E PL UR UM IB N U U S Congressional Record United States th of America PROCEEDINGS AND DEBATES OF THE 110 CONGRESS, SECOND SESSION

Vol. 154 WASHINGTON, THURSDAY, JUNE 19, 2008 No. 102 Senate The Senate met at 9:30 a.m. and was APPOINTMENT OF ACTING THE GUEST CHAPLAIN called to order by the Honorable MARK PRESIDENT PRO TEMPORE Mr. DODD. Mr. President, it is truly L. PRYOR, a Senator from the State of The PRESIDING OFFICER. The a privilege and pleasure this morning Arkansas. clerk will please read a communication to welcome to the Senate a remarkable to the Senate from the President pro individual who opened the Senate with PRAYER tempore (Mr. BYRD). a prayer this morning. He has lived an The assistant legislative clerk read equally remarkable life and today re- The PRESIDING OFFICER. Today’s the following letter: sides in the community of South- prayer will be offered by Rev. Ralph U.S. SENATE, ington, CT. Lord Roy of Southington, CT. PRESIDENT PRO TEMPORE, In the 80 years we have enjoyed the The guest Chaplain offered the fol- Washington, DC, June 19, 2008. fortune of having the Reverend Ralph lowing prayer: To the Senate: Lord Roy in our midst, he has been an Let us pray. Under the provisions of rule I, paragraph 3, author and columnist, an activist, a of the Standing Rules of the Senate, I hereby teacher, and a radio host, and, of Almighty God, creator of this mag- appoint the Honorable MARK L. PRYOR, a course, a pastor to some 12 different nificent universe and fount of all wis- Senator from the State of Arkansas, to per- churches and ministries in New York dom, we offer our thanks for life and form the duties of the Chair. and for some 36 years in Connecticut. liberty and for those many benefits ROBERT C. BYRD, At each stop along the way, he has that we too often take for granted. President pro tempore. spread the same message: one of justice Bless our beloved Nation that as one Mr. PRYOR thereupon assumed the and tolerance in the face of fear, re- people of many colors and creeds, we chair as Acting President pro tempore. sentment, anger, and prejudice. may dwell together in mutual respect f In 1961, as part of the Congress of Ra- and harmony. Be with fellow Ameri- RECOGNITION OF THE MAJORITY cial Equality, Reverend Roy was one of cans in distant places and especially LEADER the fabled ‘‘Freedom Fighters’’ who men and women serving our country The ACTING PRESIDENT pro tem- traveled to protest segregation policies overseas. Bless those around the world in the South, for which he was arrested who hunger and thirst, the sick and pore. The majority leader is recog- nized. in Tallahassee. sorrowful, and victims of natural disas- A year later, he led a prayer pilgrim- f ters, of prejudice and oppression. age to Albany, GA, at Martin Luther Guide this Senate, O Lord. Grant SCHEDULE King’s personal request. For his peace- that its Members and those who assist Mr. REID. Mr. President, I will yield ful protests there, praying for the them may be filled with prudence and in a brief minute to the distinguished cause of desegregation, Reverend Roy foresight as they confront the complex Senator from Connecticut so he can was also arrested. In leading the larg- challenges of our time. Bless all others say some words about the guest Chap- est group of clergy to be arrested in in high office, and let the light of free- lain and his thoughtful prayer this American history in Albany, GA, Rev- dom and the lamp of justice shine morning. erend Roy became the first Caucasian brightly here and around the globe. Following leader remarks—and it Methodist minister in our Nation to be Grant peace to our lives, to our homes, does not appear there will be any—the imprisoned for standing up for the civil to our communities, to our Nation, and Senate will resume consideration of rights of all Americans. The message to humankind everywhere. the motion to proceed to H.R. 6049, the he and his fellow clergy men and We ask this in Your Name. Amen. Renewable Energy and Job Creation women sent at that moment—some 75 Act, with Senators permitted to speak Jewish and Catholic laymen and cler- f for up to 10 minutes each, but we ex- ics, most of them White, standing pect to begin legislating on the housing peacefully in solidarity with Dr. Mar- tin Luther King on the sidewalk before PLEDGE OF ALLEGIANCE legislation today. Mr. President, what I would like to the Albany City Hall—reverberates to The Honorable MARK L. PRYOR led do is yield to the Senator from Con- this very day. It echoes in the books the Pledge of Allegiance, as follows: necticut so he can say some words and articles that Reverend Roy has I pledge allegiance to the Flag of the about our distinguished visiting guest penned on social and faith issues and in United States of America, and to the Repub- Chaplain. his powerful and personal accounts of lic for which it stands, one nation under God, The ACTING PRESIDENT pro tem- his experiences with the slain civil indivisible, with liberty and justice for all. pore. The Senator from Connecticut. rights leader. It echoes as well in his

∑ This ‘‘bullet’’ symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor.

S5771

.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00001 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5772 CONGRESSIONAL RECORD — SENATE June 19, 2008 radio shows and travels across the closures when I first announced the have been adopted overwhelmingly by world. And today, of course, it echoes level of foreclosures that were occur- this body with 84 votes on the first bill in the Halls of the Senate. ring. The numbers from May have just and 90 votes on the second. A remarkable 80 years, making a sig- come in. The numbers are now close to On the matter that will be a part of nificant contribution to the improve- 8,500, or 1,500 more than they were even this bill, which has not been considered ment and the betterment of our great 1 month ago. So we are now approach- by the full Chamber, it passed our country. So it is truly an honor to wel- ing 9,000 filings of foreclosures on a Banking Committee 19 to 2 back on come Reverend Roy from Southington, daily basis in our country. May 20. So we come to this day having CT, who has opened our Senate session In light of these numbers, I hope no spent a great deal of time working with this morning with his wonderful, one will suggest the problem is not a our colleagues, listening and working thoughtful prayer. We wish him and his serious and growing one. We have not with the Members of the other body, as family the very best, and we thank him even hit July 1 yet when, of course, we well as those who bring unique and spe- for his wonderful contributions to our realize the resets on some of these ad- cial expertise to these very com- country. justable rate mortgages will begin to plicated issues. That is what we hope f kick in; and as they do, we are warned in the coming days to be able to com- by those following this issue almost on plete, send our product to the other RESERVATION OF LEADER TIME an hourly basis that the tidal wave of body, and hope they will endorse and The ACTING PRESIDENT pro tem- foreclosures will increase in the com- support it, and then send the bill to the pore. Under the previous order, the ing months, not decrease. President for his signature. leadership time is reserved. Obviously, with 1.5 million people With that as background, let me f who have already lost their homes, we share a few thoughts about what are in are talking about a problem that is these bills. As I mentioned already, RENEWABLE ENERGY AND JOB now spreading to commercial lending, most of what we are talking about has CREATION ACT OF 2008—MOTION municipal financing, student loans, and been voted on overwhelmingly by the TO PROCEED even having global implications as well Members of this body. On April 10, the The ACTING PRESIDENT pro tem- for those who purchased these mort- Senate passed the Foreclosure Preven- pore. Under the previous order, the gage-backed securities. This is not con- tion Act of 2008, and passed it by an Senate will resume consideration of fined to our own country. These were overwhelming majority. At that time, I the motion to proceed to H.R. 6049, being purchased across the globe. So shared my view of the legislation, and which the clerk will report. the problem begins with the fore- that it did not quite live up to the The legislative clerk read as follows: closure crisis, and yet the effects of it title. I told this body we had more Motion to proceed to Calendar No. 767, H.R. have spread far beyond the individual work to do to prevent foreclosures in 6049, an act to amend the Internal Revenue home, which is obviously the heart of this country and to strengthen the Code of 1986 to provide incentives for energy most people’s dreams in our country. housing finance system before we could production and conservation, to extend cer- So the fact we were able to have our say we had lived up to the name of that tain expiring provisions, to provide indi- leadership, and Senator SHELBY will vidual income tax relief, and for other pur- bill. poses. obviously speak for himself, but both I am very happy to report this morn- of us, I can say with confidence, are ing that the Banking Committee of the Mr. DODD. Mr. President, I suggest very grateful to Senators REID and Senate went back and did that work, the absence of a quorum. MCCONNELL for making it possible for and today Senator SHELBY and I are re- The ACTING PRESIDENT pro tem- us to move forward on this legislation. porting back to the Senate the Housing pore. The clerk will call the roll. I will guarantee that if I were able to and Economic Recovery Act of 2008. The legislative clerk proceeded to write this bill all on my own, it would This legislation incorporates all of the call the roll. look different. And I promise that Sen- housing provisions of H.R. 3221 as it Mr. DODD. Mr. President, I ask unan- ator SHELBY would probably write a passed the Senate on April 10 by a vote imous consent that the order for the different bill himself. But we don’t live of 84 to 12. It also includes the HOPE quorum call be rescinded. in a world where we get to write these for Homeowners Act of 2008, which will The ACTING PRESIDENT pro tem- things on our own. We serve in a body help at least 400,000 families, we are pore. Without objection, it is so or- with 100 Members, and we have to work told, and maybe more, to save their dered. closely with others in the Chamber and homes from this fate of 8,427 fore- HOUSING AND ECONOMIC RECOVERY ACT OF 2008 the other body with 435 Members. We closure filings a day. We need to try to Mr. DODD. Mr. President, let me have a White House and an administra- put a break on that, if we can, and begin by thanking the majority leader, tion with which we have to deal. There spare what it does to individual home- Senator HARRY REID of Nevada; the Re- are also, obviously, private interests owners. publican leader, Senator MITCH MCCON- around the country, from consumer The bill creates a new, strong, inde- NELL of Kentucky; and the respective groups and lending institutions, all pendent regulator for the housing gov- Members of our two parties, but par- having a deep interest in what we are ernment-sponsored enterprises—the so- ticularly the leadership for their abil- trying to put together. So it is no easy called GSEs, Fannie Mae, Freddie Mac, ity to make it possible for us to move task to cobble together a piece of legis- and the 12 Federal home loan banks. It forward on this very important piece of lation that will allow us to deal with also establishes a new permanent fund housing legislation. We have been at this crisis, get us back on our feet that will help build affordable rental this for some time. again, restore some confidence and op- housing for low- and moderate-income Every Member in this Chamber, as timism among the American people so families. well as the American people, realize we can see capital begin to flow again, I will review these titles in more de- the seriousness of the problem we face and thus wring ourselves out of this tail momentarily, but first let me re- as a nation. We have a serious eco- foreclosure issue and begin to see our mind my colleagues why Senator SHEL- nomic crisis in the country, and the economy grow and prosper. BY and I have been working so hard on heart of that economic crisis is the That is what brings us to this very this issue for the past number of housing crisis. The heart of the hous- moment. I can’t begin to express my months and throughout this entire ing crisis is the foreclosure crisis. gratitude to Senator SHELBY, who is Congress. Quite simply, we are living Let me begin this discussion by not- the former chairman of this com- through the worst housing market ing that several months ago on two mittee, to the members on the Demo- since the Great Depression of the 1920s previous occasions we dealt with hous- cratic side of the Banking Committee, and 1930s. Here are the facts, Mr. Presi- ing legislation—which I will point out beginning with Senator TIM JOHNSON of dent. is a part of this larger package today— South Dakota, along with, of course, Residential construction in the and at that time we were having about the Republican members as well. On United States fell by over 30 percent in 7,100 foreclosures a day. At least that two previous occasions we have the first quarter of this year. Sales of was the number of filings of fore- brought forth pieces of legislation that existing homes fell by 13 percent over

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00002 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5773 the past year. And while the new data Robert Shiller, the widely respected years. The package is a good one. It is for April indicates that sales may have economist, predicted recently that one we think covers many of the finally picked up slightly, most ana- home prices will fall by 30 percent na- issues, if not most of them, with which lysts believe that pickup in home sales tionally. If that happens, the loss to we are grappling. occurred only because home prices American families will exceed $6 tril- Let me review the major provisions have continued to fall. They call this lion. That is more than half of our Na- included in this package. ‘‘price capitulation,’’ which means tion’s annual GDP. It would mean that First, FHA Modernization. FHA Mod- homeowners finally gave up and are the typical family of four would have ernization will help hundreds of thou- dropping prices precipitously at a great lost approximately $80,000 of wealth. sands of homeowners gain access to loss to their financial security. That is more than most American fam- safer, more affordable loans. FHA does The number of new homes that re- ilies earn in an entire year. not insure the kinds of risky, adjust- main unsold continues to rise, reaching The nationwide implications of this able rate mortgages that so many the highest number in over a quarter of crisis help explain why consumer senti- homeowners were steered into, to their a century. Adding to this number are ment is at historic lows. Americans’ great peril and eventual sorrow. I want the increasing number of foreclosed expectations for future economic to point out to my colleagues that the homes. growth are at the lowest levels in 35 only change from the FHA Moderniza- Foreclosures have hit a new all-time years, since the deep recession of the tion provisions passed in April is hat record, according to the Mortgage early 1970s. we have increased the maximum loan Banker’s Association—MBA. This data These negative views about our eco- limit to $625,000, a provision that will shows that almost one in every 11 nomic prospects are based on the real expand the reach of this crucial mort- homes with a mortgage in the country experiences of most Americans. The gage lifeline to a broader cross-section is in default or foreclosure, as of the Pew Center recently conducted a sur- of the country. end of March. That is the highest level vey on Americans’ views on not only Veterans housing provisions—a num- since the MBA began tracking fore- the economy as a whole, but on their ber of our colleagues included impor- closures in 1979. Foreclosure rates have personal well being. The Washington tant improvements to update the loan been growing at record levels for some Post characterized the Pew Center’s limits for VA loans; assist returning time and last year alone 1.5 million findings as: soldiers avoid rising mortgage rates American homes entered into fore- Offering the gloomiest assessment of eco- and foreclosure; and expand housing closure. nomic well-being in close to half a century, benefits to disabled veterans. During each and every day of May, a new survey has found that most Americans CDBG funds—the bill includes about more than 8,400 American families en- say they have not made progress over the $3.9 billion in emergency CDBG funds tered foreclosure and the projections past five years as their incomes have stag- directed to those communities most af- are that foreclosure rates will remain nated and they have increasingly borrowed fected by the foreclosure crisis. These at historic highs for the foreseeable fu- money to finance their lifestyles. resources will be used to buy foreclosed ture. In fact, the investment bank By almost any measure—by any homes at a discount, renovate them, Credit Suisse recently released a report measure, Americans are struggling and return them to the market. These in which they predict that 6.5 million more than at any time in recent mem- funds will help turn around neighbor- homes will fall into foreclosure over ory. Real median family income has hoods decimated by disinvestment by the next 5 years. They state: fallen this decade as the costs of gas, bringing in new capital to start re- The coming flood of new foreclosures could health care, and college tuition have building homes and communities. put 8.4 percent of total homeowners, or 12.7 risen at levels far outstripping any in- Counseling Funds—the bill also in- percent of homeowners with mortgages, out creases in paychecks. Just to keep pace cludes $150 million in additional funds of their homes. with these rising costs, Americans for housing counselors to help keep The scenario that they are describing have turned to borrowing from credit people out of foreclosure. There are is one in which one out of every 8 cards and their homes. But now, as the many Members who care about this American families with a mortgage crisis in our capital markets begins to and were involved and talked about it. would lose their homes. That is a threaten sources of liquidity for people, This language we have already adopt- chilling prediction. such as mortgages, student loans and ed, but it is in this bill as well. The effect that this is having on our other types of lending, the American The HOPE for Homeowners Act of economy cannot be overstated. Martin economy is in a precarious place. That 2008, another provision in this legisla- Feldstein, who served as President is why we need new policies and new tion, creates a new fund at FHA to Reagan’s chief economist, recently action to prevent this recession from make loans to distressed borrowers to wrote in the Wall Street Journal: becoming more severe, and to lay the refinance them out of mortgages with The 10 percent decline in house prices has foundation for our recovery. payments they cannot make into safe, cut household wealth by more than $2 tril- We have a responsibility to the affordable, 30-year fixed rate loans. lion, reducing consumer spending and in- American people to respond to their Only homeowners—not investors or creasing the risk of a deep recession. plight and to their pessimism, and to speculators—will qualify for these That means that American families renew their confidence in the promise loans. And the lenders must agree to have lost more than $2 trillion of of the American dream. take steep discounts from the existing wealth. Losses of that magnitude are The package Senator SHELBY and I outstanding mortgages. staggering. That is almost 20 percent of bring before the Senate today meets Only homeowners who cannot afford our Nation’s annual GDP. Put another this test. Is it perfect? Hardly. Never is their current payments will qualify, way, a national loss of wealth of $2 tril- there a piece of legislation that is per- and, once they take out the new loan, lion means that a typical family of fect. Would either of us have done it a they will have to agree to share all four will have lost over $25,000 of bit differently? I am confident we newly created equity and future appre- wealth due to the current housing mar- would. Are we guaranteeing it will ciation with FHA to help defray the ket crisis. work? Absolutely not. All we know is Government’s cost. This sharp loss in wealth for the av- this is our best judgment, having We have heard many people voice erage American homeowner comes at a worked together now for the last year concerns about this bill, calling it a time when they face record-high prices and a half to listen to people at some 50 taxpayer bailout. Let me assure my for the essentials of American life— different hearings on a wide range of colleagues, the Congressional Budget food, gas, health care, and higher edu- subject matters. Then we put together Office makes it clear that no taxpayer cation. So the so-called foreclosure cri- legislation that has enjoyed, I say money will be used to fund this pro- sis is affecting more than those facing again with thanks to our colleagues, gram. We pay for this important new foreclosure. It is affecting nearly all of overwhelming support in this Chamber program by all or part of the first 3 us. As one home falls into foreclosure, on a bipartisan basis. That is not some- year’s funding from the affordable the values of countless other homes de- thing we have done with great fre- housing fund created in the GSE por- cline rapidly, if not immediately. quency, I might point out, in recent tion of the legislation. Then we have

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00003 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5774 CONGRESSIONAL RECORD — SENATE June 19, 2008 an additional $2 billion cushion at the provide a steady stream of financing to about it, we will be indicted by history Treasury Department, should there be build housing for those most in need. for not doing it. any negative implications. The Capital Magnet Fund requires that I thank my great friend from Ala- In fact, according to the CBO, this each dollar leverage at least an addi- bama, who has been a great chairman program will make nearly $250 million tional $10. Together, these programs of this subcommittee, been a great for the taxpayers over the next 10 will provide billions of dollars for new member of this committee, and he has years. In return, we will be saving the affordable housing in years to come. I worked awfully hard to bring us to this American dream for hundreds of thou- want to acknowledge the important moment. I am grateful to HARRY REID sands of elderly and hard-working fam- contributions of Senator JACK REED to and to MITCH MCCONNELL for making it ilies; stopping the bleeding in our com- this part of the legislation. This is possible. munities; and helping restore con- going to be a permanent program that I yield the floor. fidence in our capital markets. will make a difference for millions of The ACTING PRESIDENT pro tem- Finally, this package establishes a people in years in come. pore. The Senator from Alabama is rec- new, independent, world class regulator I thank my ranking member, Senator ognized. for Fannie Mae, Freddie Mac, and the SHELBY, and his staff, for their hard Mr. SHELBY. Mr. President, this Federal Home Loan Banks, known as work to reach consensus on this whole morning I am pleased to join my col- the housing Government-sponsored en- package. league, the chairman of the Senate terprises, GSEs. The legislation endows This is what we are supposed to be Banking Committee, Senator CHRIS this regulator with broad new author- doing. This is what we get elected to DODD. The Banking Committee has de- ity, equivalent to the authority of do. We don’t get elected to decide ex- voted considerable time and effort to other Federal financial regulators, to actly what we want to do at the ex- developing comprehensive and complex ensure the safe and sound operations of pense of everyone else. It means sitting housing legislation. The proposed legis- the GSEs. Let me recite the powers in- down and working together to come up lation’s most significant provisions in- cluded in this legislation: Establish with solid ideas that can make a dif- clude a new regulatory structure for capital standards; establish prudential ference in our country. Today, 8,427 Fannie Mae, Freddie Mac, and the Fed- management standards, including in- people are going to start to lose their eral Home Loan Bank system, a new ternal controls, audits, risk manage- homes. Tomorrow another 8,427 will program to help qualified homeowners ment, and management of the port- have that happen, and that will happen stay in their homes, and reforming the folio; enforce its orders through cease every single day until we do something FHA. and desist authority, civil money pen- to bring this to a halt. That number This legislation creates a new regu- alties, and the authority to remove of- has gone up by 1,000 families in the last lator who has the authority and the ficers and directors; restrict asset 2 months. We cannot waste another flexibility to regulate the GSEs appro- growth and capital distributions for day. There is no other issue which de- priately. I am also pleased that the undercapitalized institutions; put a mands our attention and our action HOPE for Homeowners proposal is paid regulated entity into receivership; and more than this one, and any effort to for; not by taxpayer’s money either. I review and approve, subject to notice be dilatory and to stop us from saving believe we should do what we can to and comment, new product offerings. these people and keeping them in their help struggling homeowners, short of As we all know, the housing GSEs homes ought to be rejected by every asking the taxpayers to foot the bill. have played the central role in keeping Member of this body. The legislation also provides imme- the mortgage markets functioning. Yet This is a cancer in our society, and it diate help to the marketplace by re- in recent months, like many others in is causing us deep problems. We need to forming the Federal Housing Adminis- the mortgage industry, Fannie Mae do something about it. Senator SHELBY tration, allowing it to provide greater and Freddie Mac have lost billions of and our staffs and the members of our liquidity and thereby enhancing the dollars. It is their very importance committee have worked hard and long options available to America’s home- that makes it imperative that we as- to bring this package forward. It en- owners. sure ourselves, and the American peo- joys broad-based bipartisan support, as It also provides additional funding ple, that the GSEs are on solid finan- we hoped it would. Now we have a for foreclosure prevention counseling, cial footing so they can continue to chance to complete action on this and which will hopefully help homeowners serve that crucial function. A strong to make a difference and to say to the stay current on their mortgages and and of active regulator can help make American people: In this Congress, we able to remain in their homes. sure that the GSEs continue to operate did something. We stepped up and tried In order to prevent this situation in a safe, sound, and effective manner. to make a difference for that great from repeating itself, the legislation The new legislation significantly en- dream of home ownership, of raising increases the disclosures made to con- hances the affordable housing compo- your family in a decent house, of being sumers obtaining mortgages. I believe nent of the GSEs’ mission, and expands able to provide for your long-term se- that giving consumers more informa- the number of families Fannie Mae and curity, of making a difference for your tion and a greater ability to under- Freddie Mac can serve by raising the neighborhoods and communities. We stand the choices they are making will loan limits in high-cost areas to 150 are going to do everything we can to help them avoid the pitfalls and bad percent of the comforming loan limit. see to it that these numbers decline, decisions many underinformed con- Currently, this limit would be $625,000. that foreclosures at this rate on a daily sumers made in the recent past. The legislation tightens targeting re- basis are going to stop in our country. To better protect our soldiers, sail- quirements of the affordable housing Again, we say to you, we realize not ors, and airmen, this legislation ex- goals, and rewrites those goals to en- everyone agrees with what we are tends additional consumer protections sure that the enterprises provide li- doing here. and provides those returning from com- quidity to both ownership and rental You never can here. I have been here bat a chance to get back on their feet housing markets for low- and very-low for 27 years. The greatest moments of before they face foreclosure of their income families. this body are where people have come homes. Finally, the legislation creates a per- together to try and make a difference, In an effort to provide communities manent, new Housing Trust Fund and a not trying to get their own way all the with the ability to clean up the damage Capital Magnet Fund, financed by an- time. You are part of a larger body rep- caused by foreclosures that have al- nual contributions from the enter- resenting a great country. And even ready occurred, we have also included prises, which will used for the acquisi- though you come from one State and funding to allow States and commu- tion or construction of affordable rent- one area of the Nation, we all have a nities to buy up and repair foreclosed al housing, some ownership housing, job to do, to take care of all of us in residences. Attached to this funding is and economic development for low-in- this country. a requirement—here I think this is im- come families and communities. While this problem does not affect portant—that any profit from the sale This new affordable housing fund—fi- every citizen of the country, it is grow- of properties must be used to buy and nanced fully by the enterprises—will ing. If we do not do something soon repair additional properties. I believe

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00004 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5775 the reuse of this funding in this man- With millions of hard working Americans follows through the end of title V, and ner will maximize the impact of these torn between looking for work and putting inserting certain language to the dollars and minimize the possibility gas in the tank or paying their mortgage, we amendment of the Senate to H.R. 3221, that funds will be wasted or profits in- must enact legislation to provide access to and that no other motions, except mo- the resources that will help families to hold tions to reconsider and motions to appropriately pocketed by someone. onto the American dream and get our econ- The bill also contains a number of omy moving again. table, be in order during today’s ses- sion. tax-related provisions prepared in a bi- Robert Shiller, as I pointed out ear- partisan fashion by the chairman and The PRESIDING OFFICER. Is there lier, supports this legislation. He is objection? the ranking member and the staffs of highly respected, by the way, as some- the Finance Committee. Mr. DEMINT. Mr. President, reserv- one who deals with the issue of the ing the right to object. I appreciate the While there is a large and growing index dealing with housing values. number of homes entering foreclosure leader’s sensitivity to some concerns Again, groups from the American En- we expressed yesterday on the length in this country, we must remember terprise Institute to the Consumer Fed- that the vast majority of homeowners of this bill and the fact that probably eration of America. very few, if any, of us have had a are living within their means and mak- Alan Fishbein. Let me quote him: ing their mortgage payment. There- chance to read it, as well as his sen- fore, my primary consideration here With foreclosures on the rise a stepped-up sitivities to a slew of credible media re- Federal lifeline is desperately needed if ports that question some of the intents during negotiations on this bill has many hard-pressed families are to save their been to protect the American taxpayer. in the bill. homes. We all know the housing crisis is an In creating a strong regulator for the From the Consumer Federation of issue in this country, and we do need to GSEs and using an independent funding America to members of the American look at what we can do as a Senate to stream to pay for the FHA program, I Enterprise Institute, former members relieve the foreclosures and to help believe we have met that goal. of the Federal Reserve Board, members Americans stay in their homes. But we With crises such as this one we are of the Reagan administration, the need to do it in a way the American facing now in this country, I believe Council of Economic Advisers, others, people trust. We are trying to get the American people expect us to pro- all are advocating—and I am not sug- through this bill. We know it has been vide effective and timely solutions the gesting dotting every ‘‘i’’ and crossing changed since the committee has con- best we can. Chairman DODD and I have every ‘‘t.’’ But they have taken this sidered it. worked together to develop a package work of Senator SHELBY and 17 of our I ask the leader if he would consider of targeted measures intended to sta- other colleagues of the 21-member com- a modification of his agreement that bilize and strengthen the housing fi- mittee, 19 out of 21 having gone we be assured that before this bill is nancial markets. through all of the hearings, 50 of them finished, we will have an opportunity I strongly urge my colleagues to sup- over the last year, listening to all sorts in the minority to offer an amendment port this carefully crafted compromise. of people talking about what needs to that would refer the bill to the com- I remind my colleagues that this bill be done. It is now the bipartisan over- mittee with instructions to report came out of the Banking Committee 19 whelming majority opinion of us on what direct benefits Countrywide or to 2. That is a strong vote for a bipar- that committee that this package we other financial institutions would re- tisan measure. offer here is our best step forward. ceive from this legislation. Would the I yield the floor. Having done the work for a year now, leader be willing to modify his agree- The ACTING PRESIDENT pro tem- spending the hours that we have listen- ment to include that? pore. The Senator from Connecticut. ing to people and getting solid advice, Mr. REID. I say to my friend from Mr. DODD. I thank my colleague this is what we believe, as they believe, South Carolina, the distinguished Sen- from Alabama. is the best response America can make ator, and I remind everyone, that 75 I want to read this list into the at this moment. percent of this bill has already been RECORD to give our colleagues some Remember, this HOPE for Home- passed and was done by a very big vote. sense of the broad support this pro- owners is voluntary; it does not man- The 25 percent we are working on posal has developed. Let me quote from date anything. It creates an oppor- now—we hope to work on—is work that several of our major editorials as well tunity for people. We hope they will has been done on a bipartisan basis. as major economists representing the take advantage of it when this legisla- And much of it, if not all of it, was in political spectrum in our country. I tion is signed into law. total consideration with the White will share this with you. I yield the floor and suggest the ab- House. So I say to my friend, let’s go ahead and we will legislate on this bill Alex Pollack, resident fellow at the sence of a quorum. today, the Senator not objecting. I will American Enterprise Institute: The PRESIDING OFFICER (Mr. be happy to sit down with Senator This is an appropriate and targeted ap- WHITEHOUSE). The clerk will call the DEMINT alone, with the minority lead- proach to the downward spiral caused by the roll. deflation of the great housing and mortgage er, anyone else, and talk about the con- The assistant legislative clerk pro- bubble of the 21st century. cerns you have, as you have indicated, ceeded to call the roll. Alan Blinder, an economist at as to benefits going to whomever they Mr. REID. Mr. President, I ask unan- Princeton University and the former go to, and let us see if we can get from imous consent that the order for the vice chairman, Board of Governors of here to there by approaching it in that quorum call be rescinded. the Federal Reserve System: manner. The PRESIDING OFFICER. Without But as I indicated yesterday, this is I think that the HOPE for Homeowners bill objection, it is so ordered. is the most important piece of economic leg- important legislation. We want to islation before the Congress today. f make sure there are no problems with any Senators who have other concerns. The Miami Herald: AMERICAN HOUSING RESCUE AND So, in short, let me say this: My friend The Senate represents a bipartisan com- FORECLOSURE PREVENTION ACT loses nothing by allowing us to go to promise that deserves wide support. OF 2008 the bill as indicated in this consent The Boston Globe: Mr. REID. Mr. President, I ask the agreement. And then any time during There is no bailout or windfall here. Con- Chair to lay before the Senate a mes- the day, I will be happy to meet with gress is merely offering a fighting chance for sage from the House with respect to him and the other eight Senators, to- families and credit markets to recover. H.R. 3221, and that the only amend- gether or alone, who signed that letter, Newsday: ments in order today be those relating and the distinguished Republican lead- The Senate program is called Hope for to the subject of housing, except the er can suggest whomever, if anyone, he Homeowners. That’s just what families fac- amendment I will offer on behalf of wants in on that meeting. I will be ing foreclosure need. Senators DODD and SHELBY, in my mo- happy to work with the Senator. Fran Grossman, the senior vice presi- tion to concur in the amendment of the Mr. DEMINT. I do not feel qualified dent of Shore Bank in Chicago: House, striking section 1, and all that as an individual member to make the

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00005 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5776 CONGRESSIONAL RECORD — SENATE June 19, 2008 judgments that I think the committee Under the previous order, the Chair CHANGE IN OREGON’S FORESTS could. Our hope was to have an up-or- lays before the Senate a message from Mr. WYDEN. Mr. President, today, I down vote at one point to allow this the House with respect to H.R. 3221, am honoring a commitment and sub- body to at least decide if we should which the clerk report. mitting for public review a proposal to refer this back to the committee to The assistant legislative clerk read protect old-growth forests and to ag- look at that specific area, to make sure as follows: gressively move to restore, through there is complete transparency, and to Resolved, That the House agree to the thinning, the millions of acres of at- address what benefits some of these amendment of the Senate to the title of the risk forests across the State of Oregon. companies have. bill (H.R. 3221) entitled ‘‘An act to move the United States toward greater energy inde- The novelist Ellen Glasgow once re- All we want is an up-or-down vote, marked: not necessarily a determination of how pendence and security, developing innova- tive new technologies, reducing carbon emis- the bill should be changed. I certainly The only difference between a rut and a sions, creating green jobs, protecting con- grave is their dimensions. cannot determine. We have had one sumers, increasing clean renewable energy media source say it is $25 billion to production, and modernizing our energy in- We find ourselves today in a decades- Countrywide. We thought the com- frastructure, and to amend the Internal Rev- old rut that threatens our forests and mittee had indicated $2.5 billion. Cer- enue Code of 1986 to provide tax incentives our lives like never before. It is time tainly, because of the media promotion for the production of renewable energy and for change for Oregon forests, and that of this, this has become a national energy conservation,’’ do pass with amend- change can only begin with new ideas— issue. So our hope is that, again, before ments. ideas that depart radically from recent the bill is over—not today; it is cer- AMENDMENT NO. 4983 decades of forest mismanagement, old- tainly a reasonable request to deal Mr. REID. Mr. President, I move to growth destruction, catastrophic fire, with housing amendments today—but concur in the amendment of the House, and political gamesmanship. that the leader would assure us that striking section 1 and all that follows We must break this cycle of endless before this bill is finished, we would to the end of title V, and inserting cer- fighting, of old, unwinnable battles in have an up-or-down vote on referring it tain language, to the amendment of the woods that now endanger our for- back to committee. the Senate to H.R. 3221 with the ests and communities alike. We must Mr. REID. I say to my friend, amendment at the desk. Basically, so make the preparations now to move through the Chair, I can’t give him as- everyone knows what this is, it is the forward, under new national leadership surance that there will be a vote, but I bipartisan Dodd-Shelby amendment. in 2009, to restore our treasured and en- do give assurance that we will sit down The PRESIDING OFFICER. The dangered forests with sustainable, eco- and talk with him and do what we can clerk will report. logically beneficial restoration to pacify his interests. What I mean by The assistant legislative clerk read thinning while permanently protecting that is, there may be another way we as follows: the few remaining old-growth forests can get from where we are today to The Senator from Nevada [Mr. REID], for we have left. where he thinks we should go. We will Mr. DODD, for himself and Mr. SHELBY, pro- poses an amendment numbered 4983 to the We ought to be creating new and sus- be happy to work with the Senator House amendment striking section 1 through tainable jobs in forestry for now and throughout the day. I give him the as- title V and inserting certain language to for the future and finally achieve the surance, without any reservation, that H.R. 3221. economic and ecological promise of the his concern is not untoward, and we (The amendment is printed in today’s Northwest Forest Plan. It is my view will be happy to sit down and see if RECORD under ‘‘Text of Amendments.’’) that it is critical to change the there is a way we can accomplish what The PRESIDING OFFICER. The Sen- mindset of Federal land management he wants to accomplish, as I said, the ator from Connecticut. bureaucracies by requiring large-scale Senator from South Carolina and the Mr. DODD. Mr. President, let the efforts to address the obscene backlog eight other Senators who wrote me the games begin. We are open for business. of at-risk forests and by restoring the letter. If Members have amendments they tools and the public trust required to Mr. DEMINT. Mr. President, I appre- would like to raise, Senator SHELBY accomplish these jobs. In short, we ciate the leader’s reasonableness. I and I are here, and we would like to must change the way the Federal Gov- would like to work with him. Again, move along. I know there are Members ernment manages forests, and espe- the goal is not to pacify me but to who have plans they would like to do cially Oregon’s forests. make sure the American people can later this week, perhaps for the week- I am hopeful my proposal—driven by look on us and know we have had an end, but if we can move quickly, who science and the will of the people of Or- open and transparent process. I trust knows what might happen, since we egon to end the destruction of old the leader and respect him and how he have done two-thirds of the bill already growth and to restore our at-risk for- will approach that. For that reason, I with overwhelming votes, with a cou- ests through sustainable thinning—can will not object to the unanimous con- ple modest changes in it. We have in- help begin a new dialog that leads to sent request. creased loan limits in a couple of areas. change that is so desperately needed. The PRESIDING OFFICER. The Re- We invite our colleagues to come over. So I invite all Oregonians to review publican leader. If they want any questions answered Mr. MCCONNELL. Mr. President, I my proposal and to share their about this, we have staff here as well thoughts at my Web site: thank my good friend from South Caro- as members of the committee. We are lina for allowing us to go forward www.wyden.senate.gov. My staff and I prepared to entertain amendments and will review those comments and seek today. As he knows full well, we have move forward on this very important been complaining on this side that we to improve upon it before it is formally piece of legislation. introduced as legislation in the Senate. have not been allowed to legislate on I suggest the absence of a quorum. frequent occasions lately. The majority The PRESIDING OFFICER. The Our forests are the foundation of our leader has outlined a way to go forward clerk will call the roll. natural, historical, and sociological today that allows us to do what we The assistant legislative clerk pro- culture. Unfortunately, decades of sci- used to do in the Senate, which is to ceeded to call the roll. entifically unsound forest management actually offer amendments related to Mr. WYDEN. Mr. President, I ask have created dangerous risks that now the subject and vote on them. I believe unanimous consent that the order for threaten our forests and our cultural this is a good way to proceed. I thank the quorum call be rescinded. identity. the majority leader for his accommo- The PRESIDING OFFICER. Without Instead of making progress on the dation, and I thank my good friend objection, it is so ordered. huge backlog of priority management from South Carolina as well. Mr. WYDEN. Mr. President, I ask projects that could restore our forests, The PRESIDING OFFICER. There unanimous consent to speak as in Presidentially imposed political agen- being no objection, the unanimous con- morning business for up to 15 minutes. das have taken precedence, for well sent request is agreed to, and it is so The PRESIDING OFFICER. Without over a decade now, over commonsense ordered. objection, it is so ordered. opportunities to move forward to an

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00006 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5777 ecologically sound, economically ad- and inventoried roadless areas and in- What I propose today is to shift the vantageous, and sustainable forest fu- corporate a comprehensive aquatic focus of our Federal land agencies off ture. conservation strategy into all projects. of logging old growth and other envi- Scientifically unsupportable agendas Activities conducted under this new ronmentally sensitive areas and on to and the resulting cycle of mistrust, management direction would receive addressing the horrific backlog of des- litigation, and institutional paralysis expedited administrative procedures perately needed restoration thinning in now threaten vast tracts of Oregon’s and limits on administrative appeals the Federal forests. This involves har- forest land and especially what re- because they would then be focusing on vesting ground and ladder fuels in mains of Oregon’s ancient forests. critical priorities in the noncontrover- areas that ought to be considered non- The Federal Government owns more sial areas. controversial, fuels that currently en- than half of my State. That probably is This proposal further works to re- danger old growth in other healthy for- a little bit different than it is in Rhode store the trust of the public in our Fed- ests—Federal, State, and private Island, but it is the case, and most of it eral land agencies by giving those alike—as well as endangering human is forest land. Due to decades of poorly agencies an incentive to pursue new, and animal life. The new required man- designed, even-aged management and sustainable forest management direc- agement focus will also allow for the fire suppression, we have millions of tives and to create the first ever auto- economic potential of the Northwest acres of choked, second-growth forest matic, independent review of the agen- Forest Plan to be secured. at an unacceptably high risk for dis- cies’ forest management actions, as This proposal envisions that in many ease, catastrophic fires, and insect in- well as new openness, transparency, cases it is going to be possible to festation. Fire, disease, and infestation and accountability for the actions by achieve the goals I have set out by certainly don’t respect geographic these agencies. bringing about collaboration from tim- boundaries, but they sure present a se- The overwhelming body of scientific ber industry groups and environmental vere risk to private landowners and evidence assigns a negative ecological leaders. I have already seen great col- communities alike. value to the cutting down of Oregon’s laborative successes like this in the In 2008, at our Oregon Economic remaining old growth forests. Science Siuslaw, Colville, and other national Summit in Portland, I announced that has demonstrated time and time again forests, with the help of organizations I will begin work on a proposal to ad- that old and mature trees play an in- such as Oregon Wild, the Nature Con- dress the bureaucratic and political dispensable role in preserving water servancy, and K-S Wild. My proposal roadblocks that prevent restoring mil- quality for communities, preserving creates incentives for these partner- lions of acres of choked, second-growth critical wildlife habitat, and storing ships, but due to the enormous and plantations in moist west side forests the carbon gases that contribute to dangerous backlog of work, it is my and the many at-risk dry forests, par- global warming. Further, the evidence view that collaborative efforts such as ticularly found in the eastern and shows that those older trees are far these must be stepped up; they must southern part of my State. I said I more resistant to fire than younger come at an accelerated pace. would work to avoid a return of the trees. Equally important, after the dis- Unfortunately, history has shown counterproductive and senseless forest appearance of over 90 percent of Or- that it is not possible to rely just on battles of the past several decades— egon’s old growth, the people of my good will, and that is especially the case if you don’t find a way to discour- battles fought over logging in old State no longer support the cutting of age the cycle of endless administrative growth and environmentally sensitive what little old growth remains on our appeals and litigation that has pro- forests, areas which tend to be far more public lands. duced Federal agency inertia and un- fire resistant and play a critical role in In the drier forests found predomi- dermined even the most commonsense water quality and species protection. nantly, but not exclusively, on the east Today, I am honoring the commit- management efforts in our forests. side of Oregon, the old growth picture Under my proposal, each Oregon Fed- ment I made to the people of Oregon, is a bit more complicated due to dec- eral forest and BLM district would be and I intend to use my chairmanship of ades of questionable management. empowered to create a landscape-level the Senate Subcommittee on Public Many scientists and environmentalists restoration project of up to 25,000 acres Lands and Forests to attempt to bring agree that more active forest manage- designed by local collaboration organi- my home State the changes that our ment will have to be pursued quickly zations. If collaboration is not forests so desperately need. on the east side forests if there is going achieved, the land agency would be al- The guiding premise of my proposal to be a genuine effort to save the na- lowed to go forward but on a smaller is to direct and help the Federal land tive older trees and restore a healthy, scale of up to 10,000 acres. agencies move forward quickly with diverse, and more fire-resistant mix to One of the reasons there have been local input on what should be the most forests currently under a relentless and endless appeals and litigation is that critical, least controversial objectives devastating assault by fire, disease, over the past several decades, the level to restoring our Federal forests in Or- and insects. of public trust of Federal public land egon and to move those agencies away For these reasons, I propose a perma- agencies has fallen to such unhealthy from practices that have been widely nent protection from logging for all re- levels that it is impossible to conduct discredited and are not supported by maining old growth and mature trees even routine and commonsense forest the public. in Oregon’s Federal forests. In the management projects. An era of mis- In short, my proposal expedites res- mostly west side ‘‘moist’’ forests, no trust of these agencies and the accom- toration of Oregon’s forests by tree currently 120 years or older would panying legacy of public protests, ap- thinning the millions of acres of be allowed to be cut ever again for peals, and litigation have produced choked plantations and dry, at-risk commercial purposes. In the drier for- what I consider to be an institutional forests that pose a risk to lives, for- ests, no tree currently 150 years or paralysis in these land agencies, and it ests, and property. It also attempts to older would be allowed to ever again be must be reversed. To begin to restore begin the task of restoring public trust cut for commercial purposes. The dec- public trust and empower the land in Federal land management agencies ades-old debate over the fate of old agencies to move forward aggressively, by permanently ending the commercial growth in Oregon would finally come I believe the proposal I offer today will logging of Oregon’s old growth forests. to an end. bring an unprecedented level of scru- Forest Service and BLM managers in This is a crisis which cries out for ac- tiny, transparency, and accountability my State would be given new direction tion across the millions of acres of to the forest projects that are con- based on the principles of restoration choked, at-risk forests in our State, ducted under the new authorities I pro- forestry. Overstocked stands that I and reasonable people on both sides of pose. have been referring to and stands the forestry issue need to come to- I borrow in this regard from a model unhealthy due to a lack of age or spe- gether so that we get fresh policies and that has been used by fisheries regu- cies diversity would become the focus Oregon doesn’t suffer foolishly and lated by the National Oceanic and At- of this proposal. The managers would needlessly lose more forests, property, mospheric Agency that employ observ- be instructed to avoid all old growth and lives. ers to monitor the bycatch of fish.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00007 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5778 CONGRESSIONAL RECORD — SENATE June 19, 2008 Under my proposal, independent forest Mr. GREGG. Reserving the right to asset value even though it is not being observers hired and managed by the object, I intend to speak on the bill, drilled and not produced, which is the independent inspectors general of the and I presume it will be for about 10 very reason they say we ought to drill. Agriculture and Interior Departments, minutes, but I am not sure. But, of course, that is belied by the who will monitor all of the projects The PRESIDING OFFICER. Without fact that they already have 65 million that are conducted under the proposal objection, it is so ordered. acres they have not drilled. I offer today to make sure the prohibi- The Senator from Florida is recog- By the way, 31 million acres of that tions against cutting old growth and nized. is in the Gulf of Mexico. This Senator mature trees, and cutting trees in ENERGY PRICES has fought for years. I first started this roadless areas—that those protections Mr. NELSON of Florida. Mr. Presi- fight in 1982 as a young Congressman are strictly observed. The forest ob- dent, we have quite a brouhaha that over in the House of Representatives, server reports will be made available to was stirred up in my State of Florida when a Secretary of the Interior, the public online, and Federal forests when the President and Senator named James Watt, wanted to drill off found violating the Federal protections MCCAIN both announced their posi- the entire east coast of the United would lose their ability to provide ex- tion—a changed position for Senator States, from Cape Hatteras, NC, all the pedited project authorities for several MCCAIN—that all of the offshore lands way south to Fort Pierce, FL. I have years as a penalty. on the continental United States be been fighting this since then. Finally, for the sake of our environ- drilled for oil and gas. Presently, most Why? Clearly, there is an economic ment, economy, and our way of life, my of those offshore lands are under a reason in our State. We have a $65-bil- hope is that an approach such as I offer Presidential moratorium until the year lion-a-year tourism industry that de- today is going to make it possible to 2012, save for the Gulf of Mexico off the pends on pristine beaches. Clearly, create thousands of new jobs and re- west coast of Florida, which is under there is an environmental reason, store the health of our forests. The statutory prohibition to drill until the which is that the bays and estuaries only way to produce this kind of year 2022. It has caused quite a brou- are necessary for so much of the change is to put new ideas forward, haha because both Senator MCCAIN and spawning of the marine life in both the bold ideas that break out of the old rut the President have said that if you Atlantic and the gulf. But the other that has produced so much institu- want to lower the $4 price of gas that reason is that almost the entire Gulf of tional paralysis, and move to an ap- people are hurting under, what you Mexico off of Florida—that area which proach that protects our forests, pro- have to do is drill. is prohibited in statute, which Senator tects our communities, and protects a But what they have neglected to say MARTINEZ and I were able to pass 2 new opportunity to create family wage is that there are 65 million acres, on- years ago—that area is the largest employment. shore and offshore, which have already testing and training area for the U.S. I am certain there are many addi- been leased, that the oil companies military in the world. It is where we tional issues Oregonians are going to have not drilled. So if you want to drill train our pilots in live-fire exercises. It want to consider and suggestions they as if that were the answer to lowering is where we have joint sea and air and, will have to improve this proposal. I gas prices—which it is not, and I will combined with Eglin Air Force Base, wish to make it clear that starting tell you why in just a minute—you land operations. It is where some of the today, with this proposal online, I in- have plenty of land and submerged land most sophisticated weapons systems vite and welcome the people of Oregon in which to drill. So why don’t you that have to be shot for hundreds of to weigh in so that it will be possible, drill? miles are tested. at the end of their opportunity to be It is being used as a red herring to We have a letter from the Secretary heard and offer their suggestions, to go get everybody off of what we ought to of Defense that says drilling for oil and forward with a concrete, specific pro- do, which is eliminate our addiction to gas would be incompatible with the use posal to break bold, new ground with oil and start going to alternative of the U.S. military, and that is the respect to forestry and provide the sources, which is ultimately the solu- main testing and training area for the changes the public so desperately de- tion. U.S. military in the world. As a matter sires. Let’s take the President’s and Sen- of fact, it was that very excuse that I Mr. President, I yield the floor. ator MCCAIN’s point of view that you used back in 1982, as a young Congress- The PRESIDING OFFICER (Mr. are going to lower gas prices by drill- man, facing down the Secretary of the BROWN). The senior Senator from Flor- ing. As a matter of fact, the Presi- Interior, James Watt, when he wanted ida is recognized. Mr. NELSON of Florida. Mr. Presi- dent’s own administration has said— to drill off the east coast of Florida in dent, in a moment I am going to ask the Energy Information Administra- the Atlantic because one thing they for unanimous consent to speak as in tion, in their annual report last year, omitted to find was, how can you have morning business and to lock in an has said—that drilling in the offshore oil rigs out there off the east coast of order, but I wish to say, while we are of the continental United States will Florida, where we are dropping solid on the housing bill, that I will be com- not have any affect on gas prices until rocket boosters in the launch of a ing and offering again a slim-downed after the year 2030. That is 22 years space shuttle and the first stages of the amendment that had been declared not into the future. So the internal docu- expendable booster rockets coming out germane to the housing bill before, in ments that have just emerged in the of the Cape Canaveral Air Force Sta- order to promote people to be able to Bush administration belie the very tion in all of our space launches? You stay in their homes by withdrawing same thing that the President and Sen- simply can’t. Thus, that was the reason from their 401(k) savings plan without ator MCCAIN were trying to do. I was able to defeat it back in the 1980s. paying the 10-percent penalty. I will be What are they trying to do? The ad- And here we are, still carrying these offering that amendment. We are get- ministration is trying to give away the arguments on. ting it scored again by the Congres- store before they leave town. They are Mr. President, no, this is not the an- sional Budget Office. We think its im- trying to help the oil companies. How swer. The answer, if you want to drill, pact will be much less, and I will be do they do it? The value of an oil com- is to go on and drill. You have the conferring with the chairman and the pany is, in part, determined by how leased land, on land and submerged ranking member of the committee as many reserves of oil and gas they own. land. The real answer to the question we approach that. Therefore, if they have additional acres of $4 gas or $140-a-barrel oil at the end Mr. President, I ask unanimous con- of leases that have not been produced of the day is to wean ourselves from sent that I be allowed to speak as in both onshore and offshore, which is total dependence upon that oil with al- morning business for up to 10 minutes, considered a reserve—and that is cer- ternative fuels so that we start having and I ask unanimous consent that I be tainly a value—and that is listed as an alternative fuels, such as ethanol, followed by the Senator from New asset on the books of the oil compa- made from things that we don’t eat, Hampshire for 10 minutes as well. nies, and the greater amount of land synthetic fuel made from coal. How do The PRESIDING OFFICER. Is there they can have that has some proven oil you think Germany fueled its war ma- objection? and gas deposits, the greater their chine during World War II when they

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00008 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5779 were embargoed on oil? They made when there hasn’t been a lot of effort Venezuelan companies, Chinese compa- synthetic fuel from their coal reserve. to do business in a cooperative way to nies, and the Russians, and you have a The United States has 300 years of coal produce positive events for our Nation series of nations, of course, that have reserves. Using our yankee ingenuity or Government. They have done it, and control over their supply. So supply is and research and development to de- they deserve a tremendous amount of not controlled by these private compa- velop new engines, new technology, and praise for that. I have not had a chance nies. And their profit, if we take it as new fuels—did you see where Honda to read the whole bill, but I have lis- a government, is not going to give us came out that they are going to tened to what they are planning to do. the capacity to produce more oil. We produce the first mass-produced hydro- We have worked with their staffs. Up are going to take that money as a Con- gen engine car? This is the beginning of until a couple of weeks ago, we were gress and spend it on whatever interest the change of weaning ourselves from working reasonably close, and Senator group we think is important today. We total dependence on oil. SHELBY has been a force for progress. will probably spend it on some program In the meantime, what can we do In my opinion, they appear to be on the to help out people who are trying to about oil which last week spiked $11 right track. I want to get into the spe- buy their energy. But that is not going per barrel in 1 day and has gone all the cifics of why I feel that way in a sec- to produce more oil. That is not going way up to $140 a barrel? What is it? Is ond. to produce more exploration. it just the tightness of supply and de- OFFSHORE OIL EXPLORATION Remember, these companies are mand in the world market? That is First, I wish to talk about the oil owned by Americans, for the most part. part of it. But an ExxonMobil execu- issue, about whether or not we explore They are owned by Americans through tive, 2 months ago, testified to Con- offshore. The proposal we have seen for pension funds. People who work for gress that supply and demand would energy that has been brought to the unions own these companies, people say that oil is $55 a barrel. So what is floor so far, primarily by the other who work in businesses own these com- the difference between $55 a barrel and side, has been to do three basic things. panies, people who have a job and have what it sold for last week at $140? The One is to litigate; sue the oil cartels. If a 401(k) own these companies. The prof- biggest difference is an unregulated you are the Saudis, and America gives its flow back to two different actions: commodities trading market that al- American attorneys a new right to sue One, exploration; or two, dividends— lows speculators, who are not going to you, or if you are the Emirates States dividends running to American citi- use the oil, who are just bidding on the or some other oil-producing nation, zens, most of whom are retired, or contracts—and they keep bidding that you are going to be affronted by the many of whom are retired. So to sim- price up and up and up. fact that the United States would sud- ply say, well, their profits are too high We did one thing about that last denly turn to its legal community and and we are going to grab them as a night when we passed the farm bill be- say: You can sue these other nations. I government and spend that money be- cause in the farm bill was a part that suspect my reaction, were I running a cause we can spend that money more partially started to reregulate those government of one of those countries efficiently and better than those com- commodities markets. But it wasn’t that had oil reserves, would be to say, panies—because they are evil, they are enough. You need to come in and put A, we don’t need you, we don’t need to oil companies—is, again, cutting off energy commodities clearly back in sell you this oil; or, B, reinvest in your our nose to spite our face. the regulation by the Commodity Fu- economy with the proceeds from pur- It won’t produce more exploration. It tures Trading Commission. If you do chasing this oil. will produce less. It will take from that, then they will require those bid- Our economy, to a large degree, is de- Americans who have invested in those ding on oil contracts for future deliv- pendent upon people being willing to companies through their pension funds ery of oil to say they actually are invest in it, both domestically and also and their dividends. That makes no going to use most of that oil instead of internationally. Obviously, the petro- sense. just speculating on the price and driv- dollars that are floating around the The things that make sense are: ing it up and up. world because of the price of oil are a More conservation, more renewables— It is true the weakness of the U.S. significant part of the investment cap- both of which I strongly support—and dollar plays into this a little bit, and ital in this world, and we are shipping also more exploration in the United something we can do about that is bal- overseas massive amounts of our cap- States. Produce more American en- ance the budget and strengthen the ital to purchase oil. That is one of the ergy—clean energy, hopefully. One way dollar because oil is traded in U.S. dol- biggest problems with the fact that we to do that, of course, is to expand nu- lars. The weakness of the dollar, com- are buying all this foreign oil at ridicu- clear power. But another way is to look pared to other currencies of the world, lously high prices. for reserves where we have reserves, makes the stronger currencies bid up We should not take an action that es- and where we can look for them in an the price of oil in dollars. But the main sentially would be cutting off our nose environmentally sound way. One way reason is speculation. We simply have to spite our face by saying: We are is to take a look at oil shale. That is a to be realistic, with common sense, as going to sue you if you don’t do what great opportunity. We have more oil to what we are going to do about $4 gas we want relative to our laws and rel- reserves in oil shale, three times more from which our people are hurting so ative to cartels. Their laws don’t bar in oil reserves in oil shale, than Saudi much. cartels. They don’t have to invest in Arabia has in plain oil. We have over 2 Sometimes I have been a lonely voice the United States. I suspect they would trillion barrels of reserves in oil shale, because it is easy and seductive to say, limit their investment through their and we are not using it. We are not with $4 gas, we ought to drill. But I sovereign funds in the United States using it because it is on public lands hope I have demonstrated to the Sen- were we to take that action. That and we have been barred by the activ- ate that the problem is much more would not produce more energy for us. ists and the environmental commu- complicated and that we cannot simply The second proposal is to take a per- nities from using that oil. Remember, drill our way out of the problem. centage of the profits of our domestic the way you produce that oil is under- I yield the floor. oil companies because, I guess we be- ground. You don’t produce it above- The PRESIDING OFFICER. The sen- lieve that as a Congress we can spend ground. So there is no destruction of ior Senator from New Hampshire is those profits better than those domes- the surface area of the ground. recognized. tic oil companies. First off, those do- Secondly, there is the fact that we Mr. GREGG. Mr. President, I am mestic oil companies don’t make up have proven we know how to drill. We seeking recognition on the bill in the majority of producers in this world. know how to explore in the ocean. The morning business, but first I will com- In fact, only 6 percent of the proven re- greatest example of that was Katrina. ment on the oil issue. I am rising pri- serves in the world are controlled by Here is the largest hurricane to hit the marily to speak to the bill, which has publicly held companies. The rest are American shore in history, as far as been brought to the floor by the Sen- controlled by companies that are man- damage is concerned—it wiped out one ators from Connecticut and Alabama— aged by governments, the Saudi com- of our great cities, New Orleans, then and I congratulate them—at a time pany being the biggest. But you have came right up the Gulf of Mexico—and

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00009 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5780 CONGRESSIONAL RECORD — SENATE June 19, 2008 not a barrel of oil was spilled, even in New England, and it was an incred- these mortgages and basically a force though the Gulf of Mexico is filled with ibly difficult time economically. for making these mortgages liquid is drilling rigs. Why is that? Because we How did we get out of this? There the key element of this bill. know what we are doing. We have the were a lot of things done, but one of As I understand it—and, again, I technology to drill and to produce from the key things that was done was the haven’t been able to read the whole the Outer Continental Shelf in an envi- Resolution Trust Corporation. The bill—the way it basically works is for ronmentally sound and safe way, even leadership of the FDIC at that time, these loans, for the FHA to step in and in the face of a force 5 hurricane. led by Bill Seidman, and the Federal insure refinanced mortgages, the loans So of all that has been proposed here Government came in and intervened. It first have to be written down to 90 per- and that makes sense is let’s look for essentially came in underneath the cent of the market value of the house; other places where we can produce oil, failed banks and said they would be second, the home has to be owner occu- American oil, off our shores, if States there to backstop the deposits and liq- pied, so it is not a speculative home; agree to it. That is the caveat: If a uidate the assets so they became mar- and third, all the secondary liens that State agrees to it. Now, if Florida ketable again and so the economy might be on the property have to be doesn’t want to do it, that is their could move forward. cleared so it is basically the single un- choice. Louisiana does want to do it, When you have a contraction such as derlying primary first mortgage that is Mississippi does want to do it, Alabama that, which is what we are seeing in being underwritten. That is the pro- does want to do it. Virginia wants to do our market today as a result of the posal as I understand it. it, but Virginia is barred from doing it subprime meltdown in States such as The possible effect of this, in my because we have a Federal law saying Florida, Arizona, and California—and opinion, will be that the lenders, the even if Virginia wants to do it, they it is spreading, regrettably, to some in- banks specifically, the people who have can’t do it. That makes no sense. struments that weren’t subprime— made these insured mortgages, may be Why should we be buying oil from when you have a meltdown such as able to move these mortgages off their people who hate us, who want to de- that, what happens is the banking and books, unlike mortgages which are not stroy our civilization and do us in, the lending industry of the Nation moving right now, in a way which will when we can produce it off of States, start to have to rebuild their capital free up the marketplace and allow where the States agree, where the peo- quickly because they are taking huge them to relend money to other people ple of those States agree they are will- losses. And the only place a bank can who want to buy a home. ing to explore because they know it rebuild its capital is by calling in es- Equally important, of course, is that can be done in an environmentally safe sentially good loans. So even though the homeowners, who find themselves and sound way? That makes no sense. somebody might have a good idea and caught in this subprime web of having I am sorry to get off on that tangent, know how to make a business work and taken on a mortgage which they but I had to, because this is a topic of have a real estate proposal which couldn’t afford because the adjustment in the ARM went up so quickly and so current concern and the Senator from makes sense and is going to have a radically in an unexpected way, will be Florida raised a number of issues on positive cashflow, it is extremely dif- able to stay in their home and make this question. ficult for them to get a loan—ex- their payments, if they have the capac- To return to the issue at hand, how- tremely difficult—because the banks ity to do that. That should be our goal. ever, the bill brought to the floor by are trying to build their capital and Our goal shouldn’t be to have fore- Senators DODD and SHELBY, whom I they are not lending. That is what we closures occurring all across this coun- just finished praising for their excel- are seeing today. We are seeing that try. Our goal should be to keep the lent effort here—as a conservative, it is type of contraction. homeowners in their homes, those who not my inclination to have the Govern- On top of that, of course, we have the do have the wherewithal to pay for ment step into the marketplace. In meltdown. We have the major invest- their mortgages, as long as their mort- fact, that is anathema to me in most ment house of Bear Stearns, which was gage is properly priced. That is what instances, and I am fairly resistant to reacted to appropriately by the Federal it. I think I have as good a record on this bill will accomplish in many ways. Reserve, by opening the window so What is the cost of this bill? That is trying to keep the Government out of other investment houses would be able of primary concern for me, and I know unnecessary interference in the mar- to have resources, but we still have it is a primary concern for Senator ketplace as anyone else around here, this serious issue of liquidity. That is SHELBY, because he is probably even and certainly have a very conservative what it all comes down to. It comes more of a skinflint than I am around fiscal record. But I have an experience down to the ability of the lender to be here. here which I think lends some knowl- able to take the loan and sell it and CBO is saying the ability of people to edge on what is happening and what we move it in the marketplace so they can take advantage of this may be limited need to do. actually lend some more money by because of the fact you have to clear I was Governor of the State of New taking money in and by selling the all the second liens off the home, so Hampshire in the late 1980s and early loans which they have on their books. there may not be as much use of it as 1990s when we went through a massive That is what it comes down to. What one might think. But I think there will real estate bubble meltdown. It was in- we have today is a market that is con- be more use of this option than CBO credibly destructive to the Southwest tracting because they do not have that thinks, because the lender and the bor- and to New England. The Southwest’s capacity. The lenders do not have that rower will see it as an opportunity for was caused by a large amount of fraud, capacity. the borrower to stay in the home and regrettably, and in New England it was That being the case, what is the role for the lender to get the loan and move caused by excessive speculation, espe- of the Federal Government? I am hesi- it off the books so they can get more li- cially in commercial real estate devel- tant to have the Federal Government quidity and rebuild their capital. opment. As a result of that, we had step into this, beyond what it has al- I think that will be the outcome of seven major banks in New Hampshire ready done, but I think setting up a this language, should it go into place: in late 1989 and five of them went bank- backstop is appropriate, and that is es- A lot of homes will be saved. rupt. The other two would have gone sentially what the bill that is brought Secondly, as I understand it, a lot of under, except they were owned by larg- to us by Senators DODD and SHELBY the money to support this is going to er banks from outside of New Hamp- does today. come out of Fannie Mae and Freddie shire that were able to come in and First, I congratulate them for the Mac. I may be wrong about that, but I give them the capital to sustain them- regulatory reform they put in for think that is the way it works. That is selves. Numerous other smaller banks, Fannie Mae and Freddie Mac, very im- appropriate, because Fannie Mae and community banks, went under. Lend- portant reform. But going to the part Freddie Mac have an unfair playing ing contracted, people’s home values, which is the essence of the bill beyond field here. They get a tilted rate ben- as a result of the bubble bursting, the reform, which is very important, efit because of the fact they are per- dropped by between 30 and 50 percent. the question of expanding FHA author- ceived as being backed up by the Fed- It was a horrific time for our citizenry ity to basically become a backstop for eral Government, even though they

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00010 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5781 aren’t. So this will level the playing ery Act of 2008. I filed three amend- As a former member of the Senate field a little bit, and it will take re- ments to that bill today that I hope we Banking Committee and current long- sources which aren’t coming into the will be able to discuss thoroughly and time member of the Senate Appropria- Treasury anyway to support it. act upon. tions subcommittee with jurisdiction Thirdly, and I think this is probably It is a fundamental principle that the over FHA, I have held a strong and the most important part, the economic Congress does not create programs that long-time interest on housing and fi- slowdown we are in today I believe will perpetuate or reward the behavior that nance issues. A major lesson learned be relieved to some degree because led to the housing crisis or damage the from my work on both the authorizing there will be a mechanism in place. It key agencies that play a key role in and appropriating committees is that is not a magic wand. It is not the abso- stabilizing the housing market. Unfor- FHA is significantly limited in man- lute full response to the problem. In tunately, this legislation before us aging and implementing its loan ac- fact, there is only one end of the pyr- today goes against that principle. tivities due to longstanding manage- amid that needs to be built here. But it Specifically, I am gravely concerned ment and resource challenges. Let me is a response which will help the econ- about the proposed expansion of the emphasize that point. FHA is signifi- omy recover quicker and with more en- Department of Housing and Urban De- cantly limited in managing and imple- ergy. velopment’s—HUD—Federal Housing menting its loan activities due to long I opposed the original stimulus pack- Administration—FHA—contained in standing management and resource age we passed, and I opposed the hous- this bill. The proposed creation of a challenges. They do not have the peo- ing bill that was on the floor earlier new FHA program called the HOPE for ple and the people are not adequate to this year because I didn’t think either Homeowners loan program would allow the task in too many cases. FHA’s one was going to do a heck of a lot to certain at-risk borrowers to refinance challenges have been well-documented help the economy move forward. This their mortgages and authorize FHA to by the HUD Inspector General and Gov- bill, however, if it is in the form that I guarantee up to $300 billion in new ernment Accountability Office for sev- think it is in, does something to ac- loans. The program would allow lend- eral years, which has been heard complish that goal. It will help the ers and borrowers to refinance volun- through numerous congressional hear- economy because it will free up the tarily their mortgage loans into a new ings. All my colleagues who wish ac- market. It will make the market more FHA-insured loan at a significantly re- cess to that information can have it. liquid, which is what we need, and it duced loan level with lenders agreeing It also is troubling to me that we are will also give people the capacity to to write off these reductions as losses. burdening FHA at a time when they avoid foreclosure, which is very impor- According to the Congressional Budg- are playing a growing role in assisting tant to the mindset and the psychology et Office’s review of the HOPE for distressed homeowners. I have heard of the economy. Homeowners loan program, about that FHA’s market share has grown I do think this will be part of the ef- 400,000 loans would voluntarily partici- tremendously from about 2 percent to fort to raise the economy of this coun- pate in this program, which would re- as high as 8 percent. To add 400,000 of try as we continue in this rather sig- quire about $68 billion in loan commit- the worst of the worst new loans to nificant—and I do not think we are out ment authority. CBO projects that FHA’s portfolio at this time is poten- of the woods yet—severe slowdown in about 2.2 million borrowers of subprime tially creating a perfect storm for fail- the area, especially, of the financial in- and alt-A loans will face foreclosure ure. Any collapse in FHA will be borne dustries. proceedings during the next three by the American taxpayer and future Again, I hope I understand the bill. I years. Based on a comparison of these appropriations bills, potentially at the am not sure I fully understand it. I numbers, the expected reach of this expense of other housing programs. wouldn’t claim I do. But I think I un- program will be significantly limited It is my belief that the FHA HOPE derstand its concept, its purpose, and I in assisting of homeowners who are ex- proposal takes the Government and the agree with its concept and its purpose, pected to face foreclosure. While I taxpayers down a dangerous and risky and I congratulate the leadership of would like to keep as many home- path, which may worsen the housing the Banking Committee. owners in their homes as possible, this problem for borrowers it aims to ad- I yield the floor. strategy is more likely to result in a dress. Further, when taking into ac- The PRESIDING OFFICER. The sen- huge bailout for lenders while pro- count the longstanding management ior Senator from Missouri is recog- tecting a very limited number of home- and financial challenges of FHA, the nized. owners. In particular, CBO estimates expectations being created by the new Mr. BOND. Mr. President, I thank the that under this program, ‘‘mortgage FHA HOPE program are unrealistic. leaders of this effort, my good friends, holders would have an incentive to di- AMENDMENT NO. 4985 TO AMENDMENT NO. 4983 Senators DODD and SHELBY, for their rect their highest-risk loans to the pro- For those reasons I offer an amend- hard work and their efforts to address gram.’’ For a modest write-off, lenders ment, No. 4985, to strike title IV of di- the housing crisis and the need to re- who were, in a number of cases, either vision A, which establishes the HOPE form regulatory oversight of the gov- fraudulent or negligent in their treat- program. I recognize this program is a ernment-sponsored enterprises, Fannie ment of borrowers, will be able to clear part of a delicate compromise, but it is Mae, Freddie Mack, and the Federal out many of their problem loans. At too troubling and risky for the Amer- Home Loan Banks, and reforming FHA. the same time, CBO estimates that the ican taxpayer. Therefore, I call up These are clearly needed. They are cumulative default rate for the HOPE amendment No. 4985. long overdue. I am happy to support program would be 35 percent—meaning The PRESIDING OFFICER. The them. that one out of every three loans refi- clerk will report the amendment. In addition, there is clearly a role nanced would fail. Frankly, creating a The legislative clerk read as follows: and a need for the Government to ad- new Federal program that takes on the dress the current housing crisis. I have worst of the worst subprime loans, The Senator from Missouri [Mr. BOND] pro- supported and led various efforts in the poses an amendment numbered 4985 to which will hurt FHA is extremely trou- amendment No. 4983. SAFE Act—Security Against Fore- bling. closure and Education Act—that I in- The Senate bill pays for to the new Mr. BOND. I ask unanimous consent troduced in March. That had additional FHA HOPE program from GSE assess- that the reading of the amendment be housing counseling, improved disclo- ments. This offset potentially avoids dispensed with. sure and transparency in the home- the need for funds from the Treasury to The PRESIDING OFFICER. Without buying process, and strong enforce- cover the losses as required under the objection, it is so ordered. ment actions against predatory lend- Federal Credit Reform Act. However, The amendment is as follows: ing. These were essentially included in whether the costs for the HOPE pro- (Purpose: To strike provisions relating to the bipartisan measure this Senate gram would be paid by proceeds from the HOPE for Homeowners Program) passed early in April. But I have grave the GSEs or from direct appropria- Strike title IV of division A. concerns about some aspects of H.R. tions, it does not change the nature of Mr. BOND. Mr. President, I unani- 3221, the Housing and Economic Recov- this program—it is a bailout. mous consent to set that amendment

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00011 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5782 CONGRESSIONAL RECORD — SENATE June 19, 2008 aside so I may offer another amend- my question about why they didn’t ask started. Willie was also trapped in his ment. questions, they were met with: ‘‘Don’t loan because of a $2,500 prepayment The PRESIDING OFFICER. Without worry about that,’’ or ‘‘We’ll fix that penalty. This is not just a family cri- objection, it is so ordered. later.’’ I can assure you, those things sis. Willie’s entire neighborhood suf- AMENDMENT NO. 4987 TO AMENDMENT NO. 4983 do not get fixed quietly after you sign fered through this housing crisis. At Mr. BOND. The next amendment I the papers. one time, there were more than 500 offer, No. 4987, was designed to protect Congress passed the original Truth in foreclosures in his Zip Code alone. potential home buyers with additional Lending Act and applied it to mortgage On Willie’s block, there were several mortgage loan disclosure require- loans. We knew then most people do empty houses. Foreclosed homes are ments. I explained and discussed this not take the time or have the ability driving property values down for every- amendment with the two leaders of the to read and understand the fine print of one. It becomes a self-perpetuating Banking Committee when we had the mortgage loan documents. However, downward spiral. That is why we need previous measure on the floor. I think the protections in the Truth in Lend- to help these people. the disclosure requirements were wide- ing Act were written long ago and are My amendment will apply to adjust- ly agreed to on both sides of the aisle, now woefully outdated. They were able rate mortgages with an initial but due to the procedural situation at written when most everyone took a 30- fixed or ‘‘teaser’’ rate. This is the kind the time it was not accepted. This year fixed loan. There are many more of loan Mr. Clay had and millions of amendment would protect consumers loan tools to help people share in the other Americans have. For these types considering complicated and poten- dream of home ownership. There are of loans with teasers, lenders or bro- tially unaffordable mortgage loan adjustable rate mortgages; adjustable kers will be required to provide in terms by requiring a clear and simple rate mortgages with initial fixed large, prominent type the loan’s fixed disclosure of payments and interest terms, sometimes called teasers; pre- interest rate, the initial fixed payment, rates for adjustable rate loans with so- payment penalties and refinancing op- and the date on which the fixed rate called teaser rates. These teaser loans, tions, quicker and easier than ever be- will expire. The lender or broker will with interest rates and payments that fore but not fully understood. also need to provide an estimate of jump up to unaffordable levels, played More choices are a good thing, but what the payment will be when the a large role in our current subprime uneducated consumers who do not un- loan resets from its initial teaser rate derstand the choices and therefore do mortgage crisis. to a floating adjustable rate. For many Many potential borrowers either did not understand what they are commit- subprime borrowers, this jump could be not understand what they were getting ting to is a bad thing. quite large, and the borrowers need to I mentioned on the floor at length into or were falsely assured everything be aware of it. the story of Willie Clay, of Kansas would be OK. We would also require lenders to dis- As part of bringing relief to families City, MO. close that there is no guarantee that Willie Clay is a Vietnam war para- and neighborhoods suffering through the loan can be refinanced before the trooper living largely on disability the housing crisis, I wish to ensure we initial fixed rate expires. That caught a payments. Willie lives in a working- do not face another crisis in the future lot of borrowers who knew the terms of class Kansas City neighborhood of their loan could go up after the teaser because we did not correct the prob- modest ranch homes called Ruskin rate expired, potentially to lem. Heights. I have spent a good bit of time in Willie refinanced his mortgage in unaffordable levels. But any concern Missouri, talking with homeowners 2004 for a total of $101,000. As you can they had that they could not afford facing foreclosure. The local govern- see from the size of that loan, Willie is their loan in the future was put to rest ment agencies, mayors, councilmen, al- a man of modest means. He was not a by personal assurances by a broker dermen, the advocacy groups, and the speculator gambling on the housing that there would be no problem refi- very effective counseling programs market. He was not an investor buying nancing the loan before the teaser rate such as NeighborWorks and others who a vacation rental home. expired. For many, this turned out to are assisting homeowners and are Like so many other Americans, be true, but when the credit market working on counseling those in fore- Willie was just looking for a little seized up and the loan standards were closure, but they also came back and extra money to pay-off his medical raised, they were caught in an impos- unanimously said we have to have bet- bills, car loan and some credit cards. sible situation. This amendment re- ter information for the potential buyer Willie agreed to a subprime adjustable quires a disclosure that there is no before they get into it. Making sure po- rate loan with an initial fixed rate of guarantee that the borrower will be tential buyers know the costs and do 8.2 percent. able to refinance a loan before the not fall into a trap that can lead to a For several years, everything went teaser rate expires. disaster for them and serious impacts fine for Willie. He made his payments The amendment also requires the dis- on the communities is very important. and honored his agreement. Then last closure of any prepayment penalty, the If you have ever taken out a mort- October, the initial fixed rate ended amount, and the expiration date. This gage loan to buy or refinance a home and the loan reset to a variable rate. prepayment penalty caught families or get a home equity line of credit, you His new interest rate became 11.2 per- like the Clays, trapping them in a bad are confronted with piles and piles of cent, and then was set to rise again in situation. While prepayment penalties paperwork and legal jargon. I have had March to 12.2 percent, with more rises can be good, giving certainty to the the pleasure of getting three new loans coming. lender, who can in turn provide a lower in the last 5 years from a local banker Willie told the Star, ‘‘If the rate goes interest rate, people need to be aware who doesn’t do subprime. Each time I up again, I can’t afford it.’’ Willie and of what they are getting into. have gone through the disclosure re- his wife Ina would have to give up their That is the theme of the entire quirements on closing. There is a stack home and move into an apartment. amendment. It does not block adjust- of paper, several inches thick, that is Willie now admits that he never fully able rates, it does not block initial written in legal jargon. understood how an adjustable rate fixed rates. It allows prepayment pen- I used to be a lawyer. While I can worked when he agreed to the new alties. These advances in the mortgage read those documents, I can assure you loan. business have been good for consumers, they are not easy to understand for ‘‘I didn’t have the education to un- but it just requires full disclosure. Bro- somebody who is not an expert in the derstand it,’’ Willie said, ‘‘and they kers and lenders did not do enough to area. I assume I am similar to most didn’t explain it to me. I thought if the disclose to and educate consumers. homeowners who cannot read through interest [rate] went down, your pay- Mr. President, I call up amendment all the legal gobbledygook and ment went down. If the interest rate No. 4987 to protect potential home buy- wouldn’t find it particularly edifying if went up, your payment stayed the ers with additional requirements. they did. same.’’ The PRESIDING OFFICER. Is there When low-income homeowners who Willie was now facing mortgage pay- objection to setting aside the pending have fallen into problems responded to ments 50 percent higher than when he amendment?

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00012 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5783 Without objection, it is so ordered. AMENDMENT NO. 4986 TO AMENDMENT NO. 4983 Mr. DODD. Let me say, first of all, I The clerk will report. Mr. BOND. This final amendment will be very brief. I know my colleague The legislative clerk read as follows: limits the responsibility of Fannie Mae from Iowa wants to be heard on the and Freddie Mac for housing entities bill. I wish to say to Senator BOND that The Senator from Missouri [Mr. BOND] pro- poses an amendment numbered 4987 to that receive funding from the Afford- what we will do is try to figure out a amendment No. 4983. able Housing Trust Fund created under way to handle these in order, all three the bill. The amendment prohibits the of them in one or in order, or whether Mr. BOND. Mr. President, I ask unan- trust fund to be used for soft program we will go back and forth. But we will imous consent that the reading of the costs to ensure that any of these funds keep him posted. amendment be dispensed with. be used for bricks and mortar. I do not how long my colleague from The PRESIDING OFFICER. Without It is very simple. I can read the Iowa wants to be heard on the bill. I objection, it is so ordered. whole thing. It says: wish to respond to the Senator from The amendment (No. 4987) is as fol- Notwithstanding any other provision of Missouri on the issues. I presume my lows: the law, Fannie Mae and Freddie Mac shall colleague from Alabama may want to (Purpose: To enhance mortgage loan disclo- not be responsible for any payments either do so as well. We will try to take them sure requirements with additional safe- directly or indirectly to other housing enti- in the order the Senator offered them. guards for adjustable rate mortgages with ties under the Affordable Housing programs We will keep him posted on how we will an initial fixed rate and loans that contain unless these GSEs voluntarily provide fund- a prepayment penalty) ing. None of these funds shall be used for soft proceed. program costs, including staff costs. The PRESIDING OFFICER (Mrs. On page 522, between lines 2 and 3, insert MCCASKILL). The Senator from Iowa is the following: In essence, it is a very simple amend- ‘‘(iii) If the loan is an adjustable rate mort- ment. My concern is that, regardless of recognized. gage that includes an initial fixed interest what one thinks about the GSEs, it is, Mr. GRASSLEY. Madam President, rate— I believe, unprecedented for Congress for the benefit of my colleagues, I ‘‘(I) state in conspicuous type size and for- to step in and say: You are a partially know there is no time limit, but I don’t mat the following phrase: This loan is an ad- privately owned, shareholder-owned en- think I am going to take more than 15 justable rate mortgage with an initial fixed tity, and you shall be paying a tax that minutes and maybe less than that. It is interest rate. Your initial fixed interest rate kind of a rough guess, but I do not in- is AAA with a monthly payment of BBB we determine to a group of other enti- until CCC. After that date, the interest rate ties over which you have no control. tend to take a lot of time. on your loan will ‘reset’ to an adjustable People may like or dislike or want to I wish to start by thanking Chairman rate and both your interest rate and pay- reform the GSEs. But there are a lot of BAUCUS for his courtesy and hard work ment could go higher on that date and in the other GSEs. Are we going to go around in the legislative effort that is part of future. For example, if your initial fixed rate and start telling Sallie Mae, for exam- this banking bill, the part that came ended today, your new adjustable interest ple: You have to fund various of these out of the Finance Committee, the part rate would be DDD and your new payment of the bill that is hopefully going to EEE. If interest rates are one percent higher education programs. than they are today or at some point in the There are other quasi-governmental help the mortgage problem through future, your new payment would be FFF. agencies that I think would be very amendments to the Tax Code. Our goal There is no guarantee you will be able to re- much concerned if Congress started the in the Finance Committee was to de- finance your loan to a lower interest rate practice of taking these entities and velop a bipartisan tax package that re- and payment before your initial fixed inter- telling them where they have to spend sponded to the needs of Americans and, est rate ends.; their funds. This is a backdoor way of in particular, the housing market. We ‘‘(II) the blank AAA in subparagraph (I) to avoiding the honest and straight- have done so. I wish to take this oppor- be filled in with the initial fixed interest tunity to thank Senator DODD and Sen- rate; forward provision of either raising the ‘‘(III) the blank BBB in subparagraph (I) to money through taxes or providing ator SHELBY because they have worked be filled in with the payment amount under other revenue of the Federal Govern- very closely with us in making sure the initial fixed interest rate; ment. our Finance Committee part of this bill ‘‘(IV) the blank CCC in subparagraph (I) to I hope my colleagues will consider all can, in fact, be a part of the bill that is be filled in with the loan reset date; three of these amendments. I look for- before the Senate. ‘‘(V) the blank DDD in subparagraph (I) to ward to discussing them when the time Everybody knows Americans are be filled in with the adjustable rate as if the is appropriate. I thank the manager for struggling to keep their homes and, initial rate expired on the date of disclosure with that, their jobs. Economic condi- under subparagraph (B); allowing me to raise these. ‘‘(VI) the blank EEE in subparagraph (I) to I call up Amendment No. 4986. tions are very uncertain. In uncertain be filled in with the payment under the ad- The PRESIDING OFFICER. The times, it is appropriate that Congress justable rate as if the initial rate expired on clerk will report. develop tax policy addressing the hous- the date of disclosure under subparagraph The legislative clerk read as follows: ing problem and try to bring a little (B); and The Senator from Missouri [Mr. BOND] pro- more certainty to the economic lives of ‘‘(VII) the blank FFF in subparagraph (I) poses an amendment numbered 4986 to our citizens. After all, the housing to be filled in with the payment under the amendment No. 4983. problem is at the root of our current adjustable rate as if index rate on which the economic turmoil. adjustable rate was one percent higher than Mr. BOND. I ask unanimous consent of the date of disclosure under subparagraph that the reading of the amendment be Last year, we responded to the call (B). dispensed with. for help. Congress enacted the Mort- ‘‘(iv) If the loan contains a prepayment The PRESIDING OFFICER. Without gage Debt Relief Act of 2007, which was penalty— objection, it is so ordered. signed into law by the President. This ‘‘(I) state in conspicuous type and format The amendment is as follows: law excludes from income discharges of the following phrase: This loan contains a (Purpose: To clarify that GSEs have no re- indebtedness incurred by taxpayers to prepayment penalty. If you desire to pay off sponsibility for funding housing entities acquire homes. It also extends the tax this loan before GGG, you will pay a penalty under the Affordable Housing program) of HHH.; deduction for mortgage insurance pre- ‘‘(II) the blank GGG in subparagraph (I) to Insert the following at the appropriate miums. be filled in with the date the prepayment place: Earlier this year, Congress acted penalty expires; and SEC. xxx. Notwithstanding any other provi- quickly on a stimulus package that de- ‘‘(III) the blank HHH in subparagraph (I) to sion of law, Fannie Mae and Freddie Mac livered additional relief to the Amer- shall not be responsible for any payments ei- be filled in with the prepayment penalty ican taxpayers. That stimulus package amount. ther directly or indirectly to other Housing entities under the Affordable Housing pro- is just now taking effect as taxpayers Mr. BOND. Mr. President, I ask unan- gram unless these GSEs voluntarily provide have received these rebate checks, be- imous consent that the pending amend- funding. None of thee funds shall be used for cause they are necessary to give the ment be set aside. soft program costs, including staff costs. economy a much needed boost. The PRESIDING OFFICER. Without The PRESIDING OFFICER. The Sen- Earlier this year, the Senate acted on objection, it is so ordered. ator from Connecticut is recognized. a bipartisan tax relief package that

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00013 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5784 CONGRESSIONAL RECORD — SENATE June 19, 2008 was based on the joint efforts of Fi- homeowners. Instead, this is a provi- ceeds from these loans, families will be nance Committee Democrats and Re- sion which helps enable people to keep able to purchase replacement homes. publicans—in other words, almost by their homes and to pay their mort- The elements of the low-income hous- unanimity, a bipartisan bill. The pack- gages. We can thank the leadership of ing reforms will also help disaster-dev- age before us as part of this housing Senators SMITH and KERRY for this im- astated communities. bill is a blend of the Senate package portant provision. While I was thanking Senator BAU- and a House package passed a little Chairman BAUCUS has championed CUS, I suppose I ought to extend that while ago by the other body. We have the nonitemizer deduction for part of beyond Senator BAUCUS to several carefully balanced this tax relief pack- the real property tax paid. It is in this other Senators. I better not name them age being considered today on the bill. Senator KYL wanted assurances because several have come up, and I floor, hopefully balanced it enough that State and local tax authorities will forget somebody. But they have that it will not run into problems when would not pocket this new tax benefit come up to show their understanding of it gets back to the House because cer- with higher property tax assessments. how serious it is in the Midwest and tain House tax policy leaders have This proposal is designed to ensure have offered their help. Some of these agreed to it. that property tax payers, not State and Senators in previous years have gone It addresses the housing downturn local governments, receive the direct through the same destructive natural but is limited so as to ensure that it benefit of this deduction. disasters the Midwest is going through helps the problem and does not create This bill contains a set of reforms to at this very minute. I have informed new problems. Too often, we in Con- the low-income housing credit. Senator Chairman BAUCUS and the leadership gress have to be certain we do not do CANTWELL led this effort. on both sides that the coalition of things too good, that we create more A key additional reform benefits low- member States affected by these floods problems than we solve. We are mind- and middle-income military personnel and tornadoes will refine more tax pro- ful that any relief that benefits one who need housing near bases where posals in the future. We will aim to as- sector of the public does so at the ex- they are stationed. Senator Pat Rob- sist displaced persons and rebuild the pense of another sector. The other sec- erts, a former marine, looked out for businesses and communities affected. tor, then, is the taxpaying population our men and women in uniform. Sen- We will seek to offer them to this bill that carefully manages their family’s ator ROBERTS needs a thank-you for once it is open for amendment. budget, especially as it relates to hous- that. With Senator ROBERTS’ proposal, I spoke in recent days on the issue of ing costs because of the American soldiers and their families in Fort revenue-raising offsets to tax relief. I dream of owning your own home. Riley, KS, and other bases that have rebutted the claims of Democratic lob- Taxpayers bear the burden of a bail- seen recent increases in population will byists who were surprisingly cited in out of these risky mortgages that went have easier access to low-income hous- some press reports as credible sources south, so it is very important that we ing. for the Senate Republican conference. have a compassionate view that recog- This bill liberalizes the ability of the The Democratic lobbyists claimed that nizes that taxpayers pay the ultimate Federal Home Loan Banks to provide Senate Republicans would oppose all tab. As we proceed to this bill, we need assistance to colleges and universities revenue-raising offsets. Some described to keep in mind that very worthwhile affected by the subprime mortgage cri- our position in terms of ‘‘theology.’’ I principle. We need to address the hous- sis. The Home Loan Bank officials in corrected these assertions and pointed ing downturn, but we need to show re- my home State of Iowa suggested this back to Senate floor debates on this straint and we need to limit the relief proposal, and I was glad to pursue it point late last year. For some reason, so that it eases the problem and does and glad it is included. those statements in the CONGRESSIONAL not simply create new problems. We Senator HARKIN, this Senator, and RECORD have been ignored, and Demo- need to be considerate of many Ameri- other Members from the Midwest have cratic lobbyists’ views were sub- cans who work hard to save and buy witnessed the terrible weather that hit stituted. The correct position is as I re- homes and who will ultimately pay the our States recently. state it now. I ask some folks to pay price of this relief. We have seen the damage that has close attention so we don’t get mis- Once again, the Senate is stepping up been done to our communities large understood. to the plate. The tax relief package and small, urban and rural in our home Principle No. 1, if a revenue-raising that is before us helps encourage home States. It is a devastating flood. Unfor- proposal makes good policy sense, Sen- ownership but also provides targeted tunately, the damage goes on as I ate Republicans will support it. Prin- relief to homeowners who are looking speak, only a little further down- ciple No. 2, the revenue raised should to work out of this rough patch they stream. All the hurt has not been cal- be used for new tax relief. Principle No. are in when they face foreclosure or culated at this point. Once again, I 3, the revenue raised should not be re- nearly face it. have to thank Chairman BAUCUS for quired for extending current law tax The centerpiece of this bill is a tem- pledging to help us in the Midwest. relief. I have explained the reasons be- porary $8,000 tax credit to help first- Senator BAUCUS came to me and of- hind that principle. Suffice it to say time home buyers buy homes, includ- fered that help. That is something the that we on this side don’t believe in ing homes that are in foreclosure. people of Iowa and the Midwest appre- sliding down a slippery slope of guaran- There is a glut of homes on the mar- ciate. Having the chairman of a very teeing higher taxes and higher spend- ket. The glut is depressing home val- important committee in the Senate on ing. Spending drives current and future ues. It is important that this excess in- your side is important. We will not for- deficits. ventory is moved so that we help re- get that. This bill confirms the Senate Repub- tain home values of others who are not In this bill, we have a proposal spe- lican conference principles on the use in foreclosure or have been foreclosed cifically targeted to help people who of revenue-raising offsets. This bill on. have lost their homes to the floods. contains new tax policy. This new tax On that point, I think it is necessary The proposal is contained in the mort- policy is offset with revenue raisers for all of us to show praise and respect gage revenue bond package. It is pat- that a bipartisan majority in the Sen- for the efforts of Senator ISAKSON from terned after a proposal adopted over a ate consider improved tax policy. The Georgia for doggedly pursuing this pro- decade ago to deal with floods from the main one would put in place a report- posal. He has a very important and un- mid-1990s. ing regime on credit card payments to derstanding background as a realtor The proposal would waive the first- merchants. It is a Treasury tax gap and homebuilder. He helped us shape time home buyer requirement and lift proposal. The other significant revenue the proposal. the individual income limits. With this raiser would clarify the home sale ex- The bill also increases the cap for policy in effect, States such as Iowa, clusion rules for second homes, usually mortgage revenue bonds to give people Wisconsin, Illinois, Indiana, Missouri, where vacation residences are involved. with distressed loans additional op- and Maine will be able to offer low-in- The revenue losses related to disaster tions for refinancing. I wish to make it terest loans to families who have lost assistance, however, are not offset. clear that this is not a bailout for their homes to the flood. With the pro- That accounting is consistent with the

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00014 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5785 bipartisan congressional practice on The PRESIDING OFFICER. The Sen- This amendment is a response. It emergency spending and tax relief. ator from Connecticut. would provide tax relief for home- It has long been said that the Amer- Mr. DODD. Madam President, we are owners, for home buyers, and for home- ican dream is to own your own home. going to try to work out an arrange- builders. Unfortunately, the subprime mortgage ment so people have some sense of the It would provide an additional $11 bil- crisis has turned that dream into a order in which people will be heard. We lion of mortgage revenue bonds so that nightmare for many Americans. The now have three Bond amendments. State housing agencies can imme- bipartisan tax relief provisions from There is an amendment by Senator diately respond to the housing down- the Senate Finance Committee that DOLE that has been offered. Obviously, turn. This would help homeowners have been worked out in a bipartisan we have the pending amendment of avoid foreclosures, and it would in- way—and, I believe, in a bicameral way Senator REID. These are all second-de- crease first-time home purchases. through Senator BAUCUS—are in this gree amendments to the Reid amend- Mortgage revenue bonds are tax-ex- bill. They aim to restore that Amer- ment. At some point, I will want to empt bonds issued by State and local ican dream. We do it in a very respon- bring closure to these amendments so housing finance agencies. The bonds sible way. we can deal with them. Senator help those agencies to provide mort- I yield the floor. ISAKSON may have an amendment. I gages for home buyers at below-market The PRESIDING OFFICER. The Sen- would like to get to a point where we rates of interest. ator from North Carolina. can manage those amendments, debate The virtual collapse of the subprime and affordable mortgage markets has AMENDMENT NO. 4984 TO AMENDMENT NO. 4983 them, and then ask the leadership for Mrs. DOLE. I ask unanimous consent an appropriate time to have a series of increased the demand for mortgages fi- that the pending amendment be tempo- maybe three or four or five votes, de- nanced through mortgage revenue rarily set aside so that I may call up pending upon what is necessary. bonds. Increasing the cap on mortgage amendment No. 4984, that it be re- I yield the floor to the request for a revenue bonds and providing States the ported by number and then set aside. time sequence of speakers, if I may. option to refinance subprime mort- The PRESIDING OFFICER. Without The PRESIDING OFFICER. The Sen- gages can allow State housing agencies objection, it is so ordered. ator from Montana. to immediately respond to homes at The clerk will report. Mr. BAUCUS. Madam President, fol- risk of foreclosure. The assistant legislative clerk read lowing my remarks, I ask unanimous And additional mortgage revenue bonds can also help clear out the glut as follows: consent that Senator CASEY be recog- of homes on the market. Additional The Senator from North Carolina [Mrs. nized to speak for 12 minutes, Senator mortgage revenue bonds can lead to DOLE] proposes an amendment No. 4984 to ISAKSON be recognized to speak for 10 amendment No. 4983. minutes and, following Senator more first-time home purchases. The amendment also would provide The amendment is as follows: ISAKSON, Senator SANDERS be recog- broad-based tax relief by expanding the nized to speak for 15 minutes. (Purpose: To improve the regulation of number of people who may deduct appraisal standards) The PRESIDING OFFICER. Without property taxes. Currently, homeowners objection, it is so ordered. At the appropriate place, insert the fol- are allowed to deduct local real estate lowing: Mr. BAUCUS. Madam President, Con- property taxes from their Federal tax SEC. ll. REGULATION OF APPRAISAL STAND- fucius said: ARDS. returns only if they itemize. According The strength of a nation derives from the to the Joint Committee on Taxation, Section 1319G of the Federal Housing En- integrity of the home. terprises Financial Safety and Soundness more than 28 million taxpayers pay Act of 1992 (12 U.S.C. 4526) is amended by add- Today we are here to protect the property taxes, but do not itemize. ing at the end the following new subsection: strength of our Nation. We are here to This proposal would allow these 28 ‘‘(d) REGULATION OF APPRAISAL STAND- help keep families in their homes. million taxpayers to deduct the ARDS.— The tax provisions in the amendment amount of their property taxes, up to ‘‘(1) IN GENERAL.—Not later than 120 days before us are meant to stabilize the $500 for individuals and $1,000 for mar- after the date of enactment of this sub- housing market and boost our econ- section, but not later than December 31, 2008, ried filers. They could take this deduc- omy. They are designed to provide tem- tion even if they did not itemize their the Director shall issue in final form a regu- porary, targeted, and timely tax relief lation that establishes appraisal standards deductions. for mortgages purchased or guaranteed by for the housing market. This change would benefit low-in- the enterprises. In 2007, 1 percent of all homes were in come individuals. It would benefit ‘‘(2) CONSISTENCY.—In issuing the regula- default. That is more than 1.2 million those who have already paid off their tion required by this subsection, the Direc- homes. The Nation’s 2007 foreclosure mortgages and thus don’t have that tor shall ensure that the regulation is con- rate was 21⁄2 times what it was in 2005. reason to itemize. It would benefit sistent with appraisal regulations and guide- In my home State of Montana, the young families just starting out, and it lines issued by the Federal banking agencies 2007 foreclosure rate was up almost 30 (as that term is defined in section 3(z) of the would benefit senior citizens. percent from 2006 and more than 50 per- The Congressional Research Service Federal Deposit Insurance Act) and the Na- cent from 2005. tional Credit Union Administration, includ- estimates that nearly 130,000 property ing regulations and guidelines related to the And the number of foreclosures con- taxpayers could benefit in my home independence and accuracy of appraisals, and tinues to grow. Nationwide in May, the State of Montana alone. do not conflict with any other banking regu- number of homes receiving a fore- Listings of distressed properties lations. closure-related notice was up 7 percent dominate the real estate market. In ‘‘(3) APPLICATION.—The regulation issued from the month before, and up 48 per- the first quarter of this year, one out pursuant to this subsection shall supersede cent from a year before. This means of every four home sales was a dis- the terms of any agreement relating to ap- that 1 in every 483 American house- tressed sale. The papers are full of fore- praisal standards entered into by the Direc- holds received a foreclosure notice last tor or the enterprises prior to or after the closures and vacant new homes. issuance of the regulation required by this month. That is a record high. As of April 2008, there were more subsection in final form, to the extent that Behind every foreclosed property, than 456,000 newly constructed homes any such agreement is inconsistent with the there is a family. There is a family los- for sale on the market. That is more regulation. The Director shall have the au- ing its home, and there is a family los- than 10 months worth of supply. And thority to make determinations, at the Di- ing a piece of its future. according to the National Association rector’s discretion and in response to re- Our Nation’s current economic weak- of Realtors, 41⁄2 million existing homes quests for such determinations, as to wheth- ness is largely a result of the weak are for sale on the market. er any such agreements are, or have become, housing market. More than 5 million To help reduce the excess inventory inconsistent with applicable regulations, and households now owe more on their any terms of any such prior agreement that of foreclosed, vacant, and existing are consistent with the regulation shall not mortgage than their house is worth. homes, the amendment includes a one- be effective until 1 year following the date of That is about 1 out of every 10 home time home buyer credit of $8,000. enactment of the issuance of the regulation mortgages. As home prices continue to The credit would apply to first-time in final form.’’. fall, these numbers will only get worse. home buyers. It would begin to phase

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00015 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5786 CONGRESSIONAL RECORD — SENATE June 19, 2008 out for home buyers with incomes of cilitate electronic transactions would payment of $925 per month. She told $75,000 for individuals and $150,000 for do the same. her broker she did not want anything joint filers. The purchase of the home In response to concerns about pos- with tricks in it that would change her would have to be on or prior to April 1, sible burdens this proposal could put payment, and that is what she was told 2009. And the credit would be repaid on small e-business sellers, the pro- she was signing. over 15 years at zero percent interest. posal contains a de minimis exception. I would like to read some of her testi- The short-term nature of this credit The exception excludes from the re- mony of what happened next. These are is critical. It would help to provide im- porting requirements operations with her words: mediate stimulus to put homebuilders, aggregate sales of $10,000 or less a year. Just 10 days later we received a letter in and the housing industry, back on The exception would also exclude a vol- the mail stating that a mistake had been track, but it would also avoid oversub- ume of 200 transactions or fewer. made at closing. The interest rate we were sidizing the housing industry. The proposal gives ample time to given was not going to be 7% but rather The amendment would also make banks and others so they can program 10.95%. Our payments would not be $925 but rather $1200. We considered backing out critical improvements to the Low In- their systems and verify the informa- then, but we had already moved into [our] come Housing Tax Credit program. tion they need from sellers before home. Our children were settling in, to pack This program is the engine that drives issuing the information documents. everything back up was something we could low-income rental housing in America. This proposal does not raise taxes on not do. We had already put so much money But it is long overdue for a tuneup. anyone. These information reports out. Fred and I— The amendment would increase the would just cause people to file more ac- Fred is her husband— total number of credits available by 10 curate returns. Fred and I decided that although we would percent per State. And the amendment The administration has included this struggle, we would make it. would broaden the investor class by al- proposal in its annual budget for the All of the evidence presented to the lowing the credit to be taken against last 3 years. Earlier this year, Senator Banking Committee in hearings the AMT. GRASSLEY and I released a bipartisan stretching back over a year indicates The State housing finance agencies staff draft of the proposal for public that many of the homeowners who find are good stewards of this Federal pro- comment. Working together with the themselves in trouble started with a gram, and the amendment would give House, we have taken these comments story just like Ms. Cruz-Rivera’s story. these agencies more discretion to allo- into account to develop a proposal that This is not simply a problem in some cate credit dollars to projects that the reflects industry practices and will im- cities. State deems a high priority. prove tax compliance. A leading research institution in These tuneups would help to make The amendment also enhances sev- Pennsylvania, the Keystone Research this engine run more smoothly, and eral IRS penalties. These penalties en- Center, found nine counties in Pennsyl- they would lead to an increase in af- courage the filing of timely and accu- vania where subprime mortgages make fordable rental housing across the rate tax and information reporting re- up 35 percent of all mortgages—35 per- country. turns. These filings are the corner- cent. One of those nine is Philadelphia. The amendment would also allow stones of effective tax administration The other eight counties in this Key- taxpayers to choose to take a refund of and voluntary tax compliance. stone Research Center survey are the AMT or R&D credits in lieu of bonus A lot of irresponsible actions led to following counties—Cameron, Clear- depreciation deductions. Companies the current housing crisis. But now a field, Fayette, Forest, Jefferson, Mon- without Federal tax liability cannot lot of responsible homeowners, home roe, Venango, and Warren. use the tax deductions. But under this buyers, and homebuilders are caught All of those counties outside of amendment, they could take advantage up in the mess, and they cannot afford Philadelphia that I just mentioned are of a refund, and they could use that to wait any longer for our help. rural counties for the most part. So funding invest in capital assets. That The tax provisions in this amend- this is not just a problem in cities and would create and maintain jobs. ment would go a long way to address urban areas. It is a major problem in These proposals would be fully paid the housing downturn and the eco- rural counties in Pennsylvania and for by responsible offsets. As much as nomic weaknesses in our country. So I across the country. possible, we should avoid increasing say, let’s help these folks. Let’s help More than 1 million homes are now our national debt and our reliance on them keep their homes and thereby in foreclosure—a new national record, foreign creditors. help them sustain the economic unfortunately. Over 8,400 homes are en- The amendment includes a House- strength of this Nation. And let’s adopt tering foreclosure every day—8,400. Un- passed proposal to close a loophole in- this housing amendment. less we act, an estimated 3 million volving the sale of second homes. It Madam President, I yield the floor. homes will enter foreclosure this year, would apply to houses that are used The PRESIDING OFFICER. The Sen- and 2 million homes will be foreclosed both as a principal residence and for ator from Pennsylvania. upon in that time. other purposes. An example would be a Mr. CASEY. Madam President, I rise We know the job losses: 324,000 jobs principal residence that also was used today to talk about the state of the lost already this year. We know the as rental property. American economy in the midst of our data from the economists. One econo- Under current law, an owner can ex- current housing crisis, and, of course, mist, Robert Shiller, has estimated clude income from the sale of that sec- the legislation that is before the Con- that the subprime and foreclosure cri- ond home. The owner just needs to gress today and the need for action in sis could cost American homeowners $6 have lived in the home for 2 out of the this Congress, in this Senate, not just trillion in lost household wealth—a last 5 years. for Wall Street firms but for Main record. That is $80,000 per homeowner. The proposal would limit the gain Street families and small businesses. At the same time, the average Amer- that the owner could exclude from in- A little over a month ago, the Senate ican family income is just $50,000 a come when the owner sells the resi- Banking Committee held a field hear- year. We know the adverse impact it dence. The idea behind the proposal is ing in Philadelphia—I think the first of has had on student loans. There is that a personal-income exclusion its kind since this Congress began and problem after problem resulting from should be limited to the personal use of this Senate convened last year. Chair- the foreclosure crisis. the residence. man DODD chaired the hearing, con- So what do we do? We should pass the A second pay-for would require infor- vened it, and I was with him that day. legislation on which Senator DODD has mation reporting on credit card trans- One of the witnesses was a subprime worked so hard, working with the actions. It would also apply to many borrower. Her name is Yajaira Cruz-Ri- ranking member, Senator SHELBY. online transactions. Merchant banks vera. In 2005, she and her husband pur- Let’s quickly go through the legisla- that settle credit and debit card sales chased a home. She was told by her tion. would report annual gross payments to broker she would get a fixed-rate loan. No. 1, government-sponsored enter- the businesses making the sales and to She made out a family budget, and she prise reform legislation to give an ef- the IRS. Third-party networks that fa- was told she was getting a fixed-rate fective regulator for the GSEs; No. 2,

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00016 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5787 the HOPE for Homeowners Act would People know the acronym ACORN, loaned money that was raised on Wall establish a new initiative at the FHA the Association of Community Organi- Street by investment bankers and un- to prevent foreclosures; No. 3, the zations for Reform Now. They are help- derwritten by Moody’s and Standard & SAFE Mortgage Licensing Act, cre- ing people such as Ms. Cruz-Rivera. Poors. Moody’s and Standard & Poors ating a Federal registry and estab- They are helping a lot of other people. underwrote securities that were bought lishing minimum national standards We hear a lot of talk in this body and around the world by investors, that for brokers and lenders; No. 4, the across the way in the House, the other paid a high dividend but were on very Foreclosure Prevention Act, providing body, about moral hazard. People talk risky subprime credit. That is where assistance and counseling so needed in about that issue all the time—that the fault lies—Moody’s and Standard & this crisis; No. 5, the Housing Assist- some people should have known better, Poors and on the investment banking ance Tax Act of 2008, providing tax ben- and you can fill in the blank about community. efits for homeowners, home buyers, and that. As a parenthetical suggestion, I hope homebuilders aimed at providing hous- It is not often we hear economists Wall Street is listening because what is ing market recovery. talking enough about morality when it happening in the commodities market Unfortunately, there are some Sen- comes to this issue. In fact, the situa- is the same guys doing the same thing ators in this Chamber who do not seem tion we find ourselves in today is a di- again. If you look at the rapid price of to see the need for action on this crisis. rect result of parts of this industry— all commodities, they are going up be- I want to show a chart which summa- not all, but parts of this industry—try- cause of a huge influx in the commod- rizes the principles of this basic legis- ing to maximize profit without any re- ities market. The only position-limited lation. It is very important to high- gard to any sense of morality or stand- people in the commodities market are light these. There is a lot of rhetoric ards. investment bankers. They are creating that is misleading. So I find it ironic that the greed that paper and they are trading paper and Basic principles: Here is what hap- they are getting the Yale endowment pens with this legislation. No. 1, it cre- some of us have been talking about is fund, the Princeton endowment fund, ates new equity for homeowners. We not included in that definition of and teachers’ pension funds going into have to do that. No. 2, there is no bail- ‘‘moral hazard.’’ But there are solu- these as if they are investments, and out for investors or lenders. We have tions out there. they are not investments. They are a heard a lot of that talk here. It is not I will conclude with this: The city of true. This is not a bailout. This is a Philadelphia recently announced a pro- hedge in commodities. So that is just a little early warning way to dig our economy out of a huge gram that will specifically target bor- shot. If we will look closely at this, I hole. No. 3, borrowers do not receive a rowers who cannot afford payments on think we can find the culprit to the windfall. They have a stake in this, and adjustable-rate mortgages and are in subprime may actually be a significant they have to sacrifice as well. It is not danger of foreclosure. Any property contributor to what is going on in com- any kind of a windfall for borrowers. scheduled for sale by the city of Phila- modities. Finally, and maybe most importantly delphia right now by the local sheriff’s But, again, to Senator DODD, Senator for people who are following this de- office will be referred to officials who SHELBY, Senator BAUCUS, and Senator bate, this is not taxpayer money we are will in turn negotiate with lenders in an attempt to restructure the loan so GRASSLEY, thank you very much for talking about. what is basically a fine piece of legisla- OK. So this is a very responsible the borrower can afford the monthly tion. I urge you to look at the effective plan. I want to return to the story I payments. date of the tax credit that is included. started of Ms. Cruz-Rivera. She had I commend the city and especially As I read the bill, it includes the origi- asked for and was told, as I mentioned Mayor Nutter, the mayor of Philadel- nal dates from 2 months ago, which before, she was receiving a fixed-rate phia, for his leadership on this and means the tax credit, when it goes into mortgage with no gimmicks and no many other housing issues. It is criti- tricks. Then, 10 days after closing, she cally important we remember there is, effect, will end at the end of April next found out her interest rate would not in this nightmare for so many families, year, which will be less than a year. be 7 percent but 10.95 percent. The pay- solution-oriented thinking out there in May and June are the prime buying ment would go, as said before, from addition to the important legislation months in real estate. What we are try- $925 to $1,200. we have before us. ing to do is induce a decline in the in- The story does not end there, unfor- The time has come for the Senate to ventory of houses on the market. I tunately for her. She and her husband finally act—to act, not just to talk but know it was not intended, but I think sat down, and they decided to tough it to act on this issue—to put a floor the managers should take a look at out, to try to work their way through under the housing market. It is time at that. this adverse news they got. Here is long last for the Congress, and espe- Secondly, I know there is a difference what she said. I am quoting her again: cially for the Senate, to finally act, but between the House and the Senate with Then, in 2007, the unthinkable happened. also in the process of acting, to help regard to the effective date over the Our rate adjusted upward and our new pay- families stay in their homes. GSE regulator for Freddie and Fannie. ment was now $1,671 a month. A home we I yield the floor. One side wants it immediate; one side thought we were getting for $925 a month in The PRESIDING OFFICER. The Sen- wants it in 6 months. We do not need to 2005 is costing us nearly double that today. ator from Georgia. have this bill go down because they She is talking about her husband Mr. ISAKSON. Madam President, I cannot get their act together. So I again. She said: rise, first of all, to commend Senator hope they will work to find common My husband works 16 hour days, 6 days a DODD, Senator SHELBY, Senator GRASS- ground on the effective date. On the week, but still we are not able to keep up LEY, and Senator BAUCUS on a piece of FHA refinance program—Senator with the payment. legislation that is important, and CASEY is precisely correct. This is not We explored refinancing but now our credit a bailout for the lenders. This program is damaged and on top of that we have a re- which I will vote for. payment penalty; if we do refinance we have I am going to talk for a few minutes allows for the refinancing of a troubled to pay GMAC a huge fee upfront. We have about some suggestions for the man- subprime loan whose payoff amount is been trapped into a terrible loan by greedy, agers of this bill to think about as we more than the value of the house be- predatory and fraudulent lending practices. get toward a final managers’ amend- cause of the decline in the market- So that is the reality of what we are ment at the end of this debate because place. For it to be refinanced it re- talking about. We are not talking there are a couple technical changes quires the lender to take the hit be- about bailouts. We are not talking that could make a significant dif- tween the amount owed and the mar- about going easy on people. We are ference. ket value. So the loss the lender is talking about helping people who, in But, first of all, I want to make sure going to have to be recognize in a fore- many cases, were deceived deliberately one thing is said. We hear a lot about closure will, in effect, have to be recog- by players in the market who were un- bailing out lenders and lenders being nized in a refinance, but the home- regulated and getting away with mur- bad guys. Let me tell you something. owner stays in the house and the val- der—almost literally. The people who originated these loans ues in the neighborhood stabilize. We

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00017 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5788 CONGRESSIONAL RECORD — SENATE June 19, 2008 are doing a good job, in my opinion, of over some of the terms that the House happens to them next winter when the putting an end to what is a desperate changed them to with this tax credit, cost of home heating oil is off the roof. downward spiraling in the housing but it still accomplishes its purpose. It As a result of high oil and gas prices, market which is affecting the economy is a tax credit of $8,000 to a first-time the cost of food and other products is because most Americans consider their homebuyer with income limits of also rising, and our entire economy— equity their line of credit for their con- $150,000 for a couple and $75,000 for an and, in fact, the world economy—is suf- sumer spending. With that equity van- individual to go into the marketplace fering. ishing because of increased inventories, and buy and occupy—not as an investor The question that millions of people increased foreclosures, and increased but to occupy as an owner—standing are now asking is pretty simple. They vacant houses, we have a very big prob- inventory, new or resale, in the United want to know what this Congress can lem. States of America. That is going to be do now—not in 10 years or in 20 years So I wish to commend Senator DODD a big help to put a little fuel and en- but now—to lower the outrageously and Senator SHELBY. Some of this is ergy and inertia behind a real estate high price of oil and gas. Further, they technical, but it needs to be said. market that is stagnant. want to know what we can do long Freddie Mac and Fannie Mae saved the So I thank Senator DODD, Senator term to make sure our country is en- American housing market in the early SHELBY, Senator GRASSLEY, Senator ergy independent; that we don’t con- 1990s when the savings and loans col- BAUCUS, and particularly the Finance tinue to import huge amounts of oil lapsed. There was no liquidity in Amer- Committee staff who were so coopera- from the Middle East or elsewhere. ica for mortgages. Had we not created tive in working on this concept. I think They want to know what we are going those government-sponsored entities we are going to see it prove to make a to do in the midst of all of this to ad- and allowed them to securitize mort- marked difference. If that end date of dress the crisis of global warming and gage paper and operate to provide the April 30 is changed in the final amend- the droughts and the severe weather liquidity in the markets, there would ment to the end of June of next year, disturbances and the floods that we are be no mortgages for the American peo- we will incorporate 2 more months seeing as a result of global warming. Lastly, they want to know in the ple, and we would have a disaster on where it can have an incentive effect. midst of all of this, long term, how do our hands. It would not affect the scoring because we make sure that the cost of energy is I appreciate the final language ad- the scoring was done as if it was done affordable. These are the issues the dressing two of the three concerns I in a 12-month calendar year. Congress has to address. had with the GSEs. No. 1, I am glad the So to Chairman DODD and to Ranking But let’s be very clear. These issues House and Senate could agree on loan Member SHELBY and Senator BAUCUS will not be debated in an intellectual limits for both conforming and noncon- and Senator GRASSLEY this is a very realm where we are just trading ideas. forming jumbo loans. If we had not important piece of legislation. America This debate is going to be clouded by done that, we would have provided li- has a serious problem. This doesn’t bail the enormous power and money of spe- quidity for mortgages that we didn’t anybody out, but it incentivizes buyers cial interests. need to finance or refinance and not to come back to the marketplace. It Since 1998, the oil and gas industry enough liquidity for mortgages that provides liquidity to refinance loans has spent over $600 million on lob- are needed in the marketplace, particu- that are underwater. It motivates, in- bying—$600 million on lobbying—and larly in high-cost areas around the spires, and provides liquidity in the since 1990, they have made over $213 country. marketplace through Freddie and million in campaign contributions. So Secondly, I appreciate the provision Fannie that does not exist right now. they are extremely powerful. They for the ability of Fannie Mae to port- Failure of the Congress to act, in my have an unlimited supply of cash. They folio jumbo loans because if they judgment, is going to cause us to have are using that power and that money couldn’t do that, there would be no li- a protracted and devastating economic to influence this debate. Anybody who quidity. But I still question whether decline resting solely on the fact of the doesn’t understand that is very naive, the language in the bill as it stands decline in the values of homes in Amer- indeed. now directs more securitization and ica, the increase in the number of fore- If we are serious about lowering oil less portfolio. If you have too much closures, and the lack of liquidity in and gas prices today in a significant securitization but don’t have the op- the lending market. way, it seems to me we have to address portunity for liquidity to be provided I encourage my colleagues to vote for two fundamental issues. First, the re- by letting these entities carry that on this legislation. I hope the President ality is that the American people are their balance sheet, then the effect is will sign it. Again, I thank the Mem- getting sick and tired of paying over $4 you say you are doing something, but, bers of the Senate who worked so hard for a gallon of gas at exactly the same in fact, you don’t provide liquidity. But to provide good, substantial legislation time as the major oil companies are I do appreciate very much the man- to the housing market in the United making record-breaking profits and agers of the bill making those changes. States of America. providing their CEOs with outrageous Lastly, with regard to the housing I yield the floor. compensation packages. Enough is tax credit, I appreciate what Senator The PRESIDING OFFICER. The Sen- enough. The greed of the oil industry GRASSLEY said, and I appreciate the ator from Washington is recognized. apparently has no end, which is why kindness of Senator DODD in the origi- Mrs. MURRAY. Madam President, I Congress must impose a windfall prof- nal debate by incorporating in the Sen- ask unanimous consent that following its tax and use some of that money to ate bill substantially the amendment the remarks of the Senator from give back to people through rebate that I offered on the floor when this Vermont, that I have 7 minutes as in checks. bill first came to the Congress. I was morning business. In the last 2 years alone, ExxonMobil around in the real estate business back The PRESIDING OFFICER. Without has made more profits than any cor- in 1974 when America had a similar cri- objection, it is so ordered. poration in the history of the world, sis to the one we have today. The Con- The Senator from Vermont is recog- making over $40 billion last year alone. gress of the United States passed a nized. But ExxonMobil is not alone. Chevron, $2,000 tax credit to buyers who bought GAS PRICES ConocoPhillips, Shell, and BP have a standing vacant house in America. Mr. SANDERS. Madam President, also been making out like bandits. Within a year, we absorbed substan- every American understands that we Last year, BP, for example, announced tially all of the standing inventory in now have a national crisis in terms of a 63-percent increase in their profits the country and revitalized the housing the outrageously high price that we are for the first quarter of this year. As a market, revitalized equities and val- paying for energy. In Vermont and all matter of fact, the five largest oil com- ues, and we came out of what was a over this country, workers are won- panies in this country have made over very substantial real estate-induced re- dering how they can afford to fill their $600 billion in profits since George W. cession. gas tanks. Truckers using diesel are Bush has been President, while work- I would have preferred some of the going out of business. Senior citizens ing people are paying $4, $4.20 for a gal- terms that I had in my amendment and others are worried with dread what lon of gas. That is unacceptable.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00018 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5789 What have they been doing with fund managers are driving up the price and the potential there is enormous. these huge profits? One of the things of oil in the unregulated energy futures That will help us deal with greenhouse they have been doing is to make sure market. There are estimates that a gas emissions, in terms of global warm- that the CEOs of their companies are number of committees in the Senate ing and, in the process, we can create extremely well compensated. In 2005, have heard from different experts who millions of good-paying jobs. Lee Raymond, the former CEO of testified that the price of a barrel of oil Let me conclude by saying that if ExxonMobil, received a total retire- today is 25 to 50 percent higher than it this Congress, in the very short term, ment package of over $398 million. Peo- should be because of excessive manipu- does not deal with these issues, there ple in Vermont and around America lation of oil futures markets and exces- are going to be people who are going to are wondering how they are going to sive speculation. This is an issue that go cold this winter, not only in the stay warm next winter. The former must be dealt with. Northeast but all over the Northern CEO of ExxonMobil receives a retire- Some people say: Well, we don’t tier of this country. That is why I am ment package of $398 million. know anything about this. This has going to do my best in this bill, and/or In 2006, Ray Irani, the CEO of Occi- never happened before. Wrong. As I as soon as possible, to bring forth an dental Petroleum—the largest oil pro- think most Americans understand and amendment to substantially increase ducer in Texas—received over $400 mil- remember, manipulation of energy funding for LIHEAP. lion in total compensation. That is markets is nothing new. It is recent The National Governors Association going on all over the industry: the history. Everybody remembers that in supports over $5 billion for LIHEAP. heads of these corporations who are 2000 and 2001, Enron successfully ma- They are exactly right because, as the making record-breaking profits receiv- nipulated the energy markets on the price of home heating oil and other ing huge compensation packages. west coast, driving up prices by 300 per- fuels explodes, we are going to simply The situation is so absurd and the cent. During the midst of that con- need to substantially increase funding greed is so outrageous that oil com- troversy, they were saying: Oh, it is for LIHEAP if we are going to make pany executives are not only giving not us, it is supply and demand. It was sure people don’t go cold this winter. I themselves huge compensation pack- them, and some of those guys are now look forward to working on this issue ages in their lifetimes, but they have in jail for the fraud they committed on in a bipartisan manner. also created a situation, if you can be- the people of this country. That was Bottom line: Short term, going after lieve it, where they have carved out Enron. But it is not just Enron. the oil companies and dealing with huge corporate payouts to their heirs if In 2004, energy price manipulators speculation. Long term, we need to they die while they are on the job. It moved to the propane market. That transform our energy system away never ends. year, the CFTC found that BP artifi- from fossil fuels to sustainable energy. Let’s be clear. Oil companies have a cially increased propane prices by pur- We must substantially increase funding right to make a profit, but they do not chasing enormous quantities of pro- for LIHEAP. have a right to rip off the American pane and withholding the fuel to drive I yield the floor. people. prices higher. BP was fined $303 million The PRESIDING OFFICER. The Sen- Some of my Republican friends claim for manipulating propane prices. ator from Washington is recognized. that big oil needs to keep these huge Again, this is not a new concept; that GAO SUSTAINS BOEING’S PROTEST windfall profits so they can increase is what they do. Mrs. MURRAY. Yesterday, the Gov- production and build more refineries. In 2006, energy price manipulators ernment Accountability Office issued They are going to take this money and moved to the natural gas market when its ruling on Boeing’s protest of one of they are going to use it to create more Federal regulators discovered that the the largest defense contracts in his- oil for the benefit of the American peo- Amaranth hedge fund was responsible tory: the Air Force’s decision to choose ple. That particular argument does not for artificially driving up natural gas the European company Airbus to sup- hold water. Big oil companies have prices. Amaranth cornered the natural ply the next generation of aerial re- been making windfall profits for over 7 gas markets by controlling as much as fueling tankers. long years, and they are not using 75 percent of all of the natural gas fu- In that ruling, the GAO agreed with these profits to build more refineries or tures contracts in a single month. Am- Boeing that there were fundamental to expand production. Instead, they are aranth eventually went out of business, flaws in the process from the very be- using this money to buy back their went bankrupt, and the price of nat- ginning. GAO’s attorneys found the Air own stock, increase dividends to their ural gas went down. So if you are look- Force made a number of significant er- shareholders, and, as I just mentioned, ing at Enron, BP, Amaranth, why rors that unfairly misled Boeing and pay outrageous compensation packages would anybody be shocked that today favored Airbus. to their CEOs. there are financial institutions manip- They recommended that the Air Since 2005, the five largest oil compa- ulating the oil markets as we see it? Force reopen the contract, get new pro- nies have made $345 billion in profits, The Commodity Futures Trading posals, and make a decision that cor- but they have spent over $250 billion Commission has the authority and the rects the errors GAO found. out of the $345 billion buying back responsibility to prevent fraud, manip- Madam President, to me, that deci- stock and paying dividends to their ulation, and excessive speculation in sion was not a surprise. Air Force and shareholders. That is where their prof- U.S. commodity markets. Unfortu- Pentagon officials have told me, time its are going, not investing in future nately, this authority and responsi- and time again, that they followed the oil production. Last year, ExxonMobil bility has largely been abdicated law and this contract would stand up spent 850 percent more buying back its through the use of over-the-counter en- to review. own stock than it did on capital ex- ergy derivatives that are largely un- But since the very beginning, it has penditures in the United States. regulated and by foreign boards of been very clear that Airbus tankers did Here is my final point on that issue: trade that have received no-action let- not meet the Air Force’s needs—no The $38 billion in windfall profits that ters from the CFTC to operate termi- matter what its public relations cam- ExxonMobil gave back to shareholders nals inside the United States, trading paign has said. last year could have been used to re- U.S. commodities to U.S. investors free Even though the Air Force claimed it duce gas prices at the pump through- from regulatory oversight. had selected the cheaper plane and out the United States by 27 cents a gal- That is an issue we must deal with made no mistakes, we learned last lon for the entire year. and we must deal with now. If we are week it had made a critical error when Dealing with the greed of the oil serious about lowering oil and gas calculating the operating costs of the companies is one immediate issue that prices today, we have to deal with the two tankers. The Air Force is now ac- we have to address. The second one greed of the oil companies and with the knowledging the Airbus plane actually deals with the growing reality that speculators. Long term, of course, we costs tens of millions of dollars more. Wall Street investment banks, such as have to move this country away from Two weeks ago, Defense Secretary Goldman Sachs, Morgan Stanley, and foreign oil, away from fossil fuel, to en- Gates forced out the top two Air Force J.P. Morgan Chase, and greedy hedge ergy efficiency, to sustainable energy, leaders—Secretary Michael Wynne and

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00019 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5790 CONGRESSIONAL RECORD — SENATE June 19, 2008 his Chief of Staff, GEN Michael ican taxpayers and for America’s secu- Senator JOHNNY ISAKSON, of Georgia, Moseley. By doing that, he expressed a rity for the future. deserves a great deal of credit. He serious lack of confidence in their lead- For months now, I have been saying brought up the idea of trying to create ership and lack of oversight. All along, this process was flawed. I have been some incentives for those who might the Pentagon has refused to answer saying we should not hand over billions purchase foreclosed properties. In his even basic questions about this con- of dollars and thousands of jobs and previous life, he worked in this area, tract. that Boeing should build those tankers. and he has a firm knowledge of it. So I, and the many others who have The GAO’s decision backed up all my his cooperation on that, as well as raised concerns about the Air Force’s concerns. The process was flawed. Now other aspects of the bill, his enforce- decision, now expect a thorough and we need to know why. We should not be ment and support of this legislation honest response from the Pentagon to buying more expensive planes built in and his intention to back it is a further the GAO’s decision. France. That seems obvious. With a indication of the effort we have made But as I have said all along, the GAO level playing field, Boeing builds the on a bipartisan basis to make this a ruling answers only one overarching best tankers at the best price. good bill, not just because it has bipar- question that has been raised in this By reevaluating this deal with the tisan support, but I think that is indic- process and that is whether the Air proper criteria that GAO outlined, I am ative of the kind of effort that has been Force followed the letter of the law confident the Air Force will, in the made that brings us to this moment. when it chose Airbus for the contract. end, agree with me and award this con- I note that in this morning’s local That means that even if it was obvious tract to Boeing—I hope in short order. newspaper, the Washington Post, the that Airbus’s plane was wrong for the I hope our airmen and airwomen will leading headline is, ‘‘DC Region’s Fore- war fighter and for the taxpayer, it soon have the best possible plane to closure Rate Soars.’’ It says that al- could not push for answers. carry out their missions. though communities have felt the ef- That is Congress’s job, and we in I yield the floor. fects of the housing crisis for months, Congress, who represent the American The PRESIDING OFFICER. The Sen- the report reveals that foreclosures in taxpayers, have to continue to press ator from Connecticut is recognized. the Washington region have been in- for real answers to those hard ques- Mr. DODD. Madam President, let me creasing at a surprisingly quick pace, tions. We in Congress need to know begin briefly by thanking our col- outstripping those of most metropoli- why the Air Force chose a plane that is leagues who have come and spoken on tan areas. It points out that while fore- bigger and less efficient than it asked the bill already this morning. I thank closures were practically nonexistent for—one that cannot use hundreds of Senator BOB CASEY, of Pennsylvania, a in Washington 18 months ago, it is now our runways, ramps, and hangars, and member of Senator SHELBY’s and my very prevalent and way above the na- one that will cost billions of dollars committee, the Banking Committee, tional average. more in fuel and maintenance. for his remarks. I also thank JUDD I point that out because that is We in Congress need to know whether GREGG, of New Hampshire, who, while unique here. It makes a point. As I our Government should buy a plane not a member of the committee, has showed earlier this morning, with the that even the Air Force says is less sur- followed our work very closely and has graph we put up, we have the numbers vivable, less able to keep our war fight- been intimately involved with the com- now for May on the foreclosure rates. ers safe. We in Congress need to know mittee over the last number of months Over 8,400 people are going to fore- what the effect on our economy and as we were developing the Homeowners closure every single day in America. our national security will be if we turn Act, an idea he brought to the table. That number was below 8,000, in the this technology, which is vital to this He brings a good historical perspec- mid-7,500 area, only a few weeks ago. Nation, over to a company that is tive—going back to the Resolution For those who would suggest that we owned by foreign governments. Trust Corporation and dealing with an- ought to wait this out, or see what hap- The U.S. Trade Representative is so other housing crisis and how well that pens down the road, explain that to the concerned about the subsidies Airbus idea worked; and while we are not ex- 8,000 families today who may lose their receives that they have brought a case actly duplicating it, he has knowledge homes, the 8,000 tomorrow and the 8,000 against the EU before the World Trade of how that worked and an under- the following day and the day after Organization. We need to know why in standing of the basic idea behind the that and all next week, as we grapple the world we would accuse Europe of bill that we have authored over the with this bill, where as many as 50,000 unfair trade practices and then turn last several months, which is very or 60,000 families will be adversely af- around and hand Airbus a major piece helpful. fected while we debate whether this is of our defense industry. We need to I know Senator SHELBY and I are a perfect bill. My patience is thin. We know why our Government would hand grateful, as are other members of the have worked so hard on this. So for them the contract now. committee, for having a nonmember of those who suggest it is a bailout for a In May, employers cut 49,000 jobs in the committee understand the issue as lender—I have heard a lot of argu- the United States. It was the largest 1- well as he does. His support of what we ments, and when you have people los- month jump in unemployment in 22 are trying to do is very helpful. ing homes every day, neighborhoods years. Yet the administration, right in I thank Senator BAUCUS and Senator being destroyed because of it, including the middle of this, wants to send 44,000 GRASSLEY as well. Senator SHELBY and financial aid for students, municipal fi- U.S. jobs overseas, when we are hem- I are not dealing with the tax-writing nance, commercial lending, and the orrhaging jobs here at home. provisions of this bill and they have global implications and trying to put a On the day in February that the Air been helpful and cooperative and, obvi- bill together that will bring some con- Force first announced it awarded this ously, their ideas are a strong com- fidence back to the marketplace, and plane to Airbus, I was out on the 767 plement to what we are trying to to suggest this is a bailout for some line, in Everett, with our Boeing work- achieve—with mortgage revenue bonds bank—it is anything but that. In fact, ers. I will never forget the shock and and tax incentives for those who ac- it is quite the opposite. Senator SHEL- disappointment in their eyes. One quire foreclosed properties, and the BY and I have had 50 hearings since last woman came up to me and said: like, are very helpful. They have dis- March on this subject matter—almost I can’t believe this. My son is currently regarded earlier provisions included in exclusively on this subject matter—and flying these tankers over in Iraq, serving our the tax proposals and, candidly, I think we have had these individuals before country. I want to build those planes with those ideas being kept out of this bill is our committees explaining to us why my taxpayer dollars to make sure he is safe healthy. I don’t dwell on it. Frankly, I they were giving out adjustable rate and we know what is in that plane. think their appraisal of the various mortgages to people on fixed incomes, Yesterday’s GAO study proved she ideas is very constructive. We thank knowing very well these people could was right and she is vindicated. We the tax-writing committee, the Fi- never, ever pay the final fully indexed now have the right process to move for- nance Committee, which has done a price of those properties. Yet they did ward on this and make a good decision good job in complementing what we are it, day in and day out, knowing full not only for that mom but for Amer- trying to do. well what the implications would be.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00020 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5791 The very companies they claim are prises, GSEs, which desperately need to ENERGY being bailed out are exactly the ones have a strong regulator because they Mr. CRAIG. Mr. President, over the that were engaging in that, and the play such a huge role, probably the pri- course of the last several days I have last thing we are doing is providing mary role by a long shot right now, in refrained from speaking on the floor any kind of support and assistance for our housing industry. They need to be about energy. But I have watched the them. We are trying to see to it that properly regulated because they are a floor very closely as I have seen kind of we restore some semblance of con- government-sponsored enterprise, and an interesting duel going on. An advo- fidence in this area and we are plan- that is part of the legislation I have cate of drilling, I found it fascinating ning to keep as many people in their pushed. that some on the other side of the aisle homes as we can. Senator DODD and I have worked to- were saying that if we opened our outer Have we written a miracle? Abso- gether. He is pushing the housing legis- continental reserves and drilled them, lutely not. Will this work? I hope so. lation, but I agree with him. If there it would simply make no difference to Do I have an assurance it will? No. All were any inkling of a bailout for any- the current state of play in the oil I know is it is our best judgment, based body here, we wouldn’t be a part of it market or the price of gas at the pump. on the wonderful, competent people in any way, and no one would in the I find it not only interesting that that who don’t bring an ideological perspec- Senate. So that is a red herring. But kind of conclusion is being drawn, but tive to this—from the American Herit- this will give some hope and oppor- I also find it phenomenally naive that age Foundation to the Consumer Fed- tunity for some people to probably save kind of statement can be made. eration of America and groups in be- their homes who otherwise wouldn’t be It is my opinion, and I think the tween. They have said this is the best able to. opinion of a good many, that we are in idea we could come up with to address We need to pass this legislation now. a classic supply-and-demand situation in the Nation and therefore the world’s this issue. They would also be the ones If we could get this legislation to the oil markets. There is alleged specula- to tell you there is no assurance it is President’s desk, and he would sign it, tion. There is alleged manipulation. I going to work. It is a voluntary pro- which I hope he would by the 4th of don’t know whether any of that is true, gram. We don’t mandate anything July, by the end of next week, this but I do know the facts of what we live here; we are just creating the oppor- would be a significant feat on our part. with and have lived with for the last tunity. I hope we can do it. several years. I say to my colleagues that history is I also want to take a moment, as There have been many of us in Con- somewhat of a teacher in all of this. Senator DODD did, and commend other gress who said there would be a day of Back in the last period when we had a Senators for their work. Senator reckoning if we continued to consume housing crisis of this magnitude, back ISAKSON knows a lot about housing. He oil at a greater rate than we were pro- in the 1920s and 1930s, another Congress grew up in housing. He has been very ducing and refining and bringing it to did it differently. In that case, the Fed- successful at it, and he brings that ex- the marketplace. I believe it is very eral Government actually purchased perience and knowledge to this body in possible that day of reckoning is at distressed mortgages. Senator SHELBY the Senate. The housing tax credit, not hand. The world market in which we and I are not suggesting anything such to bail out anybody but to help people acquire our oil, the world market in as that. We are talking about an insur- save their homes, was I believe origi- which gas is refined from oil, is just ance program. It is a voluntary pro- nated by him. He is pushing this provi- that—a world market. It is not a do- gram that creates a new, temporary sion, and we commend him for helping mestic market. It doesn’t happen down program. It ends in a few years. It is us on this. the street, only to be supplied on that merely an effort to step in here and try I commend my friend and colleague street. It happens in the Middle East, it to make a difference in all of this. from New Hampshire, Senator JUDD happens in Latin America, it happens I will go back over some of the spe- GREGG, the former chairman of the in Canada, and it happens in this coun- cifics of this—the HOPE for Home- Budget Committee, now the ranking try. It all comes together in a world owners Act—as well as the issue deal- member. He knows a lot about all the market, and we compete at the local ing with the affordable housing provi- problems in this country. He is very in- gas pump for the price of the world sion and how we managed to do this sightful. He sees this legislation, over- market. without a tax increase. We have a won- all, as a good package and a good piece Here is a perfect example of the re- derful symmetry of liquidity being of legislation. ality in which we live as America’s strengthened, a regulator being im- I hope we will be able today and to- consumers. I do not deny—in fact, I posed on these GSEs, and a source of morrow to pass this legislation, if the sympathize with and I am frustrated revenue coming from that which can Senate is willing, and go to the next for America’s consumers who today are also assist in another area of needed step, because there are a lot of people facing $4 and $4.45 and $4.50 gas. It is housing. who will possibly be able to save their taking a huge bite out of their back We think this has a rather good sense homes because of this. pocket, and they are not ready for it. of balance. Will this save everything in America? They have not been eased into it. They But again, I am very grateful to the No. But it will be a good first step and should not have had to even be worried Finance Committee, Senator BAUCUS it will be profound, meaningful legisla- about easing into it because it should and Senator GRASSLEY, and to the tion, and so I commend it to the Sen- not have happened. But the Congress of Members who have spoken out, both ate this afternoon. the United States for the last 20 years Democrats and Republicans, this morn- Madam President, I yield the floor, has been in a perfect and absolute state ing, those who have come together and and I suggest the absence of a quorum. of denial. said this is a good bill deserving of our The PRESIDING OFFICER. The Energy was inexpensive compared to support. We hope the rest of our col- clerk will call the roll. the rest of the world, and we could put leagues, as they come forward with The legislative clerk proceeded to this known reserve off, we could put these amendments, will be so inclined call the roll. this off, we could worry about that to- to stand with us and support this bill, Mr. CRAIG. Mr. President, I ask morrow because we didn’t have to and urge the White House to sign it unanimous consent that the order for worry about it today. We could be envi- into law. the quorum call be rescinded. ronmental purists because it was easy Madam President, I yield the floor. The PRESIDING OFFICER (Mr. to do. The PRESIDING OFFICER. The Sen- SALAZAR). Without objection, it is so Here is what was happening in Amer- ator from Alabama. ordered. ica. The supply through the 1970s and Mr. SHELBY. Madam President, I Mr. CRAIG. Mr. President, I ask 1980s and 1990s was dramatically drop- commend the chairman of the Banking unanimous consent that I be allowed to ping, but the demand was continuing Committee, Senator DODD, for his work speak as in morning business for up to to go up at an unprecedented rate. In on this package of legislation. It is a 15 minutes. fact, after the oil shock of the 1970s, package. It is dealing with the reform The PRESIDING OFFICER. Without when we adjusted some CAFE stand- of the government-sponsored enter- objection, it is so ordered. ards and we did a few other things, our

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00021 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5792 CONGRESSIONAL RECORD — SENATE June 19, 2008 economy took off. As our economy row. There is a lot we can do about it value of oil today based on today’s con- took off, by definition we became ever in 2 to 5 years if we let the world begin sumption levels is maybe $85 or $90 a increasingly larger consumers of oil, of to produce again. But we have not barrel. But that extra margin on top, hydrocarbons. It is that which lubri- made that choice yet. that $40 of margin sitting on top that cates the economy of our Nation. If we The President is talking about it. produces $130 or $140 of oil today, is are going to be 25 percent of the world Other people are talking about it at speculation. It is speculation based on economy, guess what, we consume 25 this moment. They are talking about a futures market that says in the fu- percent of the world’s energy. But we going into the known reserves. But ture, because America is not producing were not producing 25 percent of the here is also a reality of what has hap- and the world is not producing to that world’s energy. We, by this time, had pened. See this declining line right decline chart, because we are not add- begun to develop a huge dependency on here? Any time you drill into an oil- ing that extra 5 or 6 percent a year, out other places in the world, all while we field, any time you begin to lift crude here in 2010 and 2015 that is going to be were having this phenomenal luxury of oil out of that field, you begin to de- the real price. We have to secure that saying you don’t have to drill in ANWR plete the field. An average oilfield in for our consumer. So we are going to or Alaska, it may have 15 or 20 billion the world depletes at 5 percent to 7 per- bet on the future. barrels, but we don’t know, we can’t cent a year. That is the historic nat- Mr. President, 2 billion barrels into touch it. We don’t have to drill off the ural level that the industry will tell the U.S. market, now or 5 years from coast, we don’t have to worry about oil you—you get a depletion rate. If you now, what does it do to the price of oil are depleting at 5 percent to 7 percent today? Some futures speculators, some shale. We don’t have to worry about a year and the world demand growth is people who buy in the futures market anything. We can be green and talk going up at about 1.5 percent, you have say that if this country commits itself about the environment and deny the a problem if you are not producing to drilling, if this country commits reality of the marketplace and grow in- more oil to the marketplace. That is itself to development in the 2-year to 5- creasingly more dependent on some- where we are today as a world con- year period, the market will begin to body else. sumer of oil. We are not producing the adjust and come down. Why? Because Here is an interesting chart. It is a increased volume necessary to fit the of the belief that we are going to find chart I found in a book I am reading growth of the marketplace. It is really it out there, we are going to add it to now that I recommend all Senators quite simple. We as country are pro- the pool, and we are going to develop read. It is called ‘‘A Thousand Barrels ducing increasingly less. that margin of protection, again, that A Second.’’ Think of that. That is the We have 80 billion barrels of reserve the market historically had against an title of the book, but it is a title of re- out there, we think. At least we know ever-growing market. ality. The reality is that the world in we have 25 or 30 billion barrels of Is this the answer for 30 years from which we consume energy and from known reserve in ANWR and the Outer now? Of course, it is not. I have said which we buy energy today consumes Continental Shelf. If we do the new ge- and others are saying that it is a 1,000 barrels of oil a second. Do the ology, maybe we have 80, maybe we bridge to the future. It is the reality of math: 86.5 million barrels of oil a day. have 120. We don’t know it, but we be- where we are today because electric That is what the world marketplace is, lieve it is there. What is the value of cars are not prevalent in the market. It and we consume 20-plus percent of it. drilling it; it is going to take 3 to 5 is a reality of where we are today be- Here is what was happening from the years? You bet it is going to take 3 to cause hydrogen fuel cells are not in the 1970s on when we were in an oil shock. 5 years or more. The problem is today. market. But they are coming. It is a We looked at ourselves, we adjusted Yes, we should have thought about it 3 reality of where we are today because ourselves a little bit, and we began to to 5 years ago, but we were all running we are not producing enough ethanol, try to figure other ways. to look green, running to talk about both corn-based and cellulosic. There is Oil production from 1970 to the year the environment, wanting to do things a huge new wave of technology coming, 2005, as demonstrated by the dark we didn’t want to do, but we did it be- but it is 3 years out, it is 10 years out, blue—as you notice, it was going up cause it was good politics. And we were it is 15 years out. What do we do in be- progressively. But something else was denying the marketplace. tween? Do we simply turn to our con- happening that allowed for adjust- Here is the reality we got ourselves sumers and say: Buck up; pay for the ments in the market. This green area in. We don’t control the marketplace oil. Pay for the gas. Pay $5. There is was the extra capacity the market was anymore. Other nations of the world do nothing we can do about it. not consuming. So when there were control the marketplace. The Saudis Don’t let your politician tell you bumps in the market, there was extra control it, and on down the line. that, because there is something we capacity. It didn’t happen to be in the Eighty percent of the world’s supply of can do about it. We can bring on our United States. It predominantly was in oil out there is controlled by other na- known reserves. We can open them up the Middle East and with the OPEC na- tions, not companies—not ExxonMobil, to the market. We can let the bidding tions, but it was extra capacity. not Chevron, not Marathon; they con- process go forward, and we can tell the Here we are in 2005. What had hap- trol way less than 10 percent of the world market that America is going to pened? China had come into the econ- total reserves. The rest of the world is be producing again, in a timeframe of 3 omy. India had come into the economy. now telling America where to go; that to 5 years. As a result of that, the spec- They were beginning to consume at is, you go to the market and you buy ulation will begin to move out of the rates we did not expect. While they off the market and we are not going to market because there will be a sense of were consuming and buying out of the give you any margin. At the same reality returning to what has been world’s markets, the world’s capacity time, we are denying ourselves produc- there through the 1970s and the 1980s was continuing to drop as it relates to tion in the marketplace. and the 1990s, and that is additional consumption. Here is what happened. It is a reality supply to offset the depletion in the This is not necessarily a lecture in that all of us have to face. Oh, we said oilfield itself and the demand for about economics, but it is a lecture in supply no California, Oregon, and Washington; a 1-percent or 1.5-percent growth in the and demand. For any Senator to deny we said no down the east coast because market as these new technologies the reality of the marketplace is either it was politically the right thing to do; begin to take hold. naive or politically incorrect. The mar- we said no up around Florida; we said Last year, Senator DORGAN and I ketplace is working in a way that none no up here in ANWR in Alaska; and we passed a provision that we called the of us likes today, and our constituents believe there may be as many as 80 bil- DOES Act which said, let’s get the sci- are feeling it in their back pockets, and lion barrels of oil. What does 80 billion entists out there, use the new geology they are picking up the phone and call- barrels mean if you can develop it? It and find out where the oil is. ing their Senator and saying: Do some- means maybe a couple of million bar- Oh, no, we cannot do that. We might thing about it. rels a day into the U.S. market and find it. And if we find it, we might We are trying to figure out a way to into the world market. want to drill it. And if we want to drill politically dance that line. There is What does that mean? I believe—and it, that is not green, that is not envi- very little we can do about it tomor- I think the market believes—the true ronmentally sound. Even if, as we

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00022 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5793 know, today’s technologies allow us because the world has awakened to the dustry, campaign contributions, com- that kind of environmental protection, reality of supply and demand and need. mentators in the media, who tell us a it was not politically popular to do. They are going to wrestle for it, and lot of things about why the price of gas We passed it out of the Senate. they will wrestle in the marketplace. has gone up, triple, basically, since Thank you, Senators, for helping us. It Those who can pay the highest price President Bush has taken office; triple was lost in a conference with the are going to get the fuel. since the Iraq war began. House. You see, even a year ago, Con- But to the average consumers, mid- The apologists for the oil industry gress was in a state of denial, of denial dle-class Americans, that will become have ascribed no blame to Wall Street of the reality of the marketplace, of a a great frustration, as it should. They speculators. They say the oil industry reality of depletion, of where we were need to make sure they have a Con- itself is blameless. They say it is all and where we are going to go. So our gress that is willing to face the reality about the environment, it is all about consumers today are paying more than of the moment, and say, let us produce. something most people do not under- they have ever paid for energy. They Let us get this country back into pro- stand. are not happy, and they have every duction. Let us look at our offshores. What they say specifically when they reason to be angry at a Congress that Let us look at ANWR. Let us look at ask a few questions, is: Wouldn’t in- for 10 years at least, or 20, has been in where we know the oil is, while we creasing offshore drilling lower gas a state of denial, not recognizing the work to find out if there is anymore prices? Wouldn’t drilling in the Arctic reality of a market that would come somewhere else. Let’s encourage pro- Refuge lower gas prices? They say: home to rest on the price of oil. But it duction here at home, so that not only Why can’t we build more refineries in has. And it is today. can we enter the market with more oil, the United States? Let’s for a moment I am thinking if there are questions but we can be more secure, because talk about some of those questions today whether we ought to drill in our this is a question of security, whether they raise. known reserves and use all of our envi- it is security in the home, or whether First, President Bush’s own Energy ronmental tools to be sound, and some it is security as a nation. Department has said that increased are still holding back at $4.50, what do Politically, this Congress for the last drilling offshore would have, in its you do at $5 a gallon? What do you do two decades has been doing the wrong words, ‘‘no significant impact on gas when the consumers’ frustration turns thing when it came to petroleum and prices until the year 2030.’’ So if we from anger to fear? Because, you see, energy security. We grew increasingly began to drill offshore all the places fear is a whole new emotion. What if dependent on foreign nations, and as that some of my friends across the they begin to fear they can no longer we did, we not only put our Nation at aisle say we should drill, it would make afford the home they have, or their risk, we have now put the energy-con- no appreciable difference in the price of food budgets, or the structure and se- suming American family at risk. We gas until 2030, if even then. curity of their family? What happens should not be a part of that. We are Since President Bush has been in of- when they still have to have energy to here to facilitate the possible so the fice, the Federal Government has near- move to work, and it is going to cost marketplace can do what it can and ly tripled the number of permits given them more than they have ever does very well. Right now the market- to big oil companies to drill for more dreamed of paying in their lives? I place is squeezing and squeezing hard oil. They have tripled the number of think fear will turn politics in the di- and competing for the last remaining permits. Yet what has happened to gas rection of a marketplace, in the reality oil until more oil comes in production. prices? It has gone from $1.50 to over of what we can do, whether it is 2 years Here is the last thought of a simple $4, from $30 a barrel at the beginning of out or 5 years out. equation. If demand is going up 1.5 per- the Iraq war to $130, $140 a barrel now. So to the American consumer who is cent a year worldwide, and depletion in Big oil companies are not drilling for angry today, and may become fearful the existing producing fields is going oil in 75 percent of the land the Federal tomorrow, e-mail your Congressman, e- down at 7 to 8 percent a year, and you Government has leased to them, both mail your Senator, call them. Tell are not finding and bringing anymore onshore and offshore. them: Let’s get this country back into on line, then the price goes up as the Then they say: Wouldn’t drilling in production. Do it in an environ- supply goes down. But if you find a lit- the Arctic National Wildlife Refuge mentally sound way, do it clean, do it tle more to add, about 5 percent more lower gas prices? The President’s own right, but do it. Put your money into annualized, you offset the difference Energy Department, again a President new technologies. Invest for the future, and price stabilizes. That is the way of the United States who came out of because oil is not going to be there, the market works. We do not have con- the oil industry, a Vice President of and the oil that will be there 10 years trol of that as politicians; we can only the United States whose office is across from now is going to be a lot more control access to future supply. That is the aisle here, who came out of the oil costly, because we have pumped all of what we ought to be about as a Senate industry, the President’s own Energy the easy, we have reached all of the and as a country. Department, full of oil company execu- low-hanging fruit, and that which So e-mail your Senator, write your tives and allies and friends, said a cou- comes tomorrow will be more expen- Congressman, tell them to get going. ple of years ago: Drilling in the Arctic sive because it is deeper, or it is in a Let’s get this great country of ours National Wildlife Refuge would only sensitive area where we have to be back into the business of production so reduce gasoline prices by a penny per more careful than we have been in the the supply and demand in the market- gallon, and only 20 years from now past. place stabilizes and the American con- when drilling is at its peak. Because we are always going to need sumer can begin to become com- Again, it is one of those arguments some oil, we hope only for transpor- fortable with where we are headed in they make because they do not want to tation, we can do it with electric cars, energy policy and their pocketbook. blame the oil industry, they do not we can do it with plug-ins, we can do it The PRESIDING OFFICER. The Sen- want to blame the speculators on Wall with all the right kinds of things that ator from Ohio is recognized. Street who have way more to do with begin to turn us away from an oil mar- Mr. BROWN. Mr. President, I ask this price jump than anything else. ket. unanimous consent to address the Sen- They say: Why can’t we build more For those who said Congress has not ate as in morning business. refineries in the United States? Well, done anything in that area, we have The PRESIDING OFFICER. Without big oil companies are reducing refinery done some things. We passed the En- objection, it is so ordered. capacity not because of the Federal ergy Policy Act of 2005 and the Energy ENERGY Government, they are doing it to in- Policy Act of 2007. There was not pro- Mr. BROWN. Mr. President, the crease their profits. An internal memo duction of oil in it. Many of us tried to apologists for the oil industry tell us a from Chevron in 1995 said: If the United get it in, but we were denied because it lot of things in the Chamber. I hear States petroleum industry does not re- was not ‘‘politically green correct.’’ people in the White House, I hear elect- duce its refining capacity, does not cut But then again, gas was $2, and now it ed officials, I hear people who have down its refining capacity, it will never is $4, or it is $4.50; it may soon be $5, been particularly friendly to the oil in- see any substantial increase in profits.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00023 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5794 CONGRESSIONAL RECORD — SENATE June 19, 2008 In other words, it is in the oil compa- The head of OPEC said: The price has other 18 months, a proposal that had nies’ interests to not increase refining nothing to do with a shortage of oil. been made by the chairman of the Sen- capacity. They have the permits to do There is a lot of oil on the market. It ate Finance Committee that would it. There are no environmental rules is because of speculation. Bart Chilton, allow us to solve this problem not in a stopping them from doing it. They one of the Commissioners at the Com- partisan way but in a bipartisan way. have the permits to do it. It is in their modity Futures Trading Commission, Therefore, I ask unanimous consent interest to keep refining capacity to said speculation is driving up oil prices that the Senate proceed to the imme- refine less so with supply and demand as much as 30 percent. We have work to diate consideration of a Senate bill the price goes up. Don’t think they do. It is clear that rather than defend- which I will send to the desk. It is a haven’t thought through that. ing the oil industry and defending Wall clean 18-month extension of the De- The largest five oil refineries in the Street speculation, it is time this Con- cember Medicare bill. I ask unanimous United States now control over half of gress took action, that the President consent that the bill be read a third domestic oil refinery capacity up from finally decided to be on the side of the time and passed, and the motion to re- one-third only 10 years ago. This con- driving public and of businesses that consider be laid upon the table. solidation makes it easier for them to are hurt, truckers and others who are The PRESIDING OFFICER. Is there lessen supply, to withhold supplies in hurt so badly by this, as food prices go objection? order to drive up prices. up, and all of the other things that Mr. DURBIN. I object. If you have looked at oil prices in the happen from high energy prices. It is The PRESIDING OFFICER. Objec- last 10 or 20 years, a spike in oil prices time the President and the Justice De- tion is heard. always comes as a result of some other partment and the Commodity Futures Mr. KYL. Mr. President, might I con- incident. It comes from perhaps a fire Trading Commission came down on the clude with a brief remark? at a refinery, an outage of a pipeline, side of the public interest and began to The PRESIDING OFFICER. The Sen- Hurricane Katrina, some international do the right thing. ator from Arizona. incident that causes a disruption in oil I yield the floor. Mr. KYL. I wish to express dis- supply. That is normally over the years The PRESIDING OFFICER. The Sen- appointment. Again, we are trying to when we have seen a spike in oil prices, ator from Arizona. simply allow the Senate to move for- of gasoline prices at the pump when Mr. KYL. Mr. President, I ask unani- ward, in a bipartisan way, to resolve a something such as that has happened. mous consent that at the conclusion of problem we all need to resolve. This None of that has happened in the last my remarks and potential remarks would extend the existing law for an- couple of years. But it is not one spike, from the Democratic side that the Sen- other 18 months, something that had it is not two, it is spike after spike ator from Alabama, Mr. SESSIONS, be been, in fact, proposed by the chairman after spike, prices going again from recognized. of the Senate Finance Committee. I am about $30 a barrel when the President The PRESIDING OFFICER. Without disappointed we are not able to do this. took office, the oil company President, objection, it is so ordered. Mr. DURBIN. I ask unanimous con- to $130, $140 today; $1.30, $1.40 at the UNANIMOUS-CONSENT REQUEST—MEDICARE 18- sent to speak for 2 minutes on this gas pump, now up to over $5, as we MONTH EXTENSION issue and then yield the floor to the know. Mr. KYL. Over the last week on our Senator from Alabama. Pointing fingers in the end gets us side, we have listened to some of our The PRESIDING OFFICER. Without nowhere, and saying someone is right, colleagues suggest that Republicans objection, it is so ordered. somebody is wrong. The issue is what have obstructed action on important Mr. DURBIN. Mr. President, we are are we going to do about this. One of matters here. I want to ensure that trying to bring this Medicare issue to the things we should do is to impose a with respect to protecting our seniors the floor for debate. Nine Republicans windfall profits tax on oil companies to joined Democrats and said: Let’s do it. stop them from gouging consumers at through the service of the Medicare physicians who take care of them, that But it wasn’t enough. We are asking to the pump. The Bush Justice Depart- bring it forward for debate. If you have ment ought to begin looking at price- we are able to meet a deadline on the statute which expires at the end of this a better idea, put it on the floor and fixing issues much more aggressively let’s vote on it. But for the Repub- than they ever have. month to ensure they continue to be paid. licans to consistently file these filibus- The Commodity Futures Trading ters and object to bringing these meas- Commission needs to be more involved One of my colleagues yesterday said ures forward to even debate them, and in rooting out the speculators who may Senate Republicans had refused to give now it is a take it or leave it. The Sen- very well be doing Enron-type specu- Senate Democrats the opportunity to ator from Arizona has filed, just like lating to push up the price of oil. ensure quality health care for Amer- The last time a windfall profits tax ican seniors. Yet following those re- the minority leader did yesterday, this was in effect in 1981 to 1988, gas prices marks, the minority leader propounded political get-well card which says: We were reduced by 45 cents a gallon, oil two unanimous consent agreements will make a unanimous consent request prices declined by $20 a barrel, and it which would have permitted us to so we are on the record wanting this. generated $89 billion in revenue. move forward to consider two bills that Get on the record and vote for bringing Most importantly, longer term we would preserve Medicare beneficiaries’ it to the floor for debate. Don’t be need to transform our energy system access to care. afraid of a debate. Don’t be afraid of an away from fossil fuels and toward re- Mr. DURBIN. Will the Senator yield amendment. If you have a good idea, newable energy. That is clearly the for a question? put it forward. Let’s see if it wins or wave of the future. We need to get Mr. KYL. I am just about done pro- loses. started sooner rather than later. We on pounding my request, but I am happy Seventy-seven, one after another, this side of the aisle have tried to take to yield. and this one is to stop a cut in reim- money from the Bush energy bill, some Mr. DURBIN. I ask the Senator from bursement for doctors providing help of the subsidies and tax breaks, and use Arizona how he voted on the motion through Medicare. These doctors need that money to go into alternative en- for cloture to bring to the floor the that help. That is why we wanted to ergy research and development and do Medicare changes which he is now sup- bring it to the floor. I beg the Repub- all of the things we need to do. porting. lican side, for goodness sakes, let’s act In closing, over the past 7 years, Mr. KYL. Mr. President, I am happy like a Senate. Let’s debate. Let’s delib- Enron, BP, and Amaranth were caught to respond to my colleague that our erate. Let’s vote on amendments. Let’s redhanded manipulating the price of proposal is to move forward with a bi- earn our pay one week. electricity, propane, and natural gas. partisan approach rather than the par- The PRESIDING OFFICER. The Sen- Each time they said supply and de- tisan approach which, of course, I op- ator from Alabama. mand was to blame. Each team the posed. In that regard, I, therefore, sug- BOEING PROTEST pundits were proven wrong. Excessive gest that we simply extend existing Mr. SESSIONS. I wish to discuss the speculation, manipulation, and greed law, which this Senate overwhelmingly Government Accountability Office de- were the cause. supported just 6 months ago, for an- cision to sustain the Boeing protest of

