H10712 CONGRESSIONAL RECORD — HOUSE October 3, 2008 

(B) REPORT.—Not later than 7 months after 

the date of the enactment of this Act, the 

United States International Trade Commission shall submit to the appropriate congressional committees and the Comptroller General a report on the results of the review carried out under subparagraph (A). 

(2) GAO REPORT.—Not later than 90 days 

after the submission of the report under 

paragraph (1)(B), the Comptroller General 

shall submit to the appropriate congressional committees a report that, based on 

the results of the report submitted under 

paragraph (1)(B) and other available information, contains recommendations for 

changes to United States trade preference 

programs, including the African Growth and 

Opportunity Act (19 U.S.C. 3701 et seq.) and 

the amendments made by that Act, to provide incentives to increase investment and 

other measures necessary to improve the 

competitiveness of beneficiary sub-Saharan 

African countries in the production of yarns, 

fabrics, and other textile and apparel inputs 

identified in the report submitted under 

paragraph (1)(B), including changes to requirements relating to rules of origin under 

such programs. 

(3) DEFINITIONS.—In this subsection— 

(A) the term ‘‘appropriate congressional 

committees’’ means the Committee on Ways 

and Means of the House of Representatives 

and the Committee on Finance of the Senate; and 

(B) the term ‘‘beneficiary sub-Saharan African countries’’ has the meaning given the 

term in section 506A(c) of the Trade Act of 

1974 (19 U.S.C. 2466a(c)). 

(d) CLERICAL AMENDMENT.—Section 

6002(a)(2)(B) of Public Law 109–432 is amended 

by striking ‘‘(B) by striking’’ and inserting 

‘‘(B) in paragraph (3), by striking’’. 

SEC. 4. GENERALIZED SYSTEM OF PREFERENCES. 

Section 505 of the Trade Act of 1974 (19 

U.S.C. 2465) is amended by striking ‘‘December 31, 2008’’ and inserting ‘‘December 31, 

2009’’. 

SEC. 5. CUSTOMS USER FEES. 

(a) IN GENERAL.—Section 13031(j)(3) of the 

Consolidated Omnibus Budget Reconciliation 

Act of 1985 (19 U.S.C. 58c(j)(3)) is amended— 

(1) in subparagraph (A), by striking ‘‘November 14, 2017’’ and inserting ‘‘February 14, 

2018’’; and 

(2) in subparagraph (B)(i), by striking ‘‘October 7, 2017’’ and inserting ‘‘January 31, 

2018’’. 

(b) REPEAL.—Section 15201 of the Food, 

Conservation, and Energy Act of 2008 (Public 

Law 110–246) is amended by striking subsections (c) and (d). 

SEC. 6. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES. 

The percentage under subparagraph (C) of 

section 401(1) of the Tax Increase Prevention 

and Reconciliation Act of 2005 in effect on 

the date of the enactment of this Act is increased by 2 percentage points. 

SEC. 7. TECHNICAL CORRECTIONS. 

Section 15402 of the Food, Conservation, 

and Energy Act of 2008 (Public Law 110–246) 

is amended— 

(1) in subsections (a) and (b), by striking 

‘‘Carribean’’ each place it appears and inserting ‘‘Caribbean’’; and 

(2) in subsection (d), by striking ‘‘231A(b)’’ 

and inserting ‘‘213A(b)’’. 

Mr. LEVIN (during the reading). 

Madam Speaker, I ask unanimous consent that the reading be dispensed 

with. 

The SPEAKER pro tempore. Is there 

objection to the request of the gentleman from Michigan? 

There was no objection. 

The SPEAKER pro tempore. Is there 

objection to the original request of the 

gentleman from Michigan? 

There was no objection. 

A motion to reconsider was laid on 

the table. 

f 

GENERAL LEAVE 

Mr. LEVIN. Madam Speaker, I ask 

unanimous consent that all Members 

may have 5 legislative days to revise 

and extend their remarks and include 

extraneous material on the bill just 

passed by the House. 

The SPEAKER pro tempore. Is there 

objection to the request of the gentleman from Michigan? 

There was no objection. 

f 

EMERGENCY ECONOMIC 

STABILIZATION ACT OF 2008 

Mr. FRANK of Massachusetts. 

Madam Speaker, pursuant to House 

Resolution 1525, I call up from the 

Speaker’s table the bill (H.R. 1424) to 

amend section 712 of the Employee Retirement Income Security Act of 1974, 

section 2705 of the Public Health Service Act, and section 9812 of the Internal 

Revenue Code of 1986 to require equity 

in the provision of mental health and 

substance-related disorder benefits 

under group health plans, and offer the 

motion at the desk. 

The SPEAKER pro tempore. The 

Clerk will report the title of the bill, 

designate the Senate amendments, and 

designate the motion. 

The Clerk read the title of the bill. 

The text of the Senate amendments 

is as follows: 

Strike all after the enacting clause and insert the following: 

DIVISION A—EMERGENCY ECONOMIC 

STABILIZATION 

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

(a) SHORT TITLE.—This division may be cited 

as the ‘‘Emergency Economic Stabilization Act 

of 2008’’. 

(b) TABLE OF CONTENTS.—The table of contents for this division is as follows: 

Sec. 1. Short title and table of contents. 

Sec. 2. Purposes. 

Sec. 3. Definitions. 

TITLE I—TROUBLED ASSETS RELIEF 

PROGRAM 

Sec. 101. Purchases of troubled assets. 

Sec. 102. Insurance of troubled assets. 

Sec. 103. Considerations. 

Sec. 104. Financial Stability Oversight Board. 

Sec. 105. Reports. 

Sec. 106. Rights; management; sale of troubled 

assets; revenues and sale proceeds. 

Sec. 107. Contracting procedures. 

Sec. 108. Conflicts of interest. 

Sec. 109. Foreclosure mitigation efforts. 

Sec. 110. Assistance to homeowners. 

Sec. 111. Executive compensation and corporate 

governance. 

Sec. 112. Coordination with foreign authorities 

and central banks. 

Sec. 113. Minimization of long-term costs and 

maximization of benefits for taxpayers. 

Sec. 114. Market transparency. 

Sec. 115. Graduated authorization to purchase. 

Sec. 116. Oversight and audits. 

Sec. 117. Study and report on margin authority. 

Sec. 118. Funding. 

Sec. 119. Judicial review and related matters. 

Sec. 120. Termination of authority. 

Sec. 121. Special Inspector General for the 

Troubled Asset Relief Program. 

Sec. 122. Increase in statutory limit on the public debt. 

Sec. 123. Credit reform. 

Sec. 124. HOPE for Homeowners amendments. 

Sec. 125. Congressional Oversight Panel. 

Sec. 126. FDIC authority. 

Sec. 127. Cooperation with the FBI. 

Sec. 128. Acceleration of effective date. 

Sec. 129. Disclosures on exercise of loan authority. 

Sec. 130. Technical corrections. 

Sec. 131. Exchange Stabilization Fund reimbursement. 

Sec. 132. Authority to suspend mark-to-market 

accounting. 

Sec. 133. Study on mark-to-market accounting. 

Sec. 134. Recoupment. 

Sec. 135. Preservation of authority. 

Sec. 136. Temporary increase in deposit and 

share insurance coverage. 

TITLE II—BUDGET-RELATED PROVISIONS 

Sec. 201. Information for congressional support 

agencies. 

Sec. 202. Reports by the Office of Management 

and Budget and the Congressional Budget Office. 

Sec. 203. Analysis in President’s Budget. 

Sec. 204. Emergency treatment. 

TITLE III—TAX PROVISIONS 

Sec. 301. Gain or loss from sale or exchange of 

certain preferred stock. 

Sec. 302. Special rules for tax treatment of executive compensation of employers 

participating in the troubled assets relief program. 

Sec. 303. Extension of exclusion of income from 

discharge of qualified principal 

residence indebtedness. 

SEC. 2. PURPOSES. 

The purposes of this Act are— 

(1) to immediately provide authority and facilities that the Secretary of the Treasury can 

use to restore liquidity and stability to the financial system of the United States; and 

(2) to ensure that such authority and such facilities are used in a manner that— 

(A) protects home values, college funds, retirement accounts, and life savings; 

(B) preserves homeownership and promotes 

jobs and economic growth; 

(C) maximizes overall returns to the taxpayers 

of the United States; and 

(D) provides public accountability for the exercise of such authority. 

SEC. 3. DEFINITIONS. 

For purposes of this Act, the following definitions shall apply: 

(1) APPROPRIATE COMMITTEES OF CONGRESS.— 

The term ‘‘appropriate committees of Congress’’ 

means— 

(A) the Committee on Banking, Housing, and 

Urban Affairs, the Committee on Finance, the 

Committee on the Budget, and the Committee on 

Appropriations of the Senate; and 

(B) the Committee on Financial Services, the 

Committee on Ways and Means, the Committee 

on the Budget, and the Committee on Appropriations of the House of Representatives. 

(2) BOARD.—The term ‘‘Board’’ means the 

Board of Governors of the Federal Reserve System. 

(3) CONGRESSIONAL SUPPORT AGENCIES.—The 

term ‘‘congressional support agencies’’ means 

the Congressional Budget Office and the Joint 

Committee on Taxation. 

(4) CORPORATION.—The term ‘‘Corporation’’ 

means the Federal Deposit Insurance Corporation. 

(5) FINANCIAL INSTITUTION.—The term ‘‘financial institution’’ means any institution, including, but not limited to, any bank, savings association, credit union, security broker or dealer, 


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October 3, 2008 CONGRESSIONAL RECORD — HOUSE H10713 

or insurance company, established and regulated under the laws of the United States or any 

State, territory, or possession of the United 

States, the District of Columbia, Commonwealth 

of Puerto Rico, Commonwealth of Northern 

Mariana Islands, Guam, American Samoa, or 

the United States Virgin Islands, and having 

significant operations in the United States, but 

excluding any central bank of, or institution 

owned by, a foreign government. 

(6) FUND.—The term ‘‘Fund’’ means the Troubled Assets Insurance Financing Fund established under section 102. 

(7) SECRETARY.—The term ‘‘Secretary’’ means 

the Secretary of the Treasury. 

(8) TARP.—The term ‘‘TARP’’ means the 

Troubled Asset Relief Program established under 

section 101. 

(9) TROUBLED ASSETS.—The term ‘‘troubled assets’’ means— 

(A) residential or commercial mortgages and 

any securities, obligations, or other instruments 

that are based on or related to such mortgages, 

that in each case was originated or issued on or 

before March 14, 2008, the purchase of which 

the Secretary determines promotes financial 

market stability; and 

(B) any other financial instrument that the 

Secretary, after consultation with the Chairman 

of the Board of Governors of the Federal Reserve System, determines the purchase of which 

is necessary to promote financial market stability, but only upon transmittal of such determination, in writing, to the appropriate committees of Congress. 

TITLE I—TROUBLED ASSETS RELIEF 

PROGRAM 

SEC. 101. PURCHASES OF TROUBLED ASSETS. 

(a) OFFICES; AUTHORITY.— 

(1) AUTHORITY.—The Secretary is authorized 

to establish the Troubled Asset Relief Program 

(or ‘‘TARP’’) to purchase, and to make and 

fund commitments to purchase, troubled assets 

from any financial institution, on such terms 

and conditions as are determined by the Secretary, and in accordance with this Act and the 

policies and procedures developed and published 

by the Secretary. 

(2) COMMENCEMENT OF PROGRAM.—Establishment of the policies and procedures and other 

similar administrative requirements imposed on 

the Secretary by this Act are not intended to 

delay the commencement of the TARP. 

(3) ESTABLISHMENT OF TREASURY OFFICE.— 

(A) IN GENERAL.—The Secretary shall implement any program under paragraph (1) through 

an Office of Financial Stability, established for 

such purpose within the Office of Domestic Finance of the Department of the Treasury, which 

office shall be headed by an Assistant Secretary 

of the Treasury, appointed by the President, by 

and with the advice and consent of the Senate, 

except that an interim Assistant Secretary may 

be appointed by the Secretary. 

(B) CLERICAL AMENDMENTS.— 

(i) TITLE 5.—Section 5315 of title 5, United 

States Code, is amended in the item relating to 

Assistant Secretaries of the Treasury, by striking ‘‘(9)’’ and inserting ‘‘(10)’’. 

(ii) TITLE 31.—Section 301(e) of title 31, United 

States Code, is amended by striking ‘‘9’’ and inserting ‘‘10’’. 

(b) CONSULTATION.—In exercising the authority under this section, the Secretary shall consult with the Board, the Corporation, the Comptroller of the Currency, the Director of the Office of Thrift Supervision, the Chairman of the 

National Credit Union Administration Board, 

and the Secretary of Housing and Urban Development. 

(c) NECESSARY ACTIONS.—The Secretary is authorized to take such actions as the Secretary 

deems necessary to carry out the authorities in 

this Act, including, without limitation, the following: 

(1) The Secretary shall have direct hiring authority with respect to the appointment of employees to administer this Act. 

(2) Entering into contracts, including contracts for services authorized by section 3109 of 

title 5, United States Code. 

(3) Designating financial institutions as financial agents of the Federal Government, and 

such institutions shall perform all such reasonable duties related to this Act as financial 

agents of the Federal Government as may be required. 

(4) In order to provide the Secretary with the 

flexibility to manage troubled assets in a manner designed to minimize cost to the taxpayers, 

establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase, hold, and sell troubled assets and issue 

obligations. 

(5) Issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities or purposes of this Act. 

(d) PROGRAM GUIDELINES.—Before the earlier 

of the end of the 2-business-day period beginning on the date of the first purchase of troubled assets pursuant to the authority under this 

section or the end of the 45-day period beginning on the date of enactment of this Act, the 

Secretary shall publish program guidelines, including the following: 

(1) Mechanisms for purchasing troubled assets. 

(2) Methods for pricing and valuing troubled 

assets. 

(3) Procedures for selecting asset managers. 

(4) Criteria for identifying troubled assets for 

purchase. 

(e) PREVENTING UNJUST ENRICHMENT.—In 

making purchases under the authority of this 

Act, the Secretary shall take such steps as may 

be necessary to prevent unjust enrichment of financial institutions participating in a program 

established under this section, including by preventing the sale of a troubled asset to the Secretary at a higher price than what the seller 

paid to purchase the asset. This subsection does 

not apply to troubled assets acquired in a merger or acquisition, or a purchase of assets from a 

financial institution in conservatorship or receivership, or that has initiated bankruptcy proceedings under title 11, United States Code. 

SEC. 102. INSURANCE OF TROUBLED ASSETS. 

(a) AUTHORITY.— 

(1) IN GENERAL.—If the Secretary establishes 

the program authorized under section 101, then 

the Secretary shall establish a program to guarantee troubled assets originated or issued prior 

to March 14, 2008, including mortgage-backed 

securities. 

(2) GUARANTEES.—In establishing any program under this subsection, the Secretary may 

develop guarantees of troubled assets and the 

associated premiums for such guarantees. Such 

guarantees and premiums may be determined by 

category or class of the troubled assets to be 

guaranteed. 

(3) EXTENT OF GUARANTEE.—Upon request of a 

financial institution, the Secretary may guarantee the timely payment of principal of, and 

interest on, troubled assets in amounts not to 

exceed 100 percent of such payments. Such guarantee may be on such terms and conditions as 

are determined by the Secretary, provided that 

such terms and conditions are consistent with 

the purposes of this Act. 

(b) REPORTS.—Not later than 90 days after the 

date of enactment of this Act, the Secretary 

shall report to the appropriate committees of 

Congress on the program established under subsection (a). 

(c) PREMIUMS.— 

(1) IN GENERAL.—The Secretary shall collect 

premiums from any financial institution participating in the program established under subsection (a). Such premiums shall be in an 

amount that the Secretary determines necessary 

to meet the purposes of this Act and to provide 

sufficient reserves pursuant to paragraph (3). 

(2) AUTHORITY TO BASE PREMIUMS ON PRODUCT

RISK.—In establishing any premium under paragraph (1), the Secretary may provide for variations in such rates according to the credit risk 

associated with the particular troubled asset 

that is being guaranteed. The Secretary shall 

publish the methodology for setting the premium 

for a class of troubled assets together with an 

explanation of the appropriateness of the class 

of assets for participation in the program established under this section. The methodology shall 

ensure that the premium is consistent with 

paragraph (3). 

(3) MINIMUM LEVEL.—The premiums referred 

to in paragraph (1) shall be set by the Secretary 

at a level necessary to create reserves sufficient 

to meet anticipated claims, based on an actuarial analysis, and to ensure that taxpayers are 

fully protected. 

(4) ADJUSTMENT TO PURCHASE AUTHORITY.— 

The purchase authority limit in section 115 shall 

be reduced by an amount equal to the difference 

between the total of the outstanding guaranteed 

obligations and the balance in the Troubled Assets Insurance Financing Fund. 

(d) TROUBLED ASSETS INSURANCE FINANCING

FUND.— 

(1) DEPOSITS.—The Secretary shall deposit 

fees collected under this section into the Fund 

established under paragraph (2). 

(2) ESTABLISHMENT.—There is established a 

Troubled Assets Insurance Financing Fund that 

shall consist of the amounts collected pursuant 

to paragraph (1), and any balance in such fund 

shall be invested by the Secretary in United 

States Treasury securities, or kept in cash on 

hand or on deposit, as necessary. 

(3) PAYMENTS FROM FUND.—The Secretary 

shall make payments from amounts deposited in 

the Fund to fulfill obligations of the guarantees 

provided to financial institutions under subsection (a). 

SEC. 103. CONSIDERATIONS. 

In exercising the authorities granted in this 

Act, the Secretary shall take into consideration— 

(1) protecting the interests of taxpayers by 

maximizing overall returns and minimizing the 

impact on the national debt; 

(2) providing stability and preventing disruption to financial markets in order to limit the 

impact on the economy and protect American 

jobs, savings, and retirement security; 

(3) the need to help families keep their homes 

and to stabilize communities; 

(4) in determining whether to engage in a direct purchase from an individual financial institution, the long-term viability of the financial 

institution in determining whether the purchase 

represents the most efficient use of funds under 

this Act; 

(5) ensuring that all financial institutions are 

eligible to participate in the program, without 

discrimination based on size, geography, form of 

organization, or the size, type, and number of 

assets eligible for purchase under this Act; 

(6) providing financial assistance to financial 

institutions, including those serving low- and 

moderate-income populations and other underserved communities, and that have assets less 

than $1,000,000,000, that were well or adequately 

capitalized as of June 30, 2008, and that as a result of the devaluation of the preferred government-sponsored enterprises stock will drop one 

or more capital levels, in a manner sufficient to 

restore the financial institutions to at least an 

adequately capitalized level; 

(7) the need to ensure stability for United 

States public instrumentalities, such as counties 

and cities, that may have suffered significant 

increased costs or losses in the current market 

turmoil; 

(8) protecting the retirement security of Americans by purchasing troubled assets held by or 

on behalf of an eligible retirement plan described in clause (iii), (iv), (v), or (vi) of section 

402(c)(8)(B) of the Internal Revenue Code of 

1986, except that such authority shall not extend to any compensation arrangements subject 

to section 409A of such Code; and 


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H10714 CONGRESSIONAL RECORD — HOUSE October 3, 2008 

(9) the utility of purchasing other real estate 

owned and instruments backed by mortgages on 

multifamily properties. 

SEC. 104. FINANCIAL STABILITY OVERSIGHT 

BOARD. 

(a) ESTABLISHMENT.—There is established the 

Financial Stability Oversight Board, which 

shall be responsible for— 

(1) reviewing the exercise of authority under a 

program developed in accordance with this Act, 

including— 

(A) policies implemented by the Secretary and 

the Office of Financial Stability created under 

sections 101 and 102, including the appointment 

of financial agents, the designation of asset 

classes to be purchased, and plans for the structure of vehicles used to purchase troubled assets; and 

(B) the effect of such actions in assisting 

American families in preserving home ownership, stabilizing financial markets, and protecting taxpayers; 

(2) making recommendations, as appropriate, 

to the Secretary regarding use of the authority 

under this Act; and 

(3) reporting any suspected fraud, misrepresentation, or malfeasance to the Special Inspector General for the Troubled Assets Relief Program or the Attorney General of the United 

States, consistent with section 535(b) of title 28, 

United States Code. 

(b) MEMBERSHIP.—The Financial Stability 

Oversight Board shall be comprised of— 

(1) the Chairman of the Board of Governors of 

the Federal Reserve System; 

(2) the Secretary; 

(3) the Director of the Federal Housing Finance Agency; 

(4) the Chairman of the Securities Exchange 

Commission; and 

(5) the Secretary of Housing and Urban Development. 

(c) CHAIRPERSON.—The chairperson of the Financial Stability Oversight Board shall be elected by the members of the Board from among the 

members other than the Secretary. 

(d) MEETINGS.—The Financial Stability Oversight Board shall meet 2 weeks after the first exercise of the purchase authority of the Secretary 

under this Act, and monthly thereafter. 

(e) ADDITIONAL AUTHORITIES.—In addition to 

the responsibilities described in subsection (a), 

the Financial Stability Oversight Board shall 

have the authority to ensure that the policies 

implemented by the Secretary are— 

(1) in accordance with the purposes of this 

Act; 

(2) in the economic interests of the United 

States; and 

(3) consistent with protecting taxpayers, in 

accordance with section 113(a). 

(f) CREDIT REVIEW COMMITTEE.—The Financial Stability Oversight Board may appoint a 

credit review committee for the purpose of evaluating the exercise of the purchase authority provided under this Act and the assets acquired 

through the exercise of such authority, as the 

Financial Stability Oversight Board determines 

appropriate. 

(g) REPORTS.—The Financial Stability Oversight Board shall report to the appropriate committees of Congress and the Congressional Oversight Panel established under section 125, not 

less frequently than quarterly, on the matters 

described under subsection (a)(1). 

(h) TERMINATION.—The Financial Stability 

Oversight Board, and its authority under this 

section, shall terminate on the expiration of the 

15-day period beginning upon the later of— 

(1) the date that the last troubled asset acquired by the Secretary under section 101 has 

been sold or transferred out of the ownership or 

control of the Federal Government; or 

(2) the date of expiration of the last insurance 

contract issued under section 102. 

SEC. 105. REPORTS. 

(a) IN GENERAL.—Before the expiration of the 

60-day period beginning on the date of the first 

exercise of the authority granted in section 

101(a), or of the first exercise of the authority 

granted in section 102, whichever occurs first, 

and every 30-day period thereafter, the Secretary shall report to the appropriate committees 

of Congress, with respect to each such period— 

(1) an overview of actions taken by the Secretary, including the considerations required by 

section 103 and the efforts under section 109; 

(2) the actual obligation and expenditure of 

the funds provided for administrative expenses 

by section 118 during such period and the expected expenditure of such funds in the subsequent period; and 

(3) a detailed financial statement with respect 

to the exercise of authority under this Act, including— 

(A) all agreements made or renewed; 

(B) all insurance contracts entered into pursuant to section 102; 

(C) all transactions occurring during such period, including the types of parties involved; 

(D) the nature of the assets purchased; 

(E) all projected costs and liabilities; 

(F) operating expenses, including compensation for financial agents; 

(G) the valuation or pricing method used for 

each transaction; and 

(H) a description of the vehicles established to 

exercise such authority. 

(b) TRANCHE REPORTS TO CONGRESS.— 

(1) REPORTS.—The Secretary shall provide to 

the appropriate committees of Congress, at the 

times specified in paragraph (2), a written report, including— 

(A) a description of all of the transactions 

made during the reporting period; 

(B) a description of the pricing mechanism for 

the transactions; 

(C) a justification of the price paid for and 

other financial terms associated with the transactions; 

(D) a description of the impact of the exercise 

of such authority on the financial system, supported, to the extent possible, by specific data; 

(E) a description of challenges that remain in 

the financial system, including any benchmarks 

yet to be achieved; and 

(F) an estimate of additional actions under 

the authority provided under this Act that may 

be necessary to address such challenges. 

(2) TIMING.—The report required by this subsection shall be submitted not later than 7 days 

after the date on which commitments to purchase troubled assets under the authorities provided in this Act first reach an aggregate of 

$50,000,000,000 and not later than 7 days after 

each $50,000,000,000 interval of such commitments is reached thereafter. 

(c) REGULATORY MODERNIZATION REPORT.— 

The Secretary shall review the current state of 

the financial markets and the regulatory system 

and submit a written report to the appropriate 

committees of Congress not later than April 30, 

2009, analyzing the current state of the regulatory system and its effectiveness at overseeing 

the participants in the financial markets, including the over-the-counter swaps market and 

government-sponsored enterprises, and providing recommendations for improvement, including— 

(1) recommendations regarding— 

(A) whether any participants in the financial 

markets that are currently outside the regulatory system should become subject to the regulatory system; and 

(B) enhancement of the clearing and settlement of over-the-counter swaps; and 

(2) the rationale underlying such recommendations. 

(d) SHARING OF INFORMATION.—Any report required under this section shall also be submitted 

to the Congressional Oversight Panel established under section 125. 

(e) SUNSET.—The reporting requirements 

under this section shall terminate on the later 

of— 

(1) the date that the last troubled asset acquired by the Secretary under section 101 has 

been sold or transferred out of the ownership or 

control of the Federal Government; or 

(2) the date of expiration of the last insurance 

contract issued under section 102. 

SEC. 106. RIGHTS; MANAGEMENT; SALE OF TROUBLED ASSETS; REVENUES AND SALE 

PROCEEDS. 

(a) EXERCISE OF RIGHTS.—The Secretary may, 

at any time, exercise any rights received in connection with troubled assets purchased under 

this Act. 

(b) MANAGEMENT OF TROUBLED ASSETS.—The 

Secretary shall have authority to manage troubled assets purchased under this Act, including 

revenues and portfolio risks therefrom. 

(c) SALE OF TROUBLED ASSETS.—The Secretary may, at any time, upon terms and conditions and at a price determined by the Secretary, sell, or enter into securities loans, repurchase transactions, or other financial transactions in regard to, any troubled asset purchased under this Act. 

(d) TRANSFER TO TREASURY.—Revenues of, 

and proceeds from the sale of troubled assets 

purchased under this Act, or from the sale, exercise, or surrender of warrants or senior debt instruments acquired under section 113 shall be 

paid into the general fund of the Treasury for 

reduction of the public debt. 

(e) APPLICATION OF SUNSET TO TROUBLED ASSETS.—The authority of the Secretary to hold 

any troubled asset purchased under this Act before the termination date in section 120, or to 

purchase or fund the purchase of a troubled 

asset under a commitment entered into before 

the termination date in section 120, is not subject to the provisions of section 120. 

SEC. 107. CONTRACTING PROCEDURES. 

(a) STREAMLINED PROCESS.—For purposes of 

this Act, the Secretary may waive specific provisions of the Federal Acquisition Regulation 

upon a determination that urgent and compelling circumstances make compliance with such 

provisions contrary to the public interest. Any 

such determination, and the justification for 

such determination, shall be submitted to the 

Committees on Oversight and Government Reform and Financial Services of the House of 

Representatives and the Committees on Homeland Security and Governmental Affairs and 

Banking, Housing, and Urban Affairs of the 

Senate within 7 days. 

(b) ADDITIONAL CONTRACTING REQUIREMENTS.—In any solicitation or contract where 

the Secretary has, pursuant to subsection (a), 

waived any provision of the Federal Acquisition 

Regulation pertaining to minority contracting, 

the Secretary shall develop and implement 

standards and procedures to ensure, to the maximum extent practicable, the inclusion and utilization of minorities (as such term is defined in 

section 1204(c) of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 

U.S.C. 1811 note)) and women, and minorityand women-owned businesses (as such terms are 

defined in section 21A(r)(4) of the Federal Home 

Loan Bank Act (12 U.S.C. 1441a(r)(4)), in that 

solicitation or contract, including contracts to 

asset managers, servicers, property managers, 

and other service providers or expert consultants. 

(c) ELIGIBILITY OF FDIC.—Notwithstanding 

subsections (a) and (b), the Corporation— 

(1) shall be eligible for, and shall be considered in, the selection of asset managers for residential mortgage loans and residential mortgage-backed securities; and 

(2) shall be reimbursed by the Secretary for 

any services provided. 

SEC. 108. CONFLICTS OF INTEREST. 

(a) STANDARDS REQUIRED.—The Secretary 

shall issue regulations or guidelines necessary to 

address and manage or to prohibit conflicts of 

interest that may arise in connection with the 

administration and execution of the authorities 

provided under this Act, including— 

(1) conflicts arising in the selection or hiring 

of contractors or advisors, including asset managers; 


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(2) the purchase of troubled assets; 

(3) the management of the troubled assets 

held; 

(4) post-employment restrictions on employees; 

and 

(5) any other potential conflict of interest, as 

the Secretary deems necessary or appropriate in 

the public interest. 

(b) TIMING.—Regulations or guidelines required by this section shall be issued as soon as 

practicable after the date of enactment of this 

Act. 

SEC. 109. FORECLOSURE MITIGATION EFFORTS. 

(a) RESIDENTIAL MORTGAGE LOAN SERVICING

STANDARDS.—To the extent that the Secretary 

acquires mortgages, mortgage backed securities, 

and other assets secured by residential real estate, including multifamily housing, the Secretary shall implement a plan that seeks to 

maximize assistance for homeowners and use the 

authority of the Secretary to encourage the 

servicers of the underlying mortgages, considering net present value to the taxpayer, to take 

advantage of the HOPE for Homeowners Program under section 257 of the National Housing 

Act or other available programs to minimize 

foreclosures. In addition, the Secretary may use 

loan guarantees and credit enhancements to facilitate loan modifications to prevent avoidable 

foreclosures. 

(b) COORDINATION.—The Secretary shall coordinate with the Corporation, the Board (with 

respect to any mortgage or mortgage-backed securities or pool of securities held, owned, or controlled by or on behalf of a Federal reserve 

bank, as provided in section 110(a)(1)(C)), the 

Federal Housing Finance Agency, the Secretary 

of Housing and Urban Development, and other 

Federal Government entities that hold troubled 

assets to attempt to identify opportunities for 

the acquisition of classes of troubled assets that 

will improve the ability of the Secretary to improve the loan modification and restructuring 

process and, where permissible, to permit bona 

fide tenants who are current on their rent to remain in their homes under the terms of the 

lease. In the case of a mortgage on a residential 

rental property, the plan required under this 

section shall include protecting Federal, State, 

and local rental subsidies and protections, and 

ensuring any modification takes into account 

the need for operating funds to maintain decent 

and safe conditions at the property. 

(c) CONSENT TO REASONABLE LOAN MODIFICATION REQUESTS.—Upon any request arising 

under existing investment contracts, the Secretary shall consent, where appropriate, and 

considering net present value to the taxpayer, to 

reasonable requests for loss mitigation measures, 

including term extensions, rate reductions, principal write downs, increases in the proportion of 

loans within a trust or other structure allowed 

to be modified, or removal of other limitation on 

modifications. 

SEC. 110. ASSISTANCE TO HOMEOWNERS. 

(a) DEFINITIONS.—As used in this section— 

(1) the term ‘‘Federal property manager’’ 

means— 

(A) the Federal Housing Finance Agency, in 

its capacity as conservator of the Federal National Mortgage Association and the Federal 

Home Loan Mortgage Corporation; 

(B) the Corporation, with respect to residential mortgage loans and mortgage-backed securities held by any bridge depository institution 

pursuant to section 11(n) of the Federal Deposit 

Insurance Act; and 

(C) the Board, with respect to any mortgage 

or mortgage-backed securities or pool of securities held, owned, or controlled by or on behalf of 

a Federal reserve bank, other than mortgages or 

securities held, owned, or controlled in connection with open market operations under section 

14 of the Federal Reserve Act (12 U.S.C. 353), or 

as collateral for an advance or discount that is 

not in default; 

(2) the term ‘‘consumer’’ has the same meaning as in section 103 of the Truth in Lending Act 

(15 U.S.C. 1602); 

(3) the term ‘‘insured depository institution’’ 

has the same meaning as in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813); and 

(4) the term ‘‘servicer’’ has the same meaning 

as in section 6(i)(2) of the Real Estate Settlement 

Procedures Act of 1974 (12 U.S.C. 2605(i)(2)). 

(b) HOMEOWNER ASSISTANCE BY AGENCIES.— 

(1) IN GENERAL.—To the extent that the Federal property manager holds, owns, or controls 

mortgages, mortgage backed securities, and 

other assets secured by residential real estate, 

including multifamily housing, the Federal 

property manager shall implement a plan that 

seeks to maximize assistance for homeowners 

and use its authority to encourage the servicers 

of the underlying mortgages, and considering 

net present value to the taxpayer, to take advantage of the HOPE for Homeowners Program 

under section 257 of the National Housing Act 

or other available programs to minimize foreclosures. 

(2) MODIFICATIONS.—In the case of a residential mortgage loan, modifications made under 

paragraph (1) may include— 

(A) reduction in interest rates; 

(B) reduction of loan principal; and 

(C) other similar modifications. 

(3) TENANT PROTECTIONS.—In the case of 

mortgages on residential rental properties, modifications made under paragraph (1) shall ensure— 

(A) the continuation of any existing Federal, 

State, and local rental subsidies and protections; and 

(B) that modifications take into account the 

need for operating funds to maintain decent and 

safe conditions at the property. 

(4) TIMING.—Each Federal property manager 

shall develop and begin implementation of the 

plan required by this subsection not later than 

60 days after the date of enactment of this Act. 

(5) REPORTS TO CONGRESS.—Each Federal 

property manager shall, 60 days after the date 

of enactment of this Act and every 30 days 

thereafter, report to Congress specific information on the number and types of loan modifications made and the number of actual foreclosures occurring during the reporting period 

in accordance with this section. 

(6) CONSULTATION.—In developing the plan required by this subsection, the Federal property 

managers shall consult with one another and, to 

the extent possible, utilize consistent approaches 

to implement the requirements of this subsection. 

(c) ACTIONS WITH RESPECT TO SERVICERS.—In 

any case in which a Federal property manager 

is not the owner of a residential mortgage loan, 

but holds an interest in obligations or pools of 

obligations secured by residential mortgage 

loans, the Federal property manager shall— 

(1) encourage implementation by the loan 

servicers of loan modifications developed under 

subsection (b); and 

(2) assist in facilitating any such modifications, to the extent possible. 

(d) LIMITATION.—The requirements of this section shall not supersede any other duty or requirement imposed on the Federal property 

managers under otherwise applicable law. 

SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE. 

(a) APPLICABILITY.—Any financial institution 

that sells troubled assets to the Secretary under 

this Act shall be subject to the executive compensation requirements of subsections (b) and 

(c) and the provisions under the Internal Revenue Code of 1986, as provided under the 

amendment by section 302, as applicable. 

(b) DIRECT PURCHASES.— 

(1) IN GENERAL.—Where the Secretary determines that the purposes of this Act are best met 

through direct purchases of troubled assets from 

an individual financial institution where no 

bidding process or market prices are available, 

and the Secretary receives a meaningful equity 

or debt position in the financial institution as a 

result of the transaction, the Secretary shall require that the financial institution meet appropriate standards for executive compensation and 

corporate governance. The standards required 

under this subsection shall be effective for the 

duration of the period that the Secretary holds 

an equity or debt position in the financial institution. 

(2) CRITERIA.—The standards required under 

this subsection shall include— 

(A) limits on compensation that exclude incentives for senior executive officers of a financial 

institution to take unnecessary and excessive 

risks that threaten the value of the financial institution during the period that the Secretary 

holds an equity or debt position in the financial 

institution; 

(B) a provision for the recovery by the financial institution of any bonus or incentive compensation paid to a senior executive officer 

based on statements of earnings, gains, or other 

criteria that are later proven to be materially inaccurate; and 

(C) a prohibition on the financial institution 

making any golden parachute payment to its 

senior executive officer during the period that 

the Secretary holds an equity or debt position in 

the financial institution. 

(3) DEFINITION.—For purposes of this section, 

the term ‘‘senior executive officer’’ means an individual who is one of the top 5 highly paid executives of a public company, whose compensation is required to be disclosed pursuant to the 

Securities Exchange Act of 1934, and any regulations issued thereunder, and non-public company counterparts. 

(c) AUCTION PURCHASES.—Where the Secretary 

determines that the purposes of this Act are best 

met through auction purchases of troubled assets, and only where such purchases per financial institution in the aggregate exceed 

$300,000,000 (including direct purchases), the 

Secretary shall prohibit, for such financial institution, any new employment contract with a 

senior executive officer that provides a golden 

parachute in the event of an involuntary termination, bankruptcy filing, insolvency, or receivership. The Secretary shall issue guidance to 

carry out this paragraph not later than 2 

months after the date of enactment of this Act, 

and such guidance shall be effective upon 

issuance. 

(d) SUNSET.—The provisions of subsection (c) 

shall apply only to arrangements entered into 

during the period during which the authorities 

under section 101(a) are in effect, as determined 

under section 120. 

SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES AND CENTRAL BANKS. 

The Secretary shall coordinate, as appropriate, with foreign financial authorities and 

central banks to work toward the establishment 

of similar programs by such authorities and central banks. To the extent that such foreign financial authorities or banks hold troubled assets as a result of extending financing to financial institutions that have failed or defaulted on 

such financing, such troubled assets qualify for 

purchase under section 101. 

SEC. 113. MINIMIZATION OF LONG-TERM COSTS 

AND MAXIMIZATION OF BENEFITS 

FOR TAXPAYERS. 

(a) LONG-TERM COSTS AND BENEFITS.— 

(1) MINIMIZING NEGATIVE IMPACT.—The Secretary shall use the authority under this Act in 

a manner that will minimize any potential longterm negative impact on the taxpayer, taking 

into account the direct outlays, potential longterm returns on assets purchased, and the overall economic benefits of the program, including 

economic benefits due to improvements in economic activity and the availability of credit, the 

impact on the savings and pensions of individuals, and reductions in losses to the Federal 

Government. 

(2) AUTHORITY.—In carrying out paragraph 

(1), the Secretary shall— 

(A) hold the assets to maturity or for resale 

for and until such time as the Secretary determines that the market is optimal for selling such 


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assets, in order to maximize the value for taxpayers; and 

(B) sell such assets at a price that the Secretary determines, based on available financial 

analysis, will maximize return on investment for 

the Federal Government. 

(3) PRIVATE SECTOR PARTICIPATION.—The Secretary shall encourage the private sector to participate in purchases of troubled assets, and to 

invest in financial institutions, consistent with 

the provisions of this section. 

(b) USE OF MARKET MECHANISMS.—In making 

purchases under this Act, the Secretary shall— 

(1) make such purchases at the lowest price 

that the Secretary determines to be consistent 

with the purposes of this Act; and 

(2) maximize the efficiency of the use of taxpayer resources by using market mechanisms, 

including auctions or reverse auctions, where 

appropriate. 

(c) DIRECT PURCHASES.—If the Secretary determines that use of a market mechanism under 

subsection (b) is not feasible or appropriate, and 

the purposes of the Act are best met through direct purchases from an individual financial institution, the Secretary shall pursue additional 

measures to ensure that prices paid for assets 

are reasonable and reflect the underlying value 

of the asset. 

(d) CONDITIONS ON PURCHASE AUTHORITY FOR

WARRANTS AND DEBT INSTRUMENTS.— 

(1) IN GENERAL.—The Secretary may not purchase, or make any commitment to purchase, 

any troubled asset under the authority of this 

Act, unless the Secretary receives from the financial institution from which such assets are 

to be purchased— 

(A) in the case of a financial institution, the 

securities of which are traded on a national securities exchange, a warrant giving the right to 

the Secretary to receive nonvoting common stock 

or preferred stock in such financial institution, 

or voting stock with respect to which, the Secretary agrees not to exercise voting power, as 

the Secretary determines appropriate; or 

(B) in the case of any financial institution 

other than one described in subparagraph (A), a 

warrant for common or preferred stock, or a senior debt instrument from such financial institution, as described in paragraph (2)(C). 

(2) TERMS AND CONDITIONS.—The terms and 

conditions of any warrant or senior debt instrument required under paragraph (1) shall meet 

the following requirements: 

(A) PURPOSES.—Such terms and conditions 

shall, at a minimum, be designed— 

(i) to provide for reasonable participation by 

the Secretary, for the benefit of taxpayers, in 

equity appreciation in the case of a warrant or 

other equity security, or a reasonable interest 

rate premium, in the case of a debt instrument; 

and 

(ii) to provide additional protection for the 

taxpayer against losses from sale of assets by 

the Secretary under this Act and the administrative expenses of the TARP. 

(B) AUTHORITY TO SELL, EXERCISE, OR SURRENDER.—The Secretary may sell, exercise, or 

surrender a warrant or any senior debt instrument received under this subsection, based on 

the conditions established under subparagraph 

(A). 

(C) CONVERSION.—The warrant shall provide 

that if, after the warrant is received by the Secretary under this subsection, the financial institution that issued the warrant is no longer listed or traded on a national securities exchange 

or securities association, as described in paragraph (1)(A), such warrants shall convert to 

senior debt, or contain appropriate protections 

for the Secretary to ensure that the Treasury is 

appropriately compensated for the value of the 

warrant, in an amount determined by the Secretary. 

(D) PROTECTIONS.—Any warrant representing 

securities to be received by the Secretary under 

this subsection shall contain anti-dilution provisions of the type employed in capital market 

transactions, as determined by the Secretary. 

Such provisions shall protect the value of the securities from market transactions such as stock 

splits, stock distributions, dividends, and other 

distributions, mergers, and other forms of reorganization or recapitalization. 

(E) EXERCISE PRICE.—The exercise price for 

any warrant issued pursuant to this subsection 

shall be set by the Secretary, in the interest of 

the taxpayers. 

(F) SUFFICIENCY.—The financial institution 

shall guarantee to the Secretary that it has authorized shares of nonvoting stock available to 

fulfill its obligations under this subsection. 

Should the financial institution not have sufficient authorized shares, including preferred 

shares that may carry dividend rights equal to 

a multiple number of common shares, the Secretary may, to the extent necessary, accept a 

senior debt note in an amount, and on such 

terms as will compensate the Secretary with 

equivalent value, in the event that a sufficient 

shareholder vote to authorize the necessary additional shares cannot be obtained. 

(3) EXCEPTIONS.— 

(A) DE MINIMIS.—The Secretary shall establish 

de minimis exceptions to the requirements of this 

subsection, based on the size of the cumulative 

transactions of troubled assets purchased from 

any one financial institution for the duration of 

the program, at not more than $100,000,000. 

(B) OTHER EXCEPTIONS.—The Secretary shall 

establish an exception to the requirements of 

this subsection and appropriate alternative requirements for any participating financial institution that is legally prohibited from issuing securities and debt instruments, so as not to allow 

circumvention of the requirements of this section. 

SEC. 114. MARKET TRANSPARENCY. 

(a) PRICING.—To facilitate market transparency, the Secretary shall make available to 

the public, in electronic form, a description, 

amounts, and pricing of assets acquired under 

this Act, within 2 business days of purchase, 

trade, or other disposition. 

(b) DISCLOSURE.—For each type of financial 

institutions that sells troubled assets to the Secretary under this Act, the Secretary shall determine whether the public disclosure required for 

such financial institutions with respect to offbalance sheet transactions, derivatives instruments, contingent liabilities, and similar sources 

of potential exposure is adequate to provide to 

the public sufficient information as to the true 

financial position of the institutions. If such 

disclosure is not adequate for that purpose, the 

Secretary shall make recommendations for additional disclosure requirements to the relevant 

regulators. 

SEC. 115. GRADUATED AUTHORIZATION TO PURCHASE. 

(a) AUTHORITY.—The authority of the Secretary to purchase troubled assets under this 

Act shall be limited as follows: 

(1) Effective upon the date of enactment of 

this Act, such authority shall be limited to 

$250,000,000,000 outstanding at any one time. 

(2) If at any time, the President submits to the 

Congress a written certification that the Secretary needs to exercise the authority under this 

paragraph, effective upon such submission, such 

authority shall be limited to $350,000,000,000 outstanding at any one time. 

(3) If, at any time after the certification in 

paragraph (2) has been made, the President 

transmits to the Congress a written report detailing the plan of the Secretary to exercise the 

authority under this paragraph, unless there is 

enacted, within 15 calendar days of such transmission, a joint resolution described in subsection (c), effective upon the expiration of such 

15-day period, such authority shall be limited to 

$700,000,000,000 outstanding at any one time. 

(b) AGGREGATION OF PURCHASE PRICES.—The 

amount of troubled assets purchased by the Secretary outstanding at any one time shall be determined for purposes of the dollar amount limitations under subsection (a) by aggregating the 

purchase prices of all troubled assets held. 

(c) JOINT RESOLUTION OF DISAPPROVAL.— 

(1) IN GENERAL.—Notwithstanding any other 

provision of this section, the Secretary may not 

exercise any authority to make purchases under 

this Act with regard to any amount in excess of 

$350,000,000,000 previously obligated, as described in this section if, within 15 calendar 

days after the date on which Congress receives 

a report of the plan of the Secretary described in 

subsection (a)(3), there is enacted into law a 

joint resolution disapproving the plan of the 

Secretary with respect to such additional 

amount. 

(2) CONTENTS OF JOINT RESOLUTION.—For the 

purpose of this section, the term ‘‘joint resolution’’ means only a joint resolution— 

(A) that is introduced not later than 3 calendar days after the date on which the report of 

the plan of the Secretary referred to in subsection (a)(3) is received by Congress; 

(B) which does not have a preamble; 

(C) the title of which is as follows: ‘‘Joint resolution relating to the disapproval of obligations 

under the Emergency Economic Stabilization 

Act of 2008’’; and 

(D) the matter after the resolving clause of 

which is as follows: ‘‘That Congress disapproves 

the obligation of any amount exceeding the 

amounts obligated as described in paragraphs 

(1) and (2) of section 115(a) of the Emergency 

Economic Stabilization Act of 2008.’’. 

(d) FAST TRACK CONSIDERATION IN HOUSE OF

REPRESENTATIVES.— 

(1) RECONVENING.—Upon receipt of a report 

under subsection (a)(3), the Speaker, if the 

House would otherwise be adjourned, shall notify the Members of the House that, pursuant to 

this section, the House shall convene not later 

than the second calendar day after receipt of 

such report; 

(2) REPORTING AND DISCHARGE.—Any committee of the House of Representatives to which 

a joint resolution is referred shall report it to 

the House not later than 5 calendar days after 

the date of receipt of the report described in subsection (a)(3). If a committee fails to report the 

joint resolution within that period, the committee shall be discharged from further consideration of the joint resolution and the joint resolution shall be referred to the appropriate calendar. 

(3) PROCEEDING TO CONSIDERATION.—After 

each committee authorized to consider a joint 

resolution reports it to the House or has been 

discharged from its consideration, it shall be in 

order, not later than the sixth day after Congress receives the report described in subsection 

(a)(3), to move to proceed to consider the joint 

resolution in the House. All points of order 

against the motion are waived. Such a motion 

shall not be in order after the House has disposed of a motion to proceed on the joint resolution. The previous question shall be considered 

as ordered on the motion to its adoption without 

intervening motion. The motion shall not be debatable. A motion to reconsider the vote by 

which the motion is disposed of shall not be in 

order. 

(4) CONSIDERATION.—The joint resolution 

shall be considered as read. All points of order 

against the joint resolution and against its consideration are waived. The previous question 

shall be considered as ordered on the joint resolution to its passage without intervening motion 

except two hours of debate equally divided and 

controlled by the proponent and an opponent. A 

motion to reconsider the vote on passage of the 

joint resolution shall not be in order. 

(e) FAST TRACK CONSIDERATION IN SENATE.— 

(1) RECONVENING.—Upon receipt of a report 

under subsection (a)(3), if the Senate has adjourned or recessed for more than 2 days, the 

majority leader of the Senate, after consultation 

with the minority leader of the Senate, shall notify the Members of the Senate that, pursuant to 


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this section, the Senate shall convene not later 

than the second calendar day after receipt of 

such message. 

(2) PLACEMENT ON CALENDAR.—Upon introduction in the Senate, the joint resolution shall 

be placed immediately on the calendar. 

(3) FLOOR CONSIDERATION.— 

(A) IN GENERAL.—Notwithstanding Rule XXII 

of the Standing Rules of the Senate, it is in 

order at any time during the period beginning 

on the 4th day after the date on which Congress 

receives a report of the plan of the Secretary described in subsection (a)(3) and ending on the 

6th day after the date on which Congress receives a report of the plan of the Secretary described in subsection (a)(3) (even though a previous motion to the same effect has been disagreed to) to move to proceed to the consideration of the joint resolution, and all points of 

order against the joint resolution (and against 

consideration of the joint resolution) are 

waived. The motion to proceed is not debatable. 

The motion is not subject to a motion to postpone. A motion to reconsider the vote by which 

the motion is agreed to or disagreed to shall not 

be in order. If a motion to proceed to the consideration of the resolution is agreed to, the joint 

resolution shall remain the unfinished business 

until disposed of. 

(B) DEBATE.—Debate on the joint resolution, 

and on all debatable motions and appeals in 

connection therewith, shall be limited to not 

more than 10 hours, which shall be divided 

equally between the majority and minority leaders or their designees. A motion further to limit 

debate is in order and not debatable. An amendment to, or a motion to postpone, or a motion to 

proceed to the consideration of other business, 

or a motion to recommit the joint resolution is 

not in order. 

(C) VOTE ON PASSAGE.—The vote on passage 

shall occur immediately following the conclusion of the debate on a joint resolution, and a 

single quorum call at the conclusion of the debate if requested in accordance with the rules of 

the Senate. 

(D) RULINGS OF THE CHAIR ON PROCEDURE.— 

Appeals from the decisions of the Chair relating 

to the application of the rules of the Senate, as 

the case may be, to the procedure relating to a 

joint resolution shall be decided without debate. 

(f) RULES RELATING TO SENATE AND HOUSE OF

REPRESENTATIVES.— 

(1) COORDINATION WITH ACTION BY OTHER

HOUSE.—If, before the passage by one House of 

a joint resolution of that House, that House receives from the other House a joint resolution, 

then the following procedures shall apply: 

(A) The joint resolution of the other House 

shall not be referred to a committee. 

(B) With respect to a joint resolution of the 

House receiving the resolution— 

(i) the procedure in that House shall be the 

same as if no joint resolution had been received 

from the other House; but 

(ii) the vote on passage shall be on the joint 

resolution of the other House. 

(2) TREATMENT OF JOINT RESOLUTION OF

OTHER HOUSE.—If one House fails to introduce 

or consider a joint resolution under this section, 

the joint resolution of the other House shall be 

entitled to expedited floor procedures under this 

section. 

(3) TREATMENT OF COMPANION MEASURES.—If, 

following passage of the joint resolution in the 

Senate, the Senate then receives the companion 

measure from the House of Representatives, the 

companion measure shall not be debatable. 

(4) CONSIDERATION AFTER PASSAGE.— 

(A) IN GENERAL.—If Congress passes a joint 

resolution, the period beginning on the date the 

President is presented with the joint resolution 

and ending on the date the President takes action with respect to the joint resolution shall be 

disregarded in computing the 15-calendar day 

period described in subsection (a)(3). 

(B) VETOES.—If the President vetoes the joint 

resolution— 

(i) the period beginning on the date the President vetoes the joint resolution and ending on 

the date the Congress receives the veto message 

with respect to the joint resolution shall be disregarded in computing the 15-calendar day period described in subsection (a)(3), and 

(ii) debate on a veto message in the Senate 

under this section shall be 1 hour equally divided between the majority and minority leaders 

or their designees. 

(5) RULES OF HOUSE OF REPRESENTATIVES AND

SENATE.—This subsection and subsections (c), 

(d), and (e) are enacted by Congress— 

(A) as an exercise of the rulemaking power of 

the Senate and House of Representatives, respectively, and as such it is deemed a part of the 

rules of each House, respectively, but applicable 

only with respect to the procedure to be followed 

in that House in the case of a joint resolution, 

and it supersedes other rules only to the extent 

that it is inconsistent with such rules; and 

(B) with full recognition of the constitutional 

right of either House to change the rules (so far 

as relating to the procedure of that House) at 

any time, in the same manner, and to the same 

extent as in the case of any other rule of that 

House. 

SEC. 116. OVERSIGHT AND AUDITS. 

(a) COMPTROLLER GENERAL OVERSIGHT.— 

(1) SCOPE OF OVERSIGHT.—The Comptroller 

General of the United States shall, upon establishment of the troubled assets relief program 

under this Act (in this section referred to as the 

‘‘TARP’’), commence ongoing oversight of the 

activities and performance of the TARP and of 

any agents and representatives of the TARP (as 

related to the agent or representative’s activities 

on behalf of or under the authority of the 

TARP), including vehicles established by the 

Secretary under this Act. The subjects of such 

oversight shall include the following: 

(A) The performance of the TARP in meeting 

the purposes of this Act, particularly those involving— 

(i) foreclosure mitigation; 

(ii) cost reduction; 

(iii) whether it has provided stability or prevented disruption to the financial markets or 

the banking system; and 

(iv) whether it has protected taxpayers. 

(B) The financial condition and internal controls of the TARP, its representatives and 

agents. 

(C) Characteristics of transactions and commitments entered into, including transaction 

type, frequency, size, prices paid, and all other 

relevant terms and conditions, and the timing, 

duration and terms of any future commitments 

to purchase assets. 

(D) Characteristics and disposition of acquired assets, including type, acquisition price, 

current market value, sale prices and terms, and 

use of proceeds from sales. 

(E) Efficiency of the operations of the TARP 

in the use of appropriated funds. 

(F) Compliance with all applicable laws and 

regulations by the TARP, its agents and representatives. 

(G) The efforts of the TARP to prevent, identify, and minimize conflicts of interest involving 

any agent or representative performing activities 

on behalf of or under the authority of the 

TARP. 

(H) The efficacy of contracting procedures 

pursuant to section 107(b), including, as applicable, the efforts of the TARP in evaluating proposals for inclusion and contracting to the maximum extent possible of minorities (as such term 

is defined in 1204(c) of the Financial Institutions Reform, Recovery, and Enhancement Act 

of 1989 (12 U.S.C. 1811 note), women, and 

minority- and women-owned businesses, including ascertaining and reporting the total amount 

of fees paid and other value delivered by the 

TARP to all of its agents and representatives, 

and such amounts paid or delivered to such 

firms that are minority- and women-owned businesses (as such terms are defined in section 21A 

of the Federal Home Loan Bank Act (12 U.S.C. 

1441a)). 

(2) CONDUCT AND ADMINISTRATION OF OVERSIGHT.— 

(A) GAO PRESENCE.—The Secretary shall provide the Comptroller General with appropriate 

space and facilities in the Department of the 

Treasury as necessary to facilitate oversight of 

the TARP until the termination date established 

in section 120. 

(B) ACCESS TO RECORDS.—To the extent otherwise consistent with law, the Comptroller General shall have access, upon request, to any information, data, schedules, books, accounts, financial records, reports, files, electronic communications, or other papers, things, or property 

belonging to or in use by the TARP, or any vehicles established by the Secretary under this 

Act, and to the officers, directors, employees, 

independent public accountants, financial advisors, and other agents and representatives of the 

TARP (as related to the agent or representative’s activities on behalf of or under the authority of the TARP) or any such vehicle at 

such reasonable time as the Comptroller General 

may request. The Comptroller General shall be 

afforded full facilities for verifying transactions 

with the balances or securities held by depositaries, fiscal agents, and custodians. The Comptroller General may make and retain copies of 

such books, accounts, and other records as the 

Comptroller General deems appropriate. 

(C) REIMBURSEMENT OF COSTS.—The Treasury 

shall reimburse the Government Accountability 

Office for the full cost of any such oversight activities as billed therefor by the Comptroller 

General of the United States. Such reimbursements shall be credited to the appropriation account ‘‘Salaries and Expenses, Government Accountability Office’’ current when the payment 

is received and remain available until expended. 

(3) REPORTING.—The Comptroller General 

shall submit reports of findings under this section, regularly and no less frequently than once 

every 60 days, to the appropriate committees of 

Congress, and the Special Inspector General for 

the Troubled Asset Relief Program established 

under this Act on the activities and performance 

of the TARP. The Comptroller may also submit 

special reports under this subsection as warranted by the findings of its oversight activities. 

(b) COMPTROLLER GENERAL AUDITS.— 

(1) ANNUAL AUDIT.—The TARP shall annually 

prepare and issue to the appropriate committees 

of Congress and the public audited financial 

statements prepared in accordance with generally accepted accounting principles, and the 

Comptroller General shall annually audit such 

statements in accordance with generally accepted auditing standards. The Treasury shall reimburse the Government Accountability Office for 

the full cost of any such audit as billed therefor 

by the Comptroller General. Such reimbursements shall be credited to the appropriation account ‘‘Salaries and Expenses, Government Accountability Office’’ current when the payment 

is received and remain available until expended. 

The financial statements prepared under this 

paragraph shall be on the fiscal year basis prescribed under section 1102 of title 31, United 

States Code. 

(2) AUTHORITY.—The Comptroller General 

may audit the programs, activities, receipts, expenditures, and financial transactions of the 

TARP and any agents and representatives of 

the TARP (as related to the agent or representative’s activities on behalf of or under the authority of the TARP), including vehicles established by the Secretary under this Act. 

(3) CORRECTIVE RESPONSES TO AUDIT PROBLEMS.—The TARP shall— 

(A) take action to address deficiencies identified by the Comptroller General or other auditor 

engaged by the TARP; or 

(B) certify to appropriate committees of Congress that no action is necessary or appropriate. 

(c) INTERNAL CONTROL.— 


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(1) ESTABLISHMENT.—The TARP shall establish and maintain an effective system of internal 

control, consistent with the standards prescribed 

under section 3512(c) of title 31, United States 

Code, that provides reasonable assurance of— 

(A) the effectiveness and efficiency of operations, including the use of the resources of the 

TARP; 

(B) the reliability of financial reporting, including financial statements and other reports 

for internal and external use; and 

(C) compliance with applicable laws and regulations. 

(2) REPORTING.—In conjunction with each annual financial statement issued under this section, the TARP shall— 

(A) state the responsibility of management for 

establishing and maintaining adequate internal 

control over financial reporting; and 

(B) state its assessment, as of the end of the 

most recent year covered by such financial 

statement of the TARP, of the effectiveness of 

the internal control over financial reporting. 

(d) SHARING OF INFORMATION.—Any report or 

audit required under this section shall also be 

submitted to the Congressional Oversight Panel 

established under section 125. 

(e) TERMINATION.—Any oversight, reporting, 

or audit requirement under this section shall 

terminate on the later of— 

(1) the date that the last troubled asset acquired by the Secretary under section 101 has 

been sold or transferred out of the ownership or 

control of the Federal Government; or 

(2) the date of expiration of the last insurance 

contract issued under section 102. 

SEC. 117. STUDY AND REPORT ON MARGIN AUTHORITY. 

(a) STUDY.—The Comptroller General shall 

undertake a study to determine the extent to 

which leverage and sudden deleveraging of financial institutions was a factor behind the 

current financial crisis. 

(b) CONTENT.—The study required by this section shall include— 

(1) an analysis of the roles and responsibilities 

of the Board, the Securities and Exchange Commission, the Secretary, and other Federal banking agencies with respect to monitoring leverage 

and acting to curtail excessive leveraging; 

(2) an analysis of the authority of the Board 

to regulate leverage, including by setting margin 

requirements, and what process the Board used 

to decide whether or not to use its authority; 

(3) an analysis of any usage of the margin authority by the Board; and 

(4) recommendations for the Board and appropriate committees of Congress with respect to the 

existing authority of the Board. 

(c) REPORT.—Not later than June 1, 2009, the 

Comptroller General shall complete and submit a 

report on the study required by this section to 

the Committee on Banking, Housing, and Urban 

Affairs of the Senate and the Committee on Financial Services of the House of Representatives. 

(d) SHARING OF INFORMATION.—Any reports 

required under this section shall also be submitted to the Congressional Oversight Panel established under section 125. 

SEC. 118. FUNDING. 

For the purpose of the authorities granted in 

this Act, and for the costs of administering those 

authorities, the Secretary may use the proceeds 

of the sale of any securities issued under chapter 31 of title 31, United States Code, and the 

purposes for which securities may be issued 

under chapter 31 of title 31, United States Code, 

are extended to include actions authorized by 

this Act, including the payment of administrative expenses. Any funds expended or obligated 

by the Secretary for actions authorized by this 

Act, including the payment of administrative expenses, shall be deemed appropriated at the time 

of such expenditure or obligation. 

SEC. 119. JUDICIAL REVIEW AND RELATED MATTERS. 

(a) JUDICIAL REVIEW.— 

(1) STANDARD.—Actions by the Secretary pursuant to the authority of this Act shall be subject to chapter 7 of title 5, United States Code, 

including that such final actions shall be held 

unlawful and set aside if found to be arbitrary, 

capricious, an abuse of discretion, or not in accordance with law. 

(2) LIMITATIONS ON EQUITABLE RELIEF.— 

(A) INJUNCTION.—No injunction or other form 

of equitable relief shall be issued against the 

Secretary for actions pursuant to section 101, 

102, 106, and 109, other than to remedy a violation of the Constitution. 

(B) TEMPORARY RESTRAINING ORDER.—Any request for a temporary restraining order against 

the Secretary for actions pursuant to this Act 

shall be considered and granted or denied by the 

court within 3 days of the date of the request. 

(C) PRELIMINARY INJUNCTION.—Any request 

for a preliminary injunction against the Secretary for actions pursuant to this Act shall be 

considered and granted or denied by the court 

on an expedited basis consistent with the provisions of rule 65(b)(3) of the Federal Rules of 

Civil Procedure, or any successor thereto. 

(D) PERMANENT INJUNCTION.—Any request for 

a permanent injunction against the Secretary 

for actions pursuant to this Act shall be considered and granted or denied by the court on an 

expedited basis. Whenever possible, the court 

shall consolidate trial on the merits with any 

hearing on a request for a preliminary injunction, consistent with the provisions of rule 

65(a)(2) of the Federal Rules of Civil Procedure, 

or any successor thereto. 

(3) LIMITATION ON ACTIONS BY PARTICIPATING

COMPANIES.—No action or claims may be 

brought against the Secretary by any person 

that divests its assets with respect to its participation in a program under this Act, except as 

provided in paragraph (1), other than as expressly provided in a written contract with the 

Secretary. 

(4) STAYS.—Any injunction or other form of 

equitable relief issued against the Secretary for 

actions pursuant to section 101, 102, 106, and 

109, shall be automatically stayed. The stay 

shall be lifted unless the Secretary seeks a stay 

from a higher court within 3 calendar days after 

the date on which the relief is issued. 

(b) RELATED MATTERS.— 

(1) TREATMENT OF HOMEOWNERS’ RIGHTS.— 

The terms of any residential mortgage loan that 

is part of any purchase by the Secretary under 

this Act shall remain subject to all claims and 

defenses that would otherwise apply, notwithstanding the exercise of authority by the Secretary under this Act. 

(2) SAVINGS CLAUSE.—Any exercise of the authority of the Secretary pursuant to this Act 

shall not impair the claims or defenses that 

would otherwise apply with respect to persons 

other than the Secretary. Except as established 

in any contract, a servicer of pooled residential 

mortgages owes any duty to determine whether 

the net present value of the payments on the 

loan, as modified, is likely to be greater than the 

anticipated net recovery that would result from 

foreclosure to all investors and holders of beneficial interests in such investment, but not to 

any individual or groups of investors or beneficial interest holders, and shall be deemed to 

act in the best interests of all such investors or 

holders of beneficial interests if the servicer 

agrees to or implements a modification or workout plan when the servicer takes reasonable loss 

mitigation actions, including partial payments. 

SEC. 120. TERMINATION OF AUTHORITY. 

(a) TERMINATION.—The authorities provided 

under sections 101(a), excluding section 

101(a)(3), and 102 shall terminate on December 

31, 2009. 

(b) EXTENSION UPON CERTIFICATION.—The 

Secretary, upon submission of a written certification to Congress, may extend the authority 

provided under this Act to expire not later than 

2 years from the date of enactment of this Act. 

Such certification shall include a justification of 

why the extension is necessary to assist American families and stabilize financial markets, as 

well as the expected cost to the taxpayers for 

such an extension. 

SEC. 121. SPECIAL INSPECTOR GENERAL FOR THE 

TROUBLED ASSET RELIEF PROGRAM. 

(a) OFFICE OF INSPECTOR GENERAL.—There is 

hereby established the Office of the Special Inspector General for the Troubled Asset Relief 

Program. 

(b) APPOINTMENT OF INSPECTOR GENERAL; REMOVAL.—(1) The head of the Office of the Special Inspector General for the Troubled Asset 

Relief Program is the Special Inspector General 

for the Troubled Asset Relief Program (in this 

section referred to as the ‘‘Special Inspector 

General’’), who shall be appointed by the President, by and with the advice and consent of the 

Senate. 

(2) The appointment of the Special Inspector 

General shall be made on the basis of integrity 

and demonstrated ability in accounting, auditing, financial analysis, law, management analysis, public administration, or investigations. 

(3) The nomination of an individual as Special 

Inspector General shall be made as soon as 

practicable after the establishment of any program under sections 101 and 102. 

(4) The Special Inspector General shall be removable from office in accordance with the provisions of section 3(b) of the Inspector General 

Act of 1978 (5 U.S.C. App.). 

(5) For purposes of section 7324 of title 5, 

United States Code, the Special Inspector General shall not be considered an employee who 

determines policies to be pursued by the United 

States in the nationwide administration of Federal law. 

(6) The annual rate of basic pay of the Special 

Inspector General shall be the annual rate of 

basic pay for an Inspector General under section 3(e) of the Inspector General Act of 1978 (5 

U.S.C. App.). 

(c) DUTIES.—(1) It shall be the duty of the 

Special Inspector General to conduct, supervise, 

and coordinate audits and investigations of the 

purchase, management, and sale of assets by the 

Secretary of the Treasury under any program 

established by the Secretary under section 101, 

and the management by the Secretary of any 

program established under section 102, including 

by collecting and summarizing the following information: 

(A) A description of the categories of troubled 

assets purchased or otherwise procured by the 

Secretary. 

(B) A listing of the troubled assets purchased 

in each such category described under subparagraph (A). 

(C) An explanation of the reasons the Secretary deemed it necessary to purchase each 

such troubled asset. 

(D) A listing of each financial institution that 

such troubled assets were purchased from. 

(E) A listing of and detailed biographical information on each person or entity hired to 

manage such troubled assets. 

(F) A current estimate of the total amount of 

troubled assets purchased pursuant to any program established under section 101, the amount 

of troubled assets on the books of the Treasury, 

the amount of troubled assets sold, and the profit and loss incurred on each sale or disposition 

of each such troubled asset. 

(G) A listing of the insurance contracts issued 

under section 102. 

(2) The Special Inspector General shall establish, maintain, and oversee such systems, procedures, and controls as the Special Inspector 

General considers appropriate to discharge the 

duty under paragraph (1). 

(3) In addition to the duties specified in paragraphs (1) and (2), the Inspector General shall 

also have the duties and responsibilities of inspectors general under the Inspector General 

Act of 1978. 

(d) POWERS AND AUTHORITIES.—(1) In carrying out the duties specified in subsection (c), 


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the Special Inspector General shall have the authorities provided in section 6 of the Inspector 

General Act of 1978. 

(2) The Special Inspector General shall carry 

out the duties specified in subsection (c)(1) in 

accordance with section 4(b)(1) of the Inspector 

General Act of 1978. 

(e) PERSONNEL, FACILITIES, AND OTHER RESOURCES.—(1) The Special Inspector General 

may select, appoint, and employ such officers 

and employees as may be necessary for carrying 

out the duties of the Special Inspector General, 

subject to the provisions of title 5, United States 

Code, governing appointments in the competitive 

service, and the provisions of chapter 51 and 

subchapter III of chapter 53 of such title, relating to classification and General Schedule pay 

rates. 

(2) The Special Inspector General may obtain 

services as authorized by section 3109 of title 5, 

United States Code, at daily rates not to exceed 

the equivalent rate prescribed for grade GS–15 of 

the General Schedule by section 5332 of such 

title. 

(3) The Special Inspector General may enter 

into contracts and other arrangements for audits, studies, analyses, and other services with 

public agencies and with private persons, and 

make such payments as may be necessary to 

carry out the duties of the Inspector General. 

(4)(A) Upon request of the Special Inspector 

General for information or assistance from any 

department, agency, or other entity of the Federal Government, the head of such entity shall, 

insofar as is practicable and not in contravention of any existing law, furnish such information or assistance to the Special Inspector General, or an authorized designee. 

(B) Whenever information or assistance requested by the Special Inspector General is, in 

the judgment of the Special Inspector General, 

unreasonably refused or not provided, the Special Inspector General shall report the circumstances to the appropriate committees of 

Congress without delay. 

(f) REPORTS.—(1) Not later than 60 days after 

the confirmation of the Special Inspector General, and every calendar quarter thereafter, the 

Special Inspector General shall submit to the 

appropriate committees of Congress a report 

summarizing the activities of the Special Inspector General during the 120-day period ending on 

the date of such report. Each report shall include, for the period covered by such report, a 

detailed statement of all purchases, obligations, 

expenditures, and revenues associated with any 

program established by the Secretary of the 

Treasury under sections 101 and 102, as well as 

the information collected under subsection 

(c)(1). 

(2) Nothing in this subsection shall be construed to authorize the public disclosure of information that is— 

(A) specifically prohibited from disclosure by 

any other provision of law; 

(B) specifically required by Executive order to 

be protected from disclosure in the interest of 

national defense or national security or in the 

conduct of foreign affairs; or 

(C) a part of an ongoing criminal investigation. 

(3) Any reports required under this section 

shall also be submitted to the Congressional 

Oversight Panel established under section 125. 

(g) FUNDING.—(1) Of the amounts made available to the Secretary of the Treasury under section 118, $50,000,000 shall be available to the 

Special Inspector General to carry out this section. 

(2) The amount available under paragraph (1) 

shall remain available until expended. 

(h) TERMINATION.—The Office of the Special 

Inspector General shall terminate on the later 

of— 

(1) the date that the last troubled asset acquired by the Secretary under section 101 has 

been sold or transferred out of the ownership or 

control of the Federal Government; or 

(2) the date of expiration of the last insurance 

contract issued under section 102. 

SEC. 122. INCREASE IN STATUTORY LIMIT ON THE 

PUBLIC DEBT. 

Subsection (b) of section 3101 of title 31, 

United States Code, is amended by striking out 

the dollar limitation contained in such subsection and inserting ‘‘$11,315,000,000,000’’. 

SEC. 123. CREDIT REFORM. 

(a) IN GENERAL.—Subject to subsection (b), 

the costs of purchases of troubled assets made 

under section 101(a) and guarantees of troubled 

assets under section 102, and any cash flows associated with the activities authorized in section 

102 and subsections (a), (b), and (c) of section 

106 shall be determined as provided under the 

Federal Credit Reform Act of 1990 (2 U.S.C. 661 

et. seq.). 

(b) COSTS.—For the purposes of section 502(5) 

of the Federal Credit Reform Act of 1990 (2 

U.S.C. 661a(5))— 

(1) the cost of troubled assets and guarantees 

of troubled assets shall be calculated by adjusting the discount rate in section 502(5)(E) (2 

U.S.C. 661a(5)(E)) for market risks; and 

(2) the cost of a modification of a troubled 

asset or guarantee of a troubled asset shall be 

the difference between the current estimate consistent with paragraph (1) under the terms of 

the troubled asset or guarantee of the troubled 

asset and the current estimate consistent with 

paragraph (1) under the terms of the troubled 

asset or guarantee of the troubled asset, as 

modified. 

SEC. 124. HOPE FOR HOMEOWNERS AMENDMENTS. 

Section 257 of the National Housing Act (12 

U.S.C. 1715z–23) is amended— 

(1) in subsection (e)— 

(A) in paragraph (1)(B), by inserting before 

‘‘a ratio’’ the following: ‘‘, or thereafter is likely 

to have, due to the terms of the mortgage being 

reset,’’; 

(B) in paragraph (2)(B), by inserting before 

the period at the end ‘‘(or such higher percentage as the Board determines, in the discretion of 

the Board)’’; 

(C) in paragraph (4)(A)— 

(i) in the first sentence, by inserting after ‘‘insured loan’’ the following: ‘‘and any payments 

made under this paragraph,’’; and 

(ii) by adding at the end the following: ‘‘Such 

actions may include making payments, which 

shall be accepted as payment in full of all indebtedness under the eligible mortgage, to any 

holder of an existing subordinate mortgage, in 

lieu of any future appreciation payments authorized under subparagraph (B).’’; and 

(2) in subsection (w), by inserting after ‘‘administrative costs’’ the following: ‘‘and payments pursuant to subsection (e)(4)(A)’’. 

SEC. 125. CONGRESSIONAL OVERSIGHT PANEL. 

(a) ESTABLISHMENT.—There is hereby established the Congressional Oversight Panel (hereafter in this section referred to as the ‘‘Oversight Panel’’) as an establishment in the legislative branch. 

(b) DUTIES.—The Oversight Panel shall review 

the current state of the financial markets and 

the regulatory system and submit the following 

reports to Congress: 

(1) REGULAR REPORTS.— 

(A) IN GENERAL.—Regular reports of the Oversight Panel shall include the following: 

(i) The use by the Secretary of authority 

under this Act, including with respect to the use 

of contracting authority and administration of 

the program. 

(ii) The impact of purchases made under the 

Act on the financial markets and financial institutions. 

(iii) The extent to which the information made 

available on transactions under the program 

has contributed to market transparency. 

(iv) The effectiveness of foreclosure mitigation 

efforts, and the effectiveness of the program 

from the standpoint of minimizing long-term 

costs to the taxpayers and maximizing the benefits for taxpayers. 

(B) TIMING.—The reports required under this 

paragraph shall be submitted not later than 30 

days after the first exercise by the Secretary of 

the authority under section 101(a) or 102, and 

every 30 days thereafter. 

(2) SPECIAL REPORT ON REGULATORY REFORM.—The Oversight Panel shall submit a special report on regulatory reform not later than 

January 20, 2009, analyzing the current state of 

the regulatory system and its effectiveness at 

overseeing the participants in the financial system and protecting consumers, and providing 

recommendations for improvement, including 

recommendations regarding whether any participants in the financial markets that are currently outside the regulatory system should become subject to the regulatory system, the rationale underlying such recommendation, and 

whether there are any gaps in existing consumer 

protections. 

(c) MEMBERSHIP.— 

(1) IN GENERAL.—The Oversight Panel shall 

consist of 5 members, as follows: 

(A) 1 member appointed by the Speaker of the 

House of Representatives. 

(B) 1 member appointed by the minority leader 

of the House of Representatives. 

(C) 1 member appointed by the majority leader 

of the Senate. 

(D) 1 member appointed by the minority leader 

of the Senate. 

(E) 1 member appointed by the Speaker of the 

House of Representatives and the majority leader of the Senate, after consultation with the minority leader of the Senate and the minority 

leader of the House of Representatives. 

(2) PAY.—Each member of the Oversight Panel 

shall each be paid at a rate equal to the daily 

equivalent of the annual rate of basic pay for 

level I of the Executive Schedule for each day 

(including travel time) during which such member is engaged in the actual performance of duties vested in the Commission. 

(3) PROHIBITION OF COMPENSATION OF FEDERAL EMPLOYEES.—Members of the Oversight 

Panel who are full-time officers or employees of 

the United States or Members of Congress may 

not receive additional pay, allowances, or benefits by reason of their service on the Oversight 

Panel. 

(4) TRAVEL EXPENSES.—Each member shall receive travel expenses, including per diem in lieu 

of subsistence, in accordance with applicable 

provisions under subchapter I of chapter 57 of 

title 5, United States Code. 

(5) QUORUM.—Four members of the Oversight 

Panel shall constitute a quorum but a lesser 

number may hold hearings. 

(6) VACANCIES.—A vacancy on the Oversight 

Panel shall be filled in the manner in which the 

original appointment was made. 

(7) MEETINGS.—The Oversight Panel shall 

meet at the call of the Chairperson or a majority 

of its members. 

(d) STAFF.— 

(1) IN GENERAL.—The Oversight Panel may 

appoint and fix the pay of any personnel as the 

Commission considers appropriate. 

(2) EXPERTS AND CONSULTANTS.—The Oversight Panel may procure temporary and intermittent services under section 3109(b) of title 5, 

United States Code. 

(3) STAFF OF AGENCIES.—Upon request of the 

Oversight Panel, the head of any Federal department or agency may detail, on a reimbursable basis, any of the personnel of that department or agency to the Oversight Panel to assist 

it in carrying out its duties under this Act. 

(e) POWERS.— 

(1) HEARINGS AND SESSIONS.—The Oversight 

Panel may, for the purpose of carrying out this 

section, hold hearings, sit and act at times and 

places, take testimony, and receive evidence as 

the Panel considers appropriate and may administer oaths or affirmations to witnesses appearing before it. 


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(2) POWERS OF MEMBERS AND AGENTS.—Any 

member or agent of the Oversight Panel may, if 

authorized by the Oversight Panel, take any action which the Oversight Panel is authorized to 

take by this section. 

(3) OBTAINING OFFICIAL DATA.—The Oversight 

Panel may secure directly from any department 

or agency of the United States information necessary to enable it to carry out this section. 

Upon request of the Chairperson of the Oversight Panel, the head of that department or 

agency shall furnish that information to the 

Oversight Panel. 

(4) REPORTS.—The Oversight Panel shall receive and consider all reports required to be submitted to the Oversight Panel under this Act. 

(f) TERMINATION.—The Oversight Panel shall 

terminate 6 months after the termination date 

specified in section 120. 

(g) FUNDING FOR EXPENSES.— 

(1) AUTHORIZATION OF APPROPRIATIONS.— 

There is authorized to be appropriated to the 

Oversight Panel such sums as may be necessary 

for any fiscal year, half of which shall be derived from the applicable account of the House 

of Representatives, and half of which shall be 

derived from the contingent fund of the Senate. 

(2) REIMBURSEMENT OF AMOUNTS.—An amount 

equal to the expenses of the Oversight Panel 

shall be promptly transferred by the Secretary, 

from time to time upon the presentment of a 

statement of such expenses by the Chairperson 

of the Oversight Panel, from funds made available to the Secretary under this Act to the applicable fund of the House of Representatives and 

the contingent fund of the Senate, as appropriate, as reimbursement for amounts expended 

from such account and fund under paragraph 

(1). 

SEC. 126. FDIC AUTHORITY. 

(a) IN GENERAL.—Section 18(a) of the Federal 

Deposit Insurance Act (12 U.S.C. 1828(a)) is 

amended by adding at the end the following 

new paragraph: 

‘‘(4) FALSE ADVERTISING, MISUSE OF FDIC

NAMES, AND MISREPRESENTATION TO INDICATE INSURED STATUS.— 

‘‘(A) PROHIBITION ON FALSE ADVERTISING AND

MISUSE OF FDIC NAMES.—No person may represent or imply that any deposit liability, obligation, certificate, or share is insured or guaranteed by the Corporation, if such deposit liability, 

obligation, certificate, or share is not insured or 

guaranteed by the Corporation— 

‘‘(i) by using the terms ‘Federal Deposit’, 

‘Federal Deposit Insurance’, ‘Federal Deposit 

Insurance Corporation’, any combination of 

such terms, or the abbreviation ‘FDIC’ as part 

of the business name or firm name of any person, including any corporation, partnership, 

business trust, association, or other business entity; or 

‘‘(ii) by using such terms or any other terms, 

sign, or symbol as part of an advertisement, solicitation, or other document. 

‘‘(B) PROHIBITION ON MISREPRESENTATIONS OF

INSURED STATUS.—No person may knowingly 

misrepresent— 

‘‘(i) that any deposit liability, obligation, certificate, or share is insured, under this Act, if 

such deposit liability, obligation, certificate, or 

share is not so insured; or 

‘‘(ii) the extent to which or the manner in 

which any deposit liability, obligation, certificate, or share is insured under this Act, if such 

deposit liability, obligation, certificate, or share 

is not so insured, to the extent or in the manner 

represented. 

‘‘(C) AUTHORITY OF THE APPROPRIATE FEDERAL BANKING AGENCY.—The appropriate Federal banking agency shall have enforcement authority in the case of a violation of this paragraph by any person for which the agency is the 

appropriate Federal banking agency, or any institution-affiliated party thereof. 

‘‘(D) CORPORATION AUTHORITY IF THE APPROPRIATE FEDERAL BANKING AGENCY FAILS TO FOLLOW RECOMMENDATION.— 

‘‘(i) RECOMMENDATION.—The Corporation may 

recommend in writing to the appropriate Federal banking agency that the agency take any 

enforcement action authorized under section 8 

for purposes of enforcement of this paragraph 

with respect to any person for which the agency 

is the appropriate Federal banking agency or 

any institution-affiliated party thereof. 

‘‘(ii) AGENCY RESPONSE.—If the appropriate 

Federal banking agency does not, within 30 

days of the date of receipt of a recommendation 

under clause (i), take the enforcement action 

with respect to this paragraph recommended by 

the Corporation or provide a plan acceptable to 

the Corporation for responding to the situation 

presented, the Corporation may take the recommended enforcement action against such person or institution-affiliated party. 

‘‘(E) ADDITIONAL AUTHORITY.—In addition to 

its authority under subparagraphs (C) and (D), 

for purposes of this paragraph, the Corporation 

shall have, in the same manner and to the same 

extent as with respect to a State nonmember insured bank— 

‘‘(i) jurisdiction over— 

‘‘(I) any person other than a person for which 

another agency is the appropriate Federal banking agency or any institution-affiliated party 

thereof; and 

‘‘(II) any person that aids or abets a violation 

of this paragraph by a person described in subclause (I); and 

‘‘(ii) for purposes of enforcing the requirements of this paragraph, the authority of the 

Corporation under— 

‘‘(I) section 10(c) to conduct investigations; 

and 

‘‘(II) subsections (b), (c), (d) and (i) of section 

8 to conduct enforcement actions. 

‘‘(F) OTHER ACTIONS PRESERVED.—No provision of this paragraph shall be construed as barring any action otherwise available, under the 

laws of the United States or any State, to any 

Federal or State agency or individual.’’. 

(b) ENFORCEMENT ORDERS.—Section 8(c) of 

the Federal Deposit Insurance Act (12 U.S.C. 

1818(c)) is amended by adding at the end the following new paragraph: 

‘‘(4) FALSE ADVERTISING OR MISUSE OF NAMES

TO INDICATE INSURED STATUS.— 

‘‘(A) TEMPORARY ORDER.— 

‘‘(i) IN GENERAL.—If a notice of charges served 

under subsection (b)(1) specifies on the basis of 

particular facts that any person engaged or is 

engaging in conduct described in section 

18(a)(4), the Corporation or other appropriate 

Federal banking agency may issue a temporary 

order requiring— 

‘‘(I) the immediate cessation of any activity or 

practice described, which gave rise to the notice 

of charges; and 

‘‘(II) affirmative action to prevent any further, or to remedy any existing, violation. 

‘‘(ii) EFFECT OF ORDER.—Any temporary order 

issued under this subparagraph shall take effect 

upon service. 

‘‘(B) EFFECTIVE PERIOD OF TEMPORARY

ORDER.—A temporary order issued under subparagraph (A) shall remain effective and enforceable, pending the completion of an administrative proceeding pursuant to subsection 

(b)(1) in connection with the notice of charges— 

‘‘(i) until such time as the Corporation or 

other appropriate Federal banking agency dismisses the charges specified in such notice; or 

‘‘(ii) if a cease-and-desist order is issued 

against such person, until the effective date of 

such order. 

‘‘(C) CIVIL MONEY PENALTIES.—Any violation 

of section 18(a)(4) shall be subject to civil money 

penalties, as set forth in subsection (i), except 

that for any person other than an insured depository institution or an institution-affiliated 

party that is found to have violated this paragraph, the Corporation or other appropriate 

Federal banking agency shall not be required to 

demonstrate any loss to an insured depository 

institution.’’. 

(c) UNENFORCEABILITY OF CERTAIN AGREEMENTS.—Section 13(c) of the Federal Deposit Insurance Act (12 U.S.C. 1823(c)) is amended by 

adding at the end the following new paragraph: 

‘‘(11) UNENFORCEABILITY OF CERTAIN AGREEMENTS.—No provision contained in any existing 

or future standstill, confidentiality, or other 

agreement that, directly or indirectly— 

‘‘(A) affects, restricts, or limits the ability of 

any person to offer to acquire or acquire, 

‘‘(B) prohibits any person from offering to acquire or acquiring, or 

‘‘(C) prohibits any person from using any previously disclosed information in connection with 

any such offer to acquire or acquisition of, 

all or part of any insured depository institution, 

including any liabilities, assets, or interest 

therein, in connection with any transaction in 

which the Corporation exercises its authority 

under section 11 or 13, shall be enforceable 

against or impose any liability on such person, 

as such enforcement or liability shall be contrary to public policy.’’. 

(d) TECHNICAL AND CONFORMING AMENDMENTS.—Section 18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) is amended— 

(1) in subsection (a)(3)— 

(A) by striking ‘‘this subsection’’ the first 

place that term appears and inserting ‘‘paragraph (1)’’; and 

(B) by striking ‘‘this subsection’’ the second 

place that term appears and inserting ‘‘paragraph (2)’’; and 

(2) in the heading for subsection (a), by striking ‘‘INSURANCE LOGO.—’’ and inserting ‘‘REPRESENTATIONS OF DEPOSIT INSURANCE.—’’. 

SEC. 127. COOPERATION WITH THE FBI. 

Any Federal financial regulatory agency shall 

cooperate with the Federal Bureau of Investigation and other law enforcement agencies investigating fraud, misrepresentation, and malfeasance with respect to development, advertising, 

and sale of financial products. 

SEC. 128. ACCELERATION OF EFFECTIVE DATE. 

Section 203 of the Financial Services Regulatory Relief Act of 2006 (12 U.S.C. 461 note) is 

amended by striking ‘‘October 1, 2011’’ and inserting ‘‘October 1, 2008’’. 

SEC. 129. DISCLOSURES ON EXERCISE OF LOAN 

AUTHORITY. 

(a) IN GENERAL.—Not later than 7 days after 

the date on which the Board exercises its authority under the third paragraph of section 13 

of the Federal Reserve Act (12 U.S.C. 343; relating to discounts for individuals, partnerships, 

and corporations) the Board shall provide to the 

Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a 

report which includes— 

(1) the justification for exercising the authority; and 

(2) the specific terms of the actions of the 

Board, including the size and duration of the 

lending, available information concerning the 

value of any collateral held with respect to such 

a loan, the recipient of warrants or any other 

potential equity in exchange for the loan, and 

any expected cost to the taxpayers for such exercise. 

(b) PERIODIC UPDATES.—The Board shall provide updates to the Committees specified in subsection (a) not less frequently than once every 

60 days while the subject loan is outstanding, 

including— 

(1) the status of the loan; 

(2) the value of the collateral held by the Federal reserve bank which initiated the loan; and 

(3) the projected cost to the taxpayers of the 

loan. 

(c) CONFIDENTIALITY.—The information submitted to the Congress under this section shall 

be kept confidential, upon the written request of 

the Chairman of the Board, in which case it 

shall be made available only to the Chairpersons 

and Ranking Members of the Committees described in subsection (a). 


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October 3, 2008 CONGRESSIONAL RECORD — HOUSE H10721 

(d) APPLICABILITY.—The provisions of this 

section shall be in force for all uses of the authority provided under section 13 of the Federal 

Reserve Act occurring during the period beginning on March 1, 2008 and ending on the after 

the date of enactment of this Act, and reports 

described in subsection (a) shall be required beginning not later than 30 days after that date of 

enactment, with respect to any such exercise of 

authority. 

(e) SHARING OF INFORMATION.—Any reports 

required under this section shall also be submitted to the Congressional Oversight Panel established under section 125. 

SEC. 130. TECHNICAL CORRECTIONS. 

(a) IN GENERAL.—Section 128(b)(2) of the 

Truth in Lending Act (15 U.S.C. 1638(b)(2)), as 

amended by section 2502 of the Mortgage Disclosure Improvement Act of 2008 (Public Law 110– 

289), is amended— 

(1) in subparagraph (A), by striking ‘‘In the 

case’’ and inserting ‘‘Except as provided in subparagraph (G), in the case’’; and 

(2) by amending subparagraph (G) to read as 

follows: 

‘‘(G)(i) In the case of an extension of credit 

relating to a plan described in section 101(53D) 

of title 11, United States Code— 

‘‘(I) the requirements of subparagraphs (A) 

through (E) shall not apply; and 

‘‘(II) a good faith estimate of the disclosures 

required under subsection (a) shall be made in 

accordance with regulations of the Board under 

section 121(c) before such credit is extended, or 

shall be delivered or placed in the mail not later 

than 3 business days after the date on which the 

creditor receives the written application of the 

consumer for such credit, whichever is earlier. 

‘‘(ii) If a disclosure statement furnished within 3 business days of the written application (as 

provided under clause (i)(II)) contains an annual percentage rate which is subsequently rendered inaccurate, within the meaning of section 

107(c), the creditor shall furnish another disclosure statement at the time of settlement or consummation of the transaction.’’. 

(b) EFFECTIVE DATE.—The amendments made 

by subsection (a) shall take effect as if included 

in the amendments made by section 2502 of the 

Mortgage Disclosure Improvement Act of 2008 

(Public Law 110–289). 

SEC. 131. EXCHANGE STABILIZATION FUND REIMBURSEMENT. 

(a) REIMBURSEMENT.—The Secretary shall reimburse the Exchange Stabilization Fund established under section 5302 of title 31, United 

States Code, for any funds that are used for the 

Treasury Money Market Funds Guaranty Program for the United States money market mutual fund industry, from funds under this Act. 

(b) LIMITS ON USE OF EXCHANGE STABILIZATION FUND.—The Secretary is prohibited from 

using the Exchange Stabilization Fund for the 

establishment of any future guaranty programs 

for the United States money market mutual 

fund industry. 

SEC. 132. AUTHORITY TO SUSPEND MARK-TO-MARKET ACCOUNTING. 

(a) AUTHORITY.—The Securities and Exchange 

Commission shall have the authority under the 

securities laws (as such term is defined in section 3(a)(47) of the Securities Exchange Act of 

1934 (15 U.S.C. 78c(a)(47)) to suspend, by rule, 

regulation, or order, the application of Statement Number 157 of the Financial Accounting 

Standards Board for any issuer (as such term is 

defined in section 3(a)(8) of such Act) or with 

respect to any class or category of transaction if 

the Commission determines that is necessary or 

appropriate in the public interest and is consistent with the protection of investors. 

(b) SAVINGS PROVISION.—Nothing in subsection (a) shall be construed to restrict or limit 

any authority of the Securities and Exchange 

Commission under securities laws as in effect on 

the date of enactment of this Act. 

SEC. 133. STUDY ON MARK-TO-MARKET ACCOUNTING. 

(a) STUDY.—The Securities and Exchange 

Commission, in consultation with the Board and 

the Secretary, shall conduct a study on mark-tomarket accounting standards as provided in 

Statement Number 157 of the Financial Accounting Standards Board, as such standards are applicable to financial institutions, including depository institutions. Such a study shall consider at a minimum— 

(1) the effects of such accounting standards 

on a financial institution’s balance sheet; 

(2) the impacts of such accounting on bank 

failures in 2008; 

(3) the impact of such standards on the quality of financial information available to investors; 

(4) the process used by the Financial Accounting Standards Board in developing accounting 

standards; 

(5) the advisability and feasibility of modifications to such standards; and 

(6) alternative accounting standards to those 

provided in such Statement Number 157. 

(b) REPORT.—The Securities and Exchange 

Commission shall submit to Congress a report of 

such study before the end of the 90-day period 

beginning on the date of the enactment of this 

Act containing the findings and determinations 

of the Commission, including such administrative and legislative recommendations as the 

Commission determines appropriate. 

SEC. 134. RECOUPMENT. 

Upon the expiration of the 5-year period beginning upon the date of the enactment of this 

Act, the Director of the Office of Management 

and Budget, in consultation with the Director of 

the Congressional Budget Office, shall submit a 

report to the Congress on the net amount within 

the Troubled Asset Relief Program under this 

Act. In any case where there is a shortfall, the 

President shall submit a legislative proposal 

that recoups from the financial industry an 

amount equal to the shortfall in order to ensure 

that the Troubled Asset Relief Program does not 

add to the deficit or national debt. 

SEC. 135. PRESERVATION OF AUTHORITY. 

With the exception of section 131, nothing in 

this Act may be construed to limit the authority 

of the Secretary or the Board under any other 

provision of law. 

SEC. 136. TEMPORARY INCREASE IN DEPOSIT AND 

SHARE INSURANCE COVERAGE. 

(a) FEDERAL DEPOSIT INSURANCE ACT; TEMPORARY INCREASE IN DEPOSIT INSURANCE.— 

(1) INCREASED AMOUNT.—Effective only during 

the period beginning on the date of enactment 

of this Act and ending on December 31, 2009, 

section 11(a)(1)(E) of the Federal Deposit Insurance Act (12 U.S.C. 1821(a)(1)(E)) shall apply 

with ‘‘$250,000’’ substituted for ‘‘$100,000’’. 

(2) TEMPORARY INCREASE NOT TO BE CONSIDERED FOR SETTING ASSESSMENTS.—The temporary increase in the standard maximum deposit insurance amount made under paragraph 

(1) shall not be taken into account by the Board 

of Directors of the Corporation for purposes of 

setting assessments under section 7(b)(2) of the 

Federal Deposit Insurance Act (12 U.S.C. 

1817(b)(2)). 

(3) BORROWING LIMITS TEMPORARILY LIFTED.— 

During the period beginning on the date of enactment of this Act and ending on December 31, 

2009, the Board of Directors of the Corporation 

may request from the Secretary, and the Secretary shall approve, a loan or loans in an 

amount or amounts necessary to carry out this 

subsection, without regard to the limitations on 

such borrowing under section 14(a) and 15(c) of 

the Federal Deposit Insurance Act (12 U.S.C. 

1824(a), 1825(c)). 

(b) FEDERAL CREDIT UNION ACT; TEMPORARY

INCREASE IN SHARE INSURANCE.— 

(1) INCREASED AMOUNT.—Effective only during 

the period beginning on the date of enactment 

of this Act and ending on December 31, 2009, 

section 207(k)(5) of the Federal Credit Union Act 

(12 U.S.C. 1787(k)(5)) shall apply with 

‘‘$250,000’’ substituted for ‘‘$100,000’’. 

(2) TEMPORARY INCREASE NOT TO BE CONSIDERED FOR SETTING INSURANCE PREMIUM CHARGES

AND INSURANCE DEPOSIT ADJUSTMENTS.—The 

temporary increase in the standard maximum 

share insurance amount made under paragraph 

(1) shall not be taken into account by the National Credit Union Administration Board for 

purposes of setting insurance premium charges 

and share insurance deposit adjustments under 

section 202(c)(2) of the Federal Credit Union Act 

(12 U.S.C. 1782(c)(2)). 

(3) BORROWING LIMITS TEMPORARILY LIFTED.— 

During the period beginning on the date of enactment of this Act and ending on December 31, 

2009, the National Credit Union Administration 

Board may request from the Secretary, and the 

Secretary shall approve, a loan or loans in an 

amount or amounts necessary to carry out this 

subsection, without regard to the limitations on 

such borrowing under section 203(d)(1) of the 

Federal Credit Union Act (12 U.S.C. 1783(d)(1)). 

(c) NOT FOR USE IN INFLATION ADJUSTMENTS.—The temporary increase in the standard 

maximum deposit insurance amount made under 

this section shall not be used to make any inflation adjustment under section 11(a)(1)(F) of the 

Federal Deposit Insurance Act (12 U.S.C. 

1821(a)(1)(F)) for purposes of that Act or the 

Federal Credit Union Act. 

TITLE II—BUDGET-RELATED PROVISIONS 

SEC. 201. INFORMATION FOR CONGRESSIONAL 

SUPPORT AGENCIES. 

Upon request, and to the extent otherwise 

consistent with law, all information used by the 

Secretary in connection with activities authorized under this Act (including the records to 

which the Comptroller General is entitled under 

this Act) shall be made available to congressional support agencies (in accordance with 

their obligations to support the Congress as set 

out in their authorizing statutes) for the purposes of assisting the committees of Congress 

with conducting oversight, monitoring, and 

analysis of the activities authorized under this 

Act. 

SEC. 202. REPORTS BY THE OFFICE OF MANAGEMENT AND BUDGET AND THE CONGRESSIONAL BUDGET OFFICE. 

(a) REPORTS BY THE OFFICE OF MANAGEMENT

AND BUDGET.—Within 60 days of the first exercise of the authority granted in section 101(a), 

but in no case later than December 31, 2008, and 

semiannually thereafter, the Office of Management and Budget shall report to the President 

and the Congress— 

(1) the estimate, notwithstanding section 

502(5)(F) of the Federal Credit Reform Act of 

1990 (2 U.S.C. 661a(5)(F)), as of the first business day that is at least 30 days prior to the 

issuance of the report, of the cost of the troubled 

assets, and guarantees of the troubled assets, 

determined in accordance with section 123; 

(2) the information used to derive the estimate, including assets purchased or guaranteed, 

prices paid, revenues received, the impact on the 

deficit and debt, and a description of any outstanding commitments to purchase troubled assets; and 

(3) a detailed analysis of how the estimate has 

changed from the previous report. 

Beginning with the second report under subsection (a), the Office of Management and 

Budget shall explain the differences between the 

Congressional Budget Office estimates delivered 

in accordance with subsection (b) and prior Office of Management and Budget estimates. 

(b) REPORTS BY THE CONGRESSIONAL BUDGET

OFFICE.—Within 45 days of receipt by the Congress of each report from the Office of Management and Budget under subsection (a), the Congressional Budget Office shall report to the Congress the Congressional Budget Office’s assessment of the report submitted by the Office of 

Management and Budget, including— 


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(1) the cost of the troubled assets and guarantees of the troubled assets, 

(2) the information and valuation methods 

used to calculate such cost, and 

(3) the impact on the deficit and the debt. 

(c) FINANCIAL EXPERTISE.—In carrying out 

the duties in this subsection or performing analyses of activities under this Act, the Director of 

the Congressional Budget Office may employ 

personnel and procure the services of experts 

and consultants. 

(d) AUTHORIZATION OF APPROPRIATIONS.— 

There are authorized to be appropriated such 

sums as may be necessary to produce reports required by this section. 

SEC. 203. ANALYSIS IN PRESIDENT’S BUDGET. 

(a) IN GENERAL.—Section 1105(a) of title 31, 

United States Code, is amended by adding at the 

end the following new paragraph: 

‘‘(35) as supplementary materials, a separate 

analysis of the budgetary effects for all prior fiscal years, the current fiscal year, the fiscal year 

for which the budget is submitted, and ensuing 

fiscal years of the actions the Secretary of the 

Treasury has taken or plans to take using any 

authority provided in the Emergency Economic 

Stabilization Act of 2008, including— 

‘‘(A) an estimate of the current value of all 

assets purchased, sold, and guaranteed under 

the authority provided in the Emergency Economic Stabilization Act of 2008 using methodology required by the Federal Credit Reform Act 

of 1990 (2 U.S.C. 661 et seq.) and section 123 of 

the Emergency Economic Stabilization Act of 

2008; 

‘‘(B) an estimate of the deficit, the debt held 

by the public, and the gross Federal debt using 

methodology required by the Federal Credit Reform Act of 1990 and section 123 of the Emergency Economic Stabilization Act of 2008; 

‘‘(C) an estimate of the current value of all assets purchased, sold, and guaranteed under the 

authority provided in the Emergency Economic 

Stabilization Act of 2008 calculated on a cash 

basis; 

‘‘(D) a revised estimate of the deficit, the debt 

held by the public, and the gross Federal debt, 

substituting the cash-based estimates in subparagraph (C) for the estimates calculated 

under subparagraph (A) pursuant to the Federal Credit Reform Act of 1990 and section 123 of 

the Emergency Economic Stabilization Act of 

2008; and 

‘‘(E) the portion of the deficit which can be 

attributed to any action taken by the Secretary 

using authority provided by the Emergency Economic Stabilization Act of 2008 and the extent to 

which the change in the deficit since the most 

recent estimate is due to a reestimate using the 

methodology required by the Federal Credit Reform Act of 1990 and section 123 of the Emergency Economic Stabilization Act of 2008.’’ 

(b) CONSULTATION.—In implementing this section, the Director of Office of Management and 

Budget shall consult periodically, but at least 

annually, with the Committee on the Budget of 

the House of Representatives, the Committee on 

the Budget of the Senate, and the Director of 

the Congressional Budget Office. 

(c) EFFECTIVE DATE.—This section and the 

amendment made by this section shall apply beginning with respect to the fiscal year 2010 

budget submission of the President. 

SEC. 204. EMERGENCY TREATMENT. 

All provisions of this Act are designated as an 

emergency requirement and necessary to meet 

emergency needs pursuant to section 204(a) of S. 

Con. Res 21 (110th Congress), the concurrent 

resolution on the budget for fiscal year 2008 and 

rescissions of any amounts provided in this Act 

shall not be counted for purposes of budget enforcement. 

TITLE III—TAX PROVISIONS 

SEC. 301. GAIN OR LOSS FROM SALE OR EXCHANGE OF CERTAIN PREFERRED 

STOCK. 

(a) IN GENERAL.—For purposes of the Internal 

Revenue Code of 1986, gain or loss from the sale 

or exchange of any applicable preferred stock by 

any applicable financial institution shall be 

treated as ordinary income or loss. 

(b) APPLICABLE PREFERRED STOCK.—For purposes of this section, the term ‘‘applicable preferred stock’’ means any stock— 

(1) which is preferred stock in— 

(A) the Federal National Mortgage Association, established pursuant to the Federal National Mortgage Association Charter Act (12 

U.S.C. 1716 et seq.), or 

(B) the Federal Home Loan Mortgage Corporation, established pursuant to the Federal 

Home Loan Mortgage Corporation Act (12 

U.S.C. 1451 et seq.), and 

(2) which— 

(A) was held by the applicable financial institution on September 6, 2008, or 

(B) was sold or exchanged by the applicable 

financial institution on or after January 1, 2008, 

and before September 7, 2008. 

(c) APPLICABLE FINANCIAL INSTITUTION.—For 

purposes of this section: 

(1) IN GENERAL.—Except as provided in paragraph (2), the term ‘‘applicable financial institution’’ means— 

(A) a financial institution referred to in section 582(c)(2) of the Internal Revenue Code of 

1986, or 

(B) a depository institution holding company 

(as defined in section 3(w)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1813(w)(1))). 

(2) SPECIAL RULES FOR CERTAIN SALES.—In the 

case of— 

(A) a sale or exchange described in subsection 

(b)(2)(B), an entity shall be treated as an applicable financial institution only if it was an entity described in subparagraph (A) or (B) of paragraph (1) at the time of the sale or exchange, 

and 

(B) a sale or exchange after September 6, 2008, 

of preferred stock described in subsection 

(b)(2)(A), an entity shall be treated as an applicable financial institution only if it was an entity described in subparagraph (A) or (B) of paragraph (1) at all times during the period beginning on September 6, 2008, and ending on the 

date of the sale or exchange of the preferred 

stock. 

(d) SPECIAL RULE FOR CERTAIN PROPERTY NOT

HELD ON SEPTEMBER 6, 2008.—The Secretary of 

the Treasury or the Secretary’s delegate may extend the application of this section to all or a 

portion of the gain or loss from a sale or exchange in any case where— 

(1) an applicable financial institution sells or 

exchanges applicable preferred stock after September 6, 2008, which the applicable financial 

institution did not hold on such date, but the 

basis of which in the hands of the applicable financial institution at the time of the sale or exchange is the same as the basis in the hands of 

the person which held such stock on such date, 

or 

(2) the applicable financial institution is a 

partner in a partnership which— 

(A) held such stock on September 6, 2008, and 

later sold or exchanged such stock, or 

(B) sold or exchanged such stock during the 

period described in subsection (b)(2)(B). 

(e) REGULATORY AUTHORITY.—The Secretary 

of the Treasury or the Secretary’s delegate may 

prescribe such guidance, rules, or regulations as 

are necessary to carry out the purposes of this 

section. 

(f) EFFECTIVE DATE.—This section shall apply 

to sales or exchanges occurring after December 

31, 2007, in taxable years ending after such date. 

SEC. 302. SPECIAL RULES FOR TAX TREATMENT 

OF EXECUTIVE COMPENSATION OF 

EMPLOYERS PARTICIPATING IN THE 

TROUBLED ASSETS RELIEF PROGRAM. 

(a) DENIAL OF DEDUCTION.—Subsection (m) of 

section 162 of the Internal Revenue Code of 1986 

is amended by adding at the end the following 

new paragraph: 

‘‘(5) SPECIAL RULE FOR APPLICATION TO EMPLOYERS PARTICIPATING IN THE TROUBLED ASSETS

RELIEF PROGRAM.— 

‘‘(A) IN GENERAL.—In the case of an applicable employer, no deduction shall be allowed 

under this chapter— 

‘‘(i) in the case of executive remuneration for 

any applicable taxable year which is attributable to services performed by a covered executive during such applicable taxable year, to the 

extent that the amount of such remuneration 

exceeds $500,000, or 

‘‘(ii) in the case of deferred deduction executive remuneration for any taxable year for services performed during any applicable taxable 

year by a covered executive, to the extent that 

the amount of such remuneration exceeds 

$500,000 reduced (but not below zero) by the sum 

of— 

‘‘(I) the executive remuneration for such applicable taxable year, plus 

‘‘(II) the portion of the deferred deduction executive remuneration for such services which 

was taken into account under this clause in a 

preceding taxable year. 

‘‘(B) APPLICABLE EMPLOYER.—For purposes of 

this paragraph— 

‘‘(i) IN GENERAL.—Except as provided in 

clause (ii), the term ‘applicable employer’ means 

any employer from whom 1 or more troubled assets are acquired under a program established 

by the Secretary under section 101(a) of the 

Emergency Economic Stabilization Act of 2008 if 

the aggregate amount of the assets so acquired 

for all taxable years exceeds $300,000,000. 

‘‘(ii) DISREGARD OF CERTAIN ASSETS SOLD

THROUGH DIRECT PURCHASE.—If the only sales of 

troubled assets by an employer under the program described in clause (i) are through 1 or 

more direct purchases (within the meaning of 

section 113(c) of the Emergency Economic Stabilization Act of 2008), such assets shall not be 

taken into account under clause (i) in determining whether the employer is an applicable 

employer for purposes of this paragraph. 

‘‘(iii) AGGREGATION RULES.—Two or more persons who are treated as a single employer under 

subsection (b) or (c) of section 414 shall be treated as a single employer, except that in applying 

section 1563(a) for purposes of either such subsection, paragraphs (2) and (3) thereof shall be 

disregarded. 

‘‘(C) APPLICABLE TAXABLE YEAR.—For purposes of this paragraph, the term ‘applicable 

taxable year’ means, with respect to any employer— 

‘‘(i) the first taxable year of the employer— 

‘‘(I) which includes any portion of the period 

during which the authorities under section 

101(a) of the Emergency Economic Stabilization 

Act of 2008 are in effect (determined under section 120 thereof), and 

‘‘(II) in which the aggregate amount of troubled assets acquired from the employer during 

the taxable year pursuant to such authorities 

(other than assets to which subparagraph (B)(ii) 

applies), when added to the aggregate amount 

so acquired for all preceding taxable years, exceeds $300,000,000, and 

‘‘(ii) any subsequent taxable year which includes any portion of such period. 

