1399 
HR 1 PP 
under subsection (b) or (c), or an increase in a cap 
amount under subsection (d), if it requires that such 
political subdivisions pay for quarters during the re-
cession adjustment period a greater percentage of the 
non-Federal share of such expenditures, or a greater 
percentage of the non-Federal share of payments 
under section 1923, than the respective percentage 
that would have been required by the State under 
such plan on September 30, 2008, prior to applica-
tion of this section. 
(h) DEFINITIONS.—In this section, except as otherwise 
provided: 
(1) FMAP.—The term ‘‘FMAP’’ means the Fed-
eral medical assistance percentage, as defined in sec-
tion 1905(b) of the Social Security Act (42 U.S.C. 
1396d(b)), as determined without regard to this sec-
tion except as otherwise specified. 
(2) POVERTY
LINE.—The term ‘‘poverty line’’ 
has the meaning given such term in section 673(2) of 
the Community Services Block Grant Act (42 U.S.C. 
9902(2)), including any revision required by such sec-
tion. 
(3) RECESSION ADJUSTMENT PERIOD.—The term 
‘‘recession adjustment period’’ means the period be-
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01399
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1400 
HR 1 PP 
ginning on October 1, 2008, and ending on December 
31, 2010. 
(4) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
(5) STATE.—The term ‘‘State’’ has the meaning 
given such term for purposes of title XIX of the Social 
Security Act (42 U.S.C. 1396 et seq.). 
(i) SUNSET.—This section shall not apply to items and 
services furnished after the end of the recession adjustment 
period. 
SEC. 5002. EXTENSION AND UPDATE OF SPECIAL RULE FOR 
INCREASE OF MEDICAID DSH ALLOTMENTS 
FOR LOW DSH STATES. 
Section 1923(f)(5) of the Social Security Act (42 
U.S.C. 1396r–4(f)(5)) is amended— 
(1) in subparagraph (B)— 
(A) in the subparagraph heading, by strik-
ing ‘‘YEAR
2004
AND
SUBSEQUENT
FISCAL 
YEARS’’ and inserting ‘‘YEARS
2004
THROUGH 
2008’’; 
(B) in clause (i), by inserting ‘‘and’’ after 
the semicolon; 
(C) in clause (ii), by striking ‘‘; and’’ and 
inserting a period; and 
(D) by striking clause (iii); and 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01400
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1401 
HR 1 PP 
(2) by adding at the end the following subpara-
graph: 
‘‘(C) FOR FISCAL YEAR 2009 AND SUBSE-
QUENT FISCAL YEARS.—In the case of a State in 
which the total expenditures under the State 
plan (including Federal and State shares) for 
disproportionate 
share 
hospital 
adjustments 
under this section for fiscal year 2006, as re-
ported to the Administrator of the Centers for 
Medicare & Medicaid Services as of August 31, 
2009, is greater than 0 but less than 3 percent 
of the State’s total amount of expenditures under 
the State plan for medical assistance during the 
fiscal year, the DSH allotment for the State with 
respect to— 
‘‘(i) fiscal year 2009, shall be the DSH 
allotment for the State for fiscal year 2008 
increased by 16 percent; 
‘‘(ii) fiscal year 2010, shall be the 
DSH allotment for the State for fiscal year 
2009 increased by 16 percent; 
‘‘(iii) fiscal year 2011 for the period 
ending on December 31, 2010, shall be 1⁄4 of 
the DSH allotment for the State for fiscal 
year 2010 increased by 16 percent; 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01401
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1402 
HR 1 PP 
‘‘(iv) fiscal year 2011 for the period be-
ginning on January 1, 2011, and ending on 
September 30, 2011, shall be 3⁄4 of the DSH 
allotment that would have been determined 
under this subsection for the State for fiscal 
year 2011 if this subparagraph had not 
been enacted; 
‘‘(v) fiscal year 2012, shall be the DSH 
allotment that would have been determined 
under this subsection for the State for fiscal 
year 2012 if this subparagraph had not 
been enacted; and 
‘‘(vi) fiscal year 2013 and any subse-
quent fiscal year, shall be the DSH allot-
ment for the State for the previous fiscal 
year subject to an increase for inflation as 
provided in paragraph (3)(A).’’. 
SEC. 5003. PAYMENT OF MEDICARE LIABILITY TO STATES 
AS A RESULT OF THE SPECIAL DISABILITY 
WORKLOAD PROJECT. 
(a) IN GENERAL.—The Secretary, in consultation with 
the Commissioner, shall work with each State to reach an 
agreement, not later than 3 months after the date of enact-
ment of this Act, on the amount of a payment for the State 
related to the Medicare program liability as a result of the 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01402
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1403 
HR 1 PP 
Special Disability Workload project, subject to the require-
ments of subsection (c). 
(b) PAYMENTS.— 
(1) DEADLINE
FOR
MAKING
PAYMENTS.—Not 
later than 30 days after reaching an agreement with 
a State under subsection (a), the Secretary shall pay 
the State, from the amounts appropriated under 
paragraph (2), the payment agreed to for the State. 
