[Congressional Record Volume 154, Number 128 (Wednesday, July 30, 2008)]
[House]
[Pages H7519-H7530]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     COMMODITY MARKETS TRANSPARENCY AND ACCOUNTABILITY ACT OF 2008

  Mr. PETERSON of Minnesota. Mr. Speaker, I move to suspend the rules 
and pass the bill (H.R. 6604) to amend the Commodity Exchange Act to 
bring greater transparency and accountability to commodity markets, and 
for other purposes, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 6604

       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 ``Commodity Markets 
     Transparency and Accountability Act of 2008''.

     SEC. 2. TABLE OF CONTENTS.

       The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Definition of energy commodity.
Sec. 4. Speculative limits and transparency of off-shore trading.
Sec. 5. Disaggregation of index funds and other data in energy and 
              agriculture markets.
Sec. 6. Detailed reporting from index traders and swap dealers.
Sec. 7. Transparency and recordkeeping authorities.
Sec. 8. Trading limits to prevent excessive speculation.
Sec. 9. Modifications to core principles applicable to position limits 
              for contracts in agricultural and energy commodities.
Sec. 10. CFTC Administration.
Sec. 11. Review of prior actions.
Sec. 12. Review of over-the-counter markets.
Sec. 13. Studies; reports.
Sec. 14. Over-the-counter authority.
Sec. 15. Expedited process.

     SEC. 3. DEFINITION OF ENERGY COMMODITY.

       (a) Definition of Energy Commodity.--Section 1a of the 
     Commodity Exchange Act (7 U.S.C. 1a) is amended--
       (1) by redesignating paragraphs (13) through (34) as 
     paragraphs (14) through (35), respectively; and
       (2) by inserting after paragraph (12) the following:
       ``(13) Energy commodity.--The term `energy commodity' 
     means--
       ``(A) coal;
       ``(B) crude oil, gasoline, diesel fuel, jet fuel, heating 
     oil, and propane;
       ``(C) electricity;
       ``(D) natural gas; and
       ``(E) any other substance that is used as a source of 
     energy, as the Commission, in its discretion, deems 
     appropriate.''.
       (b) Conforming Amendments.--
       (1) Section 2(c)(2)(B)(i)(II)(cc) of the Commodity Exchange 
     Act (7 U.S.C. 2(c)(2)(B)(i)(II)(cc)) is amended--
       (A) in subitem (AA), by striking ``section 1a(20)'' and 
     inserting ``section 1a(21)''; and
       (B) in subitem (BB), by striking ``section 1a(20)'' and 
     inserting ``section 1a(21)''.
       (2) Section 13106(b)(1) of the Food, Conservation, and 
     Energy Act of 2008 is amended by striking ``section 1a(32)'' 
     and inserting ``section 1a''.
       (3) Section 402 of the Legal Certainty for Bank Products 
     Act of 2000 (7 U.S.C. 27) is amended--
       (A) in subsection (a)(7), by striking ``section 1a(20)'' 
     and inserting ``section 1a''; and
       (B) in subsection (d)--
       (i) in paragraph (1)(B), by striking ``section 1a(33)'' and 
     inserting ``section 1a''; and
       (ii) in paragraph (2)(D), by striking ``section 1a(13)'' 
     and inserting ``section 1a''.

     SEC. 4. SPECULATIVE LIMITS AND TRANSPARENCY OF OFF-SHORE 
                   TRADING.

       (a) In General.--Section 4 of the Commodity Exchange Act (7 
     U.S.C. 6) is amended by adding at the end the following:
       ``(e) Foreign Boards of Trade.--

[[Page H7520]]

       ``(1) In general.--The Commission may not permit a foreign 
     board of trade to provide to the members of the foreign board 
     of trade or other participants located in the United States 
     direct access to the electronic trading and order matching 
     system of the foreign board of trade with respect to an 
     agreement, contract, or transaction in an energy or 
     agricultural commodity that settles against any price 
     (including the daily or final settlement price) of 1 or more 
     contracts listed for trading on a registered entity, unless--
       ``(A) the foreign board of trade makes public daily trading 
     information regarding the agreement, contract, or transaction 
     that is comparable to the daily trading information published 
     by the registered entity for the 1 or more contracts against 
     which the agreement, contract, or transaction traded on the 
     foreign board of trade settles; and
       ``(B) the foreign board of trade (or the foreign futures 
     authority that oversees the foreign board of trade)--
       ``(i) adopts position limits (including related hedge 
     exemption provisions) for the agreement, contract, or 
     transaction that are comparable, taking into consideration 
     the relative sizes of the respective markets, to the position 
     limits (including related hedge exemption provisions) adopted 
     by the registered entity for the 1 or more contracts against 
     which the agreement, contract, or transaction traded on the 
     foreign board of trade settles;
       ``(ii) has the authority to require or direct market 
     participants to limit, reduce, or liquidate any position the 
     foreign board of trade (or the foreign futures authority that 
     oversees the foreign board of trade) determines to be 
     necessary to prevent or reduce the threat of price 
     manipulation, excessive speculation as described in section 
     4a, price distortion, or disruption of delivery or the cash 
     settlement process;
       ``(iii) agrees to promptly notify the Commission of any 
     change regarding--

       ``(I) the information that the foreign board of trade will 
     make publicly available;
       ``(II) the position limits that the foreign board of trade 
     or foreign futures authority will adopt and enforce;
       ``(III) the position reductions required to prevent 
     manipulation, excessive speculation as described in section 
     4a, price distortion, or disruption of delivery or the cash 
     settlement process; and
       ``(IV) any other area of interest expressed by the 
     Commission to the foreign board of trade or foreign futures 
     authority;

       ``(iv) provides information to the Commission regarding 
     large trader positions in the agreement, contract, or 
     transaction that is comparable to the large trader position 
     information collected by the Commission for the 1 or more 
     contracts against which the agreement, contract, or 
     transaction traded on the foreign board of trade settles; and
       ``(v) provides the Commission with information necessary to 
     publish reports on aggregate trader positions for the 
     agreement, contract, or transaction traded on the foreign 
     board of trade that are comparable to such reports for 1 or 
     more contracts against which the agreement, contract, or 
     transaction traded on the foreign board of trade settles.
       ``(2) Existing foreign boards of trade.--Paragraph (1) 
     shall not be effective with respect to any agreement, 
     contract, or transaction in an energy commodity executed on a 
     foreign board of trade to which the Commission had granted 
     direct access permission before the date of the enactment of 
     this subsection until the date that is 180 days after such 
     date of enactment.''.
       (b) Liability of Registered Persons Trading on a Foreign 
     Board of Trade.--
       (1) Section 4(a) of such Act (7 U.S.C. 6(a)) is amended by 
     inserting ``or by subsection (f)'' after ``Unless exempted by 
     the Commission pursuant to subsection (c)''.
       (2) Section 4 of such Act (7 U.S.C. 6) is further amended 
     by adding at the end the following:
       ``(f) A person registered with the Commission, or exempt 
     from registration by the Commission, under this Act may not 
     be found to have violated subsection (a) with respect to a 
     transaction in, or in connection with, a contract of sale of 
     a commodity for future delivery if the person has reason to 
     believe the transaction and the contract is made on or 
     subject to the rules of a board of trade that is legally 
     organized under the laws of a foreign country, authorized to 
     act as a board of trade by a foreign futures authority, 
     subject to regulation by the foreign futures authority, and 
     has not been determined by the Commission to be operating in 
     violation of subsection (a).''.
       (c) Contract Enforcement for Foreign Futures Contracts.--
     Section 22(a) of such Act (7 U.S.C. 25(a)) is amended by 
     adding at the end the following:
       ``(5) A contract of sale of a commodity for future delivery 
     traded or executed on or through the facilities of a board of 
     trade, exchange, or market located outside the United States 
     for purposes of section 4(a) shall not be void, voidable, or 
     unenforceable, and a party to such a contract shall not be 
     entitled to rescind or recover any payment made with respect 
     to the contract, based on the failure of the foreign board of 
     trade to comply with any provision of this Act.''.

     SEC. 5. DISAGGREGATION OF INDEX FUNDS AND OTHER DATA IN 
                   ENERGY AND AGRICULTURE MARKETS.

       Section 4 of the Commodity Exchange Act (7 U.S.C. 6), as 
     amended by section 4 of this Act, is amended by adding at the 
     end the following:
       ``(g) Disaggregation of Index Funds and Other Data in 
     Energy and Agriculture Markets.--Subject to section 8 and 
     beginning within 30 days of the issuance of the final rule 
     required by section 4h, the Commission shall disaggregate and 
     make public weekly--
       ``(1) the number of positions and total value of index 
     funds and other passive, long-only and short-only positions 
     (as defined by the Commission) in all energy and agricultural 
     markets to the extent such information is available; and
       ``(2) data on speculative positions relative to bona fide 
     physical hedgers in those markets to the extent such 
     information is available.''.

     SEC. 6. DETAILED REPORTING FROM INDEX TRADERS AND SWAP 
                   DEALERS.

       Section 4 of the Commodity Exchange Act (7 U.S.C. 6), as 
     amended by sections 4 and 5 of this Act, is amended by adding 
     at the end the following:
       ``(h) Index Traders and Swap Dealers Reporting.--The 
     Commission shall issue a proposed rule defining and 
     classifying index traders and swap dealers (as those terms 
     are defined by the Commission) for purposes of data reporting 
     requirements and setting routine detailed reporting 
     requirements for such entities in designated contract 
     markets, derivatives transaction execution facilities, 
     foreign boards of trade subject to section 4(e), and 
     electronic trading facilities with respect to significant 
     price discovery contracts with respect to exempt and 
     agricultural commodities not later than 60 days after the 
     date of the enactment of this subsection, and issue a final 
     rule within 120 days after such date of enactment.''.

     SEC. 7. TRANSPARENCY AND RECORDKEEPING AUTHORITIES.

       (a) In General.--Section 4g(a) of the Commodity Exchange 
     Act (7 U.S.C. 6g(a)) is amended--
       (1) by inserting ``a'' before ``futures commission 
     merchant''; and
       (2) by inserting ``and transactions and positions traded 
     pursuant to subsection (g), (h)(1), or (h)(2) of section 2, 
     or any exemption issued by the Commission by rule, regulation 
     or order,'' after ``United States or elsewhere,''.
       (b) Reports of Deals Equal to or in Excess of Trading 
     Limits.--Section 4i of such Act (7 U.S.C. 6i) is amended--
       (1) in the first sentence--
       (A) by inserting ``(a)'' before ``It shall''; and
       (B) by inserting ``in the United States or elsewhere, and 
     of transactions and positions in any such commodity entered 
     into pursuant to subsection (g), (h)(1), or (h)(2) of section 
     2, or any exemption issued by the Commission by rule, 
     regulation or order'' before ``, and of cash or spot''; and
       (2) by striking all that follows the 1st sentence and 
     inserting the following:
       ``(b) With respect to agricultural and energy commodities, 
     upon special call by the Commission, any person shall provide 
     to the Commission, in a form and manner and within the period 
     specified in the special call, books and records of all 
     transactions and positions traded on or subject to the rules 
     of any board of trade or electronic trading facility in the 
     United States or elsewhere, or pursuant to subsection (g), 
     (h)(1), or (h)(2) of section 2, or any exemption issued by 
     the Commission by rule, regulation, or order, as the 
     Commission may determine appropriate to deter and prevent 
     price manipulation or any other disruption to market 
     integrity or to diminish, eliminate, or prevent excessive 
     speculation as described in section 4a(a).
       ``(c) Such books and records described in subsections (a) 
     and (b) shall show complete details concerning all such 
     transactions, positions, inventories, and commitments, 
     including the names and addresses of all persons having any 
     interest therein, shall be kept for a period of 5 years, and 
     shall be open at all times to inspection by any 
     representative of the Commission or the Department of 
     Justice. For the purposes of this section, the futures and 
     cash or spot transactions and positions of any person shall 
     include such transactions and positions of any persons 
     directly or indirectly controlled by the person.''.
       (c) Conforming Amendments.--
       (1) Section 2(g) of such Act (7 U.S.C. 2(g)) is amended--
       (A) by inserting ``4g(a), 4i,'' before ``5a (to''; and
       (B) by inserting ``, and the regulations of the Commission 
     pursuant to section 4c(b) requiring reporting in connection 
     with commodity option transactions,'' before ``shall apply''.
       (2) Section 2(h)(2)(A) of such Act (7 U.S.C. 2(h)(2)(A)) is 
     amended to read as follows:
       ``(A) sections 4g(a), 4i, 5b and 12(e)(2)(B), and the 
     regulations of the Commission pursuant to section 4c(b) 
     requiring reporting in connection with commodity option 
     transactions;''.

