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Thursday, October 2, 2008, 3:00 AM H.R. 1424: Bailout Bill, Part 4
4 (2) in the heading for subsection (a), by strik-
5 ing ``INSURANCE LOGO.--'' and inserting ``REP-
6 RESENTATIONS OF DEPOSIT INSURANCE.--''.
7 SEC. 127. COOPERATION WITH THE FBI.
8 Any Federal financial regulatory agency shall cooper-
9 ate with the Federal Bureau of Investigation and other
10 law enforcement agencies investigating fraud, misrepre-
11 sentation, and malfeasance with respect to development,
12 advertising, and sale of financial products.
13 SEC. 128. ACCELERATION OF EFFECTIVE DATE.
14 Section 203 of the Financial Services Regulatory Re-
15 lief Act of 2006 (12 U.S.C. 461 note) is amended by strik-
16 ing ``October 1, 2011'' and inserting ``October 1, 2008''.
17 SEC. 129. DISCLOSURES ON EXERCISE OF LOAN AUTHOR-
18 ITY.
19 (a) IN GENERAL.--Not later than 7 days after the
20 date on which the Board exercises its authority under the
21 third paragraph of section 13 of the Federal Reserve Act
22 (12 U.S.C. 343; relating to discounts for individuals, part-
23 nerships, and corporations) the Board shall provide to the
24 Committee on Banking, Housing, and Urban Affairs of
85
1 the Senate and the Committee on Financial Services of
2 the House of Representatives a report which includes--
3 (1) the justification for exercising the authority;
4 and
5 (2) the specific terms of the actions of the
6 Board, including the size and duration of the lend-
7 ing, available information concerning the value of
8 any collateral held with respect to such a loan, the
9 recipient of warrants or any other potential equity in
10 exchange for the loan, and any expected cost to the
11 taxpayers for such exercise.
12 (b) PERIODIC UPDATES.--The Board shall provide
13 updates to the Committees specified in subsection (a) not
14 less frequently than once every 60 days while the subject
15 loan is outstanding, including--
16 (1) the status of the loan;
17 (2) the value of the collateral held by the Fed-
18 eral reserve bank which initiated the loan; and
19 (3) the projected cost to the taxpayers of the
20 loan.
21 (c) CONFIDENTIALITY.--The information submitted
22 to the Congress under this section may be kept confiden-
23 tial, upon the written request of the Chairman of the
24 Board, in which case it shall made available only to the
86
1 Chairpersons and Ranking Members of the Committees
2 described in subsection (a).
3 (d) APPLICABILITY.--The provisions of this section
4 shall be in force for all uses of the authority provided
5 under section 13 of the Federal Reserve Act occurring
6 during the period beginning on March 1, 2008 and ending
7 on the after the date of enactment of this Act, and reports
8 described in subsection (a) shall be required beginning not
9 later than 30 days after that date of enactment, with re-
10 spect to any such exercise of authority.
11 (e) SHARING OF INFORMATION.--Any reports re-
12 quired under this section shall also be submitted to the
13 Congressional Oversight Panel established under section
14 125.
15 SEC. 130. TECHNICAL CORRECTIONS.
16 (a) IN GENERAL.--Section 128(b)(2) of the Truth in
17 Lending Act (15 U.S.C. 1638(b)(2)), as amended by sec-
18 tion 2502 of the Mortgage Disclosure Improvement Act
19 of 2008 (Public Law 110-289), is amended--
20 (1) in subparagraph (A), by striking ``In the
21 case'' and inserting ``Except as provided in subpara-
22 graph (G), in the case''; and
23 (2) by amending subparagraph (G) to read as
24 follows:
87
1 ``(G)(i) In the case of an extension of cred-
2 it relating to a plan described in section
3 101(53D) of title 11, United States Code--
4 ``(I) the requirements of subpara-
5 graphs (A) through (E) shall not apply;
6 and
7 ``(II) a good faith estimate of the dis-
8 closures required under subsection (a) shall
9 be made in accordance with regulations of
10 the Board under section 121(c) before
11 such credit is extended, or shall be deliv-
12 ered or placed in the mail not later than
13 3 business days after the date on which
14 the creditor receives the written application
15 of the consumer for such credit, whichever
16 is earlier.