(2) APPROPRIATION.—Out of any money in the 
Treasury not otherwise appropriated, there is appro-
priated $3,000,000,000 for fiscal year 2009 for mak-
ing payments to States under paragraph (1). 
(3) LIMITATIONS.—In no case may— 
(A) the aggregate amount of payments made 
by the Secretary to States under paragraph (1) 
exceed $3,000,000,000; or 
(B) any payments be provided by the Sec-
retary under this section after the first day of the 
first month that begins 4 months after the date 
of enactment of this Act. 
(c) REQUIREMENTS.—The requirements of this sub-
section are the following: 
(1) FEDERAL
DATA
USED
TO
DETERMINE 
AMOUNT OF PAYMENTS.—The amount of the payment 
under subsection (a) for each State is determined on 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01403
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1404 
HR 1 PP 
the basis of the most recent Federal data available, 
including the use of proxies and reasonable estimates 
as necessary, for determining expeditiously the 
amount of the payment that shall be made to each 
State that enters into an agreement under this sec-
tion. The payment methodology shall consider the fol-
lowing factors: 
(A) The number of SDW cases found to 
have been eligible for benefits under the Medicare 
program and the month of the initial Medicare 
program eligibility for such cases. 
(B) The applicable non-Federal share of ex-
penditures made by a State under the Medicaid 
program during the time period for SDW cases. 
(C) Such other factors as the Secretary and 
the Commissioner, in consultation with the 
States, determine appropriate. 
(2) CONDITIONS FOR PAYMENTS.—A State shall 
not receive a payment under this section unless the 
State— 
(A) waives the right to file a civil action (or 
to be a party to any action) in any Federal or 
State court in which the relief sought includes a 
payment from the United States to the State re-
lated to the Medicare liability under title XVIII 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01404
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1405 
HR 1 PP 
of the Social Security Act (42 U.S.C. 1395 et 
seq.) as a result of the Special Disability Work-
load project; and 
(B) releases the United States from any fur-
ther claims for reimbursement of State expendi-
tures as a result of the Special Disability Work-
load project. 
(3) NO
INDIVIDUAL
STATE
CLAIMS
DATA
RE-
QUIRED.—No State shall be required to submit indi-
vidual claims evidencing payment under the Med-
icaid program as a condition for receiving a payment 
under this section. 
(4) INELIGIBLE
STATES.—No State that is a 
party to a civil action in any Federal or State court 
in which the relief sought includes a payment from 
the United States to the State related to the Medicare 
liability under title XVIII of the Social Security Act 
(42 U.S.C. 1395 et seq.) as a result of the Special 
Disability Workload project shall be eligible to receive 
a payment under this section while such an action is 
pending or if such an action is resolved in favor of 
the State. 
(d) DEFINITIONS.—In this section: 
(1) COMMISSIONER.—The term ‘‘Commissioner’’ 
means the Commissioner of Social Security. 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01405
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1406 
HR 1 PP 
(2) MEDICAID PROGRAM.—The term ‘‘Medicaid 
program’’ means the program of medical assistance 
established under title XIX of the Social Security Act 
(42 U.S.C. 1396a et seq.) and includes medical assist-
ance provided under any waiver of that program ap-
proved under section 1115 or 1915 of such Act (42 
U.S.C. 1315, 1396n) or otherwise. 
(3) MEDICARE PROGRAM.—The term ‘‘Medicare 
program’’ means the program established under title 
XVIII of the Social Security Act (42 U.S.C. 1395 et 
seq.). 
(4) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Health and Human Services. 
(5) SDW CASE.—The term ‘‘SDW case’’ means 
a case in the Special Disability Workload project in-
volving an individual determined by the Commis-
sioner to have been eligible for benefits under title II 
of the Social Security Act (42 U.S.C. 401 et seq.) for 
a period during which such benefits were not provided 
to the individual and who was, during all or part of 
such period, enrolled in a State Medicaid program. 
(6) SPECIAL DISABILITY WORKLOAD PROJECT.— 
The term ‘‘Special Disability Workload project’’ 
means the project described in the 2008 Annual Re-
port of the Board of Trustees of the Federal Old-Age 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01406
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1407 
HR 1 PP 
and Survivors Insurance and Federal Disability In-
surance Trust Funds, H.R. Doc. No. 110–104, 110th 
Cong. (2008). 
(7) STATE.—The term ‘‘State’’ means each of the 
50 States and the District of Columbia. 
SEC. 5004. FUNDING FOR THE DEPARTMENT OF HEALTH 
AND HUMAN SERVICES OFFICE OF THE IN-
SPECTOR GENERAL. 
For purposes of ensuring the proper expenditure of 
Federal funds under title XIX of the Social Security Act 
(42 U.S.C. 1396 et seq.), there is appropriated to the Office 
of the Inspector General of the Department of Health and 
Human Services, out of any money in the Treasury not 
otherwise appropriated and without further appropriation, 
$31,250,000 for the recession adjustment period (as defined 
in section 5001(h)(3)). Amounts appropriated under this 
section shall remain available for expenditure until Sep-
tember 30, 2012, and shall be in addition to any other 
amounts appropriated or made available to such Office for 
such purposes. 
