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Thursday, October 2, 2008, 3:00 AM H.R. 1424: Bailout Bill, Part 2
4 (3) the term ``insured depository institution''
5 has the same meaning as in section 3 of the Federal
6 Deposit Insurance Act (12 U.S.C. 1813); and
7 (4) the term ``servicer'' has the same meaning
8 as in section 6(i)(2) of the Real Estate Settlement
9 Procedures Act of 1974 (12 U.S.C. 2605(i)(2)).
10 (b) HOMEOWNER ASSISTANCE BY AGENCIES.--
11 (1) IN GENERAL.--To the extent that the Fed-
12 eral property manager holds, owns, or controls mort-
13 gages, mortgage backed securities, and other assets
14 secured by residential real estate, including multi-
15 family housing, the Federal property manager shall
16 implement a plan that seeks to maximize assistance
17 for homeowners and use its authority to encourage
18 the servicers of the underlying mortgages, and con-
19 sidering net present value to the taxpayer, to take
20 advantage of the HOPE for Homeowners Program
21 under section 257 of the National Housing Act or
22 other available programs to minimize foreclosures.
23 (2) MODIFICATIONS.--In the case of a residen-
24 tial mortgage loan, modifications made under para-
25 graph (1) may include--
29
1 (A) reduction in interest rates;
2 (B) reduction of loan principal; and
3 (C) other similar modifications.
4 (3) TENANT PROTECTIONS.--In the case of
5 mortgages on residential rental properties, modifica-
6 tions made under paragraph (1) shall ensure--
7 (A) the continuation of any existing Fed-
8 eral, State, and local rental subsidies and pro-
9 tections; and
10 (B) that modifications take into account
11 the need for operating funds to maintain decent
12 and safe conditions at the property.
13 (4) TIMING.--Each Federal property manager
14 shall develop and begin implementation of the plan
15 required by this subsection not later than 60 days
16 after the date of enactment of this Act.
17 (5) REPORTS TO CONGRESS.--Each Federal
18 property manager shall, 60 days after the date of
19 enactment of this Act and every 30 days thereafter,
20 report to Congress specific information on the num-
21 ber and types of loan modifications made and the
22 number of actual foreclosures occurring during the
23 reporting period in accordance with this section.
24 (6) CONSULTATION.--In developing the plan re-
25 quired by this subsection, the Federal property man-
30
1 agers shall consult with one another and, to the ex-
2 tent possible, utilize consistent approaches to imple-
3 ment the requirements of this subsection.
4 (c) ACTIONS WITH RESPECT TO SERVICERS.--In any
5 case in which a Federal property manager is not the owner
6 of a residential mortgage loan, but holds an interest in
7 obligations or pools of obligations secured by residential
8 mortgage loans, the Federal property manager shall--
9 (1) encourage implementation by the loan
10 servicers of loan modifications developed under sub-
11 section (b); and
12 (2) assist in facilitating any such modifications,
13 to the extent possible.
14 (d) LIMITATION.--The requirements of this section
15 shall not supersede any other duty or requirement imposed
16 on the Federal property managers under otherwise appli-
17 cable law.
18 SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE
19 GOVERNANCE.
20 (a) APPLICABILITY.--Any financial institution that
21 sells troubled assets to the Secretary under this Act shall
22 be subject to the executive compensation requirements of
23 subsections (b) and (c) and the provisions under the Inter-
24 nal Revenue Code of 1986, as provided under the amend-
25 ment by section 302, as applicable.
31
1 (b) DIRECT PURCHASES.--
2 (1) IN GENERAL.--Where the Secretary deter-
3 mines that the purposes of this Act are best met
4 through direct purchases of troubled assets from an
5 individual financial institution where no bidding
6 process or market prices are available, and the Sec-
7 retary receives a meaningful equity or debt position
8 in the financial institution as a result of the trans-
9 action, the Secretary shall require that the financial
10 institution meet appropriate standards for executive
11 compensation and corporate governance. The stand-
12 ards required under this subsection shall be effective
13 for the duration of the period that the Secretary
14 holds an equity or debt position in the financial in-
15 stitution.
