I 
110TH CONGRESS 
2D SESSION 
H. R. 7223 
To suspend the capital gains tax, schedule the government-sponsored enter-
prises for privatization, repeal the Humphrey-Hawkins Full Employment 
Act, and suspend mark-to-market accounting requirements, and for other 
purposes. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 29, 2008 
Mr. HENSARLING
(for himself, Mr. PEARCE, Mrs. BLACKBURN, Mr. 
GOHMERT, Mr. BRADY of Texas, Mr. DOOLITTLE, Mr. GINGREY, Mr. 
JORDAN of Ohio, Mrs. BACHMANN, Mr. WESTMORELAND, Mr. MCCAUL 
of Texas, Mrs. SCHMIDT, Mr. SESSIONS, Mr. CONAWAY, Mr. GARRETT 
of New Jersey, Mr. FRANKS of Arizona, Mr. BURTON of Indiana, Mr. 
FLAKE, Mr. ADERHOLT, Mr. PRICE of Georgia, Mr. LAMBORN, Mr. 
BISHOP of Utah, Mr. DAVID DAVIS of Tennessee, Mr. BROUN of Georgia, 
Mr. CULBERSON, Mr. DEAL of Georgia, Mrs. MYRICK, Mr. KUHL of New 
York, Ms. FOXX, Mr. MCCOTTER, Mr. MANZULLO, Mr. MARCHANT, Mr. 
CARTER, Mr. BARRETT of South Carolina, Mr. PITTS, Mr. THORNBERRY, 
Mr. WILSON of South Carolina, Mr. BARTLETT of Maryland, Mr. RADAN-
OVICH, Mr. PENCE, Mr. FEENEY, Mr. KINGSTON, Mr. SULLIVAN, Mrs. 
MUSGRAVE, Mr. MCHENRY, Mr. AKIN, Mr. SAM JOHNSON of Texas, Mr. 
LINDER, Mr. REHBERG, Mr. GOODLATTE, and Mr. SCALISE) introduced 
the following bill; which was referred to the Committee on Financial Serv-
ices, and in addition to the Committees on Ways and Means, the Budget, 
Education and Labor, and Rules, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions 
as fall within the jurisdiction of the committee concerned 
A BILL 
To suspend the capital gains tax, schedule the government- 
sponsored enterprises for privatization, repeal the Hum-
phrey-Hawkins Full Employment Act, and suspend 
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mark-to-market accounting requirements, and for other 
purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 
SHORT TITLE.—This Act may be cited as the ‘‘Free 
Market Protection Act of 2008’’. 
TITLE 
I—PRIVATIZATION 
OF 
GOVERNMENT-SPONSORED 
ENTERPRISES 
SEC. 101. SHORT TITLE. 
This title may be cited as the ‘‘Government-Spon-
sored Enterprises Free Market Reform Act of 2008’’. 
SEC. 102. DEFINITIONS. 
For purposes of this title, the following definitions 
shall apply: 
(1) CHARTER.—The term ‘‘charter’’ means— 
(A) with respect to the Federal National 
Mortgage Association, the Federal National 
Mortgage Association Charter Act (12 U.S.C. 
1716 et seq.); and 
(B) with respect to the Federal Home 
Loan Mortgage Corporation, the Federal Home 
Loan Mortgage Corporation Act (12 U.S.C. 
1451 et seq.). 
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(2) DIRECTOR.—The term ‘‘Director’’ means 
the Director of the Federal Housing Finance Agen-
cy. 
(3) 
ENTERPRISE.—The 
term 
‘‘enterprise’’ 
means— 
(A) the Federal National Mortgage Asso-
ciation; and 
(B) the Federal Home Loan Mortgage 
Corporation. 
(4) 
GUARANTEE.—The 
term 
‘‘guarantee’’ 
means, with respect to an enterprise, the credit sup-
port of the enterprise that is provided by the Fed-
eral Government through its charter as a govern-
ment-sponsored enterprise. 
SEC. 103. TERMINATION OF CURRENT CONSERVATORSHIP. 
(a) IN GENERAL.—Upon the expiration of the period 
referred to in subsection (b), the Director of the Federal 
Housing Finance Agency shall determine, with respect to 
each enterprise, if the enterprise is financially viable at 
that time and— 
(1) if the Director determines that the enter-
prise is financially viable, immediately take all ac-
tions necessary to terminate the conservatorship for 
each of the enterprises; or 
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(2) if the Director determines that the enter-
prise is not financially viable, immediately appoint 
the Federal Housing Finance Agency as receiver 
under section 1367 of the Federal Housing Enter-
prises Financial Safety and Soundness Act of 1992 
and carry out such receivership under the authority 
of such section. 
(b) TIMING.—The period referred to in this sub-
section is, with respect to an enterprise— 
(1) except as provided in paragraph (2), the 24- 
month beginning upon the date of the enactment of 
this Act; or 
(2) if the Director determines before the expira-
tion of the period referred to in paragraph (1) that 
the financial markets would be adversely affected 
without the extension of such period under this 
paragraph with respect to that enterprise, the 30- 
month period beginning upon the date of the enact-
ment of this Act. 
