Congressional Record, Volume 158 Issue 112 (Wednesday, July 25, 2012)

[Congressional Record Volume 158, Number 112 (Wednesday, July 25, 2012)]
[House]
[Pages H5264-H5289]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

RED TAPE REDUCTION AND SMALL BUSINESS JOB CREATION ACT

The SPEAKER pro tempore. Pursuant to House Resolution 738 and rule
XVIII, the Chair declares the House in the Committee of the Whole House
on the state of the Union for the further consideration of the bill,
H.R. 4078.
Will the gentlewoman from Missouri (Mrs. Hartzler) kindly take the
chair.

{time} 1900

In the Committee of the Whole

Accordingly, the House resolved itself into the Committee of the
Whole House on the state of the Union for the further consideration of
the bill (H.R.

[[Page H5265]]

4078) to provide that no agency may take any significant regulatory
action until the unemployment rate is equal to or less than 6.0
percent, with Mrs. Hartzler (Acting Chair) in the chair.
The Clerk read the title of the bill.
The Acting CHAIR. When the Committee of the Whole rose earlier today,
amendment No. 5 printed in House Report 112-616 offered by the
gentleman from Massachusetts (Mr. Markey) had been disposed of.

Amendment No. 6 Offered by Mr. Watt

The Acting CHAIR. It is now in order to consider amendment No. 6
printed in part B of House Report 112-616.
Mr. WATT. Madam Chair, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:

Page 3, line 18, strike ``or (d)'' and insert the
following: ``(d), or (e)''.
Page 5, insert after line 7 the following:
(e) Exception for Regulatory Actions Pertaining to Certain
Intellectual Property Rules.--An agency may take a
significant regulatory action if the significant regulatory
action is a regulatory action by the United States Patent and
Trademark Office that will help streamline the application
processes for patents and trademarks, including rules
implementing the micro entity provision of the Leahy-Smith
America Invents Act.
Page 10, insert after line 13 the following and redesignate
provisions accordingly:
(c) Intellectual Property Exception.--Section 202 shall not
apply to a midnight rule if the midnight rule is a rule made
by the United States Patent and Trademark Office that will
help streamline the application processes for patents and
trademarks, including regulations implementing the micro
entity provision of the Leahy-Smith America Invents Act.
Page 19, insert after line 25 the following:
(d) Exception.--This section shall not apply in the case of
any consent decree or settlement agreement in an action to
compel agency action by the United States Patent and
Trademark Office that will help streamline the application
processes for patents and trademarks, including regulations
implementing the micro entity provision of the Leahy-Smith
America Invents Act.

The Acting CHAIR. Pursuant to House Resolution 738, the gentleman
from North Carolina (Mr. Watt) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from North Carolina.
Mr. WATT. Madam Chair, I yield myself such time as I may consume.
Madam Chair, after 6 long years of negotiation, thoughtful
consideration, and bipartisan cooperation, we passed a patent reform
bill which was signed into law on September 16, 2011, by President
Obama. At the time the bill was passed, Speaker Boehner said:

Modernizing our patent system for America's innovators and
job creators is an important part of the Republican Jobs
Plan. This bipartisan measure reflects our commitment to find
common ground with the President on removing barriers to
private sector job growth, and I am pleased to see it signed
into law.

Under the America Invents Act, we the Congress, Republicans and
Democrats, directed the United States Patent and Trademark Office to
issue 20 implementing rules. Of the 20 implementing rules, seven have
already been implemented, nine have been noticed, and four are under
development. Under this bill that we are considering today, that entire
process would be stopped in its tracks.
Among the most troubling aspects of stopping the rulemaking process
in this case is a rule that would be specifically designed to assist
micro entities in securing patents for their inventions. It's a law
that says, once the rule is adopted by the Patent and Trademark Office,
micro entities will get a 75 percent reduction in the filing fees that
they have applicable to them.
The Director of the Patent and Trademark Office has said:

The new micro entity provision in the America Invents Act
makes our patent system more accessible for smaller
innovators by entitling them to a 75 percent discount on
patent fees. By paying discounted patent fees as micro
entities, smaller innovators can access the patent system to
move their ideas into the marketplace.

Although the micro entity definition became effective September 16
when the President signed the bill into law--the date of enactment of
the patent reform bill--the discount is not available to these small
entities until these rules are passed, and this bill would make it
impossible for us to adopt the rules.
I reserve the balance of my time.
Mr. GRIFFIN of Arkansas. Madam Chair, I rise in opposition to the
amendment.
The Acting CHAIR. The gentleman is recognized for 5 minutes.
Mr. GRIFFIN of Arkansas. Madam Chair, I first would like to say I
supported the America Invents Act, supported it in committee, and I've
got great news for you and great news for me, and that is I don't see
any evidence that the rules to which you referred would total $100
million in impact and meet that threshold. I just don't believe that's
the case. So this amendment is unnecessary. Even if they do meet that
threshold, there are several ways that they could be brought to
Congress for approval.
The amendment, like so many others offered here tonight, seeks to
carve out one set of regulations while leaving all the other
regulations under the bill. Surely folks have their favorite
regulations that they want to save and defend, and like a number of
other carve-out amendments, this one is just not necessary. Titles I
and II of the bill, for example, already exempt regulations, as I
indicated, that will not impose $100 million in cost on the economy.
Surely the regulations this amendment seeks to protect, those that
will streamline patent application processes, will save the economy
money, not impose more cost. There is, thus, no need to worry that they
will be affected by these titles of the bill.
Meanwhile, title III of the bill imposes balanced improvements in
transparency, public participation, and judicial review for regulatory
consent decrees and settlements. It will not prevent the Patent and
Trademark Office from settling regulatory suits by consent decree or
settlement. For these reasons, I oppose the amendment.
I reserve the balance of my time.
Mr. WATT. Madam Chair, I yield myself such time as I may consume.
Let me get this straight. We have passed a bill on a bipartisan basis
that directs that rules be written, and then we want, when the rules
are written, to have it come back to Congress so that we can approve
those rules. Tell me, first of all, what sense that makes.
Second of all, the gentleman obviously is not aware of some of the
corporations that have started off as micro enterprises if he does not
believe that this measures up to his $100 million, or whatever the
threshold is. Let me read him some of the companies that started off as
micro enterprises.
What about Google or Apple or Instagram or Microsoft or Facebook, a
whole litany of people that, were this 75 percent reduction in fees not
in effect, might have been discouraged from ever even applying for a
patent. So this notion that this doesn't add up to $100 million, or
whatever this threshold is, is just false.
The notion that we would tell the administration to adopt a set of
rules and then say, okay, we're going to micromanage you and you've got
to come back over here so we can cross your T's and dot your I's in a
noncontroversial way like this and delay the process of innovation in
our country is just nonsensical.
I yield back the balance of my time.
Mr. GRIFFIN of Arkansas. While I appreciate the passion of the
gentleman from North Carolina, it doesn't change the fact that it's
very unlikely that the impact on the economy would be $100 million or
more. That has nothing to do with the sales of the company. It has to
do with the impact of the regulation on the economy.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from North Carolina (Mr. Watt).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Mr. WATT. Madam Chair, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from North
Carolina will be postponed.

{time} 1910

Amendment No. 7 Offered by Mr. Loebsack

The Acting CHAIR. It is now in order to consider amendment No. 7
printed in part B of House Report 112-616.
Mr. LOEBSACK. Madam Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.

[[Page H5266]]

The text of the amendment is as follows:

Page 3, line 18, strike ``or (d)'' and insert ``(d), or
(e)''.
Page 5, after line 7, insert the following new subsection:
(e) Consumer Protection From High Fuels Prices Exception.--
An agency may take a significant regulatory action if such
action would have the effect of lowering the price of oil or
the wholesale or retail price of oil, gasoline, diesel, or
other motor fuels.
Page 10, after line 4, insert the following new paragraph:
(3) likely to result in lower oil prices or lower wholesale
or retail prices for oil, gasoline, diesel, or other motor
fuels;

The Acting CHAIR. Pursuant to House Resolution 738, the gentleman
from Iowa (Mr. Loebsack) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Iowa.
Mr. LOEBSACK. Madam Chairman, I yield myself as much time as I may
consume.
Madam Chairman, I wish to offer this amendment to provide the
opportunity to lower the price of gas and oil. The purpose of my
amendment is very simple: it's to ensure that our constituents are not
disadvantaged by blindly holding up actions that potentially lower oil
and gas prices. It will allow significant actions to move forward that
would lower prices for gasoline, diesel, oil or other motor fuels.
We know that some regulations can be problematic when they aren't
crafted carefully, with broad input and consideration for effects on
the ground. We all know that and we all agree with that.
In fact, I've supported legislation in the past to give small
businesses a bigger role in crafting regulations that affect them, and
I am a member of the bipartisan Congressional Regulatory Review Caucus.
But we also know that there are some regulations that can protect
public health, make our economy function more smoothly, and provide
opportunity for all Americans to succeed. And as we struggle to recover
from the worst recession since the Great Depression, there are families
across the country making hard decisions about whether to put food on
the table, clothes on their back, or gas in the car. Middle class folks
we all know have been hurt disproportionately by higher gas prices, and
that's why this amendment, I believe, is so important.
I think it would be irresponsible to pass legislation that would
actually have the opposite effect, potentially, of its intention in a
number of areas, gas prices being one of them.
Rural Americans, like those in my home State of Iowa, are more likely
to have older vehicles, especially trucks, and farmers and others in
rural areas need trucks. That is their mode of transportation.
Rural residents also--I think it's unknown to a lot of folks who live
in urban areas--on average, drive 3,000 miles per year more than their
urban counterparts, a disparity particularly evident when considering
commutes to work.
My amendment will ensure that actions taken that would lower gas,
oil, or other motor fuels, the prices of these commodities, can move
forward and save money for all Americans and for Iowa families. If
there is an action that could lower gas prices, I would think that we
can all agree that it should move forward to benefit families and
businesses and farmers who are struggling just to make ends meet.
If this legislation under consideration were already in effect, no
significant actions could have been taken this year to lower oil and
gas prices during a time of record costs, and we all had conversations
about that on this floor earlier this year.
I've pushed for initiatives to utilize more American-produced energy,
but as our Nation continues to be dependent on foreign sources,
American families' costs at the pump continues to be subject to the
fluctuations of speculators and manipulation. And we've already heard
from some Members previously about that issue.
I think we need to be focusing our attention on becoming more energy
independent through a variety of energy sources. We need an all-of-the-
above approach to domestic energy production. There's no doubt about
that. And ensuring that actions to move forward that would lower oil or
gas prices in the U.S. is part of an all-of-the-above approach where we
need to be looking at all options.
I truly hope that my colleagues will support what is truly a
commonsense amendment, I believe, and I urge my colleagues to ensure
that our hands are not tied by this legislation and to take actions to
lower gas prices. I think we can improve this bill, and I think this
amendment will do that.
I reserve the balance of my time.
Mr. FARENTHOLD. I claim time in opposition.
The Acting CHAIR. The gentleman from Texas is recognized for 5
minutes.
Mr. FARENTHOLD. I rise in opposition to this amendment which would
provide an exception for regulations that attempt to manipulate the
price of oil, gas, and other fuels.
As I was listening to my colleague from across the aisle, I was
struck by the fact that he didn't actually mention any possible
regulations that could do that. I also would like to point out that our
hands, as Congress, are not tied. This bill ties the hands of
regulators.
If he is able to come up with a good idea to lower fuel prices, he
can bring it to Congress, we can pass it, the Senate can pass it, and
the President can sign it, just the way the Founding Fathers intended.
Just to be clear, I also want to point out that nothing in H.R. 4078
prevents the administration from taking any number of actions that
would increase the supply of domestic oil and gas and lower the price
of gasoline at the pump. The passage of this amendment, however, would
do nothing to lower the price at the pump.
Now, I realize this amendment seems to preserve the option to impose
price controls. That's the only thing I could think of that it could
do. We learned back in the 1970s that price control does nothing but
lead to shortage and lines at the gasoline pump. There's absolutely no
reason we need to return to the failed policies of the Carter
administration.
Now, if the current administration were truly interested in providing
relief at the pump, there are any number of actions they could do to
increase the supply of oil and gasoline and lower the price at the
pump. But the Obama administration's done little to tap into vast
domestic resources that would increase the supply of American oil.
Rather, under President Obama, permitting and leasing on Federal land
is actually down. Alas, the President has also vetoed or is opposed to
the Keystone pipeline, which would have connected not only Canadian oil
to refineries in the South but would have also have connected the new
finds in North Dakota in the Bakken shale sands.
Canadian sands production is expected to double to 3 million barrels
a day between 2010 and 2020, and domestic oil production will increase
by as much as 20 percent. The lack of a Keystone XL-like pipeline means
slower, less reliable, and less safe forms of transportation that will
continue to necessitate transporting domestic oil from North Dakota by
much more expensive and much less safe means of truck and rail, rather
than pipelines.
Lowering the cost of that transportation would lower the cost of that
crude oil and would lower the cost of gasoline at the pump. As a matter
of fact, a barrel of North Dakota Sweet sells for $62. That's lower
than the international price of oil, predominantly because of the
additional transportation costs necessary to bring it down to be
refined in the refineries that are currently set up in this country.
If this Bakken oil were made available to the rest of the country we
would see an economic boom. We would see lower prices for gasoline at
the pump. We would see more jobs in America. The east coast, in
particular, needs this oil and this gas made available to bring costs
down.
Bakken may lead to some price relief there. But it will also open
Canadian oil. We talk about energy independence, but realistically,
North America is the energy unit that we should be looking at for
providing our source. As we tap resources throughout the United States,
Canada, and Mexico, we are going to be able to become energy
independent much more rapidly than anyone ever thought as these new
technologies develop to let us reach oil and gas deposits that we
never, even 10 years ago, thought was possible.

[[Page H5267]]

I was talking to a geologist just recently when I attended a field
hearing in North Dakota, and he told me, when he was in school, they
always considered shale to be the source and would never be able to tap
it. But technology has proved that wrong. And, in fact, even with our
current technology, we're only getting a small percentage of the actual
oil trapped in that shale.
I'm confident that, as our technology develops, that is going to
become more and more available, and this is going to take care of it.
But what we know is what's running up the price of oil and gas is
excessive government regulation. And if we can put a hold on government
regulation, so our businesses can know what they have to do to comply
with those regulations, and not have the goalposts moved in the middle
of the game, we'll have new refining infrastructure built, we'll have
new factories built, we'll have new jobs created, and we will get to an
unemployment rate of 6 percent a whole lot faster, I think, than
anybody is predicting.
This bill is a rational step to put the brakes on an oppressive
government that is stifling job creation. And carving holes in it and
creating loopholes, like this amendment would do, only weakens that and
will slow our path to recovery. So I urge my colleagues to defeat this
amendment.
I yield back the balance of my time.

{time} 1920

Mr. LOEBSACK. Madam Chair, how much time is remaining on my side?
The Acting CHAIR. The gentleman from Iowa has 1\1/2\ minutes
remaining.
Mr. LOEBSACK. I don't know where to begin. I don't have enough time
to respond to everything that was said by my colleague on the other
side of the aisle.
What I will say at the outset is that this has nothing to do with the
Carter administration, that it has nothing to do with any previous
regulations, that it has nothing to do with cost control. This is a
very simple amendment. I think, if one reads the amendment, one will
find that there is absolutely nothing in the amendment that is feared
by the gentleman from the other side of the aisle. It's that simple.
In fact, it's this kind of debate, if we want to call it that, that
is something that is very upsetting to the American people at this time
and is something I hear in Iowa all the time. We've got to have a
rational debate that is based on fact. There is nothing in this
amendment whatsoever that the gentleman referred to. The amendment,
itself, because it is so simple and because it is open-ended, would
allow for many of the very same things that the gentleman on the other
side of the aisle suggests that we ought to do and that I may very well
be open to doing myself.
I think that's what's important about this amendment. It's simple.
It's open. In fact, it allows for the very kinds of things that he
mentioned to go forward. If this amendment is adopted, I think it would
vastly improve the underlying bill along the lines that the gentleman,
himself, argued.
With that, I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Iowa (Mr. Loebsack).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Mr. LOEBSACK. Madam Chair, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Iowa will be
postponed.

Amendment No. 8 Offered by Ms. Richardson

The Acting CHAIR. It is now in order to consider amendment No. 8
printed in part B of House Report 112-616.
Ms. RICHARDSON. Madam Chairwoman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:

Page 3, after line 26, insert the following new paragraph:
(3) necessary to properly implement the provisions of (and
amendments made by) the Patient Protection and Affordable
Care Act (Public Law 111-148) and the provisions of (and
amendments made by) title I and subtitle B of title II of the
Health Care and Education Reconciliation Act of 2010 (Public
Law 111-152);

The Acting CHAIR. Pursuant to House Resolution 738, the gentlewoman
from California (Ms. Richardson) and a Member opposed each will control
5 minutes.
The Chair recognizes the gentlewoman from California.
Ms. RICHARDSON. I would like to extend a thanks to Chairman Smith and
to Ranking Member Conyers for having their hard work brought to
fruition here with this legislation.
Madam Chairwoman, the Richardson amendment would allow the government
to take significant regulatory action if and when the monthly national
unemployment rate is above 6 percent, thereby allowing for the action
and proper implementation of the Patient Protection and Affordable Care
Act and the health provisions of the Health Care and Education
Reconciliation Act of 2010.
The sponsors of H.R. 4078 suggest the legislation will promote job
growth. I argue that the Affordable Care Act, when fully implemented,
will promote job growth, support economic growth and spur deficit
reduction in our economy in terms of the deficit that we currently are
experiencing. My amendment is intended to ensure that adequate health
care through the Affordable Care Act can be fully implemented.
Because so many Americans rely on their employers to have access to
health care, high levels of unemployment can leave many of our U.S.
citizens uninsured and underinsured. When the monthly unemployment rate
is above 6 percent, something this Nation has unfortunately incurred
for approximately 2 years now, that is the very time, I would argue,
that our government was created to assist U.S. citizens and all of
those who obviously need health care. A strong economy needs healthy
workers.
There is a common and persistent misconception that the Patient
Protection and Affordable Care Act will pose an undue burden on small
businesses and will limit job creation, but this is absolutely untrue.
Rather, the Affordable Care Act offers $40 billion in tax credits for
small businesses to help pay for employee health insurance coverage. In
2011, this tax credit was used to pay for the coverage of over 2
million uninsured Americans. In my home district, the 37th
Congressional District of California, 510 small businesses have already
received this tax credit to maintain or expand the health insurance
coverage for their employees.
The Affordable Care Act also establishes health insurance exchanges
in which small business owners and employees can pool their buying
power to shop for affordable plans. Beginning in 2014, all the plans
offered in these exchanges will have guaranteed sets of minimum
benefits to ensure that small businesses are not faced with gaps in
coverage or fine print restrictions, which are documented problems that
have plagued recipients in the past.
Despite the unfounded claims that this bill will raise taxes for
everyday Americans, the Affordable Care Act will bring a significant
and immediate savings to the middle class at a time when we need it
most.
With that, I reserve the balance of my time.
Mr. GRIFFIN of Arkansas. I rise in opposition to the amendment.
The Acting CHAIR. The gentleman is recognized for 5 minutes.
Mr. GRIFFIN of Arkansas. Madam Chair, this amendment would exempt
regulations to implement ObamaCare, the President's health care law,
from the regulatory freeze.
Fear and uncertainty among job creators of the coming regulatory
tidal wave to implement ObamaCare is certainly holding back our
economic recovery. The Congressional Budget Office projects that
ObamaCare will cost over $1.1 trillion. For American small businesses
that are already struggling to stay afloat, this is a staggering
burden.
If you want to know what small businesses think about the bill that
is before us, I will tell you that, in Arkansas, they support it, but
they certainly do not support ObamaCare. I would also point out, Madam
Chair, that the NFIB, the premier small business organization in
America, supports the bill.
It is estimated that ObamaCare will require nearly 160 new boards,
bureaus,

[[Page H5268]]

bureaucracies, and commissions. Overall, the Federal Government will
issue, roughly, 10,000 pages of new regulations to implement the so-
called ``health care reform.'' Yet this amendment would exempt these
regulations from title I of the Regulatory Freeze for Jobs Act.
At a time when we should be working to repeal ObamaCare and to
replace it with patient-centered health care reform, this amendment
simply makes no sense. I would also point out, Madam Chair, that if
there are regulations that the Obama administration wants to see
proceed through the process, they can certainly send them to Congress
and see if we will approve them. We can take a look at them, see if
they make sense, see if they do what they intend, and see if it's right
for the country.
For these reasons, I oppose this amendment.
I reserve the balance of my time.
Ms. RICHARDSON. Madam Chairwoman, how much time do I have remaining?
The Acting CHAIR. The gentlewoman from California has 2\1/4\ minutes
remaining.
Ms. RICHARDSON. I am convinced that President Obama does care, but
today, I am here to talk about the Patient Protection and Affordable
Care Act.
Regarding that act, I think it's important to note that this
amendment is not simply a blanket exemption; rather, it deals with the
time when unemployment exceeds 6 percent. For those American people--
many of whom I represent, who have struggled through no fault of their
own to be able to gain employment--this is a significant exemption that
is needed.
Madam Chairwoman, when we look at the implementation of the Patient
Protection and Affordable Care Act, it passed this body in Congress; it
passed the body in the Senate; it was signed into law; and now it has
been upheld by the Supreme Court of the United States. Health care
reform is finally here to stay, and the time has come for us to commit
ourselves and our attention and our efforts in this Congress to
wholeheartedly supporting its enactment. Where changes and revisions
and improvements need to be made, we have an opportunity to do so.
The Richardson amendment I bring forward today does not obligate
additional funds to address health care reform. It would simply give
the Federal Government the freedom--the freedom that we all believe
in--to pursue all available options in the future, especially in the
greatest times of need. My amendment ensures that the Patient
Protection and Affordable Care Act is implemented without adding time
and cost-consuming procedural burdens.
I urge my colleagues to join me in supporting Richardson amendment
No. 8 and to reaffirm this Nation's commitment to providing the basic
necessity. Certainly, I think that equates to the level of the right to
the pursuit of happiness, which is what America was built on.
With that, I yield back the balance of my time.
Mr. GRIFFIN of Arkansas. I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentlewoman from California (Ms. Richardson).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Ms. RICHARDSON. Madam Chairwoman, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentlewoman from California
will be postponed.