16 (2) CRITERIA.--The standards required under
17 this subsection shall include--
18 (A) limits on compensation that exclude in-
19 centives for senior executive officers of a finan-
20 cial institution to take unnecessary and exces-
21 sive risks that threaten the value of the finan-
22 cial institution during the period that the Sec-
23 retary holds an equity or debt position in the fi-
24 nancial institution;
32
1 (B) a provision for the recovery by the fi-
2 nancial institution of any bonus or incentive
3 compensation paid to a senior executive officer
4 based on statements of earnings, gains, or other
5 criteria that are later proven to be materially
6 inaccurate; and
7 (C) a prohibition on the financial institu-
8 tion making any golden parachute payment to
9 its senior executive officer during the period
10 that the Secretary holds an equity or debt posi-
11 tion in the financial institution.
12 (3) DEFINITION.--For purposes of this section,
13 the term ``senior executive officer'' means an indi-
14 vidual who is one of the top 5 highly paid executives
15 of a public company, whose compensation is required
16 to be disclosed pursuant to the Securities Exchange
17 Act of 1934, and any regulations issued thereunder,
18 and non-public company counterparts.
19 (c) AUCTION PURCHASES.--Where the Secretary de-
20 termines that the purposes of this Act are best met
21 through auction purchases of troubled assets, and only
22 where such purchases per financial institution in the ag-
23 gregate exceed $300,000,000 (including direct purchases),
24 the Secretary shall prohibit, for such financial institution,
25 any new employment contract with a senior executive offi-
33
1 cer that provides a golden parachute in the event of an
2 involuntary termination, bankruptcy filing, insolvency, or
3 receivership. The Secretary shall issue guidance to carry
4 out this paragraph not later than 2 months after the date
5 of enactment of this Act, and such guidance shall be effec-
6 tive upon issuance.
7 (d) SUNSET.--The provisions of subsection (c) shall
8 apply only to arrangements entered into during the period
9 during which the authorities under section 101(a) are in
10 effect, as determined under section 120.
11 SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES
12 AND CENTRAL BANKS.
13 The Secretary shall coordinate, as appropriate, with
14 foreign financial authorities and central banks to work to-
15 ward the establishment of similar programs by such au-
16 thorities and central banks. To the extent that such for-
17 eign financial authorities or banks hold troubled assets as
18 a result of extending financing to financial institutions
19 that have failed or defaulted on such financing, such trou-
20 bled assets qualify for purchase under section 101.
21 SEC. 113. MINIMIZATION OF LONG-TERM COSTS AND MAXI-
22 MIZATION OF BENEFITS FOR TAXPAYERS.
23 (a) LONG-TERM COSTS AND BENEFITS.--
24 (1) MINIMIZING NEGATIVE IMPACT.--The Sec-
25 retary shall use the authority under this Act in a
34
1 manner that will minimize any potential long-term
2 negative impact on the taxpayer, taking into account
3 the direct outlays, potential long-term returns on as-
4 sets purchased, and the overall economic benefits of
5 the program, including economic benefits due to im-
6 provements in economic activity and the availability
7 of credit, the impact on the savings and pensions of
8 individuals, and reductions in losses to the Federal
9 Government.
10 (2) AUTHORITY.--In carrying out paragraph
11 (1), the Secretary shall--
12 (A) hold the assets to maturity or for re-
13 sale for and until such time as the Secretary
14 determines that the market is optimal for sell-
15 ing such assets, in order to maximize the value
16 for taxpayers; and
17 (B) sell such assets at a price that the Sec-
18 retary determines, based on available financial
19 analysis, will maximize return on investment for
20 the Federal Government.