17 ``(ii) If a disclosure statement furnished
18 within 3 business days of the written applica-
19 tion (as provided under clause (i)(II)) contains
20 an annual percentage rate which is subse-
21 quently rendered inaccurate, within the mean-
22 ing of section 107(c), the creditor shall furnish
23 another disclosure statement at the time of set-
24 tlement or consummation of the transaction.''.
88
1 (b) EFFECTIVE DATE.--The amendments made by
2 subsection (a) shall take effect as if included in the
3 amendments made by section 2502 of the Mortgage Dis-
4 closure Improvement Act of 2008 (Public Law 110-289).
5 SEC. 131. EXCHANGE STABILIZATION FUND REIMBURSE-
6 MENT.
7 (a) REIMBURSEMENT.--The Secretary shall reim-
8 burse the Exchange Stabilization Fund established under
9 section 5302 of title 31, United States Code, for any funds
10 that are used for the Treasury Money Market Funds
11 Guaranty Program for the United States money market
12 mutual fund industry, from funds under this Act.
13 (b) LIMITS ON USE OF EXCHANGE STABILIZATION
14 FUND.--The Secretary is prohibited from using the Ex-
15 change Stabilization Fund for the establishment of any
16 future guaranty programs for the United States money
17 market mutual fund industry.
18 SEC. 132. AUTHORITY TO SUSPEND MARK-TO-MARKET AC-
19 COUNTING.
20 (a) AUTHORITY.--The Securities and Exchange Com-
21 mission shall have the authority under the securities laws
22 (as such term is defined in section 3(a)(47) of the Securi-
23 ties Exchange Act of 1934 (15 U.S.C. 78c(a)(47)) to sus-
24 pend, by rule, regulation, or order, the application of
25 Statement Number 157 of the Financial Accounting
89
1 Standards Board for any issuer (as such term is defined
2 in section 3(a)(8) of such Act) or with respect to any class
3 or category of transaction if the Commission determines
4 that is necessary or appropriate in the public interest and
5 is consistent with the protection of investors.
6 (b) SAVINGS PROVISION.--Nothing in subsection (a)
7 shall be construed to restrict or limit any authority of the
8 Securities and Exchange Commission under securities
9 laws as in effect on the date of enactment of this Act.
10 SEC. 133. STUDY ON MARK-TO-MARKET ACCOUNTING.
11 (a) STUDY.--The Securities and Exchange Commis-
12 sion, in consultation with the Board and the Secretary,
13 shall conduct a study on mark-to-market accounting
14 standards as provided in Statement Number 157 of the
15 Financial Accounting Standards Board, as such standards
16 are applicable to financial institutions, including deposi-
17 tory institutions. Such a study shall consider at a min-
18 imum--
19 (1) the effects of such accounting standards on
20 a financial institution's balance sheet;
21 (2) the impacts of such accounting on bank fail-
22 ures in 2008;
23 (3) the impact of such standards on the quality
24 of financial information available to investors;
90
1 (4) the process used by the Financial Account-
2 ing Standards Board in developing accounting
3 standards;
4 (5) the advisability and feasibility of modifica-
5 tions to such standards; and
6 (6) alternative accounting standards to those
7 provided in such Statement Number 157.
8 (b) REPORT.--The Securities and Exchange Commis-
9 sion shall submit to Congress a report of such study before
10 the end of the 90-day period beginning on the date of the
11 enactment of this Act containing the findings and deter-
12 minations of the Commission, including such administra-
13 tive and legislative recommendations as the Commission
14 determines appropriate.
