[Congressional Record Volume 149, Number 133 (Thursday, September 25, 2003)]
[Senate]
[Pages S11990-S12003]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. CORZINE:
  S. 1656. A bill to address regulation of secondary mortgage market 
enterprises, and for other purposes; to the Committee on Banking, 
Housing, and Urban Affairs.
  Mr. CORZINE. Mr. President, I rise to introduce The Federal Housing 
Enterprise Oversight Modernization Act of 2003, legislation to 
establish a new, world-class regulator for our housing Government 
Sponsored Enterprises (GSEs)--Fannie Mae and Freddie Mac--as an agency 
within the Department of Treasury.
  There is no doubt that housing finance is essential to our economy 
and has been one of our Nation's few economic bright spots in recent 
years. Given its critical role, and the size and complex financial 
structures of the GSE's, which account for billions of mortgage-finance 
dollars, we need a credible, world-class regulator that can provide 
effective oversight.
  Regrettably, the current system of GSE supervision fails to meet that 
standard.
  This legislation has four primary objectives: establishing a new, 
independent regulator that is credible and capable; ensuring safe and 
sound capital; promoting market discipline and transparency through 
enhanced disclosures; and providing an incremental approach to 
ultimately consolidating supervision of the Federal Home Loan Banks 
under the regulatory framework contained in this legislation.
  The proposal also recognizes the importance of the GSEs' underlying 
housing mission and leaves responsibility for establishing the GSEs 
annual housing goals and overseeing their compliance with fair housing 
laws with the Department of Housing and Urban Development (HUD).
  The legislation would create a new agency, the Office of Federal 
Housing Enterprise Supervision (OFHES), as a bureau within the 
Department of the Treasury, with a structure similar to that of the 
Office of the Comptroller of the Currency (OCC) and the Office of 
Thrift Supervision (OTS).
  The agency would have general regulatory, supervisory and enforcement 
authority with respect to the enterprises, be independent of Treasury 
with regard to its comments and congressional testimony, and have a 
director, appointed for a five-year term, who would be given a seat on 
the Federal Financial Institutions Examination Council (FFIEC). To 
ensure that the enterprises' activities remain consistent with the 
scope of their charter, the agency would be authorized to approve all 
new enterprise programs, but in close consultation with HUD.
  Additionally, the agency would be given broad new authority to hire 
experienced personnel, a significant portion of whom will be designated 
specifically to carry out examinations and supervisory activities, to 
make certain that the agency can fulfill its safety and soundness 
responsibilities.
  Central to that oversight function is ensuring that the enterprises 
maintain safe and sound capital through vigorous, continuous 
monitoring. The legislation therefore requires the new agency to ensure 
that the enterprises remain in continuous compliance with their 
statutorily prescribed minimum capital holding requirements.
  By ensuring that the GSEs maintain adequate capital, we will mitigate 
the risks to the enterprises, and our financial markets, from 
unforeseen shocks that can, and do, occasionally occur in our financial 
markets. To accomplish this, the legislation takes a multi-pronged 
approach to the issue of risk-based capital.
  First, the legislation requires the new agency to continually monitor 
the risk-based capital held by the enterprises, but it also provides 
the new agency's director with the flexibility to adjust the risk-based 
capital level of the enterprises in order to ensure their safe and 
sound financial operation.
  The legislation also authorizes the new agency to conduct a 
comprehensive review of the enterprises' risk-based capital rule every 
five years. Part of the review would include a report to Congress 
entailing what, if any, proposed changes the new agency believes are 
needed to the risk-based capital rule to better align the capital held 
by the enterprises with risk, and reflect evolving best practices for 
risk-based capital standards for large, complex financial institutions. 
However, on a continual basis the Director would have the authority to 
adjust elements to the enterprises' stress test other than those 
specifically prescribed in the risk-based rule.
  With regard to the GSE non-mortgage related investments, this 
legislation affirms the notion that those investments should be of the 
highest quality and within the scope of the enterprises' respective 
charters. It does so by requiring the new agency to continuously 
monitor the appropriateness of the investments in the liquid and non-
liquid portfolios of the GSEs and by certifying that the liquidity 
management practices of the enterprises coinform with recommendations 
contained in the ``Sound Practices for Managing Liquidity in Banking 
Organizations'' established by the Basel Committee.
  The capital and liquidity management provisions of this legislation 
are balanced. They ensure that the enterprises maintain appropriate 
minimum capital and are adequately capitalized relative to their risks. 
They also empower the new agency to take appropriate action if 
enterprises become undercapitalized, and promote sound liquidity 
management practices. At the same time, the bill is not so overly 
prescriptive that it would undermine the

[[Page S11991]]

essential liquidity the enterprises' provide, which has enabled 
America's housing markets to become the envy of the world.
  The third element of this bill that should dramatically improve the 
GSE's regulatory framework promotes transparency through enhanced 
disclosures requirements.
  This legislation statutorily requires Fannie Mae, Freddie Mac and the 
Federal Home Loan Banks to disclose a variety of information that will 
provide the public, investors, and Congress with a better understanding 
of the underlying financial health of our housing enterprises.
  First, the legislation requires the GSEs to register their equities 
under the Securities Exchange Act of 1934, and to comply with SEC 
disclosure and reporting requirements contained under sections 12 
(Registration Requirements for Securities), 14 (Proxy Voting 
Information) and 16 (Insider Sales) of the 1934 Act.
  These disclosures are consistent with the highest standards of 
corporate governance and disclosure required of other public companies 
and in my mind there is no reason why the GSEs should not be required 
to do so as well.
  Second, this legislation would require Fannie Mae and Freddie Mac to 
disclose information regarding their interest rate and credit risks. 
Specifically, each enterprise would regularly report the impact on 
their mortgage portfolios of a 50 basis point change in interest rates 
and a 25 basis point change in the slope of the yield curve. They would 
also be required to disclose, on a quarterly basis, the financial 
impact on each enterprise of an immediate 5 percent decline in U.S. 
home prices.
  Additionally, the bill requires the GSEs to acquire credit ratings 
from an SEC-recognized credit rating agency to provide an assessment of 
the risk to the government and independent financial health of each 
enterprise. This ``stand-along'' rating would be derived from the 
underlying credit quality of each enterprise and assume no direct 
support from the Federal Government.
  These disclosures will ensure that the standards of financial 
disclosure of the GSEs are in line with the rest of corporate America, 
making the enterprises subject to public scrutiny and market 
disciplinary forces.
  Finally, the bill takes an incremental approach towards incorporating 
oversight of the Federal Home Loan Banks into the new regulatory 
framework created under this bill.
  The bill requires Treasury, in consultation with HUD, to issue a 
report to Congress no later than six months after the date of the 
bill's enactment on the appropriate manner upon which to consolidate 
the responsibilities of the Federal Housing Finance Board, and 
oversight of the Federal Home Loan Banks (FHLBs), into the regulatory 
framework contained under this bill.
  And as I mentioned earlier, the FHLBs would be required to 
immediately comply with financial disclosure and reporting requirements 
under the 1934 act in a manner similar to those required of Fannie Mae 
and Freddie Mac under this bill.
  Lastly, the legislation would authorize the Secretary of the Treasury 
to designate an individual to serve as one of the five Federal Housing 
Finance Board members. This authority, transferred from HUD, would 
immediately involve Treasury in the regulatory rubric of the FHFB and 
ease the transition of the consolidation of the FHFBs regulatory 
responsibilities into this new agency.
  In conclusion, the reforms contained in this proposal are very 
important. They would establish a new regulatory framework that 
promotes sound and safe financial operations at the GSEs. They would 
promote stability in our capital markets by providing investors with 
better information about the financial health of the enterprises. They 
would affirm the GSEs' critical role in our nation's housing market. 
And they would protect investors and taxpayers, while preserving the 
opportunity of millions of families to pursue the American dream of 
homeownership.
  I urge my colleagues to support this, important legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1656

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

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Federal 
     Housing Enterprise Oversight Modernization Act of 2003''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title and table of contents.

      TITLE I--REFORM OF REGULATION OF FANNIE MAE AND FREDDIE MAC

                 Subtitle A--Improvement of Supervision

Sec. 101. Establishment of Office of Federal Housing Enterprise 
              Supervision in the Department of the Treasury.
Sec. 102. Duties and authorities of Director and HUD.
Sec. 103. Examiners and accountants.
Sec. 104. Regulations.
Sec. 105. Assessments.
Sec. 106. Independence of Director in congressional testimony and 
              recommendations.
Sec. 107. Nonmortgage-related investments.
Sec. 108. Reports.
Sec. 109. Review of enterprises.
Sec. 110. Risk-based capital test for enterprises.
Sec. 111. Minimum and critical capital levels.
Sec. 112. Required disclosures.
Sec. 113. Federal Housing Finance Board.
Sec. 114. Definitions.

                  Subtitle B--Prompt Corrective Action

Sec. 131. Capital classifications.
Sec. 132. Supervisory actions applicable to undercapitalized 
              enterprises.
Sec. 133. Supervisory actions applicable to significantly 
              undercapitalized enterprises.

                    Subtitle C--Enforcement Actions

Sec. 151. Cease-and-desist proceedings.
Sec. 152. Temporary cease-and-desist proceedings.
Sec. 153. Removal and prohibition authority.
Sec. 154. Enforcement and jurisdiction.
Sec. 155. Civil money penalties.
Sec. 156. Criminal penalty.

                     Subtitle D--General Provisions

Sec. 161. Conforming and technical amendments.
Sec. 162. Effective date.

        TITLE II--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY

Sec. 201. Abolishment of OFHEO.
Sec. 202. Continuation and coordination of certain regulations.
Sec. 203. Transfer and rights of employees of OFHEO.
Sec. 204. Transfer of property and facilities.

      TITLE I--REFORM OF REGULATION OF FANNIE MAE AND FREDDIE MAC

                 Subtitle A--Improvement of Supervision

     SEC. 101. ESTABLISHMENT OF OFFICE OF FEDERAL HOUSING 
                   ENTERPRISE SUPERVISION IN THE DEPARTMENT OF THE 
                   TREASURY.

       (a) In General.--The Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 
     amended by striking sections 1311 and 1312 and inserting the 
     following:

     ``SEC. 1311. ESTABLISHMENT OF OFFICE OF FEDERAL HOUSING 
                   ENTERPRISE SUPERVISION.

       ``(a) Establishment.--
       ``(1) In general.--There is established the Office of 
     Federal Housing Enterprise Supervision, which shall be an 
     office in the Department of the Treasury.
       ``(2) Authority.--The Office shall succeed to the authority 
     of the Director of the Office of Federal Housing Enterprise 
     Oversight of the Department of Housing and Urban Development 
     and the general regulatory and any other authority of the 
     Secretary of Housing and Urban Development with respect to 
     the enterprises (except as specifically provided otherwise in 
     this title, the Federal National Mortgage Association Charter 
     Act (12 U.S.C. 1716 et seq.), the Federal Home Loan Mortgage 
     Corporation Act (12 U.S.C. 1451 et seq.), or any other 
     provision of Federal law).
       ``(b) Prohibition of Merger of Office.--Notwithstanding any 
     other provision of law, the Secretary of the Treasury may not 
     merge or consolidate the Office, or any of the functions or 
     responsibilities of the Office, with any function or program 
     administered by the Secretary.
       ``(c) Savings Provision.--The authority of the Director to 
     take actions under subtitles B and C does not in any way 
     limit the general supervisory and regulatory authority 
     granted to the Director under subsection (a).

     ``SEC. 1312. DIRECTOR.

       ``(a) Establishment of Position.--There is established the 
     position of the Director of the Office of Federal Housing 
     Enterprise Supervision, who shall be the head of the Office.
       ``(b) Appointment; Term.--
       ``(1) Appointment.--The Director shall be appointed by the 
     President, by and with the advice and consent of the Senate, 
     from among individuals who are citizens of the United States.
       ``(2) Term.--The Director shall be appointed for a term of 
     5 years.
       ``(3) Vacancy.--

[[Page S11992]]

       ``(A) In general.--A vacancy in the position of Director 
     that occurs before the expiration of the term for which a 
     Director was appointed shall be filled in the manner 
     established under paragraph (1).
       ``(B) Term.--The Director appointed to fill a vacancy under 
     subparagraph (A) shall be appointed only for the remainder of 
     such term.
       ``(4) Service after end of term.--An individual may serve 
     as Director after the expiration of the term for which the 
     individual was appointed until a successor has been 
     appointed.
       ``(5) Transitional provision.--Notwithstanding paragraphs 
     (1) and (2), the Director of the Office of Federal Housing 
     Enterprise Oversight of the Department of Housing and Urban 
     Development on the date of enactment of the Federal Housing 
     Enterprise Oversight Modernization Act of 2003, shall serve 
     as the Director until not later than 1 year after the date of 
     enactment of that Act.
       ``(c) Prohibition on Financial Interests.--The Director 
     shall not have a direct or indirect financial interest in any 
     enterprise, nor hold any office, position, or employment in 
     any enterprise.''.
       (b) Appointment of Director.--Notwithstanding the effective 
     date under section 162, or any other provision of law, the 
     President may, at any time after the date of enactment of 
     this Act, appoint an individual to serve as the Director of 
     the Office of Federal Housing Enterprise Supervision, as 
     established under this Act, in accordance with section 1312 
     of the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992, as amended by subsection (a) of this 
     section.

     SEC. 102. DUTIES AND AUTHORITIES OF DIRECTOR AND HUD.

       (a) In General.--Section 1313 of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4513) is amended to read 
     as follows:

     ``SEC. 1313. DUTIES AND AUTHORITIES OF DIRECTOR.