{time} 1930

Amendment No. 9 Offered by Ms. Richardson

The Acting CHAIR. It is now in order to consider amendment No. 9
printed in part B of House Report 112-616.
Ms. RICHARDSON. Madam Chair, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:

Page 3, after line 26, insert the following new paragraph
(and redesignate succeeding paragraphs accordingly):
(3) necessary to carry out the Fair Credit Reporting Act;

The Acting CHAIR. Pursuant to House Resolution 738, the gentlewoman
from California (Ms. Richardson) and a Member opposed each will control
5 minutes.
The Chair recognizes the gentlewoman from California.
Ms. RICHARDSON. Madam Chairwoman, the Richardson amendment simply
improves the bill by allowing for necessary regulations to be
promulgated when the monthly national unemployment rate is above 6
percent in order to protect consumers against unintended consequences
that they might suffer under the Fair Credit Reporting Act.
This amendment promotes job growth by ensuring small businesses have
fair and accurate credit scores to obtain competitive interest loans.
This amendment enables the appropriate Federal agencies, such as the
Federal Reserve, the Federal Trade Commission, and the Consumer
Financial Protection Bureau, to issue regulations necessary to protect
consumers and to promote small businesses.
The Fair Credit Reporting Act, also known as FCRA, is an important
piece of legislation that protects the accuracy, fairness, and the
privacy of information collected at credit bureaus. It gives consumers
the right to view and challenge the information in their respective
credit reports. Although this legislation was originally passed well
over 40 years ago, this issue has remained in the forefront of public
consciousness, and in 2003 we had provisions that were added to deal
with identity theft.
The Fair Credit Reporting Act requires that consumer reporting
agencies, also known as CRAs, ensure that they provide up-to-date
information and remove negative information after 10 years. These
requirements mandated by the Fair Credit Reporting Act provide
entrepreneurs with fair credit scores and enable them to seek
competitive loans to start or expand small businesses.
There are 28.6 million small businesses in the United States, and
small businesses create two out of every three jobs in this country. In
the State of California that I represent, small businesses employ more
than 50 percent of the State's 16 million workers and represent 90
percent of the job growth for higher income.
With that, Madam Chair, I reserve the balance of my time.
Mr. McHENRY. Madam Chair, I rise in opposition.
The Acting CHAIR. The gentleman from North Carolina is recognized for
5 minutes.
Mr. McHENRY. Madam Chair, I yield myself such time as I may consume.
I would say to my colleagues that the Fair Credit Reporting Act
should not be singled out for special treatment.
This bill is about creating jobs; and the American people know, as we
know, and as rational people looking at the process of regulation know,
that higher regulation out of Washington means lower job growth. In
particular, what this amendment would do is further constrict access to
credit. Furthermore, this bill does not inhibit any individual from
getting their free credit report or from having access to their credit
report.
What this bill prevents, however, is an agency like the CFPB, which
is a very powerful agency with an unconfirmed director. The President
went around the process that the Senate has outlined for Senate
confirmation. It's a very controversial appointment. They've taken
these powers, and they can write very costly and expensive rules. Those
costly rules inhibit credit opportunity for Americans, if not done
correctly. We've seen some actions already out of this agency that
raise great concerns that it's going to be very costly to small banks
and to small businesses.
Let's avoid that. Let's reject this amendment. Let's create jobs by
passing this bill.
With that, I reserve the balance of my time.
Ms. RICHARDSON. Madam Chair, how much time do I have remaining?
The Acting CHAIR. The gentlewoman from California has 3 minutes
remaining.
Ms. RICHARDSON. Madam Chair, in relation to the comments that have
been made, I'd like to speak to why the fair credit reporting agencies
would be exempted in this particular amendment.

[[Page H5269]]

When you consider that we're national representatives--and rational
legislators do know, I would say, and I think small business owners are
aware, that without capital, without the ability to have appropriate
credit scores and not to be able to extend that, not to be able to get
appropriate capital to have your business to be successful, there are
no jobs. There is no thriving economy. That's why, in fact, this Agency
should be exempted.
The statistics are clear: small businesses are the key to our
economic recovery and our continued growth. Relieving the financial
burdens of small businesses stabilizes the uncertainty and encourages
critical job growth. Entrepreneurs and small businesses are the engines
of innovation and economic growth, and the small businesses in my
district are at the forefront of that innovation.
It would be wrong and counterproductive to limit the Federal
Government's ability to support small businesses when they need it
most. I urge my colleagues to join me in supporting Richardson
Amendment No. 9 and reaffirming our commitment and this Nation's
commitment that when businesses need the assistance, when they, in
fact, can qualify for the assistance, that improper reporting or old
reporting certainly shouldn't hinder their ability to have that vibrant
business.
With that, I yield back the balance of my time.
Mr. McHENRY. Madam Chair, I would say in closing that the Fair Credit
Reporting Act should not be singled out for special treatment, nor
should the Consumer Financial Protection Bureau be singled out for
special treatment. We should not treat the CFPB rulemaking powers
differently than any other Federal agency dealt with under this
legislation before us.
Let me also say to my colleagues that it's very important to note
that law enforcement actions will continue. Bad actors can continue to
be rooted out, regardless of this legislation. That power is still
given to the CFPB and other law enforcing agencies across the
government. Furthermore, consumers will continue to have access to
their credit reports, and this amendment doesn't address a consumer's
ability to get that credit report.
Furthermore, let's create jobs by eliminating regulations that
inhibit job growth. Let's roll back this uncertainty and give the
American people a level of certainty and some expectation of the
regulatory framework they have to work under. That's the way we help
small businesses be able to take that risk, be able to get that access
to credit so they can create jobs, and maybe even keep the doors open
and the lights on.
With that, I urge my colleagues to reject this amendment and pass the
underlying bill.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentlewoman from California (Ms. Richardson).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Ms. RICHARDSON. Madam Chair, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentlewoman from California
will be postponed.

Amendment No. 10 Offered by Mr. Connolly of Virginia

The Acting CHAIR. It is now in order to consider amendment No. 10
printed in part B of House Report 112-616.
Mr. CONNOLLY of Virginia. Madam Chairman, I have an amendment at the
desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:

Page 5, strike lines 4 through 7 and insert the following:
(3) Congressional action.--With respect to any submission
by the President under this subsection--
(A) Congress shall give expeditious consideration to the
submission by taking appropriate action not later than the
end of a 7-day period beginning on the date on which the
submission is received; and
(B) in the case that Congress fails to act upon the
submission during such period, section 102(a) shall not
apply.

The Acting CHAIR. Pursuant to House Resolution 738, the gentleman
from Virginia (Mr. Connolly) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Virginia.
Mr. CONNOLLY of Virginia. Madam Chairman, my simple amendment would
clarify the congressional procedure for acting on the President's
written congressional waiver request as provided for in the bill.
Based on their remarks today, it appears my friends on the other side
of the aisle view the availability of congressional waivers as
sufficient to ensure commonsense, popular safeguards such as rules
benefiting veterans with catastrophic injuries, assisting students with
loan debt, or providing families with peace of mind that the peanut
butter their children eat will not poison them.

{time} 1940

So they are not blocked by this bill's arbitrary across-the-board
moratorium action on significant rulemaking actions because there is a
waiver provision.
Yet for all of the emphasis on the importance of these congressional
waivers, this bill, H.R. 4078, only provides vague, unclear guidance
concerning how such actions would proceed on the President's waiver
requests. H.R. 4078 only specifies that Congress shall give each
submission by the President ``expeditious consideration'' and take
``appropriate legislative action'' without defining these terms in
statute. Anyone who has watched this 112th Congress here in the House
knows that they shouldn't put undue faith in terms like ``expeditious
consideration.''
Republican claims to the contrary notwithstanding, as currently
written, the congressional waiver provisions seem designed to spur
effective talking points, not exactly an efficient process for
considering Presidential submissions.
My simple amendment ensures that if the President requests a
necessary and urgent waiver, such as the flexibility for the Department
of Labor to issue a rule protecting coal miners from black lung
disease, expeditious consideration shall not take longer than 1 week.
This simple amendment takes no position on the wisdom of the given
waiver request. It simply requires the Congress, whether it decides to
approve or disapprove a President's request, to do so within 7 days.
As the numerous amendments filed by my colleagues demonstrate, the
majority of the President's waiver requests will address
noncontroversial, yet critically important, rules that protect our
Nation's veterans, families, workers, environment, and economy. By
supporting this perfecting amendment, Members will ensure that no
American is endangered because of congressional inaction.
I reserve the balance of my time.
Mr. GRIFFIN of Arkansas. I rise in opposition to the amendment.
The Acting CHAIR. The gentleman is recognized for 5 minutes.
Mr. GRIFFIN of Arkansas. As I have said with regard to the other
amendments that we have discussed here tonight, Madam Chair, there are
several exemptions in the bill, and there is also the waiver, as the
gentleman from Virginia has discussed.
Now, before I get to the waiver, I would like to point out that,
unless I'm missing something, I think that the safety of peanut butter
that I and my 2-year-old and my 4-year-old eat--I like crunchy; they
like creamy--I think it's already regulated. And if it's not, we
certainly make provision for that to happen. I, like the gentleman from
Virginia, want to make sure people are protected. I happen to also be a
veteran, and I certainly want to see veterans taken care of.
I want to make it clear that our bill does not go back and repeal
regulations that are finalized and in place. What it does is it says,
let's take a deep breath; let's have a time-out; and let's allow the
many small businesses and other job creators in this country an
opportunity to catch up.
We've heard a lot about small businesses tonight. And I will point
out once again that the premier small business organization in this
country is the NFIB, and they support the bill.
Now, with regard to the gentleman from Virginia's amendment, the
Regulatory Freeze for Jobs Act will put a moratorium on unnecessary
regulations that will cost the economy $100

[[Page H5270]]

million or more until the economy recovers. But even the administration
admits that regulations can kill jobs and hinder economic growth,
although this doesn't seem to have prevented them from issuing more and
more of these most costly regulations.
Title I of the bill is carefully drafted to allow the President to
issue certain necessary regulations during the moratorium period, such
as regulations that implement trade agreements, for national security,
for criminal and civil rights laws, the enforcement of those laws, and
for an imminent threat to health or safety or other emergency. For any
necessary regulation not covered by one of these exceptions, we have
the congressional waiver that the gentleman from Virginia referred to.
Under it, the President can ask permission for Congress to make the
regulation, to approve it. This is entirely appropriate, since the
Constitution vests in Congress ``all legislative powers.''
But this amendment could totally undermine the moratorium by allowing
the President to swamp Congress with waiver requests. If Congress
doesn't act on each request within 7 days--and the amendment doesn't
specify whether this is calendar, session, or legislative days--then
the waiver is deemed granted. With its track record of dramatically
increasing the regulatory burden on the economy, this administration
has shown that it cannot be trusted not to abuse the process this
amendment would create. For these reasons, I oppose the amendment.
I reserve the balance of my time.
Mr. CONNOLLY of Virginia. May I inquire of the Chair how much time is
left on this side.
The Acting CHAIR. The gentleman from Virginia has 2\1/2\ minutes
remaining.
Mr. CONNOLLY of Virginia. I yield 2 minutes to the gentleman from
Maryland (Mr. Cummings), the distinguished ranking member of the
Oversight and Government Reform Committee.
Mr. CUMMINGS. Madam Chair, I support the amendment offered by Mr.
Connolly.
The congressional waiver provision in this underlying bill is a
farce. It requires the President to ask Congress its permission to
issue a regulation and then wait for both Houses of Congress to approve
the waiver. Give me a break. That could take months in the best case,
but the more likely scenario is that it would never happen at all--and
everybody knows that.
By adopting this amendment, we can ensure that the President can
truly issue regulations when needed. Under this amendment, the waiver
provision in the underlying bill will be changed so that if Congress
doesn't act within 7 days on a waiver request submitted to it by the
President, the waiver would be granted.
Let me be clear: under this amendment, Congress would still have the
opportunity to object to a regulation when necessary. This amendment
simply ensures that Congress' failure to act doesn't prevent the
President from issuing needed regulations.
The majority claims that the congressional waiver provision in the
underlying bill will ensure that the President can still issue
important regulations. If the majority really intends to give the
President that flexibility, they will adopt this amendment.
I hope my colleagues will join me in supporting this amendment.
Mr. GRIFFIN of Arkansas. I would just point out, Madam Chair, that
the part of the bill that the gentleman from Maryland calls ``a
farce,'' the Founding Fathers might refer to it as ``balance of
powers.'' And that's what we're trying to do here, allow Congress to
share in the process since we are the source of all legislative power.
That is just another reason that I oppose this amendment.
I reserve the balance of my time.
Mr. CONNOLLY of Virginia. Of course I know my friend from Arkansas
knows his history. That was the whole battle of Federalist versus anti-
Federalist. The Federalists won out. That's how the Constitution of the
United States got adopted, a more powerful government to help the union
of the States.
Madam Chairman, I will close by simply noting the irony of opposing
any kind of finite time limit. The very organization cited by my friend
from Arkansas, NFIB, screams the loudest about uncertainty. Yet here we
are, going to have expeditious consideration that could take weeks or
months here in this body, and we're not going to put a finite time
limit to give them the predictability and the certainty that they say
they want. I think it's the minimum required in this legislation if we
really mean to effectuate change.
I yield back the balance of my time.
Mr. GRIFFIN of Arkansas. I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Virginia (Mr. Connolly).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Mr. CONNOLLY of Virginia. Madam Chairman, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Virginia
will be postponed.

Amendment No. 11 Offered by Mr. Posey

The Acting CHAIR. It is now in order to consider amendment No. 11
printed in part B of House Report 112-616.
Mr. POSEY. Madam Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:

Page 6, line 14, insert after the period the following:
``Such award shall be paid out of the administrative budget
of the office in the agency that took the challenged agency
action.''.

{time} 1950

My amendment simply calls agency bureaucrats to account when they
exceed their delegated authority.
Section 104 of the underlying bill permits a court to award
reasonable attorney's fees and costs to a small business when they
prevail in a suit against an agency that has exceeded their statutory
regulatory authority.
My amendment takes this as a step further by requiring any attorney's
fees and costs be paid out of the administrative budget of the
particular office that is found to have exceeded that authority. I
believe this will give regulators greater pause before they issue
regulations and will cause them to double-check to make sure that they
are on solid ground. When an agency overreaches, what they are
fundamentally doing is denying an American citizen their right to
pursue opportunity, create jobs, or enjoy the benefits of their labor.
In a sense, they are basically robbing someone of their opportunity.
Outside of the regulatory environment, when someone takes property that
belongs to someone else, there are criminal sanctions if we catch them
doing it. In the regulatory environment, however, the best that an
American citizen can expect from the Federal Government is ``I'm
sorry,'' and that's at best.
We change that in this bill. With the adoption of my amendment, we
change that for the particular regulators that exceed their authority.
If adopted, this amendment will give more certainty to the regulatory
process, and it ensure regulators are more prudent when drafting
regulations. We make sure that any damages are not paid out of the
agency slush fund but, rather, out of the administrative budget of the
offending office. That brings personal and government accountability to
the