(c) FINANCIAL VIABILITY.—The Director may not 
determine that an enterprise is financially viable for pur-
poses of subsection (a) if the Director determines that any 
of the conditions for receivership set forth in paragraph 
(3) or (4) of section 1367(a) of the Federal Housing En-
terprises Financial Safety and Soundness Act of 1992 (12 
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U.S.C. 4617(a)) exists at the time with respect to the en-
terprise. 
SEC. 104. LIMITATION OF ENTERPRISE AUTHORITY UPON 
EMERGENCE FROM CONSERVATORSHIP. 
(a) REVISED AUTHORITY.—Upon the expiration of 
the period referred to in section 103(b), if the Director 
makes the determination under section 103(a)(1), the fol-
lowing provisions shall take effect: 
(1) PORTFOLIO
LIMITATIONS.—Subtitle B of 
title XIII of the Housing and Community Develop-
ment Act of 1992 (12 U.S.C. 4611 et seq.) is 
amended by adding at the end the following new sec-
tion: 
‘‘SEC. 1369E. RESTRICTION ON MORTGAGE ASSETS OF EN-
TERPRISES. 
‘‘(a) RESTRICTION.—No enterprise shall own, as of 
any applicable date in this subsection or thereafter, mort-
gage assets in excess of— 
‘‘(1) upon the expiration of the period referred 
to in section 103(b) of the Government-Sponsored 
Enterprises Free Market Reform Act of 2008, 
$850,000,000,000; or 
‘‘(2) on December 31 of each year thereafter, 
80.0 percent of the aggregate amount of mortgage 
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assets of the enterprise as of December 31 of the 
immediately preceding calendar year; 
except that in no event shall an enterprise be required 
under this section to own less than $250,000,000,000 in 
mortgage assets. 
‘‘(b) DEFINITION OF MORTGAGE ASSETS.—For pur-
poses of this section, the term ‘mortgage assets’ means, 
with respect to an enterprise, assets of such enterprise 
consisting of mortgages, mortgage loans, mortgage-related 
securities, participation certificates, mortgage-backed 
commercial paper, obligations of real estate mortgage in-
vestment conduits and similar assets, in each case to the 
extent such assets would appear on the balance sheet of 
such enterprise in accordance with generally accepted ac-
counting principles in effect in the United States as of 
September 7, 2008 (as set forth in the opinions and pro-
nouncements of the Accounting Principles Board and the 
American Institute of Certified Public Accountants and 
statements and pronouncements of the Financial Account-
ing Standards Board from time to time; and without giv-
ing any effect to any change that may be made after Sep-
tember 7, 2008, in respect of Statement of Financial Ac-
counting Standards No. 140 or any similar accounting 
standard).’’. 
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such the enterprises and by using such other meth-
ods as the Director deems appropriate. 
‘‘(2) AUTHORITY.—The Director shall have the 
authority to establish such minimum level of capital 
for an enterprise in excess of the level specified 
under subsection (a) as the Director, in the Direc-
tor’s discretion, deems to be necessary or appro-
priate in light of the particular circumstances of the 
enterprise. 
‘‘(h) FAILURE TO MAINTAIN REVISED MINIMUM 
CAPITAL LEVELS.— 
‘‘(1) UNSAFE AND UNSOUND PRACTICE OR CON-
DITION.—Failure of a enterprise to maintain capital 
at or above its minimum level as established pursu-
ant to subsection (c) of this section may be deemed 
by the Director, in his discretion, to constitute an 
unsafe and unsound practice or condition within the 
meaning of this title. 
‘‘(2) 
DIRECTIVE
TO
ACHIEVE
CAPITAL 
LEVEL.— 
‘‘(A) AUTHORITY.—In addition to, or in 
lieu of, any other action authorized by law, in-
cluding paragraph (1), the Director may issue 
a directive to an enterprise that fails to main-
tain capital at or above its required level as es-
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tablished pursuant to subsection (c) of this sec-
tion. 
‘‘(B) PLAN.—Such directive may require 
the enterprise to submit and adhere to a plan 
acceptable to the Director describing the means 
and timing by which the enterprise shall achieve 
its required capital level. 
‘‘(C) ENFORCEMENT.—Any such directive 
issued pursuant to this paragraph, including 
plans submitted pursuant thereto, shall be en-
forceable under the provisions of subtitle C of 
this title to the same extent as an effective and 
outstanding order issued pursuant to subtitle C 
of this title which has become final. 
‘‘(3) ADHERENCE TO PLAN.— 
‘‘(A) CONSIDERATION.—The Director may 
consider such enterprise’s progress in adhering 
to any plan required under this subsection 
whenever such enterprise seeks the requisite ap-
proval of the Director for any proposal which 
would divert earnings, diminish capital, or oth-
erwise impede such enterprise’s progress in 
achieving its minimum capital level. 