‘‘(D) COVERED EXECUTIVE.—For purposes of 

this paragraph— 

‘‘(i) IN GENERAL.—The term ‘covered executive’ means, with respect to any applicable taxable year, any employee— 

‘‘(I) who, at any time during the portion of 

the taxable year during which the authorities 

under section 101(a) of the Emergency Economic 

Stabilization Act of 2008 are in effect (determined under section 120 thereof), is the chief executive officer of the applicable employer or the 

chief financial officer of the applicable employer, or an individual acting in either such 

capacity, or 

‘‘(II) who is described in clause (ii). 

‘‘(ii) HIGHEST COMPENSATED EMPLOYEES.—An 

employee is described in this clause if the employee is 1 of the 3 highest compensated officers 

of the applicable employer for the taxable year 

(other than an individual described in clause 

(i)(I)), determined— 


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October 3, 2008 CONGRESSIONAL RECORD — HOUSE H10723 

‘‘(I) on the basis of the shareholder disclosure 

rules for compensation under the Securities Exchange Act of 1934 (without regard to whether 

those rules apply to the employer), and 

‘‘(II) by only taking into account employees 

employed during the portion of the taxable year 

described in clause (i)(I). 

‘‘(iii) EMPLOYEE REMAINS COVERED EXECUTIVE.—If an employee is a covered executive 

with respect to an applicable employer for any 

applicable taxable year, such employee shall be 

treated as a covered executive with respect to 

such employer for all subsequent applicable taxable years and for all subsequent taxable years 

in which deferred deduction executive remuneration with respect to services performed in 

all such applicable taxable years would (but for 

this paragraph) be deductible. 

‘‘(E) EXECUTIVE REMUNERATION.—For purposes of this paragraph, the term ‘executive remuneration’ means the applicable employee remuneration of the covered executive, as determined under paragraph (4) without regard to 

subparagraphs (B), (C), and (D) thereof. Such 

term shall not include any deferred deduction 

executive remuneration with respect to services 

performed in a prior applicable taxable year. 

‘‘(F) DEFERRED DEDUCTION EXECUTIVE REMUNERATION.—For purposes of this paragraph, the 

term ‘deferred deduction executive remuneration’ means remuneration which would be executive remuneration for services performed in an 

applicable taxable year but for the fact that the 

deduction under this chapter (determined without regard to this paragraph) for such remuneration is allowable in a subsequent taxable 

year. 

‘‘(G) COORDINATION.—Rules similar to the 

rules of subparagraphs (F) and (G) of paragraph (4) shall apply for purposes of this paragraph. 

‘‘(H) REGULATORY AUTHORITY.—The Secretary 

may prescribe such guidance, rules, or regulations as are necessary to carry out the purposes 

of this paragraph and the Emergency Economic 

Stabilization Act of 2008, including the extent to 

which this paragraph applies in the case of any 

acquisition, merger, or reorganization of an applicable employer.’’. 

(b) GOLDEN PARACHUTE RULE.—Section 280G 

of the Internal Revenue Code of 1986 is amended— 

(1) by redesignating subsection (e) as subsection (f), and 

(2) by inserting after subsection (d) the following new subsection: 

‘‘(e) SPECIAL RULE FOR APPLICATION TO EMPLOYERS PARTICIPATING IN THE TROUBLED ASSETS RELIEF PROGRAM.— 

‘‘(1) IN GENERAL.—In the case of the severance 

from employment of a covered executive of an 

applicable employer during the period during 

which the authorities under section 101(a) of the 

Emergency Economic Stabilization Act of 2008 

are in effect (determined under section 120 of 

such Act), this section shall be applied to payments to such executive with the following 

modifications: 

‘‘(A) Any reference to a disqualified individual (other than in subsection (c)) shall be 

treated as a reference to a covered executive. 

‘‘(B) Any reference to a change described in 

subsection (b)(2)(A)(i) shall be treated as a reference to an applicable severance from employment of a covered executive, and any reference 

to a payment contingent on such a change shall 

be treated as a reference to any payment made 

during an applicable taxable year of the employer on account of such applicable severance 

from employment. 

‘‘(C) Any reference to a corporation shall be 

treated as a reference to an applicable employer. 

‘‘(D) The provisions of subsections (b)(2)(C), 

(b)(4), (b)(5), and (d)(5) shall not apply. 

‘‘(2) DEFINITIONS AND SPECIAL RULES.—For 

purposes of this subsection: 

‘‘(A) DEFINITIONS.—Any term used in this subsection which is also used in section 162(m)(5) 

shall have the meaning given such term by such 

section. 

‘‘(B) APPLICABLE SEVERANCE FROM EMPLOYMENT.—The term ‘applicable severance from employment’ means any severance from employment of a covered executive— 

‘‘(i) by reason of an involuntary termination 

of the executive by the employer, or 

‘‘(ii) in connection with any bankruptcy, liquidation, or receivership of the employer. 

‘‘(C) COORDINATION AND OTHER RULES.— 

‘‘(i) IN GENERAL.—If a payment which is treated as a parachute payment by reason of this 

subsection is also a parachute payment determined without regard to this subsection, this 

subsection shall not apply to such payment. 

‘‘(ii) REGULATORY AUTHORITY.—The Secretary 

may prescribe such guidance, rules, or regulations as are necessary— 

‘‘(I) to carry out the purposes of this subsection and the Emergency Economic Stabilization Act of 2008, including the extent to which 

this subsection applies in the case of any acquisition, merger, or reorganization of an applicable employer, 

‘‘(II) to apply this section and section 4999 in 

cases where one or more payments with respect 

to any individual are treated as parachute payments by reason of this subsection, and other 

payments with respect to such individual are 

treated as parachute payments under this section without regard to this subsection, and 

‘‘(III) to prevent the avoidance of the application of this section through the 

mischaracterization of a severance from employment as other than an applicable severance from 

employment.’’. 

(c) EFFECTIVE DATES.— 

(1) IN GENERAL.—The amendment made by 

subsection (a) shall apply to taxable years ending on or after the date of the enactment of this 

Act. 

(2) GOLDEN PARACHUTE RULE.—The amendments made by subsection (b) shall apply to 

payments with respect to severances occurring 

during the period during which the authorities 

under section 101(a) of this Act are in effect (determined under section 120 of this Act). 

SEC. 303. EXTENSION OF EXCLUSION OF INCOME 

FROM DISCHARGE OF QUALIFIED 

PRINCIPAL RESIDENCE INDEBTEDNESS. 

(a) EXTENSION.—Subparagraph (E) of section 

108(a)(1) of the Internal Revenue Code of 1986 is 

amended by striking ‘‘January 1, 2010’’ and inserting ‘‘January 1, 2013’’. 

(b) EFFECTIVE DATE.—The amendment made 

by this section shall apply to discharges of indebtedness occurring on or after January 1, 

2010. 

DIVISION B—ENERGY IMPROVEMENT AND 

EXTENSION ACT OF 2008 

SECTION 1. SHORT TITLE, ETC. 

(a) SHORT TITLE.—This division may be cited 

as the ‘‘Energy Improvement and Extension Act 

of 2008’’. 

(b) REFERENCE.—Except as otherwise expressly provided, whenever in this division 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 division is as follows: 

Sec. 1. Short title, etc. 

TITLE I—ENERGY PRODUCTION 

INCENTIVES 

Subtitle A—Renewable Energy Incentives 

Sec. 101. Renewable energy credit. 

Sec. 102. Production credit for electricity produced from marine renewables. 

Sec. 103. Energy credit. 

Sec. 104. Energy credit for small wind property. 

Sec. 105. Energy credit for geothermal heat 

pump systems. 

Sec. 106. Credit for residential energy efficient 

property. 

Sec. 107. New clean renewable energy bonds. 

Sec. 108. Credit for steel industry fuel. 

Sec. 109. Special rule to implement FERC and 

State electric restructuring policy. 

Subtitle B—Carbon Mitigation and Coal 

Provisions 

Sec. 111. Expansion and modification of advanced coal project investment 

credit. 

Sec. 112. Expansion and modification of coal 

gasification investment credit. 

Sec. 113. Temporary increase in coal excise tax; 

funding of Black Lung Disability 

Trust Fund. 

Sec. 114. Special rules for refund of the coal excise tax to certain coal producers 

and exporters. 

Sec. 115. Tax credit for carbon dioxide sequestration. 

Sec. 116. Certain income and gains relating to 

industrial source carbon dioxide 

treated as qualifying income for 

publicly traded partnerships. 

Sec. 117. Carbon audit of the tax code. 

TITLE II—TRANSPORTATION AND 

DOMESTIC FUEL SECURITY PROVISIONS 

Sec. 201. Inclusion of cellulosic biofuel in bonus 

depreciation for biomass ethanol 

plant property. 

Sec. 202. Credits for biodiesel and renewable 

diesel. 

Sec. 203. Clarification that credits for fuel are 

designed to provide an incentive 

for United States production. 

Sec. 204. Extension and modification of alternative fuel credit. 

Sec. 205. Credit for new qualified plug-in electric drive motor vehicles. 

Sec. 206. Exclusion from heavy truck tax for 

idling reduction units and advanced insulation. 

Sec. 207. Alternative fuel vehicle refueling property credit. 

Sec. 208. Certain income and gains relating to 

alcohol fuels and mixtures, biodiesel fuels and mixtures, and alternative fuels and mixtures treated as qualifying income for publicly traded partnerships. 

Sec. 209. Extension and modification of election 

to expense certain refineries. 

Sec. 210. Extension of suspension of taxable income limit on percentage depletion 

for oil and natural gas produced 

from marginal properties. 

Sec. 211. Transportation fringe benefit to bicycle commuters. 

TITLE III—ENERGY CONSERVATION AND 

EFFICIENCY PROVISIONS 

Sec. 301. Qualified energy conservation bonds. 

Sec. 302. Credit for nonbusiness energy property. 

Sec. 303. Energy efficient commercial buildings 

deduction. 

Sec. 304. New energy efficient home credit. 

Sec. 305. Modifications of energy efficient appliance credit for appliances produced after 2007. 

Sec. 306. Accelerated recovery period for depreciation of smart meters and smart 

grid systems. 

Sec. 307. Qualified green building and sustainable design projects. 

Sec. 308. Special depreciation allowance for certain reuse and recycling property. 

TITLE IV—REVENUE PROVISIONS 

Sec. 401. Limitation of deduction for income attributable to domestic production 

of oil, gas, or primary products 

thereof. 

Sec. 402. Elimination of the different treatment 

of foreign oil and gas extraction 

income and foreign oil related income for purposes of the foreign 

tax credit. 


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Sec. 403. Broker reporting of customer’s basis in 

securities transactions. 

Sec. 404. 0.2 percent FUTA surtax. 

Sec. 405. Increase and extension of Oil Spill Liability Trust Fund tax. 

TITLE I—ENERGY PRODUCTION 

INCENTIVES 

Subtitle A—Renewable Energy Incentives 

SEC. 101. RENEWABLE ENERGY CREDIT. 

(a) EXTENSION OF CREDIT.— 

(1) 1-YEAR EXTENSION FOR WIND AND REFINED

COAL FACILITIES.—Paragraphs (1) and (8) of section 45(d) are each amended by striking ‘‘January 1, 2009’’ and inserting ‘‘January 1, 2010’’. 

(2) 2-YEAR EXTENSION FOR CERTAIN OTHER FACILITIES.—Each of the following provisions of 

section 45(d) is amended by striking ‘‘January 1, 

2009’’ and inserting ‘‘January 1, 2011’’: 

(A) Clauses (i) and (ii) of paragraph (2)(A). 

(B) Clauses (i)(I) and (ii) of paragraph (3)(A). 

(C) Paragraph (4). 

(D) Paragraph (5). 

(E) Paragraph (6). 

(F) Paragraph (7). 

(G) Subparagraphs (A) and (B) of paragraph 

(9). 

(b) MODIFICATION OF REFINED COAL AS A

QUALIFIED ENERGY RESOURCE.— 

(1) ELIMINATION OF INCREASED MARKET VALUE

TEST.—Section 45(c)(7)(A)(i) (defining refined 

coal), as amended by section 108, is amended— 

(A) by striking subclause (IV), 

(B) by adding ‘‘and’’ at the end of subclause 

(II), and 

(C) by striking ‘‘, and’’ at the end of subclause (III) and inserting a period. 

(2) INCREASE IN REQUIRED EMISSION REDUCTION.—Section 45(c)(7)(B) (defining qualified 

emission reduction) is amended by inserting ‘‘at 

least 40 percent of the emissions of’’ after ‘‘nitrogen oxide and’’. 

(c) 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’’. 

(d) EXPANSION OF BIOMASS FACILITIES.— 

(1) OPEN-LOOP BIOMASS FACILITIES.—Paragraph (3) of section 45(d) is amended by redesignating subparagraph (B) as subparagraph (C) 

and by inserting after subparagraph (A) the following new subparagraph: 

‘‘(B) EXPANSION OF FACILITY.—Such term 

shall include a new unit placed in service after 

the date of the enactment of this subparagraph 

in connection with a facility described in subparagraph (A), but only to the extent of the increased amount of electricity produced at the facility by reason of such new unit.’’. 

(2) CLOSED-LOOP BIOMASS FACILITIES.—Paragraph (2) of section 45(d) is amended by redesignating subparagraph (B) as subparagraph (C) 

and inserting after subparagraph (A) the following new subparagraph: 

‘‘(B) EXPANSION OF FACILITY.—Such term 

shall include a new unit placed in service after 

the date of the enactment of this subparagraph 

in connection with a facility described in subparagraph (A)(i), but only to the extent of the 

increased amount of electricity produced at the 

facility by reason of such new unit.’’. 

(e) MODIFICATION OF RULES FOR HYDROPOWER

PRODUCTION.—Subparagraph (C) of section 

45(c)(8) is amended to read as follows: 

‘‘(C) NONHYDROELECTRIC DAM.—For purposes 

of subparagraph (A), a facility is described in 

this subparagraph if— 

‘‘(i) the hydroelectric project installed on the 

nonhydroelectric dam is licensed by the Federal 

Energy Regulatory Commission and meets all 

other applicable environmental, licensing, and 

regulatory requirements, 

‘‘(ii) the nonhydroelectric dam was placed in 

service before the date of the enactment of this 

paragraph and operated for flood control, navigation, or water supply purposes and did not 

produce hydroelectric power on the date of the 

enactment of this paragraph, and 

‘‘(iii) the hydroelectric project is operated so 

that the water surface elevation at any given location and time that would have occurred in the 

absence of the hydroelectric project is maintained, subject to any license requirements imposed under applicable law that change the 

water surface elevation for the purpose of improving environmental quality of the affected 

waterway. 

The Secretary, in consultation with the Federal 

Energy Regulatory Commission, shall certify if a 

hydroelectric project licensed at a nonhydroelectric dam meets the criteria in clause (iii). 

Nothing in this section shall affect the standards under which the Federal Energy Regulatory Commission issues licenses for and regulates hydropower projects under part I of the 

Federal Power Act.’’. 

(f) EFFECTIVE DATE.— 

(1) IN GENERAL.—Except as otherwise provided 

in this subsection, the amendments made by this 

section shall apply to property originally placed 

in service after December 31, 2008. 

(2) REFINED COAL.—The amendments made by 

subsection (b) shall apply to coal produced and 

sold from facilities placed in service after December 31, 2008. 

(3) TRASH FACILITY CLARIFICATION.—The 

amendments made by subsection (c) shall apply 

to electricity produced and sold after the date of 

the enactment of this Act. 

(4) EXPANSION OF BIOMASS FACILITIES.—The 

amendments made by subsection (d) shall apply 

to property placed in service after the date of 

the enactment of this Act. 

SEC. 102. PRODUCTION CREDIT FOR ELECTRICITY 

PRODUCED FROM MARINE RENEWABLES. 

(a) IN GENERAL.—Paragraph (1) of section 

45(c) 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.’’. 

(b) 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.’’. 

(c) 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, 2012.’’. 

(d) CREDIT RATE.—Subparagraph (A) of section 45(b)(4) is amended by striking ‘‘or (9)’’ and 

inserting ‘‘(9), or (11)’’. 

(e) COORDINATION WITH SMALL IRRIGATION

POWER.—Paragraph (5) of section 45(d), as 

amended by section 101, is amended by striking 

‘‘January 1, 2012’’ and inserting ‘‘the date of 

the enactment of paragraph (11)’’. 

(f) EFFECTIVE DATE.—The amendments made 

by this section shall apply to electricity produced and sold after the date of the enactment 

of this Act, in taxable years ending after such 

date. 

SEC. 103. ENERGY CREDIT. 

(a) EXTENSION OF CREDIT.— 

(1) SOLAR ENERGY PROPERTY.—Paragraphs 

(2)(A)(i)(II) and (3)(A)(ii) of section 48(a) are 

each amended by striking ‘‘January 1, 2009’’ 

and inserting ‘‘January 1, 2017’’. 

(2) FUEL CELL PROPERTY.—Subparagraph (E) 

of section 48(c)(1) is amended by striking ‘‘December 31, 2008’’ and inserting ‘‘December 31, 

2016’’. 

(3) MICROTURBINE PROPERTY.—Subparagraph 

(E) of section 48(c)(2) is amended by striking 

‘‘December 31, 2008’’ and inserting ‘‘December 

31, 2016’’. 

(b) ALLOWANCE OF ENERGY CREDIT AGAINST

ALTERNATIVE MINIMUM TAX.— 

(1) IN GENERAL.—Subparagraph (B) of section 

38(c)(4), as amended by the Housing Assistance 

Tax Act of 2008, is amended by redesignating 

clause (vi) as clause (vi) and (vii), respectively, 

and by inserting after clause (iv) 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,’’. 

(2) TECHNICAL AMENDMENT.—Clause (vi) of 

section 38(c)(4)(B), as redesignated by paragraph (1), is amended by striking ‘‘section 47 to 

the extent attributable to’’ and inserting ‘‘section 46 to the extent that such credit is attributable to the rehabilitation credit under section 

47, but only with respect to’’. 

(c) ENERGY CREDIT FOR COMBINED HEAT AND

POWER SYSTEM PROPERTY.— 

(1) IN GENERAL.—Section 48(a)(3)(A) is amended by striking ‘‘or’’ at the end of clause (iii), by 

inserting ‘‘or’’ at the end of clause (iv), and by 

adding at the end the following new clause: 

‘‘(v) combined heat and power system property,’’. 

(2) COMBINED HEAT AND POWER SYSTEM PROPERTY.—Subsection (c) of section 48 is amended— 

(A) by striking ‘‘QUALIFIED FUEL CELL PROPERTY; QUALIFIED MICROTURBINE PROPERTY’’ in 

the heading and inserting ‘‘DEFINITIONS’’, and 

(B) by adding at the end the following new 

paragraph: 

‘‘(3) COMBINED HEAT AND POWER SYSTEM

PROPERTY.— 

‘‘(A) COMBINED HEAT AND POWER SYSTEM

PROPERTY.—The term ‘combined heat and power 

system property’ means property comprising a 

system— 

‘‘(i) which uses the same energy source for the 

simultaneous or sequential generation of electrical power, mechanical shaft power, or both, 

in combination with the generation of steam or 

other forms of useful thermal energy (including 

heating and cooling applications), 

‘‘(ii) which produces— 

‘‘(I) at least 20 percent of its total useful energy in the form of thermal energy which is not 

used to produce electrical or mechanical power 

(or combination thereof), and 

‘‘(II) at least 20 percent of its total useful energy in the form of electrical or mechanical 

power (or combination thereof), 

‘‘(iii) the energy efficiency percentage of 

which exceeds 60 percent, and 

‘‘(iv) which is placed in service before January 

1, 2017. 

‘‘(B) LIMITATION.— 

‘‘(i) IN GENERAL.—In the case of combined 

heat and power system property with an electrical capacity in excess of the applicable capacity placed in service during the taxable year, the 

credit under subsection (a)(1) (determined without regard to this paragraph) for such year 


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shall be equal to the amount which bears the 

same ratio to such credit as the applicable capacity bears to the capacity of such property. 

‘‘(ii) APPLICABLE CAPACITY.—For purposes of 

clause (i), the term ‘applicable capacity’ means 

15 megawatts or a mechanical energy capacity 

of more than 20,000 horsepower or an equivalent 

combination of electrical and mechanical energy 

capacities. 

‘‘(iii) MAXIMUM CAPACITY.—The term ‘combined heat and power system property’ shall not 

include any property comprising a system if 

such system has a capacity in excess of 50 

megawatts or a mechanical energy capacity in 

excess of 67,000 horsepower or an equivalent 

combination of electrical and mechanical energy 

capacities. 

‘‘(C) SPECIAL RULES.— 

‘‘(i) ENERGY EFFICIENCY PERCENTAGE.—For 

purposes of this paragraph, the energy efficiency percentage of a system is the fraction— 

‘‘(I) the numerator of which is the total useful 

electrical, thermal, and mechanical power produced by the system at normal operating rates, 

and expected to be consumed in its normal application, and 

‘‘(II) the denominator of which is the lower 

heating value of the fuel sources for the system. 

‘‘(ii) DETERMINATIONS MADE ON BTU BASIS.— 

The energy efficiency percentage and the percentages under subparagraph (A)(ii) shall be determined on a Btu basis. 

‘‘(iii) INPUT AND OUTPUT PROPERTY NOT INCLUDED.—The term ‘combined heat and power 

system property’ does not include property used 

to transport the energy source to the facility or 

to distribute energy produced by the facility. 

‘‘(D) SYSTEMS USING BIOMASS.—If a system is 

designed to use biomass (within the meaning of 

paragraphs (2) and (3) of section 45(c) without 

regard to the last sentence of paragraph (3)(A)) 

for at least 90 percent of the energy source— 

‘‘(i) subparagraph (A)(iii) shall not apply, but 

‘‘(ii) the amount of credit determined under 

subsection (a) with respect to such system shall 

not exceed the amount which bears the same 

ratio to such amount of credit (determined without regard to this subparagraph) as the energy 

efficiency percentage of such system bears to 60 

percent.’’. 

(3) CONFORMING AMENDMENT.—Section 

48(a)(1) is amended by striking ‘‘paragraphs 

(1)(B) and (2)(B)’’ and inserting ‘‘paragraphs 

(1)(B), (2)(B), and (3)(B)’’. 

(d) INCREASE OF CREDIT LIMITATION FOR FUEL

CELL PROPERTY.—Subparagraph (B) of section 

48(c)(1) is amended by striking ‘‘$500’’ and inserting ‘‘$1,500’’. 

(e) PUBLIC 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) is amended 

by striking subparagraph (D) and redesignating 

subparagraph (E) as subparagraph (D). 

(B) Paragraph (2) of section 48(c) is amended 

by striking subparagraph (D) and redesignating 

subparagraph (E) as subparagraph (D). 

(f) EFFECTIVE DATE.— 

(1) IN GENERAL.—Except as otherwise provided 

in this subsection, the amendments made by this 

section 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) COMBINED HEAT AND POWER AND FUEL CELL

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). 

(4) PUBLIC UTILITY PROPERTY.—The amendments made by subsection (e) shall apply to periods after February 13, 2008, 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. 104. ENERGY CREDIT FOR SMALL WIND 

PROPERTY. 

(a) IN GENERAL.—Section 48(a)(3)(A), as 

amended by section 103, is amended by striking 

‘‘or’’ at the end of clause (iv), by adding ‘‘or’’ 

at the end of clause (v), and by inserting after 

clause (v) the following new clause: 

‘‘(vi) qualified small wind energy property,’’. 

(b) 30 PERCENT CREDIT.—Section 48(a)(2)(A)(i) 

is amended by striking ‘‘and’’ at the end of subclause (II) and by inserting after subclause (III) 

the following new subclause: 

‘‘(IV) qualified small wind energy property, 

and’’. 

(c) QUALIFIED SMALL WIND ENERGY PROPERTY.—Section 48(c), as amended by section 103, 

is amended by adding at the end the following 

new paragraph: 

‘‘(4) QUALIFIED SMALL WIND ENERGY PROPERTY.— 

‘‘(A) IN GENERAL.—The term ‘qualified small 

wind energy property’ means property which 

uses a qualifying small wind turbine to generate 

electricity. 

‘‘(B) LIMITATION.—In the case of qualified 

small wind energy property placed in service 

during the taxable year, the credit otherwise determined under subsection (a)(1) for such year 

with respect to all such property of the taxpayer 

shall not exceed $4,000. 

‘‘(C) QUALIFYING SMALL WIND TURBINE.—The 

term ‘qualifying small wind turbine’ means a 

wind turbine which has a nameplate capacity of 

not more than 100 kilowatts. 

‘‘(D) TERMINATION.—The term ‘qualified small 

wind energy property’ shall not include any 

property for any period after December 31, 

2016.’’. 

(d) CONFORMING AMENDMENT.—Section 

48(a)(1), as amended by section 103, is amended 

by striking ‘‘paragraphs (1)(B), (2)(B), and 

(3)(B)’’ and inserting ‘‘paragraphs (1)(B), 

(2)(B), (3)(B), and (4)(B)’’. 

(e) EFFECTIVE DATE.—The amendments made 

by this section 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. 105. ENERGY CREDIT FOR GEOTHERMAL 

HEAT PUMP SYSTEMS. 

(a) IN GENERAL.—Subparagraph (A) of section 

48(a)(3), as amended by this Act, is amended by 

striking ‘‘or’’ at the end of clause (v), by inserting ‘‘or’’ at the end of clause (vi), and by adding at the end the following new clause: 

‘‘(vii) equipment which uses the ground or 

ground water as a thermal energy source to heat 

a structure or as a thermal energy sink to cool 

a structure, but only with respect to periods 

ending before January 1, 2017,’’. 

(b) EFFECTIVE DATE.—The amendments made 

by this section 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. 106. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY. 

(a) EXTENSION.—Section 25D(g) is amended by 

striking ‘‘December 31, 2008’’ and inserting ‘‘December 31, 2016’’. 

(b) REMOVAL OF LIMITATION FOR SOLAR ELECTRIC PROPERTY.— 

(1) IN GENERAL.—Section 25D(b)(1), as amended by subsections (c) and (d), is amended— 

(A) by striking subparagraph (A), and 

(B) by redesignating subparagraphs (B) 

through (E) as subparagraphs (A) through and 

(D), respectively. 

(2) CONFORMING AMENDMENT.—Section 

25D(e)(4)(A), as amended by subsections (c) and 

(d), is amended— 

(A) by striking clause (i), and 

(B) by redesignating clauses (ii) through (v) 

as clauses (i) and (iv), respectively. 

(c) CREDIT FOR RESIDENTIAL WIND PROPERTY.— 

(1) IN GENERAL.—Section 25D(a) is amended 

by striking ‘‘and’’ at the end of paragraph (2), 

by striking the period at the end of paragraph 

(3) and inserting ‘‘, and’’, and by adding at the 

end the following new paragraph: 

‘‘(4) 30 percent of the qualified small wind energy property expenditures made by the taxpayer during such year.’’. 

(2) LIMITATION.—Section 25D(b)(1) is amended 

by striking ‘‘and’’ at the end of subparagraph 

(B), by striking the period at the end of subparagraph (C) and inserting ‘‘, and’’, and by 

adding at the end the following new subparagraph: 

‘‘(D) $500 with respect to each half kilowatt of 

capacity (not to exceed $4,000) of wind turbines 

for which qualified small wind energy property 

expenditures are made.’’. 

(3) QUALIFIED SMALL WIND ENERGY PROPERTY

EXPENDITURES.— 

(A) IN GENERAL.—Section 25D(d) is amended 

by adding at the end the following new paragraph: 

‘‘(4) QUALIFIED SMALL WIND ENERGY PROPERTY

EXPENDITURE.—The term ‘qualified small wind 

energy property expenditure’ means an expenditure for property which uses a wind turbine to 

generate electricity for use in connection with a 

dwelling unit located in the United States and 

used as a residence by the taxpayer.’’. 

(B) NO DOUBLE BENEFIT.—Section 45(d)(1) is 

amended by adding at the end the following 

new sentence: ‘‘Such term shall not include any 

facility with respect to which any qualified 

small wind energy property expenditure (as defined in subsection (d)(4) of section 25D) is 

taken into account in determining the credit 

under such section.’’. 

(4) MAXIMUM EXPENDITURES IN CASE OF JOINT

OCCUPANCY.—Section 25D(e)(4)(A) is amended 

by striking ‘‘and’’ at the end of clause (ii), by 

striking the period at the end of clause (iii) and 

inserting ‘‘, and’’, and by adding at the end the 

following new clause: 

‘‘(iv) $1,667 in the case of each half kilowatt 

of capacity (not to exceed $13,333) of wind turbines for which qualified small wind energy 

property expenditures are made.’’. 

(d) CREDIT FOR GEOTHERMAL HEAT PUMP SYSTEMS.— 

(1) IN GENERAL.—Section 25D(a), as amended 

by subsection (c), is amended by striking ‘‘and’’ 

at the end of paragraph (3), by striking the period at the end of paragraph (4) and inserting ‘‘, 

and’’, and by adding at the end the following 

new paragraph: 

‘‘(5) 30 percent of the qualified geothermal 

heat pump property expenditures made by the 

taxpayer during such year.’’. 

(2) LIMITATION.—Section 25D(b)(1), as amended by subsection (c), is amended by striking 

‘‘and’’ at the end of subparagraph (C), by striking the period at the end of subparagraph (D) 

and inserting ‘‘, and’’, and by adding at the end 

the following new subparagraph: 

‘‘(E) $2,000 with respect to any qualified geothermal heat pump property expenditures.’’. 

(3) QUALIFIED GEOTHERMAL HEAT PUMP PROPERTY EXPENDITURE.—Section 25D(d), as amended by subsection (c), is amended by adding at 

the end the following new paragraph: 

‘‘(5) QUALIFIED GEOTHERMAL HEAT PUMP

PROPERTY EXPENDITURE.— 


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‘‘(A) IN GENERAL.—The term ‘qualified geothermal heat pump property expenditure’ means 

an expenditure for qualified geothermal heat 

pump property installed on or in connection 

with a dwelling unit located in the United 

States and used as a residence by the taxpayer. 

‘‘(B) QUALIFIED GEOTHERMAL HEAT PUMP

PROPERTY.—The term ‘qualified geothermal heat 

pump property’ means any equipment which— 

‘‘(i) uses the ground or ground water as a 

thermal energy source to heat the dwelling unit 

referred to in subparagraph (A) or as a thermal 

energy sink to cool such dwelling unit, and 

‘‘(ii) meets the requirements of the Energy 

Star program which are in effect at the time 

that the expenditure for such equipment is 

made.’’. 

(4) MAXIMUM EXPENDITURES IN CASE OF JOINT

OCCUPANCY.—Section 25D(e)(4)(A), as amended 

by subsection (c), 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) $6,667 in the case of any qualified geothermal heat pump property expenditures.’’. 

(e) 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’’. 

(f) EFFECTIVE DATE.— 

(1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by this section 

shall apply to taxable years beginning after December 31, 2007. 

(2) SOLAR ELECTRIC PROPERTY LIMITATION.— 

The amendments made by subsection (b) shall 

apply to taxable years beginning after December 

31, 2008. 

(3) APPLICATION OF EGTRRA SUNSET.—The 

amendments made by subparagraphs (A) and 

(B) of subsection (e)(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. 107. NEW CLEAN RENEWABLE ENERGY 

BONDS. 

(a) IN GENERAL.—Subpart I of part IV of subchapter A of chapter 1 is amended by adding at 

the end the following new section: 

‘‘SEC. 54C. NEW CLEAN RENEWABLE ENERGY 

BONDS. 

‘‘(a) NEW CLEAN RENEWABLE ENERGY BOND.— 

For purposes of this subpart, the term ‘new 

clean renewable energy bond’ means any bond 

issued as part of an issue if— 

‘‘(1) 100 percent of the available project proceeds of such issue are to be used for capital expenditures incurred by governmental bodies, 

public power providers, or cooperative electric 

companies for one or more qualified renewable 

energy facilities, 

‘‘(2) the bond is issued by a qualified issuer, 

and 

‘‘(3) the issuer designates such bond for purposes of this section. 

‘‘(b) REDUCED CREDIT AMOUNT.—The annual 

credit determined under section 54A(b) with respect to any new clean renewable energy bond 

shall be 70 percent of the amount so determined 

without regard to this subsection. 

‘‘(c) LIMITATION ON AMOUNT OF BONDS DESIGNATED.— 

‘‘(1) IN GENERAL.—The maximum aggregate 

face amount of bonds which may be designated 

under subsection (a) by any issuer shall not exceed the limitation amount allocated under this 

subsection to such issuer. 

‘‘(2) NATIONAL LIMITATION ON AMOUNT OF

BONDS DESIGNATED.—There is a national new 

clean renewable energy bond limitation of 

$800,000,000 which shall be allocated by the Secretary as provided in paragraph (3), except 

that— 

‘‘(A) not more than 331⁄3 percent thereof may 

be allocated to qualified projects of public power 

providers, 

‘‘(B) not more than 331⁄3 percent thereof may 

be allocated to qualified projects of governmental bodies, and 

‘‘(C) not more than 331⁄3 percent thereof may 

be allocated to qualified projects of cooperative 

electric companies. 

‘‘(3) METHOD OF ALLOCATION.— 

‘‘(A) ALLOCATION AMONG PUBLIC POWER PROVIDERS.—After the Secretary determines the 

qualified projects of public power providers 

which are appropriate for receiving an allocation of the national new clean renewable energy 

bond limitation, the Secretary shall, to the maximum extent practicable, make allocations 

among such projects in such manner that the 

amount allocated to each such project bears the 

same ratio to the cost of such project as the limitation under paragraph (2)(A) bears to the cost 

of all such projects. 

‘‘(B) ALLOCATION AMONG GOVERNMENTAL BODIES AND COOPERATIVE ELECTRIC COMPANIES.— 

The Secretary shall make allocations of the 

amount of the national new clean renewable energy bond limitation described in paragraphs 

(2)(B) and (2)(C) among qualified projects of 

governmental bodies and cooperative electric 

companies, respectively, in such manner as the 

Secretary determines appropriate. 

‘‘(d) DEFINITIONS.—For purposes of this section— 

‘‘(1) QUALIFIED RENEWABLE ENERGY FACILITY.—The term ‘qualified renewable energy facility’ means a qualified facility (as determined 

under section 45(d) without regard to paragraphs (8) and (10) thereof and to any placed in 

service date) owned by a public power provider, 

a governmental body, or a cooperative electric 

company. 

‘‘(2) 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). 

‘‘(3) GOVERNMENTAL BODY.—The term ‘governmental body’ means any State or Indian tribal 

government, or any political subdivision thereof. 

‘‘(4) COOPERATIVE ELECTRIC COMPANY.—The 

term ‘cooperative electric company’ means a mutual or cooperative electric company described 

in section 501(c)(12) or section 1381(a)(2)(C). 

‘‘(5) CLEAN RENEWABLE ENERGY BOND LENDER.—The term ‘clean renewable energy bond 

lender’ means a lender which is a cooperative 

which is owned by, or has outstanding loans to, 

100 or more cooperative electric companies and is 

in existence on February 1, 2002, and shall include any affiliated entity which is controlled 

by such lender. 

‘‘(6) QUALIFIED ISSUER.—The term ‘qualified 

issuer’ means a public power provider, a cooperative electric company, a governmental body, a 

clean renewable energy bond lender, or a notfor-profit electric utility which has received a 

loan or loan guarantee under the Rural Electrification Act.’’. 

(b) CONFORMING AMENDMENTS.— 

(1) Paragraph (1) of section 54A(d) is amended 

to read as follows: 

‘‘(1) QUALIFIED TAX CREDIT BOND.—The term 

‘qualified tax credit bond’ means— 

‘‘(A) a qualified forestry conservation bond, or 

‘‘(B) a new clean renewable energy bond, 

which is part of an issue that meets requirements of paragraphs (2), (3), (4), (5), and (6).’’. 

(2) Subparagraph (C) of section 54A(d)(2) is 

amended to read as follows: 

‘‘(C) QUALIFIED PURPOSE.—For purposes of 

this paragraph, the term ‘qualified purpose’ 

means— 

‘‘(i) in the case of a qualified forestry conservation bond, a purpose specified in section 

54B(e), and 

‘‘(ii) in the case of a new clean renewable energy bond, a purpose specified in section 

54C(a)(1).’’. 

(3) The table of sections for subpart I of part 

IV of subchapter A of chapter 1 is amended by 

adding at the end the following new item: 

‘‘Sec. 54C. Qualified clean renewable energy 

bonds.’’. 

(c) EXTENSION FOR CLEAN RENEWABLE ENERGY

BONDS.—Subsection (m) of section 54 is amended 

by striking ‘‘December 31, 2008’’ and inserting 

‘‘December 31, 2009’’. 

(d) EFFECTIVE DATE.—The amendments made 

by this section shall apply to obligations issued 

after the date of the enactment of this Act. 

SEC. 108. CREDIT FOR STEEL INDUSTRY FUEL. 

(a) TREATMENT AS REFINED COAL.— 

(1) IN GENERAL.—Subparagraph (A) of section 

45(c)(7) of the Internal Revenue Code of 1986 

(relating to refined coal), as amended by this 

Act, is amended to read as follows: 

‘‘(A) IN GENERAL.—The term ‘refined coal’ 

means a fuel— 

‘‘(i) which— 

‘‘(I) is a liquid, gaseous, or solid fuel produced 

from coal (including lignite) or high carbon fly 

ash, including such fuel used as a feedstock, 

‘‘(II) is sold by the taxpayer with the reasonable expectation that it will be used for purpose 

of producing steam, 

‘‘(III) is certified by the taxpayer as resulting 

(when used in the production of steam) in a 

qualified emission reduction, and 

‘‘(IV) is produced in such a manner as to result in an increase of at least 50 percent in the 

market value of the refined coal (excluding any 

increase caused by materials combined or added 

during the production process), as compared to 

the value of the feedstock coal, or 

‘‘(ii) which is steel industry fuel.’’. 

(2) STEEL INDUSTRY FUEL DEFINED.—Paragraph (7) of section 45(c) of such Code is amended by adding at the end the following new subparagraph: 

‘‘(C) STEEL INDUSTRY FUEL.— 

‘‘(i) IN GENERAL.—The term ‘steel industry 

fuel’ means a fuel which— 

‘‘(I) is produced through a process of 

liquifying coal waste sludge and distributing it 

on coal, and 


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October 3, 2008 CONGRESSIONAL RECORD — HOUSE H10727 

‘‘(II) is used as a feedstock for the manufacture of coke. 

‘‘(ii) COAL WASTE SLUDGE.—The term ‘coal 

waste sludge’ means the tar decanter sludge and 

related byproducts of the coking process, including such materials that have been stored in 

ground, in tanks and in lagoons, that have been 

treated as hazardous wastes under applicable 

Federal environmental rules absent liquefaction 

and processing with coal into a feedstock for the 

manufacture of coke.’’. 

(b) CREDIT AMOUNT.— 

(1) IN GENERAL.—Paragraph (8) of section 

45(e) of the Internal Revenue Code of 1986 (relating to refined coal production facilities) is 

amended by adding at the end the following 

new subparagraph: 

‘‘(D) SPECIAL RULE FOR STEEL INDUSTRY

FUEL.— 

‘‘(i) IN GENERAL.—In the case of a taxpayer 

who produces steel industry fuel— 

‘‘(I) this paragraph shall be applied separately with respect to steel industry fuel and 

other refined coal, and 

‘‘(II) in applying this paragraph to steel industry fuel, the modifications in clause (ii) shall 

apply. 

‘‘(ii) MODIFICATIONS.— 

‘‘(I) CREDIT AMOUNT.—Subparagraph (A) 

shall be applied by substituting ‘$2 per barrel-ofoil equivalent’ for ‘$4.375 per ton’. 

‘‘(II) CREDIT PERIOD.—In lieu of the 10-year 

period referred to in clauses (i) and (ii)(II) of 

subparagraph (A), the credit period shall be the 

period beginning on the later of the date such 

facility was originally placed in service, the 

date the modifications described in clause (iii) 

were placed in service, or October 1, 2008, and 

ending on the later of December 31, 2009, or the 

date which is 1 year after the date such facility 

or the modifications described in clause (iii) 

were placed in service. 

‘‘(III) NO PHASEOUT.—Subparagraph (B) shall 

not apply. 

‘‘(iii) MODIFICATIONS.—The modifications described in this clause are modifications to an existing facility which allow such facility to 

produce steel industry fuel. 

‘‘(iv) BARREL-OF-OIL EQUIVALENT.—For purposes of this subparagraph, a barrel-of-oil 

equivalent is the amount of steel industry fuel 

that has a Btu content of 5,800,000 Btus.’’. 

(2) INFLATION ADJUSTMENT.—Paragraph (2) of 

section 45(b) of such Code is amended by inserting ‘‘the $3 amount in subsection 

(e)(8)(D)(ii)(I),’’ after ‘‘subsection (e)(8)(A),’’. 

(c) TERMINATION.—Paragraph (8) of section 

45(d) of the Internal Revenue Code of 1986 (relating to refined coal production facility), as 

amended by this Act, is amended to read as follows: 

‘‘(8) REFINED COAL PRODUCTION FACILITY.—In 

the case of a facility that produces refined coal, 

the term ‘refined coal production facility’ 

means— 

‘‘(A) with respect to a facility producing steel 

industry fuel, any facility (or any modification 

to a facility) which is placed in service before 

January 1, 2010, and 

‘‘(B) with respect to any other facility producing refined coal, any facility placed in service after the date of the enactment of the American Jobs Creation Act of 2004 and before January 1, 2010.’’. 

(d) COORDINATION WITH CREDIT FOR PRODUCING FUEL FROM A NONCONVENTIONAL

SOURCE.— 

(1) IN GENERAL.—Subparagraph (B) of section 

45(e)(9) of the Internal Revenue Code of 1986 is 

amended— 

(A) by striking ‘‘The term’’ and inserting the 

following: 

‘‘(i) IN GENERAL.—The term’’, and 

(B) by adding at the end the following new 

clause: 

‘‘(ii) EXCEPTION FOR STEEL INDUSTRY COAL.— 

In the case of a facility producing steel industry 

fuel, clause (i) shall not apply to so much of the 

refined coal produced at such facility as is steel 

industry fuel.’’. 

(2) NO DOUBLE BENEFIT.—Section 45K(g)(2) of 

such Code is amended by adding at the end the 

following new subparagraph: 

‘‘(E) COORDINATION WITH SECTION 45.—No 

credit shall be allowed with respect to any 

qualified fuel which is steel industry fuel (as defined in section 45(c)(7)) if a credit is allowed to 

the taxpayer for such fuel under section 45.’’. 

(e) EFFECTIVE DATE.—The amendments made 

by this section shall apply to fuel produced and 

sold after September 30, 2008. 

SEC. 109. SPECIAL RULE TO IMPLEMENT FERC 

AND STATE ELECTRIC RESTRUCTURING POLICY. 

(a) EXTENSION FOR QUALIFIED ELECTRIC UTILITIES.— 

(1) IN GENERAL.—Paragraph (3) of section 

451(i) is amended by inserting ‘‘(before January 

1, 2010, in the case of a qualified electric utility)’’ after ‘‘January 1, 2008’’. 

(2) QUALIFIED ELECTRIC UTILITY.—Subsection 

(i) of section 451 is amended by redesignating 

paragraphs (6) through (10) as paragraphs (7) 

through (11), respectively, and by inserting after 

paragraph (5) the following new paragraph: 

‘‘(6) QUALIFIED ELECTRIC UTILITY.—For purposes of this subsection, the term ‘qualified electric utility’ means a person that, as of the date 

of the qualifying electric transmission transaction, is vertically integrated, in that it is 

both— 

‘‘(A) a transmitting utility (as defined in section 3(23) of the Federal Power Act (16 U.S.C. 

796(23))) with respect to the transmission facilities to which the election under this subsection 

applies, and 

‘‘(B) an electric utility (as defined in section 

3(22) of the Federal Power Act (16 U.S.C. 

796(22))).’’. 

(b) EXTENSION OF PERIOD FOR TRANSFER OF

OPERATIONAL CONTROL AUTHORIZED BY

FERC.—Clause (ii) of section 451(i)(4)(B) is 

amended by striking ‘‘December 31, 2007’’ and 

inserting ‘‘the date which is 4 years after the 

close of the taxable year in which the transaction occurs’’. 

(c) PROPERTY LOCATED OUTSIDE THE UNITED

STATES NOT TREATED AS EXEMPT UTILITY PROPERTY.—Paragraph (5) of section 451(i) is amended by adding at the end the following new subparagraph: 

‘‘(C) EXCEPTION FOR PROPERTY LOCATED OUTSIDE THE UNITED STATES.—The term ‘exempt utility property’ shall not include any property 

which is located outside the United States.’’. 

(d) EFFECTIVE DATES.— 

(1) EXTENSION.—The amendments made by 

subsection (a) shall apply to transactions after 

December 31, 2007. 

(2) TRANSFERS OF OPERATIONAL CONTROL.— 

The amendment made by subsection (b) shall 

take effect as if included in section 909 of the 

American Jobs Creation Act of 2004. 

(3) EXCEPTION FOR PROPERTY LOCATED OUTSIDE THE UNITED STATES.—The amendment made 

by subsection (c) shall apply to transactions 

after the date of the enactment of this Act. 

Subtitle B—Carbon Mitigation and Coal 

Provisions 

SEC. 111. EXPANSION AND MODIFICATION OF ADVANCED COAL PROJECT INVESTMENT CREDIT. 

(a) MODIFICATION OF CREDIT AMOUNT.—Section 48A(a) is amended by striking ‘‘and’’ at the 

end of paragraph (1), by striking the period at 

the end of paragraph (2) and inserting ‘‘, and’’, 

and by adding at the end the following new 

paragraph: 

‘‘(3) 30 percent of the qualified investment for 

such taxable year in the case of projects described in clause (iii) of subsection (d)(3)(B).’’. 

(b) EXPANSION OF AGGREGATE CREDITS.—Section 48A(d)(3)(A) is amended by striking 

‘‘$1,300,000,000’’ and inserting ‘‘$2,550,000,000’’. 

(c) AUTHORIZATION OF ADDITIONAL

PROJECTS.— 

(1) IN GENERAL.—Subparagraph (B) of section 

48A(d)(3) is amended to read as follows: 

‘‘(B) PARTICULAR PROJECTS.—Of the dollar 

amount in subparagraph (A), the Secretary is 

authorized to certify— 

‘‘(i) $800,000,000 for integrated gasification 

combined cycle projects the application for 

which is submitted during the period described 

in paragraph (2)(A)(i), 

‘‘(ii) $500,000,000 for projects which use other 

advanced coal-based generation technologies the 

application for which is submitted during the 

period described in paragraph (2)(A)(i), and 

‘‘(iii) $1,250,000,000 for advanced coal-based 

generation technology projects the application 

for which is submitted during the period described in paragraph (2)(A)(ii).’’. 

(2) APPLICATION PERIOD FOR ADDITIONAL

PROJECTS.—Subparagraph (A) of section 

48A(d)(2) is amended to read as follows: 

‘‘(A) APPLICATION PERIOD.—Each applicant 

for certification under this paragraph shall submit an application meeting the requirements of 

subparagraph (B). An applicant may only submit an application— 

‘‘(i) for an allocation from the dollar amount 

specified in clause (i) or (ii) of paragraph (3)(B) 

during the 3-year period beginning on the date 

the Secretary establishes the program under 

paragraph (1), and 

‘‘(ii) for an allocation from the dollar amount 

specified in paragraph (3)(B)(iii) during the 3- 

year period beginning at the earlier of the termination of the period described in clause (i) or 

the date prescribed by the Secretary.’’. 

(3) CAPTURE AND SEQUESTRATION OF CARBON

DIOXIDE EMISSIONS REQUIREMENT.— 

(A) IN GENERAL.—Section 48A(e)(1) is amended 

by striking ‘‘and’’ at the end of subparagraph 

(E), by striking the period at the end of subparagraph (F) and inserting ‘‘; and’’, and by 

adding at the end the following new subparagraph: 

‘‘(G) in the case of any project the application 

for which is submitted during the period described in subsection (d)(2)(A)(ii), the project includes equipment which separates and sequesters at least 65 percent (70 percent in the case of 

an application for reallocated credits under subsection (d)(4)) of such project’s total carbon dioxide emissions.’’. 

(B) HIGHEST PRIORITY FOR PROJECTS WHICH

SEQUESTER CARBON DIOXIDE EMISSIONS.—Section 

48A(e)(3) is amended by striking ‘‘and’’ at the 

end of subparagraph (A)(iii), by striking the period at the end of subparagraph (B)(iii) and inserting ‘‘, and’’, and by adding at the end the 

following new subparagraph: 

‘‘(C) give highest priority to projects with the 

greatest separation and sequestration percentage of total carbon dioxide emissions.’’. 

(C) RECAPTURE OF CREDIT FOR FAILURE TO SEQUESTER.—Section 48A is amended by adding at 

the end the following new subsection: 

‘‘(i) RECAPTURE OF CREDIT FOR FAILURE TO

SEQUESTER.—The Secretary shall provide for recapturing the benefit of any credit allowable 

under subsection (a) with respect to any project 

which fails to attain or maintain the separation 

and sequestration requirements of subsection 

(e)(1)(G).’’. 

(4) ADDITIONAL PRIORITY FOR RESEARCH PARTNERSHIPS.—Section 48A(e)(3)(B), as amended by 

paragraph (3)(B), is amended— 

(A) by striking ‘‘and’’ at the end of clause (ii), 

(B) by redesignating clause (iii) as clause (iv), 

and 

(C) by inserting after clause (ii) the following 

new clause: 

‘‘(iii) applicant participants who have a research partnership with an eligible educational 

institution (as defined in section 529(e)(5)), 

and’’. 

(5) CLERICAL AMENDMENT.—Section 48A(e)(3) 

is amended by striking ‘‘INTEGRATED GASIFICATION COMBINED CYCLE’’ in the heading and 

inserting ‘‘CERTAIN’’. 

(d) DISCLOSURE OF ALLOCATIONS.—Section 

48A(d) is amended by adding at the end the following new paragraph: 


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H10728 CONGRESSIONAL RECORD — HOUSE October 3, 2008 

‘‘(5) DISCLOSURE OF ALLOCATIONS.—The Secretary shall, upon making a certification under 

this subsection or section 48B(d), publicly disclose the identity of the applicant and the 

amount of the credit certified with respect to 

such applicant.’’. 

(e) EFFECTIVE DATES.— 

(1) IN GENERAL.—Except as otherwise provided 

in this subsection, the amendments made by this 

section shall apply to credits the application for 

which is submitted during the period described 

in section 48A(d)(2)(A)(ii) of the Internal Revenue Code of 1986 and which are allocated or reallocated after the date of the enactment of this 

Act. 

(2) DISCLOSURE OF ALLOCATIONS.—The amendment made by subsection (d) shall apply to certifications made after the date of the enactment 

of this Act. 

(3) CLERICAL AMENDMENT.—The amendment 

made by subsection (c)(5) shall take effect as if 

included in the amendment made by section 

1307(b) of the Energy Tax Incentives Act of 2005. 

SEC. 112. EXPANSION AND MODIFICATION OF 

COAL GASIFICATION INVESTMENT 

CREDIT. 

(a) MODIFICATION OF CREDIT AMOUNT.—Section 48B(a) is amended by inserting ‘‘(30 percent 

in the case of credits allocated under subsection 

(d)(1)(B))’’ after ‘‘20 percent’’. 

(b) EXPANSION OF AGGREGATE CREDITS.—Section 48B(d)(1) is amended by striking ‘‘shall not 

exceed $350,000,000’’ and all that follows and inserting ‘‘shall not exceed— 

‘‘(A) $350,000,000, plus 

‘‘(B) $250,000,000 for qualifying gasification 

projects that include equipment which separates 

and sequesters at least 75 percent of such 

project’s total carbon dioxide emissions.’’. 

(c) RECAPTURE OF CREDIT FOR FAILURE TO SEQUESTER.—Section 48B is amended by adding at 

the end the following new subsection: 

‘‘(f) RECAPTURE OF CREDIT FOR FAILURE TO

SEQUESTER.—The Secretary shall provide for recapturing the benefit of any credit allowable 

under subsection (a) with respect to any project 

which fails to attain or maintain the separation 

and sequestration requirements for such project 

under subsection (d)(1).’’. 

(d) SELECTION PRIORITIES.—Section 48B(d) is 

amended by adding at the end the following 

new paragraph: 

‘‘(4) SELECTION PRIORITIES.—In determining 

which qualifying gasification projects to certify 

under this section, the Secretary shall— 

‘‘(A) give highest priority to projects with the 

greatest separation and sequestration percentage of total carbon dioxide emissions, and 

‘‘(B) give high priority to applicant participants who have a research partnership with an 

eligible educational institution (as defined in 

section 529(e)(5)).’’. 

(e) ELIGIBLE PROJECTS INCLUDE TRANSPORTATION GRADE LIQUID FUELS.—Section 48B(c)(7) 

(defining eligible entity) is amended by striking 

‘‘and’’ at the end of subparagraph (F), by striking the period at the end of subparagraph (G) 

and inserting ‘‘, and’’, and by adding at the end 

the following new subparagraph: 

‘‘(H) transportation grade liquid fuels.’’. 

(f) EFFECTIVE DATE.—The amendments made 

by this section shall apply to credits described in 

section 48B(d)(1)(B) of the Internal Revenue 

Code of 1986 which are allocated or reallocated 

after the date of the enactment of this Act. 

SEC. 113. TEMPORARY INCREASE IN COAL EXCISE 

TAX; FUNDING OF BLACK LUNG DISABILITY TRUST FUND. 

(a) EXTENSION OF TEMPORARY INCREASE.— 

Paragraph (2) of section 4121(e) is amended— 

(1) by striking ‘‘January 1, 2014’’ in subparagraph (A) and inserting ‘‘December 31, 2018’’, 

and 

(2) by striking ‘‘January 1 after 1981’’ in subparagraph (B) and inserting ‘‘December 31 after 

2007’’. 

(b) RESTRUCTURING OF TRUST FUND DEBT.— 

(1) DEFINITIONS.—For purposes of this subsection— 

(A) MARKET VALUE OF THE OUTSTANDING REPAYABLE ADVANCES, PLUS ACCRUED INTEREST.— 

The term ‘‘market value of the outstanding repayable advances, plus accrued interest’’ means 

the present value (determined by the Secretary 

of the Treasury as of the refinancing date and 

using the Treasury rate as the discount rate) of 

the stream of principal and interest payments 

derived assuming that each repayable advance 

that is outstanding on the refinancing date is 

due on the 30th anniversary of the end of the 

fiscal year in which the advance was made to 

the Trust Fund, and that all such principal and 

interest payments are made on September 30 of 

the applicable fiscal year. 

(B) REFINANCING DATE.—The term ‘‘refinancing date’’ means the date occurring 2 days 

after the enactment of this Act. 

(C) REPAYABLE ADVANCE.—The term ‘‘repayable advance’’ means an amount that has been 

appropriated to the Trust Fund in order to make 

benefit payments and other expenditures that 

are authorized under section 9501 of the Internal Revenue Code of 1986 and are required to be 

repaid when the Secretary of the Treasury determines that monies are available in the Trust 

Fund for such purpose. 

(D) TREASURY RATE.—The term ‘‘Treasury 

rate’’ means a rate determined by the Secretary 

of the Treasury, taking into consideration current market yields on outstanding marketable 

obligations of the United States of comparable 

maturities. 

(E) TREASURY 1-YEAR RATE.—The term ‘‘Treasury 1-year rate’’ means a rate determined by the 

Secretary of the Treasury, taking into consideration current market yields on outstanding marketable obligations of the United States with remaining periods to maturity of approximately 1 

year, to have been in effect as of the close of 

business 1 business day prior to the date on 

which the Trust Fund issues obligations to the 

Secretary of the Treasury under paragraph 

(2)(B). 

(2) REFINANCING OF OUTSTANDING PRINCIPAL

OF REPAYABLE ADVANCES AND UNPAID INTEREST

ON SUCH ADVANCES.— 

(A) TRANSFER TO GENERAL FUND.—On the refinancing date, the Trust Fund shall repay the 

market value of the outstanding repayable advances, plus accrued interest, by transferring 

into the general fund of the Treasury the following sums: 

(i) The proceeds from obligations that the 

Trust Fund shall issue to the Secretary of the 

Treasury in such amounts as the Secretaries of 

Labor and the Treasury shall determine and 

bearing interest at the Treasury rate, and that 

shall be in such forms and denominations and 

be subject to such other terms and conditions, 

including maturity, as the Secretary of the 

Treasury shall prescribe. 

(ii) All, or that portion, of the appropriation 

made to the Trust Fund pursuant to paragraph 

(3) that is needed to cover the difference defined 

in that paragraph. 

(B) REPAYMENT OF OBLIGATIONS.—In the 

event that the Trust Fund is unable to repay 

the obligations that it has issued to the Secretary of the Treasury under subparagraph 

(A)(i) and this subparagraph, or is unable to 

make benefit payments and other authorized expenditures, the Trust Fund shall issue obligations to the Secretary of the Treasury in such 

amounts as may be necessary to make such repayments, payments, and expenditures, with a 

maturity of 1 year, and bearing interest at the 

Treasury 1-year rate. These obligations shall be 

in such forms and denominations and be subject 

to such other terms and conditions as the Secretary of the Treasury shall prescribe. 

(C) AUTHORITY TO ISSUE OBLIGATIONS.—The 

Trust Fund is authorized to issue obligations to 

the Secretary of the Treasury under subparagraphs (A)(i) and (B). The Secretary of the 

Treasury is authorized to purchase such obligations of the Trust Fund. For the purposes of 

making such purchases, the Secretary of the 

Treasury may use as a public debt transaction 

the proceeds from the sale of any securities 

issued under chapter 31 of title 31, United States 

Code, and the purposes for which securities may 

be issued under such chapter are extended to include any purchase of such Trust Fund obligations under this subparagraph. 

(3) ONE-TIME APPROPRIATION.—There is hereby appropriated to the Trust Fund an amount 

sufficient to pay to the general fund of the 

Treasury the difference between— 

(A) the market value of the outstanding repayable advances, plus accrued interest; and 

(B) the proceeds from the obligations issued by 

the Trust Fund to the Secretary of the Treasury 

under paragraph (2)(A)(i). 

(4) PREPAYMENT OF TRUST FUND OBLIGATIONS.—The Trust Fund is authorized to repay 

any obligation issued to the Secretary of the 

Treasury under subparagraphs (A)(i) and (B) of 

paragraph (2) prior to its maturity date by paying a prepayment price that would, if the obligation being prepaid (including all unpaid interest accrued thereon through the date of prepayment) were purchased by a third party and 

held to the maturity date of such obligation, 

produce a yield to the third-party purchaser for 

the period from the date of purchase to the maturity date of such obligation substantially 

equal to the Treasury yield on outstanding marketable obligations of the United States having 

a comparable maturity to this period. 

SEC. 114. SPECIAL RULES FOR REFUND OF THE 

COAL EXCISE TAX TO CERTAIN COAL 

PRODUCERS AND EXPORTERS. 

(a) REFUND.— 

(1) COAL PRODUCERS.— 

(A) IN GENERAL.—Notwithstanding subsections (a)(1) and (c) of section 6416 and section 6511 of the Internal Revenue Code of 1986, 

if— 

(i) a coal producer establishes that such coal 

producer, or a party related to such coal producer, exported coal produced by such coal producer to a foreign country or shipped coal produced by such coal producer to a possession of 

the United States, or caused such coal to be exported or shipped, the export or shipment of 

which was other than through an exporter who 

meets the requirements of paragraph (2), 

(ii) such coal producer filed an excise tax return on or after October 1, 1990, and on or before the date of the enactment of this Act, and 

(iii) such coal producer files a claim for refund 

with the Secretary not later than the close of 

the 30-day period beginning on the date of the 

enactment of this Act, 

then the Secretary shall pay to such coal producer an amount equal to the tax paid under 

section 4121 of such Code on such coal exported 

or shipped by the coal producer or a party related to such coal producer, or caused by the 

coal producer or a party related to such coal 

producer to be exported or shipped. 

(B) SPECIAL RULES FOR CERTAIN TAXPAYERS.— 

For purposes of this section— 

(i) IN GENERAL.—If a coal producer or a party 

related to a coal producer has received a judgment described in clause (iii), such coal producer shall be deemed to have established the 

export of coal to a foreign country or shipment 

of coal to a possession of the United States 

under subparagraph (A)(i). 

(ii) AMOUNT OF PAYMENT.—If a taxpayer described in clause (i) is entitled to a payment 

under subparagraph (A), the amount of such 

payment shall be reduced by any amount paid 

pursuant to the judgment described in clause 

(iii). 

(iii) JUDGMENT DESCRIBED.—A judgment is described in this subparagraph if such judgment— 

(I) is made by a court of competent jurisdiction within the United States, 

(II) relates to the constitutionality of any tax 

paid on exported coal under section 4121 of the 

Internal Revenue Code of 1986, and 

(III) is in favor of the coal producer or the 

party related to the coal producer. 


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October 3, 2008 CONGRESSIONAL RECORD — HOUSE H10729 

(2) EXPORTERS.—Notwithstanding subsections 

(a)(1) and (c) of section 6416 and section 6511 of 

the Internal Revenue Code of 1986, and a judgment described in paragraph (1)(B)(iii) of this 

subsection, if— 

(A) an exporter establishes that such exporter 

exported coal to a foreign country or shipped 

coal to a possession of the United States, or 

caused such coal to be so exported or shipped, 

(B) such exporter filed a tax return on or after 

October 1, 1990, and on or before the date of the 

enactment of this Act, and 

(C) such exporter files a claim for refund with 

the Secretary not later than the close of the 30- 

day period beginning on the date of the enactment of this Act, 

then the Secretary shall pay to such exporter an 

amount equal to $0.825 per ton of such coal exported by the exporter or caused to be exported 

or shipped, or caused to be exported or shipped, 

by the exporter. 

(b) LIMITATIONS.—Subsection (a) shall not 

apply with respect to exported coal if a settlement with the Federal Government has been 

made with and accepted by, the coal producer, 

a party related to such coal producer, or the exporter, of such coal, as of the date that the 

claim is filed under this section with respect to 

such exported coal. For purposes of this subsection, the term ‘‘settlement with the Federal 

Government’’ shall not include any settlement 

or stipulation entered into as of the date of the 

enactment of this Act, the terms of which contemplate a judgment concerning which any 

party has reserved the right to file an appeal, or 

has filed an appeal. 

(c) SUBSEQUENT REFUND PROHIBITED.—No refund shall be made under this section to the extent that a credit or refund of such tax on such 

exported or shipped coal has been paid to any 

person. 

(d) DEFINITIONS.—For purposes of this section— 

(1) COAL PRODUCER.—The term ‘‘coal producer’’ means the person in whom is vested 

ownership of the coal immediately after the coal 

is severed from the ground, without regard to 

the existence of any contractual arrangement 

for the sale or other disposition of the coal or 

the payment of any royalties between the producer and third parties. The term includes any 

person who extracts coal from coal waste refuse 

piles or from the silt waste product which results from the wet washing (or similar processing) of coal. 

(2) EXPORTER.—The term ‘‘exporter’’ means a 

person, other than a coal producer, who does 

not have a contract, fee arrangement, or any 

other agreement with a producer or seller of 

such coal to export or ship such coal to a third 

party on behalf of the producer or seller of such 

coal and— 

(A) is indicated in the shipper’s export declaration or other documentation as the exporter 

of record, or 

(B) actually exported such coal to a foreign 

country or shipped such coal to a possession of 

the United States, or caused such coal to be so 

exported or shipped. 

(3) RELATED PARTY.—The term ‘‘a party related to such coal producer’’ means a person 

who— 

(A) is related to such coal producer through 

any degree of common management, stock ownership, or voting control, 

(B) is related (within the meaning of section 

144(a)(3) of the Internal Revenue Code of 1986) 

to such coal producer, or 

(C) has a contract, fee arrangement, or any 

other agreement with such coal producer to sell 

such coal to a third party on behalf of such coal 

producer. 

(4) SECRETARY.—The term ‘‘Secretary’’ means 

the Secretary of Treasury or the Secretary’s designee. 

(e) TIMING OF REFUND.—With respect to any 

claim for refund filed pursuant to this section, 

the Secretary shall determine whether the requirements of this section are met not later than 

180 days after such claim is filed. If the Secretary determines that the requirements of this 

section are met, the claim for refund shall be 

paid not later than 180 days after the Secretary 

makes such determination. 

(f) INTEREST.—Any refund paid pursuant to 

this section shall be paid by the Secretary with 

interest from the date of overpayment determined by using the overpayment rate and method under section 6621 of the Internal Revenue 

Code of 1986. 

(g) DENIAL OF DOUBLE BENEFIT.—The payment under subsection (a) with respect to any 

coal shall not exceed— 

(1) in the case of a payment to a coal producer, the amount of tax paid under section 4121 

of the Internal Revenue Code of 1986 with respect to such coal by such coal producer or a 

party related to such coal producer, and 

(2) in the case of a payment to an exporter, an 

amount equal to $0.825 per ton with respect to 

such coal exported by the exporter or caused to 

be exported by the exporter. 

(h) APPLICATION OF SECTION.—This section 

applies only to claims on coal exported or 

shipped on or after October 1, 1990, through the 

date of the enactment of this Act. 

(i) STANDING NOT CONFERRED.— 

(1) EXPORTERS.—With respect to exporters, 

this section shall not confer standing upon an 

exporter to commence, or intervene in, any judicial or administrative proceeding concerning a 

claim for refund by a coal producer of any Federal or State tax, fee, or royalty paid by the coal 

producer. 

(2) COAL PRODUCERS.—With respect to coal 

producers, this section shall not confer standing 

upon a coal producer to commence, or intervene 

in, any judicial or administrative proceeding 

concerning a claim for refund by an exporter of 

any Federal or State tax, fee, or royalty paid by 

the producer and alleged to have been passed on 

to an exporter. 

SEC. 115. TAX CREDIT FOR CARBON DIOXIDE SEQUESTRATION. 

(a) IN GENERAL.—Subpart D of part IV of subchapter A of chapter 1 (relating to business 

credits) is amended by adding at the end the following new section: 

‘‘SEC. 45Q. CREDIT FOR CARBON DIOXIDE SEQUESTRATION. 

‘‘(a) GENERAL RULE.—For purposes of section 

38, the carbon dioxide sequestration credit for 

any taxable year is an amount equal to the sum 

of— 

‘‘(1) $20 per metric ton of qualified carbon dioxide which is— 

‘‘(A) captured by the taxpayer at a qualified 

facility, and 

‘‘(B) disposed of by the taxpayer in secure geological storage, and 

‘‘(2) $10 per metric ton of qualified carbon dioxide which is— 

‘‘(A) captured by the taxpayer at a qualified 

facility, and 

‘‘(B) used by the taxpayer as a tertiary 

injectant in a qualified enhanced oil or natural 

gas recovery project. 

‘‘(b) QUALIFIED CARBON DIOXIDE.—For purposes of this section— 

‘‘(1) IN GENERAL.—The term ‘qualified carbon 

dioxide’ means carbon dioxide captured from an 

industrial source which— 

‘‘(A) would otherwise be released into the atmosphere as industrial emission of greenhouse 

gas, and 

‘‘(B) is measured at the source of capture and 

verified at the point of disposal or injection. 

‘‘(2) RECYCLED CARBON DIOXIDE.—The term 

‘qualified carbon dioxide’ includes the initial 

deposit of captured carbon dioxide used as a tertiary injectant. Such term does not include carbon dioxide that is re-captured, recycled, and 

re-injected as part of the enhanced oil and natural gas recovery process. 

‘‘(c) QUALIFIED FACILITY.—For purposes of 

this section, the term ‘qualified facility’ means 

any industrial facility— 

‘‘(1) which is owned by the taxpayer, 

‘‘(2) at which carbon capture equipment is 

placed in service, and 

‘‘(3) which captures not less than 500,000 metric tons of carbon dioxide during the taxable 

year. 

‘‘(d) SPECIAL RULES AND OTHER DEFINITIONS.—For purposes of this section— 

‘‘(1) ONLY CARBON DIOXIDE CAPTURED AND

DISPOSED OF OR USED WITHIN THE UNITED STATES

TAKEN INTO ACCOUNT.—The credit under this 

section shall apply only with respect to qualified carbon dioxide the capture and disposal or 

use of which is within— 

‘‘(A) the United States (within the meaning of 

section 638(1)), or 

‘‘(B) a possession of the United States (within 

the meaning of section 638(2)). 

‘‘(2) SECURE GEOLOGICAL STORAGE.—The Secretary, in consultation with the Administrator 

of the Environmental Protection Agency, shall 

establish regulations for determining adequate 

security measures for the geological storage of 

carbon dioxide under subsection (a)(1)(B) such 

that the carbon dioxide does not escape into the 

atmosphere. Such term shall include storage at 

deep saline formations and unminable coal 

seems under such conditions as the Secretary 

may determine under such regulations. 

‘‘(3) TERTIARY INJECTANT.—The term ‘tertiary 

injectant’ has the same meaning as when used 

within section 193(b)(1). 

‘‘(4) QUALIFIED ENHANCED OIL OR NATURAL

GAS RECOVERY PROJECT.—The term ‘qualified enhanced oil or natural gas recovery project’ has 

the meaning given the term ‘qualified enhanced 

oil recovery project’ by section 43(c)(2), by substituting ‘crude oil or natural gas’ for ‘crude oil’ 

in subparagraph (A)(i) thereof. 

‘‘(5) CREDIT ATTRIBUTABLE TO TAXPAYER.— 

Any credit under this section shall be attributable to the person that captures and physically or contractually ensures the disposal of or 

the use as a tertiary injectant of the qualified 

carbon dioxide, except to the extent provided in 

regulations prescribed by the Secretary. 

‘‘(6) RECAPTURE.—The Secretary shall, by regulations, provide for recapturing the benefit of 

any credit allowable under subsection (a) with 

respect to any qualified carbon dioxide which 

ceases to be captured, disposed of, or used as a 

tertiary injectant in a manner consistent with 

the requirements of this section. 

‘‘(7) INFLATION ADJUSTMENT.—In the case of 

any taxable year beginning in a calendar year 

after 2009, there shall be substituted for each 

dollar amount contained in subsection (a) an 

amount equal to the product of— 

‘‘(A) such dollar amount, multiplied by 

‘‘(B) the inflation adjustment factor for such 

calendar year determined under section 

43(b)(3)(B) for such calendar year, determined 

by substituting ‘2008’ for ‘1990’. 

‘‘(e) APPLICATION OF SECTION.—The credit 

under this section shall apply with respect to 

qualified carbon dioxide before the end of the 

calendar year in which the Secretary, in consultation with the Administrator of the Environmental Protection Agency, certifies that 

75,000,000 metric tons of qualified carbon dioxide 

have been captured and disposed of or used as 

a tertiary injectant.’’. 

(b) CONFORMING AMENDMENT.—Section 38(b) 

(relating to general business credit) is amended 

by striking ‘‘plus’’ at the end of paragraph (32), 

by striking the period at the end of paragraph 

(33) and inserting ‘‘, plus’’, and by adding at 

the end of following new paragraph: 

‘‘(34) the carbon dioxide sequestration credit 

determined under section 45Q(a).’’. 

(c) CLERICAL AMENDMENT.—The table of sections for subpart B of part IV of subchapter A 

of chapter 1 (relating to other credits) is amended by adding at the end the following new section: 


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H10730 CONGRESSIONAL RECORD — HOUSE October 3, 2008 

‘‘Sec. 45Q. Credit for carbon dioxide sequestration.’’. 

(d) EFFECTIVE DATE.—The amendments made 

by this section shall apply to carbon dioxide 

captured after the date of the enactment of this 

Act. 

SEC. 116. CERTAIN INCOME AND GAINS RELATING 

TO INDUSTRIAL SOURCE CARBON DIOXIDE TREATED AS QUALIFYING INCOME FOR PUBLICLY TRADED PARTNERSHIPS. 

(a) IN GENERAL.—Subparagraph (E) of section 

7704(d)(1) (defining qualifying income) is 

amended by inserting ‘‘or industrial source carbon dioxide’’ after ‘‘timber)’’. 

(b) EFFECTIVE DATE.—The amendment made 

by this section shall take effect on the date of 

the enactment of this Act, in taxable years ending after such date. 

SEC. 117. CARBON AUDIT OF THE TAX CODE. 

(a) STUDY.—The Secretary of the Treasury 

shall enter into an agreement with the National 

Academy of Sciences to undertake a comprehensive review of the Internal Revenue Code of 1986 

to identify the types of and specific tax provisions that have the largest effects on carbon and 

other greenhouse gas emissions and to estimate 

the magnitude of those effects. 

(b) REPORT.—Not later than 2 years after the 

date of enactment of this Act, the National 

Academy of Sciences shall submit to Congress a 

report containing the results of study authorized under this section. 

(c) AUTHORIZATION OF APPROPRIATIONS.— 

There is authorized to be appropriated to carry 

out this section $1,500,000 for the period of fiscal 

years 2009 and 2010. 

TITLE II—TRANSPORTATION AND 

DOMESTIC FUEL SECURITY PROVISIONS 

SEC. 201. INCLUSION OF CELLULOSIC BIOFUEL IN 

BONUS DEPRECIATION FOR BIOMASS ETHANOL PLANT PROPERTY. 

(a) IN GENERAL.—Paragraph (3) of section 

168(l) is amended to read as follows: 

‘‘(3) CELLULOSIC BIOFUEL.—The term ‘cellulosic biofuel’ means any liquid fuel which is 

produced from any lignocellulosic or 

hemicellulosic matter that is available on a renewable or recurring basis.’’. 

(b) CONFORMING AMENDMENTS.—Subsection (l) 

of section 168 is amended— 

(1) by striking ‘‘cellulosic biomass ethanol’’ 

each place it appears and inserting ‘‘cellulosic 

biofuel’’, 

(2) by striking ‘‘CELLULOSIC BIOMASS ETHANOL’’ in the heading of such subsection and inserting ‘‘CELLULOSIC BIOFUEL’’, and 

(3) by striking ‘‘CELLULOSIC BIOMASS ETHANOL’’ in the heading of paragraph (2) thereof 

and inserting ‘‘CELLULOSIC BIOFUEL’’. 

(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, in taxable years ending after such date. 

SEC. 202. CREDITS FOR BIODIESEL AND RENEWABLE DIESEL. 

(a) IN GENERAL.—Sections 40A(g), 6426(c)(6), 

and 6427(e)(5)(B) are each amended by striking 

‘‘December 31, 2008’’ and inserting ‘‘December 

31, 2009’’. 

(b) INCREASE IN RATE OF CREDIT.— 

(1) INCOME TAX CREDIT.—Paragraphs (1)(A) 

and (2)(A) of section 40A(b) are each amended 

by striking ‘‘50 cents’’ and inserting ‘‘$1.00’’. 

(2) EXCISE TAX CREDIT.—Paragraph (2) of section 6426(c) is amended to read as follows: 

‘‘(2) APPLICABLE AMOUNT.—For purposes of 

this subsection, the applicable amount is $1.00.’’. 

(3) CONFORMING AMENDMENTS.— 

(A) Subsection (b) of section 40A is amended 

by striking paragraph (3) and by redesignating 

paragraphs (4) and (5) as paragraphs (3) and 

(4), respectively. 

(B) Paragraph (2) of section 40A(f) is amended 

to read as follows: 

‘‘(2) EXCEPTION.—Subsection (b)(4) shall not 

apply with respect to renewable diesel.’’. 

(C) Paragraphs (2) and (3) of section 40A(e) 

are each amended by striking ‘‘subsection 

(b)(5)(C)’’ and inserting ‘‘subsection (b)(4)(C)’’. 

(D) Clause (ii) of section 40A(d)(3)(C) is 

amended by striking ‘‘subsection (b)(5)(B)’’ and 

inserting ‘‘subsection (b)(4)(B)’’. 

(c) UNIFORM TREATMENT OF DIESEL PRODUCED FROM BIOMASS.—Paragraph (3) of section 40A(f) is amended— 

(1) by striking ‘‘diesel fuel’’ and inserting 

‘‘liquid fuel’’, 

(2) by striking ‘‘using a thermal 

depolymerization process’’, and 

(3) by inserting ‘‘, or other equivalent standard approved by the Secretary’’ after ‘‘D396’’. 

(d) COPRODUCTION OF RENEWABLE DIESEL

WITH PETROLEUM FEEDSTOCK.— 

(1) IN GENERAL.—Paragraph (3) of section 

40A(f) is amended by adding at the end the following new sentences: ‘‘Such term does not include any fuel derived from coprocessing biomass with a feedstock which is not biomass. For 

purposes of this paragraph, the term ‘biomass’ 

has the meaning given such term by section 

45K(c)(3).’’. 

(2) CONFORMING AMENDMENT.—Paragraph (3) 

of section 40A(f) is amended by striking ‘‘(as defined in section 45K(c)(3))’’. 

(e) ELIGIBILITY OF CERTAIN AVIATION FUEL.— 

Subsection (f) of section 40A (relating to renewable diesel) is amended by adding at the end the 

following new paragraph: 

‘‘(4) CERTAIN AVIATION FUEL.— 

‘‘(A) IN GENERAL.—Except as provided in the 

last 3 sentences of paragraph (3), the term ‘renewable diesel’ shall include fuel derived from 

biomass which meets the requirements of a Department of Defense specification for military jet 

fuel or an American Society of Testing and Materials specification for aviation turbine fuel. 

‘‘(B) APPLICATION OF MIXTURE CREDITS.—In 

the case of fuel which is treated as renewable 

diesel solely by reason of subparagraph (A), 

subsection (b)(1) and section 6426(c) shall be applied with respect to such fuel by treating kerosene as though it were diesel fuel.’’. 

(f) MODIFICATION RELATING TO DEFINITION OF

AGRI-BIODIESEL.—Paragraph (2) of section 

40A(d) (relating to agri-biodiesel) is amended by 

striking ‘‘and mustard seeds’’ and inserting 

‘‘mustard seeds, and camelina’’. 

(g) EFFECTIVE DATE.— 

(1) IN GENERAL.—Except as otherwise provided 

in this subsection, the amendments made by this 

section shall apply to fuel produced, and sold or 

used, after December 31, 2008. 

(2) COPRODUCTION OF RENEWABLE DIESEL WITH

PETROLEUM FEEDSTOCK.—The amendment made 

by subsection (d) shall apply to fuel produced, 

and sold or used, after the date of the enactment of this Act. 

SEC. 203. CLARIFICATION THAT CREDITS FOR 

FUEL ARE DESIGNED TO PROVIDE 

AN INCENTIVE FOR UNITED STATES 

PRODUCTION. 

(a) ALCOHOL FUELS CREDIT.—Subsection (d) 

of section 40 is amended by adding at the end 

the following new paragraph: 

‘‘(7) LIMITATION TO ALCOHOL WITH CONNECTION TO THE UNITED STATES.—No credit shall be 

determined under this section with respect to 

any alcohol which is produced outside the 

United States for use as a fuel outside the 

United States. For purposes of this paragraph, 

the term ‘United States’ includes any possession 

of the United States.’’. 

(b) BIODIESEL FUELS CREDIT.—Subsection (d) 

of section 40A is amended by adding at the end 

the following new paragraph: 

‘‘(5) LIMITATION TO BIODIESEL WITH CONNECTION TO THE UNITED STATES.—No credit shall be 

determined under this section with respect to 

any biodiesel which is produced outside the 

United States for use as a fuel outside the 

United States. For purposes of this paragraph, 

the term ‘United States’ includes any possession 

of the United States.’’. 

(c) EXCISE TAX CREDIT.— 

(1) IN GENERAL.—Section 6426 is amended by 

adding at the end the following new subsection: 

‘‘(i) LIMITATION TO FUELS WITH CONNECTION

TO THE UNITED STATES.— 

‘‘(1) ALCOHOL.—No credit shall be determined 

under this section with respect to any alcohol 

which is produced outside the United States for 

use as a fuel outside the United States. 

‘‘(2) BIODIESEL AND ALTERNATIVE FUELS.—No 

credit shall be determined under this section 

with respect to any biodiesel or alternative fuel 

which is produced outside the United States for 

use as a fuel outside the United States. 

For purposes of this subsection, the term ‘United 

States’ includes any possession of the United 

States.’’. 

(2) CONFORMING AMENDMENT.—Subsection (e) 

of section 6427 is amended by redesignating 

paragraph (5) as paragraph (6) and by inserting 

after paragraph (4) the following new paragraph: 

‘‘(5) LIMITATION TO FUELS WITH CONNECTION

TO THE UNITED STATES.—No amount shall be 

payable under paragraph (1) or (2) with respect 

to any mixture or alternative fuel if credit is not 

allowed with respect to such mixture or alternative fuel by reason of section 6426(i).’’. 

(d) EFFECTIVE DATE.—The amendments made 

by this section shall apply to claims for credit or 

payment made on or after May 15, 2008. 

SEC. 204. EXTENSION AND MODIFICATION OF ALTERNATIVE FUEL CREDIT. 

(a) EXTENSION.— 

(1) ALTERNATIVE FUEL CREDIT.—Paragraph (4) 

of section 6426(d) (relating to alternative fuel 

credit) is amended by striking ‘‘September 30, 

2009’’ and inserting ‘‘December 31, 2009’’. 

(2) ALTERNATIVE FUEL MIXTURE CREDIT.— 

Paragraph (3) of section 6426(e) (relating to alternative fuel mixture credit) is amended by 

striking ‘‘September 30, 2009’’ and inserting 

‘‘December 31, 2009’’. 

(3) PAYMENTS.—Subparagraph (C) of section 

6427(e)(5) (relating to termination) is amended 

by striking ‘‘September 30, 2009’’ and inserting 

‘‘December 31, 2009’’. 

(b) MODIFICATIONS.— 

(1) ALTERNATIVE FUEL TO INCLUDE COMPRESSED OR LIQUIFIED BIOMASS GAS.—Paragraph 

(2) of section 6426(d) (relating to alternative fuel 

credit) is amended by striking ‘‘and’’ at the end 

of subparagraph (E), by redesignating subparagraph (F) as subparagraph (G), and by inserting 

after subparagraph (E) the following new subparagraph: 

‘‘(F) compressed or liquefied gas derived from 

biomass (as defined in section 45K(c)(3)), and’’. 

(2) CREDIT ALLOWED FOR AVIATION USE OF

FUEL.—Paragraph (1) of section 6426(d) is 

amended by inserting ‘‘sold by the taxpayer for 

use as a fuel in aviation,’’ after ‘‘motorboat,’’. 

(c) CARBON CAPTURE REQUIREMENT FOR CERTAIN FUELS.— 

(1) IN GENERAL.—Subsection (d) of section 

6426, as amended by subsection (a), is amended 

by redesignating paragraph (4) as paragraph (5) 

and by inserting after paragraph (3) the following new paragraph: 

‘‘(4) CARBON CAPTURE REQUIREMENT.— 

‘‘(A) IN GENERAL.—The requirements of this 

paragraph are met if the fuel is certified, under 

such procedures as required by the Secretary, as 

having been derived from coal produced at a 

gasification facility which separates and sequesters not less than the applicable percentage of 

such facility’s total carbon dioxide emissions. 

‘‘(B) APPLICABLE PERCENTAGE.—For purposes 

of subparagraph (A), the applicable percentage 

is— 

‘‘(i) 50 percent in the case of fuel produced 

after September 30, 2009, and on or before December 30, 2009, and 

‘‘(ii) 75 percent in the case of fuel produced 

after December 30, 2009.’’. 

(2) CONFORMING AMENDMENT.—Subparagraph 

(E) of section 6426(d)(2) is amended by inserting 

‘‘which meets the requirements of paragraph (4) 

and which is’’ after ‘‘any liquid fuel’’. 


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October 3, 2008 CONGRESSIONAL RECORD — HOUSE H10731 

(d) EFFECTIVE DATE.—The amendments made 

by this section shall apply to fuel sold or used 

after the date of the enactment of this Act. 

SEC. 205. CREDIT FOR NEW QUALIFIED PLUG-IN 

ELECTRIC DRIVE MOTOR VEHICLES. 

(a) PLUG-IN ELECTRIC DRIVE MOTOR VEHICLE

CREDIT.—Subpart B of part IV of subchapter A 

of chapter 1 (relating to other credits) is amended by adding at the end the following new section: 

‘‘SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC 

DRIVE MOTOR VEHICLES. 

‘‘(a) ALLOWANCE OF CREDIT.— 

‘‘(1) IN GENERAL.—There shall be allowed as a 

credit against the tax imposed by this chapter 

for the taxable year an amount equal to the applicable amount with respect to each new qualified plug-in electric drive motor vehicle placed 

in service by the taxpayer during the taxable 

year. 

‘‘(2) APPLICABLE AMOUNT.—For purposes of 

paragraph (1), the applicable amount is sum 

of— 

‘‘(A) $2,500, plus 

‘‘(B) $417 for each kilowatt hour of traction 

battery capacity in excess of 4 kilowatt hours. 

‘‘(b) LIMITATIONS.— 

‘‘(1) LIMITATION BASED ON WEIGHT.—The 

amount of the credit allowed under subsection 

(a) by reason of subsection (a)(2) shall not exceed— 

‘‘(A) $7,500, in the case of any new qualified 

plug-in electric drive motor vehicle with a gross 

vehicle weight rating of not more than 10,000 

pounds, 

‘‘(B) $10,000, in the case of any new qualified 

plug-in electric drive motor vehicle with a gross 

vehicle weight rating of more than 10,000 

pounds but not more than 14,000 pounds, 

‘‘(C) $12,500, in the case of any new qualified 

plug-in electric drive motor vehicle with a gross 

vehicle weight rating of more than 14,000 

pounds but not more than 26,000 pounds, and 

‘‘(D) $15,000, in the case of any new qualified 

plug-in electric drive motor vehicle with a gross 

vehicle weight rating of more than 26,000 

pounds. 

‘‘(2) LIMITATION ON NUMBER OF PASSENGER VEHICLES AND LIGHT TRUCKS ELIGIBLE FOR CREDIT.— 

‘‘(A) IN GENERAL.—In the case of a new qualified plug-in electric drive motor vehicle sold during the phaseout period, only the applicable 

percentage of the credit otherwise allowable 

under subsection (a) shall be allowed. 

‘‘(B) PHASEOUT PERIOD.—For purposes of this 

subsection, the phaseout period is the period beginning with the second calendar quarter following the calendar quarter which includes the 

first date on which the total number of such 

new qualified plug-in electric drive motor vehicles sold for use in the United States after December 31, 2008, is at least 250,000. 

‘‘(C) APPLICABLE PERCENTAGE.—For purposes 

of subparagraph (A), the applicable percentage 

is— 

‘‘(i) 50 percent for the first 2 calendar quarters 

of the phaseout period, 

‘‘(ii) 25 percent for the 3d and 4th calendar 

quarters of the phaseout period, and 

‘‘(iii) 0 percent for each calendar quarter 

thereafter. 

‘‘(D) CONTROLLED GROUPS.—Rules similar to 

the rules of section 30B(f)(4) shall apply for purposes of this subsection. 

‘‘(c) NEW QUALIFIED PLUG-IN ELECTRIC DRIVE

MOTOR VEHICLE.—For purposes of this section, 

the term ‘new qualified plug-in electric drive 

motor vehicle’ means a motor vehicle— 

‘‘(1) which draws propulsion using a traction 

battery with at least 4 kilowatt hours of capacity, 

‘‘(2) which uses an offboard source of energy 

to recharge such battery, 

‘‘(3) which, in the case of a passenger vehicle 

or light truck which has a gross vehicle weight 

rating of not more than 8,500 pounds, has received a certificate of conformity under the 

Clean Air Act and meets or exceeds the equivalent qualifying California low emission vehicle 

standard under section 243(e)(2) of the Clean 

Air Act for that make and model year, and 

‘‘(A) in the case of a vehicle having a gross 

vehicle weight rating of 6,000 pounds or less, the 

Bin 5 Tier II emission standard established in 

regulations prescribed by the Administrator of 

the Environmental Protection Agency under section 202(i) of the Clean Air Act for that make 

and model year vehicle, and 

‘‘(B) in the case of a vehicle having a gross 

vehicle weight rating of more than 6,000 pounds 

but not more than 8,500 pounds, the Bin 8 Tier 

II emission standard which is so established, 

‘‘(4) the original use of which commences with 

the taxpayer, 

‘‘(5) which is acquired for use or lease by the 

taxpayer and not for resale, and 

‘‘(6) which is made by a manufacturer. 

‘‘(d) APPLICATION WITH OTHER CREDITS.— 

‘‘(1) BUSINESS CREDIT TREATED AS PART OF

GENERAL BUSINESS CREDIT.—So much of the 

credit which would be allowed under subsection 

(a) for any taxable year (determined without regard to this subsection) that is attributable to 

property of a character subject to an allowance 

for depreciation shall be treated as a credit listed in section 38(b) for such taxable year (and 

not allowed under subsection (a)). 

‘‘(2) PERSONAL CREDIT.— 

‘‘(A) IN GENERAL.—For purposes of this title, 

the credit allowed under subsection (a) for any 

taxable year (determined after application of 

paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year. 

‘‘(B) 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 any taxable year (determined 

after application of paragraph (1)) shall not exceed the excess of— 

‘‘(i) the sum of the regular tax liability (as defined in section 26(b)) plus the tax imposed by 

section 55, over 

‘‘(ii) the sum of the credits allowable under 

subpart A (other than this section and sections 

23 and 25D) and section 27 for the taxable year. 

‘‘(e) OTHER DEFINITIONS AND SPECIAL

RULES.—For purposes of this section— 

‘‘(1) MOTOR VEHICLE.—The term ‘motor vehicle’ has the meaning given such term by section 

30(c)(2). 

‘‘(2) OTHER TERMS.—The terms ‘passenger 

automobile’, ‘light truck’, and ‘manufacturer’ 

have the meanings given such terms in regulations prescribed by the Administrator of the Environmental Protection Agency for purposes of 

the administration of title II of the Clean Air 

Act (42 U.S.C. 7521 et seq.). 

‘‘(3) TRACTION BATTERY CAPACITY.—Traction 

battery capacity shall be measured in kilowatt 

hours from a 100 percent state of charge to a 

zero percent state of charge. 

‘‘(4) REDUCTION IN BASIS.—For purposes of 

this subtitle, the basis of any property for which 

a credit is allowable under subsection (a) shall 

be reduced by the amount of such credit so allowed. 

‘‘(5) NO DOUBLE BENEFIT.—The amount of any 

deduction or other credit allowable under this 

chapter for a new qualified plug-in electric drive 

motor vehicle shall be reduced by the amount of 

credit allowed under subsection (a) for such vehicle for the taxable year. 

‘‘(6) PROPERTY USED BY TAX-EXEMPT ENTITY.—In the case of a vehicle the use of which is 

described in paragraph (3) or (4) of section 50(b) 

and which is not subject to a lease, the person 

who sold such vehicle to the person or entity 

using such vehicle shall be treated as the taxpayer that placed such vehicle in service, but 

only if such person clearly discloses to such person or entity in a document the amount of any 

credit allowable under subsection (a) with respect to such vehicle (determined without regard 

to subsection (b)(2)). 

‘‘(7) PROPERTY USED OUTSIDE UNITED STATES, 

ETC., NOT QUALIFIED.—No credit shall be allowable under subsection (a) with respect to any 

property referred to in section 50(b)(1) or with 

respect to the portion of the cost of any property 

taken into account under section 179. 

‘‘(8) RECAPTURE.—The Secretary shall, by regulations, provide for recapturing the benefit of 

any credit allowable under subsection (a) with 

respect to any property which ceases to be property eligible for such credit (including recapture 

in the case of a lease period of less than the economic life of a vehicle). 

‘‘(9) ELECTION TO NOT TAKE CREDIT.—No credit shall be allowed under subsection (a) for any 

vehicle if the taxpayer elects not to have this 

section apply to such vehicle. 

‘‘(10) INTERACTION WITH AIR QUALITY AND

MOTOR VEHICLE SAFETY STANDARDS.—Unless 

otherwise provided in this section, a motor vehicle shall not be considered eligible for a credit 

under this section unless such vehicle is in compliance with— 

‘‘(A) the applicable provisions of the Clean 

Air Act for the applicable make and model year 

of the vehicle (or applicable air quality provisions of State law in the case of a State which 

has adopted such provision under a waiver 

under section 209(b) of the Clean Air Act), and 

‘‘(B) the motor vehicle safety provisions of 

sections 30101 through 30169 of title 49, United 

States Code. 

‘‘(f) REGULATIONS.— 

‘‘(1) IN GENERAL.—Except as provided in paragraph (2), the Secretary shall promulgate such 

regulations as necessary to carry out the provisions of this section. 

‘‘(2) COORDINATION IN PRESCRIPTION OF CERTAIN REGULATIONS.—The Secretary of the Treasury, in coordination with the Secretary of 

Transportation and the Administrator of the 

Environmental Protection Agency, shall prescribe such regulations as necessary to determine whether a motor vehicle meets the requirements to be eligible for a credit under this section. 

‘‘(g) TERMINATION.—This section shall not 

apply to property purchased after December 31, 

2014.’’. 

(b) COORDINATION WITH ALTERNATIVE MOTOR

VEHICLE CREDIT.—Section 30B(d)(3) is amended 

by adding at the end the following new subparagraph: 

‘‘(D) EXCLUSION OF PLUG-IN VEHICLES.—Any 

vehicle with respect to which a credit is allowable under section 30D (determined without regard to subsection (d) thereof) shall not be 

taken into account under this section.’’. 

(c) CREDIT MADE PART OF GENERAL BUSINESS

CREDIT.—Section 38(b), as amended by this Act, 

is amended by striking ‘‘plus’’ at the end of 

paragraph (33), by striking the period at the end 

of paragraph (34) and inserting ‘‘plus’’, and by 

adding at the end the following new paragraph: 

‘‘(35) the portion of the new qualified plug-in 

electric drive motor vehicle credit to which section 30D(d)(1) applies.’’. 

(d) CONFORMING AMENDMENTS.— 

(1)(A) Section 24(b)(3)(B), as amended by section 106, is amended by striking ‘‘and 25D’’ and 

inserting ‘‘25D, and 30D’’. 

(B) Section 25(e)(1)(C)(ii) is amended by inserting ‘‘30D,’’ after ‘‘25D,’’. 

(C) Section 25B(g)(2), as amended by section 

106, is amended by striking ‘‘and 25D’’ and inserting ‘‘, 25D, and 30D’’. 

(D) Section 26(a)(1), as amended by section 

106, is amended by striking ‘‘and 25D’’ and inserting ‘‘25D, and 30D’’. 

(E) Section 1400C(d)(2) is amended by striking 

‘‘and 25D’’ and inserting ‘‘25D, and 30D’’. 

(2) Section 1016(a) is amended by striking 

‘‘and’’ at the end of paragraph (35), by striking 

the period at the end of paragraph (36) and inserting ‘‘, and’’, and by adding at the end the 

following new paragraph: 

‘‘(37) to the extent provided in section 

30D(e)(4).’’. 


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(3) Section 6501(m) is amended by inserting 

‘‘30D(e)(9),’’ after ‘‘30C(e)(5),’’. 

(4) The table of sections for subpart B of part 

IV of subchapter A of chapter 1 is amended by 

adding at the end the following new item: 

‘‘Sec. 30D. New qualified plug-in electric drive 

motor vehicles.’’. 

(e) EFFECTIVE DATE.—The amendments made 

by this section shall apply to taxable years beginning after December 31, 2008. 

(f) APPLICATION OF EGTRRA SUNSET.—The 

amendment made by subsection (d)(1)(A) shall 

be subject to title IX of the Economic Growth 

and Tax Relief Reconciliation Act of 2001 in the 

same manner as the provision of such Act to 

which such amendment relates. 

SEC. 206. EXCLUSION FROM HEAVY TRUCK TAX 

FOR IDLING REDUCTION UNITS AND 

ADVANCED INSULATION. 

(a) IN GENERAL.—Section 4053 is amended by 

adding at the end the following new paragraphs: 

‘‘(9) IDLING REDUCTION DEVICE.—Any device 

or system of devices which— 

‘‘(A) is designed to provide to a vehicle those 

services (such as heat, air conditioning, or electricity) that would otherwise require the operation of the main drive engine while the vehicle 

is temporarily parked or remains stationary 

using one or more devices affixed to a tractor, 

and 

‘‘(B) is determined by the Administrator of the 

Environmental Protection Agency, in consultation with the Secretary of Energy and the Secretary of Transportation, to reduce idling of 

such vehicle at a motor vehicle rest stop or other 

location where such vehicles are temporarily 

parked or remain stationary. 

‘‘(10) ADVANCED INSULATION.—Any insulation 

that has an R value of not less than R35 per 

inch.’’. 

(b) EFFECTIVE DATE.—The amendment made 

by this section shall apply to sales or installations after the date of the enactment of this Act. 

SEC. 207. ALTERNATIVE FUEL VEHICLE REFUELING PROPERTY CREDIT. 

(a) EXTENSION OF CREDIT.—Paragraph (2) of 

section 30C(g) is amended by striking ‘‘December 

31, 2009’’ and inserting ‘‘December 31, 2010’’. 

(b) INCLUSION OF ELECTRICITY AS A CLEANBURNING FUEL.—Section 30C(c)(2) is amended 

by adding at the end the following new subparagraph: 

‘‘(C) Electricity.’’. 

(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, in taxable years ending after such date. 

SEC. 208. CERTAIN INCOME AND GAINS RELATING 

TO ALCOHOL FUELS AND MIXTURES, 

BIODIESEL FUELS AND MIXTURES, 

AND ALTERNATIVE FUELS AND MIXTURES TREATED AS QUALIFYING INCOME FOR PUBLICLY TRADED PARTNERSHIPS. 

(a) IN GENERAL.—Subparagraph (E) of section 

7704(d)(1), as amended by this Act, is amended 

by striking ‘‘or industrial source carbon dioxide’’ and inserting ‘‘, industrial source carbon 

dioxide, or the transportation or storage of any 

fuel described in subsection (b), (c), (d), or (e) of 

section 6426, or any alcohol fuel defined in section 6426(b)(4)(A) or any biodiesel fuel as defined in section 40A(d)(1)’’ after ‘‘timber)’’. 

(b) EFFECTIVE DATE.—The amendment made 

by this section shall take effect on the date of 

the enactment of this Act, in taxable years ending after such date. 

SEC. 209. EXTENSION AND MODIFICATION OF 

ELECTION TO EXPENSE CERTAIN REFINERIES. 

(a) EXTENSION.—Paragraph (1) of section 

179C(c) (relating to qualified refinery property) 

is amended— 

(1) by striking ‘‘January 1, 2012’’ in subparagraph (B) and inserting ‘‘January 1, 2014’’, and 

(2) by striking ‘‘January 1, 2008’’ each place it 

appears in subparagraph (F) and inserting 

‘‘January 1, 2010’’. 

(b) INCLUSION OF FUEL DERIVED FROM SHALE

AND TAR SANDS.— 

(1) IN GENERAL.—Subsection (d) of section 

179C is amended by inserting ‘‘, or directly from 

shale or tar sands’’ after ‘‘(as defined in section 

45K(c))’’. 

(2) CONFORMING AMENDMENT.—Paragraph (2) 

of section 179C(e) is amended by inserting 

‘‘shale, tar sands, or’’ before ‘‘qualified fuels’’. 

(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. 210. EXTENSION OF SUSPENSION OF TAXABLE INCOME LIMIT ON PERCENTAGE DEPLETION FOR OIL AND NATURAL GAS PRODUCED FROM MARGINAL PROPERTIES. 

Subparagraph (H) of section 613A(c)(6) (relating to oil and gas produced from marginal properties) is amended by striking ‘‘for any taxable 

year’’ and all that follows and inserting ‘‘for 

any taxable year— 

‘‘(i) beginning after December 31, 1997, and before January 1, 2008, or 

‘‘(ii) beginning after December 31, 2008, and 

before January 1, 2010.’’. 

SEC. 211. TRANSPORTATION FRINGE BENEFIT TO 

BICYCLE COMMUTERS. 

(a) IN GENERAL.—Paragraph (1) of section 

132(f) is amended by adding at the end the following: 

‘‘(D) Any qualified bicycle commuting reimbursement.’’. 

(b) LIMITATION ON EXCLUSION.—Paragraph (2) 

of section 132(f) is amended by striking ‘‘and’’ 

at the end of subparagraph (A), by striking the 

period at the end of subparagraph (B) and inserting ‘‘, and’’, and by adding at the end the 

following new subparagraph: 

‘‘(C) the applicable annual limitation in the 

case of any qualified bicycle commuting reimbursement.’’. 

(c) DEFINITIONS.—Paragraph (5) of section 

132(f) is amended by adding at the end the following: 

‘‘(F) DEFINITIONS RELATED TO BICYCLE COMMUTING REIMBURSEMENT.— 

‘‘(i) QUALIFIED BICYCLE COMMUTING REIMBURSEMENT.—The term ‘qualified bicycle commuting reimbursement’ means, with respect to 

any calendar year, any employer reimbursement 

during the 15-month period beginning with the 

first day of such calendar year for reasonable 

expenses incurred by the employee during such 

calendar year for the purchase of a bicycle and 

bicycle improvements, repair, and storage, if 

such bicycle is regularly used for travel between 

the employee’s residence and place of employment. 

‘‘(ii) APPLICABLE ANNUAL LIMITATION.—The 

term ‘applicable annual limitation’ means, with 

respect to any employee for any calendar year, 

the product of $20 multiplied by the number of 

qualified bicycle commuting months during such 

year. 

‘‘(iii) QUALIFIED BICYCLE COMMUTING

MONTH.—The term ‘qualified bicycle commuting 

month’ means, with respect to any employee, 

any month during which such employee— 

‘‘(I) regularly uses the bicycle for a substantial portion of the travel between the employee’s 

residence and place of employment, and 

‘‘(II) does not receive any benefit described in 

subparagraph (A), (B), or (C) of paragraph 

(1).’’. 

(d) CONSTRUCTIVE RECEIPT OF BENEFIT.— 

Paragraph (4) of section 132(f) is amended by inserting ‘‘(other than a qualified bicycle commuting reimbursement)’’ after ‘‘qualified transportation fringe’’. 

(e) EFFECTIVE DATE.—The amendments made 

by this section shall apply to taxable years beginning after December 31, 2008. 

TITLE III—ENERGY CONSERVATION AND 

EFFICIENCY PROVISIONS 

SEC. 301. QUALIFIED ENERGY CONSERVATION 

BONDS. 

(a) IN GENERAL.—Subpart I of part IV of subchapter A of chapter 1, as amended by section 

107, is amended by adding at the end the following new section: 

‘‘SEC. 54D. QUALIFIED ENERGY CONSERVATION 

BONDS. 

‘‘(a) QUALIFIED ENERGY CONSERVATION

BOND.—For purposes of this subchapter, the 

term ‘qualified energy conservation bond’ means 

any bond issued as part of an issue if— 

‘‘(1) 100 percent of the available project proceeds of such issue are to be used for one or 

more qualified conservation purposes, 

‘‘(2) the bond is issued by a State or local government, and 

‘‘(3) the issuer designates such bond for purposes of this section. 

‘‘(b) REDUCED CREDIT AMOUNT.—The annual 

credit determined under section 54A(b) with respect to any qualified energy conservation bond 

shall be 70 percent of the amount so determined 

without regard to this subsection. 

‘‘(c) LIMITATION ON AMOUNT OF BONDS DESIGNATED.—The maximum aggregate face amount 

of bonds which may be designated under subsection (a) by any issuer shall not exceed the 

limitation amount allocated to such issuer under 

subsection (e). 

‘‘(d) NATIONAL LIMITATION ON AMOUNT OF

BONDS DESIGNATED.—There is a national qualified energy conservation bond limitation of 

$800,000,000. 

‘‘(e) ALLOCATIONS.— 

‘‘(1) IN GENERAL.—The limitation applicable 

under subsection (d) shall be allocated by the 

Secretary among the States in proportion to the 

population of the States. 

‘‘(2) ALLOCATIONS TO LARGEST LOCAL GOVERNMENTS.— 

‘‘(A) IN GENERAL.—In the case of any State in 

which there is a large local government, each 

such local government shall be allocated a portion of such State’s allocation which bears the 

same ratio to the State’s allocation (determined 

without regard to this subparagraph) as the 

population of such large local government bears 

to the population of such State. 

‘‘(B) ALLOCATION OF UNUSED LIMITATION TO

STATE.—The amount allocated under this subsection to a large local government may be reallocated by such local government to the State 

in which such local government is located. 

‘‘(C) LARGE LOCAL GOVERNMENT.—For purposes of this section, the term ‘large local government’ means any municipality or county if 

such municipality or county has a population of 

100,000 or more. 

‘‘(3) ALLOCATION TO ISSUERS; RESTRICTION ON

PRIVATE ACTIVITY BONDS.—Any allocation under 

this subsection to a State or large local government shall be allocated by such State or large 

local government to issuers within the State in 

a manner that results in not less than 70 percent 

of the allocation to such State or large local 

government being used to designate bonds which 

are not private activity bonds. 

‘‘(f) QUALIFIED CONSERVATION PURPOSE.—For 

purposes of this section— 

‘‘(1) IN GENERAL.—The term ‘qualified conservation purpose’ means any of the following: 

‘‘(A) Capital expenditures incurred for purposes of— 

‘‘(i) reducing energy consumption in publiclyowned buildings by at least 20 percent, 

‘‘(ii) implementing green community programs, 

‘‘(iii) rural development involving the production of electricity from renewable energy resources, or 

‘‘(iv) any qualified facility (as determined 

under section 45(d) without regard to paragraphs (8) and (10) thereof and without regard 

to any placed in service date). 

‘‘(B) Expenditures with respect to research facilities, and research grants, to support research 

in— 

‘‘(i) development of cellulosic ethanol or other 

nonfossil fuels, 

‘‘(ii) technologies for the capture and sequestration of carbon dioxide produced through the 

use of fossil fuels, 


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‘‘(iii) increasing the efficiency of existing 

technologies for producing nonfossil fuels, 

‘‘(iv) automobile battery technologies and 

other technologies to reduce fossil fuel consumption in transportation, or 

‘‘(v) technologies to reduce energy use in 

buildings. 

‘‘(C) Mass commuting facilities and related facilities that reduce the consumption of energy, 

including expenditures to reduce pollution from 

vehicles used for mass commuting. 

‘‘(D) Demonstration projects designed to promote the commercialization of— 

‘‘(i) green building technology, 

‘‘(ii) conversion of agricultural waste for use 

in the production of fuel or otherwise, 

‘‘(iii) advanced battery manufacturing technologies, 

‘‘(iv) technologies to reduce peak use of electricity, or 

‘‘(v) technologies for the capture and sequestration of carbon dioxide emitted from combusting fossil fuels in order to produce electricity. 

‘‘(E) Public education campaigns to promote 

energy efficiency. 

‘‘(2) SPECIAL RULES FOR PRIVATE ACTIVITY

BONDS.—For purposes of this section, in the case 

of any private activity bond, the term ‘qualified 

conservation purposes’ shall not include any expenditure which is not a capital expenditure. 