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00024 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5795 the KC–X tanker award, which I have GAO also acknowledged it is the Air reverse the decision made by the one followed closely. The Northrop Grum- Force’s decision about what final ac- agency in our Government that will man/EADS proposal would have re- tion they are to take. They have not, have to live with the result. I believe it sulted in a fabulous new construction as some suggested, been ordered to is the brave men and women of the Air facility in my home State and would start over again. Force who fly these planes and depend have created thousands of jobs within My colleague, Senator CANTWELL, on them who should be making the de- the United States. I confess that I am whom I recognize represents the State cisions about their needs and what disappointed by the decision. I do think of Washington where this work would they think is best. We need to protect it is important that we continue to fol- be done if Boeing were the winner, had that. If they change their mind after low this process and to recognize the this to say: this, so be it. But I hope and believe appropriate roles of the different Gov- The Air Force will have no choice but to strongly this Congress should encour- ernment actors involved. rebid this project. age the Air Force to consider the objec- It is, of course, not the GAO’s job to That is not true. That is not an accu- tions raised by GAO, to fairly evaluate pick aircraft for the Air Force. GAO rate statement, frankly. We need to be them, and then to select, without polit- used to be called the Government Ac- sure about how we think about this as ical influence, the best aircraft for the counting Office. Now it is the Govern- we go forward. Even more inac- men and women in uniform. That is the ment Accountability Office. It is fun- curately, some of our colleagues have way we will serve our country. To po- damentally the accounting arm of our suggested that the GAO’s decision liticize this process would be dead Government. As they said themselves means the award should be given to wrong, and I object to it. There has when they made this decision in which Boeing. Senator BROWNBACK’s press re- been too much of it. they found flaws in the process for lease, my good friend from Kansas, who Great progress was made when some making this selection: would love to get some of the work in of my colleagues including Senator Our decision should not be read to reflect his home State, said that as a result of MCCAIN objected when the Appropria- a view as to the merits of the firms’ respec- yesterday’s announcement: tions Committee slipped language into tive aircraft. Judgments about which offeror This contract should be overturned and an appropriations bill that leased 100 will most successfully meet governmental awarded to Boeing. aircraft, $23 billion, sole source from needs is largely reserved for the procuring Boeing. There had been no hearings. It agencies, subject only to such statutory and That is not right. They didn’t order regulatory requirements as full and open that at all. There is no basis for that was a sole-source contract for about competition and fairness to potential whatsoever. $235 million per aircraft to just lease offerors. Congressman NORM DICKS, of Wash- 100 of these aircraft. As a result of In other words, it is the job of the ington, who until recently was telling these questions that were raised, even- war fighters, the people who will use people he didn’t care what the GAO had tually, one of the top procurement offi- this aircraft, the U.S. Air Force and to say, issued a press release yesterday cials, a civilian in the Air Force, went those who benefit from the U.S. Air touting the GAO decision and declaring to jail. Members of the leadership of Force refueling capability, it is for as a result of it: Boeing resigned and investigations them to make a decision about which I believe the Air Force should set aside the were conducted. It was quite a scandal. aircraft best meets their needs. The agreement it improperly reached with EADS/ It was wrong, and it was corrupt. When GAO has to make sure that all appro- Northrop Grumman and we should proceed that was discovered, people went to expeditiously to build the best aircraft—the jail. So what did Congress do then? priate processes and procedures are fol- Boeing KC–767—here at home. lowed in doing this. Both the Air Force Congress, in my committee, the Armed and DOD have been unequivocal in ‘‘At home’’ meaning in his home Services Committee, had hearings their statements that they believe the State of Washington, not in my home about it. We discussed it. It was raised Northrop/EADS aircraft is a superior State of Alabama. in the Airland Subcommittee, a sub- That is a misreading completely of aircraft for their needs. As Air Force committee of which I was a member the GAO’s decision and demonstrates a Assistant Secretary Sue Payton said and that I at one point chaired. We di- misunderstanding of GAO’s role. They upon announcement of the decision: rected and required that the Air Force analyzed the process. They found some conduct a competitive bid process for Northrop Grumman clearly provided the errors, they said. They said nothing best value to the government when you take this contract. No more sole-source. a look at, in accordance with the RFP, the about giving any award to the other You pick the best aircraft in the world five factors that were important to this deci- competitor, Boeing. The military still to serve our men and women. That is sion: in mission capability, in proposal risk, adheres to its belief, as they noted, as what we directed—no ifs, ands, or buts, in the area of past performance, in cost to the superior aircraft. no qualifications. Not one amendment price, and in something we call an integrated Some of my colleagues also seem to was offered to object. Everybody knew fleet aerial refueling rating. misunderstand Congress’s role in this, at the time there were two major air- They had a complex but serious eval- or at least to interpret their responsi- craft-producing companies—only two— uation procedure that they utilized. bility to the American military dif- that could compete: Boeing and the Last Tuesday, Pentagon spokesman ferently than I do. Senator MURRAY an- Northrop Grumman-EADS team. So we Geoffrey Morrell said the selection of nounced yesterday: ordered a bid. the Northrop KC–45 ‘‘provided our war It is Congress’s job to determine whether We have all kinds of joint oper- fighters with the most capable aircraft major defense purchases meet the needs of ations—the Joint Strike Fighter, and the taxpayer [with] the most cost- our war fighters and deserve taxpayer fund- where parts come from European and effective solution to this very real need ing. American sources. We and our Euro- of replacing the tanker fleet.’’ I tell you, I am a lawyer. I know our pean allies have come together to The GAO found procedural flaws, ac- Presiding Officer is. Schoolteachers, make the Joint Strike Fighter. cording to their analysis, but they accountants, veterinarians are not So we said we are going to bid this. have not overturned this fundamental equipped or able, nor do we have the re- The question came up during the de- conclusion, the evaluation made by the sponsibility and the intense interest, bate: Well, is this just a joke? Is this Air Force personnel. The people who to make these kind of decisions that just a game? Is it going to be a real, actually have to fly tankers and those the U.S. Air Force does. They have a fair bid? Will everybody get a fair who utilize them to refuel at high alti- long history of aircraft purchasing and chance? tudes and high speeds over the Atlan- managing. They know something about I remember I asked them: Is this tic, over the Middle East, or wherever what it is like to refuel in the air, why going to be a political decision? Aren’t in the world, still favored and chose an aircraft that can fly further and you required to do it on the merits? the KC–45. carry far more fuel may be a superior They assured me they would do it on Still, it is important for the Air aircraft to one that does not. This is the merits. Force to consider the GAO’s objections not a political decision to be made by As part of the bidding process, the and to take them into account. They people who spend a few hours looking Air Force produced and released a re- have 60 days to do so. However, the at it and think they now are capable to quest for proposal. It is a detailed

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00025 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5796 CONGRESSIONAL RECORD — SENATE June 19, 2008 statement of what the Air Force is speculators, to go after the manipula- This bill takes some important steps looking for. They request the bidders— tors of gas prices. to address the crisis. It provides funds in this case, there were just two—to re- We will keep coming back until our to purchase and maintain foreclosed spond to that request for proposal. colleagues recognize they can talk homes, to prevent the cycle of blight They also allowed the bidders an oppor- about drilling off the coast in pristine from further lowering home values. It tunity to make suggestions and criti- areas all they want—the truth is, the provides $4 billion for neighborhood cisms about the proposal. Otherwise, it American people will see through that. stabilization through community de- would go out as proposed by the Air Even if we were to do it—and I think it velopment block grants for localities. Force. would be a disaster for our economy be- As a former county supervisor—that The Boeing team made no official or cause those areas are dependent on a goes back a ways, but I well remember formal objections, no written com- pristine coast—you are not going to see that the health of the neighborhoods plaints about the details of that pro- any impact on gas prices until 2030. depended on the homeowners. When the So what we need to do on the gas- posal. They did not request certain homeowners disappear because they price front is to confront the people WTO provisions that might tilt the cannot sell their home or they fore- who are speculating. We have heard scales away from what is the best air- closed on a home, the whole neighbor- numbers of up to about a third of the craft or not the best aircraft. They hood begins to wither. This is a prob- agreed to proceed under that process. price of a barrel of oil being associated with the speculation. I also signed on lem. So I believe this $4 billion that The Air Force believed they had the will go to revitalize our neighborhoods to a letter. I thank Senator FRANK most open process in their history of and stabilize them is very important. LAUTENBERG for his leadership. Eleven any major contract of this kind. They of us signed it, saying to the President It provides $150 million in additional were required to follow their proce- that he should file a complaint with funding for housing counselors. I held dures, and it is easy to make a mis- the World Trade Organization against many open meetings throughout my take. So maybe they made some mis- OPEC for withholding supply. So there State on this crisis, and the crying takes. Maybe they have a perfectly is a lot we can do. The President today need was for housing counselors be- good explanation for some of the criti- could call for a quick investigation cause somebody has to find out with cism GAO has raised. But that is where through the FTC, the Federal Trade whom they have their mortgage. we are today. They found some proce- Commission, on collusion and so on. Maybe it has changed four times. dural flaws. But I have to tell you, the But that is not happening. So at least Maybe the mortgage was securitized. GAO did not say it was time for a we are, today, doing something very They do not have anyone to contact. bunch of politicians, a bunch of law- important, which is coming together, We need these counselors to be on their yers, accountants, prosecutors, school- hopefully, to pass a bill that will deal side. teachers, to start picking which is the with this housing crisis. That funding in this bill will help as best plane available to the Air Force. Look, I know I have talked to Sen- many as 250,000 more families work We should not be substituting our judg- ators DODD and SHELBY. In my State, with their mortgage servicer or lender ments for those of the military. we have a big problem. I am going to to find a way to keep their home. I So I am sorry we did not get a firm show you a little later with a chart know when you get people around the confirmation on this process. I fully ac- where we are with foreclosures. So, of table who really know what is hap- knowledge the Air Force will need to course, I would have liked to have seen pening, we can solve a lot of these review the complaints that have been even a stronger bill. But I know how problems. made. I hope they will move forward hard it was for Senators DODD and Third, the bill creates the HOPE for with the process quickly because it is a SHELBY. Each had his own ideas of Homeowners Act, which authorizes $300 critical need. This Nation is really 8 or what had to be done. They came to- billion in FHA-backed loans to help 9 years behind our timeline to get gether, and I support what they have families stay in their homes—at no started with producing the aircraft. It done. cost to American taxpayers because of is the No. 1 procurement priority for I stood before the Senate about 2 the way this will work. the U.S. Air Force. Many of the planes months ago when we took up an earlier These are all vital steps. are 50 years old. I saw one being refur- version of the bill, and I spoke about My big concern goes to the issue of bished with a serial number of 1960 not how California had more than triple the Nation’s high-cost areas, of which long ago. The cost of operating these the number of foreclosure filings in California is one. We see there is a per- aircraft is rising. 2007 than in 2006. I am very sad to re- manent increase in the loan limits for I hope we can work through this port that the situation is even worse Fannie, Freddie, and FHA, but they are process and make sure each bidder has today. I want to share with you what not as high as what was in the stimulus a fair opportunity to bid. It is criti- we see. cally important that the Air Force Foreclosure filings in California have package. Although it is $625,000—it is a treat all bidders fairly, that politics skyrocketed over the last 41 months, step in the right direction—we really not interfere with the process, and that rising from under 6,000 in January 2005 should go back to the $729,000 we had they select the best aircraft for the to 72,000 foreclosure filings in May—the under the economic stimulus package. military. highest monthly number yet and near- The loan limit for participation in I thank the Chair and yield the floor. ly double the number of a year ago. the HOPE for Homeowners Program is The PRESIDING OFFICER. The Sen- Last month alone, 1 in every 183 Cali- set at $550,000. Given the concentration ator from California. fornia households received a fore- of foreclosures in high-cost areas, a Mrs. BOXER. Mr. President, I want closure filing—a rate that was 2.6 times higher loan limit for this program is to get back to the issue before us, the the national average. Imagine, 1 in essential. housing crisis. I thank Senators DODD every 183 California households re- I know this was an issue for Senator and SHELBY for working so hard to ceived a foreclosure filing—2.6 times SHELBY, but I want to point out that in reach compromise. the national average. As you can see— his State, I think the average price of Here is where we are. I believe if you and this will go to the next chart; and a home is about $130,000—the average look at this recession many of our I say to Senator DODD, I hope you have median home price—$130,000. That is States are in—and there is an argu- a minute to check this out—7 of the way under other areas, particularly ment as to whether we are in this re- top 10 and 11 of the top 20 metropolitan areas such as Florida, California, and cession nationally—we know where it areas with the highest foreclosure ac- Nevada. is coming from. The housing crisis is tivity in the country are in California. Mr. President, I ask unanimous con- certainly a root cause. The speculation This is where we are in California. Mr. sent to have printed in the RECORD the in the futures market, in oil, is defi- President, 11 of the top 20 metropolitan States that would benefit from the nitely a root cause. We need to address areas with the most foreclosure filings higher loan limit. both of those issues. That is why on in May are in my State. You see Stock- There being no objection, the mate- this side of the aisle we had a very ton is No. 1, Merced is No. 3, and Mo- rial was ordered to be printed in the good package of bills to go after the desto is No. 4—and it goes on. RECORD, as follows:

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00026 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5797 STATES BENEFITING FROM HIGHER LOAN publicans who are having trouble stay- and what it does to neighborhoods and LIMITS ing in their homes, and there are families and communities. There is Arizona, California, Colorado, Connecticut, Democrats who are having trouble nothing more stabilizing than the idea Delaware, District of Columbia, Florida, staying in their homes. So we need to of having an equity interest in where Georgia, Hawaii, Idaho. set aside our differences. you live. Massachussetts, Maryland, North Carolina, New Hampshire, New Jersey, New Mexico, In this bill we also help with the low- So this is an issue that has far broad- New York, Nevada, Ohio, Oregon. income housing tax credit. So the er implications than just housing, but Pennsylvania, Rhode Island, Tennessee, changes in this bill are long overdue, it is at the heart of who we are and the Utah, Virginia, Washington, West Virginia, and they are critically needed now. So dreams that people have in this coun- Wyoming. no bill is perfect for any one of us. try. So it is very important we get this Mrs. BOXER. Mr. President, there Each of us would have written it better done. I thank the Senator immensely are 28 States here. Believe me when I for our own State. I indicated why it for her comments, as well as the data say, if we stick with the lower limits, needs to be made stronger for my which she is supplying to reinforce this a lot of people are not going to get the State. But am I going to support it? bill. benefit. We are talking really about 97 Yes, I am, because certainly it is mov- Mrs. BOXER. Mr. President, this list million Americans who would be ad- ing in the right direction. of 20 States—and I see my friend from versely impacted by the fact that we I thank Senator DODD again for the Florida is going to speak—of course, is did not have a higher limit here. In work he has put into this bill. We need included in here. These are the States. California, 21 million people—more it so badly in our State. I know how It is 28 States—27 plus DC, to be than half the State’s population—live hard it was for him. I am happy to exact—where we have very high-cost in 1 of 14 counties that have a median yield to him for a question. housing. We are very grateful that Sen- price so high, they do qualify for the Mr. DODD. I wish to thank our col- ator SHELBY agreed to go over $600,000. higher $729,000 loan limits. league from California. She is abso- Believe me, we need a little more So I say to my friend, Senator SHEL- lutely correct. Arizona, Nevada, Flor- boost. But we have to do this. We have BY, please remember that borrowers in ida—there are States that are being af- to get it done. his State will have access to affordable fected, but no State is paying the price I guess the reason I wanted to speak mortgages, for loans well over 300 per- as much as California. It is the epi- today is to not only thank Senator cent above the median home price. So center of this problem for many rea- DODD and Senator SHELBY for bridging Senator SHELBY’s State is taken care sons. the partisan divide, but to say we can- of. But the States on this list, includ- Earlier this morning, I highlighted not play politics with this subject mat- ing California, Connecticut, Florida, the growing problem, as the Senator ter. This isn’t about some ideological Georgia, Hawaii, and Massachusetts—I from California has done with her issue; this is about people being thrown could read this list—they are going to charts. We are now averaging on a out of their castles—their home—and be in trouble with these lower limits. daily basis, I say to my colleague from thrown into the moat, and it is about Again, my State has 11 of the top 20 California, 8,427 foreclosure filings in communities that then begin to wither. metropolitan areas in the country with the country every single day. That is It is about local governments that the most foreclosure filings. Going up almost—somewhere in the area of begin to struggle. It is about crime back to this chart, I want to show Sen- 1,000 more than it was 2 months ago rates that begin to go up. It is about ator DODD what has happened here. We when it was up to 7,500 or in that dreams that are dashed and consumer just keep going up in foreclosures. Now range. Now we are getting close to 9,000 confidence that goes down the tubes at 1 in every 183 households has received a every day for foreclosure filings. a time when we are fighting off a broad foreclosure notice in California. This is The estimates are that when you get recession and unemployment. very serious. That is just in May. the resets that will be occurring on So I just hope—I don’t know where This is why I am so pleased, I say to these adjustable rate mortgages com- this will lead. We haven’t had much Senator DODD, you and Senator SHELBY ing in July or shortly after July, we success in the past couple of weeks get- were able to get as far as you did get. will face another tidal wave of fore- ting anything done around here. But I And you did get pretty far. You are closures coming. So the Senator’s num- am hopeful that because all of us are doing some very important work here. bers, as bad as they are today, will be hit by this that we will set aside the The dream of home ownership exists worse, quite candidly. So every day we politics in this political year, we will in every corner of America. I will tell wait, every day there is a delay, it is leave it at the door, and for a few shin- my colleagues, I grew up in a family going to cost us dearly. ing moments come together and get who never owned a home. We didn’t I can’t guarantee our bill is going to this thing going because I have read own a home when I was growing up. We solve every problem. All I can tell my this bill. Would I have written it bet- couldn’t do it. But when I got married colleagues is what we have done is lis- ter? Yes. Would Senator DODD have and I was able to save the money and ten to very good people. We have held changed it? Yes. Would Senator MAR- get my first home, it was a moment I 50 different hearings over the last num- TINEZ? Absolutely. All of us would have will never forget, the first day in that ber of months listening to people from done it our way. Senator SALAZAR home, and I owned it for 40 years. I lit- the American Heritage Foundation, the would have done it his way. erally kissed the walls when I moved Consumer Federation of America, and We, Senator DODD and Senator SHEL- in. I raised my kids there. That home they all have come to this conclusion. BY, have done some important things provided the stability for our family, So when people start telling me this is in this bill, and some things that are and it provided the wherewithal for us written for some special interest, be- very straightforward. What impresses to be able to get funds, refinance the lieve me, if you have been to the 50 me the most is that they did build on house, fix it up. It grew along with our hearings and listened to people talk the success of a program that America family. It was a wonderful investment about this idea—one that we actually used years ago and wound up not cost- for us. I want that for all Americans. tried once before; a very similar idea ing any money. We actually make I don’t want to help people who spec- back in the early part of the 20th cen- some money for the taxpayers. So this ulated. This bill doesn’t do that. This tury during the Great Depression is the is a tried-and-true idea, and we need to has to be a home owner. I don’t want to last time we had a crisis such as this try it again, just getting those coun- help people who thought they would and it worked, and it made a difference selors out there to sit down with the make a quick buck. That is not what in the lives of people and families. parties and find a person to talk to. this bill is about. This bill is about pre- I listened to the Senator’s personal I was just saying while Senator DODD serving home ownership, helping com- story, which is very moving. But what was in the cloakroom that I had five munities. a difference there is today in our coun- hearings myself around the State, and I have to say, I know there is a lot of try that we have been able to make my staff did, and one of the biggest politics that is being played. This is a housing and home ownership available problems was that some people political year. But we have to set aside to so many more people and to watch it couldn’t find out who to talk to. So our partisan differences. There are Re- happen, and now watch this fall apart when you have a counselor who has

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00027 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5798 CONGRESSIONAL RECORD — SENATE June 19, 2008 that expertise, one out of two times, These stories are all over the coun- did that to ensure they continue to ful- they told us, they solved the problem. try. There may be some parts of Amer- fill their public mission in a safe and So thank you again. I will be sup- ica that are untouched by this crisis, sound manner. GSEs have an obliga- porting this bill. but I will tell my colleagues that Flor- tion of more than $6 trillion in debt I would just say to my colleagues ida has been hit, and Florida has been and securities. If their risks are not who aren’t here, but to any within the hit hard. That is why I am so grateful managed properly, or if market move- sound of my voice, any amendments this bill is finally on the Senate floor ments turn dramatically against them, that will further this and make this a and that we are moving forward to act the Federal Government could face a better bill, great. But if they are nasty, on it. very serious situation. So we owe it to ‘‘let’s try to score political points’’ I agree with the Senator from Cali- the American taxpayer—our constitu- amendments, I hope we will all have fornia. We need to put partisanship ents—who would be on the line in the the courage to say no to those. aside and ideology aside. This is about event of a failure, to enact meaningful, I yield the floor. getting something good done for the comprehensive reform legislation. Mr. DODD. Mr. President, I ask unan- American people. If someone thinks A strengthened regulator is in every- imous consent that at the conclusion they can make the bill better, that is one’s best interests: The administra- of the remarks by our colleague from why we have an open amendment proc- tion, the Congress, Wall Street, inves- Florida, Senator MARTINEZ, Senator ess with amendments that are germane tors worldwide, and, most importantly, SCHUMER be recognized. to housing, and that is how we should the American home buyer. I believe by The PRESIDING OFFICER. Without keep it. Let’s hear your ideas. strengthening this regulator that we objection, it is so ordered. Knowingly filling in false informa- will create a greater level of confidence The Senator from Florida is recog- tion is a crime, and it brings to light in investors at a time when more cap- nized. some of the flaws that we have had in ital and more liquidity is needed in Mr. MARTINEZ. Mr. President, I our financial system, in our mortgage these troubled financial times. wish to thank the Senator from Cali- system. So this bill represents a good- The importance of Fannie Mae and fornia for her comments and concern. I faith, bipartisan effort to address this Freddie Mac in the housing financial wish to add my thanks on behalf of my ongoing crisis. system is simply undeniable. Real re- constituents in the State of Florida to There is help for America’s strug- form is necessary to ensure that the Chairman DODD and to Senator SHELBY gling homeowners, there is reform of public understands these two compa- for being the architects of this very major Federal programs, and there are nies can continue to make low-cost fine bill that attempts to put a floor on new ideas to help ensure that we don’t mortgage financing available to low- what is a downward spiral that we are find ourselves in a similar situation and moderate-income families. But we seeing of home prices and ever-increas- somewhere in the future. So I wish to also have to do more than help temper ing foreclosures. thank Senator DODD, Senator SHELBY, the current situation. We have to en- The National Association of Home- as well as Senator BAUCUS and Senator sure we don’t find ourselves back here builders tells us that every week an- GRASSLEY for working together on a facing the same issues again in the fu- other 47,000 homeowners are going into package that I hope will have strong ture that we are facing today. foreclosure. That is a tragic figure, as bipartisan support from the Members That is why Senator DODD and Sen- the Senator from California was say- of the Senate. ator FEINSTEIN and I have worked hard ing. I can recall during the past decade One of the most important provisions on an amendment which was accepted when each and every day we could see to me in this package is regulatory re- in committee—the Safe Mortgage Li- increasing numbers of Americans who form of the government-sponsored en- censing Act—that addresses the loose were becoming homeowners, increasing terprises. These are little-known enti- patchwork of State regulation of resi- percentages, particularly among mi- ties—I came to know them in depth dential mortgage loan originators. Our nority families—African American and while I was at HUD—Fannie Mae and amendment is included in the provi- Hispanic families—who were tasting Freddie Mac and the Federal Home sions of title V, which is included in and grasping that dream of home own- Loan Banks. They play an immense this package. It would help eliminate ership, and now we are seeing that and critical role in our Nation’s hous- bad actors from the mortgage business. dream erode and dissipate. If we can do ing finance industry. They have to be I should say most mortgage brokers something, if we can respond, then we strengthened. They have to be safe- are decent, honorable people trying to must. guarded. They are a treasure. do a good job each and every day, but This bill attempts to do that in a One of the questions that I always there have been some bad players and very measured way—in an imperfect would be asked when visiting with for- bad actors in this arena. The act would way, but in a way that I think moves eign dignitaries as HUD Secretary was, create a national registry database and us forward and allows the American How do you set up the government- require brokers and lenders to meet homeowner to begin to feel a sense sponsored enterprises? How can we rep- minimum national standards which en- that they are getting a floor under licate them in our country? So they sure that they are professional, com- them, and it allows the housing econ- are a national treasure, but all is not petent, and trustworthy. Strong licens- omy, which is so important to a State well. ing standards for mortgage brokers and such as Florida—we begin to feel as if It is important to note that when lenders are an important part of pro- we are getting a little footing going. they have reached the point where they tecting consumers and restoring con- There are some tragic stories of how are financing more than 80 percent of fidence in the marketplace. we got here. There are a number of all mortgages in the United States, There is another important compo- things that have happened in the lend- which is up from 40 percent a year ago, nent of this package, and that is the ing world that highlight the problem. and when we see that from time to reform of the Federal Housing Admin- In one situation, a gentleman from time there has been some trouble in istration, or the FHA. Congress created Ruskin, FL, was approved for a $280,000 these entities, it is time for us to have FHA in 1934 to help spur the housing home despite the fact that he was mak- a stronger and more forceful regulator. market and increase home ownership. ing $12.50 an hour with a lumber com- GSEs have been a key to the sta- It was in another time when we were in pany in Bradenton. Without his knowl- bility and the liquidity of the mortgage a troubled financial situation. edge, the mortgage originator listed market, but they are stretched. Both It was after the Great Depression. It his annual income at $60,000 a year in Fannie and Freddie continue to have fi- was one of the vehicles that moved order for him to qualify for the loan. nancial and operational issues that America, particularly after the Second Five months later, after moving into heighten the need for strengthened World War, into an ownership society. his new home, he defaulted on his oversight. As GSEs take on more risk, Instead of governmental loans or sub- subprime mortgage, depleted his sav- as Congress has allowed them to do, we sidies, borrowers purchased FHA mort- ings, and now has a black mark on his have an obligation—and by the way, I gage insurance. Since the insurance credit and no home. His story is just believe it was appropriate to do that, mitigates a lender’s risk, a lender can one of many. but now we have an obligation since we offer competitive mortgage terms to

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00028 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5799 borrowers who may have thin or imper- bailout to one mortgage company or mystery surrounding this bill. It has fect credit, or little cash on hand. another. The fact is this is a program been through the committee process. Over the past 72 years, FHA has been here to help individuals. We should not There have been a number of hearings, a mortgage industry leader, helping get distracted with side issues. The as the chairman has discussed, on each over 34 million Americans become fact is this program is inclined to help of the components of this bill. We have homeowners at no cost to the tax- those families while, at the same time, had great testimony from all of the fi- payers. working with the financial institu- nancial minds in this country. It is a I should add, in my own family, as an tions. What we have today is—if we bill that passed committee with a bi- immigrant family, when my parents could create a situation where the partisan vote of 19 to 2. There is no real had only been here a little over 2 years, home buyer could refinance, and where mystery here. I realize minor changes we grasped the American dream and the bank doesn’t have to go through have been made in the last couple of owned our first home in America. It with foreclosure—the bank doesn’t days. This is an open process. I hope we was insured and financed with an FHA- want a house, they want a payment. are not sidetracked with side issues insured loan. I had no idea what it was They don’t want to foreclose on the having nothing to do with what is at at that time. All I knew was that it homeowner. If we could do all of this stake—America’s families who are was an FHA loan that allowed us, with by using FHA, wouldn’t that be a good hurting. a very small downpayment, to get a 30- thing? And then the bonus or the des- Mr. DODD. Mr. President, Senator year fixed mortgage so we could begin sert on top of that good deal is the fact SCHUMER was, by consent, supposed to to live the American dream. That is that we can now do this by utilizing follow Senator MARTINEZ, but the Sen- the historic role FHA has played the resources of Fannie Mae and ator had to attend another meeting. throughout our Nation’s history since Freddie Mac as a backup, creating this Let me ask my colleague, how long is 1934. It can play that role again today. fund that will be there to help home my colleague from New Hampshire Prior to the FHA program, home buyers in the future. Today, in this going to be? buyers were required to have moment, it is going to be there to safe- Mr. SUNUNU. Four minutes. downpayments of as much as 50 percent guard and backstop the FHA program, The PRESIDING OFFICER. The Sen- of the purchase price. That is still true to ensure that the taxpayers are not on ator from New Hampshire is recog- in many parts of the world today. In the hook, but that homeowners are nized. those places where ownership is still a given a second chance to have a mort- AMENDMENT NO. 4999 TO AMENDMENT NO. 4983 distant dream, that is what it takes. Mr. SUNUNU. Mr. President, I rise to Financing consisted of 5-year inter- gage they can now afford, with the fi- offer an amendment. I ask unanimous est-only mortgages. FHA made the low nancial institutions taking a haircut. consent that the pending amendment downpayment, 30-year fixed rate, self- They will be taking a loss. This is no amortizing loan the standard product bailout. They will take a loss. Then the be set aside and that my amendment in the United States. Unfortunately, in home buyer will have a mortgage that No. 4999 be called up. The PRESIDING OFFICER. Is there recent years, while the mortgage in- is more in keeping with today’s market objection? dustry adapted to changes in the mar- prices. This is a win-win situation that I am delighted we have been able to see Without objection, it is so ordered. ketplace, FHA stayed the same, leav- The clerk will report. ing a large number of home buyers come through in this housing bill. I conclude by extending my thanks The assistant legislative clerk read with no option but higher cost, higher as follows: risk mortgages. to Chairman DODD and Ranking Mem- The Senator from New Hampshire [Mr. I remember when I was at HUD, each ber SHELBY. I particularly thank the chairman for his courtesies throughout SUNUNU] proposes an amendment numbered and every statistic we would get would 4999 to amendment No. 4983. show an ever-dwindling market share the process in that I have been given The amendment is as follows: for FHA of all the mortgages being an opportunity to make an impact on a originated. For many minority and couple of issues relating to mortgage (Purpose: To amend the United States Hous- brokers, and so forth. I look forward to ing Act of 1937 to exempt qualified public low-income first-time home buyers, the housing agencies from the requirement of private market provided access to being of help in any way I can in the preparing an annual public housing agency mortgage financing, but too often at process of making this bill become a plan) excessive costs. We know today that reality. At the end of Division B, insert the fol- the dream of home ownership has The PRESIDING OFFICER. The Sen- lowing: turned into a nightmare for too many ator from Connecticut is recognized. TITLE VII—SMALL PUBLIC HOUSING AU- Americans. Mr. DODD. Mr. President, I return THORITIES PAPERWORK REDUCTION I have no doubt that many of the in- that compliment. To have a former ACT dividuals in financial trouble today Secretary of HUD as a member of the SEC. 2701. SHORT TITLE. could have received lower cost loans Banking Committee is a pretty good This title may be cited as the ‘‘Small Pub- with the help of the FHA, especially if asset. When we talk about these issues, lic Housing Authorities Paperwork Reduc- the program had the flexibility to to have someone who ran that agency tion Act’’. change with the marketplace. and knows these programs as inti- SEC. 2702. PUBLIC HOUSING AGENCY PLANS FOR The FHA reform provision included mately as Senator MEL MARTINEZ has CERTAIN QUALIFIED PUBLIC HOUS- ING AGENCIES. in this package will make much needed been a great asset for the committee in (a) IN GENERAL.—Section 5A(b) of the programmatic improvements, allow developing this product. I will say this United States Housing Act of 1937 (42 U.S.C. FHA to insure larger loans, and give publicly. I am deeply grateful to him. 1437c–1(b)) is amended by adding at the end FHA more pricing flexibility. These re- Senator SHELBY is, as well, as are all of the following: forms will empower FHA to reach more the members of the committee. ‘‘(3) EXEMPTION OF CERTAIN PHAS FROM FIL- families needing help—first-time home We have had an active and involved ING REQUIREMENT.— buyers, minorities, and those with low committee. The 21 members of the ‘‘(A) IN GENERAL.—Notwithstanding para- committee have been deeply engaged in graph (1) or any other provision of this Act— and moderate income. (i) the requirement under paragraph (1) With this legislation, we have built this debate over the last year and a shall not apply to any qualified public hous- an even better program that com- half, or more, as we have had some 50 ing agency; and plements conventional mortgage prod- hearings—most of which have been re- ‘‘(ii) except as provided in subsection ucts and allows FHA to continue to lated to the subject matter—to gather (e)(4)(B), any reference in this section or any serve hard-working, creditworthy the best information and advice we other provision of law to a ‘public housing Americans. This housing bill will go a could get in developing the product we agency’ shall not be considered to refer to long way in helping those suffering in have here. The Senator from Florida any qualified public housing agency, to the the short term, and ensure our housing has been a key element in doing that. extent such reference applies to the require- ment to submit an annual public housing economy regains its strength in the Mr. MARTINEZ. Mr. President, I agency plan under this sub-section. long term. thank the chairman. I have heard in re- ‘‘(B) CIVIL RIGHTS CERTIFICATION.—Notwith- Some of the detractors have said this cent days that this bill hasn’t been standing that qualified public housing agen- FHA program will be some sort of a seen, read, and that somehow there is cies are exempt under subparagraph (A) from

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00029 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5800 CONGRESSIONAL RECORD — SENATE June 19, 2008 the requirement under this section to pre- ‘‘(II) a public hearing under subparagraph Mr. CARPER. Mr. President, yester- pare and submit an annual public housing (A) will be conducted.’’. day I was here on the floor and I shared plan, each qualified public housing agency Mr. SUNUNU. Mr. President, my with my colleagues news about work shall, on an annual basis, make the certifi- amendment deals with affordable hous- that Senator VOINOVICH and I and oth- cation described in paragraph (16) of sub- section (d), except that for purposes of such ing. This is a very large and complex ers have done to reduce the diesel qualified public housing agencies, such para- piece of legislation. I know the mem- emissions that come from the approxi- graph shall be applied by substituting ‘the bers of the Banking Committee and the mately 11 million diesel engines across public housing program of the agency’ for chairman and ranking member worked the country, causing tens of thousands ‘the public housing agency plan’. hard on this legislation. It deals with a of premature deaths from asthma and ‘‘(C) DEFINITION.—For purposes of this sec- number of government-sponsored en- cancer and other diseases because of tion, the term ‘qualified public housing terprises that the Senator from Florida those emissions. I talked about how a agency’ means a public housing agency that spoke about—the housing trust fund, number of us working together, Demo- meets the following requirements: ‘‘(i) The sum of (I) the number of public tax credits to try to deal with housing crats and Republicans, in the Senate housing dwelling units administered by the inventories, and the affordability of and in the House, cobbled together leg- agency, and (II) the number of vouchers housing. islation that would have a positive af- under section 8(o) of the United States Hous- I offer this amendment that address- fect in reducing the health threats ing Act of 1937 (42 U.S.C. 1437f(o)) adminis- es affordable housing in a slightly dif- from these emissions. tered by the agency, is 750 or fewer. ferent venue, and that is the affordable Today we bring up for consideration ‘‘(ii) The agency is not designated under housing supported and provided by another piece of legislation. It is not section 6(j)(2) as a troubled public housing housing authorities all over America. designed to save lives, but it is de- agency.’’. (b) RESIDENT PARTICIPATION.—Section 5A My amendment reaches out to those signed to make the quality of life bet- of the United States Housing Act of 1937 (42 housing authorities to help them do ter for people in this country, to make U.S.C. 1437c–1) is amended— their job better, by reducing the sure people who might otherwise not (1) in subsection (e), by inserting after amount of paperwork they have to deal have a decent place to live, might lose paragraph (3) the following: with in doing their job of providing af- their home in which they now live, or ‘‘(4) QUALIFIED PUBLIC HOUSING AGENCIES.— fordable and safe housing to people they might have a chance to retain (A) IN GENERAL.—Except as provided in across America. We look especially at that home, or maybe to obtain a home subparagraph (B), nothing in this section may be construed to exempt a qualified pub- the smallest of the housing authorities, they never otherwise would have had. lic housing agency from the requirement the ones that don’t have enormous One of the things I like especially under paragraph (1) to establish 1 or more staff, or support groups, or an employ- about this legislation is it was devel- resident advisory boards. Notwithstanding ment base to help deal with all of the oped in the same bipartisan way that that qualified public housing agencies are Federal regulations we put on them. Senator VOINOVICH and I worked on the exempt under subsection (b)(3)(A) from the This amendment says to the smallest Diesel Emission Reductions Act. We requirement under this section to prepare housing authorities in the country, have legislation here that the chair- and submit an annual public housing plan, those with 750 or fewer housing units or man of the committee, Senator SHEL- each qualified public housing agency shall BY, their staffs, and our staffs have consult with, and consider the recommenda- vouchers that they manage, if you do a tions of the resident advisory boards for the good job and are among the highest worked on for months to bring to fru- agency, at the annual public hearing re- performers, not troubled, get the job ition. Also, it involves the great and quired under sub section (f)(5), regarding any done, perform well, and pass all of the important input of the administration, changes to the goals, objectives, and policies HUD audits, you won’t have to be re- the Federal Reserve, and other bank of that agency. quired to submit a formal plan every regulators. ‘‘(B) APPLICABILITY OF WAIVER AUTHOR- single year. You still have to provide a If you go back about 2 months ago, in ITY.—Paragraph (3) shall apply to qualified 5-year plan, and you still have to meet April of this year, the Senate passed public housing agencies, except that for pur- what we call the Foreclosure Preven- poses of such qualified public housing agen- all of the civil rights laws in compli- cies, subparagraph (B) of such paragraph ance under HUD. But we take away tion Act of 2008. At the time, I spoke on shall be applied by substituting ‘the func- that administrative burden of having the floor about how that legislation tions described in the second sentence of to put together a plan every single was, as I described it, the third act of paragraph (4)(A)’ for ‘the functions described year. That makes a difference and en- a four-act play that would hopefully in paragraph (2)’. ables them to focus on their mission, begin to bring economic recovery fol- ‘‘(f) PUBLIC HEARINGS.—’’ and reduce costs and their overhead, but at lowing this mortgage meltdown. (2) in subsection (f) (as so designated by the same time leaves in place the core From time to time in this country, the amendment made by paragraph (1)), by our economy goes through a bubble of adding at the end the following: requirements that they continue to ful- ‘‘(5) QUALIFIED PUBLIC HOUSING AGENCIES.— fill that mission effectively and comply one sort or the other. Before another ‘‘(A) REQUIREMENT.—Notwithstanding that with all of the requirements of HUD. one happens, we have to go maybe 10 qualified public housing agencies are exempt This is something that is strongly years. We experienced the telecom bub- under subsection (b)(3)(A) from the require- supported by the National Association ble during which the market soared, ment under this section to conduct a public of Housing and Redevelopment Offi- and not for any good reason—maybe ir- hearing regarding the annual public housing cials. I worked closely with them in rational exuberance. Eventually, the plan of the agency, each qualified public crafting this language, and I worked values plummeted down to something housing agency shall annually conduct a more reasonable. We went through the public hearing— closely with the staff on the Banking ‘‘(i) to discuss any changes to the goals, Committee in crafting this language. housing bubble, where the housing has objectives, and policies of the agency; and They provided a good number of rec- gone up, and it is hard to explain it as ‘‘(ii) to invite public comment regarding ommendations and suggestions. anything but irrational exuberance. such changes. Unfortunately, we have not had That bubble has now collapsed, and we (B) AVAILABILITY OF INFORMATION AND NO- many vehicles dealing with housing to are looking for the bottom and for the TICE.—Not later than 45 days before the date come before the Senate. That is why I market to stabilize property values. We of any hearing described in subparagraph are trying to make sure we get to the (A), a qualified public housing agency shall— think it is especially appropriate that ‘‘(i) make all information relevant to the we try to address this and take care of bottom quickly, that we maintain the hearing and any determinations of the agen- it now, before the Senate is consumed banking system, that we help neighbor- cy regarding changes to the goals, objec- by other issues in the months ahead. hoods where there are foreclosed tives, and policies of the agency to be consid- We have a great opportunity to take a homes, which creates a blight in the ered at the hearing available for inspection common sense step that is supported community, and to try to ensure that by the public at the principal office of the by housing authorities across the coun- people in an upside-down mortgage sit- public housing agency during normal busi- uation, where the cost of the mortgage ness hours; and try. ‘‘(ii) publish a notice informing the public I ask my colleagues to support this is higher than the value of the home, that— amendment. don’t walk away from their homes and ‘‘(I) the information is available as re- The PRESIDING OFFICER. The Sen- create a further blight in their commu- quired under clause (i); and ator from Delaware is recognized. nities.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00030 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5801 I have a couple of charts I want to said: We are going to make sure, by al- home prices continued to rise, there show, you if I may. This refers to the locating $100 million, there are enough was very little risk to the lender, and four-act play. Act I stars the Federal trained counselors out there to truly for years home prices have continued Reserve, Ben Bernanke and the folks respond to people who need help. So to rise—until now. he works with. Act II, the stimulus that was part of that legislation. In In the past, homeowners could al- package we took up and debated here that legislation, we also helped local ways refinance their home and sell it earlier this year; act III, the Fore- communities deal with properties that for a profit and pay off their debt. closure Prevention Act that we passed were foreclosed on or abandoned. When home prices began to lag, about 2 months ago here in the Senate We took the Federal Housing Admin- though, a vicious cycle began to by a very wide margin; and act IV is istration, FHA, which has been around emerge, and many of these so-called legislation that has been reported out for 75 years, and we made it relevant, if subprime customers have defaulted on of the Banking Committee, I want to you will, for the 21st century. If you go their loans, and homes prices, as we say by about an 18-to-2 vote a month or back 5 or 6 years, something like 15 to know, have fallen drastically over the so ago, under the leadership of Sen- 20 percent of mortgages in this country last year in many places around the ators DODD and SHELBY. Among other were FHA guaranteed. FHA was cre- country, eliminating the option to sell things, that provides for a strong, inde- ated to help first-time home buyers be- for a profit. As a result, the financial pendent regulator for Fannie Mae and come homeowners and to help folks institutions and investors are losing Freddie Mac, which are heavily in- who had marginal credit strength be- billions of dollars and the private sec- volved in making it possible for people come homeowners as well. In the last ondary mortgage market is in sham- to become homeowners, and also ad- year or so, we didn’t have 15 or 20 per- bles. dresses the issue we are having now cent of the mortgages being FHA guar- Communities are also hurt by home where the mortgage of a home is great- anteed or insured mortgages but maybe foreclosures. Houses that have been er than the value of the home for which 5 percent. What has happened in recent abandoned attract crime and further the mortgage is held. So that is the years is people who would maybe at drive down the home values in their four-act play, and I want to maybe talk one time have used FHA to become a neighborhoods. Homeowners trying to about each of those and a couple of homeowner instead ended up relying on refinance are now finding themselves them in more detail. these exotic adjustable rate mort- in an upside-down situation where they I have been around for a while. In gages—maybe no downpayment, low in- owe more than their house is worth. talking about act I, I have never seen terest, or teaser rates to begin with Foreclosure is now more than possible, the Federal Reserve do the kinds of ex- and which balloon up to much higher it is probable for a lot of those home- traordinary things they have done this rates which are hard to get out of, and owners. We have seen hundreds of thou- year to help us avoid a recession, or if they then get stuck there and it is dif- sands of people in this country in re- we are to have one, to make sure it is ficult to refinance out of. We want to cent months literally just walk away shallow: dramatic moves in reducing make sure people don’t buy their from their homes. In fact, there is a the Fed’s fund rate; encouraging or homes with those kinds of financing company called Just Walk Away, de- taking away the stigma for financial vehicles and they go back to the plain- signed to actually help people walk institutions, commercial banks, as well vanilla or FHA insured mortgages, 30- away from their home and leave it in as noncommercial banks, investment year fixed-rate mortgages in many in- foreclosure. In February of this year, the Senate banks, to use the discount window; stances. The legislation we passed 2 Banking Committee held a hearing on serving as the marriage maker, if you months ago does just that for the FHA. the state of our Nation’s economy, and will, between JPMorgan Chase and Act IV is our effort that is currently there were a number of witnesses Bear Stearns as it was about to go underway here today to permanently there—Secretary Paulson, Federal Re- down to ensure it didn’t fail—just a overhaul the regulation of our govern- serve Chairman Bernanke, and Securi- whole series of extraordinary things— ment-sponsored enterprises, Fannie ties and Exchange Commissioner Cox. swapping out mortgage-backed securi- Mae and Freddie Mac, which are heav- All gave testimony on the problems ties that banks are holding that are ily involved—and I will explain in a facing our economy because of this highly illiquid and exchanging in place minute just how they are heavily in- housing crisis. highly liquid U.S. Treasuries. Those volved—in making it possible for peo- At that hearing, I asked Treasury are all things the Fed has done. We ple to own their homes. At the same Secretary Paulson to list the adminis- have seen them do one or two of those time, we want to help homeowners be tration’s top legislative priorities for during the course of an economic cycle, able to refinance into affordable FHA dealing with the housing crisis, and the but to see all four or five steps within mortgages as they are running into dif- Secretary’s response was unequivocal. a span of a couple of months is extraor- ficulties in their own lives. He was very clear and very direct in his dinary, and I give them high marks for I think the bill that is before us response, and this chart really summa- what they have done in act I. today, the Housing Economic Recovery rizes it. Act II was the action taken by the Act, truly is a comprehensive effort to He said, first of all, the administra- Congress to pass the economic stim- address our Nation’s housing problems. tion wants housing authorities around ulus package earlier this year. While For many years, unscrupulous lend- the country to be able to issue tax- ex- the economic stimulus package was ers paid no attention—I shouldn’t say empt revenue bonds, not just for first- not perfect, probably not the one the for many years—in recent years, un- time home buyers or for multifamily Presiding Officer or I would have de- scrupulous lenders have paid little or housing but to issue tax-exempt rev- signed, it was, to its credit, targeted, it no attention to a potential home- enue bonds to raise money to help peo- was timely, and it is temporary. Right owner’s credit history for making their ple in desperate situations refinance now, it is helping to bolster our econ- mortgage loans. Home buyers—both out of a subprime mortgage and get omy, and we expect it to add maybe 1 knowingly and unknowingly—were into something that is better suited for to 11⁄2 percentage points to our gross given mortgages they could never real- them. domestic product. istically expect to repay. One might The second thing he said is: We want Act III was the Foreclosure Preven- ask why. The answer in part lies in the FHA to be modernized and streamlined tion Act that we passed back in April fact that the financial sector has be- and brought into the 21st century so it by an overwhelming majority. I think come increasingly complicated. Today, is relevant again and can help people it passed something like 84 to 12. That a mortgage is made, really, in the with questionable credit or maybe peo- bill included a number of important blink of an eye. The mortgage is bun- ple who are fist-time home buyers. provisions, including making sure more dled with others and sliced into tiny The last thing he said is: We need to counselors are available to help folks pieces known as ‘‘tranches.’’ Wall overhaul the way we regulate Fannie who are sliding into a tough spot, Street readily buys these mortgages, Mae and Freddie Mac, with a strong, maybe thinking about walking away bundles them together as mortgage- independent regulator, much as our from their homes, going into fore- backed securities, and sells them to in- banks have strong, independent regu- closure and losing their homes. We vestors around the world. As long as lators. We need that kind of regulator

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00031 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5802 CONGRESSIONAL RECORD — SENATE June 19, 2008 at Fannie Mae and Freddie Mac and for Loan Banks. They are involved in rais- there is a shortfall of about $2 billion. the Federal Home Loan Banks. ing trillions of dollars to finance home We are supposed to be living under the The next thing I wish to do, if I can, mortgages—trillions of dollars. We pay-go rules we adopted and put in is to look at this chart. have strong, independent regulators of place in the Senate last year—empha- One of the other elements of the leg- financial institutions, thrifts, credit sis on ‘‘supposed to.’’ In a tax package islation we passed back on April 10, unions, and large bank holding compa- such as this one, where the intent was which was bundled together with the nies, and for the most part they are not to pay for the new home-buyer credits legislation I just described from the nearly as large as Fannie Mae and and other matters, we should have last chart, was to move FHA into the Freddie Mac, and Fannie Mae and stuck to our principles and found the 21st century and provide $150 million Freddie Mac don’t have a strong and necessary offsets to pay for these tax for mortgage counseling. independent regulator. They need one, breaks or simply scaled them back. Un- We have probably seen on television and with this legislation, they are fortunately, we fell short in that re- commercials that say: Having trouble going to get one. The new regulator gard. Certainly I don’t blame the chair- on your home, facing foreclosure, will have the power to establish capital man, who knows what we ought to do whatever, or facing bankruptcy? Call standards to manage the portfolio of and need to do, as do I. That is simply this number. You always wonder: Is these entities—these behemoths—to re- not the jurisdiction of our committee. that the number of a scoundrel, some- view and approve, subject to notice and In the whole package, I suppose that is body unscrupulous, or somebody who comment, new product offerings. the one disappointment I have, and my will really help the person who is in For the last few years, I have worked hope is we will come back and fix that distress? We are providing through this tirelessly with many of my colleagues, later. legislation about $150 million for some- including CHUCK SCHUMER—who is sit- Overall, though, this is great legisla- one to actually be there to help when ting right behind me—Senator MEL tion. This is great legislation. This will the phone rings. At the other end of the MARTINEZ, and others, to establish a mean real progress in a responsible line will be someone who is a trained new world-class regulator for the hous- way, and our chairman deserves great housing counselor who can answer ing GSEs. We have come close a couple credit, as does Senator SHELBY and our questions and help a person avoid fore- of times, but each time we had to let a staffs. closure and possibly losing their home. few differences stand in the way of our I say to my friend Senator DODD that Finally, we provide in this legislation progress. Today, we actually made I spoke to the majority staff, the something like $4 billion for CDBG, progress and put in place a strong, Democratic staff, yesterday in the community development block grants, independent regulator as we face an cloakroom. I sit on the Commerce so that State and local governments, uncertain future. Committee, among other committees, city governments, can help take prop- The last thing I wish to mention— and we have great staff there, espe- erties in foreclosure that are really de- and I know I said that once before, but cially at the committee level, and I caying in a neighborhood and dam- the last thing I especially like about want to say that this year our majority aging the value of the whole commu- what we do, in addition to providing a staff and I think our minority staff nity—we want counties and cities to strong, independent regulator for have really showed what they are made actually buy those properties, fix them Fannie Mae and Freddie Mac, is we re- of, and we will all benefit from that as up, and get them sold and back into quire them to establish and to begin a nation. So my hat is off to you, our the marketplace so they can get a contributing into an affordable housing leader, and to our the staffs. homeowner in that home. fund. Mr. President, to reiterate, in April, The last thing I wish to mention is Some of you know that we have these the United States Senate passed the that this housing package we are pass- 12 Federal Home Loan Banks around Foreclosure Prevention Act of 2008. At ing goes even further and creates a new the country. They raise money that that time, I spoke right here on the voluntary program within FHA to help can be used by banks in housing and Senate floor about how that legislation those folks who are in an upside-down business to help finance housing con- was the third act in a four-act play mortgage situation where they owe struction and purchases. Every one of that will begin to bring economic re- covery following the mortgage melt- more than the house is worth. What the Federal Home Loan Banks has a re- down. our legislation calls for is something quirement under the law to commit to Act I was the actions taken by the donate 10 percent of their net income we call HOPE for Homeowners, where a Federal Reserve to keep interest rates into an affordable housing fund. That number of people are asked to take a low and provide liquidity to the mar- financial haircut—not a real haircut filters back into the community, and it kets. but a financial haircut—where home- leverages a lot more money to help Act II was the action taken by Con- owners are willing to take a little fi- first-time home buyers and multi- gress earlier this year to pass the eco- nancial haircut and the lenders and in- family housing. Fannie Mae and nomic stimulus package. While our vestors as well voluntarily take a fi- Freddie Mac don’t have that require- economic stimulus package was not nancial haircut. In return, the home- ment to contribute to a housing fund. perfect, it was targeted, timely and owner agrees to stay in the home and With this legislation we are passing temporary, and right now is helping to then share the appreciation in value, this week, Fannie Mae and Freddie bolster our economy. when the value of the home rebounds, Mac will have that requirement. The Act III was the Foreclosure Preven- with the FHA. amount of money that it will generate tion Act of 2008 that just passed in This program is not intended to bail in a year, probably a couple years down April by an overwhelming majority of out investors or borrowers. Let me be the road, a half billion dollars a year— 84 to 12. This bill included important clear: The Federal Government should twice as much as is generated by the provisions to provide counseling to not be in the business of rewarding bad affordable housing fund by the Federal Americans facing foreclosure; to help behavior. We don’t want to do that, and Home Loan Banks. That will be a won- local communities deal with properties this legislation does not do that. The derful tool for us to use in our commu- in their neighborhoods that are aban- goal of this program, the HOPE for nities. doned or foreclosed; and to reform the Homeowners Program, is to help fami- I think that is pretty much what I Federal Housing Administration so lies who can stay in their homes to wanted to say. I know my friend Sen- that more Americans have access to af- stay in their homes rather than give up ator SCHUMER is behind me and anxious fordable, safe, government-backed and walk away. We are not going to get to say his piece too. So I will just close loans. rich doing this, but hopefully they will by saying that with respect to the cost Act IV is our effort currently under- still have a roof over their heads and a of the bill, I am concerned about pay- way here to permanently reform the little bit of equity in the home they ing for things, making sure if some- regulator of the government sponsored have purchased. thing is worth doing, we pay for it. The enterprises—Fannie Mae and Freddie The last thing I want to mention is tax provisions in this bill are not com- Mac—and to create a program that will in terms of regulation of Fannie Mae pletely offset. Mostly they are, but help homeowners refinance into a safe, and Freddie Mac and the Federal Home they are not completely offset. I think affordable FHA mortgage.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00032 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5803 The bill that is before us today, the low-income housing, but also to help In addition to creating a new world Housing and Economic Recovery Act, homeowners refinance out of a class regulator, this bill also creates an is truly a comprehensive effort to ad- subprime mortgage. affordable housing trust fund. This dress our nation’s housing problems. This bill also contains the FHA mod- fund will generate hundreds of millions For many years, unscrupulous lend- ernization provision, passed in the of dollars each year to be used to cre- ers paid no attention to a potential Foreclosure Prevention Act, earlier ate safe and affordable housing for homeowner’s credit history when mak- this year. those most in need. ing their mortgage loans. Home- This bill brings the FHA into the 21st The Federal Home Loan Banks al- buyers—both knowingly and unknow- century by expanding the maximum ready set aside 10 percent of their prof- ingly—were given mortgages they FHA loan limit from $360,000 to as its to go to affordable housing. Fannie could never repay. much as $625,000 in high-cost areas. Mae and Freddie Mac will now also Why? This bill also streamlines and contribute a small amount of each new The answer, in part, lies in the fact automates the process to apply for an business deal to create this new trust that the financial sector has become FHA loan, making it easier for Amer- fund. increasingly complicated. Today, a ican families to have access to safe Both Senator DODD and Senator mortgage loan is made in the blink of government guaranteed loans. SHELBY have done a very good job an eye. The mortgage is bundled up Along with these steps, the bill in- reaching a compromise on this bill. I with others and sliced up into tiny cludes $150 million for housing coun- know it is not easy. And like most pieces—known as tranches. Wall Street selors across the country, and almost compromises, this one is not exactly readily buys these mortgages, bundles $4 billion in community development perfect. them together as mortgage backed se- block grants to go to communities If I could, I would just like to take a curities and sells them to investors hardest hit by the foreclosure crisis. minute or two to express some con- around the world. The Housing and Economic Recovery cerns I have about the final product. As home prices continued to rise, Act goes even further to create a new First is an issue many of us have there was very little risk to the lender. voluntary program within FHA to help raised, and that applies to the enact- The homeowner could always refinance homeowners in ‘‘upside down’’ mort- ment date in the bill for the new GSE their home or sell for a profit, paying gages to refinance into a safe, afford- regulator. Under this legislation, the off the debt. able FHA mortgage. director of the Office of Federal Hous- When home prices began to lag, how- Under the new Hope for Homeowners ing Enterprise Oversight would have ever, a vicious cycle began to emerge. program, lenders agree to take a loss all the supervisory powers immediately Most of these so-called subprime cus- and allow a homeowner to refinance after the bill is signed into law. tomers have defaulted on their loans into a new loan. In return, the home- Under the GSE bill the House passed, and home prices have fallen drastically owner agrees to share any future ap- we would allow 6 months before the over the past year, eliminating the op- preciation with the FHA. new regulatory agency is created. To tion to sell for profit. As a result, fi- This program is not intended to help me, a 6-month cooling off period, in nancial institutions and investors are bail out investors or borrowers. Let me order to give the new agency time to losing billions of dollars and the pri- be clear: The Federal Government transition, makes sense. vate, secondary mortgage market is in should not be in the business of reward- Also, it can be argued that there is a shambles. ing bad behavior. bias against the GSEs holding mort- Communities are also hurt by home The goal of this program is to help gages on their portfolio. While we want foreclosures. Houses that have been families who can stay in their homes, to make sure that the GSEs are not abandoned attract crime and further remain in their homes rather than give taking on undue risk, we should also be drive down the home values in the up and walk away. mindful that current market condi- neighborhood. Homeowners trying to The Housing and Economic Recovery tions require the GSEs to take a more refinance now find themselves ‘‘upside Act also provides assistance to the sec- active role in ensuring liquidity in the down’’—owing more than the home is ondary mortgage market by reforming market. Today, they can only do that worth. Foreclosure is now more than the regulator for the government spon- by purchasing mortgages and holding possible, it is probable for many home- sored enterprises—often called GSEs— them in their portfolios. owners. which are made up of Fannie Mae, Another concern that I have is the In fact, there are companies that now Freddie Mac, and the Federal Home cost of this bill. The tax provisions in specialize in teaching homeowners how Loan Banks. this bill are not completely offset and to just walk away from their home. Today, Fannie Mae and Freddie Mac there is a shortfall of approximately In February of this year, the Senate are regulated for safety and soundness $2.4 billion. We are supposed to be liv- Banking Committee held a hearing on by the Office of Federal Housing Enter- ing under pay-go principles in the Sen- the state of the Nation’s economy. prise Oversight. The Department of ate. Emphasis on ‘‘supposed to be.’’ On Treasury Secretary Paulson, Federal Housing and Urban Development is the a tax package such as this one, where Reserve Chairman Bernanke and Secu- mission regulator. the intent was there to pay for the new rities and Exchange Commissioner Cox Since its creation, the Office of Fed- homebuyer credit and other matters, gave testimony on the problems facing eral Housing Enterprise Oversight has we should have stuck to our principles our economy because of the housing lacked the same regulatory powers and and found the necessary offsets to pay crisis. authorities of the other banking regu- for these tax breaks or simply scale At that hearing, I asked Secretary lators. This bill provides the new regu- them back. Unfortunately, we fell Paulson to list the administration’s lator with all of the tools needed to en- short. top legislative priorities for dealing sure that the enterprises and the Fed- Having said all that, I believe that, with this housing crisis. The Sec- eral Home Loan Banks operate in a overall, this legislation will help to retary’s response was unequivocal: safe and sound manner that is con- bring stability to our economy and Congress must allow communities to sistent with their statutory mission. make the changes to our regulatory issue more mortgage revenue bonds, The new regulator will have the structure to ensure a healthy housing modernize the Federal Housing Admin- power to: establish capital standards; sector for the future. I have worked istration and give the government manage the portfolio; review and ap- hard for years on elements in this final sponsored enterprises a new regulator. prove—subject to notice and com- housing legislation and I am hopeful I am pleased that this bill before us ment—new product offerings. they will become law soon. today addresses each and every one of For the last few years, I have worked Mr. DODD. Madam President, before the administration’s priorities. tirelessly to establish a new world he leaves the floor—I will recognize First of all, we would allow the class regulator for the housing GSEs. Senator KOHL and Senator SCHUMER. issuance of an additional $10 billion in We have come close several times, but Senator SCHUMER is on the floor. We mortgage revenue bonds to be used not each time we would let a few dif- heard from Senator MARTINEZ and oth- only for first-time homebuyers and ferences stand in the way of progress. ers.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00033 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5804 CONGRESSIONAL RECORD — SENATE June 19, 2008 This doesn’t happen miraculously. knowingly signing over the title of There are parts of this bill that are Senator CARPER has been deeply in- their house and power of attorney to extremely important. The foreclosure volved and committed to these issues the scammer and the scammer will counseling—this is something I have for a long time. There was a while then sell the house to a third party. been championing for a long time. We when I couldn’t see him without The scam artist might give the home- need counselors. For about half of ‘‘GSE’’ being the first thing out of his owner a small amount of money, but those who are about to go into fore- mouth. often only a fraction of the actual sell- closure, or will be delayed in their pay- I thank him for his persistence over ing price. ments, a mortgage counselor could be the months when we developed this As you can see, these scams are well the difference between them saving final product, and I thank him im- crafted and extremely complicated. their home and losing it; between the mensely for his work. Catie Doyle, the chief attorney for neighborhood going down the drain or The PRESIDING OFFICER (Ms. Legal Aid Society of Milwaukee, testi- staying decent; even between our econ- KLOBUCHAR). The Senator from Wis- fied before the Special Committee on omy going into a deep recession or on consin is recognized. Aging, describing the difficulties and the edges of one—the way it is now. AMENDMENT NO. 4988 TO AMENDMENT NO. 4983 problems lawyers are facing when try- We need these counselors. They are (Purpose: To protect the property and secu- ing to help victims of these scams. One not expensive. They do a world of good. rity of homeowners who are subject to major problem she pointed out was They take the place of the banker who foreclosure proceedings) that lawyers have to piece together used to be on the scene when banks Mr. KOHL. Madam President, I ask both State and Federal laws to untan- held mortgages. The CDBG money is unanimous consent to set the pending gle these scams. extremely important. We have commu- amendment aside and call up amend- The amendment I am offering will nities in Queens and Long Island and ment No. 4988. remedy Ms. Doyle’s concerns. While particularly in upstate, places such as The PRESIDING OFFICER. Without there are some States that have fore- Buffalo and Rochester and Syracuse, objection, it is so ordered. The clerk closure rescue scam laws or are in the where neighborhoods have a tough go. will report. process of enacting them, many home- You get a few foreclosed homes that The bill clerk read as follows: owners still go unprotected from these are abandoned and then vandals come The Senator from Wisconsin [Mr. KOHL] for predators. This legislation will require in and rip out the plumbing and the himself, Mrs. LINCOLN, Ms. MIKULSKI and Ms. that all contracts between a fore- electric parts. Then drug dealers come COLLINS, proposes an amendment numbered closure consultant and a homeowner be in and make these a haven for crime. 4988 to amendment No. 4983. in writing and fully disclose the nature One foreclosed home can have the Mr. KOHL. I ask unanimous consent of the services and the exact cost. Ad- whole neighborhood go down the drain. that the reading of the amendment be ditionally, the bill prohibits upfront In the suburbs, a foreclosed home dispensed with. fees from being collected and prohibits may not have those consequences, but The PRESIDING OFFICER. Without a ‘‘consultant’’ from obtaining the it certainly can mean a difference in objection, it is so ordered. power of attorney from a homeowner. the values of the home on the sur- (The amendment is printed in today’s I have a letter of support from a vari- rounding block or the surrounding area RECORD under ‘‘Text of Amendments.’’) ety of consumer groups including the going up or going down. For so many Mr. KOHL. Madam President, today I Center of Responsible Lending, Con- Americans, their home is their little rise to briefly discuss my amendment sumer Federation of America, National piece of the rock; it is all they have. No. 4988, which is cosponsored by Sen- Community Reinvestment Coalition, They put all their sweat equity in it. ators COLLINS, LINCOLN and MIKULSKI. the National Fair Housing Council, Na- For no fault of their own, because In February, I held a revealing hear- tional Consumer Law Center and the somebody else lost their home on their ing in the Aging Committee that un- National Council of La Raza. street or in their neighborhood, they covered the ways scam artists prey on The foreclosure crisis is devastating should not have to lose value. CDBG homeowners in financial and emotional homeowners and communities across will help deal with that. distress. These scams are a con- the country. Most communities across We also have in this bill mortgage sequence of the mortgage crisis that is the country are experiencing both the revenue bonds. I am very proud of the plaguing our country—and my amend- primary and secondary effects. It is im- way these have been crafted. It is $11 ment attacks this growing problem. portant that we address fraud at the billion to refinance subprime loans for For most people, their home is their front end of the lending process, as well struggling borrowers. There is a recy- greatest asset. When a homeowner falls as for those who face foreclosure. I cling provision. It is very important to behind in their mortgage payments, it hope that we can work together to my State, where we use our mortgage is a great emotional strain. Scam art- move this amendment forward. revenue bonds very quickly because ists prey on an owner’s desperation and I yield the floor. there is so much need. give them a false sense of security, The PRESIDING OFFICER. The Sen- The HOPE for Homeowners Act— claiming they can help ‘‘save their ator from New York is recognized. again, it is not going to save every- home.’’ The types of scams vary, but Mr. SCHUMER. Madam President, I body. But for the people who are under- the end result is that the homeowner is rise in support of this much-needed leg- water but not so deeply underwater, left in a more desperate situation than islation. I find it difficult to believe this is a lifesaver. It basically says to before. that with our economic crisis, the them: You can refinance your mort- There are three types of prevalent President issued a veto threat today. I gage at a lower rate. It says to the scams. The first is ‘‘phantom help,’’ would like to explain why the bill is mortgagor, you are going to get repaid, where the ‘‘rescuer’’ claims that they good, why it is needed; there are some not everything but at least most of will call the homeowner’s lender and changes I would like to see made; and what you put in. It is not a panacea. In renegotiate the loan for a fee. Often then talk a little bit about the Presi- my point of view, it would be a lot bet- the homeowner will pay the fee—but dent’s veto threat. ter to have the bankruptcy provision the ‘‘rescuer’’ will abandon the home- First, I commend Senator DODD and here as a club to get the lenders into owner without any intervention. The Senator SHELBY for working so long these, to use these provisions. But it second is a ‘‘rent-to-own’’ scheme and hard on this bill. This is not an sure does a lot more good than not which is set up to fail. A homeowner easy bill, particularly when you have doing anything at all. will sign over the title of the house and so many different concerns and consid- Of course, there is FHA moderniza- make monthly payments to the erations. I know how hard the chair- tion, which we have been seeking for a scammer in order to help rebuild their man worked on this bill. I know how long time—GSE modernization and re- credit. However, the monthly pay- hard Senator SHELBY did. They were form which creates, for the first time, ments are extremely high and often re- wide apart in what they believed in. a world-class regulator. We are going sult in the homeowner violating the They came together in the middle with to need Fannie and Freddie in future contract and being evicted. Finally, a a compromise that is a very good step years. We have to have them both be homeowner may be tricked into un- forward. safe and sound and flexible. They

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00034 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5805 should not be just private government and in some places hard to find. I hope Americans think the country is headed agencies and only do the same thing we can address this issue as well. I do in the wrong direction, it is because he banks do but with the Government im- not understand why we would not allow threatens to veto a modest bipartisan primatur. On the other hand, they can- Fannie and Freddie to hold mortgages; piece of legislation such as the one not, because the Government is behind why we put such an impetus on them Senator DODD and Senator SHELBY them, do anything they want, be reck- to securitize when the security market have put together. less or lose their capital. is weak. It defies understanding. I have al- The reform creates the right balance. If this provision stays in the bill as ways believed when ideologues run the I am proud of the reform. It raises cap- is—there is a debate. I know some be- show on the far right or far left, we ital requirements, it puts a regulator lieve it has more flexibility in it than lose. In this case, with this veto mes- in who can go in and look over their I do. But, if—if, if, if—I am right, it sage, it feels as though the ideologues shoulder—which they need. But at the could actually handcuff Fannie and have started running the show, and same time, by and large, it preserves Freddie in their role of rescuing us out homeowners, neighborhoods, commu- the flexibility that Fannie and Freddie of this housing crisis at a time when nities, and our country’s economy will need to fill the hole between the pri- they are very much needed. suffer from that wrongly held belief. vate sector and what the Government AMENDMENT NO. 4984 I yield the floor. does—and they do it well. Finally, I wish to take a moment to The PRESIDING OFFICER. The Sen- In addition, we are going to need address an amendment filed by my col- ator from Massachusetts is recognized. Fannie and Freddie to be strong be- league from North Carolina. While I re- Mr. KERRY. Madam President, let cause right now they finance about 80 spect her intentions, I oppose the Dole me begin by saying that I am delighted percent of the mortgages in this coun- amendment, which would unravel the we are on the floor of the Senate today try. We are going to need them to be strong agreement the New York attor- addressing this question of housing. I strong to help us get out of this crisis. ney general reached with the GSEs on congratulate the chairman, Senator To veto this bill when we need them so appraisal standards. Inflated appraisals DODD, on a long effort over several badly is almost—it edges toward irre- are one of the prime causes of the hous- months to be able to try to get the re- sponsibility. ing crisis. To allow banks to own ap- sponse the Senate ought to be pro- Finally, the Affordable Housing praisers without anyone looking over viding to what is an obvious crisis in Fund—to help those who cannot on their shoulder is a built-in conflict of the country. their own achieve the dream of owning interest. We should not do that. I hope I think a lot of people in the country a home but who struggle so mightily to we will not. have to be scratching their heads and get there. My colleague from Rhode Is- Finally, on the President’s veto mes- wondering where the Congress has been land, JACK REED, has done a masterful sage—this President is further and fur- on this matter, where Washington has job, persistent, knowing when, and cut ther removed from the economic reali- been, and where the administration has his deal at just the right time. ties of this Nation. To veto this bill at been. I know it is particularly frus- It is a good bill. I have two concerns a time when housing is at the nub of trating to the chairman and to many of where I agree with the House, frankly. our economic crisis—at a time when us. Way back in January, I recall going I say to my good colleague from Ala- housing prices are declining, at a time to the White House for a meeting on bama, who I know has differences on when foreclosures are increasing— the question of a stimulus package and these, that the House—and many of us makes no sense whatsoever. It seems saying to the President: Mr. President, on this side of the aisle—are of a dif- the President is on a different eco- the obvious crisis is in housing, and ferent mind than he. I hope we can nomic planet than most Americans be- you cannot address it and stem the compromise this quickly. cause, even if you do not hold a mort- hemorrhaging with respect to the First, the effective date. It is gage, even if you fully paid your mort- American economy unless you deal unheralded, when you have a major gage, you are being hurt by this econ- with the cause, which is the subprime change in the law with a new regu- omy where foreclosures are rampant crisis. lator, to say the effective date is im- and housing prices plummet. The ripple I remember Secretary Paulson was mediate. You need time. More impor- is outward—people buy less, people va- there, Vice President CHENEY, and oth- tant, I am worried that because this cation less, people have less money and ers. Heads nodded in a kind of consent. regulator, while he is great on safety feel less free with it. The vise of high Then the President proceeded to go to and soundness, doesn’t like Fannie and energy prices and declining home val- the State of the Union Message and Freddie very much and will go too far ues cripples our economy. call in his State of the Union Message in the regulations and tie Fannie and Here we have a bill passed 19 to 2 out for the mortgage revenue bond pro- Freddie’s hands for a very long time of the Banking Committee, broad bi- posal. way on into the future, with unin- partisan support, and out of the blue Still, here we are now in June, and tended consequences of which we are the President issues a veto threat. we do not have an adequate response at not aware. To give the new powers to What is going on here? Which economy the Federal level to the housing crisis the new agency overnight, with no is he looking at? It is appalling. In his from the Congress. We have had some time to establish itself or prepare, par- veto message, there is language and responses by lowering interest rates. ticularly when you have someone who there are things that contradict what But, the fact is, you pick up the paper would be in charge who does not—at his own Secretary of Treasury has said and see there were record levels of least share my views on how Fannie about portfolio loan limits. mortgages in foreclosure in the Wash- and Freddie ought to function, is a bad I think the veto message indicates ington area and in other parts of the idea. the ambivalence within the adminis- country. As we all know, when that I hope when we meet with the tration because it is not as strident happens to a community, it is not just House—I have spoken with Chairman and even as forthright as many are. a few houses, it is not just the families FRANK and he agrees with our side—I But, unfortunately, the ideologues won directly impacted by virtue of fore- hope he, Senator SHELBY, will realize out. The ideologues say: No govern- closures, it is the entire community. how strongly some of us feel. ment involvement. Let everyone learn When a street has a group of fore- Second is the idea of Fannie being their lesson even if the economy, peo- closures on it, the housing values all able to securitize. There is language on ple’s savings, their whole lives, and around start to go down. The local the portfolio regulation that could un- their home goes down the drain. pharmacy gets hurt, the gas station necessarily restrict the portfolio busi- What kind of thing is that? Maybe gets hurt, the 7-Eleven gets hurt, the ness of the GSEs by creating a bias to- that was the predominant thinking in police wind up having to patrol more ward securitization. If Fannie and 1893 but certainly not in the America because they have more homes that are Freddie want to hold some of these of 2008. then on the market. The real estate mortgages, they should—particularly I say to my colleagues, if they want market becomes glutted. now, when the securities market is ei- to know one of the reasons the Presi- So the downstream implications are ther nonexistent or weak and fragile dent is so unpopular and why so many gigantic. In Boston, Mayor Menino and

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00035 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5806 CONGRESSIONAL RECORD — SENATE June 19, 2008 I sponsored an afternoon in Roxbury about 1.5 million affordable rental ciation of Realtors, the National Asso- where families were invited to come in. housing units for our poorest families ciation of Home Builders, the Chil- We finally got them to be able to sit over the next decade. dren’s Defense Fund, the U.S. Con- down with a human being. They had As the original author of this legisla- ference of Mayors, the National Coali- been telephoning and going through 10 tion, I know what it is going to be able tion for Homeless, and many others. or 15, ‘‘push 5,’’ ‘‘push 3,’’ ‘‘push 2,’’. A to do. I had the privilege of serving on The funding from the trust fund can consecutive series of pushing buttons the Banking Committee and serving as be used for construction, rehabilita- and they were exasperated because chairman of the Housing Sub- tion, acquisition, preservation incen- they could not talk to someone to get committee. I worked with some of the tives, and operating assistance to ease answers for their individual situations. staff who are still here—Jonathan Mil- the affordable housing crisis. Funds So we got the 10 biggest lenders to ler and others—who helped pull this to- can also be used for downpayment and come in and sat them down with these gether in an effort to create a trust for closing costs assistance by first people over the course of a day. During fund that will help us provide funding. time home buyers. the time that I was there, I actually That is why I strongly oppose the Since 2006, the American housing had people come up to me with huge Bond amendment to make contribu- construction industry has shed 457,000 smiles on their faces and saying: tions to the trust fund by Fannie Mae jobs. The construction of fewer homes Thank you. I just cut a new deal. I am and Freddie Mac voluntary. I think the means fewer new kitchens, fewer new staying in my home. They were able to Bond amendment to make these con- basements for manufacturers to place go from a 13-percent interest rate— tributions voluntary is the wrong their appliances and other products. think of that, 13 percent. I would like amendment and would have a very The loss of manufacturing jobs follows to know what CEO of a company in damaging impact on our ability to be from those fewer purchases and place- America was paying 13 percent on a able to deal with rental housing and ments of appliances. Job losses combine with slumping mortgage, or 9 percent on a mortgage. the rental housing crisis. home sales to depress consumer con- But here were these hard-working Let me explain why. Fannie Mae and fidence, and that causes a slowdown in Americans paying $5,000 a month for Freddie Mac already have require- spending, and then you ultimately their home, who had put money back ments to assist low- and moderate-in- come families to obtain critical hous- shrink the economy. into their home. The equity loan they This is not a small impact. Passing ing. What we do in this bill is take ex- took on their home, in too many cases the trust fund will help create thou- cess funding that is produced in hous- sort of pushed on them, they put into sands of jobs in housing construction ing. It is not often you have a program rewiring or roofing, putting a new boil- across the Nation, and it will help to that is producing excess funding, and er in, raising the equity in their home. turn our country around. This is what Then all of a sudden their interest then there is still need in that par- a real stimulus package ought to do, rates started to go up, often by cir- ticular sector. So you can actually create jobs for the long term not pass cumstances beyond their control. One take the excess and put it back into out checks that burn up in the short woman I met and talked to held down that sector to address the need. We cre- term. It will help signal to businesses two jobs and was buying her mortgage ate that excess through GSEs. What we across the Nation to produce jobs that on the basis of the two jobs that she do is take the excess and put it into a are critical to our economic security. held down. But then she got sick and revolving fund to produce rental hous- So voting for the Bond amendment she was not able to hold onto the two ing. In September of 2000, I first intro- will, in fact, reduce our ability to ad- jobs. Because she got sick all of a sud- duced this legislation. Last year, along dress the current crisis in the economy den, she was threatened with fore- with Senator SNOWE, on a bipartisan and reduce the creation of new jobs. closure. basis, we again introduced the National Because of the lack of affordable hous- She offered to buy the home at the Affordable Housing Trust Fund to ad- ing, an awful lot of families are forced rate they were going to sell the home dress the very question of a severe to live in substandard living condi- after it was foreclosed on. She could af- shortage of housing by establishing a tions. Do you know what that does? ford to do that and could afford to pay rental housing production program. We That puts a lot of children at risk in for the mortgage at a discounted rate. now have 23 bipartisan cosponsors. America. Children living in sub- They refused to sell it to her. They re- Similar legislation passed the House standard housing are more likely to ex- fused to allow her to stay in it. of Representatives last year with a bi- perience violence, hunger, lead poi- Extraordinary circumstances of stub- partisan vote of 264 to 148. With the soning, or to suffer from asthma. They bornness or bullheadedness—I do not work of Senator JACK REED on the are then more likely to have difficul- know what principle was being applied. Banking Committee, of Chairman ties learning and more likely to fall be- But in the process, a lot of average DODD, and of Ranking Member SHELBY, hind in school. Our Nation’s children folks are getting squeezed and hurt, I they have helped to bring this bill to depend on access to affordable rental mean seriously hurt, as a result. the Senate floor at this critical mo- housing. Equally important, it has continued ment by including it in the Housing One other thing people don’t often the process of depressing the market and Economic Recovery Act. think about, if you don’t have afford- and driving it downward. So I am glad Frankly, it does not make sense in able housing or you have insecurity in we are here. I hope we can get it done terms of our economic interests, our your housing, you also have a down- because it is long overdue, long over- housing crisis interests, our family in- stream impact on schools. Because kids due. But we cannot allow the acute cri- terests, to now suddenly make vol- who have to move from home to home sis in foreclosures to also cloud the untary something that has the ability are kids who are more likely to get other opportunities that are presented to be able to address such a critical yanked out of a school. Classes are dis- in this bill. need. rupted and the school is then dis- GSE reform, the FHA reform, the The Affordable Housing Trust Fund rupted. We have a much longer term Foreclosure Protection Act, there is a would create a production program interest, in terms of our workforce de- provision in here for veterans, which I that will ensure 1.5 million new rental velopment as well as the stability of have sponsored. I think all of those are units are built over the next 10 years our communities, to make certain that important components of this bill. But for extremely low-income families and we have affordable housing available. there is also another part of the hous- working families. The trust fund will produce 1.5 million ing crisis, and it is being addressed in The goal is obviously to create long- units of affordable housing to provide this legislation; that is, the ongoing term, affordable, mixed-income devel- children in America with a better qual- and deepening shortage of affordable opments in the areas with the greatest ity of life. The Bond amendment would rental housing in our country. opportunities for those low-income make that entirely voluntary. If it is So I was very pleased the National families. It has been endorsed by more voluntary, it is not going to happen Affordable Housing Trust Fund was in- than 5,700 community organizations led today for low-income families. cluded in the Housing and Economic by the National Low-Income Housing Long-term changes in the housing Recovery Act, and that would produce Coalition, including the National Asso- market have dramatically limited the

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00036 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5807 availability of affordable rental hous- filiated, or in-house staff appraisers. Mr. BOND. Madam President, then I ing across the country. It has severely However, the code leans heavily to- will withdraw my request until my col- increased the cost of rental housing wards inconsistent and potentially league has had an opportunity to look that remains. In 2005, a record 37.3 mil- counterproductive regulation of the at it. lion households paid more than 30 per- lending industry. Lenders would essen- The PRESIDING OFFICER. The cent of their income on housing costs, tially be required to be regulated by modification is withdrawn. according to the Nation’s Housing 2007 the New York attorney general or suf- Mr. BOND. Let me explain briefly Report from the Joint Center on Hous- fer serious impairment of liquidity. In that we added one sentence to a two- ing Studies at Harvard University. Ap- addition, the role of the New York at- sentence amendment saying, in es- proximately 17 million families paid torney general in promulgating the sence, that it will not affect the GSEs, more than half of their income, 50 per- code is misplaced and an attempted ex- existing affordable housing programs. cent of their income, on housing costs. ercise of one State’s regulatory author- Those are programs already in effect. The trust fund would produce rental ity over federally and other State-regu- There was some question about wheth- housing and help lower the cost of lated lenders. er they would be affected. The amend- housing. This is especially important My amendment would require the Di- ment makes clear what was implied. I for families, those 17 million and 37 rector of OFHEO to issue a regulation expect that one will find no change in million families with high housing ex- establishing appraisal standards for it. In any event, that is not the point. penditures. Adopting the Bond amend- mortgages purchased or guaranteed by The point is to remove the tax the ment will mean that many more chil- Fannie Mae and Freddie Mac. It would Banking Committee provided, which is dren and their families will live in sub- ensure that mortgages purchased or se- a tax on GSEs which, without any standard housing or will become home- cured by Fannie Mae and Freddie Mac input or other involvement, would pay less. They are children who are ulti- are collateralized by properties subject support for a whole range of groups. mately less likely to do well in school, to fair and accurate appraisals, which There are many groups, such as if they even stay in school. I believe is necessary to maintain the integrity ACORN and others who build low-in- that is unacceptable. of the mortgage process, improve the come housing. Who knows, it might I hope colleagues will oppose the safety and soundness of the enter- even be Habitat for Humanity. But Bond amendment. prises, and reduce the potential for they would be able to use these funds The PRESIDING OFFICER. The Sen- mortgage fraud. Additionally, this to provide soft costs to support the ator from Connecticut. amendment will also ensure the estab- programs and other related costs. Mr. DODD. Madam President, I will lishment of a common set of appraisal Fannie Mae and Freddie Mac should try and propound a unanimous consent standards governing mortgage lenders be able to continue to use their exist- request one more time. that are federally supervised and regu- ing affordable housing program that I ask unanimous consent that at or lated. This includes requiring the proc- they administer, that they were set up about 4:30 p.m., the Senate proceed to ess controls necessary to ensure inde- to do, and not have their funds taken vote in relation to the following pendence, avoid improper influences, away to fund another program over amendments in the order listed, and and avoid overvaluation. which they have no control, no respon- that prior to each vote there be 2 min- In May, when the Banking Com- sibility. There is absolutely no reason utes of debate equally divided and con- mittee approved this bill we are now to tax these entities to support housing trolled in the usual form; that after the discussing, I agreed to discuss this groups which may or may not be re- first vote in the sequence, the vote amendment and asked that Chairman sponsible or capable of administering time for the second vote be 10 minutes, DODD and Ranking Member SHELBY to good housing programs. There will also with no intervening amendments in work to include this important provi- be additional economic risks to Fannie order: Bond amendment No. 4986 and sion once our committee product and Freddie, depending on the use of the Bond amendment No. 4985. Further, reached the Senate floor. At the time, these funds and the quality of the that time be allocated as follows: Sen- I appreciated how both the chairman groups which receive these funds. ator DOLE has requested 5 minutes to and ranking member made favorable More critical is the unprecedented talk about a proposal she is offering; remarks as to the intentions of my approach that requires the GSEs to pay Senator BOND for 10 minutes; Senator amendment and a willingness to work a tax for something for which they SHELBY for 10 minutes; and myself for with me on this, and I hope that they have no responsibility. 15 minutes. will now honor this commitment. Let me be clear, the GSEs have a The PRESIDING OFFICER. Without I understand the managers are work- mission. They have a very important objection, it is so ordered. ing on a time certain to vote on my mission. When we initially talked Mr. DODD. I thank the Chair. amendment. about this program, we talked about The PRESIDING OFFICER. Who I yield the floor. giving them more authority to go in yields time? The PRESIDING OFFICER. Who and help in these situations. State- The Senator from North Carolina is yields time? If no one yields time, time ments made on the other side that we recognized. will be charged equally to both sides. are going to cut off all funding and all AMENDMENT NO. 4984 The Senator from Missouri is recog- assistance to homeowners in distress Mrs. DOLE. Madam President, on nized. are absolutely irresponsible and totally March 3, 2008, Fannie Mae and Freddie AMENDMENT NO. 4986, AS MODIFIED without basis. We provided and I be- Mac signed agreements with the attor- Mr. BOND. Madam President, to clar- lieve this body adopted some good ney general of New York to adopt a ify, amendment No. 4986 relates to the ideas—I will speak about those in a Home Valuation Protection Code, affordable housing trust fund. I have a minute—in previous bills on how we which was crafted by the attorney gen- minor modification. I have asked both deal with the housing crisis. But right eral’s office and approved by OFHEO, sides if they would accept it. I ask now what we are saying is, let’s stop in consultation with the enterprises unanimous consent to so modify the this. and other market entities. The code es- amendment, and I send the modifica- This is saying to the GSEs, you may tablishes requirements governing ap- tion to the desk. have some excess left over after you praisal selection, solicitation, com- The PRESIDING OFFICER. To which have carried out your affordable hous- pensation, conflicts of interest and cor- amendment is the proposed modifica- ing mission. We want to come in and porate independence, among other tion? take it away from you and spend it things. Mr. BOND. Amendment No. 4986. someplace else. Let’s be clear, this is The code’s concept of appraiser inde- The PRESIDING OFFICER. Is there not saying to the entities that we want pendence and accuracy should be en- objection to the modification? you to do your mission. We are saying dorsed because these concepts are im- Mr. DODD. Reserving the right to ob- we are going to take away money that portant to a safe and sound process ject, I haven’t had a chance to look at you put into your mission. We are say- that is properly structured, regardless it. I would have to take a minute to ing, forget your mission. We are going of whether lenders use third-party, af- look at what he is proposing. to take some of your revenue raised in

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00037 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5808 CONGRESSIONAL RECORD — SENATE June 19, 2008 part from capital markets where pri- entities under the Affordable Housing pro- and last year about 1.5 million, as I vate sector shareholders have their re- gram unless these GSEs voluntarily provide have said, have already gone into that tirement funds, their annuities, or funding. The GSEs will continue to admin- status. their investments in those companies, ister their affordable housing program. None This foreclosure crisis hurts every- of these funds in the bill shall be used for one, as we all know. As Federal Re- hoping and expecting to share in the soft program costs, including staff costs. serve Chairman Ben Bernanke recently revenue. That may be pension funds, Mr. BOND. I thank the Chair and stated: retirement funds, endowment funds yield the floor. that are counting on getting some of [H]igh rates of delinquency and foreclosure Mr. DODD. Madam President, let me can have substantial spillover effects on the that revenue. Oh, excuse me, even take a few minutes, if I may, because I though the GSE has carried out the housing market, the financial markets, and have yet to really address these two the broader economy. Therefore, doing what mission that we asked of it and gen- amendments and also the one I know we can to avoid preventable foreclosures is erated some ‘‘excess’’ revenue that our colleague from North Carolina is not just in the interest of lenders and bor- might be distributed to those people going to propose or is in the process of rowers. It is in everybody’s interest. who put up capital in the GSEs, we are proposing. The HOPE for Homeowners Program going to take it away. AMENDMENT NO. 4985 is built on a concept raised by Chair- How long before this body decides to man Bernanke: go to other GSEs, such as Sallie Mae, Madam President, let me deal, first of all, with the HOPE for Homeowners The best solution may be a write down of and say: We have a better idea. We are principal or other permanent modification of going to take any revenue you make Program. I raised earlier this morn- the loan by the servicer, perhaps combined and we are going to put it someplace ing—and I will do it again, if nec- with a refinancing by the Federal Housing else? Or to utilities and say: You are essary—that 8,427 people as of today Administration or another lender. regulated, and you may have some ex- will file for foreclosure. That number That is also from Chairman cess money left over that you wish to was for every day in the month of May. Bernanke, the Chairman of the Federal return to your shareholders, but since That is in excess of the numbers back Reserve Bank. you are regulated, since you have a in April and even back in March. But Mark Zandi of Moody’s Economy.com government franchise to provide util- they are growing. So every single day recently wrote: ity service, we are going to take some we delay moving on this, we have, on Unless policymakers soon become more of your revenue and put it elsewhere? average, again, some 8,000 to 9,000 peo- creative and aggressive, the risks are rising ple in our country who are entering the that the current recession will be more se- To me that is an unconscionable grab. vere and the ultimate recovery more dis- It offers a precedent that is very dan- foreclosure process and losing their homes, and 1.5 million people have al- appointing than anyone currently antici- gerous for this body, to be taking funds pates. ready. We have been told and warned from one entity and transferring it to The evidence is overwhelming. The another entity by fiat. It is discrimina- by those who acknowledge and follow these issues that this is a crisis that is recommendations come from across tory, and it has the potential to have a the political spectrum. This is abso- significant impact on the people who not shrinking; it is growing. It is grow- ing by the hour, let alone by the day. lutely critical at this pivotal moment have put their money into these funds. on this economic issue. Senator KERRY The HOPE for Homeowners Act that I ask again if my colleagues have had earlier talked about that at the heart Senator SHELBY and I and 17 others of an opportunity to review the modifica- of our economic crisis is the housing our committee have fashioned to- tion as sent forward? crisis, and the heart of the housing cri- gether—very similar to what the other The PRESIDING OFFICER. Is there sis is the foreclosure crisis. Were the body has done—is designed specifically objection to the modification? Bond amendment to be adopted, the to offer some relief to these people fac- Mr. DODD. Are you going to resub- very bipartisan effort we have spent ing foreclosure. Both lenders and bor- mit the modification? months working on to achieve here rowers will take what is called a ‘‘hair- The PRESIDING OFFICER. It is at would be lost. the desk. cut.’’ It will be painful. It will not be I urge my colleagues, as they have Mr. DODD. Reserving the right to ob- easy. It is voluntary. It is temporary. heard from our colleagues—Senator ject, as I understand what my col- But it offers some hope that we can put GREGG of New Hampshire, Senator league from Missouri is suggesting is the brakes on this ever-escalating MARTINEZ, Senator ISAKSON; and on our that the existing affordable housing problem of foreclosures in our country. side, Senator BOXER, Senator SCHUMER, program under the GSE, that whatever It is not only affecting homeowners, and Senator CASEY; and, obviously, language is there that would have af- which is obviously bad enough, it is af- Senator SHELBY and myself—across the fected that is taken out by this modi- fecting commercial loans, student spectrum here—we recognize this idea fication. loans, municipal finance. The global may not solve every problem, but if we Mr. BOND. That is correct. There is implications are obvious to anyone can keep 400,000 to 500,000 people in no intent to correct that. who has paid any attention to the their homes, that is a step forward in Mr. DODD. But the modification cor- issue. So this idea, which is central to the right direction to help Americans rects that. this bill, is critical. facing these kinds of crises. I urge my Mr. BOND. That is the purpose of the The amendment offered by the Sen- colleagues, at the appropriate moment, modification. ator from Missouri would eliminate when this matter is before us, to say, Mr. DODD. The underlying amend- this program altogether, despite all the respectfully, to my friend from Mis- ment would object to the proposed ad- recommendations from the American souri that we reject this amendment dition to the affordable housing pro- Enterprise Institute, the Consumer and will keep this very critical element gram authored by Senator REID in the Federation of America, other lending of this very important housing bill. bill. That still is the substance of the institutions, the Federal Reserve mem- AMENDMENT NO. 4986, AS MODIFIED amendment? bers. In fact, the present Chairman of Madam President, the second pro- Mr. BOND. That is correct. the Federal Reserve, while not endors- posal by Senator BOND also, in my Mr. DODD. I have no objection to the ing the bill, has called for this kind of view, should be rejected. We have modification. action. modified the amendment, so any pos- The PRESIDING OFFICER. Without Quite simply, we are living through sible inference he would be striking the objection, the amendment is so modi- one of the worst housing market crises existing program has been taken out of fied. since the Great Depression. Almost 1 in this bill. I applaud him for that, and I The amendment, as modified, is as every 11 homes with a mortgage in this thank him for that. But the problem follows: country is in default or foreclosure as still persists. Insert the following at the appropriate of the end of March. This is the highest As Senator KERRY of Massachusetts place: SEC. xxx.Notwithstanding any other provi- level since the Mortgage Bankers Asso- just pointed out, this problem with af- sion of law, Fannie Mae and Freddie Mac ciation began collecting data in 1979. fordable housing is growing. It is stag- shall not be responsible or any payments ei- Foreclosure rates have grown and gering in its proportions. Over 3.5 mil- ther directly or indirectly to other Housing grown at record levels for some time, lion people in our country, including

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00038 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5809 1.3 million children, experience home- I ask my colleagues to reject that want to be heard on the amendments. lessness each year. For most of these amendment as well. Unless there is an objection, I know my families, all that is needed is affordable The PRESIDING OFFICER. The Sen- colleague wants to take a few minutes housing. ator from Alabama. to propose an amendment; is that cor- The gap between rental costs and Mr. SHELBY. Madam President, I re- rect? wages of low-income people is signifi- gret that I, too, must oppose the Mr. SANDERS. Madam President, I cant. To give you some idea as to the amendment offered by the Senator want to set aside the pending amend- housing assistance necessary for many from Missouri, amendment No. 4986. ment and send an amendment to the working Americans, a person has to Senator BOND’s amendment would spe- desk. earn over $17 an hour just to afford the cifically undermine the goal of pro- Mr. DODD. The only danger is, of average fair market rental without for- tecting the American taxpayer from course, we would have to get back on going other basic needs. That is three the costs of the HOPE Program. the matter before us to vote on the un- times the current minimum wage. I have often said—and I will repeat derlying amendments that we agreed, There are 7.4 million disabled Ameri- once again—that we should do what- by unanimous consent, to do at or cans on SSI. SSI benefits are lower ever we can to help people stay in their about 4:30. than the average fair market rent. homes short of sticking taxpayers with Mr. SANDERS. I will be very brief. I Rental costs are more than 100 percent the tab. do not need more than 2 or 3 minutes. of their SSI benefits. Without housing The Banking Committee has worked Mr. DODD. There is an objection assistance, these people who are dis- long and hard for months on this issue being voiced. abled in our country cannot afford and has found a way to accommodate a Mr. SANDERS. Then I would like to housing. That is a fact. wide range of goals and concerns with talk about the amendment. The Joint Center for Housing Studies this legislation. Mr. DODD. I say to my colleague, we of Harvard University found in their The affordable housing fund and the will have a couple votes fairly quickly, report, ‘‘The State of the Nation’s funding mechanism—which is impor- and then I will be here to entertain my Housing 2007,’’ that in just 1 year, the tant here—for the HOPE Program are colleague’s proposal. number of severely cost-burdened two of the most critical elements that Mr. SANDERS. At which time I will households—those that pay more than allowed us to reach a bipartisan agree- be able to offer the amendment? Mr. DODD. Yes. half of their income toward rent— ment. Eliminating either one of these jumps by 2.1 million to a total of 17 Mr. ISAKSON. Madam President, will now would simply unwind the entire my colleague from Connecticut yield? million. This is one in seven U.S. bill, would destroy the whole bill, and households in the country affected. Mr. DODD. I will be happy to yield to neither I nor Senator DODD nor a lot of my colleague from Georgia. The data goes on and on. This is a our colleagues on both sides of the very important element of this matter: Mr. ISAKSON. The amendment we aisle can support that. discussed earlier when I made my re- affordable, decent shelter. Therefore, I urge my colleagues to Harry Truman, in a bipartisan effort, marks regarding the effective dates on join us in opposing the first Bond in the late 1940s—60 years ago—called the tax credit is here. I do not think amendment. upon Americans. John Sparkman of there is an objection. At some point in Alabama was ‘‘Mr. Housing’’ back in AMENDMENT NO. 4985 time, can I be recognized to call it up? the 1950s and 1960s. This was never a Madam President, I would like to Mr. DODD. Certainly. I will again partisan issue: decent, affordable shel- speak for a minute on the Bond amend- make the same recommendation I have ter for Americans—all Americans. ment No. 4985, the second amendment. made to our colleague from Vermont. We heard our colleagues today: Sen- While I am sympathetic to and share If the Senator from Georgia will wait a ator MARTINEZ talking about his fam- many of Senator BOND’s concerns re- few minutes, we will be glad to take— ily getting that first home when they garding FHA’s longtime management in fact, I invite, as my colleague from arrived in this country. Senator BOXER problems and resource constraints, I Alabama does, any other amendments grew up her entire life never owning cannot support this amendment. besides those we have heard about here their own home, and she was able to The proposed HOPE for Homeowners that people want to raise. We are anx- buy one as a young mother, and they Program establishes a new board to ious to do business. We are going to stayed there for 40 years to raise their oversee the implementation of this have a couple votes, but obviously family. program. Included on this board, in ad- there may be some other thoughts peo- Madam President, 17 million people dition to HUD, are the FDIC, the Fed- ple have on the subject matter. Cer- in our country today deserve decent eral Reserve, and the Treasury Depart- tainly, I will be here to entertain that shelter. You should not have to strip ment. It is our intention that the ex- amendment. every bit of income you have to try to pertise and experience of this board Mr. ISAKSON. I thank the Senator. afford it. So what JACK REED has put will compensate for FHA’s long- Mr. DODD. Madam President, again, together here is decency—common de- standing management problems. I do not know if other Members wish to cency. In our moment of difficulty, if Additionally, the bill would provide— be heard on the pending matters; that we cannot do something to provide af- this is important—at no cost to the is, the two Bond amendments, which fordable shelter and to ask that fund- taxpayer, funding for additional re- are the subject of the pending votes. ing flow come out of these government- sources, particularly in the form of in- Does my colleague from Vermont sponsored enterprises, which have been creased staff, to manage and imple- wish to be heard on the pending amend- so lucrative, for them to share in that ment the proposed HOPE Program. ments? wealth, to make it possible for working While I agree with Senator BOND that Mr. SANDERS. Yes. I wish to raise families in this country to have a de- depending solely on existing FHA re- an issue. And it is my intention at the cent place to live—I do not think that sources, the HOPE Program would be appropriate time to offer an amend- is too much to ask in this hour of need. unworkable, I believe the increased re- ment which I hope we can get a vote on We heard our colleagues across the sources and board oversight provided in because this is an amendment of huge spectrum politically support this pro- this legislation sufficiently address consequence; that is, with the price of gram, and having a vote of 19 to 2 in those concerns. heating fuel soaring, if we do not sig- our committee, with Democrats and I encourage my colleagues to oppose nificantly expand LIHEAP funding, Republicans coming together at a mo- this second Bond amendment, too. there are going to be people who will ment such as this to say: We hear you. Mr. SANDERS addressed the Chair. go cold, people who will die this winter. We care about what you are going The PRESIDING OFFICER. Who We have heard about a number of na- through. We have designed a program yields time to the Senator from tional emergencies out there. I am cer- not by increasing taxes but by asking Vermont? tainly sensitive to the crisis taking existing institutions to share, to see to Mr. DODD. Madam President, I will place in Iowa and as to the remnants of it all Americans can enjoy that afford- address my colleague from Vermont Hurricane Katrina in Louisiana. But I able and decent shelter they deserve as through the Chair. As I understand it, want Members of this body to under- Americans. we have heard from the Members who stand that if we do not substantially

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00039 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5810 CONGRESSIONAL RECORD — SENATE June 19, 2008 increase LIHEAP funding, there will be that can meet the minimum livery require- on affordable housing programs. We people in the northern tier of this ment, these households face the prospect have worked a long time on these pro- country who will go cold this winter that a dealer will not make a delivery or will grams together, and he and I, together, because they cannot afford to pay the require a surcharge, further reducing the purchasing power of LIHEAP assistance. pushed for $180 million for counseling outrageously high prices of home heat- The demand for this highly effective pro- for families facing foreclosure. We have ing fuels that they are going to be gram continues to increase even as the pur- gotten that passed. I have been out and asked to pay. chasing power of the LIHEAP dollar plum- talked with the people who are victims, At the appropriate time, I will bring mets, and the average LIHEAP benefit de- the people who are helping them, the creases. If federal funding remains level or forth an amendment to increase fund- local officials, and that is working. ing by $2.53 billion for fiscal year 2008. declines as home energy prices continue to Madam President, the Northeast Coali- rise, states face the difficult decision of serv- Based on what I learned from talking ing fewer households or reducing the level of tion of Governors has made that re- to the people who are suffering from already stretched benefits. States in the this foreclosure epidemic and from the quest and that is the number I am Northeast have already incorporated various going to be bringing forth. administrative cost-savings to deliver the real problems in the subprime market I wish to have printed in the RECORD maximum program dollars to households in caused by predatory lending, which the the letter that was written by the Coa- need. In spite of these efforts to stretch fed- Senator from Maryland, Ms. MIKULSKI, lition of Northeastern Governors which eral and state LIHEAP funds, the need for and I tried to get HUD to stop a few is demanding that we have at least $5.1 the program is far too great. Increased, predictable and timely federal years ago, we came up with a solution. billion—which is what, as I understand, funding is vital for LIHEAP to assist the na- That solution I offered on the floor: the the authorized level is—that that be, in tion’s vulnerable, low-income households Security Against Foreclosure and Edu- fact, appropriated. faced with exorbitant home energy bills. cation Act, the SAFE Act, most of There being no objection, the mate- With an appropriation at the $5.1 billion au- which was incorporated in the housing rial was ordered to be printed in the thorized level, distributed to ensure that ad- bill we passed in April. I believe those RECORD, as follows: ditional funding is provided to all states, the program can offer meaningful assistance to things went at this problem in the COALITION OF more households in need, lessen the need for right way. We understand there is a NORTHEASTERN GOVERNORS, emergency crisis relief, and make optimum problem. Washington, DC, June 18, 2008. use of leveraging and other cost-effective Hon. DAVID OBEY, What I am saying is I fear that tax- programs. Chairman, Committee on Appropriations, On behalf of all the CONEG Governors, we ing GSEs or taking money, expro- House of Representatives, Washington, DC. urge you to support funding for LIHEAP at priating money from GSEs and setting Hon. JERRY LEWIS the $5.1 billion level in the FY2009 Labor, up this HOPE Now Program is a false Ranking Member, Committee on Appropriations, Health and Human Services, and Education hope because FHA can’t manage it, and House of Representatives, Washington, DC. appropriations bill. they are likely to have a tremendous Hon. JAMES WALSH, Regards, Ranking Member, Subcommittee on Labor, JIM DOUGLAS, impact, No. 1, potentially on the hous- Health and Human Services, and Edu- Chair, Governor of ing budget coming out of the tax- cation, Longworth House Office Building, Vermont. payers’ pockets. We don’t have enough Washington, DC. DAVID A. PATERSON, money to pay for all the things we need DEAR CHAIRMAN OBEY, RANKING MEMBER Vice-Chair, Governor to do for public and assisted housing. LEWIS AND RANKING MEMBER WALSH: As the of New York. Subcommittee begins consideration of the JOHN LYNCH, The SAFE Act said reform FY2009 Labor, Health and Human Services, Lead Governor for FHASecure so it could work for some- and Education appropriations bill, the Coali- LIHEAP, Governor body who had missed a payment or tion of Northeastern Governors (CONEG) of New Hampshire. two, lower the GSE’s capital require- urges you to support funding the Low-In- Mr. SANDERS. So at the appropriate come Home Energy Assistance Program ment so they could lower this capital (LIHEAP) at the $5.1 billion level authorized time, I will be down here to offer—I housing program; also, provide $10 bil- by the Energy Policy Act of 2005. We recog- wish to check with my colleague from lion of authorization for State housing nize the considerable fiscal challenges that Connecticut. Is there going to be any finance agencies to raise additional face the Appropriations Committee this year problem with me getting a vote on this funds to refinance these mortgages and we deeply appreciate the Subcommit- amendment? which are in default. That, I believe, is tee’s continued, strong support for the Mr. DODD. Well, there could be. I the best way to do it. That is why I am LIHEAP program. However, increased can’t say that is not going to be the LIHEAP funds are urgently needed in the case. But getting a vote, that is cer- very much concerned that we are going face of continually rising energy prices (par- tainly a possibility. Let me talk with down the wrong road, trying to put a ticularly for delivered fuels) and the increas- burden on the FHA to do something ing number of households in arrears to en- others and see what the intention would be. they are not up to. I am afraid the ergy utilities. Funding the LIHEAP block HOPE Program is a false hope for grant program at the $5.1 billion level, and Mr. SANDERS. OK. I think this vote providing it in a manner that will ensure ad- is long overdue, and it is something the 130,000 families who will enter the pro- ditional funding to all states, will help re- American people want to see. gram and then default and face fore- store some of the purchasing power of the Mr. DODD. Madam President, let me closure. program and enable states across the nation inquire, as I understand, the Senator The hope is the FHA will somehow be to provide meaningful assistance to citizens from Missouri has 8 additional minutes struggling to pay unaffordable home energy able to dispose properly of those 130,000 remaining on the UC? homes while they are trying to manage bills. The PRESIDING OFFICER. That is The low-income households targeted by the correct. their portfolio. Experience shows that LIHEAP program are hit particularly hard The Senator from Alabama has 10 will not work. No matter what kind of by soaring energy prices, especially home en- board you set up, FHA cannot take on ergy prices. An increasing number of house- minutes remaining, and the Senator holds are in arrears to energy utilities. For from Connecticut has 3 minutes re- all those additional responsibilities. the households who depend upon delivered maining. This program is far more likely to re- fuels such as heating oil and propane, the The Senator from Missouri is recog- sult in a huge bailout for lenders, while outlook is particularly troubling since they nized. protecting a very limited number of lack the benefit any utility assistance pro- Mr. BOND. Madam President, I ask homeowners. gram. These households are concentrated in unanimous consent to add the Senator The Congressional Budget Office— the Northeast, where almost 32 percent of from Wyoming, Senator BARRASSO, as a hear this: the Congressional Budget Of- LIHEAP recipient households rely upon de- cosponsor of the amendment No. 4985. livered fuels, compared to 12 percent nation- The PRESIDING OFFICER. Without fice estimates that under this program, ally or approximately 4 percent in many objection, it is so ordered. mortgage holders would have an incen- warm weather states. Even before the price Mr. BOND. Madam President, to tive to direct their highest risk loans of crude oil reached its recent record level, to the program. They estimate the cu- EIA estimated hat households heating pri- begin, I think I should make some gen- marily with home heating oil will pay ap- eral comments about my concern and mulative default rate of the HOPE Pro- proximately $2,000 to heat their homes this about my ability to work with the dis- gram would be 35 percent—one out of year. Without an adequate LIHEAP benefit tinguished chairman of the committee three—worst of the worst loans and

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00040 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5811 FHA would get them. Where would Mr. SHELBY. Madam President, is a temporary fix to the mortgage cri- they get them? From companies that what is the pending business? sis; this is long-term solution aimed at have been a part of the problem. The PRESIDING OFFICER. The addressing a long-term problem of not According to the Wall Street Jour- Democratic side has 2 minutes remain- having enough affordable housing in nal, Countrywide issued $167 billion— ing and the Republican side has 5 min- this country. It is absolutely nec- Countrywide Financial, $167 billion. utes remaining. essary. They had 11 percent of the subprime Mr. SHELBY. I yield 1 minute, at The Bond amendment would essen- market and now, according to the Wall this point, to the Senator from Geor- tially say: Well, yes, you can have a Street Journal, they have $30 billion of gia, Mr. ISAKSON. housing trust fund, but we are not it, either in their own foreclosures or The PRESIDING OFFICER. The Sen- going to fund it because the funding for those they have offered a guar- ator from Georgia is recognized. mechanism comes from Fannie Mae antee. So there is $30 billion of bad Mr. ISAKSON. Madam President, I and Freddie Mac. Oh, by the way, you loans on which Countrywide is at risk, wish to use this minute to set aside the can create a home ownership protec- and this program could be used to refi- pending amendment and call up—— tion program, but the first 3 years of nance all those programs. Mr. DODD. I would have to object. affordable housing trust fund monies If a lender or a holder was facing There is an objection being raised. won’t be available to help pay for it, foreclosure and knew he had to go to Mr. ISAKSON. Then, since I have had which was how we dealt with the objec- foreclosure, it calculates the cost of my say, I wish to defer my 1 minute to tion of Senator SHELBY and many oth- foreclosure and takes some of that off Senator CORKER without calling up an ers that we not use public funds to help the value of the home and refinances amendment. with the foreclosure problem. that value and hands it off to FHA, and Mr. SHELBY. Madam President, I This is a way in which we can accom- FHA gets stuck—gets stuck with it. will yield 2 minutes to the Senator modate many objectives: helping peo- The FHA has shown they cannot man- from Tennessee. ple facing foreclosure without using age and implement the existing loan The PRESIDING OFFICER. The Sen- public funds and in the long term cre- activities. You can read the lengthy IG ator from Tennessee is recognized. ating a permanent, affordable housing reports, the GAO reports. Anybody who Mr. CORKER. Madam President, I trust fund. There is no place in this has looked at the FHA said they can’t feel as though I have a very generous country—none of my colleagues have handle the job now. They have ex- allotment, and I appreciate that. I wish places—where the constituents are not panded from 2 percent to 6 percent of to speak on the Isakson amendment. coming up and saying we need help the market, and they can’t even handle JOHNNY ISAKSON, from Georgia, has with affordable housing. The rent is that additional level now. tremendous experience in the area of going up. We can’t afford it. We are on The head of the FHA said this could housing, and I think he brought to this the street. Please help us. That prob- be a tremendous burden on his agency body a great proposal that is part of lem will not expire when this fore- and potentially on the taxpayers. If the bill we are now debating and that closure crisis is over. FHA is ultimately held at risk for is the $8,000 first-time home buyer Let me also say I think it is entirely these, they could be in a position where credit. One of the flaws in the bill appropriate that Fannie Mae and money that would otherwise go to sup- today, as it sits, is the fact that this Freddie Mac participate. They were chartered originally as quasi public en- port Section 8 vouchers or public hous- credit begins on April 1, so people who tities. They have—we have given them ing operating or capital subsidies have already bought loans would be and we continue to give them—afford- would have to be diverted to FHA to participating. I think the purpose of able housing responsibilities. That is pay back the worst of the worst loans— this amendment that he so wisely part of their mission, part of their according to CBO—the worst of the crafted and has brought forward was mandate. Some would say: Well, listen, worst loans that would be pawned off actually to stimulate new home buyer if that is the case, let them decide on the FHA. housing, not to reward people who have what they want to do. We spent years Nobody cares more than I about deal- already taken action. So his amend- creating this affordable housing pro- ing with and providing as much help as ment that I am supporting and cospon- gram. One of the criticisms of this pro- possible to those people who are unfor- soring would actually establish as the gram was that if you gave Fannie and tunately facing foreclosure, perhaps date of enactment the time that that 1- Freddie control of the money or re- because of lack of information or even year time clock would begin. It only quired them to spend in a certain way, misinformation that was given them makes sense that the purpose of this it would become politicized. They about the loans into which they en- provision in the bill, this compromise would pick winners and losers not tered and the change in the market bill, is to stimulate home buying, not based upon needs in certain parts of to reward people who have already which caught them unaware, such as the country but based on political ad- done so. the situation I discussed earlier today vantage. That was a criticism that was I hope the manager of the amend- of Mr. Willie Clay, the Vietnam vet- advanced most strenuously by my Re- ment might accept this amendment. If eran who found his mortgage rate read- publican colleagues. So we have cre- not, I hope we will be able to call this justing 50 percent higher, which would ated an affordable housing program, amendment up in the very near future throw him out of the house. He had an part of which is lodged at Treasury and after this vote. 8.2 percent rate and it was going to go part of which is lodged at HUD. up to over 12 percent. He needs help. Mr. DODD. Madam President, I have If the Bond amendment is adopted, These people need help. But bailing— 2 minutes or 3 minutes remaining, and we are giving up the last chance we let us bail out the people who are in I yield to my colleague, the Senator have for an affordable housing trust trouble through the housing—State from Rhode Island. fund in this country, the last major housing finance agencies or The PRESIDING OFFICER. The Sen- chance. I urge opposition. FHASecure; don’t have FHA set up to ator from Rhode Island is recognized. Mr. SHELBY. Madam President, how take the fall with the worst of the Mr. REED. Madam President, I come much time do I have remaining? worst loans from lenders, some of to speak against the proposal by Sen- The PRESIDING OFFICER. Four whom may have been ones who put us ator BOND which would significantly— minutes. in the problem. in fact, catastrophically—undercut the Mr. SHELBY. I yield back the re- I urge the support of my two amend- affordable housing program we have in- mainder of my time. ments and I yield the floor and reserve cluded in this legislation, with the sup- AMENDMENT NO. 4986, AS MODIFIED the balance of my time. port of Chairman DODD and Ranking The PRESIDING OFFICER. All time The PRESIDING OFFICER. Who Member SHELBY. is yielded back. yields time? This legislation is necessary. Even Mr. DODD. I ask for the yeas and Mr. DODD. Madam President, I know before we had a foreclosure crisis, hun- nays. Senator SHELBY had some time remain- dreds of thousands of Americans—mil- The PRESIDING OFFICER. Is there a ing. I don’t know if he intends to use it. lions—did not have decent, affordable sufficient second? There is a sufficient He may not. housing. So this is not something that second.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00041 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5812 CONGRESSIONAL RECORD — SENATE June 19, 2008 The question is on agreeing to the Mr. DODD. Madam President, let me of the Congressional Budget Act with Bond amendment No. 4986, as modified. briefly say to my colleagues that this respect to the amendment, and I ask The clerk will call the roll. is the second Bond amendment. This for the yeas and nays. Mrs. MCCASKILL (when her name was amendment would eliminate the HOPE The PRESIDING OFFICER. Is there a called). Present. for Homeowners Act, almost the cen- sufficient second? Mr. DURBIN. I announce that the terpiece of this legislation. This is an There is a sufficient second. Senator from New York (Mrs. CLIN- idea that was recommended to us by a The yeas and nays were ordered. TON), the Senator from Iowa (Mr. HAR- broad spectrum of people on the eco- The PRESIDING OFFICER. The KIN), the Senator from Massachusetts nomic agenda here dealing with the question occurs on agreeing to the mo- (Mr. KENNEDY), the Senator from Con- issue of how we keep people in their tion to waive the Budget Act in rela- necticut (Mr. LIEBERMAN), and the Sen- homes. This idea has been endorsed by tion to the Bond amendment No. 4985. ator from Illinois (Mr. OBAMA) are nec- the American Enterprise Institute, the The yeas and nays have been ordered. essarily absent. Consumer Federation of America, and The clerk will call the roll. Mr. MCCONNELL. The following Sen- many other groups and organizations The legislative clerk called the roll. Mr. DURBIN. I announce that the ators are necessarily absent: the Sen- that have suggested this idea could Senator from New York (Mrs. CLIN- ator from Tennessee (Mr. ALEXANDER), possibly keep as many as 400,000 to TON), the Senator from Iowa (Mr. HAR- the Senator from Kansas (Mr. 500,000 people in their homes. BROWNBACK), the Senator from New Every day in the month of May, 8,427 KIN), the Senator from Massachusetts Mexico (Mr. DOMENICI), the Senator people filed for foreclosure. Every sin- (Mr. KENNEDY), the Senator from Con- from Arizona (Mr. KYL), the Senator gle day. Every day, over 8,000 people necticut (Mr. LIEBERMAN), and the Sen- from Arizona (Mr. MCCAIN), and the are filing for foreclosure in our coun- ator from Illinois (Mr. OBAMA) are nec- Senator from Kansas (Mr. ROBERTS). try. Every day that goes on and we fail essarily absent. Mr. MCCONNELL. The following Sen- Further, if present and voting, the to take a step to do what we can to see ators are necessarily absent: the Sen- Senator from Tennessee (Mr. ALEX- that we can keep people in their homes ator from Tennessee (Mr. ALEXANDER), ANDER) would have voted ‘‘no.’’ and get our economy back on its feet, the Senator from Kansas (Mr. The PRESIDING OFFICER. Are there a day is lost and it endangers our econ- BROWNBACK), the Senator from Arizona any other Senators in the Chamber de- omy even further. siring to vote? The Bond amendment strips this bill, (Mr. KYL), the Senator from Arizona The result was announced—yeas 11, the HOPE for Homeowners Act, which (Mr. MCCAIN), and the Senator from nays 77, as follows: we passed 19 to 2 out of the Banking Kansas (Mr. ROBERTS). Further, if present and voting, the [Rollcall Vote No. 152 Leg.] Committee. We have had extensive Senator from Tennessee (Mr. ALEX- YEAS—11 hearings on it. It is a bipartisan pro- ANDER) would have voted ‘‘no.’’ Barrasso Coburn Grassley posal that we hope will make a dif- The PRESIDING OFFICER (Mr. NEL- Bond DeMint Inhofe ference in our country. What better SON of Florida). Are there any other Bunning Ensign Vitter step could we take this evening than to Burr Enzi Senators in the Chamber desiring to reject this amendment and endorse the NAYS—77 vote? idea that we are going to do everything The yeas and nays resulted—yeas 21, Akaka Durbin Nelson (FL) we can to keep homeowners in their nays 69, as follows: Allard Feingold Nelson (NE) home? Baucus Feinstein Pryor [Rollcall Vote No. 153 Leg.] I will make a point of order, Madam Bayh Graham Reed YEAS—21 Bennett Gregg Reid President, after Senator BOND has spo- Biden Hagel Rockefeller ken. Allard Craig Inhofe Barrasso Crapo McConnell Bingaman Hatch Salazar The PRESIDING OFFICER. The Sen- Boxer Hutchison Sanders Bond DeMint Murkowski ator from Missouri. Bunning Ensign Sessions Brown Inouye Schumer Burr Enzi Stevens Byrd Isakson Sessions Mr. BOND. Madam President, a cou- Cantwell Johnson Coburn Grassley Thune Shelby ple of months ago, we passed a good Cardin Kerry Cornyn Hutchison Vitter Smith Carper Klobuchar bill to say we would authorize $10 mil- Snowe NAYS—69 Casey Kohl lion for State housing finance agencies Specter Chambliss Landrieu Akaka Durbin Murray Stabenow to help refinance homes where the own- Cochran Lautenberg ers were facing foreclosure. A good ap- Baucus Feingold Nelson (FL) Coleman Leahy Stevens Bayh Feinstein Nelson (NE) Collins Levin Sununu proach. This is a disastrous approach. Bennett Graham Pryor Conrad Lincoln Tester CBO has said that the lenders—the peo- Biden Gregg Reed Corker Lugar Thune ple, some of whom made some of the Bingaman Hagel Reid Cornyn Martinez Voinovich Boxer Hatch Rockefeller Craig McConnell Warner bad loans in the first place—will dump Brown Inouye Salazar Crapo Menendez Webb the worst of their worst loans on FHA. Byrd Isakson Sanders Dodd Mikulski Whitehouse Last week, FHA, floundering under Cantwell Johnson Schumer Dole Murkowski Wicker existing portfolio losses, announced Cardin Kerry Shelby Dorgan Murray Wyden Carper Klobuchar Smith $4.6 billion in losses, 22 percent of their Casey Kohl Snowe ANSWERED ‘‘PRESENT’’—1 reserves, raising questions about their Chambliss Landrieu Specter McCaskill ability to maintain solvency. FHA Cochran Lautenberg Stabenow Coleman Leahy Sununu NOT VOTING—11 can’t do it. Thirty-five percent of the Collins Levin Tester Alexander Harkin McCain loans under the HOPE for Homeowners Conrad Lincoln Voinovich Brownback Kennedy Obama have been bad. The defaults would hurt Corker Lugar Warner Clinton Kyl Roberts the FHA. This provision would allow Dodd Martinez Webb Domenici Lieberman Dole McCaskill Whitehouse lenders such as Countrywide Financial, Domenici Menendez Wicker The amendment (No. 4986), as modi- which had 11 percent of the subprime Dorgan Mikulski Wyden fied, was rejected. market, and according to the papers NOT VOTING—10 Mr. DODD. I move to reconsider the has $30 billion of the worst loans, to Alexander Kennedy Obama vote. dump those on the FHA. Brownback Kyl Roberts Mr. KERRY. I move to lay that mo- I urge support of the amendment. Clinton Lieberman tion on the table. Mr. DODD. Madam President, I raise Harkin McCain The motion to lay on the table was a point of order that the pending The PRESIDING OFFICER. On this agreed to. amendment violates section 201 of S. vote, the yeas are 21, the nays are 69. AMENDMENT NO. 4985 Con. Res. 21, the concurrent resolution Three-fifths of the Senators duly cho- The PRESIDING OFFICER. Under on the budget for fiscal year 2008. This sen and sworn not having voted in the the previous order, there is 2 minutes is the pay-go point of order. affirmative, the motion is rejected. each, evenly divided. Mr. BOND. Madam President, I move The point of order is sustained, and the The Senator from Connecticut. to waive the applicable points of order amendment falls.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00042 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5813 The Senator from Connecticut is rec- tinue to be at the forefront of our ef- from people in the Pentagon, that ognized. forts. Local churches have made heroic there was a priority 1 item out of the Mr. DODD. Mr. President, my good efforts. The Salvation Army and Red Pentagon. friend, the Senator from Iowa, Senator Cross have been in Iowa since the be- But it has been in law, at the discre- GRASSLEY, asked if he could speak for 2 ginning. I cannot say enough about the tion of service Secretaries for 6 years. or 3 minutes on an unrelated matter. local officials, including law enforce- So we are willing to accept this provi- The PRESIDING OFFICER. The Sen- ment, fire departments, and the Iowa sion as it comes over. ator from Iowa is recognized. National Guard. We are enormously grateful the Mr. GRASSLEY. I ask permission to I would like to extend my thank-yous President said he will not veto this bill speak for 3 minutes as in morning busi- to all my colleagues who have come because, quite frankly, it has been al- ness. forth showing their support. I think I most 7 years since 9/11. The operational The PRESIDING OFFICER. Without can speak for both Senator HARKIN and tempo of the people who have been objection, it is so ordered. myself in saying we have had people in serving has gone up. They deserve a IOWA FLOODS private coming up to us on the Senate wartime GI bill. They are going to get Mr. GRASSLEY. I come to the floor floor. Having that happen is very grati- it. I wish to express, again, my appre- today to give my colleagues an update fying. ciation to all the members of this on the devastating floods in Iowa, but Many of you have had similar events body—we had 58 sponsors, including 11 you can also say a lot of the Midwest. occurring in your own States and un- from the Republican party—and to all The President is seeing the floods for derstand the pain we feel once again in the veterans groups who helped make the first time today. I appreciate Sen- Iowa. Our constituents are going to this possible. ator HARKIN being there with him. need the Federal Government’s help. The PRESIDING OFFICER. The Sen- Senator HARKIN and I are working Senator HARKIN and I have been meet- ator from Virginia. closely together to make sure every ing often and have also put together a Mr. WARNER. Mr. President, I wish base is covered in Iowa. We traveled coalition of Midwest Senators whose to congratulate my colleague, Senator throughout Iowa last weekend. We are States were also hit. WEBB. He and I have known each other meeting regularly to sort through ev- I thank all my colleagues for giving for a very long time. When I was Sec- erything that needs to happen. Today, our constituents the help they need as retary of the Navy, he was a young cap- we are covered, with him in Iowa with we continue down this road. tain, just back from Vietnam, serving The PRESIDING OFFICER. The Sen- the President and me in the Senate to on my staff. work for disaster recovery provisions ator from Connecticut. When he came to the Senate, he indi- in this very housing bill. The President Mr. DODD. Mr. President, if I may, I cated his top priority was to get a revi- has already named 55 of our 99 counties yield 4 minutes to my colleague from sion of the existing framework of laws as Federal disaster areas. Virginia. More need to be named. I think he Mr. WARNER. Mr. President, I do not governing the GI bill because he felt will see today the need to continue tend to object. May I have 4 minutes very strongly, based on his long and heroic service to this country in uni- these declarations. During our tours following Senator WEBB? through several communities last Mr. DODD. No objection. form that we owed this generation ev- week, and hopefully again this week- The PRESIDING OFFICER. Without erything that previous generations had end, we were pleased to see a great deal objection, it is so ordered. received by virtue of educational bene- fits. of coordination between FEMA, SBA, GI BILL and our local officials. It sounded as Mr. WEBB. Mr. President, I wish to I said several times on this floor, ac- though they were all talking with one speak actually in conjunction with the knowledging with the greatest humil- voice, which is comforting to Iowans senior Senator. It is fine with me if he ity and thankfulness in my heart for looking for guidance and support and, wants to follow me for 4 minutes. I two periods of military service I had of particularly, it looks a lot different wish to speak for a bit about the an- no great significance, but, neverthe- than during Katrina, when it seemed nouncement from the White House less, enabled me to have a GI bill from like that was not particularly the case. today to the effect that the President a short service at the end of World War Today, many people are starting to has agreed he will not veto the GI bill II and for service during the Korean get back in their homes and businesses. we have worked on so hard for the last war. North of Iowa City, receding waters are 17 months; that he is willing to accept One GI bill got me a bachelor’s de- bringing further heartache as residents this legislation. gree, the second a law degree. I felt, salvage what they can and then throw I wish to say how grateful I am to all just as Senator WEBB, this generation away what was destroyed by the flood- the veterans groups that over the last deserves no less than that. But his for- waters. Those are the lucky ones. 17 months worked so hard to get the titude, his determination, his persever- There are many who are determining right bill. This bill will be reported ance has led to this legislation. I whether they can salvage the house let back to us, I am told, in the exact form wished to acknowledge that and the alone what is inside. we sent it over, with the vote of 75 to support we received in this body and Small communities downriver, such 22 not long ago. the support we received from the var- as Oakville and Columbus Junction, There was another provision Senator ious organizations, veterans organiza- are completely submerged. Farms lost WARNER and I had worked on as a sepa- tions all across America. everything, including equipment, rate amendment regarding transfer- I will cite some historic memorabilia crops, livestock. The cities of Bur- ability that will be put in this bill in a on this subject. In May of 2001, I was lington and Keokuk are holding their slightly different form. the only Republican on the Armed breath to get through without devasta- But there was some mischaracteriza- Services Committee to join a number tion such as we have seen in Iowa City tion in terms of how the White House of other Democrats on the committee and Cedar Rapids. portrayed this transferability provi- in cosponsoring the bill by Max Cleland Despite all this, Iowans continue to sion. I think it goes to the heart of of Georgia. Those of us who knew Max show their resiliency and heart. I was some work Senator WARNER has done Cleland remembered that he came to on C–SPAN’s call-in program called over many years, and I think it de- the floor of the Senate, despite his seri- ‘‘Washington Journal’’ earlier this serves to be clarified in this body. ous wounds he had received and dis- week. People from all over the country The announcement by the White ability from that conflict, as the hard- called to say how proud they were of House was to the effect that this trans- est fighting Senator for veterans and the way people in the Midwest, and ferability provision would be a new military people. particularly they were referring to provision. In fact, Senator WARNER and I was proud to join him. But nothing Iowans, were pulling together and a number of Senators on our side of the happened to that bill. It lost its way. working to get through this disaster. aisle enacted this as law 6 years ago. So then, in 2002, as chairman of the Of course, Senator HARKIN and I We have heard from people on the committee, I went back and picked up could not agree more. Volunteers con- other side, from the administration, on what this legislation had laid as the

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00043 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5814 CONGRESSIONAL RECORD — SENATE June 19, 2008 foundation. In the fiscal year 2002 Na- education benefits to their spouse or chil- take a loss on the loan before it can be tional Defense Act, subtitle E, section dren. refinanced. But that is not the whole 654, is the historical precedent for That has been the law of the land, in truth. Lenders are already facing losses transferability. one form or another. That has been the on these loans, so moving a loan into So I wish to thank the members of effort of this Congress. That has been the program puts an end to the bleed- the Armed Services Committee who the effort of this Armed Services Com- ing, and the FHA assumes the risk of have worked this issue for many years. mittee, of which I am proud to be a all future losses. What that means is When it came time to have Senator member for many years, 6 or 7 total. the lenders and others who hold mort- WEBB’s bill go in, we talked about I yield the floor. gages are going to dump their worst transferability, but we recognized it The PRESIDING OFFICER. Who $300 billion of mortgages on the FHA, was already law. yields time? without requiring so much as a thank- In the course of the deliberations on Mr. DODD. I wish to give my thanks you to the taxpayers. If we are going to his bill, it seemed to me important to our colleagues. Well done. give such a large gift to the big banks The PRESIDING OFFICER. The ma- that we update the 2002 law, which we and the investment houses, we should jority leader. at least know to whom we are sending did. I put in an amendment, amend- Mr. REID. Mr. President, we have a it. ment No. 4800, on May 20, 2008, which unanimous consent request that we are brought transferability in the old stat- Some of the lenders who are blamed going to make when I get the paper. for creating this housing crisis stand to ute up to date. I ask unanimous consent that the benefit the most. For example, I read Subsequently, we have not had any Bunning motion to refer now be in in the morning Wall Street Journal official cooperation of support from the order with respect to the House mes- that one lender, Countrywide Finan- Department of Defense, but unoffi- sage regarding H.R. 3221; that there be cial, could benefit to the tune of $25 cially there was some advice that came 30 minutes for debate with respect to billion. That is a large gift from Con- to us. We incorporated that advice, and the motion; that the time be equally gress to a private company, especially that advice now reshaped my amend- divided and controlled in the usual one that has been identified by some as ment on May 20. That, hopefully, will form; that no amendments be in order the leader of the mortgage madness become the law of the land when that to the motion; that the motion be sub- and has written more than 10 percent bill comes from the House to the Sen- ject to an affirmative 60-vote thresh- ate floor. I certainly urge all col- of the total of the most risky loans. old; that it achieves that threshold, Does that make sense to anybody? leagues to join in that. that it be agreed to and the motion to But again, I say to Senator WEBB, I Does that make sense to my fellow reconsider by laid on the table; that if Senators? I don’t think so. salute him for his work on this legisla- it does not achieve that threshold, that tion, his long and hard service to the Some may question that $25 billion it be withdrawn and there be no further figure. The truth is, no one in this Sen- country. This will stand as a hallmark motions to refer in order during the ate knows what the real number is. for his initiative. I was pleased to join pendency of this House message. That is my point. The American people him along the way. I think all of us in The PRESIDING OFFICER. Without deserve to know who is going to benefit this Chamber thank him for the leader- objection, it is so ordered. from this bill before we pass it. That is ship he has given. The Senator from Kentucky. why I make this motion to refer the I yield the floor. MOTION TO REFER bill to the Banking Committee so that The PRESIDING OFFICER. The Sen- Mr. BUNNING. Mr. President, I send the committee can assess which banks ator from Connecticut. a motion to the desk. and lenders will benefit and by how Mr. DODD. Mr. President, I wish to The PRESIDING OFFICER. The much. I make this motion with the full add my voice to one of my dearest clerk will report the motion. knowledge that it is going to take 59 friends in this body, Senator JOHN The legislative clerk read as follows: fellow Senators to realize that the 631 WARNER, and to JIM WEBB, who did a The Senator from Kentucky [Mr. BUNNING] pages of this substitute have just ap- great job of this. All of us are grateful moves to refer the message from the House peared before us yesterday. I continue for the tremendous work they have on H.R. 3221 to the Committee on Banking, to press my motion. done. Needless to say, millions of vet- Housing, and Urban Affairs of the Senate with instructions to assess the potential fi- I now yield to my good friend from erans deeply appreciate their commit- nancial benefits the legislation could provide South Carolina, Senator DEMINT. ment to this. I am not surprised that to Countrywide Financial Corporation and The PRESIDING OFFICER. The Sen- these two Virginians will be leading other lenders, as well as mortgages origi- ator from South Carolina is recognized. the charge in this. I thank them. nated by Countrywide Financial Corporation Mr. DEMINT. Mr. President, I thank Mr. WARNER. Mr. President, if I can and other lenders that are held by third par- the Senator from Kentucky. I appre- add a word. When the Armed Services ties. ciate his willingness to offer this mo- Committee passed, in 2002, the legisla- The PRESIDING OFFICER. The Sen- tion and bring some of our concerns to tion initiating transferability, it was ator from Kentucky. the attention of the Senate. I would against the wishes of the Department Mr. BUNNING. Mr. President, I make like to make clear that it is not our in- of Defense. But, nevertheless, our com- this motion to refer the House message tent to question the integrity of any mittee, as it has many times, stood its on the housing bill to the Banking Member of the Senate. But I believe ground and put it into law. Committee so the Senate can have all every American has the right, given It was not utilized by the Depart- the facts about who will benefit from the situation surrounding this bill, to ment of Defense, except in one or two this legislation before we go forward. question the judgment of any Senator cases by the Department of the Army. As anyone who has looked at the 631 who votes for it at this time. The other military departments did pages of the substitute text can tell, I know Senator SHELBY, the ranking not use it. So the concept of transfer- this is a very serious piece of legisla- member, has worked for years on part ability has been around for a long time. tion. Hundreds of billions of dollars are of this bill that is very important, and It is not brand new as indicated by on the line under the various parts of that we all support, GSE reform, get- some interpretation of this press re- this bill. One part of this bill alone is ting a Federal regulator who can help lease from the White House today. a $300 billion refinancing program for keep some accountability in a system It has been around a long time, and it problem mortgages. That part of the that has gotten out of control. I know received no support from the Bush ad- bill will open the door of the FHA to if that was the only part of this bill ministration in 2002, when it went on borrowers who have defaulted on their that was being offered, he would be the lawbooks. It was not utilized by mortgages. I question the wisdom of proud to support it. But we also know the departments. So, today, they an- that program. But for the moment, I politics is the art of compromise, and nounced, from the White House, it is want to focus on who will benefit rath- we had to put a package together, I as- rather interesting, the sentence reads: er than the losses the taxpayers will sume, that was needed in order to get The President is pleased that Congress an- face. the real reform through. swered his call to ensure that military fami- The supporters of this bill say bor- I think the package that came to- lies soon will be able to transfer their unused rowers will benefit and lenders must gether is clearly problematic. A cloud

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00044 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5815 surrounds this bill. We have seen it in The Senator from Alabama. of this program. The current mortgage the media all over the country, ques- Mr. SHELBY. Mr. President, within holder, whoever it is, must agree to a tioning the amount of money we spend, the hour, the Senate rejected two loan refinancing program that brings who benefits from it, and the fact that amendments offered by the Senator the loan-to-value ratio on the new we are potentially unloading hundreds from Missouri. The first one, which FHA-insured loan to no greater than 90 of billions of dollars of bad loans on to would basically gut this program, the percent of the property’s current ap- the American taxpayers’ shoulders. vote was 77 to 11. The second Bond praised value, not what it was at one I appreciate Senator SHELBY and his amendment was also rejected, 69 to 21. time. In addition to forgiving a portion work, but I have to object to this bill. That indicates that there is a lot of bi- of the debt on the existing loan, the The purpose of referring it back to the partisan support for this bill on which current mortgage holder will have to committee is not to stop the bill in- we have worked for years in the Bank- pay 3 percent of the original insured definitely but to get a careful review of ing Committee. The current Presiding loan amount to FHA. The existing who benefits from this bill. I have re- Officer knows these issues well. He rep- mortgage holder might also cover some ceived different reports since it began. resents the State of Florida and knows portion of the origination fees for the First, I heard that Countrywide, one about housing. He knows about mort- new loan. In effect, the existing mort- of the lenders involved that has had so gages and, as an attorney at one time, gage holder would take at least a 13- many allegations against it, could po- I am sure he dealt in that area. percent writedown—it might be 50 per- tentially get $2.5 billion. Then the Wall In this bill there is no special treat- cent; we don’t know—of the existing Street Journal says it is $25 billion. As ment, I say to my good friends—and I mortgage. That probably, in a lot of we look at this, the bill is designed to have a lot of respect for Senators cases, would be better than foreclosure. essentially encourage a lot of these BUNNING and DEMINT—no special treat- What I am driving at is, we are not mortgage companies to unload their ment for any lender or homeowner. All worried about the lenders. I am not. I riskiest loans on to the taxpayer. We lenders will have to take a significant am worried about the homeowners. I are told, because they have to accept loss, more than a little haircut, if they know the Presiding Officer is. The some reduction in the value of that choose to participate. This is a vol- amount could be higher depending on the amount of the origination fee paid loan, that they are going to be discour- untary program. All homeowners will and the ability of the borrower to pay aged from doing it. In fact, we know if have to share any equity gains. This is a mortgage. Thus, the current mort- you take the riskiest loans, the Con- not a bailout, I assure my colleagues. gage holder will receive no more than gressional Budget Office has already The Presiding Officer knows I wouldn’t 87 percent of the property’s current told us that 35 percent of these loans support a bailout. value, after the 3-percent premium is will default again. In other words, we I voted against the stimulus bill that taken into account. I know this is com- basically know that 35 percent of these was here earlier in the year, as some of plicated, but this is the way mortgages loans are going to fall back on the my colleagues did. But there are some good things in this bill, and I want to work. shoulders of the American taxpayer be- Borrowers will have to agree to the talk a few minutes about them. While cause this bill includes a guarantee. equity-sharing provisions required the legislation would authorize FHA to We also know some of the voluntary under this program and determine provide up to $300 billion in loan guar- programs, such as the Hope Now Pro- whether forgoing some future profits antees under the new program over the gram facilitated by the administration, on their homes is an acceptable ar- 2009–2011 period, CBO, the Congres- are working. They have prevented over rangement. This is a voluntary pro- 1.5 million foreclosures. We need to do sional Budget Office, estimates that gram. things like that that would help avoid FHA would use only $68 billion of CBO, again, estimates that fewer foreclosures, help people stay in their that—that is a lot of money still—loan than 40 percent of the 1.1 million—at homes. But this bill has come together commitment authority through 2011 to this time—eligible loans would be refi- in such a way as to raise questions all implement the program. CBO esti- nanced under the new program. But if over the country that we need to an- mates that enacting this legislation they are, it is going to help a lot of swer before we move ahead. would increase direct spending by $729 people who are deserving. Following a Again, I thank the Senator from Ken- million over the 2009–2018 period. That reduction in the principal amount of tucky for his willingness to stand for amount includes $684 million for the es- those loans to make them affordable, this. I encourage those who even sup- timated subsidy cost of loan guaran- CBO further estimates that approxi- port the bill to accept that we need to tees and $45 million in administrative mately 400,000 loans would be guaran- say: Wait a minute; let’s look at this costs. teed under this legislation, with an av- again. Let’s look at the concerns that Taxpayers will not bear these costs. erage loan amount of $170,000. This 40- are being expressed all over the coun- Maybe that was the original proposal, percent participation reflects the num- try. Then, let’s take up the bill again but in the Banking Committee, we ber of expected foreclosures, the im- at the right time. worked out a formula to let the GSEs, pact of second liens, administrative I thank the Senator from Kentucky the affordable housing program, do this challenges, and anticipated participa- and yield the floor. for 3 years because we didn’t want the tion by mortgage holders and bor- The PRESIDING OFFICER. The Sen- taxpayers doing this. Taxpayers will rowers. ator from Kentucky. not bear these costs. During the 2009– Many borrowers who would otherwise Mr. BUNNING. Mr. President, I reit- 2011 period, a portion of the GSEs’ as- be eligible for this program will not erate the fact that since we have the sessments would be used to pay the participate because servicers will not 631-page substitute, we have had no cost of this new program. These assess- be able to contact some borrowers, as CBO scoring on this bill. It would only ments would be used to reimburse the we know. Even with the assistance of make sense to me to refer it back to Treasury for the cost of the whole pro- this program, some borrowers will not the Committee on Banking so that gram up to an estimated $960 million be able to avoid foreclosure because CBO can work their magic and come up total for those years. they have experienced a significant with the numbers so we know who is Use of the new loan program is con- event, such as job loss, illness, divorce, benefiting and who is not benefiting tingent upon the voluntary participa- or death. In other words, they would from the many pages in this bill. tion of both lenders and borrowers. As not qualify. I ask for the yeas and nays and yield a result, demand for this program to The average subsidy rate for those back the remainder of my time. refinance qualifying mortgages would guarantees would be 1 percent. This es- The PRESIDING OFFICER. Is there a depend on how many lenders and bor- timated subsidy rate assumes that the sufficient second? rowers would perceive the new program cumulative claims rate—that is, the There appears to be a sufficient sec- as their best option in the market- default—for the program would be ond. place. about 35 percent and that recoveries on The yeas and nays were ordered. It is important to note that mort- defaulted mortgages would be about 60 The PRESIDING OFFICER. Who gage lenders and borrowers will give up percent of the outstanding loan yields time in opposition? something in order to take advantage amount.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00045 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5816 CONGRESSIONAL RECORD — SENATE June 19, 2008 Mr. President, I want to say again, in Thousands of people lose their homes has new provisions, and no one has had this legislation there is no special every single day. Will the provisions of a chance to go through them. treatment for any lender or home- this bill—introduced by Senators DODD I am saying that this bill ought to be owner. This is a voluntary program. and SHELBY and supported by the sent back to the Banking Committee All lenders—all lenders—will take a Banking Committee, 19 to 2—will they and examined to make sure all those significant loss. There is no mention of save every one of them? Absolutely wonderful things the Senator from New any bank, mortgage broker, mortgage not. Will they save a good number of York has said are true. That is the rea- banker, or anybody else—Countrywide them? You bet. son for my motion to refer. or anybody—in this bill. If there were, Will they bring back devastated I yield all of my time back. I would not support it. neighborhoods that have foreclosure The PRESIDING OFFICER. Who I yield the floor. signs on all the houses? And innocent yields time? The PRESIDING OFFICER. The Sen- homeowners who happen to have a Mr. DODD. Mr. President, I yield ator from Connecticut. house next to them, who paid their time to my colleague from Rhode Is- Mr. DODD. Mr. President, I yield to mortgages off 10 years ago and are suf- land. The PRESIDING OFFICER. The Sen- the Senator from New York, Mr. SCHU- fering today because the value of their ator from Rhode Island is recognized. MER. homes is going down, will this bill help There is 1 minute 40 seconds remain- The PRESIDING OFFICER. The Sen- them? You bet it will, with the CDBG ator from New York. ing. provisions. Mr. REED. Mr. President, the CBO Mr. SCHUMER. Mr. President, I rise Will this bill enable Fannie and against this motion for several reasons. has scored the Banking portion of this Freddie—which we are going to need in bill so that not a penny of taxpayer First, on the specific issue, I do not the next few years more than ever be- think there has been a Member of this dollars will be spent. This is not a bail- cause they back or securitize or hold 80 out by taxpayers dollars. Second, the Chamber who has been more of a percent of the new mortgages in this scourge against Countrywide than the bill in no way benefits lenders. Lenders country; it is the only way to get the have to take a haircut, as Senator senior Senator from New York. I do not housing business back on its feet; and like their practices. I do not like what SHELBY pointed out very clearly. Also, this bill wisely strengthens the regula- this bill is really an amalgamation of they have done. I have criticized them tion of Fannie and Freddie and publicly repeatedly. I have even asked provisions, many of which have passed strengthens their capital requirements the Senate before, that have been dis- Bank of America to make sure Coun- but at the same time enables them to trywide employees—high-ups—are not cussed extensively in the Banking move forward at a time when we need Committee. That are the result of nu- hired when the company takes over. So them more than ever before—will this I do not like Countrywide. I think merous hearings. bill do that? You bet. This is not the case where we have many of us in this Chamber may not, Should we be holding this bill up now created something completely new, given what we know they have done. when we desperately need it, when not completely out of whole cloth. There But I do not know of a single special a single provision—not a single provi- interest provision, as my good friend might be changes, but I think it is sion—in this bill can be pointed to as quite easy for committee staffs and in- from Alabama has stated, in this bill narrow, special interest, or favoring that applies to Countrywide. It is a dividual Members to deal with these any single institution or individual? changes and if there are objections, to general proposal supported by wide The argument is conclusive. It is not numbers of people on all sides—on the make amendments. a close one. This is not one of those— This motion is to kill this bill. As lending side, on the borrower side. by the way, one other reason. We fi- Senator SCHUMER pointed out, what we Many of the groups that represent the nally have a bipartisan bill on some- are losing here is help for hundreds of poorest people in America support thing important. It does not happen thousands of homeowners—not finan- these provisions. So did my colleagues. very much these days, to the regret of cial institutions. What we are losing Of the 10 Republican members of the most of us here, whether we be Repub- here is a stronger regulatory structure Banking Committee, 8 supported this lican or Democrat. We finally have one to govern Fannie and Freddie. I have bill. because of the hard work of the senior sat on the committee for years listen- Furthermore, this bill is not one of Senator from Connecticut and the sen- ing to people say: We have to get regu- those that are concocted in the dark of ior Senator from Alabama. latory reform, GSA reform. We cannot night and put on the floor 3 hours Therefore, I urge that this motion be let these institutions—Fannie and later. The provisions in the bill have defeated and that we move on and pass Freddie—operate without strengthened been public for weeks. Not a single one this bill tonight so we can get to the oversight. That is precisely what this of my colleagues has come up and is business of fixing the housing crisis legislation does. able to point to any special interest and, furthermore, trying to make sure So this legislation is about helping provision that names any specific lend- the recession we have is as shallow as homeowners, regulating Fannie and er, that benefits them differently than possible. Freddie, and has nothing to do with all the other lenders around. Mr. President, I yield the floor. bailing out companies. If there is something we ought to do The PRESIDING OFFICER. The Sen- Countrywide is mentioned in this about Countrywide, we can hold hear- ator from Kentucky. motion to recommit. Countrywide was ings. If there is something we ought to Mr. BUNNING. Mr. President, I trading a year ago at $38.89. It closed do about the practices Countrywide would like permission to speak briefly today at $4.83. It is subject to an acqui- and other lenders used, we should re- in rebuttal for 2 minutes. sition by Bank of America. The market form them. The chairman of this com- The PRESIDING OFFICER. The Sen- has penalized Countrywide. Bank of mittee has been in the lead in trying to ator has 5 minutes 22 seconds remain- America will acquire it. By the time make those kinds of reforms. I know ing. this legislation is effective, Country- because a lot of the legislation he did Mr. BUNNING. Mr. President, I want wide very well might not exist as an we worked on together. everybody to see this bill—631 pages. entity in the country. So there is no reason to believe— This is the substitute bill out of the The PRESIDING OFFICER. All time there is not a scintilla of evidence— Banking Committee. This bill never has expired. there is a special interest provision came through the Banking Committee. Mr. DODD. Mr. President, I suggest here. We all know what is going on This is a substitute bill. No one saw the absence of a quorum. here. We ought to resist it on both this bill until 5 p.m. last night—631 The PRESIDING OFFICER. The sides of the aisle. I want to particu- pages. clerk will call the roll. larly salute my colleague from Ala- My good friend from New York has The assistant legislative clerk pro- bama for standing up and saying that. made many good points about the bill ceeded to call the roll. The second thing I want to say is that we did discuss in the Banking Mr. REID. Mr. President, I ask unan- this: This is beyond petty politics. We Committee, and you know about it. imous consent that the order for the have a nation heading into recession. But this is a brandnew substitute that quorum call be rescinded.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00046 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5817 The PRESIDING OFFICER. Without take a loss. These lenders will have to LIEBERMAN), the Senator from Illinois objection, it is so ordered. agree to accept a new loan at a reduced (Mr. OBAMA), and the Senator from Vir- Mr. REID. Mr. President, give me the principal amount to replace an existing ginia (Mr. WEBB) are necessarily ab- time situation on this half-hour mo- loan they have made to a borrower. So sent. tion? if lenders participate, they will lose Mr. MCCONNELL. The following Sen- The PRESIDING OFFICER. All time money, belying the notion that this ators are necessarily absent: the Sen- has expired. program is a bailout. ator from Tennessee (Mr. ALEXANDER), Mr. REID. Mr. President, I will use Some of our friends in the Senate the Senator from Kansas (Mr. leader time. claim this motion is not intended to BROWNBACK), the Senator from New The PRESIDING OFFICER. The yeas question the integrity of colleagues, Hampshire (Mr. GREGG), the Senator and nays have been ordered. and I hope they are right. Whether that from Arizona (Mr. KYL), the Senator Mr. REID. Thank you very much, Mr. is true or not, regrettably, the effect of from Arizona (Mr. MCCAIN), and the President. this motion is to delay the Senate in Senator from Kansas (Mr. ROBERTS). Mr. President, this is an extremely providing relief to American families, a Further, if present and voting, the important piece of legislation. There is struggling housing market, and our Senator from Tennessee (Mr. ALEX- not a place in America that has not economy. ANDER) would have voted ‘‘no.’’ felt the burden of the subprime lending As he knows, Senator BUNNING is The PRESIDING OFFICER. Are there crisis. It has spilled over into every- somebody whom I admire greatly be- any other Senators in the Chamber de- thing we do in America today. cause the fact is, I wanted to be a base- siring to vote? The result was announced—yeas 11, In Nevada, where we have had a boom ball player, not a Senator. I have great nays 70, as follows: for 20 years, that boom is not there respect and admiration for him. Every now. People were buying homes be- chance I get—and I think I get on his [Rollcall Vote No. 154 Leg.] cause we had such growth coming into nerves a lot of times because I contin- YEAS—11 the community. We have 5,000 to 10,000 ually ask him about his ball games and Allard Coburn McConnell people moving to Las Vegas even now. Bond DeMint Thune who was his favorite catcher and all Bunning Ensign Vitter But this has hurt the entire economy that kind of stuff. So the fact that I op- Burr Inhofe of my State. pose this motion doesn’t take away NAYS—70 We have already passed 75 percent of from my respect for the Senator from this legislation overwhelmingly. This Akaka Enzi Murray Kentucky, a member of the Baseball Barrasso Feingold Nelson (FL) is a good piece of legislation. Twenty- Hall of Fame. Baucus Feinstein Nelson (NE) five percent—an important part of this I disagree with Senator DEMINT quite Bayh Graham Reed legislation—has been worked on for 2 Bennett Grassley Reid often, but I know his heart is in the Biden Hagel months, at least, in great detail by two right place. He is trying to do the right Rockefeller Bingaman Hatch Sanders of the most experienced Senators we thing. I just think this motion should Brown Hutchison Schumer Cantwell Inouye have—Senators who know how to deal be overwhelmingly defeated. It would Sessions Cardin Johnson Shelby with the House because they both be good for this bill. It would be good Carper Kerry served in the House, Senators who have for the country, and I believe it would Casey Klobuchar Smith been chairmen of committees in the Chambliss Kohl Snowe be good for the Senate. Specter past and now. Mr. ISAKSON. Mr. President, is the Cochran Landrieu Coleman Lautenberg Stabenow Senators BUNNING and DEMINT have a distinguished majority leader finished? Collins Leahy Stevens right to offer this—and that is why we Mr. REID. Yes, sir. Corker Levin Sununu are here—but I think they are headed The PRESIDING OFFICER. The Sen- Craig Lincoln Tester in the wrong direction. I ask my col- ator from Georgia is recognized. Crapo Lugar Voinovich Dodd Martinez Warner leagues to understand that everything Mr. ISAKSON. Mr. President, as a Dole McCaskill Whitehouse in this bill is transparent. There is member of the Ethics Committee and Domenici Menendez Wicker nothing that is not transparent in na- in consideration for what may or may Dorgan Mikulski Wyden ture. not happen, I am going to vote Durbin Murkowski We have to also understand that, for ‘‘present’’ so there will be no prejudice ANSWERED ‘‘PRESENT’’—5 example, one of the programs this mo- in any way, one way or another, in any Boxer Isakson Salazar tion attempts, perhaps, to suggest— decision that might have to later be Cornyn Pryor and others would have to make a bet- made regarding the mortgage business NOT VOTING—14 ter determination than I—but suggest and Countrywide in particular. Alexander Gregg McCain Brownback Harkin that the HOPE for Homeowners Pro- MOTION TO REFER Obama gram created in this bill through the Byrd Kennedy Roberts The PRESIDING OFFICER. The Clinton Kyl Webb bipartisan work of Senators DODD and question is on agreeing to the motion Conrad Lieberman SHELBY is a taxpayer-paid bailout to to refer. The PRESIDING OFFICER. On this lenders. One of the people who have The yeas and nays have been ordered. vote, the yeas are 11, the nays are 70, 5 been involved in this provision of the The clerk will call the roll. announced present. Under the previous bill for a long period of time has been The assistant legislative clerk called order requiring 60 votes for the adop- the Secretary of the Treasury, who, by the roll. tion of this motion, the motion is with- the way, is a breath of fresh air for the Mrs. BOXER (when her name was drawn. administration. I have great respect for called). Present. Mr. REID. Mr. President, that is the Secretary Paulson. So there could be Mr. CORNYN (when his name was last vote for tonight. In the morning, nothing further from the truth that called). Present. we don’t have any votes lined up. We this is a taxpayer-paid bailout. Mr. ISAKSON (when his name was are going to see what, in fact, we can First, according to the Congressional called). Present. do. It appears at this time that it is Budget Office, the HOPE for Home- Mr. PRYOR (when his name was going to be difficult to have votes to- owners Program will actually result in called). Present. morrow, even though the managers a net gain for taxpayers of a quarter of Mr. SALAZAR (when his name was want to do that. a billion dollars—$250 million. called). Present. Everybody should be on notice that Second, lenders aren’t getting bailed Mr. DURBIN. I announce that the we will be in session tomorrow and on out under this program; lenders must Senator from West Virginia (Mr. this bill. I frankly don’t think there choose to participate. The program is BYRD), the Senator from New York will be any votes because there are pro- voluntary. Secretary Paulson has (Mrs. CLINTON), the Senator from North cedural hurdles we ran into this after- talked to me personally about this. He Dakota (Mr. CONRAD), the Senator from noon that will make it difficult to do likes it because it is voluntary. Iowa (Mr. HARKIN), the Senator from more amendments. Third, lenders who voluntarily par- Massachusetts (Mr. KENNEDY), the Sen- Do the managers disagree with any- ticipate in this program will have to ator from Connecticut (Mr. thing I have said?