‘‘(B) DENIAL.—The Director may deny 
such approval where it determines that such 
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proposal would adversely affect the ability of 
the enterprise to comply with such plan.’’. 
(3) REPEAL
OF
INCREASES
TO
CONFORMING 
LOAN LIMITS.— 
(A) REPEAL OF TEMPORARY INCREASE IN 
ECONOMIC STIMULUS ACT.—Section 201 of the 
Economic Stimulus Act of 2008 (Public Law 
110–185) is hereby repealed. 
(B) REPEAL OF GENERAL LIMIT AND PER-
MANENT
HIGH-COST
AREA
INCREASE.—Para-
graph (2) of section 302(b) of the Federal Na-
tional Mortgage Association Charter Act (12 
U.S.C. 1717(b)(2)) and paragraph (2) of sec-
tion 305(a) of the Federal Home Loan Mort-
gage Corporation Act (12 U.S.C. 1454(a)(2)) 
are each amended to read as such sections were 
in effect immediately before the enactment of 
the Housing and Economic Recovery Act of 
2008 (Public Law 110–289). 
(C) REPEAL
OF
NEW
HOUSING
PRICE 
INDEX.—Section 1322 of the Federal Housing 
Enterprises Financial Safety and Soundness 
Act of 1992, as added by section 1124(d) of the 
Housing and Economic Recovery Act of 2008 
(Public Law 110–289), is hereby repealed. 
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(D) REPEAL.—Section 1124 of the Hous-
ing and Economic Recovery Act of 2008 (Public 
Law 110–289) is hereby repealed. 
(E) ESTABLISHMENT
OF
CONFORMING 
LOAN LIMIT.—For the year in which the expira-
tion of the period referred to in section 103(b) 
of this title occurs, the limitations governing the 
maximum original principal obligation of con-
ventional mortgages that may be purchased by 
the Federal National Mortgage Association and 
the Federal Home Loan Mortgage Corporation, 
referred to in section 302(b)(2) of the Federal 
National Mortgage Association Charter Act (12 
U.S.C. 1717(b)(2)) and section 305(a)(2) of the 
Federal Home Loan Mortgage Corporation Act 
(12 U.S.C. 1454(a)(2)), respectively, shall be 
considered to be— 
(i) $417,000 for a mortgage secured 
by a single-family residence, 
(ii) $533,850 for a mortgage secured 
by a 2-family residence, 
(iii) $645,300 for a mortgage secured 
by a 3-family residence, and 
(iv) $801,950 for a mortgage secured 
by a 4-family residence, 
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and such limits shall be adjusted effective each 
January 1 thereafter in accordance with such 
sections 302(b)(2) and 305(a)(2). 
(F) PROHIBITION OF PURCHASE OF MORT-
GAGES
EXCEEDING
MEDIAN
AREA
HOME 
PRICE.— 
(i) FANNIE MAE.—Section 302(b)(2) 
of the Federal National Mortgage Associa-
tion Charter Act (12 U.S.C. 1717(b)(2)) is 
amended by adding at the end the fol-
lowing new sentence: ‘‘Notwithstanding 
any other provision of this title, the cor-
poration may not purchase any mortgage 
for a property having a principal obligation 
that exceeds the median home price, for 
properties of the same size, for the area in 
which such property subject to the mort-
gage is located.’’. 
(ii) 
FREDDIE
MAC.—Section 
305(a)(2) of the Federal Home Loan 
Mortgage Corporation Act (12 U.S.C. 
1454(a)(2)) is amended by adding at the 
end the following new sentence: ‘‘Notwith-
standing any other provision of this title, 
the Corporation may not purchase any 
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mortgage for a property having a principal 
obligation that exceeds the median home 
price, for properties of the same size, for 
the area in which such property subject to 
the mortgage is located.’’. 
(4) REQUIREMENT TO PAY STATE AND LOCAL 
TAXES.— 
(A) FANNIE MAE.—Paragraph (2) of sec-
tion 309(c) of the Federal National Mortgage 
Association 
Charter 
Act 
(12 
U.S.C. 
1723a(c)(2)) is amended— 
(i) by striking ‘‘shall be exempt from’’ 
and inserting ‘‘shall be subject to’’; and 
(ii) by striking ‘‘except that any’’ and 
inserting ‘‘and any’’. 
(B) FREDDIE MAC.—Section 303(e) of the 
Federal Home Loan Mortgage Corporation Act 
(12 U.S.C. 1452(e)) is amended— 
(i) by striking ‘‘shall be exempt from’’ 
and inserting ‘‘shall be subject to’’; and 
(ii) by striking ‘‘except that any’’ and 
inserting ‘‘and any’’. 
(5) REPEALS RELATING TO REGISTRATION OF 
SECURITIES.— 
(A) FANNIE MAE.— 
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