15 SEC. 134. RECOUPMENT.
16 Upon the expiration of the 5-year period beginning
17 upon the date of the enactment of this Act, the Director
18 of the Office of Management and Budget, in consultation
19 with the Director of the Congressional Budget Office, shall
20 submit a report to the Congress on the net amount within
21 the Troubled Asset Relief Program under this Act. In any
22 case where there is a shortfall, the President shall submit
23 a legislative proposal that recoups from the financial in-
24 dustry an amount equal to the shortfall in order to ensure
91
1 that the Troubled Asset Relief Program does not add to
2 the deficit or national debt.
3 SEC. 135. PRESERVATION OF AUTHORITY.
4 With the exception of section 131, nothing in this Act
5 may be construed to limit the authority of the Secretary
6 or the Board under any other provision of law.
7 SEC. 136. TEMPORARY INCREASE IN DEPOSIT AND SHARE
8 INSURANCE COVERAGE.
9 (a) FEDERAL DEPOSIT INSURANCE ACT; TEM-
10 PORARY INCREASE IN DEPOSIT INSURANCE.--
11 (1) INCREASED AMOUNT.--Effective only dur-
12 ing the period beginning on the date of enactment
13 of this Act and ending on December 31, 2009, sec-
14 tion 11(a)(1)(E) of the Federal Deposit Insurance
15 Act (12 U.S.C. 1821(a)(1)(E)) shall apply with
16 ``$250,000'' substituted for ``$100,000''.
17 (2) TEMPORARY INCREASE NOT TO BE CONSID-
18 ERED FOR SETTING ASSESSMENTS.--The temporary
19 increase in the standard maximum deposit insurance
20 amount made under paragraph (1) shall not be
21 taken into account by the Board of Directors of the
22 Corporation for purposes of setting assessments
23 under section 7(b)(2) of the Federal Deposit Insur-
24 ance Act (12 U.S.C. 1817(b)(2)).
92
1 (3) BORROWING LIMITS TEMPORARILY LIFT-
2 ED.--During the period beginning on the date of en-
3 actment of this Act and ending on December 31,
4 2009, the Board of Directors of the Corporation
5 may request from the Secretary, and the Secretary
6 shall approve, a loan or loans in an amount or
7 amounts necessary to carry out this subsection,
8 without regard to the limitations on such borrowing
9 under section 14(a) and 15(c) of the Federal De-
10 posit Insurance Act (12 U.S.C. 1824(a), 1825(c)).
11 (b) FEDERAL CREDIT UNION ACT; TEMPORARY IN-
12 CREASE IN SHARE INSURANCE.--
13 (1) INCREASED AMOUNT.--Effective only dur-
14 ing the period beginning on the date of enactment
15 of this Act and ending on December 31, 2009, sec-
16 tion 207(k)(5) of the Federal Credit Union Act (12
17 U.S.C. 1787(k)(5)) shall apply with ``$250,000''
18 substituted for ``$100,000''.
19 (2) TEMPORARY INCREASE NOT TO BE CONSID-
20 ERED FOR SETTING INSURANCE PREMIUM
21 CHARGES.--The temporary increase in the standard
22 maximum share insurance amount made under para-
23 graph (1) shall not be taken into account by the Na-
24 tional Credit Union Administration Board for pur-
25 poses of setting insurance premium charges under
93
1 section 202(c)(2) of the Federal Credit Union Act
2 (12 U.S.C. 1782(c)(2)).