21 (3) PRIVATE SECTOR PARTICIPATION.--The
22 Secretary shall encourage the private sector to par-
23 ticipate in purchases of troubled assets, and to in-
24 vest in financial institutions, consistent with the pro-
25 visions of this section.
35
1 (b) USE OF MARKET MECHANISMS.--In making pur-
2 chases under this Act, the Secretary shall--
3 (1) make such purchases at the lowest price
4 that the Secretary determines to be consistent with
5 the purposes of this Act; and
6 (2) maximize the efficiency of the use of tax-
7 payer resources by using market mechanisms, in-
8 cluding auctions or reverse auctions, where appro-
9 priate.
10 (c) DIRECT PURCHASES.--If the Secretary deter-
11 mines that use of a market mechanism under subsection
12 (b) is not feasible or appropriate, and the purposes of the
13 Act are best met through direct purchases from an indi-
14 vidual financial institution, the Secretary shall pursue ad-
15 ditional measures to ensure that prices paid for assets are
16 reasonable and reflect the underlying value of the asset.
17 (d) CONDITIONS ON PURCHASE AUTHORITY FOR
18 WARRANTS AND DEBT INSTRUMENTS.--
19 (1) IN GENERAL.--The Secretary may not pur-
20 chase, or make any commitment to purchase, any
21 troubled asset under the authority of this Act, unless
22 the Secretary receives from the financial institution
23 from which such assets are to be purchased--
24 (A) in the case of a financial institution,
25 the securities of which are traded on a national
36
1 securities exchange, a warrant giving the right
2 to the Secretary to receive nonvoting common
3 stock or preferred stock in such financial insti-
4 tution, or voting stock with respect to which,
5 the Secretary agrees not to exercise voting
6 power, as the Secretary determines appropriate;
7 or
8 (B) in the case of any financial institution
9 other than one described in subparagraph (A),
10 a warrant for common or preferred stock, or a
11 senior debt instrument from such financial in-
12 stitution, as described in paragraph (2)(C).
13 (2) TERMS AND CONDITIONS.--The terms and
14 conditions of any warrant or senior debt instrument
15 required under paragraph (1) shall meet the fol-
16 lowing requirements:
17 (A) PURPOSES.--Such terms and condi-
18 tions shall, at a minimum, be designed--
19 (i) to provide for reasonable participa-
20 tion by the Secretary, for the benefit of
21 taxpayers, in equity appreciation in the
22 case of a warrant or other equity security,
23 or a reasonable interest rate premium, in
24 the case of a debt instrument; and
37
1 (ii) to provide additional protection
2 for the taxpayer against losses from sale of
3 assets by the Secretary under this Act and
4 the administrative expenses of the TARP.
5 (B) AUTHORITY TO SELL, EXERCISE, OR
6 SURRENDER.--The Secretary may sell, exercise,
7 or surrender a warrant or any senior debt in-
8 strument received under this subsection, based
9 on the conditions established under subpara-
10 graph (A).
11 (C) CONVERSION.--The warrant shall pro-
12 vide that if, after the warrant is received by the
13 Secretary under this subsection, the financial
14 institution that issued the warrant is no longer
15 listed or traded on a national securities ex-
16 change or securities association, as described in
17 paragraph (1)(A), such warrants shall convert
18 to senior debt, or contain appropriate protec-
19 tions for the Secretary to ensure that the
20 Treasury is appropriately compensated for the
21 value of the warrant, in an amount determined
22 by the Secretary.
23 (D) PROTECTIONS.--Any warrant rep-
24 resenting securities to be received by the Sec-
25 retary under this subsection shall contain anti-
38
1 dilution provisions of the type employed in cap-
2 ital market transactions, as determined by the
3 Secretary. Such provisions shall protect the
4 value of the securities from market transactions
5 such as stock splits, stock distributions, divi-
6 dends, and other distributions, mergers, and
7 other forms of reorganization or recapitaliza-
8 tion.
