[Congressional Record Volume 161, Number 2 (Wednesday, January 7, 2015)]
[House]
[Pages H71-H82]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     PROMOTING JOB CREATION AND REDUCING SMALL BUSINESS BURDENS ACT

  Mr. FITZPATRICK. Mr. Speaker, I move to suspend the rules and pass 
the bill (H.R. 37) to make technical corrections to the Dodd-Frank Wall 
Street Reform and Consumer Protection Act, to enhance the ability of 
small and emerging growth companies to access capital through public 
and private markets, to reduce regulatory burdens, and for other 
purposes.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                                H.R. 37

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Promoting Job Creation and 
     Reducing Small Business Burdens Act''.

     SEC. 2. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.

     TITLE I--BUSINESS RISK MITIGATION AND PRICE STABILIZATION ACT

Sec. 101. Margin requirements.
Sec. 102. Implementation.

             TITLE II--TREATMENT OF AFFILIATE TRANSACTIONS

Sec. 201. Treatment of affiliate transactions.

   TITLE III--HOLDING COMPANY REGISTRATION THRESHOLD EQUALIZATION ACT

Sec. 301. Registration threshold for savings and loan holding 
              companies.

 TITLE IV--SMALL BUSINESS MERGERS, ACQUISITIONS, SALES, AND BROKERAGE 
                           SIMPLIFICATION ACT

Sec. 401. Registration exemption for merger and acquisition brokers.
Sec. 402. Effective date.

    TITLE V--SWAP DATA REPOSITORY AND CLEARINGHOUSE INDEMNIFICATION 
                              CORRECTIONS

Sec. 501. Repeal of indemnification requirements.

TITLE VI--IMPROVING ACCESS TO CAPITAL FOR EMERGING GROWTH COMPANIES ACT

Sec. 601. Filing requirement for public filing prior to public 
              offering.
Sec. 602. Grace period for change of status of emerging growth 
              companies.
Sec. 603. Simplified disclosure requirements for emerging growth 
              companies.

         TITLE VII--SMALL COMPANY DISCLOSURE SIMPLIFICATION ACT

Sec. 701. Exemption from XBRL requirements for emerging growth 
              companies and other smaller companies.
Sec. 702. Analysis by the SEC.
Sec. 703. Report to Congress.
Sec. 704. Definitions.

   TITLE VIII--RESTORING PROVEN FINANCING FOR AMERICAN EMPLOYERS ACT

Sec. 801. Rules of construction relating to collateralized loan 
              obligations.

[[Page H72]]

                   TITLE IX--SBIC ADVISERS RELIEF ACT

Sec. 901. Advisers of SBICs and venture capital funds.
Sec. 902. Advisers of SBICs and private funds.
Sec. 903. Relationship to State law.

        TITLE X--DISCLOSURE MODERNIZATION AND SIMPLIFICATION ACT

Sec. 1001. Summary page for form 10-K.
Sec. 1002. Improvement of regulation S-K.
Sec. 1003. Study on modernization and simplification of regulation S-K.

              TITLE XI--ENCOURAGING EMPLOYEE OWNERSHIP ACT

Sec. 1101. Increased threshold for disclosures relating to compensatory 
              benefit plans.

     TITLE I--BUSINESS RISK MITIGATION AND PRICE STABILIZATION ACT

     SEC. 101. MARGIN REQUIREMENTS.

       (a) Commodity Exchange Act Amendment.--Section 4s(e) of the 
     Commodity Exchange Act (7 U.S.C. 6s(e)), as added by section 
     731 of the Dodd-Frank Wall Street Reform and Consumer 
     Protection Act, is amended by adding at the end the following 
     new paragraph:
       ``(4) Applicability with respect to counterparties.--The 
     requirements of paragraphs (2)(A)(ii) and (2)(B)(ii), 
     including the initial and variation margin requirements 
     imposed by rules adopted pursuant to paragraphs (2)(A)(ii) 
     and (2)(B)(ii), shall not apply to a swap in which a 
     counterparty qualifies for an exception under section 
     2(h)(7)(A), or an exemption issued under section 4(c)(1) from 
     the requirements of section 2(h)(1)(A) for cooperative 
     entities as defined in such exemption, or satisfies the 
     criteria in section 2(h)(7)(D).''.
       (b) Securities Exchange Act Amendment.--Section 15F(e) of 
     the Securities Exchange Act of 1934 (15 U.S.C. 78o-10(e)), as 
     added by section 764(a) of the Dodd-Frank Wall Street Reform 
     and Consumer Protection Act, is amended by adding at the end 
     the following new paragraph:
       ``(4) Applicability with respect to counterparties.--The 
     requirements of paragraphs (2)(A)(ii) and (2)(B)(ii) shall 
     not apply to a security-based swap in which a counterparty 
     qualifies for an exception under section 3C(g)(1) or 
     satisfies the criteria in section 3C(g)(4).''.

     SEC. 102. IMPLEMENTATION.

       The amendments made by this title to the Commodity Exchange 
     Act shall be implemented--
       (1) without regard to--
       (A) chapter 35 of title 44, United States Code; and
       (B) the notice and comment provisions of section 553 of 
     title 5, United States Code;
       (2) through the promulgation of an interim final rule, 
     pursuant to which public comment will be sought before a 
     final rule is issued; and
       (3) such that paragraph (1) shall apply solely to changes 
     to rules and regulations, or proposed rules and regulations, 
     that are limited to and directly a consequence of such 
     amendments.

             TITLE II--TREATMENT OF AFFILIATE TRANSACTIONS

     SEC. 201. TREATMENT OF AFFILIATE TRANSACTIONS.

       (a) In General.--
       (1) Commodity exchange act amendment.--Section 
     2(h)(7)(D)(i) of the Commodity Exchange Act (7 U.S.C. 
     2(h)(7)(D)(i)) is amended to read as follows:
       ``(i) In general.--An affiliate of a person that qualifies 
     for an exception under subparagraph (A) (including affiliate 
     entities predominantly engaged in providing financing for the 
     purchase of the merchandise or manufactured goods of the 
     person) may qualify for the exception only if the affiliate 
     enters into the swap to hedge or mitigate the commercial risk 
     of the person or other affiliate of the person that is not a 
     financial entity, provided that if the hedge or mitigation of 
     such commercial risk is addressed by entering into a swap 
     with a swap dealer or major swap participant, an appropriate 
     credit support measure or other mechanism must be 
     utilized.''.
       (2) Securities exchange act of 1934 amendment.--Section 
     3C(g)(4)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 
     78c-3(g)(4)(A)) is amended to read as follows:
       ``(A) In general.--An affiliate of a person that qualifies 
     for an exception under paragraph (1) (including affiliate 
     entities predominantly engaged in providing financing for the 
     purchase of the merchandise or manufactured goods of the 
     person) may qualify for the exception only if the affiliate 
     enters into the security-based swap to hedge or mitigate the 
     commercial risk of the person or other affiliate of the 
     person that is not a financial entity, provided that if the 
     hedge or mitigation such commercial risk is addressed by 
     entering into a security-based swap with a security-based 
     swap dealer or major security-based swap participant, an 
     appropriate credit support measure or other mechanism must be 
     utilized.''.
       (b) Applicability of Credit Support Measure Requirement.--
     The requirements in section 2(h)(7)(D)(i) of the Commodity 
     Exchange Act and section 3C(g)(4)(A) of the Securities 
     Exchange Act of 1934, as amended by subsection (a), requiring 
     that a credit support measure or other mechanism be utilized 
     if the transfer of commercial risk referred to in such 
     sections is addressed by entering into a swap with a swap 
     dealer or major swap participant or a security-based swap 
     with a security-based swap dealer or major security-based 
     swap participant, as appropriate, shall not apply with 
     respect to swaps or security-based swaps, as appropriate, 
     entered into before the date of the enactment of this Act.

   TITLE III--HOLDING COMPANY REGISTRATION THRESHOLD EQUALIZATION ACT

     SEC. 301. REGISTRATION THRESHOLD FOR SAVINGS AND LOAN HOLDING 
                   COMPANIES.

       The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) 
     is amended--
       (1) in section 12(g)--
       (A) in paragraph (1)(B), by inserting after ``is a bank'' 
     the following: ``, a savings and loan holding company (as 
     defined in section 10 of the Home Owners' Loan Act),''; and
       (B) in paragraph (4), by inserting after ``case of a bank'' 
     the following: ``, a savings and loan holding company (as 
     defined in section 10 of the Home Owners' Loan Act),''; and
       (2) in section 15(d), by striking ``case of bank'' and 
     inserting the following: ``case of a bank, a savings and loan 
     holding company (as defined in section 10 of the Home Owners' 
     Loan Act),''.

 TITLE IV--SMALL BUSINESS MERGERS, ACQUISITIONS, SALES, AND BROKERAGE 
                           SIMPLIFICATION ACT

     SEC. 401. REGISTRATION EXEMPTION FOR MERGER AND ACQUISITION 
                   BROKERS.

       Section 15(b) of the Securities Exchange Act of 1934 (15 
     U.S.C. 78o(b)) is amended by adding at the end the following:
       ``(13) Registration exemption for merger and acquisition 
     brokers.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     an M&A broker shall be exempt from registration under this 
     section.
       ``(B) Excluded activities.--An M&A broker is not exempt 
     from registration under this paragraph if such broker does 
     any of the following:
       ``(i) Directly or indirectly, in connection with the 
     transfer of ownership of an eligible privately held company, 
     receives, holds, transmits, or has custody of the funds or 
     securities to be exchanged by the parties to the transaction.
       ``(ii) Engages on behalf of an issuer in a public offering 
     of any class of securities that is registered, or is required 
     to be registered, with the Commission under section 12 or 
     with respect to which the issuer files, or is required to 
     file, periodic information, documents, and reports under 
     subsection (d).
       ``(C) Rule of construction.--Nothing in this paragraph 
     shall be construed to limit any other authority of the 
     Commission to exempt any person, or any class of persons, 
     from any provision of this title, or from any provision of 
     any rule or regulation thereunder.
       ``(D) Definitions.--In this paragraph:
       ``(i) Control.--The term `control' means the power, 
     directly or indirectly, to direct the management or policies 
     of a company, whether through ownership of securities, by 
     contract, or otherwise. There is a presumption of control for 
     any person who--

       ``(I) is a director, general partner, member or manager of 
     a limited liability company, or officer exercising executive 
     responsibility (or has similar status or functions);
       ``(II) has the right to vote 20 percent or more of a class 
     of voting securities or the power to sell or direct the sale 
     of 20 percent or more of a class of voting securities; or
       ``(III) in the case of a partnership or limited liability 
     company, has the right to receive upon dissolution, or has 
     contributed, 20 percent or more of the capital.