[[Page H5271]]

regulatory process, something that's desperately needed. Now they will
have some skin in the game, so to speak.
I urge my colleagues to support this good amendment, and I reserve
the balance of my time.
Mr. NADLER. Madam Chair, I rise to claim the time in opposition.
The Acting CHAIR. The gentleman from New York is recognized for 5
minutes.
Mr. NADLER. I strongly oppose the Posey amendment because it makes
even worse an already deeply problematic provision.
Under title I of this bill, a court is required to award attorney's
fees and costs to a ``substantially prevailing small business'' in any
civil action to challenge an agency's compliance with the moratorium.
That provision further states that a small business can be
substantially prevailing in the meaning of the bill even in the absence
of a final judgment in its favor ``if the agency that took the
significant regulatory action changes its position after the civil
action is filed.''
There are two problems with this. First, it doesn't matter if the
agency's change in position had absolutely nothing to do with the civil
action. A court would still have to award attorney's fees to a small
business that challenges an agency's compliance with the moratorium in
court, even if the change in policy had nothing to do with the lawsuit.
Bad as this provision already is, the Posey amendment makes it worse
by requiring that any award of attorney's fees and costs be taken out
of the defendant agency's budget. Agencies are already straining under
diminishing financial and staff resources, thanks in no small part to
the budget priorities of this House during this Congress. Further
debilitating agencies by taking fee awards out of their budgets--even
under circumstances when their change in position had nothing to do
with the underlying lawsuit--further damages agencies' ability to do
what Congress tasked them with doing, namely, protecting public health
and safety.
What this amendment says is, if an agency has a regulation which, in
its judgment, it must issue to protect the public health and safety and
a small business sues to stop that, and even if the small business
doesn't prevail, if there is any change in the agency's position, and
even if that change in position has nothing to do with the subject of
the lawsuit by the small business, it must pay attorney's fees. And,
under this amendment, it must pay attorney's fees out of its own
budget. That is dangerous because it will debilitate the agencies that
we task with protecting the public health and safety.
Second of all, it is self-defeating. If you are the agency and you
know if you are going to change your position in any way you're going
to have the pay the attorney's fees out of your own budget, better
don't change. Fight the lawsuit. Don't give in. Fight the small
business because you may win; while, if you change your position in any
way, if you compromise, if you say, you know, they don't have that
great of a case but we can accommodate them by making a small change--
no, then you have to pay attorney's fees out of our own budget. So
don't accommodate them. Don't comprise with them. Don't make the
change. Fight them to the bitter end. That doesn't help the small
business, and it certainly doesn't help the American people who need
these agencies to police the marketplace and to protect the public
health and safety. So it defeats its own purpose. It is just wrong on
so many levels.
I reserve the balance of my time.
Mr. POSEY. Madam Chair, how much time do I have?
The Acting CHAIR. The gentleman has 2 minutes remaining.
Mr. POSEY. I yield 1 minute to the gentleman from Arkansas (Mr.
Griffin).
Mr. GRIFFIN of Arkansas. Madam Chair, I rise in support of this
amendment. If an agency improperly makes a regulation during the
moratorium period, as written, the Freeze Act would allow a small
business that successfully challenges the action to collect attorney's
fees. The gentleman from Florida's amendment would strengthen this
provision by ensuring that any attorney's fees awarded under title I
come out of the agency's budget and not from the general Federal
Treasury through, for example, the judgment fund. If an office or
agency defies the law and tries to make a regulation that should be
subject to the Freeze Act, then that particular office or agency should
bear the consequences of forcing a small business to go to court to
vindicate its rights.
For these reasons, I support the amendment.
Mr. NADLER. How much time do I have remaining?
The Acting CHAIR. The gentleman has 2 minutes remaining.
Mr. NADLER. Madam Chair, I yield myself such time as I may consume.
Again, we oppose the bill to start with because we shouldn't have a
moratorium on rules that are intended to protect the public health and
safety that may be necessary.
But second of all, this amendment is self-defeating because if a
small business sues the agency, two things. Number one, let's assume
that the agency thinks that the small business' suit has some merit,
not enough to win the case, but some merit. Under this amendment, the
agency cannot compromise, cannot say, You're right; we'll make this
change, because the moment it makes a change, even a minor change, then
it is no longer the prevailing party. The small business, under the
definition of the bill, is the prevailing party and will get attorney's
fees, and the attorney's fees come out of the budget--maybe the small
budget--of the agency. So rather than yielding in any way, rather than
compromising with the small business, fight them. Fight them tooth and
nail. That's what this amendment says to the agency. It is, on its own
terms, silly and self-defeating, and I urge its defeat.
I yield back the balance of my time.
Mr. POSEY. Let me tell anyone who may not have ever seen a war with
an agency over agency rules before, they dig in and they fight to the
death anyway, whether it's coming out of their budget or not. I've seen
them lose at three levels with a private citizen and go after them yet
a fourth time because their pockets are bottomless and they hope they
can break the back of a citizen like that.
You know, what make this country unique is we believe we get our
rights from God. We believe in inalienable human rights here, and we
give rights to government. Government doesn't give us rights. We give
rights to our government. And we're charged with administering the
rights that were given to our government here in Congress. And we give
the administration, we give the agencies the right to write rules,
specific rules. We don't allow them, without our authority and beyond
the scope of their authority, to abuse citizens, to steal their
productivity, their labor, and the benefits that they've worked hard
for. And that's what the agencies have done. We have asked them not to
do it. They've reformed the Administrative Procedures Act a number of
times. The agencies just don't get the message. They see it as their
goal and their destiny to be the boss.
Congress is supposed to have dominion over the bureaucrats, and this
is one of the ways that we're going to enforce that dominion. We don't
let the fox run the henhouse.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Florida (Mr. Posey).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Mr. POSEY. I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Florida will
be postponed.

{time} 2000

Amendment No. 12 Offered by Mr. Nadler

The Acting CHAIR. It is now in order to consider amendment No. 12
printed in part B of House Report 112-616.
Mr. NADLER. Madam Chair, I have an amendment at the desk made in
order under the rule.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:

Page 8, line 2, insert after ``guidance'' the following:
``(other than a rule or guidance regarding the safety of a
civilian nuclear power plant)''.

[[Page H5272]]

Page 19, after line 25, insert the following new
subsection:
(d) Exception.--The provisions of this title shall not
apply in the case of a consent decree or settlement agreement
pertaining to a civilian nuclear power plant.
Page 65, line 17, strike ``section (p)'' and insert
``sections (p) and (q)''.
Page 66, after line 5, insert the following:
``(q) Exception for Certain Projects.--This subchapter does
not apply in the case of any project that pertains to the
safety of a civilian nuclear power plant.''.

The Acting CHAIR. Pursuant to House Resolution 738, the gentleman
from New York (Mr. Nadler) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from New York.
Mr. NADLER. Madam Chair, I yield myself 4\1/2\ minutes.
Madam Chair, I rise in support of my amendment, which would exempt
rules to protect nuclear power plant safety from titles I, III, and V
of the bill.
It is rare that the premise of an entire week of legislative work on
the House floor is wrong, but, here we are here. We are told this is
``regulatory week,'' during which House Republicans are supposedly
working to see that the yoke of oppressive government regulation is
thrown off and the American entrepreneur is freed to grow his or her
business and increase jobs. In thinking about this view, I am reminded
of a famous line in Shakespeare's MacBeth, ``It is a tale told by an
idiot, full of sound and fury, signifying nothing.''
We have heard, and will continue to hear, a lot of sound and fury
this week on the House floor, but just like all the other regulatory
bills the House has passed this year, what we pass this week will die
in the Senate as well. So all of that talk will signify nothing. Like
health care repeal, on which we have taken 33 votes, this, too, is a
tremendous waste of time.
More importantly, there is no evidence to support the position that
overregulation is the major cause of our slow economic growth and high
unemployment rate. According to the Economic Policy Institute,
``economy-wide studies do not find a significant decline in employment
from regulatory policies.''
The real culprit of our slow growth and high unemployment is reduced
aggregate demand. Do not just take my word for it--this is what
economists and business are saying. The Wall Street Journal surveyed
dozens of economists last July, and it found that the ``main reason
U.S. companies are reluctant to step up hiring is scant demand.''
The National Federation of Independent Business found that when
business owners with declining sales were asked the cause, 45 percent
said declining sales. Only 10 percent said higher taxes and
regulations.
If all of this is true, why are we here making it harder for the
government to enact protective rules and regulations to protect the
public health and safety?
Bruce Bartlett, a senior policy analyst in the Reagan and George H.W.
Bush administrations, suggests an answer. He has said:

Regulatory uncertainty is a canard invented by Republicans
that allows them to use current economic problems to pursue
an agenda supported by the business community year in and
year out. In other words, it is a simple case of political
opportunism, not a serious effort to deal with high
unemployment.

Let us look at what the bill that this canard has brought us would
do. To me, it seems like Frankenstein. It's put together from various
different pieces that do not fit together, and it is very frightening.
For example, the underlying bill would block all and any major efforts
to protect public health, safety, the environment and so on until the
unemployment rate falls below the arbitrary figure of 6 percent; and
the bill would impose needless costs on the government and make
protecting health and welfare that much more difficult by putting
impediments to agreeing to consent decrees and settlements. What all
this means is that the most potentially dangerous industries, like
nuclear power, the safety of the American public would be put at
serious risk by this bill.
My amendment would attempt to make this Frankenstein bill slightly
less of a horror show by exempting the issue of nuclear power plant
safety from three sections of the bill.
The dangers of nuclear power are well known. One accident can doom
millions of people. Because of the almost unimaginable disaster that
could happen at a nuclear power plant, regulations to prevent accidents
or meltdowns in advance are critically important. The underlying bill
would make it harder for the Nuclear Regulatory Commission to adopt
such rules or policies, thereby putting millions of lives at risk.
Hampering the ability of the NRC to require safety measures like
those necessary to prevent a meltdown in the event of an earthquake or
an act of terrorism could be devastating. My amendment would free the
NRC from the burdens of this bill and allow it to promulgate those
rules and regulations necessary to protect us from the disaster of a
nuclear catastrophe such as those that occurred at Chernobyl in Russia
or at Fukushima in Japan.
I urge everyone to approve the amendment, and I reserve the balance
of my time.
Mr. ROSS of Florida. Madam Chair, I rise in opposition to the
amendment.
The Acting CHAIR. The gentleman is recognized for 5 minutes.
Mr. ROSS of Florida. Madam Chair, this amendment would unnecessarily
exempt regulations from title I and consent decrees and settlement
agreements contained in title III. Title I already contains adequate
exceptions for necessary covered regulations. Agencies do not yet need
another loophole to make regulations by consent decree or settlement
agreement.
As to title V, the part of the bill that was formerly known as the
Responsibly and Professionally Invigorating Development Act, also known
as the RAPID Act, this amendment would block needed construction
projects from breaking ground.
Unemployment is stuck above 8 percent and millions of Americans are
looking for work. The March 2011 Project No Project study identified
351 energy projects, including nuclear projects, that, if approved,
could generate $1.1 trillion for the economy and 1.9 million jobs.
I appreciate that the gentleman is concerned about the safety of
nuclear power, but this act does not require agencies to approve or
deny any particular project or permit application, nor would any agency
ever act on a permit application before all of the relevant review and
analysis has been completed; rather, the act establishes a reasonable
timetable for agencies to follow when conducting environmental review
and making permitting decisions. This will give job creators and
investors confidence that the process will not drag on indefinitely.
The act is consistent with the administration's own guidance and
rhetoric and with the President's Jobs Council's recommendations. It
builds upon bipartisan legislation that passed the 109th Congress,
which has dramatically reduced the time it takes to prepare
environmental impact statements for transportation projects. In short,
the road to economic recovery runs through permit streamlining.
For these reasons, I oppose the amendment, and I reserve the balance
of my time.
Mr. NADLER. Madam Chair, how much time do I have remaining?
The Acting CHAIR. The gentleman has 1 minute remaining.
Mr. NADLER. Madam Chair, first of all, we're dealing with nuclear
regulatory authority, with nuclear power plants, and we're not dealing
with small businesses. We are dealing with very large businesses.
Secondly, we're dealing with permits for construction or modification
of a nuclear power plant.
Because of the disaster at Fukushima, hopefully, we learned from
experience, it may very well be that the Nuclear Regulatory Commission
will want to put out new regulations or modify old ones in light of
what we have learned from what the Japanese didn't do right, and this
would say that they could not promulgate any such regulation as long as
unemployment is above 6 percent. As long as unemployment is above 6
percent, we must continue to risk all of our lives. That makes no
sense.
Second of all, yes, we want to do environmental streamlining. Well,
what this bill says--and this would apply to this, too--is that if an
environmental

[[Page H5273]]

impact statement takes longer than a certain number of days, forget
about it. But it's the sponsor, not the Nuclear Regulatory Agency, the
sponsor that controls the timing of the EIS.
So if you've got a terrible project which you know is an
environmental disaster, all you have to do, under this bill, is to
slow-walk the EIS because you control it, and then you don't have to
worry about any environmental consequences. That's backwards, it's
upside down, and it risks the public safety.
I urge the adoption of this amendment, and I yield back the balance
of my time.
Mr. ROSS of Florida. Madam Chair, let's look at this. If the
sponsoring agency decides to hold back and there is a presumption or
approval, who better to have the onus of having to prove that it should
not be built than those who fail to act as opposed to those who are
ready to act?
The one thing that we found out is that the regulatory environment is
so burdensome that whatever recovery our country attempts to pursue
right now is being strangled. Polls show it. A Gallup poll on February
15 of 2012 among 85 percent of U.S. small business owners who are not
hiring, nearly 46 percent of these cited being worried about new
government regulations. Small business owners cite complying with
government regulations as their most important problem.
It is overwhelming that we have placed in the hands of bureaucratic
agencies unaccountable authority that is strangling the business
recovery of this country. This bill as it is, without this amendment,
will allow for the streamlining and 4\1/2\ years of the permitting
process, and the permitting process will allow us to invest private
capital to create private sector jobs.
With that, I urge opposition to this amendment and yield back the
balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from New York (Mr. Nadler).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Mr. NADLER. Madam Chair, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from New York
will be postponed.

Amendment No. 13 Offered by Mr. McKinley

The Acting CHAIR. It is now in order to consider amendment No. 13
printed in part B of House Report 112-616.
Mr. McKINLEY. Madam Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:

Page 8, line 5, strike ``$100,000,000'' and insert
``$50,000,000''.
Page 8, line 25, strike ``$100,000,000'' and insert
``$50,000,000''.
Page 27, line 18, strike ``$100,000,000'' and insert
``$50,000,000''.

The Acting CHAIR. Pursuant to House Resolution 738, the gentleman
from West Virginia (Mr. McKinley) and a Member opposed each will
control 5 minutes.
The Chair recognizes the gentleman from West Virginia.

{time} 2010

Mr. McKINLEY. Madam Chairman, I rise today to offer an amendment that
will add more clarity and accountability to the regulatory process.
Under this bill, Congress will require additional analysis and
reporting on all government regulations affecting the economy by $100
million or more annually. This amendment simply reduces this threshold
of $100 million to $50 million.
In FY 2011, nearly 4,000 rules were published in the Federal
Register; only 83 of these rules were classified as having an annual
effect on the economy of $100 million or more. This represents only 2.1
percent of all the rules published. Thus far in 2012, 2,071 rules have
been published, and 51 of these have been projected to have an annual
effect on the economy of $100 million or more, equating to just 2.4
percent.
According to the Small Business Administration, the cumulative burden
of regulations exceeds more than $1 trillion annually on our economy,
costing more than $10,000 per household. Regulations are clearly
impacting our economy by this astounding $1 trillion amount each year,
and nearly 98 percent of these rules have virtually no economic
analysis or oversight.
We have more than 23 million Americans underemployed or unemployed.
This political maneuvering in rulemaking has to stop. The American
people sent us here to improve the economy and help them get back to
work, but not to allow the promulgation of more questionable, job-
hindering regulations.
When I served in the West Virginia legislature in the eighties and
early nineties, no regulations were adopted until the legislature
approved them--not just a few here and there, but every single
regulation came before the legislature for approval, significant or
otherwise.
Not conducting analysis and reports on nearly 98 percent of all
government agencies' proposed regulations confounds and confronts our
job creators with potentially excessive and burdensome rules.
Madam Chairman, as a reminder, in 1995, Congress passed the Job
Creation and Wage Enhancement Act, which dealt with lowering the
regulatory threshold from $100 million to $50 million, just as this
amendment would do today. That bill passed the House by a vote of 277-
141, including many Members who are present here today.
Madam Chairman, I reserve the balance of my time.
Mr. CUMMINGS. Madam Chairman, I rise in opposition to the amendment.
The Acting CHAIR. The gentleman from Maryland is recognized for 5
minutes.
Mr. CUMMINGS. I yield myself such time as I may consume.
I strongly oppose the amendment offered by the gentleman from West
Virginia (Mr. McKinley), which would make a very dangerous bill even
more devastating to the American people. If implemented, this amendment
would broaden the scope of this legislation to impede the issuance of
even more rules than are impeded by the underlying bill itself.
By lowering the threshold at which a ``significant regulatory
action'' is measured from rules that have an annual cost to the economy
of $100 million or more to just $50 million or more, the legislation
would prevent the implementation of important rules whose benefits far
outweigh their costs.
One of the things that we do not zero in on with regard to this
legislation overall--and we saw it in our committee--is the cost-
benefit analysis. I think it's very, very significant, when you think
about the fact that there are certain regs which save lives, many which
protect our constituents with regard to their pocketbooks, all kinds of
things. Sometimes when you just look at the cost of a business coming
in and complaining, as opposed to balancing it with regard to benefits,
sometimes I think things get out of balance.
The amendment clearly illustrates why Cass Sunstein believes a
moratorium on the issuance of regulations is such a bad idea. As he
stated at an Oversight Committee hearing last September, he said:
A moratorium would not be a scalpel or a machete, it would be more
like a nuclear bomb, in the sense that it would prevent regulations
that cost very little, and have very significant economic or public
health benefits.
This amendment only increases the size of the bomb we are dropping.
Just one example of a pending regulation that would be halted by this
amendment is the Securities and Exchange Commission's proposed rule
implementing a section of the Dodd-Frank Act to reduce the purchase of
``conflict minerals''--minerals whose sale by combatants in the
Democrat Republic of Congo is known to fund the human rights abuses
perpetrated by these combatants.
Dodd-Frank requires the SEC to issue a rule directing publicly held
companies to disclose whether any of four metals--gold, tantalum,
tungsten or tin--used in the products they produce came from Central
Africa, where trade in these commodities has funded years of civil war.
The SEC issued a proposed rule in December 2010, but has delayed
finalizing the rule in response to fierce business opposition and
business lobbying. This proposed rule is estimated to cost industry $71
million per year.
The benefits of this rule cannot be quantified, simply cannot. By
ensuring

[[Page H5274]]

that publicly traded companies in the United States track the supply
chain of minerals and disclose whether their purchases are financing
armed groups responsible for committing atrocities--killing people,
rapes, hurting people--this proposed rule will save lives and help
prevent sexual and gender-based violence. Adopting this amendment would
prohibit the issuance of this regulation intended to help quell
international violence and help end a humanitarian crisis.
We simply cannot put financial profit, as I said a few minutes ago,
above our moral obligation to protect the most vulnerable among us. So,
ladies and gentlemen, I urge Members to oppose this incredibly
dangerous amendment, and I reserve the balance of my time.
Mr. McKINLEY. Again, Madam Chairman, I just respectfully disagree
with the comments made, recognizing, again, that this House has already
spoken on this matter of reducing it from 100 to 50.
The real issue here is whether or not we want to have 98 percent of
the rules that are being promulgated to go without oversight and
review. It's time that we get this under control and allow more of our
people to get back to work.
I reserve the balance of my time.
Mr. CUMMINGS. Madam Chair, I hope that the body will vote against
this amendment.
I yield back the balance of my time.
Mr. McKINLEY. Madam Chairwoman, I just encourage my colleagues to
support this amendment and, once it's adopted, to support the piece of
legislation that's so needed.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from West Virginia (Mr. McKinley).
The question was taken; and the Acting Chair announced that the ayes
appeared to have it.
Mr. McKINLEY. Madam Chairman, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from West
Virginia will be postponed.

Amendment No. 14 Offered by Mr. Schweikert

The Acting CHAIR. It is now in order to consider amendment No. 14
printed in part B of House Report 112-616.
Mr. SCHWEIKERT. Madam Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:

Page 8, line 10, insert after the period the following:
``In determining the annual cost to the economy under this
paragraph, the Administrator shall take into account any
expected change in revenue of businesses that will be caused
by such regulatory action, as well as any change in revenue
of businesses that has already taken place as businesses
prepare for the implementation of the regulatory action.''.

The Acting CHAIR. Pursuant to House Resolution 738, the gentleman
from Arizona (Mr. Schweikert) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Arizona.

