan Banks, they 
     provide funds to community financial institutions for small 
     businesses, small farms, and small agricultural businesses 
     and accept as collateral whole interests in such obligations.
       ``(2) Scope of authority.--The authority of the Director 
     shall include the authority--
       ``(A) to review and, if warranted based on the principle 
     duties described in paragraph (1), reject any acquisition or 
     transfer of a controlling interest in a regulated entity; and
       ``(B) to exercise such incidental powers as may be 
     necessary or appropriate to fulfill the duties and 
     responsibilities of the Director in the supervision and 
     regulation of each regulated entity.
       ``(b) Delegation of Authority.--The Director may delegate 
     to officers and employees of the Agency any of the functions, 
     powers, or duties of the Director, as the Director considers 
     appropriate.
       ``(c) Litigation Authority.--
       ``(1) In general.--In enforcing any provision of this 
     title, any regulation or order prescribed under this title, 
     or any other provision of law, rule, regulation, or order, or 
     in any other action, suit, or proceeding to which the 
     Director is a party or in which the Director is interested, 
     and in the administration of conservatorships and 
     receiverships, the Director may act in the Director's own 
     name and through the Director's own attorneys.
       ``(2) Subject to suit.--Except as otherwise provided by 
     law, the Director shall be subject to suit (other than suits 
     on claims for money damages) by a regulated entity with 
     respect to any matter under this title or any other 
     applicable provision of law, rule, order, or regulation under 
     this title, in the United States district court for the 
     judicial district in which the regulated entity has its 
     principle place of business, or in the United States District 
     Court for the District of Columbia, and the Director may be 
     served with process in the manner prescribed by the Federal 
     Rules of Civil Procedure.''.
       (b) Independence in Congressional Testimony and 
     Recommendations.--Section 111 of Public Law 93-495 (12 U.S.C. 
     250) is amended by striking ``the Federal Housing Finance 
     Board'' and inserting ``the Director of the Federal Housing 
     Enterprise Regulatory Agency''.

     SEC. 2103. FEDERAL HOUSING ENTERPRISE BOARD.

       (a) In General.--The Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 
     amended by inserting after section 1313 the following:

     ``SEC. 1313A. FEDERAL HOUSING ENTERPRISE BOARD.

       ``(a) In General.--There is established the Federal Housing 
     Enterprise Board, which shall advise the Director with 
     respect to overall strategies and policies in carrying out 
     the duties of the Director under this title.
       ``(b) Limitations.--The Board may not exercise any 
     executive authority, and the Director may not delegate to the 
     Board any of the functions, powers, or duties of the 
     Director.
       ``(c) Composition.--The Board shall be comprised of 4 
     members, of whom--
       ``(1) 1 member shall be the Secretary of the Treasury;
       ``(2) 1 member shall be the Secretary of Housing and Urban 
     Development;
       ``(3) 1 member shall be the Chairman of the Securities and 
     Exchange Commission; and
       ``(4) 1 member shall be the Director, who shall serve as 
     the Chairperson of the Board.
       ``(d) Meetings.--
       ``(1) In general.--The Board shall meet upon notice by the 
     Director, but in no event shall the Board meet less 
     frequently than once every 3 months.
       ``(2) Special meetings.--Either the Secretary of the 
     Treasury, the Secretary of Housing and Urban Development, or 
     the Chairman of the Securities and Exchange Commission may, 
     upon giving written notice to the Director, require a special 
     meeting of the Board.
       ``(e) Testimony.--On an annual basis, the Board shall 
     testify before Congress regarding--
       ``(1) the safety and soundness of the regulated entities;
       ``(2) any material deficiencies in the conduct of the 
     operations of the regulated entities;
       ``(3) the overall operational status of the regulated 
     entities;
       ``(4) an evaluation of the performance of the regulated 
     entities in carrying out their respective missions;
       ``(5) operations, resources, and performance of the Agency; 
     and
       ``(6) such other matters relating to the Agency and its 
     fulfillment of its mission, as the Board determines 
     appropriate.''.
       (b) Annual Report of the Director.--Section 1319B(a) of the 
     Federal Housing Enterprises Financial Safety and Soundness 
     Act of 1992 (12 U.S.C. 4521(a)) is amended--
       (1) by striking ``enterprise'' each place that term appears 
     and inserting ``regulated entity'';
       (2) by striking ``enterprises'' each place that term 
     appears and inserting ``regulated entities'';
       (3) in paragraph (3), by striking ``; and'' and inserting a 
     semicolon;
       (4) in paragraph (4), by striking ``1994.'' and inserting 
     ``1994; and''; and
       (5) by adding at the end the following:
       ``(5) the assessment of the Board or any of its members 
     with respect to--
       ``(A) the safety and soundness of the regulated entities;
       ``(B) any material deficiencies in the conduct of the 
     operations of the regulated entities;
       ``(C) the overall operational status of the regulated 
     entities; and
       ``(D) an evaluation of the performance of the regulated 
     entities in carrying out their respective missions;
       ``(6) operations, resources, and performance of the Agency; 
     and
       ``(7) such other matters relating to the Agency and the 
     fulfillment of its mission.''.

     SEC. 2104. AUTHORITY TO REQUIRE REPORTS BY REGULATED 
                   ENTITIES.

       (a) In General.--Section 1314 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4514) is amended--
       (1) in the section heading, by striking ``ENTERPRISES'' and 
     inserting ``REGULATED ENTITIES'';
       (2) by striking ``an enterprise'' each place that term 
     appears and inserting ``a regulated entity'';
       (3) by striking ``the enterprise'' and inserting ``the 
     regulated entity'';
       (4) in subsection (a)--
       (A) by striking the subsection heading and all that follows 
     through ``and operations'' in paragraph (1) and inserting the 
     following:
       ``(a) Regular and Special Reports.--
       ``(1) Regular reports.--The Director may require, by 
     general or specific orders, a regulated entity to submit 
     regular reports, including financial statements determined on 
     a fair value basis, on the condition (including financial 
     condition), management, activities, or operations of the 
     regulated entity, as the Director considers appropriate''; 
     and
       (B) in paragraph (2)--
       (i) by inserting ``, by general or specific orders,'' after 
     ``may also require''; and
       (ii) by striking ``whenever'' and inserting ``on any of the 
     topics specified in paragraph (1) or any other relevant 
     topics, if''; and
       (5) by adding at the end the following:
       ``(c) Penalties for Failure To Make Reports.--
       ``(1) Violations.--It shall be a violation of this section 
     for any regulated entity--
       ``(A) to fail to make, obtain, transmit, or publish any 
     report or information required by the Director under this 
     section, section 309(k) of the Federal National Mortgage 
     Association Charter Act, or section 307(c) of the Federal 
     Home Loan Mortgage Corporation Act, within the period of time 
     specified in such provision of law or otherwise by the 
     Director; or
       ``(B) to submit or publish any false or misleading report 
     or information under this section.

[[Page 5270]]

       ``(2) Penalties.--
       ``(A) Tier 1.--
       ``(i) In general.--A violation described in paragraph (1) 
     shall be subject to a penalty of not more than $2,000 for 
     each day during which such violation continues, in any case 
     in which--

       ``(I) the subject regulated entity maintains procedures 
     reasonably adapted to avoid any inadvertent error and the 
     violation was unintentional and a result of such an error; or
       ``(II) the violation was an inadvertent transmittal or 
     publication of any report which was minimally late.

       ``(ii) Burden of proof.--For purposes of this subparagraph, 
     the regulated entity shall have the burden of proving that 
     the error was inadvertent or that a report was inadvertently 
     transmitted or published late.
       ``(B) Tier 2.--A violation described in paragraph (1) shall 
     be subject to a penalty of not more than $20,000 for each day 
     during which such violation continues or such false or 
     misleading information is not corrected, in any case that is 
     not addressed in subparagraph (A) or (C).
       ``(C) Tier 3.--A violation described in paragraph (1) shall 
     be subject to a penalty of not more than $2,000,000 per day 
     for each day during which such violation continues or such 
     false or misleading information is not corrected, in any case 
     in which the subject regulated entity committed such 
     violation knowingly or with reckless disregard for the 
     accuracy of any such information or report.
       ``(3) Assessments.--Any penalty imposed under this 
     subsection shall be in lieu of a penalty under section 1376, 
     but shall be assessed and collected by the Director in the 
     manner provided in section 1376 for penalties imposed under 
     that section, and any such assessment (including the 
     determination of the amount of the penalty) shall be 
     otherwise subject to the provisions of section 1376.
       ``(4) Hearing.--A regulated entity against which a penalty 
     is assessed under this section shall be afforded an agency 
     hearing if the regulated entity submits a request for a 
     hearing not later than 20 days after the date of the issuance 
     of the notice of assessment. Section 1374 shall apply to any 
     such proceedings.''.
       (b) Conforming Amendment.--The Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 (12 U.S.C. 4501 et 
     seq.) is amended by striking sections 1327 and 1328.

     SEC. 2105. EXAMINERS AND ACCOUNTANTS; AUTHORITY TO CONTRACT 
                   FOR REVIEWS OF REGULATED ENTITIES.

       (a) In General.--Section 1317 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4517) is amended--
       (1) in subsection (a), by striking ``enterprise'' each 
     place that term appears and inserting ``regulated entity'';
       (2) in subsection (b), by striking ``an enterprise'' and 
     inserting ``a regulated entity'';
       (3) in subsection (c), in the second sentence, by inserting 
     before the period ``to conduct examinations under this 
     section'';
       (4) by redesignating subsections (d) through (f) as 
     subsections (e) through (g), respectively; and
       (5) by inserting after subsection (c) the following:
       ``(d) Inspector General.--There shall be within the Agency 
     an Inspector General, who shall be appointed in accordance 
     with section 3(a) of the Inspector General Act of 1978.''.
       (b) Direct Hire Authority To Hire Accountants, Economists, 
     and Examiners.--Section 1317 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4517) is amended by adding at the end the following:
       ``(h) Appointment of Accountants, Economists, and 
     Examiners.--
       ``(1) Applicability.--This section shall apply with respect 
     to any position of examiner, accountant, economist, and 
     specialist in financial markets and in technology at the 
     Agency, with respect to supervision and regulation of the 
     regulated entities, that is in the competitive service.
       ``(2) Appointment authority.--The Director may appoint 
     candidates to any position described in paragraph (1)--
       ``(A) in accordance with the statutes, rules, and 
     regulations governing appointments in the excepted service; 
     and
       ``(B) notwithstanding any statutes, rules, and regulations 
     governing appointments in the competitive service.''.
       (c) Amendments to Inspector General Act.--Section 11 of the 
     Inspector General Act of 1978 (5 U.S.C. 11 App.) is amended--
       (1) in paragraph (1), by inserting ``, the Director of the 
     Federal Housing Enterprises Regulatory Agency'' after 
     ``Social Security Administration''; and
       (2) in paragraph (2), by inserting ``, the Federal Housing 
     Enterprises Regulatory Agency'' after ``Social Security 
     Administration''.
       (d) Authority To Contract for Reviews of Regulated 
     Entities.--Section 1319 of the Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 (12 U.S.C. 4519) 
     is amended in the section heading, by striking ``BY RATING 
     ORGANIZATION''.

     SEC. 2106. ASSESSMENTS.

       Section 1316 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4516) is 
     amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Annual Assessments.--The Director shall establish and 
     collect from the regulated entities annual assessments in an 
     amount not exceeding the amount sufficient to provide for 
     reasonable costs and expenses of the Agency, including--
       ``(1) the expenses of any examinations under section 1317;
       ``(2) the expenses of obtaining any reviews and credit 
     assessments under section 1319; and
       ``(3) such amounts in excess of actual expenses for any 
     given fiscal year, as deemed necessary by the Director to 
     maintain working capital.'';
       (2) by striking ``an enterprise'' each place that term 
     appears and inserting ``a regulated entity'';
       (3) by striking ``enterprises'' each place that term 
     appears and inserting ``regulated entities'';
       (4) by striking ``enterprise'' each place that term 
     appears, other than in subparagraph (B) of subsection (b)(3), 
     and inserting ``regulated entity'';
       (5) in subsection (b)--
       (A) in paragraph (1)--
       (i) by striking ``bears to'' and inserting ``bear to''; and
       (ii) by striking ``both'' and inserting ``all''; and
       (B) in paragraph (3)(B)--
       (i) by inserting ``with respect to an enterprise,'' before 
     ``the unpaid principal''; and
       (ii) by striking ``by the enterprise'' and inserting ``by 
     an enterprise'';
       (6) in subsection (c)--
       (A) by striking ``The semiannual'' and inserting the 
     following:
       ``(1) In general.--The semiannual''; and
       (B) by adding at the end the following:
       ``(2) Adjustments.--The Director may adjust the amounts of 
     any semiannual assessments for an assessment under subsection 
     (a) that are to be paid pursuant to subsection (b) by a 
     regulated entity, as the Director determines necessary to 
     ensure that the costs of enforcement activities under 
     subtitles B and C for a regulated entity are borne only by 
     that regulated entity.
       ``(3) Special circumstances.--If at any time, as a result 
     of increased costs of regulation of a regulated entity that 
     is not classified (for purposes of subtitle B) as adequately 
     capitalized, or as the result of supervisory or enforcement 
     activities under subtitle B or C for a regulated entity, the 
     amount available from any semiannual payment made by such 
     regulated entity pursuant to subsection (b) is insufficient 
     to cover the costs of the Agency with respect to such entity, 
     the Director may make and collect from such entity an 
     immediate assessment to cover the amount of such deficiency 
     for the semiannual period. If, at the end of any semiannual 
     period during which such an assessment is made, any amount 
     remains from such assessment, such remaining amount shall be 
     deducted from the assessment for such regulated entity for 
     the following semiannual period.'';
       (7) in subsection (d), by striking ``If'' and inserting 
     ``Except with respect to amounts collected pursuant to 
     subsection (a)(3), if'';
       (8) by striking subsections (e) and (f) and inserting the 
     following:
       ``(e) Remission of Assessment.--At the end of each year for 
     which an assessment under this section is made, the Director 
     shall remit to each regulated entity any amount of an 
     assessment collected from the regulated entity that is 
     attributable to subsection (a)(3), and is in excess of the 
     amount that the Director deems necessary to maintain working 
     capital.
       ``(f) No Appropriated Funds.--Salaries of the Director and 
     other employees of the Agency, and all other expenses 
     thereof, may be paid from assessments collected under this 
     subsection or other sources, and shall not be construed to be 
     Government funds or appropriated monies, or subject to 
     apportionment for the purposes of chapter 15 of title 31, 
     United States Code, or any other authority.''; and
       (9) in subsection (g)--
       (A) by striking ``the Secretary and'' each place that term 
     appears; and
       (B) in paragraph (3)--
       (i) by striking ``(A)''; and
       (ii) by striking ``, and (B)'' and all that follows through 
     the end of the paragraph and inserting a period.

     SEC. 2107. REGULATIONS AND ORDERS.

       Section 1319G of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4526) is 
     amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Authority.--The Director shall issue any regulations, 
     guidelines, directives, or orders necessary to carry out the 
     duties of the Director under this title or the authorizing 
     statutes, and to ensure that the purposes of this title and 
     the authorizing statutes are accomplished.''; and
       (2) by striking subsection (c).

     SEC. 2108. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.

       The Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended by 
     inserting after section 1313A, as added by this Division, the 
     following new section:

[[Page 5271]]



     ``SEC. 1313B. PRUDENTIAL MANAGEMENT AND OPERATIONS STANDARDS.

       ``The Director may establish standards, by regulation, 
     order, or guideline, for each regulated entity relating to--
       ``(1) adequacy of internal controls and information systems 
     taking into account the nature and scale of business 
     operations;
       ``(2) independence and adequacy of internal audit systems;
       ``(3) management of interest rate risk exposure;
       ``(4) management of market risk, including standards that 
     provide for systems that accurately measure, monitor, and 
     control market risks and, as warranted, that establish 
     limitations on market risk;
       ``(5) adequacy and maintenance of liquidity and reserves;
       ``(6) management of asset and investment portfolio growth;
       ``(7) investments and acquisitions of assets by a regulated 
     entity, to ensure that they are consistent with the purposes 
     of this title and the authorizing statutes;
       ``(8) overall risk management processes, including adequacy 
     of oversight by senior management and the board of directors 
     and of processes and policies to identify, measure, monitor, 
     and control material risks, including reputational risks, and 
     for adequate, well-tested business resumption plans for all 
     major systems with remote site facilities to protect against 
     disruptive events; and
       ``(9) such other operational and management standards as 
     the Director determines to be appropriate.''.

     SEC. 2109. CAPITAL LEVELS AND HOLDINGS.

       Subtitle B of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4611 et seq.) is 
     amended--
       (1) by striking the subtitle designation and heading and 
     inserting the following:

    ``Subtitle B--Required Capital Levels for Enterprises, Special 
 Enforcement Powers, Limitation on Assets, and Securities Treatment'';

       and
       (2) by adding at the end the following:

     ``SEC. 1369E. AFFORDABLE HOUSING FOCUSED PORTFOLIOS.

       ``(a) Supporting Affordable Housing.--Congress finds that, 
     consistent with the missions of the enterprises, the 
     portfolio holdings of the enterprises should be focused, to 
     the maximum extent possible, on mortgages and mortgage-backed 
     securities that meet the affordable housing goals established 
     for the enterprises pursuant to this Act.
       ``(b) Authority of the Director.--The Director shall, by 
     regulation, provide that any mortgages or mortgage-related 
     securities acquired by an enterprise after the date of 
     enactment of this Act shall--
       ``(1) meet one or more of the housing goals established for 
     the enterprise under this Act; or
       ``(2) be promptly securitized and sold to third parties.
       ``(c) Temporary Adjustments.--The Director may, by order, 
     make temporary adjustments to the standards under subsection 
     (b), if such action would help to mitigate market disruptions 
     in the housing finance system.''.

     SEC. 2110. RISK-BASED CAPITAL TEST FOR ENTERPRISES.

       (a) Risk-Based Capital Levels.--Section 1361 of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4611) is amended to read as follows:

     ``SEC. 1361. RISK-BASED CAPITAL LEVELS.

       ``(a) In General.--The Director shall, by regulation or 
     order, establish risk-based capital requirements for each of 
     the enterprises to ensure that the enterprises operate in a 
     safe and sound manner, with sufficient capital and reserves 
     to support the risks that arise in the operations and 
     management of each enterprise.
       ``(b) No Limitation.--Nothing in this section limits the 
     authority of the Director to require other reports or 
     undertakings in furtherance of the responsibilities of the 
     Director under this Act.''.
       (b) Minimum Capital Levels for Regulated Entities.--
       (1) Enterprises.--Section 1362 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4612) is amended--
       (A) in the section heading, by inserting ``for 
     enterprises'' after ``levels''; and
       (B) by striking subsection (b) and inserting the following:
       ``(b) Regulatory Discretion.--The Director may, by 
     regulation or order, establish a minimum capital level that 
     is higher than the level specified in subsection (a).''.
       (2) Federal home loan banks.--Section 6(a)(2) of the 
     Federal Home Loan Bank Act (12 U.S.C. 1426(a)(2)) is amended 
     by adding at the end the following:
       ``(C) Authority to alter level.--The Director may, by 
     regulation or order, establish a minimum capital level that 
     is higher than the level specified in subparagraph (A).''.

     SEC. 2111. REGISTRATION OF ENTERPRISE SECURITIES.

       (a) Fannie Mae.--
       (1) Mortgage-backed securities.--Section 304(d) of the 
     Federal National Mortgage Association Charter Act (12 U.S.C. 
     1719(d)) is amended by striking the fourth sentence and 
     inserting the following: ``Securities issued by the 
     corporation under this subsection shall not be exempt 
     securities for purposes of the Securities Act of 1933.''.
       (2) Subordinate obligations.--Section 304(e) of the Federal 
     National Mortgage Association Charter Act (12 U.S.C. 1719(e)) 
     is amended by striking the fourth sentence and inserting the 
     following: ``Obligations issued by the corporation under this 
     subsection shall not be exempt securities for purposes of the 
     Securities Act of 1933.''.
       (3) Securities.--Section 311 of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1723c) is 
     amended--
       (A) in the section heading, by striking ``association'';
       (B) by inserting ``(a) In General.--'' after ``sec. 311.'';
       (C) in the second sentence, by inserting ``by the 
     Association'' after ``issued''; and
       (D) by adding at the end the following:
       ``(b) Treatment of Corporation Securities.--
       ``(1) In general.--Any stock, obligations, securities, 
     participations, or other instruments issued or guaranteed by 
     the corporation pursuant to this title shall not be exempt 
     securities for purposes of the Securities Act of 1933.
       ``(2) Exemption for approved sellers.--Notwithstanding any 
     other provision of this title or the Securities Act of 1933, 
     transactions involving the initial disposition by an approved 
     seller of pooled certificates that are acquired by that 
     seller from the corporation upon the initial issuance of the 
     pooled certificates shall be deemed to be transactions by a 
     person other than an issuer, underwriter, or dealer for 
     purposes of the Securities Act of 1933.
       ``(3) Definitions.--For purposes of this subsection, the 
     following definitions shall apply:
       ``(A) Approved seller.--The term `approved seller' means an 
     institution approved by the corporation to sell mortgage 
     loans to the corporation in exchange for pooled certificates.
       ``(B) Pooled certificates.--The term `pooled certificates' 
     means single class mortgage-backed securities guaranteed by 
     the corporation that have been issued by the corporation 
     directly to the approved seller in exchange for the mortgage 
     loans underlying such mortgage-backed securities.
       ``(4) Mortgage related securities.--A single class 
     mortgage-backed security guaranteed by the corporation that 
     has been issued by the corporation directly to the approved 
     seller in exchange for the mortgage loans underlying such 
     mortgage-backed securities or directly by the corporation for 
     cash shall be deemed to be a mortgage related security, as 
     defined in section 3(a) of the Securities Exchange Act of 
     1934.''.
       (b) Freddie Mac.--Section 306(g) of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1455(g)) is amended to 
     read as follows:
       ``(g) Treatment of Securities.--
       ``(1) In general.--Any securities issued or guaranteed by 
     the Corporation shall not be exempt securities for purposes 
     of the Securities Act of 1933.
       ``(2) Exemption for approved sellers.--Notwithstanding any 
     other provision of this title or the Securities Act of 1933, 
     transactions involving the initial disposition by an approved 
     seller of pooled certificates that are acquired by that 
     seller from the Corporation upon the initial issuance of the 
     pooled certificates shall be deemed to be transactions by a 
     person other than an issuer, underwriter, or dealer for 
     purposes of the Securities Act of 1933.
       ``(3) Definitions.--For purposes of this subsection, the 
     following definitions shall apply:
       ``(A) Approved seller.--The term `approved seller' means an 
     institution approved by the Corporation to sell mortgage 
     loans to the Corporation in exchange for pooled certificates.
       ``(B) Pooled certificates.--The term `pooled certificates' 
     means single class mortgage-backed securities guaranteed by 
     the Corporation that have been issued by the Corporation 
     directly to the approved seller in exchange for the mortgage 
     loans underlying such mortgage-backed securities.''.
       (c) Limitation on Fees.--Section 6(b)(2) of the Securities 
     Act of 1933 (15 U.S.C. 77f(b)(2)) is amended by adding at the 
     end the following: ``Notwithstanding any other provision of 
     this title, no applicant, or group of affiliated applicants 
     that does not include any investment company registered under 
     the Investment Company Act of 1940, filing a registration 
     statement subject to a fee shall be required in any fiscal 
     year with respect to all registration statements filed by 
     such applicant in such fiscal year to pay an aggregate amount 
     in fees to the Commission pursuant to this subsection in an 
     amount that exceeds 5 percent of the target offsetting 
     collection amount for such fiscal year. Fees paid in 
     connection with registration statements relating to business 
     combinations shall not be included in calculating the total 
     fees paid by any such applicant.''.
       (d) No Effect on Other Law.--Nothing in this section or the 
     amendments made by this section shall be construed to affect 
     any exemption from the provisions of the Trust Indenture Act 
     of 1939 provided to the Federal National Mortgage Association 
     or the Federal Home Loan Mortgage Corporation.
       (e) Regulations.--The Securities and Exchange Commission 
     may issue such regulations as may be necessary or appropriate 
     to

[[Page 5272]]

     carry out this section and the amendments made by this 
     section.
       (f) Effective Date.--The amendments made by this section 
     shall become effective 1 year after the date of enactment of 
     this Act.

     SEC. 2112. LIMIT ON GOLDEN PARACHUTES.

       Section 1318 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4518) is amended 
     by adding at the end the following:
       ``(c) Authority To Regulate or Prohibit Certain Forms of 
     Benefits to Affiliated Parties.--
       ``(1) Golden parachutes and indemnification payments.--The 
     Agency may prohibit or limit, by regulation or order, any 
     golden parachute payment or indemnification payment.
       ``(2) Factors to be taken into account.--The Agency shall 
     prescribe, by regulation, the factors to be considered by the 
     Agency in taking any action pursuant to paragraph (1), which 
     may include such factors as--
       ``(A) whether there is a reasonable basis to believe that 
     the affiliated party has committed any fraudulent act or 
     omission, breach of trust or fiduciary duty, or insider abuse 
     with regard to the regulated entity that has had a material 
     effect on the financial condition of the regulated entity;
       ``(B) whether there is a reasonable basis to believe that 
     the affiliated party is substantially responsible for the 
     insolvency of the regulated entity, the appointment of a 
     conservator or receiver for the regulated entity, or the 
     troubled condition of the regulated entity (as defined in 
     regulations prescribed by the Agency);
       ``(C) whether there is a reasonable basis to believe that 
     the affiliated party has materially violated any applicable 
     provision of Federal or State law or regulation that has had 
     a material affect on the financial condition of the regulated 
     entity;
       ``(D) whether the affiliated party was in a position of 
     managerial or fiduciary responsibility; and
       ``(E) the length of time that the party was affiliated with 
     the regulated entity, and the degree to which--
       ``(i) the payment reasonably reflects compensation earned 
     over the period of employment; and
       ``(ii) the compensation involved represents a reasonable 
     payment for services rendered.
       ``(3) Certain payments prohibited.--No regulated entity may 
     prepay the salary or any liability or legal expense of any 
     affiliated party if such payment is made--
       ``(A) in contemplation of the insolvency of such regulated 
     entity, or after the commission of an act of insolvency; and
       ``(B) with a view to, or having the result of--
       ``(i) preventing the proper application of the assets of 
     the regulated entity to creditors; or
       ``(ii) preferring one creditor over another.
       ``(4) Golden parachute payment defined.--
       ``(A) In general.--For purposes of this subsection, the 
     term `golden parachute payment' means any payment (or any 
     agreement to make any payment) in the nature of compensation 
     by any regulated entity for the benefit of any affiliated 
     party pursuant to an obligation of such regulated entity 
     that--
       ``(i) is contingent on the termination of such party's 
     affiliation with the regulated entity; and
       ``(ii) is received on or after the date on which--

       ``(I) the regulated entity became insolvent;
       ``(II) any conservator or receiver is appointed for such 
     regulated entity; or
       ``(III) the Agency determines that the regulated entity is 
     in a troubled condition (as defined in the regulations of the 
     Agency).

       ``(B) Certain payments in contemplation of an event.--Any 
     payment which would be a golden parachute payment but for the 
     fact that such payment was made before the date referred to 
     in subparagraph (A)(ii) shall be treated as a golden 
     parachute payment if the payment was made in contemplation of 
     the occurrence of an event described in any subclause of such 
     subparagraph.
       ``(C) Certain payments not included.--For purposes of this 
     subsection, the term `golden parachute payment' shall not 
     include--
       ``(i) any payment made pursuant to a retirement plan which 
     is qualified (or is intended to be qualified) under section 
     401 of the Internal Revenue Code of 1986, or other 
     nondiscriminatory benefit plan;
       ``(ii) any payment made pursuant to a bona fide deferred 
     compensation plan or arrangement which the Board determines, 
     by regulation or order, to be permissible; or
       ``(iii) any payment made by reason of the death or 
     disability of an affiliated party.
       ``(5) Other definitions.--For purposes of this subsection, 
     the following definitions shall apply:
       ``(A) Indemnification payment.--Subject to paragraph (6), 
     the term `indemnification payment' means any payment (or any 
     agreement to make any payment) by any regulated entity for 
     the benefit of any person who is or was an affiliated party, 
     to pay or reimburse such person for any liability or legal 
     expense with regard to any administrative proceeding or civil 
     action instituted by the Agency which results in a final 
     order under which such person--
       ``(i) is assessed a civil money penalty;
       ``(ii) is removed or prohibited from participating in 
     conduct of the affairs of the regulated entity; or
       ``(iii) is required to take any affirmative action to 
     correct certain conditions resulting from violations or 
     practices, by order of the Agency.
       ``(B) Liability or legal expense.--The term `liability or 
     legal expense' means--
       ``(i) any legal or other professional expense incurred in 
     connection with any claim, proceeding, or action;
       ``(ii) the amount of, and any cost incurred in connection 
     with, any settlement of any claim, proceeding, or action; and
       ``(iii) the amount of, and any cost incurred in connection 
     with, any judgment or penalty imposed with respect to any 
     claim, proceeding, or action.
       ``(C) Payment.--The term `payment' includes--
       ``(i) any direct or indirect transfer of any funds or any 
     asset; and
       ``(ii) any segregation of any funds or assets for the 
     purpose of making, or pursuant to an agreement to make, any 
     payment after the date on which such funds or assets are 
     segregated, without regard to whether the obligation to make 
     such payment is contingent on--

       ``(I) the determination, after such date, of the liability 
     for the payment of such amount; or
       ``(II) the liquidation, after such date, of the amount of 
     such payment.

       ``(6) Certain commercial insurance coverage not treated as 
     covered benefit payment.--No provision of this subsection 
     shall be construed as prohibiting any regulated entity from 
     purchasing any commercial insurance policy or fidelity bond, 
     except that, subject to any requirement described in 
     paragraph (5)(A)(iii), such insurance policy or bond shall 
     not cover any legal or liability expense of the regulated 
     entity which is described in paragraph (5)(A).''.

     SEC. 2113. REPORTING OF FRAUDULENT LOANS.

       Part 1 of subtitle C of the Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 (12 U.S.C. 4631 et 
     seq.), as amended by this Act, is amended by adding at the 
     end the following:

     ``SEC. 1379E. REPORTING OF FRAUDULENT LOANS.

       ``(a) Requirement To Report.--The Director shall require a 
     regulated entity to submit to the Director a timely report 
     upon discovery by the regulated entity that it has purchased 
     or sold a fraudulent loan or financial instrument, or 
     suspects a possible fraud relating to the purchase or sale of 
     any loan or financial instrument. The Director shall require 
     each regulated entity to establish and maintain procedures 
     designed to discover any such transactions.
       ``(b) Protection From Liability for Reports.--Any regulated 
     entity that makes a report pursuant to subsection (a), and 
     any entity-affiliated party, that makes or requires another 
     to make any such report, shall not be liable to any person 
     under any provision of law or regulation, any constitution, 
     law, or regulation of any State or political subdivision of 
     any State, or under any contract or other legally enforceable 
     agreement (including any arbitration agreement) for such 
     report or for any failure to provide notice of such report to 
     the person who is the subject of such report or any other 
     persons identified in the report.''.

             Subtitle B--Improvement of Mission Supervision

     SEC. 2121. TRANSFER OF PRODUCT APPROVAL AND HOUSING GOAL 
                   OVERSIGHT.

       Part 2 of subtitle A of title XIII of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4541 et seq.) is 
     amended--
       (1) by striking the designation and heading for the part 
     and inserting the following:

   ``PART 2--PRODUCT APPROVAL BY DIRECTOR, CORPORATE GOVERNANCE, AND 
                   ESTABLISHMENT OF HOUSING GOALS'';

       and
       (2) by striking sections 1321 and 1322.

     SEC. 2122. REVIEW OF ENTERPRISE PRODUCTS.

       (a) In General.--Part 2 of subtitle A of title XIII of the 
     Housing and Community Development Act of 1992 is amended by 
     inserting before section 1323 (12 U.S.C. 4543) the following 
     new section:

     ``SEC. 1321. PRIOR APPROVAL AUTHORITY FOR PRODUCTS OF 
                   ENTERPRISES.

       ``(a) In General.--The Director shall require each 
     enterprise to obtain the approval of the Director for any 
     product of the enterprise before initially offering the 
     product.
       ``(b) Standard for Approval.--In considering any request 
     for approval of a product pursuant to subsection (a), the 
     Director shall make a determination that--
       ``(1) in the case of a product of the Federal National 
     Mortgage Association, the Director determines that the 
     product is authorized under paragraph (2), (3), (4), or (5) 
     of section 302(b) or section 304 of the Federal National 
     Mortgage Association Charter Act, (12 U.S.C. 1717(b), 1719);
       ``(2) in the case of a product of the Federal Home Loan 
     Mortgage Corporation, the Director determines that the 
     product is authorized under paragraph (1), (4), or (5) of 
     section 305(a) of the Federal Home Loan Mortgage Corporation 
     Act (12 U.S.C. 1454(a));

[[Page 5273]]

       ``(3) the product is in the public interest;
       ``(4) the product is consistent with the safety and 
     soundness of the enterprise or the mortgage finance system; 
     and
       ``(5) the product does not materially impair the efficiency 
     of the mortgage finance system.
       ``(c) Procedure for Approval.--
       ``(1) Submission of request.--An enterprise shall submit to 
     the Director a written request for approval of a product that 
     describes the product in such form as prescribed by order or 
     regulation of the Director.
       ``(2) Request for public comment.--Immediately upon receipt 
     of a request for approval of a product, as required under 
     paragraph (1), the Director shall publish notice of such 
     request and of the period for public comment pursuant to 
     paragraph (3) regarding the product, and a description of the 
     product proposed by the request. The Director shall give 
     interested parties the opportunity to respond in writing to 
     the proposed product.
       ``(3) Public comment period.--During the 30-day period 
     beginning on the date of publication pursuant to paragraph 
     (2) of a request for approval of a product, the Director 
     shall receive public comments regarding the proposed product.
       ``(4) Offering of product.--
       ``(A) In general.--Not later than 30 days after the close 
     of the public comment period described in paragraph (3), the 
     Director shall approve or deny the product, specifying the 
     grounds for such decision in writing.
       ``(B) Failure to act.--If the Director fails to act within 
     the 30-day period described in subparagraph (A), the 
     enterprise may offer the product.
       ``(d) Expedited Review.--
       ``(1) Determination and notice.--If an enterprise 
     determines that any new activity, service, undertaking, or 
     offering is not a product, as defined in subsection (f), the 
     enterprise shall provide written notice to the Director prior 
     to the commencement of such activity, service, undertaking, 
     or offering.
       ``(2) Director determination of applicable procedure.--
     Immediately upon receipt of any notice pursuant to paragraph 
     (1), the Director shall make a determination under paragraph 
     (3).
       ``(3) Determination and treatment as product.--If the 
     Director determines that any new activity, service, 
     undertaking, or offering consists of, relates to, or involves 
     a product--
       ``(A) the Director shall notify the enterprise of the 
     determination;
       ``(B) the new activity, service, undertaking, or offering 
     described in the notice under paragraph (1) shall be 
     considered a product for purposes of this section; and
       ``(C) the enterprise shall withdraw its request or submit a 
     written request for approval of the product pursuant to 
     subsection (c).
       ``(e) Conditional Approval.--The Director may conditionally 
     approve the offering of any product by an enterprise, and may 
     establish terms, conditions, or limitations with respect to 
     such product with which the enterprise must comply in order 
     to offer such product.
       ``(f) Definition of Product.--For purposes of this section, 
     the term `product' does not include--
       ``(1) the automated loan underwriting system of an 
     enterprise in existence as of the date of the enactment of 
     the Federal Housing Finance Reform Act of 2007, including any 
     upgrade to the technology, operating system, or software to 
     operate the underwriting system; or
       ``(2) any modification to the mortgage terms and conditions 
     or mortgage underwriting criteria relating to the mortgages 
     that are purchased or guaranteed by an enterprise: Provided, 
     That such modifications do not alter the underlying 
     transaction so as to include services or financing, other 
     than residential mortgage financing, or create significant 
     new exposure to risk for the enterprise or the holder of the 
     mortgage.
       ``(g) No Limitation.--Nothing in this section shall be 
     deemed to restrict--
       ``(1) the safety and soundness authority of the Director 
     over all new and existing products or activities; or
       ``(2) the authority of the Director to review all new and 
     existing products or activities to determine that such 
     products or activities are consistent with the statutory 
     mission of the enterprise.''.
       (b) Conforming Amendments.--
       (1) Fannie mae.--Section 302(b)(6) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1717(b)(6)) is 
     amended--
       (A) by striking ``implement any new program'' and inserting 
     ``initially offer any product'';
       (B) by striking ``section 1303'' and inserting ``section 
     1321(f)''; and
       (C) by striking ``before obtaining the approval of the 
     Secretary under section 1322'' and inserting ``except in 
     accordance with section 1321''.
       (2) Freddie mac.--Section 305(c) of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1454(c)) is amended--
       (A) by striking ``implement any new program'' and inserting 
     ``initially offer any product'';
       (B) by striking ``section 1303'' and inserting ``section 
     1321(f)''; and
       (C) by striking ``before obtaining the approval of the 
     Secretary under section 1322'' and inserting ``except in 
     accordance with section 1321''.
       (3) 1992 act.--Section 1303 of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4502), as amended by 
     section 2 of this Act, is further amended--
       (A) by striking paragraph (17) (relating to the definition 
     of ``new program''); and
       (B) by redesignating paragraphs (18) through (23) as 
     paragraphs (17) through (22), respectively.

     SEC. 2123. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING 
                   GOALS.

       Section 1336(a)(1) of the Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 (12 U.S.C. 
     4566(a)(1)) is amended by striking ``established'' and all 
     that follows through ``1334'' and inserting ``under this 
     subpart''.

     SEC. 2124. ASSUMPTION BY DIRECTOR OF OTHER HUD 
                   RESPONSIBILITIES.

       (a) In General.--Part 2 of subtitle A of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4541 et seq.) is amended--
       (1) by striking ``Secretary'' each place that term appears 
     and inserting ``Director'' in each of sections 1323, 1324, 
     1326, 1331, 1332, 1333, 1334, and 1336;
       (2) in section 1332 (12 U.S.C. 4562), by striking 
     subsection (d);
       (3) in section 1333 (12 U.S.C. 4563), by striking 
     subsection (d);
       (4) in section 1334 (12 U.S.C. 4564), by striking 
     subsection (d); and
       (5) by striking sections 1337, 1338, and 1349 (12 U.S.C. 
     4567, 4562 note, 4589).
       (b) Retention of Fair Housing Responsibilities.--Section 
     1325 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4545) is amended in the 
     matter preceding paragraph (1), by inserting ``of Housing and 
     Urban Development'' after ``The Secretary''.

     SEC. 2125. ADMINISTRATIVE AND JUDICIAL ENFORCEMENT 
                   PROCEEDINGS.

       (a) Director Authority.--Subpart C of part 2 of subtitle A 
     of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4581 et seq.) is amended by 
     striking ``Secretary'' each place that term appears and 
     inserting ``Director'' in each of--
       (1) section 1341 (12 U.S.C. 4581);
       (2) section 1342 (12 U.S.C. 4582);
       (3) section 1343 (12 U.S.C. 4583);
       (4) section 1344 (12 U.S.C. 4584);
       (5) section 1345 (12 U.S.C. 4585);
       (6) section 1346 (12 U.S.C. 4586);
       (7) section 1347 (12 U.S.C. 4587); and
       (8) section 1348 (12 U.S.C. 4588).
       (b) Subpoena Enforcement by Director.--Section 1348(c) of 
     the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4588(c)) is amended by 
     inserting ``may bring an action or'' before ``may request''.