       ``(ii) Eligible privately held company.--The term `eligible 
     privately held company' means a company that meets both of 
     the following conditions:

       ``(I) The company does not have any class of securities 
     registered, or required to be registered, with the Commission 
     under section 12 or with respect to which the company files, 
     or is required to file, periodic information, documents, and 
     reports under subsection (d).
       ``(II) In the fiscal year ending immediately before the 
     fiscal year in which the services of the M&A broker are 
     initially engaged with respect to the securities transaction, 
     the company meets either or both of the following conditions 
     (determined in accordance with the historical financial 
     accounting records of the company):

       ``(aa) The earnings of the company before interest, taxes, 
     depreciation, and amortization are less than $25,000,000.
       ``(bb) The gross revenues of the company are less than 
     $250,000,000.
       ``(iii) M&A broker.--The term `M&A broker' means a broker, 
     and any person associated with a broker, engaged in the 
     business of effecting securities transactions solely in 
     connection with the transfer of ownership of an eligible 
     privately held company, regardless of whether the broker acts 
     on behalf of a seller or buyer, through the purchase, sale, 
     exchange, issuance, repurchase, or redemption of, or a 
     business combination involving, securities or assets of the 
     eligible privately held company, if the broker reasonably 
     believes that--

       ``(I) upon consummation of the transaction, any person 
     acquiring securities or assets of the eligible privately held 
     company, acting alone or in concert, will control and, 
     directly or indirectly, will be active in the management of 
     the eligible privately held company or the business conducted 
     with the assets of the eligible privately held company; and
       ``(II) if any person is offered securities in exchange for 
     securities or assets of the eligible privately held company, 
     such person will,

[[Page H73]]

     prior to becoming legally bound to consummate the 
     transaction, receive or have reasonable access to the most 
     recent year-end balance sheet, income statement, statement of 
     changes in financial position, and statement of owner's 
     equity of the issuer of the securities offered in exchange, 
     and, if the financial statements of the issuer are audited, 
     the related report of the independent auditor, a balance 
     sheet dated not more than 120 days before the date of the 
     offer, and information pertaining to the management, 
     business, results of operations for the period covered by the 
     foregoing financial statements, and material loss 
     contingencies of the issuer.

       ``(E) Inflation adjustment.--
       ``(i) In general.--On the date that is 5 years after the 
     date of the enactment of this paragraph, and every 5 years 
     thereafter, each dollar amount in subparagraph (D)(ii)(II) 
     shall be adjusted by--

       ``(I) dividing the annual value of the Employment Cost 
     Index For Wages and Salaries, Private Industry Workers (or 
     any successor index), as published by the Bureau of Labor 
     Statistics, for the calendar year preceding the calendar year 
     in which the adjustment is being made by the annual value of 
     such index (or successor) for the calendar year ending 
     December 31, 2014; and
       ``(II) multiplying such dollar amount by the quotient 
     obtained under subclause (I).

       ``(ii) Rounding.--Each dollar amount determined under 
     clause (i) shall be rounded to the nearest multiple of 
     $100,000.''.

     SEC. 402. EFFECTIVE DATE.

       This Act and any amendment made by this Act shall take 
     effect on the date that is 90 days after the date of the 
     enactment of this Act.

    TITLE V--SWAP DATA REPOSITORY AND CLEARINGHOUSE INDEMNIFICATION 
                              CORRECTIONS

     SEC. 501. REPEAL OF INDEMNIFICATION REQUIREMENTS.

       (a) Derivatives Clearing Organizations.--Section 5b(k)(5) 
     of the Commodity Exchange Act (7 U.S.C. 7a-1(k)(5)) is 
     amended to read as follows:
       ``(5) Confidentiality agreement.--Before the Commission may 
     share information with any entity described in paragraph (4), 
     the Commission shall receive a written agreement from each 
     entity stating that the entity shall abide by the 
     confidentiality requirements described in section 8 relating 
     to the information on swap transactions that is provided.''.
       (b) Swap Data Repositories.--Section 21(d) of the Commodity 
     Exchange Act (7 U.S.C. 24a(d)) is amended to read as follows:
       ``(d) Confidentiality Agreement.--Before the swap data 
     repository may share information with any entity described in 
     subsection (c)(7), the swap data repository shall receive a 
     written agreement from each entity stating that the entity 
     shall abide by the confidentiality requirements described in 
     section 8 relating to the information on swap transactions 
     that is provided.''.
       (c) Security-Based Swap Data Repositories.--Section 
     13(n)(5)(H) of the Securities Exchange Act of 1934 (15 U.S.C. 
     78m(n)(5)(H)) is amended to read as follows:
       ``(H) Confidentiality agreement.--Before the security-based 
     swap data repository may share information with any entity 
     described in subparagraph (G), the security-based swap data 
     repository shall receive a written agreement from each entity 
     stating that the entity shall abide by the confidentiality 
     requirements described in section 24 relating to the 
     information on security-based swap transactions that is 
     provided.''.
       (d) Effective Date.--The amendments made by this Act shall 
     take effect as if enacted as part of the Dodd-Frank Wall 
     Street Reform and Consumer Protection Act (Public Law 111-
     203) on July 21, 2010.

TITLE VI--IMPROVING ACCESS TO CAPITAL FOR EMERGING GROWTH COMPANIES ACT

     SEC. 601. FILING REQUIREMENT FOR PUBLIC FILING PRIOR TO 
                   PUBLIC OFFERING.

       Section 6(e)(1) of the Securities Act of 1933 (15 U.S.C. 
     77f(e)(1)) is amended by striking ``21 days'' and inserting 
     ``15 days''.

     SEC. 602. GRACE PERIOD FOR CHANGE OF STATUS OF EMERGING 
                   GROWTH COMPANIES.

       Section 6(e)(1) of the Securities Act of 1933 (15 U.S.C. 
     77f(e)(1)) is further amended by adding at the end the 
     following: ``An issuer that was an emerging growth company at 
     the time it submitted a confidential registration statement 
     or, in lieu thereof, a publicly filed registration statement 
     for review under this subsection but ceases to be an emerging 
     growth company thereafter shall continue to be treated as an 
     emerging market growth company for the purposes of this 
     subsection through the earlier of the date on which the 
     issuer consummates its initial public offering pursuant to 
     such registrations statement or the end of the 1-year period 
     beginning on the date the company ceases to be an emerging 
     growth company.''.

     SEC. 603. SIMPLIFIED DISCLOSURE REQUIREMENTS FOR EMERGING 
                   GROWTH COMPANIES.

       Section 102 of the Jumpstart Our Business Startups Act 
     (Public Law 112-106) is amended by adding at the end the 
     following:
       ``(d) Simplified Disclosure Requirements.--With respect to 
     an emerging growth company (as such term is defined under 
     section 2 of the Securities Act of 1933):
       ``(1) Requirement to include notice on form s-1.--Not later 
     than 30 days after the date of enactment of this subsection, 
     the Securities and Exchange Commission shall revise its 
     general instructions on Form S-1 to indicate that a 
     registration statement filed (or submitted for confidential 
     review) by an issuer prior to an initial public offering may 
     omit financial information for historical periods otherwise 
     required by regulation S-X (17 C.F.R. 210.1-01 et seq.) as of 
     the time of filing (or confidential submission) of such 
     registration statement, provided that--
       ``(A) the omitted financial information relates to a 
     historical period that the issuer reasonably believes will 
     not be required to be included in the Form S-1 at the time of 
     the contemplated offering; and
       ``(B) prior to the issuer distributing a preliminary 
     prospectus to investors, such registration statement is 
     amended to include all financial information required by such 
     regulation S-X at the date of such amendment.
       ``(2) Reliance by issuers.--Effective 30 days after the 
     date of enactment of this subsection, an issuer filing a 
     registration statement (or submitting the statement for 
     confidential review) on Form S-1 may omit financial 
     information for historical periods otherwise required by 
     regulation S-X (17 C.F.R. 210.1-01 et seq.) as of the time of 
     filing (or confidential submission) of such registration 
     statement, provided that--
       ``(A) the omitted financial information relates to a 
     historical period that the issuer reasonably believes will 
     not be required to be included in the Form S-1 at the time of 
     the contemplated offering; and
       ``(B) prior to the issuer distributing a preliminary 
     prospectus to investors, such registration statement is 
     amended to include all financial information required by such 
     regulation S-X at the date of such amendment.''.

         TITLE VII--SMALL COMPANY DISCLOSURE SIMPLIFICATION ACT

     SEC. 701. EXEMPTION FROM XBRL REQUIREMENTS FOR EMERGING 
                   GROWTH COMPANIES AND OTHER SMALLER COMPANIES.

       (a) Exemption for Emerging Growth Companies.--Emerging 
     growth companies are exempted from the requirements to use 
     Extensible Business Reporting Language (XBRL) for financial 
     statements and other periodic reporting required to be filed 
     with the Commission under the securities laws. Such companies 
     may elect to use XBRL for such reporting.
       (b) Exemption for Other Smaller Companies.--Issuers with 
     total annual gross revenues of less than $250,000,000 are 
     exempt from the requirements to use XBRL for financial 
     statements and other periodic reporting required to be filed 
     with the Commission under the securities laws. Such issuers 
     may elect to use XBRL for such reporting. An exemption under 
     this subsection shall continue in effect until--
       (1) the date that is five years after the date of enactment 
     of this Act; or
       (2) the date that is two years after a determination by the 
     Commission, by order after conducting the analysis required 
     by section 702, that the benefits of such requirements to 
     such issuers outweigh the costs, but no earlier than three 
     years after enactment of this Act.
       (c) Modifications to Regulations.--Not later than 60 days 
     after the date of enactment of this Act, the Commission shall 
     revise its regulations under parts 229, 230, 232, 239, 240, 
     and 249 of title 17, Code of Federal Regulations, to reflect 
     the exemptions set forth in subsections (a) and (b).

     SEC. 702. ANALYSIS BY THE SEC.

       The Commission shall conduct an analysis of the costs and 
     benefits to issuers described in section 701(b) of the 
     requirements to use XBRL for financial statements and other 
     periodic reporting required to be filed with the Commission 
     under the securities laws. Such analysis shall include an 
     assessment of--
       (1) how such costs and benefits may differ from the costs 
     and benefits identified by the Commission in the order 
     relating to interactive data to improve financial reporting 
     (dated January 30, 2009; 74 Fed. Reg. 6776) because of the 
     size of such issuers;
       (2) the effects on efficiency, competition, capital 
     formation, and financing and on analyst coverage of such 
     issuers (including any such effects resulting from use of 
     XBRL by investors);
       (3) the costs to such issuers of--
       (A) submitting data to the Commission in XBRL;
       (B) posting data on the website of the issuer in XBRL;
       (C) software necessary to prepare, submit, or post data in 
     XBRL; and
       (D) any additional consulting services or filing agent 
     services;
       (4) the benefits to the Commission in terms of improved 
     ability to monitor securities markets, assess the potential 
     outcomes of regulatory alternatives, and enhance investor 
     participation in corporate governance and promote capital 
     formation; and
       (5) the effectiveness of standards in the United States for 
     interactive filing data relative to the standards of 
     international counterparts.

     SEC. 703. REPORT TO CONGRESS.

       Not later than one year after the date of enactment of this 
     Act, the Commission shall provide the Committee on Financial 
     Services of the House of Representatives and the Committee on 
     Banking, Housing, and Urban Affairs of the Senate a report 
     regarding--

[[Page H74]]

       (1) the progress in implementing XBRL reporting within the 
     Commission;
       (2) the use of XBRL data by Commission officials;
       (3) the use of XBRL data by investors;
       (4) the results of the analysis required by section 702; 
     and
       (5) any additional information the Commission considers 
     relevant for increasing transparency, decreasing costs, and 
     increasing efficiency of regulatory filings with the 
     Commission.

     SEC. 704. DEFINITIONS.

       As used in this title, the terms ``Commission'', ``emerging 
     growth company'', ``issuer'', and ``securities laws'' have 
     the meanings given such terms in section 3 of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78c).