{time} 2020

Mr. SCHWEIKERT. Madam Chairman, my amendment hopefully is deemed to
be somewhat simple, as this piece of legislation moves forward, trying
to make sure that definition of cost from the regulatory environment,
is properly, shall we say, a proper box is built for it. So the
amendment in many ways is very simple.
The costs to organizations, a business, a business concern--as rules
are being promulgated, that business is spending money to get into
compliance. Those costs should also be calculated and put into the cost
to the economy calculation.
Secondly, as the calculations are being built, it should also--the
calculations should take a look at what it did to the revenues of
organizations, because those revenues are what are used to hire people,
to grow, to expand the economy and, actually, ultimately, expand the
tax base.
So the amendment's very simple. It basically says, as the
calculations are being made for cost of regulations, okay, let's
actually add them up in a fashion where we actually acquire the real
cost.
Madam Chairman, I reserve the balance of my time.
Mr. CUMMINGS. Madam Chair, I rise to claim time in opposition.
The Acting CHAIR (Ms. Hayworth). The gentleman from Maryland is
recognized for 5 minutes.
Mr. CUMMINGS. I yield myself such time as I may consume.
I strongly oppose the amendment offered by the gentleman from Arizona
(Mr. Schweikert), which would make an already ambiguous bill even
harder to implement. The amendment proposes to define the term ``annual
cost to the economy'' as including ``any expected change in revenue of
businesses'' caused by such regulation, including any change in revenue
as a result of preparing for the implementation of the regulation.
Imagine the consequences of this amendment. If it would cost a
business any additional funds to ensure that baby formula does not
contain toxic substances, that business could block a regulation
requiring those safety measures. Is that really how we want to run our
country?
The truth is that businesses routinely blame regulations for costs
they already incur. For example, power companies routinely blame the
EPA for the fact that high-cost coal plants struggle to compete in
today's market with lower-cost natural gas plants. Despite the fact
that many of these coal plants are shut down because they are
uncompetitive, some repeatedly blame EPA regulations for forcing their
closings.
The intention of this amendment appears to be to give businesses a
veto over any regulation they oppose just by claiming that it's
implementation somehow affects their bottom line. Since it would be
virtually impossibility for OMB to confirm or deny such claims, they
would be irrefutable.
Now, I do believe that the cost of regulations imposed on industry
should be one of many factors considered when we compare the overall
costs and benefits of a rule. But these costs should not be the
overriding factor to be considered, as this amendment would require.
The amendment is just another example of the misguided effort to put
business' profits before the health and safety of the American people.
Therefore, I urge Members to oppose this unworkable and harmful
amendment.
I reserve the balance of my time.
Mr. SCHWEIKERT. Reclaiming my time, Madam Chairman, and I appreciate
the gentleman from Maryland's comments. But he hit one part there, and
that is you do believe that the costs to industry, to business, to job
creators should be calculated. It's just the debate here is how they
should be weighted and how ultimately, I assume, how they should be
documented.
All I'm trying to accomplish here with this amendment is a couple of
very simple mechanics, those costs that go into the preparatory to be
in compliance with the newly promulgated rule should be calculated, and
that the calculation of the cost in the net revenues, gross revenues,
to a job-creating industry should also be part of that calculation.
And part of this was the bill is--I obviously fully support it, but I
thought actually creating a little tighter definition of many of the
types of costs that happen in a regulatory environment. I mean,
obviously we will have a separation on the view of does it stymie
regulation.
I'm from the view that I truly believe one of the great hindrances to
economic growth, to job growth in this country is the substantial
growth of our regulatory environment.
Okay, if we're going to run legislation that says regulations that
exceed a certain cost, you know, are held till employment reaches a
certain level, why not make sure we're calculating those appropriately?
Madam Chairman, with that, I reserve the balance of my time.
Mr. CUMMINGS. Madam Chair, I stand on my arguments, and I yield back
the balance of my time.
Mr. SCHWEIKERT. Madam Chairman, I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Arizona (Mr. Schweikert).
The amendment was agreed to.

[[Page H5275]]

Amendment No. 15 Offered by Mr. George Miller of California

The Acting CHAIR. It is now in order to consider amendment No. 15
printed in part B of House Report 112-616.
Mr. GEORGE MILLER of California. Madam Chair, I seek to offer an
amendment.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:

Page 8, line 10, insert after the period the following:
``Such term does not include a rule that would prevent or
reduce deaths or injuries caused by explosions and fires
related to the ignition of combustible dusts in the
workplace.''.
Page 10, after line 13, insert the following:
(c) Additional Exception.--Section 202 shall not apply to a
rule that would prevent or reduce deaths or injuries caused
by explosions and fires related to the ignition of
combustible dusts in the workplace.
Page 10, line 14, strike ``(c)'' and insert ``(d)''.

The Acting CHAIR. Pursuant to House Resolution 738, the gentleman
from California (Mr. George Miller) and a Member opposed each will
control 5 minutes.
The Chair recognizes the gentleman from California.
Mr. GEORGE MILLER of California. Madam Chair, my amendment would
allow the Occupational Health and Safety Administration to continue
efforts to prevent combustible dust and fire explosions in the
workplace. Combustible dust explosions threaten lives, limbs, jobs and
property across this country. And it's abundantly clear that Federal
regulatory action is needed, but the bill before us today threatens to
block that action.
Beginning in 2003, the Chemical Safety Board investigated three major
explosions caused by combustible dust in North Carolina, Kentucky and
Indiana, where 14 workers lost their lives. As part of its
investigation, the board identified hundreds of other combustible dust
fires and explosions, causing at least 119 fatalities and 718 injuries
over 15 years. The board recommended that OSHA issue rules to protect
against these hazards because the existing OSHA protections were
inadequate.
The investigators were not alone. Family members have also asked that
action be taken.
Tammy Miser of Kentucky testified before Congress how her brother,
Shawn Boone, was killed in a metal dust fire in an aluminum wheel plant
in Huntington, Indiana, in 2003.
She told us how Shawn suffered from this horrific event. She said
that Shawn did not die instantly. He laid on the smoldering floor after
the explosion while aluminum dust burned through his flesh and muscle
tissue. His breaths burned his internal organs as the blast took his
eyesight.
Shawn was still conscious and asking for help when the ambulance took
him. He lived for a number of hours before he finally succumbed to his
injuries.
Shawn wasn't the first to die at work this way, and he hasn't been
the last.
It's been more than 4 years since the Imperial Sugar explosion in
Georgia. That explosion killed 13 workers. It caused hundreds of
millions of dollars in damage. The tragedy was the result of unchecked
accumulation of sugar dust that ignited and caused a chain of
explosions, and Port Wentworth sugar refinery was leveled.
These workplace explosions have not stopped. There have been 23 major
combustible dust fires or explosions that have killed 15 and injured 35
since that Imperial Sugar explosion in Georgia.
The response of OSHA has been to begin the development of a rule to
reduce the risk of combustible dust explosions. That rule should be
allowed to go forward, and this bill threatens the opportunity of that
bill to go forward.
I reserve the balance of my time.

{time} 2030

Mr. LANKFORD. I rise in opposition to the amendment.
The Acting CHAIR. The gentleman from Oklahoma is recognized for 5
minutes.
Mr. LANKFORD. While I can certainly, certainly empathize and have
tremendous compassion for the families involved and for the individuals
involved in this, OSHA has been working through this rule since 2009.
It has been in the advanced rulemaking phase for a very long time. The
struggle they have is this large one-size-fits-all approach. Even under
the passage of this particular bill, OSHA has some great options.
Option No. 1 for them: to narrow their rulemaking. They're doing a
large one-size-fits-all to try to cover all types of dust, all types of
factories, all types of places. If they were to narrow their rule to
specific types of places, they would be well under the $100 million
limit.
The second rule they have is very clear: that this bill, itself,
already sets in an exemption for health and safety. Clearly, this would
be within those guidelines of health and safety. The President could do
an executive order and pass that and then allow them to move forward,
or he could come back to Congress.
The thought that only the folks at OSHA are compassionate about
issues like this fails even the most modest of tests. Obviously, people
who are within Congress are also compassionate to the needs here. If a
regulation comes that deals with a problem in a commonsense manner that
can function, certainly Congress would be able to approve that, and
certainly a President is going to have tremendous compassion for the
health and safety of individuals if they're able to come up with a
regulation that clearly deals with this.
So, while I have tremendous compassion for these families and look
forward to OSHA's completing what they have been stalling on for 3
years, this bill already deals with this, and this exception is not
needed in addition to this.
I reserve the balance of my time.
Mr. GEORGE MILLER of California. So, as for these workers who work in
these dangerous conditions around all kinds of dust that explode on a
moment's notice--without any notice, in fact--they should rely on the
idea that we would all be compassionate here.
The subcommittee that reported this legislation asked people in the
industry, and they immediately targeted this standard.
This won't be about the compassion of Members of Congress. This will
be about the interests and the lobbying by the special interests to
keep this dust standard from going into effect. It will not meet the
requirement of imminent danger because it happens all the time. We have
about 18 of these a year. It happens all the time. People are killed
all of the time in different settings and with different dust. This
isn't about one size fits all. This is about dust that explodes and
kills people and burns them to death on the job. It destroys the
workplace, and in some cases it's never rebuilt and the jobs are never
brought back. In other cases, as in one of these cases, the employer is
now saying, Give us this dust standard. Give us this dust standard.
The workers in this country have a right to rely on the law to
protect them, not on some notion of this committee or of this Congress'
sense of compassion and of whether it will be invoked on that given day
or not against the lobbying efforts by these industries.
It's about the law that protects workers and their families--workers
who get up and go to work every day, whose families hope they get to
come home at night, but it doesn't happen for a lot of workers. In
these industries with combustible dust, it happens over and over and
over again. They get killed on the job. I've been here a long time
working on combustible dust. Let me tell you, the industry doesn't say,
Ah, gee, we've killed enough people. Let's all just kind of hold hands
and see if we can come up with something.
It's complicated. You must do it right. It's based upon science. It's
based upon research so that you can isolate the dust so the explosions
don't happen.
But this legislation suggested by the committee notices in the
committee that this is one of the regulations that they would target.
They can use the old conundrum ``one size fits all.'' Do you know what?
If you're working around combustible dust, you want the dust that you
have taken care of. So maybe we can whittle it down. We'll take care of
some of the dust but not all of the dust because we can get under the
$100 million rule.
What are you talking about? These are the lives of the American
people. These are the lives of working people. This is an interesting
notion you have.

[[Page H5276]]

It just doesn't fit in the workplace. It just doesn't fit in the daily
lives of these people who are threatened by these horrible, horrible,
horrific incidents that take place usually through no fault of the
workers. Other decisions were made about not keeping the plant clean.
Other decisions were made about not installing equipment that could
mitigate this under the old standards.
That's the reason we need the law, the reason the workers in this
country need the law--not some expression of compassion late at night
in an empty Chamber of Congress. Tell them to rely on that, that one
night in an empty Chamber of Congress the proponent of the legislation
said, We'll be compassionate when this comes to the floor. We
understand this. We'll grant you a waiver. We'll figure it out.
The ACTING CHAIR. The time of the gentleman has expired.
Mr. GEORGE MILLER of California. * * *
The ACTING CHAIR. The time of the gentleman has expired.
The gentleman from Oklahoma is recognized.
Mr. LANKFORD. How unfortunate to have the implication that Members of
Congress, including myself--I have workers in my district who live with
this same thing--would not have compassion for people in our districts.
OSHA has not completed this regulation. They have delayed this. They've
had multiple options. They need to complete their work. There is a work
safety issue that's here.
As it is currently, the bill stands up strong for worker safety. It
allows any exception for worker safety currently in this bill. So,
while exceptions are pursued to add additional things into this bill,
the bill, itself, already contains those things.
With that, I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from California (Mr. George Miller).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Mr. GEORGE MILLER of California. Madam Chair, I demand a recorded
vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from California
will be postponed.

Amendment No. 16 Offered by Ms. Woolsey

The Acting CHAIR. It is now in order to consider amendment No. 16
printed in part B of House Report 112-616.
Ms. WOOLSEY. Madam Chair, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:

Page 8, line 10, insert after the period the following:
``Such term does not include a rule that would prevent or
reduce the number of workers suffering electrocutions or
other fatalities associated with working on high voltage
transmission and distribution lines.''.
Page 10, after line 13, insert the following:
(c) Additional Exception.--Section 202 shall not apply to a
rule that would prevent or reduce the number of workers
suffering electrocutions or other fatalities associated with
working on high voltage transmission and distribution lines.
Page 10, line 14, strike ``(c)'' and insert ``(d)''.

The Acting CHAIR. Pursuant to House Resolution 738, the gentlewoman
from California (Ms. Woolsey) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentlewoman from California.
Ms. WOOLSEY. Madam Chair, I rise today to offer an amendment to
titles I and II of H.R. 4078.
My amendment would exempt a proposed worker safety rule from the
``regulatory freeze'' and the prohibition on so-called ``midnight
rules.'' This OSHA rule would update 40-year-old protections for those
working around high-voltage transmission and distribution lines and
equipment, which would bring them into the 21st century. If this
amendment is not adopted, Madam Chair, many workers will be needlessly
electrocuted or burned from electrical hazards--at least until
unemployment drops to 6 percent.
Are we really going to make workers wait until the jobless rate is 6
percent before getting protections for workers against burns from high-
voltage electric arcs that run as hot as 35,000 degrees? If we are,
they will be waiting a long time, because this Republican majority
shows absolutely no interest in passing a jobs bill.
Is it fair, Madam Chair, to make these workers wait for 6 percent
unemployment before their employers have to assess and provide safe
minimum distances from high-voltage lines? Is it morally defensible to
make workers wait for a full economic recovery before they get simple
protections like rubber-insulated sleeves so that their arms aren't
blown apart from having contact with high-voltage wires?
Certainly not.
Unless the bill sponsor is aware of some new scientific discovery,
35,000 degrees feels just as hot no matter how many Americans are out
of work. Shock at 14,000 volts of electricity does the same damage
whether unemployment is 8 percent or 6 percent. Yet this bill seems to
assume lethal hazards are somehow less lethal during tougher economic
times. Even worse, this bill implies that preventable electrocutions
are somehow acceptable whenever unemployment is high.

{time} 2040

This is irresponsible, if not unethical.
With that, I reserve the balance of my time.
Mr. LANKFORD. I rise in opposition to the amendment.
The Acting CHAIR. The gentleman from Oklahoma is recognized for 5
minutes.
Mr. LANKFORD. I thank my colleague for bringing this up, but this
again is something that is obviously dealt with already in the text of
the bill. As we anticipated, there would be issues like this. On page
3, line 23 of the bill, it actually states the President has the
ability, by executive order, in dealing with any significant regulatory
action to go ahead and waive this, if it's necessary, because of an
imminent threat to health or safety or other emergency.
This is already dealt with in the bill itself. While we do need to be
able to deal with this, and obviously the vast majority of electricity
providers are very attentive to their workers, including the companies
that are in my district, and take great pride in how they care for the
health and safety of the workers that are on those lines and that are
out there in very dangerous situations, it is a very important thing to
them. We have the ability already within this bill to be able to
address that. For that reason, I would oppose this.
With that, I reserve the balance of my time.
Ms. WOOLSEY. Madam Chair, each year, 74 electrical workers covered
under this rule are killed on the job. Another 444 are severely
injured. OSHA is authorized to regulate a hazard when the risk of
fatality is more than 1 in a 1,000. The fatality rate for workers
covered under this OSHA rule is 14 times that level. Full compliance
would eliminate 79 percent of these fatalities and injuries.
Madam Chair, the one-size-fits-all approach of this bill will block a
commonsense, cost-effective rule that produces an estimated $4 in
benefits for every dollar in cost. OSHA's proposed update would provide
an estimated $100 million in savings every single year.
While the authors of this bill argue that the President can seek a
waiver from Congress to allow the rule, I'm not buying it. As we saw
with the so-called ``comma bill'' proposed by Mr. Sensenbrenner a
number of years ago, it took three sessions of Congress just to fix a
harmless typo. We all know that when a special interest wants to stop
something around here, there are countless ways to win. If this bill is
not amended, Madam Chair, Congress will be sentencing scores of workers
every year to preventible electrocutions and to burns.
I ask for adoption of this amendment, and I reserve the balance of my
time.
Mr. LANKFORD. Madam Chair, one quick statement.
This particular rule is unique in a lot of our conversation because
it's already gone through the process. Currently, the OIRA office has,
in fact, had it for the last 30 days. They could issue this at any
point. This is right at that point that it's going to be released. It
wouldn't even fall underneath this bill. Obviously, we pass this bill
tonight, we send it over to the Senate, it works

[[Page H5277]]

through the process. OIRA can release this at any point that they
choose to.
While I again have tremendous compassion for the workers that are on
the lines, and I have tremendous respect for electric companies around
the country and how they take care of their workers, this particular
rule has already gone through the process, it already sits in OIRA, and
it would not apply to them. With that and also with the knowledge that
we have the exceptionary built in for safety, I would choose to oppose
this and continue to do that.
With that, I yield back the balance of my time.
Ms. WOOLSEY. Madam Chair, the gentleman from the other side of the
aisle is not correct on this. If the President signed the bill, the
regulation would be stopped.
In closing, Madam Chair, the adoption of my amendment will save the
lives of Americans who work in some of the most dangerous conditions
imaginable. It is ridiculous and it's downright cruel to tell these men
and women who risk electrocution everyday that OSHA will only step in
to help them when the jobless rate reaches some arbitrary level.
Whether unemployment is 6 or 8 or 10 percent, whether the economy is
strong or weak, we need to protect our workers.
I ask for Members to support my amendment, and I yield back the
balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentlewoman from California (Ms. Woolsey).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Ms. WOOLSEY. Madam Chair, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentlewoman from California
will be postponed.

Amendment No. 18 Offered by Ms. Waters

The Acting CHAIR. It is now in order to consider amendment No. 18
printed in part B of House Report 112-616.
Ms. WATERS. I have an amendment at the desk that is made in order
under the rule.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:

Page 67, line 24, strike ``shall--'' and insert ``shall,
subject to appropriations made specifically for such purpose
pursuant to paragraph (7)--''.
Page 69, line 3, insert ``, subject to appropriations made
specifically for such purpose pursuant to paragraph (7),''
after ``shall''.
Page 71, line 7, insert ``, subject to appropriations made
specifically for such purpose pursuant to paragraph (7),''
after ``shall''.
Page 75, line 22, strike the close quotation mark and
following period and after such line insert the following:
``(7) Authorization of appropriations.--
``(A) In general.--There is authorized to be appropriated
to carry out this subsection such sums as may be necessary
for fiscal year 2013.
``(B) Covered expenses.--Funds appropriated pursuant to
this paragraph shall be for any costs incurred by the
Commission in carrying out the requirements of this
subsection, including any costs of litigation related to the
requirements of this subsection.''.
Page 77, line 4, strike ``shall'' and insert ``shall,
subject to appropriations made specifically for such purpose
pursuant to paragraph (3),''.
Page 77, line 15, insert ``, subject to appropriations made
specifically for such purpose pursuant to paragraph (3),''
after ``shall''.
Page 78, line 22, strike the close quotation mark and
following period and after such line insert the following:
``(3) Authorization of appropriations.--
``(A) In general.--There is authorized to be appropriated
to carry out this subsection such sums as may be necessary
for fiscal year 2013.
``(B) Covered expenses.--Funds appropriated pursuant to
this paragraph shall be for any costs incurred by the
Commission in carrying out the requirements of this
subsection, including any costs of litigation related to the
requirements of this subsection.''.

The Acting CHAIR. Pursuant to House Resolution 738, the gentlewoman
from California (Ms. Waters) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentlewoman from California.
Ms. WATERS. Madam Chair, my amendment authorizes such appropriations
as may be necessary to allow our financial regulators to carry out the
activities required under title VI and VII of this legislation. The
purpose of the amendment is that if we're having our regulators
undertake new and perhaps even duplicative economic analysis functions,
we should provide them with the resources to do so.
Madam Chairman, we know that the majority has tried to shortchange
our Federal regulators in terms of appropriations, particularly when we
contrast their funding with the new responsibility entrusted to them
after the financial crisis. Let's consider the SEC, one of the cops on
the beat for Wall Street.
This agency is tasked with enforcing our securities laws. They
protect investors and make sure firms are held to account when they
create toxic financial instruments. The fiscal year 2013 Republican
budget proposal calls for funding the SEC at almost $200 million less
than what the President has requested and what the Senate
Appropriations Committee has provided in their funding bill. This is
just another part of an onslaught of cuts to the SEC's budget that
Republicans have proposed and that we've been fighting against over the
last few years.
The SEC's funding has been erratic. After significant increases in
the early half of the decade, the agency was forced to reduce staff.
During this period of inconsistent funding, trading volume more than
doubled. Since 2003, the number of investment advisers has grown by
roughly 50 percent and funds that they manage have increased nearly 55
percent. The SEC's 3,800 employees currently oversee approximately
35,000 entities, including thousands of investment advisers, mutual
funds, broker/dealers, and public companies.
With all this responsibility, my colleagues on the other side of the
aisle want to spread the commission even thinner with new duplicative
cost-benefit requirements that open the agency up to constant
litigation, and they want to do this while at the same time refusing to
devote additional resources to the agency. The result is that the SEC
would be forced to divert resources away from other key functions of
the commission, including, perhaps, prosecuting wrongdoers who violate
our security laws.
Madam Chair, I reserve the balance of my time.

