[Congressional Record (Bound Edition), Volume 147 (2001), Part 17]
[House]
[Pages 23322-23381]
[From the U.S. Government Publishing Office, www.gpo.gov]



                     TERRORISM RISK PROTECTION ACT

  Mr. SESSIONS. Mr. Speaker, by direction of the Committee on Rules, I 
call up House Resolution 297 ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 297

       Resolved, That upon the adoption of this resolution it 
     shall be in order without intervention of any point of order 
     to consider in the House the bill (H.R. 3210) to ensure the 
     continued financial capacity of insurers to provide coverage 
     for risks from terrorism. The bill shall be considered as 
     read for amendment. In lieu of the amendments recommended by 
     the Committee on Financial Services and the Committee on Ways 
     and Means now printed in the bill, an amendment in the nature 
     of a substitute consisting of the text of H.R. 3357 shall be 
     considered as adopted. The previous question shall be 
     considered as ordered on the bill, as amended, and on any 
     further amendment thereto to final passage without 
     intervening motion except: (1) one hour of debate on the 
     bill, as amended, equally divided and controlled by the 
     chairman and ranking minority member of the Committee on 
     Financial Services; (2) the further amendment printed in the 
     report of the Committee on Rules accompanying this 
     resolution, if offered by Representative LaFalce of New York 
     or his designee, which shall be in order without intervention 
     of any point of order, shall be considered as read, and shall 
     be separately debatable for one hour equally divided and 
     controlled by the proponent and an opponent; and (3) one 
     motion to recommit with or without instructions.

  The SPEAKER pro tempore (Mr. Shimkus). The gentleman from Texas (Mr. 
Sessions) is recognized for 1 hour.
  Mr. SESSIONS. Mr. Speaker, for the purpose of debate only, I yield 
the customary 30 minutes to the gentlewoman from New York (Ms. 
Slaughter), pending which I yield myself such time as I may consume. 
During consideration of this resolution, all time yielded is for the 
purpose of debate only.
  Mr. Speaker, the resolution before us today is a fair, modified rule 
providing for the consideration of H.R. 3210, the Terrorism Risk 
Protection Act. The rule provides that in lieu of the amendments 
recommended by the Committee on Financial Services and the Committee on 
Ways and Means, an amendment in the nature of a substitute consisting 
of the text of H.R. 3357 shall be considered as adopted.
  The rule waives all points of order against consideration of the 
bill, as amended, and provides for 1 hour of debate in the House, 
equally divided and controlled by the chairman and ranking minority 
member of the Committee on Financial Services. It also provides for 
consideration of the amendment in the nature of a substitute printed in 
the Committee on Rules report accompanying the resolution, if offered 
by the gentleman from New York (Mr. LaFalce) or his designee.
  The bill shall be considered as read and shall be separately 
debatable for 1 hour, equally divided and controlled by the proponent 
and opponent. The rule waives all points of order against consideration 
of the amendment printed in the reported. Finally, the rule provides 
for one motion to recommit, with or without instructions.
  Mr. Speaker, on September 11, the collective memory of Americans was 
altered forever. The terrorist attacks resulted in an incalculable 
loss, both in terms of life and the destruction of buildings, property 
and businesses. In the 2\1/2\ months since the attacks, America has 
begun the painful process of recovery and healing.
  Today we are here to consider H.R. 3210, the Terrorism Risk 
Protection Act. Exposure to terrorism is not only a threat to our 
national security, but is also a threat to the United States and global 
economies. The full extent of insured losses from September 11 is not 
yet known, but current estimates span from the range of $30 billion to 
$70 billion.
  There is no doubt that these terrorist attacks have resulted in the 
most catastrophic loss in the history of property and casualty 
insurance. While the insurance industry has indicated that it will be 
able to cover total losses, and should be commended for its resiliency, 
we are faced with a new situation that requires an innovative and 
creative solution.
  As our President, President Bush, declared, this Nation is now faced 
with fighting a different kind of war against a new enemy. Just as our 
military leaders have had to employ new strategies and tactics to fight 
the war abroad, we have had to make adjustments in our own homeland.
  Prior to September 11, terrorism insurance coverage was generally 
included in most commercial and personal contracts. However, the 
prospect of future attacks has set off a dangerous chain reaction.
  The reinsurance industry, which insures insurance companies, has 
indicated its inability to provide terrorism coverage without a short-
term Federal backstop. Without reinsurance for the risk of terrorism, 
insurance companies are forced to specifically exclude it from future 
policies. Without this terrorism coverage, lenders are unlikely to 
underwrite loans for major projects. This sequence of events could 
result in dangerous disruptions to the marketplace and further hurt our 
economy.
  While a few fully understood intricacies of risk assessment and 
premium pricing are apparent, the effects on our marketplace are 
already being felt. I would like to highlight just a few of these real 
live examples.
  There is a small construction contractor in Maryland that recently 
found out that his insurance premium might triple to $150,000 a year.
  New York's JFK International Airport terminal cannot secure the $1 
billion in insurance coverage it needs, which has led the developer to 
reconsider shutting the terminal down.
  The city of Chicago has received a bill to renew its war on terrorism 
insurance for next year at a 5,000 percent increase over its 2001 
rates.
  These snapshots from around the country form a composite picture of a 
dire circumstance that requires action from Congress.
  Since September 11, Congress has moved in a timely fashion to address 
the needs that have arisen from the bipartisan supplemental 
appropriations funding, provided just a few days after the attacks, to 
legislation that addresses the need for increased airline security, to 
an economic stimulus package. This House has responded to its calling.

[[Page 23323]]

  Mr. Speaker, we now must step up again to pass this bill that is 
before us today. Reinsurance policies are generally written on a 1-year 
basis. Approximately 70 percent of current reinsurance contracts are 
set to expire at the end of this year, December 31, 2001.
  As the year draws to a close, Congress must act quickly to avert a 
national economic disaster. The Terrorism Risk Protection Act provides 
a Federal backstop for financial losses in the event of future 
terrorism attacks. This crucially needed backstop would create a 
temporary risk-spreading program to ensure the continued availability 
of commercial property and casualty insurance and reinsurance for 
terrorism-related risks. Under the House plan, the Federal Government 
provides the necessary backstop without opening the pocketbooks of 
taxpayers. Every dollar of Federal assistance will be repaid.
  The legislation also contains reasonable legal reforms to ensure that 
Federal assistance reaches its intended recipient. The 1993 World Trade 
Center bombing which killed 6 people resulted in 500 lawsuits by 700 
individuals, businesses and insurance companies.
  Mr. Speaker, it has been 8 years and the cases are only just now 
getting to the trial stage, and hundreds of plaintiffs have yet to even 
receive 1 cent of compensation. By providing reasonable reforms, 
victims of terrorism will more quickly and equitably receive 
compensation, while also reducing the substantial uncertainty facing 
the insurance industry when pricing terrorism risk.
  Finally, the bill provides for studies that examine the effects on 
terrorism on various sectors of the insurance industry and ways to 
establish reserves, and guards against losses for future acts of 
terrorism.
  Yesterday, in his testimony before the Committee on Rules, the 
gentleman from Ohio (Chairman Oxley) described insurance as ``the glue 
which holds our economy together.'' The ranking member, the gentleman 
from New York (Mr. LaFalce), also spoke, saying that this bill is not a 
bailout for the insurance company, and is of critical importance.
  While there may be many competing ideas on the best way to address 
this situation, there is one unanimous agreement: that this legislation 
is absolutely critical to prevent major disruptions in the marketplace 
and further harm to our economy.
  As the gentleman from Louisiana (Chairman Baker) stated when he 
testified yesterday, the only intolerable action at this time is to do 
nothing.
  Mr. Speaker, I urge my colleagues to join me in supporting this rule, 
a fair rule, and the underlying legislation.
  Mr. Speaker, I reserve the balance of my time.
  Ms. SLAUGHTER. Mr. Speaker, I yield myself such time as I may 
consume.
  Ms. SLAUGHTER. Mr. Speaker, I thank my colleague from Texas for 
yielding me the customary 30 minutes.
  Mr. Speaker, I rise in opposition to the rule. I oppose the hubris it 
embodies and the process it represents. In what is becoming standard 
procedure, the House is preparing to move forward with an important 
bill that is not ready for prime time.
  No one doubts the critical nature of this bill. The withdrawal of 
terrorism coverage by reinsurers may force primary insurers to 
radically increase premiums for policyholders or to withdraw coverage 
entirely. The consequences could reverberate throughout the entire 
economy. Virtually nothing could happen in the American economy without 
insurance, and the vast majority in this body agrees that Congress has 
a duty to intervene in the reinsurance marketplace to safeguard against 
a cascading economic crisis.
  Unfortunately, the leadership in the body has seized upon the crisis 
in an attempt to circumvent regular order and move forward with tort 
reform, a wholly extraneous matter. Tort reform does not belong in this 
bill, nor was it requested by the reinsurance industry representatives 
during the many discussions leading up to the legislation.
  Even by the standards that are in place here, this is a heavy-handed 
attempt to curtail victims' rights. The tort reform provision threatens 
to derail the principal objective of the legislation, which is to 
revitalize and reestablish a rational and functional reinsurance 
market.
  Yesterday's Committee on Rules hearing on the bill revealed utter 
confusion among the chairmen and ranking members of the two committees 
as to what the bill actually contained. The chairmen had not seen the 
measure, but had a hunch of what might be in it. The ranking members 
were wholly in the dark. Committee on Rules members were given copies 
of the comprehensive substitute provisions seconds before the hearing 
commenced.
  Something else became apparent at the hearing as well. All the 
principals involved in the legislation, the gentleman from Ohio 
(Chairman Oxley), the gentleman from New York (Mr. LaFalce), the 
gentleman from Pennsylvania (Mr. Kanjorski) and the gentleman from 
Louisiana (Mr. Baker) were firmly convinced of the importance of the 
legislation and the need to move it forward, and, indeed, all four 
showed a great willingness to work together with each other to reach a 
consensus and a good bill which the country sorely needs. They believed 
that within an additional 24 hours they could have reached that 
agreement and moved a bill that virtually all of us would have 
supported.
  Now, this is the way a deliberate body should operate, and, indeed, 
was operating as this bill moved expeditiously through the legislative 
process. But after the Committee on Financial Services carefully 
crafted a bipartisan measure, the House leadership seized their work 
product in order to move a controversial measure they know would not 
survive the scrutiny of the entire Congress.

                              {time}  1115

  Mr. Speaker, this is not leadership; this is petulance. The American 
people expect more from their leaders in a time of crisis.
  We are also being asked to support a rule that blocks any attempt to 
remedy these extraneous provisions. Indeed, some measures in the 
committee itself that had passed by a majority vote to improve the bill 
were not even included as the bill was written. The gentleman from New 
York (Mr. LaFalce) and the gentleman from Michigan (Mr. Conyers) both 
offered amendments for the rule that simply strike the sections of the 
bill that related to tort reform, and the gentleman from Pennsylvania 
(Mr. Kanjorski) offered a compromise amendment on tort reform to 
prohibit the use of Federal assistance to cover punitive damage awards.
  The gentleman from New York (Mr. Crowley) offered an amendment which 
would have expanded the legislation to cover not only commercial 
policyholders, but personal policyholders, like our Nation's homeowners 
who have been grievously hurt in New York City and other parts of the 
country. Without this extension, homeowners are going to see their 
premiums rise dramatically. But none of these amendments were made in 
order.
  What is the leadership's aversion to regular order? Why the single-
minded obsession with sabotaging critical legislation unanimously 
agreed upon at the committee level? And why the unwillingness to show 
their handiwork to the scrutiny of their colleagues before a Committee 
on Rules hearing and floor consideration?
  Moreover, Mr. Speaker, there are other critical priorities that 
Congress is ignoring. As we take the time to rush through a measure 
designed to protect the insurance industry, surely we could utilize 
that same energy to address the needs of those who have lost their jobs 
and their health insurance in the wake of September 11.
  With this in mind, I will be urging defeat of the previous question 
so that we can adopt a rule to order an amendment offered by the 
gentleman from New York (Mr. Rangel). This amendment would provide 
relief for unemployed workers in the form of unemployment compensation 
and the extension of COBRA benefits and Medicaid.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SESSIONS. Mr. Speaker, I yield 5 minutes to the gentleman from 
Ohio (Mr. Oxley), the chairman of the Committee on Financial Services, 
to speak to us supporting this rule.

[[Page 23324]]


  Mr. OXLEY. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  Mr. Speaker, first I want to pay tribute to the gentleman from Texas 
(Mr. Sessions), my good friend, for once again helping us craft a very 
fair and equitable rule to debate this very difficult issue that faces 
us. Just a few short weeks ago, we faced this terrible attack on 
America on September 11, and I do not think any one of us could have 
foreseen the events that have taken place since that time that have 
drawn this Congress towards addressing some of the most critical issues 
facing us.
  We have done a great job, in my estimation, acting on a bipartisan 
basis, dealing with things like giving the President the authority to 
wage a military campaign in Afghanistan, providing the funding 
necessary to get New York back on its feet and to compensate victims of 
this terrible tragedy and, ultimately, I think, passing an economic 
stimulus package.
  This legislation that we will be taking up shortly is a direct 
response to what happened after September 11, and that is almost 
immediately. The reinsurance market which, for the most part, is 
offshore and not American, indicated very strongly that they would no 
longer write reinsurance policies for terrorism. This, of course, had a 
resounding effect on the American domestic insurance industry, the 
property and casualty companies, because with the inability to 
essentially reinsure or to spread the risk through reinsurance, they 
faced a real conundrum.
  This is not about the losses that took place on September 11, and 
this bill is not a bailout for the insurance companies. The insurance 
companies stepped up to the plate and are taking care of their 
obligations that resulted from the September 11 attack. Indeed, it is 
going to be a $40 billion to $50 billion project for them to make these 
folks whole.
  What it is all about now is what happens next. All of us hope that 
our efforts today will not be needed in the future because our bill 
only occurs and only triggers when an event actually occurs of a 
terrorist nature to be determined by the Secretary of the Treasury. We 
all hope and pray that our efforts today, while beneficial, will not 
have to be used. I think all of us share that. But in the event that we 
have another terrorist attack, we have to be prepared, and the issue is 
how can the domestic insurance companies provide the kind of coverage, 
as the gentleman from Texas (Mr. Sessions) said yesterday in the 
Committee on Rules, saying that the glue that holds our economy 
together truly is insurance.
  People have told us, lenders and everybody else, we can no longer 
provide the kind of insurance coverage necessary. We do not know how to 
price it. This is a case of first impression, and we need a backstop; 
not a bailout, but a backstop, so that we can provide some kind of 
certainty for the insurance industry and, more importantly, for our 
concern. Because make no mistake about it: this legislation that we are 
going to be taking up soon is all about keeping our economy strong, not 
about bailing out insurers, but to actually provide the kind of 
continuity and certainty in the economic field. I have talked to 
developers who have development projects literally in the pipeline who 
are waiting to see what the Congress can do to provide this backstop.
  Mr. Speaker, this is a fair rule. It provides the opportunity for the 
gentleman from New York (Mr. LaFalce), my good friend and the ranking 
member, to offer a substitute of his choosing. It also offers the 
minority the opportunity for a motion to recommit, as is the custom. 
That basically says that the other side gets two bites of the apple. 
That is fine. But I also think, Mr. Speaker, that this bill that we 
will be debating should be a bipartisan effort, just like all the other 
efforts have been in this House.
  Make no mistake about it: this House is going to act. The other body 
has some real problems. There is some question as to whether they can 
even get their act together; but today, sometime between 3 and 4 this 
afternoon, this House will have spoken loudly and clearly that we 
understand the problem and that we are ready to address the problem in 
a bipartisan way. This rule gets us towards that effort.
  I want to thank the gentleman from Texas (Mr. Sessions), and 
particularly the newly arriving chairman of the Committee on Rules (Mr. 
Dreier), just newly arrived, not newly arrived to Congress obviously, 
but newly arrived to the Chamber, for his excellent work in crafting a 
rule that all of us can support.
  Ms. SLAUGHTER. Mr. Speaker, I yield 3 minutes to the gentleman from 
New York (Mr. LaFalce).
  Mr. LaFALCE. Mr. Speaker, I thank the gentlewoman for yielding me 
this time.
  I rise in opposition to this rule, and I would hope that all of my 
colleagues would join me in opposition. One of the most important 
things for us to do is have a fair rule so that we can debate the 
important issues of the day. It is not simply to get things behind us; 
it is not simply to create partisan contests. It is to frame important 
issues and then have discrete votes on those.
  Now, the majority has not permitted that. They have said, oh, look, 
lump every single issue imaginable that we are concerned about into one 
substitute and put it all together. Well, the problem is, 90-some 
percent of the time, the only thing we accomplish there is to get a 
partisan vote with Democrats for the most part for, Republicans for the 
most part against; and we cannot really focus in on the discrete, but 
important, issues unless we have individual amendments, which the 
majority has denied. That is unfortunate, because there are individual 
issues of great import that do not have partisan considerations that we 
should debate separately and vote on separately.
  For example, should there or should there not be a deductible? Well, 
I believe strongly that there should be a deductible before the Federal 
Government comes in, and the bill coming out of the Committee on Rules 
does not have a deductible. I personally believe, the administration 
believes, that there should be a deductible. It would prefer at least 
that portion of our substitute. The administration negotiated with 
certain Senators a proposal that included a significant deductible. 
That is a separate and distinct issue. Let the insurance industry pay 
first; how much is negotiable, but at least $5 billion, before it is 
necessary to have a Federal backstop. And they absolutely have the 
capacity to do that with no difficulty whatsoever, and yet they are 
denying us the right to vote on that discrete issue.
  Another discrete issue is, well, should the Federal Government come 
in and pay from dollar one? Should the Federal contribution, that is, 
90 percent of the damages, come in on the first dollar or should it 
come in on the first dollar after a deductible? Under the House 
Republican Committee on Rules bill, that 90 percent Federal payment 
will come in on dollar one. Ours would come in the first dollar after 
$5 billion. That is a very important issue, and we should be allowed a 
discrete vote on that.
  Mr. SESSIONS. Mr. Speaker, it is a delight and a pleasure to yield 7 
minutes to the gentleman from Wisconsin (Mr. Sensenbrenner), the 
chairman of the Committee on the Judiciary. As my colleagues have heard 
me detail earlier, he is one of three of the brightest minds in the 
Republican Conference, including the gentleman from Louisiana (Mr. 
Baker) and the gentleman from Ohio (Mr. Oxley).
  Mr. SENSENBRENNER. Mr. Speaker, I thank the fourth bright mind of the 
gentleman from Texas (Mr. Sessions) for his compliments, and I rise in 
support of the rule and in support of H.R. 3210. I wish to compliment 
the gentleman from Ohio (Mr. Oxley) for his vigorous work on this 
difficult issue.
  I am particularly supportive of the litigation management provisions 
in H.R. 3210 which will benefit all people in all industries that fall 
victim to terrorist attacks of a catastrophic nature. Any bill that 
fails to limit potentially infinite liability for terrorist-caused 
litigation would fail to recognize the obvious. Traditional tort rules 
are designed to address slip-and-fall cases

[[Page 23325]]

caused by banana peels, not terrorists; and while banana peels may be 
accidents waiting to happen, terrorists are suicidal killers plotting 
the deaths of thousands of innocents and the destruction of billions of 
dollars of property.
  Under this legislation, if the Secretary of the Treasury determines 
that one or more acts of terrorism have occurred, an exclusive Federal 
cause of action kicks in for lawsuits arising out of, relating to, or 
resulting from the acts of terrorism; and the lawsuit must be heard by 
a Federal court or courts selected by the Judicial Panel on 
Multidistrict Litigation. These claims in Federal court are subject to 
limits on punitive damages and attorneys' fees. Defendants are only 
liable for noneconomic damage in direct proportion to their 
responsibility for the harm, and damage awards to plaintiffs must be 
offset by any collateral source compensation received by the plaintiff.
  By enacting these provisions to cover terrorist-inspired litigation, 
individuals and businesses will be protected by Congress from 
potentially limited liability and bankrupting litigation. Also under 
these provisions, the size of damage awards for which the United States 
taxpayer will have to provide up-front sums to cover would be reduced, 
just as the Federal Tort Claims Act's limits on punitive damages and 
attorneys' fees limit damages and litigation that will result in money 
taken from the U.S. Treasury.