‘‘(g) POPULATION.— 

‘‘(1) IN GENERAL.—The population of any 

State or local government shall be determined 

for purposes of this section as provided in section 146(j) for the calendar year which includes 

the date of the enactment of this section. 

‘‘(2) SPECIAL RULE FOR COUNTIES.—In determining the population of any county for purposes of this section, any population of such 

county which is taken into account in determining the population of any municipality 

which is a large local government shall not be 

taken into account in determining the population of such county. 

‘‘(h) APPLICATION TO INDIAN TRIBAL GOVERNMENTS.—An Indian tribal government shall be 

treated for purposes of this section in the same 

manner as a large local government, except 

that— 

‘‘(1) an Indian tribal government shall be 

treated for purposes of subsection (e) as located 

within a State to the extent of so much of the 

population of such government as resides within 

such State, and 

‘‘(2) any bond issued by an Indian tribal government shall be treated as a qualified energy 

conservation bond only if issued as part of an 

issue the available project proceeds of which are 

used for purposes for which such Indian tribal 

government could issue bonds to which section 

103(a) applies.’’. 

(b) CONFORMING AMENDMENTS.— 

(1) Paragraph (1) of section 54A(d), as amended by this Act, is amended to read as follows: 

‘‘(1) QUALIFIED TAX CREDIT BOND.—The term 

‘qualified tax credit bond’ means— 

‘‘(A) a qualified forestry conservation bond, 

‘‘(B) a new clean renewable energy bond, or 

‘‘(C) a qualified energy conservation bond, 

which is part of an issue that meets requirements of paragraphs (2), (3), (4), (5), and (6).’’. 

(2) Subparagraph (C) of section 54A(d)(2), as 

amended by this Act, is amended to read as follows: 

‘‘(C) QUALIFIED PURPOSE.—For purposes of 

this paragraph, the term ‘qualified purpose’ 

means— 

‘‘(i) in the case of a qualified forestry conservation bond, a purpose specified in section 

54B(e), 

‘‘(ii) in the case of a new clean renewable energy bond, a purpose specified in section 

54C(a)(1), and 

‘‘(iii) in the case of a qualified energy conservation bond, a purpose specified in section 

54D(a)(1).’’. 

(3) The table of sections for subpart I of part 

IV of subchapter A of chapter 1, as amended by 

this Act, is amended by adding at the end the 

following new item: 

‘‘Sec. 54D. Qualified energy conservation 

bonds.’’. 

(c) EFFECTIVE DATE.—The amendments made 

by this section shall apply to obligations issued 

after the date of the enactment of this Act. 

SEC. 302. CREDIT FOR NONBUSINESS ENERGY 

PROPERTY. 

(a) EXTENSION OF CREDIT.—Section 25C(g) is 

amended by striking ‘‘placed in service after December 31, 2007’’ and inserting ‘‘placed in service— 

‘‘(1) after December 31, 2007, and before January 1, 2009, or 

‘‘(2) after 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) 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) MODIFICATION OF WATER HEATER REQUIREMENTS.—Section 25C(d)(3)(E) is amended 

by inserting ‘‘or a thermal efficiency of at least 

90 percent’’ after ‘‘0.80’’. 

(d) COORDINATION WITH CREDIT FOR QUALIFIED GEOTHERMAL HEAT PUMP PROPERTY EXPENDITURES.— 

(1) IN GENERAL.—Paragraph (3) of section 

25C(d), as amended by subsections (b) and (c), is 

amended by striking subparagraph (C) and by 

redesignating subparagraphs (D), (E), and (F) 

as subparagraphs (C), (D), and (E), respectively. 

(2) CONFORMING AMENDMENT.—Subparagraph 

(C) of section 25C(d)(2) is amended to read as 

follows: 

‘‘(C) REQUIREMENTS AND STANDARDS FOR AIR

CONDITIONERS AND HEAT PUMPS.—The standards 

and requirements prescribed by the Secretary 

under subparagraph (B) with respect to the energy efficiency ratio (EER) for central air conditioners and electric heat pumps— 

‘‘(i) shall require measurements to be based on 

published data which is tested by manufacturers 

at 95 degrees Fahrenheit, and 

‘‘(ii) may be based on the certified data of the 

Air Conditioning and Refrigeration Institute 

that are prepared in partnership with the Consortium for Energy Efficiency.’’. 

(e) MODIFICATION OF QUALIFIED ENERGY EFFICIENCY IMPROVEMENTS.— 

(1) IN GENERAL.—Paragraph (1) of section 

25C(c) is amended by inserting ‘‘, or an asphalt 

roof with appropriate cooling granules,’’ before 

‘‘which meet the Energy Star program requirements’’. 

(2) BUILDING ENVELOPE COMPONENT.—Subparagraph (D) of section 25C(c)(2) is amended— 

(A) by inserting ‘‘or asphalt roof’’ after 

‘‘metal roof’’, and 

(B) by inserting ‘‘or cooling granules’’ after 

‘‘pigmented coatings’’. 

(f) EFFECTIVE DATES.— 

(1) IN GENERAL.—Except as provided in paragraph (2), the amendments made this section 

shall apply to expenditures made after December 

31, 2008. 

(2) MODIFICATION OF QUALIFIED ENERGY EFFICIENCY IMPROVEMENTS.—The amendments made 

by subsection (e) shall apply to property placed 

in service after the date of the enactment of this 

Act. 

SEC. 303. ENERGY EFFICIENT COMMERCIAL 

BUILDINGS DEDUCTION. 

Subsection (h) of section 179D is amended by 

striking ‘‘December 31, 2008’’ and inserting ‘‘December 31, 2013’’. 

SEC. 304. 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. 305. MODIFICATIONS OF ENERGY EFFICIENT 

APPLIANCE CREDIT FOR APPLIANCES PRODUCED AFTER 2007. 

(a) IN GENERAL.—Subsection (b) of section 

45M 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 is amended— 

(A) by striking paragraph (2), 

(B) by striking ‘‘(1) IN GENERAL’’ and all that 

follows through ‘‘the eligible’’ and inserting 

‘‘The eligible’’, 

(C) by moving the text of such subsection in 

line with the subsection heading, and 


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(D) by redesignating subparagraphs (A) and 

(B) as paragraphs (1) and (2), respectively, and 

by moving such paragraphs 2 ems to the left. 

(2) MODIFICATION OF BASE PERIOD.—Paragraph (2) of section 45M(c), as amended by 

paragraph (1), is amended by striking ‘‘3-calendar year’’ and inserting ‘‘2-calendar year’’. 

(c) TYPES OF ENERGY EFFICIENT APPLIANCES.—Subsection (d) of section 45M 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) 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) 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) is 

amended by inserting ‘‘commercial’’ before ‘‘residential’’ the second place it appears. 

(3) TOP-LOADING CLOTHES WASHER.—Subsection (f) of section 45M 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), 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. 

SEC. 306. ACCELERATED RECOVERY PERIOD FOR 

DEPRECIATION OF SMART METERS 

AND SMART GRID SYSTEMS. 

(a) IN GENERAL.—Section 168(e)(3)(D) 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 inserting 

after clause (ii) the following new clauses: 

‘‘(iii) any qualified smart electric meter, and 

‘‘(iv) any qualified smart electric grid system.’’. 

(b) DEFINITIONS.—Section 168(i) is amended by 

inserting at the end the following new paragraph: 

‘‘(18) QUALIFIED SMART ELECTRIC METERS.— 

‘‘(A) IN GENERAL.—The term ‘qualified smart 

electric meter’ means any smart electric meter 

which— 

‘‘(i) is placed in service by a taxpayer who is 

a supplier of electric energy or a provider of 

electric energy services, and 

‘‘(ii) does not have a class life (determined 

without regard to subsection (e)) of less than 10 

years. 

‘‘(B) SMART ELECTRIC METER.—For purposes 

of subparagraph (A), the term ‘smart electric 

meter’ means any time-based meter and related 

communication equipment which is capable of 

being used by the taxpayer as part of a system 

that— 

‘‘(i) measures and records electricity usage 

data on a time-differentiated basis in at least 24 

separate time segments per day, 

‘‘(ii) provides for the exchange of information 

between supplier or provider and the customer’s 

electric meter in support of time-based rates or 

other forms of demand response, 

‘‘(iii) provides data to such supplier or provider so that the supplier or provider can provide energy usage information to customers electronically, and 

‘‘(iv) provides net metering. 

‘‘(19) QUALIFIED SMART ELECTRIC GRID SYSTEMS.— 

‘‘(A) IN GENERAL.—The term ‘qualified smart 

electric grid system’ means any smart grid property which— 

‘‘(i) is used as part of a system for electric distribution grid communications, monitoring, and 

management placed in service by a taxpayer 

who is a supplier of electric energy or a provider 

of electric energy services, and 

‘‘(ii) does not have a class life (determined 

without regard to subsection (e)) of less than 10 

years. 

‘‘(B) SMART GRID PROPERTY.—For the purposes of subparagraph (A), the term ‘smart grid 

property’ means electronics and related equipment that is capable of— 

‘‘(i) sensing, collecting, and monitoring data 

of or from all portions of a utility’s electric distribution grid, 

‘‘(ii) providing real-time, two-way communications to monitor or manage such grid, and 

‘‘(iii) providing real time analysis of and event 

prediction based upon collected data that can be 

used to improve electric distribution system reliability, quality, and performance.’’. 

(c) CONTINUED APPLICATION OF 150 PERCENT

DECLINING BALANCE METHOD.—Paragraph (2) of 

section 168(b) is amended by striking ‘‘or’’ at the 

end of subparagraph (B), by redesignating subparagraph (C) as subparagraph (D), and by inserting after subparagraph (B) the following 

new subparagraph: 

‘‘(C) any property (other than property described in paragraph (3)) which is a qualified 

smart electric meter or qualified smart electric 

grid system, or’’. 

(d) 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. 307. QUALIFIED GREEN BUILDING AND SUSTAINABLE DESIGN PROJECTS. 

(a) IN GENERAL.—Paragraph (8) of section 

142(l) is amended by striking ‘‘September 30, 

2009’’ and inserting ‘‘September 30, 2012’’. 

(b) TREATMENT OF CURRENT REFUNDING

BONDS.—Paragraph (9) of section 142(l) is 

amended by striking ‘‘October 1, 2009’’ and inserting ‘‘October 1, 2012’’. 

(c) ACCOUNTABILITY.—The second sentence of 

section 701(d) of the American Jobs Creation Act 

of 2004 is amended by striking ‘‘issuance,’’ and 

inserting ‘‘issuance of the last issue with respect 

to such project,’’. 

SEC. 308. SPECIAL DEPRECIATION ALLOWANCE 

FOR CERTAIN REUSE AND RECYCLING PROPERTY. 

(a) IN GENERAL.—Section 168 is amended by 

adding at the end the following new subsection: 

‘‘(m) SPECIAL ALLOWANCE FOR CERTAIN REUSE

AND RECYCLING PROPERTY.— 

‘‘(1) IN GENERAL.—In the case of any qualified 

reuse and recycling property— 

‘‘(A) the depreciation deduction provided by 

section 167(a) for the taxable year in which such 

property is placed in service shall include an allowance equal to 50 percent of the adjusted 

basis of the qualified reuse and recycling property, and 

‘‘(B) the adjusted basis of the qualified reuse 

and recycling property shall be reduced by the 

amount of such deduction before computing the 

amount otherwise allowable as a depreciation 

deduction under this chapter for such taxable 

year and any subsequent taxable year. 

‘‘(2) QUALIFIED REUSE AND RECYCLING PROPERTY.—For purposes of this subsection— 

‘‘(A) IN GENERAL.—The term ‘qualified reuse 

and recycling property’ means any reuse and recycling property— 

‘‘(i) to which this section applies, 

‘‘(ii) which has a useful life of at least 5 

years, 

‘‘(iii) the original use of which commences 

with the taxpayer after August 31, 2008, and 

‘‘(iv) which is— 

‘‘(I) acquired by purchase (as defined in section 179(d)(2)) by the taxpayer after August 31, 

2008, but only if no written binding contract for 

the acquisition was in effect before September 1, 

2008, or 

‘‘(II) acquired by the taxpayer pursuant to a 

written binding contract which was entered into 

after August 31, 2008. 

‘‘(B) EXCEPTIONS.— 

‘‘(i) BONUS DEPRECIATION PROPERTY UNDER

SUBSECTION (k).—The term ‘qualified reuse and 

recycling property’ shall not include any property to which section 168(k) applies. 

‘‘(ii) ALTERNATIVE DEPRECIATION PROPERTY.— 

The term ‘qualified reuse and recycling property’ shall not include any property to which 

the alternative depreciation system under subsection (g) applies, determined without regard to 

paragraph (7) of subsection (g) (relating to election to have system apply). 

‘‘(iii) ELECTION OUT.—If a taxpayer makes an 

election under this clause with respect to any 

class of property for any taxable year, this subsection shall not apply to all property in such 

class placed in service during such taxable year. 

‘‘(C) SPECIAL RULE FOR SELF-CONSTRUCTED

PROPERTY.—In the case of a taxpayer manufacturing, constructing, or producing property for 

the taxpayer’s own use, the requirements of 

clause (iv) of subparagraph (A) shall be treated 

as met if the taxpayer begins manufacturing, 

constructing, or producing the property after 

August 31, 2008. 

‘‘(D) DEDUCTION ALLOWED IN COMPUTING MINIMUM TAX.—For purposes of determining alternative minimum taxable income under section 

55, the deduction under subsection (a) for qualified reuse and recycling property shall be determined under this section without regard to any 

adjustment under section 56. 

‘‘(3) DEFINITIONS.—For purposes of this subsection— 


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October 3, 2008 CONGRESSIONAL RECORD — HOUSE H10735 

‘‘(A) REUSE AND RECYCLING PROPERTY.— 

‘‘(i) IN GENERAL.—The term ‘reuse and recycling property’ means any machinery and equipment (not including buildings or real estate), 

along with all appurtenances thereto, including 

software necessary to operate such equipment, 

which is used exclusively to collect, distribute, 

or recycle qualified reuse and recyclable materials. 

‘‘(ii) EXCLUSION.—Such term does not include 

rolling stock or other equipment used to transport reuse and recyclable materials. 

‘‘(B) QUALIFIED REUSE AND RECYCLABLE MATERIALS.— 

‘‘(i) IN GENERAL.—The term ‘qualified reuse 

and recyclable materials’ means scrap plastic, 

scrap glass, scrap textiles, scrap rubber, scrap 

packaging, recovered fiber, scrap ferrous and 

nonferrous metals, or electronic scrap generated 

by an individual or business. 

‘‘(ii) ELECTRONIC SCRAP.—For purposes of 

clause (i), the term ‘electronic scrap’ means— 

‘‘(I) any cathode ray tube, flat panel screen, 

or similar video display device with a screen size 

greater than 4 inches measured diagonally, or 

‘‘(II) any central processing unit. 

‘‘(C) RECYCLING OR RECYCLE.—The term ‘recycling’ or ‘recycle’ means that process (including 

sorting) by which worn or superfluous materials 

are manufactured or processed into specification 

grade commodities that are suitable for use as a 

replacement or substitute for virgin materials in 

manufacturing tangible consumer and commercial products, including packaging.’’. 

(b) EFFECTIVE DATE.—The amendment made 

by this section shall apply to property placed in 

service after August 31, 2008. 

TITLE IV—REVENUE PROVISIONS 

SEC. 401. LIMITATION OF DEDUCTION FOR INCOME ATTRIBUTABLE TO DOMESTIC 

PRODUCTION OF OIL, GAS, OR PRIMARY PRODUCTS THEREOF. 

(a) IN GENERAL.—Section 199(d) is amended by 

redesignating paragraph (9) as paragraph (10) 

and by inserting after paragraph (8) the following new paragraph: 

‘‘(9) SPECIAL RULE FOR TAXPAYERS WITH OIL

RELATED QUALIFIED PRODUCTION ACTIVITIES INCOME.— 

‘‘(A) IN GENERAL.—If a taxpayer has oil related qualified production activities income for 

any taxable year beginning after 2009, the 

amount otherwise allowable as a deduction 

under subsection (a) shall be reduced by 3 percent of the least of— 

‘‘(i) the oil related qualified production activities income of the taxpayer for the taxable year, 

‘‘(ii) the qualified production activities income 

of the taxpayer for the taxable year, or 

‘‘(iii) taxable income (determined without regard to this section). 

‘‘(B) OIL RELATED QUALIFIED PRODUCTION ACTIVITIES INCOME.—For purposes of this paragraph, the term ‘oil related qualified production 

activities income’ means for any taxable year 

the qualified production activities income which 

is attributable to the production, refining, processing, transportation, or distribution of oil, 

gas, or any primary product thereof during such 

taxable year. 

‘‘(C) PRIMARY PRODUCT.—For purposes of this 

paragraph, the term ‘primary product’ has the 

same meaning as when used in section 

927(a)(2)(C), as in effect before its repeal.’’. 

(b) CONFORMING AMENDMENT.—Section 

199(d)(2) (relating to application to individuals) 

is amended by striking ‘‘subsection (a)(1)(B)’’ 

and inserting ‘‘subsections (a)(1)(B) and 

(d)(9)(A)(iii)’’. 

(c) EFFECTIVE DATE.—The amendments made 

by this section shall apply to taxable years beginning after December 31, 2008. 

SEC. 402. ELIMINATION OF THE DIFFERENT 

TREATMENT OF FOREIGN OIL AND 

GAS EXTRACTION INCOME AND FOREIGN OIL RELATED INCOME FOR 

PURPOSES OF THE FOREIGN TAX 

CREDIT. 

(a) IN GENERAL.—Subsections (a) and (b) of 

section 907 (relating to special rules in case of 

foreign oil and gas income) are amended to read 

as follows: 

‘‘(a) REDUCTION IN AMOUNT ALLOWED AS FOREIGN TAX UNDER SECTION 901.—In applying section 901, the amount of any foreign oil and gas 

taxes paid or accrued (or deemed to have been 

paid) during the taxable year which would (but 

for this subsection) be taken into account for 

purposes of section 901 shall be reduced by the 

amount (if any) by which the amount of such 

taxes exceeds the product of— 

‘‘(1) the amount of the combined foreign oil 

and gas income for the taxable year, 

‘‘(2) multiplied by— 

‘‘(A) in the case of a corporation, the percentage which is equal to the highest rate of tax 

specified under section 11(b), or 

‘‘(B) in the case of an individual, a fraction 

the numerator of which is the tax against which 

the credit under section 901(a) is taken and the 

denominator of which is the taxpayer’s entire 

taxable income. 

‘‘(b) COMBINED FOREIGN OIL AND GAS INCOME; 

FOREIGN OIL AND GAS TAXES.—For purposes of 

this section— 

‘‘(1) COMBINED FOREIGN OIL AND GAS INCOME.—The term ‘combined foreign oil and gas 

income’ means, with respect to any taxable year, 

the sum of— 

‘‘(A) foreign oil and gas extraction income, 

and 

‘‘(B) foreign oil related income. 

‘‘(2) FOREIGN OIL AND GAS TAXES.—The term 

‘foreign oil and gas taxes’ means, with respect 

to any taxable year, the sum of— 

‘‘(A) oil and gas extraction taxes, and 

‘‘(B) any income, war profits, and excess profits taxes paid or accrued (or deemed to have 

been paid or accrued under section 902 or 960) 

during the taxable year with respect to foreign 

oil related income (determined without regard to 

subsection (c)(4)) or loss which would be taken 

into account for purposes of section 901 without 

regard to this section.’’. 

(b) RECAPTURE OF FOREIGN OIL AND GAS

LOSSES.—Paragraph (4) of section 907(c) (relating to recapture of foreign oil and gas extraction 

losses by recharacterizing later extraction income) is amended to read as follows: 

‘‘(4) RECAPTURE OF FOREIGN OIL AND GAS

LOSSES BY RECHARACTERIZING LATER COMBINED

FOREIGN OIL AND GAS INCOME.— 

‘‘(A) IN GENERAL.—The combined foreign oil 

and gas income of a taxpayer for a taxable year 

(determined without regard to this paragraph) 

shall be reduced— 

‘‘(i) first by the amount determined under subparagraph (B), and 

‘‘(ii) then by the amount determined under 

subparagraph (C). 

The aggregate amount of such reductions shall 

be treated as income (from sources without the 

United States) which is not combined foreign oil 

and gas income. 

‘‘(B) REDUCTION FOR PRE-2009 FOREIGN OIL EXTRACTION LOSSES.—The reduction under this 

paragraph shall be equal to the lesser of— 

‘‘(i) the foreign oil and gas extraction income 

of the taxpayer for the taxable year (determined 

without regard to this paragraph), or 

‘‘(ii) the excess of— 

‘‘(I) the aggregate amount of foreign oil extraction losses for preceding taxable years beginning after December 31, 1982, and before January 1, 2009, over 

‘‘(II) so much of such aggregate amount as 

was recharacterized under this paragraph (as in 

effect before and after the date of the enactment 

of the Energy Improvement and Extension Act 

of 2008) for preceding taxable years beginning 

after December 31, 1982. 

‘‘(C) REDUCTION FOR POST-2008 FOREIGN OIL

AND GAS LOSSES.—The reduction under this 

paragraph shall be equal to the lesser of— 

‘‘(i) the combined foreign oil and gas income 

of the taxpayer for the taxable year (determined 

without regard to this paragraph), reduced by 

an amount equal to the reduction under subparagraph (A) for the taxable year, or 

‘‘(ii) the excess of— 

‘‘(I) the aggregate amount of foreign oil and 

gas losses for preceding taxable years beginning 

after December 31, 2008, over 

‘‘(II) so much of such aggregate amount as 

was recharacterized under this paragraph for 

preceding taxable years beginning after December 31, 2008. 

‘‘(D) FOREIGN OIL AND GAS LOSS DEFINED.— 

‘‘(i) IN GENERAL.—For purposes of this paragraph, the term ‘foreign oil and gas loss’ means 

the amount by which— 

‘‘(I) the gross income for the taxable year from 

sources without the United States and its possessions (whether or not the taxpayer chooses 

the benefits of this subpart for such taxable 

year) taken into account in determining the 

combined foreign oil and gas income for such 

year, is exceeded by 

‘‘(II) the sum of the deductions properly apportioned or allocated thereto. 

‘‘(ii) NET OPERATING LOSS DEDUCTION NOT

TAKEN INTO ACCOUNT.—For purposes of clause 

(i), the net operating loss deduction allowable 

for the taxable year under section 172(a) shall 

not be taken into account. 

‘‘(iii) EXPROPRIATION AND CASUALTY LOSSES

NOT TAKEN INTO ACCOUNT.—For purposes of 

clause (i), there shall not be taken into account— 

‘‘(I) any foreign expropriation loss (as defined 

in section 172(h) (as in effect on the day before 

the date of the enactment of the Revenue Reconciliation Act of 1990)) for the taxable year, or 

‘‘(II) any loss for the taxable year which 

arises from fire, storm, shipwreck, or other casualty, or from theft, 

to the extent such loss is not compensated for by 

insurance or otherwise. 

‘‘(iv) FOREIGN OIL EXTRACTION LOSS.—For 

purposes of subparagraph (B)(ii)(I), foreign oil 

extraction losses shall be determined under this 

paragraph as in effect on the day before the 

date of the enactment of the Energy Improvement and Extension Act of 2008.’’. 

(c) CARRYBACK AND CARRYOVER OF DISALLOWED CREDITS.—Section 907(f) (relating to 

carryback and carryover of disallowed credits) 

is amended— 

(1) by striking ‘‘oil and gas extraction taxes’’ 

each place it appears and inserting ‘‘foreign oil 

and gas taxes’’, and 

(2) by adding at the end the following new 

paragraph: 

‘‘(4) TRANSITION RULES FOR PRE-2009 AND 2009

DISALLOWED CREDITS.— 

‘‘(A) PRE-2009 CREDITS.—In the case of any 

unused credit year beginning before January 1, 

2009, this subsection shall be applied to any unused oil and gas extraction taxes carried from 

such unused credit year to a year beginning 

after December 31, 2008— 

‘‘(i) by substituting ‘oil and gas extraction 

taxes’ for ‘foreign oil and gas taxes’ each place 

it appears in paragraphs (1), (2), and (3), and 

‘‘(ii) by computing, for purposes of paragraph 

(2)(A), the limitation under subparagraph (A) 

for the year to which such taxes are carried by 

substituting ‘foreign oil and gas extraction income’ for ‘foreign oil and gas income’ in subsection (a). 

‘‘(B) 2009 CREDITS.—In the case of any unused 

credit year beginning in 2009, the amendments 

made to this subsection by the Energy Improvement and Extension Act of 2008 shall be treated 

as being in effect for any preceding year beginning before January 1, 2009, solely for purposes 

of determining how much of the unused foreign 

oil and gas taxes for such unused credit year 

may be deemed paid or accrued in such preceding year.’’. 

(d) CONFORMING AMENDMENT.—Section 6501(i) 

is amended by striking ‘‘oil and gas extraction 

taxes’’ and inserting ‘‘foreign oil and gas 

taxes’’. 

(e) EFFECTIVE DATE.—The amendments made 

by this section shall apply to taxable years beginning after December 31, 2008. 


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SEC. 403. BROKER REPORTING OF CUSTOMER’S 

BASIS IN SECURITIES TRANSACTIONS. 

(a) IN GENERAL.— 

(1) BROKER REPORTING FOR SECURITIES TRANSACTIONS.—Section 6045 is amended by adding at 

the end the following new subsection: 

‘‘(g) ADDITIONAL INFORMATION REQUIRED IN

THE CASE OF SECURITIES TRANSACTIONS, ETC.— 

‘‘(1) IN GENERAL.—If a broker is otherwise required to make a return under subsection (a) 

with respect to the gross proceeds of the sale of 

a covered security, the broker shall include in 

such return the information described in paragraph (2). 

‘‘(2) ADDITIONAL INFORMATION REQUIRED.— 

‘‘(A) IN GENERAL.—The information required 

under paragraph (1) to be shown on a return 

with respect to a covered security of a customer 

shall include the customer’s adjusted basis in 

such security and whether any gain or loss with 

respect to such security is long-term or shortterm (within the meaning of section 1222). 

‘‘(B) DETERMINATION OF ADJUSTED BASIS.—For 

purposes of subparagraph (A)— 

‘‘(i) IN GENERAL.—The customer’s adjusted 

basis shall be determined— 

‘‘(I) in the case of any security (other than 

any stock for which an average basis method is 

permissible under section 1012), in accordance 

with the first-in first-out method unless the customer notifies the broker by means of making an 

adequate identification of the stock sold or 

transferred, and 

‘‘(II) in the case of any stock for which an average basis method is permissible under section 

1012, in accordance with the broker’s default 

method unless the customer notifies the broker 

that he elects another acceptable method under 

section 1012 with respect to the account in 

which such stock is held. 

‘‘(ii) EXCEPTION FOR WASH SALES.—Except as 

otherwise provided by the Secretary, the customer’s adjusted basis shall be determined without regard to section 1091 (relating to loss from 

wash sales of stock or securities) unless the 

transactions occur in the same account with respect to identical securities. 

‘‘(3) COVERED SECURITY.—For purposes of this 

subsection— 

‘‘(A) IN GENERAL.—The term ‘covered security’ 

means any specified security acquired on or 

after the applicable date if such security— 

‘‘(i) was acquired through a transaction in 

the account in which such security is held, or 

‘‘(ii) was transferred to such account from an 

account in which such security was a covered 

security, but only if the broker received a statement under section 6045A with respect to the 

transfer. 

‘‘(B) SPECIFIED SECURITY.—The term ‘specified 

security’ means— 

‘‘(i) any share of stock in a corporation, 

‘‘(ii) any note, bond, debenture, or other evidence of indebtedness, 

‘‘(iii) any commodity, or contract or derivative 

with respect to such commodity, if the Secretary 

determines that adjusted basis reporting is appropriate for purposes of this subsection, and 

‘‘(iv) any other financial instrument with respect to which the Secretary determines that adjusted basis reporting is appropriate for purposes of this subsection. 

‘‘(C) APPLICABLE DATE.—The term ‘applicable 

date’ means— 

‘‘(i) January 1, 2011, in the case of any specified security which is stock in a corporation 

(other than any stock described in clause (ii)), 

‘‘(ii) January 1, 2012, in the case of any stock 

for which an average basis method is permissible 

under section 1012, and 

‘‘(iii) January 1, 2013, or such later date determined by the Secretary in the case of any other 

specified security. 

‘‘(4) TREATMENT OF S CORPORATIONS.—In the 

case of the sale of a covered security acquired 

by an S corporation (other than a financial institution) after December 31, 2011, such S corporation shall be treated in the same manner as 

a partnership for purposes of this section. 

‘‘(5) SPECIAL RULES FOR SHORT SALES.—In the 

case of a short sale, reporting under this section 

shall be made for the year in which such sale is 

closed.’’. 

(2) BROKER INFORMATION REQUIRED WITH RESPECT TO OPTIONS.—Section 6045, as amended by 

subsection (a), is amended by adding at the end 

the following new subsection: 

‘‘(h) APPLICATION TO OPTIONS ON SECURITIES.— 

‘‘(1) EXERCISE OF OPTION.—For purposes of 

this section, if a covered security is acquired or 

disposed of pursuant to the exercise of an option 

that was granted or acquired in the same account as the covered security, the amount received with respect to the grant or paid with respect to the acquisition of such option shall be 

treated as an adjustment to gross proceeds or as 

an adjustment to basis, as the case may be. 

‘‘(2) LAPSE OR CLOSING TRANSACTION.—In the 

case of the lapse (or closing transaction (as defined in section 1234(b)(2)(A))) of an option on a 

specified security or the exercise of a cash-settled option on a specified security, reporting 

under subsections (a) and (g) with respect to 

such option shall be made for the calendar year 

which includes the date of such lapse, closing 

transaction, or exercise. 

‘‘(3) PROSPECTIVE APPLICATION.—Paragraphs 

(1) and (2) shall not apply to any option which 

is granted or acquired before January 1, 2013. 

‘‘(4) DEFINITIONS.—For purposes of this subsection, the terms ‘covered security’ and ‘specified security’ shall have the meanings given 

such terms in subsection (g)(3).’’. 

(3) EXTENSION OF PERIOD FOR STATEMENTS

SENT TO CUSTOMERS.— 

(A) IN GENERAL.—Subsection (b) of section 

6045 is amended by striking ‘‘January 31’’ and 

inserting ‘‘February 15’’. 

(B) STATEMENTS RELATED TO SUBSTITUTE PAYMENTS.—Subsection (d) of section 6045 is amended— 

(i) by striking ‘‘at such time and’’, and 

(ii) by inserting after ‘‘other item.’’ the following new sentence: ‘‘The written statement required under the preceding sentence shall be 

furnished on or before February 15 of the year 

following the calendar year in which the payment was made.’’. 

(C) OTHER STATEMENTS.—Subsection (b) of 

section 6045 is amended by adding at the end the 

following: ‘‘In the case of a consolidated reporting statement (as defined in regulations) with 

respect to any customer, any statement which 

would otherwise be required to be furnished on 

or before January 31 of a calendar year with respect to any item reportable to the taxpayer 

shall instead be required to be furnished on or 

before February 15 of such calendar year if furnished with such consolidated reporting statement.’’. 

(b) DETERMINATION OF BASIS OF CERTAIN SECURITIES ON ACCOUNT BY ACCOUNT OR AVERAGE

BASIS METHOD.—Section 1012 is amended— 

(1) by striking ‘‘The basis of property’’ and inserting the following: 

‘‘(a) IN GENERAL.—The basis of property’’, 

(2) by striking ‘‘The cost of real property’’ and 

inserting the following: 

‘‘(b) SPECIAL RULE FOR APPORTIONED REAL

ESTATE TAXES.—The cost of real property’’, and 

(3) by adding at the end the following new 

subsections: 

‘‘(c) DETERMINATIONS BY ACCOUNT.— 

‘‘(1) IN GENERAL.—In the case of the sale, exchange, or other disposition of a specified security on or after the applicable date, the conventions prescribed by regulations under this section shall be applied on an account by account 

basis. 

‘‘(2) APPLICATION TO CERTAIN FUNDS.— 

‘‘(A) IN GENERAL.—Except as provided in subparagraph (B), any stock for which an average 

basis method is permissible under section 1012 

which is acquired before January 1, 2012, shall 

be treated as a separate account from any such 

stock acquired on or after such date. 

‘‘(B) ELECTION FUND FOR TREATMENT AS SINGLE ACCOUNT.—If a fund described in subparagraph (A) elects to have this subparagraph 

apply with respect to one or more of its stockholders— 

‘‘(i) subparagraph (A) shall not apply with respect to any stock in such fund held by such 

stockholders, and 

‘‘(ii) all stock in such fund which is held by 

such stockholders shall be treated as covered securities described in section 6045(g)(3) without 

regard to the date of the acquisition of such 

stock. 

A rule similar to the rule of the preceding sentence shall apply with respect to a broker holding such stock as a nominee. 

‘‘(3) DEFINITIONS.—For purposes of this section, the terms ‘specified security’ and ‘applicable date’ shall have the meaning given such 

terms in section 6045(g). 

‘‘(d) AVERAGE BASIS FOR STOCK ACQUIRED

PURSUANT TO A DIVIDEND REINVESTMENT

PLAN.— 

‘‘(1) IN GENERAL.—In the case of any stock acquired after December 31, 2010, in connection 

with a dividend reinvestment plan, the basis of 

such stock while held as part of such plan shall 

be determined using one of the methods which 

may be used for determining the basis of stock 

in an open-end fund. 

‘‘(2) TREATMENT AFTER TRANSFER.—In the 

case of the transfer to another account of stock 

to which paragraph (1) applies, such stock shall 

have a cost basis in such other account equal to 

its basis in the dividend reinvestment plan immediately before such transfer (properly adjusted for any fees or other charges taken into 

account in connection with such transfer). 

‘‘(3) SEPARATE ACCOUNTS; ELECTION FOR

TREATMENT AS SINGLE ACCOUNT.—Rules similar 

to the rules of subsection (c)(2) shall apply for 

purposes of this subsection. 

‘‘(4) DIVIDEND REINVESTMENT PLAN.—For purposes of this subsection— 

‘‘(A) IN GENERAL.—The term ‘dividend reinvestment plan’ means any arrangement under 

which dividends on any stock are reinvested in 

stock identical to the stock with respect to 

which the dividends are paid. 

‘‘(B) INITIAL STOCK ACQUISITION TREATED AS

ACQUIRED IN CONNECTION WITH PLAN.—Stock 

shall be treated as acquired in connection with 

a dividend reinvestment plan if such stock is acquired pursuant to such plan or if the dividends 

paid on such stock are subject to such plan.’’. 

(c) INFORMATION BY TRANSFERORS TO AID

BROKERS.— 

(1) IN GENERAL.—Subpart B of part III of subchapter A of chapter 61 is amended by inserting 

after section 6045 the following new section: 

‘‘SEC. 6045A. INFORMATION REQUIRED IN CONNECTION WITH TRANSFERS OF COVERED SECURITIES TO BROKERS. 

‘‘(a) FURNISHING OF INFORMATION.—Every applicable person which transfers to a broker (as 

defined in section 6045(c)(1)) a security which is 

a covered security (as defined in section 

6045(g)(3)) in the hands of such applicable person shall furnish to such broker a written statement in such manner and setting forth such information as the Secretary may by regulations 

prescribe for purposes of enabling such broker to 

meet the requirements of section 6045(g). 

‘‘(b) APPLICABLE PERSON.—For purposes of 

subsection (a), the term ‘applicable person’ 

means— 

‘‘(1) any broker (as defined in section 

6045(c)(1)), and 

‘‘(2) any other person as provided by the Secretary in regulations. 

‘‘(c) TIME FOR FURNISHING STATEMENT.—Except as otherwise provided by the Secretary, any 

statement required by subsection (a) shall be 

furnished not later than 15 days after the date 

of the transfer described in such subsection.’’. 


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(2) ASSESSABLE PENALTIES.—Paragraph (2) of 

section 6724(d), as amended by the Housing Assistance Tax Act of 2008, is amended by redesignating subparagraphs (I) through (DD) as subparagraphs (J) through (EE), respectively, and 

by inserting after subparagraph (H) the following new subparagraph: 

‘‘(I) section 6045A (relating to information required in connection with transfers of covered 

securities to brokers),’’. 

(3) CLERICAL AMENDMENT.—The table of sections for subpart B of part III of subchapter A 

of chapter 61 is amended by inserting after the 

item relating to section 6045 the following new 

item: 

‘‘Sec. 6045A. Information required in connection with transfers of covered securities to brokers.’’. 

(d) ADDITIONAL ISSUER INFORMATION TO AID

BROKERS.— 

(1) IN GENERAL.—Subpart B of part III of subchapter A of chapter 61, as amended by subsection (b), is amended by inserting after section 

6045A the following new section: 

‘‘SEC. 6045B. RETURNS RELATING TO ACTIONS AFFECTING BASIS OF SPECIFIED SECURITIES. 

‘‘(a) IN GENERAL.—According to the forms or 

regulations prescribed by the Secretary, any 

issuer of a specified security shall make a return 

setting forth— 

‘‘(1) a description of any organizational action which affects the basis of such specified security of such issuer, 

‘‘(2) the quantitative effect on the basis of 

such specified security resulting from such action, and 

‘‘(3) such other information as the Secretary 

may prescribe. 

‘‘(b) TIME FOR FILING RETURN.—Any return 

required by subsection (a) shall be filed not later 

than the earlier of— 

‘‘(1) 45 days after the date of the action described in subsection (a), or 

‘‘(2) January 15 of the year following the calendar year during which such action occurred. 

‘‘(c) STATEMENTS TO BE FURNISHED TO HOLDERS OF SPECIFIED SECURITIES OR THEIR NOMINEES.—According to the forms or regulations 

prescribed by the Secretary, every person required to make a return under subsection (a) 

with respect to a specified security shall furnish 

to the nominee with respect to the specified security (or certificate holder if there is no nominee) a written statement showing— 

‘‘(1) the name, address, and phone number of 

the information contact of the person required 

to make such return, 

‘‘(2) the information required to be shown on 

such return with respect to such security, and 

‘‘(3) such other information as the Secretary 

may prescribe. 

The written statement required under the preceding sentence shall be furnished to the holder 

on or before January 15 of the year following 

the calendar year during which the action described in subsection (a) occurred. 

‘‘(d) SPECIFIED SECURITY.—For purposes of 

this section, the term ‘specified security’ has the 

meaning given such term by section 

6045(g)(3)(B). No return shall be required under 

this section with respect to actions described in 

subsection (a) with respect to a specified security which occur before the applicable date (as 

defined in section 6045(g)(3)(C)) with respect to 

such security. 

‘‘(e) PUBLIC REPORTING IN LIEU OF RETURN.— 

The Secretary may waive the requirements 

under subsections (a) and (c) with respect to a 

specified security, if the person required to make 

the return under subsection (a) makes publicly 

available, in such form and manner as the Secretary determines necessary to carry out the 

purposes of this section— 

‘‘(1) the name, address, phone number, and 

email address of the information contact of such 

person, and 

‘‘(2) the information described in paragraphs 

(1), (2), and (3) of subsection (a).’’. 

(2) ASSESSABLE PENALTIES.— 

(A) Subparagraph (B) of section 6724(d)(1), as 

amended by the Housing Assistance Tax Act of 

2008, is amended by redesignating clause (iv) 

and each of the clauses which follow as clauses 

(v) through (xxiii), respectively, and by inserting after clause (iii) the following new clause: 

‘‘(iv) section 6045B(a) (relating to returns relating to actions affecting basis of specified securities),’’. 

(B) Paragraph (2) of section 6724(d), as 

amended by the Housing Assistance Tax Act of 

2008 and by subsection (c)(2), is amended by redesignating subparagraphs (J) through (EE) as 

subparagraphs (K) through (FF), respectively, 

and by inserting after subparagraph (I) the following new subparagraph: 

‘‘(J) subsections (c) and (e) of section 6045B 

(relating to returns relating to actions affecting 

basis of specified securities),’’. 

(3) CLERICAL AMENDMENT.—The table of sections for subpart B of part III of subchapter A 

of chapter 61, as amended by subsection (b)(3), 

is amended by inserting after the item relating 

to section 6045A the following new item: 

‘‘Sec. 6045B. Returns relating to actions affecting basis of specified securities.’’. 

(e) EFFECTIVE DATE.— 

(1) IN GENERAL.—Except as otherwise provided 

in this subsection, the amendments made by this 

section shall take effect on January 1, 2011. 

(2) EXTENSION OF PERIOD FOR STATEMENTS

SENT TO CUSTOMERS.—The amendments made by 

subsection (a)(3) shall apply to statements required to be furnished after December 31, 2008. 

SEC. 404. 0.2 PERCENT FUTA SURTAX. 

(a) IN GENERAL.—Section 3301 (relating to rate 

of tax) is amended— 

(1) by striking ‘‘through 2008’’ in paragraph 

(1) and inserting ‘‘through 2009’’, and 

(2) by striking ‘‘calendar year 2009’’ in paragraph (2) and inserting ‘‘calendar year 2010’’. 

(b) EFFECTIVE DATE.—The amendments made 

by this section shall apply to wages paid after 

December 31, 2008. 

SEC. 405. INCREASE AND EXTENSION OF OIL 

SPILL LIABILITY TRUST FUND TAX. 

(a) INCREASE IN RATE.— 

(1) IN GENERAL.—Section 4611(c)(2)(B) (relating to rates) is amended by striking ‘‘is 5 cents 

a barrel.’’ and inserting ‘‘is— 

‘‘(i) in the case of crude oil received or petroleum products entered before January 1, 2017, 8 

cents a barrel, and 

‘‘(ii) in the case of crude oil received or petroleum products entered after December 31, 2016, 9 

cents a barrel.’’. 

(2) EFFECTIVE DATE.—The amendment made 

by this subsection shall apply on and after the 

first day of the first calendar quarter beginning 

more than 60 days after the date of the enactment of this Act. 

(b) EXTENSION.— 

(1) IN GENERAL.—Section 4611(f) (relating to 

application of Oil Spill Liability Trust Fund financing rate) is amended by striking paragraphs (2) and (3) and inserting the following 

new paragraph: 

‘‘(2) TERMINATION.—The Oil Spill Liability 

Trust Fund financing rate shall not apply after 

December 31, 2017.’’. 

(2) CONFORMING AMENDMENT.—Section 

4611(f)(1) is amended by striking ‘‘paragraphs 

(2) and (3)’’ and inserting ‘‘paragraph (2)’’. 

(3) EFFECTIVE DATE.—The amendments made 

by this subsection shall take effect on the date 

of the enactment of this Act. 

DIVISION C—TAX EXTENDERS AND 

ALTERNATIVE MINIMUM TAX RELIEF 

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 

CODE; TABLE OF CONTENTS. 

(a) SHORT TITLE.—This division may be cited 

as the ‘‘Tax Extenders and Alternative Minimum Tax Relief Act of 2008’’. 

(b) AMENDMENT OF 1986 CODE.—Except as otherwise expressly provided, whenever in this division 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 of this division is as follows: 

Sec. 1. Short title; amendment of 1986 Code; 

table of contents. 

TITLE I—ALTERNATIVE MINIMUM TAX 

RELIEF 

Sec. 101. Extension of alternative minimum tax 

relief for nonrefundable personal 

credits. 

Sec. 102. Extension of increased alternative 

minimum tax exemption amount. 

Sec. 103. Increase of AMT refundable credit 

amount for individuals with longterm unused credits for prior year 

minimum tax liability, etc. 

TITLE II—EXTENSION OF INDIVIDUAL TAX 

PROVISIONS 

Sec. 201. Deduction for State and local sales 

taxes. 

Sec. 202. Deduction of qualified tuition and related expenses. 

Sec. 203. Deduction for certain expenses of elementary and secondary school 

teachers. 

Sec. 204. Additional standard deduction for real 

property taxes for nonitemizers. 

Sec. 205. Tax-free distributions from individual 

retirement plans for charitable 

purposes. 

Sec. 206. Treatment of certain dividends of regulated investment companies. 

Sec. 207. Stock in RIC for purposes of determining estates of nonresidents not 

citizens. 

Sec. 208. Qualified investment entities. 

TITLE III—EXTENSION OF BUSINESS TAX 

PROVISIONS 

Sec. 301. Extension and modification of research credit. 

Sec. 302. New markets tax credit. 

Sec. 303. Subpart F exception for active financing income. 

Sec. 304. Extension of look-thru rule for related 

controlled foreign corporations. 

Sec. 305. Extension of 15-year straight-line cost 

recovery for qualified leasehold 

improvements and qualified restaurant improvements; 15-year 

straight-line cost recovery for certain improvements to retail space. 

Sec. 306. Modification of tax treatment of certain payments to controlling exempt organizations. 

Sec. 307. Basis adjustment to stock of S corporations making charitable contributions of property. 

Sec. 308. Increase in limit on cover over of rum 

excise tax to Puerto Rico and the 

Virgin Islands. 

Sec. 309. Extension of economic development 

credit for American Samoa. 

Sec. 310. Extension of mine rescue team training credit. 

Sec. 311. Extension of election to expense advanced mine safety equipment. 

Sec. 312. Deduction allowable with respect to 

income attributable to domestic 

production activities in Puerto 

Rico. 

Sec. 313. Qualified zone academy bonds. 

Sec. 314. Indian employment credit. 

Sec. 315. Accelerated depreciation for business 

property on Indian reservations. 

Sec. 316. Railroad track maintenance. 

Sec. 317. Seven-year cost recovery period for 

motorsports racing track facility. 

Sec. 318. Expensing of environmental remediation costs. 

Sec. 319. Extension of work opportunity tax 

credit for Hurricane Katrina employees. 


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Sec. 320. Extension of increased rehabilitation 

credit for structures in the Gulf 

Opportunity Zone. 

Sec. 321. Enhanced deduction for qualified computer contributions. 

Sec. 322. Tax incentives for investment in the 

District of Columbia. 

Sec. 323. Enhanced charitable deductions for 

contributions of food inventory. 

Sec. 324. Extension of enhanced charitable deduction for contributions of book 

inventory. 

Sec. 325. Extension and modification of duty 

suspension on wool products; 

wool research fund; wool duty refunds. 

TITLE IV—EXTENSION OF TAX 

ADMINISTRATION PROVISIONS 

Sec. 401. Permanent authority for undercover 

operations. 

Sec. 402. Permanent authority for disclosure of 

information relating to terrorist 

activities. 

TITLE V—ADDITIONAL TAX RELIEF AND 

OTHER TAX PROVISIONS 

Subtitle A—General Provisions 

Sec. 501. $8,500 income threshold used to calculate refundable portion of child 

tax credit. 

Sec. 502. Provisions related to film and television productions. 

Sec. 503. Exemption from excise tax for certain 

wooden arrows designed for use 

by children. 

Sec. 504. Income averaging for amounts received in connection with the 

Exxon Valdez litigation. 

Sec. 505. Certain farming business machinery 

and equipment treated as 5-year 

property. 

Sec. 506. Modification of penalty on understatement of taxpayer’s liability by tax 

return preparer. 

Subtitle B—Paul Wellstone and Pete Domenici 

Mental Health Parity and Addiction Equity 

Act of 2008 

Sec. 511. Short title. 

Sec. 512. Mental health parity. 

TITLE VI—OTHER PROVISIONS 

Sec. 601. Secure rural schools and community 

self-determination program. 

Sec. 602. Transfer to abandoned mine reclamation fund. 

TITLE VII—DISASTER RELIEF 

Subtitle A—Heartland and Hurricane Ike 

Disaster Relief 

Sec. 701. Short title. 

Sec. 702. Temporary tax relief for areas damaged by 2008 Midwestern severe 

storms, tornados, and flooding. 

Sec. 703. Reporting requirements relating to disaster relief contributions. 

Sec. 704. Temporary tax-exempt bond financing 

and low-income housing tax relief 

for areas damaged by Hurricane 

Ike. 

Subtitle B—National Disaster Relief 

Sec. 706. Losses attributable to federally declared disasters. 

Sec. 707. Expensing of Qualified Disaster Expenses. 

Sec. 708. Net operating losses attributable to 

federally declared disasters. 

Sec. 709. Waiver of certain mortgage revenue 

bond requirements following federally declared disasters. 

Sec. 710. Special depreciation allowance for 

qualified disaster property. 

Sec. 711. Increased expensing for qualified disaster assistance property. 

Sec. 712. Coordination with Heartland disaster 

relief. 

TITLE VIII—SPENDING REDUCTIONS AND 

APPROPRIATE REVENUE RAISERS FOR 

NEW TAX RELIEF POLICY 

Sec. 801. Nonqualified deferred compensation 

from certain tax indifferent parties. 

TITLE I—ALTERNATIVE MINIMUM TAX 

RELIEF 

SEC. 101. EXTENSION OF ALTERNATIVE MINIMUM 

TAX RELIEF FOR NONREFUNDABLE 

PERSONAL CREDITS. 

(a) IN GENERAL.—Paragraph (2) of section 

26(a) (relating to special rule for taxable years 

2000 through 2007) is amended— 

(1) by striking ‘‘or 2007’’ and inserting ‘‘2007, 

or 2008’’, and 

(2) by striking ‘‘2007’’ in the heading thereof 

and inserting ‘‘2008’’. 

(b) EFFECTIVE DATE.—The amendments made 

by this section shall apply to taxable years beginning after December 31, 2007. 

SEC. 102. EXTENSION OF INCREASED ALTERNATIVE MINIMUM TAX EXEMPTION 

AMOUNT. 

(a) IN GENERAL.—Paragraph (1) of section 

55(d) (relating to exemption amount) is amended— 

(1) by striking ‘‘($66,250 in the case of taxable 

years beginning in 2007)’’ in subparagraph (A) 

and inserting ‘‘($69,950 in the case of taxable 

years beginning in 2008)’’, and 

(2) by striking ‘‘($44,350 in the case of taxable 

years beginning in 2007)’’ in subparagraph (B) 

and inserting ‘‘($46,200 in the case of taxable 

years beginning in 2008)’’. 

(b) EFFECTIVE DATE.—The amendments made 

by this section shall apply to taxable years beginning after December 31, 2007. 

SEC. 103. 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) 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 

(determined without regard to subsection 

(f)(2)).’’. 

(b) TREATMENT OF CERTAIN UNDERPAYMENTS, 

INTEREST, AND PENALTIES ATTRIBUTABLE TO THE

TREATMENT OF INCENTIVE STOCK OPTIONS.—Section 53 is amended by adding at the end the following new subsection: 

‘‘(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. The amount determined 

under subsection (b)(1) shall not include any 

tax abated under the preceding sentence. 

‘‘(2) INCREASE IN CREDIT FOR CERTAIN INTEREST AND PENALTIES ALREADY PAID.—The AMT 

refundable credit amount, and the minimum tax 

credit determined under subsection (b), for the 

taxpayer’s first 2 taxable years beginning after 

December 31, 2007, shall each be increased by 50 

percent of the aggregate amount of the interest 

and penalties which were paid by the taxpayer 

before the date of the enactment of this subsection and which would (but for such payment) 

have been abated under paragraph (1).’’. 

(c) EFFECTIVE DATE.— 

(1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by this section 

shall apply to taxable years beginning after December 31, 2007. 

(2) ABATEMENT.—Section 53(f)(1), as added by 

subsection (b), shall take effect on the date of 

the enactment of this Act. 

TITLE II—EXTENSION OF INDIVIDUAL TAX 

PROVISIONS 

SEC. 201. 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. 202. 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. 203. 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 subsection (a) shall apply to taxable years 

beginning after December 31, 2007. 

SEC. 204. ADDITIONAL STANDARD DEDUCTION 

FOR REAL PROPERTY TAXES FOR 

NONITEMIZERS. 

(a) IN GENERAL.—Subparagraph (C) of section 

63(c)(1), as added by the Housing Assistance 

Tax Act of 2008, is amended by inserting ‘‘or 

2009’’ after ‘‘2008’’. 

(b) EFFECTIVE DATE.—The amendment made 

by this section shall apply to taxable years beginning after December 31, 2008. 

SEC. 205. 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. 206. TREATMENT OF CERTAIN DIVIDENDS OF 

REGULATED INVESTMENT COMPANIES. 

(a) INTEREST-RELATED DIVIDENDS.—Subparagraph (C) of section 871(k)(1) (defining interestrelated 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) 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. 207. 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. 

SEC. 208. QUALIFIED INVESTMENT ENTITIES. 

(a) IN GENERAL.—Clause (ii) of section 

897(h)(4)(A) (relating to termination) is amended 


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by striking ‘‘December 31, 2007’’ and inserting 

‘‘December 31, 2009’’. 

(b) EFFECTIVE DATE.—The amendment made 

by subsection (a) shall take effect on January 1, 

2008. 

TITLE III—EXTENSION OF BUSINESS TAX 

PROVISIONS 

SEC. 301. EXTENSION AND MODIFICATION OF RESEARCH CREDIT. 

(a) EXTENSION.— 

(1) IN GENERAL.—Section 41(h) (relating to termination) is amended by striking ‘‘December 31, 

2007’’ and inserting ‘‘December 31, 2009’’ in 

paragraph (1)(B). 

(2) CONFORMING AMENDMENT.—Subparagraph 

(D) of section 45C(b)(1) (relating to special rule) 

is amended by striking ‘‘after December 31, 

2007’’ and inserting ‘‘after December 31, 2009’’. 

(b) TERMINATION OF ALTERNATIVE INCREMENTAL CREDIT.—Section 41(h) is amended by 

redesignating paragraph (2) as paragraph (3), 

and by inserting after paragraph (1) the following new paragraph: 

‘‘(2) TERMINATION OF ALTERNATIVE INCREMENTAL CREDIT.—No election under subsection 

(c)(4) shall apply to taxable years beginning 

after December 31, 2008.’’. 

(c) MODIFICATION OF ALTERNATIVE SIMPLIFIED

CREDIT.—Paragraph (5)(A) of section 41(c) (relating to election of alternative simplified credit) 

is amended by striking ‘‘12 percent’’ and inserting ‘‘14 percent (12 percent in the case of taxable 

years ending before January 1, 2009)’’. 

(d) TECHNICAL CORRECTION.—Paragraph (3) of 

section 41(h) is amended to read as follows: 

‘‘(2) COMPUTATION FOR TAXABLE YEAR IN

WHICH CREDIT TERMINATES.—In the case of any 

taxable year with respect to which this section 

applies to a number of days which is less than 

the total number of days in such taxable year— 

‘‘(A) the amount determined under subsection 

(c)(1)(B) with respect to such taxable year shall 

be the amount which bears the same ratio to 

such amount (determined without regard to this 

paragraph) as the number of days in such taxable year to which this section applies bears to 

the total number of days in such taxable year, 

and 

‘‘(B) for purposes of subsection (c)(5), the average qualified research expenses for the preceding 3 taxable years shall be the amount 

which bears the same ratio to such average 

qualified research expenses (determined without 

regard to this paragraph) as the number of days 

in such taxable year to which this section applies bears to the total number of days in such 

taxable year.’’. 

(e) EFFECTIVE DATE.— 

(1) IN GENERAL.—Except as provided in paragraph (2), the amendments made by this section 

shall apply to taxable years beginning after December 31, 2007. 

(2) EXTENSION.—The amendments made by 

subsection (a) shall apply to amounts paid or 

incurred after December 31, 2007. 

SEC. 302. 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. 303. 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’’. 

SEC. 304. EXTENSION OF LOOK-THRU RULE FOR 

RELATED CONTROLLED FOREIGN 

CORPORATIONS. 

(a) IN GENERAL.—Subparagraph (C) of section 

954(c)(6) (relating to application) is amended by 

striking ‘‘January 1, 2009’’ and inserting ‘‘January 1, 2010’’. 

(b) EFFECTIVE DATE.—The amendment made 

by this section shall apply to taxable years of 

foreign corporations beginning after December 

31, 2007, and to taxable years of United States 

shareholders with or within which such taxable 

years of foreign corporations end. 

SEC. 305. EXTENSION OF 15-YEAR STRAIGHT-LINE 

COST RECOVERY FOR QUALIFIED 

LEASEHOLD IMPROVEMENTS AND 

QUALIFIED RESTAURANT IMPROVEMENTS; 15-YEAR STRAIGHT-LINE 

COST RECOVERY FOR CERTAIN IMPROVEMENTS TO RETAIL SPACE. 

(a) EXTENSION OF LEASEHOLD AND RESTAURANT IMPROVEMENTS.— 

(1) 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’’. 

(2) EFFECTIVE DATE.—The amendments made 

by this subsection shall apply to property placed 

in service after December 31, 2007. 

(b) TREATMENT TO INCLUDE NEW CONSTRUCTION.— 

(1) IN GENERAL.—Paragraph (7) of section 

168(e) (relating to classification of property) is 

amended to read as follows: 

‘‘(7) QUALIFIED RESTAURANT PROPERTY.— 

‘‘(A) IN GENERAL.—The term ‘qualified restaurant property’ means any section 1250 property which is— 

‘‘(i) a building, if such building is placed in 

service after December 31, 2008, and before January 1, 2010, or 

‘‘(ii) an improvement to a building, 

if more than 50 percent of the building’s square 

footage is devoted to preparation of, and seating 

for on-premises consumption of, prepared meals. 

‘‘(B) EXCLUSION FROM BONUS DEPRECIATION.— 

Property described in this paragraph shall not 

be considered qualified property for purposes of 

subsection (k).’’. 

(2) EFFECTIVE DATE.—The amendment made 

by this subsection shall apply to property placed 

in service after December 31, 2008. 

(c) RECOVERY PERIOD FOR DEPRECIATION OF

CERTAIN IMPROVEMENTS TO RETAIL SPACE.— 

(1) 15-YEAR RECOVERY PERIOD.—Section 

168(e)(3)(E) (relating to 15-year property) is 

amended by striking ‘‘and’’ at the end of clause 

(vii), by striking the period at the end of clause 

(viii) and inserting ‘‘, and’’, and by adding at 

the end the following new clause: 

‘‘(ix) any qualified retail improvement property placed in service after December 31, 2008, 

and before January 1, 2010.’’. 

(2) QUALIFIED RETAIL IMPROVEMENT PROPERTY.—Section 168(e) is amended by adding at 

the end the following new paragraph: 

‘‘(8) QUALIFIED RETAIL IMPROVEMENT PROPERTY.— 

‘‘(A) IN GENERAL.—The term ‘qualified retail 

improvement property’ means any improvement 

to an interior portion of a building which is 

nonresidential real property if— 

‘‘(i) such portion is open to the general public 

and is used in the retail trade or business of selling tangible personal property to the general 

public, and 

‘‘(ii) such improvement is placed in service 

more than 3 years after the date the building 

was first placed in service. 

‘‘(B) IMPROVEMENTS MADE BY OWNER.—In the 

case of an improvement made by the owner of 

such improvement, such improvement shall be 

qualified retail improvement property (if at all) 

only so long as such improvement is held by 

such owner. Rules similar to the rules under 

paragraph (6)(B) shall apply for purposes of the 

preceding sentence. 

‘‘(C) CERTAIN IMPROVEMENTS NOT INCLUDED.— 

Such term shall not include any improvement 

for which the expenditure is attributable to— 

‘‘(i) the enlargement of the building, 

‘‘(ii) any elevator or escalator, 

‘‘(iii) any structural component benefitting a 

common area, or 

‘‘(iv) the internal structural framework of the 

building. 

‘‘(D) EXCLUSION FROM BONUS DEPRECIATION.— 

Property described in this paragraph shall not 

be considered qualified property for purposes of 

subsection (k). 

‘‘(E) TERMINATION.—Such term shall not include any improvement placed in service after 

December 31, 2009.’’. 

(3) REQUIREMENT TO USE STRAIGHT LINE METHOD.—Section 168(b)(3) is amended by adding at 

the end the following new subparagraph: 

‘‘(I) Qualified retail improvement property described in subsection (e)(8).’’. 

(4) ALTERNATIVE SYSTEM.—The table contained in section 168(g)(3)(B) is amended by inserting after the item relating to subparagraph 

(E)(viii) the following new item: 

‘‘(E)(ix) ............................................... 39’’. 

(5) EFFECTIVE DATE.—The amendments made 

by this subsection shall apply to property placed 

in service after December 31, 2008. 

SEC. 306. 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. 307. 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. 308. 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 striking ‘‘January 1, 2008’’ 

and inserting ‘‘January 1, 2010’’. 

(b) EFFECTIVE DATE.—The amendment made 

by this section shall apply to distilled spirits 

brought into the United States after December 

31, 2007. 

SEC. 309. 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. 

SEC. 310. 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. 311. 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. 312. 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’’. 


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(b) EFFECTIVE DATE.—The amendments made 

by this section shall apply to taxable years beginning after December 31, 2007. 

SEC. 313. QUALIFIED ZONE ACADEMY BONDS. 

(a) IN GENERAL.—Subpart I of part IV of subchapter A of chapter 1 is amended by adding at 

the end the following new section: 

‘‘SEC. 54E. QUALIFIED ZONE ACADEMY BONDS. 

‘‘(a) QUALIFIED ZONE ACADEMY BONDS.—For 

purposes of this subchapter, the term ‘qualified 

zone academy bond’ means any bond issued as 

part of an issue if— 

‘‘(1) 100 percent of the available project proceeds of such issue are to be used for a qualified 

purpose with respect to a qualified zone academy established by an eligible local education 

agency, 

‘‘(2) the bond is issued by a State or local government within the jurisdiction of which such 

academy is located, and 

‘‘(3) the issuer— 

‘‘(A) designates such bond for purposes of this 

section, 

‘‘(B) certifies that it has written assurances 

that the private business contribution requirement of subsection (b) will be met with respect 

to such academy, and 

‘‘(C) certifies that it has the written approval 

of the eligible local education agency for such 

bond issuance. 

‘‘(b) PRIVATE BUSINESS CONTRIBUTION REQUIREMENT.—For purposes of subsection (a), the 

private business contribution requirement of this 

subsection is met with respect to any issue if the 

eligible local education agency that established 

the qualified zone academy has written commitments from private entities to make qualified 

contributions having a present value (as of the 

date of issuance of the issue) of not less than 10 

percent of the proceeds of the issue. 

‘‘(c) LIMITATION ON AMOUNT OF BONDS DESIGNATED.— 

‘‘(1) NATIONAL LIMITATION.—There is a national zone academy bond limitation for each 

calendar year. Such limitation is $400,000,000 for 

2008 and 2009, and, except as provided in paragraph (4), zero thereafter. 

‘‘(2) ALLOCATION OF LIMITATION.—The national zone academy bond limitation for a calendar year shall be allocated by the Secretary 

among the States on the basis of their respective 

populations of individuals below the poverty 

line (as defined by the Office of Management 

and Budget). The limitation amount allocated to 

a State under the preceding sentence shall be allocated by the State education agency to qualified zone academies within such State. 

‘‘(3) DESIGNATION SUBJECT TO LIMITATION

AMOUNT.—The maximum aggregate face amount 

of bonds issued during any calendar year which 

may be designated under subsection (a) with respect to any qualified zone academy shall not 

exceed the limitation amount allocated to such 

academy under paragraph (2) for such calendar 

year. 

‘‘(4) CARRYOVER OF UNUSED LIMITATION.— 

‘‘(A) IN GENERAL.—If for any calendar year— 

‘‘(i) the limitation amount for any State, exceeds 

‘‘(ii) the amount of bonds issued during such 

year which are designated under subsection (a) 

with respect to qualified zone academies within 

such State, 

the limitation amount for such State for the following calendar year shall be increased by the 

amount of such excess. 

‘‘(B) LIMITATION ON CARRYOVER.—Any 

carryforward of a limitation amount may be 

carried only to the first 2 years following the 

unused limitation year. For purposes of the preceding sentence, a limitation amount shall be 

treated as used on a first-in first-out basis. 

‘‘(C) COORDINATION WITH SECTION 1397E.—Any 

carryover determined under section 1397E(e)(4) 

(relating to carryover of unused limitation) with 

respect to any State to calendar year 2008 or 

2009 shall be treated for purposes of this section 

as a carryover with respect to such State for 

such calendar year under subparagraph (A), 

and the limitation of subparagraph (B) shall 

apply to such carryover taking into account the 

calendar years to which such carryover relates. 

‘‘(d) DEFINITIONS.—For purposes of this section— 

‘‘(1) QUALIFIED ZONE ACADEMY.—The term 

‘qualified zone academy’ means any public 

school (or academic program within a public 

school) which is established by and operated 

under the supervision of an eligible local education agency to provide education or training 

below the postsecondary level if— 

‘‘(A) such public school or program (as the 

case may be) is designed in cooperation with 

business to enhance the academic curriculum, 

increase graduation and employment rates, and 

better prepare students for the rigors of college 

and the increasingly complex workforce, 

‘‘(B) students in such public school or program (as the case may be) will be subject to the 

same academic standards and assessments as 

other students educated by the eligible local 

education agency, 

‘‘(C) the comprehensive education plan of 

such public school or program is approved by 

the eligible local education agency, and 

‘‘(D)(i) such public school is located in an empowerment zone or enterprise community (including any such zone or community designated 

after the date of the enactment of this section), 

or 

‘‘(ii) there is a reasonable expectation (as of 

the date of issuance of the bonds) that at least 

35 percent of the students attending such school 

or participating in such program (as the case 

may be) will be eligible for free or reduced-cost 

lunches under the school lunch program established under the National School Lunch Act. 

‘‘(2) ELIGIBLE LOCAL EDUCATION AGENCY.—For 

purposes of this section, the term ‘eligible local 

education agency’ means any local educational 

agency as defined in section 9101 of the Elementary and Secondary Education Act of 1965. 

‘‘(3) QUALIFIED PURPOSE.—The term ‘qualified 

purpose’ means, with respect to any qualified 

zone academy— 

‘‘(A) rehabilitating or repairing the public 

school facility in which the academy is established, 

‘‘(B) providing equipment for use at such 

academy, 

‘‘(C) developing course materials for education 

to be provided at such academy, and 

‘‘(D) training teachers and other school personnel in such academy. 

‘‘(4) QUALIFIED CONTRIBUTIONS.—The term 

‘qualified contribution’ means any contribution 

(of a type and quality acceptable to the eligible 

local education agency) of— 

‘‘(A) equipment for use in the qualified zone 

academy (including state-of-the-art technology 

and vocational equipment), 

‘‘(B) technical assistance in developing curriculum or in training teachers in order to promote appropriate market driven technology in 

the classroom, 

‘‘(C) services of employees as volunteer mentors, 

‘‘(D) internships, field trips, or other educational opportunities outside the academy for 

students, or 

‘‘(E) any other property or service specified by 

the eligible local education agency.’’. 

(b) CONFORMING AMENDMENTS.— 

(1) Paragraph (1) of section 54A(d), as amended by this Act, is amended by striking ‘‘or’’ at 

the end of subparagraph (B), by inserting ‘‘or’’ 

at the end of subparagraph (C), and by inserting after subparagraph (C) the following new 

subparagraph: 

‘‘(D) a qualified zone academy bond,’’. 

(2) Subparagraph (C) of section 54A(d)(2), as 

amended by this Act, is amended by striking 

‘‘and’’ at the end of clause (ii), by striking the 

period at the end of clause (iii) and inserting ‘‘, 

and’’, and by adding at the end the following 

new clause: 

‘‘(iv) in the case of a qualified zone academy 

bond, a purpose specified in section 54E(a)(1).’’. 

(3) Section 1397E is amended by adding at the 

end the following new subsection: 

‘‘(m) TERMINATION.—This section shall not 

apply to any obligation issued after the date of 

the enactment of the Tax Extenders and Alternative Minimum Tax Relief Act of 2008.’’. 

(4) The table of sections for subpart I of part 

IV of subchapter A of chapter 1 is amended by 

adding at the end the following new item: 

‘‘Sec. 54E. Qualified zone academy bonds.’’. 

(c) EFFECTIVE DATE.—The amendments made 

by this section shall apply to obligations issued 

after the date of the enactment of this Act. 

SEC. 314. 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. 315. ACCELERATED DEPRECIATION FOR 

BUSINESS PROPERTY ON INDIAN 

RESERVATIONS. 

(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. 316. 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) CREDIT ALLOWED AGAINST ALTERNATIVE

MINIMUM TAX.—Subparagraph (B) of section 

38(c)(4), as amended by this Act, is amended— 

(1) by redesignating clauses (v), (vi), and (vii) 

as clauses (vi), (vii), and (viii), respectively, and 

(2) by inserting after clause (iv) the following 

new clause: 

‘‘(v) the credit determined under section 

45G,’’. 

(c) EFFECTIVE DATES.— 

(1) The amendment made by subsection (a) 

shall apply to expenditures paid or incurred 

during taxable years beginning after December 

31, 2007. 

(2) The amendments made by subsection (b) 

shall apply to credits determined under section 

45G of the Internal Revenue Code of 1986 in taxable years beginning after December 31, 2007, 

and to carrybacks of such credits. 

SEC. 317. 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. 318. 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. 319. EXTENSION OF WORK OPPORTUNITY 

TAX CREDIT FOR HURRICANE 

KATRINA EMPLOYEES. 

(a) IN GENERAL.—Paragraph (1) of section 

201(b) of the Katrina Emergency Tax Relief Act 

of 2005 is amended by striking ‘‘2-year’’ and inserting ‘‘4-year’’. 

(b) EFFECTIVE DATE.—The amendment made 

by subsection (a) shall apply to individuals 

hired after August 27, 2007. 


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SEC. 320. EXTENSION OF INCREASED REHABILITATION CREDIT FOR STRUCTURES 

IN THE GULF OPPORTUNITY ZONE. 

(a) IN GENERAL.—Subsection (h) of section 

1400N is amended by striking ‘‘December 31, 

2008’’ and inserting ‘‘December 31, 2009’’. 

(b) EFFECTIVE DATE.—The amendment made 

by this section shall apply to expenditures paid 

or incurred after the date of the enactment of 

this Act. 

SEC. 321. ENHANCED DEDUCTION FOR QUALIFIED 

COMPUTER CONTRIBUTIONS. 

(a) IN GENERAL.—Subparagraph (G) of section 

170(e)(6) 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 

during taxable years beginning after December 

31, 2007. 

SEC. 322. TAX INCENTIVES FOR INVESTMENT IN 

THE DISTRICT OF COLUMBIA. 

(a) DESIGNATION OF ZONE.— 

(1) IN GENERAL.—Subsection (f) of section 1400 

is amended by striking ‘‘2007’’ both places it appears and inserting ‘‘2009’’. 

(2) EFFECTIVE DATE.—The amendments made 

by this subsection shall apply to periods beginning after December 31, 2007. 

(b) TAX-EXEMPT ECONOMIC DEVELOPMENT

BONDS.— 

(1) IN GENERAL.—Subsection (b) of section 

1400A is amended by striking ‘‘2007’’ and inserting ‘‘2009’’. 

(2) EFFECTIVE DATE.—The amendment made 

by this subsection shall apply to bonds issued 

after December 31, 2007. 

(c) ZERO PERCENT CAPITAL GAINS RATE.— 

(1) IN GENERAL.—Subsection (b) of section 

1400B is amended by striking ‘‘2008’’ each place 

it appears and inserting ‘‘2010’’. 

(2) CONFORMING AMENDMENTS.— 

(A) Section 1400B(e)(2) is amended— 

(i) by striking ‘‘2012’’ and inserting ‘‘2014’’, 

and 

(ii) by striking ‘‘2012’’ in the heading thereof 

and inserting ‘‘2014’’. 

(B) Section 1400B(g)(2) is amended by striking 

‘‘2012’’ and inserting ‘‘2014’’. 

(C) Section 1400F(d) is amended by striking 

‘‘2012’’ and inserting ‘‘2014’’. 

(3) EFFECTIVE DATES.— 

(A) EXTENSION.—The amendments made by 

paragraph (1) shall apply to acquisitions after 

December 31, 2007. 

(B) CONFORMING AMENDMENTS.—The amendments made by paragraph (2) shall take effect 

on the date of the enactment of this Act. 

(d) FIRST-TIME HOMEBUYER CREDIT.— 

(1) IN GENERAL.—Subsection (i) of section 

1400C is amended by striking ‘‘2008’’ and inserting ‘‘2010’’. 

(2) EFFECTIVE DATE.—The amendment made 

by this subsection shall apply to property purchased after December 31, 2007. 

SEC. 323. ENHANCED CHARITABLE DEDUCTIONS 

FOR CONTRIBUTIONS OF FOOD INVENTORY. 

(a) INCREASED AMOUNT OF DEDUCTION.— 

(1) 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’’. 

(2) EFFECTIVE DATE.—The amendment made 

by this subsection shall apply to contributions 

made after December 31, 2007. 

(b) TEMPORARY SUSPENSION OF LIMITATIONS

ON CHARITABLE CONTRIBUTIONS.— 

(1) IN GENERAL.—Section 170(b) is amended by 

adding at the end the following new paragraph: 

‘‘(3) TEMPORARY SUSPENSION OF LIMITATIONS

ON CHARITABLE CONTRIBUTIONS.—In the case of 

a qualified farmer or rancher (as defined in 

paragraph (1)(E)(v)), any charitable contribution of food— 

‘‘(A) to which subsection (e)(3)(C) applies 

(without regard to clause (ii) thereof), and 

‘‘(B) which is made during the period beginning on the date of the enactment of this paragraph and before January 1, 2009, 

shall be treated for purposes of paragraph (1)(E) 

or (2)(B), whichever is applicable, as if it were 

a qualified conservation contribution which is 

made by a qualified farmer or rancher and 

which otherwise meets the requirements of such 

paragraph.’’. 

(2) EFFECTIVE DATE.—The amendment made 

by this subsection shall apply to taxable years 

ending after the date of the enactment of this 

Act. 

SEC. 324. EXTENSION OF ENHANCED CHARITABLE 

DEDUCTION FOR CONTRIBUTIONS 

OF BOOK INVENTORY. 

(a) EXTENSION.—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. 325. EXTENSION AND MODIFICATION OF 

DUTY SUSPENSION ON WOOL PRODUCTS; WOOL RESEARCH FUND; WOOL 

DUTY REFUNDS. 

(a) EXTENSION OF TEMPORARY DUTY REDUCTIONS.—Each of the following headings of the 

Harmonized Tariff Schedule of the United 

States is amended by striking the date in the effective period column and inserting ‘‘12/31/2014’’: 

(1) Heading 9902.51.11 (relating to fabrics of 

worsted wool). 

(2) Heading 9902.51.13 (relating to yarn of 

combed wool). 

(3) Heading 9902.51.14 (relating to wool fiber, 

waste, garnetted stock, combed wool, or wool 

top). 

(4) Heading 9902.51.15 (relating to fabrics of 

combed wool). 

(5) Heading 9902.51.16 (relating to fabrics of 

combed wool). 

(b) EXTENSION OF DUTY REFUNDS AND WOOL

RESEARCH TRUST FUND.— 

(1) IN GENERAL.—Section 4002(c) of the Wool 

Suit and Textile Trade Extension Act of 2004 

(Public Law 108–429; 118 Stat. 2603) is amended— 

(A) in paragraph (3)(C), by striking ‘‘2010’’ 

and inserting ‘‘2015’’; and 

(B) in paragraph (6)(A), by striking ‘‘through 

2009’’ and inserting ‘‘through 2014’’. 

(2) SUNSET.—Section 506(f) of the Trade and 

Development Act of 2000 (Public 106–200; 114 

Stat. 303 (7 U.S.C. 7101 note)) is amended by 

striking ‘‘2010’’ and inserting ‘‘2015’’. 

TITLE IV—EXTENSION OF TAX 

ADMINISTRATION PROVISIONS 

SEC. 401. PERMANENT AUTHORITY FOR UNDERCOVER OPERATIONS. 

(a) IN GENERAL.—Section 7608(c) (relating to 

rules relating to undercover operations) is 

amended by striking paragraph (6). 

(b) EFFECTIVE DATE.—The amendment made 

by this section shall apply to operations conducted after the date of the enactment of this 

Act. 

SEC. 402. PERMANENT AUTHORITY FOR DISCLOSURE OF INFORMATION RELATING 

TO TERRORIST ACTIVITIES. 

(a) DISCLOSURE OF RETURN INFORMATION TO

APPRISE APPROPRIATE OFFICIALS OF TERRORIST

ACTIVITIES.—Subparagraph (C) of section 

6103(i)(3) is amended by striking clause (iv). 

(b) DISCLOSURE UPON REQUEST OF INFORMATION RELATING TO TERRORIST ACTIVITIES.— 

Paragraph (7) of section 6103(i) is amended by 

striking subparagraph (E). 

(c) EFFECTIVE DATE.—The amendments made 

by this section shall apply to disclosures after 

the date of the enactment of this Act. 

TITLE V—ADDITIONAL TAX RELIEF AND 

OTHER TAX PROVISIONS 

Subtitle A—General Provisions 

SEC. 501. $8,500 INCOME THRESHOLD USED TO 

CALCULATE REFUNDABLE PORTION 

OF CHILD TAX CREDIT. 

(a) IN GENERAL.—Section 24(d) is amended by 

adding at the end the following new paragraph: 

‘‘(4) SPECIAL RULE FOR 2008.—Notwithstanding 

paragraph (3), in the case of any taxable year 

beginning in 2008, the dollar amount in effect 

for such taxable year under paragraph (1)(B)(i) 

shall be $8,500.’’. 

(b) EFFECTIVE DATE.—The amendment made 

by this section shall apply to taxable years beginning after December 31, 2007. 

SEC. 502. PROVISIONS RELATED TO FILM AND 

TELEVISION PRODUCTIONS. 

(a) EXTENSION 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’’. 

(b) MODIFICATION OF LIMITATION ON EXPENSING.—Subparagraph (A) of section 181(a)(2) is 

amended to read as follows: 

‘‘(A) IN GENERAL.—Paragraph (1) shall not 

apply to so much of the aggregate cost of any 

qualified film or television production as exceeds 

$15,000,000.’’. 

(c) MODIFICATIONS TO DEDUCTION FOR DOMESTIC ACTIVITIES.— 

(1) DETERMINATION OF W–2 WAGES.—Paragraph (2) of section 199(b) is amended by adding 

at the end the following new subparagraph: 

‘‘(D) SPECIAL RULE FOR QUALIFIED FILM.—In 

the case of a qualified film, such term shall include compensation for services performed in the 

United States by actors, production personnel, 

directors, and producers.’’. 

(2) DEFINITION OF QUALIFIED FILM.—Paragraph (6) of section 199(c) is amended by adding 

at the end the following: ‘‘A qualified film shall 

include any copyrights, trademarks, or other intangibles with respect to such film. The methods 

and means of distributing a qualified film shall 

not affect the availability of the deduction 

under this section.’’. 

(3) PARTNERSHIPS.—Subparagraph (A) of section 199(d)(1) is amended by striking ‘‘and’’ at 

the end of clause (ii), by striking the period at 

the end of clause (iii) and inserting ‘‘, and’’, 

and by adding at the end the following new 

clause: 

‘‘(iv) in the case of each partner of a partnership, or shareholder of an S corporation, who 

owns (directly or indirectly) at least 20 percent 

of the capital interests in such partnership or of 

the stock of such S corporation— 

‘‘(I) such partner or shareholder shall be 

treated as having engaged directly in any film 

produced by such partnership or S corporation, 

and 

‘‘(II) such partnership or S corporation shall 

be treated as having engaged directly in any 

film produced by such partner or shareholder.’’. 

(d) CONFORMING AMENDMENT.—Section 

181(d)(3)(A) is amended by striking ‘‘actors’’ 

and all that follows and inserting ‘‘actors, production personnel, directors, and producers.’’. 

(e) EFFECTIVE DATES.— 

(1) IN GENERAL.—Except as otherwise provided 

in this subsection, the amendments made by this 

section shall apply to qualified film and television productions commencing after December 

31, 2007. 

(2) DEDUCTION.—The amendments made by 

subsection (c) shall apply to taxable years beginning after December 31, 2007. 

SEC. 503. EXEMPTION FROM EXCISE TAX FOR 

CERTAIN WOODEN ARROWS DESIGNED FOR USE BY CHILDREN. 

(a) IN GENERAL.—Paragraph (2) of section 

4161(b) is amended by redesignating subparagraph (B) as subparagraph (C) and by inserting 

after subparagraph (A) the following new subparagraph: 


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H10742 CONGRESSIONAL RECORD — HOUSE October 3, 2008 

‘‘(B) EXEMPTION FOR CERTAIN WOODEN ARROW

SHAFTS.—Subparagraph (A) shall not apply to 

any shaft consisting of all natural wood with no 

laminations or artificial means of enhancing the 

spine of such shaft (whether sold separately or 

incorporated as part of a finished or unfinished 

product) of a type used in the manufacture of 

any arrow which after its assembly— 

‘‘(i) measures 5⁄16 of an inch or less in diameter, and 

‘‘(ii) is not suitable for use with a bow described in paragraph (1)(A).’’. 

(b) EFFECTIVE DATE.—The amendments made 

by this section shall apply to shafts first sold 

after the date of enactment of this Act. 

SEC. 504. INCOME AVERAGING FOR AMOUNTS RECEIVED IN CONNECTION WITH THE 

EXXON VALDEZ LITIGATION. 

(a) INCOME AVERAGING OF AMOUNTS RECEIVED

FROM THE EXXON VALDEZ LITIGATION.—For 

purposes of section 1301 of the Internal Revenue 

Code of 1986— 

(1) any qualified taxpayer who receives any 

qualified settlement income in any taxable year 

shall be treated as engaged in a fishing business 

(determined without regard to the commercial 

nature of the business), and 

(2) such qualified settlement income shall be 

treated as income attributable to such a fishing 

business for such taxable year. 

(b) CONTRIBUTIONS OF AMOUNTS RECEIVED TO

RETIREMENT ACCOUNTS.— 

(1) IN GENERAL.—Any qualified taxpayer who 

receives qualified settlement income during the 

taxable year may, at any time before the end of 

the taxable year in which such income was received, make one or more contributions to an eligible retirement plan of which such qualified 

taxpayer is a beneficiary in an aggregate 

amount not to exceed the lesser of— 

(A) $100,000 (reduced by the amount of qualified settlement income contributed to an eligible 

retirement plan in prior taxable years pursuant 

to this subsection), or 

(B) the amount of qualified settlement income 

received by the individual during the taxable 

year. 

(2) TIME WHEN CONTRIBUTIONS DEEMED

MADE.—For purposes of paragraph (1), a qualified taxpayer shall be deemed to have made a 

contribution to an eligible retirement plan on 

the last day of the taxable year in which such 

income is received if the contribution is made on 

account of such taxable year and is made not 

later than the time prescribed by law for filing 

the return for such taxable year (not including 

extensions thereof). 

(3) TREATMENT OF CONTRIBUTIONS TO ELIGIBLE

RETIREMENT PLANS.—For purposes of the Internal Revenue Code of 1986, if a contribution is 

made pursuant to paragraph (1) with respect to 

qualified settlement income, then— 

(A) except as provided in paragraph (4)— 

(i) to the extent of such contribution, the 

qualified settlement income shall not be included 

in taxable income, and 

(ii) for purposes of section 72 of such Code, 

such contribution shall not be considered to be 

investment in the contract, 

(B) the qualified taxpayer shall, to the extent 

of the amount of the contribution, be treated— 

(i) as having received the qualified settlement 

income— 

(I) in the case of a contribution to an individual retirement plan (as defined under section 

7701(a)(37) of such Code), in a distribution described in section 408(d)(3) of such Code, and 

(II) in the case of any other eligible retirement 

plan, in an eligible rollover distribution (as defined under section 402(f)(2) of such Code), and 

(ii) as having transferred the amount to the 

eligible retirement plan in a direct trustee to 

trustee transfer within 60 days of the distribution, 

(C) section 408(d)(3)(B) of the Internal Revenue Code of 1986 shall not apply with respect 

to amounts treated as a rollover under this 

paragraph, and 

(D) section 408A(c)(3)(B) of the Internal Revenue Code of 1986 shall not apply with respect 

to amounts contributed to a Roth IRA (as defined under section 408A(b) of such Code) or a 

designated Roth contribution to an applicable 

retirement plan (within the meaning of section 

402A of such Code) under this paragraph. 

(4) SPECIAL RULE FOR ROTH IRAS AND ROTH

401(k)S.—For purposes of the Internal Revenue 

Code of 1986, if a contribution is made pursuant 

to paragraph (1) with respect to qualified settlement income to a Roth IRA (as defined under 

section 408A(b) of such Code) or as a designated 

Roth contribution to an applicable retirement 

plan (within the meaning of section 402A of 

such Code), then— 

(A) the qualified settlement income shall be 

includible in taxable income, and 

(B) for purposes of section 72 of such Code, 

such contribution shall be considered to be investment in the contract. 

(5) ELIGIBLE RETIREMENT PLAN.—For purpose 

of this subsection, the term ‘‘eligible retirement 

plan’’ has the meaning given such term under 

section 402(c)(8)(B) of the Internal Revenue 

Code of 1986. 

(c) TREATMENT OF QUALIFIED SETTLEMENT INCOME UNDER EMPLOYMENT TAXES.— 

(1) SECA.—For purposes of chapter 2 of the 

Internal Revenue Code of 1986 and section 211 of 

the Social Security Act, no portion of qualified 

settlement income received by a qualified taxpayer shall be treated as self-employment income. 

(2) FICA.—For purposes of chapter 21 of the 

Internal Revenue Code of 1986 and section 209 of 

the Social Security Act, no portion of qualified 

settlement income received by a qualified taxpayer shall be treated as wages. 

(d) QUALIFIED TAXPAYER.—For purposes of 

this section, the term ‘‘qualified taxpayer’’ 

means— 

(1) any individual who is a plaintiff in the 

civil action In re Exxon Valdez, No. 89–095–CV 

(HRH) (Consolidated) (D. Alaska); or 

(2) any individual who is a beneficiary of the 

estate of such a plaintiff who— 

(A) acquired the right to receive qualified settlement income from that plaintiff; and 

(B) was the spouse or an immediate relative of 

that plaintiff. 

(e) QUALIFIED SETTLEMENT INCOME.—For purposes of this section, the term ‘‘qualified settlement income’’ means any interest and punitive 

damage awards which are— 

(1) otherwise includible in taxable income, and 

(2) received (whether as lump sums or periodic 

payments) in connection with the civil action In 

re Exxon Valdez, No. 89–095–CV (HRH) (Consolidated) (D. Alaska) (whether pre- or postjudgment and whether related to a settlement or 

judgment). 

SEC. 505. CERTAIN FARMING BUSINESS MACHINERY AND EQUIPMENT TREATED AS 5- 

YEAR PROPERTY. 

(a) IN GENERAL.—Section 168(e)(3)(B) (defining 5-year property) is amended by striking 

‘‘and’’ at the end of clause (v), by striking the 

period at the end of clause (vi)(III) and inserting ‘‘, and’’, and by inserting after clause (vi) 

the following new clause: 

‘‘(vii) any machinery or equipment (other 

than any grain bin, cotton ginning asset, fence, 

or other land improvement) which is used in a 

farming business (as defined in section 

263A(e)(4)), the original use of which commences 

with the taxpayer after December 31, 2008, and 

which is placed in service before January 1, 

2010.’’. 

(b) ALTERNATIVE SYSTEM.—The table contained in section 168(g)(3)(B) (relating to special 

rule for certain property assigned to classes) is 

amended by inserting after the item relating to 

subparagraph (B)(iii) the following: 

(B)(vii) ................................... 210’’. 

(c) EFFECTIVE DATE.—The amendments made 

by this section shall apply to property placed in 

service after December 31, 2008. 

SEC. 506. MODIFICATION OF PENALTY ON UNDERSTATEMENT OF TAXPAYER’S LIABILITY BY TAX RETURN PREPARER. 

(a) IN GENERAL.—Subsection (a) of section 

6694 is amended to read as follows: 

‘‘(a) UNDERSTATEMENT DUE TO UNREASONABLE

POSITIONS.— 

‘‘(1) IN GENERAL.—If a tax return preparer— 

‘‘(A) prepares any return or claim of refund 

with respect to which any part of an understatement of liability is due to a position described in paragraph (2), and 

‘‘(B) knew (or reasonably should have known) 

of the position, 

such tax return preparer shall pay a penalty 

with respect to each such return or claim in an 

amount equal to the greater of $1,000 or 50 percent of the income derived (or to be derived) by 

the tax return preparer with respect to the return or claim. 

‘‘(2) UNREASONABLE POSITION.— 

‘‘(A) IN GENERAL.—Except as otherwise provided in this paragraph, a position is described 

in this paragraph unless there is or was substantial authority for the position. 

‘‘(B) DISCLOSED POSITIONS.—If the position 

was disclosed as provided in section 

6662(d)(2)(B)(ii)(I) and is not a position to 

which subparagraph (C) applies, the position is 

described in this paragraph unless there is a 

reasonable basis for the position. 

‘‘(C) TAX SHELTERS AND REPORTABLE TRANSACTIONS.—If the position is with respect to a tax 

shelter (as defined in section 6662(d)(2)(C)(ii)) or 

a reportable transaction to which section 6662A 

applies, the position is described in this paragraph unless it is reasonable to believe that the 

position would more likely than not be sustained on its merits. 

‘‘(3) REASONABLE CAUSE EXCEPTION.—No penalty shall be imposed under this subsection if it 

is shown that there is reasonable cause for the 

understatement and the tax return preparer 

acted in good faith.’’. 

(b) EFFECTIVE DATE.—The amendment made 

by this section shall apply— 

(1) in the case of a position other than a position described in subparagraph (C) of section 

6694(a)(2) of the Internal Revenue Code of 1986 

(as amended by this section), to returns prepared after May 25, 2007, and 

(2) in the case of a position described in such 

subparagraph (C), to returns prepared for taxable years ending after the date of the enactment of this Act. 

Subtitle B—Paul Wellstone and Pete Domenici 

Mental Health Parity and Addiction Equity 

Act of 2008 

SEC. 511. SHORT TITLE. 

This subtitle may be cited as the ‘‘Paul 

Wellstone and Pete Domenici Mental Health 

Parity and Addiction Equity Act of 2008’’. 

SEC. 512. MENTAL HEALTH PARITY. 

(a) AMENDMENTS TO ERISA.—Section 712 of 

the Employee Retirement Income Security Act of 

1974 (29 U.S.C. 1185a) is amended— 

(1) in subsection (a), by adding at the end the 

following: 

‘‘(3) FINANCIAL REQUIREMENTS AND TREATMENT LIMITATIONS.— 

‘‘(A) IN GENERAL.—In the case of a group 

health plan (or health insurance coverage offered in connection with such a plan) that provides both medical and surgical benefits and 

mental health or substance use disorder benefits, such plan or coverage shall ensure that— 

‘‘(i) the financial requirements applicable to 

such mental health or substance use disorder 

benefits are no more restrictive than the predominant financial requirements applied to substantially all medical and surgical benefits covered by the plan (or coverage), and there are no 

separate cost sharing requirements that are applicable only with respect to mental health or 

substance use disorder benefits; and 

‘‘(ii) the treatment limitations applicable to 

such mental health or substance use disorder 


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October 3, 2008 CONGRESSIONAL RECORD — HOUSE H10743 

benefits are no more restrictive than the predominant treatment limitations applied to substantially all medical and surgical benefits covered by the plan (or coverage) and there are no 

separate treatment limitations that are applicable only with respect to mental health or substance use disorder benefits. 

‘‘(B) DEFINITIONS.—In this paragraph: 

‘‘(i) FINANCIAL REQUIREMENT.—The term ‘financial requirement’ includes deductibles, copayments, coinsurance, and out-of-pocket expenses, but excludes an aggregate lifetime limit 

and an annual limit subject to paragraphs (1) 

and (2), 

‘‘(ii) PREDOMINANT.—A financial requirement 

or treatment limit is considered to be predominant if it is the most common or frequent of 

such type of limit or requirement. 

‘‘(iii) TREATMENT LIMITATION.—The term 

‘treatment limitation’ includes limits on the frequency of treatment, number of visits, days of 

coverage, or other similar limits on the scope or 

duration of treatment. 

‘‘(4) AVAILABILITY OF PLAN INFORMATION.— 

The criteria for medical necessity determinations 

made under the plan with respect to mental 

health or substance use disorder benefits (or the 

health insurance coverage offered in connection 

with the plan with respect to such benefits) 

shall be made available by the plan administrator (or the health insurance issuer offering 

such coverage) in accordance with regulations 

to any current or potential participant, beneficiary, or contracting provider upon request. 

The reason for any denial under the plan (or 

coverage) of reimbursement or payment for services with respect to mental health or substance 

use disorder benefits in the case of any participant or beneficiary shall, on request or as otherwise required, be made available by the plan administrator (or the health insurance issuer offering such coverage) to the participant or beneficiary in accordance with regulations. 

‘‘(5) OUT-OF-NETWORK PROVIDERS.—In the 

case of a plan or coverage that provides both 

medical and surgical benefits and mental health 

or substance use disorder benefits, if the plan or 

coverage provides coverage for medical or surgical benefits provided by out-of-network providers, the plan or coverage shall provide coverage for mental health or substance use disorder benefits provided by out-of-network providers in a manner that is consistent with the 

requirements of this section.’’; 

(2) in subsection (b), by amending paragraph 

(2) to read as follows: 

‘‘(2) in the case of a group health plan (or 

health insurance coverage offered in connection 

with such a plan) that provides mental health 

or substance use disorder benefits, as affecting 

the terms and conditions of the plan or coverage 

relating to such benefits under the plan or coverage, except as provided in subsection (a).’’; 

(3) in subsection (c)— 

(A) in paragraph (1)(B)— 

(i) by inserting ‘‘(or 1 in the case of an employer residing in a State that permits small 

groups to include a single individual)’’ after ‘‘at 

least 2’’ the first place that such appears; and 

(ii) by striking ‘‘and who employs at least 2 

employees on the first day of the plan year’’; 

and 

(B) by striking paragraph (2) and inserting 

the following: 

‘‘(2) COST EXEMPTION.— 

‘‘(A) IN GENERAL.—With respect to a group 

health plan (or health insurance coverage offered in connection with such a plan), if the application of this section to such plan (or coverage) results in an increase for the plan year 

involved of the actual total costs of coverage 

with respect to medical and surgical benefits 

and mental health and substance use disorder 

benefits under the plan (as determined and certified under subparagraph (C)) by an amount 

that exceeds the applicable percentage described 

in subparagraph (B) of the actual total plan 

costs, the provisions of this section shall not 

apply to such plan (or coverage) during the following plan year, and such exemption shall 

apply to the plan (or coverage) for 1 plan year. 

An employer may elect to continue to apply 

mental health and substance use disorder parity 

pursuant to this section with respect to the 

group health plan (or coverage) involved regardless of any increase in total costs. 

‘‘(B) APPLICABLE PERCENTAGE.—With respect 

to a plan (or coverage), the applicable percentage described in this subparagraph shall be— 

‘‘(i) 2 percent in the case of the first plan year 

in which this section is applied; and 

‘‘(ii) 1 percent in the case of each subsequent 

plan year. 

‘‘(C) DETERMINATIONS BY ACTUARIES.—Determinations as to increases in actual costs under 

a plan (or coverage) for purposes of this section 

shall be made and certified by a qualified and licensed actuary who is a member in good standing of the American Academy of Actuaries. All 

such determinations shall be in a written report 

prepared by the actuary. The report, and all 

underlying documentation relied upon by the 

actuary, shall be maintained by the group 

health plan or health insurance issuer for a period of 6 years following the notification made 

under subparagraph (E). 

‘‘(D) 6-MONTH DETERMINATIONS.—If a group 

health plan (or a health insurance issuer offering coverage in connection with a group health 

plan) seeks an exemption under this paragraph, 

determinations under subparagraph (A) shall be 

made after such plan (or coverage) has complied 

with this section for the first 6 months of the 

plan year involved. 

‘‘(E) NOTIFICATION.— 

‘‘(i) IN GENERAL.—A group health plan (or a 

health insurance issuer offering coverage in 

connection with a group health plan) that, 

based upon a certification described under subparagraph (C), qualifies for an exemption under 

this paragraph, and elects to implement the exemption, shall promptly notify the Secretary, 

the appropriate State agencies, and participants 

and beneficiaries in the plan of such election. 

‘‘(ii) REQUIREMENT.—A notification to the 

Secretary under clause (i) shall include— 

‘‘(I) a description of the number of covered 

lives under the plan (or coverage) involved at 

the time of the notification, and as applicable, 

at the time of any prior election of the cost-exemption under this paragraph by such plan (or 

coverage); 

‘‘(II) for both the plan year upon which a cost 

exemption is sought and the year prior, a description of the actual total costs of coverage 

with respect to medical and surgical benefits 

and mental health and substance use disorder 

benefits under the plan; and 

‘‘(III) for both the plan year upon which a 

cost exemption is sought and the year prior, the 

actual total costs of coverage with respect to 

mental health and substance use disorder benefits under the plan. 

‘‘(iii) CONFIDENTIALITY.—A notification to the 

Secretary under clause (i) shall be confidential. 

The Secretary shall make available, upon request and on not more than an annual basis, an 

anonymous itemization of such notifications, 

that includes— 

‘‘(I) a breakdown of States by the size and 

type of employers submitting such notification; 

and 

‘‘(II) a summary of the data received under 

clause (ii). 

‘‘(F) AUDITS BY APPROPRIATE AGENCIES.—To 

determine compliance with this paragraph, the 

Secretary may audit the books and records of a 

group health plan or health insurance issuer relating to an exemption, including any actuarial 

reports prepared pursuant to subparagraph (C), 

during the 6 year period following the notification of such exemption under subparagraph (E). 

A State agency receiving a notification under 

subparagraph (E) may also conduct such an 

audit with respect to an exemption covered by 

such notification.’’; 

(4) in subsection (e), by striking paragraph (4) 

and inserting the following: 

‘‘(4) MENTAL HEALTH BENEFITS.—The term 

‘mental health benefits’ means benefits with respect to services for mental health conditions, as 

defined under the terms of the plan and in accordance with applicable Federal and State law. 

‘‘(5) SUBSTANCE USE DISORDER BENEFITS.—The 

term ‘substance use disorder benefits’ means 

benefits with respect to services for substance 

use disorders, as defined under the terms of the 

plan and in accordance with applicable Federal 

and State law.’’; 

(5) by striking subsection (f); 

(6) by inserting after subsection (e) the following: 

‘‘(f) SECRETARY REPORT.—The Secretary 

shall, by January 1, 2012, and every two years 

thereafter, submit to the appropriate committees 

of Congress a report on compliance of group 

health plans (and health insurance coverage offered in connection with such plans) with the 

requirements of this section. Such report shall 

include the results of any surveys or audits on 

compliance of group health plans (and health 

insurance coverage offered in connection with 

such plans) with such requirements and an 

analysis of the reasons for any failures to comply. 

‘‘(g) NOTICE AND ASSISTANCE.—The Secretary, 

in cooperation with the Secretaries of Health 

and Human Services and Treasury, as appropriate, shall publish and widely disseminate 

guidance and information for group health 

plans, participants and beneficiaries, applicable 

State and local regulatory bodies, and the National Association of Insurance Commissioners 

concerning the requirements of this section and 

shall provide assistance concerning such requirements and the continued operation of applicable State law. Such guidance and information shall inform participants and beneficiaries 

of how they may obtain assistance under this 

section, including, where appropriate, assistance from State consumer and insurance agencies.’’; 

(7) by striking ‘‘mental health benefits’’ and 

inserting ‘‘mental health and substance use disorder benefits’’ each place it appears in subsections (a)(1)(B)(i), (a)(1)(C), (a)(2)(B)(i), and 

(a)(2)(C); and 

(8) by striking ‘‘mental health benefits’’ and 

inserting ‘‘mental health or substance use disorder benefits’’ each place it appears (other 

than in any provision amended by the previous 

paragraph). 

(b) AMENDMENTS TO PUBLIC HEALTH SERVICE

ACT.—Section 2705 of the Public Health Service 

Act (42 U.S.C. 300gg–5) is amended— 

(1) in subsection (a), by adding at the end the 

following: 

‘‘(3) FINANCIAL REQUIREMENTS AND TREATMENT LIMITATIONS.— 

‘‘(A) IN GENERAL.—In the case of a group 

health plan (or health insurance coverage offered in connection with such a plan) that provides both medical and surgical benefits and 

mental health or substance use disorder benefits, such plan or coverage shall ensure that— 

‘‘(i) the financial requirements applicable to 

such mental health or substance use disorder 

benefits are no more restrictive than the predominant financial requirements applied to substantially all medical and surgical benefits covered by the plan (or coverage), and there are no 

separate cost sharing requirements that are applicable only with respect to mental health or 

substance use disorder benefits; and 

‘‘(ii) the treatment limitations applicable to 

such mental health or substance use disorder 

benefits are no more restrictive than the predominant treatment limitations applied to substantially all medical and surgical benefits covered by the plan (or coverage) and there are no 

separate treatment limitations that are applicable only with respect to mental health or substance use disorder benefits. 

‘‘(B) DEFINITIONS.—In this paragraph: 


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H10744 CONGRESSIONAL RECORD — HOUSE October 3, 2008 

‘‘(i) FINANCIAL REQUIREMENT.—The term ‘financial requirement’ includes deductibles, copayments, coinsurance, and out-of-pocket expenses, but excludes an aggregate lifetime limit 

and an annual limit subject to paragraphs (1) 

and (2). 

‘‘(ii) PREDOMINANT.—A financial requirement 

or treatment limit is considered to be predominant if it is the most common or frequent of 

such type of limit or requirement. 

‘‘(iii) TREATMENT LIMITATION.—The term 

‘treatment limitation’ includes limits on the frequency of treatment, number of visits, days of 

coverage, or other similar limits on the scope or 

duration of treatment. 

‘‘(4) AVAILABILITY OF PLAN INFORMATION.— 

The criteria for medical necessity determinations 

made under the plan with respect to mental 

health or substance use disorder benefits (or the 

health insurance coverage offered in connection 

with the plan with respect to such benefits) 

shall be made available by the plan administrator (or the health insurance issuer offering 

such coverage) in accordance with regulations 

to any current or potential participant, beneficiary, or contracting provider upon request. 

The reason for any denial under the plan (or 

coverage) of reimbursement or payment for services with respect to mental health or substance 

use disorder benefits in the case of any participant or beneficiary shall, on request or as otherwise required, be made available by the plan administrator (or the health insurance issuer offering such coverage) to the participant or beneficiary in accordance with regulations. 

‘‘(5) OUT-OF-NETWORK PROVIDERS.—In the 

case of a plan or coverage that provides both 

medical and surgical benefits and mental health 

or substance use disorder benefits, if the plan or 

coverage provides coverage for medical or surgical benefits provided by out-of-network providers, the plan or coverage shall provide coverage for mental health or substance use disorder benefits provided by out-of-network providers in a manner that is consistent with the 

requirements of this section.’’; 

(2) in subsection (b), by amending paragraph 

(2) to read as follows: 

‘‘(2) in the case of a group health plan (or 

health insurance coverage offered in connection 

with such a plan) that provides mental health 

or substance use disorder benefits, as affecting 

the terms and conditions of the plan or coverage 

relating to such benefits under the plan or coverage, except as provided in subsection (a).’’; 

(3) in subsection (c)— 

(A) in paragraph (1), by inserting before the 

period the following: ‘‘(as defined in section 

2791(e)(4), except that for purposes of this paragraph such term shall include employers with 1 

employee in the case of an employer residing in 

a State that permits small groups to include a 

single individual)’’; and 

(B) by striking paragraph (2) and inserting 

the following: 

‘‘(2) COST EXEMPTION.— 

‘‘(A) IN GENERAL.—With respect to a group 

health plan (or health insurance coverage offered in connection with such a plan), if the application of this section to such plan (or coverage) results in an increase for the plan year 

involved of the actual total costs of coverage 

with respect to medical and surgical benefits 

and mental health and substance use disorder 

benefits under the plan (as determined and certified under subparagraph (C)) by an amount 

that exceeds the applicable percentage described 

in subparagraph (B) of the actual total plan 

costs, the provisions of this section shall not 

apply to such plan (or coverage) during the following plan year, and such exemption shall 

apply to the plan (or coverage) for 1 plan year. 

An employer may elect to continue to apply 

mental health and substance use disorder parity 

pursuant to this section with respect to the 

group health plan (or coverage) involved regardless of any increase in total costs. 

‘‘(B) APPLICABLE PERCENTAGE.—With respect 

to a plan (or coverage), the applicable percentage described in this subparagraph shall be— 

‘‘(i) 2 percent in the case of the first plan year 

in which this section is applied; and 

‘‘(ii) 1 percent in the case of each subsequent 

plan year. 

‘‘(C) DETERMINATIONS BY ACTUARIES.—Determinations as to increases in actual costs under 

a plan (or coverage) for purposes of this section 

shall be made and certified by a qualified and licensed actuary who is a member in good standing of the American Academy of Actuaries. All 

such determinations shall be in a written report 

prepared by the actuary. The report, and all 

underlying documentation relied upon by the 

actuary, shall be maintained by the group 

health plan or health insurance issuer for a period of 6 years following the notification made 

under subparagraph (E). 

‘‘(D) 6-MONTH DETERMINATIONS.—If a group 

health plan (or a health insurance issuer offering coverage in connection with a group health 

plan) seeks an exemption under this paragraph, 

determinations under subparagraph (A) shall be 

made after such plan (or coverage) has complied 

with this section for the first 6 months of the 

plan year involved. 

‘‘(E) NOTIFICATION.— 

‘‘(i) IN GENERAL.—A group health plan (or a 

health insurance issuer offering coverage in 

connection with a group health plan) that, 

based upon a certification described under subparagraph (C), qualifies for an exemption under 

this paragraph, and elects to implement the exemption, shall promptly notify the Secretary, 

the appropriate State agencies, and participants 

and beneficiaries in the plan of such election. 

‘‘(ii) REQUIREMENT.—A notification to the 

Secretary under clause (i) shall include— 

‘‘(I) a description of the number of covered 

lives under the plan (or coverage) involved at 

the time of the notification, and as applicable, 

at the time of any prior election of the cost-exemption under this paragraph by such plan (or 

coverage); 

‘‘(II) for both the plan year upon which a cost 

exemption is sought and the year prior, a description of the actual total costs of coverage 

with respect to medical and surgical benefits 

and mental health and substance use disorder 

benefits under the plan; and 

‘‘(III) for both the plan year upon which a 

cost exemption is sought and the year prior, the 

actual total costs of coverage with respect to 

mental health and substance use disorder benefits under the plan. 

‘‘(iii) CONFIDENTIALITY.—A notification to the 

Secretary under clause (i) shall be confidential. 

The Secretary shall make available, upon request and on not more than an annual basis, an 

anonymous itemization of such notifications, 

that includes— 

‘‘(I) a breakdown of States by the size and 

type of employers submitting such notification; 

and 

‘‘(II) a summary of the data received under 

clause (ii). 

‘‘(F) AUDITS BY APPROPRIATE AGENCIES.—To 

determine compliance with this paragraph, the 

Secretary may audit the books and records of a 

group health plan or health insurance issuer relating to an exemption, including any actuarial 

reports prepared pursuant to subparagraph (C), 

during the 6 year period following the notification of such exemption under subparagraph (E). 

A State agency receiving a notification under 

subparagraph (E) may also conduct such an 

audit with respect to an exemption covered by 

such notification.’’; 

(4) in subsection (e), by striking paragraph (4) 

and inserting the following: 

‘‘(4) MENTAL HEALTH BENEFITS.—The term 

‘mental health benefits’ means benefits with respect to services for mental health conditions, as 

defined under the terms of the plan and in accordance with applicable Federal and State law. 

