(3) RATE OF INTEREST.—Except as provided in 
subsection (e), the loan shall bear interest at an an-
nual rate 0.20 percentage points higher than mar-
ketable obligations of the Treasury having a term to 
maturity of not less than 10 years and issued during 
the most recently completed month, as determined 
by the Secretary, or such higher rate as may be nec-
essary to ensure that the amounts of interest paid 
under such loans exceed the sum of the costs (as 
such term is defined in section 502 of the Federal 
Credit Reform Act of 1990 (2 U.S.C. 661a) of such 
loans, the administrative costs involved in carrying 
out a program under this title for such loans, and 
any incidental effects on governmental receipts and 
outlays. 
(4) USE.—Amounts from a loan under this title 
may be used only for the purposes that amounts 
made available, by a State, to the reinsurance pro-
gram may be used for under the program. 
(5) TERM.—Except as provided in subsections 
(d) and (e), the loan shall have a term to maturity 
of not less than 10 years. 
(f) AUTHORITY TO EXTEND TERM TO MATURITY.— 
The Secretary may extend the term to maturity of any 
liquidity loan made under subsection (d) or any cata-
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strophic loan made under subsection (e) (including any 
such loan made pursuant to subsection (g)) upon a deter-
mination that circumstances or conditions, meeting such 
requirements as the Secretary shall establish, are such 
that an extension is necessary. The requirements of the 
Secretary under this subsection shall set forth the cir-
cumstances and conditions under which such an extension 
shall be considered necessary in the cases of— 
(1) the occurrence of multiple covered events af-
fecting the area in which a reinsurance program is 
operating during a specific period of time; and 
(2) the area in which a reinsurance program is 
operating has suffered economic hardship or reces-
sion, resulting in decreased revenues available to the 
program. 
(g) ELIGIBILITY OF STATES WITHOUT QUALIFIED 
REINSURANCE PROGRAMS FOR CATASTROPHIC LOANS.— 
(1) AUTHORITY.—Subject to subsection (b), the 
Secretary may make a catastrophic loan under sub-
section (e) to State residual insurance market entity 
or to a State or regional reinsurance plan that is not 
a qualified reinsurance plan, but only if a public offi-
cial of the State, having legal authority to cosign a 
loan, cosigns for the loan along with the officers of 
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the State residual insurance market entity or State 
or regional reinsurance program, as applicable. 
(2) INTEREST RATE.—The loan shall bear in-
terest at an annual rate that exceeds the rate for a 
loan under subsection (c)(3) or (d)(3), as applicable, 
made to a qualified reinsurance plan. Such rate shall 
be determined in accordance with a schedule of in-
terest rates, which shall be established by the Sec-
retary and shall provide lower rates for loans to pro-
grams that comply with more of the requirements 
under section 301 for qualified reinsurance pro-
grams and higher rates for loans to programs that 
comply with fewer of such requirements. 
(3) TERM TO MATURITY.—The loan shall have 
a term to maturity that is shorter in duration than 
allowable for a loan under subsection (c)(5) or 
(d)(5), as applicable, made to a qualified reinsurance 
plan. Such term to maturity shall be determined in 
accordance with a schedule of such terms, which 
shall be established by the Secretary and shall pro-
vide longer terms to maturity for loans to programs 
that comply with more of the requirements under 
section 301(a) for qualified reinsurance programs 
and shorter terms to maturity for loans to programs 
that comply with fewer of such requirements. 
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(4) TERMINATION OF LENDING AUTHORITY.— 
The Secretary may not make any loan under this 
subsection after the expiration of the 5-year period 
that begins on the date of the enactment of this Act. 
SEC. 203. REPORTS. 
The Secretary shall submit a report to the President 
and the Congress annually that identifies and describes 
any loans made under this title during such year and any 
repayments during such year of loans made under this 
title, and describes actions taken to ensure accountability 
of loan funds. The Secretary shall provide for regular au-
dits to be conducted for each loan made under this title 
and shall make the reports on such audits publicly avail-
able. 
SEC. 204. FUNDING. 
(a) PROGRAM FEE.— 
(1) IN GENERAL.—The Secretary may establish 
and collect, from qualified reinsurance programs 
that are so precertified pursuant to section 301(b), 
a reasonable fee, as may be necessary to offset the 
expenses of the Secretary in connection with car-
rying out the responsibilities of the Secretary under 
this title, including— 
(A) costs of developing, implementing, and 
carrying out the program under this title; and 
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(B) costs of providing for precertification 
pursuant to section 301(b) of State and re-
gional reinsurance programs as a qualified rein-
surance program. 
(2) ADJUSTMENT.—The Secretary may, from 
time to time, adjust the fee under paragraph (1) as 
appropriate based on expenses of the Secretary re-
ferred to in such paragraph. 
(3) USE.—Any fees collected pursuant to this 
subsection shall be credited as offsetting collections 
of the Department of the Treasury and shall be 
available to the Secretary only for expenses referred 
to in paragraph (1). 
(b) STARTUP COSTS.—There is authorized to be ap-
propriated to the Secretary of the Treasury for each of 
fiscal years 2008 through 2012 $5,000,000 for adminis-
trative costs of carrying out this title. 
(c) COSTS OF LOANS; ADMINISTRATIVE COSTS.—To 
the extent that amounts of negative credit subsidy are re-
ceived by the Secretary in any fiscal year pursuant to 
loans made under this title, such amounts shall be avail-
able for costs (as such term is defined in section 502 of 
the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) 
of such loans and for costs of carrying out the program 
under this title for such loans. 
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