9 (E) EXERCISE PRICE.--The exercise price
10 for any warrant issued pursuant to this sub-
11 section shall be set by the Secretary, in the in-
12 terest of the taxpayers.
13 (F) SUFFICIENCY.--The financial institu-
14 tion shall guarantee to the Secretary that it has
15 authorized shares of nonvoting stock available
16 to fulfill its obligations under this subsection.
17 Should the financial institution not have suffi-
18 cient authorized shares, including preferred
19 shares that may carry dividend rights equal to
20 a multiple number of common shares, the Sec-
21 retary may, to the extent necessary, accept a
22 senior debt note in an amount, and on such
23 terms as will compensate the Secretary with
24 equivalent value, in the event that a sufficient
39
1 shareholder vote to authorize the necessary ad-
2 ditional shares cannot be obtained.
3 (3) EXCEPTIONS.--
4 (A) DE MINIMIS.--The Secretary shall es-
5 tablish de minimis exceptions to the require-
6 ments of this subsection, based on the size of
7 the cumulative transactions of troubled assets
8 purchased from any one financial institution for
9 the duration of the program, at not more than
10 $100,000,000.
11 (B) OTHER EXCEPTIONS.--The Secretary
12 shall establish an exception to the requirements
13 of this subsection and appropriate alternative
14 requirements for any participating financial in-
15 stitution that is legally prohibited from issuing
16 securities and debt instruments, so as not to
17 allow circumvention of the requirements of this
18 section.
19 SEC. 114. MARKET TRANSPARENCY.
20 (a) PRICING.--To facilitate market transparency, the
21 Secretary shall make available to the public, in electronic
22 form, a description, amounts, and pricing of assets ac-
23 quired under this Act, within 2 business days of purchase,
24 trade, or other disposition.
40
1 (b) DISCLOSURE.--For each type of financial institu-
2 tions that sells troubled assets to the Secretary under this
3 Act, the Secretary shall determine whether the public dis-
4 closure required for such financial institutions with re-
5 spect to off-balance sheet transactions, derivatives instru-
6 ments, contingent liabilities, and similar sources of poten-
7 tial exposure is adequate to provide to the public sufficient
8 information as to the true financial position of the institu-
9 tions. If such disclosure is not adequate for that purpose,
10 the Secretary shall make recommendations for additional
11 disclosure requirements to the relevant regulators.
12 SEC. 115. GRADUATED AUTHORIZATION TO PURCHASE.
13 (a) AUTHORITY.--The authority of the Secretary to
14 purchase troubled assets under this Act shall be limited
15 as follows:
16 (1) Effective upon the date of enactment of this
17 Act, such authority shall be limited to
18 $250,000,000,000 outstanding at any one time.
19 (2) If at any time, the President submits to the
20 Congress a written certification that the Secretary
21 needs to exercise the authority under this paragraph,
22 effective upon such submission, such authority shall
23 be limited to $350,000,000,000 outstanding at any
24 one time.
41
1 (3) If, at any time after the certification in
2 paragraph (2) has been made, the President trans-
3 mits to the Congress a written report detailing the
4 plan of the Secretary to exercise the authority under
5 this paragraph, unless there is enacted, within 15
6 calendar days of such transmission, a joint resolu-
7 tion described in subsection (c), effective upon the
8 expiration of such 15-day period, such authority
9 shall be limited to $700,000,000,000 outstanding at
10 any one time.
11 (b) AGGREGATION OF PURCHASE PRICES.--The
12 amount of troubled assets purchased by the Secretary out-
13 standing at any one time shall be determined for purposes
14 of the dollar amount limitations under subsection (a) by
15 aggregating the purchase prices of all troubled assets held.
16 (c) JOINT RESOLUTION OF DISAPPROVAL.--
17 (1) IN GENERAL.--Notwithstanding any other
18 provision of this section, the Secretary may not exer-
19 cise any authority to make purchases under this Act
20 with regard to any amount in excess of
21 $350,000,000,000 previously obligated, as described
22 in this section if, within 15 calendar days after the
23 date on which Congress receives a report of the plan
24 of the Secretary described in subsection (a)(3), there
25 is enacted into law a joint resolution disapproving
42
1 the plan of the Secretary with respect to such addi-
2 tional amount.