‘‘(5) SUBSTANCE USE DISORDER BENEFITS.—The 

term ‘substance use disorder benefits’ means 

benefits with respect to services for substance 

use disorders, as defined under the terms of the 

plan and in accordance with applicable Federal 

and State law.’’; 

(5) by striking subsection (f); 

(6) by striking ‘‘mental health benefits’’ and 

inserting ‘‘mental health and substance use disorder benefits’’ each place it appears in subsections (a)(1)(B)(i), (a)(1)(C), (a)(2)(B)(i), and 

(a)(2)(C); and 

(7) by striking ‘‘mental health benefits’’ and 

inserting ‘‘mental health or substance use disorder benefits’’ each place it appears (other 

than in any provision amended by the previous 

paragraph). 

(c) AMENDMENTS TO INTERNAL REVENUE

CODE.—Section 9812 of the Internal Revenue 

Code of 1986 is amended— 

(1) in subsection (a), by adding at the end the 

following: 

‘‘(3) FINANCIAL REQUIREMENTS AND TREATMENT LIMITATIONS.— 

‘‘(A) IN GENERAL.—In the case of a group 

health plan that provides both medical and surgical benefits and mental health or substance 

use disorder benefits, such plan shall ensure 

that— 

‘‘(i) the financial requirements applicable to 

such mental health or substance use disorder 

benefits are no more restrictive than the predominant financial requirements applied to substantially all medical and surgical benefits covered by the plan, and there are no separate cost 

sharing requirements that are applicable only 

with respect to mental health or substance use 

disorder benefits; and 

‘‘(ii) the treatment limitations applicable to 

such mental health or substance use disorder 

benefits are no more restrictive than the predominant treatment limitations applied to substantially all medical and surgical benefits covered by the plan and there are no separate 

treatment limitations that are applicable only 

with respect to mental health or substance use 

disorder benefits. 

‘‘(B) DEFINITIONS.—In this paragraph: 

‘‘(i) FINANCIAL REQUIREMENT.—The term ‘financial requirement’ includes deductibles, copayments, coinsurance, and out-of-pocket expenses, but excludes an aggregate lifetime limit 

and an annual limit subject to paragraphs (1) 

and (2), 

‘‘(ii) PREDOMINANT.—A financial requirement 

or treatment limit is considered to be predominant if it is the most common or frequent of 

such type of limit or requirement. 

‘‘(iii) TREATMENT LIMITATION.—The term 

‘treatment limitation’ includes limits on the frequency of treatment, number of visits, days of 

coverage, or other similar limits on the scope or 

duration of treatment. 

‘‘(4) AVAILABILITY OF PLAN INFORMATION.— 

The criteria for medical necessity determinations 

made under the plan with respect to mental 

health or substance use disorder benefits shall 

be made available by the plan administrator in 

accordance with regulations to any current or 

potential participant, beneficiary, or contracting provider upon request. The reason for 

any denial under the plan of reimbursement or 

payment for services with respect to mental 

health or substance use disorder benefits in the 

case of any participant or beneficiary shall, on 

request or as otherwise required, be made available by the plan administrator to the participant or beneficiary in accordance with regulations. 

‘‘(5) OUT-OF-NETWORK PROVIDERS.—In the 

case of a plan that provides both medical and 

surgical benefits and mental health or substance 

use disorder benefits, if the plan provides coverage for medical or surgical benefits provided 

by out-of-network providers, the plan shall provide coverage for mental health or substance use 

disorder benefits provided by out-of-network 

providers in a manner that is consistent with 

the requirements of this section.’’; 

(2) in subsection (b), by amending paragraph 

(2) to read as follows: 


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October 3, 2008 CONGRESSIONAL RECORD — HOUSE H10745 

‘‘(2) in the case of a group health plan that 

provides mental health or substance use disorder 

benefits, as affecting the terms and conditions of 

the plan relating to such benefits under the 

plan, except as provided in subsection (a).’’; 

(3) in subsection (c)— 

(A) by amending paragraph (1) to read as follows: 

‘‘(1) SMALL EMPLOYER EXEMPTION.— 

‘‘(A) IN GENERAL.—This section shall not 

apply to any group health plan for any plan 

year of a small employer. 

‘‘(B) SMALL EMPLOYER.—For purposes of subparagraph (A), the term ‘small employer’ means, 

with respect to a calendar year and a plan year, 

an employer who employed an average of at 

least 2 (or 1 in the case of an employer residing 

in a State that permits small groups to include 

a single individual) but not more than 50 employees on business days during the preceding 

calendar year. For purposes of the preceding 

sentence, all persons treated as a single employer under subsection (b), (c), (m), or (o) of 

section 414 shall be treated as 1 employer and 

rules similar to rules of subparagraphs (B) and 

(C) of section 4980D(d)(2) shall apply.’’; and 

(B) by striking paragraph (2) and inserting 

the following: 

‘‘(2) COST EXEMPTION.— 

‘‘(A) IN GENERAL.—With respect to a group 

health plan, if the application of this section to 

such plan results in an increase for the plan 

year involved of the actual total costs of coverage with respect to medical and surgical benefits and mental health and substance use disorder benefits under the plan (as determined 

and certified under subparagraph (C)) by an 

amount that exceeds the applicable percentage 

described in subparagraph (B) of the actual 

total plan costs, the provisions of this section 

shall not apply to such plan during the following plan year, and such exemption shall 

apply to the plan for 1 plan year. An employer 

may elect to continue to apply mental health 

and substance use disorder parity pursuant to 

this section with respect to the group health 

plan involved regardless of any increase in total 

costs. 

‘‘(B) APPLICABLE PERCENTAGE.—With respect 

to a plan, the applicable percentage described in 

this subparagraph shall be— 

‘‘(i) 2 percent in the case of the first plan year 

in which this section is applied; and 

‘‘(ii) 1 percent in the case of each subsequent 

plan year. 

‘‘(C) DETERMINATIONS BY ACTUARIES.—Determinations as to increases in actual costs under 

a plan for purposes of this section shall be made 

and certified by a qualified and licensed actuary who is a member in good standing of the 

American Academy of Actuaries. All such determinations shall be in a written report prepared 

by the actuary. The report, and all underlying 

documentation relied upon by the actuary, shall 

be maintained by the group health plan for a 

period of 6 years following the notification made 

under subparagraph (E). 

‘‘(D) 6-MONTH DETERMINATIONS.—If a group 

health plan seeks an exemption under this paragraph, determinations under subparagraph (A) 

shall be made after such plan has complied with 

this section for the first 6 months of the plan 

year involved. 

‘‘(E) NOTIFICATION.— 

‘‘(i) IN GENERAL.—A group health plan that, 

based upon a certification described under subparagraph (C), qualifies for an exemption under 

this paragraph, and elects to implement the exemption, shall promptly notify the Secretary, 

the appropriate State agencies, and participants 

and beneficiaries in the plan of such election. 

‘‘(ii) REQUIREMENT.—A notification to the 

Secretary under clause (i) shall include— 

‘‘(I) a description of the number of covered 

lives under the plan involved at the time of the 

notification, and as applicable, at the time of 

any prior election of the cost-exemption under 

this paragraph by such plan; 

‘‘(II) for both the plan year upon which a cost 

exemption is sought and the year prior, a description of the actual total costs of coverage 

with respect to medical and surgical benefits 

and mental health and substance use disorder 

benefits under the plan; and 

‘‘(III) for both the plan year upon which a 

cost exemption is sought and the year prior, the 

actual total costs of coverage with respect to 

mental health and substance use disorder benefits under the plan. 

‘‘(iii) CONFIDENTIALITY.—A notification to the 

Secretary under clause (i) shall be confidential. 

The Secretary shall make available, upon request and on not more than an annual basis, an 

anonymous itemization of such notifications, 

that includes— 

‘‘(I) a breakdown of States by the size and 

type of employers submitting such notification; 

and 

‘‘(II) a summary of the data received under 

clause (ii). 

‘‘(F) AUDITS BY APPROPRIATE AGENCIES.—To 

determine compliance with this paragraph, the 

Secretary may audit the books and records of a 

group health plan relating to an exemption, including any actuarial reports prepared pursuant to subparagraph (C), during the 6 year period following the notification of such exemption under subparagraph (E). A State agency receiving a notification under subparagraph (E) 

may also conduct such an audit with respect to 

an exemption covered by such notification.’’; 

(4) in subsection (e), by striking paragraph (4) 

and inserting the following: 

‘‘(4) MENTAL HEALTH BENEFITS.—The term 

‘mental health benefits’ means benefits with respect to services for mental health conditions, as 

defined under the terms of the plan and in accordance with applicable Federal and State law. 

‘‘(5) SUBSTANCE USE DISORDER BENEFITS.—The 

term ‘substance use disorder benefits’ means 

benefits with respect to services for substance 

use disorders, as defined under the terms of the 

plan and in accordance with applicable Federal 

and State law.’’; 

(5) by striking subsection (f); 

(6) by striking ‘‘mental health benefits’’ and 

inserting ‘‘mental health and substance use disorder benefits’’ each place it appears in subsections (a)(1)(B)(i), (a)(1)(C), (a)(2)(B)(i), and 

(a)(2)(C); and 

(7) by striking ‘‘mental health benefits’’ and 

inserting ‘‘mental health or substance use disorder benefits’’ each place it appears (other 

than in any provision amended by the previous 

paragraph). 

(d) REGULATIONS.—Not later than 1 year after 

the date of enactment of this Act, the Secretaries of Labor, Health and Human Services, 

and the Treasury shall issue regulations to 

carry out the amendments made by subsections 

(a), (b), and (c), respectively. 

(e) EFFECTIVE DATE.— 

(1) IN GENERAL.—The amendments made by 

this section shall apply with respect to group 

health plans for plan years beginning after the 

date that is 1 year after the date of enactment 

of this Act, regardless of whether regulations 

have been issued to carry out such amendments 

by such effective date, except that the amendments made by subsections (a)(5), (b)(5), and 

(c)(5), relating to striking of certain sunset provisions, shall take effect on January 1, 2009. 

(2) SPECIAL RULE FOR COLLECTIVE BARGAINING

AGREEMENTS.—In the case of a group health 

plan maintained pursuant to one or more collective bargaining agreements between employee 

representatives and one or more employers ratified before the date of the enactment of this Act, 

the amendments made by this section shall not 

apply to plan years beginning before the later 

of— 

(A) the date on which the last of the collective 

bargaining agreements relating to the plan terminates (determined without regard to any extension thereof agreed to after the date of the 

enactment of this Act), or 

(B) January 1, 2009. 

For purposes of subparagraph (A), any plan 

amendment made pursuant to a collective bargaining agreement relating to the plan which 

amends the plan solely to conform to any requirement added by this section shall not be 

treated as a termination of such collective bargaining agreement. 

(f) ASSURING COORDINATION.—The Secretary 

of Health and Human Services, the Secretary of 

Labor, and the Secretary of the Treasury may 

ensure, through the execution or revision of an 

interagency memorandum of understanding 

among such Secretaries, that— 

(1) regulations, rulings, and interpretations 

issued by such Secretaries relating to the same 

matter over which two or more such Secretaries 

have responsibility under this section (and the 

amendments made by this section) are administered so as to have the same effect at all times; 

and 

(2) coordination of policies relating to enforcing the same requirements through such Secretaries in order to have a coordinated enforcement strategy that avoids duplication of enforcement efforts and assigns priorities in enforcement. 

(g) CONFORMING CLERICAL AMENDMENTS.— 

(1) ERISA HEADING.— 

(A) IN GENERAL.—The heading of section 712 

of the Employee Retirement Income Security Act 

of 1974 is amended to read as follows: 

‘‘SEC. 712. PARITY IN MENTAL HEALTH AND SUBSTANCE USE DISORDER BENEFITS.’’. 

(B) CLERICAL AMENDMENT.—The table of contents in section 1 of such Act is amended by 

striking the item relating to section 712 and inserting the following new item: 

‘‘Sec. 712. Parity in mental health and substance use disorder benefits.’’. 

(2) PHSA HEADING.—The heading of section 

2705 of the Public Health Service Act is amended 

to read as follows: 

‘‘SEC. 2705. PARITY IN MENTAL HEALTH AND SUBSTANCE USE DISORDER BENEFITS.’’. 

(3) IRC HEADING.— 

(A) IN GENERAL.—The heading of section 9812 

of the Internal Revenue Code of 1986 is amended 

to read as follows: 

‘‘SEC. 9812. PARITY IN MENTAL HEALTH AND SUBSTANCE USE DISORDER BENEFITS.’’. 

(B) CLERICAL AMENDMENT.—The table of sections for subchapter B of chapter 100 of such 

Code is amended by striking the item relating to 

section 9812 and inserting the following new 

item: 

‘‘Sec. 9812. Parity in mental health and substance use disorder benefits.’’. 

(h) GAO STUDY ON COVERAGE AND EXCLUSION

OF MENTAL HEALTH AND SUBSTANCE USE DISORDER DIAGNOSES.— 

(1) IN GENERAL.—The Comptroller General of 

the United States shall conduct a study that 

analyzes the specific rates, patterns, and trends 

in coverage and exclusion of specific mental 

health and substance use disorder diagnoses by 

health plans and health insurance. The study 

shall include an analysis of— 

(A) specific coverage rates for all mental 

health conditions and substance use disorders; 

(B) which diagnoses are most commonly covered or excluded; 

(C) whether implementation of this Act has 

affected trends in coverage or exclusion of such 

diagnoses; and 

(D) the impact of covering or excluding specific diagnoses on participants’ and enrollees’ 

health, their health care coverage, and the costs 

of delivering health care. 

(2) REPORTS.—Not later than 3 years after the 

date of the enactment of this Act, and 2 years 

after the date of submission the first report 

under this paragraph, the Comptroller General 

shall submit to Congress a report on the results 

of the study conducted under paragraph (1). 


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H10746 CONGRESSIONAL RECORD — HOUSE October 3, 2008 

TITLE VI—OTHER PROVISIONS 

SEC. 601. SECURE RURAL SCHOOLS AND COMMUNITY SELF-DETERMINATION PROGRAM. 

(a) REAUTHORIZATION OF THE SECURE RURAL

SCHOOLS AND COMMUNITY SELF-DETERMINATION

ACT OF 2000.—The Secure Rural Schools and 

Community Self-Determination Act of 2000 (16 

U.S.C. 500 note; Public Law 106–393) is amended 

by striking sections 1 through 403 and inserting 

the following: 

‘‘SECTION 1. SHORT TITLE. 

‘‘This Act may be cited as the ‘Secure Rural 

Schools and Community Self-Determination Act 

of 2000’. 

‘‘SEC. 2. PURPOSES. 

‘‘The purposes of this Act are— 

‘‘(1) to stabilize and transition payments to 

counties to provide funding for schools and 

roads that supplements other available funds; 

‘‘(2) to make additional investments in, and 

create additional employment opportunities 

through, projects that— 

‘‘(A)(i) improve the maintenance of existing 

infrastructure; 

‘‘(ii) implement stewardship objectives that 

enhance forest ecosystems; and 

‘‘(iii) restore and improve land health and 

water quality; 

‘‘(B) enjoy broad-based support; and 

‘‘(C) have objectives that may include— 

‘‘(i) road, trail, and infrastructure maintenance or obliteration; 

‘‘(ii) soil productivity improvement; 

‘‘(iii) improvements in forest ecosystem health; 

‘‘(iv) watershed restoration and maintenance; 

‘‘(v) the restoration, maintenance, and improvement of wildlife and fish habitat; 

‘‘(vi) the control of noxious and exotic weeds; 

and 

‘‘(vii) the reestablishment of native species; 

and 

‘‘(3) to improve cooperative relationships 

among— 

‘‘(A) the people that use and care for Federal 

land; and 

‘‘(B) the agencies that manage the Federal 

land. 

‘‘SEC. 3. DEFINITIONS. 

‘‘In this Act: 

‘‘(1) ADJUSTED SHARE.—The term ‘adjusted 

share’ means the number equal to the quotient 

obtained by dividing— 

‘‘(A) the number equal to the quotient obtained by dividing— 

‘‘(i) the base share for the eligible county; by 

‘‘(ii) the income adjustment for the eligible 

county; by 

‘‘(B) the number equal to the sum of the 

quotients obtained under subparagraph (A) and 

paragraph (8)(A) for all eligible counties. 

‘‘(2) BASE SHARE.—The term ‘base share’ 

means the number equal to the average of— 

‘‘(A) the quotient obtained by dividing— 

‘‘(i) the number of acres of Federal land described in paragraph (7)(A) in each eligible 

county; by 

‘‘(ii) the total number acres of Federal land in 

all eligible counties in all eligible States; and 

‘‘(B) the quotient obtained by dividing— 

‘‘(i) the amount equal to the average of the 3 

highest 25-percent payments and safety net payments made to each eligible State for each eligible county during the eligibility period; by 

‘‘(ii) the amount equal to the sum of the 

amounts calculated under clause (i) and paragraph (9)(B)(i) for all eligible counties in all eligible States during the eligibility period. 

‘‘(3) COUNTY PAYMENT.—The term ‘county 

payment’ means the payment for an eligible 

county calculated under section 101(b). 

‘‘(4) ELIGIBLE COUNTY.—The term ‘eligible 

county’ means any county that— 

‘‘(A) contains Federal land (as defined in 

paragraph (7)); and 

‘‘(B) elects to receive a share of the State payment or the county payment under section 

102(b). 

‘‘(5) ELIGIBILITY PERIOD.—The term ‘eligibility 

period’ means fiscal year 1986 through fiscal 

year 1999. 

‘‘(6) ELIGIBLE STATE.—The term ‘eligible State’ 

means a State or territory of the United States 

that received a 25-percent payment for 1 or more 

fiscal years of the eligibility period. 

‘‘(7) FEDERAL LAND.—The term ‘Federal land’ 

means— 

‘‘(A) land within the National Forest System, 

as defined in section 11(a) of the Forest and 

Rangeland Renewable Resources Planning Act 

of 1974 (16 U.S.C. 1609(a)) exclusive of the National Grasslands and land utilization projects 

designated as National Grasslands administered 

pursuant to the Act of July 22, 1937 (7 U.S.C. 

1010–1012); and 

‘‘(B) such portions of the revested Oregon and 

California Railroad and reconveyed Coos Bay 

Wagon Road grant land as are or may hereafter 

come under the jurisdiction of the Department 

of the Interior, which have heretofore or may 

hereafter be classified as timberlands, and 

power-site land valuable for timber, that shall 

be managed, except as provided in the former 

section 3 of the Act of August 28, 1937 (50 Stat. 

875; 43 U.S.C. 1181c), for permanent forest production. 

‘‘(8) 50-PERCENT ADJUSTED SHARE.—The term 

‘50-percent adjusted share’ means the number 

equal to the quotient obtained by dividing— 

‘‘(A) the number equal to the quotient obtained by dividing— 

‘‘(i) the 50-percent base share for the eligible 

county; by 

‘‘(ii) the income adjustment for the eligible 

county; by 

‘‘(B) the number equal to the sum of the 

quotients obtained under subparagraph (A) and 

paragraph (1)(A) for all eligible counties. 

‘‘(9) 50-PERCENT BASE SHARE.—The term ‘50- 

percent base share’ means the number equal to 

the average of— 

‘‘(A) the quotient obtained by dividing— 

‘‘(i) the number of acres of Federal land described in paragraph (7)(B) in each eligible 

county; by 

‘‘(ii) the total number acres of Federal land in 

all eligible counties in all eligible States; and 

‘‘(B) the quotient obtained by dividing— 

‘‘(i) the amount equal to the average of the 3 

highest 50-percent payments made to each eligible county during the eligibility period; by 

‘‘(ii) the amount equal to the sum of the 

amounts calculated under clause (i) and paragraph (2)(B)(i) for all eligible counties in all eligible States during the eligibility period. 

‘‘(10) 50-PERCENT PAYMENT.—The term ‘50-percent payment’ means the payment that is the 

sum of the 50-percent share otherwise paid to a 

county pursuant to title II of the Act of August 

28, 1937 (chapter 876; 50 Stat. 875; 43 U.S.C. 

1181f), and the payment made to a county pursuant to the Act of May 24, 1939 (chapter 144; 53 

Stat. 753; 43 U.S.C. 1181f–1 et seq.). 

‘‘(11) FULL FUNDING AMOUNT.—The term ‘full 

funding amount’ means— 

‘‘(A) $500,000,000 for fiscal year 2008; and 

‘‘(B) for fiscal year 2009 and each fiscal year 

thereafter, the amount that is equal to 90 percent of the full funding amount for the preceding fiscal year. 

‘‘(12) INCOME ADJUSTMENT.—The term ‘income 

adjustment’ means the square of the quotient 

obtained by dividing— 

‘‘(A) the per capita personal income for each 

eligible county; by 

‘‘(B) the median per capita personal income of 

all eligible counties. 

‘‘(13) PER CAPITA PERSONAL INCOME.—The 

term ‘per capita personal income’ means the 

most recent per capita personal income data, as 

determined by the Bureau of Economic Analysis. 

‘‘(14) SAFETY NET PAYMENTS.—The term ‘safety net payments’ means the special payment 

amounts paid to States and counties required by 

section 13982 or 13983 of the Omnibus Budget 

Reconciliation Act of 1993 (Public Law 103–66; 

16 U.S.C. 500 note; 43 U.S.C. 1181f note). 

‘‘(15) SECRETARY CONCERNED.—The term ‘Secretary concerned’ means— 

‘‘(A) the Secretary of Agriculture or the designee of the Secretary of Agriculture with respect to the Federal land described in paragraph 

(7)(A); and 

‘‘(B) the Secretary of the Interior or the designee of the Secretary of the Interior with respect to the Federal land described in paragraph 

(7)(B). 

‘‘(16) STATE PAYMENT.—The term ‘State payment’ means the payment for an eligible State 

calculated under section 101(a). 

‘‘(17) 25-PERCENT PAYMENT.—The term ‘25-percent payment’ means the payment to States required by the sixth paragraph under the heading of ‘FOREST SERVICE’ in the Act of May 

23, 1908 (35 Stat. 260; 16 U.S.C. 500), and section 

13 of the Act of March 1, 1911 (36 Stat. 963; 16 

U.S.C. 500). 

‘‘TITLE I—SECURE PAYMENTS FOR STATES 

AND COUNTIES CONTAINING FEDERAL 

LAND 

‘‘SEC. 101. SECURE PAYMENTS FOR STATES CONTAINING FEDERAL LAND. 

‘‘(a) STATE PAYMENT.—For each of fiscal 

years 2008 through 2011, the Secretary of Agriculture shall calculate for each eligible State an 

amount equal to the sum of the products obtained by multiplying— 

‘‘(1) the adjusted share for each eligible county within the eligible State; by 

‘‘(2) the full funding amount for the fiscal 

year. 

‘‘(b) COUNTY PAYMENT.—For each of fiscal 

years 2008 through 2011, the Secretary of the Interior shall calculate for each eligible county 

that received a 50-percent payment during the 

eligibility period an amount equal to the product obtained by multiplying— 

‘‘(1) the 50-percent adjusted share for the eligible county; by 

‘‘(2) the full funding amount for the fiscal 

year. 

‘‘SEC. 102. PAYMENTS TO STATES AND COUNTIES. 

‘‘(a) PAYMENT AMOUNTS.—Except as provided 

in section 103, the Secretary of the Treasury 

shall pay to— 

‘‘(1) a State or territory of the United States 

an amount equal to the sum of the amounts 

elected under subsection (b) by each county 

within the State or territory for— 

‘‘(A) if the county is eligible for the 25-percent 

payment, the share of the 25-percent payment; 

or 

‘‘(B) the share of the State payment of the eligible county; and 

‘‘(2) a county an amount equal to the amount 

elected under subsection (b) by each county 

for— 

‘‘(A) if the county is eligible for the 50-percent 

payment, the 50-percent payment; or 

‘‘(B) the county payment for the eligible county. 

‘‘(b) ELECTION TO RECEIVE PAYMENT

AMOUNT.— 

‘‘(1) ELECTION; SUBMISSION OF RESULTS.— 

‘‘(A) IN GENERAL.—The election to receive a 

share of the State payment, the county payment, a share of the State payment and the 

county payment, a share of the 25-percent payment, the 50-percent payment, or a share of the 

25-percent payment and the 50-percent payment, 

as applicable, shall be made at the discretion of 

each affected county by August 1, 2008 (or as 

soon thereafter as the Secretary concerned determines is practicable), and August 1 of each 

second fiscal year thereafter, in accordance 

with paragraph (2), and transmitted to the Secretary concerned by the Governor of each eligible State. 

‘‘(B) FAILURE TO TRANSMIT.—If an election for 

an affected county is not transmitted to the Secretary concerned by the date specified under 

subparagraph (A), the affected county shall be 


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October 3, 2008 CONGRESSIONAL RECORD — HOUSE H10747 

considered to have elected to receive a share of 

the State payment, the county payment, or a 

share of the State payment and the county payment, as applicable. 

‘‘(2) DURATION OF ELECTION.— 

‘‘(A) IN GENERAL.—A county election to receive a share of the 25-percent payment or 50- 

percent payment, as applicable, shall be effective for 2 fiscal years. 

‘‘(B) FULL FUNDING AMOUNT.—If a county 

elects to receive a share of the State payment or 

the county payment, the election shall be effective for all subsequent fiscal years through fiscal year 2011. 

‘‘(3) SOURCE OF PAYMENT AMOUNTS.—The payment to an eligible State or eligible county 

under this section for a fiscal year shall be derived from— 

‘‘(A) any amounts that are appropriated to 

carry out this Act; 

‘‘(B) any revenues, fees, penalties, or miscellaneous receipts, exclusive of deposits to any relevant trust fund, special account, or permanent 

operating funds, received by the Federal Government from activities by the Bureau of Land 

Management or the Forest Service on the applicable Federal land; and 

‘‘(C) to the extent of any shortfall, out of any 

amounts in the Treasury of the United States 

not otherwise appropriated. 

‘‘(c) DISTRIBUTION AND EXPENDITURE OF PAYMENTS.— 

‘‘(1) DISTRIBUTION METHOD.—A State that receives a payment under subsection (a) for Federal land described in section 3(7)(A) shall distribute the appropriate payment amount among 

the appropriate counties in the State in accordance with— 

‘‘(A) the Act of May 23, 1908 (16 U.S.C. 500); 

and 

‘‘(B) section 13 of the Act of March 1, 1911 (36 

Stat. 963; 16 U.S.C. 500). 

‘‘(2) EXPENDITURE PURPOSES.—Subject to subsection (d), payments received by a State under 

subsection (a) and distributed to counties in accordance with paragraph (1) shall be expended 

as required by the laws referred to in paragraph 

(1). 

‘‘(d) EXPENDITURE RULES FOR ELIGIBLE COUNTIES.— 

‘‘(1) ALLOCATIONS.— 

‘‘(A) USE OF PORTION IN SAME MANNER AS 25- 

PERCENT PAYMENT OR 50-PERCENT PAYMENT, AS

APPLICABLE.—Except as provided in paragraph 

(3)(B), if an eligible county elects to receive its 

share of the State payment or the county payment, not less than 80 percent, but not more 

than 85 percent, of the funds shall be expended 

in the same manner in which the 25-percent 

payments or 50-percent payment, as applicable, 

are required to be expended. 

‘‘(B) ELECTION AS TO USE OF BALANCE.—Except as provided in subparagraph (C), an eligible county shall elect to do 1 or more of the following with the balance of any funds not expended pursuant to subparagraph (A): 

‘‘(i) Reserve any portion of the balance for 

projects in accordance with title II. 

‘‘(ii) Reserve not more than 7 percent of the 

total share for the eligible county of the State 

payment or the county payment for projects in 

accordance with title III. 

‘‘(iii) Return the portion of the balance not reserved under clauses (i) and (ii) to the Treasury 

of the United States. 

‘‘(C) COUNTIES WITH MODEST DISTRIBUTIONS.— 

In the case of each eligible county to which 

more than $100,000, but less than $350,000, is distributed for any fiscal year pursuant to either or 

both of paragraphs (1)(B) and (2)(B) of subsection (a), the eligible county, with respect to 

the balance of any funds not expended pursuant to subparagraph (A) for that fiscal year, 

shall— 

‘‘(i) reserve any portion of the balance for— 

‘‘(I) carrying out projects under title II; 

‘‘(II) carrying out projects under title III; or 

‘‘(III) a combination of the purposes described 

in subclauses (I) and (II); or 

‘‘(ii) return the portion of the balance not reserved under clause (i) to the Treasury of the 

United States. 

‘‘(2) DISTRIBUTION OF FUNDS.— 

‘‘(A) IN GENERAL.—Funds reserved by an eligible county under subparagraph (B)(i) or (C)(i) 

of paragraph (1) for carrying out projects under 

title II shall be deposited in a special account in 

the Treasury of the United States. 

‘‘(B) AVAILABILITY.—Amounts deposited 

under subparagraph (A) shall— 

‘‘(i) be available for expenditure by the Secretary concerned, without further appropriation; and 

‘‘(ii) remain available until expended in accordance with title II. 

‘‘(3) ELECTION.— 

‘‘(A) NOTIFICATION.— 

‘‘(i) IN GENERAL.—An eligible county shall notify the Secretary concerned of an election by 

the eligible county under this subsection not 

later than September 30, 2008 (or as soon thereafter as the Secretary concerned determines is 

practicable), and each September 30 thereafter 

for each succeeding fiscal year. 

‘‘(ii) FAILURE TO ELECT.—Except as provided 

in subparagraph (B), if the eligible county fails 

to make an election by the date specified in 

clause (i), the eligible county shall— 

‘‘(I) be considered to have elected to expend 85 

percent of the funds in accordance with paragraph (1)(A); and 

‘‘(II) return the balance to the Treasury of the 

United States. 

‘‘(B) COUNTIES WITH MINOR DISTRIBUTIONS.— 

In the case of each eligible county to which less 

than $100,000 is distributed for any fiscal year 

pursuant to either or both of paragraphs (1)(B) 

and (2)(B) of subsection (a), the eligible county 

may elect to expend all the funds in the same 

manner in which the 25-percent payments or 50- 

percent payments, as applicable, are required to 

be expended. 

‘‘(e) TIME FOR PAYMENT.—The payments required under this section for a fiscal year shall 

be made as soon as practicable after the end of 

that fiscal year. 

‘‘SEC. 103. TRANSITION PAYMENTS TO STATES. 

‘‘(a) DEFINITIONS.—In this section: 

‘‘(1) ADJUSTED AMOUNT.—The term ‘adjusted 

amount’ means, with respect to a covered 

State— 

‘‘(A) for fiscal year 2008, 90 percent of— 

‘‘(i) the sum of the amounts paid for fiscal 

year 2006 under section 102(a)(2) (as in effect on 

September 29, 2006) for the eligible counties in 

the covered State that have elected under section 102(b) to receive a share of the State payment for fiscal year 2008; and 

‘‘(ii) the sum of the amounts paid for fiscal 

year 2006 under section 103(a)(2) (as in effect on 

September 29, 2006) for the eligible counties in 

the State of Oregon that have elected under section 102(b) to receive the county payment for fiscal year 2008; 

‘‘(B) for fiscal year 2009, 81 percent of— 

‘‘(i) the sum of the amounts paid for fiscal 

year 2006 under section 102(a)(2) (as in effect on 

September 29, 2006) for the eligible counties in 

the covered State that have elected under section 102(b) to receive a share of the State payment for fiscal year 2009; and 

‘‘(ii) the sum of the amounts paid for fiscal 

year 2006 under section 103(a)(2) (as in effect on 

September 29, 2006) for the eligible counties in 

the State of Oregon that have elected under section 102(b) to receive the county payment for fiscal year 2009; and 

‘‘(C) for fiscal year 2010, 73 percent of— 

‘‘(i) the sum of the amounts paid for fiscal 

year 2006 under section 102(a)(2) (as in effect on 

September 29, 2006) for the eligible counties in 

the covered State that have elected under section 102(b) to receive a share of the State payment for fiscal year 2010; and 

‘‘(ii) the sum of the amounts paid for fiscal 

year 2006 under section 103(a)(2) (as in effect on 

September 29, 2006) for the eligible counties in 

the State of Oregon that have elected under section 102(b) to receive the county payment for fiscal year 2010. 

‘‘(2) COVERED STATE.—The term ‘covered 

State’ means each of the States of California, 

Louisiana, Oregon, Pennsylvania, South Carolina, South Dakota, Texas, and Washington. 

‘‘(b) TRANSITION PAYMENTS.—For each of fiscal years 2008 through 2010, in lieu of the payment amounts that otherwise would have been 

made under paragraphs (1)(B) and (2)(B) of section 102(a), the Secretary of the Treasury shall 

pay the adjusted amount to each covered State 

and the eligible counties within the covered 

State, as applicable. 

‘‘(c) DISTRIBUTION OF ADJUSTED AMOUNT.— 

Except as provided in subsection (d), it is the intent of Congress that the method of distributing 

the payments under subsection (b) among the 

counties in the covered States for each of fiscal 

years 2008 through 2010 be in the same proportion that the payments were distributed to the 

eligible counties in fiscal year 2006. 

‘‘(d) DISTRIBUTION OF PAYMENTS IN CALIFORNIA.—The following payments shall be distributed among the eligible counties in the State 

of California in the same proportion that payments under section 102(a)(2) (as in effect on 

September 29, 2006) were distributed to the eligible counties for fiscal year 2006: 

‘‘(1) Payments to the State of California under 

subsection (b). 

‘‘(2) The shares of the eligible counties of the 

State payment for California under section 102 

for fiscal year 2011. 

‘‘(e) TREATMENT OF PAYMENTS.—For purposes 

of this Act, any payment made under subsection 

(b) shall be considered to be a payment made 

under section 102(a). 

‘‘TITLE II—SPECIAL PROJECTS ON 

FEDERAL LAND 

‘‘SEC. 201. DEFINITIONS. 

‘‘In this title: 

‘‘(1) PARTICIPATING COUNTY.—The term ‘participating county’ means an eligible county that 

elects under section 102(d) to expend a portion 

of the Federal funds received under section 102 

in accordance with this title. 

‘‘(2) PROJECT FUNDS.—The term ‘project 

funds’ means all funds an eligible county elects 

under section 102(d) to reserve for expenditure 

in accordance with this title. 

‘‘(3) RESOURCE ADVISORY COMMITTEE.—The 

term ‘resource advisory committee’ means— 

‘‘(A) an advisory committee established by the 

Secretary concerned under section 205; or 

‘‘(B) an advisory committee determined by the 

Secretary concerned to meet the requirements of 

section 205. 

‘‘(4) RESOURCE MANAGEMENT PLAN.—The term 

‘resource management plan’ means— 

‘‘(A) a land use plan prepared by the Bureau 

of Land Management for units of the Federal 

land described in section 3(7)(B) pursuant to 

section 202 of the Federal Land Policy and 

Management Act of 1976 (43 U.S.C. 1712); or 

‘‘(B) a land and resource management plan 

prepared by the Forest Service for units of the 

National Forest System pursuant to section 6 of 

the Forest and Rangeland Renewable Resources 

Planning Act of 1974 (16 U.S.C. 1604). 

‘‘SEC. 202. GENERAL LIMITATION ON USE OF 

PROJECT FUNDS. 

‘‘(a) LIMITATION.—Project funds shall be expended solely on projects that meet the requirements of this title. 

‘‘(b) AUTHORIZED USES.—Project funds may be 

used by the Secretary concerned for the purpose 

of entering into and implementing cooperative 

agreements with willing Federal agencies, State 

and local governments, private and nonprofit 

entities, and landowners for protection, restoration, and enhancement of fish and wildlife habitat, and other resource objectives consistent 

with the purposes of this Act on Federal land 

and on non-Federal land where projects would 

benefit the resources on Federal land. 


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‘‘SEC. 203. SUBMISSION OF PROJECT PROPOSALS. 

‘‘(a) SUBMISSION OF PROJECT PROPOSALS TO

SECRETARY CONCERNED.— 

‘‘(1) PROJECTS FUNDED USING PROJECT

FUNDS.—Not later than September 30 for fiscal 

year 2008 (or as soon thereafter as the Secretary 

concerned determines is practicable), and each 

September 30 thereafter for each succeeding fiscal year through fiscal year 2011, each resource 

advisory committee shall submit to the Secretary 

concerned a description of any projects that the 

resource advisory committee proposes the Secretary undertake using any project funds reserved by eligible counties in the area in which 

the resource advisory committee has geographic 

jurisdiction. 

‘‘(2) PROJECTS FUNDED USING OTHER FUNDS.— 

A resource advisory committee may submit to 

the Secretary concerned a description of any 

projects that the committee proposes the Secretary undertake using funds from State or local 

governments, or from the private sector, other 

than project funds and funds appropriated and 

otherwise available to do similar work. 

‘‘(3) JOINT PROJECTS.—Participating counties 

or other persons may propose to pool project 

funds or other funds, described in paragraph 

(2), and jointly propose a project or group of 

projects to a resource advisory committee established under section 205. 

‘‘(b) REQUIRED DESCRIPTION OF PROJECTS.—In 

submitting proposed projects to the Secretary 

concerned under subsection (a), a resource advisory committee shall include in the description 

of each proposed project the following information: 

‘‘(1) The purpose of the project and a description of how the project will meet the purposes of 

this title. 

‘‘(2) The anticipated duration of the project. 

‘‘(3) The anticipated cost of the project. 

‘‘(4) The proposed source of funding for the 

project, whether project funds or other funds. 

‘‘(5)(A) Expected outcomes, including how the 

project will meet or exceed desired ecological 

conditions, maintenance objectives, or stewardship objectives. 

‘‘(B) An estimate of the amount of any timber, 

forage, and other commodities and other economic activity, including jobs generated, if any, 

anticipated as part of the project. 

‘‘(6) A detailed monitoring plan, including 

funding needs and sources, that— 

‘‘(A) tracks and identifies the positive or negative impacts of the project, implementation, 

and provides for validation monitoring; and 

‘‘(B) includes an assessment of the following: 

‘‘(i) Whether or not the project met or exceeded desired ecological conditions; created local 

employment or training opportunities, including 

summer youth jobs programs such as the Youth 

Conservation Corps where appropriate. 

‘‘(ii) Whether the project improved the use of, 

or added value to, any products removed from 

land consistent with the purposes of this title. 

‘‘(7) An assessment that the project is to be in 

the public interest. 

‘‘(c) AUTHORIZED PROJECTS.—Projects proposed under subsection (a) shall be consistent 

with section 2. 

‘‘SEC. 204. EVALUATION AND APPROVAL OF 

PROJECTS BY SECRETARY CONCERNED. 

‘‘(a) CONDITIONS FOR APPROVAL OF PROPOSED

PROJECT.—The Secretary concerned may make a 

decision to approve a project submitted by a resource advisory committee under section 203 

only if the proposed project satisfies each of the 

following conditions: 

‘‘(1) The project complies with all applicable 

Federal laws (including regulations). 

‘‘(2) The project is consistent with the applicable resource management plan and with any 

watershed or subsequent plan developed pursuant to the resource management plan and approved by the Secretary concerned. 

‘‘(3) The project has been approved by the resource advisory committee in accordance with 

section 205, including the procedures issued 

under subsection (e) of that section. 

‘‘(4) A project description has been submitted 

by the resource advisory committee to the Secretary concerned in accordance with section 203. 

‘‘(5) The project will improve the maintenance 

of existing infrastructure, implement stewardship objectives that enhance forest ecosystems, 

and restore and improve land health and water 

quality. 

‘‘(b) ENVIRONMENTAL REVIEWS.— 

‘‘(1) REQUEST FOR PAYMENT BY COUNTY.—The 

Secretary concerned may request the resource 

advisory committee submitting a proposed 

project to agree to the use of project funds to 

pay for any environmental review, consultation, 

or compliance with applicable environmental 

laws required in connection with the project. 

‘‘(2) CONDUCT OF ENVIRONMENTAL REVIEW.—If 

a payment is requested under paragraph (1) and 

the resource advisory committee agrees to the 

expenditure of funds for this purpose, the Secretary concerned shall conduct environmental 

review, consultation, or other compliance responsibilities in accordance with Federal laws 

(including regulations). 

‘‘(3) EFFECT OF REFUSAL TO PAY.— 

‘‘(A) IN GENERAL.—If a resource advisory committee does not agree to the expenditure of 

funds under paragraph (1), the project shall be 

deemed withdrawn from further consideration 

by the Secretary concerned pursuant to this 

title. 

‘‘(B) EFFECT OF WITHDRAWAL.—A withdrawal 

under subparagraph (A) shall be deemed to be a 

rejection of the project for purposes of section 

207(c). 

‘‘(c) DECISIONS OF SECRETARY CONCERNED.— 

‘‘(1) REJECTION OF PROJECTS.— 

‘‘(A) IN GENERAL.—A decision by the Secretary 

concerned to reject a proposed project shall be 

at the sole discretion of the Secretary concerned. 

‘‘(B) NO ADMINISTRATIVE APPEAL OR JUDICIAL

REVIEW.—Notwithstanding any other provision 

of law, a decision by the Secretary concerned to 

reject a proposed project shall not be subject to 

administrative appeal or judicial review. 

‘‘(C) NOTICE OF REJECTION.—Not later than 30 

days after the date on which the Secretary concerned makes the rejection decision, the Secretary concerned shall notify in writing the resource advisory committee that submitted the 

proposed project of the rejection and the reasons 

for rejection. 

‘‘(2) NOTICE OF PROJECT APPROVAL.—The Secretary concerned shall publish in the Federal 

Register notice of each project approved under 

subsection (a) if the notice would be required 

had the project originated with the Secretary. 

‘‘(d) SOURCE AND CONDUCT OF PROJECT.— 

Once the Secretary concerned accepts a project 

for review under section 203, the acceptance 

shall be deemed a Federal action for all purposes. 

‘‘(e) IMPLEMENTATION OF APPROVED

PROJECTS.— 

‘‘(1) COOPERATION.—Notwithstanding chapter 

63 of title 31, United States Code, using project 

funds the Secretary concerned may enter into 

contracts, grants, and cooperative agreements 

with States and local governments, private and 

nonprofit entities, and landowners and other 

persons to assist the Secretary in carrying out 

an approved project. 

‘‘(2) BEST VALUE CONTRACTING.— 

‘‘(A) IN GENERAL.—For any project involving 

a contract authorized by paragraph (1) the Secretary concerned may elect a source for performance of the contract on a best value basis. 

‘‘(B) FACTORS.—The Secretary concerned 

shall determine best value based on such factors 

as— 

‘‘(i) the technical demands and complexity of 

the work to be done; 

‘‘(ii)(I) the ecological objectives of the project; 

and 

‘‘(II) the sensitivity of the resources being 

treated; 

‘‘(iii) the past experience by the contractor 

with the type of work being done, using the type 

of equipment proposed for the project, and meeting or exceeding desired ecological conditions; 

and 

‘‘(iv) the commitment of the contractor to hiring highly qualified workers and local residents. 

‘‘(3) MERCHANTABLE TIMBER CONTRACTING

PILOT PROGRAM.— 

‘‘(A) ESTABLISHMENT.—The Secretary concerned shall establish a pilot program to implement a certain percentage of approved projects 

involving the sale of merchantable timber using 

separate contracts for— 

‘‘(i) the harvesting or collection of merchantable timber; and 

‘‘(ii) the sale of the timber. 

‘‘(B) ANNUAL PERCENTAGES.—Under the pilot 

program, the Secretary concerned shall ensure 

that, on a nationwide basis, not less than the 

following percentage of all approved projects involving the sale of merchantable timber are implemented using separate contracts: 

‘‘(i) For fiscal year 2008, 35 percent. 

‘‘(ii) For fiscal year 2009, 45 percent. 

‘‘(iii) For each of fiscal years 2010 and 2011, 50 

percent. 

‘‘(C) INCLUSION IN PILOT PROGRAM.—The decision whether to use separate contracts to implement a project involving the sale of merchantable timber shall be made by the Secretary concerned after the approval of the project under 

this title. 

‘‘(D) ASSISTANCE.— 

‘‘(i) IN GENERAL.—The Secretary concerned 

may use funds from any appropriated account 

available to the Secretary for the Federal land 

to assist in the administration of projects conducted under the pilot program. 

‘‘(ii) MAXIMUM AMOUNT OF ASSISTANCE.—The 

total amount obligated under this subparagraph 

may not exceed $1,000,000 for any fiscal year 

during which the pilot program is in effect. 

‘‘(E) REVIEW AND REPORT.— 

‘‘(i) INITIAL REPORT.—Not later than September 30, 2010, the Comptroller General shall 

submit to the Committees on Agriculture, Nutrition, and Forestry and Energy and Natural Resources of the Senate and the Committees on Agriculture and Natural Resources of the House of 

Representatives a report assessing the pilot program. 

‘‘(ii) ANNUAL REPORT.—The Secretary concerned shall submit to the Committees on Agriculture, Nutrition, and Forestry and Energy 

and Natural Resources of the Senate and the 

Committees on Agriculture and Natural Resources of the House of Representatives an annual report describing the results of the pilot 

program. 

‘‘(f) REQUIREMENTS FOR PROJECT FUNDS.—The 

Secretary shall ensure that at least 50 percent of 

all project funds be used for projects that are 

primarily dedicated— 

‘‘(1) to road maintenance, decommissioning, or 

obliteration; or 

‘‘(2) to restoration of streams and watersheds. 

‘‘SEC. 205. RESOURCE ADVISORY COMMITTEES. 

‘‘(a) ESTABLISHMENT AND PURPOSE OF RESOURCE ADVISORY COMMITTEES.— 

‘‘(1) ESTABLISHMENT.—The Secretary concerned shall establish and maintain resource advisory committees to perform the duties in subsection (b), except as provided in paragraph (4). 

‘‘(2) PURPOSE.—The purpose of a resource advisory committee shall be— 

‘‘(A) to improve collaborative relationships; 

and 

‘‘(B) to provide advice and recommendations 

to the land management agencies consistent 

with the purposes of this title. 

‘‘(3) ACCESS TO RESOURCE ADVISORY COMMITTEES.—To ensure that each unit of Federal land 

has access to a resource advisory committee, and 

that there is sufficient interest in participation 

on a committee to ensure that membership can 

be balanced in terms of the points of view represented and the functions to be performed, the 


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Secretary concerned may, establish resource advisory committees for part of, or 1 or more, units 

of Federal land. 

‘‘(4) EXISTING ADVISORY COMMITTEES.— 

‘‘(A) IN GENERAL.—An advisory committee 

that meets the requirements of this section, a resource advisory committee established before 

September 29, 2006, or an advisory committee determined by the Secretary concerned before September 29, 2006, to meet the requirements of this 

section may be deemed by the Secretary concerned to be a resource advisory committee for 

the purposes of this title. 

‘‘(B) CHARTER.—A charter for a committee described in subparagraph (A) that was filed on or 

before September 29, 2006, shall be considered to 

be filed for purposes of this Act. 

‘‘(C) BUREAU OF LAND MANAGEMENT ADVISORY

COMMITTEES.—The Secretary of the Interior may 

deem a resource advisory committee meeting the 

requirements of subpart 1784 of part 1780 of title 

43, Code of Federal Regulations, as a resource 

advisory committee for the purposes of this title. 

‘‘(b) DUTIES.—A resource advisory committee 

shall— 

‘‘(1) review projects proposed under this title 

by participating counties and other persons; 

‘‘(2) propose projects and funding to the Secretary concerned under section 203; 

‘‘(3) provide early and continuous coordination with appropriate land management agency 

officials in recommending projects consistent 

with purposes of this Act under this title; 

‘‘(4) provide frequent opportunities for citizens, organizations, tribes, land management 

agencies, and other interested parties to participate openly and meaningfully, beginning at the 

early stages of the project development process 

under this title; 

‘‘(5)(A) monitor projects that have been approved under section 204; and 

‘‘(B) advise the designated Federal official on 

the progress of the monitoring efforts under subparagraph (A); and 

‘‘(6) make recommendations to the Secretary 

concerned for any appropriate changes or adjustments to the projects being monitored by the 

resource advisory committee. 

‘‘(c) APPOINTMENT BY THE SECRETARY.— 

‘‘(1) APPOINTMENT AND TERM.— 

‘‘(A) IN GENERAL.—The Secretary concerned, 

shall appoint the members of resource advisory 

committees for a term of 4 years beginning on 

the date of appointment. 

‘‘(B) REAPPOINTMENT.—The Secretary concerned may reappoint members to subsequent 4- 

year terms. 

‘‘(2) BASIC REQUIREMENTS.—The Secretary 

concerned shall ensure that each resource advisory committee established meets the requirements of subsection (d). 

‘‘(3) INITIAL APPOINTMENT.—Not later than 

180 days after the date of the enactment of this 

Act, the Secretary concerned shall make initial 

appointments to the resource advisory committees. 

‘‘(4) VACANCIES.—The Secretary concerned 

shall make appointments to fill vacancies on 

any resource advisory committee as soon as 

practicable after the vacancy has occurred. 

‘‘(5) COMPENSATION.—Members of the resource 

advisory committees shall not receive any compensation. 

‘‘(d) COMPOSITION OF ADVISORY COMMITTEE.— 

‘‘(1) NUMBER.—Each resource advisory committee shall be comprised of 15 members. 

‘‘(2) COMMUNITY INTERESTS REPRESENTED.— 

Committee members shall be representative of 

the interests of the following 3 categories: 

‘‘(A) 5 persons that— 

‘‘(i) represent organized labor or non-timber 

forest product harvester groups; 

‘‘(ii) represent developed outdoor recreation, 

off highway vehicle users, or commercial recreation activities; 

‘‘(iii) represent— 

‘‘(I) energy and mineral development interests; or 

‘‘(II) commercial or recreational fishing interests; 

‘‘(iv) represent the commercial timber industry; or 

‘‘(v) hold Federal grazing or other land use 

permits, or represent nonindustrial private forest land owners, within the area for which the 

committee is organized. 

‘‘(B) 5 persons that represent— 

‘‘(i) nationally recognized environmental organizations; 

‘‘(ii) regionally or locally recognized environmental organizations; 

‘‘(iii) dispersed recreational activities; 

‘‘(iv) archaeological and historical interests; 

or 

‘‘(v) nationally or regionally recognized wild 

horse and burro interest groups, wildlife or 

hunting organizations, or watershed associations. 

‘‘(C) 5 persons that— 

‘‘(i) hold State elected office (or a designee); 

‘‘(ii) hold county or local elected office; 

‘‘(iii) represent American Indian tribes within 

or adjacent to the area for which the committee 

is organized; 

‘‘(iv) are school officials or teachers; or 

‘‘(v) represent the affected public at large. 

‘‘(3) BALANCED REPRESENTATION.—In appointing committee members from the 3 categories in 

paragraph (2), the Secretary concerned shall 

provide for balanced and broad representation 

from within each category. 

‘‘(4) GEOGRAPHIC DISTRIBUTION.—The members 

of a resource advisory committee shall reside 

within the State in which the committee has jurisdiction and, to extent practicable, the Secretary concerned shall ensure local representation in each category in paragraph (2). 

‘‘(5) CHAIRPERSON.—A majority on each resource advisory committee shall select the chairperson of the committee. 

‘‘(e) APPROVAL PROCEDURES.— 

‘‘(1) IN GENERAL.—Subject to paragraph (3), 

each resource advisory committee shall establish 

procedures for proposing projects to the Secretary concerned under this title. 

‘‘(2) QUORUM.—A quorum must be present to 

constitute an official meeting of the committee. 

‘‘(3) APPROVAL BY MAJORITY OF MEMBERS.—A 

project may be proposed by a resource advisory 

committee to the Secretary concerned under section 203(a), if the project has been approved by 

a majority of members of the committee from 

each of the 3 categories in subsection (d)(2). 

‘‘(f) OTHER COMMITTEE AUTHORITIES AND REQUIREMENTS.— 

‘‘(1) STAFF ASSISTANCE.—A resource advisory 

committee may submit to the Secretary concerned a request for periodic staff assistance 

from Federal employees under the jurisdiction of 

the Secretary. 

‘‘(2) MEETINGS.—All meetings of a resource 

advisory committee shall be announced at least 

1 week in advance in a local newspaper of 

record and shall be open to the public. 

‘‘(3) RECORDS.—A resource advisory committee 

shall maintain records of the meetings of the 

committee and make the records available for 

public inspection. 

‘‘SEC. 206. USE OF PROJECT FUNDS. 

‘‘(a) AGREEMENT REGARDING SCHEDULE AND

COST OF PROJECT.— 

‘‘(1) AGREEMENT BETWEEN PARTIES.—The Secretary concerned may carry out a project submitted by a resource advisory committee under 

section 203(a) using project funds or other funds 

described in section 203(a)(2), if, as soon as 

practicable after the issuance of a decision document for the project and the exhaustion of all 

administrative appeals and judicial review of 

the project decision, the Secretary concerned 

and the resource advisory committee enter into 

an agreement addressing, at a minimum, the following: 

‘‘(A) The schedule for completing the project. 

‘‘(B) The total cost of the project, including 

the level of agency overhead to be assessed 

against the project. 

‘‘(C) For a multiyear project, the estimated 

cost of the project for each of the fiscal years in 

which it will be carried out. 

‘‘(D) The remedies for failure of the Secretary 

concerned to comply with the terms of the agreement consistent with current Federal law. 

‘‘(2) LIMITED USE OF FEDERAL FUNDS.—The 

Secretary concerned may decide, at the sole discretion of the Secretary concerned, to cover the 

costs of a portion of an approved project using 

Federal funds appropriated or otherwise available to the Secretary for the same purposes as 

the project. 

‘‘(b) TRANSFER OF PROJECT FUNDS.— 

‘‘(1) INITIAL TRANSFER REQUIRED.—As soon as 

practicable after the agreement is reached under 

subsection (a) with regard to a project to be 

funded in whole or in part using project funds, 

or other funds described in section 203(a)(2), the 

Secretary concerned shall transfer to the applicable unit of National Forest System land or 

Bureau of Land Management District an 

amount of project funds equal to— 

‘‘(A) in the case of a project to be completed 

in a single fiscal year, the total amount specified in the agreement to be paid using project 

funds, or other funds described in section 

203(a)(2); or 

‘‘(B) in the case of a multiyear project, the 

amount specified in the agreement to be paid 

using project funds, or other funds described in 

section 203(a)(2) for the first fiscal year. 

‘‘(2) CONDITION ON PROJECT COMMENCEMENT.—The unit of National Forest System land 

or Bureau of Land Management District concerned, shall not commence a project until the 

project funds, or other funds described in section 203(a)(2) required to be transferred under 

paragraph (1) for the project, have been made 

available by the Secretary concerned. 

‘‘(3) SUBSEQUENT TRANSFERS FOR MULTIYEAR

PROJECTS.— 

‘‘(A) IN GENERAL.—For the second and subsequent fiscal years of a multiyear project to be 

funded in whole or in part using project funds, 

the unit of National Forest System land or Bureau of Land Management District concerned 

shall use the amount of project funds required 

to continue the project in that fiscal year according to the agreement entered into under 

subsection (a). 

‘‘(B) SUSPENSION OF WORK.—The Secretary 

concerned shall suspend work on the project if 

the project funds required by the agreement in 

the second and subsequent fiscal years are not 

available. 

‘‘SEC. 207. AVAILABILITY OF PROJECT FUNDS. 

‘‘(a) SUBMISSION OF PROPOSED PROJECTS TO

OBLIGATE FUNDS.—By September 30, 2008 (or as 

soon thereafter as the Secretary concerned determines is practicable), and each September 30 

thereafter for each succeeding fiscal year 

through fiscal year 2011, a resource advisory 

committee shall submit to the Secretary concerned pursuant to section 203(a)(1) a sufficient 

number of project proposals that, if approved, 

would result in the obligation of at least the full 

amount of the project funds reserved by the participating county in the preceding fiscal year. 

‘‘(b) USE OR TRANSFER OF UNOBLIGATED

FUNDS.—Subject to section 208, if a resource advisory committee fails to comply with subsection 

(a) for a fiscal year, any project funds reserved 

by the participating county in the preceding fiscal year and remaining unobligated shall be 

available for use as part of the project submissions in the next fiscal year. 

‘‘(c) EFFECT OF REJECTION OF PROJECTS.— 

Subject to section 208, any project funds reserved by a participating county in the preceding fiscal year that are unobligated at the 

end of a fiscal year because the Secretary concerned has rejected one or more proposed 

projects shall be available for use as part of the 

project submissions in the next fiscal year. 

‘‘(d) EFFECT OF COURT ORDERS.— 

‘‘(1) IN GENERAL.—If an approved project 

under this Act is enjoined or prohibited by a 


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Federal court, the Secretary concerned shall return the unobligated project funds related to the 

project to the participating county or counties 

that reserved the funds. 

‘‘(2) EXPENDITURE OF FUNDS.—The returned 

funds shall be available for the county to expend in the same manner as the funds reserved 

by the county under subparagraph (B) or (C)(i) 

of section 102(d)(1). 

‘‘SEC. 208. TERMINATION OF AUTHORITY. 

‘‘(a) IN GENERAL.—The authority to initiate 

projects under this title shall terminate on September 30, 2011. 

‘‘(b) DEPOSITS IN TREASURY.—Any project 

funds not obligated by September 30, 2012, shall 

be deposited in the Treasury of the United 

States. 

‘‘TITLE III—COUNTY FUNDS 

‘‘SEC. 301. DEFINITIONS. 

‘‘In this title: 

‘‘(1) COUNTY FUNDS.—The term ‘county funds’ 

means all funds an eligible county elects under 

section 102(d) to reserve for expenditure in accordance with this title. 

‘‘(2) PARTICIPATING COUNTY.—The term ‘participating county’ means an eligible county that 

elects under section 102(d) to expend a portion 

of the Federal funds received under section 102 

in accordance with this title. 

‘‘SEC. 302. USE. 

‘‘(a) AUTHORIZED USES.—A participating 

county, including any applicable agencies of the 

participating county, shall use county funds, in 

accordance with this title, only— 

‘‘(1) to carry out activities under the Firewise 

Communities program to provide to homeowners 

in fire-sensitive ecosystems education on, and 

assistance with implementing, techniques in 

home siting, home construction, and home landscaping that can increase the protection of people and property from wildfires; 

‘‘(2) to reimburse the participating county for 

search and rescue and other emergency services, 

including firefighting, that are— 

‘‘(A) performed on Federal land after the date 

on which the use was approved under subsection (b); 

‘‘(B) paid for by the participating county; and 

‘‘(3) to develop community wildfire protection 

plans in coordination with the appropriate Secretary concerned. 

‘‘(b) PROPOSALS.—A participating county 

shall use county funds for a use described in 

subsection (a) only after a 45-day public comment period, at the beginning of which the participating county shall— 

‘‘(1) publish in any publications of local 

record a proposal that describes the proposed 

use of the county funds; and 

‘‘(2) submit the proposal to any resource advisory committee established under section 205 for 

the participating county. 

‘‘SEC. 303. CERTIFICATION. 

‘‘(a) IN GENERAL.—Not later than February 1 

of the year after the year in which any county 

funds were expended by a participating county, 

the appropriate official of the participating 

county shall submit to the Secretary concerned 

a certification that the county funds expended 

in the applicable year have been used for the 

uses authorized under section 302(a), including 

a description of the amounts expended and the 

uses for which the amounts were expended. 

‘‘(b) REVIEW.—The Secretary concerned shall 

review the certifications submitted under subsection (a) as the Secretary concerned determines to be appropriate. 

‘‘SEC. 304. TERMINATION OF AUTHORITY. 

‘‘(a) IN GENERAL.—The authority to initiate 

projects under this title terminates on September 

30, 2011. 

‘‘(b) AVAILABILITY.—Any county funds not 

obligated by September 30, 2012, shall be returned to the Treasury of the United States. 

‘‘TITLE IV—MISCELLANEOUS PROVISIONS 

‘‘SEC. 401. REGULATIONS. 

‘‘The Secretary of Agriculture and the Secretary of the Interior shall issue regulations to 

carry out the purposes of this Act. 

‘‘SEC. 402. AUTHORIZATION OF APPROPRIATIONS. 

‘‘There are authorized to be appropriated 

such sums as are necessary to carry out this Act 

for each of fiscal years 2008 through 2011. 

‘‘SEC. 403. TREATMENT OF FUNDS AND REVENUES. 

‘‘(a) RELATION TO OTHER APPROPRIATIONS.— 

Funds made available under section 402 and 

funds made available to a Secretary concerned 

under section 206 shall be in addition to any 

other annual appropriations for the Forest Service and the Bureau of Land Management. 

‘‘(b) DEPOSIT OF REVENUES AND OTHER

FUNDS.—All revenues generated from projects 

pursuant to title II, including any interest accrued from the revenues, shall be deposited in 

the Treasury of the United States.’’. 

(b) FOREST RECEIPT PAYMENTS TO ELIGIBLE

STATES AND COUNTIES.— 

(1) ACT OF MAY 23, 1908.—The sixth paragraph 

under the heading ‘‘FOREST SERVICE’’ in the 

Act of May 23, 1908 (16 U.S.C. 500) is amended 

in the first sentence by striking ‘‘twenty-five 

percentum’’ and all that follows through ‘‘shall 

be paid’’ and inserting the following: ‘‘an 

amount equal to the annual average of 25 percent of all amounts received for the applicable 

fiscal year and each of the preceding 6 fiscal 

years from each national forest shall be paid’’. 

(2) WEEKS LAW.—Section 13 of the Act of 

March 1, 1911 (commonly known as the ‘‘Weeks 

Law’’) (16 U.S.C. 500) is amended in the first 

sentence by striking ‘‘twenty-five percentum’’ 

and all that follows through ‘‘shall be paid’’ 

and inserting the following: ‘‘an amount equal 

to the annual average of 25 percent of all 

amounts received for the applicable fiscal year 

and each of the preceding 6 fiscal years from 

each national forest shall be paid’’. 

(c) PAYMENTS IN LIEU OF TAXES.— 

(1) IN GENERAL.—Section 6906 of title 31, 

United States Code, is amended to read as follows: 

‘‘§ 6906. Funding 

‘‘For each of fiscal years 2008 through 2012— 

‘‘(1) each county or other eligible unit of local 

government shall be entitled to payment under 

this chapter; and 

‘‘(2) sums shall be made available to the Secretary of the Interior for obligation or expenditure in accordance with this chapter.’’. 

(2) CONFORMING AMENDMENT.—The table of 

sections for chapter 69 of title 31, United States 

Code, is amended by striking the item relating to 

section 6906 and inserting the following: 

‘‘6906. Funding.’’. 

(3) BUDGET SCOREKEEPING.— 

(A) IN GENERAL.—Notwithstanding the Budget 

Scorekeeping Guidelines and the accompanying 

list of programs and accounts set forth in the 

joint explanatory statement of the committee of 

conference accompanying Conference Report 

105–217, the section in this title regarding Payments in Lieu of Taxes shall be treated in the 

baseline for purposes of section 257 of the Balanced Budget and Emergency Deficit Control 

Act of 1985 (as in effect prior to September 30, 

2002), and by the Chairmen of the House and 

Senate Budget Committees, as appropriate, for 

purposes of budget enforcement in the House 

and Senate, and under the Congressional Budget Act of 1974 as if Payment in Lieu of Taxes 

(14–1114–0–1–806) were an account designated as 

Appropriated Entitlements and Mandatories for 

Fiscal Year 1997 in the joint explanatory statement of the committee of conference accompanying Conference Report 105–217. 

(B) EFFECTIVE DATE.—This paragraph shall 

remain in effect for the fiscal years to which the 

entitlement in section 6906 of title 31, United 

States Code (as amended by paragraph (1)), applies. 

SEC. 602. TRANSFER TO ABANDONED MINE RECLAMATION FUND. 

Subparagraph (C) of section 402(i)(1) of the 

Surface Mining Control and Reclamation Act of 

1977 (30 U.S.C. 1232(i)(1)) is amended by striking 

‘‘and $9,000,000 on October 1, 2009’’ and inserting ‘‘$9,000,000 on October 1, 2009, and $9,000,000 

on October 1, 2010’’. 

TITLE VII—DISASTER RELIEF 

Subtitle A—Heartland and Hurricane Ike 

Disaster Relief 

SEC. 701. SHORT TITLE. 

This subtitle may be cited as the ‘‘Heartland 

Disaster Tax Relief Act of 2008’’. 

SEC. 702. TEMPORARY TAX RELIEF FOR AREAS 

DAMAGED BY 2008 MIDWESTERN SEVERE STORMS, TORNADOS, AND 

FLOODING. 

(a) IN GENERAL.—Subject to the modifications 

described in this section, the following provisions of or relating to the Internal Revenue 

Code of 1986 shall apply to any Midwestern disaster area in addition to the areas to which 

such provisions otherwise apply: 

(1) GO ZONE BENEFITS.— 

(A) Section 1400N (relating to tax benefits) 

other than subsections (b), (d), (e), (i), (j), (m), 

and (o) thereof. 

(B) Section 1400O (relating to education tax 

benefits). 

(C) Section 1400P (relating to housing tax benefits). 

(D) Section 1400Q (relating to special rules for 

use of retirement funds). 

(E) Section 1400R(a) (relating to employee retention credit for employers). 

(F) Section 1400S (relating to additional tax 

relief) other than subsection (d) thereof. 

(G) Section 1400T (relating to special rules for 

mortgage revenue bonds). 

(2) OTHER BENEFITS INCLUDED IN KATRINA

EMERGENCY TAX RELIEF ACT OF 2005.—Sections 

302, 303, 304, 401, and 405 of the Katrina Emergency Tax Relief Act of 2005. 

(b) MIDWESTERN DISASTER AREA.— 

(1) IN GENERAL.—For purposes of this section 

and for applying the substitutions described in 

subsections (d) and (e), the term ‘‘Midwestern 

disaster area’’ means an area— 

(A) with respect to which a major disaster has 

been declared by the President on or after May 

20, 2008, and before August 1, 2008, under section 401 of the Robert T. Stafford Disaster Relief 

and Emergency Assistance Act by reason of severe storms, tornados, or flooding occurring in 

any of the States of Arkansas, Illinois, Indiana, 

Iowa, Kansas, Michigan, Minnesota, Missouri, 

Nebraska, and Wisconsin, and 

(B) determined by the President to warrant 

individual or individual and public assistance 

from the Federal Government under such Act 

with respect to damages attributable to such severe storms, tornados, or flooding. 

(2) CERTAIN BENEFITS AVAILABLE TO AREAS ELIGIBLE ONLY FOR PUBLIC ASSISTANCE.—For purposes of applying this section to benefits under 

the following provisions, paragraph (1) shall be 

applied without regard to subparagraph (B): 

(A) Sections 1400Q, 1400S(b), and 1400S(d) of 

the Internal Revenue Code of 1986. 

(B) Sections 302, 401, and 405 of the Katrina 

Emergency Tax Relief Act of 2005. 

(c) REFERENCES.— 

(1) AREA.—Any reference in such provisions to 

the Hurricane Katrina disaster area or the Gulf 

Opportunity Zone shall be treated as a reference 

to any Midwestern disaster area and any reference to the Hurricane Katrina disaster area or 

the Gulf Opportunity Zone within a State shall 

be treated as a reference to all Midwestern disaster areas within the State. 

(2) ITEMS ATTRIBUTABLE TO DISASTER.—Any 

reference in such provisions to any loss, damage, or other item attributable to Hurricane 

Katrina shall be treated as a reference to any 

loss, damage, or other item attributable to the 

severe storms, tornados, or flooding giving rise 


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to any Presidential declaration described in subsection (b)(1)(A). 

(3) APPLICABLE DISASTER DATE.—For purposes 

of applying the substitutions described in subsections (d) and (e), the term ‘‘applicable disaster date’’ means, with respect to any Midwestern disaster area, the date on which the severe storms, tornados, or flooding giving rise to 

the Presidential declaration described in subsection (b)(1)(A) occurred. 

(d) MODIFICATIONS TO 1986 CODE.—The following provisions of the Internal Revenue Code 

of 1986 shall be applied with the following modifications: 

(1) TAX-EXEMPT BOND FINANCING.—Section 

1400N(a)— 

(A) by substituting ‘‘qualified Midwestern disaster area bond’’ for ‘‘qualified Gulf Opportunity Zone Bond’’ each place it appears, except 

that in determining whether a bond is a qualified Midwestern disaster area bond— 

(i) paragraph (2)(A)(i) shall be applied by 

only treating costs as qualified project costs if— 

(I) in the case of a project involving a private 

business use (as defined in section 141(b)(6)), either the person using the property suffered a 

loss in a trade or business attributable to the severe storms, tornados, or flooding giving rise to 

any Presidential declaration described in subsection (b)(1)(A) or is a person designated for 

purposes of this section by the Governor of the 

State in which the project is located as a person 

carrying on a trade or business replacing a 

trade or business with respect to which another 

person suffered such a loss, and 

(II) in the case of a project relating to public 

utility property, the project involves repair or 

reconstruction of public utility property damaged by such severe storms, tornados, or flooding, and 

(ii) paragraph (2)(A)(ii) shall be applied by 

treating an issue as a qualified mortgage issue 

only if 95 percent or more of the net proceeds (as 

defined in section 150(a)(3)) of the issue are to 

be used to provide financing for mortgagors who 

suffered damages to their principal residences 

attributable to such severe storms, tornados, or 

flooding. 

(B) by substituting ‘‘any State in which a 

Midwestern disaster area is located’’ for ‘‘the 

State of Alabama, Louisiana, or Mississippi’’ in 

paragraph (2)(B), 

(C) by substituting ‘‘designated for purposes 

of this section (on the basis of providing assistance to areas in the order in which such assistance is most needed)’’ for ‘‘designated for purposes of this section’’ in paragraph (2)(C), 

(D) by substituting ‘‘January 1, 2013’’ for 

‘‘January 1, 2011’’ in paragraph (2)(D), 

(E) in paragraph (3)(A)— 

(i) by substituting ‘‘$1,000’’ for ‘‘$2,500’’, and 

(ii) by substituting ‘‘before the earliest applicable disaster date for Midwestern disaster areas 

within the State’’ for ‘‘before August 28, 2005’’, 

(F) by substituting ‘‘qualified Midwestern disaster area repair or construction’’ for ‘‘qualified 

GO Zone repair or construction’’ each place it 

appears, 

(G) by substituting ‘‘after the date of the enactment of the Heartland Disaster Tax Relief 

Act of 2008 and before January 1, 2013’’ for 

‘‘after the date of the enactment of this paragraph and before January 1, 2011’’ in paragraph 

(7)(C), and 

(H) by disregarding paragraph (8) thereof. 

(2) LOW-INCOME HOUSING CREDIT.—Section 

1400N(c)— 

(A) only with respect to calendar years 2008, 

2009, and 2010, 

(B) by substituting ‘‘Disaster Recovery Assistance housing amount’’ for ‘‘Gulf Opportunity 

housing amount’’ each place it appears, 

(C) in paragraph (1)(B)— 

(i) by substituting ‘‘$8.00’’ for ‘‘$18.00’’, and 

(ii) by substituting ‘‘before the earliest applicable disaster date for Midwestern disaster areas 

within the State’’ for ‘‘before August 28, 2005’’, 

and 

(D) determined without regard to paragraphs 

(2), (3), (4), (5), and (6) thereof. 

(3) EXPENSING FOR CERTAIN DEMOLITION AND

CLEAN-UP COSTS.—Section 1400N(f)— 

(A) by substituting ‘‘qualified Disaster Recovery Assistance clean-up cost’’ for ‘‘qualified 

Gulf Opportunity Zone clean-up cost’’ each 

place it appears, 

(B) by substituting ‘‘beginning on the applicable disaster date and ending on December 31, 

2010’’ for ‘‘beginning on August 28, 2005, and 

ending on December 31, 2007’’ in paragraph (2), 

and 

(C) by treating costs as qualified Disaster Recovery Assistance clean-up costs only if the removal of debris or demolition of any structure 

was necessary due to damage attributable to the 

severe storms, tornados, or flooding giving rise 

to any Presidential declaration described in subsection (b)(1)(A). 

(4) EXTENSION OF EXPENSING FOR ENVIRONMENTAL REMEDIATION COSTS.—Section 

1400N(g)— 

(A) by substituting ‘‘the applicable disaster 

date’’ for ‘‘August 28, 2005’’ each place it appears, 

(B) by substituting ‘‘January 1, 2011’’ for 

‘‘January 1, 2008’’ in paragraph (1), 

(C) by substituting ‘‘December 31, 2010’’ for 

‘‘December 31, 2007’’ in paragraph (1), and 

(D) by treating a site as a qualified contaminated site only if the release (or threat of release) or disposal of a hazardous substance at 

the site was attributable to the severe storms, 

tornados, or flooding giving rise to any Presidential declaration described in subsection 

(b)(1)(A). 

(5) INCREASE IN REHABILITATION CREDIT.—Section 1400N(h), as amended by this Act— 

(A) by substituting ‘‘the applicable disaster 

date’’ for ‘‘August 28, 2005’’, 

(B) by substituting ‘‘December 31, 2011’’ for 

‘‘December 31, 2009’’ in paragraph (1), and 

(C) by only applying such subsection to qualified rehabilitation expenditures with respect to 

any building or structure which was damaged or 

destroyed as a result of the severe storms, tornados, or flooding giving rise to any Presidential declaration described in subsection 

(b)(1)(A). 

(6) TREATMENT OF NET OPERATING LOSSES ATTRIBUTABLE TO DISASTER LOSSES.—Section 

1400N(k)— 

(A) by substituting ‘‘qualified Disaster Recovery Assistance loss’’ for ‘‘qualified Gulf Opportunity Zone loss’’ each place it appears, 

(B) by substituting ‘‘after the day before the 

applicable disaster date, and before January 1, 

2011’’ for ‘‘after August 27, 2005, and before January 1, 2008’’ each place it appears, 

(C) by substituting ‘‘the applicable disaster 

date’’ for ‘‘August 28, 2005’’ in paragraph 

(2)(B)(ii)(I), 

(D) by substituting ‘‘qualified Disaster Recovery Assistance property’’ for ‘‘qualified Gulf Opportunity Zone property’’ in paragraph 

(2)(B)(iv), and 

(E) by substituting ‘‘qualified Disaster Recovery Assistance casualty loss’’ for ‘‘qualified Gulf 

Opportunity Zone casualty loss’’ each place it 

appears. 

(7) CREDIT TO HOLDERS OF TAX CREDIT

BONDS.—Section 1400N(l)— 

(A) by substituting ‘‘Midwestern tax credit 

bond’’ for ‘‘Gulf tax credit bond’’ each place it 

appears, 

(B) by substituting ‘‘any State in which a 

Midwestern disaster area is located or any instrumentality of the State’’ for ‘‘the State of 

Alabama, Louisiana, or Mississippi’’ in paragraph (4)(A)(i), 

(C) by substituting ‘‘after December 31, 2008 

and before January 1, 2010’’ for ‘‘after December 

31, 2005, and before January 1, 2007’’, 

(D) by substituting ‘‘shall not exceed 

$100,000,000 for any State with an aggregate 

population located in all Midwestern disaster 

areas within the State of at least 2,000,000, 

$50,000,000 for any State with an aggregate population located in all Midwestern disaster areas 

within the State of at least 1,000,000 but less 

than 2,000,000, and zero for any other State. The 

population of a State within any area shall be 

determined on the basis of the most recent census estimate of resident population released by 

the Bureau of Census before the earliest applicable disaster date for Midwestern disaster areas 

within the State.’’ for ‘‘shall not exceed’’ and 

all that follows in paragraph (4)(C), and 

(E) by substituting ‘‘the earliest applicable 

disaster date for Midwestern disaster areas 

within the State’’ for ‘‘August 28, 2005’’ in paragraph (5)(A). 

(8) EDUCATION TAX BENEFITS.—Section 1400O, 

by substituting ‘‘2008 or 2009’’ for ‘‘2005 or 

2006’’. 

(9) HOUSING TAX BENEFITS.—Section 1400P, by 

substituting ‘‘the applicable disaster date’’ for 

‘‘August 28, 2005’’ in subsection (c)(1). 

(10) SPECIAL RULES FOR USE OF RETIREMENT

FUNDS.—Section 1400Q— 

(A) by substituting ‘‘qualified Disaster Recovery Assistance distribution’’ for ‘‘qualified hurricane distribution’’ each place it appears, 

(B) by substituting ‘‘on or after the applicable 

disaster date and before January 1, 2010’’ for 

‘‘on or after August 25, 2005, and before January 1, 2007’’ in subsection (a)(4)(A)(i), 

(C) by substituting ‘‘the applicable disaster 

date’’ for ‘‘August 28, 2005’’ in subsections 

(a)(4)(A)(i) and (c)(3)(B), 

(D) by disregarding clauses (ii) and (iii) of 

subsection (a)(4)(A) thereof, 

(E) by substituting ‘‘qualified storm damage 

distribution’’ for ‘‘qualified Katrina distribution’’ each place it appears, 

(F) by substituting ‘‘after the date which is 6 

months before the applicable disaster date and 

before the date which is the day after the applicable disaster date’’ for ‘‘after February 28, 

2005, and before August 29, 2005’’ in subsection 

(b)(2)(B)(ii), 

(G) by substituting ‘‘the Midwestern disaster 

area, but not so purchased or constructed on account of severe storms, tornados, or flooding 

giving rise to the designation of the area as a 

disaster area’’ for ‘‘the Hurricane Katrina disaster area, but not so purchased or constructed 

on account of Hurricane Katrina’’ in subsection 

(b)(2)(B)(iii), 

(H) by substituting ‘‘beginning on the applicable disaster date and ending on the date which 

is 5 months after the date of the enactment of 

the Heartland Disaster Tax Relief Act of 2008’’ 

for ‘‘beginning on August 25, 2005, and ending 

on February 28, 2006’’ in subsection (b)(3)(A), 

(I) by substituting ‘‘qualified storm damage 

individual’’ for ‘‘qualified Hurricane Katrina 

individual’’ each place it appears, 

(J) by substituting ‘‘December 31, 2009’’ for 

‘‘December 31, 2006’’ in subsection (c)(2)(A), 

(K) by disregarding subparagraphs (C) and 

(D) of subsection (c)(3) thereof, 

(L) by substituting ‘‘beginning on the date of 

the enactment of the Heartland Disaster Tax 

Relief Act of 2008 and ending on December 31, 

2009’’ for ‘‘beginning on September 24, 2005, and 

ending on December 31, 2006’’ in subsection 

(c)(4)(A)(i), 

(M) by substituting ‘‘the applicable disaster 

date’’ for ‘‘August 25, 2005’’ in subsection 

(c)(4)(A)(ii), and 

(N) by substituting ‘‘January 1, 2010’’ for 

‘‘January 1, 2007’’ in subsection (d)(2)(A)(ii). 

(11) EMPLOYEE RETENTION CREDIT FOR EMPLOYERS AFFECTED BY SEVERE STORMS, TORNADOS, AND FLOODING.—Section 1400R(a)— 

(A) by substituting ‘‘the applicable disaster 

date’’ for ‘‘August 28, 2005’’ each place it appears, 

(B) by substituting ‘‘January 1, 2009’’ for 

‘‘January 1, 2006’’ both places it appears, and 

(C) only with respect to eligible employers who 

employed an average of not more than 200 employees on business days during the taxable 

year before the applicable disaster date. 


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(12) TEMPORARY SUSPENSION OF LIMITATIONS

ON CHARITABLE CONTRIBUTIONS.—Section 

1400S(a), by substituting the following paragraph for paragraph (4) thereof: 

‘‘(4) QUALIFIED CONTRIBUTIONS.— 

‘‘(A) IN GENERAL.—For purposes of this subsection, the term ‘qualified contribution’ means 

any charitable contribution (as defined in section 170(c)) if— 

‘‘(i) such contribution— 

‘‘(I) is paid during the period beginning on 

the earliest applicable disaster date for all 

States and ending on December 31, 2008, in cash 

to an organization described in section 

170(b)(1)(A), and 

‘‘(II) is made for relief efforts in 1 or more 

Midwestern disaster areas, 

‘‘(ii) the taxpayer obtains from such organization contemporaneous written acknowledgment 

(within the meaning of section 170(f)(8)) that 

such contribution was used (or is to be used) for 

relief efforts in 1 or more Midwestern disaster 

areas, and 

‘‘(iii) the taxpayer has elected the application 

of this subsection with respect to such contribution. 

‘‘(B) EXCEPTION.—Such term shall not include 

a contribution by a donor if the contribution 

is— 

‘‘(i) to an organization described in section 

509(a)(3), or 

‘‘(ii) for establishment of a new, or maintenance of an existing, donor advised fund (as defined in section 4966(d)(2)). 

‘‘(C) APPLICATION OF ELECTION TO PARTNERSHIPS AND S CORPORATIONS.—In the case of a 

partnership or S corporation, the election under 

subparagraph (A)(iii) shall be made separately 

by each partner or shareholder.’’. 

(13) SUSPENSION OF CERTAIN LIMITATIONS ON

PERSONAL CASUALTY LOSSES.—Section 

1400S(b)(1), by substituting ‘‘the applicable disaster date’’ for ‘‘August 25, 2005’’. 

(14) SPECIAL RULE FOR DETERMINING EARNED

INCOME.—Section 1400S(d)— 

(A) by treating an individual as a qualified 

individual if such individual’s principal place of 

abode on the applicable disaster date was located in a Midwestern disaster area, 

(B) by treating the applicable disaster date 

with respect to any such individual as the applicable date for purposes of such subsection, and 

(C) by treating an area as described in paragraph (2)(B)(ii) thereof if the area is a Midwestern disaster area only by reason of subsection (b)(2) of this section (relating to areas eligible only for public assistance). 

(15) ADJUSTMENTS REGARDING TAXPAYER AND

DEPENDENCY STATUS.—Section 1400S(e), by substituting ‘‘2008 or 2009’’ for ‘‘2005 or 2006’’. 

(e) MODIFICATIONS TO KATRINA EMERGENCY

TAX RELIEF ACT OF 2005.—The following provisions of the Katrina Emergency Tax Relief Act 

of 2005 shall be applied with the following modifications: 

(1) ADDITIONAL EXEMPTION FOR HOUSING DISPLACED INDIVIDUAL.—Section 302— 

(A) by substituting ‘‘2008 or 2009’’ for ‘‘2005 or 

2006’’ in subsection (a) thereof, 

(B) by substituting ‘‘Midwestern displaced individual’’ for ‘‘Hurricane Katrina displaced individual’’ each place it appears, and 

(C) by treating an area as a core disaster area 

for purposes of applying subsection (c) thereof if 

the area is a Midwestern disaster area without 

regard to subsection (b)(2) of this section (relating to areas eligible only for public assistance). 

(2) INCREASE IN STANDARD MILEAGE RATE.— 

Section 303, by substituting ‘‘beginning on the 

applicable disaster date and ending on December 31, 2008’’ for ‘‘beginning on August 25, 2005, 

and ending on December 31, 2006’’. 

(3) MILEAGE REIMBURSEMENTS FOR CHARITABLE VOLUNTEERS.—Section 304— 

(A) by substituting ‘‘beginning on the applicable disaster date and ending on December 31, 

2008’’ for ‘‘beginning on August 25, 2005, and 

ending on December 31, 2006’’ in subsection (a), 

and 

(B) by substituting ‘‘the applicable disaster 

date’’ for ‘‘August 25, 2005’’ in subsection (a). 

(4) EXCLUSION OF CERTAIN CANCELLATION OF

INDEBTEDNESS INCOME.—Section 401— 

(A) by treating an individual whose principal 

place of abode on the applicable disaster date 

was in a Midwestern disaster area (determined 

without regard to subsection (b)(2) of this section) as an individual described in subsection 

(b)(1) thereof, and by treating an individual 

whose principal place of abode on the applicable 

disaster date was in a Midwestern disaster area 

solely by reason of subsection (b)(2) of this section as an individual described in subsection 

(b)(2) thereof, 

(B) by substituting ‘‘the applicable disaster 

date’’ for ‘‘August 28, 2005’’ both places it appears, and 

(C) by substituting ‘‘January 1, 2010’’ for 

‘‘January 1, 2007’’ in subsection (e). 

(5) EXTENSION OF REPLACEMENT PERIOD FOR

NONRECOGNITION OF GAIN.—Section 405, by substituting ‘‘on or after the applicable disaster 

date’’ for ‘‘on or after August 25, 2005’’. 

SEC. 703. REPORTING REQUIREMENTS RELATING 

TO DISASTER RELIEF CONTRIBUTIONS. 

(a) IN GENERAL.—Section 6033(b) (relating to 

returns of certain organizations described in 

section 501(c)(3)) is amended by striking ‘‘and’’ 

at the end of paragraph (13), by redesignating 

paragraph (14) as paragraph (15), and by adding after paragraph (13) the following new 

paragraph: 

‘‘(14) such information as the Secretary may 

require with respect to disaster relief activities, 

including the amount and use of qualified contributions to which section 1400S(a) applies, 

and’’. 

(b) EFFECTIVE DATE.—The amendments made 

by this section shall apply to returns the due 

date for which (determined without regard to 

any extension) occurs after December 31, 2008. 

SEC. 704. TEMPORARY TAX-EXEMPT BOND FINANCING AND LOW-INCOME HOUSING TAX RELIEF FOR AREAS DAMAGED BY HURRICANE IKE. 

(a) TAX-EXEMPT BOND FINANCING.—Section 

1400N(a) of the Internal Revenue Code of 1986 

shall apply to any Hurricane Ike disaster area 

in addition to any other area referenced in such 

section, but with the following modifications: 

(1) By substituting ‘‘qualified Hurricane Ike 

disaster area bond’’ for ‘‘qualified Gulf Opportunity Zone Bond’’ each place it appears, except 

that in determining whether a bond is a qualified Hurricane Ike disaster area bond— 

(A) paragraph (2)(A)(i) shall be applied by 

only treating costs as qualified project costs if— 

(i) in the case of a project involving a private 

business use (as defined in section 141(b)(6)), either the person using the property suffered a 

loss in a trade or business attributable to Hurricane Ike or is a person designated for purposes 

of this section by the Governor of the State in 

which the project is located as a person carrying 

on a trade or business replacing a trade or business with respect to which another person suffered such a loss, and 

(ii) in the case of a project relating to public 

utility property, the project involves repair or 

reconstruction of public utility property damaged by Hurricane Ike, and 

(B) paragraph (2)(A)(ii) shall be applied by 

treating an issue as a qualified mortgage issue 

only if 95 percent or more of the net proceeds (as 

defined in section 150(a)(3)) of the issue are to 

be used to provide financing for mortgagors who 

suffered damages to their principal residences 

attributable to Hurricane Ike. 

(2) By substituting ‘‘any State in which any 

Hurricane Ike disaster area is located’’ for ‘‘the 

State of Alabama, Louisiana, or Mississippi’’ in 

paragraph (2)(B). 

(3) By substituting ‘‘designated for purposes 

of this section (on the basis of providing assistance to areas in the order in which such assistance is most needed)’’ for ‘‘designated for purposes of this section’’ in paragraph (2)(C). 

(4) By substituting ‘‘January 1, 2013’’ for 

‘‘January 1, 2011’’ in paragraph (2)(D). 

(5) By substituting the following for subparagraph (A) of paragraph (3): 

‘‘(A) AGGREGATE AMOUNT DESIGNATED.—The 

maximum aggregate face amount of bonds which 

may be designated under this subsection with 

respect to any State shall not exceed the product 

of $2,000 multiplied by the portion of the State 

population which is in— 

‘‘(i) in the case of Texas, the counties of 

Brazoria, Chambers, Galveston, Jefferson, and 

Orange, and 

‘‘(ii) in the case of Louisiana, the parishes of 

Calcasieu and Cameron, 

(as determined on the basis of the most recent 

census estimate of resident population released 

by the Bureau of Census before September 13, 

2008).’’. 

(6) By substituting ‘‘qualified Hurricane Ike 

disaster area repair or construction’’ for ‘‘qualified GO Zone repair or construction’’ each place 

it appears. 

(7) By substituting ‘‘after the date of the enactment of the Heartland Disaster Tax Relief 

Act of 2008 and before January 1, 2013’’ for 

‘‘after the date of the enactment of this paragraph and before January 1, 2011’’ in paragraph 

(7)(C). 

(8) By disregarding paragraph (8) thereof. 

(9) By substituting ‘‘any Hurricane Ike disaster area’’ for ‘‘the Gulf Opportunity Zone’’ 

each place it appears. 

(b) LOW-INCOME HOUSING CREDIT.—Section 

1400N(c) of the Internal Revenue Code of 1986 

shall apply to any Hurricane Ike disaster area 

in addition to any other area referenced in such 

section, but with the following modifications: 

(1) Only with respect to calendar years 2008, 

2009, and 2010. 

(2) By substituting ‘‘any Hurricane Ike disaster area’’ for ‘‘the Gulf Opportunity Zone’’ 

each place it appears. 

(3) By substituting ‘‘Hurricane Ike Recovery 

Assistance housing amount’’ for ‘‘Gulf Opportunity housing amount’’ each place it appears. 

(4) By substituting the following for subparagraph (B) of paragraph (1): 

‘‘(B) HURRICANE IKE HOUSING AMOUNT.—For 

purposes of subparagraph (A), the term ‘Hurricane Ike housing amount’ means, for any calendar year, the amount equal to the product of 

$16.00 multiplied by the portion of the State population which is in— 

‘‘(i) in the case of Texas, the counties of 

Brazoria, Chambers, Galveston, Jefferson, and 

Orange, and 

‘‘(ii) in the case of Louisiana, the parishes of 

Calcasieu and Cameron, 

(as determined on the basis of the most recent 

census estimate of resident population released 

by the Bureau of Census before September 13, 

2008).’’. 

(5) Determined without regard to paragraphs 

(2), (3), (4), (5), and (6) thereof. 

(c) HURRICANE IKE DISASTER AREA.—For purposes of this section and for applying the substitutions described in subsections (a) and (b), the 

term ‘‘Hurricane Ike disaster area’’ means an 

area in the State of Texas or Louisiana— 

(1) with respect to which a major disaster has 

been declared by the President on September 13, 

2008, under section 401 of the Robert T. Stafford 

Disaster Relief and Emergency Assistance Act 

by reason of Hurricane Ike, and 

(2) determined by the President to warrant individual or individual and public assistance 

from the Federal Government under such Act 

with respect to damages attributable to Hurricane Ike. 

Subtitle B—National Disaster Relief 

SEC. 706. LOSSES ATTRIBUTABLE TO FEDERALLY 

DECLARED DISASTERS. 

(a) WAIVER OF ADJUSTED GROSS INCOME LIMITATION.— 

(1) IN GENERAL.—Subsection (h) of section 165 

is amended by redesignating paragraphs (3) and 


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(4) as paragraphs (4) and (5), respectively, and 

by inserting after paragraph (2) the following 

new paragraph: 

‘‘(3) SPECIAL RULE FOR LOSSES IN FEDERALLY

DECLARED DISASTERS.— 

‘‘(A) IN GENERAL.—If an individual has a net 

disaster loss for any taxable year, the amount 

determined under paragraph (2)(A)(ii) shall be 

the sum of— 

‘‘(i) such net disaster loss, and 

‘‘(ii) so much of the excess referred to in the 

matter preceding clause (i) of paragraph (2)(A) 

(reduced by the amount in clause (i) of this subparagraph) as exceeds 10 percent of the adjusted 

gross income of the individual. 

‘‘(B) NET DISASTER LOSS.—For purposes of 

subparagraph (A), the term ‘net disaster loss’ 

means the excess of— 

‘‘(i) the personal casualty losses— 

‘‘(I) attributable to a federally declared disaster occurring before January 1, 2010, and 

‘‘(II) occurring in a disaster area, over 

‘‘(ii) personal casualty gains. 

‘‘(C) FEDERALLY DECLARED DISASTER.—For 

purposes of this paragraph— 

‘‘(i) FEDERALLY DECLARED DISASTER.—The 

term ‘federally declared disaster’ means any disaster subsequently determined by the President 

of the United States to warrant assistance by 

the Federal Government under the Robert T. 

Stafford Disaster Relief and Emergency Assistance Act. 

‘‘(ii) DISASTER AREA.—The term ‘disaster area’ 

means the area so determined to warrant such 

assistance.’’. 

(2) CONFORMING AMENDMENTS.— 

(A) Section 165(h)(4)(B) (as so redesignated) is 

amended by striking ‘‘paragraph (2)’’ and inserting ‘‘paragraphs (2) and (3)’’. 

(B) Section 165(i)(1) is amended by striking 

‘‘loss’’ and all that follows through ‘‘Act’’ and 

inserting ‘‘loss occurring in a disaster area (as 

defined by clause (ii) of subsection (h)(3)(C)) 

and attributable to a federally declared disaster 

(as defined by clause (i) of such subsection)’’. 

(C) Section 165(i)(4) is amended by striking 

‘‘Presidentially declared disaster (as defined by 

section 1033(h)(3))’’ and inserting ‘‘federally declared disaster (as defined by subsection 

(h)(3)(C)(i)’’. 

(D)(i) So much of subsection (h) of section 

1033 as precedes subparagraph (A) of paragraph 

(1) thereof is amended to read as follows: 

‘‘(h) SPECIAL RULES FOR PROPERTY DAMAGED

BY FEDERALLY DECLARED DISASTERS.— 

‘‘(1) PRINCIPAL RESIDENCES.—If the taxpayer’s 

principal residence or any of its contents is located in a disaster area and is compulsorily or 

involuntarily converted as a result of a federally 

declared disaster—’’. 

(ii) Paragraph (2) of section 1033(h) is amended by striking ‘‘investment’’ and all that follows 

through ‘‘disaster’’ and inserting ‘‘investment 

located in a disaster area and compulsorily or 

involuntarily converted as a result of a federally 

declared disaster’’. 

(iii) Paragraph (3) of section 1033(h) is amended to read as follows: 

‘‘(3) FEDERALLY DECLARED DISASTER; DISASTER

AREA.—The terms ‘‘federally declared disaster’’ 

and ‘‘disaster area’’ shall have the respective 

meaning given such terms by section 

165(h)(3)(C).’’. 

(iv) Section 139(c)(2) is amended to read as follows: 

‘‘(2) federally declared disaster (as defined by 

section 165(h)(3)(C)(i)),’’. 

(v) Subclause (II) of section 172(b)(1)(F)(ii) is 

amended by striking ‘‘Presidentially declared 

disasters (as defined in section 1033(h)(3))’’ and 

inserting ‘‘federally declared disasters (as defined by subsection (h)(3)(C)(i))’’. 

(vi) Subclause (III) of section 172(b)(1)(F)(ii) is 

amended by striking ‘‘Presidentially declared 

disasters’’ and inserting ‘‘federally declared disasters’’. 

(vii) Subsection (a) of section 7508A is amended by striking ‘‘Presidentially declared disaster 

(as defined in section 1033(h)(3))’’ and inserting 

‘‘federally declared disaster (as defined by section 165(h)(3)(C)(i))’’. 

(b) INCREASE IN STANDARD DEDUCTION BY DISASTER CASUALTY LOSS.— 

(1) IN GENERAL.—Paragraph (1) of section 

63(c), as amended by the Housing Assistance 

Tax Act of 2008, is amended by striking ‘‘and’’ 

at the end of subparagraph (B), by striking the 

period at the end of subparagraph (C) and inserting ‘‘, and’’, and by adding at the end the 

following new subparagraph: 

‘‘(D) the disaster loss deduction.’’. 

(2) DISASTER LOSS DEDUCTION.—Subsection (c) 

of section 63, as amended by the Housing Assistance Tax Act of 2008, is amended by adding at 

the end the following new paragraph: 

‘‘(8) DISASTER LOSS DEDUCTION.—For the purposes of paragraph (1), the term ‘disaster loss 

deduction’ means the net disaster loss (as defined in section 165(h)(3)(B)).’’. 

(3) ALLOWANCE IN COMPUTING ALTERNATIVE

MINIMUM TAXABLE INCOME.—Subparagraph (E) 

of section 56(b)(1) is amended by adding at the 

end the following new sentence: ‘‘The preceding 

sentence shall not apply to so much of the 

standard deduction as is determined under section 63(c)(1)(D).’’. 

(c) INCREASE IN LIMITATION ON INDIVIDUAL

LOSS PER CASUALTY.—Paragraph (1) of section 

165(h) is amended by striking ‘‘$100’’ and inserting ‘‘$500 ($100 for taxable years beginning after 

December 31, 2009)’’. 

(d) EFFECTIVE DATES.— 

(1) IN GENERAL.—Except as provided by paragraph (2), the amendments made by this section 

shall apply to disasters declared in taxable 

years beginning after December 31, 2007. 

(2) INCREASE IN LIMITATION ON INDIVIDUAL

LOSS PER CASUALTY.—The amendment made by 

subsection (c) shall apply to taxable years beginning after December 31, 2008. 

SEC. 707. EXPENSING OF QUALIFIED DISASTER 

EXPENSES. 

(a) IN GENERAL.—Part VI of subchapter B of 

chapter 1 is amended by inserting after section 

198 the following new section: 

‘‘SEC. 198A. EXPENSING OF QUALIFIED DISASTER 

EXPENSES. 

‘‘(a) IN GENERAL.—A taxpayer may elect to 

treat any qualified disaster expenses which are 

paid or incurred by the taxpayer as an expense 

which is not chargeable to capital account. Any 

expense which is so treated shall be allowed as 

a deduction for the taxable year in which it is 

paid or incurred. 

‘‘(b) QUALIFIED DISASTER EXPENSE.—For purposes of this section, the term ‘qualified disaster 

expense’ means any expenditure— 

‘‘(1) which is paid or incurred in connection 

with a trade or business or with business-related 

property, 

‘‘(2) which is— 

‘‘(A) for the abatement or control of hazardous substances that were released on account of a federally declared disaster occurring 

before January 1, 2010, 

‘‘(B) for the removal of debris from, or the 

demolition of structures on, real property which 

is business-related property damaged or destroyed as a result of a federally declared disaster occurring before such date, or 

‘‘(C) for the repair of business-related property damaged as a result of a federally declared 

disaster occurring before such date, and 

‘‘(3) which is otherwise chargeable to capital 

account. 

‘‘(c) OTHER DEFINITIONS.—For purposes of 

this section— 

‘‘(1) BUSINESS-RELATED PROPERTY.—The term 

‘business-related property’ means property— 

‘‘(A) held by the taxpayer for use in a trade 

or business or for the production of income, or 

‘‘(B) described in section 1221(a)(1) in the 

hands of the taxpayer. 

‘‘(2) FEDERALLY DECLARED DISASTER.—The 

term ‘federally declared disaster’ has the meaning given such term by section 165(h)(3)(C)(i). 

‘‘(d) DEDUCTION RECAPTURED AS ORDINARY

INCOME ON SALE, ETC.—Solely for purposes of 

section 1245, in the case of property to which a 

qualified disaster expense would have been capitalized but for this section— 

‘‘(1) the deduction allowed by this section for 

such expense shall be treated as a deduction for 

depreciation, and 

‘‘(2) such property (if not otherwise section 

1245 property) shall be treated as section 1245 

property solely for purposes of applying section 

1245 to such deduction. 

‘‘(e) COORDINATION WITH OTHER PROVISIONS.—Sections 198, 280B, and 468 shall not 

apply to amounts which are treated as expenses 

under this section. 

‘‘(f) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessary or 

appropriate to carry out the purposes of this 

section.’’. 

(b) CLERICAL AMENDMENT.—The table of sections for part VI of subchapter B of chapter 1 is 

amended by inserting after the item relating to 

section 198 the following new item: 

‘‘Sec. 198A. Expensing of Qualified Disaster Expenses.’’. 

(c) EFFECTIVE DATE.—The amendments made 

by this section shall apply to amounts paid or 

incurred after December 31, 2007 in connection 

with disaster declared after such date. 

SEC. 708. NET OPERATING LOSSES ATTRIBUTABLE TO FEDERALLY DECLARED 

DISASTERS. 

(a) IN GENERAL.—Paragraph (1) of section 

172(b) is amended by adding at the end the following new subparagraph: 

‘‘(J) CERTAIN LOSSES ATTRIBUTABLE FEDERALLY DECLARED DISASTERS.—In the case of a 

taxpayer who has a qualified disaster loss (as 

defined in subsection (j)), such loss shall be a 

net operating loss carryback to each of the 5 

taxable years preceding the taxable year of such 

loss.’’. 

(b) QUALIFIED DISASTER LOSS.—Section 172 is 

amended by redesignating subsections (j) and 

(k) as subsections (k) and (l), respectively, and 

by inserting after subsection (i) the following 

new subsection: 

‘‘(j) RULES RELATING TO QUALIFIED DISASTER

LOSSES.—For purposes of this section— 

‘‘(1) IN GENERAL.—The term ‘qualified disaster 

loss’ means the lesser of— 

‘‘(A) the sum of— 

‘‘(i) the losses allowable under section 165 for 

the taxable year— 

‘‘(I) attributable to a federally declared disaster (as defined in section 165(h)(3)(C)(i)) occurring before January 1, 2010, and 

‘‘(II) occurring in a disaster area (as defined 

in section 165(h)(3)(C)(ii)), and 

‘‘(ii) the deduction for the taxable year for 

qualified disaster expenses which is allowable 

under section 198A(a) or which would be so allowable if not otherwise treated as an expense, 

or 

‘‘(B) the net operating loss for such taxable 

year. 

‘‘(2) COORDINATION WITH SUBSECTION (b)(2).— 

For purposes of applying subsection (b)(2), a 

qualified disaster loss for any taxable year shall 

be treated in a manner similar to the manner in 

which a specified liability loss is treated. 

‘‘(3) ELECTION.—Any taxpayer entitled to a 5- 

year carryback under subsection (b)(1)(J) from 

any loss year may elect to have the carryback 

period with respect to such loss year determined 

without regard to subsection (b)(1)(J). Such 

election shall be made in such manner as may be 

prescribed by the Secretary and shall be made 

by the due date (including extensions of time) 

for filing the taxpayer’s return for the taxable 

year of the net operating loss. Such election, 

once made for any taxable year, shall be irrevocable for such taxable year. 

‘‘(4) EXCLUSION.—The term ‘qualified disaster 

loss’ shall not include any loss with respect to 

any property described in section 1400N(p)(3).’’. 


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H10754 CONGRESSIONAL RECORD — HOUSE October 3, 2008 

(c) LOSS DEDUCTION ALLOWED IN COMPUTING

ALTERNATIVE MINIMUM TAXABLE INCOME.—Subsection (d) of section 56 is amended by adding at 

the end the following new paragraph: 

‘‘(3) NET OPERATING LOSS ATTRIBUTABLE TO

FEDERALLY DECLARED DISASTERS.—In the case of 

a taxpayer which has a qualified disaster loss 

(as defined by section 172(b)(1)(J)) for the taxable year, paragraph (1) shall be applied by increasing the amount determined under subparagraph (A)(ii)(I) thereof by the sum of the 

carrybacks and carryovers of such loss.’’. 

(d) CONFORMING AMENDMENTS.— 

(1) Clause (ii) of section 172(b)(1)(F) is amended by inserting ‘‘or qualified disaster loss (as defined in subsection (j))’’ before the period at the 

end of the last sentence. 

(2) Paragraph (1) of section 172(i) is amended 

by adding at the end the following new flush 

sentence: 

‘‘Such term shall not include any qualified disaster loss (as defined in subsection (j)).’’. 

(e) EFFECTIVE DATE.—The amendments made 

by this section shall apply to losses arising in 

taxable years beginning after December 31, 2007, 

in connection with disasters declared after such 

date. 

SEC. 709. WAIVER OF CERTAIN MORTGAGE REVENUE BOND REQUIREMENTS FOLLOWING FEDERALLY DECLARED DISASTERS. 

(a) IN GENERAL.—Subsection (k) of section 143 

is amended by adding at the end the following 

new paragraph: 

‘‘(12) SPECIAL RULES FOR RESIDENCES DESTROYED IN FEDERALLY DECLARED DISASTERS.— 

‘‘(A) PRINCIPAL RESIDENCE DESTROYED.—At 

the election of the taxpayer, if the principal residence (within the meaning of section 121) of 

such taxpayer is— 

‘‘(i) rendered unsafe for use as a residence by 

reason of a federally declared disaster occurring 

before January 1, 2010, or 

‘‘(ii) demolished or relocated by reason of an 

order of the government of a State or political 

subdivision thereof on account of a federally declared disaster occurring before such date, 

then, for the 2-year period beginning on the 

date of the disaster declaration, subsection 

(d)(1) shall not apply with respect to such taxpayer and subsection (e) shall be applied by 

substituting ‘110’ for ‘90’ in paragraph (1) thereof. 

‘‘(B) PRINCIPAL RESIDENCE DAMAGED.— 

‘‘(i) IN GENERAL.—At the election of the taxpayer, if the principal residence (within the 

meaning of section 121) of such taxpayer was 

damaged as the result of a federally declared 

disaster occurring before January 1, 2010, any 

owner-financing provided in connection with 

the repair or reconstruction of such residence 

shall be treated as a qualified rehabilitation 

loan. 

‘‘(ii) LIMITATION.—The aggregate owner-financing to which clause (i) applies shall not exceed the lesser of— 

‘‘(I) the cost of such repair or reconstruction, 

or 

‘‘(II) $150,000. 

‘‘(C) FEDERALLY DECLARED DISASTER.—For 

purposes of this paragraph, the term ‘federally 

declared disaster’ has the meaning given such 

term by section 165(h)(3)(C)(i). 

‘‘(D) ELECTION; DENIAL OF DOUBLE BENEFIT.— 

‘‘(i) ELECTION.—An election under this paragraph may not be revoked except with the consent of the Secretary. 

‘‘(ii) DENIAL OF DOUBLE BENEFIT.—If a taxpayer elects the application of this paragraph, 

paragraph (11) shall not apply with respect to 

the purchase or financing of any residence by 

such taxpayer.’’. 

(b) EFFECTIVE DATE.—The amendment made 

by subsection (a) shall apply to disasters occurring after December 31, 2007. 

SEC. 710. SPECIAL DEPRECIATION ALLOWANCE 

FOR QUALIFIED DISASTER PROPERTY. 

(a) IN GENERAL.—Section 168, as amended by 

this Act, is amended by adding at the end the 

following new subsection: 

‘‘(n) SPECIAL ALLOWANCE FOR QUALIFIED DISASTER ASSISTANCE PROPERTY.— 

‘‘(1) IN GENERAL.—In the case of any qualified 

disaster assistance property— 

‘‘(A) the depreciation deduction provided by 

section 167(a) for the taxable year in which such 

property is placed in service shall include an allowance equal to 50 percent of the adjusted 

basis of the qualified disaster assistance property, and 

‘‘(B) the adjusted basis of the qualified disaster assistance property shall be reduced by the 

amount of such deduction before computing the 

amount otherwise allowable as a depreciation 

deduction under this chapter for such taxable 

year and any subsequent taxable year. 

