TARP REFORM AND ACCOUNTABILITY ACT OF 2009; Congressional Record Vol. 155, No. 13
(Extensions of Remarks - January 22, 2009)

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[Extensions of Remarks]
[Page E122]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                               speech of

                         HON. HOWARD L. BERMAN

                             of california

                    in the house of representatives

                       Thursday, January 15, 2009

       The House in Committee of the Whole House on the State of 
     the Union had under consideration the bill (H.R. 384) to 
     reform the Troubled Assets Relief Program of the Secretary of 
     the Treasury and ensure accountability under such Program, 
     and for other purposes:

  Mr. BERMAN. Mr. Chair, I thank Chairman Frank for introducing H.R. 
384, the TARP Reform and Accountability Act of 2009, and I join in 
support of this legislation that is aimed at bringing liquidity back to 
our capital markets and enhancing oversight of the Troubled Asset 
Relief Program.
  I particularly want to draw attention to Section 402 of the Act, 
which provides important support to the struggling municipal bond 
market from those TARP funds already released. I thank the chairman for 
including this provision, which is intended not only to address 
municipal offerings, but also to include qualified 501(c)(3) bonds as 
described in Section 145 of the Internal Revenue Code. These important 
offerings have also been impacted by the liquidity crisis over the past 
several months.
  More specifically, the tightening of credit in our financial markets 
has greatly affected the 501(c)(3)/non-profit bond market and the many 
non-profit organizations that rely on these bonds' issuance to carry 
out their charitable missions. Non-profit organizations provide a much 
needed back-stop to government programs and ensure that many of the 
Nation's most vulnerable citizens receive basic needs such as food, 
shelter, or drug rehabilitation. Without access to sufficient, 
affordable lines of credit, many charitable programs go unrealized. 
Particularly now, that cannot be allowed to happen.
  This new legislation should alleviate this problem and increase 
liquidity in the bond market, as it makes clear that 501(c)(3) bonds, 
as defined by Section 145 of the Internal Revenue Code, are considered 
``municipal securities.'' It is further my understanding that the 
support offered by Section 402 of the Act is not a ``federal 
guarantee'' under section 149 of the Internal Revenue Code, so that the 
legislative direction and solutions offered in today's bill will be 
available to the non-profit agencies who rely upon these types of bonds 
for their important work.
  Furthermore, for new lending that is attributable to TARP investments 
and assistance, I encourage the secretary to clarify that 501(c)(3) 
bonds are eligible investments, and hold accountable those banks 
receiving funds to ensure that these not-for-profit organizations 
issuing bonds have access to affordable and competitive rates when 
seeking letters of credit to support their bond offerings. By holding 
financial institutions receiving TARP money accountable to use part of 
those funds to assist the non-profit sector, the secretary will help 
bring liquidity back to the non-profit bond market.