SEC. 5005. GAO STUDY AND REPORT REGARDING STATE 
NEEDS DURING PERIODS OF NATIONAL ECO-
NOMIC DOWNTURN. 
(a) IN GENERAL.—The Comptroller General of the 
United States shall study the period of national economic 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01407
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1408 
HR 1 PP 
downturn in effect on the date of enactment of this Act, 
as well as previous periods of national economic downturn 
since 1974, for the purpose of developing recommendations 
for addressing the needs of States during such periods. As 
part of such analysis, the Comptroller General shall study 
the past and projected effects of temporary increases in the 
Federal medical assistance percentage under the Medicaid 
program with respect to such periods. 
(b) REPORT.—Not later than April 1, 2011, the Comp-
troller General of the United States shall submit a report 
to the appropriate committees of Congress on the results of 
the study conducted under paragraph (1). Such report shall 
include the following: 
(1) Such recommendations as the Comptroller 
General determines appropriate for modifying the na-
tional economic downturn assistance formula for tem-
porary adjustment of the Federal medical assistance 
percentage under Medicaid (also referred to as a 
‘‘countercyclical FMAP’’) described in GAO report 
number GAO–07–97 to improve the effectiveness of the 
application of such percentage in addressing the needs 
of States during periods of national economic down-
turn, including recommendations for— 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01408
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1409 
HR 1 PP 
(A) improvements to the factors that would 
begin and end the application of such percent-
age; 
(B) how the determination of the amount of 
such percentage could be adjusted to address 
State and regional economic variations during 
such periods; and 
(C) how the determination of the amount of 
such percentage could be adjusted to be more re-
sponsive to actual Medicaid costs incurred by 
States during such periods. 
(2) An analysis of the impact on States during 
such periods of— 
(A) declines in private health benefits cov-
erage; 
(B) declines in State revenues; and 
(C) caseload maintenance and growth under 
Medicaid, the State Children’s Health Insurance 
Program, or any other publicly-funded programs 
to provide health benefits coverage for State resi-
dents. 
(3) Identification of, and recommendations for 
addressing, the effects on States of any other specific 
economic indicators that the Comptroller General de-
termines appropriate. 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01409
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1410 
HR 1 PP 
TITLE VI—EXECUTIVE 
COMPENSATION 
SUBTITLE A—OVERSIGHT 
TITLE VI—EXECUTIVE COMPENSATION OVERSIGHT 
Sec. 6001. Definitions. 
Sec. 6002. Executive compensation and corporate governance. 
Sec. 6003. Board Compensation Committee. 
Sec. 6004. Limitation on luxury expenditures. 
Sec. 6005. Shareholder approval of executive compensation. 
Sec. 6006. Review of prior payments to executives. 
SEC. 6001. DEFINITIONS. 
For purposes of this title, the following definitions 
shall apply: 
(1) SENIOR
EXECUTIVE
OFFICER.—The term 
‘‘senior executive officer’’ means an individual who is 
1 of the top 5 most highly paid executives of a public 
company, whose compensation is required to be dis-
closed pursuant to the Securities Exchange Act of 
1934, and any regulations issued thereunder, and 
non-public company counterparts. 
(2) GOLDEN PARACHUTE PAYMENT.—The term 
‘‘golden parachute payment’’ means any payment to 
a senior executive officer for departure from a com-
pany for any reason, except for payments for services 
performed or benefits accrued. 
(3) TARP.—The term ‘‘TARP’’ means the Trou-
bled Asset Relief Program established under the 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01410
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1411 
HR 1 PP 
Emergency Economic Stabilization Act of 2008 (Pub-
lic Law 110–343, 12 U.S.C. 5201 et seq.). 
(4) TARP RECIPIENT.—The term ‘‘TARP recipi-
ent’’ means any entity that has received or will re-
ceive financial assistance under the financial assist-
ance provided under the TARP. 
(5) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of the Treasury. 
(6) 
COMMISSION.—The 
term 
‘‘Commission’’ 
means the Securities and Exchange Commission. 
SEC. 6002. EXECUTIVE COMPENSATION AND CORPORATE 
GOVERNANCE. 
(a) IN GENERAL.—During the period in which any 
obligation arising from financial assistance provided under 
the TARP remains outstanding, each TARP recipient shall 
be subject to— 
(1) the standards established by the Secretary 
under this title; and 
(2) the provisions of section 162(m)(5) of the In-
ternal Revenue Code of 1986, as applicable. 
(b) STANDARDS REQUIRED.—The Secretary shall re-
quire each TARP recipient to meet appropriate standards 
for executive compensation and corporate governance. 