                              {time}  1130

  These provisions protect the American taxpayer. Those opposed to them 
wish to turn the key to the United States Treasury over to the 
plaintiffs' bar.
  Existing tort rules do not properly apply when the primary cause of 
injury is a suicidal fanatic motivated by a deep hatred of America. 
These are not garden variety slip-and-fall or auto accident cases, and 
this Congress has already recognized this key distinction in passing 
the liability protection provisions governing lawsuits relating to the 
September 11 attacks.
  As a result of the Aviation Security Act conference report, as well 
as the Air Transportation Safety and Systems Stabilization Act, 
September 11-related lawsuits against air carriers, air manufacturers, 
owners and operators of airports, State port authorities, and persons 
with property interests in the World Trade Center must be heard in 
Federal court in New York; and the total damages against these 
potential defendants, should they be found liable, are capped at the 
limits of the insurance coverage they had on September 11.
  Let this be clear, that what is proposed in the litigation management 
provisions of this bill the House has already approved in both the 
Aviation Security Act and in the Air Transportation Safety and Systems 
Stabilization Act. So Members have already voted for this once and 
twice.
  In addition to these provisions, the Airline Security Act that 
originally passed the House also limited punitive damages and 
attorney's fees, and required that damage awards to plaintiffs be 
offset by any collateral source compensation received by the 
plaintiffs.
  The litigation management provisions of H.R. 3210 would similarly 
benefit victims of future terrorist attacks. If these same provisions 
are not extended to private businesses which might be attacked in the 
future, the mom-and-pop store down the street will have to invest 
scarce resources to turn itself from a corner shop into a fortified 
bunker designed to withstand foreign attacks to avoid potentially 
infinite liability, or pay through the nose in higher insurance 
premiums because the risks are higher and their exposure is greater.
  Furthermore, without the litigation management provisions in H.R. 
3210, no limits would be placed on the fees of attorneys bringing 
terrorist-caused cases against Americans and their businesses, and 
ultimately against the taxpayers, under this bill.
  Reasonable limits on attorney's fees serve the same purpose behind 
restrictions on permanent damages and joint and several liability. They 
maximize the funds available to large numbers of victims when there are 
only limited resources available for compensation. Such protections are 
more important than ever in the context of the terrorist attacks 
causing large-scale losses. Again, the litigation management provisions 
in this bill will spread the wealth out to more victims, rather than 
having one or two large awards ending up bankrupting the pot of money 
available.
  The 1993 World Trade Center bombing killed six people, yet resulted 
in 500 lawsuits by 700 individuals, businesses, and insurance 
companies. Damages claimed amounted to $500 million. Eight years later, 
these cases are only now just getting to trial, and hundreds of 
plaintiffs have yet to receive a cent in compensation.
  By providing reasonable limits on potentially infinite liability and 
consolidating all cases in one or a few Federal forums, victims of 
terrorism will recover more quickly and more equitably because a few 
enormous awards in one court will not bankrupt a responsible party 
before another court can consider arguments of others who may have 
stronger claims against the same party.
  I urge all Members to support these vitally important provisions, 
which ensure equitable compensation to victims while protecting the 
American economy and the American taxpayer.
  Ms. SLAUGHTER. Mr. Speaker, I yield 3 minutes to the gentleman from 
Pennsylvania (Mr. Kanjorski).
  Mr. KANJORSKI. Mr. Speaker, I rise in opposition to a rule I consider 
fundamentally unfair. The previous speaker addressed one of the major 
issues that I wanted to address in an amendment I had offered and asked 
the Committee on Rules to make in order, and that is to have some 
limitation on punitive damages and provide for consolidation of 
lawsuits, but not to enter into tort revision.
  Unfortunately, some of my friends have seen the opportunity to use 
this as a locomotive today to go to one of their favorite topics, and 
that is, tort revision in the country. I think that is unfortunate 
because the history and the process of this legislation was initially 
handled by the Committee on Financial Services for the sole purpose of 
trying to bring together the entire Congress with a bipartisan effort 
to accomplish something that would allow the economy to have terrorist 
insurance and to have a reinsurance industry that could be vital, and 
could be kept in the private sector until we straighten out the 
problems and the new issues created by the terrorist attack on 
September 11.
  I thought we had moved a great deal along that line during the 
committee operations, but since that time the bill has been taken and 
fundamentally changed, and made a vehicle to carry everyone else's 
desire to change fundamental existing law in the United States.
  I recognize the fair right of all individuals to disagree with the 
evolution of tort law responsibility in the United States over the last 
200 years, and it may be subjected to change. This body is the place 
that should consider that issue. It should not consider that issue at 
this time when we have a very limited period of time to get a 
comprehensive reinsurance bill passed so the economy can be stabilized 
for the next year or two, so that American businesses can get the 
insurance they need against terrorism, and so that the rate can be 
reasonable.
  What we have here is a political response: taking a very highly 
emotional and disagreeable issue on the two sides of this aisle, and I 
may say, Members on both sides in different proportions, and inserting 
it in this bill, which will ultimately say this bill cannot be passed 
by the Senate, will not be passed by the Senate, and I think puts at 
risk the fact that we may have reinsurance legislation in this session, 
and as a result, could materially destabilize the economy of the United 
States over the next year or two.
  That is unfortunate that some of us have given in to our basic 
weaknesses and have gone to our ideology, rather than to the interests 
of the people of the United States and the economy of the United 
States.

[[Page 23326]]

  I hope my predictions are wrong. I hope we can get terrorist 
reinsurance put through this Congress before we adjourn. But if we do 
not, if we do not, it will really be as a result of tort law revision 
that has been inserted into this bill that prevents the passage of this 
type of legislation in the waning days of this session.
  Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, it is obvious we disagree on this. But for someone to 
stand up in this body and argue that because of what we are going to do 
here today, it would encumber the Senate and ultimately would mean that 
this bill could not be passed, I simply disagree with that.
  The Senate, the other body, has an opportunity to debate this issue, 
to bring forth their bill, and then for the conference committee, not 
the other body to feel like they have been put upon, but for the 
conference committee to be the body to determine what the final outcome 
will be. That is what the process should be.
  I am proud of what this bill stands for, and I think we are doing the 
right thing.
  Mr. Speaker, I yield 2 minutes to the gentleman from Utah (Mr. 
Cannon).
  Mr. CANNON. Mr. Speaker, I thank the gentleman for yielding time to 
me.
  I rise today in support of the rule and the underlying legislation. 
The rule provides for the continued availability of insurance against 
terrorism risks, and addresses multiple insurance and liability issues 
arising out of the September 11 attacks.
  This is a good rule that incorporates changes made by the Committee 
on Financial Services and the Committee on Ways and Means and the 
Committee on the Judiciary to the original bill. I would like to speak 
about some of those important provisions that fell within the Committee 
on the Judiciary jurisdiction.
  First, by working with the gentleman from Ohio (Chairman Oxley) and 
the gentleman from Wisconsin (Chairman Sensenbrenner), we were able to 
expand language in the original bill dealing with the use of frozen 
terrorist assets to compensate victims of terrorism.
  This change to language offered by the gentleman from North Carolina 
(Mr. Watt) brings the bill into line with an amendment I offered 
earlier, in earlier legislation, that was accepted by the Committee on 
the Judiciary this fall. It was also language that was approved by the 
House on suspension in the 106th Congress.
  The provision in the bill today will allow equal access to the frozen 
assets of terrorists, terrorist organizations, and terrorist sponsor-
states for American victims of international terrorism who obtain 
judgments against those terrorist parties.
  In addition, the Committee on the Judiciary added important 
litigation management provisions to deal with the legal aftermath of a 
major terrorist attack. This is a commonsense recognition that major 
terrorist attacks are not garden variety tort cases, and that there is 
a compelling national interest in setting rules and limits for how 
lawsuits arising from such attacks proceed. Exposing American citizens 
and insurers to unlimited liability in multiple judicial forums for the 
terrible acts of madmen is a recipe for a financial crisis.
  This Congress overwhelmingly recognized the same principle when we 
limited airline liability for the September 11 attacks and set them 
back on a sound financial footing. We need to do the same today for 
insurers, and equally important, to the insured.
  I would like to thank again the gentleman from Ohio (Chairman Oxley), 
the gentleman from Wisconsin (Chairman Sensenbrenner), the gentleman 
from New York (Mr. Fossella), and the gentleman from North Carolina 
(Mr. Watt), for all their efforts on these issues.
  I urge my colleagues to support the rule and the bill today. By 
providing partial Federal coverage for acts of terrorism, setting 
reasonable limits and procedures for lawsuits arising from such acts, 
and allowing victims to go directly after the frozen assets of 
terrorists and their sponsors, we can help our Nation and economy move 
forward.
  Ms. SLAUGHTER. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
New York (Mrs. Maloney), a member of the committee.
  Mrs. MALONEY of New York. Mr. Speaker, I thank the gentlewoman for 
yielding time to me.
  Mr. Speaker, I rise in opposition to the rule for the reasons 
outlined by 
the gentleman from New York (Mr. 
LaFalce) and the gentleman from 
Pennsylvania (Mr. Kanjorski) for not 
allowing substantive amendments and 
for fundamentally changing the work product of the Committee on 
Financial Services.
  But Mr. Speaker, the issue of terror insurance may affect our 
national economy more immediately and more drastically than any tax or 
spending bill that Congress considers in the next decade. Without 
Federal intervention in the terror insurance market, our economy will 
face a sudden, massive credit crunch after the first of the year. 
Nowhere will this impact be more serious than in the district I 
represent in New York City.
  Even if Congress passed a perfect bill, I am sure that insurance 
rates are going to go up and availability shortages will be a fact of 
life next year, especially in New York.
  The New York State insurance commissioner will have to be especially 
vigilant next year to make sure that rates remain affordable and 
products are available. The restrictions on victim rights in the 
majority bill deserve their own vote as an amendment separate from the 
substance of this bill. This effort to limit the access to the State 
courts and restrict individuals' access to the civil courts is simply 
an act of the majority's long-advocated partisan agenda. This bill is 
too important to play politics, and these provisions have no place in 
this debate.
  Insurance coverage is vital to our economy. Without a safety net for 
catastrophe, businesses simply will not do business, they will not 
employ people, and they will not meet consumer needs.
  While the industry should be complimented for quickly moving to cover 
the $50 billion to $70 billion in losses from the World Trade Center, 
the reinsurance industry, which buys risk from property and casualty 
writers, is unable to cover massive future events.
  Without reinsurance, we face a domino effect. Property and casualty 
insurance will be unwilling to write policies. Without property and 
casualty coverage, banks will refuse to lend money for major capital 
improvements or real estate projects.
  Mr. SESSIONS. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman 
from Columbus, Indiana (Mr. Pence), of the Committee on the Judiciary.
  Mr. PENCE. Mr. Speaker, I thank the gentleman for yielding time to 
me.
  Mr. Speaker, as a member of the Committee on the Judiciary and also 
as a former trial attorney, I rise in strong support of the rule and 
the underlying legislation.
  Mr. Speaker, in the antiterrorism measures recently passed by 
Congress, legal reforms were an integral part of shaping bills that 
provide the President with the necessary means to combat evil. Legal 
reform is equally important to the measure before us today in this 
Chamber, terrorism risk protection.
  Mr. Speaker, the existing legal system is simply not designed to 
rectify attempts by international terrorists to murder thousands of 
innocent Americans or obstruct our economy.

                              {time}  1145

  We need look no further than the 1993 bombing at the World Trade 
Center for proof. In that heinous crime 6 Americans were killed, but 
500 lawsuits were filed claiming more than $500 million in damages. 
These cases are only coming to trial today, over 7 years later, and 
many plaintiffs have yet to receive a dime in compensation.
  Mr. Speaker, our current legal system is inadequate to deal with this 
very present threat against our people. The current legal system pits 
victim against victim and encourages overreaching by the colleagues in 
my former profession and, even worse,

[[Page 23327]]

could result in putting hundreds of millions of dollars into the deep 
pockets of attorneys' fees instead of addressing real losses by 
Americans.
  Mr. Speaker, my colleagues can understand the urgent need for legal 
reform in the matter of risk protection. I applaud the gentleman from 
Ohio (Mr. Oxley) and his colleagues for their hard work in creating a 
pro-consumer, pro-taxpayer solution as read in H.R. 3210, and I urge my 
colleagues to support the rule and the bill.
  Ms. SLAUGHTER. Mr. Speaker, I am pleased to yield 1 minute to the 
gentleman from Missouri (Mr. Gephardt), the minority leader.
  Mr. GEPHARDT. Mr. Speaker, I rise to ask Members to vote no on the 
previous question so an amendment can be offered to include worker 
relief in the base bill. It had been more than 2 months when we passed 
the bill to help the airlines, since the Speaker promised to bring up a 
bill soon to address the critical issue of worker relief.
  It has been now more than 2 months. We have taken up all kinds of 
appropriation bills. We have taken up all kinds of other legislation. 
We have dealt in two instances with the airline industry, all of which 
we needed to do, and I am not opposed to the basic idea of doing 
something about insurance and the real estate industry. I understand 
the problems that the committees tried to deal with, and I am 
sympathetic with trying to do something about it.
  I am opposed to some of the matters that got freighted on to this 
bill, and so I am going to vote, if this bill survives the process, 
because of what has been put in it with regard to civil justice system.
  The basic idea of dealing with the insurance industry is a sound 
idea. What I am unwilling to do and I think a lot of us are unwilling 
to do is to take up one more bill to deal with one more industry 
without finally dealing with the most important problem that faces us 
as a country today, and that is the thousands of people that have 
become unemployed in America who have no income, no health insurance, 
and no ability to deal with the problems they now face.
  I have thought a lot about it. Why are we constantly dealing with 
other matters before we deal with the most important matter in front of 
us? I have finally come to the conclusion that it is a result of the 
fact that we personally are not facing these problems. We 
intellectually know that people out there are hurting, but I guess we 
are not hurting. We are all employed. We all have health insurance. We 
just do not get it.
  I was asked recently how the people in St. Louis, who I represent, 
were dealing with the anthrax attacks here in Washington, and I have 
talked obviously with my constituents a lot about what was happening 
here in Washington with anthrax, and they understood it intellectually, 
but they did not understand it the way I understood it. The analogy I 
have used is, it is one thing to have your aunt or uncle diagnosed with 
cancer. It is another thing when you are diagnosed with cancer. It 
takes on a new meaning.
  We have thousands of people in this country who have no unemployment 
insurance, and they are unemployed. Probably today about 40 percent of 
the unemployed do not even qualify for unemployment insurance because 
of the changes that have been made in the laws across the country in 
the last years. And none of them have the money, even if they get 
unemployment insurance at 6- or 7- or $500 a month, or $300 a month, 
none of them can afford their COBRA health insurance, none of them.
  Just imagine in your own family, if your income had been wiped out, 
you were not going to get a check at the end of the month, and you lost 
your health insurance, what happens to your kids? What if your kids get 
sick? What are you going to do?
  That is the bill we ought to have on the floor today, and we are 
unwilling to continue taking up bill after bill, as necessary and as 
important it may be, until we deal with this single most important 
issue that faces the American people.
  Vote no on the previous question. Vote against the rule, and let us 
come back on this floor today or tomorrow and deal with the most 
important problem facing this country. We may not understand it because 
it does not affect us, but I can assure my colleagues it affects 
thousands of people in districts across this country. Let us come back 
and do the right thing.
  Ms. SLAUGHTER. Mr. Speaker, I yield 3 minutes to the gentleman from 
Texas (Mr. Bentsen).
  Mr. BENTSEN. Mr. Speaker, one of the other speakers on the other side 
said this was a fair rule and a fair process. There ain't nothing fair 
about this rule. If my colleagues want to know where the fair process 
was, it was in the Committee on Financial Services where, under the 
gentleman from Ohio (Mr. Oxley) and the gentleman from Louisiana (Mr. 
Baker), we debated and crafted a very good bill. In fact, I was one of 
the original cosponsors, along with the gentleman from North Dakota 
(Mr. Pomeroy) of the underlying bill.
  Somewhere from the Committee on Financial Services to the House 
floor, as often happens around this place, the bill changed greatly in 
scope.
  What I am concerned about is we had a chance to do something that we 
really need to do the easy way, get a bill passed in a very temporary 
nature where the government intervenes in the markets and basically 
gets into the reinsurance business; and instead we have decided to pick 
the hard way and add what is called legal reform.
  This bill is not about reform. This bill is about avoiding defaults 
on virtually every major development loan that is out in the country 
today. It is about stopping, or not having new projects being stopped. 
And here is what is going to happen, because I do have a little 
experience in this, and I do not think all the Members do. All the 
lawyers do.
  We are worried about the trial lawyers. We have need to be worried 
about the bank lawyers out there, because what they are going to do 
when we do not pass this bill, when the other body kills it because we 
are getting down off a rabbit trail on this thing, is the reinsurance 
companies are not going to write any new policies. So the bank lawyers 
are going to go pull down the documents for all the deals for all the 
buildings that are going to be done. And they are going to go down to 
the section on insurance and the covenants that are there, and they are 
going to say, okay, you are in technical default, ACME Development 
Corp. And ACME Bank is going to call ACME Development Corp. and say, 
you have 45 days to cure this default and if you do not cure this 
default, then we are going to put the deal in default and we are either 
going to call your loan or you will have to renegotiate your loan.
  If we go read the Wall Street Journal today, we will read about Enron 
Corp. which is based in my home city. They have huge loans out with 
some of the big money center banks. They are probably not going to get 
repaid. We have a credit crunch going on in the economy right now, and 
now we want to have an insurance crunch occur. That is the hard way to 
do things.
  We fixed the problem in the committee. We passed, in a bipartisan 
vote, the Bentsen amendment that made sure that the taxpayer would not 
be on the hook for punitive or noneconomic damages. But what we also 
said was the defendant, the building owner, the airline owner, if they 
had liability, if they had negligence, even in a terrorist attack, if 
they had locked the exit door, if they had not had proper exits and 
there was liability, that they would have that liability if there was 
negligence; but the taxpayers would not have that liability.
  We solved the problem in a temporary nature in what is otherwise I 
think is a very good bill. But for some reason, as is always the case 
around here, we decide to do it the hard way rather than the easy way. 
And someday we will do it the easy way. But what I am worried about is 
it is going to be January when we are doing it the easy way, and we 
have caused all this problem by trying to put ideological changes in a 
bill that has nothing to do with that.
  I hope we defeat the previous question, defeat the rule, and let us 
get a

[[Page 23328]]

good bill like we started with in a very bipartisan fashion.
  Ms. SLAUGHTER. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
Oregon, (Ms. Hooley).
  Ms. HOOLEY of Oregon. Mr. Speaker, I thank the gentlewoman for 
yielding me time.
  Mr. Speaker, I rise in opposition to this rule. Earlier this week, 
the National Bureau of Economic Research announced the U.S. economy had 
been in recession since last March. This is not really shocking news 
for Oregon. Over the last year our economy has been battered, and right 
now we have the highest unemployment rate of any State outside of 
Alaska.
  Yesterday the Feds announced economic growth across the United States 
is continuing to lag despite our best efforts of slashing taxes and 
cutting interest rates. Well, in about 7 weeks, about 70 percent of 
reinsurance contracts will expire. The unavailability of terrorism 
coverage for commercial businesses could have devastating results for 
businesses and consumers.
  For the past several weeks the Committee on Financial Services worked 
to bring a bill to the floor that actually stood a chance of passing. 
In normal times it would take years, if not decades, to find a workable 
solution to this problem. Yet we were able to negotiate, we were able 
to pass a bill by voice vote, a bipartisan bill, to get us where we 
needed to be.
  Unfortunately, we find ourselves in a familiar place, a place that 
mocks our legislative process. Out of the clear blue sky, a half hour 
before the Committee on Rules met yesterday, a new bill was introduced. 
No committee hearings, no work sessions, no markups. A new bill. Not 
only did it shred the bill which came out of the Committee on Financial 
Services, it comes to the floor of the House loaded with legal reform, 
something that has no bearing whatsoever on the health of our economy.
  Someone once again decided that politics were more important than the 
good of business, the good of consumers and the good of the Nation. 
This is no laughing matter and this should not be business as usual.
  Even as I speak, primary insurance companies have started filing 
petitions with State regulators, seeking to exclude terrorism from 
commercial and personal policies. Do we really expect banks to loan 
cash to businesses who are not insured against acts of terror?
  Mr. Speaker, I stand here able and willing to reach across a 
political divide to bring a bill to the floor which makes sense, which 
will have a positive effect on our economy. But until then, I have no 
other choice than to oppose the rule, the underlying bill, and urge my 
colleagues to support the LaFalce-Kanjorski substitute.
  Ms. SLAUGHTER. Mr. Speaker, I yield 2 minutes to the gentleman from 
North Dakota (Mr. Pomeroy).
  Mr. POMEROY. Mr. Speaker, I thank the gentlewoman for yielding me 
time.
  Mr. Speaker, I want to begin by commending the Committee on Financial 
Services leadership, the gentleman from Ohio (Chairman Oxley) and the 
gentleman from Louisiana (Mr. Baker), the subcommittee chairman, as 
well as the ranking members, the gentleman from New York (Mr. LaFalce) 
and the gentleman from Pennsylvania (Mr. Kanjorski). This committee has 
done a very serious effort at trying to address an urgent problem.
  We must act. We simply must act. Those are the words of the gentleman 
from Louisiana (Chairman Baker) to the Committee on Rules yesterday in 
describing the urgency of moving this legislation.
  Well, what a shame, what an incredible shame that majority leadership 
would then stomp all over the work product brought out of the Committee 
on Financial Services to address this issue by drafting onto the bill 
an unrelated, partisan, highly ideological agenda.
  Sometimes we just need to put our partisan roles aside and deal in a 
bipartisan way to address the concerns of this Nation, especially the 
urgent needs of this Nation. There was no need to make a political 
issue out of this. Both sides recognize the need to act, both sides can 
find an agreement in terms of how to get this terrorism coverage out 
there through this Federal legislation.
  Instead, the majority leadership dramatically complicates this whole 
effort to address and get enacted legislation in the few remaining 
weeks.
  My friend, the gentleman from Ohio (Chairman Oxley) has described 
this as a fair and equitable rule. What is fair and equitable about a 
rule that prohibits us from offering an amendment that would restore 
his own work product, the Committee on Financial Services' work 
product, in place of the new language dropped on the bill by majority 
leadership? We wanted to get this and get it right.
  I used to be an insurance commissioner. I can tell you, this is a 
very technically demanding, tricky piece of work we are attempting to 
do here, and to sidetrack the whole discussion by slapping the red 
herring of tort reform unnecessarily onto this legislation detracts 
considerably from our efforts and our ability to get this right.