‘‘(2) QUALIFIED DISASTER ASSISTANCE PROPERTY.—For purposes of this subsection— 

‘‘(A) IN GENERAL.—The term ‘qualified disaster assistance property’ means any property— 

‘‘(i)(I) which is described in subsection 

(k)(2)(A)(i), or 

‘‘(II) which is nonresidential real property or 

residential rental property, 

‘‘(ii) substantially all of the use of which is— 

‘‘(I) in a disaster area with respect to a federally declared disaster occurring before January 

1, 2010, and 

‘‘(II) in the active conduct of a trade or business by the taxpayer in such disaster area, 

‘‘(iii) which— 

‘‘(I) rehabilitates property damaged, or replaces property destroyed or condemned, as a 

result of such federally declared disaster, except 

that, for purposes of this clause, property shall 

be treated as replacing property destroyed or 

condemned if, as part of an integrated plan, 

such property replaces property which is included in a continuous area which includes real 

property destroyed or condemned, and 

‘‘(II) is similar in nature to, and located in the 

same county as, the property being rehabilitated 

or replaced, 

‘‘(iv) the original use of which in such disaster area commences with an eligible taxpayer 

on or after the applicable disaster date, 

‘‘(v) which is acquired by such eligible taxpayer by purchase (as defined in section 179(d)) 

on or after the applicable disaster date, but only 

if no written binding contract for the acquisition was in effect before such date, and 

‘‘(vi) which is placed in service by such eligible taxpayer on or before the date which is the 

last day of the third calendar year following the 

applicable disaster date (the fourth calendar 

year in the case of nonresidential real property 

and residential rental property). 

‘‘(B) EXCEPTIONS.— 

‘‘(i) OTHER BONUS DEPRECIATION PROPERTY.— 

The term ‘qualified disaster assistance property’ 

shall not include— 

‘‘(I) any property to which subsection (k) (determined without regard to paragraph (4)), (l), 

or (m) applies, 

‘‘(II) any property to which section 1400N(d) 

applies, and 

‘‘(III) any property described in section 

1400N(p)(3). 

‘‘(ii) ALTERNATIVE DEPRECIATION PROPERTY.— 

The term ‘qualified disaster assistance property’ 

shall not include any property to which the alternative depreciation system under subsection 

(g) applies, determined without regard to paragraph (7) of subsection (g) (relating to election 

to have system apply). 

‘‘(iii) TAX-EXEMPT BOND FINANCED PROPERTY.—Such term shall not include any property any portion of which is financed with the 

proceeds of any obligation the interest on which 

is exempt from tax under section 103. 

‘‘(iv) QUALIFIED REVITALIZATION BUILDINGS.— 

Such term shall not include any qualified revitalization building with respect to which the 

taxpayer has elected the application of paragraph (1) or (2) of section 1400I(a). 

‘‘(v) ELECTION OUT.—If a taxpayer makes an 

election under this clause with respect to any 

class of property for any taxable year, this subsection shall not apply to all property in such 

class placed in service during such taxable year. 

‘‘(C) SPECIAL RULES.—For purposes of this 

subsection, rules similar to the rules of subparagraph (E) of subsection (k)(2) shall apply, except that such subparagraph shall be applied— 

‘‘(i) by substituting ‘the applicable disaster 

date’ for ‘December 31, 2007’ each place it appears therein, 

‘‘(ii) without regard to ‘and before January 1, 

2009’ in clause (i) thereof, and 

‘‘(iii) by substituting ‘qualified disaster assistance property’ for ‘qualified property’ in clause 

(iv) thereof. 

‘‘(D) ALLOWANCE AGAINST ALTERNATIVE MINIMUM TAX.—For purposes of this subsection, 

rules similar to the rules of subsection (k)(2)(G) 

shall apply. 

‘‘(3) OTHER DEFINITIONS.—For purposes of this 

subsection— 

‘‘(A) APPLICABLE DISASTER DATE.—The term 

‘applicable disaster date’ means, with respect to 

any federally declared disaster, the date on 

which such federally declared disaster occurs. 

‘‘(B) FEDERALLY DECLARED DISASTER.—The 

term ‘federally declared disaster’ has the meaning given such term under section 

165(h)(3)(C)(i). 

‘‘(C) DISASTER AREA.—The term ‘disaster area’ 

has the meaning given such term under section 

165(h)(3)(C)(ii). 

‘‘(D) ELIGIBLE TAXPAYER.—The term ‘eligible 

taxpayer’ means a taxpayer who has suffered 

an economic loss attributable to a federally declared disaster. 

‘‘(4) RECAPTURE.—For purposes of this subsection, rules similar to the rules under section 

179(d)(10) shall apply with respect to any qualified disaster assistance property which ceases to 

be qualified disaster assistance property.’’. 

(b) EFFECTIVE DATE.—The amendment made 

by this section shall apply to property placed in 

service after December 31, 2007, with respect disasters declared after such date. 

SEC. 711. INCREASED EXPENSING FOR QUALIFIED 

DISASTER ASSISTANCE PROPERTY. 

(a) IN GENERAL.—Section 179 is amended by 

adding at the end the following new subsection: 

‘‘(e) SPECIAL RULES FOR QUALIFIED DISASTER

ASSISTANCE PROPERTY.— 

‘‘(1) IN GENERAL.—For purposes of this section— 

‘‘(A) the dollar amount in effect under subsection (b)(1) for the taxable year shall be increased by the lesser of— 

‘‘(i) $100,000, or 

‘‘(ii) the cost of qualified section 179 disaster 

assistance property placed in service during the 

taxable year, and 

‘‘(B) the dollar amount in effect under subsection (b)(2) for the taxable year shall be increased by the lesser of— 

‘‘(i) $600,000, or 

‘‘(ii) the cost of qualified section 179 disaster 

assistance property placed in service during the 

taxable year. 

‘‘(2) QUALIFIED SECTION 179 DISASTER ASSISTANCE PROPERTY.—For purposes of this subsection, the term ‘qualified section 179 disaster 

assistance property’ means section 179 property 

(as defined in subsection (d)) which is qualified 

disaster assistance property (as defined in section 168(n)(2)). 

‘‘(3) COORDINATION WITH EMPOWERMENT

ZONES AND RENEWAL COMMUNITIES.—For purposes of sections 1397A and 1400J, qualified section 179 disaster assistance property shall not be 

treated as qualified zone property or qualified 

renewal property, unless the taxpayer elects not 

to take such qualified section 179 disaster assistance property into account for purposes of this 

subsection. 


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October 3, 2008 CONGRESSIONAL RECORD — HOUSE H10755 

‘‘(4) RECAPTURE.—For purposes of this subsection, rules similar to the rules under subsection (d)(10) shall apply with respect to any 

qualified section 179 disaster assistance property 

which ceases to be qualified section 179 disaster 

assistance property.’’. 

(b) EFFECTIVE DATE.—The amendment made 

by this section shall apply to property placed in 

service after December 31, 2007, with respect disasters declared after such date. 

SEC. 712. COORDINATION WITH HEARTLAND DISASTER RELIEF. 

The amendments made by this subtitle, other 

than the amendments made by sections 

706(a)(2), 710, and 711, shall not apply to any 

disaster described in section 702(c)(1)(A), or to 

any expenditure or loss resulting from such disaster. 

TITLE VIII—SPENDING REDUCTIONS AND 

APPROPRIATE REVENUE RAISERS FOR 

NEW TAX RELIEF POLICY 

SEC. 801. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN TAX INDIFFERENT PARTIES. 

(a) IN GENERAL.—Subpart B of part II of subchapter E of chapter 1 is amended by inserting 

after section 457 the following new section: 

‘‘SEC. 457A. NONQUALIFIED DEFERRED COMPENSATION FROM CERTAIN TAX INDIFFERENT PARTIES. 

‘‘(a) IN GENERAL.—Any compensation which 

is deferred under a nonqualified deferred compensation plan of a nonqualified entity shall be 

includible in gross income when there is no substantial risk of forfeiture of the rights to such 

compensation. 

‘‘(b) NONQUALIFIED ENTITY.—For purposes of 

this section, the term ‘nonqualified entity’ 

means— 

‘‘(1) any foreign corporation unless substantially all of its income is— 

‘‘(A) effectively connected with the conduct of 

a trade or business in the United States, or 

‘‘(B) subject to a comprehensive foreign income tax, and 

‘‘(2) any partnership unless substantially all 

of its income is allocated to persons other than— 

‘‘(A) foreign persons with respect to whom 

such income is not subject to a comprehensive 

foreign income tax, and 

‘‘(B) organizations which are exempt from tax 

under this title. 

‘‘(c) DETERMINABILITY OF AMOUNTS OF COMPENSATION.— 

‘‘(1) IN GENERAL.—If the amount of any compensation is not determinable at the time that 

such compensation is otherwise includible in 

gross income under subsection (a)— 

‘‘(A) such amount shall be so includible in 

gross income when determinable, and 

‘‘(B) the tax imposed under this chapter for 

the taxable year in which such compensation is 

includible in gross income shall be increased by 

the sum of— 

‘‘(i) the amount of interest determined under 

paragraph (2), and 

‘‘(ii) an amount equal to 20 percent of the 

amount of such compensation. 

‘‘(2) INTEREST.—For purposes of paragraph 

(1)(B)(i), the interest determined under this 

paragraph for any taxable year is the amount of 

interest at the underpayment rate under section 

6621 plus 1 percentage point on the underpayments that would have occurred had the deferred compensation been includible in gross income for the taxable year in which first deferred 

or, if later, the first taxable year in which such 

deferred compensation is not subject to a substantial risk of forfeiture. 

‘‘(d) OTHER DEFINITIONS AND SPECIAL

RULES.—For purposes of this section— 

‘‘(1) SUBSTANTIAL RISK OF FORFEITURE.— 

‘‘(A) IN GENERAL.—The rights of a person to 

compensation shall be treated as subject to a 

substantial risk of forfeiture only if such person’s rights to such compensation are conditioned upon the future performance of substantial services by any individual. 

‘‘(B) EXCEPTION FOR COMPENSATION BASED ON

GAIN RECOGNIZED ON AN INVESTMENT ASSET.— 

‘‘(i) IN GENERAL.—To the extent provided in 

regulations prescribed by the Secretary, if compensation is determined solely by reference to 

the amount of gain recognized on the disposition of an investment asset, such compensation 

shall be treated as subject to a substantial risk 

of forfeiture until the date of such disposition. 

‘‘(ii) INVESTMENT ASSET.—For purposes of 

clause (i), the term ‘investment asset’ means any 

single asset (other than an investment fund or 

similar entity)— 

‘‘(I) acquired directly by an investment fund 

or similar entity, 

‘‘(II) with respect to which such entity does 

not (nor does any person related to such entity) 

participate in the active management of such 

asset (or if such asset is an interest in an entity, 

in the active management of the activities of 

such entity), and 

‘‘(III) substantially all of any gain on the disposition of which (other than such deferred 

compensation) is allocated to investors in such 

entity. 

‘‘(iii) COORDINATION WITH SPECIAL RULE.— 

Paragraph (3)(B) shall not apply to any compensation to which clause (i) applies. 

‘‘(2) COMPREHENSIVE FOREIGN INCOME TAX.— 

The term ‘comprehensive foreign income tax’ 

means, with respect to any foreign person, the 

income tax of a foreign country if— 

‘‘(A) such person is eligible for the benefits of 

a comprehensive income tax treaty between such 

foreign country and the United States, or 

‘‘(B) such person demonstrates to the satisfaction of the Secretary that such foreign country 

has a comprehensive income tax. 

‘‘(3) NONQUALIFIED DEFERRED COMPENSATION

PLAN.— 

‘‘(A) IN GENERAL.—The term ‘nonqualified deferred compensation plan’ has the meaning 

given such term under section 409A(d), except 

that such term shall include any plan that provides a right to compensation based on the appreciation in value of a specified number of equity units of the service recipient. 

‘‘(B) EXCEPTION.—Compensation shall not be 

treated as deferred for purposes of this section if 

the service provider receives payment of such 

compensation not later than 12 months after the 

end of the taxable year of the service recipient 

during which the right to the payment of such 

compensation is no longer subject to a substantial risk of forfeiture. 

‘‘(4) EXCEPTION FOR CERTAIN COMPENSATION

WITH RESPECT TO EFFECTIVELY CONNECTED INCOME.—In the case a foreign corporation with 

income which is taxable under section 882, this 

section shall not apply to compensation which, 

had such compensation had been paid in cash 

on the date that such compensation ceased to be 

subject to a substantial risk of forfeiture, would 

have been deductible by such foreign corporation against such income. 

‘‘(5) APPLICATION OF RULES.—Rules similar to 

the rules of paragraphs (5) and (6) of section 

409A(d) shall apply. 

‘‘(e) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessary or 

appropriate to carry out the purposes of this 

section, including regulations disregarding a 

substantial risk of forfeiture in cases where necessary to carry out the purposes of this section.’’. 

(b) CONFORMING AMENDMENT.—Section 

26(b)(2), as amended by the Housing Assistance 

Tax Act of 2008, is amended by striking ‘‘and’’ 

at the end of subparagraph (V), by striking the 

period at the end of subparagraph (W) and inserting ‘‘, and’’, and by adding at the end the 

following new subparagraph: 

‘‘(X) section 457A(c)(1)(B) (relating to determinability of amounts of compensation).’’. 

(c) CLERICAL AMENDMENT.—The table of sections of subpart B of part II of subchapter E of 

chapter 1 is amended by inserting after the item 

relating to section 457 the following new item: 

‘‘Sec. 457A. Nonqualified deferred compensation 

from certain tax indifferent parties.’’. 

(d) EFFECTIVE DATE.— 

(1) IN GENERAL.—Except as otherwise provided 

in this subsection, the amendments made by this 

section shall apply to amounts deferred which 

are attributable to services performed after December 31, 2008. 

(2) APPLICATION TO EXISTING DEFERRALS.—In 

the case of any amount deferred to which the 

amendments made by this section do not apply 

solely by reason of the fact that the amount is 

attributable to services performed before January 1, 2009, to the extent such amount is not includible in gross income in a taxable year beginning before 2018, such amounts shall be includible in gross income in the later of— 

(A) the last taxable year beginning before 

2018, or 

(B) the taxable year in which there is no substantial risk of forfeiture of the rights to such 

compensation (determined in the same manner 

as determined for purposes of section 457A of the 

Internal Revenue Code of 1986, as added by this 

section). 

(3) ACCELERATED PAYMENTS.—No later than 

120 days after the date of the enactment of this 

Act, the Secretary shall issue guidance providing a limited period of time during which a 

nonqualified deferred compensation arrangement attributable to services performed on or before December 31, 2008, may, without violating 

the requirements of section 409A(a) of the Internal Revenue Code of 1986, be amended to conform the date of distribution to the date the 

amounts are required to be included in income. 

(4) CERTAIN BACK-TO-BACK ARRANGEMENTS.— 

If the taxpayer is also a service recipient and 

maintains one or more nonqualified deferred 

compensation arrangements for its service providers under which any amount is attributable 

to services performed on or before December 31, 

2008, the guidance issued under paragraph (4) 

shall permit such arrangements to be amended 

to conform the dates of distribution under such 

arrangement to the date amounts are required to 

be included in the income of such taxpayer 

under this subsection. 

(5) ACCELERATED PAYMENT NOT TREATED AS

MATERIAL MODIFICATION.—Any amendment to a 

nonqualified deferred compensation arrangement made pursuant to paragraph (4) or (5) 

shall not be treated as a material modification 

of the arrangement for purposes of section 409A 

of the Internal Revenue Code of 1986. 

Amend the title so as to read: ‘‘An Act to 

provide authority for the Federal Government to purchase and insure certain types of 

troubled assets for the purposes of providing 

stability to and preventing disruption in the 

economy and financial system and protecting taxpayers, to amend the Internal 

Revenue Code of 1986 to provide incentives 

for energy production and conservation, to 

extend certain expiring provisions, to provide individual income tax relief, and for 

other purpose’’. 

MOTION OFFERED BY MR. FRANK OF

MASSACHUSETTS

The text of the motion is as follows: 

Mr. Frank of Massachusetts moves that 

the House concur in the Senate amendments. 

The SPEAKER pro tempore. Pursuant to House Resolution 1525, the motion shall be debatable for 90 minutes, 

with 60 minutes equally divided and 

controlled by the chairman and ranking minority member of the Committee 

on Financial Services, and 30 minutes 

equally divided and controlled by the 

chairman and ranking minority member of the Committee on Ways and 

Means. 

The gentleman from Massachusetts 

(Mr. FRANK) and the gentleman from 


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Alabama (Mr. BACHUS) each will control 30 minutes; and the gentleman 

from New York (Mr. RANGEL) and the 

gentleman from Louisiana (Mr. 

MCCRERY) each will control 15 minutes. 

The Chair recognizes the gentleman 

from Massachusetts. 

GENERAL LEAVE

Mr. FRANK of Massachusetts. 

Madam Speaker, I ask unanimous consent that all Members have 5 legislative days within which to revise and 

extend their remarks on this legislation and add extraneous material 

thereon. 

The SPEAKER pro tempore. Is there 

objection to the request of the gentleman from Massachusetts? 

There was no objection. 

The SPEAKER pro tempore. The 

Chair recognizes the gentleman from 

New York. 

Mr. RANGEL. Madam Speaker, today 

is a historic day in the United States 

Congress as the President has called on 

us to meet the challenge of the failure 

of the mortgage market, and our failure to do that would not only cause a 

crisis in the United States but 

throughout the world. 

b 1045 

Seven hundred billion dollars we’ve 

asked to expose the taxpayers to from 

an administration that all I’ve heard in 

the last 8 years is that we have to keep 

government out of the free market, 

that government and regulations would 

strangle our economy. 

And the fact is that in such a short 

period of time, had it not been for BARNEY FRANK and people on the other side 

of the aisle in trying to do the best we 

can, we leave here with a heavy conscience that if we do nothing then the 

sacrifice will be felt by employees, 

their thrift accounts, their savings accounts, and small businesses. 

So, in a sense, we have a political 

gun at our heads that we can’t afford 

to say that we know better, and so 

most of us have agreed that Secretary 

Paulson and economists have given us 

fair warning. 

Now, that’s enough and it’s complicated enough, but then we have had 

the threat of tax bills that expire at 

the end of the year. Companies that 

have relied on tax credits, individuals 

who relied on it, expire. And four times 

we sent energy bills to the other body, 

and four times they’ve ignored it. 

Included in these bills, of course, has 

always been disaster relief, and all of 

us believe these people should get it; 

mental health parity, which God knows 

all of us that have any sensitivity recognize that this inequity has to be 

taken care of; and of course, the alternative minimum tax, that no Member 

in this House or the other body can 

ever explain to taxpayers why this over 

$60 billion burden should fall on their 

shoulders because the Congress didn’t 

think far enough ahead in order to adjust this tax for inflation. 

And so in a sense, Madam Speaker, 

we’re being told that the burden would 

fall on 25 million people by the Senate, 

by our constituents and the country 

and entire world, by the administration if we don’t have this $700 billion 

rescue bill. And I just hope and pray 

that sometime historically we might 

be able to regain the power that we 

used to have in the House, introduce 

bills, have hearings, and fully understand what we’re doing rather than 

having to yield to the threat of disaster, whether it’s fiscal or whether 

it’s tax liability. 

I see JOHN TANNER walking on the 

floor, and I do want to say that he’s an 

outstanding member of our committee. 

He’s been talking about the deficit for 

a long time, and his contribution to 

this package, I’d like to point out, has 

made him a proud member of our committee and the Congress. 

I reserve the balance of my time. 

Mr. MCCRERY. Madam Speaker, I 

yield myself so much time as I may 

consume, and it won’t be much. 

Madam Speaker, a little over 20 years 

ago, I made my first speech on the 

floor of the House of Representatives. 

Today could very well be my last 

speech on the floor of the House. I hope 

it’s not. I hope we come back in a lame 

duck session to consider pending trade 

legislation, but this could be my last 

speech. And I had a real stemwinder 

prepared, Madam Speaker, but unfortunately, we only have 15 minutes of 

time that Ways and Means controls, 

and I have many more speakers than I 

have time. 

So, with the Speaker’s indulgence, I 

will submit my remarks for the 

RECORD. 

Madam Speaker, on May 5, 1988, during 

Floor debate on a defense authorization bill, I 

rose as a freshman Member to address this 

House for the very first time, urging my colleagues to support an amendment in the 

name of fiscal responsibility. My very first 

words on the Floor that day warned of the 

dangers of the growing national debt. Over the 

two decades since, I’ve made scores of 

speeches and cast more than 11,000 votes in 

this historic chamber, representing the hardworking taxpayers of Louisiana to the best of 

my ability. 

While I certainly hope we can return in November to complete action on our unfinished 

trade agenda, Madam Speaker, I rise today 

for what may be my final Floor speech as a 

Member of this body. As someone who has 

spent his entire career fighting for smaller government, freer markets, and greater economic 

liberty for all Americans, it is sadly ironic that 

I speak today in favor of a plan that, on its 

surface, appears to run counter to those principles. 

Indeed, Madam Speaker, this proposal 

seems to undermine the very foundations of 

capitalism, upending the economic incentives 

that drive entrepreneurial risk-taking. In America, we rightly celebrate our freedom to succeed in economic ventures. But in America, 

we’re also supposed to be free to fail in those 

ventures, without expectation of a bailout from 

fellow taxpayers. 

By rushing in with $700 billion in taxpayer 

dollars to address the current crisis, I fear we 

are greatly increasing the moral hazard associated with economic risk-taking. I resent the 

level of government interference in the private 

market we see in this bill, and I hope it does 

not set a precedent that Congress follows in 

the future. 

Despite my grave concerns about this proposal, Madam Speaker, the weight of the evidence says we need to act—not to bail out the 

Wall Street titans, but instead to stabilize the 

credit markets upon which Main Street depends. 

Over recent weeks, I have listened carefully 

to experts on all sides of this issue, to constituents with a variety of strongly-held views, 

and to the voice of the U.S. Senate, which 

passed this emergency plan on Wednesday 

by a 74–25 vote. On balance, I am convinced 

that the Treasury Secretary needs to have appropriate authority to halt our Nation’s slide 

into what could become a profound and extended economic downturn. If that were to 

occur and our financial markets were to collapse, I believe it could open the door to even 

more government interference in the private 

marketplace and to even less economic freedom for all Americans. 

We must not let that happen. The stakes 

are simply too high, and the risks to our economy, and our freedoms, are just too great. 

The circumstances are exigent, Madam 

Speaker, and, in my judgment, we need to act 

now. 

In addition to three tax provisions contained 

in the financial rescue portion of the bill—provisions dealing with the treatment of executive 

compensation, capital losses incurred by 

banks holding preferred stock in Fannie Mae 

and Freddie Mac, and the tax exclusion for 

forgiven debt on home mortgages—the bill before us also includes the Senate’s comprehensive tax extenders package. This is a positive 

development, Madam Speaker, because the 

Senate’s tax package provides more than 

$107 billion in net tax relief to U.S. families 

and businesses. 

With enactment of this bill, we will finally resolve the tax dispute that has divided Republicans and Democrats for the entirety of the 

110th Congress, delaying action on the AMT 

patch and other tax extenders, including a variety of energy-related tax incentives. 

Over the past 2 years, Republicans have insisted that we should not have to raise taxes 

to prevent the tax increases that would result 

from the scheduled expiration of existing tax 

law. Democrats, meanwhile, have insisted that 

the House’s paygo rules require us to find offsets for extensions of expired or expiring tax 

law. 

This comprehensive package—previously 

approved as a free-standing bill by the other 

body by an overwhelming vote of 93 to 2— 

represents a bipartisan compromise, much like 

the financial rescue plan to which it has been 

attached. It contains extenders provisions that 

are not fully offset—as many Democrats would 

prefer—but contains more offsets than many 

Republicans would like, including some on domestic oil and gas producers that I find particularly troubling. 

It is certainly not a perfect package, Madam 

Speaker, but with adjournment looming, it is 

the only package that can pass both chambers and actually be enacted into law. 

Specifically, this package will protect millions of middle-class taxpayers from falling victim to the AMT in 2008. It provides more than 

$48 billion in tax relief by extending through 


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2009 various expired and expiring provisions 

affecting U.S. families and businesses. And it 

contains an $18 billion package of energy-related tax incentives, including the creation of a 

new tax credit for plug-in electric vehicles. 

The package also contains a set of disasterrelated tax relief provisions, including both nationwide tax relief and targeted tax relief for 

the victims of this summer’s Midwestern 

storms and for victims of Hurricane Ike in Louisiana and Texas. Finally, the Senate’s comprehensive tax package contains several nontax provisions of significant interest to many 

Members on both sides of the aisle, including 

mental health parity and a reauthorization of 

the Secure Rural Schools program. 

All in all, this is a good, bipartisan package 

of tax proposals, Madam Speaker, and I think 

its inclusion improves the overall financial rescue package before us by providing important 

tax relief to our nation’s families and businesses at a critical time for our economy. 

So today, I will cast my vote for this economic stabilization plan, sobered by the reality 

that our failure to act could have unprecedented, catastrophic consequences for our 

country and the economic freedoms for which 

I’ve long fought as a Member of this great institution. 

I yield 3 minutes to the distinguished 

minority whip, Mr. BLUNT of Missouri. 

Mr. BLUNT. I thank the gentleman 

for yielding, Madam Speaker. 

I’m glad we’re here at this work 

today. I do think that the bill has improved and the situation has clarified 

from Monday. We need to come together. We need to get this work done. 

It’s incredibly important. It seems to 

me that two significant things have 

happened: one, the changes in the bill 

that others will talk about and I will 

talk about a little bit; and two, the 

changes at the Securities and Exchange Commission and the Accounting Standards Board that have set 

forth a new way to evaluate these assets that are causing so much trouble 

in the marketplace. 

Now, where I live, nobody talks 

about illiquid assets. They talk about 

mortgages. They talk about how to pay 

the bills. They talk about whether they 

can borrow money or not, and at the 

end of the day, Madam Speaker, that’s 

what this bill is about. 

It’s not about Wall Street. It’s about 

Main Street. It’s not a bailout. It’s a 

situation where American taxpayers 

are going to invest money in a way 

that ensures they have a return. I 

think with the work we’ve done here, 

we’ve not only ensured that they’re 

likely is never likely to be a question 

of return, but beyond that, if at the end 

of 5 years taxpayers would appear have 

lost any money, the President will propose and Congress will act on a set of 

recommendations that go back to the 

agencies that participated and say 

we’re going to recover whatever was 

lost. 

This is a chance where American taxpayers are investing in their own future. This is an opportunity where people are helping stabilize a market. We 

saw a bank purchase this week where it 

looked like the government would have 

to be part of the purchase, but after 

the government came in and said here’s 

how we’re going to work to stabilize 

the situation, suddenly there’s a market and suddenly that purchase is 

much different than it would have been 

without government participation. 

This bill allows that kind of stabilization. This bill protects taxpayers. 

This bill has every known oversight 

mechanism ever conceived of by government in it now. None of those were 

asked for initially by the administration but they’re all there now, a special 

Inspector General, a board that sets 

policy, a congressional oversight 

group, GAO with special authority, ultimate transparency. 

This is a bill the taxpayers can look 

at and say this is well beyond the proposal that came to the Congress. It has 

a transparency. It has the oversight. It 

has the guarantees that taxpayers 

should ask for, but it also has lots of 

options, options that weren’t in the 

original proposal, not just to loan 

money, not just to purchase mortgages 

and other securities, but to set up an 

insurance plan so if that’s one of the 

things that would make more sense in 

certain areas it can be used. 

It’s a critical moment. 

The SPEAKER pro tempore. The 

time of the gentleman has expired. 

Mr. MCCRERY. I yield the gentleman 

an additional 30 seconds. 

Mr. BLUNT. I’d like to put in the 

RECORD, Madam Speaker, a letter I received from the Secretary of the Treasury talking about the rules and regulations that they will pursue that will 

assure that eligible financial institutions must be established and regulated to have significant operations in 

the United States. It’s not talking 

about foreign banks. Also requiring 

that—in the letter that they will set up 

rules and regulations so that people 

participating in this program won’t 

benefit from this program. 

DEPARTMENT OF THE TREASURY, 

Washington, DC, October 2, 2008. 

Hon. ROY BLUNT, 

House of Representatives, 

Washington, DC. 

DEAR MR. BLUNT: I am writing regarding 

the Emergency Economic Stabilization Act 

of 2008. 

The Act requires that eligible financial institutions must be established and regulated 

and have significant operations in the United 

States. Furthermore, it is the intention of 

the Department of the Treasury that all 

mortgages or mortgage-related assets purchased in the Troubled Asset Relief Program 

will be based on or related to properties in 

the United States. 

The Act requires the Department of the 

Treasury to prevent unjust enrichment of financial institutions selling troubled assets 

into the Troubled Asset Relief Program, including preventing the sale of a troubled 

asset to the Treasury at a higher price than 

what the seller paid to purchase the asset. 

The Act specifies a single exemption for 

troubled assets acquired in a merger or acquisition or a purchase of assets from a financial institution that is established and 

regulated in the United States and that is in 

conservatorship, receivership or bankruptcy. 

The Department of the Treasury believes 

this exemption is important to encouraging 

healthy institutions to pursue acquisitions 

of struggling institutions. Such acquisitions 

help to protect depositors, taxpayers and the 

financial system. 

The Department of the Treasury will issue 

regulations or guidelines necessary to address and manage or to prohibit conflicts of 

interest that may arise in connection with 

the administration and execution of the authorities provided under the Act as soon as 

practicable after the date of enactment. 

Sincerely, 

HENRY M. PAULSON, Jr. 

Mr. RANGEL. Madam Speaker, I ask 

unanimous consent that I be allowed to 

say farewell to my friend JIM MCCRERY

without having it attributed to the allotted time. 

The SPEAKER pro tempore. Is there 

objection to the request of the gentleman from New York? 

There was no objection. 

Mr. RANGEL. I had no idea that we 

would be coming back here and I would 

have this opportunity, but for some of 

us being Members of Congress, and especially members of the Ways and 

Means Committee, it has been a special 

privilege. 

This historic committee, however, 

has had its ups and downs with partisanship, the likes of which we had 

not seen on the committee or in the 

House of Representatives. 

I hardly knew JIM MCCRERY during 

the years he was on the committee because the other side was dominated by 

one personality, but as soon as things 

changed and I had the opportunity to 

meet and talk with him as the ranking 

member, I not only found a scholar and 

a gentleman, but I found someone who 

loved his country and Congress more 

than he loved the partisanship. 

It wasn’t as though we have been able 

to resolve many of the crises that exist 

in our committee, but the one thing 

that he did do, and it will continue 

after he leaves us, is to create a climate where we had a degree of respect 

for each other and especially when we 

needed that respect, when we disagree 

and our parties disagree. 

His legacy, even though he leaves, 

will continue to know that in this 

House no matter how frank we are politically, we still can be civil. We still 

can get things done, and even when 

we’re not successful, we can work in 

such a manner that other people following us would know that we can disagree without being disagreeable. 

So, JIM, I speak for all of the Democrats on the committee, for the tone, 

for your congeniality, for your humor, 

for the wisdom that you contributed, 

and I know that it’s been awkward for 

your party and mine at times to do the 

things that we wanted to do. We started off dealing with the Secretary 

Treasurer and we promised him we’d do 

the world. Unfortunately, we didn’t 

check with our leadership on a lot of 

things that we thought we could do. 

But we will continue to do that, and 

I do hope that the lessons that you 

taught so many of us will continue 

long after you’re gone. 


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Madam Speaker, at this time, I yield 

1 minute to the distinguished chairman 

of the Health Subcommittee, who’s 

worked hard on the overall bill before 

us today, Chairman PETE STARK from 

California. 

Mr. STARK. Thank you, Mr. Chairman, and unfortunately, I have to urge 

my colleagues to vote ‘‘no’’ on this bill. 

Somebody in the press not so long 

ago earlier this week said eight out of 

10 of my colleagues know nothing 

about economics or banking, and this 

bill shows that he was quite right. 

This bill does nothing but bail out 

Wall Street and large corporate America. It spends $800 billion that the taxpayers will end up having to pay for, 

and it does nothing for middle Americans. 

Is there a crisis in this country? Yes, 

there is, but there is not a crisis for 

those people who have been working, 

trying to pay their bills. There’s not a 

crisis for your average community 

bank who has no problem with liquidity. There is not a crisis for your credit 

cards being unable to work. 

That’s Paulson’s way to scare us, as 

Colin Powell tried to scare us some 

years ago by saying if we didn’t vote 

for an ill-conceived war we’d see terrorists on the streets. 

We’re getting the same kind of misinformation now, the same kind of rush 

to judgment to tell you that a crisis 

will occur. It won’t. Vote ‘‘no.’’ Come 

back and help work on a bill that will 

help all Americans. 

Mr. MCCRERY. Madam Speaker, I 

want to first say how much I appreciate the very kind words of the gentleman from New York and appreciate 

very much the opportunity to have 

worked with him over the last couple 

of years. He has been more than gracious to me and to all the members of 

the committee, and so his words were 

heartfelt, and I very much appreciate 

them. 

With that, I yield 21⁄2 minutes to the 

gentleman from North Carolina (Mr. 

COBLE). 

Mr. COBLE. I thank my friend from 

Louisiana for yielding. 

Last week, I voted ‘‘no’’ on this bill 

for two reasons. Number one, I don’t 

like to hurriedly vote on significant 

legislation. I’d rather do it thoroughly 

and deliberately. 

The second reason, my telephone 

calls and e-mails were overwhelming in 

opposition against the bill. On Monday 

I voted ‘‘no.’’ 

The telephone calls and e-mails continued to be overwhelming, but guess 

what: Then in favor of the bill. Now 

I’m not exclusively dictated by telephone calls and e-mails, but neither do 

I dismiss them, Madam Speaker. 

b 1100 

And I weighed this very carefully. 

And by having waited, I think we did 

improve the bill. 

The increase of the FDIC threshold 

to $250,000, a good move; the AMT 

patch that will affect favorably 21 million middle class families, a good 

move; SEC, I am told, Madam Speaker, 

is addressing or has addressed the 

mark-to-market issue, a good approach. Compelling arguments can be 

proffered on both sides of this issue, 

but I believe, Madam Speaker, that inaction is not an option. 

I don’t believe the sky is falling. I 

was told that earlier and I refuted it. 

And I think when I disagree with the 

sky falling charge, that’s not irregular 

for me to refute it. 

Now, this vote for me, I am voting 

‘‘aye’’ today, and it may be politically 

damaging. And the sky may fall tomorrow, but it will fall upon my head; it 

won’t fall upon anyone else’s, and no 

one else will be adversely affected. 

I believe that the limited access to 

credit—and in many instances no access to credit—can certainly contribute 

to a crisis. And we can put on blinders 

and go one way or the other, but I 

think this is a bill that must be addressed today, it must be addressed in 

a positive way, both sides of the aisle. 

My friends to the left, my friends on 

this side have done a good job, I think, 

in crafting it, and I am pleased to announce that I am voting ‘‘aye’’ when 

the vote is called later. 

I thank the gentleman for having 

yielded to me. 

Mr. RANGEL. Madam Speaker, I 

yield 1 minute to Mr. NEAL, an outstanding member of the Ways and 

Means Committee who has done a great 

job for all of us. 

Mr. NEAL of Massachusetts. First, 

let me thank Congressman FRANK; he 

did a good job under very difficult circumstances, as did Mr. RANGEL with 

the tax extenders that are part of this 

bill. 

This is imperfect legislation, like 

much legislation that comes to the 

floor of this House, but we need to pass 

it today. 

The national principle here is at 

stake. If there’s a hurricane in Louisiana, we all come to the aid of the 

American family. If there’s a forest fire 

in California, we all come to the aid of 

the American family. If there’s a blizzard in New England, we all come to 

the aid of the American family. And 

that’s precisely what this legislation 

does today. 

Next week, when people are having 

difficulty getting a car loan, trying to 

refinance their mortgage or looking at 

their 401(k) plan, we acknowledge that 

they are all members of the American 

family, and we attempt today to come 

to their aid. 

There is relief here for alternative 

minimum tax victims; 25 million people will benefit. Twelve thousand businesses are waiting for incentives for 

the R&D credit. Four million families 

and three million teachers are waiting 

for their deductions for education expenses. Thirteen million children in 

low-income families can finally claim 

the child tax credit. 

This is a piece of legislation that 

helps the American family. 

Mr. MCCRERY. Madam Speaker, it’s 

a pleasure to yield 2 minutes to the distinguished gentleman from Michigan, 

the ranking member on the Health 

Subcommittee of the Ways and Means 

Committee, Mr. CAMP. 

Mr. CAMP of Michigan. Madam 

Speaker, I also want to commend the 

gentleman from Louisiana for his leadership, for his thoughtful approach to 

issues, for his service to the Ways and 

Means Committee and to the Congress, 

and especially for his friendship. 

I rise in support of the Senate 

amendment to H.R. 1424. Is this better 

than the original Paulson proposal? 

Yes. Is this bill perfect? Hardly. And 

this bill is better, especially for taxpayers. 

The bill resolves the remaining tax 

items before the Congress. After 

months of delay, the House will finally 

do what Republicans called for back in 

June, pass an AMT patch without increasing taxes. Without the patch, 

more than 25 million American families would pay an additional $62 billion 

in taxes. We must provide this relief 

sooner rather than later, and I’m 

pleased this will finally be done without raising taxes. 

By passing this bill today, Congress 

will extend for 2 years the wide array 

of important tax credits and deductions so many families and employers 

rely on. We are reaffirming to the auto 

industry and consumers that incentives for the purchase of alternative 

fuel vehicles will remain law. This is 

something I have pushed for hard in 

the House. And this new plug-in credit, 

like the hybrid credit that I offered in 

2005, will spur consumer demand for alternative vehicles and lessen our dependence on foreign oil. 

With this bill, we are providing certainty to businesses that are investing 

heavily in research and development. 

The Senate amendment extends the 

R&D credit through 2009 and increases 

the alternative simplified credit. This 

is a step in the right direction. We 

must make the credit permanent to attract high-tech businesses and compete 

in today’s global economy and to keep 

jobs here in America. Myself and Mr. 

LEVIN, my colleague from Michigan, 

have championed legislation to do just 

that, and I look forward to making this 

goal a reality in the next Congress. 

Madam Speaker, I urge my colleagues, Republican and Democrat, to 

support this legislation so that Congress can provide stability to our financial system and give American 

workers and businesses the tax relief 

they so desperately need and deserve. 

Mr. RANGEL. Madam Speaker, there 

is no one in this House that cares more 

about the tax burden that we’re putting on the next generation and the 

children that follow than the gentleman from Tennessee (Mr. TANNER). 

He has made a great contribution in 

improving this bill, and he continues to 

be a watchdog of the deficit that this 

administration has taken us in. 

I yield 2 minutes to the gentleman. 


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(Mr. TANNER asked and was given 

permission to revise and extend his remarks.) 

Mr. TANNER. Mr. Chairman, I, too, 

want to join you in thanking Mr. 

MCCRERY for his work here. I have enjoyed working with you very much, 

JIM. 

I want to speak about section 134 of 

the bill. But before I do, I’ve just got to 

say that some of us in this body are so 

thoroughly disgusted with the other 

body right now in the way this bill has 

been handled. We’ve found that it 

doesn’t take a lot of political courage 

to spend somebody else’s money that 

can’t vote. And we had, from our committee, the extender package paid for 

or offset by people who didn’t object to 

the offsets. And because of the Senate 

rules—or the other body’s rules and the 

ability for some over there to object to 

a unanimous consent request—they 

sent it back over here on top of a mustpass bill that is unpaid for and one of 

the reasons we’re in the shape we’re in 

right now. And so I just had to express 

utter disgust and frustration with the 

way that it was handled in the other 

body. 

Now, as it comes to the bill, when the 

Secretary came over here with the bill, 

it was a bailout; it was public risk and 

private gain. By the wisdom of the 

body here, we put section 134 of the 

recoupment clause in which now makes 

it private risk and public gain, which is 

the way it ought to be. It is now a situation where we’re not talking about 

bailing out Wall Street or the high flyers. If, at the end of the day, there is a 

shortfall in the Treasury of the United 

States, then they will be assessed that 

shortfall and the Treasury will be made 

whole by section 134 of the recoupment 

clause. 

What the bill does now is it attempts 

to protect all Americans who have an 

IRA, a 401(k), or part of a State or local 

government pension plan. That’s why 

I’m going to vote ‘‘yes’’ even though I 

am so thoroughly disgusted with what 

the Senate put on it. 

Mr. MCCRERY. Madam Speaker, may 

I inquire as to the remaining time on 

each side. 

The SPEAKER pro tempore. The gentleman from Louisiana has 61⁄2 minutes 

remaining; the gentleman from New 

York has 7 minutes remaining. 

Mr. MCCRERY. Madam Speaker, I 

yield 2 minutes to the distinguished 

gentleman from California, a member 

of the Ways and Means Committee, Mr. 

NUNES. 

Mr. NUNES. Madam Speaker, our 

economy has slowed to a crawl and 

American workers are worried about 

their jobs. These conditions are clear 

arguments for action by our government, and action should be taken. 

The question each of us needs to ask 

ourselves is whether or not the Paulson 

plan is the best course of action. In my 

view, it’s not. I made no secret of my 

frustration and disapproval for the 

sense of panic instilled upon the public 

by Wall Street insiders and some of our 

Nation’s elected leaders. 

Madam Speaker, this is not a time 

for panic; it’s a time for leadership and 

it’s a time for deliberation. Congress 

must not be confined to a timetable 

dictated by alarmists who see the government money as their only backstop 

again, irresponsible lending. Investors 

take risks, sometimes the risks they 

take are reckless. Taxpayers must not 

be liable for Wall Street risk-taking. 

Madam Speaker, the American people do not accept the allegation that 

we have only two alternatives before 

us: passage of this bill or another Great 

Depression. There are other options if 

congressional leaders had the courage 

to allow this democracy to function. 

We could debate these issues. 

We need to make certain that our 

Nation’s lending institutions are the 

strongest in the world and that our 

constituents have confidence that they 

have a safe place to put their money. 

One way to accomplish this is to let 

the Fed purchase preferred shares with 

warrants. This would infuse capital 

into the market, freeing up banks to 

make loans and extend credit. 

The plan that I and others have proposed to this Congress is in sharp contrast to the Paulson plan and offers 

real protection to the taxpayer. Why 

do we need to give $700 billion to one 

man to play hedge fund god from the 

gilded offices of the United States 

Treasury? If the Secretary wants to 

run a hedge fund, he should go back to 

Wall Street. 

This Congress must not hand over 

such an enormous amount of money; it 

is simply wrong. It’s irresponsible. Listen to all the pundits, all the financial 

wizards, the holier-than-thou capitalists from our Nation’s leading institutions; they sound like they belong to 

the Soviet Politburo. When the markets are riding high, they want us to 

leave them alone. When the market 

crashed, they want to us nationalize 

their debt. 

Madam Speaker, I urge my colleagues to vote ‘‘no.’’ However, if this 

bill passes, it is my hope that the administration will focus first on shoring 

up our Nation’s lending institutions. 

Mr. RANGEL. At this time, I yield 1 

minute to Mr. BLUMENAUER of Oregon, 

one of the outstanding members of our 

committee, the Ways and Means Committee. 

Mr. BLUMENAUER. I appreciate the 

gentleman’s courtesy and his leadership. And thanks to the leadership of 

Mr. FRANK, Speaker PELOSI and the 

House Republicans, we have part of 

this bill before us today that is somewhat better, but it sadly adds $150 billion of largely unpaid for tax breaks, 

frustrating for me because many of 

these provisions like alternative energy too credits and secure rural 

schools are provisions I fought for for 

years and are very important. 

Madam Speaker, as members of the 

public and Congress learn more about 

these problems and the solutions, I 

must say I have never seen more diametrically opposed opinions, and even 

people explaining about the facts in 

their business. But if this bill passes, 

which it appears that it will today, it 

ignores the underlying problem of a 

housing market in free-fall, and it ignores the plight of six million homeowners who are facing foreclosure in 

the next 2 years. 

If there was ever a time to give the 

same bankruptcy protection to American homeowners that Donald Trump 

will get the next time he takes bankruptcy for his casinos and for his 

fourth vacation home, that time is 

now. It needs to be in this legislation, 

and I’m sadly disappointed that it is 

not. In makes long term recovery harder and more painful. 

Mr. MCCRERY. I yield 2 minutes to 

the gentleman from Tennessee, a distinguished Member of this House, Mr. 

WAMP. 

Mr. WAMP. Madam Speaker, nobody 

in east Tennessee hates the fact more 

than me that I’m going to vote ‘‘yes’’ 

today after voting ‘‘no’’ on Monday. 

Monday, I cast a blue collar vote for 

the American people, shook the foundations of Wall Street, demanding 

more accountability. But today, I’m 

going to cast a red, white and blue collar vote with my hand over my heart 

for this country because things are 

really bad and we don’t have any 

choice. We’re out of choices, our backs 

are up against the wall. 

All week we fought for some improvements. And the increase in the 

FDIC limits from $100,000 to $250,000 is 

an improvement. The mark-to-market 

changes which will allow these mortgage-backed securities to move and 

free up liquidity will help a lot because 

small business people can’t meet their 

payroll. This month, many of them in 

east Tennessee are not going to be able 

to meet their payroll. Pension funds in 

east Tennessee, thousands and tens of 

thousands of people I represent are upside down and it’s happening fast. The 

cost of inaction is greater than the 

cost of this bill. 

The $700 billion is a loan. Warren 

Buffet said Wednesday night it’s a good 

business deal, he would take it, the 

government is going to get their 

money back. He knows more about this 

than anybody in this House, to be honest with you. He feels good about it. I 

don’t like this at all. As a matter of 

fact, I hate it. It’s disgusting that we 

would ever be brought to this floor to 

have to cast this vote, but we’re out of 

options. We don’t have a month to rewrite a new bill. 

Things are critical. We don’t even 

have gas at the stations in east Tennessee. Economic anxiety is hurting 

the families. I’ve been listening to 

small business people all week long and 

they said, thanks for voting ‘‘no’’ on 

Monday and thanks for standing up for 

us, but you’ve got to do something. 

Congress has to act. We’re out of options. Hold your hand over your heart 

and vote ‘‘yes.’’ 


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Mr. RANGEL. Madam Speaker, Mr. 

JOHN LEWIS is a subcommittee chairman on the Ways and Means Committee and sometimes described as 

‘‘the conscience of the Congress.’’ I regret I only have 1 minute to yield to 

him at this time. 

Mr. LEWIS of Georgia. Madam 

Speaker, I want to thank my chairman 

for yielding. 

Madam Speaker, I have decided that 

the cost of doing nothing is greater 

than the cost of doing something. 

The fear that is gripping Wall Street 

has the power to shut down Main 

Street. We cannot and we must not 

allow this to happen. The people are 

afraid. Their retirement savings are 

slipping away. Small businesses have 

no sales, no credit, and are closing 

their doors. People cannot get loans, 

they’re losing their lines of credit. We 

must act. Now is the time to act. We 

must do something. 

I do not see this as a blank check. In 

a few months, we will have a new 

President and a new Congress. We must 

hold the feet of these financial institutions to the fire. It is with this assurance that I will vote ‘‘yes’’ on this legislation. 

The SPEAKER pro tempore. The gentleman from Louisiana has 21⁄2 minutes 

remaining. 

Mr. MCCRERY. Madam Speaker, I 

yield 2 minutes to the distinguished 

gentleman from Texas, a member of 

the Ways and Means Committee, Mr. 

BRADY. 

Mr. BRADY of Texas. Thank you, JIM

MCCRERY, for your leadership throughout the years on this issue and so many 

other important ones. 

b 1115 

Congress must act. Our Nation faces 

the fiercest financial crisis in our lifetime, and for lawmakers entrusted 

with America’s prosperity to stand by 

and do nothing, that’s no longer an option. 

I don’t like this bill any more than 

my constituents do. The thought of our 

interfering in the marketplace, of 

spending taxpayer dollars for irresponsible Wall Street firms, it makes my 

constituents angry and me too. But the 

fact of the matter is these bad loans 

have infected too much of America’s 

economy and they threaten the world’s 

economy as well. And make no mistake, if these Wall Street financial 

companies go down, our businesses and 

families in Texas are pulled down with 

them. 

Families in my district are already 

watching their life savings disappear 

before their eyes. I met a Texas worker. She only had $15,000 in her savings; 

she lost $8,000 of it over the past 2 

weeks. I talked to a woman who 

stopped me in my car as I was leaving 

my neighborhood, and she said she and 

her husband have a small business. 

Their good customers can’t get the 

credit to buy their products anymore. 

For the first time in 17 years since 

they started their business, she is truly 

frightened. And I ask myself why 

should our local families, why should 

our local communities pay the price in 

lost jobs and lost savings because of 

Wall Street greed? Haven’t these Wall 

Street companies caused enough damage? 

This is not my solution. This is not 

the only solution. America faces tough 

times. We’re going to have to come 

right back in November, in my opinion, 

and bring about the reforms to stop 

this from happening again. But I am 

going to vote ‘‘yes’’ again to pull this 

Nation back from its economic brink 

and protect the families and jobs and 

small businesses in Texas. 

Mr. RANGEL. Madam Speaker, I 

would like to yield to Mr. KIND of Wisconsin for 11⁄2 minutes. 

Mr. KIND. I thank my good friend for 

his courtesy and his leadership on this 

issue. 

Madam Speaker, we have before us 

today, because of our friends in the 

Senate, the granddaddy of all jams. 

They took an incredibly important economic rescue plan and loaded it up 

with a bunch of extraneous, unrelated 

items that weren’t paid for. They’re in 

essence holding a gun to our head 

today daring us to vote ‘‘no.’’ But, unfortunately, we gave them that gun 

last Monday because of the failure of 

this Chamber to act. And the credit 

markets are continuing to freeze up, 

and my concern is unless we take action today, many innocent people back 

home and throughout America will suffer the consequences. 

The plan we have before us today, the 

rescue plan, is vastly different from the 

original one sent to us by the administration. Today it’s about protecting 

Main Street, not Wall Street. It’s 

about protecting the American taxpayer, not CEOs’ salaries. We have included in here important oversight, 

transparency, accountability provisions to protect the American people. 

And time is of the essence. But at some 

point and some time, we have to have 

the political will and the courage to 

start paying for things again in this 

country so we do not leave a legacy of 

debt for our children and grandchildren. We won’t accomplish that 

today, but time is of the essence and 

we must move this rescue plan forward 

to avert a much wider disaster tomorrow. 

Mr. MCCRERY. Madam Speaker, I reserve the balance of my time. 

Mr. RANGEL. Madam Speaker, at 

this time, to Mr. PASCRELL from New 

Jersey, a great member of the Ways 

and Means Committee, I would like to 

yield 11⁄2 minutes. 

Mr. PASCRELL. Madam Speaker, if 

we had approved the legislation on 

Monday, we would not have been able 

to pass the tax extenders package, 

which includes business and energy tax 

extenders. The AMT patch, we all 

worked hard on that across the aisle, 

whether you wanted to pay for it or not 

was the debate, and the additional disaster assistance as well as mental 

health parity. I think these are important. 

Alexander Hamilton, my idol, was 

very clear that there are immutable 

principles of moral obligation. Monday 

I voted ‘‘no,’’ and I know that the 

enemy of the good is the perfect. But 

since Monday we have improved certain parts of the bill. And there is some 

junk in this bill. There are no two ways 

about it. But that is not unique on this 

bill. 

So to help the American people, I am 

now supporting today’s financial package. And it’s really the McCrery-Rangel team that got me to this point. 

You guys have worked closely together. You are a good model and example for what we should be doing. 

I pray that I’m doing the right thing. 

I believe so in my heart. God bless this 

country. We will prevail. 

Madam Speaker, the legislation we have 

before us today arises at a vital time when 

Americans are suffering under a rapidly failing 

financial market and collapsing housing market. 

My ‘‘no’’ vote on Monday was among one of 

the most difficult votes I have had to cast in 

my 12 years as a Member of Congress. 

My goal in Congress has always been to 

fight for the best interest of ordinary Americans—to fight for the American worker, the 

American small business owner, the people 

who make up the heart and soul of our nation. 

I thought of them when I voted ‘‘no’’ on 

Monday because that bill fell short of helping 

those people who are suffering the most from 

this financial crisis. 

Today, I stand before you far from assured 

that this legislation is a s good as it can be but 

understanding that we cannot stand back and 

allow our financial markets, credit markets, 

housing market, pension plans, and small 

businesses to collapse under the weight of the 

errors made by Wall Street. 

Lead by Speaker PELOSI and Chairman 

FRANK we have taken an inadequate 21⁄2 page 

proposal and developed a more substantial bipartisan piece of legislation which we present 

today. 

I support the addition of the increase to the 

Federal Deposit Insurance Corporation, FDIC. 

It is exactly the type of bottomup, community 

approach we need to put liquidity back in to 

Wall Street. 

Furthermore, if we had approved the bill on 

Monday we would not have been able to pass 

this tax extenders package that includes business and energy tax extenders, an AMT 

patch, additional disaster assistance as well 

as mental health parity. 

I am certainly disappointed that these provisions are not paid for but it would be unconscionable to allow the American people to suffer without this tax relief. 

Today’s bill is not perfect but we have done 

what we needed to do for the American people. In truth if you gave every Member of Congress a chance to draft a proposal to address 

this crisis we would have 435 bills in front of 

us today—the enemy of the good is the perfect. 

Since Monday we have improved this bill to 

help the American people and therefore I am 

supporting today’s financial rescue package. I 

urge all my colleagues from both sides of the 

aisle to vote ‘‘yes’’ on Emergency Economic 

Stabilization Act of 2008. 


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Mr. MCCRERY. Madam Speaker, I reserve the balance of my time. 

Mr. RANGEL. Madam Speaker, at 

the Speaker’s request, I would like to 

yield 1 minute to Mr. SHERMAN of California. 

Mr. SHERMAN. Madam Speaker, I 

thank the gentleman for 1 minute. I 

can’t possibly in that minute describe 

the problems with this bill. I hope people will pick up the blue paper that I’m 

distributing. 

But what they have done to the bill 

is they have added special tax breaks 

for those who import bows and arrows, 

and those who import wool, thus displacing American products as part of 

the economic recovery package. That’s 

why it’s not the economic recovery 

package. It’s the pork-laden, earmarkladen Wall Street bailout bill. It is a 

bill that will send hundreds of billions 

of dollars not for bad investment decisions made in America but to buy toxic 

assets currently in the safes in London 

and Riyadh, Saudi Arabia, and Beijing. 

It is a bill that will allow million-dollar-a-month salaries, and $5 million-amonth salaries, to be paid to executives who have driven their firms into 

the ground and now need a taxpayer 

bailout. It is a bill that provides for an 

oversight board that critiques, but cannot stop anything. 

Vote ‘‘no’’ now. We will stay in town 

and write a good bill. 

Mr. MCCRERY. Madam Speaker, I 

yield myself the balance of my time. 

Madam Speaker, the bill before us 

today, certainly the tax portion of the 

bill today, represents a compromise. 

These extensions of expiring provisions 

of the Tax Code have been bandied 

about here in the House back, over in 

the Senate, back and forth all year 

long, including the patch on the alternative minimum tax. I’m gratified that 

we were able to come together to 

present the tax extenders in this package because I believe very strongly in 

the overwhelming majority of those 

provisions. I think they’re good, sound 

tax policy. Members of this House have 

voted for all of them many times over. 

So, Madam Speaker, I encourage a 

‘‘yea’’ vote on this bill, especially for 

the tax extenders. 

Mr. RANGEL. Madam Speaker, I 

would like to yield the balance of my 

time to the gentleman from New York 

(Mr. CROWLEY). 

Mr. CROWLEY. I thank the chairman 

for yielding. 

Madam Speaker, this is not a rescue 

package solely for Wall Street nor is it 

for New York City nor for New York 

State. In fact, I would argue with you, 

all of my colleagues, that it will take 

many years for New York City and New 

York State to recover from the downturn of Wall Street. 

This is more about our country, 

about the United States, and our economic woes today. It’s about 401(K) 

plans, about investment plans of my 

mother on 65th Street in Woodside, 

Queens. She saw that decline just a few 

days ago. This is about all of our constituents who have seen a loss over the 

past few days. It’s about the health of 

our entire economy. And ladies and 

gentlemen, my colleagues, this is not 

just the United States. The entire 

world is looking at us today and looking to see us vote in favor of this bill. 

Would we like the luxury of more 

time to hold more hearings and have 

more due process? Of course we would. 

We’d like to have months to do that. 

But we simply don’t have the time. We 

don’t have that luxury. We cannot afford that. 

What we have to do, ladies and gentlemen, is do the right thing and vote 

in favor of this package. 

The SPEAKER pro tempore. The gentleman from Massachusetts is recognized. 

Mr. FRANK of Massachusetts. 

Madam Speaker, I yield myself such 

time as I may consume. 

Madam Speaker, we have limited 

time here, and I want to explain to the 

Members that I will be devoting most 

of my time to colloquy with Members 

who have serious concerns about this 

bill. 

I believe this bill has a great deal 

more in it in a number of areas, including in particular avoiding foreclosures, 

than people have recognized. I at this 

point will insert into the RECORD under 

General Leave a letter from the American Banker, in which Sheila Bair, who 

is one of the best regulators we have 

ever had, who has been using her authority over the mortgages she inherited through the IndyMac failure to 

really provide foreclosure relief, and 

she says in this: ‘‘The provision would 

allow the Treasury Department to provide credit guarantees and enhancements on whole loans.’’ Ms. Bair said 

in an interview Thursday, ‘‘They can 

have so much bigger bang for their 

buck.’’ She asked us to put this in. We 

put it in. It may be obscure, but it in 

and of itself will lead to a great deal of 

help for people with mortgages. 

What I will be doing, Madam Speaker, during this debate is yielding time 

for colloquies to Members who are 

seeking clarification of points in the 

bill, many of them involving what is 

very powerful language, although not 

everything we would have liked, to 

mitigate foreclosures. I will say that I 

have spoken to the people at the Department of Treasury, including yesterday morning the Secretary himself, 

and I will be making commitments 

today about how we believe this bill 

will be interpreted, and I will be making no commitments that I have not 

explained to the Treasury, that the 

staff of the Financial Services Committee which has done such wonderful 

work has not discussed with the Treasury. So we will be, as I said, working 

with Members to clarify some parts of 

this bill because I do not think it is 

fully appreciated that it has a good 

deal more in it for the foreclosure issue 

and some other issues than has been 

recognized. 

[From American Banker, Oct. 3, 2008] 

BAIR: HOW TO GET MORE BANG FOR BAILOUT

BUCK

(By Rob Blackwell) 

WASHINGTON.—Of all the provisions in the 

bill designed to stabilize the financial markets, one of its most potent is not getting 

enough attention, according to Federal Deposit Insurance Corp. Chairman Sheila Bair. 

The provision would allow the Treasury 

Department to provide credit guarantees and 

enhancements on whole loans. If it were 

used, it would allow the government to increase modifications and stabilize home 

prices at a much smaller cost than buying 

the loans themselves, Ms. Bair said in an 

interview Thursday. 

‘‘They can have so much bigger bang for 

their buck,’’ she said. ‘‘You don’t have an 

initial cash outlay, you can leave them in 

the private sector, you can do the servicing 

in the private sector, and you can condition 

them on some type of modification protocol, 

which would get the mortgages restructured 

faster.’’ 

The provision, a single sentence in the 451- 

page bill, has attracted little attention from 

analysts and industry representatives. Instead, they have focused on the crux of the 

bill, which would allow the Treasury to buy 

and hold up to $700 billion of troubled assets. 

The bill would give the Treasury secretary 

the power to ‘‘use loan guarantees and credit 

enhancements to facilitate loan modifications to prevent avoidable foreclosures.’’ 

How that would work remains unclear. In 

theory, the Treasury could guarantee certain 

types of loans—option adjustable-rate mortgages, for example—and require lenders that 

want to use the insurance to engage in loan 

modifications first. If the reworked loan performed, the government would never be involved, but if the loan later defaulted, the 

government would take a certain amount of 

the loss. 

Though she is supportive of the $700 billion 

buyout facility, Ms. Bair said the provision, 

added at the behest of the FDIC, could provide a critical alternative. 

‘‘It will be another tool they have in their 

toolkit, and it will be cheaper,’’ she said. 

‘‘You can provide credit support to $100 billion worth of mortgages with no up-front 

cash outlay. The exposure would be less than 

buying those mortgages directly.’’ 

During her two-year tenure, the FDIC has 

moved from the background to the forefront 

of the housing crisis. In the past week alone 

it has handled the largest failure of all 

time—the $309 billion-asset Washington Mutual Inc.—with no cost to the government. It 

also invoked the systemic risk exception for 

the first time in the agency’s history to facilitate a deal to sell most of Wachovia Corp. 

to Citigroup Inc. 

Ms. Bair said regulators had no choice but 

to use the exception, which was created in 

1991 and required the approval of the Federal 

Reserve Board and the Treasury. 

‘‘We all felt that preventive action was 

needed,’’ she said. ‘‘It was a potential failure, 

driven primarily by market confidence 

issues.’’ 

Ms. Bair has also been working to help 

pass the bailout bill. After the House unexpectedly defeated the legislation Monday, 

lawmakers scrambled for provisions to bring 

more Republicans on board. The most notable addition would increase deposit insurance to $250,000 per depositor per institution. 

That provision would reassure nervous depositors that the banking system is stable, 

Ms. Bair said, and it gets to the heart of the 

problem: a lack of confidence among consumers, bankers, and businesses. 

‘‘Raising the deposit insurance limit to 

$250,000 is designed to address that problem 


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H10762 CONGRESSIONAL RECORD — HOUSE October 3, 2008 

of public confidence,’’ she said. ‘‘Expanding 

that safety net for a period of time, I think, 

will help with the Main Street depositor and 

also provide help for banks.’’ 

The coverage hike would take effect immediately and would expire Dec. 31, 2009. The 

bill explicitly says banks should not face a 

premium hike as a result. Analysts argue 

that Congress would have to make the higher limit permanent. Ms. Bair would not take 

a position, except to say the FDIC should 

have the power to raise premiums if the increase becomes permanent. 

‘‘It’s a question for Congress,’’ she said. ‘‘It 

could be destabilizing if they lift it in 2009, 

but the trade-off would be that banks would 

have to start paying premiums.’’ 

Overall, she said, she hopes the legislation 

will help ease fears among financial institutions, some of which have become worried 

about lending to each other. 

‘‘There is a confidence issue,’’ Ms. Bair 

said. ‘‘Originally, liquidity issues were tied 

to capital adequacy. Now I think liquidity 

issues are tied to just uncertainty. . . . We 

are asking Main Street to have confidence in 

the banking system. Well, I would ask the 

banks to have confidence in the banking system and lend to each other.’’ 

She said a freeze on credit is only making 

the situation worse. 

‘‘We acknowledge that some individual 

banks have challenges, but overall they still 

have strong capital, and they’ve built up 

their loan loss reserves,’’ she said. ‘‘We 

shouldn’t be freezing up and panicking.’’ 

Though some have argued the bailout bill 

does not go to the heart of the issue, Ms. 

Bair was unequivocal in saying she thought 

the buyout facility would help the situation. 

‘‘The reason for the liquidity issue is you 

have an asset on the balance sheet where the 

cash flow suggests one valuation, but if you 

have to sell it, you will be taking a steep loss 

because the market is seizing up,’’ she said. 

‘‘So we will be providing a vehicle for moving those assets off balance sheet for a price 

other than a rock-bottom distressed price. 

We are capable of letting the government 

hold the asset for a while before it’s sold 

which will help ease downward pressure on 

asset valuations. It absolutely should help.’’ 

But she acknowledged some concern that 

the legislation did not do enough to help 

struggling borrowers. 

Ms. Bair was at the forefront last year in 

warning that lenders and servicers needed to 

systematically lock in low, starter rates so 

that borrowers could continue making their 

mortgage payments on time. More defaults 

would lead to increased foreclosures, which 

would cause further deterioration in the 

housing market. Few took her advice, and 

the housing market continued to sink. 

If more lenders had modified loans, she 

said the situation would still be bad, but not 

as dramatic. 

‘‘We were going to have these problems no 

matter what, but I do think it would be less 

of an impact,’’ she said. 

But Ms. Bair said she did not understand 

why Congress is not doing more to assist borrowers in the bailout legislation. Lawmakers 

debated forcing more servicers to engage in 

systematic modifications, but ultimately did 

not do so. 

‘‘I don’t understand it,’’ she said. ‘‘The borrowers here that are losing their houses have 

been this politically powerless group. From 

the get go, politically, for whatever reason, 

they were put in a category of they got over 

their head and were an unsympathetic group 

to deal with. That is not the case with all of 

them.’’ 

OCTOBER 2, 2008. 

DEAR REPRESENTATIVE: We were profoundly disappointed with the House vote on 

Monday rejecting bipartisan economic recovery legislation. We are writing today to urge 

the House to act now to pass the Emergency 

Economic Stabilization Act to bring stability to credit markets. 

The impact of the House action was painfully demonstrated Monday when the stock 

market lost $1.2 trillion as the Dow Jones Industrial Average fell 777.8 points, the largest 

single-day point drop in American history. 

Virtually every American witnessed their retirement, investment and savings accounts 

decline steeply. 

Further, the evaporation of credit is affecting businesses of all sizes and consumers and 

we run the risk of further declines in housing 

values. If Congress fails to act, credit markets will tighten further. Our associations’ 

members will find it more difficult—if not 

impossible—to secure credit to finance their 

operations, and members’ employees will 

find it harder to get mortgages, secure auto 

loans, and borrow money to send their children to college. 

Americans rely on credit and liquid markets to make our economy function, and we 

will continue to see our economy and the 

well-being of all Americans impacted unless 

the House acts. Significant bipartisan cooperation has produced a strong financial 

rescue plan with strong taxpayer protections 

to help stabilize the financial system and 

prevent a meltdown of our capital markets. 

The Senate has passed this legislation by a 

3 to 1 margin. We urge you to address this 

crisis by voting to support this criticallyneeded measure. 

Sincerely, 

Advanced Medical Technology Association; 

Air Conditioning Contractors of America; 

The Aluminum Association; American Apparel & Footwear Association; American 

Bankers Association; American Beverage Association; American Boiler Manufacturers 

Association; and American Business Conference. 

American Chemistry Council; American 

Concrete Pressure Pipe Association; American Financial Services Association; American Forest & Paper Association; American 

Gas Association; American Hotel & Lodging 

Association; American Insurance Association; and American Meat Institute. 

American Rental Association; American 

Road & Transportation Builders Association; 

American Trucking Associations; Associated 

Builders and Contractors, Inc.; Associated 

Equipment Distributors; Associated General 

Contractors of America; Association of 

Equipment Manufacturers; and Association 

of International Automobile Manufacturers. 

Business Roundtable; Chamber of Commerce of the U.S.; Consumer Bankers Association; Consumer Mortgage Coalition; Edison Electric Institute; Equipment Leasing 

and Finance Association; Financial Services 

Forum; and The Financial Services Roundtable. 

Food Marketing Institute; Housing Policy 

Council; Independent Community Bankers of 

America; Independent Electrical Contractors, Inc.; Independent Petroleum Association of America; International Dairy Foods 

Association; Information Technology Industry Council; and International Franchise Association. 

Minority Business RoundTable; Mortgage 

Bankers Association; National Association 

of Chain Drug Stores; National Association 

of Electrical Distributors; National Association of Homebuilders; National Association 

of Manufacturers; National Association of 

Plumbing, Heating, and Cooling Contractors; 

and National Association of Real Estate Investment Managers. 

National Association of Realtors; National 

Association of Wholesaler-Distributors; National Electrical Contractors Association; 

National Electrical Manufacturers Association; National Federation of Independent 

Business; National Restaurant Association; 

National Retail Federation; and National 

Roofing Contractors Association. 

National Rural Electric Cooperative Association; NPES—The Association for Suppliers of Printing, Publishing and Converting 

Technologies; Printing Industries of America; The Real Estate Roundtable; Reinsurance Association of America; Retail Industry 

Leaders Association; Securities Industry and 

Financial Markets Association; and Software 

& Information Industry Association. 

[From the Boston Globe, Oct. 3, 2008] 

NATIONAL UPHEAVAL, LOCAL SHUDDERS— 

CREDIT WOES CONVULSE PLANS OF CITIES, 

TOWNS

(By John C. Drake) 

Springfield Mayor Domenic Sarno said the 

city has been waiting a long time to repair 

sidewalks and tear down abandoned buildings in his financially beleaguered city. Now 

residents will have to wait a little longer. 

With the crisis on Wall Street, the firstterm mayor’s promises to pay for improvements on Springfield’s streets are on hold because raising money by floating municipal 

bonds in this climate is prohibitively expensive, he said. 

It is the kind of problem facing dozens of 

communities, say officials. Like a hurricane 

swirling offshore, the financial crisis is barreling down on Massachusetts cities and 

towns, but no one knows yet how bad the 

damage could be. 

Local leaders this week have been nervously eyeing bailout negotiations on Capitol 

Hill, the freezing bond markets, their falling 

pension fund values, and the State House, 

where Governor Deval Patrick may eventually decide to seek local aid cuts. 

The moribund credit markets are making 

it difficult to pay for capital projects such as 

road work, because credit is either unavailable or rates are too high, local officials and 

municipal finance observers say. ‘‘I’m trying 

to be fiscally prudent while at the same time 

trying to drive an ambitious agenda,’’ Sarno 

said. ‘‘It does affect Main Street, whether 

people are calling for a pothole or a multimillion dollar project they want improved.’’ 

Boston has so far not been affected because 

it usually issues general-obligation bonds in 

February or March, said the city’s chief financial officer, Lisa Signori. But other cities 

and towns were looking to enter the bond 

market sooner. 

‘‘Communities that have been planning on 

issuing debt for a large municipal project—a 

police station, a school, infrastructure improvements—are likely monitoring the situation and waiting to issue debt, waiting for 

the market to stabilize and for banks to 

issue credit again,’’ said Geoff Beckwith, executive director of the. Massachusetts Municipal Association. 

Sarno said Springfield has a wish list of 

capital improvements totalling $470 million, 

with $23 million on a high-priority list. 

Projects that could be affected range from 

sidewalk repairs and planned demolitions of 

derelict buildings costing tens of thousands 

of dollars to a major renewal for Springfield’s South End estimated to cost $6.2 million. 

Quincy Mayor Thomas P. Koch said funding for ongoing construction of a new Quincy 

High School and other projects, including a 

planned new middle school, could be affected. 

‘‘You don’t put the bond out at once. You 

borrow periodically and then float the 

bond,’’ he said. ’We’re working with the state 

on an application to replace the middle 

school and we’re going to market soon with 


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the bonds for that. Some of the other improvements at other buildings may just have 

to wait a little bit.’’ 

Officials at the Massachusetts School 

Building Authority, which has committed to 

help dozens of communities build schools, 

have sought to assuage concerns. 

‘‘The MSBA’s financial obligations to 

school construction projects will be met despite the current economic turmoil,’’ the authority said in a statement provided by 

spokeswoman Carrie Sullivan on Wednesday. 

Municipal pension funds, which are invested in a vast array of stocks, bonds, and 

other securities, are another significant 

source of worry. 

‘‘Clearly this is not good news and is not a 

good market and there will be some loss of 

value that will appear on the books,’’ 

Beckwith said. ‘‘The question is, will that 

value be recovered before the pension system 

needs to access those assets.’’ 

Signori said Boston’s pension board would 

be briefed by financial advisers next week on 

the state of the city’s investments. ‘‘Certainly, this quarter’s performance is important, but what you’re looking at is what’s 

happening over five years or over ten years,’’ 

she said. 

Other Boston city accounts and investments are considered secure because the city 

collateralized them in the late 1990s, meaning the investments are backed up by cash 

from other banks and not subject to ceilings 

on federal deposit insurance. 

‘‘We weren’t out there to make a lot on 

high interest rates; we wanted to make sure 

our money was safe,’’ Boston Mayor Thomas 

M. Menino said this week. ‘‘The city of Boston’s money is safe.’’ 

But Menino and Signori acknowledged the 

city’s finances could be hurt if revenue from 

motor vehicle excise tax and hotel-motel excise taxes are down and if local aid takes a 

hit. Projected local aid for Boston already 

had fallen $60 million from 2002, Signori said. 

Quincy Mayor Koch said he was worried 

the city’s retirement board could seek more 

city funding if its investments are hurt. 

‘‘If the retirement board does not get back 

the returns they anticipate, that means 

they’re going to be asking for more appropriation level on the operations side,’’ Koch 

said in a phone interview. ‘‘That bears 

watching, big-time.’’ 

Section 129 of the Emergency Economic 

Stabilization Act is intended to formalize 

the reporting procedures of the Federal Reserve Board to its oversight committees in 

the House and Senate when it exercises authority under Section 13(3) of the Federal 

Reserve Act, relating to loans made to individuals, partnerships and corporations under 

unusual and exigent circumstances. 

Paragraph (a) of Section 129 directs the 

Federal Reserve to report to its oversight 

committees in the House and Senate within 

7 days after it has exercised authority under 

Section 13(3) of the Federal Reserve Act. To 

facilitate congressional oversight, the Federal Reserve would provide the appropriate 

congressional committees justification for 

its actions under Section 13(3) and explain 

the specific terms of the actions taken by 

the Board, including providing information 

about the size and duration of any lending, 

available information concerning any collateral held with respect to such lending, the 

recipient of warrants or other potential equity in exchange for such lending, and any 

expected cost to the taxpayer related to the 

Board’s action. 

The Federal Reserve has used its 13(3) powers to extend loans to borrowers in specific 

one-off transactions as well as to offer several facilities that are open to a range of borrowers on the same terms. Paragraph (b) of 

Section 129 provides for periodic updates by 

the Federal Reserve to its congressional 

oversight committees and is intended to 

apply to any loan or facility initiated under 

Section 13(3) of the Federal Reserve Act, including the status of the loan or facility, the 

aggregate value of the collateral held in connection with the loan or facility, and the 

projected cost to the taxpayers of the loan or 

facility. 

Paragraph (c) of Section 129 provides for 

the confidentiality of any reports made 

under the section and is intended to make all 

such reports confidential upon the request of 

the Federal Reserve Board. Paragraph (d) 

makes the reporting requirement under the 

section retroactive to March 1, 2008. 

At this point, Madam Speaker, I reserve the balance of my time. 

Mr. BACHUS. Madam Speaker, I 

yield 2 minutes to the gentleman from 

South Carolina (Mr. BARRETT). 

Mr. BARRETT of South Carolina. 

Madam Speaker, we come here today in 

the midst of the biggest economic crisis this Nation has ever faced. 

The proposal that was put forth by 

the administration earlier was unacceptable, no accountability, no government oversight, too much burden on 

the American taxpayer. But politics is 

the art of the possible. 

This House is a place where policy 

and reality come together, where people solve problems. I was sitting right 

there when the vote was taken Monday. As soon as it went down, I turned 

to my colleagues and said, It’s time to 

roll up our sleeves, it’s time to solve 

this problem for America, and let’s 

move forward. And we did that. I was 

on the phone with Treasury, with the 

administration, with Senate and House 

leadership, with the SEC. We’ve got 

suspension of mark to market. We’ve 

got increased FDIC insurance. We’ve 

got tax relief, AMT, child tax credit. 

This is a better bill. 

But it’s tough out there. I’ve talked 

to my moms, I’ve talked to my pops, 

I’ve talked to my corporations. No 

matter what we do or what we pass, 

there are still tough times out there. 

People are hurting. People are mad. 

I’m mad. Men and women that have 

fought in this House, I have fought in 

this House for spending regulations and 

tougher restraint, and we have seen 

what has happened and where it has led 

us. 

Do I still have concerns about this 

bill? Yes. Do I still have concerns that 

it will affect the free market system? 

Yes, I do. But we have to act and we 

have to act now. It’s our job to lead. If 

we don’t solve these problems, not just 

these problems but Medicare and Social Security, if this House doesn’t 

lead, America will fail. And if we don’t 

get anything out of this conversation 

today, we need to understand that. It’s 

about leadership. It’s about moving 

forward. 

I’ve had experts on both sides say, 

GRESHAM, this is a good thing, this is a 

bad thing. 

b 1130 

I asked the good Lord to give me the 

guidance and the wisdom to make the 

decision. I will vote ‘‘yes,’’ and I ask 

my colleagues to do the same. 

Mr. FRANK of Massachusetts. I yield 

11⁄2 minutes to the gentleman from Virginia (Mr. MORAN) for the purpose of a 

colloquy. 

Mr. MORAN of Virginia. Thank you, 

Madam Speaker. I won’t take that 

much time. I do want to thank the 

chairman for his masterful leadership 

on this bill, and I do want to clarify 

that the intent of this legislation is to 

authorize the Treasury Department to 

strengthen credit markets by infusing 

capital into weak institutions in two 

ways: By buying their stock, debt, or 

other capital instruments; and, two, by 

purchasing bad assets from the institutions, in coordination with existing 

regulatory agencies and their responsibilities under this legislation, as well 

as under already existing authorization 

for prompt, corrective action and leastcost resolution. 

Mr. FRANK of Massachusetts. Will 

the gentleman yield? 

Mr. MORAN of Virginia. I’d be happy 

to yield. 

Mr. FRANK of Massachusetts. I can 

affirm that. As the gentleman knows, 

the Treasury Department is in agreement with this, and we should be clear, 

this is one of the things that this 

House and the Senate added to the bill, 

the authority to buy equity. It is not 

simply buying up the assets, it is to 

buy equity, and to buy equity in a way 

that the Federal Government will able 

to benefit if there is an appreciation. 

I thank the gentleman for this important clarification. He is absolutely 

right. 

In implementing the powers provided for in 

the Emergency Economic Stabilization Act 

of 2008, it is the intent of Congress that 

Treasury should use Troubled Asset Relief 

Program (TARP) resources to fund capital 

infusion and asset purchase approaches alone 

or in conjunction with each other to enable 

financial institutions to begin providing 

credit again, and to do so in ways that minimize the burden on taxpayers and have maximum economic recovery impact. Where the 

legislation speaks of ‘‘assets’’, that term is 

intended to include capital instruments of an 

institution such as common and preferred 

stock, subordinated and senior debt, and equity rights. Also, it is the intent of this legislation that TARP resources should be used 

in coordination with regulatory agencies and 

their responsibilities under prompt-corrective-action and least-cost resolution statutes. 

Mr. MORAN of Virginia. Nice going, 

Chairman. Thank you. 

Mr. BACHUS. Madam Speaker, I 

yield 1 minute to the gentleman from 

Oklahoma (Mr. COLE). 

Mr. COLE of Oklahoma. I thank the 

gentleman for yielding. 

Madam Speaker, everybody in this 

Chamber knows the right political vote 

on this package. The easy thing to do 

is vote ‘‘no’’ and hope the bill passes. 

Every Member knows there is no political upside to supporting this legislation. 

It’s also easy to say that something 

must be done—but something else. 

Well, we all have our own preferred 


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plans, Madam Speaker. The only problem is none of them get 218 votes. 

I know my colleagues on both sides 

of the aisle are struggling to do the 

right thing. Lyndon Johnson used to 

say, ‘‘Doing the right thing isn’t hard; 

knowing the right thing to do is.’’ This 

is certainly one of those occasions, 

Madam Speaker. But I am convinced 

unless we act, the stock market will 

take a nose dive, economic activity 

will freeze, credit markets will dry up, 

people will lose their jobs. 

The real question is: Are we willing 

to gamble the jobs, the life savings, the 

retirement accounts, the homes and 

the businesses of the people we represent? Are we willing to risk the global, political, and social turmoil that 

will come if we have a prolonged recession or depression in the United 

States? Frankly, Madam Speaker, I am 

not. 

Madam Speaker, everyone in this room 

knows the right ‘‘political’’ vote on this package. The easy thing to do is to vote no and 

hope the bill passes. Every member knows 

there is no political upside in supporting this 

bill. 

It is also easy to say, ‘‘something must be 

done—but not this.’’ We all have our own 

schemes. Certainly I have my own five-point 

‘‘Tom Cole plan.’’ I would suspend mark-tomarket accounting rules, purchase preferred 

stock in institutions to protect the taxpayer, institute a private insurance program, limit executive compensation in companies that get 

Federal help, and raise the FDIC insured bank 

deposits from $100,000 to $250,000. There is 

only one problem with my plan, Madam 

Speaker, it cannot get 218 votes in this Chamber. 

Madam Speaker, I know that my colleagues 

on both sides of this issue want to do ‘‘the 

right thing.’’ However, as Lyndon Johnson 

used to say, ‘‘doing the right thing isn’t hard, 

knowing the right thing to do is.’’ I have struggled over whether passing this bill is the right 

thing to do. I do know that if it fails the stock 

market will take a nose dive, credit will freeze 

up and economic activity will grind to a halt. 

Some believe in time the markets will stabilize 

and correct themselves. I hope they are right. 

The real question is are we willing to gamble the jobs, life savings, retirement accounts, 

the homes and the businesses of the people 

we represent? And are we willing to risk the 

global political and social turmoil that will surely occur if there is a severe and prolonged recession or depression in the United States? 

Frankly, Madam Speaker, I am not. 

Madam Speaker, I am from Oklahoma, a 

state that has had more than its share of economic hardship over the years. My grandparents and parents lived through the Great 

Depression. They dealt with the hard times at 

home and the wars abroad that it spawned. 

My family and I lived through the 1980s when 

a banking and real estate collapse devastated 

Oklahoma’s economy. I saw my State’s per 

capita income fall from 98 percent to 79 percent of the national average. I saw hundreds 

of banks close, thousands of businesses fail, 

and countless families lose their life’s savings. 

I do not intend to let that happen again for the 

sake of political popularity, ideological purity, 

or legislative perfection. 

Madam Speaker, passing this bill is no substitute for long to structural reforms, appropriate legislative oversight, and the establishment of suitable levels of accountability and 

transparency in our financial markets. Those 

are issues we must confront in the next Congress. However, inaction in the face of the 

current turmoil in the markets is not an acceptable option. In fact, it is a huge gamble. 

Madam Speaker, I know I will be haunted 

by this vote for the rest of my political life. I 

know I will have to explain it again and again 

to my friends. And I will be forced to defend 

it in every election against my opponents. And 

I know, having made this vote, I will have to 

make other tough votes to reform our economic and political systems. However that is 

far better than the lost jobs, the foreclosed 

homes, the depleted savings, the broken businesses, the devastated lives, and the dangerous world that I believe will be the consequences of a failure to act. 

Madam Speaker, I will vote for this bill not 

because I wish to, but because I have to for 

the good of the people I represent. I trust that 

each of my colleagues will cast their vote in 

the same spirit, and I truly believe they will. 

There are no good choices here—but positive 

action is the right choice. 

Mr. FRANK of Massachusetts. 

Madam Speaker, I yield 2 minutes to 

one of our leading attorneys in the 

House, who, representing the State of 

California, has a particular knowledge 

about much of what we are trying to do 

in this bill in the foreclosure area, the 

gentlewoman from California (Ms. ZOE

LOFGREN). 

Ms. ZOE LOFGREN of California. 

Madam Speaker, there’s much not to 

like in this bill and there’s a lot to be 

angry about how we got here, and if 

this passes, our job will not be done. 

We will have further efforts that will 

be required, especially to stabilize the 

housing market. 

I chair the California Democratic 

Delegation. I want to share with Members the communications we have received from California’s Governor and 

the Treasurer of the State of California. 

The Governor tells us, and this is a 

quote, ‘‘It is daunting that California, 

the eighth largest economy in the 

world, cannot obtain financing in the 

normal course of its business to bridge 

our annual lag between expenditures 

and revenues. This means that California may soon be forced to delay payments for critical services, such as 

teachers, law enforcement, and nursing 

homes. The same thing would happen 

to California cities and counties.’’ 

Our Treasurer, Bill Lockyer, has told 

us, ‘‘For 10 days, State and local governments have been closed out of credit 

markets—long-term and short-term— 

in spite of the fact they represent no 

default risk and provide a good tax return to investors.’’ He says, ‘‘Without 

prompt Federal action to address the 

economic crisis, we may have no market access. That means the State’s 

cash reserves will be exhausted near 

the end of October. Payments for 

teachers’ salaries, nursing homes, law 

enforcement, and every other Statefunded service would stop or be significantly delayed. California’s 5,000 cities, 

counties, school districts, and special 

districts would face the same fate.’’ 

There is a $7 billion revenue anticipation note that the State needs to float 

to meet cash flow needs, and they cannot sell those revenue anticipation 

notes because of the credit freeze. 

Folks, what this means is that the 

State of California, the eighth largest 

economy in the world, will not be able 

to meet payroll by the end of this 

month unless we take action to 

unfreeze these credit markets. I wanted 

to make sure that every Californian 

and, really, every American knew. 

STATE CAPITOL, 

Sacramento, CA, October 2, 2008. 

Hon. HENRY M. PAULSON, Jr. 

Secretary of the Treasury, 

Washington, DC. 

DEAR MR. SECRETARY, First of all, let me 

commend you for your leadership to enact 

emergency economic stabilization legislation. This credit crisis has the power to 

grind the U.S. economy to a halt if swift and 

decisive action is not taken immediately. 

The federal rescue package is not a bailout 

of Wall Street tycoons—it is a lifeboat for 

millions of Americans whose life savings, 

businesses, retirement plans and jobs are at 

stake. I have communicated this message to 

the entire California Congressional delegation and will continue to press for passage of 

an emergency rescue plan. 

Like many other states, California is feeling the enormous effects of this crisis on our 

economy. California’s economy is dynamic 

and resilient, but also uniquely sensitive to 

national and international economic conditions and fluctuations in the financial markets. The credit crisis has frozen investment 

and commerce, forcing businesses and families to stop purchasing goods and services. 

This has resulted in tens of thousands of lost 

jobs and billions of dollars in lost tax revenue to the state. 

Most immediately, California and a number of other state and local governments are 

experiencing the lack of liquidity in the 

credit markets firsthand. Many states and 

local governments have been unable to secure financing for bond offerings and for routine cash flow used to make critical payments to schools, local governments and law 

enforcement. While some states may be able 

to absorb a delay or obtain high-interest financing through private banks, California is 

so large that our short-term cash flow needs 

exceed the entire budget of some states. We 

expect to issue $7 billion in Revenue Anticipation Notes for short term cash flow purposes in a matter of days. 

Absent a clear resolution to this financial 

crisis that restores confidence and liquidity 

to the credit markets, California and other 

states may be unable to obtain the necessary 

level of financing to maintain government 

operations and may be forced to turn to the 

Federal Treasury for short-term financing. 

The economic fallout from this national 

credit crisis continues to drain state tax coffers, making it even more difficult to weather the continuation of frozen credit markets 

for any length of time. I will continue to do 

all I can to encourage passage of the emergency rescue plan. 

Sincerely, 

ARNOLD SCHWARZENEGGER, 

Governor. 

STATE CAPITOL, 

Sacramento, CA, October 1, 2008. 

DEAR MEMBERS OF THE CALIFORNIA CONGRESSIONAL DELEGATION, it’s now very clear 

that the financial crisis on Wall Street is affecting California—its businesses, its citizens’ daily lives and its state government’s 


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ability to obtain financing to pay for critical 

services. 

This is how serious the situation is: our 

State Treasurer warns that the credit market has already frozen up to the point that it 

chills even the State of California’s ability 

to meet its short-term cash flow needs. Additionally, without immediate action from you 

and your colleagues in Congress, California 

will be unable to sell voter-approved bonds 

for the highway, school, housing and water 

construction projects that our state is relying on to help carry us through this difficult 

economy. The state of our already-slow economy makes the financial situation even 

more urgent. 

It is daunting that California, the eighthlargest economy in the world, cannot obtain 

financing in the normal course of its business to bridge our annual lag between expenditures and revenues. This means California may soon be forced to delay payments 

for critical services, such as teachers, law 

enforcement and nursing homes. The same 

thing would happen to California’s counties 

and cities. That is, unless Congress acts 

quickly to restore confidence in our financial system. 

I am writing to urge you to vote in favor 

of the Emergency Economic Stabilization 

Act. This plan is critical to the well-being of 

every community in California and across 

the nation. Swift action in Congress is needed to restore confidence in our financial system. 

Let’s be clear, this plan is not a ‘‘bailout’’ 

for Wall Street. To the contrary, the plan is 

about protecting Main Street. 

We are currently witnessing the initial 

consequences of depositors and investors 

withdrawing assets from a financial system 

in which they have lost confidence and putting them in FDIC-insured accounts and federal obligations. That means there’s little 

money for normal commerce, and what 

money is available is too costly. This dramatically reduces economic activity, translating into fewer jobs, lower wages, reduced 

savings and threatened pensions. If the stabilization plan fails, these outcomes will materialize in scale. 

California’s businesses, both large and 

small, also face the prospect that banks will 

not be able to renew loans. It goes without 

saying that, when people and companies 

can’t get the money to buy cars, inventory 

goods, plant crops, expand business and go to 

school, economic activity slows down, leading to job losses, wage reductions, savings 

declines and pension failures all along Main 

Street, California. 

The situation is urgent. The crisis we face 

demands swift action and bipartisan leadership. Congress must pass this economic stability plan without further delay. 

Sincerely, 

ARNOLD SCHWARZENEGGER, 

Governor. 

[From the California State Treasurer Bill 

Lockyer, October 1, 2008] 

TREASURER LOCKYER URGES CONGRESS TO

ADOPT ECONOMIC RECOVERY PLAN TO THAW

MARKET FOR INFRASTRUCTURE BONDS, CASHFLOW BORROWING

SACRAMENTO.—State Treasurer Bill 

Lockyer today warned that a continuing 

failure by Congress to adopt a national economic recovery plan jeopardizes California’s 

ability to sell infrastructure bonds and 

short-term notes to meet the State’s cash 

flow needs. In releasing the 2008 State of 

California Debt Affordability Report, 

Lockyer made the following statement: 

‘‘For 10 days, state and local governments 

have been closed out of credit markets— 

long-term and short-term—in spite of the 

fact that they represent no default risk and 

provide a good tax-free return to investors. 

The credit market is frozen because financial 

institutions are afraid to commit capital 

amid enormous uncertainty. Congress and 

the President need to adopt a responsible recovery plan, and get the job done quickly. 

‘‘The State and local issuers need certainty that thaws credit markets and eases 

access to crucial financing. Without action, 

we will be unable to sell voter-approved 

bonds for highway construction, schools, 

housing or water projects. More urgently, because the State budget was so late, we have 

only four short weeks to complete what otherwise would be a routine revenue anticipation note sale to meet the State’s cash flow 

needs. Without prompt federal action to address the economic crisis, we may have no 

market access to conduct that short-term 

borrowing transaction. That means the 

State’s cash reserves would be exhausted 

near the end of October. Payments for teachers’ salaries, nursing homes, law enforcement and every other State-funded service 

would stop or be significantly delayed. And 

California’s 5,000 cities, counties, school districts and special districts would face the 

same fate.’’ 

The 2008 Debt Affordability Report recounts the year’s turmoil in capital markets, 

how it affected the State, and how the State 

responded to protect taxpayers. The report 

also details the Lockyer-led effort to end 

rating agencies’ discriminatory treatment of 

municipal bond issuers. The current system 

harms taxpayers and misleads investors. The 

report is available at www.treasurer.ca.gov. 

Mr. BACHUS. Madam Speaker, I 

yield 2 minutes to gentleman from 

Texas (Mr. HENSARLING). 

Mr. HENSARLING. Madam Speaker, 

we all understand that without action 

many of our citizens will find themselves laid off from their jobs. They 

won’t be able to refinance their homes. 

This crisis is real. 

House conservatives know that inaction is not an option, and we have 

worked tirelessly to put different 

plans, ideas, and legislation on the 

table to remedy the crisis. We take 

some measure of pride in knowing that 

the underlying legislation has now 

been improved twice. We believe our efforts help. 

But, Madam Speaker, I still have 

many fears about the legislation before 

us. No one knows if this plan will truly 

work. We all hope it does. No one 

knows the true mount of taxpayer liability. The Secretary of the Treasury 

can go through $700 billion in no time 

flat and come right back to Congress 

for $700 billion more. 

I fear that this legislation still remains more of a bailout than a workout. I fear that it undermines the ethic 

of personal responsibility. I fear that it 

still rewards bad behavior and punishes 

good. But my greatest fear, Madam 

Speaker, is that it fundamentally 

changes the role of the government in 

our free enterprise economy and, despite its current problems, this economy remains the envy of the world. 

How can we have capitalism on the 

way up and socialism on the way down? 

If we lose our ability to fail, will we 

not soon lose our ability to succeed? If 

Congress bails out some firms and sectors, how can it say no to others? 

We must be very careful as we address this financial crisis that we ensure that any short-term gain does not 

come at the expense of even longer 

term pain, that being the slippery slope 

to socialism. 

Madam Speaker, the thought of my 

children growing up in an America 

with less freedom, less opportunity, 

and a lower standard of living is a longterm pain I cannot and will not bear. 

Therefore, I will vote again ‘‘no’’ on 

this legislation. I vote ‘‘no’’ with some 

doubt. But, Madam Speaker, there is a 

better way. 

Mr. FRANK of Massachusetts. 

Madam Speaker, ever mindful of the 

danger that George Bush will lead us 

down the road to socialism, we will be 

monitoring this very closely. 

I now yield 1 minute to the gentleman from Georgia (Mr. MARSHALL). 

Mr. MARSHALL. Thank you, Mr. 

Chairman. As I sit here listening to 

this, I realize that those watching 

must be very confused. It’s a very difficult subject. It’s very difficult to figure out what the right thing to do is. 

As far is I can tell, it’s quite clear what 

the right thing to do is, and that is 

pass this bill, with all its imperfections, to address an underlying problem with our credit markets, which 

will have damaging long-term effects 

on our real economy, on jobs, on savings, on the dreams of Americans. 

But what Americans need to understand is that we are going to get 

through this. With all the argument, 

the fussing, the fighting, we are going 

to get through this. This country is 

going to be a better country 5 years 

from now, 10 years from now, than it is 

today. It should be proud. It should 

keep its head up. It should be confident. 

All of those who are in the lending 

industry, the banking industry, should 

be confident in the future of America, 

and comfortable with the idea that we 

need to just get back on track quickly 

for the sake of all Americans so that 

we can be the strong country that 

America deserves to be in the future. 

Mr. BACHUS. Madam Speaker, I 

yield 2 minutes to the gentlelady from 

Illinois (Mrs. BIGGERT). 

Mrs. BIGGERT. I thank the gentleman for yielding. 

Madam Speaker, on Monday it was 

with reluctance that I voted to oppose 

the earlier version of this bill. I did so 

not because I believed there was no urgent need to act. On the contrary, I believed we had to act quickly, but we 

had to do it right. 

I’ve fought hard to present alternatives and add taxpayer protections. 

Working with some great colleagues on 

both sides of the aisle, we offered options that ranged from insuring instead 

of buying mortgage-backed securities, 

to tightening the language on possible 

losses to the Treasury, to injecting 

capital through tax cuts for repatriation of foreign earnings and more. 

Working with Mr. LATOURETTE, we 

even attempted to limit the initial outlay to $250 billion so that Congress 


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could come back in a month and reassess the need for the remainder of the 

$700 billion. 

Over the last few days, we’ve made 

more progress. The FDIC is raising its 

insurance limit to protect people’s savings. The SEC is revising its mark-tomarket accounting guidelines, and we 

have included middle class tax relief. 

But there still are many changes I 

would like to see. Unfortunately, the 

volatility in the market is threatening 

the financial security of my constituents and millions of American families, 

small businesses, and retirees. 

Make no mistake: the latest compromise is not the best package. It’s 

the package that can move through 

Congress in time to protect the economy from lasting damage. With the 

clock ticking, credit markets seizing 

up, and the market swinging wildly, it 

is clear that the time for seeking better options has run out. I’m glad we 

held out for the taxpayer protections 

that we got. But if we don’t act now, 

those who are least to blame for this 

mess will suffer the most. 

So it is with reluctance that I support this bill today and urge my colleagues to do the same. Our work is by 

no means complete. I look forward to 

revisiting the issue as Congress monitors the program to ensure that we 

minimize risks and that the taxpayers 

see a return on this investment. 

Mr. FRANK of Massachusetts. 

Madam Speaker, I yield for a unanimous consent request to a gentleman 

from Ohio who has been very seriously 

engaged on this issue. 

(Mr. KUCINICH asked and was given 

permission to revise and extend his remarks.) 

Mr. KUCINICH. I rise in opposition to 

this bill. 

The public is being led to believe that Congress has reconsidered its position because 

we have before us a better bill than we had 

a few days ago. It is the same bill plus hundreds of new pages for hundreds of millions of 

tax breaks. What does this have to do with the 

troubles of Wall Street? 

Driven by fear we are moving quickly to 

pass a bill, which may produce a temporary 

uptick for the market but nothing for millions of 

homeowners whose misfortunes are at the 

center of our economic woes. People do not 

have money to pay their mortgages. After this 

passes, they will still not have money to pay 

their mortgages. People will still lose their 

homes while Wall Street is bailed out. 

The central flaw of this bill is that there are 

no stronger protections for homeowners and 

no changes in the language to ensure that the 

secretary has the authority to compel mortgage servicers to modify the terms of mortgages. And there are no stronger regulatory 

changes to fix the circumstances that allowed 

this to happen. 

We should have created a mechanism for 

our Government to take a controlling interest 

in mortgage-backed securities and use our 

power to work out a new deal for the homeowners. We could have done this. We should 

have done this. But we didn’t. 

Now millions of Americans will face the 

threat of foreclosure without any help. And the 

numbers will soon rise for a number of reasons. Not only because of the Alt-A, jumbo 

mortgages which will soon be reset at higher 

interest rates, but because the London Interbank Offered Rate (LIBOR) is pushing up 

rates on adjustable mortgages and more than 

half of the U.S. adjustable mortgage rates are 

tied to LIBOR. Homeowner defaults will grow 

in significant numbers. Let’s see if Congress 

will be as quick to help homeowners on Main 

Street as they were to help speculators on 

Wall Street. 

Now the Government will have to borrow 

$700 billion from banks, with interest, to give 

banks a $700 billion bailout, and in return the 

taxpayers get $700 billion in toxic debt. The 

Senate ‘‘improved’’ the bailout by giving tax 

breaks to people in foreclosure. People in 

foreclosure need help paying their mortgage, 

they do not seek tax breaks. 

Across our Nation, foreclosures continue to 

devastate our communities, people are losing 

their jobs, and the prices of necessities are 

skyrocketing. This legislation, just like the one 

we defeated last week, will do nothing to solve 

the problems plaguing American families or 

help them to get out from underneath the oppressive debt they have been forced to take 

on. 

Unfortunately, there has been no discussion 

of the underlying debt-based economy and the 

role of our monetary system in facilitating the 

redistribution of wealth upwards. 

It is not as though we had no choice but to 

pass the bill before us. We could have done 

this differently. We could have demanded language in the legislation that would have empowered the Treasury to compel mortgage 

servicers to rework the terms of mortgage 

loans so homeowners could avoid foreclosure. 

We could have put regulatory structures in 

place to protect investors. We could have 

stopped the speculators. 

This bill represents an utter failure of the 

democratic process. It represents the triumph 

of special interest over the triumph of the public interest. It represents the inability of Government to defend the public interest in the 

face of great pressure from financial interests. 

We could have recognized the power of Government to prime the pump of the economy to 

get money flowing through out society by creating jobs, health care, and major investments 

in green energy. What a lost opportunity! What 

a moment of transition away from democracy 

and towards domination of America by global 

economic interests. 

Years ago, in a Cleveland neighborhood, I 

saw a hand-scrawled sign above a cash register in a delicatessen. The sign said: ‘‘In God 

We Trust, All Others Pay Cash.’’ The sign 

above the Speaker’s rostrum reads ‘‘In God 

We Trust,’’ but today we are paying the cash 

to Wall Street. 

It is not as if we had no other choice but to 

pass this bill. 

[From Ohio.com, Oct. 3, 2008] 

FORECLOSURE VICTIM, 90, APPARENTLY

SHOOTS SELF

(By Phil Trexler) 

At the age of 90, Addie Polk found herself 

in foreclosure this week, about to be forced 

from the home she’s lived in for nearly 40 

years. 

So, with a gun in her hand, the Akron 

widow apparently shot herself in the chest 

Wednesday afternoon as deputies were 

knocking on her door with eviction papers in 

hand. 

While a nation reels in financial crisis 

from years of mortgage abuse, Polk is recovering at Akron General Medical Center, 

awaiting word on where she will live when 

she’s released. 

Meanwhile, city leaders say Polk has become Akron’s ‘‘poster child’’ for victims of 

predatory lenders. 

‘‘I think this is a case where we need to 

step in and help this lady if she is so desperate to shoot herself because she can’t pay 

her mortgage,’’ Akron Councilman Marco 

Sommerville said. 

Court records show Polk took out a 30- 

year, 6.375 percent mortgage just four years 

ago for $45,620 with a Countrywide Home 

Loan office in Cuyahoga Falls. She took out 

a line of credit that same day for $11,380. 

Her La Croix Avenue home was appraised 

by Summit County in 2004 at $31,230. 

The Countrywide branch did not return a 

call for comment Thursday. 

Polk essentially owed the same $45,000 

when the Federal National Mortgage Association (Fannie Mae) filed for foreclosure on 

her home in 2007. Fannie Mae assumed the 

mortgage from Countrywide. 

Following foreclosure this year, Polk’s sixroom, 101-year-old home was bought by 

Fannie Mae at sheriffs auction for $28,000. 

Her house now belongs to the lender. 

Summit County sheriffs deputies say Polk 

ignored multiple notes and letters leading up 

to Wednesday’s eviction. She also ignored 

the foreclosure action filed in court. 

It wasn’t until Tuesday that she called the 

sheriffs office in disbelief. The next day was 

eviction day. 

‘‘I’m positive she believed the deputies 

were going to come in, clean out the house 

and set her and her things on the curb, because they did that decades ago. But that’s 

not what happens nowadays,’’ sheriffs Lt. 

Kandy Fatheree said. 

‘‘I’m sure she had to be thinking back to 

the Great Depression when people were set 

out on the street. She had to be scared to 

death.’’ 

Deputies Dave Bailey, Jason Beam and 

Don Fatheree went to the home about 1 p.m. 

Wednesday to meet with a Fannie Mae representative and escort Polk from the house. 

They said they had no idea the woman was 90 

years old. 

The deputies’ knocks were unanswered, 

and they were about to leave because the 

Fannie Mae representative failed to show. 

Then, they heard a banging noise coming 

from the home’s second floor. 

Next-door neighbor Robert Dillon heard it, 

too. More bangs followed. 

Dillon borrowed a neighbor’s ladder and 

climbed through Polk’s second-floor bathroom window and walked into her bedroom. 

She was lying on her side, a gun next to her 

on the bed. 

‘‘I’m thinking to myself, ‘Why does Mrs. 

Polk got a gun?’’’ Dillon said. ‘‘After looking around, I touched her shoulder and saw 

the blood and I said, ‘Shucks, she done shot 

herself.’’’ 

Dillon, 62, shouted to the deputies, who 

alerted Akron EMS. Polk apparently shot 

herself more than once with a small-caliber 

handgun, police said. 

Polk and her late husband, Robert, a Goodrich retiree, moved into the home in 1970. He 

died in 1995, but Polk continued to live independently, but alone, still driving her late 

model Chevrolet to the grocery store and 

church. 

She appeared to be struggling financially, 

Dillon said, but he said she never spoke of 

the foreclosure action looming for more than 

a year. 

She had no children of her own and few 

visitors, he said. 

‘‘She didn’t need no help. She got around 

good,’’ he said. 


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It is unclear how Polk used the loan 

money. Dillon said he didn’t notice any work 

being done on the property, and deputies said 

her front porch was soft from years of neglect. 

‘‘Where’d the money go?’’ Dillon asked. 

Sommerville said he is working with the 

city and the county to assist Polk with housing, once she is released from the hospital. 

He said the city has been awarded more 

than $8 million in federal grants in the wake 

of the mortgage crisis to help cope with the 

crush. 

Sommerville said Polk’s fate humanizes 

the problem for the rich and poor. And he 

urged those facing foreclosure to seek assistance through various local and county agencies. 

‘‘It’s a sad situation,’’ he said. ‘‘She’s the 

poster child for this foreclosure crisis we are 

facing.’’ 

Mr. FRANK of Massachusetts. I yield 

2 minutes to a member of the Committee on Financial Services, who has 

been very much concerned with the 

question of foreclosure, the gentleman 

from Georgia (Mr. SCOTT). 

Mr. SCOTT of Georgia. Let me first 

say, Chairman FRANK, how much we all 

appreciate the outstanding job you 

have been doing on this issue. 

Chairman FRANK, it’s very important 

that as we consider this financial package, we make sure we do everything we 

possibly can to reduce the number of 

foreclosures and keep families in their 

homes. We are losing 6,300 foreclosures 

every single day. In this regard, I have 

been working on, and I presented to 

you a four-point package to reach this 

goal. At this time, I certainly want to 

thank my collaborator, Dr. James Galbraith from the University of Texas, 

for his advice on this. 

Essentially, what we want to do is 

really, quite honestly, in the spirit of 

our great Treasury Secretary, Alexander Hamilton, for I believe we need 

to give the Treasury Secretary efficient tools so that he will be able to 

allow us to be able to use a program 

such as our HOPE for Homeowners program to make sure that we are doing 

everything we do as he purchases these 

assets to put the ingredients in place 

that we can bring down these foreclosures and keep individuals in their 

homes, and I have presented this fourpoint plan to you. 

Mr. FRANK of Massachusetts. If the 

gentleman would yield back to me 

briefly, I thank him very much. He has 

been working hard on this, and has also 

not just professed this in general, but 

has made some specific suggestions. 

Of the four points, two will take separate legislation, and I will work with 

the gentleman because I am in agreement with him on them, in concept. 

Two of them, however, are, I believe, 

able to be accomplished in this bill. I 

have spoken to the Secretary of the 

Treasury and, I believe, working together with the gentleman, we can 

make sure. 

Let me just say specifically. Asset 

managers to support loan modifications will be very important for this 

success. The bill encourages the Treasury to consider the FDIC, which has 

been superlative in this regard, to play 

this role. Also, Treasury, under this 

bill, can buy virtually any mortgage 

asset, and we direct them to coordinate 

with the other agencies, like Fannie 

Mae and Freddie Mac and the Federal 

Home Loan Banks, and to maximize 

modifications through the program we 

just adopted. 

The SPEAKER pro tempore. The 

time of the gentleman has expired. 

Mr. FRANK of Massachusetts. I yield 

the gentleman 30 additional seconds. 

We will expect the Secretary to use 

both direct assets and design—to provide special considerations for assets 

where HOPE for Homeowners or other 

programs have been used. In other 

words, we are directing the Treasurer 

to use his authority to maximize, exactly as the gentleman has proposed. 

We will continue to press the Secretary, and I believe we don’t have to 

press too hard. He is ready to do this. 

And we will work with the gentleman 

on the other issues. 

Mr. SCOTT of Georgia. Let me thank 

you, Mr. Chairman, for including certainly two of those four. I deeply appreciate that. Homeowners who are 

struggling across this country appreciate that. We thank you for that. I 

want you to know that I will support 

the bill and I will encourage my colleagues to do the same. 

Mr. FRANK of Massachusetts. I will 

yield myself 15 seconds to say that the 

gentleman can tell his brother-in-law, 

Hank Aaron, he hit .500 today, and 

that’s pretty good in any league. 

Mr. SCOTT of Georgia. I certainly 

will. Thank you, Mr. Chairman. 

b 1145 

Mr. BACHUS. Madam Speaker, I 

yield 2 minutes to the gentleman from 

New Jersey (Mr. GARRETT). 

Mr. GARRETT of New Jersey. 

Madam Speaker, I come to the floor realizing that there is a problem on Wall 

Street that will affect Main Street, and 

I also come here today hopeful, but 

also realistic. 