     SEC. 8. TRADING LIMITS TO PREVENT EXCESSIVE SPECULATION.

       Section 4a of the Commodity Exchange Act (7 U.S.C. 6a) is 
     amended--
       (1) in subsection (a)--
       (A) by inserting ``(1)'' after ``(a)''; and
       (B) by adding after and below the end the following:
       ``(2) In accordance with the standards set forth in 
     paragraph (1) of this subsection and consistent with the good 
     faith exception

[[Page H7521]]

     cited in subsection (b)(2), with respect to agricultural 
     commodities enumerated in section 1a(4) and energy 
     commodities, the Commission, within 60 days after the date of 
     the enactment of this paragraph, shall by rule, regulation, 
     or order establish limits on the amount of positions, other 
     than bona fide hedge positions, that may be held by any 
     person with respect to contracts of sale for future delivery 
     or with respect to options on such contracts or commodities 
     traded on or subject to the rules of a contract market or 
     derivatives transaction execution facility, or on an 
     electronic trading facility as a significant price discovery 
     contract.
       ``(3) In establishing the limits required in paragraph (2), 
     the Commission shall set limits--
       ``(A) on the number of positions that may be held by any 
     person for the spot month, each other month, and the 
     aggregate number of positions that may be held by any person 
     for all months;
       ``(B) to the maximum extent practicable, in its 
     discretion--
       ``(i) to diminish, eliminate, or prevent excessive 
     speculation as described under this section;
       ``(ii) to deter and prevent market manipulation, squeezes, 
     and corners;
       ``(iii) to ensure sufficient market liquidity for bona fide 
     hedgers; and
       ``(iv) to ensure that the price discovery function of the 
     underlying market is not disrupted; and
       ``(C) to the maximum extent practicable, in its discretion, 
     take into account the total number of positions in fungible 
     agreements, contracts, or transactions that a person can hold 
     in agricultural and energy commodities in other markets.
       ``(4)(A) Not later than 150 days after the date of the 
     enactment of this paragraph, the Commission shall convene a 
     Position Limit Agricultural Advisory Group and a Position 
     Limit Energy Group, each group consisting of representatives 
     from--
       ``(i) 7 predominantly commercial short hedgers of the 
     actual physical commodity for future delivery;
       ``(ii) 7 predominantly commercial long hedgers of the 
     actual physical commodity for future delivery;
       ``(iii) 4 non-commercial participants in markets for 
     commodities for future delivery; and
       ``(iv) each designated contract market or derivatives 
     transaction execution facility upon which a contract in the 
     commodity for future delivery is traded, and each electronic 
     trading facility that has a significant price discovery 
     contract in the commodity.
       ``(B) Not later than 60 days after the date on which the 
     advisory groups are convened under subparagraph (A), and 
     annually thereafter, the advisory groups shall submit to the 
     Commission advisory recommendations regarding the position 
     limits to be established in paragraph (2) and a 
     recommendation as to whether the position limits should be 
     administered directly by the Commission, or by the registered 
     entity on which the commodity is listed (with enforcement by 
     both the registered entity and the Commission).''; and
       (2) in subsection (c)--
       (A) by inserting ``(1)'' after ``(c)''; and
       (B) by adding after and below the end the following:
       ``(2) With respect to agricultural and energy commodities, 
     for the purposes of contracts of sale for future delivery and 
     options on such contracts or commodities, the Commission 
     shall define what constitutes a bona fide hedging transaction 
     or position as a transaction or position that--
       ``(A)(i) represents a substitute for transactions to be 
     made or positions to be taken at a later time in a physical 
     marketing channel;
       ``(ii) is economically appropriate to the reduction of 
     risks in the conduct and management of a commercial 
     enterprise; and
       ``(iii) arises from the potential change in the value of--
       ``(I) assets that a person owns, produces, manufactures, 
     processes, or merchandises or anticipates owning, producing, 
     manufacturing, processing, or merchandising;
       ``(II) liabilities that a person owns or anticipates 
     incurring; or
       ``(III) services that a person provides, purchases, or 
     anticipates providing or purchasing; or
       ``(B) reduces risks attendant to a position resulting from 
     a transaction that--
       ``(i) was executed pursuant to subsection (g), (h)(1), or 
     (h)(2) of section 2, or an exemption issued by the Commission 
     by rule, regulation or order; and
       ``(ii) was executed opposite a counterparty for which the 
     transaction would qualify as a bona fide hedging transaction 
     pursuant to paragraph (2)(A) of this subsection.''.

     SEC. 9. MODIFICATIONS TO CORE PRINCIPLES APPLICABLE TO 
                   POSITION LIMITS FOR CONTRACTS IN AGRICULTURAL 
                   AND ENERGY COMMODITIES.

       (a) Contracts Traded on Contract Markets.--Section 5(d)(5) 
     of the Commodity Exchange Act (7 U.S.C. 7(d)(5)) is amended 
     by striking all that follows ``adopt'' and inserting ``, for 
     speculators, position limitations with respect to 
     agricultural commodities enumerated in section 1a(4) or 
     energy commodities, and position limitations or position 
     accountability with respect to other commodities, where 
     necessary and appropriate.''.
       (b) Contracts Traded on Derivatives Transaction Execution 
     Facilities.--Section 5a(d)(4) of such Act (7 U.S.C. 7a(d)(4)) 
     is amended by striking all that follows ``adopt'' and 
     inserting ``, for speculators, position limitations with 
     respect to energy commodities, and position limitations or 
     position accountability with respect to other commodities, 
     where necessary and appropriate for a contract, agreement or 
     transaction with an underlying commodity that has a 
     physically deliverable supply.''.
       (c) Significant Price Discovery Contracts.--Section 
     2(h)(7)(C)(ii)(IV) of such Act (7 U.S.C. 2(h)(7)(C)(ii)(IV)) 
     is amended by striking ``where necessary'' and all that 
     follows through ``in significant price discovery contracts'' 
     and inserting ``for speculators, position limitations with 
     respect to significant price discovery contracts in energy 
     commodities, and position limitations or position 
     accountability with respect to significant price discovery 
     contracts in other commodities''.

     SEC. 10. CFTC ADMINISTRATION.

       (a) Additional Commodity Futures Trading Commission 
     Employees for Improved Enforcement.--Section 2(a)(7) of the 
     Commodity Exchange Act (7 U.S.C. 2(a)(7)) is amended by 
     adding at the end the following:
       ``(D) Additional employees.--As soon as practicable after 
     the date of the enactment of this subparagraph, subject to 
     appropriations, the Commission shall appoint at least 100 
     full-time employees (in addition to the employees employed by 
     the Commission as of the date of the enactment of this 
     subparagraph)--
       ``(i) to increase the public transparency of operations in 
     agriculture and energy markets;
       ``(ii) to improve the enforcement of this Act in those 
     markets; and
       ``(iii) to carry out such other duties as are prescribed by 
     the Commission.''.
       (b) Inspector General of Commodity Futures Trading 
     Commission.--
       (1) Elevation of office.--
       (A) Inclusion of cftc in definition of establishment.--
     Section 11(2) of the Inspector General Act of 1878 (5 U.S.C. 
     App.) is amended by striking ``or the Export-Import Bank,'' 
     and inserting ``, the Export-Import Bank, or the Commodity 
     Futures Trading Commission,''.
       (B) Exclusion of cftc from definition of designated federal 
     entity.--Section 8G(a)(2) of such Act (5 U.S.C. App.) is 
     amended by striking ``the Commodity Futures Trading 
     Commission,''.
       (2) Transition.--Until such time as the Inspector General 
     of the Commodity Futures Trading Commission is appointed in 
     accordance with section 3 of the Inspector General Act of 
     1978, the Office of Inspector General of the Commission shall 
     continue in effect as provided in such Act before the date of 
     the enactment of this Act.

     SEC. 11. REVIEW OF PRIOR ACTIONS.

       Notwithstanding any other provision of the Commodity 
     Exchange Act, the Commodity Futures Trading Commission shall 
     review, as appropriate, all regulations, rules, exemptions, 
     exclusions, guidance, no action letters, orders, other 
     actions taken by or on behalf of the Commission, and any 
     action taken pursuant to the Commodity Exchange Act by an 
     exchange, self-regulatory organization, or any other 
     registered entity, that are currently in effect, to ensure 
     that such prior actions are in compliance with the provisions 
     of this Act.

     SEC. 12. REVIEW OF OVER-THE-COUNTER MARKETS.

       (a) Study.--The Commodity Futures Trading Commission shall 
     conduct a study--
       (1) to determine the efficacy, practicality, and 
     consequences of establishing limits on the amount of 
     positions, other than bona fide hedge positions, that may be 
     held by any person with respect to agreements, contracts, or 
     transactions involving an agricultural or energy commodity, 
     conducted in reliance on sections 2(g) and 2(h) of the 
     Commodity Exchange Act and of any exemption issued by the 
     Commission by rule, regulation or order, that are fungible 
     (as defined by the Commission) with agreements, contracts, or 
     transactions traded on or subject to the rules of any board 
     of trade or of any electronic trading facility with respect 
     to a signifcant price discovery contract, as a means to deter 
     and prevent price manipulation or any other disruption to 
     market integrity or to diminish, eliminate, or prevent 
     excessive speculation as described in section 4a of such Act 
     for physical-based agricultural or energy commodities; and
       (2) to determine the efficacy, practicality, and 
     consequences of establishing aggregate position limits for 
     similar agreements, contracts, or transactions for physical-
     based agricultural or energy commodities traded--
       (A) on designated contract markets;
       (B) on derivatives transaction execution facilities; and
       (C) in reliance on such sections 2(g) and 2(h) and of any 
     exemption issued by the Commission by rule, regulation or 
     order.
       (b) Public Hearings.--The Commission shall provide for not 
     less than 2 public hearings to take testimony, on the record, 
     as part of the fact- gathering process in preparation of the 
     report.
       (c) Report and Recommendations.--Not less than 12 months 
     after the date of the enactment of this section, the 
     Commission shall provide to the Committee on Agriculture of 
     the House of Representatives and the Committee on 
     Agriculture, Nutrition, and Forestry of the Senate a report 
     that--
       (1) describes the results of the study; and
       (2) provides recommendations on any actions necessary to 
     deter and prevent price

[[Page H7522]]

     manipulation or any other disruption to market integrity or 
     to diminish, eliminate, or prevent excessive speculation as 
     described in section 4a of the Commodity Exchange Act for 
     physical-based commodities, including--
       (A) any additional statutory authority that the Commission 
     determines to be necessary to implement the recommendations; 
     and
       (B) a description of the resources that the Commission 
     considers to be necessary to implement the recommendations.