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00047 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5818 CONGRESSIONAL RECORD — SENATE June 19, 2008 Mr. DODD. Mr. President, I thank don’t act is unfathomable. With almost could be provided to many across the the leader. Senator SHELBY and I are 8,500 foreclosure filings each day—and country but nearly half a million peo- prepared to be here even for a little additional resets coming in July—what ple in my home State of New Jersey. longer this evening, for those who I said a year ago this past March, that The bottom line is this bill takes real might want to talk on the bill, or they we were going to have a tsunami of steps to help American homeowners, can tell us what they may want to foreclosures—though some in the ad- and these steps are much needed. offer. So we will be around. ministration said that was an over- Having said that, as always, no legis- Mr. REID. Mr. President, I also re- exaggeration—well, we have not even lation is perfect. I do have some con- mind everybody that it is obvious we seen the crest of that tsunami. Unfor- cerns. I certainly believe the establish- are going to have a lot of work to do tunately, that storm is only going to ment of a strong regulator for govern- next week. We are going to have to get worse. So we have come together to ment-sponsored enterprises is long have a vote Tuesday morning. It has take a stand for homeowners; not just overdue, and there is no better time been longstanding that there will be no for those facing foreclosure, but for than now. But I have some significant votes on Monday. There will be busi- their neighbors on their streets, their concerns relative to the effective date ness conducted here on Monday, but we entire communities, and for genera- of the bill. Currently it does not pro- are going to have a vote on Tuesday be- tions of home buyers in the future. vide for an orderly transition period. fore the caucuses, and maybe more Today, Senators on both sides of the GSE regulatory reform would combine than one vote before the caucuses. aisle have come together to support the regulatory powers and staff of I suggest the absence of a quorum. legislation to help suffering home- three separate executive branch agen- The PRESIDING OFFICER. The owners and to set the housing market cies to create a new GSE supervisor clerk will call the roll. back on an even keel. with far-reaching powers over our Na- The assistant legislative clerk pro- This Chamber has come to under- tion’s housing finance system. I believe ceeded to call the roll. Mr. MENENDEZ. Mr. President, I ask stand this crisis is truly a threat to all we cannot make these changes at the unanimous consent that the order for of us, to all our communities. Whether flip of a switch. We need time to get the quorum call be rescinded. you live in the North, the South, the the transition right. The PRESIDING OFFICER. Without East, or the West, whether it is a city The House-passed GSE bill would do objection, it is so ordered. in Ohio watching crime rates go up this by establishing a uniform effective Mr. MENENDEZ. Mr. President, I after a string of foreclosures, an entire date of 6 months after enactment of have a parliamentary inquiry. Is time county in Florida experiencing an eco- this legislation. I think that is a tran- controlled by the manager of the bill at nomic drought after its residents move sition period that would ensure an or- this point? away, or a single family in New Jersey derly transition to a new GSE regu- Mr. DODD. Mr. President, there is no in danger of being forced out onto the latory regime. time agreement, so it is a matter of street, everyone stands to lose from The bill also includes a separate pro- recognition. those foreclosures. vision that would limit the ability of Mr. MENENDEZ. Mr. President, I Lenders report losing tens of thou- the GSE to create liquid markets for rise to speak on the bill in general. sands of dollars on each foreclosure, high-cost areas, as well as for other Let me first congratulate and recog- and neighbors see the value of their typical portfolio products, such as mul- nize Chairman DODD for the incredible homes dropping pretty dramatically. tifamily lending and refinancing fami- job he has done, along with the ranking When we see that 49,000 Americans lost lies out of subprime loans they cannot member of the committee, Senator their jobs a month ago, when we see afford, by creating an arbitrary bias to- SHELBY, in bringing to the floor this weak earnings reports from businesses, ward securitization in the portfolio much needed effort for so many Ameri- wild swings in the stock market, and language of the bill. cans, as well as the country in general. the collapse of a major firm on Wall As we move forward, I urge the Sen- So far, by the nature of the bipartisan Street, we can see this housing crisis is ate to think more broadly about the votes we have seen, we are moving for- truly shaking the entire economy to importance of the GSEs and the role ward in the right direction. its core. they play in times of crisis and gen- The crisis in the housing market in I am hopeful that this coming week erally in the days ahead. this country continues to get worse. finally there will be a glimmer of hope I would also like to have seen a high- One in 11 American mortgages is past for homeowners who have been left to er GSE and FHA loan limit included in due or in foreclosure. That is a dev- fight the battle alone. It is clear that the final bill. In March, when the astating number, and it is still rising— Members on both sides of the aisle Banking Committee held its first hear- rising fast, as unemployment spikes know it is time to act, and it is clear ing to address the subprime crisis, I and home prices fall. what our goal has to be: Helping fami- spoke about the need to raise the FHA American families are losing their lies keep their homes. loan limit in order to give borrowers most valuable assets, bedrocks in their This Housing and Economic Recovery more options. Right now, in New Jer- lives, pillars that support their com- Act we have before us takes some im- sey, 12 of the 21 counties are at the munities. And when those pillars fall, portant steps to that end. It strength- FHA and GSE ceiling. Under this bill communities come crashing down. All ens and modernizes the regulation of today, those 12 counties would have in all, we have experienced the worst the housing government-sponsored en- their ceiling lowered, and almost all quarter for American homeowners in terprises—Fannie Mae, Freddie Mac, the other counties in New Jersey would nearly three decades, and it only and the Federal Home Loan Banks. It see some reduction as well. By low- stands to get worse. modernizes the Federal Housing Ad- ering the number, I think we are re- In my home State of New Jersey, ministration and creates the HOPE for stricting our economic recovery and over the next 2 years we expect more Homeowners program, which will pre- our ability to provide individuals with than 57,000 homes to be lost to fore- vent over 400,000 foreclosures. better, more affordable options. closure. That means 57,000 families who The bill also contains language that I While I believe those are concerns, will have to hand over the keys to championed to improve financial edu- let me reiterate that none of these pro- their homes. Families will be forced to cation and housing counseling. I be- visions causes me to question my sup- say goodbye to the place where they lieve this is an important step forward port for this bill. Chairman DODD has are nurtured and comforted, the place for improving financial education and said numerous times that had he writ- where they live through the good and arming homeowners with the tools to ten this bill on his own, without the the bad, the place they come home to protect themselves. necessity of the negotiation the Senate every night. In the words of families Because of Senator JACK REED, this is well known for, he would have draft- who know what it feels like to lose bill includes an affordable housing fund ed it differently himself. I certainly their home, they feel like they have to create affordable housing for mil- commend him for his efforts, as I un- lost everything. lions of American families. derstand the art of the possible, and I Nationwide, the number of fore- The bill also contains a new tax de- hope we can address some of these con- closures that is going to happen if we duction for property taxes, relief that cerns as we move forward.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00048 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5819 At the end of the day, this bill will can’t all work together to end it. That Seeking to end the industrial autoc- help struggling homeowners and will is why I am proud of the effort of racy that had engulfed the State with have positive ripple effects on the rest Chairman DODD and Ranking Member the opening of the coal fields in the of our country. Having a foreclosed SHELBY, and I am proud to support this 1880s, West Virginia coal miners en- home sit abandoned in a community bill. I hope next week we will pass it, gaged in a series of conflicts now recog- doesn’t benefit anyone. It decreases move it on to the House, and get some nized as the West Virginia Mine Wars, surrounding home values and it can at- real relief not only for American fami- including the Paint Creek-Cabin Creek tract crime and vandalism. The bottom lies, and not only to preserve the con- Strike, the Battle of Matewan, and the line is that foreclosure destabilizes cept of home, but also to be able to Miners’ March on Logan. These strug- neighborhoods. The funds in this bill deal with the very core of what is the gles, writes coal-field historian David allow communities to stop that spiral economic challenge presently before Corbin, must be viewed in the same before it starts. the Nation and what will be our chal- perspective as Americans see Lex- I am also proud to have supported a lenge if we do not act in the days ington and Gettysburg, not just as iso- provision in this bill to provide funding ahead. lated incidents in the tragic spilling of for counseling in order to reach and Mr. President, I yield the floor, and I blood but ‘‘as symbolic moment[s] in a help families at risk of losing their suggest the absence of a quorum. larger, broader and continuing histor- homes. Many Americans are sitting The PRESIDING OFFICER. The ical struggle . . . the struggle for free- around their kitchen tables looking clerk will call the roll. dom and liberty.’’ through their mortgage bills, their fi- The assistant legislative clerk pro- In his book, ‘‘The West Virginia Mine nances, and their bank notices, and ceeded to call the roll. Wars: An Anthology’’, Corbin compared they simply don’t know where to turn. Mr. DODD. Mr. President, I ask unan- the West Virginia miners’ struggle for These counselors could offer them real imous consent the order for the unionization to the civil rights move- solutions and options to help them quorum call be rescinded. ment of the 1960s. ‘‘Both movements,’’ avoid receiving the foreclosure notice. The PRESIDING OFFICER (Mr. he writes, ‘‘are stories of oppressed, ex- The bill puts forward $150 million to SANDERS). Without objection, it is so ploited people fighting for dignity, self- make sure counseling reaches those ordered. respect, human rights and freedom.’’ who need it the most. f This analogy to the civil rights Some argue that stepping in to help movement is a good one because West our communities recover from the MORNING BUSINESS Virginia has also played an important housing crisis would somehow be a Mr. DODD. Mr. President, I ask unan- role in the quest of African Americans blow to the concept of personal respon- imous consent that the Senate proceed for liberty and equality. For one thing, sibility, because some homeowners to a period of morning business, with West Virginia has been the site of some made bad choices in signing up for a Senators permitted to speak for up to of the important events in African- subprime mortgage. Don’t get me 10 minutes each. American history. Prior to the Civil wrong, personal responsibility is im- The PRESIDING OFFICER. Without War, John Brown’s Raid on Harpers portant, and that is why we need great- objection, it is so ordered. Ferry prefigured West Virginia’s break- er support for homeowner education, f away from the slaveholding Confed- and for foreclosure counseling and fi- eracy into full statehood. Harpers WEST VIRGINIA DAY, 2008 nancial literacy, so that anyone think- Ferry later served as the setting for ing about buying a home will be able to Mr. BYRD. Mr. President, certain the second meeting of the Niagara understand the terms of their mort- dates on the calendar carry special Movement, a meeting that led to the gage, even the fine print, and have the meaning. These are great and glorious formation of the NAACP. tools to protect themselves. But per- days that are given to devoted rev- Individual West Virginians have sonal responsibility isn’t just impor- erence and are a cause for recognition played important roles in this historic tant for homeowners. As I said at the and adoration. Thanksgiving, the struggle. Author and abolitionist Mar- start of this crisis, every participant in Fourth of July, and New Year’s Eve are tin Delany, with Frederick Douglass, the life of a loan needs to step up and a few dates that come immediately to edited the North Star newspaper, the take real responsibility and action. mind. Another one that comes to mind leading abolitionist newspaper in the Blaming the homeowner alone is not is June 20—the day we celebrate as country. J.R.Clifford, along with his right, it is not fair, and it is economi- West Virginia Day. colleague, W.E.B. DuBois, was one of cally disastrous. Every broker, lender, Friday will be June 20. All over the the founders of the Niagara Movement realtor, appraiser, regulator, credit world, it will be June 20, which means in 1905. Rev. Leon Sullivan was a civil rating agency, and investing firm had a that all over the world, it will be West rights activist who wrote the Sullivan role in this storm, and I will not let the Virginia Day. And what a great and Principles, a code of conduct for U.S. blame fall to only the homeowners. glorious day it will be. businesses operating in South Africa As we in this Congress are debating It was on June 20, 1863, that West under apartheid. how best to help homeowners, how best Virginia became the 35th State of the Carter G. Woodson, Booker T. Wash- to end the housing crisis, and how best Union. The State proudly adopted as ington, and John Warren Davis were all to get our economy back on track, we its motto the phrase, ‘‘Montani semper famous African-American educators have to see the bigger picture. There is liberi,’’ which means, ‘‘Mountaineers who occupy important places in Amer- a lot at stake, no matter who we are, are always free.’’ ican history and culture and played im- whether we have a subprime mortgage This was a most appropriate motto portant roles in furthering the develop- or not. When the house next to ours for a State born in the middle of the ment of our free society. gets boarded up, it affects the value of greatest struggle for freedom and lib- Furthermore, West Virginians have our property, too, and how safe we feel erty in American history—the Civil played an important role in the Amer- walking around our neighborhood at War. And West Virginians have always ican movement toward religious free- night. When a neighbor of ours has to strived to live up to our State motto. dom. The most noticeable example of declare bankruptcy and is forever sad- West Virginia workers were in the this effort came in the historic 1960 dled with debt they cannot pay, they forefront of the historic labor struggles Democratic Party Presidential pri- shop less at stores and purchase fewer in the late 19th and early 20th cen- mary—the political contest that paved of the services our community offers, turies that sought an end to the exploi- the way for America’s first Catholic and that hurts our community’s bot- tation and oppression of American President. In 1960, West Virginia was tom line. workers that had accompanied the In- an overwhelmingly Protestant State, Martin Luther King, Jr., reminded us dustrial Revolution. In 1877, the Na- and religion became the ‘‘burning that ‘‘we are all tied into a single gar- tion’s first general strike began among issue’’ of the contest because, if Sen- ment of destiny,’’ that ‘‘we cannot the railroad workers and citizens of ator John F. Kennedy, who was Catho- walk alone.’’ This is a crisis we are all Martinsburg, WV, after the railroad ty- lic, defeated his only opponent, Sen- in together. There is no reason why we coons repeatedly lowered wages. ator Hubert Humphrey, who was a

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00049 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5820 CONGRESSIONAL RECORD — SENATE June 19, 2008 Protestant, it would show that religion I hope that President Bush and oth- nities farther south in the coming was no longer a defeating handicap in a ers are equally committed to rebuild- days. Presidential contest. Kennedy won ing the Midwest, not just through dis- When the floodwaters recede, we will that primary by a substantial margin, aster relief but by strengthening lev- need to roll up our sleeves and begin and, as a result, as Kennedy stated the ees, rebuilding houses, providing loans the long, hard process of rebuilding. day after winning the primary, the re- to small businesses, or helping farmers Senator OBAMA and I will be working ligious issue was ‘‘buried . . . in the who have lost an entire season of crops. with the Illinois congressional delega- soil of West Virginia.’’ As we speak, the floodwaters are still tion and our Senate colleagues to en- Mr. President, I am proud of my rising—in Iowa in Missouri, and in my sure that the people in the Midwest State. I love its beauty, its culture, State of Illinois—breaking levees, leav- will not face this formidable task of re- and its history. Foremost, I have al- ing people without running water, and building alone. ways appreciated its kind, good, and leaving whole towns submerged. My thoughts and prayers are with ev- generous people and the way they have Yesterday, two more levees broke on eryone on the ground. retained what I call the ‘‘old values’’— the Illinois-Iowa border near Quincy, f faith in God, love of country, family, flooding thousands of acres of farmland TRIBUTE TO CLARENCE L. MILLER honesty, decency, and integrity. And a and forcing people to leave their leading value of the people of West Vir- homes. That brings the total number of Mr. MCCONNELL. Mr. President, I ginia, as I have tried to show, has been broken levees in Illinois to nine as a re- rise today to honor a well-respected our motto, ‘‘Mountaineers are always sult of the flooding. Kentuckian, Mr. Clarence L. Miller. free.’’ In Galesburg, residents are on boil Throughout his life, Mr. Miller has Happy birthday West Virginia. order and are in danger of losing their contributed immensely to our Com- May God always bless you, and keep access to running water. monwealth and Nation. you free. In Lawrenceville, where the flood- Recently the Sentinel-News in Shel- byville, Kentucky, published a story f waters from earlier storms are finally receding, over 10,000 people have been about Mr. Miller. The story summa- FLOODING IN ILLINOIS without running water for more than a rizes the extraordinary life he led, Mr. DURBIN. Mr. President, Presi- week. We will not forget our neighbors while paying tribute to him as a re- dent Bush is in Iowa today to see first- on the east side of the State, where it markable Kentuckian. Throughout his hand some of the devastation that all began earlier this month. career as a public servant, Mr. Miller more than a week of severe flooding Over 500 homes have been affected in has worked hard to give back to the has inflicted on that State. Machesney Park, a small community State and Nation that he loves so dear- It is the President’s first visit to the in Winnebago County without a public ly. Midwest since the floods began more works department and without trucks I ask my colleagues to join me in than a week ago. or any other equipment to help with honoring Clarence L. Miller as a true Midwesterners appreciate the Presi- the clean-up efforts. patriot and Kentuckian whose legacy dent’s visit to our region. These floods My heart goes out to everyone af- will forever be remembered, and I fur- are happening in our States, but they fected by the floods, especially those ther ask unanimous consent that the are a national disaster. who have watched their homes and full article be included in the RECORD. The President’s visit to Iowa today livelihoods disappear under muddy wa- There being no objection, the mate- gives us some reassurance that the ters. rial was ordered to be printed in the Federal Government will help our re- But as the waters keep rising, the RECORD, as follows: gion through this crisis. people of Illinois continue to humble [From the Sentinel-News, April 30, 2008] As the President visits Iowa today, I CLARENCE L. MILLER: FARMER, hope he looks across the river to my and inspire me. Illinoisans continue to work day and ADMINISTRATOR, DIPLOMAT, RACONTEUR State of Illinois. night to prepare for the worst. In cities (By BG Ron Van Stockum) Floods don’t stop at State lines. I called on Clarence Miller recently to add The floodwaters are receding now in and towns all along the Mississippi, people have spent the last week filling my appreciation to that of his many other Iowa; they are rising in Illinois. Levees friends for his generosity in donating his are breaking and farmland and towns sandbags and fortifying levees. This is farm to Shelbyville. In our informal con- along our side of the Mississippi are difficult work, often backbreaking, but versation it became apparent that his story being swallowed up by the river now. as hard as it’s been on the body, it needed to be recorded and reported. The damage in Iowa has been stag- hasn’t broken people’s spirits. Accordingly, a few days later, my son gering and heartbreaking , and we pray Day after day they have shown up— Reggie invited him to Allen Dale where he for our neighbors’ safety and well- residents, volunteers, emergency work- taped as oral history an extended audio/vis- ual interview. My column today will con- being. ers, members of the Illinois National Guard. It is not easy to stand your stitute an abbreviated story of Clarence Mil- But the entire Midwest is reeling ler’s life, providing information additional to from weeks of flooding and tornadoes— ground in the face of a force as power- that contained in Gayle Deaton’s excellent from Minnesota to Kansas and every- ful as the Mississippi, but these folks article in an issue of last year’s Sentinel- where in between; Wisconsin, Iowa, have done just that. Their resolve and News. Missouri, and, of course, Illinois. determination show an amazing spirit Clarence Miller was born in Louisville in We know from the great flood that at work. It is something Senator 1912. His father, Pleasant Green Miller, al- devastated the Midwest in 1993 and, OBAMA and I had a chance to see for ways called ‘‘P. Green’’ (1871–1968), born in more recently, from Hurricane ourselves when we were in Quincy and Estill County, was employed as a federal whisky inspector or ‘‘whiskey gauger.’’ His Katrina, that the losses from this Grafton last week. It is a sight to be- responsibilities, within the Department of chain of weather-related disasters will hold. the Treasury, included the recording of whis- be more than our States and citizens I also commend FEMA and the Army key production and assuring that the dis- alone can shoulder. Corps of Engineers. They are doing tillers paid the proper federal tax on alcohol. We also know that, in times of crisis, what needs to be done to help these With the onset of World War I, distillation Americans have always come together communities prepare for the worst. A was dramatically curtailed in order to pre- to help those in need. We are counting number of State of Illinois depart- serve grain. His job disestablished, he took on that American tradition of coopera- ments and agencies are working 24/7 to his family to Florida where he set out a cit- rus grove. tion now. ensure communities have the resources My colleagues and I whose States to fight the flood waters. This is truly EIGHTEENTH AMENDMENT: PROHIBITION (1920–33) have borne the brunt of these floods ap- a team effort. Before the production of whisky could be preciate greatly the support and offers Right now we are in a race against fully restored, National Prohibition was es- tablished by means of the Eighteenth of cooperation we have received from time and nature. The worst is still to Amendment, with Kentucky being the third Senator LANDRIEU and others whose come. state to ratify it. Ratification was certified States have also suffered major natural The river is still swelling and is pro- on 29 January 1919 and on 28 October the Vol- disasters. jected to crest for many of the commu- stead Act was passed, defining ‘‘intoxicating

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00050 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5821 beverage’’ as one containing greater than he became Associate Administrator of the each other and help them pay for the one-half of one percent alcohol. This act national CSS. In 1959 and 1960, the final two cost of additional extraditions. went into effect on 29 January 1920, along years of the Eisenhower administration, he This legislation is supported by Illi- with the Eighteenth Amendment. President served as Assistant Secretary of Agriculture nois Attorney General Lisa Madigan, Hoover called Prohibition a ‘‘noble experi- for Marketing and Foreign Agriculture, Cook County State’s Attorney Richard ment,’’ but others used stronger words. Clar- working directly under Secretary Ezra Taft ence described the effect of Prohibition on Benson, Agricultural Attache´ in Madrid. A. Devine, Cook County Sheriff Thom- the distilleries as ‘‘confiscatory.’’ They held From 1961 to 1969 he was back in Shelby- as Dart, City of Chicago Police Super- millions of gallons of whiskey in storage, ville, operating his farm and occupying a po- intendent Jody P. Weis, Peoria State’s but, except for a controlled trickle for ‘‘me- sition in public relations with the Kentucky Attorney Kevin Lyons, the Illinois As- dicinal’’ purposes, were not allowed to sell it. Farm Bureau. In 1970 he was appointed under sociation of Chiefs of Police, and the Il- Even moderate imbibers needed to adjust. the Nixon administration as Agricultural linois Sheriffs’ Association. While I do not recall alcohol being served by Attache´ in Spain, serving until 1976, initially Nationwide, there are an estimated my parents in Seattle, Washington, I do re- under his good friend, Ambassador Robert C. 2.8 million to 3.2 million outstanding member my mother sending me out on the Hill. It was during this period that several of lawn to pick dandelions for wine. The proc- his friends from Shelbyville were his guests warrants for the arrest of persons ess she used is unknown, but it is possible at the Embassy in Madrid. I remember my charged with felony crimes, and the today to learn all that is necessary by fellow tennis player, the late Guy Lea, one of number is growing. Fugitives often ‘‘googling’’ ‘‘dandelion wine.’’ his guests, remarking about Clarence’s hos- commit additional crimes while they P. Green Miller and many other federal pitality when he and his wife visited Spain. are at-large. However, searching for agents, were called back to the Treasury De- WORLD TRAVELER and apprehending them is costly. In- partment to enforce the new law. In view of Despite undergoing double artery by-pass creasing the resources available for its unpopularity, affecting so many special surgery and replacement of the aortic valve conducting fugitive investigations interests and tastes, this was a formidable in 1998, the following year he took a trip to task. In 1923, he became Division Chief for would increase the number of fugitives Singapore. There are few countries he has Enforcement of Prohibition for the states of who are arrested, brought to trial for not visited. He has traveled around the Kentucky and Tennessee, with offices in previous crimes, and prevented from world, rounded both Africa and South Amer- Louisville and Memphis. Later, he spent a committing new crimes. ica by ship, and visited Greenland and Ant- good deal of time on the east coast, in New The Marshals Service plays an inte- arctica. Nevertheless, he has never lost York, Baltimore and Boston, trying to elimi- touch with his home town and his lifetime of gral role in the apprehension of fugi- nate, or at least minimize, the illegal smug- public service to his community and to his tives and has a long history of pro- gling by high-speed cutters, called ‘‘rum run- country has culminated in the most altru- viding assistance and expertise to ners,’’ which picked up whisky from vessels istic act of all: the gift to his home town of other law enforcement agencies in sup- lying beyond the territorial limits. He also Red Orchard Farm. was involved in the attempt to break up the port of fugitive investigations. Pursu- Note: It is encouraging to report that Clar- illegal activities of the most powerful and ant to the Presidential Threat Protec- ence Miller continues to be hale and hearty, infamous of all bootleggers, Al Capone, who tion Act of 2000, the Marshals Service strong of voice, forceful in expression and vi- operated out of Chicago. created its Regional Fugitive Task tally concerned about public affairs. He REPEAL OF PROHIBITION—TWENTY-FIRST looks back upon his long life with a feeling Force program. The task forces com- AMENDMENT (1933) of accomplishment: ‘‘It has been my good bine the efforts and resources of Fed- On 23 March 1933, President Franklin D. fortune to have been in the right place at the eral, State, and local law enforcement Roosevelt, after signing into law an amend- right time with the right credentials.’’ agencies as they work to locate and ap- ment to the Volstead Act, allowing the man- f prehend fugitives. Between 2002 and ufacture and sale of ‘‘3.2 beer’’ and light 2006, the Marshals Service established CAPTURE ARREST AND TRANS- wines, is reported to have remarked ‘‘Now task forces in six regions of the coun- let’s all have a beer.’’ The Eighteenth PORT CHARGED FUGITIVES ACT try. Since their inception, these six Amendment, itself, was repealed later with OF 2008 ratification of the Twenty-first amendment task forces have arrested approxi- on 5 December 1933. P. Green Miller returned Mr. DURBIN. Mr. President, I rise mately 90,000 Federal and State felony to farming. today to discuss legislation I recently fugitives, contributing to a significant YOUNG CLARENCE L. MILLER introduced called the Capture Arrest increase in the number of fugitive ar- Meanwhile, on 1 January 1925, when Clar- and Transport Charged—CATCH—Fugi- rests in those regions. The Marshals ence was 12 years old, the Miller family pur- tives Act of 2008. I am pleased that Service has developed a plan to estab- chased Red Orchard Farm and established Senator DOLE has joined me as a co- lish 12 additional task forces—enough residence there, although Clarence’s father sponsor of this bill. to serve the rest of the country—but was still spending most of his time elsewhere The CATCH Fugitives Act addresses since 2006 it has not received the re- discharging his enforcement responsibilities. three important problems that under- sources needed to implement this plan. The farm, originally 119 acres, now con- cut State and local efforts to catch fu- The CATCH Fugitives act increases stitutes 130 acres. Clarence helped his moth- gitives. First, State and local law en- er with the farm, entering Shelbyville High the authorization for the Regional Fu- School where he graduated with the class of forcement authorities have insufficient gitive Task Force program from $10 1932. A schoolmate of his was Ben McMakin, resources for identifying and arresting million under current law to $50 mil- the subject of one of last year’s columns, fugitives. Second, even when fugitives lion for each of fiscal years 2009–2012 who died as a Marine prisoner of war in 1945. are arrested, they may not be pros- and $25 million for each of fiscal years ‘‘Ben was president of our class one year, and ecuted because of the high cost of ex- 2013–2015, in order to fully fund the ex- I the next.’’ He then spent two years at Uni- tradition. Third, when fugitives flee isting task forces and add new ones versity of Kentucky with the intent of across State lines, they frequently es- that serve the remaining parts of the studying law, but instead returned to Shel- cape detection because law enforce- byville. country. ment officers lack complete informa- In addition to strengthening fugitive- MOVING UP IN AGRICULTURE tion about warrants issued in other hunting capacity in general, the act Here, he was employed with the Agri- States. Fewer than half of all out- also tackles the problem of capturing culture Adjustment Administration (AAA), standing felony warrants have been en- out-of-State fugitives and extraditing later called the Commodity Stabilization Service (CSS). He started literally from the tered into the nationwide database them for prosecution. Since 1967, the ground up, measuring tobacco plantings to that alerts other law enforcement offi- Federal Bureau of Investigation has op- assure compliance with the regulations. In cials that a person is wanted. erated the National Crime Information 1947 he married his high school sweetheart, The act addresses these three prob- Center, NCIC, which administers a Katherine Barrickman, always called lems by providing assistance to State database containing criminal history ‘‘Toddy.’’ The daughter of a prominent Shel- and local law enforcement agencies information from the Federal Govern- byville lawyer and County Attorney, she was through the U.S. Marshals Service to ment and the States, including out- an accomplished competitive golfer, being help them identify fugitives and trans- standing arrest warrants. The NCIC local women’s champion for 13 straight years. In 1953 Clarence became chairman of port them from one State to another database is designed to allow a law en- the state CSS and a year later went to Wash- for prosecution. It also creates grant forcement officer who stops a person in ington DC as national Director of the To- programs that will encourage States to one State to be made aware of any out- bacco Division of the same agency. In 1956, share information about warrants with standing warrants for that person

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00051 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5822 CONGRESSIONAL RECORD — SENATE June 19, 2008 issued in another State. The database Let me give you another example interfere with law enforcement efforts contains approximately 1.3 million fel- from the St. Louis Post-Dispatch se- to bring fugitives to justice. It in- ony and misdemeanor warrants, but it ries. In the fall of 1999, Virginia law en- creases fugitive-hunting capacity na- is missing more than half of the Na- forcement authorities issued two fel- tionwide. It provides resources and in- tion’s 2.8 million to 3.2 million felony ony warrants for the arrest of Felipe centives for States to make informa- warrants, including hundreds of thou- Fowlkes. Fowlkes had a record of tion about outstanding warrants avail- sands of warrants for the arrest of the criminal convictions that spanned two able to other States so that law en- people accused of committing violent decades and included convictions for forcement agencies in one State can crimes. crimes ranging from burglary to sexual recognize when a fugitive from another A State’s failure to enter all of its misconduct. In April 2000, Fowlkes State is in their grasp. And, it provides warrants into the NCIC database en- learned of the warrants and turned assistance that will reduce the cost of ables fugitives to escape arrest even himself in to the local police in Sche- extraditing such fugitives from one when they are stopped by an officer in nectady, NY. The Virginia authorities, State to another for prosecution. I urge another State. Many such fugitives go however, refused to retrieve him for my colleagues to support this impor- on to commit additional crimes. In ad- prosecution. Three weeks later, tant bipartisan legislation. dition, they pose a danger to the offi- Fowlkes attempted to rob a woman and cers who encounter them but have no was arrested. He was convicted and f knowledge of their pending charges and sentenced to prison time. In July 2003, record of fleeing law enforcement au- 6 weeks after his release, Fowlkes at- SYMQUEST thorities. tempted to sexually assault a woman. Let me give an example from an in- Hours later on the same day, he lured Mr. LEAHY. Mr. President, the Bur- vestigative series of articles that ap- a 15-year-old girl behind a school and lington Free Press recently printed an peared in the St. Louis Post-Dispatch raped her. The 2000 attempted robbery article about SymQuest Group Inc. in earlier this year. On March 21, 2001, and 2003 rape might have been pre- South Burlington. It was especially in- Eloy Williams was charged with the vented if the Virginia authorities had teresting to me, as I know the co- rape of a college student in Florida. extradited Fowlkes in 2000. founders, Larry Sudbay and Pat Rob- Florida authorities issued a warrant The CATCH Fugitives Act has three ins, very well. for his arrest but did not enter it into provisions that address the twin chal- In the article, Mr. Sudbay was said to the NCIC database. On July 16, 2001, lenges of identifying fugitives who make their success and the honors they Williams skipped a hearing in Florida have crossed State lines and extra- have won seem very easy. One would on a cocaine trafficking charge. Flor- diting them for prosecution. First, it ida authorities issued a warrant for his have to know Larry Sudbay to realize includes a major grant program that that what he makes seem easy can be arrest for failure to appear on that offers States and local governments charge but again did not enter the war- a Herculean task for most people. significant funding for extraditions, The other cofounder is Pat Robins of rant into the NCIC database. On April but builds in strong incentives to im- Burlington. I was privileged to not 11, 2002, Williams was stopped by a po- prove the entry of warrants into the only be a classmate of Pat’s at St. Mi- lice officer in Decatur, GA. The officer NCIC database. It authorizes $50 mil- chael’s College, but to have the further found no record of the Florida warrants lion in grants to States for each of fis- privilege of maintaining our friendship in the NCIC system and Williams was cal years 2009–2015 to help cover the for the past 50 years. released the next day. On July 25, 2002, costs of extraditing additional numbers Williams was arrested in Decatur for of fugitives from one State to another, Vermont is a small State with much speeding. Again, the police officer but it conditions eligibility for grants to make us proud. People like Larry found no record of his Florida warrants on improved performance in entering Subday and Pat Robins make our State so Williams was released the next day. warrant records into NCIC. Any State even better. On October 9, 2002, Williams raped and or unit of local government is eligible I ask unanimous consent that the ar- robbed a 14-year-old girl while she was for an extradition grant during the ticle from the Free Press be printed in walking home from school. In May and first 3 years after enactment. However, the RECORD. June of 2003, Williams raped four a State or unit of local government There being no objection, the mate- women in the Decatur and Lithonia, would lose its eligibility if after 3 years rial was ordered to be printed in the GA, areas. On June 12, 2003, officers fi- it is still transmitting less than 50 per- RECORD, as follows: nally tracked Williams down and ar- cent of its warrants to NCIC; after 5 rested him. He confessed to all six of [From the Burlington Free Press, June 2, years it is transmitting less than 70 2008] these rapes. The five rapes committed percent of its warrants to NCIC; or between October 2002 and June 2003 PEOPLE, PAPER AND PIXELS PROPEL after 7 years it is transmitting less SYMQUEST could have been prevented if the out- than 90 percent of its warrants to (By Joel Banner Baird) standing Florida warrants had been en- NCIC. tered into the NCIC system. The offi- Second, to help States and local gov- SOUTH BURLINGTON.—Behind thick glass, cers who stopped Williams in April and ernments improve their performance in like a motionless aquarium in the company’s July of 2002 would have learned of the submitting warrants to NCIC, the lobby, the SymQuest Group Inc. server room warrants and made him available to CATCH Fugitives Act authorizes $10 might hold the visitor’s interest for a minute or two, tops. Florida for extradition. If extradited, million for each of fiscal years 2009–2013 he would not have been in a position to Even CEO and co-founder Larry Sudbay for grants to State and local govern- can be easily distracted from the racks of commit those five rapes. ments to improve their capacity, infra- Improving the completeness of the hardware and colorful cabling—especially structure and processes for transmit- when one of his 152 employees walks by. warrant records in the NCIC database ting warrants to NCIC. In this hardware-and-software company, would enable law enforcement officers Third, in order to help States and everyone seems to be on a first-name basis; to identify and arrest a larger number local governments further reduce the people are the moving parts at SymQuest. of fugitives and would improve the cost of extraditing fugitives between On May 21, Gov. Jim Douglas honored the 12- safety of our officers. However, the States, the Act directs the Marshals year-old company as the recipient of this challenge does not end there. Even if a Service to expand its Justice Prisoner year’s winner of Vermont’s top business ac- fugitive is arrested, extraditing that and Alien Transportation Service, colade: the Deane C. Davis Award, citing fugitive back to the State that issued JPATS—currently used for trans- SymQuest for its outstanding commitments to work environment and community—and the warrant can be costly. Law en- porting detainees and inmates—and forcement agencies often lack the re- for its vitality. make it available for fugitive trans- Last week, Sudbay, 51, made it sound sim- sources to pay for the cost of trans- ports requested by States and local ple. porting fugitives. They frequently governments that participate in a Re- He described the privately held, office sys- choose to forego prosecution, allowing gional Fugitive Task Force. The act tems management firm’s steady, double- fugitives to evade justice and commit authorizes $2 million for each of fiscal digit growth as ‘‘fun momentum.’’ new crimes. Reducing the cost of extra- years 2009–2015 for this purpose. In a nutshell, he said, his goal in manage- dition would increase the number of In summary, the CATCH Fugitives ment ‘‘is to allow our employees to thrive, prosecutions. Act addresses serious problems that and to create raving fans.’’

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00052 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5823 The company’s 3,000 customers must be member Tim Russert—a remarkable We were all the same in his eyes—no right: Sudbay predicts this fiscal year’s sales individual, a journalist, a former staff matter how many years we had been in to more than quadruple the $9 million member in this body, a dedicated hus- public life, no matter how accom- SymQuest earned in 1997. There’s still room for expansion at the band, and above all else, a father. And plished we were. He simply wanted to company’s 40,000–square-feet headquarters on I would like to add my voice to the get at the truth—and if you didn’t give Community Drive. But a cautionary history chorus of those who have sung his it to him, Tim made sure that the looms, as well: SymQuest is housed in the praises these sad past several days. whole world would know. footprint of now-extinct computer giant Dig- Tim Russert was a force in American Certainly, there are many guests ital Equipment Corp. politics—and a force for integrity in over the years who ‘‘bombed’’ on ‘‘Meet Sudbay and SymQuest co-founder Pat Rob- our media. For 17 years, millions of the Press.’’ One of the things I loved ins sidestepped the fragile dot-com bubble of Americans have looked to Tim on Sun- the past decade by integrating computer sys- about Tim was that while he might let tems development with the lower-tech stand- day mornings for his insight into our you embarrass yourself on national tel- bys of office work flow: copiers and printers. political process. From his days serv- evision, he would never embarrass you. ‘‘The Jetsons meet the Flintstones here,’’ ing as an aide to our former colleague Part of that was his fundamental de- Sudbay quipped. from New York, Senator Moynihan, cency—but so, too, was it the special Approximately 20 percent of the company’s through every minute of his remark- revenues come from toner shipments and appreciation Tim had for his guests, able tenure at NBC, Tim never lost his having been on the other side himself, service contracts, he added. enthusiasm for vibrant but respectful SymQuest continually researches ways to walking these very halls on behalf of better bridge the gap between pixels and political discourse. It was in so many our departed colleague from New York. paper. ways his lifeblood. Tim understood as well as anyone what Like few others, Tim understood the Sudbay returns again and again to a funda- those of us in public life did for a liv- mental question: how does information— role politics played not just in the ing—and I wish more in his profession often an intangible product—move through a media—but in our daily lives. He saw were afforded his perspective. business? And how is it thwarted? politics for what it was—not a fight His engineers, sales reps and technicians among partisans, but rather the me- Of course, Tim appreciated nothing came up with a winning strategy: maximize more than family. Every time I saw customers’ uptime with secure, off-site mon- dium in which the diversity of views and values in our society are arbitrated Tim, he always wanted to know how itoring, matched with prompt, people-to-peo- your family was doing. Indeed, for all ple service. to a national conclusion. Rob Bromee, who directs SymQuest’s sup- In that sense, under Tim’s steward- of his famously aggressive journalistic port center, said the company’s proprietary ship, ‘‘Meet the Press’’ became the pre- acumen, it is impossible to not men- ‘‘Sentinel’’ devices allow his team to diag- mier forum for showcasing the fun- tion the other side of that gregarious nose and even predict failures on clients’ damentally decent side of politics that personality—the warmth and gen- computers and networks. is almost entirely lost today—where erosity. When I was on ‘‘Meet the ‘‘This is not just patch management,’’ he people of very different views, back- Press’’ last year, Tim took the time said. ‘‘We’re listening. We like to go back up- after our interview to jump around and stream from the problem, to see what’s caus- grounds and perspectives, could come ing it.’’ together to debate their differences re- dance with my two young daughters. Remote monitoring now extends to print- spectfully and constructively. The twinkle in his eye was unmistak- ers and copiers, as well. SymQuest can read Indeed, one saw that in Tim’s ap- able when you talked family with Tim. meters and gauge maintenance needs; cus- proach to matters of faith—where his Lastly, I want to say a word about tomers receive toner shipments days before own views and values were very formi- one of Tim’s greatest legacies, and that they’re needed. is fatherhood—his contributions to In theory, a company in Bangkok could dable indeed. A year ago, Senator choose to delegate its IT management to BROWNBACK and I shared the stage with what being a father means in America. SymQuest. For Sudbay, a 1979 graduate of Tim at Boston College, where we each His call to our responsibilities as fa- University of Vermont, the vision remains in talked about our shared Catholic faith thers and the difference an active, in- New England: Regional is beautiful. and the role the Church played in our volved, caring father can make in a ‘‘Keeping everyone within two hours is our lives, shaping our politics and our soci- child’s life will be one of Tim’s most goal,’’ he said. ‘‘Local is too small; regional ety. With all the controversy around significant legacies. provides us with the economy of scale for faith in politics over the last several purchasing similar to big Web and Wall My colleagues know I have spoken Street companies. years, some wondered about the fire- many times on this floor about what ‘‘This isn’t India,’’ he continued. ‘‘We’re works that could have ensued. my father meant to me—how more based in the same time zone as our cus- But what Tim, a practicing Catholic, than anything or anyone else, it was tomers. If they need a physical presence, wanted was not two Senators deliv- my father’s example that compelled me we’re able to put our capes on.’’ ering sermons, if you will—about how into public service. Sudbay said a tighter network of offices to ‘‘use’’ faith as a political weapon. also allows employees to develop ties to Tim and I shared that bond, I think. Rather, as someone who once said that Indeed, we both wrote books about our their communities. Plaques on the walls at the nuns in Catholic school, ‘‘taught the South Burlington headquarters laud vol- fathers—I having published long lost unteers and charity fundraisers; firefighters, me to read and write, but also how to letters from my father as a prosecutor Little League coaches and Penguin Plungers. tell right from wrong,’’ Tim wanted us in the Nuremberg Trials, Tim writing The Deane C. Davis Award also cited to talk about our formative experi- two books, including one about the les- SymQuest’s direct outreach of cyber-exper- ences as Catholics. He wanted to en- sons he learned from his father, ‘‘Big tise. gage us in a robust conversation about Russ’’ in Buffalo. In February, following a competitive grant all that we shared—even in areas we process, SymQuest awarded a ‘‘$25,000 Office vigorously disagreed with one another. At a time when some debate the con- Makeover’’ to a drug treatment and youth To be sure, in that sense, Tim was dition of the American family, Tim’s center near its Plattsburgh office. Another meditations on fatherhood—on the wis- makeover is under way to upgrade net- very much doing God’s work each and every Sunday morning. dom and character passed down by his working at a mental illness center in Keene, father—struck a deep, resonant chord. N.H. I was a guest on ‘‘Meet the Press’’ Neighborliness, Sudbay said, is essential to many, many times over Tim’s years It was one of the saddest ironies of good business. hosting the program. He was without all that his next broadcast would have ‘‘Simply put, we’re looking for mutually question the most tenacious questioner been on Father’s Day. But perhaps it profitable, long-term relationships with cus- I have ever known. Never once did I was meant to be that way—remem- tomers,’’ he said. ‘‘The old adage where good bering Tim on a day in which we were guys finish last? Well, it’s bogus. Good feel like Tim let me off easy. Never things happen to good people.’’ once did I feel he was being unfair or all celebrating our fathers. f trying to score points. Every time I Jackie and I send our deepest sym- was on, most recently just a few weeks pathies to Maureen, Luke, Big Russ, REMEMBERING TIM RUSSERT ago, he pressed me, pushed me, poked and the rest of the Russert family. Our Mr. DODD. Mr. President, it is with and prodded me as he did thousands of thoughts and prayers are with them— great sadness that I rise today to re- guests. Tim will be dearly missed.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00053 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5824 CONGRESSIONAL RECORD — SENATE June 19, 2008 IDAHOANS SPEAK OUT ON HIGH wards a gas tank full to operate my car and the same income criterion that is required ENERGY PRICES I do not even hardly go anywhere! I used to for the standard LIHEAP program. What this pay this much all month, now I pay it once tells us is that families have been able to Mr. CRAPO. Mr. President, earlier a week. My wages are not going up. I have an make due until now, but because of high fuel this week, I asked Idahoans to share energy-efficient mini-van. costs and higher grocery prices, they are now with me how high energy prices are af- It has mostly affected my family, however, not able to meet all of their obligations. We fecting their lives, and they responded because my 5 children, 7 years and younger, are also seeing more requests for food boxes by the hundreds. The stories, now num- can no longer feel free to visit their dying than in previous years. bering over 1,000, are heartbreaking grandmother and grandfather, just 3.5 hours I hope this is helpful for you. and touching. To respect their efforts, away. It used to cost just $20 in gas for a RUSS, Idaho Falls. visit there and back, not a big deal. Now it I am submitting every e-mail sent to costs $60. Instead of doing this a couple I sell heavy equipment and these fuel me through energy—prices@crapo. times a month for $30–40, I can now only do prices are doing more than pinching family senate.gov to the RECORD. This is not it once every 1.5–2 months for $60. Grandma budgets, although they are doing that too. an issue that will be easily resolved, and Grandpa do not come visit us anymore Almost every day I have a contractor tell of but it is one that deserves immediate but maybe once every 6 months. They used a job that got put on hold or cancelled due to and serious attention, and Idahoans de- to come once a month. Our fun outings into the high price of moving dirt. Most of the in- serve to be heard. Their stories not the country for enjoyment and to get away crease in excavating prices is directly re- lated to diesel. These fuel prices are putting only detail their struggles to meet ev- from the hectic busy pace of our lives. They simply do not happen anymore. I take the people out of work. eryday expenses, but also have sugges- stroller down the bike path. Boring and de- What can we do to get Congress off their tions and recommendations as to what pressing. butts and start drilling oil wells and refining Congress can do now to tackle this It is depressing to see such price gouging it? problem and find solutions that last be- and why? Is it because of the war? Cannot Why are we wasting natural gas making yond today. I ask unanimous consent the government regulate price gougers in electricity, instead of promoting nuclear and hydro? to have printed in the RECORD today’s such a time of war and economic depression with the housing slump and all? It would be Why are we not pushing diesel? It is clean- letters. er and far more efficient than gasoline. There being no objection, the mate- nice to see someone step up to bat. Other families who drive to work every day feel it BRENT, Rigby. rial was ordered to be printed in the the most. It makes for all our friends to have RECORD, as follows: sad moods. MR. CRAPO, thanks for your email update Let us see if our representatives truly rep- Thanks for your time. on the failure of congress to act concerning resent us or not. Or are they giving in to the MARIANNE. higher energy prices. You are all pandering environmental lobbyists? I believe the ques- to the environmental wackos. I’m ticked tion of drilling here at home for oil and nat- My family and I are low middle income that the Chinese can drill for oil just off our ural gas should be put on a nationwide ballot and, with the price of fuel/groceries, we have coast lines but we cannot. We need congress and then Congress should push forward with had to choose our fuel to get to work or food. to allow oil companies to drill on federal the outcome of that result. Are we really liv- Both my husband and I have been eating less land, especially up in Alaska. We have plenty ing in a democracy or not? I believe the ma- to ensure that our children are well fed, of our own oil, let’s use it and quit depending jority of Americans approve of drilling here among other cuts in our life. I am extremely so much on foreign sources! Yes conservation for oil and natural gas. If our representatives worried that if it continues we just won’t be is good, but we really need increased domes- truly represented us, that would have been able to pay our bills too. We need to be uti- tic supply to drive down costs. And we need happening by now. lizing our own resources within our country! lower costs NOW before our economy is run STEVEN. Thanks, Jennifer into the ground. I can’t even afford to fly out This makes good sense to consider for all of Twin Falls right now because airlines are DEAR SENATOR CRAPO: The only way to our ‘‘Political Leaders’’ [to watch this video] raising their prices so high, so I have to stop the rise in oil prices is to start drilling ... let’s get something positive going. drive to Boise to catch lower cost flights; I in our own country. The special interest en- http://www.youtube.com/ fly a lot for business purposes. But then I vironmental groups run Congress to the det- watch?v=ZPch2k63uj4 have to pay much more in gas to drive from riment of the American people and the econ- DAN, Post Falls. Twin to Boise, so I really do not save all that omy. much . . . but every little bit helps. My vote We can’t drill off the coast of Florida, but I watched part of a program on PBS where this Fall, and from here on out will be for the Chinese can; and everybody knows how communities are pooling together and buy- whoever will work the hardest on this issue careful the Chinese are when it comes to the ing wind mills to power their towns, and the of increasing domestic supply of oil. environment. We have huge supplies of nat- people in the communities profited from the RON, KIMBERLY. ural gas and oil right here in our own coun- projects through little or no cost for power. try but a few so-called environmental whack Why can’t we get something started like MR. CRAPO, I am responding to your re- jobs are being allowed to destroy our econ- that in Idaho? If for no other reason, it quest for some more individual perspective omy and our country. would give the wind a reason to stop blow- on the brunt of the energy crisis. With the Sincerely, ing. cost of gasoline up 40% it directly impacts GEORGE. We could invest the city/county/tax money my pocketbook, not just in driving costs, but in wind farm projects—use money to make everything that I do. The cost of electricity, I do not have an energy story. I simply and save money for the communities. If we the cost of food, shipping, everything has want to thank Mr. Crapo and ALL of the could keep the shyster politicians away from gone up. As a small business owner, and em- folks that help him in the everyday part of the cash. ployer here in the state of Idaho, it signifi- the legislature business. Another energy idea would be to allow the cantly affects me, and my employees. We Sincerely, carburetors for automobiles to be revised for need to take every step we can to make our PEGGY, Meridian. better gas mileage. That would be a very country energy independent, relying on peo- simple solution. If an 80,000 pound semi and ple that hate us, and our way of life, for en- DEAR MR. CRAPO, I am a resident of Coeur trailer can get 8 miles per gallon, a car ergy is suicide. If it takes opening up areas d’Alene, Idaho; taxpayer and voter. Can you should be able to get at least 100. That would for exploration of oil, and natural gas I’m for please explain to me why the Republican substantially reduce the amount of fuel con- it! Give oil companies incentives and tax Congress did nothing to confront this issue 4 sumed. breaks for finding, and refining more prod- years ago when they controlled all three KATHY, Twin Falls. uct. Stop the stranglehold these out of touch branches of the government? You knew then clowns have on our nation! Make us once that there was an energy crisis and that it DEAR SENATOR CRAPO, I am the Executive more the strongest nation in the world! We would get worse. yet no proactive legislation Director of the Eastern Idaho Community do not need to be the strongest by sub- was passed to confront the issue or to in- Action Partnership in Idaho Falls which jugating other nations, just by being the crease production. . . . why? serves 9 eastern Idaho counties. One of our only nation that can stand on its own! Unsigned. programs is the LIHEAP program which pro- Thank you for your time, vides one time help with energy bills. The DANIEL, Boise. Hello Senator and thanks for your efforts. program concluded at the end of March. You asked that I share my story on how the There is a component of LIHEAP called DEAR SENATOR CRAPO: You asked how the high gas prices have affected my life. I am LIHEAP Crisis that provides limited help energy crisis is affecting me personally. My sure my story is not nearly as poor as some outside of the normal Energy Assistance truck is a 1994 Chevy with 140 thousand miles may be. I am thankful to have a stay-at- schedule. Since the end of March, we have re- on it. I was going to buy a new one to replace home eBay job. However, even I wonder how ceived requests for help from families we it. Since the increase in costs for gas and others do it when once a week I pay $50 to- have never seen before. Families must meet diesel, I can not afford it now so I will just

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00054 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5825 continue to repair what I have and drive it real depression. Our economy and dollar are agreement. Indeed, by bringing the less. So this discussion affects many busi- heading down the tubes and nothing is done. ARS into the institutional fold and nesses in my area. Of course it is the fault of years of bad gov- consolidating a legitimate peace, the (1) I will not be spending money at the ernment for ruining our economy and it is international community is more like- dealers to buy it. only going to get worse. I have no faith in (2) I will not be spending interest at my the majority of the idiots running this coun- ly to see al Shabaab marginalized and credit union for the loan. try. It is like no one has any basic common rendered ineffective. This is not to say (3) I will not be spending money at the in- sense or fiscal management skills. It makes the road forward will be smooth, but surance company for the added insurance. me sick! taking steps to encourage existing divi- (4) I will not be spending money at the TOM. sions between the ARS and al Shabaab parts houses for improved add-ons to the ve- may create a path for ARS moderates hicle (tinted windows, bed liner, etc). Our young married couples are really feel- (5) I am not going to be taking a driving to press for dismantling al Shabaab. ing the pinch of gas costs. Since travel is Mr. President, Mr. Abdallah should vacation this year, cost too much. necessary in southeastern Idaho, we are left (6) I do not think I’ll be going on an air- be commended for this achievement, with no choice but to pay. We have felt the plane either cost for tickets is increasing. need to help our married kids pay for gas, but more than back-patting is in order. (7) I wanted to go over to Europe, Italy this which cuts into other budget items, such as His success as a mediator—and indeed, year because I have never been there, but food, medicines etc. Our students really feel the leverage and credibility of the now the cost Euro cost is 1.5 times greater so the pinch since tuition costs have also risen. United States and those who share our that will not happen. Think of the places in the U.S. you have to We strongly support lessening our depend- vision of a stable, peaceful Somalia— spend money to get there. Congress does not ence as a nation, by updating refineries, and rests upon the steps taken in the next realize that this is getting worse every day, drilling. Thank you. days and weeks to facilitate the imple- a recession is already here and if it continues CURTIS, Driggs. mentation of this agreement. Imme- it will be a depression. The oil is not going f diate, adequate, and coordinated action to go down. The World can only make 85 mil- SOMALIA is needed to ensure that this most re- lion barrels per day. The World wants 86.5 cent agreement does not meet the fate million barrels per day. The world is now out Mr. FEINGOLD. Mr. President, al- of its predecessors, with potentially bidding the U.S. for oil supplies. The U.S. though Somalia’s 9 million people have has to pay the price to by oil for what the more devastating consequences. suffered from violence, natural disas- Last month, this body passed a reso- world market sets it at. (Econ 101—supply vs. ters, and lawlessness for decades, the demand). The U.S. makes 5 million barrels lution I introduced, which called on So- per day—the U.S. uses 21 million barrels per humanitarian and human rights crisis malia’s rival factions to recommit to day so we need 16 million barrels per day for they face seems to keep getting worse. an inclusive political dialogue and imports. These are facts FACTS——does con- On Monday, the United Nation’s hu- pledged international support for sus- gress get these FACTS!!!! We either get more manitarian coordinator for the Horn of tainable peace and security in Somalia of our own oil or we continue to pay and pay Africa announced that due to fighting and across the Horn of Africa. Mr. even more. Please tell them over and over between rival militias, successive again, THIS PROBLEM IS NOT GOING TO Abdallah and others have done their droughts, sharply rising food prices, part. Now it is time for the inter- GO AWAY IT WILL ONLY GET WORSE! and a collapse of the Somali currency, Please tell your democratic friends to do national community to make good on something and not put there head in the more than 3.5 million Somalis will our word. need emergency food relief in the next sand. f Thanks for asking. 3 months. JOHN, Boise. On June 9, the United Nations’ Spe- NOMINATION OF HARVEY cial Representative for Somalia, Mr. JOHNSON I am a young mother in Meridian, Idaho. I Ahmedou Ould Abdallah, announced am one of those few who can honestly say Mr. WYDEN. Mr. President, on April that I LOVE my in-laws. We love to be to- the first piece of good news from Soma- 18, I announced my intention to object gether as a family. Each year we have a fam- lia in a long time. With support from to any unanimous-consent request for ily reunion and do crazy things like make the U.S.’s own Special Envoy for Soma- the Senate to take up the nomination movies, or invent games. These things create lia, Ambassador John Yates—as well as of Harvey E. Johnson who has been memories for generations. This year our representatives from the UK, Djibouti, nominated by President Bush to serve family reunion was going to be in late July Saudi Arabia, the African Union, the as Deputy Administrator of the Fed- at the Oregon Coast. Sadly, we recently can- League of Arab States, the Organiza- eral Emergency Management Agency. I celled our family reunion due to GAS tion of Islamic Conference, and the Eu- PRICES. It would have cost over $700 per did so because, prior to his confirma- family just to drive to the Oregon Coast. ropean Union—Mr. Abdallah succeeded tion as Secretary of the Department of Since our family consists of 5 collective in brokering an agreement between So- Homeland Security, Michael Chertoff young families—it was just too high of an ex- malia’s internationally recognized told me in my office that if confirmed pense for many of us. $700 in gas is just ab- Transitional Federal Government, he would move expeditiously to imple- surd! We are so disappointed! We have been T.F.G., and a faction of the opposition ment the National Emergency Tech- looking forward to this vacation for over a Alliance for the Re-Liberation of So- nology Guard—NET Guard—program. year! There was no way back in August of malia, A.R.S. Unfortunately, Secretary Chertoff had 2007 that we could have predicted the rise in We cannot be naı¨ve, however, because gas prices. What was feasible then is impos- failed to honor that pledge. sible now. All because of the rise in gas there have been numerous such agree- However, I am pleased to say that prices. Our family believes in being self suffi- ments in the past in which ceasefires, this morning the Department of Home- cient and I believe that America should start political cooperation, and efforts to land Security has finally issued a solic- being the independent nation we claim to be. promote peace, justice, reconstruction, itation for applications for a NET Let’s use our own oil to create our own gas and reconciliation were promised. The Guard pilot program, effectively begin- to put into our own cars so that we can take outcome could be different this time, if ning the implementation process. It is care of our own families. Thank you for the the international community commits years late, but at last the Department opportunity to share. the political and material resources is moving forward with this critical CAMI, Meridian. necessary to see it through. External program. SENATOR CRAPO: Rising energy costs are actors were a critical driver behind the In light of this action, I will no driving up the costs of virtually everything peace talks in Djibouti and the result- longer object to any unanimous-con- and rapidly deteriorating the American ing agreement, which ends with a call sent request for the Senate to take up standard of living. We are having to cut for international support that was Mr. Johnson’s nomination. I will, how- costs wherever possible to compensate be- echoed in the signing statements of the ever, continue to closely monitor cause our wages are not going up equally two rival political leaders. At the same DHS’s actions on NET Guard. with energy costs. I am so very frustrated time, we must recognize that extremist I ask unanimous consent that a copy with the US Congress. They are inept! They argue instead of taking action. Whenever a groups like al Shabaab have not ac- of the Department of Homeland Secu- good bill comes up they tag it with riders cepted this peace deal and intend to rity’s press release announcing the full of wasteful spending. I never thought I’d continue fighting. They should not be pilot program be printed in the see a day when the USA was so close to a allowed to derail the recently signed RECORD.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00055 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5826 CONGRESSIONAL RECORD — SENATE June 19, 2008 There being no objection, the mate- sults for the past decade in NAEP as- son—Knoxville Catholic High School, Knox- rial was ordered to be printed in the sessments, and it concerns me greatly. ville, TN; Hannah Armendarez—Knoxville RECORD, as follows: As an advocate for putting American Catholic High School, Knoxville, TN; Xrista Christopoulos—St. John Neumann School, FEMA ANNOUNCES SOLICITATION TO PILOT history and civics back into its rightful place in our school curriculum, I chose Knoxville, TN; Alexander Grimm—St. John CITIZEN CORPS NATIONAL EMERGENCY TECH- Neuman School, Knoxville, TN; Claire North- NOLOGY GUARD (NET GUARD) PROGRAM to do my maiden speech on the edu- ern—St. John Neuman School, Knoxville, WASHINGTON.—The Department of Home- cation of our children and the prin- TN; C.C. Hermes—St. John Neuman School, land Security’s Federal Emergency Manage- ciples that unite us as Americans. Knoxville, TN; Sarah Gallagher—Lebanon ment Agency (FEMA) announced today Along with several other distinguished High School, Lebanon, TN; Jennifer $320,000 is available in Fiscal Year (FY) 2008 cosponsors, I introduced the American Melroy—Lenoir City High School, Lenoir to pilot, test, and develop tools for a poten- History and Civics Act in 2003 to create City, TN; Rachel Collins—Fort Loudoun Mid- tial new Citizen Corps (CC) National Emer- Presidential and Congressional Acad- dle School, Loudon, TN; Sarah Aldy—St. gency Technology Guard (NET GUARD) Pro- Agnes Academy-St. Dominic School, Mem- gram. NET Guard teams will be comprised of emies for Teachers of American His- tory and Civics—and was pleased when phis, TN; Ali Delgado—St. Agnes Academy- volunteers with information technology (IT) St. Dominic School, Memphis, TN; Alex and communications expertise to assist that legislation was signed into law. Arcamuzi—White Station High School, Mem- States and localities in responding to and re- I have had some experience with such phis, TN; Sahaj Singh—White Station High covering from incidents that cause signifi- academies when I was Governor of Ten- School, Memphis, TN; Bhavna Kansal—White cant damage or destruction to IT and com- nessee. In 1984, we began creating Gov- Station High School, Memphis, TN. munications infrastructure. Teams will be a ernor’s Schools for students and teach- Melissa Swauncy—White Station High local asset, managed at the local level, and ers. Eventually there were eight Gov- School, Memphis, TN; Breanna Morrow— deployed in response to a request from local ernor’s Schools helping thousands of Mosheim Elementary, Mosheim, TN; Brit- or State authorities. tany Loveall—Mosheim Elementary, This competitive pilot program will award Tennessee teachers improve their skills and inspiring outstanding stu- Mosheim, TN; Melissa Kinser—Mosheim Ele- funds to four jurisdictions. To be eligible to mentary, Mosheim, TN; Melody Zurawski— apply, local government applicants must be dents to learn more about core cur- Martin Luther King Jr. Magnet-Pearl High located in one of the 2008 DHS Urban Area riculum subjects. When the school year School, Nashville, TN; Quidra Cothran—Mar- Security Initiatives jurisdictions and must began, students and teachers brought tin Luther King Jr. Magnet-Pearl High have a Citizen Corps Council and programs with them a new enthusiasm for learn- School, Nashville, TN; Kayla Garrett—Mar- supported by emergency management. Addi- ing and teaching that directly im- tin Luther King Jr. Magnet-Pearl High tional eligibility criteria are included in the pacted their peers. Governor’s Schools School, Nashville, TN; Amber Jackson—Mar- solicitation announcement. Beginning June were one of the most effective and pop- tin Luther King Jr. Magnet-Pearl High 18, 2008, eligible government entities may ular educational initiatives in our School, Nashville, TN; London Colbert—Mar- apply through the Grants.gov portal, acces- tin Luther King Jr. Magnet-Pearl High sible on the Internet at http:// state, and I am pleased that we have School, Nashville, TN; Sonali Mahendran www.grants.gov. Applications can be re- been able to use that as a model for the Meigs Magnet Middle School, Nashville, TN; ceived no later than 11:59 PM EST July 2, Nation. Vivian Hughbanks—Stone House School, 2008. I applaud the organizers National Signal Mountain, TN; Grace Hughbanks— Citizen Corps is FEMA’s grassroots com- History Day for recognizing the impor- Stone House School, Signal Mountain, TN; prehensive strategy to actively involve the tance of educating today’s youth of the and Caitlyn Sudkamp—Walden Home School, full community in preparing and building re- many great feats that were accom- Signal Mountain, TN. silience through participation with emer- gency management in planning, prevention, plished, the struggles that were over- f mitigation, response and recovery. come, and the events that took place to make this country what it is today. 143RD CELEBRATION OF f I also congratulate all of the students, JUNETEENTH NATIONAL HISTORY DAY teachers, and parents who participate Mr. CARDIN. Mr. President, today Mr. ALEXANDER. Mr. President, in it—and in particular wanted to con- marks the 143rd anniversary of this week high school students from all gratulate the following Tennessee stu- Juneteenth, a day on which our Nation across the Nation have come together dents participating in this event: celebrates the complete abolition of to celebrate National History Day at Emilee Frazier—Chuckey Doak Middle slavery in the United States. the University of Maryland. I would School, Afton, TN; Katie Adams—Chuckey On June 19 of each year, we mark a like to commend these students, their Doak Middle School, Afton, TN; Gary turning point in American history. On parents, and their teachers for dem- Moats—Polk County High School, Benton, January 1, 1863, President Lincoln TN; Nick Ramsey—Polk County High issued the Emancipation Proclama- onstrating such interest to the study of School, Benton, TN; Matthew Vandevander— history. History education is the foun- Polk County High School, Benton, TN; An- tion, freeing slaves in the Confederate dation of a quality education, and en- thony Joslin—Polk County High School, states. However, it was not until June suring that we have passionate and Benton, TN; Jon Rivers—Tyner Academy, 19, 1865, a full 21⁄2 years later, that dedicated students of history is an im- Chattanooga, TN; Manish Jethva—Tyner Union General Gordon Granger and portant accomplishment of the com- Academy, Chattanooga, TN; Jacquelyn 2,000 Federal troops arrived in Gal- petitions and events at the University Benford—Tyner Academy, Chattanooga, TN; veston, TX, to take possession of the of Maryland this week. Markcus Kitchens—Tyner Academy, Chat- State and enforce the emancipation de- tanooga, TN; Walker Thompson—St. creed by President Lincoln. Tragically, The National History Day program George’s Middle School, Collierville, TN; delivers yearlong programs dedicated Ryan Grover—St. George’s Middle School, slaves in Texas were not freed until to improving the teaching and learning Collierville, TN; Mason McGough—St. that date. Juneteenth celebrations of history across our country. Over 1.5 George’s Middle School, Collierville, TN; An- began in Texas the following year and million students, teachers and parents, drew McBride—St. George’s Middle School, have continued ever since. participate in the instructional and re- Collierville, TN; Nikki Martinez—St. Bene- Now, in communities across the search projects each year. Since 1994, dict at Auburndale, Cordova, TN; Anna country, Juneteenth is a day for Amer- millions of Americans from all across Cabe—St. Benedict at Auburndale, Cordova, icans to reflect upon a tragic period TN; Mary Barczak—St. Benedict at that divided our Nation and prevented the country have improved their Auburndale, Cordova, TN; Andrew Grayson— knowledge of history through partici- Fred Page Middle School, Franklin, TN; realization of the Declaration of pation in this creative program. Adam Anderson—Fred Page Middle School, Independence’s introductory words, We know that there is a need for bet- Franklin, TN; and Olivia Smith—Fred Page ‘‘(W)e hold these truths to be self-evi- ter teaching and learning of history. Middle School, Knoxville, TN. dent, that all men are created equal The 2006 National Assessment of Edu- Dylan Rasnick—Fred Page Middle School, ... ’’ cational Progress, NAEP, U.S. History Knoxville, TN; Katherine Ballew—Fred Page For Marylanders, Juneteenth is a report card shows that 82 percent of 4th Middle School, Knoxville, TN; Willis Walk- time to contemplate our own State’s er—Fred Page Middle School, Knoxville, TN; graders, 83 percent of 8th graders, and Erin Stapleton—Fred Page Middle School, history. Slave labor helped spur Mary- 77 percent of high school seniors scored Knoxville, TN; William Coe—Greenway land’s growth from the State’s concep- below proficient in historical knowl- School, Knoxville, TN; Sophie Yates—Green- tion in 1664 until 1864 when slavery was edge. These results are similar to re- way School, Knoxville, TN; Shannon Glea- abolished with the ratification of a new

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00056 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5827 State constitution. Two hundred years commitment to education and commu- standing what this elementary school of subjugation and oppression, of bond- nity outreach expands to the home represents to its community, the age and tyranny, serve as a reminder with June’s famous cooking. June school’s motto is fitting: Ku lokahi ka to all of us now of the importance of warms the homes and lives of others ‘ohana ‘o Wahiawa! Stand in unison the freedom and equality. with her legendary apple strudel which family of Wahiawa!∑ Although Maryland was a slave she has shared through cooking les- f State, it did not secede from the Union. sons. She continues to inspire with her IN HONOR OF ALFREDO NU´ N˜ EZ Marylanders’ contributions to the dedication to continual learning and Union cause and the abolitionist move- improvement. ∑ Mr. KERRY. Mr. President, I would ment did much to secure the abolition June Salander inspires with her en- like to take a moment to celebrate the of slavery. Harriet Tubman, who was ergy and enthusiasm within the reli- life and work of a dedicated educator. born Araminta Ross in Dorchester gious community as well. The Rutland This month, Alfredo Nu´ n˜ ez will retire County, freed countless slaves from Jewish Center has remained an inte- as principal of the Agassiz Elementary bondage and was the first woman to gral part of her social and cultural life. School of Jamaica Plain, MA, and as he lead an armed assault in the Civil War. June’s daughter, Menasha, accurately prepares to do so I am proud to join Frederick Douglass, who was born describes the center as June’s living with his colleagues, friends, and family Frederick Augustus Bailey in Talbot room, kitchen, dining room, and back- in celebrating more than 30 years of County, escaped slavery and went on to yard. Deeply rooted community in- service to Boston Public Schools. become one of the foremost leaders of volvement remains a core value, and to Born in Caracas, Venezuela, Nu´ n˜ ez the abolitionist movement. These he- further uphold and solidify the Jewish immigrated to the United States in roic Marylanders dedicated their lives tradition, June was Bat Mitzvahed at 1963. He attended high school in Jersey to the emancipation of all slaves and the extraordinary age of 89. It is be- City, NJ, and subsequently moved to the empowerment of African Ameri- lieved that June is the oldest Rutland New Brunswick, NJ, where he grad- cans. resident to complete the significant uated from Rutgers University. Earlier this year, we commemorated ceremony. Her commitment to observ- Following graduation, he moved to the 40th anniversary of the death of ing Judaism and keeping tradition Boston where he became a U.S. citizen Martin Luther King, Jr. His legacy re- alive through education is a landmark and obtained his master’s degree from mains with us as we continue to pursue of encouragement and pride for the Boston University in bilingual edu- equality and justice wherever dispari- Jewish community. I congratulate cation. Nu´ n˜ ez then became a fifth ties exist, whether in the economic, June Salander as she reaches yet an- grade teacher at the Agassiz, where he educational, housing, or health care other remarkable milestone, her 100th has worked ever since. One of the larg- arenas. It is our duty to eradicate dis- birthday. The message she has instilled est elementary schools in Boston, with crimination in all its insidious forms. in others through a lifetime of active over 800 students and 100-plus faculty Our concerted efforts will be necessary citizenship is commendable. I am con- and staff members, the Agassiz is a di- to wipe out racial intolerance, and the fident that June’s spiritually fulfilling verse and dynamic school with a large strength of the Nation depends on the and publicly active life will continue to bilingual student population. Nu´ n˜ ez success of these efforts. inspire others for years to come. relished the opportunity to not only Today, on this 143rd anniversary of On a personal note, my wife Marcelle teach but also to learn from the thou- the first Juneteenth, another historic and I have cherished her friendship for sands of students, parents, and teach- event will take place. The first Afri- a third of a century, as we did that of ers he has worked with over the years. can-American woman to represent her wonderful husband.∑ During his tenure as principal, the Maryland in the U.S. Congress, DONNA f Agassiz has garnered numerous awards EDWARDS, will be sworn in this after- and accolades for its drive to achieve CELEBRATING WAHIAWA ELEMEN- noon. It is my honor, on this historic excellence in education. Nu´ n˜ ez has en- TARY SCHOOL’S CENTENNIAL day, to call upon my colleagues to join couraged partnerships with institutes me in celebrating Juneteenth and ∑ Mr. AKAKA. Mr. President, I take of higher education such as the Univer- those who made this day possible. this opportunity to congratulate the sity of Massachusetts and Harvard Uni- Wahiawa community as it marks the f versity, as well as art and cultural in- centennial of Wahiawa Elementary stitutions like the Boston Ballet, to ADDITIONAL STATEMENTS School. Located in central Oahu, try to expand his students’ horizons. Wahiawa is home to one of Hawaii’s He has also worked to grow parent par- first pineapple plantations. As the in- ticipation within the school to foster a TRIBUTE TO JUNE SALANDER dustry grew, so did Wahiawa and the more community oriented approach to ∑ Mr. LEAHY. Mr. President, I wish to needs of its residents. learning. pay tribute to June Salander of Rut- Wahiawa Elementary opened in 1908, I am proud to pay tribute to the serv- land, VT. On June 28, 2008, June will on Lehua Street with one teacher, Mrs. ice of Alfredo Nu´ n˜ ez to the Agassiz and celebrate her 100th birthday. H.C. Brown, and 56 students. In 1924, to the children of Boston. I wish June Salander has led a remarkable Wahiawa Elementary expanded to six Alfredo the very best as he looks back life. Like many Jewish immigrants, classrooms, only to be closed during on so many achievements and con- she came to the United States via Ellis World War II. In 1950, Wahiawa Ele- tributions to the community and be- Island in 1920 after a journey from Ros, mentary reopened with a new building gins this new chapter in life.∑ Poland, making the trip with her and a new location on Glenn Street. f mother, brother, and sister. Family Today, Wahiawa Elementary has an and a supportive Jewish community enrollment of approximately 500 and HONORING J.R. SIMPLOT were always positioned as cornerstones includes a center for medically fragile ∑ Mr. CRAIG. Mr. President, in 1923, a of June’s upbringing. In 1941 she mar- students, a teacher training center for 14-year-old boy dropped out of school in ried her husband Lew Salander and students with autism, and a preschool. Declo, ID, and began working as a po- moved to Rutland, VT, where she has Wahiawa Elementary students have a tato sorter. He eventually became a po- remained an active community mem- 95 percent attendance rate. tato and hog farmer, a forester, a ber ever since. A strong believer in the For 100 years, Wahiawa Elementary miner, an entrepreneur, an industri- idea that it takes a village to raise a has been a focal point for Wahiawa, alist, an investor, a billionaire, and child, June has lent her time volun- providing a strong foundation for the today—he is a legend. teering at the Rutland Hospital and community’s children and families. John Richard Simplot was born in teaching Hebrew school classes. June There are now several other elemen- Dubuque, IA, in 1909—but his family has remained an active citizen into her tary schools in the Wahiawa area due moved to Idaho when he was young, golden years, earning her real estate li- to dramatic population growth on the and Idaho remained his home. At an cense at the age of 62 and taking up island of Oahu, but Wahiawa Elemen- early age, J.R. knew school was not for tennis at the impressive age of 73. Her tary remains a special place. In under- him, so he dropped out and began

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00057 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5828 CONGRESSIONAL RECORD — SENATE June 19, 2008 working in the fields. He saved up and oped his own. He went to the Fort Hall sisted to his wife Esther that he was was able to buy 40 acres of land and Indian Reservation looking for phos- going to go to the office. That was the several hogs. He planted potatoes and phate rock for his new fertilizer and kind of man J.R. Simplot was. Even at fed his hogs with a homemade feed rec- ended up tapping into the largest phos- the age of 99, even with billions of dol- ipe that allowed him to use his own phate mine in the West. He leased the lars, his last thought was that he need- spuds and meat from wild horses. That land and built a fertilizer plant. ed to go to work. saved him some money on feed; more- In 1945, J.R. Simplot became a cattle- I am going to miss my friend Jack, over, as luck would have it, a harsh man when he built a small feedlot for and my sincere condolences go out to winter depleted the grain stock, and the purpose of getting rid of the potato Esther and his family. But it is impor- come market time, J.R.’s fat, home-fed waste coming from his processing tant for the record to show that his hogs stood out against everyone else’s plants. Peelings and sprouts were passing has significance well beyond skinny pigs, and the young man reaped mixed with alfalfa and barley to make his immediate community in Boise. the rewards. feed for cattle, and yet another J.R. Simplot should be celebrated for He expanded his hog business, and by Simplot business flourished. the tremendous impact he had, not the time he sold it, he owned roughly A huge discovery in the 1950s pro- only on Idaho’s history but on U.S. his- 500 hogs. He took his earnings and put pelled the empire forward even further tory. That impact, and his legend, will them into horses, farm machinery, and when Simplot discovered a way to live on.∑ seed potatoes. From there, he rented freeze potatoes—and the frozen french some land and began to build what fry was born. It was the 1960s when J.R. f would later become his empire. went into business with a man by the In 1928, at the ripe old age of 19, name of Ray Kroc. Kroc was a fast food 100TH ANNIVERSARY OF RUTGERS Simplot learned of a machine that had operator who had begun a chain. That UNIVERSITY been built in eastern Idaho. It was an chain was McDonald’s, and soon the ∑ Mr. LAUTENBERG. Mr. President, electrically driven potato sorter. J.R. Simplot Company became the largest today I congratulate Rutgers Univer- saw potential and found a partner, and supplier of frozen french fries to the sity-Newark in honor of their 100th an- together they spent $254 on the new fast food giant. niversary. From its roots as the New piece of equipment, which enabled By the late 1960’s, J.R. Simplot grew Jersey Law School, Rutgers-Newark them to sort not only their own crops more potatoes, owned more cattle and has evolved into a premier urban re- but the crops of other farmers as well— land, and employed more people than search university with a tradition of for a price. anyone else in Idaho. He was the larg- outstanding scholarship and diversity. A dispute between J.R. and his part- est processor, drier, and freezer of pota- Students from across New Jersey, the ner forced them to decide who would toes in the world and owned processing United States, and from all over the keep the machine. J.R. said ‘‘I’ll flip plants, fertilizer plants, mining oper- world come to Rutgers-Newark to work you for it,’’ and wouldn’t you know it— ations, and other enterprises in 36 and study with a world-class faculty. he won the coin toss. He was off on his States, Canada, and overseas—making Its global student body has earned it own. him the largest industrialist in Idaho the designation by U.S. News and Winning the toss was luck, but the and one of the largest in the world. World Report as the most diverse na- rest of his success throughout the But he continued to get into new tional university in the United States years can only be attributed to his de- businesses. Using his potatoes, he for 11 consecutive years. votion to hard work and his incredible began producing ethanol in the 1970s, As Rutgers-Newark has grown, so has resourcefulness. For years the young and with the manure from his cattle their commitment to the local commu- Simplot built hog pens, dug potato cel- operations, he began fueling methane nity and the entire State of New Jer- lars, tilled soil, hauled sacks of pota- gas plants in the 1980s. At the same sey. The expansion of Rutgers-Newark toes, and did countless other tasks. time, he invested in a small computer has added to the growing redevelop- It was after the Great Depression, chip company that is today Micron ment of Newark. With the celebration though, when Simplot’s chance came Technology. of its first 100 years in Newark, plans to make a name for himself in the po- He left his footprint on Idaho perhaps abound for expanded development of tato business. The Bureau of Reclama- more than anyone else in history. the university and its connections and tion was created, and projects like Dubbed ‘‘Mr. Spud,’’ he provided count- commitment to the great city of New- dams and canals began along the Snake less jobs for Idahoans in so many areas. ark. River in Idaho. The projects would He seemed to have his hand in every- The faculty, students and alumni of bring more water to the valley, which thing that is Idaho, and everything he Rutgers-Newark have much to be proud would lead to more farms, more crops, touched seemed to succeed. of after a century of outstanding edu- and more opportunity to diversify But that is not the reason I admired cational achievement. Rutgers-Newark within agriculture. By 1940, J.R. had 33 the man. Even with all his success, is still dedicated to maintaining the potato warehouses and had also gotten J.R. Simplot had his failures. The dif- highest standards of research and into the business of onions and onion- ference between many people and Jack, scholarship, educational opportunity, drying. though, was his never-ending drive and urban mission, and diversity. I applaud When the United States entered determination to get up and do some- Rutgers-Newark for their ‘‘Century of World War II, there were only five com- thing again, and to do it better. It was Reaching Higher’’ and wish the univer- panies that could dehydrate vegetables, his persistence in wrangling successes sity continued growth and success for and no one could dehydrate potatoes at from failures that made J.R. the kind many years to come.∑ least not until J.R. Simplot found a of man everyone should admire. way. He began producing dry potatoes He wasn’t just a brilliant business f for U.S. troops and by 1945 was pro- man. He loved Idaho, and in fact, a few ducing an average of 33 million pounds years ago, signed his home over to the REMEMBERING JOHN W. KEYS of dried potatoes a year. That was one- State of Idaho to use as the new Gov- ∑ Mr. CRAPO. Mr. President, unfortu- third of the U.S. military’s consump- ernor’s mansion. He also loved his fel- nately, a tragic accident is the occa- tion during the war. low Idahoans. And although he never sion of my remarks today. On May 30, As his success in potatoes expanded, received a formal education, he always recently retired Commissioner of the his ability to save money by producing believed in getting one and therefore Bureau of Reclamation, John W. Keys, his own raw materials grew. In 1943, he gave millions of dollars to universities was killed, along with his passenger, didn’t have enough boxes to ship out and students in Idaho. He was also a when his plane crashed in Canyonlands his dry potatoes, so he started his own major supporter of the arts. National Park in Utah. John worked box plant. When that company needed Recently, at the young age of 99, J.R. for the Bureau of Reclamation for close more lumber, he bought a lumber com- Simplot passed away at his home in to 40 years, serving in most all regions pany. And when his supply for fertilizer Boise. He had risen that Sunday morn- including in Boise as regional director for his potatoes was cut off, he devel- ing, walked into his kitchen and in- of the Pacific Northwest region. In

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00058 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5829 2001, President George W. Bush ap- (The nominations received today are and redress process for individuals wrongly pointed him Commissioner of the Bu- printed at the end of the Senate pro- delayed or prohibited from boarding a flight, reau, where he served for 5 years until ceedings.) or denied a right, benefit, or privilege, and for other purposes; to the Committee on his retirement in April 2006. f John believed in the adapting mis- Commerce, Science, and Transportation. MESSAGE FROM THE HOUSE H.R. 4749. An act to amend the Homeland sion of the Bureau of Reclamation. He Security Act of 2002 to establish the Office joined the Bureau at the time in its At 2:07 p.m., a message from the for Bombing Prevention, to address terrorist history when the final projects it over- House of Representatives, delivered by explosive threats, and for other purposes; to sees today were being authorized. Dur- Ms. Niland, one of its reading clerks, the Committee on Homeland Security and ing his tenure, the Bureau went from announced that the House has passed Governmental Affairs. constructing water projects in the the following bills, in which it requests H.R. 5680. An Act to amend certain laws re- West to maintaining and improving fa- the concurrence of the Senate: lating to Native Americans, and for other purposes; to the Committee on Indian Af- cilities and processes. John was well- H.R. 1333. An act to direct the Comptroller fairs. known for his efforts to facilitate col- General of the United States to conduct a H.R. 5909. An act to amend the Aviation study on the use of Civil Air Patrol per- laborative management and solutions and Transportation Security Act to prohibit sonnel and resources to support homeland se- to challenges. He was a man of solu- advance notice to certain individuals, in- curity missions, and for other purposes. tions and integrity, and he cared deep- cluding security screeners, of covert testing H.R. 2631. An act to strengthen efforts in ly about people and our natural re- of security screening procedures for the pur- the Department of Homeland Security to de- pose of enhancing transportation security at sources. Idaho benefited from John’s velop nuclear forensics capabilities to permit airports, and for other purposes; to the Com- leadership as he worked with the State attribution of the source of nuclear material, mittee on Commerce, Science, and Transpor- legislature, interest groups, the Tribes and for other purposes. tation. and irrigation districts on solving some H.R. 2964. An act to amend the Lacey Act H.R. 5982. An act to direct the Secretary of Amendments of 1981 to treat nonhuman pri- of the thorny issues that have arisen Homeland Security, for purposes of transpor- mates as prohibited wildlife species under with Endangered Species Act require- tation security, to conduct a study on how that Act, to make corrections in the provi- ments in the Columbia River system airports can transition to uniform, stand- sions relating to captive wildlife offenses for species such as salmon and bull ards-based, and interoperable biometric iden- under that Act, and for other purposes. tifier systems for airport workers with trout. H.R. 3702. An act to direct the Secretary of unescorted access to secure or sterile areas In January, 2006, John spoke about Agriculture to convey certain land in the of an airport, and for other purposes; to the the mission of the Bureau: Beaverhead-Deerlodge National Forest, Mon- Committee on Commerce, Science, and Our mission has evolved from the construc- tana, to Jefferson County, Montana, for use Transportation. tion of dams to management and mainte- as a cemetery. H.R. 6276. An act to repeal section 9(k) of nance. As water management has evolved, H.R. 4179. An act to amend the Homeland the United States Housing Act of 1937; to the Reclamation has transformed into a more Security Act of 2002 to establish an appeal Committee on Banking, Housing, and Urban comprehensive water management agency. and redress process for individuals wrongly Affairs. Today, much of our focus is on improving delayed or prohibited from boarding a flight, the safety, security, and efficiency of the fa- or denied a right, benefit, or privilege, and f cilities we already have, as well as meeting for other purposes. MEASURES PLACED ON THE environmental obligations. The challenges H.R. 4749. An act to amend the Homeland we face today in maintaining and improving Security Act of 2002 to establish the Office CALENDAR the system are as formidable as those chal- for Bombing Prevention, to address terrorist The following bill was read the first lenges that we surmounted during Reclama- explosive threats, and for other purposes. and second times by unanimous con- tion’s construction heyday. One priority is H.R. 5680. An act to amend certain laws re- sent, and placed on the calendar: security . . . We feel more prepared and, lating to Native Americans, and for other H.R. 3702. An act to direct the Secretary of therefore, more secure against terrorism, purposes. than ever. H.R. 5909. An act to amend the Aviation Agriculture to convey certain land in the A lot is changing, but some things remain and Transportation Security Act to prohibit Beaverhead-Deerlodge National Forest, Mon- constant. Since I was appointed Commis- advance notice to certain individuals, in- tana, to Jefferson County, Montana, for use sioner in 2001, my main priority has been cluding security screeners, of covert testing as a cemetery. carrying out Reclamation’s core mission: de- of security screening procedures for the pur- f liver water, generate power, do the things it poses of enhancing transportation security EXECUTIVE AND OTHER takes to get that done, and plan for the fu- at airports, and for other purposes. ture. I’m interested not just in the next few H.R. 5982. An act to direct the Secretary of COMMUNICATIONS years, but in setting up the framework that Homeland Security, for purposes of transpor- The following communications were will enable Reclamation to succeed many tation security, to conduct a study on how laid before the Senate, together with years into the future. airports can transition to uniform, stand- accompanying papers, reports, and doc- John left a tremendous legacy at ards-based, and interoperable biometric iden- uments, and were referred as indicated: work and in his family. He devoted his tifier systems for airport workers with EC–6687. A communication from the Ad- time in retirement to his family and unescorted access to secure or sterile areas of an airport, and for other purposes. ministrator, Dairy Programs, Department of his volunteer efforts with Angel Flight H.R. 6276. An act to repeal section 9(k) of Agriculture, transmitting, pursuant to law, and other humanitarian efforts. He was the United States Housing Act of 1937. the report of a rule entitled ‘‘Dairy Product a remarkable man who did remarkable Mandatory Reporting’’ (Docket No. DA–06– f things for the country and region he 07) received on June 17, 2008; to the Com- cared about so deeply. My thoughts MEASURES REFERRED mittee on Agriculture, Nutrition, and For- and prayers are with his family and The following bills were read the first estry. friends at this very difficult time.∑ EC–6688. A communication from the Dep- and the second times by unanimous uty Under Secretary of Defense, transmit- f consent, and referred as indicated: ting, pursuant to law, a report relative to MESSAGES FROM THE PRESIDENT H.R. 1333. An Act to direct the Comptroller surcharges for fiscal years 2005 and 2006; to General of the United States to conduct a the Committee on Armed Services. Messages from the President of the study on the use of Civil Air Patrol per- EC–6689. A communication from the Dep- United States were communicated to sonnel and resources to support homeland se- uty Under Secretary of Defense, transmit- the Senate by Mrs. Neiman, one of his curity missions, and for other purposes; to ting, pursuant to law, a report relative to secretaries. the Committee on Homeland Security and the Department’s purchases from foreign en- tities in Fiscal Year 2007; to the Committee f Governmental Affairs. H.R. 2631. An Act to strengthen efforts in on Armed Services. EXECUTIVE MESSAGES REFERRED the Department of Homeland Security to de- EC–6690. A communication from Chief As in executive session the Presiding velop nuclear forensics capabilities to permit Counsel, Federal Emergency Management Officer laid before the Senate messages attribution of the source of nuclear material, Agency, Department of Homeland Security, and for other purposes; to the Committee on transmitting, pursuant to law, the report of from the President of the United Homeland Security and Governmental Af- a rule entitled ‘‘Final Flood Elevation Deter- States submitting sundry nominations fairs. minations’’ (73 FR 31944) received on June 18, which were referred to the appropriate H.R. 4179. An Act to amend the Homeland 2008; to the Committee on Banking, Housing, committees. Security Act of 2002 to establish an appeal and Urban Affairs.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00059 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5830 CONGRESSIONAL RECORD — SENATE June 19, 2008 EC–6691. A communication from the Direc- EC–6701. A communication from the Sec- tions and standards are based on sound re- tor, Office of Legislative Affairs, Federal De- retary of the Treasury, transmitting, pursu- search in student achievement and effective posit Insurance Corporation, transmitting, ant to law, the Office of Inspector General’s teaching; and pursuant to law, the report of a rule entitled Semiannual Report for the period of October Whereas, the reauthorization of the No ‘‘Deposit Insurance Requirements After Cer- 1, 2007, through March 31, 2008; to the Com- Child Left Behind Act is an opportunity to tain Conversions; Definition of ‘Corporate mittee on Homeland Security and Govern- refine the admirable goals of the act based Reorganization’; Optional Conversions; Addi- mental Affairs. on five years of experience in implementing tional Grounds for Disapproval of Changes in EC–6702. A communication from the Direc- the 2002 initiative. We have much to do be- Control; and Disclosure of Certain Super- tor, Office of National Drug Control Policy, fore ‘‘no child left behind’’ is more than just visory Information’’ (RIN3064–AD25) received Executive Office of the President, transmit- a goal: Now, therefore, be it on June 18, 2008; to the Committee on Bank- ting, pursuant to law, a report entitled ‘‘Fis- Resolved by the House of Representatives, ing, Housing, and Urban Affairs. cal Year 2007 Accounting of Drug Control That we memorialize the United States Con- EC–6692. A communication from the Assist- Funds’’; to the Committee on the Judiciary. gress to enact legislation to reform the No ant Director for Policy, Office of Foreign As- f Child Left Behind Act; and be it further sets Control, Department of the Treasury, Resolved, That copies of this resolution be transmitting, pursuant to law, the report of PETITIONS AND MEMORIALS transmitted to the President of the United a rule entitled ‘‘Republication of Appendix A States Senate, the Speaker of the United to 31 CFR Chapter V’’ received on June 18, The following petitions and memo- rials were laid before the Senate and States House of Representatives, and the 2008; to the Committee on Banking, Housing, members of the Michigan congressional dele- and Urban Affairs. were referred or ordered to lie on the gation. EC–6693. A communication from the Dep- table as indicated: uty Assistant Administrator for Regulatory POM–395. A collection of petitions for- POM–397. A resolution adopted by the Sen- Programs, National Marine Fisheries Serv- warded by the Benefit Security Coalition rel- ate of the State of Michigan urging Congress ice, Department of Commerce, transmitting, ative to establishing a more equitable meth- to enact the Youth Prison Reduction pursuant to law, the report of a rule entitled od of computing cost of living adjustments through Opportunities, Mentoring, Interven- ‘‘Final Rule Regulatory Amendment to Mod- for Social Security benefits; to the Com- tion, Support, and Education Act; to the ify Requirements for Individual Fishing mittee on Finance. Committee on the Judiciary. Quota Program On-line Access Security’’ POM–396. A resolution adopted by the SENATE RESOLUTION NO. 155 (RIN0648–AV71) received on June 13, 2008; to House of Representatives of the State of Whereas, among the most effective ap- the Committee on Commerce, Science, and Michigan urging Congress to enact legisla- proaches to reducing juvenile delinquency Transportation. tion to reform the No Child Left Behind Act; EC–6694. A communication from the Dep- and criminal street gang activity are those to the Committee on Health, Education, uty Assistant Administrator for Regulatory preventing children from turning to crime in Labor, and Pensions. Programs, National Marine Fisheries Serv- the first place, encouraging early childhood ice, Department of Commerce, transmitting, HOUSE RESOLUTION NO. 268 home visitation, parental love and edu- pursuant to law, the report of a rule entitled Whereas, the No Child Left Behind Act cation, quality schooling, and proven youth ‘‘Correction to the 2008 Summer Flounder, (NCLB) is an ambitious effort by the Federal and family development initiatives; and Scup, and Black Sea Bass Recreational Man- Government to ensure that all States im- Whereas, there are many alternatives to agement Measures’’ (RIN0648–AV41) received prove K–12 education opportunities. While incarcerating youth that have been proven on June 13, 2008; to the Committee on Com- standards, accountability, and benchmarks to be more effective in reducing crime and merce, Science, and Transportation. are key features of this landmark 2002 legis- violence at the national, state, local, and EC–6695. A communication from the Ad- lation, the goal of making sure all of our tribal levels. Failure to provide for such ef- ministrator, National Aeronautics and Space children receive a quality education must fective alternatives is a pervasive problem Administration, transmitting, pursuant to not be forgotten. The current reauthoriza- that leads to increased youth, and later law, its FAIR Act 2007 Commercial Activities tion process for NCLB is an opportunity to adult, crime and violence; and Inventory, FAIR Act 2007 Inherently Govern- reform the act to ensure that no child is left Whereas, research funded by the U.S. De- ment Inventory, and FAIR Act Inventory Ex- behind in this Federal, State, and school partment of Justice indicates that gang ecutive Summary; to the Committee on partnership; and membership is short-lived among adoles- Commerce, Science, and Transportation. Whereas, NCLB needs to be amended in a cents—with very few youth remaining gang- EC–6696. A communication from the Assist- number of areas to fulfill its admirable goal. involved through their adolescent years, and ant Secretary of the Army (Civil Works), First, while schools are being identified for therefore, allowing ongoing opportunities for transmitting, pursuant to law, a report from failing to meet standards, Congress has not intervention; and the Army Corps of Engineers on the Chicago met its promises for funding levels to allow Whereas, over-reliance on incarceration Underflow Plan; to the Committee on Envi- schools to correct identified inadequacies. and confinement of youth, particularly in ronment and Public Works. Further, a whole range of initiatives that ex- the early stages of delinquent behavior and EC–6697. A communication from the Chief pand early education, before- and after- for nonviolent delinquent behavior, has been of the Publications and Regulations Branch, school programs, summer school options, shown to increase long-term crime risks; and Internal Revenue Service, Department of the and family support, would enhance the abil- Whereas, the Youth PROMISE Act will Treasury, transmitting, pursuant to law, the ity of our schools to educate all of our chil- provide resources to enable communities report of a rule entitled ‘‘Disposition of In- with the greatest concentration of juvenile vestment in the United States Real Prop- dren to their full potential; and Whereas, schools also need flexibility in a delinquency and criminal street gang activ- erty’’ (Rev. Rul. 2008–31) received on June 13, 2008; to the Committee on Finance. whole range of areas. Special education im- ity to come together to assess unmet needs EC–6698. A communication from the Chief plementation, teacher subject area com- and implement research-based prevention of the Publications and Regulations Branch, petency, school benchmarks, and student co- and intervention approaches to promote Internal Revenue Service, Department of the hort definitions must not be imposed from youth success and community safety; and Treasury, transmitting, pursuant to law, the Washington, D.C. Local educators and State Whereas, the Youth PROMISE Act creates report of a rule entitled ‘‘Definition of ‘Out- legislatures must be allowed to refine these a PROMISE Advisory panel, which will help side Director’ Under Internal Revenue Code aspects of NCLB to reflect local conditions the Office of Juvenile Justice and Delin- 162(m)’’ (Revenue Ruling 2008–32) received on and needs. Flexibility and more sophisti- quency Prevention select PROMISE commu- June 13, 2008; to the Committee on Finance. cated measurements will keep the focus on nities. It will also develop standards for the EC–6699. A communication from the Direc- educating children and not meeting unreal- evaluation of juvenile delinquency and tor, Regulations Policy and Management istic and rigid standards; and criminal street gang activity prevention and Staff, Department of Health and Human Whereas, the entire sanctions concept street gang activity prevention and interven- Services, transmitting, pursuant to law, the must be revised. It may be comforting to tion needs and resources in each designated report of a rule entitled ‘‘Medical Devices; think that NCLB sanctions ‘‘schools’’ when geographic area in order to facilitate the Hearing Aids; Technical Data Amendments’’ they do not meet NCLB-established stand- strategic geographic allocation of resources (Docket No. FDA–2008–N–0148) received on ards, but in reality we sanction children in provided under the act; and June 13, 2008; to the Committee on Health, those schools by withholding or effectively Whereas, the Youth PROMISE Act estab- Education, Labor, and Pensions. diverting resources from those schools. The lishes grants to enable local and tribal com- EC–6700. A communication from the Assist- first response must be to target additional munities, via PROMISE Coordinating Coun- ant Secretary for Administration and Man- resources to correct recognized deficiencies; cils, to conduct an objective assessment re- agement, Department of Labor, transmit- and garding juvenile delinquency and criminal ting, pursuant to law, a report on the De- Whereas, to support effective intervention street gang activity, resource needs, and partment of Labor’s 2007 FAIR Act Inventory in failing schools, develop proper standards community strengths necessary to effec- of Inherently Governmental Activities and that promote education of all children, and tively address juvenile delinquency and Inventory of Commercial Activities; to the ensure relevant definitions and procedures criminal street gang activity. Based upon Committee on Health, Education, Labor, and that reflect real conditions, NCLB must be the assessment, the PROMISE Councils will Pensions. amended to ensure that the act’s assump- develop plans that include a broad array of

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00060 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5831 prevention and intervention programs which Whereas, the Visa Waiver Program was es- States Capitol and authorized each state to are responsive to the specifics of the commu- tablished in 1986 with the objective of pro- contribute to the Hall two statues that rep- nity, account for the cultural and linguistic moting better relations with United States resent important historical figures of that requirements of the community, and utilize allies, eliminating unnecessary barriers to state; and approaches that have been shown effective in travel, and stimulating the tourism indus- Whereas, Arizona currently has statues on reducing the likelihood of a young person be- try; and display in Statuary Hall of John Campbell coming involved in or continuing delinquent Whereas, the Visa Waiver Program enables Greenway, which was donated in 1930, and conduct or criminal street gang activity. nationals of twenty-seven countries to travel Father Eusebio Kino, which was added later Upon completion of the plan, the PROMISE to the United States for tourism or business in 1965. These are two acclaimed and distin- Councils may then apply for federal funds to for stays of ninety days or less without ob- guished individuals of great importance in assist with implementation. The act also taining a visa; the Republic of Korea is not Arizona’s history; and a participant in the Visa Waiver Program; provides for national evaluations of PROM- Whereas, John C. Greenway was born in ISE programs and activities, and and Whereas, the Youth PROMISE Act requires Whereas, due to increased security prompt- Huntsville, Alabama, on July 6, 1872, and at- that local units of government or Indian ed by the terrorist acts of September 11, 2001, tended Yale University where he was a star tribes receiving grants shall provide from it has become much more difficult for the athlete. After school, he went to work for nonfederal funds, in cash or in-kind, 25 per- citizens of the Republic of Korea, especially U.S. Steel, where he worked his way up to a cent of the costs of the activities carried out those living outside the capital city of Seoul, management role. He joined the Rough Rid- with such grants; and to obtain visitor visas that allow travel to ers in the Spanish American War, and was a Wheereas, the Youth PROMISE Act estab- the United States; and leader of the charge up San Juan Hill. After lishes a National Center for Proven Practices Whereas, under Implementing Rec- the war, Greenway helped U.S. Steel open Research, which will collect and disseminate ommendations of the 9/11 Commission Act of the Western Mesabi Range. In 1910, Green- research to PROMISE Councils and to the 2007, the United States Congress revised re- way moved from Minnesota to Arizona to public (including via an Internet website), as quirements for countries to become eligible manage the copper mines at Bisbee. Seeing well as other information regarding evi- for the Visa Waiver Program, enabling South the potential of the copper deposits at Ajo, dence-based promising practices related to Korea to be eligible for consideration, pro- he developed a method of extracting low juvenile delinquency and criminal street vided it meets the new security requirements grade ore. Greenway planned and built the gang activity prevention and intervention. specified in the Act; and city of Ajo. The mine was highly successful, The act also provides the opportunity for re- Whereas, in a letter to the Secretary of and over three billion pounds of copper were gional research partners to assist with devel- State dated July 7, 2006, United States Sen- shipped from Ajo. Greenway also served as a oping their assessments and plans; and ators Daniel K. Inouye and Daniel K. Akaka, regent for the University of Arizona. John C. Whereas, the Youth PROMISE Act pro- along with several other senators, expressed Greenway died on January 19, 1926. His death vides for the hiring and training of Youth- strong support for including South Korea at the age of 54 was mourned across the Oriented Policing officers to implement stra- into the Visa Waiver Program and noted country; and tegic activities to minimize youth crime and that South Korea has repealed its visa re- Whereas, legislation enacted by Congress victimization and reduce the long-tern in- quirement for United States citizens trav- in 2000 authorized any state to request the volvement of juveniles in illicit activities, eling to the Republic of Korea for thirty Joint Committee on the Library of Congress juvenile delinquency, and criminal street days or less and that South Korea enjoys a to approve the replacement of a statue the gang activity. The act also establishes a Cen- visa-free status with sixty-six other nations; state has provided for display in Statuary ter for Youth-Oriented Policing, which will and Hall under certain conditions; and be responsible for identification, develop- Whereas, including South Korea in the Whereas, the state of Arizona will cele- ment, and dissemination to law enforcement Visa Waiver Program would result in eco- brate its centennial on February 14, 2012, it agencies the best practices for Youth-Ori- nomic benefits to the United States esti- is appropriate at this time to consider hon- ented Policing techniques and technologies; mated to be $350,000,000 in actualized tourism oring a distinguished Arizonan who has and revenues for every 100,000 tourists increase in played a significant role in our state’s his- Whereas, the Youth PROMISE Act pro- South Korean visitors and tourists, based on tory since statehood by placing his statue in vides additional improvements to current visitors and tourists to the United States Statuary Hall, namely Senator Barry Gold- laws affecting juvenile delinquency and from South Korea spending of nearly water, This action in no way seeks to dimin- criminal street gang activity, including sup- $2,200,000,000 in 2004; and ish the positive contributions of the two Ari- port for youth victim and witness protection Whereas, while the Republic of Korea is zonans already honored in Statuary Hall, programs and extended and increased au- doing its part to facilitate the processing of and every effort will be made to ensure that thorizations for the juvenile Accountability travel requirements for its citizens, the their legacy is preserved in our great state; Block Grant program: Now, therefore, be it United States should also encourage visitors and Resolved by the Senate, That we memori- from the Republic of Korea, especially as Ha- Whereas, it is appropriate that we honor alize the United States Congress to support waii continues to be one of the premier des- John C. Greenway’s legacy by placing his through enactment the Youth PROMISE tinations in the world and tourism remains statue prominently and permanently in the Act; and be it further the backbone of Hawaii’s economy: Now, Resolved, That copies of this resolution be Arizona State Capitol building as part of the therefore, be it centennial; and transmitted to the President of the United Resolved by the House of Representatives of States Senate, the Speaker of the United the Twenty-fourth Legislature of the State of Whereas, Barry Morris Goldwater was born States House of Representatives, and the Hawaii, Regular Session of 2008, That the in Phoenix on New Year’s Day, 1909, three members of the Michigan congressional dele- President of the United States, the Sec- years before Arizona was admitted to the gation. retary of State, and the Secretary of Home- Union. He attended the University of Ari- land Security are urged to take all steps nec- zona and took over his family’s. mercantile POM–398. A resolution adopted by the business after his father’s death in 1930. He House of Representatives of the State of Ha- essary to include the Republic of Korea in the Visa Waiver Program; and be it further transformed his passion for flying into serv- waii urging the President of the United ice in the Army Air Corps during World War States to include the Republic of Korea in Resolved, That the members of Hawaii’s congressional delegation are urged to sup- II, and on his return to Arizona following the the Visa Waiver Program; to the Committee war he helped organize the Arizona Air Na- on the Judiciary. port the inclusion of the Republic of Korea in the Visa Waiver Program; and be it fur- tional Guard. Remaining in the reserves HOUSE RESOLUTION NO. 86 ther after the war, he retired with the rank of Whereas, there are nearly two million Resolved, That certified copies of this Reso- Major General; and Americans of Korean heritage and descent lution be transmitted to the President of the Whereas, Goldwater entered politics in 1949 who live in the United States, including United States, the Secretary of State, the when he was elected as a Phoenix city coun- forty thousand Hawaii residents, and Janu- Secretary for Homeland Security, President cilman. He first won a United States Senate ary 13, 2003 marked the centennial of the of the United States Senate, the Speaker of seat in 1952, when he defeated then Senate first arrival of Koreans in the United States; the United States House of Representatives, majority leader Ernest McFarland. In 1964 and the members of Hawaii’s congressional dele- Senator Goldwater was the Republican nomi- Whereas, the United States and the Repub- gation, and the Governor. nee for president. Although defeated in that lic of Korea have a long history of friendship, race, Goldwater became an icon for conserv- and continue to strengthen alliances and POM–399. A joint resolution adopted by the atism, starting a movement which many be- business partnerships; and House of Representatives of the State of Ari- Whereas, the Republic of Korea has been a lieve led to the election of Ronald Reagan as zona urging Congress to authorize the place- trusted ally for over fifty years, is a major president in 1980; and ment in Statuary Hall of a statue of Senator trading partner of the United States, and is Whereas, Senator Goldwater was reelected Barry Goldwater; to the Committee on Rules the thirteenth largest economy in the world; to the Senate in 1968 where he served until and Administration. and his retirement in 1987. During his time in the Whereas, visitors from the Republic of HOUSE JOINT RESOLUTION 2001 Senate, Goldwater served as Chairman of the Korea to the United States reached as high Whereas, in 1864, Congress established the Senate Intelligence Committee and Chair- as 500,000 in 1999, inclusive of the 40,000 visi- National Statuary Hall in the Old Hall of the man of the Senate Armed Services Com- tors to Hawaii that same year; and House of Representatives in the United mittee; and

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00061 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5832 CONGRESSIONAL RECORD — SENATE June 19, 2008

Whereas, Barry Goldwater was a quin- Whereas, The cost of attending college has Mr. BROWNBACK, Mr. BARRASSO, Mr. tessential westerner and a man of great per- increased greatly in recent years, and as a WICKER, Mr. SESSIONS, and Mr. sonal charm. His reputation for personal in- result the benefits provided by the G1 Bill GRASSLEY): tegrity was unblemished. Throughout his are no longer sufficient to cover the average S. 3159. A bill to require Congress to speci- life, Barry Goldwater had a love affair with cost of tuition; and fy the source of authority under the United the state of Arizona and her people. He ex- Whereas, Since 1944, Congress has periodi- States Constitution for the enactment of tensively explored areas throughout the cally updated the GI Bill to reflect the laws, and for other purposes; to the Com- state, including the Grand Canyon and the changing needs of our soldiers and the mili- mittee on the Judiciary. Colorado River, and he loved to photograph tary as a whole. However, despite the By Mr. INOUYE (for himself, Mr. STE- the people and landscapes of Arizona. He was changes of the past decades, it has been 24 VENS, Ms. CANTWELL, Ms. SNOWE, and a dear friend to the members of the Arizona’s years since the law was significantly re- Mr. KERRY): Native American tribes. He served both rural formed; and S. 3160. A bill to reauthorize and amend the and urban constituents with equal passion, Whereas, Improving and updating the GI National Sea Grant College Program Act, and his many years of faithful service to this bill would create an additional incentive for and for other purposes; to the Committee on state earned him the fitting’ nickname ‘‘Mr. individuals considering enlistment, which is Commerce, Science, and Transportation. Arizona’’; and vital given the all-volunteer nature of our By Mr. MARTINEZ: Whereas, the legacy of Senator Barry Gold- military; and S. 3161. A bill to name the Department of water since his death in 1998 has been a Whereas, Two pieces of legislation cur- Veterans Affairs spinal cord injury center in source of inspiration to many, and the place- rently before Congress, S. 22 and H. R. 2702, Tampa, Florida, as the ‘‘Michael Bilirakis ment of a statue in his likeness in Statuary would update the GI Bill to reflect the cur- Department of Veterans Affairs Spinal Cord Hall would be a well-deserved and lasting rent realities facing our servicemembers. Injury Center’’; to the Committee on Vet- testament to Barry Goldwater’s tremendous These bills, known as the Post 9/11 Veterans erans’ Affairs. impact on both our state and nation: Now Educational Assistance Act, would increase By Mr. VOINOVICH: therefore be it the amount of aid available to these stu- S. 3162. A bill to amend the Internal Rev- Resolved by the Legislature. of the State of dents, and would otherwise remove obstacles enue Code of 1986 to provide relief to improve Arizona: to obtaining a college education. While not the competitiveness of United States cor- 1. That the Members of the Forty-eighth perfect, these bills represent a significant porations and small businesses, to eliminate Legislature and the Governor of the State of improvement over the current system; and tax incentives to move jobs and profits over- Arizona respectfully request that the Con- Whereas, Those who would complain about seas, and for other purposes; to the Com- gress of the United States return the statue the costs of such a program seem to forget mittee on Finance. of John Campbell Greenway earlier pre- the staggering price we ask of these men and By Mr. FEINGOLD (for himself and Mr. sented by the State of Arizona for placement women. Likewise, those who complain that CASEY): in Statuary Hall and accept in return, for these bills would create an incentive to leave S. 3163. A bill to provide for a Federal em- placement in ’Statuary Hall, a statue of Sen- the military underestimate the dedication ployees program to authorize the use of ator Barry. Goldwater. and devotion of our troops: Now, therefore, leave by caregivers for family members of 2. That the Members of the Forty-eighth be it certain individuals performing military serv- Legislature and the Governor of the State of Resolved by the House of Representatives, ice, and for other purposes; to the Com- Arizona direct the Arizona Historical Advi- That we memorialize the Congress of the mittee on Homeland Security and Govern- sory Commission to organize a solicitation United States to enact, and the President of mental Affairs. for monies for the creation of a statue of the United States to sign, S. 22 and H. R. By Mr. MARTINEZ (for himself and Senator Barry Goldwater; to use the monies 2702; and be it further Mr. CORNYN): S. 3164. A bill to amend tile XVIII of the to acquire a statue for placement in Stat- Resolved, That copies of this resolution be Social Security Act to reduce fraud under uary Hall in the Capitol of this nation; to se- transmitted to the President of the United the Medicare program; to the Committee on lect and contract with a gifted and experi- States, the President of the United States Finance. enced sculptor to create a suitable statue of Senate, the Speaker of the United States By Mr. SCHUMER: Senator Barry Goldwater; and to make the House of Representatives, and the members S. 3165. A bill to develop a plan to share statue available for placement in Statuary of the Michigan congressional delegation. Hall. military and special use airspace along the 3. That the Members of the Forty-eighth f eastern seaboard with commercial air traf- fic, to provide adequate resources for the Legislature and the Governor of the State of REPORTS OF COMMITTEES Arizona direct that the costs of the creation FAA New York Integration Office, to estab- of the statue of Senator Barry Goldwater, as The following reports of committees lish an Aviation Traveler Task Force, and to well as the costs of transporting the statue were submitted: design a notification system to alert pas- to Washington, D.C. and any incidental By Mr. BYRD, from the Committee on Ap- sengers of potential service disruptions; to costs, be borne by the State of Arizona propriations: the Committee on Commerce, Science, and through the use of private monies. Special Report entitled ‘‘Allocation to Transportation. 4. That the Secretary of State transmit Subcommittees of Budget Totals From the By Mr. SESSIONS (for himself, Mr. copies of this Resolution to the President of Concurrent Resolution, Fiscal Year 2008’’ DURBIN, Mr. COBURN, and Mr. the United States Senate. the Speaker of the (Rept. No. 110–392). CORNYN): S. 3166. A bill to amend the Immigration United States House of Representatives, By Mr. BYRD, from the Committee on Ap- and Nationality Act to impose criminal pen- each Member of Congress from the State of propriations: alties on individuals who assist aliens who Arizona, each Member of the Joint Com- Special Report entitled ‘‘Allocation to have engaged in genocide, torture, or mittee on the Library of Congress and each Subcommittees of Budget Totals From the extrajudicial killings to enter the United Member of the Arizona Historical Advisory Concurrent Resolution, Fiscal Year 2009’’ States; to the Committee on the Judiciary. Commission. (Rept. No. 110–393). By Mr. BURR (for himself, Mr. WICKER, f POM–400. A resolution adopted by the Mr. CRAIG, and Mr. VITTER): S. 3167. A bill to amend title 38, United House of Representatives of the State of INTRODUCTION OF BILLS AND States Code, to clarify the conditions under Michigan urging Congress to pass the Post-9/ JOINT RESOLUTIONS which veterans, their surviving spouses, and 11 Veterans Educational Assistance Act; to their children may be treated as adjudicated the Committee on Veterans’ Affairs. The following bills and joint resolu- mentally incompetent for certain purposes; HOUSE RESOLUTION NO. 372 tions were introduced, read the first and second times by unanimous con- to the Committee on Veterans’ Affairs. Whereas, In 1944, the Congress of the By Mr. BIDEN (for himself and Mr. United States passed, and President Roo- sent, and referred as indicated: LUGAR): sevelt signed, the Servicemen’s Readjust- By Mr. REID (for Mr. KENNEDY (for S. 3168. A bill to authorize United States ment Act, known to most people as the GI himself and Mr. KERRY)): participation in the replenishment of re- Bill of Rights. Since its establishment, the S. 3158. A bill to extend the authority for sources of the International Development GI Bill has created educational opportunities the Cape Cod National Seashore Advisory Association, and for other purposes; to the for millions of veterans; and Commission; to the Committee on Energy Committee on Foreign Relations. Whereas, Since the terrorist attacks of and Natural Resources. By Mr. BIDEN (for himself and Mr. September 11, 2001, members of the United By Mr. COBURN (for himself, Mr. LUGAR): States military have been asked to perform MCCAIN, Mr. KYL, Mrs. HUTCHISON, S. 3169. A bill to authorize United States heroic tasks in the name of freedom. These Mr. CORNYN, Mr. ENSIGN, Mr. participation in, and appropriations for the selfless volunteers have performed with re- DEMINT, Mr. CHAMBLISS, Mr. INHOFE, United States contribution to, the eleventh markable valor, and it is incumbent on citi- Mr. CRAPO, Mr. ENZI, Mr. ALLARD, replenishment of the resources of the African zens of the United States to honor their serv- Mr. GRAHAM, Mr. BURR, Mrs. DOLE, Development Fund; to the Committee on ice in any way possible; and Mr. SUNUNU, Mr. THUNE, Mr. VITTER, Foreign Relations.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00062 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5833 By Ms. SNOWE (for herself, Mr. DODD, XVIII of the Social Security Act to im- nessee (Mr. CORKER) was added as a co- and Mr. KERRY): prove access to emergency medical sponsor of S. 2883, a bill to require the S. 3170. A bill to amend the Energy Policy services and the quality and efficiency Secretary of the Treasury to mint and Conservation Act to modify the condi- of care furnished in emergency depart- coins in commemoration of the centen- tions for the release of products from the ments of hospitals and critical access nial of the establishment of Mother’s Northeast Home Heating Oil Reserve Ac- count, and for other purposes; to the Com- hospitals by establishing a bipartisan Day. mittee on Energy and Natural Resources. commission to examine factors that af- S. 2907 By Mr. BARRASSO: fect the effective delivery of such serv- At the request of Mr. INOUYE, the S. 3171. A bill to amend the Internal Rev- ices, by providing for additional pay- name of the Senator from Washington enue Code of 1986 to exclude certain tax-ex- ments for certain physician services (Ms. CANTWELL) was added as a cospon- empt financing of energy transportation in- furnished in such emergency depart- sor of S. 2907, a bill to establish uni- frastructure from the private business use ments, and by establishing a Centers form administrative and enforcement tests, and for other purposes; to the Com- for Medicare & Medicaid Services procedures and penalties for the en- mittee on Finance. Working Group, and for other purposes. By Mr. VITTER: forcement of the High Seas Driftnet S. 3172. A bill to provide conditions for S. 1311 Fishing Moratorium Protection Act funds made available for certain projects lo- At the request of Mr. KERRY, the and similar statutes, and for other pur- cated in the State of Louisiana, and for name of the Senator from Washington poses. other purposes; to the Committee on Envi- (Ms. CANTWELL) was added as a cospon- S. 2920 ronment and Public Works. sor of S. 1311, a bill to permanently At the request of Mr. KERRY, the f prohibit oil and gas leasing in the name of the Senator from North Caro- North Aleutian Basin Planning Area, SUBMISSION OF CONCURRENT AND lina (Mrs. DOLE) was added as a cospon- and for other purposes. SENATE RESOLUTIONS sor of S. 2920, a bill to reauthorize and S. 1410 improve the financing and entrepre- The following concurrent resolutions At the request of Mr. COLEMAN, the neurial development programs of the and Senate resolutions were read, and name of the Senator from Connecticut Small Business Administration, and for referred (or acted upon), as indicated: (Mr. DODD) was added as a cosponsor of other purposes. By Mr. KERRY (for himself, Mr. KEN- S. 1410, a bill to amend the Internal S. 2932 NEDY, Mr. REED, Mr. LIEBERMAN, Mr. Revenue Code of 1986 to allow a credit At the request of Mrs. MURRAY, the DODD, Mr. SUNUNU, Mr. LEAHY, Mr. against income tax for the purchase of name of the Senator from Colorado WHITEHOUSE, and Mr. GREGG): hearing aids. S. Res. 596. A resolution congratulating the (Mr. ALLARD) was added as a cosponsor Boston Celtics on winning the 2008 National S. 1661 of S. 2932, a bill to amend the Public Basketball Association Championships; to At the request of Mr. DORGAN, the Health Service Act to reauthorize the the Committee on the Judiciary. name of the Senator from Kansas (Mr. poison center national toll-free num- f BROWNBACK) was added as a cosponsor ber, national media campaign, and of S. 1661, a bill to communicate United grant program to provide assistance for ADDITIONAL COSPONSORS States travel policies and improve poison prevention, sustain the funding S. 613 marketing and other activities de- of poison centers, and enhance the pub- At the request of Mr. LUGAR, the signed to increase travel in the United lic health of people of the United name of the Senator from New Hamp- States from abroad. States. shire (Mr. SUNUNU) was added as a co- S. 2279 S. 3038 sponsor of S. 613, a bill to enhance the At the request of Mr. BIDEN, the At the request of Mr. GRASSLEY, the overseas stabilization and reconstruc- name of the Senator from Ohio (Mr. name of the Senator from New Hamp- tion capabilities of the United States BROWN) was added as a cosponsor of S. shire (Mr. SUNUNU) was added as a co- Government, and for other purposes. 2279, a bill to combat international vio- sponsor of S. 3038, a bill to amend part S. 803 lence against women and girls. E of title IV of the Social Security Act At the request of Mr. ROCKEFELLER, S. 2504 to extend the adoption incentives pro- the name of the Senator from Hawaii At the request of Mr. NELSON of Flor- gram, to authorize States to establish (Mr. AKAKA) was added as a cosponsor ida, the name of the Senator from Cali- a relative guardianship program, to of S. 803, a bill to repeal a provision en- fornia (Mrs. BOXER) was added as a co- promote the adoption of children with acted to end Federal matching of State sponsor of S. 2504, a bill to amend title special needs, and for other purposes. spending of child support incentive 36, United States Code, to grant a Fed- S. 3130 payments. eral charter to the Military Officers At the request of Mr. DURBIN, the Association of America, and for other name of the Senator from Montana S. 809 purposes. (Mr. TESTER) was added as a cosponsor At the request of Mr. SUNUNU, the S. 2510 of S. 3130, a bill to provide energy price name of the Senator from Maine (Ms. At the request of Ms. LANDRIEU, the relief by authorizing greater resources COLLINS) was added as a cosponsor of S. name of the Senator from Missouri and authority for the Commodity Fu- 809, a bill to amend the United States (Mrs. MCCASKILL) was added as a co- tures Trading Commission, and for Housing Act of 1937 to exempt qualified sponsor of S. 2510, a bill to amend the other purposes. public housing agencies from the re- Public Health Service Act to provide S. 3133 quirement of preparing an annual pub- revised standards for quality assurance At the request of Mr. DODD, the lic housing agency plan. in screening and evaluation of names of the Senator from Illinois (Mr. S. 901 gynecologic cytology preparations, and OBAMA), the Senator from Maryland At the request of Mr. ALEXANDER, his for other purposes. (Ms. MIKULSKI) and the Senator from name was added as a cosponsor of S. S. 2559 Massachusetts (Mr. KERRY) were added 901, a bill to amend the Public Health At the request of Mr. DODD, the name as cosponsors of S. 3133, a bill to direct Service Act to provide additional au- of the Senator from New Mexico (Mr. the Secretary of the Interior to estab- thorizations of appropriations for the BINGAMAN) was added as a cosponsor of lish an annual production incentive fee health centers program under section S. 2559, a bill to amend title II of the with respect to Federal onshore and 330 of such Act. Social Security Act to increase the offshore land that is subject to a lease At the request of Mr. CORNYN, his level of earnings under which no indi- for production of oil or natural gas name was added as a cosponsor of S. vidual who is blind is determined to under which production is not occur- 901, supra. have demonstrated an ability to engage ring, to authorize use of the fee for en- S. 1003 in substantial gainful activity for pur- ergy efficiency and renewable energy At the request of Ms. STABENOW, the poses of determining disability. projects, and for other purposes. name of the Senator from Washington S. 2883 S. 3140 (Mrs. MURRAY) was added as a cospon- At the request of Mr. ROCKEFELLER, At the request of Mr. WEBB, the name sor of S. 1003, a bill to amend title the name of the Senator from Ten- of the Senator from Missouri (Mrs.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00063 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5834 CONGRESSIONAL RECORD — SENATE June 19, 2008 MCCASKILL) was added as a cosponsor STATEMENTS ON INTRODUCED (2) in paragraph (11) by striking ‘‘advisory of S. 3140, a bill to provide that 4 of the BILLS AND JOINT RESOLUTIONS services’’ and inserting ‘‘extension services’’; (3) in each of paragraphs (12) and (13) by 12 weeks of parental leave made avail- By Mr. INOUYE (for himself, Mr. able to a Federal employee shall be striking ‘‘(33 U.S.C. 1126)’’; and STEVENS, Ms. CANTWELL, Ms. (4) by adding at the end the following: paid leave, and for other purposes. SNOWE, and Mr. KERRY): ‘‘(17) The term ‘regional research and in- S. 3144 S. 3160. A bill to reauthorize and formation plan’ means a plan developed by At the request of Mr. BAUCUS, the amend the National Sea Grant College one or more sea grant colleges or sea grant names of the Senator from Wisconsin Program Act, and for other purposes; institutes that identifies regional prior- (Mr. FEINGOLD), the Senator from Geor- to the Committee on Commerce, ities.’’. gia (Mr. CHAMBLISS) and the Senator Science, and Transportation. SEC. 5. NATIONAL SEA GRANT COLLEGE PRO- GRAM. from Utah (Mr. BENNETT) were added as Mr. INOUYE. Mr. President, I ask (a) PROGRAM ELEMENTS.—Section 204(b) (33 cosponsors of S. 3144, a bill to amend unanimous consent that the text of the U.S.C. 1123(b)) is amended— part B of title XVIII of the Social Secu- bill be printed in the RECORD. (1) by amending in paragraph (1) to read as rity Act to delay and reform the Medi- There being no objection, the text of follows: care competitive acquisition program the bill was order to be printed in the ‘‘(1) sea grant programs that comprise a for purchase of durable medical equip- RECORD, as follows: national sea grant college program network, ment, prosthetics, orthotics, and sup- S. 3160 including international projects conducted plies. within such programs and regional and na- Be it enacted by the Senate and House of Rep- tional projects conducted among such pro- S.J. RES. 41 resentatives of the United States of America in grams;’’; At the request of Mr. MCCONNELL, Congress assembled, (2) by amending paragraph (2) to read as the names of the Senator from Okla- SECTION 1. SHORT TITLE. follows: homa (Mr. COBURN), the Senator from This Act may be cited as the ‘‘National ‘‘(2) administration of the national sea Mississippi (Mr. COCHRAN) and the Sen- Sea Grant College Program Amendments Act grant college program and this title by the of 2008’’. ator from Pennsylvania (Mr. SPECTER) national sea grant office and the Administra- were added as cosponsors of S.J. Res. SEC. 2. REFERENCES tion;’’; and 41, a joint resolution approving the re- Except as otherwise expressly provided (3) by amending paragraph (4) to read as therein, whenever in this Act an amendment follows: newal of import restrictions contained or repeal is expressed in terms of an amend- ‘‘(4) any regional or national strategic in- in the Burmese Freedom and Democ- ment to, or repeal of, a section or other pro- vestments in fields relating to ocean, coast- racy Act of 2003. vision, the reference shall be considered to al, and Great Lakes resources developed in S. RES. 440 be made to a section or other provision of consultation with the Board and with the ap- At the request of Mr. BROWN, the the National Sea Grant College Program Act proval of the sea grant colleges and the sea names of the Senator from Iowa (Mr. (33 U.S.C. 1121 et seq.). grant institutes.’’. (b) TECHNICAL CORRECTION.—Section GRASSLEY), the Senator from Colorado SEC. 3. FINDINGS AND PURPOSE. (a) FINDINGS.—Section 202(a) (33 U.S.C. 204(c)(2) (33 U.S.C. 1123(c)(2)) is amended by (Mr. SALAZAR), the Senator from Wis- 1121(a)) is amended— striking ‘‘Within 6 months of the date of en- consin (Mr. FEINGOLD), the Senator (1) by striking subparagraphs (D) and (E) of actment of the National Sea Grant College from North Dakota (Mr. CONRAD) and paragraph (1) and inserting the following: Program Reauthorization Act of 1998, the’’ the Senator from Iowa (Mr. HARKIN) ‘‘(D) encourage the development of prepa- and inserting ‘‘The’’. were added as cosponsors of S. Res. 440, ration, forecast, analysis, mitigation, re- (c) FUNCTIONS OF DIRECTOR OF NATIONAL a resolution recognizing soil as an es- sponse, and recovery systems for coastal haz- SEA GRANT COLLEGE PROGRAM.—Section sential natural resource, and soils pro- ards; 204(d) (33 U.S.C. 1123(d)) is amended— fessionals as playing a critical role in ‘‘(E) understand global environmental (1) in paragraph (2)(A), by striking ‘‘long range’’; managing our Nation’s soil resources. processes and their impacts on ocean, coast- al, and Great Lakes resources; and’’; (2) in paragraph (3)(A)— S. RES. 584 (2) by striking ‘‘program of research, edu- (A) by striking ‘‘(A)(i) evaluate’’ and in- At the request of Mr. BINGAMAN, his cation,’’ in paragraph (2) and inserting ‘‘pro- serting ‘‘(A) evaluate and assess’’; name was added as a cosponsor of S. gram of integrated research, education, ex- (B) by striking ‘‘activities; and’’ and in- Res. 584, a resolution recognizing the tension,’’; and serting ‘‘activities;’’; and historical significance of Juneteenth (3) by striking paragraph (6) and inserting (C) by striking clause (ii); and Independence Day and expressing the the following: (3) in paragraph (3)(B)— (A) by redesignating clauses (ii) through sense of the Senate that history should ‘‘(6) The National Oceanic and Atmos- pheric Administration, through the national (iv) as clauses (iii) through (v), respectively, be regarded as a means for under- sea grant college program, offers the most and by inserting after clause (i) the fol- standing the past and solving the chal- suitable locus and means for such commit- lowing: lenges of the future. ment and engagement through the pro- ‘‘(ii) encourage collaborations among sea At the request of Mr. DURBIN, the motion of activities that will result in great- grant colleges and sea grant institutes to ad- name of the Senator from Arkansas er such understanding, assessment, develop- dress regional and national priorities estab- (Mr. PRYOR) was added as a cosponsor ment, management, and conservation of lished under subsection (c)(1);’’; and of S. Res. 584, supra. ocean, coastal, and Great Lakes resources. (B) in clause (iii) (as so redesignated) by The most cost-effective way to promote such striking ‘‘encourage’’ and inserting ‘‘en- AMENDMENT NO. 4979 activities is through continued and increased sure’’. At the request of Mr. NELSON of Flor- Federal support of the establishment, devel- SEC. 6. PROGRAM OR PROJECT GRANTS AND ida, the names of the Senator from opment, and operation of programs and CONTRACTS. New York (Mrs. CLINTON), the Senator projects by sea grant colleges, sea grant in- Section 205 (33 U.S.C. 1124) is amended— from North Dakota (Mr. DORGAN), the stitutes, and other institutions, including (1) by striking ‘‘States or regions.’’ in sub- Senator from Arkansas (Mrs. LINCOLN), strong collaborations between Administra- section (a)(2) and inserting ‘‘States, regions, the Senator from Missouri (Mrs. tion scientists and research and outreach or the Nation.’’; and personnel at academic institutions.’’. (2) by striking the matter following para- MCCASKILL), the Senator from Arkan- (b) PURPOSE.—Section 202(c) (33 U.S.C. graph (3) in subsection (b) and inserting the sas (Mr. PRYOR), the Senator from Or- 1121(c)) is amended by striking ‘‘to promote following: egon (Mr. SMITH) and the Senator from research, education, training, and advisory ‘‘The total amount that may be provided for Maine (Ms. SNOWE) were added as co- service activities’’ and inserting ‘‘to promote grants under this subsection and subsection sponsors of amendment No. 4979 in- integrated research, education, training, and 208(b) during any fiscal year shall not exceed tended to be proposed to S. 3001, an extension services and activities’’. an amount equal to 5 percent of the total original bill to authorize appropria- (c) TERMINOLOGY.—Subsections (a) and (b) funds appropriated for such year under sec- tions for fiscal year 2009 for military of section 202 (15 U.S.C. 1121(a) and (b)) are tion 212.’’. amended by striking ‘‘utilization,’’ each SEC. 7. EXTENSION SERVICES BY SEA GRANT activities of the Department of De- place it appears and inserting ‘‘manage- fense, for military construction, and COLLEGES AND SEA GRANT INSTI- ment,’’. TUTES. for defense activities of the Depart- SEC. 4. DEFINITIONS. Section 207(a) (33 U.S.C. 1126(a)) is amended ment of Energy, to prescribe military Section 203 (33 U.S.C. 1122) is amended— in each of paragraphs (2)(B) and (3)(B) by personnel strengths for such fiscal (1) in paragraph (4) by striking ‘‘utiliza- striking ‘‘advisory services’’ and inserting year, and for other purposes. tion,’’ and inserting ‘‘management,’’; ‘‘extension services’’.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00064 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5835 SEC. 8. FELLOWSHIPS. (2) by striking ‘‘utilization,’’ and inserting omy will force us to change our uncom- Section 208(a) (33 U.S.C. 1127) is amended— ‘‘management,’’. petitive and inefficient methods of (1) by striking ‘‘Not later than 1 year after (d) EXTENSION OF TERM.—Section 209(c)(2) business taxation, including one of the (33 U.S.C. 1128(c)(2)) is amended to read as the date of the enactment of the National highest corporate marginal rates in the Sea Grant College Program Act Amendments follows: of 2002, and every 2 years thereafter,’’ in sub- ‘‘(2) The term of office of a voting member world. section (a) and inserting ‘‘Every 2 years,’’; of the Board shall be 4 years. The Director I am not proposing today a com- and may extend the term of office of a voting prehensive tax reform bill that would (2) by striking ‘‘year.’’ in subsection (b) member of the Board once by up to 1 year.’’. touch every part of the Tax Code, but I (e) ESTABLISHMENT OF SUBCOMMITTEES.— and inserting ‘‘year and is not subject to am introducing legislation that ad- Federal cost share requirements’’. Section 209(c) (33 U.S.C. 1128(c)) is amended dresses one large piece of tax reform, in SEC. 9. NATIONAL SEA GRANT ADVISORY BOARD. by adding at the end the following: ‘‘(8) The Board may establish such sub- the hopes of starting a conversation (a) REDESIGNATION OF SEA GRANT REVIEW committees as are reasonably necessary to PANEL AS BOARD.— that will inform policymakers as we carry out its duties under subsection (b). (1) REDESIGNATION.—The sea grant review develop a more comprehensive reform Such subcommittees may include individuals panel established by section 209 of the Na- in the next couple of years. Today, I who are not Board members.’’. tional Sea Grant College Program Act (33 am introducing the Manufacturing, As- U.S.C. 1128), as in effect before the date of SEC. 10. AUTHORIZATION OF APPROPRIATIONS. Section 212 of the National Sea Grant Col- sembling, Development, and Export in the enactment of this Act, is redesignated as lege Program Act (33 U.S.C. 1131) is amend- the USA—or MADE in the USA—Tax the National Sea Grant Advisory Board. ed— Act. The purpose of my legislation is to (2) MEMBERSHIP NOT AFFECTED.—An indi- (1) by striking subsection (a)(1) and insert- provide tax relief to improve the com- vidual serving as a member of the sea grant ing the following: ‘‘(1) IN GENERAL.—There review panel immediately before the enact- petitiveness of U.S. corporations and are authorized to be appropriated to the Sec- ment of this Act may continue to serve as a small businesses and to eliminate in- retary to carry out this title— member of the National Sea Grant Advisory centives that favor foreign competition ‘‘(A) $100,000,000 for fiscal year 2009; Board until the expiration of such member’s and encourage companies to move jobs ‘‘(B) $105,000,000 for fiscal year 2010; term under section 209(c) of such Act (33 ‘‘(C) $110,000,000 for fiscal year 2011; and profits overseas. U.S.C. 1128(c). ‘‘(D) $115,000,000 for fiscal year 2012; (3) REFERENCES.—Any reference in a law, A number of factors contribute to a map, regulation, document, paper, or other ‘‘(E) $120,000,000 for fiscal year 2013; and company’s decision about where to lo- record of the United States to such sea grant ‘‘(F) $125,000,000 for fiscal year 2014.’’; cate activity and jobs, including wages, review panel is deemed to be a reference to (2) in subsection (a)(2)— workforce skills, transportation costs, the National Sea Grant Advisory Board. (A) by striking ‘‘biology and control of zebra mussels and other important aquatic’’ and local regulations. But there is no (4) CONFORMING AMENDMENTS.— in subparagraph (A) and inserting ‘‘biology, doubt that taxes are an important fac- (A) IN GENERAL.—Section 209 (33 U.S.C. prevention, and control of aquatic’’; and tor. Recent economic research con- 1128) is amended by striking so much as pre- cludes that in a global economy, work- cedes subsection (b) and inserting the fol- (B) by striking ‘‘blooms, including lowing: Pfiesteria piscicida; and’’ in subparagraph ers bear the brunt of higher corporate (C) and inserting ‘‘blooms; and’’; tax rates, through lower wages and ‘‘SEC. 209. NATIONAL SEA GRANT ADVISORY (3) in subsection (c)(1) by striking ‘‘rating BOARD. fewer jobs. Therefore, it is imperative under section 204(d)(3)(A)’’ and inserting ‘‘(a) ESTABLISHMENT.—There shall be an that we have a Tax Code that makes ‘‘performance assessments’’; independent committee to be known as the (4) by striking subsection (c)(2) and insert- the United States an attractive place National Sea Grant Advisory Board.’’. ing the following: to locate production, research, and (B) DEFINITION.—Section 203(9) (33 U.S.C. ‘‘(2) regional or national strategic invest- other activity. While the MADE in the 1122(9)) is amended to read as follows: ments authorized under section 204(b)(4);’’. USA Tax Act would not address the ‘‘(9) The term ‘Board’ means the National SEC. 11. REPEAL OF ANNUAL COORDINATION RE- ‘‘wage pull’’ that sends jobs to places Sea Grant Advisory Board established under PORT REQUIREMENT. section 209.’’; like China and India, it would deal Section 9 of the National Sea Grant Col- with the ‘‘tax push’’ that encourages (C) OTHER PROVISIONS.—The following pro- lege Program Act Amendments of 2002 (33 visions are each amended by striking U.S.C. 857-20) is repealed. jobs to leave the United States. ‘‘panel’’ each place it appears and inserting The MADE in the USA Tax Act would ‘‘Board’’: By Mr. VOINOVICH: eliminate tax breaks that encourage (i) Section 204 (33 U.S.C. 1123). S. 3162. A bill to amend the Internal companies to move jobs overseas or (ii) Section 207 (33 U.S.C. 1126). Revenue Code of 1986 to provide relief (iii) Section 209 (33 U.S.C. 1128). that benefit foreign competitors and to improve the competitiveness of (b) DUTIES.—Section 209(b) (33 U.S.C. then use that revenue to cut tax rates 1128(b)) is amended to read as follows: United States corporations and small on large and small businesses that in- ‘‘(b) DUTIES.— businesses, to eliminate tax incentives vest and create jobs in the United ‘‘(1) IN GENERAL.—The Board shall advise to move jobs and profits overseas, and States. The centerpiece of the legisla- the Secretary and the Director concerning— for other purposes; to the Committee tion is a one-fifth reduction in the Fed- ‘‘(A) strategies for utilizing the sea grant on Finance. eral corporate rate, to 28 percent from college program to address the Nation’s MR. VOINOVICH. Mr. President, highest priorities regarding the under- 35 percent. Of the 30 member countries when the Senate reconvenes in Janu- of the Organization for Economic Co- standing, assessment, development, manage- ary 2009 for the 111th Congress, we will ment, and conservation of ocean, coastal, operation and Development—which in- and Great Lakes resources; have an historic opportunity, through cludes the major industrialized nations ‘‘(B) the designation of sea grant colleges fundamental tax reform, to transform of North America, Europe, and Asia— and sea grant institutes; and the U.S. economy in a manner that will the United States has the second high- ‘‘(C) such other matters as the Secretary make our nation stronger and more est combined Federal-State corporate refers to the Board for review and advice. prosperous for generations. A number tax rate at 39.3 percent, lower only ‘‘(2) BIENNIAL REPORT.—The Board shall re- of factors make the 111th Congress the port to the Congress every two years on the than Japan’s rate of 39.5 percent. The occasion for a perfect storm for the average is 27.6 percent, and Ireland has state of the national sea grant college pro- Tax Code. At the beginning of the next gram. The Board shall indicate in each such the lowest rate at 12.5 percent. report the progress made toward meeting the Congress, a new President will take of- fice and will be looking to enact major Even Communist China, our biggest priorities identified in the strategic plan in economic rival in the 21st century, re- effect under section 204(c). The Secretary tax changes. At the end, the 2001 and shall make available to the Board such infor- 2003 tax relief will expire, resulting in cently cut its corporate tax rate to 25 mation, personnel, and administrative serv- an unprecedented tax increase on the percent. It will be that much harder to ices and assistance as it may reasonably re- American people. And in between, the compete with China for jobs and in- quire to carry out its duties under this reach of the deeply flawed alternative vestment when businesses operating in title.’’. minimum tax—or AMT—will threaten the United States have to pay a tax (c) MEMBERSHIP, TERMS, AND POWERS.— to hit tens of millions of middle-class rate 15 percent higher than they would Section 209(c)(1) (33 U.S.C. 1128(c)(1)) is have to pay in China. amended— Americans unless Congress enacts (1) by inserting ‘‘coastal management,’’ major tax legislation. Finally, the In fact, a constituent of mine from after ‘‘resources management,’’; and competitive pressures of a global econ- Norwalk, OH, Tom Secor, who owns his

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00065 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5836 CONGRESSIONAL RECORD — SENATE June 19, 2008 own small business, came to my office unjustness of the Tax Code deep in his would represent a huge improvement and told a story about a business trip heart. He knew that hundreds of tar- over the current system. The panel’s he made to China. He said that he saw geted tax subsidies for the benefit of proposals belong as a key part of the an editorial in a Chinese newspaper powerful interests forced average national discussion on fundamental tax that was discussing all the concerns Americans to pay higher marginal reform. that Americans have with Chinese rates and reduced economic growth. He Some of my colleagues will suggest competition. The conclusion of the edi- saw tax reform not as a retreat from that we can just increase marginal torial was that the Americans could his 1981 tax relief agenda but, rather, rates to raise the revenue we need. But solve most of their problems with Chi- as a logical continuation and enhance- in a competitive global economy, I nese competition if they would just re- ment of that agenda. The Tax Reform can’t understand why we would choose form their own Tax Code. Imagine Act of 1986 was the culmination of the such a self-defeating approach. Higher that: even Communist China knows quest he began in 1981 to create a Tax marginal rates on an already-broken that the United States needs tax re- Code with low marginal rates that tax system would only discourage eco- form to stay competitive, but for some raised the necessary revenue to fund nomic ingenuity and reduce U.S. com- reason we refuse to learn that lesson the government with the least possible petitiveness. ourselves. interference in our free market econ- Tinkering with the current Tax Code In addition to slashing the corporate omy. won’t get it done. Tinkering is what rate on U.S. production, my legislation We must enact fundamental tax re- got us into this mess in the first place. would also take steps to make small form to help make the Tax Code sim- It is time to rip the Tax Code out by its businesses more competitive and sim- ple, fair, transparent, and economically roots and replace it with something plify the tax rules for individuals oper- efficient. According to the President’s that works. We must create a new tax ating in the global economy. Specifi- Advisory Panel on Federal Tax Reform, system that is conducive to job cre- cally, my legislation would increase headed by former Senators Connie ation and economic growth. We should the domestic activities deduction for Mack and John Breaux, only 13 percent start by addressing one of the biggest partnerships, S corporations, and sole of taxpayers file without the help of ei- problems with the current code: it re- proprietorships to 12 percent from 9 ther a tax preparer or computer soft- wards moving production activity—and percent; make permanent the 2003 ex- ware. Since enacting the Tax Reform the good-paying jobs that accompany pansion in small business expensing; Act of 1986—legislation intended to such activity—overseas. It taxes do- simplify the international tax rules for simplify the filing process for tax- mestic production heavily but taxes Americans working abroad by repeal- payers—over 15,000 provisions have foreign production lightly. It imposes ing complex and punitive rules enacted been added to the Internal Revenue the second highest corporate tax rate in 2006; and repeal the burdensome 3 Code. in the developed world but collects one percent withholding requirement for It is not just a matter of saving tax- of the smallest amounts of corporate contractors, also enacted in 2006. payers time and effort. This is about tax as a share of the economy. Such a These tax reforms, which will help saving taxpayers real money. The Tax system sounds absolutely perverse, but create high-paying jobs in the United Foundation has estimated that com- that is what we have in the United States, will be paid for by repealing a prehensive tax reform could save States. The MADE in the USA Tax Act number of existing tax breaks that Americans as much as $265 billion in is intended to fix that. favor foreign competition and that en- compliance costs associated with pre- I know there is bipartisan support in courage companies to move jobs and paring their returns. Now, that would this Chamber to move forward on fun- profits overseas. Among those tax be a real tax reduction that wouldn’t damental tax reform. It probably won’t breaks I would eliminate are tax shel- cost the Treasury one dime. happen this year, but that doesn’t ters that allow foreign competitors to I have been working on tax reform mean that we shouldn’t get started hide their U.S. income offshore, cre- for years. In 2003, I attached an amend- right away. We need to start setting ating an unlevel playing field for do- ment to the Jobs and Growth Tax Re- the table so that a new President and a mestic businesses such as small manu- lief Reconciliation Act that would have new Congress can hit the ground run- facturers and domestic insurance com- created a blue ribbon commission to ning in 2009 and enact comprehensive panies; tax credits for moving our Na- study fundamental tax reform. The tax reform that makes the code simple, tion’s technological innovation—such amendment was adopted by voice vote fair, and progrowth. I hope my col- as patents, copyrights, and ‘‘know- but later was removed in conference. leagues will take a close look at the how’’—overseas, along with the high- In the autumn of 2004, I offered my MADE in the USA Tax Act and join me wage manufacturing jobs that accom- tax reform commission amendment in trying to make it a key part of our pany that intellectual property; tax again, this time to the American Jobs future efforts. loopholes that encourage U.S. corpora- Creation Act. The Senate again adopt- tions to reincorporate as foreign cor- ed my amendment. During conference By Mr. MARTINEZ (for himself porations; a tax exemption for execu- negotiations, the White House con- and Mr. CORNYN): tives of offshore hedge funds if the ex- tacted me and requested that I with- S. 3164. A bill to amend tile XVIII of ecutives put their money in certain de- draw my amendment because the the Social Security Act to reduce fraud ferred compensation plans; and tax President was preparing to take a lead- under the Medicare program; to the breaks for foreign oil and gas produc- ership role by appointing his own tax Committee on Finance. tion. reform panel. I enthusiastically agreed Mr. CORNYN. Mr. President, ‘‘the Reducing the tax rates on corporate to defer to his leadership, and I with- first important rule of fraud control is: and small business income should lead drew my amendment. It seemed to me What you see is not the problem. It is to job creation and wage increases for that the tax reform bandwagon was fi- what we don’t see that really does the American workers. Paying for these nally starting to roll. damage, and the efficacy of control tax cuts by eliminating tax breaks for In January 2005, President Bush an- systems depends upon how well they foreign production and offshore tax nounced the creation of an all-star uncover, and then suppress, the invis- shelters means we can accomplish panel, led by former Senators Connie ible bulk of the problem.’’ Such are the these goals in a fiscally responsible Mack and John Breaux, and that panel words of the preeminent expert on manner. My legislation is intended to spent most of the year engaging the health care fraud, Harvard, Kennedy be revenue neutral, as I believe that we American public to develop proposals School of Government Professor, Mal- can enact progrowth tax policy with- to make our Tax Code simpler, fairer, colm Sparrow. out increasing the national debt. and more conducive to economic Just last week, the Washington Post In 1984, President Ronald Reagan de- growth. In November 2005, the panel ran a front-page article, which I would clared to the American people that the issued its final report. While not per- ask to be entered into the record, Tax Code was fundamentally unfair fect in anyone’s mind, the panel’s two ‘‘Medical Fraud a Growing Problem: and that he was going to reform it. plans provided a starting point for de- Medicare Pays Most Claims Without President Reagan held his belief in the veloping tax reform legislation that Review.’’ The story detailed how one

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00066 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5837 woman, defrauded the Government out payers, seniors, and providers, by Act prohibits the sale of firearms to of $105 million using just a laptop while strengthening the Medicare program those who have been ‘‘adjudicated as a sitting in her Mediterranean-style itself. mental defective.’’ townhouse. To prevent fraud, the STOP Act em- The Government maintains a data- While the lottery’s slogan is ‘‘All you ploys lessons from the private sector base on these individuals called the Na- need is a dollar and dream.’’ This and moves Medicare into the 21st cen- tional Instant Criminal Background woman discovered something better. tury. For example, Medicare may be Check System, or ‘‘NICS.’’ The Brady Maybe Medicare should adopt the slo- the only program, company, or indus- Law and the NICS database aims to gan ‘‘All you need is a Provider Num- try left in the country that still thinks prevent those who may pose a danger ber and a dream.’’ it is a good idea to use social security to society or themselves from pur- Quite simply, Medicare is not sophis- numbers for identification. In a time chasing a firearm. ticated enough to address the fraud where a stolen social security number Gun shop owners use NICS to screen that runs rampant through it. Every is a stolen identity, Medicare has not customers before selling a firearm. year, Medicare’s anemic fraud controls stopped printing it on identification Needless to say, it is a serious matter let slip by an array of schemes that cards that are sent through the mail. to have one’s name on the NICS. Every cost the Medicare program and tax- Even worse, when seniors report that American should expect a rigorous and payers $60 billion, if not more. That is their social security number is being fair process before their right to bear 20 percent of all Medicare spending. used fraudulently to bill for services in arms is taken away. Often, as pointed out by the Wash- Medicare that they didn’t receive, Unfortunately, when it comes to cer- ington Post article, Medicare pays Medicare has no ability to stop paying tain veterans, surviving spouses, and claims with little or no review as to claims on that social security number children, the process is neither rig- why or where the checks are going or or provide the senior with a new num- orous nor fair. to whom. One phantom company, com- ber. Medicare has ignored the warnings Since 1999, VA has sent the names of prising nothing more than two rented of the Government Accountability Of- 116,000 of its beneficiaries to the FBI mailboxes and a phone number was fice and the pleas of groups like AARP for inclusion on the NICS. paid $2.1 million over a 6 month period. and Consumers Union to change this None of these names were sent to the In another case, the owner of the fraud- practice. Passage of the STOP Act will FBI because they were determined to ulent company was an unemployed tow mean Medicare can ignore it no longer. be a danger to themselves or others. truck operator who used the identities The STOP Act requires physicians in They were listed in NICS because they of dozens of dead patients. Again, ‘‘All high risk areas to review the claims could not manage their financial af- you need is a Provider Number and a they submitted, similar to how you or fairs. We should not take away a Con- dream.’’ I would review our credit card state- stitutional right because someone Medicare fraud is not limited to one ment at the end of the month to ensure can’t balance a checkbook or pay their segment of the health care sector. there are no mistaken or fraudulent bills on time. There are numerous examples of fraud charges. This practice is arbitrary, unfair, and conducted by physicians, dentists, It implements prepayment fraud de- applies a double standard. health systems, laboratories, teaching tection methods, such as site visits, VA’s review process for assigning a hospitals, patients, and billing special- data analysis, and integrity reviews, so fiduciary is meant to determine one’s ists to name a few. While I would agree that a guy with a mailbox can no financial responsibility in managing that most of these groups are operating longer rely on ‘‘All you need is a Sup- VA-provided disability compensation, on the straight and narrow, the truth plier Number and a Dream.’’ pension, and other benefits. For exam- remains that the losses associated with It ensures providers are billing for ple, a veteran may be assigned a fidu- Medicare fraud are helping drive the only those services for which they are ciary if they have credit problems. program to bankruptcy. qualified. The VA focuses on whether or not Unfortunately, conducting Medicare It tracks the usage of durable med- benefits paid by VA will be spent in the fraud has such a low risk of getting ical equipment and it conducts a study manner in which they were intended. caught and less severe punishment yet on the implementation prospects of Nothing involved with VA’s appoint- high reward that it has even attracted real-time claims analysis technology. ment of a fiduciary even gets at the organized crime. Again, ‘‘All you need Yes, many acts of fraud may be invis- question of whether an individual is a is a Provider Number and a dream.’’ ible, but it doesn’t make them danger to themselves or others, or Usually, the only way Medicare is undetectable, and it certainly doesn’t whether the person should own a fire- able to recoup a small portion of the mean that we should just turn a blind arm. annual $60 billion in losses is by ex- eye. I hope my colleagues and members Yet that is exactly what happens if pending more resources on investiga- of the health sector will join Senator VA appoints a fiduciary. Over 116,000 tions and law enforcement activities MARTINEZ and me in stepping up to the individuals have been listed in NICS through the Office of Inspector General task of being part of the solution. Our since 1999 because they were appointed and Department of Justice. While these seniors, our providers, and our tax- a fiduciary. This includes veterans, agencies have done a commendable job payers deserve better accountability surviving spouses, and even children. in combating fraud, to a large extent it from Medicare. This process is not only arbitrary, it is good money chasing bad. is unfair. Taking away a Constitu- Sometimes systems are set-up to fail. By Mr. BURR (for himself, Mr. tional right is a serious action and vet- In this case, the Medicare fraud preven- WICKER, Mr. CRAIG, and Mr. erans should be afforded due process tion program is not only set-up to fail, VITTER): under the law. At the very least, we it is nearly non-existent. S. 3167. A bill to amend title 38, should expect such decisions to be We need to go from ‘‘pay and chase’’ United States Code, to clarify the con- made by a competent judicial author- to ‘‘detect and prevent.’’ Medicare ditions under which veterans, their ity and not by civilian government em- needs to be mobile and it needs to be surviving spouses, and their children ployees. focused on preventing criminals from may be treated as adjudicated men- The current practice is also a double ever getting paid in the first place. tally incompetent for certain purposes; standard. Only VA beneficiaries fall Medicare needs a system that will con- to the Committee on Veterans’ Affairs. under these guidelines. The Social Se- tinually, as Malcolm Sparrow said: Mr. BURR. Mr. President, I rise curity Administration assigns fidu- ‘‘uncover, and then suppress.’’ today to introduce legislation that ciaries to help beneficiaries, yet the Today, I am proud to join Senator would end an arbitrary process through Social Security Administration does MARTINEZ in what I hope is the first in which our own Government takes away not send their names to the NICS. a line of necessary common sense solu- the Second Amendment rights of Why are we singling out those who tions to this problem. The Seniors and American veterans. fought for this country and those who Taxpayers Obligation Protection Act As most of my colleagues know, the sacrificed while their spouse or parent or STOP Act, will protect honest tax- Brady Handgun Violence Prevention served?