(c) SPECIFIC REQUIREMENTS.—The standards estab-
lished under subsection (b) shall include— 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01411
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1412 
HR 1 PP 
(1) limits on compensation that exclude incen-
tives for senior executive officers of the TARP recipi-
ent to take unnecessary and excessive risks that 
threaten the value of such recipient during the period 
that any obligation arising from TARP assistance is 
outstanding; 
(2) a provision for the recovery by such TARP 
recipient of any bonus, retention award, or incentive 
compensation paid to a senior executive officer and 
any of the next 20 most highly-compensated employees 
of the TARP recipient based on statements of earn-
ings, revenues, gains, or other criteria that are later 
found to be materially inaccurate; 
(3) a prohibition on such TARP recipient mak-
ing any golden parachute payment to a senior execu-
tive officer or any of the next 5 most highly-com-
pensated employees of the TARP recipient during the 
period that any obligation arising from TARP assist-
ance is outstanding; 
(4) a prohibition on such TARP recipient pay-
ing or accruing any bonus, retention award, or incen-
tive compensation during the period that the obliga-
tion is outstanding to at least the 25 most highly- 
compensated employees, or such higher number as the 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01412
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1413 
HR 1 PP 
Secretary may determine is in the public interest 
with respect to any TARP recipient; 
(5) a prohibition on any compensation plan that 
would encourage manipulation of the reported earn-
ings of such TARP recipient to enhance the com-
pensation of any of its employees; and 
(6) a requirement for the establishment of a 
Board Compensation Committee that meets the re-
quirements of section 6003. 
(d) CERTIFICATION OF COMPLIANCE.—The chief execu-
tive officer and chief financial officer (or the equivalents 
thereof) of each TARP recipient shall provide a written cer-
tification of compliance by the TARP recipient with the 
requirements of this title— 
(1) in the case of a TARP recipient, the securi-
ties of which are publicly traded, to the Securities 
and Exchange Commission, together with annual fil-
ings required under the securities laws; and 
(2) in the case of a TARP recipient that is not 
a publicly traded company, to the Secretary. 
SEC. 6003. BOARD COMPENSATION COMMITTEE. 
(a) ESTABLISHMENT
OF BOARD REQUIRED.—Each 
TARP recipient shall establish a Board Compensation 
Committee, comprised entirely of independent directors, for 
the purpose of reviewing employee compensation plans. 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01413
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1414 
HR 1 PP 
(b) MEETINGS.—The Board Compensation Committee 
of each TARP recipient shall meet at least semiannually 
to discuss and evaluate employee compensation plans in 
light of an assessment of any risk posed to the TARP recipi-
ent from such plans. 
SEC. 6004. LIMITATION ON LUXURY EXPENDITURES. 
(a) POLICY REQUIRED.—The board of directors of any 
TARP recipient shall have in place a company-wide policy 
regarding excessive or luxury expenditures, as identified by 
the Secretary, which may include excessive expenditures 
on— 
(1) entertainment or events; 
(2) office and facility renovations; 
(3) aviation or other transportation services; or 
(4) other activities or events that are not reason-
able expenditures for conferences, staff development, 
reasonable performance incentives, or other similar 
measures conducted in the normal course of the busi-
ness operations of the TARP recipient. 
SEC. 6005. SHAREHOLDER APPROVAL OF EXECUTIVE COM-
PENSATION. 
(a) ANNUAL SHAREHOLDER APPROVAL OF EXECUTIVE 
COMPENSATION.—Any proxy or consent or authorization 
for an annual or other meeting of the shareholders of any 
TARP recipient during the period in which any obligation 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01414
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1415 
HR 1 PP 
arising from financial assistance provided under the TARP 
remains outstanding shall permit a separate shareholder 
vote to approve the compensation of executives, as disclosed 
pursuant to the compensation disclosure rules of the Com-
mission (which disclosure shall include the compensation 
discussion and analysis, the compensation tables, and any 
related material). 
(b) NONBINDING VOTE.—A shareholder vote described 
in subsection (a) shall not be binding on the board of direc-
tors of a TARP recipient, and may not be construed as over-
ruling a decision by such board, nor to create or imply any 
additional fiduciary duty by such board, nor shall such vote 
be construed to restrict or limit the ability of shareholders 
to make proposals for inclusion in proxy materials related 
to executive compensation. 
(c) DEADLINE FOR RULEMAKING.—Not later than 1 
year after the date of enactment of this Act, the Commission 
shall issue any final rules and regulations required by this 
section. 
SEC. 6006. REVIEW OF PRIOR PAYMENTS TO EXECUTIVES. 
(a) IN GENERAL.—The Secretary shall review bonuses, 
retention awards, and other compensation paid to employ-
ees of each entity receiving TARP assistance before the date 
of enactment of this Act to determine whether any such pay-
ments were excessive, inconsistent with the purposes of this 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01415
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1416 
HR 1 PP 
Act or the TARP, or otherwise contrary to the public inter-
est. 
(b) NEGOTIATIONS FOR REIMBURSEMENT.—If the Sec-
retary makes a determination described in subsection (a), 
the Secretary shall seek to negotiate with the TARP recipi-
ent and the subject employee for appropriate reimburse-
ments to the Federal Government with respect to compensa-
tion or bonuses. 
Subtitle B—Limits on Executive 
Compensation 
SEC. 6011. SHORT TITLE. 
This subtitle may be cited as the ‘‘Cap Executive Offi-
cer Pay Act of 2009’’. 