{time} 2050

Mr. SCHWEIKERT. Madam Chairman, I rise in opposition to the
amendment.
The SPEAKER pro tempore. The gentleman from Arizona is recognized for
5 minutes.
Mr. SCHWEIKERT. And to my friend from California, she has always been
a passionate and very articulate in the battle for resources for the
regulators.
But I'm going to stand here in opposition to this amendment for a
couple of very simple reasons. One, this is already the job they're
supposed to be doing with the money they have, this cost-benefit
analysis. And we can talk about that further.
But also, as you work through the amendment, I have great concern for
the law of unintended consequences, and that is, in a weird way,
subsidizing and incentivizing bad cost-benefit analysis. In the
amendment, it basically says, if you end up in litigation over your
cost-benefit analysis, there should be an appropriation, an unspecified
amount of money that the appropriators should send you for that
litigation. So if you do a really bad job in your cost-benefit analysis
and you get sued, you actually get more money that is supposed to be
appropriated to you.
The sort of constant thing I focus on a lot is that law of unintended
consequences of, does it actually create an incentive to draw down more
cash for the agency, for the litigation? And the way you get to the
litigation is the quality of the work that was done in the cost-benefit
analysis.
So there are two primary issues: A, this is what the agencies are
supposed to be doing; and B, in the design of the amendment, I actually
have a concern that ultimately, it may incentivize the very thing we're
trying to stop.
And with that, Madam Chairwoman, I reserve the balance of my time.
Ms. WATERS. Madam Chair, my amendment also addresses title VII of the
bill, which relates to the Commodity Futures Trading Commission. The
CFTC is the cop on the beat that

[[Page H5278]]

we tasked to regulate much of the derivatives market under the Wall
Street Reform Act. And the CFTC is the agency that cracked down on
Barclays when they manipulated a key interest rate benchmark, the
Libor, in order to benefit their derivatives trade.
This bill also imposes new cost-benefit requirements on the CFTC.
While the requirements on this agency aren't as onerous as the ones
imposed on the SEC, I think it is inappropriate to spread the CFTC any
thinner when Republicans have proposed to cut the CFTC's funding by 12
percent relative to last year and 40 percent relative to what the
Senate provided.
As CFTC Chairman Gary Gensler said last month, the result of proposed
House funding cuts ``is to effectively put the interests of Wall Street
ahead of those of the American public by significantly underfunding the
agency Congress tasked to oversee derivatives--the same complex
financial instruments that helped contribute to the most significant
economic downturn since the Great Depression.''
Finally, I disagree with the claim that more cost-benefit analyses
can solve every regulatory question we face. In fact, I think that
these economic analyses often offer a false sense of precision and fail
to capture things that aren't easily quantifiable, things like avoiding
the next financial crisis and protecting overall market integrity.
I would urge my colleagues to support my amendment, which makes
compliance with the new requirements under the underlying bill
contingent on them receiving sufficient appropriations to carry out
these functions.
I reserve the balance of my time.
Mr. SCHWEIKERT. My two arguments still stand. But there is one other
point. And I actually have a little bit of information here.
According to the inspector general of the CFTC, the commission
regularly employs a ``stripped down'' type of cost-benefit analysis
that has ``proved perilous for financial market regulators.'' In the
past, they've used a stripped-down methodology.
So in many ways, what we're doing here in the overall legislation is
saying, here's the box, you are supposed to be doing this, it's already
part of your budget. And as I spoke earlier, in the design of the
amendment, I have a fear of the unintended consequences that you are
almost incentivizing; that when the litigation happens, the agency
actually ends up getting more money.
And with that, Madam Chairwoman, I yield back the balance of my time.
Ms. WATERS. In closing, this bill adds duplicative new rules. SEC is
already held to account on cost-benefit analysis. Proxy access was
overturned. The bill opened CFTC up to new industry lawsuits.
I would ask for an ``aye'' vote on my amendment.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentlewoman from California (Ms. Waters).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Ms. WATERS. Madam Chair, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentlewoman from California
will be postponed.

Amendment No. 19 Offered by Mr. Fitzpatrick

The Acting CHAIR. It is now in order to consider amendment No. 19
printed in part B of House Report 112-616.
Mr. FITZPATRICK. Madam Chair, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:

Page 71, line 12, add at the end the following: ``In
reviewing any regulation (including, notwithstanding
paragraph (6), a regulation issued in accordance with formal
rulemaking provisions) that subjects issuers with a public
float of $250,000,000 or less to the attestation and
reporting requirements of section 404(b) of the Sarbanes-
Oxley Act of 2002 (15 U.S.C. 7262(b)), the Commission shall
specifically take into account the large burden of such
regulation when compared to the benefit of such
regulation.''.

The Acting CHAIR. Pursuant to House Resolution 738, the gentleman
from Pennsylvania (Mr. Fitzpatrick) and a Member opposed each will
control 5 minutes.
The Chair recognizes the gentleman from Pennsylvania.
Mr. FITZPATRICK. Madam Chair, the amendment I'm offering tonight
would require the SEC, when reviewing regulations, to consider the
burden of applying section 404(b) of Sarbanes Oxley to companies with a
public float of less than $250 million. Simply put, this amendment
requires regulators to consider the cost of a specific regulation which
hinders job creation in my district and across the Nation.
Section 404(b) requires audits of a public company's internal
controls. While this sounds innocuous, the cost of external audits can
be staggering. Those costs are exponentially more burdensome on smaller
companies. Currently, the law extends the auditing requirement to any
company with a public float of $75 million or more, and that number has
been widely criticized as too low and adds an extremely costly burden
on small and growing companies.
Recognizing that burden on emerging growth companies, the House
overwhelmingly passed, as part of the JOBS Act, an exemption from
404(b) for companies with up to $1 billion in revenue for 5 years after
their initial public offering.
This amendment would merely require the SEC to consider the burden of
section 404(b) when reviewing their regulations and would not change
current law. This amendment would apply to all companies and would not
discriminate based on when a company issued their IPO.
Congress and the SEC have appropriately recognized that all companies
are not the same, and smaller companies should be exempt from certain
regulations. This amendment asks that the SEC consider these costs on
smaller companies.
If companies are priced out of being able to go public, it restricts
capital formation and job creation. For those companies that still
choose to go public, resources that could otherwise be used to hire and
grow are being sucked away by unproductive compliance costs.
Madam Chair, Synergy Pharmaceuticals is a New York-based company that
does their entire R&D in Doylestown Borough in my district. They have
10 employees in their Doylestown research facility and 10 employees in
New York. These are good-paying jobs, but by most definitions, this is
a small company. In fact, their market capitalization exceeds even the
increased threshold of $250 million that this bill references, which is
why some have advocated exempting companies with a public float as high
as $500 million or $1 billion.
I reached out to their chief scientific officer and their chief
financial officer to discuss this issue with them, and their comments
were very instructive. I heard that 404(b) was one of the most
significant regulatory burdens they face. In their words, ``It hurts.''
It was not the direct costs of external audits or the person they had
to hire internally to deal with these requirements but the time that
was spent and the efforts that were wasted. According to them, hours
and even days worth of time was spent finding ways to document and
justify their procedures for something as menial as where the checkbook
was kept.
What would they do with the extra money if they didn't have to spend
it on compliance? The answer I got was that there is no question it
would go directly into research and development.
I ask my colleagues, where is this money more productively used: in
documenting how the checkbook is stored at night or hiring research
assistants in communities like Doylestown and in New York?
Madam Chairman, entrepreneurial companies like Synergy are those we
are counting on to create wealth and jobs and restore America's vibrant
economy. Their story is not unique, particularly in industries like
biotechnology. This Congress recognized the importance of decreasing
the regulatory burden on small and emerging companies in a strong
bipartisan manner just a few months ago with the JOBS Act. This
amendment is an extension of that effort, and I encourage my colleagues
to support it.
I reserve the balance of my time.

[[Page H5279]]

Mr. FRANK of Massachusetts. I rise in opposition, Madam Chair.
The Acting CHAIR. The gentleman is recognized for 5 minutes.

{time} 2100

Mr. FRANK of Massachusetts. Madam Chair, I yield myself 3 minutes.
This is an effort to exempt companies under $250 million. Now the
JOBS Act, which was recently passed with broad support, said that a
start-up company for its first 5 years would be exempt from this. This
now would do away with that 5-year restriction without having had the
kind of committee consideration that it seems to me it ought to have.
It does it in this way, and I differ with my colleague from
Pennsylvania when he says that it doesn't change the law. If it didn't
change the law, they wouldn't offer it. He's not up here at 9 p.m. just
to get exercise. It changes the law in a very significant way and sets
a very bad precedent.
The underlying legislation to which this would be an amendment
requires a cost-benefit analysis. This cooks the books. This is not
content to let it be an unbiased cost-benefit analysis; but it says, it
instructs the SEC to take into account the heavy burdens--and let me
get the exact words--the large burden of such regulation. In other
words, it's an effort to tip the scales of the very cost-benefit
analysis.
And we know that, by the way, as to intent because the original
version of this amendment was just a straight exemption of 250. But for
parliamentary reasons, because that's not this committee's
jurisdiction, it had to be redone. So if the gentleman really wanted to
just exempt everybody under 250 from Sarbanes Oxley forever, as opposed
to a 5-year exemption for a start-up, he had to amend it.
So he amended it in a way, as I said, that unfortunately impugns the
integrity of the cost-benefit analysis because it puts a thumb on the
scales. It says, oh, the cost-benefit analysis here should take into
account the large burden. Well, it is already supposed to do it. Adding
this is an instruction to the SEC essentially to find that they should
be exempt.
We have had a rash of Chinese companies buying small American
companies and converting them and people investing in them and getting
taken. And the problem is that Chinese accounting is very opaque. What
this bill would do is to prevent the United States authorities from
applying Sarbanes Oxley to protect those investors.
I don't doubt that there is a very good company--I agree there is a
very good company in his district, although he says it is above the
limit. But you can't legislate for just one good company. This is part
of this nostalgia for a time when we had no regulation.
Sarbanes Oxley has improved the integrity of our capital markets. It
has improved the confidence of investors. We did exempt small start-
ups, so for the first 5 years as a start-up, up to $250 million, they
didn't have to do this. This says, in effect, by instructing the SEC to
find that the cost outweighs the benefit no matter what, this gives a
permanent exemption de facto for companies up to 250, which would
include people who might be scamming, in the case of the Chinese
companies. And as I said, it sets a bad precedent.
If we are going to have cost-benefit analysis, and I think that can
be overdone, let's have it in an honest and open way. Let's not put the
thumb in the scales, as this does, by instructing the SEC, in effect,
to find that the cost always outweighs it.
I reserve the balance of my time.
Mr. FITZPATRICK. Madam Chair, I yield the balance of my time to the
gentleman from Tennessee (Mr. Fincher).
Mr. FINCHER. Madam Chair, I rise in strong support of Mr.
Fitzpatrick's amendment.
Madam Chair, unemployed Americans are crying out for more jobs,
urging Congress to review rules and regulations that stifle innovation,
economic growth, and job creation. Overly burdensome regulations are
hurting business expansion, which is why we are debating this bill this
evening. Overly burdensome regulations is also why I introduced H.R.
3213, the Small Company Job Growth and Regulatory Relief Act, to expand
Sarbanes Oxley 404(b) exemptions for companies with a public float of
less than $350 million.
Supporters of increasing the current $75 million exemptions from
Sarbanes Oxley 404(b) for small companies would save duplicative audit
costs, which hinder many companies from going public. Going public
provides opportunities for companies to raise needed capital in order
to expand, reinvest, and create jobs.
Providing a permanent exemption for Sarbanes Oxley for companies with
a public float of $250 million or less just makes good sense. I
strongly encourage my colleagues to support this amendment.
Mr. FRANK of Massachusetts. I guess I am in a position of being
disagreeable to some of my friends on the committee. The gentleman from
Tennessee cited the company that's about to go public, but they're
already exempted.
The jobs bill that we passed and was signed into law exempts start-
ups for the first 5 years until they go public, so this has no
relevance to the start-ups.
It has relevance to companies that have been in existence for more
than 5 years as public companies. Again, we have got an exemption
already for the first 5 years. And it says, in effect, don't give us
this unbiased cost-benefit analysis. We'll tell you what cost-benefit
analysis does.
And as to IPOs, I will insert into the Record an article by Mr.
Davidoff in the The New York Times talking about the advantages we have
in IPOs these days; how the soccer team from England came here to do an
IPO because our corporate governance laws are more favorable to them in
allowing different classes of stock.
I'm sorry to see this continuing repudiation of the legacy of George
W. Bush. I know he's not going to come to the convention. But, gee,
everything's being torn down. George Bush signed Sarbanes Oxley. Oxley,
by the way, is Mike Oxley, my predecessor as chairman of our committee.
George Bush was very proud of Sarbanes Oxley. It's an accounting
requirement, and what this does is to take another chunk out of that
regulation.
Now, maybe we hear different people. My friends say the American
people are crying out for an end of regulation. Every indication I have
of public opinion is that people are tired of irresponsibility by a
few, not everybody, but they are tired of people being scammed. And, in
fact, the notion that what we need in the financial area is less
regulation is an odd one. It comes from people, I guess, who just slept
through the last few years, didn't see the crisis we had because
Sarbanes Oxley, of course, itself came about after Enron.
So I would align myself with President Bush. I think he got this one
right. I think Mike Oxley got this one right. Yes, for start-ups and
for people about to go public, they have a $250 million exemption. But
to give a permanent exemption to companies at $250 million and above is
a mistake. And don't, please, start monkeying with cost-benefit
analysis.
I yield back the balance of my time.

[From the New York Times, July 10, 2012]

In Manchester United's I.P.O., a Preference for American Rules

(By Steven M. Davidoff)

Manchester United, the English soccer team with an adoring
fan base in Europe and Asia, is filing to go public in the
United States.
But the initial public offering is not a reflection of
Americans' increasing love of soccer. Instead, it is a
reflection of American regulators' light touch.
I'm not kidding. The United States, which has long been
criticized for its harsh rules surrounding I.P.O.'s, is now
the place where foreign companies go to avoid regulation.
Manchester United may be the world's most popular soccer
club, with 659 million fans according to the team's own
estimates. In 2005, the American businessman Malcolm Glazer
and his family bought control of the team, loading it up with
hundreds of millions of dollars in debt. Now, the company is
selling shares to raise money and reduce its debt, which
stands at about $655 million.
But the Glazers do not want to give up voting control
since, among other reasons, Manchester United fans appear
eager to buy back the team from the still-unpopular family.
In 2010, a prominent group of Manchester United fans were
said to have tried to form a consortium to repurchase the
club. The Glazers have uniformly given the same response: the
team is not for sale. Now, the Glazers are venue-shopping for
their stock.
They passed over the Hong Kong Stock Exchange because it
would not give the team a waiver to allow two classes of
shares, with different voting rights. The London Stock
Exchange also does not allow such share structures, perhaps
the reason this natural home was skipped over by the Glazers.

[[Page H5280]]

Manchester United declined to comment for this article.
The Singapore Exchange seemed more amenable to the Glazers'
plan to list Manchester United and keep control through a
dual-class structure. But after the exchange delayed final
signoff on the dual-class shares and the Asian markets
cooled, the Singapore plans were derailed, according to an
article in Reuters.
The soccer team has recently found a home for its stock in
the United States. Manchester United filed the papers this
month for its initial public offering on the New York Stock
Exchange, and the Glazers are taking advantage of the
country's willingness to be more flexible when it comes to
shareholder rights. Manchester United is proposing a
corporate structure that would give the Glazers shares with
10 votes apiece. Public investors would receive one vote for
each share.
While the Securities and Exchange Commission tried to ban
this type of dual-class voting stock in the 1980s, a federal
appeals court struck down the rules. Since then, the
structure has become increasingly common. Facebook, LinkedIn
and Google all have dual-class shares. The New York Times
also has a dual-class voting structure. In 2011, 28 offerings
featured dual-class structures that gave greater voting
rights to certain shareholders, according to the research
firm Dealogic.
The Manchester United offering is a case study in how the
American markets have evolved toward deregulation in the past
decade.
The company is a beneficiary of the newly enacted Jumpstart
Our Business Start-Ups Act, known as the JOBS Act, designed
to help private companies raise capital and go public.
Although the team was founded in 1878, the JOBS Act
classifies Manchester United as an emerging growth company
since it has less than $1 billion in revenue. As such, the
company, which is incorporated in the Cayman Islands, does
not face the same hurdles as American businesses.
The JOBS Act builds on earlier efforts by the S.E.C. to
loosen the rules governing I.P.O.'s of foreign companies.
Under pressure from stock exchanges and other market players,
the agency has exempted foreign issuers like Manchester
United from large parts of American securities laws.
Manchester United will not need to file quarterly reports,
report material events, file proxy statements or disclose
extensive compensation information, all of which American
companies must do. Under a different S.E.C. rule adopted in
2008, Manchester United also does not need to report
financials under the generally accepted accounting principles
used in the United States, but can instead rely on
international financial reporting standards.
Because Manchester United will be a controlled company, it
does not need to follow the New York Stock Exchange rules
adopted in 2003 that require a public company to have a board
composed mainly of independent directors. The board of
Manchester United will have four directors, two of Malcolm
Glazer's sons and two executives of the company.
The legal environment, which investment bankers and lawyers
have long argued deterred I.P.O.'s, also appears to be more
conducive. This may be because securities litigation reforms
put in place by Congress and the Supreme Court have meant
fewer cases in recent years. Even after the financial crisis,
only 16 companies on the Standard & Poor's 500 were subject
to this type of litigation in 2011, the lowest number since
2000, according to the Stanford Securities Class Action
Clearinghouse.
It's all a bit unsettling.
After the enactment of the Sarbanes-Oxley Act in 2002,
critics claimed that the new regulation was driving away
foreign companies, although at least one academic study
rebutted this claim. But as regulators have slowly loosened
the rules, the American markets are attracting foreign
issuers seeking watered-down rules.
This does not mean that this deregulation is wrongheaded.
The JOBS Act and other initiatives may not have been
designed to attract the likes of Manchester United, but such
I.P.O.'s do provide work for investment bankers, lawyers and
the exchanges. They also build up American prestige by
bringing well-known foreign companies to the United States.
At the same time, the deregulation effort means lower
compliance costs for businesses. Presumably, that extra money
can be invested, bolstering the economy.
The question is whether deregulation is worth the price.
I have little sympathy for investors who buy Manchester
United shares. The risks are mainly disclosed.
The bigger question is whether lowering the bar for foreign
issuers will come back to haunt the American markets.
Even before the JOBS Act, Chinese companies took advantage
of new S.E.C. rules and started going public en masse in the
United States. While some of the I.P.O.'s have worked out,
there are now more than 100 newly public Chinese companies
facing accusations of fraud by either investors or
regulators.
The risk is that American exchanges will become more like
London's Alternative Investment Market, a lightly regulated
stock exchange that has fostered some spectacular flops. If
so, investors may lose faith in American markets, and the
United States may end up sacrificing long-term stature for
short-term gain.
Either way, the next time someone calls the American
markets overregulated, you might want to point them to the
Manchester United I.P.O.--and remind them that the English
soccer club came to the United States to avoid more
burdensome foreign rules.
This post has been revised to reflect the following
correction:
Correction: July 12, 2012.
The Deal Professor column on Wednesday, about the soccer
team Manchester United's public offering in the United
States, misstated the year that the Sarbanes-Oxley Act was
enacted. It was 2002, not 2001.