I will not be supporting this bill 

today, but I know the bill will pass 

later on because so much has been 

added to it to get the votes. But I am 

hopeful then that all the promises that 

have been made by the proponents of 

this bill will come true, after we give 

$700 billion to Secretary Paulson and 

whoever follows him 2 or 3 months 

from now. The promise is that the markets will open up and the markets will 

go up and credit will be free-flowing 

soon. 

But I come here also realistic, realistic to know that if you don’t tackle 

the underlying problems, we will be 

right back in this House again on this 

floor seeking more money and more reform. Realistic also to know if you 

don’t allow for alternatives, you will 

not get the best bill. And we know that 

Speaker PELOSI and the White House 

were not open to listening to any alternatives, and there were alternatives 

out there. And realistic also in knowing that if you fail to investigate earlier enough, these problems will come 

up, as they have. 

Back in the spring of this year, we, 

my Republican colleagues, asked for 

investigations on this matter, and we 

were rebuffed, being told by the chairman, ‘‘I do not think it is necessary 

that we have hearings on the soonest 

possible date.’’ 

Madam Speaker, I come here not in 

support of this bill, but in support of 

doing something, in light of the remarks of economist Robert Shimer, 

who said, ‘‘The U.S. has long been a 

beacon of free markets. When economic 

conditions turn sour in other countries, we give very clear instructions 

on what to do; balance the budget, 

maintain free trade, the rule of law, 

and do not prop up failing enterprise.’’ 

He said it. I agree with him. That has 

always been the U.S. approach, and I 

believe it is the correct approach. 

But when the United States ignores 

its own advice in this situation, we reduce our credibility of this stance. Rewriting the rules of the game at this 

stage will therefore have serious ramifications, not only for the people of 

this country, but for the globe and the 

world as well. You see, Madam Speaker, the social costs of this are far, far 

greater than the $700 billion that we 

talk about today. 

Mr. FRANK of Massachusetts. 

Madam Speaker, I yield to the gentleman from Illinois (Mr. DAVIS) for 

the purpose of making a unanimous 

consent request. 

(Mr. DAVIS of Illinois asked and was 

given permission to revise and extend 

his remarks.) 

Mr. DAVIS of Illinois. Madam Speaker, I rise in favor of the Senate amendments. 

I rise in support of the bailout proposal before us, and I do not voice my support without 

some trepidation. However, I feel that the 

state of our economy is such that we have no 

logical and prudent choice except to act and 

to do so now. 

Like many people across America, I am not 

happy about using public money to benefit the 

robber barons on Wall Street. Therefore, I am 

pleased to see the high level of independent 

oversight contained in this package. I know 

that many people are saying that there is no 

real help for home owners, for people facing 

foreclosure, and for those who have already 

lost their homes and/or their life savings. 

Therefore, I am pleased to note that this package provides for loan modifications which 

state concretely that when: 

1. The government owns the entire loan. 

2. The Secretary of the Treasury and other 

agencies [FDIC, Federal Reserve, FHFA, 

GSE’s] must: 

A. coordinate efforts to gain ownership and 

control. 

B. create a Government-wide plan to maximize loan modifications. 

I. GOVERNMENT HAS A PARTIAL INTEREST

The Secretary must: 

1. Work with services to modify loans under 

Hope for Homeowners programs now 

strengthened to: (a) Allow homeowners to refinance before reset, (b) provide flexibility on 


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loan-to value-ration, and (c) speed up waivers 

for second mortgage holders. 

2. The Secretary must also fund support to 

services to ensure the ability to do loan modifications, i.e., loans to cover capital advances. 

II. GOVERNMENT HAS NO OWNERSHIP INTEREST

1. Will offer loan guarantees to induce mortgage holders to make substantial loan modifications. 

2. Applies to loans that may not be eligible 

for other Government refinancing programs. 

III. TENANT PROTECTIONS

1. The Secretary where permissible shall 

permit bona-fide tenants current in their rent to 

remain in their homes. 

2. The interagency plan for maximizing loan 

modifications must include protecting Federal, 

State, and local rental subsidies and ensuring 

that any loan must take into account the need 

for operating subsidies. 

Madam Speaker, I know that there has 

been and continues to be a great deal of talk 

about sweeteners. Well I use Equal, and I am 

ecstatic to note that in this package, serious 

consideration is being given to the concept of 

mental health parity. 

If there is a sweetener which would have influenced my position and my vote, this is it. 

No, this is not a perfect bill and I am sure that 

some people on Wall Street will benefit; but I 

do believe that more people on Main Street 

will feel safer and more secure that their investments are being protected, that their 

homes and insurance policies will be saved 

and their children’s futures will be more secure. I vote ‘‘yes.’’ 

Mr. FRANK of Massachusetts. I now 

yield 2 minutes to the gentleman from 

Michigan (Mr. DINGELL), the chairman 

of the Commerce Committee, very 

knowledgeable in these subjects. 

Mr. DINGELL. Madam Speaker, I 

rise in support of the legislation and 

commend the distinguished chairman 

of the committee, Mr. FRANK, and our 

Speaker, Ms. PELOSI, for taking a bad 

bill from the Bush administration and 

turning it into a bill which protects 

taxpayers, contains important oversight provisions and ensures that there 

will be proper control of pay and no 

golden parachutes for executives whose 

recklessness has contributed to this 

crisis. Inaction is not an option here. 

I wish to commend the gentleman 

from Massachusetts for the extraordinary job he has done, and I would 

like to engage him in a brief colloquy. 

Mr. Chairman, domestic automobile 

manufacturers face the most difficult 

conditions they have faced in decades. 

We need to do something to help 

unfreeze the credit markets for that industry, as well as all others. 

As I read the legislation, the Secretary has authority to purchase from 

a motor vehicle finance company traditional car loans and mortgage-related 

papers such as home equity loans used 

to purchase a car or truck. Is that interpretation correct? 

Mr. FRANK of Massachusetts. If the 

gentleman will yield, yes, it is. And I 

believe, as he and I have discussed, 

that the danger to the purchase of 

automobiles is one of the great ones 

that we face here, and it is an important reason for moving this bill. Yes, I 

very much agree with what he just 

said. 

Mr. DINGELL. I want to thank the 

gentleman, and I also want to point 

out one additional point of clarification, that if the Federal Reserve Board 

would use the authority it has to address extraordinary circumstances in 

credit markets, finance companies, 

particularly motor vehicle finance 

companies, would have access to capital that would help them to finance 

dealer floor plans and make consumer 

loans. 

Would the gentleman support a decision by the Federal Reserve to make 

funds available, as long as the companies face unusual and extraordinary 

market conditions? 

Mr. FRANK of Massachusetts. If the 

gentleman would yield, I would say absolutely, because this is one which 

would have a double positive effect: It 

would help with the credit crisis, and it 

would help one of our most important 

industries in the United States from 

facing difficulties. 

Mr. DINGELL. I want to thank the 

gentleman, and commend him for his 

extraordinary leadership in this difficult matter. No man could have done 

a better job. 

Mr. BACHUS. Madam Speaker, I 

yield 2 minutes to the gentleman from 

California (Mr. GARY G. MILLER). 

Mr. GARY G. MILLER of California. 

Madam Speaker, I rise to say I absolutely support free market principles. I 

have no interest in bailing out Wall 

Street. I think that we need to reduce 

the size of government, and I believe 

that government intervention should 

not occur. 

But this is not a normal situation. I 

have not seen anything like this. I 

wasn’t around during the Great Depression, but having read about it, I have 

not seen anything like this in our financial services industry since then. 

Banks are not lending to banks, and 

if banks don’t lend to banks, the access 

to credit in the private sector really is 

going to dry up, because if they won’t 

lend to each other, they are not going 

to want to lend to the private sector. 

Small businesses in this country are 

starting to hurt now. I spoke to a 

friend I have known for over 30 years 

who is a contractor who works for a 

very large company, and the company 

doesn’t know right now, the employees, 

that many are going to get laid off, because their lines of credit have been 

dramatically reduced, and without 

credit in this country, it is going to 

have an impact on businesses, and if 

businesses are impacted, they are not 

the bad people, they are the ones who 

provide jobs in this country. 

This bill, I will say, is not perfect, 

but there are not many options we 

have today, and the last thing we can 

afford to do is do nothing and let the 

system start to crumble. 

Small people, I say ‘‘small’’ because 

they are not business people, they are 

trying to work for a living, and I take 

the word ‘‘small’’ back, average people 

out there who are just working for a 

living and trying to make ends meet, 

supporting their families and paying 

their bills, they are the ones that are 

going to get hurt. This is not to bail 

out a bunch of fat cats on Wall Street. 

The people who made their money two 

or three years ago, they made their 

money. You can’t impact that. We can 

change things in the future to change 

the law to make sure people are protected and their investments are protected and people don’t take advantage 

of the system, and that has to happen. 

Now, this bill has grown in size, but 

much of it has to do with tax extenders. It is not pork. When you are talking about allowing child tax credits to 

continue, like we have in the past, the 

alternative minimum tax patch to continue, research and development tax 

credit, teacher expense deductions, 

those things have been added to this 

bill and the bill has absolutely grown 

in size. 

But let’s not lose the focus on what 

we are trying to do here today. The 

thing we are trying to do is stabilize 

the economy, not bail out individual 

businesses; make sure the economy can 

continue to run, people can work and 

businesses can operate. That is why I 

am rising in support of this bill and 

ask for an ‘‘aye’’ vote. 

Mr. FRANK of Massachusetts. 

Madam Speaker, the gentleman from 

Colorado (Mr. PERLMUTTER) has been 

one of the hardest working members of 

our committee, and I yield him 2 minutes. 

Mr. PERLMUTTER. Madam Speaker, 

I would like to enter into a colloquy 

with the chairman. 

Mr. Chairman, there has been a lot of 

discussion about making sure that 

businesses, homeowners and farmers 

all over this country have access to 

credit to buy inventory or finance a 

new home or purchase seed for next 

year’s crops. We have several agencies 

within the Federal Government whose 

mission it is to provide credit directly 

to Main Street, to small businesses, to 

homeowners, to farmers and to people 

all over this country. Those agencies 

include the Small Business Administration, the Federal Home Loan Banks 

and the Farm Credit Administration. 

Mr. Chairman, will those agencies be 

utilized to make sure that some of the 

funding or credit provided by this legislation will go directly to Main Street? 

Mr. FRANK of Massachusetts. If the 

gentleman will yield, the answer is yes. 

The bill fully authorizes the Secretary 

of the Treasury to do that, and I and 

others, including the gentleman from 

Colorado, will be working to make sure 

that he does, and I have every intention to believe that they intend to. 

Mr. BACHUS. Madam Speaker, I 

yield 2 minutes to the gentleman from 

Connecticut (Mr. SHAYS). 

Mr. SHAYS. There aren’t many times 

we get a second chance to do the right 

thing. This is the kind of vote our constituents sent us to make on their behalf. It is a legacy vote, one of the 


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most important votes we will ever cast, 

a vote we will carry with us the rest of 

our lives. 

The majority of my constituents 

have voiced opposition to this bill, but 

the fact is, the financial markets lost 

$1.2 trillion in one day when we failed 

to act Monday afternoon. Some of that 

has been restored, but we are witnessing the possibility of our economy 

coming to a grinding halt. 

I don’t intend to play Russian roulette with our economy, or my constituents, which is why I voted for this 

bill when it came before us on Monday, 

and why I will vote for it again today. 

Many of us on both sides of the aisle 

agree this is not a perfect bill. In fact, 

some of my financially savvy constituents have educated me about other 

ways we could intervene. 

The bottom line is this legislation is 

a short-term solution to address a 

longer-term problem. Those of us back 

next Congress, and I make no assumption about my own election, truly have 

our work cut out for us. 

This bill is for Main Street. It is for 

college and retirement savings and the 

value of homes. It is for access to car 

loans, student loans and mortgages. It 

is the ability of small businesses to 

borrow, expand, stock shelves, meet 

short-term cash needs such as payroll, 

and invest in new plants and equipment. 

The credit market is tightening, 

strangling our economy. Liquidity has 

dried up and money is simply not getting to the individuals and businesses 

who need it. Consumers, savers and investors are losing confidence. 

I am grateful the bill before us today 

will increase deposit insurance to 

$250,000, a recommendation I had made, 

so American depositors know their 

money in their bank is safe. 

This crisis requires all of us to put 

our country first and our ideology and 

partisanship aside. We need to pass the 

Emergency Economic Stabilization Act 

and then go back home and face the 

voters. Those of us who are fortunate 

enough to return will have to come 

back, roll up our sleeves and do everything we can to help our country grow 

and our prosperity return. 

Yesterday, the president of a community 

bank wrote me: 

Congress needs to understand the consequence of money moving out of banks. 

Deposits enable banks to loan and expand 

the economy. 

Withdrawals force banks to call in loans and 

contract the economy ten-fold. 

Mr. FRANK of Massachusetts. 

Madam Speaker, I yield 1 minute to my 

colleague, the gentleman from Massachusetts (Mr. NEAL) from the Ways and 

Means Committee. 

Mr. NEAL of Massachusetts. I would 

like to thank the gentleman for yielding and I would like to ask him a question about the bill. 

It is my understanding that the bill 

is designed to give all banks, especially 

community banks, which are very important in central and western Massachusetts, and because they are heavily 

regulated don’t have any problems, regardless of size or organizational structure, ordinary tax treatment for certain holdings of Fannie Mae and 

Freddie Mac preferred stock. Banks, 

and in particular some State-chartered 

institutions, are allowed to hold such 

stock in passive investment vehicles 

where the bank is the majority investor under Federal law. 

I encourage the chairman to work 

with the Secretary of the Treasury to 

ensure that all institutions have access 

to this relief, if he agrees it is intended 

to have an expansive reach. 

Mr. FRANK of Massachusetts. If the 

gentleman will yield, I agree completely. It would be a distortion of the 

clear meaning of this provision, widely 

supported, to do anything else but, and 

we will work to make sure that happens. 

Mr. NEAL of Massachusetts. I thank 

the chairman. 

Mr. BACHUS. Madam Speaker, I 

yield 1 minute to the gentleman from 

Indiana (Mr. PENCE). 

Mr. PENCE. Madam Speaker, our Nation is confronted by a serious financial crisis. The President and Congress 

were right to act with all deliberate 

speed, and I am confident every Member of this body is motivated by the 

best interests of this country. 

It should be said that Republican 

leaders and my colleagues worked hard 

to improve this bill. They removed outrageous subsidies, and today the bank 

deposits of Americans are safer and the 

balance sheet of their local bank is 

more secure because of Republican 

leadership. 

But even with these important improvements, this legislation remains 

the largest corporate bailout in American history. It forever changes the relationship between government and the 

financial sector and passes the cost 

along to the American people. 

The sad part is, Madam Speaker, 

there are no easy answers, but there 

were alternatives. House Republicans 

offered an insurance program that 

would have required Wall Street, not 

Main Street, to pay for the cost of this 

recovery, and fast-acting tax relief to 

strengthen our economy from within. 

Teddy Roosevelt said, ‘‘An American 

must face life with resolute courage, 

win victory if he can and accept defeat 

if he must, without seeking to place on 

his fellow man a responsibility which is 

not theirs.’’ 

With this bill, we place upon the 

American public a responsibility which 

is not theirs, bailing out financial institutions after they made irresponsible decisions. This we should not do. 

I urge my colleagues to join me in 

opposing this legislation. 

Mr. FRANK of Massachusetts. I now 

yield 1 minute to the Chair of the Capital Markets Subcommittee, who has 

been very carefully watching this situation, the gentleman from Pennsylvania (Mr. KANJORSKI). 

b 1200 

Mr. KANJORSKI. Madam Speaker, I 

congratulate the chairman on a job 

well done. 

I guess nobody is happy with this 

bill. I am less happy with this bill as it 

has come back from the Senate. But 

the reality is, we are facing an abyss, 

and it is important that this House of 

Representatives act not as a composite 

of Republicans or Democrats but as 

Americans. 

America is watching us now. The 

world is watching America now. It is 

up to us to do the job, and this bill is 

the best at this time that we can do. I 

urge my colleagues on both sides of the 

aisle to gather today and get the internal courage to make a vote for what is 

good for America and not what is necessarily good for us individually or for 

our party as a single party. This is a 

vote for America. 

Mr. BACHUS. Madam Speaker, I 

yield 2 minutes to the gentleman from 

Wisconsin (Mr. RYAN). 

Mr. RYAN of Wisconsin. Madam 

Speaker, over the last few days we 

have heard about LIBOR, commercial 

papers, spreads, swaps, about the credit 

markets. This chart shows you just 

how bad things are in the credit markets. But what does any of this stuff 

mean? What is credit? Credit is confidence, it is credibility, trustworthiness in someone’s ability to pay. 

Right now, our system is plagued 

with fear. There is no confidence. 

There is no trust. Lenders don’t trust 

borrowers; sellers don’t trust buyers. 

This bill, as flawed as it is, goes right 

to this issue. If it works, it stops that 

fear from spreading into outright 

panic. 

Will this bill prevent a recession? No, 

I don’t think it will. But it will help us 

make sure that a recession is short and 

shallow, and not deep and long. 

I know one thing for sure. Doing 

nothing is the worst thing we could do. 

This is one of those once-in-a-century 

kind of crises, and we need to act to 

prevent it from becoming a once-in-acentury kind of a recession. In Wisconsin, we are already beginning to see 

the beginning of this. We are already 

starting to see the job losses. 

For me, this is a conscience vote. We 

of all people understand public opinion. 

We know it is not popular. But we see 

that gathering storm, we see it out 

there on the horizon. Our constituents 

may be outside mowing their lawns and 

looking up and seeing a sunny sky, but 

we see those storm clouds developing. 

And I want to know for sure that when 

the choice was made, I had made the 

decision to prevent that storm from 

gathering, to prevent those jobs from 

being lost, to protect our constituents 

from losing their retirement funds, 

from not getting that home loan, that 

car loan. 

I want to make sure that what we do 

here today snaps that fear out of the 

market and preserves those jobs, and 

makes sure that the bumpy road we are 

going to have is not nearly as bumpy 


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as it would otherwise be if this bill 

fails. 

Mr. FRANK of Massachusetts. I now 

yield 1 minute to the chairman of the 

Appropriations Committee, the gentleman from Wisconsin (Mr. OBEY). 

Mr. OBEY. Madam Speaker, I agree 

with my colleague from Wisconsin 

about once a century, and this is that 

occasion. 

For all of my 39 years in Congress, I 

have fought against trickle-down economics and the mindless deregulation 

that has produced today’s economic 

crisis. I opposed the repeal of GlassStiegel, which has made the problem so 

much worse. 

The boy geniuses on Wall Street do 

not deserve to be rescued. But if they 

fall off their perches at the top of the 

economic ladder, they will crush innocent people far down that ladder on 

lower rungs. 

Sometimes in life, if we are responsible, we have to clean up not just the 

messes that we have created but the 

messes that others have created as 

well. This is one of those times. This 

package will not prevent a severe recession. We are going to see that, but it 

can buy us more time to make more 

basic changes that will stand this 

country in good stead over the long 

haul, and I urge its adoption. 

Mr. BACHUS. Madam Speaker, I 

yield 2 minutes to the gentleman from 

Ohio (Mr. LATOURETTE). 

Mr. LATOURETTE. I thank the gentleman for yielding. 

There is something in life called the 

Hobson’s choice. And I never thought I 

would be here, and I think DAVE HOBSON who is retiring probably thinks it 

is named after him, but it is not. And 

what we are being told today is that we 

either give $700 billion to the Secretary 

of the Treasury because he says that is 

what is needed, in a plan that is untested, unworked; or, and if we don’t 

just write this check, we are being told 

that all of our constituents are going 

to lose their life savings, their 401(k)s, 

their retirements. That is one hell of a 

choice, Madam Speaker. 

And I come today with a big problem. 

The big problem is, where did the number come from? The number, Forbes 

Magazine last week, Treasury spokeswoman: It is not based on any data 

point. We just wanted to choose a really large number. Well, you know what: 

$700 billion is a really large number. 

Last night we took an amendment to 

the Rules Committee, asked them to 

make it in order to stop this process, 

slow it down by a day. The vote was 8– 

4, along party lines. Eight Democratic 

members of the Rules Committee, who 

represent about 4.8 million people, told 

305 million Americans we couldn’t have 

a vote on that or anything else, including measures that are important to 

Democrats, such as bankruptcy and 

things of that nature. 

This bill left the House and it went 

over to the Senate, and they larded it 

up: $192 million for rum. I guess we got 

the pirate vote in November. $100 million for NASCAR. $81 million for Hollywood. And my favorite, $2 million for 

wooden arrows for children. Now, I 

want children to have wooden arrows, 

but it doesn’t belong in this bill. 

And I have got to tell you, as a Republican I have never seen—I am finishing my 14th year—what just happened on the last vote. And we all 

know that folks back home don’t pay 

attention to the rules. Twenty Republicans voted for the Democratic rule. If 

those 20 Republicans had not voted for 

that rule, we could have had an amendment on the floor, saving America $450 

billion, which, as our friends like to 

tell us, is 4 years in Iraq, and we could 

have cut the pork. 

As JOHN MCCAIN says, and sadly, for 

those 20 Republicans and those who 

aided and abetted them: we will make 

you famous, and you shall know their 

names. Shame on you. 

Mr. FRANK of Massachusetts. 

Madam Speaker, I would note that one 

of those whose names would be listed is 

JOHN MCCAIN, who voted for this bill in 

the Senate. So Mr. MCCAIN’s name 

would be at the head of that list of the 

20. 

I now yield 1 minute to the gentleman from New York (Mr. NADLER). 

Mr. NADLER. Madam Speaker, I 

voted against the Iraq war resolution, 

the PATRIOT Act, the FISA Act 

amendments; and I led the opposition 

to the bankruptcy bill just a few years 

ago, in each case because I thought we 

were being railroaded into unwise actions through the use of fear tactics. 

But I do not believe that to be the case 

now. Now we face a very real crisis. 

The credit markets are shutting 

down. People will not be able to get car 

loans, loans for store inventories. 

There will be thousands of bank failures, millions of job losses. I believe we 

stand now literally on the brink of the 

abyss, and that we haven’t seen such a 

situation since 1931. 

This is in many ways a weak bill. 

There should have been far more help 

for people facing foreclosures. There 

should have been bankruptcy reforms. 

There should have been real revenues 

to pay for it. There should have been a 

real stimulus to the economy. But this 

is the only bill that could be agreed 

upon now. 

We are not sure this bill will solve 

the crisis, but it might. It will buy us 

time for a better solution. As between 

a certainty of catastrophe and a possibility of averting that catastrophe, I 

will vote for the possibility of averting 

the catastrophe. I urge everyone else to 

do so. 

Mr. BACHUS. Madam Speaker, I 

yield 2 minutes to the gentleman from 

Texas (Mr. BARTON), who is ranking 

member of the Energy and Commerce 

Committee. 

(Mr. BARTON of Texas asked and 

was given permission to revise and extend his remarks.) 

Mr. BARTON of Texas. I want to 

thank the gentleman from Alabama. 

Madam Speaker, I rise in opposition 

to this bill. And I am not opposed to it 

for political reasons, I am not opposed 

to it for partisan reasons, I am not opposed to it for emotional reasons. I am 

opposed to it because fundamentally it 

doesn’t address the problem that needs 

to be addressed. We have a crisis in our 

financial markets, we have a crisis of 

confidence in our credit markets, and 

this bill only indirectly addresses those 

problems. 

First and foremost, from the taxpayers’ standpoint, it is not paid for. 

The underlying bill is going to raise 

the national debt ceiling $1.5 trillion. 

That is $1,500 billion. If you add the tax 

extender package that came over from 

the Senate, you end up with a price tag 

of approximately $2 trillion. Absolutely 

nothing in the bill addresses how to 

pay for those $2 trillion that puts taxpayers at risk. Really, for that one reason we should vote against the bill. 

We have talked a lot about the crisis 

in the credit markets. My good friend 

from Wisconsin (Mr. RYAN) just put up 

a chart on the LIBOR rate, which is the 

overnight interbank loan rate from 

London. It is at 4 percent. It was at 4.5 

percent 1 year ago. It is within its normal range. The spread has gone up between the overnight Treasury rate and 

the LIBOR rate, but that is because the 

Treasury rate has gone down to 2 percent. 

An auto loan that my good friend was 

talking about, the distinguished Financial Services chairman, the auto rate 

loan right now is 6.5 percent, about 

what it was a year ago. The credit markets are working, but there are some 

people holding back credit, hoping that 

the taxpayers will bail them out. 

Fundamentally, we need to address 

the American economy. This bill 

doesn’t do that. You want the value of 

the dollar to go up? How about cutting 

spending and lowering the deficit? You 

want to do something on auto sales? 

How about produce more domestic energy to bring gasoline prices down. 

Madam Speaker, this is not the bill 

to address the problem. I hope we will 

vote ‘‘no.’’ 

Mr. FRANK of Massachusetts. 

Madam Speaker, I am glad to yield 2 

minutes to our newest member, the 

gentlewoman from Maryland (Ms. EDWARDS). 

Ms. EDWARDS of Maryland. Madam 

Speaker, if I might make an inquiry of 

the gentleman from Massachusetts. 

In my reading of the bill, I am trying 

to understand whether it is your belief 

that the Treasury has the authority 

under this legislation to use some portion of that $700 billion to deal directly 

with homeowners, specifically with 

homeowners facing foreclosure. And 

could you clarify for me the circumstances under which the Treasury 

has that authority when it wholly owns 

the mortgage, and when that mortgage 

is being serviced by loan servicing centers? 

Mr. FRANK of Massachusetts. If the 

gentlewoman will yield, the answer is, 

absolutely. And I can tell you that I 

have spoken to the Treasury, to the 


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Secretary, to tell him that it is very 

important; that many Members will be 

voting for this bill only with the understanding that he will use that authority. And I believe he accepts that fact 

and will act on it. 

Ms. EDWARDS of Maryland. I thank 

the gentleman for clarifying that. 

In that case, and hearing that clarification, I rise today in support of H.R. 

1424, the Emergency Economic Stabilization Act. I believe that we are 

just standing at a really important 

time in our economy. And while I voted 

‘‘no’’ in opposition on Monday for the 

earlier package, hearing your clarification and the authority of the Secretary 

of Treasury to deal directly with addressing foreclosures that many people 

in my community are facing and across 

this country, I stand in support of the 

bill. I know that it is not enough, but 

I realize that it is important for us to 

move forward and to create the circumstances, whether it is bankruptcy 

or directly dealing with homeowners, 

that we will be able to help people save 

their homes. 

Mr. FRANK of Massachusetts. If the 

gentlewoman would yield again, I 

thank her for prodding us because 

thanks in part to her efforts, this is 

going to be the best we can do. And I 

appreciate that. 

Mr. BACHUS. Madam Speaker, I 

yield 11⁄2 minutes to the gentlewoman 

from Colorado (Mrs. MUSGRAVE). 

Mrs. MUSGRAVE. I thank the gentleman for his time. 

Some things have changed in this 

bill, but taxpayers will still be picking 

up the tab for Wall Street’s party. 

I was proud to stand together with a 

group of women from both sides of the 

aisle and ask for real reform, not a 

temporary fix. We still have no fundamental reform to Fannie and Freddie, 

nothing that resembles the amendments that I supported in 2005 and 2007 

that would have avoided this debacle in 

the first place. 

Instead of suspending mark-to-market, we are going to study the possibility of it. Instead of requiring Wall 

Street to purchase insurance on their 

mortgage-backed securities and work 

out of the problem, we are still bailing 

them out. 

I am voting against this today because it is not the best bill, it is the 

quickest bill. Taxpayers for generations will pay for our haste, and there 

is no guarantee that they will ever see 

the benefits. We should not reward bad 

behavior. Wall Street won’t have to 

learn its lesson, and we are not doing 

anything to keep them from running 

our economy into the ground again. 

I urge my colleagues to join me in 

voting ‘‘no’’ on this bill. 

Mr. FRANK of Massachusetts. I yield 

for a unanimous consent request to the 

gentleman from Texas, a member of 

our committee, very much concerned 

with improving economic literacy, Mr. 

HINOJOSA. 

(Mr. HINOJOSA asked and was given 

permission to revise and extend his remarks.) 

Mr. HINOJOSA. Madam Speaker, I 

rise in support of H.R. 1424, the Senate 

amendment to the Emergency Economic Stabilization Act of 2008. I will 

vote ‘‘yes.’’ 

No one wants to be voting on this legislation 

today because none of us want to be in the 

horrific economic situation in which our country finds itself. The greed and lack of regulatory oversight that got us into this mess 

should never have happened. However, today 

we have to deal with the practical economic 

reality. Inaction is not an option. 

This bill is not about bailing out Wall Street. 

It is about making sure that average Americans can continue to get credit for their basic 

needs like housing, students loans, and automobiles. It is about saving pensions for our retirees and making sure that the small businesses that are the engines of growth in my 

district can continue to get the credit they 

need to operate. 

This bill is not perfect and doesn’t have everything I would like. However, the changes 

that have been made to the original proposal 

by Secretary Paulson address many of the 

concerns of my constituents. The changes will 

protect taxpayers, keep people in their homes 

and rein in huge CEO salaries. 

It will allow the American people to see 

where this money is being spent and what is 

being purchased. Many of the tax extenders 

that the Senate added are needed to keep our 

country competitive and bring tax relief to average Americans. 

PELL GRANT

The Continuing Resolution included $2.5 

billion to address shortfalls and projected 

cost increases in the Pell Grant Program. 

$750 million was for the FY 2007 Pell shortfall. 

$1.8 billion was to cover anticipated cost 

increases for FY 2009. 

Still needed are $2 billion to address the 

anticipated shortfall for 2008. This has to be 

addressed by Fiscal Year 2010. Additionally, 

there another $1 billion may be needed for 

2009, which would have to be addressed by 

2011. 

STUDENT LOANS

The frozen credit markets have affected 

the ability of student loans providers to 

raise capital to offer student loans. 

The Ensuring Continued Access to Federal 

Student Loans Act (H.R. 5715) was extended 

through 2010. This legislation gives the Secretary of Education the authority to purchase federal student loans from lenders, 

thereby injecting liquidity into the market. 

The $700 billion rescue package gives the 

Secretary of Treasury the authority to purchase troubled assets that the Secretary determines necessary for the health of the 

economy. Freeing up the credit markets will 

help lenders, including student loan lenders, 

in accessing the capital necessary to make 

college loans. 

I urge my colleagues to support this bill 

today so that we can bring immediate stability 

to our markets, our credit system and the 

economy as a whole. 

Mr. FRANK of Massachusetts. I now 

yield 1 minute to the gentlewoman 

from Ohio (Ms. KAPTUR), a former 

member of the committee who deserted 

us for better things. 

b 1215 

Ms. KAPTUR. Madam Speaker, Mr. 

Chairman, and dear colleagues, do you 

feel like a herd of bulls and bears are 

rushing at you? They are. The question 

is will you stand up to them? 

This approach, their approach, will 

not work. It won’t solve the credit 

crunch nor the mortgage foreclosure 

challenge. 

Wall Street speculators, now the 

major donors in Federal campaigns, 

have used their considerable influence 

inside the halls of government, especially at the U.S. Treasury, to open up 

the piggy bank. Meanwhile, taxpayers 

across Main Street, who will pay the 

bill, will find it has no effect on 

bettering their lives as unemployment 

increases, foreclosures increase, and 

the squeeze on the middle class increases. The Treasury plan throws an 

ungodly amount at Wall Street. Yet all 

of our Congressional committees but 

for one were relieved of their duties as 

regular order was dispensed with for a 

very hasty action. 

We should do what we did back in the 

’70s, ’80s and ’90s and use the powers of 

the Federal Deposit Insurance Corporation and the Securities and Exchange 

Commission to address the credit 

crunch without costing the taxpayers a 

penny. This bill is just an end run 

around the American people 3 weeks 

before an election while this Congress 

is skittish and as Wall Street’s investment houses conduct their biggest 

heist of the century from the U.S. 

Treasury and our U.S. taxpayers. 

Pray for our Republic. She is being 

placed in uncaring and very greedy 

hands. 

Vote ‘‘no’’ to get a real deal, not a 

fast deal. 

I thank you, Mr. Chairman, for yielding me 1 minute in this very important 

debate. 

Mr. BACHUS. I yield 11⁄2 minutes to 

the gentlewoman from Florida (Ms. 

GINNY BROWN-WAITE). 

Ms. GINNY BROWN-WAITE of Florida. Madam Speaker, earlier this week 

on Monday, America hated this bill at 

$700 billion. Today they despise it at 

$850 billion. 

On Monday, apparently a majority in 

the House agreed with the callers and 

voted it down on a bipartisan basis. 

Yesterday I was very proud of the efforts of Representative SPENCER BACHUS who tried to bring to the floor a bill 

that would have slowed down this process, would have been something that I 

think the American public could have 

understood and fully supported. 

However, what we have before us 

today is the bill that the Senate sent 

to us. They sent us the same exact bill 

that the House rejected, but they added 

another $150 billion. It still bails out 

foreign banks and raises the debt limit 

$1 trillion. That is what people believe 

is business as usual here in Washington. The bill still does not address 

the issues of fear and diminished financial capacity. 

Democrat Senator BILL NELSON from 

my home State of Florida actually 

voted against this bill in the Senate. 

Like Senator NELSON, I wanted to see 

an extension of the deductibility of 


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State sales tax and an AMT patch, but 

that should have been in a separate 

bill. Instead it was added to this piece 

of legislation. 

Again, this is not a bill that I believe 

that I can vote for on behalf of my constituents. I said before that a vote for 

this bill is a vote to ratified business as 

usual in Washington. The added sweeteners and earmarks were only to get 

more votes. If you didn’t take my word 

on that then, please look at the bill 

now and you will have proof. 

Mr. FRANK of Massachusetts. I yield 

1 minute to a member of the committee, the gentlewoman from Wisconsin (Ms. MOORE). 

Ms. MOORE of Wisconsin. Madam 

Speaker, I am angry. I am angry that 

the Nation has been put in this position by clever financial wizards on Wall 

Street who operated without the necessary regulations and oversight for 

the past 8 years. 

I share the sentiments of Meyer 

Mishkin who during the crash of 1929 

owned a shop in New York and sold silk 

shirts to working men. He said then 

that it ‘‘served those rich scoundrels 

right.’’ Of course, his business went 

under a year later. 

Fast forward to 2008. Meyer 

Mishkin’s grandson, an economist and 

former Fed Reserve Board member, 

tells us: ‘‘To do nothing right now is to 

do what was done during the Great Depression.’’ 

Madam Speaker, this is not about 

Rolex watches and Wall Street, it is 

about watching out for the workers, 

families, small businesses and retirees 

in my district who will be up against 

the wall as a result of this credit crisis 

as it spreads to Main Street. 

Madam Speaker, I will not stand by 

and do nothing while this crash spreads 

to my constituents. 

Mr. BACHUS. Madam Speaker, I 

yield 2 minutes to the gentleman from 

Texas (Mr. PAUL). 

(Mr. PAUL asked and was given permission to revise and extend his remarks.) 

Mr. PAUL. Madam Speaker, I rise in 

strong opposition to this bill because it 

won’t solve our problem. It is said that 

we are in a liquidity crisis and a credit 

crunch and all we need is more credit. 

The Federal Reserve has already injected over a trillion dollars worth of 

credit and it doesn’t seem to have 

helped a whole lot. Injecting another 

600 to $700 billion will not solve the 

problem. 

I think one of the reasons why we are 

floundering around here is that we 

don’t understand the problem because 

instead of it being a credit crunch, I 

think it is a lot more serious than 

that. That is, I think what is happening in the market today is signaling 

something much more draconian because it is probably telling us that our 

government is insolvent, that we are 

on the verge of bankruptcy and big 

things are starting to happen. And we 

don’t quite understand it, so we fall 

back on the old cliches that what we 

need is more appropriations, more 

spending, more debt, and more credit 

in the market. That means more inflation by the Federal Reserve system. 

And yet, that is what caused the trouble. 

We want to do this it is said to prevent the recession or depression because that is unbearable. But the truth 

is you should have thought about that 

10 or 15 years ago because the financial 

bubble created by the excess of credit 

and the lowering of the interest rate is 

the cause of the recession. The recession is a demand. It is a must; you 

can’t avoid it. Yes, it has been papered 

over several times over the last several 

decades, but that just made the bubble 

bigger. 

The message is now you can’t paper 

it over any longer. So the recession 

and/or depression will come. 

My sincere conviction is that by 

doing more mischief and not allowing 

markets to adjust, debt to be liquidated, you’re going to guarantee a 

depression. It is going to be prolonged. 

The agony is going to be there for a lot 

longer than if you allow markets to adjust. Liquidation of debt. Let the bankruptcy occur, let the good assets come 

up, and let it react. 

This idea that there is not enough 

regulation is completely wrong. There 

is too much regulation, and lack of regulation of the Federal Reserve system 

and the exchange of stabilization. 

Mr. FRANK of Massachusetts. I now 

yield 2 minutes to the gentlewoman 

from California (Ms. WATERS), the 

Chair of the Housing Subcommittee, 

who has done as much as anyone in 

this House to try to stave off the foreclosure crisis. 

Ms. WATERS. First I would like to 

thank Chairman FRANK for the extraordinary work he has put into making sure we address this financial crisis, and do it in a way that will certainly protect our homeowners who are 

at risk. 

There are a number of Members who 

have been worried about whether or 

not this bill is going to protect our 

citizens on Main Street, as they refer 

to it. I worked with Chairman FRANK

and others on the modifying of loans 

portions of this bill. We have three 

ways by which these loans can be modified. People forget that when we buy up 

this toxic paper, when we buy up these 

nonperforming loans, we are in charge. 

Not only can we write down the principal, we can write down the interest. 

We can do the kind of loan modification that we have been urging the Hope 

Now Alliance to get done. 

In addition to that, we are coordinating the work of all of the agencies 

that own paper, whether it is the FDIC 

or either of the GSEs, Fannie or 

Freddie. Remember, we own them now. 

We will be able to coordinate and set 

some standards and be able to do again 

the kind of loan modification that 

takes into consideration whatever the 

circumstances are of the particular 

homeowner. And in some cases, we will 

provide a loan guarantee. When we go 

in and ask some of the institutions to 

do loan modifications on entire packages, those that fall out and they cannot do the loan modifications on that 

work very well, we will provide the 

loan guarantees for them to do so. 

So for anybody who says there is 

nothing in this for homeowners, they 

are incorrect. Read the bill. The facts 

are there. This is the strongest part of 

this legislation, protecting homeowners and doing the kind of loan 

modifications that will keep people in 

their homes who have these adjustable 

rate mortgages even before they reset. 

Mr. BACHUS. Madam Speaker, I 

yield 11⁄2 minutes to the gentleman 

from California (Mr. DANIEL E. LUNGREN). 

Mr. DANIEL E. LUNGREN of California. Madam Speaker, in a former 

life as Attorney General of California, I 

was required to sign off on any of the 

debt instruments that went to market 

to make sure that they followed the 

laws and the Constitution of the State 

of California. Never did we have difficulty floating short-term loans in 

California in anticipation of the income revenues that would be coming 

in. 

However, just last night the governor 

of the State of California wrote a letter 

to the Secretary of the Treasury indicating that California may very well 

have difficulty floating $7 billion in 

short-term loans to cover expenses. I 

can’t recall when that ever happened 

before. The reason is the squeeze on the 

credit market. That ought to bring us 

some pause here. 

But more importantly, over the last 2 

days I was home in my district and I 

talked with people involved with hospitals, banks, automobile dealers, simple folks, my 91-year-old mother whose 

entire future is wrapped up in the investments my dad left her. She has no 

pension. She has what my dad left her. 

When you see the volatility of the market and the uncertainty out there, that 

spreads fear among our folks back 

home. 

This is not a perfect bill. Certainly I 

don’t ever argue this is a perfect bill, 

but it is the best we have right now. I 

would ask my colleagues to please support this bill. 

Those of you talking about the additional cost on the Senate side, the largest additional cost is fixing the AMT. 

It is the first time I have heard some of 

the people on my side of the aisle refer 

to that as a cost. That is giving taxpayers the kind of relief they deserve 

and preventing them from being put 

into higher tax brackets unnecessarily. 

Mr. FRANK of Massachusetts. 

Madam Speaker, I yield 21⁄2 minutes to 

an alumna of our committee who has 

been a dedicated defender of working 

class people, the gentlewoman from 

California (Ms. LEE). 

Ms. LEE. Madam Speaker, I thank 

the chairman for yielding me this time 

and for his tireless work. 


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I want to thank Congressman JESSE

JACKSON, Jr., for associating himself 

with my remarks this morning. 

Madam Speaker, I think we need to 

be honest about the bill before us. It is 

a bailout. We should be honest with 

how we got here: reckless deregulation 

policies and greed. We should be honest 

about the fact that we don’t know that 

this is the appropriate economic strategy. Some economists say yes; some 

economists say no. But I must be honest about the fact that I can’t afford to 

risk the consequences of inaction based 

on what I know today. 

I spoke with our California treasurer 

this week, and he assured me that people will suffer greater pain, including 

cuts to critical State-funded social 

services, county services, and schools, 

if we don’t do something to stop this 

hemorrhaging. That is why I will vote 

for this bill today. 

As a former small business owner, I 

know access to credit will make or 

break your business. Without it, people 

will lose jobs. We will not magically 

turn the economy around, reverse the 

rise in unemployment, or end this recession which we are in now. We must 

be honest about that. 

But I must err on the side of caution 

so our seniors can have some confidence that their pensions are safe. 

And I hope that we will be able to prevent this financial crisis from exacting 

an even bigger toll on the everyday 

lives of our constituents. 

Congressman JACKSON and I will continue to fight for regulatory reform 

and a direct economic stimulus package that we fought to be included in 

this bill. We must have bankruptcy reform and a moratorium on foreclosures. But I am glad to say that our 

fight has helped slow this bill down. 

Thanks to our Speaker’s leadership, we 

have a bill today to extend unemployment compensation insurance on the 

floor. That is the least we can do for 

those in need on Main Street. I urge 

the other body to take it up immediately. 

As Senator OBAMA said, there will be 

a time to punish those who set this 

fire, but now is the moment for us to 

come together and put the fire out. 

Congressman JACKSON and I join him in 

that effort and we will vote for this 

flawed but necessary legislation. It is a 

very difficult vote for both of us, but I 

must do everything I can to stop this 

bleeding in the lives of people living 

from paycheck to paycheck, that is if 

they have a paycheck. 

I am really confident that this is the 

right vote, but I know that it is not the 

popular vote. Thank you, Mr. Chairman. I have to thank Congresswoman 

MAXINE WATERS for her leadership in 

trying to make some sense out of this 

foreclosure mess. Hopefully we will 

stop the bleeding, but I know that we 

have a lot of work to do. 

b 1230 

Mr. BACHUS. Madam Speaker, I 

yield myself 2 minutes. 

Madam Speaker, ladies and gentlemen of the House, Thomas Paine on 

December 23, 1776, said, ‘‘These are 

times that try men’s souls.’’ 

What was a problem at one time on 

Wall Street has become a problem for 

Main Street. What was a problem for 

this Congress and financial experts has 

become a problem for America. 

As late as last night, Mr. 

LATOURETTE, Mr. LATHAM, and I were 

at the Rules Committee for 21⁄2 minutes 

urging the Rules Committee to only 

appropriate $250 billion, an enormous 

amount; yet they turned down our request. I want to thank my Republican 

colleagues on the Rules Committee for 

voting ‘‘yes.’’ 

Our amendment said we would come 

back in November and we would give 

careful consideration to this. And if we 

needed more, if the program was working—and believe you me, it’s been announced that it won’t start for another 

15 days whether we pass this bill today 

or tomorrow or the day after. And we 

could have all judged by then how it 

was working. 

But that’s past. And today is today. 

And I will be voting today for this bill 

because it’s about the pensioner and 

his retirement check, it’s about the 

small businessman and his ability to 

buy materials or make a payroll, and 

it’s about that student, either in school 

or having to leave school, or that student preparing for school. 

Whatever the problem was before, 

however you disagree with certain 

parts of this bill, our only choice is 

‘‘yes’’ or ‘‘no.’’ And when a problem becomes an American problem, and it is, 

then it is time for Congress to take decisive action. 

I will be voting ‘‘yes’’ on this bill; 

not a perfect bill, but a bill that I am 

not willing to pass up because I’m not 

willing to risk capitalism and a decline 

into socialism if our financial markets 

and our economy collapses. 

Mr. FRANK of Massachusetts. 

Madam Speaker, no Member of Congress in my memory has worked harder 

and more constructively to improve 

and pass a bill than the majority whip 

has. 

I am pleased to yield 2 minutes to the 

gentleman from South Carolina (Mr. 

CLYBURN). 

Mr. CLYBURN. Madam Speaker, I 

thank the chairman for yielding me 

the time and thank him so much for 

his hard work on this legislation. 

Madam Speaker, I rise today in 

strong support of the Emergency Economic Stabilization Act of 2008 and believe this bill must be enacted as soon 

as possible to stop our country from 

falling deeper into recession. 

Today, Madam Speaker, we received 

information that our economy has lost 

159,000 additional jobs. This brings the 

total job loss for this year to 760,000. 

But Madam Speaker, jobs are not the 

only thing Americans across this country are losing. They are losing their 

hold on the American Dream. That 

dream, Madam Speaker, is economic 

mobility and homeownership. Nowhere 

is this problem more acute than in minority communities. 

Madam Speaker, this is not only 

about Wall Street. It’s about Broad 

Street and Walker Street; it’s about 

grocery stores, beauty shops, and barber shops. It’s about community banks 

and auto dealerships. 

Madam Speaker, the minority communities are hemorrhaging: jobs, 

homes, income, and most importantly 

credit. Consider this fact: African 

Americans received 35 percent of the 

subprime purchase loans issued from 

2004 to 2007. Of these loans, 62 percent 

of them were reset to a higher rate by 

the end of 2008. Many of these homes’ 

values have dropped by 25 percent. Access to refinancing credit is no longer 

available, and their pension plans have 

lost substantial value. 

These dynamics are devastating to 

minority communities, and I believe 

that we must pass this legislation in 

order to stop the hemorrhaging. 

Mr. BACHUS. Madam Speaker, I am 

proud at this time to yield 1 minute to 

my friend from Mississippi (Mr. PICKERING), who will express not only his 

views but mine. 

Mr. PICKERING. Madam Speaker, 

this is my last speech, will be my last 

vote. For all of us in this institution, it 

will be a legacy vote. 

I came to Washington almost 20 

years ago and worked in the first Bush 

administration as communism collapsed. I worked to see those countries, 

the Soviet Bloc, move to free markets 

and democracy. This, my last vote, is 

to preserve those things that I believe 

in most: a free market capitalist system, that if we can intervene now and 

stabilize what we preserve and keep the 

freedoms of our economy and the 

strength of our Nation from going into 

decline so that our fiscal house here 

doesn’t worsen, so that our families at 

home aren’t hurt more badly. 

This afternoon I will cast this vote, 

and then I will leave, and I will go 

home and I will watch my sons play 

high school football. 

I hope that it is with a great sense of 

pride in this institution that when a 

crisis came and our character was tested, we didn’t do what was easy, but we 

did what was right—to save what we 

care about most deeply. 

Mr. FRANK of Massachusetts. 

Madam Speaker, I think I have the 

honor of speaking on behalf of the body 

in wishing our friend well. 

I now yield for a unanimous request 

consent to the gentleman from California (Mr. BACA). 

(Mr. BACA asked and was given permission to revise and extend his remarks.) 

Mr. BACA. Mr. Chairman, thank you 

for all of the work that you have done. 

I’m angered, frustrated, and sad, but I 

believe that we’ve got to do the responsible thing. Therefore, I’m going to 

support the bill. 

Madam Speaker, today, I find myself frustrated, angry and sad. Predatory lending and 


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greed are at the root of the current financial 

storm our Nation is facing. I voted against the 

bailout bill on Monday because I believe it did 

not do enough to provide direct relief to families that are facing foreclosure, and have been 

victimized by these practices. 

Over the past few days, I have fought vigorously to include stronger foreclosure mitigation 

provisions in a revised bill. Many of my colleagues joined me in an effort to include language from my bill H.R. 4135, The Family 

Foreclosure Rescue Corporation Act, in any 

revised rescue plan. This language would 

keep more families in their homes. 

While I believe today’s bill still does not do 

enough to protect struggling homeowners, I 

am pleased that it does include critical improvements in the areas of oversight and accountability. This bill does a better job of protecting America’s taxpayers, and ensuring 

their investment is not squandered. 

But sadly, our economy is now in turmoil. 

We find ourselves in a state of quicksand, and 

we are sinking fast. We cannot delay action 

any longer. I will vote for this bill today. Not 

because it solves all our problems, but because I do not have a choice. 

If the credit crunch is allowed to continue, 

the consequences for the Inland Empire will 

be disastrous. In my district, too many families 

are facing the possibility of being homeless. 

Credit unions and big banks have limited their 

lending, and as a result families are at a 

greater risk of losing their homes, their jobs 

and their opportunities for success. 

Car loans have dried up, and some dealerships have closed and been forced to layoff 

workers. Student loan companies across the 

Nation have shut down or stopped participating in Federal student aid programs. 

And now, to make matters worse, we have 

received word that California needs a $7 billion emergency loan from the Government, in 

order to keep funding day-to-day operations. 

The consequences of doing nothing are too 

dire to imagine. 

Without immediate Federal action, California 

will be unable to sell voter-approved bonds for 

highway construction, schools, housing or 

water projects. And because of the extreme 

delay in passing the state budget, California’s 

cash reserves would be exhausted by the end 

of October without this loan. This means that 

payments for teachers’ salaries, nursing 

homes, law enforcement and every other 

State-funded service would stop or be significantly delayed. This must not be allowed to 

happen. 

Ultimately, today’s bill is about providing 

confidence in our markets and stabilizing our 

economy. We must do this if we are to protect 

our jobs at home, stop further outsourcing, 

and ensure our society has access to the 

credit it needs to run. 

The market dropped on Monday because of 

a lack of confidence. Because of predatory 

lending and the complete lack of regulation we 

have seen from the Bush administration in the 

last 8 years, Wall Street has been allowed to 

run amok—and because of that the American 

people have suffered. 

I am voting for this bill today to restore that 

confidence. But we must come back and work 

on a more comprehensive package that will 

provide the assistance America’s working families need to survive in these difficult economic 

times. I have received a commitment from the 

House Financial Services Committee that 

hearings will be held next February to examine my bill, the Family Foreclosure Rescue 

Corporation, and move it forward in the legislative process. 

The Bush administration and the rubber 

stamp Republicans in Congress are responsible for the lack of leadership and effective 

government oversight that caused this crisis, 

but we all must work together to get America 

back on track. I am confident that with a 

change of leadership, we will stabilize our Nation’s financial markets and keep America’s 

working families safe and secure. 

Mr. FRANK of Massachusetts. 

Madam Speaker, I yield for a unanimous consent request to the gentleman 

from Pennsylvania (Mr. FATTAH). 

(Mr. FATTAH asked and was given 

permission to revise and extend his remarks.) 

Mr. FATTAH. Madam Speaker, as I 

did on Monday, I rise in support of this 

bill. What we did not do right, we will 

find the time and the votes and the 

courage to do over today. 

Mr. FRANK of Massachusetts. 

Madam Speaker, I now yield 1 minute 

to the gentlewoman from New York 

(Mrs. MALONEY), a member of the committee. 

And I will take 10 seconds to say, yes, 

I understand that this is not everything that needs to be done. We will be 

back next year to do some serious surgery on the financial structure. But at 

this point, we have the EMT function. 

There’s an emergency, and we have to 

avert serious harm. This is step one. 

Step two will be the serious work 

that we will do to prevent this from occurring. 

(Mrs. MALONEY asked and was given 

permission to revise and extend her remarks.) 

Mrs. MALONEY of New York. I 

thank the gentleman for his extraordinary leadership, and I rise to urge my 

colleagues to vote ‘‘yes’’ on the financial rescue plan. The risk of not acting 

is just too great for Americans to bear. 

Today’s grim jobless number showed 

that the problems facing Main Street 

are mounting. If we do not pass a financial rescue package today, credit 

markets may fail and working families 

and businesses will suffer. Consumers 

are the lifeblood of our economy, and 

most families need access to credit to 

make major purchases like buying a 

home, a car, or paying for college tuition. 

Without financing, families will cut 

back on spending, businesses will see 

sales plummet, our economy will weaken, and even more jobs will be lost. A 

credit freeze also means small businesses may have trouble making their 

payrolls. Credit card interest rates 

could soar, and businesses could be unable to borrow and create new jobs. 

This is a first step. We are continuing 

with hearings on Monday and Tuesday 

of next week. I congratulate Mr. BACHUS for his work with the chairman for 

putting in tough safeguards for taxpayers, oversight and homeowners. 

The SPEAKER pro tempore. The gentleman from Alabama has 1 minute remaining. 

Mr. BACHUS. Madam Speaker, I reserve the balance of my time. 

The SPEAKER pro tempore. The gentleman from Massachusetts has 3 minutes remaining. 

Mr. FRANK of Massachusetts. 

Madam Speaker, given the concern 

about the fiscal implications, I am now 

pleased to yield 1 minute to a man who 

has done as much for fiscal responsibility as anybody with whom I have 

ever served, the chairman of the Budget Committee, the gentleman from 

South Carolina (Mr. SPRATT). 

(Mr. SPRATT asked and was given 

permission to revise and extend his remarks.) 

Mr. SPRATT. Madam Chairman, the 

bill before us has been vastly improved 

over the bill sent to us, and all of those 

improvements are still here. But this 

bill was waylaid in the Senate to add 

unrelated matters, which is not a good 

way to legislate, and I do not defend it. 

But the major adds extend expiring 

tax cuts, which we would extend anyway in time, and to fix the AMT to 

keep it from coming down on middle 

income Americans, and sooner or later, 

we would adjust the AMT. In regular 

order, we would offset those tax reductions so that they do not add to the 

deficit. This bill contains only partial 

offsets, but there is remarkable improvements to the code here. 

For example, one shining example, 

this bill closes a gaping loophole and 

saves $25 billion, a gaping loophole in 

the tax code, which has long allowed 

managers of hedge funds to shelter 

their income in places like the Caymans and dodge taxation. 

One final point. Throughout, this has 

been called a $700 billion bailout, but 

we should bear in mind three points: 

first, $700 billion will be the gross cost 

if all of it is drawn down. The net cost 

should be a lot less. 

I support this bill, and will vote for it 

again. I congratulate the chairman for 

the fine work he’s done. 

Mr. BACHUS. Madam Speaker, I continue to reserve. 

Mr. FRANK of Massachusetts. 

Madam Speaker, I am now proud to 

yield 1 minute to the majority leader 

from Maryland (Mr. HOYER) who has 

done a superb job of leadership in its 

best sense on this bill. 

Mr. HOYER. I thank the chairman 

for yielding. 

Madam Speaker and Members of this 

House, I said that last Monday would 

be a day of consequence. It was a day of 

consequence. We have been criticized 

as a body for not deciding affirmatively on Monday. What we did decide, 

however, was that initial failure should 

not stand because the crisis confronting our country was too great. 

And Republicans and Democrats together, administration and Congress, 

chairman and ranking member, each 

individual Member decided that failure 

was not an option. 

On Monday, the dividing line in this 

House was not between parties—it was 

between those who believed the dangers of doing nothing outweighed their 


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reservation about Monday’s bill and 

those who had yet to be convinced. 

Since then, I believe that the number 

of the convinced that this action is essential has grown. Some were convinced when a vote in the Chamber led 

to the evaporation of $1.2 trillion of 

wealth in about 120 seconds; some were 

convinced when they heard that America lost another 159,00 jobs last month 

making a total of lost jobs this year of 

760,000 jobs. In a similar period 8 years 

ago, we had gained 1.5 million jobs—a 

net turnaround of over 2.2 million jobs. 

Americans are in trouble. They’re expecting us to act. 

Some were convinced by the stories 

like this one from a small town car 

dealer in Utah. He said this: ‘‘I’m not 

going to be able to pay my employees 

next week. I can’t get the kind of credit line from the bank that I have had 

through my entire career unless you do 

something.’’ 

This bill outreaches not only to minorities but to small businesses as 

well. And I thank the gentlelady from 

California for her focus on that issue 

and Mr. BACHUS for his focus on that 

issue. 

What happens on Wall Street is 

bound up with the jobs of millions on 

Main Street, and the retirement of millions on Main Street, and the homes of 

millions in hometown America, and 

dreams of millions of our fellow Americans. 

b 1245 

If disaster strikes those few square 

miles in Manhattan, it will surely 

spread until every one of those jobs and 

retirements and homes and dreams are 

put at great risk. 

This week I’ve heard from the Prime 

Ministers of Australia and Japan who 

are telling us that their people are 

bracing themselves, worried that 

America will not rise to the occasion. I 

am proud to be a Member of this 

House, and when challenged, I believe 

this House rises to its responsibilities 

and I believe it will do so today. 

We sing the praises of American leadership, and today, I think we will deserve that praise. This is the responsibility that comes with our duty as Representatives in the people’s House. For 

all of those reasons, this bill is essential. 

So many of us have improved the administration’s plan, Republicans and 

Democrats, working together, which 

came to us as a mere three-page bill, 

giving essentially a $700 billion blank 

check to the administration. Republicans and Democrats knew as one that 

that could not stand. 

The heart of the bill remains a plan 

for the government to buy up bad financial assets, restoring the flow of 

credit so essential to the growth and 

maintenance of our economy. 

But we fought to ensure that taxpayers will be the first to profit if and 

when those assets rise again in value, 

making the true price tag of this bill 

far, far less than $700 billion. 

In fact, Warren Buffett, one of the 

most successful investors in the history of America, has said this, ‘‘If they 

do it right, and I think they’ll do it 

reasonably right’’—his expectation is 

that we will do it reasonably right—he 

said, if we do that, we’ll make a lot of 

money, we being the taxpayers of 

America. 

So we have the opportunity not only 

to save our economy, to save those 

dreams of our fellow citizens, but also 

to make some profit. 

In addition, we made sure the financial community will be obligated to 

pay the taxpayers back for their loan. 

We restricted executive compensation because CEOs whose recklessness 

helped bring on this crisis should not 

receive taxpayer-subsidized golden 

parachutes or extraordinary salaries. 

We are subjecting the Treasury Secretary’s decisions to strong oversight. 

Republicans and Democrats together 

agreed that that should be done. 

Finally, we will help homeowners renegotiate their mortgages to prevent a 

further flood of 2 million projected 

foreclosures. That’s what this bill is 

about. That is the action we are asked 

to take today. 

On Wednesday, the Senate raised 

Federal insurance of bank accounts 

from $100,000 to $250,000, and also chose 

to add several tax cuts. I personally believe that raising the FDIC can be argued on both sides of the question, but 

certainly, it ought to stabilize our 

local banks. However, as all of you 

know, I strongly disagree with adding 

those tax provisions because the Senate has chosen to finance them with 

debt. 

This crisis is making it painfully 

clear the dangers of fiscal recklessness 

and that debt does indeed matter. A 

lesson, in my opinion, the Senate has 

ignored. 

But an emergency like this calls for 

the courage to compromise. On Monday, Chairman FRANK said, ‘‘If we 

aren’t prepared to accept some of the 

things we don’t like, we will not have 

the power to deliver for the people we 

care about.’’ The chairman was absolutely right. For me, those people are 

families unable to take out a loan to 

buy an appliance or pay for college. 

They are Americans who have worked 

their whole lives only to see their retirement accounts threatened. They 

are the millions of workers fearing a 

pink slip they did nothing to earn. For 

their sake, for their sake, we must act. 

I urge all of us to pass this legislation. I urge all of us to vote for this 

legislation. I know there will be some 

who will not vote for this legislation. I 

want them to know that I respect their 

judgment. We have a difference of opinion. 

On Monday, America was deeply divided, and their representative body, 

not surprisingly, was deeply divided. In 

the last 4 days, Americans in small 

towns, on farms, in urban areas and 

suburban areas have reflected upon the 

consequences of inaction, and while 

they have not come to the universal 

thought that we ought to pass this bill, 

they have told us in the strongest 

terms we expect the people’s House to 

act in a way that they think best to 

save our economy, to protect our 

dreams, to make America whole again. 

Mr. BACHUS. Madam Speaker, I 

yield the balance of my time to the 

gentleman from Ohio, our leader, Mr. 

BOEHNER. 

The SPEAKER pro tempore. The gentleman from Ohio is recognized for 1 

minute. 

Mr. BOEHNER. Let me thank my 

colleague for yielding and thank him 

for his work and thank the work of Mr. 

FRANK, the chairman of the Financial 

Services Committee, and Members on 

both sides of the aisle who have worked 

together to bring us to this point. 

We all know that we are in the midst 

of a financial crisis, and we all know 

that this crisis is about our neighbors. 

It’s about our small businesses. It’s 

about retirees whose savings are on the 

line. It’s about the American people 

and their jobs. And we know that if we 

do nothing, this crisis is likely to worsen and to put us into an economic 

slump like most of us have never seen. 

We’ve come together on a bill that is 

a much better bill than it was when it 

started. It isn’t the bill that I would 

write. It’s not the bill that any of you 

would write because this bill was done 

in a bipartisan way, where Members on 

both sides of the aisle came together, 

worked together to build a product 

that we thought would help avert this 

crisis. It certainly has grown in size, 

but to do nothing, in my view, is not an 

option. 

The consequences of us not acting 

are overwhelming, and so I do believe 

that it’s our responsibility to act. The 

American people sent us here to do our 

jobs on their behalf. They’re counting 

on us. 

I know that some of you will disagree 

with the bill that we have before us, 

and I understand and respect those 

views. But while we have an imperfect 

product, we have a responsibility to act 

and to act in a way that we will do our 

best on behalf of our constituents. 

I have talked to a lot of Members on 

both sides of the aisle who were stuck 

in really difficult elections, and doing 

this bill in the middle of an election is 

complicated enough. And I’ve had 

Members worried about how this is 

going to affect their election. I told 

them that whether you vote ‘‘yes’’ or 

you vote ‘‘no,’’ you’ve got to go home 

and defend this. And it’s a lot easier to 

defend your vote if you, in your own 

mind, will just do the right thing. 

I’m going to vote for this bill today 

because I think it’s in the best interests of the American people. That’s 

what they sent us here to do, and 

that’s what I’m going to do. 

Above the Speaker’s rostrum is our 

motto: ‘‘In God We Trust.’’ This is 

probably one of the most serious votes 

that any of us will ever cast. I’ve said 

my prayers this morning, like I do 


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every morning, so that I can understand and feel better about the vote 

that I cast. But even if we pass this bill 

today, let’s not kid ourselves. We’re in 

the midst of a recession. It is going to 

be a rough ride, but it will be a whole 

lot rougher ride if we don’t pass this 

bill. 

But I will say to all of you, when this 

bill passes today, remember those 

words, ‘‘In God We Trust,’’ because 

we’re going to need His help. 

Mr. FRANK of Massachusetts. 

Madam Speaker, I yield to the gentleman from Rhode Island for a unanimous consent request, with the reminder that the vehicle for this is the 

mental health parity for which he has 

worked so hard. 

(Mr. KENNEDY asked and was given 

permission to revise and extend his remarks.) 

Mr. KENNEDY. Madam Speaker, recognizing the end of insurance discrimination towards the mentally ill and 

praising my colleague JIM RAMSTAD

and Dave Wellstone, whose father is 

looking down on us today in praise of 

his son for all the hard work he did to 

see this day come to pass, I urge passage of this legislation. 

Madam Speaker, I rise in support of H.R. 

1424, the Emergency Economic Stabilization 

Act of 2008. 

While I do support the rescue package and 

commend Chairman BARNEY FRANK for his 

work producing this legislation, I rise today to 

speak about the mental health parity bill which 

is included in this package. 

For those of us in Congress who have been 

fighting to bring greater fairness and equity to 

our insurance laws, today is the culmination of 

a long struggle. 

When we send this package to the President, we will be providing 113 million Americans the peace of mind that comes with knowing that your health insurance will be there 

when you need it—regardless of your diagnosis. 

For far too long, health insurance companies have used the stigma of mental illness 

and substance abuse as an excuse to deny 

coverage for those biological disorders. 

That ends today. The Paul Wellstone and 

Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 will finally outlaw 

the discrimination that is embedded in our 

laws and our policies. 

The passage of this legislation is one more 

step in the long civil rights struggle to ensure 

that all Americans have the chance to reach 

their full potential. 

There are too many people to thank individually, so I would like to focus on two. 

For as long as I have been in Congress, JIM

RAMSTAD has been a champion for those with 

mental illness and substance abuse disorders. 

His advocacy on this issue has been inspiring 

to millions of Americans, and to me personally. 

He is a role model for me, both personally 

and professionally. This Congress could use 

far more members like JIM RAMSTAD, on both 

sides of the aisle. This body will miss him terribly when he retires at the end of this Congress. 

The other person I would like to recognize 

is Dave Wellstone. As most everyone here 

knows, Senator Paul Wellstone was the original champion of mental health parity in the 

Senate. 

When he passed away, many of us thought 

that the momentum he had created for this bill 

would go with him. But his son Dave picked 

up the torch and has carried it tirelessly to get 

us to this point. 

Dave, I know your father is watching us 

today, and I cannot imagine the pride he must 

feel. Congratulations. 

In closing, this legislation strikes a blow 

against the stigma and discrimination faced by 

those with mental illness. I urge all of my colleagues to support it. 

Mr. FRANK of Massachusetts. 

Madam Speaker, to close with a burst 

of redundancy, which is not inappropriate for what we’ve been through on 

this bill, I yield to Madam Speaker for 

1 minute. 

The SPEAKER pro tempore. The gentlewoman from California is recognized 

for 1 minute. 

Ms. PELOSI. Thank you very much, 

Madam Speaker. I thank the gentleman for yielding. I thank him for 

being such a great maestro in orchestrating this legislation that we have 

before us, accompanied by so many 

others; Congresswoman WATERS for her 

tremendous leadership. We recognize 

Congressman SPRATT of the Budget 

Committee; Congresswoman SLAUGHTER for her work on the Rules Committee to bring this bill to the floor; 

Congressman RANGEL for his very, very 

important work as well and having a 

piece of this bill. 

I commend SPENCER BACHUS for his 

leadership and some of the great ideas 

that he brought to the table that first 

night and continued to bring to the discussion as we have gone ahead. 

It’s been my pleasure to work with 

Mr. BOEHNER and Mr. BLUNT on this 

and with my colleague Mr. HOYER

who’s invested so much time; and our 

mastermind, RAHM EMANUEL for his 

knowledge of Wall Street, his knowledge of Congress, and his leadership 

was essential in our reaching the point 

we are today. 

The place that we are today is to debate legislation that I think is much 

improved from the product that was 

here on Monday, and as we debate this 

legislation, we must do so with an eye 

to the future. We must reassure the 

American people that this crisis will 

lead to reforms that will strengthen 

their personal economic security, that 

the bright light of accountability will 

protect the taxpayers and ferret out 

the abuses that have led to this crisis. 

The urgency is clear. We hear it from 

our friends, from our neighbors. We 

hear it everywhere we turn. 

In my home State of California, officials including the Governor are urgently calling for Federal legislation 

to avoid economic catastrophe, catastrophe. Those urgent calls are being 

echoed by Democratic and Republican 

Governors from across the country. 

b 1300 

While the focus has been on the Dow 

Jones and Wall Street, we are addressing the real pain felt by Mr. and Mrs. 

Jones on Main Street. They are why we 

must pass this legislation today. 

Seniors and those nearing retirement 

have watched their savings dwindle and 

their pensions evaporate. Entrepreneurs seeking a plan for a new business are being turned away for credit, 

undermining job creation. If you’re 

trying to buy a car, you cannot get a 

car loan. If you’re trying to sell cars, 

you cannot get a business loan to purchase inventory. If you’re trying to 

save for your children’s college education, you are deeply in doubt as to 

whether your savings will be there. 

And just this morning, the Labor Department announced that another 

159,000 Americans lost their jobs in 

September, the most in 5 years. Nearly 

800,000 Americans have lost their jobs 

this year alone. These are the Americans we must act on behalf of today. 

They are not the high flyers on Wall 

Street, but our neighbors and our constituents, and they need our help. 

Let us be clear, the original rescue 

bill proposed by the Bush administration was unacceptable, as has been indicated by Mr. BOEHNER. It has asked 

us to commit $700 billion in taxpayers’ 

money with few strings and no safeguards. In a bipartisan way, we rejected that proposal. And in our bipartisan negotiations between the White 

House and the Congress, we demanded 

tough additions to the bill, and they 

are contained in this legislation. 

To protect the taxpayers, we insisted 

upon tough oversight and accountability. To further protect the taxpayers, we wanted to make sure that as 

we bought this illiquid paper that Mr. 

Paulson was talking about and as we 

invested capital into these companies 

that we were helping to make healthy, 

that the American taxpayer would 

profit. Mr. SPENCER BACHUS was quite 

vocal on that subject when we met that 

first Thursday night two weeks and one 

day ago about, if we’re going to make 

these companies healthier, why 

shouldn’t we just invest capital in 

them so the taxpayer can benefit? 

And thanks to JOHN TANNER of Tennessee, if this does not pay for itself, as 

some say that it can, but if there is a 

shortfall, the taxpayer will be made 

whole, being paid for by fees on those 

who have benefited from the program. 

That recoupment that Mr. TANNER put 

forth I think is a tremendous advance 

in this legislation and a protection for 

the taxpayer. 

We also reform CEO compensation 

and put an end the golden parachutes. 

Our message to Wall Street is: The 

party is over. No longer will you drive 

your business into the ground, take a 

golden parachute to safety and have 

the taxpayer pick up the tab. And 

thanks to Congresswoman MAXINE WATERS, this legislation will do a great 

deal to help families avoid foreclosure 

and enable them to stay in their 

homes. 

Since the bill came to the floor earlier this week, it has been further improved by increases in insurance for 


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checking and savings accounts which 

protect savers, small businesses and 

community banks across America. 

I am especially pleased that the plan 

benefits middle income families with 

an extension of the $1,000 per couple 

State and local property tax deduction; 

$1,000 for those who do not itemize deduction in their property taxes. And I 

thank JIM CLYBURN, our Democratic 

whip, for his leadership in this regard. 

I am also pleased that the bill includes an extension of tax cuts for 

clean and renewable energy that will 

create and save half a million goodpaying jobs in America immediately. 

This was a part of our energy bill last 

year. It did not survive the Senate, it 

now has become part of this legislation, and it is paid for. We fought hard 

to include these critical tax cuts, 

again, as I said, in last year’s landmark 

legislation because they are essential 

to job creation. 

And aren’t we all pleased across 

America’s cause for celebration that 

the legislation includes the Mental 

Health Parity and Addiction Equity 

Act? PATRICK KENNEDY and Mr. 

RAMSTAD—I hope he’s here so I can 

convey to him the gratitude of the 

American people to both of them for 

their leadership, without which we 

would not be having this important 

legislation passed today. It has turned 

out to be the vehicle for which the 

whole package is moving. 

By requiring that illness in the brain 

be treated just like illness elsewhere in 

the body for insurance purposes, we’re 

helping to end discrimination against 

those who seek treatment for mental 

illness. This legislation will also save 

lives. 

So there are some things in here that 

have been added since the other day 

that are very important, legislation 

that has passed the House over and 

over again, but never could make it 

through the Senate, and now it has. 

That doesn’t take away from the fact 

that we’ve been dealt a mighty bad 

hand with the core part of this legislation, but it has been improved. It is a 

compromise, but it is just the start. 

Passing this legislation is only the 

beginning of our work to protect the 

economic future of the American people. With the work in these past 2 

weeks, we’ve seen things we never 

thought we would see before in terms 

of the economic insecurity of our own 

country. With this legislation, $700 billion, we have broken new ground in 

how we deal with this crisis, but we 

will not leave it broken. Chairman 

WAXMAN, Chairman PETERSON and 

Chairman FRANK will hold a series of 

hearings to determine the origin of the 

crisis, how regulators and business 

leaders failed to protect the public interest, and the commonsense, reasonable regulations needed to provide security and stability in the future. 

We must look ahead. We must look 

ahead to protect Americans from unsavory lending practices and to bring a 

better balance to our bankruptcy laws, 

but today we must begin by passing 

this bill. And as we do so, we must 

keep in mind our commitment to fiscal 

discipline, to not increasing the deficit. 

That’s the overriding question I have 

from people—well, among others—why 

so much? Will it work? We’ll see. What 

does it do to our opportunities to invest in the American people? Well, we 

hope it will pay for itself. And if it 

doesn’t, then the fees will be there to 

cover it. 

But apart from that, we cannot get 

into the thinking that we can just put 

out all this money without the thought 

that it will be heaping mountains of 

debt onto our children unless we have 

recoupment. And so it is a problem for 

us as we go into a new presidency and 

a new Congress. But under the leadership of Mr. SPRATT, and working with 

others in the House and in the Senate 

and with a new President of the United 

States, ‘‘no new deficit spending’’ must 

be our mantra. 

This is a vote with real consequences, 

a vote that will shape or begin to shape 

the financial stability of our country 

and the economic security of our people. It is an important vote, it’s a difficult vote, but it is a vote that we 

must win for the American people. We 

must win it for Mr. and Mrs. Jones on 

Main Street. 

Ms. HIRONO. Madam Speaker, the emergency financial rescue package I am supporting today, while far from perfect, contains 

noticeable improvements on the Paulson Plan 

we considered on Monday. This package is 

much more balanced in favor of helping everyday people, middle-class families, and small 

businesses. The bailout package we considered on Monday was simply too geared toward Wall Street and the corporations whose 

irresponsible practices helped create this crisis 

in the first place. 

This new financial rescue package raises 

the cap on FDIC-insured bank accounts from 

$100,000 to $250,000, which will assist families and small businesses while restoring 

Americans’ confidence that their savings are 

secure. 

The new package provides tax relief for 

middle-class families and tax incentives designed to create new jobs and economic opportunities in Hawaii, where people have been 

hit hard by the economic downturn that preceded this financial crisis. The majority of the 

tax relief, tax credits, and tax extenders added 

to the package will provide direct relief and 

economic assistance to middle-class families 

and working people—such as the Alternative 

Minimum Tax, AMT, relief provision and tax 

credits to speed research, development, and 

use of renewable energy sources like wind 

and solar. 

The AMT fix, for example, will prevent some 

40,000 constituents in my second district of 

Hawaii from having to pay higher taxes that 

were originally intended only to affect wealthy 

taxpayers. 

The renewable energy tax credits are critical 

to encourage investment in the alternative energy projects Hawaii needs to reduce our dependence on foreign oil. 

In addition, the bill reauthorizes for 2 years 

the Qualified Zone Academy Bonds, QZAB, 

program, which helps school districts with lowincome populations save on interest costs associated with financing school renovations and 

repairs. Hawaii received about $1.3 million in 

QZAB allocations in 2005, 2006, and 2007. 

Another significant provision of this bill requires insurance mental health parity legislation that advocates in Congress have been 

trying to pass for the past 10 years. I am an 

original cosponsor of this legislation. These 

provisions, included in the financial rescue 

package, will make sure that families struggling with mental illness do not have that challenge compounded by inadequate coverage of 

mental health care costs. 

I have voted for these energy, business, 

and middle-class tax relief measures earlier in 

the House. These provisions will help 30 million homeowners, create 500,000 American 

green jobs, and provide tax relief for well over 

25 million middle-class families. Including 

those tax relief proposals as part of the financial rescue package has made the overall proposal more balanced, and more likely to help 

everyday people get through these difficult 

economic times. 

The economic downturn we are facing, resulting in loss of jobs, foreclosures, and families having difficulty paying for life’s necessities, will not be fixed by this relief bill. The 

economic provisions added to the bill will help. 

But we need a broader economic stimulus 

package to get our economy going in the right 

direction again. 

I am disappointed that it appears the Senate 

is not taking up the economic stimulus package (H.R. 7110) recently passed in the House, 

which will create jobs, extend unemployment 

benefits, help States with Medicaid reimbursements, and support our Food Stamp program. 

This bill represented some $222 million for 

Hawaii. 

I did talk to Senator OBAMA about his perspective and my concerns about this bill. We 

both know that much more work remains to be 

done to address the underlying economic and 

regulatory problems that won’t be fixed with 

this bill. We agree that new Federal investments are needed in transportation and clean 

water infrastructure as well as in education to 

enhance our Nation’s competitiveness and to 

put people to work. Senator OBAMA also 

shares my concern that the cost of this rescue 

plan will not ultimately fall on the taxpayers, 

and he reassured me of his commitment to 

impose financial service fees to make taxpayers whole. With the right leadership in the 

White House, I am confident that we can 

make the changes needed in future legislation 

to protect homeowners and taxpayers and to 

reform our financial markets. 

Ms. JACKSON-LEE of Texas. Madam 

Speaker, I would like to thank the chairman of 

Financial Services BARNEY FRANK for bringing 

this important piece of legislation to the floor. 

I rise today with the confidence that our system of government is strong and the constitutional protections of the full faith and credit of 

our government must protect Main Street 

America while we reform America’s Wall 

Street. 

Many have claimed that this is a historic 

vote. Historic votes are not ubiquitous. Historic 

votes come about through necessity and not 

through the failures of people. This problem 

has persisted for a while and now Congress 

must rush before the recess to a vote. While 

I would have liked more time, time has seemingly run out. 


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I would begin by saying that I had concerns 

about the bill that was presented to the Congress on Monday. After much deliberation and 

a return visit to my district, I vote ‘‘yes’’ for this 

bill. Given these dire economic times, it is the 

responsible thing to do to vote ‘‘yes’’ when the 

mass of Americans are suffering. 

Let me give you a picture of the tough economic times which face Americans. The economy is shredding jobs. The U.S. economy has 

lost jobs in every single month of 2008. In 

September, the economy suffered its biggest 

1-month job loss,¥159,000, in over 5 years. 

In total, the economy has shed 760,000 jobs 

since the beginning of the year. 

Poor labor markets are significantly increasing unemployment. Within the past year, the 

number of unemployed Americans has increased by 2.2. million. In September, there 

were 9.5 million unemployed workers, keeping 

the unemployment rate at a 5-year high of 6.1 

percent. Thus, it has become harder for Americans to find jobs. 

The economy is faced with credit crunches. 

Individuals have found it difficult to get first or 

second mortgages, credit, credit cards, and 

loans, including student loans. Because of the 

compendium of these economic concerns, 

coupled with the drying up of the credit market, I have changed my vote from a few days 

ago from a ‘‘no’’ to a ‘‘yes.’’ I changed my vote 

because of my concern for the well-being of 

the American people. 

The first three articles of the United States 

Constitution address the three branches of 

Government and their enumerated powers. 

These Articles govern the legislature, the executive, and the judicial branches. Because 

there is no specific grant of constitutional authority for the actions that will be taking place 

here today, we the Members of Congress 

need to exercise oversight over the powers 

and actions of the executive. Should the executive or its agencies exceed the powers granted to it in the Constitution, the judicial can review the determinations made by the executive and the legislative branches. These concepts are fundamental to our Constitution and 

our system of constitutional checks and balances. These checks and balances were established by the Founding Fathers to reign in 

the unbridled power of the executive. 

Today we are engaged in a fundamental exercise of the constitutional powers extended to 

the Congress. Today’s vote is critically important. 

Several questions come to mind when I 

consider the present financial crisis: Where 

was the FDIC? Where was the SEC? Where 

was the Federal Reserve? 

I have worked with leadership to offer consistent amendments, not once but twice unsuccessfully, that would have strengthened the 

enforcement measures over the past week to 

change the administration’s proposal to make 

it more encompassing, effective, and better for 

the American people. 

While the present legislation is impressive, it 

is also impressive regarding what needs clarification in the present legislation. For example, 

the legislation needs clarification on its bankruptcy restructuring, enforcement, and judicial 

review. These are all issues that I have been 

very concerned about. 

Because I am concerned and desire that the 

maximum number of Americans get relief from 

this bill, I offered amendments yesterday. To 

ensure that this bill provides relief for Americans, I offered the following amendments: 

First, many are concerned about the dollar 

amount that will be set aside for those individuals facing mortgage foreclosure. Therefore, I 

asked that language be inserted into the bill 

so that $10 billion be utilized for the Secretary 

of the Treasury to restructure mortgages. 

Second, as Senator BARACK OBAMA has recently stated, he is committed to altering the 

bankruptcy code in the future to assist homeowners on the question of restructuring their 

mortgages. Therefore, I believe that there 

should have been Sense of Congress language that the Congress should review and 

amend the bankruptcy code to permit bankruptcy judges to address the question of individual home mortgage restructuring. This 

would have sent a clear message that Congress is interested in helping Americans pay 

off their debt despite its not changing the 

bankruptcy code at this time. 

Third, there needs to be greater enforcement. In the section on judicial review, Section 

119, there should have been language that 

specifically states that ‘‘the courts should be 

able to exercise their discretion to grant injunctive and/or equitable relief if the court determines that such relief would not destabilize 

financial markets.’’ 

Fourth, the legislation should have created a 

new, independent commission to exercise 

oversight over what happened and the commission should regularly provide reports to 

Congress. This commission would be backward looking. 

Fifth, the legislation should have been narrowly crafted so that corporate executives who 

may be convicted of criminal malfeasance in 

the financial sector might be barred from conducting financial business with the Government for a period of 7 years. 

Sixth, the legislation should have permanently lifted the present insurance cap of 

$100,000 that the FDIC has established to insure funds stored in FDIC-backed banking institutions to $250,000. I believe that this has 

already been included in the Senate bill; but, 

my amendment would have made the change 

permanent. 

Seventh, in section 109, which addresses 

‘‘foreclosure mitigation efforts,’’ the language 

should be changed from ‘‘shall encourage’’ to 

‘‘shall require’’ to provide stronger relief for 

Americans. 

Specifically, current section 109(a) states in 

pertinent part that ‘‘the Secretary shall implement a plan that seeks to maximize assistance for homeowners and use the authority of 

the Secretary to encourage the servicers of 

the underlying mortgages . . . to minimize 

foreclosures.’’ I believe if the true intent is to 

bailout ‘‘Main Street,’’ the Secretary should be 

‘‘required’’ to minimize foreclosures. 

There are certain redeeming qualities to the 

bill. 

I understand that H.R. 1424 establishes a 

Financial Stability Oversight Board in section 

104; Oversight and Audits in section 116; and 

a Congressional Oversight Panel in section 

125. Therefore, these sections provide some 

oversight over the financial crisis and help to 

add one piece to the economic puzzle. 

Without bankruptcy I offered an amendment 

that $10 billion should be set aside so that the 

Department of Treasury could use those funds 

to address the question of individuals facing 

home mortgage foreclosure. I considered it important to set aside money because I wanted 

to ensure that Main Street received something 

from this bailout and not just Wall Street. 

The administration has labeled the current 

economic situation as a crisis that requires 

emergency measures. Our vote today in favor 

of the legislation is a first attempt at addressing these dire economic times. 

Above all, my concern is to ensure that the 

American people receive the relief that they 

deserve. If the American people are facing 

mortgage foreclosure, it is my desire that monies be provided to them so that they can continue to stay in their home and pay their mortgages and their bills. Everyone deserves the 

economic dream of owning their own home. 

But the financial institutions were dilatory in 

their responsibility to assess the borrower’s 

ability to pay for loans and purchase a home. 

It was the squandering of this responsibility 

and preoccupation with greed and avarice that 

has led us to where we are today. I am not 

satisfied that this bill is perfect, but this bill 

does allow Treasury to buy toxic assets from 

financial institutions, including our small and 

community banks. Once these toxic assets are 

purchased, the Treasury should be encouraged to restructure loans that are in foreclosure. This is indeed encouraging news. 

There are substantial improvements in the 

present version of the bill compared to the 

Bush administration proposal. However, the 

bill as it is presently written, in my view needs 

some clarification as to how it provides the 

necessary relief to middle-class America. 

There are provisions now that address accountability measures by requiring a plan to 

ensure the taxpayer is repaid in full, and requiring congressional review after the first 

$350 billion for future payments. 

Principally, there are three phases of a financial rescue with strong taxpayer protections: reinvest, reimburse, and reform. One of 

the phases is to reinvest in the troubled financial markets to stabilize the markets. Another, 

reimburses the taxpayer and requires a plan 

to guarantee that they will be repaid in full. 

The last is to reform how business is done on 

Wall Street. The current legislation provides 

for fewer golden parachutes and, to its credit, 

provides sweeping congressional oversight. 

There are critical improvements to the rescue plan that yield greater protection to the 

American taxpayers and even to Main Street. 

However, with the passage of this bill, it is my 

hope that H.R. 1424 will help the financial 

markets and make America secured. I am 

cautious and hopeful that there is enough in 

the bill to help Americans struggling with their 

mortgages. 

Although I have certain lingering concerns 

regarding this bill, I have voted for this bill. 

After meeting with an Assistant Secretary for 

the Treasury, some of my concerns were answered; others remained. For example, the 

Assistant Secretary indicated Treasury’s intervention in the markets will afford it the opportunity to purchase toxic assets. After Treasury 

purchases these toxic assets at fair market 

value, it is expected that the purchase price 

will set a marker so that other similar classes 

of assets will be purchased at the same or 

higher price level. This is a positive development for banks and financial institutions to recapitalize themselves. By itself this would be a 

help to commercial banks that desire to sell off 

their toxic assets. 

In my conversation with the Assistant Secretary, he indicated that as time goes on, 

Treasury will develop guidelines for identifying 

and helping troubled small and community 


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banks. It is intended that small and community 

banks and small, women, and minority-owned 

businesses will all be aided by this legislation. 

These latter institutions will be aided because 

it is expected that there will be more liquidity 

in the market available to these entities and 

that more credit can be extended to them. 

Lastly, the Assistant Secretary indicated that 

under sections 109 and 110, that Treasury 

has every incentive to renegotiate the terms of 

troubled mortgages. Importantly, the Assistant 

Secretary indicated that not all homeowners 

who are facing mortgage foreclosure will be 

helped. The goal, however, is to help as many 

Americans as possible. 

I have drafted a letter to Chairman FRANK of 

Financial Services, and I have raised several 

questions to which I would like answers. 

First, I have asked Chairman FRANK that 

should something go wrong with this bailout, 

whether Congress can be called to reconvene 

at any time before or after the election. 

Second, I have asked Chairman FRANK to 

share the constitutional grant of authority that 

would prevent the Secretary of Treasury from 

having unfettered power so that there will be 

a balance between the interests of the banks 

and individual homeowners. 

Third, I have asked Chairman FRANK what 

members of Congress can expect in the 111th 

Congress regarding follow-up on this bill and 

the financial situation generally. 

Fourth, I have asked Chairman FRANK to 

answer how members can ensure that community and regional banks can take advantage 

of this bill. 

These are critical questions that need to be 

answered. 

I believe that Wall Street is an important 

and vital part of the Nation’s economy. I believe that the people who work there are good. 

It is a well known fact that financial markets 

do not always serve small businesses and minorities. I have personally had experiences 

where good hardworking people and small 

business owners were denied access to financial markets. 

I believe in America and I believe in its Constitution. I believe that this bill would allow 

constant monitoring and vigilance and would 

help the American people. 

I am reminded of the Preamble to our Constitution, which reads: 

‘‘We the People of the United States, in 

Order to form a more perfect Union, establish 

Justice, insure domestic Tranquility, provide 

for the common defence, promote the general 

Welfare, and secure the Blessings of Liberty 

to ourselves and our Posterity, do ordain and 

establish this Constitution for the United 

States of America.’’ 

I would like to end with a quote from Alexander Hamilton: ‘‘the sacred rights of mankind 

are not to be rummaged for, among old parchments, or musty records. They are written, as 

with a sun beam in the whole volume of 

human nature, by the hand of the divinity itself 

and can never be erased or obscured by mortal power.’’ 

I hope that this legislation will provide the 

American people with the sun beam. It is my 

hope that this legislation works and that it 

serves the American people. 

Mr. SCOTT of Virginia. Madam Speaker, we 

obviously have a crisis in the financial markets. Major firms have failed and others are 

failing. We are in an economic downturn with 

people losing their homes, businesses going 

under, and credit drying up for small businesses and consumers. The current crisis is 

the predictable consequence of the failed economic policies of the last 8 years. These policies are the ones that have produced record 

budget deficits, the worst job growth since the 

Great Depression—including our ninth consecutive month of job losses—and the worst 

Dow performance in over three decades. Congress should address the crisis with appropriate legislation. 

The Senate bill that we considered today is 

not fundamentally different from the bill we 

voted on Monday, although some have attempted to change the name of the package 

from a ‘‘bailout’’ to a ‘‘rescue.’’ The foundation 

of the bill remained the outlay of $700 billion 

for the purchase of worthless assets. On balance, the final version of the bill was still not 

a good deal for taxpayers. 

Whether or not the bailout act we voted on 

today was a ‘‘good’’ deal rises and falls on the 

issue of fair value. You cannot rationally determine the worthiness of a purchase, without 

first assessing what the fair value is, and 

whether you are paying more or less than that 

fair value. If the bailout legislation included a 

provision that would provide that the Federal 

Government would pay no more than the good 

faith estimate of the fair value for the assets, 

then it would be a good deal. Some of the assets we will be asked to buy are options, derivatives, and other exotic speculative investments that are in fact worthless. There is no 

public policy rationale to bail investors out of 

speculative securities that did not pay off. 

Since there is no commitment to calculating a 

good faith fair value price, and to paying no 

more than that price, this is a bad deal for the 

American people, because we will undoubtedly overpay for these assets. Therefore, the 

worthiness of the deal rises or falls on the 

commitment to limit payments to a fair value. 

I am not suggesting that establishing a fair 

value of these assets will be easy. But there 

are well established factors in other situations 

to determine the value of assets when selling 

prices or bid and asked prices are not available. And it is our obligation as protectors of 

the U.S. Treasury to require that no funds 

should be spent without a reasonable assessment of what we are buying. 

Furthermore we should not give unlimited 

discretion to buy assets at prices obviously 

higher than fair value to an administration frequently accused of cronyism and favoritism. 

We are dealing with three separate but 

inter-related problems: illiquidity in the credit 

market; insolvency of some financial institutions; and the hardship of homeowners. Offering fair value prices for assets will address the 

issue of liquidity. If we limited purchasing 

prices to fair value, we could purchase assets, 

reestablish confidence, wait for the markets to 

reinvigorate and the private sector could then 

buy assets back from the Government. Even 

if it took more than $700 billion, as long as we 

were paying fair value, and receiving assets 

earning more than our borrowing costs, we 

could be confident that, in the long run, this 

solution would at least break even, and would 

likely make money for the taxpayer even if we 

held the assets to maturity. But since the bill 

provides no limit on the price we pay for assets, we will undoubtedly overpay, and lose 

money on the deal. If we paid fair value, we 

could solve the liquidity crisis without any likely cost to the taxpayers. Unfortunately, there is 

nothing in the act to restrict payments for assets to their fair value. 

The problem with illiquidity which affects 

credit relates to lending institutions holding 

valuable but temporarily illiquid assets on their 

books. While there is no market for those assets, accounting regulators require the assets 

to be valued at virtually zero. Since lending 

authority is directly related to the institution’s 

capital, this markdown significantly reduces 

lending authority, which leads to the credit 

crunch. This problem can be solved either by 

the government purchasing the assets at fair 

value or by a change in accounting regulations 

to allow assets to be booked at ‘‘fair economic 

value’’ rather than ‘‘market value’’. This administrative change in the ‘‘mark to market’’ rule 

would significantly increase lending authority 

at no cost to the taxpayer. In addition there 

are a handful of banks that have sufficient 

capital but not enough deposits to sustain 

lending authority; in those few cases, simply 

depositing federal funds in the bank would increase lending capacity. 

Another factor affecting credit is the reluctance that banks have to lend money to other 

banks; for fear that the other bank might go 

broke without notice as several recently have 

done. This problem can be cured by the 

issuance of ‘‘net worth certificates’’ which 

would guarantee the net worth of a bank, for 

a fee which would insure that there would be 

no net cost to the taxpayer. This has been 

done successfully in the past. 

There are other ways to instill confidence in 

financial institutions without spending any of 

the taxpayer’s money. William Isaac, former 

head of the FDIC, has suggested that FDIC 

exercise the powers already granted to it by 

Congress. The FDIC can take emergency action and declare that no general creditor of a 

failed bank will suffer a loss if the bank fails. 

That declaration, when coming from the FDIC 

would, by statute, be backed by the full faith 

and credit of the United States. This action 

would be a signal to the worldwide market that 

the full faith and credit of the United States 

stands behind our banks, and an influx of capital would soon follow. Another FDIC change 

would be to increase the limit at which FDIC 

insures deposits from $100,000 to $250,000. 

This would limit the destabilizing impact of 

major withdrawals from banks. This provision 

is not controversial and is actually in the bill. 

Another factor which affects capital and 

therefore lending authority is the downward 

pressure on stock prices caused by short selling. Administrative action has already been 

taken to prohibit ‘‘naked short sales’’ and to 

restore the ‘‘uptick’’ rules. 

After the bill was defeated on Monday, I 

worked with other members who were skeptical of the bill, to propose cost-effective solutions to the crisis. Representative PETER

DEFAZIO has produced a bill, the No BAILOUTS, Bringing Accounting, Increased Liquidity, Oversight and Upholding Taxpayer Security Act, that outlines administrative changes 

that could be implemented at no cost to the 

taxpayer. The bill directs the administration to 

implement a net worth certificates program, 

adjust mark to market valuation rules, increase 

FDIC insurance limits, and regulate short 

sales. These no-cost changes would be more 

likely to have an impact on the domestic credit 

crunch than spending $700 billion purchasing 

worthless assets from all over the world. 

Some argue that overpaying for assets will 

help solve the second problem of the crisis, 


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the insolvency of some financial institutions, 

by providing capital to these institutions. I believe that we should help financially troubled 

companies that have a good chance of stabilizing and coming back with our help. Unfortunately, there is nothing in the bill to stop companies in no distress, or companies that are 

hopelessly insolvent, from selling their toxic 

assets to the Government, and any overpayment for assets those companies sell will provide no value to the taxpayer. There are more 

efficient ways of targeting financial assistance 

to appropriate companies than making overpayments to all companies. 

Congress does have an interest in assisting 

homeowners, but homeowners struggling to 

pay mortgages will find little comfort in this 

legislation. We should have included meaningful assistance for struggling homeowners in 

the bill. All homeowners would benefit because homeowners who are paying their mortgages on time have been hurt by home prices 

collapsing because of the flurry of foreclosures, and perspective homeowners are 

having difficulty finding new mortgages. The 

bill directs the Treasury Secretary to implement a plan to decrease foreclosures, ‘‘to the 

extent that the Secretary acquires mortgages’’. 

The problem is that the toxic securities that 

the Treasury is being asked to buy are not individual mortgages, but options, derivatives 

and other securities comprised of portions of 

hundreds and sometimes thousands of different individual mortgages. It is therefore unlikely that the Secretary will have the authority 

to change the mortgage terms and help prevent foreclosure in any significant number of 

actual mortgages. 

There are many effective ways to actually 

help homeowners. In November 2007, Representative JOE BACA introduced H.R. 4135, 

the Family Foreclosure Rescue Corporation, 

FFRC. Representative BACA’s bill is based on 

the concept of the Home Owner’s Loan Corporation, HOLC. During the Great Depression, 

this Government entity was created to buy 

troubled mortgages, and then refinance the 

mortgages at rates the homeowners could afford, preventing more foreclosures and stabilizing housing prices. When HOLC ended operations in 1951, it had turned a profit to the 

taxpayer. H.R. 4135 would create the Family 

Foreclosure Rescue Corporation, FFRC, to refinance loans for people currently in foreclosure or in serious default. Families will be 

able to refinance their mortgage through a 

Government administered loan with a set interest rate. FFRC would assist homeowners 

paying on the mortgages that back many of 

the toxic assets the Treasury is being asked to 

buy. Providing stability in the mortgage market 

is a much more direct solution to the foreclosure problem than overpaying for worthless 

options and derivatives backed by the bad 

mortgages, and this strategy is much more 

likely to help struggling homeowners. The 

HOPE for Homeowners program, a Federal 

program established by the housing bill 

passed earlier this year, is another program 

designed to directly assist homeowners, and 

Congress could do more to encourage mortgage holders assist their mortgage payers and 

themselves by utilizing the program. Changes 

to bankruptcy rules that would allow homeowners to renegotiate the loan on their primary residence would be another provision 

that would help homeowners. 

Although the major assessment of the core 

provisions of the bill rises and falls on the 

issues of fair price valuation and actual assistance to homeowners, there are other issues 

addressed in the legislation. The media has 

reported that there are provisions in this bill to 

limit executive compensation and to protect 

the taxpayer. The actual language in this bill 

does not support these reports. There are 

huge loopholes in the bill that allow companies 

to continue to pay executives exorbitant salaries. And, the taxpayer protections in the bill 

are flimsy. If the bailout does not pay for itself, 

the bill leaves it to a future administration to 

propose a bill to tax financial institutions to 

raise the money taxpayers have lost. In a 

Congress where there is outrage against any 

new tax proposal, if there is no political will to 

pay for the bailout in the middle of the crisis, 

there will be even less political will to raise 

taxes on financial institutions that may still be 

struggling in the future. 

The failure of the bill to limit the purchase of 

any assets to the fair value of those assets 

means that the bill will not effectively address 

the underlying issues: purchasing worthless 

assets adds nothing to general liquidity; overpaying for assets from all companies is an inefficient way to help those companies who 

only need temporary assistance to survive; 

and overpaying for assets does nothing for 

homeowners. Furthermore, this bill will fail to 

instill confidence in the market when it becomes apparent that the language of the bill is 

unlikely to match the public description of the 

bill on CEO compensation, foreclosure prevention and protection of the taxpayer. For those 

reasons, I regret that I was unable to support 

the bill. 

We should have drafted a new bill with the 

inclusion of many of the alternative proposals 

I have laid out in this statement. The result 

would have been a comprehensive bipartisan 

bill which targets our Federal assistance to the 

goals we need to address: illiquidity in the 

market, solvency for appropriate businesses, 

and assistance to homeowners. 

By spending $700 billion ineffectively on this 

crisis now, we will not have funds to respond 

to the next phase of our financial crisis in the 

future. For example, homeowners are continuing to lose their homes, and we have done 

very little to stem the tide of that problem. And 

because of today’s vote, we will have fewer 

resources to address that problem in the future. Furthermore, we must not forget that the 

underlying problem is that we are in an economic downturn, and our actions must be deliberate and measured if we are going to steer 

our way out of this mess. Unfortunately, we 

now have $700 billion less to address our economic situation. 

There are many administration initiatives 

that require virtually no taxpayer money, which 

would have a huge impact on the banking crisis, the solvency of businesses, and the challenges of homeowners. We should have 

begun with proposing those no cost administrative changes, before we authorized the expenditure of $700 billion on a plan unlikely to 

make any difference at all. 

Mr. HOLT. Madam Speaker, I rise today in 

reluctant support of H.R. 1424, the Emergency 

Economic Stabilization Act. 

My constituents are angry and I am too that 

we let our economy get to this point. The 

speculation and greed of Wall Street in recent 

years—coupled with years of failures, excesses, arrogance, and irresponsibility of the 

regulatory agents, Treasury and other Cabinet 

Departments, the White House and even 

some in Congress—has resulted in the meltdown of our Nation’s financial and credit markets. 

Many have passionately called for rejection 

of this compromise bill sent to us by the Senate following the rejection of the House bill 

earlier this week. There is a temptation for me 

to vote ‘‘no.’’ We could teach a lesson to Wall 

Street highflyers. We could teach a lesson to 

Secretary Paulson, President Bush, and the 

regulatory agencies. We could teach a lesson 

to the mortgage companies who entice borrowers to get over their heads. We could 

teach the Senators a lesson not to attach extraneous things to a financial bill. We could let 

the credit markets freeze up. We could let 

small businesses fail to meet next week’s payroll. We could let college students drop out because they can’t pay tuition. We could leave 

farmers, homeowners, and factories out in the 

cold. Would that teach the right lesson to the 

right people? I don’t think so. 

Market turmoil is affecting more than the 

78,000 New Jerseyans who work on Wall 

Street and the 266,200 New Jerseyans who 

work in the financial services sector throughout the State. There are thousands of my constituents who are not traders or high powered 

executives but still work in impacted industries. If left unchecked the credit crisis will hurt 

all of New Jersey, painfully affecting New 

Jerseyans from factory to financial district from 

farm to pharma. Furthermore, millions of 

Americans who have retired or are nearing retirement have seen their value of their pensions shrink. If day-to-day credit tightens up, 

Americans will not be able to get loans for college, cars, or a new furnace for the corner 

store. We need to act to ensure that retirement funds and pension plans are not devastated by investments that have lost value in 

a jittery market. Indeed we must act—we must 

stand behind our institutions, restore confidence in our markets, and protect millions of 

Americans who would be affected by a continuing collapse. That said, this bill is only one 

way to do that, and not the best way. I have 

worked with my colleagues to improve this bill, 

and I believe these improvements are sufficient to make the bill worth approving. 

There is much that should have been done 

and must still be done fix the problems in federal financial oversight agencies. The Treasury 

Department should have exercised its authority to oversee the mortgage markets. The Federal Deposit Insurance Corporation, FDIC, 

should have raised the insurance limit on deposits, which has not been raised for 28 

years, and created a net worth certificate program similar to the one that helped shore up 

banks in the 1980s. The Securities and Exchange Commission, SEC, should have prohibited short selling especially, naked short 

selling. It should have changed the mark-tomarket rule that forces banks’ assets to be 

valued not at their long term worth but at what 

they would be sold—if only they could be 

sold—for on market today. Alan Greenspan, 

the Chair of the Federal Reserve, should have 

followed the instructions of Congress in 1994 

to regulate the mortgage market. Greenspan 

failed to act to institute oversight for years and 

years and when succeeding Chairman 

Bernanke finally recognized the need to act it 

was years too late. Had the Treasury Department, FDIC, the Federal Reserve, and SEC 

acted we would not be in this mess today. The 


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Democratic Congress has tried to set this right 

several times. However, we failed to convince 

the administration to do what was right. Recently I have joined my colleagues in introducing legislation requiring the Treasury Department, FDIC, and SEC to take these actions and it is my hope that they will use their 

existing authority to undertake these common 

sense measures. Indeed some of those recommendations are included in this final 

version of the bill that is before us today. 

After careful and thoughtful review, I support 

the bill before us today because this legislation will help to mitigate this financial crisis, restore confidence in our financial institutions, 

and bring much needed liquidity to our marketplace. This bill is not, as so many of my colleagues have said on the floor today, a bailout 

that will save the fat cats on Wall Street. Had 

we accepted Secretary Paulson’s original proposal that is exactly what it would have been. 

If the President had his way, he would have 

ridden a wave of fear and railroaded Congress 

into passing Secretary Paulson’s original 3- 

page proposal asking for $700 billion—with no 

oversight—to bail out the financial services 

agencies. I did not support the original plan. 

The bill before us is a significant improvement 

to the original Bush-Paulson plan. While I believe that every Member of this body has what 

they think are better ideas how to fix the problem, no one has 218 votes for his or her plan. 

This is the plan we have. Legislative compromise is rarely pretty to watch. 

This legislation includes protections to ensure that the taxpayers’ money is not wasted. 

Only half of the authorized $700 billion would 

initially be available to the Treasury Department. A strict oversight board would be created to monitor how these funds are being 

used and the effect it has on the economy, 

and to advise the Secretary of the Treasury 

Department on how these funds are used. 

Congress and the President would have to approve the release of the next $350 billion if it 

is needed. This legislation would require the 

Treasury Department to implement a plan to 

mitigate foreclosures and to encourage lenders to modify loans and mortgages to prevent 

foreclosures and keep people in their homes. 

The bill also helps save small businesses that 

need credit by allowing small community 

banks to deduct losses from investments in 

Fannie Mae and Freddie Mac stocks. It will 

shore up banks by increasing FDIC insurance 

to $250,000 and prevent runs on banks. Finally, we can expect that taxpayers will recoup 

most of the money spent on this proposal 

through the equity they will hold in companies 

helped by this proposal. The total cost will be 

much, much less than $700 billion. 

This legislation also extends a needed tax 

relief which, unless extended, would expire at 

the end of the year. It will provide a one year 

patch that will prevent 88,000 New Jerseyans 

from getting hit by the Alternative Minimum 

Tax, AMT, this year. It will retain and create 

half a million jobs and strengthen our economy by extending the renewable energy tax 

credits. It will extend essential tax cuts for 

American families helping 4.5 million Americans afford college by extending the tuition 

deduction, and extending the child tax credit. 

It will extend for 1 year my initiative that allows 

a property tax deduction for taxpayers who do 

not itemize on their tax returns of $500 for single filers and $1,000 deduction for joint filers. 

The legislation helps American small businesses by extending the R&D tax credit and 

the new markets tax credit. It will also require 

mental health parity in employer-based insurance and end discrimination against patients 

seeking treatment for mental illness, an initiative that I have been working on since I was 

elected to Congress. These extraneous tax 

provisions should not have been added by the 

Senate. Nonetheless, most of the tax cuts in 

this bill have been passed by the House several times and are not ‘‘pork.’’ In fact they are 

the same tax benefits that are currently in effect and that this body has passed several 

times. 

I do not deny that there are provisions in 

this bill that do not belong. In fact, the provisions decreasing the excise tax on Puerto 

Rican rum as well as the decrease in the excise tax on wooden arrows are egregious. 

There should not be a tax deduction for movie 

and television producers. Nor should this legislation encourage the production of dirty fuels 

like coal to liquids and oil shale. I cannot justify these provisions, but I will not vote against 

teachers being able to get a tax deduction for 

buying supplies for their students, against the 

solar tax credit which has helped New Jersey 

become one of the nation’s leaders in solar 

energy production, or against incentives for 

businesses and individuals to donate items to 

schools. 

We can expect that H.R. 1424 will help 

American families by loosening the credit market. However, if we do not address the origins 

of this problem we will be forced to come back 

again to address the symptoms. The root of 

this problem is that bad mortgages, when 

mixed with the good mortgages, have 

poisoned the financial papers. We need to 

help Americans saddled with these bad mortgages. It is estimated that a million currently 

solvent mortgages will turn toxic by next year 

and further destabilize our financial institutions. It is our responsibility to prevent this 

from happening. Doing so would benefit the 

homeowners, the neighborhoods, the towns, 

and the investors in the financial district. 

I suggest that we consider a model that has 

been proven to help the homeowner, the 

Home Owners’ Loan Corporation, HOLC. The 

Home Owners’ Loan Corporation of the 1930’s 

through the 1950’s helped people with their 

mortgages. It was a Federal program that 

shored up a collapsing market and rescued a 

million homeowners. Incidentally, when it finally went out of business, it showed a net 

plus for the taxpayer. I will be introducing legislation which would create such a program. 

Indeed, that legislation should have been used 

instead of the Paulson-Bush approach. 

