SEC. 108. STATE MATCHING FUNDS. 
(a) STATE PARTICIPATION IN THE CONSORTIUM.— 
States participating in the Consortium shall provide an 
aggregate amount of $10,000,000 toward the Consor-
tium’s operations per year. 
(b) INDIVIDUAL STATE SHARE.—The Board shall es-
tablish the contribution of individual participating States 
at a level that represents the comparable amount of risk 
that they are seeking to cede to the capital markets or 
by means of reinsurance contracts. 
SEC. 109. FEDERAL LIABILITY. 
The Federal Government shall bear no liabilities aris-
ing from the actions of the Consortium. 
SEC. 110. AUTHORIZATION OF APPROPRIATIONS. 
There are authorized to be appropriated to carry out 
this section $10,000,000 for each of fiscal years 2008 
through 2012. 
TITLE 
II—NATIONAL 
HOME-
OWNERS’ 
INSURANCE 
STA-
BILIZATION PROGRAM 
SEC. 201. ESTABLISHMENT. 
The Secretary of the Treasury shall carry out a pro-
gram under this title to make liquidity loans and cata-
strophic loans under section 202 to State and regional re-
insurance programs to ensure the solvency of such pro-
grams, to improve the availability and affordability of 
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homeowners’ insurance, and to spread the risk of cata-
strophic financial loss resulting from natural disasters and 
catastrophic events. 
SEC. 202. LIQUIDITY LOANS AND CATASTROPHIC LOANS 
FOR STATE AND REGIONAL REINSURANCE 
PROGRAMS. 
(a) CONTRACTS.—The Secretary may enter into a 
contract with a qualified reinsurance plan to carry out the 
purposes of this Act as the Secretary may deem appro-
priate. The contract shall include, at a minimum, the con-
ditions for loan eligibility set forth in this section. 
(b) CONDITIONS FOR LOAN ELIGIBILITY.—A loan 
under this section may be made only to a State or regional 
reinsurance program and only if— 
(1) the program cannot access capital at a cost 
lower than that provided in the private market, in-
cluding, catastrophe bonds and other securities sold 
through the facility created in title I of this Act, as 
determined by the Secretary, and a loan may be 
made to such a reinsurance program only to the ex-
tent that such program cannot access capital at such 
lower cost; 
(2) if the occurrence of a covered event has re-
sulted in insured losses in the geographic area cov-
ered by the program in excess of 150 percent of the 
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aggregate amount of direct written premium for 
homeowners’ insurance, for risks located in such ge-
ographic area, over the calendar year preceding such 
event; and 
(3)(A) the State or regional reinsurance pro-
gram is a qualified reinsurance program; or 
(B) the loan complies with the requirements 
under subsection (g). 
(c) MANDATORY ASSISTANCE FOR QUALIFIED REIN-
SURANCE PROGRAMS.—The Secretary shall— 
(1) upon the request of a qualified reinsurance 
program and subject to paragraphs (1) and (2) of 
subsection (b), make a loan under subsection (d) or 
(e) for such program in the amount requested by 
such program (subject to the limitations under sub-
sections (d)(2) and (e)(2), respectively); and 
(2) upon the request of a Plan described in sub-
section (g)(1) and subject to paragraphs (1) and (2) 
of subsection (b), make a loan under subsection (g) 
for such Plan in the amount requested by such Plan 
(subject to the limitations under subsection (e)(2)). 
(d) LIQUIDITY LOANS.—A loan under this subsection 
for a State or regional reinsurance program shall be sub-
ject to the following requirements: 
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(1) PRECONDITIONS.—The Secretary shall have 
determined that the reinsurance program— 
(A) has a capital liquidity shortage, in ac-
cordance with regulations that the Secretary 
shall establish; and 
(B) cannot access capital markets at effec-
tive rates of interest lower than those provided 
in paragraph (3). 
(2) AMOUNT.—The principal amount of the 
loan may not exceed the ceiling coverage level for the 
reinsurance program. 
(3) RATE OF INTEREST.—Except as provided in 
subsection (f), the loan shall bear interest at an an-
nual rate 3 percentage points higher than market-
able obligations of the Treasury having the same 
term to maturity as the loan 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 
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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 
(e) and (f), the loan shall have a term to maturity 
of not less than 5 years and not more than 10 years. 
(e) CATASTROPHIC LOANS.—A loan under this sub-
section for a State or regional reinsurance program shall 
be subject to the following requirements: 
(1) PRECONDITIONS.—The Secretary shall have 
determined that the reinsurance program has sus-
tained losses as a result of a covered event that ex-
ceed the ceiling coverage level for the qualified rein-
surance program, in accordance with regulations 
that the Secretary shall establish. 
(2) AMOUNT.—The principal amount of the 
loan made pursuant to a covered event referred to 
in paragraph (1) may not exceed the amount by 
which the losses sustained by the reinsurance pro-
gram as a result of such event exceed the ceiling 
coverage level for the program. 
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