3 (3) BORROWING LIMITS TEMPORARILY LIFT-
4 ED.--During the period beginning on the date of en-
5 actment of this Act and ending on December 31,
6 2009, the National Credit Union Administration
7 Board may request from the Secretary, and the Sec-
8 retary shall approve, a loan or loans in an amount
9 or amounts necessary to carry out this subsection,
10 without regard to the limitations on such borrowing
11 under section 203(d)(1) of the Federal Credit Union
12 Act (12 U.S.C. 1783(d)(1)).
13 (c) NOT FOR USE IN INFLATION ADJUSTMENTS.--
14 The temporary increase in the standard maximum deposit
15 insurance amount made under this section shall not be
16 used to make any inflation adjustment under section
17 11(a)(1)(F) of the Federal Deposit Insurance Act (12
18 U.S.C. 1821(a)(1)(F)) for purposes of that Act or the
19 Federal Credit Union Act.
20 TITLE II--BUDGET-RELATED
21 PROVISIONS
22 SEC. 201. INFORMATION FOR CONGRESSIONAL SUPPORT
23 AGENCIES.
24 Upon request, and to the extent otherwise consistent
25 with law, all information used by the Secretary in connec-
94
1 tion with activities authorized under this Act (including
2 the records to which the Comptroller General is entitled
3 under this Act) shall be made available to congressional
4 support agencies (in accordance with their obligations to
5 support the Congress as set out in their authorizing stat-
6 utes) for the purposes of assisting the committees of Con-
7 gress with conducting oversight, monitoring, and analysis
8 of the activities authorized under this Act.
9 SEC. 202. REPORTS BY THE OFFICE OF MANAGEMENT AND
10 BUDGET AND THE CONGRESSIONAL BUDGET
11 OFFICE.
12 (a) REPORTS BY THE OFFICE OF MANAGEMENT AND
13 BUDGET.--Within 60 days of the first exercise of the au-
14 thority granted in section 101(a), but in no case later than
15 December 31, 2008, and semiannually thereafter, the Of-
16 fice of Management and Budget shall report to the Presi-
17 dent and the Congress--
18 (1) the estimate, notwithstanding section
19 502(5)(F) of the Federal Credit Reform Act of 1990
20 (2 U.S.C. 661a(5)(F)), as of the first business day
21 that is at least 30 days prior to the issuance of the
22 report, of the cost of the troubled assets, and guar-
23 antees of the troubled assets, determined in accord-
24 ance with section 123;
95
1 (2) the information used to derive the estimate,
2 including assets purchased or guaranteed, prices
3 paid, revenues received, the impact on the deficit
4 and debt, and a description of any outstanding com-
5 mitments to purchase troubled assets; and
6 (3) a detailed analysis of how the estimate has
7 changed from the previous report.
8 Beginning with the second report under subsection (a), the
9 Office of Management and Budget shall explain the dif-
10 ferences between the Congressional Budget Office esti-
11 mates delivered in accordance with subsection (b) and
12 prior Office of Management and Budget estimates.
13 (b) REPORTS BY THE CONGRESSIONAL BUDGET OF-
14 FICE.--Within 45 days of receipt by the Congress of each
15 report from the Office of Management and Budget under
16 subsection (a), the Congressional Budget Office shall re-
17 port to the Congress the Congressional Budget Office's
18 assessment of the report submitted by the Office of Man-
19 agement and Budget, including--
20 (1) the cost of the troubled assets and guaran-
21 tees of the troubled assets,
22 (2) the information and valuation methods used
23 to calculate such cost, and
24 (3) the impact on the deficit and the debt.
96
1 (c) FINANCIAL EXPERTISE.--In carrying out the du-
2 ties in this subsection or performing analyses of activities
3 under this Act, the Director of the Congressional Budget
4 Office may employ personnel and procure the services of
5 experts and consultants.
6 (d) AUTHORIZATION OF APPROPRIATIONS.--There
7 are authorized to be appropriated such sums as may be
8 necessary to produce reports required by this section.