3 (2) CONTENTS OF JOINT RESOLUTION.--For
4 the purpose of this section, the term ``joint resolu-
5 tion'' means only a joint resolution--
6 (A) that is introduced not later than 3 cal-
7 endar days after the date on which the report
8 of the plan of the Secretary referred to in sub-
9 section (a)(3) is received by Congress;
10 (B) which does not have a preamble;
11 (C) the title of which is as follows: ``Joint
12 resolution relating to the disapproval of obliga-
13 tions under the Emergency Economic Stabiliza-
14 tion Act of 2008''; and
15 (D) the matter after the resolving clause of
16 which is as follows: ``That Congress disapproves
17 the obligation of any amount exceeding the
18 amounts obligated as described in paragraphs
19 (1) and (2) of section 115(a) of the Emergency
20 Economic Stabilization Act of 2008.''.
21 (d) FAST TRACK CONSIDERATION IN HOUSE OF REP-
22 RESENTATIVES.--
23 (1) RECONVENING.--Upon receipt of a report
24 under subsection (a)(3), the Speaker, if the House
25 would otherwise be adjourned, shall notify the Mem-
43
1 bers of the House that, pursuant to this section, the
2 House shall convene not later than the second cal-
3 endar day after receipt of such report;
4 (2) REPORTING AND DISCHARGE.--Any com-
5 mittee of the House of Representatives to which a
6 joint resolution is referred shall report it to the
7 House not later than 5 calendar days after the date
8 of receipt of the report described in subsection
9 (a)(3). If a committee fails to report the joint resolu-
10 tion within that period, the committee shall be dis-
11 charged from further consideration of the joint reso-
12 lution and the joint resolution shall be referred to
13 the appropriate calendar.
14 (3) PROCEEDING TO CONSIDERATION.--After
15 each committee authorized to consider a joint resolu-
16 tion reports it to the House or has been discharged
17 from its consideration, it shall be in order, not later
18 than the sixth day after Congress receives the report
19 described in subsection (a)(3), to move to proceed to
20 consider the joint resolution in the House. All points
21 of order against the motion are waived. Such a mo-
22 tion shall not be in order after the House has dis-
23 posed of a motion to proceed on the joint resolution.
24 The previous question shall be considered as ordered
25 on the motion to its adoption without intervening
44
1 motion. The motion shall not be debatable. A motion
2 to reconsider the vote by which the motion is dis-
3 posed of shall not be in order.
4 (4) CONSIDERATION.--The joint resolution
5 shall be considered as read. All points of order
6 against the joint resolution and against its consider-
7 ation are waived. The previous question shall be con-
8 sidered as ordered on the joint resolution to its pas-
9 sage without intervening motion except two hours of
10 debate equally divided and controlled by the pro-
11 ponent and an opponent. A motion to reconsider the
12 vote on passage of the joint resolution shall not be
13 in order.
14 (e) FAST TRACK CONSIDERATION IN SENATE.--
15 (1) RECONVENING.--Upon receipt of a report
16 under subsection (a)(3), if the Senate has adjourned
17 or recessed for more than 2 days, the majority lead-
18 er of the Senate, after consultation with the minority
19 leader of the Senate, shall notify the Members of the
20 Senate that, pursuant to this section, the Senate
21 shall convene not later than the second calendar day
22 after receipt of such message.
23 (2) PLACEMENT ON CALENDAR.--Upon intro-
24 duction in the Senate, the joint resolution shall be
25 placed immediately on the calendar.