       ``(a) Duties.--
       ``(1) Principal duties.--The principal duties of the 
     Director shall be to ensure that the enterprises--
       ``(A) operate in a financially safe and sound manner;
       ``(B) carry out their missions in a financially safe and 
     sound manner, and only through activities that have been 
     authorized under, and are consistent with the purposes of, 
     the provisions of the Federal National Mortgage Association 
     Charter Act (12 U.S.C. 1716 et seq.), and the Federal Home 
     Loan Mortgage Corporation Act (12 U.S.C. 1451 et seq.), as 
     applicable; and
       ``(C) remain adequately capitalized.
       ``(2) Other duties.--To the extent consistent with 
     paragraph (1), the Director shall be exercise general 
     supervisory and regulatory authority over the enterprises, in 
     accordance with this title, the Federal National Mortgage 
     Association Charter Act (12 U.S.C. 1716 et seq.), the Federal 
     Home Loan Mortgage Corporation Act (12 U.S.C. 1451 et seq.), 
     and any other applicable provision of law.
       ``(b) Authority Exclusive of Secretary.--Except as 
     specifically provided under this title, the Federal National 
     Mortgage Association Charter Act, the Federal Home Loan 
     Mortgage Corporation Act, or any other provision of Federal 
     law, the authority of the Director with respect to the 
     enterprises shall not be subject to the review, approval, or 
     intervention of the Secretary of the Treasury.
       ``(c) Delegation of Authority.--The Director may delegate 
     to officers and employees of the Office any of the functions, 
     powers, and duties of the Director, with respect to 
     supervision and regulation of the enterprises, as the 
     Director considers appropriate.''.
       (b) Prior Approval Authority for New Programs.--Part 1 of 
     Subtitle A of the Federal Housing Enterprises Financial 
     Safety and Soundness Act of 1992 (12 U.S.C. 4501 et seq.) is 
     amended by adding at the end the following:

     ``SEC. 1319H. PRIOR APPROVAL AUTHORITY FOR NEW PROGRAMS.

       ``(a) In General.--The Director, in consultation with the 
     Secretary of Housing and Urban Development, shall require 
     each enterprise to obtain the approval of the Director, in 
     the manner prescribed by regulation of the Director, for any 
     new program of the enterprise before implementing the 
     program.
       ``(b) Standard for Approval.--The Director shall approve 
     any new program of an enterprise for purposes of subsection 
     (a), unless--
       ``(1) in the case of a new program of the Federal National 
     Mortgage Association, the Director determines that the 
     program is not authorized under section 304 or paragraph (2), 
     (3), (4), or (5) of section 302(b) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1717(b));
       ``(2) in the case of a new program of the Federal Home Loan 
     Mortgage Corporation, the Director determines that the 
     program is not authorized under paragraph (1), (4), or (5) of 
     section 305(a) of the Federal Home Loan Mortgage Corporation 
     Act (12 U.S.C. 1451 et seq.); or
       ``(3) the Director determines that the new program is 
     inconsistent with or undermines the safe and sound operation 
     of the enterprise, consistent with section 1313(a)(1).
       ``(c) Procedure for Approval.--
       ``(1) Submission of request.--An enterprise shall submit to 
     the Director a written request for approval of a new program 
     under this section that describes the program in such form as 
     prescribed by regulation of the Director.
       ``(2) Response.--
       ``(A) In general.--Not later than 45 days after the date of 
     submission of a request for approval under paragraph (1), the 
     Director shall--
       ``(i) approve the request; or
       ``(ii) deny the request and submit a report explaining the 
     reasons for the denial to the Committee on Financial Services 
     of the House of Representatives and the Committee on Banking, 
     Housing, and Urban Affairs of the Senate.
       ``(B) Extension.--The Director may extend the time period 
     under subparagraph (A) for a single additional 15-day period 
     only if the Director requests additional information from the 
     enterprise.
       ``(3) Failure to respond.--If the Director fails to approve 
     a request for approval under this section, or fails to submit 
     a report under paragraph (2)(A)(ii) during the period 
     provided, the request shall be considered to have been 
     approved by the Director.
       ``(4) Review of disapproval.--
       ``(A) Submission of new information.--If the Director 
     submits a report under paragraph (2)(A)(ii) denying a request 
     for reasons listed under paragraph (1) or (2) of subsection 
     (b), the Director shall provide the enterprise submitting the 
     request with a timely opportunity to review and supplement 
     the administrative record.
       ``(B) New programs not in the public interest.--If the 
     Director submits a report under paragraph (2)(A)(ii) denying 
     a request after finding that the program is inconsistent with 
     or undermines the safe and sound operation of the enterprise, 
     as described in subsection (b)(3), the Director shall provide 
     the enterprise with notice and opportunity for a hearing on 
     the record regarding such denial.''.
       (c) Repeal of HUD Authority.--Part 2 of subtitle A of title 
     XIII of the Housing and Community Development Act of 1992 (12 
     U.S.C. 4501 et seq.) is amended by striking sections 1321 and 
     1322.
       (d) Authority of hud for Housing Goals.--
       (1) In general.--Section 1331 of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4561) is amended--
       (A) in the first sentence of subsection (a), by inserting 
     ``of Housing and Urban Development'' after ``The Secretary''; 
     and
       (B) by adding at the end the following:
       ``(d) Definition.--For purposes of this part, the term 
     `Secretary' means the Secretary of Housing and Urban 
     Development.''.
       (2) Annual report on housing goals.--Section 1324 of the 
     Housing and Community Development Act of 1992 (12 U.S.C. 
     4544) is amended by inserting ``of Housing and Urban 
     Development'' after ``Secretary'' each place such term 
     appears.
       (e) Technical and Conforming Amendments.--
       (1) Fannie mae.--Section 302(b)(6) of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1717(b)(6)) is 
     amended by striking ``Secretary under section 1322'' and 
     inserting ``Director under section 1319H''.
       (2) Freddie mac.--Section 305(c) of the Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1454(c)) is amended by 
     striking ``Secretary under section 1322'' and inserting 
     ``Director under section 1319H''.
       (3) Financial institutions examination council.--Section 
     1004(a) of the Federal Financial Institutions Examination 
     Council Act of 1978 (12 U.S.C. 3303(a)) is amended--
       (A) in paragraph (5), by striking the period at the end and 
     inserting ``; and''; and
       (B) by adding at the end the following:
       ``(6) the Director of the Office of Federal Housing 
     Enterprise Supervision.''.

     SEC. 103. EXAMINERS AND ACCOUNTANTS.

       (a) Examinations.--Section 1317 of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4517) is 
     amended--
       (1) in the second sentence of subsection (c), by striking 
     ``The'' and inserting ``During the 3-year period beginning on 
     the date of enactment of the Federal Housing Enterprise 
     Oversight Modernization Act of 2003, the''; and
       (2) in subsection (d), by striking ``Federal Reserve 
     banks'' and inserting ``Director of the Office of Thrift 
     Supervision''.
       (b) Enhanced Authority To Hire Examiners and Accountants.--
     Section 1317 of the Housing and Community Development Act of 
     1992 (12 U.S.C. 4517) is amended by adding at the end the 
     following:
       ``(g) Appointment of Accountants, Economists, and 
     Examiners.--
       ``(1) Applicability.--This section applies with respect to 
     any position of examiner, accountant, and economist at the 
     Office, with respect to supervision and regulation of the 
     enterprises, that is in the competitive service.
       ``(2) Appointment authority.--
       ``(A) In general.--The Director may appoint candidates to 
     any position described in paragraph (1)--
       ``(i) in accordance with the statutes, rules, and 
     regulations governing appointments in the excepted service; 
     and
       ``(ii) notwithstanding any statutes, rules, and regulations 
     governing appointments in the competitive service.
       ``(B) Rule of construction.--The appointment of a candidate 
     to a position under this paragraph shall not be considered to 
     cause such position to be converted from the competitive 
     service to the excepted service.

[[Page S11993]]

       ``(3) Reports.--
       ``(A) In general.--Not later than 90 days after the end of 
     fiscal year 2003 (for fiscal year 2003) and 90 days after the 
     end of fiscal year 2005 (for fiscal years 2004 and 2005), the 
     Director shall submit a report with respect to the exercise 
     of the authority granted to the Director by paragraph (2) 
     during such fiscal years to the--
       ``(i) Committee on Government Reform and the Committee on 
     Financial Services of the House of Representatives; and
       ``(ii) Committee on Governmental Affairs and the Committee 
     on Banking, Housing, and Urban Affairs of the Senate.
       ``(B) Contents.--The reports submitted under subparagraph 
     (A) shall describe the changes in the hiring process 
     authorized by paragraph (2), including relevant information 
     related to--
       ``(i) the quality of candidates;
       ``(ii) the procedures used by the Director to select 
     candidates through the streamlined hiring process;
       ``(iii) the numbers, types, and grades of employees hired 
     under the authority;
       ``(iv) any benefits or shortcomings associated with the use 
     of the authority;
       ``(v) the effect of the exercise of the authority on the 
     hiring of veterans and other demographic groups;
       ``(vi) the way in which managers were trained in the 
     administration of the streamlined hiring system; and
       ``(vii) a list of the specific functional responsibilities 
     of Office personnel (such as examinations, supervision, 
     regulatory oversight, and risk analysis) and the percentage 
     of the total personnel employed within the Office that are 
     engaged in each such activity.''.
       (c) Allocation of Personnel Resources.--Section 1315 of the 
     Housing and Community Development Act of 1992 (12 U.S.C. 
     4515), as amended by this Act, is amended by adding at the 
     end the following:
       ``(f) Maintenance of Adequate Examination and Supervisory 
     Personnel.--In carrying out this Act, the Director shall 
     ensure that a significant amount of the Office resources 
     allocated for the hiring and support of personnel are applied 
     to personnel engaged in the examination and supervision of 
     the enterprises.''.

     SEC. 104. REGULATIONS.

       Section 1319G of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4526) is amended in subsection (c), by 
     striking ``Committee on Banking, Finance and Urban Affairs'' 
     and inserting ``Committee on Financial Services''.

     SEC. 105. ASSESSMENTS.

       Section 1316 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4516) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Annual Assessments.--The Director shall establish and 
     collect from the enterprises annual assessments in an amount 
     not exceeding the amount sufficient to provide for all 
     reasonable costs and expenses of the Office, including--
       ``(1) the expenses of any examination under section 1317; 
     and
       ``(2) the expenses of obtaining any review or credit 
     assessment under section 1319.'';
       (2) in subsection (b), in paragraph (2), by moving the 
     margin 2 ems to the right;
       (3) in subsection (c), by adding at the end the following: 
     ``The Director may adjust the amounts of any semiannual 
     assessments for an assessment under subsection (a) that are 
     to be paid pursuant to subsection (b) by an enterprise, as 
     necessary in the discretion of the Director, to ensure that 
     the costs of enforcement activities under subtitles B and C 
     for an enterprise are borne only by that enterprise.'';
       (4) in subsection (f), by striking ``Any assessments 
     collected'' and all that follows through the end of the 
     subsection and inserting the following: ``Notwithstanding any 
     other provision of law, any assessments collected by the 
     Director pursuant to this section shall be deposited in the 
     Fund in an account for the Director. Any amounts in the Fund 
     are hereby made available, without fiscal year limitation, to 
     the Director (to the extent of amounts in the Director's 
     account) for carrying out the supervisory and regulatory 
     responsibilities of the Director with respect to the 
     enterprises, including any necessary administrative and 
     nonadministrative expenses of the Director in carrying out 
     the purposes of this title, the Federal National Mortgage 
     Association Charter Act (12 U.S.C. 1716 et seq.), and the 
     Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1451 et 
     seq.).''; and
       (5) in subsection (g), by striking paragraphs (1) and (2) 
     and inserting the following:
       ``(1) Financial operating plans and forecasts.--Before the 
     beginning of each fiscal year, the Director shall submit a 
     copy of the financial operating plans and forecasts for the 
     Office to the Director of the Office of Management and 
     Budget.
       ``(2) Reports of operations.--As soon as practicable after 
     the end of each fiscal year and each quarter thereof, the 
     Director shall submit a copy of the report of the results of 
     the operations of the Office during such period to the 
     Director of the Office of Management and Budget.''.

     SEC. 106. INDEPENDENCE OF DIRECTOR IN CONGRESSIONAL TESTIMONY 
                   AND RECOMMENDATIONS.

       Section 111 of Public Law 93-495 (12 U.S.C. 250) is amended 
     by inserting ``the Director of the Office of Federal Housing 
     Enterprise Supervision of the Department of the Treasury,'' 
     after ``the Federal Housing Finance Board,''.

     SEC. 107. NONMORTGAGE-RELATED INVESTMENTS.

       Subtitle B of title XIII of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4611 et seq.) is amended--
       (1) by striking the subtitle designation and heading and 
     inserting the following:

    ``Subtitle B--Required Capital Levels for Enterprises, Special 
         Enforcement Powers, and Nonmortgage-Related Assets'';

     and
       (2) by adding at the end the following:

     ``SEC. 1369E. NONMORTGAGE-RELATED ASSETS.

       ``(a) In General.--
       ``(1) Liquidity portfolio.--On a quarterly basis, the 
     Director shall review and provide written comment to each 
     enterprise on the nonmortgage-related assets held by each 
     enterprise in the liquidity portfolio of such enterprise. The 
     Director shall define the term `nonmortgage-related asset' 
     for purposes of this section.
       ``(2) Assets outside of liquidity portfolio.--The Director 
     may review and provide written comment to each enterprise on 
     the quality and appropriateness of nonmortgage-related assets 
     held by an enterprise outside of the liquid portfolio of such 
     enterprise.
       ``(b) Report.--On a biennial basis, the Director shall 
     submit a report to Congress containing information on--
       ``(1) any written comments provided to the enterprises 
     under subsection (a)(1) or (2); and
       ``(2) whether or not each enterprise is in compliance with 
     the Sound Practices for Managing Liquidity in Banking 
     Organisations established by the Basel Committee, or any 
     successor thereto.''.

     SEC. 108. REPORTS.

       Sections 1327 and 1328 of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4547, 4548) are amended by 
     striking ``Secretary'' each place it appears and inserting 
     ``Director''.

     SEC. 109. REVIEWS OF ENTERPRISES.