     SEC. 2126. CONFORMING LOAN LIMITS.

       (a) Fannie Mae.--Section 302(b)(2) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)) is 
     amended by striking ``The Corporation shall establish'' and 
     all that follows through the end of the paragraph and 
     inserting the following: ``Such limitations shall not exceed 
     $417,000 for a mortgage secured by a single-family residence, 
     $533,850 for a mortgage secured by a 2-family residence, 
     $645,300 for a mortgage secured by a 3-family residence, or 
     $801,950 for a mortgage secured by a 4-family residence, 
     except that such maximum limitations shall be adjusted 
     effective January 1 of each year beginning after the 
     effective date under section 2163 of the Federal Housing 
     Enterprise Regulatory Reform Act of 2008, subject to the 
     limitations in this paragraph. Such limitation shall be 
     calculated with respect to the total original principal 
     obligation of the mortgage, and not merely with respect to 
     the interest purchased by the enterprise. Each adjustment 
     shall be made by adding to or subtracting from each such 
     amount (as it may have been previously adjusted) a percentage 
     thereof equal to the percentage increase or decrease, during 
     the most recent 12-month or fourth quarter period ending 
     before the time of determining such annual adjustment, in the 
     housing price index maintained by the Director of the Federal 
     Housing Enterprise Regulatory Agency (pursuant to section 
     1321 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4541)).''.
       (b) Freddie Mac.--Section 305(a)(2) of the Federal Home 
     Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is 
     amended by striking ``The Corporation shall establish'' and 
     all that follows through the end of the paragraph and 
     inserting the following: ``Such limitations shall not exceed 
     $417,000 for a mortgage secured by a single-family residence, 
     $533,850 for a mortgage secured by a 2-family residence, 
     $645,300 for a mortgage secured by a 3-family residence, or 
     $801,950 for a mortgage secured by a 4-family residence, 
     except that such maximum limitations shall be adjusted 
     effective January 1 of each year beginning after the 
     effective date under section 2163 of the Federal Housing 
     Enterprise Regulatory Reform Act of 2008, subject to the 
     limitations in this paragraph. Such limitation shall be 
     calculated with respect to the total original principal 
     obligation of the mortgage and not merely with respect to the

[[Page 5274]]

     interest purchased by the enterprise. Each adjustment shall 
     be made by adding to or subtracting from each such amount (as 
     it may have been previously adjusted) a percentage thereof 
     equal to the percentage increase or decrease, during the most 
     recent 12-month or fourth quarter period ending before the 
     time of determining such annual adjustment, in the housing 
     price index maintained by the Director of the Federal Housing 
     Enterprise Regulatory Agency (pursuant to section 1321 of the 
     Federal Housing Enterprises Financial Safety and Soundness 
     Act of 1992 (12 U.S.C. 4541)).''.
       (c) Housing Price Index.--The Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992, as amended by 
     this Act, is amended by inserting before section 1323 the 
     following:

     ``SEC. 1322. HOUSING PRICE INDEX.

       ``(a) Method of Assessment.--The Director shall establish, 
     by regulation, and maintain a method of assessing the 
     national average single-family housing price for use in 
     adjusting the conforming loan limitations of the enterprises.
       ``(b) Considerations.--The Director shall take into 
     consideration the monthly survey of all major lenders 
     conducted by the Agency to determine the national average 
     single-family house price, the Housing Price Index maintained 
     by the Office of Federal Housing Enterprise Oversight of the 
     Department of Housing and Urban Development before the 
     effective date under section 2163 of the Federal Housing 
     Enterprise Regulatory Reform Act of 2008, any appropriate 
     housing price indexes of the Bureau of the Census of the 
     Department of Commerce, and any other indexes or measure that 
     the Director considers appropriate.''.

     SEC. 2127. REPORTING OF MORTGAGE DATA; HOUSING GOALS.

       (a) Reporting of Mortgage Data.--Section 1325 of the 
     Federal Housing Enterprises Financial Safety and Soundness 
     Act of 1992 (12 U.S.C. 4546), as so redesignated by this Act, 
     is amended--
       (1) in subsection (a), by striking ``The Director'' and 
     inserting ``Subject to subsection (d), the Director''; and
       (2) by adding at the end the following:
       ``(d) Mortgage Data.--The Director shall, by regulation or 
     order, provide that certain information relating to single 
     family mortgage data of the enterprises shall be disclosed to 
     the public in order to make available to the public the same 
     data from the enterprises that is required of insured 
     depository institutions under the Home Mortgage Disclosure 
     Act.''.
       (b) Definitions.--Section 1334 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4564), as amended by this Act, is amended by adding at 
     the end the following:
       ``(d) Definitions.--For purposes of this section, the term 
     `underserved area' means an urban census tract that has--
       ``(1) an average median family income of less than 80 
     percent of the area median family income; or
       ``(2) a minority population of at least 30 percent and a 
     median family income of less than 100 percent of the area 
     family median income.''.

     SEC. 2128. DUTY TO SERVE UNDERSERVED MARKETS.

       (a) Establishment and Evaluation of Performance.--Section 
     1335 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4565) is amended--
       (1) in the section heading, by inserting ``DUTY TO SERVE 
     UNDERSERVED MARKETS AND'' before ``OTHER'';
       (2) by striking subsection (b);
       (3) in subsection (a)--
       (A) by inserting ``and to carry out the duty under 
     subsection (a)'' before ``, each enterprise shall'';
       (B) in paragraph (3), by inserting ``and'' at the end;
       (C) in paragraph (4), by striking ``; and'' and inserting a 
     period; and
       (D) by striking paragraph (5); and
       (4) by redesignating subsection (a) as subsection (b);
       (5) by inserting before subsection (b) (as so redesignated) 
     the following:
       ``(a) Duty To Serve Underserved Markets.--
       ``(1) Duty.--In accordance with the purposes of the 
     enterprises under section 301(3) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1716) and section 
     301(b)(3) of the Federal Home Loan Mortgage Corporation Act 
     (12 U.S.C. 1451 note) to undertake activities relating to 
     mortgages on housing for very low-, low-, and moderate-income 
     families, involving a reasonable economic return that may be 
     less than the return earned on other activities, each 
     enterprise shall have the duty to increase the liquidity of 
     mortgage investments and improve the distribution of 
     investment capital available for mortgage financing for 
     underserved markets.
       ``(2) Underserved markets.--To meet its duty under 
     paragraph (1), each enterprise shall lead the industry in 
     developing loan products and flexible underwriting guidelines 
     to facilitate a secondary market--
       ``(A) for mortgages on manufactured homes for very low-, 
     low-, and moderate-income families;
       ``(B) to preserve housing affordable to very low-, low-, 
     and moderate-income families, including housing projects 
     subsidized under--
       ``(i) the project-based and tenant-based rental assistance 
     programs under section 8 of the United States Housing Act of 
     1937;
       ``(ii) the program under section 236 of the National 
     Housing Act;
       ``(iii) the below market interest rate mortgage program 
     under section 221(d)(4) of the National Housing Act;
       ``(iv) the supportive housing for the elderly program under 
     section 202 of the Housing Act of 1959;
       ``(v) the supportive housing program for persons with 
     disabilities under section 811 of the Cranston-Gonzalez 
     National Affordable Housing Act; and
       ``(vi) the rural rental housing program under section 515 
     of the Housing Act of 1949;
       ``(C) for mortgages on housing for very low-, low-, and 
     moderate-income families in rural areas, and for mortgages 
     for housing for any other underserved market for very low-, 
     low-, and moderate-income families that the Director 
     identifies as lacking adequate credit through conventional 
     lending sources, which underserved markets may be identified 
     by borrower type, market segment, or geographic area; and
       ``(D) for mortgages originated through State or local 
     affordable or subsidized housing programs.''; and
       (6) by adding at the end the following new subsection:
       ``(c) Evaluation and Reporting of Compliance.--
       ``(1) Method of evaluation.--Not later than 6 months after 
     the effective date of title I of the Federal Housing 
     Enterprise Regulatory Reform Act of 2008, the Director shall 
     establish a method for evaluating whether, and the extent to 
     which, the enterprises have complied with the duty under 
     subsection (a) to serve underserved markets and for rating 
     the extent of such compliance.
       ``(2) Annual evaluations.--Using the method established 
     under paragraph (1), the Director shall, for each year, 
     evaluate such compliance and rate the performance of each 
     enterprise as to the extent of compliance. The Director shall 
     include such evaluation and rating for each enterprise for a 
     year in the report for that year submitted pursuant to 
     section 1319B(a).
       ``(3) Separate evaluations.--In determining whether an 
     enterprise has complied with the duty under subsection (a), 
     the Director shall separately evaluate whether the enterprise 
     has complied with such duty with respect to each of the 
     underserved markets identified in subsection (a), taking into 
     consideration--
       ``(A) the development of loan products and more flexible 
     underwriting guidelines;
       ``(B) the extent of outreach to qualified loan sellers in 
     each of such underserved markets; and
       ``(C) the volume of loans purchased in each of such 
     underserved markets.''.
       (b) Enforcement.--Section 1336(a) of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4566(a)) is amended--
       (1) in paragraph (1), by inserting before the period ``and 
     with the duty under section 1335A of each enterprise with 
     respect to underserved markets''; and
       (2) by adding at the end the following:
       ``(4) Enforcement of duty to provide mortgage credit to 
     underserved markets.--Compliance with the duty under section 
     1335(a) of each enterprise to serve underserved markets (as 
     determined in accordance with section 1335(c)) shall be 
     enforceable under this section to the same extent and under 
     the same provisions that the housing goals established under 
     sections 1332, 1333, and 1334 are enforceable. Such duty 
     shall not be enforceable under any provision of this title 
     (including subpart C), other than this section, or under any 
     provision of the Federal National Mortgage Association 
     Charter Act or the Federal Home Loan Mortgage Corporation 
     Act, as applicable.''.

     SEC. 2129. HOME PURCHASE GOAL.

       The Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is amended--
       (1) by inserting after section 1334 the following:

     ``SEC. 1334A. HOME PURCHASE GOAL.

       ``(a) Establishment.--
       ``(1) In general.--The Director shall establish an annual 
     home purchase goal for the purchase by each enterprise of 
     mortgage financing of owner-occupied single family dwelling 
     units.
       ``(2) Components.--The Director may, by regulation, 
     establish components for the goal established under paragraph 
     (1) to include any or all of the following:
       ``(A) First-time home buyers.
       ``(B) Low- and moderate-income home buyers.
       ``(C) Home buyers in central cities, rural areas, and other 
     underserved areas.
       ``(D) Home buyers who obtain financing through State or 
     local affordable or subsidized housing programs.
       ``(3) Other authority.--The Director may, by regulation, 
     establish the goal under paragraph (1) with components as 
     percentages of enterprise business, or by such other means as 
     necessary to increase the secondary market financing of 
     mortgages by the enterprises for home purchases, consistent 
     with the missions of the enterprises.

[[Page 5275]]

       ``(4) Enforceability.--The components of the goal 
     established by the Director under paragraph (1) shall be 
     enforceable as goals under subpart C.
       ``(b) Factors To Be Considered.--In establishing the home 
     purchase goal for an enterprise under this section, the 
     Director shall consider--
       ``(1) national housing needs;
       ``(2) economic, housing, and demographic conditions;
       ``(3) the performance and effort of the enterprises toward 
     achieving the home purchase goal in previous years;
       ``(4) the size of the conventional mortgage market serving 
     home purchasers, relative to the size of the overall 
     conventional mortgage market;
       ``(5) the ability of the enterprises to lead the industry 
     in making mortgage credit available for home purchasers; and
       ``(6) the need to maintain the sound financial condition of 
     the enterprises.
       ``(c) Transition.--In order to permit a transition to the 
     establishment of the goal under this section, such goal shall 
     not be effective or enforceable during the 1-year period 
     beginning on the date of its establishment under subsection 
     (a).
       ``(d) Implementation During Transition.--The Director shall 
     establish, by rule, any requirements necessary to implement 
     the transition provisions under subsection (c), after 
     providing the enterprises with an opportunity to review and 
     comment not less than 30 days before the issuance of such 
     notice.

     ``SEC. 1334B. HOUSING GOALS, ADDITIONS, MODIFICATIONS, AND 
                   RESCISSIONS.

       ``(a) In General.--
       ``(1) Authority to address goals.--The Director may, by 
     regulation, establish additional annual housing goals, or 
     modify or rescind existing housing goals, to address national 
     housing needs consistent with the missions, of the 
     enterprises and the authorizing statutes, for the purchase of 
     mortgages, if the Director determines, by regulation, that 
     the housing need is greatest.
       ``(2) Methodology.--The Director may issue a regulation 
     which establishes or modifies any goal under this 
     subsection--
       ``(A) as a percentage of the mortgage purchases of each 
     enterprise;
       ``(B) as a dollar amount of each enterprise's mortgage 
     purchases; or
       ``(C) by such other means as necessary to increase the 
     enterprises' secondary market financing of mortgages 
     addressed by the goal.
       ``(b) Factors To Be Considered.--In establishing any 
     additional goals under this section, the Director shall 
     consider--
       ``(1) national housing needs;
       ``(2) economic, housing, and demographic conditions;
       ``(3) the performance and effort of the enterprises toward 
     achieving the need addressed by any such additional goal in 
     previous years;
       ``(4) the size of the conventional mortgage market serving 
     the need addressed by the goal, relative to the size of the 
     overall conventional mortgage market;
       ``(5) the ability of the enterprises to lead the industry 
     in making mortgage credit available to meet the need 
     addressed by the goal; and
       ``(6) the need to maintain the sound financial condition of 
     the enterprises.
       ``(c) Transition.--In order to permit a transition to the 
     establishment of any goal under this section, such goal shall 
     not be effective or enforceable during the 1-year period 
     beginning on the date of its establishment under subsection 
     (a).'';
       (2) in section 1335 (12 U.S.C. 4565(a)), by striking ``meet 
     the low-'' and all that follows through ``1334'' and 
     inserting ``meet the goals under this subpart'';
       (3) in section 1336 (12 U.S.C. 4566), by striking 
     subsections (b) and (c) and inserting the following:
       ``(b) Notice and Preliminary Determination of Failure To 
     Meet Goals.--
       ``(1) Notice.--If the Director preliminarily determines 
     that an enterprise has failed, or that there is a substantial 
     probability that an enterprise will fail, to meet any housing 
     goal under this subpart, the Director shall provide written 
     notice to the enterprise of such a preliminary determination, 
     the reasons for such determination, and the information on 
     which the Director based the determination.
       ``(2) Response period.--
       ``(A) In general.--During the 30-day period beginning on 
     the date on which an enterprise is provided notice under 
     paragraph (1), the enterprise may submit to the Director any 
     written information that the enterprise considers appropriate 
     for consideration by the Director in finally determining 
     whether such failure has occurred or whether the achievement 
     of such goal was or is feasible.
       ``(B) Extended period.--The Director may extend the period 
     under subparagraph (A) for good cause for not more than 30 
     additional days.
       ``(C) Shortened period.--The Director may shorten the 
     period under subparagraph (A) for good cause.
       ``(D) Failure to respond.--The failure of an enterprise to 
     provide information during the 30-day period under this 
     paragraph (as extended or shortened) shall waive any right of 
     the enterprise to comment on the proposed determination or 
     action of the Director.
       ``(3) Consideration of information and final 
     determination.--
       ``(A) In general.--After the expiration of the response 
     period under paragraph (2), or upon receipt of information 
     provided during such period by the enterprise, whichever 
     occurs earlier, the Director shall issue a final 
     determination on--
       ``(i) whether the enterprise has failed, or there is a 
     substantial probability that the enterprise will fail, to 
     meet the housing goal; and
       ``(ii) whether (taking into consideration market and 
     economic conditions and the financial condition of the 
     enterprise) the achievement of the housing goal was or is 
     feasible.
       ``(B) Considerations.--In making a final determination 
     under subparagraph (A), the Director shall take into 
     consideration any relevant information submitted by the 
     enterprise during the response period.
       ``(C) Notice.--The Director shall provide written notice, 
     including a response to any information submitted during the 
     response period to the enterprise, the Committee on Banking, 
     Housing, and Urban Affairs of the Senate, and the Committee 
     on Financial Services of the House of Representatives, of--
       ``(i) each final determination under this paragraph that an 
     enterprise has failed, or that there is a substantial 
     probability that the enterprise will fail, to meet a housing 
     goal;
       ``(ii) each final determination that the achievement of a 
     housing goal was or is feasible; and
       ``(iii) the reasons for each such final determination.
       ``(c) Cease and Desist, Civil Money Penalties, and Remedies 
     Including Housing Plans.--
       ``(1) Requirement.--If the Director finds, pursuant to 
     subsection (b), that there is a substantial probability that 
     an enterprise will fail, or has actually failed, to meet any 
     housing goal under this subpart, and that the achievement of 
     the housing goal was or is feasible, the Director may require 
     that the enterprise submit a housing plan under this 
     subsection. If the Director makes such a finding and the 
     enterprise refuses to submit such a plan, submits an 
     unacceptable plan, fails to comply with the plan, or the 
     Director finds that the enterprise has failed to meet any 
     housing goal under this subpart, in addition to requiring an 
     enterprise to submit a housing plan, the Director may issue a 
     cease and desist order in accordance with section 1341, 
     impose civil money penalties in accordance with section 1345, 
     or order other remedies as set forth in paragraph (7).
       ``(2) Housing plan.--If the Director requires a housing 
     plan under this subsection, such a plan shall be--
       ``(A) a feasible plan describing the specific actions the 
     enterprise will take--
       ``(i) to achieve the goal for the next calendar year; and
       ``(ii) if the Director determines that there is a 
     substantial probability that the enterprise will fail to meet 
     a goal in the current year, to make such improvements and 
     changes in its operations as are reasonable in the remainder 
     of such year; and
       ``(B) sufficiently specific to enable the Director to 
     monitor compliance periodically.
       ``(3) Deadline for submission.--The Director shall, by 
     regulation, establish a deadline for an enterprise to comply 
     with any remedial action or submit a housing plan to the 
     Director, which may not be more than 45 days after the 
     enterprise is provided notice. The regulations shall provide 
     that the Director may extend the deadline to the extent that 
     the Director determines necessary. Any extension of the 
     deadline shall be in writing and for a time certain.
       ``(4) Approval.--The Director shall review each submission 
     by an enterprise, including a housing plan submitted under 
     this subsection, and, not later than 30 days after 
     submission, approve or disapprove the plan or other action. 
     The Director may extend the period for approval or 
     disapproval for a single additional 30-day period if the 
     Director determines it necessary. The Director shall approve 
     any plan that the Director determines is likely to succeed, 
     and conforms with the Federal National Mortgage Association 
     Charter Act or the Federal Home Loan Mortgage Corporation Act 
     (as applicable), this title, and any other applicable 
     provision of law.
       ``(5) Notice of approval and disapproval.--The Director 
     shall provide written notice to any enterprise submitting a 
     housing plan of the approval or disapproval of the plan 
     (which shall include the reasons for any disapproval of the 
     plan) and of any extension of the period for approval or 
     disapproval.
       ``(6) Resubmission.--If the initial housing plan submitted 
     by an enterprise under this section is disapproved, the 
     enterprise shall submit an amended plan acceptable to the 
     Director not later than 30 days after such disapproval, or 
     such longer period that the Director determines is in the 
     public interest.
       ``(7) Additional remedies for failure to meet goals.--In 
     addition to ordering a housing plan under this section, 
     issuing a cease and desist order under section 1341, and 
     ordering civil money penalties under section

[[Page 5276]]

     1345, the Director may seek other actions when an enterprise 
     fails to meet a goal, including requesting that the Director 
     exercise appropriate enforcement authority available to the 
     Director under this title to prohibit the enterprise from 
     entering into new activities, to freeze any pending approval 
     of new activities, and to order the enterprise to suspend 
     activities pending its achievement of the goal.'';
       (4) by striking section 1338 (12 U.S.C. 4568);
       (5) by striking from the heading of subpart C ``of Housing 
     Goals'';
       (6) by striking section 1341 (12 U.S.C. 4581) and inserting 
     the following:

     ``SEC. 1341. CEASE-AND-DESIST PROCEEDINGS.

       ``(a) Grounds for Issuance.--The Director may issue and 
     serve a notice of charges under this section upon an 
     enterprise if the Director determines that--
       ``(1) the enterprise has failed to meet any housing goal 
     established under subpart B, following a written notice and 
     determination of such failure in accordance with section 
     1336;
       ``(2) the enterprise has failed to submit a report under 
     section 1327, following a notice of such failure, an 
     opportunity for comment by the enterprise, and a final 
     determination by the Director;
       ``(3) the enterprise has failed to submit the information 
     required under subsection (m) or (n) of section 309 of the 
     Federal National Mortgage Association Charter Act, subsection 
     (e) or (f) of section 307 of the Federal Home Loan Mortgage 
     Corporation Act, or section 1337 of this title;
       ``(4) the enterprise has violated any provision of part 2 
     of this title or any order, rule, or regulation under part 2;
       ``(5) the enterprise has failed to submit a housing plan or 
     perform its responsibilities under a remedial order that 
     substantially complies with section 1336(c) within the 
     applicable period; or
       ``(6) the enterprise has failed to comply with a housing 
     plan under section 1336(c).
       ``(b) Procedure.--
       ``(1) Notice of charges.--Each notice of charges issued 
     under this section shall contain a statement of the facts 
     constituting the alleged conduct and shall fix a time and 
     place at which a hearing will be held to determine on the 
     record whether an order to cease and desist from such conduct 
     should issue.
       ``(2) Issuance of order.--If the Director finds on the 
     record made at a hearing described in paragraph (1) that any 
     conduct specified in the notice of charges has been 
     established (or the enterprise consents pursuant to section 
     1342(a)(4)), the Director may issue and serve upon the 
     enterprise an order requiring the enterprise to--
       ``(A) comply with the goals;
       ``(B) submit a report under section 1327;
       ``(C) comply with any provision of part 2 of this title or 
     any order, rule, or regulation under part 2;
       ``(D) submit a housing plan in compliance with section 
     1336(c);
       ``(E) comply with the housing plan in compliance with 
     section 1336(c); or
       ``(F) provide the information required under subsection (m) 
     or (n) of section 309 of the Federal National Mortgage 
     Association Charter Act, or subsection (e) or (f) of section 
     307 of the Federal Home Loan Mortgage Corporation Act.
       ``(c) Effective Date.--An order under this section shall 
     become effective upon the expiration of the 30-day period 
     beginning on the date of service of the order upon the 
     enterprise (except in the case of an order issued upon 
     consent, which shall become effective at the time specified 
     therein), and shall remain effective and enforceable as 
     provided in the order, except to the extent that the order is 
     stayed, modified, terminated, or set aside by action of the 
     Director of or otherwise, as provided in this subpart.''; and
       (7) by striking section 1345 and inserting the following:

     ``SEC. 1345. CIVIL MONEY PENALTIES.

       ``(a) Authority.--The Director may impose a civil money 
     penalty, in accordance with the provisions of this section, 
     on any enterprise that has failed to--
       ``(1) meet any housing goal established under subpart B, 
     following a written notice and determination of such failure 
     in accordance with section 1336(b);
       ``(2) submit a report under section 1327, following a 
     notice of such failure, an opportunity for comment by the 
     enterprise, and a final determination by the Director;
       ``(3) submit the information required under subsection (m) 
     or (n) of section 309 of the Federal National Mortgage 
     Association Charter Act or subsection (e) or (f) of section 
     307 of the Federal Home Loan Mortgage Corporation Act;
       ``(4) comply with any provision of part 2 of this title or 
     any order, rule, or regulation under part 2;
       ``(5) submit a housing plan or perform its responsibilities 
     under a remedial order issued pursuant to section 1336(c) 
     within the required period; or
       ``(6) comply with a housing plan for the enterprise under 
     section 1336(c).
       ``(b) Amount of Penalty.--The amount of a penalty under 
     this section, as determined by the Director, may not exceed--
       ``(1) for any failure described in paragraph (1), (5), or 
     (6) of subsection (a), $100,000 for each day that the failure 
     occurs; and
       ``(2) for any failure described in paragraph (2), (3), or 
     (4) of subsection (a), $50,000 for each day that the failure 
     occurs.
       ``(c) Procedures.--
       ``(1) Establishment.--The Director shall establish 
     standards and procedures governing the imposition of civil 
     money penalties under this section. Such standards and 
     procedures--
       ``(A) shall provide for the Director to notify the 
     enterprise in writing of the determination of the Director to 
     impose the penalty, which shall be made on the record;
       ``(B) shall provide for the imposition of a penalty only 
     after the enterprise has been given an opportunity for a 
     hearing on the record pursuant to section 1342; and
       ``(C) may provide for review by the Director of any 
     determination or order, or interlocutory ruling, arising from 
     a hearing.
       ``(2) Factors in determining amount of penalty.--In 
     determining the amount of a penalty under this section, the 
     Director shall give consideration to factors including--
       ``(A) the gravity of the offense;
       ``(B) any history of prior offenses;
       ``(C) ability to pay the penalty;
       ``(D) injury to the public;
       ``(E) benefits received;
       ``(F) deterrence of future violations;
       ``(G) the length of time that the enterprise should 
     reasonably take to achieve the goal; and
       ``(H) such other factors as the Director may determine, by 
     regulation, to be appropriate.
       ``(d) Action To Collect Penalty.--If an enterprise fails to 
     comply with an order by the Director imposing a civil money 
     penalty under this section, after the order is no longer 
     subject to review, as provided in sections 1342 and 1343, the 
     Director may request the Attorney General of the United 
     States to bring an action in the United States District Court 
     for the District of Columbia to obtain a monetary judgment 
     against the enterprise, and such other relief as may be 
     available. The monetary judgment may, in the court's 
     discretion, include the attorneys' fees and other expenses 
     incurred by the United States in connection with the action. 
     In an action under this subsection, the validity and 
     appropriateness of the order imposing the penalty shall not 
     be subject to review.
       ``(e) Settlement by Director.--The Director may compromise, 
     modify, or remit any civil money penalty which may be, or has 
     been, imposed under this section.
       ``(f) Deposit of Penalties.--The Director shall deposit any 
     civil money penalties collected under this section into the 
     General Fund of the Treasury.''.

                  Subtitle C--Prompt Corrective Action

     SEC. 2141. CRITICAL CAPITAL LEVELS.

       Section 1363 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4613) is 
     amended--
       (1) by redesignating paragraphs (1) through (3) as clauses 
     (i) through (iii), respectively, and indenting appropriately;
       (2) by striking ``this subtitle, the critical capital level 
     for each enterprise shall be the sum of--'' and inserting the 
     following: ``this subtitle, the critical capital level--
       ``(1) for each enterprise shall be--
       ``(A) the sum of--''; and
       (3) in paragraph (1)(A)(iii), as so designated by this 
     section, by striking the period at the end and inserting the 
     following: ``; or
       ``(B) such other level as the Director shall establish, by 
     regulation; and
       ``(2) for each Federal Home Loan Bank, shall be the level 
     that the Director shall establish, by regulation.''.

     SEC. 2142. CAPITAL CLASSIFICATIONS.

       Section 1364 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4614) is 
     amended--
       (1) in subsection (a)--
       (A) in paragraph (3)(A)--
       (i) by striking clause (i); and
       (ii) by redesignating clauses (ii) and (iii) as clauses (i) 
     and (ii), respectively; and
       (B) in paragraph (4)(A), by striking ``enterprise--'' and 
     all that follows through ``(ii) does'' and inserting 
     ``enterprise does'';
       (2) by striking subsection (b) and inserting the following:
       ``(b) Discretionary Classification.--
       ``(1) Grounds for reclassification.--The Director may 
     reclassify a regulated entity under paragraph (2) if--
       ``(A) at any time, the Director determines in writing that 
     a regulated entity is engaging in conduct that could result 
     in a rapid depletion of core capital, or that the value of 
     the property subject to mortgages held or securitized by an 
     enterprise, or the value of collateral pledged as security, 
     has decreased significantly;
       ``(B) after notice and an opportunity for hearing, the 
     Director determines that a regulated entity is in an unsafe 
     or unsound condition; or
       ``(C) pursuant to section 1371(b), the Director determines 
     that a regulated entity is engaging in an unsafe or unsound 
     practice.
       ``(2) Reclassification.--In addition to any other action 
     authorized under this title, including the reclassification 
     of a regulated entity for any reason not specified in this 
     subsection, if the Director takes any action described in 
     paragraph (1), the Director may reclassify a regulated 
     entity--

[[Page 5277]]

       ``(A) as `undercapitalized', if the regulated entity is 
     otherwise classified as adequately capitalized;
       ``(B) as `significantly undercapitalized', if the regulated 
     entity is otherwise classified as undercapitalized; and
       ``(C) as `critically undercapitalized', if the regulated 
     entity is otherwise classified as significantly 
     undercapitalized.''; and
       (3) by striking subsection (d) and inserting the following:
       ``(d) Restriction on Capital Distributions.--
       ``(1) In general.--A regulated entity shall make no capital 
     distribution if, after making the distribution, the regulated 
     entity would be undercapitalized.
       ``(2) Exception.--Notwithstanding paragraph (1), the 
     Director may permit a regulated entity to repurchase, redeem, 
     retire, or otherwise acquire shares or ownership interests if 
     the repurchase, redemption, retirement, or other 
     acquisition--
       ``(A) is made in connection with the issuance of additional 
     shares or obligations of the regulated entity in at least an 
     equivalent amount; and
       ``(B) will reduce the financial obligations of the 
     regulated entity or otherwise improve the financial condition 
     of the regulated entity.''.

     SEC. 2143. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED 
                   REGULATED ENTITIES.

       Section 1365 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4615) is 
     amended--
       (1) by striking ``the enterprise'' each place that term 
     appears and inserting ``the regulated entity'';
       (2) by striking ``An enterprise'' each place that term 
     appears and inserting ``A regulated entity'';
       (3) by striking ``an enterprise'' each place that term 
     appears and inserting ``a regulated entity'';
       (4) in subsection (a)--
       (A) by redesignating paragraphs (1) and (2) as paragraphs 
     (2) and (3), respectively;
       (B) by inserting before paragraph (2), as redesignated, the 
     following:
       ``(1) Required monitoring.--The Director shall--
       ``(A) closely monitor the condition of any undercapitalized 
     regulated entity;
       ``(B) closely monitor compliance with the capital 
     restoration plan, restrictions, and requirements imposed on 
     an undercapitalized regulated entity under this section; and
       ``(C) periodically review the plan, restrictions, and 
     requirements applicable to an undercapitalized regulated 
     entity to determine whether the plan, restrictions, and 
     requirements are achieving the purpose of this section.''; 
     and
       (C) by adding at the end the following:
       ``(4) Restriction of asset growth.--An undercapitalized 
     regulated entity shall not permit its average total assets 
     during any calendar quarter to exceed its average total 
     assets during the preceding calendar quarter, unless--
       ``(A) the Director has accepted the capital restoration 
     plan of the regulated entity;
       ``(B) any increase in total assets is consistent with the 
     capital restoration plan; and
       ``(C) the ratio of tangible equity to assets of the 
     regulated entity increases during the calendar quarter at a 
     rate sufficient to enable the regulated entity to become 
     adequately capitalized within a reasonable time.
       ``(5) Prior approval of acquisitions and new activities.--
     An undercapitalized regulated entity shall not, directly or 
     indirectly, acquire any interest in any entity or engage in 
     any new activity, unless--
       ``(A) the Director has accepted the capital restoration 
     plan of the regulated entity, the regulated entity is 
     implementing the plan, and the Director determines that the 
     proposed action is consistent with and will further the 
     achievement of the plan; or
       ``(B) the Director determines that the proposed action will 
     further the purpose of this subtitle.'';
       (5) in subsection (b)--
       (A) in the subsection heading, by striking 
     ``Discretionary'';
       (B) in the matter preceding paragraph (1), by striking 
     ``may'' and inserting ``shall''; and
       (C) in paragraph (2)--
       (i) by striking ``make, in good faith, reasonable efforts 
     necessary to''; and
       (ii) by striking the period at the end and inserting ``in 
     any material respect.''; and
       (6) by striking subsection (c) and inserting the following:
       ``(c) Other Discretionary Safeguards.--The Director may 
     take, with respect to an undercapitalized regulated entity, 
     any of the actions authorized to be taken under section 1366 
     with respect to a significantly undercapitalized regulated 
     entity, if the Director determines that such actions are 
     necessary to carry out the purpose of this subtitle.''.

     SEC. 2144. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY 
                   UNDERCAPITALIZED REGULATED ENTITIES.

       Section 1366 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4616) is 
     amended--
       (1) in subsection (a)(2), by striking ``undercapitalized 
     enterprise'' and inserting ``undercapitalized'';
       (2) by striking ``the enterprise'' each place that term 
     appears and inserting ``the regulated entity'';
       (3) by striking ``An enterprise'' each place that term 
     appears and inserting ``A regulated entity'';
       (4) by striking ``an enterprise'' each place that term 
     appears and inserting ``a regulated entity'';
       (5) in subsection (b)--
       (A) in the subsection heading, by striking ``Discretionary 
     Supervisory'' and inserting ``Specific'';
       (B) in the matter preceding paragraph (1), by striking 
     ``may, at any time, take any'' and inserting ``shall carry 
     out this section by taking, at any time, 1 or more'';
       (C) by striking paragraph (6);
       (D) by redesignating paragraph (5) as paragraph (6);
       (E) by inserting after paragraph (4) the following:
       ``(5) Improvement of management.--Take 1 or more of the 
     following actions:
       ``(A) New election of board.--Order a new election for the 
     board of directors of the regulated entity.
       ``(B) Dismissal of directors or executive officers.--
     Require the regulated entity to dismiss from office any 
     director or executive officer who had held office for more 
     than 180 days immediately before the date on which the 
     regulated entity became undercapitalized. Dismissal under 
     this subparagraph shall not be construed to be a removal 
     pursuant to the enforcement powers of the Director under 
     section 1377.
       ``(C) Employ qualified executive officers.--Require the 
     regulated entity to employ qualified executive officers (who, 
     if the Director so specifies, shall be subject to approval by 
     the Director).''; and
       (F) by adding at the end the following:
       ``(7) Other action.--Require the regulated entity to take 
     any other action that the Director determines will better 
     carry out the purpose of this section than any of the other 
     actions specified in this subsection.''; and
       (6) by striking subsection (c) and inserting the following:
       ``(c) Restriction on Compensation of Executive Officers.--A 
     regulated entity that is classified as significantly 
     undercapitalized in accordance with section 1364 may not, 
     without prior written approval by the Director--
       ``(1) pay any bonus to any executive officer; or
       ``(2) provide compensation to any executive officer at a 
     rate exceeding the average rate of compensation of that 
     officer (excluding bonuses, stock options, and profit 
     sharing) during the 12 calendar months preceding the calendar 
     month in which the regulated entity became significantly 
     undercapitalized.''.

     SEC. 2145. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED 
                   REGULATED ENTITIES.

       (a) In General.--Section 1367 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4617) is amended to read as follows:

     ``SEC. 1367. AUTHORITY OVER CRITICALLY UNDERCAPITALIZED 
                   REGULATED ENTITIES.