SEC. 6012. LIMIT ON EXECUTIVE COMPENSATION. 
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law or agreement to the contrary, no person who 
is an officer, director, executive, or other employee of a fi-
nancial institution or other entity that receives or has re-
ceived funds under the Troubled Asset Relief Program (or 
‘‘TARP’’), established under section 101 of the Emergency 
Economic Stabilization Act of 2008, may receive annual 
compensation in excess of the amount of compensation paid 
to the President of the United States. 
(b) DURATION.—The limitation in subsection (a) shall 
be a condition of the receipt of assistance under the TARP, 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01416
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1417 
HR 1 PP 
and of any modification to such assistance that was re-
ceived on or before the date of enactment of this Act, and 
shall remain in effect with respect to each financial institu-
tion or other entity that receives such assistance or modi-
fication for the duration of the assistance or obligation pro-
vided under the TARP. 
SEC. 6013. RULEMAKING AUTHORITY. 
The Secretary shall expeditiously issue such rules as 
are necessary to carry out this subtitle, including with re-
spect to reimbursement of compensation amounts, as appro-
priate. 
SEC. 6014. COMPENSATION. 
As used in this subtitle, the term ‘‘compensation’’ in-
cludes wages, salary, deferred compensation, retirement 
contributions, options, bonuses, property, and any other 
form of compensation or bonus that the Secretary of the 
Treasury determines is appropriate. 
Subtitle C—Excessive Bonuses 
SEC. 6021. TREATMENT OF EXCESSIVE BONUSES BY TARP 
RECIPIENTS. 
(a) IN GENERAL.—If, before the date of enactment of 
this Act, the preferred stock of a financial institution was 
purchased by the Government using funds provided under 
the Troubled Asset Relief Program established pursuant to 
the Emergency Economic Stabilization Act of 2008, then, 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01417
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1418 
HR 1 PP 
notwithstanding any otherwise applicable restriction on the 
redeemability of such preferred stock, such financial institu-
tion shall redeem an amount of such preferred stock equal 
to the aggregate amount of all excessive bonuses paid or 
payable to all covered individuals. 
(b) TIMING.—Each financial institution described in 
subsection (a) shall comply with the requirements of sub-
section (a)— 
(1) not later than 120 days after the date of en-
actment of this Act, with respect to excessive bonuses 
(or portions thereof) paid before the date of enactment 
of this Act; and 
(2) not later than the day before an excessive 
bonus (or portion thereof) is paid, with respect to any 
excessive bonus (or portion thereof) paid on or after 
the date of enactment of this Act. 
(c) DEFINITIONS.—As used in this section, the fol-
lowing definitions shall apply: 
(1) EXCESSIVE BONUS.— 
(A) IN
GENERAL.—The term ‘‘excessive 
bonus’’ means the portion of the applicable bonus 
payments made to a covered individual in excess 
of $100,000. 
(B) APPLICABLE BONUS PAYMENTS.— 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01418
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1419 
HR 1 PP 
(i) IN GENERAL.—The term ‘‘applica-
ble bonus payment’’ means any bonus pay-
ment to a covered individual— 
(I) which is paid or payable by 
reason of services performed by such 
individual in a taxable year of the fi-
nancial institution (or any member of 
a controlled group described in sub-
paragraph (D)) ending in 2008, and 
(II) the amount of which was first 
communicated to such individual dur-
ing the period beginning on January 
1, 2008, and ending January 31, 2009, 
or was based on a resolution of the 
board of directors of such institution 
that was adopted before the end of such 
taxable year. 
(ii) CERTAIN
PAYMENTS
AND
CONDI-
TIONS
DISREGARDED.—In 
determining 
whether a bonus payment is described in 
clause (i)(I)— 
(I) a bonus payment that relates 
to services performed in any taxable 
year before the taxable year described 
in such clause and that is wholly or 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01419
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1420 
HR 1 PP 
partially contingent on the perform-
ance of services in the taxable year so 
described shall be disregarded, and 
(II) any condition on a bonus 
payment for services performed in the 
taxable year so described that the em-
ployee perform services in taxable 
years after the taxable year so de-
scribed shall be disregarded. 
(C) BONUS
PAYMENT.—The term ‘‘bonus 
payment’’ means any payment which— 
(i) is a discretionary payment to a 
covered individual by a financial institu-
tion (or any member of a controlled group 
described in subparagraph (D)) for services 
rendered, 
(ii) is in addition to any amount pay-
able to such individual for services per-
formed by such individual at a regular 
hourly, daily, weekly, monthly, or similar 
periodic rate, and 
(iii) is paid or payable in cash or 
other property other than— 
(I) stock in such institution or 
member, or 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01420
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1421 
HR 1 PP 
(II) an interest in a troubled asset 
(within the meaning of the Emergency 
Economic Stabilization Act of 2008) 
held directly or indirectly by such in-
stitution or member. 
Such term does not include payments to an em-
ployee as commissions, welfare and fringe bene-
fits, or expense reimbursements. 