       Section 1319 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4519) is amended--
       (1) by striking the heading and inserting the following:

     ``SEC. 1319. REVIEW OF ENTERPRISES.'';

       (2) by inserting after ``any entity'' the following: ``that 
     the Director considers appropriate, including an entity'';
       (3) by inserting ``(a) Authority To Provide for Reviews.--
     '' before ``The''; and
       (4) by adding at the end the following new subsection:
       ``(b) Biennial Determination of Credit Rating.--
       ``(1) In general.--On a biennial basis, the Director shall 
     provide for 2 entities recognized by the Division of Market 
     Regulation of the Securities and Exchange Commission as 
     nationally recognized statistical rating organizations, each 
     to conduct an assessment of the financial condition of each 
     enterprise for the purpose of determining the level of risk 
     that the enterprise will be unable to meet its obligations, 
     taking into consideration the legal status evidenced by the 
     statements required under--
       ``(A) the penultimate sentence of section 304(b) of the 
     Federal National Mortgage Association Charter Act (12 U.S.C. 
     1719(b));
       ``(B) the last sentence of section 304(d) of the Federal 
     National Mortgage Association Charter Act (12 U.S.C. 
     1719(d));
       ``(C) the penultimate sentence of section 304(e) of the 
     Federal National Mortgage Association Charter Act (12 U.S.C. 
     1719(e)); and
       ``(D) section 306(h)(2) of the Federal Home Loan Mortgage 
     Corporation Act (12 U.S.C. 1455(h)(2)).
       ``(2) Credit rating.--The assessment under paragraph (1) 
     shall include--
       ``(A) assigning a credit rating for each enterprise, using 
     a scale similar to that used by such organization with 
     respect to obligations of other financial institutions; and
       ``(B) the report regarding such assessment and the rating 
     in the report of the Director under section 1319B(a).''.

     SEC. 110. RISK-BASED CAPITAL TEST FOR ENTERPRISES.

       Section 1361 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4611) is amended--
       (1) by redesignating subsections (d), (e), and (f) as 
     subsections (f), (g), and (h), respectively; and
       (2) by inserting after subsection (c) the following:
       ``(d) Periodic Review of Risk-Based Capital Test.--
       ``(1) In general.--Not later than 5 years after the date of 
     enactment of the Federal Housing Enterprise Oversight 
     Modernization Act of 2003, and once every 5 years thereafter, 
     the Director shall conduct a review of the risk-based capital 
     test adopted in accordance with this subtitle and submit a 
     report to Congress on the findings of such review, the 
     appropriateness of the risk-based capital test, and any 
     legislative recommendations that would, as necessary--
       ``(A) better align capital with risk; and
       ``(B) reflect evolving best practices for risk-based 
     capital standards for large, complex financial 
     institutions.''
       ``(2) Savings provision.--Notwithstanding paragraph (1), 
     the Director shall retain all authority under this section to 
     modify the current risk-based capital rule as the Director 
     determines.
       ``(e) Review of Risk-Based Capital Level.--Notwithstanding 
     any other provision of law, if the Director determines that

[[Page S11994]]

     the risk-based capital level of an enterprise is inadequate, 
     the Director may make such adjustments to the risk-based 
     capital level of that enterprise as the Director determines 
     necessary to ensure the safe and sound financial operation of 
     that enterprise.''.

     SEC. 111. MINIMUM AND CRITICAL CAPITAL LEVELS.

       Section 1362(b) of the Housing and Community Development 
     Act of 1992 (12 U.S.C. 4612) is amended to read as follows:
       ``(b) Authority To Issue Regulations.--The Director shall 
     issue such regulations as the Director determines necessary 
     to ensure that the enterprises comply with the requirements 
     of subsection (a).''.

     SEC. 112. REQUIRED DISCLOSURES.

       (a) Fannie Mae and Freddie Mac.--Part 1 of subtitle A of 
     the Federal Housing Enterprises Financial Safety and 
     Soundness Act of 1992 (12 U.S.C. 4501 et seq.), as amended by 
     this Act, is amended by adding at the end the following:

     ``SEC. 1319I. REGISTRATION OF STOCK AND PUBLIC DISCLOSURES.

       ``(a) Registration of Stock Under the Securities Exchange 
     Act.--
       ``(1) In general.--Notwithstanding its status as an 
     exempted security for purposes of the Securities Exchange Act 
     of 1934 pursuant to section 311 of the Federal National 
     Mortgage Association Charter Act and section 306 of the 
     Federal Home Loan Mortgage Corporation Act, as applicable, 
     the common stock of each enterprise shall be subject to--
       ``(A) section 12(g) of the Securities Exchange Act of 1934; 
     and
       ``(B) sections 14 and 16 of that Act.
       ``(2) Review.--All reports, statements, and forms filed 
     with the Securities and Exchange Commission under this 
     subsection shall be reviewed and commented upon by the 
     Commission to the same extent and with the same frequency as 
     comparable reports and materials filed by other issuers.
       ``(b) Credit Rating.--An enterprise shall annually disclose 
     to the public the credit rating of such enterprise.
       ``(c) Mortgage Portfolio.--An enterprise shall disclose to 
     the public, on a monthly basis, the effect on its mortgage 
     portfolio of--
       ``(1) a 50 basis point change in interest rates; and
       (2) a 25 basis point change in the slope of the yield 
     curve.
       ``(d) Credit Risk Disclosures.--An enterprise shall 
     disclose to the public, on a quarterly basis, the financial 
     impact on the enterprise of an immediate 5 percent decline in 
     the average price of single-family housing within the United 
     States.''.
       (b) Federal Home Loan Banks.--Section 6 of the Federal Home 
     Loan Bank Act (12 U.S.C. 1426) is amended by adding at the 
     end the following:
       ``(i) Registration and Reporting Requirements.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, the Class A stock and Class B stock issued by each 
     Federal home loan bank shall be subject to--
       ``(A) section 12(g) of the Securities Exchange Act of 1934; 
     and
       ``(B) sections 14 and 16 of that Act.
       ``(2) Review.--All reports, statements, and forms filed 
     with the Securities and Exchange Commission under this 
     subsection shall be reviewed and commented upon by the 
     Commission to the same extent and with the same frequency as 
     comparable reports and materials filed by other issuers.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of enactment of this Act, or 
     such later date as determined by the Securities and Exchange 
     Commission.

     SEC. 113. FEDERAL HOUSING FINANCE BOARD.

       (a) Appointment of Secretary of the Treasury to FHFB.--
     Section 2(11) of the Federal Home Loan Bank Act (12 U.S.C. 
     1422(11)) is amended by striking ``Secretary of Housing and 
     Urban Development'' and inserting ``Secretary of the 
     Treasury''.
       (b) Study of Merger of FHFB With OFHES.--
       (1) In general.--The Secretary of the Treasury, after 
     consultation with the Secretary of Housing and Urban 
     Development, shall study and report on any recommendations 
     regarding the consolidation of the responsibilities of the 
     Federal Housing Finance Board, including oversight of the 
     Federal home loan banks, and the Office of Federal Housing 
     Enterprise Supervision of the Department of the Treasury.
       (2) Report.--Not later than 6 months after the date of 
     enactment of this Act, the Secretary of the Treasury shall 
     submit a report to Congress on--
       (A) the results of the study conducted under subsection 
     (a); and
       (B) any recommendations regarding legislative or 
     administrative changes.

     SEC. 114. DEFINITIONS.

       Section 1303 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4502) is amended--
       (1) in each of paragraphs (5) and (14), by striking 
     ``Federal Housing Enterprise Oversight of the Department of 
     Housing and Urban Development'' each place that term appears 
     and inserting ``Federal Housing Enterprise Supervision of the 
     Department of the Treasury'';
       (2) in paragraphs (8), (9), (10), and (19), by inserting 
     ``of Housing and Urban Development'' after ``Secretary'' each 
     place that term appears;
       (3) by striking paragraph (15);
       (4) by redesignating paragraphs (7) through (14) (as 
     amended by this Act) as paragraphs (8) through (15), 
     respectively; and
       (5) by inserting after paragraph (6) the following:
       ``(7) Enterprise-affiliated party.--The term `enterprise-
     affiliated party' means--
       ``(A) any director, officer, employee, or controlling 
     stockholder of, or agent for, an enterprise;
       ``(B) any shareholder, consultant, joint venture partner, 
     and any other person, as determined by the Director (by 
     regulation or case-by-case), who participates in the conduct 
     of the affairs of an enterprise; and
       ``(C) any independent contractor (including any attorney, 
     appraiser, or accountant), to the extent that such person 
     knowingly or recklessly participates in--
       ``(i) any violation of any law or regulation;
       ``(ii) any breach of fiduciary duty; or
       ``(iii) any unsafe or unsound practice,
     which caused or is likely to cause more than a minimal 
     financial loss to, or a significant adverse effect on, the 
     enterprise.''.

                  Subtitle B--Prompt Corrective Action

     SEC. 131. CAPITAL CLASSIFICATIONS.

       Section 1364 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4614) is amended--
       (1) by striking subsection (b) and inserting the following:
       ``(b) Discretionary Classification.--
       ``(1) Grounds for reclassification.--The Director may 
     reclassify an enterprise under paragraph (2), if--
       ``(A) at any time, the Director determines in writing that 
     an enterprise is engaging in conduct that could result in a 
     rapid depletion of core capital or that the value of the 
     property subject to mortgages held or securitized by the 
     enterprise has decreased significantly;
       ``(B) after notice and an opportunity for hearing, the 
     Director determines that an enterprise is in an unsafe or 
     unsound condition; or
       ``(C) pursuant to section 1371(b), the Director deems an 
     enterprise to be engaging in an unsafe or unsound practice.
       ``(2) Reclassification.--In addition to any other action 
     authorized under this title, including the reclassification 
     of an enterprise for any reason not specified in this 
     subsection, if the Director takes any action described in 
     paragraph (1) the Director may classify an enterprise--
       ``(A) as undercapitalized, if the enterprise is otherwise 
     classified as adequately capitalized;
       ``(B) as significantly undercapitalized, if the enterprise 
     is otherwise classified as undercapitalized; and
       ``(C) as critically undercapitalized, if the enterprise is 
     otherwise classified as significantly undercapitalized.'';
       (2) by redesignating subsection (d) as subsection (e); and
       (3) by inserting after subsection (c) the following:
       ``(d) Restriction on Capital Distributions.--
       ``(1) In general.--An enterprise shall make no capital 
     distribution if, after making the distribution, the 
     enterprise would be undercapitalized.
       ``(2) Exception.--Notwithstanding paragraph (1), the 
     Director may permit an enterprise to repurchase, redeem, 
     retire, or otherwise acquire shares or ownership interests, 
     if the repurchase, redemption, retirement, or other 
     acquisition--
       ``(A) is made in connection with the issuance of additional 
     shares or obligations of the enterprise in at least an 
     equivalent amount; and
       ``(B) will reduce the financial obligations of the 
     enterprise or otherwise improve the financial condition of 
     the enterprise.''.

     SEC. 132. SUPERVISORY ACTIONS APPLICABLE TO UNDERCAPITALIZED 
                   ENTERPRISES.

       (a) Effective Date for Supervisory Actions.--Regulations 
     issued by the Director of the Office of Federal Housing 
     Enterprise Supervision under section 1361(e) of the Federal 
     Housing Enterprises Financial Safety and Soundness Act of 
     1992, as amended by section 161(a)(5)(A) of this Act, shall 
     become effective not earlier than 6 months after the date of 
     enactment of this Act.
       (b) Supervisory Actions.--Section 1365 of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4615) is 
     amended--
       (1) in subsection (a)--
       (A) by redesignating paragraphs (1) and (2) as paragraphs 
     (2) and (3), respectively;
       (B) by inserting before paragraph (2) the following:
       ``(1) Required monitoring.--The Director shall--
       ``(A) closely monitor the condition of any undercapitalized 
     enterprise;
       ``(B) closely monitor compliance with the capital 
     restoration plan, restrictions, and requirements imposed 
     under this section; and
       ``(C) periodically review the plan, restrictions, and 
     requirements applicable to the undercapitalized enterprise to 
     determine whether the plan, restrictions, and requirements 
     are achieving the purpose of this section.''; and
       (C) by adding at the end the following:
       ``(4) Restriction of asset growth.--An undercapitalized 
     enterprise shall not permit its average total assets during 
     any calendar quarter to exceed its average total assets 
     during the preceding calendar quarter, unless--
       ``(A) the Board has accepted the capital restoration plan 
     of the enterprise;
       ``(B) any increase in total assets is consistent with the 
     plan; and

[[Page S11995]]

       ``(C) the ratio of tangible equity to assets of the 
     enterprise increases during the calendar quarter at a rate 
     sufficient to enable the enterprise to become adequately 
     capitalized within a reasonable time.
       ``(5) Prior approval of acquisitions and issuance of new 
     products.--An undercapitalized enterprise shall not, directly 
     or indirectly, acquire any interest in any entity or issue a 
     new product, unless--
       ``(A) the Director has accepted the capital restoration 
     plan of the enterprise, the enterprise is implementing the 
     plan, and the Director determines that the proposed action is 
     consistent with and will further the achievement of the plan; 
     or
       ``(B) the Director determines that the proposed action will 
     further the purpose of this section.'';
       (2) in the subsection heading for subsection (b), by 
     striking ``From Undercapitalized to Significantly 
     Undercapitalized'';
       (3) by redesignating subsection (c) (as amended by 
     subsection (a) of this section) as subsection (d); and
       (4) by inserting after subsection (b) the following:
       ``(c) Other Discretionary Safeguards.--The Director may 
     take, with respect to an undercapitalized enterprise, any of 
     the actions authorized to be taken under section 1366 with 
     respect to a significantly undercapitalized enterprise, if 
     the Director determines that such actions are necessary to 
     carry out the purpose of this subtitle.''.

     SEC. 133. SUPERVISORY ACTIONS APPLICABLE TO SIGNIFICANTLY 
                   UNDERCAPITALIZED ENTERPRISES.

