H. R. 1424 
One Hundred Tenth Congress 
of the 
United States of America 
AT THE SECOND SESSION 
Begun and held at the City of Washington on Thursday, 
the third day of January, two thousand and eight 
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 produc-
tion and conservation, to extend certain expiring provisions, to provide individual 
income tax relief, and for other purposes. 
Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, 
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 tax-
payers. 
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.
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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 res-
idence 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 Com-
mittee on Ways and Means, the Committee on the Budget, 
and the Committee on Appropriations of the House of Rep-
resentatives. 
(2) BOARD.—The term ‘‘Board’’ means the Board of Gov-
ernors 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 Fed-
eral Deposit Insurance Corporation. 
(5) FINANCIAL INSTITUTION.—The term ‘‘financial institu-
tion’’ means any institution, including, but not limited to, any
H. R. 1424—3 
bank, savings association, credit union, security broker or 
dealer, or insurance company, established and regulated under 
the laws of the United States or any State, territory, or posses-
sion of the United States, the District of Columbia, Common-
wealth 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 secu-
rities, 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 Gov-
ernors of the Federal Reserve System, determines the pur-
chase 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 condi-
tions 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.—
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(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 sec-
tion, 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 Adminis-
tration Board, and the Secretary of Housing and Urban Develop-
ment. 
(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 sec-
tion, 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.—
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(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 enact-
ment of this Act, the Secretary shall report to the appropriate 
committees of Congress on the program established under sub-
section (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 Sec-
retary 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 meth-
odology 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 pre-
mium is consistent with paragraph (3). 
(3) MINIMUM LEVEL.—The premiums referred to in para-
graph (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.
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(3) PAYMENTS FROM FUND.—The Secretary shall make pay-
ments from amounts deposited in the Fund to fulfill obligations 
of the guarantees provided to financial institutions under sub-
section (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 finan-
cial 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 pur-
chasing 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 
(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 Sta-
bility 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
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(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 Sec-
retary 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 responsibil-
ities described in subsection (a), the Financial Stability Oversight 
Board shall have the authority to ensure that the policies imple-
mented 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 Over-
sight 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 Congres-
sional Oversight Panel established under section 125, not less fre-
quently 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 expira-
tion 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