       ``(a) Appointment of the Agency as Conservator or 
     Receiver.--
       ``(1) In general.--Notwithstanding any other provision of 
     Federal or State law, the Director may appoint the Agency as 
     conservator or receiver for a regulated entity in the manner 
     provided under paragraph (2) or (4). All references to the 
     conservator or receiver under this section are references to 
     the Agency acting as conservator or receiver.
       ``(2) Discretionary appointment.--The Agency may, at the 
     discretion of the Director, be appointed conservator or 
     receiver for the purpose of reorganizing, rehabilitating, or 
     winding up the affairs of a regulated entity.
       ``(3) Grounds for discretionary appointment of conservator 
     or receiver.--The grounds for appointing conservator or 
     receiver for any regulated entity under paragraph (2) are as 
     follows:
       ``(A) Substantial dissipation.--Substantial dissipation of 
     assets or earnings due to--
       ``(i) any violation of any provision of Federal or State 
     law; or
       ``(ii) any unsafe or unsound practice.
       ``(B) Unsafe or unsound condition.--An unsafe or unsound 
     condition to transact business.
       ``(C) Cease-and-desist orders.--Any willful violation of a 
     cease-and-desist order that has become final.
       ``(D) Concealment.--Any concealment of the books, papers, 
     records, or assets of the regulated entity, or any refusal to 
     submit the books, papers, records, or affairs of the 
     regulated entity, for inspection to any examiner or to any 
     lawful agent of the Director.
       ``(E) Inability to meet obligations.--The regulated entity 
     is likely to be unable to pay its obligations or meet the 
     demands of its creditors in the normal course of business.
       ``(F) Losses.--The regulated entity has incurred or is 
     likely to incur losses that will deplete all or substantially 
     all of its capital, and there is no reasonable prospect for 
     the regulated entity to become adequately capitalized (as 
     defined in section 1364(a)(1)).
       ``(G) Violations of law.--Any violation of any law or 
     regulation, or any unsafe or unsound practice or condition 
     that is likely to--

[[Page 5278]]

       ``(i) cause insolvency or substantial dissipation of assets 
     or earnings; or
       ``(ii) weaken the condition of the regulated entity.
       ``(H) Consent.--The regulated entity, by resolution of its 
     board of directors or its shareholders or members, consents 
     to the appointment.
       ``(I) Undercapitalization.--The regulated entity is 
     undercapitalized or significantly undercapitalized (as 
     defined in section 1364(a)(3)), and--
       ``(i) has no reasonable prospect of becoming adequately 
     capitalized;
       ``(ii) fails to become adequately capitalized, as required 
     by--

       ``(I) section 1365(a)(1) with respect to a regulated 
     entity; or
       ``(II) section 1366(a)(1) with respect to a significantly 
     undercapitalized regulated entity;

       ``(iii) fails to submit a capital restoration plan 
     acceptable to the Agency within the time prescribed under 
     section 1369C; or
       ``(iv) materially fails to implement a capital restoration 
     plan submitted and accepted under section 1369C.
       ``(J) Critical undercapitalization.--The regulated entity 
     is critically undercapitalized, as defined in section 
     1364(a)(4).
       ``(K) Money laundering.--The Attorney General notifies the 
     Director in writing that the regulated entity has been found 
     guilty of a criminal offense under section 1956 or 1957 of 
     title 18, United States Code, or section 5322 or 5324 of 
     title 31, United States Code.
       ``(4) Mandatory receivership.--
       ``(A) In general.--The Director shall appoint the Agency as 
     receiver for a regulated entity if the Director determines, 
     in writing, that--
       ``(i) the assets of the regulated entity are, and during 
     the preceding 30 calendar days have been, less than the 
     obligations of the regulated entity to its creditors and 
     others; or
       ``(ii) the regulated entity is not, and during the 
     preceding 30 calendar days has not been, generally paying the 
     debts of the regulated entity (other than debts that are the 
     subject of a bona fide dispute) as such debts become due.
       ``(B) Periodic determination required for critically 
     undercapitalized regulated entity.--If a regulated entity is 
     critically undercapitalized, the Director shall make a 
     determination, in writing, as to whether the regulated entity 
     meets the criteria specified in clause (i) or (ii) of 
     subparagraph (A)--
       ``(i) not later than 30 calendar days after the regulated 
     entity initially becomes critically undercapitalized; and
       ``(ii) at least once during each succeeding 30-calendar day 
     period.
       ``(C) Determination not required if receivership already in 
     place.--Subparagraph (B) does not apply with respect to a 
     regulated entity in any period during which the Agency serves 
     as receiver for the regulated entity.
       ``(D) Receivership terminates conservatorship.--The 
     appointment of the Agency as receiver of a regulated entity 
     under this section shall immediately terminate any 
     conservatorship established for the regulated entity under 
     this title.
       ``(5) Judicial review.--
       ``(A) In general.--If the Agency is appointed conservator 
     or receiver under this section, the regulated entity may, 
     within 30 days of such appointment, bring an action in the 
     United States district court for the judicial district in 
     which the home office of such regulated entity is located, or 
     in the United States District Court for the District of 
     Columbia, for an order requiring the Agency to remove itself 
     as conservator or receiver.
       ``(B) Review.--Upon the filing of an action under 
     subparagraph (A), the court shall, upon the merits, dismiss 
     such action or direct the Agency to remove itself as such 
     conservator or receiver.
       ``(6) Directors not liable for acquiescing in appointment 
     of conservator or receiver.--The members of the board of 
     directors of a regulated entity shall not be liable to the 
     shareholders or creditors of the regulated entity for 
     acquiescing in or consenting in good faith to the appointment 
     of the Agency as conservator or receiver for that regulated 
     entity.
       ``(7) Agency not subject to any other federal agency.--When 
     acting as conservator or receiver, the Agency shall not be 
     subject to the direction or supervision of any other agency 
     of the United States or any State in the exercise of the 
     rights, powers, and privileges of the Agency.
       ``(b) Powers and Duties of the Agency as Conservator or 
     Receiver.--
       ``(1) Rulemaking authority of the agency.--The Agency may 
     prescribe such regulations as the Agency determines to be 
     appropriate regarding the conduct of conservatorships or 
     receiverships.
       ``(2) General powers.--
       ``(A) Successor to regulated entity.--The Agency shall, as 
     conservator or receiver, and by operation of law, immediately 
     succeed to--
       ``(i) all rights, titles, powers, and privileges of the 
     regulated entity, and of any stockholder, officer, or 
     director of such regulated entity with respect to the 
     regulated entity and the assets of the regulated entity; and
       ``(ii) title to the books, records, and assets of any other 
     legal custodian of such regulated entity.
       ``(B) Operate the regulated entity.--The Agency may, as 
     conservator or receiver--
       ``(i) take over the assets of and operate the regulated 
     entity with all the powers of the shareholders, the 
     directors, and the officers of the regulated entity and 
     conduct all business of the regulated entity;
       ``(ii) collect all obligations and money due the regulated 
     entity;
       ``(iii) perform all functions of the regulated entity in 
     the name of the regulated entity which are consistent with 
     the appointment as conservator or receiver;
       ``(iv) preserve and conserve the assets and property of the 
     regulated entity; and
       ``(v) provide by contract for assistance in fulfilling any 
     function, activity, action, or duty of the Agency as 
     conservator or receiver.
       ``(C) Functions of officers, directors, and shareholders of 
     a regulated entity.--The Agency may, by regulation or order, 
     provide for the exercise of any function by any stockholder, 
     director, or officer of any regulated entity for which the 
     Agency has been named conservator or receiver.
       ``(D) Powers as conservator.--The Agency may, as 
     conservator, take such action as may be--
       ``(i) necessary to put the regulated entity in a sound and 
     solvent condition; and
       ``(ii) appropriate to carry on the business of the 
     regulated entity and preserve and conserve the assets and 
     property of the regulated entity.
       ``(E) Additional powers as receiver.--In any case in which 
     the Agency is acting as receiver, the Agency shall place the 
     regulated entity in liquidation and proceed to realize upon 
     the assets of the regulated entity in such manner as the 
     Agency deems appropriate, including through the sale of 
     assets, the transfer of assets to a limited-life regulated 
     entity established under subsection (i), or the exercise of 
     any other rights or privileges granted to the Agency under 
     this paragraph.
       ``(F) Organization of new enterprise.--The Agency shall, as 
     receiver for an enterprise, organize a successor enterprise 
     that will operate pursuant to subsection (i).
       ``(G) Transfer or sale of assets and liabilities.--The 
     Agency may, as conservator or receiver, transfer or sell any 
     asset or liability of the regulated entity in default, and 
     may do so without any approval, assignment, or consent with 
     respect to such transfer or sale.
       ``(H) Payment of valid obligations.--The Agency, as 
     conservator or receiver, shall, to the extent of proceeds 
     realized from the performance of contracts or sale of the 
     assets of a regulated entity, pay all valid obligations of 
     the regulated entity that are due and payable at the time of 
     the appointment of the Agency as conservator or receiver, in 
     accordance with the prescriptions and limitations of this 
     section.
       ``(I) Subpoena authority.--
       ``(i) In general.--

       ``(I) Agency authority.--The Agency may, as conservator or 
     receiver, and for purposes of carrying out any power, 
     authority, or duty with respect to a regulated entity 
     (including determining any claim against the regulated entity 
     and determining and realizing upon any asset of any person in 
     the course of collecting money due the regulated entity), 
     exercise any power established under section 1348.
       ``(II) Applicability of law.--The provisions of section 
     1348 shall apply with respect to the exercise of any power 
     under this subparagraph, in the same manner as such 
     provisions apply under that section.

       ``(ii) Subpoena.--A subpoena or subpoena duces tecum may be 
     issued under clause (i) only by, or with the written approval 
     of, the Director, or the designee of the Director.
       ``(iii) Rule of construction.--This subsection shall not be 
     construed to limit any rights that the Agency, in any 
     capacity, might otherwise have under section 1317 or 1379B.
       ``(J) Incidental powers.--The Agency may, as conservator or 
     receiver--
       ``(i) exercise all powers and authorities specifically 
     granted to conservators or receivers, respectively, under 
     this section, and such incidental powers as shall be 
     necessary to carry out such powers; and
       ``(ii) take any action authorized by this section, which 
     the Agency determines is in the best interests of the 
     regulated entity or the Agency.
       ``(K) Other provisions.--
       ``(i) Shareholders and creditors of failed regulated 
     entity.--Notwithstanding any other provision of law, the 
     appointment of the Agency as receiver for a regulated entity 
     pursuant to paragraph (2) or (4) of subsection (a) and its 
     succession, by operation of law, to the rights, titles, 
     powers, and privileges described in subsection (b)(2)(A) 
     shall terminate all rights and claims that the stockholders 
     and creditors of the regulated entity may have against the 
     assets or charter of the regulated entity or the Agency 
     arising as a result of their status as stockholders or 
     creditors, except for their right to payment, resolution, or 
     other satisfaction of their claims, as permitted under 
     subsections (b)(9), (c), and (e).
       ``(ii) Assets of regulated entity.--Notwithstanding any 
     other provision of law, for

[[Page 5279]]

     purposes of this section, the charter of a regulated entity 
     shall not be considered an asset of the regulated entity.
       ``(3) Authority of receiver to determine claims.--
       ``(A) In general.--The Agency may, as receiver, determine 
     claims in accordance with the requirements of this subsection 
     and any regulations prescribed under paragraph (4).
       ``(B) Notice requirements.--The receiver, in any case 
     involving the liquidation or winding up of the affairs of a 
     closed regulated entity, shall--
       ``(i) promptly publish a notice to the creditors of the 
     regulated entity to present their claims, together with 
     proof, to the receiver by a date specified in the notice 
     which shall be not less than 90 days after the date of 
     publication of such notice; and
       ``(ii) republish such notice approximately 1 month and 2 
     months, respectively, after the date of publication under 
     clause (i).
       ``(C) Mailing required.--The receiver shall mail a notice 
     similar to the notice published under subparagraph (B)(i) at 
     the time of such publication to any creditor shown on the 
     books of the regulated entity--
       ``(i) at the last address of the creditor appearing in such 
     books; or
       ``(ii) upon discovery of the name and address of a claimant 
     not appearing on the books of the regulated entity, within 30 
     days after the discovery of such name and address.
       ``(4) Rulemaking authority relating to determination of 
     claims.--Subject to subsection (c), the Director may 
     prescribe regulations regarding the allowance or disallowance 
     of claims by the receiver and providing for administrative 
     determination of claims and review of such determination.
       ``(5) Procedures for determination of claims.--
       ``(A) Determination period.--
       ``(i) In general.--Before the end of the 180-day period 
     beginning on the date on which any claim against a regulated 
     entity is filed with the Agency as receiver, the Agency shall 
     determine whether to allow or disallow the claim and shall 
     notify the claimant of any determination with respect to such 
     claim.
       ``(ii) Extension of time.--The period described in clause 
     (i) may be extended by a written agreement between the 
     claimant and the Agency.
       ``(iii) Mailing of notice sufficient.--The requirements of 
     clause (i) shall be deemed to be satisfied if the notice of 
     any determination with respect to any claim is mailed to the 
     last address of the claimant which appears--

       ``(I) on the books of the regulated entity;
       ``(II) in the claim filed by the claimant; or
       ``(III) in documents submitted in proof of the claim.

       ``(iv) Contents of notice of disallowance.--If any claim 
     filed under clause (i) is disallowed, the notice to the 
     claimant shall contain--

       ``(I) a statement of each reason for the disallowance; and
       ``(II) the procedures available for obtaining agency review 
     of the determination to disallow the claim or judicial 
     determination of the claim.

       ``(B) Allowance of proven claim.--The receiver shall allow 
     any claim received on or before the date specified in the 
     notice published under paragraph (3)(B)(i) by the receiver 
     from any claimant which is proved to the satisfaction of the 
     receiver.
       ``(C) Disallowance of claims filed after filing period.--
     Claims filed after the date specified in the notice published 
     under paragraph (3)(B)(i), or the date specified under 
     paragraph (3)(C), shall be disallowed and such disallowance 
     shall be final.
       ``(D) Authority to disallow claims.--
       ``(i) In general.--The receiver may disallow any portion of 
     any claim by a creditor or claim of security, preference, or 
     priority which is not proved to the satisfaction of the 
     receiver.
       ``(ii) Payments to less than fully secured creditors.--In 
     the case of a claim of a creditor against a regulated entity 
     which is secured by any property or other asset of such 
     regulated entity, the receiver--

       ``(I) may treat the portion of such claim which exceeds an 
     amount equal to the fair market value of such property or 
     other asset as an unsecured claim against the regulated 
     entity; and
       ``(II) may not make any payment with respect to such 
     unsecured portion of the claim, other than in connection with 
     the disposition of all claims of unsecured creditors of the 
     regulated entity.

       ``(iii) Exceptions.--No provision of this paragraph shall 
     apply with respect to--

       ``(I) any extension of credit from any Federal Reserve Bank 
     or the United States Treasury; or
       ``(II) any security interest in the assets of the regulated 
     entity securing any such extension of credit.

       ``(E) No judicial review of determination pursuant to 
     subparagraph (d).--No court may review the determination of 
     the Agency under subparagraph (D) to disallow a claim.
       ``(F) Legal effect of filing.--
       ``(i) Statute of limitation tolled.--For purposes of any 
     applicable statute of limitations, the filing of a claim with 
     the receiver shall constitute a commencement of an action.
       ``(ii) No prejudice to other actions.--Subject to paragraph 
     (10), the filing of a claim with the receiver shall not 
     prejudice any right of the claimant to continue any action 
     which was filed before the date of the appointment of the 
     receiver, subject to the determination of claims by the 
     receiver.
       ``(6) Provision for judicial determination of claims.--
       ``(A) In general.--The claimant may file suit on a claim 
     (or continue an action commenced before the appointment of 
     the receiver) in the district or territorial court of the 
     United States for the district within which the principal 
     place of business of the regulated entity is located or the 
     United States District Court for the District of Columbia 
     (and such court shall have jurisdiction to hear such claim), 
     before the end of the 60-day period beginning on the earlier 
     of--
       ``(i) the end of the period described in paragraph 
     (5)(A)(i) with respect to any claim against a regulated 
     entity for which the Agency is receiver; or
       ``(ii) the date of any notice of disallowance of such claim 
     pursuant to paragraph (5)(A)(i).
       ``(B) Statute of limitations.--A claim shall be deemed to 
     be disallowed (other than any portion of such claim which was 
     allowed by the receiver), and such disallowance shall be 
     final, and the claimant shall have no further rights or 
     remedies with respect to such claim, if the claimant fails, 
     before the end of the 60-day period described under 
     subparagraph (A), to file suit on such claim (or continue an 
     action commenced before the appointment of the receiver).
       ``(7) Review of claims.--
       ``(A) Other review procedures.--
       ``(i) In general.--The Agency shall establish such 
     alternative dispute resolution processes as may be 
     appropriate for the resolution of claims filed under 
     paragraph (5)(A)(i).
       ``(ii) Criteria.--In establishing alternative dispute 
     resolution processes, the Agency shall strive for procedures 
     which are expeditious, fair, independent, and low cost.
       ``(iii) Voluntary binding or nonbinding procedures.--The 
     Agency may establish both binding and nonbinding processes 
     under this subparagraph, which may be conducted by any 
     government or private party. All parties, including the 
     claimant and the Agency, must agree to the use of the process 
     in a particular case.
       ``(B) Consideration of incentives.--The Agency shall seek 
     to develop incentives for claimants to participate in the 
     alternative dispute resolution process.
       ``(8) Expedited determination of claims.--
       ``(A) Establishment required.--The Agency shall establish a 
     procedure for expedited relief outside of the routine claims 
     process established under paragraph (5) for claimants who--
       ``(i) allege the existence of legally valid and enforceable 
     or perfected security interests in assets of any regulated 
     entity for which the Agency has been appointed receiver; and
       ``(ii) allege that irreparable injury will occur if the 
     routine claims procedure is followed.
       ``(B) Determination period.--Before the end of the 90-day 
     period beginning on the date on which any claim is filed in 
     accordance with the procedures established under subparagraph 
     (A), the Director shall--
       ``(i) determine--

       ``(I) whether to allow or disallow such claim; or
       ``(II) whether such claim should be determined pursuant to 
     the procedures established under paragraph (5); and

       ``(ii) notify the claimant of the determination, and if the 
     claim is disallowed, provide a statement of each reason for 
     the disallowance and the procedure for obtaining agency 
     review or judicial determination.
       ``(C) Period for filing or renewing suit.--Any claimant who 
     files a request for expedited relief shall be permitted to 
     file a suit, or to continue a suit filed before the date of 
     appointment of the receiver, seeking a determination of the 
     rights of the claimant with respect to such security interest 
     after the earlier of--
       ``(i) the end of the 90-day period beginning on the date of 
     the filing of a request for expedited relief; or
       ``(ii) the date on which the Agency denies the claim.
       ``(D) Statute of limitations.--If an action described under 
     subparagraph (C) is not filed, or the motion to renew a 
     previously filed suit is not made, before the end of the 30-
     day period beginning on the date on which such action or 
     motion may be filed under subparagraph (B), the claim shall 
     be deemed to be disallowed as of the end of such period 
     (other than any portion of such claim which was allowed by 
     the receiver), such disallowance shall be final, and the 
     claimant shall have no further rights or remedies with 
     respect to such claim.
       ``(E) Legal effect of filing.--
       ``(i) Statute of limitation tolled.--For purposes of any 
     applicable statute of limitations, the filing of a claim with 
     the receiver shall constitute a commencement of an action.
       ``(ii) No prejudice to other actions.--Subject to paragraph 
     (10), the filing of a claim with the receiver shall not 
     prejudice any

[[Page 5280]]

     right of the claimant to continue any action that was filed 
     before the appointment of the receiver, subject to the 
     determination of claims by the receiver.
       ``(9) Payment of claims.--
       ``(A) In general.--The receiver may, in the discretion of 
     the receiver, and to the extent that funds are available from 
     the assets of the regulated entity, pay creditor claims, in 
     such manner and amounts as are authorized under this section, 
     which are--
       ``(i) allowed by the receiver;
       ``(ii) approved by the Agency pursuant to a final 
     determination pursuant to paragraph (7) or (8); or
       ``(iii) determined by the final judgment of any court of 
     competent jurisdiction.
       ``(B) Agreements against the interest of the agency.--No 
     agreement that tends to diminish or defeat the interest of 
     the Agency in any asset acquired by the Agency as receiver 
     under this section shall be valid against the Agency unless 
     such agreement is in writing and executed by an authorized 
     officer or representative of the regulated entity.
       ``(C) Payment of dividends on claims.--The receiver may, in 
     the sole discretion of the receiver, pay from the assets of 
     the regulated entity dividends on proved claims at any time, 
     and no liability shall attach to the Agency by reason of any 
     such payment, for failure to pay dividends to a claimant 
     whose claim is not proved at the time of any such payment.
       ``(D) Rulemaking authority of the director.--The Director 
     may prescribe such rules, including definitions of terms, as 
     the Director deems appropriate to establish a single uniform 
     interest rate for, or to make payments of post-insolvency 
     interest to creditors holding proven claims against the 
     receivership estates of regulated entity, following 
     satisfaction by the receiver of the principal amount of all 
     creditor claims.
       ``(10) Suspension of legal actions.--
       ``(A) In general.--After the appointment of a conservator 
     or receiver for a regulated entity, the conservator or 
     receiver may, in any judicial action or proceeding to which 
     such regulated entity is or becomes a party, request a stay 
     for a period not to exceed--
       ``(i) 45 days, in the case of any conservator; and
       ``(ii) 90 days, in the case of any receiver.
       ``(B) Grant of stay by all courts required.--Upon receipt 
     of a request by the conservator or receiver under 
     subparagraph (A) for a stay of any judicial action or 
     proceeding in any court with jurisdiction of such action or 
     proceeding, the court shall grant such stay as to all 
     parties.
       ``(11) Additional rights and duties.--
       ``(A) Prior final adjudication.--The Agency shall abide by 
     any final unappealable judgment of any court of competent 
     jurisdiction which was rendered before the appointment of the 
     Agency as conservator or receiver.
       ``(B) Rights and remedies of conservator or receiver.--In 
     the event of any appealable judgment, the Agency as 
     conservator or receiver--
       ``(i) shall have all of the rights and remedies available 
     to the regulated entity (before the appointment of such 
     conservator or receiver) and the Agency, including removal to 
     Federal court and all appellate rights; and
       ``(ii) shall not be required to post any bond in order to 
     pursue such remedies.
       ``(C) No attachment or execution.--No attachment or 
     execution may issue by any court upon assets in the 
     possession of the receiver, or upon the charter, of a 
     regulated entity for which the Agency has been appointed 
     receiver.
       ``(D) Limitation on judicial review.--Except as otherwise 
     provided in this subsection, no court shall have jurisdiction 
     over--
       ``(i) any claim or action for payment from, or any action 
     seeking a determination of rights with respect to, the assets 
     or charter of any regulated entity for which the Agency has 
     been appointed receiver; or
       ``(ii) any claim relating to any act or omission of such 
     regulated entity or the Agency as receiver.
       ``(E) Disposition of assets.--In exercising any right, 
     power, privilege, or authority as conservator or receiver in 
     connection with any sale or disposition of assets of a 
     regulated entity for which the Agency has been appointed 
     conservator or receiver, the Agency shall conduct its 
     operations in a manner which--
       ``(i) maximizes the net present value return from the sale 
     or disposition of such assets;
       ``(ii) minimizes the amount of any loss realized in the 
     resolution of cases; and
       ``(iii) ensures adequate competition and fair and 
     consistent treatment of offerors.
       ``(12) Statute of limitations for actions brought by 
     conservator or receiver.--
       ``(A) In general.--Notwithstanding any provision of any 
     contract, the applicable statute of limitations with regard 
     to any action brought by the Agency as conservator or 
     receiver shall be--
       ``(i) in the case of any contract claim, the longer of--

       ``(I) the 6-year period beginning on the date on which the 
     claim accrues; or
       ``(II) the period applicable under State law; and

       ``(ii) in the case of any tort claim, the longer of--

       ``(I) the 3-year period beginning on the date on which the 
     claim accrues; or
       ``(II) the period applicable under State law.

       ``(B) Determination of the date on which a claim accrues.--
     For purposes of subparagraph (A), the date on which the 
     statute of limitations begins to run on any claim described 
     in such subparagraph shall be the later of--
       ``(i) the date of the appointment of the Agency as 
     conservator or receiver; or
       ``(ii) the date on which the cause of action accrues.
       ``(13) Revival of expired state causes of action.--
       ``(A) In general.--In the case of any tort claim described 
     under subparagraph (B) for which the statute of limitations 
     applicable under State law with respect to such claim has 
     expired not more than 5 years before the appointment of the 
     Agency as conservator or receiver, the Agency may bring an 
     action as conservator or receiver on such claim without 
     regard to the expiration of the statute of limitations 
     applicable under State law.
       ``(B) Claims described.--A tort claim referred to under 
     subparagraph (A) is a claim arising from fraud, intentional 
     misconduct resulting in unjust enrichment, or intentional 
     misconduct resulting in substantial loss to the regulated 
     entity.
       ``(14) Accounting and recordkeeping requirements.--
       ``(A) In general.--The Agency as conservator or receiver 
     shall, consistent with the accounting and reporting practices 
     and procedures established by the Agency, maintain a full 
     accounting of each conservatorship and receivership or other 
     disposition of a regulated entity in default.
       ``(B) Annual accounting or report.--With respect to each 
     conservatorship or receivership, the Agency shall make an 
     annual accounting or report available to the Board, the 
     Comptroller General of the United States, the Committee on 
     Banking, Housing, and Urban Affairs of the Senate, and the 
     Committee on Financial Services of the House of 
     Representatives.
       ``(C) Availability of reports.--Any report prepared under 
     subparagraph (B) shall be made available by the Agency upon 
     request to any shareholder of a regulated entity or any 
     member of the public.
       ``(D) Recordkeeping requirement.--After the end of the 6-
     year period beginning on the date on which the 
     conservatorship or receivership is terminated by the 
     Director, the Agency may destroy any records of such 
     regulated entity which the Agency, in the discretion of the 
     Agency, determines to be unnecessary, unless directed not to 
     do so by a court of competent jurisdiction or governmental 
     agency, or prohibited by law.
       ``(15) Fraudulent transfers.--
       ``(A) In general.--The Agency, as conservator or receiver, 
     may avoid a transfer of any interest of an entity-affiliated 
     party, or any person determined by the conservator or 
     receiver to be a debtor of the regulated entity, in property, 
     or any obligation incurred by such party or person, that was 
     made within 5 years of the date on which the Agency was 
     appointed conservator or receiver, if such party or person 
     voluntarily or involuntarily made such transfer or incurred 
     such liability with the intent to hinder, delay, or defraud 
     the regulated entity, the Agency, the conservator, or 
     receiver.
       ``(B) Right of recovery.--To the extent a transfer is 
     avoided under subparagraph (A), the conservator or receiver 
     may recover, for the benefit of the regulated entity, the 
     property transferred, or, if a court so orders, the value of 
     such property (at the time of such transfer) from--
       ``(i) the initial transferee of such transfer or the 
     entity-affiliated party or person for whose benefit such 
     transfer was made; or
       ``(ii) any immediate or mediate transferee of any such 
     initial transferee.
       ``(C) Rights of transferee or obligee.--The conservator or 
     receiver may not recover under subparagraph (B) from--
       ``(i) any transferee that takes for value, including 
     satisfaction or securing of a present or antecedent debt, in 
     good faith; or
       ``(ii) any immediate or mediate good faith transferee of 
     such transferee.
       ``(D) Rights under this paragraph.--The rights under this 
     paragraph of the conservator or receiver described under 
     subparagraph (A) shall be superior to any rights of a trustee 
     or any other party (other than any party which is a Federal 
     agency) under title 11, United States Code.
       ``(16) Attachment of assets and other injunctive relief.--
     Subject to paragraph (17), any court of competent 
     jurisdiction may, at the request of the conservator or 
     receiver, issue an order in accordance with Rule 65 of the 
     Federal Rules of Civil Procedure, including an order placing 
     the assets of any person designated by the conservator or 
     receiver under the control of the court, and appointing a 
     trustee to hold such assets.
       ``(17) Standards of proof.--Rule 65 of the Federal Rules of 
     Civil Procedure shall apply with respect to any proceeding 
     under paragraph (16) without regard to the requirement of 
     such rule that the applicant show that the injury, loss, or 
     damage is irreparable and immediate.

[[Page 5281]]

       ``(18) Treatment of claims arising from breach of contracts 
     executed by the conservator or receiver.--
       ``(A) In general.--Notwithstanding any other provision of 
     this subsection, any final and unappealable judgment for 
     monetary damages entered against the conservator or receiver 
     for the breach of an agreement executed or approved in 
     writing by the conservator or receiver after the date of its 
     appointment, shall be paid as an administrative expense of 
     the conservator or receiver.
       ``(B) No limitation of power.--Nothing in this paragraph 
     shall be construed to limit the power of the conservator or 
     receiver to exercise any rights under contract or law, 
     including to terminate, breach, cancel, or otherwise 
     discontinue such agreement.
       ``(19) General exceptions.--
       ``(A) Limitations.--The rights of the conservator or 
     receiver appointed under this section shall be subject to the 
     limitations on the powers of a receiver under sections 402 
     through 407 of the Federal Deposit Insurance Corporation 
     Improvement Act of 1991 (12 U.S.C. 4402 through 4407).
       ``(B) Mortgages held in trust.--
       ``(i) In general.--Any mortgage, pool of mortgages, or 
     interest in a pool of mortgages held in trust, custodial, or 
     agency capacity by an enterprise for the benefit of any 
     person other than the enterprise shall not be available to 
     satisfy the claims of creditors generally.
       ``(ii) Holding of mortgages.--Any mortgage, pool of 
     mortgages, or interest in a pool of mortgages described in 
     clause (i) shall be held by the conservator or receiver 
     appointed under this section for the beneficial owners of 
     such mortgage, pool of mortgages, or interest in accordance 
     with the terms of the agreement creating such trust, 
     custodial, or other agency arrangement.
       ``(iii) Liability of conservator or receiver.--The 
     liability of the conservator or receiver appointed under this 
     section for damages shall, in the case of any contingent or 
     unliquidated claim relating to the mortgages held in trust, 
     be estimated in accordance with in the regulations of the 
     Director.
       ``(c) Priority of Expenses and Unsecured Claims.--
       ``(1) In general.--Unsecured claims against a regulated 
     entity, or the receiver therefor, that are proven to the 
     satisfaction of the receiver shall have priority in the 
     following order:
       ``(A) Administrative expenses of the receiver.
       ``(B) Any other general or senior liability of the 
     regulated entity (which is not a liability described under 
     subparagraph (C) or (D).
       ``(C) Any obligation subordinated to general creditors 
     (which is not an obligation described under subparagraph 
     (D)).
       ``(D) Any obligation to shareholders or members arising as 
     a result of their status as shareholder or members.
       ``(2) Creditors similarly situated.--All creditors that are 
     similarly situated under paragraph (1) shall be treated in a 
     similar manner, except that the receiver may take any action 
     (including making payments) that does not comply with this 
     subsection, if--
       ``(A) the Director determines that such action is necessary 
     to maximize the value of the assets of the regulated entity, 
     to maximize the present value return from the sale or other 
     disposition of the assets of the regulated entity, or to 
     minimize the amount of any loss realized upon the sale or 
     other disposition of the assets of the regulated entity 
     assets; and
       ``(B) all creditors that are similarly situated under 
     paragraph (1) receive not less than the amount provided in 
     subsection (e)(2).
       ``(3) Definition.--As used in this subsection, the term 
     `administrative expenses of the receiver' includes--
       ``(A) the actual, necessary costs and expenses incurred by 
     the receiver in preserving the assets of a failed regulated 
     entity or liquidating or otherwise resolving the affairs of a 
     failed regulated entity; and
       ``(B) any obligations that the receiver determines are 
     necessary and appropriate to facilitate the smooth and 
     orderly liquidation or other resolution of the regulated 
     entity.
       ``(d) Provisions Relating to Contracts Entered Into Before 
     Appointment of Conservator or Receiver.--
       ``(1) Authority to repudiate contracts.--In addition to any 
     other rights a conservator or receiver may have, the 
     conservator or receiver for any regulated entity may 
     disaffirm or repudiate any contract or lease--
       ``(A) to which such regulated entity is a party;
       ``(B) the performance of which the conservator or receiver, 
     in its sole discretion, determines to be burdensome; and
       ``(C) the disaffirmance or repudiation of which the 
     conservator or receiver determines, in its sole discretion, 
     will promote the orderly administration of the affairs of the 
     regulated entity.
       ``(2) Timing of repudiation.--The conservator or receiver 
     shall determine whether or not to exercise the rights of 
     repudiation under this subsection within a reasonable period 
     following such appointment.
       ``(3) Claims for damages for repudiation.--
       ``(A) In general.--Except as otherwise provided under 
     subparagraph (C) and paragraphs (4), (5), and (6), the 
     liability of the conservator or receiver for the 
     disaffirmance or repudiation of any contract pursuant to 
     paragraph (1) shall be--
       ``(i) limited to actual direct compensatory damages; and
       ``(ii) determined as of--

       ``(I) the date of the appointment of the conservator or 
     receiver; or
       ``(II) in the case of any contract or agreement referred to 
     in paragraph (8), the date of the disaffirmance or 
     repudiation of such contract or agreement.

       ``(B) No liability for other damages.--For purposes of 
     subparagraph (A), the term `actual direct compensatory 
     damages' shall not include--
       ``(i) punitive or exemplary damages;
       ``(ii) damages for lost profits or opportunity; or
       ``(iii) damages for pain and suffering.
       ``(C) Measure of damages for repudiation of financial 
     contracts.--In the case of any qualified financial contract 
     or agreement to which paragraph (8) applies, compensatory 
     damages shall be--
       ``(i) deemed to include normal and reasonable costs of 
     cover or other reasonable measures of damages utilized in the 
     industries for such contract and agreement claims; and
       ``(ii) paid in accordance with this subsection and 
     subsection (e), except as otherwise specifically provided in 
     this section.
       ``(4) Leases under which the regulated entity is the 
     lessee.--
       ``(A) In general.--If the conservator or receiver 
     disaffirms or repudiates a lease under which the regulated 
     entity was the lessee, the conservator or receiver shall not 
     be liable for any damages (other than damages determined 
     under subparagraph (B)) for the disaffirmance or repudiation 
     of such lease.
       ``(B) Payments of rent.--Notwithstanding subparagraph (A), 
     the lessor under a lease to which that subparagraph applies 
     shall--
       ``(i) be entitled to the contractual rent accruing before 
     the later of the date on which--

       ``(I) the notice of disaffirmance or repudiation is mailed; 
     or
       ``(II) the disaffirmance or repudiation becomes effective, 
     unless the lessor is in default or breach of the terms of the 
     lease;

       ``(ii) have no claim for damages under any acceleration 
     clause or other penalty provision in the lease; and
       ``(iii) have a claim for any unpaid rent, subject to all 
     appropriate offsets and defenses, due as of the date of the 
     appointment, which shall be paid in accordance with this 
     subsection and subsection (e).
       ``(5) Leases under which the regulated entity is the 
     lessor.--
       ``(A) In general.--If the conservator or receiver 
     repudiates an unexpired written lease of real property of the 
     regulated entity under which the regulated entity is the 
     lessor and the lessee is not, as of the date of such 
     repudiation, in default, the lessee under such lease may 
     either--
       ``(i) treat the lease as terminated by such repudiation; or
       ``(ii) remain in possession of the leasehold interest for 
     the balance of the term of the lease, unless the lessee 
     defaults under the terms of the lease after the date of such 
     repudiation.
       ``(B) Provisions applicable to lessee remaining in 
     possession.--If any lessee under a lease described under 
     subparagraph (A) remains in possession of a leasehold 
     interest under clause (ii) of subparagraph (A)--
       ``(i) the lessee--

       ``(I) shall continue to pay the contractual rent pursuant 
     to the terms of the lease after the date of the repudiation 
     of such lease; and
       ``(II) may offset against any rent payment which accrues 
     after the date of the repudiation of the lease, and any 
     damages which accrue after such date due to the 
     nonperformance of any obligation of the regulated entity 
     under the lease after such date; and

       ``(ii) the conservator or receiver shall not be liable to 
     the lessee for any damages arising after such date as a 
     result of the repudiation, other than the amount of any 
     offset allowed under clause (i)(II).
       ``(6) Contracts for the sale of real property.--
       ``(A) In general.--If the conservator or receiver 
     repudiates any contract for the sale of real property and the 
     purchaser of such real property under such contract is in 
     possession, and is not, as of the date of such repudiation, 
     in default, such purchaser may either--
       ``(i) treat the contract as terminated by such repudiation; 
     or
       ``(ii) remain in possession of such real property.
       ``(B) Provisions applicable to purchaser remaining in 
     possession.--If any purchaser of real property under any 
     contract described under subparagraph (A) remains in 
     possession of such property under clause (ii) of subparagraph 
     (A)--
       ``(i) the purchaser--

       ``(I) shall continue to make all payments due under the 
     contract after the date of the repudiation of the contract; 
     and
       ``(II) may offset against any such payments any damages 
     which accrue after such date due to the nonperformance (after 
     such date) of any obligation of the regulated entity under 
     the contract; and

[[Page 5282]]

       ``(ii) the conservator or receiver shall--

       ``(I) not be liable to the purchaser for any damages 
     arising after such date as a result of the repudiation, other 
     than the amount of any offset allowed under clause (i)(II);
       ``(II) deliver title to the purchaser in accordance with 
     the provisions of the contract; and
       ``(III) have no obligation under the contract other than 
     the performance required under subclause (II).

       ``(C) Assignment and sale allowed.--
       ``(i) In general.--No provision of this paragraph shall be 
     construed as limiting the right of the conservator or 
     receiver to assign the contract described under subparagraph 
     (A), and sell the property subject to the contract and the 
     provisions of this paragraph.
       ``(ii) No liability after assignment and sale.--If an 
     assignment and sale described under clause (i) is 
     consummated, the conservator or receiver shall have no 
     further liability under the contract described under 
     subparagraph (A), or with respect to the real property which 
     was the subject of such contract.
       ``(7) Service contracts.--
       ``(A) Services performed before appointment.--In the case 
     of any contract for services between any person and any 
     regulated entity for which the Agency has been appointed 
     conservator or receiver, any claim of such person for 
     services performed before the appointment of the conservator 
     or receiver shall be--
       ``(i) a claim to be paid in accordance with subsections (b) 
     and (e); and
       ``(ii) deemed to have arisen as of the date on which the 
     conservator or receiver was appointed.
       ``(B) Services performed after appointment and prior to 
     repudiation.--If, in the case of any contract for services 
     described under subparagraph (A), the conservator or receiver 
     accepts performance by the other person before the 
     conservator or receiver makes any determination to exercise 
     the right of repudiation of such contract under this 
     section--
       ``(i) the other party shall be paid under the terms of the 
     contract for the services performed; and
       ``(ii) the amount of such payment shall be treated as an 
     administrative expense of the conservatorship or 
     receivership.
       ``(C) Acceptance of performance no bar to subsequent 
     repudiation.--The acceptance by the conservator or receiver 
     of services referred to under subparagraph (B) in connection 
     with a contract described in such subparagraph shall not 
     affect the right of the conservator or receiver to repudiate 
     such contract under this section at any time after such 
     performance.
       ``(8) Certain qualified financial contracts.--
       ``(A) Rights of parties to contracts.--Subject to 
     paragraphs (9) and (10), and notwithstanding any other 
     provision of this title (other than subsection (b)(9)(B) of 
     this section), any other Federal law, or the law of any 
     State, no person shall be stayed or prohibited from 
     exercising--
       ``(i) any right of that person to cause the termination, 
     liquidation, or acceleration of any qualified financial 
     contract with a regulated entity that arises upon the 
     appointment of the Agency as receiver for such regulated 
     entity at any time after such appointment;
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement relating to one or 
     more qualified financial contracts; or
       ``(iii) any right to offset or net out any termination 
     value, payment amount, or other transfer obligation arising 
     under or in connection with 1 or more contracts and 
     agreements described in clause (i), including any master 
     agreement for such contracts or agreements.
       ``(B) Applicability of other provisions.--Subsection 
     (b)(10) shall apply in the case of any judicial action or 
     proceeding brought against any receiver referred to under 
     subparagraph (A), or the regulated entity for which such 
     receiver was appointed, by any party to a contract or 
     agreement described under subparagraph (A)(i) with such 
     regulated entity.
       ``(C) Certain transfers not avoidable.--
       ``(i) In general.--Notwithstanding paragraph (11), or any 
     other provision of Federal or State law relating to the 
     avoidance of preferential or fraudulent transfers, the 
     Agency, whether acting as such or as conservator or receiver 
     of a regulated entity, may not avoid any transfer of money or 
     other property in connection with any qualified financial 
     contract with a regulated entity.
       ``(ii) Exception for certain transfers.--Clause (i) shall 
     not apply to any transfer of money or other property in 
     connection with any qualified financial contract with a 
     regulated entity if the Agency determines that the transferee 
     had actual intent to hinder, delay, or defraud such regulated 
     entity, the creditors of such regulated entity, or any 
     conservator or receiver appointed for such regulated entity.
       ``(D) Certain contracts and agreements defined.--In this 
     subsection the following definitions shall apply:
       ``(i) Qualified financial contract.--The term `qualified 
     financial contract' means any securities contract, commodity 
     contract, forward contract, repurchase agreement, swap 
     agreement, and any similar agreement that the Agency 
     determines by regulation, resolution, or order to be a 
     qualified financial contract for purposes of this paragraph.
       ``(ii) Securities contract.--The term `securities 
     contract'--

       ``(I) means a contract for the purchase, sale, or loan of a 
     security, a certificate of deposit, a mortgage loan, or any 
     interest in a mortgage loan, a group or index of securities, 
     certificates of deposit, or mortgage loans or interests 
     therein (including any interest therein or based on the value 
     thereof) or any option on any of the foregoing, including any 
     option to purchase or sell any such security, certificate of 
     deposit, mortgage loan, interest, group or index, or option, 
     and including any repurchase or reverse repurchase 
     transaction on any such security, certificate of deposit, 
     mortgage loan, interest, group or index, or option;
       ``(II) does not include any purchase, sale, or repurchase 
     obligation under a participation in a commercial mortgage 
     loan, unless the Agency determines by regulation, resolution, 
     or order to include any such agreement within the meaning of 
     such term;
       ``(III) means any option entered into on a national 
     securities exchange relating to foreign currencies;
       ``(IV) means the guarantee by or to any securities clearing 
     agency of any settlement of cash, securities, certificates of 
     deposit, mortgage loans or interests therein, group or index 
     of securities, certificates of deposit, or mortgage loans or 
     interests therein (including any interest therein or based on 
     the value thereof) or option on any of the foregoing, 
     including any option to purchase or sell any such security, 
     certificate of deposit, mortgage loan, interest, group or 
     index, or option;
       ``(V) means any margin loan;
       ``(VI) means any other agreement or transaction that is 
     similar to any agreement or transaction referred to in this 
     clause;
       ``(VII) means any combination of the agreements or 
     transactions referred to in this clause;
       ``(VIII) means any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(IX) means a master agreement that provides for an 
     agreement or transaction referred to in subclause (I), (III), 
     (IV), (V), (VI), (VII), or (VIII), together with all 
     supplements to any such master agreement, without regard to 
     whether the master agreement provides for an agreement or 
     transaction that is not a securities contract under this 
     clause, except that the master agreement shall be considered 
     to be a securities contract under this clause only with 
     respect to each agreement or transaction under the master 
     agreement that is referred to in subclause (I), (III), (IV), 
     (V), (VI), (VII), or (VIII); and
       ``(X) means any security agreement or arrangement or other 
     credit enhancement related to any agreement or transaction 
     referred to in this clause, including any guarantee or 
     reimbursement obligation in connection with any agreement or 
     transaction referred to in this clause.