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00067 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5838 CONGRESSIONAL RECORD — SENATE June 19, 2008 My legislation would end this arbi- and a 117 percent increase since 2004. In mitted the following resolution; which trary and unfair practice that strips just 4 short years, the cost of heating a was referred to the Committee on the the finest men and women of this coun- home with oil has gone up more than Judiciary: try of their right to bear arms. This $1000 dollars! Many families and seniors Whereas on June 17, 2008, the Boston Celt- legislation would require a judicial au- living on fixed incomes simply cannot ics won the 2008 National Basketball Asso- thority to determine that an individual bear this burden. ciation Championship (referred to in this preamble as the ‘‘2008 Championship’’) in 6 is a danger to themselves or others be- That is why Senator SNOWE and I are games over the Los Angeles Lakers; fore their Second Amendment rights proposing a price trigger to provide for Whereas the 2008 Championship was the are taken away. oil to be released from the Northeast 17th world championship won by the Celtics, I am not here to ask that we put guns Home Heating Oil Reserve. This is a 2- the most in the history of the National Bas- in the hands of dangerous people. I am million barrel reserve I originally ketball Association (referred to in this pre- here to ask that we treat our veterans worked to create in 2000, along with my amble as the ‘‘NBA’’); fairly and we take the rights of our colleague from Maine and other Sen- Whereas the 2008 Championship marked veterans seriously. ators from the Northeast, to protect the culmination of the greatest single season No matter where my colleagues fall the residents of the region from severe turnaround in the history of the NBA, as the on the gun issue, I hope we can all Celtics improved from a record of 24–58 dur- price shocks to the heating oil market. ing the 2007–2008 season to a league-best 66– agree that we need a process that is Given the record heating oil prices we 16 mark during the 2007–2008 campaign; consistent and fair. Our veterans took are experiencing today, we believe it Whereas the 2008 Celtics NBA Champion- an oath to uphold the Constitution. would be reasonable to use this reserve ship team, like all great Celtics champions They deserve to enjoy the rights they to try to cushion those dependent on of the past, epitomized team work, selfless- fought so hard to protect. heating oil to get through the winter. ness, character, effort, camaraderie, tough- From November through March, the ness, and determination; By Ms. SNOWE (for herself, Mr. Secretary of Energy would conduct a Whereas the 2008 Celtics honored the rich legacy of their franchise, which was— DODD, and Mr. KERRY): survey to determine the price of a gal- S. 3170. A bill to amend the Energy (1) established by a legion of all-time lon of heating oil on the first of each greats, including Bill Russell, Larry Bird, Policy and Conservation Act to modify month. If the price meets or exceeds $4 the conditions for the release of prod- John Havlicek, Bob Cousy, Tom Heinsohn, per gallon, this would trigger an imme- K.C. Jones, Sam Jones, Jo Jo White, Dave ucts from the Northeast Home Heating diate release of 20 percent of the North- Cowens, Kevin McHale, Robert Parish, Den- Oil Reserve Account, and for other pur- east Home Heating Oil Reserve. This nis Johnson, and Tom ‘‘Satch’’ Sanders; and poses; to the Committee on Energy and oil would then be sold on the open mar- (2) masterminded by one of the legendary Natural Resources. ket to lower the price of heating oil in coaches of all sports, Arnold ‘‘red’’ Mr. DODD. Mr. President, I rise the region. Auerbach; today to speak on a bill I am intro- The revenue raised by the sale would Whereas Celtics managing partner Wyc ducing with my colleague, Senator then be devoted to the Weatherization Grousbeck and the entire Celtics ownership SNOWE, to amend the Northeast Home Assistance Program to help low income group never wavered from paying the price Heating Oil Reserve program. I want to to raise ‘‘Banner #17’’ to the Garden rafters; heating oil customers increase the en- Whereas the 2008 Celtics were brought to- thank Senator SNOWE for her tremen- ergy efficiency of their homes. Experi- dous leadership on the problem this bill gether by a former Celtics player, Danny ence has shown that properly Ainge, whose off-season acquisitions of NBA is designed to address, which is a criti- weatherizing homes can increase their All-Stars Kevin Garnett and Ray Allen cally important issue for our region energy efficiency by 20–30 percent, re- earned him the 2008 NBA Executive of the that we have worked together on for ducing energy consumption and low- Year Award; many years. That issue is the sky- ering monthly utility bills. However, Whereas the Celtics were led by Doc Riv- rocketing price of heating oil, which most low and middle income families ers, who— millions of families in the Northeast (1) oversaw the smooth integration of new cannot afford the upfront investment superstars and untested young players into are dependent on to heat their homes necessary to reap these benefits. The through our long, cold winters. the Celtics lineup; and Weatherization Assistance Program is (2) assembled, and ensured the execution According to the Department of En- an enormously successful program de- ergy’s Energy Information Agency, of, a masterful NBA Finals game plan; signed to help families make that ini- Whereas the Celtics featured a 21st Cen- EIA, 6.2 million of the 8 million house- tial investment. holds in the U.S. that use heating oil tury ‘‘Big Three’’ comprised of Paul Pierce, This bill will not solve our Nation’s Kevin Garnett, and Ray Allen, 3 veteran to heat their homes are in the North- energy crisis, nor will this alone solve players who worked together and never al- east, or approximately 78 percent. As the problem of high heating oil prices lowed their personal ambition or pursuit of crude oil and gasoline prices have risen in the Northeast. As the Senator from individual statistics to interfere with the higher and higher, the cost of heating Maine well knows, we need to devote goal of the team to win a championship; Whereas a group of talented young players oil has risen as well. Currently, heating far more money to programs like the oil is far and away the costliest method contributed pivotal roles in the march of the Low Income Home Energy Assistance Celtics to the 2008 Championship, including of heating homes, costing families an Program, and we need to take a serious average of nearly $2000 per year, and point guard Rajon Rondo, center Kendrick look at restructuring our Nation’s Perkins, forward Leon Powe, guard Tony much more in the coldest areas. Over- comprehensive energy policy. But this Allen, and forward Glen ‘‘Big Baby’’ Davis; all, heating a home with heating oil legislation is a very good first step to- Whereas the valuable bench of the Celtics costs twice the national average of all ward easing the pain so many residents was stocked with veteran role players who fuels combined, yet most families in of the Northeast and my State of Con- made significant contributions during the the Northeast have little choice. Even season, including forward James Posey, necticut are feeling. I urge my col- guard Eddie House, guard Sam Cassell, for- in some of our region’s cities, there are leagues to support us in this effort. no natural gas lines or other sources of ward P.J. Brown, forward Brian Scalabrine, home heating available to residents. f and center Scott Pollard; Whereas the 2008 Celtics team dem- This dependence on heating oil is SUBMITTED RESOLUTIONS onstrated remarkable poise and gained in- stretching many families’ budgets to valuable playoff experience in defeating the the breaking point. Where once low and Atlanta Hawks, the Cleveland Cavaliers, and moderate income families could strug- SENATE RESOLUTION 596—CON- the Detroit Pistons in hard-fought series gle through the winter, soaring heating GRATULATING THE BOSTON during which every possession counted at oil prices are forcing people to choose CELTICS ON WINNING THE 2008 both the offensive and defensive ends of the between heating their homes, driving NATIONAL BASKETBALL ASSO- floor; their cars to and from work, and put- CIATION CHAMPIONSHIPS Whereas, after 26 playoff games, the Celtics ultimately secured the 17th NBA Champion- ting food on the table for their fami- Mr. KERRY (for himself, Mr. KEN- ship of the franchise in one of the most lies. The EIA estimated that this year, NEDY, Mr. REED, Mr. LIEBERMAN, Mr. dominating performances in NBA history, a it will cost $1,962 to heat a home with DODD, Mr. SUNUNU, Mr. LEAHY, Mr. 39-point rout of the Lakers in front of a rau- oil, a 33 percent increase from last year WHITEHOUSE, and Mr. GREGG) sub- cous Garden crowd; and

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00068 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5839 Whereas the Celtics fans in the State of SA 4992. Mr. ALLARD submitted an tended to be proposed by him to the bill H.R. Massachusetts, in New England, and amendment intended to be proposed to 3221, supra; which was ordered to lie on the throughout the world never gave up hope amendment SA 4983 proposed by Mr. REID table. that the franchise would someday return to (for Mr. DODD (for himself and Mr. SHELBY)) SA 5009. Mr. CRAPO submitted an amend- glory and give a new generation of Celtics to the bill H.R. 3221, supra; which was or- ment intended to be proposed to amendment fans the opportunity to celebrate a cham- dered to lie on the table. SA 4983 proposed by Mr. REID (for Mr. DODD pionship: Now, therefore, be it SA 4993. Mr. MENENDEZ (for himself, Mrs. (for himself and Mr. SHELBY)) to the bill H.R. Resolved, That the Senate— MURRAY, and Mr. BROWN) submitted an 3221, supra; which was ordered to lie on the (1) congratulates— amendment intended to be proposed to table. (A) the Boston Celtics for winning the 2008 amendment SA 4983 proposed by Mr. REID SA 5010. Mr. CRAPO submitted an amend- National Basketball Association Champion- (for Mr. DODD (for himself and Mr. SHELBY)) ment intended to be proposed to amendment ship, including the players, head coach, to the bill H.R. 3221, supra; which was or- SA 4983 proposed by Mr. REID (for Mr. DODD coaches, support staff, and team owners and dered to lie on the table. (for himself and Mr. SHELBY)) to the bill H.R. executives whose ability, hard work, dedica- SA 4994. Mr. BROWN submitted an amend- 3221, supra; which was ordered to lie on the tion, and spirit made the season possible; ment intended to be proposed by him to the table. and bill H.R. 3221, supra; which was ordered to lie SA 5011. Mr. BOND submitted an amend- (B) the Los Angeles Lakers for their suc- on the table. ment intended to be proposed by him to the cess during the 2008 season and winning the SA 4995. Mr. BROWN submitted an amend- bill H.R. 3221, supra; which was ordered to lie National Basketball Association Western ment intended to be proposed by him to the on the table. SA 5012. Mr. KERRY (for Mr. KENNEDY (for Conference Championship; and bill H.R. 3221, supra; which was ordered to lie himself and Mr. KERRY)) submitted an (2) directs the Enrolling Clerk of the Sen- on the table. amendment intended to be proposed by Mr. ate to transmit an enrolled copy of this reso- SA 4996. Mr. DORGAN submitted an KERRY to the bill H.R. 3221, supra; which was lution to— amendment intended to be proposed to ordered to lie on the table. amendment SA 4983 proposed by Mr. REID (A) the 2008 Boston Celtics team; SA 5013. Mr. TESTER (for himself and Mr. (for Mr. DODD (for himself and Mr. SHELBY)) (B) Celtics head coach Doc Rivers; ENZI) submitted an amendment intended to (C) Celtics general manager Danny Ainge; to the bill H.R. 3221, supra; which was or- be proposed to amendment SA 4983 proposed dered to lie on the table. and by Mr. REID (for Mr. DODD (for himself and SA 4997. Ms. LANDRIEU submitted an (D) Celtics managing partner Wyc Mr. SHELBY)) to the bill H.R. 3221, supra; amendment intended to be proposed to Grousbeck. which was ordered to lie on the table. amendment SA 4983 proposed by Mr. REID f SA 5014. Mr. DODD (for Mr. INOUYE (for (for Mr. DODD (for himself and Mr. SHELBY)) himself and Mr. STEVENS)) proposed an AMENDMENTS SUBMITTED AND to the bill H.R. 3221, supra; which was or- amendment to the bill S. 2607, to make a PROPOSED dered to lie on the table. technical correction to section 3009 of the SA 4998. Ms. LANDRIEU submitted an Deficit Reduction Act of 2005. SA 4983. Mr. REID (for Mr. DODD (for him- amendment intended to be proposed to self and Mr. SHELBY)) proposed an amend- SA 5015. Mr. DODD (for himself and Mr. amendment SA 4983 proposed by Mr. REID ment to the bill H.R. 3221, moving the United SHELBY) proposed an amendment to the bill (for Mr. DODD (for himself and Mr. SHELBY)) States toward greater energy independence S. 2159, to require the Secretary of the Treas- to the bill H.R. 3221, supra; which was or- and security, developing innovative new ury to mint coins in commemoration of the dered to lie on the table. 50th anniversary of the establishment of the technologies, reducing carbon emissions, cre- SA 4999. Mr. SUNUNU (for himself and Ms. ating green jobs, protecting consumers, in- National Aeronautics and Space Administra- SNOWE) proposed an amendment to amend- creasing clean renewable energy production, tion. ment SA 4983 proposed by Mr. REID (for Mr. and modernizing our energy infrastructure, SA 5016. Ms. LANDRIEU submitted an DODD (for himself and Mr. SHELBY)) to the and to amend the Internal Revenue Code of amendment intended to be proposed to bill H.R. 3221, supra. 1986 to provide tax incentives for the produc- amendment SA 4983 proposed by Mr. REID SA 5000. Mr. SUNUNU submitted an tion of renewable energy and energy con- (for Mr. DODD (for himself and Mr. SHELBY)) amendment intended to be proposed by him servation. to the bill H.R. 3221, moving the United SA 4984. Mrs. DOLE (for herself and Mr. to the bill H.R. 3221, supra; which was or- States toward greater energy independence dered to lie on the table. BURR) submitted an amendment intended to and security, developing innovative new SA 5001. Mr. CORKER submitted an amend- be proposed to amendment SA 4983 proposed technologies, reducing carbon emissions, cre- ment intended to be proposed to amendment by Mr. REID (for Mr. DODD (for himself and ating green jobs, protecting consumers, in- SA 4983 proposed by Mr. REID (for Mr. DODD Mr. SHELBY)) to the bill H.R. 3221, supra. creasing clean renewable energy production, SA 4985. Mr. BOND (for himself and Mr. (for himself and Mr. SHELBY)) to the bill H.R. and modernizing our energy infrastructure, BARRASSO) proposed an amendment to 3221, supra; which was ordered to lie on the and to amend the Internal Revenue Code of amendment SA 4983 proposed by Mr. REID table. 1986 to provide tax incentives for the produc- SA 5002. Mr. CRAPO (for himself and Mr. (for Mr. DODD (for himself and Mr. SHELBY)) tion of renewable energy and energy con- to the bill H.R. 3221, supra. ENZI) submitted an amendment intended to servation; which was ordered to lie on the SA 4986. Mr. BOND proposed an amend- be proposed by him to the bill H.R. 3221, table. ment to amendment SA 4983 proposed by Mr. supra; which was ordered to lie on the table. SA 5017. Ms. LANDRIEU submitted an REID (for Mr. DODD (for himself and Mr. SA 5003. Mr. CRAPO submitted an amend- amendment intended to be proposed by her SHELBY)) to the bill H.R. 3221, supra. ment intended to be proposed by him to the to the bill H.R. 3221, supra; which was or- SA 4987. Mr. BOND proposed an amend- bill H.R. 3221, supra; which was ordered to lie dered to lie on the table. ment to amendment SA 4983 proposed by Mr. on the table. SA 5018. Ms. LANDRIEU submitted an REID (for Mr. DODD (for himself and Mr. SA 5004. Mr. NELSON, of Florida (for him- amendment intended to be proposed by her SHELBY)) to the bill H.R. 3221, supra. self and Mr. COLEMAN) submitted an amend- to the bill H.R. 3221, supra; which was or- SA 4988. Mr. KOHL (for himself, Mrs. LIN- ment intended to be proposed to amendment dered to lie on the table. COLN, Ms. MIKULSKI, and Ms. COLLINS) sub- SA 4983 proposed by Mr. REID (for Mr. DODD SA 5019. Mr. INHOFE submitted an amend- mitted an amendment intended to be pro- (for himself and Mr. SHELBY)) to the bill H.R. ment intended to be proposed to amendment posed to amendment SA 4983 proposed by Mr. 3221, supra; which was ordered to lie on the SA 4983 proposed by Mr. REID (for Mr. DODD REID (for Mr. DODD (for himself and Mr. table. (for himself and Mr. SHELBY)) to the bill H.R. SHELBY)) to the bill H.R. 3221, supra. SA 5005. Mr. ISAKSON (for himself and Mr. 3221, supra; which was ordered to lie on the SA 4989. Mr. ISAKSON (for himself and Mr. CORKER) submitted an amendment intended table. CHAMBLISS) submitted an amendment in- to be proposed to amendment SA 4983 pro- f tended to be proposed to amendment SA 4983 posed by Mr. REID (for Mr. DODD (for himself proposed by Mr. REID (for Mr. DODD (for him- and Mr. SHELBY)) to the bill H.R. 3221, supra; TEXT OF AMENDMENTS self and Mr. SHELBY)) to the bill H.R. 3221, which was ordered to lie on the table. SA 4983. Mr. REID (for Mr. DODD (for supra; which was ordered to lie on the table. SA 5006. Mr. VITTER (for himself and Ms. SA 4990. Mr. VITTER submitted an amend- LANDRIEU) submitted an amendment in- himself and Mr. SHELBY)) proposed an ment intended to be proposed to amendment tended to be proposed by him to the bill H.R. amendment to the bill H.R. 3221, mov- SA 4983 proposed by Mr. REID (for Mr. DODD 3221, supra; which was ordered to lie on the ing the United States toward greater (for himself and Mr. SHELBY)) to the bill H.R. table. energy independence and security, de- 3221, supra; which was ordered to lie on the SA 5007. Mr. BUNNING submitted an veloping innovative new technologies, table. amendment intended to be proposed to reducing carbon emissions, creating SA 4991. Mr. BINGAMAN (for himself and amendment SA 4983 proposed by Mr. REID green jobs, protecting consumers, in- Mr. DOMENICI) submitted an amendment in- (for Mr. DODD (for himself and Mr. SHELBY)) tended to be proposed to amendment SA 4983 to the bill H.R. 3221, supra; which was or- creasing clean renewable energy pro- proposed by Mr. REID (for Mr. DODD (for him- dered to lie on the table. duction, and modernizing our energy self and Mr. SHELBY)) to the bill H.R. 3221, SA 5008. Mr. CHAMBLISS (for himself and infrastructure, and to amend the Inter- supra; which was ordered to lie on the table. Mr. CORKER) submitted an amendment in- nal Revenue Code of 1986 to provide tax

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00069 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5840 CONGRESSIONAL RECORD — SENATE June 19, 2008 incentives for the production of renew- Sec. 1155. Civil money penalties. Sec. 1506. Standards for State license re- able energy and energy conservation; Sec. 1156. Criminal penalty. newal. as follows: Sec. 1157. Notice after separation from serv- Sec. 1507. System of registration adminis- ice. tration by Federal agencies. In lieu of the matter proposed to be in- Sec. 1158. Subpoena authority. Sec. 1508. Secretary of Housing and Urban serted, insert the following: Subtitle E—General Provisions Development backup authority SECTION 1. SHORT TITLE; TABLE OF CONTENTS. to establish a loan originator Sec. 1161. Conforming and technical amend- (a) SHORT TITLE.—This Act may be cited as licensing system. the ‘‘Housing and Economic Recovery Act of ments. Sec. 1509. Backup authority to establish a 2008’’. Sec. 1162. Presidentially-appointed directors nationwide mortgage licensing of enterprises. (b) TABLE OF CONTENT.—The table of con- and registry system. tents for this Act is as follows: Sec. 1163. Effective date. Sec. 1510. Fees. Sec. 1. Short title; table of contents. TITLE II—FEDERAL HOME LOAN BANKS Sec. 1511. Background checks of loan origi- DIVISION A—HOUSING FINANCE REFORM Sec. 1201. Recognition of distinctions be- nators. tween the enterprises and the Sec. 1512. Confidentiality of information. Sec. 1001. Short title. Federal Home Loan Banks. Sec. 1513. Liability provisions. Sec. 1002. Definitions. Sec. 1202. Directors. Sec. 1514. Enforcement under HUD backup TITLE I—REFORM OF REGULATION OF Sec. 1203. Definitions. licensing system. ENTERPRISES Sec. 1204. Agency oversight of Federal Home Sec. 1515. State examination authority. Subtitle A—Improvement of Safety and Loan Banks. Sec. 1516. Reports and recommendations to Soundness Supervision Sec. 1205. Housing goals. Congress. Sec. 1517. Study and reports on defaults and Sec. 1101. Establishment of the Federal Sec. 1206. Community development financial foreclosures. Housing Finance Agency. institutions. Sec. 1102. Duties and authorities of the Di- Sec. 1207. Sharing of information among TITLE VI—MISCELLANEOUS rector. Federal Home Loan Banks. Sec. 1601. Study and reports on guarantee Sec. 1103. Federal Housing Finance Over- Sec. 1208. Exclusion from certain require- fees. sight Board. ments. Sec. 1602. Study and report on default risk Sec. 1104. Authority to require reports by Sec. 1209. Voluntary mergers. evaluation. regulated entities. Sec. 1210. Authority to reduce districts. Sec. 1603. Conversion of HUD contracts. Sec. 1105. Examiners and accountants; au- Sec. 1211. Community financial institution Sec. 1604. Bridge depository institutions. thority to contract for reviews members. Sec. 1605. Sense of the Senate. of regulated entities; ombuds- Sec. 1212. Public use data base; reports to DIVISION B—FORECLOSURE man. Congress. PREVENTION Sec. 1213. Semiannual reports. Sec. 1106. Assessments. Sec. 2001. Short title. Sec. 1214. Liquidation or reorganization of a Sec. 1107. Regulations and orders. Sec. 2002. Emergency designation. Sec. 1108. Prudential management and oper- Federal Home Loan Bank. ations standards. Sec. 1215. Study and report to Congress on TITLE I—FHA MODERNIZATION ACT OF Sec. 1109. Review of and authority over en- securitization of acquired mem- 2008 terprise assets and liabilities. ber assets. Sec. 2101. Short title. Sec. 1110. Risk-based capital requirements. Sec. 1216. Technical and conforming amend- Subtitle A—Building American Sec. 1111. Minimum capital levels. ments. Homeownership Sec. 1112. Registration under the securities Sec. 1217. Study on Federal Home Loan Sec. 2111. Short title. laws. Bank advances. Sec. 2112. Maximum principal loan obliga- Sec. 1113. Prohibition and withholding of ex- Sec. 1218. Federal Home Loan Bank refi- tion. ecutive compensation. nancing authority for certain Sec. 2113. Cash investment requirement and Sec. 1114. Limit on golden parachutes. residential mortgage loans. prohibition of seller-funded Sec. 1115. Reporting of fraudulent loans. TITLE III—TRANSFER OF FUNCTIONS, down payment assistance. Subtitle B—Improvement of Mission PERSONNEL, AND PROPERTY OF Sec. 2114. Mortgage insurance premiums. Supervision OFHEO AND THE FEDERAL HOUSING Sec. 2115. Rehabilitation loans. Sec. 1121. Transfer of program approval and FINANCE BOARD Sec. 2116. Discretionary action. housing goal oversight. Subtitle A—OFHEO Sec. 2117. Insurance of condominiums. Sec. 2118. Mutual Mortgage Insurance Fund. Sec. 1122. Assumption by the Director of cer- Sec. 1301. Abolishment of OFHEO. Sec. 2119. Hawaiian home lands and Indian tain other HUD responsibilities. Sec. 1302. Continuation and coordination of Sec. 1123. Review of enterprise products. reservations. certain actions. Sec. 2120. Conforming and technical amend- Sec. 1124. Conforming loan limits. Sec. 1303. Transfer and rights of employees Sec. 1125. Annual housing report. ments. of OFHEO. Sec. 2121. Insurance of mortgages. Sec. 1126. Public use database. Sec. 1304. Transfer of property and facilities. Sec. 1127. Reporting of mortgage data. Sec. 2122. Home equity conversion mort- Subtitle B—Federal Housing Finance Board Sec. 1128. Revision of housing goals. gages. Sec. 1129. Duty to serve underserved mar- Sec. 1311. Abolishment of the Federal Hous- Sec. 2123. Energy efficient mortgages pro- kets. ing Finance Board. gram. Sec. 1130. Monitoring and enforcing compli- Sec. 1312. Continuation and coordination of Sec. 2124. Pilot program for automated proc- ance with housing goals. certain actions. ess for borrowers without suffi- Sec. 1131. Affordable housing programs. Sec. 1313. Transfer and rights of employees cient credit history. Sec. 1132. Financial education and coun- of the Federal Housing Finance Sec. 2125. Homeownership preservation. seling. Board. Sec. 2126. Use of FHA savings for improve- Sec. 1133. Transfer and rights of certain Sec. 1314. Transfer of property and facilities. ments in FHA technologies, procedures, processes, program HUD employees. TITLE IV—HOPE FOR HOMEOWNERS performance, staffing, and sala- Subtitle C—Prompt Corrective Action Sec. 1401. Short title. ries. Sec. 1141. Critical capital levels. Sec. 1402. Establishment of HOPE for Home- Sec. 2127. Post-purchase housing counseling Sec. 1142. Capital classifications. owners Program. eligibility improvements. Sec. 1143. Supervisory actions applicable to Sec. 1403. Fiduciary duty of servicers of Sec. 2128. Pre-purchase homeownership undercapitalized regulated enti- pooled residential mortgage counseling demonstration. ties. loans. Sec. 2129. Fraud prevention. Sec. 1144. Supervisory actions applicable to Sec. 1404. Revised standards for FHA ap- Sec. 2130. Limitation on mortgage insurance significantly undercapitalized praisers. premium increases. regulated entities. TITLE V—S.A.F.E. MORTGAGE LICENSING Sec. 2131. Savings provision. Sec. 1145. Authority over critically under- ACT Sec. 2132. Implementation. capitalized regulated entities. Sec. 1501. Short title. Sec. 2133. Moratorium on implementation of Subtitle D—Enforcement Actions Sec. 1502. Purposes and methods for estab- risk-based premiums. Sec. 1151. Cease and desist proceedings. lishing a mortgage licensing Subtitle B—Manufactured Housing Loan Sec. 1152. Temporary cease and desist pro- system and registry. Modernization ceedings. Sec. 1503. Definitions. Sec. 2141. Short title. Sec. 1153. Removal and prohibition author- Sec. 1504. License or registration required. Sec. 2142. Purposes. ity. Sec. 1505. State license and registration ap- Sec. 2143. Exception to limitation on finan- Sec. 1154. Enforcement and jurisdiction. plication and issuance. cial institution portfolio.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00070 Fmt 4624 Sfmt 0655 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5841 Sec. 2144. Insurance benefits. DIVISION C—TAX-RELATED PROVISIONS TITLE III—REVENUE PROVISIONS Sec. 2145. Maximum loan limits. Sec. 3000. Short title; etc. Subtitle A—General Provisions Sec. 2146. Insurance premiums. Sec. 2147. Technical corrections. TITLE I—HOUSING TAX INCENTIVES Sec. 3081. Election to accelerate amt and r Sec. 2148. Revision of underwriting criteria. Subtitle A—Multi-Family Housing and d credits in lieu of bonus Sec. 2149. Prohibition against kickbacks and depreciation. PART I—LOW-INCOME HOUSING TAX CREDIT unearned fees. Sec. 3082. Certain GO Zone incentives. Sec. 2150. Leasehold requirements. Sec. 3001. Temporary increase in volume cap Subtitle B—Revenue Offsets for low-income housing tax TITLE II—MORTGAGE FORECLOSURE Sec. 3091. Returns relating to payments PROTECTIONS FOR SERVICEMEMBERS credit. Sec. 3002. Determination of credit rate. made in settlement of payment Sec. 2201. Temporary increase in maximum card and third party network loan guaranty amount for cer- Sec. 3003. Modifications to definition of eli- gible basis. transactions. tain housing loans guaranteed Sec. 3092. Gain from sale of principal resi- by the Secretary of Veterans Sec. 3004. Other simplification and reform of low-income housing tax incen- dence allocated to nonqualified Affairs. use not excluded from income. Sec. 2202. Counseling on mortgage fore- tives. Sec. 3005. Treatment of military basic pay. Sec. 3093. Increase in information return closures for members of the penalties. Armed Forces returning from PART II—MODIFICATIONS TO TAX-EXEMPT Sec. 3094. Increase in penalty for failure to service abroad. HOUSING BOND RULES file S corporation returns. Sec. 2203. Enhancement of protections for Sec. 3007. Recycling of tax-exempt debt for Sec. 3095. Increase in penalty for failure to servicemembers relating to financing residential rental file partnership returns. mortgages and mortgage fore- projects. Sec. 3096. Increase in minimum penalty on closures. Sec. 3008. Coordination of certain rules ap- failure to file a return of tax. TITLE III—EMERGENCY ASSISTANCE plicable to low-income housing DIVISION A—HOUSING FINANCE REFORM FOR THE REDEVELOPMENT OF ABAN- credit and qualified residential DONED AND FORECLOSED HOMES rental project exempt facility SEC. 1001. SHORT TITLE. Sec. 2301. Emergency assistance for the re- bonds. This division may be cited as the ‘‘Federal development of abandoned and Housing Finance Regulatory Reform Act of PART III—REFORMS RELATED TO THE LOW-IN- foreclosed homes. 2008’’. COME HOUSING CREDIT AND TAX-EXEMPT Sec. 2302. Nationwide distribution of re- HOUSING BONDS SEC. 1002. DEFINITIONS. sources. (a) FEDERAL SAFETY AND SOUNDNESS ACT Sec. 3009. Hold harmless for reductions in Sec. 2303. Limitation on use of funds with DEFINITIONS.—Section 1303 of the Federal area median gross income. respect to eminent domain. Housing Enterprises Financial Safety and Sec. 3010. Exception to annual current in- Sec. 2304. Limitation on distribution of Soundness Act of 1992 (12 U.S.C. 4502) is come determination require- funds. amended— ment where determination not Sec. 2305. Counseling intermediaries. (1) in each of paragraphs (8), (9), (10), and relevant. TITLE IV—HOUSING COUNSELING (19), by striking ‘‘Secretary’’ each place that RESOURCES Subtitle B—Single Family Housing term appears and inserting ‘‘Director’’; Sec. 2401. Housing counseling resources. Sec. 3011. First-time homebuyer credit. (2) by redesignating paragraphs (16) Sec. 2402. Credit counseling. Sec. 3012. Additional standard deduction for through (19) as paragraphs (21) through (24), TITLE V—MORTGAGE DISCLOSURE real property taxes for non- respectively; IMPROVEMENT ACT itemizers. (3) by striking paragraphs (13) through (15) and inserting the following: Sec. 2501. Short title. Subtitle C—General Provisions Sec. 2502. Enhanced mortgage loan disclo- ‘‘(19) OFFICE OF FINANCE.—The term ‘Office Sec. 3021. Temporary liberalization of tax- sures. of Finance’ means the Office of Finance of Sec. 2503. Community development invest- exempt housing bond rules. the Federal Home Loan Bank System (or any ment authority for depository Sec. 3022. Repeal of alternative minimum successor thereto). institutions. tax limitations on tax-exempt ‘‘(20) REGULATED ENTITY.—The term ‘regu- housing bonds, low-income TITLE VI—VETERANS HOUSING lated entity’ means— housing tax credit, and reha- MATTERS ‘‘(A) the Federal National Mortgage Asso- bilitation credit. ciation and any affiliate thereof; Sec. 2601. Home improvements and struc- Sec. 3023. Bonds guaranteed by Federal ‘‘(B) the Federal Home Loan Mortgage Cor- tural alterations for totally dis- home loan banks eligible for poration and any affiliate thereof; and abled members of the Armed treatment as tax-exempt bonds. ‘‘(C) any Federal Home Loan Bank.’’; Forces before discharge or re- Sec. 3024. Modification of rules pertaining to (4) by redesignating paragraphs (11) and lease from the Armed Forces. FIRPTA nonforeign affidavits. (12) as paragraphs (17) and (18), respectively; Sec. 2602. Eligibility for specially adapted Sec. 3025. Modification of definition of tax- (5) by redesignating paragraph (7) as para- housing benefits and assistance exempt use property for pur- graph (12); for members of the Armed poses of the rehabilitation cred- (6) by redesignating paragraphs (8) through Forces with service-connected it. (10) as paragraphs (14) through (16), respec- disabilities and individuals re- Sec. 3026. Extension of special rule for mort- tively; siding outside the United gage revenue bonds for resi- (7) in paragraph (5)— States. dences located in disaster Sec. 2603. Specially adapted housing assist- (A) by striking ‘‘(5)’’ and inserting ‘‘(9)’’; areas. ance for individuals with severe and burn injuries. TITLE II—REFORMS RELATED TO REAL (B) by striking ‘‘Office of Federal Housing Sec. 2604. Extension of assistance for indi- ESTATE INVESTMENT TRUSTS Enterprise Oversight of the Department of Housing and Urban Development’’ and in- viduals residing temporarily in Subtitle A—Foreign Currency and Other serting ‘‘Federal Housing Finance Agency’’; housing owned by a family Qualified Activities (8) by redesignating paragraph (6) as para- member. Sec. 3031. Revisions to REIT income tests. Sec. 2605. Increase in specially adapted graph (10); Sec. 3032. Revisions to REIT asset tests. housing benefits for disabled (9) by redesignating paragraphs (2) through Sec. 3033. Conforming foreign currency revi- veterans. (4) as paragraphs (5) through (7), respec- Sec. 2606. Report on specially adapted hous- sions. tively; ing for disabled individuals. Subtitle B—Taxable REIT Subsidiaries (10) by inserting after paragraph (7), as re- Sec. 2607. Report on specially adapted hous- Sec. 3041. Conforming taxable REIT sub- designated, the following: ing assistance for individuals sidiary asset test. ‘‘(8) DEFAULT; IN DANGER OF DEFAULT.— who reside in housing owned by ‘‘(A) DEFAULT.—The term ‘default’ means, Subtitle C—Dealer Sales a family member on permanent with respect to a regulated entity, any adju- basis. Sec. 3051. Holding period under safe harbor. dication or other official determination by Sec. 2608. Definition of annual income for Sec. 3052. Determining value of sales under any court of competent jurisdiction, or the purposes of section 8 and other safe harbor. Agency, pursuant to which a conservator, re- public housing programs. Subtitle D—Health Care REITs ceiver, limited-life regulated entity, or legal Sec. 2609. Payment of transportation of bag- custodian is appointed for a regulated entity. Sec. 3061. Conformity for health care facili- gage and household effects for ‘‘(B) IN DANGER OF DEFAULT.—The term ‘in ties. members of the Armed Forces danger of default’ means a regulated entity who relocate due to foreclosure Subtitle E—Effective Dates with respect to which, in the opinion of the of leased housing. Sec. 3071. Effective dates. Agency—

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00071 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5842 CONGRESSIONAL RECORD — SENATE June 19, 2008 ‘‘(i) the regulated entity is not likely to be TITLE I—REFORM OF REGULATION OF citizens of the United States, have a dem- able to pay the obligations of the regulated ENTERPRISES onstrated understanding of financial man- entity in the normal course of business; or Subtitle A—Improvement of Safety and agement or oversight, and have a dem- ‘‘(ii) the regulated entity— Soundness Supervision onstrated understanding of mortgage securi- ties markets and housing finance. ‘‘(I) has incurred or is likely to incur losses SEC. 1101. ESTABLISHMENT OF THE FEDERAL that will deplete all or substantially all of HOUSING FINANCE AGENCY. ‘‘(2) FUNCTIONS.—The Deputy Director of its capital; and The Federal Housing Enterprises Financial the Division of Enterprise Regulation shall ‘‘(II) there is no reasonable prospect that Safety and Soundness Act of 1992 (12 U.S.C. have such functions, powers, and duties with the capital of the regulated entity will be re- 4501 et seq.) is amended by striking sections respect to the oversight of the enterprises as plenished.’’; 1311 and 1312 and inserting the following: the Director shall prescribe. ‘‘(d) DEPUTY DIRECTOR OF THE DIVISION OF (11) by inserting after paragraph (1) the fol- ‘‘SEC. 1311. ESTABLISHMENT OF THE FEDERAL FEDERAL HOME LOAN BANK REGULATION.— lowing: HOUSING FINANCE AGENCY. ‘‘(1) IN GENERAL.—The Agency shall have a ‘‘(2) AGENCY.—The term ‘Agency’ means ‘‘(a) ESTABLISHMENT.—There is established the Federal Housing Finance Agency estab- the Federal Housing Finance Agency, which Deputy Director of the Division of Federal lished under section 1311. shall be an independent agency of the Fed- Home Loan Bank Regulation, who shall be ‘‘(3) AUTHORIZING STATUTES.—The term ‘au- eral Government. designated by the Director from among indi- thorizing statutes’ means— ‘‘(b) GENERAL SUPERVISORY AND REGU- viduals who are citizens of the United ‘‘(A) the Federal National Mortgage Asso- LATORY AUTHORITY.— States, have a demonstrated understanding ciation Charter Act; ‘‘(1) IN GENERAL.—Each regulated entity of financial management or oversight, and ‘‘(B) the Federal Home Loan Mortgage Cor- shall, to the extent provided in this title, be have a demonstrated understanding of the poration Act; and subject to the supervision and regulation of Federal Home Loan Bank System and hous- ‘‘(C) the Federal Home Loan Bank Act. the Agency. ing finance. ‘‘(2) FUNCTIONS.—The Deputy Director of ‘‘(4) BOARD.—The term ‘Board’ means the ‘‘(2) AUTHORITY OVER FANNIE MAE, FREDDIE the Division of Federal Home Loan Bank Federal Housing Finance Oversight Board es- MAC, THE FEDERAL HOME LOAN BANKS, AND THE Regulation shall have such functions, pow- tablished under section 1313A.’’; OFFICE OF FINANCE.—The Director shall have (12) by inserting after paragraph (10), as re- general regulatory authority over each regu- ers, and duties with respect to the oversight designated by this section, the following: lated entity and the Office of Finance, and of the Federal Home Loan Banks as the Di- rector shall prescribe. ‘‘(11) ENTITY-AFFILIATED PARTY.—The term shall exercise such general regulatory au- ‘‘(e) DEPUTY DIRECTOR FOR HOUSING MIS- ‘entity-affiliated party’ means— thority, including such duties and authori- SION AND GOALS.— ‘‘(A) any director, officer, employee, or ties set forth under section 1313, to ensure ‘‘(1) IN GENERAL.—The Agency shall have a that the purposes of this Act, the author- controlling stockholder of, or agent for, a Deputy Director for Housing Mission and izing statutes, and any other applicable law regulated entity; Goals, who shall be designated by the Direc- are carried out. ‘‘(B) any shareholder, affiliate, consultant, tor from among individuals who are citizens ‘‘(c) SAVINGS PROVISION.—The authority of or joint venture partner of a regulated enti- of the United States, and have a dem- ty, and any other person, as determined by the Director to take actions under subtitles B and C shall not in any way limit the gen- onstrated understanding of the housing mar- the Director (by regulation or on a case-by- kets and housing finance. case basis) that participates in the conduct eral supervisory and regulatory authority granted to the Director under subsection (b). ‘‘(2) FUNCTIONS.—The Deputy Director for of the affairs of a regulated entity, provided Housing Mission and Goals shall have such that a member of a Federal Home Loan Bank ‘‘SEC. 1312. DIRECTOR. functions, powers, and duties with respect to shall not be deemed to have participated in ‘‘(a) ESTABLISHMENT OF POSITION.—There is the oversight of the housing mission and the affairs of that Bank solely by virtue of established the position of the Director of goals of the enterprises, and with respect to being a shareholder of, and obtaining ad- the Agency, who shall be the head of the oversight of the housing finance and commu- vances from, that Bank; Agency. nity and economic development mission of ‘‘(b) APPOINTMENT; TERM.— ‘‘(C) any independent contractor for a reg- the Federal Home Loan Banks, as the Direc- ‘‘(1) APPOINTMENT.—The Director shall be ulated entity (including any attorney, ap- tor shall prescribe. appointed by the President, by and with the praiser, or accountant), if— ‘‘(3) CONSIDERATIONS.—In exercising such advice and consent of the Senate, from ‘‘(i) the independent contractor knowingly functions, powers, and duties, the Deputy Di- among individuals who are citizens of the or recklessly participates in— rector for Housing Mission and Goals shall United States, have a demonstrated under- ‘‘(I) any violation of any law or regulation; consider the differences between the enter- standing of financial management or over- ‘‘(II) any breach of fiduciary duty; or prises and the Federal Home Loan Banks, in- sight, and have a demonstrated under- ‘‘(III) any unsafe or unsound practice; and cluding those described in section 1313(f). standing of capital markets, including the ‘‘(ii) such violation, breach, or practice ‘‘(f) ACTING DIRECTOR.—In the event of the caused, or is likely to cause, more than a mortgage securities markets and housing fi- death, resignation, sickness, or absence of minimal financial loss to, or a significant nance. the Director, the President shall designate adverse effect on, the regulated entity; ‘‘(2) TERM.—The Director shall be ap- either the Deputy Director of the Division of ‘‘(D) any not-for-profit corporation that re- pointed for a term of 5 years, unless removed Enterprise Regulation, the Deputy Director ceives its principal funding, on an ongoing before the end of such term for cause by the of the Division of Federal Home Loan Bank basis, from any regulated entity; and President. Regulation, or the Deputy Director for Hous- ‘‘(E) the Office of Finance.’’; ‘‘(3) VACANCY.—A vacancy in the position ing Mission and Goals, to serve as acting Di- (13) by inserting after paragraph (12), as re- of Director that occurs before the expiration rector until the return of the Director, or the of the term for which a Director was ap- designated by this section, the following: appointment of a successor pursuant to sub- pointed shall be filled in the manner estab- ‘‘(13) LIMITED-LIFE REGULATED ENTITY.— section (b). lished under paragraph (1), and the Director The term ‘limited-life regulated entity’ ‘‘(g) LIMITATIONS.—The Director and each appointed to fill such vacancy shall be ap- means an entity established by the Agency of the Deputy Directors may not— pointed only for the remainder of such term. under section 1367(i) with respect to a Fed- ‘‘(1) have any direct or indirect financial ‘‘(4) SERVICE AFTER END OF TERM.—An indi- eral Home Loan Bank in default or in danger interest in any regulated entity or entity-af- vidual may serve as the Director after the of default or with respect to an enterprise in filiated party; expiration of the term for which appointed default or in danger of default.’’; and ‘‘(2) hold any office, position, or employ- until a successor has been appointed. (14) by adding at the end the following: ment in any regulated entity or entity-affili- ‘‘(5) TRANSITIONAL PROVISION.—Notwith- ‘‘(25) VIOLATION.—The term ‘violation’ in- ated party; or standing paragraphs (1) and (2), during the cludes any action (alone or in combination ‘‘(3) have served as an executive officer or period beginning on the effective date of the with another or others) for or toward caus- director of any regulated entity or entity-af- Federal Housing Finance Regulatory Reform ing, bringing about, participating in, coun- filiated party at any time during the 3-year Act of 2008, and ending on the date on which seling, or aiding or abetting a violation.’’. period preceding the date of appointment or the Director is appointed and confirmed, the designation of such individual as Director or (b) REFERENCES IN THIS ACT.—As used in person serving as the Director of the Office Deputy Director, as applicable.’’. this Act, unless otherwise specified— of Federal Housing Enterprise Oversight of SEC. 1102. DUTIES AND AUTHORITIES OF THE DI- (1) the term ‘‘Agency’’ means the Federal the Department of Housing and Urban Devel- RECTOR. Housing Finance Agency; opment on that effective date shall act for (a) IN GENERAL.—Section 1313 of the Fed- (2) the term ‘‘Director’’ means the Director all purposes as, and with the full powers of, eral Housing Enterprises Financial Safety of the Agency; and the Director. and Soundness Act of 1992 (12 U.S.C. 4513) is (3) the terms ‘‘enterprise’’, ‘‘regulated enti- ‘‘(c) DEPUTY DIRECTOR OF THE DIVISION OF amended to read as follows: ty’’, and ‘‘authorizing statutes’’ have the ENTERPRISE REGULATION.— ‘‘SEC. 1313. DUTIES AND AUTHORITIES OF DIREC- same meanings as in section 1303 of the Fed- ‘‘(1) IN GENERAL.—The Agency shall have a TOR. eral Housing Enterprises Financial Safety Deputy Director of the Division of Enter- ‘‘(a) DUTIES.— and Soundness Act of 1992, as amended by prise Regulation, who shall be designated by ‘‘(1) PRINCIPAL DUTIES.—The principal du- this Act. the Director from among individuals who are ties of the Director shall be—

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00072 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5843 ‘‘(A) to oversee the prudential operations which shall advise the Director with respect (2) by striking ‘‘an enterprise’’ each place of each regulated entity; and to overall strategies and policies in carrying that term appears and inserting ‘‘a regulated ‘‘(B) to ensure that— out the duties of the Director under this entity’’; ‘‘(i) each regulated entity operates in a title. (3) by striking ‘‘the enterprise’’ and insert- safe and sound manner, including mainte- ‘‘(b) LIMITATIONS.—The Board may not ex- ing ‘‘the regulated entity’’; nance of adequate capital and internal con- ercise any executive authority, and the Di- (4) in subsection (a)— trols; rector may not delegate to the Board any of (A) by striking the subsection heading and ‘‘(ii) the operations and activities of each the functions, powers, or duties of the Direc- all that follows through ‘‘and operations’’ in regulated entity foster liquid, efficient, com- tor. paragraph (1) and inserting the following: ‘‘(c) COMPOSITION.—The Board shall be petitive, and resilient national housing fi- ‘‘(a) REGULAR AND SPECIAL REPORTS.— comprised of 4 members, of whom— nance markets (including activities relating ‘‘(1) REGULAR REPORTS.—The Director may ‘‘(1) 1 member shall be the Secretary of the to mortgages on housing for low- and mod- require, by general or specific orders, a regu- Treasury; erate-income families involving a reasonable lated entity to submit regular reports, in- ‘‘(2) 1 member shall be the Secretary of economic return that may be less than the Housing and Urban Development; cluding financial statements determined on return earned on other activities); ‘‘(3) 1 member shall be the Chairman of the a fair value basis, on the condition (includ- ‘‘(iii) each regulated entity complies with Securities and Exchange Commission; and ing financial condition), management, ac- this title and the rules, regulations, guide- ‘‘(4) 1 member shall be the Director, who tivities, or operations of the regulated enti- lines, and orders issued under this title and shall serve as the Chairperson of the Board. ty, as the Director considers appropriate’’; the authorizing statutes; ‘‘(d) MEETINGS.— and ‘‘(iv) each regulated entity carries out its ‘‘(1) IN GENERAL.—The Board shall meet (B) in paragraph (2)— statutory mission only through activities upon notice by the Director, but in no event (i) by inserting ‘‘, by general or specific or- that are authorized under and consistent shall the Board meet less frequently than ders,’’ after ‘‘may also require’’; and with this title and the authorizing statutes; once every 3 months. (ii) by striking ‘‘whenever’’ and inserting and ‘‘(2) SPECIAL MEETINGS.—Either the Sec- ‘‘on any of the topics specified in paragraph ‘‘(v) the activities of each regulated entity retary of the Treasury, the Secretary of (1) or any other relevant topics, if’’; and and the manner in which such regulated en- Housing and Urban Development, or the (5) by adding at the end the following: tity is operated are consistent with the pub- Chairman of the Securities and Exchange ‘‘(c) PENALTIES FOR FAILURE TO MAKE RE- lic interest. Commission may, upon giving written notice PORTS.— ‘‘(2) SCOPE OF AUTHORITY.—The authority to the Director, require a special meeting of ‘‘(1) VIOLATIONS.—It shall be a violation of of the Director shall include the authority— the Board. this section for any regulated entity— ‘‘(A) to review and, if warranted based on ‘‘(e) TESTIMONY.—On an annual basis, the ‘‘(A) to fail to make, transmit, or publish the principal duties described in paragraph Board shall testify before Congress regard- any report or obtain any information re- (1), reject any acquisition or transfer of a ing— quired by the Director under this section, controlling interest in a regulated entity; ‘‘(1) the safety and soundness of the regu- section 309(k) of the Federal National Mort- and lated entities; gage Association Charter Act, section 307(c) ‘‘(B) to exercise such incidental powers as ‘‘(2) any material deficiencies in the con- of the Federal Home Loan Mortgage Cor- may be necessary or appropriate to fulfill duct of the operations of the regulated enti- poration Act, or section 20 of the Federal the duties and responsibilities of the Direc- ties; Home Loan Bank Act, within the period of tor in the supervision and regulation of each ‘‘(3) the overall operational status of the time specified in such provision of law or regulated entity. regulated entities; otherwise by the Director; or ‘‘(b) DELEGATION OF AUTHORITY.—The Di- ‘‘(4) an evaluation of the performance of ‘‘(B) to submit or publish any false or mis- rector may delegate to officers and employ- the regulated entities in carrying out their leading report or information under this sec- ees of the Agency any of the functions, pow- respective missions; tion. ers, or duties of the Director, as the Director ‘‘(5) operations, resources, and performance ‘‘(2) PENALTIES.— considers appropriate. of the Agency; and ‘‘(A) FIRST TIER.— ‘‘(c) LITIGATION AUTHORITY.— ‘‘(6) such other matters relating to the ‘‘(i) IN GENERAL.—A violation described in ‘‘(1) IN GENERAL.—In enforcing any provi- Agency and its fulfillment of its mission, as paragraph (1) shall be subject to a penalty of sion of this title, any regulation or order the Board determines appropriate.’’. not more than $2,000 for each day during prescribed under this title, or any other pro- (b) ANNUAL REPORT OF THE DIRECTOR.—Sec- which such violation continues, in any case tion 1319B(a) of the Federal Housing Enter- vision of law, rule, regulation, or order, or in in which— prises Financial Safety and Soundness Act of any other action, suit, or proceeding to ‘‘(I) the subject regulated entity maintains 1992 (12 U.S.C. 4521(a)) is amended— which the Director is a party or in which the procedures reasonably adapted to avoid any (1) by striking ‘‘enterprise’’ each place that Director is interested, and in the administra- inadvertent error and the violation was un- term appears and inserting ‘‘regulated enti- tion of conservatorships and receiverships, intentional and a result of such an error; or ty’’; the Director may act in the Director’s own ‘‘(II) the violation was an inadvertent (2) by striking ‘‘enterprises’’ each place name and through the Director’s own attor- transmittal or publication of any report neys. that term appears and inserting ‘‘regulated entities’’; which was minimally late. ‘‘(2) SUBJECT TO SUIT.—Except as otherwise ‘‘(ii) BURDEN OF PROOF.—For purposes of provided by law, the Director shall be sub- (3) in paragraph (3), by striking ‘‘; and’’ and inserting a semicolon; this subparagraph, the regulated entity shall ject to suit (other than suits on claims for have the burden of proving that the error money damages) by a regulated entity with (4) in paragraph (4), by striking ‘‘1994.’’ and inserting ‘‘1994; and’’; and was inadvertent or that a report was inad- respect to any matter under this title or any vertently transmitted or published late. other applicable provision of law, rule, order, (5) by adding at the end the following: ‘‘(5) the assessment of the Board or any of ‘‘(B) SECOND TIER.—A violation described or regulation under this title, in the United in paragraph (1) shall be subject to a penalty States district court for the judicial district its members with respect to— ‘‘(A) the safety and soundness of the regu- of not more than $20,000 for each day during in which the regulated entity has its prin- which such violation continues or such false cipal place of business, or in the United lated entities; ‘‘(B) any material deficiencies in the con- or misleading information is not corrected, States District Court for the District of Co- duct of the operations of the regulated enti- in any case that is not addressed in subpara- lumbia, and the Director may be served with ties; graph (A) or (C). process in the manner prescribed by the Fed- ‘‘(C) the overall operational status of the ‘‘(C) THIRD TIER.—A violation described in eral Rules of Civil Procedure.’’. regulated entities; and paragraph (1) shall be subject to a penalty of (b) INDEPENDENCE IN CONGRESSIONAL TESTI- ‘‘(D) an evaluation of the performance of not more than $1,000,000 per day for each day MONY AND RECOMMENDATIONS.—Section 111 of the regulated entities in carrying out their during which such violation continues or Public Law 93–495 (12 U.S.C. 250) is amended respective missions; such false or misleading information is not by striking ‘‘the Federal Housing Finance ‘‘(6) operations, resources, and performance corrected, in any case in which the subject Board’’ and inserting ‘‘the Director of the of the Agency; and regulated entity committed such violation Federal Housing Finance Agency’’. ‘‘(7) such other matters relating to the knowingly or with reckless disregard for the SEC. 1103. FEDERAL HOUSING FINANCE OVER- Agency and the fulfillment of its mission.’’. accuracy of any such information or report. SIGHT BOARD. SEC. 1104. AUTHORITY TO REQUIRE REPORTS BY ‘‘(3) ASSESSMENTS.—Any penalty imposed (a) IN GENERAL.—The Federal Housing En- REGULATED ENTITIES. under this subsection shall be in lieu of a terprises Financial Safety and Soundness (a) IN GENERAL.—Section 1314 of the Fed- penalty under section 1376, but shall be as- Act of 1992 (12 U.S.C. 4501 et seq.) is amended eral Housing Enterprises Financial Safety sessed and collected by the Director in the by inserting after section 1313 the following: and Soundness Act of 1992 (12 U.S.C. 4514) is manner provided in section 1376 for penalties ‘‘SEC. 1313A. FEDERAL HOUSING FINANCE OVER- amended— imposed under that section, and any such as- SIGHT BOARD. (1) in the section heading, by striking ‘‘EN- sessment (including the determination of the ‘‘(a) IN GENERAL.—There is established the TERPRISES’’ and inserting ‘‘REGULATED amount of the penalty) shall be otherwise Federal Housing Finance Oversight Board, ENTITIES’’; subject to the provisions of section 1376.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00073 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5844 CONGRESSIONAL RECORD — SENATE June 19, 2008

‘‘(4) HEARING.—A regulated entity against nancial Safety and Soundness Act of 1992 (12 creased costs of regulation of a regulated en- which a penalty is assessed under this sec- U.S.C. 4517) is amended by adding at the end tity that is not classified (for purposes of tion shall be afforded an agency hearing if the following: subtitle B) as adequately capitalized or as the regulated entity submits a request for a ‘‘(i) OMBUDSMAN.—The Director shall es- the result of supervisory or enforcement ac- hearing not later than 20 days after the date tablish, by regulation, an Office of the Om- tivities under this Act for a regulated entity, of the issuance of the notice of assessment. budsman within the Agency, which shall be the amount available from any semiannual Section 1374 shall apply to any such pro- responsible for considering complaints and payment made by such regulated entity pur- ceedings.’’. appeals, from any regulated entity and any suant to subsection (b) is insufficient to (b) CONFORMING AMENDMENT.—The Federal person that has a business relationship with cover the costs of the Agency with respect to Housing Enterprises Financial Safety and a regulated entity, regarding any matter re- such entity, the Director may make and col- Soundness Act of 1992 (12 U.S.C. 4501 et seq.) lating to the regulation and supervision of lect from such regulated entity an imme- is amended by striking sections 1327 and 1328. such regulated entity by the Agency. The diate assessment to cover the amount of SEC. 1105. EXAMINERS AND ACCOUNTANTS; AU- regulation issued by the Director under this such deficiency for the semiannual period. If, THORITY TO CONTRACT FOR RE- subsection shall specify the authority and at the end of any semiannual period during VIEWS OF REGULATED ENTITIES; which such an assessment is made, any OMBUDSMAN. duties of the Office of the Ombudsman.’’. SEC. 1106. ASSESSMENTS. amount remains from such assessment, such (a) IN GENERAL.—Section 1317 of the Fed- remaining amount shall be deducted from eral Housing Enterprises Financial Safety Section 1316 of the Federal Housing Enter- the assessment for such regulated entity for and Soundness Act of 1992 (12 U.S.C. 4517) is prises Financial Safety and Soundness Act of the following semiannual period.’’; amended— 1992 (12 U.S.C. 4516) is amended— (4) in subsection (d), by striking ‘‘If’’ and (1) in subsection (a), by striking ‘‘enter- (1) by striking subsection (a) and inserting inserting ‘‘Except with respect to amounts prise’’ each place that term appears and in- the following: collected pursuant to subsection (a)(3), if’’; serting ‘‘regulated entity’’; ‘‘(a) ANNUAL ASSESSMENTS.—The Director and (2) in subsection (b)— shall establish and collect from the regu- (5) by striking subsections (e) through (g) lated entities annual assessments in an (A) by inserting ‘‘of a regulated entity’’ and inserting the following: after ‘‘under this section’’; and amount not exceeding the amount sufficient ‘‘(e) WORKING CAPITAL FUND.—At the end of (B) by striking ‘‘to determine the condi- to provide for reasonable costs (including ad- each year for which an assessment under this tion of an enterprise for the purpose of en- ministrative costs) and expenses of the Agen- section is made, the Director shall remit to suring its financial safety and soundness’’ cy, including— each regulated entity any amount of assess- and inserting ‘‘or appropriate’’; ‘‘(1) the expenses of any examinations ment collected from such regulated entity (3) in subsection (c), in the second sen- under section 1317 of this Act and under sec- that is attributable to subsection (a)(3) and tence, by inserting before the period ‘‘to con- tion 20 of the Federal Home Loan Bank Act; is in excess of the amount the Director duct examinations under this section’’; ‘‘(2) the expenses of obtaining any reviews deems necessary to maintain a working cap- (4) by redesignating subsections (d) and credit assessments under section 1319; ital fund. through (f) as subsections (e) through (g), re- ‘‘(3) such amounts in excess of actual ex- ‘‘(f) TREATMENT OF ASSESSMENTS.— spectively; and penses for any given year as deemed nec- ‘‘(1) DEPOSIT.—Amounts received by the (5) by inserting after subsection (c) the fol- essary by the Director to maintain a work- Director from assessments under this section lowing: ing capital fund in accordance with sub- may be deposited by the Director in the ‘‘(d) INSPECTOR GENERAL.—There shall be section (e); and manner provided in section 5234 of the Re- within the Agency an Inspector General, who ‘‘(4) the windup of the affairs of the Office vised Statutes of the United States (12 U.S.C. shall be appointed in accordance with sec- of Federal Housing Enterprise Oversight and 192) for monies deposited by the Comptroller tion 3(a) of the Inspector General Act of the Federal Housing Finance Board under of the Currency. 1978.’’. title III of the Federal Housing Finance Reg- ‘‘(2) NOT GOVERNMENT FUNDS.—The (b) DIRECT HIRE AUTHORITY TO HIRE AC- ulatory Reform Act of 2008.’’; amounts received by the Director from any COUNTANTS, ECONOMISTS, AND EXAMINERS.— (2) in subsection (b)— assessment under this section shall not be Section 1317 of the Federal Housing Enter- (A) by realigning the margins of paragraph construed to be Government or public funds prises Financial Safety and Soundness Act of (2) two ems from the left, so as to align the or appropriated money. 1992 (12 U.S.C. 4517) is amended by adding at left margin of such paragraph with the left ‘‘(3) NO APPORTIONMENT OF FUNDS.—Not- the end the following: margins of paragraph (1); withstanding any other provision of law, the ‘‘(h) APPOINTMENT OF ACCOUNTANTS, ECONO- (B) by redesignating paragraphs (2) and (3) amounts received by the Director from any MISTS, AND EXAMINERS.— as paragraphs (3) and (4), respectively; and assessment under this section shall not be ‘‘(1) APPLICABILITY.—This section shall (C) by inserting after paragraph (1) the fol- subject to apportionment for the purpose of apply with respect to any position of exam- lowing: chapter 15 of title 31, United States Code, or iner, accountant, economist, and specialist ‘‘(2) SEPARATE TREATMENT OF FEDERAL under any other authority. in financial markets and in technology at HOME LOAN BANK AND ENTERPRISE ASSESS- ‘‘(4) USE OF FUNDS.—The Director may use the Agency, with respect to supervision and MENTS.—Assessments collected from the en- any amounts received by the Director from regulation of the regulated entities, that is terprises shall not exceed the amounts suffi- assessments under this section for compensa- in the competitive service. cient to provide for the costs and expenses tion of the Director and other employees of ‘‘(2) APPOINTMENT AUTHORITY.—The Direc- described in subsection (a) relating to the the Agency and for all other expenses of the tor may appoint candidates to any position enterprises. Assessments collected from the Director and the Agency. described in paragraph (1)— Federal Home Loan Banks shall not exceed ‘‘(5) AVAILABILITY OF OVERSIGHT FUND ‘‘(A) in accordance with the statutes, rules, the amounts sufficient to provide for the AMOUNTS.—Notwithstanding any other provi- and regulations governing appointments in costs and expenses described in subsection sion of law, any amounts remaining in the the excepted service; and (a) relating to the Federal Home Loan Federal Housing Enterprises Oversight Fund ‘‘(B) notwithstanding any statutes, rules, Banks.’’; established under this section (as in effect and regulations governing appointments in (3) by striking subsection (c) and inserting before the effective date of the Federal Hous- the competitive service.’’. the following: ing Finance Regulatory Reform Act of 2008, (c) AMENDMENTS TO INSPECTOR GENERAL ACT.—Section 11 of the Inspector General ‘‘(c) INCREASED COSTS OF REGULATION.— and any amounts remaining from assess- Act of 1978 (5 U.S.C. App.) is amended— ‘‘(1) INCREASE FOR INADEQUATE CAPITALIZA- ments on the Federal Home Loan Banks pur- (1) in paragraph (1), by inserting ‘‘; the Di- TION.—The semiannual payments made pur- suant to section 18(b) of the Federal Home rector of the Federal Housing Finance Agen- suant to subsection (b) by any regulated en- Loan Bank Act (12 U.S.C. 1438(b)), shall, upon cy’’ after ‘‘Social Security Administration’’; tity that is not classified (for purposes of such effective date, be treated for purposes of and subtitle B) as adequately capitalized may be this subsection as amounts received from as- (2) in paragraph (2), by inserting ‘‘, the increased, as necessary, in the discretion of sessments under this section. Federal Housing Finance Agency’’ after ‘‘So- the Director to pay additional estimated ‘‘(6) TREASURY INVESTMENTS.— cial Security Administration’’. costs of regulation of the regulated entity. ‘‘(A) AUTHORITY.—The Director may re- (d) AUTHORITY TO CONTRACT FOR REVIEWS ‘‘(2) ADJUSTMENT FOR ENFORCEMENT ACTIVI- quest the Secretary of the Treasury to invest OF REGULATED ENTITIES.—Section 1319 of the TIES.—The Director may adjust the amounts such portions of amounts received by the Di- Federal Housing Enterprises Financial Safe- of any semiannual payments for an assess- rector from assessments paid under this sec- ty and Soundness Act of 1992 (12 U.S.C. 4519) ment under subsection (a) that are to be paid tion that, in the Director’s discretion, are is amended— pursuant to subsection (b) by a regulated en- not required to meet the current working (1) in the section heading, by striking ‘‘EN- tity, as necessary in the discretion of the Di- needs of the Agency. TERPRISES BY RATING ORGANIZATION’’ rector, to ensure that the costs of enforce- ‘‘(B) GOVERNMENT OBLIGATIONS.—Pursuant and inserting ‘‘REGULATED ENTITIES’’; and ment activities under this Act for a regu- to a request under subparagraph (A), the (2) by striking ‘‘enterprises’’ and inserting lated entity are borne only by such regulated Secretary of the Treasury shall invest such ‘‘regulated entities’’. entity. amounts in Government obligations guaran- (e) OFFICE OF THE OMBUDSMAN.—Section ‘‘(3) ADDITIONAL ASSESSMENT FOR DEFI- teed as to principal and interest by the 1317 of the Federal Housing Enterprises Fi- CIENCIES.—If at any time, as a result of in- United States with maturities suitable to

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00074 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5845

the needs of the Agency and bearing interest ‘‘(2) REPORT.—The Comptroller General agement and the board of directors and of at a rate determined by the Secretary of the shall submit to the Congress a report of each processes and policies to identify, measure, Treasury taking into consideration current annual audit conducted under this sub- monitor, and control material risks, includ- market yields on outstanding marketable section. The report to the Congress shall set ing reputational risks, and for adequate, obligations of the United States of com- forth the scope of the audit and shall include well-tested business resumption plans for all parable maturity. the statement of assets and liabilities and major systems with remote site facilities to ‘‘(g) BUDGET AND FINANCIAL MANAGE- surplus or deficit, the statement of income protect against disruptive events; MENT.— and expenses, the statement of sources and ‘‘(9) management of credit and ‘‘(1) FINANCIAL OPERATING PLANS AND FORE- application of funds, and such comments and counterparty risk, including systems to CASTS.—The Director shall provide to the Di- information as may be deemed necessary to identify concentrations of credit risk and rector of the Office of Management and inform Congress of the financial operations prudential limits to restrict exposure of the Budget copies of the Director’s financial op- and condition of the Agency, together with regulated entity to a single counterparty or erating plans and forecasts, as prepared by such recommendations with respect thereto groups of related counterparties; the Director in the ordinary course of the as the Comptroller General may deem advis- ‘‘(10) maintenance of adequate records, in Agency’s operations, and copies of the quar- able. A copy of each report shall be furnished accordance with consistent accounting poli- terly reports of the Agency’s financial condi- to the President and to the Agency at the cies and practices that enable the Director tion and results of operations, as prepared by time submitted to the Congress. to evaluate the financial condition of the the Director in the ordinary course of the ‘‘(3) ASSISTANCE AND COSTS.—For the pur- regulated entity; and Agency’s operations. pose of conducting an audit under this sub- ‘‘(11) such other operational and manage- ‘‘(2) FINANCIAL STATEMENTS.—The Agency section, the Comptroller General may, in the ment standards as the Director determines shall prepare annually a statement of— discretion of the Comptroller General, em- to be appropriate. ploy by contract, without regard to section ‘‘(A) assets and liabilities and surplus or ‘‘(b) FAILURE TO MEET STANDARDS.— 3709 of the Revised Statutes of the United deficit; ‘‘(1) PLAN REQUIREMENT.— States (41 U.S.C. 5), professional services of ‘‘(B) income and expenses; and ‘‘(A) IN GENERAL.—If the Director deter- firms and organizations of certified public ‘‘(C) sources and application of funds. mines that a regulated entity fails to meet accountants for temporary periods or for ‘‘(3) FINANCIAL MANAGEMENT SYSTEMS.—The any standard established under subsection special purposes. Upon the request of the Agency shall implement and maintain finan- (a)— Comptroller General, the Director of the cial management systems that— ‘‘(i) if such standard is established by regu- Agency shall transfer to the Government Ac- ‘‘(A) comply substantially with Federal fi- lation, the Director shall require the regu- countability Office from funds available, the nancial management systems requirements lated entity to submit an acceptable plan to amount requested by the Comptroller Gen- and applicable Federal accounting standards; the Director within the time allowed under eral to cover the full costs of any audit and and subparagraph (C); and report conducted by the Comptroller Gen- ‘‘(B) use a general ledger system that ac- ‘‘(ii) if such standard is established by eral. The Comptroller General shall credit counts for activity at the transaction level. guideline, the Director may require the regu- funds transferred to the account established ‘‘(4) ASSERTION OF INTERNAL CONTROLS.— lated entity to submit a plan described in for salaries and expenses of the Government The Director shall provide to the Comp- clause (i). Accountability Office, and such amount shall troller General of the United States an asser- ‘‘(B) CONTENTS.—Any plan required under be available upon receipt and without fiscal tion as to the effectiveness of the internal subparagraph (A) shall specify the actions year limitation to cover the full costs of the controls that apply to financial reporting by that the regulated entity will take to correct audit and report.’’. the Agency, using the standards established the deficiency. If the regulated entity is in section 3512(c) of title 31, United States SEC. 1107. REGULATIONS AND ORDERS. undercapitalized, the plan may be a part of Code. Section 1319G of the Federal Housing En- the capital restoration plan for the regulated ‘‘(5) RULE OF CONSTRUCTION.—This sub- terprises Financial Safety and Soundness entity under section 1369C. Act of 1992 (12 U.S.C. 4526) is amended— section may not be construed as implying ‘‘(C) DEADLINES FOR SUBMISSION AND RE- (1) by striking subsection (a) and inserting any obligation on the part of the Director to VIEW.—The Director shall by regulation es- the following: consult with or obtain the consent or ap- tablish deadlines that— proval of the Director of the Office of Man- ‘‘(a) AUTHORITY.—The Director shall issue any regulations, guidelines, or orders nec- ‘‘(i) provide the regulated entities with agement and Budget with respect to any re- essary to carry out the duties of the Director reasonable time to submit plans required port, plan, forecast, or other information re- under this title or the authorizing statutes, under subparagraph (A), and generally re- ferred to in paragraph (1) or any jurisdiction and to ensure that the purposes of this title quire a regulated entity to submit a plan not or oversight over the affairs or operations of and the authorizing statutes are accom- later than 30 days after the Director deter- the Agency. plished.’’; and mines that the entity fails to meet any ‘‘(h) AUDIT OF AGENCY.— (2) by striking subsection (c). standard established under subsection (a); ‘‘(1) IN GENERAL.—The Comptroller General SEC. 1108. PRUDENTIAL MANAGEMENT AND OP- and shall annually audit the financial trans- ERATIONS STANDARDS. ‘‘(ii) require the Director to act on plans actions of the Agency in accordance with the The Federal Housing Enterprises Financial expeditiously, and generally not later than United States generally accepted govern- Safety and Soundness Act of 1992 (12 U.S.C. 30 days after the plan is submitted. ment auditing standards as may be pre- 4501 et seq.) is amended by inserting after ‘‘(2) REQUIRED ORDER UPON FAILURE TO SUB- scribed by the Comptroller General of the section 1313A, as added by this Act, the fol- MIT OR IMPLEMENT PLAN.—If a regulated enti- United States. The audit shall be conducted lowing new section: ty fails to submit an acceptable plan within at the place or places where accounts of the ‘‘SEC. 1313B. PRUDENTIAL MANAGEMENT AND the time allowed under paragraph (1)(C), or Agency are normally kept. The representa- OPERATIONS STANDARDS. fails in any material respect to implement a tives of the Government Accountability Of- ‘‘(a) STANDARDS.—The Director shall estab- plan accepted by the Director, the following fice shall have access to the personnel and to lish standards, by regulation or guideline, shall apply: all books, accounts, documents, papers, for each regulated entity relating to— ‘‘(A) REQUIRED CORRECTION OF DEFI- records (including electronic records), re- ‘‘(1) adequacy of internal controls and in- CIENCY.—The Director shall, by order, re- ports, files, and all other papers, automated formation systems taking into account the quire the regulated entity to correct the de- data, things, or property belonging to or nature and scale of business operations; ficiency. under the control of or used or employed by ‘‘(2) independence and adequacy of internal ‘‘(B) OTHER AUTHORITY.—The Director may, the Agency pertaining to its financial trans- audit systems; by order, take one or more of the following actions and necessary to facilitate the audit, ‘‘(3) management of interest rate risk ex- actions until the deficiency is corrected: and such representatives shall be afforded posure; ‘‘(i) Prohibit the regulated entity from per- full facilities for verifying transactions with ‘‘(4) management of market risk, including mitting its average total assets (as such the balances or securities held by deposi- standards that provide for systems that ac- term is defined in section 1316(b)) during any tories, fiscal agents, and custodians. All such curately measure, monitor, and control mar- calendar quarter to exceed its average total books, accounts, documents, records, re- ket risks and, as warranted, that establish assets during the preceding calendar quarter, ports, files, papers, and property of the Agen- limitations on market risk; or restrict the rate at which the average cy shall remain in possession and custody of ‘‘(5) adequacy and maintenance of liquidity total assets of the entity may increase from the Agency. The Comptroller General may and reserves; one calendar quarter to another. obtain and duplicate any such books, ac- ‘‘(6) management of asset and investment ‘‘(ii) Require the regulated entity— counts, documents, records, working papers, portfolio growth; ‘‘(I) in the case of an enterprise, to in- automated data and files, or other informa- ‘‘(7) investments and acquisitions of assets crease its ratio of core capital to assets. tion relevant to such audit without cost to by a regulated entity, to ensure that they ‘‘(II) in the case of a Federal Home Loan the Comptroller General and the Comp- are consistent with the purposes of this title Bank, to increase its ratio of total capital troller General’s right of access to such in- and the authorizing statutes; (as such term is defined in section 6(a)(5) of formation shall be enforceable pursuant to ‘‘(8) overall risk management processes, in- the Federal Home Loan Bank Act (12 U.S.C. section 716(c) of title 31, United States Code. cluding adequacy of oversight by senior man- 1426(a)(5)) to assets.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00075 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5846 CONGRESSIONAL RECORD — SENATE June 19, 2008

‘‘(iii) Require the regulated entity to take ‘‘(1) ENTERPRISES.—The Director shall, by ‘‘(B) the standards and procedures that the any other action that the Director deter- regulation, establish risk-based capital re- Director will use to make the determination mines will better carry out the purposes of quirements for the enterprises to ensure that referred to in paragraph (2); and this section than any of the actions de- the enterprises operate in a safe and sound ‘‘(C) a reasonable time frame for periodic scribed in this subparagraph. manner, maintaining sufficient capital and review of any temporary increase in min- ‘‘(3) MANDATORY RESTRICTIONS.—In com- reserves to support the risks that arise in imum capital for the purpose of making the plying with paragraph (2), the Director shall the operations and management of the enter- determination referred to in paragraph (2). take one or more of the actions described in prises. ‘‘(e) AUTHORITY TO ESTABLISH ADDITIONAL clauses (i) through (iii) of paragraph (2)(B) ‘‘(2) FEDERAL HOME LOAN BANKS.—The Di- CAPITAL AND RESERVE REQUIREMENTS FOR if— rector shall establish risk-based capital PARTICULAR PURPOSES.—The Director may, ‘‘(A) the Director determines that the reg- standards under section 6 of the Federal at any time by order or regulation, establish ulated entity fails to meet any standard pre- Home Loan Bank Act for the Federal Home such capital or reserve requirements with re- scribed under subsection (a); Loan Banks. spect to any product or activity of a regu- ‘‘(B) the regulated entity has not corrected ‘‘(b) NO LIMITATION.—Nothing in this sec- lated entity, as the Director considers appro- the deficiency; and tion shall limit the authority of the Director priate to ensure that the regulated entity ‘‘(C) during the 18-month period before the to require other reports or undertakings, or operates in a safe and sound manner, with date on which the regulated entity first take other action, in furtherance of the re- sufficient capital and reserves to support the failed to meet the standard, the entity un- sponsibilities of the Director under this risks that arise in the operations and man- derwent extraordinary growth, as defined by Act.’’. agement of the regulated entity. (b) FEDERAL HOME LOAN BANKS RISK-BASED the Director. ‘‘(f) PERIODIC REVIEW.—The Director shall CAPITAL.—Section 6(a)(3) of the Federal ‘‘(c) OTHER ENFORCEMENT AUTHORITY NOT periodically review the amount of core cap- Home Loan Bank Act (12 U.S.C. 1426(a)(3)) is AFFECTED.—The authority of the Director ital maintained by the enterprises, the under this section is in addition to any other amended— amount of capital retained by the Federal authority of the Director.’’. (1) by striking subparagraph (A) and in- Home Loan Banks, and the minimum capital serting the following: SEC. 1109. REVIEW OF AND AUTHORITY OVER EN- levels established for such regulated entities ‘‘(A) RISK-BASED CAPITAL STANDARDS.—The TERPRISE ASSETS AND LIABILITIES. pursuant to this section.’’. Director shall, by regulation, establish risk- (a) IN GENERAL.—Subtitle B of the Federal SEC. 1112. REGISTRATION UNDER THE SECURI- Housing Enterprises Financial Safety and based capital standards for the Federal Home TIES LAWS. Soundness Act of 1992 (12 U.S.C. 4611 et seq.) Loan Banks to ensure that the Federal Home The Securities Exchange Act of 1934 (15 is amended— Loan Banks operate in a safe and sound man- U.S.C. 78a et seq.) is amended by adding at (1) by striking the subtitle designation and ner, with sufficient permanent capital and the end the following: heading and inserting the following: reserves to support the risks that arise in the operations and management of the Fed- ‘‘SEC. 38. FEDERAL NATIONAL MORTGAGE ASSO- ‘‘Subtitle B—Required Capital Levels for Reg- CIATION, FEDERAL HOME LOAN eral Home Loans Banks.’’; and MORTGAGE CORPORATION, FED- ulated Entities, Special Enforcement Pow- (2) in subparagraph (B), by striking ers, and Reviews of Assets and Liabilities’’; ERAL HOME LOAN BANKS. ‘‘(A)(ii)’’ and inserting ‘‘(A)’’. ‘‘(a) FEDERAL NATIONAL MORTGAGE ASSO- and SEC. 1111. MINIMUM CAPITAL LEVELS. CIATION AND FEDERAL HOME LOAN MORTGAGE (2) by adding at the end the following new Section 1362 of the Federal Housing Enter- CORPORATION.—No class of equity securities section: prises Financial Safety and Soundness Act of of the Federal National Mortgage Associa- ‘‘SEC. 1369E. REVIEWS OF ENTERPRISE ASSETS 1992 (12 U.S.C. 4612) is amended— tion or the Federal Home Loan Mortgage AND LIABILITIES. (1) in subsection (a), by striking ‘‘IN GEN- Corporation shall be treated as an exempted ‘‘(a) IN GENERAL.—The Director shall, by ERAL’’ and inserting ‘‘ENTERPRISES’’; and security for purposes of section 12, 13, 14, or regulation, establish criteria governing the (2) by striking subsection (b) and inserting 16. portfolio holdings of the enterprises, to en- the following: ‘‘(b) FEDERAL HOME LOAN BANKS.— sure that the holdings are backed by suffi- ‘‘(b) FEDERAL HOME LOAN BANKS.—For pur- ‘‘(1) REGISTRATION.—Each Federal Home cient capital and consistent with the mission poses of this subtitle, the minimum capital Loan Bank shall register a class of its com- and the safe and sound operations of the en- level for each Federal Home Loan Bank shall mon stock under section 12(g), not later than terprises. In establishing such criteria, the be the minimum capital required to be main- 120 days after the date of enactment of the Director shall consider the ability of the en- tained to comply with the leverage require- Federal Housing Finance Regulatory Reform terprises to provide a liquid secondary mar- ment for the bank established under section Act of 2008, and shall thereafter maintain ket through securitization activities, the 6(a)(2) of the Federal Home Loan Bank Act such registration and be treated for purposes portfolio holdings in relation to the overall (12 U.S.C. 1426(a)(2)). of this title as an ‘issuer’, the securities of mortgage market, and adherence to the ‘‘(c) ESTABLISHMENT OF REVISED MINIMUM which are required to be registered under standards specified in section 1313B. CAPITAL LEVELS.—Notwithstanding sub- section 12, regardless of the number of mem- ‘‘(b) TEMPORARY ADJUSTMENTS.—The Direc- sections (a) and (b) and notwithstanding the tor may, by order, make temporary adjust- capital classifications of the regulated enti- bers holding such stock at any given time. ments to the established standards for an en- ties, the Director may, by regulations issued ‘‘(2) STANDARDS RELATING TO AUDIT COMMIT- terprise or both enterprises, such as during under section 1319G, establish a minimum TEES.—Each Federal Home Loan Bank shall times of economic distress or market disrup- capital level for the enterprises, for the Fed- comply with the rules issued by the Commis- tion. eral Home Loan Banks, or for both the enter- sion under section 10A(m). ‘‘(c) AUTHORITY TO REQUIRE DISPOSITION OR prises and the banks, that is higher than the ‘‘(c) DEFINITIONS.—For purposes of this sec- ACQUISITION.—The Director shall monitor level specified in subsection (a) for the enter- tion, the following definitions shall apply: the portfolio of each enterprise. Pursuant to prises or the level specified in subsection (b) ‘‘(1) FEDERAL HOME LOAN BANK; MEMBER.— subsection (a) and notwithstanding the cap- for the Federal Home Loan Banks, to the ex- The terms ‘Federal Home Loan Bank’ and ital classifications of the enterprises, the Di- tent needed to ensure that the regulated en- ‘member’, have the same meanings as in sec- rector may, by order, require an enterprise, tities operate in a safe and sound manner. tion 2 of the Federal Home Loan Bank Act. under such terms and conditions as the Di- ‘‘(d) AUTHORITY TO REQUIRE TEMPORARY IN- ‘‘(2) FEDERAL NATIONAL MORTGAGE ASSOCIA- rector determines to be appropriate, to dis- CREASE.— TION.—The term ‘Federal National Mortgage pose of or acquire any asset, if the Director ‘‘(1) IN GENERAL.—Notwithstanding sub- Association’ means the corporation created determines that such action is consistent sections (a) and (b) and any minimum cap- by the Federal National Mortgage Associa- with the purposes of this Act or any of the ital level established pursuant to subsection tion Charter Act. authorizing statutes.’’. (c), the Director may, by order, increase the ‘‘(3) FEDERAL HOME LOAN MORTGAGE COR- (b) REGULATIONS.—Not later than the expi- minimum capital level for a regulated entity PORATION.—The term ‘Federal Home Loan ration of the 180-day period beginning on the on a temporary basis, when the Director de- Mortgage Corporation’ means the corpora- effective date of this Act, the Director shall termines that such an increase is necessary tion created by the Federal Home Loan issue regulations pursuant to section and consistent with the prudential regula- Mortgage Corporation Act.’’. 1369E(a) of the Federal Housing Enterprises tion and the safe and sound operations of a SEC. 1113. PROHIBITION AND WITHHOLDING OF Financial Safety and Soundness Act of 1992 regulated entity. EXECUTIVE COMPENSATION. (as added by subsection (a) of this section) ‘‘(2) RESCISSION.—The Director shall re- (a) IN GENERAL.—Section 1318 of the Fed- establishing the portfolio holdings standards scind any temporary minimum capital level eral Housing Enterprises Financial Safety under such section. established under paragraph (1) when the Di- and Soundness Act of 1992 (12 U.S.C. 4518) is SEC. 1110. RISK-BASED CAPITAL REQUIREMENTS. rector determines that the circumstances or amended— (a) IN GENERAL.—Section 1361 of the Fed- facts no longer justify the temporary min- (1) in the section heading, by striking ‘‘OF eral Housing Enterprises Financial Safety imum capital level. EXCESSIVE’’ and inserting ‘‘AND WITH- and Soundness Act of 1992 (12 U.S.C. 4611) is ‘‘(3) REGULATIONS REQUIRED.—The Director HOLDING OF EXECUTIVE’’; amended to read as follows: shall issue regulations establishing— (2) by redesignating subsection (b) as sub- ‘‘SEC. 1361. RISK-BASED CAPITAL LEVELS FOR ‘‘(A) standards for the imposition of a tem- section (d); and REGULATED ENTITIES. porary increase in minimum capital under (3) by inserting after subsection (a) the fol- ‘‘(a) IN GENERAL.— paragraph (1); lowing:

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00076 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5847

‘‘(b) FACTORS.—In making any determina- mitted any fraudulent act or omission, ‘‘(5) OTHER DEFINITIONS.—For purposes of tion under subsection (a), the Director may breach of trust or fiduciary duty, or insider this subsection, the following definitions take into consideration any factors the Di- abuse with regard to the regulated entity shall apply: rector considers relevant, including any that has had a material effect on the finan- ‘‘(A) INDEMNIFICATION PAYMENT.—Subject wrongdoing on the part of the executive offi- cial condition of the regulated entity; to paragraph (6), the term ‘indemnification cer, and such wrongdoing shall include any ‘‘(B) whether there is a reasonable basis to payment’ means any payment (or any agree- fraudulent act or omission, breach of trust believe that the affiliated party is substan- ment to make any payment) by any regu- or fiduciary duty, violation of law, rule, reg- tially responsible for the insolvency of the lated entity for the benefit of any person ulation, order, or written agreement, and in- regulated entity, the appointment of a con- who is or was an affiliated party, to pay or sider abuse with respect to the regulated en- servator or receiver for the regulated entity, reimburse such person for any liability or tity. The approval of an agreement or con- or the troubled condition of the regulated legal expense with regard to any administra- tract pursuant to section 309(d)(3)(B) of the entity (as defined in regulations prescribed tive proceeding or civil action instituted by Federal National Mortgage Association by the Director); the Agency which results in a final order Charter Act (12 U.S.C. 1723a(d)(3)(B)) or sec- ‘‘(C) whether there is a reasonable basis to under which such person— tion 303(h)(2) of the Federal Home Loan believe that the affiliated party has materi- ‘‘(i) is assessed a civil money penalty; Mortgage Corporation Act (12 U.S.C. ally violated any applicable provision of Fed- ‘‘(ii) is removed or prohibited from partici- 1452(h)(2)) shall not preclude the Director eral or State law or regulation that has had pating in conduct of the affairs of the regu- from making any subsequent determination a material effect on the financial condition lated entity; or under subsection (a). of the regulated entity; ‘‘(iii) is required to take any affirmative ‘‘(c) WITHHOLDING OF COMPENSATION.—In ‘‘(D) whether the affiliated party was in a action to correct certain conditions result- carrying out subsection (a), the Director position of managerial or fiduciary responsi- ing from violations or practices, by order of may require a regulated entity to withhold bility; and the Director. any payment, transfer, or disbursement of ‘‘(E) the length of time that the party was ‘‘(B) LIABILITY OR LEGAL EXPENSE.—The compensation to an executive officer, or to affiliated with the regulated entity, and the term ‘liability or legal expense’ means— place such compensation in an escrow ac- degree to which— ‘‘(i) any legal or other professional expense count, during the review of the reasonable- ‘‘(i) the payment reasonably reflects com- incurred in connection with any claim, pro- ness and comparability of compensation.’’. pensation earned over the period of employ- ceeding, or action; (b) CONFORMING AMENDMENTS.— ment; and ‘‘(ii) the amount of, and any cost incurred (1) FANNIE MAE.—Section 309(d) of the Fed- ‘‘(ii) the compensation involved represents in connection with, any settlement of any eral National Mortgage Association Charter a reasonable payment for services rendered. claim, proceeding, or action; and Act (12 U.S.C. 1723a(d)) is amended by adding ‘‘(3) CERTAIN PAYMENTS PROHIBITED.—No ‘‘(iii) the amount of, and any cost incurred at the end the following new paragraph: regulated entity may prepay the salary or in connection with, any judgment or penalty ‘‘(4) Notwithstanding any other provision any liability or legal expense of any affili- imposed with respect to any claim, pro- of this section, the corporation shall not ated party if such payment is made— ceeding, or action. transfer, disburse, or pay compensation to ‘‘(A) in contemplation of the insolvency of ‘‘(C) PAYMENT.—The term ‘payment’ in- any executive officer, or enter into an agree- such regulated entity, or after the commis- cludes— ment with such executive officer, without sion of an act of insolvency; and ‘‘(i) any direct or indirect transfer of any the approval of the Director, for matters ‘‘(B) with a view to, or having the result funds or any asset; and being reviewed under section 1318 of the Fed- of— ‘‘(ii) any segregation of any funds or assets eral Housing Enterprises Financial Safety ‘‘(i) preventing the proper application of for the purpose of making, or pursuant to an and Soundness Act of 1992 (12 U.S.C. 4518).’’. the assets of the regulated entity to credi- agreement to make, any payment after the (2) FREDDIE MAC.—Section 303(h) of the tors; or date on which such funds or assets are seg- Federal Home Loan Mortgage Corporation ‘‘(ii) preferring one creditor over another. regated, without regard to whether the obli- OLDEN PARACHUTE PAYMENT DE- Act (12 U.S.C. 1452(h)) is amended by adding ‘‘(4) G gation to make such payment is contingent FINED.— at the end the following new paragraph: on— ‘‘(4) Notwithstanding any other provision ‘‘(A) IN GENERAL.—For purposes of this sub- ‘‘(I) the determination, after such date, of of this section, the Corporation shall not section, the term ‘golden parachute pay- the liability for the payment of such transfer, disburse, or pay compensation to ment’ means any payment (or any agree- amount; or any executive officer, or enter into an agree- ment to make any payment) in the nature of ‘‘(II) the liquidation, after such date, of the ment with such executive officer, without compensation by any regulated entity for amount of such payment. the approval of the Director, for matters the benefit of any affiliated party pursuant ‘‘(6) CERTAIN COMMERCIAL INSURANCE COV- being reviewed under section 1318 of the Fed- to an obligation of such regulated entity ERAGE NOT TREATED AS COVERED BENEFIT PAY- eral Housing Enterprises Financial Safety that— MENT.—No provision of this subsection shall and Soundness Act of 1992 (12 U.S.C. 4518).’’. ‘‘(i) is contingent on the termination of be construed as prohibiting any regulated (3) FEDERAL HOME LOAN BANKS.—Section 7 such party’s affiliation with the regulated entity from purchasing any commercial in- of the Federal Home Loan Bank Act (12 entity; and surance policy or fidelity bond, except that, U.S.C. 1427) is amended by adding at the end ‘‘(ii) is received on or after the date on subject to any requirement described in the following new subsection: which— paragraph (5)(A)(iii), such insurance policy ‘‘(l) WITHHOLDING OF COMPENSATION.—Not- ‘‘(I) the regulated entity became insolvent; withstanding any other provision of this sec- ‘‘(II) any conservator or receiver is ap- or bond shall not cover any legal or liability tion, a Federal Home Loan Bank shall not pointed for such regulated entity; or expense of the regulated entity which is de- transfer, disburse, or pay compensation to ‘‘(III) the Director determines that the reg- scribed in paragraph (5)(A).’’. any executive officer, or enter into an agree- ulated entity is in a troubled condition (as SEC. 1115. REPORTING OF FRAUDULENT LOANS. ment with such executive officer, without defined in the regulations of the Director). Part 1 of subtitle C of the Federal Housing the approval of the Director, for matters ‘‘(B) CERTAIN PAYMENTS IN CONTEMPLATION Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4631 et seq.), as amend- being reviewed under section 1318 of the Fed- OF AN EVENT.—Any payment which would be eral Housing Enterprises Financial Safety a golden parachute payment but for the fact ed by this Act, is amended by adding at the end the following: and Soundness Act of 1992 (12 U.S.C. 4518).’’. that such payment was made before the date ‘‘SEC. 1379E. REPORTING OF FRAUDULENT SEC. 1114. LIMIT ON GOLDEN PARACHUTES. referred to in subparagraph (A)(ii) shall be LOANS. Section 1318 of the Federal Housing Enter- treated as a golden parachute payment if the ‘‘(a) REQUIREMENT TO REPORT.—The Direc- payment was made in contemplation of the prises Financial Safety and Soundness Act of tor shall require a regulated entity to sub- occurrence of an event described in any sub- 1992 (12 U.S.C. 4518) is amended by adding at mit to the Director a timely report upon dis- clause of such subparagraph. the end the following: covery by the regulated entity that it has ‘‘(e) AUTHORITY TO REGULATE OR PROHIBIT ‘‘(C) CERTAIN PAYMENTS NOT INCLUDED.— purchased or sold a fraudulent loan or finan- CERTAIN FORMS OF BENEFITS TO AFFILIATED For purposes of this subsection, the term cial instrument, or suspects a possible fraud PARTIES.— ‘golden parachute payment’ shall not in- relating to the purchase or sale of any loan ‘‘(1) GOLDEN PARACHUTES AND INDEMNIFICA- clude— or financial instrument. The Director shall TION PAYMENTS.—The Director may prohibit ‘‘(i) any payment made pursuant to a re- require each regulated entity to establish or limit, by regulation or order, any golden tirement plan which is qualified (or is in- and maintain procedures designed to dis- parachute payment or indemnification pay- tended to be qualified) under section 401 of cover any such transactions. ment. the Internal Revenue Code of 1986, or other ‘‘(b) PROTECTION FROM LIABILITY FOR RE- ‘‘(2) FACTORS TO BE TAKEN INTO ACCOUNT.— nondiscriminatory benefit plan; PORTS.—Any regulated entity that, in good The Director shall prescribe, by regulation, ‘‘(ii) any payment made pursuant to a bona faith, makes a report pursuant to subsection the factors to be considered by the Director fide deferred compensation plan or arrange- (a), and any entity-affiliated party, that, in in taking any action pursuant to paragraph ment which the Director determines, by reg- good faith, makes or requires another to (1), which may include such factors as— ulation or order, to be permissible; or make any such report, shall not be liable to ‘‘(A) whether there is a reasonable basis to ‘‘(iii) any payment made by reason of the any person under any provision of law or reg- believe that the affiliated party has com- death or disability of an affiliated party. ulation, any constitution, law, or regulation

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00077 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5848 CONGRESSIONAL RECORD — SENATE June 19, 2008

of any State or political subdivision of any quest and of the period for public comment ‘‘(f) NO LIMITATION.—Nothing in this sec- State, or under any contract or other legally pursuant to paragraph (3) regarding the tion may be construed to restrict— enforceable agreement (including any arbi- product, and a description of the product ‘‘(1) the safety and soundness authority of tration agreement) for such report or for any proposed by the request. The Director shall the Director over all new and existing prod- failure to provide notice of such report to give interested parties the opportunity to re- ucts or activities; or the person who is the subject of such report spond in writing to the proposed product. ‘‘(2) the authority of the Director to review or any other persons identified in the re- ‘‘(3) PUBLIC COMMENT PERIOD.—During the all new and existing products or activities to port.’’. 30-day period beginning on the date of publi- determine that such products or activities Subtitle B—Improvement of Mission cation pursuant to paragraph (2) of a request are consistent with the statutory mission of Supervision for approval of a product, the Director shall an enterprise.’’. receive public comments regarding the pro- SEC. 1121. TRANSFER OF PROGRAM APPROVAL SEC. 1124. CONFORMING LOAN LIMITS. AND HOUSING GOAL OVERSIGHT. posed product. (a) FANNIE MAE.— ‘‘(4) OFFERING OF PRODUCT.— Part 2 of subtitle A of the Federal Housing (1) GENERAL LIMIT.—Section 302(b)(2) of the ‘‘(A) IN GENERAL.—Not later than 30 days Enterprises Financial Safety and Soundness Federal National Mortgage Association after the close of the public comment period Act of 1992 (12 U.S.C. 4541 et seq.) is amend- Charter Act (12 U.S.C. 1717(b)(2)) is amended described in paragraph (3), the Director shall ed— by striking the 7th and 8th sentences and in- approve or deny the product, specifying the (1) by striking the heading for the part and serting the following new sentences: ‘‘Such grounds for such decision in writing. inserting the following: limitations shall not exceed $417,000 for a ‘‘(B) FAILURE TO ACT.—If the Director fails mortgage secured by a single-family resi- ‘‘PART 2—ADDITIONAL AUTHORITIES OF to act within the 30-day period described in dence, $533,850 for a mortgage secured by a 2- THE DIRECTOR’’; subparagraph (A), then the enterprise may family residence, $645,300 for a mortgage se- and offer the product. cured by a 3-family residence, and $801,950 for (2) by striking sections 1321 and 1322. ‘‘(C) TEMPORARY APPROVAL.—The Director a mortgage secured by a 4-family residence, SEC. 1122. ASSUMPTION BY THE DIRECTOR OF may, subject to the rules of the Director, except that such maximum limitations shall CERTAIN OTHER HUD RESPONSIBIL- provide for temporary approval of the offer- be adjusted effective January 1 of each year ITIES. ing of a product without a public comment beginning after the effective date of Federal (a) IN GENERAL.—Part 2 of subtitle A of the period, if the Director finds that the exist- Housing Finance Regulatory Reform Act of Federal Housing Enterprises Financial Safe- ence of exigent circumstances makes such 2008, subject to the limitations in this para- ty and Soundness Act of 1992 (12 U.S.C. 4541 delay contrary to the public interest. graph. Each adjustment shall be made by et seq.) is amended— ‘‘(d) CONDITIONAL APPROVAL.—If the Direc- adding to each such amount (as it may have (1) by striking ‘‘Secretary’’ each place that tor approves the offering of any product by been previously adjusted) a percentage term appears and inserting ‘‘Director’’ in an enterprise, the Director may establish thereof equal to the percentage increase, each of sections 1323, 1326, 1327, 1328, and 1336; terms, conditions, or limitations with re- during the most recent 12-month or 4th-quar- and spect to such product with which the enter- ter period ending before the time of deter- (2) by striking sections 1338 and 1349 (12 prise must comply in order to offer such mining such annual adjustment, in the hous- U.S.C. 4562 note and 4589). product. ing price index maintained by the Director of (b) RETENTION OF FAIR HOUSING RESPON- ‘‘(e) EXCLUSIONS.— the Federal Housing Finance Agency (pursu- SIBILITIES.—Section 1325 of the Federal Hous- ‘‘(1) IN GENERAL.—The requirements of sub- ant to section 1322 of the Federal Housing ing Enterprises Financial Safety and Sound- sections (a) through (d) do not apply with re- Enterprises Financial Safety and Soundness ness Act of 1992 (12 U.S.C. 4545) is amended in spect to— Act of 1992 (12 U.S.C. 4541)). If the change in the matter preceding paragraph (1), by in- ‘‘(A) the automated loan underwriting sys- such house price index during the most re- serting ‘‘of Housing and Urban Develop- tem of an enterprise in existence as of the cent 12-month or 4th-quarter period ending ment’’ after ‘‘The Secretary’’. date of enactment of the Federal Housing Fi- before the time of determining such annual SEC. 1123. REVIEW OF ENTERPRISE PRODUCTS. nance Regulatory Reform Act of 2008, includ- adjustment is a decrease, then no adjust- Part 2 of subtitle A of the Federal Housing ing any upgrade to the technology, operating ment shall be made for the next year, and Enterprises Financial Safety and Soundness system, or software to operate the under- the next adjustment shall take into account Act of 1992 (12 U.S.C. 4541 et seq.) is amended writing system; prior declines in the house price index, so by inserting before section 1323 the fol- ‘‘(B) any modification to the mortgage that any adjustment shall reflect the net lowing: terms and conditions or mortgage under- change in the house price index since the ‘‘SEC. 1321. PRIOR APPROVAL AUTHORITY FOR writing criteria relating to the mortgages last adjustment. Declines in the house price PRODUCTS. that are purchased or guaranteed by an en- index shall be accumulated and then reduce ‘‘(a) IN GENERAL.—The Director shall re- terprise, provided that such modifications do increases until subsequent increases exceed quire each enterprise to obtain the approval not alter the underlying transaction so as to prior declines.’’. of the Director for any product of the enter- include services or financing, other than res- (2) HIGH-COST AREA LIMIT.—Section 302(b)(2) prise before initially offering the product. idential mortgage financing; or of the Federal National Mortgage Associa- ‘‘(b) STANDARD FOR APPROVAL.—In consid- ‘‘(C) any other activity that is substan- tion Charter Act (12 U.S.C. 1717(b)(2)) is ering any request for approval of a product tially similar, as determined by rule of the amended by adding after the period at the pursuant to subsection (a), the Director shall Director to— end the following: ‘‘Such foregoing limita- make a determination that— ‘‘(i) the activities described in subpara- tions shall also be increased with respect to ‘‘(1) in the case of a product of the Federal graphs (A) and (B); and properties of a particular size located in any National Mortgage Association, the product ‘‘(ii) other activities that have been ap- area for which the median price for such size is authorized under paragraph (2), (3), (4), or proved by the Director in accordance with residence exceeds the foregoing limitation (5) of section 302(b) or section 304 of the Fed- this section. for such size residence, to the lesser of 150 eral National Mortgage Association Charter ‘‘(2) EXPEDITED REVIEW.— percent of such foregoing limitation for such Act (12 U.S.C. 1717(b), 1719); ‘‘(A) ENTERPRISE NOTICE.—For any new ac- size residence or the amount that is equal to ‘‘(2) in the case of a product of the Federal tivity that an enterprise considers not to be the median price in such area for such size Home Loan Mortgage Corporation, the prod- a product, the enterprise shall provide writ- residence.’’. uct is authorized under paragraph (1), (4), or ten notice to the Director of such activity, (3) EFFECTIVE DATE.—The amendments (5) of section 305(a) of the Federal Home and may not commence such activity until made by paragraphs (1) and (2) of this sub- Loan Mortgage Corporation Act (12 U.S.C. the date of receipt of a notice under subpara- section shall take effect upon the expiration 1454(a)); graph (B) or the expiration of the period de- of the date described in section 201(a) of the ‘‘(3) the product is in the public interest; scribed in subparagraph (C). The Director Economic Stimulus Act of 2008 (Public Law and shall establish, by regulation, the form and 110–185). ‘‘(4) the product is consistent with the content of such written notice. (b) FREDDIE MAC.— safety and soundness of the enterprise or the ‘‘(B) DIRECTOR DETERMINATION.—Not later (1) GENERAL LIMIT.—Section 305(a)(2) of the mortgage finance system. than 15 days after the date of receipt of a no- Federal Home Loan Mortgage Corporation ‘‘(c) PROCEDURE FOR APPROVAL.— tice under subparagraph (A), the Director Act (12 U.S.C. 1454(a)(2)) is amended by strik- ‘‘(1) SUBMISSION OF REQUEST.—An enter- shall determine whether such activity is a ing the 6th and 7th sentences and inserting prise shall submit to the Director a written product subject to approval under this sec- the following new sentences: ‘‘Such limita- request for approval of a product that de- tion. The Director shall, immediately upon tions shall not exceed $417,000 for a mortgage scribes the product in such form as pre- so determining, notify the enterprise. secured by a single-family residence, $533,850 scribed by order or regulation of the Direc- ‘‘(C) FAILURE TO ACT.—If the Director fails for a mortgage secured by a 2-family resi- tor. to determine whether such activity is a prod- dence, $645,300 for a mortgage secured by a 3- ‘‘(2) REQUEST FOR PUBLIC COMMENT.—Imme- uct within the 15-day period described in sub- family residence, and $801,950 for a mortgage diately upon receipt of a request for approval paragraph (B), the enterprise may commence secured by a 4-family residence, except that of a product, as required under paragraph (1), the new activity in accordance with subpara- such maximum limitations shall be adjusted the Director shall publish notice of such re- graph (A). effective January 1 of each year beginning

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00078 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5849 after the effective date of the Federal Hous- SEC. 1125. ANNUAL HOUSING REPORT. ‘‘(A) the characteristics of individual ing Finance Regulatory Reform Act of 2008, (a) REPEAL.—Section 1324 of the Federal mortgages that are eligible for purchase by subject to the limitations in this paragraph. Housing Enterprises Financial Safety and the enterprises and the characteristics of in- Each adjustment shall be made by adding to Soundness Act of 1992 (12 U.S.C. 4544) is here- dividual mortgages that are not eligible for each such amount (as it may have been pre- by repealed. purchase by the enterprises including, in viously adjusted) a percentage thereof equal (b) ANNUAL HOUSING REPORT.—The Federal both cases, information concerning— to the percentage increase, during the most Housing Enterprises Financial Safety and ‘‘(i) the price of the house that secures the recent 12-month or fourth-quarter period Soundness Act of 1992 is amended by insert- mortgage; ending before the time of determining such ing after section 1323 the following: ‘‘(ii) the loan-to-value ratio of the mort- annual adjustment, in the housing price ‘‘SEC. 1324. ANNUAL HOUSING REPORT. gage, which shall reflect any secondary liens index maintained by the Director of the Fed- ‘‘(a) IN GENERAL.—After reviewing and ana- on the relevant property; eral Housing Finance Agency (pursuant to lyzing the reports submitted under section ‘‘(iii) the terms of the mortgage; section 1322 of the Federal Housing Enter- 309(n) of the Federal National Mortgage As- ‘‘(iv) the creditworthiness of the borrower prises Financial Safety and Soundness Act of sociation Charter Act and section 307(f) of or borrowers; and 1992 (12 U.S.C. 4541)). If the change in such the Federal Home Loan Mortgage Corpora- ‘‘(v) whether the mortgage, in the case of a house price index during the most recent 12- tion Act, the Director shall submit a report, conforming mortgage, was purchased by an month or 4th-quarter period ending before not later than October 30 of each year, to the enterprise; the time of determining such annual adjust- Committee on Banking, Housing, and Urban ‘‘(B) the characteristics of individual ment is a decrease, then no adjustment shall Affairs of the Senate and the Committee on subprime and nontraditional mortgages that be made for the next year, and the next ad- Financial Services of the House of Rep- are eligible for purchase by the enterprises justment shall take into account prior de- resentatives, on the activities of each enter- and the characteristics of borrowers under clines in the house price index, so that any prise. such mortgages, including the creditworthi- adjustment shall reflect the net change in ‘‘(b) CONTENTS.—The report required under ness of such borrowers and determination the house price index since the last adjust- subsection (a) shall— whether such borrowers would qualify for ment. Declines in the house price index shall ‘‘(1) discuss— prime lending; and be accumulated and then reduce increases ‘‘(A) the extent to and manner in which— ‘‘(C) such other matters as the Director de- until subsequent increases exceed prior de- ‘‘(i) each enterprise is achieving the annual termines to be appropriate. clines.’’. housing goals established under subpart B; ‘‘(3) PUBLIC AVAILABILITY.—The Director (2) HIGH-COST AREA LIMIT.—Section 305(a)(2) ‘‘(ii) each enterprise is complying with its shall make any data collected by the Direc- of the Federal Home Loan Mortgage Cor- duty to serve underserved markets, as estab- tor in connection with the conduct of a poration Act is amended by adding after the lished under section 1335; monthly survey available to the public in a period at the end the following: ‘‘Such fore- ‘‘(iii) each enterprise is complying with timely manner, provided that the Director going limitations shall also be increased section 1337; may modify the data released to the public with respect to properties of a particular size ‘‘(iv) each enterprise received credit to- to ensure that the data— located in any area for which the median wards achieving each of its goals resulting ‘‘(A) is not released in an identifiable form; price for such size residence exceeds the fore- from a transaction or activity pursuant to and going limitation for such size residence, to section 1331(b)(2); and ‘‘(B) is not otherwise obtainable from other the lesser of 150 percent of such foregoing ‘‘(v) each enterprise is achieving the pur- publicly available data sets. limitation for such size residence or the poses of the enterprise established by law; ‘‘(4) DEFINITION.—For purposes of this sub- amount that is equal to the median price in and section, the term ‘identifiable form’ means such area for such size residence.’’. ‘‘(B) the actions that each enterprise could any representation of information that per- (3) EFFECTIVE DATE.—The amendments undertake to promote and expand the pur- mits the identity of a borrower to which the made by paragraphs (1) and (2) of this sub- poses of the enterprise; information relates to be reasonably inferred section shall take effect upon the expiration ‘‘(2) aggregate and analyze relevant data by either direct or indirect means.’’. of the date described in section 201(a) of the on income to assess the compliance of each SEC. 1126. PUBLIC USE DATABASE. Economic Stimulus Act of 2008 (Public Law enterprise with the housing goals established Section 1323 of the Federal Housing Enter- 110–185). under subpart B; prises Financial Safety and Soundness Act of (c) SENSE OF CONGRESS.—It is the sense of ‘‘(3) aggregate and analyze data on income, 1992 (42 U.S.C. 4543) is amended— the Congress that the securitization of mort- race, and gender by census tract and other (1) in subsection (a)— gages by the Federal National Mortgage As- relevant classifications, and compare such (A) by striking ‘‘(a) IN GENERAL.—The Sec- sociation and the Federal Home Loan Mort- data with larger demographic, housing, and retary’’ and inserting the following: gage Corporation plays an important role in economic trends; ‘‘(a) AVAILABILITY.— providing liquidity to the United States ‘‘(4) identify the extent to which each en- housing markets. Therefore, the Congress ‘‘(1) IN GENERAL.—The Director’’; and terprise is involved in mortgage purchases (B) by adding at the end the following new encourages the Federal National Mortgage and secondary market activities involving Association and the Federal Home Loan paragraph: subprime and nontraditional loans; ‘‘(2) CENSUS TRACT LEVEL REPORTING.—Such Mortgage Corporation to securitize mort- ‘‘(5) compare the characteristics of gages acquired under the increased con- data shall include the data elements required subprime and nontraditional loans both pur- to be reported under the Home Mortgage Dis- forming loan limits established under this chased and securitized by each enterprise to Act. closure Act of 1975, at the census tract other loans purchased and securitized by level.’’; (d) HOUSING PRICE INDEX.—Part 2 of sub- each enterprise; and (2) in subsection (b)(2), by inserting before title A of the Federal Housing Enterprises ‘‘(6) compare the characteristics of high- Financial Safety and Soundness Act of 1992 the period at the end the following: ‘‘or with cost loans purchased and securitized, where subsection (a)(2)’’; and (12 U.S.C. 4541 et seq.) is amended by insert- such securities are not held on portfolio to ing after section 1321 (as added by section (3) by adding at the end the following new loans purchased and securitized, where such subsection: 1123 of this Act) the following new section: securities are either retained on portfolio or ‘‘(d) TIMING.—Data submitted under this ‘‘SEC. 1322. HOUSING PRICE INDEX. repurchased by the enterprise, including section by an enterprise in connection with a ‘‘The Director shall establish and maintain such characteristics as— provision referred to in subsection (a) shall a method of assessing the national average 1- ‘‘(A) the purchase price of the property be made publicly available in accordance family house price for use for adjusting the that secures the mortgage; with this section not later than September conforming loan limitations of the enter- ‘‘(B) the loan-to-value ratio of the mort- 30 of the year following the year to which prises. In establishing such method, the Di- gage, which shall reflect any secondary liens the data relates.’’. rector shall take into consideration the on the relevant property; monthly survey of all major lenders con- ‘‘(C) the terms of the mortgage; SEC. 1127. REPORTING OF MORTGAGE DATA. ducted by the Federal Housing Finance ‘‘(D) the creditworthiness of the borrower; Section 1326 of the Federal Housing Enter- Agency to determine the national average 1- and prises Financial Safety and Soundness Act of family house price, the House Price Index ‘‘(E) any other relevant data, as deter- 1992 (12 U.S.C. 4546) is amended— maintained by the Office of Federal Housing mined by the Director. (1) in subsection (a), by striking ‘‘The Di- Enterprise Oversight of the Department of ‘‘(c) DATA COLLECTION AND REPORTING.— rector’’ and inserting ‘‘Subject to subsection Housing and Urban Development before the ‘‘(1) IN GENERAL.—To assist the Director in (d), the Director’’; and effective date of the Federal Housing Fi- analyzing the matters described in sub- (2) by adding at the end the following: nance Regulatory Reform Act of 2008, any section (b), the Director shall conduct, on a ‘‘(d) MORTGAGE INFORMATION.—Subject to appropriate house price indexes of the Bu- monthly basis, a survey of mortgage mar- privacy considerations, as described in sec- reau of the Census of the Department of kets in accordance with this subsection. tion 304(j) of the Home Mortgage Disclosure Commerce, and any other indexes or meas- ‘‘(2) DATA POINTS.—Each monthly survey Act of 1975 (12 U.S.C. 2803(j)), the Director ures that the Director considers appro- conducted by the Director under paragraph shall, by regulation or order, provide that priate.’’. (1) shall collect data on— certain information relating to single family

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00079 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5850 CONGRESSIONAL RECORD — SENATE June 19, 2008

mortgage data of the enterprises shall be dis- enterprises to reasonably and sufficiently ‘‘(2) CONSIDERATIONS.—In establishing an- closed to the public, in order to make avail- plan their operations and activities in ad- nual targets under paragraph (1), the Direc- able to the public— vance, including operations and activities tor shall consider— ‘‘(1) the same data from the enterprises necessary to meet such goals. ‘‘(A) national housing needs; that is required of insured depository insti- ‘‘SEC. 1331A. DISCRETIONARY ADJUSTMENT OF ‘‘(B) economic, housing, and demographic tutions under the Home Mortgage Disclosure HOUSING GOALS. conditions; Act of 1975; and ‘‘(a) AUTHORITY.— ‘‘(C) the performance and effort of the en- ‘‘(2) information collected by the Director ‘‘(1) REVIEW.—The Director shall review terprises toward achieving the housing goals under section 1324(b)(6).’’. the appropriateness of each goal established under this section in previous years; SEC. 1128. REVISION OF HOUSING GOALS. pursuant to this subpart at least once during ‘‘(D) the ability of the enterprise to lead each year to assure that given current mar- (a) REPEAL.—Sections 1331 through 1334 of the industry in making mortgage credit the Federal Housing Enterprises Financial ket conditions that each such goal is fea- available; Safety and Soundness Act of 1992 (12 U.S.C. sible. ‘‘(E) recent information submitted in com- 4561 through 4564) are hereby repealed. ‘‘(2) PETITION TO REDUCE.—An enterprise pliance with the Home Mortgage Disclosure may petition the Director in writing at any (b) HOUSING GOAL.—The Federal Housing Act of 1975 and such other reliable mortgage Enterprises Financial Safety and Soundness time during a year to reduce the level of any data as may be available; Act of 1992 is amended by inserting before goal for such year established pursuant to ‘‘(F) the size of the purchase money con- this subpart. section 1335 the following: ventional mortgage market serving each of ‘‘(b) STANDARD FOR REDUCTION.—The Direc- ‘‘SEC. 1331. ESTABLISHMENT OF HOUSING GOALS. the types of families described in subsection tor may reduce the level for a goal pursuant (a), relative to the size of the overall pur- ‘‘(a) IN GENERAL.—The Director shall, by to such a petition only if— chase money mortgage market; and regulation, establish effective for the first ‘‘(1) market and economic conditions or ‘‘(G) the need to maintain the sound finan- calendar year that begins after the date of the financial condition of the enterprise re- cial condition of the enterprises. enactment of the Federal Housing Finance quire such action; or ‘‘(3) HIGH-COST LOANS AND INAPPROPRIATE Regulatory Reform Act of 2008, and each ‘‘(2) efforts to meet the goal would result LENDING PRACTICES.—In establishing annual year thereafter, annual housing goals, as de- in the constraint of liquidity, over-invest- targets under paragraph (1), the Director scribed under this subpart, with respect to ment in certain market segments, or other shall not consider segments of the market the mortgage purchases by the enterprises. consequences contrary to the intent of this determined to be unacceptable or contrary ‘‘(b) SPECIAL COUNTING REQUIREMENTS.— subpart, section 301(3) of the Federal Na- to good lending practices pursuant to section ‘‘(1) IN GENERAL.—The Director shall deter- tional Mortgage Association Charter Act (12 1331(b)(2). mine whether an enterprise shall receive U.S.C. 1716(3)), or section 301(b)(3) of the Fed- ‘‘(d) NOTICE OF DETERMINATION AND ENTER- full, partial, or no credit for a transaction eral Home Loan Mortgage Corporation Act PRISE COMMENT.— toward achievement of any of the housing (12 U.S.C. 1451 note), as applicable. ‘‘(1) NOTICE.—Within 30 days of making a goals established pursuant to this section or ‘‘(c) DETERMINATION.— determination under subsection (b) regard- sections 1332 through 1334. ‘‘(1) 30-DAY PERIOD.—If an enterprise sub- ing compliance of an enterprise for a year ‘‘(2) CONSIDERATIONS.—In making any de- mits a petition for reduction to the Director with the housing goals established under this termination under paragraph (1), the Direc- under subsection (a)(2), the Director shall section and before any public disclosure tor shall consider whether a transaction or make a determination regarding any pro- thereof, the Director shall provide notice of activity of an enterprise is substantially posed reduction within 30 days of receipt of the determination to the enterprise, which equivalent to a mortgage purchase and ei- the petition. shall include an analysis and comparison, by ther (A) creates a new market, or (B) adds li- ‘‘(2) EXTENSION.—The Director may extend the Director, of the performance of the en- quidity to an existing market, provided how- the period described in paragraph (1) for a terprise for the year and the targets for the ever that the terms and conditions of such single additional 15-day period, but only if year under subsection (c). mortgage purchase is neither determined to the Director requests additional information ‘‘(2) COMMENT PERIOD.—The Director shall be unacceptable, nor contrary to good lend- from the enterprise. provide each enterprise and the public an op- ing practices, and otherwise promotes sus- ‘‘SEC. 1332. SINGLE-FAMILY HOUSING GOALS. tainable homeownership and further, that portunity to comment on the determination ‘‘(a) ESTABLISHMENT OF GOALS.— during the 30-day period beginning upon re- such mortgage purchase actually fulfills the ‘‘(1) IN GENERAL.—The Director shall estab- purposes of the enterprise and is in accord- ceipt by the enterprise of the notice. lish annual goals for the purchase by each ‘‘(e) USE OF BORROWER INCOME.—In moni- ance with the chartering Act of such enter- enterprise of conventional, conforming, sin- toring the performance of each enterprise prise. gle-family, owner-occupied, purchase money pursuant to the housing goals under this sec- ‘‘(c) ELIMINATING INTEREST RATE DISPARI- mortgages financing housing for each of the tion and evaluating such performance (for TIES.— following: purposes of section 1336), the Director shall ‘‘(1) IN GENERAL.—In establishing and im- ‘‘(A) Low-income families. consider a mortgagor’s income to be the in- plementing the housing goals under this sub- ‘‘(B) Families that reside in low-income come of the mortgagor at the time of origi- part, the Director shall require the enter- areas. nation of the mortgage. prises to disclose appropriate information to ‘‘(C) Very low-income families. ‘‘(f) CONSIDERATION OF PROPERTIES WITH allow the Director to assess if there are any ‘‘(2) GOALS AS PERCENTAGE OF TOTAL PUR- RENTAL UNITS.—Mortgages financing 1-to-4 disparities in interest rates charged on mort- CHASE MONEY MORTGAGE PURCHASES.—The unit owner-occupied properties shall count gages to borrowers who are minorities, as goals established under paragraph (1) shall toward the achievement of the single-family compared with borrowers of similar credit- be established as a percentage of the total housing goal under this section, if such prop- worthiness who are not minorities, as evi- number of single-family dwelling units fi- erties otherwise meet the requirements denced in reports pursuant to the Home nanced by single-family purchase money under this section notwithstanding the use Mortgage Disclosure Act of 1975. mortgage purchases of the enterprise. of 1 or more units for rental purposes. ‘‘(2) REPORT TO CONGRESS ON DISPARITIES.— ‘‘(b) DETERMINATION OF COMPLIANCE.— ‘‘SEC. 1333. SINGLE-FAMILY HOUSING REFINANCE Upon a finding by the Director that a pat- ‘‘(1) IN GENERAL.—The Director shall deter- GOALS. tern of disparities in interest rates exists mine, for each year that the housing goals ‘‘(a) PREPAYMENT OF EXISTING LOANS.— pursuant to the information provided by an under this section are in effect pursuant to ‘‘(1) IN GENERAL.—The Director shall estab- enterprise under paragraph (1), the Director section 1331(a), whether each enterprise has lish annual goals for the purchase by each shall— complied with the single-family housing enterprise of mortgages on conventional, ‘‘(A) forward to the Committee on Bank- goals established under this section for such conforming, single-family, owner-occupied ing, Housing, and Urban Affairs of the Sen- year. housing given to pay off or prepay an exist- ate and the Committee on Financial Services ‘‘(2) COMPLIANCE REQUIREMENTS.—An enter- ing loan served by the same property for of the House of Representatives a report de- prise shall be considered to be in compliance each of the following: tailing the disparities; and with a goal described under subsection (a) for ‘‘(A) Low-income families. ‘‘(B) forward the report prepared under a year, only if, for each of the types of fami- ‘‘(B) Families that reside in low-income subparagraph (A) to any other appropriate lies described in subsection (a), the percent- areas. regulatory or enforcement agency. age of the number of conventional, con- ‘‘(C) Very low-income families. ‘‘(3) IDENTITY OF INDIVIDUALS NOT DIS- forming, single-family, owner-occupied, pur- ‘‘(2) GOALS AS PERCENTAGE OF TOTAL REFI- CLOSED.—In carrying out this subsection, the chase money mortgages purchased by the en- NANCING MORTGAGE PURCHASES.—The goals Director shall ensure that no personally terprise in such year that serve such fami- described under paragraph (1) shall be estab- identifiable financial information that would lies, meets or exceeds the target established lished as a percentage of the total number of enable an individual borrower to be reason- under subsection (c) for the year for such single-family dwelling units refinanced by ably identified shall be made public. type of family. mortgage purchases of each enterprise. ‘‘(d) TIMING.—The Director shall establish ‘‘(c) ANNUAL TARGETS.— ‘‘(b) DETERMINATION OF COMPLIANCE.— an annual deadline for the establishment of ‘‘(1) IN GENERAL.—The Director shall estab- ‘‘(1) IN GENERAL.—The Director shall deter- housing goals described in subsection (a), lish annual targets for each goal described in mine, for each year that the housing goals taking into consideration the need for the subsection (a). under this section are in effect pursuant to

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00080 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5851 section 1331(a), whether each enterprise has housing projects of a smaller or limited size, ed toward the goal established under this complied with the single-family housing refi- which may be based on the number of dwell- section in a current year any units or mort- nance goals established under this section ing units in the project or the amount of the gages credited toward such goal in a prior for such year. mortgage, or both, and shall include multi- year if an enterprise requires a lender to re- ‘‘(2) COMPLIANCE.—An enterprise shall be family housing projects of 5 to 50 units (as purchase, or reimburse for losses, or indem- considered to be in compliance with the adjusted by the Director), or with mortgages nify the enterprise against potential losses goals of this section for a year, only if, for of up to $5,000,000 (as adjusted by the Direc- on such units or mortgages. each of the types of families described in tor). ‘‘(g) NOTICE OF DETERMINATION AND ENTER- subsection (a), the percentage of the number ‘‘(3) FACTORS.—The Director shall establish PRISE COMMENT.— of conventional, conforming, single-family, the goal and additional requirements under ‘‘(1) NOTICE.—Within 30 days of making a owner-occupied refinancing mortgages pur- this section taking into consideration— determination under subsection (d) regard- chased by each enterprise in such year that ‘‘(A) national multifamily mortgage credit ing compliance of an enterprise for a year serve such families, meets or exceeds the needs; with the housing goal established under this target for the year for such type of family ‘‘(B) the performance and effort of the en- section and before any public disclosure that is established under subsection (c). terprise in making mortgage credit available thereof, the Director shall provide notice of ‘‘(c) ANNUAL TARGETS.— for multifamily housing in previous years; the determination to the enterprise, which ‘‘(1) IN GENERAL.—The Director shall estab- ‘‘(C) the size of the multifamily mortgage shall include an analysis and comparison, by lish annual targets for each goal described in market, including the size of the small mul- the Director, of the performance of the en- subsection (a). tifamily mortgage market; terprise for the year and the goal for the ‘‘(2) CONSIDERATIONS.—In establishing an- ‘‘(D) the most recent information available year under subsection (a). nual targets under paragraph (1), the Direc- for the Residential Survey published by the ‘‘(2) COMMENT PERIOD.—The Director shall tor shall consider— Census Bureau, and such other reliable data provide each enterprise and the public an op- ‘‘(A) national housing needs; as may be available regarding multifamily portunity to comment on the determination ‘‘(B) economic, housing, and demographic mortgages; during the 30-day period beginning upon re- conditions; ‘‘(E) the ability of the enterprise to lead ceipt by the enterprise of the notice.’’. (c) CONFORMING AMENDMENTS.—The Fed- ‘‘(C) the performance and effort of the en- the industry in expanding mortgage credit terprises toward achieving the housing goals eral Housing Enterprises Financial Safety availability at favorable terms, especially and Soundness Act of 1992 is amended— under this section in previous years; for underserved markets, such as for— ‘‘(D) the ability of the enterprise to lead (1) in section 1335(a) (12 U.S.C. 4565(a)), in ‘‘(i) small multifamily projects; the matter preceding paragraph (1), by strik- the industry in making mortgage credit ‘‘(ii) multifamily properties in need of available; ing ‘‘low- and moderate-income housing preservation and rehabilitation; and goal’’ and all that follows through ‘‘section ‘‘(E) recent information submitted in com- ‘‘(iii) multifamily properties located in pliance with the Home Mortgage Disclosure 1334’’ and inserting ‘‘housing goals estab- rural areas; and lished under this subpart’’; and Act of 1975 and such other reliable mortgage ‘‘(F) the need to maintain the sound finan- data as may be available; (2) in section 1336(a)(1) (12 U.S.C. 4566(a)(1)), cial condition of the enterprise. by striking ‘‘sections 1332, 1333, and 1334,’’ ‘‘(F) the size of the purchase money con- ‘‘(b) UNITS FINANCED BY HOUSING FINANCE and inserting ‘‘this subpart’’. ventional mortgage market serving each of AGENCY BONDS.—The Director may give cred- (d) DEFINITIONS.—Section 1303 of the Fed- the types of families described in subsection it toward the achievement of the multi- eral Housing Enterprises Financial Safety (a), relative to the size of the overall pur- family special affordable housing goal under and Soundness Act of 1992 (12 U.S.C. 4502) is chase money mortgage market; and this section (for purposes of section 1336) to amended— ‘‘(G) the need to maintain the sound finan- dwelling units in multifamily housing (1) by striking paragraph (24), as so des- cial condition of the enterprises. projects that otherwise qualify under such ignated by section 1002 of this Act, and in- ‘‘(d) NOTICE OF DETERMINATION AND ENTER- goal and that are financed by tax-exempt or serting the following: PRISE COMMENT.— taxable bonds issued by a State or local ‘‘(24) VERY LOW-INCOME.— ‘‘(1) NOTICE.—Within 30 days of making a housing finance agency, but only if such ‘‘(A) IN GENERAL.—The term ‘very low-in- determination under subsection (b) regard- bonds— come’ means— ing compliance of an enterprise for a year ‘‘(1) are secured by a guarantee of the en- ‘‘(i) in the case of owner-occupied units, with the housing goals established under this terprise; or families having incomes not greater than 50 section and before any public disclosure ‘‘(2) are not investment grade and are pur- percent of the area median income; and thereof, the Director shall provide notice of chased by the enterprise. ‘‘(ii) in the case of rental units, families the determination to the enterprise, which ‘‘(c) USE OF TENANT RENT LEVEL.— having incomes not greater than 50 percent shall include an analysis and comparison, by ‘‘(1) IN GENERAL.—The Director shall mon- the Director, of the performance of the en- itor the performance of each enterprise in of the area median income, with adjustments terprise for the year and the targets for the meeting the goal established under this sec- for smaller and larger families, as deter- year under subsection (c). tion and shall evaluate such performance mined by the Director. ‘‘(2) COMMENT PERIOD.—The Director shall (for purposes of section 1336) based on wheth- ‘‘(B) RULE OF CONSTRUCTION.—For purposes provide each enterprise and the public an op- er the rent levels are affordable to low-in- of section 1338 and 1339, the term ‘very low- portunity to comment on the determination come and very low-income families. income’ means— ‘‘(i) in the case of owner-occupied units, in- during the 30-day period beginning upon re- ‘‘(2) RENT LEVEL.—A rent level shall be ceipt by the enterprise of the notice. considered to be affordable for purposes of come in excess of 30 percent but not greater ‘‘(e) USE OF BORROWER INCOME.—In moni- this subsection for an income category re- than 50 percent of the area median income; toring the performance of each enterprise ferred to in this subsection if it does not ex- and pursuant to the housing goals under this sec- ceed 30 percent of the maximum income level ‘‘(ii) in the case of rental units, income in tion and evaluating such performance (for of such income category, with appropriate excess of 30 percent but not greater than 50 purposes of section 1336), the Director shall adjustments for unit size as measured by the percent of the area median income, with ad- consider a mortgagor’s income to be the in- number of bedrooms. justments for smaller and larger families, as come of the mortgagor at the time of origi- ‘‘(d) DETERMINATION OF COMPLIANCE.— determined by the Director.’’; and nation of the mortgage. ‘‘(1) IN GENERAL.—The Director shall, for (2) by adding at the end the following: ‘‘SEC. 1334. MULTIFAMILY SPECIAL AFFORDABLE each year that the housing goal under this ‘‘(26) CONFORMING MORTGAGE.—The term HOUSING GOAL. section is in effect pursuant to section ‘conforming mortgage’ means, with respect ‘‘(a) ESTABLISHMENT.— 1331(a), determine whether each enterprise to an enterprise, a conventional mortgage ‘‘(1) IN GENERAL.—The Director shall estab- has complied with such goal and the addi- having an original principal obligation that lish, by regulation, by unit, dollar volume, tional requirements under subsection (a)(2). does not exceed the applicable dollar limita- or percentage of multifamily activity, as de- ‘‘(2) COMPLIANCE.—An enterprise shall be tion, in effect at the time of such origina- termined by the Director, an annual goal for considered to be in compliance with the goal tion, under— the purchase by each enterprise of— described under subsection (a) for a year ‘‘(A) section 302(b)(2) of the Federal Na- ‘‘(A) mortgages that finance dwelling units only if the multifamily mortgage purchases tional Mortgage Association Charter Act; or affordable to very low-income families; and of the enterprise meet or exceed the goal for ‘‘(B) section 305(a)(2) of the Federal Home ‘‘(B) mortgages that finance dwelling units the year established under subsection (a). Loan Mortgage Corporation Act. assisted by the low-income housing tax cred- ‘‘(e) CONSIDERATION OF UNITS IN SINGLE- ‘‘(27) EXTREMELY LOW-INCOME.—The term it under section 42 of the Internal Revenue FAMILY RENTAL HOUSING.—In establishing ‘extremely low-income’ means— Code of 1986. the goal under this section, the Director may ‘‘(A) in the case of owner-occupied units, ‘‘(2) ADDITIONAL REQUIREMENTS FOR SMALL- take into consideration the number of hous- income not in excess of 30 percent of the area ER PROJECTS.—The Director shall establish, ing units financed by any mortgage pur- median income; and within the housing goal established under chased by an enterprise on single-family ‘‘(B) in the case of rental units, income not this section, additional requirements for the rental housing that is not owner-occupied. in excess of 30 percent of the area median in- purchase by each enterprise of mortgages de- ‘‘(f) REMOVING CREDIT.—The Director shall come, with adjustments for smaller and larg- scribed in paragraph (1) for multifamily subtract from the units or mortgages count- er families, as determined by the Director.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00081 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5852 CONGRESSIONAL RECORD — SENATE June 19, 2008

‘‘(28) LOW-INCOME AREA.—The term ‘low-in- Federal National Mortgage Association for each enterprise for a year in the report come area’ means a census tract or block Charter Act (12 U.S.C. 1716) and section for that year submitted pursuant to section numbering area in which the median income 301(b)(3) of the Federal Home Loan Mortgage 1319B(a). does not exceed 80 percent of the median in- Corporation Act (12 U.S.C. 1451 note) to un- ‘‘(2) SEPARATE EVALUATIONS.—In deter- come for the area in which such census tract dertake activities relating to mortgages on mining whether an enterprise has complied or block numbering area is located, and, for housing for very low-, low-, and moderate-in- with the duty referred to in paragraph (1), the purposes of section 1332(a)(2), shall in- come families involving a reasonable eco- the Director shall separately evaluate clude families having incomes not greater nomic return that may be less than the re- whether the enterprise has complied with than 100 percent of the area median income turn earned on other activities, each enter- such duty with respect to each of the under- who reside in minority census tracts. prise shall have the duty to increase the li- served markets identified in subsection (a), ‘‘(29) MINORITY CENSUS TRACT.—The term quidity of mortgage investments and im- taking into consideration— ‘minority census tract’ means a census tract prove the distribution of investment capital ‘‘(A) the development of loan products and that has a minority population of at least 30 available for mortgage financing for under- more flexible underwriting guidelines; percent and a median family income of less served markets by purchasing or securitizing ‘‘(B) the extent of outreach to qualified than 100 percent of the area family median mortgage investments. loan sellers in each of such underserved mar- income. ‘‘(2) UNDERSERVED MARKETS.—To meet its kets; and ‘‘(30) SHORTAGE OF STANDARD RENTAL UNITS duty under paragraph (1), each enterprise ‘‘(C) the volume of loans purchased in each BOTH AFFORDABLE AND AVAILABLE TO EX- shall comply with the following require- of such underserved markets. TREMELY LOW-INCOME RENTER HOUSEHOLDS.— ments with respect to the following under- ‘‘(3) MANUFACTURED HOUSING MARKET.—In ‘‘(A) IN GENERAL.—The term ‘shortage of served markets: determining whether an enterprise has com- standard rental units both affordable and ‘‘(A) MANUFACTURED HOUSING.—The enter- plied with the duty under subparagraph (A) available to extremely low-income renter prise shall lead the industry in developing of subsection (a)(2), the Director may con- households’ means the gap between— loan products and flexible underwriting sider loans secured by both real and personal ‘‘(i) the number of units with complete guidelines to facilitate a secondary market property.’’. plumbing and kitchen facilities with a rent for mortgages on manufactured homes for (b) ENFORCEMENT.—Subsection (a) of sec- that is 30 percent or less of 30 percent of the very low-, low-, and moderate-income fami- tion 1336 of the Housing and Community De- adjusted area median income as determined lies. velopment Act of 1992 (12 U.S.C. 4566(a)) is by the Director that are occupied by ex- ‘‘(B) AFFORDABLE HOUSING PRESERVATION.— amended— tremely low-income renter households or are The enterprise shall lead the industry in de- (1) in paragraph (1), by inserting ‘‘and with vacant for rent; and veloping loan products and flexible under- the duty under section 1335(a) of each enter- ‘‘(ii) the number of extremely low-income writing guidelines to facilitate a secondary prise with respect to underserved markets,’’ renter households. market to preserve housing affordable to before ‘‘as provided in this section’’; and ULE OF CONSTRUCTION.—If the num- very low-, low-, and moderate-income fami- ‘‘(B) R (2) by adding at the end of such subsection, ber of units described in subparagraph (A)(i) lies, including housing projects subsidized as amended by the preceding provisions of exceeds the number of extremely low-income under— this subtitle, the following new paragraph: households as described in subparagraph ‘‘(i) the project-based and tenant-based ‘‘(4) ENFORCEMENT OF DUTY TO PROVIDE (A)(ii), there is no shortage. rental assistance programs under section 8 of MORTGAGE CREDIT TO UNDERSERVED MAR- ‘‘(31) SHORTAGE OF STANDARD RENTAL UNITS the United States Housing Act of 1937; KETS.—The duty under section 1335(a) of each BOTH AFFORDABLE AND AVAILABLE TO VERY ‘‘(ii) the program under section 236 of the enterprise to serve underserved markets (as LOW-INCOME RENTER HOUSEHOLDS.— National Housing Act; determined in accordance with section ‘‘(A) IN GENERAL.—The term ‘shortage of ‘‘(iii) the below-market interest rate mort- 1335(c)) shall be enforceable under this sec- standard rental units both affordable and gage program under section 221(d)(4) of the tion to the same extent and under the same available to very low-income renter house- National Housing Act; provisions that the housing goals established holds’ means the gap between— ‘‘(iv) the supportive housing for the elderly under this subpart are enforceable. Such ‘‘(i) the number of units with complete program under section 202 of the Housing duty shall not be enforceable under any plumbing and kitchen facilities with a rent Act of 1959; other provision of this title (including sub- that is 30 percent or less of 50 percent of the ‘‘(v) the supportive housing program for part C of this part) other than this section or adjusted area median income as determined persons with disabilities under section 811 of under any provision of the Federal National by the Director that are occupied by either the Cranston-Gonzalez National Affordable Mortgage Association Charter Act or the extremely low- or very low-income renter Housing Act; Federal Home Loan Mortgage Corporation households or are vacant for rent; and ‘‘(vi) the programs under title IV of the Act.’’. ‘‘(ii) the number of extremely low- and McKinney-Vento Homeless Assistance Act very low-income renter households. (42 U.S.C. 11361 et seq.), but only permanent SEC. 1130. MONITORING AND ENFORCING COM- PLIANCE WITH HOUSING GOALS. ‘‘(B) RULE OF CONSTRUCTION.—If the num- supportive housing projects subsidized under ber of units described in subparagraph (A)(i) such programs; and (a) IN GENERAL.—Section 1336 of the Fed- exceeds the number of extremely low- and ‘‘(vii) the rural rental housing program eral Housing Enterprises Financial Safety very low-income households as described in under section 515 of the Housing Act of 1949. and Soundness Act of 1992 (12 U.S.C. 4566) is subparagraph (A)(ii), there is no shortage.’’. ‘‘(C) RURAL AND OTHER UNDERSERVED MAR- amended by striking subsections (b) and (c) SEC. 1129. DUTY TO SERVE UNDERSERVED MAR- KETS.—The enterprise shall lead the industry and inserting the following: KETS. in developing loan products and flexible un- ‘‘(b) NOTICE AND PRELIMINARY DETERMINA- (a) ESTABLISHMENT AND EVALUATION OF derwriting guidelines to facilitate a sec- TION OF FAILURE TO MEET GOALS.— PERFORMANCE.—Section 1335 of the Federal ondary market for mortgages on housing for ‘‘(1) NOTICE.—If the Director preliminarily Housing Enterprises Financial Safety and very low-, low-, and moderate-income fami- determines that an enterprise has failed, or Soundness Act of 1992 (12 U.S.C. 4565) is lies in rural areas, and for mortgages for that there is a substantial probability that amended— housing for any other underserved market an enterprise will fail, to meet any housing (1) in the section heading, by inserting for very low-, low-, and moderate-income goal under this subpart, the Director shall ‘‘DUTY TO SERVE UNDERSERVED MAR- families that the Director identifies as lack- provide written notice to the enterprise of KETS AND’’ before ‘‘OTHER’’; ing adequate credit through conventional such a preliminary determination, the rea- (2) by striking subsection (b); lending sources. Such underserved markets sons for such determination, and the infor- (3) in subsection (a)— may be identified by borrower type, market mation on which the Director based the de- (A) in the matter preceding paragraph (1), segment, or geographic area.’’; and termination. by inserting ‘‘and to carry out the duty (5) by adding at the end the following new ‘‘(2) RESPONSE PERIOD.— under subsection (a) of this section’’ before subsection: ‘‘(A) IN GENERAL.—During the 30-day period ‘‘, each enterprise shall’’; ‘‘(c) EVALUATION AND REPORTING OF COM- beginning on the date on which an enterprise (B) in paragraph (3), by inserting ‘‘and’’ PLIANCE.— is provided notice under paragraph (1), the after the semicolon at the end; ‘‘(1) IN GENERAL.—Not later than 6 months enterprise may submit to the Director any (C) in paragraph (4), by striking ‘‘; and’’ after the effective date of the Federal Hous- written information that the enterprise con- and inserting a period; ing Finance Regulatory Reform Act of 2008, siders appropriate for consideration by the (D) by striking paragraph (5); and the Director shall establish a manner for Director in finally determining whether such (E) by redesignating such subsection as evaluating whether, and the extent to which, failure has occurred or whether the achieve- subsection (b); the enterprises have complied with the duty ment of such goal was or is feasible. (4) by inserting before subsection (b) (as so under subsection (a) to serve underserved ‘‘(B) EXTENDED PERIOD.—The Director may redesignated by paragraph (3)(E) of this sub- markets and for rating the extent of such extend the period under subparagraph (A) for section) the following new subsection: compliance. Using such method, the Director good cause for not more than 30 additional ‘‘(a) DUTY TO SERVE UNDERSERVED MAR- shall, for each year, evaluate such compli- days. KETS.— ance and rate the performance of each enter- ‘‘(C) SHORTENED PERIOD.—The Director ‘‘(1) DUTY.—In accordance with the purpose prise as to extent of compliance. The Direc- may shorten the period under subparagraph of the enterprises under section 301(3) of the tor shall include such evaluation and rating (A) for good cause.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00082 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5853

‘‘(D) FAILURE TO RESPOND.—The failure of submit a housing plan to the Director, which ‘‘(4) the enterprise has violated any provi- an enterprise to provide information during may not be more than 45 days after the en- sion of part 2 of this title or any order, rule, the 30-day period under this paragraph (as terprise is provided notice. The Director may or regulation under part 2; extended or shortened) shall waive any right extend the deadline to the extent that the ‘‘(5) the enterprise has failed to submit a of the enterprise to comment on the pro- Director determines necessary. Any exten- housing plan or perform its responsibilities posed determination or action of the Direc- sion of the deadline shall be in writing and under a remedial order that substantially tor. for a time certain. complies with section 1336(c) within the ap- ‘‘(3) CONSIDERATION OF INFORMATION AND ‘‘(4) APPROVAL.—The Director shall review plicable period; or FINAL DETERMINATION.— each submission by an enterprise, including ‘‘(6) the enterprise has failed to comply ‘‘(A) IN GENERAL.—After the expiration of a housing plan submitted under this sub- with a housing plan under section 1336(c). the response period under paragraph (2), or section, and, not later than 30 days after sub- ‘‘(b) PROCEDURE.— upon receipt of information provided during mission, approve or disapprove the plan or ‘‘(1) NOTICE OF CHARGES.—Each notice of such period by the enterprise, whichever oc- other action. The Director may extend the charges issued under this section shall con- curs earlier, the Director shall issue a final period for approval or disapproval for a sin- tain a statement of the facts constituting determination on— gle additional 30-day period if the Director the alleged conduct and shall fix a time and ‘‘(i) whether the enterprise has failed, or determines it necessary. The Director shall place at which a hearing will be held to de- there is a substantial probability that the approve any plan that the Director deter- termine on the record whether an order to enterprise will fail, to meet the housing goal; mines is likely to succeed, and conforms cease and desist from such conduct should and with the Federal National Mortgage Associa- issue. ‘‘(ii) whether (taking into consideration tion Charter Act or the Federal Home Loan ‘‘(2) ISSUANCE OF ORDER.—If the Director market and economic conditions and the fi- Mortgage Corporation Act (as applicable), finds on the record made at a hearing de- nancial condition of the enterprise) the this title, and any other applicable provision scribed in paragraph (1) that any conduct achievement of the housing goal was or is of law. specified in the notice of charges has been feasible. ‘‘(5) NOTICE OF APPROVAL AND DIS- established (or the enterprise consents pur- ‘‘(B) CONSIDERATIONS.—In making a final APPROVAL.—The Director shall provide writ- suant to section 1342(a)(4)), the Director may determination under subparagraph (A), the ten notice to any enterprise submitting a issue and serve upon the enterprise an order Director shall take into consideration any housing plan of the approval or disapproval requiring the enterprise to— relevant information submitted by the enter- of the plan (which shall include the reasons ‘‘(A) comply with the goals; prise during the response period. for any disapproval of the plan) and of any ‘‘(B) submit a report under section 1327; ‘‘(C) NOTICE.—The Director shall provide extension of the period for approval or dis- ‘‘(C) comply with any provision of part 2 of written notice, including a response to any approval. this title or any order, rule, or regulation information submitted during the response ‘‘(6) RESUBMISSION.—If the initial housing under part 2; period, to the enterprise, the Committee on plan submitted by an enterprise under this ‘‘(D) submit a housing plan in compliance Banking, Housing, and Urban Affairs of the section is disapproved, the enterprise shall with section 1336(c); Senate, and the Committee on Financial submit an amended plan acceptable to the ‘‘(E) comply with the housing plan in com- Services of the House of Representatives, Director not later than 15 days after such pliance with section 1336(c); or of— disapproval, or such longer period that the ‘‘(F) provide the information required ‘‘(i) each final determination under this Director determines is in the public interest. under subsection (m) or (n) of section 309 of paragraph that an enterprise has failed, or ‘‘(7) ADDITIONAL REMEDIES FOR FAILURE TO the Federal National Mortgage Association that there is a substantial probability that MEET GOALS.—In addition to ordering a hous- Charter Act, or subsection (e) or (f) of sec- the enterprise will fail, to meet a housing ing plan under this section, issuing cease and tion 307 of the Federal Home Loan Mortgage goal; desist orders under section 1341, and ordering Corporation Act. ‘‘(ii) each final determination that the civil money penalties under section 1345, the ‘‘(c) EFFECTIVE DATE.—An order under this achievement of a housing goal was or is fea- Director may— section shall become effective upon the expi- sible; and ‘‘(A) seek other actions when an enterprise ration of the 30-day period beginning on the ‘‘(iii) the reasons for each such final deter- mination. fails to meet a goal; and date of service of the order upon the enter- ‘‘(c) CEASE AND DESIST, CIVIL MONEY PEN- ‘‘(B) exercise appropriate enforcement au- prise (except in the case of an order issued ALTIES, AND REMEDIES INCLUDING HOUSING thority available to the Director under this upon consent, which shall become effective PLANS.— Act.’’. at the time specified therein), and shall re- ‘‘(1) REQUIREMENT.—If the Director finds, (b) CONFORMING AMENDMENT.—The heading main effective and enforceable as provided in pursuant to subsection (b), that there is a for subpart C of part 2 of subtitle A of the the order, except to the extent that the order substantial probability that an enterprise Federal Housing Enterprises Financial Safe- is stayed, modified, terminated, or set aside will fail, or has actually failed, to meet any ty and Soundness Act of 1992 is amended to by action of the Director or otherwise, as housing goal under this subpart, and that the read as follows: provided in this subpart.’’. (d) CIVIL MONEY PENALTIES.— achievement of the housing goal was or is ‘‘Subpart C—Enforcement’’. feasible, the Director may require that the (1) REPEAL.—Section 1345 of the Federal (c) CEASE AND DESIST PROCEEDINGS.— enterprise submit a housing plan under this Housing Enterprises Financial Safety and (1) REPEAL.—Section 1341 of the Federal subsection. If the Director makes such a Soundness Act of 1992 (12 U.S.C. 4585) is here- Housing Enterprises Financial Safety and finding and the enterprise refuses to submit by repealed. Soundness Act of 1992 (12 U.S.C. 4581) is here- such a plan, submits an unacceptable plan, (2) CIVIL MONEY PENALTIES.—The Federal by repealed. fails to comply with the plan, or the Director Housing Enterprises Financial Safety and (2) CEASE AND DESIST PROCEEDINGS.—The finds that the enterprise has failed to meet Soundness Act of 1992 is amended by insert- Federal Housing Enterprises Financial Safe- any housing goal under this subpart, in addi- ing after section 1344 the following: ty and Soundness Act of 1992 is amended by tion to requiring an enterprise to submit a ‘‘SEC. 1345. CIVIL MONEY PENALTIES. inserting before section 1342 the following: housing plan, the Director may issue a cease ‘‘(a) AUTHORITY.—The Director may impose and desist order in accordance with section ‘‘SEC. 1341. CEASE AND DESIST PROCEEDINGS. a civil money penalty, in accordance with 1341, impose civil money penalties in accord- ‘‘(a) GROUNDS FOR ISSUANCE.—The Director the provisions of this section, on any enter- ance with section 1345, or order other rem- may issue and serve a notice of charges prise that has failed to— edies as set forth in paragraph (7). under this section upon an enterprise if the ‘‘(1) meet any housing goal established ‘‘(2) HOUSING PLAN.—If the Director re- Director determines that— under subpart B, following a written notice quires a housing plan under this subsection, ‘‘(1) the enterprise has failed to meet any and determination of such failure in accord- such a plan shall be— housing goal established under subpart B, ance with section 1336(b); ‘‘(A) a feasible plan describing the specific following a written notice and determination ‘‘(2) submit a report under section 1327, fol- actions the enterprise will take— of such failure in accordance with section lowing a notice of such failure, an oppor- ‘‘(i) to achieve the goal for the next cal- 1336; tunity for comment by the enterprise, and a endar year; and ‘‘(2) the enterprise has failed to submit a final determination by the Director; ‘‘(ii) if the Director determines that there report under section 1327, following a notice ‘‘(3) submit the information required under is a substantial probability that the enter- of such failure, an opportunity for comment subsection (m) or (n) of section 309 of the prise will fail to meet a goal in the current by the enterprise, and a final determination Federal National Mortgage Association year, to make such improvements and by the Director; Charter Act or subsection (e) or (f) of section changes in its operations as are reasonable ‘‘(3) the enterprise has failed to submit the 307 of the Federal Home Loan Mortgage Cor- in the remainder of such year; and information required under subsection (m) or poration Act; ‘‘(B) sufficiently specific to enable the Di- (n) of section 309 of the Federal National ‘‘(4) comply with any provision of part 2 of rector to monitor compliance periodically. Mortgage Association Charter Act, sub- this title or any order, rule, or regulation ‘‘(3) DEADLINE FOR SUBMISSION.—The Direc- section (e) or (f) of section 307 of the Federal under part 2; tor shall establish a deadline for an enter- Home Loan Mortgage Corporation Act, or ‘‘(5) submit a housing plan or perform its prise to comply with any remedial action or section 1337 of this title; responsibilities under a remedial order