   TITLE VIII--RESTORING PROVEN FINANCING FOR AMERICAN EMPLOYERS ACT

     SEC. 801. RULES OF CONSTRUCTION RELATING TO COLLATERALIZED 
                   LOAN OBLIGATIONS.

       Section 13(c)(2) of the Bank Holding Company Act of 1956 
     (12 U.S.C. 1851(c)(2)) is amended--
       (1) by striking ``A banking entity or nonbank financial 
     company supervised by the Board'' and inserting the 
     following:
       ``(A) General conformance period.--A banking entity or 
     nonbank financial company supervised by the Board''; and
       (2) by adding at the end the following:
       ``(B) Conformance period for certain collateralized loan 
     obligations.--
       ``(i) In general.--Notwithstanding subparagraph (A), a 
     banking entity or nonbank financial company supervised by the 
     Board shall bring its activities related to or investments in 
     a debt security of a collateralized loan obligation issued 
     before January 31, 2014, into compliance with the 
     requirements of subsection (a)(1)(B) and any applicable rules 
     relating to subsection (a)(1)(B) not later than July 21, 
     2019.
       ``(ii) Collateralized loan obligation.--For purposes of 
     this subparagraph, the term `collateralized loan obligation' 
     means any issuing entity of an asset-backed security, as 
     defined in section 3(a)(77) of the Securities Exchange Act of 
     1934 (15 U.S.C. 78c(a)(77)), that is comprised primarily of 
     commercial loans.''.

                   TITLE IX--SBIC ADVISERS RELIEF ACT

     SEC. 901. ADVISERS OF SBICS AND VENTURE CAPITAL FUNDS.

       Section 203(l) of the Investment Advisers Act of 1940 (15 
     U.S.C. 80b-3(l)) is amended--
       (1) by striking ``No investment adviser'' and inserting the 
     following:
       ``(1) In general.--No investment adviser''; and
       (2) by adding at the end the following:
       ``(2) Advisers of sbics.--For purposes of this subsection, 
     a venture capital fund includes an entity described in 
     subparagraph (A), (B), or (C) of subsection (b)(7) (other 
     than an entity that has elected to be regulated or is 
     regulated as a business development company pursuant to 
     section 54 of the Investment Company Act of 1940).''.

     SEC. 902. ADVISERS OF SBICS AND PRIVATE FUNDS.

       Section 203(m) of the Investment Advisers Act of 1940 (15 
     U.S.C. 80b-3(m)) is amended by adding at the end the 
     following:
       ``(3) Advisers of sbics.--For purposes of this subsection, 
     the assets under management of a private fund that is an 
     entity described in subparagraph (A), (B), or (C) of 
     subsection (b)(7) (other than an entity that has elected to 
     be regulated or is regulated as a business development 
     company pursuant to section 54 of the Investment Company Act 
     of 1940) shall be excluded from the limit set forth in 
     paragraph (1).''.

     SEC. 903. RELATIONSHIP TO STATE LAW.

       Section 203A(b)(1) of the Investment Advisers Act of 1940 
     (15 U.S.C. 80b-3a(b)(1)) is amended--
       (1) in subparagraph (A), by striking ``or'' at the end;
       (2) in subparagraph (B), by striking the period at the end 
     and inserting ``; or''; and
       (3) by adding at the end the following:
       ``(C) that is not registered under section 203 because that 
     person is exempt from registration as provided in subsection 
     (b)(7) of such section, or is a supervised person of such 
     person.''.

        TITLE X--DISCLOSURE MODERNIZATION AND SIMPLIFICATION ACT

     SEC. 1001. SUMMARY PAGE FOR FORM 10-K.

       Not later than the end of the 180-day period beginning on 
     the date of the enactment of this Act, the Securities and 
     Exchange Commission shall issue regulations to permit issuers 
     to submit a summary page on form 10-K (17 C.F.R. 249.310), 
     but only if each item on such summary page includes a cross-
     reference (by electronic link or otherwise) to the material 
     contained in form 10-K to which such item relates.

     SEC. 1002. IMPROVEMENT OF REGULATION S-K.

       Not later than the end of the 180-day period beginning on 
     the date of the enactment of this Act, the Securities and 
     Exchange Commission shall take all such actions to revise 
     regulation S-K (17 C.F.R. 229.10 et seq.)--
       (1) to further scale or eliminate requirements of 
     regulation S-K, in order to reduce the burden on emerging 
     growth companies, accelerated filers, smaller reporting 
     companies, and other smaller issuers, while still providing 
     all material information to investors;
       (2) to eliminate provisions of regulation S-K, required for 
     all issuers, that are duplicative, overlapping, outdated, or 
     unnecessary; and
       (3) for which the Commission determines that no further 
     study under section 1003 is necessary to determine the 
     efficacy of such revisions to regulation S-K.

     SEC. 1003. STUDY ON MODERNIZATION AND SIMPLIFICATION OF 
                   REGULATION S-K.

       (a) Study.--The Securities and Exchange Commission shall 
     carry out a study of the requirements contained in regulation 
     S-K (17 C.F.R. 229.10 et seq.). Such study shall--
       (1) determine how best to modernize and simplify such 
     requirements in a manner that reduces the costs and burdens 
     on issuers while still providing all material information;
       (2) emphasize a company by company approach that allows 
     relevant and material information to be disseminated to 
     investors without boilerplate language or static requirements 
     while preserving completeness and comparability of 
     information across registrants; and
       (3) evaluate methods of information delivery and 
     presentation and explore methods for discouraging repetition 
     and the disclosure of immaterial information.
       (b) Consultation.--In conducting the study required under 
     subsection (a), the Commission shall consult with the 
     Investor Advisory Committee and the Advisory Committee on 
     Small and Emerging Companies.
       (c) Report.--Not later than the end of the 360-day period 
     beginning on the date of enactment of this Act, the 
     Commission shall issue a report to the Congress containing--
       (1) all findings and determinations made in carrying out 
     the study required under subsection (a);
       (2) specific and detailed recommendations on modernizing 
     and simplifying the requirements in regulation S-K in a 
     manner that reduces the costs and burdens on companies while 
     still providing all material information; and
       (3) specific and detailed recommendations on ways to 
     improve the readability and navigability of disclosure 
     documents and to discourage repetition and the disclosure of 
     immaterial information.
       (d) Rulemaking.--Not later than the end of the 360-day 
     period beginning on the date that the report is issued to the 
     Congress under subsection (c), the Commission shall issue a 
     proposed rule to implement the recommendations of the report 
     issued under subsection (c).
       (e) Rule of Construction.--Revisions made to regulation S-K 
     by the Commission under section 1002 shall not be construed 
     as satisfying the rulemaking requirements under this section.

              TITLE XI--ENCOURAGING EMPLOYEE OWNERSHIP ACT

     SEC. 1101. INCREASED THRESHOLD FOR DISCLOSURES RELATING TO 
                   COMPENSATORY BENEFIT PLANS.

       Not later than 60 days after the date of the enactment of 
     this Act, the Securities and Exchange Commission shall revise 
     section 230.701(e) of title 17, Code of Federal Regulations, 
     so as to increase from $5,000,000 to $10,000,000 the 
     aggregate sales price or amount of securities sold during any 
     consecutive 12-month period in excess of which the issuer is 
     required under such section to deliver an additional 
     disclosure to investors. The Commission shall index for 
     inflation such aggregate sales price or amount every 5 years 
     to reflect the change in the Consumer Price Index for All 
     Urban Consumers published by the Bureau of Labor Statistics, 
     rounding to the nearest $1,000,000.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Pennsylvania (Mr. Fitzpatrick) and the gentleman from Minnesota (Mr. 
Ellison) each will control 20 minutes.
  The Chair recognizes the gentleman from Pennsylvania.


                             General Leave

  Mr. FITZPATRICK. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks and to include extraneous materials for the Record on 
H.R. 37, currently under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Pennsylvania?
  There was no objection.
  Mr. FITZPATRICK. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, thank you for the time and for the opportunity to again 
bring this bill before the House as a piece of a larger strategy that 
will bring greater jobs and more opportunity to the American people and 
to American families.
  I am proud to once again sponsor the Promoting Job Creation and 
Reducing Small Business Burdens Act, a bill which includes the language 
of pro-growth measures debated and passed last Congress in the 
Financial Services Committee and in the Agriculture Committee.
  While these proposals aren't flashy, they represent bipartisan 
efforts to remove the burdensome weight of one-size-fits-all regulation 
that has, sadly, become the norm for Washington. While often well-
intentioned, many of

[[Page H75]]

these top-down regulations hurt small businesses and emerging 
businesses in critical sectors like biotechnology.
  As the Representative of one of the Nation's fastest-growing biotech 
regions just outside Philadelphia, I have experienced firsthand the 
impact of this vibrant industry in southeastern Pennsylvania. Employing 
thousands of hardworking men and women, this sector harnesses the best 
of our STEM community and what it has to offer in our efforts to create 
treatments and cures for devastating diseases from diabetes and 
Alzheimer's to cancer and HIV/AIDS.
  For these businesses, government overregulation often treats the 
little guy the same as big multinational corporations, tying them in 
costly red tape at the expense of their ability to research, to 
develop, to innovate, and to hire.
  This bill takes a meaningful step toward ensuring smarter, tailored 
regulations which unleash businesses, like biotech companies in my 
district, to invest in themselves and in their workers. But biotech 
workers wouldn't be the only ones to benefit. So would employees at 
retailers like grocery chain Wegmans.
  Employing 44,000 people, including 8,200 in the Commonwealth of 
Pennsylvania, Wegmans is constantly ranked among the Nation's best 
places to work by Fortune magazine, a grade they attribute to their 
employee ownership opportunities, which allow their workers to have a 
stake in the business that they work for.
  However, a little-known piece of regulatory overreach is hamstringing 
these opportunities, an overreach recognized and adjusted by this 
legislation. By creating a more realistic regulatory environment, this 
bill provides relief to businesses looking to retain their best 
employees, while allowing workers to invest in the company and in their 
own futures.
  In lieu of the failed Washington efforts of the past which tried to 
simply legislate more jobs into existence, the Promoting Job Creation 
and Reducing Small Business Burdens Act is very much a jobs bill 
because it addresses these job-creating needs. By reining in 
government's heavyhanded approach to regulating the economy, we can 
provide a bipartisan path toward getting people back to work, helping 
businesses grow, and ensuring hardworking Americans keep more of their 
hard-earned money.

                              {time}  1315

  Mr. Speaker, the challenges facing our economy are steep. However, 
they are no more daunting than the challenges we have overcome in the 
past in the way that Americans have always approached adversity: head 
on, with American ingenuity, practicality, and a commitment of leaders 
on both sides of the aisle to act in the best interests of the working 
men and women we represent.
  The ushering in of this new Congress gives us the perfect opportunity 
for Members of both parties to unite around efforts to put the American 
worker back in the driver's seat and to establish a bipartisan playbook 
for advancing common goals. Now is the time, and the Promoting Job 
Creation and Reducing Small Business Burdens Act is an important part 
of that process. I urge my colleagues to support this legislation.
  I reserve the balance of my time.