                              {time}  1200

  This was a time when the House could have provided leadership to the 
Senate by passing a bill setting the framework for how this tort reform 
could have been established. We could improve this today significantly 
if the rule would allow us to put on the bill the committee's own work 
products.
  Reject this rule. We need to do a better job.
  Ms. SLAUGHTER. Mr. Speaker, I yield 3 minutes to the gentleman from 
Massachusetts (Mr. Delahunt).
  Mr. DELAHUNT. Mr. Speaker, I thank the gentlewoman for yielding me 
this time.
  Unfortunately, Mr. Speaker, this bill has become an attempt to 
rewrite the rules of our civil justice system. And I think it is 
important to note that statements by Members in the majority on the 
Committee on the Judiciary would suggest, and I know it was not their 
intention, but would suggest that the Committee on the Judiciary had 
hearings on this particular bill. Well, I think it is important that 
everyone in this Chamber and the American people should clearly 
understand that there were no hearings on this bill before the 
Committee on the Judiciary.
  Now, no one objects to responsible measures that help ensure the 
availability of insurance against future acts of terrorism. Indeed, 
given the collapse of the reinsurance market for terrorism coverage, it 
is incumbent upon us to respond. But the manager's amendment that we 
are considering today is not a responsible measure. It transfers to the 
taxpayers the risk of losses, which the insurance industry has said it 
is willing and able to absorb; and it asks the public to assume this 
huge contingent liability without imposing any obligation on insurers 
to provide affordable coverage to those who need it.
  But the worst feature of the legislation is one which has nothing 
whatsoever to do with stabilizing the insurance market. Section 15 of 
the bill would limit relief of the victims of terrorist attack by 
immunizing wrongdoers in advance from the consequences of their own 
wanton and reckless acts. This sweeping provision would prohibit the 
courts from awarding punitive damages; it would eliminate joint and 
several liability for economic damages; require courts to reduce damage 
awards by the amounts received from life insurance or other collateral 
sources; and waive prejudgment interests, even in those egregious 
cases, for example, where private airport security contractors who 
wantonly, recklessly, or maliciously hire convicted felons, who fail to 
perform required background checks, or who fail to check for weapons.
  Now, nobody wants to hold parties responsible if they bear no blame. 
But this bill lets them off the hook even if they knowingly engage in 
conduct that puts Americans at risk.
  It is interesting to note, Mr. Speaker, that the bill would also 
place a cap on attorneys' fees, making it harder for victims to pursue 
meritorious claims in a court. But the caps apply just to plaintiffs' 
attorneys. Corporate defendants remain free to hire the most expensive 
lawyers they can find.
  Mr. Speaker, it is hard to see these provisions as anything other 
than a

[[Page 23329]]

tax-free gift for corporations and an attempt to rewrite the rules of 
our civil justice system. I urge defeat of the previous question and 
the rule.
  Ms. SLAUGHTER. Mr. Speaker, I have one speaker remaining. How much 
time do I have?
  The SPEAKER pro tempore (Mr. Shimkus). The gentlewoman from New York 
(Ms. Slaughter) has 6 minutes remaining, and the gentleman from Texas 
(Mr. Sessions) has 6\1/2\ minutes remaining.
  Ms. SLAUGHTER. Mr. Speaker, I yield 5 minutes to the gentleman from 
California (Mr. George Miller).
  Mr. GEORGE MILLER of California. Mr. Speaker, I thank the gentlewoman 
for yielding me this time.
  Mr. Speaker, I was hoping that we would have a bill today that we 
could support, because I think the committee, on the underlying bill on 
insurance protection for the real estate industry and for the insurance 
companies and others, is on the right track. Yet we find this bill is 
substantially now loaded down with a whole series of tort reforms, 
without hearings, as many of my colleagues have alluded to here, and 
now threatens to delay, if not make impossible, the passage of this 
legislation.
  I also, though, want to raise some questions with respect to the 
legislation as we continue the consideration. I would refer Members of 
the House to the Wall Street Journal of November 15, an article on the 
insurance companies that points out that the market has taken a 
somewhat different picture of the insurance industry than the insurance 
industry is presenting to the Congress of the United States. The title 
of the article is, ``Insurance Companies Benefit From September 11, 
Still Seek Federal Aid.''
  The article talks about raising premiums 100 percent, or 400 percent 
in some instances. It also makes it very clear that the insurance 
companies see this as an opportunity. A number of memos sent back and 
forth in Marsh & McLennan and other large insurance companies have made 
it clear the time is now to fully exploit the opportunity that was 
presented by September 11 in terms of creating new companies, creating 
new entities, and going after new capital.
  In an effort to raise a billion dollars in new capital within a few 
days after September 11, in an insurance industry that is seriously in 
trouble supposedly, what they are telling us in Washington, they were 
so oversubscribed they had to turn people away. Other entities then 
came in, and they raised about $4 billion in new capital. Many of the 
companies have sold additional stock that have been subscribed to by 
very, very reputable investors that have decided that this is a good 
take.
  On the date of that article the insurance company stocks were up 
about 7 percent. What is going on here? They are running in and 
frightening the banks and frightening the real estate industry, 
everybody else, raising their premiums; and they know on the other end 
they are going to get Federal protection. As the article points out, 
they know they have an ability now to raise premiums up to 400 percent, 
to limit their liability; and the payouts will be taken on the other 
end.
  That is why I think this committee is on the right track with the 
suggestion that we are prepared to help them out, but we also think 
there ought to be some payback. Because, again, the article makes it 
very clear, and the financing of this industry makes it very clear that 
even with the huge payouts they will experience from September 11 their 
reserves are sufficient. Over time, and hope to God we do not have 
other terrorist activities, those reserves will be built up. The 
premiums will be raised.
  We may have a catastrophic event, we may have to step in, but the 
nature of the industry is they have the ability to pay the taxpayer 
back. There are others who want to suggest that $10 billion and the 
industry is off the hook, or that we pick up all of the cost. I think 
we have to be very careful about how we approach this and we recognize 
the real financial capacity of this industry.
  They are running around telling people they are not going to rewrite 
the insurance. That is not what they are telling other people where 
they know they can extract the dollars. There may be some people that 
cannot afford this coverage. That is a different issue. But, clearly, 
this industry is rapidly rebuilding its reserves, rapidly rebuilding 
its premium base, rapidly rebuilding its revenues and its capital.
  That is what is going on on Wall Street, that is what is going on in 
the American marketplace, and they are running around Washington with a 
tin cup suggesting, in many instances, that we should pick up all this 
liability as a result of a terrorist attack.
  I think the committee is on the right track. Unfortunately, this bill 
now has been saddled with a whole series of issues that threaten to 
bring down its consideration by both bodies.
  I would also raise the point raised by the minority leader that, once 
again, here we are bailing out an industry that obviously is exuding a 
great market force at this very time; and yet we have hundreds of 
thousands of families that have lost their livelihood, that have no 
market force, have no ability to make their mortgage payments; and this 
Congress is about to leave town, about to adjourn.
  In spite of the representations of the President of the United States 
that he was going to have money, that money was taken away last night 
for unemployment insurance. That money was taken away from the States 
that could help pay people's health insurance. That was a Presidential 
program that was destroyed last night. The Speaker said he was going to 
work with the minority leader to help people put out of work in the 
airline industry and elsewhere because of September 11. Nothing has 
happened on that front.
  So what we find here is that the majority party is keeping from us 
any consideration of help for those people who, as a result of 
September 11, lost their employment, or those people who lost their 
employment before September 11 but now see their opportunities greatly 
diminished. We are going to do nothing for those people. Yet we are 
here, after the airline industry, and now with the insurance industry. 
Clearly, this Congress can see its way to help the most unfortunate 
people in our society and not make them further victims of the attack 
on September 11.
  Mr. Speaker, I submit for the Record the full newspaper article I 
referred to earlier.

             [From the Wall Street Journal, Nov. 15, 2001]

   Insurance Companies Benefit From Sept. 11, Still Seek Federal Aid

                         (By Christopher Oster)

       For Marsh & McLennan Cos., the Sept. 11 attacks have meant 
     two very different things.
       One is personal loss. The world's largest insurance 
     brokerage lost 295 employees who worked at the World Trade 
     Center. ``It was very painful for us, agonizing for loved 
     ones and close friends,'' Jeffrey W. Greenberg, Marsh's 
     chairman and chief executive, told employees at a memorial 
     service in St. Patrick's Cathedral in New York on Sept. 28.
       But in the days after the attacks, even as the company was 
     sorting out who was safe and who had perished, it quickly 
     became clear that Sept. 11 presented a tremendous business 
     opportunity for Marsh and other strong players in the 
     industry.
       Within days of the twin towers' destruction, Mr. Greenberg 
     and top lieutenants began planning to form a new subsidiary 
     to sell insurance to corporate customers at sharply higher 
     rates than were common before Sept. 11. Marsh also 
     accelerated plans to launch a new consulting unit to 
     capitalize on heightened corporate fears of terrorism. Vice 
     Chairman Charles A. Davis says the company is merely meeting 
     new marketplace demands. ``There is a financial reward for 
     doing that,'' he says.
       Unlike airlines, which are reeling as travelers hesitate to 
     fly, insurers have seen improved financial prospects since 
     Sept. 11. Insurers expect to have to pay out $40 billion to 
     $70 billion in claims related to the attacks. That sounds 
     daunting, but in fact, it is manageable for an industry that 
     collectively has $300 billion in capital.
       Moreover, in response to Sept. 11, insurers are already 
     raising prices by 100% or more on some lines of commercial 
     and industrial insurance. Nearly all such lines are seeing 
     rate increases of more than 20%. For much of the 1990s, 
     carriers had engaged in a price war, keeping premiums 
     relatively low. The prospect of large payouts related to the 
     attacks gave the industry grounds for demanding substantial 
     increases.
       Sept. 11 payouts will hurt insurers' balance sheets for a 
     number of quarters. The higher

[[Page 23330]]

     rats they are introducing are expected to last for years.
       Insurance stocks have jumped 7% since the attacks, 
     outpacing the broader market, and the atmosphere in the 
     industry is one of eager anticipation. Marsh set out to raise 
     about $1 billion in outside money to capitalize its new 
     company. Investors volunteered six times that much, and 
     dozens had to be turned away.
       Amid these signs of robust health, however, the industry is 
     stressing potential disaster as it pressures Congress for 
     emergency aid. By the end of December, lawmakers are expected 
     to approve legislation under which the government could have 
     to pick up billions of dollars in claims related to future 
     terror assaults in the U.S.
       This federal backing would have tremendous financial value 
     to insurers in the event of another disaster. And it would 
     have an immediate impact, too, emboldening the industry to 
     sell new terrorism coverage, for which it will charge higher 
     premiums. Carriers collect their money now, while the 
     government would help pay any claims later.
       Even consumer advocates say newly recognized dangers 
     warrant some sort of broader government role in insurance. 
     But these advocates say the changed terror calculus doesn't 
     justify a wave of steep rate increases for policies unrelated 
     to terrorism--especially since the government is taking on 
     the additional risk. ``It's very opportunistic'' of the 
     industry, says Robert Hunter, insurance director for Consumer 
     Federation of America, a Washington, D.C., advocacy group.
       In the weeks after Sept. 11, newspapers carried numerous 
     advertisements touting insurers' intent to pay disaster 
     claims promptly. Less well known is how these companies plan 
     to recoup much of the money they will be sending to 
     policyholders.
       The decade-long premium price war had been ending before 
     the attacks, as weaker insurers collapsed or retrenched and 
     stronger ones began gradually to charge more. Now, faced with 
     payouts related to Sept. 11, the healthier companies are 
     demanding that their customers share the pain by paying 
     bigger premiums. Some insurance companies are so confident in 
     this strategy that they are expanding operations. Since Sept. 
     11, at least seven insurers have sold additional shares of 
     stock. An additional six, including Marsh, have formed new 
     companies.
       Among the new units is a Bermuda-based carrier put together 
     by American International Group Inc. Chubb Corp, and 
     investment bank Goldman Sachs Group Inc. State Farm Mutual 
     Automoible Insurance Co. and RenaissanceRe Holdings Ltd. are 
     creating another one. Since Sept. 11, insurers have raised a 
     total of about $4 billion in new capital, to which they are 
     adding a modest amount of their own money. Deals valued at 
     another $14 billion are expected to be completed in coming 
     months, according to industry analysis.
       Since the attacks, aviation underwriters have raised 
     premiums for airlines by 200% to 400%, according to insurance 
     brokers. At the same time, the underwriters are cancelling 
     parts of airlines' coverage for liability to third parties 
     other than passengers in future terrorist acts.
       U.S. airlines don't have to worry about these increases 
     immediately. The airline-bailout bill Congress approved after 
     Sept. 11 included provisions under which the federal 
     government for six months will pay any increases in 
     commercial insurance and cover airlines' potential third-
     party liability for terrorism. In the not-too-distant future, 
     though, the airlines could collectively face billions of 
     dollars in additional annual premiums.


                             new surcharge

       Led by giant AIG, insurers have offered airlines a new, 
     more-expensive package to replace the rescinded terrorism 
     coverage. The new price includes a $3.10-per-passenger 
     surcharge. Lacking the backing of the U.S. government, 
     numerous foreign airlines are buying the new coverage, which 
     is expected to boost insurers' revenue by a total of hundreds 
     of millions of dollars a year.
       Owners of New York trophy properties are seeing giant rate 
     increases. Douglas Durst, a developer with large holdings in 
     midtown Manhattan, including the 50-story Conde Nast 
     building, says his insurance broker has told him that he will 
     be lucky if his premiums increase by only 20% at renewal time 
     in April. ``There are [real estate] people who are seeing 
     their rates double,'' Mr. Durst says.
       Brookfield Properties Inc., which owns most of the World 
     Financial Center complex adjacent to the World Trade Center, 
     has said that insurers are cutting back on its terrorism 
     coverage. Brookfield said its insurers agreed to cover its 
     liability risk associated with future terrorist attacks but 
     are refusing to reimburse it for property damage or the costs 
     of business interruption. (The Wall Street Journal has 
     offices in Brookfield's World Financial Center property.)
       Medium-sized and small corporate policyholders are also 
     seeing premiums jump. One week after the attacks, Industrial 
     Risk Insurers, a unit of General Electric Co.'s Employers 
     Reinsurance unit, told textile manufacturer Johnston 
     Industries Inc. that it wouldn't renew Johnston's property-
     insurance policies, which expired Oct. 31, Bill Henry, a vice 
     president at the Columbus, Ga., company, says it wound up 
     paying $1 million more to a European carrier for a year's 
     coverage, ending in October 2002--a 150% increase. The limit 
     of the new policy is only $350 million, or half of what 
     Johnston previously received from the GE insurance unit. For 
     a company with annual revenue of about $240 million, ``it's a 
     major blow,'' says Mr. Henry.
       Dean Davison, a spokesman for the GE unit, confirms that it 
     has discontinued many of its policies. But he adds that Sept. 
     11 merely hastened actions that had already been planned for 
     later this year.


                             government aid

       While aggressively raising premiums, the insurance industry 
     has been busy seeking relief in Washington. Ten days after 
     the attacks, a delegation of chief executives, including 
     AIG's Maurice R. Greenberg, the father of Marsh's Jeffrey 
     Greenberg, descended on the capital to lobby President Bush 
     and lawmakers.
       The industry leaders sounded an alarm that reinsurance 
     companies--which spread corporate risk by selling insurance 
     policies to the insurance industry--were moving to cancel 
     terrorism-related reinsurance coverage. The big primary 
     carriers told the politicians they would eliminate almost all 
     terrorism coverage unless the government stepped into the 
     role of the reinsurers.
       Without this coverage, many lenders would hesitate to 
     finance everything from factories to new real estate 
     development, the insurance executives warned their Washington 
     hosts. Large areas of the economy could grind to a halt.
       The pitch worked. Congress is now expected to approve a 
     mechanism that will guarantee that if there are huge future 
     terrorism liabilities, taxpayers will help pay them. A plan 
     under consideration in the Senate would require the industry 
     to pay the first $10 billion in claims, with the government 
     picking up 90% of any remaining amount. The House Financial 
     Services Committee favors government loans to insurers to 
     help pay future terrorism claims.
       ``This is not a bailout,'' says Democratic Sen. Christopher 
     Dodd of Connecticut, home to several large carriers. Rather, 
     the government is proposing to serve as a ``backstop'' to 
     encourage underwriters to provide terrorism coverage, he 
     says.
       The legislation also gives carriers the confidence to sell 
     some terrorism policies, for which they are charging much 
     higher premiums. ``In the absence of future terrorist 
     attacks, such an approach could create `windfall' profits for 
     insurers, to the detriment of policyholders,'' says Fitch 
     Inc., which provides investors with financial analysis of the 
     insurance industry.
       Marsh & McLennan sees vast opportunity in this fast-
     changing environment. The company is primarily an insurance 
     broker, not an underwriter. As a result, it has limited 
     exposure to Sept. 11 property and liability claims. It took a 
     $173 million charge for the third quarter, which ended Sept. 
     30, to cover costs related to the attacks. A big piece of 
     that was for payments to families of its own injured and dead 
     employees.
       Marsh's Mr. Greenberg knows well the dangers of appearing 
     opportunistic in the wake of catastrophe. He gained this 
     experience after Hurricane Andrew hit Florida in 1992, which 
     until Sept. 11 was the industry's costliest disaster. Then a 
     vice president at his father's AIG, the younger Mr. Greenberg 
     wrote an internal memo saying that Andrew was ``an 
     opportunity to get price increases now.'' After the memo was 
     leaked to the media, Florida regulators imposed a moratorium 
     on premium-rate increases.
       This embarrassment didn't stop Jeffrey Greenberg, now 50 
     years old, and his subordinates at Marsh from swiftly 
     scouring the post-Sept. 11 business landscape for new 
     opportunities.
       The World Trade Center attacks were a devastating blow to 
     the company, which has its headquarters in midtown Manhattan. 
     About 1,900 Marsh employees worked in the twin towers. Within 
     an hour of the attacks, the company had set up a phone bank 
     to assemble information about the missing. Counseling 
     sessions and memorial services were held daily for weeks.