       Section 1366 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4616) is amended--
       (1) in subsection (b)--
       (A) in the subsection heading, by striking ``Discretionary 
     Supervisory Actions'' and inserting ``Specific Actions'';
       (B) in the matter preceding paragraph (1), by striking 
     ``may, at any time, take any'' and inserting ``shall carry 
     out this section by taking, at any time, 1 or more'';
       (C) by redesignating paragraphs (5) and (6) as paragraphs 
     (6) and (7), respectively;
       (D) by inserting after paragraph (4) the following:
       ``(5) Improvement of management.--
       ``(A) New election of board.--Order a new election for the 
     board of directors of the enterprise.
       ``(B) Dismissal of directors or executive officers.--
     Require the enterprise to dismiss from office any director or 
     executive officer who had held office for more than 180 days 
     immediately before the date on which the enterprise became 
     undercapitalized. Dismissal under this subparagraph shall not 
     be construed to be a removal pursuant to the Director's 
     enforcement powers under section 1377.
       ``(C) Employ qualified executive officers.--Require the 
     enterprise to employ qualified executive officers (who, if 
     the Director so specifies, shall be subject to approval by 
     the Director).''; and
       (E) by adding at the end the following:
       ``(8) Other action.--Require the enterprise to take any 
     other action that the Director determines will better carry 
     out the purpose of this section than any of the other actions 
     specified in this paragraph.'';
       (2) by redesignating subsection (c) as subsection (d); and
       (3) by inserting after subsection (b) the following:
       ``(c) Restriction on Compensation of Executive Officers.--
     An enterprise that is classified as significantly 
     undercapitalized may not, without prior written approval by 
     the Director--
       ``(A) pay any bonus to any executive officer; or
       ``(B) provide compensation to any executive officer at a 
     rate exceeding the average rate of compensation of that 
     officer (excluding bonuses, stock options, and profit 
     sharing) during the 12 calendar months preceding the calendar 
     month in which the enterprise became classified as 
     significantly undercapitalized.''.

                    Subtitle C--Enforcement Actions

     SEC. 151. CEASE-AND-DESIST PROCEEDINGS.

       Section 1371 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4631) is amended--
       (1) by striking subsections (a) and (b) and inserting the 
     following:
       ``(a) Issuance for Unsafe or Unsound Practices and 
     Violations of Rules or Laws.--
       ``(1) In general.--The Director may issue and serve upon 
     the enterprise or an enterprise-affiliated party a notice of 
     charges under this section if--
       ``(A) in the opinion of the Director, an enterprise or any 
     enterprise-affiliated party is engaging or has engaged, or 
     the Director has reasonable cause to believe that the 
     enterprise or any enterprise-affiliated party is about to 
     engage, in an unsafe or unsound practice in conducting the 
     business of the enterprise or is violating or has violated; 
     or
       ``(B) the Director has reasonable cause to believe that the 
     enterprise or any enterprise-affiliated party is about to 
     violate, a law, rule, or regulation, or any condition imposed 
     in writing by the Director in connection with the granting of 
     any application or other request by the enterprise or any 
     written agreement entered into with the Director.
       ``(2) Limitations.--The Director may not enforce compliance 
     with--
       ``(A) any housing goal established under subpart B of part 
     2 of subtitle A;
       ``(B) section 1336 or 1337;
       ``(C) subsection (m) or (n) of section 309 of the Federal 
     National Mortgage Association Charter Act (12 U.S.C. 
     1723a(m), (n)); or
       ``(D) subsection (e) or (f) of section 307 of the Federal 
     Home Loan Mortgage Corporation Act (12 U.S.C. 1456(e), (f)).
       ``(b) Issuance for Unsatisfactory Rating.--If an enterprise 
     receives, in its most recent report of examination, a less-
     than-satisfactory rating for asset quality, management, 
     earnings, or liquidity, the Director may (if the deficiency 
     is not corrected) deem the enterprise to be engaging in an 
     unsafe or unsound practice for purposes of this 
     subsection.''; and
       (2) in subsection (c)(2), by striking ``or director'' and 
     inserting ``director, or enterprise-affiliated party''.

     SEC. 152. TEMPORARY CEASE-AND-DESIST PROCEEDINGS.

       Section 1372 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4632) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Grounds for Issuance.--
       ``(1) In general.--The Director may issue a temporary order 
     under paragraph (2) if the Director determines that the 
     violation or threatened violation or the unsafe or unsound 
     practice or practices specified in the notice of charges 
     served upon the enterprise or any enterprise-affiliated party 
     under section 1371(a), or the continuation thereof, is likely 
     to cause insolvency or significant dissipation of assets or 
     earnings of the enterprise, or is likely to weaken the 
     condition of the enterprise prior to the completion of the 
     proceedings conducted pursuant to sections 1371 and 1373.
       ``(2) Contents of order.--Upon making a determination under 
     paragraph (1), the Director may issue a temporary order 
     requiring the enterprise or such party to cease and desist 
     from any such violation or practice and to take affirmative 
     action to prevent or remedy such insolvency, dissipation, 
     condition, or prejudice pending completion of such 
     proceedings. Such order may include any requirement 
     authorized under section 1371(d).'';
       (2) in subsection (b), by striking ``or director'' and 
     inserting ``director, or enterprise-affiliated party'';
       (3) in subsection (d), striking ``or director'' and 
     inserting ``director, or enterprise-affiliated party''; and
       (4) by striking subsection (e) and in inserting the 
     following:
       ``(e) Enforcement.--
       ``(1) In general.--In the case of violation or threatened 
     violation of, or failure to obey, a temporary cease-and-
     desist order issued under this section, the Director may 
     apply to the United States District Court for the District of 
     Columbia or the United States district court within the 
     jurisdiction of which the headquarters of the enterprise is 
     located, for an injunction to enforce such order.
       ``(2) Issuance of injunction.--If the court determines that 
     there has been a violation or threatened violation or failure 
     to obey a temporary cease-and-desist order under paragraph 
     (1), the court shall issue an injunction against the 
     enterprise to enforce such order.''.

     SEC. 153. REMOVAL AND PROHIBITION AUTHORITY.

       (a) In General.--Subtitle C of the Federal Housing 
     Enterprises Financial Safety and Soundness Act (12 U.S.C. 
     4501 et seq.) is amended--
       (1) by redesignating sections 1377 through 1379B (12 U.S.C. 
     4637-41) as sections 1379 through 1379D, respectively; and
       (2) by inserting after section 1376 (12 U.S.C. 4636) the 
     following:

     ``SEC. 1377. REMOVAL AND PROHIBITION AUTHORITY.

       ``(a) Authority To Issue Order.--
       ``(1) In general.--The Director may serve upon an 
     enterprise-affiliated party a written notice of the 
     Director's intention to remove such party from office or to 
     prohibit any further participation by such party, in any 
     manner, in the conduct of the affairs of any enterprise in 
     any case to which paragraph (2) applies.
       ``(2) Criteria.--The Director may serve written notice 
     under paragraph (1) whenever the Director determines that--
       ``(A) any enterprise-affiliated party has, directly or 
     indirectly--
       ``(i) violated--

       ``(I) any law or regulation;
       ``(II) any cease-and-desist order which has become final;
       ``(III) any condition imposed in writing by the Director in 
     connection with the grant of any application or other request 
     by such enterprise; or
       ``(IV) any written agreement between such enterprise and 
     the Director;

       ``(ii) engaged or participated in any unsafe or unsound 
     practice in connection with any enterprise; or
       ``(iii) committed or engaged in any act, omission, or 
     practice which constitutes a breach of such party's fiduciary 
     duty;
       ``(B) by reason of the violation, practice, or breach 
     described in any subparagraph of paragraph (1)--
       ``(i) such enterprise has suffered or will probably suffer 
     financial loss or other damage; or
       ``(ii) such party has received financial gain or other 
     benefit by reason of such violation, practice, or breach; and
       ``(C) such violation, practice, or breach--

[[Page S11996]]

       ``(i) involves personal dishonesty on the part of such 
     party; or
       ``(ii) demonstrates willful or continuing disregard by such 
     party for the safety or soundness of such enterprise.
       ``(b) Suspension Order.--
       ``(1) Suspension or prohibition authority.--If the Director 
     serves written notice under subsection (a) to any enterprise-
     affiliated party of the Director's intention to issue an 
     order, the Director may suspend such party from office or 
     prohibit such party from further participation in any manner 
     in the conduct of the affairs of the enterprise, if the 
     Director--
       ``(A) determines that such action is necessary for the 
     protection of the enterprise; and
       ``(B) serves such party with written notice of the 
     suspension order.
       ``(2) Effective period.--Any suspension order issued under 
     this section--
       ``(A) shall become effective upon service; and
       ``(B) unless a court issues a stay of such order under 
     subsection (g), shall remain in effect and enforceable 
     until--
       ``(i) the date on which the Director dismisses the charges 
     contained in the notice served under subsection (a) with 
     respect to such party; or
       ``(ii) the effective date of an order issued by the 
     Director to such party under subsection (a).
       ``(3) Copy of order.--If the Director issues a suspension 
     order under this section to any enterprise-affiliated party, 
     the Director shall serve a copy of such order on any 
     enterprise with which such party is affiliated at the time 
     such order is issued.
       ``(c) Notice, Hearing, and Order.--
       ``(1) In general.--A notice of intention to remove an 
     enterprise-affiliated party from office or to prohibit such 
     party from participating in the conduct of the affairs of an 
     enterprise shall--
       ``(A) contain a statement of the facts constituting grounds 
     for such action; and
       ``(B) fix a time and place at which a hearing will be held 
     on such action.
       ``(2) Hearing.--The Director shall hold the hearing not 
     earlier than 30 days nor later than 60 days after the date of 
     service of notice under paragraph (1), unless an earlier or a 
     later date is set by the Director at the request of--
       ``(A) the enterprise-affiliated party, and for good cause 
     shown; or
       ``(B) the Attorney General of the United States.
       ``(3) Removal or prohibition.--
       ``(A) In general.--The Director may issue such orders of 
     suspension or removal from office, or prohibition from 
     participation in the conduct of the affairs of the 
     enterprise, if--
       ``(i) the enterprise-affiliated party named in the notice 
     issued under paragraph (1) fails to appear at the hearing in 
     person, or by a duly authorized representative; or
       ``(ii) the Director determines, based upon the record of 
     the hearing, that any of the grounds for removal or 
     prohibition specified in the notice issued under paragraph 
     (1) have been established.
       ``(B) Effective date of order.--Any order issued under 
     subparagraph (A) shall become effective at 30 days after 
     service of the order to the enterprise-affiliated party and 
     the relevant enterprise, except in the case of an order 
     issued upon consent, which shall become effective at the time 
     specified therein.
       ``(C) Term.--Any order issued under subparagraph (A) shall 
     remain effective and enforceable, except to such extent as it 
     is stayed, modified, terminated, or set aside by action of 
     the Director or a reviewing court.
       ``(d) Prohibition of Certain Specific Activities.--Any 
     person subject to an order issued under this section shall 
     not--
       ``(1) participate in any manner in the conduct of the 
     affairs of any enterprise;
       ``(2) solicit, procure, transfer, attempt to transfer, 
     vote, or attempt to vote any proxy, consent, or authorization 
     with respect to any voting rights in any enterprise;
       ``(3) violate any voting agreement previously approved by 
     the Director; or
       ``(4) vote for a director, or serve or act as an 
     enterprise-affiliated party.
       ``(e) Industry-Wide Prohibition.--
       ``(1) In general.--Except as provided in subparagraph (2), 
     any person who, pursuant to an order issued under subsection 
     (h), has been removed or suspended from office in an 
     enterprise or prohibited from participating in the conduct 
     of the affairs of an enterprise may not, while such order 
     is in effect, continue or commence to hold any office in, 
     or participate in any manner in the conduct of the affairs 
     of any enterprise.
       ``(2) Exception if director provides written consent.--If, 
     on or after the date an order is issued under this section 
     which removes or suspends from office any enterprise-
     affiliated party or prohibits such party from participating 
     in the conduct of the affairs of an enterprise, such party 
     receives the written consent of the Director, the order 
     shall, to the extent of such consent, cease to apply to such 
     party with respect to the enterprise described in the written 
     consent. If the Director grants such a written consent, the 
     Director shall publicly disclose such consent.
       ``(3) Violation of paragraph (1) treated as violation of 
     order.--Any violation of paragraph (1) by any person who is 
     subject to an order described in such subsection shall be 
     treated as a violation of the order.
       ``(f) Applicability.--This section shall only apply to a 
     person who is an individual, unless the Director specifically 
     finds that it should apply to a corporation, firm, or other 
     business enterprise.
       ``(g) Stay of Suspension and Prohibition of Enterprise-
     Affiliated Party.--Not later than 10 days after any 
     enterprise-affiliated party has been suspended from office or 
     prohibited from participation in the conduct of the affairs 
     of an enterprise under this section, such party may apply to 
     the United States District Court for the District of 
     Columbia, or the United States district court for the 
     judicial district in which the headquarters of the enterprise 
     is located, for a stay of such suspension or prohibition 
     pending the completion of the administrative proceedings 
     pursuant to the notice served upon such party under this 
     section, and such court shall have jurisdiction to stay such 
     suspension or prohibition.
       ``(h) Suspension or Removal of Enterprise-Affiliated Party 
     Charged With Felony.--
       ``(1) Suspension or prohibition.--
       ``(A) In general.--Whenever any enterprise-affiliated party 
     is charged in any information, indictment, or complaint, with 
     the commission of or participation in a crime involving 
     dishonesty or breach of trust which is punishable by 
     imprisonment for a term exceeding 1 year under State or 
     Federal law, the Director may, if continued service or 
     participation by such party may pose a threat to the 
     enterprise or impair public confidence in the enterprise, by 
     written notice served upon such party, suspend such party 
     from office or prohibit such party from further participation 
     in any manner in the conduct of the affairs of any 
     enterprise.
       ``(B) Provisions applicable to notice.--
       ``(i) Copy.--A copy of any notice under subparagraph (A) 
     shall also be served upon the relevant enterprise.
       ``(ii) Effective period.--A suspension or prohibition under 
     subparagraph (A) shall remain in effect until the 
     information, indictment, or complaint referred to in such 
     subparagraph is finally disposed of or until terminated by 
     the Director.
       ``(2) Removal or prohibition.--
       ``(A) In general.--If a judgment of conviction or an 
     agreement to enter a pretrial diversion or other similar 
     program is entered against an enterprise-affiliated party in 
     connection with a crime described in paragraph (1)(A), at 
     such time as such judgment is not subject to further 
     appellate review, the Director may, if continued service or 
     participation by such party may pose a threat to the 
     enterprise or impair public confidence in the enterprise, 
     issue and serve upon such party an order removing such party 
     from office or prohibiting such party from further 
     participation in any manner in the conduct of the affairs of 
     the enterprise without the prior written consent of the 
     Director.
       ``(B) Provisions applicable to order.--
       ``(i) Copy.--A copy of any order under paragraph (2)(A) 
     shall also be served upon the relevant enterprise, whereupon 
     the enterprise-affiliated party who is subject to the order 
     (if a director or an officer) shall cease to be a director or 
     officer of such enterprise.
       ``(ii) Effect of acquittal.--A finding of not guilty or 
     other disposition of the charge shall not preclude the 
     Director from instituting proceedings after such finding or 
     disposition to remove such party from office or to prohibit 
     further participation in enterprise affairs under subsection 
     (a), (d), or (e).
       ``(iii) Effective period.--Any notice of suspension or 
     order of removal issued under this subsection shall remain 
     effective and outstanding until the completion of any hearing 
     or appeal authorized under paragraph (4) unless terminated by 
     the Director.
       ``(3) Authority of remaining board members.--
       ``(A) In general.--If at any time, because of the 
     suspension of 1 or more directors pursuant to this section, 
     there shall be on the board of directors of an enterprise 
     less than a quorum of directors not so suspended, all powers 
     and functions vested in or exercisable by such board shall 
     vest in and be exercisable by the director or directors on 
     the board not so suspended, until such time as there shall be 
     a quorum of the board of directors.
       ``(B) Suspension of all directors.--In the event all of the 
     directors of an enterprise are suspended pursuant to this 
     section, the Director shall appoint persons to serve 
     temporarily as directors in their place and stead pending the 
     termination of such suspensions, or until such time as those 
     who have been suspended, cease to be directors of the 
     enterprise and their respective successors take office.
       ``(4) Hearing regarding continued participation.--
       ``(A) In general.--Not later than 30 days after receipt of 
     service of any notice of suspension or order of removal 
     issued under paragraph (1) or (2), the enterprise-affiliated 
     party may request in writing an opportunity to appear before 
     the Director to show that the continued service to or 
     participation in the conduct of the affairs of the enterprise 
     by such party does not, or is not likely to, pose a threat to 
     the interests of the enterprise or threaten to impair public 
     confidence in the enterprise.
       ``(B) Timing.--Upon receipt of a request for a hearing 
     under subparagraph (A), the Director shall fix a time (not 
     more than 30 days after receipt of such request, unless 
     extended at the request of such party) and place at which 
     such party may appear, personally or through counsel, before 
     the Director or 1 or more designated employees of the 
     Director,