                                         House of Representatives,


                                     Committee on Agriculture,

                                  Washington, DC, January 7, 2015.
     Hon. Jeb Hensarling,
     Chairman, Committee on Financial Services, Rayburn House 
         Office Building, Washington, DC.
       Dear Chairman Hensarling: I am writing concerning H.R. 37. 
     ``Promoting Job Creation and Reducing Small Business Burdens 
     Act.''
       As you know, provisions of H.R. 37 are within the 
     jurisdiction of the Committee on Agriculture. In order to 
     expedite floor consideration of the bill, the Committee on 
     Agriculture will forgo action on H.R. 37. Further, the 
     Committee will not oppose the bill's consideration on the 
     suspension calendar. This is also being done with the 
     understanding that it does not in any way prejudice the 
     Committee with respect to the appointment of conferees or its 
     jurisdictional prerogatives on this or similar legislation.
       I would appreciate your response to this letter, confirming 
     this understanding with respect to H.R. 37, and would ask 
     that a copy of our exchange of letters on this matter be 
     included in the Congressional Record during Floor 
     consideration.
           Sincerely.
                                               K. Michael Conaway,
     Chairman.
                                  ____

                                         House of Representatives,


                              Committee on Financial Services,

                                  Washington, DC, January 7, 2015.
     Hon. K. Michael Conaway,
     Chairman, Committee on Agriculture, Longworth House Office 
         Building, Washington, DC.
       Dear Chairman Conaway: Thank you for your letter of even 
     date herewith regarding H.R. 37, the Promoting Job Creation 
     and Reducing Small Business Burdens Act.
       I am most appreciative of your decision to forego 
     consideration of H.R. 37 so that it may move expeditiously to 
     the House floor. I acknowledge that although you are waiving 
     formal consideration of the bill, the Committee on 
     Agriculture is in no way waiving its jurisdiction over any 
     subject matter contained in the bill that falls within its 
     jurisdiction. In addition, if a conference is necessary on 
     this legislation, I will support any request that your 
     committee be represented therein.
       Finally, I shall be pleased to include your letter and this 
     letter in the Congressional Record during floor consideration 
     of H.R. 37.
           Sincerely.
                                                   Jeb Hensarling,
                                                         Chairman.

  Mr. ELLISON. Mr. Speaker, I yield myself as much time as I may 
consume.
  What is before us today is a mini omnibus bill that contains, 
actually, 11 separate pieces of legislation, some of which may not be 
controversial but some of which are incredibly controversial and do not 
belong in this legislation. This is not an emergency. We have a new 
Congress. This bill should go through the regular order. Unlike the 
TRIA bill we just talked about, this bill is a bill which should and 
must go through the regular order, and it is absolutely inappropriate 
for the suspension calendar.
  Our Republican friends would have us believe that this is just some 
benign piece of legislation, yet this bill contains not only procedural 
problems but substantive problems which have never seen the light of 
day in any committee. Some of the legislation has only been public for 
about 24 hours, and what is particularly frightening is that the text 
of the bill has changed at least three times since Tuesday. We just got 
started yesterday in talking about the importance of regular order, and 
we are already violating those claims and promises.
  Mr. Speaker, the House of Representatives should return to regular 
order with this piece of legislation, and I urge my colleagues to 
reject it. Regular order, whereby legislation is debated at a hearing, 
marked up by a committee, and then finally considered by the whole 
House, is the process by which we vet legislation. That is not going on 
right here and right now, and there is no good reason for it. We do 
this to ensure that we fully understand the changing law. Nevertheless, 
Republicans have come here to suspend the rules and to consider a 
package of 11 bills which will ease the oversight of Wall Street firms, 
large banks, multinational corporations, and certain brokers.
  It should be pointed out right now that the ranking member of the 
House Financial Services Committee, Maxine Waters, who is unable to be 
in Washington due to personal matters she has to address, has issued a 
call to reject this piece of legislation for many of the reasons I am 
articulating now.
  I think it is also important to point out that there are 52 Members 
of Congress who were sworn in yesterday and who represent more than 30 
million Americans who will have to vote on bills affecting a collateral 
firm's pledge, when they borrow money, affecting what information must 
be disclosed about certain brokers and financial statements of firms, 
without the opportunity to offer changes. This is the absolute 
antithesis of regular order, and this bill is not appropriate. We urge 
a ``no.''
  I would like to talk a little bit about the specific reasons this 
bill is bad. Members should know that this is not the identical bill 
that came through in the fall. It has very important changes. If you 
voted for it last fall, that is no reason to vote for this bill now.
  First, the Volcker rule. This bill undercuts an important part of the 
Dodd-Frank Wall Street Reform and Consumer Protection Act. The Volcker 
rule was intended to prevent deposit-taking banks--banks that use money 
insured by the Federal Government, the people's money--from making bets

[[Page H76]]

and using taxpayer-insured funds. The Federal Reserve went out of its 
way to try to ease the transition to a safer system, but this bill 
would give megabanks an additional 2 years, totaling 5 years, to sell 
off certain securities in which they retain ownership rights--5 more 
years of risk, 5 more years of massive profit-taking. This provision, 
which almost certainly juices the profits of big, megabanks like 
Citigroup and JPMorgan, has never been vetted. The public has not even 
had a day to review the text. It is wrong that bills that help Wall 
Street and multinational corporations get fast-tracked on day 2 of this 
Congress while bills that help working families get slowed up for 
years, literally.
  Just last month, Republicans successfully handed Citigroup and other 
megabanks a multibillion-dollar gift by repealing another reform 
measure, known as the ``swaps push-out,'' which was intended to prevent 
another Great Recession. The repeal of that provision allowed the 
megabanks to continue to borrow money from the Federal Reserve lending 
window, which is currently at about zero percent interest, to finance 
their risky derivatives. Experts have weighed in. Let me read for the 
Record the statement by the CEO of Better Markets:

       ``It's all about the bonus pool,'' said Dennis Kelleher, 
     president and CEO of Better Markets, a financial reform 
     nonprofit. ``The attack on the Volcker rule has been nonstop 
     because proprietary trading is about big-time bets that 
     result in big-time bonuses. Wall Street has been fighting it 
     from day one, and they're not going to stop.''

  If you believe that there are things in this mini omnibus, or this 
megabill, that might be worth your support, understand that this 
particular provision has not been vetted anywhere. For that reason 
alone they are literally trying to sneak it in, and you should vote 
against it.
  Also, this particular bill includes three other provisions that 
weaken the Dodd-Frank Wall Street Reform and Consumer Protection Act. 
These provisions take away the authority of regulators who are charged 
with ensuring that everybody plays by the same rules so that, if at 
some point in the future, we find out that our financial system is 
threatened, our regulators will be unable to take decisive action to 
fix the problems that they can fix today.
  After witnessing the effect that one type of derivative--the credit 
default swap--had in spreading losses from the subprime mortgage market 
around the world, I would like to know why our first order of business 
in this Congress is to roll back the financial reforms that this 
Congress deliberated on and passed over an 18-month period following 
the 2008 financial crisis.
  This bill undermines investor protections. It includes three 
provisions that have the potential to leave investors worse off than 
they are today. As we proclaim small investors and workers and all of 
these things, why are we undermining investor protections? In one 
instance, the bill exempts individuals who would broker a merger of a 
privately owned company to be exempt from SEC regulations. Since this 
legislation passed in a previous Congress, the SEC has taken action to 
make this unnecessary. However, if we pass this bill today, we will 
undermine a few basic investor protections that the SEC has retained.
  For example, the SEC determined that bad actors, such as convicted 
securities fraudsters, should not be able to take advantage of a carve-
out. However, by voting ``yes,'' you are saying that it is okay for 
people convicted of fraud to sell other things, like franchises or the 
restaurant down the street. Another provision would allow 75 percent of 
all public companies to no longer report their financial statements in 
computer readable formats. When everything is online today and when 
investors rely on computers to crunch the financials of various 
companies, this bill comes across as a huge step backwards.
  My colleagues want to address this bill, and I think it is important 
that they do. So, at this point, I am going to urge a ``no'' vote.
  I reserve the balance of my time.
  Mr. FITZPATRICK. Mr. Speaker, I now yield 4 minutes to the gentleman 
from Texas (Mr. Conaway), who is the chairman of the Agriculture 
Committee.
  Mr. CONAWAY. I thank my colleague from Pennsylvania for allowing me 
to speak on his bill.
  Mr. Speaker, I rise today in support of H.R. 37, the Promoting Job 
Creation and Reducing Small Business Burdens Act.
  I am especially proud of and would like to highlight the past work of 
the Agriculture Committee on the three titles of this bill under its 
jurisdiction: the Business Risk Mitigation and Price Stabilization Act; 
a provision on the treatment of affiliate transactions; and a provision 
regarding swap data repository and clearinghouse indemnification 
correction.
  As I noted in the debate earlier today on TRIA, the Business Risk 
Mitigation and Price Stabilization Act is legislation to clarify 
Congress' intent to exempt non-financial businesses from a misguided 
regulatory requirement to post margin requirements on their hedging 
activities. Clearing and margining, while appropriate for some 
transactions, are not appropriate for end users hedging real-world 
commercial risks. Their hedging activities are not large enough to 
present a systemic risk, and a margin requirement represents a 
significant and needless expense with little value to the overall 
financial system.
  Title I puts in statute protections for American businesses. To grow 
our economy, businesses should use their scarce capital to buy new 
equipment, to hire more workers, to build new facilities, and to invest 
in the future. They cannot do that if they are required to hold money 
in margin accounts to fulfill a misguided regulation.
  Similarly, title II, regarding the treatment of interaffiliate 
transactions, was also passed by the House multiple times in the 113th 
Congress, and it will provide additional certainty to American 
businesses. It will do so by preventing the redundant regulation of 
harmless interaffiliate transactions that would unnecessarily tie up 
the working capital of companies, with no added protections for the 
market or benefits to our consumers. Today, businesses across the 
Nation rely on the ability to centralize their hedging activities. This 
consolidation of a hedging portfolio across a corporate group allows 
businesses to reduce costs, to simplify their financial dealings, and 
to reduce their counterparty credit risk. Title II of this bill will 
allow American businesses to continue utilizing this efficient, time-
tested model.
  Finally, title V of H.R. 37 provides much-needed corrections to the 
swap data repository and clearinghouse indemnification requirements of 
Dodd-Frank. Currently, Dodd-Frank requires a foreign regulator 
requesting information from a U.S. swap data repository or derivatives 
clearing organization to provide a written agreement stating it will 
abide by certain confidentiality requirements and will indemnify the 
U.S. Commissions for any expenses arising from litigation relating to 
the request for that information.
  The concept of indemnification--requiring a party to contractually 
agree to pay for another party's possible litigation expenses--is 
established within U.S. tort law and does not exist in many foreign 
jurisdictions. Thus, it is not possible for some foreign regulators to 
agree to these indemnification requirements. This requirement threatens 
to make data-sharing arrangements with foreign regulators unworkable.
  H.R. 37 mitigates this problem by simply removing the indemnification 
provisions in Dodd-Frank while maintaining the prerequisite written 
agreement requiring certain confidentiality obligations will be met. 
So, rather than stripping down Dodd-Frank, as we are so often accused 
of doing, this change would actually serve to enhance market 
transparency and risk mitigation by ensuring that regulators and market 
participants have access to a global set of swap market data.
  As chairman of the House Committee on Agriculture and as a cosponsor 
of each of these three bills in the 113th Congress, I appreciate Mr. 
Fitzpatrick's work in bringing these provisions together in a package 
that reduces the regulatory burdens and that promotes economic growth. 
I strongly urge my colleagues to support the legislation.