                           modest disruption

       From a business perspective, the disaster caused only 
     modest disruption for Marsh, which has 57,000 employees 
     world-wide. On the evening of Sept. 11, Mr. Davis, Marsh's 
     vice chairman and chief of its MMC Capital arm, sent a fax to 
     Mr. Greenberg's home that accounted for the unit's 
     employees--they were all safe--and suggested the formation of 
     a new subsidiary that would underwrite corporate policies. 
     ``We were absolutely thinking about the impact [of the 
     attacks] and what the opportunities were in front of us,'' 
     says Mr. Davis, who came to Marsh from Goldman Sachs three 
     years ago.
       At a Sept. 18 meeting, 20 executives from Marsh's operating 
     companies discussed the new terrain in their industry. 
     Participants noted the premium increases already being 
     announced and cancellations of terrorism coverage. Policy-
     holder demands was as strong as ever, meaning prices could 
     only rise.
       There was strong support for Mr. Davis's idea for a new 
     company. It wouldn't be the

[[Page 23331]]

     first time Marsh gave birth to an underwriter. In the mid-
     1980s, it launched Ace Ltd. and Exel Capital, now known as 
     XL. Those moves came in response to some established insurers 
     ceasing to write liability coverage in the wake of huge jury 
     awards for asbestos-related illnesses and big judgments 
     against corporate directors and officers. Both Ace and XL 
     went on to become publicly traded. Marsh retains small stakes 
     in them.
       Marsh raised its initial fundraising plan for the new 
     carrier by 50%, to $1.5 billion. But that still wasn't enough 
     to accommodate all of the investors lining up for a piece of 
     the action. GE's GE Asset Management unit and TIAA-CREF, the 
     national teachers' pension-fund manager, were among those 
     allowed to buy stakes. Many others were turned away.
       As the investor list was being winnowed, Mr. Greenberg was 
     stirring another pot. He called L. Paul Bremer, a former U.S. 
     ambassador at large for counterterrorism, who had joined 
     Marsh a year earlier. ``Funny you should ask'' Mr. Bremer 
     says he responded to Mr. Greenberg's query about new business 
     opportunities.
       Mr. Bremer had been working on a plan for a crisis-
     consulting practice for several months. ``It was clear to 
     both of us that he should accelerate the introduction of that 
     practice,'' Mr. Greenberg says.
       On Oct. 11, Marsh announced the formation of a new 
     consulting unit, with Mr. Bremer at its head. Two weeks 
     later, Marsh unveiled a partnership between its new unit and 
     Versar Inc., a counterterrorism-service provider. The 
     partnership will assess chemical and bioterrorism risks for 
     corporate clients.

  Mr. SESSIONS. Mr. Speaker, I yield 5 minutes to the gentleman from 
Louisiana (Mr. Baker), chairman of the Subcommittee on Capital Markets, 
Insurance and Government Sponsored Enterprises, one of two gentlemen 
who have worked diligently to see to it that this is a good bill, the 
other being the chairman of the full Committee on Financial Services, 
the gentleman from Ohio (Mr. Oxley).
  Mr. BAKER. Mr. Speaker, I thank the gentleman for his courtesy and 
generosity with the time.
  I wish to extend my appreciation and commend the chairman of the 
Committee on Financial Services, the gentleman from Ohio (Mr. Oxley), 
for his perspicacious leadership on this matter; to the chairman of the 
Committee on the Judiciary, the gentleman from Wisconsin (Mr. 
Sensenbrenner), for his visionary legal acumen; and to the gentleman 
from New York (Mr. LaFalce) and the gentleman from Pennsylvania (Mr. 
Kanjorski) for their critical suggestions at important steps along the 
way to craft a proposal which, in essence, solves, to a great extent, 
the potential exposure for further liability as a result of future 
terrorist attacks.
  I cannot, however, today stand without responding to the remarks of 
the minority leader who said, ``We don't get it.'' I am appalled that 
in this instance, when faced with legislation of such magnitude, he 
would suggest that Members of Congress do not know people who are 
without medical insurance. I have a family member this morning in the 
hospital without private medical insurance. To suggest that there are 
those of us in Congress who do not know people who are unemployed, that 
we do not get it because we do not know the unemployed, I would just 
advise that in my extended family there have been people on 
unemployment through no fault of their own.
  We are here today to respond to a crisis, a national crisis of 
proportion this Nation has never seen. The vision of the morning of 
September 11 will never vanish from our minds, and what are we to do in 
response to this? To say we should postpone, delay, or otherwise 
obfuscate the ability to respond to this crisis when it is so clear, I 
cannot conceive that any Member of this Congress, despite their 
objections to the elements contained in this legislation, would say no 
to this process. This is a process. We all know there will be a very 
difficult conference committee at which all of these issues will be 
visited at length.
  And let us speak to the one point of contention which brings us to 
this difficult moment, that is of liability reform. This House has 
adopted the provisions contained in the proposal before us today not 
once but twice. This House. I would point to the fact that the Price-
Anderson Act was renewed by this Congress by a voice vote last week, 
which contains similar provisions.
  Some have said we should not buy this pig in a poke because we do not 
know what is in it. I would point out this Congress has adopted the 
Swine Flu Act, which has the same liability provisions that this act 
contains.
  There is no legitimate platform from which a Member can stand on this 
floor and say we should not act. Member after Member has said the base 
elements of this legislation are, indeed, acceptable to respond to the 
crisis we potentially face. But if we do not act, the concerns 
expressed for those unemployed and uninsured will only be aggravated, 
to a great extent, because there will be more unemployed and uninsured 
as economic opportunity is snatched away from the American economy by 
our failure to act.
  Let us make this clear: this is not an insurance bailout. I do not 
care if an insurance company makes a profit or not. That is not my job. 
I do not care whether a trial lawyer gets his 30 percent cut off an 
unfortunate victim as a result of loss. That is not my problem. What I 
care about is how American taxpayer resources are used to meet a crisis 
of this magnitude, and to ensure that every penny extended in times of 
crisis are repaid to the American taxpayer.
  That is what this bill does. It is an extraordinary first step. It is 
to say we will respond timely and appropriately. But when an insurance 
company is making a $10 or $20 or $30 billion annual profit, they are 
going to pay us back. Now, what is wrong with that? And my colleagues 
are going to tell me today that they do not want to act to preclude the 
possibility of economic calamity because we have a dispute whether the 
trial lawyers get 20 percent or a third or half?
  We will hash that out in conference committee. We will, in all 
likelihood, have a bill my colleagues can support with enthusiasm. But 
to say no today is to walk away from our responsibility as a Member of 
the United States Congress to respond to terrorist assaults on the 
United States sovereign Nation.
  Did the firefighters, responding to the call on September 11, check 
their employment forms or see what possibility there might be for some 
liability provision? Did they think about what wage they were going to 
get paid? No. They responded. They acted. There was a crisis, and they 
put their lives on the line. We are not even close to considering such 
a heroic act. We are simply being asked to be stewards of the American 
taxpayers' resources and to provide for a method of response should, 
should, some untoward heinous act occur in the future.

                              {time}  1215

  To fail to take this modest step would be a serious disappointment to 
the American taxpayer. I hope this House can rise above that.
  Ms. SLAUGHTER. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I am going to call a vote on the previous question and 
ask for its defeat; and if it is defeated, I am going to offer an 
amendment to the rule.
  My amendment will make in order an amendment by the gentleman from 
New York (Mr. Rangel) or his designee which would provide health and 
unemployment compensation relief to workers who have lost their jobs.
  Mr. Speaker, nearly 3 months have passed since the tragic events of 
September 11, and since that time thousands and thousands of workers 
have lost their jobs, and they need relief. Their unemployment benefits 
will run out, and they have no health care. We passed an airline 
bailout the week after the terrorist attacks, and promises were made at 
that time by the Republican leadership that a worker relief package 
would follow the following the week. Today, weeks later, we are passing 
legislation that would provide relief to the insurance industry, still 
leaving no help for the workers. They desperately need our help, they 
need it now, and I urge a ``no'' vote on the previous question.
  Mr. Speaker, I ask unanimous consent that the text of the amendment 
be printed in the Record immediately before the vote on the previous 
question.

[[Page 23332]]

  The SPEAKER pro tempore (Mr. Shimkus). Is there objection to the 
request of the gentlewoman from New York?
  There was no objection.
  Ms. SLAUGHTER. Mr. Speaker, I yield back the balance of my time.
  Mr. SESSIONS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, we have heard a vigorous debate today about this issue. 
We have heard a good number of speakers say that we did it the hard 
way. They would have done it the easy way. I think they are right; we 
did do it the hard way. But I would like to be accused of doing it the 
right way, doing what is in the best interest of not only the taxpayer, 
but also in the best interest of people who have needs and who need to 
make sure that their insurance coverage is done right.
  Mr. Speaker, Members have heard the debate on this side from some of 
our best and our brightest. The gentleman from Ohio (Chairman Oxley), 
the gentleman from Wisconsin (Chairman Sensenbrenner), and the 
gentleman from Louisiana (Chairman Baker) talk about a very difficult 
issue, and they have delivered on that issue. They have worked with the 
White House and President Bush; and President Bush is proud of the work 
that they have done.
  So whether it was done the hard way or the easy way, it did not 
matter to me and did not matter to us. We have done it the right way.
  Mr. Speaker, I can proudly ask my colleagues to support not only this 
fair rule, but one which has the underlying legislation which is good 
for all of America and will ensure that the confidence and the 
stability of this country is held together. I am very proud of what we 
have done.
  Mr. BAKER. Mr. Speaker, I congratulate and thank Mr. Sessions, 
Chairman Dreier and all the members of the Rules Committee for 
responding to the need to act swiftly on the Terrorism Risk Protection 
Act by crafting a fair rule that paves the way for our consideration of 
the Bill on the House floor today. I also wish to thank Chairman Oxley 
for his leadership on this issue and to recognize the efforts of 
Ranking Members LaFalce and Kanjorski.
  The attacks on New York City and Washington, D.C. on September 11, 
2001, resulted in a large number of deaths and injuries, the 
destruction and damage to buildings, and the interruption of business 
operations. These consequences of the attacks were not only a human 
tragedy, they were also a financial disaster. The attacks inflicted 
possibly the largest losses ever incurred by insurers and reinsurers in 
a single day. Estimates of losses start at about $40 billion and vary 
significantly upward from there. Fortunately, the insurance and 
reinsurance industry have the capital capacity to cover such losses and 
have committed to pay the losses due to the attacks.
  However, with the events of September 11, 2001, there is great 
uncertainty from an underwriter's perspective. Commercial property and 
casualty insurance companies have little to no experience in 
underwriting for the types of terrorist attacks that we experienced in 
New York City and Washington, D.C. The attacks set a new and very high 
level for potential severity. Additionally, there is an inability for 
underwriters to forecast the frequency or nature of future attacks. As 
a result of this uncertainty, many commercial property and casualty 
insurers and reinsurers have begun excluding terrorism risk coverage 
from their policies or providing very limited coverage at high costs.
  The potential unavailability of terrorism risk coverage for 
businesses comes at precisely the time when there is the greatest 
demand for the insurance. Moreover, insurance coverage is almost 
universally a requirement of any commercial lending contract. Lenders 
will simply not provide financing for new or existing construction or 
other operations without certainty that the properties and businesses 
that they are funding have adequate insurance to protect the lenders' 
investment. Thus, the lack of available insurance for terrorism risk 
has adverse consequences that would spread throughout the entire 
economy and stifle if not halt its growth.
  That is why I come before you today in strong support of H.R. 3210, 
the Terrorism Risk Protection Act. The temporary risk spreading program 
established by this Act is a bridge to allow the private market to 
develop the mechanisms to provide terrorism risk coverage at reasonable 
cost and sufficient levels, while guaranteeing that any federal 
assistance from the U.S. taxpayer in the interim is paid back by the 
insurance industry and those that benefit from the program.
  I urge my fellow colleagues to support this rule and to vote yes on 
the bill to prevent any further slowdown of our dynamic national 
economy.
  Mr. SESSIONS. Mr. Speaker, I yield back the balance of my time, and I 
move the previous question on the resolution.
  The material previously referred to by Ms. Slaughter is as follows:

 Previous Question for Rule on H.R. 3210, Terrorism Risk Insurance Act

       At the end of the resolution add the following new section:
       ``Sec 2. Notwithstanding any other provision of this 
     resolution, it shall be in order without intervention of any 
     point of order following disposition of the further amendment 
     printed in the report to accompany the resolution to consider 
     the further amendment printed in Section 3 of this resolution 
     if offered by Representative Rangel or his designee. The 
     amendment shall be considered as read; shall be debatable for 
     one hour, equally divided between a proponent and an 
     opponent, shall not be subject to amendment, and shall not be 
     subject to a demand for a division of the question. The 
     previous question shall be considered as ordered on the 
     amendment.
       Sec. 3. The text of the amendment is as follows;


                    AMENDMENT OFFERED BY MR. RANGEL

       Insert at the end the following:

     SECTION 1. SHORT TITLE, ETC.

       (a) Short Title.--This Act may be cited as the ``Fiscal 
     Stimulus and Worker Relief Act of 2001''.

                        TITLE II--WORKER RELIEF

            Subtitle A--Temporary Unemployment Compensation

Sec. 201. Short title.
Sec. 202. Federal-State agreements.
Sec. 203. Temporary Supplemental Unemployment Compensation Account.
Sec. 204. Payments to States having agreements under this subtitle.
Sec. 205. Financing provisions.
Sec. 206. Fraud and overpayments.
Sec. 207. Definitions.
Sec. 208. Applicability.

     Subtitle B--Premium Assistance for COBRA Continuation Coverage

Sec. 211. Premium assistance for COBRA continuation coverage.

   Subtitle C--Additional Assistance for Temporary Health Insurance 
                                Coverage

Sec. 221. Optional temporary medicaid coverage for certain uninsured 
              employees.
Sec. 222. Optional temporary coverage for unsubsidized portion of COBRA 
              continuation premiums.

                        TITLE II--WORKER RELIEF

            Subtitle A--Temporary Unemployment Compensation

     SEC. 201. SHORT TITLE.

       This subtitle may be cited as the ``Temporary Unemployment 
     Compensation Act of 2001''.

     SEC. 202. FEDERAL-STATE AGREEMENTS.

       (a) In General.--Any State which desires to do so may enter 
     into and participate in an agreement under this subtitle with 
     the Secretary of Labor (hereinafter in this subtitle referred 
     to as the ``Secretary''). Any State which is a party to an 
     agreement under this subtitle may, upon providing 30 days' 
     written notice to the Secretary, terminate such agreement.
       (b) Provisions of Agreement.--
       (1) In general.--Any agreement under subsection (a) shall 
     provide that the State agency of the State will make--
       (A) payments of regular compensation to individuals in 
     amounts and to the extent that they would be determined if 
     the State law were applied with the modifications described 
     in paragraph (2), and
       (B) payments of temporary supplemental unemployment 
     compensation to individuals who--
       (i) have exhausted all rights to regular compensation under 
     the State law,
       (ii) do not, with respect to a week, have any rights to 
     compensation (excluding compensation) under the State law of 
     any other State (whether one that has entered into an 
     agreement under this subtitle or otherwise) nor compensation 
     under any other Federal law (other than under the Federal-
     State Extended Unemployment Compensation Act of 1970), and 
     are not paid or entitled to be paid any additional 
     compensation under any State or Federal law, and
       (iii) are not receiving compensation with respect to such 
     week under the unemployment compensation law of Canada.
       (2) Modifications described.--The modifications described 
     in this paragraph are as follows:
       (A) An individual shall be eligible for regular 
     compensation if the individual would be so eligible, 
     determined by applying--
       (i) the base period that would otherwise apply under the 
     State law if this subtitle had not been enacted, or
       (ii) a base period ending at the close of the calendar 
     quarter most recently completed

[[Page 23333]]

     before the date of the individual's application for benefits.

     whichever results in the greater amount.
       (B) An individual shall not be denied regular compensation 
     under the State law's provisions relating to availability for 
     work, active search for work, or refusal to accept work, 
     solely by virtue of the fact that such individual is seeking, 
     or available for, only part-time (and not full-time) work.
       (C)(i) Subject to clause (ii), the amount of regular 
     compensation (including dependents' allowances) payable for 
     any week shall be equal to the amount determined under the 
     State law (before the application of this subparagraph), plus 
     an additional--
       (I) 25 percent, or
       (II) $65,

     whichever is greater.
       (ii) In no event may the total amount determined under 
     clause (i) with respect to any individual exceed the average 
     weekly insured wages of that individual in that calendar 
     quarter of the base period in which such individual's insured 
     wages were the highest (or one such quarter if his wages were 
     the same for more than one such quarter).
       (c) Nonreduction Rule.--Under the agreement, subsection 
     (b)(2)(C) shall not apply (or shall cease to apply) with 
     respect to a State upon a determination by the Secretary that 
     the method governing the computation or regular compensation 
     under the State law of that State has been modified in a way 
     such that--
       (1) the average weekly amount of regular compensation which 
     will be payable during the period of the agreement 
     (determined disregarding the modifications described in 
     subsection (b)(2)) will be less than
       (2) the average weekly amount of regular compensation which 
     would otherwise have been payable during such period under 
     the State law, as in effect on September 11, 2001.
       (d) Coordination Rules.--
       (1) Regular compensation payable under a federal law.--The 
     modifications described in subsection (b)(2) shall also apply 
     in determining the amount of benefits payable under any 
     Federal law to the extent that those benefits are determined 
     by reference to regular compensation payable under the State 
     law of the State involved.
       (2) TSUC to serve as second-tier benefits.--Notwithstanding 
     any other provision of law, extended benefits shall not be 
     payable to any individual for any week for which temporary 
     supplemental unemployment compensation is payable to such 
     individual.
       (e) Exhaustion of Benefits.--For purposes of subsection 
     (b)(1)(B)(i), an individual shall be considered to have 
     exhausted such individual's rights to regular compensation 
     under a State law when--
       (1) no payments of regular compensation can be made under 
     such law because such individual has received all regular 
     compensation available to such individual based on employment 
     or wages during such individual's base period, or
       (2) such individual's rights to such compensation have been 
     terminated by reason of the expiration of the benefit year 
     with respect to which such rights existed.
       (f) Weekly Benefit Amount, Terms and Conditions, Etc. 
     Relating to TSUC.--For purposes of any agreement under this 
     subtitle--
       (1) the amount of temporary supplemental unemployment 
     compensation which shall be payable to an individual for any 
     week of total unemployment shall be equal to the amount of 
     regular compensation (including dependents' allowances) 
     payable to such individual under the State law for a week for 
     total unemployment during such individual's benefit year,
       (2) the terms and conditions of the State law which apply 
     to claims for regular compensation and to the payment thereof 
     shall apply to claims for temporary supplemental unemployment 
     compensation and the payment thereof, except where 
     inconsistent with the provisions of this subtitle or with the 
     regulations or operating instructions of the Secretary 
     promulgated to carry out this subtitle, and
       (3) the maximum amount of temporary supplemental 
     unemployment compensation payable to any individual for whom 
     a temporary supplemental unemployment compensation account is 
     established under section 203 shall not exceed the amount 
     established in such account for such individual.

     SEC. 203. TEMPORARY SUPPLEMENTAL UNEMPLOYMENT COMPENSATION 
                   ACCOUNT.

       (a) In General.--Any agreement under this subtitle shall 
     provide that the State will establish, for each eligible 
     individual who files an application for temporary 
     supplemental unemployment compensation, a temporary 
     supplemental unemployment compensation account.
       (b) Amount in Account.--
       (1) In general.--The amount established in an account under 
     subsection (a) shall be equal to the product obtained by 
     multiplying an individual's weekly benefit amount by the 
     applicable factor under paragraph (3).
       (2) Weekley benefit amount.--For purposes of this 
     subsection, an individual's weekly benefit amount for any 
     week is the amount of regular compensation (including 
     dependents' allowances) under the State law payable to such 
     individual for a week of total unemployment in such 
     individual's benefit year.
       (3) Applicable factor.--
       (A) General rule.--The applicable factor under this 
     paragraph is 13, unless the individual's benefit year begins 
     or ends during a period of high unemployment within such 
     individual's State, in which case the applicable factor is 
     26.
       (B) Period of high unemployment.--For purposes of this 
     paragraph, a period of high unemployment within a State shall 
     begin and end, if at all, in a way (to be set forth in the 
     State's agreement under this subtitle) similar to the way in 
     which an extended benefit period would under section 203 of 
     the Federal-State Extended Unemployment Compensation Act of 
     1970, subject to the following:
       (a) In General.--Any State which desires to do so may enter 
     into and participate in an agreement under this subtitle with 
     the Secretary of Labor (hereinafter in this subtitle referred 
     to as the ``Secretary''). Any State which is a party to an 
     agreement under this subtitle may, upon providing 30 days' 
     written notice to the Secretary, terminate such agreement.
       (b) Provisions of Agreement.--
       (1) In general.--Any agreement under subsection (a) shall 
     provide that the State agency of the State will make--
       (A) payments of regular compensation to individuals in 
     amounts and to the extent that they would be determined if 
     the State law were applied with the modifications described 
     in paragraph (2), and
       (B) payments of temporary supplemental unemployment 
     compensation to individuals who--
       (i) have exhausted all rights to regular compensation under 
     the State law,
       (ii) do not, with respect to a week, have any rights to 
     compensation (excluding extended compensation) under the 
     State law of any other State (whether one that has entered 
     into an agreement under this subtitle or otherwise) nor 
     compensation under any other Federal law (other than under 
     the Federal-State Extended Unemployment Compensation Act of 
     1970), and are not paid or entitled to be paid any additional 
     compensation under any State or Federal law, and
       (iii) are not receiving compensation with respect to such 
     week under the unemployment compensation law of Canada.
       (2) Modifications described.--The modifications described 
     in this paragraph are as follows:
       (A) An individual shall be eligible for regular 
     compensation if the individual would be so eligible, 
     determined by applying--
       (i) the base period that would otherwise apply under the 
     State law if this subtitle had not been enacted, or
       (ii) a base period ending at the close of the calendar 
     quarter most recently completed before the date of the 
     individual's application for benefits,
       whichever results in the greater amount.
       (B) An individual shall not be denied regular compensation 
     under the State law's provisions relating to availability for 
     work, active search for work, or refusal to accept work, 
     solely by virtue of the fact that such individual is seeking, 
     or available for, only part-time (and not full-time) work.
       (C)(i) Subject to clause (ii), the amount of regular 
     compensation (including dependents' allowances) payable for 
     any week shall be equal to the amount determined under the 
     State law (before the application of this subparagraph), plus 
     an additional--
       (I) 25 percent, or
       (II) $65,
     whichever is greater.
       (ii) In no event may the total amount determined under 
     clause (i) with respect to any individual exceed the average 
     weekly insured wages of that individual in that calendar 
     quarter of the base period in which such individual's insured 
     wages were the highest (or one such quarter if his wages were 
     the same for more than one such quarter).
       (c) Nonreduction Rule.--Under the agreement, subsection 
     (b)(2)(C) shall not apply (or shall cease to apply) with 
     respect to a State upon a determination by the Secretary that 
     the method governing the computation of regular compensation 
     under the State law of that State has been modified in a way 
     such that--
       (1) the average weekly amount of regular compensation which 
     will be payable during the period of the agreement 
     (determined disregarding the modifications described in 
     subsection (b)(2)) will be less than
       (2) the average weekly amount of regular compensation which 
     would otherwise have been payable during such period under 
     the State law, as in effect on September 11, 2001.
       (d) Coordination Rules.--
       (1) Regular compensation payable under a federal law.--The 
     modifications described in subsection (b)(2) shall also apply 
     in determining the amount of benefits payable under any 
     Federal law to the extent that those benefits are determined 
     by reference to regular compensation payable under the State 
     law of the State involved.
       (2) TSUC to serve as second-tier benefits.--Notwithstanding 
     any other provision of law, extended benefits shall not be 
     payable to any individual for any week for which temporary 
     supplemental unemployment compensation is payable to such 
     individual.