[[Page S11997]]

     to submit written materials (or, at the discretion of the 
     Director, oral testimony) and oral argument.
       ``(C) Notification of determination.--Not later than 60 
     days after the hearing under this paragraph, the Director 
     shall notify the enterprise-affiliated party whether the 
     suspension or prohibition from participation in any manner in 
     the conduct of the affairs of the enterprise will be 
     continued, terminated, or otherwise modified, or whether the 
     order removing such party from office or prohibiting such 
     party from further participation in any manner in the conduct 
     of the affairs of the enterprise will be rescinded or 
     otherwise modified. Such notification shall contain a 
     statement of the basis for the Director's decision, if 
     adverse to such party.
       ``(D) Rules.--The Director is authorized to prescribe such 
     rules as may be necessary to carry out the purposes of this 
     subsection.
       ``(i) Hearings and Judicial Review.--
       ``(1) Venue and procedure.--
       ``(A) In general.--Any hearing provided for in this section 
     shall be held in the District of Columbia or in the Federal 
     judicial district in which the headquarters of the enterprise 
     is located, unless the party afforded the hearing consents to 
     another place, and shall be conducted in accordance with the 
     provisions of chapter 5 of title 5, United States Code.
       ``(B) Issuance of decision.--After a hearing under 
     subparagraph (A), and within 90 days after the Director has 
     notified the parties that the case has been submitted to the 
     court for final decision, the court shall render its decision 
     (which shall include findings of fact upon which its decision 
     is predicated) and shall issue and serve upon each party to 
     the proceeding an order or orders consistent with the 
     provisions of this section. Judicial review of any such order 
     shall be exclusively as provided in this subsection.
       ``(C) Modification.--Unless a petition for review is timely 
     filed in a court of appeals of the United States, as provided 
     in paragraph (2), and thereafter until the record in the 
     proceeding has been filed as so provided, the Director may at 
     any time, upon such notice and in such manner as it shall 
     deem proper, modify, terminate, or set aside any such order. 
     Upon such filing of the record, the Director may modify, 
     terminate, or set aside any such order with permission of the 
     court.
       ``(2) Review of order.--
       ``(A) In general.--Any party to any proceeding under 
     paragraph (1) may obtain a review of any order served 
     pursuant to paragraph (1) (other than an order issued with 
     the consent of the enterprise or the enterprise-affiliated 
     party concerned, or an order issued under subsection (h) of 
     this section) by filing in the United States Court of Appeals 
     for the District of Columbia Circuit or court of appeals of 
     the United States for the circuit in which the headquarters 
     of the enterprise is located, within 30 days after the date 
     of service of such order, a written petition praying that the 
     order of the Director be modified, terminated, or set aside.
       ``(B) Filing of record.--A copy of a petition filed under 
     subparagraph (A) shall be transmitted by the clerk of the 
     court to the Director, and thereupon the Director shall file 
     in the court the record in the proceeding, as provided in 
     section 2112 of title 28, United States Code.
       ``(C) Jurisdiction.--Upon the filing of a petition under 
     subparagraph (A), the court in which it is filed shall have 
     jurisdiction, which upon the filing of the record shall 
     (except as provided in the last sentence of paragraph (1)) be 
     exclusive, to affirm, modify, terminate, or set aside, in 
     whole or in part, the order of the Director.
       ``(D) Review.--Review of the petition by the court shall be 
     had as provided in chapter 7 of title 5, United States Code. 
     The judgment and decree of the court shall be final, except 
     that the same shall be subject to review by the Supreme Court 
     upon certiorari, as provided in section 1254 of title 28, 
     United States Code.
       ``(3) Proceedings not treated as stay.--The commencement of 
     proceedings for judicial review under paragraph (2) shall 
     not, unless specifically ordered by the court, operate as a 
     stay of any order issued by the Director.''.
       (b) Conforming Amendments.--
       (1) 1992 act.--Section 1317(f) of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4517(f)) is amended by 
     striking ``section 1379B'' and inserting ``section 1379D''.
       (2) Fannie mae charter act.--The second sentence of 
     subsection (b) of section 308 of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1723(b)) is 
     amended by striking ``The'' and inserting ``Except to the 
     extent that action under section 1377 of the Housing and 
     Community Development Act of 1992 temporarily results in a 
     lesser number, the''.
       (3) Freddie mac act.--The second sentence of subparagraph 
     (A) of section 303(a)(2) of the Federal Home Loan Mortgage 
     Corporation Act (12 U.S.C. 1452(a)(2)(A)) is amended by 
     striking ``The'' and inserting ``Except to the extent action 
     under section 1377 of the Housing and Community Development 
     Act of 1992 temporarily results in a lesser number, the''.

     SEC. 154. ENFORCEMENT AND JURISDICTION.

       Section 1375 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4635) is amended--
       (1) by striking subsection (a) and inserting the following:
       ``(a) Enforcement.--The Director may, in the discretion of 
     the Director, apply to the United States District Court for 
     the District of Columbia, or the United States district court 
     within the jurisdiction of which the headquarters of the 
     enterprise is located, for the enforcement of any effective 
     and outstanding notice or order issued under this subtitle or 
     subtitle B, or request that the Attorney General of the 
     United States bring such an action.  Such court shall have 
     jurisdiction and power to order and require compliance 
     with such notice or order.''; and
       (2) in subsection (b), by striking ``or 1376'' and 
     inserting ``1376, or 1377''.

     SEC. 155. CIVIL MONEY PENALTIES.

       Section 1376 of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4636) is amended--
       (1) in subsection (a), in the matter preceding paragraph 
     (1), by striking ``or any executive officer or'' and 
     inserting ``any executive officer of an enterprise, any 
     enterprise-affiliated party, or any'';
       (2) by striking subsection (b) and inserting the following:
       ``(b) Amount of Penalty.--
       ``(1) First tier.--Any enterprise which, or any enterprise-
     affiliated party who--
       ``(A) violates any provision of this title, the Federal 
     National Mortgage Association Charter Act (12 U.S.C. 1716 et 
     seq.), the Federal Home Loan Mortgage Corporation Act (12 
     U.S.C. 1451 et seq.), or any order, condition, rule, or 
     regulation under any such title or Act, except that the 
     Director may not enforce compliance with any housing goal 
     established under subpart B of part 2 of subtitle A of this 
     title, with section 1336 or 1337 of this title, with 
     subsection (m) or (n) of section 309 of the Federal National 
     Mortgage Association Charter Act (12 U.S.C. 1723a(m), (n)), 
     or with subsection (e) or (f) of section 307 of the Federal 
     Home Loan Mortgage Corporation Act (12 U.S.C. 1456(e), (f));
       ``(B) violates any final or temporary order or notice 
     issued pursuant to this title;
       ``(C) violates any condition imposed in writing by the 
     Director in connection with the grant of any application or 
     other request by such enterprise;
       ``(D) violates any written agreement between the enterprise 
     and the Director; or
       ``(E) engages in any conduct the Director determines to be 
     an unsafe or unsound practice,

     shall forfeit and pay a civil penalty of not more than 
     $10,000 for each day during which such violation continues.
       ``(2) Second tier.--Notwithstanding paragraph (1)--
       ``(A) if an enterprise, or an enterprise-affiliated party--
       ``(i) commits any violation described in any subparagraph 
     of paragraph (1);
       ``(ii) recklessly engages in an unsafe or unsound practice 
     in conducting the affairs of such enterprise; or
       ``(iii) breaches any fiduciary duty; and
       ``(B) the violation, practice, or breach--
       ``(i) is part of a pattern of misconduct;
       ``(ii) causes or is likely to cause more than a minimal 
     loss to such enterprise; or
       ``(iii) results in pecuniary gain or other benefit to such 
     party,

     the enterprise or enterprise-affiliated party shall forfeit 
     and pay a civil penalty of not more than $50,000 for each day 
     during which such violation, practice, or breach continues.
       ``(3) Third tier.--Notwithstanding paragraphs (1) and (2), 
     any enterprise which, or any enterprise-affiliated party 
     who--
       ``(A) knowingly--
       ``(i) commits any violation described in any subparagraph 
     of paragraph (1);
       ``(ii) engages in any unsafe or unsound practice in 
     conducting the affairs of such enterprise; or
       ``(iii) breaches any fiduciary duty; and
       ``(B) knowingly or recklessly causes a substantial loss to 
     such enterprise or a substantial pecuniary gain or other 
     benefit to such party by reason of such violation, practice, 
     or breach,

     shall forfeit and pay a civil penalty in an amount not to 
     exceed the applicable maximum amount determined under 
     paragraph (4) for each day during which such violation, 
     practice, or breach continues.
       ``(4) Maximum amounts of penalties for any violation 
     described in paragraph (3).--The maximum daily amount of any 
     civil penalty which may be assessed pursuant to paragraph (3) 
     for any violation, practice, or breach described in such 
     paragraph is--
       ``(A) in the case of any person other than an enterprise, 
     an amount not to exceed $2,000,000; and
       ``(B) in the case of any enterprise, $2,000,000.''; and
       (3) in subsection (d)--
       (A) by striking ``or director'' each place such term 
     appears and inserting ``director, or enterprise-affiliated 
     party'';
       (B) by striking ``request the Attorney General of the 
     United States to'';
       (C) by inserting ``, or the United States district court 
     within the jurisdiction of which the headquarters of the 
     enterprise is located,'' after ``District of Columbia''; and
       (D) by striking ``, or may, under the direction and control 
     of the Attorney General, bring such an action''.

     SEC. 156. CRIMINAL PENALTY.

       Subtitle C of title XIII of the Housing and Community 
     Development Act of 1992 (12 U.S.C. 4631 et seq.) is amended 
     by inserting after section 1377 (as added by this Act) the 
     following:

     ``SEC. 1378. CRIMINAL PENALTY.

       ``Whoever, being subject to an order in effect under 
     section 1377, without the prior written approval of the 
     Director, knowingly

[[Page S11998]]

     participates, directly or indirectly, in any manner 
     (including by engaging in an activity specifically prohibited 
     in such an order) in the conduct of the affairs of any 
     enterprise shall, notwithstanding section 3571 of title 18, 
     be fined not more than $1,000,000, imprisoned for not more 
     than 5 years, or both.''.

                     Subtitle D--General Provisions

     SEC. 161. CONFORMING AND TECHNICAL AMENDMENTS.

       (a) Amendments to 1992 Act.--Title XIII of the Housing and 
     Community Development Act of 1992 (12 U.S.C. 4501 et seq.), 
     as amended this Act, is amended--
       (1) in section 1315 (12 U.S.C. 4515)--
       (A) in subsection (a)--
       (i) in the subsection heading, by striking ``Office 
     Personnel'' and inserting ``In General''; and
       (ii) by striking ``The'' and inserting ``Subject to title 
     II of the Federal Housing Enterprise Oversight Modernization 
     Act of 2003, the'';
       (B) in subsection (d)--
       (i) in the subsection heading, by striking ``HUD'' and 
     inserting ``Department of the Treasury''; and
       (ii) by striking ``Housing and Urban Development'' and 
     inserting ``the Department of the Treasury''; and
       (C) by striking subsection (f);
       (2) in section 1319A (12 U.S.C. 4520)--
       (A) by striking ``(a) In General.--''; and
       (B) by striking subsection (b);
       (3) in section 1319F (12 U.S.C. 4525), by striking 
     paragraph (2);
       (4) in the section heading for section 1328, by striking 
     ``secretary'' and inserting ``director'';
       (5) in section 1361 (12 U.S.C. 4611)--
       (A) in subsection (e)(1), by striking the first sentence 
     and inserting the following: ``The Director shall establish 
     the risk-based capital test under this section by 
     regulation.''; and
       (B) in subsection (f), by striking ``the Secretary,'';
       (6) in section 1364(c) (12 U.S.C. 4614(c)), by striking the 
     last sentence;
       (7) in section 1367(a)(2) (12 U.S.C. 4617(a)(2)), by 
     striking ``with the written concurrence of the Secretary of 
     the Treasury,'';
       (8) by striking section 1383;
       (9) by striking ``Committee on Banking, Finance and Urban 
     Affairs'' and inserting ``Committee on Financial Services'' 
     each place such term appears in sections 1319B, 1319G(c), 
     1328(a), 1336(b)(3)(C), 1337, and 1369(a)(3); and
       (10) by striking ``Secretary'' and inserting ``Director'' 
     each place such term appears in--
       (A) subpart A of part 2 of subtitle A (except in sections 
     1322, 1324, and 1325); and
       (B) subtitle B (except in section 1361(d)(1) and 1369E).
       (b) Amendments to Table of Contents of 1992 Act.--Section 
     1(b) of the Housing and Community Development Act of 1992 (12 
     U.S.C. 81 note) is amended--
       (1) by striking the matter relating to section 1311 and 
     inserting the following:

``Sec. 1311. Establishment of Office of Federal Housing Enterprise 
              Supervision.'';

       (2) by striking the matter relating to section 1313 and 
     inserting the following:

``Sec. 1313. Duties and authorities of director.'';

       (3) by inserting after the matter relating to section 1319G 
     the following:

``Sec. 1319H. Prior approval authority for new programs.
``Sec. 1319I. Registration of stock and public disclosures.'';

       (4) by striking the matter relating to section 1319 and 
     inserting the following:

``Sec. 1319. Review of enterprises.'';

       (5) by striking the matter relating to section 1328 and 
     inserting the following:

``Sec. 1328. Reports by Director.'';

       (6) by striking the heading relating to subtitle B of title 
     XIII and inserting the following:

     Subtitle B--Required Capital Levels for Enterprises, Special 
         Enforcement Powers, and Nonmortgage-Related Assets'';

       (7) by inserting after the matter relating to section 1369D 
     the following:

``Sec. 1369E. Nonmortgage-related assets.'';

       (8) by redesignating the matter relating to sections 1377 
     through 1379B as sections 1379 through 1379D, respectively; 
     and
       (9) by inserting after the matter relating to section 1376 
     the following:

``Sec. 1377. Removal and prohibition authority.
``Sec. 1378. Criminal penalty.''.