I believe that Congress should come back 

into session after the November elections to 

pass such a bill and to take up an economic 

stimulus package that will help those suffering 

on Main Street. It is deeply concerning to me 

and infuriating to our constituents that as we 

have focused on the crisis on Wall Street we 

have not paid comparable attention to American families that have been struggling for 

months. The unemployment rate has been 

steadily increasing, reaching 6.1 percent this 

month, the highest level since 1992. This year, 

605,000 Americans have lost their jobs. Employed Americans are continuing to struggle 

with increasing energy and food costs and decreasing wages. Many are at risk of losing 

their pensions due to bad decisions made by 

Wall Street. We must deal with the bad mortgages. People want to punish those who behaved recklessly. There may be actual legal 

action. That may provide some satisfaction, 

but without today’s bill it would not address 

the crisis of confidence, it would not help the 

people who are about to be hurt financially. 

We must deal with the long term problems: 

problems of bond traders wheeling and dealing in paper with no thought of the homes, 

factories and people behind these bonds; 

problems of some employers who show no allegiance to their workers; problems of families 

who in good times consume more than they 

save; problems of regulatory agencies that 

revel in the unrestrained trading. We should 

not wait for a new administration to help 

Americans who are suffering from this economic downturn and I urge my colleagues to 

reconvene Congress after the elections to address our Nation’s pressing economic concerns. 

Mr. TURNER. Madam Speaker, I oppose 

H.R. 1424 today because it does not address 

the real problems that caused this current financial crisis. 

Madam Speaker, I voted against the financial bailout legislation that failed on Monday, 

with the hope that Congress could then work 

on different ideas for how to solve this problem. Instead, we have been given nearly the 

exact same proposal, with little modification, 

but with a much larger price tag. Although I 

support taking action to help correct the damage done to our markets, I believe that making 

the wrong choice today places a risky and 

heavy burden on American taxpayers. Today’s 

legislation does not provide adequate assistance to homeowners, does not provide assistance to communities with large quantities of 

foreclosures, and does not prohibit the predatory lending practices that got us into the current crisis. 

Madam Speaker, the Treasury Secretary 

and the Chairman of the Federal Reserve 

have both indicated that this may not work. 

Further, there is no backup plan if this proposal does not work. When discussing this 

bailout, it is important that people keep in 

mind that agreeing to the $700 billion price tag 

could be only the beginning. This bailout 

would transfer billions of dollars in mortgagebacked securities to the federal government 

and provide no roadmap for what comes next. 

If these properties are foreclosed, the federal 

government is not prepared to become the 

Nation’s largest homeowner without seriously 

considering how it will handle these mortgaged properties. If the Federal Government 

takes possession of these mortgages, questions like ‘‘who will replace the roofs and windows,’’ will abound. 

That is why I have introduced H.R. 7113, 

the Preserve our Neighborhoods Act, a bill 

which would allow communities who have 

been hit hardest by the foreclosure crisis to 

purchase the mortgages acquired by the 

Treasury during the course of the bailout. This 

would allow these local governments to take 

abandoned, blighted properties, and redevelop 

them for more productive use. 

Additionally Madam Speaker, I have joined 

my Ohio colleague Congressman STEVE

LATOURETTE in attempting to amend the current package to reduce the amount of the initial bailout payment, and increase Congress’s 

role in allocating additional funds. Both of 

these provisions would provide some commonsense reforms to this bill—these provisions would add accountability to the bailout 


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payment, and address a real problem that’s 

facing local communities. 

Congressman Representing Ohio’s Statement H.R. 1424 Concurring to the Senate A 

Speaker, 

But sadly Madam Speaker, these reforms 

are not a part of this package. Instead, we 

have essentially the same package we had 

before, only with tax credits and earmark 

spending. Any legislation that we bring forward 

should hold the right people accountable and 

prohibit the bad lending actions that led to this 

crisis. Today’s bill fails in this respect and 

therefore leaves us vulnerable to the same situation in the future. 

While I am in favor of the tax extenders and 

have voted in favor of mental health parity, 

both of which are included in the current package, the underlying problem still remains: how 

does the federal government address the foreclosures that have led to this mess. Something should be done Madam Speaker. Something should be done to fix this problem. Unfortunately, H.R. 1424 is not the solution. 

Mr. PAUL. Madam Speaker, only in Washington could a bill demonstrably worse than its 

predecessor be brought back for another vote 

and actually expect to gain votes. That this 

bailout was initially defeated was a welcome 

surprise, but the power-brokers in Washington 

and on Wall Street could not allow that defeat 

to be permanent. It was most unfortunate that 

this monstrosity of a bill, loaded up with even 

more pork, was able to pass. 

The Federal Reserve has already injected 

hundreds of billions of dollars into U.S. and 

world credit markets. The adjusted monetary 

base is up sharply, bank reserves have exploded, and the national debt is up almost half 

a trillion dollars over the past two weeks. Yet, 

we are still told that after all this intervention, 

all this inflation, that we still need an additional 

$700 billion bailout, otherwise the credit markets will seize and the economy will collapse. 

This is the same excuse that preceded previous bailouts, and undoubtedly we will hear it 

again in the future after this bailout fails. 

One of the most dangerous effects of this 

bailout is the incredibly elevated risk of moral 

hazard in the future. The worst performing financial services firms, even those who have 

been taken over by the Government or have 

filed for bankruptcy, will find all of their poor 

decision-making rewarded. What incentive do 

Wall Street firms or any other large concerns 

have to make sound financial decisions, now 

that they see the Federal Government bailing 

out private companies to the tune of trillions of 

dollars? As Congress did with the legislation 

authorizing the Fannie and Freddie bailout, it 

proposes a solution that exacerbates and encourages the problematic behavior that led to 

this crisis in the first place. 

With deposit insurance increasing to 

$250,000 and banks able to set their reserves 

to zero, we will undoubtedly see future increases in unsound lending. No one in our society seems to understand that wealth is not 

created by government fiat, is not created by 

banks, and is not created through the manipulation of interest rates and provision of easy 

credit. A debt-based society cannot prosper 

and is doomed to fail, as debts must either be 

defaulted on or repaid, neither resolution of 

which presents this country with a pleasant 

view of the future. True wealth can only come 

about through savings, the deferral of present 

consumption in order to provide for a higher 

level of future consumption. Instead, our Government through its own behavior and through 

its policies encourages us to live beyond our 

means, reducing existing capital and mortgaging our future to pay for present consumption. 

The money for this bailout does not just materialize out of thin air. The entire burden will 

be borne by the taxpayers, not now, because 

that is politically unacceptable, but in the future. This bailout will be paid for through the 

issuance of debt which we can only hope will 

be purchased by foreign creditors. The interest 

payments on that debt, which already take up 

a sizeable portion of Federal expenditures, will 

rise, and our children and grandchildren will 

be burdened with increased taxes in order to 

pay that increased debt. 

As usual, Congress has shown itself to be 

reactive rather than proactive. For years, 

many people have been warning about the 

housing bubble and the inevitable bust. Congress ignored the impending storm, and responded to this crisis with a poorly thought-out 

piece of legislation that will only further harm 

the economy. We ought to be ashamed. 

Ms. SCHAKOWSKY. Madam Speaker, I rise 

in reluctant support of H.R. 1424, the Emergency Economic Stabilization Act. On Monday, 

the House failed to pass a rescue package, 

and the stock market dropped 777 points—the 

biggest one day point drop in US. history. The 

impact of that drop wasn’t just felt on Wall 

Street; it was also felt on Main Street. On 

Monday alone, Americans lost $1.2 trillion in 

the stock market. Almost 50 percent of Americans are invested in the stock market in some 

way, whether through retirement accounts or 

private investments, and they rely on credit 

and their investments to make ends meet. 

This legislation is about protecting people’s 

retirement accounts and pension plans. In the 

last year, investments have declined by nearly 

24 percent, putting the retirement security of 

millions at risk; I am worried that without this 

package, they will continue to the downward 

spiral. This legislation is about making sure 

that there is enough credit in order for students and families to take out loans to afford 

to go to college. It is about letting businesses 

make their payroll. It is about helping people 

stay in their homes. That is why dozens of 

groups representing educators, colleges, the 

homeless, pension managers, and others support this legislation, 

I want to make it very clear that I think this 

legislation is far from perfect—and, like many 

of my colleagues, I would have written a very 

different bill. However, I believe that Monday 

demonstrated that we had to act. Years of 

harmful Republican policies that pushed for 

deregulation and tolerated an almost total lack 

of enforcement, and a misguided philosophy 

that insisted that an unregulated market can 

heal all ills, have now led us to the brink of 

economic collapse. And I am deeply concerned—and hundreds of economists agree— 

that the failure to act could lead to a major 

economic depression. 

Again, the rescue plan, while still imperfect, 

has come a long way from where we began. 

Instead of giving the President $700 billion 

with virtually no oversight or safeguards, we 

require Congressional review after the first 

$350 billion. And this legislation requires equity sharing, so taxpayers would benefit from 

future growth in the investments they have 

bought, and it requires Wall Street to pay back 

any losses to the Government. We are stopping forms of executive compensation that 

would encourage executives to take excessive 

risks, eliminating golden parachutes for executives who take part in the Government program, and cracking down on excessive compensation practices for the first time in history. 

And we include strong, independent oversight 

to protect the taxpayer, including two oversight 

boards to ensure that the Treasury Secretary 

is acting on good faith, as well as judicial review over the Secretary’s actions. 

While I would have liked to see the tax provisions paid for by rolling back some of the 

President’s tax cuts to the wealthiest Americans and closing corporate loopholes, there 

are also important tax fixes that will benefit 

millions of Americans and small businesses 

across the country. The legislation provides 

property tax relief to up to 30 million homeowners—extending a new $1,000 property tax 

deduction for non-itemizing couples through 

the end of 2009. It extends the qualified tuition 

deduction for low- and middle-income Americans. It extends the child tax credit, which will 

benefit millions of Americans with children age 

17 and younger. It extends the Research and 

Development tax credit, which spurs innovation and job growth in the technology sector. 

And it extends critical renewable energy and 

energy efficiency tax credits to help the green 

economy take shape. 

This legislation also contains critical, comprehensive mental health parity legislation that 

will bring mental health insurance benefits in 

line with physical benefits. I have not held a 

health care meeting in my district without the 

issue of access to mental health care being 

brought up by my constituents who have faced 

discrimination or difficulty obtaining affordable 

care. I am proud that we are continuing Senator Paul Wellstone’s legacy by passing a bill 

that guarantees equal access to mental health 

and substance abuse treatment. I also want to 

thank Representatives PATRICK KENNEDY and 

JIM RAMSTAD for their persistence and passion 

in passing the Paul Wellstone Mental Health 

and Addiction Equity Act. 

There is so much more we should do. I am 

strongly committed to enacting a second stimulus package that will truly benefit the American people. Today the House enacted 7 

weeks of extended benefits for workers who 

have exhausted regular unemployment compensation, with workers in high unemployment 

states eligible for an additional 13 weeks of 

benefits. However, I believe we also need to 

make investments in our highways, bridges, 

transit systems, and schools; we need increases in food stamps benefits; and we need 

a crucial temporary increase in Medicaid payments to States. Studies have shown that 

those are some of the quickest forms of economic stimulus because those benefits and investments are spent quickly. 

This bill represents unfinished business. I 

will fight my hardest to make sure that we rein 

in the excesses of corporate America in the 

next Congress, and to see to it that this crisis 

does not happen again. 

Mr. TIAHRT. Madam Speaker, at the end of 

the day, I was sent to Congress in November 

1994 because the people of the 4th congressional district of Kansas believed in the message of less Government spending, personal 

and corporate responsibility and lower taxes. 

Therefore, I remain committed to those who 


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sent me here and opposed to the unprecedented power that would be given to the Federal Government through this bill. 

Last week, the Treasury Secretary came to 

Congress with a message: he needed $700 

billion and he needed it now. I understand the 

need to act and the need to act quickly. At 

that time, however, I stood with my Republican colleagues and opposed the hasty call 

for an unprecedented blank check to the Federal Government. 

Over the weekend, Congress negotiated 

with the Secretary to work out a better proposal through several non-government based 

approaches. Some of the provisions I could 

support but the fact remains that a $700 billion 

bailout of Wall Street is too much for our taxpayers to bear. 

On Monday, I joined with a majority of my 

Republican and Democrat colleagues to defeat this short-sighted fix that exposed Americans everywhere to long-term debt that could 

lead to an even greater financial crisis. 

Not wanting to be outdone, the Senate 

quietly inserted over a billion dollars worth of 

pork: $148 million for wool fabric producers, 

$2 million for the makers of wooden arrows for 

children, and a $100 million tax break to benefit NASCAR racetracks. Even Hollywood got 

a tax break gift worth nearly half a billion dollars. 

What was a three-page idea had grown in 

a week to more than 450 pages. 

What it comes down to is that a $700 or 

$800 billion bailout with voluntary reforms was 

not a plan I could support. Worse yet, Sec. 

112 of the Senate bill, allows foreign financial 

institutions who hold troubled assets as a result of extending financing to financial institutions that have failed or defaulted on such financing to participate in this massive Government bail-out. What does this mean? Simply, 

the Federal Government has invited foreign 

financiers to participate in this bailout on behalf of every American. 

However, my decision today to oppose the 

Senate bill does not come easily. Many of us 

lost savings. Many employers expressed concerns about access to credit so they could 

make payroll for their workers. I heard from 

hard-working Kansans who were concerned 

about a downsized economy that could force 

them out of a job. 

A quick bailout fix might work for a short 

time, but it may not be long before we are 

asked again for more tax dollars. This is evidenced by recent Government bailouts of Bear 

Stearns, Freddie Mac and Fannie Mae, AIG, 

and the $25 billion tossed to the auto industry. 

A quick bailout fix might work for the short 

term, but without addressing the underlying 

problems, we will be asked again for more tax 

dollars. 

An economic rescue plan needs to include 

reforms that tie mortgage broker’s commissions to borrowers’ timely payments; a mandatory FDIC-type insurance program for entities 

with troubled mortgages; a suspension of 

‘‘mark to market’’ accounting procedures; a 

temporarily suspension of capital gains taxes; 

and a permanent, not a temporary increase on 

FDIC coverage from $100,000 to $250,000 

coupled with an increase in premiums so that 

the statutory obligation of 1.15 percent is met. 

The mandatory FDIC-type insurance program would require the Treasury Department 

to guarantee (losses up to 100%) resulting 

from the failure of timely payment and interest 

from mortgage backed securities originated 

prior to the date of the enactment. Such insurance, I believe, would provide immediate 

value to the securities and a foundation for 

which they could then be sold. I am disappointed this provision was not included as a 

mandatory program. 

Furthermore, instead of a Government-driven bailout, I support an alternative where the 

Government enables and coordinates a greater involvement of private investors. An alternative could be to allow companies to carryback losses arising in tax years ending in 

2007, 2008, or 2009 back 5 years, generating 

a tax refund and immediate capital. 

These are just a few alternative provisions 

that I believe would be better than merely 

throwing money at a problem we hope to fix. 

I want Kansans to go to bed tonight with 

peace of mind and not worry about their savings. I am ready for this financial turmoil to 

calm and for us to focus on other important 

things in our lives. But I could not support a 

$700 or $800 billion bailout plan that embraces temporary relief while shunning longterm reform that brings lasting stability. 

I remain committed to working for a longterm solution with Democrats and Republicans 

who are willing to put the good of our country 

ahead of short-term fixes. It’s the right thing to 

do. 

Mr. LATHAM. Madam Speaker, we have all 

heard from thousands of our constituents on 

this measure over the past two weeks. I spoke 

to one constituent of mine from Iowa yesterday who contacts me regularly to express her 

opinions and ideas. When discussing her opposition to this bill she summed up the frustrations of Iowans and the overwhelming majority 

of people across this country. She said ‘‘the 

people out here in the heartland see this bill 

and bailout as a result of Washington talking 

to Washington—and not talking and listening 

to the real people beyond the beltway.’’ 

She hit the nail on the head. This measure 

today is a true result of Washington talking to 

Washington, of Congressional partisanship 

blinding the legislative process and blocking 

the chance for real common sense comprehensive solutions, and members of an administration that are quicker to respond to the 

needs and pain of Wall Street than the needs 

and reality on Main Street. 

The measure we voted on Monday was 

based almost exactly on the original plan of 

one man—that of Treasury Secretary Henry 

Paulson. This plan was sold to us with no 

guarantee of success—even from its author. 

This plan was created and based on a randomly selected price tag of $700 billion to the 

American taxpayers. When asked about why 

that number was chosen, a spokesperson for 

the Treasury Department responded in a news 

article last week that they came up with it because they wanted ‘‘a really large number.’’ 

Additionally, the question has to be asked of 

this plan—is it morally right to spend hundreds 

of billions of dollars to reward and benefit 

those on Wall Street who were knowingly involved in risky and, sometimes, exotic financial investments that were hidden from the 

eyes of Federal regulators? 

Why is Washington so quick to focus on the 

needs of Wall Street at the cost of those responsible Iowans who have sacrificed, saved, 

and spent within their means? 

No wonder real America has lost faith in 

Washington. 

I voted against almost this same measure 

on Monday afternoon. It was a tough vote but 

it was the right vote. I took that vote so we 

could sit down as Americans who are truly interested in the well-being of all people in this 

Nation to find a more acceptable path—a well 

thought out common-sense path. After all, we 

do agree that something must be done to try 

and save this Nation and her people for what 

would be a devastating period of economic 

disaster. 

My hopes, and the hopes of the majority in 

this country, were dashed after the U.S. Senate not only embraced the plan we voted 

down earlier in the House, but added an even 

larger price tag on American taxpayers. And, 

the Senate—as only could be done in Washington—added hundreds of millions of dollars 

in pork to the bill to fund children’s wooden arrows, race tracks and Puerto Rican and Virgin 

Islands rum. The Senate turned a deaf ear to 

the cries of the American people who are opposed to this measure and decided to add 

even more unwanted items to their tab. 

In the interest of full disclosure the Senate 

did add items that I fully support. Important 

provisions that could help Iowa’s renewables 

industry—in wind, solar and biofuels—that 

could help Iowans who are struggling to rebuild after the devastating floods of this summer, and other common sense measures that 

include increasing FDIC insurance limits. 

But the foundation of the Senate bill that we 

are considering today remains the same—the 

randomly selected $700 billion plan that was 

the creation of one man, that empowers that 

one man to spend the money as he sees fit— 

yet has no guarantees for success or even realistic protection provisions that will close the 

taxpayer’s check book if the plan is not working. I could never trust anyone person with 

complete discretion of $700 billion of taxpayer’s money—no strings attached. 

As the members of this body know, I joined 

with a group of my colleagues yesterday to 

work to provide Washington with one last option other than the plan of based on a randomly selected number. 

We drafted an amendment that would give 

Secretary Paulson $250 billion to use as proposed in his original plan. Even he has said 

that he could only spend at the most $50 billion a month. This gives him at least five 

months to see if his plan is working, and if it 

is proving to have success for all of America’s 

economy, then he can return to Congress to 

request the remaining funds. While I know 

even $250 billion is unacceptable to many fiscal conservatives, the plan gave the American 

people some level of control over their tax dollars to know that a plan based on a randomly 

selected number would have to show success 

and benefits to main street before it was permitted to move forward beyond that additional 

smaller price tag. 

Our amendment also gave us time—time to 

come back here and discuss alternatives for 

the good of the nation as a whole. 

I believe that this amendment would have 

received overwhelming bi-partisan support 

from the rank-and-file members whose voices 

were shut out of this process. 

Unfortunately, what has become standard 

operating procedure for a broken Congress, in 

a broken Washington, the members of this 

body—representing the hundreds of millions of 

people in real America—were not even allowed the opportunity to vote on an alternate 


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plan. Instead we are forced to consider—up or 

down, no committee hearings, no committee 

votes—this plan based on a randomly selected number. 

This week I have spoken with and listened 

to the reality of the economic landscape from 

small business employers throughout Iowa. I 

have heard from farmers, from colleges, from 

community governments, realtors, car dealerships, utility companies, and hometown bankers—employers of hundreds of thousands of 

Iowans. They all have told me of the reality of 

their experiences with credit markets, the reality of economic turbulence, and the real 

fears that if nothing is done soon that Iowa is 

facing economic disaster like most of us have 

not seen in our lifetime. These are real people 

from real town America, who are doing the 

right things, providing good jobs for good people, who are leaders in their community and 

staples of the local economies who are suffering and face economic disaster not because 

of decisions they have made, but because of 

the decisions made on Wall Street and in 

Washington. 

It is clear to all of us that action is needed 

to protect our economy. But is this plan really 

the right action we should take? After all, supporting this bill just for the sake that we agree 

that action is needed does not guarantee that 

we are moving in the right direction. And, for 

those who are suffering in real America, actions we take now that are not fully debated 

and discussed could end up causing more 

economic harm over the long term. 

The events of the past two weeks—and the 

resulting proposal that we are forced to consider today—make it painfully clear to me, and 

millions of Americans, that Washington is unwilling, or incapable, of listening to anyone but 

Washington. 

That is why I must stand on principle once 

again today and vote against this measure 

with the hope that Washington will wake up 

and—immediately following this vote—begin 

the responsible process of working together, 

working with the American people to find a solution that is well considered based on fundamental economic principles that addresses the 

real needs of real America—real main street. 

These are the principles on which our Nation 

was founded and these are the principles that 

we have the duty as Americans to stand up 

and protect. 

Mr. FORTENBERRY. Madam Speaker, the 

choice before us today is not between action 

and inaction. 

That is a false choice. 

Clearly there is a very serious economic 

challenge. The decision before us is whether 

to adopt a potential $700 billion taxpayer liability to nationalize bad corporate debt or an alternative that may be less costly, easier to implement, and fairer to most Americans who 

have no blame for this mess. 

Earlier in the week, many of us said no to 

this, and because we said no, many helpful 

changes were made such as FDIC increases 

and a change in accounting rules that may be 

artificially driving down asset values. 

I know every Member is making a tough 

judgment call according to their conscience. 

But I have not heard a single Member say: 

‘‘I really believe in this. This will work.’’ 

Instead we hear: ‘‘It stinks, it’s the best we 

got, our problems will get worse, and we’ve 

got to get it done.’’ 

Madam Speaker, we are the legislative 

body. We make the law. There are other reasonable options that could be unpacked— 

hopefully quickly—to address falling asset 

value, increase liquidity, and provide needed 

capital. 

Ms. KILPATRICK. Madam Speaker, it is 

with significant reluctance and reticence that I 

will vote yes, on final passage, of the Economic Recovery Act. In the State of Michigan, 

which is facing record high unemployment, 

failure of businesses, and increasingly tighter 

credit markets, we must do something, right 

now, to ensure that the citizens, businesses, 

and organizations of the city of Detroit, the 

State of Michigan and the United States of 

America survive. This is not a perfect bill. I 

would have preferred that Congress explore 

other options, most of which did not involve a 

single dime from taxpayers, as was utilized 

during the savings and loan crisis, in a more 

deliberate manner. The provisions in the bill 

that ‘‘recommend’’ and ‘‘suggest’’ that the Secretary of the Treasury protect senior citizens, 

working families and others facing foreclosure; 

that ensure the utilization of qualified ethnic 

minority and women owned businesses, 

among others, need monitoring and oversight. 

The provisions are woefully inadequate and 

need improvement. 

My yes vote, and it is perhaps one of the 

most difficult votes I have made in my 30 

years as a public servant, is a reflection of the 

fact that if Congress does not do something 

soon, we possibly face an economic Armageddon the likes of which we have not seen since 

the Great Depression. Since I voted against 

the first version of this bill, the stock market 

has dropped a net of over 500 points and over 

one trillion dollars in total value. Our labor 

market has lost over 200,000 jobs in the 

month of September. Inflation has risen to 

new highs. My office has been besieged with 

phone calls from hundreds of small- and medium-sized businesses that cannot purchase 

goods or services or meet their payroll because they cannot access their lines of credit. 

Parents in Michigan are concerned that they 

cannot secure student loans for their children. 

This inevitably hurts all Americans. 

The Constitution of the United States, to 

which each and every Member of Congress, 

the House of Representatives and the Senate, 

takes an oath to protect and defend at the beginning of each 2-year session of Congress. 

Article I, Section 9, clause seven, of the U.S. 

Constitution says ‘‘no money shall be drawn 

from the Treasury but in consequence of Appropriations made by law.’’ The Constitution 

also establishes three separate and distinct 

branches of government: the legislative, judicial and executive branches. As an Appropriator and for our U.S. House of Representatives, I oppose this bill’s unprecedented and 

unparalleled secession of the power granted 

to us by the people and the Constitution transferred to one appointed person from the executive branch of the Federal Government. 

Households in Detroit, the State of Michigan, and America feel the rumblings of the financial earthquake beneath their feet. Unemployment has risen to all-time highs. Michigan 

is one of the leading States in unemployment, 

home foreclosures as well as business losses. 

The sudden, precipitous and dramatic slump 

in home values, retirement accounts and pensions is a prelude to worse things to come. I 

have fielded dozens of phone calls from businesses in my district from small convenience 

stores and automobile dealerships, to large 

corporations that are unable to access credit 

lines to make their payrolls. Without swift, immediate, and strong fiscal action and direction, 

America and Americans are in dire trouble. 

Again, it is impossible for parents to get student loans for their children attending college. 

It is virtually impossible to get a mortgage with 

a rate that is reasonable. It is hard to find a 

decent, paying job. Again, it is tough for businesses to get loans to purchase those goods, 

items, and services that mean the difference 

between surviving and thriving, or even making their payroll. We have lost hundreds of 

thousands of jobs in America this decade. 

This bill is not a cure-all, by any means. However, it is a start to stop the bleeding from 

which so many of our citizens and businesses 

suffer. 

This bill does contain several provisions for 

which I fought and support. The bill will immediately increase the Federal Deposit Insurance 

Corporation’s, FDIC, limit from $100,000 to 

$250,000, which will increase confidence citizens have in our banking system and prevent 

bank runs. The home foreclosure provision allows the Secretary, at his discretion, to lower 

the interest rate and, in some cases, the principal of home mortgages, ensuring that more 

citizens will stay in their homes and not on the 

streets this winter. This bill will provide property tax relief to up to 30 million homeowners—extending a new $1,000 property tax 

deduction for non-itemizing couples through 

the end of 2009. Finally, the bill provides that 

minority- and women-owned businesses, 

along with minority professionals, at the suggestion of the Secretary of the Treasury, will 

be included as contractors and analysts and 

will hopefully get a portion of the $700 billion 

that will be utilized by Secretary Paulson to 

stabilize our economy. 

A key aspect of this bill that will become law 

is mental health parity for all Americans. Regrettably, too many private health insurers 

often provide less coverage for mental illnesses than for other medical conditions. 

Many insurers believe that mental health disorders are tough to diagnose, and that care 

for mental illness is ineffective, expensive and 

simply not worth the money. Thanks to this 

bill, all Americans will have access to mental 

health care. When mental health care is a part 

of our general health care, there is often little 

or no increase in cost to insurers. This is a 

most important aspect of the bill and is an aspect of which we all can be proud. 

While these provisions are not as strong as 

I would like, my opposition to the overall bill, 

or to these provisions, is not strong enough to 

risk the enormous battering that continues to 

hammer our families and our economic system. The economic consequences of inaction 

are such that the citizens and businesses of 

our State and our Nation might not survive. 

That is a risk that I refuse to take. I will continue to fight for even stronger rules and regulations as we work in the wake of this bill, 

under a new Democratic President. 

With the faith of God, with the support of the 

people of Michigan, and with the guidance and 

leadership of my ancestors, I will continue to 

work and fight to ensure that American families will be able to stay in their homes; that 

businesses will come back even stronger and 

employ, engage and ensure that more people 

have decent, fair paying jobs; and that Detroit 

and Michigan will rise to the heights that once 


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made it, and America, the world’s manufacturing powerhouse. My support of this bill is a 

beginning step in that direction. 

Ms. SPEIER. Madam Speaker, Wednesday 

night, before returning to Washington, I had a 

telephone townhall in my district with over 

5500 constituents. 

I’m here to report that they are angry. 

They are angry that the Government allowed Wall Street mega-banks and manipulators to act so irresponsibly that they have led 

our economy to the brink of disaster. 

They are angry that for over a decade, 

greed and abuse have been considered higher 

virtues than oversight and regulation. 

Madam Speaker, I’m angry, too. Because of 

the mess we’re in, school districts back home 

have lost hundreds of millions of dollars in 

their reserve accounts. A San Bruno man who 

worked for 30 years at United Airlines is seeing his pension dissolve before his eyes. And 

Tony, an independent businessman from San 

Carlos, will likely have to close his remodeling 

business if he is unable to get short-term credit for supplies. 

Now we hear that the State of California 

may have to declare bankruptcy. These reasons are why I will vote for this bill. 

But Madam Speaker, no one should interpret this vote as approval of the situation we 

find ourselves in. 

This anger will not easily dissipate. We must 

commit ourselves in the next Congress to reregulate the markets and repair the damage 

that years of ineptitude and inattention have 

wrought on our economy. 

Mr. BLUMENAUER. Madam Speaker, I do 

not support this economic recovery bill. While 

it is imperative that Congress act to address 

this financial crisis, this mixed bag of legislation is not the appropriate immediate or longterm solution. The hard work done by the 

Democratic leadership over the past week has 

made it better, but it’s still not good enough. 

It doesn’t go far enough to protect taxpayers 

or to help homeowners stay in their homes. I 

have been very vocal on the floor of the 

House of Representatives about my concerns 

that this proposal won’t help our financial situation and may be beside the point. 

There are some extremely important provisions in the bill for which I have fought during 

the past 2 years. For example, the bill extends 

the production tax credit for wind energy and 

investment tax credit for solar energy. It includes legislation I drafted to provide a tax 

credit for the purchase of small wind turbines. 

And it provides tax fairness so employers can 

offer the same transportation fringe benefits 

for bicyclists that they offer to employees who 

commute by car and public transit. 

I’m pleased that this bill will reauthorize the 

Secure Rural Schools program, which is so 

important to Oregon. I’m pleased that it will 

prevent the Alternative Minimum Tax from impacting millions of hard-working, middle class 

families. 

The bad news is that, at a time when our 

national debt is at its highest point in over 50 

years as a percentage of GDP, Senate Republicans chose not pay for most of the good 

things in this bill. I’m disappointed that the 

Senate also added a number of provisions to 

the bill that will provide incentives for coal-toliquids and oil-shale fuels, which take us in the 

wrong direction in our battle against climate 

change. 

I hope this bill works to protect our commercial system, but I fear that it won’t. I will continue to fight to deal with the consequences of 

added debt and poor energy investment 

choices. I look forward to closely scrutinizing 

the choices that the Treasury Department 

makes as a result of this legislation and working to improve the position of ordinary homeowners, American taxpayers, and our environment. 

Ms. ROYBAL-ALLARD. Madam Speaker, I 

rise in opposition to H.R.1424, the Emergency 

Economic Stabilization Act of 2008. 

There is little debate that there is a real crisis in our financial markets, and I share the 

sense of urgency felt by my colleagues as we 

look to bring stability to the financial sector 

and ensure the availability of credit to all 

Americans. 

I had hoped that when a new bill came to 

the House, it would be a comprehensive package that would include greater accountability 

from Wall Street, greater protections for Americans on the verge of losing their homes, and 

an economic stimulus package that would create jobs to strengthen our economy. 

The Senate did include important and beneficial provisions. I strongly support the addition 

of an increase in the FDIC’s insurance cap to 

$250,000 and favor many of the included tax 

provisions such as renewable energy and research and development tax credits. In addition, I have consistently advocated for the 

mental health parity legislation that was the 

vehicle for this measure. 

However, despite these commendable additions, I must remain opposed to the underlying 

plan of committing $700 billion of taxpayer dollars to an untested plan with an uncertain outcome and inadequate regulations and oversight. 

While the bill begins to address the foreclosure crisis, its provisions are far from what 

many economists believe is needed to have a 

consequential impact on the American families 

who are losing their homes. To truly help stop 

the bleeding, I believe we must get at the root 

of the problem by including measures such as 

lifting the ban on loan modifications for primary residences during bankruptcy proceedings. This would enable homeowners to 

stay in their homes by renegotiating their 

loans. Preventing foreclosures will protect families, communities, and our economy. 

I am also concerned that while the measure 

creates a congressional oversight panel, the 

panel lacks teeth and can only make nonbinding recommendations. If the taxpayers are 

expected to stomach a $700 billion bailout, we 

have to insist on greater oversight authority. 

Finally, this bill is simply a temporary bandage if it does not include economic stimulus 

provisions that will create the jobs needed to 

strengthen our economy and improve the financial condition of the average American. 

While the problems on Wall Street have 

reached a breaking point, ordinary Americans 

have been feeling the pain of weakness in the 

economy for a very long time. 

If this legislation passes it is simply a stop 

gap measure. I am heartened by the comments of Chairman FRANK who committed to 

reforming our financial regulatory and oversight system and by Speaker PELOSI promise 

that we will come back and consider stimulus 

proposals that will truly help grow our economy and positively impact those who have 

been hurt by this crisis. 

Madam Speaker, while I agree that inaction 

is not an option, I also believe we can, and 

must, do better than this legislation. I urge a 

no vote. 

Mr. WOLF. Madam Speaker, when the 

House responded to the economic crisis facing our country and considered a financial rescue plan this past Monday, September 29, the 

vote failed 205–228. Because of my deep belief that Congress must take action to restore 

the confidence and stability in the Nation’s financial system and keep credit flowing to the 

people of Virginia and to households across 

the country, I voted for that legislative package 

and enclose for the RECORD my statement that 

day explaining my vote. 

I have never been more concerned about 

the financial future of our country. Following 

the results of the House vote, there was a 

record 1-day point drop in the stock market 

that wiped out $1.2 trillion in wealth that average folks have tied up in retirement accounts, 

pension funds, and college savings. While 

there was a short-lived rebound on Tuesday, 

the market has continued on a downward spiral. 

The latest unemployment figures announced 

today showed that the economy shed 159,000 

jobs in September, the steepest drop in 5 

years and the ninth straight monthly decline. 

Also that day, world stocks fell to a new 3- 

year low. This news, combined with reports 

this week that U.S. auto sales fell in September by 27 percent from a year ago, points 

to a worrisome sign that credit is tightening 

and the economy is hurtling toward a deep recession. 

If we don’t deal with this financial crisis now, 

foreign governments like China and Saudi 

Arabia, who already hold a significant portion 

of our debt, are waiting in the wings to buy up 

even more of America. We cannot allow 

China—a country that persecutes its own people because of their faith—or Saudi Arabia— 

which breeds the kind of radical ideology that 

led to the terrorist attacks on our country—to 

own what generations of Americans have 

worked so hard to build for their children and 

grandchildren. 

After the House’s failed vote, the Senate 

worked to revise the bipartisan package. The 

new bill includes the base of the economic 

rescue plan voted on in the House plus additional taxpayer protection and tax relief provisions and was passed by the Senate 74–25 

on Wednesday. Because I continue to believe 

that this Congress must act to restore confidence in our economy, I will vote today for 

this amended measure. 

The revised bill has significant new safeguards for taxpayers and important tax relief 

provisions that will increase the amount of 

bank deposits insured by the FDIC from 

$100,000 to $250,000 through 2009, to help 

stop a run on banks; protect 21 million working, middle-class families from getting hit with 

an average tax hike of $2,500 from the Alternative Minimum Tax, AMT, for tax year 2008; 

extend critical energy tax credits and incentives to encourage conservation and the development of renewable energy technologies 

such as wind and solar power; extend tax deductions on State and local sales taxes and 

out-of-pocket expenses for teachers; expand 

the income threshold used to calculate the refundable portion of the child tax credit; extend 

a property tax deduction to homeowners who 

don’t itemize, and provide tax relief for those 

in areas hit by recent natural disasters including hurricanes and floods. 


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H10786 CONGRESSIONAL RECORD — HOUSE October 3, 2008 

As in the original legislation, the revised 

measure authorizes up to $700 billion for a 

troubled assets relief program for the Treasury 

secretary to buy mortgages and other assets 

that are clogging the balance sheets of financial institutions and making it difficult for working families, small businesses, and other companies to access credit. While the legislation 

gives the Treasury secretary an immediate 

$250 billion for the program, it requires the 

president to certify that additional funds are 

needed, $100 billion, then $350 billion subject 

to congressional disapproval. The assets acquired by the Treasury will eventually be sold. 

Many economists believe that if they are purchased at appropriate discounts, it is fair to 

say that the Treasury will recoup the taxpayers’ investment or could even turn a profit 

over the long-run. 

The measure also provides strong watchdog 

authority over the Treasury through an oversight board and a special inspector general to 

protect against waste, fraud and abuse. The 

bill also ensures that irresponsible corporate 

executives at institutions participating in the 

Treasury program will not be rewarded with 

multi-million dollar ‘‘golden parachutes’’ or severance pay. The FBI continues to pursue corporate fraud investigations related to lenders, 

brokers, and appraisers involved in the mortgage and sub-prime loan crisis. 

I understand the concerns raised about the 

response to the financial crisis our country is 

facing. This package, including some provisions added by the Senate, is certainly not 

perfect. But I can’t pick and choose from the 

parts. As I said in my statement after the 

House’s initial vote, credit is the lifeline of our 

economy. Overall I believe this plan is vital to 

protect the long-term economic future of our 

country and to ensure that people in my congressional district as well as folks across 

America are able to keep their jobs, get a 

home loan or car loan or a student loan to 

send their kids to college, and protect their 

savings and the value in their retirement accounts. 

I have always worked for the best interest of 

the taxpayers and residents of the 10th District 

which I represent. I am voting for this package 

because in good conscience I cannot stand by 

and watch the financial futures of the people 

across America tumble toward ruin not seen 

since the Great Depression. I believe this vote 

is the right thing to do at this time for our 

country. 

The American people are understandably 

angry that our Nation’s financial condition has 

reached this point and I understand the worry 

that has brought. I’m angry and worried, too, 

and share the concerns of the scores of people from the 10th District who contacted me in 

recent days. I understand when folks say they 

don’t want to ‘‘bail out’’ Wall Street when they 

see the greed and irresponsibility we’ve witnessed from some in the financial system 

gambling with other people’s money and losing. Experts say that the root of the current financial crisis can be traced to the collapse of 

the sub-prime mortgage industry and the impact of high-risk loans on the Nation’s housing 

industry. 

I agree and also share the concern about 

reports that some CEOs on Wall Street and 

top executives at Fannie Mae and Freddie 

Mac—which are now in Federal conservatorship—have gotten sweetheart deals and bonuses in the millions of dollars. That kind of 

action must not be rewarded and that’s why I 

applauded the news that the FBI as well as 

the Justice Department and the Securities and 

Exchange Commission have launched investigations into potential criminal cases against 

firms accused of contributing to the market 

collapse. 

But I’m more worried about the people of 

Virginia and across America if we don’t respond to the collapse in the credit markets in 

our country. We face a financial crisis and 

threat to the U.S. economy the proportions of 

which many say we haven’t seen since the 

economic collapse of the Great Depression. 

For the past few weeks, the news has been 

filled with reports of some of the most prominent financial institutions in our country in free 

fall. Just this Monday, Wachovia, one of the 

largest banks in Virginia and perhaps a bank 

you or your family or neighbors use, was sold, 

and more banks are expected to fail. 

Access to credit is the lifeline of our economy. I’m worried that if we don’t take the necessary action to shore up the Nation’s credit 

system it will be the mom and dad in Herndon 

who won’t be able to get a student loan to 

send their kids to college or buy a new house, 

or the young college graduate in Leesburg 

who won’t be able to get a loan to buy a first 

car, or the older couple in Winchester nearing 

retirement whose nest egg in a 401(k) account 

is losing value, or the mom and pop store 

around the corner in Front Royal that can’t get 

the loan to make payroll, or the family in Manassas who need to sell their house but watch 

as home values drop and the prospective 

buyer can’t get a home loan. 

I believe this crisis calls for extraordinary action. Some say without action millions of jobs 

could be lost. I believe the legislative package 

before Congress was mis-named as a ‘‘bailout.’’ It is important to understand that it was 

a depression prevention plan to help restore 

confidence in and stabilize our country’s credit 

system and ultimately the American economy. 

No legislation is ever perfect and there will be 

people of good will who disagree. But in tough 

times, it is the responsibility of lawmakers to 

act and make tough choices. 

I voted for this legislation today because I 

believe it was the right thing to do to begin the 

process of resolving this crisis and setting the 

country’s financial institutions on sound footing. This legislation was a bipartisan compromise dramatically changed and improved 

from the original proposal and forged after 

tough negotiations between both political parties and the call that the measure must first 

and foremost protect taxpayers’ investment 

and have transparency, accountability and 

oversight. 

The package fulfilled those goals by: 

Providing the Treasury secretary with authority to buy troubled assets currently held by 

financial institutions, but cut in half Secretary 

Paulson’s original proposal of $700 billion in 

up-front, immediate authority. The plan would 

allow $250 billion in immediate authority, with 

another $100 billion available after the Secretary reports to Congress, and providing Congress with the authority to withhold the remaining $350 billion, assuring that economic 

assistance will be financed by Wall Street, not 

Main Street. Many economists predict that ultimately taxpayers will see all their investment 

fully recouped. 

Providing transparency and oversight 

through establishment of a bipartisan oversight 

commission, split evenly between minority and 

majority; reporting requirements to ensure 

proper reports to Congress and the public; a 

special inspector general; a financial stability 

oversight board; strict conflict of interest and 

unjust enrichment rules, providing that if after 

5 years the Government has a net loss of taxpayer funds as a consequence of the purchase program, the president will be required 

to submit a legislative proposal to recoup such 

funds from program beneficiaries. 

Protecting taxpayers—not shareholders and 

not corporate executives—against loss by 

placing taxpayers first in line to recoup losses 

from participating financial institutions in the 

event they fail or lose money. 

Prohibiting executive compensation or golden parachutes to ensure bad actors on Wall 

Street are not rewarded. 

Requiring the establishment of an insurance 

guarantee program that in lieu of purchasing 

assets with taxpayer funds is available to insure assets at no cost to the taxpayer. Costs 

would be fully paid for by participating companies, i.e., those receiving the assistance. Assets insured by the program would count 

against the total funds the Treasury secretary 

would otherwise have available to make purchases. 

In considering this package I had to answer 

this question: What is the consequence of 

doing nothing to help stop the hemorrhaging 

of the Nation’s credit system, and even the 

broader consequence of a potential worldwide 

depression? I had to decide what is in the 

best interest of our country and the taxpayers 

and residents of this congressional district. 

When faced with that decision, I cast my 

vote for the legislative package. I was disappointed that the bill failed passage by a vote 

of 205–228 and that a majority of my House 

colleagues both Democrat and Republican did 

not recognize the need to shore up our financial system and restore the flow of credit to 

help protect Main Street America. 

Just minutes after the final vote, the Dow 

Jones industrial average dropped over 700 

points and closed for the day down 778 

points, the largest one-day point drop in history. The broadest measure of the American 

stock market, the Standard & Poor’s 500– 

stock index, fell 8.77 percent, its biggest drop 

since October 1987. The failure to approve the 

legislation resulted in uncertainty and turmoil 

in the markets, eroding billions of dollars in individual savings and household wealth. In a 

few hours, an estimated $1.2 trillion in assets 

lost their value—that is people’s retirement accounts, pension funds, and college savings. 

With the failure of the legislation, it is uncertain what the next step will be, but the crisis 

in the financial markets continues, and congressional leaders have pledged to go back to 

work and negotiate a bipartisan solution to restore confidence in the markets and come 

back to the House for another vote. No matter 

what final legislation is enacted to help stem 

the current crisis, I believe Congress has lots 

of work to do in the future to reform financial 

market regulation so that our country is not 

faced with this kind of crisis in the future. 

The crisis in the credit markets, however, 

may be a symptom of a greater financial crisis 

on the horizon. We must come to grips with 

the national debt which is approaching $11 trillion. Then we must focus on the over $53 trillion in unfunded and unsustainable entitlement 

obligations we face as well as uncontrolled 


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Federal spending. The statistics are staggering and real. Standard and Poor’s Investment Service has indicated that the United 

States could lose its triple-A bond rating as 

early as 2012 if we do not take action to reverse course. By not dealing with this issue 

we are enabling foreign governments like 

China and Saudi Arabia to buy America. That 

is bad for our country. 

That’s why I introduced the SAFE Commission Act, H.R. 3654, with Democrat Rep. JIM

COOPER of Tennessee to set up a national bipartisan commission to put everything on the 

table and recommend to Congress a way to 

put our country on sound financial footing. The 

legislation requires an up-or-down vote by 

Congress. The Capitol Hill newspaper Roll 

Call said in an editorial that the SAFE Commission should be part of the discussion of 

any response to the financial markets crisis. 

Other newspapers and organizations across 

the political spectrum have agreed that the 

SAFE plan can be the way forward. 

P.S. I have based my service in Congress 

on the principles of honesty and integrity and 

doing what I believe is best for the people of 

this congressional district and the country. 

Mrs. MILLER of Michigan. Madam Speaker, 

I rise today in strong support of this legislation 

to provide some additional help to workers 

across this Nation who have been hard hit by 

our difficult economy. 

Just today it was announced that our national unemployment rate is 6.1 percent, terrible rate that unfortunately we would be ecstatic within my district. 

People are hurting and they need help. 

This bill will provide an additional 7 weeks 

of unemployment benefits for workers across 

the Nation and an additional 13 weeks for high 

unemployment states like my home State of 

Michigan. 

Earlier today we passed a $700 billion bailout for Wall Street companies whose bad 

business decisions have wreaked havoc on 

our economy. 

If we can hand over $700 billion to Wall 

Street we can certainly provide this minimum 

level of support to the workers who are among 

the victims of the bad actors on Wall Street. 

Let us all join together and pass this legislation that will provide real support for those 

who need it most, hard working people having 

a terribly difficult time finding work in our 

struggling economy. 

Mr. STEARNS. Madam Speaker, I rise 

today to express my reluctant and continuing 

opposition to the Emergency Economic Stabilization Act, H.R. 1424—a bill that was hastily crafted, inadequately vetted, and has now 

been made worse by an infusion of tax extenders and narrowly targeted earmarks, costing taxpayers $812 billion as reported by the 

Congressional Budget Office. 

This new bill is still flawed because its basic 

premise is that taxpayers have to take over 

these toxic loans from ailing institutions, and 

Secretary Paulson is still granted the unprecedented authority to purchase almost any troubled asset or financial instrument he deems 

necessary, effectively allowing him to become 

a financial dictator. Tax expert Ryan Ellis has 

rightly stated that with this bill, ‘‘Congress is 

giving a member of the executive branch virtually unlimited power for the entire economy.’’ 

The bill today is very similar to the legislation that was voted down only a few days ago, 

but this time it contains frivolous add-ons. With 

the exception of the necessary increase of the 

FDIC insurance limit to $250,000, which I am 

happy to see included, this bill leaves little to 

be desired for American taxpayers. 

To be specific, the Senate version of the 

Emergency Economic Stabilization Act that we 

are voting on today contains both energy and 

non-energy related tax extender language, targeted earmarks, and mental health parity legislation—provisions which have no business 

being placed into a bill which is meant to rescue our economy from a financial meltdown. 

The mental health parity bill that has been 

thrown into the 440-page Economic Stabilization Act federally imposes more financial responsibility on employers who are already 

struggling to pay for their employees’ health 

insurance, and will come at an additional cost 

of $3.8 billion dollars. Further, the bill we are 

voting on today contains narrowly targeted 

earmarks which are being described as ‘‘tax 

relief provisions.’’ Buried within this 440–page 

bill is a temporary increase in the amount of 

rum excise tax revenue paid to Puerto Rico 

and the Virgin Islands; a 7-year recovery period for motorsports racetrack property; an 

economic development credit for American 

Samoa; tax benefits for fishermen and those 

who suffered from the 1989 Exxon Valdez oil 

spill; and even an exemption for certain wooden arrows used by children. These provisions 

cost millions of dollars and are not paid for 

under this bill. Also included are nearly $42 

billion in tax increases over ten years on oil 

and gas production, unemployment insurance, 

and investment income. 

Madam Speaker, a bailout is still a bailout 

no matter which way you try to paint it. The 

American people understand full well that 

these targeted tax relief provisions were 

added for the sole purpose of winning votes, 

and today we are not voting on a clean bill. 

I firmly believe there are viable, alternative 

ways to solve our deep-rooted financial problems without having to utilize a taxpayer-funded bailout strategy. Under this bill we have no 

way of determining how the Treasury Secretary will choose to price the toxic assets he 

will buy, and pricing them too low or too high 

will have serious repercussions. Some of our 

Nation’s top economists along with my own 

colleagues have proposed far better solutions 

that would protect taxpayers and shore up our 

markets without rewarding Wall Street’s bad 

behavior and putting us on a precarious path 

toward Socialism. I have personally proposed 

providing low-interest loans to these struggling 

financial institutions combined with giving taxpayers warrants so that they too can gain from 

any potential upside in our markets. I also 

support expanding the FDIC to cover all transaction accounts and put in place an oversight 

board that is separate from the Congress and 

the administration. 

The issue of a lack of adequate oversight to 

protect taxpayers is truly worrisome. Former 

Speaker of the House, Newt Gingrich, points 

out that a plan which relies on the sole authority of the former chairman of a major investment bank to distribute billons of taxpayer dollars to struggling private sector companies will 

inevitably lead to corruption and crony capitalism. Further, Harvard political history professor Julian Zelizer has said of Paulson’s unprecedented new powers: ‘‘It ranks with the 

top list of delegations of power, especially 

since there’s some flexibility for Treasury in 

deciding what to do with all of this money. You 

don’t like to give power over finance and taxes 

to people who are not democratically accountable like Congress is.’’ 

In a matter of 1 week we have gone from 

a 21⁄2-page bill, to a 109-page bill, and now to 

a 440-page bill, but no matter the increase 

and attempt at improvement, the bill is still inherently flawed. I think it is unfortunate that we 

haven’t taken the necessary time to more 

carefully consider our options and to re-evaluate some of the more troubling financial trends 

that have directly contributed to this historic 

crisis For example, I question why Congress 

hasn’t addressed the issue of Credit-Default 

Swaps, CDS—a $62 trillion, unregulated market that threatens to be our next financial crisis. Warren Buffett describes these insurancelike contracts that promise to cover losses on 

securities in the event of a default as ‘‘financial weapons of mass destruction.’’ The CDS 

market is spiraling out of control as we speak, 

and the Chairman of the SEC has started to 

ask Congress for the immediate authority to 

begin regulating Credit-Default Swaps which 

are intrinsically linked to subprime loans and 

exotic securities, but Congress has not acted. 

Certainly, the challenges that lie ahead of 

us are numerous and great. We are in the 

middle of a financial crisis of epic proportions, 

and I do hope the bill we are voting on today 

helps to shore up our markets and provide 

stability, but reluctantly I must oppose it. This 

legislation has been forced upon us by Secretary Paulson, and I question his ability to objectively implement the Treasury plan given 

his close ties to major investment banks and 

Wall Street. Surely Paulson’s 25 years spent 

at Goldman Sachs and eventually becoming 

its chairman represents an overt conflict of interest. 

Given the fact that taxpayers are getting 

toxic goods and there is no real reform of the 

Community Investment Act which has forced 

banks to make loans to people who have 

questionable credit and cannot afford to pay 

their mortgage back, I am voting against this 

bill, and I pray and hope the future will afford 

us a chance to craft a better bill on behalf of 

the American people. 

Mrs. CAPPS. Madam Speaker, I rise again 

in reluctant support of this legislation. 

I spoke earlier this week about the necessity 

for the underlying economic rescue legislation 

and I stand by that statement. If anything, the 

events of the last week have demonstrated 

that point even more vividly. 

The credit crisis that is gripping America is 

choking Main Street and affecting Americans 

of all walks of life. Businesses, small and large 

alike, are finding it more and more difficult to 

get credit to run their businesses. This slowdown is costing American jobs. Just today the 

administration announced that another 

159,000 jobs were lost in September, the largest monthly loss in more than 5 years. That 

means we’ve lost nearly 800,000 jobs in the 

first 9 months of this year. 

I share my constituents’ deep anger over 

this situation created by the greed of lenders 

and Wall Street players, the inattentiveness of 

Federal regulators, and the overall failure of 

the Bush administration’s policies. We must 

act quickly and this proposal to meet this crisis 

is the best option we have. I know it would be 

much easier for me to take the easier, more 

popular route and vote against this measure, 

but I believe that would be the wrong choice 

for my district and my country for all the reasons I laid out earlier in the week. 


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This legislation adds a number of provisions 

to the economic rescue package the House 

considered on Monday, most of which are unrelated to the financial crisis. I support many 

of them and oppose others. 

First, the bill temporarily raises deposit insurance from $100,000 to $250,000 in federally insured banks and credit unions. This is a 

good step to increase confidence in our banking system and a long overdue update to this 

critical protection for the assets of millions of 

American families and small businesses. 

Second, the bill protects some 22 million 

taxpayers from the effect of the Alternative 

Minimum Tax. This is a tax provision intended 

to keep the wealthiest in our society from 

avoiding all income taxes but, because it 

hasn’t been updated in decades, now threatens to ensnare millions of middle income taxpayers with higher taxes. I hope that in the 

next Congress we can permanently fix this increasingly difficult problem but we must at 

least stave off its ill effects for this year. 

Third, the bill includes critically important 

mental health parity legislation. It would require insurance companies to treat coverage 

of mental health services the same as other 

medical services. As a public health nurse, I 

know there should be no distinction in the necessity of treating heart disease, bone disease, or mental health disease. I have long 

supported this effort to destigmatize mental 

health and ensure that Americans suffering 

from mental health problems can receive treatment. This is an extremely positive step forward for health care in America. 

Fourth, the bill extends Federal support for 

the development of wind, solar, geothermal, 

and other renewable energy sources. I have 

been arguing for a 5–10 year extension of 

these provisions to encourage the development of alternative energy so we can finally 

break our crippling addiction to fossil fuels. Establishing a long term investment horizon for 

these efforts is critical to making that work. 

These extensions should be for longer than 

the 1–3 years included in this bill but they cannot be allowed to expire, which most would do 

by the end of this year. 

Unfortunately, included in these energy tax 

provisions is support for so-called clean coal 

production and shale oil extraction. The oil 

and gas industry could not possibly be more 

profitable and needs more taxpayer support 

like Warren Buffett needs investment advice. 

In addition, both the oil and coal industries already received overly generous taxpayer subsidies in the Republican’s 2005 energy bill. I 

do not support these provisions and believe 

they should be removed or repealed in the 

next Congress. 

Also, much of the cost of these energy tax 

breaks are not offset so they will increase the 

already huge Bush deficits. In an effort to reinstate fiscal discipline, House Democrats have 

consistently voted to pay for these alternative 

energy production tax breaks by closing corporate loopholes and other measures. It’s a 

shame the Senate cannot follow suit and we 

are faced with a take-it or leave-it choice on 

continuing these important alternative energy 

provisions. 

Finally, I am very concerned about the inclusion of language giving the Securities and Exchange Commission, SEC, the go-ahead to 

alter or suspend so-called ‘‘mark to market’’ 

accounting principles. The SEC just issued 

what it calls ‘‘clarifications’’ on these rules at 

the behest of the financial services industry 

and I believe this could be a big mistake. Investors simply must be able to trust that a 

company’s financial statements give a clear 

and accurate portrait of the health of the company and ‘‘mark to market’’ is part of ensuring 

that is the case. I understand that today’s market conditions make establishing prices for securities difficult, but we have to be careful that 

we don’t enable the kind of opaque accounting 

that has led to numerous financial debacles in 

recent years. 

Despite my concerns about these provisions, I still believe it is in the best interests 

of the country to pass this legislation. 

Mr. GEORGE MILLER of California. Madam 

Speaker, I rise in strong support of the mental 

health parity provisions contained in H.R. 

1424, the Emergency Economic Stabilization 

Act of 2008. 

These important provisions of the bipartisan 

legislation would not have been possible without the vigorous advocacy of the late Senator 

Paul Wellstone and the continued dedication 

and commitment of Senator Wellstone’s family. 

In addition, I want to thank Congressmen 

KENNEDY and RAMSTAD as well as Senators 

KENNEDY and DOMENICI. Without their tireless 

efforts, these provisions would not be before 

us today. 

Mental illness and substance abuse affect 

millions of families across this country. 

Without treatment, those suffering from 

mental illness and substance abuse often 

struggle to hold a job or make ends meet. 

Today, approximately 44 million Americans 

suffer from mental illness, but only one-third 

receive treatment. 

A key component of this problem is that private health insurers generally provide less 

coverage for mental illnesses and substance 

abuse than for other medical conditions. 

A 2002 Kaiser Family Foundation study 

found that, while 98 percent of workers with 

employer-sponsored health insurance had 

coverage for mental health care, 74 percent of 

those workers were subject to annual outpatient visit limits, and 64 percent were subject to annual inpatient daily limits. 

The bill amends the Employer Retirement 

Income Security Act, ERISA, to prohibit employer group health plans from imposing mental health or substance abuse treatment limitations, financial requirements, or out-of-network 

coverage limitations unless comparable limitations requirements are imposed upon medicalsurgical benefits. 

The out-of-network coverage provisions are 

particularly important. 

Under this provision, if a health plan permits 

individuals to go to an emergency room for a 

medical condition without prior authorization; 

or an out-of-network hospital or treatment center at in-network rates for a medical condition, 

then the plan must apply the same rules to an 

individual suffering from a mental illness or 

substance disorder. 

In addition, the bill does not require group 

health plans to provide any mental health or 

substance abuse coverage. 

However, if the group health plan does offer 

mental health and/or substance abuse benefits, there must be equity between mental 

health and/or substance abuse coverage and 

all comparable medical and surgical benefits 

that the plan covers. 

As a result, more Americans will be able to 

access affordable mental health and substance abuse benefits. 

Nothing in the bill is intended to preempt 

stronger state mental health and substance 

abuse parity laws. 

The Committee on Education and Labor has 

analyzed each state’s mental health and substance abuse law; it is our understanding and 

intent that this legislation will not pre-empt any 

of these laws. 

In other words, a state law that may contain 

broader or more favorable mental health and/ 

or substance abuse benefit requirements will 

not be pre-empted. 

Finally, this bill directs the Department of 

Labor to provide information and assistance to 

individuals, employers, and states in order to 

help them comply with the requirements of this 

law. 

It is time to end the stigma and provide fair 

coverage to those in need. 

Mr. STARK. Madam Speaker, I rise today in 

strong support of providing much needed assistance to the millions of workers struggling 

to make ends meet. 

Unlike the Wall Street bailout we just 

passed, extending unemployment benefits will 

actually help to keep people in their homes. 

Unlike giving a $700 billion blank check to 

Henry Paulson, extending unemployment benefits will stimulate the economy and will bring 

money into local communities. 

Last month the economy lost 160,000 

jobs—the ninth month in a row of job loss. 

Without congressional action, 800,000 workers 

are expected to lose their unemployment benefits in October. In my State of California, the 

unemployment rate is 7.7 percent and climbing. Many of these workers are exhausting 

their benefits and are unable to find work. This 

legislation will provide immediate relief to 

these workers. 

Today we heard a lot of bluster about Main 

Street. Make no mistake, people are struggling 

to pay their bills and put food on the table. 

Wall Street has already gotten their share; I 

urge all of my colleagues to make sure that 

we take this small step to help millions of 

workers get their share. 

Mr. CONYERS. Madam Speaker, while I am 

personally opposed to this bill, and have set 

forth my reasons elsewhere in this debate, the 

Judiciary Committee has nevertheless assisted the bill’s drafters in an effort to help ensure that it does not inadvertently impair fundamental legal rights and protections. 

In that regard, as chairman of the Judiciary 

Committee, I would like to further illuminate 

Congress’s intent with respect to three provisions in section 119 of the bill, the section regarding judicial review and related matters. 

First, the limitation on injunctive and other 

equitable relief in section 119(a)(2)(A). This 

provision is written in light of the expected 

need for the Troubled Asset Relief Program, 

‘‘TARP,’’ established under the bill in the 

Treasury Department to be able to act quickly 

on its decisions to purchase particular assets 

in the marketplace. 

Accordingly, the grounds for obtaining injunctive or other equitable relief, which could 

potentially impair the efficiency of the TARP’s 

response to breaking market developments, is 

limited to remedying constitutional violations, 

while all underlying rights, and the availability 

of monetary damages where warranted, are 

preserved. Moreover, even in cases of constitutional remedy, there are special provisions 

in section 119(a)(2)(B)–(D) for expediting resolution of the matter in court. 


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It should be kept in mind that the bill provides for a number of avenues to protect 

against possible overreaching by the Secretary or the TARP, including a special Inspector General, ongoing Government Accountability Office review, and a congressional oversight panel. Nor do the limits alter the normal 

rules governing agency rulemaking or adjudication, which are not the sort of actions that 

require the same kind of rapid response envisioned for TARP’s marketplace decisions. 

Second, the provision regarding homeowners’ rights in section 119(b)(1). This provision clarifies that a sale of mortgages or mortgage-backed securities to the TARP in no way 

impairs the claims or defenses of the homeowners whose mortgages are involved. All 

rights and interests of the homeowners, 

whether under the terms of the mortgage instrument or under law, are fully preserved. 

This means, among other things, that the 

TARP, in acquiring interests in these securities, does not thereby obtain the right to use 

any of the extraordinary collection methods 

and other recourse that is available solely to 

the Government, which it has been given for 

collecting fines and other debts owed directly 

to the Government which the homeowners 

here did not contract to be subject to. 

This provision does not prevent modifications to which the homeowner agrees, such as 

a reduction in interest rate, reduction in loan 

principal, waiver of fees and unpaid interest, 

or other forbearance that enables the homeowner to avoid foreclosure, continue living in 

the home, and keep the mortgage. In fact, this 

provision is designed to encourage TARP to 

consider such modifications whenever prudent. 

And it often will be, benefitting the investors 

in the mortgage-backed debt as well as the 

homeowners involved. The costs of foreclosure to the investors—leaving aside the 

costs to the homeowner, and the community 

of which the homeowner is a part—will generally far exceed the costs to investors of a 

mortgage modification. 

Indeed, taking into account costs such as 

foreclosure expenses, damage to vacant 

homes, maintenance, the loss from sales of 

vacant property in a declining market, the net 

recovery by investors in a foreclosure situation 

can be a small fraction of the amount owed on 

the mortgage. Many foreclosed homes end up 

being sold in bulk through distress sales, for 

only a few thousand dollars each. And all of 

this feeds a vicious circle of increasing foreclosures and declining home values. 

Loan modifications are almost invariably 

better for the investors, who continue to receive a steady stream of mortgage payments, 

as well as for the homeowner, who is able to 

stay in the home, for the neighborhood that 

keeps more of its homes occupied and property values supported, and for the entire community that benefits from the homeowner’s 

economic contributions. 

Third, the savings clause in section 

119(b)(2). As written, this provision is a combination of two separate sentences. And the 

first sentence has two separate purposes. 

One purpose of the first sentence is to preserve current and future responsibility for 

wrongdoing, and to ensure that this legislation 

is not interpreted to relieve wrongdoers from 

accountability or liability to those whom they 

have harmed. The Congress is aware of civil 

litigation brought by shareholders, ERISA participants, or by or on behalf of financial institutions, against officers, directors, and in some 

cases counterparties whose alleged misconduct caused or contributed to their losses. 

The Congress is also aware of media reports 

of criminal investigations. 

These matters are for the justice system to 

resolve. The Secretary, and the Executive 

Branch in general, should cooperate as appropriate with public and private efforts to recover 

losses from wrongdoers in the financial market, whether those efforts are brought by a 

governmental entity, securities purchasers, 

employees, or the corporation itself, or are asserted on behalf of the corporation derivatively. Nothing in this Act is intended to impair 

any legal rights as against private parties to 

recover for or redress wrongdoing under Federal or State law. 

The other purpose of the first sentence is to 

clarify, similarly as with mortgage-backed securities in section 119(b)(1), that a transfer of 

nonmortgage financial assets to the TARP 

does not impair any of the underlying rights, 

claims, and defenses of borrowers who are 

not in privity with the TARP and have not contracted for or consented to any such impairment. 

This does not affect the ability of the TARP 

and the financial institution transferring the assets to contract between themselves as to 

which rights and obligations related to those 

assets will be assumed by Treasury, and 

which rights and obligations will be retained by 

the financial institution. Rather, it clarifies that 

whichever of them deals with the borrower 

going forward must do so on the same terms, 

and owes the same duties, as under the original agreement, so that the rights the borrower 

contracted for or enjoys under law are in no 

way impaired. Again, this means, among other 

things, that the TARP, in acquiring these assets, does not thereby obtain the right to use 

any of the extraordinary collection methods 

and other recourse that are available solely to 

the Government, which it has been given for 

collecting fines and other debts owed directly 

to it—which the borrowers here did not contract to be subject to. 

The second sentence in section 119(b)(2) 

addresses what has come to be termed 

‘‘tranche warfare’’—litigation among the various categories, or tranches, of investors in 

structured mortgage-backed securities, each 

vying for primacy in any modification of terms, 

at each other’s expense. This sentence clarifies that, except as established by contract, a 

servicer of pooled residential mortgages that 

become subject to the TARP, if that servicer 

owes any duty to ensure that net present 

value of payments on a loan exceeds anticipated recovery in foreclosure, owes that duty 

not to any individual investor or faction of investors, but to the investors as a whole. 

Accordingly, the servicer, in agreeing to or 

implementing a modification or workout plan 

shall be deemed to be acting in the best interests of all such investors or holders of beneficial interests if the servicer takes reasonable 

loss mitigation actions, including partial payments. This clarification is intended to further 

encourage modifications to mortgage loans 

when, in the judgment of the loan servicer, in 

the overall interests of the investors. 

Mr. MOORE of Kansas. Madam Speaker, I 

rise today to express my support, with reservations, for the Senate amendments to H.R. 

1424, the Emergency Economic Stabilization 

Act of 2008. 

Our Nation is facing a crisis that we’ve not 

seen since the early 1930s. If we do nothing, 

our small businesses will continue to suffer 

with limited access to credit, families will struggle to pay for college for their children and too 

many people will have to delay their retirement. Retirees with pension plans invested in 

the market will find they are not as secure as 

they hoped. 

Just today, the Government announced that 

159,000 jobs were lost in September, the 

sharpest drop in jobs in over 5 years. This is 

the ninth straight month of job losses. Two 

weeks ago, with the economy on the verge of 

disaster, and the choking off of access to 

credit, Federal Reserve Chairman Ben 

Bernanke urged congressional leaders to act 

on this emergency economic rescue package 

by saying, ‘‘If we don’t do this, we may not 

have an economy on Monday.’’ These are 

words no Member of Congress wants to hear, 

but it is a call to action, now. 

I voted for the original bipartisan compromise the House considered Monday because it took necessary steps to protect American taxpayers, including a recoupment provision to ensure that every dime of taxpayer 

money is paid back in full. Republican and 

Democratic leaders supported the original 

compromise to get our economy back on 

track. The bill was far from perfect, but it also 

included provisions to ensure aggressive congressional and judicial oversight of the rescue 

programs, as well as no taxpayer-funded 

‘‘golden parachutes’’ for careless Wall Street 

CEOs. The bill would have spread out the expenditures to make sure they are really needed, and mandated: 48-hour posting of all 

transactions on the Internet; warrants so taxpayers share profits; aggressive foreclosure 

mitigation activities, tax provisions helping 

community banks; and independent Inspector 

General oversight. 

But when the House failed to pass the bill 

on Monday, the Dow dropped 777 points, the 

largest single-day point drop in history. It cost 

the American economy more than $1.2 trillion 

as Americans saw their 401Ks, college accounts, and pension plans lose value. 

As a co-chair of the fiscally responsible Blue 

Dog Coalition, I have grave concerns about 

any legislation that passes off the costs to our 

children and grandchildren, adding to our $9.6 

trillion debt. I would have strongly preferred 

that the Senate version of the bill had been 

written differently without all of their unrelated 

tax policy additions, but this is not about me. 

This is about preserving our way of life as a 

nation and restoring our economic strength. 

This is about making sure the economy 

doesn’t crash to the extent that it might take 

decades for our children and grandchildren to 

put the pieces back together. 

Make no mistake: this crisis should not be 

about political opportunism. This is a time for 

Republicans and Democrats who are willing to 

put country before party, and our economic 

security before ideology, to come together and 

do what is in the best interest of our people 

and our country. 

I am just as upset as many of my constituents that our country is faced with this economic crisis. Government intervention should 

always be an option of last resort, but we are 

left with very few choices and even less time 

to preserve our economic stability. Inaction is 

simply not an option. 

In this difficult time, Congress must act. The 

Senate has spoken in a strong, bipartisan 


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way, voting for this revised legislation by a 

vote of 74–25. The leadership of both parties 

and our two presidential candidates support 

this effort to rescue our faltering economy. In 

the short term, this relief package is an emergency line of credit, a lifeline for our drowning 

financial industry. In the long term, it’s also an 

investment in bringing back a strong economy. 

If our economy does not recover, if we slide 

toward recession or worse, we will all suffer. 

I support this bill because I believe it’s the 

right thing to do for our country. 

But enacting this emergency legislation is 

only the beginning. While we had to act today 

to preserve our economy, I will continue fighting for fiscal responsibility, putting an end to 

runaway deficits and our mounting $9.6 trillion 

debt. I will work with my Republican and 

Democratic colleagues on the House Financial 

Services Committee to aggressively investigate what went wrong in the credit markets, 

and work in a bipartisan way to improve the 

regulatory structure so we can have a modern 

oversight structure that will make sure firms 

act in a responsible way. We must continue to 

do all we can to protect the future economic 

health of the country. 

Mr. RAMSTAD. Madam Speaker, it was an 

amazing turn of events that made the treatment parity legislation PATRICK KENNEDY and I 

introduced, H.R. 1424, the vehicle for one of 

the most far-reaching bills considered in our 

lifetime. 

This legislation is a rescue bill for the U.S. 

economy and a rescue bill for the millions of 

Americans suffering from mental illness and 

addiction. It will also prevent a devastating tax 

increase on middle-income families and job 

creators at a time our families and economy 

cannot afford more blows. 

This vote will mean the end of 12 long years 

of fighting for treatment parity for mental illness and addiction. This is not just another 

public policy issue: It’s a matter of life or death 

for 54 million Americans suffering the ravages 

of mental illness and 26 million suffering from 

chemical addiction. 

Last year alone, more than 30,000 Americans committed suicide from untreated depression and 150,000 Americans died as the 

direct result of chemical addiction. On top of 

the tragic loss of lives, untreated addiction and 

mental illness cost our economy over $550 billion a year. 

I’m alive and sober today only because of 

the access I had to treatment following my last 

alcoholic blackout on July 31, 1981, when I 

woke up in a jail cell in Sioux Falls, SD. I’m 

living proof that treatment works and recovery 

is possible. 

But far too many people in our country don’t 

have the same access to treatment that I and 

other Members of Congress have had. 

A major barrier for thousands of Americans 

is insurance discrimination against people in 

health plans who need treatment for mental illness or chemical addiction. 

The legislation we are passing today will 

end this discrimination by prohibiting health insurers from placing discriminatory restrictions 

on treatment for people with mental illness or 

addiction. 

No more inflated deductibles or copayments 

that don’t apply to physical diseases. 

No more limited treatment stays that don’t 

apply to physical diseases. 

No more discrimination against people with 

mental illness or chemical addiction. 

The ‘‘Paul Wellstone and Pete Domenici 

Mental Health Parity and Addiction Equity Act’’ 

simply provides equal treatment for diseases 

of the brain and the body. 

Providing treatment equity is not only the 

right thing to do; it’s also the cost-effective 

thing to do. 

All the empirical data, including major actuarial studies, show that equity for mental 

health and addiction treatment will save literally billions of dollars nationally. At the same 

time, it will not raise premiums more than twotenths of 1 percent, according to the Congressional Budget Office. 

In other words, for less than the price of a 

cheap cup of coffee per month, millions of 

people could receive treatment for chemical 

addiction and mental illness. 

Madam Speaker, Rep. PATRICK KENNEDY

and I have traveled the country from one end 

to the other—holding 14 field hearings on the 

critical need for treatment parity. 

We heard literally hundreds of stories of 

human suffering, broken families, tragic 

deaths, ruined careers and shattered 

dreams—all because of insurance companies 

not providing access to adequate treatment for 

mental illness and addiction. We will change 

that today. 

Madam Speaker, it’s time to end the discrimination against people who need treatment 

for mental illness and addiction. It’s time to 

prohibit health insurers from placing discriminatory barriers to treatment. 

It’s time to join the coalition of insurance 

companies and business groups that support 

parity because they know it’s cost-effective 

and saves health care dollars. 

It’s time to make this bipartisan legislation 

the law of the land. The people of America 

cannot afford to wait any longer for Congress 

to act. 

Mr. BISHOP of Georgia. Madam Speaker, I 

didn’t take pleasure in voting yes today. But in 

tough times, Congress is required to make 

tough decisions. Voting for this bill is a risk, 

yes. But voting against this bill is a greater 

risk. Given the prevailing, dreadful economic 

trends, a bet that our economy will miraculously right itself on its own, without significant 

damage to the jobs and livelihoods of the people in my district and across America, is the 

greater risk I am not willing to take. 

We are facing a startling reality. Without action, student loans, home loans, and lines of 

credit for local businesses will tighten, and 

eventually be cut entirely. With no credit 

source from which to pay employees, business will impose massive layoffs. Farmers, 

whose products are so vital to the Second 

District economy and who depend on a secure 

line of credit during planting season, won’t 

have a crop. People facing foreclosure will not 

be able to refinance their mortgages, and will 

lose their homes. People looking to retire will 

have to take on part-time employment, or 

delay retirement entirely, because their savings, 401(k)s and pension plans will have 

been drained of assets. 

I wish the bill we took up today was a cleaner bill. I wish we could have passed the bill 

Monday, and saved our deficit another $150 

billion. Many of the provisions added onto this 

bill, especially relief for middle class taxpayers, are needed, but they add to the bill’s 

cost. And any other day, I would stand firmly 

opposed until those costs were off-set. 

But this is not ‘‘any other day’’—this is an 

extraordinary day, and these are extraordinary 

circumstances. The economy is on life support 

and not passing this bill would be tantamount 

to pulling the plug. Not passing it would imperil 

the very opportunities our society is known for, 

and that we behold as integral to American 

life: the chance to go college, run a business, 

own a home, enjoy retirement. 

For the poor, for those who have been financially prudent, for the unemployed, for 

those who saw their 401(k)s dwindle this is 

not the end. In the coming months, it is my 

hope that Congress pours as much or more 

effort into investigating the financiers whose 

actions precipitated this crisis and who walked 

away with millions for themselves, as we have 

put into crafting this bill. It is also my hope we 

can repair the damage done the deficit. Meantime, I encourage my colleagues and my constituents to join me in supporting this first step 

toward regaining our financial footing and setting in place a new system, one that lacks the 

greed and the excess that brought us to this 

point in the first place. 

Mr. UDALL of Colorado. Madam Speaker, I 

voted against this bailout package on Monday, 

because I took a hard look at it through the 

eyes of Coloradans, and I didn’t see what they 

needed to see. 

What I saw was a $700 billion bailout for 

Wall Street banks that didn’t do enough to reassure taxpayers that they’d get their money 

back, didn’t have a sure process for holding 

CEOs accountable and limiting taxpayer-funded golden parachutes, and didn’t address the 

mortgage crisis that is at the root of our economic problems and is forcing hard-working 

Coloradans out of their homes. 

Just as important, what I saw was a ‘‘rescue’’ for Wall Street that did nothing to begin 

fixing the broken financial system that led us 

to this crisis. 

As I look at the legislation we’re being 

asked to vote on today, I’m deeply disappointed to say that none of that has 

changed. 

Instead, the Senate has sent us a bill that 

adds a single improvement to the package the 

House rejected, plus hundreds of pages of 

‘‘sweeteners’’ intended to win over those of us 

who opposed it the first time. Many of those 

‘‘sweeteners’’ are things I support—the people 

of Colorado know I have worked long and 

hard for middle-class tax breaks and have 

spent my entire career as a champion for investment in the new energy economy. 

But no amount of ‘‘sweetener’’ changes the 

fact that Americans deserve a better solution 

to our economic crisis than the one we’ve already rejected. 

I have no interest in making the perfect the 

enemy of the good. Anyone who knows my 

work in Congress knows that I am not a ‘‘myway-or-the-highway’’ legislator. Because of the 

greed and lack of oversight on Wall Street, we 

face an unquestionably grave economic situation that requires Congress to act. But a better 

solution is still within our reach—one that 

takes immediate action to get our economy 

back on stable footing while providing the protection, oversight, and fundamental reforms 

American families deserve. 

I am still guided by the words of the legendary basketball coach John Wooden, who 

told his players, ‘‘Boys, be quick. But don’t 

hurry.’’ 

My hope was that after the House rejected 

Monday’s bailout package, we in Congress 

would be quick to work together, improve the 


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legislation, and bring forward a revised version 

that would deserve and obtain broad support 

in Colorado and across the country. We had 

that opportunity until the Senate acted to repackage the old bailout bill in new clothing. 

We owe the taxpayers more than to hurry a 

deeply flawed package out the door at such 

tremendous cost to them. 

I believe we could have added provisions 

that (1) provided independent oversight of the 

Treasury’s program, (2) strengthened the equity position of taxpayers in purchasing mortgage-backed assets, (3) required the government to help responsible homeowners refinance their mortgages, and (4) insured that 

taxpayers will not be on the hook for irresponsible compensation packages for CEOs. 

This bill claims to address these problems, 

but the exceptions in this bill swallow the rule. 

In short, the bill doesn’t do what it claims to 

do. 

On Tuesday, stronger provisions were within 

our reach and we should have worked to secure them 

I hope—for the sake of all those people who 

have worked hard and played by the rules, 

only to see their retirement whittled away or 

their homes’ values plummet—that this package does what its supporters promise us it 

will. 

But in the end, my responsibility is to Colorado families, and I continue to believe as I 

did on Monday, that I cannot ask them to foot 

the bill for a bailout that costs so much, with 

so little accountability, so little reform, and so 

little protection for them. 

Mr. HALL of New York. Madam Speaker, I 

rise today in support of H.R. 1424, The Emergency Economic Stabilization Act of 2008. 

Since this House rejected an earlier plan to intervene, the bad economic news has kept rolling in and the dangers to Main Street businesses have increased. Only today it was announced that 159,000 American jobs were lost 

in September alone. This kind of news combined with the tremendous declines we’ve 

seen in the markets only underscores our 

need to take action. 

I continue to share the anger of most Americans about the need to take these unprecedented steps, but I remain more convinced 

today that we must act decisively to contain 

this economic contagion before it spreads into 

the far reaches of our economy and leaves 

lasting damage. 

Although this bill added an important provision to increase the insurance guarantees on 

personal deposits by the FDIC and a number 

of tax provisions, it remains similar to the 

package that I reluctantly supported earlier 

this week. While this bill is far from perfect, I 

believe it addresses the economic crisis in a 

responsible way that helps Wall Street while 

still looking out for Main Street and protecting 

our tax dollars. 

This bill would still institute limits on executive compensation and golden parachutes for 

the executives of companies that take part in 

the plan. It puts in place real oversight, from 

the courts, from Congress and from a new Inspector General’s office and finally installs significant Government supervision and regulation of the companies that helped to put us in 

the situation we’re in now. 

It also puts in place mechanisms to make 

sure that taxpayer dollars will be protected to 

the maximum extent possible. To the extent 

that our investment is not recouped, the President will have to come up with a plan to make 

sure that the companies taking out this Government loan will have to pay back the American taxpayer. 

The financial industry is of great importance 

to New York State, which relies on our financial institutions for a significant percentage of 

tax revenue and jobs. The Hudson Valley is 

particularly vulnerable to difficulties on Wall 

Street, and I fear that the workers, small business owners, and families in my district will 

face severe economic ramifications if we do 

not stem the tide of this financial crisis. That 

is the primary reason that I feel I must vote 

yes today. 

In fact, the ripples of the credit crisis are already impacting some of the small businesses 

in my district. Jeff Conston, owner of Dutchess 

Recreational Vehicles in Poughkeepsie, contacted me to tell me that his customers are 

finding it very hard to get financing to purchase the equipment he sells. He has 34 employees who handle sales, parts and service 

for his dealership. He urged us to get this financial rescue plan passed so the financing 

for his customers and his business can start 

flowing again. 

Another local businessman, William L. 

Spearman, Chief Executive Officer of the MidHudson Valley Federal Credit Union in my district, told me that while his credit union’s balance sheet remains strong, his members are 

so concerned about our financial system that 

they are withdrawing money just to put it in 

their mattresses. In his view, the financial system is frozen and we need to pass this bill to 

provide confidence to his members and to get 

the system moving again. 

Overall, I am pleased that the legislation 

sent back from the Senate includes some important tax relief provisions that I believe Congress should pass this year. Chief among this 

is a one year ‘‘patch’’ that will protect thousands of middle class families from being hit 

by the AMT this year. Last year over 30,000 

families in my district paid AMT, and this bill 

will ensure that an additional 70,000 families 

in my district will not also be obliged to pay it. 

I wish we had the support to permanently fix 

the AMT, and help the middle class families 

that are still subject to it, however once again 

the ‘‘patch’’ legislation that we consider today 

is the best legislation that we can pass at this 

time and I will support it. 

I am also grateful that this legislation contains a number of tax breaks to help individuals and small businesses. Given the economic troubles we are in the midst of, tax 

breaks for research and development and for 

teachers who use their own money to purchase supplies for the students are desperately needed and could not come at a better time. 

This bill also includes some important provisions to help shore up our economy in the 

long term by moving us away from imported 

fossil fuels and toward energy independence. 

The critical tax incentives in this bill for wind, 

solar, hydropower, marine energy, and the 

purchase of advanced plug-in hybrid vehicles 

will create thousands of green jobs here in 

America that can’t be outsourced, help cut 

consumer energy costs, and give individual 

families and businesses the power to help 

fight climate change and end our dependence 

on foreign oil. Although I am deeply disappointed by the inclusion of incentives for 

coal to liquids technology and tar sands and 

oil shale exploration, which will not meet these 

goals, this package is still critical to our future 

and worthy of support. 

Passage of this plan is only a first step. 

What created this crisis was the Bush administration’s and previous Congress’s failure to 

stem reckless behavior on Wall Street, and we 

cannot allow that lapse in oversight to be repeated. I am pleased that the Committee on 

Oversight and Government Reform will begin 

hearings soon on the causes of this crisis and 

that there is acknowledgement that we must 

work to make more fundamental investments 

in the true engine of our economy, American 

workers, innovation, and small businesses, in 

order to more permanently strengthen our 

prosperity. Congress must remain vigilant, 

aware of how this tremendous authority is 

being exercised by the administration and in 

the markets, and ready to intervene at the first 

hint of abuse or ineffectiveness. 

Ms. SCHWARTZ. Madam Speaker, as the 

American people have witnessed over the 

past several days, the instability in the financial markets requires immediate attention. 

The longer this instability continues, the 

harder it will be for employers to meet payroll, 

for retirement plans to meet their obligation to 

retirees, and for families to access the credit 

they need to pay for college, for a car, for a 

home, or for just getting by. 

The road has been difficult, but the risk 

posed to everyday Americans is simply too 

great not to act. 

My constituents and I were appalled when 

President Bush asked us to hand over $700 

billion with no oversight, no accountability, and 

no reforms to the fundamentally flawed policies that allowed this crisis to occur. 

Due to bipartisan cooperation—and now 

compromise between the Senate and the 

House of Representatives—this economic recovery proposal is fundamentally different than 

the proposal first brought to us by President 

Bush. 

Today, we have an economic recovery proposal before us that will protect the interests 

of hardworking Americans by: 

Restoring investor confidence in our economy and the financial markets; 

Protecting taxpayers by requiring full transparency of actions taken by the Treasury Secretary, creating a strong oversight board appointed by Congress, and establishing an 

independent Inspector General to guarantee 

compliance; 

Ensuring fiscal responsibility by making resources available in installments that require 

congressional and Presidential approval, and 

guaranteeing that the financial services industry repays any losses to the U.S. Treasury; 

Helping distressed homeowners avoid foreclosure by facilitating loan modifications; and 

Limiting the compensation for the corporate 

executives that created this crisis by eliminating multimillion dollar golden parachutes. 

I will vote for the proposal before us today 

because I believe that the current economic 

crisis requires action by Congress. 

It is unfortunate that the Senate took this 

opportunity to add unrelated measures to this 

bill. 

These measures include items that I have 

strongly supported—such as: mental health 

parity; Alternative Minimum Tax relief; property 

tax relief; the personal deduction for higher 

education expenses; incentives for energy 


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conservation and the development of alternative and renewable energy; and the extension of current tax policies that encourage innovation and help U.S. companies compete 

internationally. 

I support these proposals and I appreciate 

that they will become law by our action today. 

But, I believe that we should have—and could 

have—covered the cost of these provisions, 

had the Senate not acted first. 

It is also embarrassing that just a few Senators would use this critical economic recovery 

proposal to enact narrowly targeted tax benefits—risking passage and angering American 

taxpayers who have rightfully called for reform 

of such practices 

Nonetheless, action is required to stabilize 

our financial markets. We must begin the 

process of economic recovery by making credit and capital available to families and businesses of all sizes to meet their obligations 

and move this country forward. 

There is still more to do. We must focus on 

the regulation of our financial markets, strong 

enforcement, and sound fiscal policies in Government and in the private sector that are all 

necessary to restore our economy to one of 

prosperity, opportunity and growth—not just 

for a few—but for all Americans. 

Mr. UDALL of New Mexico. Madam Speaker, 4 days ago, I opposed a bailout plan that 

did too little for homeowners, too much for executives, and nothing to prevent Wall Street 

from repeating the mistakes that got us into 

this crisis. That bill would have put the U.S. 

taxpayer on the hook for $700 billon to bail out 

Wall Street, the very people whose irresponsibility helped to undermine America’s economy and threaten the jobs and life savings of 

millions of American families. 

Make no mistake: America faces a serious 

crisis. We must do something, but we cannot 

let fear drive our decision-making. Our solution 

should meet the demands of the day without 

producing more suffering in the future. We 

have the time to get this right, but the proposal we considered on Monday had significant problems. 

At that time, I suggested several commonsense changes to Monday’s bill. Those 

changes have not been made. 

I said we must do more to protect taxpayers. Today’s bill still falls short. 

I said we should do more to protect responsible homeowners and their neighbors from 

foreclosures and plummeting property values. 

This bill still falls short. 

I said we must ensure executives who ran 

their companies into the ground cannot walk 

away with millions in taxpayer-funded golden 

parachutes. This bill still falls short. 

And I said that while American taxpayers 

continue to struggle we should not bail out foreign companies whose governments are doing 

nothing. Again, this bill still falls short. 

Perhaps most importantly, this legislation 

does nothing to protect us from facing a similar crisis in the future. Today’s situation is the 

direct result of a culture in Washington that allowed Wall Street to gamble with America’s future. This legislation sends the message that 

when Wall Street’s gambles do not pay off, 

the taxpayer will bail them out. Imagine for a 

moment that you send a friend into a casino 

and tell him: if you win, you keep the 

winnings; if you lose, I’ll pay your losses. You 

would expect nothing but irresponsibility, and 

that is exactly what this bill will give us. We 

need commonsense rules to protect against 

that irresponsibility, and this bill provides none. 

For all these reasons, I will vote against today’s proposal, just as I voted against very 

similar legislation 4 days ago. The only difference between this bill and the bill we rejected on Monday that has anything to do with 

America’s financial markets is an increase in 

FDIC insurance limits. This may do something, 

but it is nowhere near enough to justify supporting today’s bill. 

Whether or not this legislation passes today, 

Congress must keep working on a new framework for our financial system. Experts have 

produced good proposals on a variety of 

issues. Some have even passed this House. 

But we also need to begin working on a systemic overhaul of our regulatory structures, 

our financial rules, and the incentives that govern our markets. In this hour of crisis, we have 

a rare opportunity to protect future generations 

from the turmoil we have seen. We must seize 

this opportunity. 

Unfortunately, the Senate has chosen to 

add unrelated provisions rather than fixing a 

deeply flawed proposal. I want to note that my 

vote today does not suggest any disagreement with the important package of tax cuts 

that was added in the last few days. I have 

consistently supported tax cuts for the middle 

class, including fixes for the Alternative Minimum Tax. I have advocated mental health 

parity legislation, and voted for it repeatedly. I 

have fought for tax credits to spur green industries and produce jobs. And I have worked 

to protect the Secure Rural Schools and Payment In Lieu of Taxes programs that would be 

extended by this bill. However, even with 

these provisions, I cannot support a $700 billion taxpayer bailout—a plan that will have a 

large and widespread impact for generations— 

that has been rushed through with so many 

serious flaws and so many problems left 

unaddressed. 

Today’s vote is difficult, but I believe it is 

what’s right for New Mexico’s Third Congressional District, and the people of New Mexico 

and our Nation. 

Mr. VAN HOLLEN. Madam Speaker, many 

of my constituents are current or former employees of Government Sponsored Enterprises, GSEs, that provide residential mortgage services on behalf of the Federal Government. These employees are concerned that 

the Treasury Secretary’s newly authorized 

control over their organizations may compromise their retirement benefits. I have consulted with Congressman BARNEY FRANK, the 

Chairman of the Financial Services Committee, regarding this issue. Chairman FRANK

has assured me that in drafting this legislation 

he was careful to ensure that the Secretary’s 

control over these GSEs will have no impact 

upon the retirement benefits of the rank-andfile employees who are not regarded as ‘‘executives’’ under the regulations of the Securities and Exchange Commission. I greatly appreciate the Chairman’s work to protect the 

benefits of these hard working employees. 

Mr. WELDON of Florida. Madam Speaker, 

many of my constituents have called and written me in opposition to the current plan to 

deal with the Nations financial crisis. I consider this to be one of the most serious and 

important issues I have dealt with in my 14 

years in the House. 

My father was born in 1919 into a poor 

working class family in New York City. During 

his most critical formative years from the time 

he was 10, until he went off to fight in WWII, 

all he knew was the deprivation of the great 

depression. He and his brothers and sisters 

regularly went to bed hungry, on many nights 

dinner consisted of a choice of either a ketchup or a mustard sandwich. 

He was a good student, nonetheless had to 

drop out of school at age 15 so he could go 

to work, often making only pennies a day, but 

his family needed food. After the war he met 

my mother and had a family and was never 

able to go back to school. 

One of the things that emerged from his experience was a tremendous amount of appreciation for having a good job and the importance of saving and preparing for retirement. 

Those enduring values he passed on to me. 

Today, our Nation is faced with what is 

being described by many economists as the 

worst financial crisis since the great depression. With the decline in the housing market 

there are many banks and other financial institutions that have been adversely effected. This 

has caused many of these banks to have to 

stop or reduce lending money. Many banks 

have gone bankrupt. 

There is no question that this problem was 

started by the Federal Government’s efforts to 

modify lending rules to allow those with lower 

incomes and poor credit scores to purchase 

homes, often with no money down. The inappropriate and meddling actions by the Government-sponsored entities Fannie May and 

Freddie Mac laid the groundwork for this crisis 

and it was made worse by unscrupulous Wall 

Street Bankers and mortgage brokers. 

What started as a housing market decline 

has now become a credit crisis effecting global finance, and it is beginning to affect the retirement savings of millions of Americans and 

our national economy. Many companies are 

starting to find it difficult to get financing and 

we are starting to have leaders in finance and 

business tell us that if this is not contained we 

may begin to see spreading business failures 

and unemployment. 

It is against this backdrop that Treasury 

Secretary Paulson and the head of the Federal Reserve Ben Bernanke originally proposed a plan that calls for the U.S. Treasury 

to purchase with cash many of these mortgage backed securities held by these banks. 

Many of the assets are backed by real estate, 

but because there is no market for them today 

the bankers are being told they are worthless 

under the new accounting rules put in place 

after the Enron scandal. 

Banks loan out money at a ratio of 10 to 1. 

For every 100 dollars of assets they have on 

their books they are able to make $1,000 in 

loans. The banks that now hold these mortgaged backed securities have seen the value 

of many of these plummet to zero which has 

wiped out hundreds of billions of dollars of 

capital from their balance sheets. This has 

taken trillions of dollars out of the capital markets because of this 10:1 ratio. If you were a 

bank and on your balance sheet was a $100 

million dollars worth of mortgage backed securities that the accountants are telling you it is 

worth zero then you can’t do $1 billion in 

loans. 

The Paulson Plan called for purchasing 

these mortgage-backed securities with cash. I 

was not happy with the original plan put forth 

by the Secretary. It called for providing him 

unfettered access to $700 billion. 


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The bill I voted for on Monday September 

29th and which failed to get a majority was a 

significant improvement over Secretary 

Paulson’s original proposal. It reduced by half 

the amount of cash he could access without 

coming back to Congress. It required that he 

also develop an option other then asset purchase that included offering insurance to back 

up the value of these mortgage securities. It 

also had strong restrictions on excessive executive salaries for many of these troubled 

companies. No golden parachutes. 

Despite the improvements in the bill it did 

not get my support because I liked it. I voted 

for it because I was concerned that inaction 

was too risky. My preferred approach was that 

proposed by former FDIC Chairman William 

Isaac. This plan was never given a vote. 

Since that failed House vote, the Senate 

took up the bill and it has added some good 

things. There are several extensions of existing tax breaks that help families and businesses that were due to expire. Two important 

items are the coritinuation of sales tax deductibility for the people of Florida and the increase of FDIC insurance to $250,000. It also 

has a provision to modify the alternative minimum tax. If this provision is not enacted over 

20 million families in America will be saddled 

with huge tax increases next year at a time 

when they can least afford it. 

Unfortunately, the Senate put in several unnecessary items as well such as earmarked 

tax breaks for special interests. Despite the 

many flaws in this bill it is the only bill that I 

will be given a chance to vote on by the Democrat leadership. In light of the very serious 

problems in our economy, I will give it my support with a yes vote. 

I realize that there are many like-minded 

conservatives in District 15 of Florida and 

around the country that disagree. I am reminded at this time of the great controversy 

surrounding the drafting of the Constitution 

and its ratification at the birth of our Nation. 

Today, the Constitution is revered and it has 

served out Nation well for over 200 years. But 

the debate surrounding its drafting and ratification was highly controversial with many patriots at the time being strongly opposed to it. 

Time will determine if this financial rescue 

package will serve our Nation well. I am concerned that we are heading into a recession. 

This package if it works well will likely not 

allow us to avert a recession, but may allow 

us to avert a depression. 

Ms. SPEIER. Madam Speaker, Wednesday 

night, before returning to Washington, I had a 

telephone townhall in my district with over 

5,500 constituents. 

I’m here to report that they are angry. 

They are angry that the Government allowed Wall Street mega-banks and manipulators to act so irresponsibly that they have led 

our economy to the brink of disaster. 

They are angry that for over a decade, 

greed and abuse have been considered higher 

virtues than oversight and regulation. 

Madam Speaker, I’m angry, too. Because of 

the mess we’re in, school districts back home 

have lost hundreds of millions of dollars in 

their reserve accounts. A San Bruno man who 

worked for 30 years at United Airlines is seeing his pension dissolve before his eyes. And 

Tony, an independent businessman from San 

Carlos, will likely have to close his remodeling 

business if he is unable to get short-term credit for supplies. 

Now we hear that the State of California 

may have to declare bankruptcy. 

These reasons are why I will vote for this 

bill. 

But Madam Speaker, no one should interpret this vote as approval of the situation we 

find ourselves in. 

This anger will not easily dissipate. We must 

commit ourselves in the next Congress to reregulate the markets and repair the damage 

that years of ineptitude and inattention have 

wrought on our economy. 

Mr. FRELINGHUYSEN. Madam Speaker, I 

rise in support of H.R. 1424, the Emergency 

Economic Stabilization Act of 2008. 

Our Nation is facing unprecedented challenges and Congress needs to act, with bipartisanship, to restore confidence in our financial 

markets and get our economy back on the 

right track. People are depending on the Government to help restore stability. 

This legislation before us today, passed by 

the Senate Wednesday, is substantially improved from the version this House rejected 

on Monday. 

Some of my concerns from the earlier bill 

have been addressed, but not all. But I am in 

Washington to look for the best deal for the 

taxpayers. 

The most significant change is that this rescue package now includes Alternative Minimum Tax relief for my constituents in New 

Jersey, not just relief for Wall Street. 

The previous bill presented the taxpayer 

with a huge bill. This measure contains real 

relief for the hard-working New Jersey families 

and I commend the Senate for including what 

House Democrats have resisted. 

My colleagues, no one likes the concept of 

an unprecedented and expensive Federal 

Government intervention in our financial markets. But the cold, hard reality is that this rescue package, however oversized, is designed 

to shield millions of Americans from economic 

shock waves from problems they did not create. 

Our economy is built on credit and we need 

to get credit back into the markets. 

There can be no doubt that our financial 

markets are in crisis, suffering from a number 

of problems: 

(1) Banks and other financial institutions 

have billions of dollars of bad housing-related 

debt on their books, to the extent that many 

are technically insolvent. 

(2) But we also have a problem stemming 

from a serious crisis of confidence that has 

frozen the credit system. Financial institutions 

are, in essence, ‘‘hoarding’’ capital. Most are 

not lending money. 

As a result, we see credit markets which are 

limiting the ability of people and businesses to 

borrow. It’s a crisis that is affecting a wide 

range of Americans: Employees working for 

businesses dependent on available credit to 

cover payroll or buy inventory; retirees who 

count on their stocks and other investments to 

pay their bills and for future expenses; workers who have built pension funds and 401(k)s 

for their future security; families who have 

seen their home values drop precipitously, and 

their nest eggs are directly related to that 

value; families trying to buy homes or cars or 

secure student loans for college; men and 

women who work every day to keep their 

small businesses afloat. Without reliable credit, they cannot stay in business, let alone create jobs. 

With that said, I recognize that many people 

may not like the expensive rescue plan. But 

we have no alternative but to approve this legislation and do it quickly. 

Madam Speaker, the package that this 

House rejected, on a bipartisan basis, on 

Monday was much stronger than the original 

proposal offered by the Treasury Secretary 2 

weeks ago. That bill cut the Treasury’s upfront 

spending authority in half, included several important taxpayer protections, limitations on executive bonuses, improved bipartisan oversight and deleted ‘‘slush fund’’ financing for 

such partisan groups as ACORN, and trial 

lawyer giveaways. 

I am pleased that the package before us 

today is vastly improved over Monday’s bill. 

That legislation, in effect, handed the American people nothing but a huge bill to pay. 

This measure protects middle income Americans from tax increases and gives businesses 

the financial support they need to create and 

maintain jobs. 

Specifically, we are shielding tens of thousands of New Jersey taxpayers from the unfair 

Alternative Minimum Tax increase. 

New Jersey has the highest per capita rate 

of citizens subject to the AMT in the country. 

Without this fix approximately 1.6 million residents of New Jersey, including over 141,000 

families in my district, would be subject to the 

AMT this year. The provisions included in the 

Emergency Economic Stabilization Act will 

prevent approximately an additional 100,000 

residents of my district from paying this unfair 

tax. 

It is never a ‘‘good time’’ to raise taxes, but 

I cannot imagine a worse idea in times of economic slowdown. 

The bill also expands Federal Deposit Insurance Corporation protection for bank accounts 

to $250,000 per account from $100,000. This 

provision is designed to send a strong signal 

to depositors, individuals and small businesses alike, that their money is backed by 

the United States Government. 

The bill also includes: 

Tax relief for middle-class families and 

American businesses—the engine of job creation. These include credits and deductions for 

college tuition, children, and research and development. 

The extension of renewable energy tax incentives designed to build momentum toward 

reducing our dangerous dependence on foreign oil. 

Landmark mental health ‘‘parity’’ legislation 

which will increase health care coverage for 

Americans suffering with mental illness. 

I am also encouraged that the Securities 

and Exchange Commission, SEC, has issued 

accounting guidelines that allow banks to 

move away from ‘‘mark-to-market’’ accounting 

rules that artificially undervalue good mortgage 

assets and have helped aggravate this economic crisis. 

My colleagues, I am confident that, given 

additional time, we could make even more improvements to this legislation after we listen 

further to our constituents. However, it has become very apparent to me that we do not 

have additional time. 

We are in ‘‘panic mode’’ brought about by 

the unwise use of leverage, poor accounting 

rules, program trading, an explosion in the use 

of financial instruments, and lax regulation of 

our markets. 

Credit markets have frozen. Americans everywhere are feeling the pain through their 


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businesses, through their jobs, through their 

inability to get a mortgage, or a loan to buy a 

car, complete a home renovation, or finance a 

college education. 

As I stated initially, our economy faces historic and unprecedented challenges. Congress 

must take swift, decisive and bipartisan action 

to restore immediate confidence to the markets and set our economy back on the right 

track. 

This is a rescue package designed to shield 

millions of Americans from catastrophic shock 

waves of problems they did not create. 

We need to vote yes, and we need to vote 

now. 

But even after this vote, our work is not 

done. We need aggressive oversight over the 

actions of the Treasury and the Federal Reserve and more transparency in our financial 

markets. 

I urge passage of H.R. 1424. 

Mr. RAMSTAD. Madam Speaker, I rise in 

support of the revised economic recovery bill. 

The inclusion of the mental health parity bill, 

major tax relief and bank deposit, FDIC, insurance increases caused me to reconsider my 

position and I believe there’s too much at 

stake to let the legislation fail. 

The revised bill is a recovery bill for the 

economy and a recovery bill for millions of 

Americans suffering the ravages of mental illness and addiction. 

This revised legislation will also protect 22 

million middle-income taxpayers from the 

enormous tax increases of the Alternative Minimum Tax, AMT. 

Madam Speaker, the revised bill also extends research and development tax credits to 

create jobs and renewable energy credits to 

reduce our dependence on foreign oil. The revised bill also includes higher education deductions and child credits to help families and 

students. 

Also, the revised bill increases bank deposit 

insurance limits, FDIC, to $250,000 to protect 

depositors and help small businesses that 

need credit. 

Madam Speaker, I will vote for the revised 

economic recovery plan to help Minnesota’s 

working families, seniors and small businesses 

during this historic crisis in our economy. The 

credit crisis is real, and it’s destroying jobs, retirement savings and the American dream. 

Mr. TERRY. Madam Speaker, I rise in support of H.R. 1424 because it is, in my opinion, 

our last opportunity to save jobs, save small 

businesses, and I pray prevent a collapse of 

our economy. I believe that is what we are 

facing today. 

I have heard from hundreds of Nebraskans 

who have contacted me by phone, email, or 

have just come up to me when I was home. 

All of them are angry. Angry at the greed, arrogance, and just plain reckless nature of Wall 

Street. Angry at Congress and the administration who have now proposed using taxpayers’ 

dollars to bail out those greedy investment 

bankers, traders, and CEOs. People have 

every right to be angry at these self-important 

Wall Street executives who cared more about 

themselves by making a quick buck no matter 

the risk or lack of ethics just so they could 

earn multi-million dollar salaries. 

Madam Speaker, I share that anger. Maybe 

even a little more, as my constituents have 

transferred their anger onto the one who they 

can reach out to—me. I have to admit that listening to their anger and fright, sharing their 

true feelings, but knowing that I have the responsibility as their Representative in Congress to do something to help them, has increased my frustration to a level I’ve never experienced before as a Member of Congress. 

Still, something must be done. Inaction may 

be ‘‘something,’’ but it is not the answer. 

I now know that to save ourselves we must 

also save the pigs. Those greedy pigs on Wall 

Street don’t deserve help from hard-working 

Americans. But allowing them to fail will cause 

so many other businesses that conducted their 

business in good faith, ethically and conservatively to lose access to credit, lose business, 

and eventually maybe have to close their 

doors. Yes, even in Nebraska, far away from 

Wall Street. I have heard from several business leaders in Omaha who say they will have 

to lay off some employees if liquidity in our financial system is not restored. One business 

owner told me they are at risk of shutting their 

doors and every employee will be laid off. My 

vote today is to help the people of Nebraska, 

protect their jobs, and protect their savings. 

So, is this bill the best answer? Probably 

not. I prefer stimulating the economy by eliminating or suspending the capital gains tax, 

providing an incentive to purchase of homes 

with a tax credit, transferring the toxic mortgage debt to the free market, using insurance 

to cover future debt, and encouraging the Federal Reserve to release more money to central 

banks for increased liquidity. I also support 

suspending an arcane federal accounting rule 

mandated on publicly traded companies 

known as ‘‘mark to market’’. 

The mark to market rule forces firms to report the current market value of an asset. So 

when no market exists at a point in time for an 

asset then its value is zero or next to zero. 

But the asset has value and will have more 

value in the future. The rule is unforgiving and 

has caused companies to declare they are 

bankrupt—when they are really worth more. 

Madam Speaker, the first bill brought to 

Congress by Treasury Secretary Paulson on 

Monday, September 22, was insulting. The bill 

would have given Secretary Paulson complete 

control over $700 billion, no questions asked, 

no transparency, no accountability, and no 

punishment of the hogs on Wall Street. 

After several listening sessions with Members our leadership began negotiations with 

Secretary Paulson. These talks were painful 

and long with many starts and stops and a 

premature declaration of done deal. After several days, a true deal was announced. Some 

of the good ideas by Members to improve the 

bill were included, but very few. 

I knew we could do a much better job to 

protect the taxpayers and I felt the responsibility to continue to try. I also knew that I could 

vote ‘‘no,’’ and allow the bill to fail. Then, 

maybe then, the administration would listen. 

That’s exactly what happened. I voted 

against it and once again offered seven provisions to the White House and leadership to 

make it a better bill. Those improvements included suspension of mark to market, more 

use of FDIC insurance, and reinstating the socalled ‘‘uptick’’ rule. The first two priorities 

were agreed to and made a part of the final 

bill. 

This bill prohibits the use of tax dollars for 

executive severance packages, creates a 

board of directors to approve of the Secretary 

of Treasury’s decisions spending tax dollars, 

greater oversight by Congress, slowing the release of tax dollars, allowing the SEC Chairman to waive the mark to market rule when no 

market exists for a particular asset (the SEC 

chairman agreed to do so), and providing insurance to limit the taxpayer’s risk of loss 

where the Government purchased toxic debt. 

Finally, I want to thank a number of individuals in the Omaha community who took the 

time to talk to me about the bill and legitimacy 

of the crisis. They made me better informed 

about this problem from a Nebraska perspective, thereby allowing me to step back and be 

more thoughtful on how to proceed. Your advice and assistance was much appreciated. 

Madam Speaker, this is not the perfect solution, it’s not even a good one, but it is the solution before us today. And I will support it because I can’t look into the eyes of someone 

who has just lost their job and say, ‘‘I did nothing to help.’’ 

Mr. DINGELL. Madam Speaker, on Monday 

I urged my colleagues to support economic recovery legislation, and I continue to urge them 

to do so today. When I voted against the 

Gramm-Leech-Bliley Act in 1999 I warned my 

colleagues that the Government would one 

day be called upon to rescue failing financial 

institutions. As angry as I am that my prediction was accurate, I know that on this day 

inaction is not an option. I still have reservations about this legislation. I do not believe it 

sufficiently addresses the financial services industry deregulation that allowed this crisis to 

happen, and I do not believe that it does 

enough for struggling families. However, I 

know that the people of this country cannot afford to go another day without action. 

After our failure to pass this legislation on 

Monday the stock market suffered the greatest 

one day decline in its history. The Wall Street 

executives and investment bankers that got us 

into this mess surely took a hit, but so too did 

individual retirement accounts and state pension funds. For example, the State of Michigan 

estimates that individual investors in the state 

have lost over $27 billion in the stock market 

in the last year, and the Michigan Pension 

Fund lost $2.3 billion on Monday after the 

House voted down this plan. Should Wall 

Street decline further and the value of the dollar continue to fall, it will mean greater unemployment, even higher prices for basic commodities, and access to credit for things like 

college education or home improvements will 

be even harder to obtain. The impact on the 

broader economy will be felt by every American. 