[[Page H77]]


                                         House of Representatives,


                                     Committee on Agriculture,

                                  Washington, DC, January 7, 2015.
       Mr. Speaker: I am pleased to see three bills that the House 
     Committee on Agriculture passed in the 113th Congress 
     included as Titles I, II, and V of H.R. 37, ``Promoting Job 
     Creation and Reducing Small Business Burdens Act.''
       H.R. 634, H.R. 5471, and H.R. 742, which were also included 
     as Subtitles A, B, and C of Title III of H.R. 4413, 
     ``Customer Protection and End-User Relief Act,'' from the 
     113th Congress, provide important protections to end-users 
     from costly margining requirements and needless regulatory 
     burdens; as well as correct an unworkable provision in Dodd-
     Frank which required foreign regulators to break their local 
     laws in order to access the market data they needed to 
     enforce their laws.
       In support of these titles, I would like to request that 
     the pertinent portions of the Committee on Agriculture report 
     to accompany H.R. 4413 in the 113th Congress be included in 
     the appropriate place in the Congressional Record.
           Sincerely,
                                               K. Michael Conaway,
     Chairman.
                                  ____


                        Title 3--End-User Relief


        subtitle A--end-user exemption from margin requirements

     Section 311--End-user margin requirements
       Section 311 amends Section 4s(e) of the Commodity Exchange 
     Act (CEA) as added by Section 731 of the Dodd-Frank Act to 
     provide an explicit exemption from margin requirements for 
     swap transactions involving end-users that qualify for the 
     clearing exception under 2(h)(7)(A).
       ``End-users'' are thousands of companies across the United 
     States who utilize derivatives to hedge risks associated with 
     their day-to-day operations, such as fluctuations in the 
     prices of raw materials. Because these businesses do not pose 
     systemic risk, Congress intended that the Dodd-Frank Act 
     provide certain exemptions for end-users to ensure they were 
     not unduly burdened by new margin and capital requirements 
     associated with their derivatives trades that would hamper 
     their ability to expand and create jobs.
       Indeed, Title VII of the Dodd-Frank Act includes an 
     exemption for non-financial end-users from centrally clearing 
     their derivatives trades. This exemption permits end-users to 
     continue trading directly with a counterparty, (also known as 
     trading ``bilaterally,'' or over-the-counter (OTC)) which 
     means their swaps are negotiated privately between two 
     parties and they are not executed and cleared using an 
     exchange or clearinghouse. Generally, it is common for non-
     financial end-users, such as manufacturers, to avoid posting 
     cash margin for their OTC derivative trades. End-users 
     generally will not post margin because they are able to 
     negotiate such terms with their counterparties due to the 
     strength of their own balance sheet or by posting non-cash 
     collateral, such as physical property. End-users typically 
     seek to preserve their cash and liquid assets for 
     reinvestment in their businesses. In recognition of this 
     common practice, the Dodd-Frank Act included an exemption 
     from margin requirements for end-users for OTC trades.
       Section 731 of the Dodd-Frank Act (and Section 764 with 
     respect to security-based swaps) requires margin requirements 
     be applied to swap dealers and major swap participants for 
     swaps that are not centrally cleared. For swap dealers and 
     major swap participants that are banks, the prudential 
     banking regulators (such as the Federal Reserve or Federal 
     Deposit Insurance Corporation) are required to set the margin 
     requirements. For swap dealers and major swap participants 
     that are not banks, the CFTC is required to set the margin 
     requirements. Both the CFTC and the banking regulators have 
     issued their own rule proposals establishing margin 
     requirements pursuant to Section 731.
       Following the enactment of the Dodd-Frank Act in July of 
     2010, uncertainty arose regarding whether this provision 
     permitted the regulators to impose margin requirements on 
     swap dealers when they trade with end-users, which could then 
     result in either a direct or indirect margin requirement on 
     end-users. Subsequently, Senators Blanche Lincoln and Chris 
     Dodd sent a letter to then-Chairmen Barney Frank and Collin 
     Peterson on June 30, 2010, to set forth and clarify 
     congressional intent, stating:
       The legislation does not authorize the regulators to impose 
     margin on end-users, those exempt entities that use swaps to 
     hedge or mitigate commercial risk. If regulators raise the 
     costs of end-user transactions, they may create more risk. It 
     is imperative that the regulators do not unnecessarily divert 
     working capital from our economy into margin accounts, in a 
     way that would discourage hedging by end-users or impair 
     economic growth.
       In addition, statements in the legislative history of 
     section 731 (and Section 764) suggests that Congress did not 
     intend, in enacting this section, to impose margin 
     requirements on nonfinancial end-users engaged in hedging 
     activities, even in cases where they entered into swaps with 
     swap entities.
       In the CFTC's proposed rule on margin, it does not require 
     margin for un-cleared swaps when non-bank swap dealers 
     transact with non-financial end-users. However, the 
     prudential banking regulators proposed rules would require 
     margin be posted by non-financial end-users above certain 
     established thresholds when they trade with swap dealers that 
     are banks. Many of end-users' transactions occur with swap 
     dealers that are banks, so the banking regulators' proposed 
     rule is most relevant, and therefore of most concern, to end-
     users.
       By the prudential banking regulators' own terms, their 
     proposal to require margin stems directly from what they view 
     to be a legal obligation under Title VII. The plain language 
     of section 731 provides that the Agencies adopt rules for 
     covered swap entities imposing margin requirements on all 
     non-cleared swaps. Despite clear congressional intent, those 
     sections do not, by their terms, exclude a swap with a 
     counterparty, that is a commercial end-user. By providing an 
     explicit exemption under Title VII through enactment of this 
     provision, the prudential regulators will no longer have a 
     perceived legal obligation, and the congressional intent they 
     acknowledge in their proposed rule will be implemented.
       The Committee notes that in September of 2013, the 
     International Organization of Securities Commissions (IOSCO) 
     and the Bank of International Settlements published their 
     final recommendations for margin requirements for uncleared 
     derivatives. Representatives from a number of U.S. 
     regulators, including the CFTC and the Board of Governors 
     of the Federal Reserve participated in the development of 
     those margin requirements, which are intended to set 
     baseline international standards for margin requirements. 
     It is the intent of the Committee that any margin 
     requirements promulgated under the authority provided in 
     Section 4s of the Commodity Exchange Act should be 
     generally consistent with the international margin 
     standards established by IOSCO.
       On March 14, 2013, at a hearing entitled ``Examining 
     Legislative Improvements to Title VII of the Dodd-Frank 
     Act,'' the following testimony was provided to the Committee 
     with respect to provisions included in Section 311:
       In approving the Dodd-Frank Act, Congress made clear that 
     end-users were not to be subject to margin requirements. 
     Nonetheless, regulations proposed by the Prudential Banking 
     Regulators could require end-users to post margin. This stems 
     directly from what they view to be a legal obligation under 
     Title VII. While the regulations proposed by the CFTC are 
     preferable, they do not provide end-users with the certainty 
     that legislation offers. According to a Coalition for 
     Derivatives End-Users survey, a 3% initial margin requirement 
     could reduce capital spending by as much as $5.1 to $6.7 
     billion among S&P 500 companies alone and cost 100,000 to 
     130,000 jobs. To shed some light on Honeywell's potential 
     exposure to margin requirements, we had approximately $2 
     billion of hedging contracts outstanding at year-end that 
     would be defined as a swap under Dodd-Frank. Applying 3% 
     initial margin and 10% variation margin implies a potential 
     margin requirement of $260 million. Cash deposited in a 
     margin account cannot be productively deployed in our 
     businesses and therefore detracts from Honeywell's financial 
     performance and ability to promote economic growth and 
     protect American jobs.--Mr. James E. Colby, Assistant 
     Treasurer, Honeywell International Inc.
       On May 21, 2013, at a hearing entitled ``The Future of the 
     CFTC: Market Perspectives,'' Mr. Stephen O'Connor, Chairman, 
     ISDA, provided the following testimony with respect to 
     provisions included in Section 311:
       Perhaps most importantly, we do not believe that initial 
     margin will contribute to the shared goal of reducing 
     systemic risk and increasing systemic resilience. When robust 
     variation margin practices are employed, the additional step 
     of imposing initial margin imposes an extremely high cost on 
     both market participants and on systemic resilience with very 
     little countervailing benefit. The Lehman and AIG situations 
     highlight the importance of variation margin. AIG did not 
     follow sound variation margin practices, which resulted in 
     dangerous levels of credit risk building up, ultimately 
     leading to its bailout. Lehman, on the other hand, posted 
     daily variation margin, and while its failure caused shocks 
     in many markets, the variation margin prevented outsized 
     losses in the OTC derivatives markets. While industry and 
     regulators agree on a robust variation margin regime 
     including all appropriate products and counterparties, the 
     further step of moving to mandatory IM [initial margin] does 
     not stand up to any rigorous cost-benefit analysis.
       Based on the extensive background that accompanies the 
     statutory change provided explicitly in Section 311, the 
     Committee intends that initial and variation margin 
     requirements cannot be imposed on uncleared swaps entered 
     into by cooperative entities if they similarly qualify for 
     the CFTC's cooperative exemption with respect to cleared 
     swaps. Cooperative entities did not cause the financial 
     crisis and should not be required to incur substantial new 
     costs associated with posting initial and variation margin to 
     counterparties. In the end, these costs will be borne by 
     their members in the form of higher prices and more limited 
     access to credit, especially in underserved markets, such as 
     in rural America. Therefore, the Committee's clear intent 
     when drafting Section 311 was to prohibit the CFTC and 
     prudential regulators, including the Farm Credit 
     Administration, from imposing margin requirements on 
     cooperative entities.

[[Page H78]]