       (c) Amendments to Fannie Mae Charter Act.--The Federal 
     National Mortgage Association Charter Act (12 U.S.C. 1716 et 
     seq.) is amended--
       (1) by striking ``Director of the Office of Federal Housing 
     Enterprise Oversight of the Department of Housing and Urban 
     Development'' each place such term appears, and inserting 
     ``Director of the Office of Federal Housing Enterprise 
     Supervision of the Department of the Treasury'', in--
       (A) section 303(c)(2) (12 U.S.C. 1718(c)(2));
       (B) section 309(d)(3)(B) (12 U.S.C. 1723a(d)(3)(B)); and
       (C) section 309(k)(1); and
       (2) in section 309(n)--
       (A) in paragraph (1), by inserting ``the Director of the 
     Office of Federal Housing Enterprise Supervision of the 
     Department of the Treasury,'' after ``Senate,''; and
       (B) in paragraph (3)(B), by striking ``Secretary'' and 
     inserting ``Director of the Office of Federal Housing 
     Enterprise Supervision of the Department of the Treasury''.
       (e) Amendments to Freddie Mac Act.--The Federal Home Loan 
     Mortgage Corporation Act (12 U.S.C. 1451 et seq.) is 
     amended--
       (1) by striking ``Director of the Office of Federal Housing 
     Enterprise Oversight of the Department of Housing and Urban 
     Development'' each place such term appears, and inserting 
     ``Director of the Office of Federal Housing Enterprise 
     Supervision of the Department of the Treasury'', in--
       (A) section 303(b)(2) (12 U.S.C. 1452(b)(2));
       (B) section 303(h)(2) (12 U.S.C. 1452(h)(2)); and
       (C) section 307(c)(1) (12 U.S.C. 1456(c)(1));
       (2) in section 306(i) (12 U.S.C. 1455(i))--
       (A) by striking ``section 1316(c)'' and inserting ``section 
     306(c)''; and
       (B) by striking ``section 106'' and inserting ``section 
     1316''; and
       (3) in section 307 (12 U.S.C. 1456)--
       (A) in subsection (f)--
       (i) in paragraph (1), by inserting ``the Director of the 
     Office of Federal Housing Enterprise Supervision of the 
     Department of the Treasury,'' after ``Senate,''; and
       (ii) in paragraph (3)(B), by striking ``Secretary'' and 
     inserting ``Director of the Office of Federal Housing 
     Enterprise Supervision of the Department of the Treasury''.
       (f) Amendment to Title 18, United States Code.--Section 
     1905 of title 18, United States Code, is amended by striking 
     ``Office of Federal Housing Enterprise Oversight'' and 
     inserting ``Office of Federal Housing Enterprise Supervision 
     of the Department of the Treasury''.
       (g) Amendments to Flood Disaster Protection Act of 1973.--
     Section 102(f)(3)(A) of the Flood Disaster Protection Act of 
     1973 (42 U.S.C. 4012a(f)(3)(A)) is amended by striking 
     ``Director of the Office of Federal Housing Enterprise 
     Oversight of the Department of Housing and Urban 
     Development'' and inserting ``Director of the Office of 
     Federal Housing Enterprise Supervision of the Department of 
     the Treasury''.
       (h) Amendment to Department of Housing and Urban 
     Development Act.--Section 5 of the Department of Housing and 
     Urban Development Act (42 U.S.C. 3534) is amended by striking 
     subsection (d).
       (i) Amendment to Title 5, United States Code.--Section 5315 
     of title 5, United States Code, is amended by striking the 
     item relating to the Director of the Office of Federal 
     Housing Enterprise Oversight, Department of Housing and Urban 
     Development and inserting the following new item:
       ``Director of the Office of Federal Housing Enterprise 
     Supervision, Department of the Treasury.''.

     SEC. 162. EFFECTIVE DATE.

       Except as specifically provided otherwise in this title, 
     the amendments made by this title shall take effect on, and 
     shall apply beginning on, the expiration of the 1-year period 
     beginning on the date of enactment of this Act.

        TITLE II--TRANSFER OF FUNCTIONS, PERSONNEL, AND PROPERTY

     SEC. 201. ABOLISHMENT OF OFHEO.

       (a) In General.--Effective at the end of the 1-year period 
     beginning on the date of enactment of this Act, the Office of 
     Federal Housing Enterprise Oversight of the Department of 
     Housing and Urban Development and the positions of the 
     Director and Deputy Director of such Office are abolished.
       (b) Disposition of Affairs.--During the 1-year period 
     beginning on the date of enactment of this Act, the Director 
     of the Office of Federal Housing Enterprise Oversight shall, 
     solely for the purpose of winding up the affairs of the 
     Office of Federal Housing Enterprise Oversight--
       (1) manage the employees of such Office and provide for the 
     payment of the compensation and benefits of any such employee 
     which accrue before the effective date of any transfer of 
     such employee pursuant to section 203; and
       (2) may take any other action necessary for the purpose of 
     winding up the affairs of the Office.
       (c) Status of Employees as Federal Agency Employees.--The 
     amendments made by title I and the abolishment of the Office 
     of Federal Housing Enterprise Oversight under subsection (a) 
     of this section may not be construed to affect the status of 
     any employee of such Office as employees of an agency of the 
     United States for purposes of any other provision of law 
     during any time such employee is so employed.
       (d) Use of Property and Services.--
       (1) Property.--The Director of the Office of Federal 
     Housing Enterprise Supervision of the Department of the 
     Treasury may use the property of the Office of Federal 
     Housing Enterprise Oversight to perform functions that have 
     been transferred to the Director of the Office of Federal 
     Housing Enterprise Supervision for such time as is reasonable 
     to facilitate the orderly transfer of functions under any 
     other provision of this Act, or any amendment made by this 
     Act to any other provision of law.
       (2) Agency services.--Any agency, department, or other 
     instrumentality of the United States, and any successor to 
     any such agency, department, or instrumentality, which was 
     providing supporting services to the Office of Federal 
     Housing Enterprise Oversight before the expiration of the 
     period under subsection (a) in connection with functions that

[[Page S11999]]

     are transferred to the Director of the Office of Federal 
     Housing Enterprise Supervision of the Department of the 
     Treasury shall--
       (A) continue to provide such services, on a reimbursable 
     basis, until the transfer of such functions is complete; and
       (B) consult with any such agency to coordinate and 
     facilitate a prompt and reasonable transition.
       (e) Savings Provisions.--
       (1) Existing rights, duties, and obligations not 
     affected.--Subsection (a) shall not affect the validity of 
     any right, duty, or obligation of the United States, the 
     Director of the Office of Federal Housing Enterprise 
     Oversight, or any other person, which--
       (A) arises under or pursuant to the title XIII of the 
     Housing and Community Development Act of 1992 (12 U.S.C. 4501 
     et seq.), the Federal National Mortgage Association Charter 
     Act (12 U.S.C. 1716 et seq.), the Federal Home Loan Mortgage 
     Corporation Act (12 U.S.C. 1451 et seq.), or any other 
     provision of law applicable with respect to such Office; and
       (B) existed on the day before the abolishment under 
     subsection (a) of this section.
       (2) Continuation of suits.--No action or other proceeding 
     commenced by or against the Director of the Office of Federal 
     Housing Enterprise Oversight shall abate by reason of the 
     enactment of this Act, except that the Director of the Office 
     of Federal Housing Enterprise Supervision of the Department 
     of the Treasury shall be substituted for the Director of the 
     Office of Federal Housing Enterprise Oversight as a party to 
     any such action or proceeding.

     SEC. 202. CONTINUATION AND COORDINATION OF CERTAIN 
                   REGULATIONS.

       All regulations, orders, determinations, and resolutions 
     that--
       (1) were issued, made, prescribed, or allowed to become 
     effective by--
       (A) the Office of Federal Housing Enterprise Oversight;
       (B) the Secretary of Housing and Urban Development and that 
     relate to the Secretary's authority under--
       (i) title XIII of the Housing and Community Development Act 
     of 1992 (12 U.S.C. 4501 et seq.);
       (ii) the Federal National Mortgage Association Charter Act 
     (12 U.S.C. 1716 et seq.), with respect to the Federal 
     National Mortgage Association; or
       (iii) the Federal Home Loan Mortgage Corporation Act (12 
     U.S.C. 1451 et seq.); or
       (C) a court of competent jurisdiction and that relate to 
     functions transferred by this Act; and
       (2) are in effect on the date of the abolishment under 
     section 201(a) of this Act,

     shall remain in effect according to the terms of such 
     regulations, orders, determinations, and resolutions, and 
     shall be enforceable by or against the Director of the Office 
     of Federal Housing Enterprise Supervision of the Department 
     of the Treasury until modified, terminated, set aside, or 
     superseded in accordance with applicable law by such Board, 
     any court of competent jurisdiction, or operation of law.

     SEC. 203. TRANSFER AND RIGHTS OF EMPLOYEES OF OFHEO.

       (a) Authority To Transfer.--The Director of the Office of 
     Federal Housing Enterprise Supervision of the Department of 
     the Treasury may transfer employees of the Office of Federal 
     Housing Enterprise Oversight to the Office of Federal Housing 
     Enterprise Supervision for employment no later than the date 
     of the abolishment under section 201(a) of this Act, as the 
     Director considers appropriate. This Act and the amendments 
     made by this Act shall not be considered to result in the 
     transfer of any function from one agency to another or the 
     replacement of 1 agency by another, for purposes of section 
     3505 of title 5, United States Code, except to the extent 
     that the Director of the Office of Federal Housing Enterprise 
     Supervision specifically provides so.
       (b) Appointment Authority for Excepted and Senior Executive 
     Service Employees.--
       (1) In general.--Subject to paragraph (2), in the case of 
     employees occupying positions in the excepted service or the 
     Senior Executive Service, any appointment authority 
     established pursuant to law or regulations of the Office of 
     Personnel Management for filling such positions shall be 
     transferred.
       (2) Decline of transfer.--The Director of the Office of 
     Federal Housing Enterprise Supervision of the Department of 
     the Treasury may decline a transfer of authority under 
     paragraph (1) (and the employees appointed pursuant thereto) 
     to the extent that such authority relates to positions 
     excepted from the competitive service because of their 
     confidential, policy-making, policy-determining, or policy-
     advocating character, and noncareer positions in the Senior 
     Executive Service (within the meaning of section 3132(a)(7) 
     of title 5, United States Code).
       (c) Reorganization.--If the Director of the Office of 
     Federal Housing Enterprise Supervision of the Department of 
     the Treasury determines, after the end of the 1-year period 
     beginning on the date of the abolishment under section 
     201(a), that a reorganization of the combined work force is 
     required, that reorganization shall be deemed a major 
     reorganization for purposes of affording affected employees 
     retirement under section 8336(d)(2) or 8414(b)(1)(B) of title 
     5, United States Code.
       (d) Employee Benefit Programs.--
       (1) In general.--Any employee of the Office of Federal 
     Housing Enterprise Oversight accepting employment with the 
     Director of the Office of Federal Housing Enterprise 
     Supervision of the Department of the Treasury as a result of 
     a transfer under subsection (a) may retain for 18 months 
     after the date such transfer occurs membership in any 
     employee benefit program of the Director of the Office of 
     Federal Housing Enterprise Supervision of the Department of 
     the Treasury or the Office of Federal Housing Enterprise 
     Oversight, as applicable, including insurance, to which such 
     employee belongs on the date of the abolishment under section 
     201(a) if--
       (A) the employee does not elect to give up the benefit or 
     membership in the program; and
       (B) the benefit or program is continued by the Director of 
     the Office of Federal Housing Enterprise Supervision.
       (2) Payment of differential.--The difference in the costs 
     between the benefits which would have been provided by such 
     agency and those provided by this section shall be paid by 
     the Director of the Office of Federal Housing Enterprise 
     Supervision. If any employee elects to give up membership in 
     a health insurance program or the health insurance program is 
     not continued by such Director, the employee shall be 
     permitted to select an alternate Federal health insurance 
     program within 30 days of such election or notice, without 
     regard to any other regularly scheduled open season.

     SEC. 204. TRANSFER OF PROPERTY AND FACILITIES.