[[Page 23334]]

       (e) Exhaustion of Benefits.--For purposes of subsection 
     (b)(1)(B)(i), an individual shall be considered to have 
     exhausted such individual's rights to regular compensation 
     under a State law when--
       (1) no payments of regular compensation can be made under 
     such law because such individual has received all regular 
     compensation available to such individual based on employment 
     or wages during such individual's base period, or
       (2) such individual's rights to such compensation have been 
     terminated by reason of the expiration of the benefit year 
     with respect to which such rights existed.
       (f) Weekly Benefit Amount, Terms and Conditions, Etc, 
     Relating to TSUC.--For purposes of any agreement under this 
     subtitle--
       (1) the amount of temporary supplemental unemployment 
     compensation which shall be payable to an individual for any 
     week of total unemployment shall be equal to the amount of 
     regular compensation (including dependents' allowances) 
     payable to such individual under the State law for a week for 
     total unemployment during such individual's benefit year,
       (2) the term and conditions of the State law which apply to 
     claims for regular compensation and to the payment thereof 
     shall apply to claims for temporary supplemental unemployment 
     compensation and the payment thereof, except where 
     inconsistent with the provisions of this subtitle or with the 
     regulations or operating instructions of the Secretary 
     promulgated to carry out this subtitle, and
       (3) the maximum amount of temporary supplemental 
     unemployment compensation payable to any individual for whom 
     a temporary supplemental unemployment compensation account is 
     established under section 203 shall not exceed the amount 
     established in such account for such individual.

     SEC. 203. TEMPORARY SUPPLEMENTAL UNEMPLOYMENT COMPENSATION 
                   ACCOUNT.

       (a) In General.--Any agreement under this subtitle shall 
     provide that the State will establish, for each eligible 
     individual who files an application for temporary 
     supplemental unemployment compensation, a temporary 
     supplemental unemployment compensation account.
       (b) Amount in Account.--
       (1) In general.--The amount established in an account under 
     subsection (a) shall be equal to the product obtained by 
     multiplying an individual's weekly benefit amount by the 
     applicable factor under paragraph (3).
       (2) Weekly benefit amount.--For purposes of this 
     subsection, an individual's weekly benefit amount for any 
     week is the amount of regular compensation (including 
     dependents' allowances) under the State law payable to such 
     individual for a week of total unemployment in such 
     individual's benefit year.
       (3) Applicable factors.--
       (A) General rule.--The applicable factor under this 
     paragraph is 13, unless the individual's benefit year begins 
     or ends during a period of high unemployment within such 
     individual's State, in which case the applicable factor is 
     26.
       (B) Period of high unemployment.--For purposes of this 
     paragraph, a period of high unemployment within a State shall 
     begin and end, if at all, in a way (to be set forth in the 
     State's agreement under this subtitle) similar to the way in 
     which an extended benefit period would under section 203 of 
     the Federal-State Extended Unemployment Compensation Act of 
     1970, subject to the following:
       (i) To determine if there is a State ``on'' or ``off'' 
     indicator, apply section 203(f) of such Act, but--
       (I) substitute ``5 percent'' for ``6.5 percent'' in 
     paragraph (1)(A)(i) thereof, and
       (II) disregard paragraph (a)(A)(ii) thereof and the last 
     sentence of paragraph (1) thereof.
       (ii) To determine the beginning and ending dates of a 
     period of high unemployment within a State, apply section 
     203(a) and (b) of such Act, except that--
       (I) in applying such section 203(a), deem paragraphs (1) 
     and (2) thereof to be amended by striking ``the third week 
     after'', and
       (II) in applying such section 203(b), deem paragraph (1)(A) 
     thereof amended by striking ``thirteen'' and inserting 
     ``twenty-six'' and paragraph (1)(B) thereof amended by 
     striking ``fourteenth'' and inserting ``twenty-seventh''.
       (4) Rule of construction.--For purposes of any computation 
     under paragraph (1) (and any determination of amount under 
     section 202(f)(1)), the modification described in section 
     202(b)(2)(C) (relating to increased benefits) shall be deemed 
     to have been in effect with respect to the entirety of the 
     benefit year involved.
       (c) Eligibility Period.--An individual whose applicable 
     factor under subsection (b)(3) is 26 shall be eligible for 
     temporary supplemental unemployment compensation for each 
     week of total unemployment in his benefit year which begins 
     in the State's period of high unemployment and, if his 
     benefit year ends within such period, any such weeks 
     thereafter which begin in such period of high unemployment, 
     not to exceed a total of 26 weeks.

     SEC. 204. PAYMENTS TO STATES HAVING AGREEMENTS UNDER THIS 
                   SUBTITLE.

       (a) General Rule.--There shall be paid to each State which 
     has entered into an agreement under this subtitle an amount 
     equal to--
       (1) 100 percent of any regular compensation made payable to 
     individuals by such State by virtue of the modifications 
     which are described in section 202(b)(2) and deemed to be in 
     effect with respect to such State pursuant to section 
     202(b)(1)(A),
       (2) 100 percent of any regular compensation--
       (A) which is paid to individuals by such State by reason of 
     the fact that its State law contains provisions comparable to 
     the modifications described in section 202(b)(2)(A)-(B), but 
     only
       (B) to the extent that those amounts would, if such amounts 
     were instead payable by virtue of the State law's being 
     deemed to be so modified pursuant to section 202(b)(1)(A), 
     have been reimbursable under paragraph (1), and
       (3) 100 percent of the temporary supplemental unemployment 
     compensation paid to individuals by the State pursuant to 
     such agreement.
       (b) Determination of Amount.--Sums under subsection (a) 
     payable to any State by reason of such State having an 
     agreement under this subtitle shall be payable, either in 
     advance or by way of reimbursement (as may be determined by 
     the Secretary), in such amounts as the Secretary estimates 
     the State will be entitled to receive under this subtitle for 
     each calendar month, reduced or increased, as the case may 
     be, by any amount by which the Secretary finds that the 
     Secretary's estimates for any prior calendar month were 
     greater or less than the amounts which should have been paid 
     to the State. Such estimates may be made on the basis of such 
     statistical, sampling, or other method as may be agreed upon 
     by the Secretary and the State agency of the State involved.
       (c) Administrative Expenses, Etc.--There is hereby 
     appropriated out of the employment security administration 
     account of the Unemployment Trust Fund (as established by 
     section 901(a) of the Social Security Act) $500,000,000 to 
     reimburse States for the costs of the administration of 
     agreements under this subtitle (including any improvements in 
     technology in connection therewith) and to provide 
     reemployment services to unemployment compensation claimants 
     in States having agreements under this subtitle. Each State's 
     share of the amount appropriated by the preceding sentence 
     shall be determined by the Secretary according to the factors 
     described in section 302(a) of the Social Security Act and 
     certified by the Secretary to the Secretary of the Treasury.

     SEC. 205. FINANCING PROVISIONS.

       (a) In General.--Funds in the extended unemployment 
     compensation account (as established by section 905(a) of the 
     Social Security Act), and the Federal unemployment account 
     (as established by section 904(g) of the Social Security 
     Act), of the Unemployment Trust Fund shall be used, in 
     accordance with subsection (b), for the making of payments 
     (described in section 204(a)) to States having agreements 
     entered into under this subtitle.
       (b) Certification.--The Secretary shall from time to time 
     certify to the Secretary of the Treasury for payment to each 
     State the sums described in section 204(a) which are payable 
     to such State under this subtitle. The Secretary of the 
     Treasury, prior to audit or settlement by the General 
     Accounting Office, shall make payments to the State in 
     accordance with such certification by transfers from the 
     extended unemployment compensation account (or, to the extent 
     that there are insufficient funds in that account, from the 
     Federal unemployment account) to the account of such State in 
     the Unemployment Trust Fund.

     SEC. 206. FRAUD AND OVERPAYMENTS.

       (a) In General.--If an individual knowingly has made, or 
     caused to be made by another, a false statement or 
     representation of a material fact, or knowingly has failed, 
     or caused another to fail, to disclose a material fact, and 
     as a result of such false statement or representation or of 
     such nondisclosure such individual has received any regular 
     compensation or temporary supplemental unemployment 
     compensation under this subtitle to which he was not 
     entitled, such individual--
       (1) shall be ineligible for any further benefits under this 
     subtitle in accordance with the provisions of the applicable 
     State unemployment compensation law relating to fraud in 
     connection with a claim for unemployment compensation, and
       (2) shall be subject to prosecution under section 1001 of 
     title 18, United States Code.
       (b) Repayment.--In the case of individuals who have 
     received any regular compensation or temporary supplemental 
     unemployment compensation under this subtitle to which they 
     were not entitled, the State shall require such individuals 
     to repay those benefits to the State agency, except that the 
     State agency may waive such repayment if it determines that--
       (1) the payment of such benefits was without fault on the 
     part of any such individual, and

[[Page 23335]]

       (2) such repayment would be contrary to equity and good 
     conscience.
       (c) Recovery by State Agency.--
       (1) In general.--The State agency may recover the amount to 
     be repaid, or any part thereof, by deductions from any 
     regular compensation or temporary supplemental unemployment 
     compensation payable to such individual under this subtitle 
     or from any unemployment compensation payable to such 
     individual under any Federal unemployment compensation law 
     administered by the State agency or under any other Federal 
     law administered by the State agency which provides for the 
     payment of any assistance or allowance with respect to any 
     week of unemployment, during the 3-year period after the date 
     such individuals received the payment of the regular 
     compensation or temporary supplemental unemployment 
     compensation to which they were not entitled, except that no 
     single deduction may exceed 50 percent of the weekly benefit 
     amount from which such deduction is made.
       (2) Opportunity for hearing.--No repayment shall be 
     required, and no deduction shall be made, until a 
     determination has been made, notice thereof and an 
     opportunity for a fair hearing has been given to the 
     individual, and the determination has become final.
       (d) Review.--Any determination by a State agency under this 
     section shall be subject to review in the same manner and to 
     the same extent as determinations under the State 
     unemployment compensation law, and only in that manner and to 
     that extent.

     SEC. 207. DEFINITIONS.

       For purposes of this subtitle:
       (1) In general.--The terms ``compensation'', ``regular 
     compensation'', ``extended compensation'', ``additional 
     compensation'', ``benefit year'', ``base period'', ``State'', 
     ``State agency'', ``State law'', and ``week'' have the 
     respective meanings given such terms under section 205 of the 
     Federal-State Extended Unemployment Compensation Act of 1970, 
     subject to paragraph (2).
       (2) State law and regular compensation.--In the case of a 
     State entering into an agreement under this subtitle--
       (A) ``State law'' shall be considered to refer to the State 
     law of such State, applied in conformance with the 
     modifications described in section 202(b)(2), subject to 
     section 202(c), and
       (B) ``regular compensation'' shall be considered to refer 
     to such compensation, determined under its State law (applied 
     in the manner described in subparagraph (A)),

     except as otherwise provided or where the context clearly 
     indicates otherwise.

     SEC. 208. APPLICABILITY.

       (a) In General.--An agreement entered into under this 
     subtitle shall apply to weeks of unemployment--
       (1) beginning after the date on which such agreement is 
     entered into, and
       (2) ending before January 1, 2003.
       (b) Specific Rules.--Under such an agreement--
       (1) the modification described in section 202(b)(2)(A) 
     (relating to alternative base periods) shall not apply except 
     in the case of initial claims filed after September 11, 2001,
       (2) the modifications described in section 202(b)(2) (B)-
     (C) (relating to part-time employment and increased benefits, 
     respectively) shall apply to weeks of unemployment (described 
     in subsection (a)), irrespective of the date on which an 
     individual's claim for benefits is filed, and
       (3) the payments described in section 202(b)(1)(B) 
     (relating to temporary supplemental unemployment 
     compensation) shall not apply except in the case of 
     individuals exhausting their rights to regular compensation 
     (as described in clause (i) thereof) after September 11, 
     2001.

     Subtitle B--Premium Assistance for COBRA Continuation Coverage

     SEC. 211. PREMIUM ASSISTANCE FOR COBRA CONTINUATION COVERAGE.

       (a) Establishment.--
       (1) In general.--Not later than 60 days after the date of 
     enactment of this Act, the Secretary of the Treasury, in 
     consultation with the Secretary of Labor, shall establish a 
     program under which premium assistance for COBRA continuation 
     coverage shall be provided for qualified individuals under 
     this section.
       (b) Determination of Amount.--Sums under subsection (a) 
     payable to any State by reason of such State having an 
     agreement under this subtitle shall be payable, either in 
     advance or by way of reimbursement (as may be determined by 
     the Secretary), in such amounts as the Secretary estimates 
     the State will be entitled to receive under this subtitle for 
     each calendar month, reduced or increased, as the case may 
     be, by any amount by which the Secretary finds that the 
     Secretary's estimates for any prior calendar month were 
     greater or less than the amounts which should have been paid 
     to the State. Such estimates may be made on the basis of such 
     statistical, sampling, or other method as may be agreed upon 
     by the Secretary and the State agency of the State involved.
       (c) Administrative Expenses, Etc.--There is hereby 
     appropriated out of the employment security administration 
     account of the Unemployment Trust Fund (as established by 
     section 901(a) of the Social Security Act) $500,000,000 to 
     reimburse States for the costs of the administration of 
     agreements under this subtitle (including any improvements in 
     technology in connection therewith) and to provide 
     reemployment services to unemployment compensation claimants 
     in States having agreements under this subtitle. Each State's 
     share of the amount appropriated by the proceeding sentence 
     shall be determined by the Secretary according to the factors 
     described in section 302(a) of the Social Security Act and 
     certified by the Secretary to the Secretary of the Treasury.

     SEC. 205. FINANCING PROVISIONS.

       (a) In General.--Funds in the extended unemployment 
     compensation account (as established by section 905(a) of the 
     Social Security Act), and the Federal unemployment account 
     (as established by section 904(g) of the Social Security 
     Act), of the Unemployment Trust Fund shall be used, in 
     accordance with subsection (b), for the making of payments 
     (described in section 204(a)) to States having agreements 
     entered into under this subtitle.
       (b) Certification.--The Secretary shall from time to time 
     certify to the Secretary of the Treasury for payment to each 
     State the sums described in section 204(a) which are payable 
     to such State under this subtitle. The Secretary of the 
     Treasury, prior to audit or settlement by the General 
     Accounting Office, shall make payments to the State in 
     accordance with such certification by transfers from the 
     extended unemployment compensation account (or, to the extent 
     that there are insufficient funds in that account, from the 
     Federal unemployment account) to the account of such State in 
     the Unemployment Trust Fund.

     SEC. 206. FRAUD AND OVERPAYMENTS.

       (a) In General.--If an individual knowingly has made, or 
     caused to be made by another, a false statement or 
     representation of a material fact, or knowingly has failed, 
     or caused another to fail, to disclose a material fact, and 
     as a result of such false statement or representation or of 
     such nondisclosure such individual has received any regular 
     compensation or temporary supplemental unemployment 
     compensation under this subtitle to which he was not 
     entitled, such individual--
       (1) shall be ineligible for any further benefits under this 
     subtitle in accordance with the provisions of the applicable 
     State unemployment compensation law relating to fraud in 
     connection with a claim for unemployment compensation, and
       (2) shall be subject to prosecution under section 1001 of 
     title 18, United States Code.
       (b) Repayment.--In the case of individuals who have 
     received any regular compensation or temporary8 supplemental 
     unemployment compensation under this subtitle to which they 
     were not entitled, the State shall require such individuals 
     to repay those benefits to the State agency, except that the 
     State agency may waive such repayment if it determines that--
       (1) the payment of such benefits was without fault on the 
     part of any such individual, and
       (2) such repayment would be contrary to equity and good 
     conscience.
       (c) Recovery by State Agency.--
       (1) In general.--The State agency may recover the amount to 
     be repaid, or any part thereof, by deductions from any 
     regular compensation or temporary supplemental unemployment 
     compensation payable to such individual under this subtitle 
     or from any unemployment compensation payable to such 
     individual under any Federal unemployment compensation law 
     administered by the State agency or under any Federal law 
     administered by the State agency which provides for the 
     payment of any assistance or allowance with respect to any 
     week of unemployment, during the 3-year period after the date 
     such individual received the payment of the regular 
     compensation or temporary supplemental unemployment 
     compensation to which they were not entitled, except that no 
     single deduction may exceed 50 percent of the weekly benefit 
     from which such deduction is made.
       (4) Opportunity for hearing.--No repayment shall be 
     required, and no deduction shall be made, until a 
     determination has been made, notice thereof and an 
     opportunity for a fair hearing has been given to the 
     individual, and the determination has become final.
       (d) Review.--Any determination by a State agency under this 
     section shall be subject to review in the same manner and to 
     the same extent as determinations under the State 
     unemployment compensation law, and only in that manner and to 
     that extent.

     SEC. 207. DEFINITIONS.

       For purposes of this subtitle:
       (1) In general.--The terms ``compensation'', ``regular 
     compensation'', extended compensation'', ``additional 
     compensation'', benefit year'', base period'', ``State'' 
     ``State agency'', State law'', and ``week'' have the 
     respective meanings given such terms under section 205 of the 
     Federal-State Extended Unemployment Compensation Act of 1970, 
     subject to paragraph (2).
       (2) State law and regular compensation.--In the case of a 
     State entering into an agreement under this subtitle--
       (A) ``State law'' shall be considered to refer to the State 
     law of such State, applied in conformance with the 
     modifications described in section 202(b)(b), subject to 
     section 202(c), and

[[Page 23336]]

       (B) ``regular compensation'' shall be considered to refer 
     such compensation, determined under its State law (applied in 
     a manner described in subparagraph (A)),
       except as otherwise provided or where the context clearly 
     indicates otherwise.

     SEC. 208. APPLICABILITY.

       (a) In General.--An agreement entered into under this 
     subtitle shall apply to weeks of unemployment--
       (1) beginning after the date on which such agreement is 
     entered into, and
       (2) ending before January 1, 2003.
       (b)  Specified Rules.--Under such an agreement--
       (1) the modifications described in section 202(b)(2)(A) 
     (relating to alternative base periods) shall not apply except 
     in the case of initial claims filed after September 11, 2001.
       (2) the modifications described in section 202(b)(2)(B)-(C) 
     (relating to part-time employment and increased benefits, 
     respectively) shall apply to weeks of unemployment (described 
     in subsection (a)), irrespective of the date on which an 
     individual's claim for benefits is filed, and
       (3) the payments described in section 202(b)(1)(B) 
     (relating to temporary supplemental unemployment compensation 
     ) shall not apply except in the case of individuals 
     exhausting their rights to regular compensation (as described 
     in clause (i) thereof) after September 11, 2001.

     Subtitle B--Premium Assistance for COBRA Continuation Coverage

     SEC. 211. PREMIUM ASSISTANCE FOR COBRA CONTINUATION COVERAGE.

