I 

111TH CONGRESS 

2D SESSION H. R. 5125 

To amend the Emergency Economic Stabilization Act of 2008 to establish 

a fund to be used to make local governments whole for losses incurred 

from the Lehman Brothers Holding, Inc., bankruptcy. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 22, 2010 

Ms. ESHOO (for herself and Ms. SPEIER) introduced the following bill; which 

was referred to the Committee on Financial Services 

A BILL 

To amend the Emergency Economic Stabilization Act of 

2008 to establish a fund to be used to make local governments whole for losses incurred from the Lehman Brothers Holding, Inc., bankruptcy. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Restitution for Local 

5 Government Act of 2010’’. 


tjames on DSKG8SOYB1PROD with BILLS
2 

•HR 5125 IH

1 SEC. 2. TARP PROFITS USED TO PURCHASE CERTAIN IN2 STRUMENTS FROM LOCAL GOVERNMENTS. 

3 (a) RESTITUTION FOR LOCAL GOVERNMENTS.—Title 

4 I of the Emergency Economic Stabilization Act of 2008 

5 is amended by adding at the end the following new section: 

6 ‘‘SEC. 137. RESTITUTION FOR LOCAL GOVERNMENTS. 

7 ‘‘(a) PURCHASES OF CERTAIN INSTRUMENTS FROM

8 LOCAL GOVERNMENTS.— 

9 ‘‘(1) IN GENERAL.—Notwithstanding section 

10 106(d), and with respect to troubled assets pur11 chased from a specific financial institution, the 

12 amount of any profit made by the Secretary with re13 spect to such troubled assets shall by used by the 

14 Secretary to purchase from local governments secu15 rities, bonds, and other financial instruments issued 

16 by Lehman Brothers Holding, Inc. that were held by 

17 such governments on September 12, 2008. 

18 ‘‘(2) LIMITATIONS.— 

19 ‘‘(A) DOLLAR AMOUNT.—The aggregate 

20 amount of all purchases made by the Secretary 

21 under paragraph (1) shall not exceed 

22 $1,700,000,000. 

23 ‘‘(B) NONAPPLICABILITY TO PENSION

24 FUNDS.—Financial instruments held by a pen25 sion fund may not be purchased pursuant to 

26 paragraph (1). 


tjames on DSKG8SOYB1PROD with BILLS
3 

•HR 5125 IH

1 ‘‘(3) PURCHASE AMOUNT.—For purposes of de2 termining the purchase price of a financial instru3 ment under paragraph (1)— 

4 ‘‘(A) with respect to stock of Lehman 

5 Brothers Holding, Inc., the purchase price of 

6 such stock shall be calculated based on the 

7 value of such stock at the close of trading on 

8 September 12, 2008; and 

9 ‘‘(B) with respect to any other financial in10 strument, the purchase price shall be the prin11 cipal amount of such instrument. 

12 ‘‘(b) SUBSTITUTION OF SECRETARY.—Notwith13 standing any other provision of this title, the Secretary 

14 shall be substituted for any local government from which 

15 the Secretary purchases any financial instrument pursu16 ant to subsection (a)(1) as a creditor in any proceeding 

17 under title 11, United States Code, pursuant to the peti18 tion filed on September 15, 2008, by Lehman Brothers 

19 Holdings Inc., and shall have the same standing in such 

20 proceedings with respect to other creditors as the local 

21 government for which the Secretary is substituted. 

22 ‘‘(c) REPORTING REQUIREMENT.—Each local govern23 ment from which the Secretary makes purchases under 

24 subsection (a)(1) must issue a report to the Congress— 


tjames on DSKG8SOYB1PROD with BILLS
4 

•HR 5125 IH

1 ‘‘(1) stating how the local government used the 

2 funds received through such purchase; and 

3 ‘‘(2) demonstrating job creation, retention, and 

4 economic activity equal to the difference between— 

5 ‘‘(A) the amount of the funds received by 

6 the local government through such purchase; 

7 and 

8 ‘‘(B) the amount of funds received by the 

9 Secretary by reason of being substituted as a 

10 creditor with respect to the instruments that 

11 are the basis of such purchases, pursuant to 

12 subsection (b). 

13 ‘‘(d) RULEMAKING.—The Secretary shall issue such 

14 regulations as are necessary to carry out the provisions 

15 of this section. 

16 ‘‘(e) LOCAL GOVERNMENT DEFINED.—For purposes 

17 of this section, the term ‘local government’ means any 

18 county, city, town, village, or other general purpose polit19 ical subdivision of a State.’’. 

20 (b) CLERICAL AMENDMENT.—The table of contents 

21 of the Emergency Economic Stabilization Act of 2008 is 

22 amended by inserting after the item relating to section 

23 136 the following: 

‘‘Sec. 137. Restitution for local governments.’’. 

Æ 


tjames on DSKG8SOYB1PROD with BILLS