       Upon the abolishment under section 201(a), all property of 
     the Office of Federal Housing Enterprise Oversight shall 
     transfer to the Director of the Office of Federal Housing 
     Enterprise Supervision of the Department of the Treasury.
                                 ______
                                 
      By Mr. DASCHLE (for Mr. Graham of Florida):
  S. 1658. A bill to make residents of Puerto Rico eligible for the 
earned income tax credit, the refundable portion of the child tax 
credit, and supplemental security income benefits; to the Committee on 
Finance.
  (At the request of Mr. Daschle, the following statement was ordered 
to be printed in the Record.)
  Mr. GRAHAM. Mr. President, the Commonwealth of Puerto Rico has been a 
territory of the United States since 1898. Since 1917, people born in 
Puerto Rico have been citizens of the United States under Federal laws 
applicable in the territory.
  One of the interesting, and most misunderstood, aspects of Puerto 
Rico's unique relationship with the United States, is that the U.S. 
citizens who reside there are not required to file tax returns and pay 
income tax on the money they earn on the island. That might lead one to 
conclude that this is a huge benefit to the majority of people who live 
on the island. The reality, however, is that well over half--and 
perhaps as much as three-quarters--of Puerto Rican families would 
likely owe no U.S. income tax if they were taxed in the same manner as 
other citizens.
  Why? Because Puerto Rico struggles with a high rate of poverty. 
Fifty-eight percent of Puerto Rican children live below the national 
poverty level--which is an improvement from 67 percent in the early 
1990s. That means that today more than one-half of Puerto Rican 
children live in a family that earns less than $17,000 a year. In 
contrast, the State with the highest child poverty rate, Mississippi, 
has a child poverty rate of 27 percent.
  For over 30 years, U.S. policy toward improving the economic 
situation on the island has focused on corporate tax incentives. Today, 
I am introducing legislation that focuses on providing direct stimulus 
to the part of economy in Puerto Rico that has been neglected--Puerto 
Rican families and children. Putting money into the hands of the people 
who will spend it will provide the most direct stimulus for the economy 
of the island.
  This bill puts Puerto Rican families on par with other families in 
America by extending to them the benefits of our social safety net. 
Specifically, the bill makes residents of Puerto Rico eligible for the 
earned income tax credit, the refundable per child tax credit, and the 
Supplemental Security Income program.
  Although Puerto Rican families are not subject to the Federal income 
tax, they do pay Federal payroll taxes. Just like other working 
families in America that work hard and play by the rules, low-income 
employees in Puerto Rico deserve relief from those payroll taxes. The 
earned income tax credit and the refundable portion of the child tax 
credit have long been recognized as an effective way to provide such 
relief. The Puerto Rico Economic Stimulus Act says that families in 
Puerto Rico should also be able to claim these credits, in the same 
way, and subject to the

[[Page S12000]]

same limitations, as families in Florida, Tennessee, Texas, or New 
York.
  Workers in Puerto Rico pay payroll taxes like all other Americans. 
While some may disagree with the notion of providing refundable credits 
to offset payroll taxes that is a different debate than whether low-
income families in Puerto Rico should be treated the same as low-income 
families in the 50 States. This is a matter of equity, not tax policy.
  I ask unanimous consent that the full text of this bill be printed in 
the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1658

       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 ``Puerto Rico Economic 
     Stimulus Act of 2003''.

     SEC. 2. PUERTO RICO RESIDENTS ELIGIBLE FOR EARNED INCOME TAX 
                   CREDIT.

       (a) In General.--Section 32 of the Internal Revenue Code of 
     1986 (relating to earned income) is amended by inserting at 
     the end the following new subsection:
       ``(n) Residents of Puerto Rico.--
       ``(1) In general.--In the case of residents of Puerto Rico, 
     this section shall be applied--
       ``(A) by substituting `United States or Puerto Rico' for 
     `United States' in subsections (c)(1)(A)(ii)(I) and 
     (c)(3)(E),
       ``(B) by substituting `nonresident alien individual (other 
     than a resident of Puerto Rico)' for `nonresident alien 
     individual' in subsection (c)(1)(E), and
       ``(C) by substituting `gross income (computed without 
     regard to section 933)' for `gross income' in subsections 
     (a)(2)(B) and (c)(2)(A)(i).
       ``(2) Phase-in of credit.--
       ``(A) In general.--The credit allowable under this section 
     by reason of this subsection shall not exceed the applicable 
     percentage of the amount of credit which would otherwise be 
     allowable under this section (without regard to this 
     paragraph).
       ``(B) Applicable percentage.--The applicable percentage 
     shall be determined as follows:

The applicable percentage is--ear beginning in--
  2004..........................................................10 ....

  2005..........................................................20 ....

  2006..........................................................30 ....

  2007..........................................................40 ....

  2008..........................................................50 ....

  2009..........................................................60 ....

  2010..........................................................70 ....

  2011..........................................................80 ....

  2012..........................................................90 ....

  2013 and thereafter.......................................100.''.....

       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     2003.

     SEC. 3. REFUNDABLE CHILD TAX CREDIT ALLOWABLE TO RESIDENTS OF 
                   PUERTO RICO WITH LESS THAN 3 CHILDREN.

       (a) In General.--Paragraph (1) of section 24(d) of the 
     Internal Revenue Code of 1986 (relating to portion of credit 
     refundable) is amended by inserting at the end the following 
     new sentence: ``For purposes of this paragraph, taxable 
     income shall be computed without regard to section 933.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to taxable years beginning after December 31, 
     2003.
       (c) Applicability.--
       (1) In general.--Any credit allowable by reason of the 
     amendment made by subsection (a) shall not exceed the 
     applicable percentage of the amount of credit which would 
     otherwise be allowable under section 24(d)(1) (without regard 
     to this subsection).
       (2) Applicable percentage.--The applicable percentage shall 
     be determined as follows:

The applicable percentage is--r beginning in--
  2004..........................................................10 ....

  2005..........................................................20 ....

  2006..........................................................30 ....

  2007..........................................................40 ....

  2008..........................................................50 ....

  2009..........................................................60 ....

  2010..........................................................70 ....

  2011..........................................................80 ....

  2012..........................................................90 ....

  2013 and thereafter..........................................100.....

     SEC. 4. SSI TO APPLY TO RESIDENTS OF PUERTO RICO.

       (a) In General.--Section 1614(e) of the Social Security Act 
     is amended by striking ``and the District of Columbia'' and 
     inserting ``, the District of Columbia, and the Commonwealth 
     of Puerto Rico''.
       (b) Application.--Section 1611 of the Social Security Act 
     is amended by adding at the end the following:

 ``Limitation on Benefits for Residents of the Commonwealth of Puerto 
                                  Rico

       ``(j) Notwithstanding any other provision of this title, in 
     the case of an individual who is a resident of the 
     Commonwealth of Puerto Rico who is eligible to receive a 
     monthly benefit under this title, the monthly benefits 
     payable under this title shall not exceed--
       ``(1) for each month occurring in 2004, 10 percent of the 
     monthly benefits that would, but for the application of this 
     subsection, be paid to the individual under this title;
       ``(2) for each month occurring in 2005, 20 percent of the 
     monthly benefits that would, but for the application of this 
     subsection, be paid to the individual under this title;
       ``(3) for each month occurring in 2006, 30 percent of the 
     monthly benefits that would, but for the application of this 
     subsection, be paid to the individual under this title;
       ``(4) for each month occurring in 2007, 40 percent of the 
     monthly benefits that would, but for the application of this 
     subsection, be paid to the individual under this title;
       ``(5) for each month occurring in 2008, 50 percent of the 
     monthly benefits that would, but for the application of this 
     subsection, be paid to the individual under this title;
       ``(6) for each month occurring in 2009, 60 percent of the 
     monthly benefits that would, but for the application of this 
     subsection, be paid to the individual under this title;
       ``(7) for each month occurring in 2010, 70 percent of the 
     monthly benefits that would, but for the application of this 
     subsection, be paid to the individual under this title;
       ``(8) for each month occurring in 2011, 80 percent of the 
     monthly benefits that would, but for the application of this 
     subsection, be paid to the individual under this title; and
       ``(9) for each month occurring in 2012, 90 percent of the 
     monthly benefits that would, but for the application of this 
     subsection, be paid to the individual under this title.''.
       (c) Termination of Other Programs for Residents of Puerto 
     Rico.--
       (1) Title I.--Title I of the Social Security Act is amended 
     by inserting at the end the following:


               ``termination for residents of puerto rico

       ``Sec. 7. This title shall not apply to residents of the 
     Commonwealth of Puerto Rico after 2012.''.
       (2) Title X.--Title X of the Social Security Act is amended 
     by inserting at the end the following:


               ``termination for residents of puerto rico

       ``Sec. 1007. This title shall not apply to residents of the 
     Commonwealth of Puerto Rico after 2012.''.
       (3) Title XIV.--Title XIV of the Social Security Act is 
     amended by inserting at the end the following:


               ``termination for residents of puerto rico

       ``Sec. 1406. This title shall not apply to residents of the 
     Commonwealth of Puerto Rico after 2012.''.
       (4) Title XVI.--Title XVI of the Social Security Act, as 
     applicable with respect to the Commonwealth of Puerto Rico 
     before the date of the enactment of this Act, shall not apply 
     after 2012.
       (d) Effective Date.--The amendments made by subsections (a) 
     and (b) shall apply to benefits payable in months beginning 
     on or after January 1, 2004.
                                 ______
                                 
      By Mr. CAMPBELL (for himself, Mr. Domenici, Mr. Allard, and Mr. 
        Reid):
  S. 1660. A bill to improve water quality on abandoned and inactive 
mine land, and for other purposes; to the Committee on Environment and 
Public Works.
  Mr. CAMPBELL. Mr. President, I rise today to introduce the Good 
Samaritan Abandoned and Inactive Mine Reclamation Act of 2003.
  I have been involved with efforts to clean up abandoned hardrock 
mines for a long time. In fact, I was an original cosponsor of a bill 
in the 106th Congress. The Western Governors Association regarded that 
the bill as a first step in the right direction, and I am proud to 
build and improve upon that experience in crafting my own legislation.
  Abandoned hardrock mines pose significant environmental and safety 
hazards to communities across the Western United States. In fact, the 
Western Governor's Association concluded that there are at least 
400,000 such sites across the West, many of which cover our public 
lands.
  The history of abandoned hardrock mines is linked to government 
policies promoting the westward expansion of our Nation, and Federal 
policies during times of war. Due to the historic nature of these 
sites, the party responsible for the environmental problem is not 
always identifiable or not economically viable to be compelled to clean 
up the site.
  Abandoned mine lands (AMLs) are areas adjacent to or affected by 
abandoned mines. They often contain unmined mineral deposits, mine 
dumps, and tailings that contaminate the surrounding watershed and 
ecosystem. Streams near AML sites--including many in Colorado--may 
contain metals or be so acidic that fish and aquatic insects cannot 
live in them. Water too polluted for fish and insects is also water too 
polluted for people. Further, abandoned mine sites pose very real 
safety hazards for folks enjoying the West's wild lands.
  Although abandoned hardrock mining in the West goes back a hundred 
years, the Clean Water Act has only been in existence for thirty. The 
Clean

[[Page S12001]]

Water Act was an important and historic piece of legislation that did a 
lot of good, but it failed to promote the reclamation of abandoned 
hardrock mine sites. In fact, if an environmental group or county or 
interested party wanted to clean an abandoned mine site, they would 
incur liability under the Act.
  The Western Governors Association has repeatedly called on Congress 
to amend the Clean Water Act's National Pollutant Discharge Elimination 
System permit program. The WGA stated that the NPDES program ``has 
become an overwhelming disincentive for any voluntary cleanup efforts 
of AMLs because of the liability that can be inherited for any 
discharges from an abandoned mine site remaining after cleanup, even 
though the volunteering remediating party had no previous 
responsibility or liability for the site, and has reduced the water 
quality impacts from the site by completing a cleanup project.''
  My bill recognizes that there are a lot of good, responsible folks 
across our Western communities who recognize the environmental harm 
that AMLs pose and finally gives them the tools to do something about 
it. My bill establishes a ``Good Samaritan'' permit program under the 
Clean Water Act, administered by the EPA or a State-approved agency 
allowing an applicant to develop a strategy to remediate an affected 
area, and be granted a permit to do the work without penalizing them 
for their good deed.
  In order to be granted a Good Samaritan permit, my bill requires an 
applicant to meet comprehensive standards ensuring that they have the 
financial and technical resources to get the job done. An applicant 
must establish remediation and monitoring schedules for the clean up 
project and identify funding sources to carry out the plan.
  My bill's goal is to promote the clean-up of abandoned hardrock 
mines. Therefore, it allows communities, interest stakeholder groups, 
and corporations, as coalitions or individually to be ``Good 
Samaritans.'' The transparent and publicly open permit application 
process helps to ensure that permit holders are acting in good faith 
and have the technical and financial wherewithal to get the job done.
  Further, if a permit holder is found to have violated the terms of 
the permit, he or she could lose their liability protection and subject 
to an enforcement action.
  The West's States, communities, and interested parties have been 
prevented from cleaning up their own communities for far too long. My 
bill provides a transparent, flexible, and enforceable permit system 
that removes the unintentional liability associated with abandoned 
hardrock mine cleanup.
  I look forward to working with my colleagues on speedy passage of 
this important legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1660

       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 ``Good Samaritan Abandoned and 
     Inactive Mine Remediation Act''.

     SEC. 2. FINDINGS AND PURPOSE.

       (a) Findings.--Congress finds that--
       (1) the Federal Government has encouraged, through various 
     laws and policies, the development of gold, silver, and other 
     minerals, especially in the West;
       (2) development of the resources referred to in paragraph 
     (1) has--
       (A) helped create a strong economy; and
       (B) provided strategic materials to achieve maximum 
     production of the metals that were essential to victory in 
     World War I and World War II;
       (3) during World War I and World War II, the Federal 
     Government actively encouraged mining and milling operations, 
     including the design and placement of mine tailings and waste 
     rock piles, practices--
       (A) that were not governed by any Federal or State 
     environmental laws during that period;
       (B) the impact of which on the environment and public 
     health were unknown; and
       (C) that since that period, have been--
       (i) found to be harmful to the environment; and
       (ii) made illegal;
       (4) the result of the practices is a legacy of abandoned 
     and inactive mine sites, many of which are on Federal land, 
     that--
       (A) have been unreclaimed or, based on existing 
     environmental standards, inadequately reclaimed; and
       (B) continue to pose environmental and safety hazards;
       (5) the cleanup of the abandoned and inactive mine sites is 
     hampered primarily by concerns about the potential liability 
     associated with the cleanup.
       (b) Purpose.--The purpose of this Act is to facilitate the 
     cleanup of abandoned and inactive mine sites by limiting the 
     potential liability of persons cleaning up the sites.