                   SUBTITLE B--INTER-AFFILIATE SWAPS

     Sec. 321--Treatment of affiliate transactions
       ``Inter-affiliate'' swaps are contracts executed between 
     entities under common corporate ownership. Section 321 would 
     amend the Commodity Exchange Act to provide an exemption for 
     inter-affiliate swaps from the clearing and execution 
     requirements of the Dodd-Frank Act so long as the swap 
     transaction hedges or mitigates the commercial risk of an 
     entity that is not a financial entity. The section also 
     requires that an ``appropriate credit support measure or 
     other mechanism'' be utilized between the entity seeking to 
     hedge against commercial risk if it transacts with a swap 
     dealer or major swap participant, but this credit support 
     measure requirement is effective prospectively from the date 
     H.R. 4413 is enacted into law.
       Importantly, with respect to Section 321's use of the 
     phrase ``credit support measure or other mechanism,'' the 
     Committee unequivocally does not intend for the CFTC to 
     interpret this statutory language as a mandate to require 
     initial or variation margin for swap transactions. The 
     Committee intends for the CFTC to recognize that credit 
     support measures and other mechanisms have been in use 
     between counterparties and affiliates engaged in swap 
     transactions for many years in different formats, and 
     therefore, there is no need to engage in a rulemaking to 
     define such broad terminology.
       Section 321 originated from the need to provide relief for 
     a parent company that has multiple affiliates within a single 
     corporate group. Individually, these affiliates may seek to 
     offset their business risks through swaps. However, rather 
     than having each affiliate separately go to the market to 
     engage in a swap with a dealer counterparty, many companies 
     will employ a business model in which only a single or 
     limited number of entities, such as a treasury hedging 
     center, face swap dealers. These designated external facing 
     entities will then allocate the transaction and its risk 
     mitigating benefits to the affiliate seeking to mitigate its 
     underlying risk.
       Companies that use this business model argue that it 
     reduces the overall credit risk a corporate group poses to 
     the market because they can net their positions across 
     affiliates, reducing the number of external facing 
     transactions overall. In addition, it permits a company to 
     enhance its efficiency by centralizing its risk management 
     expertise in a single or limited number of affiliates.
       Should these inter-affiliate transactions be treated as all 
     other swaps, they could be subject to clearing, execution and 
     margin requirements. Companies that use inter-affiliate swaps 
     are concerned that this could substantially increase their 
     costs, without any real reduction in risk in light of the 
     fact that these swaps are purely for internal use. For 
     example, these swaps could be ``double-margined''--when the 
     centralized entity faces an external swap dealer, and then 
     again when the same transaction is allocated internally to 
     the affiliate that sought to hedge the risk.
       The uncertainty that exists regarding the treatment of 
     inter-affiliate swaps spans multiple rulemakings that have 
     been proposed or that will be proposed pursuant to the Dodd-
     Frank Act. Section 321 provides certainty and clarity as to 
     what inter-affiliate transactions are and how they are not to 
     be regulated as swaps when the parties to the transaction are 
     under common control.
       On March, 14, 2013, at a hearing entitled ``Examining 
     Legislative Improvements to Title VII of the Dodd-Frank 
     Act,'' the following testimony was provided with respect to 
     efforts to address the problem with inter-affiliate swaps:
       [I]nter-affiliate swaps provide important benefits to 
     corporate groups by enabling centralized management of 
     market, liquidity, capital and other risks inherent in their 
     businesses and allowing these groups to realize hedging 
     efficiencies. Since the swaps are between affiliates, rather 
     than with external counterparties, they pose no systemic risk 
     and therefore there are no significant gains to be achieved 
     by requiring them to be cleared or subjecting them to margin 
     posting requirements. In addition, these swaps are not market 
     transactions and, as a result, requiring market participants 
     to report them or trade them on an exchange or swap execution 
     facility provides no transparency benefits to the market--if 
     anything, it would introduce useless noise that would make 
     Dodd-Frank's transparency rules less helpful.--Hon. Kenneth 
     E. Bentsen, Acting President and CEO, SIFMA
       This legislation would ensure that inter-affiliate 
     derivatives trades, which take place between affiliated 
     entities within a corporate group, do not face the same 
     demanding regulatory requirements as market-facing swaps. The 
     legislation would also ensure that end-users are not 
     penalized for using central hedging centers to manage their 
     commercial risk. There are two serious problems facing end-
     users that need addressing. First, under the CFTC's proposed 
     inter-affiliate swap rule, financial end-users would have to 
     clear purely internal trades between affiliates unless they 
     posted variation margin between the affiliates or 
     met specific requirements for an exception [i]f these end-
     users have to post variation margin, there is little point 
     to exempting inter-affiliate trades from clearing 
     requirements, as the costs could be similar. And let's not 
     forget the larger point--internal end-user trades do not 
     create systemic risk and, hence, should not be regulated 
     the same as those trades that do. Second, many end-users--
     approximately one-quarter of those we surveyed--execute 
     swaps through an affiliate. This of course makes sense, as 
     many companies find it more efficient to manage their risk 
     centrally, to have one affiliate trading in the open 
     market, instead of dozens or hundreds of affiliates making 
     trades in an uncoordinated fashion. Using this type of 
     hedging unit centralizes expertise, allows companies to 
     reduce the number of trades with the street and improves 
     pricing. These advantages led me to centralize the 
     treasury function at Westinghouse while I was there. 
     However, the regulators' interpretation of the Dodd-Frank 
     Act confronts non-financial end-users with a choice: 
     either dismantle their central hedging centers and find a 
     new way to manage risk, or clear all of their trades. 
     Stated another way, this problem threatens to deny the 
     end-user clearing exception to those end-users who have 
     chosen to hedge their risk in an efficient, highly-
     effective and risk-reducing way. It is difficult to 
     believe that this is the result Congress hoped to 
     achieve.--Ms. Marie N. Hollein, C.T.P., President and CEO, 
     Financial Executives International, on behalf of the 
     Coalition for Derivatives End-Users


     subtitle c--indemnification requirements related to swap data 
                              repositories

     Section 331--Indemnification requirements
       Section 331 strikes the indemnification requirements found 
     in ``Sections 725 and 728 of the Dodd-Frank Act related to 
     swap data gathered by swap data repositories (SDRs) and 
     derivatives clearing organizations (DCOs). The section does 
     maintain, however, that before an SDR, DCO, or the CFTC 
     shares information with domestic or international regulators, 
     they have to receive a written agreement stating that the 
     regulator will abide by certain confidentiality agreements.
       Swap data repositories serve as electronic warehouses for 
     data and information regarding swap transactions. 
     Historically, SDRs have regularly shared information with 
     foreign regulators as a means to cooperate, exchange views 
     and share information related to OTC derivatives CCPs and 
     trade repositories. Prior to Dodd-Frank, international 
     guidelines required regulators to maintain the 
     confidentiality of information obtained from SDRs, which 
     facilitated global information sharing that is critical to 
     international regulators' ability to monitor for systemic 
     risk.
       Under Sections 725 and 728 of the Dodd-Frank Act, when a 
     foreign regulator requests information from a U.S registered 
     SDR or DCO, the SDR or DCO is required to receive a written 
     agreement from the foreign regulator stating that it will 
     abide by certain confidentiality requirements and will 
     ``indemnify'' the Commissions for any expenses arising from 
     litigation relating to the request for information. In short, 
     the concept of ``indemnification''--requiring a party to 
     contractually agree to pay for another party's possible 
     litigation expenses--is only well established in U.S. tort 
     law, and does not exist in practice or in legal concept in 
     foreign jurisdictions.
       These indemnification provisions--which were not included 
     in the financial reform bill passed by the House of 
     Representatives in December 2009--threaten to make data 
     sharing arrangements with foreign regulators unworkable. 
     Foreign regulators will most likely refuse to indemnify U.S. 
     regulators for litigation expenses in exchange for access to 
     data. As a result, foreign regulators may establish their own 
     data repositories and clearing organizations to ensure they 
     have access to data they need to perform their supervisory 
     duties. This would lead to the creation of multiple 
     databases, needlessly duplicative data collection efforts, 
     and the possibility of inconsistent or incomplete data being 
     collected and maintained across multiple jurisdictions.
       In testimony before the House Committee on Financial 
     Services in March of 2012, the then-Director of International 
     Affairs for the SEC, Mr. Ethiopis Tafara, endorsed a 
     legislative solution to the problem, stating that:
       The SEC recommends that Congress consider removing the 
     indemnification requirement added by the Dodd-Frank Act . . . 
     the indemnification requirement interferes with access to 
     essential information, including information about the cross-
     border OTC derivatives markets. In removing the 
     indemnification requirement, Congress would assist the SEC, 
     as well as other U.S. regulators, in securing the access it 
     needs to data held in global trade repositories. Removing the 
     indemnification requirement would address a significant issue 
     of contention with our foreign counterparts . . .
       At the same hearing, the then-General Counsel for the CFTC, 
     Mr. Dan Berkovitz, acknowledged that they too have received 
     growing concerns from foreign regulators, but that they 
     intend to issue interpretive guidance, stating that ``access 
     to swap data reported to a trade repository that is 
     registered with the CFTC will not be subject to the 
     indemnification provisions of the Commodity Exchange Act if 
     such trade repository is regulated pursuant to foreign law 
     and the applicable requested data is reported to the trade 
     repository pursuant to foreign law.''
       To provide clarity to the marketplace and remove any legal 
     barriers to swap data being easily shared with various 
     domestic and foreign regulatory agencies, this section would 
     remove the indemnification requirements found in Sections 725 
     and 728 of the Dodd-Frank Act related to swap data gathered 
     by SDRs and DCOs.

[[Page H79]]

       On March 14, 2013, at a hearing entitled ``Examining 
     Legislative Improvements to Title VII of the Dodd-Frank 
     Act,'' Mr. Larry Thompson, Managing Director and General 
     Counsel, the Depository Trust and Clearing Corporation, 
     provided the following testimony with respect to provisions 
     of H.R. 742, which were included in Section 331:
       The Swap Data Repository and Clearinghouse Indemnification 
     Correction Act of 2013 would make U.S. law consistent with 
     existing international standards by removing the 
     indemnification provisions from sections 728 and 763 of Dodd-
     Frank. DTCC strongly supports this legislation, which we 
     believe represents the only viable solution to the unintended 
     consequences of indemnification. H.R. 742 is necessary 
     because the statutory language in Dodd-Frank leaves little 
     room for regulators to act without U.S. Congressional 
     intervention. This point was reinforced in the CFTC/SEC 
     January 2012 Joint Report on International Swap Regulation, 
     which noted that the Commissions ``are working to develop 
     solutions that provide access to foreign regulators in a 
     manner consistent with the DFA and to ensure access to 
     foreign-based information.'' It indicates legislation is 
     needed, saying that ``Congress may determine that a 
     legislative amendment to the indemnification provision is 
     appropriate.'' H.R. 742 would send a clear message to the 
     international community that the United States is strongly 
     committed to global data sharing and determined to avoid 
     fragmenting the current global data set for over-the-counter 
     (OTC) derivatives. By amending and passing this legislation 
     to ensure that technical corrections to indemnification are 
     addressed, Congress will help create the proper environment 
     for the development of a global trade repository system to 
     support systemic risk management and oversight.

  Mr. ELLISON. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman 
from Michigan (Mr. Kildee), who is a member of the Financial Services 
Committee and an active participant on that committee.
  Mr. KILDEE. I thank my friend for yielding.
  Mr. Speaker, here we are on the second day of the 114th Congress. It 
has not yet been 24 hours since Members of this Congress were sworn in. 
What we have before us is a package of 11 complex bills with 
significant implications for our financial system--and I want to make 
this very clear, as my friend pointed out--some of which have not gone 
through the process of scrutiny by the Financial Services Committee or 
the regular legislative process. Some of it has and some of it has not, 
but it has not been at all by this Congress. This is not an emergency. 
Unlike TRIA, which expired before we left, there is not a time-
sensitive nature of this question.
  It is really important to me--and especially as now a second-term 
Member--to remember what it was like to show up here and to have things 
put in front of us that we had not really had a chance to fully and 
thoroughly vet.