9 SEC. 203. ANALYSIS IN PRESIDENT'S BUDGET.
10 (a) IN GENERAL.--Section 1105(a) of title 31,
11 United States Code, is amended by adding at the end the
12 following new paragraph:
13 ``(35) as supplementary materials, a separate
14 analysis of the budgetary effects for all prior fiscal
15 years, the current fiscal year, the fiscal year for
16 which the budget is submitted, and ensuing fiscal
17 years of the actions the Secretary of the Treasury
18 has taken or plans to take using any authority pro-
19 vided in the Emergency Economic Stabilization Act
20 of 2008, including--
21 ``(A) an estimate of the current value of all
22 assets purchased, sold, and guaranteed under
23 the authority provided in the Emergency Eco-
24 nomic Stabilization Act of 2008 using method-
25 ology required by the Federal Credit Reform
97
1 Act of 1990 (2 U.S.C. 661 et seq.) and section
2 123 of the Emergency Economic Stabilization
3 Act of 2008;
4 ``(B) an estimate of the deficit, the debt
5 held by the public, and the gross Federal debt
6 using methodology required by the Federal
7 Credit Reform Act of 1990 and section 123 of
8 the Emergency Economic Stabilization Act of
9 2008;
10 ``(C) an estimate of the current value of all
11 assets purchased, sold, and guaranteed under
12 the authority provided in the Emergency Eco-
13 nomic Stabilization Act of 2008 calculated on a
14 cash basis;
15 ``(D) a revised estimate of the deficit, the
16 debt held by the public, and the gross Federal
17 debt, substituting the cash-based estimates in
18 subparagraph (C) for the estimates calculated
19 under subparagraph (A) pursuant to the Fed-
20 eral Credit Reform Act of 1990 and section 123
21 of the Emergency Economic Stabilization Act of
22 2008; and
23 ``(E) the portion of the deficit which can
24 be attributed to any action taken by the Sec-
25 retary using authority provided by the Emer-
98
1 gency Economic Stabilization Act of 2008 and
2 the extent to which the change in the deficit
3 since the most recent estimate is due to a re-
4 estimate using the methodology required by the
5 Federal Credit Reform Act of 1990 and section
6 123 of the Emergency Economic Stabilization
7 Act of 2008.''
8 (b) CONSULTATION.--In implementing this section,
9 the Director of Office of Management and Budget shall
10 consult periodically, but at least annually, with the Com-
11 mittee on the Budget of the House of Representatives, the
12 Committee on the Budget of the Senate, and the Director
13 of the Congressional Budget Office.
14 (c) EFFECTIVE DATE.--This section and the amend-
15 ment made by this section shall apply beginning with re-
16 spect to the fiscal year 2010 budget submission of the
17 President.
18 SEC. 204. EMERGENCY TREATMENT.
19 All provisions of this Act are designated as an emer-
20 gency requirement and necessary to meet emergency needs
21 pursuant to section 204(a) of S. Con. Res 21 (110th Con-
22 gress), the concurrent resolution on the budget for fiscal
23 year 2008 and rescissions of any amounts provided in this
24 Act shall not be counted for purposes of budget enforce-
25 ment.
99
1 TITLE III--TAX PROVISIONS
2 SEC. 301. GAIN OR LOSS FROM SALE OR EXCHANGE OF
3 CERTAIN PREFERRED STOCK.
4 (a) IN GENERAL.--For purposes of the Internal Rev-
5 enue Code of 1986, gain or loss from the sale or exchange
6 of any applicable preferred stock by any applicable finan-
7 cial institution shall be treated as ordinary income or loss.
8 (b) APPLICABLE PREFERRED STOCK.--For purposes
9 of this section, the term ``applicable preferred stock''
10 means any stock--
11 (1) which is preferred stock in--
12 (A) the Federal National Mortgage Asso-
13 ciation, established pursuant to the Federal Na-
14 tional Mortgage Association Charter Act (12
15 U.S.C. 1716 et seq.), or
16 (B) the Federal Home Loan Mortgage
17 Corporation, established pursuant to the Fed-
18 eral Home Loan Mortgage Corporation Act (12
19 U.S.C. 1451 et seq.), and
20 (2) which--
21 (A) was held by the applicable financial in-
22 stitution on September 6, 2008, or
23 (B) was sold or exchanged by the applica-
24 ble financial institution on or after January 1,
25 2008, and before September 7, 2008.
100
1 (c) APPLICABLE FINANCIAL INSTITUTION.--For pur-
2 poses of this section:
3 (1) IN GENERAL.--Except as provided in para-
4 graph (2), the term ``applicable financial institution''
5 means--
6 (A) a financial institution referred to in
7 section 582(c)(2) of the Internal Revenue Code
8 of 1986, or
9 (B) a depository institution holding com-
10 pany (as defined in section 3(w)(1) of the Fed-
11 eral Deposit Insurance Act (12 U.S.C.