       ``(iii) Commodity contract.--The term `commodity contract' 
     means--

       ``(I) with respect to a futures commission merchant, a 
     contract for the purchase or sale of a commodity for future 
     delivery on, or subject to the rules of, a contract market or 
     board of trade;
       ``(II) with respect to a foreign futures commission 
     merchant, a foreign future;
       ``(III) with respect to a leverage transaction merchant, a 
     leverage transaction;
       ``(IV) with respect to a clearing organization, a contract 
     for the purchase or sale of a commodity for future delivery 
     on, or subject to the rules of, a contract market or board of 
     trade that is cleared by such clearing organization, or 
     commodity option traded on, or subject to the rules of, a 
     contract market or board of trade that is cleared by such 
     clearing organization;
       ``(V) with respect to a commodity options dealer, a 
     commodity option;
       ``(VI) any other agreement or transaction that is similar 
     to any agreement or transaction referred to in this clause;
       ``(VII) any combination of the agreements or transactions 
     referred to in this clause;
       ``(VIII) any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(IX) a master agreement that provides for an agreement or 
     transaction referred to in subclause (I), (II), (III), (IV), 
     (V), (VI), (VII), or (VIII), together with all supplements to 
     any such master agreement, without regard to whether the 
     master agreement provides for an agreement or transaction 
     that is not a commodity contract under this clause, except 
     that the master agreement shall be considered to be a 
     commodity contract under this clause only with respect to 
     each agreement or transaction under the master agreement that 
     is referred to in subclause (I), (II), (III), (IV), (V), 
     (VI), (VII), or (VIII); or
       ``(X) any security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in this clause, including any guarantee or reimbursement 
     obligation in connection with any agreement or transaction 
     referred to in this clause.

[[Page 5283]]

       ``(iv) Forward contract.--The term `forward contract' 
     means--

       ``(I) a contract (other than a commodity contract) for the 
     purchase, sale, or transfer of a commodity or any similar 
     good, article, service, right, or interest which is presently 
     or in the future becomes the subject of dealing in the 
     forward contract trade, or product or byproduct thereof, with 
     a maturity date more than 2 days after the date on which the 
     contract is entered into, including a repurchase transaction, 
     reverse repurchase transaction, consignment, lease, swap, 
     hedge transaction, deposit, loan, option, allocated 
     transaction, unallocated transaction, or any other similar 
     agreement;
       ``(II) any combination of agreements or transactions 
     referred to in subclauses (I) and (III);
       ``(III) any option to enter into any agreement or 
     transaction referred to in subclause (I) or (II);
       ``(IV) a master agreement that provides for an agreement or 
     transaction referred to in subclauses (I), (II), or (III), 
     together with all supplements to any such master agreement, 
     without regard to whether the master agreement provides for 
     an agreement or transaction that is not a forward contract 
     under this clause, except that the master agreement shall be 
     considered to be a forward contract under this clause only 
     with respect to each agreement or transaction under the 
     master agreement that is referred to in subclause (I), (II), 
     or (III); or
       ``(V) any security agreement or arrangement or other credit 
     enhancement related to any agreement or transaction referred 
     to in subclause (I), (II), (III), or (IV), including any 
     guarantee or reimbursement obligation in connection with any 
     agreement or transaction referred to in any such subclause.

       ``(v) Repurchase agreement.--The term `repurchase 
     agreement' (including a reverse repurchase agreement)--

       ``(I) means an agreement, including related terms, which 
     provides for the transfer of one or more certificates of 
     deposit, mortgage-related securities (as such term is defined 
     in section 3 of the Securities Exchange Act of 1934), 
     mortgage loans, interests in mortgage-related securities or 
     mortgage loans, eligible bankers' acceptances, qualified 
     foreign government securities (defined for purposes of this 
     clause as a security that is a direct obligation of, or that 
     is fully guaranteed by, the central government of a member of 
     the Organization for Economic Cooperation and Development, as 
     determined by regulation or order adopted by the appropriate 
     Federal banking authority), or securities that are direct 
     obligations of, or that are fully guaranteed by, the United 
     States or any agency of the United States against the 
     transfer of funds by the transferee of such certificates of 
     deposit, eligible bankers' acceptances, securities, mortgage 
     loans, or interests with a simultaneous agreement by such 
     transferee to transfer to the transferor thereof certificates 
     of deposit, eligible bankers' acceptances, securities, 
     mortgage loans, or interests as described above, at a date 
     certain not later than 1 year after such transfers or on 
     demand, against the transfer of funds, or any other similar 
     agreement;
       ``(II) does not include any repurchase obligation under a 
     participation in a commercial mortgage loan, unless the 
     Agency determines by regulation, resolution, or order to 
     include any such participation within the meaning of such 
     term;
       ``(III) means any combination of agreements or transactions 
     referred to in subclauses (I) and (IV);
       ``(IV) means any option to enter into any agreement or 
     transaction referred to in subclause (I) or (III);
       ``(V) means a master agreement that provides for an 
     agreement or transaction referred to in subclause (I), (III), 
     or (IV), together with all supplements to any such master 
     agreement, without regard to whether the master agreement 
     provides for an agreement or transaction that is not a 
     repurchase agreement under this clause, except that the 
     master agreement shall be considered to be a repurchase 
     agreement under this subclause only with respect to each 
     agreement or transaction under the master agreement that is 
     referred to in subclause (I), (III), or (IV); and
       ``(VI) means any security agreement or arrangement or other 
     credit enhancement related to any agreement or transaction 
     referred to in subclause (I), (III), (IV), or (V), including 
     any guarantee or reimbursement obligation in connection with 
     any agreement or transaction referred to in any such 
     subclause.

       ``(vi) Swap agreement.--The term `swap agreement' means--

       ``(I) any agreement, including the terms and conditions 
     incorporated by reference in any such agreement, which is an 
     interest rate swap, option, future, or forward agreement, 
     including a rate floor, rate cap, rate collar, cross-currency 
     rate swap, and basis swap; a spot, same day-tomorrow, 
     tomorrow-next, forward, or other foreign exchange or precious 
     metals agreement; a currency swap, option, future, or forward 
     agreement; an equity index or equity swap, option, future, or 
     forward agreement; a debt index or debt swap, option, future, 
     or forward agreement; a total return, credit spread or credit 
     swap, option, future, or forward agreement; a commodity index 
     or commodity swap, option, future, or forward agreement; or a 
     weather swap, weather derivative, or weather option;
       ``(II) any agreement or transaction that is similar to any 
     other agreement or transaction referred to in this clause and 
     that is of a type that has been, is presently, or in the 
     future becomes, the subject of recurrent dealings in the swap 
     markets (including terms and conditions incorporated by 
     reference in such agreement) and that is a forward, swap, 
     future, or option on one or more rates, currencies, 
     commodities, equity securities or other equity instruments, 
     debt securities or other debt instruments, quantitative 
     measures associated with an occurrence, extent of an 
     occurrence, or contingency associated with a financial, 
     commercial, or economic consequence, or economic or financial 
     indices or measures of economic or financial risk or value;
       ``(III) any combination of agreements or transactions 
     referred to in this clause;
       ``(IV) any option to enter into any agreement or 
     transaction referred to in this clause;
       ``(V) a master agreement that provides for an agreement or 
     transaction referred to in subclause (I), (II), (III), or 
     (IV), together with all supplements to any such master 
     agreement, without regard to whether the master agreement 
     contains an agreement or transaction that is not a swap 
     agreement under this clause, except that the master agreement 
     shall be considered to be a swap agreement under this clause 
     only with respect to each agreement or transaction under the 
     master agreement that is referred to in subclause (I), (II), 
     (III), or (IV); and
       ``(VI) any security agreement or arrangement or other 
     credit enhancement related to any agreements or transactions 
     referred to in subclause (I), (II), (III), (IV), or (V), 
     including any guarantee or reimbursement obligation in 
     connection with any agreement or transaction referred to in 
     any such subclause.

       ``(vii) Treatment of master agreement as one agreement.--
     Any master agreement for any contract or agreement described 
     in any preceding clause of this subparagraph (or any master 
     agreement for such master agreement or agreements), together 
     with all supplements to such master agreement, shall be 
     treated as a single agreement and a single qualified 
     financial contract. If a master agreement contains provisions 
     relating to agreements or transactions that are not 
     themselves qualified financial contracts, the master 
     agreement shall be deemed to be a qualified financial 
     contract only with respect to those transactions that are 
     themselves qualified financial contracts.
       ``(viii) Transfer.--The term `transfer' means every mode, 
     direct or indirect, absolute or conditional, voluntary or 
     involuntary, of disposing of or parting with property or with 
     an interest in property, including retention of title as a 
     security interest and foreclosure of the equity of redemption 
     of the regulated entity.
       ``(E) Certain protections in event of appointment of 
     conservator.--Notwithstanding any other provision of this 
     section, any other Federal law, or the law of any State 
     (other than paragraph (10) of this subsection and subsection 
     (b)(9)(B)), no person shall be stayed or prohibited from 
     exercising--
       ``(i) any right such person has to cause the termination, 
     liquidation, or acceleration of any qualified financial 
     contract with a regulated entity in a conservatorship based 
     upon a default under such financial contract which is 
     enforceable under applicable noninsolvency law;
       ``(ii) any right under any security agreement or 
     arrangement or other credit enhancement relating to 1 or more 
     such qualified financial contracts; or
       ``(iii) any right to offset or net out any termination 
     values, payment amounts, or other transfer obligations 
     arising under or in connection with such qualified financial 
     contracts.
       ``(F) Clarification.--No provision of law shall be 
     construed as limiting the right or power of the Agency, or 
     authorizing any court or agency to limit or delay in any 
     manner, the right or power of the Agency to transfer any 
     qualified financial contract in accordance with paragraphs 
     (9) and (10), or to disaffirm or repudiate any such contract 
     in accordance with subsection (d)(1).
       ``(G) Walkaway clauses not effective.--
       ``(i) In general.--Notwithstanding the provisions of 
     subparagraphs (A) and (E), and sections 403 and 404 of the 
     Federal Deposit Insurance Corporation Improvement Act of 
     1991, no walkaway clause shall be enforceable in a qualified 
     financial contract of a regulated entity in default.
       ``(ii) Walkaway clause defined.--For purposes of this 
     subparagraph, the term `walkaway clause' means a provision in 
     a qualified financial contract that, after calculation of a 
     value of a party's position or an amount due to or from 1 of 
     the parties in accordance with its terms upon termination, 
     liquidation, or acceleration of the qualified financial 
     contract, either does not create a payment obligation of a 
     party or extinguishes a payment obligation of a party in 
     whole or in part solely because of the status of such party 
     as a nondefaulting party.
       ``(9) Transfer of qualified financial contracts.--In making 
     any transfer of assets or

[[Page 5284]]

     liabilities of a regulated entity in default which includes 
     any qualified financial contract, the conservator or receiver 
     for such regulated entity shall either--
       ``(A) transfer to 1 person--
       ``(i) all qualified financial contracts between any person 
     (or any affiliate of such person) and the regulated entity in 
     default;
       ``(ii) all claims of such person (or any affiliate of such 
     person) against such regulated entity under any such contract 
     (other than any claim which, under the terms of any such 
     contract, is subordinated to the claims of general unsecured 
     creditors of such regulated entity);
       ``(iii) all claims of such regulated entity against such 
     person (or any affiliate of such person) under any such 
     contract; and
       ``(iv) all property securing, or any other credit 
     enhancement for any contract described in clause (i), or any 
     claim described in clause (ii) or (iii) under any such 
     contract; or
       ``(B) transfer none of the financial contracts, claims, or 
     property referred to under subparagraph (A) (with respect to 
     such person and any affiliate of such person).
       ``(10) Notification of transfer.--
       ``(A) In general.--The conservator or receiver shall notify 
     any person that is a party to a contract or transfer by 5:00 
     p.m. (Eastern Standard Time) on the business day following 
     the date of the appointment of the receiver in the case of a 
     receivership, or the business day following such transfer in 
     the case of a conservatorship, if--
       ``(i) the conservator or receiver for a regulated entity in 
     default makes any transfer of the assets and liabilities of 
     such regulated entity; and
       ``(ii) such transfer includes any qualified financial 
     contract.
       ``(B) Certain rights not enforceable.--
       ``(i) Receivership.--A person who is a party to a qualified 
     financial contract with a regulated entity may not exercise 
     any right that such person has to terminate, liquidate, or 
     net such contract under paragraph (8)(A) of this subsection 
     or under section 403 or 404 of the Federal Deposit Insurance 
     Corporation Improvement Act of 1991, solely by reason of or 
     incidental to the appointment of a receiver for the regulated 
     entity (or the insolvency or financial condition of the 
     regulated entity for which the receiver has been appointed)--

       ``(I) until 5:00 p.m. (Eastern Standard Time) on the 
     business day following the date of the appointment of the 
     receiver; or
       ``(II) after the person has received notice that the 
     contract has been transferred pursuant to paragraph (9)(A).

       ``(ii) Conservatorship.--A person who is a party to a 
     qualified financial contract with a regulated entity may not 
     exercise any right that such person has to terminate, 
     liquidate, or net such contract under paragraph (8)(E) of 
     this subsection or under section 403 or 404 of the Federal 
     Deposit Insurance Corporation Improvement Act of 1991, solely 
     by reason of or incidental to the appointment of a 
     conservator for the regulated entity (or the insolvency or 
     financial condition of the regulated entity for which the 
     conservator has been appointed).
       ``(iii) Notice.--For purposes of this paragraph, the 
     conservator or receiver of a regulated entity shall be deemed 
     to have notified a person who is a party to a qualified 
     financial contract with such regulated entity, if the 
     conservator or receiver has taken steps reasonably calculated 
     to provide notice to such person by the time specified in 
     subparagraph (A).
       ``(C) Business day defined.--For purposes of this 
     paragraph, the term `business day' means any day other than 
     any Saturday, Sunday, or any day on which either the New York 
     Stock Exchange or the Federal Reserve Bank of New York is 
     closed.
       ``(11) Disaffirmance or repudiation of qualified financial 
     contracts.--In exercising the rights of disaffirmance or 
     repudiation of a conservator or receiver with respect to any 
     qualified financial contract to which a regulated entity is a 
     party, the conservator or receiver for such institution shall 
     either--
       ``(A) disaffirm or repudiate all qualified financial 
     contracts between--
       ``(i) any person or any affiliate of such person; and
       ``(ii) the regulated entity in default; or
       ``(B) disaffirm or repudiate none of the qualified 
     financial contracts referred to in subparagraph (A) (with 
     respect to such person or any affiliate of such person).
       ``(12) Certain security interests not avoidable.--No 
     provision of this subsection shall be construed as permitting 
     the avoidance of any legally enforceable or perfected 
     security interest in any of the assets of any regulated 
     entity, except where such an interest is taken in 
     contemplation of the insolvency of the regulated entity, or 
     with the intent to hinder, delay, or defraud the regulated 
     entity or the creditors of such regulated entity.
       ``(13) Authority to enforce contracts.--
       ``(A) In general.--Notwithstanding any provision of a 
     contract providing for termination, default, acceleration, or 
     exercise of rights upon, or solely by reason of, insolvency 
     or the appointment of, or the exercise of rights or powers 
     by, a conservator or receiver, the conservator or receiver 
     may enforce any contract, other than a contract for liability 
     insurance for a director or officer, or a contract or a 
     regulated entity bond, entered into by the regulated entity.
       ``(B) Certain rights not affected.--No provision of this 
     paragraph may be construed as impairing or affecting any 
     right of the conservator or receiver to enforce or recover 
     under a liability insurance contract for an officer or 
     director, or regulated entity bond under other applicable 
     law.
       ``(C) Consent requirement.--
       ``(i) In general.--Except as otherwise provided under this 
     section, no person may exercise any right or power to 
     terminate, accelerate, or declare a default under any 
     contract to which a regulated entity is a party, or to obtain 
     possession of or exercise control over any property of the 
     regulated entity, or affect any contractual rights of the 
     regulated entity, without the consent of the conservator or 
     receiver, as appropriate, for a period of--

       ``(I) 45 days after the date of appointment of a 
     conservator; or
       ``(II) 90 days after the date of appointment of a receiver.

       ``(ii) Exceptions.--This subparagraph shall not--

       ``(I) apply to a contract for liability insurance for an 
     officer or director;
       ``(II) apply to the rights of parties to certain qualified 
     financial contracts under subsection (d)(8); and
       ``(III) be construed as permitting the conservator or 
     receiver to fail to comply with otherwise enforceable 
     provisions of such contracts.

       ``(14) Savings clause.--The meanings of terms used in this 
     subsection are applicable for purposes of this subsection 
     only, and shall not be construed or applied so as to 
     challenge or affect the characterization, definition, or 
     treatment of any similar terms under any other statute, 
     regulation, or rule, including the Gramm-Leach-Bliley Act, 
     the Legal Certainty for Bank Products Act of 2000, the 
     securities laws (as that term is defined in section 3(a)(47) 
     of the Securities Exchange Act of 1934), and the Commodity 
     Exchange Act.
       ``(e) Valuation of Claims in Default.--
       ``(1) In general.--Notwithstanding any other provision of 
     Federal law or the law of any State, and regardless of the 
     method which the Agency determines to utilize with respect to 
     a regulated entity in default or in danger of default, 
     including transactions authorized under subsection (i), this 
     subsection shall govern the rights of the creditors of such 
     regulated entity.
       ``(2) Maximum liability.--The maximum liability of the 
     Agency, acting as receiver or in any other capacity, to any 
     person having a claim against the receiver or the regulated 
     entity for which such receiver is appointed shall be not more 
     than the amount that such claimant would have received if the 
     Agency had liquidated the assets and liabilities of the 
     regulated entity without exercising the authority of the 
     Agency under subsection (i).
       ``(f) Limitation on Court Action.--Except as provided in 
     this section or at the request of the Director, no court may 
     take any action to restrain or affect the exercise of powers 
     or functions of the Agency as a conservator or a receiver.
       ``(g) Liability of Directors and Officers.--
       ``(1) In general.--A director or officer of a regulated 
     entity may be held personally liable for monetary damages in 
     any civil action described in paragraph (2) brought by, on 
     behalf of, or at the request or direction of the Agency, and 
     prosecuted wholly or partially for the benefit of the 
     Agency--
       ``(A) acting as conservator or receiver of such regulated 
     entity; or
       ``(B) acting based upon a suit, claim, or cause of action 
     purchased from, assigned by, or otherwise conveyed by such 
     receiver or conservator.
       ``(2) Actions addressed.--Paragraph (1) applies in any 
     civil action for gross negligence, including any similar 
     conduct or conduct that demonstrates a greater disregard of a 
     duty of care than gross negligence, including intentional 
     tortious conduct, as such terms are defined and determined 
     under applicable State law.
       ``(3) No limitation.--Nothing in this subsection shall 
     impair or affect any right of the Agency under other 
     applicable law.
       ``(h) Damages.--In any proceeding related to any claim 
     against a director, officer, employee, agent, attorney, 
     accountant, appraiser, or any other party employed by or 
     providing services to a regulated entity, recoverable damages 
     determined to result from the improvident or otherwise 
     improper use or investment of any assets of the regulated 
     entity shall include principal losses and appropriate 
     interest.
       ``(i) Limited-Life Regulated Entities.--
       ``(1) Organization.--
       ``(A) Purpose.--The Agency, as receiver appointed pursuant 
     to subsection (a)--
       ``(i) may, in the case of a Federal Home Loan Bank, 
     organize a limited-life regulated entity with those powers 
     and attributes of the Federal Home Loan Bank in default or in 
     danger of default as the Director determines necessary, 
     subject to the provisions of this subsection, and the 
     Director shall grant a temporary charter to that limited-life 
     regulated entity, and that limited-life regulated

[[Page 5285]]

     entity shall operate subject to that charter; and
       ``(ii) shall, in the case of an enterprise, organize a 
     limited-life regulated entity with respect to that enterprise 
     in accordance with this subsection.
       ``(B) Authorities.--Upon the creation of a limited-life 
     regulated entity under subparagraph (A), the limited-life 
     regulated entity may--
       ``(i) assume such liabilities of the regulated entity that 
     is in default or in danger of default as the Agency may, in 
     its discretion, determine to be appropriate, except that the 
     liabilities assumed shall not exceed the amount of assets 
     purchased or transferred from the regulated entity to the 
     limited-life regulated entity;
       ``(ii) purchase such assets of the regulated entity that is 
     in default, or in danger of default as the Agency may, in its 
     discretion, determine to be appropriate; and
       ``(iii) perform any other temporary function which the 
     Agency may, in its discretion, prescribe in accordance with 
     this section.
       ``(2) Charter and establishment.--
       ``(A) Transfer of charter.--
       ``(i) Fannie mae.--If the Agency is appointed as receiver 
     for the Federal National Mortgage Association, the limited-
     life regulated entity established under this subsection with 
     respect to such enterprise shall, by operation of law and 
     immediately upon its organization--

       ``(I) succeed to the charter of the Federal National 
     Mortgage Association, as set forth in the Federal National 
     Mortgage Association Charter Act; and
       ``(II) thereafter operate in accordance with, and subject 
     to, such charter, this Act, and any other provision of law to 
     which the Federal National Mortgage Association is subject, 
     except as otherwise provided in this subsection.

       ``(ii) Freddie mac.--If the Agency is appointed as receiver 
     for the Federal Home Loan Mortgage Corporation, the limited-
     life regulated entity established under this subsection with 
     respect to such enterprise shall, by operation of law and 
     immediately upon its organization--

       ``(I) succeed to the charter of the Federal Home Loan 
     Mortgage Corporation, as set forth in the Federal Home Loan 
     Mortgage Corporation Charter Act; and
       ``(II) thereafter operate in accordance with, and subject 
     to, such charter, this Act, and any other provision of law to 
     which the Federal Home Loan Mortgage Corporation is subject, 
     except as otherwise provided in this subsection.

       ``(B) Interests in and assets and obligations of regulated 
     entity in default.--Notwithstanding subparagraph (A) or any 
     other provision of law--
       ``(i) a limited-life regulated entity shall assume, 
     acquire, or succeed to the assets or liabilities of a 
     regulated entity only to the extent that such assets or 
     liabilities are transferred by the Agency to the limited-life 
     regulated entity in accordance with, and subject to the 
     restrictions set forth in, paragraph (1)(B);
       ``(ii) a limited-life regulated entity shall not assume, 
     acquire, or succeed to any obligation that a regulated entity 
     for which a receiver has been appointed may have to any 
     shareholder of the regulated entity that arises as a result 
     of the status of that person as a shareholder of the 
     regulated entity; and
       ``(iii) no shareholder or creditor of a regulated entity 
     shall have any right or claim against the charter of the 
     regulated entity once the Agency has been appointed receiver 
     for the regulated entity and a limited-life regulated entity 
     succeeds to the charter pursuant to subparagraph (A).
       ``(C) Limited-life regulated entity treated as being in 
     default for certain purposes.--A limited-life regulated 
     entity shall be treated as a regulated entity in default at 
     such times and for such purposes as the Agency may, in its 
     discretion, determine.
       ``(D) Management.--Upon its establishment, a limited-life 
     regulated entity shall be under the management of a board of 
     directors consisting of not fewer than 5 nor more than 10 
     members appointed by the Agency.
       ``(E) Bylaws.--The board of directors of a limited-life 
     regulated entity shall adopt such bylaws as may be approved 
     by the Agency.
       ``(3) Capital stock.--
       ``(A) No agency requirement.--The Agency is not required to 
     pay capital stock into a limited-life regulated entity or to 
     issue any capital stock on behalf of a limited-life regulated 
     entity established under this subsection.
       ``(B) Authority.--If the Director determines that such 
     action is advisable, the Agency may cause capital stock or 
     other securities of a limited-life regulated entity 
     established with respect to an enterprise to be issued and 
     offered for sale, in such amounts and on such terms and 
     conditions as the Director may determine, in the discretion 
     of the Director.
       ``(4) Investments.--Funds of a limited-life regulated 
     entity shall be kept on hand in cash, invested in obligations 
     of the United States or obligations guaranteed as to 
     principal and interest by the United States, or deposited 
     with the Agency, or any Federal reserve bank.
       ``(5) Exempt tax status.--Notwithstanding any other 
     provision of Federal or State law, a limited-life regulated 
     entity, its franchise, property, 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.
       ``(6) Winding up.--
       ``(A) In general.--Subject to subparagraphs (B) and (C), 
     not later than 2 years after the date of its organization, 
     the Agency shall wind up the affairs of a limited-life 
     regulated entity.
       ``(B) Extension.--The Director may, in the discretion of 
     the Director, extend the status of a limited-life regulated 
     entity for 3 additional 1-year periods.
       ``(C) Termination of status as limited-life regulated 
     entity.--
       ``(i) In general.--Upon the sale by the Agency of 80 
     percent or more of the capital stock of a limited-life 
     regulated entity, as defined in clause (iv), to 1 or more 
     persons (other than the Agency)--

       ``(I) the status of the limited-life regulated entity as 
     such shall terminate; and
       ``(II) the entity shall cease to be a limited-life 
     regulated entity for purposes of this subsection.

       ``(ii) Divestiture of remaining stock, if any.--

       ``(I) In general.--Not later than 1 year after the date on 
     which the status of a limited-life regulated entity is 
     terminated pursuant to clause (i), the Agency shall sell to 1 
     or more persons (other than the Agency) any remaining capital 
     stock of the former limited-life regulated entity.
       ``(II) Extension authorized.--The Director may extend the 
     period referred to in subclause (I) for not longer than an 
     additional 2 years, if the Director determines that such 
     action would be in the public interest.

       ``(iii) Savings clause.--Notwithstanding any provision of 
     law, other than clause (ii), the Agency shall not be required 
     to sell the capital stock of an enterprise or a limited-life 
     regulated entity established with respect to an enterprise.
       ``(iv) Applicability.--This subparagraph applies only with 
     respect to a limited-life regulated entity that is 
     established with respect to an enterprise.
       ``(7) Transfer of assets and liabilities.--
       ``(A) In general.--
       ``(i) Transfer of assets and liabilities.--The Agency, as 
     receiver, may transfer any assets and liabilities of a 
     regulated entity in default, or in danger of default, to the 
     limited-life regulated entity in accordance with and subject 
     to the restrictions of paragraph (1).
       ``(ii) Subsequent transfers.--At any time after the 
     establishment of a limited-life regulated entity, the Agency, 
     as receiver, may transfer any assets and liabilities of the 
     regulated entity in default, or in danger of default, as the 
     Agency may, in its discretion, determine to be appropriate in 
     accordance with and subject to the restrictions of paragraph 
     (1).
       ``(iii) Effective without approval.--The transfer of any 
     assets or liabilities of a regulated entity in default or in 
     danger of default to a limited-life regulated entity shall be 
     effective without any further approval under Federal or State 
     law, assignment, or consent with respect thereto.
       ``(iv) Equitable treatment of similarly situated 
     creditors.--The Agency shall treat all creditors of a 
     regulated entity in default or in danger of default that are 
     similarly situated under subsection (c)(1) in a similar 
     manner in exercising the authority of the Agency under this 
     subsection to transfer any assets or liabilities of the 
     regulated entity to the limited-life regulated entity 
     established with respect to such regulated entity, except 
     that the Agency may take actions (including making payments) 
     that do not comply with this clause, if--

       ``(I) the Director determines that such actions are 
     necessary to maximize the value of the assets of the 
     regulated entity, to maximize the present value return from 
     the sale or other disposition of the assets of the regulated 
     entity, or to minimize the amount of any loss realized upon 
     the sale or other disposition of the assets of the regulated 
     entity; and
       ``(II) all creditors that are similarly situated under 
     subsection (c)(1) receive not less than the amount provided 
     in subsection (e)(2).

       ``(v) Limitation on transfer of liabilities.--
     Notwithstanding any other provision of law, the aggregate 
     amount of liabilities of a regulated entity that are 
     transferred to, or assumed by, a limited-life regulated 
     entity may not exceed the aggregate amount of assets of the 
     regulated entity that are transferred to, or purchased by, 
     the limited-life regulated entity.
       ``(8) Regulations.--The Agency may promulgate such 
     regulations as the Agency determines to be necessary or 
     appropriate to implement this subsection.
       ``(9) Powers of limited-life regulated entities.--
       ``(A) In general.--Each limited-life regulated entity 
     created under this subsection shall have all corporate powers 
     of, and be subject to the same provisions of law as, the 
     regulated entity in default or in danger of default to which 
     it relates, except that--

[[Page 5286]]

       ``(i) the Agency may--

       ``(I) remove the directors of a limited-life regulated 
     entity;
       ``(II) fix the compensation of members of the board of 
     directors and senior management, as determined by the Agency 
     in its discretion, of a limited-life regulated entity; and
       ``(III) indemnify the representatives for purposes of 
     paragraph (1)(B), and the directors, officers, employees, and 
     agents of a limited-life regulated entity on such terms as 
     the Agency determines to be appropriate; and

       ``(ii) the board of directors of a limited-life regulated 
     entity--

       ``(I) shall elect a chairperson who may also serve in the 
     position of chief executive officer, except that such person 
     shall not serve either as chairperson or as chief executive 
     officer without the prior approval of the Agency; and
       ``(II) may appoint a chief executive officer who is not 
     also the chairperson, except that such person shall not serve 
     as chief executive officer without the prior approval of the 
     Agency.

       ``(B) Stay of judicial action.--Any judicial action to 
     which a limited-life regulated entity becomes a party by 
     virtue of its acquisition of any assets or assumption of any 
     liabilities of a regulated entity in default shall be stayed 
     from further proceedings for a period of not longer than 45 
     days, at the request of the limited-life regulated entity. 
     Such period may be modified upon the consent of all parties.
       ``(10) No federal status.--
       ``(A) Agency status.--A limited-life regulated entity is 
     not an agency, establishment, or instrumentality of the 
     United States.
       ``(B) Employee status.--Representatives for purposes of 
     paragraph (1)(B), interim directors, directors, officers, 
     employees, or agents of a limited-life regulated entity are 
     not, solely by virtue of service in any such capacity, 
     officers or employees of the United States. Any employee of 
     the Agency or of any Federal instrumentality who serves at 
     the request of the Agency as a representative for purposes of 
     paragraph (1)(B), interim director, director, officer, 
     employee, or agent of a limited-life regulated entity shall 
     not--
       ``(i) solely by virtue of service in any such capacity lose 
     any existing status as an officer or employee of the United 
     States for purposes of title 5, United States Code, or any 
     other provision of law; or
       ``(ii) receive any salary or benefits for service in any 
     such capacity with respect to a limited-life regulated entity 
     in addition to such salary or benefits as are obtained 
     through employment with the Agency or such Federal 
     instrumentality.
       ``(11) Authority to obtain credit.--
       ``(A) In general.--A limited-life regulated entity may 
     obtain unsecured credit and issue unsecured debt.
       ``(B) Inability to obtain credit.--If a limited-life 
     regulated entity is unable to obtain unsecured credit or 
     issue unsecured debt, the Director may authorize the 
     obtaining of credit or the issuance of debt by the limited-
     life regulated entity--
       ``(i) with priority over any or all of the obligations of 
     the limited-life regulated entity;
       ``(ii) secured by a lien on property of the limited-life 
     regulated entity that is not otherwise subject to a lien; or
       ``(iii) secured by a junior lien on property of the 
     limited-life regulated entity that is subject to a lien.
       ``(C) Limitations.--
       ``(i) In general.--The Director, after notice and a 
     hearing, may authorize the obtaining of credit or the 
     issuance of debt by a limited-life regulated entity that is 
     secured by a senior or equal lien on property of the limited-
     life regulated entity that is subject to a lien (other than 
     mortgages that collateralize the mortgage-backed securities 
     issued or guaranteed by an enterprise) only if--

       ``(I) the limited-life regulated entity is unable to 
     otherwise obtain such credit or issue such debt; and
       ``(II) there is adequate protection of the interest of the 
     holder of the lien on the property with respect to which such 
     senior or equal lien is proposed to be granted.

       ``(12) Burden of proof.--In any hearing under this 
     subsection, the Director has the burden of proof on the issue 
     of adequate protection.
       ``(13) Affect on debts and liens.--The reversal or 
     modification on appeal of an authorization under this 
     subsection to obtain credit or issue debt, or of a grant 
     under this section of a priority or a lien, does not affect 
     the validity of any debt so issued, or any priority or lien 
     so granted, to an entity that extended such credit in good 
     faith, whether or not such entity knew of the pendency of the 
     appeal, unless such authorization and the issuance of such 
     debt, or the granting of such priority or lien, were stayed 
     pending appeal.
       ``(j) Other Agency Exemptions.--
       ``(1) Applicability.--The provisions of this subsection 
     shall apply with respect to the Agency in any case in which 
     the Agency is acting as a conservator or a receiver.
       ``(2) Taxation.--The Agency, including its franchise, its 
     capital, reserves, and surplus, and its income, shall be 
     exempt from all taxation imposed by any State, county, 
     municipality, or local taxing authority, except that any real 
     property of the Agency 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, except that, notwithstanding the failure of any person 
     to challenge an assessment under State law of the value of 
     such property, and the tax thereon, shall be determined as of 
     the period for which such tax is imposed.
       ``(3) Property protection.--No property of the Agency shall 
     be subject to levy, attachment, garnishment, foreclosure, or 
     sale without the consent of the Agency, nor shall any 
     involuntary lien attach to the property of the Agency.
       ``(4) Penalties and fines.--The Agency shall not be liable 
     for any amounts in the nature of penalties or fines, 
     including those arising from the failure of any person to pay 
     any real property, personal property, probate, or recording 
     tax or any recording or filing fees when due.
       ``(k) Prohibition of Charter Revocation.--In no case may 
     the receiver appointed pursuant to this section revoke, 
     annul, or terminate the charter of an enterprise.''.
       (b) Technical and Conforming Amendments.--The Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4501 et seq.) is amended--
       (1) in section 1368 (12 U.S.C. 4618)--
       (A) by striking ``an enterprise'' each place that term 
     appears and inserting ``a regulated entity''; and
       (B) by striking ``the enterprise'' each place that term 
     appears and inserting ``the regulated entity'';
       (2) in section 1369C (12 U.S.C. 4622), by striking 
     ``enterprise'' each place that term appears and inserting 
     ``regulated entity'';
       (3) in section 1369D (12 U.S.C. 4623)--
       (A) by striking ``an enterprise'' each place that term 
     appears and inserting ``a regulated entity''; and
       (B) in subsection (a)(1), by striking ``An enterprise'' and 
     inserting ``A regulated entity''; and
       (4) by striking sections 1369, 1369A, and 1369B (12 U.S.C. 
     4619, 4620, and 4621).

                    Subtitle D--Enforcement Actions

     SEC. 2151. CEASE-AND-DESIST PROCEEDINGS.

       Section 1371 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4631) is 
     amended--
       (1) by striking subsections (a) and (b) and inserting the 
     following:
       ``(a) Issuance for Unsafe or Unsound Practices and 
     Violations.--If, in the opinion of the Director, a regulated 
     entity or any entity-affiliated party is engaging or has 
     engaged, or the Director has reasonable cause to believe that 
     the regulated entity or any entity-affiliated party is about 
     to engage, in an unsafe or unsound practice in conducting the 
     business of the regulated entity or the Finance Facility, or 
     is violating or has violated, or the Director has reasonable 
     cause to believe is about to violate, a law, rule, 
     regulation, or order, or any condition imposed in writing by 
     the Director in connection with the granting of any 
     application or other request by the regulated entity or the 
     Finance Facility or any written agreement entered into with 
     the Director, the Director may issue and serve upon the 
     regulated entity or entity-affiliated party a notice of 
     charges in respect thereof.
       ``(b) Issuance for Unsatisfactory Rating.--If a regulated 
     entity receives, in its most recent report of examination, a 
     less-than-satisfactory rating for credit risk, market risk, 
     operations, or corporate governance, the Director may (if the 
     deficiency is not corrected) deem the regulated entity to be 
     engaging in an unsafe or unsound practice for purposes of 
     subsection (a).'';
       (2) in subsection (c)--
       (A) in paragraph (1), by inserting before the period at the 
     end the following: ``, unless the party served with a notice 
     of charges shall appear at the hearing personally or by a 
     duly authorized representative, the party shall be deemed to 
     have consented to the issuance of the cease-and-desist 
     order''; and
       (B) in paragraph (2)--
       (i) by striking ``or director'' and inserting ``director, 
     or entity-affiliated party''; and
       (ii) by inserting ``or entity-affiliated party'' before 
     ``consents'';
       (3) in each of subsections (c), (d), and (e)--
       (A) by striking ``the enterprise'' each place that term 
     appears and inserting ``the regulated entity'';
       (B) by striking ``an enterprise'' each place that term 
     appears and inserting ``a regulated entity''; and
       (C) by striking ``conduct'' each place that term appears 
     and inserting ``practice'';
       (4) in subsection (d)--
       (A) in the matter preceding paragraph (1)--
       (i) by striking ``or director'' and inserting ``director, 
     or entity-affiliated party'';
       (ii) by inserting ``to require a regulated entity or 
     entity-affiliated party'' after ``includes the authority'';
       (B) in paragraph (1)--
       (i) by striking ``to require an executive officer or a 
     director to''; and
       (ii) by striking ``loss'' and all that follows through 
     ``person'' and inserting ``loss, if'';
       (iii) in subparagraph (A), by inserting ``such entity or 
     party or finance facility'' before ``was''; and
       (iv) by striking subparagraph (B) and inserting the 
     following:

[[Page 5287]]

       ``(B) the violation or practice involved a reckless 
     disregard for the law or any applicable regulations or prior 
     order of the Director;'';] and
       (C) in paragraph (4), by inserting ``loan or'' before 
     ``asset'';
       (5) in subsection (e), by inserting ``or entity-affiliated 
     party''--
       (A) before ``or any executive''; and
       (B) before the period at the end; and
       (6) in subsection (f)--
       (A) by striking ``enterprise'' and inserting ``regulated 
     entity, finance facility,''; and
       (B) by striking ``or director'' and inserting ``director, 
     or entity-affiliated party''.

     SEC. 2152. TEMPORARY CEASE-AND-DESIST PROCEEDINGS.