                              {time}  1330

  The regular order--as was spoken about yesterday--it is critical for 
the minority to have access to the process, and it is only done through 
the regular legislative process.
  This legislation just continues to give and give and give to Wall 
Street.
  Despite the fact that my principal objection is with the lack of 
adherence to regular order and the process of legislating, 
substantively, there are problems with this legislation. Wall Street 
banks, whose banks and traders recklessly drove this country into a 
financial crisis, are being rewarded yet again, and I can't accept it. 
I can't support it.
  What is really interesting to me is that here we are, less than 24 
hours since we have been in Congress, yet in the last Congress, when 
Main Street had its needs, when unemployed people couldn't get Federal 
unemployment benefits, we couldn't get a hearing; we couldn't get a 
vote on the floor of the House for legislation that was bipartisan, 
that had an equal number of Democrats and Republicans supporting it.
  When Wall Street asks, we suspend the rules in less than a day 
without taking a breath and move to fit their needs into our schedule. 
But when Main Street needs help, Congress didn't give an answer. This 
is not right.
  We have got to get back to regular order. We talk about it all the 
time. We hear it on both sides. This is not a good start for the 114th 
Congress, to suspend the rules and deal with new language that many of 
us have just seen this morning, to pass legislation that is a gift-
wrapped present to Wall Street. I can't support it. I urge my 
colleagues to reject this legislation.
  Mr. FITZPATRICK. Mr. Speaker, I yield 3 minutes to the gentleman from 
Virginia (Mr. Hurt), a member of the Financial Services Committee.
  Mr. HURT of Virginia. Mr. Speaker, I rise in support of the Promoting 
Job Creation and Reducing Small Business Burdens Act. I would like to 
thank Mr. Fitzpatrick and Chairmen Hensarling and Garrett for their 
leadership on increasing access to capital for small businesses.
  As we begin a new Congress, I am glad to see that the House will 
continue its laser focus on enacting policies to help spur job creation 
throughout the country. Even though we have seen modest economic 
growth, I continue to hear from my constituents about the impacts of 
unnecessary and overly burdensome regulations on job creation, 
especially regulations that disproportionately affect smaller public 
companies and those considering accessing capital in the public 
markets.
  One such requirement is related to the use of eXtensible Business 
Reporting Language, XBRL, which was mandated by the SEC in 2009. While 
the SEC's rule is well intended, this requirement has become another 
example of a regulation where the costs outweigh the potential 
benefits. These small companies expend tens of thousands of dollars or 
more complying with the regulation, yet there is evidence that less 
than 10 percent of investors actually use XBRL, further diminishing its 
potential benefits.
  That is why last Congress, the gentlewoman from Alabama, 
Representative Sewell, and I authored the bipartisan Small Company 
Disclosure Simplification Act, which is incorporated into title VII of 
H.R. 37. I would like to thank Representative Sewell for her diligent 
work on this legislation, which passed the Financial Services Committee 
last Congress with bipartisan support.
  This provision will provide an optional exemption for emerging growth 
companies and smaller public companies from the requirement to file 
their information in XBRL with the SEC, in addition to the information 
that they already file.
  Additionally, this title requires the SEC to perform a cost-benefit 
analysis on the rule's impact on smaller public companies, something it 
failed to adequately address in the original rule, and also to provide 
additional information to Congress on how the SEC and the market are 
using XBRL.
  Whether a supporter or a sceptic of XBRL, these provisions will help 
provide a pathway for the SEC to focus on developing a system of 
disclosure for smaller companies that eliminates unnecessary costs 
while achieving greater benefits.
  I believe H.R. 37 offers a practical step forward on these regulatory 
requirements in line with the intent of the original JOBS Act, ensuring 
that our regulatory structure is not disproportionately burdening 
smaller companies and disincentivizing innovative startups from 
accessing the public markets.
  I ask my colleagues to join me in voting ``yes'' on H.R. 37 so that 
we can continue to promote capital access in the public markets and 
spur job growth in communities all across this great country.
  Mr. ELLISON. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman 
from Massachusetts (Mr. Lynch), who is the former subcommittee ranking 
member on the Oversight Committee and is an active member on the 
Financial Services Committee.
  Mr. LYNCH. I thank the gentleman for yielding.
  Mr. Speaker, if I may, I would like to just amplify some of the 
concerns raised by the gentleman from Michigan (Mr. Kildee) in his 
remarks about the fact that here we are, just the second day of this 
Congress, and we have a group of 11 bills that have been rolled up. 
There are many new provisions here that have never seen a hearing, 
unfortunately. This is not the open process that we had hoped for and 
had spoken about just yesterday.
  We have had very limited opportunity to review some of these new 
sections. Again, they have not had a hearing. They have not gone 
through regular order.
  H.R. 37 contains 11 separate bills, some of which I support, but some 
of which I oppose strongly. Portions of H.R. 37 have entirely new 
provisions that most Members have not had the opportunity to thoroughly 
analyze.

[[Page H80]]

  For example, title XI of this bill modifies SEC rule 701 on stock-
sharing. It allows private companies to compensate their employees up 
to $10 million in company stock without having to provide the employees 
with certain basic financial disclosures about the company. I voted 
against a similar bill, H.R. 4571, in the last Congress when it was 
marked up.
  But I also want to point out, that while I strongly support employees 
receiving equity benefits from the firms in which they work, those 
benefits should be tangible and real. We all remember Enron and 
WorldCom, where the company, as compensation to those employees, 
actually pressured them into buying company stock and did not provide 
full information to them. And eventually, those shares were worthless. 
So you had thousands of workers being partly compensated in company 
stock, and the stock was worth zero.
  Now we are going to expand this opportunity from $5 million to $10 
million a year that each company will be able to pay their employees 
with company stock, and they don't have any obligation because part of 
this bill does not require them to make any type of a disclosure, Mr. 
Speaker. And there is no opportunity for those employees to get 
accurate financial information about whether the stock that they are 
being paid with is worth anything. It is just a bad road to go down.
  In closing, this bill uses the veneer of job creation to provide 
special treatment for the well-connected corporations, mergers and 
acquisition advisers, and financial institutions while doing very 
little to address the needs of those workers.
  With that, I urge my colleagues to vote ``no'' on the bill.
  Mr. FITZPATRICK. Mr. Speaker, I yield 3 minutes to the gentleman from 
Arkansas (Mr. Crawford), a member of the Agriculture Committee.
  Mr. CRAWFORD. I thank my colleague from Pennsylvania (Mr. 
Fitzpatrick) for his leadership on this.
  Mr. Speaker, I rise in strong support of H.R. 37 and would 
particularly like to comment on title V. In order to provide market 
transparency, the Dodd-Frank law requires post-trade reporting to Swap 
Data Repositories, or SDRs, as they are called, so that regulators and 
market participants have access to realtime market data that help 
identify systemic risk in the financial system. So far, we have made 
great strides in reaching this goal, but unfortunately, a provision in 
the law threatens to undermine our progress unless we fix it.
  Currently, Dodd-Frank includes a provision requiring a foreign 
regulator to indemnify a U.S.-based SDR for any expenses arising from 
litigation relating to a request for market data. Unlike the rest of 
the world, though, the concept of indemnification is only established 
within U.S. tort law. As a result, foreign regulators have been 
reluctant to comply with this provision, and international regulatory 
coordination is being thwarted.

  While the intent of the provision was to protect market 
confidentiality, in practice, it threatens to fragment global data on 
swap markets. Without effective coordination between international 
regulators and SDRs, monitoring and mitigating global systemic risk is 
severely limited.
  H.R. 37 fixes this problem by removing the indemnification provisions 
in Dodd-Frank. This has broad bipartisan support, and a separate bill 
to do this was unanimously approved last year by the House Ag Committee 
and the House Financial Services Committee. Additionally, last year, 
the SEC testified to the Financial Services Committee that a 
legislative solution was needed, saying: ``In removing the 
indemnification requirement, Congress would assist the SEC, as well as 
other regulators, in securing the access it needs to data held in 
global trade repositories.''
  If left unresolved, the indemnification provision in Dodd-Frank has 
the potential to effectively reduce transparency and undo the great 
progress already being made through the cooperative efforts of more 
than 50 regulators worldwide. In passing this legislation, we will 
ensure that regulators will have access to a global set of swap market 
data, which is essential to maintaining the highest degree of market 
transparency and risk mitigation. I strongly urge my colleagues to vote 
``yes'' on this bill.
  Mr. ELLISON. Mr. Speaker, may I inquire, how much time does the 
Democratic side have remaining?
  The SPEAKER pro tempore. The gentleman from Minnesota has 7 minutes 
remaining.
  Mr. ELLISON. At this time, Mr. Speaker, I yield 2 minutes to the 
gentleman from Massachusetts (Mr. Capuano), who was the ranking member 
on the Financial Services Committee for the Subcommittee on Housing and 
Insurance.
  Mr. CAPUANO. I thank the gentleman for yielding.
  Mr. Speaker, on the last bill, the TRIA bill, when we were still 
arguing about it, some people on the other side accused people like me, 
who support the TRIA bill, of being in favor of corporate welfare. Now, 
as a liberal on most issues, I don't think many people would confuse me 
with someone who was generally in favor of corporate welfare, but I 
will take it.
  On this bill--because I am going to oppose it on one basic 
provision--I am going to be called ``against jobs.''
  Rhetoric is cheap. Titles of bills don't mean anything. And in this 
bill, particularly the provision that was just spoken about, title V--
there are plenty of things in this bill that I like that I would be 
happy to vote for. Bring them up separately, and I will. There are a 
couple of things here that I don't like too much, but we can find 
common ground on it. But all of that pales when you look at one 
provision in here that guts the Volcker rule.
  It is simple: in 2006, collateralized debt obligations pretty much 
brought the world economy to its knees and hurt not just Wall Street, 
but hurt me, hurt my neighbors, hurt my family, and hurt a lot of 
average Americans because we allowed our financial service industry to 
gamble with somebody else's money.
  And of course they gambled. They won a lot of money. And then when 
they lost, they didn't lose their money. They lost our money, and we 
had to come in with a bailout.
  This is a corporate bailout--not with taxpayer money, but with 
depositor money, depositors who are not interested in giving their 
money to an institution so that they can gamble it on risky items that 
they will see no benefit from. That is what the Volcker rule says: if 
you want to gamble, use your money. Good luck. Don't gamble with my 
money unless I say so.
  That is all the Volker rule says. It has worked pretty well. The 
economy is recovering. Everybody knows that. Everybody agrees with it.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. ELLISON. I yield the gentleman an additional 30 seconds.
  Mr. CAPUANO. This bill will allow three, only three of our Wall 
Street institutions--which control 70 percent of the collateralized 
loan obligation business; three of them control 70 percent of the 
business--to gamble with depositors' money again without those 
depositors having a say in it.
  When they collapse and depositors lose their money, those of you who 
vote for this bill will have to explain it to them. This is 
unnecessary. It is inappropriate. And we should not be voting for this 
bill, mostly because of that single provision.
  Mr. FITZPATRICK. Mr. Speaker, I would just note that the provision 
that the gentleman from Massachusetts (Mr. Capuano) is referring to was 
heard in committee. The title of the bill passed in the committee with 
well over 50 votes. It passed unanimously on the floor of the House by 
voice vote, and not a single Democrat rose to object to the bill, but 
that was last year.
  Right now, Mr. Speaker, I yield 3 minutes to the gentleman from 
Arkansas (Mr. Womack).
  Mr. WOMACK. Mr. Speaker, I thank the gentleman from Pennsylvania (Mr. 
Fitzpatrick) for bringing this collection of bills to the House floor.
  I would also like to express my gratitude to Representatives Himes, 
Delaney, and Wagner for working with me on one of the underlying bills, 
the bipartisan H.R. 801, in the last Congress.
  Mr. Speaker, in this new Congress, adding jobs to our economy is a 
top priority. And passing the Promoting Job Creation and Reducing Small 
Business Burdens Act is an opportunity for us to create a better 
environment for private sector growth and job creation.