12 1813(w)(1))).
13 (2) SPECIAL RULES FOR CERTAIN SALES.--In
14 the case of--
15 (A) a sale or exchange described in sub-
16 section (b)(2)(B), an entity shall be treated as
17 an applicable financial institution only if it was
18 an entity described in subparagraph (A) or (B)
19 of paragraph (1) at the time of the sale or ex-
20 change, and
21 (B) a sale or exchange after September 6,
22 2008, of preferred stock described in subsection
23 (b)(2)(A), an entity shall be treated as an appli-
24 cable financial institution only if it was an enti-
25 ty described in subparagraph (A) or (B) of
101
1 paragraph (1) at all times during the period be-
2 ginning on September 6, 2008, and ending on
3 the date of the sale or exchange of the pre-
4 ferred stock.
5 (d) SPECIAL RULE FOR CERTAIN PROPERTY NOT
6 HELD ON SEPTEMBER 6, 2008.--The Secretary of the
7 Treasury or the Secretary's delegate may extend the appli-
8 cation of this section to all or a portion of the gain or
9 loss from a sale or exchange in any case where--
10 (1) an applicable financial institution sells or
11 exchanges applicable preferred stock after Sep-
12 tember 6, 2008, which the applicable financial insti-
13 tution did not hold on such date, but the basis of
14 which in the hands of the applicable financial insti-
15 tution at the time of the sale or exchange is the
16 same as the basis in the hands of the person which
17 held such stock on such date, or
18 (2) the applicable financial institution is a part-
19 ner in a partnership which--
20 (A) held such stock on September 6, 2008,
21 and later sold or exchanged such stock, or
22 (B) sold or exchanged such stock during
23 the period described in subsection (b)(2)(B).
24 (e) REGULATORY AUTHORITY.--The Secretary of the
25 Treasury or the Secretary's delegate may prescribe such
102
1 guidance, rules, or regulations as are necessary to carry
2 out the purposes of this section.
3 (f) EFFECTIVE DATE.--This section shall apply to
4 sales or exchanges occurring after December 31, 2007, in
5 taxable years ending after such date.
6 SEC. 302. SPECIAL RULES FOR TAX TREATMENT OF EXECU-
7 TIVE COMPENSATION OF EMPLOYERS PAR-
8 TICIPATING IN THE TROUBLED ASSETS RE-
9 LIEF PROGRAM.
10 (a) DENIAL OF DEDUCTION.--Subsection (m) of sec-
11 tion 162 of the Internal Revenue Code of 1986 is amended
12 by adding at the end the following new paragraph:
13 ``(5) SPECIAL RULE FOR APPLICATION TO EM-
14 PLOYERS PARTICIPATING IN THE TROUBLED ASSETS
15 RELIEF PROGRAM.--
16 ``(A) IN GENERAL.--In the case of an ap-
17 plicable employer, no deduction shall be allowed
18 under this chapter--
19 ``(i) in the case of executive remunera-
20 tion for any applicable taxable year which
21 is attributable to services performed by a
22 covered executive during such applicable
23 taxable year, to the extent that the amount
24 of such remuneration exceeds $500,000, or
103
1 ``(ii) in the case of deferred deduction
2 executive remuneration for any taxable
3 year for services performed during any ap-
4 plicable taxable year by a covered execu-
5 tive, to the extent that the amount of such
6 remuneration exceeds $500,000 reduced
7 (but not below zero) by the sum of--
8 ``(I) the executive remuneration
9 for such applicable taxable year, plus
10 ``(II) the portion of the deferred
11 deduction executive remuneration for
12 such services which was taken into ac-
13 count under this clause in a preceding
14 taxable year.