In fact, the lack of credit in the marketplace 

is already affecting some parts of the broader 

economy. Auto sales were down 27 percent in 

the past year, in part because consumers cannot get access to credit for car loans. The 

automobile financing companies are not responsible for the current credit crisis, but they 

will be eligible to participate in this program to 

obtain the credit they need to keep vehicle 

sales strong. This week I learned about a financially sound manufacturing company in 

Michigan that is seeking a mortgage to replace its current building, which it has outgrown, with a new facility that will allow the 

company to expand its operations and add 

much needed jobs. This company is struggling 

to even find a bank willing to loan it money. 

Small and medium-sized businesses did not 

cause this crisis, but unless this crisis is addressed and the credit markets are restored 

they will find themselves unable to do business. 


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October 3, 2008 CONGRESSIONAL RECORD — HOUSE H10795 

Despite my lingering concerns that this is 

not the best possible way to address this crisis, we clearly have to act to avert a much 

larger economic failure. In the months ahead, 

we can continue to revisit these issues and 

work together to adopt measures that restore 

the regulatory structure that is supposed to 

protect the financial system from this kind of 

failure, and that provide much needed assistance to the hard-working men and women 

who are suffering because of the economic climate created by irresponsible parties on Wall 

Street and here in Washington. I urge my colleagues to support the legislation before us 

today as a matter of great national urgency. 

Mr. COOPER. Madam Speaker, I would like 

to submit for the RECORD a letter of support 

for the economic rescue plan currently before 

Congress submitted by the Business Roundtable. 

BUSINESS ROUNDTABLE, 

Washington, DC, October 1, 2008. 

To: Members of Congress 

Re: Economic Rescue Plan 

The failure to pass emergency legislation 

to rescue the U.S. financial system will put 

our entire economy at risk. The resulting 

turmoil in equity markets has already wiped 

out hundreds of billions of dollars in household wealth and the retirement savings of 

the American people. But the impact of this 

crisis extends well beyond the financial industry. 

As business leaders representing companies 

that generate more than $5 trillion of U.S. 

GDP—more than one-third of the U.S. economy—we are already seeing the damage 

spread to every sector of our economy. Credit is being shut off to both small businesses 

trying to meet payroll and families struggling to pay college tuition bills. Retail sales 

are declining each week as consumer confidence collapses. More business failures, job 

losses and significantly higher unemployment loom on the horizon. 

Further delay will only increase these adverse impacts on America’s economy. We 

urge Congress to act immediately to pass bipartisan legislation to stabilize the U.S. financial system and contain the damage to 

our broader economy while that opportunity 

still exists. The American people have always risen to whatever economic challenges 

they have faced, and with swift congressional action we can meet this crisis and restore our economy to its historic path of 

strong growth and rising prosperity. 

Sincerely, 

Enrique O. Santacana, President and 

Chief Executive Officer, ABB Inc.; 

Miles D. White, Chairman and CEO, 

Abbott; William D. Green, Chairman & 

CEO, Accenture; Evan G. Greenberg, 

Chairman and Chief Executive Officer, 

ACE Group; Gary C. Butler, President 

and CEO, ADP; Ronald A. Williams, 

Chairman and CEO, Aetna Inc.; Klaus 

Kleinfeld, President and CEO, Alcoa 

Inc.; John E. McGlade, Chairman, 

President, and CEO, Air Products and 

Chemicals, Inc.; James L. Wainscott, 

Chairman, President & CEO, AK Steel 

Corporation; Thomas J. Wilson, Chairman, President & CEO, Allstate Insurance Company; Lee Styslinger, III, 

Chairman & CEO, Altec, Inc.; Michael 

G. Morris, Chairman, President and 

Chief Executive Officer, American 

Electric Power Company, Inc. 

Kenneth I. Chenault, Chairman and CEO, 

American Express Company; James M. 

Cracchiolo, Chairman and Chief Executive Officer, Ameriprise Financial; 

James T. Hackett, Chairman, President & CEO, Anadarko Petroleum Corporation; Paul W. Jones, Chairman and 

CEO, A.O. Smith Corporation; G. Steven Farris, President, Chief Executive 

Officer and Chief Operating Officer, 

Apache Corporation; Steven F. Leer, 

Chairman & CEO, Arch Coal, Inc.; Patricia A. Woertz, Chairman, CEO & 

President, Archer Daniels Midland 

Company; Charles G. ‘‘Chip’’ McClure, 

Chairman, CEO and President, 

ArvinMeritor, Inc.; Dean A. Scarborough, President & CEO, Avery 

Dennison; Ronald L. Nelson, Chairman 

& CEO, Avis Budget Group; Riley P. 

Bechtel, Chairman & CEO, Bechtel 

Group, Inc.; Stephen A. Schwarzman, 

Chairman and CEO, The Blackstone 

Group. 

W. James McNerney, Jr., Chairman of 

the Board, President and Chief Executive Officer, The Boeing Company; Robert A. Malone, Chairman & President, 

BP America Inc.; Michael T. Dan, 

Chairman, President & CEO, The 

Brink’s Company; John A. Swainson, 

CEO, CA, Inc.; Harold D. Boyanovsky, 

President and CEO, Case New Holland 

Inc.; James W. Owens, Chairman and 

CEO, Caterpillar, Inc.; Kathryn V. 

Marinello, Chairman and Chief Executive Officer, Ceridian Corporation; 

Dave O’Reilly, Chairman and CEO, 

Chevron Corporation; H. Edward 

Hanway, Chairman and Chief Executive 

Officer, CIGNA corporation; Muhtar 

Kent, President and Chief Operating 

Officer, The Coca-Cola Company; Mayo 

A. Shattuck, III, Chairman, President 

& CEO, Constellation Energy; David F. 

Dougherty, President and CEO, 

Convergys Corporation. 

Douglas W. Stotlar, President & CEO, 

Con-way Inc.; Wendell P. Weeks, Chairman and Chief Executive Officer, Corning Incorporated; Eric C. Fast, President & Chief Executive Officer, Crane 

Co.; Michael J. Ward, Chairman, President & CEO, CSX Corporation; Tim 

Solso, Chairman & CEO, Cummins Inc.; 

Robert W. Lane, Chairman and CEO, 

Deere & Company; James H. Quigley, 

Chief Executive Officer, Deloitte Touche Tohmatsu; Robert S. Miller, Executive Chairman, Delphi Corporation; 

J.T. Battenberg, III, Chairman, CEO— 

Retired, Delphi Corporation; Andrew N 

Liveris, Chairman & CEO, The Dow 

Chemical Company; Chad Holiday, 

Chairman and CEO, DuPont; J. Brian 

Ferguson, Chairman and Chief Executive Officer, Eastman Chemical Company. 

Antonio M. Perez, Chairman and CEO, 

Eastman Kodak Company; Alexander 

M. Cutler, Chairman and CEO, Eaton 

Corporation; John C. Lechleiter, President and CEO, Eli Lilly and Company; 

James S. Turley, Chairman and Chief 

Executive Officer, Ernst & Young LLP; 

William G. Walter, President and Chief 

Executive Officer, FMC Corporation; 

Lewis Hay, III, Chairman and Chief Executive Officer, FPL Group, Inc.; Jeffrey R. Immelt, Chairman & CEO, GE; 

G.R. Wagoner, Jr., Chairman and Chief 

Executive Officer, General Motors Corporation; Marshall O. Larsen, Chairman, President & CEO, Goodrich Corporation; Dinesh C. Paliwal, Chairman 

& CEO, Harman International Industries, Inc.; David M. Cote, Chairman 

and Chief Executive Officer, Honeywell 

International Inc.; Brendan McDonagh, 

CEO, HSBC North America Holdings 

Inc. 

Mike McCallister, President and Chief 

Executive Officer, Humana Inc.; Samuel J Palmisano, Chairman, President 

& CEO, IBM Corporation; John V. 

Faraci, Chairman and Chief Executive 

Officer, International Paper; Steven R. 

Loranger, Chairman, President and 

CEO, ITT Corporation; Steve Roell, 

Chairman and CEO, Johnson Controls, 

Inc.; Timothy P. Flynn, Chairman & 

CEO, KPMG; Edmund F. Kelly, Chairman, President and CEO, Liberty Mutual Group; Stuart H. Reese, Chairman, 

President and CEO, MassMutual Financial Group; Harold McGraw III, Chairman, President and CEO, The McGrawHill Companies; John H. Hammergren, 

Chairman and CEO, McKesson Corporation; David B. Snow, Jr., Chairman & 

CEO, Medco Health Solutions, Inc.; 

Gregory Q. Brown, President & CoCEO, Motorola, Inc. 

John A. Luke, Jr., Chairman & CEO, 

MWV Corporation; Thomas C. Nelson, 

Chairman, President & CEO, National 

Gypsum Company; Jerry Jurgensen, 

Chief Executive Officer, Nationwide 

Mutual Insurance Company; Dan 

Ustian, Chairman, President & CEO, 

Navistar; Ted Mathas, President & 

CEO, New York Life Insurance; C.W. 

Moorman, Chairman, President and 

CEO, Norfolk Southern Corporation; 

Daniel R DiMicco, Chairman and CEO, 

NUCOR CORPORATION; Steve Odland, 

Chairman & CEO, Office Depot, Inc.; 

Michael H. Thaman, Chairman and 

CEO, Owens Corning; Richard L. 

Wambold, Chairman and CEO, Pactiv 

Corporation; Jeffrey B. Kindler, Chairman and CEO, Pfizer Inc.; Steve Angel, 

Chairman and CEO, Praxair, Inc. 

Dennis M. Nally, Chairman and Senior 

Partner, PricewaterhouseCoopers; 

Larry Zimpleman, President and Chief 

Executive Officer, Principal Financial 

Group; A.G. Lafley, Chairman of the 

Board and Chief Executive Officer, The 

Procter & Gamble Company; Ralph 

Izzo, Chairman of the Board, President 

& Chief Executive Officer, Public Service Enterprise Group Inc.; Henry R. Silverman, Chairman, Realogy Corporation; Keith D. Nosbusch, Chairman & 

CEO, Rockwell Automation; Brenda C. 

Barnes, Chairman and CEO, Sara Lee 

Corporation; James H. Goodnight, CEO 

and Founder, SAS; Fred Hassan, Chairman and Chief Executive Officer, Schering-Plough Corporation; J. Patrick 

Spainhour, CEO, ServiceMaster Global 

Holdings; George Nolen, CEO, Siemens 

Corporation; Edward B. Rust Jr., 

Chairman and CEO, State Farm Insurance. 

Lewis B. Campbell, Chairman, President 

and Chief Executive Officer, Textron 

Inc.; Marijn E. Dekkers, President and 

CEO, Thermo Fisher Scientific; Tom 

Lynch, Chief Executive Officer, Tyco 

Electronics; Edward D. Breen, Chairman and CEO, Tyco International; Jim 

Young, Chairman, Union Pacific; Louis 

R. Cheˆnevert, President & Chief Executive Officer, United Technologies Corporation; Ivan Seidenberg, Chairman 

and CEO, Verizon; Dan Fulton, President and CEO, Weyerhaeuser Company; 

Jeff M. Fettig, Chairman and CEO, 

Whirlpool Corporation; Steven J. Malcolm, Chairman, President & CEO, The 

Williams Companies, Inc.; Anne M. 

Mulcahy, Chairman and Chief Executive Officer, Xerox Corporation; William D. Zollars, Chairman, President & 

CEO, YRC Worldwide. 

Mr. CONYERS. Madam Speaker, today the 

House of Representatives will vote for the second time this week on Secretary Paulson’s 

flawed bailout legislation. His plan lacks the 


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H10796 CONGRESSIONAL RECORD — HOUSE October 3, 2008 

core principles needed to improve the economy. To be a viable plan, the legislation must 

include (1) enacting a moratorium on foreclosures, (2) restructuring mortgages to make 

them more affordable, and (3) prohibiting interest rate increases associated with subprime 

loans. These initiatives can be achieved without spending one dollar of the taxpayer’s 

money. In addition, empowering the Federal 

Deposit Insurance Corporation to guarantee all 

depositors and bond holders would provide 

immediate liquidity to credit markets. 

If the Congress acts imprudently today, we 

may end up draining our national treasury of 

over $700 billion in resources without curing 

our economic ills. Such a decision could effectively tie the hands of the next President and 

kill universal health care and job programs before they are ever drafted. 

I agree with former World Bank chief economist Joseph Stiglitz and other leading economists that action must be taken to tackle the 

problem posed by the tightening of the credit 

market. I simply disagree with the administration’s proposed solution. 

Although it hasn’t been reported in the 

mainstream media, there are real legislative 

alternatives to this bailout that have been vetted by some of the best economic minds in 

the Congress. 

One plan, offered by Representative PETER

DEFAZIO and other members of the so-called 

‘‘Bailout Skeptics’’ Caucus, proposes some 

common sense changes to Securities and Exchange Commission rules and Federal Deposit Insurance Corporation policies. I have 

cosponsored this legislation because I believe 

it will efficiently free-up capital, protect the taxpayer, and give the next President the fiscal 

flexibility he will need to address the dire problems brought about by the current economic 

slowdown. 

Another plan, proposed by billionaire financier George Soros, mimics a successful 

model used in Norway and Sweden. The plan 

would inject credit into the markets in a direct 

and low-risk manner by empowering the 

Treasury Department to purchase preferred 

stock and discounted common stock from faltering lenders. I called for this type of direct 

capital deployment measure earlier this week, 

because it would provide the taxpayers with a 

tangible return on their investment and keep 

toxic mortgage-backed securities off the government’s books. 

On top of these plans, I and many of my 

progressive colleagues have continually advocated for bankruptcy reform that would give 

judges the freedom to renegotiate home mortgages during court proceedings. National Assistance Corporation of America CEO Bruce 

Marks and I agree that this reform is a necessary component of any bailout plan. 

Most Americans have never heard of any of 

these alternative proposals because they have 

only been presented with a single, flawed narrative—either accept this bailout plan or tempt 

economic catastrophe. This is a false choice 

that, unfortunately, has been successfully peddled by the President’s fear-mongers and 

broadcast by a compliant media. 

The tactic being used by Paulson creates 

an atmosphere of fear. The events of the last 

two weeks are reminiscent of the days leading 

up to the adoption of the Patriot Act, and to 

the invasion of Iraq—times where fearmongering dampened the careful and deliberate consideration of alternative courses of 

action. This time, instead of scaring the American people with tales of weapons of mass destruction or planes piloted by terrorists, the 

President bullies the taxpayer with dire warnings of a credit freeze that will bring our economy to its knees. 

There are serious options for dealing with 

this crisis that don’t involve giving away billions to the richest, most irresponsible businessmen. My vote against the bailout today is 

not a do-nothing vote; it is a vote for a real solution. We cannot afford to repeat the mistakes of the past. Detroiters, Michiganders, 

Americans, and billions of people around the 

world are depending on us to get it right. 

Mr. MORAN of Virginia. Madam Speaker, 

under the Emergency Economic Stabilization 

Act of 2008, the Treasury Department’s Troubled Assets Relief Program (TARP) will have 

the ability to support the financial system 

through the purchase of securities and through 

investing in equity/preferred securities. I 

strongly believe equity infusion if used wisely 

will have greater benefits for our economy and 

yield higher returns to American taxpayers. 

A strong consensus among financiers and 

economists has developed supporting these 

conclusions. George Soros, Joeseph Stigliz, 

Bradford Delong, Paul Krugman, John Makin, 

Alex Pollack, Lucien Bebchuk, and Edmund 

Phelps are a sample of the bipartisan expertise that has contributed to the debate and 

strongly support the finding that using capital 

infusions rather than distressed asset purchases alone will have a far greater re-invigorating effect on our economy. 

If done effectively, equity infusions will introduce 10 to 12 times the amount of the initial 

government investment into our credit markets. This means that capital infusions of $700 

billion would yield credit flow effects totaling 

$8.4 trillion. In contrast, distressed asset purchases of $700 billion yield credit flow effects 

of only $700 billion. Capital infusions could 

give us 12 times the support for the communities and small businesses that badly need 

credit. 

The capital infusion approach would involve 

using Warren Buffett type investment strategies and would result in the government owning equity interests in the institutions which are 

assisted. If these government investments do 

only half as well as Buffett’s investments in 

distressed institutions such as Goldman 

Sachs, U.S. taxpayers will earn as much as 

$200 billion profit when the financial sector recovers. This is far beyond any forecast return 

to taxpayers from buying distressed assets. In 

fact the difference for taxpayers of the two 

methods could be as large as $375 billion. 

This will result in lower taxes longer term and 

better health care, better schools, and a cleaner environment. Because it is sound, transparent and effective, it will restore global confidence in the U.S. economy. 

I attach three articles from George Soros, 

Lucien Bebchuk, and Joseph Stiglitz, to be included in the RECORD. 

[From the Financial Times, Oct. 1, 2008] 

RECAPITALISE THE BANKING SYSTEM

(By George Soros) 

The emergency legislation currently before 

Congress was ill-conceived—or more accurately, not conceived at all. As Congress 

tried to improve what Treasury originally 

requested, an amalgam plan has emerged 

that consists of Treasury’s original Troubled 

Asset Relief Programme (Tarp) and a quite 

different capital infusion programme in 

which the government invests and stabilises 

weakened banks and profits from the economy’s eventual improvement. The capital infusion approach will cost tax payers less in 

future years, and may even make money for 

them. 

Two weeks ago the Treasury did not have 

a plan ready—that is why it had to ask for 

total discretion in spending the money. But 

the general idea was to bring relief to the 

banking system by relieving banks of their 

toxic securities and parking them in a government-owned fund so that they would not 

be dumped on the market at distressed 

prices. With the value of their investments 

stabilised, banks would then be able to raise 

equity capital. 

The idea was fraught with difficulties. The 

toxic securities in question are not homogenous and in any auction process the sellers 

are liable to dump the dregs on to the government fund. Moreover, the scheme addresses only one half of the underlying problem— 

the lack of credit availability. It does very 

little to enable house owners to meet their 

mortgage obligations and it does not address 

the foreclosure problem. With house prices 

not yet at the bottom, if the government 

bids up the price of mortgage backed securities, the taxpayers are liable to lose; but if 

the government does not pay up, the banking 

system does not experience much relief and 

cannot attract equity capital from the private sector. 

A scheme so heavily favouring Wall Street 

over Main Street was politically unacceptable. It was tweaked by the Democrats, who 

hold the upper hand, so that it penalises the 

financial institutions that seek to take advantage of it. The Republicans did not want 

to be left behind and imposed a requirement 

that the tendered securities should be insured against loss at the expense of the tendering institution. The rescue package as it 

is now constituted is an amalgam of multiple 

approaches. There is now a real danger that 

the asset purchase programme will not be 

fully utilised because of the onerous conditions attached to it. 

Nevertheless, a rescue package was desperately needed and, in spite of its shortcomings, it would change the course of 

events. As late as last Monday, September 

22, Treasury secretary Hank Paulson hoped 

to avoid using taxpayers’ money; that is why 

he allowed Lehman Brothers to fail. Tarp establishes the principle that public funds are 

needed and if the present programme does 

not work, other programmes will be instituted. We will have crossed the Rubicon. 

Since Tarp was ill-conceived, it is liable to 

arouse a negative response from America’s 

creditors. They would see it as an attempt to 

inflate away the debt. The dollar is liable to 

come under renewed pressure and the government will have to pay more for its debt, 

especially at the long end. These adverse 

consequences could be mitigated by using 

taxpayers’ funds more effectively. 

Instead of just purchasing troubled assets 

the bulk of the funds ought to be used to 

recapitalise the banking system. Funds injected at the equity level are more high-powered than funds used at the balance sheet 

level by a minimal factor of twelve—effectively giving the government $8,400bn to reignite the flow of credit. In practice, the effect would be even greater because the injection of government funds would also attract 

private capital. The result would be more 

economic recovery and the chance for taxpayers to profit from the recovery. 

This is how it would work. The Treasury 

secretary would rely on bank examiners 

rather than delegate implementation of Tarp 

to Wall Street firms. The bank examiners 

would establish how much additional equity 


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October 3, 2008 CONGRESSIONAL RECORD — HOUSE H10797 

capital each bank needs in order to be properly capitalised according to existing capital 

requirements. If managements could not 

raise equity from the private sector they 

could turn to Tarp. 

Tarp would invest in preference shares 

with warrants attached. The preference 

shares would carry a low coupon (say 5 per 

cent) so that banks would find it profitable 

to continue lending, but shareholders would 

pay a heavy price because they would be diluted by the warrants; they would be given 

the right, however, to subscribe on Tarp’s 

terms. The rights would be tradeable and the 

secretary of the Treasury would be instructed to set the terms so that the rights 

would have a positive value. 

Private investors, including me, are likely 

to jump at the opportunity. The 

recapitalised banks would be allowed to increase their leverage, so they would resume 

lending. Limits on bank leverage could be 

imposed later, after the economy has recovered. If the funds were used in this way, the 

recapitalisation of the banking system could 

be achieved with less than $500bn of public 

funds. 

A revised emergency legislation could also 

provide more help to homeowners. It could 

require the Treasury to provide cheap financing for mortgage securities whose terms 

have been renegotiated, based on the Treasury’s cost of borrowing. Mortgage service 

companies could be prohibited from charging 

fees on foreclosures, but they could expect 

the owners of the securities to provide incentives for renegotiation as Fannie Mae and 

Freddie Mac are already doing. 

Banks deemed to be insolvent would not be 

eligible for recapitalization by the capital 

infusion programme, but would be taken 

over by the Federal Deposit Insurance Corporation. The FDIC would be recapitalised 

by $200bn as a temporary measure. FDIC, in 

turn could remove the $100,000 limit on insured deposits. A revision of the emergency 

legislation along these lines would be more 

equitable, have a better chance of success, 

and cost taxpayers less in the long run. 

[From the Financial Times, Oct. 1st, 2008] 

THE RESCUE PLAN: DIRECT CAPITAL INVESTMENTS WOULD BE BETTER FOR BOTH MARKETS AND TAXPAYERS

(By Lucian Bebchuk) 

Most immediate reactions to the defeat of 

the emergency legislation in the House of 

Representatives seem to assume that, facing 

a choice between approval and government 

inaction that could bring about a financial 

meltdown, the House irresponsibly and irrationally opted for the latter. But the defeat 

of this particular bill hardly leaves us with 

inaction as the only alternative. 

The bill was defeated at least partly because of its inability to gather sufficient 

public support due to its evident flaws. Congress can and should adopt quickly a bill 

that would address these flaws and consequently enjoy strong public support. 

There is widespread recognition of the 

depth of the crisis and the need for governmental intervention. Why was the bill nonetheless defeated? Because there is an equally 

widespread recognition that spending $700 

billion on purchasing (and insuring) toxic 

paper would be a highly flawed form of intervention. 

During the week preceding the vote, it has 

become evident that the government’s contemplated plans for valuing troubled assets 

would lead to a quagmire. Opposition to the 

bill grew due to expectations that purchasing toxic paper could well result in massive complexities, large giveaways, and substantial public losses. 

At the same time, recognition has grown 

that, notwithstanding these large costs, the 

proposed plan would fail to provide the financial sector with capital infusions that 

would be as immediate, large, and appropriately targeted as needed. Because the bill 

would provide financial firms with extra capital largely through overpaying for troubled 

assets (or under-pricing insurance for such 

assets), it would provide capital only following the consummation of complex and 

time-consuming processes and cannot be 

counted on to supply capital where and when 

it would be most useful. 

Suppose that a financial firm runs into 

trouble, needs a substantial infusion of capital within days, and is viewed by the government as important to save. Even if the rejected bill were in effect at present, it would 

not provide the government with effective 

tools to deal with such a situation. For one 

thing, purchasing the many types of troubled 

assets the firm may own through the bill’s 

contemplated valuation procedures would require a long delay. 

Consider the government’s recent infusion 

of capital into AIG. Facing the risk of AIG’s 

collapse, the government provided $85 billion 

right away and received in return an agreed 

upon set of debt and equity instruments. Had 

the bill passed on Monday and AIG subsequently needed assistance, the funds 

authorised by the bill might not be usable 

for such capital infusion by the government. 

Purchasing the large and highly heterogeneous portfolio of troubled assets owned 

by AIG through valuation processes would 

not provide an effective and timely form of 

intervention. 

The passage of the defeated bill thus would 

not have effectively dispelled the financial 

markets’ worries. To do so, Congress should 

not reconsider the rejected bill but rather 

pass an authorization for the treasury to infuse capital into financial firms. The same 

big, market-reassuring number can be used: 

$700 billion. But the bill, which I expect to 

obtain wide public support, should focus on 

and permit direct capital investment of the 

authorised funds. 

The Treasury’s direct capital investments 

should be guided by the objectives of restoring stability to the financial markets and 

protecting taxpayers. When a firm is solvent 

and undercapitalised, the Treasury should 

insist on getting a set of new capital securities that would provide the government with 

adequate return on its investment. 

In cases in which a firm is insolvent and 

not merely undercapitalised, the Treasury 

should still be permitted to make a capital 

investment if it views the firm’s continued 

operations as necessary to avoid disruption 

to the financial markets. Taxpayer losses 

from the legislation would be limited to such 

cases, and these losses would be kept to a 

minimum by the government’s investing in 

such cases only on terms effectively enabling 

it to take over the firm’s equity. 

It would be perfectly fine for Congress to 

include authorisation to purchase toxic assets in the adopted legislation. But the bill 

should not contemplate that such purchases 

would be a primary form for injecting capital to financial firms, and it should allow 

such purchases only if they are done at fair 

market value. 

Financial markets should be reassured 

that the Treasury is equipped with the best 

tools for addressing distress in financial 

firms and for shoring up these firms’ capital. 

Congress should move quickly to adopt legislation authorizing the use of $700 billion for 

infusing capital into financial firms. If it 

does, Monday’s defeat of the proposal to 

spend $700 billion on purchasing toxic paper 

might turn into a blessing. 

[From The Nation, Sept. 26, 2008] 

A BETTER BAILOUT

(By Joseph E. Stiglitz) 

The champagne bottle corks were popping 

as Treasury Secretary Henry Paulson announced his trillion-dollar bailout for the 

banks, buying up their toxic mortgages. To a 

skeptic, Paulson’s proposal looks like another of those shell games that Wall Street 

has honed to a fine art. Wall Street has always made money by slicing, dicing and recombining risk. This ‘‘cure’’ is another one 

of these rearrangements: somehow, by stripping out the bad assets from the banks and 

paying fair market value for them, the value 

of the banks will soar. 

There is, however, an alternative explanation for Wall Street’s celebration: the 

banks realized that they were about to get a 

free ride at taxpayers’ expense. No private 

firm was willing to buy these toxic mortgages at what the seller thought was a reasonable price; they finally had found a sucker who would take them off their hands— 

called the American taxpayer. 

The administration attempts to assure us 

that they will protect the American people 

by insisting on buying the mortgages at the 

lowest price at auction. Evidently, Paulson 

didn’t learn the lessons of the information 

asymmetry that played such a large role in 

getting us into this mess. The banks will 

pass on their lousiest mortgages. Paulson 

may try to assure us that we will hire the 

best and brightest of Wall Street to make 

sure that this doesn’t happen. (Wall Street 

firms are already licking their lips at the 

prospect of a new source of revenues: fees 

from the U.S. Treasury.) But even Wall 

Street’s best and brightest do not exactly 

have a credible record in asset valuation; if 

they had done better, we wouldn’t be where 

we are. And that assumes that they are really working for the American people, not 

their long-term employers in financial markets. Even if they do use some fancy mathematical model to value different mortgages, 

those in Wall Street have long made money 

by gaming against these models. We will 

then wind up not with the absolutely 

lousiest mortgages, but with those in which 

Treasury’s models most underpriced risk. Either way, we the taxpayers lose, and Wall 

Street gains. 

And for what? In the S&L bailout, taxpayers were already on the hook, with their 

deposit guarantee. Part of the question then 

was how to minimize taxpayers’ exposure. 

But not so this time. The objective of the 

bailout should not be to protect the banks’ 

shareholders, or even their creditors, who facilitated this bad lending. The objective 

should be to maintain the flow of credit, especially to mortgages. But wasn’t that what 

the Fannie Mae/Freddie Mac bailout was supposed to assure us? 

There are four fundamental problems with 

our financial system, and the Paulson proposal addresses only one. The first is that 

the financial institutions have all these 

toxic products—which they created—and 

since no one trusts anyone about their value, 

no one is willing to lend to anyone else. The 

Paulson approach solves this by passing the 

risk to us, the taxpayer—and for no return. 

The second problem is that there is a big and 

increasing hole in bank balance sheets— 

banks lent money to people beyond their 

ability to repay—and no financial alchemy 

will fix that. If, as Paulson claims, banks get 

paid fairly for their lousy mortgages and the 

complex products in which they are embedded, the hole in their balance sheet will remain. What is needed is a transparent equity 

injection, not the non-transparent ruse that 

the administration is proposing. 

The third problem is that our economy has 

been supercharged by a housing bubble which 


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has now burst. The best experts believe that 

prices still have a way to fall before the return to normal, and that means there will be 

more foreclosures. No amount of talking up 

the market is going to change that. The hidden agenda here may be taking large 

amounts of real estate off the market—and 

letting it deteriorate at taxpayers’ expense. 

The fourth problem is a lack of trust, a 

credibility gap. Regrettably, the way the entire financial crisis has been handled has 

only made that gap larger. 

Paulson and others in Wall Street are 

claiming that the bailout is necessary and 

that we are in deep trouble. Not long ago, 

they were telling us that we had turned a 

corner. The administration even turned 

down an effective stimulus package last February—one that would have included increased unemployment benefits and aid to 

states and localities—and they still say we 

don’t need another stimulus. To be frank, 

the administration has a credibility and 

trust gap as big as that of Wall Street. If the 

crisis was as severe as they claim, why didn’t 

they propose a more credible plan? With lack 

of oversight and transparency the cause of 

the current problem, how could they make a 

proposal so short in both? If a quick consensus is required, why not include provisions to stop the source of bleeding, to aid 

the millions of Americans that are losing 

their homes? Why not spend as much on 

them as on Wall Street? Do they still believe 

in trickle-down economics, when for the past 

eight years money has been trickling up to 

the wizards of Wall Street? Why not enact 

bankruptcy reform, to help Americans write 

down the value of the mortgage on their 

overvalued home? No one benefits from these 

costly foreclosures. 

The administration is once again holding a 

gun at our head, saying, ‘‘My way or the 

highway.’’ We have been bamboozled before 

by this tactic. We should not let it happen to 

us again. There are alternatives. Warren Buffet showed the way, in providing equity to 

Goldman Sachs. The Scandinavian countries 

showed the way, almost two decades ago. By 

issuing preferred shares with warrants (options), one reduces the public’s downside risk 

and insures that they participate in some of 

the upside potential. This approach is not 

only proven, it provides both incentives and 

wherewithal to resume lending. It furthermore avoids the hopeless task of trying to 

value millions of complex mortgages and 

even more complex products in which they 

are embedded, and it deals with the ‘‘lemons’’ problem—the government getting stuck 

with the worst or most overpriced assets. 

Finally, we need to impose a special financial sector tax to pay for the bailouts conducted so far. We also need to create a reserve fund so that poor taxpayers won’t have 

to be called upon again to finance Wall 

Street’s foolishness. 

If we design the right bailout, it won’t lead 

to an increase in our long-term debt—we 

might even make a profit. But if we implement the wrong strategy, there is a serious 

risk that our national debt—already overburdened from a failed war and eight years of 

fiscal profligacy—will soar, and future living 

standards will be compromised. The president seemed to think that his new shell 

game will arrest the decline in house prices, 

and we won’t be faced holding a lot of bad 

mortgages. I hope he’s right, but I wouldn’t 

count on it: it’s not what most housing experts say. The president’s economic credentials are hardly stellar. Our national debt 

has already climbed from $5.7 trillion to over 

$9 trillion in eight years, and the deficits for 

2008 and 2009—not including the bailouts— 

are expected to reach new heights. There is 

no such thing as a free war—and no such 

thing as a free bailout. The bill will be paid, 

in one way or another. 

Perhaps by the time this article is published, the administration and Congress will 

have reached an agreement. No politician 

wants to be accused of being responsible for 

the next Great Depression by blocking key 

legislation. By all accounts, the compromise 

will be far better than the bill originally proposed by Paulson but still far short of what 

I have outlined should be done. No one expects them to address the underlying causes 

of the problem: the spirit of excessive deregulation that the Bush Administration so 

promoted. Almost surely, there will be plenty of work to be done by the next president 

and the next Congress. It would be better if 

we got it right the first time, but that is expecting too much of this president and his 

administration. 

Ms. JACKSON-LEE of Texas. Madam 

Speaker, I would like to thank the chairman of 

financial services BARNEY FRANK for bringing 

this important piece of legislation to the floor. 

I also rise with a sense of the solemnity of this 

moment. However, I rise today with the confidence that our system of government is 

strong and the constitutional protections of the 

full faith and credit of our government must 

protect Main Street America while we reform 

America’s Wall Street. 

The first three articles of the United States 

Constitution address the three branches of 

government and their enumerated powers. 

These articles govern the legislature, the executive, and the judicial branches. Because 

there is no specific grant of constitutional authority for the actions that will be taking place 

here today, we the members of Congress 

need to exercise oversight over the powers 

and actions of the executive. Should the executive or its agencies exceed the powers granted to it in the Constitution, the judicial can review the determinations made by the executive and the legislative branches. These concepts are fundamental to our Constitution and 

our system of constitutional checks and balances. These checks and balances were established by the Founding Fathers to reign in 

the unbridled power of the executive. 

Today we are engaged in a fundamental exercise of the constitutional powers extended to 

the Congress. Today’s vote is critically important. 

Several questions come to mind when I 

consider the present financial crisis: 

Where was the FDIC? 

Where was the SEC? 

Where was the Federal Reserve? 

I have worked with leadership to offer consistent amendments, not once but twice unsuccessfully, that would have strengthened the 

enforcement measures over the past week to 

change the Administration’s proposal to make 

it more encompassing, effective, and better for 

the American people. While the present legislation is impressive, it is also impressive regarding what needs clarification in the present 

legislation. For example, the legislation needs 

clarification on its bankruptcy restructuring; enforcement; and judicial review. These are all 

issues that I have been very concerned about. 

Because I am concerned and desire that the 

maximum number of Americans get relief from 

this bill, I offered amendments yesterday. To 

ensure that this bill provides relief for Americans, I offered the following amendments: 

First, many are concerned about the dollar 

amount that will be set aside for those individuals facing mortgage foreclosure. Therefore, I 

asked that language be inserted into the bill 

so that $10 billion be utilized for the Secretary 

of the Treasury to restructure mortgages. 

Second, as Senator BARACK OBAMA has recently stated, he is committed to altering the 

Bankruptcy Code in the future to assist homeowners on the question of restructuring their 

mortgages. Therefore, I believe that there 

should have been Sense of Congress language that the Congress should review and 

amend the Bankruptcy Code to permit bankruptcy judges to address the question of individual home mortgage restructuring. This 

would have sent a clear message that Congress is interested in helping Americans pay 

off their debt despite its not changing the 

Bankruptcy Code at this time. 

Third, there needs to be greater enforcement. In the section on judicial review (section 

119), there should have been language that 

specifically states that ‘‘the courts should be 

able to exercise their discretion to grant injunctive and/or equitable relief if the court determines that such relief would not destabilize 

financial markets.’’ 

Fourth, the legislation should have created a 

new, independent commission to exercise 

oversight over what happened and the commission should regularly provide reports to 

Congress. This Commission would be backward looking. 

Fifth, the legislation should have been narrowly crafted so that corporate executives who 

may be convicted of criminal malfeasance in 

the financial sector might be barred from conducting financial business with the government 

for a period of seven (7) years. 

Sixth, the legislation should have permanently lifted the present insurance cap of 

$100,000 that the FDIC has established to insure funds stored in FDIC-backed banking institutions to $250,000. I believe that this has 

already been included in the Senate bill; but, 

my amendment would have made the change 

permanent. 

Eighth, in section 109, which addresses 

‘‘foreclosure mitigation efforts,’’ the language 

should be changed from ‘‘shall encourage’’ to 

‘‘shall require’’ to provide stronger relief for 

Americans. 

Specifically, current section 109(a) states in 

pertinent part that ‘‘the Secretary shall implement a plan that seeks to maximize assistance for homeowners and use the authority of 

the Secretary to encourage the servicers of 

the underlying mortgages . . . to minimize 

foreclosures.’’ I believe if the true intent is to 

bailout ‘‘Main Street,’’ the Secretary should be 

‘‘required’’ to minimize foreclosures. 

Can you clarify how this legislation has any 

enforcement? I understand that H.R. 1424 establishes a Financial Stability Oversight Board 

in section 104; Oversight and Audits in section 

116; and a Congressional Oversight Panel in 

section 125. However, none of these sections 

appear to provide penalties or sanctions for 

non-compliance. 

I intend to have the following questions answered: 

Ms. JACKSON-LEE of Texas. Can you explain why the bankruptcy provisions were 

removed from the bill? 

Ms. JACKSON-LEE of Texas. Without 

bankruptcy I offered an amendment that $10 

billion dollars should be set aside so that the 

Department of Treasury could use those 

funds to address the question of individuals 

facing home mortgage foreclosure. I considered it important to set aside money because 

I wanted to ensure that Main Street received 

something from this bailout and not just 

Wall Street. Can you explain what provisions 


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in the bill would ensure that the monies are 

spent on persons in mortgage foreclosure? 

Ms. JACKSON-LEE of Texas. Can we add 

report language indicating to the Secretary 

how monies are to be used when it comes to 

Americans in mortgage foreclosure and can 

we add language that the Secretary should 

attempt to restructure the mortgages of 

homeowners that are in mortgage foreclosure? 

Ms. JACKSON-LEE of Texas. The Administration has labeled the current economic situation as a crisis that requires emergency 

measures. Because these are ‘‘exigent’’ circumstances that are in need of correction, 

what in the bill prevents the Secretary from 

using all the $350 billion by January 2009? 

Ms. JACKSON-LEE of Texas. Above all, 

my concern is to ensure that the American 

people receive the relief that they deserve. If 

the American people are facing mortgage 

foreclosure, it is my desire that monies be 

provided to them so that they can continue 

to stay in their home and pay their mortgages and their bills. Everyone deserves the 

economic dream of owning their own home. 

But the financial institutions were dilatory 

in their responsibility to assess the borrower’s ability to pay for loans and purchase 

a home. It was the squandering of this responsibility and preoccupation with greed 

and avarice that has led us to where we are 

today. 

There are substantial improvements in the 

present version of the bill compared to the 

Bush administration proposal. However, the 

bill as it is presently written, in my view 

needs some clarification as to how it provides the necessary relief to middle-class 

America. Frankly, the bill provides no panacea to our present economic woes. Our markets will have the full faith and credit of the 

United States. 

There are provisions now that address accountability measures by requiring a plan to 

ensure the taxpayer is repaid in full, and requiring Congressional review after the first 

$350 billion for future payments. 

Principally, there are three phases of a financial rescue with strong taxpayer protections: reinvest, reimburse, and reform. One 

of the phases is to re-invest in the troubled 

financial markets to stabilize the markets. 

Another, reimburses the taxpayer and requires a plan to guarantee that they will be 

repaid in full. The last is to reform how business is done on Wall Street. The current legislation provides for fewer golden parachutes 

and, to its credit, provides sweeping Congressional oversight. 

There are critical improvements to the rescue plan that yield greater protection to the 

American taxpayers and even to Main 

Street. However, with a ‘‘pause’’ we can help 

the financial markets and make America secure. I still have concern that there is 

enough in the bill to help Americans struggling with their mortgages. Is there some 

bright hope you can share with me to relieve 

me of my anxiety? 

Ms. JACKSON-LEE of Texas. Chairman 

Frank, on many occasions, you have reiterated the concern of the American people, 

which we both share, the wish that this legislation had stronger and more comprehensive relief for home owners facing foreclosures. Please elaborate on your interest, 

willingness, and commitment for us to work 

together to introduce and pass stronger and 

more comprehensive housing foreclosure legislation in the next Congress? 

Thank you, Mr. Chairman, to you and your 

staff, for your commitment to this issue. 

Ms. ESHOO. Madam Speaker, I rise today 

to express my support for H.R. 1424 the 

Emergency Economic Stabilization Act. 

Nearly two weeks ago the President presented legislation to Congress requesting a 

$700 billion recovery package, with the Treasury Secretary empowered to set the rules for 

all transactions. The bill included no safeguards, no transparency, no accountability, 

and no oversight. This plan was wrong for the 

American people and we rejected it. 

The House, through bipartisan negotiations, 

completely reshaped the bill to include three 

crucial elements to rebuild our financial system. One, we reinvested in troubled financial 

markets to stabilize our economy and insulate 

Main Street from Wall Street. Two, we guaranteed that the taxpayer will be first in line to be 

reimbursed through ownership shares and 

asset recovery as the plan begins to work. Finally, the bill reformed how business is done 

on Wall Street including the prohibition of 

golden parachutes. 

While I voted for the bill, it failed to gather 

the necessary votes for it to pass. Following 

the vote I returned home this week and saw, 

not only in my District, but all over the country, 

the negative effects of our continued inaction. 

Already, our commercial and consumer credit 

markets are drying up and if we continue to do 

nothing, the ability for my constituents to obtain home mortgages, car loans, student 

loans, loans for small businesses, or even 

credit cards will become highly difficult or impossible. Even more financial institutions and 

businesses could fail and millions could lose 

their pensions and retirement savings, thousands of jobs could be lost, and large parts of 

our economy could cease to function. The repercussions would be far greater than the cost 

of a financial rescue program. 

Not only have small businesses and families 

felt the effect of the credit crunch, my home 

state of California is feeling it. According to 

our State Treasurer, Bill Lockyer, this current 

crisis threatens to deplete California’s cash reserves. Without those reserves the state will 

be unable to pay teachers, first responders, or 

nursing care workers. Additionally, he thinks 

without action the state, ‘‘. . . will be unable 

to sell voter-approved bonds for highway construction, schools, and housing or water 

projects.’’ If we don’t pass this bill the effects 

will almost immediately be felt throughout the 

country and the world. 

H.R. 1424 includes strong independent 

oversight and transparency through an establishment of an independent bipartisan board to 

provide oversight, review and accountability of 

taxpayer funds. The Government Accountability Office will have a presence at Treasury 

to oversee the program and conduct audits to 

ensure strong internal controls, and to prevent 

waste, fraud, and abuse. There will be an 

independent Inspector General to monitor the 

Treasury Secretary’s decisions in regard to 

this program and all transactions will be posted online for the public to review. 

Rather than giving the Treasury all the 

funds at once, the legislation gives the Treasury $250 billion immediately, then requires the 

President to certify that additional funds are 

needed ($100 billion, then $350 billion, subject 

to Congressional disapproval) and there are 

limits on golden parachutes for executives 

whose companies participate in the program. 

We will help homeowners by allowing the government to change the terms of mortgages to 

help reduce the 2 million projected foreclosures in the next year. It will also assist 

school districts, cities and counties who held 

investments in failed institutions. 

The bill temporarily raises the FDIC insurance cap to $250,000 from $100,000. It also 

includes three additional pieces of legislation 

that are critical to the health of our economy 

and our constituents. This legislation will extend tax credits and incentives that are important to encourage innovation and entrepreneurship. It extends tax benefits to the renewable energy industry. Solar and wind energy, 

fuel cells, and biofuels are but a few of the 

technologies that will benefit from the legislation that we are considering today, and they 

will all play a role in our nation’s energy future. 

While I remain committed to totally eliminating 

the Alternative Minimum Tax, this bill includes 

a ‘‘one-year fix’’ that will prevent an additional 

25 million American taxpayers from being subject to the AMT on their 2008 tax returns and 

it will reduce or eliminate the AMT obligation 

for 121,033 tax filers in my Congressional District. Finally, the legislation includes the Paul 

Wellstone and Pete Domenici Mental Health 

Parity and Addiction Equity Act, which will provide for equity in the coverage of mental 

health and substance use disorders when 

compared to medical and surgical disorders. 

The vote I took earlier this week was as 

tough as any I’ve ever taken during my time 

in Congress and today’s vote will not be any 

easier. I will vote ‘‘yes’’ because I believe it’s 

the right thing do for our country. 

I believe doing nothing is a higher risk to 

our country and would hurt millions of Americans across the nation. I didn’t come to Congress to hurt people. My ‘‘yes’’ vote is to help 

restore confidence in our economy, help move 

the country move forward, protect taxpayers, 

help Main Street, protect pensions, protect 

401Ks, and restore our credit markets and, 

with no rewards for those whose greed and 

foolishness have so jeopardized our economy. 

Mr. CHABOT. Madam Speaker, I rise in opposition to the bill we are considering today. 

This week marks a critical point in our Nation’s history for a number of reasons, but 

none more important than redefining the appropriate role for government in our market 

system. 

There is no doubt that we must stabilize our 

financial markets as quickly as possible. But, 

in my view, asking cash-strapped Americans 

to pay more than $700 billion to bail out an industry, some of whom were reckless, is just 

wrong and sets a dangerous precedent. 

We need a targeted approach to respond to 

this crisis. One that provides those troubled institutions with the capital they need to start 

lending again. Yet, we also need standards in 

place to hold these institutions accountable to 

prevent this crisis from repeating itself in the 

future. 

H.R. 1424 sets government on a new and 

dangerous course. Gone are the days of personal responsibility. Gone are the days where 

executives are held responsible for bad decisions. Gone are the days when the market determines success or failure. After today, taxpayers will be responsible for everyone’s decision. 

Equally disturbing, in my view, is the fact 

that this legislation makes no substantive reforms to prevent a repeat of what caused this 

financial meltdown in the first place. Last fall, 

the House passed, with my full support, H.R. 

3915, the Mortgage Reform and Anti-Predatory Lending Act. This would have been an important step towards bringing more restraint 

and oversight to the lending industry. Unfortunately the Senate took no action so it never 

became law. Are those important reforms in 

this bill? No. 


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We have a duty to the hardworking families 

who act responsibly on a daily basis to be prudent with their tax dollars. I remain unconvinced that the bill we are considering today 

fulfills this obligation. That’s why I’ll be voting 

no. 

Mr. STARK. Madam Speaker, I will be voting no on this bill. I recently read in the press 

that 8 out of 10 of my colleagues know nothing about economics or banking. This bill 

shows that account is quite right. 

This bill does nothing but bail out Wall 

Street and large corporate America. It spends 

$800 billion that taxpayers will end up having 

to pay for and it does nothing for middle-income Americans. 

Is there a crisis in this country? Yes there 

is. But this is not the solution for those people 

who have been working and trying to pay their 

bills. 

There is not a crisis facing your average 

community bank which has no problem in liquidity. There is not a crisis for your credit 

cards—endangering their ability to work. 

This rushed bailout package is nothing more 

than President Bush’s Treasury Secretary 

Paulson’s way to scare us as Colin Powell 

tried to scare us some years ago by saying if 

we didn’t vote for an ill-conceived war, we’d 

see terrorists on the street. 

You’re getting the same kind of misinformation now—the same kind of rush to judgment—to tell you that a crisis will occur. It 

won’t. Vote no, and let’s come back and help 

work on a bill that will help all Americans. 

Mr. MOORE of Kansas. Madam Speaker, I 

rise today in support of taking action to help 

community banks, which are an important part 

of our financial landscape, in Kansas and 

across the country. 

One of the lessons learned from the current 

financial crisis is that financial institutions that 

rely on core deposits are in the best position 

to weather a financial storm. One thing banking regulators can do to help banks attract and 

retain more core deposits is to recognize that 

certain deposits that may technically be considered as ‘‘brokered’’ nevertheless function 

like core deposits. 

This situation occurs, for instance, when insured depository institutions exchange funds, 

dollar-for-dollar, with members of a group of 

insured depository institutions, where each 

member of the group sets the interest rate to 

be paid on the entire amount of funds it places 

with other group members. Such an arrangement enables a member of the group to offer 

its customers a convenient means to obtain 

access to FDIC insurance on large deposits 

by working solely with the bank with whom the 

customer has a relationship. As a result, the 

bank is able to accept the large deposits without having to post collateral, which in turn 

makes more funds available to meet the credit 

needs of the bank’s community. 

Regulators could take several constructive 

steps within the current law governing brokered deposits. First, the FDIC could permit 

banks that become adequately capitalized 

(and therefore need a waiver from the FDIC to 

accept brokered deposits) to continue accepting funding through the arrangement described above while a waiver request is pending. Second, the FDIC could recognize that 

such finding is stable and should be permitted 

as a general matter when the FDIC reviews a 

waiver request. Third, it would be appropriate 

for the FDIC to exclude such funding from the 

category of ‘‘brokered deposits’’ if the FDIC 

elects to charge a bank a higher insurance 

premium due a heavy reliance on brokered 

deposits. 

If the FDIC were to take these steps, 

banks—and, in particular, community banks— 

would be in a better position to attract and retain large deposits, thereby providing additional liquidity that the banks can use to make 

loans that are so vitally needed by our Nation’s communities. 

Mr. EVERETT. Madam Speaker, in the 

years since I was first sworn in to office in 

1993, our Nation has faced a number of major 

challenges that required tough and courageous decisions. I have always believed public 

service to be the noblest of calling. I still believe in the concept of ‘‘citizen statesmen’’ as 

envisioned by our Founding Fathers who recognized that private citizens motivated to 

serve in Congress were vital to the future of 

our Nation. I came to Washington not as a 

politician, but as a businessman ready to 

make tough votes for the good of the country. 

I believe my final vote to pass the Emergency 

Economic Stabilization Act is such a vote. 

The impact of nearly a decade of granting 

home loans that were doomed to fail has 

reached a crisis point in our economy. The 

combined weight of hundred of billions of dollars in low value mortgages has created an 

economic aneurysm that is beginning to burst 

and usher in the collapse of our financial markets and take with it many American jobs. The 

national media have repeatedly spun this dilemma as one that solely afflicts ‘‘Wall Street.’’ 

This is simply not accurate. 

Many Americans believe this is a cry of 

Chicken Little and that it is not their problem, 

and we should let the markets fail and let the 

consequences fall as they may. However, if 

we allow our markets to fail—no one will be 

insulated from the impact. Our whole economy 

is underpinned by the availability of credit. 

Without access to credit, banks fail, businesses are forced to layoff workers or close 

altogether, and even people with good credit 

cannot get loans for cars, college, new homes, 

or other essential needs. We are already seeing that universities are having trouble accessing their funds, municipalities are experiencing 

losses in property taxes since mortgage banks 

can not pay on foreclosed homes, and lack of 

availability of bonds for infrastructure and 

other local needs. Soon our farmers will be 

getting ready to start planning for next year’s 

crop—and there is fear they will not have access to the credit necessary to plant next 

year’s crop. We have already seen food prices 

increase over the last few years, and that pain 

will have been nothing if farmers do not have 

the necessary credit. 

As a conservative Republican, I believe in a 

free market and less government intervention. 

However, these are extraordinary circumstances that will impact all of us. Many 

Americans might not have felt the effects directly yet and hopefully they will not because 

of the action being taken today. This legislation includes safeguards to protect taxpayers, 

not making the total amount of funds available 

at once, ensuring that there are no golden 

parachutes, and holding executives accountable. 

I cannot leave office taking any position that 

is counter to the best interest of our Nation. I 

would have preferred to not have the Federal 

Government intervention, but failure to act to 

shore up our economy would allow far greater 

damage to millions of average Americans and 

hundreds of thousands of Alabamians. I have 

been honored to serve the Second District 

these 16 years and would never have thought 

one of my last votes in Congress would have 

been on this type of legislation. Very few 

things are easy in politics, and I have thought 

long and hard on this difficult issue, and I believe that voting in favor of the Emergency 

Economic Stabilization Act is the necessary 

thing to do. 

Mr. SHUSTER. Madam Speaker, this is one 

of the most difficult and complex issues I have 

had to deal with in my 8 years in Congress. 

I am proud of my no vote on Monday against 

the original rescue plan. My no vote enabled 

me to push this legislation forward towards an 

improved and positive bill. This is a different 

bill. It is an improved bill. 

I have pushed as far as I can and we are 

at the point where the only two directions we 

can go from here are backwards or nothing. 

Neither is an option. 

I share the anger of my constituents that we 

have been forced into this economic crisis by 

Wall Street greed and irresponsible lending by 

Freddie Mac and Fannie Mae. But we cannot 

let our anger cloud our judgment. 

Over the past 5 days, I have been hearing 

from more and more of my constituents who 

are beginning to feel the pain of the economic 

crisis we are entering. I am convinced that my 

constituents will feel that pain grow if we do 

not act, and that pain will be felt in job losses. 

Therefore, I have decided to support this 

economic recovery effort. Make no mistake, 

this bill is a far better deal for American taxpayers than what was originally brought to the 

House floor. My colleagues and I fought hard 

to include additional taxpayer and market driven protections that will restore trust in our 

banks, including raising the FDIC insurance 

limit to protect my constituents’ bank accounts. 

My vote is the right decision for my constituents and America, not for political popularity. 

Mr. FEENEY. Madam Speaker, I would like 

to quote Financial Services Chairman BARNEY

FRANK, author of this bailout bill, ‘‘The free 

market failed, it’s up to government to fix the 

problem.’’ 

It is important that we understand the how 

we got here in order to address a solution to 

the problem. Who and what caused the 

subprime bubbles and the current economic 

crisis? 

Treasury Secretary Alan Greenspan in 2005 

said: 

If Fannie Mae and Freddie Mac ‘‘continue 

to grow . . . they potentially create evergrowing potential systemic risk down the 

road . . . we are placing the total financial 

system of the future at substantial risk.’’ 

During a Financial Services Committee legislative markup on May 24, 2005, the 

Hensarling/Feeney Amendment was offered to 

protect taxpayers from crushing bailouts of 

Fannie Mae and Freddie Mac. 

The Hensarling/Feeney Amendment established a new regulator to: 

(1) repeal the Congressional charters of 

Fannie Mae and Freddie Mac 

(2) create a bank-like secondary mortgage 

market, and 

(3) establish new charters for limited purpose mortgage securitization entities that 

could be auctioned off competitively. 

I voted YES but the Democrats unanimously 

voted NO and killed reform and taxpayer protection. 


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Why? 

Leading Democrat BARNEY FRANK said in 

2003: 

These two entities—Fannie Mae and 

Freddie Mac—are not facing any kind of financial crisis. 

The more people exaggerate these problems, the more pressure there is on these 

companies, the less we will see in terms of 

affordable housing.’’ 

After billions in accounting scandals at both 

Fannie Mac and Freddie Mac, BARNEY FRANK

said in 2004: 

I don’t see anything in your report that 

raises safety and soundness problems. 

I have seen nothing in here that suggests 

the safety and soundness are an issue. And, I 

think it serves us badly to raise safety and 

soundness as kind of a general [inaudible] 

when it does not seem to be an issue. 

Democratic leader MAXINE WATERS said: 

Through nearly a dozen hearings that we 

were, frankly, trying to fix something that 

wasn’t broke. Mr. Chairman we do not have 

a crisis at Freddie Mac, and in particular 

Fannie Mae under the outstanding leadership of Mr. Frank Rains. 

I also voted in 2005 to cut off a $2 billion 

line of credit from U.S. taxpayers to Fannie 

Mae and Freddie Mac. 

Today, the same people who protected the 

corrupt and out-of-control Fannie Mae and 

Freddie Mac are proposing a $700 billion bailout of Wall Street speculators. 

BARNEY FRANK and other Democratic leaders revised the Community Reinvestment Act 

in 1995, forcing Fannie Mae and Freddie Mac, 

and all American lenders to make risky loans 

to people in poor communities. Loans were 

given regardless of the borrower’s ability to 

pay! 

And, ACORN, a corrupt left wing ‘‘community group’’ engaged in extensive voter registration fraud across this country, was given 

taxpayer money to extort banks and lenders 

into making more bad loans. 

Taxpayer money was used to browbeat 

lenders to make non-creditworthy loans. 

Since the economic credit crisis began, we 

were told by Secretary Paulson and BARNEY

FRANK that: 

1. The $152 billion ‘‘stimulus’’ package 

would resolve the American economic problem. (I predicted it is a silly ‘‘rain dance,’’ having no long term stimulus) 

2. The Bear Stearns taxpayer bailout would 

resolve the credit crisis. 

3. The Fannie/Freddie bailout in July would 

totally resolve the financial crisis and the U.S. 

Treasury would not have to take over Fannie 

Mae and Freddie Mac. (I voted no and predict 

bigger problems for America) 

4. The federal government takeover of AIG, 

the largest insurer in America, would end this 

global crisis. 

The current $700 billion bailout, touted by 

Treasury Secretary Paulson and Chairman 

BARNEY FRANK, fixes none of the fundamental 

structural problems the federal government is 

responsible for. 

Buying troubled assets on Wall Street balance sheets does NOT stimulate American 

banks on Main Street in Central Florida to increase lending and credit. 

It adds short term money, which banks will 

HOARD, as they are required to increase reserves and make fewer loans to healthy consumers and businesses. 

It does NOT privatize Fannie Mae and 

Freddie Mac. 

It does not repeal the community Reinvestment Act. 

It creates a huge new bureaucracy which 

may control lending in America and become 

the largest leap toward socialism in my lifetime. 

What we must do (now or later) to save 

American freedom and our economy. 

1. Stop naked short selling of bank stocks— 

Predatory investors, including foreigners, sell 

stocks they don’t own to drive down the price 

of the stock, which they can later buy cheaper 

and profit. 

This kills bank equity and forces banks to 

stop making loans in order to meet material 

reserve requirements. 

2. Guarantee bank deposits in excess of 

$100,000 and bank creditors—This will bolster 

bank share prices and lead to more immediate 

lending to families and small businesses. 

3. Issue guaranteed network certificates in 

exchange for bank promissory notes—This will 

get banks to save lending restrictions and give 

them time to work through the real estate 

mess. 

4. End ‘‘mark to market’’ accounting rules— 

Banks and institutions that hold packages of 

securitized mortgages cannot sell those packages because in this environment there are 

NO buyers. But those mortgages are secured 

by real estate worth some value, even if it is 

not 100 percent of the loan value. 

These mortgages are not worth zero, just 

because there is no market to buy them during this crisis. Banks have to count such mortgage holdings as ZERO asset reserves. Every 

dollar a bank counts as reserves would result 

in $10 in lending ability today. 

Mark these assets at ‘‘fair market value.’’ 

5. Jump start private purchase of mortgage 

securities—Don’t buy $700 billion in troubled 

mortgage securities with taxpayer money. 

have an auction for private investors using private money to make such purchasers. To start 

buyer activity, grant buyers a zero percent 

capital gains tax—not the 28 percent tax Senator OBAMA proposes, but 0 percent. 

Most mortgages will be purchased without 

any taxpayer exposure. 

6. Establish a privately funded insurance 

model for mortgage backed securities—Holders of these securities would pay risk-based 

premiums to fully fund a guarantee of asset 

values, without taxpayer exposure. 

7. Unleash the American Economy—Immediately pass comprehensive energy policy that 

will put hundreds of billions of dollars into the 

American economy overnight. 

Congress should pass free trade legislation 

including agreements with Columbia, Panama, 

and South Korea to help American exporters. 

Without delay, Congress should kill the builtin Democrat tax increases which are scheduled to raise taxes on Florida families by 

$3,040 a year. 

Finally, the Paulson/Frank bailout bill raises 

the Federal Government’s debt to $11.3 trillion—a 26 percent increase. In the less than 

two years Democrats have controlled Congress, the national debt has jumped over 

$8,000 for every man, woman, and child in 

America. Can we afford two more years of 

that behavior? 

Mr. LANGEVIN. Madam Speaker, we are 

meeting today to again consider the Emergency Economic Stabilization Act—a critical 

piece of legislation, but one that none of us 

look forward to voting on. During this difficult 

economic crisis, I am proud of this Congress 

for coming together at a crucial moment to 

reach a bipartisan compromise to rescue not 

only our financial markets but our entire economy. However, no one is celebrating today 

about the tough decisions that had to be 

made. 

Over the last two weeks hundreds of Rhode 

Islanders have contacted my office expressing 

serious concerns about the proposal and a 

firm belief that the taxpayers’ needs must be 

a priority. I share their anger and frustration 

that for far too long, many on Wall Street were 

given carte blanche to make increasingly risky 

investments—investments which, in some 

cases, the firms themselves didn’t even fully 

understand. There is plenty of blame to go 

around, from Wall Street and mortgage lenders to government regulators and Congress. 

Unfortunately, the actions of these firms do 

not take place in a bubble: they are inextricably linked to the every day transactions of 

every day American families. Our economy is 

in dire shape and drastic action is needed. If 

we do not act now, a domino effect could easily trigger major job losses and a significant 

period of economic downturn with negative 

consequences not just on Wall Street, but on 

every street in our country. 

This crisis originated with faulty lending 

practices and the creation of subprime mortgages made to people who often could not afford to pay them back. These subprime mortgages were then pooled together into packages that were transformed into highly-rated 

securities purchased around the world. The 

eventual collapse of the subprime mortgage 

market infected the prime mortgage market, 

which in turn poisoned the entire financial system. In response, Treasury Secretary Hank 

Paulson proposed a plan under which the 

Federal Government would buy—at a deep 

discount—so-called ‘‘toxic’’ assets, which currently no one is willing to buy. These assets 

include home mortgages which have been 

bundled into such complex packages that 

there is great uncertainty about their underlying value. Secretary Paulson considers these 

purchases to be investments by the federal 

government, which could return a substantial 

proportion of their value to American taxpayers once the market has settle down. 

I recognize the urgency of the situation and 

understand that Secretary Paulson and all responsible government leaders are trying to 

ward off even worse outcomes. This year, we 

have seen the fall of some of the largest investment banks in the world—Bear Stearns, 

Lehman Brothers, and Merrill Lynch—and the 

last two standing—Morgan Stanley and Goldman Sachs—last week chose to be switched 

over to commercial banks, seeking greater 

protection at the price of greater regulation. 

Meanwhile, the federal government loaned 

$85 billion to American International Group, 

Inc., AIG, the 18th largest company in the 

world, when it was unable to access credit for 

its daily operations. On September 26, we 

also saw the biggest bank failure in our country’s history when Washington Mutual collapsed. One week later, Wachovia had been 

bought out by another bank. Even Bank of 

America recently decided it would no longer 

extend new lines of credit to McDonald’s 

franchisees, which have been turning a profit 

for years and run a clean balance sheet. 

When the credit market seizes up at the 

highest levels, it is not just a problem for Wall 


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H10802 CONGRESSIONAL RECORD — HOUSE October 3, 2008 

Street. It quickly impacts all of us, making it 

harder for average families to secure car 

loans, home loans or mortgage refinancing. It 

means that small business owners can’t access the quick capital they need to make payroll or invest in their companies. It impacts the 

student loan market, where more than 50 

firms have abandoned or cut back their student loan programs. And it threatens the pensions and savings that our retirees are counting on. While no one wanted to be in this position, I do believe that passing this rescue plan 

is essential for Rhode Island families. 

However, I have been vocal about my own 

concerns with the Administration’s original proposal, and early on I outlined priorities that 

must be included in any bill I would be able to 

support. I am pleased that the legislation before us today is a vast improvement over the 

initial plan Secretary Paulson presented, and it 

contains significant protections for families 

across the country who had nothing to do with 

creating this crisis but are feeling its effects in 

many ways. First, this bill protects taxpayers 

by requiring strong Congressional oversight 

over expenditures under the plan; giving taxpayers a share of profits in participating companies; and requiring a President to ensure 

taxpayers are repaid in full, with Wall Street 

making up any difference. Furthermore, we 

have endured that CEOs do not benefit from 

risky behavior by severely limiting executive 

compensation and ‘‘golden parachute’’ packages for any firms that take advantage of the 

government assistance. Finally, the bill requires the government to implement a plan to 

reduce foreclosures as it buys troubled financial assets like mortgage backed securities. 

At its core, H.R. 1424 authorizes $700 billion for the Treasury Department to buy distressed mortgage-backed securities, expiring 

on December 31, 2009. Of that total, $250 billion would be for immediate release, with another $100 billion upon a presidential certification of need. The final $350 billion could be 

made available if the president transmits a 

written report to Congress requesting the 

funds, and Congress would have the right to 

disapprove this last installment. Spending authority would be overseen by a new Financial 

Stability Oversight Board, which will review the 

Treasury Department’s actions and its effects 

on the financial markets and the housing market, and by a special inspector general office 

to conduct and supervise audits and investigations of the actions taken under this bill. 

Treasury must also report to Congress 60 

days after it begins using this authority, and 

every 30 days thereafter. 

Furthermore, H.R. 1424 establishes a joint 

congressional oversight panel to review the 

current state of the financial markets and the 

regulatory system. This panel will submit a report on the current regulatory system and its 

effectiveness at overseeing the participants in 

the financial system and protecting consumers. This provision is critical, since going 

forward, we must ensure that our financial 

sector is no longer allowed to put ordinary 

Americans in danger by pursuing high-risk behavior with little to no oversight. We must investigate companies that took advantage of lenient regulation or possibly acted outside of 

federal regulations entirely. And we must learn 

from our mistakes, establishing new regulations and ensuring the laws already on the 

books are enforced. 

Madam Speaker, in just the four days since 

the House defeated the original economic recovery bill, we have already seen clear signs 

of what awaits our country if we do not take 

action today. Within hours after that first vote, 

the Dow Jones Industrial Average lost nearly 

800 points, its biggest point drop in history. 

The markets have remained shaky, threatening the financial holdings and retirement 

savings of millions of American families. 

Meanwhile, anxiety continues to rise in industries across the country, from agriculture to 

manufacturing. Countless businesses, small 

and large, are having trouble securing credit 

for everyday operations and they are terrified 

of what the future might hold. Car loans are 

becoming more expensive, mortgages more 

difficult to obtain. And on Monday, Wachovia 

limited the access of nearly 1,000 colleges 

and universities to their own funds invested 

with the bank. 

These are troubling warning signals of the 

potential for real economic catastrophe if we 

do not come together as a Congress and 

show the real leadership on difficult issues 

that our constituents expect. This is not an 

easy vote for any of us, but I am convinced 

that it is the right one. I know it is not a perfect 

bill, but rarely is there a perfect solution to 

such a complex and troubling set of problems. 

I believe the revised measure before us today 

is somewhat improved over the original 

version, largely due to the inclusion of an increase in FDIC coverage for bank accounts 

from $100,000 to $250,000. Unfortunately, I 

am disappointed that the tax extenders legislation—which I was happy to support when its 

costs were fully paid for—has been added to 

this bill without sufficient offsets. Nonetheless, 

I will again cast a vote in favor of this package 

because it is too important to fail again. 

Madam Speaker, let me close by assuring 

my colleagues and my constituents that if I 

thought the bill before us today was nothing 

more than a hand-out to high-flying Wall 

Street investors who suddenly found themselves in trouble and decided they didn’t like 

losing money, I would be the first in line to 

cast a no vote. Unfortunately, this problem is 

much bigger and much less selective about 

whom it might hurt. We need to take action, 

and we need to do it now. This legislation represents a good, bipartisan solution to a situation none of us wanted to find ourselves in. I 

want to thank speaker PELOSI, Chairman 

FRANK and many other colleagues for their 

tireless work on this bill. I encourage all my 

colleagues to vote for this bill. 

Ms. RICHARDSON. Madam Speaker, I rise 

in support of H.R. 1424. I want to commend 

Chairman BARNEY FRANK of the Financial 

Services Committee for his hard work, leadership, insight, and guidance throughout this 

process. 

The Congress and Senate did not come to 

the decision of supporting this legislation lightly. All of my colleagues on both sides of the 

aisle participated in numerous Caucus meetings and conference calls with Secretary 

Paulson, and Federal Reserve Chairman 

Bernanke. We took into consideration the 

views of renowned economists, and we considered numerous legislative proposals. After 

much deliberation we came to the conclusion 

that this legislation was the best bipartisan effort to contain strict oversight to prevent repeating this crisis, limit executive compensation, initiate provisions for mortgage stabilization, and ensure protections that taxpayers deserve. 

This legislation is a rescue plan. Main Street 

is hurting because small businesses do not 

have access to credit, which they depend on 

to cover the cost of their daily operations, including payroll. Likewise parents and students 

cannot get student loans, so it is clear that the 

financial crisis is hitting every street corner in 

America. 

Perhaps what has been lost in this debate 

is the effect that this crisis has had on our municipalities and local governments. Many of 

these municipalities and local governments 

had their investments tied to these Wall Street 

institutions. In California public entities have at 

least $300 million at stake; in fact San Mateo 

has lost $150 million. If our local governments 

fail, they will not be able to provide the most 

basic services (i.e.—police & fire services, 

trash collection, and education). 

I recognize that this is a difficult decision for 

many of my colleagues. Historians have said 

these are dire times only second to the Great 

Depression. I urge my colleagues to act now, 

and support this critical piece of legislation 

that will stabilize our residential neighborhoods, small businesses across this country 

and our economy. 

Mr. COSTELLO. Madam Speaker, four days 

ago I voted against the historic $700 billion 

bailout legislation proposed by President Bush 

and Treasury Secretary Paulson. It seemed 

clear to me that the message sent by that 

bill’s defeat was that we needed to slow and 

consider other alternatives to deal with the 

problems facing our economy. Numerous professional economists and other experts, including William Isaac, former head of the Federal Deposit Insurance Corporation, FDIC, 

have said that we could provide the confidence the credit markets need in other, less 

expensive ways. 

Unfortunagtely, that message fell on deaf 

ears. The Senate leadership took the Bush/ 

Paulson proposal and added $100 billion in 

tax breaks and other so-called incentives. 

While I do support expanding FDIC insurance 

limits to $250,000, I do not see how making a 

$700 billion bill an $800 billion bill benefits our 

economy. What these additions cannot do is 

hide the fact that at its core, this bill is the 

same as the one the House rejected Monday, 

and I will vote against it. 

Madam Speaker, I understand that many 

Americans are uneasy about the state of our 

economy. I share their anxiety. But I am 

equally anxious about the long-term ramifications of this legislation. I think it is highly possible that this bill will make our economic 

problems worse in the long run. While we 

should take action, we should act prudently 

and with a thorough review of our options. We 

have failed to do this, and I cannot vote to expend $800 billion in taxpayer dollars without 

absolute confidence in the course being taken. 

I will again vote no. 

Mr. ETHERIDGE. Madam Speaker, I rise in 

support of H.R. 1424, the Emergency Economic Stabilization Act of 2008, as amended 

by the Senate. Today, the United States faces 

the most significant financial crisis since the 

Great Depression. Homeowners, small businesses, retirement savings plans, and community banks—American people from every walk 

of life—are put at risk by the turbulence in our 

financial sector. This bill puts us on the right 

path to recovery for our economy. 

If there was any question whether action is 

necessary, one needs to look no further than 


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the stock market reaction to Congress’ inaction on Monday. Leading up to that vote, I 

spoke with the leaders of some of North Carolina’s local and state banks and credit unions 

about the effect of this crisis on the communities they serve. While I wish that this action 

was unnecessary, the financial system’s problems call for strong steps. If lending does not 

resume, Americans will be unable to grow 

their small business, buy a car, pay for college, or buy a home. Without action, this financial crisis will threaten the entire American 

economy. 

Like the bill we voted on earlier this week, 

H.R. 1424 is a vast improvement over the 

blank check that the Bush Administration originally proposed. This bill contains key provisions, negotiated by Democratic leaders in 

Congress, to ensure this bill benefits Main 

Street. As I demanded when an economic recovery plan was first proposed, this bill protects taxpayer money, provides help for struggling homeowners, prevents Wall Street CEOs 

from gaining a windfall at taxpayer expense, 

and provides the accountability and oversight 

that have been missing. While it contains strict 

oversight provisions, the plan also contains 

the flexibility needed to address a problem of 

this magnitude. 

First and foremost, this plan protects taxpayer money. Democratic leaders made sure 

that the public will share in the benefit of the 

economic relief provided by adding provisions 

that allow taxpayers to share in profits if a financial institution we invest in grows healthy 

in the future. To ensure Main Street is not left 

with the bill for Wall Street’s problems, H.R. 

1424 calls for a plan to require financial institutions to repay any losses to the government 

in the future. I am also pleased that this bill 

now temporarily increases the amount of 

money insured by the Federal Insurance Corporation from $100,000 to $250,000 for one 

year. This provision insures taxpayers’ savings 

and boosts public confidence in our banks. Finally, H.R. 1424 looks after the taxpayers bottom line by requiring that any profit resulting 

from this plan be used to reduce the growing 

national debt. 

In order to further ensure that assistance 

benefits Main Street, the Emergency Economic Stabilization Act of 2008 will help ensure those who have been hurt by the economic downturn and predatory lending practices can remain in their homes when possible. The bill authorizes new loan guarantees 

and credit enhancement to prevent foreclosures, and requires a plan to encourage 

mortgage servicers to modify loans through 

the Federal Housing Administration’s Hope for 

Homeowners and other initiatives. 

H.R. 1424 makes sure that Wall Street executives do not profit excessively from the 

government assistance provided. It includes 

limits on executive compensation and golden 

parachutes not only for institutions that the 

government buys, but also for those holding 

loans that are supported by this bill. It holds 

executives accountable for statements they 

have made about their company’s financial 

strength, forcing those promise gains that later 

turn out to be false or inaccurate to repay the 

taxpayer. 

Congress has also increased oversight and 

transparency in this bill. Rather than providing 

$700 billion in one lump sum, H.R. 1424 authorizes an initial $250 billion so that we can 

see how the plan works. Another $100 billion 

is available with Presidential notification, and 

the remaining $350 billion requires Congressional action to be released. H.R. 1424 requires public disclosure, within two days, of 

purchases made by the Secretary, and provides a strong oversight board with authority 

over the Treasury Secretary’s actions. Additionally, H.R. 1424 establishes an independent 

Inspector General to monitor the use of the 

Secretary’s actions. Additionally, H.R. 1424 

establishes an independent Inspector General 

to monitor the use of the Secretary’s authority. 

Given the extent and range of the problems in 

our financial markets, it is critical that the 

Treasury Secretary have a variety of tools to 

address these problems. H.R. 1424 includes a 

Republican proposal that gives the Treasury 

Department the option to guarantee companies’ troubled assets, including mortgagebacked securities, purchased before March 

18, 2008, with insurance that is paid for 

through risk-based premiums paid by the financial industry. 

The Emergency Economic Stabilization Act 

of 2008 also provides tax relief for millions of 

Americans while spurring business investment 

and innovation in renewable energy. While we 

support the financial system that enables our 

families and businesses to grow, we should 

also address the tax burden they face. 

H.R. 1424 includes critical tax relief for families facing the Alternative Minimum Tax, AMT. 

The AMT was originally intended to ensure 

that the nation’s wealthiest taxpayers were not 

able to avoid paying taxes altogether. However, because the AMT is not indexed for inflation, today millions of middle income Americans who pay their taxes as required would 

see a huge tax increase. H.R. 1424 raises the 

exemption limits and protects 25 million middle-class families across the country, including 

more than 30,000 taxpayers in my district, 

from this extra tax. 

The Emergency Economic Stabilization Act 

of 2008 will benefit the families of millions of 

children by expanding the child tax credit to 

those earning $8,500 a year in 2009. This bill 

also helps families by extending the state and 

local sales tax deduction, and will help over 4 

million families better afford college by providing a tuition deduction. As a former superintendent of schools, I am pleased that this 

legislation includes a tax deduction that will 

save money for more than 3 million teachers 

when they pay for classroom supplies and expenses. The bill also includes an additional 

$400 million for Quality Zone Academy Bonds 

to help states and localities address school 

construction and renovation needs. 

This bill provides critical support in the form 

of tax breaks and incentives to the small businesses that form the backbone of our economy. This bill extends the Research and Development Tax Credit for two years to spur 

American innovation and business investment 

as well as a two year extension of the 15-year 

straight-line cost recovery for leasehold improvements and qualified restaurant improvements. 

Developing alternative energy sources and 

reducing our dependence on foreign oil is one 

the most critical challenges facing our country. 

H.R. 1424 will increase the production of renewable fuels and renewable electricity, and 

encourage greater energy efficiency. This bill 

features an eight-year extension of the investment tax credit for solar energy and a multiyear extension of the production tax credit for 

other sources of alternative energy like biomass, geothermal, hydropower, and solid 

waste. With millions of Americans struggling to 

afford rising gas prices, H.R. 1424 includes 

tax incentives for the installation of E–85 

pumps for flex-fuel vehicles, and a $3,000 tax 

credit toward the purchase of fuel-efficient, 

plug-in hybrid vehicles. There are also incentives for incorporating energy conservation in 

commercial buildings and residential structures. The energy provisions in H.R. 1424 will 

help create and preserve more than 500,000 

good-paying green collar jobs at a time when 

our economy is struggling and unemployment 

is at a five-year high. 

Finally, H.R. 1424 contains language I have 

supported to expand access to mental health 

care for all Americans. My home state of 

North Carolina was one of the first states to 

adopt a mental health parity law back in 1991, 

and last year the State Legislature expanded 

and strengthened its mental health parity provisions. I support the efforts of North Carolina’s mental health professionals in bringing 

this issue to the forefront of our State’s agenda, and I am pleased that we are following 

suit today in passing this bill. H.R. 1424 simply 

requires those insurers or group health plans 

who do chose to cover mental health to do so 

on an equal basis with other covered health 

needs. This will ensure that those in need can 

get the treatment that is medically necessary, 

without creating an undue hardship on employers or insurers. As health care consumes 

an increasing percentage of America’s income, it is critical that we provide support for 

all medical needs. 

I support H.R. 1424, Emergency Economic 

Stabilization Act of 2008 as amended by the 

Senate, and I urge my colleagues to join me 

in voting for its passage. 

Mr. DICKS. Madam Speaker, amid the 

sharp debate over the Emergency Economic 

Stabilization Bill being considered this week in 

Congress we have heard dire predictions from 

both extremes warning of a financial Armageddon if we don’t approve the bill or of squandering billions of taxpayer dollars if we do. Beyond the intense rhetoric though, there is a 

growing body of evidence of serious impacts 

in every American community this month as 

the shrinking credit market has already affected consumers’ ability to buy cars, purchase inventory for their businesses, afford 

college loans, and obtain home mortgages. 

And it’s only going to get worse until Congress takes some action that will have a direct 

effect on the credit markets and on our confidence in the integrity of the U.S. banking 

system. 

Unfortunately in the search for an appropriate remedy, I fear that ‘‘perfect’’ may have 

become the enemy of ‘‘good.’’ Warren Buffet 

put it bluntly in an interview when he was 

asked his opinion of the legislation we’re considering this week. He said ‘‘I don’t think it’s 

perfect, but I don’t know that I could draw one 

that’s perfect. I would rather be approximately 

right than precisely wrong. And it would be 

precisely wrong to turn it down.’’ 

The Gallup poll conducted this week for 

USA TODAY indicated that more than half of 

all Americans—56 percent—say their financial 

situation has already been harmed by the financial meltdown of the 2 weeks, with 20 percent of our population saying they have been 

seriously harmed. The longer term outlook is 

even more gloomy. 


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H10804 CONGRESSIONAL RECORD — HOUSE October 3, 2008 

In Washington State, the failure of one of 

our biggest banks—Washington Mutual—last 

week has been a local reminder of the gravity 

of this crisis, as was the Wachovia failure a 

few days later. Thousands of financial industry 

employees, including Washington Mutual employees in the Puget Sound area, will likely 

lose their jobs in this collapse, which has 

largely resulted from bad decisions made by 

executives that most Americans consider to be 

grossly overpaid. It’s understandable for Americans to be angry and to oppose any direct 

bailout of Wall Street. 

But a lot of the people who are being hurt 

by this crisis today are not overpaid bankers 

or stock market executives. They are working 

class families in our towns whose small businesses can’t get credit for inventory or payroll 

and people down the street who are not able 

to obtain a car loan to replace a broken down 

automobile. 

Economists remind us that auto sales are 

typically one of the first indicators of economic 

trouble. Last month, car sales dropped by 27 

percent from September 2007, the slowest 

pace of auto purchases since 1991. The chief 

economist at J.D. Power and Associates, Bob 

Schnorbus, estimates that the credit crunch 

alone is responsible for more than 40,000 

people being denied loans every month. And 

as the crisis has deepened in recent weeks, 

even people with good jobs and credit are 

having difficulty arranging auto financing. 

The financial disruption is also affecting student loans—the primary way through which 

we as a nation open the doors of higher education to middle and lower class Americans. 

The buyout of Wachovia has limited the access of nearly 1,000 colleges to $9.3 billion 

the bank has held for them in a short-term investment fund. Many of these schools are 

struggling to meet their payrolls and other 

commitments, including scholarships, as we 

start another school year. 

Over the longer term, if credit contracts further, so will the availability and affordability of 

student loans. If it closes the doors of higher 

education to American kids, this short-term financial crisis has the potential to result in a 

long-term loss of competitiveness in the global 

marketplace. 

Small businesses are also feeling the burden. As my colleagues know, small businesses account for roughly half of the nation’s 

total economic output and employ about 40 

percent of the total U.S. workforce. The chief 

economist for the Small Business Administration noted in an interview this week that these 

businesses are either being denied capital to 

grow and add jobs or they are simply afraid to 

seek capital because they are scared of the 

direction of the economy. More than anything 

else, cutting off capital to small businesses will 

be an enormous drag on the economy and job 

creation over the long term. 

The credit squeeze is already having a 

downstream impact on our economy. Consumer spending this quarter appears to be declining for the first time in 17 years. Last 

month, unemployment reached a 5-year 

high—6.1 percent—and new filings for unemployment hit the highest level since just after 

the September 11th attacks. Factory orders 

are down, and manufacturing activity has fallen to the lowest level in seven years. 

Two major employers in the rural areas in 

my district—Port Townsend Paper and Grays 

Harbor Paper—are victims of this loss of confidence. These firms, both critical to employment in their respective cities, have stated that 

they are already taking steps to protect themselves from a recession, holding off on investments and new hires as they prepare for a decline in sales. 

So with mounting evidence that the impact 

of this crisis is being felt well beyond Wall 

Street, I am supporting this bill. I am not doing 

so in order to boost the salaries of Wall Street 

executives, but so that janitors and nurses and 

secretaries and teachers and car dealers in 

my district can keep their jobs. I am supporting this bill so that kids and their parents 

will still have the access to affordable loans to 

go to college—an advantage I had as a young 

man. 

I am not suggesting this is a perfect solution. But like Warren Buffet, I would rather be 

approximately right than precisely wrong. And 

I am absolutely convinced that we must take 

action very soon before the credit crisis 

deepens and before it affects the lives and 

livelihoods of even more of our friends and 

neighbors. The time to act is now. This is the 

only option before us. We must pass it. 

Mr. MEEK of Florida. Madam Speaker, my 

constituents didn’t cause this economic mess, 

but if our action to this crisis is inaction, they 

would disproportionally bear the brunt of this 

financial meltdown. The credit market would 

severely tighten, preventing consumers with 

excellent credit scores from purchasing a new 

automobile, sending a son or daughter to college, or refinancing their mortgage to avoid 

foreclosure. Pension funds would erode, putting senior citizens from our community in an 

impossible financial situation. Layoffs would be 

felt throughout south Florida, and inflation 

would erode buyers’ purchasing power. The 

Department of Labor reported today that the 

American economy lost 159,000 jobs in September, bringing the total number of jobs lost 

in 2008 to 760,000. 

A Wall Street banker will never bear the 

brunt of this economic downturn like a small 

business owner, high school teacher, or law 

enforcement officer struggling to get by in this 

economy. To stabilize our economy and insulate Main Street from Wall Street, we must reinvest in the troubled markets, reimburse the 

taxpayer by requiring the plan to be repaid in 

full, and reform how business is done on Wall 

Street by enacting strict oversight measures 

and limiting excessive compensation for CEOs 

and executives. 

Florida is ground zero for the housing foreclosure crisis, and this legislation provides 

property tax relief for up to 30 million homeowners nationwide and allows the Government 

to now work more directly with loan service 

providers to make problem loans more affordable. 

I have significant reservations about this financial recovery legislation, as do many of my 

Democratic and Republican colleagues. This 

is a vote that I did not cast lightly, but knowing 

that families, retirees and small business owners were suffering along Main Street, I was left 

with no option but to support the package. 

Mr. THORNBERRY. Madam Speaker, deciding how to vote on this issue has been 

among the most difficult votes I have cast in 

Congress. The economic condition and wellbeing of every American will be affected. 

I continue to be uncomfortable with the degree of government intrusion into our economy 

that this bill would authorize. I also continue to 

be concerned about the economic consequences to all Americans if some sort of action is not taken. It is balancing those two positions that make this vote an extremely difficult one. 

The bill is better now than it was earlier. 

The increase in the amount of deposits that 

can be insured by the FDIC will help bring significantly more capital into all banks—those 

that are troubled and those who have not 

made the risky loans that precipitated this crisis. The SEC announcement ‘‘clarifying’’ the 

mark-to-market accounting rules could help 

unleash billions of dollars that were sidelined. 

Both of these changes will help bring more private capital into the system so that the entire 

burden of stabilizing troubled institutions does 

not fall on the taxpayers. 

If the asset purchase program is managed 

competently, the cost to the taxpayers should 

be far less than the $700 billion authorized, as 

both the Office of Management and Budget, 

OMB, and the Congressional Budget Office, 

CBO, have said. 

The other major consideration for me is that 

if this bill does not pass, a far worse bill probably will. I would like to write this bill differently 

and to have other options considered. I have 

little doubt, however, that if this improved bill 

does not pass today, the next bill will veer to 

the left in an attempt to attract more Democratic votes and will result in more government 

intrusion and a higher cost to the taxpayers. 

As I weigh my concerns about the level of 

government intervention with my concerns for 

the economic consequences of inaction or of 

a far worse bill, I have decided that it is in the 

best interests of the Nation for this bill to pass 

so that hopefully the economic recovery can 

begin. 

There is a crisis of confidence in our credit 

system, and there is a real danger that if it 

spreads, Americans all across the country will 

not be able to get car loans, home mortgages, 

or loans to operate their businesses. There is 

even a danger that some may not be able to 

withdraw their money from various retirement 

accounts. The result could be a severe recession, greater unemployment, and consequences that all Americans will feel. 

It is likely that the United States will face 

more economic problems in the days ahead 

even with this bill. We will never know what 

bigger problems might be averted. But, in my 

view, the potential consequences of not acting 

outweigh the deep reservations I have about 

this proposal. 

I understand that any measure will be 

somewhat unfair in that those who took the 

excessive risks and made unwise decisions 

will be protected from the full consequences of 

their decisions. Unfortunately, some degree of 

unfairness is inevitable, but calculations of fairness must also consider what is best for the 

whole country. 

Finally, a tax bill was added to this measure. It would have been better to have kept 

the two bills separate. I strongly support extending current tax law so that Americans will 

not face a tax increase, which would be a 

huge blow to economic growth. However, I am 

not pleased with the numerous special interest 

tax provisions that are included and are exactly the kind of thing that understandably 

frustrates the American people about their 

government. 

A former minister in my home church used 

to say that ‘‘Sometimes you have to put aside 


rfrederick on PROD1PC67 with HOUSE
October 3, 2008 CONGRESSIONAL RECORD — HOUSE H10805 

your principles and do what’s right.’’ I believe 

at this extraordinary time passing this flawed 

bill is the right thing to do. 

Mr. CLYBURN. Madam Speaker, I rise 

today in strong support of the Emergency Economic Stabilization Act of 2008 and believe 

this bill must be enacted as soon as possible 

to stop our country from falling deeper into recession. Today, Madam Speaker, we were informed that our economy lost jobs for the 

ninth month in a row. This brings the total jobs 

lost this year to 760,000. But, Madam Speaker, jobs are not the only thing Americans 

across this Nation are losing; they are losing 

their hold on the American Dream. That 

dream, Madam Speaker, is upward economic 

mobility and home ownership. Nowhere is this 

problem more acute than in minority communities. 

Madam Speaker, this bill is about more than 

Wall Street; it is about Broad Street and Walker Street. It is about grocery stores, beauty salons, barber shops, community banks, and 

automobile dealerships. 

Madam Speaker, minority communities are 

hemorrhaging jobs, homes, income, and most 

importantly, credit. Consider this fact, African 

Americans received 35 percent of the 

subprime purchase loans issued from 2004– 

2007; of these loans 62 percent of them will 

reset to a higher rate by the end of 2008. 

Many of these homes’ values have dropped 

by 25 percent, access to refinancing credit is 

no longer available, and their pension plans 

have lost substantial value. These dynamics 

are debilitating to minority businesses and 

communities. 

These powerful and destructive economic 

forces coupled with a lost of liquidity on Wall 

Street have led to the greatest reduction of 

wealth in the minority community since the 

Great Depression. 

That is why I am here today. I believe this 

bill must pass. We must ensure that the minority communities do not just survive but 

thrive. 

Mr. CARNAHAN. Madam Speaker, I rise 

today in support of the Emergency Economic 

Stabilization Act 2008 for a second time. 

Thousands of my constituents in Missouri 

have contacted me to share their anxiety and 

anger about the financial crisis we are facing. 

I too am angry about the current economic crisis in our country—angry about those who 

caused it and those who have bungled solutions. 

Year of de-regulation of the financial markets, coupled with lax oversight by the Bush 

administration of these institutions, has had 

devastating effects on the lives of many Missourians. 

I strongly opposed the original Bush/ 

Paulson Bailout Plan that was basically a 

blank check with no accountability for an industry that made poor decisions. But the risk 

of taking no action is too great and too dangerous for our economy, and the financial stability of all Americans. 

We must pass this legislation, even with its 

imperfections, to unlock the credit market that 

is essential to both individuals and businesses. Without a properly functioning credit 

market, small businesses, the backbone of 

Missouri’s economy, risk not making payroll. 

Americans will have increasing difficulty obtaining car loans, home loans, farm loans, student loans, as well as other forms of credit 

upon which we all rely. 

I have heard from many Missourians concerned about the effect of tightened moneylending standards. From the hardworking couple just about to retire who have watched the 

value of the retirement savings dramatically 

decline over the past month to the family who 

needs to buy a new car but cannot qualify for 

a loan because of the freeze in the credit market. 

The economic downturn is also hitting our 

small businesses. In my hometown of St. 

Louis, Feld Chevrolet, a St. Louis leader for 

over 27 years, has shut its doors because the 

lender stopped financing the dealership’s inventory. 

Stories like these make it clear we have a 

responsibility to act before the credit crisis further undermines our economy. 

Without decisive action, most economists 

have noted that the situation will only worsen, 

credit markets will freeze, Main Street will suffer, and Missouri families will struggle. 

My constituents as well as yours will not be 

able to make basic home and car loans. Small 

businesses will not be able to make their payrolls, and credit card interest rates will soar. 

The legislation before us today is a vast improvement over the original proposal put forward by the Bush administration, which gave 

unprecedented and unchecked authority to the 

Secretary of the Treasury to spend $700 billion. We have made it clear that Congress 

does not write blank checks to Wall Street. 

This legislation will require the Government 

to develop an emergency line of credit to reduce foreclosures as it buys troubled financial 

assets, allows the Government to purchase 

other types of mortgages to unfreeze the credit market, and allows the Government to purchase certain troubled assets form pension 

plans to ensure individual retirement security. 

This bipartisan proposal will help insulate 

the American people and Main Street from the 

crisis on Wall Street as we stabilize the markets. It will also, protect taxpayers by ensuring 

public investments reap any profits and the financial industry is responsible for any short 

fall and it ends excess compensation for executives of participating financial institutions. 

Following, the House vote last Monday, the 

stock market plunged an historic 777 points, 

costing the American economy $1.2 trillion. 

Americans across the country saw their 

401Ks, pension plans and savings account 

lose value. This was a loud wake up call that 

we must take swift and decisive action. 

The legislation we are considering today is 

no longer focused on just a bailout of Wall 

Street; more importantly it is a buy-in so that 

we can turn our entire economy around and 

help hard working Americans. 

In no way are we out of the woods. Times 

are and will continue to be difficult, but I believe passage of this bill can help us get back 

on track and help prevent our economy from 

spiraling out of control. These times will certainly demand additional steps and common 

sense leadership to get America back on her 

feet again. 

I urge my colleagues to vote for this bill. 

The SPEAKER pro tempore. All time 

for debate has expired. 

Pursuant to House Resolution 1525, 

the previous question is ordered. 

The question is on the motion by the 

gentleman from Massachusetts (Mr. 

FRANK). 

The question was taken; and the 

Speaker pro tempore announced that 

the ayes appeared to have it. 

Mr. FRANK of Massachusetts. 

Madam Speaker, on that I demand the 

yeas and nays. 

The yeas and nays were ordered. 

The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, this 15- 

minute vote on the motion to concur 

will be followed by a 5-minute vote on 

suspending the rules and passing S. 

3197. 

The vote was taken by electronic device, and there were—yeas 263, nays 

171, as follows: 

[Roll No. 681] 

YEAS—263 

Abercrombie 

Ackerman 

Alexander 

Allen 

Andrews 

Arcuri 

Baca 

Bachus 

Baird 

Baldwin 

Barrett (SC) 

Bean 

Berkley 

Berman 

Berry 

Biggert 

Bishop (GA) 

Bishop (NY) 

Blunt 

Boehner 

Bonner 

Bono Mack 

Boozman 

Boren 

Boswell 

Boucher 

Boustany 

Boyd (FL) 

Brady (PA) 

Brady (TX) 

Braley (IA) 

Brown (SC) 

Brown, Corrine 

Buchanan 

Calvert 

Camp (MI) 

Campbell (CA) 

Cannon 

Cantor 

Capps 

Capuano 

Cardoza 

Carnahan 

Carson 

Castle 

Clarke 

Cleaver 

Clyburn 

Coble 

Cohen 

Cole (OK) 

Conaway 

Cooper 

Costa 

Cramer 

Crenshaw 

Crowley 

Cubin 

Cuellar 

Cummings 

Davis (AL) 

Davis (CA) 

Davis (IL) 

Davis, Tom 

DeGette 

DeLauro 

Dent 

Dicks 

Dingell 

Donnelly 

Doyle 

Dreier 

Edwards (MD) 

Edwards (TX) 

Ehlers 

Ellison 

Ellsworth 

Emanuel 

Emerson 

Engel 

Eshoo 

Etheridge 

Everett 

Fallin 

Farr 

Fattah 

Ferguson 

Fossella 

Foster 

Frank (MA) 

Frelinghuysen 

Gerlach 

Giffords 

Gilchrest 

Gonzalez 

Gordon 

Granger 

Green, Al 

Gutierrez 

Hall (NY) 

Hare 

Harman 

Hastings (FL) 

Herger 

Higgins 

Hinojosa 

Hirono 

Hobson 

Hoekstra 

Holt 

Honda 

Hooley 

Hoyer 

Inglis (SC) 

Israel 

Jackson (IL) 

Jackson-Lee 

(TX) 

Johnson, E. B. 

Kanjorski 

Kennedy 

Kildee 

Kilpatrick 

Kind 

King (NY) 

Kirk 

Klein (FL) 

Kline (MN) 

Knollenberg 

Kuhl (NY) 

LaHood 

Langevin 

Larsen (WA) 

Larson (CT) 

Lee 

Levin 

Lewis (CA) 

Lewis (GA) 

Lewis (KY) 

Loebsack 

Lofgren, Zoe 

Lowey 

Lungren, Daniel 

E. 

Mahoney (FL) 

Maloney (NY) 

Markey 

Marshall 

Matsui 

McCarthy (NY) 

McCollum (MN) 

McCrery 

McGovern 

McHugh 

McKeon 

McNerney 

McNulty 

Meek (FL) 

Meeks (NY) 

Melancon 

Miller (NC) 

Miller, Gary 

Miller, George 

Mitchell 

Mollohan 

Moore (KS) 

Moore (WI) 

Moran (VA) 

Murphy (CT) 

Murphy, Patrick 

Murtha 

Myrick 

Nadler 

Neal (MA) 

Oberstar 

Obey 

Olver 

Ortiz 

Pallone 

Pascrell 

Pastor 

Pelosi 

Perlmutter 

Peterson (PA) 

Pickering 

Pomeroy 

Porter 

Price (NC) 

Pryce (OH) 

Putnam 

Radanovich 

Rahall 

Ramstad 

Rangel 

Regula 

Reyes 

Reynolds 

Richardson 

Rogers (AL) 

Rogers (KY) 

Ros-Lehtinen 

Ross 

Ruppersberger 

Rush 

Ryan (OH) 

Ryan (WI) 

Sarbanes 

Saxton 

Schakowsky 

Schiff 

Schmidt 

Schwartz 

Scott (GA) 

Sessions 

Sestak 

Shadegg 

Shays 

Shuster 

Simpson 

Sires 

Skelton 

Slaughter 

Smith (TX) 

Smith (WA) 

Snyder 

Solis 

Souder 

Space 

Speier 

Spratt 

Sullivan 

Sutton 

Tancredo 

Tanner 

Tauscher 

Terry 

Thompson (CA) 


rfrederick on PROD1PC67 with HOUSE
H10806 CONGRESSIONAL RECORD — HOUSE October 3, 2008 

Thornberry 

Tiberi 

Tierney 

Towns 

Tsongas 

Upton 

Van Hollen 

Vela ́ zquez 

Walden (OR) 

Walsh (NY) 

Wamp 

Wasserman 

Schultz 

Waters 

Watson 

Watt 

Waxman 

Weiner 

Welch (VT) 

Weldon (FL) 

Weller 

Wexler 

Wilson (NM) 

Wilson (OH) 

Wilson (SC) 

Wolf 

Woolsey 

Wu 

Yarmuth 

NAYS—171 

Aderholt 

Akin 

Altmire 

Bachmann 

Barrow 

Bartlett (MD) 

Barton (TX) 

Becerra 

Bilbray 

Bilirakis 

Bishop (UT) 

Blackburn 

Blumenauer 

Boyda (KS) 

Broun (GA) 

Brown-Waite, 

Ginny 

Burgess 

Burton (IN) 

Butterfield 

Buyer 

Capito 

Carney 

Carter 

Castor 

Cazayoux 

Chabot 

Chandler 

Childers 

Clay 

Conyers 

Costello 

Courtney 

Culberson 

Davis (KY) 

Davis, David 

Davis, Lincoln 

Deal (GA) 

DeFazio 

Delahunt 

Diaz-Balart, L. 

Diaz-Balart, M. 

Doggett 

Doolittle 

Drake 

Duncan 

English (PA) 

Feeney 

Filner 

Flake 

Forbes 

Fortenberry 

Foxx 

Franks (AZ) 

Gallegly 

Garrett (NJ) 

Gillibrand 

Gingrey 

Gohmert 

Goode 

Goodlatte 

Graves 

Green, Gene 

Grijalva 

Hall (TX) 

Hastings (WA) 

Hayes 

Heller 

Hensarling 

Herseth Sandlin 

Hill 

Hinchey 

Hodes 

Holden 

Hulshof 

Hunter 

Inslee 

Issa 

Jefferson 

Johnson (GA) 

Johnson (IL) 

Johnson, Sam 

Jones (NC) 

Jordan 

Kagen 

Kaptur 

Keller 

King (IA) 

Kingston 

Kucinich 

Lamborn 

Lampson 

Latham 

LaTourette 

Latta 

Linder 

Lipinski 

LoBiondo 

Lucas 

Lynch 

Mack 

Manzullo 

Marchant 

Matheson 

McCarthy (CA) 

McCaul (TX) 

McCotter 

McDermott 

McHenry 

McIntyre 

McMorris 

Rodgers 

Mica 

Michaud 

Miller (FL) 

Miller (MI) 

Moran (KS) 

Murphy, Tim 

Musgrave 

Napolitano 

Neugebauer 

Nunes 

Paul 

Payne 

Pearce 

Pence 

Peterson (MN) 

Petri 

Pitts 

Platts 

Poe 

Price (GA) 

Rehberg 

Reichert 

Renzi 

Rodriguez 

Rogers (MI) 

Rohrabacher 

Roskam 

Rothman 

Roybal-Allard 

Royce 

Salazar 

Sali 

Sa ́nchez, Linda 

T. 

Sanchez, Loretta 

Scalise 

Scott (VA) 

Sensenbrenner 

Serrano 

Shea-Porter 

Sherman 

Shimkus 

Shuler 

Smith (NE) 

Smith (NJ) 

Stark 

Stearns 

Stupak 

Taylor 

Thompson (MS) 

Tiahrt 

Turner 

Udall (CO) 

Udall (NM) 

Visclosky 

Walberg 

Walz (MN) 

Westmoreland 

Whitfield (KY) 

Wittman (VA) 

Young (AK) 

Young (FL) 

b 1322 

So the motion was agreed to. 

The result of the vote was announced 

as above recorded. 

A motion to reconsider was laid on 

the table. 

f 

MESSAGE FROM THE SENATE 

A message from the Senate by Ms. 

Curtis, one of its clerks, announced 

that the Senate has passed without 

amendment bills of the House of the 

following titles: 

H.R. 4010. An act to designate the facility 

of the United States Postal Service located 

at 100 West Percy Street in Indianola, Mississippi, as the ‘‘Minnie Cox Post Office 

Building’’. 

H.R. 4131. An act to designate a portion of 

California State Route 91 located in Los Angeles County, California, as the ‘‘Juanita 

Millender-McDonald Highway’’. 

H.R. 6197. An act to designate the facility 

of the United States Postal Service located 

at 7095 Highway 57 in Counce, Tennessee, as 

the ‘‘Pickwick Post Office Building’’. 

H.R. 6558. An act to designate the facility 

of the United States Postal Service located 

at 1750 Lundy Avenue in San Jose, California, as the ‘‘Gordon N. Chan Post Office 

Building’’. 

H.R. 6834. An act to designate the facility 

of the United States Postal Service located 

at 4 South Main Street in Wallingford, Connecticut, as the ‘‘CWO Richard R. Lee Post 

Office Building’’. 

H.R. 6902. An act to designate the facility 

of the United States Postal Service located 

at 513 6th Avenue in Dayton, Kentucky, as 

the ‘‘Staff Sergeant Nicholas Ray Carnes 

Post Office’’. 

H.R. 6982. An act to designate the facility 

of the United States Postal Service located 

in 210 South Ellsworth Avenue in San Mateo, 

California as the ‘‘Leo J. Ryan Post Office 

Building’’. 

The message also announced that the 

Senate has agreed to without amendment a House Joint Resolution and 

House Concurrent Resolutions of the 

following titles: 

H. J. Res. 100. Joint resolution appointing 

the day for the convening of the first session 

of the One Hundred Eleventh Congress and 

establishing the date for the counting of the 

electoral votes for President and Vice President cast by the electors in December 2008. 

H. Con. Res. 378. Concurrent resolution expressing support for designation of September 6, 2008, as Louisa Swain Day. 

H. Con. Res. 426. Concurrent resolution recognizing the 10th anniversary of the establishment of the Minority AIDS Initiative. 

The message also announced that the 

Senate has passed bills of the following 

titles in which the concurrence of the 

House is requested. 

S. 2579. An act to require the Secretary of 

the Treasury to mint coins in recognition 

and celebration of the establishment of the 

United States Army in 1775, to honor the 

American soldier of both today and yesterday, in wartime and in peace, and to commemorate the traditions, history, and heritage of the United States Army and its role in 

American society, from the Colonial period 

to today. 

S. 3521. An act to designate the facility of 

the Unites States Postal Service located at 

95 Dogwood Street in Cary, Mississippi, as 

the ‘‘Spencer Byrd Powers, Jr. Post Office’’. 

S. 3625. An act to designate the facility of 

the United States Postal Service located at 

245 North Main Street in New York City, 

New York, as the ‘‘Kenneth Peter Zebrowski 

Post Office Building’’. 

The message also announced that 

pursuant to Public Law 96–114, as 

amended, the Chair, on behalf of the 

Majority Leader, appoints the following individual to the Congressional 

Award Board: 

Kathryn Weeden of Washington, D.C. 

f 

NATIONAL GUARD AND RESERVISTS DEBT RELIEF ACT OF 2008 

The SPEAKER pro tempore. The unfinished business is the vote on the motion to suspend the rules and pass the 

Senate bill, S. 3197, on which the yeas 

and nays were ordered. 

The Clerk read the title of the Senate 

bill. 

The SPEAKER pro tempore. The 

question is on the motion offered by 

the gentleman from Michigan (Mr. 

CONYERS) that the House suspend the 

rules and pass the Senate bill, S.3197. 

This will be a 5-minute vote. 

The vote was taken by electronic device, and there were—yeas 411, nays 0, 

not voting 22, as follows: 

[Roll No. 682] 

YEAS—411 

Abercrombie 

Ackerman 

Aderholt 

Akin 

Alexander 

Allen 

Altmire 

Andrews 

Arcuri 

Baca 

Bachmann 

Bachus 

Baird 

Baldwin 

Barrett (SC) 

Barrow 

Bartlett (MD) 

Barton (TX) 

Bean 

Becerra 

Berkley 

Berman 

Berry 

Biggert 

Bilirakis 

Bishop (GA) 

Bishop (NY) 

Bishop (UT) 

Blackburn 

Blumenauer 

Blunt 

Boehner 

Bonner 

Bono Mack 

Boozman 

Boren 

Boswell 

Boucher 

Boustany 

Boyd (FL) 

Boyda (KS) 

Brady (PA) 

Brady (TX) 

Braley (IA) 

Broun (GA) 

Brown (SC) 

Brown, Corrine 

Brown-Waite, 

Ginny 

Buchanan 

Burgess 

Burton (IN) 

Butterfield 

Buyer 

Calvert 

Camp (MI) 

Campbell (CA) 

Cannon 

Cantor 

Capito 

Capps 

Capuano 

Cardoza 

Carnahan 

Carney 

Carson 

Castle 

Castor 

Cazayoux 

Chabot 

Chandler 

Childers 

Clarke 

Clay 

Cleaver 

Clyburn 

Coble 

Cohen 

Cole (OK) 

Conaway 

Conyers 

Cooper 

Costa 

Costello 

Courtney 

Cramer 

Crenshaw 

Crowley 

Cuellar 

Culberson 

Cummings 

Davis (AL) 

Davis (CA) 

Davis (IL) 

Davis (KY) 

Davis, David 

Davis, Lincoln 

Davis, Tom 

Deal (GA) 

DeFazio 

DeGette 

Delahunt 

DeLauro 

Dent 

Diaz-Balart, L. 

Diaz-Balart, M. 

Dicks 

Dingell 

Doggett 

Donnelly 

Doolittle 

Doyle 

Drake 

Dreier 

Duncan 

Edwards (MD) 

Edwards (TX) 

Ehlers 

Ellison 

Ellsworth 

Emanuel 

Emerson 

Engel 

English (PA) 

Eshoo 

Etheridge 

Fallin 

Farr 

Fattah 

Feeney 

Ferguson 

Filner 

Flake 

Forbes 

Fortenberry 

Fossella 

Foster 

Foxx 

Frank (MA) 

Franks (AZ) 

Frelinghuysen 

Garrett (NJ) 

Gerlach 

Giffords 

Gillibrand 

Gonzalez 

Goode 

Goodlatte 

Gordon 

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