Earlier this week, the U.S. Treasury Department and the Federal Reserve Bank jointly announced a Public-Private Investment Program (Program). Pursuant to the Program, Treasury will co-invest in whole loans sold at auction by banks insured by the Federal Deposit Insurance Corporation (FDIC), and the FDIC will facilitate purchase money financing through a loan guarantee program. The Program is described in greater detail here.

Yesterday, the FDIC held a conference call for bankers to provide an overview of the Program and to respond to initial questions and comments about the Program. FDIC Chairman Sheila Bair emphasized the FDIC’s desire for transparency in implementing the Program. She encouraged the public to submit comments during the next two weeks in response to questions posted by the FDIC on its Web site in order to get the Program up and running as soon as possible.

Read the full alert here.

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On March 20, 2009, President Obama issued a memorandum to all heads of executive departments and agencies on the subject of communications with executive branch officials regarding funds available under the American Recovery and Reinvestment Act of 2009 (the “Recovery Act” or “Act”).

The Recovery Act, signed into law in February 2009, is a stimulus bill meant to create jobs and stimulate the economy through infrastructure, energy, education, health care and other such projects. The memorandum requires executive departments and agencies to develop transparent, merit-based selection criteria to be used in committing, obligating or expending funds under the Recovery Act for grants and other forms of federal financial assistance. The criteria should take into account a demonstrated or potential ability to (1) deliver programmatic results, (2) achieve economic stimulus by optimizing economic activity and the number of jobs created or saved in relation to the federal dollars obligated, (3) achieve long-term public benefits and (4) satisfy the Recovery Act’s transparency and accountability objectives.

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The Public-Private Investment Program (PPIP) is the new program established jointly by the U.S. Treasury Department, the U.S. Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) to provide financing for the purchase by private investors of (i) whole loans and other assets held by depository institutions and (ii) certain residential and commercial mortgage-backed securities issued before 2009 that were originally rated “AAA.” The PPIP is comprised of two parts: a Legacy Loan Program and a Legacy Securities Program. This alert discusses both of these programs, as well as certain tax consequences in connection with the Legacy Loan Program.

The Treasury has proposed to make available to the PPIP $75 to $100 billion from Troubled Asset Relief Program (TARP) funds, with the goal of generating between $500 billion to $1 trillion in purchases of these legacy assets. Although the Treasury and the FDIC recognize the urgency of implementing the PPIP, some time will be required for the FDIC to propose guidelines and/or regulations, including a period for public comment, before sales of loans and securities may begin.

Read the full text of the alert here.

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The $787 billion economic stimulus bill, the American Recovery and Reinvestment Act of 2009 (”Recovery Act” or the “Act”), was enacted by President Obama on February 17th after a fractious and largely party-line debate in Congress. The law contains $7.2 billion of new spending on broadband infrastructure deployment and related broadband matters, of which $4.7 billion will be administered by the National Telecommunications and Information Administration (NTIA) and $2.5 billion will be administered by the Rural Utility Service (RUS), a division of the U.S. Department of Agriculture (USDA).

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If you would like assistance to participate in the NTIA and/or RUS rulemaking process or to develop projects appropriate for funding, please contact—

The American Recovery and Reinvestment Act of 2009 (Recovery Act) presents tremendous opportunities for tribal governments and Indian families, but at the same time, it includes many specific requirements and compliance issues that tribes and Indian families need to understand.

Bond Programs

The Recovery Act includes a provision that expands a tribal government’s ability to issue tax-exempt bonds and creates a new tax credit bond program relative to the construction of Indian schools. It also includes other provisions relevant to tribes-Build America bonds, clean renewable energy bonds and qualified energy conservation bonds.

For more information on the bond programs available, please click here.

Housing Projects

The Recovery Act makes available a total of $640 million in formula and competitive grants to tribal governments for housing projects, and provides approximately $11.5 billion in direct and unsubsidized loans to low-income families in rural areas, which includes Indian families. Funding opportunities for housing projects for tribal governments and Indian families are available under programs administered by the Department of Housing and Urban Development (HUD), the Department of Interior (DOI) and the Department of Agriculture (USDA).

To read a summary of the housing-related funding opportunities available, please click here.