       Section 1372 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4632) is 
     amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Grounds for Issuance.--
       ``(1) In general.--If the Director determines that the 
     actions specified in the notice of charges served upon a 
     regulated entity or any entity-affiliated party pursuant to 
     section 1371(a), or the continuation thereof, is likely to 
     cause insolvency or significant dissipation of assets or 
     earnings of that entity, or is likely to weaken the condition 
     of that entity prior to the completion of the proceedings 
     conducted pursuant to sections 1371 and 1373, the Director 
     may--
       ``(A) issue a temporary order requiring that regulated 
     entity or entity-affiliated party to cease and desist from 
     any such violation or practice; and
       ``(B) require that regulated entity or entity-affiliated 
     party to take affirmative action to prevent or remedy such 
     insolvency, dissipation, condition, or prejudice pending 
     completion of such proceedings.
       ``(2) Additional requirements.--An order issued under 
     paragraph (1) may include any requirement authorized under 
     subsection 1371(d).'';
       (2) in subsection (b)--
       (A) by striking ``or director'' and inserting ``director, 
     or entity-affiliated party''; and
       (B) by striking ``enterprise'' each place that term appears 
     and inserting ``regulated entity'';
       (3) in subsection (c), by striking ``enterprise'' each 
     place that term appears and inserting ``regulated entity'';
       (4) in subsection (d)--
       (A) by striking ``or director'' each place that term 
     appears and inserting ``director, or entity-affiliated 
     party''; and
       (B) by striking ``An enterprise'' and inserting ``A 
     regulated entity''; and
       (5) in subsection (e)--
       (A) by striking ``request the Attorney General of the 
     United States to''; and
       (B) by striking ``or may, under the direction and control 
     of the Attorney General, bring such action''.

     SEC. 2153. REMOVAL AND PROHIBITION AUTHORITY.

       (a) In General.--Part 1 of subtitle C of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4631 et seq.) is amended--
       (1) by redesignating sections 1377 through 1379B (12 U.S.C. 
     4637-4641) as sections 1379 through 1379D, respectively; and
       (2) by inserting after section 1376 (12 U.S.C. 4636) the 
     following:

     ``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.

       ``(a) Authority To Issue Order.--
       ``(1) In general.--The Director may serve upon a party 
     described in paragraph (2), or any officer, director, or 
     management of the Finance Facility a written notice of the 
     intention of the Director to suspend or remove such party 
     from office, or prohibit any further participation by such 
     party, in any manner, in the conduct of the affairs of the 
     regulated entity.
       ``(2) Applicability.--A party described in this paragraph 
     is an entity-affiliated party or any officer, director, or 
     management of the Finance Facility, if the Director 
     determines that--
       ``(A) that party, officer, or director has, directly or 
     indirectly--
       ``(i) violated--

       ``(I) any law or regulation;
       ``(II) any cease-and-desist order which has become final;
       ``(III) any condition imposed in writing by the Director in 
     connection with the grant of any application or other request 
     by such regulated entity; or
       ``(IV) any written agreement between such regulated entity 
     and the Director;

       ``(ii) engaged or participated in any unsafe or unsound 
     practice in connection with any regulated entity or business 
     institution; or
       ``(iii) committed or engaged in any act, omission, or 
     practice which constitutes a breach of such party's fiduciary 
     duty;
       ``(B) by reason of the violation, practice, or breach 
     described in subparagraph (A)--
       ``(i) such regulated entity or business institution has 
     suffered or will probably suffer financial loss or other 
     damage; or
       ``(ii) such party has received financial gain or other 
     benefit; and
       ``(C) the violation, practice, or breach described in 
     subparagraph (A)--
       ``(i) involves personal dishonesty on the part of such 
     party; or
       ``(ii) demonstrates willful or continuing disregard by such 
     party for the safety or soundness of such regulated entity or 
     business institution.
       ``(b) Suspension Order.--
       ``(1) Suspension or prohibition authority.--If the Director 
     serves written notice under subsection (a) upon a party 
     subject to that subsection (a), the Director may, by order, 
     suspend or remove such party from office, or prohibit such 
     party from further participation in any manner in the conduct 
     of the affairs of the regulated entity, if the Director--
       ``(A) determines that such action is necessary for the 
     protection of the regulated entity; and
       ``(B) serves such party with written notice of the order.
       ``(2) Effective period.--Any order issued under this 
     subsection--
       ``(A) shall become effective upon service; and
       ``(B) unless a court issues a stay of such order under 
     subsection (g), shall remain in effect and enforceable 
     until--
       ``(i) the date on which the Director dismisses the charges 
     contained in the notice served under subsection (a) with 
     respect to such party; or
       ``(ii) the effective date of an order issued under 
     subsection (b).
       ``(3) Copy of order.--If the Director issues an order under 
     subsection (b) to any party, the Director shall serve a copy 
     of such order on any regulated entity with which such party 
     is affiliated at the time such order is issued.
       ``(c) Notice, Hearing, and Order.--
       ``(1) Notice.--A notice under subsection (a) of the 
     intention of the Director to issue an order under this 
     section shall contain a statement of the facts constituting 
     grounds for such action, and shall fix a time and place at 
     which a hearing will be held on such action.
       ``(2) Timing of hearing.--A hearing shall be fixed for a 
     date not earlier than 30 days, nor later than 60 days, after 
     the date of service of notice under subsection (a), unless an 
     earlier or a later date is set by the Director at the request 
     of--
       ``(A) the party receiving such notice, and good cause is 
     shown; or
       ``(B) the Attorney General of the United States.
       ``(3) Consent.--Unless the party that is the subject of a 
     notice delivered under subsection (a) appears at the hearing 
     in person or by a duly authorized representative, such party 
     shall be deemed to have consented to the issuance of an order 
     under this section.
       ``(4) Issuance of order of suspension.--The Director may 
     issue an order under this section, as the Director may deem 
     appropriate, if--
       ``(A) a party is deemed to have consented to the issuance 
     of an order under paragraph (3); or
       ``(B) upon the record made at the hearing, the Director 
     finds that any of the grounds specified in the notice have 
     been established.
       ``(5) Effectiveness of order.--Any order issued under 
     paragraph (4) shall become effective at the expiration of 30 
     days after the date of service upon the relevant regulated 
     entity and party (except in the case of an order issued upon 
     consent under paragraph (3), which shall become effective at 
     the time specified therein). Such order shall remain 
     effective and enforceable except to such extent as it is 
     stayed, modified, terminated, or set aside by action of the 
     Director or a reviewing court.
       ``(d) Prohibition of Certain Specific Activities.--Any 
     person subject to an order issued under this section shall 
     not--
       ``(1) participate in any manner in the conduct of the 
     affairs of any regulated entity or the Finance Facility;
       ``(2) solicit, procure, transfer, attempt to transfer, 
     vote, or attempt to vote any proxy, consent, or authorization 
     with respect to any voting rights in any regulated entity;
       ``(3) violate any voting agreement previously approved by 
     the Director; or
       ``(4) vote for a director, or serve or act as an entity-
     affiliated party of a regulated entity or as an officer or 
     director of the Finance Facility.
       ``(e) Industry-Wide Prohibition.--
       ``(1) In general.--Except as provided in paragraph (2), any 
     person who, pursuant to an order issued under this section, 
     has been removed or suspended from office in a regulated 
     entity or the Finance Facility, or prohibited from 
     participating in the conduct of the affairs of a regulated 
     entity or the Finance Facility, may not, while such order is 
     in effect, continue or commence to hold any office in, or 
     participate in any manner in the conduct of the affairs of, 
     any regulated entity or the Finance Facility.
       ``(2) Exception if director provides written consent.--If, 
     on or after the date on which an order is issued under this 
     section which removes or suspends from office any party, or 
     prohibits such party from participating in the conduct of the 
     affairs of a regulated entity or the Finance Facility, such 
     party receives the written consent of the Director, the order 
     shall, to the extent of such consent, cease to apply to such 
     party with respect to the regulated entity or such Finance 
     Facility described in the written consent. Any such consent 
     shall be publicly disclosed.

[[Page 5288]]

       ``(3) Violation of paragraph (1) treated as violation of 
     order.--Any violation of paragraph (1) by any person who is 
     subject to an order issued under subsection (h) shall be 
     treated as a violation of the order.
       ``(f) Applicability.--This section shall only apply to a 
     person who is an individual, unless the Director specifically 
     finds that it should apply to a corporation, firm, or other 
     business entity.
       ``(g) Stay of Suspension and Prohibition of Entity-
     Affiliated Party.--Not later than 10 days after the date on 
     which any entity-affiliated party has been suspended from 
     office or prohibited from participation in the conduct of the 
     affairs of a regulated entity under this section, such party 
     may apply to the United States District Court for the 
     District of Columbia, or the United States district court for 
     the judicial district in which the headquarters of the 
     regulated entity is located, for a stay of such suspension or 
     prohibition pending the completion of the administrative 
     proceedings pursuant to subsection (c). The court shall have 
     jurisdiction to stay such suspension or prohibition.
       ``(h) Suspension or Removal of Entity-Affiliated Party 
     Charged With Felony.--
       ``(1) Suspension or prohibition.--
       ``(A) In general.--Whenever any entity-affiliated party is 
     charged in any information, indictment, or complaint, with 
     the commission of or participation in a crime involving 
     dishonesty or breach of trust which is punishable by 
     imprisonment for a term exceeding 1 year under Federal or 
     State law, the Director may, if continued service or 
     participation by such party may pose a threat to the 
     regulated entity or impair public confidence in the regulated 
     entity, by written notice served upon such party, suspend 
     such party from office or prohibit such party from further 
     participation in any manner in the conduct of the affairs of 
     any regulated entity.
       ``(B) Provisions applicable to notice.--
       ``(i) Copy.--A copy of any notice under subparagraph (A) 
     shall be served upon the relevant regulated entity.
       ``(ii) Effective period.--A suspension or prohibition under 
     subparagraph (A) shall remain in effect until the 
     information, indictment, or complaint referred to in 
     subparagraph (A) is finally disposed of, or until terminated 
     by the Director.
       ``(2) Removal or prohibition.--
       ``(A) In general.--If a judgment of conviction or an 
     agreement to enter a pretrial diversion or other similar 
     program is entered against an entity-affiliated party in 
     connection with a crime described in paragraph (1)(A), at 
     such time as such judgment is not subject to further 
     appellate review, the Director may, if continued service or 
     participation by such party may pose a threat to the 
     regulated entity or impair public confidence in the regulated 
     entity, issue and serve upon such party an order removing 
     such party from office or prohibiting such party from further 
     participation in any manner in the conduct of the affairs of 
     the regulated entity without the prior written consent of the 
     Director.
       ``(B) Provisions applicable to order.--
       ``(i) Copy.--A copy of any order under subparagraph (A) 
     shall be served upon the relevant regulated entity, at which 
     time the entity-affiliated party who is subject to the order 
     (if a director or an officer) shall cease to be a director or 
     officer of such regulated entity.
       ``(ii) Effect of acquittal.--A finding of not guilty or 
     other disposition of the charge shall not preclude the 
     Director from instituting proceedings after such finding or 
     disposition to remove a party from office or to prohibit 
     further participation in the affairs of a regulated entity 
     pursuant to subsection (a) or (b).
       ``(iii) Effective period.--Unless terminated by the 
     Director, any notice of suspension or order of removal issued 
     under this subsection shall remain effective and outstanding 
     until the completion of any hearing or appeal authorized 
     under paragraph (4).
       ``(3) Authority of remaining board members.--
       ``(A) In general.--If at any time, because of the 
     suspension of 1 or more directors pursuant to this section, 
     there shall be on the board of directors of a regulated 
     entity less than a quorum of directors not so suspended, all 
     powers and functions vested in or exercisable by such board 
     shall vest in and be exercisable by the director or directors 
     on the board not so suspended, until such time as there shall 
     be a quorum of the board of directors.
       ``(B) Appointment of temporary directors.--If all of the 
     directors of a regulated entity are suspended pursuant to 
     this section, the Director shall appoint persons to serve 
     temporarily as directors pending the termination of such 
     suspensions, or until such time as those who have been 
     suspended cease to be directors of the regulated entity and 
     their respective successors take office.
       ``(4) Hearing regarding continued participation.--
       ``(A) In general.--Not later than 30 days after the date of 
     service of any notice of suspension or order of removal 
     issued pursuant to paragraph (1) or (2), the entity-
     affiliated party may request in writing an opportunity to 
     appear before the Director to show that the continued service 
     or participation in the conduct of the affairs of the 
     regulated entity by such party does not, or is not likely to, 
     pose a threat to the interests of the regulated entity, or 
     threaten to impair public confidence in the regulated entity.
       ``(B) Timing and form of hearing.--Upon receipt of a 
     request for a hearing under subparagraph (A), the Director 
     shall fix a time (not later than 30 days after the date of 
     receipt of such request, unless extended at the request of 
     such party) and place at which the entity-affiliated party 
     may appear, personally or through counsel, before the 
     Director or 1 or more designated employees of the Director to 
     submit written materials (or, at the discretion of the 
     Director, oral testimony) and oral argument.
       ``(C) Determination.--Not later than 60 days after the date 
     of a hearing under subparagraph (B), the Director shall 
     notify the entity-affiliated party whether the suspension or 
     prohibition from participation in any manner in the conduct 
     of the affairs of the regulated entity will be continued, 
     terminated, or otherwise modified, or whether the order 
     removing such party from office or prohibiting such party 
     from further participation in any manner in the conduct of 
     the affairs of the regulated entity will be rescinded or 
     otherwise modified. Such notification shall contain a 
     statement of the basis for any adverse decision of the 
     Director.
       ``(5) Rules.--The Director is authorized to prescribe such 
     rules as may be necessary to carry out this subsection.''.
       (b) Conforming Amendments.--
       (1) Safety and soundness act.--Subtitle C of title XIII of 
     the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (42 U.S.C. 4501 et seq.) is amended--
       (A) in section 1317(f), by striking ``section 1379B'' and 
     inserting ``section 1379D'';
       (B) in section 1373(a)--
       (i) in paragraph (1), by striking ``or 1376(c)'' and 
     inserting ``, 1376(c), or 1377'';
       (ii) in paragraph (2), by inserting ``or 1377'' 
     after''1371''; and
       (iii) in paragraph (4), by inserting ``or removal or 
     prohibition'' after ``cease and desist''; and
       (C) in section 1374(a)--
       (i) by striking ``or 1376'' and inserting ``, 1376, or 
     1377''; and
       (ii) by striking ``such section'' and inserting ``this 
     title''.
       (2) Fannie mae charter act.--Section 308(b) of the Federal 
     National Mortgage Association Charter Act (12 U.S.C. 1723(b)) 
     is amended in the second sentence, by striking ``The'' and 
     inserting ``Except to the extent that action under section 
     1377 of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 temporarily results in a lesser number, 
     the''.
       (3) Freddie mac charter act.--Section 303(a)(2)(A) of the 
     Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
     1452(a)(2)(A)) is amended, in the second sentence, by 
     striking ``The'' and inserting ``Except to the extent action 
     under section 1377 of the Federal Housing Enterprises 
     Financial Safety and Soundness Act of 1992 temporarily 
     results in a lesser number, the''.

     SEC. 2154. ENFORCEMENT AND JURISDICTION.

       (a) In General.--Section 1375 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4635) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Enforcement.--The Director may, in the discretion of 
     the Director, apply to the United States District Court for 
     the District of Columbia, or the United States district court 
     within the jurisdiction of which the headquarters of the 
     regulated entity is located, for the enforcement of any 
     effective and outstanding notice, order, or subpoena issued 
     under this title, or request that the Attorney General of the 
     United States bring such an action. Such court shall have 
     jurisdiction and power to order and require compliance with 
     such notice, order, or subpoena.''; and
       (2) in subsection (b)--
       (A) by striking ``section 1371, 1372, or 1376 or'';
       (B) by inserting ``subtitle C, or section 1313A'' after 
     ``subtitle B,''; and
       (C) by inserting ``, standard,'' after ``notice'' each 
     place that term appears.
       (b) Conforming Amendment.--Section 1379B of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4641) is amended by striking subsection (c) 
     and redesignating subsection (d) as subsection (c).

     SEC. 2155. CIVIL MONEY PENALTIES.

       Section 1376 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4636) is 
     amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) In General.--The Director may impose a civil money 
     penalty in accordance with this section on any regulated 
     entity, or any executive offices of a regulated entity or any 
     entity-affiliated party.'';
       (2) by striking subsection (b) and inserting the following:
       ``(b) Amount of Penalty.--
       ``(1) First tier.--A regulated entity or entity-affiliated 
     party shall forfeit and pay a civil penalty of not more than 
     $10,000 for each day during which a violation continues, if 
     such regulated entity or party--

[[Page 5289]]

       ``(A) violates any provision of this title, the authorizing 
     statutes, or any order, condition, rule, or regulation under 
     this title or any authorizing statute;
       ``(B) violates any final or temporary order or notice 
     issued pursuant to this title;
       ``(C) violates any condition imposed in writing by the 
     Director in connection with the grant of any application or 
     other request by such regulated entity;
       ``(D) violates any written agreement between the regulated 
     entity and the Director; or
       ``(E) engages in any conduct that the Director determines 
     to be an unsafe or unsound practice.
       ``(2) Second tier.--Notwithstanding paragraph (1), a 
     regulated entity or entity-affiliated party shall forfeit and 
     pay a civil penalty of not more than $50,000 for each day 
     during which a violation, practice, or breach continues, if--
       ``(A) the regulated entity or entity-affiliated party, 
     respectively--
       ``(i) commits any violation described in any subparagraph 
     of paragraph (1);
       ``(ii) recklessly engages in an unsafe or unsound practice 
     in conducting the affairs of the regulated entity; or
       ``(iii) breaches any fiduciary duty; and
       ``(B) the violation, practice, or breach--
       ``(i) is part of a pattern of misconduct;
       ``(ii) causes or is likely to cause more than a minimal 
     loss to the regulated entity; or
       ``(iii) results in pecuniary gain or other benefit to such 
     party.
       ``(3) Third tier.--Notwithstanding paragraphs (1) and (2), 
     any regulated entity or entity-affiliated party shall forfeit 
     and pay a civil penalty in an amount not to exceed the 
     applicable maximum amount determined under paragraph (4) for 
     each day during which such violation, practice, or breach 
     continues, if such regulated entity or entity-affiliated 
     party--
       ``(A) knowingly--
       ``(i) commits any violation described in any subparagraph 
     of paragraph (1);
       ``(ii) engages in any unsafe or unsound practice in 
     conducting the affairs of the regulated entity; or
       ``(iii) breaches any fiduciary duty; and
       ``(B) knowingly or recklessly causes a substantial loss to 
     the regulated entity or a substantial pecuniary gain or other 
     benefit to such party by reason of such violation, practice, 
     or breach.
       ``(4) Maximum amounts of penalties for any violation 
     described in paragraph (3).--The maximum daily amount of any 
     civil penalty which may be assessed pursuant to paragraph (3) 
     for any violation, practice, or breach described in paragraph 
     (3) is--
       ``(A) in the case of any entity-affiliated party, an amount 
     not to exceed $2,000,000; and
       ``(B) in the case of any regulated entity, $2,000,000.'';
       (3) in subsection (c)--
       (A) by striking ``enterprise'' each place that term appears 
     and inserting ``regulated entity'';
       (B) by inserting ``or entity-affiliated party'' before ``in 
     writing''; and
       (C) by inserting ``or entity-affiliated party'' before 
     ``has been given'';
       (4) in subsection (d)--
       (A) by striking ``or director'' each place such term 
     appears and inserting ``director, or entity-affiliated 
     party'';
       (B) by striking ``an enterprise'' and inserting ``a 
     regulated entity'';
       (C) by striking ``the enterprise'' and inserting ``the 
     regulated entity'';
       (D) by striking ``request the Attorney General of the 
     United States to'';
       (E) by inserting ``, or the United States district court 
     within the jurisdiction of which the headquarters of the 
     regulated entity is located,'' after ``District of 
     Columbia'';
       (F) by striking ``, or may, under the direction and control 
     of the Attorney General of the United States, bring such an 
     action''; and
       (G) by striking ``and section 1374''; and
       (5) in subsection (g), by striking ``An enterprise'' and 
     inserting ``A regulated entity''.

     SEC. 2156. CRIMINAL PENALTY.

       (a) In General.--Subtitle C of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4631 et seq.), as amended by this Act, is amended by 
     adding at the end the following:

     ``SEC. 1378. CRIMINAL PENALTY.

       ``Whoever, being subject to an order in effect under 
     section 1377, without the prior written approval of the 
     Director, knowingly participates, directly or indirectly, in 
     any manner (including by engaging in an activity specifically 
     prohibited in such an order) in the conduct of the affairs of 
     any regulated entity shall, notwithstanding section 3571 of 
     title 18, be fined not more than $1,000,000, imprisoned for 
     not more than 5 years, or both.''.
       (b) Technical and Conforming Amendments.--The Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992 (12 U.S.C. 4501 et seq.) is amended--
       (1) in section 1379 (as so designated by this Division)--
       (A) by striking ``an enterprise'' and inserting ``a 
     regulated entity''; and
       (B) by striking ``the enterprise'' and inserting ``the 
     regulated entity'';
       (2) in section 1379A (as so designated by this Division), 
     by striking ``an enterprise'' and inserting ``a regulated 
     entity'';
       (3) in section 1379B(c) (as so designated by this 
     Division), by striking ``enterprise'' and inserting 
     ``regulated entity''; and
       (4) in section 1379D (as so designated by this Division), 
     by striking ``enterprise'' and inserting ``regulated 
     entity''.

     SEC. 2157. NOTICE AFTER SEPARATION FROM SERVICE.

       Section 1379 of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4637), as so 
     designated by this Division, is amended--
       (1) by striking ``2-year'' and inserting ``6-year''; and
       (2) by inserting ``or an entity-affiliated party'' after 
     ``enterprise'' each place that term appears.

     SEC. 2158. SUBPOENA AUTHORITY.

       Section 1379B of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4641) is 
     amended--
       (1) in subsection (a)--
       (A) in the matter preceding paragraph (1)--
       (i) by striking ``administrative'';
       (ii) by inserting ``, examination, or investigation'' after 
     ``proceeding'';
       (iii) by striking ``subchapter'' and inserting ``title''; 
     and
       (iv) by inserting ``or any designated representative 
     thereof, including any person designated to conduct any 
     hearing under this subtitle'' after ``Director''; and
       (B) in paragraph (4), by striking ``issued by the 
     Director'';
       (2) in subsection (b), by inserting ``or in any territory 
     or other place subject to the jurisdiction of the United 
     States'' after ``State'';
       (3) by striking subsection (c) and inserting the following:
       ``(c) Enforcement.--
       ``(1) In general.--The Director, or any party to 
     proceedings under this subtitle, may apply to the United 
     States District Court for the District of Columbia, or the 
     United States district court for the judicial district of the 
     United States in any territory in which such proceeding is 
     being conducted, or where the witness resides or carries on 
     business, for enforcement of any subpoena or subpoena duces 
     tecum issued pursuant to this section.
       ``(2) Power of court.--The courts described under paragraph 
     (1) shall have the jurisdiction and power to order and 
     require compliance with any subpoena issued under paragraph 
     (1)'';
       (4) in subsection (d), by inserting ``enterprise-affiliated 
     party'' before ``may allow''; and
       (5) by adding at the end the following:
       ``(e) Penalties.--A person shall be guilty of a 
     misdemeanor, and upon conviction, shall be subject to a fine 
     of not more than $1,000 or to imprisonment for a term of not 
     more than 1 year, or both, if that person willfully fails or 
     refuses, in disobedience of a subpoena issued under 
     subsection (c), to--
       ``(1) attend court;
       ``(2) testify in court;
       ``(3) answer any lawful inquiry; or
       ``(4) produce books, papers, correspondence, contracts, 
     agreements, or such other records as requested in the 
     subpoena.''.

                     Subtitle E--General Provisions

     SEC. 2161. CONFORMING AND TECHNICAL AMENDMENTS.

       (a) Amendments to 1992 Act.--The Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992 (12 
     U.S.C. 4501 et seq.), as amended by this Division, is 
     amended--
       (1) in section 1315 (12 U.S.C. 4515)--
       (A) in subsection (a)--
       (i) by striking ``(a) Office Personnel.--The'' and 
     inserting ``(a) In General.--Subject to title III of the 
     Federal Housing Enterprise Regulatory Reform Act of 2008, 
     the''; and
       (ii) by striking ``the Office'' each place that term 
     appears and inserting ``the Agency'';
       (B) in subsection (c), by striking ``the Office'' and 
     inserting ``the Agency'';
       (C) in subsection (e), by striking ``the Office'' and 
     inserting ``the Agency'';
       (D) by striking subsections (d) and (f); and
       (E) by redesignating subsection (e) as subsection (d);
       (2) in section 1319A (12 U.S.C. 4520)--
       (A) by striking ``(a) In General.--''; and
       (B) by striking subsection (b);
       (3) in section 1364(c) (12 U.S.C. 4614(c)), by striking the 
     last sentence;
       (4) by striking section 1383 (12 U.S.C. 1451 note);
       (5) in each of sections 1319D, 1319E, and 1319F (12 U.S.C. 
     4523, 4524, 4525) by striking ``the Office'' each place that 
     term appears and inserting ``the Agency''; and
       (6) in each of sections 1319B and 1369(a)(3) (12 U.S.C. 
     4521, 4619(a)(3)), by striking ``Committee on Banking, 
     Finance and Urban Affairs'' each place that term appears and 
     inserting ``Committee on Financial Services''.
       (b) Amendments to Fannie Mae Charter Act.--The Federal 
     National Mortgage Association Charter Act (12 U.S.C. 1716 et 
     seq.) is amended--
       (1) in each of sections 303(c)(2) (12 U.S.C. 1718(c)(2)), 
     309(d)(3)(B) (12 U.S.C. 1723a(d)(3)(B)), and 309(k)(1) (12 
     U.S.C. 1723a(k)(1)), by striking ``Director of the Office of 
     Federal Housing Enterprise Oversight of the Department of 
     Housing and Urban Development'' each place that term appears,

[[Page 5290]]

     and inserting ``Director of the Federal Housing Enterprise 
     Regulatory Agency'';
       (2) in section 309--
       (A) in subsection (m) (12 U.S.C. 1723a(m))--
       (i) in paragraph (1), by striking ``to the Secretary, in a 
     form determined by the Secretary'' and inserting ``to the 
     Director of the Federal Housing Enterprise Regulatory Agency, 
     in a form determined by the Director''; and
       (ii) in paragraph (2), by striking ``to the Secretary, in a 
     form determined by the Secretary'' and inserting ``to the 
     Director of the Federal Housing Enterprise Regulatory Agency, 
     in a form determined by the Director'';
       (B) in subsection (n) (12 U.S.C. 1723a(n))--
       (i) in paragraph (1), by striking ``and the Secretary'' and 
     inserting ``and the Director of the Federal Housing 
     Enterprise Regulatory Agency''; and
       (ii) in paragraph (2), by striking ``Secretary'' each place 
     that term appears and inserting ``Director of the Federal 
     Housing Enterprise Regulatory Agency''; and
       (C) in paragraph (3)(B), by striking ``Secretary'' and 
     inserting ``Director of the Federal Housing Enterprise 
     Regulatory Agency''.
       (c) Amendments to Freddie Mac Charter Act.--The Federal 
     Home Loan Mortgage Corporation Act (12 U.S.C. 1451 et seq.) 
     is amended--
       (1) in each of sections 303(b)(2) (12 U.S.C. 1452(b)(2)), 
     303(h)(2) (12 U.S.C. 1452(h)(2)), and section 307(c)(1) (12 
     U.S.C. 1456(c)(1)), by striking ``Director of the Office of 
     Federal Housing Enterprise Oversight of the Department of 
     Housing and Urban Development'' each place that term appears, 
     and inserting ``Director of the Federal Housing Enterprise 
     Regulatory Agency'';
       (2) in section 306 (12 U.S.C. 1455)--
       (A) in subsection (c)(2), by inserting ``the'' after 
     ``Secretary of'';
       (B) in subsection (i)--
       (i) by striking ``section 1316(c)'' and inserting ``section 
     306(c)''; and
       (ii) by striking ``section 106'' and inserting ``section 
     1316''; and
       (C) in subsection (j), by striking ``of substantially'' and 
     inserting ``or substantially''; and
       (3) in section 307 (12 U.S.C. 1456)--
       (A) in subsection (e)--
       (i) in paragraph (1), by striking ``to the Secretary, in a 
     form determined by the Secretary'' and inserting ``to the 
     Director of the Federal Housing Enterprise Regulatory Agency, 
     in a form determined by the Director''; and
       (ii) in paragraph (2), by striking ``to the Secretary, in a 
     form determined by the Secretary'' and inserting ``to the 
     Director of the Federal Housing Enterprise Regulatory Agency, 
     in a form determined by the Director''; and
       (B) in subsection (f)--
       (i) in paragraph (1), by striking ``and the Secretary'' and 
     inserting ``and the Director of the Federal Housing 
     Enterprise Regulatory Agency'';
       (ii) in paragraph (2), by striking ``the Secretary'' each 
     place that term appears and inserting ``the Director of the 
     Federal Housing Enterprise Regulatory Agency''; and
       (iii) in paragraph (3)(B), by striking ``Secretary'' and 
     inserting ``Director of the Federal Housing Enterprise 
     Regulatory Agency''.
       (d) Amendment to Title 18, United States Code.--Section 
     1905 of title 18, United States Code, is amended by striking 
     ``Office of Federal Housing Enterprise Oversight'' and 
     inserting ``Federal Housing Enterprise Regulatory Agency''.
       (e) Amendment to Flood Disaster Protection Act of 1973.--
     Section 102(f)(3)(A) of the Flood Disaster Protection Act of 
     1973 (42 U.S.C. 4012a(f)(3)(A)) is amended by striking 
     ``Director of the Office of Federal Housing Enterprise 
     Oversight of the Department of Housing and Urban 
     Development'' and inserting ``Director of the Federal Housing 
     Enterprise Regulatory Agency''.
       (f) Amendment to Department of Housing and Urban 
     Development Act.--Section 5 of the Department of Housing and 
     Urban Development Act (42 U.S.C. 3534) is amended by striking 
     subsection (d).
       (g) Amendment to Title 5, United States Code.--Section 5313 
     of title 5, United States Code, is amended by striking the 
     item relating to the Director of the Office of Federal 
     Housing Enterprise Oversight, Department of Housing and Urban 
     Development and inserting the following new item:
       ``Director of the Federal Housing Enterprise Regulatory 
     Agency.''.
       (h) Amendment to Sarbanes-Oxley Act.--Section 
     105(b)(5)(B)(ii)(II) of the Sarbanes-Oxley Act of 2002 (15 
     U.S.C. 7215(b)(5)(B)(ii)(II)) is amended by inserting ``and 
     the Director of the Federal Housing Enterprise Regulatory 
     Agency,'' after ``Commission,''.
       (i) Amendment to Federal Deposit Insurance Act.--Section 
     11(t)(2)(A) of the Federal Deposit Insurance Act (12 U.S.C. 
     1821(t)(2)(A)) is amended by adding at the end the following:
       ``(vii) The Federal Housing Enterprise Regulatory 
     Agency.''.

     SEC. 2162. PRESIDENTIALLY APPOINTED DIRECTORS OF ENTERPRISES.

       (a) Fannie Mae.--
       (1) In general.--Section 308(b) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1723(b)) is 
     amended--
       (A) in the first sentence, by striking ``eighteen persons, 
     five of whom shall be appointed annually by the President of 
     the United States, and the remainder of whom'' and inserting 
     ``13 persons, or such other number that the Director 
     determines appropriate, who'';
       (B) in the second sentence, by striking ``appointed by the 
     President'';
       (C) in the third sentence--
       (i) by striking ``appointed or''; and
       (ii) by striking ``, except that any such appointed member 
     may be removed from office by the President for good cause'';
       (D) in the fourth sentence, by striking ``elective''; and
       (E) by striking the fifth sentence.
       (2) Transitional provision.--The amendments made by 
     paragraph (1) shall not apply to any appointed position of 
     the board of directors of the Federal National Mortgage 
     Association until the expiration of the annual term for such 
     position during which the effective date under section 163 
     occurs.
       (b) Freddie Mac.--
       (1) In general.--Section 303(a)(2) of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1452(a)(2)) is amended--
       (A) in subparagraph (A)--
       (i) in the first sentence, by striking ``13 persons, 5 of 
     whom shall be appointed annually by the President of the 
     United States and the remainder of whom'' and inserting ``13 
     persons, or such other number as the Director determines 
     appropriate, who''; and
       (ii) in the second sentence, by striking ``appointed by the 
     President of the United States'';
       (B) in subparagraph (B)--
       (i) by striking ``such or''; and
       (ii) by striking ``, except that any appointed member may 
     be removed from office by the President for good cause''; and
       (C) in subparagraph (C)--
       (i) by striking the first sentence; and
       (ii) by striking ``elective''.
       (2) Transitional provision.--The amendments made by 
     paragraph (1) shall not apply to any appointed position of 
     the board of directors of the Federal Home Loan Mortgage 
     Corporation until the expiration of the annual term for such 
     position during which the effective date under section 163 
     occurs.

     SEC. 2163. EFFECTIVE DATE.

       Except as otherwise specifically provided in this title, 
     this title and the amendments made by this title shall take 
     effect on, and shall apply beginning on, the date of 
     enactment of this Act.

                   TITLE II--FEDERAL HOME LOAN BANKS

     SEC. 2201. DIRECTORS.

       Section 7 of the Federal Home Loan Bank Act (12 U.S.C. 
     1427) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Number; Election; Qualifications; Conflicts of 
     Interest.--
       ``(1) In general.--Subject to paragraphs (2) through (4), 
     the management of each Federal Home Loan Bank shall be vested 
     in a board of 13 directors, or such other number as the 
     Director determines appropriate.
       ``(2) Board makeup.--The board of directors of each Bank 
     shall be comprised of--
       ``(A) member directors, who shall comprise at least the 
     majority of the members of the board of directors; and
       ``(B) independent directors, who shall comprise not fewer 
     than \1/3\ of the members of the board of directors.
       ``(3) Selection criteria.--
       ``(A) In general.--Each member of the board of directors 
     shall be--
       ``(i) elected by plurality vote of the members, in 
     accordance with procedures established under this section; 
     and
       ``(ii) a citizen of the United States.
       ``(B) Independent director criteria.--
       ``(i) Public interest.--Not fewer than 2 of the independent 
     directors shall be selected from among representatives of 
     organizations having more than a 2-year history of 
     representing consumer or community interests on banking 
     services, credit needs, housing, or financial consumer 
     protections.
       ``(ii) Conflicts of interest.--No independent director may, 
     during the term of service on the board of directors, serve 
     as an officer of any Federal Home Loan Bank or as a director 
     or officer of any member Bank.
       ``(4) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(A) Independent director.--The terms `independent 
     director' and `independent directorship' mean a member of the 
     board of directors of a Federal Home Loan Bank who is a bona 
     fide resident of the district in which the Federal Home Loan 
     Bank is located, or the directorship held by such a person, 
     respectively.
       ``(B) Member director.--The terms `member director' and 
     `member directorship' mean a member of the board of directors 
     of a Federal Home Loan Bank who is an officer or director of 
     a member institution that is located in the district in which 
     the Federal Home Loan Bank is located, or the directorship 
     held by such a person, respectively.'';
       (2) by striking ``elective'' each place that term appears, 
     other than in subsections (d), (e), and (f), and inserting 
     ``member'';
       (3) in subsection (b)--

[[Page 5291]]

       (A) by striking the subsection heading and all that follows 
     through ``Each elective directorship'' and inserting the 
     following:
       ``(b) Directorships.--
       ``(1) Member directorships.--Each member directorship''; 
     and
       (B) by adding at the end the following:
       ``(2) Independent directorships.--
       ``(A) Elections.--Each independent director--
       ``(i) shall be elected by the members entitled to vote, 
     from among eligible persons nominated by the board of 
     directors of the Bank; and
       ``(ii) shall be filled by a plurality of the votes of the 
     members of the Bank at large, with each member having the 
     number of votes for each such directorship as it has under 
     subsection (b)(1) in an election to fill member 
     directorships.
       ``(B) Criteria.--Nominees shall meet all applicable 
     requirements prescribed in this section.
       ``(C) Nomination and election procedures.--Procedures for 
     nomination and election of independent directors shall be 
     prescribed by the bylaws of each Federal Home Loan Bank, in a 
     manner consistent with the rules and regulations of the 
     Agency.'';
       (4) in subsection (c), by striking the second, third, and 
     fifth sentences;
       (5) in subsection (d)--
       (A) in the first sentence--
       (i) by striking ``, whether elected or appointed,''; and
       (ii) by striking ``3 years'' and inserting ``4 years'';
       (B) in the second sentence--
       (i) by striking ``Federal Home Loan Bank System 
     Modernization Act of 1999'' and inserting ``Federal Housing 
     Enterprise Regulatory Reform Act of 2008'';
       (ii) by striking ``\1/3\'' and inserting ``\1/4\''; and
       (iii) by striking ``or appointed''; and
       (C) in the third sentence--
       (i) by striking ``an elective'' each place that term 
     appears and inserting ``a''; and
       (ii) by striking ``in any elective directorship or elective 
     directorships'';
       (6) in subsection (f)--
       (A) by striking paragraph (2);
       (B) by striking ``appointed or'' each place that term 
     appears; and
       (C) in paragraph (3)--
       (i) by striking ``(3) Elected bank directors.--'' and 
     inserting ``(2) Election process.--''; and
       (ii) by striking ``elective'' each place that term appears;
       (7) in subsection (i)--
       (A) in paragraph (1), by striking ``(1) In General.--
     Subject to paragraph (2), each'' and inserting ``Each''; and
       (B) by striking paragraph (2); and
       (8) by adding at the end the following:
       ``(l) Transition Rule.--Any member of the board of 
     directors of a Bank elected or appointed in accordance with 
     this section prior to the date of enactment of this 
     subsection may continue to serve as a member of that board of 
     directors for the remainder of the existing term of 
     service.''.

     SEC. 2202. DEFINITIONS.

       Section 2 of the Federal Home Loan Bank Act (12 U.S.C. 
     1422) is amended--
       (1) by striking paragraphs (1), (10), and (11);
       (2) by redesignating paragraphs (2) through (9) as 
     paragraphs (1) through (8), respectively;
       (3) by redesignating paragraphs (12) and (13) as paragraphs 
     (9) and (10), respectively; and
       (4) by adding at the end the following:
       ``(11) Director.--The term `Director' means the Director of 
     the Federal Housing Enterprise Regulatory Agency.
       ``(12) Agency.--The term `Agency' means the Federal Housing 
     Enterprise Regulatory Agency, established under section 1311 
     of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992.
       ``(13) Finance facility.--The term `Finance Facility' means 
     the Federal Home Loan Bank Finance Facility established under 
     section 11A.''.

     SEC. 2203. AGENCY OVERSIGHT OF FEDERAL HOME LOAN BANKS.