     SEC. 13. STUDIES; REPORTS.

       (a) Study Relating to International Regulation of Energy 
     Commodity Markets.--
       (1) In general.--The Comptroller General of the United 
     States shall conduct a study of the international regime for 
     regulating the trading of energy commodity futures and 
     derivatives.
       (2) Analysis.--The study shall include an analysis of, at a 
     minimum--
       (A) key common features and differences among countries in 
     the regulation of energy commodity trading, including with 
     respect to market oversight and enforcement standards and 
     activities;
       (B) variations among countries with respect to the use of 
     position limits, position accountability levels, or other 
     thresholds to detect and prevent price manipulation, 
     excessive speculation as described in section 4a of the 
     Commodity Exchange Act, or other unfair trading practices;
       (C) variations in practices regarding the differentiation 
     of commercial and noncommercial trading;
       (D) agreements and practices for sharing market and trading 
     data among futures authorities and between futures 
     authorities and the entities that the futures authorities 
     oversee; and
       (E) agreements and practices for facilitating international 
     cooperation on market oversight, compliance, and enforcement.
       (3) Report.--Not later than 1 year after the date of the 
     enactment of this Act, the Comptroller General shall submit 
     to the Committee on Agriculture of the House of 
     Representatives and the Committee on Agriculture, Nutrition, 
     and Forestry of the Senate a report that--
       (A) describes the results of the study;
       (B) addresses whether there is excessive speculation, and 
     if so, the effects of any such speculation and energy price 
     volatility on energy futures; and
       (C) provides recommendations to improve openness, 
     transparency, and other necessary elements of a properly 
     functioning market in a manner that protects consumers in the 
     United States.
       (b) Study Relating to Effects of Speculators on Agriculture 
     and Energy Futures Markets and Agriculture and Energy 
     Prices.--
       (1) Study.--The Comptroller General of the United States 
     shall conduct a study of the effects of speculators on 
     agriculture and energy futures markets and agriculture and 
     energy prices.
       (2) Analysis.--The study shall include an analysis of, at a 
     minimum--
       (A) the effect of increased amounts of capital in 
     agriculture and energy futures markets;
       (B) the impact of the roll-over of positions by index fund 
     traders and swap dealers on agriculture and energy futures 
     markets and agriculture and energy prices; and
       (C) the extent to which each factor described in 
     subparagraphs (A) and (B) and speculators--
       (i) affect--

       (I) the pricing of agriculture and energy commodities; and
       (II) risk management functions; and

       (ii) contribute to economically efficient price discovery.
       (3) Report.--Not later than 2 years after the date of the 
     enactment of this Act, the Comptroller General shall submit 
     to the Committee on Agriculture of the House of 
     Representatives and the Committee on Agriculture, Nutrition, 
     and Forestry of the Senate a report that describes the 
     results of the study.

     SEC. 14. OVER-THE-COUNTER AUTHORITY.

       (a) In General.--Section 2 of the Commodity Exchange Act (7 
     U.S.C. 2) is amended by adding at the end the following:
       ``(j) Over-the-Counter Authority.--
       ``(1) Within 60 days after the date of the enactment of 
     this subsection, the Commission shall, by rule, regulation, 
     or order, require routine reporting as it deems in its 
     discretion appropriate, on not less than a monthly basis, of 
     agreements, contracts, or transactions, with regard to an 
     agricultural or energy commodity, entered into in reliance on 
     subsection (g), (h)(1), or (h)(2) of section 2, or any 
     exemption issued by the Commission by rule, regulation, or 
     order that are fungible (as defined by the Commission) with 
     agreements, contracts, or transactions traded on or subject 
     to the rules of any board of trade or of any electronic 
     trading facility with respect to a significant price 
     discovery contract.
       ``(2) Notwithstanding subsections (g), (h)(1), and (h)(2) 
     of section 2, and any exemption issued by the Commission by 
     rule, regulation, or order, the Commission shall assess and 
     issue a finding on whether the agreements, contracts, or 
     transactions reported pursuant to paragraph (1), alone or in 
     conjunction with other similar agreements, contracts, or 
     transactions, have the potential to--
       ``(A) disrupt the liquidity or price discovery function on 
     a registered entity;
       ``(B) cause a severe market disturbance in the underlying 
     cash or futures market for an agricultural or energy 
     commodity; or
       ``(C) prevent or otherwise impair the price of a contract 
     listed for trading on a registered entity from reflecting the 
     forces of supply and demand in any market for an agricultural 
     commodity enumerated in section 1a(4) or an energy commodity.
       ``(3) If the Commission makes a finding pursuant to 
     paragraph (2) of this subsection, the Commission may, in its 
     discretion, utilize its authority under section 8a(9) to 
     impose position limits (including, as appropriate and in its 
     discretion, related hedge exemption provisions for bona fide 
     hedging comparable to bona fide hedge provisions of section 
     4a(c)(2)) on agreements, contracts, or transactions involved, 
     and take corrective actions to enforce the limits.''.
       (b) Conforming Amendments.--
       (1) Section 2(g) of such Act (7 U.S.C. 2(g)) is amended by 
     inserting ``subsection (j) of this section, and'' after 
     ``(other than''.
       (2) Section 2(h)(2)(A) of such Act (7 U.S.C. 2(h)(2)(A)) is 
     amended by inserting ``subsection (j) of this section and'' 
     before ``sections''.
       (3) Section 8a(9) of such Act (7 U.S.C. 12a(a)(9)) is 
     amended by inserting after ``of the Commission's action'' the 
     following: ``, and to fix and enforce limits to agreements, 
     contracts, or transaction subject to section 2(j)(1) pursuant 
     to a finding made under section 2(j)(2)''.

     SEC. 15. EXPEDITED PROCESS.

       The Commodity Futures Trading Commission may use emergency 
     and expedited procedures (including any administrative or 
     other procedure as appropriate) to carry out this Act if, in 
     its discretion, it deems it necessary to do so.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Minnesota (Mr. Peterson) and the gentleman from Virginia (Mr. 
Goodlatte) each will control 20 minutes.
  The Chair recognizes the gentleman from Minnesota.
  Mr. PETERSON of Minnesota. Mr. Speaker, I yield myself such time as I 
may consume.
  Mr. Speaker, H.R. 6604, the Commodity Markets Transparency and 
Accountability Act of 2008, will strengthen oversight of the commodity 
and futures markets for energy and agriculture commodities. It toughens 
position limits on oil and other futures markets as a way to prevent 
potential price distortions caused by excessive speculative trading. It 
extends CFTC oversight to previously exempt over-the-counter markets 
and calls for new full-time CFTC staff to improve enforcement, prevent 
manipulation, and prosecute fraud.
  I want to thank my friend and ranking member, Mr. Goodlatte of 
Virginia, for the work that he has done on this legislation, not only 
in committee, but in the many meetings that we have had. We have worked 
I think and done our work in the best bipartisan fashions, and I thank 
him for that.
  I also want to thank the gentleman from North Carolina, the chairman 
of the General Farm Commodities and Risk Management Subcommittee, Mr. 
Bob Etheridge of North Carolina, for taking the lead on CFTC oversight 
on our committee and for his work on this legislation.
  If it is all right with the gentleman from Virginia, in light of the 
work Mr. Etheridge has done, I will yield to him to do his presentation 
now and then I will finish mine later. I want to recognize Mr. 
Etheridge for 3 minutes. He has been a real leader on our side on this 
issue.
  Mr. ETHERIDGE. I thank the gentleman.
  Mr. Speaker, I am pleased to join Chairman Peterson and Ranking 
Member Goodlatte in bringing the Commodity Markets Transparency and 
Accountability Act to the House floor for consideration.
  During 3 days of hearings this month, expert after expert told the Ag 
Committee that at least part of the spike in energy prices could be 
caused by excessive speculation in energy futures trading. We owe it to 
the American consumer to ensure that gas prices are reflective of true 
market value and are not being artificially inflated by investors 
trying to make an easy quick buck. We cannot allow excessive 
speculation on Wall Street to cause folks to suffer on Main Street. 
That is why, as the chairman of the subcommittee that oversees the 
Commodity Futures Trading Commission, I worked with Chairman Peterson 
and Ranking Member Goodlatte to write today's bill.
  This legislation will give the CFTC additional tools and authority to 
keep our markets free of manipulation and

[[Page H7523]]

excessive speculation. We wrote the bill very carefully to ensure that 
it would not affect proper market activity. We are simply giving the 
CFTC the tools to do the job the American consumers entrusted it to do, 
to weed out improper or illegal market activity.
  Since 2000, volume on commodity markets has increased six-fold; but 
staffing levels at the CFTC have fallen to the lowest level in the 
agency's 33-year history. Right now we need more cops on the beat. The 
bill will require CFTC to hire the 100 additional staff people it needs 
to effectively monitor the futures industry, including our energy 
markets.
  Currently the CFTC is investigating whether market manipulation has 
occurred in energy markets. One firm has already been charged, but the 
commission needs additional staff to carry out this investigation, and 
the rest of its duties.
  Additionally, the bill will require greater transparency and 
disclosure from investors. A little sunshine goes a long way to scaring 
off bad actors. We also close the London loophole, and toughen position 
limits and the hedge exemption.
  Today's bill is not a cure-all for our energy crisis but is one 
important step that could provide some relief to families who are 
struggling. I urge all of my colleagues to support this piece of 
legislation.