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00083 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5854 CONGRESSIONAL RECORD — SENATE June 19, 2008

issued pursuant to section 1336(c) within the Enterprises Financial Safety and Soundness ‘‘(f) LIMITATION.—No funds under this title required period; or Act of 1992 (12 U.S.C. 4581 et seq.) is amended may be used in conjunction with property ‘‘(6) comply with a housing plan for the en- by striking ‘‘Secretary’’ each place that taken by eminent domain, unless eminent terprise under section 1336(c). term appears and inserting ‘‘Director’’ in domain is employed only for a public use, ex- ‘‘(b) AMOUNT OF PENALTY.—The amount of each of— cept that, for purposes of this section, public a penalty under this section, as determined (A) section 1342 (12 U.S.C. 4582); use shall not be construed to include eco- by the Director, may not exceed— (B) section 1343 (12 U.S.C. 4583); nomic development that primarily benefits ‘‘(1) for any failure described in paragraph (C) section 1346 (12 U.S.C. 4586); any private entity. (1), (5), or (6) of subsection (a), $100,000 for (D) section 1347 (12 U.S.C. 4587); and ‘‘SEC. 1338. HOUSING TRUST FUND. each day that the failure occurs; and (E) section 1348 (12 U.S.C. 4588). ‘‘(a) ESTABLISHMENT AND PURPOSE.—The ‘‘(2) for any failure described in paragraph SEC. 1131. AFFORDABLE HOUSING PROGRAMS. Secretary of Housing and Urban Develop- (2), (3), or (4) of subsection (a), $50,000 for (a) REPEAL.—Section 1337 of the Federal ment (in this section referred to as the ‘Sec- each day that the failure occurs. Housing Enterprises Financial Safety and retary’) shall establish and manage a Hous- ‘‘(c) PROCEDURES.— Soundness Act of 1992 (12 U.S.C. 4567) is here- ing Trust Fund, which shall be funded with ‘‘(1) ESTABLISHMENT.—The Director shall by repealed. amounts allocated by the enterprises under establish standards and procedures gov- (b) ANNUAL HOUSING REPORT.—The Federal section 1337 and any amounts as are or may erning the imposition of civil money pen- Housing Enterprises Financial Safety and be appropriated, transferred, or credited to alties under this section. Such standards and Soundness Act of 1992 (12 U.S.C. 1301 et seq.) such Housing Trust Fund under any other procedures— is amended by inserting after section 1336 provisions of law. The purpose of the Hous- ‘‘(A) shall provide for the Director to no- the following: ing Trust Fund under this section is to pro- tify the enterprise in writing of the deter- ‘‘SEC. 1337. AFFORDABLE HOUSING ALLOCA- vide grants to States for use— mination of the Director to impose the pen- TIONS. ‘‘(1) to increase and preserve the supply of alty, which shall be made on the record; ‘‘(a) SET ASIDE AND ALLOCATION OF rental housing for extremely low- and very ‘‘(B) shall provide for the imposition of a AMOUNTS BY ENTERPRISES.—Subject to sub- low-income families, including homeless penalty only after the enterprise has been section (b), in each fiscal year— families; and given an opportunity for a hearing on the ‘‘(1) the Federal Home Loan Mortgage Cor- ‘‘(2) to increase homeownership for ex- record pursuant to section 1342; and poration shall— tremely low- and very low-income families. ‘‘(C) may provide for review by the Direc- ‘‘(A) set aside an amount equal to 4.2 basis ‘‘(b) ALLOCATIONS FOR HOPE BOND PAY- tor of any determination or order, or inter- points for each dollar of the unpaid principal MENTS.— locutory ruling, arising from a hearing. balance of its total new business purchases; ‘‘(1) IN GENERAL.—Notwithstanding sub- ‘‘(2) FACTORS IN DETERMINING AMOUNT OF and section (c), to help address the mortgage cri- PENALTY.—In determining the amount of a ‘‘(B) allocate or otherwise transfer— sis, of the amounts allocated pursuant to penalty under this section, the Director shall ‘‘(i) 65 percent of such amounts to the Sec- clauses (i) and (ii) of section 1337(a)(1)(B) and give consideration to factors including— retary of Housing and Urban Development to clauses (i) and (ii) of section 1337(a)(2)(B) in ‘‘(A) the gravity of the offense; fund the Housing Trust Fund established excess of amounts described in section ‘‘(B) any history of prior offenses; under section 1338; and 1337(e)— ‘‘(C) ability to pay the penalty; ‘‘(ii) 35 percent of such amounts to fund ‘‘(A) 100 percent of such excess shall be ‘‘(D) injury to the public; the Capital Magnet Fund established pursu- used to reimburse the Treasury for payments ‘‘(E) benefits received; ant to section 1339; and made pursuant to section 257(w)(1)(C) of the ‘‘(F) deterrence of future violations; ‘‘(2) the Federal National Mortgage Asso- National Housing Act in calendar year 2009; ‘‘(G) the length of time that the enterprise ciation shall— ‘‘(B) 50 percent of such excess shall be used should reasonably take to achieve the goal; ‘‘(A) set aside an amount equal to 4.2 basis to reimburse the Treasury for such payments and points for each dollar of unpaid principal in calendar year 2010; and ‘‘(H) such other factors as the Director balance of its total new business purchases; ‘‘(C) 25 percent of such excess shall be used may determine, by regulation, to be appro- and to reimburse the Treasury for such payments priate. ‘‘(B) allocate or otherwise transfer— in calendar year 2011. ‘‘(d) ACTION TO COLLECT PENALTY.—If an ‘‘(i) 65 percent of such amounts to the Sec- ‘‘(2) EXCESS FUNDS.—At the termination of enterprise fails to comply with an order by retary of Housing and Urban Development to the HOPE for Homeowners Program estab- the Director imposing a civil money penalty fund the Housing Trust Fund established lished under section 257 of the National under this section, after the order is no under section 1338; and Housing Act, if amounts used to reimburse longer subject to review, as provided in sec- ‘‘(ii) 35 percent of such amounts to fund the Treasury under paragraph (1) exceed the tions 1342 and 1343, the Director may bring the Capital Magnet Fund established pursu- total net cost to the Government of the an action in the United States District Court ant to section 1339. HOPE for Homeowners Program, such for the District of Columbia to obtain a mon- ‘‘(b) SUSPENSION OF CONTRIBUTIONS.—The etary judgment against the enterprise, and Director shall temporarily suspend alloca- amounts shall be used for their original pur- such other relief as may be available. The tions under subsection (a) by an enterprise pose, as described in paragraphs (1)(B) and monetary judgment may, in the court’s dis- upon a finding by the Director that such al- (2)(B) of section 1337(a). cretion, include the attorneys’ fees and other locations— ‘‘(3) TREASURY FUND.—The amounts re- expenses incurred by the United States in ‘‘(1) are contributing, or would contribute, ferred to in subparagraphs (A) through (C) of connection with the action. In an action to the financial instability of the enterprise; paragraph (1) shall be deposited into a fund under this subsection, the validity and ap- ‘‘(2) are causing, or would cause, the enter- established in the Treasury of the United propriateness of the order imposing the pen- prise to be classified as undercapitalized; or States by the Secretary of the Treasury for alty shall not be subject to review. ‘‘(3) are preventing, or would prevent, the such purpose. ‘‘(e) SETTLEMENT BY DIRECTOR.—The Direc- enterprise from successfully completing a ‘‘(c) ALLOCATION FOR HOUSING TRUST FUND tor may compromise, modify, or remit any capital restoration plan under section 1369C. IN FISCAL YEAR 2010 AND SUBSEQUENT civil money penalty which may be, or has ‘‘(c) PROHIBITION OF PASS-THROUGH OF COST YEARS.— been, imposed under this section. OF ALLOCATIONS.—The Director shall, by reg- ‘‘(1) IN GENERAL.—Except as provided in ‘‘(f) DEPOSIT OF PENALTIES.—The Director ulation, prohibit each enterprise from re- subsection (b), the Secretary shall distribute shall use any civil money penalties collected directing the costs of any allocation required the amounts allocated for the Housing Trust under this section to help fund the Housing under this section, through increased Fund under this section to provide affordable Trust Fund established under section 1338.’’. charges or fees, or decreased premiums, or in housing as described in this subsection. (e) DIRECTOR AUTHORITY.— any other manner, to the originators of ‘‘(2) PERMISSIBLE DESIGNEES.—A State re- (1) AUTHORITY TO BRING A CIVIL ACTION.— mortgages purchased or securitized by the ceiving grant amounts under this subsection Section 1344(a) of the Federal Housing Enter- enterprise. may designate a State housing finance agen- prises Financial Safety and Soundness Act of ‘‘(d) ENFORCEMENT OF REQUIREMENTS ON cy, housing and community development en- 1992 (12 U.S.C. 4584) is amended by striking ENTERPRISE.—Compliance by the enterprises tity, tribally designated housing entity (as ‘‘The Secretary may request the Attorney with the requirements under this section such term is defined in section 4 of the Na- General of the United States to bring a civil shall be enforceable under subpart C. Any tive American Housing Assistance and Self- action’’ and inserting ‘‘The Director may reference in such subpart to this part or to Determination Act of 1997 (25 U.S.C. 4103)), or bring a civil action’’. an order, rule, or regulation under this part any other qualified instrumentality of the (2) SUBPOENA ENFORCEMENT.—Section specifically includes this section and any State to receive such grant amounts. 1348(c) of the Federal Housing Enterprises order, rule, or regulation under this section. ‘‘(3) DISTRIBUTION TO STATES BY NEEDS- Financial Safety and Soundness Act of 1992 ‘‘(e) REQUIRED AMOUNT FOR HOPE RESERVE BASED FORMULA.— (12 U.S.C. 4588(c)) is amended by inserting FUND.—Of the aggregate amount allocated ‘‘(A) IN GENERAL.—The Secretary shall, by ‘‘may bring an action or’’ before ‘‘may re- under subsection (a), 25 percent shall be de- regulation, establish a formula within 12 quest’’. posited into a fund established in the Treas- months of the date of enactment of the Fed- (3) CONFORMING AMENDMENTS.—Subpart C ury of the United States by the Secretary of eral Housing Finance Regulatory Reform of part 2 of subtitle A of the Federal Housing the Treasury for such purpose. Act of 2008, to distribute amounts made

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00084 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5855 available under this subsection to each State ‘‘(i) set forth a plan for the distribution of ‘‘(ii) has an initial purchase price that to provide affordable housing to extremely grant amounts received by the State or meets the requirements of section 215(b)(1) of low- and very low-income households. State designated entity for such year; the Cranston-Gonzalez National Affordable ‘‘(B) BASIS FOR FORMULA.—The formula re- ‘‘(ii) be based on priority housing needs, as Housing Act; quired under subparagraph (A) shall include determined by the State or State designated ‘‘(iii) is subject to the same resale restric- the following: entity in accordance with the regulations es- tions established under section 215(b)(3) of ‘‘(i) The ratio of the shortage of standard tablished under subsection (g)(2)(C); the Cranston-Gonzalez National Affordable rental units both affordable and available to ‘‘(iii) comply with paragraph (6); and Housing Act and applicable to the partici- extremely low-income renter households in ‘‘(iv) include performance goals that com- pating jurisdiction that is the State in which the State to the aggregate shortage of stand- ply with the requirements established by the such housing is located; and ard rental units both affordable and avail- Secretary pursuant to subsection (g)(2). ‘‘(iv) is made available for purchase only able to extremely low-income renter house- ‘‘(B) ESTABLISHMENT.—In establishing an by, or in the case of assistance under this holds in all the States. allocation plan under this paragraph, a State subsection, is made available only to home- ‘‘(ii) The ratio of the shortage of standard or State designated entity shall— buyers who have, before purchase completed rental units both affordable and available to ‘‘(i) notify the public of the establishment a program of independent financial edu- very low-income renter households in the of the plan; cation and counseling from an eligible orga- State to the aggregate shortage of standard ‘‘(ii) provide an opportunity for public nization that meets the requirements of sec- rental units both affordable and available to comments regarding the plan; tion 132 of the Federal Housing Finance Reg- very low-income renter households in all the ‘‘(iii) consider any public comments re- ulatory Reform Act of 2008. States. ceived regarding the plan; and ‘‘(8) ELIGIBLE RECIPIENTS.—Grant amounts ‘‘(iii) The ratio of extremely low-income ‘‘(iv) make the completed plan available to allocated to a State or State designated enti- renter households in the State living with ei- the public. ty under this subsection may be provided ther (I) incomplete kitchen or plumbing fa- ‘‘(C) CONTENTS.—An allocation plan of a only to a recipient that is an organization, cilities, (II) more than 1 person per room, or State or State designated entity under this agency, or other entity (including a for-prof- (III) paying more than 50 percent of income paragraph shall set forth the requirements it entity or a nonprofit entity) that— for housing costs, to the aggregate number for eligible recipients under paragraph (8) to ‘‘(A) has demonstrated experience and ca- of extremely low-income renter households apply for such grant amounts, including a re- pacity to conduct an eligible activity under living with either (IV) incomplete kitchen or quirement that each such application in- paragraph (7), as evidenced by its ability to— plumbing facilities, (V) more than 1 person clude— ‘‘(i) own, construct or rehabilitate, man- per room, or (VI) paying more than 50 per- ‘‘(i) a description of the eligible activities age, and operate an affordable multifamily cent of income for housing costs in all the to be conducted using such assistance; and rental housing development; States. ‘‘(ii) a certification by the eligible recipi- ‘‘(ii) design, construct or rehabilitate, and ‘‘(iv) The ratio of very low-income renter ent applying for such assistance that any market affordable housing for homeowner- households in the State paying more than 50 housing units assisted with such assistance ship; or percent of income on rent relative to the ag- will comply with the requirements under ‘‘(iii) provide forms of assistance, such as gregate number of very low-income renter this section. down payments, closing costs, or interest households paying more than 50 percent of ‘‘(6) SELECTION OF ACTIVITIES FUNDED USING rate buy-downs for purchasers; income on rent in all the States. HOUSING TRUST FUND GRANT AMOUNTS.—Grant ‘‘(B) demonstrates the ability and financial ‘‘(v) The resulting sum calculated from the amounts received by a State or State des- capacity to undertake, comply, and manage factors described in clauses (i) through (iv) ignated entity under this subsection may be the eligible activity; shall be multiplied by the relative cost of used, or committed for use, only for activi- ‘‘(C) demonstrates its familiarity with the construction in the State. For purposes of ties that— requirements of any other Federal, State, or this subclause, the term ‘cost of construc- ‘‘(A) are eligible under paragraph (7) for local housing program that will be used in tion’— such use; conjunction with such grant amounts to en- ‘‘(I) means the cost of construction or ‘‘(B) comply with the applicable allocation sure compliance with all applicable require- building rehabilitation in the State relative plan of the State or State designated entity ments and regulations of such programs; and to the national cost of construction or build- under paragraph (5); and ‘‘(D) makes such assurances to the State or ing rehabilitation; and ‘‘(C) are selected for funding by the State State designated entity as the Secretary ‘‘(II) shall be calculated such that values or State designated entity in accordance shall, by regulation, require to ensure that higher than 1.0 indicate that the State’s con- with the process and criteria for such selec- the recipient will comply with the require- struction costs are higher than the national tion established pursuant to subsection ments of this subsection during the entire average, a value of 1.0 indicates that the (g)(2)(C). period that begins upon selection of the re- State’s construction costs are exactly the ‘‘(7) ELIGIBLE ACTIVITIES.—Grant amounts same as the national average, and values allocated to a State or State designated enti- cipient to receive such grant amounts and lower than 1.0 indicate that the State’s cost ty under this subsection shall be eligible for ending upon the conclusion of all activities of construction are lower than the national use, or for commitment for use, only for as- under paragraph (8) that are engaged in by average. sistance for— the recipient and funded with such grant ‘‘(C) PRIORITY.—The formula required ‘‘(A) the production, preservation, and re- amounts. under subparagraph (A) shall give priority habilitation of rental housing, including ‘‘(9) LIMITATIONS ON USE.— emphasis and consideration to the factor de- housing under the programs identified in sec- ‘‘(A) REQUIRED AMOUNT FOR HOMEOWNERSHIP scribed in subparagraph (B)(i). tion 1335(a)(2)(B) and for operating costs, ex- ACTIVITIES.—Of the aggregate amount allo- ‘‘(4) ALLOCATION OF GRANT AMOUNTS.— cept that not less than 75 percent of such cated to a State or State designated entity ‘‘(A) NOTICE.—Not later than 60 days after grant amounts shall be used for the benefit under this subsection not more than 10 per- the date that the Secretary determines the only of extremely low-income families and cent shall be used for activities under sub- formula amounts described in paragraph (3), not more than 25 percent for the benefit only paragraph (B) of paragraph (7). the Secretary shall caused to be published in of very low-income families; and ‘‘(B) DEADLINE FOR COMMITMENT OR USE.— the Federal Register a notice that such ‘‘(B) the production, preservation, and re- Grant amounts allocated to a State or State amounts shall be so available. habilitation of housing for homeownership, designated entity under this subsection shall ‘‘(B) GRANT AMOUNT.—In each fiscal year including such forms as down payment as- be used or committed for use within 2 years other than fiscal year 2009, the Secretary sistance, closing cost assistance, and assist- of the date that such grant amounts are shall make a grant to each State in an ance for interest rate buy-downs, that— made available to the State or State des- amount that is equal to the formula amount ‘‘(i) is available for purchase only for use ignated entity. The Secretary shall recap- determined under paragraph (3) for that as a principal residence by families that ture any such amounts not so used or com- State. qualify both as— mitted for use and reallocate such amounts ‘‘(C) MINIMUM STATE ALLOCATIONS.—If the ‘‘(I) extremely low- and very low-income under this subsection in the first year after formula amount determined under paragraph families at the times described in subpara- such recapture. (3) for a fiscal year would allocate less than graphs (A) through (C) of section 215(b)(2) of ‘‘(C) USE OF RETURNS.—The Secretary $3,000,000 to any State, the allocation for the Cranston-Gonzalez National Affordable shall, by regulation, provide that any return such State shall be $3,000,000, and the in- Housing Act (42 U.S.C. 12745(b)(2)); and on a loan or other investment of any grant crease shall be deducted pro rata from the al- ‘‘(II) first-time homebuyers, as such term amount used by a State or State designated locations made to all other States. is defined in section 104 of the Cranston-Gon- entity to provide a loan under this sub- ‘‘(5) ALLOCATION PLANS REQUIRED.— zalez National Affordable Housing Act (42 section shall be treated, for purposes of ‘‘(A) IN GENERAL.—For each year that a U.S.C. 12704), except that any reference in availability to and use by the State or State State or State designated entity receives a such section to assistance under title II of designated entity, as a grant amount author- grant under this subsection, the State or such Act shall for purposes of this subsection ized under this subsection. State designated entity shall establish an al- be considered to refer to assistance from af- ‘‘(D) PROHIBITED USES.—The Secretary location plan. Such plan shall— fordable housing fund grant amounts; shall, by regulation—

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00085 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5856 CONGRESSIONAL RECORD — SENATE June 19, 2008 ‘‘(i) set forth prohibited uses of grant issued under this section, and any require- ‘‘(iv) terminate any assistance under this amounts allocated under this subsection, ments or conditions under which such section to the State or State designated en- which shall include use for— amounts were provided; and tity. ‘‘(I) political activities; ‘‘(ii) establish minimum requirements for ‘‘(f) DEFINITIONS.—For purposes of this sec- ‘‘(II) advocacy; agreements, between the State or State des- tion, the following definitions shall apply: ‘‘(III) lobbying, whether directly or ignated entity and recipients, regarding as- ‘‘(1) EXTREMELY LOW-INCOME RENTER HOUSE- through other parties; sistance under this section, which shall in- HOLD.—The term ‘extremely low-income ‘‘(IV) counseling services; clude— renter household’ means a household whose ‘‘(V) travel expenses; and ‘‘(I) appropriate periodic financial and income is not in excess of 30 percent of the ‘‘(VI) preparing or providing advice on tax project reporting, record retention, and area median income, with adjustments for smaller and larger families, as determined returns; audit requirements for the duration of the by the Secretary. ‘‘(ii) provide that, except as provided in assistance to the recipient to ensure compli- clause (iii), grant amounts of a State or ‘‘(2) RECIPIENT.—The term ‘recipient’ ance with the limitations and requirements State designated entity may not be used for means an individual or entity that receives of this section and the regulations under this administrative, outreach, or other costs of— assistance from a State or State designated section; and ‘‘(I) the State or State designated entity; entity from amounts made available to the or ‘‘(II) any other requirements that the Sec- State or State designated entity under this ‘‘(II) any other recipient of such grant retary determines are necessary to ensure section. amounts; and appropriate administration and compliance. ‘‘(3) SHORTAGE OF STANDARD RENTAL UNITS ‘‘(iii) limit the amount of any grant ‘‘(B) MISUSE OF FUNDS.— BOTH AFFORDABLE AND AVAILABLE TO EX- amounts for a year that may be used by the ‘‘(i) REIMBURSEMENT REQUIREMENT.—If any TREMELY LOW-INCOME RENTER HOUSEHOLDS.— State or State designated entity for adminis- recipient of assistance under this section is ‘‘(A) IN GENERAL.—The term ‘shortage of trative costs of carrying out the program re- determined, in accordance with clause (ii), to standard rental units both affordable and quired under this subsection, including home have used any such amounts in a manner available to extremely low-income renter ownership counseling, to a percentage of that is materially in violation of this sec- households’ means for any State or other such grant amounts of the State or State tion, the regulations issued under this sec- geographical area the gap between— designated entity for such year, which may tion, or any requirements or conditions ‘‘(i) the number of units with complete not exceed 10 percent. under which such amounts were provided, plumbing and kitchen facilities with a rent ‘‘(E) PROHIBITION OF CONSIDERATION OF USE the State or State designated entity shall re- that is 30 percent or less of 30 percent of the FOR MEETING HOUSING GOALS OR DUTY TO quire that, within 12 months after the deter- adjusted area median income as determined SERVE.—In determining compliance with the mination of such misuse, the recipient shall by the Secretary that are occupied by ex- housing goals under this subpart and the reimburse the State or State designated en- tremely low-income renter households or are duty to serve underserved markets under tity for such misused amounts and return to vacant for rent; and section 1335, the Director may not consider the State or State designated entity any ‘‘(ii) the number of extremely low-income any grant amounts used under this section such amounts that remain unused or uncom- renter households. for eligible activities under paragraph (7). mitted for use. The remedies under this ‘‘(B) RULE OF CONSTRUCTION.—If the num- The Director shall give credit toward the clause are in addition to any other remedies ber of units described in subparagraph (A)(i) achievement of such housing goals and such that may be available under law. exceeds the number of extremely low-income duty to serve underserved markets to pur- ‘‘(ii) DETERMINATION.—A determination is households as described in subparagraph chases by the enterprises of mortgages for made in accordance with this clause if the (A)(ii), there is no shortage. housing that receives funding from such determination is made by the Secretary or ‘‘(4) SHORTAGE OF STANDARD RENTAL UNITS grant amounts, but only to the extent that made by the State or State designated enti- BOTH AFFORDABLE AND AVAILABLE TO VERY such purchases by the enterprises are funded ty, provided that— LOW-INCOME RENTER HOUSEHOLDS.— other than with such grant amounts. ‘‘(I) the State or State designated entity ‘‘(A) IN GENERAL.—The term ‘shortage of ‘‘(d) REDUCTION FOR FAILURE TO OBTAIN RE- provides notification of the determination to standard rental units both affordable and TURN OF MISUSED FUNDS.—If in any year a the Secretary for review, in the discretion of available to very low-income renter house- State or State designated entity fails to ob- the Secretary, of the determination; and holds’ means for any State or other geo- tain reimbursement or return of the full ‘‘(II) the Secretary does not subsequently graphical area the gap between— amount required under subsection (e)(1)(B) reverse the determination. ‘‘(i) the number of units with complete to be reimbursed or returned to the State or plumbing and kitchen facilities with a rent ‘‘(2) GRANTEES.— State designated entity during such year— that is 30 percent or less of 50 percent of the ‘‘(A) REPORT.— ‘‘(1) except as provided in paragraph (2)— adjusted area median income as determined ‘‘(i) IN GENERAL.—The Secretary shall re- ‘‘(A) the amount of the grant for the State by the Secretary that are occupied by very quire each State or State designated entity or State designated entity for the succeeding low-income renter households or are vacant receiving grant amounts in any given year year, as determined pursuant to this section, for rent; and under this section to submit a report, for shall be reduced by the amount by which ‘‘(ii) the number of very low-income renter such year, to the Secretary that— such amounts required to be reimbursed or households. ‘‘(I) describes the activities funded under returned exceed the amount actually reim- ‘‘(B) RULE OF CONSTRUCTION.—If the num- this section during such year with such bursed or returned; and ber of units described in subparagraph (A)(i) grant amounts; and ‘‘(B) the amount of the grant for the suc- exceeds the number of very low-income ‘‘(II) the manner in which the State or ceeding year for each other State or State households as described in subparagraph State designated entity complied during designated entity whose grant is not reduced (A)(ii), there is no shortage. such year with any allocation plan estab- pursuant to subparagraph (A) shall be in- ‘‘(5) VERY LOW-INCOME FAMILY.—The term creased by the amount determined by apply- lished pursuant to subsection (c). ‘very low-income family’ has the meaning ing the formula established pursuant to this ‘‘(ii) PUBLIC AVAILABILITY.—The Secretary given such term in section 1303, except that section to the total amount of all reductions shall make such reports pursuant to this such term includes any family that resides for all State or State designated entities for subparagraph publicly available. in a rural area that has an income that does such year pursuant to subparagraph (A); or ‘‘(B) MISUSE OF FUNDS.—If the Secretary not exceed the poverty line (as such term is ‘‘(2) in any case in which such failure to determines, after reasonable notice and op- defined in section 673(2) of the Omnibus obtain reimbursement or return occurs dur- portunity for hearing, that a State or State Budget Reconciliation Act of 1981 (42 U.S.C. ing a year immediately preceding a year in designated entity has failed to comply sub- 9902(2)), including any revision required by which grants under this section will not be stantially with any provision of this section, such section) applicable to a family of the made, the State or State designated entity and until the Secretary is satisfied that size involved. shall pay to the Secretary for reallocation there is no longer any such failure to com- ‘‘(6) VERY LOW-INCOME RENTER HOUSE- among the other grantees an amount equal ply, the Secretary shall— HOLDS.—The term ‘very low-income renter to the amount of the reduction for the entity ‘‘(i) reduce the amount of assistance under households’ means a household whose in- that would otherwise apply under paragraph this section to the State or State designated come is in excess of 30 percent but not great- (1)(A). entity by an amount equal to the amount of er than 50 percent of the area median in- ‘‘(e) ACCOUNTABILITY OF RECIPIENTS AND grant amounts which were not used in ac- come, with adjustments for smaller and larg- GRANTEES.— cordance with this section; er families, as determined by the Secretary. ‘‘(1) RECIPIENTS.— ‘‘(ii) require the State or State designated ‘‘(g) REGULATIONS.— ‘‘(A) TRACKING OF FUNDS.—The Secretary entity to repay the Secretary any amount of ‘‘(1) IN GENERAL.—The Secretary shall issue shall— the grant which was not used in accordance regulations to carry out this section. ‘‘(i) require each State or State designated with this section; ‘‘(2) REQUIRED CONTENTS.—The regulations entity to develop and maintain a system to ‘‘(iii) limit the availability of assistance issued under this subsection shall include— ensure that each recipient of assistance under this section to the State or State des- ‘‘(A) a requirement that the Secretary en- under this section uses such amounts in ac- ignated entity to activities or recipients not sure that the use of grant amounts under cordance with this section, the regulations affected by such failure to comply; or this section by States or State designated

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00086 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5857 entities is audited not less than annually to ‘‘SEC. 1339. CAPITAL MAGNET FUND. gate funds available for grants during any ensure compliance with this section; ‘‘(a) ESTABLISHMENT.—There is established year from the Capital Magnet Fund. ‘‘(B) authority for the Secretary to audit, in the Treasury of the United States a trust ‘‘(2) GEOGRAPHIC DIVERSITY.— provide for an audit, or otherwise verify a fund to be known as the Capital Magnet ‘‘(A) GOAL.—The Secretary of the Treasury State or State designated entity’s activities Fund, which shall be a special account with- shall seek to fund activities in geographi- to ensure compliance with this section; in the Community Development Financial cally diverse areas of economic distress, in- ‘‘(C) requirements for a process for applica- Institutions Fund. cluding metropolitan and underserved rural tion to, and selection by, each State or State ‘‘(b) DEPOSITS TO TRUST FUND.—The Cap- areas in every State. designated entity for activities meeting the ital Magnet Fund shall consist of— ‘‘(B) DIVERSITY DEFINED.—For purposes of State or State designated entity’s priority ‘‘(1) any amounts transferred to the Fund this paragraph, geographic diversity includes housing needs to be funded with grant pursuant to section 1337; and those areas that meet objective criteria of amounts under this section, which shall pro- ‘‘(2) any amounts as are or may be appro- economic distress developed by the Sec- vide for priority in funding to be based priated, transferred, or credited to such retary of the Treasury, which may include— upon— Fund under any other provisions of law. ‘‘(i) the percentage of low-income families ‘‘(i) geographic diversity; ‘‘(c) EXPENDITURES FROM TRUST FUND.— or the extent of poverty; ‘‘(ii) ability to obligate amounts and un- Amounts in the Capital Magnet Fund shall ‘‘(ii) the rate of unemployment or under- dertake activities so funded in a timely man- be available to the Secretary of the Treasury employment; ner; to carry out a competitive grant program to ‘‘(iii) extent of blight and disinvestment; ‘‘(iii) in the case of rental housing projects attract private capital for and increase in- ‘‘(iv) projects that target extremely low-, under subsection (c)(7)(A), the extent to vestment in— very low-, and low-income families in or out- which rents for units in the project funded ‘‘(1) the development, preservation, reha- side a designated economic distress area; or are affordable, especially for extremely low- bilitation, or purchase of affordable housing ‘‘(v) any other criteria designated by the income families; for primarily extremely low-, very low-, and Secretary of the Treasury. ‘‘(iv) in the case of rental housing projects low-income families; and ‘‘(3) LEVERAGE OF FUNDS.—Each grant from under subsection (c)(7)(A), the extent of the ‘‘(2) economic development activities or the Capital Magnet Fund awarded under this duration for which such rents will remain af- community service facilities, such as day section shall be reasonably expected to re- fordable; care centers, workforce development centers, sult in eligible housing, or economic and ‘‘(v) the extent to which the application and health care clinics, which in conjunction community development projects that sup- makes use of other funding sources; and with affordable housing activities implement port or sustain an affordable housing project ‘‘(vi) the merits of an applicant’s proposed a concerted strategy to stabilize or revitalize funded by a grant under this section whose eligible activity; a low-income area or underserved rural area. aggregate costs total at least 10 times the ‘‘(D) requirements to ensure that grant ‘‘(d) FEDERAL ASSISTANCE.—All assistance grant amount. amounts provided to a State or State des- provided using amounts in the Capital Mag- ‘‘(4) COMMITMENT FOR USE DEADLINE.— ignated entity under this section that are net Fund shall be considered to be Federal fi- Amounts made available for grants under used for rental housing under subsection nancial assistance. this section shall be committed for use with- ‘‘(e) ELIGIBLE GRANTEES.—A grant under in 2 years of the date of such allocation. The (c)(7)(A) are used only for the benefit of ex- this section may be made, pursuant to such Secretary of the Treasury shall recapture tremely low- and very low-income families; requirements as the Secretary of the Treas- into the Capital Magnet Fund any amounts and ury shall establish for experience and success not so used or committed for use and allo- ‘‘(E) requirements and standards for estab- in attracting private financing and carrying cate such amounts in the first year after lishment, by a State or State designated en- out the types of activities proposed under such recapture. tity, for use of grant amounts in 2009 and the application of the grantee, only to— ‘‘(5) LOBBYING RESTRICTIONS.—No assist- subsequent years of performance goals, ‘‘(1) a Treasury certified community devel- ance or amounts made available under this benchmarks, and timetables for the produc- opment financial institution; or section may be expended by an eligible tion, preservation, and rehabilitation of af- ‘‘(2) a nonprofit organization having as 1 of grantee to pay any person to influence or at- fordable rental and homeownership housing its principal purposes the development or tempt to influence any agency, elected offi- with such grant amounts. management of affordable housing. cial, officer or employee of a State or local ‘‘(h) AFFORDABLE HOUSING TRUST FUND.— ‘‘(f) ELIGIBLE USES.—Grant amounts government in connection with the making, If, after the date of enactment of the Federal awarded from the Capital Magnet Fund pur- award, extension, continuation, renewal, Housing Finance Regulatory Reform Act of suant to this section may be used for the amendment, or modification of any State or 2008, in any year, there is enacted any provi- purposes described in paragraphs (1) and (2) local government contract, grant, loan, or sion of Federal law establishing an afford- of subsection (c), including for the following cooperative agreement as such terms are de- able housing trust fund other than under this uses: fined in section 1352 of title 31, United States title for use only for grants to provide af- ‘‘(1) To provide loan loss reserves. Code. fordable rental housing and affordable home- ‘‘(2) To capitalize a revolving loan fund. ‘‘(6) PROHIBITION OF CONSIDERATION OF USE ownership opportunities, and the subsequent ‘‘(3) To capitalize an affordable housing FOR MEETING HOUSING GOALS OR DUTY TO year is a year referred to in subsection (c), fund. SERVE.—In determining the compliance of the Secretary shall in such subsequent year ‘‘(4) To capitalize a fund to support activi- the enterprises with the housing goals under and any remaining years referred to in sub- ties described in subsection (c)(2). this section and the duty to serve under- section (c) transfer to such affordable hous- ‘‘(5) For risk-sharing loans. served markets under section 1335, the Direc- ing trust fund the aggregate amount allo- ‘‘(g) APPLICATIONS.— tor of the Federal Housing Finance Agency cated pursuant to subsection (c) in such ‘‘(1) IN GENERAL.—The Secretary of the may not consider any Capital Magnet Fund year. Notwithstanding any other provision of Treasury shall provide, in a competitive ap- amounts used under this section for eligible law, assistance provided using amounts plication process established by regulation, activities under subsection (f). The Director transferred to such affordable housing trust for eligible grantees under subsection (e) to of the Federal Housing Finance Agency shall fund pursuant to this subsection may not be submit applications for Capital Magnet Fund give credit toward the achievement of such used for any of the activities specified in grants to the Secretary at such time and in housing goals and such duty to serve under- clauses (i) through (vi) of subsection such manner as the Secretary shall deter- served markets to purchases by the enter- (c)(9)(D). mine. prises of mortgages for housing that receives ‘‘(i) FUNDING ACCOUNTABILITY AND TRANS- ‘‘(2) CONTENT OF APPLICATION.—The appli- funding from Capital Magnet Fund grant PARENCY.—Any grant under this section to a cation required under paragraph (1) shall in- amounts, but only to the extent that such grantee by a State or State designated enti- clude a detailed description of— purchases by the enterprises are funded ty, any assistance provided to a recipient by ‘‘(A) the types of affordable housing, eco- other than with such grant amounts. a State or State designated entity, and any nomic, and community revitalization ‘‘(7) ACCOUNTABILITY OF RECIPIENTS AND grant, award, or other assistance from an af- projects that support or sustain residents of GRANTEES.— fordable housing trust fund referred to in an affordable housing project funded by a ‘‘(A) TRACKING OF FUNDS.—The Secretary of subsection (h) shall be considered a Federal grant under this section for which such grant the Treasury shall— award for purposes of the Federal Funding amounts would be used, including the pro- ‘‘(i) require each grantee to develop and Accountability and Transparency Act of 2006 posed use of eligible grants as authorized maintain a system to ensure that each re- (31 U.S.C. 6101 note). Upon the request of the under this section; cipient of assistance from the Capital Mag- Director of the Office of Management and ‘‘(B) the types, sources, and amounts of net Fund uses such amounts in accordance Budget, the Secretary shall obtain and pro- other funding for such projects; and with this section, the regulations issued vide such information regarding any such ‘‘(C) the expected time frame of any grant under this section, and any requirements or grants, assistance, and awards as the Direc- used for such project. conditions under which such amounts were tor of the Office of Management and Budget ‘‘(h) GRANT LIMITATION.— provided; and considers necessary to comply with the re- ‘‘(1) IN GENERAL.—Any 1 eligible grantee ‘‘(ii) establish minimum requirements for quirements of such Act, as applicable, pursu- and its subsidiaries and affiliates may not be agreements, between the grantee and the ant to the preceding sentence. awarded more than 15 percent of the aggre- Capital Magnet Fund, regarding assistance

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00087 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5858 CONGRESSIONAL RECORD — SENATE June 19, 2008 from the Capital Magnet Fund, which shall (2) assisting prospective homebuyers to de- shall submit a report on the results of such include— velop monthly budgets, build personal sav- study to the Committee on Banking, Hous- ‘‘(I) appropriate periodic financial and ings, finance or plan for major purchases, re- ing, and Urban Affairs of the Senate and the project reporting, record retention, and duce their debt, improve their financial sta- Committee on Financial Services of the audit requirements for the duration of the bility, and set and reach their financial House of Representatives. grant to the recipient to ensure compliance goals; (2) CONTENT OF STUDY.—The study required with the limitations and requirements of (3) helping prospective homebuyers to im- under paragraph (1) shall include an evalua- this section and the regulations under this prove their credit scores by understanding tion of the following: section; and the relationship between their credit his- (A) The effectiveness of the grant program ‘‘(II) any other requirements that the Sec- tories and their credit scores; and established under this section in improving retary determines are necessary to ensure (4) educating prospective homebuyers the financial situation of homeowners and appropriate grant administration and com- about the options available to build savings prospective homebuyers served by the grant pliance. for short- and long-term goals. program. ‘‘(B) MISUSE OF FUNDS.—If the Secretary of (b) GRANTS.— (B) The extent to which financial edu- the Treasury determines, after reasonable (1) IN GENERAL.—The Secretary of the cation and counseling services have resulted notice and opportunity for hearing, that a Treasury (in this section referred to as the in positive behavioral changes. grantee has failed to comply substantially ‘‘Secretary’’) shall make grants to eligible (C) The effectiveness and quality of the eli- with any provision of this section and until organizations to enable such organizations gible organizations providing financial edu- the Secretary is satisfied that there is no to provide a range of financial education and cation and counseling services under the longer any such failure to comply, the Sec- counseling services to prospective home- grant program. retary shall— buyers. (g) REGULATIONS.—The Secretary is au- ‘‘(i) reduce the amount of assistance under (2) SELECTION.—The Secretary shall select thorized to promulgate such regulations as this section to the grantee by an amount eligible organizations to receive assistance may be necessary to implement and admin- equal to the amount of Capital Magnet Fund under this section based on their experience ister the grant program authorized by this grant amounts which were not used in ac- and ability to provide financial education section. cordance with this section; and counseling services that result in docu- ‘‘(ii) require the grantee to repay the Sec- SEC. 1133. TRANSFER AND RIGHTS OF CERTAIN mented positive behavioral changes. HUD EMPLOYEES. retary any amount of the Capital Magnet (c) ELIGIBLE ORGANIZATIONS.— (a) TRANSFER.—Each employee of the De- Fund grant amounts which were not used in (1) IN GENERAL.—For purposes of this sec- partment of Housing and Urban Development accordance with this section; tion, the term ‘‘eligible organization’’ means whose position responsibilities primarily in- ‘‘(iii) limit the availability of assistance an organization that is— volve the establishment and enforcement of under this section to the grantee to activi- (A) certified in accordance with section the housing goals under subpart B of part 2 ties or recipients not affected by such failure 106(e)(1) of the Housing and Urban Develop- of subtitle A of the Federal Housing Enter- to comply; or ment Act of 1968 (12 U.S.C. 1701x(e)); or prises Financial Safety and Soundness Act of ‘‘(iv) terminate any assistance under this (B) certified by the Office of Financial 1992 (12 U.S.C. 4561 et seq.) shall be trans- section to the grantee. Education of the Department of the Treas- ferred to the Federal Housing Finance Agen- ‘‘(i) PERIODIC REPORTS.— ury for purposes of this section, in accord- cy for employment, not later than the effec- ‘‘(1) IN GENERAL.—The Secretary of the ance with paragraph (2). tive date of the Federal Housing Finance Treasury shall submit a report, on a periodic (2) OFE CERTIFICATION.—To be certified by Regulatory Reform Act of 2008, and such basis, to the Committee on Banking, Hous- the Office of Financial Education for pur- transfer shall be deemed a transfer of func- ing, and Urban Affairs of the Senate and the poses of this section, an eligible organization tion for purposes of section 3503 of title 5, Committee on Financial Services of the shall be— United States Code. House of Representatives describing the ac- (A) a housing counseling agency certified (b) GUARANTEED POSITIONS.— tivities to be funded under this section. by the Secretary of Housing and Urban De- (1) IN GENERAL.—Each employee trans- ‘‘(2) REPORTS AVAILABLE TO PUBLIC.—The velopment under section 106(e) of the Hous- ferred under subsection (a) shall be guaran- Secretary of the Treasury shall make the re- ing and Urban Development Act of 1968; teed a position with the same status, tenure, ports required under paragraph (1) publicly (B) a State, local, or tribal government grade, and pay as that held on the day imme- available. agency; diately preceding the transfer. ‘‘(j) REGULATIONS.— (C) a community development financial in- (2) NO INVOLUNTARY SEPARATION OR REDUC- ‘‘(1) IN GENERAL.—The Secretary of the stitution (as defined in section 103(5) of the TION.—An employee transferred under sub- Treasury shall issue regulations to carry out Community Development Banking and Fi- section (a) holding a permanent position on this section. nancial Institutions Act of 1994 (12 U.S.C. the day immediately preceding the transfer ‘‘(2) REQUIRED CONTENTS.—The regulations 4702(5)) or a credit union; or may not be involuntarily separated or re- issued under this subsection shall include— (D) any collaborative effort of entities de- duced in grade or compensation during the ‘‘(A) authority for the Secretary to audit, scribed in any of subparagraphs (A) through 12-month period beginning on the date of provide for an audit, or otherwise verify an (C). enterprise’s activities, to ensure compliance (d) AUTHORITY FOR PILOT PROJECTS.— transfer, except for cause, or, in the case of with this section; (1) IN GENERAL.—The Secretary of the a temporary employee, separated in accord- ‘‘(B) a requirement that the Secretary en- Treasury shall authorize not more than 5 ance with the terms of the appointment of sure that the allocation of each enterprise is pilot project grants to eligible organizations the employee. audited not less than annually to ensure under subsection (c) in order to— (c) APPOINTMENT AUTHORITY FOR EXCEPTED compliance with this section; and (A) carry out the services under this sec- AND SENIOR EXECUTIVE SERVICE EMPLOY- ‘‘(C) requirements for a process for applica- tion; and EES.— tion to, and selection by, the Secretary for (B) provide such other services that will (1) IN GENERAL.—In the case of an employee activities to be funded with amounts from improve the financial stability and economic occupying a position in the excepted service the Capital Magnet Fund, which shall pro- condition of low- and moderate-income and or the Senior Executive Service, any ap- vide that— low-wealth individuals. pointment authority established under law ‘‘(i) funds be fairly distributed to urban, (2) GOAL.—The goal of the pilot project or by regulations of the Office of Personnel suburban, and rural areas; and grants under this subsection is to— Management for filling such position shall ‘‘(ii) selection shall be based upon specific (A) identify successful methods resulting be transferred, subject to paragraph (2). criteria, including a prioritization of funding in positive behavioral change for financial (2) DECLINE OF TRANSFER.—The Director based upon— empowerment; and may decline a transfer of authority under ‘‘(I) the ability to use such funds to gen- (B) establish program models for organiza- paragraph (1) to the extent that such author- erate additional investments; tions to carry out effective counseling serv- ity relates to— ‘‘(II) affordable housing need (taking into ices. (A) a position excepted from the competi- account the distinct needs of different re- (e) AUTHORIZATION OF APPROPRIATIONS.— tive service because of its confidential, pol- gions of the country); and There are authorized to be appropriated to icymaking, policy-determining, or policy-ad- ‘‘(III) ability to obligate amounts and un- the Secretary such sums as are necessary to vocating character; or dertake activities so funded in a timely man- carry out this section and for the provision (B) a noncareer position in the Senior Ex- ner.’’. of additional financial educational services. ecutive Service (within the meaning of sec- SEC. 1132. FINANCIAL EDUCATION AND COUN- (f) STUDY AND REPORT ON EFFECTIVENESS tion 3132(a)(7) of title 5, United States Code). SELING. AND IMPACT.— (d) REORGANIZATION.—If the Director deter- (a) GOALS.—Financial education and coun- (1) IN GENERAL.—The Comptroller General mines, after the end of the 1-year period be- seling under this section shall have the goal of the United States shall conduct a study on ginning on the effective date of the Federal of— the effectiveness and impact of the grant Housing Finance Regulatory Reform Act of (1) increasing the financial knowledge and program established under this section. Not 2008, that a reorganization of the combined decision making capabilities of prospective later than 3 years after the date of enact- workforce is required, that reorganization homebuyers; ment of this Act, the Comptroller General shall be deemed a major reorganization for

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00088 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5859 purposes of affording affected employee re- (4) by striking subsection (b) and inserting ‘‘(B) will reduce the financial obligations tirement under section 8336(d)(2) or the following: of the regulated entity or otherwise improve 8414(b)(1)(B) of title 5, United States Code. the financial condition of the entity.’’. ‘‘(b) FEDERAL HOME LOAN BANKS.— (e) EMPLOYEE BENEFIT PROGRAMS.— ‘‘(1) ESTABLISHMENT AND CRITERIA.—For (b) REGULATIONS.—Not later than the expi- (1) IN GENERAL.—Any employee described purposes of this subtitle, the Director shall, ration of the 180-day period beginning on the under subsection (a) accepting employment date of enactment of this Act, the Director with the Agency as a result of a transfer by regulation— ‘‘(A) establish the capital classifications of the Federal Housing Finance Agency shall under subsection (a) may retain, for 12 issue regulations to carry out section 1364(b) months after the date on which such transfer specified under paragraph (2) for the Federal Home Loan Banks; of the Federal Housing Enterprises Financial occurs, membership in any employee benefit Safety and Soundness Act of 1992 (as added program of the Agency or the Department of ‘‘(B) establish criteria for each such capital classification based on the amount and types by this section), relating to capital classi- Housing and Urban Development, as applica- fications for the Federal Home Loan Banks. ble, including insurance, to which such em- of capital held by a bank and the risk-based, ployee belongs on such effective date, if— minimum, and critical capital levels for the SEC. 1143. SUPERVISORY ACTIONS APPLICABLE banks and taking due consideration of the TO UNDERCAPITALIZED REGULATED (A) the employee does not elect to give up ENTITIES. the benefit or membership in the program; capital classifications established under sub- Section 1365 of the Federal Housing Enter- and section (a) for the enterprises, with such (B) the benefit or program is continued by modifications as the Director determines to prises Financial Safety and Soundness Act of the Director of the Federal Housing Finance be appropriate to reflect the difference in op- 1992 (12 U.S.C. 4615) is amended— Agency. erations between the banks and the enter- (1) by striking ‘‘the enterprise’’ each place that term appears and inserting ‘‘the regu- (2) COST DIFFERENTIAL.— prises; and lated entity’’; (A) IN GENERAL.—The difference in the ‘‘(C) shall classify the Federal Home Loan costs between the benefits which would have Banks according to such capital classifica- (2) by striking ‘‘An enterprise’’ each place been provided by the Department of Housing tions. that term appears and inserting ‘‘A regu- and Urban Development and those provided ‘‘(2) CLASSIFICATIONS.—The capital classi- lated entity’’; by this section shall be paid by the Director. fications specified under this paragraph are— (3) by striking ‘‘an enterprise’’ each place (B) HEALTH INSURANCE.—If any employee ‘‘(A) adequately capitalized; that term appears and inserting ‘‘a regulated elects to give up membership in a health in- ‘‘(B) undercapitalized; entity’’; surance program or the health insurance ‘‘(C) significantly undercapitalized; and (4) in subsection (a)— program is not continued by the Director, ‘‘(D) critically undercapitalized. (A) by redesignating paragraphs (1) and (2) as paragraphs (2) and (3), respectively; the employee shall be permitted to select an ‘‘(c) DISCRETIONARY CLASSIFICATION.— (B) by inserting before paragraph (2), as re- alternate Federal health insurance program ‘‘(1) GROUNDS FOR RECLASSIFICATION.—The designated, the following: not later than 30 days after the date of such Director may reclassify a regulated entity ‘‘(1) REQUIRED MONITORING.—The Director election or notice, without regard to any under paragraph (2) if— shall— other regularly scheduled open season. ‘‘(A) at any time, the Director determines ‘‘(A) closely monitor the condition of any Subtitle C—Prompt Corrective Action in writing that the regulated entity is engag- undercapitalized regulated entity; SEC. 1141. CRITICAL CAPITAL LEVELS. ing in conduct that could result in a rapid ‘‘(B) closely monitor compliance with the (a) IN GENERAL.—Section 1363 of the Fed- depletion of core or total capital or the value capital restoration plan, restrictions, and re- eral Housing Enterprises Financial Safety of collateral pledged as security has de- quirements imposed on an undercapitalized and Soundness Act of 1992 (12 U.S.C. 4613) is creased significantly or that the value of the regulated entity under this section; and amended— property subject to any mortgage held by ‘‘(C) periodically review the plan, restric- (1) by striking ‘‘For’’ and inserting ‘‘(a) the regulated entity (or securitized in the tions, and requirements applicable to an ENTERPRISES.—FOR’’; and case of an enterprise) has decreased signifi- undercapitalized regulated entity to deter- (2) by adding at the end the following new cantly; mine whether the plan, restrictions, and re- subsection: ‘‘(B) after notice and an opportunity for quirements are achieving the purpose of this ‘‘(b) FEDERAL HOME LOAN BANKS.— hearing, the Director determines that the section.’’; and ‘‘(1) IN GENERAL.—For purposes of this sub- regulated entity is in an unsafe or unsound (C) by adding at the end the following: title, the critical capital level for each Fed- condition; or ‘‘(4) RESTRICTION OF ASSET GROWTH.—An eral Home Loan Bank shall be such amount ‘‘(C) pursuant to section 1371(b), the Direc- undercapitalized regulated entity shall not of capital as the Director shall, by regula- tor deems the regulated entity to be engag- permit its average total assets during any tion, require. ing in an unsafe or unsound practice. calendar quarter to exceed its average total ‘‘(2) CONSIDERATION OF OTHER CRITICAL CAP- ‘‘(2) RECLASSIFICATION.—In addition to any assets during the preceding calendar quarter, ITAL LEVELS.—In establishing the critical other action authorized under this title, in- unless— capital level under paragraph (1) for the Fed- cluding the reclassification of a regulated ‘‘(A) the Director has accepted the capital eral Home Loan Banks, the Director shall entity for any reason not specified in this restoration plan of the regulated entity; take due consideration of the critical capital subsection, if the Director takes any action ‘‘(B) any increase in total assets is con- level established under subsection (a) for the described in paragraph (1), the Director may sistent with the capital restoration plan; and enterprises, with such modifications as the classify a regulated entity— ‘‘(C) the ratio of tangible equity to assets Director determines to be appropriate to re- ‘‘(A) as undercapitalized, if the regulated of the regulated entity increases during the flect the difference in operations between entity is otherwise classified as adequately calendar quarter at a rate sufficient to en- the banks and the enterprises.’’. capitalized; able the regulated entity to become ade- (b) REGULATIONS.—Not later than the expi- ‘‘(B) as significantly undercapitalized, if quately capitalized within a reasonable time. ration of the 180-day period beginning on the the regulated entity is otherwise classified ‘‘(5) PRIOR APPROVAL OF ACQUISITIONS AND date of enactment of this Act, the Director as undercapitalized; and NEW ACTIVITIES.—An undercapitalized regu- of the Federal Housing Finance Agency shall ‘‘(C) as critically undercapitalized, if the lated entity shall not, directly or indirectly, issue regulations pursuant to section 1363(b) regulated entity is otherwise classified as of the Federal Housing Enterprises Financial acquire any interest in any entity or engage significantly undercapitalized.’’; and Safety and Soundness Act of 1992 (as added in any new activity, unless— (5) by inserting after subsection (d) (as so by this section) establishing the critical cap- ‘‘(A) the Director has accepted the capital redesignated by paragraph (3) of this sub- ital level under such section. restoration plan of the regulated entity, the section), the following new subsection: SEC. 1142. CAPITAL CLASSIFICATIONS. regulated entity is implementing the plan, (a) IN GENERAL.—Section 1364 of the Fed- ‘‘(e) RESTRICTION ON CAPITAL DISTRIBU- and the Director determines that the pro- eral Housing Enterprises Financial Safety TIONS.— posed action is consistent with and will fur- and Soundness Act of 1992 (12 U.S.C. 4614) is ‘‘(1) IN GENERAL.—A regulated entity shall ther the achievement of the plan; or amended— make no capital distribution if, after making ‘‘(B) the Director determines that the pro- (1) in the heading for subsection (a) by the distribution, the regulated entity would posed action will further the purpose of this striking ‘‘In General’’ and inserting ‘‘Enter- be undercapitalized. subtitle.’’; prises’’; ‘‘(2) EXCEPTION.—Notwithstanding para- (5) in subsection (b)— (2) in subsection (c)— graph (1), the Director may permit a regu- (A) in the subsection heading, by striking (A) by striking ‘‘subsection (b)’’ and insert- lated entity, to the extent appropriate or ap- ‘‘DISCRETIONARY’’; ing ‘‘subsection (c)’’; plicable, to repurchase, redeem, retire, or (B) in the matter preceding paragraph (1), (B) by striking ‘‘enterprises’’ and inserting otherwise acquire shares or ownership inter- by striking ‘‘may’’ and inserting ‘‘shall’’; ‘‘regulated entities’’; and ests if the repurchase, redemption, retire- and (C) by striking the last sentence; ment, or other acquisition— (C) in paragraph (2)— (3) by redesignating subsections (c) (as so ‘‘(A) is made in connection with the (i) by striking ‘‘make, in good faith, rea- amended by paragraph (2) of this subsection) issuance of additional shares or obligations sonable efforts necessary to’’; and and (d) as subsections (d) and (f), respec- of the regulated entity in at least an equiva- (ii) by striking the period at the end and tively; lent amount; and inserting ‘‘in any material respect.’’; and

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00089 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5860 CONGRESSIONAL RECORD — SENATE June 19, 2008

(6) by striking subsection (c) and inserting and Soundness Act of 1992 (12 U.S.C. 4617) is ‘‘(K) MONEY LAUNDERING.—The Attorney the following: amended to read as follows: General notifies the Director in writing that THER ISCRETIONARY AFEGUARDS ‘‘(c) O D S .— ‘‘SEC. 1367. AUTHORITY OVER CRITICALLY the regulated entity has been found guilty of The Director may take, with respect to an UNDERCAPITALIZED REGULATED a criminal offense under section 1956 or 1957 undercapitalized regulated entity, any of the ENTITIES. of title 18, United States Code, or section actions authorized to be taken under section ‘‘(a) APPOINTMENT OF THE AGENCY AS CON- 5322 or 5324 of title 31, United States Code. 1366 with respect to a significantly under- SERVATOR OR RECEIVER.— ‘‘(4) MANDATORY RECEIVERSHIP.— capitalized regulated entity, if the Director ‘‘(1) IN GENERAL.—Notwithstanding any ‘‘(A) IN GENERAL.—The Director shall ap- determines that such actions are necessary other provision of Federal or State law, the point the Agency as receiver for a regulated to carry out the purpose of this subtitle.’’. Director may appoint the Agency as conser- entity if the Director determines, in writing, SEC. 1144. SUPERVISORY ACTIONS APPLICABLE vator or receiver for a regulated entity in that— TO SIGNIFICANTLY UNDERCAPITAL- ‘‘(i) the assets of the regulated entity are, IZED REGULATED ENTITIES. the manner provided under paragraph (2) or (4). All references to the conservator or re- and during the preceding 60 calendar days Section 1366 of the Federal Housing Enter- have been, less than the obligations of the prises Financial Safety and Soundness Act of ceiver under this section are references to the Agency acting as conservator or re- regulated entity to its creditors and others; 1992 (12 U.S.C. 4616) is amended— or ceiver. (1) in subsection (a)(2), by striking ‘‘under- ‘‘(ii) the regulated entity is not, and during ‘‘(2) DISCRETIONARY APPOINTMENT.—The capitalized enterprise’’ and inserting ‘‘under- the preceding 60 calendar days has not been, Agency may, at the discretion of the Direc- capitalized’’; generally paying the debts of the regulated tor, be appointed conservator or receiver for (2) by striking ‘‘the enterprise’’ each place entity (other than debts that are the subject the purpose of reorganizing, rehabilitating, that term appears and inserting ‘‘the regu- of a bona fide dispute) as such debts become or winding up the affairs of a regulated enti- lated entity’’; due. ty. (3) by striking ‘‘An enterprise’’ each place ‘‘(B) PERIODIC DETERMINATION REQUIRED FOR ‘‘(3) GROUNDS FOR DISCRETIONARY APPOINT- that term appears and inserting ‘‘A regu- CRITICALLY UNDERCAPITALIZED REGULATED EN- MENT OF CONSERVATOR OR RECEIVER.—The lated entity’’; TITY.—If a regulated entity is critically (4) by striking ‘‘an enterprise’’ each place grounds for appointing conservator or re- undercapitalized, the Director shall make a that term appears and inserting ‘‘a regulated ceiver for any regulated entity under para- determination, in writing, as to whether the entity’’; graph (2) are as follows: regulated entity meets the criteria specified (5) in subsection (b)— ‘‘(A) SUBSTANTIAL DISSIPATION.—Substan- in clause (i) or (ii) of subparagraph (A)— (A) in the subsection heading, by striking tial dissipation of assets or earnings due to— ‘‘(i) not later than 30 calendar days after ‘‘DISCRETIONARY SUPERVISORY’’ and inserting ‘‘(i) any violation of any provision of Fed- the regulated entity initially becomes criti- ‘‘SPECIFIC’’; eral or State law; or cally undercapitalized; and (B) in the matter preceding paragraph (1), ‘‘(ii) any unsafe or unsound practice. ‘‘(ii) at least once during each succeeding by striking ‘‘may, at any time, take any’’ ‘‘(B) UNSAFE OR UNSOUND CONDITION.—An 30-calendar day period. and inserting ‘‘shall carry out this section unsafe or unsound condition to transact ‘‘(C) DETERMINATION NOT REQUIRED IF RE- by taking, at any time, 1 or more’’; business. CEIVERSHIP ALREADY IN PLACE.—Subpara- (C) by striking paragraph (6); ‘‘(C) CEASE AND DESIST ORDERS.—Any will- graph (B) does not apply with respect to a (D) by redesignating paragraph (5) as para- ful violation of a cease and desist order that regulated entity in any period during which graph (6); has become final. the Agency serves as receiver for the regu- (E) by inserting after paragraph (4) the fol- ‘‘(D) CONCEALMENT.—Any concealment of lated entity. lowing: the books, papers, records, or assets of the ‘‘(D) RECEIVERSHIP TERMINATES CON- ‘‘(5) IMPROVEMENT OF MANAGEMENT.—Take regulated entity, or any refusal to submit SERVATORSHIP.—The appointment of the 1 or more of the following actions: the books, papers, records, or affairs of the Agency as receiver of a regulated entity ‘‘(A) NEW ELECTION OF BOARD.—Order a new regulated entity, for inspection to any exam- under this section shall immediately termi- election for the board of directors of the reg- iner or to any lawful agent of the Director. nate any conservatorship established for the ulated entity. ‘‘(E) INABILITY TO MEET OBLIGATIONS.—The regulated entity under this title. ‘‘(B) DISMISSAL OF DIRECTORS OR EXECUTIVE regulated entity is likely to be unable to pay ‘‘(5) JUDICIAL REVIEW.— OFFICERS.—Require the regulated entity to its obligations or meet the demands of its ‘‘(A) IN GENERAL.—If the Agency is ap- dismiss from office any director or executive creditors in the normal course of business. pointed conservator or receiver under this officer who had held office for more than 180 ‘‘(F) LOSSES.—The regulated entity has in- section, the regulated entity may, within 30 days immediately before the date on which curred or is likely to incur losses that will days of such appointment, bring an action in the regulated entity became undercapital- deplete all or substantially all of its capital, the United States district court for the judi- ized. Dismissal under this subparagraph shall and there is no reasonable prospect for the cial district in which the home office of such not be construed to be a removal pursuant to regulated entity to become adequately cap- regulated entity is located, or in the United the enforcement powers of the Director italized (as defined in section 1364(a)(1)). States District Court for the District of Co- under section 1377. ‘‘(G) VIOLATIONS OF LAW.—Any violation of lumbia, for an order requiring the Agency to ‘‘(C) EMPLOY QUALIFIED EXECUTIVE OFFI- any law or regulation, or any unsafe or un- remove itself as conservator or receiver. CERS.—Require the regulated entity to em- sound practice or condition that is likely ‘‘(B) REVIEW.—Upon the filing of an action ploy qualified executive officers (who, if the to— under subparagraph (A), the court shall, Director so specifies, shall be subject to ap- ‘‘(i) cause insolvency or substantial dis- upon the merits, dismiss such action or di- proval by the Director).’’; and sipation of assets or earnings; or rect the Agency to remove itself as such con- (F) by adding at the end the following: ‘‘(ii) weaken the condition of the regulated servator or receiver. ‘‘(7) OTHER ACTION.—Require the regulated entity. ‘‘(6) DIRECTORS NOT LIABLE FOR ACQUIESCING entity to take any other action that the Di- ‘‘(H) CONSENT.—The regulated entity, by IN APPOINTMENT OF CONSERVATOR OR RE- rector determines will better carry out the resolution of its board of directors or its CEIVER.—The members of the board of direc- purpose of this section than any of the other shareholders or members, consents to the ap- tors of a regulated entity shall not be liable actions specified in this subsection.’’; and pointment. to the shareholders or creditors of the regu- (6) by striking subsection (c) and inserting ‘‘(I) UNDERCAPITALIZATION.—The regulated lated entity for acquiescing in or consenting the following: entity is undercapitalized or significantly in good faith to the appointment of the ‘‘(c) RESTRICTION ON COMPENSATION OF EX- undercapitalized (as defined in section Agency as conservator or receiver for that ECUTIVE OFFICERS.—A regulated entity that 1364(a)(3)), and— regulated entity. is classified as significantly undercapitalized ‘‘(i) has no reasonable prospect of becom- ‘‘(7) AGENCY NOT SUBJECT TO ANY OTHER in accordance with section 1364 may not, ing adequately capitalized; FEDERAL AGENCY.—When acting as conser- without prior written approval by the Direc- ‘‘(ii) fails to become adequately capital- vator or receiver, the Agency shall not be tor— ized, as required by— subject to the direction or supervision of any ‘‘(1) pay any bonus to any executive offi- ‘‘(I) section 1365(a)(1) with respect to a reg- other agency of the United States or any cer; or ulated entity; or State in the exercise of the rights, powers, ‘‘(2) provide compensation to any executive ‘‘(II) section 1366(a)(1) with respect to a sig- and privileges of the Agency. officer at a rate exceeding the average rate nificantly undercapitalized regulated entity; ‘‘(b) POWERS AND DUTIES OF THE AGENCY AS of compensation of that officer (excluding ‘‘(iii) fails to submit a capital restoration CONSERVATOR OR RECEIVER.— bonuses, stock options, and profit sharing) plan acceptable to the Agency within the ‘‘(1) RULEMAKING AUTHORITY OF THE AGEN- during the 12 calendar months preceding the time prescribed under section 1369C; or CY.—The Agency may prescribe such regula- calendar month in which the regulated enti- ‘‘(iv) materially fails to implement a cap- tions as the Agency determines to be appro- ty became significantly undercapitalized.’’. ital restoration plan submitted and accepted priate regarding the conduct of SEC. 1145. AUTHORITY OVER CRITICALLY UNDER- under section 1369C. conservatorships or receiverships. CAPITALIZED REGULATED ENTITIES. ‘‘(J) CRITICAL UNDERCAPITALIZATION.—The ‘‘(2) GENERAL POWERS.— (a) IN GENERAL.—Section 1367 of the Fed- regulated entity is critically undercapital- ‘‘(A) SUCCESSOR TO REGULATED ENTITY.— eral Housing Enterprises Financial Safety ized, as defined in section 1364(a)(4). The Agency shall, as conservator or receiver,

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00090 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5861

and by operation of law, immediately suc- entity), exercise any power established under ‘‘(5) PROCEDURES FOR DETERMINATION OF ceed to— section 1348. CLAIMS.— ‘‘(i) all rights, titles, powers, and privileges ‘‘(II) APPLICABILITY OF LAW.—The provi- ‘‘(A) DETERMINATION PERIOD.— of the regulated entity, and of any stock- sions of section 1348 shall apply with respect ‘‘(i) IN GENERAL.—Before the end of the 180- holder, officer, or director of such regulated to the exercise of any power under this sub- day period beginning on the date on which entity with respect to the regulated entity paragraph, in the same manner as such pro- any claim against a regulated entity is filed and the assets of the regulated entity; and visions apply under that section. with the Agency as receiver, the Agency ‘‘(ii) title to the books, records, and assets ‘‘(ii) SUBPOENA.—A subpoena or subpoena shall determine whether to allow or disallow of any other legal custodian of such regu- duces tecum may be issued under clause (i) the claim and shall notify the claimant of lated entity. only by, or with the written approval of, the any determination with respect to such ‘‘(B) OPERATE THE REGULATED ENTITY.—The Director, or the designee of the Director. claim. Agency may, as conservator or receiver— ‘‘(iii) RULE OF CONSTRUCTION.—This sub- ‘‘(ii) EXTENSION OF TIME.—The period de- ‘‘(i) take over the assets of and operate the section shall not be construed to limit any scribed in clause (i) may be extended by a regulated entity with all the powers of the rights that the Agency, in any capacity, written agreement between the claimant and shareholders, the directors, and the officers might otherwise have under section 1317 or the Agency. of the regulated entity and conduct all busi- 1379B. ‘‘(iii) MAILING OF NOTICE SUFFICIENT.—The ness of the regulated entity; ‘‘(J) INCIDENTAL POWERS.—The Agency requirements of clause (i) shall be deemed to ‘‘(ii) collect all obligations and money due may, as conservator or receiver— be satisfied if the notice of any determina- the regulated entity; ‘‘(i) exercise all powers and authorities tion with respect to any claim is mailed to ‘‘(iii) perform all functions of the regulated specifically granted to conservators or re- the last address of the claimant which ap- entity in the name of the regulated entity ceivers, respectively, under this section, and pears— which are consistent with the appointment such incidental powers as shall be necessary ‘‘(I) on the books of the regulated entity; as conservator or receiver; to carry out such powers; and ‘‘(II) in the claim filed by the claimant; or ‘‘(iv) preserve and conserve the assets and ‘‘(ii) take any action authorized by this ‘‘(III) in documents submitted in proof of property of the regulated entity; and section, which the Agency determines is in the claim. ‘‘(v) provide by contract for assistance in the best interests of the regulated entity or ‘‘(iv) CONTENTS OF NOTICE OF DISALLOW- fulfilling any function, activity, action, or the Agency. ANCE.—If any claim filed under clause (i) is duty of the Agency as conservator or re- ‘‘(K) OTHER PROVISIONS.— disallowed, the notice to the claimant shall ceiver. ‘‘(i) SHAREHOLDERS AND CREDITORS OF contain— ‘‘(C) FUNCTIONS OF OFFICERS, DIRECTORS, FAILED REGULATED ENTITY.—Notwithstanding ‘‘(I) a statement of each reason for the dis- AND SHAREHOLDERS OF A REGULATED ENTITY.— any other provision of law, the appointment allowance; and The Agency may, by regulation or order, of the Agency as receiver for a regulated en- ‘‘(II) the procedures available for obtaining provide for the exercise of any function by tity pursuant to paragraph (2) or (4) of sub- agency review of the determination to dis- any stockholder, director, or officer of any section (a) and its succession, by operation allow the claim or judicial determination of regulated entity for which the Agency has of law, to the rights, titles, powers, and the claim. been named conservator or receiver. privileges described in subsection (b)(2)(A) ‘‘(B) ALLOWANCE OF PROVEN CLAIM.—The re- ‘‘(D) POWERS AS CONSERVATOR.—The Agen- shall terminate all rights and claims that ceiver shall allow any claim received on or cy may, as conservator, take such action as the stockholders and creditors of the regu- before the date specified in the notice pub- may be— lated entity may have against the assets or lished under paragraph (3)(B)(i) by the re- ‘‘(i) necessary to put the regulated entity charter of the regulated entity or the Agen- ceiver from any claimant which is proved to in a sound and solvent condition; and cy arising as a result of their status as the satisfaction of the receiver. ‘‘(ii) appropriate to carry on the business stockholders or creditors, except for their ‘‘(C) DISALLOWANCE OF CLAIMS FILED AFTER of the regulated entity and preserve and con- right to payment, resolution, or other satis- FILING PERIOD.—Claims filed after the date serve the assets and property of the regu- faction of their claims, as permitted under specified in the notice published under para- lated entity. subsections (b)(9), (c), and (e). graph (3)(B)(i), or the date specified under ‘‘(E) ADDITIONAL POWERS AS RECEIVER.—In ‘‘(ii) ASSETS OF REGULATED ENTITY.—Not- paragraph (3)(C), shall be disallowed and any case in which the Agency is acting as re- withstanding any other provision of law, for such disallowance shall be final. ceiver, the Agency shall place the regulated purposes of this section, the charter of a reg- ‘‘(D) AUTHORITY TO DISALLOW CLAIMS.— entity in liquidation and proceed to realize ulated entity shall not be considered an ‘‘(i) IN GENERAL.—The receiver may dis- upon the assets of the regulated entity in asset of the regulated entity. allow any portion of any claim by a creditor such manner as the Agency deems appro- ‘‘(3) AUTHORITY OF RECEIVER TO DETERMINE or claim of security, preference, or priority priate, including through the sale of assets, CLAIMS.— which is not proved to the satisfaction of the the transfer of assets to a limited-life regu- ‘‘(A) IN GENERAL.—The Agency may, as re- receiver. lated entity established under subsection (i), ceiver, determine claims in accordance with ‘‘(ii) PAYMENTS TO LESS THAN FULLY SE- or the exercise of any other rights or privi- the requirements of this subsection and any CURED CREDITORS.—In the case of a claim of leges granted to the Agency under this para- regulations prescribed under paragraph (4). a creditor against a regulated entity which graph. ‘‘(B) NOTICE REQUIREMENTS.—The receiver, is secured by any property or other asset of ‘‘(F) ORGANIZATION OF NEW ENTERPRISE.— in any case involving the liquidation or such regulated entity, the receiver— The Agency shall, as receiver for an enter- winding up of the affairs of a closed regu- ‘‘(I) may treat the portion of such claim prise, organize a successor enterprise that lated entity, shall— which exceeds an amount equal to the fair will operate pursuant to subsection (i). ‘‘(i) promptly publish a notice to the credi- market value of such property or other asset ‘‘(G) TRANSFER OR SALE OF ASSETS AND LI- tors of the regulated entity to present their as an unsecured claim against the regulated ABILITIES.—The Agency may, as conservator claims, together with proof, to the receiver entity; and or receiver, transfer or sell any asset or li- by a date specified in the notice which shall ‘‘(II) may not make any payment with re- ability of the regulated entity in default, and be not less than 90 days after the date of pub- spect to such unsecured portion of the claim, may do so without any approval, assign- lication of such notice; and other than in connection with the disposi- ment, or consent with respect to such trans- ‘‘(ii) republish such notice approximately 1 tion of all claims of unsecured creditors of fer or sale. month and 2 months, respectively, after the the regulated entity. ‘‘(H) PAYMENT OF VALID OBLIGATIONS.—The date of publication under clause (i). ‘‘(iii) EXCEPTIONS.—No provision of this Agency, as conservator or receiver, shall, to ‘‘(C) MAILING REQUIRED.—The receiver shall paragraph shall apply with respect to— the extent of proceeds realized from the per- mail a notice similar to the notice published ‘‘(I) any extension of credit from any Fed- formance of contracts or sale of the assets of under subparagraph (B)(i) at the time of such eral Reserve Bank, Federal Home Loan a regulated entity, pay all valid obligations publication to any creditor shown on the Bank, or the United States Treasury; or of the regulated entity that are due and pay- books of the regulated entity— ‘‘(II) any security interest in the assets of able at the time of the appointment of the ‘‘(i) at the last address of the creditor ap- the regulated entity securing any such ex- Agency as conservator or receiver, in accord- pearing in such books; or tension of credit. ance with the prescriptions and limitations ‘‘(ii) upon discovery of the name and ad- ‘‘(E) NO JUDICIAL REVIEW OF DETERMINATION of this section. dress of a claimant not appearing on the PURSUANT TO SUBPARAGRAPH (D).—No court ‘‘(I) SUBPOENA AUTHORITY.— books of the regulated entity, within 30 days may review the determination of the Agency ‘‘(i) IN GENERAL.— after the discovery of such name and ad- under subparagraph (D) to disallow a claim. ‘‘(I) AGENCY AUTHORITY.—The Agency may, dress. ‘‘(F) LEGAL EFFECT OF FILING.— as conservator or receiver, and for purposes ‘‘(4) RULEMAKING AUTHORITY RELATING TO ‘‘(i) STATUTE OF LIMITATION TOLLED.—For of carrying out any power, authority, or DETERMINATION OF CLAIMS.—Subject to sub- purposes of any applicable statute of limita- duty with respect to a regulated entity (in- section (c), the Director may prescribe regu- tions, the filing of a claim with the receiver cluding determining any claim against the lations regarding the allowance or disallow- shall constitute a commencement of an ac- regulated entity and determining and real- ance of claims by the receiver and providing tion. izing upon any asset of any person in the for administrative determination of claims ‘‘(ii) NO PREJUDICE TO OTHER ACTIONS.—Sub- course of collecting money due the regulated and review of such determination. ject to paragraph (10), the filing of a claim

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00091 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5862 CONGRESSIONAL RECORD — SENATE June 19, 2008 with the receiver shall not prejudice any ance and the procedure for obtaining agency such regulated entity is or becomes a party, right of the claimant to continue any action review or judicial determination. request a stay for a period not to exceed— which was filed before the date of the ap- ‘‘(C) PERIOD FOR FILING OR RENEWING ‘‘(i) 45 days, in the case of any conservator; pointment of the receiver, subject to the de- SUIT.—Any claimant who files a request for and termination of claims by the receiver. expedited relief shall be permitted to file a ‘‘(ii) 90 days, in the case of any receiver. ‘‘(6) PROVISION FOR JUDICIAL DETERMINATION suit, or to continue a suit filed before the ‘‘(B) GRANT OF STAY BY ALL COURTS RE- OF CLAIMS.— date of appointment of the receiver, seeking QUIRED.—Upon receipt of a request by the ‘‘(A) IN GENERAL.—The claimant may file a determination of the rights of the claimant conservator or receiver under subparagraph suit on a claim (or continue an action com- with respect to such security interest after (A) for a stay of any judicial action or pro- menced before the appointment of the re- the earlier of— ceeding in any court with jurisdiction of ceiver) in the district or territorial court of ‘‘(i) the end of the 90-day period beginning such action or proceeding, the court shall the United States for the district within on the date of the filing of a request for expe- grant such stay as to all parties. which the principal place of business of the dited relief; or ‘‘(11) ADDITIONAL RIGHTS AND DUTIES.— regulated entity is located or the United ‘‘(ii) the date on which the Agency denies ‘‘(A) PRIOR FINAL ADJUDICATION.—The States District Court for the District of Co- the claim. Agency shall abide by any final unappealable lumbia (and such court shall have jurisdic- ‘‘(D) STATUTE OF LIMITATIONS.—If an action judgment of any court of competent jurisdic- tion to hear such claim), before the end of described under subparagraph (C) is not filed, tion which was rendered before the appoint- the 60-day period beginning on the earlier or the motion to renew a previously filed ment of the Agency as conservator or re- of— suit is not made, before the end of the 30-day ceiver. ‘‘(i) the end of the period described in para- period beginning on the date on which such ‘‘(B) RIGHTS AND REMEDIES OF CONSERVATOR graph (5)(A)(i) with respect to any claim action or motion may be filed under subpara- OR RECEIVER.—In the event of any appealable against a regulated entity for which the graph (B), the claim shall be deemed to be judgment, the Agency as conservator or re- Agency is receiver; or disallowed as of the end of such period (other ceiver— ‘‘(ii) the date of any notice of disallowance than any portion of such claim which was al- ‘‘(i) shall have all of the rights and rem- of such claim pursuant to paragraph (5)(A)(i). lowed by the receiver), such disallowance edies available to the regulated entity (be- ‘‘(B) STATUTE OF LIMITATIONS.—A claim shall be final, and the claimant shall have no fore the appointment of such conservator or shall be deemed to be disallowed (other than further rights or remedies with respect to receiver) and the Agency, including removal any portion of such claim which was allowed such claim. to Federal court and all appellate rights; and by the receiver), and such disallowance shall ‘‘(E) LEGAL EFFECT OF FILING.— ‘‘(ii) shall not be required to post any bond be final, and the claimant shall have no fur- ‘‘(i) STATUTE OF LIMITATION TOLLED.—For in order to pursue such remedies. ther rights or remedies with respect to such purposes of any applicable statute of limita- ‘‘(C) NO ATTACHMENT OR EXECUTION.—No at- claim, if the claimant fails, before the end of tions, the filing of a claim with the receiver tachment or execution may issue by any the 60-day period described under subpara- shall constitute a commencement of an ac- court upon assets in the possession of the re- graph (A), to file suit on such claim (or con- tion. ceiver, or upon the charter, of a regulated tinue an action commenced before the ap- ‘‘(ii) NO PREJUDICE TO OTHER ACTIONS.—Sub- entity for which the Agency has been ap- pointment of the receiver). ject to paragraph (10), the filing of a claim pointed receiver. ‘‘(7) REVIEW OF CLAIMS.— with the receiver shall not prejudice any ‘‘(D) LIMITATION ON JUDICIAL REVIEW.—Ex- ‘‘(A) OTHER REVIEW PROCEDURES.— right of the claimant to continue any action cept as otherwise provided in this sub- ‘‘(i) IN GENERAL.—The Agency shall estab- that was filed before the appointment of the section, no court shall have jurisdiction lish such alternative dispute resolution proc- receiver, subject to the determination of over— esses as may be appropriate for the resolu- claims by the receiver. ‘‘(i) any claim or action for payment from, tion of claims filed under paragraph (5)(A)(i). ‘‘(9) PAYMENT OF CLAIMS.— or any action seeking a determination of ‘‘(ii) CRITERIA.—In establishing alternative ‘‘(A) IN GENERAL.—The receiver may, in the rights with respect to, the assets or charter dispute resolution processes, the Agency discretion of the receiver, and to the extent of any regulated entity for which the Agency shall strive for procedures which are expedi- that funds are available from the assets of has been appointed receiver; or tious, fair, independent, and low cost. the regulated entity, pay creditor claims, in ‘‘(ii) any claim relating to any act or omis- ‘‘(iii) VOLUNTARY BINDING OR NONBINDING such manner and amounts as are authorized sion of such regulated entity or the Agency PROCEDURES.—The Agency may establish under this section, which are— as receiver. both binding and nonbinding processes under ‘‘(i) allowed by the receiver; ‘‘(E) DISPOSITION OF ASSETS.—In exercising this subparagraph, which may be conducted ‘‘(ii) approved by the Agency pursuant to a any right, power, privilege, or authority as by any government or private party. All par- final determination pursuant to paragraph conservator or receiver in connection with ties, including the claimant and the Agency, (7) or (8); or any sale or disposition of assets of a regu- must agree to the use of the process in a par- ‘‘(iii) determined by the final judgment of lated entity for which the Agency has been ticular case. any court of competent jurisdiction. appointed conservator or receiver, the Agen- ‘‘(B) CONSIDERATION OF INCENTIVES.—The ‘‘(B) AGREEMENTS AGAINST THE INTEREST OF cy shall conduct its operations in a manner Agency shall seek to develop incentives for THE AGENCY.—No agreement that tends to di- which— claimants to participate in the alternative minish or defeat the interest of the Agency ‘‘(i) maximizes the net present value re- dispute resolution process. in any asset acquired by the Agency as re- turn from the sale or disposition of such as- ‘‘(8) EXPEDITED DETERMINATION OF ceiver under this section shall be valid sets; CLAIMS.— against the Agency unless such agreement is ‘‘(ii) minimizes the amount of any loss re- ‘‘(A) ESTABLISHMENT REQUIRED.—The Agen- in writing and executed by an authorized of- alized in the resolution of cases; and cy shall establish a procedure for expedited ficer or representative of the regulated enti- ‘‘(iii) ensures adequate competition and relief outside of the routine claims process ty. fair and consistent treatment of offerors. established under paragraph (5) for claimants ‘‘(C) PAYMENT OF DIVIDENDS ON CLAIMS.— ‘‘(12) STATUTE OF LIMITATIONS FOR ACTIONS who— The receiver may, in the sole discretion of BROUGHT BY CONSERVATOR OR RECEIVER.— ‘‘(i) allege the existence of legally valid the receiver, pay from the assets of the regu- ‘‘(A) IN GENERAL.—Notwithstanding any and enforceable or perfected security inter- lated entity dividends on proved claims at provision of any contract, the applicable ests in assets of any regulated entity for any time, and no liability shall attach to the statute of limitations with regard to any ac- which the Agency has been appointed re- Agency by reason of any such payment, for tion brought by the Agency as conservator ceiver; and failure to pay dividends to a claimant whose or receiver shall be— ‘‘(ii) allege that irreparable injury will claim is not proved at the time of any such ‘‘(i) in the case of any contract claim, the occur if the routine claims procedure is fol- payment. longer of— lowed. ‘‘(D) RULEMAKING AUTHORITY OF THE DIREC- ‘‘(I) the 6-year period beginning on the date ‘‘(B) DETERMINATION PERIOD.—Before the TOR.—The Director may prescribe such rules, on which the claim accrues; or end of the 90-day period beginning on the including definitions of terms, as the Direc- ‘‘(II) the period applicable under State law; date on which any claim is filed in accord- tor deems appropriate to establish a single and ance with the procedures established under uniform interest rate for, or to make pay- ‘‘(ii) in the case of any tort claim, the subparagraph (A), the Director shall— ments of post-insolvency interest to credi- longer of— ‘‘(i) determine— tors holding proven claims against the re- ‘‘(I) the 3-year period beginning on the date ‘‘(I) whether to allow or disallow such ceivership estates of the regulated entity, on which the claim accrues; or claim; or following satisfaction by the receiver of the ‘‘(II) the period applicable under State law. ‘‘(II) whether such claim should be deter- principal amount of all creditor claims. ‘‘(B) DETERMINATION OF THE DATE ON WHICH mined pursuant to the procedures estab- ‘‘(10) SUSPENSION OF LEGAL ACTIONS.— A CLAIM ACCRUES.—For purposes of subpara- lished under paragraph (5); and ‘‘(A) IN GENERAL.—After the appointment graph (A), the date on which the statute of ‘‘(ii) notify the claimant of the determina- of a conservator or receiver for a regulated limitations begins to run on any claim de- tion, and if the claim is disallowed, provide entity, the conservator or receiver may, in scribed in such subparagraph shall be the a statement of each reason for the disallow- any judicial action or proceeding to which later of—

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00092 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5863 ‘‘(i) the date of the appointment of the ‘‘(ii) any immediate or mediate good faith ‘‘(B) Any other general or senior liability Agency as conservator or receiver; or transferee of such transferee. of the regulated entity (which is not a liabil- ‘‘(ii) the date on which the cause of action ‘‘(D) RIGHTS UNDER THIS PARAGRAPH.—The ity described under subparagraph (C) or (D). accrues. rights under this paragraph of the conser- ‘‘(C) Any obligation subordinated to gen- ‘‘(13) REVIVAL OF EXPIRED STATE CAUSES OF vator or receiver described under subpara- eral creditors (which is not an obligation de- ACTION.— graph (A) shall be superior to any rights of a scribed under subparagraph (D)). ‘‘(A) IN GENERAL.—In the case of any tort trustee or any other party (other than any ‘‘(D) Any obligation to shareholders or claim described under clause (ii) for which party which is a Federal agency) under title members arising as a result of their status as the statute of limitations applicable under 11, United States Code. shareholder or members. State law with respect to such claim has ex- ‘‘(16) ATTACHMENT OF ASSETS AND OTHER IN- ‘‘(2) CREDITORS SIMILARLY SITUATED.—All pired not more than 5 years before the ap- JUNCTIVE RELIEF.—Subject to paragraph (17), creditors that are similarly situated under pointment of the Agency as conservator or any court of competent jurisdiction may, at paragraph (1) shall be treated in a similar receiver, the Agency may bring an action as the request of the conservator or receiver, manner, except that the receiver may take conservator or receiver on such claim with- issue an order in accordance with rule 65 of any action (including making payments) out regard to the expiration of the statute of the Federal Rules of Civil Procedure, includ- that does not comply with this subsection, limitations applicable under State law. ing an order placing the assets of any person if— ‘‘(B) CLAIMS DESCRIBED.—A tort claim re- designated by the conservator or receiver ‘‘(A) the Director determines that such ac- ferred to under clause (i) is a claim arising under the control of the court, and appoint- tion is necessary to maximize the value of from fraud, intentional misconduct resulting ing a trustee to hold such assets. the assets of the regulated entity, to maxi- in unjust enrichment, or intentional mis- ‘‘(17) STANDARDS OF PROOF.—Rule 65 of the mize the present value return from the sale conduct resulting in substantial loss to the Federal Rules of Civil Procedure shall apply or other disposition of the assets of the regu- regulated entity. with respect to any proceeding under para- lated entity, or to minimize the amount of ‘‘(14) ACCOUNTING AND RECORDKEEPING RE- graph (16) without regard to the requirement any loss realized upon the sale or other dis- QUIREMENTS.— of such rule that the applicant show that the position of the assets of the regulated entity; ‘‘(A) IN GENERAL.—The Agency as conser- injury, loss, or damage is irreparable and im- and vator or receiver shall, consistent with the mediate. ‘‘(B) all creditors that are similarly situ- accounting and reporting practices and pro- ‘‘(18) TREATMENT OF CLAIMS ARISING FROM ated under paragraph (1) receive not less cedures established by the Agency, maintain BREACH OF CONTRACTS EXECUTED BY THE CON- than the amount provided in subsection a full accounting of each conservatorship SERVATOR OR RECEIVER.— (e)(2). and receivership or other disposition of a ‘‘(A) IN GENERAL.—Notwithstanding any ‘‘(3) DEFINITION.—As used in this sub- regulated entity in default. other provision of this subsection, any final section, the term ‘administrative expenses of ‘‘(B) ANNUAL ACCOUNTING OR REPORT.—With and unappealable judgment for monetary the receiver’ includes— respect to each conservatorship or receiver- damages entered against the conservator or ‘‘(A) the actual, necessary costs and ex- ship, the Agency shall make an annual ac- receiver for the breach of an agreement exe- penses incurred by the receiver in preserving counting or report available to the Board, cuted or approved in writing by the conser- the assets of a failed regulated entity or liq- the Comptroller General of the United vator or receiver after the date of its ap- uidating or otherwise resolving the affairs of States, the Committee on Banking, Housing, pointment, shall be paid as an administra- a failed regulated entity; and and Urban Affairs of the Senate, and the tive expense of the conservator or receiver. ‘‘(B) any obligations that the receiver de- Committee on Financial Services of the ‘‘(B) NO LIMITATION OF POWER.—Nothing in termines are necessary and appropriate to House of Representatives. this paragraph shall be construed to limit facilitate the smooth and orderly liquidation ‘‘(C) AVAILABILITY OF REPORTS.—Any re- the power of the conservator or receiver to or other resolution of the regulated entity. port prepared under subparagraph (B) shall exercise any rights under contract or law, in- ‘‘(d) PROVISIONS RELATING TO CONTRACTS be made available by the Agency upon re- cluding to terminate, breach, cancel, or oth- ENTERED INTO BEFORE APPOINTMENT OF CON- quest to any shareholder of a regulated enti- erwise discontinue such agreement. SERVATOR OR RECEIVER.— ty or any member of the public. ‘‘(19) GENERAL EXCEPTIONS.— ‘‘(1) AUTHORITY TO REPUDIATE CONTRACTS.— ‘‘(D) RECORDKEEPING REQUIREMENT.—After ‘‘(A) LIMITATIONS.—The rights of the con- In addition to any other rights a conservator the end of the 6-year period beginning on the servator or receiver appointed under this or receiver may have, the conservator or re- date on which the conservatorship or receiv- section shall be subject to the limitations on ceiver for any regulated entity may dis- ership is terminated by the Director, the the powers of a receiver under sections 402 affirm or repudiate any contract or lease— Agency may destroy any records of such reg- through 407 of the Federal Deposit Insurance ‘‘(A) to which such regulated entity is a ulated entity which the Agency, in the dis- Corporation Improvement Act of 1991 (12 party; cretion of the Agency, determines to be un- U.S.C. 4402 through 4407). ‘‘(B) the performance of which the conser- necessary, unless directed not to do so by a ‘‘(B) MORTGAGES HELD IN TRUST.— vator or receiver, in its sole discretion, de- court of competent jurisdiction or govern- ‘‘(i) IN GENERAL.—Any mortgage, pool of termines to be burdensome; and mental agency, or prohibited by law. mortgages, or interest in a pool of mortgages ‘‘(C) the disaffirmance or repudiation of ‘‘(15) FRAUDULENT TRANSFERS.— held in trust, custodial, or agency capacity which the conservator or receiver deter- ‘‘(A) IN GENERAL.—The Agency, as conser- by a regulated entity for the benefit of any mines, in its sole discretion, will promote vator or receiver, may avoid a transfer of person other than the regulated entity shall the orderly administration of the affairs of any interest of an entity-affiliated party, or not be available to satisfy the claims of the regulated entity. any person determined by the conservator or creditors generally, except that nothing in ‘‘(2) TIMING OF REPUDIATION.—The conser- receiver to be a debtor of the regulated enti- this clause shall be construed to expand or vator or receiver shall determine whether or ty, in property, or any obligation incurred otherwise affect the authority of any regu- not to exercise the rights of repudiation by such party or person, that was made with- lated entity. under this subsection within a reasonable pe- in 5 years of the date on which the Agency ‘‘(ii) HOLDING OF MORTGAGES.—Any mort- riod following such appointment. was appointed conservator or receiver, if gage, pool of mortgages, or interest in a pool ‘‘(3) CLAIMS FOR DAMAGES FOR REPUDI- such party or person voluntarily or involun- of mortgages described in clause (i) shall be ATION.— tarily made such transfer or incurred such li- held by the conservator or receiver ap- ‘‘(A) IN GENERAL.—Except as otherwise pro- ability with the intent to hinder, delay, or pointed under this section for the beneficial vided under subparagraph (C) and paragraphs defraud the regulated entity, the Agency, owners of such mortgage, pool of mortgages, (4), (5), and (6), the liability of the conser- the conservator, or receiver. or interest in accordance with the terms of vator or receiver for the disaffirmance or re- ‘‘(B) RIGHT OF RECOVERY.—To the extent a the agreement creating such trust, custodial, pudiation of any contract pursuant to para- transfer is avoided under subparagraph (A), or other agency arrangement. graph (1) shall be— the conservator or receiver may recover, for ‘‘(iii) LIABILITY OF CONSERVATOR OR RE- ‘‘(i) limited to actual direct compensatory the benefit of the regulated entity, the prop- CEIVER.—The liability of the conservator or damages; and erty transferred, or, if a court so orders, the receiver appointed under this section for ‘‘(ii) determined as of— value of such property (at the time of such damages shall, in the case of any contingent ‘‘(I) the date of the appointment of the transfer) from— or unliquidated claim relating to the mort- conservator or receiver; or ‘‘(i) the initial transferee of such transfer gages held in trust, be estimated in accord- ‘‘(II) in the case of any contract or agree- or the entity-affiliated party or person for ance with the regulations of the Director. ment referred to in paragraph (8), the date of whose benefit such transfer was made; or ‘‘(c) PRIORITY OF EXPENSES AND UNSECURED the disaffirmance or repudiation of such con- ‘‘(ii) any immediate or mediate transferee CLAIMS.— tract or agreement. of any such initial transferee. ‘‘(1) IN GENERAL.—Unsecured claims ‘‘(B) NO LIABILITY FOR OTHER DAMAGES.— ‘‘(C) RIGHTS OF TRANSFEREE OR OBLIGEE.— against a regulated entity, or the receiver For purposes of subparagraph (A), the term The conservator or receiver may not recover therefor, that are proven to the satisfaction ‘actual direct compensatory damages’ shall under subparagraph (B) from— of the receiver shall have priority in the fol- not include— ‘‘(i) any transferee that takes for value, in- lowing order: ‘‘(i) punitive or exemplary damages; cluding satisfaction or securing of a present ‘‘(A) Administrative expenses of the re- ‘‘(ii) damages for lost profits or oppor- or antecedent debt, in good faith; or ceiver. tunity; or

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00093 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5864 CONGRESSIONAL RECORD — SENATE June 19, 2008 ‘‘(iii) damages for pain and suffering. ‘‘(i) treat the contract as terminated by title (other than subsection (b)(9)(B) of this ‘‘(C) MEASURE OF DAMAGES FOR REPUDI- such repudiation; or section), any other Federal law, or the law of ATION OF FINANCIAL CONTRACTS.—In the case ‘‘(ii) remain in possession of such real any State, no person shall be stayed or pro- of any qualified financial contract or agree- property. hibited from exercising— ment to which paragraph (8) applies, com- ‘‘(B) PROVISIONS APPLICABLE TO PURCHASER ‘‘(i) any right of that person to cause the pensatory damages shall be— REMAINING IN POSSESSION.—If any purchaser termination, liquidation, or acceleration of ‘‘(i) deemed to include normal and reason- of real property under any contract de- any qualified financial contract with a regu- able costs of cover or other reasonable meas- scribed under subparagraph (A) remains in lated entity that arises upon the appoint- ures of damages utilized in the industries for possession of such property under clause (ii) ment of the Agency as receiver for such reg- such contract and agreement claims; and of subparagraph (A)— ulated entity at any time after such appoint- ‘‘(ii) paid in accordance with this sub- ‘‘(i) the purchaser— ment; section and subsection (e), except as other- ‘‘(I) shall continue to make all payments ‘‘(ii) any right under any security agree- due under the contract after the date of the wise specifically provided in this section. ment or arrangement or other credit en- repudiation of the contract; and ‘‘(4) LEASES UNDER WHICH THE REGULATED hancement relating to one or more qualified ‘‘(II) may offset against any such payments ENTITY IS THE LESSEE.— financial contracts; or any damages which accrue after such date ‘‘(A) IN GENERAL.—If the conservator or re- due to the nonperformance (after such date) ‘‘(iii) any right to offset or net out any ter- ceiver disaffirms or repudiates a lease under mination value, payment amount, or other which the regulated entity was the lessee, of any obligation of the regulated entity under the contract; and transfer obligation arising under or in con- the conservator or receiver shall not be lia- ‘‘(ii) the conservator or receiver shall— nection with 1 or more contracts and agree- ble for any damages (other than damages de- ‘‘(I) not be liable to the purchaser for any ments described in clause (i), including any termined under subparagraph (B)) for the damages arising after such date as a result of master agreement for such contracts or disaffirmance or repudiation of such lease. the repudiation, other than the amount of agreements. ‘‘(B) PAYMENTS OF RENT.—Notwithstanding any offset allowed under clause (i)(II); ‘‘(B) APPLICABILITY OF OTHER PROVISIONS.— subparagraph (A), the lessor under a lease to ‘‘(II) deliver title to the purchaser in ac- Subsection (b)(10) shall apply in the case of which that subparagraph applies shall— cordance with the provisions of the contract; any judicial action or proceeding brought ‘‘(i) be entitled to the contractual rent ac- and against any receiver referred to under sub- cruing before the later of the date on ‘‘(III) have no obligation under the con- paragraph (A), or the regulated entity for which— tract other than the performance required which such receiver was appointed, by any ‘‘(I) the notice of disaffirmance or repudi- under subclause (II). party to a contract or agreement described ation is mailed; or ‘‘(C) ASSIGNMENT AND SALE ALLOWED.— under subparagraph (A)(i) with such regu- ‘‘(II) the disaffirmance or repudiation be- ‘‘(i) IN GENERAL.—No provision of this para- lated entity. comes effective, unless the lessor is in de- graph shall be construed as limiting the ‘‘(C) CERTAIN TRANSFERS NOT AVOIDABLE.— fault or breach of the terms of the lease; right of the conservator or receiver to assign ‘‘(i) IN GENERAL.—Notwithstanding para- ‘‘(ii) have no claim for damages under any the contract described under subparagraph graph (11), or any other provision of Federal acceleration clause or other penalty provi- (A), and sell the property subject to the con- or State law relating to the avoidance of sion in the lease; and tract and the provisions of this paragraph. preferential or fraudulent transfers, the ‘‘(iii) have a claim for any unpaid rent, ‘‘(ii) NO LIABILITY AFTER ASSIGNMENT AND Agency, whether acting as such or as conser- subject to all appropriate offsets and de- SALE.—If an assignment and sale described vator or receiver of a regulated entity, may fenses, due as of the date of the appointment, under clause (i) is consummated, the conser- not avoid any transfer of money or other which shall be paid in accordance with this vator or receiver shall have no further liabil- property in connection with any qualified fi- subsection and subsection (e). ity under the contract described under sub- nancial contract with a regulated entity. ‘‘(5) LEASES UNDER WHICH THE REGULATED paragraph (A), or with respect to the real ‘‘(ii) EXCEPTION FOR CERTAIN TRANSFERS.— ENTITY IS THE LESSOR.— property which was the subject of such con- Clause (i) shall not apply to any transfer of ‘‘(A) IN GENERAL.—If the conservator or re- tract. money or other property in connection with ceiver repudiates an unexpired written lease ‘‘(7) SERVICE CONTRACTS.— any qualified financial contract with a regu- of real property of the regulated entity ‘‘(A) SERVICES PERFORMED BEFORE APPOINT- lated entity if the Agency determines that under which the regulated entity is the les- MENT.—In the case of any contract for serv- the transferee had actual intent to hinder, sor and the lessee is not, as of the date of ices between any person and any regulated delay, or defraud such regulated entity, the such repudiation, in default, the lessee under entity for which the Agency has been ap- creditors of such regulated entity, or any such lease may either— pointed conservator or receiver, any claim of conservator or receiver appointed for such ‘‘(i) treat the lease as terminated by such such person for services performed before the regulated entity. repudiation; or appointment of the conservator or receiver ‘‘(D) CERTAIN CONTRACTS AND AGREEMENTS ‘‘(ii) remain in possession of the leasehold shall be— DEFINED.—In this subsection the following interest for the balance of the term of the ‘‘(i) a claim to be paid in accordance with definitions shall apply: lease, unless the lessee defaults under the subsections (b) and (e); and ‘‘(i) QUALIFIED FINANCIAL CONTRACT.—The terms of the lease after the date of such re- ‘‘(ii) deemed to have arisen as of the date pudiation. on which the conservator or receiver was ap- term ‘qualified financial contract’ means any securities contract, commodity con- ‘‘(B) PROVISIONS APPLICABLE TO LESSEE RE- pointed. MAINING IN POSSESSION.—If any lessee under a ‘‘(B) SERVICES PERFORMED AFTER APPOINT- tract, forward contract, repurchase agree- lease described under subparagraph (A) re- MENT AND PRIOR TO REPUDIATION.—If, in the ment, swap agreement, and any similar mains in possession of a leasehold interest case of any contract for services described agreement that the Agency determines by under clause (ii) of subparagraph (A)— under subparagraph (A), the conservator or regulation, resolution, or order to be a quali- ‘‘(i) the lessee— receiver accepts performance by the other fied financial contract for purposes of this ‘‘(I) shall continue to pay the contractual person before the conservator or receiver paragraph. rent pursuant to the terms of the lease after makes any determination to exercise the ‘‘(ii) SECURITIES CONTRACT.—The term ‘se- the date of the repudiation of such lease; and right of repudiation of such contract under curities contract’— ‘‘(II) may offset against any rent payment this section— ‘‘(I) means a contract for the purchase, which accrues after the date of the repudi- ‘‘(i) the other party shall be paid under the sale, or loan of a security, a certificate of de- ation of the lease, and any damages which terms of the contract for the services per- posit, a mortgage loan, or any interest in a accrue after such date due to the non- formed; and mortgage loan, a group or index of securi- performance of any obligation of the regu- ‘‘(ii) the amount of such payment shall be ties, certificates of deposit, or mortgage lated entity under the lease after such date; treated as an administrative expense of the loans or interests therein (including any in- and conservatorship or receivership. terest therein or based on the value thereof) ‘‘(ii) the conservator or receiver shall not ‘‘(C) ACCEPTANCE OF PERFORMANCE NO BAR or any option on any of the foregoing, in- be liable to the lessee for any damages aris- TO SUBSEQUENT REPUDIATION.—The accept- cluding any option to purchase or sell any ing after such date as a result of the repudi- ance by the conservator or receiver of serv- such security, certificate of deposit, mort- ation, other than the amount of any offset ices referred to under subparagraph (B) in gage loan, interest, group or index, or op- allowed under clause (i)(II). connection with a contract described in such tion, and including any repurchase or reverse ‘‘(6) CONTRACTS FOR THE SALE OF REAL subparagraph shall not affect the right of the repurchase transaction on any such security, PROPERTY.— conservator or receiver to repudiate such certificate of deposit, mortgage loan, inter- ‘‘(A) IN GENERAL.—If the conservator or re- contract under this section at any time after est, group or index, or option; ceiver repudiates any contract for the sale of such performance. ‘‘(II) does not include any purchase, sale, real property and the purchaser of such real ‘‘(8) CERTAIN QUALIFIED FINANCIAL CON- or repurchase obligation under a participa- property under such contract is in posses- TRACTS.— tion in a commercial mortgage loan, unless sion, and is not, as of the date of such repudi- ‘‘(A) RIGHTS OF PARTIES TO CONTRACTS.— the Agency determines by regulation, resolu- ation, in default, such purchaser may ei- Subject to paragraphs (9) and (10), and not- tion, or order to include any such agreement ther— withstanding any other provision of this within the meaning of such term;

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00094 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5865 ‘‘(III) means any option entered into on a ment or transaction under the master agree- mines by regulation, resolution, or order to national securities exchange relating to for- ment that is referred to in subclause (I), (II), include any such participation within the eign currencies; (III), (IV), (V), (VI), (VII), or (VIII); or meaning of such term; ‘‘(IV) means the guarantee by or to any se- ‘‘(X) any security agreement or arrange- ‘‘(III) means any combination of agree- curities clearing agency of any settlement of ment or other credit enhancement related to ments or transactions referred to in sub- cash, securities, certificates of deposit, any agreement or transaction referred to in clauses (I) and (IV); mortgage loans or interests therein, group or this clause, including any guarantee or reim- ‘‘(IV) means any option to enter into any index of securities, certificates of deposit, or bursement obligation in connection with any agreement or transaction referred to in sub- mortgage loans or interests therein (includ- agreement or transaction referred to in this clause (I) or (III); ing any interest therein or based on the clause. ‘‘(V) means a master agreement that pro- value thereof) or option on any of the fore- ‘‘(iv) FORWARD CONTRACT.—The term ‘for- vides for an agreement or transaction re- going, including any option to purchase or ward contract’ means— ferred to in subclause (I), (III), or (IV), to- sell any such security, certificate of deposit, ‘‘(I) a contract (other than a commodity gether with all supplements to any such mortgage loan, interest, group or index, or contract) for the purchase, sale, or transfer master agreement, without regard to wheth- option; of a commodity or any similar good, article, er the master agreement provides for an ‘‘(V) means any margin loan; service, right, or interest which is presently agreement or transaction that is not a repur- ‘‘(VI) means any other agreement or trans- or in the future becomes the subject of deal- chase agreement under this clause, except action that is similar to any agreement or ing in the forward contract trade, or product that the master agreement shall be consid- transaction referred to in this clause; or byproduct thereof, with a maturity date ered to be a repurchase agreement under this ‘‘(VII) means any combination of the more than 2 days after the date on which the subclause only with respect to each agree- agreements or transactions referred to in contract is entered into, including a repur- ment or transaction under the master agree- this clause; chase transaction, reverse repurchase trans- ment that is referred to in subclause (I), ‘‘(VIII) means any option to enter into any action, consignment, lease, swap, hedge (III), or (IV); and agreement or transaction referred to in this transaction, deposit, loan, option, allocated ‘‘(VI) means any security agreement or ar- clause; transaction, unallocated transaction, or any ‘‘(IX) means a master agreement that pro- other similar agreement; rangement or other credit enhancement re- vides for an agreement or transaction re- ‘‘(II) any combination of agreements or lated to any agreement or transaction re- ferred to in subclause (I), (III), (IV), (V), (VI), transactions referred to in subclauses (I) and ferred to in subclause (I), (III), (IV), or (V), (VII), or (VIII), together with all supple- (III); including any guarantee or reimbursement ments to any such master agreement, with- ‘‘(III) any option to enter into any agree- obligation in connection with any agreement out regard to whether the master agreement ment or transaction referred to in subclause or transaction referred to in any such sub- provides for an agreement or transaction (I) or (II); clause. that is not a securities contract under this ‘‘(IV) a master agreement that provides for ‘‘(vi) SWAP AGREEMENT.—The term ‘swap clause, except that the master agreement an agreement or transaction referred to in agreement’ means— shall be considered to be a securities con- subclauses (I), (II), or (III), together with all ‘‘(I) any agreement, including the terms tract under this clause only with respect to supplements to any such master agreement, and conditions incorporated by reference in each agreement or transaction under the without regard to whether the master agree- any such agreement, which is an interest master agreement that is referred to in sub- ment provides for an agreement or trans- rate swap, option, future, or forward agree- clause (I), (III), (IV), (V), (VI), (VII), or action that is not a forward contract under ment, including a rate floor, rate cap, rate (VIII); and this clause, except that the master agree- collar, cross-currency rate swap, and basis ‘‘(X) means any security agreement or ar- ment shall be considered to be a forward con- swap; a spot, same day-tomorrow, tomorrow- rangement or other credit enhancement re- tract under this clause only with respect to next, forward, or other foreign exchange or lated to any agreement or transaction re- each agreement or transaction under the precious metals agreement; a currency swap, ferred to in this clause, including any guar- master agreement that is referred to in sub- option, future, or forward agreement; an eq- antee or reimbursement obligation in con- clause (I), (II), or (III); or uity index or equity swap, option, future, or nection with any agreement or transaction ‘‘(V) any security agreement or arrange- forward agreement; a debt index or debt referred to in this clause. ment or other credit enhancement related to swap, option, future, or forward agreement; a ‘‘(iii) COMMODITY CONTRACT.—The term any agreement or transaction referred to in total return, credit spread or credit swap, op- ‘commodity contract’ means— subclause (I), (II), (III), or (IV), including any tion, future, or forward agreement; a com- ‘‘(I) with respect to a futures commission guarantee or reimbursement obligation in modity index or commodity swap, option, fu- merchant, a contract for the purchase or sale connection with any agreement or trans- ture, or forward agreement; or a weather of a commodity for future delivery on, or action referred to in any such subclause. swap, weather derivative, or weather option; subject to the rules of, a contract market or ‘‘(v) REPURCHASE AGREEMENT.—The term ‘‘(II) any agreement or transaction that is board of trade; ‘repurchase agreement’ (including a reverse similar to any other agreement or trans- ‘‘(II) with respect to a foreign futures com- repurchase agreement)— action referred to in this clause and that is mission merchant, a foreign future; ‘‘(I) means an agreement, including related of a type that has been, is presently, or in ‘‘(III) with respect to a leverage trans- terms, which provides for the transfer of one the future becomes, the subject of recurrent action merchant, a leverage transaction; or more certificates of deposit, mortgage-re- dealings in the swap markets (including ‘‘(IV) with respect to a clearing organiza- lated securities (as such term is defined in terms and conditions incorporated by ref- tion, a contract for the purchase or sale of a section 3 of the Securities Exchange Act of erence in such agreement) and that is a for- commodity for future delivery on, or subject 1934), mortgage loans, interests in mortgage- ward, swap, future, or option on one or more to the rules of, a contract market or board of related securities or mortgage loans, eligible rates, currencies, commodities, equity secu- trade that is cleared by such clearing organi- bankers’ acceptances, qualified foreign gov- rities or other equity instruments, debt secu- zation, or commodity option traded on, or ernment securities (defined for purposes of rities or other debt instruments, quan- subject to the rules of, a contract market or this clause as a security that is a direct obli- titative measures associated with an occur- board of trade that is cleared by such clear- gation of, or that is fully guaranteed by, the rence, extent of an occurrence, or contin- ing organization; central government of a member of the Orga- gency associated with a financial, commer- ‘‘(V) with respect to a commodity options nization for Economic Cooperation and De- cial, or economic consequence, or economic dealer, a commodity option; velopment, as determined by regulation or or financial indices or measures of economic ‘‘(VI) any other agreement or transaction order adopted by the appropriate Federal or financial risk or value; that is similar to any agreement or trans- banking authority), or securities that are di- ‘‘(III) any combination of agreements or action referred to in this clause; rect obligations of, or that are fully guaran- transactions referred to in this clause; ‘‘(VII) any combination of the agreements teed by, the United States or any agency of ‘‘(IV) any option to enter into any agree- or transactions referred to in this clause; the United States against the transfer of ment or transaction referred to in this ‘‘(VIII) any option to enter into any agree- funds by the transferee of such certificates of clause; ment or transaction referred to in this deposit, eligible bankers’ acceptances, secu- ‘‘(V) a master agreement that provides for clause; rities, mortgage loans, or interests with a si- an agreement or transaction referred to in ‘‘(IX) a master agreement that provides for multaneous agreement by such transferee to subclause (I), (II), (III), or (IV), together with an agreement or transaction referred to in transfer to the transferor thereof certificates all supplements to any such master agree- subclause (I), (II), (III), (IV), (V), (VI), (VII), of deposit, eligible bankers’ acceptances, se- ment, without regard to whether the master or (VIII), together with all supplements to curities, mortgage loans, or interests as de- agreement contains an agreement or trans- any such master agreement, without regard scribed above, at a date certain not later action that is not a swap agreement under to whether the master agreement provides than 1 year after such transfers or on de- this clause, except that the master agree- for an agreement or transaction that is not mand, against the transfer of funds, or any ment shall be considered to be a swap agree- a commodity contract under this clause, ex- other similar agreement; ment under this clause only with respect to cept that the master agreement shall be con- ‘‘(II) does not include any repurchase obli- each agreement or transaction under the sidered to be a commodity contract under gation under a participation in a commercial master agreement that is referred to in sub- this clause only with respect to each agree- mortgage loan, unless the Agency deter- clause (I), (II), (III), or (IV); and

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00095 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5866 CONGRESSIONAL RECORD — SENATE June 19, 2008 ‘‘(VI) any security agreement or arrange- liabilities of a regulated entity in default York Stock Exchange or the Federal Reserve ment or other credit enhancement related to which includes any qualified financial con- Bank of New York is closed. any agreements or transactions referred to tract, the conservator or receiver for such ‘‘(11) DISAFFIRMANCE OR REPUDIATION OF in subclause (I), (II), (III), (IV), or (V), in- regulated entity shall either— QUALIFIED FINANCIAL CONTRACTS.—In exer- cluding any guarantee or reimbursement ob- ‘‘(A) transfer to 1 person— cising the rights of disaffirmance or repudi- ligation in connection with any agreement ‘‘(i) all qualified financial contracts be- ation of a conservator or receiver with re- or transaction referred to in any such sub- tween any person (or any affiliate of such spect to any qualified financial contract to clause. person) and the regulated entity in default; which a regulated entity is a party, the con- ‘‘(vii) TREATMENT OF MASTER AGREEMENT ‘‘(ii) all claims of such person (or any affil- servator or receiver for such institution AS ONE AGREEMENT.—Any master agreement iate of such person) against such regulated shall either— for any contract or agreement described in entity under any such contract (other than ‘‘(A) disaffirm or repudiate all qualified fi- any preceding clause of this subparagraph any claim which, under the terms of any nancial contracts between— (or any master agreement for such master such contract, is subordinated to the claims agreement or agreements), together with all of general unsecured creditors of such regu- ‘‘(i) any person or any affiliate of such per- supplements to such master agreement, shall lated entity); son; and be treated as a single agreement and a single ‘‘(iii) all claims of such regulated entity ‘‘(ii) the regulated entity in default; or qualified financial contract. If a master against such person (or any affiliate of such ‘‘(B) disaffirm or repudiate none of the agreement contains provisions relating to person) under any such contract; and qualified financial contracts referred to in agreements or transactions that are not ‘‘(iv) all property securing, or any other subparagraph (A) (with respect to such per- themselves qualified financial contracts, the credit enhancement for any contract de- son or any affiliate of such person). master agreement shall be deemed to be a scribed in clause (i), or any claim described ‘‘(12) CERTAIN SECURITY INTERESTS NOT qualified financial contract only with re- in clause (ii) or (iii) under any such contract; AVOIDABLE.—No provision of this subsection spect to those transactions that are them- or shall be construed as permitting the avoid- selves qualified financial contracts. ‘‘(B) transfer none of the financial con- ance of any legally enforceable or perfected ‘‘(viii) TRANSFER.—The term ‘transfer’ tracts, claims, or property referred to under security interest in any of the assets of any means every mode, direct or indirect, abso- subparagraph (A) (with respect to such per- regulated entity, except where such an inter- lute or conditional, voluntary or involun- son and any affiliate of such person). est is taken in contemplation of the insol- tary, of disposing of or parting with property ‘‘(10) NOTIFICATION OF TRANSFER.— vency of the regulated entity, or with the in- or with an interest in property, including re- ‘‘(A) IN GENERAL.—The conservator or re- tent to hinder, delay, or defraud the regu- tention of title as a security interest and ceiver shall notify any person that is a party lated entity or the creditors of such regu- foreclosure of the equity of redemption of to a contract or transfer by 5:00 p.m. (East- lated entity. the regulated entity. ern Standard Time) on the business day fol- ‘‘(13) AUTHORITY TO ENFORCE CONTRACTS.— ‘‘(E) CERTAIN PROTECTIONS IN EVENT OF AP- lowing the date of the appointment of the re- ‘‘(A) IN GENERAL.—Notwithstanding any POINTMENT OF CONSERVATOR.—Notwith- ceiver in the case of a receivership, or the provision of a contract providing for termi- standing any other provision of this section, business day following such transfer in the nation, default, acceleration, or exercise of any other Federal law, or the law of any case of a conservatorship, if— rights upon, or solely by reason of, insol- State (other than paragraph (10) of this sub- ‘‘(i) the conservator or receiver for a regu- vency or the appointment of, or the exercise section and subsection (b)(9)(B)), no person lated entity in default makes any transfer of of rights or powers by, a conservator or re- shall be stayed or prohibited from exer- the assets and liabilities of such regulated ceiver, the conservator or receiver may en- cising— entity; and ‘‘(i) any right such person has to cause the ‘‘(ii) such transfer includes any qualified force any contract, other than a contract for termination, liquidation, or acceleration of financial contract. liability insurance for a director or officer, any qualified financial contract with a regu- ‘‘(B) CERTAIN RIGHTS NOT ENFORCEABLE.— or a contract or a regulated entity bond, en- lated entity in a conservatorship based upon ‘‘(i) RECEIVERSHIP.—A person who is a tered into by the regulated entity. a default under such financial contract party to a qualified financial contract with a ‘‘(B) CERTAIN RIGHTS NOT AFFECTED.—No which is enforceable under applicable non- regulated entity may not exercise any right provision of this paragraph may be construed insolvency law; that such person has to terminate, liquidate, as impairing or affecting any right of the ‘‘(ii) any right under any security agree- or net such contract under paragraph (8)(A) conservator or receiver to enforce or recover ment or arrangement or other credit en- of this subsection or under section 403 or 404 under a liability insurance contract for an hancement relating to 1 or more such quali- of the Federal Deposit Insurance Corporation officer or director, or regulated entity bond fied financial contracts; or Improvement Act of 1991, solely by reason of under other applicable law. ‘‘(iii) any right to offset or net out any ter- or incidental to the appointment of a re- ‘‘(C) CONSENT REQUIREMENT.— mination values, payment amounts, or other ceiver for the regulated entity (or the insol- ‘‘(i) IN GENERAL.—Except as otherwise pro- transfer obligations arising under or in con- vency or financial condition of the regulated vided under this section, no person may exer- nection with such qualified financial con- entity for which the receiver has been ap- cise any right or power to terminate, accel- tracts. pointed)— erate, or declare a default under any con- ‘‘(F) CLARIFICATION.—No provision of law ‘‘(I) until 5:00 p.m. (Eastern Standard tract to which a regulated entity is a party, shall be construed as limiting the right or Time) on the business day following the date or to obtain possession of or exercise control power of the Agency, or authorizing any of the appointment of the receiver; or over any property of the regulated entity, or court or agency to limit or delay in any ‘‘(II) after the person has received notice affect any contractual rights of the regu- manner, the right or power of the Agency to that the contract has been transferred pursu- lated entity, without the consent of the con- transfer any qualified financial contract in ant to paragraph (9)(A). servator or receiver, as appropriate, for a pe- accordance with paragraphs (9) and (10), or to ‘‘(ii) CONSERVATORSHIP.—A person who is a riod of— disaffirm or repudiate any such contract in party to a qualified financial contract with a ‘‘(I) 45 days after the date of appointment accordance with subsection (d)(1). regulated entity may not exercise any right of a conservator; or ‘‘(G) WALKAWAY CLAUSES NOT EFFECTIVE.— that such person has to terminate, liquidate, ‘‘(II) 90 days after the date of appointment ‘‘(i) IN GENERAL.—Notwithstanding the pro- or net such contract under paragraph (8)(E) of a receiver. visions of subparagraphs (A) and (E), and sec- of this subsection or under section 403 or 404 ‘‘(ii) EXCEPTIONS.—This subparagraph shall tions 403 and 404 of the Federal Deposit In- of the Federal Deposit Insurance Corporation not— surance Corporation Improvement Act of Improvement Act of 1991, solely by reason of 1991, no walkaway clause shall be enforceable or incidental to the appointment of a conser- ‘‘(I) apply to a contract for liability insur- in a qualified financial contract of a regu- vator for the regulated entity (or the insol- ance for an officer or director; lated entity in default. vency or financial condition of the regulated ‘‘(II) apply to the rights of parties to cer- ‘‘(ii) WALKAWAY CLAUSE DEFINED.—For pur- entity for which the conservator has been tain qualified financial contracts under sub- poses of this subparagraph, the term appointed). section (d)(8); and ‘walkaway clause’ means a provision in a ‘‘(iii) NOTICE.—For purposes of this para- ‘‘(III) be construed as permitting the con- qualified financial contract that, after cal- graph, the conservator or receiver of a regu- servator or receiver to fail to comply with culation of a value of a party’s position or an lated entity shall be deemed to have notified otherwise enforceable provisions of such con- amount due to or from 1 of the parties in ac- a person who is a party to a qualified finan- tracts. cordance with its terms upon termination, cial contract with such regulated entity, if ‘‘(14) SAVINGS CLAUSE.—The meanings of liquidation, or acceleration of the qualified the conservator or receiver has taken steps terms used in this subsection are applicable financial contract, either does not create a reasonably calculated to provide notice to for purposes of this subsection only, and payment obligation of a party or extin- such person by the time specified in subpara- shall not be construed or applied so as to guishes a payment obligation of a party in graph (A). challenge or affect the characterization, def- whole or in part solely because of the status ‘‘(C) BUSINESS DAY DEFINED.—For purposes inition, or treatment of any similar terms of such party as a nondefaulting party. of this paragraph, the term ‘business day’ under any other statute, regulation, or rule, ‘‘(9) TRANSFER OF QUALIFIED FINANCIAL CON- means any day other than any Saturday, including the Gramm-Leach-Bliley Act, the TRACTS.—In making any transfer of assets or Sunday, or any day on which either the New Legal Certainty for Bank Products Act of

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00096 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5867

2000, the securities laws (as that term is de- entity shall operate subject to that charter; ‘‘(C) LIMITED-LIFE REGULATED ENTITY fined in section 3(a)(47) of the Securities Ex- and TREATED AS BEING IN DEFAULT FOR CERTAIN change Act of 1934), and the Commodity Ex- ‘‘(ii) shall, in the case of an enterprise, or- PURPOSES.—A limited-life regulated entity change Act. ganize a limited-life regulated entity with shall be treated as a regulated entity in de- ‘‘(15) EXCEPTION FOR FEDERAL RESERVE AND respect to that enterprise in accordance with fault at such times and for such purposes as FEDERAL HOME LOAN BANKS.—No provision of this subsection. the Agency may, in its discretion, deter- this subsection shall apply with respect to— ‘‘(B) AUTHORITIES.—Upon the creation of a mine. ‘‘(A) any extension of credit from any Fed- limited-life regulated entity under subpara- ‘‘(D) MANAGEMENT.—Upon its establish- eral Home Loan Bank or Federal Reserve graph (A), the limited-life regulated entity ment, a limited-life regulated entity shall be Bank to any regulated entity; or may— under the management of a board of direc- ‘‘(B) any security interest in the assets of ‘‘(i) assume such liabilities of the regu- tors consisting of not fewer than 5 nor more the regulated entity securing any such ex- lated entity that is in default or in danger of than 10 members appointed by the Agency. tension of credit. default as the Agency may, in its discretion, ‘‘(E) BYLAWS.—The board of directors of a ‘‘(e) VALUATION OF CLAIMS IN DEFAULT.— determine to be appropriate, except that the limited-life regulated entity shall adopt such ‘‘(1) IN GENERAL.—Notwithstanding any liabilities assumed shall not exceed the bylaws as may be approved by the Agency. other provision of Federal law or the law of amount of assets purchased or transferred ‘‘(3) CAPITAL STOCK.— any State, and regardless of the method from the regulated entity to the limited-life ‘‘(A) NO AGENCY REQUIREMENT.—The Agen- which the Agency determines to utilize with regulated entity; cy is not required to pay capital stock into respect to a regulated entity in default or in ‘‘(ii) purchase such assets of the regulated a limited-life regulated entity or to issue danger of default, including transactions au- entity that is in default, or in danger of de- any capital stock on behalf of a limited-life thorized under subsection (i), this subsection fault as the Agency may, in its discretion, regulated entity established under this sub- shall govern the rights of the creditors of determine to be appropriate; and section. such regulated entity. ‘‘(iii) perform any other temporary func- ‘‘(B) AUTHORITY.—If the Director deter- ‘‘(2) MAXIMUM LIABILITY.—The maximum tion which the Agency may, in its discretion, mines that such action is advisable, the liability of the Agency, acting as receiver or prescribe in accordance with this section. Agency may cause capital stock or other se- in any other capacity, to any person having ‘‘(2) CHARTER AND ESTABLISHMENT.— curities of a limited-life regulated entity es- a claim against the receiver or the regulated ‘‘(A) TRANSFER OF CHARTER.— tablished with respect to an enterprise to be entity for which such receiver is appointed ‘‘(i) FANNIE MAE.—If the Agency is ap- issued and offered for sale, in such amounts shall be not more than the amount that such pointed as receiver for the Federal National and on such terms and conditions as the Di- claimant would have received if the Agency Mortgage Association, the limited-life regu- rector may determine, in the discretion of had liquidated the assets and liabilities of lated entity established under this sub- the Director. the regulated entity without exercising the section with respect to such enterprise shall, ‘‘(4) INVESTMENTS.—Funds of a limited-life authority of the Agency under subsection (i). by operation of law and immediately upon regulated entity shall be kept on hand in ‘‘(f) LIMITATION ON COURT ACTION.—Except its organization— cash, invested in obligations of the United as provided in this section or at the request ‘‘(I) succeed to the charter of the Federal States or obligations guaranteed as to prin- of the Director, no court may take any ac- National Mortgage Association, as set forth cipal and interest by the United States, or tion to restrain or affect the exercise of pow- in the Federal National Mortgage Associa- deposited with the Agency, or any Federal ers or functions of the Agency as a conser- vator or a receiver. tion Charter Act; and reserve bank. ‘‘(g) LIABILITY OF DIRECTORS AND OFFI- ‘‘(II) thereafter operate in accordance with, ‘‘(5) EXEMPT TAX STATUS.—Notwith- CERS.— and subject to, such charter, this Act, and standing any other provision of Federal or ‘‘(1) IN GENERAL.—A director or officer of a any other provision of law to which the Fed- State law, a limited-life regulated entity, its regulated entity may be held personally lia- eral National Mortgage Association is sub- franchise, property, and income shall be ex- ble for monetary damages in any civil action ject, except as otherwise provided in this empt from all taxation now or hereafter im- described in paragraph (2) brought by, on be- subsection. posed by the United States, by any territory, half of, or at the request or direction of the ‘‘(ii) FREDDIE MAC.—If the Agency is ap- dependency, or possession thereof, or by any Agency, and prosecuted wholly or partially pointed as receiver for the Federal Home State, county, municipality, or local taxing for the benefit of the Agency— Loan Mortgage Corporation, the limited-life authority. ‘‘(A) acting as conservator or receiver of regulated entity established under this sub- ‘‘(6) WINDING UP.— such regulated entity; or section with respect to such enterprise shall, ‘‘(A) IN GENERAL.—Subject to subpara- ‘‘(B) acting based upon a suit, claim, or by operation of law and immediately upon graphs (B) and (C), not later than 2 years cause of action purchased from, assigned by, its organization— after the date of its organization, the Agency or otherwise conveyed by such receiver or ‘‘(I) succeed to the charter of the Federal shall wind up the affairs of a limited-life reg- conservator. Home Loan Mortgage Corporation, as set ulated entity. ‘‘(2) ACTIONS ADDRESSED.—Paragraph (1) forth in the Federal Home Loan Mortgage ‘‘(B) EXTENSION.—The Director may, in the applies in any civil action for gross neg- Corporation Charter Act; and discretion of the Director, extend the status ligence, including any similar conduct or ‘‘(II) thereafter operate in accordance with, of a limited-life regulated entity for 3 addi- conduct that demonstrates a greater dis- and subject to, such charter, this Act, and tional 1-year periods. regard of a duty of care than gross neg- any other provision of law to which the Fed- ‘‘(C) TERMINATION OF STATUS AS LIMITED- ligence, including intentional tortious con- eral Home Loan Mortgage Corporation is LIFE REGULATED ENTITY.— duct, as such terms are defined and deter- subject, except as otherwise provided in this ‘‘(i) IN GENERAL.—Upon the sale by the mined under applicable State law. subsection. Agency of 80 percent or more of the capital ‘‘(3) NO LIMITATION.—Nothing in this sub- ‘‘(B) INTERESTS IN AND ASSETS AND OBLIGA- stock of a limited-life regulated entity, as section shall impair or affect any right of TIONS OF REGULATED ENTITY IN DEFAULT.— defined in clause (iv), to 1 or more persons the Agency under other applicable law. Notwithstanding subparagraph (A) or any (other than the Agency)— ‘‘(h) DAMAGES.—In any proceeding related other provision of law— ‘‘(I) the status of the limited-life regulated to any claim against a director, officer, em- ‘‘(i) a limited-life regulated entity shall as- entity as such shall terminate; and ployee, agent, attorney, accountant, ap- sume, acquire, or succeed to the assets or li- ‘‘(II) the entity shall cease to be a limited- praiser, or any other party employed by or abilities of a regulated entity only to the ex- life regulated entity for purposes of this sub- providing services to a regulated entity, re- tent that such assets or liabilities are trans- section. coverable damages determined to result from ferred by the Agency to the limited-life regu- ‘‘(ii) DIVESTITURE OF REMAINING STOCK, IF the improvident or otherwise improper use lated entity in accordance with, and subject ANY.— or investment of any assets of the regulated to the restrictions set forth in, paragraph ‘‘(I) IN GENERAL.—Not later than 1 year entity shall include principal losses and ap- (1)(B); after the date on which the status of a lim- propriate interest. ‘‘(ii) a limited-life regulated entity shall ited-life regulated entity is terminated pur- ‘‘(i) LIMITED-LIFE REGULATED ENTITIES.— not assume, acquire, or succeed to any obli- suant to clause (i), the Agency shall sell to ‘‘(1) ORGANIZATION.— gation that a regulated entity for which a re- 1 or more persons (other than the Agency) ‘‘(A) PURPOSE.—The Agency, as receiver ceiver has been appointed may have to any any remaining capital stock of the former appointed pursuant to subsection (a)— shareholder of the regulated entity that limited-life regulated entity. ‘‘(i) may, in the case of a Federal Home arises as a result of the status of that person ‘‘(II) EXTENSION AUTHORIZED.—The Director Loan Bank, organize a limited-life regulated as a shareholder of the regulated entity; and may extend the period referred to in sub- entity with those powers and attributes of ‘‘(iii) no shareholder or creditor of a regu- clause (I) for not longer than an additional 2 the Federal Home Loan Bank in default or in lated entity shall have any right or claim years, if the Director determines that such danger of default as the Director determines against the charter of the regulated entity action would be in the public interest. necessary, subject to the provisions of this once the Agency has been appointed receiver ‘‘(iii) SAVINGS CLAUSE.—Notwithstanding subsection, and the Director shall grant a for the regulated entity and a limited-life any provision of law, other than clause (ii), temporary charter to that limited-life regu- regulated entity succeeds to the charter pur- the Agency shall not be required to sell the lated entity, and that limited-life regulated suant to subparagraph (A). capital stock of an enterprise or a limited-

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00097 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5868 CONGRESSIONAL RECORD — SENATE June 19, 2008 life regulated entity established with respect tors, officers, employees, and agents of a erty with respect to which such senior or to an enterprise. limited-life regulated entity on such terms equal lien is proposed to be granted. ‘‘(iv) APPLICABILITY.—This subparagraph as the Agency determines to be appropriate; ‘‘(D) BURDEN OF PROOF.—In any hearing applies only with respect to a limited-life and under this subsection, the Director has the regulated entity that is established with re- ‘‘(ii) the board of directors of a limited-life burden of proof on the issue of adequate pro- spect to an enterprise. regulated entity— tection. ‘‘(7) TRANSFER OF ASSETS AND LIABILITIES.— ‘‘(I) shall elect a chairperson who may also ‘‘(12) AFFECT ON DEBTS AND LIENS.—The re- ‘‘(A) IN GENERAL.— serve in the position of chief executive offi- versal or modification on appeal of an au- ‘‘(i) TRANSFER OF ASSETS AND LIABILITIES.— cer, except that such person shall not serve thorization under this subsection to obtain The Agency, as receiver, may transfer any either as chairperson or as chief executive credit or issue debt, or of a grant under this assets and liabilities of a regulated entity in officer without the prior approval of the section of a priority or a lien, does not affect default, or in danger of default, to the lim- Agency; and the validity of any debt so issued, or any pri- ited-life regulated entity in accordance with ‘‘(II) may appoint a chief executive officer ority or lien so granted, to an entity that ex- and subject to the restrictions of paragraph who is not also the chairperson, except that tended such credit in good faith, whether or (1). such person shall not serve as chief executive not such entity knew of the pendency of the ‘‘(ii) SUBSEQUENT TRANSFERS.—At any time officer without the prior approval of the appeal, unless such authorization and the after the establishment of a limited-life reg- Agency. issuance of such debt, or the granting of such ulated entity, the Agency, as receiver, may ‘‘(B) STAY OF JUDICIAL ACTION.—Any judi- priority or lien, were stayed pending appeal. transfer any assets and liabilities of the reg- cial action to which a limited-life regulated ‘‘(j) OTHER AGENCY EXEMPTIONS.— ulated entity in default, or in danger of de- entity becomes a party by virtue of its ac- ‘‘(1) APPLICABILITY.—The provisions of this fault, as the Agency may, in its discretion, quisition of any assets or assumption of any subsection shall apply with respect to the determine to be appropriate in accordance liabilities of a regulated entity in default Agency in any case in which the Agency is with and subject to the restrictions of para- shall be stayed from further proceedings for acting as a conservator or a receiver. graph (1). a period of not longer than 45 days, at the re- ‘‘(2) TAXATION.—The Agency, including its ‘‘(iii) EFFECTIVE WITHOUT APPROVAL.—The quest of the limited-life regulated entity. franchise, its capital, reserves, and surplus, transfer of any assets or liabilities of a regu- Such period may be modified upon the con- and its income, shall be exempt from all tax- lated entity in default or in danger of default sent of all parties. ation imposed by any State, county, munici- to a limited-life regulated entity shall be ef- ‘‘(10) NO FEDERAL STATUS.— pality, or local taxing authority, except that fective without any further approval under ‘‘(A) AGENCY STATUS.—A limited-life regu- any real property of the Agency shall be sub- Federal or State law, assignment, or consent lated entity is not an agency, establishment, ject to State, territorial, county, municipal, with respect thereto. or instrumentality of the United States. or local taxation to the same extent accord- ‘‘(iv) EQUITABLE TREATMENT OF SIMILARLY ‘‘(B) EMPLOYEE STATUS.—Representatives ing to its value as other real property is SITUATED CREDITORS.—The Agency shall for purposes of paragraph (1)(B), interim di- taxed, except that, notwithstanding the fail- treat all creditors of a regulated entity in rectors, directors, officers, employees, or ure of any person to challenge an assessment default or in danger of default that are simi- agents of a limited-life regulated entity are under State law of the value of such prop- larly situated under subsection (c)(1) in a not, solely by virtue of service in any such erty, and the tax thereon, shall be deter- similar manner in exercising the authority capacity, officers or employees of the United mined as of the period for which such tax is of the Agency under this subsection to trans- States. Any employee of the Agency or of imposed. fer any assets or liabilities of the regulated any Federal instrumentality who serves at ‘‘(3) PROPERTY PROTECTION.—No property of entity to the limited-life regulated entity es- the request of the Agency as a representative the Agency shall be subject to levy, attach- tablished with respect to such regulated en- for purposes of paragraph (1)(B), interim di- ment, garnishment, foreclosure, or sale with- tity, except that the Agency may take ac- rector, director, officer, employee, or agent out the consent of the Agency, nor shall any tions (including making payments) that do of a limited-life regulated entity shall not— involuntary lien attach to the property of not comply with this clause, if— ‘‘(i) solely by virtue of service in any such the Agency. ‘‘(I) the Director determines that such ac- capacity lose any existing status as an offi- ‘‘(4) PENALTIES AND FINES.—The Agency tions are necessary to maximize the value of cer or employee of the United States for pur- shall not be liable for any amounts in the na- the assets of the regulated entity, to maxi- poses of title 5, United States Code, or any ture of penalties or fines, including those mize the present value return from the sale other provision of law; or arising from the failure of any person to pay or other disposition of the assets of the regu- ‘‘(ii) receive any salary or benefits for serv- any real property, personal property, pro- lated entity, or to minimize the amount of ice in any such capacity with respect to a bate, or recording tax or any recording or fil- any loss realized upon the sale or other dis- limited-life regulated entity in addition to position of the assets of the regulated entity; such salary or benefits as are obtained ing fees when due. ‘‘(k) PROHIBITION OF CHARTER REVOCA- and through employment with the Agency or TION.—In no case may the receiver appointed ‘‘(II) all creditors that are similarly situ- such Federal instrumentality. pursuant to this section revoke, annul, or ated under subsection (c)(1) receive not less ‘‘(11) AUTHORITY TO OBTAIN CREDIT.— terminate the charter of an enterprise.’’. than the amount provided in subsection ‘‘(A) IN GENERAL.—A limited-life regulated (b) TECHNICAL AND CONFORMING AMEND- (e)(2). entity may obtain unsecured credit and issue MENTS.—The Federal Housing Enterprises Fi- ‘‘(v) LIMITATION ON TRANSFER OF LIABIL- unsecured debt. nancial Safety and Soundness Act of 1992 (12 ITIES.—Notwithstanding any other provision ‘‘(B) INABILITY TO OBTAIN CREDIT.—If a lim- of law, the aggregate amount of liabilities of ited-life regulated entity is unable to obtain U.S.C. 4501 et seq.) is amended— a regulated entity that are transferred to, or unsecured credit or issue unsecured debt, the (1) in section 1368 (12 U.S.C. 4618)— assumed by, a limited-life regulated entity Director may authorize the obtaining of (A) by striking ‘‘an enterprise’’ each place may not exceed the aggregate amount of as- credit or the issuance of debt by the limited- that term appears and inserting ‘‘a regulated sets of the regulated entity that are trans- life regulated entity— entity’’; and ferred to, or purchased by, the limited-life ‘‘(i) with priority over any or all of the ob- (B) by striking ‘‘the enterprise’’ each place regulated entity. ligations of the limited-life regulated entity; that term appears and inserting ‘‘the regu- lated entity’’; ‘‘(8) REGULATIONS.—The Agency may pro- ‘‘(ii) secured by a lien on property of the mulgate such regulations as the Agency de- limited-life regulated entity that is not oth- (2) in section 1369C (12 U.S.C. 4622), by termines to be necessary or appropriate to erwise subject to a lien; or striking ‘‘enterprise’’ each place that term implement this subsection. ‘‘(iii) secured by a junior lien on property appears and inserting ‘‘regulated entity’’; (3) in section 1369D (12 U.S.C. 4623)— ‘‘(9) POWERS OF LIMITED-LIFE REGULATED of the limited-life regulated entity that is (A) by striking ‘‘an enterprise’’ each place ENTITIES.— subject to a lien. that term appears and inserting ‘‘a regulated ‘‘(A) IN GENERAL.—Each limited-life regu- ‘‘(C) LIMITATIONS.— entity’’; and lated entity created under this subsection ‘‘(i) IN GENERAL.—The Director, after no- shall have all corporate powers of, and be tice and a hearing, may authorize the ob- (B) in subsection (a)(1), by striking ‘‘An en- subject to the same provisions of law as, the taining of credit or the issuance of debt by a terprise’’ and inserting ‘‘A regulated entity’’; regulated entity in default or in danger of limited-life regulated entity that is secured and default to which it relates, except that— by a senior or equal lien on property of the (4) by striking sections 1369, 1369A, and ‘‘(i) the Agency may— limited-life regulated entity that is subject 1369B (12 U.S.C. 4619, 4620, and 4621). ‘‘(I) remove the directors of a limited-life to a lien (other than mortgages that Subtitle D—Enforcement Actions regulated entity; collateralize the mortgage-backed securities SEC. 1151. CEASE AND DESIST PROCEEDINGS. ‘‘(II) fix the compensation of members of issued or guaranteed by an enterprise) only Section 1371 of the Federal Housing Enter- the board of directors and senior manage- if— prises Financial Safety and Soundness Act of ment, as determined by the Agency in its ‘‘(I) the limited-life regulated entity is un- 1992 (12 U.S.C. 4631) is amended— discretion, of a limited-life regulated entity; able to otherwise obtain such credit or issue (1) by striking subsections (a) and (b) and and such debt; and inserting the following: ‘‘(III) indemnify the representatives for ‘‘(II) there is adequate protection of the in- ‘‘(a) ISSUANCE FOR UNSAFE OR UNSOUND purposes of paragraph (1)(B), and the direc- terest of the holder of the lien on the prop- PRACTICES AND VIOLATIONS.—

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00098 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5869

‘‘(1) AUTHORITY OF DIRECTOR.—If, in the (5) in subsection (e), by inserting ‘‘or enti- or any officer, director, or management of opinion of the Director, a regulated entity or ty-affiliated party’’— the Office of Finance, if the Director deter- any entity-affiliated party is engaging or has (A) before ‘‘or any executive’’; and mines that— engaged, or the Director has reasonable (B) before the period at the end; and ‘‘(A) that party, officer, or director has, di- cause to believe that the regulated entity or (6) in subsection (f)— rectly or indirectly— any entity-affiliated party is about to en- (A) by striking ‘‘enterprise’’ and inserting ‘‘(i) violated— gage, in an unsafe or unsound practice in ‘‘regulated entity, finance facility,’’; and ‘‘(I) any law or regulation; conducting the business of the regulated en- (B) by striking ‘‘or director’’ and inserting ‘‘(II) any cease and desist order which has tity or the Office of Finance, or is violating ‘‘director, or entity-affiliated party’’. become final; or has violated, or the Director has reason- SEC. 1152. TEMPORARY CEASE AND DESIST PRO- ‘‘(III) any condition imposed in writing by able cause to believe is about to violate, a CEEDINGS. the Director in connection with the grant of law, rule, regulation, or order, or any condi- Section 1372 of the Federal Housing Enter- any application or other request by such reg- tion imposed in writing by the Director in prises Financial Safety and Soundness Act of ulated entity; or connection with the granting of any applica- 1992 (12 U.S.C. 4632) is amended— ‘‘(IV) any written agreement between such tion or other request by the regulated entity (1) by striking subsection (a) and inserting regulated entity and the Director; or the Office of Finance or any written the following: ‘‘(ii) engaged or participated in any unsafe agreement entered into with the Director, ‘‘(a) GROUNDS FOR ISSUANCE.— or unsound practice in connection with any the Director may issue and serve upon the ‘‘(1) IN GENERAL.—If the Director deter- regulated entity or business institution; or regulated entity or entity-affiliated party a mines that the actions specified in the notice ‘‘(iii) committed or engaged in any act, notice of charges in respect thereof. of charges served upon a regulated entity or omission, or practice which constitutes a ‘‘(2) LIMITATION.—The Director may not, any entity-affiliated party pursuant to sec- breach of such party’s fiduciary duty; pursuant to this section, enforce compliance tion 1371(a), or the continuation thereof, is ‘‘(B) by reason of the violation, practice, or with any housing goal established under sub- likely to cause insolvency or significant dis- breach described in subparagraph (A)— part B of part 2 of subtitle A of this title, sipation of assets or earnings of that entity, ‘‘(i) such regulated entity or business insti- with section 1336 or 1337 of this title, with or is likely to weaken the condition of that tution has suffered or will probably suffer fi- subsection (m) or (n) of section 309 of the entity prior to the completion of the pro- nancial loss or other damage; or Federal National Mortgage Association ceedings conducted pursuant to sections 1371 ‘‘(ii) such party has received financial gain Charter Act (12 U.S.C. 1723a(m), (n)), with and 1373, the Director may— or other benefit; and subsection (e) or (f) of section 307 of the Fed- ‘‘(A) issue a temporary order requiring ‘‘(C) the violation, practice, or breach de- eral Home Loan Mortgage Corporation Act that regulated entity or entity-affiliated scribed in subparagraph (A)— (12 U.S.C. 1456(e), (f)), or with paragraph (5) party to cease and desist from any such vio- ‘‘(i) involves personal dishonesty on the of section 10(j) of the Federal Home Loan lation or practice; and part of such party; or ‘‘(ii) demonstrates willful or continuing Bank Act (12 U.S.C. 1430(j)). ‘‘(B) require that regulated entity or enti- disregard by such party for the safety or ty-affiliated party to take affirmative action ‘‘(b) ISSUANCE FOR UNSATISFACTORY RAT- soundness of such regulated entity or busi- to prevent or remedy such insolvency, dis- ING.—If a regulated entity receives, in its ness institution. sipation, condition, or prejudice pending most recent report of examination, a less- ‘‘(b) SUSPENSION ORDER.— completion of such proceedings. than-satisfactory rating for asset quality, ‘‘(1) SUSPENSION OR PROHIBITION AUTHOR- ‘‘(2) ADDITIONAL REQUIREMENTS.—An order management, earnings, or liquidity, the Di- ITY.—If the Director serves written notice rector may (if the deficiency is not cor- issued under paragraph (1) may include any under subsection (a) upon a party subject to rected) deem the regulated entity to be en- requirement authorized under subsection that subsection (a), the Director may, by gaging in an unsafe or unsound practice for 1371(d).’’; order, suspend or remove such party from of- purposes of subsection (a).’’; (2) in subsection (b)— fice, or prohibit such party from further par- (2) in subsection (c)— (A) by striking ‘‘or director’’ and inserting ticipation in any manner in the conduct of (A) in paragraph (1), by inserting before ‘‘director, or entity-affiliated party’’; and the affairs of the regulated entity, if the Di- the period at the end the following: ‘‘, unless (B) by striking ‘‘enterprise’’ each place rector— the party served with a notice of charges that term appears and inserting ‘‘regulated ‘‘(A) determines that such action is nec- shall appear at the hearing personally or by entity’’; essary for the protection of the regulated en- a duly authorized representative, the party (3) in subsection (c), by striking ‘‘enter- tity; and shall be deemed to have consented to the prise’’ each place that term appears and in- ‘‘(B) serves such party with written notice issuance of the cease and desist order’’; and serting ‘‘regulated entity’’; of the order. (B) in paragraph (2)— (4) in subsection (d)— ‘‘(2) EFFECTIVE PERIOD.—Any order issued (i) by striking ‘‘or director’’ and inserting (A) by striking ‘‘or director’’ each place under this subsection— ‘‘director, or entity-affiliated party’’; and that term appears and inserting ‘‘director, or ‘‘(A) shall become effective upon service; (ii) by inserting ‘‘or entity-affiliated entity-affiliated party’’; and and party’’ before ‘‘consents’’; (B) by striking ‘‘An enterprise’’ and insert- ‘‘(B) unless a court issues a stay of such (3) in each of subsections (c), (d), and (e)— ing ‘‘A regulated entity’’; and order under subsection (g), shall remain in (A) by striking ‘‘the enterprise’’ each place (5) in subsection (e)— effect and enforceable until— that term appears and inserting ‘‘the regu- (A) by striking ‘‘request the Attorney Gen- ‘‘(i) the date on which the Director dis- lated entity’’; eral of the United States to’’; and misses the charges contained in the notice (B) by striking ‘‘an enterprise’’ each place (B) by striking ‘‘or may, under the direc- served under subsection (a) with respect to that term appears and inserting ‘‘a regulated tion and control of the Attorney General, such party; or entity’’; and bring such action’’. ‘‘(ii) the effective date of an order issued (C) by striking ‘‘conduct’’ each place that SEC. 1153. REMOVAL AND PROHIBITION AUTHOR- under subsection (b). term appears and inserting ‘‘practice’’; ITY. ‘‘(3) COPY OF ORDER.—If the Director issues (4) in subsection (d)— (a) IN GENERAL.—Part 1 of subtitle C of the an order under subsection (b) to any party, (A) in the matter preceding paragraph (1)— Federal Housing Enterprises Financial Safe- the Director shall serve a copy of such order (i) by striking ‘‘or director’’ and inserting ty and Soundness Act of 1992 (12 U.S.C. 4631 on any regulated entity with which such ‘‘director, or entity-affiliated party’’; and et seq.) is amended— party is affiliated at the time such order is (ii) by inserting ‘‘to require a regulated en- (1) by redesignating sections 1377 through issued. tity or entity-affiliated party’’ after ‘‘in- 1379B (12 U.S.C. 4637–4641) as sections 1379 ‘‘(c) NOTICE, HEARING, AND ORDER.— cludes the authority’’; through 1379D, respectively; and ‘‘(1) NOTICE.—A notice under subsection (a) (B) in paragraph (1)— (2) by inserting after section 1376 (12 U.S.C. of the intention of the Director to issue an (i) by striking ‘‘to require an executive of- 4636) the following: order under this section shall contain a ficer or a director to’’; and ‘‘SEC. 1377. REMOVAL AND PROHIBITION AU- statement of the facts constituting grounds (ii) by striking ‘‘loss’’ and all that follows THORITY. for such action, and shall fix a time and through ‘‘person’’ and inserting ‘‘loss, if’’; ‘‘(a) AUTHORITY TO ISSUE ORDER.— place at which a hearing will be held on such (iii) in subparagraph (A), by inserting ‘‘(1) IN GENERAL.—The Director may serve action. ‘‘such entity or party or finance facility’’ be- upon a party described in paragraph (2), or ‘‘(2) TIMING OF HEARING.—A hearing shall fore ‘‘was’’; and any officer, director, or management of the be fixed for a date not earlier than 30 days, (iv) by striking subparagraph (B) and in- Office of Finance a written notice of the in- nor later than 60 days, after the date of serv- serting the following: tention of the Director to suspend or remove ice of notice under subsection (a), unless an ‘‘(B) the violation or practice involved a such party from office, or prohibit any fur- earlier or a later date is set by the Director reckless disregard for the law or any applica- ther participation by such party, in any at the request of— ble regulations or prior order of the Direc- manner, in the conduct of the affairs of the ‘‘(A) the party receiving such notice, and tor;’’; and regulated entity. good cause is shown; or (C) in paragraph (4), by inserting ‘‘loan or’’ ‘‘(2) APPLICABILITY.—A party described in ‘‘(B) the Attorney General of the United before ‘‘asset’’; this paragraph is an entity-affiliated party States.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00099 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5870 CONGRESSIONAL RECORD — SENATE June 19, 2008

‘‘(3) CONSENT.—Unless the party that is the trict of Columbia, or the United States dis- there shall be a quorum of the board of direc- subject of a notice delivered under sub- trict court for the judicial district in which tors. section (a) appears at the hearing in person the headquarters of the regulated entity is ‘‘(B) APPOINTMENT OF TEMPORARY DIREC- or by a duly authorized representative, such located, for a stay of such suspension or pro- TORS.—If all of the directors of a regulated party shall be deemed to have consented to hibition pending the completion of the ad- entity are suspended pursuant to this sec- the issuance of an order under this section. ministrative proceedings pursuant to sub- tion, the Director shall appoint persons to ‘‘(4) ISSUANCE OF ORDER OF SUSPENSION.— section (c). The court shall have jurisdiction serve temporarily as directors pending the The Director may issue an order under this to stay such suspension or prohibition. termination of such suspensions, or until section, as the Director may deem appro- ‘‘(h) SUSPENSION OR REMOVAL OF ENTITY- such time as those who have been suspended priate, if— AFFILIATED PARTY CHARGED WITH FELONY.— cease to be directors of the regulated entity ‘‘(A) a party is deemed to have consented ‘‘(1) SUSPENSION OR PROHIBITION.— and their respective successors take office. to the issuance of an order under paragraph ‘‘(A) IN GENERAL.—Whenever any entity-af- ‘‘(4) HEARING REGARDING CONTINUED PAR- (3); or filiated party is charged in any information, TICIPATION.— ‘‘(B) upon the record made at the hearing, indictment, or complaint, with the commis- ‘‘(A) IN GENERAL.—Not later than 30 days the Director finds that any of the grounds sion of or participation in a crime involving after the date of service of any notice of sus- specified in the notice have been established. dishonesty or breach of trust which is pun- pension or order of removal issued pursuant ishable by imprisonment for a term exceed- ‘‘(5) EFFECTIVENESS OF ORDER.—Any order to paragraph (1) or (2), the entity-affiliated issued under paragraph (4) shall become ef- ing 1 year under Federal or State law, the party may request in writing an opportunity fective at the expiration of 30 days after the Director may, if continued service or partici- to appear before the Director to show that date of service upon the relevant regulated pation by such party may pose a threat to the continued service or participation in the the regulated entity or impair public con- entity and party (except in the case of an conduct of the affairs of the regulated entity fidence in the regulated entity, by written order issued upon consent under paragraph by such party does not, or is not likely to, notice served upon such party, suspend such (3), which shall become effective at the time pose a threat to the interests of the regu- party from office or prohibit such party from specified therein). Such order shall remain lated entity, or threaten to impair public further participation in any manner in the effective and enforceable except to such ex- confidence in the regulated entity. conduct of the affairs of any regulated enti- tent as it is stayed, modified, terminated, or ‘‘(B) TIMING AND FORM OF HEARING.—Upon ty. set aside by action of the Director or a re- receipt of a request for a hearing under sub- ‘‘(B) PROVISIONS APPLICABLE TO NOTICE.— viewing court. paragraph (A), the Director shall fix a time ‘‘(i) COPY.—A copy of any notice under sub- ‘‘(d) PROHIBITION OF CERTAIN SPECIFIC AC- (not later than 30 days after the date of re- paragraph (A) shall be served upon the rel- TIVITIES.—Any person subject to an order evant regulated entity. ceipt of such request, unless extended at the issued under this section shall not— request of such party) and place at which the ‘‘(1) participate in any manner in the con- ‘‘(ii) EFFECTIVE PERIOD.—A suspension or prohibition under subparagraph (A) shall re- entity-affiliated party may appear, person- duct of the affairs of any regulated entity or ally or through counsel, before the Director the Office of Finance; main in effect until the information, indict- ment, or complaint referred to in subpara- or 1 or more designated employees of the Di- ‘‘(2) solicit, procure, transfer, attempt to graph (A) is finally disposed of, or until ter- rector to submit written materials (or, at transfer, vote, or attempt to vote any proxy, minated by the Director. the discretion of the Director, oral testi- consent, or authorization with respect to ‘‘(2) REMOVAL OR PROHIBITION.— mony) and oral argument. any voting rights in any regulated entity; ‘‘(A) IN GENERAL.—If a judgment of convic- ‘‘(C) DETERMINATION.—Not later than 60 ‘‘(3) violate any voting agreement pre- tion or an agreement to enter a pretrial di- days after the date of a hearing under sub- viously approved by the Director; or version or other similar program is entered paragraph (B), the Director shall notify the ‘‘(4) vote for a director, or serve or act as against an entity-affiliated party in connec- entity-affiliated party whether the suspen- an entity-affiliated party of a regulated enti- tion with a crime described in paragraph sion or prohibition from participation in any ty or as an officer or director of the Office of (1)(A), at such time as such judgment is not manner in the conduct of the affairs of the Finance. subject to further appellate review, the Di- regulated entity will be continued, termi- ‘‘(e) INDUSTRY-WIDE PROHIBITION.— rector may, if continued service or participa- nated, or otherwise modified, or whether the ‘‘(1) IN GENERAL.—Except as provided in tion by such party may pose a threat to the order removing such party from office or paragraph (2), any person who, pursuant to regulated entity or impair public confidence prohibiting such party from further partici- an order issued under this section, has been in the regulated entity, issue and serve upon pation in any manner in the conduct of the removed or suspended from office in a regu- such party an order removing such party affairs of the regulated entity will be re- lated entity or the Office of Finance, or pro- from office or prohibiting such party from scinded or otherwise modified. Such notifica- hibited from participating in the conduct of further participation in any manner in the tion shall contain a statement of the basis the affairs of a regulated entity or the Office conduct of the affairs of the regulated entity for any adverse decision of the Director. of Finance, may not, while such order is in without the prior written consent of the Di- ‘‘(5) RULES.—The Director is authorized to effect, continue or commence to hold any of- rector. prescribe such rules as may be necessary to fice in, or participate in any manner in the ‘‘(B) PROVISIONS APPLICABLE TO ORDER.— carry out this subsection.’’. conduct of the affairs of, any regulated enti- ‘‘(i) COPY.—A copy of any order under sub- (b) CONFORMING AMENDMENTS.— ty or the Office of Finance. paragraph (A) shall be served upon the rel- (1) SAFETY AND SOUNDNESS ACT.—Subtitle C ‘‘(2) EXCEPTION IF DIRECTOR PROVIDES WRIT- evant regulated entity, at which time the en- of the Federal Housing Enterprises Financial TEN CONSENT.—If, on or after the date on tity-affiliated party who is subject to the Safety and Soundness Act of 1992 (12 U.S.C. which an order is issued under this section order (if a director or an officer) shall cease 4501 et seq.) is amended— which removes or suspends from office any to be a director or officer of such regulated (A) in section 1317(f), by striking ‘‘section party, or prohibits such party from partici- entity. 1379B’’ and inserting ‘‘section 1379D’’; pating in the conduct of the affairs of a regu- ‘‘(ii) EFFECT OF ACQUITTAL.—A finding of (B) in section 1373(a)— lated entity or the Office of Finance, such not guilty or other disposition of the charge (i) in paragraph (1), by striking ‘‘or 1376(c)’’ party receives the written consent of the Di- shall not preclude the Director from insti- and inserting ‘‘, 1376(c), or 1377’’; rector, the order shall, to the extent of such tuting proceedings after such finding or dis- (ii) in paragraph (2), by inserting ‘‘or 1377’’ consent, cease to apply to such party with position to remove a party from office or to after’’1371’’; and respect to the regulated entity or such Office prohibit further participation in the affairs (iii) in paragraph (4), by inserting ‘‘or re- of Finance described in the written consent. of a regulated entity pursuant to subsection moval or prohibition’’ after ‘‘cease and de- Any such consent shall be publicly disclosed. (a) or (b). sist’’; and ‘‘(3) VIOLATION OF PARAGRAPH (1) TREATED ‘‘(iii) EFFECTIVE PERIOD.—Unless termi- (C) in section 1374(a)— AS VIOLATION OF ORDER.—Any violation of nated by the Director, any notice of suspen- (i) by striking ‘‘or 1376’’ and inserting paragraph (1) by any person who is subject to sion or order of removal issued under this ‘‘1313B , 1376, or 1377’’; and an order issued under subsection (h) shall be subsection shall remain effective and out- (ii) by striking ‘‘such section’’ and insert- treated as a violation of the order. standing until the completion of any hearing ing ‘‘this title’’. ‘‘(f) APPLICABILITY.—This section shall only apply to a person who is an individual, or appeal authorized under paragraph (4). (2) FANNIE MAE CHARTER ACT.—Section unless the Director specifically finds that it ‘‘(3) AUTHORITY OF REMAINING BOARD MEM- 308(b) of the Federal National Mortgage As- should apply to a corporation, firm, or other BERS.— sociation Charter Act (12 U.S.C. 1723(b)) is business entity. ‘‘(A) IN GENERAL.—If at any time, because amended in the second sentence, by striking ‘‘(g) STAY OF SUSPENSION AND PROHIBITION of the suspension of 1 or more directors pur- ‘‘The’’ and inserting ‘‘Except to the extent OF ENTITY-AFFILIATED PARTY.—Not later suant to this section, there shall be on the that action under section 1377 of the Federal than 10 days after the date on which any en- board of directors of a regulated entity less Housing Enterprises Financial Safety and tity-affiliated party has been suspended from than a quorum of directors not so suspended, Soundness Act of 1992 temporarily results in office or prohibited from participation in the all powers and functions vested in or exer- a lesser number, the’’. conduct of the affairs of a regulated entity cisable by such board shall vest in and be ex- (3) FREDDIE MAC CHARTER ACT.—Section under this section, such party may apply to ercisable by the director or directors on the 303(a)(2)(A) of the Federal Home Loan Mort- the United States District Court for the Dis- board not so suspended, until such time as gage Corporation Act (12 U.S.C. 1452(a)(2)(A))