45
1 (3) FLOOR CONSIDERATION.--
2 (A) IN GENERAL.--Notwithstanding Rule
3 XXII of the Standing Rules of the Senate, it is
4 in order at any time during the period begin-
5 ning on the 4th day after the date on which
6 Congress receives a report of the plan of the
7 Secretary described in subsection (a)(3) and
8 ending on the 6th day after the date on which
9 Congress receives a report of the plan of the
10 Secretary described in subsection (a)(3) (even
11 though a previous motion to the same effect has
12 been disagreed to) to move to proceed to the
13 consideration of the joint resolution, and all
14 points of order against the joint resolution (and
15 against consideration of the joint resolution)
16 are waived. The motion to proceed is not debat-
17 able. The motion is not subject to a motion to
18 postpone. A motion to reconsider the vote by
19 which the motion is agreed to or disagreed to
20 shall not be in order. If a motion to proceed to
21 the consideration of the resolution is agreed to,
22 the joint resolution shall remain the unfinished
23 business until disposed of.
24 (B) DEBATE.--Debate on the joint resolu-
25 tion, and on all debatable motions and appeals
46
1 in connection therewith, shall be limited to not
2 more than 10 hours, which shall be divided
3 equally between the majority and minority lead-
4 ers or their designees. A motion further to limit
5 debate is in order and not debatable. An
6 amendment to, or a motion to postpone, or a
7 motion to proceed to the consideration of other
8 business, or a motion to recommit the joint res-
9 olution is not in order.
10 (C) VOTE ON PASSAGE.--The vote on pas-
11 sage shall occur immediately following the con-
12 clusion of the debate on a joint resolution, and
13 a single quorum call at the conclusion of the de-
14 bate if requested in accordance with the rules of
15 the Senate.
16 (D) RULINGS OF THE CHAIR ON PROCE-
17 DURE.--Appeals from the decisions of the Chair
18 relating to the application of the rules of the
19 Senate, as the case may be, to the procedure re-
20 lating to a joint resolution shall be decided
21 without debate.
22 (f) RULES RELATING TO SENATE AND HOUSE OF
23 REPRESENTATIVES.--
24 (1) COORDINATION WITH ACTION BY OTHER
25 HOUSE.--If, before the passage by one House of a
47
1 joint resolution of that House, that House receives
2 from the other House a joint resolution, then the fol-
3 lowing procedures shall apply:
4 (A) The joint resolution of the other House
5 shall not be referred to a committee.
6 (B) With respect to a joint resolution of
7 the House receiving the resolution--
8 (i) the procedure in that House shall
9 be the same as if no joint resolution had
10 been received from the other House; but
11 (ii) the vote on passage shall be on
12 the joint resolution of the other House.
13 (2) TREATMENT OF JOINT RESOLUTION OF
14 OTHER HOUSE.--If one House fails to introduce or
15 consider a joint resolution under this section, the
16 joint resolution of the other House shall be entitled
17 to expedited floor procedures under this section.
18 (3) TREATMENT OF COMPANION MEASURES.--
19 If, following passage of the joint resolution in the
20 Senate, the Senate then receives the companion
21 measure from the House of Representatives, the
22 companion measure shall not be debatable.
23 (4) CONSIDERATION AFTER PASSAGE.--
24 (A) IN GENERAL.--If Congress passes a
25 joint resolution, the period beginning on the
48
1 date the President is presented with the joint
2 resolution and ending on the date the President
3 takes action with respect to the joint resolution
4 shall be disregarded in computing the 15-cal-
5 endar day period described in subsection (a)(3).
6 (B) VETOES.--If the President vetoes the
7 joint resolution--
8 (i) the period beginning on the date
9 the President vetoes the joint resolution
10 and ending on the date the Congress re-
11 ceives the veto message with respect to the
12 joint resolution shall be disregarded in
13 computing the 15-calendar day period de-
14 scribed in subsection (a)(3), and
15 (ii) debate on a veto message in the
16 Senate under this section shall be 1 hour
17 equally divided between the majority and
18 minority leaders or their designees.