                              {time}  1330

  Mr. GOODLATTE. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I would like to thank the gentleman from Minnesota, the 
chairman of the committee, and the gentleman from North Carolina, for 
their hard work, particularly the gentleman from Minnesota. He thought 
that, following the passage of the farm bill earlier this year, that he 
would have a lighter burden. And instead, we have devoted a substantial 
amount of time to this legislation. Six hearings were held, more than 
30 witnesses were invited before the committee, and literally, dozens 
of meetings took place as well to reach the point we are at. And I want 
to commend him for that work.
  And I think that he has done a very good job in fending off some very 
bad ideas that the committee heard about from other Members and from 
others who wanted the committee to do a whole lot more than we are 
doing in this legislation.
  But I will tell you that I think, quite frankly, the whole process is 
one that is not complete. We really shouldn't be bringing this up the 
day before the Congress recesses for August. We should take it up in 
September, after this particular bill has been examined more closely by 
more people and has, perhaps even held a hearing on the legislation 
itself.
  Nonetheless, I understand the constraints he is under. He has been 
advised that we have to take this legislation up now. And that is what 
is really troubling to me the most about the legislation. I am going to 
support it. I think it is a modest improvement in the oversight of our 
commodity markets. And certainly, if there is excessive speculation in 
the energy markets, we all favor curbing that abuse.
  But quite frankly, what we really are not getting to do is what took 
place in the last vote we just cast, the decision to adjourn this 
Congress this week without anything on the calendar this week to deal 
with the problem that is most concerning the American people, and that 
is the fact that we do not have a program to increase the domestic 
supply of American energy.
  And we, on the Republican side, just last week, introduced 
legislation that already has 120 cosponsors or more, the American 
Energy Act, that would do all of the above. It would increase 
production of oil and natural gas, which we badly need, given the price 
that we are facing at the pump. It would have incentives for the 
development and expansion of nuclear power, clean burning coal 
technology. It would have incentives for the development of exciting 
new prospects for new types of energy, it would promote solar and wind 
power and renewable fuels and hydrogen technology. It would promote 
conservation, which the American people are already being forced to do 
because of the high price of energy they are facing at the gas pump 
today.
  And I talked to a woman just last week who informed me that to fill 
the tank at her home with kerosene that will heat her home next winter 
she has been told will cost her $2,400.
  We need to be producing increased production, American production of 
energy. That is what we should be debating here today. That is what 
should be on the floor today. And I do not understand why the 
leadership on the other side of the aisle will not allow us to have a 
vote on this.
  It is very clear that the overwhelming majority of the American 
people want to see us take action on this. It is very clear that the 
significant number of Members on the other side of the aisle would join 
with virtually all of the Republicans on this side of the aisle in 
supporting legislation to make America energy independent. But we are 
not getting that vote, and the reason we are not getting that vote is 
because the leadership on the other side will not allow it.
  What do they have to be afraid of in an American democracy that we 
can't vote on the American Energy Act?
  That is what this is really all about. They want to go home and say 
they have done something about energy, when, in point of fact, they 
have done nothing about the supply of energy in this country because 
they will not allow us to vote on increasing the supply. That is what 
this legislation should be addressing, but instead, we are going to 
address legislation that simply reforms what is being done in the 
commodity futures trading markets. Certainly, that is a good thing and 
an important thing for us to look at, but it does not get at the crux 
of the problem we are facing.
  Mr. Speaker, I support this legislation, but I would urge my 
colleagues to point out that this is not what we need to be debating 
here today at the end of July just before we go home for the August 
recess.
  I reserve the balance of my time.
  Mr. PETERSON of Minnesota. Mr. Speaker, I am pleased to now recognize 
the gentleman from Michigan (Mr. Stupak) for 2 minutes. He has been a 
leader, had, I think, numerous hearings, and his subcommittee has done 
a lot of work on this issue, along with his staff, so I recognize the 
gentleman for 2 minutes.
  Mr. STUPAK. Mr. Speaker, I thank Chairman Peterson for the time.
  I rise in support of H.R. 6604, the Commodities Market Transparency 
and Accountability Act.
  As the chairman said, for 3 years I have held hearings on speculators 
in the market, and here is what we have found. Since the Enron loophole 
became law in 2000, there has been a dramatic shift and physical 
hedgers continually represent a small portion of the market. The 
excessive speculation is a significant factor in the price Americans 
are paying for gasoline, diesel and home heating oil.
  Since the Enron loophole, what we found as money was shifted in this 
market, it went from $13 billion to $260 billion in this market, a 
1,900 percent increase of money flowing into this market. After the 
Enron loophole we saw that contracts on oil futures markets went from 
700,000 to over 3 million contracts, 425 percent increase.
  What we also found, the physical hedgers in 2000, had about 70 
percent of the market. By 2008, April of 2008, they were down to about 
29 to 30 percent of the market. In other words, those who have a bona 
fide reason to hedge, like airlines, truckers and others, against the 
increased costs in fuel have been squeezed out of the market by big 
money and lucrative contracts.
  While the Peterson bill may not have had all the things I would like 
to see, and in my legislation to prevent the unfair manipulation of 
prices, the PUMP Act, it does take significant steps to rein in 
excessive speculation.
  The legislation would improve the information available to the 
Commodity Future Trading Commission, significantly improving the CFTC's 
ability to monitor energy markets. Should the CFTC find excessive 
speculation on unregulated markets as a result, they can take the 
necessary steps to correct it.
  Well, speculators are not the only factor. We have seen that this 
Congress is serious about acting to curb excessive speculation in the 
energy market, and the markets are responding accordingly. Curbing 
excessive speculation is part of the solution to high energy prices.

[[Page H7524]]

  I thank Chairman Peterson and his staff for working with me and my 
colleagues to produce this legislation. I urge my colleagues to vote 
for H.R. 6604.
  Mr. GOODLATTE. Mr. Speaker, at this time it is my pleasure to 
recognize the Republican leader, the gentleman from Ohio (Mr. Boehner) 
for 1 minute.
  Mr. BOEHNER. Mr. Speaker, the Democrat majority here in Congress just 
voted a few minutes ago to adjourn for the August district work period 
without bringing a real bill to the floor that will open up American 
energy for development. Instead, they have brought this sham bill up 
here, trying to blame speculators for the problems that we have with 
the lack of energy in America.
  We have had a number of these bills over the last 4 or 5 weeks, use 
it or lose it. We have already had a speculators bill on the floor once 
that passed, and a number of other ideas that are nothing more than a 
way to try to divert attention from the fact that they refuse to have a 
bill on the floor that is supported by a bipartisan majority of this 
Congress that would allow energy development in America.
  The American Energy Act that we introduced last week is our plan to 
do all of the above. It would ask us to do more in terms of 
conservation, more in terms of bio fuels, more in terms of incentives 
for the development of alternative sources of energy. It would 
streamline the application process and permitting process for nuclear 
energy. And yes, it would allow us to drill in America for more oil and 
gas in an environmentally sensitive way. But that bill is not on the 
floor, nor will it be on the floor because the Speaker has refused to 
allow a bill to come.
  And so what do we have? We have another excuse. Kind of reminds me of 
the old political adage. ``Don't blame me; don't blame thee; let's 
blame the man behind the tree.''
  This is no substitute for a real bill on drilling, and I would urge 
my colleagues to oppose it.
  Mr. PETERSON of Minnesota. Mr. Speaker, I am now pleased to yield the 
majority leader 1 minute, and appreciate his work with us on this 
legislation.
  Mr. HOYER. I thank the gentleman for yielding.
  This is not a sham. And I would say to the leader, as he knows, he 
had an opportunity to vote on a DRILL Bill, Drill Responsibly in 
Currently Leased Land. He voted against that bill. A number of people 
in this Chamber voted against that bill. What that said is let's 
produce more product here in America.
  What this bill says is, let's make sure that prices aren't being 
driven up artificially. No more, no less.
  This summer the Democratic majority in this body has produced bill 
after bill after bill to address record oil prices that have exploded 
on this administration's watch. $1.46 to over $4 during the 7\1/2\ 
years of this administration.
  Every one of us here, Democrats and Republicans, acknowledge that 
curbing our Nation's addiction to foreign oil, which is how President 
Bush himself characterized the situation, requires short-term 
solutions, and long-term strategy. And thus, this body has considered a 
bill that would increase production of more bio fuels here at home, and 
a second to incentivize the use of nonfood commodities to meet that 
goal. The chairman has been a leader in that effort, Chairman Peterson, 
along with Mr. Goodlatte. Appreciate both of their leadership.
  We have considered a bill to hold OPEC accountable for price fixing, 
bills to address retail and wholesale price gouging, a bill to crack 
down on energy market manipulation, a bill to increase supply by 
suspending shipments to the Strategic Petroleum Reserve, and then 
another one to release oil from the Reserve; a bill to expedite the 
production of 10.6 billion barrels of Alaskan oil, to keep all oil 
produced in Alaska as well in the United States, and encourage diligent 
development of existing leases on Federal lands.
  I tell my friends on the Republican side, when I use that phrase, 
``diligent development'' that is lifted from their 2005 bill. We said 
``use it or lose it,'' which was essentially the same thing, and they 
voted against it.
  We have also considered a bill to bring down commuter rail and bus 
fares, and a bill to provide tax credits for renewable and alternative 
energy.
  None of these bills, none of these bills, alone is a panacea. We all 
recognize that. And we all recognize that there will be no immediate 
solution.
  But all of them, together, constitute a vital step towards 
confronting our oil dependency and our energy independence.
  Many of these Democratic energy initiatives have passed the House. 
Some have become law. However, unfortunately, some have been blocked by 
our colleagues on the other side of the aisle who seem to have one 
answer and one answer only to America's energy crisis, drill in places 
that are not now authorized.
  I want to remind my colleagues there are currently some 88 million 
acres available for drilling. Experts tell us there are 107 billion 
barrels of oil available under those acres. We use, that would be a 
14\1/2\ year supply. And what we have said is, pursue that. Drill. 
Produce that energy here in America for our use here in America.
  Unfortunately, that bill was rejected by the overwhelming majority of 
the Republican Party. It is ironic, but Democrats generally agree with 
our Republican friends that increasing domestic production of our 
energy sources is critical. Both sides agree that we ought to get more 
energy from America. We agree that we ought to get more oil from 
America.
  And unfortunately, when some of my Republican colleagues speak, they 
say, Democrats don't want to drill. That is absolutely not true, false, 
a misrepresentation said, in my opinion, for political purposes to 
accomplish an objective for politics, not for policy or for energy 
independence.
  We must drill more, but we believe the oil companies which today have 
68 million acres of land to drill on that is leased and open for 
drilling, must drill there first. Let's see if it is available there. 
If it is not, well perhaps let's look at alternatives.
  In total, there are 311 million acres available for drilling, 
including 20 million in the National Petroleum Reserve in Alaska. If 
they are serious about domestic production, they should be bringing 
these resources to market that we have leased in the public trust to 
produce oil and gas for the American people.