(D) COVERED INDIVIDUAL.—The term ‘‘cov-
ered individual’’ means, with respect to any fi-
nancial institution, any director or officer or 
other employee of such financial institution or of 
any member of a controlled group of corpora-
tions (within the meaning of section 52(a) of the 
Internal Revenue Code of 1986) that includes 
such financial institution. 
(2) FINANCIAL INSTITUTION.—The term ‘‘finan-
cial institution’’ has the same meaning as in section 
3 of the Emergency Economic Stabilization Act of 
2008 (12 U.S.C. 5252). 
(d) EXCISE TAX ON TARP COMPANIES THAT FAIL TO 
REDEEM CERTAIN SECURITIES FROM UNITED STATES.— 
(1) IN GENERAL.—Chapter 46 of the Internal 
Revenue Code of 1986 (relating to excise tax on gold-
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01421
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1422 
HR 1 PP 
en parachute payments) is amended by adding at the 
end the following new section: 
‘‘SEC. 4999A. FAILURE TO REDEEM CERTAIN SECURITIES 
FROM UNITED STATES. 
‘‘(a) IMPOSITION OF TAX.—There is hereby imposed a 
tax on any financial institution which— 
‘‘(1) is required to redeem an amount of its pre-
ferred stock from the United States pursuant to sec-
tion 1903(a) of the American Recovery and Reinvest-
ment Tax Act of 2009, and 
‘‘(2) fails to redeem all or any portion of such 
amount within the period prescribed for such redemp-
tion. 
‘‘(b) AMOUNT OF TAX.—The amount of the tax im-
posed by subsection (a) shall be equal to 35 percent of the 
amount which the financial institution failed to redeem 
within the time prescribed under 1903(b) of the American 
Recovery and Reinvestment Tax Act of 2009. 
‘‘(c) ADMINISTRATIVE PROVISIONS.— 
‘‘(1) IN GENERAL.—For purposes of subtitle F, 
any tax imposed by this section shall be treated as a 
tax imposed by subtitle A for the taxable year in 
which a deduction is allowed for any excessive bonus 
with respect to which the redemption described in 
subsection (a)(1) is required to be made. 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01422
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1423 
HR 1 PP 
‘‘(2) EXTENSION
OF
TIME.—The due date for 
payment of tax imposed by this section shall in no 
event be earlier than the 150th day following the date 
of the enactment of this section.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) The heading for chapter 46 of such Code 
are amended to read as follows: 
‘‘CHAPTER 46-TAXES ON CERTAIN EXCESSIVE REMUNERATION 
‘‘Sec. 4999. Golden parachute payments. 
‘‘Sec. 4999A. Failure to redeem certain securities from United States.’’. 
(B) The item relating to chapter 46 in the 
table of chapters for subtitle D of such Code is 
amended to read as follows: 
‘‘Chapter 46. Taxes on excessive remuneration.’’. 
(3) EFFECTIVE DATE.—The amendments made 
by this subsection shall apply to failures described in 
section 4999A(a)(2) of the Internal Revenue Code of 
1986 occurring after the date of the enactment of this 
Act. 
TITLE VII—FORECLOSURE 
PREVENTION 
TITLE VII—FORECLOSURE PREVENTION 
Sec. 7001. Mandatory loan modifications. 
SEC. 7001. MANDATORY LOAN MODIFICATIONS. 
Section 109(a) of the Emergency Economic Stabiliza-
tion Act of 2008 (12 U.S.C. 5219) is amended— 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01423
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1424 
HR 1 PP 
(1) by striking the last sentence; 
(2) by striking ‘‘To the extent’’ and inserting the 
following: 
‘‘(1) IN GENERAL.—To the extent’’; and 
(3) by adding at the end the following: 
‘‘(2) LOAN MODIFICATIONS REQUIRED.— 
‘‘(A) IN GENERAL.—In addition to actions 
required under paragraph (1), the Secretary 
shall, not later than 15 days after the date of en-
actment of this paragraph, develop and imple-
ment a plan to facilitate loan modifications to 
prevent avoidable mortgage loan foreclosures. 
‘‘(B) FUNDING.—Of amounts made avail-
able under section 115 and not otherwise obli-
gated, not less than $50,000,000,000, shall be 
made available to the Secretary for purposes of 
carrying out the mortgage loan modification 
plan required to be developed and implemented 
under this paragraph. 
‘‘(C) CRITERIA.—The loan modification 
plan required by this paragraph may incor-
porate the use of— 
‘‘(i) loan guarantees and credit en-
hancements; 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01424
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1425 
HR 1 PP 
‘‘(ii) the reduction of loan principal 
amounts and interest rates; 
‘‘(iii) extension of mortgage loan terms; 
and 
‘‘(iv) any other similar mechanisms or 
combinations thereof, as determined appro-
priate by the Secretary. 
‘‘(D) DESIGNATION AUTHORITY.— 
‘‘(i) FDIC.—The Secretary may des-
ignate the Corporation, on a reimbursable 
basis, to carry out the loan modification 
plan developed under this paragraph. 