19 (5) RULES OF HOUSE OF REPRESENTATIVES
20 AND SENATE.--This subsection and subsections (c),
21 (d), and (e) are enacted by Congress--
22 (A) as an exercise of the rulemaking power
23 of the Senate and House of Representatives, re-
24 spectively, and as such it is deemed a part of
25 the rules of each House, respectively, but appli-
49
1 cable only with respect to the procedure to be
2 followed in that House in the case of a joint
3 resolution, and it supersedes other rules only to
4 the extent that it is inconsistent with such
5 rules; and
6 (B) with full recognition of the constitu-
7 tional right of either House to change the rules
8 (so far as relating to the procedure of that
9 House) at any time, in the same manner, and
10 to the same extent as in the case of any other
11 rule of that House.
12 SEC. 116. OVERSIGHT AND AUDITS.
13 (a) COMPTROLLER GENERAL OVERSIGHT.--
14 (1) SCOPE OF OVERSIGHT.--The Comptroller
15 General of the United States shall, upon establish-
16 ment of the troubled assets relief program under
17 this Act (in this section referred to as the ``TARP''),
18 commence ongoing oversight of the activities and
19 performance of the TARP and of any agents and
20 representatives of the TARP (as related to the agent
21 or representative's activities on behalf of or under
22 the authority of the TARP), including vehicles es-
23 tablished by the Secretary under this Act. The sub-
24 jects of such oversight shall include the following:
50
1 (A) The performance of the TARP in
2 meeting the purposes of this Act, particularly
3 those involving--
4 (i) foreclosure mitigation;
5 (ii) cost reduction;
6 (iii) whether it has provided stability
7 or prevented disruption to the financial
8 markets or the banking system; and
9 (iv) whether it has protected tax-
10 payers.
11 (B) The financial condition and internal
12 controls of the TARP, its representatives and
13 agents.
14 (C) Characteristics of transactions and
15 commitments entered into, including trans-
16 action type, frequency, size, prices paid, and all
17 other relevant terms and conditions, and the
18 timing, duration and terms of any future com-
19 mitments to purchase assets.
20 (D) Characteristics and disposition of ac-
21 quired assets, including type, acquisition price,
22 current market value, sale prices and terms,
23 and use of proceeds from sales.
24 (E) Efficiency of the operations of the
25 TARP in the use of appropriated funds.
51
1 (F) Compliance with all applicable laws
2 and regulations by the TARP, its agents and
3 representatives.
4 (G) The efforts of the TARP to prevent,
5 identify, and minimize conflicts of interest in-
6 volving any agent or representative performing
7 activities on behalf of or under the authority of
8 the TARP.
9 (H) The efficacy of contracting procedures
10 pursuant to section 107(b), including, as appli-
11 cable, the efforts of the TARP in evaluating
12 proposals for inclusion and contracting to the
13 maximum extent possible of minorities (as such
14 term is defined in 1204(c) of the Financial In-
15 stitutions Reform, Recovery, and Enhancement
16 Act of 1989 (12 U.S.C. 1811 note), women,
17 and minority- and women-owned businesses, in-
18 cluding ascertaining and reporting the total
19 amount of fees paid and other value delivered
20 by the TARP to all of its agents and represent-
21 atives, and such amounts paid or delivered to
22 such firms that are minority- and women-owned
23 businesses (as such terms are defined in section
24 21A of the Federal Home Loan Bank Act (12
25 U.S.C. 1441a)).
52
1 (2) CONDUCT AND ADMINISTRATION OF OVER-
2 SIGHT.--
3 (A) GAO PRESENCE.--The Secretary shall
4 provide the Comptroller General with appro-
5 priate space and facilities in the Department of
6 the Treasury as necessary to facilitate oversight
7 of the TARP until the termination date estab-
8 lished in section 120.