     SEC. 3. ABANDONED AND INACTIVE MINE REMEDIATION PERMITS.

       Section 402 of the Federal Water Pollution Control Act (33 
     U.S.C. 1342) is amended by adding at the end the following:
       ``(r) Abandoned and Inactive Mine Remediation Permits.--
       ``(1) Definitions.--In this subsection:
       ``(A) Abandoned or inactive mine land.--
       ``(i) In general.--The term `abandoned or inactive mine 
     land' means land--

       ``(I) that was actively mined for noncoal resources;
       ``(II) that is not--

       ``(aa) being actively mined for noncoal resources; or
       ``(bb) subject to a temporary shutdown; and

       ``(III) with respect to which there is no identifiable or 
     economically viable owner or operator of record for the mine 
     or mine facilities.

       ``(ii) Exclusions.--The term `abandoned or inactive mine 
     land' does not include--

       ``(I) a site listed on the National Priorities List under 
     the Comprehensive Environmental Response, Compensation, and 
     Liability Act of 1980 (42 U.S.C. 9601 et seq.); or
       ``(II) a brownfield site (as defined in section 101 of that 
     Act (42 U.S.C. 9601).

       ``(B) Permit.--The term `permit' means an abandoned or 
     inactive mine remediation permit described in paragraph (2).
       ``(C) Permitting agent.--The term `permitting agent' 
     means--
       ``(i) the Administrator; or
       ``(ii) the head of a State program that is authorized by 
     the Administrator to issue and administer permits under this 
     subsection.
       ``(D) Remediating party.--
       ``(i) In general.--The term `remediating party' means any 
     of the following persons or entities that carries out the 
     remediation of an abandoned or inactive mine land:

       ``(I)(aa) The United States, a State, a political 
     subdivision of a State, or an Indian tribe; or
       ``(bb) any officer, employee, or contractor of the United 
     States, a State, a political subdivision of a State, or an 
     Indian tribe.
       ``(II) A corporation.
       ``(III) Any person or entity acting in cooperation with the 
     permittee with respect to the abandoned or inactive mine 
     land.

       ``(ii) Exclusions.--The term `remediating party' does not 
     include a person or entity described in clause (i) that, with 
     respect to the abandoned or inactive mine land that is being 
     remediated, has been determined to be legally responsible or 
     in material noncompliance with section 301(a).
       ``(E) Unanticipated event or condition.--The term 
     `unanticipated event or condition' means an event or 
     condition that was not contemplated by the permit.
       ``(2) In general.--The permitting agent may issue an 
     abandoned or inactive mine remediation permit for the conduct 
     of remediation activities on abandoned or inactive mine land 
     from which there is or may be a discharge of pollutants to 
     bodies of water of the United States.
       ``(3) Application for permit.--
       ``(A) Components.--
       ``(i) In general.--To be eligible to receive a permit under 
     this subsection, the remediating party shall submit to the 
     permitting agent an application that includes a remediation 
     plan that--

       ``(I) identifies--

       ``(aa) the remediating party;
       ``(bb) any agents or contractors of the remediating party; 
     and
       ``(cc) any persons cooperating with the remediating party 
     with respect to the remediation plan;

       ``(II) describes the reasonable efforts of the remediating 
     party to identify current owners, lessees, and claimants of 
     the abandoned or inactive mine land addressed by the 
     remediation plan;
       ``(III) certifies that the remediating party qualifies as a 
     remediating party under paragraph (1)(D);
       ``(IV) identifies that the site addressed by the plan is--

       ``(aa) abandoned or inactive mine land; and
       ``(bb) eligible for a permit under this Act;

       ``(V) identifies the bodies of water of the United States 
     affected by the abandoned or inactive mine land;
       ``(VI) describes the baseline condition of the bodies of 
     water identified under subclause (V), in accordance with 
     requirements established by the permitting authority, as of 
     the date of the permit application (including any conditions 
     that make numeric monitoring of a baseline preexisting 
     discharge physically or economically infeasible);
       ``(VII) describes the physical conditions at the site that 
     are causing or believed to be causing adverse water quality 
     impacts;
       ``(VIII) describes the goals and objectives of remediation, 
     including the pollutant or pollutants to be addressed by the 
     remediation plan;
       ``(IX)(aa) describes the practices that are proposed to 
     reduce, control, mitigate, or eliminate the impacts of 
     adverse water quality, including the preliminary system 
     design

[[Page S12002]]

     and construction, operation, and maintenance plans; and
       ``(bb) includes a schedule and estimated completion date of 
     the practices;
       ``(X) applies site-specific best available technology, 
     using best professional judgment, to explain how the 
     practices described in subclause (IX) are expected to improve 
     the quality of the bodies of water identified under subclause 
     (V);
       ``(XI) describes--

       ``(aa) site-specific monitoring or other forms of 
     assessment to be used to evaluate the success of the 
     practices during and after implementation of the remediation 
     plan in improving the quality of the water identified under 
     subclause (V); and
       ``(bb) the duration of the monitoring or assessment;

       ``(XII)(aa) describes any extraction, processing, or 
     removal of minerals for remediation or commercial sale; and
       ``(bb) states that 100 percent of the net profits generated 
     through the use or commercial sale of minerals under item 
     (aa) that will be--

       ``(AA) used for future remediation; or
       ``(BB) deposited in a designated remediation fund;

       ``(XIII) provides a schedule for periodic reporting on 
     progress in implementing the remediation plan; and
       ``(XIV)(aa) provides a budget for the remediation plan; and
       ``(bb) identifies any potential funding sources for 
     carrying out the remediation plan.

       ``(ii) Certification by corporation.--

       ``(I) In general.--In addition to the requirements under 
     clause (i), an application submitted by a corporation shall 
     include a certification in accordance with paragraph 
     (1)(D)(ii) that, based on the knowledge and belief of the 
     officers and directors of the corporation, neither the 
     corporation nor any wholly owned subsidiary of the 
     corporation is legally responsible for or in material 
     noncompliance with section 301(a) or an equivalent State law 
     for the site proposed to be remediated.
       ``(II) Limitation.--If at any time the permitting agent 
     determines that the certification under subclause (I) is 
     incorrect, the corporation--

       ``(aa) shall not be entitled to the protection under this 
     subsection; and
       ``(bb) shall be subject to liability under this section or 
     section 301, 302, or 402.
       ``(B) Approval or disapproval of application.--
       ``(i) In general.--Not later than 120 days after the date 
     of receipt of an application under subparagraph (A), the 
     permitting agent shall approve or disapprove the application.
       ``(ii) Public participation.--Before approving or 
     disapproving an application under clause (i), the permitting 
     agent shall provide to the public--

       ``(I) notice of the application; and
       ``(II) an opportunity for public comment on the 
     application.

       ``(iii) Approval.--The permitting agent shall approve an 
     application under clause (i) and issue a permit to the 
     remediating party if the permitting agent determines that--

       ``(I) the remediating party has made a reasonable effort 
     (relative to the resources available to the remediating party 
     for the proposed remediation activity) to identify persons 
     under subparagraph (A)(i)(II);
       ``(II) the implementation of the remediation plan would 
     improve the quality of the water identified under 
     subparagraph (A)(i)(V); and
       ``(III) any Indian tribe with jurisdiction over the 
     abandoned or inactive mine land subject to the permit 
     consents to the issuance of the permit.

       ``(iv) Action following disapproval.--

       ``(I) Revision.--If the permitting agent disapproves an 
     application under clause (i), the permitting agent shall--

       ``(aa) notify the applicant of the reasons for disapproval; 
     and
       ``(bb) allow the applicant 30 days in which to submit a 
     revised application.

       ``(II) Deadline for revision.--Not later than 30 days after 
     the date on which a revision is submitted under subclause 
     (I)(bb), the permitting agent shall approve or disapprove the 
     revision.

       ``(4) Contents of permit.--
       ``(A) In general.--A permit shall--
       ``(i) provide for compliance with and implementation of the 
     remediation plan; and
       ``(ii) establish a schedule for review by the permitting 
     agent of compliance with and implementation of the 
     remediation plan.
       ``(B) Limitation.--A permit shall not--
       ``(i) require the remediating party to comply with any 
     other subsection or section 301, 302, or 402; or
       ``(ii) except in a case in which the net profits (as stated 
     under paragraph (3)(A)(i)(XII)(bb)) generated through such 
     use or sale of minerals are used for present or future 
     remediation activities, authorize any discharge associated 
     with the extraction, processing, or removal of minerals for 
     commercial use or sale.
       ``(5) Modification of permit.--
       ``(A) In general.--Not later than 90 days after the date of 
     receipt of a written request by a permittee to modify a 
     permit, the permitting agent shall approve or disapprove a 
     modification to the permit.
       ``(B) Approval.--A modification to a permit approved by the 
     permitting agent under this subsection shall--
       ``(i) be made by agreement of the permittee and the 
     permitting agent and with the concurrence of any applicable 
     State or Indian tribe with jurisdiction over the abandoned or 
     inactive mine land subject to the permit;
       ``(ii) be made in accordance with subparagraphs (2)(B) and 
     (3); and
       ``(iii) take effect on approval.
       ``(6) Failure to comply.--If a remediating party fails to 
     comply with any term or condition of a permit under this 
     subsection, the failure shall be considered to be a violation 
     subject to enforcement under sections 309 and 505, except in 
     a case in which--
       ``(A)(i) based on information submitted to the permitting 
     agent by the permittee, the permitting agent determines that 
     the noncompliance was the result of an unanticipated event or 
     condition; and
       ``(ii) not later than 30 days after the date on which a 
     determination is made under clause (i), the permittee 
     establishes, to the satisfaction of the permitting agent, 
     that the permittee is in compliance with the permit; or
       ``(B)(i) the permitting agent determines that compliance 
     with the permit is infeasible because of reasons not 
     contemplated at the time at which the permit was issued; and
       ``(ii) the permitting agent and the permittee modify the 
     permit in accordance with paragraph (5).
       ``(7) Termination of permit.--
       ``(A) In general.--The permitting agent shall terminate a 
     permit if--
       ``(i) the remediating party completes the implementation of 
     the remediation plan;
       ``(ii) the discharges covered by the permit become subject 
     to a permit that is issued--

       ``(I) under another subsection; and
       ``(II) for the extraction, processing, or removal of 
     minerals for commercial sale, the net profits of which shall 
     be used for purposes other than the purposes described in 
     paragraph (3)(A)(i)(XII)(bb)--

       ``(aa) that is not part of the implementation of the 
     remediation plan; and
       ``(bb) with respect to which the remediating party is not a 
     participant;
       ``(iii) an unanticipated event or condition is encountered 
     that is beyond the control of the remediating party; or
       ``(iv) the permitting agent determines that remediation 
     activities conducted under the permit have resulted in 
     surface water quality conditions that are equal to or better 
     than the baseline condition of the water as of the date of 
     the permit application.
       ``(B) No enforcement liability.--If a permit is terminated 
     under subparagraph (A), the remediating party shall not be 
     subject to enforcement under section 309 or 505 for any 
     subsequent discharges from the abandoned or inactive mine 
     land subject to the permit.
       ``(8) Limitations.--
       ``(A) In general.--A remediating party issued a permit 
     under this subsection and, for purposes of conducting a 
     preliminary investigation of a site to determine whether to 
     pursue a permit application, a potential applicant for a 
     permit, for a period of not more than 120 days unless 
     otherwise stated by the permitting authority, shall not be 
     considered to be an owner or operator for purposes of--
       ``(i) this Act;
       ``(ii) the Comprehensive Environmental Response, 
     Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et 
     seq.); or
       ``(iii) the Solid Waste Disposal Act (42 U.S.C. 6901 et 
     seq.).
       ``(B) Prior violations.--With respect to violations of this 
     section, or sections 301, 302, and 402 that occur before the 
     date on which a permit is issued under this subsection, 
     nothing in this subsection--
       ``(i) precludes an action under section 309 or 505 for such 
     violations; or
       ``(ii) affects the relief available under section 309 or 
     505.
       ``(9) Regulations.--Not later than 1 year after the date of 
     enactment of this subsection, the Administrator, in 
     consultation with State, tribal, and local officials and 
     after notice and opportunity for public comment, shall 
     promulgate regulations that--
       ``(A) establish requirements for remediation plans under 
     this subsection; and
       ``(B) provide guidance for the development of State 
     programs for the issuance and administration of permits under 
     this subsection.
       ``(10) Funding.--A remediating party that implements a 
     remediation plan under a permit issued under this subsection 
     shall be eligible for grants under section 319(h).
       ``(11) Effect.--Nothing in this subsection--
       ``(A) limits the liability associated with any mining or 
     processing activities in existence before, on, or after the 
     date of enactment of this subsection; or
       ``(B) affects any obligation of a State or Indian tribe 
     under section 303.''.
                                 ______
                                 
      By Mrs. DOLE:
  S. 1663. A bill to replace certain Coastal Barrier Resources System 
maps; to the Committee on Environment and Public Works.
  Mrs. DOLE. Mr. President, I ask unanimous consent that the text of 
the legislation, ``To replace certain Coastal Barrier Resources System 
maps'' be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1663

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

[[Page S12003]]

     SECTION 1. REPLACEMENT OF CERTAIN COASTAL BARRIER RESOURCES 
                   SYSTEM MAPS.

       (a) In General.--The 2 maps subtitled ``NC-07P'', relating 
     to the Coastal Barrier Resources System unit designated as 
     Coastal Barrier Resources System Cape Fear Unit NC-07P, that 
     are included in the set of maps entitled ``Coastal Barrier 
     Resources System'' and referred to in section 4(a) of the 
     Coastal Barrier Resources Act (16 U.S.C. 3503(a)), are hereby 
     replaced by 2 other maps relating to those units entitled 
     ``Coastal Barrier Resources System Cape Fear Unit, NC-07P'' 
     and dated February 18, 2003.
       (b) Availability.--The Secretary of the Interior shall keep 
     the maps referred to in subsection (a) on file and available 
     for inspection in accordance with the provisions of section 
     4(b) of the Coastal Barrier Resources Act (16 U.S.C. 
     3503(b)).

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