‘‘(ii) 
CONTRACTING
AUTHORITY.—If 
designated under clause (i), the Corporation 
may use its contracting authority under 
section 9 of the Federal Deposit Insurance 
Act. 
‘‘(E) CONSULTATION REQUIRED.—In devel-
oping the loan modification plan under this 
paragraph, the Secretary shall consult with the 
Chairperson of the Board of Directors of the Cor-
poration, the Board, and the Secretary of Hous-
ing and Urban Development. 
‘‘(F) REPORTS
TO
CONGRESS.—The Sec-
retary shall provide to the Committee on Bank-
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01425
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1426 
HR 1 PP 
ing, Housing, and Urban Affairs of the Senate 
and the Committee on Financial Services of the 
House of Representatives— 
‘‘(i) upon development of the plan re-
quired by this paragraph, a report describ-
ing such plan; and 
‘‘(ii) a monthly report on the number 
and types of loan modifications occurring 
during the reporting period, and the per-
formance of the loan modification plan 
overall.’’. 
TITLE VIII—FORECLOSURE 
MITIGATION 
TITLE VIII—FORECLOSURE MITIGATION 
Sec. 8001. Short Title. 
Sec. 8002. Definitions. 
Sec. 8003. Payments to eligible servicers authorized. 
Sec. 8004. Authorization of appropriations. 
Sec. 8005. Sunset of authority. 
SEC. 8001. SHORT TITLE. 
This title may be cited as the ‘‘Help Families Keep 
Their Homes Act of 2009’’. 
SEC. 8002. DEFINITIONS. 
For purposes of this title— 
(1) the term ‘‘securitized mortgages’’ means resi-
dential mortgages that have been pooled by a 
securitization vehicle; 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01426
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1427 
HR 1 PP 
(2) the term ‘‘securitization vehicle’’ means a 
trust, corporation, partnership, limited liability enti-
ty, special purpose entity, or other structure that— 
(A) is the issuer, or is created by the issuer, 
of mortgage pass-through certificates, participa-
tion certificates, mortgage-backed securities, or 
other similar securities backed by a pool of assets 
that includes residential mortgage loans; 
(B) holds all of the mortgage loans which 
are the basis for any vehicle described in sub-
paragraph (A); and 
(C) has not issued securities that are guar-
anteed by the Federal National Mortgage Asso-
ciation, the Federal Home Loan Mortgage Cor-
poration, or the Government National Mortgage 
Association; 
(3) the term ‘‘servicer’’ means a servicer of 
securitized mortgages; 
(4) the term ‘‘eligible servicer’’ means a servicer 
of pooled and securitized residential mortgages; 
(5) the term ‘‘eligible mortgage’’ means a resi-
dential mortgage, the principal amount of which did 
not exceed the conforming loan size limit that was in 
existence at the time of origination for a comparable 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01427
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1428 
HR 1 PP 
dwelling, as established by the Federal National Mort-
gage Association; 
(6) the term ‘‘Secretary’’ means the Secretary of 
the Treasury; 
(7) the term ‘‘effective term of the Act’’ means the 
period beginning on the effective date of this title and 
ending on December 31, 2011; 
(8) the term ‘‘incentive fee’’ means the monthly 
payment to eligible servicers, as determined under 
section 7003; and 
(9) the term ‘‘prepayment fee’’ means the pay-
ment to eligible servicers, as determined under section 
7003(b). 
SEC. 8003. PAYMENTS TO ELIGIBLE SERVICERS AUTHOR-
IZED. 
(a) AUTHORITY.—The Secretary is authorized to make 
payments to eligible servicers, subject to the terms and con-
ditions established under this title. 
(b) FEES PAID TO ELIGIBLE SERVICERS.— 
(1) IN GENERAL.—An eligible servicer may col-
lect reasonable incentive fee payments, as established 
by the Secretary, not to exceed $2,000 per loan. 
(2) CONSULTATION.—The fees permitted under 
this section shall be subject to standards established 
by the Secretary, in consultation with the Secretary 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01428
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1429 
HR 1 PP 
of Housing and Urban Development and the Chair-
man of the Board of Directors of the Federal Deposit 
Insurance Corporation, which standards shall— 
(A) include an evaluation of whether an eli-
gible mortgage is affordable for the remainder of 
its term; and 
(B) identify a reasonable fee to be paid to 
the servicer in the event that an eligible mortgage 
is prepaid. 
(3) FORM OF PAYMENT.—Fees permitted under 
this section may be paid in a lump sum or on a 
monthly basis. If paid on a monthly basis, the fee 
may only be remitted as long as the loan performs. 