                              {time}  1345

  Today, I'm hopeful that Members on both sides of the aisle will again 
come together and support this legislation.
  I want to congratulate Chairman Peterson. Chairman Peterson has had 
some of the biggest challenges in this year in the Congress of the 
United States, last year as well. The farm bill went a long period of 
time. The farm bill--which had significant energy components in it--and 
this bill, the Commodity Markets Transparency and Accountability Act. 
This bill is designed to control the market speculation that is 
artificially inflating the price of gas.
  Among other things, this bill builds upon what we did in the farm 
bill, and closes overseas loopholes that allow speculation to go on 
unregulated; increases market transparency with strict reporting 
standards for traders; sets position limits to prevent individual 
speculators from dominating the market; and strengthens the Commodity 
Futures Trading Commission, which is operating at its lowest ever 
staffing levels.
  I tell my friends on both sides of the aisle if you take the referee 
off the field, the players are going to take an unfair advantage. You 
take the referees off the field, I guarantee the split ends are going 
to start down the field before the ball is hiked because he wants to 
get that advantage.
  We've taken the referees off the field. This bill tries to put the 
referees back on the field. Even as trading volumes have increased 
8,000 times since the Commodity Futures Trading Commission was first 
established--8,000 times--we have decreased their number of employees, 
their number of referees, if you will. Expert economists agree that 
unchecked, unregulated speculation is inflating the oil bubble and 
costing American consumers billions at the pump.
  I urge my colleagues not for political reasons but for reasons of 
giving relief to our constituents, men and women trying to support 
their families who drive up to the pump and say to themselves, ``I 
can't afford this. I have got

[[Page H7525]]

to spend it but I can't afford it,'' let's put a stop to out-of-control 
speculation in the oil markets that is fueling this run-up in the cost 
of petroleum and harming consumers and the economy. Let's come 
together, as we have before, and pass this important energy 
legislation.
  I have said something about Mr. Peterson. I want to say something 
about Mr. Goodlatte. I want to congratulate him for working together 
with Mr. Peterson to come up with a bill that can have bipartisan 
support, a bill which tries to effect reasonable, measured policy. I 
congratulate them both on this bill, and I urge my colleagues to pass 
this bill. It is not the only answer, but it is one of the pieces of 
the puzzle that we need to solve for all of our people.
  Mr. GOODLATTE. Mr. Speaker, at this time I am pleased to yield 2\1/2\ 
minutes to the gentleman from Kansas (Mr. Moran) who is the ranking 
Republican on the subcommittee of jurisdiction.
  Mr. MORAN of Kansas. Mr. Speaker, I rise today to express a serious 
concern with H.R. 6604. With the demand of rising energy costs, we're 
bringing to the floor a bill that will, in my opinion, do little to 
bring down the price of energy. In fact, certain provisions of this 
bill may lead to an increase in prices and may reduce market 
transparency and increase market volatility.
  I want to be clear. I favor changes at the CFTC and believe we can 
change the act to improve market transparency, oversight, and 
enforcement activities. I have been working with CFTC and market 
participants to create a bill that will enhance those functions while 
giving regulators the necessary tools to prevent market manipulation 
and fraud. This bill, however, was put together, in my opinion, too 
quickly and goes too far.
  When changing the Commodity Exchange Act, Congress must proceed in a 
deliberate manner and take into account the advice of industry users, 
the CFTC, the President's Working Group, and other experts. This bill 
should be referred back to the Committee on Agriculture so that we can 
refine provisions to actually enhance transparency and not exclude 
legitimate market participants.
  One of the problems of this legislation is that it will likely reduce 
market transparency. This is because of certain provisions like the one 
dealing with the Foreign Board of Trade that seek direct access to U.S. 
and provisions that require reporting for certain over-the-counter and 
exempt commercial markets. That will push traders to foreign markets. 
Rather than giving the CFTC a better picture of the market, it will 
reduce the picture that the CFTC has and potentially increase fraud and 
manipulation. It restricts the CFTC's ability to see the market.
  Second, this bill attempts to define a ``bona fide hedging 
transaction.'' In its current form, section 8 will exclude legitimate 
commercial market participants from properly hedging risk. This will 
cause an immediate disruption in the markets as the legitimate market 
participants are forced out. It will reduce market liquidity and 
increase price volatility.
  I am also concerned with provisions in this bill that require routine 
reporting and potential use of position limits in over-the-counter 
transactions that are fungible. ``Fungible'' is not defined and 
suggests that a significant amount of OTC transactions could be 
implicated by this section. I am especially concerned about the 
authority given in section 14 to CFTC to impose position limits on OTC 
trades.
  Finally, Mr. Speaker, not only should this bill be returned to 
committee because of these provisions so that we can take more time and 
develop a better product, I also recognize that this bill needs to 
address the root problem of high energy prices, and this will not do 
so.
  Mr. PETERSON of Minnesota. Mr. Speaker, I am now pleased to recognize 
the gentleman from Maryland (Mr. Van Hollen), who has been a leader and 
introduced bills and worked with us on this legislation, for 1 minute.
  Mr. VAN HOLLEN. Mr. Speaker, let me start by commending Chairman 
Peterson, Ranking Member Goodlatte and others on the committee for 
putting together the good compromise that we have today on the floor. 
I'm pleased to have worked with my colleagues Rosa DeLauro, Bart 
Stupak, John Larson, and others to try and establish greater 
transparency and accountability in our energy futures market so that we 
can wring out that component of the price that is due to excessive 
speculation.
  Like any compromise, this bill doesn't contain everything that 
everybody wants, but it's a very important first step to getting at 
this issue that is affecting consumers every day.
  Specifically, I am pleased that this legislation for the first time 
provides new authority for the CFTC to police the over-the-counter 
markets and take corrective action where necessary. It also goes a long 
way to cleaning up the current mess regarding bona fide hedging 
exemptions so that they are distributed based on true physical, rather 
than purely financial, risk. It also establishes position limits where 
necessary and at the same time safeguarding the importance of liquidity 
in the market.
  Mr. Speaker, I want to thank the chairman, the ranking member, and 
all the people who came together to take what I think is an important 
first step toward addressing this issue and thank the chairman for 
saying as new evidence becomes available and collected, we will go 
farther as we determine necessary.
  Mr. GOODLATTE. Mr. Speaker, at this time I would like to yield 2 
minutes to the gentleman from Texas (Mr. Conaway) who wishes to engage 
in a colloquy with the chairman on an issue in which I share the 
concerns raised by the gentleman from Texas.
  Mr. CONAWAY. I thank the gentleman from Virginia and would like to 
ask the gentleman from Minnesota if, in fact, he would engage in a 
colloquy with me.
  Mr. Chairman, many questions have arisen about section 8 and how it 
addresses bona fide hedging for agriculture and energy commodities. I 
have asked you to engage in this colloquy to clarify that it is not 
your intent or the intent of the committee to unnecessarily restrict 
eligibility for bona fide hedge exemptions.
  Under your leadership, Mr. Chairman, we have received hours of 
testimony from dozens of expert witnesses about excessive speculation 
and the narrowing of hedge exemptions. The testimony about removing 
eligibility for a hedge exemption for economic risk is at best 
inconclusive. This is a very technical area. The Commodity Futures 
Trading Commission has a lot of expertise in this area. We don't want 
to leave transactions that were traditionally considered a bona fide 
hedge left with no way to manage risk domestically.
  The CFTC needs discretion in defining what an appropriate hedge is. 
Though section 8 codifies a portion of the current regulation defining 
a bona fide hedger, it ignores modern portfolio risk management 
theories. In doing so, it threatens more than market liquidity. It 
threatens market function and structure. If granted discretion, the 
CFTC can more nimbly grant hedge exemptions to those that truly are 
managing risk.
  From our conversations, Mr. Chairman, I know that you're very 
protective of our domestic futures markets and believe, as I do, that 
the primary function of these markets is accurate price discovery.
  Is it your intent to arbitrarily exclude traditional market 
participants?
  Mr. PETERSON of Minnesota. I thank the gentleman from Texas and 
assure him that it is not my intent or the intent of this bill to bar 
conventional hedgers from receiving a hedge exemption.
  Section 8 requires the Commodity Futures Trading Commission to define 
a bona fide hedge exemption, and I trust the Commission will use all of 
its expertise to strike the appropriate balance allowing for price 
discovery and risk management.
  Mr. CONAWAY. I thank the gentleman. I would ask for your commitment 
to work with me as this bill moves forward to come to a common 
understanding of risk management needs and which market participants 
should be eligible for bona fide hedge exemption.
  Mr. PETERSON of Minnesota. The gentleman has my commitment.
  Mr. CONAWAY. I thank the gentleman.

[[Page H7526]]

  Mr. PETERSON of Minnesota. Mr. Speaker, I am now pleased to recognize 
the gentleman from Virginia (Mr. Boucher) for 1 minute.
  Mr. BOUCHER. I thank the gentleman from Minnesota for yielding.
  I want to commend Chairman Peterson for his leadership on this 
measure which will broaden the reach of the Commodity Exchange Act in 
order to restrict excessive speculation in the energy and agricultural 
markets.
  The concern that I am raising in this colloquy is of particular 
interest to the electricity sector. I would ask the gentleman if he 
would be pleased to engage in a colloquy with regard to this matter.
  Mr. PETERSON of Minnesota. I would be pleased to do so.
  Mr. BOUCHER. The Federal Energy Regulatory Commission has 
responsibility for regulating natural gas and electricity markets 
within its jurisdiction. That jurisdiction includes Financial 
Transmission Rights which are financial instruments which entitle the 
holders to receive compensation for transmission congestion charges 
that arise when the transmission grid is congested in the day-ahead 
market. These rights are traded through an auction and secondarily, 
through bilateral trading.
  The FERC currently regulates these electricity transmission rights 
through the independent system operators and through the regional 
transmission organizations across the Nation. The FERC's governance of 
the sale and use of these rights is important to the FERC's governance 
of the ISOs and the RTOs.
  Is it the intention of the chairman that anything in H.R. 6604 would 
limit or conflict with the legal authority of the FERC to carry out its 
regulatory responsibility with regard to financial transmission rights?
  Mr. PETERSON of Minnesota. H.R. 6604 is not intended to affect FERC's 
current jurisdiction over regional transmission organizations or 
independent system operators. I appreciate the gentleman from 
Virginia's concern about this legislation's impact on FERC. As with the 
CFTC reauthorization in the farm bill, we do not see any impact in that 
area.
  I look forward to continuing to work with my friend and the Committee 
on Energy and Commerce regarding matters of mutual interest.
  Mr. BOUCHER. I thank the gentleman for yielding.
  Mr. PETERSON of Minnesota. I thank the gentleman.
  Mr. GOODLATTE. Mr. Speaker, it is my pleasure to yield 2 minutes to 
the gentleman from California (Mr. Campbell).
  Mr. CAMPBELL of California. I thank the gentleman for yielding.
  Mr. Speaker, I stand in strong opposition to this bill. Just last 
week, the Commodity Futures Trading Commission charged Optiver Holding 
BV with manipulation of the oil futures markets. They charged them for 
using a system called ``banging the close'' and charged that they made 
$1 million dollars with illegal manipulation of the oil futures 
markets.
  You see, Mr. Speaker, it is already illegal to manipulate the oil 
futures markets, and the CFTC is already enforcing that. What this bill 
unfortunately does is move beyond manipulation into what is legitimate 
trading. When Southwest Airlines, which is a well-known organization 
that recently bought contracts forward and hedged oil prices going 
forward, when they buy that, someone else owns the other end of that 
contract. And when oil prices start to go up, the person who owns the 
other end of that contract tries to reduce their losses so they go into 
the market to do that. That is not manipulation. That is legitimate 
trading.
  If you stop that, which this bill will, then a Southwest Airlines may 
not be able to get this kind of hedge in the future, or if they do, it 
will be much more expensive.