15 ``(B) APPLICABLE EMPLOYER.--For pur-
16 poses of this paragraph--
17 ``(i) IN GENERAL.--Except as pro-
18 vided in clause (ii), the term `applicable
19 employer' means any employer from whom
20 1 or more troubled assets are acquired
21 under a program established by the Sec-
22 retary under section 101(a) of the Emer-
23 gency Economic Stabilization Act of 2008
24 if the aggregate amount of the assets so
104
1 acquired for all taxable years exceeds
2 $300,000,000.
3 ``(ii) DISREGARD OF CERTAIN ASSETS
4 SOLD THROUGH DIRECT PURCHASE.--If
5 the only sales of troubled assets by an em-
6 ployer under the program described in
7 clause (i) are through 1 or more direct
8 purchases (within the meaning of section
9 113(c) of the Emergency Economic Sta-
10 bilization Act of 2008), such assets shall
11 not be taken into account under clause (i)
12 in determining whether the employer is an
13 applicable employer for purposes of this
14 paragraph.
15 ``(iii) AGGREGATION RULES.--Two or
16 more persons who are treated as a single
17 employer under subsection (b) or (c) of
18 section 414 shall be treated as a single em-
19 ployer, except that in applying section
20 1563(a) for purposes of either such sub-
21 section, paragraphs (2) and (3) thereof
22 shall be disregarded.
23 ``(C) APPLICABLE TAXABLE YEAR.--For
24 purposes of this paragraph, the term `applicable
105
1 taxable year' means, with respect to any em-
2 ployer--
3 ``(i) the first taxable year of the em-
4 ployer--
5 ``(I) which includes any portion
6 of the period during which the au-
7 thorities under section 101(a) of the
8 Emergency Economic Stabilization
9 Act of 2008 are in effect (determined
10 under section 120 thereof), and
11 ``(II) in which the aggregate
12 amount of troubled assets acquired
13 from the employer during the taxable
14 year pursuant to such authorities
15 (other than assets to which subpara-
16 graph (B)(ii) applies), when added to
17 the aggregate amount so acquired for
18 all preceding taxable years, exceeds
19 $300,000,000, and
20 ``(ii) any subsequent taxable year
21 which includes any portion of such period.
22 ``(D) COVERED EXECUTIVE.--For pur-
23 poses of this paragraph--
106
1 ``(i) IN GENERAL.--The term `covered
2 executive' means, with respect to any ap-
3 plicable taxable year, any employee--
4 ``(I) who, at any time during the
5 portion of the taxable year during
6 which the authorities under section
7 101(a) of the Emergency Economic
8 Stabilization Act of 2008 are in effect
9 (determined under section 120 there-
10 of), is the chief executive officer of the
11 applicable employer or the chief finan-
12 cial officer of the applicable employer,
13 or an individual acting in either such
14 capacity, or
15 ``(II) who is described in clause
16 (ii).
17 ``(ii) HIGHEST COMPENSATED EM-
18 PLOYEES.--An employee is described in
19 this clause if the employee is 1 of the 3
20 highest compensated officers of the appli-
21 cable employer for the taxable year (other
22 than an individual described in clause
23 (i)(I)), determined--
24 ``(I) on the basis of the share-
25 holder disclosure rules for compensa-
107
1 tion under the Securities Exchange
2 Act of 1934 (without regard to wheth-
3 er those rules apply to the employer),
4 and
5 ``(II) by only taking into account
6 employees employed during the por-
7 tion of the taxable year described in
8 clause (i)(I).
9 ``(iii) EMPLOYEE REMAINS COVERED
10 EXECUTIVE.--If an employee is a covered
11 executive with respect to an applicable em-
12 ployer for any applicable taxable year, such
13 employee shall be treated as a covered ex-
14 ecutive with respect to such employer for
15 all subsequent applicable taxable years and
16 for all subsequent taxable years in which
17 deferred deduction executive remuneration
18 with respect to services performed in all
19 such applicable taxable years would (but
20 for this paragraph) be deductible.
21 ``(E) EXECUTIVE REMUNERATION.--For
22 purposes of this paragraph, the term `executive
23 remuneration' means the applicable employee
24 remuneration of the covered executive, as deter-
25 mined under paragraph (4) without regard to
108
1 subparagraphs (B), (C), and (D) thereof. Such
2 term shall not include any deferred deduction
3 executive remuneration with respect to services
4 performed in a prior applicable taxable year.