       (a) Establishment.--
       (1) In general.--Not later than 60 days after the date of 
     enactment of this Act, the Secretary of the Treasury, in 
     consultation with the Secretary of Labor, shall establish a 
     program under which premium assistance for COBRA continuation 
     coverage shall be provided for qualified individuals under 
     this section.
       (2) Qualified individuals.--For purposes of this section, a 
     qualified individual is an individual who--
       (A) establishes that the individual--
       (i) on or after July 1, 2001, and before the end of the 1-
     year period beginning on the date of the enactment of this 
     Act, became entitled to elect COBRA continuation coverage; 
     and
       (ii) has elected such coverage; and
       (B) enrolls in the premium assistance program under this 
     section by not later than the end of such 1-year period.
       (b) Limitation of Period of Premium Assistance.--Premium 
     assistance provided under this subsection shall end with 
     respect to an individual on the earlier of--
       (1) the date the individual is no longer covered under 
     COBRA continuation coverage; or
       (2) 12 months after the date the individual is first 
     enrolled in the premium assistance program established under 
     this section.
       (c) Payment, and Crediting of Assistance.--
       (1) Amount of assistance.--Premium assistance provided 
     under this section shall be equal to 75 percent of the amount 
     of the premium required for the COBRA continuation coverage.
       (2) Provision of assistance.--Premium assistance provided 
     under this section shall be provided through the 
     establishment of direct payment arrangements with the 
     administrator of the group health plan (or other entity) that 
     provides or administers the COBRA continuation coverage. It 
     shall be a fiduciary duty of such administrator (or other 
     entity) to enter into such arrangements under this section.
       (3) Premiums payable by qualified individual reduced by 
     amount of assistance.--Premium assistance provided under this 
     section shall be credited by such administrator (or other 
     entity) against the premium otherwise owed by the individual 
     involved for such coverage.
       (d) Change in COBRA Notice.--
       (1) General notice.--
       (A) In general.--In the case of notices provided under 
     section 4980B(f)(6) of the Internal Revenue Code of 1986 with 
     respect to individuals who, on or after July 1, 2001, and 
     before the end of the 1-year period beginning on the date of 
     the enactment of this Act, become entitled to elect COBRA 
     continuation coverage, such notices shall include an 
     additional notification to the recipient of the availability 
     of premium assistance for such coverage under this section.
       (B) Alternative notice.--In the case of COBRA continuation 
     coverage to which the notice provision under section 
     4980B(f)(6) of the Internal Revenue Code of 1986 does not 
     apply, the Secretary of the Treasury shall, in coordination 
     with administrators of the group health plans (or other 
     entities) that provide or administer the COBRA continuation 
     coverage involved, assure provision of such notice.
       (C) Form.--The requirement of the additional notification 
     under this paragraph may be met by amendment of existing 
     notice forms or by inclusion of a separate document with the 
     notice otherwise required.
       (2) Specific requirements.--Each additional notification 
     under paragraph (1) shall include--
       (A) the forms necessary for establishing eligibility under 
     subsection (a)(2)(A) and enrollment under subsection 
     (a)(2)(B) in connection with the coverage with respect to 
     each covered employee or other qualified beneficiary;
       (B) the name, address, and telephone number necessary to 
     contact the plan administrator and any other person 
     maintaining relevant information in connection with the 
     premium assistance; and
       (C) the following statement displayed in a prominent 
     manner:
       ``You may be eligible to receive assistance with payment of 
     75 percent of your COBRA continuation coverage premiums for a 
     duration of not to exceed 12 months.''.
       (3) Notice relating to retroactive coverage.--In the case 
     of such notices previously transmitted before the date of the 
     enactment of this Act in the case of an individual described 
     in paragraph (1) who has elected (or is still eligible to 
     elect) COBRA continuation coverage as of the date of the 
     enactment of this Act, the administrator of the group health 
     plan (or other entity) involved or the Secretary of the 
     Treasury (in the case described in the paragraph (1)(B)) 
     shall provide (within 60 days after the date of the enactment 
     of this Act) for the additional notification required to be 
     provided under paragraph (1).
       (4) Model notices.--The Secretary shall prescribe models 
     for the additional notification required under this 
     subsection.
       (f) Obligation of Funds.--This section constitutes budget 
     authority in advance of appropriations Acts and represents 
     the obligation of the Federal Government to provide for the 
     payment of premium assistance under this section.
       (g) Prompt Issuance of Guidance.--The Secretary of the 
     Treasury, in consultation with the Secretary of Labor, shall 
     issue guidance under this section not later than 30 days 
     after the date of the enactment of this Act.
       (h) Definitions.--In this section:
       (l) Administrator.--The term ``administrator'' has the 
     meaning given such term in section 3(16) of the Employee 
     Retirement Income Security Act of 1974.
       (2) COBRA continuation coverage.--The term ``COBRA 
     continuation coverage'' means continuation coverage provided 
     pursuant to title XXII of the Public Health Service Act, 
     section 4980B of the Internal Revenue Code of 1986 (other 
     than subsection (f)(1) of such section insofar as it relates 
     to pediatric vaccines), part 6 of subtitle B of title I of 
     the Employee Retirement Income Security Act of 1974 (other 
     than under section 609), section 8905a of title 5, United 
     States Code, or under a State program that provides 
     continuation coverage comparable to such continuation 
     coverage.
       (3) Group health plan.--The term ``group health plan'' has 
     the meaning given such term in section 9832(a) of the 
     Internal Revenue Code of 1986.
       (4) State.--The term ``State'' includes the District of 
     Columbia, the Commonwealth of Puerto Rico, the Virgin 
     Islands, Guam, American Samoa, and the Commonwealth of the 
     Northern Mariana Islands.

   Subtitle C--Additional Assistance for Temporary Health Insurance 
                                Coverage

     SEC. 221. OPTIONAL TEMPORARY MEDICAID COVERAGE FOR CERTAIN 
                   UNINSURED EMPLOYEES.

       (a) In General.--Notwithstanding any other provision of 
     law, with respect to any month before the ending month, a 
     State may elect to provide, under its medicaid program under 
     title XIX of the Social Security Act, medical assistance in 
     the case of an individual--
       (1)(A) who has become totally or partially separated from 
     employment on or after July 1, 2001, and before the end of 
     such ending month; or
       (B) whose hours of employment have been reduced on or after 
     July 1, 2001, and before the end of such ending month;
       (2) who is not eligible for COBRA continuation coverage; 
     and
       (3) who is uninsured.
       (b) Limitation of Period of Coverage.--Assistance under 
     this section shall end with respect to an individual on the 
     earlier of--
       (1) the date the individual is no longer uninsured; or
       (2) 12 months after the date the individual is first 
     determined to be eligible for medical assistance under this 
     section.
       (c) Special Rules.--In the case of medical assistance 
     provided under this section--
       (1) the Federal medical assistance percentage under section 
     1905(b) of the Social Security Act shall be the enhanced FMAP 
     (as defined in section 2105(b) of such Act);
       (2) a State may elect to apply alternative income, asset, 
     and resource limitations and the provisions of section 
     1916(g) of such Act, except that in no case shall a State 
     cover individuals with higher family income without covering 
     individuals with a lower family income;
       (3) such medical assistance shall not be provided for 
     periods before the date the individual becomes uninsured;
       (4) a State may elect to make eligible for such assistance 
     a spouse or children of an individual eligible for medical 
     assistance under paragraph (1), if such spouse or children 
     are uninsured;
       (5) individuals eligible for medical assistance under this 
     section shall be deemed to be described in the list of 
     individuals described in the matter preceding paragraph (1) 
     of section 1905(a) of such Act; and

[[Page 23337]]

       (6) the Secretary of Health and Human Services shall not 
     count, for purposes of section 1108(f) of the Social Security 
     Act, such amount of payments under this section as bears a 
     reasonable relationship to the average national proportion of 
     payments made under this section for the 50 States and the 
     District of Columbia to the payments otherwise made under 
     title XIX for such States and District.
       (d) Definition.--For purposes of this subtitle:
       (1) Uninsured.--The term ``uninsured'' means, with respect 
     to an individual, that the individual is not covered under--
       (A) a group health plan (as defined in section 2791(a) of 
     the Public Health Service Act),
       (B) health insurance coverage (as defined in section 
     2791(b)(1) of the Public Health Service Act), or
       (C) a program under title XVIII, XIX, or XXI of the Social 
     Security Act, other than under such title XIX pursuant to 
     this section.
       For purposes of this paragraph, such coverage under 
     subparagraph (A) or (B) shall not include coverage consisting 
     solely of coverage of excepted benefits (as defined in 
     section 2791(c) of the Public Health Service Act).
       (2) Cobra continuation coverage.--The term ``COBRA 
     continuation coverage'' means coverage under a group health 
     plan provided by an employer pursuant to title XXII of the 
     Public Health Service Act, section 4980B of the Internal 
     Revenue Code of 1986, part 6 of subtitle B of title I of the 
     Employee Retirement Income Security Act of 1974, or section 
     8905a of title 5, United States Code.
       (3) State.--The term ``State'' has the meaning given such 
     term for purposes of title XIX of the Social Security Act.
       (4) Ending month.--The term ``ending month'' means the last 
     month that begins before the date that is 1 year after the 
     date of the enactment of this Act.
       (e) Effective Date.--This section shall take effect upon 
     its enactment, whether or not regulations implementing this 
     section are issued.
       (B) Alternative notice.--In the case of COBRA continuation 
     coverage to which the notice provision under section 
     4980B(f)(6) of the Internal Revenue Code of 1986 does not 
     apply, the Secretary of the Treasury shall, in coordination 
     with administrators of the group health plans (or other 
     entities) that provide or administer the COBRA continuation 
     coverage involved, assure provision of such notice.
       (C) Form.--The requirement of the additional notification 
     under this paragraph may be met by amendment of existing 
     notice forms or by inclusion of a separate document with the 
     notice otherwise required.
       (2) Specific requirements.--Each additional notification 
     under this paragraph (1) shall include--
       (A) the forms necessary for establishing eligibility under 
     subsection (a)(2)(A) and enrollment under subsection 
     (a)(2)(B) in connection with the coverage with respect to 
     each covered employee or other qualified beneficiary;
       (B) the name, address, and telephone number necessary to 
     contact the plan administrator and any other person 
     maintaining relevant information in connection with the 
     premium assistance; and
       (C) the following statement displayed in a prominent 
     manner:
       ``You may be eligible to receive assistance with payment of 
     75 percent of your COBRA continuation coverage premiums for a 
     duration of not to exceed 12 months.''.
       (3) Notice relating to retroactive coverage.--In the case 
     of such notices previously transmitted before the date of the 
     enactment of this Act in the case of an individual described 
     in paragraph (1) who has elected (or is still eligible to 
     elect) COBRA continuation coverage as to the date of the 
     enactment of this Act, the administrator of the group health 
     plan (or other entity) involved or the Secretary of the 
     Treasury (in the case described in the paragraph (1)(B)) 
     shall provide (within 60 days after the date of the enactment 
     of this Act) for the additional notification required to be 
     provided under paragraph (1).
       (4) Model notices.--The Secretary shall prescribe models 
     for the additional notification required under this 
     subsection.
       (f) Obligation of Funds.--This section constitutes budget 
     authority in advance of appropriations Acts and represents 
     the obligation of the Federal government to provide for the 
     payment of premium assistance under this section.
       (g) Prompt Issuance of Guidance.--The Secretary of the 
     Treasury, in consultation with the Secretary of Labor, shall 
     issue guidance under this section not later than 30 days 
     after the date of the enactment of this Act.
       (h) Definitions.--In this section:
       (1) Administrator.--The team ``administrator'' has the 
     meaning given such term in section 3(16) of the Employee 
     Retirement Income Security Act of 1974.
       (2) COBRA continuation coverage.-- The term ``COBRA 
     continuation coverage'' means continuation coverage provided 
     pursuant to title XXII of the Public Health Service Act, 
     section 4980B of the Internal Revenue Code of 1986 (other 
     than subsection (f)(1) of such section insofar as it relates 
     to pediatric vaccines), part 6 of subtitle B of title I of 
     the Employee Retirement Income Security Act of 1974 (other 
     than under section 609), section 8905a of title 5, United 
     States Code, or under a State program that provides 
     continuation coverage comparable to such continuation 
     coverage.
       (3) Group health plan.--The term ``group health plan'' has 
     the meaning given such term in section 9832(a) of the 
     Internal Revenue Code of 1986.
       (4) State.--The term ``State'' includes the District of 
     Columbia, the Commonwealth of Puerto Rico, the Virgin 
     Islands, Guam, American Samoa, and the Commonwealth of the 
     Northern Mariana Islands.

   Subtitle C--Additional Assistance for Temporary Health Insurance 
                                Coverage

     SEC. 221. OPTIONAL TEMPORARY MEDICAID COVERAGE FOR CERTAIN 
                   UNINSURED EMPLOYEES.

       (a) In General.--Notwithstanding any other provision of 
     law, with respect to any month before the ending month, a 
     State may elect to provide, under its medicaid program under 
     title XIX of the Social Security Act, medical assistance in 
     the case of an individual--
       (1)(A) who has become totally or partially separated from 
     employment on or after July 1, 2001, and before the end of 
     such ending month; or
       (B) whose hours of employment have been reduced on or after 
     July 1, 2001, and before the end of such ending month;
       (2) who is not eligible for COBRA continuation coverage; 
     and
       (3) who is uninsured.
       (b) Limitation of Period of Coverage.--Assistance under 
     this section shall end with respect to an individual on the 
     earlier of--
       (1) the date the individual is no longer uninsured; or
       (2) 12 months after the date the individual is first 
     determined to be eligible for medical assistance under this 
     section.
       (c) Special Rules.--In the case of medical assistance 
     provided under this section--
       (1) the Federal medical assistance percentage under section 
     1905(b) of the Social Security Act shall be the enhanced FMAP 
     (as defined in section 2105(b) of such Act);
       (2) a State may elect to apply alternative income, asset, 
     and resource limitations and the provisions of section 
     1916(g) of such Act, except that in no case shall a State 
     cover individuals with higher family income without covering 
     individuals with a lower family income;
       (3) such medical assistance shall not be provided for 
     periods before the date the individual becomes uninsured;
       (4) a State may elect to make eligible for such assistance 
     a spouse or children of an individual eligible for medical 
     assistance under paragraph (l), if such spouse or children 
     are uninsured;
       (5) individuals eligible for medical assistance under this 
     section shall be deemed to be described in the list of 
     individuals described in the matter preceding paragraph (1) 
     of section 1905(a) of such Act; and
       (6) the Secretary of Health and Human Services shall not 
     count, for purposes of section 1108(f) of the Social Security 
     Act, such amount of payments under this section as bears a 
     reasonable relationship to the average national proportion of 
     payments made under this section for the 50 States and the 
     District of Columbia to the payments otherwise made under 
     title XIX for such States and District.
       (d) Definitions.--For purposes of this subtitle:
       (1) Uninsured.--The term ``uninsured'' means, with respect 
     to an individual, that the individual is not covered under--
       (A) a group health plan (as defined in section 2791(a) of 
     the Public Health Service Act),
       (B) health insurance coverage (as defined in section 
     2791(b)(1) of the Public Health Service Act), or
       (C) a program under title XVIII, XIX, or XXI of the Social 
     Security Act, other than under such title XIX pursuant to 
     this section.
       For purposes of this paragraph, such coverage under 
     subparagraph (A) or (B) shall not include coverage consisting 
     solely of coverage of excepted benefits (as defined in 
     section 2791(c) of the Public Health Service Act).
       (2) Cobra continuation coverage.--The term ``COBRA 
     continuation coverage'' means coverage under a group health 
     plan provided by an employer pursuant to title XXII of the 
     Public Health Service Act, section 4980B of the Internal 
     Revenue Code of 1986 part 6 of subtitle B of title I of the 
     Employee Retirement Income Security Act of 1974, or section 
     8905a of title 5, United States Code.
       (3) State.--The term ``State'' has the meaning given such 
     term for purposes of title XIX of the Social Security Act.
       (4) Ending month.--The term ``ending month'' means the last 
     month that begins before the date that is 1 year after the 
     date of the enactment of this Act.
       (e) Effective Date.--This section shall take effect upon 
     its enactment, whether or not regulations implementing this 
     section are issued.
       (f) Limitation of Election.--A State may not elect to 
     provide coverage under this section unless the State elects 
     to provide coverage under section 222.

[[Page 23338]]



     SEC. 222. OPTIONAL TEMPORARY COVERAGE FOR UNSUBSIDIZED 
                   PORTION OF COBRA CONTINUATION PREMIUMS.

       (a) In General.--Notwithstanding any other provision of 
     law, with respect to COBRA continuation coverage provided for 
     any month through the ending month, a State may elect to 
     provide payment of the unsubsidized portion of the premium 
     for COBRA continuation coverage in the case of any 
     individual--
       (1)(A) who has become totally or partially separated from 
     employment on or after July 1, 2001, and before the end of 
     the ending month; or
       (B) whose hours of employment have been reduced on or after 
     July 1, 2001, and before the end of such ending month; and
       (2) who is eligible for, and has elected coverage under, 
     COBRA continuation coverage.
       (b) Limitation of Period of Coverage.--Premium assistance 
     under this section shall end with respect to an individual on 
     the earlier of--
       (1) the date the individual is no longer covered under 
     COBRA continuation coverage; or
       (2) 12 months after the date the individual is first 
     determined to be eligible for premium assistance under this 
     section.
       (c) Financial Payment to States.--A State providing premium 
     assistance under this section shall be entitled to payment 
     under section 1903(a) of the Social Security Act with respect 
     to such assistance (and administrative expenses relating to 
     such assistance) in the same manner as such State is entitled 
     to payment with respect to medical assistance (and such 
     administrative expenses) under such section, except that, for 
     purposes of this subsection, any reference to the Federal 
     medical assistance percentage shall be deemed a reference to 
     the enhanced FMAP (as defined in section 2105(b) of such 
     Act). The provisions of subsection (c)(6) of section 221 
     shall apply with respect to this section in the same manner 
     as it applies under such section.
       (d) Unsubsidized Portion of Premium for COBRA Continuatioin 
     Coverage.--For purposes of this section, the term 
     `unsubsidized portion of premium for COBRA continuation 
     coverage' means that portion of the premium for COBRA 
     continuation coverage for which there is no financial 
     assistance available under 211.
       (e) Effective Date.--This section shall take effect upon 
     its enactment, whether or not regulations implementing this 
     section are issued.
       (f) Limitation on Election.--A State may not elect to 
     provide coverage under this section unless the State elects 
     to provide coverage under section 221.