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00100 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5871 is amended, in the second sentence, by strik- under paragraph (4) for each day during (3) in section 1379B(c) (as so designated by ing ‘‘The’’ and inserting ‘‘Except to the ex- which such violation, practice, or breach this Act), by striking ‘‘enterprise’’ and in- tent action under section 1377 of the Federal continues, if such regulated entity or entity- serting ‘‘regulated entity’’; and Housing Enterprises Financial Safety and affiliated party— (4) in section 1379D (as so designated by Soundness Act of 1992 temporarily results in ‘‘(A) knowingly— this Act), by striking ‘‘enterprise’’ and in- a lesser number, the’’. ‘‘(i) commits any violation described in serting ‘‘regulated entity’’. SEC. 1154. ENFORCEMENT AND JURISDICTION. any subparagraph of paragraph (1); SEC. 1157. NOTICE AFTER SEPARATION FROM Section 1375 of the Federal Housing Enter- ‘‘(ii) engages in any unsafe or unsound SERVICE. prises Financial Safety and Soundness Act of practice in conducting the affairs of the reg- Section 1379 of the Federal Housing Enter- 1992 (12 U.S.C. 4635) is amended— ulated entity; or prises Financial Safety and Soundness Act of (1) by striking subsection (a) and inserting ‘‘(iii) breaches any fiduciary duty; and 1992 (12 U.S.C. 4637), as so designated by this the following new subsection: ‘‘(B) knowingly or recklessly causes a sub- Act, is amended— ‘‘(a) ENFORCEMENT.—The Director may, in stantial loss to the regulated entity or a sub- (1) by striking ‘‘2-year’’ and inserting ‘‘6- the discretion of the Director, apply to the stantial pecuniary gain or other benefit to year’’; United States District Court for the District such party by reason of such violation, prac- (2) by striking ‘‘a director or executive of- of Columbia, or the United States district tice, or breach. ficer of an enterprise’’ and inserting ‘‘an en- court within the jurisdiction of which the ‘‘(4) MAXIMUM AMOUNTS OF PENALTIES FOR tity-affiliated party’’; headquarters of the regulated entity is lo- ANY VIOLATION DESCRIBED IN PARAGRAPH (3).— (3) by striking ‘‘director or officer’’ each cated, for the enforcement of any effective The maximum daily amount of any civil pen- place that term appears and inserting ‘‘enti- and outstanding notice or order issued under alty which may be assessed pursuant to ty-affiliated party’’; and this subtitle or subtitle B, or request that paragraph (3) for any violation, practice, or (4) by striking ‘‘enterprise.’’ and inserting the Attorney General of the United States breach described in paragraph (3) is— ‘‘regulated entity.’’. bring such an action. Such court shall have ‘‘(A) in the case of any entity-affiliated SEC. 1158. SUBPOENA AUTHORITY. party, an amount not to exceed $2,000,000; jurisdiction and power to order and require (a) IN GENERAL.—Section 1379B of the Fed- and compliance with such notice or order.’’; and eral Housing Enterprises Financial Safety ‘‘(B) in the case of any regulated entity, (2) in subsection (b), by striking ‘‘or 1376’’ and Soundness Act of 1992 (12 U.S.C. 4641) is $2,000,000.’’; and inserting ‘‘1313B, 1376, or 1377’’. amended— (3) in subsection (c)— (1) in subsection (a)— SEC. 1155. CIVIL MONEY PENALTIES. (A) by striking ‘‘enterprise’’ each place Section 1376 of the Federal Housing Enter- (A) in the matter preceding paragraph (1)— that term appears and inserting ‘‘regulated (i) by striking ‘‘administrative’’; prises Financial Safety and Soundness Act of entity’’; 1992 (12 U.S.C. 4636) is amended— (ii) by inserting ‘‘, examination, or inves- (B) by inserting ‘‘or entity-affiliated tigation’’ after ‘‘proceeding’’; (1) by striking subsection (a) and inserting party’’ before ‘‘in writing’’; and the following: (iii) by striking ‘‘subtitle’’ and inserting (C) by inserting ‘‘or entity-affiliated ‘‘title’’; and ‘‘(a) IN GENERAL.—The Director may im- party’’ before ‘‘has been given’’; pose a civil money penalty in accordance (iv) by inserting ‘‘or any designated rep- (4) in subsection (d)— resentative thereof, including any person with this section on any regulated entity or (A) by striking ‘‘or director’’ each place any entity-affiliated party. The Director designated to conduct any hearing under this such term appears and inserting ‘‘director, subtitle’’ after ‘‘Director’’; and shall not impose a civil penalty in accord- or entity-affiliated party’’; ance with this section on any regulated enti- (B) in paragraph (4), by striking ‘‘issued by (B) by striking ‘‘an enterprise’’ and insert- the Director’’; ty or any entity-affiliated party for any vio- ing ‘‘a regulated entity’’; lation that is addressed under section (2) in subsection (b), by inserting ‘‘or in (C) by striking ‘‘the enterprise’’ and insert- any territory or other place subject to the 1345(a).’’; ing ‘‘the regulated entity’’; (2) by striking subsection (b) and inserting jurisdiction of the United States’’ after (D) by striking ‘‘request the Attorney Gen- ‘‘State’’; the following: eral of the United States to’’; ‘‘(b) AMOUNT OF PENALTY.— (3) by striking subsection (c) and inserting (E) by inserting ‘‘, or the United States the following: ‘‘(1) FIRST TIER.—A regulated entity or en- district court within the jurisdiction of tity-affiliated party shall forfeit and pay a ‘‘(c) ENFORCEMENT.— which the headquarters of the regulated en- ‘‘(1) IN GENERAL.—The Director, or any civil penalty of not more than $10,000 for tity is located,’’ after ‘‘District of Colum- each day during which a violation continues, party to proceedings under this subtitle, bia’’; may apply to the United States District if such regulated entity or party— (F) by striking ‘‘, or may, under the direc- ‘‘(A) violates any provision of this title, Court for the District of Columbia, or the tion and control of the Attorney General of United States district court for the judicial the authorizing statutes, or any order, condi- the United States, bring such an action’’; tion, rule, or regulation under this title or district of the United States in any territory and in which such proceeding is being conducted, any authorizing statute; (G) by striking ‘‘and section 1374’’; and ‘‘(B) violates any final or temporary order or where the witness resides or carries on (5) in subsection (g), by striking ‘‘An enter- business, for enforcement of any subpoena or or notice issued pursuant to this title; prise’’ and inserting ‘‘A regulated entity’’. ‘‘(C) violates any condition imposed in subpoena duces tecum issued pursuant to SEC. 1156. CRIMINAL PENALTY. writing by the Director in connection with this section. (a) IN GENERAL.—Subtitle C of the Federal the grant of any application or other request ‘‘(2) POWER OF COURT.—The courts de- Housing Enterprises Financial Safety and scribed under paragraph (1) shall have the ju- by such regulated entity; or Soundness Act of 1992 (12 U.S.C. 4631 et seq.) ‘‘(D) violates any written agreement be- risdiction and power to order and require is amended by inserting after section 1377, as compliance with any subpoena issued under tween the regulated entity and the Director. added by this Act, the following: ‘‘(2) SECOND TIER.—Notwithstanding para- paragraph (1).’’; ‘‘SEC. 1378. CRIMINAL PENALTY. graph (1), a regulated entity or entity-affili- (4) in subsection (d), by inserting ‘‘enter- ‘‘Whoever, being subject to an order in ef- prise-affiliated party’’ before ‘‘may allow’’; ated party shall forfeit and pay a civil pen- fect under section 1377, without the prior alty of not more than $50,000 for each day and written approval of the Director, knowingly (5) by adding at the end the following: during which a violation, practice, or breach participates, directly or indirectly, in any continues, if— ‘‘(e) PENALTIES.—A person shall be guilty manner (including by engaging in an activity of a misdemeanor, and upon conviction, shall ‘‘(A) the regulated entity or entity-affili- specifically prohibited in such an order) in ated party, respectively— be subject to a fine of not more than $1,000 or the conduct of the affairs of any regulated to imprisonment for a term of not more than ‘‘(i) commits any violation described in entity shall, notwithstanding section 3571 of 1 year, or both, if that person willfully fails any subparagraph of paragraph (1); title 18, be fined not more than $1,000,000, im- or refuses, in disobedience of a subpoena ‘‘(ii) recklessly engages in an unsafe or un- prisoned for not more than 5 years, or issued under subsection (c), to— sound practice in conducting the affairs of both.’’. ‘‘(1) attend court; the regulated entity; or (b) TECHNICAL AND CONFORMING AMEND- ‘‘(iii) breaches any fiduciary duty; and MENTS.—The Federal Housing Enterprises Fi- ‘‘(2) testify in court; ‘‘(B) the violation, practice, or breach— nancial Safety and Soundness Act of 1992 (12 ‘‘(3) answer any lawful inquiry; or ‘‘(i) is part of a pattern of misconduct; U.S.C. 4501 et seq.) is amended— ‘‘(4) produce books, papers, correspondence, ‘‘(ii) causes or is likely to cause more than (1) in section 1379 (as so designated by this contracts, agreements, or such other records a minimal loss to the regulated entity; or Act)— as requested in the subpoena.’’. ‘‘(iii) results in pecuniary gain or other (A) by striking ‘‘an enterprise’’ and insert- Subtitle E—General Provisions benefit to such party. ing ‘‘a regulated entity’’; and SEC. 1161. CONFORMING AND TECHNICAL ‘‘(3) THIRD TIER.—Notwithstanding para- (B) by striking ‘‘the enterprise’’ and insert- AMENDMENTS. graphs (1) and (2), any regulated entity or en- ing ‘‘the regulated entity’’; (a) AMENDMENTS TO 1992 ACT.—The Federal tity-affiliated party shall forfeit and pay a (2) in section 1379A (as so designated by Housing Enterprises Financial Safety and civil penalty in an amount not to exceed the this Act), by striking ‘‘an enterprise’’ and in- Soundness Act of 1992 (12 U.S.C. 4501 et seq.), applicable maximum amount determined serting ‘‘a regulated entity’’; as amended by this Act, is amended—

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00101 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5872 CONGRESSIONAL RECORD — SENATE June 19, 2008 (1) in section 1315 (12 U.S.C. 4515)— (i) by striking ‘‘section 1316(c)’’ and insert- ‘‘(vii) Federal Housing Finance Agency.’’. (A) in subsection (a)— ing ‘‘section 306(c)’’; and SEC. 1162. PRESIDENTIALLY-APPOINTED DIREC- (i) by striking ‘‘(a) OFFICE PERSONNEL.— (ii) by striking ‘‘section 106’’ and inserting TORS OF ENTERPRISES. The’’ and inserting ‘‘(a) IN GENERAL.—Sub- ‘‘section 1316’’; and (a) FANNIE MAE.— ject to title III of the Federal Housing Fi- (C) in subsection (j)(2), by striking ‘‘of sub- (1) IN GENERAL.—Section 308(b) of the Fed- nance Regulatory Reform Act of 2008, the’’; stantially’’ and inserting ‘‘or substantially’’; eral National Mortgage Association Charter and and Act (12 U.S.C. 1723(b)) is amended— (ii) by striking ‘‘the Office’’ each place (3) in section 307 (12 U.S.C. 1456)— (A) in the first sentence, by striking that term appears and inserting ‘‘the Agen- (A) in subsection (e)— ‘‘eighteen persons, five of whom shall be ap- cy’’; (i) in paragraph (1), by striking ‘‘to the pointed annually by the President of the (B) in subsection (c), by striking ‘‘the Of- Secretary, in a form determined by the Sec- United States, and the remainder of whom’’ fice’’ and inserting ‘‘the Agency’’; retary’’ and inserting ‘‘to the Director of the and inserting ‘‘13 persons, or such other (C) in subsection (e), by striking ‘‘the Of- Federal Housing Finance Agency, in a form number that the Director determines appro- fice’’ and inserting ‘‘the Agency’’; determined by the Director’’; and priate, who’’; (D) by striking subsection (d) and redesig- (ii) in paragraph (2), by striking ‘‘to the (B) in the second sentence, by striking ‘‘ap- nating subsection (e) as subsection (d); and Secretary, in a form determined by the Sec- pointed by the President’’; (E) by striking subsection (f); retary’’ and inserting ‘‘to the Director of the (C) in the third sentence— (2) in section 1319A (12 U.S.C. 4520)— Federal Housing Finance Agency, in a form (i) by striking ‘‘appointed or’’; and (A) by striking ‘‘(a) IN GENERAL.—’’; and determined by the Director’’; and (ii) by striking ‘‘, except that any such ap- (B) by striking subsection (b); (B) in subsection (f)— pointed member may be removed from office (3) in section 1364(c) (12 U.S.C. 4614(c)), by (i) in paragraph (1), by striking ‘‘and the by the President for good cause’’; striking the last sentence; Secretary’’ and inserting ‘‘and the Director (D) in the fourth sentence, by striking (4) by striking section 1383 (12 U.S.C. 1451 of the Federal Housing Finance Agency’’; ‘‘elective’’; and note); (ii) in paragraph (2), by striking ‘‘the Sec- (E) by striking the fifth sentence. (5) in each of sections 1319D, 1319E, and retary’’ each place that term appears and in- (2) TRANSITIONAL PROVISION.—The amend- 1319F (12 U.S.C. 4523, 4524, 4525) by striking serting ‘‘the Director of the Federal Housing ments made by paragraph (1) shall not apply ‘‘the Office’’ each place that term appears Finance Agency’’; and to any appointed position of the board of di- and inserting ‘‘the Agency’’; and (iii) in paragraph (3)(B), by striking ‘‘Sec- rectors of the Federal National Mortgage As- (6) in each of sections 1319B and 1369(a)(3) retary’’ and inserting ‘‘Director of the Fed- sociation until the expiration of the annual (12 U.S.C. 4521, 4619(a)(3)), by striking ‘‘Com- eral Housing Finance Agency’’. term for such position during which the ef- mittee on Banking, Finance and Urban Af- (d) AMENDMENT TO TITLE 18, UNITED STATES fective date under section 1163 occurs. fairs’’ each place such term appears and in- CODE.—Section 1905 of title 18, United States (b) FREDDIE MAC.— serting ‘‘Committee on Financial Services’’. Code, is amended by striking ‘‘Office of Fed- (1) IN GENERAL.—Section 303(a)(2) of the (b) AMENDMENTS TO FANNIE MAE CHARTER eral Housing Enterprise Oversight’’ and in- Federal Home Loan Mortgage Corporation ACT.—The Federal National Mortgage Asso- serting ‘‘Federal Housing Finance Agency’’. Act (12 U.S.C. 1452(a)(2)) is amended— ciation Charter Act (12 U.S.C. 1716 et seq.) is (e) AMENDMENTS TO FLOOD DISASTER PRO- (A) in subparagraph (A)— amended— TECTION ACT OF 1973.—Section 102(f)(3)(A) of (i) in the first sentence, by striking ‘‘18 (1) in each of sections 303(c)(2) (12 U.S.C. the Flood Disaster Protection Act of 1973 (42 persons, 5 of whom shall be appointed annu- 1718(c)(2)), 309(d)(3)(B) (12 U.S.C. U.S.C. 4012a(f)(3)(A)) is amended by striking ally by the President of the United States 1723a(d)(3)(B)), and 309(k)(1) (12 U.S.C. ‘‘Director of the Office of Federal Housing and the remainder of whom’’ and inserting Enterprise Oversight of the Department of 1723a(k)(1)), by striking ‘‘Director of the Of- ‘‘13 persons, or such other number as the Di- Housing and Urban Development’’ and in- fice of Federal Housing Enterprise Oversight rector determines appropriate, who’’; and serting ‘‘Director of the Federal Housing Fi- of the Department of Housing and Urban De- (ii) in the second sentence, by striking ‘‘ap- nance Agency’’. velopment’’ each place that term appears, pointed by the President of the United (f) AMENDMENT TO DEPARTMENT OF HOUSING and inserting ‘‘Director of the Federal Hous- States’’; AND URBAN DEVELOPMENT ACT.—Section 5 of ing Finance Agency’’; and (B) in subparagraph (B)— the Department of Housing and Urban Devel- (i) by striking ‘‘such or’’; and (2) in section 309— opment Act (42 U.S.C. 3534) is amended by (A) in subsection (m) (12 U.S.C. 1723a(m))— (ii) by striking ‘‘, except that any ap- striking subsection (d). pointed member may be removed from office (i) in paragraph (1), by striking ‘‘to the (g) AMENDMENTS TO TITLE 5, UNITED STATES by the President for good cause’’; and Secretary, in a form determined by the Sec- CODE.—Title 5, United States Code, is (C) in subparagraph (C)— retary’’ and inserting ‘‘to the Director of the amended— (i) by striking the first sentence; and Federal Housing Finance Agency, in a form (1) in section 5313, by striking the item re- (ii) by striking ‘‘elective’’. determined by the Director’’; and lating to the Director of the Office of Federal (2) TRANSITIONAL PROVISION.—The amend- (ii) in paragraph (2), by striking ‘‘to the Housing Enterprise Oversight, Department ments made by paragraph (1) shall not apply Secretary, in a form determined by the Sec- of Housing and Urban Development and in- to any appointed position of the board of di- retary’’ and inserting ‘‘to the Director of the serting the following new item: rectors of the Federal Home Loan Mortgage Federal Housing Finance Agency, in a form ‘‘Director of the Federal Housing Finance Corporation until the expiration of the an- determined by the Director’’; Agency.’’; and nual term for such position during which the (B) in subsection (n) (12 U.S.C. 1723a(n))— (2) in section 3132(a)(1)— effective date under section 1163 occurs. (i) in paragraph (1), by striking ‘‘and the (A) in subparagraph (B), by striking ‘‘,, Secretary’’ and inserting ‘‘and the Director and’’ and inserting ‘‘, and’’; SEC. 1163. EFFECTIVE DATE. of the Federal Housing Finance Agency’’; (B) in subparagraph (D)— Except as otherwise specifically provided and (i) by striking ‘‘the Federal Housing Fi- in this title, this title and the amendments (ii) in paragraph (2), by striking ‘‘Sec- nance Board’’; made by this title shall take effect on, and retary’’ each place that term appears and in- (ii) by striking ‘‘the Office of Federal shall apply beginning on, the date of enact- serting ‘‘Director of the Federal Housing Fi- Housing Enterprise Oversight of the Depart- ment of this Act. nance Agency’’; and ment of Housing and Urban Development’’ TITLE II—FEDERAL HOME LOAN BANKS (C) in paragraph (3)(B), by striking ‘‘Sec- and inserting ‘‘the Federal Housing Finance SEC. 1201. RECOGNITION OF DISTINCTIONS BE- retary’’ and inserting ‘‘Director of the Fed- Agency’’; and TWEEN THE ENTERPRISES AND THE eral Housing Finance Agency’’. (iii) by striking ‘‘or or’’ at the end; FEDERAL HOME LOAN BANKS. (c) AMENDMENTS TO FREDDIE MAC CHARTER (C) in subparagraph (E), as added by sec- Section 1313 of the Federal Housing Enter- ACT.—The Federal Home Loan Mortgage tion 8(d)(1)(B)(iii) of Public Law 107-123, by prises Financial Safety and Soundness Act of Corporation Act (12 U.S.C. 1451 et seq.) is adding ‘‘or’’ at the end; and 1992 (12 U.S.C. 4513) is amended by adding at amended— (D) by redesignating subparagraph (E), as the end the following: (1) in each of sections 303(b)(2) (12 U.S.C. added by section 10702(c)(1)(C) of Public Law ‘‘(f) RECOGNITION OF DISTINCTIONS BETWEEN 1452(b)(2)), 303(h)(2) (12 U.S.C. 1452(h)(2)), and 107-171, as subparagraph (F). THE ENTERPRISES AND THE FEDERAL HOME section 307(c)(1) (12 U.S.C. 1456(c)(1)), by (h) AMENDMENT TO SARBANES-OXLEY ACT.— LOAN BANKS.—Prior to promulgating any striking ‘‘Director of the Office of Federal Section 105(b)(5)(B)(ii)(II) of the Sarbanes- regulation or taking any other formal or in- Housing Enterprise Oversight of the Depart- Oxley Act of 2002 (15 U.S.C. formal agency action of general applicability ment of Housing and Urban Development’’ 7215(b)(5)(B)(ii)(II)) is amended by inserting relating to the Federal Home Loan Banks, each place that term appears, and inserting ‘‘and the Director of the Federal Housing Fi- including the issuance of an advisory docu- ‘‘Director of the Federal Housing Finance nance Agency,’’ after ‘‘Commission,’’. ment or examination guidance, the Director Agency’’; (i) AMENDMENT TO FEDERAL DEPOSIT INSUR- shall consider the differences between the (2) in section 306 (12 U.S.C. 1455)— ANCE ACT.—Section 11(t)(2)(A) of the Federal Federal Home Loan Banks and the enter- (A) in subsection (c)(2), by inserting ‘‘the’’ Deposit Insurance Act (12 U.S.C. prises with respect to— after ‘‘Secretary of’’; 1821(t)(2)(A)) is amended by adding at the end ‘‘(1) the Banks’— (B) in subsection (i)— the following: ‘‘(A) cooperative ownership structure;

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00102 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5873

‘‘(B) the mission of providing liquidity to ‘‘(2) INDEPENDENT DIRECTORSHIPS.— to the date of enactment of this subsection members; ‘‘(A) ELECTIONS.—Each independent direc- may continue to serve as a member of that ‘‘(C) affordable housing and community de- tor— board of directors for the remainder of the velopment mission; ‘‘(i) shall be elected by the members enti- existing term of service.’’. ‘‘(D) capital structure; and tled to vote, from among eligible persons SEC. 1203. DEFINITIONS. ‘‘(E) joint and several liability; and nominated, after consultation with the Advi- Section 2 of the Federal Home Loan Bank ‘‘(2) any other differences that the Director sory Council of the Bank, by the board of di- Act (12 U.S.C. 1422) is amended— considers appropriate.’’. rectors of the Bank; and (1) by striking paragraphs (1), (10), and (11); SEC. 1202. DIRECTORS. ‘‘(ii) shall be elected by a plurality of the (2) by redesignating paragraphs (2) through Section 7 of the Federal Home Loan Bank votes of the members of the Bank at large, (9) as paragraphs (1) through (8), respec- Act (12 U.S.C. 1427) is amended— with each member having the number of tively; (1) by striking subsection (a) and inserting votes for each such directorship as it has (3) by redesignating paragraphs (12) and the following: under paragraph (1) in an election to fill (13) as paragraphs (9) and (10), respectively; member directorships. ‘‘(a) NUMBER; ELECTION; QUALIFICATIONS; and ‘‘(B) CRITERIA.—Nominees shall meet all CONFLICTS OF INTEREST.— (4) by adding at the end the following: applicable requirements prescribed in this ‘‘(1) IN GENERAL.—Subject to paragraphs (2) ‘‘(11) DIRECTOR.—The term ‘Director’ section. through (4), the management of each Federal means the Director of the Federal Housing ‘‘(C) NOMINATION AND ELECTION PROCE- Home Loan Bank shall be vested in a board Finance Agency. DURES.—Procedures for nomination and elec- of 13 directors, or such other number as the ‘‘(12) AGENCY.—The term ‘Agency’ means tion of independent directors shall be pre- Director determines appropriate. the Federal Housing Finance Agency, estab- scribed by the bylaws of each Federal Home ‘‘(2) BOARD MAKEUP.—The board of direc- lished under section 1311 of the Federal Loan Bank, in a manner consistent with the tors of each Bank shall be comprised of— Housing Enterprises Financial Safety and rules and regulations of the Agency.’’; ‘‘(A) member directors, who shall comprise Soundness Act of 1992.’’. (4) in subsection (c)— at least the majority of the members of the SEC. 1204. AGENCY OVERSIGHT OF FEDERAL (A) by striking ‘‘elective’’ each place that board of directors; and HOME LOAN BANKS. term appears and inserting ‘‘member’’, ex- The Federal Home Loan Bank Act (12 ‘‘(B) independent directors, who shall com- cept— 2 U.S.C. 1421 et seq.), other than in provisions prise not fewer than ⁄5 of the members of the (i) in the second sentence, the second place board of directors. of that Act added or amended otherwise by that term appears; and this Act, is amended— ‘‘(3) SELECTION CRITERIA.— (ii) each place that term appears in the (1) by striking sections 2A and 2B (12 U.S.C. ‘‘(A) IN GENERAL.—Each member of the fifth sentence; and 1422a, 1422b); board of directors shall be— (B) in the second sentence— (2) by striking section 18 (12 U.S.C. 1438) ‘‘(i) elected by plurality vote of the mem- (i) by inserting ‘‘(A) except as provided in and inserting the following: bers, in accordance with procedures estab- clause (B) of this sentence,’’ before ‘‘if at any ‘‘SEC. 18. ADMINISTRATIVE PROVISIONS. lished under this section; and time’’; and ‘‘(ii) a citizen of the United States. ‘‘(a) ACQUISITION AUTHORITY.—The Director (ii) by inserting before the period at the of the Office of Thrift Supervision, utilizing ‘‘(B) INDEPENDENT DIRECTOR CRITERIA.— end the following: ‘‘, and (B) clause (A) of the services of the Administrator of General ‘‘(i) IN GENERAL.—Each independent direc- this sentence shall not apply to the director- Services (hereinafter referred to as the ‘Ad- tor that is not a public interest director ships of any Federal Home Loan Bank result- ministrator’), and subject to any limitation under clause (ii) shall have demonstrated ing from the merger of any 2 or more such hereon which may hereafter be imposed in knowledge of, or experience in, financial Banks’’; appropriation Acts, is hereby authorized— management, auditing and accounting, risk (5) in subsection (d)— ‘‘(1) to acquire, in the name of the United management practices, derivatives, project (A) in the first sentence— States, real property in the District of Co- development, or organizational manage- (i) by striking ‘‘, whether elected or ap- lumbia, for the purposes set forth in this sec- ment, or such other knowledge or expertise pointed,’’; and tion; as the Director may provide by regulation. (ii) by striking ‘‘3 years’’ and inserting ‘‘4 ‘‘(2) to construct, develop, furnish, and ‘‘(ii) PUBLIC INTEREST.—Not fewer than 2 of years’’; equip such buildings thereon and such facili- the independent directors shall have more (B) in the second sentence— ties as in its judgment may be appropriate to than 4 years of experience in representing (i) by striking ‘‘Federal Home Loan Bank provide, to such extent as the Director of the consumer or community interests on bank- System Modernization Act of 1999’’ and in- Office of Thrift Supervision may deem advis- ing services, credit needs, housing, or finan- serting ‘‘Federal Housing Finance Regu- able, suitable and adequate quarters and fa- cial consumer protections. latory Reform Act of 2008’’; cilities for the Director of the Office of ‘‘(iii) CONFLICTS OF INTEREST.—No inde- 1 1 (ii) by striking ‘‘ ⁄3’’ and inserting ‘‘ ⁄4’’; and Thrift Supervision and the agencies under its pendent director may, during the term of (iii) by striking ‘‘or appointed’’; and administration or supervision; service on the board of directors, serve as an (C) in the third sentence— ‘‘(3) to enlarge, remodel, or reconstruct officer of any Federal Home Loan Bank or as (i) by striking ‘‘an elective’’ each place any of the same; and a director, officer, or employee of any mem- that term appears and inserting ‘‘a’’; and ‘‘(4) to make or enter into contracts for ber of a Bank, or of any person that receives (ii) by striking ‘‘in any elective director- any of the foregoing. advances from a Bank. ship or elective directorships’’; ‘‘(b) ADVANCES.—The Director of the Office ‘‘(4) DEFINITIONS.—For purposes of this sec- (6) in subsection (f)— of Thrift Supervision may require of the re- tion, the following definitions shall apply: (A) by striking paragraph (2); spective banks, and they shall make to the ‘‘(A) INDEPENDENT DIRECTOR.—The terms (B) by striking ‘‘appointed or’’ each place Director of the Office of Thrift Supervision, ‘independent director’ and ‘independent di- that term appears; and such advances of funds for the purposes set rectorship’ mean a member of the board of (C) in paragraph (3)— out in subsection (a) as in the sole judgment directors of a Federal Home Loan Bank who (i) by striking ‘‘(3) ELECTED BANK DIREC- of the Director of the Office of Thrift Super- is a bona fide resident of the district in TORS.—’’ and inserting ‘‘(2) ELECTION PROC- vision may from time to time be advisable. which the Federal Home Loan Bank is lo- ESS.—’’; and Such advances shall be apportioned by the cated, or the directorship held by such a per- (ii) by striking ‘‘elective’’ each place that Director of the Office of Thrift Supervision son, respectively. term appears; among the banks in proportion to the total ‘‘(B) MEMBER DIRECTOR.—The terms ‘mem- (7) in subsection (i)— assets of the respective banks, determined in ber director’ and ‘member directorship’ (A) in paragraph (1), by striking ‘‘Subject such manner and as of such times as the Di- mean a member of the board of directors of to paragraph (2), each’’ and inserting rector of the Office of Thrift Supervision a Federal Home Loan Bank who is an officer ‘‘Each’’; and may prescribe. Each such advance shall bear or director of a member institution that is (B) by striking paragraph (2) and inserting interest at the rate of 4 1⁄2 per centum per located in the district in which the Federal the following: annum from the date of the advance and Home Loan Bank is located, or the director- ‘‘(2) ANNUAL REPORT.—The Director shall shall be repaid by the Director of the Office ship held by such a person, respectively.’’; include, in the annual report submitted to of Thrift Supervision in such installments (2) by striking ‘‘elective’’ each place that the Congress pursuant to section 1319B of the and over such period, not longer than twen- term appears, other than in subsections (d), Federal Housing Enterprises Financial Safe- ty-five years from the making of the ad- (e), and (f), and inserting ‘‘member’’; ty and Soundness Act of 1992, information re- vance, as the Director of the Office of Thrift (3) in subsection (b)— garding the compensation and expenses paid Supervision may determine. Payments of in- (A) by striking the subsection heading and by the Federal Home Loan Banks to the di- terest and principal upon such advances all that follows through ‘‘Each elective di- rectors on the boards of directors of the shall be made from receipts of the Director rectorship’’ and inserting the following: Banks.’’; and of the Office of Thrift Supervision or from ‘‘(b) DIRECTORSHIPS.— (8) by adding at the end the following: other sources which may from time to time ‘‘(1) MEMBER DIRECTORSHIPS.—Each mem- ‘‘(l) TRANSITION RULE.—Any member of the be available to the Director of the Office of ber directorship’’; and board of directors of a Bank elected or ap- Thrift Supervision. The obligation of the Di- (B) by adding at the end the following: pointed in accordance with this section prior rector of the Office of Thrift Supervision to

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00103 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5874 CONGRESSIONAL RECORD — SENATE June 19, 2008

make any such payment shall not be re- tion, and section 306 of the Act of July 30, ‘‘(b) CONSIDERATIONS.—In establishing the garded as an obligation of the United States. 1947 (61 Stat. 584), or any other provision of goals required by subsection (a), the Director To such extent as the Director of the Office law relating to the construction, alteration, shall consider the unique mission and owner- of Thrift Supervision may prescribe any such repair, or furnishing of public or other build- ship structure of the Federal Home Loan obligation shall be regarded as a legal in- ings or structures or the obtaining of sites Banks. vestment for the purposes of subsections (g) therefor, but any person or body in whom ‘‘(c) TRANSITION PERIOD.—To facilitate an and (h) of section 11 and for the purposes of any such function is vested may provide for orderly transition, the Director shall estab- section 16. delegation or redelegation of the exercise of lish interim target goals for purposes of this ‘‘(c) PLANS AND DESIGNS.—The plans and such function. section for each of the 2 calendar years fol- designs for such buildings and facilities and ‘‘(g) LIMITATION.—No obligation shall be in- lowing the date of enactment of this section. for any such enlargement, remodeling, or re- curred and no expenditure, except in liquida- ‘‘(d) MONITORING AND ENFORCEMENT OF construction shall, to such extent as the tion of obligation, shall be made pursuant to GOALS.—The requirements of section 1336 of chairperson of the Director of the Office of paragraphs (1) and (2) of subsection (a), if the the Federal Housing Enterprises Safety and Thrift Supervision may request, be subject total amount of all obligations incurred pur- Soundness Act of 1992, shall apply to this to the approval of the Director. suant thereto would thereupon exceed section, in the same manner and to the same ‘‘(d) CUSTODY, MANAGEMENT AND CON- $13,200,000, or such greater amount as may be extent as that section applies to the Federal TROL.—Upon the making of arrangements provided in an appropriations Act or other housing enterprises. mutually agreeable to the Director of the Of- law.’’. ‘‘(e) ANNUAL REPORT.—The Director shall fice of Thrift Supervision and the Adminis- (3) in section 11 (12 U.S.C. 1431)— annually report to Congress on the perform- trator, which arrangements may be modified (A) in subsection (b)— ance of the Banks in meeting the goals es- from time to time by mutual agreement be- (i) in the first sentence— tablished under this section.’’. tween them and may include but shall not be (I) by striking ‘‘The Board’’ and inserting SEC. 1206. COMMUNITY DEVELOPMENT FINAN- limited to the making of payments by the ‘‘The Office of Finance, as agent for the CIAL INSTITUTIONS. Director of the Office of Thrift Supervision Banks,’’; and Section 4(a)(1) of the Federal Home Loan and such agencies to the Administrator and (II) by striking ‘‘the Board’’ and inserting Bank Act (12 U.S.C. 1424(a)(1)) is amended— by the Administrator to the Director of the ‘‘such Office’’; and (1) by inserting after ‘‘savings bank,’’ the Office of Thrift Supervision, the custody, (ii) in the second and fourth sentences, by following: ‘‘community development finan- management, and control of such buildings striking ‘‘the Board’’ each place such term cial institution,’’; and and facilities and of such real property shall appears and inserting ‘‘the Office of Fi- (2) in subparagraph (B), by inserting after be vested in the Administrator in accordance nance’’; ‘‘United States,’’ the following: ‘‘or, in the therewith. Until the making of such arrange- (B) in subsection (c)— case of a community development financial ments, such custody, management, and con- (i) by striking ‘‘the Board’’ the first place institution, is certified as a community de- trol, including the assignment and allotment such term appears and inserting ‘‘the Office velopment financial institution under the and the reassignment and reallotment of of Finance, as agent for the Banks,’’; and Community Development Banking and Fi- building and other space, shall be vested in (ii) by striking ‘‘the Board’’ the second nancial Institutions Act of 1994.’’. the Director of the Office of Thrift Super- place such term appears and inserting ‘‘such SEC. 1207. SHARING OF INFORMATION AMONG vision. Office’’; and FEDERAL HOME LOAN BANKS. ‘‘(e) PROCEEDS.—Any proceeds (including (C) in subsection (f)— The Federal Home Loan Bank Act is advances) received by the Director of the Of- (i) by striking the 2 commas after ‘‘per- amended by inserting after section 20 (12 fice of Thrift Supervision in connection with mit’’ and inserting ‘‘or’’; and U.S.C. 1440) the following new section: this subsection, and any proceeds from the (ii) by striking the comma after ‘‘require’’; ‘‘SEC. 20A. SHARING OF INFORMATION AMONG sale or other disposition of real or other (4) in section 6 (12 U.S.C. 1426)— FEDERAL HOME LOAN BANKS. property acquired by the Director of the Of- (A) in subsection (b)(1), in the matter pre- ‘‘(a) INFORMATION ON FINANCIAL CONDI- fice of Thrift Supervision under this section, ceding subparagraph (A), by striking ‘‘Fi- TION.—In order to enable each Federal Home shall be considered as receipts of the Direc- nance Board approval’’ and inserting ‘‘ap- Loan Bank to evaluate the financial condi- tor of the Office of Thrift Supervision, and proval by the Director’’; and tion of one or more of the other Federal obligations and expenditures of the Director (B) in each of subsections (c)(4)(B) and Home Loan Banks individually and the Fed- of the Office of Thrift Supervision and such (d)(2), by striking ‘‘Finance Board regula- eral Home Loan Bank System (including any agencies in connection with this section tions’’ each place that term appears and in- risks associated with the issuance or repay- shall not be considered as administrative ex- serting ‘‘regulations of the Director’’; ment of consolidated Federal Home Loan penses. As used in this section, the term (5) in section 10(b) (12 U.S.C. 1430(b))— Bank bonds and debentures or other bor- ‘property’ shall include interests in property. (A) in the subsection heading, by striking rowings and the joint and several liabilities ‘‘(f) BUDGET PROGRAM.— ‘‘FORMAL BOARD RESOLUTION’’ and inserting of the Banks incurred due to such bor- ‘‘(1) IN GENERAL.—With respect to its func- ‘‘APPROVAL OF DIRECTOR’’; and rowings), as well as to comply with any of its tions under this section, the Director of the (B) by striking ‘‘by formal resolution’’; obligations under the Securities Exchange Office of Thrift Supervision shall— (6) in section 21(b)(5) (12 U.S.C. 1441(b)(5)), Act of 1934 (15 U.S.C. 78a et seq.), the Direc- ‘‘(A) annually prepare and submit a budget by striking ‘‘Chairperson of the Federal tor shall make available to the Banks such program as provided in title I of the Govern- Housing Finance Board’’ and inserting ‘‘Di- reports, records, or other information as ment Corporation Control Act with regard to rector’’; may be available, relating to the condition wholly owned Government corporations, and (7) in section 15 (12 U.S.C. 1435), by insert- of any Federal Home Loan Bank. for purposes of this paragraph, the terms ing ‘‘or the Director’’ after ‘‘the Board’’; ‘‘(b) SHARING OF INFORMATION.— ‘wholly owned Government corporations’ and (8) by striking ‘‘the Board’’ each place that ‘‘(1) IN GENERAL.—The Director shall pro- ‘Government corporations’, wherever used in term appears and inserting ‘‘the Director’’; mulgate regulations to facilitate the sharing such title, shall include the Director of the (9) by striking ‘‘The Board’’ each place of information made available under sub- Office of Thrift Supervision; and that term appears and inserting ‘‘The Direc- section (a) directly among the Federal Home ‘‘(B) maintain an integral set of accounts tor’’; Loan Banks. which shall be audited by the General Ac- (10) by striking ‘‘the Finance Board’’ each ‘‘(2) LIMITATION.—Notwithstanding para- counting Office in accordance with the prin- place that term appears and inserting ‘‘the graph (1), a Federal Home Loan Bank re- ciples and procedures applicable to commer- Director’’; sponding to a request from another Bank or cial corporate transactions, as provided in (11) by striking ‘‘The Finance Board’’ each from the Director for information pursuant such title, and no other settlement or adjust- place that term appears and inserting ‘‘The to this section may request that the Director ment shall be required with respect to trans- Director’’; and determine that such information is propri- actions under this section or with respect to (12) by striking ‘‘Federal Housing Finance etary and that the public interest requires claims, demands, or accounts by or against Board’’ each place that term appears and in- that such information not be shared. any person arising thereunder. serting ‘‘Director’’. ‘‘(c) LIMITATION.—Nothing in this section ‘‘(2) MISCELLANEOUS PROVISIONS.—The first SEC. 1205. HOUSING GOALS. shall affect the obligations of any Federal budget program shall be for the first full fis- The Federal Home Loan Bank Act (12 Home Loan Bank under the Securities Ex- cal year beginning on or after the date of en- U.S.C. 1421 et seq.) is amended by inserting change Act of 1934 (15 U.S.C. 78a et seq.) or actment of this subsection. Except as other- after section 10b the following new section: the regulations issued by the Securities and wise provided in this section or by the Direc- ‘‘SEC. 10C. HOUSING GOALS. Exchange Commission thereunder.’’. tor of the Office of Thrift Supervision, the ‘‘(a) IN GENERAL.—The Director shall es- SEC. 1208. EXCLUSION FROM CERTAIN REQUIRE- provisions of this section and the functions tablish housing goals with respect to the MENTS. thereby or thereunder subsisting shall be ap- purchase of mortgages, if any, by the Federal (a) IN GENERAL.—The Federal Home Loan plicable and exercisable notwithstanding and Home Loan Banks. Such goals shall be con- Banks shall be exempt from compliance without regard to the Act of June 20, 1938 sistent with the goals established under sec- with— (D.C. Code, secs. 5–413—5–428), except that tions 1331 through 1334 of the Federal Hous- (1) sections 13(e), 14(a), and 14(c) of the Se- the proviso of section 16 thereof shall apply ing Enterprises Financial Safety and Sound- curities Exchange Act of 1934, and related to any building constructed under this sec- ness Act of 1992. Commission regulations;

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00104 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5875

(2) section 15 of the Securities Exchange (A) the accounting treatment with respect ‘‘(C) REPORTS.—The Director shall annu- Act of 1934, and related Commission regula- to the payment to the Resolution Funding ally report to the Committee on Banking, tions, with respect to transactions in the Corporation; Housing, and Urban Affairs of the Senate and capital stock of a Federal Home Loan Bank; (B) the role of the combined financial the Committee on Financial Services of the (3) section 17A of the Securities Exchange statements of the Federal Home Loan Banks; House of Representatives on the collateral Act of 1934, and related Commission regula- (C) the accounting classification of re- pledged to the Banks, including an analysis tions, with respect to the transfer of the se- deemable capital stock; and of collateral by type and by Bank district.’’; curities of a Federal Home Loan Bank; and (D) the accounting treatment related to and (4) the Trust Indenture Act of 1939. the joint and several nature of the obliga- (B) by adding at the end the following: (b) MEMBER EXEMPTION.—The members of tions of the Banks. ‘‘(D) SUBMISSION TO CONGRESS.—The Direc- the Federal Home Loan Bank System shall (g) DEFINITIONS.—As used in this section— tor shall submit the reports under subpara- be exempt from compliance with sections (1) the terms ‘‘Bank’’, ‘‘Federal Home Loan graphs (A) and (C) to the Committee on 13(d), 13(f), 13(g), 14(d), and 16 of the Securi- Bank’’, ‘‘member’’, and ‘‘Federal Home Loan Banking, Housing, and Urban Affairs of the ties Exchange Act of 1934, and related Com- Bank System’’ have the same meanings as in Senate and the Committee on Financial mission regulations, with respect to owner- section 2 of the Federal Home Loan Bank Services of the House of Representatives, not ship of or transactions in the capital stock of Act (12 U.S.C. 1422); later than 180 days after the date of enact- the Federal Home Loan Banks by such mem- (2) the term ‘‘Commission’’ means the Se- ment of the Federal Housing Finance Regu- bers. curities and Exchange Commission; and latory Reform Act of 2008.’’; and (c) EXEMPTED AND GOVERNMENT SECURI- (3) the term ‘‘securities laws’’ has the same (2) by adding at the end the following: TIES.— meaning as in section 3(a)(47) of the Securi- ‘‘(k) PUBLIC USE DATABASE.— (1) CAPITAL STOCK.—The capital stock ties Exchange Act of 1934 (15 U.S.C. ‘‘(1) DATA.—Each Federal Home Loan Bank issued by each of the Federal Home Loan 78c(a)(47)). shall provide to the Director, in a form de- Banks under section 6 of the Federal Home SEC. 1209. VOLUNTARY MERGERS. termined by the Director, census tract level Loan Bank Act are— Section 26 of the Federal Home Loan Bank data relating to mortgages purchased, if any, (A) exempted securities, within the mean- Act (12 U.S.C. 1446) is amended— including— ing of section 3(a)(2) of the Securities Act of (1) by striking ‘‘Whenever’’ and inserting ‘‘(A) data consistent with that reported 1933; and ‘‘(a) IN GENERAL.—Whenever’’; and under section 1323 of the Federal Housing (B) exempted securities, within the mean- (2) by adding at the end the following: Enterprises Financial Safety and Soundness ing of section 3(a)(12)(A) of the Securities ‘‘(b) VOLUNTARY MERGERS AUTHORIZED.— Act of 1992; Exchange Act of 1934, except to the extent ‘‘(1) IN GENERAL.—Any Federal Home Loan ‘‘(B) data elements required to be reported provided in section 38 of that Act. Bank may, with the approval of the Director under the Home Mortgage Disclosure Act of (2) OTHER OBLIGATIONS.—The debentures, and of the boards of directors of the Banks 1975; and bonds, and other obligations issued under involved, merge with another Bank. ‘‘(C) any other data elements that the Di- section 11 of the Federal Home Loan Bank ‘‘(2) REGULATIONS REQUIRED.—The Director rector considers appropriate. Act (12 U.S.C. 1431) are— shall promulgate regulations establishing ‘‘(2) PUBLIC USE DATABASE.— (A) exempted securities, within the mean- the conditions and procedures for the consid- ‘‘(A) IN GENERAL.—The Director shall make ing of section 3(a)(2) of the Securities Act of eration and approval of any voluntary merg- available to the public, in a form that is use- 1933; er described in paragraph (1), including the ful to the public (including forms accessible (B) government securities, within the procedures for Bank member approval.’’. electronically), and to the extent prac- meaning of section 3(a)(42) of the Securities SEC. 1210. AUTHORITY TO REDUCE DISTRICTS. ticable, the data provided to the Director Exchange Act of 1934; and Section 3 of the Federal Home Loan Bank under paragraph (1). (C) government securities, within the Act (12 U.S.C. 1423) is amended— ‘‘(B) PROPRIETARY INFORMATION.—Not with- meaning of section 2(a)(16) of the Investment (1) by striking ‘‘As soon’’ and inserting standing subparagraph (A), the Director may Company Act of 1940. ‘‘(a) IN GENERAL.—As soon’’; and not provide public access to, or disclose to (3) BROKERS AND DEALERS.—A person (other (2) by adding at the end the following: the public, any information required to be than a Federal Home Loan Bank effecting ‘‘(b) AUTHORITY TO REDUCE DISTRICTS.— submitted under this subsection that the Di- transactions for members of the Federal Notwithstanding subsection (a), the number rector determines is proprietary or that Home Loan Bank System) that effects trans- of districts may be reduced to a number less would provide personally identifiable infor- actions in the capital stock or other obliga- than 8— mation and that is not otherwise publicly ac- tions of a Federal Home Loan Bank, for the ‘‘(1) pursuant to a voluntary merger be- cessible through other forms, unless the Di- account of others or for that person’s own tween Banks, as approved pursuant to sec- rector determines that it is in the public in- account, as applicable, is a broker or dealer, tion 26(b); or terest to provide such information.’’. as those terms are defined in paragraphs (4) ‘‘(2) pursuant to a decision by the Director SEC. 1213. SEMIANNUAL REPORTS. and (5), respectively, of section 3(a) of the to liquidate a Bank pursuant to section 1367 Section 21B of the Federal Home Loan Securities Exchange Act of 1934, but is ex- of the Federal Housing Enterprises Financial Bank Act is amended in subsection (f)(2)(C), cluded from the definition of— Safety and Soundness Act of 1992.’’. by adding at the end the following: ‘‘(v) SEMIANNUAL REPORTS.—The Director (A) the term ‘‘government securities SEC. 1211. COMMUNITY FINANCIAL INSTITUTION broker’’ under section 3(a)(43) of the Securi- MEMBERS. shall report semiannually to the Committee ties Exchange Act of 1934; and (a) TOTAL ASSET REQUIREMENT.—Paragraph on Banking, Housing, and Urban Affairs of (B) the term ‘‘government securities deal- (10) of section 2 of the Federal Home Loan the Senate and the Committee on Financial er’’ under section 3(a)(44) of the Securities Bank Act (12 U.S.C. 1422(10)), as so redesig- Services of the House of Representatives on Exchange Act of 1934. nated by section 201(3) of this Act, is amend- the projected date for the completion of con- (d) EXEMPTION FROM REPORTING REQUIRE- ed by striking ‘‘$500,000,000’’ each place such tributions required by this section.’’. MENTS.—The Federal Home Loan Banks shall term appears and inserting ‘‘$1,000,000,000’’. SEC. 1214. LIQUIDATION OR REORGANIZATION OF A FEDERAL HOME LOAN BANK. be exempt from periodic reporting require- (b) USE OF ADVANCES FOR COMMUNITY DE- Section 26 of the Federal Home Loan Bank ments under the securities laws pertaining VELOPMENT ACTIVITIES.—Section 10(a) of the to the disclosure of— Federal Home Loan Bank Act (12 U.S.C. Act (12 U.S.C. 1446) is amended by adding at (1) related party transactions that occur in 1430(a)) is amended— the end the following: ‘‘At least 30 days prior to liquidating or reorganizing any Bank the ordinary course of the business of the (1) in paragraph (2)(B)— under this section, the Director shall notify Banks with members; and (A) by striking ‘‘and’’; and the Bank of its determination and the facts (2) the unregistered sales of equity securi- (B) by inserting ‘‘, and community develop- and circumstances upon which such deter- ties. ment activities’’ before the period at the mination is based. The Bank may contest (e) TENDER OFFERS.—Commission rules re- end; that determination in a hearing before the lating to tender offers shall not apply in con- (2) in paragraph (3)(E), by inserting ‘‘or Director, in which all issues shall be deter- nection with transactions in the capital community development activities’’ after mined on the record pursuant to section 554 stock of the Federal Home Loan Banks. ‘‘agriculture,’’; and of title 5, United States Code.’’. (3) in paragraph (6)— (f) REGULATIONS.— SEC. 1215. STUDY AND REPORT TO CONGRESS ON (1) IN GENERAL.—The Commission shall (A) by striking ‘‘and’’; and SECURITIZATION OF ACQUIRED promulgate such rules and regulations as (B) by inserting ‘‘, and ‘community devel- MEMBER ASSETS. may be necessary or appropriate in the pub- opment activities’’’ before ‘‘shall’’. (a) STUDY.—The Director shall conduct a lic interest or in furtherance of this section SEC. 1212. PUBLIC USE DATA BASE; REPORTS TO study on securitization of home mortgage and the exemptions provided in this section. CONGRESS. loans purchased or to be purchased from (2) CONSIDERATIONS.—In issuing regulations Section 10 of the Federal Home Loan Bank member financial institutions under the Ac- under this section, the Commission shall Act (12 U.S.C. 1430) is amended— quired Member Assets programs. In con- consider the distinctive characteristics of (1) in subsection (j)(12)— ducting the study, the Director shall estab- the Federal Home Loan Banks when evalu- (A) by striking subparagraph (C) and in- lish a process for the formal submission of ating— serting the following: comments.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00105 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5876 CONGRESSIONAL RECORD — SENATE June 19, 2008

(b) ELEMENTS.—The study shall encom- ‘‘(3) the Federal Housing Finance Agen- the transfer of any such employee under sec- pass— cy;’’; tion 1303. (1) the benefits and risks associated with (2) in subsection (b), by striking ‘‘Federal (d) USE OF PROPERTY AND SERVICES.— securitization of Acquired Member Assets; National Mortgage Association’’ and insert- (1) PROPERTY.—The Director may use the (2) the potential impact of securitization ing ‘‘Federal Home Loan Banks, the Federal property of the Office of Federal Housing En- upon liquidity in the mortgage and broader National Mortgage Association,’’; and terprise Oversight to perform functions credit markets; (3) in subsection (c), by striking ‘‘Finance which have been transferred to the Director (3) the ability of the Federal Home Loan Board’’ and inserting ‘‘Finance Agency’’. for such time as is reasonable to facilitate Bank or Banks in question to manage the SEC. 1217. STUDY ON FEDERAL HOME LOAN BANK the orderly transfer of functions transferred risks associated with such a program; ADVANCES. under any other provision of this Act or any (4) the impact of such a program on the ex- (a) IN GENERAL.—Not later than 1 year amendment made by this Act to any other isting activities of the Banks, including after the date of enactment of this Act, the provision of law. their mortgage portfolios and advances; and Director shall conduct a study and submit a (2) AGENCY SERVICES.—Any agency, depart- (5) the joint and several liability of the report to the Committee on Banking, Hous- ment, or other instrumentality of the United Banks and the cooperative structure of the ing, and Urban Affairs of the Senate and the States, and any successor to any such agen- Federal Home Loan Bank System. Committee on Financial Services of the cy, department, or instrumentality, which (c) CONSULTATIONS.—In conducting the House or Representatives on the extent to was providing supporting services to the Of- study under this section, the Director shall which loans and securities used as collateral fice of Federal Housing Enterprise Oversight consult with the Federal Home Loan Banks, to support Federal Home Loan Bank ad- before the expiration of the period under sub- the Banks’ fiscal agent, representatives of vances are consistent with the interagency section (a) in connection with functions that the mortgage lending industry, practitioners guidance on nontraditional mortgage prod- are transferred to the Director shall— in the structured finance field, and other ex- ucts. (A) continue to provide such services, on a perts as needed. (b) REQUIRED CONTENT.—The study re- reimbursable basis, until the transfer of such (d) REPORT.—Not later than 1 year after quired under subsection (a) shall— functions is complete; and the date of enactment of this Act, the Direc- (1) consider and recommend any additional (B) consult with any such agency to co- tor shall submit a report to Congress on the regulations, guidance, advisory bulletins, or ordinate and facilitate a prompt and reason- results of the study conducted under sub- other administrative actions necessary to able transition. section (a), including policy recommenda- ensure that the Federal Home Loan Banks (e) CONTINUATION OF SERVICES.—The Direc- tor may use the services of employees and tions based on the analysis of the Director of are not supporting loans with predatory other personnel of the Office of Federal the feasibility of mortgage-backed securities characteristics; and Housing Enterprise Oversight, on a reim- issuance by a Federal Home Loan Bank or (2) include an opportunity for the public to bursable basis, to perform functions which Banks and the risks and benefits associated comment on any recommendations made have been transferred to the Director for with such program or programs. under paragraph (1). (e) DEFINITIONS.—As used in this section, such time as is reasonable to facilitate the the terms ‘‘member’’, ‘‘Bank’’, and ‘‘Federal SEC. 1218. FEDERAL HOME LOAN BANK REFI- orderly transfer of functions pursuant to any NANCING AUTHORITY FOR CERTAIN other provision of this Act or any amend- Home Loan Bank’’ have the same meanings RESIDENTIAL MORTGAGE LOANS. ment made by this Act to any other provi- as in section 2 of the Federal Home Loan Section 10(j)(2) of the Federal Home Loan sion of law. Bank Act (12 U.S.C. 1422). Bank Act (12 U.S.C. 1430(j)(2)) is amended— SEC. 1216. TECHNICAL AND CONFORMING (f) SAVINGS PROVISIONS.— (1) in subparagraph (A), by striking ‘‘or’’ at (1) EXISTING RIGHTS, DUTIES, AND OBLIGA- AMENDMENTS. the end; (a) RIGHT TO FINANCIAL PRIVACY ACT OF TIONS NOT AFFECTED.—Subsection (a) shall (2) in subparagraph (B), by striking the pe- 1978.—Section 1113(o) of the Right to Finan- not affect the validity of any right, duty, or riod at the end and inserting ‘‘; or’’; and cial Privacy Act of 1978 (12 U.S.C. 3413(o)) is obligation of the United States, the Director (3) by adding at the end the following: amended— of the Office of Federal Housing Enterprise ‘‘(C) during the 2-year period beginning on (1) by striking ‘‘Federal Housing Finance Oversight, or any other person, which— the date of enactment of this subparagraph, Board’’ and inserting ‘‘Federal Housing Fi- (A) arises under— refinance loans that are secured by a first nance Agency’’; and (i) the Federal Housing Enterprises Finan- mortgage on a primary residence of any fam- (2) by striking ‘‘Federal Housing Finance cial Safety and Soundness Act of 1992; ily having an income at or below 80 percent Board’s’’ and inserting ‘‘Federal Housing Fi- (ii) the Federal National Mortgage Asso- of the median income for the area.’’. nance Agency’s’’. ciation Charter Act; (b) RIEGLE COMMUNITY DEVELOPMENT AND TITLE III—TRANSFER OF FUNCTIONS, (iii) the Federal Home Loan Mortgage Cor- REGULATORY IMPROVEMENT ACT OF 1994.— PERSONNEL, AND PROPERTY OF OFHEO poration Act; or Section 117(e) of the Riegle Community De- AND THE FEDERAL HOUSING FINANCE (iv) any other provision of law applicable velopment and Regulatory Improvement Act BOARD with respect to such Office; and of 1994 (12 U.S.C. 4716(e)) is amended by strik- Subtitle A—OFHEO (B) existed on the day before the date of abolishment under subsection (a). ing ‘‘Federal Housing Finance Board’’ and SEC. 1301. ABOLISHMENT OF OFHEO. (2) CONTINUATION OF SUITS.—No action or inserting ‘‘Federal Housing Finance Agen- (a) IN GENERAL.—Effective at the end of other proceeding commenced by or against cy’’. the 1-year period beginning on the date of the Director of the Office of Federal Housing (c) TITLE 18, UNITED STATES CODE.—Title enactment of this Act, the Office of Federal 18, United States Code, is amended by strik- Enterprise Oversight in connection with Housing Enterprise Oversight of the Depart- ing ‘‘Federal Housing Finance Board’’ each functions that are transferred to the Direc- ment of Housing and Urban Development and place such term appears in each of sections tor of the Federal Housing Finance Agency the positions of the Director and Deputy Di- 212, 657, 1006, and 1014, and inserting ‘‘Federal shall abate by reason of the enactment of rector of such Office are abolished. Housing Finance Agency’’. this Act, except that the Director of the Fed- (b) DISPOSITION OF AFFAIRS.—During the 1- (d) MAHRA ACT OF 1997.—Section 517(b)(4) eral Housing Finance Agency shall be sub- year period beginning on the date of enact- of the Multifamily Assisted Housing Reform stituted for the Director of the Office of Fed- ment of this Act, the Director of the Office and Affordability Act of 1997 (42 U.S.C. 1437f eral Housing Enterprise Oversight as a party of Federal Housing Enterprise Oversight, note) is amended by striking ‘‘Federal Hous- to any such action or proceeding. solely for the purpose of winding up the af- ing Finance Board’’ and inserting ‘‘Federal SEC. 1302. CONTINUATION AND COORDINATION fairs of the Office of Federal Housing Enter- Housing Finance Agency’’. OF CERTAIN ACTIONS. (e) TITLE 44, UNITED STATES CODE.—Section prise Oversight— (a) IN GENERAL.—All regulations, orders, 3502(5) of title 44, United States Code, is (1) shall manage the employees of such Of- and determinations described in subsection amended by striking ‘‘Federal Housing Fi- fice and provide for the payment of the com- (b) shall remain in effect according to the nance Board’’ and inserting ‘‘Federal Hous- pensation and benefits of any such employee terms of such regulations, orders, and deter- ing Finance Agency’’. which accrue before the effective date of the minations, and shall be enforceable by or (f) ACCESS TO LOCAL TV ACT OF 2000.—Sec- transfer of such employee under section 1303; against the Director or the Secretary of tion 1004(d)(2)(D)(iii) of the Launching Our and Housing and Urban Development, as the case Communities’ Access to Local Television (2) may take any other action necessary may be, until modified, terminated, set Act of 2000 (47 U.S.C. 1103(d)(2)(D)(iii)) is for the purpose of winding up the affairs of aside, or superseded in accordance with ap- amended by striking ‘‘Office of Federal the Office. plicable law by the Director or the Sec- Housing Enterprise Oversight, the Federal (c) STATUS OF EMPLOYEES BEFORE TRANS- retary, as the case may be, any court of com- Housing Finance Board’’ and inserting ‘‘Fed- FER.—The amendments made by title I and petent jurisdiction, or operation of law. eral Housing Finance Agency’’. the abolishment of the Office of Federal (b) APPLICABILITY.—A regulation, order, or (g) FIRREA.—Section 1216 of the Financial Housing Enterprise Oversight under sub- determination is described in this subsection Institutions Reform, Recovery, and Enhance- section (a) of this section may not be con- if it— ment Act of 1989 (12 U.S.C. 1833e) is amend- strued to affect the status of any employee (1) was issued, made, prescribed, or allowed ed— of such Office as an employee of an agency of to become effective by— (1) in subsection (a), by striking paragraph the United States for purposes of any other (A) the Office of Federal Housing Enter- (3) and inserting the following: provision of law before the effective date of prise Oversight;

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00106 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5877 (B) the Secretary of Housing and Urban (A) the employee does not elect to give up time as is reasonable to facilitate the or- Development, and relates to the authority of the benefit or membership in the program; derly transfer of functions pursuant to any the Secretary under— and other provision of this Act or any amend- (i) the Federal Housing Enterprises Finan- (B) the benefit or program is continued by ment made by this Act to any other provi- cial Safety and Soundness Act of 1992; the Director of the Federal Housing Finance sion of law. (ii) the Federal National Mortgage Asso- Agency. (f) SAVINGS PROVISIONS.— ciation Charter Act, with respect to the Fed- (2) COST DIFFERENTIAL.— (1) EXISTING RIGHTS, DUTIES, AND OBLIGA- eral National Mortgage Association; or (A) IN GENERAL.—The difference in the TIONS NOT AFFECTED.—Subsection (a) shall (iii) the Federal Home Loan Mortgage Cor- costs between the benefits which would have not affect the validity of any right, duty, or poration Act, with respect to the Federal been provided by the Office of Federal Hous- obligation of the United States, a member of Home Loan Mortgage Corporation; or ing Enterprise Oversight and those provided the Board, or any other person, which— (C) a court of competent jurisdiction, and by this section shall be paid by the Director. (A) arises under the Federal Home Loan relates to functions transferred by this Act; (B) HEALTH INSURANCE.—If any employee Bank Act, or any other provision of law ap- and elects to give up membership in a health in- plicable with respect to the Board; and (2) is in effect on the effective date of the surance program or the health insurance (B) existed on the day before the effective abolishment under section 1301(a). program is not continued by the Director, date of the abolishment under subsection (a). SEC. 1303. TRANSFER AND RIGHTS OF EMPLOY- the employee shall be permitted to select an (2) CONTINUATION OF SUITS.—No action or EES OF OFHEO. alternate Federal health insurance program other proceeding commenced by or against (a) TRANSFER.—Each employee of the Of- not later than 30 days after the date of such the Board in connection with functions that fice of Federal Housing Enterprise Oversight election or notice, without regard to any are transferred under this Act to the Direc- shall be transferred to the Agency for em- other regularly scheduled open season. tor shall abate by reason of the enactment of ployment, not later than the effective date SEC. 1304. TRANSFER OF PROPERTY AND FACILI- this Act, except that the Director shall be of the abolishment under section 1301(a), and TIES. substituted for the Board or any member such transfer shall be deemed a transfer of Upon the effective date of its abolishment thereof as a party to any such action or pro- function for purposes of section 3503 of title under section 1301(a), all property of the Of- ceeding. 5, United States Code. fice of Federal Housing Enterprise Oversight SEC. 1312. CONTINUATION AND COORDINATION (b) GUARANTEED POSITIONS.— shall transfer to the Agency. OF CERTAIN ACTIONS. (1) IN GENERAL.—Each employee trans- (a) IN GENERAL.—All regulations, orders, ferred under subsection (a) shall be guaran- Subtitle B—Federal Housing Finance Board determinations, and resolutions described teed a position with the same status, tenure, SEC. 1311. ABOLISHMENT OF THE FEDERAL under subsection (b) shall remain in effect grade, and pay as that held on the day imme- HOUSING FINANCE BOARD. according to the terms of such regulations, diately preceding the transfer. (a) IN GENERAL.—Effective at the end of orders, determinations, and resolutions, and (2) NO INVOLUNTARY SEPARATION OR REDUC- the 1-year period beginning on the date of shall be enforceable by or against the Direc- TION.—An employee transferred under sub- enactment of this Act, the Federal Housing tor until modified, terminated, set aside, or section (a) holding a permanent position on Finance Board (in this subtitle referred to as superseded in accordance with applicable law the day immediately preceding the transfer the ‘‘Board’’) is abolished. by the Director, any court of competent ju- may not be involuntarily separated or re- (b) DISPOSITION OF AFFAIRS.—During the 1- risdiction, or operation of law. duced in grade or compensation during the year period beginning on the date of enact- (b) APPLICABILITY.—A regulation, order, 12-month period beginning on the date of ment of this Act, the Board, solely for the determination, or resolution is described transfer, except for cause, or, in the case of purpose of winding up the affairs of the under this subsection if it— a temporary employee, separated in accord- Board— (1) was issued, made, prescribed, or allowed ance with the terms of the appointment of (1) shall manage the employees of the to become effective by— the employee. Board and provide for the payment of the (A) the Board; or (c) APPOINTMENT AUTHORITY FOR EXCEPTED compensation and benefits of any such em- (B) a court of competent jurisdiction, and AND SENIOR EXECUTIVE SERVICE EMPLOY- ployee which accrue before the effective date EES.— of the transfer of such employee under sec- relates to functions transferred by this Act; (1) IN GENERAL.—In the case of an employee tion 1313; and and occupying a position in the excepted service (2) may take any other action necessary (2) is in effect on the effective date of the or the Senior Executive Service, any ap- for the purpose of winding up the affairs of abolishment under section 1311(a). pointment authority established under law the Board. SEC. 1313. TRANSFER AND RIGHTS OF EMPLOY- or by regulations of the Office of Personnel (c) STATUS OF EMPLOYEES BEFORE TRANS- EES OF THE FEDERAL HOUSING FI- Management for filling such position shall FER.—The amendments made by titles I and NANCE BOARD. be transferred, subject to paragraph (2). II and the abolishment of the Board under (a) TRANSFER.—Each employee of the (2) DECLINE OF TRANSFER.—The Director subsection (a) may not be construed to affect Board shall be transferred to the Agency for may decline a transfer of authority under the status of any employee of the Board as employment, not later than the effective paragraph (1) to the extent that such author- an employee of an agency of the United date of the abolishment under section ity relates to— States for purposes of any other provision of 1311(a), and such transfer shall be deemed a (A) a position excepted from the competi- law before the effective date of the transfer transfer of function for purposes of section tive service because of its confidential, pol- of any such employee under section 1313. 3503 of title 5, United States Code. icymaking, policy-determining, or policy-ad- (d) USE OF PROPERTY AND SERVICES.— (b) GUARANTEED POSITIONS.— vocating character; or (1) PROPERTY.—The Director may use the (1) IN GENERAL.—Each employee trans- (B) a noncareer position in the Senior Ex- property of the Board to perform functions ferred under subsection (a) shall be guaran- ecutive Service (within the meaning of sec- which have been transferred to the Director, teed a position with the same status, tenure, tion 3132(a)(7) of title 5, United States Code). for such time as is reasonable to facilitate grade, and pay as that held on the day imme- (d) REORGANIZATION.—If the Director deter- the orderly transfer of functions transferred diately preceding the transfer. mines, after the end of the 1-year period be- under any other provision of this Act or any (2) NO INVOLUNTARY SEPARATION OR REDUC- ginning on the effective date of the abolish- amendment made by this Act to any other TION.—An employee holding a permanent po- ment under section 1301(a), that a reorga- provision of law. sition on the day immediately preceding the nization of the combined workforce is re- (2) AGENCY SERVICES.—Any agency, depart- transfer may not be involuntarily separated quired, that reorganization shall be deemed a ment, or other instrumentality of the United or reduced in grade or compensation during major reorganization for purposes of afford- States, and any successor to any such agen- the 12-month period beginning on the date of ing affected employee retirement under sec- cy, department, or instrumentality, which transfer, except for cause, or, if the employee tion 8336(d)(2) or 8414(b)(1)(B) of title 5, was providing supporting services to the is a temporary employee, separated in ac- United States Code. Board before the expiration of the 1-year pe- cordance with the terms of the appointment (e) EMPLOYEE BENEFIT PROGRAMS.— riod under subsection (a) in connection with of the employee. (1) IN GENERAL.—Any employee of the Of- functions that are transferred to the Direc- (c) APPOINTMENT AUTHORITY FOR EXCEPTED fice of Federal Housing Enterprise Oversight tor shall— EMPLOYEES.— accepting employment with the Agency as a (A) continue to provide such services, on a (1) IN GENERAL.—In the case of an employee result of a transfer under subsection (a) may reimbursable basis, until the transfer of such occupying a position in the excepted service, retain, for 12 months after the date on which functions is complete; and any appointment authority established such transfer occurs, membership in any em- (B) consult with any such agency to co- under law or by regulations of the Office of ployee benefit program of the Agency or the ordinate and facilitate a prompt and reason- Personnel Management for filling such posi- Office of Federal Housing Enterprise Over- able transition. tion shall be transferred, subject to para- sight of the Department of Housing and (e) CONTINUATION OF SERVICES.—The Direc- graph (2). Urban Development, as applicable, including tor may use the services of employees and (2) DECLINE OF TRANSFER.—The Director insurance, to which such employee belongs other personnel of the Board, on a reimburs- may decline a transfer of authority under on the date of the abolishment under section able basis, to perform functions which have paragraph (1), to the extent that such au- 1301(a), if— been transferred to the Director for such thority relates to a position excepted from

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00107 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5878 CONGRESSIONAL RECORD — SENATE June 19, 2008

the competitive service because of its con- ‘‘(7) to provide servicers of delinquent ‘‘(4) EXTINGUISHMENT OF SUBORDINATE fidential, policymaking, policy-determining, mortgages with additional methods and ap- LIENS.— or policy-advocating character. proaches to avoid foreclosure. ‘‘(A) REQUIRED AGREEMENT.—All holders of (d) REORGANIZATION.—If the Director deter- ‘‘(c) ESTABLISHMENT AND IMPLEMENTATION outstanding mortgage liens on the property mines, after the end of the 1-year period be- OF PROGRAM REQUIREMENTS.— to which the eligible mortgage relates shall ginning on the effective date of the abolish- ‘‘(1) DUTIES OF THE BOARD.—In order to agree to accept the proceeds of the insured ment under section 1311(a), that a reorga- carry out the purposes of the HOPE for loan as payment in full of all indebtedness nization of the combined workforce is re- Homeowners Program, the Board shall— under the eligible mortgage, and all encum- quired, that reorganization shall be deemed a ‘‘(A) establish requirements and standards brances related to such eligible mortgage major reorganization for purposes of afford- for the program; and shall be removed. The Secretary may take ing affected employee retirement under sec- ‘‘(B) prescribe such regulations and provide such actions, subject to standards estab- tion 8336(d)(2) or 8414(b)(1)(B) of title 5, such guidance as may be necessary or appro- lished by the Board under subparagraph (B), United States Code. priate to implement such requirements and as may be necessary and appropriate to fa- (e) EMPLOYEE BENEFIT PROGRAMS.— standards. cilitate coordination and agreement between (1) IN GENERAL.—Any employee of the ‘‘(2) DUTIES OF THE SECRETARY.—In car- the holders of the existing senior mortgage Board accepting employment with the Agen- rying out any of the program requirements and any existing subordinate mortgages, cy as a result of a transfer under subsection or standards established under paragraph (1), taking into consideration the subordinate (a) may retain, for 12 months after the date the Secretary may issue such interim guid- lien status of such subordinate mortgages. on which such transfer occurs, membership ance and mortgagee letters as the Secretary ‘‘(B) SHARED APPRECIATION.— in any employee benefit program of the determines necessary or appropriate. Agency or the Board, as applicable, including ‘‘(d) INSURANCE OF MORTGAGES.—The Sec- ‘‘(i) IN GENERAL.—The Board shall establish insurance, to which such employee belongs retary is authorized upon application of a standards and policies that will allow for the on the effective date of the abolishment mortgagee to make commitments to insure payment to the holder of any existing subor- under section 1311(a) if— or to insure any eligible mortgage that has dinate mortgage of a portion of any future (A) the employee does not elect to give up been refinanced in a manner meeting the re- appreciation in the property secured by such the benefit or membership in the program; quirements under subsection (e). eligible mortgage that is owed to the Sec- and ‘‘(e) REQUIREMENTS OF INSURED MORT- retary pursuant to subsection (k). (B) the benefit or program is continued by GAGES.—To be eligible for insurance under ‘‘(ii) FACTORS.—In establishing the stand- the Director. this section, a refinanced eligible mortgage ards and policies required under clause (i), (2) COST DIFFERENTIAL.— shall comply with all of the following re- the Board shall take into consideration— (A) IN GENERAL.—The difference in the quirements: ‘‘(I) the status of any subordinate mort- costs between the benefits which would have ‘‘(1) LACK OF CAPACITY TO PAY EXISTING gage; been provided by the Board and those pro- MORTGAGE.— ‘‘(II) the outstanding principal balance of vided by this section shall be paid by the Di- ‘‘(A) BORROWER CERTIFICATION.— and accrued interest on the existing senior rector. ‘‘(i) IN GENERAL.—The mortgagor shall pro- mortgage and any outstanding subordinate (B) HEALTH INSURANCE.—If any employee vide certification to the Secretary that the mortgages; elects to give up membership in a health in- mortgagor has not intentionally defaulted ‘‘(III) the extent to which the current ap- surance program or the health insurance on the mortgage or any other debt, and has praised value of the property securing a sub- program is not continued by the Director, not knowingly, or willfully and with actual ordinate mortgage is less than the out- the employee shall be permitted to select an knowledge, furnished material information standing principal balance and accrued in- alternate Federal health insurance program known to be false for the purpose of obtain- terest on any other liens that are senior to not later than 30 days after the date of such ing any eligible mortgage. such subordinate mortgage; and election or notice, without regard to any ‘‘(ii) PENALTIES.— ‘‘(IV) such other factors as the Board de- other regularly scheduled open season. ‘‘(I) FALSE STATEMENT.—Any certification termines to be appropriate. SEC. 1314. TRANSFER OF PROPERTY AND FACILI- filed pursuant to clause (i) shall contain an ‘‘(C) VOLUNTARY PROGRAM.—This paragraph TIES. acknowledgment that any willful false state- may not be construed to require any holder Upon the effective date of the abolishment ment made in such certification is punish- of any existing mortgage to participate in under section 1311(a), all property of the able under section 1001, of title 18, United the program under this section generally, or Board shall transfer to the Agency. States Code, by fine or imprisonment of not with respect to any particular loan. TITLE IV—HOPE FOR HOMEOWNERS more than 5 years, or both. ‘‘(5) TERM OF MORTGAGE.—The refinanced SEC. 1401. SHORT TITLE. ‘‘(II) LIABILITY FOR REPAYMENT.—The mort- eligible mortgage to be insured shall— This title may be cited as the ‘‘HOPE for gagor shall agree in writing that the mort- ‘‘(A) bear interest at a single rate that is Homeowners Act of 2008’’. gagor shall be liable to repay to the Federal fixed for the entire term of the mortgage; SEC. 1402. ESTABLISHMENT OF HOPE FOR HOME- Housing Administration any direct financial and OWNERS PROGRAM. benefit achieved from the reduction of in- ‘‘(B) have a maturity of not less than 30 (a) ESTABLISHMENT.—Title II of the Na- debtedness on the existing mortgage or years from the date of the beginning of am- tional Housing Act (12 U.S.C. 1707 et seq.) is mortgages on the residence refinanced under ortization of such refinanced eligible mort- amended by adding at the end the following: this section derived from misrepresentations gage. ‘‘SEC. 257. HOPE FOR HOMEOWNERS PROGRAM. made in the certifications and documenta- ‘‘(6) MAXIMUM LOAN AMOUNT.—The principal ‘‘(a) ESTABLISHMENT.—There is established tion required under this subparagraph, sub- obligation amount of the eligible mortgage in the Federal Housing Administration a ject to the discretion of the Secretary. to be insured shall not exceed 132 percent of HOPE for Homeowners Program. ‘‘(B) CURRENT BORROWER DEBT-TO-INCOME the dollar amount limitation in effect for ‘‘(b) PURPOSE.—The purpose of the HOPE RATIO.—As of March 1, 2008, the mortgagor 2007 under section 305(a)(2) of the Federal for Homeowners Program is— shall have had a ratio of mortgage debt to Home Loan Mortgage Corporation Act (12 ‘‘(1) to create an FHA program, participa- income, taking into consideration all exist- U.S.C. 1454(a)(2)) for a property of the appli- tion in which is voluntary on the part of ing mortgages of that mortgagor at such cable size. homeowners and existing loan holders to in- time, greater than 31 percent (or such higher ‘‘(7) PROHIBITION ON SECOND LIENS.—A sure refinanced loans for distressed bor- amount as the Board determines appro- mortgagor may not grant a new second lien rowers to support long-term, sustainable priate). on the mortgaged property during the first 5 homeownership; ‘‘(2) DETERMINATION OF PRINCIPAL OBLIGA- years of the term of the mortgage insured ‘‘(2) to allow homeowners to avoid fore- TION AMOUNT.—The principal obligation under this section. closure by reducing the principle balance amount of the refinanced eligible mortgage ‘‘(8) APPRAISALS.—Any appraisal conducted outstanding, and interest rate charged, on to be insured shall— in connection with a mortgage insured under their mortgages; ‘‘(A) be determined by the reasonable abil- this section shall— ‘‘(3) to help stabilize and provide con- ity of the mortgagor to make his or her ‘‘(A) be based on the current value of the fidence in mortgage markets by bringing mortgage payments, as such ability is deter- property; transparency to the value of assets based on mined by the Secretary pursuant to section ‘‘(B) be conducted in accordance with title mortgage assets; 203(b)(4) or by any other underwriting stand- XI of the Financial Institutions Reform, Re- ‘‘(4) to target mortgage assistance under ards established by the Board; and covery, and Enforcement Act of 1989 (12 this section to homeowners for their prin- ‘‘(B) not exceed 90 percent of the appraised U.S.C. 3331 et seq.); cipal residence; value of the property to which such mort- ‘‘(C) be completed by an appraiser who ‘‘(5) to enhance the administrative capac- gage relates. meets the competency requirements of the ity of the FHA to carry out its expanded role ‘‘(3) REQUIRED WAIVER OF PREPAYMENT PEN- Uniform Standards of Professional Appraisal under the HOPE for Homeowners Program; ALTIES AND FEES.—All penalties for prepay- Practice; ‘‘(6) to ensure the HOPE for Homeowners ment or refinancing of the eligible mortgage, ‘‘(D) be wholly consistent with the ap- Program remains in effect only for as long as and all fees and penalties related to default praisal standards, practices, and procedures is necessary to provide stability to the hous- or delinquency on the eligible mortgage, under section 202(e) of this Act that apply to ing market; and shall be waived or forgiven. all loans insured under this Act; and

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00108 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5879

‘‘(E) comply with the requirements of sub- ices of the House of Representatives and the ‘‘(1) FIVE-YEAR PHASE-IN FOR EQUITY AS A section (g) of this section (relating to ap- Committee on Banking, Housing, and Urban RESULT OF SALE OR REFINANCING.—For each praisal independence). Affairs of the Senate. The report shall in- eligible mortgage insured under this section, ‘‘(9) DOCUMENTATION AND VERIFICATION OF clude a detailed description of the analysis the Secretary and the mortgagor of such INCOME.—In complying with the FHA under- required under paragraph (2)(A) and of the mortgage shall, upon any sale or disposition writing requirements under the HOPE for determinations made pursuant to paragraph of the property to which such mortgage re- Homeowners Program under this section, the (2)(B), and shall include any other findings lates, or upon the subsequent refinancing of mortgagee under the mortgage shall docu- and recommendations of the Board pursuant such mortgage, be entitled to the following ment and verify the income of the mortgagor to the study, including identifying various with respect to any equity created as a di- by procuring an Internal Revenue Service options for mechanisms described in para- rect result of such sale or refinancing: transcript of the income tax returns of the graph (1). ‘‘(A) If such sale or refinancing occurs dur- mortgagor for the 2 most recent years for ‘‘(g) APPRAISAL INDEPENDENCE.— ing the period that begins on the date that which the filing deadline for such years has ‘‘(1) PROHIBITIONS ON INTERESTED PARTIES such mortgage is insured and ends 1 year passed and by any other method, in accord- IN A REAL ESTATE TRANSACTION.—No mort- after such date of insurance, the Secretary ance with procedures and standards that the gage lender, mortgage broker, mortgage shall be entitled to 100 percent of such eq- Board or the Secretary shall establish. banker, real estate broker, appraisal man- uity. ‘‘(10) MORTGAGE FRAUD.—The mortgagor agement company, employee of an appraisal ‘‘(B) If such sale or refinancing occurs dur- shall not have been convicted under any pro- management company, nor any other person ing the period that begins 1 year after such vision of Federal or State law for fraud, in- with an interest in a real estate transaction date of insurance and ends 2 years after such cluding mortgage fraud. involving an appraisal in connection with a date of insurance, the Secretary shall be en- ‘‘(11) PRIMARY RESIDENCE.—The mortgagor mortgage insured under this section shall titled to 90 percent of such equity and the shall provide documentation satisfactory in improperly influence, or attempt to improp- mortgagor shall be entitled to 10 percent of the determination of the Secretary to prove erly influence, through coercion, extortion, such equity. that the residence covered by the mortgage collusion, compensation, instruction, induce- ‘‘(C) If such sale or refinancing occurs dur- to be insured under this section is occupied ment, intimidation, nonpayment for services ing the period that begins 2 years after such by the mortgagor as the primary residence of rendered, or bribery, the development, re- date of insurance and ends 3 years after such the mortgagor, and that such residence is porting, result, or review of a real estate ap- date of insurance, the Secretary shall be en- the only residence in which the mortgagor praisal sought in connection with the mort- titled to 80 percent of such equity and the has any present ownership interest. gage. mortgagor shall be entitled to 20 percent of ‘‘(f) STUDY OF AUCTION OR BULK REFINANCE ‘‘(2) CIVIL MONETARY PENALTIES.—The Sec- such equity. PROGRAM.— retary may impose a civil money penalty for ‘‘(D) If such sale or refinancing occurs dur- ‘‘(1) STUDY.—The Board shall conduct a any knowing and material violation of para- ing the period that begins 3 years after such study of the need for and efficacy of an auc- graph (1) under the same terms and condi- date of insurance and ends 4 years after such tion or bulk refinancing mechanism to facili- tions as are authorized in section 536(a) of date of insurance, the Secretary shall be en- tate refinancing of existing residential mort- this Act. titled to 70 percent of such equity and the gages that are at risk for foreclosure into ‘‘(h) STANDARDS TO PROTECT AGAINST AD- mortgagor shall be entitled to 30 percent of mortgages insured under this section. The VERSE SELECTION.— such equity. study shall identify and examine various op- ‘‘(1) IN GENERAL.—The Board shall, by rule ‘‘(E) If such sale or refinancing occurs dur- tions for mechanisms under which lenders or order, establish standards and policies to ing the period that begins 4 years after such and servicers of such mortgages may make require the underwriter of the insured loan date of insurance and ends 5 years after such bids for forward commitments for such in- to provide such representations and warran- date of insurance, the Secretary shall be en- surance in an expedited manner. ties as the Board considers necessary or ap- titled to 60 percent of such equity and the ‘‘(2) CONTENT.— propriate to enforce compliance with all un- mortgagor shall be entitled to 40 percent of ‘‘(A) ANALYSIS.—The study required under derwriting and appraisal standards of the such equity. paragraph (1) shall analyze— HOPE for Homeowners Program. ‘‘(F) If such sale or refinancing occurs dur- ‘‘(i) the feasibility of establishing a mecha- ‘‘(2) EXCLUSION FOR VIOLATIONS.—The Board ing any period that begins 5 years after such nism that would facilitate the more rapid re- shall prohibit the Secretary from paying in- date of insurance, the Secretary shall be en- financing of borrowers at risk of foreclosure surance benefits to a mortgagee who violates titled to 50 percent of such equity and the into performing mortgages insured under the representations and warranties, as estab- mortgagor shall be entitled to 50 percent of this section; lished under paragraph (1), or in any case in such equity. ‘‘(ii) whether such a mechanism would pro- which a mortgagor fails to make the first ‘‘(2) APPRECIATION IN VALUE.—For each eli- vide an effective and efficient mechanism to payment on a refinanced eligible mortgage. gible mortgage insured under this section, reduce foreclosures on qualified existing ‘‘(3) OTHER AUTHORITY.—The Board may es- the Secretary and the mortgagor of such mortgages; tablish such other standards or policies as mortgage shall, upon any sale or disposition ‘‘(iii) whether the use of an auction or bulk necessary to protect against adverse selec- of the property to which such mortgage re- refinance program is necessary to stabilize tion, including requiring loans identified by lates, each be entitled to 50 percent of any the housing market and reduce the impact of the Secretary as higher risk loans to dem- appreciation in value of the appraised value turmoil in that market on the economy of onstrate payment performance for a reason- of such property that has occurred since the the United States; able period of time prior to being insured date that such mortgage was insured under ‘‘(iv) whether there are other mechanisms under the program. this section. or authority that would be useful to reduce ‘‘(i) PREMIUMS.—For each refinanced eligi- ‘‘(l) ESTABLISHMENT OF HOPE FUND.— foreclosure; and ble mortgage insured under this section, the ‘‘(1) IN GENERAL.—There is established in ‘‘(v) and any other factors that the Board Secretary shall establish and collect— the Federal Housing Administration a re- considers relevant. ‘‘(1) at the time of insurance, a single pre- volving fund to be known as the Home Own- ‘‘(B) DETERMINATIONS.—To the extent that mium payment in an amount equal to 3 per- ership Preservation Entity Fund, which shall the Board finds that a facility of the type de- cent of the amount of the original insured be used by the Board for carrying out the scribed in subparagraph (A) is feasible and principal obligation of the refinanced eligi- mortgage insurance obligations under this useful, the study shall— ble mortgage, which shall be paid from the section. ‘‘(i) determine and identify any additional proceeds of the mortgage being insured ‘‘(2) MANAGEMENT OF FUND.—The HOPE authority or resources needed to establish under this section, through the reduction of Fund shall be administered and managed by and operate such a mechanism; the amount of indebtedness that existed on the Secretary, who shall establish reasonable ‘‘(ii) determine whether there is a need for the eligible mortgage prior to refinancing; and prudent criteria for the management and additional authority with respect to the loan and operation of any amounts in the HOPE Fund. underwriting criteria established in this sec- ‘‘(2) in addition to the premium required ‘‘(m) LIMITATION ON AGGREGATE INSURANCE tion or with respect to eligibility of partici- under paragraph (1), an annual premium in AUTHORITY.—The aggregate original prin- pating borrowers, lenders, or holders of liens; an amount equal to 1.5 percent of the cipal obligation of all mortgages insured ‘‘(iii) determine whether such underwriting amount of the remaining insured principal under this section may not exceed criteria should be established on the basis of balance of the mortgage. $300,000,000,000. individual loans, in the aggregate, or other- ‘‘(j) ORIGINATION FEES AND INTEREST ‘‘(n) REPORTS BY THE BOARD.—The Board wise to facilitate the goal of refinancing bor- RATE.—The Board shall establish— shall submit monthly reports to the Con- rowers at risk of foreclosure into viable ‘‘(1) a reasonable limitation on origination gress identifying the progress of the HOPE loans insured under this section. fees for refinanced eligible mortgages in- for Homeowners Program, which shall con- ‘‘(3) REPORT.—Not later than the expira- sured under this section; and tain the following information for each tion of the 60-day period beginning on the ‘‘(2) procedures to ensure that interest month: date of the enactment of this section, the rates on such mortgages shall be commensu- ‘‘(1) The number of new mortgages insured Board shall submit a report regarding the re- rate with market rate interest rates on such under this section, including the location of sults of the study conducted under this sub- types of loans. the properties subject to such mortgages by section to the Committee on Financial Serv- ‘‘(k) EQUITY AND APPRECIATION.— census tract.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00109 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5880 CONGRESSIONAL RECORD — SENATE June 19, 2008 ‘‘(2) The aggregate principal obligation of Board, afford his or her mortgage payments; cordance with the provisions of the Federal new mortgages insured under this section. and Credit Reform Act of 1990 (2 U.S.C. 661 et ‘‘(3) The average amount by which the ‘‘(B) originated on or before January 1, seq.), except as provided in this paragraph; principle balance outstanding on mortgages 2008. and insured this section was reduced. ‘‘(4) EXISTING SENIOR MORTGAGE.—The term ‘‘(C) use the proceeds from HOPE Bonds ‘‘(4) The amount of premiums collected for ‘existing senior mortgage’ means, with re- only to pay for the net costs to the Federal insurance of mortgages under this section. spect to a mortgage insured under this sec- Government of the HOPE for Homeowners ‘‘(5) The claim and loss rates for mortgages tion, the existing mortgage that has superior Program, including administrative costs. insured under this section. priority. ‘‘(2) REIMBURSEMENTS TO TREASURY.— ‘‘(6) Any other information that the Board ‘‘(5) EXISTING SUBORDINATE MORTGAGE.— Funds received pursuant to section 1338(b) of considers appropriate. The term ‘existing subordinate mortgage’ the Federal Housing Enterprises Regulatory ‘‘(o) REQUIRED OUTREACH EFFORTS.—The means, with respect to a mortgage insured Reform Act of 1992 shall be used to reimburse Secretary shall carry out outreach efforts to under this section, an existing mortgage the Secretary of the Treasury for amounts ensure that homeowners, lenders, and the that has subordinate priority to the existing borrowed under paragraph (1). general public are aware of the opportunities senior mortgage. ‘‘(3) USE OF RESERVE FUND.—If the net cost for assistance available under this section. ‘‘(6) HOPE FOR HOMEOWNERS PROGRAM.— to the Federal Government for the HOPE for ‘‘(p) ENHANCEMENT OF FHA CAPACITY.— The term ‘HOPE for Homeowners Program’ Homeowners Program exceeds the amount of Under the direction of the Board, the Sec- means the program established under this funds received under paragraph (2), remain- retary shall take such actions as may be nec- section. ing debts of the HOPE for Homeowners Pro- essary to— ‘‘(7) SECRETARY.—The term ‘Secretary’ gram shall be paid from amounts deposited ‘‘(1) contract for the establishment of un- means the Secretary of Housing and Urban into the fund established by the Secretary derwriting criteria, automated underwriting Development, except where specifically pro- under section 1337(e) of the Federal Housing systems, pricing standards, and other factors vided otherwise. Enterprises Financial Safety and Soundness relating to eligibility for mortgages insured ‘‘(t) REQUIREMENTS RELATED TO THE Act of 1992, remaining amounts in such fund under this section; BOARD.— to be used to reduce the National debt. ‘‘(2) contract for independent quality re- ‘‘(1) COMPENSATION, ACTUAL, NECESSARY, ‘‘(4) REDUCTION OF NATIONAL DEBT.— views of underwriting, including appraisal AND TRANSPORTATION EXPENSES.— Amounts collected under the HOPE for reviews and fraud detection, of mortgages in- ‘‘(A) FEDERAL EMPLOYEES.—A member of Homeowners Program in accordance with sured under this section or pools of such the Board who is an officer or employee of subsections (i) and (k) in excess of the net mortgages; and the Federal Government shall serve without cost to the Federal Government for such ‘‘(3) increase personnel of the Department additional pay (or benefits in the nature of Program shall be used to reduce the National as necessary to process or monitor the proc- compensation) for service as a member of the debt.’’. essing of mortgages insured under this sec- Board. SEC. 1403. FIDUCIARY DUTY OF SERVICERS OF tion. ‘‘(B) TRAVEL EXPENSES.—Members of the POOLED RESIDENTIAL MORTGAGE ‘‘(q) GNMA COMMITMENT AUTHORITY.— Board shall be entitled to receive travel ex- LOANS. ‘‘(1) GUARANTEES.—The Secretary shall penses, including per diem in lieu of subsist- The Truth in Lending Act (15 U.S.C. 1601 et take such actions as may be necessary to en- ence, equivalent to those set forth in sub- seq.) is amended by inserting after section sure that securities based on and backed by chapter I of chapter 57 of title 5, United 129 the following new section: a trust or pool composed of mortgages in- States Code. ‘‘SEC. 129A. FIDUCIARY DUTY OF SERVICERS OF sured under this section are available to be ‘‘(2) BYLAWS.—The Board may prescribe, POOLED RESIDENTIAL MORTGAGES. guaranteed by the Government National amend, and repeal such bylaws as may be ‘‘(a) IN GENERAL.—Except as may be estab- Mortgage Association as to the timely pay- necessary for carrying out the functions of lished in any investment contract between a ment of principal and interest. the Board. servicer of pooled residential mortgages and ‘‘(2) GUARANTEE AUTHORITY.—To carry out ‘‘(3) QUORUM.—A majority of the Board an investor, a servicer of pooled residential the purposes of section 306 of the National shall constitute a quorum. mortgages— Housing Act (12 U.S.C. 1721), the Government ‘‘(4) STAFF; EXPERTS AND CONSULTANTS.— ‘‘(1) owes any duty to maximize the net National Mortgage Association may enter ‘‘(A) DETAIL OF GOVERNMENT EMPLOYEES.— present value of the pooled mortgages in an into new commitments to issue guarantees Upon request of the Board, any Federal Gov- investment to all investors and parties hav- of securities based on or backed by mort- ernment employee may be detailed to the ing a direct or indirect interest in such in- gages insured under this section, not exceed- Board without reimbursement, and such de- vestment, not to any individual party or ing $300,000,000,000. The amount of authority tail shall be without interruption or loss of group of parties; and provided under the preceding sentence to civil service status or privilege. ‘‘(2) shall be deemed to act in the best in- enter into new commitments to issue guar- ‘‘(B) EXPERTS AND CONSULTANTS.—The terests of all such investors and parties if antees is in addition to any amount of au- Board shall procure the services of experts the servicer agrees to or implements a modi- thority to make new commitments to issue and consultants as the Board considers ap- fication or workout plan, including any guarantees that is provided to the Associa- propriate. modification or refinancing undertaken pur- tion under any other provision of law. ‘‘(u) RULE OF CONSTRUCTION RELATED TO suant to the HOPE for Homeowners Act of VOLUNTARY NATURE OF THE PROGRAM.—This ‘‘(r) SUNSET.—The Secretary may not enter 2008, for a residential mortgage or a class of section shall not be construed to require into any new commitment to insure any refi- residential mortgages that constitute a part that any approved financial institution or nanced eligible mortgage, or newly insure or all of the pooled mortgages in such invest- mortgagee participate in any activity au- any refinanced eligible mortgage pursuant to ment, provided that any mortgage so modi- thorized under this section, including any fied meets the following criteria: this section before October 1, 2008 or after activity related to the refinancing of an eli- ‘‘(A) Default on the payment of such mort- September 30, 2011. gible mortgage. gage has occurred or is reasonably foresee- ‘‘(s) DEFINITIONS.—For purposes of this sec- ‘‘(v) RULE OF CONSTRUCTION RELATED TO IN- tion, the following definitions shall apply: SURANCE OF MORTGAGES.—Except as other- able. ‘‘(1) APPROVED FINANCIAL INSTITUTION OR wise provided for in this section or by action ‘‘(B) The property securing such mortgage MORTGAGEE.—The term ‘approved financial of the Board, the provisions and require- is occupied by the mortgagor of such mort- institution or mortgagee’ means a financial ments of section 203(b) shall apply with re- gage. institution or mortgagee approved by the spect to the insurance of any eligible mort- ‘‘(C) The anticipated recovery on the prin- Secretary under section 203 as responsible gage under this section. cipal outstanding obligation of the mortgage and able to service mortgages responsibly. ‘‘(w) HOPE BONDS.— under the modification or workout plan ex- ‘‘(2) BOARD.—The term ‘Board’ means the ‘‘(1) ISSUANCE AND REPAYMENT OF BONDS.— ceeds, on a net present value basis, the an- Board of Directors of the HOPE for Home- Notwithstanding section 504(b) of the Fed- ticipated recovery on the principal out- owners Program. The Board shall be com- eral Credit Reform Act of 1990 (2 U.S.C. standing obligation of the mortgage through posed of the Secretary, the Secretary of the 661d(b)), the Secretary of the Treasury foreclosure. Treasury, the Chairperson of the Board of shall— ‘‘(b) DEFINITION.—As used in this section, Governors of the Federal Reserve System, ‘‘(A) subject to such terms and conditions the term ‘servicer’ has the same meaning as and the Chairperson of the Board of Direc- as the Secretary of the Treasury deems nec- in section 6(i)(2) of the Real Estate Settle- tors of the Federal Deposit Insurance Cor- essary, issue Federal credit instruments, to ment Procedures Act of 1974 (12 U.S.C. poration. be known as ‘HOPE Bonds’, that are callable 2605(i)(2)).’’. ‘‘(3) ELIGIBLE MORTGAGE.—The term ‘eligi- at the discretion of the Secretary of the SEC. 1404. REVISED STANDARDS FOR FHA AP- ble mortgage’ means a mortgage— Treasury and do not, in the aggregate, ex- PRAISERS. ‘‘(A) the mortgagor of which— ceed the amount specified in subsection (m); Section 202(e) of the National Housing Act ‘‘(i) occupies such property as his or her ‘‘(B) provide the subsidy amounts nec- (12 U.S.C. 1708(e)) is amended by adding at principal residence; and essary for loan guarantees under the HOPE the end the following: ‘‘(ii) cannot, subject to subsection (e)(1)(B) for Homeowners Program, not to exceed the ‘‘(5) ADDITIONAL APPRAISER STANDARDS.— and such other standards established by the amount specified in subsection (m), in ac- Beginning on the date of enactment of the

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00110 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5881 Federal Housing Finance Regulatory Reform performs purely administrative or clerical State Bank Supervisors and the American Act of 2008, any appraiser chosen or approved tasks on behalf of a person who is described Association of Residential Mortgage Regu- to conduct appraisals for mortgages under in any such clause; lators for the State licensing and registra- this title shall— (iii) does not include a person or entity tion of State-licensed loan originators and ‘‘(A) be certified— that only performs real estate brokerage ac- the registration of registered loan origina- ‘‘(i) by the State in which the property to tivities and is licensed or registered in ac- tors or any system established by the Sec- be appraised is located; or cordance with applicable State law, unless retary under section 1509. ‘‘(ii) by a nationally recognized profes- the person or entity is compensated by a (6) NONTRADITIONAL MORTGAGE PRODUCT.— sional appraisal organization; and lender, a mortgage broker, or other loan The term ‘‘nontraditional mortgage prod- ‘‘(B) have demonstrated verifiable edu- originator or by any agent of such lender, uct’’ means any mortgage product other cation in the appraisal requirements estab- mortgage broker, or other loan originator; than a 30-year fixed rate mortgage. lished by the Federal Housing Administra- and (7) REGISTERED LOAN ORIGINATOR.—The tion under this subsection.’’. (iv) does not include a person or entity term ‘‘registered loan originator’’ means any TITLE V—S.A.F.E. MORTGAGE LICENSING solely involved in extensions of credit relat- individual who— ACT ing to timeshare plans, as that term is de- (A) meets the definition of loan originator SEC. 1501. SHORT TITLE. fined in section 101(53D) of title 11, United and is an employee of— This title may be cited as the ‘‘Secure and States Code. (i) a depository institution; Fair Enforcement for Mortgage Licensing (B) OTHER DEFINITIONS RELATING TO LOAN (ii) a subsidiary that is— Act of 2008’’ or ‘‘S.A.F.E. Mortgage Licensing ORIGINATOR.—For purposes of this sub- (I) owned and controlled by a depository Act of 2008’’. section, an individual ‘‘assists a consumer in institution; and obtaining or applying to obtain a residential (II) regulated by a Federal banking agency; SEC. 1502. PURPOSES AND METHODS FOR ESTAB- LISHING A MORTGAGE LICENSING mortgage loan’’ by, among other things, ad- or SYSTEM AND REGISTRY. vising on loan terms (including rates, fees, (iii) an institution regulated by the Farm In order to increase uniformity, reduce other costs), preparing loan packages, or col- Credit Administration; and regulatory burden, enhance consumer pro- lecting information on behalf of the con- (B) is registered with, and maintains a tection, and reduce fraud, the States, sumer with regard to a residential mortgage unique identifier through, the Nationwide through the Conference of State Bank Super- loan. Mortgage Licensing System and Registry. visors and the American Association of Resi- (C) ADMINISTRATIVE OR CLERICAL TASKS.— (8) RESIDENTIAL MORTGAGE LOAN.—The dential Mortgage Regulators, are hereby en- The term ‘‘administrative or clerical tasks’’ term ‘‘residential mortgage loan’’ means any couraged to establish a Nationwide Mortgage means the receipt, collection, and distribu- loan primarily for personal, family, or house- Licensing System and Registry for the resi- tion of information common for the proc- hold use that is secured by a mortgage, deed dential mortgage industry that accomplishes essing or underwriting of a loan in the mort- of trust, or other equivalent consensual secu- all of the following objectives: gage industry and communication with a rity interest on a dwelling (as defined in sec- (1) Provides uniform license applications consumer to obtain information necessary tion 103(v) of the Truth in Lending Act) or and reporting requirements for State-li- for the processing or underwriting of a resi- residential real estate upon which is con- censed loan originators. dential mortgage loan. structed or intended to be constructed a (2) Provides a comprehensive licensing and (D) REAL ESTATE BROKERAGE ACTIVITY DE- dwelling (as so defined). supervisory database. FINED.—The term ‘‘real estate brokerage ac- (9) SECRETARY.—The term ‘‘Secretary’’ (3) Aggregates and improves the flow of in- tivity’’ means any activity that involves of- means the Secretary of Housing and Urban formation to and between regulators. fering or providing real estate brokerage Development. (4) Provides increased accountability and services to the public, including— (10) STATE-LICENSED LOAN ORIGINATOR.— tracking of loan originators. (i) acting as a real estate agent or real es- The term ‘‘State-licensed loan originator’’ (5) Streamlines the licensing process and tate broker for a buyer, seller, lessor, or les- means any individual who— reduces the regulatory burden. see of real property; (A) is a loan originator; (6) Enhances consumer protections and (ii) bringing together parties interested in (B) is not an employee of— supports anti-fraud measures. the sale, purchase, lease, rental, or exchange (i) a depository institution; (7) Provides consumers with easily acces- of real property; (ii) a subsidiary that is— sible information, offered at no charge, uti- (iii) negotiating, on behalf of any party, (I) owned and controlled by a depository lizing electronic media, including the Inter- any portion of a contract relating to the institution; and net, regarding the employment history of, sale, purchase, lease, rental, or exchange of (II) regulated by a Federal banking agency; and publicly adjudicated disciplinary and en- real property (other than in connection with or forcement actions against, loan originators. providing financing with respect to any such (iii) an institution regulated by the Farm (8) Establishes a means by which residen- transaction); Credit Administration; and tial mortgage loan originators would, to the (iv) engaging in any activity for which a (C) is licensed by a State or by the Sec- greatest extent possible, be required to act person engaged in the activity is required to retary under section 1508 and registered as a in the best interests of the consumer. be registered or licensed as a real estate loan originator with, and maintains a unique (9) Facilitates responsible behavior in the agent or real estate broker under any appli- identifier through, the Nationwide Mortgage subprime mortgage market place and pro- cable law; and Licensing System and Registry. vides comprehensive training and examina- (v) offering to engage in any activity, or (11) UNIQUE IDENTIFIER.— tion requirements related to subprime mort- act in any capacity, described in clause (i), (A) IN GENERAL.—The term ‘‘unique identi- gage lending. (ii), (iii), or (iv). fier’’ means a number or other identifier (10) Facilitates the collection and disburse- (4) LOAN PROCESSOR OR UNDERWRITER.— that— ment of consumer complaints on behalf of (A) IN GENERAL.—The term ‘‘loan processor (i) permanently identifies a loan origi- State and Federal mortgage regulators. or underwriter’’ means an individual who nator; SEC. 1503. DEFINITIONS. performs clerical or support duties at the di- (ii) is assigned by protocols established by For purposes of this title, the following rection of and subject to the supervision and the Nationwide Mortgage Licensing System definitions shall apply: instruction of— and Registry and the Federal banking agen- (1) FEDERAL BANKING AGENCIES.—The term (i) a State-licensed loan originator; or cies to facilitate electronic tracking of loan ‘‘Federal banking agencies’’ means the Board (ii) a registered loan originator. originators and uniform identification of, of Governors of the Federal Reserve System, (B) CLERICAL OR SUPPORT DUTIES.—For pur- and public access to, the employment his- the Comptroller of the Currency, the Direc- poses of subparagraph (A), the term ‘‘clerical tory of and the publicly adjudicated discipli- tor of the Office of Thrift Supervision, the or support duties’’ may include— nary and enforcement actions against loan National Credit Union Administration, and (i) the receipt, collection, distribution, and originators; and the Federal Deposit Insurance Corporation. analysis of information common for the (iii) shall not be used for purposes other (2) DEPOSITORY INSTITUTION.—The term processing or underwriting of a residential than those set forth under this title. ‘‘depository institution’’ has the same mean- mortgage loan; and (B) RESPONSIBILITY OF STATES.—To the ing as in section 3 of the Federal Deposit In- (ii) communicating with a consumer to ob- greatest extent possible and to accomplish surance Act, and includes any credit union. tain the information necessary for the proc- the purpose of this title, States shall use (3) LOAN ORIGINATOR.— essing or underwriting of a loan, to the ex- unique identifiers in lieu of social security (A) IN GENERAL.—The term ‘‘loan origi- tent that such communication does not in- numbers. nator’’— clude offering or negotiating loan rates or SEC. 1504. LICENSE OR REGISTRATION RE- (i) means an individual who— terms, or counseling consumers about resi- QUIRED. (I) takes a residential mortgage loan appli- dential mortgage loan rates or terms. (a) IN GENERAL.—An individual may not cation; and (5) NATIONWIDE MORTGAGE LICENSING SYS- engage in the business of a loan originator (II) offers or negotiates terms of a residen- TEM AND REGISTRY.—The term ‘‘Nationwide without first— tial mortgage loan for compensation or gain; Mortgage Licensing System and Registry’’ (1) obtaining, and maintaining annually— (ii) does not include any individual who is means a mortgage licensing system devel- (A) a registration as a registered loan not otherwise described in clause (i) and who oped and maintained by the Conference of originator; or

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00111 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5882 CONGRESSIONAL RECORD — SENATE June 19, 2008

(B) a license and registration as a State-li- (A) 3 hours of Federal law and regulations; (1) IN GENERAL.—In order to meet the an- censed loan originator; and (B) 3 hours of ethics, which shall include nual continuing education requirements re- (2) obtaining a unique identifier. instruction on fraud, consumer protection, ferred to in subsection (a)(2), a State-li- (b) LOAN PROCESSORS AND UNDERWRITERS.— and fair lending issues; and censed loan originator shall complete at (1) SUPERVISED LOAN PROCESSORS AND UN- (C) 2 hours of training related to lending least 8 hours of education approved in ac- DERWRITERS.—A loan processor or under- standards for the nontraditional mortgage cordance with paragraph (2), which shall in- writer who does not represent to the public, product marketplace. clude at least— through advertising or other means of com- (2) APPROVED EDUCATIONAL COURSES.—For (A) 3 hours of Federal law and regulations; municating or providing information (in- purposes of paragraph (1), pre-licensing edu- (B) 2 hours of ethics, which shall include cluding the use of business cards, stationery, cation courses shall be reviewed, and ap- instruction on fraud, consumer protection, brochures, signs, rate lists, or other pro- proved by the Nationwide Mortgage Licens- and fair lending issues; and motional items), that such individual can or ing System and Registry. (C) 2 hours of training related to lending will perform any of the activities of a loan (3) LIMITATION AND STANDARDS.— standards for the nontraditional mortgage originator shall not be required to be a (A) LIMITATION.—To maintain the inde- product marketplace. State-licensed loan originator. pendence of the approval process, the Na- (2) APPROVED EDUCATIONAL COURSES.—For (2) INDEPENDENT CONTRACTORS.—An inde- tionwide Mortgage Licensing System and purposes of paragraph (1), continuing edu- pendent contractor may not engage in resi- Registry shall not directly or indirectly offer cation courses shall be reviewed, and ap- dential mortgage loan origination activities pre-licensure educational courses for loan proved by the Nationwide Mortgage Licens- as a loan processor or underwriter unless originators. ing System and Registry. such independent contractor is a State-li- (B) STANDARDS.—In approving courses (3) CALCULATION OF CONTINUING EDUCATION censed loan originator. under this section, the Nationwide Mortgage CREDITS.—A State-licensed loan originator— SEC. 1505. STATE LICENSE AND REGISTRATION Licensing System and Registry shall apply (A) may only receive credit for a con- APPLICATION AND ISSUANCE. reasonable standards in the review and ap- tinuing education course in the year in (a) BACKGROUND CHECKS.—In connection proval of courses. which the course is taken; and with an application to any State for licens- (d) TESTING OF LOAN ORIGINATORS.— (B) may not take the same approved course ing and registration as a State-licensed loan (1) IN GENERAL.—In order to meet the writ- in the same or successive years to meet the originator, the applicant shall, at a min- ten test requirement referred to in sub- annual requirements for continuing edu- imum, furnish to the Nationwide Mortgage section (b)(5), an individual shall pass, in ac- cation. Licensing System and Registry information cordance with the standards established (4) INSTRUCTOR CREDIT.—A State-licensed concerning the applicant’s identity, includ- under this subsection, a qualified written loan originator who is approved as an in- ing— test developed by the Nationwide Mortgage structor of an approved continuing education (1) fingerprints for submission to the Fed- Licensing System and Registry and adminis- course may receive credit for the origina- eral Bureau of Investigation, and any gov- tered by an approved test provider. tor’s own annual continuing education re- ernmental agency or entity authorized to re- quirement at the rate of 2 hours credit for (2) QUALIFIED TEST.—A written test shall ceive such information for a State and na- every 1 hour taught. not be treated as a qualified written test for tional criminal history background check; (5) LIMITATION AND STANDARDS.— purposes of paragraph (1) unless the test ade- and (A) LIMITATION.—To maintain the inde- quately measures the applicant’s knowledge (2) personal history and experience, includ- pendence of the approval process, the Na- and comprehension in appropriate subject ing authorization for the System to obtain— tionwide Mortgage Licensing System and areas, including— (A) an independent credit report obtained Registry shall not directly or indirectly offer (A) ethics; from a consumer reporting agency described any continuing education courses for loan (B) Federal law and regulation pertaining in section 603(p) of the Fair Credit Reporting originators. to mortgage origination; Act; and (B) STANDARDS.—In approving courses (C) State law and regulation pertaining to (B) information related to any administra- under this section, the Nationwide Mortgage mortgage origination; tive, civil or criminal findings by any gov- Licensing System and Registry shall apply (D) Federal and State law and regulation, ernmental jurisdiction. reasonable standards in the review and ap- including instruction on fraud, consumer (b) ISSUANCE OF LICENSE.—The minimum proval of courses. protection, the nontraditional mortgage standards for licensing and registration as a SEC. 1507. SYSTEM OF REGISTRATION ADMINIS- State-licensed loan originator shall include marketplace, and fair lending issues. TRATION BY FEDERAL AGENCIES. the following: (3) MINIMUM COMPETENCE.— (a) DEVELOPMENT.— (1) The applicant has never had a loan (A) PASSING SCORE.—An individual shall (1) IN GENERAL.—The Federal banking originator license revoked in any govern- not be considered to have passed a qualified agencies shall jointly, through the Federal mental jurisdiction. written test unless the individual achieves a Financial Institutions Examination Council, (2) The applicant has not been convicted of, test score of not less than 75 percent correct and together with the Farm Credit Adminis- or pled guilty or nolo contendere to, a felony answers to questions. tration, develop and maintain a system for in a domestic, foreign, or military court— (B) INITIAL RETESTS.—An individual may registering employees of a depository insti- (A) during the 7-year period preceding the retake a test 3 consecutive times with each tution, employees of a subsidiary that is date of the application for licensing and reg- consecutive taking occurring at least 30 days owned and controlled by a depository insti- istration; or after the preceding test. tution and regulated by a Federal banking (B) at any time preceding such date of ap- (C) SUBSEQUENT RETESTS.—After failing 3 agency, or employees of an institution regu- plication, if such felony involved an act of consecutive tests, an individual shall wait at lated by the Farm Credit Administration, as fraud, dishonesty, or a breach of trust, or least 6 months before taking the test again. registered loan originators with the Nation- money laundering. (D) RETEST AFTER LAPSE OF LICENSE.—A wide Mortgage Licensing System and Reg- (3) The applicant has demonstrated finan- State-licensed loan originator who fails to istry. The system shall be implemented be- cial responsibility, character, and general maintain a valid license for a period of 5 fore the end of the 1-year period beginning fitness such as to command the confidence of years or longer shall retake the test, not on the date of enactment of this title. the community and to warrant a determina- taking into account any time during which (2) REGISTRATION REQUIREMENTS.—In con- tion that the loan originator will operate such individual is a registered loan origi- nection with the registration of any loan honestly, fairly, and efficiently within the nator. originator under this subsection, the appro- purposes of this title. (e) MORTGAGE CALL REPORTS.—Each mort- priate Federal banking agency and the Farm (4) The applicant has completed the pre-li- gage licensee shall submit to the Nationwide Credit Administration shall, at a minimum, censing education requirement described in Mortgage Licensing System and Registry re- furnish or cause to be furnished to the Na- subsection (c). ports of condition, which shall be in such tionwide Mortgage Licensing System and (5) The applicant has passed a written test form and shall contain such information as Registry information concerning the that meets the test requirement described in the Nationwide Mortgage Licensing System employees’s identity, including— subsection (d). and Registry may require. (A) fingerprints for submission to the Fed- (6) The applicant has met either a net SEC. 1506. STANDARDS FOR STATE LICENSE RE- eral Bureau of Investigation, and any gov- worth or surety bond requirement, as re- NEWAL. ernmental agency or entity authorized to re- quired by the State pursuant to section (a) IN GENERAL.—The minimum standards ceive such information for a State and na- 1508(d)(6). for license renewal for State-licensed loan tional criminal history background check; (c) PRE-LICENSING EDUCATION OF LOAN originators shall include the following: and ORIGINATORS.— (1) The loan originator continues to meet (B) personal history and experience, in- (1) MINIMUM EDUCATIONAL REQUIREMENTS.— the minimum standards for license issuance. cluding authorization for the Nationwide In order to meet the pre-licensing education (2) The loan originator has satisfied the an- Mortgage Licensing System and Registry to requirement referred to in subsection (b)(4), nual continuing education requirements de- obtain information related to any adminis- a person shall complete at least 20 hours of scribed in subsection (b). trative, civil or criminal findings by any education approved in accordance with para- (b) CONTINUING EDUCATION FOR STATE-LI- governmental jurisdiction. graph (2), which shall include at least— CENSED LOAN ORIGINATORS.— (b) COORDINATION.—

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00112 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5883

(1) UNIQUE IDENTIFIER.—The Federal bank- (2) The State loan originator supervisory may be used as a channeling agent of the ing agencies, through the Financial Institu- authority ensures that all State-licensed States for requesting and distributing infor- tions Examination Council, and the Farm loan originators operating in the State are mation between the Department of Justice Credit Administration shall coordinate with registered with Nationwide Mortgage Licens- and the appropriate State agencies. the Nationwide Mortgage Licensing System ing System and Registry. SEC. 1512. CONFIDENTIALITY OF INFORMATION. and Registry to establish protocols for as- (3) The State loan originator supervisory (a) SYSTEM CONFIDENTIALITY.—Except as signing a unique identifier to each registered authority is required to regularly report vio- otherwise provided in this section, any re- loan originator that will facilitate electronic lations of such law, as well as enforcement quirement under Federal or State law re- tracking and uniform identification of, and actions and other relevant information, to garding the privacy or confidentiality of any public access to, the employment history of the Nationwide Mortgage Licensing System information or material provided to the Na- and publicly adjudicated disciplinary and en- and Registry. tionwide Mortgage Licensing System and forcement actions against loan originators. (4) The State loan originator supervisory Registry or a system established by the Sec- (2) NATIONWIDE MORTGAGE LICENSING SYS- authority has a process in place for chal- retary under section 1509, and any privilege TEM AND REGISTRY DEVELOPMENT.—To facili- lenging information contained in the Nation- arising under Federal or State law (including tate the transfer of information required by wide Mortgage Licensing System and Reg- the rules of any Federal or State court) with subsection (a)(2), the Nationwide Mortgage istry. respect to such information or material, Licensing System and Registry shall coordi- (5) The State loan originator supervisory shall continue to apply to such information nate with the Federal banking agencies, authority has established a mechanism to or material after the information or mate- through the Financial Institutions Examina- assess civil money penalties for individuals rial has been disclosed to the system. Such tion Council, and the Farm Credit Adminis- acting as mortgage originators in their State information and material may be shared tration concerning the development and op- without a valid license or registration. with all State and Federal regulatory offi- eration, by such System and Registry, of the (6) The State loan originator supervisory cials with mortgage industry oversight au- registration functionality and data require- authority has established minimum net thority without the loss of privilege or the ments for loan originators. worth or surety bonding requirements that loss of confidentiality protections provided (c) CONSIDERATION OF FACTORS AND PROCE- reflect the dollar amount of loans originated by Federal and State laws. DURES.—In establishing the registration pro- by a residential mortgage loan originator. (b) NONAPPLICABILITY OF CERTAIN REQUIRE- cedures under subsection (a) and the proto- (e) TEMPORARY EXTENSION OF PERIOD.—The MENTS.—Information or material that is sub- cols for assigning a unique identifier to a Secretary may extend, by not more than 24 ject to a privilege or confidentiality under registered loan originator, the Federal bank- months, the 1-year or 2-year period, as the subsection (a) shall not be subject to— ing agencies shall make such de minimis ex- case may be, referred to in subsection (a) for (1) disclosure under any Federal or State ceptions as may be appropriate to para- the licensing of loan originators in any State law governing the disclosure to the public of graphs (1)(A) and (2) of section 1504(a), shall under a State licensing law that meets the information held by an officer or an agency make reasonable efforts to utilize existing requirements of sections 1505 and 1506 and of the Federal Government or the respective information to minimize the burden of reg- subsection (d) if the Secretary determines State; or istering loan originators, and shall consider that such State is making a good faith effort (2) subpoena or discovery, or admission methods for automating the process to the to establish a State licensing law that meets into evidence, in any private civil action or greatest extent practicable consistent with such requirements, license mortgage origina- administrative process, unless with respect the purposes of this title. tors under such law, and register such origi- to any privilege held by the Nationwide SEC. 1508. SECRETARY OF HOUSING AND URBAN nators with the Nationwide Mortgage Li- Mortgage Licensing System and Registry or DEVELOPMENT BACKUP AUTHORITY censing System and Registry. the Secretary with respect to such informa- TO ESTABLISH A LOAN ORIGINATOR (f) CONTRACTING AUTHORITY.—The Sec- tion or material, the person to whom such LICENSING SYSTEM. retary may enter into contracts with quali- information or material pertains waives, in (a) BACKUP LICENSING SYSTEM.—If, by the fied independent parties, as necessary to effi- whole or in part, in the discretion of such end of the 1-year period, or the 2-year period ciently fulfill the obligations of the Sec- person, that privilege. in the case of a State whose legislature retary under this section. (c) COORDINATION WITH OTHER LAW.—Any meets only biennially, beginning on the date State law, including any State open record of the enactment of this title or at any time SEC. 1509. BACKUP AUTHORITY TO ESTABLISH A NATIONWIDE MORTGAGE LICENSING law, relating to the disclosure of confidential thereafter, the Secretary determines that a AND REGISTRY SYSTEM. supervisory information or any information State does not have in place by law or regu- If at any time the Secretary determines or material described in subsection (a) that lation a system for licensing and registering that the Nationwide Mortgage Licensing is inconsistent with subsection (a) shall be loan originators that meets the require- System and Registry is failing to meet the superseded by the requirements of such pro- ments of sections 1505 and 1506 and sub- requirements and purposes of this title for a vision to the extent State law provides less section (d) of this section, or does not par- comprehensive licensing, supervisory, and confidentiality or a weaker privilege. ticipate in the Nationwide Mortgage Licens- tracking system for loan originators, the (d) PUBLIC ACCESS TO INFORMATION.—This ing System and Registry, the Secretary shall Secretary shall establish and maintain such section shall not apply with respect to the provide for the establishment and mainte- a system to carry out the purposes of this information or material relating to the em- nance of a system for the licensing and reg- title and the effective registration and regu- ployment history of, and publicly adju- istration by the Secretary of loan origina- lation of loan originators. dicated disciplinary and enforcement actions tors operating in such State as State-li- against, loan originators that is included in censed loan originators. SEC. 1510. FEES. Nationwide Mortgage Licensing System and (b) LICENSING AND REGISTRATION REQUIRE- The Federal banking agencies, the Farm Registry for access by the public. MENTS.—The system established by the Sec- Credit Admininstration, the Secretary, and retary under subsection (a) for any State the Nationwide Mortgage Licensing System SEC. 1513. LIABILITY PROVISIONS. shall meet the requirements of sections 1505 and Registry may charge reasonable fees to The Secretary, any State official or agen- and 1506 for State-licensed loan originators. cover the costs of maintaining and providing cy, any Federal banking agency, or any orga- (c) UNIQUE IDENTIFIER.—The Secretary access to information from the Nationwide nization serving as the administrator of the shall coordinate with the Nationwide Mort- Mortgage Licensing System and Registry, to Nationwide Mortgage Licensing System and gage Licensing System and Registry to es- the extent that such fees are not charged to Registry or a system established by the Sec- tablish protocols for assigning a unique iden- consumers for access to such system and reg- retary under section 1509, or any officer or tifier to each loan originator licensed by the istry. employee of any such entity, shall not be Secretary as a State-licensed loan originator SEC. 1511. BACKGROUND CHECKS OF LOAN subject to any civil action or proceeding for that will facilitate electronic tracking and ORIGINATORS. monetary damages by reason of the good uniform identification of, and public access (a) ACCESS TO RECORDS.—Notwithstanding faith action or omission of any officer or em- to, the employment history of and the pub- any other provision of law, in providing iden- ployee of any such entity, while acting with- licly adjudicated disciplinary and enforce- tification and processing functions, the At- in the scope of office or employment, relat- ment actions against loan originators. torney General shall provide access to all ing to the collection, furnishing, or dissemi- (d) STATE LICENSING LAW REQUIREMENTS.— criminal history information to the appro- nation of information concerning persons For purposes of this section, the law in effect priate State officials responsible for regu- who are loan originators or are applying for in a State meets the requirements of this lating State-licensed loan originators to the licensing or registration as loan originators. subsection if the Secretary determines the extent criminal history background checks SEC. 1514. ENFORCEMENT UNDER HUD BACKUP law satisfies the following minimum require- are required under the laws of the State for LICENSING SYSTEM. ments: the licensing of such loan originators. (a) SUMMONS AUTHORITY.—The Secretary (1) A State loan originator supervisory au- (b) AGENT.—For the purposes of this sec- may— thority is maintained to provide effective su- tion and in order to reduce the points of con- (1) examine any books, papers, records, or pervision and enforcement of such law, in- tact which the Federal Bureau of Investiga- other data of any loan originator operating cluding the suspension, termination, or non- tion may have to maintain for purposes of in any State which is subject to a licensing renewal of a license for a violation of State subsection (a), the Conference of State Bank system established by the Secretary under or Federal law. Supervisors or a wholly owned subsidiary section 1508; and

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00113 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5884 CONGRESSIONAL RECORD — SENATE June 19, 2008 (2) summon any loan originator referred to later than 60 days after service of the notice loan originator if the conduct of that person in paragraph (1) or any person having posses- unless an earlier or a later date is set by the demonstrates unfitness to serve as a loan sion, custody, or care of the reports and Secretary with the consent of any respond- originator. records relating to such loan originator, to ent so served. (d) AUTHORITY OF THE SECRETARY TO AS- appear before the Secretary or any delegate (3) TEMPORARY ORDER.—Whenever the Sec- SESS MONEY PENALTIES.— of the Secretary at a time and place named retary determines that the alleged violation (1) IN GENERAL.—The Secretary may im- in the summons and to produce such books, or threatened violation specified in the no- pose a civil penalty on a loan originator op- papers, records, or other data, and to give tice instituting proceedings pursuant to erating in any State which is subject to a li- testimony, under oath, as may be relevant or paragraph (1), or the continuation thereof, is censing system established by the Secretary material to an investigation of such loan likely to result in significant dissipation or under section 1508, if the Secretary finds, on originator for compliance with the require- conversion of assets, significant harm to the record after notice and opportunity for ments of this title. consumers, or substantial harm to the public hearing, that such loan originator has vio- (b) EXAMINATION AUTHORITY.— interest prior to the completion of the pro- lated or failed to comply with any require- (1) IN GENERAL.—If the Secretary estab- ceedings, the Secretary may enter a tem- ment of this title or any regulation pre- lishes a licensing system under section 1508 porary order requiring the respondent to scribed by the Secretary under this title or for any State, the Secretary shall appoint cease and desist from the violation or threat- order issued under subsection (c). examiners for the purposes of administering ened violation and to take such action to (2) MAXIMUM AMOUNT OF PENALTY.—The such section. prevent the violation or threatened violation maximum amount of penalty for each act or (2) POWER TO EXAMINE.—Any examiner ap- and to prevent dissipation or conversion of omission described in paragraph (1) shall be pointed under paragraph (1) shall have assets, significant harm to consumers, or $25,000. power, on behalf of the Secretary, to make substantial harm to the public interest as SEC. 1515. STATE EXAMINATION AUTHORITY. any examination of any loan originator oper- the Secretary deems appropriate pending In addition to any authority allowed under ating in any State which is subject to a li- completion of such proceedings. Such an State law a State licensing agency shall censing system established by the Secretary order shall be entered only after notice and have the authority to conduct investigations under section 1508 whenever the Secretary opportunity for a hearing, unless the Sec- and examinations as follows: determines an examination of any loan origi- retary determines that notice and hearing (1) For the purposes of investigating viola- nator is necessary to determine the compli- prior to entry would be impracticable or con- tions or complaints arising under this title, ance by the originator with this title. trary to the public interest. A temporary or for the purposes of examination, the State (3) REPORT OF EXAMINATION.—Each exam- order shall become effective upon service licensing agency may review, investigate, or iner appointed under paragraph (1) shall upon the respondent and, unless set aside, examine any loan originator licensed or re- make a full and detailed report of examina- limited, or suspended by the Secretary or a quired to be licensed under this title, as tion of any loan originator examined to the court of competent jurisdiction, shall remain often as necessary in order to carry out the Secretary. effective and enforceable pending the com- purposes of this title. (4) ADMINISTRATION OF OATHS AND AFFIRMA- pletion of the proceedings. (2) Each such loan originator shall make TIONS; EVIDENCE.—In connection with exami- (4) REVIEW OF TEMPORARY ORDERS.— available upon request to the State licensing nations of loan originators operating in any (A) REVIEW BY SECRETARY.—At any time agency the books and records relating to the State which is subject to a licensing system after the respondent has been served with a operations of such originator. The State li- established by the Secretary under section temporary cease and desist order pursuant to censing agency may have access to such 1508, or with other types of investigations to books and records and interview the officers, determine compliance with applicable law paragraph (3), the respondent may apply to principals, loan originators, employees, inde- and regulations, the Secretary and exam- the Secretary to have the order set aside, pendent contractors, agents, and customers iners appointed by the Secretary may admin- limited, or suspended. If the respondent has of the licensee concerning their business. ister oaths and affirmations and examine been served with a temporary cease and de- (3) The authority of this section shall re- and take and preserve testimony under oath sist order entered without a prior hearing be- main in effect, whether such a loan origi- as to any matter in respect to the affairs of fore the Secretary, the respondent may, nator acts or claims to act under any licens- any such loan originator. within 10 days after the date on which the ing or registration law of such State, or (5) ASSESSMENTS.—The cost of conducting order was served, request a hearing on such claims to act without such authority. any examination of any loan originator oper- application and the Secretary shall hold a (4) No person subject to investigation or ating in any State which is subject to a li- hearing and render a decision on such appli- examination under this section may know- censing system established by the Secretary cation at the earliest possible time. ingly withhold, abstract, remove, mutilate, under section 1508 shall be assessed by the (B) JUDICIAL REVIEW.—Within— destroy, or secrete any books, records, com- Secretary against the loan originator to (i) 10 days after the date the respondent puter records, or other information. meet the Secretary’s expenses in carrying was served with a temporary cease and desist out such examination. order entered with a prior hearing before the SEC. 1516. REPORTS AND RECOMMENDATIONS TO CONGRESS. (c) CEASE AND DESIST PROCEEDING.— Secretary; or (a) ANNUAL REPORTS.—Not later than 1 (1) AUTHORITY OF SECRETARY.—If the Sec- (ii) 10 days after the Secretary renders a retary finds, after notice and opportunity for decision on an application and hearing under year after the date of enactment of this title, and annually thereafter, the Secretary shall hearing, that any person is violating, has paragraph (1), with respect to any temporary submit a report to Congress on the effective- violated, or is about to violate any provision cease and desist order entered without a ness of the provisions of this title, including of this title, or any regulation thereunder, prior hearing before the Secretary, legislative recommendations, if any, for with respect to a State which is subject to a the respondent may apply to the United strengthening consumer protections, enhanc- licensing system established by the Sec- States district court for the district in which ing examination standards, streamlining retary under section 1508, the Secretary may the respondent resides or has its principal communication between all stakeholders in- publish such findings and enter an order re- place of business, or for the District of Co- volved in residential mortgage loan origina- quiring such person, and any other person lumbia, for an order setting aside, limiting, tion and processing, and establishing per- that is, was, or would be a cause of the viola- or suspending the effectiveness or enforce- formance based bonding requirements for tion, due to an act or omission the person ment of the order, and the court shall have mortgage originators or institutions that knew or should have known would con- jurisdiction to enter such an order. A re- employ such brokers. tribute to such violation, to cease and desist spondent served with a temporary cease and (b) LEGISLATIVE RECOMMENDATIONS.—Not from committing or causing such violation desist order entered without a prior hearing later than 6 months after the date of enact- and any future violation of the same provi- before the Secretary may not apply to the ment of this title, the Secretary shall make sion, rule, or regulation. Such order may, in court except after hearing and decision by recommendations to Congress on legislative addition to requiring a person to cease and the Secretary on the respondent’s applica- reforms to the Real Estate Settlement Pro- desist from committing or causing a viola- tion under subparagraph (A). cedures Act of 1974, that the Secretary deems tion, require such person to comply, or to (C) NO AUTOMATIC STAY OF TEMPORARY appropriate to promote more transparent take steps to effect compliance, with such ORDER.—The commencement of proceedings disclosures, allowing consumers to better provision or regulation, upon such terms and under subparagraph (B) shall not, unless spe- shop and compare mortgage loan terms and conditions and within such time as the Sec- cifically ordered by the court, operate as a settlement costs. retary may specify in such order. Any such stay of the Secretary’s order. SEC. 1517. STUDY AND REPORTS ON DEFAULTS order may, as the Secretary deems appro- (5) AUTHORITY OF THE SECRETARY TO PRO- AND FORECLOSURES. priate, require future compliance or steps to HIBIT PERSONS FROM SERVING AS LOAN ORIGI- (a) STUDY REQUIRED.—The Secretary shall effect future compliance, either permanently NATORS.—In any cease and desist proceeding conduct an extensive study of the root or for such period of time as the Secretary under paragraph (1), the Secretary may issue causes of default and foreclosure of home may specify, with such provision or regula- an order to prohibit, conditionally or uncon- loans, using as much empirical data as is tion with respect to any loan originator. ditionally, and permanently or for such pe- available. (2) HEARING.—The notice instituting pro- riod of time as the Secretary shall deter- (b) PRELIMINARY REPORT TO CONGRESS.— ceedings pursuant to paragraph (1) shall fix a mine, any person who has violated this title Not later than 6 months after the date of en- hearing date not earlier than 30 days nor or regulations thereunder, from acting as a actment of this title, the Secretary shall

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00114 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5885

submit to Congress a preliminary report re- (b) INITIAL RENEWAL.— depository institution or a bridge depository garding the study required by this section. (1) At the request of an owner under sub- institution’’; (c) FINAL REPORT TO CONGRESS.—Not later section (a) made no later than 90 days prior (2) in subsection (e)(10)(C), by striking than 12 months after the date of enactment to a conversion, the Secretary may, to the ‘‘bridge bank’’ each place that term appears of this title, the Secretary shall submit to extent sufficient amounts are made available and inserting ‘‘bridge depository institu- Congress a final report regarding the results in appropriation Acts and notwithstanding tion’’; of the study required by this section, which any other law, treat the contemplated re- (3) in subsection (m)— shall include any recommended legislation sulting contract as if such contract were eli- (A) in the subsection heading, by striking relating to the study, and recommendations gible for initial renewal under section 524(a) ‘‘BANKS’’ and inserting ‘‘DEPOSITORY INSTITU- for best practices and for a process to pro- of the MultiFamily Assisted Housing Reform TIONS’’; vide targeted assistance to populations with and Affordability Act of 1997 (42 U.S.C. 1437f (B) by striking ‘‘new bank’’ each place that the highest risk of potential default or fore- note) (‘‘MAHRA’’) (42 U.S.C. 1437f note). term appears and inserting ‘‘new depository closure. (2) A request by an owner pursuant to para- institution’’; TITLE VI—MISCELLANEOUS graph (1) shall be upon such terms and condi- (C) by striking ‘‘such bank’’ each place SEC. 1601. STUDY AND REPORTS ON GUARANTEE tions as the Secretary may require. that term appears and inserting ‘‘such depos- FEES. (c) RESULTING CONTRACT.—The resulting itory institution’’; (a) ONGOING STUDY OF FEES.—The Director contract shall— (D) in paragraph (1), by inserting ‘‘or Fed- shall conduct an ongoing study of fees (1) be subject to section 524(a) of MAHRA eral savings association’’ after ‘‘national charged by enterprises for guaranteeing a (42 U.S.C. 1437f note); bank’’; mortgage. (2) be considered for all purposes a contract (E) in paragraph (6), by striking ‘‘only (b) COLLECTION OF DATA.—The Director that has been renewed under section 524(a) of bank’’ and inserting ‘‘only depository insti- shall, by regulation or order, establish proce- MAHRA (42 U.S.C. 1437f note) for a term not tution’’; dures for the collection of data from enter- to exceed 20 years; (F) in paragraph (9), by inserting ‘‘or the prises for purposes of this subsection, includ- (3) be subsequently renewable at the re- Director of the Office of Thrift Supervision, ing the format and the process for collection quest of an owner, under any renewal option as appropriate’’ after ‘‘Comptroller of the of such data. for which the project is eligible under Currency’’; (c) REPORTS TO CONGRESS.—The Director MAHRA (42 U.S.C. 1437f note); (G) in paragraph (15), by striking ‘‘, but in shall annually submit a report to Congress (4) contain provisions limiting distribu- on the results of the study conducted under no event’’ and all that follows through ‘‘lo- tions, as the Secretary determines appro- cated’’; subsection (a), based on the aggregated data priate, not to exceed 10 percent of the initial collected under subsection (a) for the subject (H) in paragraph (16)— investment of the owner; (i) by inserting ‘‘or the Director of the Of- year, regarding the amount of such fees and (5) be subject to the availability of suffi- the criteria used by the enterprises to deter- fice of Thrift Supervision, as appropriate,’’ cient amounts in appropriation Acts; and after ‘‘Comptroller of the Currency’’ each mine such fees. (6) be subject to such other terms and con- (d) CONTENTS OF REPORTS.—The reports re- place that term appears; ditions as the Secretary considers appro- quired under subsection (c) shall identify and (ii) by striking ‘‘the bank’’ each place that priate. analyze— term appears and inserting ‘‘the depository (d) INCOME TARGETING.—To the extent that (1) the factors considered in determining institution’’; assisted dwelling units, subject to the result- the amount of the guarantee fees charged; (iii) by inserting ‘‘or Federal savings asso- ing contract under subsection (a), serve low- (2) the total revenue earned by the enter- ciation’’ after ‘‘national bank’’ each place income families, as defined in section 3(b)(2) prises from guarantee fees; that term appears; of the Act (42 U.S.C. 1437a(b)(2)) the units (3) the total costs incurred by the enter- (iv) by inserting ‘‘or Federal savings asso- shall be considered to be in compliance with prises for providing guarantees; ciations’’ after ‘‘national banks’’; and all income targeting requirements under the (4) the average guarantee fee charged by (v) by striking ‘‘Such bank’’ and inserting Act (42 U.S.C. 1437 et seq.). the enterprises; ‘‘Such depository institution’’; and (e) TENANT ELIGIBILITY.—Notwithstanding (5) an analysis of any increase or decrease (I) in paragraph (18), by inserting ‘‘or the any other provision of law, each family re- in guarantee fees from the preceding year; Director of the Office of Thrift Supervision, siding in an assisted dwelling unit on the (6) a breakdown of the revenue and costs as appropriate,’’ after ‘‘Comptroller of the date of conversion of a contract under this associated with providing guarantees, based Currency’’ each place that term appears; section, subject to the resulting contract on product type and risk classifications; and (4) in subsection (n)— under subsection (a), shall be considered to (7) a breakdown of guarantee fees charged (A) in the subsection heading, by striking meet the applicable requirements for income based on asset size of the originator and the ‘‘BANKS’’ and inserting ‘‘DEPOSITORY INSTITU- eligibility and occupancy. number of loans sold or transferred to an en- TIONS’’; (f) DEFINITIONS.—As used in this section— terprise. (B) by striking ‘‘bridge bank’’ each place (1) the term ‘‘Secretary’’ means the Sec- (e) PROTECTION OF INFORMATION.—Nothing that term appears and inserting ‘‘bridge de- in this section may be construed to require retary of Housing and Urban Development; pository institution’’; or authorize the Director to publicly disclose (2) the term ‘‘conversion’’ means the ac- (C) by striking ‘‘bridge banks’’ each place information that is confidential or propri- tion under which a contract for project-based that term appears (other than in paragraph etary. rental assistance under section 8 of the Act (1)(A)) and inserting ‘‘bridge depository in- and a Rental Assistance Payment contract SEC. 1602. STUDY AND REPORT ON DEFAULT stitutions’’; RISK EVALUATION. become a contract for project-based rental (D) by striking ‘‘bridge bank’s’’ each place (a) STUDY.—The Director shall conduct a assistance under section 8 of the Act (42 that term appears and inserting ‘‘bridge de- study of ways to improve the overall default U.S.C. 1437f) pursuant to subsection (a); pository institutions’’; risk evaluation used with respect to residen- (3) the term ‘‘resulting contract’’ means (E) by striking ‘‘insured bank’’ each place tial mortgage loans. Particular attention the new contract after a conversion pursuant that term appears and inserting ‘‘insured de- shall be paid to the development and utiliza- to subsection (a); and pository institution’’; tion of processes and technologies that pro- (4) the term ‘‘assisted dwelling unit’’ (F) by striking ‘‘insured banks’’ each place vide a means to standardize the measure- means a dwelling unit in a multifamily hous- that term appears and inserting ‘‘insured de- ment of risk. ing project that exceeds 5,000 units that, on pository institutions’’; (b) REPORT.—The Director shall submit a the date of conversion of a contract under (G) by striking ‘‘such bank’’ each place report on the study conducted under this this section, is subject to a contract for that term appears (other than in paragraph section to the Committee on Banking, Hous- project-based rental assistance under section (4)(J)) and inserting ‘‘such depository insti- ing, and Urban Affairs of the Senate and the 8 of the Act (42 U.S.C. 1437f) or a Rental As- tution’’; Committee on Financial Services of the sistance Payment contract. (H) by striking ‘‘the bank’’ each place that House of Representatives, not later than 1 SEC. 1604. BRIDGE DEPOSITORY INSTITUTIONS. term appears and inserting ‘‘the depository year after the date of enactment of this Act. (a) IN GENERAL.—Section 11 of the Federal institution’’; SEC. 1603. CONVERSION OF HUD CONTRACTS. Deposit Insurance Act (12 U.S.C. 1821) is (I) in paragraph (1)(A)— (a) IN GENERAL.—Notwithstanding any amended— (i) by inserting ‘‘, with respect to 1 or more other provision of law, the Secretary may, at (1) in subsection (d)(2)— insured banks, or the Director of the Office the request of an owner of a multifamily (A) in subsection (F), by striking ‘‘as re- of Thrift Supervision, with respect to 1 or housing project that exceeds 5,000 units to ceiver’’ and all that follows through clause more insured savings associations,’’ after which a contract for project-based rental as- (ii) and inserting the following: ‘‘as receiver, ‘‘Comptroller of the Currency’’; sistance under section 8 of the United States with respect to any insured depository insti- (ii) by inserting ‘‘or Federal savings asso- Housing Act of 1937 (‘‘Act’’) (42 U.S.C. 1437f) tution, organize a new depository institution ciations, as appropriate,’’ after ‘‘national and a Rental Assistance Payment contract is under subsection (m) or a bridge depository banks’’; subject, convert such contracts to a contract institution under subsection (n).’’; (iii) by inserting ‘‘or Federal savings asso- for project-based rental assistance under sec- (B) in subparagraph (G), by striking ‘‘new ciations, as applicable,’’ after ‘‘banking asso- tion 8 of the Act. bank or a bridge bank’’ and inserting ‘‘new ciations’’; and

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00115 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5886 CONGRESSIONAL RECORD — SENATE June 19, 2008 (iv) by striking ‘‘as bridge banks’’ and in- striking ‘‘bridge bank’’ and inserting ‘‘bridge SEC. 2113. CASH INVESTMENT REQUIREMENT serting ‘‘as ‘bridge depository institutions’’’; depository institution’’. AND PROHIBITION OF SELLER- FUNDED DOWN PAYMENT ASSIST- (J) in paragraph (1)(B)— (3) TITLE 11.—Section 783 of title 11, United ANCE. (i) by striking ‘‘bank or banks’’ each place States Code, is amended by striking ‘‘bridge Paragraph (9) of section 203(b) of the Na- that term appears and inserting ‘‘depository bank’’ and inserting ‘‘bridge depository in- tional Housing Act (12 U.S.C. 1709(b)(9)) is institution or institutions’’; stitution’’. amended to read as follows: (ii) by striking ‘‘of a bank’’; and (4) TITLE 26.—Section 414(l)(2)(G) of the In- ‘‘(9) CASH INVESTMENT REQUIREMENT.— (iii) by striking ‘‘of that bank’’; ternal Revenue Code of 1986, is amended by ‘‘(A) IN GENERAL.—A mortgage insured (K) in paragraph (1)(E), by inserting before striking ‘‘bridge bank’’ and inserting ‘‘bridge under this section shall be executed by a the period ‘‘, in the case of 1 or more insured depository institution’’. mortgagor who shall have paid, in cash, on banks, and as a Federal savings association, SEC. 1605. SENSE OF THE SENATE. account of the property an amount equal to in the case of 1 or more insured savings asso- It is the sense of the Senate that in imple- not less than 3.5 percent of the appraised ciations’’; menting or carrying out any provision of value of the property or such larger amount (L) in paragraph (2)— this Act, or any amendment made by this as the Secretary may determine. (i) in subparagraph by inserting ‘‘or Fed- Act, the Senate supports a policy of non- ‘‘(B) FAMILY MEMBERS.—For purposes of eral savings association’’ after ‘‘national interference regarding local government re- this paragraph, the Secretary shall consider bank’’ each place that term appears; and quirements that the holder of a foreclosed as cash or its equivalent any amounts bor- (ii) by inserting ‘‘or the Director of the Of- property maintain that property. rowed from a family member (as such term is fice of Thrift Supervision’’ after ‘‘Comp- DIVISION B—FORECLOSURE PREVENTION defined in section 201), subject only to the re- troller of the Currency’’; SECTION 2001. SHORT TITLE. quirements that, in any case in which the re- (M) in paragraph (4)— This division may be cited as the ‘‘Fore- payment of such borrowed amounts is se- (i) in subparagraph (C), by striking ‘‘under closure Prevention Act of 2008’’. cured by a lien against the property, that— section 5138 of the Revised Statutes or any SEC. 2002. EMERGENCY DESIGNATION. ‘‘(i) such lien shall be subordinate to the other’’ and inserting ‘‘under any’’; For purposes of Senate enforcement, all mortgage; and (ii) by inserting ‘‘and the Director of the provisions of this division are designated as ‘‘(ii) the sum of the principal obligation of Office of Thrift Supervision, as appropriate,’’ emergency requirements and necessary to the mortgage and the obligation secured by after ‘‘Comptroller of the Currency’’ each meet emergency needs pursuant to section such lien may not exceed 100 percent of the place that term appears; 204 of S. Con. Res. 21 (110th Congress), the appraised value of the property. (iii) in subparagraph (D), by striking concurrent resolution on the budget for fis- ‘‘(C) PROHIBITED SOURCES.—In no case shall ‘‘bank’s’’ and inserting ‘‘depository institu- cal year 2008. the funds required by subparagraph (A) con- tion’s’’; and sist, in whole or in part, of funds provided by TITLE I—FHA MODERNIZATION ACT OF (iv) in subparagraph (F), by inserting be- any of the following parties before, during, 2008 fore the period ‘‘or Federal home loan bank’’; or after closing of the property sale: (N) in paragraph (8)— SEC. 2101. SHORT TITLE. ‘‘(i) The seller or any other person or enti- (i) in subparagraph (A), by striking ‘‘the This title may be cited as the ‘‘FHA Mod- ty that financially benefits from the trans- banks’’ and inserting ‘‘the depository insti- ernization Act of 2008’’. action. tutions’’; Subtitle A—Building American ‘‘(ii) Any third party or entity that is re- (ii) in subparagraph (B), by striking Homeownership imbursed, directly or indirectly, by any of ‘‘bank’s’’ and inserting ‘‘depository institu- SEC. 2111. SHORT TITLE. the parties described in clause (i).’’. tion’s’’; This subtitle may be cited as the ‘‘Building SEC. 2114. MORTGAGE INSURANCE PREMIUMS. (O) in paragraph (11), by inserting ‘‘or a American Homeownership Act of 2008’’. Section 203(c)(2) of the National Housing Federal savings association, as the case may SEC. 2112. MAXIMUM PRINCIPAL LOAN OBLIGA- Act (12 U.S.C. 1709(c)(2)) is amended— be,’’ after ‘‘national bank’’ each place that TION. (1) in the matter preceding subparagraph term appears; (a) IN GENERAL.—Paragraph (2) of section (A), by striking ‘‘or of the General Insurance (P) in paragraph (12)— 203(b)(2) of the National Housing Act (12 Fund’’ and all that follows through ‘‘section (i) by inserting ‘‘or the Director of the Of- U.S.C. 1709(b)(2)) is amended— 234(c),,’’; and fice of Thrift Supervision, as appropriate,’’ (1) by amending subparagraphs (A) and (B) (2) in subparagraph (A)— after ‘‘Comptroller of the Currency’’ each to read as follows: (A) by striking ‘‘2.25 percent’’ and insert- place that term appears; and ‘‘(A) not to exceed the lesser of— ing ‘‘3 percent’’; and (ii) by inserting ‘‘or Federal savings asso- ‘‘(i) in the case of a 1-family residence, 110 (B) by striking ‘‘2.0 percent’’ and inserting ciations, as appropriate’’ after ‘‘national percent of the median 1-family house price in ‘‘2.75 percent’’. banks’’; and the area, as determined by the Secretary; SEC. 2115. REHABILITATION LOANS. (Q) in paragraph (13), by striking ‘‘single and in the case of a 2-, 3-, or 4-family resi- Subsection (k) of section 203 of the Na- bank’’ and inserting ‘‘single depository insti- dence, the percentage of such median price tional Housing Act (12 U.S.C. 1709(k)) is tution’’. that bears the same ratio to such median amended— (b) OTHER CONFORMING AMENDMENTS.— price as the dollar amount limitation deter- (1) in paragraph (1), by striking ‘‘on’’ and (1) FEDERAL DEPOSIT INSURANCE ACT.—The mined under section 305(a)(2) of the Federal all that follows through ‘‘1978’’; and Federal Deposit Insurance Act (12 U.S.C. 1811 Home Loan Mortgage Corporation Act (12 (2) in paragraph (5)— et seq.) is amended— U.S.C. 1454(a)(2)) for a 2-, 3-, or 4-family resi- (A) by striking ‘‘General Insurance Fund’’ (A) in section 3 (12 U.S.C. 1813), by striking dence, respectively, bears to the dollar the first place it appears and inserting ‘‘Mu- subsection (i) and inserting the following: amount limitation determined under such tual Mortgage Insurance Fund’’; and ‘‘(i) NEW DEPOSITORY INSTITUTION AND section for a 1-family residence; or (B) in the second sentence, by striking the BRIDGE DEPOSITORY INSTITUTION DEFINED.— ‘‘(ii) 150 percent of the dollar amount limi- comma and all that follows through ‘‘Gen- ‘‘(1) NEW DEPOSITORY INSTITUTION.—The tation determined under section 305(a)(2) of eral Insurance Fund’’. term ‘new depository institution’ means a the Federal Home Loan Mortgage Corpora- SEC. 2116. DISCRETIONARY ACTION. new national bank or Federal savings asso- tion Act for a residence of applicable size, The National Housing Act is amended— ciation, other than a bridge depository insti- except that the dollar amount limitation in (1) in subsection (e) of section 202 (12 U.S.C. tution, organized by the Corporation in ac- effect under this subparagraph for any size 1708(e))— cordance with section 11(m). residence for any area may not be less than (A) in paragraph (3)(B), by striking ‘‘sec- ‘‘(2) BRIDGE DEPOSITORY INSTITUTION.—The the greater of: (I) the dollar amount limita- tion 202(e) of the National Housing Act’’ and term ‘bridge depository institution’ means a tion in effect under this section for the area inserting ‘‘this subsection’’; and new national bank or Federal savings asso- on October 21, 1998; or (II) 65 percent of the (B) by redesignating such subsection as ciation organized by the Corporation in ac- dollar amount limitation determined under subsection (f); cordance with section 11(n).’’; such section 305(a)(2) for a residence of the (2) by striking paragraph (4) of section (B) in section 10(d)(5)(B) (12 U.S.C. applicable size; and 203(s) (12 U.S.C. 1709(s)(4)) and inserting the 1820(d)(5)(B)), by striking ‘‘bridge bank’’ and ‘‘(B) not to exceed 100 percent of the ap- following new paragraph: inserting ‘‘bridge depository institution’’; praised value of the property.’’; and ‘‘(4) the Secretary of Agriculture;’’; and (C) in section 12 (12 U.S.C. 1822), by strik- (2) in the matter following subparagraph (3) by transferring subsection (s) of section ing ‘‘new bank’’ each place that term ap- (B), by striking the second sentence (relating 203 (as amended by paragraph (2) of this sec- pears and inserting ‘‘new depository institu- to a definition of ‘‘average closing cost’’) and tion) to section 202, inserting such sub- tion’’; and all that follows through ‘‘section 3103A(d) of section after subsection (d) of section 202, (D) in section 38(j)(2) (12 U.S.C. 1831o(j)(2)), title 38, United States Code.’’. and redesignating such subsection as sub- by striking ‘‘bridge bank’’ and inserting (b) EFFECTIVE DATE.—The amendments section (e). ‘‘bridge depository institution’’. made by subsection (a) shall take effect upon SEC. 2117. INSURANCE OF CONDOMINIUMS. (2) FEDERAL CREDIT UNION ACT.—Section the expiration of the date described in sec- (a) IN GENERAL.—Section 234 of the Na- 207(c)(10)(C)(i) of the Federal Credit Union tion 202(a) of the Economic Stimulus Act of tional Housing Act (12 U.S.C. 1715y) is Act (12 U.S.C. 1787(c)(10)(C)(i)) is amended by 2008 (Public Law 110–185). amended—