5 ``(F) DEFERRED DEDUCTION EXECUTIVE
6 REMUNERATION.--For purposes of this para-
7 graph, the term `deferred deduction executive
8 remuneration' means remuneration which would
9 be executive remuneration for services per-
10 formed in an applicable taxable year but for the
11 fact that the deduction under this chapter (de-
12 termined without regard to this paragraph) for
13 such remuneration is allowable in a subsequent
14 taxable year.
15 ``(G) COORDINATION.--Rules similar to
16 the rules of subparagraphs (F) and (G) of para-
17 graph (4) shall apply for purposes of this para-
18 graph.
19 ``(H) REGULATORY AUTHORITY.--The Sec-
20 retary may prescribe such guidance, rules, or
21 regulations as are necessary to carry out the
22 purposes of this paragraph and the Emergency
23 Economic Stabilization Act of 2008, including
24 the extent to which this paragraph applies in
109
1 the case of any acquisition, merger, or reorga-
2 nization of an applicable employer.''.
3 (b) GOLDEN PARACHUTE RULE.--Section 280G of
4 the Internal Revenue Code of 1986 is amended--
5 (1) by redesignating subsection (e) as sub-
6 section (f), and
7 (2) by inserting after subsection (d) the fol-
8 lowing new subsection:
9 ``(e) SPECIAL RULE FOR APPLICATION TO EMPLOY-
10 ERS PARTICIPATING IN THE TROUBLED ASSETS RELIEF
11 PROGRAM.--
12 ``(1) IN GENERAL.--In the case of the sever-
13 ance from employment of a covered executive of an
14 applicable employer during the period during which
15 the authorities under section 101(a) of the Emer-
16 gency Economic Stabilization Act of 2008 are in ef-
17 fect (determined under section 120 of such Act), this
18 section shall be applied to payments to such execu-
19 tive with the following modifications:
20 ``(A) Any reference to a disqualified indi-
21 vidual (other than in subsection (c)) shall be
22 treated as a reference to a covered executive.
23 ``(B) Any reference to a change described
24 in subsection (b)(2)(A)(i) shall be treated as a
25 reference to an applicable severance from em-
110
1 ployment of a covered executive, and any ref-
2 erence to a payment contingent on such a
3 change shall be treated as a reference to any
4 payment made during an applicable taxable
5 year of the employer on account of such appli-
6 cable severance from employment.
7 ``(C) Any reference to a corporation shall
8 be treated as a reference to an applicable em-
9 ployer.
10 ``(D) The provisions of subsections
11 (b)(2)(C), (b)(4), (b)(5), and (d)(5) shall not
12 apply.
13 ``(2) DEFINITIONS AND SPECIAL RULES.--For
14 purposes of this subsection:
15 ``(A) DEFINITIONS.--Any term used in
16 this subsection which is also used in section
17 162(m)(5) shall have the meaning given such
18 term by such section.
19 ``(B) APPLICABLE SEVERANCE FROM EM-
20 PLOYMENT.--The term `applicable severance
21 from employment' means any severance from
22 employment of a covered executive--
23 ``(i) by reason of an involuntary ter-
24 mination of the executive by the employer,
25 or
111
1 ``(ii) in connection with any bank-
2 ruptcy, liquidation, or receivership of the
3 employer.
4 ``(C) COORDINATION AND OTHER
5 RULES.--
6 ``(i) IN GENERAL.--If a payment
7 which is treated as a parachute payment
8 by reason of this subsection is also a para-
9 chute payment determined without regard
10 to this subsection, this subsection shall not
11 apply to such payment.
12 ``(ii) REGULATORY AUTHORITY.--The
13 Secretary may prescribe such guidance,
14 rules, or regulations as are necessary--
15 ``(I) to carry out the purposes of
16 this subsection and the Emergency
17 Economic Stabilization Act of 2008,
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