  The SPEAKER pro tempore. The question is on ordering the previous 
question.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Ms. SLAUGHTER. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  Pursuant to clause 9 of rule XX, the Chair will reduce to 5 minutes 
the minimum time for electronic voting, if ordered, on the question of 
adoption of the resolution.
  The vote was taken by electronic device, and there were--yeas 220, 
nays 204, not voting 9, as follows:

                             [Roll No. 460]

                               YEAS--220

     Aderholt
     Akin
     Armey
     Bachus
     Baker
     Ballenger
     Barr
     Bartlett
     Barton
     Bass
     Bereuter
     Biggert
     Bilirakis
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boozman
     Brady (TX)
     Brown (SC)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Castle
     Chabot
     Chambliss
     Coble
     Collins
     Combest
     Cox
     Crane
     Crenshaw
     Culberson
     Cunningham
     Davis, Jo Ann
     Davis, Tom
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ferguson
     Flake
     Fletcher
     Foley
     Forbes
     Fossella
     Frelinghuysen
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goss
     Graham
     Granger
     Graves
     Green (WI)
     Greenwood
     Grucci
     Gutknecht
     Hall (TX)
     Hansen
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hilleary
     Hobson
     Hoekstra
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Isakson
     Issa
     Istook
     Jenkins
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     Kerns
     King (NY)
     Kingston
     Kirk
     Knollenberg
     Kolbe
     LaHood
     Largent
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (OK)
     Manzullo
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Miller, Dan
     Miller, Gary
     Miller, Jeff
     Moran (KS)
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Portman
     Pryce (OH)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reynolds
     Riley
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schaffer
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Stump
     Sununu
     Sweeney
     Tancredo
     Tauzin
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Tiberi
     Toomey
     Traficant
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins (OK)
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wolf
     Young (AK)
     Young (FL)

                               NAYS--204

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldacci
     Baldwin
     Barcia
     Barrett
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (OK)
     Clay
     Clayton
     Clement
     Clyburn
     Condit
     Conyers
     Costello
     Coyne
     Cramer
     Crowley
     Cummings
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Dooley
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Frank
     Gephardt
     Gonzalez
     Gordon
     Green (TX)
     Gutierrez
     Hall (OH)
     Harman
     Hastings (FL)
     Hill
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind (WI)
     Kleczka
     Kucinich
     LaFalce
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Lucas (KY)
     Luther
     Lynch
     Maloney (CT)
     Maloney (NY)
     Markey
     Mascara
     Matheson
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Mink
     Mollohan
     Moore
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (MN)
     Phelps
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roemer
     Ross
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Schiff
     Scott
     Serrano
     Sherman
     Shows
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Stenholm
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Visclosky
     Waters
     Watson (CA)
     Watt (NC)
     Waxman
     Weiner
     Woolsey
     Wu
     Wynn

                             NOT VOTING--9

     Carson (IN)
     Cooksey
     Cubin
     DeFazio
     Ford
     Frost
     Quinn
     Rothman
     Wexler

                              {time}  1246

  Messrs. HONDA, OBEY, BARRETT of Wisconsin, RUSH and WU and Ms. 
WOOLSEY changed their vote from ``yea'' to ``nay.''
  Mr. BACHUS and Mr. TANCREDO changed their vote from ``nay'' to 
``yea.''
  So the previous question was ordered.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore (Mr. Hansen). The question is on the 
resolution.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

  Ms. SLAUGHTER. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The SPEAKER pro tempore. This will be a 5-minute vote.
  The vote was taken by electronic device, and there were--ayes 216, 
noes 202, not voting 15, as follows:

[[Page 23339]]



                             [Roll No. 461]

                               AYES--216

     Aderholt
     Akin
     Armey
     Bachus
     Baker
     Ballenger
     Barr
     Bartlett
     Barton
     Bass
     Bereuter
     Biggert
     Bilirakis
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boozman
     Brady (TX)
     Brown (SC)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Castle
     Chabot
     Chambliss
     Coble
     Collins
     Combest
     Cox
     Crane
     Crenshaw
     Culberson
     Cunningham
     Davis, Jo Ann
     Davis, Tom
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ferguson
     Flake
     Fletcher
     Foley
     Forbes
     Fossella
     Frelinghuysen
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goss
     Graham
     Granger
     Graves
     Green (WI)
     Greenwood
     Grucci
     Gutknecht
     Hansen
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hilleary
     Hobson
     Hoekstra
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Isakson
     Issa
     Jenkins
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     Kerns
     King (NY)
     Kingston
     Kirk
     Knollenberg
     Kolbe
     LaHood
     Largent
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Miller, Dan
     Miller, Gary
     Miller, Jeff
     Moran (KS)
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Portman
     Pryce (OH)
     Putnam
     Ramstad
     Regula
     Rehberg
     Reynolds
     Riley
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schaffer
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Stump
     Sununu
     Sweeney
     Tancredo
     Tauzin
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Tiberi
     Toomey
     Traficant
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wolf
     Young (AK)
     Young (FL)

                               NOES--202

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldacci
     Baldwin
     Barcia
     Barrett
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (OK)
     Clay
     Clayton
     Clement
     Clyburn
     Condit
     Conyers
     Costello
     Coyne
     Cramer
     Crowley
     Cummings
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Doggett
     Dooley
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Frank
     Gephardt
     Gonzalez
     Gordon
     Green (TX)
     Gutierrez
     Hall (OH)
     Hall (TX)
     Harman
     Hastings (FL)
     Hill
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Istook
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind (WI)
     Kucinich
     LaFalce
     Lampson
     Langevin
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Luther
     Lynch
     Maloney (CT)
     Maloney (NY)
     Markey
     Mascara
     Matheson
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Mink
     Mollohan
     Moore
     Moran (VA)
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Peterson (MN)
     Phelps
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roemer
     Ross
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Schiff
     Scott
     Serrano
     Sherman
     Shows
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Stenholm
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Visclosky
     Waters
     Watson (CA)
     Watt (NC)
     Waxman
     Weiner
     Woolsey
     Wu
     Wynn

                             NOT VOTING--15

     Carson (IN)
     Cooksey
     Cubin
     DeFazio
     Dingell
     Ford
     Frost
     Horn
     Kleczka
     Lantos
     Quinn
     Radanovich
     Rothman
     Watkins (OK)
     Wexler

                              {time}  1255

  So the resolution was agreed to.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.
  Mr. OXLEY. Mr. Chairman, pursuant to House Resolution 297, I call up 
the bill (H.R. 3210) to ensure the continued financial capacity of 
insurers to provide coverage for risks from terrorism, and ask for its 
immediate consideration.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Pursuant to House Resolution 297, the bill 
is considered read for amendment.
  The text of H.R. 3210 is as follows:

                               H.R. 3210

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

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Terrorism 
     Risk Protection Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title and table of contents.
Sec. 2. Congressional findings.
Sec. 3. Designation of Administrators.
Sec. 4. Submission of premium information to Administrator.
Sec. 5. Triggering determination and covered period.
Sec. 6. Federal cost-sharing for commercial insurers.
Sec. 7. Assessments.
Sec. 8. Terrorism loss repayment surcharge.
Sec. 9. Administration of assessments and surcharges.
Sec. 10. Reserve for terrorism coverage under commercial lines of 
              business.
Sec. 11. State preemption.
Sec. 12. Consistent State guidelines for coverage for acts of 
              terrorism.
Sec. 13. Consultation with State insurance regulators and NAIC.
Sec. 14. Sovereign immunity protections.
Sec. 15. Study of potential effects of terrorism on life insurance 
              industry.
Sec. 16. Definitions.
Sec. 17. Extension of program.
Sec. 18. Regulations.

     SEC. 2. CONGRESSIONAL FINDINGS.

       The Congress finds that--
       (1) the terrorist attacks on the World Trade Center and the 
     Pentagon of September 11, 2001, resulted in a large number of 
     deaths and injuries, the destruction and damage to buildings, 
     and interruption of business operations;
       (2) the attacks have inflicted possibly the largest losses 
     ever incurred by insurers and reinsurers;
       (3) while the insurance and reinsurance industries have 
     committed to pay the losses arising from the September 11 
     attacks, the resulting disruption has created widespread 
     market uncertainties with regard to the risk of losses 
     arising from possible future terrorist attacks;
       (4) such uncertainty threatens the continued availability 
     of United States commercial property casualty insurance for 
     terrorism risk at meaningful coverage levels;
       (5) the unavailability of affordable commercial property 
     and casualty insurance for terrorist acts threatens the 
     growth and stability of the United States economy, including 
     impeding the ability of financial services providers to 
     finance commercial property acquisitions and new 
     construction;
       (6) in the past, the private insurance markets have shown a 
     remarkable resiliency in adapting to changed circumstances;
       (7) given time, the private markets will diversify and 
     develop risk spreading mechanisms to increase capacity and 
     guard against possible future losses incurred by terrorist 
     attacks;
       (8) it is necessary to create a temporary industry risk 
     sharing loan program to ensure the continued availability of 
     commercial property and casualty insurance and reinsurance 
     for terrorism-related risks;
       (9) such action is necessary to limit immediate market 
     disruptions, encourage economic stabilization, and facilitate 
     a transition to a viable market for private terrorism risk 
     insurance; and
       (10) in addition, it is necessary to repeal portions of the 
     tax law which prohibit the insurance market from developing 
     the necessary reserves to handle possible future losses due 
     to acts of terrorism.

     SEC. 3. DESIGNATION OF ADMINISTRATORS.

       (a) In General.--Not later than December 1, 2001, the 
     President shall designate a Federal officer or officers to 
     act as the Administrator or Administrators responsible for 
     carrying out this Act and the responsibilities

[[Page 23340]]

     under this Act to be carried out by each such officer.
       (b) Sense of Congress.--It is the sense of the Congress 
     that in determining the Administrator responsible for making 
     any determinations, for purposes of this Act, as to whether a 
     loss was caused by an act of terrorism and whether such loss 
     was caused by one or multiple such events, pursuant to 
     section 5(b), the President should consider the appropriate 
     role of the Assistant to the President for Homeland Security.

     SEC. 4. SUBMISSION OF PREMIUM INFORMATION TO ADMINISTRATOR.

       To the extent such information is not otherwise available 
     to the Administrators, the appropriate Administrator may 
     require each insurer to submit, to the appropriate 
     Administrator or to the NAIC, a statement specifying the 
     aggregate premium amount of coverage written by such insurer 
     for properties and persons in the United States under each 
     line of commercial property and casualty insurance sold by 
     such insurer during such periods as the appropriate 
     Administrator may provide.

     SEC. 5. TRIGGERING DETERMINATION AND COVERED PERIOD.

       (a) In General.--For purposes of this Act, a ``triggering 
     determination'' is a determination by the appropriate 
     Administrator that the insured losses resulting from the 
     event of an act of terrorism occurring during the covered 
     period (as such term is defined in subsection (b)), or the 
     aggregate insured losses resulting from multiple events of 
     acts of terrorism all occurring during the covered period, 
     meet the requirements under either of the following 
     paragraphs:
       (1) Industry-wide loss test.--Such industry-wide losses 
     exceed $1,000,000,000.
       (2) Capital surplus and industry aggregate test.--Such 
     industry-wide losses exceed $100,000,000 and some portion of 
     such losses for any single commercial insurer exceed--
       (A) 10 percent of the capital surplus of such commercial 
     insurer (as such term is defined by the appropriate 
     Administrator); and
       (B) 10 percent of the commercial property and casualty 
     premiums written by such commercial insurer;
     except that this paragraph shall not apply to any commercial 
     insurer that has been making commercial property and casualty 
     insurance coverage available for less than 4 years as of the 
     date of the determination under this subsection.
       (b) Covered Period.--For purposes of this Act, the 
     ``covered period'' is the period beginning on the date of the 
     enactment of this Act and ending on January 1, 2003.
       (c) Determinations Regarding Events.--For purposes of 
     subsection (a), the appropriate Administrator shall have the 
     sole authority for determining whether--
       (1) an occurrence or event was caused by an act of 
     terrorism;
       (2) insured losses from acts of terrorism were caused by 
     one or multiple events or occurrences; and
       (3) whether an act of terrorism occurred during the covered 
     period.

     SEC. 6. FEDERAL COST-SHARING FOR COMMERCIAL INSURERS.

       (a) In General.--Pursuant to a triggering determination, 
     the appropriate Administrator shall provide financial 
     assistance to commercial insurers in accordance with this 
     section to cover insured losses resulting from acts of 
     terrorism, which shall be repaid in accordance with 
     subsection (e).
       (b) Amount.--Subject to subsection (c), with respect to a 
     triggering determination, the amount of financial assistance 
     made available under this section to each commercial insurer 
     shall be equal to 90 percent of the amount of the insured 
     losses of the insurer as a result of the triggering event 
     involved.
       (c) Aggregate Limitation.--The aggregate amount of 
     financial assistance provided pursuant to this section may 
     not exceed $100,000,000,000.
       (d) Limitations.--The appropriate Administrator may 
     establish such limitations as may be necessary to ensure that 
     payments under this section in connection with a triggering 
     determination are made only to commercial insurers that are 
     not in default of any obligation under section 7 to pay 
     assessments or under section 8 to collect surcharges.
       (e) Repayment.--Financial assistance made available under 
     this section shall be repaid through assessments under 
     section 7 collected by the appropriate Administrator and 
     surcharges remitted to the appropriate Administrator under 
     section 8. Any such amounts collected or remitted shall be 
     deposited into the general fund of the Treasury.
       (f) Emergency Designation.--Congress designates the amount 
     of new budget authority and outlays in all fiscal years 
     resulting from this section as an emergency requirement 
     pursuant to section 252(e) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 (2 U.S.C. 901(e)). Such 
     amount shall be available only to the extent that a request, 
     that includes designation of such amount as an emergency 
     requirement as defined in such Act, is transmitted by the 
     President to Congress.

     SEC. 7. ASSESSMENTS.

       (a) In General.--In the case of a triggering determination, 
     each commercial insurer shall be subject to assessments under 
     this section for the purpose of repaying financial assistance 
     made available under section 6 in connection with such 
     determination.
       (b) Aggregate Assessment.--Pursuant to a triggering 
     determination, the appropriate Administrator shall determine 
     the aggregate amount to be assessed among all commercial 
     insurers, which shall be equal to 90 percent of the lesser 
     of--
       (1) the amount of industry-wide losses resulting from the 
     triggering event involved; and
       (2) $20,000,000,000.
       (c) Allocation of Assessment.--
       (1) In general.--The appropriate Administrator shall 
     allocate the aggregate assessment amount determined under 
     subsection (b) among all commercial insurers. The portion of 
     the aggregate assessment amount that is allocated as an 
     assessment on each commercial insurer shall be based on the 
     percentage, written by that insurer, of the aggregate written 
     premium, for all commercial insurers, for the calendar year 
     preceding the assessment.
       (2) Payment requirement.--Upon notification by the 
     appropriate Administrator of an assessment under this 
     section, each commercial insurer shall be required to pay to 
     the appropriate Administrator, in the manner provided under 
     section 9 by the appropriate Administrator, the amount equal 
     to the assessment on such commercial insurer (subject to the 
     limitation under paragraph (3)).
       (3) Annual limitation on amount allocated to each 
     commercial insurer.--
       (A) In general.--Of any assessments under this section on a 
     commercial insurer, the portion required to be paid by any 
     commercial insurer during a calendar year shall not exceed 
     the amount that is equal to 3 percent of the aggregate 
     written premium for such insurer for the preceding calendar 
     year.
       (B) Multiple payments.--If any amounts required to be 
     repaid under this section for a calendar year are limited by 
     operation of subparagraph (A), the appropriate Administrator 
     shall provide that all such remaining amounts shall be 
     reallocated among all commercial insurers (in the manner 
     provided in paragraph (1)) over such immediately succeeding 
     calendar years, and repaid over such years, as may be 
     necessary to provide for full payment of such remaining 
     amounts, except that the limitation under subparagraph (A) 
     shall apply to the amounts paid in any such successive 
     calendar years.
       (C) Administrative flexibility.--
       (i) Timing of assessments.--Assessments under this section 
     in connection with a triggering demonstration shall be made, 
     to the extent that the appropriate Administrator considers 
     practicable and appropriate, at the beginning of the calendar 
     year immediately following the triggering determination.
       (ii) Estimates and corrections.--If the appropriate 
     Administrator makes an assessment at a time other than 
     provided under clause (i), the appropriate Administrator 
     may--

       (I) require commercial insurers to estimate their aggregate 
     written premiums for the year in which the assessment is 
     made; and
       (II) make a subsequent refund or require additional 
     payments to correct such estimation at the end of the 
     calendar year.

       (4) Deferral of contributions.--The appropriate 
     Administrator may defer the payment of part or all of the 
     assessment required under paragraph (2) to be paid by a 
     commercial insurer, but only to the extent that the 
     appropriate Administrator determines that such deferral is 
     necessary to avoid the likely insolvency of the commercial 
     insurer.

     SEC. 8. TERRORISM LOSS REPAYMENT SURCHARGE.

       (a) Imposition and Collection.--If, pursuant to a 
     triggering determination, the appropriate Administrator 
     determines that the aggregate amount of industry-wide losses 
     resulting from the triggering event involved exceeds 
     $20,000,000,000, the appropriate Administrator shall--
       (1) establish and impose a policyholder premium surcharge, 
     as provided under this section, on commercial property and 
     casualty insurance written after such determination, for the 
     purpose of repaying financial assistance made available under 
     section 6 in connection with such triggering determination; 
     and
       (2) provide for commercial insurers to collect such 
     surcharge and remit amounts collected to the appropriate 
     Administrator.
       (b) Amount and Duration.--The surcharge under this section 
     shall be established in such amount, and shall apply to 
     commercial property and casualty insurance written during 
     such period, as the appropriate Administrator determines is 
     necessary to recover the aggregate amount of financial 
     assistance provided under section 6 to cover insured losses 
     resulting from the triggering event that exceed 
     $20,000,000,000.
       (c) Other Terms.--The surcharge under this section shall--
       (1) be based on a percentage of the amount of commercial 
     property and casualty insurance coverage that a policy 
     provides; and
       (2) be imposed with respect to all commercial property and 
     casualty insurance coverage written during the period 
     referred to in subsection (b).

[[Page 23341]]



     SEC. 9. ADMINISTRATION OF ASSESSMENTS AND SURCHARGES.

       (a) Manner and Method.--The appropriate Administrator shall 
     provide for the manner and method of carrying out assessments 
     under section 7 and surcharges under section 8, including the 
     timing and procedures of making assessments and surcharges, 
     notifying commercial insurers of assessments or surcharge 
     requirements, collecting payments from and surcharges through 
     commercial insurers, and refunding of any excess amounts paid 
     or crediting such amounts against future assessments.
       (b) Timing of Coverages and Assessments.--The appropriate 
     Administrator may adjust the timing of coverages and 
     assessments provided under this Act to provide for equivalent 
     application of the provisions of this Act to commercial 
     insurers and policies that are not based on a calendar year.
       (c) Application to Self-Insurance Arrangements.--The 
     appropriate Administrator may, in consultation with the NAIC, 
     apply the provisions of this Act, as appropriate, to self-
     insurance arrangements by municipalities and other entities, 
     but only if such application is determined before the 
     occurrence of a triggering event and all of the provisions of 
     this Act are applied uniformly to such entities.
       (d) Adjustment.--The appropriate Administrator may adjust 
     the assessments charged under section 7 or the percentage 
     imposed under the surcharge under section 8 at any time, as 
     the appropriate Administrator considers appropriate to 
     protect the national interest, which may include avoiding 
     unreasonable economic disruption or excessive market 
     instability.

     SEC. 10. RESERVE FOR TERRORISM COVERAGE UNDER COMMERCIAL 
                   LINES OF BUSINESS.

       (a) In General.--Section 832 of the Internal Revenue Code 
     of 1986 (relating to insurance company taxable income) is 
     amended by adding at the end the following new subsection:
       ``(h) Terrorism Reserve for Commercial Lines of Business.--
     In the case of an insurance company subject to tax under 
     section 831(a)--
       ``(1) Inclusion for decreases, and deduction for increases, 
     in balance of reserve.--
       ``(A) Decrease treated as gross income.--If for any taxable 
     year--
       ``(i) the opening balance for the terrorism commercial 
     business reserve exceeds
       ``(ii) the closing balance for such reserve,
     such excess shall be included in gross income under 
     subsection (b)(1)(F).
       ``(B) Increase treated as deduction.--If for any taxable 
     year--
       ``(i) the closing balance for the terrorism commercial 
     business reserve exceeds
       ``(ii) the opening balance for such reserve,
     such excess shall be taken into account as a deduction under 
     subsection (c)(14).
       ``(2) Terrorism commercial business reserve.--For purposes 
     of this section, the term `terrorism commercial business 
     reserve' means amounts held in a segregated account (or other 
     separately identifiable arrangement or account) which are set 
     aside exclusively--
       ``(A) to mature or liquidate, either by payment or 
     reinsurance, future unaccrued claims arising from declared 
     terrorism losses under commercial lines of business, and
       ``(B) if so directed by the insurance commissioner of any 
     State, to pay other claims as part of a plan of the company 
     to avoid insolvency.
       ``(3) Limitation on amount of reserve.--
       ``(A) In general.--If the closing balance of any terrorism 
     commercial business reserve for any taxable year exceeds such 
     reserve's limit for such year--
       ``(i) such excess shall be included in gross income under 
     subsection (b)(1)(F) for the following taxable year, and
       ``(ii) if such excess is distributed during such following 
     taxable year, the opening balance of such reserve for such 
     following taxable year shall be determined without regard to 
     such excess.
       ``(B) Reserve limit.--
       ``(i) In general.--For purposes of subparagraph (A), a 
     reserve's limit for any taxable year is such reserve's 
     allocable share of the national limit for the calendar year 
     in which such taxable year begins.
       ``(ii) National limit.--The national limit is 
     $40,000,000,000 ($13,340,000,000 for 2002).
       ``(iii) Allocation of limit.--

       ``(I) In general.--A reserve's allocable share of the 
     national limit for any calendar year is the amount which 
     bears the same ratio to the national limit for such year as 
     the company's net written premiums for commercial lines of 
     business bears to such net written premiums for all companies 
     for commercial line of business.
       ``(II) Exclusion of premiums for insurance not covering 
     declared terrorism losses and for reinsurance.--Subclause (I) 
     shall be applied without regard to premiums for insurance 
     which does not cover declared terrorism losses and premiums 
     for reinsurance.
       ``(III) Determination of net written premiums.--Except as 
     otherwise provided in this section, all determinations under 
     this subsection shall be made on the basis of the amounts 
     required to be set forth on the annual statement approved by 
     the National Association of Insurance Commissioners.

       ``(iv) Inflation adjustment of limit.--In the case of any 
     calendar year after 2002, the $40,000,000,000 amount in 
     clause (ii) shall be increased by an amount equal to the 
     product of--

       ``(I) such dollar amount, and
       ``(II) the cost-of-living adjustment determined under 
     subsection (f)(3) for such calendar year, determined by 
     substituting `calendar year 2001' for `calendar year 1992' in 
     subparagraph (B) thereof.