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00116 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5887 (1) in subsection (c), in the first sentence— of the risk characteristics of loans based not SEC. 2119. HAWAIIAN HOME LANDS AND INDIAN (A) by striking ‘‘and’’ before ‘‘(2)’’; and only on borrower information and perform- RESERVATIONS. (B) by inserting before the period at the ance, but on risks associated with loans (a) HAWAIIAN HOME LANDS.—Section 247(c) end the following: ‘‘, and (3) the project has originated or funded by various entities or fi- of the National Housing Act (12 U.S.C. 1715z– a blanket mortgage insured by the Secretary nancial institutions. 12(c)) is amended— under subsection (d)’’; and ‘‘(5) QUARTERLY REPORTS.—During each fis- (1) by striking ‘‘General Insurance Fund (2) in subsection (g), by striking ‘‘, except cal year, the Secretary shall submit a report established in section 519’’ and inserting that’’ and all that follows and inserting a pe- to the Congress for each calendar quarter, ‘‘Mutual Mortgage Insurance Fund’’; and riod. which shall specify for mortgages that are (2) in the second sentence, by striking ‘‘(1) (b) DEFINITION OF MORTGAGE.—Section obligations of the Fund— all references’’ and all that follows through 201(a) of the National Housing Act (12 U.S.C. ‘‘(A) the cumulative volume of loan guar- ‘‘and (2)’’. 1707(a)) is amended— (b) INDIAN RESERVATIONS.—Section 248(f) of antee commitments that have been made (1) before ‘‘a first mortgage’’ insert ‘‘(A)’’; the National Housing Act (12 U.S.C. 1715z– during such fiscal year through the end of (2) by striking ‘‘or on a leasehold (1)’’ and 13(f)) is amended— the quarter for which the report is sub- inserting ‘‘(B) a first mortgage on a lease- (1) by striking ‘‘General Insurance Fund’’ mitted; hold on real estate (i)’’; the first place it appears through ‘‘519’’ and ‘‘(B) the types of loans insured, categorized (3) by striking ‘‘or (2)’’ and inserting ‘‘, or inserting ‘‘Mutual Mortgage Insurance (ii)’’; and by risk; Fund’’; and (4) by inserting before the semicolon the ‘‘(C) any significant changes between ac- (2) in the second sentence, by striking ‘‘(1) following: ‘‘, or (C) a first mortgage given to tual and projected claim and prepayment ac- all references’’ and all that follows through secure the unpaid purchase price of a fee in- tivity; ‘‘and (2)’’. ‘‘(D) projected versus actual loss rates; and terest in, or long-term leasehold interest in, SEC. 2120. CONFORMING AND TECHNICAL real estate consisting of a one-family unit in ‘‘(E) updated projections of the annual sub- AMENDMENTS. sidy rates to ensure that increases in risk to a multifamily project, including a project in (a) REPEALS.—The following provisions of which the dwelling units are attached, or are the Fund are identified and mitigated by ad- the National Housing Act are repealed: manufactured housing units, semi-detached, justments to underwriting standards, pro- (1) Subsection (i) of section 203 (12 U.S.C. or detached, and an undivided interest in the gram participation, or premiums, and the fi- 1709(i)). common areas and facilities which serve the nancial soundness of the Fund is maintained. (2) Subsection (o) of section 203 (12 U.S.C. project’’. The first quarterly report under this para- 1709(o)). (c) DEFINITION OF REAL ESTATE.—Section graph shall be submitted on the last day of (3) Subsection (p) of section 203 (12 U.S.C. 201 of the National Housing Act (12 U.S.C. the first quarter of fiscal year 2008, or on the 1709(p)). 1707) is amended by adding at the end the fol- last day of the first full calendar quarter fol- (4) Subsection (q) of section 203 (12 U.S.C. lowing new subsection: lowing the enactment of the Building Amer- 1709(q)). ‘‘(g) The term ‘real estate’ means land and ican Homeownership Act of 2008, whichever (5) Section 222 (12 U.S.C. 1715m). all natural resources and structures perma- is later. (6) Section 237 (12 U.S.C. 1715z–2). nently affixed to the land, including residen- (7) Section 245 (12 U.S.C. 1715z–10). tial buildings and stationary manufactured ‘‘(6) ADJUSTMENT OF PREMIUMS.—If, pursu- ant to the independent actuarial study of the (b) DEFINITION OF AREA.—Section housing. The Secretary may not require, for 203(u)(2)(A) of the National Housing Act (12 treatment of any land or other property as Fund required under paragraph (4), the Sec- U.S.C. 1709(u)(2)(A)) is amended by striking real estate for purposes of this title, that retary determines that the Fund is not meet- ‘‘shall’’ and all that follows and inserting such land or property be treated as real es- ing the operational goals established under ‘‘means a metropolitan statistical area as es- tate for purposes of State taxation.’’. paragraph (7) or there is a substantial prob- ability that the Fund will not maintain its tablished by the Office of Management and SEC. 2118. MUTUAL MORTGAGE INSURANCE Budget;’’. FUND. established target subsidy rate, the Sec- (c) DEFINITION OF STATE.—Section 201(d) of (a) IN GENERAL.—Subsection (a) of section retary may either make programmatic ad- the National Housing Act (12 U.S.C. 1707(d)) 202 of the National Housing Act (12 U.S.C. justments under this title as necessary to re- is amended by striking ‘‘the Trust Territory 1708(a)) is amended to read as follows: duce the risk to the Fund, or make appro- of the Pacific Islands’’ and inserting ‘‘the ‘‘(a) MUTUAL MORTGAGE INSURANCE FUND.— priate premium adjustments. Commonwealth of the Northern Mariana Is- ‘‘(1) ESTABLISHMENT.—Subject to the provi- ‘‘(7) OPERATIONAL GOALS.—The operational lands’’. sions of the Federal Credit Reform Act of goals for the Fund are— 1990, there is hereby created a Mutual Mort- ‘‘(A) to minimize the default risk to the SEC. 2121. INSURANCE OF MORTGAGES. gage Insurance Fund (in this title referred to Fund and to homeowners by among other ac- Subsection (n)(2) of section 203 of the Na- as the ‘Fund’), which shall be used by the tions instituting fraud prevention quality tional Housing Act (12 U.S.C. 1709(n)(2)) is Secretary to carry out the provisions of this control screening not later than 18 months amended— title with respect to mortgages insured after the date of enactment of the Building (1) in subparagraph (A), by inserting ‘‘or subordinate mortgage or’’ before ‘‘lien under section 203. The Secretary may enter American Homeownership Act of 2008; and given’’; and into commitments to guarantee, and may ‘‘(B) to meet the housing needs of the bor- (2) in subparagraph (C), by inserting ‘‘or guarantee, such insured mortgages. rowers that the single family mortgage in- subordinate mortgage or’’ before ‘‘lien’’. ‘‘(2) LIMIT ON LOAN GUARANTEES.—The au- surance program under this title is designed thority of the Secretary to enter into com- to serve.’’. SEC. 2122. HOME EQUITY CONVERSION MORT- mitments to guarantee such insured mort- GAGES. gages shall be effective for any fiscal year (b) OBLIGATIONS OF FUND.—The National (a) IN GENERAL.—Section 255 of the Na- only to the extent that the aggregate origi- Housing Act is amended as follows: tional Housing Act (12 U.S.C. 1715z–20) is nal principal loan amount under such mort- (1) HOMEOWNERSHIP VOUCHER PROGRAM amended— gages, any part of which is guaranteed, does MORTGAGES.—In section 203(v) (12 U.S.C. (1) in subsection (b)(2), insert ‘‘ ‘real es- not exceed the amount specified in appro- 1709(v))— tate,’’’ after ‘‘ ‘mortgagor’,’’; priations Acts for such fiscal year. (A) by striking ‘‘Notwithstanding section (2) by amending subsection (d)(1) to read as ‘‘(3) FIDUCIARY RESPONSIBILITY.—The Sec- 202 of this title, the’’ and inserting ‘‘The’’; follows: retary has a responsibility to ensure that the and ‘‘(1) have been originated by a mortgagee Mutual Mortgage Insurance Fund remains fi- (B) by striking ‘‘General Insurance Fund’’ approved by the Secretary;’’; nancially sound. the first place such term appears and all that (3) by amending subsection (d)(2)(B) to read ‘‘(4) ANNUAL INDEPENDENT ACTUARIAL follows through the end of the subsection as follows: STUDY.—The Secretary shall provide for an and inserting ‘‘Mutual Mortgage Insurance ‘‘(B) has received adequate counseling, as independent actuarial study of the Fund to Fund.’’. provided in subsection (f), by an independent be conducted annually, which shall analyze (2) HOME EQUITY CONVERSION MORTGAGES.— third party that is not, either directly or in- the financial position of the Fund. The Sec- Section 255(i)(2)(A) of the National Housing directly, associated with or compensated by retary shall submit a report annually to the Act (12 U.S.C. 1715z–20(i)(2)(A)) is amended by a party involved in— Congress describing the results of such study striking ‘‘General Insurance Fund’’ and in- ‘‘(i) originating or servicing the mortgage; and assessing the financial status of the serting ‘‘Mutual Mortgage Insurance Fund’’. ‘‘(ii) funding the loan underlying the mort- Fund. The report shall recommend adjust- gage; or ments to underwriting standards, program (c) CONFORMING AMENDMENTS.—The Na- ‘‘(iii) the sale of annuities, investments, participation, or premiums, if necessary, to tional Housing Act is amended— long-term care insurance, or any other type ensure that the Fund remains financially (1) in section 205 (12 U.S.C. 1711), by strik- of financial or insurance product;’’; sound. The report shall also include an eval- ing subsections (g) and (h); and (4) in subsection (f)— uation of the quality control procedures and (2) in section 519(e) (12 U.S.C. 1735c(e)), by (A) by striking ‘‘(f) INFORMATION SERVICES accuracy of information utilized in the proc- striking ‘‘203(b)’’ and all that follows FOR MORTGAGORS.—’’ and inserting ‘‘(f) COUN- ess of underwriting loans guaranteed by the through ‘‘203(i)’’ and inserting ‘‘203, except as SELING SERVICES AND INFORMATION FOR Fund. Such evaluation shall include a review determined by the Secretary’’. MORTGAGORS.—’’; and

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00117 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5888 CONGRESSIONAL RECORD — SENATE June 19, 2008 (B) by amending the matter preceding mortgage to be insured under this section (i) mortgage insurance premiums charged paragraph (1) to read as follows: ‘‘The Sec- shall be approved by the Secretary. under the program; retary shall provide or cause to be provided ‘‘(o) PROHIBITION AGAINST REQUIREMENTS (ii) up-front fees charged under the pro- adequate counseling for the mortgagor, as TO PURCHASE ADDITIONAL PRODUCTS.—The gram; and described in subsection (d)(2)(B). Such coun- mortgagee or any other party shall not be (iii) margin rates charged under the pro- seling shall be provided by counselors that required by the mortgagor or any other gram. meet qualification standards and follow uni- party to purchase an insurance, annuity, or (4) TIMING OF REPORT.—Not later than 12 form counseling protocols. The qualification other additional product as a requirement or months after the date of the enactment of standards and counseling protocols shall be condition of eligibility for insurance under this title, the Comptroller General shall sub- established by the Secretary within 12 subsection (c). mit a report to the Committee on Banking, months of the date of enactment of the ‘‘(p) STUDY TO DETERMINE CONSUMER PRO- Housing, and Urban Affairs of the Senate and Building American Homeownership Act of TECTIONS AND UNDERWRITING STANDARDS.— the Committee on Financial Services of the 2008. The protocols shall require a qualified The Secretary shall conduct a study to ex- House of Representatives setting forth the counselor to discuss with each mortgagor in- amine and determine appropriate consumer results and conclusions of the study required formation which shall include—’’ protections and underwriting standards to under paragraph (1). ensure that the purchase of products referred (5) in subsection (g), by striking ‘‘estab- SEC. 2123. ENERGY EFFICIENT MORTGAGES PRO- lished under section 203(b)(2)’’ and all that to in subsection (o) is appropriate for the GRAM. follows through ‘‘located’’ and inserting consumer. In conducting such study, the Section 106(a)(2) of the Energy Policy Act ‘‘limitation established under section Secretary shall consult with consumer advo- of 1992 (42 U.S.C. 12712 note) is amended— 305(a)(2) of the Federal Home Loan Mortgage cates (including recognized experts in con- (1) by amending subparagraph (C) to read Corporation Act for a 1-family residence’’; sumer protection), industry representatives, as follows: (6) by striking subsection (l); representatives of counseling organizations, ‘‘(C) COSTS OF IMPROVEMENTS.—The cost of (7) by redesignating subsection (m) as sub- and other interested parties.’’. cost-effective energy efficiency improve- section (l); (b) MORTGAGES FOR COOPERATIVES.—Sub- ments shall not exceed the greater of— (8) by amending subsection (l), as so redes- section (b) of section 255 of the National ‘‘(i) 5 percent of the property value (not to ignated, to read as follows: Housing Act (12 U.S.C. 1715z–20(b)) is amend- exceed 5 percent of the limit established ‘‘(l) FUNDING FOR COUNSELING.—The Sec- ed— under section 203(b)(2)(A)) of the National retary may use a portion of the mortgage in- (1) in paragraph (4)— Housing Act (12 U.S.C. 1709(b)(2)(A); or surance premiums collected under the pro- (A) by inserting ‘‘a first or subordinate ‘‘(ii) 2 percent of the limit established gram under this section to adequately fund mortgage or lien’’ before ‘‘on all stock’’; under section 203(b)(2)(B) of such Act.’’; and the counseling and disclosure activities re- (B) by inserting ‘‘unit’’ after ‘‘dwelling’’; (2) by adding at the end the following: quired under subsection (f), including coun- and ‘‘(D) LIMITATION.—In any fiscal year, the seling for those homeowners who elect not to (C) by inserting ‘‘a first mortgage or first aggregate number of mortgages insured pur- take out a home equity conversion mort- lien’’ before ‘‘on a leasehold’’; and suant to this section may not exceed 5 per- gage, provided that the use of such funds is (2) in paragraph (5), by inserting ‘‘a first or cent of the aggregate number of mortgages based upon accepted actuarial principles.’’; subordinate lien on’’ before ‘‘all stock’’. for 1- to 4-family residences insured by the (c) LIMITATION ON ORIGINATION FEES.—Sec- and Secretary of Housing and Urban Develop- tion 255 of the National Housing Act (12 (9) by adding at the end the following new ment under title II of the National Housing U.S.C. 1715z–20), as amended by the preceding subsection: Act (12 U.S.C. 1707 et seq.) during the pre- ‘‘(m) AUTHORITY TO INSURE HOME PUR- provisions of this section, is further amended ceding fiscal year.’’. CHASE MORTGAGE.— by adding at the end the following new sub- SEC. 2124. PILOT PROGRAM FOR AUTOMATED ‘‘(1) IN GENERAL.—Notwithstanding any section: PROCESS FOR BORROWERS WITH- other provision of this section, the Secretary ‘‘(r) LIMITATION ON ORIGINATION FEES.—The OUT SUFFICIENT CREDIT HISTORY. may insure, upon application by a mort- Secretary shall establish limits on the origi- (a) ESTABLISHMENT.—Title II of the Na- gagee, a home equity conversion mortgage nation fee that may be charged to a mort- tional Housing Act (12 U.S.C. 1707 et seq.) is upon such terms and conditions as the Sec- gagor under a mortgage insured under this amended by adding at the end the following retary may prescribe, when the home equity section, which limitations shall— new section: conversion mortgage will be used to pur- ‘‘(1) equal 1.5 percent of the maximum ‘‘SEC. 257. PILOT PROGRAM FOR AUTOMATED chase a 1- to 4-family dwelling unit, one unit claim amount of the mortgage unless ad- PROCESS FOR BORROWERS WITH- of which the mortgagor will occupy as a pri- justed thereafter on the basis of— OUT SUFFICIENT CREDIT HISTORY. mary residence, and to provide for any fu- ‘‘(A) the costs to the mortgagor; and ‘‘(a) ESTABLISHMENT.—The Secretary shall ture payments to the mortgagor, based on ‘‘(B) the impact of such fees on the reverse carry out a pilot program to establish, and available equity, as authorized under sub- mortgage market; make available to mortgagees, an automated section (d)(9). ‘‘(2) be subject to a minimum allowable process for providing alternative credit rat- ‘‘(2) LIMITATION ON PRINCIPAL OBLIGATION.— amount; ing information for mortgagors and prospec- A home equity conversion mortgage insured ‘‘(3) provide that the origination fee may tive mortgagors under mortgages on 1- to 4- pursuant to paragraph (1) shall involve a be fully financed with the mortgage; family residences to be insured under this principal obligation that does not exceed the ‘‘(4) include any fees paid to correspondent title who have insufficient credit histories dollar amount limitation determined under mortgagees approved by the Secretary; and for determining their creditworthiness. Such section 305(a)(2) of the Federal Home Loan ‘‘(5) have the same effective date as sub- alternative credit rating information may Mortgage Corporation Act for a 1-family res- section (m)(2) regarding the limitation on include rent, utilities, and insurance pay- idence. principal obligation.’’. ment histories, and such other information ‘‘(n) REQUIREMENTS ON MORTGAGE ORIGINA- (d) STUDY REGARDING PROGRAM COSTS AND as the Secretary considers appropriate. TORS.— CREDIT AVAILABILITY.— ‘‘(b) SCOPE.—The Secretary may carry out ‘‘(1) IN GENERAL.—The mortgagee and any (1) IN GENERAL.—The Comptroller General the pilot program under this section on a other party that participates in the origina- of the United States shall conduct a study limited basis or scope, and may consider lim- tion of a mortgage to be insured under this regarding the costs and availability of credit iting the program to first-time homebuyers. section shall— under the home equity conversion mortgages ‘‘(c) LIMITATION.—In any fiscal year, the ‘‘(A) not participate in, be associated with, for elderly homeowners program under sec- aggregate number of mortgages insured pur- suant to the automated process established or employ any party that participates in or tion 255 of the National Housing Act (12 under this section may not exceed 5 percent is associated with any other financial or in- U.S.C. 1715z–20) (in this subsection referred of the aggregate number of mortgages for 1- surance activity; or to as the ‘‘program’’). to 4-family residences insured by the Sec- ‘‘(B) demonstrate to the Secretary that the (2) PURPOSE.—The purpose of the study re- retary under this title during the preceding mortgagee or other party maintains, or will quired under paragraph (1) is to help Con- fiscal year. maintain, firewalls and other safeguards de- gress analyze and determine the effects of ‘‘(d) SUNSET.—After the expiration of the 5- signed to ensure that— limiting the amounts of the costs or fees year period beginning on the date of the en- ‘‘(i) individuals participating in the origi- under the program from the amounts actment of the Building American Home- nation of the mortgage shall have no in- charged under the program as of the date of ownership Act of 2008, the Secretary may not volvement with, or incentive to provide the the enactment of this title. enter into any new commitment to insure mortgagor with, any other financial or in- (3) CONTENT OF REPORT.—The study re- any mortgage, or newly insure any mort- surance product; and quired under paragraph (1) should focus on— gage, pursuant to the automated process es- ‘‘(ii) the mortgagor shall not be required, (A) the cost to mortgagors of participating tablished under this section.’’. directly or indirectly, as a condition of ob- in the program; (b) GAO REPORT.—Not later than the expi- taining a mortgage under this section, to (B) the financial soundness of the program; ration of the two-year period beginning on purchase any other financial or insurance (C) the availability of credit under the pro- the date of the enactment of this subtitle, product. gram; and the Comptroller General of the United States ‘‘(2) APPROVAL OF OTHER PARTIES.—All par- (D) the costs to elderly homeowners par- shall submit to the Congress a report identi- ties that participate in the origination of a ticipating in the program, including— fying the number of additional mortgagors

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00118 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5889 served using the automated process estab- priate staffing for such mortgage insurance (2) for the period beginning on the date of lished pursuant to section 257 of the National programs. enactment of this title and ending on the Housing Act (as added by the amendment SEC. 2127. POST-PURCHASE HOUSING COUN- date that is 5 years after such date of enact- made by subsection (a) of this section) and SELING ELIGIBILITY IMPROVE- ment, on the payment history and delin- the impact of such process and the insurance MENTS. quency rates of eligible homebuyers who par- of mortgages pursuant to such process on the Section 106(c)(4) of the Housing and Urban ticipated in the demonstration program. safety and soundness of the insurance funds Development Act of 1968 (12 U.S.C. SEC. 2129. FRAUD PREVENTION. under the National Housing Act of which 1701x(c)(4)) is amended: Section 1014 of title 18, United States Code, such mortgages are obligations. (1) in subparagraph (C)— is amended in the first sentence— SEC. 2125. HOMEOWNERSHIP PRESERVATION. (A) in clause (i), by striking ‘‘; or’’ and in- (1) by inserting ‘‘the Federal Housing Ad- serting a semicolon; The Secretary of Housing and Urban Devel- ministration,’’ before ‘‘the Farm Credit Ad- (B) in clause (ii), by striking the period at opment and the Commissioner of the Federal ministration’’; and the end and inserting a semicolon; and Housing Administration, in consultation (2) by striking ‘‘commitment, or loan’’ and (C) by adding at the end the following: with industry, the Neighborhood Reinvest- inserting ‘‘commitment, loan, or insurance ‘‘(iii) a significant reduction in the income ment Corporation, and other entities in- agreement or application for insurance or a of the household due to divorce or death; or volved in foreclosure prevention activities, guarantee’’. shall— ‘‘(iv) a significant increase in basic ex- penses of the homeowner or an immediate SEC. 2130. LIMITATION ON MORTGAGE INSUR- (1) develop and implement a plan to im- ANCE PREMIUM INCREASES. family member of the homeowner (including prove the Federal Housing Administration’s (a) IN GENERAL.—Notwithstanding any loss mitigation process; and the spouse, child, or parent for whom the other provision of law, including any provi- (2) report such plan to the Committee on homeowner provides substantial care or fi- sion of this title and any amendment made Banking, Housing, and Urban Affairs of the nancial assistance) due to— by this title— Senate and the Committee on Financial ‘‘(I) an unexpected or significant increase (1) for the period beginning on the date of Services of the House of Representatives. in medical expenses; the enactment of this title and ending on Oc- SEC. 2126. USE OF FHA SAVINGS FOR IMPROVE- ‘‘(II) a divorce; tober 1, 2009, the premiums charged for mort- MENTS IN FHA TECHNOLOGIES, PRO- ‘‘(III) unexpected and significant damage gage insurance under multifamily housing CEDURES, PROCESSES, PROGRAM to the property, the repair of which will not programs under the National Housing Act PERFORMANCE, STAFFING, AND SAL- be covered by private or public insurance; or ARIES. may not be increased above the premium ‘‘(IV) a large property-tax increase; or’’; amounts in effect under such program on Oc- (a) AUTHORIZATION OF APPROPRIATIONS.— (2) by striking the matter that follows sub- There is authorized to be appropriated for tober 1, 2006, unless the Secretary of Housing paragraph (C); and and Urban Development determines that, ab- each of fiscal years 2009 through 2013, (3) by adding at the end the following: $25,000,000, from negative credit subsidy for sent such increase, insurance of additional ‘‘(D) the Secretary of Housing and Urban mortgages under such program would, under the mortgage insurance programs under title Development determines that the annual in- II of the National Housing Act, to the Sec- the Federal Credit Reform Act of 1990, re- come of the homeowner is no greater than quire the appropriation of new budget au- retary of Housing and Urban Development the annual income established by the Sec- for increasing funding for the purpose of im- thority to cover the costs (as such term is retary as being of low- or moderate-in- defined in section 502 of the Federal Credit proving technology, processes, program per- come.’’. formance, eliminating fraud, and for pro- Reform Act of 1990 (2 U.S.C. 661a) of such in- SEC. 2128. PRE-PURCHASE HOMEOWNERSHIP surance; and viding appropriate staffing in connection COUNSELING DEMONSTRATION. (2) a premium increase pursuant to para- with the mortgage insurance programs under (a) ESTABLISHMENT OF PROGRAM.—For the graph (1) may be made only if not less than title II of the National Housing Act. period beginning on the date of enactment of 30 days prior to such increase taking effect, (b) CERTIFICATION.—The authorization this title and ending on the date that is 3 under subsection (a) shall not be effective for years after such date of enactment, the Sec- the Secretary of Housing and Urban Develop- a fiscal year unless the Secretary of Housing retary of Housing and Urban Development ment— and Urban Development has, by rulemaking shall establish and conduct a demonstration (A) notifies the Committee on Banking, in accordance with section 553 of title 5, program to test the effectiveness of alter- Housing, and Urban Affairs of the Senate and United States Code (notwithstanding sub- native forms of pre-purchase homeownership the Committee on Financial Services of the sections (a)(2), (b)(B), and (d)(3) of such sec- counseling for eligible homebuyers. House of Representatives of such increase; tion), made a determination that— (b) FORMS OF COUNSELING.—The Secretary and (1) premiums being, or to be, charged dur- of Housing and Urban Development shall (B) publishes notice of such increase in the ing such fiscal year for mortgage insurance provide to eligible homebuyers pre-purchase Federal Register. under title II of the National Housing Act homeownership counseling under this sec- (b) WAIVER.—The Secretary of Housing and are established at the minimum amount suf- tion in the form of— Urban Development may waive the 30-day ficient to— (1) telephone counseling; notice requirement under subsection (a)(2), if (A) comply with the requirements of sec- (2) individualized in-person counseling; the Secretary determines that waiting 30- tion 205(f) of such Act (relating to required (3) web-based counseling; days before increasing premiums would capital ratio for the Mutual Mortgage Insur- (4) counseling classes; or cause substantial damage to the solvency of ance Fund); and (5) any other form or type of counseling multifamily housing programs under the Na- (B) ensure the safety and soundness of the that the Secretary may, in his discretion, de- tional Housing Act. other mortgage insurance funds under such termine appropriate. SEC. 2131. SAVINGS PROVISION. Act; and (c) SIZE OF PROGRAM.—The Secretary shall Any mortgage insured under title II of the (2) any negative credit subsidy for such fis- make available the pre-purchase homeowner- National Housing Act before the date of en- cal year resulting from such mortgage insur- ship counseling described in subsection (b) to actment of this subtitle shall continue to be ance programs adequately ensures the effi- not more than 3,000 eligible homebuyers in governed by the laws, regulations, orders, cient delivery and availability of such pro- any given year. and terms and conditions to which it was (d) INCENTIVE TO PARTICIPATE.—The Sec- grams. subject on the day before the date of the en- retary of Housing and Urban Development (c) STUDY AND REPORT.—The Secretary of actment of this subtitle. may provide incentives to eligible home- Housing and Urban Development shall con- SEC. 2132. IMPLEMENTATION. buyers to participate in the demonstration duct a study to obtain recommendations The Secretary of Housing and Urban Devel- program established under subsection (a). from participants in the private residential opment shall by notice establish any addi- Such incentives may include the reduction (both single family and multifamily) mort- tional requirements that may be necessary of any insurance premium charges owed by gage lending business and the secondary to immediately carry out the provisions of the eligible homebuyer to the Secretary. market for such mortgages on how best to (e) ELIGIBLE HOMEBUYER DEFINED.—For this subtitle. The notice shall take effect update and upgrade processes and tech- purposes of this section an ‘‘eligible home- upon issuance. nologies for the mortgage insurance pro- buyer’’ means a first-time homebuyer who SEC. 2133. MORATORIUM ON IMPLEMENTATION grams under title II of the National Housing has been approved for a home loan with a OF RISK-BASED PREMIUMS. Act so that the procedures for originating, loan-to-value ratio between 97 percent and (a) IN GENERAL.—During the 12-month pe- insuring, and servicing of such mortgages 98.5 percent. riod beginning on the date of enactment of conform with those customarily used by sec- (f) REPORT TO CONGRESS.—The Secretary of this Act, the Secretary of Housing and Urban ondary market purchasers of residential Housing and Urban Development shall report Development shall not enact, execute, or mortgage loans. Not later than the expira- to the Committee on Banking, Housing, and take any action to make effective the tion of the 12-month period beginning on the Urban Affairs of the Senate and the Com- planned implementation of risk-based pre- date of the enactment of this title, the Sec- mittee on Financial Services of the House of miums, which are designed for mortgage retary shall submit a report to the Congress Representative— lenders to offer borrowers an FHA-insured describing the progress made and to be made (1) on an annual basis, on the progress and product that provides a range of mortgage toward updating and upgrading such proc- results of the demonstration program estab- insurance premium pricing, based on the risk esses and technology, and providing appro- lished under subsection (a); and that the insurance contract represents, as

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00119 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5890 CONGRESSIONAL RECORD — SENATE June 19, 2008 such planned implementation was set forth (3) in subparagraph (D) by striking and (B), but only if necessary, and not in ex- in the Notice published in the Federal Reg- ‘‘$64,800’’ and inserting ‘‘$92,904’’; cess of the minimum increase necessary, to ister on May 13, 2008 (Vol. 73, No. 93, Pages (4) in subparagraph (E) by striking maintain a negative credit subsidy as de- 27703 through 27711)(effective July 14, 2008). ‘‘$16,200’’ and inserting ‘‘$23,226’’; and scribed in subparagraph (C).’’. (b) INSURANCE OF MORTGAGES UNDER THE (5) by realigning subparagraphs (C), (D), SEC. 2147. TECHNICAL CORRECTIONS. NATIONAL HOUSING ACT.—During the 12- and (E) 2 ems to the left so that the left mar- (a) DATES.—Subsection (a) of section 2 of month period beginning on the date of enact- gins of such subparagraphs are aligned with the National Housing Act (12 U.S.C. 1703(a)) ment of this Act, the Secretary of Housing the margins of subparagraphs (A) and (B). is amended— and Urban Development shall not enact, exe- (b) ANNUAL INDEXING.—Subsection (b) of (1) by striking ‘‘on and after July 1, 1939,’’ cute, or take any action to make effective section 2 of the National Housing Act (12 each place such term appears; and the implementation of any other new risk- U.S.C. 1703(b)), as amended by the preceding (2) by striking ‘‘made after the effective based premium product related to the insur- provisions of this title, is further amended date of the Housing Act of 1954’’. ance of any mortgage on a single family resi- by adding at the end the following new para- (b) AUTHORITY OF SECRETARY.—Subsection dence under title II of the National Housing graph: (c) of section 2 of the National Housing Act Act, where the premium price for such new ‘‘(9) ANNUAL INDEXING OF MANUFACTURED (12 U.S.C. 1703(c)) is amended to read as fol- product is based in whole or in part on a bor- HOUSING LOANS.—The Secretary shall develop lows: rower’s Decision Credit Score, as that term a method of indexing in order to annually ‘‘(c) HANDLING AND DISPOSAL OF PROP- is defined in the Notice described under sub- adjust the loan limits established in subpara- ERTY.— section (a), or any successor thereto. graphs (A)(ii), (C), (D), and (E) of this sub- ‘‘(1) AUTHORITY OF SECRETARY.—Notwith- Subtitle B—Manufactured Housing Loan section. Such index shall be based on the standing any other provision of law, the Sec- Modernization manufactured housing price data collected retary may— SEC. 2141. SHORT TITLE. by the United States Census Bureau. The ‘‘(A) deal with, complete, rent, renovate, This subtitle may be cited as the ‘‘FHA Secretary shall establish such index no later modernize, insure, or assign or sell at public Manufactured Housing Loan Modernization than 1 year after the date of the enactment or private sale, or otherwise dispose of, for Act of 2008’’. of the FHA Manufactured Housing Loan cash or credit in the Secretary’s discretion, SEC. 2142. PURPOSES. Modernization Act of 2008.’’ and upon such terms and conditions and for The purposes of this subtitle are— (c) TECHNICAL AND CONFORMING CHANGES.— such consideration as the Secretary shall de- (1) to provide adequate funding for FHA-in- Paragraph (1) of section 2(b) of the National termine to be reasonable, any real or per- sured manufactured housing loans for low- Housing Act (12 U.S.C. 1703(b)(1)) is amend- sonal property conveyed to or otherwise ac- and moderate-income homebuyers during all ed— quired by the Secretary, in connection with economic cycles in the manufactured hous- (1) by striking ‘‘No’’ and inserting ‘‘Except the payment of insurance heretofore or here- ing industry; as provided in the last sentence of this para- after granted under this title, including any (2) to modernize the FHA title I insurance graph, no’’; and evidence of debt, contract, claim, personal program for manufactured housing loans to (2) by adding after and below subparagraph property, or security assigned to or held by enhance participation by Ginnie Mae and the (G) the following: him in connection with the payment of in- private lending markets; and ‘‘The Secretary shall, by regulation, annu- surance heretofore or hereafter granted (3) to adjust the low loan limits for title I ally increase the dollar amount limitations under this section; and manufactured home loan insurance to reflect in subparagraphs (A)(ii), (C), (D), and (E) (as ‘‘(B) pursue to final collection, by way of the increase in costs since such limits were such limitations may have been previously compromise or otherwise, all claims assigned last increased in 1992 and to index the limits adjusted under this sentence) in accordance to or held by the Secretary and all legal or to inflation. with the index established pursuant to para- equitable rights accruing to the Secretary in SEC. 2143. EXCEPTION TO LIMITATION ON FINAN- graph (9).’’. connection with the payment of such insur- CIAL INSTITUTION PORTFOLIO. SEC. 2146. INSURANCE PREMIUMS. ance, including unpaid insurance premiums The second sentence of section 2(a) of the Subsection (f) of section 2 of the National owed in connection with insurance made National Housing Act (12 U.S.C. 1703(a)) is Housing Act (12 U.S.C. 1703(f)) is amended— available by this title. amended— (1) by inserting ‘‘(1) PREMIUM CHARGES.—’’ ‘‘(2) ADVERTISEMENTS FOR PROPOSALS.— (1) by striking ‘‘In no case’’ and inserting after ‘‘(f)’’; and Section 3709 of the Revised Statutes shall ‘‘Other than in connection with a manufac- (2) by adding at the end the following new not be construed to apply to any contract of tured home or a lot on which to place such paragraph: hazard insurance or to any purchase or con- a home (or both), in no case’’; and ‘‘(2) MANUFACTURED HOME LOANS.—Not- tract for services or supplies on account of (2) by striking ‘‘: Provided, That with’’ and withstanding paragraph (1), in the case of a such property if the amount thereof does not inserting ‘‘. With’’. loan, advance of credit, or purchase in con- exceed $25,000. SEC. 2144. INSURANCE BENEFITS. nection with a manufactured home or a lot ‘‘(3) DELEGATION OF AUTHORITY.—The power (a) IN GENERAL.—Subsection (b) of section on which to place such a home (or both), the to convey and to execute in the name of the 2 of the National Housing Act (12 U.S.C. premium charge for the insurance granted Secretary, deeds of conveyance, deeds of re- 1703(b)), is amended by adding at the end the under this section shall be paid by the bor- lease, assignments and satisfactions of mort- following new paragraph: rower under the loan or advance of credit, as gages, and any other written instrument re- ‘‘(8) INSURANCE BENEFITS FOR MANUFAC- follows: lating to real or personal property or any in- TURED HOUSING LOANS.—Any contract of in- ‘‘(A) At the time of the making of the loan, terest therein heretofore or hereafter ac- surance with respect to loans, advances of advance of credit, or purchase, a single pre- quired by the Secretary pursuant to the pro- credit, or purchases in connection with a mium payment in an amount not to exceed visions of this title may be exercised by an manufactured home or a lot on which to 2.25 percent of the amount of the original in- officer appointed by the Secretary without place a manufactured home (or both) for a fi- sured principal obligation. the execution of any express delegation of nancial institution that is executed under ‘‘(B) In addition to the premium under sub- power or power of attorney. Nothing in this this title after the date of the enactment of paragraph (A), annual premium payments subsection shall be construed to prevent the the FHA Manufactured Housing Loan Mod- during the term of the loan, advance, or obli- Secretary from delegating such power by ernization Act of 2008 by the Secretary shall gation purchased in an amount not exceed- order or by power of attorney, in the Sec- be conclusive evidence of the eligibility of ing 1.0 percent of the remaining insured prin- retary’s discretion, to any officer or agent such financial institution for insurance, and cipal balance (excluding the portion of the the Secretary may appoint.’’. the validity of any contract of insurance so remaining balance attributable to the pre- SEC. 2148. REVISION OF UNDERWRITING CRI- executed shall be incontestable in the hands mium collected under subparagraph (A) and TERIA. of the bearer from the date of the execution without taking into account delinquent pay- (a) IN GENERAL.—Subsection (b) of section of such contract, except for fraud or mis- ments or prepayments). 2 of the National Housing Act (12 U.S.C. representation on the part of such institu- ‘‘(C) Premium charges under this para- 1703(b)), as amended by the preceding provi- tion.’’. graph shall be established in amounts that sions of this title, is further amended by add- (b) APPLICABILITY.—The amendment made are sufficient, but do not exceed the min- ing at the end the following new paragraph: by subsection (a) shall only apply to loans imum amounts necessary, to maintain a neg- ‘‘(10) FINANCIAL SOUNDNESS OF MANUFAC- that are registered or endorsed for insurance ative credit subsidy for the program under TURED HOUSING PROGRAM.—The Secretary after the date of the enactment of this title. this section for insurance of loans, advances shall establish such underwriting criteria for SEC. 2145. MAXIMUM LOAN LIMITS. of credit, or purchases in connection with a loans and advances of credit in connection (a) DOLLAR AMOUNTS.—Paragraph (1) of manufactured home or a lot on which to with a manufactured home or a lot on which section 2(b) of the National Housing Act (12 place such a home (or both), as determined to place a manufactured home (or both), in- U.S.C. 1703(b)(1)) is amended— based upon risk to the Federal Government cluding such loans and advances represented (1) in clause (ii) of subparagraph (A), by under existing underwriting requirements. by obligations purchased by financial insti- striking ‘‘$17,500’’ and inserting ‘‘$25,090’’; ‘‘(D) The Secretary may increase the limi- tutions, as may be necessary to ensure that (2) in subparagraph (C) by striking tations on premium payments to percentages the program under this title for insurance ‘‘$48,600’’ and inserting ‘‘$69,678’’; above those set forth in subparagraphs (A) for financial institutions against losses from

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00120 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5891 such loans, advances of credit, and purchases ‘‘(C) requires the lessor to provide the les- and all that follows and inserting ‘‘in excess is financially sound.’’. see written notice of termination of the lease of 6 percent— (b) TIMING.—Not later than the expiration not less than 180 days prior to the expiration ‘‘(A) during the period of military service of the 6-month period beginning on the date of the current lease term in the event the and one year thereafter, in the case of an ob- of the enactment of this title, the Secretary lessee is required to move due to the closing ligation or liability consisting of a mort- of Housing and Urban Development shall re- of the manufactured home community, and gage, trust deed, or other security in the na- vise the existing underwriting criteria for further provides that failure to provide such ture of a mortgage; or the program referred to in paragraph (10) of notice to the mortgagor in a timely manner ‘‘(B) during the period of military service, section 2(b) of the National Housing Act (as will cause the lease term, at its expiration, in the case of any other obligation or liabil- added by subsection (a) of this section) in ac- to automatically renew for an additional 1 ity.’’; and cordance with the requirements of such para- year term.’’. (2) by striking subsection (d) and inserting graph. TITLE II—MORTGAGE FORECLOSURE the following new subsection: ‘‘(d) DEFINITIONS.—In this section: SEC. 2149. PROHIBITION AGAINST KICKBACKS PROTECTIONS FOR SERVICEMEMBERS AND UNEARNED FEES. ‘‘(1) INTEREST.—The term ‘interest’ in- SEC. 2201. TEMPORARY INCREASE IN MAXIMUM Title I of the National Housing Act is cludes service charges, renewal charges, fees, LOAN GUARANTY AMOUNT FOR CER- or any other charges (except bona fide insur- amended by adding at the end of section 9 TAIN HOUSING LOANS GUARANTEED the following new section: BY THE SECRETARY OF VETERANS ance) with respect to an obligation or liabil- ity. ‘‘SEC. 10. PROHIBITION AGAINST KICKBACKS AND AFFAIRS. UNEARNED FEES. Notwithstanding subparagraph (C) of sec- ‘‘(2) OBLIGATION OR LIABILITY.—The term ‘obligation or liability’ includes an obliga- ‘‘(a) IN GENERAL.—Except as provided in tion 3703(a)(1) of title 38, United States Code, tion or liability consisting of a mortgage, subsection (b), the provisions of sections 3, 8, for purposes of any loan described in sub- trust deed, or other security in the nature of 16, 17, 18, and 19 of the Real Estate Settle- paragraph (A)(i)(IV) of such section that is a mortgage.’’. ment Procedures Act of 1974 (12 U.S.C. 2601 et originated during the period beginning on (c) EFFECTIVE DATE; SUNSET.— seq.) shall apply to each sale of a manufac- the date of the enactment of this Act and (1) EFFECTIVE DATE.—The amendment tured home financed with an FHA-insured ending on December 31, 2008, the term ‘‘max- imum guaranty amount’’ shall mean an made by subsection (a) shall take effect on loan or extension of credit, as well as to the date of enactment of this Act. services rendered in connection with such amount equal to 25 percent of the higher of— (1) the limitation determined under section (2) SUNSET.—The amendments made by transactions. subsection (a) shall expire on December 31, ‘‘(b) AUTHORITY OF THE SECRETARY.—The 305(a)(2) of the Federal Home Loan Mortgage 2010. Effective January 1, 2011, the provisions Secretary is authorized to determine the Corporation Act (12 U.S.C. 1454(a)(2)) for the of subsections (b) and (c) of section 303 of the manner and extent to which the provisions calendar year in which the loan is originated Servicemembers Civil Relief Act, as in effect of sections 3, 8, 16, 17, 18, and 19 of the Real for a single-family residence; or on the day before the date of the enactment Estate Settlement Procedures Act of 1974 (12 (2) 125 percent of the area median price for of this Act, are hereby revived. U.S.C. 2601 et seq.) may reasonably be ap- a single-family residence, but in no case to plied to the transactions described in sub- exceed 175 percent of the limitation deter- TITLE III—EMERGENCY ASSISTANCE FOR section (a), and to grant such exemptions as mined under such section 305(a)(2) for the THE REDEVELOPMENT OF ABANDONED may be necessary to achieve the purposes of calendar year in which the loan is originated AND FORECLOSED HOMES this section. for a single-family residence. SEC. 2301. EMERGENCY ASSISTANCE FOR THE RE- ‘‘(c) DEFINITIONS.—For purposes of this sec- SEC. 2202. COUNSELING ON MORTGAGE FORE- DEVELOPMENT OF ABANDONED AND tion— CLOSURES FOR MEMBERS OF THE FORECLOSED HOMES. (a) DIRECT APPROPRIATIONS.—There are ap- ‘‘(1) the term ‘federally related mortgage ARMED FORCES RETURNING FROM propriated out of any money in the Treasury loan’ as used in sections 3, 8, 16, 17, 18, and 19 SERVICE ABROAD. not otherwise appropriated for the fiscal of the Real Estate Settlement Procedures (a) IN GENERAL.—The Secretary of Defense year 2008, $4,000,000,000, to remain available Act of 1974 (12 U.S.C. 2601 et seq.) shall in- shall develop and implement a program to until expended, for assistance to States and clude an FHA-insured loan or extension of advise members of the Armed Forces (includ- ing members of the National Guard and Re- units of general local government (as such credit made to a borrower for the purpose of terms are defined in section 102 of the Hous- purchasing a manufactured home that the serve) who are returning from service on ac- tive duty abroad (including service in Oper- ing and Community Development Act of 1974 borrower intends to occupy as a personal res- (42 U.S.C. 5302)) for the redevelopment of idence; and ation Iraqi Freedom and Operation Enduring Freedom) on actions to be taken by such abandoned and foreclosed upon homes and ‘‘(2) the term ‘real estate settlement serv- residential properties. ice’ as used in sections 3, 8, 16, 17, 18, and 19 members to prevent or forestall mortgage foreclosures. (b) ALLOCATION OF APPROPRIATED of the Real Estate Settlement Procedures AMOUNTS.— (b) ELEMENTS.—The program required by Act of 1974 (12 U.S.C. 2601 et seq.) shall in- subsection (a) shall include the following: (1) IN GENERAL.—The amounts appropriated clude any service rendered in connection (1) Credit counseling. or otherwise made available to States and with a loan or extension of credit insured by (2) Home mortgage counseling. units of general local government under this the Federal Housing Administration for the (3) Such other counseling and information section shall be allocated based on a funding purchase of a manufactured home. as the Secretary considers appropriate for formula established by the Secretary of ‘‘(d) UNFAIR AND DECEPTIVE PRACTICES.—In Housing and Urban Development (in this connection with the purchase of a manufac- purposes of the program. (c) TIMING OF PROVISION OF COUNSELING.— title referred to as the ‘‘Secretary’’). tured home financed with a loan or extension Counseling and other information under the (2) FORMULA TO BE DEVISED SWIFTLY.—The of credit insured by the Federal Housing Ad- program required by subsection (a) shall be funding formula required under paragraph (1) ministration under this title, the Secretary provided to a member of the Armed Forces shall be established not later than 60 days shall prohibit acts or practices in connection covered by the program as soon as prac- after the date of enactment of this section. with loans or extensions of credit that the ticable after the return of the member from (3) CRITERIA.—The funding formula re- Secretary finds to be unfair, deceptive, or service as described in subsection (a). quired under paragraph (1) shall ensure that otherwise not in the interests of the bor- any amounts appropriated or otherwise made rower.’’. SEC. 2203. ENHANCEMENT OF PROTECTIONS FOR SERVICEMEMBERS RELATING TO available under this section are allocated to SEC. 2150. LEASEHOLD REQUIREMENTS. MORTGAGES AND MORTGAGE FORE- States and units of general local government Subsection (b) of section 2 of the National CLOSURES. with the greatest need, as such need is deter- Housing Act (12 U.S.C. 1703(b)), as amended (a) EXTENSION OF PERIOD OF PROTECTIONS mined in the discretion of the Secretary by the preceding provisions of this title, is AGAINST MORTGAGE FORECLOSURES.— based on— further amended by adding at the end the (1) EXTENSION OF PROTECTION PERIOD.—Sub- (A) the number and percentage of home following new paragraph: section (c) of section 303 of the foreclosures in each State or unit of general ‘‘(11) LEASEHOLD REQUIREMENTS.—No insur- Servicemembers Civil Relief Act (50 U.S.C. local government; ance shall be granted under this section to App. 533) is amended by striking ‘‘90 days’’ (B) the number and percentage of homes fi- any such financial institution with respect and inserting ‘‘9 months’’. nanced by a subprime mortgage related loan to any obligation representing any such (2) EXTENSION OF STAY OF PROCEEDINGS PE- in each State or unit of general local govern- loan, advance of credit, or purchase by it, RIOD.—Subsection (b) of such section is ment; and made for the purposes of financing a manu- amended by striking ‘‘90 days’’ and inserting (C) the number and percentage of homes in factured home which is intended to be situ- ‘‘9 months’’. default or delinquency in each State or unit ated in a manufactured home community (b) TREATMENT OF MORTGAGES AS OBLIGA- of general local government. pursuant to a lease, unless such lease— TIONS SUBJECT TO INTEREST RATE LIMITA- (4) DISTRIBUTION.—Amounts appropriated ‘‘(A) expires not less than 3 years after the TION.—Section 207 of the Servicemembers or otherwise made available under this sec- origination date of the obligation; Civil Relief Act (50 U.S.C. App. 527) is amend- tion shall be distributed according to the ‘‘(B) is renewable upon the expiration of ed— funding formula established by the Secretary the original 3 year term by successive 1 year (1) in subsection (a)(1), by striking ‘‘in ex- under paragraph (1) not later than 30 days terms; and cess of 6 percent’’ the second place it appears after the establishment of such formula.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00121 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5892 CONGRESSIONAL RECORD — SENATE June 19, 2008

(c) USE OF FUNDS.— less the Secretary approves a request to use tion are being used in a manner consistent (1) IN GENERAL.—Any State or unit of gen- the funds for purposes under this Act. with the criteria provided in this section. eral local government that receives amounts (II) OTHER AMOUNTS.—Upon the expiration SEC. 2302. NATIONWIDE DISTRIBUTION OF RE- pursuant to this section shall, not later than of the 5-year period set forth under clause (i), SOURCES. 18 months after the receipt of such amounts, any other revenue not described under sub- use such amounts to purchase and redevelop clause (I) generated from the sale, rental, re- Notwithstanding any other provision of abandoned and foreclosed homes and residen- development, rehabilitation, or any other el- this Act or the amendments made by this tial properties. igible use of an abandoned or foreclosed upon Act, each State shall receive not less than (2) PRIORITY.—Any State or unit of general home or residential property shall be depos- 0.5 percent of funds made available under local government that receives amounts pur- ited in the Treasury of the United States as section 2301 (relating to emergency assist- suant to this section shall in distributing miscellaneous receipts. ance for the redevelopment of abandoned and such amounts give priority emphasis and (B) OTHER REVENUES.—Any revenue gen- foreclosed homes). consideration to those metropolitan areas, erated under subparagraphs (A), (C) or (D) of SEC. 2303. LIMITATION ON USE OF FUNDS WITH metropolitan cities, urban areas, rural areas, subsection (c)(3) shall be provided to and RESPECT TO EMINENT DOMAIN. low- and moderate-income areas, and other used by the State or unit of general local No State or unit of general local govern- areas with the greatest need, including government in accordance with, and in fur- those— ment may use any amounts received pursu- therance of, the intent and provisions of this ant to section 2301 to fund any project that (A) with the greatest percentage of home section. foreclosures; seeks to use the power of eminent domain, (e) RULES OF CONSTRUCTION.— unless eminent domain is employed only for (B) with the highest percentage of homes (1) IN GENERAL.—Except as otherwise pro- financed by a subprime mortgage related a public use: Provided, That for purposes of vided by this section, amounts appropriated, this section, public use shall not be con- loan; and revenues generated, or amounts otherwise (C) identified by the State or unit of gen- strued to include economic development that made available to States and units of general primarily benefits private entities. eral local government as likely to face a sig- local government under this section shall be nificant rise in the rate of home foreclosures. treated as though such funds were commu- SEC. 2304. LIMITATION ON DISTRIBUTION OF (3) ELIGIBLE USES.—Amounts made avail- nity development block grant funds under FUNDS. able under this section may be used to— title I of the Housing and Community Devel- (a) IN GENERAL.—None of the funds made (A) establish financing mechanisms for opment Act of 1974 (42 U.S.C. 5301 et seq.). available under this title or title IV shall be purchase and redevelopment of foreclosed (2) NO MATCH.—No matching funds shall be distributed to— upon homes and residential properties, in- required in order for a State or unit of gen- (1) an organization which has been indicted cluding such mechanisms as soft-seconds, eral local government to receive any for a violation under Federal law relating to loan loss reserves, and shared-equity loans amounts under this section. an election for Federal office; or for low- and moderate-income homebuyers; (2) an organization which employs applica- (B) purchase and rehabilitate homes and (f) AUTHORITY TO SPECIFY ALTERNATIVE RE- residential properties that have been aban- QUIREMENTS.— ble individuals. doned or foreclosed upon, in order to sell, (1) IN GENERAL.—In administering any (b) APPLICABLE INDIVIDUALS DEFINED.—In rent, or redevelop such homes and prop- amounts appropriated or otherwise made this section, the term ‘‘applicable indi- erties; available under this section, the Secretary vidual’’ means an individual who— (C) establish land banks for homes that may specify alternative requirements to any (1) is— have been foreclosed upon; provision under title I of the Housing and (A) employed by the organization in a per- (D) demolish blighted structures; and Community Development Act of 1974 (except manent or temporary capacity; (E) redevelop demolished or vacant prop- for those related to fair housing, non- (B) contracted or retained by the organiza- erties. discrimination, labor standards, and the en- tion; or (d) LIMITATIONS.— vironment) in accordance with the terms of (C) acting on behalf of, or with the express (1) ON PURCHASES.—Any purchase of a fore- this section and for the sole purpose of expe- or apparent authority of, the organization; closed upon home or residential property diting the use of such funds. and under this section shall be at a discount (2) NOTICE.—The Secretary shall provide (2) has been indicted for a violation under from the current market appraised value of written notice of its intent to exercise the Federal law relating to an election for Fed- the home or property, taking into account authority to specify alternative require- eral office. its current condition, and such discount ments under paragraph (1) to the Committee shall ensure that purchasers are paying on Banking, Housing and Urban Affairs of SEC. 2305. COUNSELING INTERMEDIARIES. below-market value for the home or prop- the Senate and the Committee on Financial Notwithstanding any other provision of erty. Services of the House of Representatives not this Act, the amount appropriated under sec- (2) SALE OF HOMES.—If an abandoned or later than 10 business days before such exer- tion 2301(a) of this Act shall be $3,920,000,000 foreclosed upon home or residential property cise of authority is to occur. and the amount appropriated under section is purchased, redeveloped, or otherwise sold (3) LOW AND MODERATE INCOME REQUIRE- 2401 of this Act shall be $180,000,000: Provided, to an individual as a primary residence, then MENT.— That of amounts appropriated under such such sale shall be in an amount equal to or (A) IN GENERAL.—Notwithstanding the au- section 2401 $30,000,000 shall be used by the less than the cost to acquire and redevelop thority of the Secretary under paragraph Neighborhood Reinvestment Corporation (re- or rehabilitate such home or property up to (1)— ferred to in this section as the ‘‘NRC’’) to a decent, safe, and habitable condition. (i) all of the funds appropriated or other- make grants to counseling intermediaries (3) REINVESTMENT OF PROFITS.— wise made available under this section shall approved by the Department of Housing and (A) PROFITS FROM SALES, RENTALS, AND RE- be used with respect to individuals and fami- Urban Development or the NRC to hire at- DEVELOPMENT.— lies whose income does not exceed 120 per- torneys to assist homeowners who have legal (i) 5-YEAR REINVESTMENT PERIOD.—During cent of area median income; and issues directly related to the homeowner’s the 5-year period following the date of enact- (ii) not less than 25 percent of the funds ap- foreclosure, delinquency or short sale. Such ment of this Act, any revenue generated propriated or otherwise made available attorneys shall be capable of assisting home- from the sale, rental, redevelopment, reha- under this section shall be used for the pur- owners of owner-occupied homes with mort- bilitation, or any other eligible use that is in chase and redevelopment of abandoned or gages in default, in danger of default, or sub- excess of the cost to acquire and redevelop foreclosed upon homes or residential prop- ject to or at risk of foreclosure and who have (including reasonable development fees) or erties that will be used to house individuals legal issues that cannot be handled by coun- rehabilitate an abandoned or foreclosed upon or families whose incomes do not exceed 50 selors already employed by such inter- home or residential property shall be pro- percent of area median income. mediaries: Provided, That of the amounts vided to and used by the State or unit of gen- (B) RECURRENT REQUIREMENT.—The Sec- provided for in the prior provisos the NRC eral local government in accordance with, retary shall, by rule or order, ensure, to the shall give priority consideration to coun- and in furtherance of, the intent and provi- maximum extent practicable and for the seling intermediaries and legal organizations sions of this section. longest feasible term, that the sale, rental, that (1) provide legal assistance in the 100 (ii) DEPOSITS IN THE TREASURY.— or redevelopment of abandoned and fore- metropolitan statistical areas (as defined by (I) PROFITS.—Upon the expiration of the 5- closed upon homes and residential properties the Director of the Office of Management year period set forth under clause (i), any under this section remain affordable to indi- and Budget) with the highest home fore- revenue generated from the sale, rental, re- viduals or families described in subparagraph closure rates, and (2) have the capacity to development, rehabilitation, or any other el- (A). begin using the financial assistance within 90 igible use that is in excess of the cost to ac- (g) PERIODIC AUDITS.—In consultation with days after receipt of the assistance: Provided quire and redevelop (including reasonable de- the Secretary of Housing and Urban Develop- further, That no funds provided under this velopment fees) or rehabilitate an abandoned ment, the Comptroller General of the United Act shall be used to provide, obtain, or ar- or foreclosed upon home or residential prop- States shall conduct periodic audits to en- range on behalf of a homeowner, legal rep- erty shall be deposited in the Treasury of the sure that funds appropriated, made avail- resentation involving or for the purposes of United States as miscellaneous receipts, un- able, or otherwise distributed under this sec- civil litigation.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00122 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5893 TITLE IV—HOUSING COUNSELING ‘‘(i) Label the payment schedule as follows: tive 12 months after the date of enactment of RESOURCES ‘Payment Schedule: Payments Will Vary this Act. SEC. 2401. HOUSING COUNSELING RESOURCES. Based on Interest Rate Changes’. (2) VARIABLE INTEREST RATES.—Subpara- There are appropriated out of any money ‘‘(ii) State in conspicuous type size and for- graph (C) of section 128(b)(2) of the Truth in in the Treasury not otherwise appropriated mat examples of adjustments to the regular Lending Act (15 U.S.C. 1638(b)(2)(C)), as added for the fiscal year 2008, for an additional required payment on the extension of credit by subsection (a) of this section, shall be- amount for the ‘‘Neighborhood Reinvestment based on the change in the interest rates come effective on the earlier of— Corporation—Payment to the Neighborhood specified by the contract for such extension (A) the compliance date established by the Reinvestment Corporation’’ $100,000,000, to of credit. Among the examples required to be Board for such purpose, by regulation; or remain available until September 30, 2008, for provided under this clause is an example (B) 30 months after the date of enactment foreclosure mitigation activities under the that reflects the maximum payment amount of this Act. terms and conditions contained in the second of the regular required payments on the ex- SEC. 2503. COMMUNITY DEVELOPMENT INVEST- undesignated paragraph (beginning with the tension of credit, based on the maximum in- MENT AUTHORITY FOR DEPOSITORY phrase ‘‘For an additional amount’’) under terest rate allowed under the contract, in ac- INSTITUTIONS. the heading ‘‘Neighborhood Reinvestment cordance with the rules of the Board. Prior (a) NATIONAL BANKS.—The first sentence of Corporation—Payment to the Neighborhood to issuing any rules pursuant to this clause, the paragraph designated as the ‘‘Eleventh’’ Reinvestment Corporation’’ of Public Law the Board shall conduct consumer testing to of section 5136 of the Revised Statutes of the 110–161. determine the appropriate format for pro- United States (12 U.S.C. 24) is amended by SEC. 2402. CREDIT COUNSELING. viding the disclosures required under this striking ‘‘promotes the public welfare by (a) IN GENERAL.—Entities approved by the subparagraph to consumers so that such dis- benefitting primarily’’ and inserting ‘‘is de- Neighborhood Reinvestment Corporation or closures can be easily understood. signed primarily to promote the public wel- the Secretary and State housing finance en- ‘‘(D) In any case in which the disclosure fare, including the welfare of’’. tities receiving funds under this title shall statement under subparagraph (A) contains (b) STATE MEMBER BANKS.—The first sen- work to identify and coordinate with non- an annual percentage rate of interest that is tence of the 23rd paragraph of section 9 of profit organizations operating national or no longer accurate, as determined under sec- the Federal Reserve Act (12 U.S.C. 338a) is statewide toll-free foreclosure prevention tion 107(c), the creditor shall furnish an addi- amended by striking ‘‘promotes the public hotlines, including those that— tional, corrected statement to the borrower, welfare by benefitting primarily’’ and insert- (1) serve as a consumer referral source and not later than 3 business days before the date ing ‘‘is designed primarily to promote the data repository for borrowers experiencing of consummation of the transaction. public welfare, including the welfare of’’. some form of delinquency or foreclosure; ‘‘(E) The consumer shall receive the disclo- TITLE VI—VETERANS HOUSING MATTERS (2) connect callers with local housing coun- sures required under this paragraph before SEC. 2601. HOME IMPROVEMENTS AND STRUC- seling agencies approved by the Neighbor- paying any fee to the creditor or other per- TURAL ALTERATIONS FOR TOTALLY hood Reinvestment Corporation or the Sec- son in connection with the consumer’s appli- DISABLED MEMBERS OF THE ARMED retary to assist with working out a positive cation for an extension of credit that is se- FORCES BEFORE DISCHARGE OR RE- resolution to their mortgage delinquency or cured by the dwelling of a consumer. If the LEASE FROM THE ARMED FORCES. foreclosure; or disclosures are mailed to the consumer, the Section 1717 of title 38, United States Code, (3) facilitate or offer free assistance to help consumer is considered to have received is amended by adding at the end the fol- homeowners to understand their options, ne- them 3 business days after they are mailed. lowing new subsection: gotiate solutions, and find the best resolu- A creditor or other person may impose a fee ‘‘(d)(1) In the case of a member of the tion for their particular circumstances. for obtaining the consumer’s credit report Armed Forces who, as determined by the before the consumer has received the disclo- Secretary, has a disability permanent in na- TITLE V—MORTGAGE DISCLOSURE ture incurred or aggravated in the line of IMPROVEMENT ACT sures under this paragraph, provided the fee is bona fide and reasonable in amount. duty in the active military, naval, or air SEC. 2501. SHORT TITLE. service, the Secretary may furnish improve- ‘‘(F) WAIVER OF TIMELINESS OF DISCLO- This title may be cited as the ‘‘Mortgage ments and structural alterations for such SURES.—To expedite consummation of a Disclosure Improvement Act of 2008’’. member for such disability or as otherwise SEC. 2502. ENHANCED MORTGAGE LOAN DISCLO- transaction, if the consumer determines that the extension of credit is needed to meet a described in subsection (a)(2) while such SURES. member is hospitalized or receiving out- (a) TRUTH IN LENDING ACT DISCLOSURES.— bona fide personal financial emergency, the consumer may waive or modify the timing patient medical care, services, or treatment Section 128(b)(2) of the Truth in Lending Act for such disability if the Secretary deter- (15 U.S.C. 1638(b)(2)) is amended— requirements for disclosures under subpara- graph (A), provided that— mines that such member is likely to be dis- (1) by inserting ‘‘(A)’’ before ‘‘In the’’; charged or released from the Armed Forces (2) by striking ‘‘a residential mortgage ‘‘(i) the term ‘bona fide personal emer- gency’ may be further defined in regulations for such disability. transaction, as defined in section 103(w)’’ and ‘‘(2) The furnishing of improvements and issued by the Board; inserting ‘‘any extension of credit that is se- alterations under paragraph (1) in connec- ‘‘(ii) the consumer provides to the creditor cured by the dwelling of a consumer’’; tion with the furnishing of medical services a dated, written statement describing the (3) by striking ‘‘before the credit is ex- described in subparagraph (A) or (B) of sub- emergency and specifically waiving or modi- tended, or’’; section (a)(2) shall be subject to the limita- fying those timing requirements, which (4) by inserting ‘‘, which shall be at least 7 tion specified in the applicable subpara- statement shall bear the signature of all con- business days before consummation of the graph.’’. transaction’’ after ‘‘written application’’; sumers entitled to receive the disclosures re- quired by this paragraph; and SEC. 2602. ELIGIBILITY FOR SPECIALLY ADAPTED (5) by striking ‘‘, whichever is earlier’’; and HOUSING BENEFITS AND ASSIST- (6) by striking ‘‘If the’’ and all that follows ‘‘(iii) the creditor provides to the con- ANCE FOR MEMBERS OF THE ARMED through the end of the paragraph and insert- sumers at or before the time of such waiver FORCES WITH SERVICE-CONNECTED ing the following: or modification, the final disclosures re- DISABILITIES AND INDIVIDUALS RE- ‘‘(B) In the case of an extension of credit quired by paragraph (1). SIDING OUTSIDE THE UNITED that is secured by the dwelling of a con- ‘‘(G) The requirements of subparagraphs STATES. sumer, the disclosures provided under sub- (B), (C), (D) and (E) shall not apply to exten- (a) ELIGIBILITY.—Chapter 21 of title 38, paragraph (A), shall be in addition to the sions of credit relating to plans described in United States Code, is amended by inserting other disclosures required by subsection (a), section 101(53D) of title 11, United States after section 2101 the following new section: and shall— Code.’’. ‘‘§ 2101A. Eligibility for benefits and assist- ‘‘(i) state in conspicuous type size and for- (b) CIVIL LIABILITY.—Section 130(a) of the ance: members of the Armed Forces with mat, the following: ‘You are not required to Truth in Lending Act (15 U.S.C. 1640(a)) is service-connected disabilities; individuals complete this agreement merely because you amended— residing outside the United States have received these disclosures or signed a (1) in paragraph (2)(A)(iii), by striking ‘‘not ‘‘(a) MEMBERS WITH SERVICE-CONNECTED loan application.’; and less than $200 or greater than $2,000’’ and in- DISABILITIES.—(1) The Secretary may provide ‘‘(ii) be provided in the form of final disclo- serting ‘‘not less than $400 or greater than assistance under this chapter to a member of sures at the time of consummation of the $4,000’’; and the Armed Forces serving on active duty transaction, in the form and manner pre- (2) in the penultimate sentence of the un- who is suffering from a disability that meets scribed by this section. designated matter following paragraph (4)— applicable criteria for benefits under this ‘‘(C) In the case of an extension of credit (A) by inserting ‘‘or section chapter if the disability is incurred or aggra- that is secured by the dwelling of a con- 128(b)(2)(C)(ii),’’ after ‘‘128(a),’’; and vated in line of duty in the active military, sumer, under which the annual rate of inter- (B) by inserting ‘‘or section 128(b)(2)(C)(ii)’’ naval, or air service. Such assistance shall be est is variable, or with respect to which the before the period. provided to the same extent as assistance is regular payments may otherwise be variable, (c) EFFECTIVE DATES.— provided under this chapter to veterans eligi- in addition to the other disclosures required (1) GENERAL DISCLOSURES.—Except as pro- ble for assistance under this chapter and sub- by subsection (a), the disclosures provided vided in paragraph (2), the amendments ject to the same requirements as veterans under this subsection shall do the following: made by subsection (a) shall become effec- under this chapter.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00123 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5894 CONGRESSIONAL RECORD — SENATE June 19, 2008

‘‘(2) For purposes of this chapter, any ref- (6) VETERANS’ MORTGAGE LIFE INSURANCE.— (1) in subsection (b)(2), by striking erence to a veteran or eligible individual Section 2106 of title 38, United States Code, ‘‘$10,000’’ and inserting ‘‘$12,000’’; shall be treated as a reference to a member is amended— (2) in subsection (d)— of the Armed Forces described in subsection (A) in subsection (a)— (A) in paragraph (1), by striking ‘‘$50,000’’ (a) who is similarly situated to the veteran (i) by striking ‘‘any eligible veteran’’ and and inserting ‘‘$60,000’’; and or other eligible individual so referred to. inserting ‘‘any eligible individual’’; and (B) in paragraph (2), by striking ‘‘$10,000’’ ‘‘(b) BENEFITS AND ASSISTANCE FOR INDIVID- (ii) by striking ‘‘the veterans’’’ and insert- and inserting ‘‘$12,000’’; and UALS RESIDING OUTSIDE THE UNITED ing ‘‘the individual’s’’; (3) by adding at the end the following new STATES.—(1) Subject to paragraph (2), the (B) in subsection (b), by striking ‘‘an eligi- subsection: Secretary may, at the Secretary’s discretion, ble veteran’’ and inserting ‘‘an eligible indi- ‘‘(e)(1) Effective on October 1 of each year provide benefits and assistance under this vidual’’; (beginning in 2009), the Secretary shall in- chapter (other than benefits under section (C) in subsection (e), by striking ‘‘an eligi- crease the amounts described in subsection 2106 of this title) to any individual otherwise ble veteran’’ and inserting ‘‘an individual’’; (b)(2) and paragraphs (1) and (2) of subsection eligible for such benefits and assistance who (D) in subsection (h), by striking ‘‘each (d) in accordance with this subsection. resides outside the United States. veteran’’ and inserting ‘‘each individual’’; ‘‘(2) The increase in amounts under para- ‘‘(2) The Secretary may provide benefits (E) in subsection (i), by striking ‘‘the vet- graph (1) to take effect on October 1 of a year and assistance to an individual under para- eran’s’’ each place it appears and inserting shall be by an amount of such amounts equal graph (1) only if— ‘‘the individual’s’’; to the percentage by which— ‘‘(A) the country or political subdivision in (F) by striking ‘‘the veteran’’ each place it ‘‘(A) the residential home cost-of-construc- which the housing or residence involved is or appears and inserting ‘‘the individual’’; and tion index for the preceding calendar year, will be located permits the individual to (G) by striking ‘‘a veteran’’ each place it exceeds have or acquire a beneficial property inter- appears and inserting ‘‘an individual’’. ‘‘(B) the residential home cost-of-construc- est (as determined by the Secretary) in such (7) HEADING AMENDMENTS.—(A) The heading tion index for the year preceding the year de- housing or residence; and of section 2101 of title 38, United States Code, scribed in subparagraph (A). ‘‘(B) the individual has or will acquire a is amended to read as follows: ‘‘(3) The Secretary shall establish a resi- beneficial property interest (as so deter- dential home cost-of-construction index for mined) in such housing or residence. ‘‘§ 2101. Acquisition and adaptation of hous- ing: eligible veterans’’. the purposes of this subsection. The index ‘‘(c) REGULATIONS.—Benefits and assistance shall reflect a uniform, national average under this chapter by reason of this section (B) The heading of section 2102A of such change in the cost of residential home con- shall be provided in accordance with such title is amended to read as follows: struction, determined on a calendar year regulations as the Secretary may pre- ‘‘§ 2102A. Assistance for individuals residing basis. The Secretary may use an index devel- scribe.’’. temporarily in housing owned by a family oped in the private sector that the Secretary (b) CONFORMING AMENDMENTS.— member’’. determines is appropriate for purposes of (1) REPEAL OF SUPERSEDED AUTHORITY.— Section 2101 of title 38, United States Code, (8) CLERICAL AMENDMENTS.—The table of this subsection.’’. (b) EFFECTIVE DATE.—The amendments is amended— sections at the beginning of chapter 21 of made by this section shall take effect on (A) by striking subsection (c); and title 38, United States Code, is amended— July 1, 2008, and shall apply with respect to (B) by redesignating subsection (d) as sub- (A) by striking the item relating to section payments made in accordance with section section (c). 2101 and inserting the following new item: 2102 of title 38, United States Code, on or (2) LIMITATIONS ON ASSISTANCE.—Section ‘‘2101. Acquisition and adaptation of housing: after that date. 2102 of title 38, United States Code, is amend- eligible veterans.’’; ed— (B) by inserting after the item relating to SEC. 2606. REPORT ON SPECIALLY ADAPTED HOUSING FOR DISABLED INDIVID- (A) in subsection (a)— section 2101, as so amended, the following UALS. (i) by striking ‘‘veteran’’ each place it ap- new item: (a) IN GENERAL.—Not later than December pears and inserting ‘‘individual’’; and ‘‘2101A. Eligibility for benefits and assist- 31, 2008, the Secretary of Veterans Affairs (ii) in paragraph (3), by striking ‘‘vet- ance: members of the Armed shall submit to the Committee on Veterans’ eran’s’’ and inserting ‘‘individual’s’’; Forces with service-connected Affairs of the Senate and the Committee on (B) in subsection (b)(1), by striking ‘‘a vet- disabilities; individuals resid- Veterans’ Affairs of the House of Representa- eran’’ and inserting ‘‘an individual’’; ing outside the United States.’’; tives a report that contains an assessment of (C) in subsection (c)— and the adequacy of the authorities available to (i) by striking ‘‘a veteran’’ and inserting (C) by striking the item relating to section the Secretary under law to assist eligible ‘‘an individual’’; and 2102A and inserting the following new item: disabled individuals in acquiring— (ii) by striking ‘‘the veteran’’ each place it ‘‘2102A. Assistance for individuals residing (1) suitable housing units with special fix- appears and inserting ‘‘the individual’’; and tures or movable facilities required for their (D) in subsection (d), by striking ‘‘a vet- temporarily in housing owned by a family member.’’. disabilities, and necessary land therefor; eran’’ each place it appears and inserting (2) such adaptations to their residences as ‘‘an individual’’. SEC. 2603. SPECIALLY ADAPTED HOUSING AS- SISTANCE FOR INDIVIDUALS WITH are reasonably necessary because of their (3) ASSISTANCE FOR INDIVIDUALS TEMPO- SEVERE BURN INJURIES. disabilities; and RARILY RESIDING IN HOUSING OF FAMILY MEM- Section 2101 of title 38, United States Code, (3) residences already adapted with special BER.—Section 2102A of title 38, United States is amended— features determined by the Secretary to be Code, is amended— (1) in subsection (a)(2), by adding at the reasonably necessary as a result of their dis- (A) by striking ‘‘veteran’’ each place it ap- end the following new subparagraph: abilities. pears (other than in subsection (b)) and in- ‘‘(E) The disability is due to a severe burn (b) FOCUS ON PARTICULAR DISABILITIES.— serting ‘‘individual’’; injury (as determined pursuant to regula- The report required by subsection (a) shall (B) in subsection (a), by striking ‘‘vet- tions prescribed by the Secretary).’’; and set forth a specific assessment of the needs eran’s’’ each place it appears and inserting (2) in subsection (b)(2)— of— ‘‘individual’s’’; and (A) by striking ‘‘either’’ and inserting (1) veterans who have disabilities that are (C) in subsection (b), by striking ‘‘a vet- ‘‘any’’; and not described in subsections (a)(2) and (b)(2) eran’’ each place it appears and inserting (B) by adding at the end the following new of section 2101 of title 38, United States Code; ‘‘an individual’’. subparagraph: and (4) FURNISHING OF PLANS AND SPECIFICA- ‘‘(C) The disability is due to a severe burn (2) other disabled individuals eligible for TIONS.—Section 2103 of title 38, United States injury (as so determined).’’. specially adapted housing under chapter 21 of Code, is amended by striking ‘‘veterans’’ SEC. 2604. EXTENSION OF ASSISTANCE FOR INDI- such title by reason of section 2101A of such both places it appears and inserting ‘‘individ- VIDUALS RESIDING TEMPORARILY title (as added by section 2602(a) of this Act) uals’’. IN HOUSING OWNED BY A FAMILY who have disabilities that are not described (5) CONSTRUCTION OF BENEFITS.—Section MEMBER. in such subsections. 2104 of title 38, United States Code, is amend- Section 2102A(e) of title 38, United States SEC. 2607. REPORT ON SPECIALLY ADAPTED ed— Code, is amended by striking ‘‘after the end HOUSING ASSISTANCE FOR INDIVID- (A) in subsection (a), by striking ‘‘veteran’’ of the five-year period that begins on the UALS WHO RESIDE IN HOUSING each place it appears and inserting ‘‘indi- date of the enactment of the Veterans’ Hous- OWNED BY A FAMILY MEMBER ON vidual’’; and ing Opportunity and Benefits Improvement PERMANENT BASIS. (B) in subsection (b)— Act of 2006’’ and inserting ‘‘after December Not later than December 31, 2008, the Sec- (i) in the first sentence, by striking ‘‘A vet- 31, 2011’’. retary of Veterans Affairs shall submit to eran’’ and inserting ‘‘An individual’’; SEC. 2605. INCREASE IN SPECIALLY ADAPTED the Committee on Veterans’ Affairs of the (ii) in the second sentence, by striking ‘‘a HOUSING BENEFITS FOR DISABLED Senate and the Committee on Veterans’ Af- veteran’’ and inserting ‘‘an individual’’; and VETERANS. fairs of the House of Representatives a re- (iii) by striking ‘‘such veteran’’ each place (a) IN GENERAL.—Section 2102 of title 38, port on the advisability of providing assist- it appears and inserting ‘‘such individual’’. United States Code, is amended— ance under section 2102A of title 38, United

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00124 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5895 States Code, to veterans described in sub- ‘‘(A) which is placed in service by the tax- Any increase under the preceding sentence section (a) of such section, and to members payer after the date of the enactment of this which is not a multiple of $100 shall be of the Armed Forces covered by such section paragraph and before December 31, 2013, and rounded to the nearest multiple of $100.’’. 2102A by reason of section 2101A of title 38, ‘‘(B) which is not federally subsidized for (3) CONFORMING AMENDMENT.—Subclause United States Code (as added by section the taxable year, (II) of section 42(f)(5)(B)(ii) is amended by 2602(a) of this Act), who reside with family the applicable percentage shall not be less striking ‘‘if subsection (e)(3)(A)(ii)(II)’’ and members on a permanent basis. than 9 percent.’’. all that follows and inserting ‘‘if the dollar SEC. 2608. DEFINITION OF ANNUAL INCOME FOR (b) MODIFICATIONS TO DEFINITION OF FEDER- amount in effect under subsection PURPOSES OF SECTION 8 AND ALLY SUBSIDIZED BUILDING.— (e)(3)(A)(ii)(II) were two-thirds of such OTHER PUBLIC HOUSING PRO- (1) IN GENERAL.—Subparagraph (A) of sec- amount.’’. GRAMS. tion 42(i)(2) is amended by striking ‘‘, or any (c) INCREASE IN ALLOWABLE COMMUNITY Section 3(b)(4) of the United States Hous- below market Federal loan,’’. SERVICE FACILITY SPACE FOR SMALL ing Act of 1937 (42 U.S.C. 1437a(3)(b)(4)) is (2) CONFORMING AMENDMENTS.— PROJECTS.—Clause (ii) of section 42(d)(4)(C) amended by inserting ‘‘or any deferred De- (A) Subparagraph (B) of section 42(i)(2) is (relating to limitation) is amended by strik- partment of Veterans Affairs disability bene- amended— ing ‘‘10 percent of the eligible basis of the fits that are received in a lump sum amount (i) by striking ‘‘BALANCE OF LOAN OR’’ in qualified low-income housing project of or in prospective monthly amounts’’ before the heading thereof, which it is a part. For purposes of’’ and in- ‘‘may not be considered’’. (ii) by striking ‘‘loan or’’ in the matter serting ‘‘the sum of— SEC. 2609. PAYMENT OF TRANSPORTATION OF preceding clause (i), and ‘‘(I) 25 percent of so much of the eligible BAGGAGE AND HOUSEHOLD EF- (iii) by striking ‘‘subsection (d)—’’ and all basis of the qualified low-income housing FECTS FOR MEMBERS OF THE that follows and inserting ‘‘subsection (d) project of which it is a part as does not ex- ARMED FORCES WHO RELOCATE the proceeds of such obligation.’’. ceed $15,000,000, plus DUE TO FORECLOSURE OF LEASED ‘‘(II) 10 percent of so much of the eligible HOUSING. (B) Subparagraph (C) of section 42(i)(2) is amended— basis of such project as is not taken into ac- Section 406 of title 37, United States Code, (i) by striking ‘‘or below market Federal count under subclause (I). is amended— loan’’ in the matter preceding clause (i), (1) by redesignating subsections (k) and (l) For purposes of’’. (ii) in clause (i)— as subsections (l) and (m), respectively; and (d) CLARIFICATION OF TREATMENT OF FED- (I) by striking ‘‘or loan (when issued or (2) by inserting after subsection (j) the fol- ERAL GRANTS.—Subparagraph (A) of section made)’’ and inserting ‘‘(when issued)’’, and lowing new subsection (k): 42(d)(5) is amended to read as follows: (II) by striking ‘‘the proceeds of such obli- ‘‘(k) A member of the armed forces who re- ‘‘(A) FEDERAL GRANTS NOT TAKEN INTO AC- gation or loan’’ and inserting ‘‘the proceeds locates from leased or rental housing by rea- COUNT IN DETERMINING ELIGIBLE BASIS.—The of such obligation’’, and son of the foreclosure of such housing is enti- eligible basis of a building shall not include (iii) by striking ‘‘, and such loan is repaid,’’ tled to transportation of baggage and house- any costs financed with the proceeds of a in clause (ii). hold effects under subsection (b)(1) in the Federally funded grant.’’. (C) Paragraph (2) of section 42(i) is amend- same manner, and subject to the same condi- (e) SIMPLIFICATION OF RELATED PARTY ed by striking subparagraphs (D) and (E). tions and limitations, as similarly RULES.—Clause (iii) of section 42(d)(2)(D), be- (c) EFFECTIVE DATE.—The amendments circumstanced members entitled to trans- fore redesignation under subsection (g)(2), is made by this subsection shall apply to build- portation of baggage and household effects amended— ings placed in service after the date of the under that subsection.’’. (1) by striking all that precedes subclause enactment of this Act. (II), DIVISION C—TAX-RELATED PROVISIONS SEC. 3003. MODIFICATIONS TO DEFINITION OF (2) by redesignating subclause (II) as clause SECTION 3000. SHORT TITLE; ETC. ELIGIBLE BASIS. (iii) and moving such clause two ems to the (a) SHORT TITLE.—This division may be (a) INCREASE IN CREDIT FOR CERTAIN STATE left, and cited as the ‘‘Housing Assistance Tax Act of DESIGNATED BUILDINGS.—Subparagraph (C) of (3) by striking the last sentence thereof. 2008’’. section 42(d)(5) (relating to increase in credit (f) EXCEPTION TO 10-YEAR NONACQUISITION (b) AMENDMENT OF 1986 CODE.—Except as for buildings in high cost areas), before re- PERIOD FOR EXISTING BUILDINGS APPLICABLE otherwise expressly provided, whenever in designation under subsection (g), is amended TO FEDERALLY- OR STATE-ASSISTED BUILD- this division an amendment or repeal is ex- by adding at the end the following new INGS.—Paragraph (6) of section 42(d) is pressed in terms of an amendment to, or re- clause: amended to read as follows: peal of, a section or other provision, the ref- ‘‘(v) BUILDINGS DESIGNATED BY STATE HOUS- ‘‘(6) CREDIT ALLOWABLE FOR CERTAIN BUILD- erence shall be considered to be made to a ING CREDIT AGENCY.—Any building which is INGS ACQUIRED DURING 10-YEAR PERIOD DE- section or other provision of the Internal designated by the State housing credit agen- SCRIBED IN PARAGRAPH (2)(B)(ii).— Revenue Code of 1986. cy as requiring the increase in credit under ‘‘(A) IN GENERAL.—Paragraph (2)(B)(ii) TITLE I—HOUSING TAX INCENTIVES this subparagraph in order for such building shall not apply to any Federally- or State- to be financially feasible as part of a quali- Subtitle A—Multi-Family Housing assisted building. fied low-income housing project shall be ‘‘(B) BUILDINGS ACQUIRED FROM INSURED DE- PART I—LOW-INCOME HOUSING TAX treated for purposes of this subparagraph as POSITORY INSTITUTIONS IN DEFAULT.—On ap- CREDIT located in a difficult development area which plication by the taxpayer, the Secretary may SEC. 3001. TEMPORARY INCREASE IN VOLUME is designated for purposes of this subpara- waive paragraph (2)(B)(ii) with respect to CAP FOR LOW-INCOME HOUSING TAX graph. The preceding sentence shall not any building acquired from an insured depos- CREDIT. apply to any building if paragraph (1) of sub- itory institution in default (as defined in sec- Paragraph (3) of section 42(h) is amended section (h) does not apply to any portion of tion 3 of the Federal Deposit Insurance Act) by adding at the end the following new sub- the eligible basis of such building by reason or from a receiver or conservator of such an paragraph: of paragraph (4) of such subsection.’’. institution. ‘‘(I) INCREASE IN STATE HOUSING CREDIT (b) MODIFICATION TO REHABILITATION RE- ‘‘(C) FEDERALLY- OR STATE-ASSISTED BUILD- CEILING FOR 2008 AND 2009.—In the case of cal- QUIREMENTS.— ING.—For purposes of this paragraph— endar years 2008 and 2009— (1) IN GENERAL.—Clause (ii) of section ‘‘(i) FEDERALLY-ASSISTED BUILDING.—The ‘‘(i) the dollar amount in effect under sub- 42(e)(3)(A) is amended— term ‘Federally-assisted building’ means any paragraph (C)(ii)(I) for such calendar year (A) by striking ‘‘10 percent’’ in subclause building which is substantially assisted, fi- (after any increase under subparagraph (H)) (I) and inserting ‘‘20 percent’’, and nanced, or operated under section 8 of the shall be increased by $0.20, and (B) by striking ‘‘$3,000’’ in subclause (II) United States Housing Act of 1937, section ‘‘(ii) the dollar amount in effect under sub- and inserting ‘‘$6,000’’. 221(d)(3), 221(d)(4), or 236 of the National paragraph (C)(ii)(II) for such calendar year (2) INFLATION ADJUSTMENT.—Paragraph (3) Housing Act, or section 515 of the Housing (after any increase under subparagraph (H)) of section 42(e) is amended by adding at the Act of 1949 (as such Acts are in effect on the shall be increased by an amount equal to 10 end the following new subparagraph: date of the enactment of the Tax Reform Act percent of such dollar amount (rounded to ‘‘(D) INFLATION ADJUSTMENT.—In the case of 1986). the next lowest multiple of $5,000).’’. of any expenditures which are treated under ‘‘(ii) STATE-ASSISTED BUILDING.—The term SEC. 3002. DETERMINATION OF CREDIT RATE. paragraph (4) as placed in service during any ‘State-assisted building’ means any building (a) TEMPORARY MINIMUM CREDIT RATE FOR calendar year after 2009, the $6,000 amount in which is substantially assisted, financed, or NON-FEDERALLY SUBSIDIZED NEW BUILD- subparagraph (A)(ii)(II) shall be increased by operated under any State law similar in pur- INGS.—Subsection (b) of section 42 is amend- an amount equal to— poses to any of the laws referred to in clause ed by redesignating paragraph (3) as para- ‘‘(i) such dollar amount, multiplied by (i).’’. graph (4) and by inserting after paragraph (2) ‘‘(ii) the cost-of-living adjustment deter- (g) REPEAL OF DEADWOOD.— the following new paragraph: mined under section 1(f)(3) for such calendar (1) Clause (ii) of section 42(d)(2)(B) is ‘‘(3) TEMPORARY MINIMUM CREDIT RATE FOR year by substituting ‘calendar year 2008’ for amended by striking ‘‘the later of—’’ and all NON-FEDERALLY SUBSIDIZED NEW BUILDINGS.— ‘calendar year 1992’ in subparagraph (B) that follows and inserting ‘‘the date the In the case of any new building— thereof. building was last placed in service,’’.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00125 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5896 CONGRESSIONAL RECORD — SENATE June 19, 2008 (2) Subparagraph (D) of section 42(d)(2) is ‘‘(ix) the energy efficiency of the project, (B) interests in buildings disposed of on or amended by striking clause (i) and by redes- and before such date if— ignating clauses (ii) and (iii) as clauses (i) ‘‘(x) the historic nature of the project.’’. (i) it is reasonably expected that such and (ii), respectively. (e) CONTINUED ELIGIBILITY FOR STUDENTS building will continue to be operated as a (3) Paragraph (5) of section 42(d) is amend- WHO RECEIVED FOSTER CARE ASSISTANCE.— qualified low-income building (within the ed by striking subparagraph (B) and by re- Clause (i) of section 42(i)(3)(D) is amended by meaning of section 42 of the Internal Rev- designating subparagraph (C) as subpara- striking ‘‘or’’ at the end of subclause (I), by enue Code of 1986) for the remaining compli- graph (B). redesignating subclause (II) as subclause ance period (within the meaning of such sec- (h) EFFECTIVE DATE.— (III), and by inserting after subclause (I) the tion) with respect to such building, and (1) IN GENERAL.—Except as otherwise pro- following new subclause: (ii) the taxpayer elects the application of vided in paragraph (2), the amendments ‘‘(II) a student who was previously under this subparagraph with respect to such dis- made by this subsection shall apply to build- the care and placement responsibility of the position. ings placed in service after the date of the State agency responsible for administering a (3) ENERGY EFFICIENCY AND HISTORIC NA- enactment of this Act. plan under part B or part E of title IV of the TURE TAKEN INTO ACCOUNT IN MAKING ALLOCA- (2) REHABILITATION REQUIREMENTS.— Social Security Act, or’’. TIONS.—The amendments made by subsection REATMENT OF RURAL PROJECTS.—Sec- (A) IN GENERAL.—The amendments made (f) T (d) shall apply to allocations made after De- tion 42(i) (relating to definitions and special by subsection (b) shall apply with respect to cember 31, 2008. rules) is amended by adding at the end the housing credit dollar amounts allocated (4) CONTINUED ELIGIBILITY FOR STUDENTS following new paragraph: after the date of the enactment of this Act. WHO RECEIVED FOSTER CARE ASSISTANCE.—The ‘‘(8) TREATMENT OF RURAL PROJECTS.—For (B) BUILDINGS NOT SUBJECT TO ALLOCATION amendments made by subsection (e) shall purposes of this section, in the case of any LIMITS.—To the extent paragraph (1) of sec- apply to determinations made after the date project for residential rental property lo- tion 42(h) of the Internal Revenue Code of of the enactment of this Act. 1986 does not apply to any building by reason cated in a rural area (as defined in section 520 of the Housing Act of 1949), any income (5) TREATMENT OF RURAL PROJECTS.—The of paragraph (4) thereof, the amendments amendment made by subsection (f) shall made by subsection (b) shall apply to build- limitation measured by reference to area median gross income shall be measured by apply to determinations made after the date ings placed in service after the date of the of the enactment of this Act. enactment of this Act. reference to the greater of area median gross income or national non-metropolitan median (6) CLARIFICATION OF GENERAL PUBLIC USE SEC. 3004. OTHER SIMPLIFICATION AND REFORM REQUIREMENT.—The amendment made by OF LOW-INCOME HOUSING TAX IN- income. The preceding sentence shall not CENTIVES. apply with respect to any building if para- subsection (g) shall apply to buildings placed (a) REPEAL PROHIBITION ON MODERATE RE- graph (1) of section 42(h) does not apply by in service before, on, or after the date of the HABILITATION ASSISTANCE.—Paragraph (2) of reason of paragraph (4) thereof to any por- enactment of this Act. section 42(c) (defining qualified low-income tion of the credit determined under this sec- SEC. 3005. TREATMENT OF MILITARY BASIC PAY. building) is amended by striking the flush tion with respect to such building.’’. (a) IN GENERAL.—Subparagraph (B) of sec- sentence at the end. (g) CLARIFICATION OF GENERAL PUBLIC USE tion 142(d)(2) (relating to income of individ- (b) MODIFICATION OF TIME LIMIT FOR INCUR- REQUIREMENT.—Subsection (c) of section 42 is uals; area median gross income) is amend- RING 10 PERCENT OF PROJECT’S COST.—Clause amended by adding at the end the following ed— (ii) of section 42(h)(1)(E) is amended by strik- new paragraph: (1) by striking ‘‘The income’’ and inserting ing ‘‘(as of the later of the date which is 6 ‘‘(3) CLARIFICATION OF GENERAL PUBLIC USE the following: months after the date that the allocation REQUIREMENT.— ‘‘(i) IN GENERAL.—The income’’, and was made or the close of the calendar year in ‘‘(A) IN GENERAL.—A building which meets (2) by adding at the end the following: which the allocation is made)’’ and inserting the requirements of subparagraph (B) shall ‘‘(ii) SPECIAL RULE RELATING TO BASIC HOUS- ‘‘(as of the date which is 1 year after the date not fail to be treated as a qualified low-in- ING ALLOWANCES.—For purposes of deter- that the allocation was made)’’. come building solely because occupancy in mining income under this subparagraph, (c) REPEAL OF BONDING REQUIREMENT ON such building is restricted to individuals who payments under section 403 of title 37, DISPOSITION OF BUILDING.—Paragraph (6) of have special needs, share a common occupa- United States Code, as a basic pay allowance section 42(j) (relating to no recapture on dis- tion or common interests, or are members of for housing shall be disregarded with respect position of building (or interest therein) a specified group based on Federal, State, or to any qualified building. where bond posted) is amended to read as fol- local programs or requirements. ‘‘(iii) QUALIFIED BUILDING.—For purposes of lows: ‘‘(B) BASIC PUBLIC USE REQUIREMENTS.—A clause (ii), the term ‘qualified building’ ‘‘(6) NO RECAPTURE ON DISPOSITION OF building meets the requirements of this sub- means any building located— BUILDING WHICH CONTINUES IN QUALIFIED paragraph if— ‘‘(I) in any county in which is located a USE.— ‘‘(i) such building is used consistent with qualified military installation to which the ‘‘(A) IN GENERAL.—The increase in tax housing policy governing non-discrimination under this subsection shall not apply solely number of members of the Armed Forces of as evidenced by rules and regulations of the the United States assigned to units based by reason of the disposition of a building (or Department of Housing and Urban Develop- an interest therein) if it is reasonably ex- out of such qualified military installation, as ment, of June 1, 2008, has increased by not less than pected that such building will continue to be ‘‘(ii) occupancy in such building is not re- operated as a qualified low-income building 20 percent, as compared to such number on stricted on the basis of membership in a so- December 31, 2005, or for the remaining compliance period with re- cial organization or on the basis of employ- spect to such building. ‘‘(II) in any county adjacent to a county ment by specific employers, and described in subclause (I). ‘‘(B) STATUTE OF LIMITATIONS.—If a build- ‘‘(iii) such building is not part of a hos- ing (or an interest therein) is disposed of ‘‘(iv) QUALIFIED MILITARY INSTALLATION.— pital, nursing home, sanitarium, lifecare fa- For purposes of clause (iii), the term ‘quali- during any taxable year and there is any re- cility, trailer park, or intermediate care fa- fied military installation’ means any mili- duction in the qualified basis of such build- cility for the mentally or physically handi- tary installation or facility the number of ing which results in an increase in tax under capped.’’. members of the Armed Forces of the United this subsection for such taxable or any sub- (h) GAO STUDY REGARDING MODIFICATIONS States assigned to which, as of June 1, 2008, sequent taxable year, then— TO LOW-INCOME HOUSING TAX CREDIT.—Not ‘‘(i) the statutory period for the assess- later than December 31, 2012, the Comp- is not less than 1,000.’’. ment of any deficiency with respect to such troller General of the United States shall (b) EFFECTIVE DATE.—The amendments increase in tax shall not expire before the ex- submit to Congress a report which analyzes made by this section shall apply to— piration of 3 years from the date the Sec- the implementation of the modifications (1) determinations made after the date of retary is notified by the taxpayer (in such made by this subtitle to the low-income the enactment of this Act and before Janu- manner as the Secretary may prescribe) of housing tax credit under section 42 of the In- ary 1, 2012, in the case of any qualified build- such reduction in qualified basis, and ternal Revenue Code of 1986. Such report ing (as defined in section 142(d)(2)(B)(iii) of ‘‘(ii) such deficiency may be assessed be- shall include an analysis of the distribution the Internal Revenue Code of 1986)— fore the expiration of such 3-year period not- of credit allocations before and after the ef- (A) with respect to which housing credit withstanding the provisions of any other law fective date of such modifications. dollar amounts have been allocated before or rule of law which would otherwise prevent (i) EFFECTIVE DATE.— the date of the enactment of this Act, or such assessment.’’. (1) IN GENERAL.—Except as otherwise pro- (B) with respect to buildings placed in (d) ENERGY EFFICIENCY AND HISTORIC NA- vided in this subsection, the amendments service before such date of enactment, to the TURE TAKEN INTO ACCOUNT IN MAKING ALLO- made by this section shall apply to buildings extent paragraph (1) of section 42(h) of such CATIONS.—Subparagraph (C) of section placed in service after the date of the enact- Code does not apply to such building by rea- 42(m)(1) (relating to plans for allocation of ment of this Act. son of paragraph (4) thereof, but only with credit among projects) is amended by strik- (2) REPEAL OF BONDING REQUIREMENT ON respect to bonds issued before such date of ing ‘‘and’’ at the end of clause (vii), by strik- DISPOSITION OF BUILDING.—The amendment enactment, and ing the period at the end of clause (viii) and made by subsection (c) shall apply to— (2) determinations made after the date of inserting a comma, and by adding at the end (A) interests in buildings disposed after the enactment of this Act, in the case of quali- the following new clauses: date of the enactment of this Act, and fied buildings (as so defined)—

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00126 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5897

(A) with respect to which housing credit ‘‘(D) SINGLE-ROOM OCCUPANCY UNITS.—A ending after the date of the enactment of dollar amounts are allocated after the date unit shall not fail to be treated as a residen- this Act. of the enactment of this Act and before Jan- tial unit merely because such unit is a sin- Subtitle B—Single Family Housing uary 1, 2012, or gle-room occupancy unit (within the mean- SEC. 3011. FIRST-TIME HOMEBUYER CREDIT. (B) with respect to which buildings placed ing of section 42).’’. (a) IN GENERAL.—Subpart C of part IV of (d) EFFECTIVE DATE.—The amendments in service after the date of enactment of this subchapter A of chapter 1 is amended by re- made by this section shall apply to deter- Act and before January 1, 2012, to the extent designating section 36 as section 37 and by minations of the status of qualified residen- paragraph (1) of section 42(h) of such Code inserting after section 35 the following new tial rental projects for periods beginning does not apply to such building by reason of section: paragraph (4) thereof, but only with respect after the date of the enactment of this Act, ‘‘SEC. 36. FIRST-TIME HOMEBUYER CREDIT. to bonds issued after such date of enactment with respect to bonds issued before, on, or after such date. ‘‘(a) ALLOWANCE OF CREDIT.—In the case of and before January 1, 2012. an individual who is a first-time homebuyer PART III—REFORMS RELATED TO THE PART II—MODIFICATIONS TO TAX- of a principal residence in the United States LOW-INCOME HOUSING CREDIT AND EXEMPT HOUSING BOND RULES during a taxable year, there shall be allowed TAX-EXEMPT HOUSING BONDS SEC. 3007. RECYCLING OF TAX-EXEMPT DEBT FOR as a credit against the tax imposed by this FINANCING RESIDENTIAL RENTAL SEC. 3009. HOLD HARMLESS FOR REDUCTIONS IN subtitle for such taxable year an amount PROJECTS. AREA MEDIAN GROSS INCOME. equal to 10 percent of the purchase price of (a) IN GENERAL.—Paragraph (2) of section (a) IN GENERAL.—Subsection (i) of section the residence. 142(d), as amended by section 3008, is amend- 146 (relating to treatment of refunding ‘‘(b) LIMITATIONS.— ed by adding at the end the following new issues) is amended by adding at the end the ‘‘(1) DOLLAR LIMITATION.— subparagraph: following new paragraph: ‘‘(A) IN GENERAL.—Except as otherwise pro- ‘‘(6) TREATMENT OF CERTAIN RESIDENTIAL ‘‘(E) HOLD HARMLESS FOR REDUCTIONS IN vided in this paragraph, the credit allowed RENTAL PROJECT BONDS AS REFUNDING BONDS AREA MEDIAN GROSS INCOME.— under subsection (a) shall not exceed $8,000. ‘‘(i) IN GENERAL.—Any determination of IRRESPECTIVE OF OBLIGOR.— ‘‘(B) MARRIED INDIVIDUALS FILING SEPA- area median gross income under subpara- ‘‘(A) IN GENERAL.—If, during the 6-month RATELY.—In the case of a married individual period beginning on the date of a repayment graph (B) with respect to any project for any filing a separate return, subparagraph (A) of a loan financed by an issue 95 percent or calendar year after 2008 shall not be less shall be applied by substituting ‘$4,000’ for more of the net proceeds of which are used to than the area median gross income deter- ‘$8,000’. mined under such subparagraph with respect provide projects described in section 142(d), ‘‘(C) OTHER INDIVIDUALS.—If two or more such repayment is used to provide a new loan to such project for the calendar year pre- individuals who are not married purchase a for any project so described, any bond which ceding the calendar year for which such de- principal residence, the amount of the credit is issued to refinance such issue shall be termination is made. allowed under subsection (a) shall be allo- treated as a refunding issue to the extent the ‘‘(ii) SPECIAL RULE FOR CERTAIN CENSUS cated among such individuals in such man- principal amount of such refunding issue CHANGES.—In the case of a HUD hold harm- ner as the Secretary may prescribe, except does not exceed the principal amount of the less impacted project, the area median gross that the total amount of the credits allowed bonds refunded. income with respect to such project for any to all such individuals shall not exceed ‘‘(B) LIMITATIONS.—Subparagraph (A) shall calendar year after 2008 (hereafter in this $8,000. clause referred to as the current calendar apply to only one refunding of the original ‘‘(2) LIMITATION BASED ON MODIFIED AD- year) shall be the greater of the amount de- issue and only if— JUSTED GROSS INCOME.— termined without regard to this clause or ‘‘(i) the refunding issue is issued not later ‘‘(A) IN GENERAL.—The amount allowable than 4 years after the date on which the the sum of— as a credit under subsection (a) (determined original issue was issued, ‘‘(I) the area median gross income deter- without regard to this paragraph) for the ‘‘(ii) the latest maturity date of any bond mined under the HUD hold harmless policy taxable year shall be reduced (but not below of the refunding issue is not later than 34 with respect to such project for calendar zero) by the amount which bears the same years after the date on which the refunded year 2008, plus ratio to the amount which is so allowable bond was issued, and ‘‘(II) any increase in the area median gross as— ‘‘(iii) the refunding issue is approved in ac- income determined under subparagraph (B) ‘‘(i) the excess (if any) of— cordance with section 147(f) before the (determined without regard to the HUD hold ‘‘(I) the taxpayer’s modified adjusted gross issuance of the refunding issue.’’. harmless policy and this subparagraph) with income for such taxable year, over (b) LOW-INCOME HOUSING CREDIT.—Clause respect to such project for the current cal- ‘‘(II) $75,000 ($150,000 in the case of a joint (ii) of section 42(h)(4)(A) is amended by in- endar year over the area median gross in- return), bears to serting ‘‘or such financing is refunded as de- come (as so determined) with respect to such ‘‘(ii) $20,000. project for calendar year 2008. scribed in section 146(i)(6)’’ before the period ‘‘(B) MODIFIED ADJUSTED GROSS INCOME.— at the end. ‘‘(iii) HUD HOLD HARMLESS POLICY.—The For purposes of subparagraph (A), the term (c) EFFECTIVE DATE.—The amendments term ‘HUD hold harmless policy’ means the ‘modified adjusted gross income’ means the made by this section shall apply to repay- regulations under which a policy similar to adjusted gross income of the taxpayer for the ments of loans received after the date of the the rules of clause (i) applied to prevent a taxable year increased by any amount ex- enactment of this Act. change in the method of determining area cluded from gross income under section 911, SEC. 3008. COORDINATION OF CERTAIN RULES median gross income from resulting in a re- 931, or 933. APPLICABLE TO LOW-INCOME HOUS- duction in the area median gross income de- ‘‘(c) DEFINITIONS.—For purposes of this sec- ING CREDIT AND QUALIFIED RESI- termined with respect to certain projects in tion— DENTIAL RENTAL PROJECT EXEMPT calendar years 2007 and 2008. FACILITY BONDS. ‘‘(1) FIRST-TIME HOMEBUYER.—The term ‘‘(iv) HUD HOLD HARMLESS IMPACTED (a) DETERMINATION OF NEXT AVAILABLE ‘first-time homebuyer’ means any individual PROJECT.—The term ‘HUD hold harmless im- UNIT.—Paragraph (3) of section 142(d) (relat- if such individual (and if married, such indi- pacted project’ means any project with re- ing to current income determinations) is vidual’s spouse) had no present ownership in- spect to which area median gross income was amended by adding at the end the following terest in a principal residence during the 3- determined under subparagraph (B) for cal- new subparagraph: year period ending on the date of the pur- endar year 2007 or 2008 if such determination ‘‘(C) EXCEPTION FOR PROJECTS WITH RESPECT chase of the principal residence to which this would have been less but for the HUD hold TO WHICH AFFORDABLE HOUSING CREDIT IS AL- section applies. harmless policy.’’. LOWED.—In the case of a project with respect ‘‘(2) PRINCIPAL RESIDENCE.—The term ‘prin- (b) EFFECTIVE DATE.—The amendment cipal residence’ has the same meaning as to which credit is allowed under section 42, made by this section shall apply to deter- when used in section 121. the second sentence of subparagraph (B) minations of area median gross income for ‘‘(3) PURCHASE.— shall be applied by substituting ‘building calendar years after 2008. (within the meaning of section 42)’ for ‘‘(A) IN GENERAL.—The term ‘purchase’ SEC. 3010. EXCEPTION TO ANNUAL CURRENT IN- means any acquisition, but only if— ‘project’.’’. COME DETERMINATION REQUIRE- (b) STUDENTS.—Paragraph (2) of section MENT WHERE DETERMINATION NOT ‘‘(i) the property is not acquired from a 142(d) (relating to definitions and special RELEVANT. person related to the person acquiring it, and rules) is amended by adding at the end the (a) IN GENERAL.—Subparagraph (A) of sec- ‘‘(ii) the basis of the property in the hands following new subparagraph: tion 142(d)(3) is amended by adding at the of the person acquiring it is not deter- ‘‘(C) STUDENTS.—Rules similar to the rules end the following new sentence: ‘‘The pre- mined— of 42(i)(3)(D) shall apply for purposes of this ceding sentence shall not apply with respect ‘‘(I) in whole or in part by reference to the subsection.’’. to any project for any year if during such adjusted basis of such property in the hands (c) SINGLE-ROOM OCCUPANCY UNITS.—Para- year no residential unit in the project is oc- of the person from whom acquired, or graph (2) of section 142(d) (relating to defini- cupied by a new resident whose income ex- ‘‘(II) under section 1014(a) (relating to tions and special rules), as amended by sub- ceeds the applicable income limit.’’. property acquired from a decedent). section (b), is amended by adding at the end (b) EFFECTIVE DATE.—The amendment ‘‘(B) CONSTRUCTION.—A residence which is the following new subparagraph: made by this section shall apply to years constructed by the taxpayer shall be treated

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00127 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5898 CONGRESSIONAL RECORD — SENATE June 19, 2008

as purchased by the taxpayer on the date the ginning on the date of the disposition or ces- ‘‘(B) EXCEPTION.—The real property tax de- taxpayer first occupies such residence. sation referred to in paragraph (2). Para- duction shall not be allowed in the case of a ‘‘(4) PURCHASE PRICE.—The term ‘purchase graph (2) shall apply to such new principal taxpayer living in a jurisdiction in which the price’ means the adjusted basis of the prin- residence during the recapture period in the rate of tax for all residential real property cipal residence on the date such residence is same manner as if such new principal resi- taxes is increased, net of any tax rebates, purchased. dence were the converted residence. through rate increases or the repeal or re- ‘‘(5) RELATED PERSONS.—A person shall be ‘‘(C) TRANSFERS BETWEEN SPOUSES OR INCI- duction of otherwise applicable deductions, treated as related to another person if the DENT TO DIVORCE.—In the case of a transfer of credits, or offsets, at any time after the date relationship between such persons would re- a residence to which section 1041(a) applies— of the enactment of this paragraph and be- sult in the disallowance of losses under sec- ‘‘(i) paragraph (2) shall not apply to such fore December 31, 2008. This subparagraph tion 267 or 707(b) (but, in applying section transfer, and shall not apply in the case of a jurisdiction 267(b) and (c) for purposes of this section, ‘‘(ii) in the case of taxable years ending in which the rate of tax for all residential paragraph (4) of section 267(c) shall be treat- after such transfer, paragraphs (1) and (2) real property taxes is increased pursuant to ed as providing that the family of an indi- shall apply to the transferee in the same an equalization policy in effect before the vidual shall include only his spouse, ances- manner as if such transferee were the trans- date of the enactment of this paragraph or as tors, and lineal descendants). feror (and shall not apply to the transferor). a result of any votes of the residents of such ‘‘(d) EXCEPTIONS.—No credit under sub- ‘‘(5) JOINT RETURNS.—In the case of a credit jurisdiction to increase funding for pre- section (a) shall be allowed to any taxpayer allowed under subsection (a) with respect to school, primary, secondary, or higher edu- for any taxable year with respect to the pur- a joint return, half of such credit shall be cation.’’. chase of a residence if— treated as having been allowed to each indi- (c) EFFECTIVE DATE.—The amendments ‘‘(1) a credit under section 1400C (relating vidual filing such return for purposes of this made by this section shall apply to taxable to first-time homebuyer in the District of subsection. years beginning after December 31, 2007. Columbia) is allowable to the taxpayer (or ‘‘(6) RECAPTURE PERIOD.—For purposes of Subtitle C—General Provisions the taxpayer’s spouse) for such taxable year this subsection, the term ‘recapture period’ SEC. 3021. TEMPORARY LIBERALIZATION OF TAX- or any prior taxable year, means the 15 taxable years beginning with EXEMPT HOUSING BOND RULES. ‘‘(2) the residence is financed by the pro- the second taxable year following the tax- (a) TEMPORARY INCREASE IN VOLUME CAP.— ceeds of a qualified mortgage issue the inter- able year in which the purchase of the prin- (1) IN GENERAL.—Subsection (d) of section est on which is exempt from tax under sec- cipal residence for which a credit is allowed 146 is amended by adding at the end the fol- tion 103, under subsection (a) was made. lowing new paragraph: ‘‘(3) the taxpayer is a nonresident alien, or ‘‘(g) APPLICATION OF SECTION.—This section ‘‘(5) INCREASE AND SET ASIDE FOR HOUSING ‘‘(4) the taxpayer disposes of such residence shall only apply to a principal residence pur- BONDS FOR 2008.— (or such residence ceases to be the principal chased by the taxpayer on or after April 9, ‘‘(A) INCREASE FOR 2008.—In the case of cal- residence of the taxpayer (and, if married, 2008, and before April 1, 2009.’’. endar year 2008, the State ceiling for each the taxpayer’s spouse)) before the close of (b) CONFORMING AMENDMENTS.— State shall be increased by an amount equal such taxable year. (1) Section 26(b)(2) is amended by striking to $11,000,000,000 multiplied by a fraction— ‘‘(e) REPORTING.—If the Secretary requires ‘‘and’’ at the end of subparagraph (U), by ‘‘(i) the numerator of which is the State information reporting under section 6045 by striking the period and inserting ‘‘, and’’ and ceiling applicable to the State for calendar a person described in subsection (e)(2) there- the end of subparagraph (V), and by inserting year 2008, determined without regard to this of to verify the eligibility of taxpayers for after subparagraph (V) the following new paragraph, and the credit allowable by this section, the ex- subparagraph: ‘‘(ii) the denominator of which is the sum ception provided by section 6045(e) shall not ‘‘(W) section 36(f) (relating to recapture of of the State ceilings determined under apply. homebuyer credit).’’. clause (i) for all States. ‘‘(f) RECAPTURE OF CREDIT.— (2) Section 6211(b)(4)(A) is amended by ‘‘(B) SET ASIDE.— ‘‘(1) IN GENERAL.—Except as otherwise pro- striking ‘‘34,’’ and all that follows through ‘‘(i) IN GENERAL.—Any amount of the State vided in this subsection, if a credit under ‘‘6428’’ and inserting ‘‘34, 35, 36, 53(e), and ceiling for any State which is attributable to subsection (a) is allowed to a taxpayer, the 6428’’. an increase under this paragraph shall be al- tax imposed by this chapter shall be in- (3) Section 1324(b)(2) of title 31, United located solely for one or more qualified hous- creased by 62⁄3 percent of the amount of such States Code, is amended by inserting ‘‘, 36,’’ ing issues. credit for each taxable year in the recapture after ‘‘section 35’’. ‘‘(ii) QUALIFIED HOUSING ISSUE.—For pur- period. (4) The table of sections for subpart C of poses of this paragraph, the term ‘qualified ‘‘(2) ACCELERATION OF RECAPTURE.—If a tax- part IV of subchapter A of chapter 1 is housing issue’ means— payer disposes of the principal residence amended by redesignating the item relating ‘‘(I) an issue described in section 142(a)(7) with respect to which a credit was allowed to section 36 as an item relating to section 37 (relating to qualified residential rental under subsection (a) (or such residence and by inserting before such item the fol- projects), or ceases to be the principal residence of the lowing new item: ‘‘(II) a qualified mortgage issue (deter- taxpayer (and, if married, the taxpayer’s mined by substituting ‘12-month period’ for spouse)) before the end of the recapture pe- ‘‘Sec. 36. First-time homebuyer credit.’’. (c) EFFECTIVE DATE.—The amendments ‘42-month period’ each place it appears in riod— made by this section shall apply to resi- section 143(a)(2)(D)(i)).’’. ‘‘(A) the tax imposed by this chapter for dences purchased on or after April 9, 2008, in (2) CARRYFORWARD OF UNUSED LIMITA- the taxable year of such disposition or ces- taxable years ending on or after such date. TIONS.—Subsection (f) of section 146 is sation, shall be increased by the excess of SEC. 3012. ADDITIONAL STANDARD DEDUCTION amended by adding at the end the following the amount of the credit allowed over the FOR REAL PROPERTY TAXES FOR new paragraph: amounts of tax imposed by paragraph (1) for NONITEMIZERS. ‘‘(6) SPECIAL RULES FOR INCREASED VOLUME preceding taxable years, and (a) IN GENERAL.—Section 63(c)(1) (defining CAP UNDER SUBSECTION (d)(5).—No amount ‘‘(B) paragraph (1) shall not apply with re- standard deduction) is amended by striking which is attributable to the increase under spect to such credit for such taxable year or ‘‘and’’ at the end of subparagraph (A), by subsection (d)(5) may be used— any subsequent taxable year. striking the period at the end of subpara- ‘‘(A) for any issue other than a qualified ‘‘(3) LIMITATION BASED ON GAIN.—In the graph (B) and inserting ‘‘, and’’, and by add- housing issue (as defined in subsection case of the sale of the principal residence to ing at the end the following new subpara- (d)(5)), or a person who is not related to the taxpayer, graph: ‘‘(B) to issue any bond after calendar year the increase in tax determined under para- ‘‘(C) in the case of any taxable year begin- 2010.’’. graph (2) shall not exceed the amount of gain ning in 2008, the real property tax deduc- (b) TEMPORARY RULE FOR USE OF QUALIFIED (if any) on such sale. Solely for purposes of tion.’’. MORTGAGE BONDS PROCEEDS FOR SUBPRIME the preceding sentence, the adjusted basis of (b) DEFINITION.—Section 63(c) is amended REFINANCING LOANS.— such residence shall be reduced by the by adding at the end the following new para- (1) IN GENERAL.—Section 143(k) (relating to amount of the credit allowed under sub- graph: other definitions and special rules) is amend- section (a) to the extent not previously re- ‘‘(8) REAL PROPERTY TAX DEDUCTION.— ed by adding at the end the following new captured under paragraph (1). ‘‘(A) IN GENERAL.—For purposes of para- paragraph: ‘‘(4) EXCEPTIONS.— graph (1), the real property tax deduction is ‘‘(12) SPECIAL RULES FOR SUBPRIME ‘‘(A) DEATH OF TAXPAYER.—Paragraphs (1) the lesser of— REFINANCINGS.— and (2) shall not apply to any taxable year ‘‘(i) the amount allowable as a deduction ‘‘(A) IN GENERAL.—Notwithstanding the re- ending after the date of the taxpayer’s death. under this chapter for State and local taxes quirements of subsection (i)(1), the proceeds ‘‘(B) INVOLUNTARY CONVERSION.—Paragraph described in section 164(a)(1), or of a qualified mortgage issue may be used to (2) shall not apply in the case of a residence ‘‘(ii) $500 ($1,000 in the case of a joint re- refinance a mortgage on a residence which which is compulsorily or involuntarily con- turn). was originally financed by the mortgagor verted (within the meaning of section Any taxes taken into account under section through a qualified subprime loan. 1033(a)) if the taxpayer acquires a new prin- 62(a) shall not be taken into account under ‘‘(B) SPECIAL RULES.—In applying subpara- cipal residence during the 2-year period be- this paragraph. graph (A) to any refinancing—

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00128 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5899

‘‘(i) subsection (a)(2)(D)(i) shall be applied (d) EFFECTIVE DATE.— transaction, other than the transferor’s by substituting ‘12-month period’ for ‘42- (1) HOUSING BONDS.—The amendments agent, and month period’ each place it appears, made by subsection (a) shall apply to bonds ‘‘(B) the transferee’s agent.’’. ‘‘(ii) subsection (d) (relating to 3-year re- issued after the date of the enactment of this (c) EXEMPTION NOT TO APPLY IF KNOWL- quirement) shall not apply, and Act. EDGE OR NOTICE THAT AFFIDAVIT OR STATE- ‘‘(iii) subsection (e) (relating to purchase (2) LOW INCOME HOUSING CREDIT.—The MENT IS FALSE.— price requirement) shall be applied by using amendments made by subsection (b) shall (1) IN GENERAL.—Paragraph (7) of section the market value of the residence at the apply to credits determined under section 42 1445(b) (relating to special rules for para- time of refinancing in lieu of the acquisition of the Internal Revenue Code of 1986 to the graphs (2) and (3)) is amended to read as fol- cost. extent attributable to buildings placed in lows: ‘‘(C) QUALIFIED SUBPRIME LOAN.—The term service after December 31, 2007. ‘‘(7) SPECIAL RULES FOR PARAGRAPHS (2), (3), ‘qualified subprime loan’ means an adjust- (3) REHABILITATION CREDIT.—The amend- AND (9).—Paragraph (2), (3), or (9) (as the case able rate single-family residential mortgage ments made by subsection (c) shall apply to may be) shall not apply to any disposition— loan made after December 31, 2001, and before credits determined under section 47 of the In- ‘‘(A) if— January 1, 2008, that the bond issuer deter- ternal Revenue Code of 1986 to the extent at- ‘‘(i) the transferee or qualified substitute mines would be reasonably likely to cause fi- tributable to qualified rehabilitation expend- has actual knowledge that the affidavit re- nancial hardship to the borrower if not refi- itures properly taken into account for peri- ferred to in such paragraph, or the statement nanced. ods after December 31, 2007. referred to in paragraph (9)(A)(ii), is false, or ‘‘(D) TERMINATION.—This paragraph shall SEC. 3023. BONDS GUARANTEED BY FEDERAL ‘‘(ii) the transferee or qualified substitute not apply to any bonds issued after Decem- HOME LOAN BANKS ELIGIBLE FOR receives a notice (as described in subsection ber 31, 2010.’’. TREATMENT AS TAX-EXEMPT BONDS. (d)) from a transferor’s agent, transferee’s (c) EFFECTIVE DATE.—The amendments (a) IN GENERAL.—Subparagraph (A) of sec- agent, or qualified substitute that such affi- made by this section shall apply to bonds tion 149(b)(3) (relating to exceptions for cer- davit or statement is false, or issued after the date of the enactment of this tain insurance programs) is amended by ‘‘(B) if the Secretary by regulations re- Act. striking ‘‘or’’ at the end of clause (ii), by quires the transferee or qualified substitute SEC. 3022. REPEAL OF ALTERNATIVE MINIMUM striking the period at the end of clause (iii) TAX LIMITATIONS ON TAX-EXEMPT to furnish a copy of such affidavit or state- and inserting ‘‘, or’’ and by adding at the end ment to the Secretary and the transferee or HOUSING BONDS, LOW-INCOME the following new clause: HOUSING TAX CREDIT, AND REHA- qualified substitute fails to furnish a copy of BILITATION CREDIT. ‘‘(iv) subject to subparagraph (E), any such affidavit or statement to the Secretary (a) TAX-EXEMPT INTEREST ON CERTAIN guarantee by a Federal home loan bank at such time and in such manner as required HOUSING BONDS EXEMPTED FROM ALTER- made in connection with the original by such regulations.’’. issuance of a bond during the period begin- NATIVE MINIMUM TAX.— (2) LIABILITY.— ning on the date of the enactment of this (1) IN GENERAL.—Subparagraph (C) of sec- (A) NOTICE.—Paragraph (1) of section tion 57(a)(5) (relating to specified private ac- clause and ending on December 31, 2010 (or a 1445(d) (relating to notice of false affidavit; tivity bonds) is amended by redesignating renewal or extension of a guarantee so foreign corporations) is amended to read as clauses (iii) and (iv) as clauses (iv) and (v), made).’’. follows: (b) SAFETY AND SOUNDNESS REQUIRE- respectively, and by inserting after clause ‘‘(1) NOTICE OF FALSE AFFIDAVIT; FOREIGN MENTS.—Paragraph (3) of section 149(b) is (ii) the following new clause: CORPORATIONS.—If— amended by adding at the end the following ‘‘(iii) EXCEPTION FOR CERTAIN HOUSING ‘‘(A) the transferor furnishes the transferee new subparagraph: BONDS.—For purposes of clause (i), the term or qualified substitute an affidavit described ‘‘(E) SAFETY AND SOUNDNESS REQUIREMENTS ‘private activity bond’ shall not include any in paragraph (2) of subsection (b) or a domes- FOR FEDERAL HOME LOAN BANKS.—Clause (iv) bond issued after the date of the enactment tic corporation furnishes the transferee an of subparagraph (A) shall not apply to any of this clause if such bond is— affidavit described in paragraph (3) of sub- guarantee by a Federal home loan bank un- ‘‘(I) an exempt facility bond issued as part section (b), and less such bank meets safety and soundness of an issue 95 percent or more of the net pro- ‘‘(B) in the case of— collateral requirements for such guarantees ceeds of which are to be used to provide ‘‘(i) any transferor’s agent— which are at least as stringent as such re- qualified residential rental projects (as de- ‘‘(I) such agent has actual knowledge that quirements which apply under regulations fined in section 142(d)), such affidavit is false, or applicable to such guarantees by Federal ‘‘(II) a qualified mortgage bond (as defined ‘‘(II) in the case of an affidavit described in home loan banks as in effect on April 9, in section 143(a)), or subsection (b)(2) furnished by a corporation, 2008.’’. ‘‘(III) a qualified veterans’ mortgage bond such corporation is a foreign corporation, or (as defined in section 143(b)). (c) EFFECTIVE DATE.—The amendments made by this section shall apply to guaran- ‘‘(ii) any transferee’s agent or qualified The preceding sentence shall not apply to substitute, such agent or substitute has ac- any refunding bond unless such preceding tees made after the date of the enactment of this Act. tual knowledge that such affidavit is false, sentence applied to the refunded bond (or in such agent or qualified substitute shall so SEC. 3024. MODIFICATION OF RULES PERTAINING the case of a series of refundings, the origi- notify the transferee at such time and in nal bond).’’. TO FIRPTA NONFOREIGN AFFIDA- VITS. such manner as the Secretary shall require (2) NO ADJUSTMENT TO ADJUSTED CURRENT (a) IN GENERAL.—Subsection (b) of section by regulations.’’. EARNINGS.—Subparagraph (B) of section 1445 (relating to exemptions) is amended by (B) FAILURE TO FURNISH NOTICE.—Para- 56(g)(4) is amended by adding at the end the graph (2) of section 1445(d) (relating to fail- following new clause: adding at the end the following: ‘‘(9) ALTERNATIVE PROCEDURE FOR FUR- ure to furnish notice) is amended to read as ‘‘(iii) TAX EXEMPT INTEREST ON CERTAIN NISHING NONFOREIGN AFFIDAVIT.—For pur- follows: HOUSING BONDS.—Clause (i) shall not apply in ‘‘(2) FAILURE TO FURNISH NOTICE.— the case of any interest on a bond to which poses of paragraphs (2) and (7)— ‘‘(A) IN GENERAL.—Paragraph (2) shall be ‘‘(A) IN GENERAL.—If any transferor’s section 57(a)(5)(C)(iii) applies.’’. agent, transferee’s agent, or qualified sub- (b) ALLOWANCE OF LOW-INCOME HOUSING treated as applying to a transaction if, in stitute is required by paragraph (1) to fur- CREDIT AGAINST ALTERNATIVE MINIMUM connection with a disposition of a United nish notice, but fails to furnish such notice TAX.—Subparagraph (B) of section 38(c)(4) States real property interest— at such time or times and in such manner as (relating to specified credits) is amended by ‘‘(i) the affidavit specified in paragraph (2) may be required by regulations, such agent redesignating clauses (ii) through (iv) as is furnished to a qualified substitute, and clauses (iii) through (v) and inserting after ‘‘(ii) the qualified substitute furnishes a or substitute shall have the same duty to de- clause (i) the following new clause: statement to the transferee stating, under duct and withhold that the transferee would ‘‘(ii) the credit determined under section 42 penalty of perjury, that the qualified sub- have had if such agent or substitute had to the extent attributable to buildings stitute has such affidavit in his possession. complied with paragraph (1). placed in service after December 31, 2007,’’. ‘‘(B) REGULATIONS.—The Secretary shall ‘‘(B) LIABILITY LIMITED TO AMOUNT OF COM- (c) ALLOWANCE OF REHABILITATION CREDIT prescribe such regulations as may be nec- PENSATION.—An agent’s or substitute’s liabil- AGAINST ALTERNATIVE MINIMUM TAX.—Sub- essary or appropriate to carry out this para- ity under subparagraph (A) shall be limited paragraph (B) of section 38(c)(4), as amended graph.’’. to the amount of compensation the agent or by subsection (b), is amended by striking (b) QUALIFIED SUBSTITUTE.—Subsection (f) substitute derives from the transaction.’’. ‘‘and’’ at the end of clause (iv), by redesig- of section 1445 (relating to definitions) is (C) CONFORMING AMENDMENT.—The heading nating clause (v) as clause (vi), and by in- amended by adding at the end the following for section 1445(d) is amended by striking serting after clause (iv) the following new new paragraph: ‘‘OR TRANSFEREE’S AGENTS’’ and inserting ‘‘, clause: ‘‘(6) QUALIFIED SUBSTITUTE.—The term TRANSFEREE’S AGENTS, OR QUALIFIED SUB- ‘‘(v) the credit determined under section 47 ‘qualified substitute’ means, with respect to STITUTES’’. to the extent attributable to qualified reha- a disposition of a United States real property (d) EFFECTIVE DATE.—The amendments bilitation expenditures properly taken into interest— made by this section shall apply to disposi- account for periods after December 31, 2007, ‘‘(A) the person (including any attorney or tions of United States real property interests and’’. title company) responsible for closing the after the date of the enactment of this Act.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00129 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5900 CONGRESSIONAL RECORD — SENATE June 19, 2008

SEC. 3025. MODIFICATION OF DEFINITION OF ‘‘(i) any item of income or gain described ‘‘(K) CASH.—If the real estate investment TAX-EXEMPT USE PROPERTY FOR in subsection (c)(2), trust or its qualified business unit (as de- PURPOSES OF THE REHABILITATION ‘‘(ii) the acquisition or ownership of obliga- fined in section 989) uses any foreign cur- CREDIT. tions (other than foreign currency gain at- rency as its functional currency (as defined (a) IN GENERAL.—Subclause (I) of section tributable to any item of income or gain de- in section 985(b)), the term ‘cash’ includes 47(c)(2)(B)(v) is amended by striking ‘‘section scribed in clause (i)), or such foreign currency but only to the extent 168(h)’’ and inserting ‘‘section 168(h), except ‘‘(iii) becoming or being the obligor under such foreign currency— that ‘50 percent’ shall be substituted for ‘35 obligations (other than foreign currency gain ‘‘(i) is held for use in the normal course of percent’ in paragraph (1)(B)(iii) thereof’’. attributable to any item of income or gain the activities of the trust or qualified busi- (b) EFFECTIVE DATE.—The amendments described in clause (i)), and ness unit which give rise to items of income made by this section shall apply to expendi- ‘‘(C) any other foreign currency gain as de- or gain described in paragraph (2) or (3) of tures properly taken into account for periods termined by the Secretary. subsection (c) or are directly related to ac- after December 31, 2007. ‘‘(4) EXCEPTION FOR INCOME FROM SUBSTAN- quiring or holding assets described in sub- SEC. 3026. EXTENSION OF SPECIAL RULE FOR TIAL AND REGULAR TRADING.—Notwith- section (c)(4), and MORTGAGE REVENUE BONDS FOR standing this subsection or any other provi- ‘‘(ii) is not held in connection with an ac- RESIDENCES LOCATED IN DISASTER AREAS. sion of this part, any section 988 gain derived tivity described in subsection (n)(4).’’. by a corporation, trust, or association from (a) IN GENERAL.—Paragraph (11) of section SEC. 3033. CONFORMING FOREIGN CURRENCY engaging in substantial and regular trading 143(k) is amended— REVISIONS. or dealing in securities (as defined in section (1) by striking ‘‘December 31, 1996’’ and in- (a) NET INCOME FROM FORECLOSURE PROP- 475(c)(2)) shall constitute gross income which serting ‘‘May 1, 2008’’, and ERTY.—Clause (i) of section 857(b)(4)(B) is does not qualify under paragraph (2) or (3) of (2) by striking ‘‘January 1, 1999’’ and in- amended to read as follows: subsection (c). This paragraph shall not serting ‘‘January 1, 2010’’. ‘‘(i) gain (including any foreign currency apply to income which does not constitute (b) EFFECTIVE DATE.—The amendments gain, as defined in section 988(b)(1)) from the made by this section shall apply to bonds gross income by reason of subsection sale or other disposition of foreclosure prop- issued after May 1, 2008. (c)(5)(G).’’. erty described in section 1221(a)(1) and the (b) ADDITION TO REIT HEDGING RULE.—Sub- gross income for the taxable year derived TITLE II—REFORMS RELATED TO REAL paragraph (G) of section 856(c)(5) is amended from foreclosure property (as defined in sec- ESTATE INVESTMENT TRUSTS to read as follows: tion 856(e)), but only to the extent such gross Subtitle A—Foreign Currency and Other ‘‘(G) TREATMENT OF CERTAIN HEDGING IN- income is not described in (or, in the case of Qualified Activities STRUMENTS.—Except to the extent as deter- foreign currency gain, not attributable to SEC. 3031. REVISIONS TO REIT INCOME TESTS. mined by the Secretary— gross income described in) section 856(c)(3) (a) FOREIGN CURRENCY GAINS NOT GROSS ‘‘(i) any income of a real estate investment other than subparagraph (F) thereof, over’’. INCOME IN APPLYING REIT INCOME TESTS.— trust from a hedging transaction (as defined (b) NET INCOME FROM PROHIBITED TRANS- Section 856 (defining real estate investment in clause (ii) or (iii) of section 1221(b)(2)(A)) ACTIONS.—Clause (i) of section 857(b)(6)(B) is trust) is amended by adding at the end the which is clearly identified pursuant to sec- amended to read as follows: following new subsection: tion 1221(a)(7), including gain from the sale ‘‘(i) the term ‘net income derived from pro- ‘‘(n) RULES REGARDING FOREIGN CURRENCY or disposition of such a transaction, shall hibited transactions’ means the excess of the TRANSACTIONS.— not constitute gross income under para- gain (including any foreign currency gain, as ‘‘(1) IN GENERAL.—For purposes of this graphs (2) and (3) to the extent that the defined in section 988(b)(1)) from prohibited part— transaction hedges any indebtedness in- transactions over the deductions (including ‘‘(A) passive foreign exchange gain for any curred or to be incurred by the trust to ac- any foreign currency loss, as defined in sec- taxable year shall not constitute gross in- quire or carry real estate assets, and tion 988(b)(2)) allowed by this chapter which come for purposes of subsection (c)(2), and ‘‘(ii) any income of a real estate invest- are directly connected with prohibited trans- ‘‘(B) real estate foreign exchange gain for ment trust from a transaction entered into actions;’’. any taxable year shall not constitute gross by the trust primarily to manage risk of cur- Subtitle B—Taxable REIT Subsidiaries income for purposes of subsection (c)(3). rency fluctuations with respect to any item of income or gain described in paragraph (2) SEC. 3041. CONFORMING TAXABLE REIT SUB- ‘‘(2) REAL ESTATE FOREIGN EXCHANGE SIDIARY ASSET TEST. GAIN.—For purposes of this subsection, the or (3) (or any property which generates such income or gain), including gain from the ter- Section 856(c)(4)(B)(ii) is amended— term ‘real estate foreign exchange gain’ (1) by striking ‘‘20 percent’’ and inserting means— mination of such a transaction, shall not constitute gross income under paragraphs (2) ‘‘25 percent’’, and ‘‘(A) foreign currency gain (as defined in (2) by striking ‘‘REIT subsidiaries’’ and all section 988(b)(1)) which is attributable to— and (3), but only if such transaction is clear- ly identified as such before the close of the that follows, and inserting ‘‘REIT subsidi- ‘‘(i) any item of income or gain described aries,’’. in subsection (c)(3), day on which it was acquired, originated, or ‘‘(ii) the acquisition or ownership of obliga- entered into (or such other time as the Sec- Subtitle C—Dealer Sales tions secured by mortgages on real property retary may prescribe).’’. SEC. 3051. HOLDING PERIOD UNDER SAFE HAR- or on interests in real property (other than (c) AUTHORITY TO EXCLUDE ITEMS OF IN- BOR. foreign currency gain attributable to any COME FROM REIT INCOME TESTS.—Section Section 857(b)(6) (relating to income from item of income or gain described in clause 856(c)(5), as amended by the Heartland, Habi- prohibited transactions) is amended— (i)), or tat, Harvest, and Horticulture Act of 2008, is (1) by striking ‘‘4 years’’ in subparagraphs ‘‘(iii) becoming or being the obligor under amended by adding at the end the following (C)(i), (C)(iv), and (D)(i) and inserting ‘‘2 obligations secured by mortgages on real new subparagraph: years’’, property or on interests in real property ‘‘(J) SECRETARIAL AUTHORITY TO EXCLUDE (2) by striking ‘‘4-year period’’ in subpara- (other than foreign currency gain attrib- OTHER ITEMS OF INCOME.—To the extent nec- graphs (C)(ii), (D)(ii), and (D)(iii) and insert- utable to any item of income or gain de- essary to carry out the purposes of this part, ing ‘‘2-year period’’, and scribed in clause (i)), the Secretary is authorized to determine, (3) by striking ‘‘real estate asset’’and all ‘‘(B) section 987 gain attributable to a solely for purposes of this part, whether any that follows through ‘‘if’’ in the matter pre- qualified business unit (as defined by section item of income or gain which— ceding clause (i) of subparagraphs (C) and 989) of the real estate investment trust, but ‘‘(i) does not otherwise qualify under para- (D), respectively, and inserting ‘‘real estate only if such qualified business unit meets the graph (2) or (3) may be considered as not con- asset (as defined in section 856(c)(5)(B)) and requirements under— stituting gross income, or which is described in section 1221(a)(1) if’’. ‘‘(i) subsection (c)(3) for the taxable year, ‘‘(ii) otherwise constitutes gross income SEC. 3052. DETERMINING VALUE OF SALES and not qualifying under paragraph (2) or (3) may UNDER SAFE HARBOR. ‘‘(ii) subsection (c)(4)(A) at the close of be considered as gross income which quali- Section 857(b)(6) is amended— each quarter that the real estate investment fies under paragraph (2) or (3).’’. (1) by striking the semicolon at the end of trust has directly or indirectly held the SEC. 3032. REVISIONS TO REIT ASSET TESTS. subparagraph (C)(iii) and inserting ‘‘, or (III) qualified business unit, and (a) CLARIFICATION OF VALUATION TEST.— the fair market value of property (other than ‘‘(C) any other foreign currency gain as de- The first sentence in the matter following sales of foreclosure property or sales to termined by the Secretary. section 856(c)(4)(B)(iii)(III) is amended by in- which section 1033 applies) sold during the ‘‘(3) PASSIVE FOREIGN EXCHANGE GAIN.—For serting ‘‘(including a discrepancy caused taxable year does not exceed 10 percent of purposes of this subsection, the term ‘passive solely by the change in the foreign currency the fair market value of all of the assets of foreign exchange gain’ means— exchange rate used to value a foreign asset)’’ the trust as of the beginning of the taxable ‘‘(A) real estate foreign exchange gain, after ‘‘such requirements’’. year;’’, and ‘‘(B) foreign currency gain (as defined in (b) CLARIFICATION OF PERMISSIBLE ASSET (2) by adding ‘‘or’’ at the end of subclause section 988(b)(1)) which is not described in CATEGORY.—Section 856(c)(5), as amended by (II) of subparagraph (D)(iv) and by adding at subparagraph (A) and which is attributable section 3031(c), is amended by adding at the the end of such subparagraph the following to— end the following new subparagraph: new subclause:

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00130 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5901 ‘‘(III) the fair market value of property management agreement or other similar clause (I) shall be calculated without regard (other than sales of foreclosure property or service contract with such person with re- to the written binding contract limitation sales to which section 1033 applies) sold dur- spect to such qualified lodging facility or under paragraph (2)(A)(iii)(I). ing the taxable year does not exceed 10 per- qualified health care property.’’. ‘‘(ii) MAXIMUM AMOUNT.—The bonus depre- cent of the fair market value of all of the as- (c) TAXABLE REIT SUBSIDIARIES.—The last ciation amount for any applicable taxable sets of the trust as of the beginning of the sentence of section 856(l)(3) is amended— year shall not exceed the applicable limita- taxable year,’’. (1) by inserting ‘‘or a health care facility’’ tion under clause (iii), reduced (but not Subtitle D—Health Care REITs after ‘‘a lodging facility’’, and below zero) by the bonus depreciation SEC. 3061. CONFORMITY FOR HEALTH CARE FA- (2) by inserting ‘‘or health care facility’’ amount for any preceding taxable year. CILITIES. after ‘‘such lodging facility’’. ‘‘(iii) APPLICABLE LIMITATION.—For pur- (a) RELATED PARTY RENTALS.—Subpara- Subtitle E—Effective Dates poses of clause (ii), the term ‘applicable limi- graph (B) of section 856(d)(8) (relating to spe- SEC. 3071. EFFECTIVE DATES. tation’ means, with respect to any eligible cial rule for taxable REIT subsidiaries) is taxpayer, the lesser of— (a) IN GENERAL.—Except as otherwise pro- amended to read as follows: vided in this section, the amendments made ‘‘(I) $30,000,000, or ‘‘(B) EXCEPTION FOR CERTAIN LODGING FA- by this title shall apply to taxable years be- ‘‘(II) 6 percent of the sum of the amounts CILITIES AND HEALTH CARE PROPERTY.—The ginning after the date of the enactment of determined with respect to the taxpayer requirements of this subparagraph are met this Act. under clauses (ii) and (iii) of subparagraph with respect to an interest in real property (b) REIT INCOME TESTS.— (E). which is a qualified lodging facility (as de- (1) The amendments made by section ‘‘(iv) AGGREGATION RULE.—All corporations fined in paragraph (9)(D)) or a qualified 3031(a) and (c) shall apply to gains and items which are treated as a single employer under health care property (as defined in sub- of income recognized after the date of the en- section 52(a) shall be treated as 1 taxpayer section (e)(6)(D)(i)) leased by the trust to a for purposes of applying the limitation under taxable REIT subsidiary of the trust if the actment of this Act. (2) The amendment made by section 3031(b) this subparagraph and determining the appli- property is operated on behalf of such sub- cable limitation under clause (iii). sidiary by a person who is an eligible inde- shall apply to transactions entered into after the date of the enactment of this Act. ‘‘(D) ELIGIBLE QUALIFIED PROPERTY.—For pendent contractor. For purposes of this sec- purposes of this paragraph, the term ‘eligible tion, a taxable REIT subsidiary is not con- (c) CONFORMING FOREIGN CURRENCY REVI- SIONS.— qualified property’ means qualified property sidered to be operating or managing a quali- under paragraph (2), except that in applying fied health care property or qualified lodging (1) The amendment made by section 3033(a) shall apply to gains recognized after the date paragraph (2) for purposes of this clause— facility solely because it— ‘‘(i) ‘March 31, 2008’ shall be substituted for ‘‘(i) directly or indirectly possesses a li- of the enactment of this Act. (2) The amendment made by section 3033(b) ‘December 31, 2007’ each place it appears in cense, permit, or similar instrument ena- subparagraph (A) and clauses (i) and (ii) of bling it to do so, or shall apply to gains and deductions recog- subparagraph (E) thereof, ‘‘(ii) employs individuals working at such nized after the date of the enactment of this ‘‘(ii) only adjusted basis attributable to facility or property located outside the Act. manufacture, construction, or production United States, but only if an eligible inde- (d) DEALER SALES.—The amendments made after March 31, 2008, and before January 1, pendent contractor is responsible for the by subtitle C shall apply to sales made after 2009, shall be taken into account under sub- daily supervision and direction of such indi- the date of the enactment of this Act. paragraph (B)(ii) thereof, and viduals on behalf of the taxable REIT sub- TITLE III—REVENUE PROVISIONS ‘‘(iii) in the case of property which is a pas- sidiary pursuant to a management agree- Subtitle A—General Provisions senger aircraft, the written binding contract ment or similar service contract.’’. SEC. 3081. ELECTION TO ACCELERATE AMT AND (b) ELIGIBLE INDEPENDENT CONTRACTOR.— limitation under subparagraph (A)(iii)(I) R AND D CREDITS IN LIEU OF BONUS thereof shall not apply. Subparagraphs (A) and (B) of section 856(d)(9) DEPRECIATION. (relating to eligible independent contractor) ‘‘(E) ALLOCATION OF BONUS DEPRECIATION (a) IN GENERAL.—Section 168(k) is amended are amended to read as follows: AMOUNTS.— by adding at the end the following new para- ‘‘(A) IN GENERAL.—The term ‘eligible inde- ‘‘(i) IN GENERAL.—Subject to clauses (ii) graph: pendent contractor’ means, with respect to and (iii), the taxpayer shall, at such time ‘‘(4) ELECTION TO ACCELERATE AMT AND R any qualified lodging facility or qualified and in such manner as the Secretary may AND D CREDITS IN LIEU OF BONUS DEPRECIA- health care property (as defined in sub- prescribe, specify the portion (if any) of the TION.— section (e)(6)(D)(i)), any independent con- bonus depreciation amount which is to be al- ‘‘(A) IN GENERAL.—If a corporation elects tractor if, at the time such contractor enters located to each of the limitations described to have this paragraph apply— into a management agreement or other simi- in subparagraph (B). lar service contract with the taxable REIT ‘‘(i) no additional depreciation shall be al- ‘‘(ii) BUSINESS CREDIT LIMITATION.—The subsidiary to operate such qualified lodging lowed under paragraph (1) for any eligible portion of the bonus depreciation amount al- facility or qualified health care property, qualified property placed in service during located to the limitation described in sub- such contractor (or any related person) is ac- any taxable year to which paragraph (1) paragraph (B)(i) shall not exceed an amount tively engaged in the trade or business of op- would otherwise apply, equal to the portion of the credit allowable erating qualified lodging facilities or quali- ‘‘(ii) the applicable depreciation method under section 38 for the taxable year which is fied health care properties, respectively, for used under this section with respect to such allocable to business credit carryforwards to any person who is not a related person with eligible qualified property shall be the such taxable year which are— respect to the real estate investment trust straight line method rather than the method ‘‘(I) from taxable years beginning before or the taxable REIT subsidiary. that would otherwise be used, and January 1, 2006, and ‘‘(B) SPECIAL RULES.—Solely for purposes ‘‘(iii) the limitations described in subpara- ‘‘(II) properly allocable (determined under of this paragraph and paragraph (8)(B), a per- graph (B) for such taxable year shall be in- the rules of section 38(d)) to the research son shall not fail to be treated as an inde- creased by an aggregate amount not in ex- credit determined under section 41(a). pendent contractor with respect to any cess of the bonus depreciation amount for ‘‘(iii) ALTERNATIVE MINIMUM TAX CREDIT qualified lodging facility or qualified health such taxable year. LIMITATION.—The portion of the bonus depre- care property (as so defined) by reason of the ‘‘(B) LIMITATIONS TO BE INCREASED.—The ciation amount allocated to the limitation following: limitations described in this subparagraph described in subparagraph (B)(ii) shall not ‘‘(i) The taxable REIT subsidiary bears the are— exceed an amount equal to the portion of the expenses for the operation of such qualified ‘‘(i) the limitation under section 38(c), and minimum tax credit allowable under section lodging facility or qualified health care prop- ‘‘(ii) the limitation under section 53(c). 53 for the taxable year which is allocable to erty pursuant to the management agreement ‘‘(C) BONUS DEPRECIATION AMOUNT.—For the adjusted minimum tax imposed for tax- or other similar service contract. purposes of this paragraph— able years beginning before January 1, 2006. ‘‘(ii) The taxable REIT subsidiary receives ‘‘(i) IN GENERAL.—The bonus depreciation For purposes of the preceding sentence, cred- the revenues from the operation of such amount for any applicable taxable year is an its shall be treated as allowed on a first-in, qualified lodging facility or qualified health amount equal to the product of 20 percent first-out basis. care property, net of expenses for such oper- and the excess (if any) of— ‘‘(F) CREDIT REFUNDABLE.—Any aggregate ation and fees payable to the operator pursu- ‘‘(I) the aggregate amount of depreciation increases in the credits allowed under sec- ant to such agreement or contract. which would be determined under this sec- tion 38 or 53 by reason of this paragraph ‘‘(iii) The real estate investment trust re- tion for property placed in service during the shall, for purposes of this title, be treated as ceives income from such person with respect taxable year if no election under this para- a credit allowed to the taxpayer under sub- to another property that is attributable to a graph were made, over part C of part IV of subchapter A. lease of such other property to such person ‘‘(II) the aggregate amount of depreciation ‘‘(G) OTHER RULES.— that was in effect as of the later of— allowable under this section for property ‘‘(i) ELECTION.—Any election under this ‘‘(I) January 1, 1999, or placed in service during the taxable year. paragraph (including any allocation under ‘‘(II) the earliest date that any taxable In the case of property which is a passenger subparagraph (E)) may be revoked only with REIT subsidiary of such trust entered into a aircraft, the amount determined under sub- the consent of the Secretary.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00131 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5902 CONGRESSIONAL RECORD — SENATE June 19, 2008

‘‘(ii) DEDUCTION ALLOWED IN COMPUTING 1986 (as added by the amendments made by Subtitle B—Revenue Offsets MINIMUM TAX.—Notwithstanding this para- this section). SEC. 3091. RETURNS RELATING TO PAYMENTS graph, paragraph (2)(G) shall apply with re- MADE IN SETTLEMENT OF PAYMENT (c) CONFORMING AMENDMENT.—Section spect to the deduction computed under this CARD AND THIRD PARTY NETWORK section (after application of this paragraph) 1324(b)(2) of title 31, United States Code, as TRANSACTIONS. with respect to property placed in service amended by this Act, is amended— (a) IN GENERAL.—Subpart B of part III of during any applicable taxable year.’’. (1) by inserting ‘‘168(k)(4)(F),’’ after ‘‘36,’’, subchapter A of chapter 61 is amended by (b) APPLICATION TO CERTAIN AUTOMOTIVE and adding at the end the following new section: PARTNERSHIPS.— (2) by inserting ‘‘, or due under section ‘‘SEC. 6050W. RETURNS RELATING TO PAYMENTS (1) IN GENERAL.—If an applicable partner- 3081(b)(2) of the Housing Assistance Tax Act MADE IN SETTLEMENT OF PAYMENT ship elects the application of this sub- of 2008’’ before the period at the end. CARD AND THIRD PARTY NETWORK section— TRANSACTIONS. (d) EFFECTIVE DATE.—The amendments (A) the partnership shall be treated as hav- ‘‘(a) IN GENERAL.—Each payment settle- ing made a payment against the tax imposed made by this section shall apply to taxable ment entity shall make a return for each by chapter 1 of the Internal Revenue Code of years ending after March 31, 2008. calendar year setting forth— ‘‘(1) the name, address, and TIN of each 1986 for any applicable taxable year of the SEC. 3082. CERTAIN GO ZONE INCENTIVES. partnership in the amount determined under participating payee to whom one or more paragraph (3), (a) USE OF AMENDED INCOME TAX RETURNS payments in settlement of reportable trans- actions are made, and (B) in the case of any eligible qualified TO TAKE INTO ACCOUNT RECEIPT OF CERTAIN ‘‘(2) the gross amount of the reportable property placed in service by the partnership HURRICANE-RELATED CASUALTY LOSS GRANTS during any applicable taxable year— transactions with respect to each such par- BY DISALLOWING PREVIOUSLY TAKEN CAS- ticipating payee. (i) section 168(k) of such Code shall not UALTY LOSS DEDUCTIONS.— apply in determining the amount of the de- Such return shall be made at such time and (1) IN GENERAL.—Notwithstanding any in such form and manner as the Secretary duction allowable to the partnership or any other provision of the Internal Revenue Code partner with respect to such property under may require by regulations. of 1986, if a taxpayer claims a deduction for section 168 of such Code, ‘‘(b) PAYMENT SETTLEMENT ENTITY.—For any taxable year with respect to a casualty (ii) the applicable depreciation method purposes of this section— used by the partnership or any partner under loss to a principal residence (within the ‘‘(1) IN GENERAL.—The term ‘payment set- such section with respect to such property meaning of section 121 of such Code) result- tlement entity’ means— shall be the straight line method rather than ing from Hurricane Katrina, Hurricane Rita, ‘‘(A) in the case of a payment card trans- the method that would otherwise be used, or Hurricane Wilma and in a subsequent tax- action, the merchant acquiring bank, and (C) no election may be made under section able year receives a grant under Public Law ‘‘(B) in the case of a third party network 168(k)(4) of such Code with respect to the 109–148, 109–234, or 110–116 as reimbursement transaction, the third party settlement orga- partnership, and for such loss, such taxpayer may elect to file nization. (D) the amount of the credit determined an amended income tax return for the tax- ‘‘(2) MERCHANT ACQUIRING BANK.—The term under section 41 of such Code for any appli- able year in which such deduction was al- ‘merchant acquiring bank’ means the bank cable taxable year with respect to the part- lowed (and for any taxable year to which or other organization which has the contrac- tual obligation to make payment to partici- nership shall be reduced by the amount of such deduction is carried) and reduce (but pating payees in settlement of payment card the deemed payment under subparagraph (A) not below zero) the amount of such deduc- transactions. for the taxable year. tion by the amount of such reimbursement. ‘‘(3) THIRD PARTY SETTLEMENT ORGANIZA- (2) TREATMENT OF DEEMED PAYMENT.— (2) TIME OF FILING AMENDED RETURN.—Para- TION.—The term ‘third party settlement or- (A) IN GENERAL.—Notwithstanding any graph (1) shall apply with respect to any ganization’ means the central organization other provision of the Internal Revenue Code grant only if any amended income tax re- of 1986, the Secretary of the Treasury or his which has the contractual obligation to turns with respect to such grant are filed not make payment to participating payees of delegate shall not use the payment of tax de- later than the later of— scribed in paragraph (1) as an offset or credit third party network transactions. (A) the due date for filing the tax return against any tax liability of the applicable ‘‘(4) SPECIAL RULES RELATED TO INTER- for the taxable year in which the taxpayer partnership or any partner but shall refund MEDIARIES.—For purposes of this section— such payment to the applicable partnership. receives such grant, or ‘‘(A) AGGREGATED PAYEES.—In any case where reportable transactions of more than (B) NO INTEREST.—The payment described (B) the date which is 1 year after the date in paragraph (1) shall not be taken into ac- of the enactment of this Act. one participating payee are settled through count in determining any amount of interest (3) WAIVER OF PENALTIES AND INTEREST.— an intermediary— under such Code. Any underpayment of tax resulting from the ‘‘(i) such intermediary shall be treated as the participating payee for purposes of deter- (3) AMOUNT OF DEEMED PAYMENT.—The reduction under paragraph (1) of the amount amount determined under this paragraph for otherwise allowable as a deduction shall not mining the reporting obligations of the pay- any applicable taxable year shall be the least be subject to any penalty or interest under ment settlement entity with respect to such of the following: such Code if such tax is paid not later than transactions, and ‘‘(ii) such intermediary shall be treated as (A) The amount which would be deter- 1 year after the filing of the amended return the payment settlement entity with respect mined for the taxable year under section to which such reduction relates. to the settlement of such transactions with 168(k)(4)(C)(i) of the Internal Revenue Code (b) WAIVER OF DEADLINE ON CONSTRUCTION the participating payees. of 1986 (as added by the amendments made by OF GO ZONE PROPERTY ELIGIBLE FOR BONUS ‘‘(B) ELECTRONIC PAYMENT FACILITATORS.— this section) if an election under such sec- In any case where an electronic payment tion were in effect with respect to the part- DEPRECIATION.— facilitator or other third party makes pay- nership. (1) IN GENERAL.—Subparagraph (B) of sec- ments in settlement of reportable trans- (B) The amount of the credit determined tion 1400N(d)(3) is amended to read as fol- lows: actions on behalf of the payment settlement under section 41 of such Code for the taxable entity, the return under subsection (a) shall year with respect to the partnership. ‘‘(B) without regard to ‘and before January 1, 2009’ in clause (i) thereof, and’’. be made by such electronic payment (C) $30,000,000, reduced by the amount of facilitator or other third party in lieu of the (2) EFFECTIVE DATE.—The amendment any payment under this subsection for any payment settlement entity. made by this subsection shall apply to prop- preceding taxable year. ‘‘(c) REPORTABLE TRANSACTION.—For pur- (4) DEFINITIONS.—For purposes of this sub- erty placed in service after December 31, poses of this section— section— 2007. ‘‘(1) IN GENERAL.—The term ‘reportable (A) APPLICABLE PARTNERSHIP.—The term (c) INCLUSION OF CERTAIN COUNTIES IN GULF transaction’ means any payment card trans- ‘‘applicable partnership’’ means a domestic OPPORTUNITY ZONE FOR PURPOSES OF TAX-EX- action and any third party network trans- partnership that— EMPT BOND FINANCING.— action. (i) was formed effective on August 3, 2007, ‘‘(2) PAYMENT CARD TRANSACTION.—The and (1) IN GENERAL.—Subsection (a) of section 1400N is amended by adding at the end the term ‘payment card transaction’ means any (ii) will produce in excess of 675,000 auto- transaction in which a payment card is ac- following new paragraph: mobiles during the period beginning on Jan- cepted as payment. ‘‘(8) INCLUSION OF CERTAIN COUNTIES.—For uary 1, 2008, and ending on June 30, 2008. ‘‘(3) THIRD PARTY NETWORK TRANSACTION.— (B) APPLICABLE TAXABLE YEAR.—The term purposes of this subsection, the Gulf Oppor- The term ‘third party network transaction’ ‘‘applicable taxable year’’ means any taxable tunity Zone includes Colbert County, Ala- means any transaction which is settled year during which eligible qualified property bama and Dallas County, Alabama.’’. through a third party payment network. is placed in service. (2) EFFECTIVE DATE.—The amendment ‘‘(d) OTHER DEFINITIONS.—For purposes of (C) ELIGIBLE QUALIFIED PROPERTY.—The made by this subsection shall take effect as this section— term ‘‘eligible qualified property’’ has the if included in the provisions of the Gulf Op- ‘‘(1) PARTICIPATING PAYEE.— meaning given such term by section portunity Zone Act of 2005 to which it re- ‘‘(A) IN GENERAL.—The term ‘participating 168(k)(4)(D) of the Internal Revenue Code of lates. payee’ means—

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00132 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5903