The Acting CHAIR. The question is on the amendment offered by the
gentleman from Pennsylvania (Mr. Fitzpatrick).
The question was taken; and the Acting Chair announced that the ayes
appeared to have it.
Mr. FRANK of Massachusetts. Madam Chair, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Pennsylvania
will be postponed.

Amendment No. 20 Offered by Mr. Posey

The Acting CHAIR. It is now in order to consider amendment No. 20
printed in part B of House Report 112-616.
Mr. POSEY. Madam Chair, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:

Add at the end of title VI the following (and conform the
table of contents accordingly):

SEC. 604. INTERPRETIVE GUIDANCE NULL AND VOID.

Notwithstanding any other provision of law, no interpretive
guidance issued by the Securities and Exchange Commission on
or after the effective date of this Act relating to
``Commission Guidance Regarding Disclosure Related to Climate
Change'', affecting parts 211, 231, and 249 of title 17, Code
of Federal Regulations (as described in Commission Release
Nos. 33-9106; 34-61469; FR-82), or any successor thereto, may
take effect, and such guidance shall have no force or effect
with respect to any person on or after February 2, 2010.

SEC. 605. OTHER SEC ACTION PROHIBITED.

(a) Further Guidance Related to Climate Change.--The
Commission may not issue any interpretive guidance with
respect to disclosures related to climate change on or after
the effective date of this Act.
(b) Voluntary Submissions.--The Commission may not issue
any interpretive guidance that would establish any
requirements with respect to the content of or format for any
disclosures related to climate change voluntarily submitted
by any entity to the Commission on or after the effective
date of this Act.
(c) Civil and Administrative Actions.--No civil or
administrative action or proceeding pertaining to disclosures
related to climate change may be initiated by the Commission
on or after the date of the enactment of this Act and any
such actions or proceedings pending on such date shall be
terminated.
(d) Rule of Construction.--Nothing in this section shall be
construed as to--
(1) prohibit the Commission from issuing interpretive
guidance with respect to disclosures related to non-
anthropogenic or natural climate variability observed over
comparable time periods; or
(2) terminate an administrative action or proceeding
pertaining to such disclosures.

The Acting CHAIR. Pursuant to House Resolution 738, the gentleman
from Florida (Mr. Posey) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Florida.
Mr. POSEY. Madam Chair, I yield myself such time as I may consume.
Madam Chair, my amendment stops the Securities and Exchange
Commission from pursuing an agenda on climate change and keeps its
focus, instead, on its core mission of protecting investors.
In recent years, we've seen the Madoff and Stanford Ponzi schemes
bilk people out of over $70 billion. Many of these victims live in our
districts. They are shocked and outraged that such a travesty could
happen.
One would think that after such embarrassments, the SEC would do
whatever it could to focus its finite resources on stopping the next
Ponzi scheme. At the very minimum, it would make sense for the SEC to
appear to get serious in safeguarding the public from fraud and
corruption.
However, early in 2010, the SEC issued an interpretative guidance for
companies to disclose the impact global climate change might have on
their businesses. The SEC published this controversial guidance over
the objections of dissenting commissioners. This

[[Page H5281]]

was done without direction from Congress and outside the traditional
rulemaking process.
There are no laws in the United States explicitly addressing climate
change. The guidance is inappropriate considering the SEC has bigger
priorities.
I don't have to tell my colleagues that climate change is a
controversial and an unresolved issue. From a securities perspective
especially, climate change information on a disclosure is highly
speculative, and dubious at best. If allowed to proceed, it invites all
kinds of compliance costs and confusion down the road. And guess who
will ultimately pay all those costs? Our constituents, the American
public.

{time} 2110

Importantly, my amendment does not stop companies from mentioning
bona fide weather and environmental risks in disclosures. And if a
company really wants to weigh in climate change for some reason,
they're free to volunteer that information. It just keeps the SEC
focused on what they're supposed to be doing, and that is protecting
people and not forcing unrelated agendas down their throats.
I urge my colleagues to support the amendment and reserve the balance
of my time.
Mr. CUMMINGS. Madam Chairman, I rise to claim time in opposition.
The Acting CHAIR. The gentleman from Maryland is recognized for 5
minutes.
Mr. CUMMINGS. I yield myself such time as I may consume.
Madam Chairman, Federal securities law requires financial disclosures
by public companies for the benefit of shareholders and investors. The
Securities and Exchange Commission provides detailed guidance on how to
interpret and comply with these disclosure requirements, which are
intended to ensure that potential investors fully understand a security
before they purchase it.
The SEC recently provided guidance on existing rules that require
companies to disclose the impact that business or legal developments
related to climate change could have on a company's bottom line. They
want investors to know about this.
These disclosures help investors understand how climate change
affects a company's operations and their potential investments in the
company. This amendment seeks to prevent this guidance from taking
place. It seeks to keep investors in the dark.
Rules discussed in the SEC's guidance are clearly needed, and the
SEC's guidance will help publicly traded companies understand how key
areas of climate change--such as new legislation or international
accords--could affect what they need to disclose to the public. This
guidance is also intended to help companies explain how the physical
impacts of climate change could affect their performance.
In issuing this guidance, the SEC did not opine on the science of
climate change. The guidance seeks to help companies assess the
possibility that events related to climate change may materially affect
their bottom lines and trigger public disclosure requirements. This
guidance is prudent and serves to benefit both the investor and the
company.
Ironically, with this amendment, my friends on the other side of the
aisle who proclaim the value of transparency are acting to hurt
investors by denying them important information. This amendment would
also harm Wall Street by preventing the SEC from issuing clear guidance
to help publicly traded firms understand what they need to disclose on
this topic to ensure full compliance with the law. It provides them
certainty.
So I urge my colleagues to oppose this amendment, and I reserve the
balance of my time.
Mr. POSEY. Madam Chair, how much time do I have remaining?
The Acting CHAIR. The gentleman from Florida has 3 minutes remaining.
Mr. POSEY. The gentleman's points about disclosure are on point. They
simply don't apply to what this amendment does. It does not deny
required disclosure of risks. Let me be clear, thousands and thousands
of American families were devastated by Madoff, by Stanford, MF Global
and the like. People lost their homes, people lost their cars, people
lost their children's education funds, and people lost their lifelong
retirement savings. I could go on and on forever, but we have a limited
amount of time.
The job of the SEC is to protect those people. The job of the SEC is
to protect honest people from dishonest corporations and persons. It's
not to impose other agendas on the American public. It's not to talk
about the environmental stewardship of corporations. If a corporation
dealing with securities does not disclose a significant environmental
risk, then they're going to be liable for that failure to disclose. But
it's not the SEC's job to talk about their stewardship.
The SEC knew for a decade--a decade--a full 10 years--over 10 years--
that Madoff was stealing from people; and they refused to take any
action for over a decade, and over $70 billion evaporated. People's
lives were devastated. People died. People died. There are dead people
because of what Madoff did. And the SEC didn't lift a finger. They were
too busy doing other things.
Now, here we intend to put SEC back on the job and focus on what
they're supposed to do: protect honest people from dishonest people.
I reserve the balance of my time.
Mr. CUMMINGS. When we had the SEC come before our committee, I made
it very clear that I thought more could have been done with regard to
Madoff, and I think it was extremely unfortunate what happened. But,
again, that does not mean that we shouldn't provide clarity over all
subjects which may affect investors. And that's what we're talking
about here.
I'm going to rely on my argument, but I'm going to also yield to my
good friend, Mr. Frank from Massachusetts.
Mr. FRANK of Massachusetts. I thank the gentleman for yielding.
The gentleman says the SEC wasn't on the Madoff thing for many years.
That's true. I have to say that, while I supported the Bush
administration on Sarbanes Oxley, I am critical of their administration
of the SEC. For almost all of that time, we had an SEC that was not
inclined to enforce. And I do not think the current SEC, under a very
good chairman, Mary Schapiro, with a much more vigorous approach ought
to be taxed for the failures that were ideologically driven by the
previous SEC.
So I don't think it is valid to say, well, because they didn't catch
Madoff--the SEC during the Bush administration reflected an unfortunate
philosophy of non-regulation, of ceding to the company more autonomy
than they should have, and it is not a good basis on which to legislate
going forward.
I thank the gentleman for yielding.
Mr. CUMMINGS. I reserve the balance of my time.
Mr. POSEY. Madam Chair, how much time do I have remaining?
The Acting CHAIR. The gentleman from Florida has 1 minute remaining.
Mr. POSEY. I have endured about all I care to, and I think a large
percentage of the people in this Chamber and a lot of people in this
country have endured about all the finger-pointing and blame that they
can endure. I don't care who shot John. I don't care who was in charge
of the SEC before. The point of this bill is to keep the SEC focused on
protecting investors.
I reserve the balance of my time.
Mr. CUMMINGS. Madam Chair, how much do I have remaining?
The Acting CHAIR. The gentleman from Maryland has 1 minute remaining.
Mr. CUMMINGS. I yield 30 seconds to the gentleman from Massachusetts.
Mr. FRANK of Massachusetts. First of all, a large percentage of the
people in this room would be too; but, secondly, the fact is that the
gentleman from Florida is who started pointing fingers. When I talked
about who was in charge of the SEC, all of a sudden he is above any
criticism. But he's the one who impugned the SEC. He's the one who said
that the SEC sat and did nothing under Madoff. So, if you're going to
accuse the agency, then it becomes relevant as to who was running it. I
didn't raise the issue of who was to blame and who was at fault. I was
simply responding to my committee colleague from Florida.
I thank the gentleman.
Mr. POSEY. Very poetic, but it's off point.

[[Page H5282]]

The amendment wants SEC to focus on protecting honest people from
dishonest corporations and people, nothing more, nothing less, and
nothing else.
I reserve the balance of my time.
Mr. CUMMINGS. Let me be clear, the SEC has the responsibility to
disclose the information that investors need, and this is one of those
areas. We want to protect investors with everything we have. I think
this amendment flies in the face of that, and I would hope that the
body would vote against the amendment.
I yield back the balance of my time.
Mr. POSEY. Madam Chairman, I appreciate the comments; and, once
again, I implore my colleagues to support this good amendment to keep
the SEC on task.
Their job is to protect investors from dishonest people and dishonest
corporations; and with the passage of this amendment, we will do that.
I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Florida (Mr. Posey).
The question was taken; and the Acting Chair announced that the ayes
appeared to have it.
Mr. CUMMINGS. Madam Chair, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Florida will
be postponed.

{time} 2120

Amendment No. 21 Offered by Mrs. Maloney

The Acting CHAIR. It is now in order to consider amendment No. 21
printed in part B of House Report 112-616.
Mrs. MALONEY. Madam Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Page 76, after line 14, insert the following new section
(and conform the table of contents accordingly):

SEC. 604. EFFECTIVE DATE.

This title, and the amendments made by this title, shall
not take effect until the date on which the Chairman of the
Securities and Exchange Commission certifies to the Congress
that implementing the provisions of this title, and the
amendments made by this title, will not divert resources from
the Commission's mission to protect investors, maintain fair,
orderly, and efficient markets, and facilitate capital
formation.

The Acting CHAIR. Pursuant to House Resolution 738, the gentlewoman
from New York (Mrs. Maloney) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentlewoman from New York.
Mrs. MALONEY. Madam Chair, I yield myself such time as I may consume.
My amendment concerns title VI of the bill and the enhanced cost-
benefit analysis that it requires. The amendment very simply requires
that title VI of the underlying bill needs to basically get in line
behind all the critical and previously assigned responsibilities
Congress has given to the SEC to keep consumers, investors, and our
financial system safe.
My amendment would require the Chair of the SEC to certify that the
Commission can perform its core mission of protecting investors and do
the job it was created to do--safely maintain efficient markets and
promote access to capital--before it diverts any of its resources to
carry out the new requirements of title VI in this bill.
The financial reforms we enacted 2 years ago gave the SEC critical
new tools to oversee a multitrillion-dollar market and to help ensure
that we do not get ourselves into another financial crisis. And the
reforms we previously enacted require the SEC to conduct extensive
rulemakings and to complete a number of critical reports.
Unfortunately, this Congress has chosen to underfund the SEC and
hamper its ability to provide the required oversight of the financial
industry. The SEC is now facing a $195 million shortfall this year
alone. They are also operating on a budget that is a 12 percent cut
from what the President requested.
The SEC needs every dollar it now gets just to carry out its core
mission: to protect investors, to implement Dodd-Frank, and to provide
enforcement. I do not believe that it would be responsible on the part
of this Congress to require that already strained resources be diverted
from the SEC's core mission in order to comply with the new burdens of
this title.
The Congressional Budget Office has made it quite clear that
additional resources would have to be used to carry out the provisions
of this title. Imposing these new and severe burdens on the SEC's cost-
benefit analysis process would ensure that the SEC would be hard-
pressed to carry out its fundamental regulatory functions. The SEC
would have difficulty protecting investors even when it has identified
harmful practices.
The SEC is already required to conduct a cost-benefit analysis, and
recent court cases prove that, if the process has been insufficient,
the SEC must start over.
Last year, for example, the SEC proposed a rule on proxy access to
give shareholders more of a say into the activities of companies. The
Court of Appeals for the District of Columbia very directly stated that
their cost-benefit analysis had been inadequate. That represents a very
real and a very effective existing check on the SEC's authority. But
title VI of this bill will effectively shut down the SEC's rulemaking
process altogether by requiring significant resources be directed to
burdensome new requirements.
So I believe that before we hobble an agency that keeps consumers,
investors, and our financial sector safe, it would be wise to require
that the Chair of the SEC must certify that it will still be able to
carry out its core mission before this provision can go into effect--
also, because we already have a cost-benefit analysis.
In the wake of all the cost, the pain, and the dislocation of the
Great Recession, we should not now cripple the SEC's ability to do its
real job, that of protecting investors and our financial markets.
I urge my colleagues to support this amendment, and I reserve the
balance of my time.
Mr. SCHWEIKERT. Madam Chairman, I rise in opposition to the
amendment.
The Acting CHAIR. The gentleman from Arizona is recognized for 5
minutes.
Mr. SCHWEIKERT. To my friend from New York, this is sometimes one of
those amusing moments you get where we're both referring to the same
litigation as part of our arguments against my side and for her
amendment and somewhat making the point that, in that proxy rule
litigation, demonstrating that the SEC actually didn't do the proper
job. And actually, that's what the court stood up and told them.
One of the reasons--and maybe this is just the classic fundamental
different view of what the Agency should be doing to ultimately protect
investors and the economy and working towards capital formation--is you
would think the Chairman of the SEC, instead of moving this to the
bottom of the ranking, it would be at the very, very top. You would
think, actually, in many ways you'd want to rewrite this amendment, at
least from my view, flip it, saying one of the very first things the
Chairman of the SEC does is come in and say, Hey, we did an
appropriate, detailed cost-benefit analysis for this new rule and
regulation, and here's the impact it has on the economy; here's the
impact it has on job creation.
If we stand here repeatedly and say how much we care about jobs and
economic growth, I would think that would be the order you would want
to be pursuing. In many ways, this amendment--actually, not in many
ways, it's what the amendment does--it actually does just the reverse.
It lowers that to the bottom of that ranking.
With that, Madam Chairman, I reserve the balance of my time.
Mrs. MALONEY. May I inquire how much time remains on both sides?
The Acting CHAIR. Each side has 30 seconds remaining.
Mrs. MALONEY. In response to my friend on the other side of the
aisle, regulations did not cause the Great Recession; it did not cause
the loss of jobs. What caused the loss of jobs was the lack of
regulation and the lack of enforcement, and certainly large swaths of
the economy that were not regulated at all that brought on the Great
Recession.
It was the regulations that Dodd-Frank has put in place, and
restoring

[[Page H5283]]

the strength to the SEC to protect investors and to protect our
economy, and putting hurdles and additional expenses in front of the
SEC when they don't even have the money to enforce the new laws and
things they have to do. They're very overburdened. So this is a
reasonable amendment, and I urge its passage.
I yield back the balance of my time.
Mr. SCHWEIKERT. Madam Chairwoman, just one quick comment I'll throw
in there.
I'm part of the belief system that one of the great burdens right now
in economic growth and to sort of that next generation of what's the
next world of jobs that will be coming into our economy--how are we
going to form the capital, how are we going to see what our future
looks like--is actually, in many ways, what we're debating here. I do
believe the massive growth in the regulatory environment over the last
couple of years is stymying that next generation.
There is one point I also want to make. Think of the last decade. I'm
doing this somewhat from memory, but I think a decade ago the SEC's
budget was about $300 million. Today, I believe it's $1.35 billion. So
it's up $1.05 billion in 10 years, to give you some sense of how much
massive increase has been moved into the regulatory body.
With that, Madam Chairman, I yield back the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentlewoman from New York (Mrs. Maloney).
The question was taken; and the Acting Chair announced that the noes
appeared to have it.
Mrs. MALONEY. Madam Chairman, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentlewoman from New York
will be postponed.

Amendment No. 22 Offered by Mr. Manzullo

The Acting CHAIR. It is now in order to consider amendment No. 22
printed in part B of House Report 112-616.
Mr. MANZULLO. Madam Chair, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:

Add at the end of the bill the following:

TITLE VIII--ENSURING HIGH STANDARDS FOR AGENCY USE OF SCIENTIFIC
INFORMATION

SEC. 801. REQUIREMENT FOR FINAL GUIDELINES.

(a) In General.--Not later than January 1, 2013, each
Federal agency shall have in effect guidelines for ensuring
and maximizing the quality, objectivity, utility, and
integrity of scientific information relied upon by such
agency.
(b) Content of Guidelines.--The guidelines described in
subsection (a), with respect to a Federal agency, shall
ensure that--
(1) when scientific information is considered by the agency
in policy decisions--
(A) the information is subject to well-established
scientific processes, including peer review where
appropriate;
(B) the agency appropriately applies the scientific
information to the policy decision;
(C) except for information that is protected from
disclosure by law or administrative practice, the agency
makes available to the public the scientific information
considered by the agency;
(D) the agency gives greatest weight to information that is
based on experimental, empirical, quantifiable, and
reproducible data that is developed in accordance with well-
established scientific processes; and
(E) with respect to any proposed rule issued by the agency,
such agency follows procedures that include, to the extent
feasible and permitted by law, an opportunity for public
comment on all relevant scientific findings;
(2) the agency has procedures in place to make policy
decisions only on the basis of the best reasonably obtainable
scientific, technical, economic, and other evidence and
information concerning the need for, consequences of, and
alternatives to the decision; and
(3) the agency has in place procedures to identify and
address instances in which the integrity of scientific
information considered by the agency may have been
compromised, including instances in which such information
may have been the product of a scientific process that was
compromised.
(c) Approval Needed for Policy Decisions to Take Effect.--
No policy decision issued after January 1, 2013, by an agency
subject to this section may take effect prior to such date
that the agency has in effect guidelines under subsection (a)
that have been approved by the Director of the Office of
Science and Technology Policy.
(d) Policy Decisions Not in Compliance.--A policy decision
of an agency that does not comply with guidelines approved
under subsection (c) shall be deemed to be arbitrary,
capricious, an abuse of discretion, and otherwise not in
accordance with law.
(e) Definitions.--For purposes of this section:
(1) Agency.--The term ``agency'' has the meaning given such
term in section 551(1) of title 5, United States Code.
(2) Policy decision.--The term ``policy decision'' means,
with respect to an agency, an agency action as defined in
section 551(13) of title 5, United States Code, (other than
an adjudication, as defined in section 551(7) of such title),
and includes--
(A) the listing, labeling, or other identification of a
substance, product, or activity as hazardous or creating risk
to human health, safety, or the environment; and
(B) agency guidance.
(3) Agency guidance.--The term ``agency guidance'' means an
agency statement of general applicability and future effect,
other than a regulatory action, that sets forth a policy on a
statutory, regulatory, or technical issue or on an
interpretation of a statutory or regulatory issue.