       The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.), 
     other than in provisions of that Act added or amended 
     otherwise by this Division, is amended--
       (1) by striking sections 2A, 2B, and 20 (12 U.S.C. 1422a, 
     1422b, 1440);
       (2) in section 18 (12 U.S.C. 1438), by striking subsection 
     (b);
       (3) in section 11 (12 U.S.C. 1431)--
       (A) by striking subsections (b) and (c);
       (B) by redesignating subsections (d) through (k) as 
     subsections (c) through (j), respectively;
       (C) in subsection (a)--
       (i) by striking ``Board'' each place that term appears and 
     inserting ``Director''; and
       (ii) by striking ``upon such terms and conditions as the 
     Board may approve''; and
       (D) by inserting after subsection (a) the following:
       ``(b) Issuance of Federal Home Loan Bank Bonds.--The 
     Finance Facility may issue consolidated Federal Home Loan 
     Bank debt, which shall be the joint and several obligations 
     of all of the Federal Home Loan Banks, and shall be issued 
     upon such terms and conditions as set by the Finance Facility 
     for the Federal Home Loan Banks.'';
       (4) in section 6 (12 U.S.C. 1426)--
       (A) in subsection (b)(1), in the matter preceding 
     subparagraph (A), by striking ``Finance Board approval'' and 
     inserting ``approval by the Director''; and
       (B) in each of subsections (c)(4)(B) and (d)(2), by 
     striking ``Finance Board regulations'' each place that term 
     appears and inserting ``regulations of the Director'';
       (5) in section 10(b) (12 U.S.C. 1430(b))--
       (A) in the subsection heading, by striking ``Formal Board 
     Resolution'' and inserting ``Approval of Director''; and
       (B) by striking ``by formal resolution'';
       (6) in section 21(b)(5) (12 U.S.C. 1441(b)(5)), by striking 
     ``Chairperson of the Federal Housing Finance Board'' and 
     inserting ``Director'';
       (7) in section 15 (12 U.S.C. 1435), by striking ``issued 
     with the approval of the Board'' and inserting ``issued under 
     section 11(b)'';
       (8) by striking ``the Board'' each place that term appears 
     and inserting ``the Director'';
       (9) by striking ``The Board'' each place that term appears 
     and inserting ``The Director'';
       (10) by striking ``the Finance Board'' each place that term 
     appears and inserting ``the Director'';
       (11) by striking ``The Finance Board'' each place that term 
     appears and inserting ``The Director''; and
       (12) by striking ``Federal Housing Finance Board'' each 
     place that term appears and inserting ``Director''.

     SEC. 2204. FEDERAL HOME LOAN BANK FINANCE FACILITY.

       The Federal Home Loan Bank Act (12 U.S.C. 1421 et seq.) is 
     amended by inserting after section 11 the following:

     ``SEC. 11A. FEDERAL HOME LOAN BANK FINANCE FACILITY.

       ``(a) Establishment.--
       ``(1) In general.--The Federal Home Loan Banks shall 
     establish a Federal Home Loan Bank Finance Facility.
       ``(2) Purposes.--The purposes of the Finance Facility are--
       ``(A) to issue and service the consolidated obligations of 
     the Federal Home Loan Banks in accordance with this Act; and
       ``(B) to perform all other necessary and proper functions 
     in relation to the issuance and service of such obligations, 
     as fiscal agent on behalf of the Federal Home Loan Banks, and 
     any other functions performed by the Office of Finance on 
     behalf of the Financing Corporation (established under 
     section 21) and the Resolution Funding Corporation 
     (established under section 21B).
       ``(3) Transfer of functions.--
       ``(A) In general.--The functions of the Office of Finance 
     of the Federal Home Loan Banks shall be transferred to the 
     Finance Facility on the effective time.
       ``(B) Organizational meeting.--The organizational meeting 
     of the management board of the Finance Facility shall occur 
     as soon as practicable after the date of enactment of the 
     Federal Housing Enterprise Regulatory Reform Act of 2008.
       ``(C) Interim procedures.--Until the effective time, the 
     predecessor office shall continue to operate as if this 
     section had not been enacted.
       ``(D) References.--After the effective time, any reference 
     under any provision of Federal law to the Office of Finance 
     and the Managing Director of the Office of Finance shall be 
     deemed to be references to the Finance Facility and the chief 
     executive officer of the Finance Facility, respectively.
       ``(4) Succession.--
       ``(A) Assets and liabilities.--On and after the effective 
     time, the Finance Facility shall, by operation of law and 
     without any further action by the Federal Housing Finance 
     Board, the Director, the predecessor office, or any court, 
     succeed to the assets of, and assume all debts, obligations, 
     contracts, and other liabilities of the predecessor office, 
     matured or unmatured, accrued or absolute, contingent or 
     otherwise, and whether or not reflected or reserved against 
     on balance sheets, books of account, or records of the 
     predecessor office.
       ``(B) Contracts.--On and after the effective time, the 
     existing contractual obligations of the Federal Housing 
     Finance Board, solely in its capacity as issuer of 
     consolidated obligations of the Federal Home Loan Banks and 
     the predecessor office shall, by operation of law and without 
     any further action by the Federal Housing Finance Board, the 
     Director, the predecessor office, or any court, become 
     obligations, entitlements, and instruments of the Finance 
     Facility.
       ``(C) Taxation.--The succession to assets, assumption of 
     liabilities, conversion of obligations and instruments, and 
     effectuation of any other transaction by the Finance Facility 
     to carry out this subsection shall not be treated as a 
     taxable event under the laws of any State, or any political 
     subdivision thereof.
       ``(b) Powers.--Subject to the provisions of this Act, and 
     such regulations as the Director may prescribe, the Finance 
     Facility shall have the power--
       ``(1) to issue and service Federal Home Loan Bank 
     consolidated notes, consolidated bonds, consolidated 
     debentures, and other consolidated obligations authorized 
     under section 11, as agent for the Federal Home Loan Banks;
       ``(2) to determine the amount, maturities, rate of 
     interest, terms, and other conditions

[[Page 5292]]

     of Federal Home Loan Bank consolidated obligations;
       ``(3) to make contracts;
       ``(4) to determine the terms and conditions under which the 
     Finance Facility may indemnify the members of the management 
     board, as well as officers, employees, and agents of the 
     Finance Facility;
       ``(5) to determine and implement the methodology for 
     assessments of the Federal Home Loan Banks to fund all of the 
     expenses of the Finance Facility; and
       ``(6) to exercise such incidental powers not inconsistent 
     with the provisions of this Act as are necessary or advisable 
     to carry out the purposes of the Finance Facility.
       ``(c) Management of the Finance Facility.--
       ``(1) Establishment.--The management of the Finance 
     Facility shall be vested in a management board composed of 
     the president of each of the Federal Home Loan Banks, ex 
     officio.
       ``(2) Duties.--The management board of the Finance Facility 
     shall administer the affairs of the Finance Facility in 
     accordance with the provisions of this section.
       ``(3) Interim appointments.--If the office of the president 
     of any Federal Home Loan Bank is vacant, the person serving 
     in such capacity on an acting basis shall serve on the 
     management board of the Finance Facility until replaced by 
     the next person to fill the office of the president of that 
     Federal Home Loan Bank.
       ``(4) Powers.--The management board of the Finance Facility 
     shall exercise such powers as may be necessary or advisable 
     to carry out this section, including the power to--
       ``(A) set policies for the management and operation of the 
     Finance Facility;
       ``(B) approve a strategic business plan for the Finance 
     Facility;
       ``(C) review, adopt, and monitor annual operation and 
     capital budgets of the Finance Facility;
       ``(D) constitute and perform the duties of an audit 
     committee, which to the extent possible shall operate 
     consistent with--
       ``(i) the requirements established for the Federal Home 
     Loan Banks; and
       ``(ii) the requirements pertaining to audit committee 
     reports set forth in the rules of the Securities and Exchange 
     Commission;
       ``(E) select, employ, determine the compensation for, and 
     assign the duties and functions of the President of the 
     Finance Facility, who shall--
       ``(i) be the chief executive officer for the Finance 
     Facility and shall direct the implementation of the policies 
     adopted by the management board of the Finance Facility;
       ``(ii) serve as a member of the Directorate of the 
     Financing Corporation, under section 21(b)(1)(A); and
       ``(iii) serve as a member of the Directorate of the 
     Resolution Funding Corporation under section 21B(c)(1)(A);
       ``(F) provide for the review and approval of all contracts 
     of the Finance Facility;
       ``(G) have the exclusive authority to employ and contract 
     for the services of an independent, external auditor for the 
     annual and quarterly combined financial statements of the 
     Federal Home Loan Banks; and
       ``(H) select, evaluate, determine the compensation of, and, 
     as appropriate, replace the internal auditor of the Finance 
     Facility, who may be removed only by vote of the management 
     board of the Finance Facility.
       ``(5) Pay.--The members of the management board of the 
     Finance Facility shall not receive compensation for their 
     services as members of the management board.
       ``(6) Quorum requirement.--
       ``(A) In general.--No business of the Finance Facility may 
     be conducted by the management board unless a quorum of the 
     members of the management board is present in person or by 
     telephone, or through action taken by written consent 
     executed by all of the members of the management board.
       ``(B) Number.--A quorum shall be a majority of the members 
     of the management board.
       ``(C) Vote required.--Action taken by the management board 
     shall be approved by a majority of the members in attendance 
     at any meeting at which a quorum is present, unless the 
     management board adopts procedures requiring a greater voting 
     requirement.
       ``(7) Appointment of officers and adoption of rules of 
     procedure.--The management board of the Finance Facility 
     shall--
       ``(A) select, from among the members of such board, a 
     Chairperson and a Vice Chairperson; and
       ``(B) adopt bylaws and other rules of procedure for actions 
     before the management board, including--
       ``(i) the establishment of 1 or more committees to take 
     action on behalf of the management board; and
       ``(ii) the delegation of powers of the management board to 
     any committee or officer of the Finance Facility.
       ``(d) Status.--Except to the extent expressly provided in 
     this Act, or in rules or regulations promulgated by the 
     Director, or unless the context clearly indicates otherwise, 
     the Finance Facility shall be accorded the same status as a 
     Federal Home Loan Bank for purposes of any other provision of 
     law (including section 13), other than section 1369F of the 
     Federal Housing Enterprises Financial Safety and Soundness 
     Act of 1992.
       ``(e) Definitions.--As used in this section--
       ``(1) the term `effective time' means the conclusion of the 
     organizational meeting of the management board of the Finance 
     Facility;
       ``(2) the term `Finance Facility' includes a corporation, 
     partnership, limited liability company, or joint venture that 
     is jointly owned by the Federal Home Loan Banks;
       ``(3) the term `management board' means the management 
     board of the Finance Facility established in accordance with 
     subsection (c); and
       ``(4) the term `predecessor office' means the Office of 
     Finance established as a joint office of the Federal Home 
     Loan Banks.''.

     SEC. 2205. EXCLUSION FROM CERTAIN SECURITIES REPORTING 
                   REQUIREMENTS.

       (a) In General.--The Federal Home Loan Banks shall be 
     exempt from compliance with--
       (1) sections 13(e), 14(a), 14(c), and 17A of the Securities 
     Exchange Act of 1934, and related Commission regulations; and
       (2) section 15 of the Securities Exchange Act of 1934, and 
     related Commission regulations, with respect to transactions 
     in the capital stock of a Federal Home Loan Bank.
       (b) Member Exemption.--The members of the Federal Home Loan 
     Bank System shall be exempt from compliance with sections 
     13(d), 13(f), 13(g), 14(d), and 16 of the Securities Exchange 
     Act of 1934, and related Commission regulations, with respect 
     to ownership of or transactions in the capital stock of the 
     Federal Home Loan Banks by such members.
       (c) Exempted and Government Securities.--
       (1) Capital stock.--The capital stock issued by each of the 
     Federal Home Loan Banks under section 6 of the Federal Home 
     Loan Bank Act are--
       (A) exempted securities, within the meaning of section 
     3(a)(2) of the Securities Act of 1933; and
       (B) exempted securities, within the meaning of section 
     3(a)(12)(A) of the Securities Exchange Act of 1934.
       (2) Other obligations.--The debentures, bonds, and other 
     obligations issued under section 11 of the Federal Home Loan 
     Bank Act (12 U.S.C. 1431) are--
       (A) exempted securities, within the meaning of section 
     3(a)(2) of the Securities Act of 1933;
       (B) government securities, within the meaning of section 
     3(a)(42) of the Securities Exchange Act of 1934; and
       (C) government securities, within the meaning of section 
     2(a)(16) of the Investment Company Act of 1940.
       (3) Brokers and dealers.--A person that effects 
     transactions in the capital stock or other obligations of a 
     Federal Home Loan Bank, for the account of others or for his 
     own account, as applicable, is excluded from the definition 
     of--
       (A) the term ``government securities broker'' under section 
     3(a)(43) of the Securities Exchange Act of 1934; and
       (B) the term ``government securities dealer'' under section 
     3(a)(44) of the Securities Exchange Act of 1934.
       (d) Exemption From Reporting Requirements.--The Federal 
     Home Loan Banks shall be exempt from periodic reporting 
     requirements under the securities laws pertaining to the 
     disclosure of--
       (1) related party transactions that occur in the ordinary 
     course of the business of the Banks with members; and
       (2) the unregistered sales of equity securities.
       (e) Tender Offers.--Commission rules relating to tender 
     offers shall not apply in connection with transactions in the 
     capital stock of the Federal Home Loan Banks.
       (f) Regulations.--
       (1) Final rules.--Not later than 1 year after the date of 
     enactment of this Act, the Commission shall issue final rules 
     to implement this section and the exemptions provided in this 
     section.
       (2) Considerations.--In issuing final regulations under 
     this section, the Commission shall consider the distinctive 
     characteristics of the Federal Home Loan Banks when 
     evaluating--
       (A) the accounting treatment with respect to the payment to 
     the Resolution Funding Corporation;
       (B) the role of the combined financial statements of the 
     Federal Home Loan Banks;
       (C) the accounting classification of redeemable capital 
     stock; and
       (D) the accounting treatment related to the joint and 
     several nature of the obligations of the Banks.
       (g) Definitions.--As used in this section--
       (1) the terms ``Bank'', ``Federal Home Loan Bank'', 
     ``member'', and ``Federal Home Loan Bank System'' have the 
     same meanings as in section 2 of the Federal Home Loan Bank 
     Act (12 U.S.C. 1422);
       (2) the term ``Commission'' means the Securities and 
     Exchange Commission; and
       (3) the term ``securities laws'' has the same meaning as in 
     section 3(a)(47) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78c(a)(47)).

     SEC. 2206. MERGERS.

       Section 26 of the Federal Home Loan Bank Act (12 U.S.C. 
     1446) is amended--
       (1) by striking ``Whenever'' and inserting ``(a) IN 
     GENERAL.--Whenever''; and

[[Page 5293]]

       (2) by adding at the end the following:
       ``(b) Mergers Authorized.--
       ``(1) In general.--Any Federal Home Loan Bank may, with the 
     approval of the Director and of the boards of directors of 
     the Banks involved, merge with another Bank.
       ``(2) Regulations required.--The Director shall promulgate 
     regulations establishing the conditions and procedures for 
     the consideration and approval of any voluntary merger 
     described in paragraph (1).''.

     SEC. 2207. AUTHORITY TO REDUCE DISTRICTS.

       Section 3 of the Federal Home Loan Bank Act (12 U.S.C. 
     1423) is amended--
       (1) by striking ``As soon'' and inserting ``(a) IN 
     GENERAL.--As soon''; and
       (2) by adding at the end the following:
       ``(b) Authority to Reduce Districts.--Notwithstanding 
     subsection (a), the number of districts may be reduced to a 
     number less than 8--
       ``(1) pursuant to a voluntary merger between Banks, as 
     approved pursuant to section 26(b); or
       ``(2) pursuant to a decision by the Director to liquidate a 
     bank pursuant to section 1367 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992.''.

     SEC. 2208. MANAGEMENT OF HOME LOAN BANKS.

       (a) Board of Directors.--Section 7(a)(1) of the Federal 
     Home Loan Bank Act (12 U.S.C. 1427(a)(1)) is amended to read 
     as follows:
       ``(1) In general.--Subject to paragraphs (2) through (4), 
     and except to the extent that action under section 1377 of 
     the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 results in a lesser number, the 
     management of each Federal home loan bank shall be vested in 
     a board of 13 directors, or such other number as the board of 
     directors of each Federal home loan bank determines 
     appropriate.''.
       (b) Apportionment Among States; Designation of State 
     Location.--Section 7(c) of the Federal Home Loan Bank Act (12 
     U.S.C. 1427(c)) is amended to read s follows:
       ``(c) Apportionment Among States; Designation of State 
     Location.--The number of elective directorships designated as 
     representing the members located in each separate State in a 
     bank district shall be determined by the Director, in the 
     approximate ratio of the percentage of the required stock, as 
     determined pursuant to regulation of the Director, of the 
     members located in the State at the end of the calendar year 
     next preceding the date of the election to the total required 
     stock, as so determined, of all members of such bank at the 
     end of such year, except that in the case of each State, such 
     number shall not be less than 1 or 2, as determined by the 
     board of directors of each Federal home loan bank, and shall 
     be not more than 6.''.

TITLE III--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY OF OFHEO AND 
                   THE FEDERAL HOUSING FINANCE BOARD

                           Subtitle A--OFHEO

     SEC. 2301. ABOLISHMENT OF OFHEO.

       (a) In General.--Effective at the end of the 1-year period 
     beginning on the date of enactment of this Act, the Office of 
     Federal Housing Enterprise Oversight of the Department of 
     Housing and Urban Development and the positions of the 
     Director and Deputy Director of such Office are abolished.
       (b) Disposition of Affairs.--During the 1-year period 
     beginning on the date of enactment of this Act, the Director 
     of the Office of Federal Housing Enterprise Oversight, solely 
     for the purpose of winding up the affairs of the Office of 
     Federal Housing Enterprise Oversight--
       (1) shall manage the employees of such Office and provide 
     for the payment of the compensation and benefits of any such 
     employee which accrue before the effective date of the 
     transfer of such employee under section 2303; and
       (2) may take any other action necessary for the purpose of 
     winding up the affairs of the Office.
       (c) Status of Employees Before Transfer.--The amendments 
     made by title I and the abolishment of the Office of Federal 
     Housing Enterprise Oversight under subsection (a) of this 
     section may not be construed to affect the status of any 
     employee of such Office as an employee of an agency of the 
     United States for purposes of any other provision of law 
     before the effective date of the transfer of any such 
     employee under section 2303.
       (d) Use of Property and Services.--
       (1) Property.--The Director may use the property of the 
     Office of Federal Housing Enterprise Oversight to perform 
     functions which have been transferred to the Director for 
     such time as is reasonable to facilitate the orderly transfer 
     of functions transferred under any other provision of this 
     Act or any amendment made by this Division to any other 
     provision of law.
       (2) Agency services.--Any agency, department, or other 
     instrumentality of the United States, and any successor to 
     any such agency, department, or instrumentality, which was 
     providing supporting services to the Office of Federal 
     Housing Enterprise Oversight before the expiration of the 
     period under subsection (a) in connection with functions that 
     are transferred to the Director shall--
       (A) continue to provide such services, on a reimbursable 
     basis, until the transfer of such functions is complete; and
       (B) consult with any such agency to coordinate and 
     facilitate a prompt and reasonable transition.
       (e) Savings Provisions.--
       (1) Existing rights, duties, and obligations not 
     affected.--Subsection (a) shall not affect the validity of 
     any right, duty, or obligation of the United States, the 
     Director of the Office of Federal Housing Enterprise 
     Oversight, or any other person, which--
       (A) arises under--
       (i) the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992;
       (ii) the Federal National Mortgage Association Charter Act;
       (iii) the Federal Home Loan Mortgage Corporation Act;
       (iv) or any other provision of law applicable with respect 
     to such Office; and
       (B) existed on the day before the date of abolishment under 
     subsection (a).
       (2) Continuation of suits.--No action or other proceeding 
     commenced by or against the Director of the Office of Federal 
     Housing Enterprise Oversight in connection with functions 
     that are transferred to the Director of the Federal Housing 
     Enterprise Regulatory Agency shall abate by reason of the 
     enactment of this Act, except that the Director of the 
     Federal Housing Enterprise Regulatory Agency shall be 
     substituted for the Director of the Office of Federal Housing 
     Enterprise Oversight as a party to any such action or 
     proceeding.

     SEC. 2302. CONTINUATION AND COORDINATION OF CERTAIN 
                   REGULATIONS.

       (a) In General.--All regulations, orders, and 
     determinations described in subsection (b) shall remain in 
     effect according to the terms of such regulations, orders, 
     and determinations, and shall be enforceable by or against 
     the Director or the Secretary of Housing and Urban 
     Development, as the case may be, until modified, terminated, 
     set aside, or superseded in accordance with applicable law by 
     the Director or the Secretary, as the case may be, any court 
     of competent jurisdiction, or operation of law.
       (b) Applicability.--A regulation, order, or determination 
     is described in this subsection if it--
       (1) was issued, made, prescribed, or allowed to become 
     effective by--
       (A) the Office of Federal Housing Enterprise Oversight;
       (B) the Secretary of Housing and Urban Development, and 
     relates to the authority of the Secretary under--
       (i) the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992;
       (ii) the Federal National Mortgage Association Charter Act, 
     with respect to the Federal National Mortgage Association; or
       (iii) the Federal Home Loan Mortgage Corporation Act, with 
     respect to the Federal Home Loan Mortgage Corporation; or
       (C) a court of competent jurisdiction, and relates to 
     functions transferred by this Division; and
       (2) is in effect on the effective date of the abolishment 
     under section 2301(a).

     SEC. 2303. TRANSFER AND RIGHTS OF EMPLOYEES OF OFHEO.

       (a) Transfer.--Each employee of the Office of Federal 
     Housing Enterprise Oversight shall be transferred to the 
     Agency for employment, not later than the effective date of 
     the abolishment under section 2301(a), and such transfer 
     shall be deemed a transfer of function for purposes of 
     section 3503 of title 5, United States Code.
       (b) Guaranteed Positions.--
       (1) In general.--Each employee transferred under subsection 
     (a) shall be guaranteed a position with the same status, 
     tenure, grade, and pay as that held on the day immediately 
     preceding the transfer.
       (2) No involuntary separation or reduction.--An employee 
     transferred under subsection (a) holding a permanent position 
     on the day immediately preceding the transfer may not be 
     involuntarily separated or reduced in grade or compensation 
     during the 12-month period beginning on the date of transfer, 
     except for cause, or, in the case of a temporary employee, 
     separated in accordance with the terms of the appointment of 
     the employee.
       (c) Appointment Authority for Excepted and Senior Executive 
     Service Employees.--
       (1) In general.--In the case of an employee occupying a 
     position in the excepted service or the Senior Executive 
     Service, any appointment authority established under law or 
     by regulations of the Office of Personnel Management for 
     filling such position shall be transferred, subject to 
     paragraph (2).
       (2) Decline of transfer.--The Director may decline a 
     transfer of authority under paragraph (1) to the extent that 
     such authority relates to--
       (A) a position excepted from the competitive service 
     because of its confidential, policymaking, policy-
     determining, or policy-advocating character; or
       (B) a noncareer position in the Senior Executive Service 
     (within the meaning of section 3132(a)(7) of title 5, United 
     States Code).
       (d) Reorganization.--If the Director determines, after the 
     end of the 1-year period beginning on the effective date of 
     the abolishment under section 2301(a), that a reorganization 
     of the combined workforce is required, that reorganization 
     shall be deemed a

[[Page 5294]]

     major reorganization for purposes of affording affected 
     employee retirement under section 8336(d)(2) or 8414(b)(1)(B) 
     of title 5, United States Code.
       (e) Employee Benefit Programs.--
       (1) In general.--Any employee of the Office of Federal 
     Housing Enterprise Oversight accepting employment with the 
     Agency as a result of a transfer under subsection (a) may 
     retain for 12 months after the date on which such transfer 
     occurs membership in any employee benefit program of the 
     Agency or the Office of Federal Housing Enterprise Oversight 
     of the Department of Housing and Urban Development, as 
     applicable, including insurance, to which such employee 
     belongs on the date of the abolishment under section 2301(a), 
     if--
       (A) the employee does not elect to give up the benefit or 
     membership in the program; and
       (B) the benefit or program is continued by the Director of 
     the Federal Housing Enterprise Regulatory Agency.
       (2) Cost differential.--
       (A) In general.--The difference in the costs between the 
     benefits which would have been provided by the Office of 
     Federal Housing Enterprise Oversight and those provided by 
     this section shall be paid by the Director.
       (B) Health insurance.--If any employee elects to give up 
     membership in a health insurance program or the health 
     insurance program is not continued by the Director, the 
     employee shall be permitted to select an alternate Federal 
     health insurance program not later than 30 days after the 
     date of such election or notice, without regard to any other 
     regularly scheduled open season.

     SEC. 2304. TRANSFER OF PROPERTY AND FACILITIES.

       Upon the effective date of its abolishment under section 
     2301(a), all property of the Office of Federal Housing 
     Enterprise Oversight shall transfer to the Agency.

               Subtitle B--Federal Housing Finance Board

     SEC. 2311. ABOLISHMENT OF THE FEDERAL HOUSING FINANCE BOARD.

       (a) In General.--Effective at the end of the 1-year period 
     beginning on the date of enactment of this Act, the Federal 
     Housing Finance Board (in this subtitle referred to as the 
     ``Board'') is abolished.
       (b) Disposition of Affairs.--During the 1-year period 
     beginning on the date of enactment of this Act, the Board, 
     solely for the purpose of winding up the affairs of the 
     Board--
       (1) shall manage the employees of the Board and provide for 
     the payment of the compensation and benefits of any such 
     employee which accrue before the effective date of the 
     transfer of such employee under section 2313; and
       (2) may take any other action necessary for the purpose of 
     winding up the affairs of the Board.
       (c) Status of Employees Before Transfer.--The amendments 
     made by titles I and II and the abolishment of the Board 
     under subsection (a) may not be construed to affect the 
     status of any employee of the Board as an employee of an 
     agency of the United States for purposes of any other 
     provision of law before the effective date of the transfer of 
     any such employee under section 2313.
       (d) Use of Property and Services.--
       (1) Property.--The Director may use the property of the 
     Board to perform functions which have been transferred to the 
     Director, for such time as is reasonable to facilitate the 
     orderly transfer of functions transferred under any other 
     provision of this Division or any amendment made by this 
     Division to any other provision of law.
       (2) Agency services.--Any agency, department, or other 
     instrumentality of the United States, and any successor to 
     any such agency, department, or instrumentality, which was 
     providing supporting services to the Board before the 
     expiration of the 1-year period under subsection (a) in 
     connection with functions that are transferred to the 
     Director shall--
       (A) continue to provide such services, on a reimbursable 
     basis, until the transfer of such functions is complete; and
       (B) consult with any such agency to coordinate and 
     facilitate a prompt and reasonable transition.
       (e) Savings Provisions.--
       (1) Existing rights, duties, and obligations not 
     affected.--Subsection (a) shall not affect the validity of 
     any right, duty, or obligation of the United States, a member 
     of the Board, or any other person, which--
       (A) arises under the Federal Home Loan Bank Act, or any 
     other provision of law applicable with respect to the Board; 
     and
       (B) existed on the day before the effective date of the 
     abolishment under subsection (a).
       (2) Continuation of suits.--No action or other proceeding 
     commenced by or against the Board in connection with 
     functions that are transferred under this Division to the 
     Director shall abate by reason of the enactment of this Act, 
     except that the Director shall be substituted for the Board 
     or any member thereof as a party to any such action or 
     proceeding.

     SEC. 2312. CONTINUATION AND COORDINATION OF CERTAIN 
                   REGULATIONS.

       (a) In General.--All regulations, orders, and 
     determinations described under subsection (b) shall remain in 
     effect according to the terms of such regulations, orders, 
     and determinations, and shall be enforceable by or against 
     the Director until modified, terminated, set aside, or 
     superseded in accordance with applicable law by the Director, 
     any court of competent jurisdiction, or operation of law.
       (b) Applicability.--A regulation, order, or determination 
     is described under this subsection if it--
       (1) was issued, made, prescribed, or allowed to become 
     effective by--
       (A) the Board; or
       (B) a court of competent jurisdiction, and relates to 
     functions transferred by this title; and
       (2) is in effect on the effective date of the abolishment 
     under section 2311(a).

     SEC. 2313. TRANSFER AND RIGHTS OF EMPLOYEES OF THE FEDERAL 
                   HOUSING FINANCE BOARD.

       (a) Transfer.--Each employee of the Board shall be 
     transferred to the Agency for employment, not later than the 
     effective date of the abolishment under section 2311(a), and 
     such transfer shall be deemed a transfer of function for 
     purposes of section 3503 of title 5, United States Code.
       (b) Guaranteed Positions.--
       (1) In general.--Each employee transferred under subsection 
     (a) shall be guaranteed a position with the same status, 
     tenure, grade, and pay as that held on the day immediately 
     preceding the transfer.
       (2) No involuntary separation or reduction.--An employee 
     holding a permanent position on the day immediately preceding 
     the transfer may not be involuntarily separated or reduced in 
     grade or compensation during the 12-month period beginning on 
     the date of transfer, except for cause, or, if the employee 
     is a temporary employee, separated in accordance with the 
     terms of the appointment of the employee.
       (c) Appointment Authority for Excepted and Senior Executive 
     Service Employees.--
       (1) In general.--In the case of an employee occupying a 
     position in the excepted service or the Senior Executive 
     Service, any appointment authority established under law or 
     by regulations of the Office of Personnel Management for 
     filling such position shall be transferred, subject to 
     paragraph (2).
       (2) Decline of transfer.--The Director may decline a 
     transfer of authority under paragraph (1) to the extent that 
     such authority relates to--
       (A) a position excepted from the competitive service 
     because of its confidential, policymaking, policy-
     determining, or policy-advocating character; or
       (B) a noncareer position in the Senior Executive Service 
     (within the meaning of section 3132(a)(7) of title 5, United 
     States Code).
       (d) Reorganization.--If the Director determines, after the 
     end of the 1-year period beginning on the effective date of 
     the abolishment under section 2311(a), that a reorganization 
     of the combined workforce is required, that reorganization 
     shall be deemed a major reorganization for purposes of 
     affording affected employee retirement under section 
     8336(d)(2) or 8414(b)(1)(B) of title 5, United States Code.
       (e) Employee Benefit Programs.--
       (1) In general.--Any employee of the Board accepting 
     employment with the Agency as a result of a transfer under 
     subsection (a) may retain for 12 months after the date on 
     which such transfer occurs membership in any employee benefit 
     program of the Agency or the Board, as applicable, including 
     insurance, to which such employee belongs on the effective 
     date of the abolishment under section 2311(a) if--
       (A) the employee does not elect to give up the benefit or 
     membership in the program; and
       (B) the benefit or program is continued by the Director.
       (2) Cost differential.--
       (A) In general.--The difference in the costs between the 
     benefits which would have been provided by the Board and 
     those provided by this section shall be paid by the Director.
       (B) Health insurance.--If any employee elects to give up 
     membership in a health insurance program or the health 
     insurance program is not continued by the Director, the 
     employee shall be permitted to select an alternate Federal 
     health insurance program not later than 30 days after the 
     date of such election or notice, without regard to any other 
     regularly scheduled open season.

     SEC. 2314. TRANSFER OF PROPERTY AND FACILITIES.

       Upon the effective date of the abolishment under section 
     2311(a), all property of the Board shall transfer to the 
     Agency.

                     TITLE IV--STUDIES AND REPORTS

     SEC. 2401. STUDY AND REPORT ON BASEL II AND ENTERPRISE DEBT.

       (a) Study.--The Board of Governors of the Federal Reserve 
     System shall conduct a study on the effects on the regulated 
     entities of the new Basel Capital Accord (Basel II), as 
     endorsed by the Group of Ten countries in ``The International 
     Convergence of Capital Measurement and Capital Standards: a 
     Revised Framework''. The study shall examine the debt of the 
     regulated entities and the capital classification on 
     financial institutions that hold such debt.
       (b) Report.--The Chairman of the Board of Governors of the 
     Federal Reserve System shall submit a report to Congress on 
     the results of the study required by this section

[[Page 5295]]

     not later than 2 years after the date of enactment of this 
     Act.

     SEC. 2402. AFFORDABLE HOUSING AUDITS.

       The Inspector General of the Agency shall conduct an annual 
     audit of the affordable housing activities, programs, and 
     partnerships of the Federal National Mortgage Association and 
     the Federal Home Loan Mortgage Corporation, to ensure that 
     such activities, programs, and partnerships support the 
     affordable housing missions of those enterprises.

     SEC. 2403. REPORT ON INSURED DEPOSITORY INSTITUTION HOLDINGS 
                   OF REGULATED ENTITY DEBT AND MORTGAGE-BACKED 
                   SECURITIES.

       Not later than 2 years after the date of enactment of this 
     Act, the Director, the Secretary of the Treasury, the Board 
     of Governors of the Federal Reserve System, the Board of 
     Directors of the Federal Deposit Insurance Corporation, and 
     the National Credit Union Administration Board shall jointly 
     submit a report to Congress regarding--
       (1) the extent to which obligations issued or guaranteed by 
     the regulated entities (including mortgage-backed securities) 
     are held by federally insured depository institutions, 
     including such extent by type of institution and such extent 
     relative to the capital of the institution;
       (2) the extent to which the unlimited holdings by federally 
     insured depository institutions of the obligations of the 
     regulated entities could produce systemic risk issues, 
     particularly for the safety and soundness of the banking 
     system in the United States, in the event of default or 
     failure by a regulated entity;
       (3) the effects on the regulated entities, the banking 
     industry, and mortgage markets, if prudent limits on the 
     holdings of the obligations of a regulated entity were placed 
     on federally insured depository institutions; and
       (4) the extent to which alternative investments are 
     available to community depository institutions, and the 
     impact that such alternative investments would have on the 
     safety and soundness and capital levels of such community 
     depository institutions.

     SEC. 2404. REPORT ON RISK-BASED CAPITAL LEVELS.

       (a) In General.--The Director shall submit a report to 
     Congress at the end of each fiscal quarter regarding--
       (1) the risk-based capital levels for the regulated 
     entities under section 1361 of the Federal Housing 
     Enterprises Financial Safety and Soundness Act of 1992, as 
     amended by this Division, including a description of the 
     risk-based capital test under that section 1361 and any 
     assumptions of the Director and factors used by the Director 
     in establishing the test; and
       (2) the minimum and critical capital levels for the 
     regulated entities pursuant to sections 1362 and 1363, 
     respectively, of that Act, as so amended.
       (b) Timing.--Each report under this section shall be 
     submitted not later than 60 days after the end of each fiscal 
     quarter.

     SEC. 2405. REPORT ON RESOURCES AND ALLOCATIONS.

       The Comptroller General of the United States shall submit a 
     report to Congress annually, on a fiscal year basis, 
     regarding--
       (1) the allocation of resources of the Agency by the 
     Director; and
       (2) the level of assessments collected by the Director for 
     the operation of the Agency.

     SEC. 2406. STUDY AND REPORT ON GUARANTEE FEES.

       (a) Ongoing Study of Fees.--The Director shall conduct an 
     ongoing study of fees charged by enterprises for guaranteeing 
     a mortgage.
       (b) Collection of Data.--The Director shall, by regulation 
     or order, establish procedures for the collection of data 
     from enterprises for purposes of this subsection, including 
     the format and the process for collection of such data.
       (c) Report to Congress.--The Director shall annually submit 
     a report to Congress on the results of the study conducted 
     under subsection (a), based on the aggregated data collected 
     under subsection (a) for the subject year, regarding the 
     amount of such fees and the criteria used by the enterprises 
     to determine such fees.
       (d) Contents of Reports.--The reports required under 
     subsection (c) shall identify and analyze--
       (1) the factors considered in determining the amount of the 
     guarantee fees charged;
       (2) the total revenue earned by the enterprises from 
     guarantee fees;
       (3) the total costs incurred by the enterprises for 
     providing guarantees;
       (4) the average guarantee fee charged by the enterprises;
       (5) an analysis of any increase or decrease in guarantee 
     fees from the preceding year;
       (6) a breakdown of the revenue and costs associated with 
     providing guarantees, based on product type and risk 
     classifications; and
       (7) a breakdown of guarantee fees charged based on asset 
     size of the originator and the number of loans sold or 
     transferred to an enterprise.
       (e) Protection of Information.--Nothing in this section may 
     be construed to require or authorize the Director to publicly 
     disclose information that is confidential or proprietary.

     SEC. 2407. REPORT ON CONFORMING LOAN LIMITS.

       The Comptroller General of the United States shall submit a 
     report to Congress on whether raising the loan limits under 
     section 302(b) of the Federal National Mortgage Association 
     Act (12 U.S.C. 1717(b)) and section 305(a) of the Federal 
     Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)) would 
     promote the availability of affordable housing.

     SEC. 2408. REVIEWS AND STUDIES RELATING TO ENTERPRISES AND 
                   RELATED FOUNDATIONS.

       (a) Annual Reviews.--The Director shall annually conduct a 
     review of the Freddie Mac Foundation and the Office of 
     Corporate Giving of the Federal National Mortgage Corporation 
     (formerly known as the ``Fannie Mae Foundation''), or any 
     successors thereto, to ensure that such entities are not 
     engaged in impermissible lobbying activities.
       (b) Study on Lobbying Activities To Obstruct Special 
     Examination.--The Director shall conduct a study to determine 
     whether any actions or inactions by an OFHEO-designated 
     executive officer of a Government-Sponsored Enterprise, that 
     was an employee of the Government-Sponsored-Enterprise during 
     the period of review of the OFHEO Special Examination of 
     Accounting Policies and Practices of Fannie Mae for the years 
     1998 through mid-2004 and remains an employee of such 
     Government-Sponsored Enterprise as of the date of enactment 
     of this Act, were intended to obstruct the Special 
     Examination by OFHEO.
       (c) Report.--The Director shall submit a report to Congress 
     on the results of the reviews and study required under 
     subsections (a) and (b), not later than 60 days after the 
     date of enactment of this Act, and annually thereafter with 
     respect to the reviews conducted under subsection (a).

     SEC. 2409. RECOMMENDATIONS.

       Each report submitted pursuant to this title shall include 
     specific recommendations, if any, of appropriate policies, 
     limitations, regulations, legislation, or other actions to 
     deal appropriately and effectively with the issues addressed 
     by such report.

                    TITLE V--GSE MISSION IMPROVEMENT

     SEC. 2501 SHORT TITLE.

       This title may be cited as the ``Federal Housing Enterprise 
     Regulatory Reform Act of 2008'' or the ``GSE Mission 
     Improvement Act''.

     SEC. 2502. ANNUAL HOUSING REPORT REGARDING ENTERPRISES.

       (a) Repeal.--Section 1324 of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4544) is hereby repealed.
       (b) Annual Housing Report.--The Housing and Community 
     Development Act of 1992 is amended by inserting after section 
     1323 the following:

     ``SEC. 1324. ANNUAL HOUSING REPORT REGARDING ENTERPRISES.