‘‘(i) in the case of a payment card trans- as may be necessary or appropriate to carry ‘‘(ii) EXCEPTIONS.—The term ‘period of non- action, any person who accepts a payment out this section, including rules to prevent qualified use’ does not include— card as payment, and the reporting of the same transaction more ‘‘(I) any portion of the 5-year period de- ‘‘(ii) in the case of a third party network than once.’’. scribed in subsection (a) which is after the transaction, any person who accepts pay- (b) PENALTY FOR FAILURE TO FILE.— last date that such property is used as the ment from a third party settlement organi- (1) RETURN.—Subparagraph (B) of section principal residence of the taxpayer or the zation in settlement of such transaction. 6724(d)(1) is amended— taxpayer’s spouse, ‘‘(B) EXCLUSION OF FOREIGN PERSONS.—To (A) by striking ‘‘or’’ at the end of clause ‘‘(II) any period (not to exceed an aggre- the extent provided by the Secretary in regu- (xx), gate period of 10 years) during which the tax- lations or other guidance, such term shall (B) by redesignating the clause (xix) that payer or the taxpayer’s spouse is serving on not include any foreign person. follows clause (xx) as clause (xxi), qualified official extended duty (as defined in ‘‘(C) INCLUSION OF GOVERNMENTAL UNITS.— (C) by striking ‘‘and’’ at the end of clause subsection (d)(9)(C)) described in clause (i), The term ‘person’ includes any governmental (xxi), as redesignated by subparagraph (B) (ii), or (iii) of subsection (d)(9)(A), and unit (and any agency or instrumentality and inserting ‘‘or’’, and ‘‘(III) any other period of temporary ab- thereof). (D) by adding at the end the following: sence (not to exceed an aggregate period of 2 ‘‘(2) PAYMENT CARD.—The term ‘payment ‘‘(xxii) section 6050W (relating to returns years) due to change of employment, health card’ means any card which is issued pursu- to payments made in settlement of payment conditions, or such other unforeseen cir- ant to an agreement or arrangement which card transactions), and’’. cumstances as may be specified by the Sec- provides for— (2) STATEMENT.—Paragraph (2) of section retary. ‘‘(A) one or more issuers of such cards, 6724(d) is amended by striking ‘‘or’’ at the ‘‘(D) COORDINATION WITH RECOGNITION OF ‘‘(B) a network of persons unrelated to end of subparagraph (BB), by striking the pe- GAIN ATTRIBUTABLE TO DEPRECIATION.—For each other, and to the issuer, who agree to riod at the end of the subparagraph (CC) and purposes of this paragraph— accept such cards as payment, and inserting ‘‘, or’’, and by inserting after sub- ‘‘(i) subparagraph (A) shall be applied after ‘‘(C) standards and mechanisms for settling paragraph (CC) the following: the application of subsection (d)(6), and the transactions between the merchant ac- ‘‘(DD) section 6050W(c) (relating to returns ‘‘(ii) subparagraph (B) shall be applied quiring banks and the persons who agree to relating to payments made in settlement of without regard to any gain to which sub- accept such cards as payment. payment card transactions).’’. section (d)(6) applies.’’. The acceptance as payment of any account (c) APPLICATION OF BACKUP WITHHOLDING.— (b) EFFECTIVE DATE.—The amendment number or other indicia associated with a Paragraph (3) of section 3406(b) is amended made by this section shall apply to sales and payment card shall be treated for purposes of by striking ‘‘or’’ at the end of subparagraph exchanges after December 31, 2008. this section in the same manner as accepting (D), by striking the period at the end of sub- SEC. 3093. INCREASE IN INFORMATION RETURN such payment card as payment. paragraph (E) and inserting ‘‘, or’’, and by PENALTIES. ‘‘(3) THIRD PARTY PAYMENT NETWORK.—The adding at the end the following new subpara- (a) FAILURE TO FILE CORRECT INFORMATION term ‘third party payment network’ means graph: RETURNS.— any agreement or arrangement— ‘‘(F) section 6050W (relating to returns re- (1) IN GENERAL.—Subsections (a)(1), ‘‘(A) which involves the establishment of lating to payments made in settlement of (b)(1)(A), and (b)(2)(A) of section 6721 are accounts with a central organization for the payment card transactions).’’. each amended by striking ‘‘$50’’ and insert- purpose of settling transactions between per- (d) CLERICAL AMENDMENT.—The table of ing ‘‘$100’’. sons who establish such accounts, sections for subpart B of part III of sub- (2) AGGREGATE ANNUAL LIMITATION.—Sub- ‘‘(B) which provides for standards and chapter A of chapter 61 is amended by insert- sections (a)(1), (d)(1)(A), and (e)(3)(A) of sec- mechanisms for settling such transactions, ing after the item relating to section 6050V tion 6721 are each amended by striking ‘‘(C) which involves a substantial number the following: ‘‘$250,000’’ and inserting ‘‘$1,500,000’’. of persons unrelated to such central organi- ‘‘Sec. 6050W. Returns relating to payments (b) REDUCTION WHERE CORRECTION WITHIN zation who provide goods or services and who made in settlement of payment 30 DAYS.— have agreed to settle transactions for the card transactions.’’. (1) IN GENERAL.—Subparagraph (A) of sec- provision of such goods or services pursuant (e) EFFECTIVE DATE.— tion 6721(b)(1) is amended by striking ‘‘$15’’ to such agreement or arrangement, and (1) IN GENERAL.—Except as otherwise pro- and inserting ‘‘$50’’. ‘‘(D) which guarantees persons providing vided in this subsection, the amendments (2) AGGREGATE ANNUAL LIMITATION.—Sub- goods or services pursuant to such agree- made by this section shall apply to returns sections (b)(1)(B) and (d)(1)(B) of section 6721 ment or arrangement that such persons will for calendar years beginning after December are each amended by striking ‘‘$75,000’’ and be paid for providing such goods or services. 31, 2010. inserting ‘‘$500,000’’. Such term shall not include any agreement (2) APPLICATION OF BACKUP WITHHOLDING.— (c) REDUCTION WHERE CORRECTION ON OR or arrangement which provides for the The amendment made by subsection (c) shall BEFORE AUGUST 1.— issuance of payment cards. apply to amounts paid after December 31, (1) IN GENERAL.—Subparagraph (A) of sec- ‘‘(e) EXCEPTION FOR DE MINIMIS PAYMENTS 2011. tion 6721(b)(2) is amended by striking ‘‘$30’’ BY THIRD PARTY SETTLEMENT ORGANIZA- SEC. 3092. GAIN FROM SALE OF PRINCIPAL RESI- and inserting ‘‘$75’’. TIONS.—A third party settlement organiza- DENCE ALLOCATED TO NON- (2) AGGREGATE ANNUAL LIMITATION.—Sub- tion shall not be required to report any in- QUALIFIED USE NOT EXCLUDED sections (b)(2)(B) and (d)(1)(C) of section formation under subsection (a) with respect FROM INCOME. 6721are each amended by striking ‘‘$150,000’’ to third party network transactions of any (a) IN GENERAL.—Subsection (b) of section and inserting ‘‘$1,000,000’’. participating payee if the amount which 121 of the Internal Revenue Code of 1986 (re- (d) AGGREGATE ANNUAL LIMITATIONS FOR would otherwise be reported under sub- lating to limitations) is amended by adding PERSONS WITH GROSS RECEIPTS OF NOT MORE section (a)(2) with respect to such trans- at the end the following new paragraph: THAN $5,000,000.—Paragraph (1) of section actions does not exceed $10,000 and the aggre- ‘‘(4) EXCLUSION OF GAIN ALLOCATED TO NON- 6721(d) is amended— gate number of such transactions does not QUALIFIED USE.— (1) by striking ‘‘$100,000’’ in subparagraph exceed 200. ‘‘(A) IN GENERAL.—Subsection (a) shall not (A) and inserting ‘‘$500,000’’, ‘‘(f) STATEMENTS TO BE FURNISHED TO PER- apply to so much of the gain from the sale or (2) by striking ‘‘$25,000’’ in subparagraph SONS WITH RESPECT TO WHOM INFORMATION IS exchange of property as is allocated to peri- (B) and inserting ‘‘$100,000’’, and REQUIRED.—Every person required to make a ods of nonqualified use. (3) by striking ‘‘$50,000’’ in subparagraph return under subsection (a) shall furnish to ‘‘(B) GAIN ALLOCATED TO PERIODS OF NON- (C) and inserting ‘‘$250,000’’. each person with respect to whom such a re- QUALIFIED USE.—For purposes of subpara- (e) PENALTY IN CASE OF INTENTIONAL DIS- turn is required a written statement show- graph (A), gain shall be allocated to periods REGARD.—Paragraph (2) of section 6721(e) is ing— of nonqualified use based on the ratio amended by striking ‘‘$100’’ and inserting ‘‘(1) the name, address, and phone number which— ‘‘$250’’. of the information contact of the person re- ‘‘(i) the aggregate periods of nonqualified (f) FAILURE TO FURNISH CORRECT PAYEE quired to make such return, and use during the period such property was STATEMENTS.— ‘‘(2) the gross amount of payments made to owned by the taxpayer, bears to (1) IN GENERAL.—Subsection (a) of section the person required to be shown on the re- ‘‘(ii) the period such property was owned 6722 is amended by striking ‘‘$50’’ and insert- turn. by the taxpayer. ing ‘‘$100’’. The written statement required under the ‘‘(C) PERIOD OF NONQUALIFIED USE.—For (2) AGGREGATE ANNUAL LIMITATION.—Sub- preceding sentence shall be furnished to the purposes of this paragraph— sections (a) and (c)(2)(A) of section 6722 are person on or before January 31 of the year ‘‘(i) IN GENERAL.—The term ‘period of non- each amended by striking ‘‘$100,000’’ and in- following the calendar year for which the re- qualified use’ means any period (other than serting ‘‘$500,000’’. turn under subsection (a) was required to be the portion of any period preceding January (3) PENALTY IN CASE OF INTENTIONAL DIS- made. 1, 2009) during which the property is not used REGARD.—Paragraph (1) of section 6722(c) is ‘‘(g) REGULATIONS.—The Secretary may as the principal residence of the taxpayer or amended by striking ‘‘$100’’ and inserting prescribe such regulations or other guidance the taxpayer’s spouse or former spouse. ‘‘$250’’.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00133 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5904 CONGRESSIONAL RECORD — SENATE June 19, 2008 (g) FAILURE TO COMPLY WITH OTHER INFOR- (as that term is defined in section 3(z) of the consumers, increasing clean renewable MATION REPORTING REQUIREMENTS.—Section Federal Deposit Insurance Act) and the Na- energy production, and modernizing 6723 is amended— tional Credit Union Administration, includ- our energy infrastructure, and to (1) by striking ‘‘$50’’ and inserting ‘‘$100’’, ing regulations and guidelines related to the amend the Internal Revenue Code of and independence and accuracy of appraisals, and 1986 to provide tax incentives for the (2) by striking ‘‘$100,000’’ and inserting do not conflict with any other banking regu- ‘‘$500,000’’. lations. production of renewable energy and en- (h) EFFECTIVE DATE.—The amendments ‘‘(3) APPLICATION.—The regulation issued ergy conservation; as follows: made by this section shall apply with respect pursuant to this subsection shall supersede On page 522, between lines 2 and 3, insert to information returns required to be filed the terms of any agreement relating to ap- the following: on or after January 1, 2009. praisal standards entered into by the Direc- ‘‘(iii) If the loan is an adjustable rate mort- SEC. 3094. INCREASE IN PENALTY FOR FAILURE tor or the enterprises prior to or after the gage that includes an initial fixed interest TO FILE S CORPORATION RETURNS. issuance of the regulation required by this rate— (a) IN GENERAL.—Paragraph (1) of section subsection in final form, to the extent that ‘‘(I) state in conspicuous type size and for- 6699(b) (relating to amount per month) is any such agreement is inconsistent with the mat the following phrase: This loan is an ad- amended by striking ‘‘$85’’ and inserting regulation. The Director shall have the au- justable rate mortgage with an initial fixed ‘‘$100’’. thority to make determinations, at the Di- interest rate. Your initial fixed interest rate (b) EFFECTIVE DATE.—The amendment rector’s discretion and in response to re- is AAA with a monthly payment of BBB made by this section shall apply to returns quests for such determinations, as to wheth- until CCC. After that date, the interest rate the due date for the filing of which (includ- er any such agreements are, or have become, on your loan will ‘reset’ to an adjustable ing extensions) is after the date of the enact- inconsistent with applicable regulations, and rate and both your interest rate and pay- ment of this Act. any terms of any such prior agreement that ment could go higher on that date and in the future. For example, if your initial fixed rate SEC. 3095. INCREASE IN PENALTY FOR FAILURE are consistent with the regulation shall not TO FILE PARTNERSHIP RETURNS. be effective until 1 year following the date of ended today, your new adjustable interest (a) INCREASE IN PENALTY AMOUNT.—Para- enactment of the issuance of the regulation rate would be DDD and your new payment graph (1) of section 6698(b) (relating to in final form.’’. EEE. If interest rates are one percent higher amount per month) is amended by striking than they are today or at some point in the ‘‘$85’’ and inserting ‘‘$100’’. SA 4985. Mr. BOND (for himself and future, your new payment would be FFF. There is no guarantee you will be able to re- (b) EFFECTIVE DATE.—The amendment Mr. BARRASSO) proposed an amendment made by this section shall apply to returns finance your loan to a lower interest rate to amendment SA 4983 proposed by Mr. and payment before your initial fixed inter- the due date for the filing of which (includ- REID (for Mr. DODD (for himself and Mr. ing extensions) is after the date of the enact- est rate ends.; SHELBY)) to the bill H.R. 3221, moving ment of this Act. ‘‘(II) the blank AAA in subparagraph (I) to the United States toward greater en- be filled in with the initial fixed interest SEC. 3096. INCREASE IN MINIMUM PENALTY ON rate; FAILURE TO FILE A RETURN OF TAX. ergy independence and security, devel- ‘‘(III) the blank BBB in subparagraph (I) to (a) IN GENERAL.—Subsection (a) of section oping innovative new technologies, re- be filled in with the payment amount under 6651, as amended by section 303(a) of the He- ducing carbon emissions, creating the initial fixed interest rate; roes Earnings Assistance and Relief Tax Act green jobs, protecting consumers, in- ‘‘(IV) the blank CCC in subparagraph (I) to of 2008, is amended by striking ‘‘$135’’ in the creasing clean renewable energy pro- be filled in with the loan reset date; last sentence and inserting ‘‘$225’’. duction, and modernizing our energy ‘‘(V) the blank DDD in subparagraph (I) to (b) EFFECTIVE DATE.—The amendment infrastructure, and to amend the Inter- made by this section shall apply to returns be filled in with the adjustable rate as if the the due date for the filing of which (includ- nal Revenue Code of 1986 to provide tax initial rate expired on the date of disclosure ing extensions) is after the date of the enact- incentives for the production of renew- under subparagraph (B); ment of this Act. able energy and energy conservation; ‘‘(VI) the blank EEE in subparagraph (I) to as follows: be filled in with the payment under the ad- SA 4984. Mrs. DOLE (for herself and justable rate as if the initial rate expired on Strike title IV of division A. the date of disclosure under subparagraph Mr. BURR) submitted an amendment in- (B); and tended to be proposed to amendment SA 4986. Mr. BOND proposed an ‘‘(VII) the blank FFF in subparagraph (I) SA 4983 proposed by Mr. REID (for Mr. amendment to amendment SA 4983 pro- to be filled in with the payment under the DODD (for himself and Mr. SHELBY)) to posed by Mr. REID (for Mr. DODD (for adjustable rate the bill H.R. 3221, moving the United himself and Mr. SHELBY)) to the bill ‘‘(iv) If the loan contains a prepayment States toward greater energy independ- H.R. 3221, moving the United States to- penalty— ence and security, developing innova- ward greater energy independence and ‘‘(I) state in conspicuous type and format tive new technologies, reducing carbon security, developing innovative new the following phrase: This loan contains a emissions, creating green jobs, pro- technologies, reducing carbon emis- prepayment penalty. If you desire to pay off this loan before GGG, you will pay a penalty tecting consumers, increasing clean re- sions, creating green jobs, protecting of HHH.; newable energy production, and mod- consumers, increasing clean renewable ‘‘(II) the blank GGG in subparagraph (I) to ernizing our energy infrastructure, and energy production, and modernizing be filled in with the date the prepayment to amend the Internal Revenue Code of our energy infrastructure, and to penalty expires; and 1986 to provide tax incentives for the amend the Internal Revenue Code of ‘‘(III) the blank HHH in subparagraph (I) to production of renewable energy and en- 1986 to provide tax incentives for the be filled in with the prepayment penalty ergy conservation; as follows: production of renewable energy and en- amount. At the appropriate place, insert the fol- ergy conservation; as follows: SA 4988. Mr. KOHL (for himself, Mrs. lowing: Insert the following at the appropriate LINCOLN, Ms. MIKULSKI, and Ms. COL- SEC. ll. REGULATION OF APPRAISAL STAND- place: LINS) submitted an amendment in- ARDS. SEC. xxx. Notwithstanding any other provi- tended to be proposed to amendment Section 1319G of the Federal Housing En- sion of law, Fannie Mae and Freddie Mac terprises Financial Safety and Soundness shall not be responsible for any payments ei- SA 4983 proposed by Mr. REID (for Mr. Act of 1992 (12 U.S.C. 4526) is amended by add- ther directly or indirectly to other Housing DODD (for himself and Mr. SHELBY)) to ing at the end the following new subsection: entities under the Affordable Housing pro- the bill H.R. 3221, moving the United ‘‘(d) REGULATION OF APPRAISAL STAND- gram unless these GSEs voluntarily provide States toward greater energy independ- ARDS.— funding. None of these funds shall be used for ence and security, developing innova- ‘‘(1) IN GENERAL.—Not later than 120 days soft program costs, including staff costs. tive new technologies, reducing carbon after the date of enactment of this sub- emissions, creating green jobs, pro- section, but not later than December 31, 2008, SA 4987. Mr. BOND proposed an tecting consumers, increasing clean re- the Director shall issue in final form a regu- amendment to amendment SA 4983 pro- newable energy production, and mod- lation that establishes appraisal standards posed by Mr. REID (for Mr. DODD (for ernizing our energy infrastructure, and for mortgages purchased or guaranteed by himself and Mr. SHELBY)) to the bill to amend the Internal Revenue Code of the enterprises. H.R. 3221, moving the United States to- ‘‘(2) CONSISTENCY.—In issuing the regula- 1986 to provide tax incentives for the tion required by this subsection, the Direc- ward greater energy independence and production of renewable energy and en- tor shall ensure that the regulation is con- security, developing innovative new ergy conservation; as follows: sistent with appraisal regulations and guide- technologies, reducing carbon emis- At the end of division B, insert the fol- lines issued by the Federal banking agencies sions, creating green jobs, protecting lowing:

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00134 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5905 TITLE VII—FORECLOSURE RESCUE to a homeowner by such third party with re- ‘‘I hereby cancel this transaction on [in- FRAUD PROTECTION spect to the foreclosure of residential real sert date] [insert homeowner signature].’’. SEC. 2701. SHORT TITLE. property, unless such consideration is fully (d) WAIVER OF RIGHTS AND PROTECTIONS This title may be cited as the ‘‘Foreclosure disclosed to such homeowner in writing be- PROHIBITED.— Rescue Fraud Act of 2008’’. fore such services are rendered; (1) IN GENERAL.—A waiver by a homeowner SEC. 2702. DEFINITIONS. (4) accept any wage assignment, any lien of of any protection provided by this section or In this title: any type on real or personal property, or any right of a homeowner under this sec- (1) COMMISSION.—The term ‘‘Commission’’ other security to secure the payment of com- tion— means the Federal Trade Commission. pensation with respect to services provided (A) shall be treated as void; and (2) FORECLOSURE CONSULTANT.—The term by such foreclosure consultant in connection (B) may not be enforced by any Federal or ‘‘foreclosure consultant’’— with the foreclosure of residential real prop- State court or by any person. (A) means a person who directly or indi- erty; or (2) ATTEMPT TO OBTAIN A WAIVER.—Any at- rectly makes any solicitation, representa- (5) acquire any interest, directly or indi- tempt by any person to obtain a waiver from tion, or offer to a homeowner facing fore- rectly, in the residence of a homeowner with any homeowner of any protection provided closure on residential real property to per- whom the foreclosure consultant has con- by this section or any right of the home- form, with or without compensation, or who tracted. owner under this section shall be treated as performs, with or without compensation, any (b) CONTRACT REQUIREMENTS.— a violation of this section. service that such person represents will pre- (1) WRITTEN CONTRACT REQUIRED.—Notwith- (3) CONTRACTS NOT IN COMPLIANCE.—Any vent, postpone, or reverse the effect of such standing any other provision of law, a fore- contract that does not comply with the ap- foreclosure; and closure consultant may not provide to a plicable provisions of this title shall be void (B) does not include— homeowner a service related to the fore- and may not be enforceable by any party. closure of residential real property— (i) an attorney licensed to practice law in SEC. 2704. WARNINGS TO HOMEOWNERS OF the State in which the property is located (A) unless— FORECLOSURE RESCUE SCAMS. (i) a written contract for the purchase of who has established an attorney-client rela- (a) IN GENERAL.—If a loan servicer finds tionship with the homeowner; such service has been signed and dated by that a homeowner has failed to make 2 con- the homeowner; and (ii) a person licensed as a real estate secutive payments on a residential mortgage (ii) such contract complies with the re- broker or salesperson in the State where the loan and such loan is at risk of being fore- quirements described in paragraph (2); and property is located, and such person engages closed upon, the loan servicer shall notify (B) before the end of the 3-business-day pe- in acts permitted under the licensure laws of such homeowner of the dangers of fraudulent riod beginning on the date on which the con- such State; activities associated with foreclosure. tract is signed. (iii) a housing counseling agency approved (b) NOTICE REQUIREMENTS.—Each notice (2) TERMS AND CONDITIONS OF CONTRACT.— by the Secretary; provided under subsection (a) shall— The requirements described in this para- (iv) a depository institution (as defined in (1) be in writing; graph, with respect to a contract, are as fol- section 3 of the Federal Deposit Insurance (2) be included with a mailing of account lows: Act (12 U.S.C. 1813)); information; (v) a Federal credit union or a State credit (A) The contract includes, in writing— (i) a full and detailed description of the (3) have the heading ‘‘Notice Required by union (as defined in section 101 of the Fed- Federal Law’’ in a 14-point boldface type in eral Credit Union Act (12 U.S.C. 1752)); or exact nature of the contract and the total amount and terms of compensation; English and Spanish at the top of such no- (vi) an insurance company organized under tice; and the laws of any State. (ii) the name, physical address, phone num- ber, email address, and facsimile number, if (4) contain the following statement in (3) HOMEOWNER.—The term ‘‘homeowner’’, English and Spanish: ‘‘Mortgage foreclosure with respect to residential real property for any, of the foreclosure consultant to whom a notice of cancellation can be mailed or sent is a complex process. Some people may ap- which an action to foreclose on the mortgage proach you about saving your home. You or deed of trust on such real property is under subsection (d); and (iii) a conspicuous statement in at least 12 should be careful about any such promises. filed, means the person holding record title There are government and nonprofit agen- to such property as of the date on which such point bold face type in immediate proximity to the space reserved for the homeowner’s cies you may contact for helpful information action is filed. about the foreclosure process. Contact your (4) LOAN SERVICER.—The term ‘‘loan signature on the contract that reads as fol- lows: ‘‘You may cancel this contract without lender immediately at [llll], call the De- servicer’’ has the same meaning as the term partment of Housing and Urban Development ‘‘servicer’’ in section 6(i)(2) of the Real Es- penalty or obligation at any time before midnight of the 3rd business day after the Housing Counseling Line at (800) 569–4287 to tate Settlement Procedures Act of 1974 (12 find a housing counseling agency certified by U.S.C. 2605(i)(2)). date on which you sign the contract. See the attached notice of cancellation form for an the Department to assist you in avoiding (5) RESIDENTIAL MORTGAGE LOAN.—The foreclosure, or visit the Department’s Tips term ‘‘residential mortgage loan’’ means any explanation of this right.’’. for Avoiding Foreclosure website at http:// loan primarily for personal, family, or house- (B) The contract is written in the principal www.hud.gov/foreclosure for additional as- hold use that is secured by a mortgage, deed language used by the homeowner. sistance.’’ (the blank space to be filled in by of trust, or other equivalent consensual secu- (C) The contract is accompanied by the the loan servicer and successor telephone rity interest on a dwelling (as defined in sec- form required by subsection (c)(2). numbers and Uniform Resource Locators tion 103(v) of the Truth in Lending Act (15 (c) RIGHT TO CANCEL CONTRACT.— (URLs) for the Department of Housing and U.S.C. 1602)(v)) or residential real estate (1) IN GENERAL.—With respect to a contract Urban Development Housing Counseling Line upon which is constructed or intended to be between a homeowner and a foreclosure con- and Tips for Avoiding Foreclosure website, constructed a dwelling (as so defined). sultant regarding the foreclosure on the resi- respectively). (6) RESIDENTIAL REAL PROPERTY.—The term dential real property of such homeowner, ‘‘residential real property’’ has the meaning such homeowner may cancel such contract SEC. 2705. CIVIL LIABILITY. given the term ‘‘dwelling’’ in section 103 of without penalty or obligation by mailing a (a) LIABILITY ESTABLISHED.—Any fore- the Consumer Credit Protection Act (15 notice of cancellation not later than mid- closure consultant who fails to comply with U.S.C. 1602). night of the 3rd business day after the date any provision of section 2703 or 2704 with re- (7) SECRETARY.—The term ‘‘Secretary’’ on which such contract is executed or would spect to any other person shall be liable to means the Secretary of Housing and Urban become enforceable against the parties to such person in an amount equal to the sum Development. such contract. of the amounts determined under each of the SEC. 2703. MORTGAGE RESCUE FRAUD PROTEC- (2) CANCELLATION FORM AND OTHER INFOR- following paragraphs: TION. MATION.—Each contract described in para- (1) ACTUAL DAMAGES.—The greater of— (a) LIMITS ON FORECLOSURE CONSULTANTS.— graph (1) shall be accompanied by a form, in (A) the amount of any actual damage sus- A foreclosure consultant may not— duplicate, that— tained by such person as a result of such fail- (1) claim, demand, charge, collect, or re- (A) has the heading ‘‘Notice of Cancella- ure; or ceive any compensation from a homeowner tion’’ in boldface type; and (B) any amount paid by the person to the for services performed by such foreclosure (B) contains in boldface type the following foreclosure consultant. consultant with respect to residential real statement: (2) PUNITIVE DAMAGES.—In the case of any property until such foreclosure consultant ‘‘You may cancel this contract, without action by an individual, such amount (in ad- has fully performed each service that such any penalty or obligation, at any time before dition to damages described in paragraph (1)) foreclosure consultant contracted to perform midnight of the 3rd day after the date on as the court may allow. or represented would be performed with re- which the contract is signed by you. (3) ATTORNEYS’ FEES.—In the case of any spect to such residential real property; ‘‘To cancel this contract, mail or deliver a successful action to enforce any liability (2) hold any power of attorney from any signed and dated copy of this cancellation under paragraph (1) or (2), the costs of the homeowner, except to inspect documents, as notice or any other equivalent written no- action, together with reasonable attorneys’ provided by applicable law; tice to [insert name of foreclosure consult- fees. (3) receive any consideration from a third ant] at [insert address of foreclosure consult- (b) FACTORS TO BE CONSIDERED IN AWARD- party in connection with services rendered ant] before midnight on [insert date]. ING PUNITIVE DAMAGES.—In determining the

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00135 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5906 CONGRESSIONAL RECORD — SENATE June 19, 2008 amount of any liability of any foreclosure SEC. 2707. PREEMPTION. shall be allowed under this section if a credit consultant under subsection (a)(2), the court Nothing in this title affects any provision under this section has been allowed to any of shall consider, among other relevant fac- of State or local law respecting any fore- such individuals in any taxable year with re- tors— closure consultant, residential mortgage spect to the purchase of any other qualified (1) the frequency and persistence of non- loan, or residential real property that pro- principal residence. compliance by the foreclosure consultant; vides equal or greater protection to home- ‘‘(c) QUALIFIED PRINCIPAL RESIDENCE.— (2) the nature of the noncompliance; and owners than what is provided under this ‘‘(1) IN GENERAL.—For purposes of this sec- (3) the extent to which such noncompliance title. tion, the term ‘qualified principal residence’ was intentional. means an eligible single-family residence SEC. 2706. ADMINISTRATIVE ENFORCEMENT. SA 4989. Mr. ISAKSON (for himself that is purchased to be the principal resi- (a) ENFORCEMENT BY FEDERAL TRADE COM- and Mr. CHAMBLISS) submitted an dence of the purchaser. MISSION.— amendment intended to be proposed to ‘‘(2) ELIGIBLE SINGLE-FAMILY RESIDENCE.— (1) UNFAIR OR DECEPTIVE ACT OR PRACTICE.— amendment SA 4983 proposed by Mr. ‘‘(A) IN GENERAL.—For purposes of this sub- A violation of a prohibition described in sec- REID (for Mr. DODD (for himself and Mr. section, the term ‘eligible single-family resi- tion 2703 or a failure to comply with any pro- SHELBY)) to the bill H.R. 3221, moving dence’ means a single-family structure that vision of section 2703 or 2704 shall be treated the United States toward greater en- is— as a violation of a rule defining an unfair or ergy independence and security, devel- ‘‘(i) a new previously unoccupied residence deceptive act or practice described under for which a building permit is issued and section 18(a)(1)(B) of the Federal Trade Com- oping innovative new technologies, re- construction begins on or before September mission Act (15 U.S.C. 57a(a)(1)(B)). ducing carbon emissions, creating 1, 2007, (2) ACTIONS BY THE FEDERAL TRADE COMMIS- green jobs, protecting consumers, in- ‘‘(ii) an owner-occupied residence with re- SION.—The Federal Trade Commission shall creasing clean renewable energy pro- spect to which the owner’s acquisition in- enforce the provisions of sections 2703 and duction, and modernizing our energy debtedness (as defined in section 163(h)(3)(B), 2704 in the same manner, by the same means, infrastructure, and to amend the Inter- determined without regard to clause (ii) and with the same jurisdiction, powers, and nal Revenue Code of 1986 to provide tax thereof) is in default on or before July 1, duties as though all applicable terms and incentives for the production of renew- 2008, or provisions of the Federal Trade Commission ‘‘(iii) a residence with respect to which a Act (15 U.S.C. 41 et seq.) were incorporated able energy and energy conservation; foreclosure event has taken place and which into and made part of this title. which was ordered to lie on the table; is owned by the mortgagor or the mortga- (b) STATE ACTION FOR VIOLATIONS.— as follows: gor’s agent. (1) AUTHORITY OF STATES.—In addition to On page 564, beginning at line 7, strike ‘‘(B) CERTIFICATION.—In the case of an eli- such other remedies as are provided under through page 572, line 22, and insert the fol- gible single-family residence described in State law, whenever the chief law enforce- lowing: subparagraph (A)(i), no credit shall be al- ment officer of a State, or an official or SEC. 3011. CREDIT FOR CERTAIN HOME PUR- lowed under this section unless the pur- agency designated by a State, has reason to CHASES. chaser submits a certification by the seller believe that any person has violated or is (a) ALLOWANCE OF CREDIT.—Subpart A of of such residence that such residence meets violating the provisions of section 2703 or part IV of subchapter A of chapter 1 (relating the requirements of such subparagraph. 2704, the State— to nonrefundable personal credits) is amend- ‘‘(d) DENIAL OF DOUBLE BENEFIT.—No credit (A) may bring an action to enjoin such vio- ed by inserting after section 25D the fol- shall be allowed under this section for any lation; lowing new section: purchase for which a credit is allowed under (B) may bring an action on behalf of its ‘‘SEC. 25E. CREDIT FOR CERTAIN HOME PUR- section 1400C. residents to recover damages for which the CHASES. ‘‘(e) SPECIAL RULES.— person is liable to such residents under sec- ‘‘(a) ALLOWANCE OF CREDIT.— ‘‘(1) JOINT PURCHASE.— tion 2705 as a result of the violation; and ‘‘(1) IN GENERAL.—In the case of an indi- ‘‘(A) MARRIED INDIVIDUALS FILING SEPA- (C) in the case of any successful action vidual who is a purchaser of a qualified prin- RATELY.—In the case of 2 married individuals under subparagraph (A) or (B), shall be cipal residence during the taxable year, filing separately, subsection (a) shall be ap- awarded the costs of the action and reason- there shall be allowed as a credit against the plied to each such individual by substituting able attorney fees, as determined by the tax imposed by this chapter an amount equal ‘$3,500’ for ‘$7,000’ in subsection (a)(1). court. to so much of the purchase price of the resi- ‘‘(B) UNMARRIED INDIVIDUALS.—If 2 or more (2) RIGHTS OF FEDERAL TRADE COMMISSION.— dence as does not exceed $7,000. individuals who are not married purchase a (A) NOTICE TO COMMISSION.—The State shall ‘‘(2) ALLOCATION OF CREDIT AMOUNT.—The serve prior written notice of any civil action amount of the credit allowed under para- qualified principal residence, the amount of under paragraph (1) upon the Commission graph (1) shall be equally divided among the the credit allowed under subsection (a) shall and provide the Commission with a copy of 2 taxable years beginning with the taxable be allocated among such individuals in such its complaint, except in any case in which year in which the purchase of the qualified manner as the Secretary may prescribe, ex- such prior notice is not feasible, in which principal residence is made. cept that the total amount of the credits al- lowed to all such individuals shall not exceed case the State shall serve such notice imme- ‘‘(b) LIMITATIONS.— $7,000. diately upon instituting such action. ‘‘(1) DATE OF PURCHASE.—The credit al- ‘‘(2) PURCHASE.—In defining the purchase (B) INTERVENTION.—The Commission shall lowed under subsection (a) shall be allowed have the right— only with respect to purchases made— of a qualified principal residence, rules simi- (i) to intervene in any action referred to in ‘‘(A) after June 30, 2008, and lar to the rules of paragraphs (2) and (3) of subparagraph (A); ‘‘(B) before July 1, 2009. section 1400C(e) (as in effect on the date of the enactment of this section) shall apply. (ii) upon so intervening, to be heard on all ‘‘(2) LIMITATION BASED ON AMOUNT OF TAX.— matters arising in the action; and In the case of a taxable year to which section ‘‘(3) REPORTING REQUIREMENT.—Rules simi- (iii) to file petitions for appeal in such ac- 26(a)(2) does not apply, the credit allowed lar to the rules of section 1400C(f) (as so in tions. under subsection (a) for any taxable year effect) shall apply. (3) INVESTIGATORY POWERS.—For purposes shall not exceed the excess of— ‘‘(f) BASIS ADJUSTMENT.—For purposes of of bringing any action under this subsection, ‘‘(A) the sum of the regular tax liability this subtitle, if a credit is allowed under this nothing in this subsection shall prevent the (as defined in section 26(b)) plus the tax im- section with respect to the purchase of any chief law enforcement officer, or an official posed by section 55, over residence, the basis of such residence shall be or agency designated by a State, from exer- ‘‘(B) the sum of the credits allowable under reduced by the amount of the credit so al- cising the powers conferred on the chief law this subpart (other than this section) for the lowed.’’. enforcement officer or such official by the taxable year. (b) CONFORMING AMENDMENT.—Section laws of such State to conduct investigations ‘‘(3) ONE-TIME ONLY.— 1016(a) is amended by striking ‘‘and’’ at the or to administer oaths or affirmations, or to ‘‘(A) IN GENERAL.—If a credit is allowed end of paragraph (35), by striking the period compel the attendance of witnesses or the under this section in the case of any indi- at the end of paragraph (36) and inserting ‘‘, production of documentary and other evi- vidual (and such individual’s spouse, if mar- and’’, and by adding at the end the following dence. ried) with respect to the purchase of any new paragraph: (4) LIMITATION.—Whenever the Federal qualified principal residence, no credit shall ‘‘(37) to the extent provided in section Trade Commission has instituted a civil ac- be allowed under this section in any taxable 25E(f).’’. tion for a violation of section 2703 or 2704, no year with respect to the purchase of any (c) CLERICAL AMENDMENT.—The table of State may, during the pendency of such ac- other qualified principal residence by such sections for subpart A of part IV of sub- tion, bring an action under this section individual or a spouse of such individual. chapter A of chapter 1 is amended by insert- against any defendant named in the com- ‘‘(B) JOINT PURCHASE.—In the case of a pur- ing after the item relating to section 25D the plaint of the Commission for any violation of chase of a qualified principal residence by 2 following new item: section 2703 or 2704 that is alleged in that or more unmarried individuals or by 2 mar- complaint. ried individuals filing separately, no credit ‘‘Sec. 25E. Credit for certain home pur- chases.’’.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00136 Fmt 4624 Sfmt 0655 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5907 SA 4990. Mr. VITTER submitted an duction, and modernizing our energy ‘‘(D) whether a particular mortgage pur- amendment intended to be proposed to infrastructure, and to amend the Inter- chased is an energy efficient mortgage (as amendment SA 4983 proposed by Mr. nal Revenue Code of 1986 to provide tax such term is defined in section lll02 of the Energy Efficient Mortgages Act of 2008);’’; REID (for Mr. DODD (for himself and Mr. incentives for the production of renew- and SHELBY)) to the bill H.R. 3221, moving able energy and energy conservation; (ii) in paragraph (2)(D), by inserting before the United States toward greater en- which was ordered to lie on the table; the closing parenthesis the following: ‘‘, and ergy independence and security, devel- as follows: whether the mortgage is an energy efficient oping innovative new technologies, re- At the appropriate place, insert the fol- mortgage (as such term is defined in section ducing carbon emissions, creating lowing: lll02 of the Energy Efficient Mortgages Act of 2008)’’; and green jobs, protecting consumers, in- TITLE lll—ENERGY EFFICIENT (B) in subsection (n)(2)(C), by inserting be- creasing clean renewable energy pro- MORTGAGES fore the semicolon the following: ‘‘and the duction, and modernizing our energy SEC. ll01. SHORT TITLE. extent to which the mortgages on single infrastructure, and to amend the Inter- This title may be cited as the ‘‘Energy Ef- family and multifamily housing purchased nal Revenue Code of 1986 to provide tax ficient Mortgages Act of 2008’’. by the corporation are energy efficient mort- incentives for the production of renew- SEC. ll02. DEFINITION. gages (as such term is defined in section able energy and energy conservation; As used in this title, the term ‘‘energy effi- lll02 of the Energy Efficient Mortgages which was ordered to lie on the table; cient mortgage’’ means a mortgage loan Act of 2008)’’. (b) FREDDIE MAC PURCHASE AUTHORITY.— as follows: under which the income of the borrower, for purposes of qualification for such loan, is The Federal Home Loan Mortgage Corpora- At the end of Division B, insert the fol- considered to be increased by not less than $1 tion Act is amended— lowing: for each $1 of savings projected to be realized (1) in section 305(a) (12 U.S.C. 1454), by add- TITLE VII—ENSURING ASSISTANCE IS by the borrower as a result of cost-effective ing at the end the following new paragraph: PROVIDED ONLY TO DESERVING HOME- energy saving construction or improvements ‘‘(6) The mortgages specified in this sub- OWNERS for the home for which the loan is made. section that the Corporation is authorized to purchase, sell, service, lend on the security SEC. 2701. LIMITATION ON USE OF FUNDS. SEC. ll03. ADDITIONAL CREDIT FOR FANNIE of, and otherwise deal in, shall include any (a) DEFINITION.—For purposes of this sec- MAE AND FREDDIE MAC HOUSING GOALS FOR ENERGY EFFICIENT such mortgages that are energy efficient tion, the term ‘‘housing assistance’’ means mortgages (as such term is defined in section the following: MORTGAGES. Section 1336(a) of the Housing and Commu- lll02 of the Energy Efficient Mortgages (1) Any amounts appropriated, authorized Act of 2008).’’; and to be appropriated, or otherwise made avail- nity Development Act of 1992 (12 U.S.C. 4566(a)) is amended— (2) in section 307 (12 U.S.C. 1456)— able under this Act, or any amendment made (A) in subsection (e)— by this Act. (1) in paragraph (2), by inserting ‘‘, except as provided in paragraph (4),’’ after ‘‘which’’; (i) in paragraph (1)— (2) Any qualified mortgage bond issued by (I) by redesignating subparagraphs (D) and a State or political subdivision or any other and (2) by adding at the end the following new (E) as subparagraphs (E) and (F), respec- entity or organization pursuant to section tively; and 143(k)(12) of the Internal Revenue Code, as paragraph: ‘‘(5) ADDITIONAL CREDIT.— (II) by inserting after subparagraph (C) the added by section 3021(b) of this Act. following new subparagraph: (3) Any tax credit related to first-time ‘‘(A) AMOUNT.— ‘‘(i) IN GENERAL.—In assigning credit to- ‘‘(D) whether a particular mortgage pur- homebuyers allowable under section 36 of the chased is an energy efficient mortgage (as Internal Revenue Code of 1986, as added by ward achievement under this section of the housing goals for mortgage purchase activi- such term is defined in section lll02 of the section 3011 of this Act. Energy Efficient Mortgages Act of 2008);’’; (4) Any assistance, loan, loan guarantee, ties of the enterprises, the Director shall as- sign not less than 125 percent credit, for pur- and housing, housing assistance, or other hous- (ii) in paragraph (2)(D), by inserting before ing related program administered, in whole chases of mortgages that— ‘‘(I) comply with the requirements of such the closing parenthesis the following: ‘‘, and or in part, by the Secretary of Housing and whether the mortgage is an energy efficient goals; and Urban Development, the Secretary of Vet- mortgage (as such term is defined in section ‘‘(II) are energy efficient mortgages, as erans Affairs, or any other Federal agency. lll02 of the Energy Efficient Mortgages such term is defined under section lll02 of (b) LIMITATION.—Housing assistance may Act of 2008)’’; and the Energy Efficient Mortgages Act of 2008. not be provided or distributed to, or used by, (B) in subsection (f)(2)(C), by inserting be- ‘‘(ii) EXTENT OF CREDIT.—Any additional any homeowner that made— fore the semicolon the following: ‘‘and the credit assigned under clause (i) shall be (1) any material misstatement or misrepre- extent to which the mortgages on single given based on the extent to which the hous- sentation on his or her original mortgage ap- family and multifamily housing purchased ing supported with such purchases is energy plication; or by the Corporation are energy efficient efficient. (2) any false statements on his or her origi- mortgages (as such term is defined in section ‘‘(B) TREATMENT OF ADDITIONAL CREDIT.— nal mortgage application to qualify for the lll02 of the Energy Efficient Mortgages home loan. The availability of additional credit under Act of 2008)’’. this paragraph shall not be used to increase (c) REQUIRED DOCUMENTATION.—In order to SEC. ll05. RECOMMENDATIONS TO ELIMINATE prove to the head of a Federal agency admin- any housing goal, subgoal, or target estab- BARRIERS TO USE OF ENERGY EFFI- istering any housing assistance that a home- lished under this subpart.’’. CIENT MORTGAGES. owner has not violated the prohibitions de- SEC. ll04. AUTHORITY OF HOUSING-RELATED (a) IN GENERAL.—Not later than 180 days scribed in subsection (b), such a homeowner GOVERNMENT-SPONSORED ENTER- after the date of enactment of this title, the shall provide documentation sufficient to PRISES WITH RESPECT TO ENERGY Secretary of Housing and Urban Develop- EFFICIENT MORTGAGES AND RE- ment, in conjunction with the Secretary of the satisfaction of such agency head that PORTING. demonstrates that the homeowner did not Energy and the Administrator of the Envi- (a) FANNIE MAE PURCHASE AUTHORITY.— make any— ronmental Protection Agency, shall consult The Federal National Mortgage Association with the residential mortgage industry and (1) any material misstatement or misrepre- Charter Act is amended— sentation on his or her original mortgage ap- States to develop recommendations to elimi- (1) in section 302(b) (12 U.S.C. 1717(b)), by nate the barriers that exist to increasing the plication; or adding at the end the following new para- (2) any false statements on his or her origi- availability, use, and purchase of energy effi- graph: cient mortgages, including such barriers as— nal mortgage application to qualify for the ‘‘(7) The mortgages specified in this sub- home loan. (1) the lack of reliable and accessible infor- section that the corporation is authorized to mation on such mortgages, including esti- purchase, sell, service, lend on the security SA 4991. Mr. BINGAMAN (for himself mated energy savings and other benefits of of, and otherwise deal in, shall include any energy efficient housing; and Mr. DOMENICI) submitted an such mortgages that are energy efficient (2) the confusion regarding underwriting amendment intended to be proposed to mortgages (as such term is defined in section requirements and differences among various amendment SA 4983 proposed by Mr. lll02 of the Energy Efficient Mortgages energy efficient mortgage programs; REID (for Mr. DODD (for himself and Mr. Act of 2008).’’; and (3) the complex and time consuming proc- SHELBY)) to the bill H.R. 3221, moving (2) in section 309 (12 U.S.C. 1723a)— ess of securing such mortgages; the United States toward greater en- (A) in subsection (m)— (4) the lack of publicly available research ergy independence and security, devel- (i) in paragraph (1)— on the default risk of such mortgages; and (I) by redesignating subparagraphs (D) and oping innovative new technologies, re- (5) the availability of certified or accred- (E) as subparagraphs (E) and (F), respec- ited home energy rating services. ducing carbon emissions, creating tively; and (b) REPORT TO CONGRESS.—The Secretary of green jobs, protecting consumers, in- (II) by inserting after subparagraph (C) the Housing and Urban Development shall sub- creasing clean renewable energy pro- following new subparagraph: mit a report to Congress that—

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00137 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5908 CONGRESSIONAL RECORD — SENATE June 19, 2008 (1) summarizes the recommendations de- ‘‘$70,000,000’’ and all that follows and insert- production of renewable energy and en- veloped under subsection (a); and ing ‘‘$100,000,000 for fiscal year 2009 and such ergy conservation; which was ordered (2) includes any recommendations for stat- sums as may be necessary for each subse- to lie on the table; as follows: utory, regulatory, or administrative changes quent fiscal year.’’. At the appropriate place, insert the fol- the Secretary deems necessary to institute (b) EMERGENCY ASSISTANCE.—Section 722 of lowing: such recommendations. the McKinney-Vento Homeless Assistance SEC. ll. TREATMENT OF NATIONAL COOPERA- SEC. ll06. ENERGY EFFICIENT MORTGAGES Act (42 U.S.C. 11432) is amended by adding at TIVE BANK SUBSIDIARY AS CDFI. OUTREACH CAMPAIGN. the end the following: Section 211 of the National Consumer Co- (a) IN GENERAL.—The Secretary of Housing ‘‘(h) SPECIAL RULE FOR EMERGENCY ASSIST- operative Bank Act (12 U.S.C. 3051) is amend- and Urban Development, in consultation and ANCE.— ed— coordination with the Secretary of Energy, ‘‘(1) EMERGENCY ASSISTANCE.— (1) by redesignating subsection (e) as sub- the Administrator of the Environmental ‘‘(A) RESERVATION OF AMOUNTS.—Subject to section (f); and Protection Agency, and State Energy and paragraph (4) and notwithstanding any other (2) by inserting after subsection (d) the fol- Housing Finance Directors, shall carry out provision of this title, the Secretary shall lowing: an education and outreach campaign to in- use funds appropriated under section 726 for fiscal year 2009, but not to exceed $30,000,000, ‘‘(e) TREATMENT AS CDFI.—Notwith- form and educate consumers, home builders, standing any other provision of law, the non- residential lenders, and other real estate pro- for the purposes of providing emergency as- sistance through grants. profit corporation established under this sec- fessionals on the availability, benefits, and tion shall be deemed to be a community de- advantages of— ‘‘(B) GENERAL AUTHORITY.—The Secretary shall use the funds to make grants to State velopment financial institution for purposes (1) improved energy efficiency in housing; of the Community Development Banking and and educational agencies under paragraph (2), to enable the agencies to make subgrants to Financial Institutions Act of 1994 (12 U.S.C. (2) energy efficient mortgages. 4701 et seq.).’’. (b) AUTHORIZATION OF APPROPRIATIONS.— local educational agencies under paragraph There are authorized to be appropriated such (3), to provide activities described in section Mr. BROWN submitted an 723(d) for individuals referred to in subpara- SA 4995. sums as are necessary to carry out the edu- amendment intended to be proposed by cation and outreach campaign described graph (C). under subsection (a). ‘‘(C) ELIGIBLE INDIVIDUALS.—Funds made him to the bill H.R. 3221, moving the available under this subsection shall be used United States toward greater energy SA 4992. Mr. ALLARD submitted an to provide such activities for eligible individ- independence and security, developing amendment intended to be proposed to uals, consisting of homeless children and innovative new technologies, reducing amendment SA 4983 proposed by Mr. youths, and their families, who have become carbon emissions, creating green jobs, homeless due to home foreclosure, including REID (for Mr. DODD (for himself and Mr. protecting consumers, increasing clean children and youths, and their families, who renewable energy production, and mod- SHELBY)) to the bill H.R. 3221, moving became homeless when lenders foreclosed on the United States toward greater en- properties rented by the families. ernizing our energy infrastructure, and ergy independence and security, devel- ‘‘(2) GRANTS TO STATE EDUCATIONAL AGEN- to amend the Internal Revenue Code of oping innovative new technologies, re- CIES.— 1986 to provide tax incentives for the ducing carbon emissions, creating ‘‘(A) DISBURSEMENT.—The Secretary shall production of renewable energy and en- green jobs, protecting consumers, in- make grants with funds provided under para- ergy conservation; which was ordered creasing clean renewable energy pro- graph (1)(A) to State educational agencies to lie on the table; as follows: based on need, consistent with the number of duction, and modernizing our energy On page 455, between lines 14 and 15, insert eligible individuals described in paragraph the following: infrastructure, and to amend the Inter- (1)(C) in the States involved, as determined nal Revenue Code of 1986 to provide tax by the Secretary. SEC. 1606. TRANSFER OF CERTAIN RENTAL AS- SISTANCE CONTRACTS. incentives for the production of renew- ‘‘(B) ASSURANCE.—To be eligible to receive (a) TRANSFER.—Subject to subsection (c) a grant under this paragraph, a State edu- able energy and energy conservation; and notwithstanding any other provision of cational agency shall provide an assurance which was ordered to lie on the table; law, the Secretary of Housing and Urban De- to the Secretary that the State educational as follows: velopment shall, at the request of the owner, agency, and each local educational agency At the appropriate place in title II of divi- transfer or authorize the transfer, of the con- receiving a subgrant from the State edu- sion A, insert the following: tracts, restrictions, and debt described in cational agency under this subsection, shall subsection (b)— SEC. 12ll. FEDERAL HOME LOAN BANK COLLAT- ensure that the activities carried out under (1) on the housing that is owned or man- ERAL. this subsection are consistent with the ac- aged by Community Properties of Ohio Man- Section 10(a)(3)(D) of the Federal Home tivities described in section 723(d). Loan Bank Act (12 U.S.C. 1430(a)(3)(D)) is agement Services LLC or an affiliate of Ohio ‘‘(3) SUBGRANTS TO LOCAL EDUCATIONAL amended by inserting ‘‘, and other collateral, Capital Corporation for Housing and located AGENCIES.—A State educational agency that in Franklin County, Ohio, to other prop- subject to such regulation, order, and direc- receives a grant under paragraph (2) shall erties located in Franklin County, Ohio; and tion as the Agency may prescribe,’’ before use the funds made available through the (2) on the housing that is owned or man- ‘‘if such collateral’’. grant to make subgrants to local educational aged by The Model Group, Inc., and located agencies. The State educational agency shall in Hamilton County, Ohio, to other prop- SA 4993. Mr. MENENDEZ (for him- make the subgrants to local educational erties located in Hamilton County, Ohio. self, Mrs. MURRAY, and Mr. BROWN) agencies based on need, consistent with the (b) CONTRACTS, RESTRICTIONS, AND DEBT submitted an amendment intended to number of eligible individuals described in COVERED.—The contracts, restrictions, and be proposed to amendment SA 4983 pro- paragraph (1)(C) in the areas served by the debt described in this subsection are as fol- posed by Mr. REID (for Mr. DODD (for local educational agencies, as determined by lows: himself and Mr. SHELBY)) to the bill the State educational agency. (1) All or a portion of a project-based rent- H.R. 3221, moving the United States to- ‘‘(4) RESTRICTION.—The Secretary— al assistance housing assistance payments ward greater energy independence and ‘‘(A) shall determine the amount (if any) contract under section 8 of the United States by which the funds appropriated under sec- security, developing innovative new Housing Act of 1937 (42 U.S.C. 1437f). tion 726 for fiscal year 2009 exceed $70,000,000; (2) Existing Federal use restrictions, in- technologies, reducing carbon emis- and sions, creating green jobs, protecting cluding without limitation use agreements, ‘‘(B) may only use funds from that amount regulatory agreements, and accommodation consumers, increasing clean renewable to carry out this subsection.’’. agreements. energy production, and modernizing (3) Any subordinate debt held by the Sec- our energy infrastructure, and to SA 4994. Mr. BROWN submitted an retary or assigned and any mortgages secur- amend the Internal Revenue Code of amendment intended to be proposed by ing such debt, all related loan and security 1986 to provide tax incentives for the him to the bill H.R. 3221, moving the documentation and obligations, and reserve production of renewable energy and en- United States toward greater energy and escrow balances. ergy conservation; which was ordered independence and security, developing (c) RETENTION OF SAME NUMBER OF UNITS to lie an the table; as follows: innovative new technologies, reducing AND AMOUNTS OF ASSISTANCE.—Any transfer pursuant to subsection (a) shall result in— At the appropriate place, insert the fol- carbon emissions, creating green jobs, protecting consumers, increasing clean (1) a total number of dwelling units (in- lowing: cluding units retained by the owners and SEC. ll. HOMELESS ASSISTANCE. renewable energy production, and mod- units transferred) covered by assistance de- (a) APPROPRIATIONS.—Section 726 of the ernizing our energy infrastructure, and scribed in subsection (b)(1) after the transfer McKinney-Vento Homeless Assistance Act to amend the Internal Revenue Code of remaining the same as such number assisted (42 U.S.C. 11435) is amended by striking 1986 to provide tax incentives for the before the transfer, with such increases or

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00138 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5909 decreases in unit sizes as may be contained Commission may intervene in such civil ac- REID (for Mr. DODD (for himself and Mr. in a plan approved by a local planning or de- tion and upon intervening— SHELBY)) to the bill H.R. 3221, moving velopment commission or department; and (A) be heard on all matters arising in such the United States toward greater en- (2) no reduction in the total amount of the civil action; ergy independence and security, devel- housing assistance payments under con- (B) remove the action to the appropriate tracts described in subsection (b)(1). United States district court; and oping innovative new technologies, re- (C) file petitions for appeal of a decision in ducing carbon emissions, creating SA 4996. Mr. DORGAN submitted an such civil action. green jobs, protecting consumers, in- amendment intended to be proposed to (4) SAVINGS CLAUSE.—Nothing in this sub- creasing clean renewable energy pro- amendment SA 4983 proposed by Mr. section shall prevent the attorney general of duction, and modernizing our energy REID (for Mr. DODD (for himself and Mr. a State from exercising the powers conferred infrastructure, and to amend the Inter- on the attorney general by the laws of such SHELBY)) to the bill H.R. 3221, moving nal Revenue Code of 1986 to provide tax State to conduct investigations or to admin- incentives for the production of renew- the United States toward greater en- ister oaths or affirmations or to compel the ergy independence and security, devel- attendance of witnesses or the production of able energy and energy conservation; oping innovative new technologies, re- documentary and other evidence. Nothing in which was ordered to lie on the table; ducing carbon emissions, creating this section shall prohibit the attorney gen- as follows: green jobs, protecting consumers, in- eral of a State, or other authorized State of- On page 455, between lines 14 and 15, insert creasing clean renewable energy pro- ficer, from proceeding in State or Federal the following: duction, and modernizing our energy court on the basis of an alleged violation of any civil or criminal statute of that State. SEC. 1606. PRESERVATION AND PROVISION OF infrastructure, and to amend the Inter- PROJECT-BASED HOUSING FOR AF- (5) VENUE; SERVICE OF PROCESS; JOINDER.— nal Revenue Code of 1986 to provide tax FORDABLE HOUSING UNITS DAM- In a civil action brought under paragraph AGED OR DESTROYED BY HURRI- incentives for the production of renew- (1)— CANES KATRINA OR RITA. able energy and energy conservation; (A) the venue shall be a judicial district in (a) OWNER PROPOSALS FOR REUSE OR which was ordered to lie on the table; which the the defendant is found, is an in- RESITING OF AFFORDABLE UNITS.—Pursuant as follows: habitant, or transacts business or wherever to section 215 of title II of division K of Pub- At the appropriate place insert the fol- venue is proper under section 1391 of title 28, lic Law 110-161 (121 Stat. 2433), the Secretary lowing: United States Code; and of Housing and Urban Development shall, (B) process may be served without regard SEC. ———. ENFORCEMENT OF MORTGAGE LOAN not later than October 1, 2009, promptly re- RULES. to the territorial limits of the district or of view and approve— (a) PURPOSE.—The purpose of this section the State in which the civil action is insti- (1) any feasible proposal made by the is to enhance enforcement of the mortgage tuted. owner of a covered assisted multifamily loan rules under the Truth in Lending Act (6) PREEMPTIVE ACTION BY FTC.—Whenever housing project submitted to the Secretary (15 U.S.C. 1601 et seq.) and to prevent harm a civil action or an administrative action that provides for the rehabilitation of such to consumers and mortgage markets from has been instituted by or on behalf of the project and the resumption of use of the detrimental practices relating to subprime Commission for violation of any provision of project-based assistance under the contract or nontraditional mortgage loans. law or rule described in paragraph (1), no for such project; or (b) RULEMAKING REQUIRED.—Within 90 days State may, during the pendency of such ac- (2) the transfer, subject to the conditions after the date of enactment of this Act, the tion instituted by or on behalf of the Com- established under section 215(b) of title II of Federal Trade Commission shall initiate a mission, institute a civil action under that division K of Public Law 110-161, of the con- rulemaking proceeding with respect to paragraph against any defendant named in tract for such covered assisted multifamily subprime mortgage loans and nontraditional the complaint in such action for violation of housing project, or in the case of a covered mortgage loans in accordance with section any law or rule as alleged in such complaint. assisted multifamily housing project with an 553 of title 5, United States Code, notwith- (7) AWARD OF COSTS AND FEES.—If the attor- interest reduction payments contract, of the standing section 18 of the Federal Trade ney general of a State prevails in any civil remaining budget authority under the con- Commission Act (15 U.S.C. 57a) or any other action under paragraph (1), the State can re- tract, to a receiving project or projects. cover reasonable costs and attorney fees provision of law. Any violation of a rule pre- (b) DEFINITIONS.—For purposes of this sec- scribed under this subsection shall be treated from the lender or related party. tion— as a violation of a rule under section 18 of SA 4997. Ms. LANDRIEU submitted (1) the term ‘‘covered assisted multifamily the Federal Trade Commission Act (15 U.S.C. housing project’’ means housing that— 57a) regarding unfair or deceptive acts or an amendment intended to be proposed (A) meets one of the conditions established practices. Violation of the rule is punishable to amendment SA 4983 proposed by Mr. in section 215(c)(2) of title II of division K of by a civil penalty to the same extent as if it REID (for Mr. DODD (for himself and Mr. Public Law 110-161; were a violation of a rule promulgated under SHELBY)) to the bill H.R. 3221, moving (B) was damaged or destroyed by Hurricane that Act. the United States toward greater en- Katrina or Hurricane Rita of 2005; and (c) ENFORCEMENT BY STATE ATTORNEYS ergy independence and security, devel- (C) is located in an area in the State of GENERAL.— oping innovative new technologies, re- Louisiana, Alabama, or Mississippi that was (1) IN GENERAL.—Except as provided in ducing carbon missions, creating green the subject of a disaster declaration by the paragraph (6), a State, as parens patriae, President under title IV of the Robert T. may bring a civil action on behalf of its resi- jobs, protecting consumers, increasing Stafford Disaster Relief and Emergency As- dents in an appropriate State or district clean renewable energy production, and sistance Act (42 U.S.C. 5121 et seq.) in re- court of the United States to enforce the modernizing our energy infrastructure, sponse to Hurricane Katrina or Hurricane provisions of section 128 of the Truth in and to amend the Internal Revenue Rita of 2005; Lending Act (15 U.S.C. 1638), any other provi- Code of 1986 to provide tax incentives (2) the term ‘‘project-based assistance’’ has sion of the Truth in Lending Act, or any for the production of renewable energy the same meaning as in section 215(c)(3) of subprime mortgage lending rule or nontradi- and energy conservation; which was or- title II of division K of Public Law 110-161; tional mortgage loan rule promulgated by dered to lie on the table; as follows: and the Federal Trade Commission to obtain pen- (3) the term ‘‘receiving project or projects’’ alties and relief provided under such Act or On page 510, strike lines 1 through 5, and has the same meaning as in section 215(c)(4) rule whenever the attorney general of the insert the following: of title II of division K of Public Law 110-161. State has reason to believe that the interests (C) establish land banks for homes that have been foreclosed upon; of the residents of the State have been or are . Mr. SUNUNU (for himself being threatened or adversely affected by a (D) demolish blighted structures; SA 4999 violation of such Act or rule. (E) establish or support land banks for and Ms. SNOWE) proposed an amend- (2) NOTICE.—The State shall serve written homes that have been damaged or destroyed ment to amendment SA 4983 proposed notice to the Commission of any civil action as a result of Hurricanes Katrina or Rita of by Mr. REID (for Mr. DODD (for himself under subsection (b) at least 60 days prior to 2005, or to rehabilitate or redevelop such and Mr. SHELBY)) to the bill H.R. 3221, initiating such civil action. The notice shall damaged or destroyed homes which have moving the United States toward include a copy of the complaint to be filed to been conveyed by the State or unit of local greater energy independence and secu- initiate such civil action, except that if it is government; and (F) redevelop demolished or vacant prop- rity, developing innovative new tech- not feasible for the State to provide such nologies, reducing carbon emissions, prior notice, the State shall provide notice erties. immediately upon instituting such civil ac- creating green jobs, protecting con- tion. SA 4998. Ms. LANDRIEU submitted sumers, increasing clean renewable en- (3) INTERVENTION BY FTC.—Upon receiving an amendment intended to be proposed ergy production, and modernizing our the notice required by paragraph (2), the to amendment SA 4983 proposed by Mr. energy infrastructure, and to amend

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00139 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5910 CONGRESSIONAL RECORD — SENATE June 19, 2008 the Internal Revenue Code of 1986 to public housing agencies, except that for pur- any qualified public housing agency, to the provide tax incentives for the produc- poses of such qualified public housing agen- extent such reference applies to the require- tion of renewable energy and energy cies, subparagraph (B) of such paragraph ment to submit an annual public housing conservation; as follows: shall be applied by substituting ‘the func- agency plan under this subsection. tions described in the second sentence of ‘‘(B) CIVIL RIGHTS CERTIFICATION.—Notwith- At the end of Division B, insert the fol- paragraph (4)(A)’ for ‘the functions described standing that qualified public housing agen- lowing: in paragraph (2)’. cies are exempt under subparagraph (A) from TITLE VII—SMALL PUBLIC HOUSING AU- ‘‘(f) PUBLIC HEARINGS.—’’; and the requirement under this section to pre- THORITIES PAPERWORK REDUCTION (2) in subsection (f) (as so designated by pare and submit an annual public housing ACT the amendment made by paragraph (1)), by plan, each qualified public housing agency SEC. 2701. SHORT TITLE. adding at the end the following: shall, on an annual basis, make the certifi- This title may be cited as the ‘‘Small Pub- ‘‘(5) QUALIFIED PUBLIC HOUSING AGENCIES.— cation described in paragraph (16) of sub- lic Housing Authorities Paperwork Reduc- ‘‘(A) REQUIREMENT.—Notwithstanding that section (d), except that for purposes of such qualified public housing agencies, such para- tion Act’’. qualified public housing agencies are exempt under subsection (b)(3)(A) from the require- graph shall be applied by substituting ‘the SEC. 2702. PUBLIC HOUSING AGENCY PLANS FOR public housing program of the agency’ for CERTAIN QUALIFIED PUBLIC HOUS- ment under this section to conduct a public ING AGENCIES. hearing regarding the annual public housing ‘the public housing agency plan’. ‘‘(C) DEFINITION.—For purposes of this sec- (a) IN GENERAL.—Section 5A(b) of the plan of the agency, each qualified public tion, the term ‘qualified public housing United States Housing Act of 1937 (42 U.S.C. housing agency shall annually conduct a agency’ means a public housing agency that 1437c–1(b)) is amended by adding at the end public hearing— meets the following requirements: the following: ‘‘(i) to discuss any changes to the goals, ‘‘(i) The sum of (I) the number of public ‘‘(3) EXEMPTION OF CERTAIN PHAS FROM FIL- objectives, and policies of the agency; and housing dwelling units administered by the ING REQUIREMENT.— ‘‘(ii) to invite public comment regarding agency, and (II) the number of vouchers ‘‘(A) IN GENERAL.—Notwithstanding para- such changes. ‘‘(B) AVAILABILITY OF INFORMATION AND NO- under section 8(o) of the United States Hous- graph (1) or any other provision of this Act— ing Act of 1937 (42 U.S.C. 1437f(o)) adminis- ‘‘(i) the requirement under paragraph (1) TICE.—Not later than 45 days before the date of any hearing described in subparagraph tered by the agency, is 750 or fewer. shall not apply to any qualified public hous- ‘‘(ii) The agency is not designated under ing agency; and (A), a qualified public housing agency shall— ‘‘(i) make all information relevant to the section 6(j)(2) as a troubled public housing ‘‘(ii) except as provided in subsection agency.’’. (e)(4)(B), any reference in this section or any hearing and any determinations of the agen- cy regarding changes to the goals, objec- (b) RESIDENT PARTICIPATION.—Section 5A other provision of law to a ‘public housing of the United States Housing Act of 1937 (42 tives, and policies of the agency to be consid- agency’ shall not be considered to refer to U.S.C. 1437c–1) is amended— ered at the hearing available for inspection any qualified public housing agency, to the (1) in subsection (e), by inserting after by the public at the principal office of the extent such reference applies to the require- paragraph (3) the following: public housing agency during normal busi- ment to submit an annual public housing ‘‘(4) QUALIFIED PUBLIC HOUSING AGENCIES.— ness hours; and agency plan under this subsection. ‘‘(A) IN GENERAL.—Except as provided in ‘‘(ii) publish a notice informing the public ‘‘(B) CIVIL RIGHTS CERTIFICATION.—Notwith- subparagraph (B), nothing in this section that— standing that qualified public housing agen- may be construed to exempt a qualified pub- ‘‘(I) the information is available as re- cies are exempt under subparagraph (A) from lic housing agency from the requirement the requirement under this section to pre- quired under clause (i); and under paragraph (1) to establish 1 or more pare and submit an annual public housing ‘‘(II) a public hearing under subparagraph resident advisory boards. Notwithstanding plan, each qualified public housing agency (A) will be conducted.’’. that qualified public housing agencies are shall, on an annual basis, make the certifi- exempt under subsection (b)(3)(A) from the cation described in paragraph (16) of sub- SA 5000. Mr. SUNUNU submitted an requirement under this section to prepare section (d), except that for purposes of such amendment intended to be proposed by and submit an annual public housing plan, qualified public housing agencies, such para- him to the bill H.R. 3221, moving the each qualified public housing agency shall graph shall be applied by substituting ‘the United States toward greater energy consult with, and consider the recommenda- public housing program of the agency’ for independence and security, developing tions of the resident advisory boards for the ‘the public housing agency plan’. innovative new technologies, reducing agency, at the annual public hearing re- ‘‘(C) DEFINITION.—For purposes of this sec- carbon emissions, creating green jobs, quired under subsection (f)(5), regarding any tion, the term ‘qualified public housing protecting consumers, increasing clean changes to the goals, objectives, and policies agency’ means a public housing agency that of that agency. renewable energy production, and mod- meets the following requirements: ‘‘(B) APPLICABILITY OF WAIVER AUTHOR- ‘‘(i) The sum of (I) the number of public ernizing our energy infrastructure, and ITY.—Paragraph (3) shall apply to qualified housing dwelling units administered by the to amend the Internal Revenue Code of public housing agencies, except that for pur- agency, and (II) the number of vouchers 1986 to provide tax incentives for the poses of such qualified public housing agen- under section 8(o) of the United States Hous- production of renewable energy and en- cies, subparagraph (B) of such paragraph ing Act of 1937 (42 U.S.C. 1437f(o)) adminis- ergy conservation; which was ordered shall be applied by substituting ‘the func- tered by the agency, is 750 or fewer. to lie on the table; as follows: tions described in the second sentence of ‘‘(ii) The agency is not designated under paragraph (4)(A)’ for ‘the functions described At the end of Division B, insert the fol- section 6(j)(2) as a troubled public housing in paragraph (2)’. lowing: agency.’’. ‘‘(f) PUBLIC HEARINGS.—’’; and (b) RESIDENT PARTICIPATION.—Section 5A TITLE VII—SMALL PUBLIC HOUSING AU- (2) in subsection (f) (as so designated by of the United States Housing Act of 1937 (42 THORITIES PAPERWORK REDUCTION the amendment made by paragraph (1)), by U.S.C. 1437c–1) is amended— ACT adding at the end the following: (1) in subsection (e), by inserting after SEC. 2701. SHORT TITLE. ‘‘(5) QUALIFIED PUBLIC HOUSING AGENCIES.— paragraph (3) the following: This title may be cited as the ‘‘Small Pub- ‘‘(A) REQUIREMENT.—Notwithstanding that ‘‘(4) QUALIFIED PUBLIC HOUSING AGENCIES.— lic Housing Authorities Paperwork Reduc- qualified public housing agencies are exempt ‘‘(A) IN GENERAL.—Except as provided in tion Act’’. under subsection (b)(3)(A) from the require- subparagraph (B), nothing in this section SEC. 2702. PUBLIC HOUSING AGENCY PLANS FOR ment under this section to conduct a public may be construed to exempt a qualified pub- CERTAIN QUALIFIED PUBLIC HOUS- hearing regarding the annual public housing lic housing agency from the requirement ING AGENCIES. plan of the agency, each qualified public under paragraph (1) to establish 1 or more (a) IN GENERAL.—Section 5A(b) of the housing agency shall annually conduct a resident advisory boards. Notwithstanding United States Housing Act of 1937 (42 U.S.C. public hearing— that qualified public housing agencies are 1437c–1(b)) is amended by adding at the end ‘‘(i) to discuss any changes to the goals, exempt under subsection (b)(3)(A) from the the following: objectives, and policies of the agency; and requirement under this section to prepare ‘‘(3) EXEMPTION OF CERTAIN PHAS FROM FIL- ‘‘(ii) to invite public comment regarding and submit an annual public housing plan, ING REQUIREMENT.— such changes. each qualified public housing agency shall ‘‘(A) IN GENERAL.—Notwithstanding para- ‘‘(B) AVAILABILITY OF INFORMATION AND NO- consult with, and consider the recommenda- graph (1) or any other provision of this Act— TICE.—Not later than 45 days before the date tions of the resident advisory boards for the ‘‘(i) the requirement under paragraph (1) of any hearing described in subparagraph agency, at the annual public hearing re- shall not apply to any qualified public hous- (A), a qualified public housing agency shall— quired under subsection (f)(5), regarding any ing agency; and ‘‘(i) make all information relevant to the changes to the goals, objectives, and policies ‘‘(ii) except as provided in subsection hearing and any determinations of the agen- of that agency. (e)(4)(B), any reference in this section or any cy regarding changes to the goals, objec- ‘‘(B) APPLICABILITY OF WAIVER AUTHOR- other provision of law to a ‘public housing tives, and policies of the agency to be consid- ITY.—Paragraph (3) shall apply to qualified agency’ shall not be considered to refer to ered at the hearing available for inspection

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00140 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5911 by the public at the principal office of the (6) in subsection (i)(1)(C), by striking ‘‘lim- employer under subsection (b), (c), (m), or (o) public housing agency during normal busi- itations’’ and inserting ‘‘limitation’’; of section 414 of such Code. ness hours; and On page 471, line 25, strike ‘‘(6)’’ and insert (c) AMOUNT DISTRIBUTED MAY BE REPAID.— ‘‘(ii) publish a notice informing the public ‘‘(7)’’. (1) IN GENERAL.—Any individual who re- that— On page 472, line 1, strike ‘‘(7)’’ and insert ceives a qualified foreclosure recovery dis- ‘‘(I) the information is available as re- ‘‘(8)’’. tribution may, at any time during the 2-year quired under clause (i); and On page 472, line 3, strike ‘‘(8)’’ and insert period beginning on the day after the date on ‘‘(II) a public hearing under subparagraph ‘‘(9)’’. which such distribution was received, make (A) will be conducted.’’. On page 472, line 13, strike ‘‘(9)’’ and insert one or more contributions in an aggregate ‘‘(10)’’. amount not to exceed the amount of such SA 5001. Mr. CORKER submitted an distribution to an eligible retirement plan of amendment intended to be proposed to SA 5004. Mr. NELSON of Florida (for which such individual is a beneficiary and to amendment SA 4983 proposed by Mr. himself and Mr. COLEMAN) submitted which a rollover contribution of such dis- REID (for Mr. DODD (for himself and Mr. an amendment intended to be proposed tribution could be made under section 402(c), SHELBY)) to the bill H.R. 3221, moving to amendment SA 4983 proposed by Mr. 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16) of the United States toward greater en- REID (for Mr. DODD (for himself and Mr. the Internal Revenue Code of 1986, as the case may be. ergy independence and security, devel- SHELBY)) to the bill H.R. 3221, moving (2) TREATMENT OF REPAYMENTS OF DIS- oping innovative new technologies, re- the United States toward greater en- TRIBUTIONS FROM ELIGIBLE RETIREMENT PLANS ducing carbon emissions, creating ergy independence and security, devel- OTHER THAN IRAS.—For purposes of such green jobs, protecting consumers, in- oping innovative new technologies, re- Code, if a contribution is made pursuant to creasing clean renewable energy pro- ducing carbon emissions, creating paragraph (1) with respect to a qualified fore- duction, and modernizing our energy green jobs, protecting consumers, in- closure recovery distribution from an eligi- infrastructure, and to amend the Inter- creasing clean renewable energy pro- ble retirement plan other than an individual nal Revenue Code of 1986 to provide tax duction, and modernizing our energy retirement plan, then the taxpayer shall, to infrastructure, and to amend the Inter- the extent of the amount of the contribu- incentives for the production of renew- tion, be treated as having received the quali- able energy and energy conservation; nal Revenue Code of 1986 to provide tax fied foreclosure recovery distribution in an which was ordered to lie on the table; incentives for the production of renew- eligible rollover distribution (as defined in as follows: able energy and energy conservation; section 402(c)(4) of such Code) and as having On page 571, beginning at line 20, strike which was ordered to lie on the table; transferred the amount to the eligible retire- through line 23 and insert the following: as follows: ment plan in a direct trustee to trustee ‘‘(g) APPLICATION OF SECTION.—This section On page 588, between lines 14 and 15, insert transfer within 60 days of the distribution. shall only apply to a principal residence pur- the following: (3) TREATMENT OF REPAYMENTS FOR DIS- chased by the taxpayer during the period be- TRIBUTIONS FROM IRAS.—For purposes of such SEC. ll. PENALTY-FREE WITHDRAWALS FROM Code, if a contribution is made pursuant to ginning on the date of the enactment of this RETIREMENT PLANS FOR FORE- Act and ending on the date that is 1 year CLOSURE RECOVERY RELIEF FOR paragraph (1) with respect to a qualified fore- after such date.’’. INDIVIDUALS WITH MORTGAGES ON closure recovery distribution from an indi- THEIR PRINCIPAL RESIDENCES. vidual retirement plan (as defined by section SA 5002. Mr. CRAPO (for himself and (a) IN GENERAL.—Section 72(t) of the Inter- 7701(a)(37) of such Code), then, to the extent Mr. ENZI) submitted an amendment in- nal Revenue Code of 1986 shall not apply to of the amount of the contribution, the quali- tended to be proposed by him to the any qualified foreclosure recovery distribu- fied foreclosure recovery distribution shall bill H.R. 3221, moving the United tion. be treated as a distribution described in sec- tion 408(d)(3) of such Code and as having been States toward greater energy independ- (b) LIMITATIONS.— (1) IN GENERAL.—For purposes of this sec- transferred to the eligible retirement plan in ence and security, developing innova- tion, in the case of an individual who is an a direct trustee to trustee transfer within 60 tive new technologies, reducing carbon eligible taxpayer, the aggregate amount of days of the distribution. emissions, creating green jobs, pro- distributions received by the individual (4) APPLICATION TO ELIGIBLE RETIREMENT tecting consumers, increasing clean re- which may be treated as qualified fore- PLANS.— newable energy production, and mod- closure recovery distributions for any tax- (A) IN GENERAL.—Nothing in this section ernizing our energy infrastructure, and able year shall not exceed the lesser of— shall be treated as requiring an eligible re- to amend the Internal Revenue Code of (A) the individual’s qualified mortgage ex- tirement plan to accept any contributions described in this subsection. 1986 to provide tax incentives for the penditures for the taxable year, or (B) the excess (if any) of— (B) QUALIFICATION.—An eligible retirement production of renewable energy and en- (i) $25,000, over plan shall not be treated as violating any re- ergy conservation; which was ordered (ii) the aggregate amounts treated as quirement of Federal law solely by reason of to lie on the table; as follows: qualified foreclosure recovery distributions the acceptance of contributions described in On page 393, line 19, strike received by such individual for all prior tax- this subparagraph. ‘‘$300,000,000,000’’ and insert ‘‘$68,000,000,000’’ able years. (d) DEFINITIONS.—For purposes of this sec- (2) ELIGIBLE TAXPAYER.—The term ‘‘eligible tion— SA 5003. Mr. CRAPO submitted an taxpayer’’ means, with respect to any tax- (1) QUALIFIED FORECLOSURE RECOVERY DIS- amendment intended to be proposed by able year, a taxpayer— TRIBUTION.—The term ‘‘qualified foreclosure him to the bill H.R. 3221, moving the (A) with adjusted gross income for the tax- recovery distribution’’ means any distribu- United States toward greater energy able year not in excess of $55,000 ($110,000 in tion to an individual from an eligible retire- independence and security, developing the case of a joint return under section 6013), ment plan which is made— and (A) on or after the date of the enactment of innovative new technologies, reducing (B) who provides certification to the Sec- this Act and before January 1, 2010, and carbon emissions, creating green jobs, retary of participation in any government or (B) during a taxable year during which the protecting consumers, increasing clean mortgage industry-sponsored refinancing individual has qualifying mortgage expendi- renewable energy production, and mod- plan during such taxable year. tures. ernizing our energy infrastructure, and (3) TREATMENT OF PLAN DISTRIBUTIONS.— (2) QUALIFYING MORTGAGE EXPENDITURES.— to amend the Internal Revenue Code of (A) IN GENERAL.—If a distribution to an in- (A) IN GENERAL.—The term ‘‘qualifying 1986 to provide tax incentives for the dividual would (without regard to paragraph mortgage expenditures’’ means any of the production of renewable energy and en- (1) or (2)) be a qualified foreclosure recovery following expenditures: distribution, a plan shall not be treated as (i) Payment of principal or interest on an ergy conservation; which was ordered violating any requirement of the Internal applicable mortgage. to lie on the table; as follows: Revenue Code of 1986 merely because the (ii) Payment of costs paid or incurred in On page 471, strike lines 19 through 24, and plan treats such distribution as a qualified refinancing, or modifying the terms of, an insert the following: foreclosure recovery distribution, unless the applicable mortgage. (5) in subsection (g)— aggregate amount of such distributions from (B) APPLICABLE MORTGAGE.—The term ‘‘ap- (A) by striking the first sentence; and all plans maintained by the employer (and plicable mortgage’’ means a mortgage (B) by striking ‘‘established under section any member of any controlled group which which— 203(b)(2)’’ and all that follows through ‘‘lo- includes the employer) to such individual ex- (i) was entered into after December 31, cated’’ and inserting ‘‘limitation established ceeds $25,000. 2002, and before the date of the enactment of under section 305(a)(2) of the Federal Home (B) CONTROLLED GROUP.—For purposes of this Act, and Loan Mortgage Corporation Act for a 1-fam- subparagraph (A), the term ‘‘controlled (ii) constitutes a security interest in the ily residence’’; group’’ means any group treated as a single principal residence of the mortgagor.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00141 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5912 CONGRESSIONAL RECORD — SENATE June 19, 2008 (C) JOINT FILERS.—In the case of married plan or contract amendment not required by amendment SA 4983 proposed by Mr. individuals filing a joint return under sec- such legislative or regulatory amendment, REID (for Mr. DODD (for himself and Mr. tion 6013 of the Internal Revenue Code of any later effective date specified by the SHELBY)) to the bill H.R. 3221, moving 1986, the qualifying mortgage expenditures of plan), and the United States toward greater en- the taxpayer may be allocated between the (II) ending on the date described in sub- ergy independence and security, devel- spouses in such manner as they elect. paragraph (A)(ii) (or, if earlier, the date the (3) ELIGIBLE RETIREMENT PLAN.—The term plan or contract amendment is adopted), oping innovative new technologies, re- ducing carbon emissions, creating ‘‘eligible retirement plan’’ shall have the the plan or contract is operated as if such meaning given such term by section plan or contract amendment were in effect; green jobs, protecting consumers, in- 402(c)(8)(B) of such Code. and creasing clean renewable energy pro- (4) PRINCIPAL RESIDENCE.—The term ‘‘prin- (ii) such plan or contract amendment ap- duction, and modernizing our energy cipal residence’’ has the same meaning as plies retroactively for such period. infrastructure, and to amend the Inter- when used in section 121 of such Code. nal Revenue Code of 1986 to provide tax (e) INCOME INCLUSION SPREAD OVER 2-YEAR SA 5005. Mr. ISAKSON (for himself incentives for the production of renew- PERIOD FOR QUALIFIED FORECLOSURE RECOV- and Mr. CORKER) submitted an amend- able energy and energy conservation; ERY DISTRIBUTIONS.— ment intended to be proposed to which was ordered to lie on the table; (1) IN GENERAL.—In the case of any quali- amendment SA 4983 proposed by Mr. fied foreclosure recovery distribution, unless as follows: REID (for Mr. DODD (for himself and Mr. the taxpayer elects not to have this sub- At the end of subtitle B of title I of divi- section apply for any taxable year, any SHELBY)) to the bill H.R. 3221, moving sion C, insert the following: amount required to be included in gross in- the United States toward greater en- SEC. 3013. DEDUCTION FOR POINTS ON HOME come for such taxable year shall be so in- ergy independence and security, devel- MORTGAGE REFINANCING ALLOWED cluded ratably over the 2-taxable year period oping innovative new technologies, re- IN YEAR PAID. beginning with such taxable year. ducing carbon emissions, creating (a) DEDUCTION.— (1) IN GENERAL.—Paragraph (2) of section (2) SPECIAL RULE.—For purposes of para- green jobs, protecting consumers, in- graph (1), rules similar to the rules of sub- 461(g) (relating to prepaid interest) is amend- creasing clean renewable energy pro- ed— paragraph (E) of section 408A(d)(3) of the In- duction, and modernizing our energy ternal Revenue Code of 1986 shall apply. (A) by striking ‘‘This subsection’’ and in- infrastructure, and to amend the Inter- serting the following: (f) SPECIAL RULES.— nal Revenue Code of 1986 to provide tax ‘‘(A) IN GENERAL.—This subsection’’, and (1) EXEMPTION OF DISTRIBUTIONS FROM incentives for the production of renew- (B) by adding at the end the following new TRUSTEE TO TRUSTEE TRANSFER AND WITH- subparagraph: HOLDING RULES.—For purposes of sections able energy and energy conservation; 401(a)(31), 402(f), and 3405 of the Internal Rev- which was ordered to lie on the table; ‘‘(B) EXCEPTION FOR CERTAIN REFINANC- enue Code of 1986, qualified foreclosure re- as follows: INGS.— ‘‘(i) IN GENERAL.—This subsection shall not covery distributions shall not be treated as On page 571, beginning at line 20, strike apply to points paid— eligible rollover distributions. through line 23 and insert the following: ‘‘(I) in respect of indebtedness secured by (2) QUALIFIED FORECLOSURE RECOVERY DIS- ‘‘(g) APPLICATION OF SECTION.—This section such residence resulting from the refi- TRIBUTIONS TREATED AS MEETING PLAN DIS- shall only apply to a principal residence pur- nancing of indebtedness meeting the require- TRIBUTION REQUIREMENTS.—For purposes of chased by the taxpayer during the period be- such Code, a qualified foreclosure recovery ginning on the date of the enactment of this ments of the subparagraph (A), and distribution shall be treated as meeting the Act and ending on the date that is 1 year ‘‘(II) before January 1, 2011. requirements of sections 401(k)(2)(B)(i), after such date.’’. ‘‘(ii) LIMITATION.—Clause (i) shall apply 403(b)(7)(A)(ii), 403(b)(11), and 457(d)(1)(A) of only to the extent the amount of the indebt- such Code. SA 5006. Mr. VITTER (for himself edness resulting from such refinancing does not exceed the sum of— (3) SUBSTANTIALLY EQUAL PERIODIC PAY- and Ms. LANDRIEU) submitted an ‘‘(I) the amount of the refinanced indebted- MENTS.—A qualified foreclosure recovery dis- amendment intended to be proposed by tribution— him to the bill H.R. 3221, moving the ness, plus ‘‘(II) the lesser of $10,000 or the points paid (A) shall be disregarded in determining United States toward greater energy whether a payment is a part of a series of in respect of the indebtedness resulting from independence and security, developing the refinancing to the extent that the in- substantially equal periodic payments under innovative new technologies, reducing section 72(t)(2)(A)(iv) of such Code, and debtedness resulting from the refinancing (B) shall not constitute a change in sub- carbon emissions, creating green jobs, does not exceed the refinanced indebtedness. stantially equal periodic payments under protecting consumers, increasing clean ‘‘(iii) ADJUSTMENT FOR INFLATION.—In the section 72(t)(4) of such Code. renewable energy production, and mod- case of any calendar year beginning after 2008, the $10,000 amount under clause (ii)(II) (g) PROVISIONS RELATING TO PLAN AMEND- ernizing our energy infrastructure, and shall be increased by an amount equal to— MENTS.— to amend the Internal Revenue Code of ‘‘(I) such dollar amount, multiplied by (1) IN GENERAL.—If this subsection applies 1986 to provide tax incentives for the ‘‘(II) the cost-of-living adjustment deter- to any amendment to any plan or annuity production of renewable energy and en- contract, such plan or contract shall be mined under section 1(f)(3) for the calendar ergy conservation; which was ordered year in which the taxable year begins, deter- treated as being operated in accordance with to lie on the table; as follows: the terms of the plan during the period de- mined by substituting ‘calendar year 2007’ scribed in paragraph (2)(B)(i). At the appropriate place, insert the fol- for ‘calendar year 1992’ in subparagraph (B) lowing: thereof. (2) AMENDMENTS TO WHICH SUBSECTION AP- ll PLIES.— SEC. . LIMIT ON CREDIT DELIVERY AND AD- If any amount as adjusted under the pre- VERSE MARKET FEES. (A) IN GENERAL.—This subsection shall ceding sentence is not a multiple of $100, (a) IN GENERAL.—During the 1-year period apply to any amendment to any plan or an- such amount shall be rounded to the next beginning on the date of enactment of this nuity contract which is made— nearest multiple of $100.’’. Act, the enterprises may not engage in the (i) pursuant to the provisions of this sec- (2) CONFORMING AMENDMENT.—The heading practice of charging or otherwise collecting tion, or pursuant to any regulation issued by of paragraph (2) of section 461(g) is amended adverse credit delivery or adverse market the Secretary of the Treasury or the Sec- by striking ‘‘EXCEPTION’’ and inserting ‘‘EX- fees, based on a borrower’s credit score, for CEPTIONS’’. retary of Labor under this section, and any mortgage purchased, otherwise guaran- (ii) on or before the last day of the first (3) EFFECTIVE DATE.—The amendments teed, or securitized by an enterprise in any made by this subsection shall apply to plan year beginning on or after January 1, State that has experienced an average fore- amounts paid in taxable years beginning 2010, or such later date as the Secretary of closure rate that is lower than the national after December 31, 2007. the Treasury may prescribe. average. (b) OFFSET.—There is hereby rescinded 100 In the case of a governmental plan (as de- (b) DEFINITIONS.—As used in this section— percent of budget authority provided for the fined in section 414(d) of the Internal Rev- (1) the term ‘‘adverse credit delivery fee’’ appropriations in titles III and IV of division enue Code of 1986), clause (ii) shall be applied means a post-settlement fee that is contin- B. by substituting the date which is 2 years gent upon a purchaser’s credit score and after the date otherwise applied under clause loan-to-value ratio; and SA 5008. Mr. CHAMBLISS (for him- (ii). (2) the term ‘‘adverse market fees’’ means self and Mr. CORKER) submitted an (B) CONDITIONS.—This subsection shall not a post-settlement fee that is contingent upon amendment intended to be proposed by apply to any amendment unless— the condition of the real estate market in a (i) during the period— particular county, parish, or State. him to the bill H.R. 3221, moving the (I) beginning on the date the legislative or United States toward greater energy regulatory amendment described in subpara- SA 5007. Mr. BUNNING submitted an independence and security, developing graph (A)(i) takes effect (or in the case of a amendment intended to be proposed to innovative new technologies, reducing

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00142 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5913 carbon emissions, creating green jobs, him to the bill H.R. 3221, moving the cept that the property shall be restricted for protecting consumers, increasing clean United States toward greater energy occupancy, until the original maturity date renewable energy production, and mod- independence and security, developing of the prepaid mortgage loan, only by fami- ernizing our energy infrastructure, and innovative new technologies, reducing lies with incomes not exceeding 80 percent of the adjusted median income for the area in to amend the Internal Revenue Code of carbon emissions, creating green jobs, which the property is located, as published 1986 to provide tax incentives for the protecting consumers, increasing clean by the Secretary. production of renewable energy and en- renewable energy production, and mod- Amounts for the enhanced vouchers pursu- ergy conservation; which was ordered ernizing our energy infrastructure, and ant to this section shall be provided under to lie on the table; as follows: to amend the Internal Revenue Code of amounts appropriated for tenant-based rent- On page 407, strike lines 17 through 25, and 1986 to provide tax incentives for the al assistance otherwise authorized under sec- insert the following: production of renewable energy and en- tion 8(t) of the United States Housing Act of (B) OTHER DEFINITIONS RELATING TO LOAN ergy conservation; which was ordered 1937. ORIGINATOR.—For purposes of this section, an to lie on the table; as follows: individual shall be considered to be an em- SA 5013. Mr. TESTER (for himself ployee of a depository institution or a major- Insert the following at the appropriate and Mr. ENZI) submitted an amend- ity-owned depository institution, regardless place: ment intended to be proposed to of how his or her compensation is reported, SEC. . PROHIBITION OF SELLER-FUNDED DOWN- amendment SA 4983 proposed by Mr. if the— PAYMENT ASSISTANCE. REID (for Mr. DODD (for himself and Mr. (i) individual acts as a loan originator only (a) IN GENERAL.—Paragraph (9) of section SHELBY)) to the bill H.R. 3221, moving for that institution; 203(b) of the National Housing Act (12 U.S.C. (ii) institution takes supervisory and fi- 1709(b)(9)) is amended by adding at the end the United States toward greater en- nancial responsibility for the individual’s the following: ‘‘In no case shall the funds re- ergy independence and security, devel- regulated activities on behalf of the institu- quired by this paragraph consist, in whole or oping innovative new technologies, re- tion; and in part, of funds provided by any of the fol- ducing carbon emissions, creating (iii) individual’s activities are subject to lowing parties before, during, or after closing green jobs, protecting consumers, in- oversight and regulation by a Federal bank- of the property sale: (A) the seller or any creasing clean renewable energy pro- ing agency. other person or entity that financially bene- fits from the transaction; or (B) any third duction, and modernizing our energy SA 5009. Mr. CRAPO submitted an party or entity that is reimbursed, directly infrastructure, and to amend the Inter- amendment intended to be proposed to or indirectly by any of the parties described nal Revenue Code of 1986 to provide tax amendment SA 4983 proposed by Mr. in subparagraph (A) of this paragraph.’’; incentives for the production of renew- REID (for Mr. DODD (for himself and Mr. (b) SANCTIONS.—Section 1014 of title 18, able energy and energy conservation; United States Code, is amended in the first SHELBY)) to the bill H.R. 3221, moving which was ordered to lie on the table; sentence—(1) by inserting ‘‘the Federal as follows: the United States toward greater en- Housing Administration,’’ before ‘‘the Farm At the appropriate place in title II of Divi- ergy independence and security, devel- Credit Administration’’; and sion A, insert the following: oping innovative new technologies, re- (2) by striking ‘‘commitment, or loan’’ and ducing carbon emissions, creating inserting ‘‘commitment, loan, insurance SEC. 12l. INVESTMENT AUTHORITY TO SUPPORT RURAL INFRASTRUCTURE. agreement or application for insurance or a green jobs, protecting consumers, in- Section 11 of the Federal Home Loan Bank guarantee’’. creasing clean renewable energy pro- Act (12 U.S.C. 1431) is amended by adding at duction, and modernizing our energy the end the following: Mr. KERRY (for Mr. KEN- infrastructure, and to amend the Inter- SA 5012. ‘‘(l) MISSION INVESTMENTS FOR RURAL IN- nal Revenue Code of 1986 to provide tax NEDY (for himself and Mr. KERRY)) sub- FRASTRUCTURE.—In furtherance of its mis- incentives for the production of renew- mitted an amendment intended to be sion under section 5, each Federal Home able energy and energy conservation; proposed by Mr. KERRY to the bill H.R. Loan Bank is authorized to purchase invest- which was ordered to lie on the table; 3221, moving the United States toward ment grade securities from nonmember coop- as follows: greater energy independence and secu- erative lenders that have received financing from the Federal Financing Bank and that Beginning on page 623, line 5, strike rity, developing innovative new tech- nologies, reducing carbon emissions, possess demonstrated experience in making through line 12 and insert the following: loans to rural cooperatives. Such securities EFFECTIVE DATE.— creating green jobs, protecting con- shall be secured investments collateralized (1) IN GENERAL.—Except as otherwise pro- sumers, increasing clean renewable en- by loans of the cooperative lender. The pur- vided in this subsection, the amendments ergy production, and modernizing our chase of such securities shall be at the sole made by this section shall apply to returns energy infrastructure, and to amend discretion of the Bank, consistent with such for calendar years beginning after December the Internal Revenue Code of 1986 to regulations, restrictions, and limitations as 31, 2011. provide tax incentives for the produc- may be prescribed by the Board.’’. (2) APPLICATION OF BACKUP WITHHOLDING.— tion of renewable energy and energy The amendment made by subsection (c) shall SA 5014. Mr. DODD (for Mr. INOUYE conservation; which was ordered to lie apply to amounts paid after December 31, (for himself and Mr. STEVENS)) pro- on the table; as follows: 2012. posed an amendment to the bill S. 2607, At the appropriate place, insert the fol- to make a technical correction to sec- SA 5010. Mr. CRAPO submitted an lowing: tion 3009 of the Deficit Reduction Act amendment intended to be proposed to SEC. llll. ELIGIBILITY OF CERTAIN amendment SA 4983 proposed by Mr. PROJECTS FOR ENHANCED VOUCH- of 2005; as follows: REID (for Mr. DODD (for himself and Mr. ER ASSISTANCE. Strike out all after the enacting clause and SHELBY)) to the bill H.R. 3221, moving Notwithstanding any other provision of insert the following: the United States toward greater en- law— SECTION 1. SHORT TITLE. ergy independence and security, devel- (1) the property known as The Heritage This Act may be cited as the ‘‘DTV Transi- oping innovative new technologies, re- Apartments (FHA No. 023-44804), in Malden, tion Assistance Act’’. Massachusetts, shall be considered eligible ducing carbon emissions, creating SEC. 2. DTV TRANSITION. low-income housing for purposes of the eligi- (a) IN GENERAL.—Section 3008(a) of the Dig- green jobs, protecting consumers, in- bility of residents of the property for en- ital Television Transition and Public Safety creasing clean renewable energy pro- hanced voucher assistance under section 8(t) Act of 2005 is amended— duction, and modernizing our energy of the United States Housing Act of 1937 (42 (1) by inserting ‘‘(1) IN GENERAL.—’’ before infrastructure, and to amend the Inter- U.S.C. 1437f(t)), pursuant to paragraph (2)(A) ‘‘The Assistant Secretary’’; and nal Revenue Code of 1986 to provide tax of section 223(f) of the Low-Income Housing (2) by adding at the end thereof the fol- incentives for the production of renew- Preservation and Resident Homeownership lowing: able energy and energy conservation; Act of 1990 (12 U.S.C. 4113(f)(2)(A)); ‘‘(2) USE OF FUNDS.—As soon as practicable which was ordered to lie on the table; (2) such residents shall receive enhanced after the date of enactment of the DTV rental housing vouchers upon the prepay- Transition Assistance Act, the Assistant as follows: ment of the mortgage loan for the property Secretary shall make a determination, Beginning on page 615, line 4, strike under section 236 of the National Housing which the Assistant Secretary may adjust through page 623, line 12. Act (12 U.S.C. 1715z–1); and from time to time, with respect to whether (3) the Secretary shall approve such pre- the full amount provided under paragraph (1) SA 5011. Mr. BOND submitted an payment and subsequent transfer of the will be needed for payments under that para- amendment intended to be proposed by property without any further condition, ex- graph. If the Assistant Secretary determines

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00143 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5914 CONGRESSIONAL RECORD — SENATE June 19, 2008 that the full amount will not be needed for able energy and energy conservation; ‘‘(a) ALLOWANCE OF CREDIT.—There shall be payments authorized by paragraph (1), the which was ordered to lie on the table; allowed as a credit against the tax imposed Assistant Secretary may use the remaining as follows: by this subtitle for such taxable year an amount for consumer education and tech- amount equal to 10 percent of the purchase At the appropriate place, insert the fol- nical assistance regarding the digital tele- price of a residence— lowing: vision transition and the availability of the ‘‘(1) in the case of an individual who is a digital-to-analog converter box program (in SEC. lll. CASE MANAGEMENT AND HOUSING first-time homebuyer of a principal residence addition to any amounts expended for such TRANSITION FUNDING. in the United States during a taxable year, (a) AVAILABILITY OF AMOUNTS.—There are purpose under 3005(c)(2)(A) of this title), in- or appropriated out of any money in the Treas- cluding partnering with, providing grants to, ‘‘(2) in the case of an individual who— ury not otherwise appropriated for the fiscal and contracting with non-profit organiza- ‘‘(A) is a homebuyer of a principal resi- year 2008, to the State of Louisiana, tions or public interest groups in achieving dence in the United States that is damaged $5,000,000, to be used by the State for case these efforts. If the Assistant Secretary ini- or destroyed as a result of a natural disaster management and housing transition services tiates such an education program, the As- and that has been sold or transferred to a for families in areas impacted by Hurricanes sistant Secretary shall develop a plan to ad- State or an agency or political subdivision Katrina and Rita of 2005. dress the educational and technical assist- thereof as a result of such damage or de- (b) GAO STUDY AND REPORT.— ance needs of vulnerable populations, such as struction, and (1) IN GENERAL.—Upon the expiration of the senior citizens, individuals residing in rural ‘‘(B) submits a certification by the State 2-year period beginning on the date of the and remote areas, and minorities, including, or by the appropriate agency or subdivision enactment of this Act, the Comptroller Gen- where appropriate, education plans focusing thereof that such residence meets the re- eral of the United States shall conduct a on the need for analog pass-through digital quirements of subparagraph (A).’’. study of the program carried out under this converter boxes in areas served by low power section to determine the effectiveness and or translator stations, and shall consider the SA 5019. Mr. INHOFE submitted an limitations of, and potential improvements speed with which these objectives can be ac- amendment intended to be proposed to for, such program. complished to the greatest public benefit.’’. amendment SA 4983 proposed by Mr. (2) TIMING OF REPORT.—Not later than 180 (b) FISCAL YEARS TO WHICH APPLICABLE.— REID (for Mr. DODD (for himself and Mr. Section 3009(a) of the Deficit Reduction Act days after the expiration of the 2-year period described in paragraph (1), the Comptroller SHELBY)) to the bill H.R. 3221, moving of 2005 (Public Law 109–171) is amended— the United States toward greater en- (1) by striking ‘‘fiscal year 2009’’ and in- General of the United States shall submit a report to the Committee on Banking, Hous- ergy independence and security, devel- serting ‘‘fiscal years 2009 through 2012’’; and oping innovative new technologies, re- (2) by striking ‘‘no earlier than October 1, ing, and Urban Affairs and the Committee on 2010’’ and inserting ‘‘on or after February 18, Homeland Security and Governmental Af- ducing carbon emissions, creating 2009’’. fairs of the Senate, and the Committee on green jobs, protecting consumers, in- Financial Services and the Committee on creasing clean renewable energy pro- SA 5015. Mr. DODD (for himself and Transportation and Infrastructure of the duction, and modernizing our energy House of Representatives regarding the re- Mr. SHELBY) proposed an amendment infrastructure, and to amend the Inter- sults of the study. to the bill S. 2159, to require the Sec- nal Revenue Code of 1986 to provide tax (3) REQUIRED CONTENT.—The report re- retary of the Treasury to mint coins in quired under paragraph (2) shall include a fo- incentives for the production of renew- commemoration of the 50th anniver- rensic audit that examines the effectiveness able energy and energy conservation; sary of the establishment of the Na- of internal controls to prevent waste, fraud, which was ordered to lie on the table; tional Aeronautics and Space Adminis- and abuse within the program. as follows: tration; as follows: On page 385, between lines 8 and 9, insert On page 16, strike lines 8 through 11 and in- SA 5017. Ms. LANDRIEU submitted the following: sert the following: an amendment intended to be proposed ‘‘(12) LIMITATION BASED ON ADJUSTED GROSS ‘‘(c) PERIOD FOR ISSUANCE.—Notwith- by her to the bill H.R. 3221, moving the INCOME.— standing any other provision of law, includ- United States toward greater energy ‘‘(A) IN GENERAL.—A mortgagor shall not ing section 7(d), the Secretary— independence and security, developing be eligible for insurance under this section, ‘‘(1) may accept orders for the coins au- innovative new technologies, reducing if the adjusted gross income reported by the mortgagor exceeds $75,000 or in the case of thorized under this Act during the period be- carbon emissions, creating green jobs, ginning on January 1, 2008 and ending on De- mortgagors filing jointly $150,000. cember 31, 2008; and protecting consumers, increasing clean ‘‘(B) DEFINITION.—For purposes of this ‘‘(2) may mint and issue such coins re- renewable energy production, and mod- paragraph, the term ‘adjusted gross income’ quired to fulfill such orders during the period ernizing our energy infrastructure, and has the same meaning given that term in beginning on January 1, 2008 and ending on to amend the Internal Revenue Code of section 62 of the Internal Revenue Code of December 31, 2009. 1986 to provide tax incentives for the 1986.’’. ‘‘(d) EXCEPTION TO PROGRAM LIMITATION.— production of renewable energy and en- f Notwithstanding any other provision of law, ergy conservation; which was ordered AUTHORITY FOR COMMITTEES TO the minting or issuance of coins under this to lie on the table; as follows: Act in 2009 does not— MEET ‘‘(1) preclude the Secretary from including On page 588, strike lines 9 through 12, and insert: COMMITTEE ON COMMERCE, SCIENCE, AND a surcharge on the issuance of any other TRANSPORTATION commemorative coin minted or issued in (1) by striking ‘‘2 years’’ and inserting ‘‘5 years’’, Mr. DODD. Mr. President, I ask unan- 2009; and imous consent that the Committee on ‘‘(2) be counted against the annual 2 com- (2) by striking ‘‘December 31, 1996’’ and in- memorative coin program minting and serting ‘‘August 1, 2005’’, and Commerce, Science, and Transpor- issuance limitation under section 5112(m)(1) (3) by striking ‘‘January 1, 1999’’ and in- tation be authorized to meet during of title 31, United States Code. serting ‘‘January 1, 2010’’. the session of the Senate on Thursday, ‘‘(e) ISSUANCE OF GOLD COINS.—Each gold June 19, 2008, at 10 a.m., in room 253 of coin’’. SA 5018. Ms. LANDRIEU submitted the Russell Senate Office Building. an amendment intended to be proposed The PRESIDING OFFICER. Without SA 5016. Ms. LANDRIEU submitted by her to the bill H.R. 3221, moving the objection, it is so ordered. an amendment intended to be proposed United States toward greater energy COMMITTEE ON HEALTH, EDUCATION, LABOR, to amendment SA 4983 proposed by Mr. independence and security, developing AND PENSIONS REID (for Mr. DODD (for himself and Mr. innovative new technologies, reducing Mr. DODD. Mr. President, I ask unan- SHELBY)) to the bill H.R. 3221, moving carbon emissions, creating green jobs, imous consent that the Committee on the United States toward greater en- protecting consumers, increasing clean Health, Education, Labor, and Pen- ergy independence and security, devel- renewable energy production, and mod- sions be authorized to meet, during the oping innovative new technologies, re- ernizing our energy infrastructure, and session of the Senate, to conduct a ducing carbon emissions, creating to amend the Internal Revenue Code of hearing entitled ‘‘Two Years after the green jobs, protecting consumers, in- 1986 to provide tax incentives for the MINER Act: How Safe is Mining creasing clean renewable energy pro- production of renewable energy and en- Today?’’ on Thursday, June 19, 2008, at duction, and modernizing our energy ergy conservation; which was ordered l0 a.m. in room 430 of the Dirksen Sen- infrastructure, and to amend the Inter- to lie on the table; as follows: ate Office Building. nal Revenue Code of 1986 to provide tax On page 27, strike lines 4 through 9, and in- The PRESIDING OFFICER. Without incentives for the production of renew- sert the following: objection, it is so ordered.

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00144 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5915 COMMITTEE ON INDIAN AFFAIRS The assistant legislative clerk read REQUIRING THE SECRETARY OF Mr. DODD. Mr. President, I ask unan- as follows: THE TREASURY TO MINT COINS imous consent that the Committee on A bill (S. 2607) to make technical correc- Mr. DODD. Mr. President, I ask unan- Indian Affairs be authorized to meet tions to section 3009 of the Deficit Reduction imous consent that the Banking Com- during the session of the Senate on Act of 2005. mittee be discharged from further con- Thursday, June 19, at 9:30 a.m. in room There being no objection, the Senate sideration of S. 2159 and the Senate 562 of the Dirksen Senate Office Build- proceeded to consider the bill. proceed to its immediate consider- ing. Mr. DODD. I ask unanimous consent The PRESIDING OFFICER. Without ation. that an Inouye substitute amendment objection, it is so ordered. The PRESIDING OFFICER. Without which is at the desk be agreed to, the objection, it is so ordered. COMMITTEE ON FOREIGN RELATIONS bill as amended be read a third time Mr. DODD. Mr. President, I ask unan- The clerk will report the bill by title. and passed, the motions to reconsider imous consent that the Committee on The assistant legislative clerk read be laid upon the table, with no inter- Foreign Relations be authorized to as follows: vening action or debate, and that any meet during the session of the Senate statements relating to the bill be A bill (S. 2159) to require the Secretary of on Thursday, June 19, 2008, at 2:15 p.m. the Treasury to mint coins in commemora- The PRESIDING OFFICER. Without printed in the RECORD. tion of the 50th anniversary of the establish- objection, it is so ordered. The PRESIDING OFFICER. Without ment of the National Aeronautics and Space SECURITIES, INSURANCE, AND INVESTMENT objection, it is so ordered. Administration. SUBCOMMITTEE The amendment (No. 5014) was agreed There being no objection, the Senate Mr. DODD. Mr. President, I ask unan- to, as follows: proceeded to consider the bill. imous consent that the Committee on AMENDMENT NO. 5014 Mr. DODD. I ask unanimous consent Banking, Housing, and Urban Affairs (Purpose: To provide for additional consumer that a Dodd-Shelby amendment which Securities, Insurance, and Investment outreach and education concerning the dig- is at the desk be agreed to, the bill, as Subcommittee be authorized to meet ital television transition, and for other amended, be read a third time, passed, during the session of the Senate on purposes.) the motion to reconsider be laid upon June 19, 2008, at 2:30 p.m. Strike out all after the enacting clause and the table, and any statements relating insert the following: The PRESIDING OFFICER. Without to the bill be printed in the RECORD. objection, it is so ordered. SECTION 1. SHORT TITLE. THE PRESIDING OFFICER. Without SELECT COMMITTEE ON INTELLIGENCE This Act may be cited as the ‘‘DTV Transi- objection, it is so ordered. Mr. DODD. Mr. President, I ask unan- tion Assistance Act’’. The amendment (No. 5015) was agreed imous consent that the Select Com- SEC. 2. DTV TRANSITION. to, as follows: mittee on Intelligence be authorized to (a) IN GENERAL.—Section 3008(a) of the Dig- meet during the session of the Senate ital Television Transition and Public Safety (Purpose: To extend the period during which on June 19, 2008, at 2:30 p.m. Act of 2005 is amended— the coins may be minted and issued) The PRESIDING OFFICER. Without (1) by inserting ‘‘(1) IN GENERAL.—’’ before On page 16, strike lines 8 through 11 and in- objection, it is so ordered. ‘‘The Assistant Secretary’’; and sert the following: (2) by adding at the end thereof the fol- SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT ‘‘(c) PERIOD FOR ISSUANCE.—Notwith- lowing: MANAGEMENT, THE FEDERAL WORKFORCE, standing any other provision of law, includ- ‘‘(2) USE OF FUNDS.—As soon as practicable AND THE DISTRICT OF COLUMBIA ing section 7(d), the Secretary— after the date of enactment of the DTV ‘‘(1) may accept orders for the coins au- Mr. DODD. Mr. President, I ask unan- Transition Assistance Act, the Assistant imous consent that the Committee on thorized under this Act during the period be- Secretary shall make a determination, ginning on January 1, 2008 and ending on De- Homeland Security and Governmental which the Assistant Secretary may adjust cember 31, 2008; and Affairs’ Subcommittee on Oversight of from time to time, with respect to whether ‘‘(2) may mint and issue such coins re- Government Management, the Federal the full amount provided under paragraph (1) quired to fulfill such orders during the period Workforce, and the District of Colum- will be needed for payments under that para- beginning on January 1, 2008 and ending on bia be authorized to meet during the graph. If the Assistant Secretary determines December 31, 2009. session of the Senate on Thursday, that the full amount will not be needed for ‘‘(d) EXCEPTION TO PROGRAM LIMITATION.— payments authorized by paragraph (1), the June 19, 2008, at 2 p.m. to conduct a Notwithstanding any other provision of law, Assistant Secretary may use the remaining the minting or issuance of coins under this hearing entitled, ‘‘Management Chal- amount for consumer education and tech- lenges Facing the Federal Protective Act in 2009 does not— nical assistance regarding the digital tele- ‘‘(1) preclude the Secretary from including Service: What is at Risk?’’ vision transition and the availability of the a surcharge on the issuance of any other The PRESIDING OFFICER. Without digital-to-analog converter box program (in commemorative coin minted or issued in objection, it is so ordered. addition to any amounts expended for such 2009; and f purpose under 3005(c)(2)(A) of this title), in- ‘‘(2) be counted against the annual 2 com- cluding partnering with, providing grants to, PRIVILEGES OF THE FLOOR memorative coin program minting and and contracting with non-profit organiza- issuance limitation under section 5112(m)(1) Mr. DODD. Mr. President, I ask unan- tions or public interest groups in achieving of title 31, United States Code. imous consent that three members of these efforts. If the Assistant Secretary ini- ‘‘(e) ISSUANCE OF GOLD COINS.—Each gold tiates such an education program, the As- my staff, Seth Olson, Charles von coin’’. Althann, and Eitan Goldstein, be sistant Secretary shall develop a plan to ad- The bill (S. 2159), as amended, was or- granted the privilege of the floor dur- dress the educational and technical assist- ance needs of vulnerable populations, such as dered to be engrossed for a third read- ing today’s session. senior citizens, individuals residing in rural The PRESIDING OFFICER. Without ing, was read the third time, and and remote areas, and minorities, including, passed, as follows: objection, it is so ordered. where appropriate, education plans focusing Mr. GRASSLEY. I ask unanimous on the need for analog pass-through digital S. 2159 consent that Tom Edwards, Jordan Au- converter boxes in areas served by low power Be it enacted by the Senate and House of Rep- gust, and Bobby Schena of my staff be or translator stations, and shall consider the resentatives of the United States of America in granted the privileges of the floor for speed with which these objectives can be ac- Congress assembled, the duration of the 110th Congress. complished to the greatest public benefit.’’. SECTION 1. SHORT TITLE. The PRESIDING OFFICER. Without (b) FISCAL YEARS TO WHICH APPLICABLE.— This Act may be cited as the ‘‘NASA 50th objection, it is so ordered. Section 3009(a) of the Deficit Reduction Act Anniversary Commemorative Coin Act’’. of 2005 (Public Law 109–171) is amended— f (1) by striking ‘‘fiscal year 2009’’ and in- SEC. 2. FINDINGS. THE DEFICIT REDUCTION TECH- serting ‘‘fiscal years 2009 through 2012’’; and The Congress finds that— NICAL CORRECTION ACT OF 2005 (2) by striking ‘‘no earlier than October 1, (1) the National Aeronautics and Space Ad- ministration began operation on October 1, Mr. DODD. Mr. President, I ask unan- 2010’’ and inserting ‘‘on or after February 18, 2009’’. 1958, with about 8,000 employees and an an- imous consent that the Senate proceed nual budget of $100,000,000; to the immediate consideration of Cal- The bill (S. 2607), as amended, was or- (2) over the next 50 years, the National endar No. 774, S. 2607. dered to be engrossed for a third read- Aeronautics and Space Administration has The PRESIDING OFFICER. The ing, was read the third time, and been involved in many defining events which clerk will report the bill by title. passed. have shaped the course of human history and

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00145 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5916 CONGRESSIONAL RECORD — SENATE June 19, 2008 demonstrated to the world the character of (7) on February 17, 1973, the Manned Space- ment, the solar system, and the universe the people of the United States; craft Center in Houston was renamed the through observations from space; (3) among the many firsts by the National Lyndon B. Johnson Space Center; (E) the Jet Propulsion Laboratory, the Aeronautics and Space Administration are (8) on December 21, 1968, Apollo 8 took off leading center for robotic exploration of the that— atop a Saturn V booster from the Kennedy Solar System; (A) on December 6, 1958, the United States Space Center for a historic mission to orbit (F) the Johnson Space Center, which man- launched Pioneer 3, the first United States the Moon; ages the development, testing, production, satellite to ascend to an altitude of 63,580 (9) as Apollo 8 traveled outward, the crew and delivery of all United States human miles; focused a portable television camera on spacecraft and all human spacecraft-related (B) on March 3, 1959, the United States sent Earth and for the first time humanity saw functions; Pioneer 4 to the Moon, successfully making its home from afar, a tiny, lovely, and fragile (G) the Kennedy Space Center, the gateway the first United States lunar flyby; ‘‘blue marble’’ hanging in the blackness of to the Universe and world leader in pre- (C) on April 1, 1960, the United States space; paring and launching missions around the launched TIROS 1, the first successful mete- (10) this transmission and viewing of Earth Earth and beyond; orological satellite, observing Earth’s weath- from a distance was an enormously signifi- (H) the Langley Research Center, which er; cant accomplishment and united the Nation continues to forge new frontiers in aviation (D) on May 5, 1961, Freedom 7, carrying As- at a time when American society was in cri- and space research for aerospace, atmos- tronaut Alan B. Shepard, Jr., was the first sis over Vietnam, race relations, urban prob- pheric sciences, and technology commer- lems, and a host of other difficulties; American space flight involving human cialization to improve the way the world (11) on July 20, 1969, Apollo 11 astronauts beings; lives; Neil A. Armstrong and Edwin E. Aldrin made (E) on February 20, 1962, John Glenn be- (I) the Marshall Space Flight Center, a the first lunar landing mission while Michael came the first American to circle the Earth, world leader in developing space transpor- Collins orbited overhead in the Apollo com- making 3 orbits in his Friendship 7 Mercury tation and propulsion systems that accel- mand module; spacecraft; erate exploration and scientific discovery, (12) Armstrong set foot on the surface of (F) on December 14, 1962, Mariner 2 became including the Michoud Assembly Facility, the Moon, telling the millions of listeners the first spacecraft to commit a successful which has been a world-class facility since that it was ‘‘one small step for a man, one 1961 for fabrication of large space structures, planetary flyby (Venus); giant leap for mankind’’, and Aldrin soon fol- (G) on April 6, 1965, the United States including the Saturn V and the Space Shut- lowed and planted an American flag, but tle External Tank, and which will have a launched Intelsat I (also known as Early omitted claiming the land for the United Bird 1), the first commercial satellite (com- critical role in the Constellation program, States, as had routinely been done during including manufacturing major pieces of the munications), into geostationary orbit; European exploration of the Americas; (H) on June 3 through 7, 1965, the second pi- Orion crew capsule, the Ares I upper stage, (13) the 2 Moon walkers left behind an and the Ares V core stage; and loted Gemini mission, Gemini IV, stayed American flag and a plaque bearing the in- aloft for 4 days, and astronaut Edward H. (J) the Stennis Space Center, which is re- scription: ‘‘Here Men From The Planet Earth sponsible for rocket propulsion testing and White II performed the first EVA or First Set Foot Upon the Moon. Jul. 1969 A.D. for partnering with industry to develop and ‘‘spacewalk’’ by an American; We Came in Peace for All Mankind.’’; implement remote sensing technology; (I) on June 2, 1966, Surveyor 1 became the (14) on April 24, 1990, the Hubble Space Tel- (18) the United States should pay tribute first American spacecraft to soft-land on the escope was launched into space aboard the to the National Aeronautics and Space Ad- Moon; STS–31 mission of the Space Shuttle Dis- ministration, and to its successful partner- (J) on May 31, 1971, the United States covery, and since then, the Hubble has revo- ships with the space and research centers, by launched Mariner 9, the first mission to orbit lutionized astronomy, while expanding our minting and issuing a commemorative silver another planet (Mars) beginning November knowledge of the universe and inspiring mil- dollar coin; and 13, 1971; lions of scientists, students, and members of (19) the surcharge proceeds from the sale of (K) on April 12, 1981, the National Aero- the public with its unprecedented deep and nautics and Space Administration launched clear images of space; a commemorative coin would generate valu- the Space Shuttle Columbia on the first (15) on July 4, 1997, the Mars Pathfinder able funding for the National Aeronautics flight of the Space Transportation System landed on Mars and on January 29, 1998, an and Space Administration Families Assist- (STS–1). International Space Station agreement ance Fund, for the purposes of providing (L) on June 18, 1983, the National Aero- among 15 countries met in Washington, DC, need-based financial assistance to the fami- nautics and Space Administration launched to sign agreements to establish the frame- lies of any National Aeronautics and Space Space Shuttle Challenger (STS–7) carrying 3 work for cooperation among the partners on Administration personnel who lose their mission specialists, including Sally K. Ride, the design, development, operation, and uti- lives as a result of injuries suffered in the the first woman astronaut; lization of the Space Station; performance of their official duties, and for (M) in another historic mission, 2 months (16) the National Aeronautics and Space other worthy and important purposes. later, the National Aeronautics and Space Administration’s stunning achievements SEC. 3. COIN SPECIFICATIONS. Administration launched STS–8 carrying the over the last 50 years have been won for all (a) DENOMINATIONS.—In commemoration of first black American astronaut, Guion S. mankind at great cost and sacrifice; in the the 50th anniversary of the establishment of Bluford; and quest to explore the universe, many National the National Aeronautics and Space Admin- (N) on July 23, 1999, the Space Shuttle Co- Aeronautics and Space Administration em- istration, the Secretary of the Treasury lumbia’s 26th flight was led by Air Force Col. ployees have lost their lives, including the (hereafter in this Act referred to as the ‘‘Sec- Eileen Collins, the first woman to command crews of Apollo 1, the Space Shuttle Chal- retary’’) shall mint and issue the following a Shuttle mission; lenger, and the Space Shuttle Columbia; coins: (4) on April 9, 1959, the National Aero- (17) the success of the United States space (1) $50 GOLD COINS.—Not more than 50,000 nautics and Space Administration unveiled exploration program in the 20th Century $50 gold coins, which shall— the Mercury astronaut corps, 7 men with augurs well for its continued leadership in (A) weigh 33.931 grams; ‘‘the right stuff’’: John H. Glenn, Jr., Walter the 21st Century, such leadership being at- (B) have a diameter of 32.7 millimeters; M. Schirra, Jr., Alan B. Shepard, Jr., M. tributable to the remarkable and indispen- and Scott Carpenter, L. Gordon Cooper, Virgil I. sable partnership between the National Aer- (C) contain 1 troy ounce of fine gold. ‘‘Gus’’ Grissom, and Donald K. ‘‘Deke’’ onautics and Space Administration and its 10 (2) $1 SILVER COINS.—Not more than 300,000 Slayton; space and research centers, including— $1 coins of each of the 9 designs specified in (5) on May 25, 1961, President John F. Ken- (A) from small spacecraft to supercom- section 4(a)(3)(B), which shall— nedy, reflecting the highest aspirations of puters, science missions and payloads to (A) weigh 26.73 grams; the American people, proclaimed: ‘‘I believe thermal protection systems, information (B) have a diameter of 1.500 inches; and this Nation should commit itself to achiev- technology to aerospace, the Ames Research (C) contain 90 percent silver and 10 percent ing the goal, before this decade is out, of Center in California’s Silicon Valley, which copper. landing a man on the Moon and returning provides products, technologies, and services (b) LEGAL TENDER.—The coins minted him safely to Earth. No single space project that enable NASA missions and expand under this Act shall be legal tender, as pro- in this period will be more impressive to human knowledge. vided in section 5103 of title 31, United States mankind, or more important in the long- (B) the Dryden Flight Research Center, the Code. range exploration of space; and none will be leading center for innovative flight research; (c) NUMISMATIC ITEMS.—For purposes of so difficult or expensive to accomplish.’’; (C) the Glenn Research Center, which de- section 5134 of title 31, United States Code, (6) on September 19, 1961, the National Aer- velops power, propulsion, and communica- all coins minted under this Act shall be con- onautics and Space Administration an- tion technologies for space flight systems sidered to be numismatic items. nounced that the National Aeronautics and and aeronautics research; (d) MINTAGE LEVEL LIMIT.—Notwith- Space Administration center dedicated to (D) the Goddard Space Flight Center, standing the mintage level limit described human space flight would be built in Hous- which specializes in research to expand under section 5112(m)(2)(A)(ii) of title 31, ton, Texas; knowledge on the Earth and its environ- United States Code, the Secretary may mint

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00146 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5917 and issue not more than 300,000 of each of the noted sculptors and medallic artists as (2) A surcharge of $10 per coin for the $1 9 $1 coins authorized to be minted under this James Earle Fraser, Augustus Saint- coin. Act. Gaudens, Victor David Brenner, Adolph A. (3) A surcharge of $1 per coin for any SEC. 4. DESIGN OF COINS. Weinman, Charles E. Barber, and George T. bronze duplicate minted under section 8. (b) DISTRIBUTION.—Subject to section (a) DESIGN REQUIREMENTS.— Morgan. 5134(f) of title 31, United States Code, all sur- (1) IN GENERAL.—The design of the coins (b) SELECTION.—The design for the coins charges received by the Secretary from the minted under this Act shall be emblematic minted under this Act shall be— sale of coins issued under this Act shall be of the 50 years of exemplary and unparalleled (1) selected by the Secretary, after con- promptly distributed as follows: achievements of the National Aeronautics sultation with the Administrator of the Na- (1) The first $4,000,000 available for dis- and Space Administration. tional Aeronautics and Space Administra- tribution under this section, to the NASA (2) DESIGNATION AND INSCRIPTIONS.—On tion and the Commission of Fine Arts; and Family Assistance Fund, for the purpose of each coin minted under this Act, there shall (2) reviewed by the Citizens Coin Advisory providing need-based financial assistance to be— Committee. the families of NASA personnel who lose (A) a designation of the value of the coin; SEC. 5. ISSUANCE OF COINS. their lives as a result of injuries suffered in (a) QUALITY OF COINS.—Coins minted under (B) an inscription of the year ‘‘2008’’; and the performance of their official duties. this Act shall be issued in proof quality only. (C) inscriptions of the words ‘‘Liberty’’, (2) Of amounts available for distribution ‘‘In God We Trust’’, ‘‘United States of Amer- (b) MINT FACILITY.—Only 1 facility of the 1⁄2 of United States Mint may be used to strike after the payment under paragraph (1), ica’’, and ‘‘E Pluribus Unum’’, and such the next $1,000,000 to each of the following: any particular combination of denomination other inscriptions as the Secretary may de- (A) The Dr. Ronald E. McNair Educational and quality of the coins minted under this termine to be appropriate for the designs of (D.R.E.M.E.) Science Literacy Foundation Act. the coins. for the purposes of improving and strength- (c) PERIOD FOR ISSUANCE.—Notwith- (3) COIN IMAGES.— ening the process of teaching and learning standing any other provision of law, includ- (A) $50 COINS.— science, math, and technology at all edu- ing section 7(d), the Secretary— (i) OBVERSE.—The obverse of the $50 coins cational levels, elementary through college (1) may accept orders for the coins author- issued under this Act shall bear an image of through the promotion of innovative edu- ized under this Act during the period begin- the sun. cational programs. ning on January 1, 2008 and ending on De- (ii) REVERSE.—The reverse of the $50 coins (B) The Challenger Center for Space cember 31, 2008; and issued under this Act shall bear a design em- Science Education, for the purposes of cre- (2) may mint and issue such coins required blematic of the sacrifice of the United States ating positive learning experiences using to fulfill such orders during the period begin- astronauts who lost their lives in the line of space science as a theme that raise student ning on January 1, 2008 and ending on De- duty over the course of the space program. expectations of success, fostering a long- cember 31, 2009. (iii) HIGH RELIEF.—The design and inscrip- term interest in mathematics, science, and (d) EXCEPTION TO PROGRAM LIMITATION.— tions on the obverse and reverse of the $50 technology, and motivating students to pur- Notwithstanding any other provision of law, coins issued under this Act shall be in high sue careers in these fields. the minting or issuance of coins under this relief. (3) The remainder of the amounts available Act in 2009 does not— (B) $1 COINS.— for distribution after the payments under (1) preclude the Secretary from including a (i) OBVERSE.—The obverse of the $1 coins paragraphs (1) and (2), to the Secretary of surcharge on the issuance of any other com- issued under this Act shall bear 9 different the Smithsonian Institution for the preser- memorative coin minted or issued in 2009; designs, each of which shall consist of an vation, maintenance, and display of space ar- and image of 1 of the 9 planets of the solar sys- tifacts at the National Air and Space Mu- (2) be counted against the annual 2 com- tem, including Earth. seum (including the Steven F. Udvar-Hazy memorative coin program minting and (ii) REVERSE.—The reverse of the $1 coins Center). issuance limitation under section 5112(m)(1) issued under this Act shall bear different de- (c) AUDITS.—The NASA Family Assistance signs, each of which shall be emblematic of of title 31, United States Code. Fund, the Dr. Ronald E. McNair Educational the contributions of the research and space (e) ISSUANCE OF GOLD COINS.—Each gold Science Literacy Foundation, the Challenger centers, subject to the following require- coin minted under this Act may be issued Center for Space Science Education, and the ments: only as part of a complete set with 1 of each Secretary of the Smithsonian Institution (I) EARTH COIN.—The reverse of the $1 coins of the 9 $1 coins minted under this Act. shall be subject to the audit requirements of issued under this Act which bear an image of SEC. 6. SALE OF COINS. section 5134(f)(2) of title 31, United States the Earth on the obverse shall bear images (a) SALE PRICE.—The coins issued under Code, with regard to the amounts received emblematic of, and honoring, the discoveries this Act shall be sold by the Secretary at a under subsection (b). and missions of the National Aeronautics price equal to the sum of— (d) LIMITATION.—Notwithstanding sub- and Space Administration, the Mercury, (1) the face value of the coins; section (a), no surcharge may be included Gemini, and Space Shuttle missions and (2) the surcharge provided in section 7(a) with respect to the issuance under this Act other manned Earth-orbiting missions, and with respect to such coins; and of any coin during a calendar year if, as of the Apollo missions to the Moon. (3) the cost of designing and issuing the the time of such issuance, the issuance of (II) JUPITER COIN.—The reverse of the $1 coins (including labor, materials, dies, use of such coin would result in the number of com- coins issued under this Act which bear an machinery, overhead expenses, marketing, memorative coin programs issued during image of the planet Jupiter on the obverse and shipping). such year to exceed the annual 2 commemo- shall include a scientifically accurate depic- (b) PREPAID ORDERS.— rative coin program issuance limitation tion of the Galilean moon Europa and depict (1) IN GENERAL.—The Secretary shall ac- under section 5112(m)(1) of title 31, United both a past and future mission to Europa. cept prepaid orders for the coins minted States Code (as in effect on the date of en- actment of this Act). The Secretary may (III) SATURN COIN.—The reverse of the $1 under this Act before the issuance of such issue guidance to carry out this subsection. coins issued under this Act which bear an coins. image of the planet Saturn on the obverse (2) DISCOUNT.—Sale prices with respect to SEC. 8. BRONZE DUPLICATES. shall include a scientifically accurate depic- prepaid orders under paragraph (1) shall be The Secretary may strike and sell bronze tion of the moon Titan and depict both a at a reasonable discount. duplicates of the $50 gold coins authorized under this Act, at a price determined by the past and a future mission to Titan. (c) PRESENTATION.—In addition to the Secretary to be appropriate. Such duplicates (IV) PLUTO (AND OTHER DWARF PLANETS) issuance of coins under this Act in such shall not be considered to be United States COIN.—The reverse of the $1 coins issued other methods of presentation as the Sec- coins and shall not be legal tender. under this Act which bear an image of the retary determines to be appropriate, the Sec- planet Pluto on the obverse shall include a retary shall provide, as a sale option, a pres- Mr. DODD. Mr. President, I note this design that is emblematic of telescopic ex- entation case which displays the $50 gold is a coin bill that was authored by Sen- ploration of deep space by the National Aero- coin in the center, surrounded by the $1 sil- ator NELSON of Florida commemo- nautics and Space Administration and the ver coins in elliptical orbits. All such presen- rating the 50th anniversary of the es- ongoing search for Earth-like planets orbit- tation cases shall bear a plaque with appro- tablishment of NASA, a historic mo- priate inscriptions that include the names ing other stars. ment. I commend Senator NELSON for (4) REALISTIC AND SCIENTIFICALLY ACCURATE and dates of the spacecraft missions on his efforts. DEPICTIONS.—The images for the designs of which United States astronauts lost their coins issued under this Act shall be selected lives over the course of the space program f on the basis of the realism and scientific ac- and the names of such astronauts. ORDERS FOR FRIDAY, JUNE 20, 2008 curacy of the images and on the extent to SEC. 7. SURCHARGES. Mr. DODD. Mr. President, I ask unan- which the images are reminiscent of the dra- (a) IN GENERAL.—All sales of coins minted matic and beautiful artwork on coins of the under this Act shall include a surcharge as imous consent that when the Senate so-called ‘‘Golden Age of Coinage’’ in the follows: completes its business today, it stand United States, at the beginning of the Twen- (1) A surcharge of $50 per coin for the $50 in recess until 9:30 a.m. tomorrow, Fri- tieth Century, with the participation of such coin. day, June 20; that following the prayer

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00147 Fmt 4624 Sfmt 0634 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5918 CONGRESSIONAL RECORD — SENATE June 19, 2008 and pledge, the Journal of proceedings MASAKI G. KUWANA, JR. MARK W. MANOSO JOHN G. MARKLEY be approved to date and the Senate re- THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT CHRISTOPHER R. MARTIN TO THE GRADE INDICATED IN THE UNITED STATES ARMY sume consideration of the House mes- GREGORY J. MARTIN DENTAL CORPS UNDER TITLE 10, U.S.C., SECTIONS 624 LARRY J. MCCORD sage to accompany H.R. 3221, the hous- AND 3064: IAN K. MCLEOD ing legislation. To be lieutenant colonel LEAH P. MCMANN MICHAEL J. MINES The PRESIDING OFFICER. Without RALF C. BEILHARDT SEAN P. MONTGOMERY objection, it is so ordered. ROBERT E. BESSEY JEFFREY S. MORGAN SCOTT W. BROWN STEPHEN M. MORRIS f JERRY M. CARBONE JEANNIE M. MUIR LISA A. FRANKLIN SEAN W. MULVANEY WILLIAM J. GREENWOOD NERIS M. NIEVESROBBINS PROGRAM HERMANN F. HINZE TIMOTHY C. NUNEZ CHRISTENSEN HSU RONALD P. OBERFOELL Mr. DODD. As previously announced, MEHTAB HUSAIN ROBERT J. OCONNELL there will be no votes tomorrow or THONDIQUE T. MCGHEE MICHAEL E. PARKER RICHARD V. RITTER TARAK H. PATEL Monday. Senators should be prepared JEAN C. SENECAL JEREMY G. PERKINS JAMES M. SUTTON DAVID N. PRESSMAN to vote Tuesday morning. JOHN T. THOMPSON AMIR M. RABII RICHARD L. WILLIAMS f THOMAS J. RICHARD THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT ACEVEDO F. ROBLES RECESS UNTIL 9:30 A.M. TO THE GRADE INDICATED IN THE UNITED STATES ARMY INGER L. ROSNER MEDICAL CORPS UNDER TITLE 10, U.S.C., SECTIONS 624 ROBERT K. RUSSELL TOMORROW AND 3064: DAVID S. SACHAR SCOTT A. SALMON Mr. DODD. If there is no further busi- To be lieutenant colonel CHRISTOPHER K. SANBORN ness to come before the Senate, I ask MICHAEL P. ABEL DEAN A. SEEHUSEN unanimous consent that it stand in re- MICHAEL C. ALBRECHT RENEE M. SIEGMANN CRAIG J. AMNOTT CASTANEDA A. SIEROCKA cess under the previous order. MARIA E. ARCILA JONATHAN K. SMITH There being no objection, the Senate, HAYS L. ARNOLD KAREN E. SMITH EDWARD H. BAILEY RICHARD R. SMITH at 7:04 p.m., recessed until Friday, HANS E. BAKKEN HARLAN L. SOUTH June 20, 2008, at 9:30 a.m. LEE J. BARTON SCOTT R. STEELE ROBERT E. BENJAMIN PHILIP S. SUH f MICHAEL J. BENSON ANTHONY SULLIVAN GREGORY M. BERNSTEIN KEITH D. SUMEY NOMINATIONS RICHARD A. BICKEL, JR. ROBERT D. SWIFT DANIELLE N. BIRD TIMOTHY S. TALBOT Executive nominations received by ERIC M. BLUMAN BRIGILDA C. TENEZA STEPHEN A. BRASSELL SEAN F. THOMAS the Senate: LORANEE E. BRAUN JOHN E. THORDSEN, JR. JOHN P. BRIDE, JR. LEROY J. TROMBETTA DEPARTMENT OF STATE SCOTT E. BRIETZKE JOSEPH C. TURBYVILLE MARISOL VEGADERUCK RICHARD G. OLSON, JR., OF NEW MEXICO, A CAREER RICHARD O. BURNEY ARTHUR L. CAMPBELL III RODNEY A. VILLANUEVA MEMBER OF THE SENIOR FOREIGN SERVICE, CLASS OF GEORGE E. VONHILSHEIMER COUNSELOR, TO BE AMBASSADOR EXTRAORDINARY AND JOHN R. CHANCE CHARLES J. CHITWOOD JEFFREY A. VOS PLENIPOTENTIARY OF THE UNITED STATES OF AMERICA KIRK H. WAIBEL TO THE UNITED ARAB EMIRATES. BRYAN L. CHRISTENSEN DAVID W. COLE BRUCE K. WEATHERS DEPARTMENT OF LABOR MICHAEL A. COLE KIMBERLY A. WENNER GEORGE R. COLLINS KENNETH R. WEST BRENT R. ORRELL, OF VIRGINIA, TO BE AN ASSISTANT JOHN D. COMPLETO CHRISTOPHER E. WHITE SECRETARY OF LABOR, VICE EMILY STOVER DEROCCO. CHRISTOPHER R. COTE MYREON WILLIAMS BRADLEY K. WOODS NATIONAL INSTITUTE FOR LITERACY PETER J. CUENCA PAUL J. CUNNINGHAM JUSTIN T. WOODSON DIANE BARONE, OF NEVADA, TO BE A MEMBER OF THE GREGORY G. DAMMANN JOHNNIE WRIGHT, JR. NATIONAL INSTITUTE FOR LITERACY ADVISORY BOARD COLIN Y. DANIELS IN THE NAVY FOR A TERM EXPIRING JANUARY 30, 2011, VICE DONALD D. JASMINE T. DANIELS DESHLER, TERM EXPIRED. KURT G. DAVIS THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT MARY E. CURTIS, OF MASSACHUSETTS, TO BE A MEM- RUSSELL O. DAVIS TO THE GRADE INDICATED IN THE UNITED STATES NAVY BER OF THE NATIONAL INSTITUTE FOR LITERACY ADVI- JEFFREY A. DEAN UNDER TITLE 10, U.S.C., SECTION 624: SORY BOARD FOR A TERM EXPIRING NOVEMBER 25, 2011, SHAD H. DEERING VICE CARMEL BORDERS, TERM EXPIRING. KENT J. DEZEE To be commander CHARLES S. DIETRICH III DAVID R. BROWN DEPARTMENT OF JUSTICE MICHAEL W. ELLIS HERBERT L. GRIFFIN, JR. ANDREW FLETCHER J. PATRICK ROWAN, OF MARYLAND, TO BE AN ASSIST- BRIAN J. C. HALEY ANTHONY M. FOLEY ANT ATTORNEY GENERAL, VICE KENNETH L. WAINSTEIN. DEAN L. HOELZ TODD FUNKHOUSER GREGORY G. GARRE, OF MARYLAND, TO BE SOLICITOR DWIGHT A. HORN PHILIP J. GENTLESK GENERAL OF THE UNITED STATES, VICE PAUL D. CLEM- GEORGE J. MENDES JAMES J. GERACCI ENT, RESIGNED. VINSON W. MILLER LYNN M. GIARRIZZO JEFFREY S. MILNE THE JUDICIARY MELISSA L. GIVENS DAVID D. SCHILLING RAYMOND G. GOOD STEPHEN J. SHAW MICHAEL O’NEILL, OF MARYLAND, TO BE UNITED ERIC J. GOURLEY STEVEN L. SOUDERS STATES DISTRICT JUDGE FOR THE DISTRICT OF COLUM- JOSEPH D. GRAMLING WILLIAM D. STALLARD BIA, VICE GLADYS KESSLER, RETIRED. BRET A. GUIDRY LOFTEN C. THORNTON JEFFREY ADAM ROSEN, OF VIRGINIA, TO BE UNITED CHAD A. HALEY ANDREW A. WADE STATES DISTRICT JUDGE FOR THE DISTRICT OF COLUM- FREDERICK B. HARRIS DARRELL J. WESLEY BIA, VICE THOMAS F. HOGAN, RETIRED. DONALD L. HELMAN, JR. TIMOTHY R. WHITE IN THE AIR FORCE JEFFREY V. HILL SEAN A. HOLLONBECK THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT THE FOLLOWING NAMED OFFICER FOR APPOINTMENT DEAN H. HOMMER TO THE GRADE INDICATED IN THE UNITED STATES NAVY TO THE GRADE INDICATED IN THE UNITED STATES AIR CHRISTOPHER L. HUTSON UNDER TITLE 10, U.S.C., SECTION 624: FORCE UNDER TITLE 10, U.S.C., SECTION 624: DANIEL J. IRIZARRY To be commander To be colonel JOHNSON ISAAC LINDA G. JACKSON BRADLEY A. APPLEMAN FRANK J. HALE AARON L. JACOB ARTHUR R. BLUM CHRISTOPHER G. JARVIS JOSEPH A. BOVERI THE FOLLOWING NAMED OFFICER FOR APPOINTMENT JEREMY S. JOHNSON ROBERT C. DETOLVE TO THE GRADE INDICATED IN THE RESERVE OF THE AIR ADAM B. KANIS TODD C. HUNTLEY FORCE UNDER TITLE 10, U.S.C., SECTION 12203: DWIGHT C. KELLICUT SCOTT G. JOHNSON To be colonel MATTHEW J. KELLY PETER R. KOEBLER SEUNG W. KIM JAMES E. LANDIS DOUGLAS K. DUNBAR KURT G. KINNEY MARGARET A. LARREA MARY M. KLOTE JAMES A. LINK IN THE ARMY JEFFREY K. KLOTZ JAMES M. LUCCI KURTIS L. KOWALSKI THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT GATHA L. MANNS GREGORY T. LANG RICHARD J. MCGUIRE TO THE GRADE INDICATED IN THE RESERVE OF THE CHRISTOPHER L. LANGE ARMY UNDER TITLE 10, U.S.C., SECTION 12203: JONATHAN G. ODOM JENNIFER T. LANGE ROBERT J. PASSERELLO To be colonel GEORGE B. LANTZ JON D. PEPPETTI BRENT L. LECHNER WARREN A. RECORD KENNETH L. BEALE, JR. RONALD LEHMAN PETER M. RODNITE THOMAS H. BROUILLARD ERIC N. LEONG JOSEPH ROMERO CHRISTINE F. LETTIERI THE FOLLOWING NAMED ARMY NATIONAL GUARD OF JENNIFER L. ROPER WILLIAM D. LEUSINK TIMOTHY D. STONE THE UNITED STATES OFFICERS FOR APPOINTMENT TO ROMEO N. LIM THE GRADE INDICATED IN THE RESERVE OF THE ARMY ANDREA E. TAPLIN JOSEPH K. LLANOS FLORENCIO J. YUZON UNDER TITLE 10, U.S.C., SECTIONS 12203 AND 12211: JAMES B. LUCAS II To be colonel PEDRO F. LUCERO THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT RICHARD S. LUCIDI TO THE GRADE INDICATED IN THE UNITED STATES NAVY LENARD M. KERR ROBERT F. MALSBY III UNDER TITLE 10, U.S.C., SECTION 624:

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00148 Fmt 4624 Sfmt 9801 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE June 19, 2008 CONGRESSIONAL RECORD — SENATE S5919 To be commander TRUPTI N. BRAHMBHATT To be commander STEPHEN P. BROMBEREK SUE A. ADAMSON DEBORAH L. CARR CALLIOPE E. ALLEN FARIA BELMARES MICHAEL D. CASSADY HERNAN O. ALTAMAR BRADLEY A. BRISCOE KENNETH E. CHRISTOPHER PAUL B. ALVORD MARNIE S. BUCHANAN ROSANNE Y. CONWAY MICHAEL R. ANCONA VIRGINIA L. BUTLER GREGORY W. COOK STEPHEN P. ARLES PAUL M. CORNETT MICHAEL F. CRIQUI RODNEY A. ARMAND JOHN N. CRANE THOMAS P. DELUCIA CHAD M. BAASEN ROBERT D. FETHERSTON DOUGLAS W. FLETCHER ROBERT V. BARTHEL KAREN R. FOLLIN KEITH R. GIVENS STEPHEN J. BELL DENISE M. GECHAS RUTH E. GOLDBERG JASON H. BENNETT KELLY R. HAMON RICHARD A. GRAHAM LYNELLE M. BOAMAH PATRICIA C. HASEN DAVID F. HOEL RODERICK C. BORGIE ROBERT J. HAWKINS WILLIAM D. HOLDER BRIAN N. BOWES CONSTANCE E. HYMAS DENISE N. HOLDRIDGE DAVID A. BOYD EILEEN M. KNOBLE MARY M. HUPP BRIAN M. BRAITHWAITE LAURA J. LEDYARD KEVIN M. JACKSON DANIEL R. BREAZEALE TAMARA K. MAEDER JOHN P. KENDRICK DOUGLAS E. BROWN CHRISTOPHER R. MANNION MARK G. LIEB KEVIN J. BROWN DAVID S. MARKELL ALLEN R. LUMANOG HAN Q. BUI DANIEL F. MCKENDRY MICHAEL G. LUTTE RACHEL A. BURKE XANTHE R. MIEDEMA DAVID M. MARTIN LUTHER I. CARTER RAMONA L. NIXON RICHARD L. MCCARTHY JAMES A. CAVINESS DEBBIE OHARE SCOTT A. MCKENZIE RAMON F. CESTERO ANDREA C. PETROVANIE CHAD A. MITCHELL JACKY P. CHENG KATRINA O. PRINGLE SARAH M. NEILL JAMES W. CHRISTOPHER LANA R. ROWELL KELLEY A. NEWMAN PERRIN C. CLARK ESTHER C. VOSSLER CHRISTOPHER J. ODONNELL JOHN A. COOLEY NANCY V. WILSONJACKSON JAMES E. PATREY RICHARD G. COURTNEY JULIE L. WORKING JOE T. PATTERSON III DAVID M. CRAWFORD ELENA M. PREZIOSO JOSEPH E. CUMMINGS THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT DOUGLAS E. PUTTHOFF RUCHIRA S. D. DENSERT TO THE GRADE INDICATED IN THE UNITED STATES NAVY CYRUS N. RAD ANDREA B. DONALTY UNDER TITLE 10, U.S.C., SECTION 624: TIMOTHY R. RICHARDSON COLLEEN A. DORRANCE To be commander SHAWN A. RICKLEFS FRANK M. DOSSANTOS SHARON J. ROBERTS JAMES E. DUNCAN MARK R. BOONE JERRY N. SANDERS, JR. MICHAEL E. EPPERLY LARRY C. BURTON CONNIE L. SCOTT REGINALD S. EWING III LEWIS T. CARPENTER JASON E. SPENCER MAUREEN E. FARRELL DAVID F. CHACON JASON S. SPILLMAN JEFFREY H. FEINBERG ALLISON A. CRAIN GEORGE STEFFIAN MICHAEL E. FENTON JOSEPH N. DEHOOGH RAYMOND D. STIFF MARK E. FLEMING LOUIS H. DELAGARZA MARK A. SWEARNGIN DAVID P. GALLUS DON C. ELLZEY ERIC R. TIMMENS KATERINA M. GALLUS JAY GEISTKEMPER SHANE A. VATH AMY R. GAVRIL GEORGE M. GUISE EDWARD G. VONBERG SANJIV J. GHOGALE GEORGE P. HAIG MARION J. WILLIAMS MICHAEL S. GIBSON STEVEN P. HERNANDEZ GERARD J. WOELKERS HERMANN F. GONZALEZ JEFF B. JORDEN DEBRA L. YNIGUEZ SEAN E. GORETZKE GEORGES E. YOUNES GRACE L. KEY GREGORY H. GORMAN FRANK T. GRASSI TARAS J. KONRAD THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT DONALD J. GREEN MARK A. LARUSSO TO THE GRADE INDICATED IN THE UNITED STATES NAVY FRANCISCO J. GUTIERREZ JAMES K. LE UNDER TITLE 10, U.S.C., SECTION 624: DAVID A. LEAL TIMOTHY W. HAEGEN KEITH L. MAYBERRY To be commander GREGORY J. HALL LAURA S. MCFARLAND MATTHEW P. HANNON CRAIG L. ABRAHAM SUSAN D. HARVEY PATRICK E. MCGROARTY KRISTIN ACQUAVELLA MARTHA J. MICHAELSON DOUGLAS G. HAWK BRIAN J. ANDERSON DAVID W. HAYNES CARRIE M. MUEHLENPFORT RODNEY D. BLEVINS DAVID Y. HEALY, JR. JOSE G. PEDROZA GEORGE E. BRESNIHAN TUAN N. HOANG SHARON A. RAGHUBAR CHAD E. BUERMELE JAMES S. HOUSTON SANDRA H. RAY CHAD B. BURKE JOHN P. HOWARD KOICHI SAITO JOHN A. CARDILLO ROBERT T. HOWARD DENNIS G. SAMPSON JAMES CHEATHAM CHRISTOPHER M. HULTS BUFFY STORM KEVIN E. CHESHURE SCOTT L. ITZKOWITZ GARY J. WALKER TODD R. CHIPMAN TERENCE E. JOHNSON JOHN C. WILLIAMS WILLIAM H. CLARKE MICHAEL KASELIS GEORGE W. DANIEL THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT ANDREW R. DARNELL MICHAEL P. KEITH TO THE GRADE INDICATED IN THE UNITED STATES NAVY SCOTT A. DAVIS STEWART M. KERR UNDER TITLE 10, U.S.C., SECTION 624: BRENT L. DESSING STEVEN M. KRISS To be commander KIRK B. DIAL MICHAEL A. KUHN NATHAN C. DUFFY ANAND R. KUMAR CHRISTOPHER G. ADAMS BRADLEY E. EMERSON EDWARD W. LAMBERT III JOHN R. ANDERSON JOSEPH C. ESPINO BRIAN D. LAWENDA MATTHEW J. ANDERSON JAMES G. FABBY EDITH R. LEDERMAN RICHARD D. ANDERSON III ELISABETH G. FARRELL JAMES O. LESPERANCE ROBERT J. BALLISTER, JR. KENNETH A. FAULKNER, SR. HENRY LIN KEITH W. BARTON TERREL J. FISHER DAVID C. LOPRESTI JAMES B. BLANTON JUSTIN K. FRANCIS JEFFREY H. MCCLELLEN DONALD R. BRUS NATASHA A. GAMMON EDWIN T. MCGROARTY FRANK C. CERVASIO JAMES R. S. GAYTON MARGUERITE MCGUIGANSHUSTER SCOTT O. CLOYD TRAVIS N. GOODWIN JAMES M. MCKEE THERON C. COLBERT DOUGLAS W. HAROLD ROBERT N. MCLAY ROMEO L. COLEMAN PAUL A. HASLAM HUGH K. MCSWAIN IV ROLAND V. J. DEGUZMAN MICHAEL E. HAVENS DANIEL C. MIELNICKI WILLIAM S. FINLAYSON JAMES G. HENDRICKSON, JR. EDWARD F. MILES CHRISTOPHER J. GALLAGHER TRENT C. KALP ERIC S. MITCHELL WENDY M. HALSEY PATRICK E. KOEHLER GREGG J. MONTALTO KEVIN K. JUNTUNEN JADON LINCOLN PRASHANTH S. NAVARAN JEFFREY J. KILIAN JOHN S. LUGO KESHAV R. NAYAK PETER J. MACULAN JEFFERSON E. MCCOLLUM GEORGE A. NEWTON MICHAEL L. OBERMILLER SPENCER A. MOSELEY WILLIAM P. OMEARA SCOTT P. RAYMOND SHAWN B. NORWOOD KENNETH J. ORTIZ MIKHAEL H. SER COLIN J. OBRIEN BRET N. PASIUK WILLIAM A. SIEMER DARREL E. OLSOWSKI SAYJAL J. PATEL LATANYA E. SIMMS RICHARD A. PAQUETTE JONATHAN P. PEARL WILLIAM J. SIMPKINS JAMEAU PRYOR GEOFFREY A. PECHINSKY MICHAEL A. THORNTON NICKOLAS L. RAPLEY DENISE L. PEET ROD W. TRIBBLE CHAD R. RIDDER JOSEPH F. PENTA MATTHEW P. TUCKER CHRISTOPHER M. RODRIGUES MICHELLE M. PERELLO VICTOR V. VELASCO JOSE L. SANCHEZ ROBERT J. PETERSON BRIAN L. WEINSTEIN THOMAS A. SCOTT THEODORE C. PRATT JIMMY WEST TERRENCE SIMMONS LESLIE H. RASSNER NICOLAS D. I. YAMODIS EDWARD L. STEVENSON JAMES J. REEVES PAMELA S. THEORGOOD CAROLYN C. RICE THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT JAMES T. THOMAS GEORGE M. RICE TO THE GRADE INDICATED IN THE UNITED STATES NAVY JAY S. TUCKER MARK S. RIDDLE UNDER TITLE 10, U.S.C., SECTION 624: JOSHUA L. TUCKER DENNIS J. RIVET To be commander ELNORA E. WINN CARLOS J. RODRIGUEZ ROBERT R. WINTERS TIMOTHY B. ROONEY ALAN L. ADAMS CHRISTOPHER M. WISE DAVID C. ROSKA BARRY D. ADAMS JOHN R. ROTRUCK ARTHUR C. ANTHONY THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT JOHN P. H. RUE WILLIAM C. ASHBY TO THE GRADE INDICATED IN THE UNITED STATES NAVY SHAWN D. SAFFORD FELIX A. BIGBY UNDER TITLE 10, U.S.C., SECTION 624: TIMOTHY E. SAYLES

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00149 Fmt 4624 Sfmt 9801 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE S5920 CONGRESSIONAL RECORD — SENATE June 19, 2008

KATHERINE I. SCHEXNEIDER ERIC T. STEDJELARSEN RHONDA A. WALLACE ANDREW W. SCHIEMEL JAMES E. STEPENOSKY WILLIAM C. WALLACE DANIEL F. SEIDENSTICKER JEFFERY A. STONE SAM O. WANKO RICHARD P. SERIANNI ROBERT G. STRANGE, JR. SONYA N. WATERS ROBERT P. SHAFER JOSEPH E. STRAUSS DAVID E. WEBSTER INGRID V. SHELDON CHRISTOPHER D. STREETER MICHAEL W. WENTWORTH DANIEL L. SHERWOOD KENNETH A. TERHAAR JAMES C. WEST DANNY T. SHIAU KARIN E. THOMAS TIMOTHY J. WHITMAN JEANETTE F. SHIMKUS KIMBERLY P. TOONE DEVIN M. SHOQUIST MARK D. TRAVIS DAVID R. WHITTAKER ROBERT SILK ARVIN W. TRIPPENSEE RONALD M. WILLIAMS PATRICK S. SIPE MICHAEL S. VALADE CRAIG M. WOMELDORPH JOHN H. SMITH, JR. ROBERT T. VANHOOK JOHN D. YORK SUNG W. SONG LORI L. VANSCOY PATRICK E. YOUNG

VerDate Aug 31 2005 06:46 Sep 14, 2008 Jkt 059060 PO 00000 Frm 00150 Fmt 4624 Sfmt 9801 E:\RECORD08\RECFILES\S19JN8.REC S19JN8 mmaher on PROD1PC76 with CONG-REC-ONLINE