9 (B) ACCESS TO RECORDS.--To the extent
10 otherwise consistent with law, the Comptroller
11 General shall have access, upon request, to any
12 information, data, schedules, books, accounts,
13 financial records, reports, files, electronic com-
14 munications, or other papers, things, or prop-
15 erty belonging to or in use by the TARP, or
16 any vehicles established by the Secretary under
17 this Act, and to the officers, directors, employ-
18 ees, independent public accountants, financial
19 advisors, and other agents and representatives
20 of the TARP (as related to the agent or rep-
21 resentative's activities on behalf of or under the
22 authority of the TARP) or any such vehicle at
23 such reasonable time as the Comptroller Gen-
24 eral may request. The Comptroller General
25 shall be afforded full facilities for verifying
53
1 transactions with the balances or securities held
2 by depositaries, fiscal agents, and custodians.
3 The Comptroller General may make and retain
4 copies of such books, accounts, and other
5 records as the Comptroller General deems ap-
6 propriate.
7 (C) REIMBURSEMENT OF COSTS.--The
8 Treasury shall reimburse the Government Ac-
9 countability Office for the full cost of any such
10 oversight activities as billed therefor by the
11 Comptroller General of the United States. Such
12 reimbursements shall be credited to the appro-
13 priation account ``Salaries and Expenses, Gov-
14 ernment Accountability Office'' current when
15 the payment is received and remain available
16 until expended.
17 (3) REPORTING.--The Comptroller General
18 shall submit reports of findings under this section,
19 regularly and no less frequently than once every 60
20 days, to the appropriate committees of Congress,
21 and the Special Inspector General for the Troubled
22 Asset Relief Program established under this Act on
23 the activities and performance of the TARP. The
24 Comptroller may also submit special reports under
54
1 this subsection as warranted by the findings of its
2 oversight activities.
3 (b) COMPTROLLER GENERAL AUDITS.--
4 (1) ANNUAL AUDIT.--The TARP shall annually
5 prepare and issue to the appropriate committees of
6 Congress and the public audited financial statements
7 prepared in accordance with generally accepted ac-
8 counting principles, and the Comptroller General
9 shall annually audit such statements in accordance
10 with generally accepted auditing standards. The
11 Treasury shall reimburse the Government Account-
12 ability Office for the full cost of any such audit as
13 billed therefor by the Comptroller General. Such re-
14 imbursements shall be credited to the appropriation
15 account ``Salaries and Expenses, Government Ac-
16 countability Office'' current when the payment is re-
17 ceived and remain available until expended. The fi-
18 nancial statements prepared under this paragraph
19 shall be on the fiscal year basis prescribed under
20 section 1102 of title 31, United States Code.
21 (2) AUTHORITY.--The Comptroller General
22 may audit the programs, activities, receipts, expendi-
23 tures, and financial transactions of the TARP and
24 any agents and representatives of the TARP (as re-
25 lated to the agent or representative's activities on
55
1 behalf of or under the authority of the TARP), in-
2 cluding vehicles established by the Secretary under
3 this Act.
4 (3) CORRECTIVE RESPONSES TO AUDIT PROB-
5 LEMS.--The TARP shall--
6 (A) take action to address deficiencies
7 identified by the Comptroller General or other
8 auditor engaged by the TARP; or
9 (B) certify to appropriate committees of
10 Congress that no action is necessary or appro-
11 priate.
12 (c) INTERNAL CONTROL.--
13 (1) ESTABLISHMENT.--The TARP shall estab-
14 lish and maintain an effective system of internal
15 control, consistent with the standards prescribed
16 under section 3512(c) of title 31, United States
17 Code, that provides reasonable assurance of--
18 (A) the effectiveness and efficiency of oper-
19 ations, including the use of the resources of the
20 TARP;
21 (B) the reliability of financial reporting, in-
22 cluding financial statements and other reports
23 for internal and external use; and
24 (C) compliance with applicable laws and
25 regulations.
56
1 (2) REPORTING.--In conjunction with each an-
2 nual financial statement issued under this section,
3 the TARP shall--
4 (A) state the responsibility of management
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