[[Page H81]]

                              {time}  1345

  Title III, also known as H.R. 801, is no exception, and I am proud to 
rise in support of its passage.
  A year ago this month, I came to this floor to speak on the 
underlying bill which passed overwhelmingly in this Chamber 417-4. 
While it is unfortunate the bill was never considered by the Senate, it 
is clear today that in the 114th Congress, its prospects are better.
  Small financial institutions are essential to the communities they 
serve. They have a deep and abiding love for the towns they serve 
because these towns are their towns, and our constituents--small 
business owners, farmers, hardworking Americans--rely on these 
institutions to meet payroll, to purchase equipment, or to buy a car or 
home.
  Unfortunately, Mr. Speaker, these financial institutions have come 
under fire from Washington because of its regulatory overreach, forcing 
them to spend increasing shares of their resources to comply with 
onerous regulations--requirements intended for larger banks--instead of 
having the flexibility they need to serve their communities.
  Let's be clear: small community banks and savings and loan holding 
companies were not the cause of the financial crisis, and I don't 
believe they should be treated as though they were the cause. I am not 
alone. In the 112th Congress, the House and Senate acted to eliminate 
some of these unnecessary burdens by passing the JOBS Act.
  Among other things, the bill raised the registration threshold for 
bank holding companies from 500 to 2,000 shareholders and increased the 
deregistration threshold from 300 to 1,200 shareholders, better 
positioning these banks to increase small business lending and, in 
turn, promote economic growth in our communities; but due to an 
oversight in the JOBS Act, it did not explicitly extend these new 
thresholds to savings and loan holding companies as well.
  As a cosponsor of the JOBS Act, I can say with absolute certainty 
that wasn't our intent, and I subsequently supported report language in 
the approps bill of Financial Services to clarify and ensure that 
savings and loan holding companies should be treated in the same manner 
as bank and bank holding companies. Additionally, Representative Himes 
and I have written to the FCC and asked that they use their authority 
to carry out our original intent.
  In spite of these actions and the House passage of H.R. 801 last 
Congress, we are still without successful resolution to the problem. 
Today's vote can change that, Mr. Speaker, and I urge my colleagues to 
support this bill and the overall legislation.
  Mr. ELLISON. Mr. Speaker, last Congress, H.R. 4167 passed. I voted 
against it, but it is not the same as the language in title VIII which 
is in this bill today, which extends by 2 years the delay we requested, 
totaling 5 years. It is not the same legislation. This bill, title 
VIII, has not passed before. It is new.
  Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Al 
Green).
  Mr. AL GREEN of Texas. Mr. Speaker, my colleague, the Honorable Ted 
Poe, will recognize this name. The Honorable Lee Duggan, a district 
court judge in Houston, Texas, reminded young lawyers that we live in a 
world where it is not enough for things to be right, they must also 
look right, and this bill doesn't look right. It doesn't look right 
when you combine 11 bills into one overnight and then present that to 
the floor without any amendments being available to the bill.
  We should not allow a poison-pill process to develop at the genesis 
of this Congress. If we do it now, we will continue to do it. I think 
we have to concern ourselves not only with these 11 bills, but with the 
many other bills that are to follow. We can never allow this to start 
the new Congress. We should prevent it.
  I would also add this. I am all for doing a lot of things with a 
hurry-up process. I would like to see us do something about minimum 
wage; we are not doing anything about minimum wage at all thus far. I 
would like to see us do something about comprehensive immigration 
reform; that will be a piecemeal deal if it ever becomes a bill.
  Mr. Speaker, I stand with those who believe that the process ought to 
be fair. It ought to favor the openness that allows for amendments. I 
say to you that this is not right, and it doesn't even look right.
  Mr. FITZPATRICK. Mr. Speaker, I reserve the balance of my time.
  Mr. ELLISON. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
Illinois, Jan Schakowsky.
  Ms. SCHAKOWSKY. Mr. Speaker, I thank the gentleman for yielding.
  Mr. Speaker, at the end of last year, over my strenuous objections, 
we wrapped up a big present for Wall Street. We put taxpayers back on 
the hook for losses that are connected to certain derivatives trading, 
among the riskiest bets that banks make.
  Well, Christmas is over, and Hanukkah is over, but the gifts keep on 
coming for Wall Street. Within this bill is another provision that cuts 
at the heart of the Dodd-Frank Wall Street reform legislation. It 
delays a portion of the Volcker rule, which bans federally insured 
banks from making those risky bets or investing in risky funds, 
including packages known as collateralized loan obligations, or CLOs.
  Mortgage-backed securities brought our economy almost crumbling to 
the ground in 2008, and we are still recovering. Taxpayers bailed out 
the big banks; yet for millions of homeowners who were forced from 
their homes and millions of others who are still under water, there 
hasn't been any assistance. People are right to be angry about this, 
and they are right to object to this new giveaway to Wall Street 
interests.
  CLOs are similar to toxic mortgage-backed securities. The only 
difference is that instead of bad mortgages, these packages involve 
junk-rated corporate loans and a mix of other risky assets.
  The Office of the Comptroller of the Currency said last month that 
the corporate debt market is overheating and becoming increasingly 
dangerous, and CLOs are the big reason why. This has all the markings 
of another economy-crushing disaster.
  Who gets the upside if Wall Street is able to continue packaging and 
selling CLOs with taxpayer backing? Wall Street. Who loses if and when 
those bets go wrong? The rest of us. It is heads, Wall Street wins; 
tails, everybody else loses.
  Mr. Speaker, as Dennis Kelleher of Better Markets said, ``The attack 
on the Volcker rule has been nonstop.''
  The SPEAKER pro tempore. The time of the gentlewoman has expired.
  Mr. ELLISON. I yield the gentlewoman an additional 15 seconds.
  Ms. SCHAKOWSKY. Mr. Speaker, the truth is that the American people 
deserve better, and we are tired of really bad Wall Street giveaways 
being tacked on to other legislation. This looks like a Republican 
strategy to put Wall Street over Main Street.
  Mr. FITZPATRICK. Mr. Speaker, I reserve the balance of my time.
  Mr. ELLISON. Mr. Speaker, this big bill may have some things that are 
not bad, but it also contains a bill that delays protection of our 
economy and families from Wall Street gambling, and it should be voted 
down.
  We urge a very strong ``no'' on this bill. Go back, do it right, 
follow the process, regular order, and maybe we could make some 
progress here.
  I yield back the balance of my time.
  Mr. FITZPATRICK. Mr. Speaker, I yield myself such time as I may 
consume.
  The bill before us today is here on the same procedure the Terrorism 
Risk Insurance Act reauthorization was here; we just debated that bill 
on the floor. They are both coming up under a suspension of the rules, 
and TRIA reauthorization last term, like these bills, were debated 
either in committee or on the floor in the full House.
  The distinguished minority whip, in speaking about the TRIA bill, 
said that it is always the right time to do the right thing. In 
addition, he decried the process that delayed the reauthorization of 
TRIA--I agree with him on that--and he said there were well over 250 
votes for the last year and a half for the reauthorization of TRIA.
  I would submit and ask the Record to reflect, Mr. Speaker, the 
provisions of this bill, and we have heard about the 11 provisions, all 
of which went through the committee or the full House.
  Title I amends Dodd-Frank and passed the House 411-12. It was 
introduced as a bipartisan bill, went

[[Page H82]]

through the committee, had a committee hearing, both sides had 
witnesses, and all the questions were asked. There was a markup. At the 
markup, there were amendments. The bill passed the committee. It came 
to the floor of the House and passed 411-12.
  Title II passed the committee 50-10. Title III passed on the full 
House after passing the committee 417-4. Title IV passed the House 422-
0. Each one of these provisions were bipartisan, and they passed in a 
strong fashion on a vote either in the committee or the House.
  Mr. Speaker, just yesterday, we were sent back here. We took the oath 
of office, sent by our constituents to do the right thing, to work 
together where we can, to identify problems, to address those problems, 
and to get stuff done, especially when it regards the American economy, 
small businesses, and the ability to get people to work to create jobs.
  Each one of these titles in this bill identifies a problem in the 
economy, addresses it in a bipartisan way, and the time is now to pass 
this bill.
  I urge my colleagues to vote ``yes'' on H.R. 37, pass the bill and 
send it to the Senate. With that, Mr. Speaker, I yield back the balance 
of my time.
  Ms. JACKSON LEE. Mr. Speaker, I rise in strong opposition to H.R. 37, 
The Promoting Job Creation and Reducing Small Business Burdens Act of 
2015.
  This Trojan Horse legislation is actually a combination of eleven 
separate bills, ten of which were authored by Republican members of the 
Committee.
  I believe that Members should be afforded the opportunity to offer 
amendments and have a full and fair debate on these bills. However, by 
considering this package under Suspension of the Rules, Republicans 
begin the new year by denying Members the opportunity to thoroughly 
debate a measure that will have far-reaching impact.
  Let's be clear: regulators have made tremendous progress in 
implementing the Dodd-Frank Act. The Consumer Financial Protection 
Bureau has already returned $4.6 billion to 15 million consumers who 
have been subjected to unfair and deceptive practices, some of whom 
live in my Congressional District in Houston.
  The CFPB has established a qualified mortgage rule, ensuring that 
borrowers who are extended mortgage credit actually have the ability to 
repay the loan, and has established new rules-of-the-road for mortgage 
servicers.
  In addition, the CFPB has worked with the Department of Defense to 
develop financial protections for service members and veterans, and 
established a national database to aide consumers with complaints about 
debt collectors, credit card companies, and credit rating agencies, 
among others. Let us not turn back the clock on American consumers who 
already have seen the benefits of the CFPB's efforts.
  The Volcker Rule has forced banks to sell-off their standalone 
proprietary trading desks, and banks have shifted away from speculative 
trading to investments in the real economy. Shareholders of U.S. 
corporations now have the ability to have a ``say-on-pay,'' voting to 
approve or disapprove executive compensation.
  In addition Mr. Speaker, the Securities and Exchange Commission (SEC) 
has recovered more than $9.3 billion in civil fines and penalties since 
2011, leveraging enhanced authorities provided by Dodd-Frank. The SEC 
has also established an Office of the Whistleblower to aid them in 
policing securities market violations, which has already received more 
than 6,573 tips from 68 countries. Further, private funds are making 
systemic risk reports to regulators, helping them to understand 
previously opaque risks.
  To implement the Dodd-Frank Act, the CFTC has completed 65 final 
rules, orders, and guidance documents resulting in the registration and 
enhanced oversight of 102 Swap Dealers, two Major Swap Participants, 22 
Swap Execution Facilities, and four Swap Data Repositories. In 
addition, the CFTC has established rules governing mandatory clearing, 
exchange trading, and reporting of the entire $400 trillion notional 
swaps market.
  It should also be noted that since Dodd-Frank's passage, stability in 
the market has led to significant economic growth. Nearly 9.7 million 
private sector payroll jobs have been created since February 2010.
  There are now nearly 900,000 more workers employed in the private 
sector than before recession-related job losses began in early 2008. 
The unemployment rate has fallen by 3.9 percentage points since its 
peak of 10.0 percent in October 2009 and currently stands at 6.1 
percent--its lowest level since September 2008. Real GDP has grown 10.2 
percent since its trough in 2009, and now stands 5.5 percent higher 
than its pre-recession peak in late 2007. That in and of itself is news 
that the media should be discussing.
  Moreover, the housing market is recovering, with home prices rising, 
negative equity falling dramatically, and measures of mortgage distress 
improving. The S&P 500 has risen by 85 percent since July 21, 2010 and 
has recently reached new peaks.
  However, this progress has been regularly stymied by a concerted 
effort by the Majority to underfund regulators' operations, 
relentlessly pressure them to weaken regulations, and otherwise erect 
roadblocks to implementation. As a result, the progress regulators have 
made to implement the law remains precarious.
  I urge my colleagues to reject this legislation and have a full 
debate on its merits.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Pennsylvania (Mr. Fitzpatrick) that the House suspend 
the rules and pass the bill, H.R. 37.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. ELLISON. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this motion will be postponed.

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