The Acting CHAIR. Pursuant to House Resolution 738, the gentleman
from Illinois (Mr. Manzullo) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Illinois.

{time} 2130

Mr. MANZULLO. Madam Chair, I yield myself 2 minutes.
Today I'm offering a commonsense, bipartisan amendment to H.R. 4078
with my good friend from North Carolina, Mike McIntyre. This amendment
would codify some of the administration's own policies regarding
scientific integrity.
In March of 2009, President Obama announced a new policy on
scientific integrity. This amendment requires agencies to follow their
own scientific integrity guidelines.
It's important to consider that the nature of Federal regulations has
been changing, with more and more decisions being made without
developing formal, final agency actions. Instead, we see more and more
major policy changes being made through the issuance of guidelines of
the development of agency listings. The agencies will tell affected
private parties that these guidelines or listings are not really
regulations because they're not final actions. But the impact in the
marketplace sure can be pretty final.
The Manzullo-McIntyre amendment codifies the requirement that the
Director of OSTP require each agency to develop guidelines to maximize
the quality, objectivity, utility, and integrity of scientific
information used by Federal agencies.
The amendment requires appropriate peer preview, the disclosure of
scientific studies used in making decisions, and an opportunity for
stakeholder input. It also requires Federal agencies to give the
greatest weight to information based upon reproducible data that is
developed in accordance with the scientific method.
Further, it deems agency actions that do not follow such procedures
to be arbitrary and subject to challenge by affected stakeholders. I
would hope that my colleagues consider this amendment as an objective,
bipartisan attempt at improving the regulatory process.
I reserve the balance of my time.
Mr. CUMMINGS. I rise to claim time in opposition to the amendment.
The Acting CHAIR. The gentleman from Maryland is recognized for 5
minutes.
Mr. CUMMINGS. On first read, Madam Chair, this amendment may sound
like a good idea. However, it's true effect would be to put the
Director of the Office of Science and Technology Policy in charge of
deciding whether any agency in the entire executive branch can make
policy decisions.
The amendment says that no policy decision issued by any agency after
the end of this year can take effect until that agency's guidelines on
scientific integrity have been approved by the Director of the Office
of Science and Technology Policy.
I agree that agencies should have strong guidelines on scientific
integrity. In fact, agencies are already required to have such
guidelines in place under a memo issued by President Obama. However,
it's not realistic to expect that the Office of Science and Technology
Policy could approve guidelines for every agency by January 1, 2013.
The amendment would undermine the integrity of science in the Federal
Government by jeopardizing the ability of agencies to use our best
science to

[[Page H5284]]

protect Americans' health and safety. Specifically, the amendment would
block any ``listing, labeling, or other identification of a substance,
product, or activity as hazardous, or creating risk to human health,
safety or the environment.''
Under this amendment, for example, the FDA could not alert the public
about a defective drug, the Department of Homeland Security could not
implement safety measures to screen for terrorists, and the Nuclear
Regulatory Commission could not recommend an evacuation zone if there
was a nuclear accident.
This amendment, I'm sure, is well-intentioned, but the way it has
been drafted makes it dangerous. I urge my colleagues to vote against
it.
I reserve the balance of my time.
Mr. MANZULLO. I yield 2 minutes to the gentleman from North Carolina
(Mr. McIntyre).
Mr. McINTYRE. Madam Chairman, I rise to speak in favor of the
amendment that Congressman Manzullo and I have introduced to improve
H.R. 4078, the Red Tape Reduction and Small Business Job Creation Act.
Our amendment would make a sensible and needed adjustment to our
Nation's regulatory policy by requiring that Federal agencies develop
guidelines to maximize the quality and integrity of scientific
information used in the regulatory process. This is a goal not only
supported by many Members of Congress from both sides of the aisle, but
also by the administration.
In March of 2009, the President issued a memorandum directing the
Office of Science and Technology to require Federal departments and
agencies to develop procedures for restoring scientific integrity to
government decision-making.
At the beginning of last year, the President issued Executive Order
13563, which stated that each agency ``shall ensure the objectivity of
any scientific and technological information and process used to
support the agency's regulatory actions.''
Our amendment, which is based on bipartisan legislation that
Congressman Manzullo and I introduced earlier this year, builds on the
President's action, has bipartisan support, and codifies the
requirement that the Director of the Office of Science and Technology
compel each Federal agency to develop guidelines regarding the
scientific information used by Federal agencies.
Additionally, this amendment would clarify that scientific
information be supported by peer review, when appropriate, ensure that
scientific studies used in decision-making be disclosed to the public,
and require an opportunity for stakeholder input. This is just common
sense.
It requires Federal agencies to give the greatest weight to
information based on reproducible data that is developed in accordance
with the scientific method.
Finally, this would provide grounds for any agency's actions that
violate these integrity guidelines, that they have to be deemed
arbitrary and subject to challenge by the affected stakeholders. This
commonsense amendment requires maximizing the quality and integrity of
scientific information used in the regulatory process, and I encourage
my colleagues to adopt this bipartisan amendment.
Mr. CUMMINGS. I continue to reserve the balance of my time.
Mr. MANZULLO. How much time do I have?
The Acting CHAIR. The gentleman has 1 minute remaining.
Mr. MANZULLO. I yield that 1 minute to the gentleman from Tennessee
(Mr. Fincher).
Mr. FINCHER. Madam Chairman, I rise in strong support of Mr.
Manzullo's amendment, which urges the Federal Government to develop
scientific integrity policies when a Federal agency implements a rule
or regulation. Science should be at the heart of Federal agency
decision-making.
Right now, the pork producers in my State and others in agriculture
are fighting the FDA's concerns regarding antibiotic use in animals
when there is no scientific evidence behind those concerns. This is why
I had originally introduced House Resolution 98 last year, which would
send a bipartisan, commonsense message to the Food and Drug
Administration to rely on scientific fact in its development of rules
and regulations.
Mr. Manzullo's amendment goes further, guiding all agencies on a path
towards scientific integrity, not just the FDA.
I would like to remind my colleagues that Americans are constantly
facing the challenge of widespread and needless interventions in their
life. Why let this continue through our agencies' misuse of science?
I urge my colleagues to support the Manzullo amendment.
Mr. CUMMINGS. Madam Chairman, after hearing the arguments of the
other side, I'm going to rest on what I've already said. I think I've
made it abundantly clear why this is not an appropriate amendment.
With that, I hope that the House will vote against it. I yield back
the balance of my time.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Illinois (Mr. Manzullo).
The amendment was agreed to.

Amendment No. 23 Offered by Mrs. Lummis

The Acting CHAIR. It is now in order to consider amendment No. 23
printed in part B of House Report 112-616.
Mrs. LUMMIS. Madam Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:
Add after title VII the following new title (and conform
the table of contents accordingly):

TITLE VIII--TRACKING THE COST TO TAXPAYERS OF FEDERAL LITIGATION

SEC. 801. SHORT TITLE.

This title may be cited as the ``Tracking the Cost to
Taxpayers of Federal Litigation Act''.

SEC. 802. MODIFICATION OF EQUAL ACCESS TO JUSTICE PROVISIONS.

(a) Agency Proceedings.--Section 504 of title 5, United
States Code, is amended--
(1) in subsection (c)(1), by striking ``, United States
Code''; and
(2) by striking subsections (e) and (f) and inserting the
following:
``(e)(1) The Chairman of the Administrative Conference of
the United States, after consultation with the Chief Counsel
for Advocacy of the Small Business Administration, shall
report annually to the Congress on the amount of fees and
other expenses awarded during the preceding fiscal year
pursuant to this section. The report shall describe the
number, nature, and amount of the awards, the claims involved
in the controversy, and any other relevant information that
may aid the Congress in evaluating the scope and impact of
such awards. Each agency shall provide the Chairman in a
timely manner all information necessary for the Chairman to
comply with the requirements of this subsection. The report
shall be made available to the public online.
``(2)(A) The report required by paragraph (1) shall account
for all payments of fees and other expenses awarded under
this section that are made pursuant to a settlement
agreement, regardless of whether the settlement agreement is
sealed or otherwise subject to nondisclosure provisions,
except that any version of the report made available to the
public may not reveal any information the disclosure of which
is contrary to the national security of the United States.
``(B) The disclosure of fees and other expenses required
under subparagraph (A) does not affect any other information
that is subject to nondisclosure provisions in the settlement
agreement.
``(f) The Chairman of the Administrative Conference shall
create and maintain online a searchable database containing
the following information with respect to each award of fees
and other expenses under this section:
``(1) The name of each party to whom the award was made.
``(2) The name of each counsel of record representing each
party to whom the award was made.
``(3) The agency to which the application for the award was
made.
``(4) The name of each counsel of record representing the
agency to which the application for the award was made.
``(5) The name of each administrative law judge, and the
name of any other agency employee serving in an adjudicative
role, in the adversary adjudication that is the subject of
the application for the award.
``(6) The amount of the award.
``(7) The names and hourly rates of each expert witness for
whose services the award was made under the application.
``(8) The basis for the finding that the position of the
agency concerned was not substantially justified.
``(g) The online searchable database described in
subsection (f) may not reveal any information the disclosure
of which is prohibited by law or court order, or the
disclosure of which is contrary to the national security of
the United States.''.
(b) Court Cases.--Section 2412(d) of title 28, United
States Code, is amended by adding at the end the following:
``(5)(A) The Chairman of the Administrative Conference of
the United States shall report annually to the Congress on
the amount

[[Page H5285]]

of fees and other expenses awarded during the preceding
fiscal year pursuant to this subsection. The report shall
describe the number, nature, and amount of the awards, the
claims involved in each controversy, and any other relevant
information which may aid the Congress in evaluating the
scope and impact of such awards. Each agency shall provide
the Chairman with such information as is necessary for the
Chairman to comply with the requirements of this paragraph.
The report shall be made available to the public online.
``(B)(i) The report required by subparagraph (A) shall
account for all payments of fees and other expenses awarded
under this subsection that are made pursuant to a settlement
agreement, regardless of whether the settlement agreement is
sealed or otherwise subject to nondisclosure provisions,
except that any version of the report made available to the
public may not reveal any information the disclosure of which
is contrary to the national security of the United States.
``(ii) The disclosure of fees and other expenses required
under clause (i) does not affect any other information that
is subject to nondisclosure provisions in the settlement
agreement.
``(C) The Chairman of the Administrative Conference shall
include and clearly identify in the annual report under
subparagraph (A), for each case in which an award of fees and
other expenses is included in the report--
``(i) any amounts paid from section 1304 of title 31 for a
judgment in the case;
``(ii) the amount of the award of fees and other expenses;
and
``(iii) the statute under which the plaintiff filed suit.
``(6) The Chairman of the Administrative Conference shall
create and maintain online a searchable database containing
the following information with respect to each award of fees
and other expenses under this subsection:
``(A) The name of each party to whom the award was made.
``(B) The name of each counsel of record representing each
party to whom the award was made.
``(C) The agency involved in the case.
``(D) The name of each counsel of record representing the
agency involved in the case.
``(E) The name of each judge in the case, and the court in
which the case was heard.
``(F) The amount of the award.
``(G) The names and hourly rates of each expert witness for
whose services the award was made.
``(H) The basis for the finding that the position of the
agency concerned was not substantially justified.
``(7) The online searchable database described in paragraph
(6) may not reveal any information the disclosure of which is
prohibited by law or court order, or the disclosure of which
is contrary to the national security of the United States.
``(8) The Attorney General of the United States shall
provide to the Chairman of the Administrative Conference of
the United States in a timely manner all information
necessary for the Chairman to carry out the Chairman's
responsibilities under this subsection.''.
(c) Clerical Amendment.--Section 2412(e) of title 28,
United States Code, is amended by striking ``of section 2412
of title 28, United States Code,'' and inserting ``of this
section''.

The Acting CHAIR. Pursuant to House Resolution 738, the gentlewoman
from Wyoming (Mrs. Lummis) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentlewoman from Wyoming.

{time} 2140

Mrs. LUMMIS. Madam Chairman, I have two amendments made in order
under this rule. I will offer this amendment. However, thanks to those
I've been working with across the aisle, I intend not to offer my
second amendment.
Thank you, Mrs. Maloney.
The Equal Access to Justice Act, or EAJA, was originally passed in
1980 by a Congress concerned that everyday citizens could not afford to
challenge the Federal Government in court when they had been wronged by
government regulations. As originally designed, EAJA would reimburse
small businesses, seniors and veterans for successfully challenging the
Federal Government in court when no other law provided for that
reimbursement.
It was a good idea then, and it remains a good idea today. For 15
years, the law has worked mostly as intended; but over time, cracks in
the system have formed. In updating EAJA, it has become necessary to
repair those cracks and to ensure EAJA's viability into the future.
Three issues need to be resolved:
First, we need to ensure that our Nation's veterans, seniors, and
small businesses have access to qualified attorneys. Right now, EAJA
puts up unnecessary roadblocks to these legitimate users;
Second, we need to close loopholes that have allowed EAJA to be
exploited by those dissatisfied with the reimbursements provided for
them in the Nation's environmental laws;
Finally, we must reinstate tracking and reporting requirements so
that Congress and every American has an accurate accounting of how much
taxpayer money we spend to reimburse attorneys.
All three of those issues are addressed in H.R. 1996, the Government
Litigation Savings Act; but this amendment, the one we are debating
right now, only addresses the third issue--the transparency gap in
EAJA.
As the recently released GAO report made clear, there is a severe
lack of information on these payments. While we don't need that data to
know exactly what has been happening with EAJA in recent years, going
forward we need robust tracking as a management tool to ensure that
EAJA works as intended. The tracking and reporting of EAJA payments is
the part of the Government Litigation Savings Act that has broad
agreement.
I greatly appreciate the work that the chairman of the Judiciary
Committee and the ranking member of the Judiciary Committee have put
into this issue. We've come a long way on this, and the bill has
benefited from constructive input from both sides of the aisle. We must
continue to work together on providing a fair market rate for lawyers
who represent veterans, seniors and small businesses, as well as on
instituting a reasonable eligibility standard. Both of these issues
require further deliberation, and I am hopeful that the chairman and
ranking member will commit to working with me to further update EAJA as
I am committed to working with them.
In the meantime, let's pass this transparency amendment, which is the
third leg of the three-pronged need to address the EAJA issues. This is
the one on which we all agree, this third issue of transparency.
Madam Chairman, I reserve the balance of my time.
Mrs. MALONEY. I rise in support of the gentlelady's amendment.
The Acting CHAIR. Without objection, the gentlewoman from New York is
recognized for 5 minutes.
There was no objection.
Mrs. MALONEY. Thank you, Madam Chair.
This is one of two amendments that Mrs. Lummis has submitted. She has
indicated that she will not be offering her other amendment, and we are
very pleased as we had some serious concerns about that amendment.
This amendment I am supporting, though, would require Federal
agencies to gather valuable data, and it would require the
Administrative Conference of the United States to issue a report based
on that data. This report would help taxpayers and Congress determine
where taxpayer funds flow under the Equal Access to Justice Act.
This amendment has merit. We should have mechanisms in place to track
where taxpayer money goes, and the reports this amendment requires will
help Congress conduct more thorough oversight over Federal agencies.
There are still some concerns that some have raised about the extent
to which the data will be made public. This data could include names of
Social Security claimants and veterans who bring claims under EAJA, and
this may have a chilling effect on those claimants.
We are willing to work with Mrs. Lummis to address these concerns.
Mrs. Lummis, herself, has raised more specific concerns with how EAJA
has been used and urges Congress to amend the act. The committee held a
hearing and marked up her bill. The reported bill contained several
needed improvements to address many of our concerns on this side of the
aisle. We thank her for working with us on these changes. The bill
still needs some more work, and we will continue to work with her to
address all of our concerns. I urge my colleagues to support this
amendment.
I yield back the balance of my time.
Mrs. LUMMIS. I thank the gentlelady from New York.
Madam Chairman, I wish to yield the balance of my time to the
gentleman from Oklahoma (Mr. Lankford).
Mr. LANKFORD. I rise in support of this amendment as well. I am
grateful for the bipartisan cooperation and for

[[Page H5286]]

getting a chance to find more transparency as well as how the Equal
Access to Justice Act of 1980 is being implemented. Unfortunately, it
seems that some special interest groups, particularly some
environmental groups, of late are abusing EAJA. They're financing
lawsuits to advance a special agenda.
This amendment does shine light on who is receiving attorneys' fees
under EAJA by revising and improving EAJA's reporting requirements,
which have not been revised in many years. American taxpayers do
deserve to know how their money is being spent by the Federal
Government, regardless of what the interest group is and where it is
coming from, and to know to what extent the financing is being used to
advance any kind of ideology.
For these reasons, I do support this amendment, and I am grateful for
the bipartisan support.
The Acting CHAIR. The question is on the amendment offered by the
gentlewoman from Wyoming (Mrs. Lummis).
The amendment was agreed to.
The Acting CHAIR. The Chair understands that amendment No. 24 will
not be offered.

Amendment No. 25 Offered by Mr. Posey

The Acting CHAIR. It is now in order to consider amendment No. 25
printed in part B of House Report 112-616.
Mr. POSEY. Madam Chairman, I have an amendment at the desk.
The Acting CHAIR. The Clerk will designate the amendment.
The text of the amendment is as follows:

Page 8, line 10, after the period insert the following:
If meeting that definition, such term includes any
requirement by the Secretary of the Treasury, except to the
extent provided in Treasury Regulations as in effect on
February 21, 2011, that a payor of interest make an
information return in the case of interest--
(1) which is described in section 871(i)(2)(A) of the
Internal Revenue Code of 1986, and
(2) which is paid--
(A) to a nonresident alien, and
(B) on a deposit maintained at an office within the United
States.

The Acting CHAIR. Pursuant to House Resolution 738, the gentleman
from Florida (Mr. Posey) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Florida.
Mr. POSEY. Madam Chair, I yield myself such time as I may consume.
The Florida International Bankers Association has reported to me
that, over the past several months, they have seen as much as $300
million leaving United States banks for overseas banks.
Why is this money leaving the United States, and what can we do to
stop the hemorrhaging?
The adoption of this amendment will stop the hemorrhaging of hundreds
of millions of dollars--soon to be billions of dollars if this
amendment is not adopted. This is according to the studies on earlier,
scaled-back proposals by the Internal Revenue Service.
For nearly 100 years, the United States has had in place a policy
that encourages foreigners to put their money in our banks in the
United States. We have told them that the United States is a welcoming
and safe place for their deposits. Earlier this year, apparently
clueless about the financial conditions we were in as a Nation, the IRS
finalized a new rule to take effect in January 2013 that basically
sends the message to law-abiding foreign depositors that U.S. banks
don't want their money. Under this rule, the United States would no
longer provide these law-abiding depositors with the confidentiality
that they've had and that they need.
The new IRS rules would impose cumbersome new reporting requirements
for law-abiding foreign depositors and for foreign depositors who live
in nations where corruption is rampant. They will simply withdraw their
money from the United States institutions and put their money to work
in other nations around the world. This is bad for the United States
economy.
There has been strong bipartisan opposition to the IRS proposal. The
entire Florida delegation--all 25 members, every Republican and every
Democrat--wrote the Treasury last year, asking them to withdraw the
regulation. Bipartisan letters have gone to the Internal Revenue
Service urging them to withdraw the regulation, and bipartisan
legislation has been filed in the House and in the Senate to stop the
regulation.
Each day Congress refuses to act, deposits are leaving the United
States for Singapore, Panama, the Bahamas, the Cayman Islands, and
elsewhere. This money will not return to the United States once it
leaves. Most importantly for our communities, this capital will not be
available to our small businesses and families when they need it to
build in America. The new regulation will harm the U.S. economy, and we
must stop its implementation.