       ``(a) In General.--After reviewing and analyzing the 
     reports submitted under section 309(n) of the Federal 
     National Mortgage Association Charter Act and section 307(f) 
     of the Federal Home Loan Mortgage Corporation Act, the 
     Secretary shall submit a report, not later than October 30 of 
     each year, to the Committee on Banking, Housing, and Urban 
     Affairs of the Senate and the Committee on Financial Services 
     of the House of Representatives, on the activities of each 
     enterprise.
       ``(b) Contents.--The report required under subsection (a) 
     shall--
       ``(1) discuss--
       ``(A) the extent to and manner in which--
       ``(i) each enterprise is achieving the annual housing goals 
     established under subpart B;
       ``(ii) each enterprise is complying with its duty to serve 
     underserved markets, as established under section 1335;
       ``(iii) each enterprise is complying with section 1337; and
       ``(iv) each enterprise is achieving the purposes of the 
     enterprise established by law; and
       ``(B) the actions that each enterprise could undertake to 
     promote and expand the purposes of the enterprise;
       ``(2) aggregate and analyze relevant data on income to 
     assess the compliance of each enterprise with the housing 
     goals established under subpart B;
       ``(3) aggregate and analyze data on income, race, and 
     gender by census tract and other relevant classifications, 
     and compare such data with larger demographic, housing, and 
     economic trends;
       ``(4) identify the extent to which each enterprise is 
     involved in mortgage purchases and secondary market 
     activities involving subprime loans; and
       ``(5) compare the characteristics of subprime loans 
     purchased and securitized by each enterprise to other loans 
     purchased and securitized by each enterprise.
       ``(c) Data Collection and Reporting.--
       ``(1) In general.--To assist the Secretary in analyzing the 
     matters described in subsection (b), the Secretary shall 
     conduct, on a monthly basis, a survey of mortgage markets in 
     accordance with this subsection.
       ``(2) Data points.--Each monthly survey conducted by the 
     Secretary under paragraph (1) shall collect data on--
       ``(A) the characteristics of individual mortgages that are 
     eligible for purchase by the enterprises and the 
     characteristics of individual mortgages that are not eligible 
     for purchase by the enterprises including, in both cases, 
     information concerning--

[[Page 5296]]

       ``(i) the price of the house that secures the mortgage;
       ``(ii) the loan-to-value ratio of the mortgage, which shall 
     reflect any secondary liens on the relevant property;
       ``(iii) the terms of the mortgage;
       ``(iv) the creditworthiness of the borrower or borrowers; 
     and
       ``(v) whether the mortgage, in the case of a conforming 
     mortgage, was purchased by an enterprise;
       ``(B) the characteristics of individual subprime mortgages 
     that are eligible for purchase by the enterprises and the 
     characteristics of borrowers under such mortgages, including 
     the credit worthiness of such borrowers and determination 
     whether such borrowers would qualify for prime lending; and
       ``(C) such other matters as the Secretary determines to be 
     appropriate.
       ``(3) Public availability.--The Secretary shall make any 
     data collected by the Secretary in connection with the 
     conduct of a monthly survey available to the public in a 
     timely manner, provided that the Secretary may modify the 
     data released to the public to ensure that the data--
       ``(A) is not released in an identifiable form; and
       ``(B) is not otherwise obtainable from other publicly 
     available data sets.
       ``(4) Definition.--For purposes of this subsection, the 
     term `identifiable form' means any representation of 
     information that permits the identity of a borrower to which 
     the information relates to be reasonably inferred by either 
     direct or indirect means.''.

     SEC. 2503. PUBLIC USE DATABASE.

       Section 1323 of the Housing and Community Development Act 
     of 1992 (42 U.S.C. 4543) is amended--
       (1) in subsection (a)--
       (A) by striking ``(a) In General.--The Secretary'' and 
     inserting the following:
       ``(a) Availability.--
       ``(1) In general.--The Secretary''; and
       (B) by adding at the end the following new paragraph:
       ``(2) Census tract level reporting.--Such data shall 
     include the data elements required to be reported under the 
     Home Mortgage Disclosure Act of 1975, at the census tract 
     level.'';
       (2) in subsection (b)(2), by inserting before the period at 
     the end the following: ``or with subsection (a)(2)''; and
       (3) by adding at the end the following new subsection:
       ``(d) Timing.--Data submitted under this section by an 
     enterprise in connection with a provision referred to in 
     subsection (a) shall be made publicly available in accordance 
     with this section not later than September 30 of the year 
     following the year to which the data relates.''.

     SEC. 2504. REVISION OF HOUSING GOALS.

       (a) Repeal.--Sections 1331 through 1334 of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4561 through 
     4564) are hereby repealed.
       (b) Housing Goal.--The Housing and Community Development 
     Act of 1992 (12 U.S.C. 4301 et seq.) is amended by inserting 
     before section 1335 the following:

     ``SEC. 1331. ESTABLISHMENT OF HOUSING GOALS.

       ``(a) In General.--The Secretary shall, by regulation, 
     establish effective for the first calendar year that begins 
     after the date of enactment of the Federal Housing Enterprise 
     Regulatory Reform Act of 2008, and each year thereafter, 
     annual housing goals, as described in sections 1332, 1333, 
     and 1334, with respect to the mortgage purchases by the 
     enterprises.
       ``(b) Special Counting Requirements.--
       ``(1) In general.--The Secretary shall determine whether an 
     enterprise shall receive full, partial, or no credit for a 
     transaction toward achievement of any of the housing goals 
     established pursuant to this section or sections 1332 through 
     1334.
       ``(2) Considerations.--In making any determination under 
     paragraph (1), the Secretary shall consider whether a 
     transaction or activity of an enterprise is substantially 
     equivalent to a mortgage purchase and either (A) creates a 
     new market, or (B) adds liquidity to an existing market, 
     provided however that the terms and conditions of such 
     mortgage purchase is neither determined to be unacceptable, 
     nor contrary to good lending practices, and otherwise 
     promotes sustainable homeownership and further, that such 
     mortgage purchase actually fulfills the purposes of the 
     enterprise and is in accordance with the chartering Act of 
     such enterprise.
       ``(c) Eliminating Interest Rate Disparities.--
       ``(1) In general.--In establishing and implementing the 
     housing goals under this subpart, the Secretary shall require 
     the enterprises to disclose appropriate information to allow 
     the Secretary to assess if there are any disparities in 
     interest rates charged on mortgages to borrowers who are 
     minorities, as compared with borrowers of similar 
     creditworthiness who are not minorities, as evidenced in 
     reports pursuant to the Home Mortgage Disclosure Act of 1975.
       ``(2) Report to congress and remedy required on 
     disparities.--Upon a finding by the Secretary that a pattern 
     of disparities in interest rates exists pursuant to the 
     information provided by an enterprise under paragraph (1), 
     the Secretary shall--
       ``(A) forward to the Committee on Banking, Housing, and 
     Urban Affairs of the Senate and the Committee on Financial 
     Services of the House of Representatives a report detailing 
     the disparities; and
       ``(B) require the enterprise to take such actions as the 
     Secretary deems appropriate pursuant to this Act, to remedy 
     such identified interest rate disparities.
       ``(3) Identity of individuals not disclosed.--In carrying 
     out this subsection, the Secretary shall ensure that no 
     personally identifiable financial information that would 
     enable an individual borrower to be reasonably identified 
     shall be made public.
       ``(d) Timing.--The Secretary shall establish an annual 
     deadline for the establishment of housing goals described in 
     subsection (a), taking into consideration the need for the 
     enterprises to reasonably and sufficiently plan their 
     operations and activities in advance, including operations 
     and activities necessary to meet such goals.

     ``SEC. 1331A. DISCRETIONARY ADJUSTMENT OF HOUSING GOALS.

       ``(a) Authority.--An enterprise may petition the Secretary 
     in writing at any time during a year to reduce the level of 
     any goal for such year established pursuant to this subpart.
       ``(b) Standard for Reduction.--The Secretary may reduce the 
     level for a goal pursuant to such a petition only if--
       ``(1) market and economic conditions or the financial 
     condition of the enterprise require such action; or
       ``(2) efforts to meet the goal would result in the 
     constraint of liquidity, over investment in certain market 
     segments, or other consequences contrary to the intent of 
     this subpart, section 301(3) of the Federal National Mortgage 
     Association Charter Act (12 U.S.C. 1716(3)), or section 
     301(3) of the Federal Home Loan Mortgage Corporation Act (12 
     U.S.C. 1451 note), as applicable.
       ``(c) Determination.--
       ``(1) 30-day period.--The Secretary shall make a 
     determination regarding any proposed reduction within 30 days 
     of receipt of the petition regarding the reduction.
       ``(2) Extension.--The Secretary may extend the period 
     described in paragraph (1) for a single additional 15-day 
     period, but only if the Secretary requests additional 
     information from the enterprise.

     ``SEC. 1332. SINGLE-FAMILY HOUSING GOALS.

       ``(a) Establishment of Goals.--
       ``(1) In general.--The Secretary shall establish annual 
     goals for the purchase by each enterprise of conventional, 
     conforming, single-family, owner-occupied, purchase money 
     mortgages financing housing for each of the following:
       ``(A) Low-income families.
       ``(B) Families that reside in low-income areas.
       ``(C) Very low-income families.
       ``(2) Goals as percentage of total purchase money mortgage 
     purchases.--The goals established under paragraph (1) shall 
     be established as a percentage of the total number of single-
     family dwelling units financed by single-family purchase 
     money mortgages of the enterprise.
       ``(b) Determination of Compliance.--
       ``(1) In general.--The Secretary shall determine, for each 
     year that the housing goals under this section are in effect 
     pursuant to section 1331(a), whether each enterprise has 
     complied with the single-family housing goals established 
     under this section for such year.
       ``(2) Compliance requirements.--An enterprise shall be 
     considered to be in compliance with a goal described under 
     subsection (a) for a year, only if, for each of the types of 
     families described in subsection (a), the percentage of the 
     number of conventional, conforming, single-family, owner-
     occupied, purchase money mortgages purchased by each 
     enterprise in such year that serve such families, meets or 
     exceeds the target established under subsection (c) for the 
     year for such type of family.
       ``(c) Annual Targets.--
       ``(1) In general.--The Secretary shall establish annual 
     targets for each goal described in subsection (a).
       ``(2) Considerations.--In establishing annual targets under 
     paragraph (1), the Secretary shall consider--
       ``(A) national housing needs;
       ``(B) economic, housing, and demographic conditions;
       ``(C) the performance and effort of the enterprises toward 
     achieving the housing goals under this section in previous 
     years;
       ``(D) the ability of the enterprise to lead the industry in 
     making credit available;
       ``(E) recent information submitted in compliance with the 
     Home Mortgage Disclosure Act of 1975 and such other mortgage 
     data as may be available for non metropolitan areas regarding 
     conventional, conforming, single-family, owner-occupied, 
     purchase money mortgages originated and purchased;
       ``(F) the size of the purchase money conventional mortgage 
     market serving each of the types of families described in 
     subsection (a), relative to the size of the overall purchase 
     money mortgage market; and
       ``(G) the need to maintain the sound financial condition of 
     the enterprises.
       ``(d) Notice of Determination and Enterprise Comment.--

[[Page 5297]]

       ``(1) Notice.--Within 30 days of making a determination 
     under subsection (b) regarding compliance of an enterprise 
     for a year with the housing goals established under this 
     section and before any public disclosure thereof, the 
     Secretary shall provide notice of the determination to the 
     enterprise, which shall include an analysis and comparison, 
     by the Secretary, of the performance of the enterprise for 
     the year and the targets for the year under subsection (c).
       ``(2) Comment period.--The Secretary shall provide each 
     enterprise an opportunity to comment on the determination 
     during the 30-day period beginning upon receipt by the 
     enterprise of the notice.
       ``(e) Use of Borrower Income.--In monitoring the 
     performance of each enterprise pursuant to the housing goals 
     under this section and evaluating such performance (for 
     purposes of section 1336), the Secretary shall consider a 
     mortgagor's income to be the income of the mortgagor at the 
     time of origination of the mortgage.

     ``SEC. 1333. SINGLE-FAMILY HOUSING REFINANCE GOALS.

       ``(a) Prepayment of Existing Loans.--
       ``(1) In general.--The Secretary shall establish annual 
     goals for the purchase by each enterprise of mortgages on 
     conventional, conforming, single-family, owner-occupied 
     housing given to pay off or prepay an existing loan served by 
     the same property for each of the following:
       ``(A) Low-income families.
       ``(B) Families that reside in low-income areas.
       ``(C) Very low-income families.
       ``(2) Goals as percentage of total refinancing mortgage 
     purchases.--The goals described under paragraph (1) shall be 
     established as a percentage of the total number of single-
     family dwelling units refinanced by mortgage purchases of 
     each enterprise.
       ``(b) Determination of Compliance.--
       ``(1) In general.--The Secretary shall determine, for each 
     year that the housing goals under this section are in effect 
     pursuant to section 1331(a), whether each enterprise has 
     complied with the single-family housing refinance goals 
     established under this section for such year.
       ``(2) Compliance.--An enterprise shall be considered to be 
     in compliance with the goals of this section for a year, only 
     if, for each of the types of families described in subsection 
     (a), the percentage of the number of conventional, 
     conforming, single-family, owner-occupied refinancing 
     mortgages purchased by each enterprise in such year that 
     serve such families, meets or exceeds the target for the year 
     for such type of family that is established under subsection 
     (c).
       ``(c) Annual Targets.--
       ``(1) In general.--The Secretary shall establish annual 
     targets for each goal described in subsection (a).
       ``(2) Considerations.--In establishing annual targets under 
     paragraph (1), the Secretary shall consider--
       ``(A) national housing needs;
       ``(B) economic, housing, and demographic conditions;
       ``(C) the performance and effort of the enterprises toward 
     achieving the housing goals under this section in previous 
     years;
       ``(D) the ability of the enterprise to lead the industry in 
     making credit available;
       ``(E) recent information submitted in compliance with the 
     Home Mortgage Disclosure Act of 1975 and such other mortgage 
     data as may be available for non metropolitan areas regarding 
     mortgages on conventional, conforming, single-family, owner-
     occupied, refinanced mortgages originated and purchased;
       ``(F) the size of the refinance conventional mortgage 
     market serving each of the types of families described in 
     subsection (a) relative to the size of the overall refinance 
     conventional mortgage market; and
       ``(G) the need to maintain the sound financial condition of 
     the enterprises.
       ``(d) Notice of Determination and Enterprise Comment.--
       ``(1) Notice.--Within 30 days of making a determination 
     under subsection (b) regarding compliance of an enterprise 
     for a year with the housing goals established under this 
     section and before any public disclosure thereof, the 
     Secretary shall provide notice of the determination to the 
     enterprise, which shall include an analysis and comparison, 
     by the Secretary, of the performance of the enterprise for 
     the year and the targets for the year under subsection (c).
       ``(2) Comment period.--The Secretary shall provide each 
     enterprise an opportunity to comment on the determination 
     during the 30-day period beginning upon receipt by the 
     enterprise of the notice.
       ``(e) Use of Borrower Income.--In monitoring the 
     performance of each enterprise pursuant to the housing goals 
     under this section and evaluating such performance (for 
     purposes of section 1336), the Secretary shall consider a 
     mortgagor's income to be the income of the mortgagor at the 
     time of origination of the mortgage.

     ``SEC. 1334. MULTIFAMILY SPECIAL AFFORDABLE HOUSING GOAL.

       ``(a) Establishment.--
       ``(1) In general.--The Secretary shall establish, by 
     regulation, by unit or dollar volume, as determined by the 
     Secretary, an annual goal for the purchase by each enterprise 
     of:
       ``(A) Mortgages that finance dwelling units affordable to 
     very low-income families.
       ``(B) Mortgages that finance dwelling units assisted by the 
     low-income housing tax credit under section 42 of the 
     Internal Revenue Code of 1986.
       ``(2) Additional requirements for smaller projects.--The 
     Secretary shall establish additional requirements for the 
     purchase by each enterprise of mortgages described in 
     paragraph (1) for multifamily housing projects of a smaller 
     or limited size, which may be based on the number of dwelling 
     units in the project or the amount of the mortgage, or both, 
     and shall include multifamily housing projects of 5 to 50 
     units (as adjusted by the Secretary), or with mortgages of up 
     to $5,000,000 (as adjusted by the Secretary).
       ``(3) Factors.--In establishing the goal under this section 
     relating to mortgages on multifamily housing for an 
     enterprise, the Secretary shall consider--
       ``(A) national multifamily mortgage credit needs;
       ``(B) the performance and effort of the enterprise in 
     making mortgage credit available for multifamily housing in 
     previous years;
       ``(C) the size of the multifamily mortgage market;
       ``(D) the most recent information available for the 
     Residential Survey published by the Census Bureau, and such 
     other data as may be available regarding multifamily 
     mortgages;
       ``(E) the ability of the enterprise to lead the industry in 
     expanding mortgage credit availability at favorable terms, 
     especially for underserved markets, such as for--
       ``(i) small multifamily projects;
       ``(ii) multifamily properties in need of preservation and 
     rehabilitation; and
       ``(iii) multifamily properties located in rural areas; and
       ``(F) the need to maintain the sound financial condition of 
     the enterprise.
       ``(b) Units Financed by Housing Finance Agency Bonds.--The 
     Secretary may give credit toward the achievement of the 
     multifamily special affordable housing goal under this 
     section (for purposes of section 1336) to dwelling units in 
     multifamily housing that otherwise qualify under such goal 
     and that is financed by tax-exempt or taxable bonds issued by 
     a State or local housing finance agency, but only if--
       ``(1) such bonds are secured by a guarantee of the 
     enterprise; or
       ``(2) are not investment grade and are purchased by the 
     enterprise.
       ``(c) Use of Tenant Income or Rent.--
       ``(1) In general.--The Secretary shall monitor the 
     performance of each enterprise in meeting the goals 
     established under this section and shall evaluate such 
     performance (for purposes of section 1336) based on--
       ``(A) if such data is available, the income of the 
     prospective or actual tenants of the property; or
       ``(B) if such data is not available, the rent levels 
     affordable to low-income and very low-income families.
       ``(2) Rent level.--A rent level shall be considered to be 
     affordable for purposes of this subsection for an income 
     category referred to in this subsection if it does not exceed 
     30 percent of the maximum income level of such income 
     category, with appropriate adjustments for unit size as 
     measured by the number of bedrooms.
       ``(d) Determination of Compliance.--
       ``(1) In general.--The Secretary shall, for each year that 
     the housing goal under this section is in effect pursuant to 
     section 1331(a), determine whether each enterprise has 
     complied with such goal and the additional requirements under 
     subsection (a)(2).
       ``(2) Compliance.--An enterprise shall be considered to be 
     in compliance with the goal of this section for a year only 
     if for each of the properties described in subsection (a), 
     the percentage of the number of multifamily mortgages 
     purchased by each enterprise in such year, that serve such 
     families, meets or exceeds the goals for the year for such 
     type of properties that are established under subsection (a).
       ``(e) Consideration of Units in Single-Family Rental 
     Housing.--In establishing any goal under this section, the 
     Secretary may take into consideration the number of housing 
     units financed by any mortgage on single-family rental 
     housing purchased by an enterprise.''.
       (c) Conforming Amendments.--The Housing and Community 
     Development Act of 1992 is amended--
       (1) in section 1335(a) (12 U.S.C. 4565(a)), in the matter 
     preceding paragraph (1), by striking ``low- and moderate-
     income housing goal'' and all that follows through ``section 
     1334'' and inserting ``housing goals established under this 
     subpart'';
       (2) in section 1336 (12 U.S.C. 4566)--
       (A) in section (a)(1), by striking ``sections 1332, 1333, 
     and 1334,'' and inserting ``this subpart''; and
       (B) in subsection (b)(1), by striking ``section 1332, 1333, 
     or 1334,'' and inserting ``this subpart''.
       (d) Definitions.--Section 1303 of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4502) is amended--
       (1) in paragraph (19), by striking ``60 percent'' each 
     place such term appears and inserting ``50 percent''; and
       (2) by adding at the end the following:
       ``(20) Conforming mortgage.--The term `conforming mortgage' 
     means, with respect

[[Page 5298]]

     to an enterprise, a conventional mortgage having an original 
     principal obligation that does not exceed the dollar 
     limitation, in effect at the time of such origination, 
     under--
       ``(A) section 302(b)(2) of the Federal National Mortgage 
     Association Charter Act; or
       ``(B) section 305(a)(2) of the Federal Home Loan Mortgage 
     Corporation Act.
       ``(21) Low-income area.--The term `low-income area' means a 
     census tract or block numbering area in which the median 
     income does not exceed 80 percent of the median income for 
     the area in which such census tract or block numbering area 
     is located, and, for the purposes of section 1332(a)(2), 
     shall include families having incomes not greater than 100 
     percent of the area median income who reside in minority 
     census tracts.
       ``(22) Very low-income.--
       ``(A) In general.--The term `very low-income' means--
       ``(i) in the case of owner-occupied units, income in excess 
     of 30 percent but not greater than 50 percent of the area 
     median income; and
       ``(ii) in the case of rental units, income in excess of 30 
     percent but not greater than 50 percent of the area median 
     income, with adjustments for smaller and larger families, as 
     determined by the Secretary.
       ``(B) Rule of construction for purposes of housing goals.--
     Notwithstanding subparagraph (A), for purposes of any housing 
     goal established under sections 1331 through 1334, the term 
     `very low-income' means--
       ``(i) in the case of owner-occupied units, families having 
     incomes not greater than 50 percent of the area median 
     income;
       ``(ii) in the case of rental units, families having incomes 
     not greater than 50 percent of the area median income, with 
     adjustments for smaller and larger families, as determined by 
     the Secretary.
       ``(23) Extremely low-income.--The term `extremely low-
     income' means--
       ``(A) in the case of owner-occupied units, income not in 
     excess of 30 percent of the area median income; and
       ``(B) in the case of rental units, income not in excess of 
     30 percent of the area median income, with adjustments for 
     smaller and larger families, as determined by the Secretary.
       ``(24) Shortage of standard rental units both affordable 
     and available to extremely low-income renter households.--
       ``(A) In general.--The term `shortage of standard rental 
     units both affordable and available to extremely low-income 
     renter households' means the gap between--
       ``(i) the number of units with complete plumbing and 
     kitchen facilities with a rent that is 30 percent or less of 
     30 percent of the adjusted area median income as determined 
     by the Secretary that are occupied by extremely low-income 
     renter households or are vacant for rent; and
       ``(ii) the number of extremely low-income renter 
     households.
       ``(B) Rule of construction.--If the number of units 
     described in subparagraph (A)(i) exceeds the number of 
     extremely low-income households as described in subparagraph 
     (A)(ii), there is no shortage.
       ``(25) Shortage of standard rental units both affordable 
     and available to very low-income renter households.--
       ``(A) In general.--The term `shortage of standard rental 
     units both affordable and available to very low-income renter 
     households' means the gap between--
       ``(i) the number of units with complete plumbing and 
     kitchen facilities with a rent that is 30 percent or less of 
     50 percent of the adjusted area median income as determined 
     by the Secretary that are occupied by either extremely low- 
     or very low-income renter households or are vacant for rent; 
     and
       ``(ii) the number of extremely low- and very low-income 
     renter households.
       ``(B) Rule of construction.--If the number of units 
     described in subparagraph (A)(i) exceeds the number of 
     extremely low- and very low-income households as described in 
     subparagraph (A)(ii), there is no shortage.''.

     SEC. 2505. DUTY TO SERVE UNDERSERVED MARKETS.

       (a) Establishment and Evaluation of Performance.--Section 
     1335 of the Housing and Community Development Act of 1992 (12 
     U.S.C. 4565) is amended--
       (1) in the section heading, by inserting ``DUTY TO SERVE 
     UNDERSERVED MARKETS AND'' before ``OTHER'';
       (2) by striking subsection (b);
       (3) in subsection (a)--
       (A) in the matter preceding paragraph (1), by inserting 
     ``and to carry out the duty under subsection (a) of this 
     section,'' before ``, each enterprise shall'';
       (B) in paragraph (3), by inserting ``and'' after the 
     semicolon at the end;
       (C) in paragraph (4), by striking ``; and'' and inserting a 
     period;
       (D) by striking paragraph (5); and
       (E) by redesignating such subsection as subsection (b);
       (4) by inserting before subsection (b) (as redesignated by 
     paragraph (3)(E) of this subsection) the following new 
     subsection:
       ``(a) Duty To Serve Underserved Markets.--
       ``(1) Duty.--In accordance with the purpose of the 
     enterprises under section 301(3) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1716) and section 
     301(b)(3) of the Federal Home Loan Mortgage Corporation Act 
     (12 U.S.C. 1451 note) to undertake activities relating to 
     mortgages on housing for very low-, low-, and moderate-income 
     families involving a reasonable economic return that may be 
     less than the return earned on other activities, each 
     enterprise shall have the duty to purchase or securitize 
     mortgage investments and improve the distribution of 
     investment capital available for mortgage financing for 
     underserved markets.
       ``(2) Underserved markets.--To meet its duty under 
     paragraph (1), each enterprise shall comply with the 
     following requirements with respect to the following 
     underserved markets:
       ``(A) Manufactured housing.--The enterprise shall lead the 
     industry in developing loan products and flexible 
     underwriting guidelines to facilitate a secondary market for 
     mortgages on manufactured homes for very low-, low-, and 
     moderate-income families.
       ``(B) Affordable housing preservation.--The enterprise 
     shall lead the industry in developing loan products and 
     flexible underwriting guidelines to facilitate a secondary 
     market to preserve housing affordable to extremely low-, very 
     low-, and low-income families, including housing projects 
     subsidized under--
       ``(i) the project-based and tenant-based rental assistance 
     programs under section 8 of the United States Housing Act of 
     1937;
       ``(ii) the program under section 236 of the National 
     Housing Act;
       ``(iii) the below-market interest rate mortgage program 
     under section 221(d)(4) of the National Housing Act;
       ``(iv) the supportive housing for the elderly program under 
     section 202 of the Housing Act of 1959;
       ``(v) the supportive housing program for persons with 
     disabilities under section 811 of the Cranston-Gonzalez 
     National Affordable Housing Act; and
       ``(vi) the rural rental housing program under section 515 
     of the Housing Act of 1949.
       ``(C) Subprime borrowers.--The enterprises shall lead the 
     industry in making mortgage credit available to low- and 
     moderate-income families with credit impairment, and shall 
     develop underwriting guidelines that preclude the purchase of 
     loans with unacceptable terms and conditions, or which are 
     contrary to good lending practices or to sustainable 
     homeownership, including--
       ``(i) mandatory arbitration provisions;
       ``(ii) single premium credit insurance financed into the 
     mortgages;
       ``(iii) unreasonable prepayment penalties and up front 
     fees;
       ``(iv) introductory rates that expire in less than 10 
     years; and
       ``(v) any other such loans with unacceptable terms and 
     conditions, or which are contrary to good lending practices 
     or to sustainable homeownership.
       ``(D) Community development financial institutions.--The 
     enterprises shall--
       ``(i) lead the industry in developing loan products and 
     flexible underwriting guidelines to facilitate a secondary 
     market for mortgages on unconventional affordable housing 
     loans made or purchased by Treasury certified community 
     development financial institutions and other nonprofit 
     housing lenders; and
       ``(ii) utilize credit facilities, capital and loss 
     reserves, credit enhancements, securitization, and other 
     methods to facilitate a secondary market for mortgages on 
     unconventional affordable housing loans made or purchased by 
     community development financial institutions certified by the 
     Secretary of the Treasury, as determined by the Secretary and 
     consistent with the Federal National Mortgage Association 
     Charter Act, the Federal Home Loan Mortgage Corporation Act, 
     and the provisions of this Act.
       ``(E) Community reinvestment act considerations.--The 
     enterprise shall take affirmative steps to assist depository 
     institutions to meet their obligations under the Community 
     Reinvestment Act, which shall include developing appropriate 
     underwriting standards, business practices, repurchase 
     requirements, pricing, fees, and procedures.
       ``(F) Rural and other underserved markets.--
       ``(i) In general.--The enterprises shall lead the industry 
     in developing loan products and flexible underwriting 
     guidelines to facilitate a secondary market for mortgages on 
     housing for very low-, low-, and moderate-income families in 
     rural areas, and for mortgages for housing for any other 
     underserved market for very low-, low-, and moderate-income 
     families that the Secretary identifies as lacking adequate 
     credit through conventional lending sources.
       ``(ii) Identification of underserved markets.--Underserved 
     markets may be identified for purposes of this paragraph by 
     borrower type, market segment, or geographic area.
       ``(G) Other underserved markets.--The Secretary may, by 
     rule, determine other underserved markets that the 
     enterprises shall be required to lead the market in 
     facilitating the availability of investment capital for 
     mortgage financing for such markets.''; and
       (5) by adding at the end the following new subsection:
       ``(c) Evaluation and Reporting of Compliance.--

[[Page 5299]]

       ``(1) Evaluating compliance.--
       ``(A) In general.--Not later than 6 months after the date 
     of enactment of the Federal Housing Enterprise Regulatory 
     Reform Act of 2008, the Secretary shall establish through 
     notice and comment rulemaking, a manner for evaluating 
     whether, and the extent to which, the enterprises have 
     complied with the duty under subsection (a) to serve 
     underserved markets, and for rating the extent of such 
     compliance.
       ``(B) Rating compliance.--Using the evaluation method 
     established under subparagraph (A), the Secretary shall, for 
     each year, evaluate such compliance and rate the performance 
     of each enterprise as to the extent of compliance.
       ``(C) Evaluations and ratings included in annual report of 
     the secretary.--The Secretary shall include such evaluation 
     and rating for each enterprise for a year in the report for 
     that year submitted pursuant to section 1319B(a).
       ``(2) Separate evaluations.--In determining whether an 
     enterprise has complied with the duty referred to in 
     paragraph (1), the Secretary shall separately evaluate 
     whether the enterprise has complied with such duty with 
     respect to each of the underserved markets identified in 
     subsection (a), taking into consideration--
       ``(A) the development of loan products and more flexible 
     underwriting guidelines;
       ``(B) the volume of loans purchased in each of such 
     underserved markets; and
       ``(C) such other factors as the Secretary may determine.''.
       (b) Enforcement.--Section 1336(a) of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4566(a)) is 
     amended--
       (1) in paragraph (1), by inserting ``and with the duty 
     under section 1335(a) of each enterprise with respect to 
     underserved markets'' before ``, as provided in this 
     section,''; and
       (2) by adding at the end the following new paragraph:
       ``(4) Enforcement of duty to provide mortgage credit to 
     underserved markets.--
       ``(A) In general.--The duty under section 1335(a) of each 
     enterprise to serve underserved markets (as determined in 
     accordance with section 1335(c)) shall be enforceable under 
     this section to the same extent and under the same provisions 
     that the housing goals established under sections 1332, 1333, 
     and 1334 are enforceable.
       ``(B) Limitation.--The duty under section 1335(a) shall not 
     be enforceable under any other provision of this title 
     (including subpart C of this part) other than this section or 
     under any provision of the Federal National Mortgage 
     Association Charter Act or the Federal Home Loan Mortgage 
     Corporation Act.''.

     SEC. 2506. MONITORING AND ENFORCING COMPLIANCE WITH HOUSING 
                   GOALS.

       Section 1336 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4566) is amended--
       (1) in subsection (b)--
       (A) in the subsection heading, by inserting ``Preliminary'' 
     before ``Determination'';
       (B) by striking paragraph (1) and inserting the following 
     new paragraph:
       ``(1) Notice.--If the Secretary preliminarily determines 
     that an enterprise has failed, or that there is a substantial 
     probability that an enterprise will fail to meet any housing 
     goal established under this subpart, the Secretary shall 
     provide written notice to the enterprise of such a 
     preliminary determination, the reasons for such 
     determination, and the information on which the Secretary 
     based the determination.'';
       (C) in paragraph (2)--
       (i) in subparagraph (A), by inserting ``finally'' before 
     ``determining'';
       (ii) by striking subparagraphs (B) and (C) and inserting 
     the following new subparagraph:
       ``(B) Extension or shortening of period.--The Secretary 
     may--
       ``(i) extend the period under subparagraph (A) for good 
     cause for not more than 30 additional days; and
       ``(ii) shorten the period under subparagraph (A) for good 
     cause.''; and
       (iii) by redesignating subparagraph (D) as subparagraph 
     (C); and
       (D) in paragraph (3)--
       (i) in subparagraph (A), by striking ``determine'' and 
     inserting ``issue a final determination of'';
       (ii) in subparagraph (B), by inserting ``final'' before 
     ``determinations''; and
       (iii) in subparagraph (C)--

       (I) by striking ``Committee on Banking, Finance and Urban 
     Affairs'' and inserting ``Committee on Financial Services''; 
     and
       (II) by inserting ``final'' before ``determination'' each 
     place such term appears; and

       (2) in subsection (c)--
       (A) by striking the subsection designation and heading and 
     all that follows through the end of paragraph (1) and 
     inserting the following:
       ``(c) Cease-and-Desist Orders, Civil Money Penalties, and 
     Remedies Including Housing Plans.--
       ``(1) Requirement.--
       ``(A) Housing plan.--If the Secretary finds, pursuant to 
     subsection (b), that there is a substantial probability that 
     an enterprise will fail, or has actually failed to meet any 
     housing goal under this subpart and that the achievement of 
     the housing goal was or is feasible, the Secretary may 
     require that the enterprise submit a housing plan under this 
     subsection.
       ``(B) Refusal to submit housing plan.--If the Secretary 
     makes such a finding and the enterprise refuses to submit 
     such a plan, submits an unacceptable plan, fails to comply 
     with the plan or the Secretary finds that the enterprise has 
     failed to meet any housing goal under this subpart, in 
     addition to requiring an enterprise to submit a housing plan, 
     the Secretary may--
       ``(i) issue a cease-and-desist order in accordance with 
     section 1341;
       ``(ii) impose civil money penalties in accordance with 
     section 1345; or
       ``(iii) order other remedies as set forth in paragraph (7) 
     of this subsection.'';
       (B) in paragraph (2)--
       (i) by striking ``Contents.--Each housing plan'' and 
     inserting ``Housing plan.--If the Secretary requires a 
     housing plan under this section, such a plan''; and
       (ii) in subparagraph (B), by inserting ``and changes in its 
     operations'' after ``improvements'';
       (C) in paragraph (3)--
       (i) by inserting ``comply with any remedial action or'' 
     before ``submit a housing plan''; and
       (ii) by striking ``under subsection (b)(3) that a housing 
     plan is required'';
       (D) in paragraph (4), by striking the first 2 sentences and 
     inserting the following:
       ``(A) Review.--The Secretary shall review each submission 
     by an enterprise, including a housing plan submitted under 
     this subsection, and not later than 30 days after submission, 
     approve or disapprove the plan or other action.
       ``(B) Extension of time.--The Secretary may extend the 
     period for approval or disapproval for a single additional 
     30-day period if the Secretary determines such extension 
     necessary.
       ``(C) Approval.--''; and
       (E) by adding at the end the following new paragraph:
       ``(7) Additional remedies for failure to meet goals.--In 
     addition to ordering a housing plan under this section, 
     issuing cease-and-desist orders under section 1341, and 
     ordering civil money penalties under section 1345, the 
     Secretary may--
       ``(A) seek other actions when an enterprise fails to meet a 
     goal; and
       ``(B) exercise appropriate enforcement authority available 
     to the Secretary under this Act.''.

     SEC. 2507. AFFORDABLE HOUSING PROGRAMS.

       (a) Repeal.--Sections 1337 of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4562 note) is hereby 
     repealed.
       (b) Annual Housing Report.--The Housing and Community 
     Development Act of 1992 is amended by inserting after section 
     1336 the following:

     ``SEC. 1337. AFFORDABLE HOUSING ALLOCATIONS.

       ``(a) Set Aside and Allocation of Amounts by Enterprises.--
     Subject to subsection (b), in each fiscal year--
       ``(1) the Federal Home Loan Mortgage Corporation shall--
       ``(A) set aside an amount equal to 4.2 basis points for 
     each dollar of unpaid principal balance of its total new 
     business purchases; and
       ``(B) allocate or otherwise transfer--
       ``(i) 65 percent of such amounts to the Secretary of 
     Housing and Urban Development to fund the affordable housing 
     block grant program established under section 1338; and
       ``(ii) 35 percent of such amounts to fund the Capital 
     Magnet Fund established pursuant to section 1339; and
       ``(2) the Federal National Mortgage Association shall--
       ``(A) set aside an amount equal to 4.2 basis points for 
     each dollar of unpaid principal balance of its total new 
     business purchases; and
       ``(B) allocate or otherwise transfer--
       ``(i) 65 percent of such amounts to the Secretary of 
     Housing and Urban Development to fund the affordable housing 
     block grant program established under section 1338; and
       ``(ii) 35 percent of such amounts to fund the Capital 
     Magnet Fund established pursuant to section 1339.
       ``(b) Suspension of Contributions.--The Secretary shall 
     temporarily suspend allocations under subsection (a) by an 
     enterprise upon a finding by the Secretary that such 
     allocations--
       ``(1) are contributing, or would contribute, to the 
     financial instability of the enterprise;
       ``(2) are causing, or would cause, the enterprise to be 
     classified as undercapitalized; or
       ``(3) are preventing, or would prevent, the enterprise from 
     successfully completing a capital restoration plan under 
     section 1369C.
       ``(c) Prohibition of Pass-Through of Cost of Allocations.--
     The Secretary shall, by regulation, prohibit each enterprise 
     from redirecting the costs of any allocation required under 
     this section, through increased charges or fees, or decreased 
     premiums, or in any other manner, to the originators of 
     mortgages purchased or securitized by the enterprise.
       ``(d) Enforcement of Requirements on Enterprise.--
     Compliance by the enterprises with the requirements under 
     this section shall be enforceable under subpart C. Any 
     reference in such subpart to this part or to

[[Page 5300]]

     an order, rule, or regulation under this part specifically 
     includes this section and any order, rule, or regulation 
     under this section.

     ``SEC. 1338. AFFORDABLE HOUSING BLOCK GRANT PROGRAM.

       ``(a) Establishment and Purpose.--The Secretary of Housing 
     and Urban Development shall establish and manage an 
     affordable housing block grant program, which shall be funded 
     with amounts allocated by the enterprises under section 1337. 
     The purpose of the block grant program under this section is 
     to provide grants to States for use--
       ``(1) to increase and preserve the supply of rental housing 
     for extremely low- and very low-income families, including 
     homeless families; and
       ``(2) to increase homeownership for extremely low- and very 
     low-income families.
       ``(b) Affordable Housing Block Grant Allocations for 
     Homeownership Preservation in Fiscal Year 2008.--
       ``(1) Assistance for homeowners facing foreclosure.--
       ``(A) In general.--To help address the subprime mortgage 
     crisis, in fiscal year 2008, 100 percent of the amounts 
     allocated for grants under this section shall be used to make 
     grants to States to--
       ``(i) facilitate loan modification and refinance options 
     for low- and moderate-income borrowers facing foreclosure; 
     and
       ``(ii) expeditiously make available to low- and moderate-
     income homebuyers, properties that have been foreclosed upon.
       ``(B) Distribution.--The amounts allocated to help address 
     the subprime mortgage crisis under subparagraph (A) shall be 
     distributed according to a formula established by the 
     Secretary.
       ``(2) Permissible designees.--A State receiving grant 
     amounts under this subsection may designate a State housing 
     finance agency, housing and community development entity, 
     tribally designated housing entity (as such term is defined 
     in section 4 of the Native American Housing Assistance and 
     Self-Determination Act of 1997 (25 U.S.C. 4103)), or any 
     other qualified instrumentality of the State to receive such 
     grant amounts.
       ``(3) Development of distribution formula.--Not later than 
     3 months after the date of enactment of the Federal Housing 
     Enterprise Regulatory Reform Act of 2008, the Secretary shall 
     develop the distribution formula required under paragraph 
     (1)(B). Such formula shall be based on the following factors:
       ``(A) The population of the State based on the most recent 
     estimate of the resident population of such State as 
     determined by the Bureau of the Census.
       ``(B) The 90-day delinquency rate of the State.
       ``(C) The ratio of foreclosures to owner-occupied 
     households within the State.
       ``(4) Eligible loan uses.--
       ``(A) Loans to homeowners to preserve homeownership.--
       ``(i) In general.--A State or State designated entity shall 
     use any grant amounts made available under this subsection 
     to--

       ``(I) support the refinancing of loans of eligible 
     homeowners, only if such loans have a loan-to-value ratio of 
     not greater than 100 percent of current appraised value of 
     the home on which such loan was taken;
       ``(II) reduce the outstanding loan balances of eligible 
     homeowners, but only if the lender, servicer, investor, or 
     other appropriate entity reduces such balance by the amount 
     necessary to bring the combined loan value (including first 
     and second mortgages) at or below 100 percent of the 
     appraised value of the home; and
       ``(III) pay off any outstanding amounts owed by eligible 
     homeowners for taxes and insurance.

