S AMDT 1280

S 1280 IS

To authorize the Secretary of the Treasury to delegate management authority over troubled assets purchased under the Troubled Asset Relief Program, to require the establishment of a trust to manage assets of certain designated TARP recipients, and for other purposes.

June 17, 2009

Mr. CORKER (for himself, Mr. WARNER, and Mr. BENNETT) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

To authorize the Secretary of the Treasury to delegate management authority over troubled assets purchased under the Troubled Asset Relief Program, to require the establishment of a trust to manage assets of certain designated TARP recipients, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘TARP Recipient Ownership Trust Act of 2009’.

SEC. 2. AUTHORITY OF THE SECRETARY OF THE TREASURY TO DELEGATE TARP ASSET MANAGEMENT.

Section 106(b) of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5216(b)) is amended by inserting before the period at the end the following: ‘, and the Secretary may delegate such management authority to a private entity, as the Secretary determines appropriate, with respect to any entity assisted under this Act’.

SEC. 3. CREATION OF MANAGEMENT AUTHORITY FOR DESIGNATED TARP RECIPIENTS.

(a) Federal Assistance Limited- Notwithstanding any provision of the Emergency Economic Stabilization Act of 2008, or any other provision of law, no funds may be expended under the Troubled Asset Relief Program, or any other provision of that Act, on or after the date of enactment of this Act, until the Secretary of the Treasury transfers all voting, nonvoting, and common equity in any designated TARP recipient to a limited liability company established by the Secretary for such purpose, to be held and managed in trust on behalf of the United States taxpayers.

(b) Appointment of Trustees-

(1) IN GENERAL- The President shall appoint 3 independent trustees to manage the equity held in the trust, separate and apart from the United States Government.

(2) CRITERIA- Trustees appointed under this subsection--

(A) may not be elected or appointed Government officials;

(B) shall serve at the pleasure of the President, and may be removed for just cause in violation of their fiduciary responsibilities only; and

(C) shall serve without compensation for their services under this section.

(c) Duties of Trust- Pursuant to protecting the interests and investment of the United States taxpayer, the trust established under this section shall, with the purpose of maximizing the profitability of the designated TARP recipient--

(1) exercise the voting rights of the shares of the taxpayer on all core governance issues;

(2) select the representation on the boards of directors of any designated TARP recipient; and

(3) have a fiduciary duty to the American taxpayer for the maximization of the return on the investment of the taxpayer made under the Emergency Economic Stabilization Act of 2008, in the same manner and to the same extent that any director of an issuer of securities has with respect to its shareholders under the securities laws and all applications of State law.

(d) Liquidation- The trustees shall liquidate the trust established under this section, including the assets held by such trust, not later than December 24, 2011, unless the trustees submit a report to Congress that liquidation would not maximize the profitability of the company and the return on investment to the taxpayer.

SEC. 4. DEFINITIONS.

As used in this Act--

(1) the term ‘designated TARP recipient’ means any entity that has received, or will receive, financial assistance under the Troubled Asset Relief Program or any other provision of the Emergency Economic Stabilization Act of 2008 (Public Law 110-343), such that the Federal Government holds or controls, or will hold or control at a future date, not less than a 20 percent ownership stake in the company as a result of such assistance;

(2) the term ‘Secretary’ means the Secretary of the Treasury or the designee of the Secretary; and

(3) the terms ‘director’, ‘issuer’, ‘securities’, and ‘securities laws’ have the same meanings as in section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c).