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The American Recovery and Reinvestment Act of 2009 (“the Recovery Act” or the “Act”) will result in massive new federal spending, much of it through grants, contracts and procurement. As always, with federal money there are strings attached. Indeed, the Act directs more than $350 million to oversight of stimulus funding and programs and creates a new federal oversight board with broad subpoena powers. Combined with legislation passed last fall to enhance the authority of Offices of Inspector General (OIGs), these provisions mean that companies receiving stimulus funds will be under more scrutiny by the federal government and especially OIGs.

Read the full alert here.

The inspectors general investigations practice team is developing a regular digest of key OIG oversight and investigative activity. If you would be interested in receiving this publication, please contact Gary Thompson. For further information on our inspectors general investigations practice, please contact—

The Term Asset-Backed Securities Loan Facility (TALF) is a new government program established jointly by the Board of Governors of the Federal Reserve and the U.S. Treasury Department to increase credit availability in the market. Under TALF, U.S. entities, including most funds organized and managed in the United States that invest in securitized consumer loans will be able to borrow from the Federal Reserve Bank of New York (the “New York Fed”), based on the value of the asset-backed securities (ABS) collateral, at low interest rates subject to a limited collateral haircut.

According to a joint press release and other publications on March 3, 2009 by the Board and the Treasury, the New York Fed will make up to $200 billion in fully secured loans under TALF, with the first loans settling on March 25, 2009 based on subscriptions received by March 17, 2009. Subsequent subscriptions will be scheduled on the first Tuesday of each month. TALF will cease making new loans on December 31, 2009, unless extended by the Board.

Despite previous announcements to the contrary, TALF sponsors, underwriters and borrowers will not be subject to executive compensation limits as a result of their participation in TALF, in order to maximize the effect of TALF on the credit markets.

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Not since World War II has the federal government sought to spend so much money in so little time, with such a sense of urgency. The American Recovery and Reinvestment Act of 2009 (the “Recovery Act” or the “Act”) presents tremendous opportunities for companies involved in infrastructure, including engineering, construction and supply contractors. At the same time, the sprawling Act includes many specific requirements and compliance risks that companies need to understand. There are also many downstream oversight and enforcement risks associated with the funds provided by the Recovery Act. We have identified and summarized the most important opportunities and risks.

Section I: Opportunities

Section I is a table that provides a summary of the principal sections of the Act that provide funding for infrastructure and construction projects. We identify the amounts available, the method by which the funds are to be disseminated and the purposes for which the funds are intended. This table is intended as a useful guide to the Act, not an exhaustive summary.

Section II: Restrictions and Compliance Issues

Section II identifies and analyzes provisions in the Act that restrict uses of the funds, including the controversial Buy American provision, award preferences and environmental requirements. We also identify several compliance issues, including reporting requirements, and compliance program and mandatory disclosure provisions imposed by the Federal Acquisition Regulation.

Section III: Oversight and Enforcement Risks

Section III identifies and summarizes the risks that companies will face downstream after projects are awarded. These risks include inspector general audits, oversight by the newly constituted Recovery Accountability and Transparency Board, potential antitrust actions, lawsuits alleging fraud under the False Claims Act and congressional oversight and investigations.

Read the full report here.

On February 17, 2009, President Obama signed into law the American Recovery and Reinvestment Act of 2009 (the stimulus bill), a $787 billion emergency stimulus legislation containing substantial tax and spending provisions for the renewable energy industry. The stimulus bill’s renewable energy spending provisions include loan guarantees and grants for renewable energy projects and infrastructure. The stimulus bill substantially revises the tax code, extending the production tax credit deadline, offering flexibility to renewable projects to choose between a tax credit on production or investment, and establishing a program by which a renewable project developer may receive a grant in lieu of tax credits. Tax credits are also made available to manufacturers of clean technology equipment. This client alert provides an overview of the renewable energy spending and tax provisions.

Click here to read the full text of this alert.

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On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009 (Recovery Act), which includes provisions making major changes to the federal health information privacy and security regime established pursuant to the Health Insurance Portability and Accountability Act of 1996 (HIPAA). This legislation substantially broadens the scope and expands the reach of requirements concerning the privacy and security of health information. These changes will have a major impact on many health sector participants, including individuals and entities currently treated as “Covered Entities” (defined as including certain health care providers, as well as health plans and health care clearinghouses) and the “Business Associates” that perform functions or services on their behalf.

Read the full alert here.

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