(c) SAFE HARBOR.—Notwithstanding any other provi-
sion of law, and notwithstanding any investment contract 
between a servicer and a securitization vehicle, a servicer— 
(1) owes any duty to maximize the net present 
value of the pooled mortgages in the securitization ve-
hicle to all investors and parties having a direct or 
indirect interest in such vehicle, and not to any indi-
vidual party or group of parties; and 
(2) shall be deemed to act in the best interests of 
all such investors and parties if the servicer agrees to 
or implements a modification, workout, or other loss 
mitigation plan for a residential mortgage or a class 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01429
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1430 
HR 1 PP 
of residential mortgages that constitutes a part or all 
of the pooled mortgages in such securitization vehicle, 
if— 
(A) default on the payment of such mort-
gage has occurred or is reasonably foreseeable; 
(B) the property securing such mortgage is 
occupied by the mortgagor of such mortgage or 
the homeowner; and 
(C) the servicer reasonably and in good 
faith believes that the anticipated recovery on the 
principal outstanding obligation of the mortgage 
under the modification or workout plan exceeds, 
on a net present value basis, the anticipated re-
covery on the principal outstanding obligation of 
the mortgage through foreclosure; 
(3) shall not be obligated to repurchase loans 
from, 
or 
otherwise 
make 
payments 
to, 
the 
securitization vehicle on account of a modification, 
workout, or other loss mitigation plan that satisfies 
the conditions of paragraph (2); and 
(4) if it acts in a manner consistent with the du-
ties set forth in paragraphs (1) and (2), shall not be 
liable for entering into a modification or workout 
plan to any person— 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01430
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1431 
HR 1 PP 
(A) based on ownership by that person of a 
residential mortgage loan or any interest in a 
pool of residential mortgage loans, or in securi-
ties that distribute payments out of the prin-
cipal, interest, and other payments in loans in 
the pool; 
(B) who is obligated pursuant to a deriva-
tive instrument to make payments determined in 
reference to any loan or any interest referred to 
in subparagraph (A); or 
(C) that insures any loan or any interest 
referred to in subparagraph (A) under any pro-
vision of law or regulation of the United States 
or any State or political subdivision thereof. 
(d) REPORTING REQUIREMENTS.— 
(1) IN GENERAL.—Each servicer shall report reg-
ularly, not less frequently than monthly, to the Sec-
retary on the extent and scope of the loss mitigation 
activities of the mortgage owner. 
(2) CONTENT.—Each report required by this sub-
section shall include— 
(A) the number and percent of residential 
mortgage loans receiving loss mitigation that 
have become performing loans; 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01431
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1432 
HR 1 PP 
(B) the number and percent of residential 
mortgage loans receiving loss mitigation that 
have proceeded to foreclosure; 
(C) the total number of foreclosures initi-
ated during the reporting period; 
(D) data on loss mitigation activities, in-
cluding the performance of mitigated loans, 
disagreggated for each form of loss mitigation, 
which forms may include— 
(i) a waiver of any late payment 
charge, penalty interest, or any other fees or 
charges, or any combination thereof; 
(ii) the establishment of a repayment 
plan under which the homeowner resumes 
regularly scheduled payments and pays ad-
ditional amounts at scheduled intervals to 
cure the delinquency; 
(iii) forbearance under the loan that 
provides for a temporary reduction in or 
cessation of monthly payments, followed by 
a reamortization of the amounts due under 
the loan, including arrearage, and a new 
schedule of repayment amounts; 
(iv) waiver, modification, or variation 
of any material term of the loan, including 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01432
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1433 
HR 1 PP 
short-term, long-term, or life-of-loan modi-
fications that change the interest rate, for-
give or forbear with respect to the payment 
of principal or interest, or extend the final 
maturity date of the loan; 
(v) short refinancing of the loan con-
sisting of acceptance of payment from or on 
behalf of the homeowner of an amount less 
than the amount alleged to be due and 
owing under the loan, including principal, 
interest, and fees, in full satisfaction of the 
obligation under such loan and as part of 
a refinance transaction in which the prop-
erty is intended to remain the principal 
residence of the homeowner; 
(vi) acquisition of the property by the 
owner or servicer by deed in lieu of fore-
closure; 
(vii) short sale of the principal resi-
dence that is subject to the lien securing the 
loan; 
(viii) assumption of the obligation of 
the homeowner under the loan by a third 
party; 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01433
Fmt 6652
Sfmt 6203
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS
1434 
HR 1 PP 
(ix) cancellation or postponement of a 
foreclosure sale to allow the homeowner ad-
ditional time to sell the property; or 
(x) any other loss mitigation activity 
not covered; and 
(E) such other information as the Secretary 
determines to be relevant. 
(3) PUBLIC AVAILABILITY OF REPORTS.—After 
removing information that would compromise the pri-
vacy interests of mortgagors, the Secretary shall make 
public the reports required by this subsection and 
summary data. 
SEC. 8004. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated to the Sec-
retary, such sums as may be necessary to carry out this 
title. 
SEC. 8005. SUNSET OF AUTHORITY. 
The authority of the Secretary to provide assistance 
under this title shall terminate on December 31, 2011. 
Passed the House of Representatives January 28, 
2009. 
Attest: 
LORRAINE C. MILLER, 
Clerk. 
Passed the Senate February 10, 2009. 
Attest: 
NANCY ERICKSON, 
Secretary. 
VerDate Nov 24 2008 
23:49 Feb 10, 2009
Jkt 079200
PO 00000
Frm 01434
Fmt 6652
Sfmt 6201
E:\BILLS\H1.PP
H1
rfrederick on PROD1PC67 with BILLS