                              {time}  1400

  There's a difference between manipulation and legitimate trading. 
This bill does not recognize that.
  So I oppose this bill and urge my colleagues to oppose it. 
Manipulation is already illegal. The bill will impact legitimate 
trading. It will move a lot of these trades from the United States to 
London or Dubai. It will hurt American companies.
  And in the end, Mr. Speaker, as the CFTC admitted last week, the 
major cause of oil prices is not speculation or even manipulation but 
is, in fact, supply-and-demand factors. If we want to bring oil prices 
down, we will do it when we increase supply dramatically in this 
country and lower demand.
  Mr. PETERSON of Minnesota. Mr. Speaker, I'm now pleased to yield 1 
minute to the gentlelady from Connecticut (Ms. DeLauro), the Chair of 
the House Agriculture Appropriations Subcommittee, and also a leader on 
this issue, that's worked with us over this period of time.
  Ms. DeLAURO. I rise in support of this bill. It's an important first 
step to address the concerns of millions of Americans, families and 
farmers, who feel powerless at the gas station and in the grocery 
store, sensing that something more than supply and demand is going on, 
producing breathtakingly high prices.
  It's a complex issue. Excessive speculation occurs when the market 
price for a given commodity no longer accurately reflects the forces of 
supply and demand. We can point to loopholes and exemptions today that 
have allowed interested parties and special interests access and 
information to improperly speculate on the price of energy without 
oversight.
  This bill confronts that speculation. It says to the Commodity 
Futures Trading Commission this is new authority to gather the 
information from currently unregulated, over-the-counter energy 
transactions. If it's improper speculation which is driving up the 
prices, the agency has the authority to act to reduce that speculation. 
It's new, long overdue authority that will shed light on once hidden 
markets.
  It makes sure we know who is participating in the markets, to what 
extent, by requiring detailed trading information from index traders 
and swap dealers. It works to make sure that only those who are 
legitimate hedgers can use them.
  It brings relief and can bring relief to American families and says 
to the CFTC: Do your regulatory job.
  Mr. GOODLATTE. Mr. Speaker, at this time, it is my pleasure to yield 
1\1/2\ minutes to the gentleman from Connecticut (Mr. Shays).
  Mr. SHAYS. I rise to support H.R. 6604 because I believe the 
Commodity Futures Trading Commission, the CFTC, must investigate 
speculation in the energy futures market and respond to any 
manipulation and price distortions.
  While my view is not unanimous, I believe the increased positions of 
institutional investors, such as pension funds, endowments and 
sovereign funds, are contributing to the escalating price of oil at an 
alarming rate. The CFTC should help level the playing field and apply 
position limits to the institutional investors, just as the New York 
Mercantile Exchange, NYMEX, has required of its members for many years.
  I also believe the CFTC must work with the British Financial Services 
Authority, FSA, to establish position limits on oil futures traded on 
the London Intercontinental Exchange, ICE, similar to those established 
by the CFTC for traders on the NYMEX.
  In overseas markets, such as ICE, U.S. investors can buy as much oil 
as they want, helping to drive up demand with little to no oversight.
  It is essential the CFTC work with the FSA in London to limit 
positions and gather accurate information on the impact that 
speculation has on oil prices.
  Rising gas prices are indicative of the United States' need to affirm 
its commitment to renewable energy research and development, and reduce 
our demand for energy by focusing on conservation. We also need to 
increase our domestic supply of nuclear power, oil and gas. In 
addition, transparency in the futures market is needed and very 
appropriate.
  Mr. PETERSON of Minnesota. Mr. Speaker, could I inquire how much time 
is left on each side?
  The SPEAKER pro tempore. The gentleman from Virginia has 6 minutes 
remaining. The gentleman from Minnesota has 9 minutes remaining.
  Mr. PETERSON of Minnesota. I'm now pleased to recognize the gentleman 
from Connecticut (Mr. Larson), who is the Vice Chair of our caucus and 
has introduced bills in this area and

[[Page H7527]]

been one of the leaders in working with us to come up with this 
compromise legislation, for 1 minute.
  Mr. LARSON of Connecticut. Mr. Speaker, let me begin by commending 
this legislation and, more specifically, commending the work of Collin 
Peterson and Bob Goodlatte. You are a stellar example of what 
bipartisan cooperation should be like in this Chamber. Anyone who's 
witnessed how you have handled the agricultural bill and now this issue 
begins to deepen your appreciation for the way that you conduct 
yourself. It's a model for the Congress.
  I'd also like to commend my colleagues Rosa DeLauro and Chris Van 
Hollen for the legislation that they contributed to this piece of 
legislation, and probably the most comprehensive piece of legislation 
put forward by Bart Stupak who has been an advocate for this for 
several years. I want to also add Frank LoBiondo who assisted in a 
bipartisan way with this legislation.
  But essentially, this came from Main Street and from independent oil 
dealers who recognize that the laws of supply and demand have been 
suspended and that what we needed to do was address this issue very 
forthrightly, but with the cautious manner which Mr. Peterson has laid 
out.
  I'm delighted that included in the bill is an effort to make sure 
that there's an Inspector General----
  The SPEAKER pro tempore (Mr. Ross). The time of the gentleman has 
expired.
  Mr. PETERSON of Minnesota. I yield the gentleman an additional 30 
seconds.
  Mr. LARSON of Connecticut. I thank the chairman.
  I'm specifically delighted that there will be an independent 
Inspector General within the CFTC. This is vitally important to make 
sure that the kind of oversight that we all desire is going to take 
place.
  I want to further commend John Mitchell, former Republican mayor in 
South Windsor; his brother, Billy; and Gene Guilford; and the 
Independent Petroleum Council who came to us with this issue primarily 
because citizens were coming to them and having to exchange their 
entire Social Security check in order to get oil for themselves.
  Again, I commend the chairman and thank him for the time.
  Mr. GOODLATTE. Mr. Speaker, at this time, I'm pleased to yield 2 
minutes to the gentleman from Texas (Mr. Gohmert).
  Mr. GOHMERT. Mr. Speaker, I do appreciate the work of Chairman 
Peterson, and I've had numerous conversations with my friend Bart 
Stupak, and I know that a lot of work has been done on this bill, a lot 
of efforts have been made because of our concern over unfair and 
inappropriate speculation. And it is a problem, and it has I think been 
a contributor to some of the rising prices.
  One of the concerns some of us had is what about airlines, like 
Southwest Airlines, who have been able to hedge against inflation by 
getting these commodities contracts. And we were advised the Air 
Transport Association, which Southwest is a member--I don't know for 
sure that they support--but the Air Transport Association has come out 
in support of the bill and thinks it will help but it doesn't feel like 
it goes far enough.
  This is something I'm going to vote for, and I appreciate all the 
hard work by Chairman Peterson and my friend Bart Stupak, but we still 
come back to the biggest problem on prices being that there has been a 
tremendous increase in demand, especially through India and China, and 
we have not had a commensurate increase in the supply.
  Supply-and-demand forces are at work. No matter what we do here in 
Congress, we're not going to decrease the forces of supply and demand 
on the market. That's what we need to be doing. We need to drill here, 
drill OCS, drill ANWR, and you know, some people keep saying 10 or 15 
years before they'd come on line. The information that I heard was that 
since there's a pipeline 74 miles from the area of 1002 in ANWR, we 
could have that coming into the country, to this part of the country, 
the continental, within 3 years, that we could be bringing in OCS gas 
and oil in a similar amount of time. That's where we need to go.
  I appreciate the work here, and I'm glad you're doing it and I will 
vote for it. But we need to increase the supply if we're going to help 
America. That's where the help is required.


                             General Leave

  Mr. PETERSON of Minnesota. Mr. Speaker, I ask unanimous consent that 
all Members may have 5 legislative days in which to revise and extend 
their remarks and include extraneous material on H.R. 6604, as amended.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Minnesota?
  There was no objection.
  Mr. PETERSON of Minnesota. Mr. Speaker, I'm now pleased to yield 1 
minute to the gentleman from North Dakota (Mr. Pomeroy).
  Mr. POMEROY. I thank the gentleman for yielding.
  The latest example of a White House that runs energy policy by the 
oil companies, of the oil companies, and for the oil companies is found 
in the Statement of Administrative Policy threatening a veto on this 
bill.
  The White House asks to give basically a blank check to the oil 
companies to drill wherever they want, notwithstanding the fact they 
already have authorized drilling for 34 billion barrels offshore. And 
then the White House opposes our efforts to address speculation.
  The bill before us is a substantive and measured approach at trying 
to make certain that the price our consumers are paying at the pump is 
based on consideration of the supply and demand and not market 
manipulation.
  Greater transparency, more reporting of transactions, greater 
oversight, 100 new personnel at the Commodity Futures Trading 
Commission, greater enforcement, a stronger direction from Congress to 
drive out excessive speculation: you would think this would be one area 
where the White House and the Congress could agree.
  I urge passage of this bill.
  Mr. GOODLATTE. Mr. Speaker, at this time, it's my pleasure to yield 2 
minutes to the gentleman from Georgia (Mr. Westmoreland).
  Mr. WESTMORELAND. I want to thank the ranking member for yielding.
  And a while ago, I heard the majority leader say that this was not a 
sham. Well, we've seen this snake oil shop set up before when we've 
voted on things under the suspension rules, and that's what makes this 
a hoax. That's what makes this a joke.
  Half of this House is being shut out, if not all of this House is 
being shut out, from offering amendments on the floor. The 700,000 
people I represent in Georgia's Third Congressional District, Mr. 
Speaker, had no input into this.
  And so we can call it what we want to, but it's a red herring. We are 
trying to put the attention on something that will not increase our 
U.S. oil production.
  Seventy-three percent, Mr. Speaker, of American people say let's 
drill here, let's drill now, let's increase our oil production, let's 
bring up the supply; that will drive down the cost of our oil.
  I want to read you a quote, and this is from Speaker Pelosi: ``This 
call for drilling in areas that are protected is a hoax. It's an 
absolute hoax on the part of the Republicans and the administration.''
  Here's a number for the switchboard in the U.S. House of 
Representatives, Mr. Speaker. I encourage the 73 percent of the 
American people that say that drilling is the right thing for us to do, 
that we should use our own natural resources, not be dependent on 
foreign oil, that we should let her know because I'm telling you, the 
Republican minority in this House cannot do anything to make the 
Democratic majority bring a bill forward through regular order that 
would give us or have an ability to either amend the bill or have a 
motion to recommit where the American people could really tell how 
their representatives feel about increasing U.S. oil production.
  This is just smoke and mirrors. This is smoke and mirrors so they can 
go home during the August recess and say they voted on something. This 
is not an increase in our U.S. oil supply.
  Mr. PETERSON of Minnesota. Mr. Speaker, I'm pleased to yield 1 minute 
to the gentleman from Washington (Mr. Inslee).
  (Mr. INSLEE asked and was given permission to revise and extend his 
remarks.)

[[Page H7528]]

  Mr. INSLEE. Was this part of the secret Dick Cheney task force to 
come up with an opposition to have a little transparency in the 
speculation markets? Secrecy does its worst work in the dark, and 
that's what happened in the Cheney secret energy task force. And why 
should we allow these speculative markets to continue in the dark?
  The people who support this are not a bunch of hemp smoking 
Communists. The Air Transport Association, the people whose industry is 
on the verge of disaster, realize we have to rein in this rampant 
speculation. These are capitalists, CEOs, accountants who know that 
we've got to get to the root of this speculation.
  And I don't understand, when it comes to energy, my Republican 
colleagues are against virtually every solution. Speculation, they're 
against it. Opening the SPR, they're against it. Solar energy in our 
REC standard, they're against it. Wind in our tax bill, they're against 
it. Electrified cars in our CAFE, they're against it. They're the none-
of-the-above caucus.
  Mr. GOODLATTE. Mr. Speaker, I'd ask the chairman how many speakers he 
has remaining. I'm the only one right now on the floor on our side.
  Mr. PETERSON of Minnesota. I've got one additional speaker here right 
now and potentially maybe one more.
  Mr. GOODLATTE. I reserve my time.
  Mr. PETERSON of Minnesota. Mr. Speaker, I'd be pleased to yield 1 
minute to the gentleman from Vermont (Mr. Welch).