{time} 2150

Ironically, this same regulation from the IRS was rejected about 8
years ago when the bureaucrats at the IRS thought it was a good idea
then. A strong bipartisan effort in Congress led to the IRS withdrawal
of the rule, and we must do that again today.
If you share my commitment to economic recovery and believe that the
United States should be a welcoming place for foreign depositors who
want to put their money to work in the United States, then I urge you
to join in support of this amendment. Please vote ``yes.''
I reserve the balance of my time.
Mr. FRANK of Massachusetts. Madam Chair, I rise to oppose the
amendment.
The Acting CHAIR. The gentleman is recognized for 5 minutes.
Mr. FRANK of Massachusetts. Madam Chair, I yield myself 2 minutes.
I understand that the banks in America don't like this because they
would like to continue to be a place where people can come from other
countries or send their money from other countries and not have it
reported back home. The problem is that in America, we suffer a much
greater loss right now from Americans who evade their taxes. Most
Americans don't. But taxes being parked in the Cayman Islands, which
was just mentioned and elsewhere, are a problem. We passed in 2010 a
bill to try and get money owed to the United States paid to the United
States. That requires the cooperation of other governments.
Members are aware of the negotiations with Switzerland and other tax
havens. What this says is: we the United States want you to help us
collect taxes owed to us, but we won't do the same. It is the tax
evaders' bill of rights. The gentleman from Florida says they're law
abiding citizens. Most of them probably are. How does he know they all
are? Why do people in the Cayman Islands want to put money in American
banks? Maybe they are perfectly good reasons. Maybe they want to come
visit their money some day.
The fact is that people who send money to other countries include
people who evade taxes. What this says to the United States is we
basically are going to have to abandon the effort to collect taxes owed
to us in foreign countries because we are telling the foreign countries
we will not cooperate with them. We have tax treaties that we're
pursuing. This basically aborts that.
Americans who want to send their money elsewhere and not pay taxes,
they like this idea. With regard to the American banks, people have
said they'll send their money elsewhere. The notion that we should
compete in a race to the bottom, the notion that we should match other
countries in an absence of rules is a philosophy that gets us in
trouble. I believe that if we work hard, we will get a number of
countries that will work with us on this. That's the essential point.
If Members favor a vigorous effort by the United States Government to
recover taxes owed to us from elsewhere, they should reject this
amendment.
I reserve the balance of my time.
Mr. POSEY. Madam Chair, how much time do I have remaining?
The Acting CHAIR. The gentleman from Florida has 2 minutes remaining.
Mr. POSEY. This is not just about banks. This is about jobs, this is
about mortgages, this is about the economy, and this is about our
communities prospering. Information can be shared today on a case-by-
case basis. If the IRS suggests to you otherwise, it's just not true.
There's a common misperception. Let's not forget how fortunate we are
to live in the United States of America.

[[Page H5287]]

Too often, too many people forget this, it seems. We live under a
stable government and a relatively stable economy compared to some of
the other countries we receive deposits from. Many nonresident deposits
come from countries where the governments themselves are very unstable,
where their personal security or their property are major concerns.
It's very probable that the depositor's personal bank account
information could be leaked to unauthorized persons in their home
country--to governments, criminals, or terrorist groups--which could
make the depositors and their families targets of extortion,
kidnappings, and other potentially fatal criminal activities. Imagine
living with that over your shoulder every day.
Assurance from the IRS bureaucrats that your information is safe
won't calm those fears. Our Pentagon has been hacked. I asked the
Secretary of the Treasury if we would stand personally liable for any
breaches that would cause a loss of life or harm to people whose
information was betrayed. They said they would not be willing to do
that.
With that, I reserve the balance of my time.
Mr. FRANK of Massachusetts. I yield myself the balance of my time.
The Acting CHAIR. The gentleman is recognized for 3 minutes.
Mr. FRANK of Massachusetts. In fact, we suffer more from taxes evaded
in the U.S., I believe, than the money we have here. The point,
however, is--and I will submit the comments from the Department of the
Treasury--we will not be sending this to countries with which we don't
have a tax treaty. There are strong statutory and regulatory
requirements that prevent this information from being sent to countries
that abuse it.
Maybe Members think that's not strong enough. If the gentleman from
Florida would like to submit legislation to strengthen those statutory
requirements to make it clear that some countries qualify and some
don't--for example, I'm informed Venezuela today would not qualify for
obvious reasons, because of the brutal, corrupt nature of that
government.
So the question is, because some governments would abuse it, should
we protect every tax evader who wants to use the United States as a
haven from having their money reported, at the price of not getting
cooperation ourselves? That doesn't mean everybody puts their money
here as a tax evader. If you're not a tax evader, then there's no
problem with having this reported. As far as the Pentagon being hacked,
yeah, people have been hacked. If the IRS was going to be hacked, a lot
more would have happened.
The fact is that the security of tax returns in America is one of the
best things about our government. Administrations of both parties from
time immemorial have protected the security of tax returns. We have a
very good record as a government. We shouldn't just denigrate it with
no basis in protecting the integrity of tax returns. People have filed
tax returns and have had great privacy in them. This is the central
point, because some of the banks would like to get this money and not
care whether people are tax evaders or not.
The gentleman says we can do it case by case. That's an impossible
task, case by case to decide. Then the IRS becomes more intrusive. Do
you want to do a frisk of each individual to decide whether he or she
has his returns done? Case by case is the way you destroy privacy.
Here's the fundamental point. We are making efforts to collect taxes
owed to us by people who have hidden the money elsewhere, and we know
that's been a problem. This would make it impossible to do that with
any efficiency. As I said, there are very clear statements of policy
against sending this information to Venezuela, against sending it to
other places where it wouldn't be secure. This is the question: Are we
going to allow American standards, in trying to impose taxes that are
legitimately owed here, to be eroded by other countries?
The gentleman mentioned the Cayman Islands. I don't want the Cayman
Islands to set the standard for American tax collection. The gentleman
mentioned that the Cayman Islanders are sending money here. I don't
want the Cayman Islanders and their desire to get shelter to be setting
the standard for American tax collection practices, for the need of
America to do the right thing.
Those people who are lawfully investing money will not be frightened
by this, and America's ability to get taxes owed to us would be
destroyed by this amendment.
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 31
[TD 9584]
RIN 1545--BJ01
Guidance on Reporting Interest Paid to Nonresident Aliens
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations.
SUMMARY: This document contains final regulations regarding
the reporting requirements for interest that relates to
deposits maintained at U.S. offices of certain financial
institutions and is paid to certain nonresident alien
individuals. These regulations will affect commercial banks,
savings institutions, credit unions, securities brokerages,
and insurance companies that pay interest on deposits.
Background
On January 7, 2011, the Treasury Department and the IRS
published a notice of proposed rulemaking (REG 146097-09)
(the 2011 proposed regulations) in the Federal Register (76
FR 1105, corrected by 76 FR 2852, 76 FR 20595, and 76 FR
22064) under section 6049 of the Internal Revenue Code
(Code). The 2011 proposed regulations withdrew proposed
regulations that had been issued on August 2, 2002 (67 FR
50386) (the 2002 proposed regulations). The 2002 proposed
regulations would have required reporting of interest
payments to nonresident alien individuals that are residents
of certain specified countries. The 2011 proposed regulations
provide that payments of interest aggregating $10 or more on
a deposit maintained at a U.S. office of a financial
institution and paid to any nonresident alien individual are
subject to information reporting.
Written comments were received by the Treasury Department
and the IRS response to the 2011 proposed regulations. A
public hearing on the 2011 proposed regulations was held on
May 18, 2011, at which further comments were received. All
comments were considered and are available for public
inspection at http://www.regulations.gov or upon request.
After consideration of the written comments and the comments
provided at the public hearing, the 2011 proposed regulations
are adopted as revised by this Treasury decision.
Explanation and Summary of Comments
Objectives of This Regulatory Action
The reporting required by these regulations is essential to
the U.S. Government's efforts to combat offshore tax evasion
for several reasons. First it ensures that the IRS can, in
appropriate circumstances, exchange information relating to
tax enforcement with other jurisdictions. In order to ensure
that U.S. taxpayers cannot evade U.S. tax by hiding income
and assets offshore, the United States must be able to obtain
information from other countries regarding income earned and
assets held in those countries by U.S. taxpayers. Under
present law, the measures available to assist the United
States in obtaining this information include both treaty
relationships and statutory provisions. The effectiveness of
these measures depends significantly, however, on the United
States' ability to reciprocate.
The United States has constructed an expansive network of
international agreements, including income tax or other
conventions and bilateral agreements relating to the exchange
of tax information (collectively referred to as information
exchange agreements), which provide for the exchange of
information related to tax enforcement under appropriate
circumstances. These information exchange relationships are
based on cooperation and reciprocity. A jurisdiction's
willingness to share information with the IRS to combat
offshore tax evasion by U.S. taxpayers depends, in large
part, on the ability of the IRS to exchange information that
will assist that jurisdiction in combating offshore tax
evasion by its own residents. These regulations, by requiring
reporting of deposit interest to the IRS, will ensure that
the IRS is in a position to exchange such information
reciprocally with a treaty partner when it is appropriate to
do so.
Second, in 2010, Congress supplemented the established
network of information exchange agreements by enacting, as
part of the Hiring Incentives to Restore Employment Act of
2010 (Pub. L. 111-147), provisions commonly known as the
Foreign Account Tax Compliance Act (FATCA) that require
overseas financial institutions to identify U.S. accounts and
report information (including interest payments) about those
accounts to the IRS. In many cases, however, the
implementation of FATCA will require the cooperation of
foreign governments in order to overcome legal impediments to
reporting by their resident financial institutions. Like the
United States, those foreign governments are keenly
interested in addressing offshore tax evasion by their own
residents and need tax information from other jurisdictions,
including the United States, to support their efforts. These
regulations will facilitate intergovernmental cooperation on

[[Page H5288]]

FATCA implementation by better enabling the IRS, in
appropriate circumstances, to reciprocate by exchanging
information with foreign governments for tax administration
purposes.
Finally, the reporting of information required by these
regulations will also directly enhance U.S. tax compliance by
making it more difficult for U.S. taxpayers with U.S.
deposits to falsely claim to be nonresidents in order to
avoid U.S. taxation on their deposit interest income.
International Standard for Transparency and Information
Exchange
Under the international standard for transparency and
exchange of information, which is reflected in the
Organisation for Economic Cooperation and Development (OECD)
Model Agreement on Exchange of Information on Tax Matters,
the OECD Model Tax Convention, and the United Nations Model
Double Tax Convention between Developed and Developing
Countries, exchange of tax information cannot be limited by
domestic bank secrecy laws or the absence of a specific
domestic tax interest in the information to be exchanged.
Accordingly, under this global standard a country cannot
refuse to share tax information based on domestic laws that
do not require banks to share the information. In addition,
under the global standard, a country cannot opt out of
information exchange based on the fact that the country does
not itself need the information to enforce its own tax rules.
Thus, even countries that do not impose income taxes, and
therefore do not have tax enforcement concerns, have entered
into information exchange agreements to provide information
about the accounts of nonresidents.
Comments Regarding Confidentiality and Improper Use of
Information
Some comments on the 2011 proposed regulations expressed
concerns that the information required to be reported under
those regulations might be misused. For example, comments
expressed concern that deposit interest information may be
shared with a country that does not have laws in place to
protect the confidentiality of the information exchanged or
that would use the information for purposes other than the
enforcement of its tax laws. These comments further suggested
that these concerns could affect nonresident alien investors'
decisions about the location of their deposits.
The Treasury Department and the IRS believe that the
concerns raised by the comments are addressed by existing
legal limitations and administrative safeguards governing tax
information exchange. As discussed herein, information
reported pursuant to these regulations will be exchanged only
with foreign governments with which the United States has an
agreement providing for the exchange and when certain
additional requirements are satisfied. Even when such an
agreement exists, the IRS is not compelled to exchange
information, including information collected pursuant to
these regulations, if there is concern regarding the use of
the information or other factors exist that would make
exchange inappropriate.
First, information reported pursuant to these regulations
is return information under section 6103. Section 6103
imposes strict confidentiality rules with respect to all
return information. Moreover, section 6103(k)(4) allows the
IRS to exchange return information with a foreign government
only to the extent provided in, and subject to the terms and
conditions of an information exchange agreement. Thus, the
IRS can share the information reported under these
regulations only with foreign governments with which the
United States has an information exchange agreement. Absent
such an agreement, the IRS is statutorily barred from sharing
return information with another country, and these
regulations cannot and do not change that rule.
Second, consistent with established international
standards, all of the information exchange agreements to
which the United States is a party require that the
information exchanged under the agreement be treated and
protected as secret by the foreign government. In addition,
information exchange agreements generally prohibit foreign
governments from using any information exchanged under such
an agreement for any purpose other than the purpose of
administering, collection and enforcing the taxes covered by
the agreement. Accordingly, under these agreements, neither
country is permitted to release the information shared under
the agreement or use it for any other law enforcement
purposes.
Third, consistent with the international standard for
information exchange and United States law, the United States
will not enter into an information exchange agreement unless
the Treasury Department and the IRS are satisfied that the
foreign government has strict confidentiality protections.
Specifically, prior to entering into an information exchange
agreement with another jurisdiction, the Treasury Department
and the IRS closely review the foreign jurisdiction's legal
framework for maintaining the confidentiality of taxpayer
information. In order to conclude an information exchange
agreement with another country, the Treasury Department and
the IRS must be satisfied that the foreign jurisdiction has
the necessary legal safeguards in place to protect exchanged
information and that adequate penalties apply to any breach
of that confidentiality.
Finally, even if an information exchange agreement is in
effect, the IRS will not exchange information on deposit
interest or otherwise with a country if the IRS determines
that the country is not complying with its obligations under
the agreement to protect the confidentiality of information
and to use the information solely for collecting and
enforcing taxes covered by the agreement. The IRS also will
not exchange any return information with a country that does
not impose tax on the income being reported because the
information could not be used for the enforcement of tax laws
within that country.
In addition, the IRS has options regarding the appropriate
form of exchange. For example, the IRS might exchange
information with another jurisdiction only upon specific
request. In the case of specific exchange requests, the IRS
evaluates the requesting country's current practices with
respect to information confidentiality. The IRS also requires
the requesting country to explain the intended permitted use
of the information and justify the relevance of that
information to the permitted use. Alternatively, in
appropriate circumstances, the IRS might exchange certain
information on an automatic basis. The IRS currently
exchanges deposit interest information on an automatic basis
with only one jurisdiction (Canada). The IRS will not enter
into a new automatic exchange relationship with a
jurisdiction unless it has reviewed the country's policies
and practices and has determined that such an exchange
relationship is appropriate. Further, the IRS generally will
not enter into an automatic exchange relationship with
respect to the information collected under these regulations
unless the other jurisdiction is willing and able to
reciprocate effectively.
The Treasury Department and the IRS believe that the legal
and administrative safeguards described in the preceding
paragraphs regarding the use of information collected under
these regulations should adequately address the concerns
identified by the comments and, therefore, these regulations
should not significantly impact the investment and savings
decisions of the vast majority of nonresidents who are aware
of and understand these safeguards and existing law and
practice. Nevertheless, to enhance awareness and further
address concerns, these final regulations revise the 2011
proposed regulations to require reporting only in the case of
interest paid to a nonresident alien individual resident in a
country with which the United States has in effect an
information exchange agreement pursuant to which the United
States agrees to provide, as well as receive, information and
under which the competent authority is the Secretary of the
Treasury or his delegate.
For this purpose, the Treasury Department and the IRS will
publish a Revenue Procedure contemporaneously with these
final regulations specifically identifying the countries with
which the United States has in force such an information
exchange agreement. The Revenue Procedure will be updated as
appropriate. With respect to any calendar year, payors will
only be required to report interest on deposits maintained at
an office within the United States and paid to a nonresident
alien individual who is a resident of a country identified in
the Revenue Procedure as of December 31 of the prior calendar
year as being a country with which the United States has in
effect such an information exchange agreement. To address any
potential burden associated with reporting on this basis, the
final regulations provide that for any year for which the
information return under Sec. 1.6049-4(b)(5) is required, a
payor may elect to report interest payments to all
nonresident alien individuals.
As previously discussed, the identification of a country as
having an information exchange agreement with the United
States does not necessarily mean that the information
collected under these regulations will be reported to such
foreign jurisdiction. As an additional measure to further
increase awareness among concerned nonresidents regarding the
IRS' use of information collected under these regulations,
the Revenue Procedure also will include a second list
identifying the countries with which the Treasury Department
and the IRS have determined that it is appropriate to have an
automatic exchange relationship with respect to the
information collected under these regulations. This
determination will be made only after further assessment of a
country's confidentiality laws and practices and the extent
to which the country is willing and able to reciprocate.
In addition, in response to comments, and given the
information exchange practices described in the preceding
paragraphs and the information that will be available in the
Revenue Procedure, these final regulations eliminate the
requirement in the 2011 proposed regulations for financial
institutions to include in the information statement provided
to nonresident alien individuals a statement informing the
individual that the information may be furnished to the
government of the country where the recipient resides. In
addition, these final regulations clarify that a payor or
middleman may rely on the permanent residence address
provided on a valid Form W-8BEN, ``Beneficial Owners
Certificate of Foreign Status for U.S. Tax Withholding'', for
purposes of determining the country of residence of a
nonresident alien to whom reportable interest is paid unless
the payor or middleman knows or has reason to know that such
documentation of the country of residence is unreliable or
incorrect. The final regulations also modify

[[Page H5289]]

Sec. 31.3406(g)-1 of the proposed regulations to clarify
that, consistent with the backup withholding rules generally,
a payment of interest described in Sec. 1.6049-8(a) is not
subject to withholding under section 3406 if the payor may
treat the payee as a foreign person, without regard to
whether the payor reported such interest (although a payor
may be subject to penalties if it fails to report as
required). As under the prior regulations requiring the
reporting of interest paid to Canadian nonresident alien
individuals, the final regulations define interest subject to
reporting to mean interest paid on deposits as defined under
section 871(i)(2)(A) (including deposits with persons
carrying on a banking business deposits with certain savings
institutions, and certain amounts held by insurance companies
under agreements to pay interest thereon).

The Acting CHAIR. The time of the gentleman from Massachusetts has
expired. The gentleman from Florida has 30 seconds remaining.
Mr. POSEY. I don't know how many deadbeat taxpayers are in Venezuela
or Cuba or Iran, but I think it's ludicrous to think that we would want
to put American investments in other countries. We're looking at,
according to the Mercatus Center at George Mason, a possible capital
flight of $88 billion, and this is opposed to maybe, at the high side
estimating, we'll recover $800 million from tax cheats, hopefully.
That's just not a good percentage. That's not a good investment. That's
bad business in any sense of the word.
I urge my colleagues to vote in favor of a good commonsense bill that
will help our economy recover and help America stay strong.
The Acting CHAIR. The question is on the amendment offered by the
gentleman from Florida (Mr. Posey).
The question was taken; and the Acting Chair announced that the ayes
appeared to have it.
Mr. FRANK of Massachusetts. Madam Chair, I demand a recorded vote.
The Acting CHAIR. Pursuant to clause 6 of rule XVIII, further
proceedings on the amendment offered by the gentleman from Florida will
be postponed.

{time} 2200

Mr. LANKFORD. Madam Chair, I move that the Committee do now rise.
The motion was agreed to.
Accordingly, the Committee rose; and the Speaker pro tempore (Mr.
Posey) having assumed the chair, Ms. Hayworth, Acting Chair of the
Committee of the Whole House on the state of the Union, reported that
that Committee, having had under consideration the bill (H.R. 4078) to
provide that no agency may take any significant regulatory action until
the unemployment rate is equal to or less than 6.0 percent, had come to
no resolution thereon.

____________________