       ``(ii) Program requirements for eligible homeowners.--

       ``(I) Development by states.--Each State or State 
     designated entity that is a recipient of a grant amount under 
     this subsection shall develop program requirements for 
     eligible homeowners seeking a loan under this subparagraph.
       ``(II) Required content.--The program requirements required 
     to be developed under this clause shall, at a minimum, 
     include the following:

       ``(aa) The annual income of the homeowner is no greater 
     than the annual income established by the Secretary as being 
     of low- or moderate-income.
       ``(bb) That any loan under this paragraph may be provided 
     for up to a 4-family owner-occupied residence, including 1-
     family units in a condominium project or a membership 
     interest and occupancy agreement in a cooperative housing 
     project, that is used, or is to be used, as the principal 
     residence of the applicant seeking such grant or loan.
       ``(cc) The homeowner has a loan with unsustainable loan 
     terms, as determined by a State housing finance agency or 
     other designated State agency. For purposes of this item, the 
     term `unsustainable loan terms' includes such activities as 
     the lack of escrow of taxes and insurance, the inclusion of 
     prepayment penalties, and the lack of the ability of the 
     homeowner to pay at the fully indexed interest rate because 
     the debt-to-income ratio on such home loan is greater than 45 
     percent.
       ``(iii) Loan requirements.--In order for a State or State 
     designated entity to use the amounts made available under 
     this subsection to assist eligible homeowners, a loan under 
     this subparagraph--

       ``(I) shall--

       ``(aa) have a fixed interest rate;
       ``(bb) be affordable, so that the maximum debt-to-income 
     ratio of such loan is not greater than 45 percent;
       ``(cc) require mandatory escrow of taxes and insurance;
       ``(dd) have no prepayment penalties;
       ``(ee) have no mandatory arbitration clauses; and
       ``(ff) if the loan-to-value ratio of the original mortgage 
     loan is greater than 100 percent, require the lender to 
     reduce such balance by the amount necessary to bring the loan 
     value at or below 100 percent of the appraised value of the 
     home;

       ``(II) shall not be due and payable unless--

       ``(aa) the real property securing such loan is sold, 
     transferred, or refinanced; or
       ``(bb) the last surviving homeowner of such real property 
     dies;

       ``(III) shall not exceed 10 percent of the principal 
     balance; and
       ``(IV) may be subordinated.

       ``(iv) Existing loan funds.--Any State or State designated 
     entity with a previously existing fund established to make 
     loans to assist homeowners in satisfying any amounts past due 
     on their home loan may use funds appropriated for purposes of 
     this subparagraph for that existing loan fund, even if the 
     eligibility, application, program, or use requirements for 
     that loan program differ from the eligibility, application, 
     program, and use requirements of this subparagraph, unless 
     such use is expressly determined by the Secretary to be 
     inappropriate.
       ``(v) No foreclosure if notice of application for home 
     preservation loan.--A mortgagee shall not initiate a 
     foreclosure--

       ``(I) upon receipt of a written confirmation from the State 
     or other State designated entity that the homeowner has 
     applied for a home preservation loan under this subparagraph; 
     and
       ``(II) for the 2-month period after receipt of such written 
     confirmation or until the mortgagee is informed, in writing, 
     that the homeowner is not eligible for a home preservation 
     loan, whichever occurs first.

       ``(B) Loans to nonprofit developers for the rehabilitation 
     and sale of foreclosed properties to low- and moderate-income 
     homebuyers.--
       ``(i) In general.--A State or State designated entity may 
     use up to 20 percent of the grant amounts made available 
     under this subsection for homeownership preservation to 
     provide loans to nonprofit affordable housing developers for 
     the purposes of assisting low- and moderate-income homebuyers 
     to purchase properties that are in the process of being 
     foreclosed upon or have been acquired by the mortgage holder 
     through the foreclosure process.
       ``(ii) Program requirements for nonprofit affordable 
     housing developers.--

       ``(I) In general.--Each State or State designated entity 
     that is a recipient of a grant under this subsection shall, 
     if they choose to use part of their grant award to make loans 
     under this subparagraph, develop program requirements for 
     nonprofit affordable housing developers for the purposes of 
     assisting low- and moderate-income homebuyers to purchase 
     properties that are in the process of being foreclosed upon 
     or have been acquired by the mortgage holder through the 
     foreclosure process.
       ``(II) Required content.--The program requirements 
     developed under subclause (I) shall, at a minimum, include 
     the following:

       ``(aa) That any loan under this clause may be provided for 
     up to a 4-family owner-occupied residence, including 1-family 
     units in a condominium project or a membership interest and 
     occupancy agreement in a cooperative housing project, that is 
     used, or is to be used, as the principal residence of a low- 
     or moderate-income homebuyer.
       ``(bb) The annual income of the low- or moderate-income 
     homebuyer is not greater than the annual income established 
     by the Secretary as being of low- or moderate-income.
       ``(cc) The property is in foreclosure or has been acquired 
     by the mortgage holder through the foreclosure process, the 
     property has been appraised, and the sales price of the 
     property does not exceed 100 percent of the appraised value 
     of the property.
       ``(iii) Loan requirements.--In order for a State or State 
     designated entity to use the amounts made available under 
     this subsection, a loan under this subparagraph--

       ``(I) may be used for--

       ``(aa) downpayment and closing costs;
       ``(bb) financing the difference between the sales price of 
     a home and the mortgage for which the low- or moderate-income 
     homebuyer qualifies; and
       ``(cc) repairs of a home not to exceed 10 percent of the 
     appraised value of the home;

       ``(II) shall carry a zero percent interest rate;
       ``(III) shall not be due and payable by the low- or 
     moderate-income homebuyer unless--

       ``(aa) the real property securing such loan is sold, 
     transferred, or refinanced; or
       ``(bb) the last surviving homeowner of such real property 
     dies; and

[[Page 5301]]

       ``(IV) may be subordinated.

       ``(iv) Existing loan funds.--Any State or State designated 
     entity with a previously existing fund established to make 
     loans for the purposes of this subparagraph may use funds 
     appropriated for purposes of this subparagraph for that 
     existing loan fund, even if the eligibility, application, 
     program, or use requirements for that loan program differ 
     from the eligibility, application, program, and use 
     requirements of this subparagraph, unless such use is 
     expressly determined by the Secretary to be inappropriate.
       ``(c) Allocation for Affordable Housing Block Grants in 
     2009 and Subsequent Years.--
       ``(1) In general.--Except as provided in subsection (b), 
     during each fiscal year the Secretary of Housing and Urban 
     Development shall distribute the amounts allocated for the 
     affordable housing block grant program under this section to 
     provide affordable housing as described in this subsection.
       ``(2) Permissible designees.--A State receiving grant 
     amounts under this subsection may designate a State housing 
     finance agency, housing and community development entity, 
     tribally designated housing entity (as such term is defined 
     in section 4 of the Native American Housing Assistance and 
     Self-Determination Act of 1997 (25 U.S.C. 4103)), or any 
     other qualified instrumentality of the State to receive such 
     grant amounts.
       ``(3) Distribution to states by needs-based formula.--
       ``(A) In general.--The Secretary of Housing and Urban 
     Development shall, by regulation, establish a formula within 
     12 months of the date of enactment of the Federal Housing 
     Enterprise Regulatory Reform Act of 2008, to distribute 
     amounts made available under this subsection to each State to 
     provide affordable housing to extremely low- and very low-
     income households.
       ``(B) Basis for formula.--The formula required under 
     subparagraph (A) shall include the following:
       ``(i) The ratio of the shortage of standard rental units 
     both affordable and available to extremely low-income renter 
     households in the State to the aggregate shortage of standard 
     rental units both affordable and available to extremely low-
     income renter households in all the States.
       ``(ii) The ratio of the shortage of standard rental units 
     both affordable and available to very low-income renter 
     households in the State to the aggregate shortage of standard 
     rental units both affordable and available to very low-income 
     renter households in all the States.
       ``(iii) The ratio of extremely-low income renter households 
     in the State living with either (I) incomplete kitchen or 
     plumbing facilities, (II) more than 1 person per room, or 
     (III) paying more than 50 percent of income for housing 
     costs, to the aggregate number of extremely low-income renter 
     households living with either (IV) incomplete kitchen or 
     plumbing facilities, (V) more than 1 person per room, or (VI) 
     paying more than 50 percent of income for housing costs in 
     all the States.
       ``(iv) The ratio of very low-income renter households in 
     the State paying more than 50 percent of income on rent 
     relative to the aggregate number of very low-income renter 
     households paying more than 50 percent of income on rent in 
     all the States.
       ``(v) The resulting sum calculated from the factors 
     described in clauses (i) through (iv) shall be multiplied by 
     the relative cost of construction in the State. For purposes 
     of this subclause, the term `cost of construction'--

       ``(I) means the cost of construction or building 
     rehabilitation in the State relative to the national cost of 
     construction or building rehabilitation; and
       ``(II) shall be calculated such that values higher than 1.0 
     indicate that the State's construction costs are higher than 
     the national average, a value of 1.0 indicates that the 
     State's construction costs are exactly the same as the 
     national average, and values lower than 1.0 indicate that the 
     State's cost of construction are lower than the national 
     average.

       ``(C) Priority.--The formula required under subparagraph 
     (A) shall give priority emphasis and consideration to the 
     factor described in subparagraph (B)(i).
       ``(4) Allocation of grant amounts.--
       ``(A) Notice.--Not later than 60 days after the date that 
     the Secretary of Housing and Urban Development determines the 
     formula amounts described in paragraph (3), the Secretary 
     shall caused to be published in the Federal Register a notice 
     that such amounts shall be so available.
       ``(B) Grant amount.--In each fiscal year other than fiscal 
     year 2008, the Secretary of Housing and Urban Development 
     shall make a block grant to each State in an amount that is 
     equal to the formula amount determined under paragraph (3) 
     for that State.
       ``(C) Minimum state allocations.--If the formula amount 
     determined under paragraph (3) for a fiscal year would 
     allocate less than $3,000,000 to any State, the allocation 
     for such State shall be $3,000,000, and the increase shall be 
     deducted pro rata from the allocations made to all other 
     States.
       ``(5) Allocation plans required.--
       ``(A) In general.--For each year that a State or State 
     designated entity receives an affordable housing block grant 
     under this subsection, the State or State designated entity 
     shall establish an allocation plan. Such plan shall--
       ``(i) set forth a plan for the distribution of grant 
     amounts received by the State or State designated entity for 
     such year;
       ``(ii) be based on priority housing needs, as determined by 
     the State or State designated entity in accordance with the 
     regulations established under subsection (g)(2)(C);
       ``(iii) comply with paragraph (6); and
       ``(iv) include performance goals that comply with the 
     requirements established by the Secretary pursuant to 
     subsection (g)(2).
       ``(B) Establishment.--In establishing an allocation plan 
     under this paragraph, a State or State designated entity 
     shall--
       ``(i) notify the public of the establishment of the plan;
       ``(ii) provide an opportunity for public comments regarding 
     the plan;
       ``(iii) consider any public comments received regarding the 
     plan; and
       ``(iv) make the completed plan available to the public.
       ``(C) Contents.--An allocation plan of a State or State 
     designated entity under this paragraph shall set forth the 
     requirements for eligible recipients under paragraph (8) to 
     apply for such grant amounts, including a requirement that 
     each such application include--
       ``(i) a description of the eligible activities to be 
     conducted using such assistance; and
       ``(ii) a certification by the eligible recipient applying 
     for such assistance that any housing units assisted with such 
     assistance will comply with the requirements under this 
     section.
       ``(6) Selection of activities funded using affordable 
     housing fund grant amounts.--Grant amounts received by a 
     State or State designated entity under this subsection may be 
     used, or committed for use, only for activities that--
       ``(A) are eligible under paragraph (7) for such use;
       ``(B) comply with the applicable allocation plan of the 
     State or State designated entity under paragraph (5); and
       ``(C) are selected for funding by the State or State 
     designated entity in accordance with the process and criteria 
     for such selection established pursuant to subsection 
     (g)(2)(C).
       ``(7) Eligible activities.--Grant amounts allocated to a 
     State or State designated entity under this subsection shall 
     be eligible for use, or for commitment for use, only for 
     assistance for--
       ``(A) the production, preservation, and rehabilitation of 
     rental housing, including housing under the programs 
     identified in section 1335(a)(2)(B) and for operating costs, 
     except that such grant amounts may be used for the benefit 
     only of extremely low- and very low-income families; and
       ``(B) the production, preservation, and rehabilitation of 
     housing for homeownership, including such forms as 
     downpayment assistance, closing cost assistance, and 
     assistance for interest rate buy-downs, that--
       ``(i) is available for purchase only for use as a principal 
     residence by families that qualify both as--

       ``(I) extremely low- and very low-income families at the 
     times described in subparagraphs (A) through (C) of section 
     215(b)(2) of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 12745(b)(2)); and
       ``(II) first-time homebuyers, as such term is defined in 
     section 104 of the Cranston-Gonzalez National Affordable 
     Housing Act (42 U.S.C. 12704), except that any reference in 
     such section to assistance under title II of such Act shall 
     for purposes of this subsection be considered to refer to 
     assistance from affordable housing fund grant amounts;

       ``(ii) has an initial purchase price that meets the 
     requirements of section 215(b)(1) of the Cranston-Gonzalez 
     National Affordable Housing Act;
       ``(iii) is subject to the same resale restrictions 
     established under section 215(b)(3) of the Cranston-Gonzalez 
     National Affordable Housing Act and applicable to the 
     participating jurisdiction that is the State in which such 
     housing is located; and
       ``(iv) is made available for purchase only by, or in the 
     case of assistance under this subsection, is made available 
     only to homebuyers who have, before purchase completed a 
     program of counseling with respect to the responsibilities 
     and financial management involved in homeownership that is 
     approved by the Secretary;
       ``(8) Eligible recipients.--Grant amounts allocated to a 
     State or State designated entity under this subsection may be 
     provided only to a recipient that is an organization, agency, 
     or other entity (including a for-profit entity or a nonprofit 
     entity) that--
       ``(A) has demonstrated experience and capacity to conduct 
     an eligible activity under paragraph (7), as evidenced by its 
     ability to--
       ``(i) own, construct or rehabilitate, manage, and operate 
     an affordable multifamily rental housing development;
       ``(ii) design, construct or rehabilitate, and market 
     affordable housing for homeownership; or
       ``(iii) provide forms of assistance, such as downpayments, 
     closing costs, or interest rate buy-downs for purchasers;
       ``(B) demonstrates the ability and financial capacity to 
     undertake, comply, and manage the eligible activity;

[[Page 5302]]

       ``(C) demonstrates its familiarity with the requirements of 
     any other Federal, State, or local housing program that will 
     be used in conjunction with such grant amounts to ensure 
     compliance with all applicable requirements and regulations 
     of such programs; and
       ``(D) makes such assurances to the State or State 
     designated entity as the Secretary shall, by regulation, 
     require to ensure that the recipient will comply with the 
     requirements of this subsection during the entire period that 
     begins upon selection of the recipient to receive such grant 
     amounts and ending upon the conclusion of all activities 
     under paragraph (8) that are engaged in by the recipient and 
     funded with such grant amounts.
       ``(9) Limitations on use.--
       ``(A) Required amount for homeownership activities.--Of the 
     aggregate amount allocated to a State or State designated 
     entity under this subsection not more than 10 percent shall 
     be used for activities under subparagraph (B) of paragraph 
     (7).
       ``(B) Deadline for commitment or use.--Grant amounts 
     allocated to a State or State designated entity under this 
     subsection shall be used or committed for use within 2 years 
     of the date that such grant amounts are made available to the 
     State or State designated entity. The Secretary shall 
     recapture any such amounts not so used or committed for use 
     and reallocate such amounts under this subsection in the 
     first year after such recapture.
       ``(C) Use of returns.--The Secretary shall, by regulation, 
     provide that any return on a loan or other investment of any 
     grant amount used by a State or State designated entity to 
     provide a loan under this subsection shall be treated, for 
     purposes of availability to and use by the State or State 
     designated entity, as a block grant amount authorized under 
     this subsection.
       ``(D) Prohibited uses.--The Secretary shall, by 
     regulation--
       ``(i) set forth prohibited uses of grant amounts allocated 
     under this subsection, which shall include use for--

       ``(I) political activities;
       ``(II) advocacy;
       ``(III) lobbying, whether directly or through other 
     parties;
       ``(IV) counseling services;
       ``(V) travel expenses; and
       ``(VI) preparing or providing advice on tax returns;

       ``(ii) provide that, except as provided in clause (iii), 
     affordable housing block grant amounts of a State or State 
     designated entity may not be used for administrative, 
     outreach, or other costs of--

       ``(I) the State or State designated entity; or
       ``(II) any other recipient of such grant amounts; and

       ``(iii) limit the amount of any affordable housing block 
     grant amounts for a year that may be used by the State or 
     State designated entity for administrative costs of carrying 
     out the program required under this subsection to a 
     percentage of such grant amounts of the State or State 
     designated entity for such year, which may not exceed 10 
     percent.
       ``(E) Prohibition of consideration of use for meeting 
     housing goals or duty to serve.--In determining compliance 
     with the housing goals under this subpart and the duty to 
     serve underserved markets under section 1335, the Secretary 
     may not consider any affordable housing block grant amounts 
     used under this section for eligible activities under 
     paragraph (7). The Secretary shall give credit toward the 
     achievement of such housing goals and such duty to serve 
     underserved markets to purchases by the enterprises of 
     mortgages for housing that receives funding from such block 
     grant amounts, but only to the extent that such purchases by 
     the enterprises are funded other than with such grant 
     amounts.
       ``(d) Reduction for Failure To Obtain Return of Misused 
     Funds.--If in any year a State or State designated entity 
     fails to obtain reimbursement or return of the full amount 
     required under subsection (e)(1)(B) to be reimbursed or 
     returned to the State or State designated entity during such 
     year--
       ``(1) except as provided in paragraph (2)--
       ``(A) the amount of the grant for the State or State 
     designated entity for the succeeding year, as determined 
     pursuant to this section, shall be reduced by the amount by 
     which such amounts required to be reimbursed or returned 
     exceed the amount actually reimbursed or returned; and
       ``(B) the amount of the grant for the succeeding year for 
     each other State or State designated entity whose grant is 
     not reduced pursuant to subparagraph (A) shall be increased 
     by the amount determined by applying the formula established 
     pursuant to this section to the total amount of all 
     reductions for all State or State designated entities for 
     such year pursuant to subparagraph (A); or
       ``(2) in any case in which such failure to obtain 
     reimbursement or return occurs during a year immediately 
     preceding a year in which grants under this section will not 
     be made, the State or State designated entity shall pay to 
     the Secretary for reallocation among the other grantees an 
     amount equal to the amount of the reduction for the entity 
     that would otherwise apply under paragraph (1)(A).
       ``(e) Accountability of Recipients and Grantees.--
       ``(1) Recipients.--
       ``(A) Tracking of funds.--The Secretary shall--
       ``(i) require each State or State designated entity to 
     develop and maintain a system to ensure that each recipient 
     of assistance under this section uses such amounts in 
     accordance with this section, the regulations issued under 
     this section, and any requirements or conditions under which 
     such amounts were provided; and
       ``(ii) establish minimum requirements for agreements, 
     between the State or State designated entity and recipients, 
     regarding assistance under this section, which shall 
     include--

       ``(I) appropriate periodic financial and project reporting, 
     record retention, and audit requirements for the duration of 
     the assistance to the recipient to ensure compliance with the 
     limitations and requirements of this section and the 
     regulations under this section; and
       ``(II) any other requirements that the Secretary determines 
     are necessary to ensure appropriate administration and 
     compliance.

       ``(B) Misuse of funds.--
       ``(i) Reimbursement requirement.--If any recipient of 
     assistance under this section is determined, in accordance 
     with clause (ii), to have used any such amounts in a manner 
     that is materially in violation of this section, the 
     regulations issued under this section, or any requirements or 
     conditions under which such amounts were provided, the State 
     or State designated entity shall require that, within 12 
     months after the determination of such misuse, the recipient 
     shall reimburse the State or State designated entity for such 
     misused amounts and return to the State or State designated 
     entity any such amounts that remain unused or uncommitted for 
     use. The remedies under this clause are in addition to any 
     other remedies that may be available under law.
       ``(ii) Determination.--A determination is made in 
     accordance with this clause if the determination is made by 
     the Secretary or made by the State or State designated 
     entity, provided that--

       ``(I) the State or State designated entity provides 
     notification of the determination to the Secretary for 
     review, in the discretion of the Secretary, of the 
     determination; and
       ``(II) the Secretary does not subsequently reverse the 
     determination.

       ``(2) Grantees.--
       ``(A) Report.--
       ``(i) In general.--The Secretary shall require each State 
     or State designated entity receiving grant amounts in any 
     given year under this section to submit a report, for such 
     year, to the Secretary that--

       ``(I) describes the activities funded under this section 
     during such year with such grant amounts; and
       ``(II) the manner in which the State or State designated 
     entity complied during such year with any allocation plan 
     established pursuant to subsection (c).

       ``(ii) Public availability.--The Secretary shall make such 
     reports pursuant to this subparagraph publicly available.
       ``(B) Misuse of funds.--If the Secretary determines, after 
     reasonable notice and opportunity for hearing, that a State 
     or State designated entity has failed to comply substantially 
     with any provision of this section, and until the Secretary 
     is satisfied that there is no longer any such failure to 
     comply, the Secretary shall--
       ``(i) reduce the amount of assistance under this section to 
     the State or State designated entity by an amount equal to 
     the amount of block grant amounts which were not used in 
     accordance with this section;
       ``(ii) require the State or State designated entity to 
     repay the Secretary an amount equal to the amount of the 
     amount block grant amounts which were not used in accordance 
     with this section;
       ``(iii) limit the availability of assistance under this 
     section to the State or State designated entity to activities 
     or recipients not affected by such failure to comply; or
       ``(iv) terminate any assistance under this section to the 
     State or State designated entity.
       ``(f) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Extremely low-income renter household.--The term 
     `extremely low-income renter household' means a household 
     whose income is not in excess of 30 percent of the area 
     median income, with adjustments for smaller and larger 
     families, as determined by the Secretary.
       ``(2) Recipient.--The term `recipient' means an individual 
     or entity that receives assistance from a State or State 
     designated entity from amounts made available to the State or 
     State designated entity under this section.
       ``(3) Shortage of standard rental units both affordable and 
     available to extremely low-income renter households.--
       ``(A) In general.--The term `shortage of standard rental 
     units both affordable and available to extremely low-income 
     renter households' means for any State or other geographical 
     area the gap between--
       ``(i) the number of units with complete plumbing and 
     kitchen facilities with a rent that is 30 percent or less of 
     30 percent of the

[[Page 5303]]

     adjusted area median income as determined by the Secretary 
     that are occupied by extremely low-income renter households 
     or are vacant for rent; and
       ``(ii) the number of extremely low-income renter 
     households.
       ``(B) Rule of construction.--If the number of units 
     described in subparagraph (A)(i) exceeds the number of 
     extremely low-income households as described in subparagraph 
     (A)(ii), there is no shortage.
       ``(4) Shortage of standard rental units both affordable and 
     available to very low-income renter households.--
       ``(A) In general.--The term `shortage of standard rental 
     units both affordable and available to very low-income renter 
     households' means for any State or other geographical area 
     the gap between--
       ``(i) the number of units with complete plumbing and 
     kitchen facilities with a rent that is 30 percent or less of 
     50 percent of the adjusted area median income as determined 
     by the Secretary that are occupied by very low-income renter 
     households or are vacant for rent; and
       ``(ii) the number of very low-income renter households.
       ``(B) Rule of construction.--If the number of units 
     described in subparagraph (A)(i) exceeds the number of very 
     low-income households as described in subparagraph (A)(ii), 
     there is no shortage.
       ``(5) Very low-income family.--The term `very low-income 
     family' has the meaning given such term in section 1303, 
     except that such term includes any family that resides in a 
     rural area that has an income that does not exceed the 
     poverty line (as such term is defined in section 673(2) of 
     the Omnibus Budget Reconciliation Act of 1981 (42 U.S.C. 
     9902(2)), including any revision required by such section) 
     applicable to a family of the size involved.
       ``(6) Very low-income renter households.--The term `very 
     low-income renter households' means a household whose income 
     is in excess of 30 percent but not greater than 50 percent of 
     the area median income, with adjustments for smaller and 
     larger families, as determined by the Secretary.
       ``(g) Regulations.--
       ``(1) In general.--The Secretary of Housing and Urban 
     Development, shall issue regulations to carry out this 
     section.
       ``(2) Required contents.--The regulations issued under this 
     subsection shall include--
       ``(A) a requirement that the Secretary ensure that the use 
     of block grant amounts under this section by States or State 
     designated entities is audited not less than annually to 
     ensure compliance with this section;
       ``(B) authority for the Secretary to audit, provide for an 
     audit, or otherwise verify a State or State designated 
     entity's activities to ensure compliance with this section;
       ``(C) requirements for a process for application to, and 
     selection by, each State or State designated entity for 
     activities meeting the State or State designated entity's 
     priority housing needs to be funded with block grant amounts 
     under this section, which shall provide for priority in 
     funding to be based upon--
       ``(i) geographic diversity;
       ``(ii) ability to obligate amounts and undertake activities 
     so funded in a timely manner;
       ``(iii) in the case of rental housing projects under 
     subsection (c)(7)(A), the extent to which rents for units in 
     the project funded are affordable, especially for extremely 
     low-income families;
       ``(iv) in the case of rental housing projects under 
     subsection (c)(7)(A), the extent of the duration for which 
     such rents will remain affordable;
       ``(v) the extent to which the application makes use of 
     other funding sources; and
       ``(vi) the merits of an applicant's proposed eligible 
     activity;
       ``(D) requirements to ensure that block grant amounts 
     provided to a State or State designated entity under this 
     section that are used for rental housing under subsection 
     (c)(7)(A) are used only for the benefit of extremely low- and 
     very low-income families; and
       ``(E) requirements and standards for establishment, by a 
     State or State designated entity, for use of block grant 
     amounts in 2009 and subsequent years of performance goals, 
     benchmarks, and timetables for the production, preservation, 
     and rehabilitation of affordable rental and homeownership 
     housing with such grant amounts.
       ``(h) Affordable Housing Trust Fund.--If, after the date of 
     enactment of the Federal Housing Enterprise Regulatory Reform 
     Act of 2008, in any year, there is enacted any provision of 
     Federal law establishing an affordable housing trust fund 
     other than under this title for use only for grants to 
     provide affordable rental housing and affordable 
     homeownership opportunities, and the subsequent year is a 
     year referred to in subsection (c), the Secretary shall in 
     such subsequent year and any remaining years referred to in 
     subsection (c) transfer to such affordable housing trust fund 
     the aggregate amount allocated pursuant to subsection (c) in 
     such year. Notwithstanding any other provision of law, 
     assistance provided using amounts transferred to such 
     affordable housing trust fund pursuant to this subsection may 
     not be used for any of the activities specified in clauses 
     (i) through (vi) of subsection (c)(9)(D).
       ``(i) Funding Accountability and Transparency.--Any grant 
     under this section to a grantee by a State or State 
     designated entity, any assistance provided to a recipient by 
     a State or State designated entity, and any grant, award, or 
     other assistance from an affordable housing trust fund 
     referred to in subsection (h) shall be considered a Federal 
     award for purposes of the Federal Funding Accountability and 
     Transparency Act of 2006 (31 U.S.C. 6101 note). Upon the 
     request of the Secretary of the Office of Management and 
     Budget, the Secretary shall obtain and provide such 
     information regarding any such grants, assistance, and awards 
     as the Secretary of the Office of Management and Budget 
     considers necessary to comply with the requirements of such 
     Act, as applicable, pursuant to the preceding sentence.
                                 ______
                                 
  SA 4491. Mr. GRASSLEY submitted an amendment intended to be proposed 
to amendment SA 4387 submitted by Mr. Dodd (for himself and Mr. Shelby) 
to the bill H.R. 3221, moving the United States toward greater energy 
independence and security, developing innovative new technologies, 
reducing carbon emissions, creating green jobs, protecting consumers, 
increasing clean renewable energy production, and modernizing our 
energy infrastructure, and to amend the Internal Revenue Code of 1986 
to provide tax incentives for the production of renewable energy and 
energy conservation; which was ordered to lie on the table; as follows:

       Beginning on page 63, strike line 20 and all that follows 
     through line 7 on page 64 and insert the following:
       ``(ii) Taxable years ending during 2008 and 2009.--An 
     eligible taxpayer (within the meaning of section 168(k)(4)) 
     may elect to apply this paragraph to any net operating loss 
     for any taxable year ending during 2008 or 2009--

       ``(I) by substituting `4' for `2' in subparagraph (A)(i),
       ``(II) by substituting `3' for `2' in subparagraph (E)(ii), 
     and
       ``(III) without regard to subparagraph (F).''.

                                 ______
                                 
  SA 4492. Mr. REID (for Mrs. Clinton) submitted an amendment intended 
to be proposed by Mr. Reid to the bill H.R. 3221, moving the United 
States toward greater energy independence and security, developing 
innovative new technologies, reducing carbon emissions, creating green 
jobs, protecting consumers, increasing clean renewable energy 
production, and modernizing our energy infrastructure, and to amend the 
Internal Revenue Code of 1986 to provide tax incentives for the 
production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       At the end, add the following:

         TITLE VIII--MORTGAGE ENHANCEMENT AND MODIFICATION ACT

     SEC. 801. SHORT TITLE.

       This title may be cited as the ``Mortgage Enhancement and 
     Modification Act of 2008''.

     SEC. 802. SAFE HARBOR FOR QUALIFIED LOAN MODIFICATIONS OR 
                   WORKOUT PLANS FOR CERTAIN RESIDENTIAL MORTGAGE 
                   LOANS.

       (a) Standard for Loan Modifications or Workout Plans.--
     Absent specific contractual provisions to the contrary--
       (1) the duty to maximize or not negatively affect, the 
     recovery of total proceeds from pooled residential mortgage 
     loans is owed by a servicer of such pooled loans to the 
     securitization vehicle for the benefit of all investors and 
     holders of beneficial interests in the pooled loans, in the 
     aggregate, and not to any individual party or group of 
     parties;
       (2) a servicer of pooled residential mortgage loans shall 
     be deemed to be acting on behalf of the securitization 
     vehicle in the best interest of all investors and holders of 
     beneficial interests in the pooled loans, in the aggregate 
     if--
       (A) for a loan that is in payment default under the loan 
     agreement or for which payment default is imminent or 
     reasonably foreseeable, the loan servicer makes reasonable 
     and documented efforts, which shall be made available to the 
     investors and holders of beneficial interests in the pooled 
     loans upon request, to implement a modification or workout 
     plan; or
       (B) the efforts under subparagraph (A) are unsuccessful or 
     such plan would be infeasible, engages in other loss 
     mitigation, including accepting a short payment or partial 
     discharge of principal, or agreeing to a short sale of the 
     property, to the extent that the servicer reasonably believes 
     the modification or workout plan or other mitigation actions 
     will maximize the net present value to be realized on the 
     loans over that which would be realized through foreclosure 
     under the present terms of the contract; and
       (3) a servicer shall be deemed to be acting on behalf of 
     the securitization vehicle in the

[[Page 5304]]

     best interest of all investors and holders of beneficial 
     interests in the pooled loans, in the aggregate, if the 
     servicer makes efforts--
       (A) to proactively contact borrowers that are reasonably 
     considered to be approaching a calendar date in which a 
     predetermined or contractually established rate of interest 
     on the principal of the loan shall--
       (i) increase or fluctuate in accordance with a designated 
     market indicator or indicators; or
       (ii) increase or fluctuate within a predetermined range; 
     and
       (B) to determine--
       (i) the ability of the borrower to make payments following 
     a reset of interest rates using common and appropriate metric 
     standards such as debt to income ratios;
       (ii) whether the borrower is in danger of default or 
     disclosure; and
       (iii) whether a loan modification or other mitigation 
     effort is appropriate.
       (b) Safe Harbor.--Absent specific contractual provisions to 
     the contrary, a servicer of a residential mortgage loan that 
     acts in a manner consistent with the provisions set forth in 
     subsection (a), shall not be liable for entering into a 
     qualified loan modification, or other loss mitigation effort 
     described in subsection (a) to--
       (1) any person, based on that person's ownership of a 
     residential mortgage loan or any interest in a pool of 
     residential mortgage loans or in securities that distribute 
     payments out of the principal, interest, and other payments 
     in loans on the pool;
       (2) any person who is obligated to make payments determined 
     in reference to any loan or any interest referred to in 
     paragraph (1);
       (3) any person that insures any loan or any interest 
     referred to in paragraph (1) under any law or regulation of 
     the United States or any law or regulation of any State or 
     political subdivision of any State; or
       (4) any other person or institution that may have a 
     financial or commercial relationship and association with the 
     persons associated in paragraphs (1) through (3).
       (c) Rule of Construction.--No provision of this section 
     shall be construed as limiting the ability of a servicer to 
     enter into loan modifications or workout plans other than 
     qualified loan modification or workout plans.
       (d) Definitions.--As used in this section, the following 
     definitions shall apply:
       (1) Qualified loan modification or workout plan.--The term 
     ``qualified loan modification or workout plan'' means a 
     modification or plan that--
       (A) is scheduled to remain in place until the borrower 
     sells or refinances the property, or for at least 5 years 
     from the date of adoption of the plan, whichever is sooner;
       (B) does not provide for a repayment schedule that results 
     in negative amortization at any time;
       (C) does not require the borrower to pay additional points 
     and fees;
       (D) materially improves the ability of the borrower to--
       (i) prevent foreclosure; and
       (ii) resume a reasonable repayment schedule based on, but 
     not limited to, debt to income ratio; and
       (E) would reasonably reduce the likelihood of default of 
     foreclosure during the life of the modification or plan;
       (F) may waive any prepayment penalties that reasonably 
     inhibited a loan holder from fulfilling his ability to pay 
     down the principal or maintain regular payments as defined by 
     the terms of the loan; and
       (G) includes full and accurate disclosure to the borrower 
     of the terms of the modification or workout plan, provided 
     that such disclosures are executed in easy to understand 
     terms that demonstrate how the borrower will benefit from the 
     new terms in such modification or workout plan as compared 
     with the terms and conditions of the previous loan of the 
     borrower.
       (2) Residential mortgage loan.--The term ``residential 
     mortgage loan'' means a loan that is secured by a lien on an 
     owner-occupied residential dwelling.
       (3) Securitization vehicle.--The term ``securitization 
     vehicle'' means a trust, corporation, partnership, limited 
     liability entity, special purpose entity, or other structure 
     that--
       (A) is the issuer, or is created by the issuer, of mortgage 
     pass-through certificates, participation certificates, 
     mortgage-backed securities, or other similar securities 
     backed by a pool of assets that includes residential mortgage 
     loans; and
       (B) holds such loans.
       (e) Limitations on Safe Harbor.--Except for the provisions 
     of section 2 that limit liability for efforts to pursue 
     qualified loan modifications or workout plans, the provisions 
     of this section shall not be construed to affect or limit any 
     other liability, duty, or other fiduciary obligation of the 
     servicer to the investors and holders of beneficial interests 
     in the pooled loans to a securitization vehicle, as 
     prescribed by any other specific contractual provision agreed 
     upon, or any other liability, duty, or other fiduciary 
     obligation set forth under any--
       (1) law or regulation of the United States;
       (2) law or regulation of any State or political subdivision 
     of any State; or
       (3) established and approved standards for best practices 
     of any industry or trade group.
       (f) Effective Period.--This section shall apply only with 
     respect to qualified loan modification or workout plans 
     initiated prior to January 1, 2012.
                                 ______
                                 
  SA 4493. Mr. BUNNING (for himself and Ms. Stabenow) submitted an 
amendment intended to be proposed to amendment SA 4387 submitted by Mr. 
Dodd (for himself and Mr. Shelby) to the bill H.R. 3221, moving the 
United States toward greater energy independence and security, 
developing innovative new technologies, reducing carbon emissions, 
creating green jobs, protecting consumers, increasing clean renewable 
energy production, and modernizing our energy infrastructure, and to 
amend the Internal Revenue Code of 1986 to provide tax incentives for 
the production of renewable energy and energy conservation; which was 
ordered to lie on the table; as follows:

       On page 82, between lines 7 and 8, insert the following:

                    TITLE VII--CURRENCY MANIPULATION

     SEC. __01. SHORT TITLE.

       This title may be cited as the ``China Currency 
     Manipulation Act of 2008''.

     SEC. __02. FINDINGS.

       Congress makes the following findings:
       (1) The People's Republic of China has a material global 
     current account surplus.
       (2) The People's Republic of China has, since the beginning 
     of 2000, accumulated a current account surplus with the 
     United States of nearly $1,200,000,000,000, more than twice 
     the size of the cumulative current account surplus of any 
     other United States trading partner during the same period.
       (3) The People's Republic of China has engaged in 
     protracted large-scale intervention in currency markets, 
     thereby subsidizing Chinese-made products and erecting a 
     formidable nontariff barrier to trade for United States 
     exports to the People's Republic of China, in contravention 
     of the spirit and intent of the General Agreement on Tariffs 
     and Trade and the Articles of Agreement of the International 
     Monetary Fund.

     SEC. __03. ACTION TO ACHIEVE FAIR CURRENCY.

       (a) Determination.--Notwithstanding any other provision of 
     law, the Secretary of the Treasury shall--
       (1) make an affirmative determination that the People's 
     Republic of China is manipulating the rate of exchange 
     between its currency and the United States dollar within the 
     meaning of section 3004(b) of the Exchange Rates and 
     International Economic Policies Coordination Act of 1988 (22 
     U.S.C. 5304(b)); and
       (2) take the action described in subsections (b), (c), and 
     (d) of this section.
       (b) Action.--
       (1) In general.--The Secretary of the Treasury shall, not 
     later than 30 days after the date of the enactment of this 
     Act, establish a plan of action to remedy currency 
     manipulation by the People's Republic of China, and submit a 
     report regarding that plan, to the Committee on Banking, 
     Housing, and Urban Affairs and the Committee on Finance of 
     the Senate and the Committee on Financial Services and the 
     Committee on Ways and Means of the House of Representatives.
       (2) Benchmarks.--The report described in paragraph (1) 
     shall include specific benchmarks and timeframes for 
     correcting the currency manipulation.
       (c) Initial Negotiations.--The Secretary shall initiate, on 
     an expedited basis, bilateral negotiations with the People's 
     Republic of China for the purpose of ensuring that the 
     country regularly and promptly adjusts the rate of exchange 
     between its currency and the United States dollar to permit 
     effective balance of payment adjustments and to eliminate the 
     unfair competitive advantage.
       (d) Coordination With the International Monetary Fund.--The 
     Secretary of the Treasury shall, not later than 30 days after 
     the date of the enactment of this Act, instruct the Executive 
     Director to the International Monetary Fund to use the voice 
     and vote of the United States, including requesting 
     consultations under Article IV of the Articles of Agreement 
     of the International Monetary Fund, for the purpose of 
     ensuring the People's Republic of China regularly and 
     promptly adjusts the rate of exchange between its currency 
     and the United States dollar to permit effective balance of 
     payments adjustments and to eliminate the unfair competitive 
     advantage in trade.

                          ____________________