                              {time}  1415

  Mr. WELCH of Vermont. Mr. Speaker, I want to congratulate the 
chairman, Mr. Peterson, and the ranking member, Mr. Goodlatte, for 
doing the usual bipartisan work to address a problem in a practical 
way.
  The question that they faced is this: Will the futures market be one 
that is dedicated to price efficiency or will it be hijacked for 
speculative market manipulation? Will the futures markets serve the 
needs of those who need it--airliners, fuel dealers, truckers--or will 
it be in service of financial speculators who, moment to moment, are 
trying to take advantage of the volatility at the expense of the 
American consumer?
  This legislation strikes a balance. It sends a clear message that the 
markets should be about price efficiency, not short-term momentary 
advantage when the consequence is inflicting damage on the American 
family, the American small business, the American economy.
  There are practical steps in here--overseeing offshore trading, 
position limits, over-the-counter trading regulations. These are things 
that should be done and are being done.
  Mr. GOODLATTE. Mr. Speaker, I reserve the balance of my time.
  Mr. PETERSON of Minnesota. Mr. Speaker, I am now pleased to yield 2 
minutes to the gentleman from Georgia, a member of our committee who 
has worked long and hard on this issue, and we appreciate his 
involvement.
  Mr. MARSHALL. I thank the chairman. And to the chairman and the 
ranking member, I've just got nothing but applause. This has been a 
very, very difficult issue to grapple with because it is so 
complicated.
  There is no question that America needs to do more as far as energy 
is concerned, and there are lots of different ways to go about doing 
that. And there are a lot of market fundamentals that are involved in 
explaining what our current price challenges are for commodities, 
agriculture, oil, and others.
  But there is also no question that part of the price impact is due to 
investment money that has flowed onto these markets through index 
funds, investment money that was really never intended to be on the 
futures market. The futures markets were set up to help airlines and ag 
producers and others in hedging commercial risk. And liquidity was 
added in the form of speculation in order to enhance the hedging of 
commercial risk. These markets were never intended as a place to simply 
come and park a commodity investment. One expert has described this as 
being an uncoordinated, unintended squeeze of the market. And we've got 
to do something about it.
  We have a bipartisan bill. There have been very few voices that have 
spoken in opposition to this bill. Some of those voices are saying we 
should drill more. I agree. Some of those voices are saying--the 
gentleman from California, for example, suggested that airlines are not 
in favor of this bill when, in fact, they are in favor of this bill. 
Those who use these markets know there's a problem. Consumers have no 
other explanation for why prices have risen so much.
  We have a bipartisan bill. It's a good bill. I commend the chairman. 
I commend the ranking member. There's more work to be done on the bill; 
we'll be able to do that work on the bill in conference with the Senate 
to improve the bill. So we're still listening to folks, but this bill 
is an excellent start at addressing a real problem. There is no reason 
in the world why it ought not be passed. And if passed, it will lower 
prices.
  Mr. GOODLATTE. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, I appreciate the comment of the gentleman from Georgia 
about the fact that he favors drilling. I favor drilling. Most of the 
people over here who have had the opportunity to speak favor drilling.
  We favor doing a whole lot more than drilling, too. We would like to 
see increased incentives for nuclear production. We would like to see 
incentives for coal liquefaction and clean burning coal technology, 
coal sequestration technology. We would like to see legislation to 
encourage hydrogen fuel cell technology, solar technology, wind 
technology to be expanded to make America energy independent.
  But instead, today we're voting on legislation--which I support, 
which does a good job of enhancing the ability of the Commodity Futures 
Trading Commission to oversee futures trading, brings more transparency 
to that, and I support it. But it is not going to solve the problem 
that the American people face, with the high cost of gasoline going 
into their tanks, of fuel oil that they're going to have to purchase to 
heat their home this winter, the higher cost of electricity that 
they're facing because this Congress refuses to allow us to vote on the 
American Energy Act and other good pieces of legislation that have been 
offered here in this Congress to increase the domestic supply of 
energy.
  That's what we should be spending our time doing, not voting to go 
home for the August recess and leaving that very, very serious 
problem--which is having a very significant impact on our economy--
unaddressed. We should have a vote on the American Energy Act.
  I think it is a very serious mistake for the Democratic leadership to 
deny this Congress and bipartisan Members on both sides of the aisle 
the opportunity to vote on what the American people want us to vote on. 
That's the problem that they see here in Washington. They don't 
understand it. And I don't understand why the Democratic leadership is 
afraid of allowing democracy to work and have the vote that we need to 
have here in the Congress.
  I urge my colleagues to support this legislation, but I urge them to 
continue to fight for the legislation we need to have on this floor.
  Mr. PETERSON of Minnesota. Mr. Speaker, I yield myself the balance of 
my time.
  Again, I want to thank Mr. Goodlatte and assure him that there is one 
more person over here that agrees with him, that we should do 
everything we can to exploit all of our domestic energy sources, 
whatever they might be. And I would agree with him on that. I would add 
one other thing. In addition to that, we ought to promote conservation 
because we can probably save more energy with that than anything else 
that we do. So I'm for all of that. But we have this issue and we are 
addressing this, and I hope we can keep the focus on that. But again, I 
want to thank him for his help, and all the members of my committee.
  Our interest on the Agriculture Committee has been to make sure that 
we maintain these markets for our agriculture producers. This is where 
the commodity futures business started is in agriculture. We are much 
smaller markets now than energy and than financials. And we're 
concerned about what's going on with this additional money that's 
coming into the markets, in terms of the agriculture markets.
  We are lacking convergence in some of our ag markets. We have a 
situation where the basis is $2 difference between the future price of 
what somebody can get at the elevator. So we have issues

[[Page H7529]]

here that we are very concerned about, and we have taken the steps that 
we think we have the information to be able to address. We're closing 
the London loophole. We're taking the look-alike contracts that are 
just a substitute for something that's on the regulated market and 
we're giving the CFTC some authority to put position limits on that 
part of the OTC market.
  But in the areas where we don't have enough information--which is 
considerable in the OTC market--in terms of how much of this is pension 
funds, how much is index funds, how much is hedge funds? Are they long 
or are they short? What's going on within that market? We don't have 
that information.
  So in this bill we are requiring the CFTC to come up with this 
information, bringing it back to us so that we can sort this out and 
figure out exactly what is going on with all this additional money 
that's coming into the marketplace.
  We've also asked the regulated market, the CME, to look into why we 
don't have convergence of the wheat market, why we had a problem with 
cotton here a few months ago.
  We are, we think, doing a responsible effort here to address a 
concern that's been raised by a lot of people, and we are looking 
forward to getting the rest of this information. We have a good bill, a 
responsible bill. I encourage my colleagues to support it.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. NEUGEBAUER. Mr. Speaker, I ask unanimous consent that a letter 
from the Department of the Treasury and the President's Working Group 
be entered into the Record in connection with this bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.

                                                    July 29, 2008.
     Hon. Randy Neugebauer,
     House of Representatives,
     Washington, DC.
       Dear Congressman Neugebauer: In response to your July 25 
     letter, we are providing the views of the President's Working 
     Group on Financial Markets (PWG) concerning H.R. 6604--
     legislation addressing regulation of the U.S. energy futures 
     markets.
       The PWG is concerned that high commodity prices are putting 
     a considerable strain on American families and businesses. 
     Proper regulation of the energy futures markets is necessary 
     to ensure that prices reflect economic factors, rather than 
     manipulative forces. To this end, the PWG worked with 
     Congress to develop additional regulatory authorities for the 
     CFTC, enacted earlier this year, to regulate certain over-
     the-counter (OTC) energy transactions on electronic 
     exchanges. The PWG also supports the recent steps taken by 
     the CFTC to improve the oversight and transparency of the 
     energy futures markets.
       The PWG agencies also are participating in an Interagency 
     Task Force on Commodity Markets that is studying the role of 
     economic fundamentals and speculation in the commodity 
     markets. The Task Force recently published an Interim Report 
     on Crude Oil, which found that fundamental supply and demand 
     factors provide the best explanation for the recent crude oil 
     price increases. If the future work of this Task Force or the 
     analysis of data the CFTC has recently collected from 
     commodity market participants suggests that changes to 
     futures market regulation are necessary, the PWG stands ready 
     to assist lawmakers in crafting such modifications.
       However, the PWG believes that bill H.R. 6604, as reported, 
     could harm U.S. energy markets without evidence that it would 
     lower crude oil prices. Among its several provisions, it 
     would curtail certain types of trading in the futures 
     markets. Such restrictions on market participation could 
     reduce market liquidity, hinder the price discovery process, 
     and limit the ability of market participants to manage and 
     transfer risk. Provisions in the bill also may harm U.S. 
     competitiveness by driving some trading to overseas markets 
     or to more opaque trading systems at a time when policymakers 
     are trying to encourage greater transparency. Should this 
     legislation become law, the chances of significant unintended 
     consequences in the markets would be high.
       This legislation would give the CFTC regulatory authorities 
     over certain OTC transactions for the first time. It has been 
     the long-held view of the PWG that bilateral, OTC derivatives 
     transactions do not require the same degree of regulatory 
     oversight as exchange-traded instruments because they do not 
     raise the investor protection and manipulation concerns 
     associated with exchange-traded instruments. Regulating these 
     OTC instruments could prove costly and difficult to 
     administer by both regulators and the industry given the size 
     and nature of the market might not provide meaningful 
     regulatory data, and could negatively affect the ability of 
     U.S. firms and markets to compete globally in these types of 
     transactions.
       To date, the PWG has not found valid evidence to suggest 
     that high crude oil prices over the long term are a direct 
     result of speculation or systematic market manipulation by 
     traders. Rather, prices appear to be reflecting tight global 
     supplies and the growing world demand for oil, particularly 
     in emerging economies. As a result, Congress should proceed 
     cautiously before drastically changing the regulation of the 
     energy markets.
       We look forward to working with Congress on these important 
     energy market issues and appreciate your seeking our views.
           Sincerely,
     Henery M. Paulson, Jr.,
       Secretary of the Treasury.
     Ben S. Bernanke,
       Chairman, Board of Governors of the Federal Reserve System.
     Chrisopher Cox,
       Chairman, Securities and Exchange Commission.
     Walter L. Lukken,
       Acting Chairman, Commodity Futures Trading Commission.

  Mr. DINGELL. Mr. Speaker, I rise to support H.R. 6604, the 
``Commodity Markets Transparency and Accountability Act of 2008.''
  This legislation will ratchet back the excessive speculation which 
has undermined the ability of the commodity markets to enable price 
discovery, while ensuring a means for legitimate hedgers, such as 
airlines, to lock in future prices as a way to protect their business 
from price volatility.
  Experts testified before the Committee on Energy and Commerce that 
commodity index speculators, such as pension funds, endowments, and 
sovereign wealth funds, have poured more than a quarter trillion 
dollars into purchases of a basket of essential commodities such as 
oil, natural gas, corn, and wheat. Investments tied to the two most 
popular commodity indexes have skyrocketed 1,900 percent in the past 5 
years.
  This is the one factor that has turbocharged oil prices far above 
their underlying supply and demand. This bill works to plug three 
loopholes that have allowed speculation to get out of hand, in markets 
immune largely from public disclosure, regulation, and transparency.
  First, the ``London loophole,'' allows foreign boards of trade such 
as the London-based ICE-Futures, to offer futures contracts in this 
country for U.S.-delivered energy commodities, such as the West Texas 
Intermediate Crude Oil Contract, but operate free from equivalent U.S. 
regulatory oversight.
  This legislation requires electronic exchanges in London or Dubai to 
comply with key market integrity requirements as a condition of doing 
business in the U.S. I will be watching closely to see if this approach 
works or if stronger medicine is needed.
  Second, the swaps loophole, allows large investment banks to exceed 
speculative trading limits on the futures markets. This loophole has 
been plugged.
  Third is the Enron loophole that has enabled massive trading on over-
the-counter (OTC) markets which are completely dark to regulators. It 
also involves another loophole for swaps transactions on the OTC.
  These dark markets have grown so rapidly that the Bank of 
International Settlements estimates they now involve about $9 trillion 
in commodities. This is estimated to be about nine times what is traded 
on the regulated markets. This bill shines light on these dark markets 
for the first time.
  It takes a large and important first step towards putting a cop back 
on the beat. My hope is that this bill will bring prices back in line 
with underlying supply and demand. Further, I am comforted by Chairman 
Peterson's commitment to consider additional measures in the dark 
markets as more data is available from the CFTC.
  I want to commend Representatives Stupak, Van Hollen, DeLauro, and 
Larson, for their excellent work and want to recognize Chairman Collin 
Peterson, Ranking Member Bob Goodlatte, and their staffs for their 
leadership in bringing this bill to the floor. I look forward to 
working with them in conference.
  Mr. MARKEY. Mr. Speaker, I rise in support of this bill, and I 
commend Chairman Peterson and Chairman Etheridge for their leadership 
in bringing this measure to the House floor.
  When we have mounting evidence that today's high oil prices are due 
in part to excessive futures and derivatives market speculation, we 
must take action to help the American consumer who is struggling to pay 
$4 for a gallon of gas. We must stand up to speculators who are aiding 
and abetting big oil companies that continue to rake in record profits 
and laugh all the way to the bank.
  In 2000, a regulatory black hole was created that took the cop off 
the beat when it comes to energy commodities. This law allowed energy 
commodities to be exempted from virtually all of the laws that we have 
had in place for agricultural and financial commodities.

[[Page H7530]]

  At the time this bill passed the House, I argued that this loophole 
was not in the public interest and that it needed to be fixed in 
conference in order to prevent harm to energy markets and consumers. 
But it was not fixed.
  The Enron loophole allowed speculators and financial operators to 
hide their actions from regulators and the public.
  In May, Congress took the first step towards closing the Enron 
loophole when it passed, over President Bush's veto, the farm bill. 
That bill contained language that will help bring these commodities 
trades under greater federal oversight.
  In June, this House took the next step, when it approved legislation 
that directed the Commodity Futures Trading Commission to examine 
excessive oil speculation and use their emergency powers to take 
corrective action.
  But the Congress needs to take further actions to address excessive 
speculation in these markets.
  The bill before us today does that.
  It would close the so-called London Loophole that has allowed traders 
to evade U.S. regulation by offshoring their trades.
  It would require additional information to be made public regarding 
the trading activities of index funds--and other investors--in energy 
commodities markets.
  It would subject over-the-counter energy derivatives transactions to 
regulatory reporting and recordkeeping requirements, including position 
reporting.
  It positions limits for certain contracts on energy commodities, and 
mandates position limits for energy commodity speculators.
  It requires the Commission to appoint at least 100 new full time 
employees.
  It requires the Commission to mandate routine reporting of certain 
OTC energy transactions, determine whether such agreements have the 
potential to disrupt market liquidity and price discovery, cause severe 
market disturbance, or prevent prices from reflecting supply and 
demand. If the Commission finds that they have caused problems in these 
areas, it is authorized to impose and enforce position limits on the 
involved agreements.
  The energy, economic and the environmental crisis we face are all 
connected. It is time for Congress to stop playing favorites to Big 
Oil. Cracking down on speculation will not only help families with 
skyrocketing gas prices, it will give needed relief to the airline 
industry, the trucking industry and small businesses across my district 
in Massachusetts. This is a good bill. It is a necessary bill, and I 
urge its adoption.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Minnesota (Mr. Peterson) that the House suspend the 
rules and pass the bill, H.R. 6604, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. GOODLATTE. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  Pursuant to clause 8 of rule XX, this 15-minute vote on suspending 
the rules and passing H.R. 6604, as amended, will be followed by a 5-
minute vote on suspending the rules and passing H.R. 6445, as amended 
(if ordered).
  The vote was taken by electronic device, and there were--yeas 276, 
nays 151, not voting 8, as follows:

                             [Roll No. 540]

                               YEAS--276

     Abercrombie
     Ackerman
     Allen
     Altmire
     Andrews
     Arcuri
     Baca
     Baird
     Baldwin
     Becerra
     Berkley
     Berry
     Bilbray
     Bilirakis
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Bono Mack
     Boren
     Boswell
     Boucher
     Boustany
     Boyda (KS)
     Brady (PA)
     Braley (IA)
     Brown, Corrine
     Buchanan
     Butterfield
     Capito
     Capps
     Capuano
     Cardoza
     Carnahan
     Carney
     Carson
     Castle
     Castor
     Cazayoux
     Chabot
     Chandler
     Childers
     Clay
     Cleaver
     Clyburn
     Cohen
     Conaway
     Conyers
     Costello
     Courtney
     Cramer
     Cuellar
     Cummings
     Davis (CA)
     Davis (IL)
     Davis, Lincoln
     Deal (GA)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dicks
     Dingell
     Doggett
     Donnelly
     Doyle
     Duncan
     Edwards (MD)
     Edwards (TX)
     Ehlers
     Ellison
     Ellsworth
     Emanuel
     Emerson
     Engel
     English (PA)
     Eshoo
     Etheridge
     Farr
     Fattah
     Filner
     Forbes
     Fortenberry
     Frank (MA)
     Frelinghuysen
     Gallegly
     Gerlach
     Giffords
     Gilchrest
     Gillibrand
     Gohmert
     Gonzalez
     Goode
     Goodlatte
     Gordon
     Graves
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Hare
     Harman
     Hastings (FL)
     Hayes
     Herseth Sandlin
     Higgins
     Hill
     Hinchey
     Hinojosa
     Hirono
     Hodes
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (GA)
     Johnson (IL)
     Johnson, E. B.
     Jones (NC)
     Jones (OH)
     Kagen
     Kanjorski
     Kaptur
     Keller
     Kennedy
     Kildee
     Kilpatrick
     Kirk
     Klein (FL)
     Knollenberg
     Kucinich
     Kuhl (NY)
     LaHood
     Langevin
     Larsen (WA)
     Larson (CT)
     Latham
     LaTourette
     Levin
     Lewis (GA)
     Lewis (KY)
     Lipinski
     LoBiondo
     Loebsack
     Lofgren, Zoe
     Lowey
     Lynch
     Mahoney (FL)
     Markey
     Marshall
     Matsui
     McCarthy (NY)
     McCollum (MN)
     McCotter
     McDermott
     McGovern
     McHugh
     McIntyre
     McNerney
     McNulty
     Meek (FL)
     Michaud
     Miller (MI)
     Miller (NC)
     Miller, George
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murphy (CT)
     Murphy, Patrick
     Murphy, Tim
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Pelosi
     Perlmutter
     Peterson (MN)
     Platts
     Pomeroy
     Porter
     Price (NC)
     Rahall
     Ramstad
     Rangel
     Reyes
     Richardson
     Rodriguez
     Rogers (AL)
     Ros-Lehtinen
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Schakowsky
     Schiff
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shays
     Shea-Porter
     Sherman
     Shuler
     Shuster
     Sires
     Skelton
     Slaughter
     Smith (NJ)
     Smith (WA)
     Snyder
     Solis
     Souder
     Space
     Speier
     Spratt
     Stark
     Stearns
     Stupak
     Sutton
     Tanner
     Taylor
     Terry
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Tsongas
     Udall (CO)
     Udall (NM)
     Upton
     Van Hollen
     Velazquez
     Visclosky
     Walsh (NY)
     Walz (MN)
     Wamp
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Welch (VT)
     Weller
     Wexler
     Wilson (OH)
     Wittman (VA)
     Wolf
     Woolsey
     Wu
     Yarmuth
     Young (FL)

                               NAYS--151

     Aderholt
     Akin
     Alexander
     Bachmann
     Bachus
     Barrett (SC)
     Bartlett (MD)
     Barton (TX)
     Bean
     Biggert
     Bishop (UT)
     Blackburn
     Blunt
     Boehner
     Bonner
     Boozman
     Boyd (FL)
     Brady (TX)
     Broun (GA)
     Brown (SC)
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp (MI)
     Campbell (CA)
     Cannon
     Cantor
     Carter
     Clarke
     Coble
     Cole (OK)
     Cooper
     Costa
     Crenshaw
     Crowley
     Culberson
     Davis (AL)
     Davis (KY)
     Davis, David
     Davis, Tom
     Doolittle
     Drake
     Dreier
     Everett
     Fallin
     Feeney
     Ferguson
     Flake
     Fossella
     Foster
     Foxx
     Franks (AZ)
     Garrett (NJ)
     Gingrey
     Granger
     Hall (TX)
     Hastings (WA)
     Heller
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hunter
     Inglis (SC)
     Issa
     Johnson, Sam
     Jordan
     Kind
     King (IA)
     King (NY)
     Kingston
     Kline (MN)
     Lamborn
     Lampson
     Latta
     Lewis (CA)
     Linder
     Lucas
     Lungren, Daniel E.
     Mack
     Maloney (NY)
     Manzullo
     Marchant
     Matheson
     McCarthy (CA)
     McCaul (TX)
     McCrery
     McHenry
     McKeon
     McMorris Rodgers
     Meeks (NY)
     Melancon
     Mica
     Miller (FL)
     Miller, Gary
     Moran (KS)
     Musgrave
     Myrick
     Neugebauer
     Nunes
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Poe
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Regula
     Rehberg
     Reichert
     Renzi
     Reynolds
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Roskam
     Royce
     Ryan (WI)
     Sali
     Saxton
     Scalise
     Schmidt
     Sensenbrenner
     Sessions
     Shadegg
     Shimkus
     Simpson
     Smith (NE)
     Smith (TX)
     Sullivan
     Tancredo
     Tauscher
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Walberg
     Walden (OR)
     Weiner
     Weldon (FL)
     Westmoreland
     Whitfield (KY)
     Wilson (NM)
     Wilson (SC)
     Young (AK)

                             NOT VOTING--8

     Barrow
     Berman
     Brown-Waite, Ginny
     Cubin
     Hulshof
     Lee
     Payne
     Rush

                              {time}  1455

  Ms. BEAN, Mrs. McMORRIS RODGERS, Ms. CLARKE, Mrs. SCHMIDT, and 
Messrs. HOBSON, SIMPSON, PETERSON of Pennsylvania, DAVIS of Alabama, 
COLE of Oklahoma, SULLIVAN, LUCAS, TURNER, CRENSHAW, PITTS, RENZI, 
HUNTER, SAXTON, DAVID DAVIS of Tennessee, ROGERS of Michigan, and 
FOSTER changed their vote from ``yea'' to ``nay.''
  Mrs. BONO MACK, Mrs. SCHMIDT, Messrs. KIRK, WITTMAN of Virginia, 
PITTS, and PETERSON of Pennsylvania changed their vote from ``nay'' to 
``yea.''
  So (two-thirds not being in the affirmative) the motion was rejected.
  The result of the vote was announced as above recorded.




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