     If any amount after adjustment under the preceding sentence 
     is not a multiple of $1,000,000, such amount shall be rounded 
     to the nearest multiple of $1,000,000.
       ``(4) Declared terrorism losses.--For purposes of this 
     subsection--
       ``(A) In general.--The term `declared terrorism losses' 
     means, with respect to a taxable year--
       ``(i) the amount of losses and loss adjustment expenses 
     incurred in commercial lines of business that are 
     attributable to 1 or more declared terrorism events, plus
       ``(ii) any nonrecoverable assessments, surcharges, or other 
     liabilities that are borne by the company and are 
     attributable to such events.
       ``(B) Declared terrorism event.--The term `declared 
     terrorism event' means any event declared by the President to 
     be an act of terrorism against the United States for purposes 
     of this section.
       ``(5) Regulations.--The Secretary shall prescribe such 
     regulations as may be appropriate to carry out this 
     subsection, and shall prescribe such regulations after 
     consultation with the National Association of Insurance 
     Commissioners.''
       (b) Conforming Amendments.--
       (1) Paragraph (1) of section 832(b) of such Code is amended 
     by striking ``and'' at the end of subparagraph (D), by 
     striking the period at the end of subparagraph (E) and 
     inserting in lieu thereof ``, and'', and by adding at the end 
     the following new subparagraph:
       ``(F) each net decrease in reserves which is required by 
     paragraph (1) or (3) of subsection (h) to be taken into 
     account under this subparagraph.''
       (2) Subsection (c) of section 832 of such Code is amended 
     by striking ``and'' at the end of paragraph (12), by striking 
     the period at the end of paragraph (13) and inserting in lieu 
     thereof ``; and'', and by adding at the end the following new 
     paragraph:
       ``(14) each net increase in reserves which is required by 
     subsection (h)(1) to be taken into account under this 
     paragraph.''
       (c) Effective Date.--The amendments made by this subsection 
     shall apply to taxable years beginning after December 31, 
     2001.

     SEC. 11. STATE PREEMPTION.

       (a) Covered Perils.--A commercial insurer shall be 
     considered to have complied with any State law that requires 
     or regulates the provision of insurance coverage for acts of 
     terrorism if the insurer provides coverage in accordance with 
     the definitions regarding acts of terrorism under the 
     regulations issued by the Administrators.
       (b) Rate Laws.--If any provision of any State law prevents 
     an insurer from increasing its premium rates in an amount 
     necessary to recover any assessments pursuant to section 7, 
     such provision is preempted only to the extent necessary to 
     provide for such insurer to recover such losses.
       (c) File and Use.--With respect only to commercial property 
     and casualty insurance covering acts of terrorism, any 
     provision of State law that requires, as a condition 
     precedent to the effectiveness of rates or policies for such 
     insurance that is made available by an insurer licensed to 
     transact such business in the State, any action (including 
     prior approval by the State insurance regulator for such 
     State) other than filing of such rates and policies and 
     related information with such State insurance regulator is 
     preempted to the extent such law requires such additional 
     actions for such insurance coverage. This subsection shall 
     not be considered to preempt a provision of State law solely 
     because the law provides that rates and policies for such 
     insurance coverage are, upon such filing, subject to 
     subsequent review and action, which may include actions to 
     disapprove or discontinue use of such rates or policies, by 
     the State insurance regulator.

     SEC. 12. CONSISTENT STATE GUIDELINES FOR COVERAGE FOR ACTS OF 
                   TERRORISM.

       (a) Sense of Congress Regarding Covered Perils.--It is the 
     sense of the Congress that--
       (1) the NAIC, in consultation with the appropriate 
     Administrator, should develop appropriate definitions for 
     acts of terrorism and appropriate standards for making 
     determinations regarding events or occurrences of acts of 
     terrorism;
       (2) each State should adopt the definitions and standards 
     developed by the NAIC for purposes of regulating insurance 
     coverage made available in that State;
       (3) in consulting with the NAIC, the appropriate 
     Administrator should advocate and promote the development of 
     definitions and standards that are appropriate for purposes 
     of this Act; and
       (4) after consultation with the NAIC, the appropriate 
     Administrator should adopt definitions for acts of terrorism 
     and standards for determinations that are appropriate for 
     this Act.

[[Page 23342]]

       (b) Insurance Reserve Guidelines.--
       (1) Sense of congress regarding adoption by states.--It is 
     the sense of the Congress that--
       (A) the NAIC should develop appropriate guidelines for 
     commercial insurers and pools regarding maintenance of 
     reserves against the risks of acts of terrorism; and
       (B) each State should adopt such guidelines for purposes of 
     regulating commercial insurers doing business in that State.
       (2) Consideration of adoption of national guidelines.--Upon 
     the expiration of the 6-month period beginning on the date of 
     the enactment of this Act, the appropriate Administrator 
     shall make a determination of whether the guidelines referred 
     to in paragraph (1) have, by such time, been developed and 
     adopted by nearly all States in a uniform manner. If the 
     appropriate Administrator determines that such guidelines 
     have not been so developed and adopted, the appropriate 
     Administrator shall consider adopting, and may adopt, such 
     guidelines on a national basis in a manner that would 
     supercede any State law regarding maintenance of reserves 
     against such risks.
       (c) Guidelines Regarding Disclosure of Pricing and Terms of 
     Coverage.--
       (1) Sense of congress.--It is the sense of the Congress 
     that the States should require, by laws or regulations 
     governing the provision of commercial property and casualty 
     insurance that includes coverage for acts of terrorism, that 
     the price of any such terrorism coverage, including the costs 
     of any terrorism related assessments or surcharges under this 
     Act, be separately disclosed.
       (2) Adoption of national guidelines.--If the appropriate 
     Administrator determines that the States have not enacted 
     laws or adopted regulations adequately providing for the 
     disclosures described in paragraph (1) within a reasonable 
     period of time after the date of the enactment of this Act, 
     the appropriate Administrator shall, after consultation with 
     the NAIC, adopt guidelines on a national basis requiring such 
     disclosure in a manner that supercedes any State law 
     regarding such disclosure.

     SEC. 13. CONSULTATION WITH STATE INSURANCE REGULATORS AND 
                   NAIC.

       The Administrators shall consult with the State insurance 
     regulators and the NAIC in carrying out this Act. The 
     Administrators may take such actions, including entering into 
     such agreements and providing such technical and 
     organizational assistance to insurers and State insurance 
     regulators, as may be necessary to provide for the 
     distribution of financial assistance under section 6 and the 
     collection of assessments under section 7 and surcharges 
     under section 8.

     SEC. 14. SOVEREIGN IMMUNITY PROTECTIONS.

       (a) Federal Cause of Action for Damages From Terrorist Acts 
     Resulting in Triggering Determination.--
       (1) In general.--If a triggering determination occurs 
     requiring an assessment under section 7 or a surcharge under 
     section 8, there shall exist a Federal cause of action, which 
     shall be the exclusive remedy, for damages claimed pursuant 
     to, or in connection with, any acts of terrorism that caused 
     the insured losses resulting in such triggering 
     determination.
       (2) Substantive law.--The substantive law for decision in 
     any such action shall be derived from the law, including 
     choice of law principles, of the State in which such act of 
     terrorism occurred, unless such law is inconsistent with or 
     preempted by Federal law.
       (3) Jurisdiction.--Pursuant to each triggering 
     determination, the Judicial Panel on Multidistrict Litigation 
     shall designate one or more district courts of the United 
     States which shall have original and exclusive jurisdiction 
     over all actions brought pursuant to this subsection that 
     arise out of the triggering event involved.
       (4) Offset for relief payments.--Any recovery by a 
     plaintiff in an action under this subsection shall be offset 
     by the amount, if any, received by the plaintiff from the 
     United States pursuant to any emergency or disaster relief 
     program, or from any other collateral source, for 
     compensation of losses related to the act of terrorism 
     involved.
       (b) Damages in Actions Regarding Insurance Claims.--In an 
     action brought under this section for damages claimed by an 
     insured pursuant to, or in connection with, any commercial 
     property and casualty insurance providing coverage for acts 
     of terrorism that resulted in a triggering determination:
       (1) Prohibition of punitive damages.--No punitive damages 
     intended to punish or deter may be awarded.
       (2) Noneconomic damages.--
       (A) In general.--Each defendant in such an action shall be 
     liable only for the amount of noneconomic damages allocated 
     to the defendant in direct proportion to the percentage of 
     responsibility of the defendant for the harm to the claimant.
       (B) Definition.--For purposes of subparagraph (A), the term 
     ``noneconomic damages'' means damages for losses for physical 
     and emotional pain, suffering, inconvenience, physical 
     impairment, mental anguish, disfigurement, loss of enjoyment 
     of life, loss of society and companionship, loss of 
     consortium, hedonic damages, injury to reputation, and any 
     other nonpecuniary losses of any kind or nature.
       (c) Right of Subrogation.--The United States shall have the 
     right of subrogation with respect to any claim paid by the 
     United States under this Act.
       (d) Protective Orders.--The United States or any 
     appropriate Administrator carrying out responsibilities under 
     this Act may seek protective orders or assert privileges 
     ordinarily available to the United States to protect against 
     the disclosure of classified information, including the 
     invocation of the military and State secrets privilege.

     SEC. 15. STUDY OF POTENTIAL EFFECTS OF TERRORISM ON LIFE 
                   INSURANCE INDUSTRY.

       (a) Establishment.--Not later than 30 days after the date 
     of enactment of this Act, the President shall establish a 
     commission (in this section referred to as the 
     ``Commission'') to study and report on the potential effects 
     of an act or acts of terrorism on the life insurance industry 
     in the United States and the markets served by such industry.
       (b) Membership and Operations.--
       (1) Appointment.--The Commission shall consist of 5 
     members, as follows:
       (A) The appropriate Administrator, as designated by the 
     President.
       (C) 4 members appointed by the President, who shall be--
       (i) a representative of direct underwriters of life 
     insurance within the United States;
       (ii) a representative of reinsurers of life insurance 
     within the United States;
       (iii) an officer of the NAIC; and
       (iv) a representative of insurance agents for life 
     underwriters.
       (2) Operations.--The chairperson of the Commission shall 
     determine the manner in which the Commission shall operate, 
     including funding, staffing, and coordination with other 
     governmental entities.
       (c) Study.--The Commission shall conduct a study of the 
     life insurance industry in the United States, which shall 
     identify and make recommendations regarding--
       (1) possible actions to encourage, facilitate, and sustain 
     provision by the life insurance industry in the United States 
     of coverage for losses due to death or disability resulting 
     from an act or acts of terrorism, including in the face of 
     threats of such acts; and
       (2) possible actions or mechanisms to sustain or supplement 
     the ability of the life insurance industry in the United 
     States to cover losses due to death or disability resulting 
     from an act or acts of terrorism in the event that--
       (A) such acts significantly affect mortality experience of 
     the population of the United States over any period of time;
       (B) such loses jeopardize the capital and surplus of the 
     life insurance industry in the United States as a whole; or
       (C) other consequences from such acts occur, as determined 
     by the Commission, that may significantly affect the ability 
     of the life insurance industry in the United States to 
     independently cover such losses.
       (d) Recommendations.--The Commission may make a 
     recommendation pursuant to subsection (c) only upon the 
     concurrence of a majority of the members of the Commission.
       (e) Report.--Not later than 120 days after the date of 
     enactment of this Act, the Commission shall submit to the 
     House of Representatives and the Senate a report describing 
     the results of the study and any recommendations developed 
     under subsection (c).
       (f) Termination.--The Commission shall terminate 60 days 
     after submission of the report as provided for in subsection 
     (e).

     SEC. 16. DEFINITIONS.

       For purposes of this Act, the following definitions shall 
     apply:
       (1) Act of terrorism.--
       (A) In general.--The term ``act of terrorism'' means any 
     act that the appropriate Administrator determines meets the 
     requirements under subparagraph (B), as such requirements are 
     further defined and specified by the appropriate 
     Administrator in consultation with the NAIC.
       (B) Requirements.--An act meets the requirements of this 
     subparagraph if the act--
       (i) is unlawful;
       (ii) causes harm to a person, property, or entity, in the 
     United States;
       (iii) is committed by a group of persons or associations 
     who--

       (I) are not a government of a foreign country or the de 
     facto government of a foreign country; and
       (II) are recognized by the Department of State or the 
     appropriate Administrator as a terrorist group or have 
     conspired with such a group or the group's agents or 
     surrogates; and

       (iv) has as its purpose to overthrow or destabilize the 
     government of any country or to influence the policy or 
     affect the conduct of the government of the United States by 
     coercion.
       (2) Appropriate administrators.--The term ``appropriate 
     Administrator'' means, with respect to any function or 
     responsibility of the Federal Government under this Act, the 
     Federal officer designated by the President pursuant to 
     section 3 as responsible for carrying out such function or 
     responsibility.
       (3) Affiliate.--The term ``affiliate'' means, with respect 
     to an insurer, any company that controls, is controlled by, 
     or is under common control with the insurer.
       (4) Aggregate written premium.--The term ``aggregate 
     written premium'' means,

[[Page 23343]]

     with respect to a year, the aggregate premium amount of all 
     commercial property and casualty insurance coverage written 
     during such year for persons or properties in the United 
     States under all lines of commercial property and casualty 
     insurance.
       (5) Commercial insurance.--The term ``commercial 
     insurance'' means property and casualty insurance that is not 
     insurance for homeowners, tenants, private passenger nonfleet 
     automobiles, mobile homes, or other insurance for personal, 
     family, or household needs.
       (6) Commercial insurer.--The term ``commercial insurer'' 
     means any corporation, association, society, order, firm, 
     company, mutual, partnership, individual, aggregation of 
     individuals, or any other legal entity that is engaged in the 
     business of providing commercial property and casualty 
     insurance for persons or properties in the United States. 
     Such term includes any affiliates of a commercial insurer.
       (7) Commercial property and casualty insurance.--The term 
     ``commercial property and casualty insurance'' means property 
     and casualty insurance that is commercial insurance.
       (8) Control.--A company has control over another company 
     if--
       (A) the company directly or indirectly or acting through 
     one or more other persons owns, controls, or has power to 
     vote 25 percent or more of any class of voting securities of 
     the other company;
       (B) the company controls in any manner the election of a 
     majority of the directors or trustees of the other company; 
     or
       (C) the appropriate Administrator determines, after notice 
     and opportunity for hearing, that the company directly or 
     indirectly exercises a controlling influence over the 
     management or policies of the other company.
       (9) Covered period.--The term ``covered period'' has the 
     meaning given such term in section 5(b).
       (10) Industry-wide losses.--The term ``industry-wide 
     losses'' means the aggregate insured losses sustained by all 
     insurers, from coverage written for persons or properties in 
     the United States, under all lines of commercial property and 
     casualty insurance.
       (11) Insured loss.--The term ``insured loss'' means any 
     loss in the United States covered by commercial property and 
     casualty insurance.
       (12) Insurer.--The term ``insurer'' means any corporation, 
     association, society, order, firm, company, mutual, 
     partnership, individual, aggregation of individuals, or any 
     other legal entity that is engaged in the business of 
     providing property and casualty insurance for persons or 
     properties in the United States. Such term includes any 
     affiliates of an insurer.
       (13) NAIC.--The term ``NAIC'' means the National 
     Association of Insurance Commissioners.
       (14) Property and casualty insurance.--The term ``property 
     and casualty insurance'' means insurance against--
       (A) loss of or damage to property;
       (B) loss of income or extra expense incurred because of 
     loss of or damage to property; and
       (C) third party liability claims caused by negligence or 
     imposed by statute or contract.
     Such term does not include health or life insurance.
       (15) State.--The term ``State'' means the States of the 
     United States, the District of Columbia, the Commonwealth of 
     Puerto Rico, the Commonwealth of the Northern Mariana 
     Islands, Guam, the Virgin Islands, American Samoa, and any 
     other territory or possession of the United States.
       (16) State insurance regulator.--The term ``State insurance 
     regulator'' means, with respect to a State, the principal 
     insurance regulatory authority of the State.
       (17) Triggering determination.--The term ``triggering 
     determination'' has the meaning given such term in section 
     5(a).
       (18) Triggering event.--The term ``triggering event'' 
     means, with respect to a triggering determination, the event 
     of an act of terrorism, or the events of such acts, that 
     caused the insured losses resulting in such triggering 
     determination.
       (19) United states.--The term ``United States'' means, 
     collectively, the States (as such term is defined in this 
     section).

     SEC. 17. EXTENSION OF PROGRAM.

       (a) Authority.--If the appropriate Administrator determines 
     that action under this section is necessary to ensure the 
     adequate availability in the United States of commercial 
     property and casualty insurance coverage for acts of 
     terrorism, the appropriate Administrator may provide that the 
     provisions of this Act shall continue to apply with respect 
     to a period or periods, as established by the Administrator, 
     that begin after the expiration of the covered period 
     specified in section 5(b) and end before January 1, 2005.
       (b) Covered Period.--If the appropriate Administrator 
     exercises the authority under subsection (a), notwithstanding 
     section 5(b) and section 16(9), the period or periods 
     established by the appropriate Administrator shall be 
     considered to be the covered period for purposes of this Act.

     SEC. 18. REGULATIONS.

       The appropriate Administrators shall issue any regulations 
     necessary to carry out this Act.

  The SPEAKER pro tempore. In lieu of the amendments recommended by the 
Committee on Financial Services and the Committee on Ways and Means 
printed in the bill, an amendment in the nature of a substitute 
consisting of the text of H.R. 3357 is adopted.
  The text of the bill as amended pursuant to House Resolution 297 is 
as follows:

                               H.R. 3357

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

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Terrorism 
     Risk Protection Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title and table of contents.
Sec. 2. Congressional findings.
Sec. 3. Authority of Secretary of the Treasury.
Sec. 4. Submission of premium information to Secretary.
Sec. 5. Initial and subsequent triggering determinations.
Sec. 6. Federal cost-sharing for commercial insurers.
Sec. 7. Assessments.
Sec. 8. Terrorism loss repayment surcharge.
Sec. 9. Administration of assessments and surcharges.
Sec. 10. Application to self-insurance arrangements and offshore 
              insurers and reinsurers.
Sec. 11. Study of reserves for property and casualty insurance for 
              terrorist or other catastrophic events.
Sec. 12. State preemption.
Sec. 13. Consistent State guidelines for coverage for acts of 
              terrorism.
Sec. 14. Consultation with State insurance regulators and NAIC.
Sec. 15. Litigation management.
Sec. 16. Study of potential effects of terrorism on life insurance 
              industry.
Sec. 17. Railroad and trucking insurance study.
Sec. 18. Study of reinsurance pool system for future acts of terrorism.
Sec. 19. Definitions.
Sec. 20. Covered period and extension of program.
Sec. 21. Regulations.

     SEC. 2. CONGRESSIONAL FINDINGS.

       The Congress finds that--
       (1) the terrorist attacks on the World Trade Center and the 
     Pentagon of September 11, 2001, resulted in a large number of 
     deaths and injuries, the destruction and damage to buildings, 
     and interruption of business operations;
       (2) the attacks have inflicted possibly the largest losses 
     ever incurred by insurers and reinsurers in a single day;
       (3) while the insurance and reinsurance industries have 
     committed to pay the losses arising from the September 11 
     attacks, the resulting disruption has created widespread 
     market uncertainties with regard to the risk of losses 
     arising from possible future terrorist attacks;


       (4) such uncertainty threatens the continued availability 
     of United States commercial property and casualty insurance 
     for terrorism risk at meaningful coverage levels;
       (5) the unavailability of affordable commercial property 
     and casualty insurance for terrorist acts threatens the 
     growth and stability of the United States economy, including 
     impeding the ability of financial services providers to 
     finance commercial property acquisitions and new 
     construction;
       (6) in the past, the private insurance and reinsurance 
     markets have shown a remarkable resiliency in adapting to 
     changed circumstances;
       (7) given time, the private markets will diversify and 
     develop risk spreading mechanisms to increase capacity and 
     guard against possible future losses incurred by terrorist 
     attacks;
       (8) it is necessary to create a temporary industry risk 
     sharing program to ensure the continued availability of 
     commercial property and casualty insurance and reinsurance 
     for terrorism-related risks;
       (9) such action is necessary to limit immediate market 
     disruptions, encourage economic stabilization, and facilitate 
     a transition to a viable market for private terrorism risk 
     insurance;
       (10) in addition, it is necessary promptly to conduct a 
     study of whether there is a need for reserves for property 
     and casualty insurance for terrorist or other catastrophic 
     events; and
       (11) terrorism insurance plays an important role in the 
     efficient functioning of the economy and the financing of 
     commercial property acquisitions and new construction and, 
     therefore, the Congress intends to continue to monitor, 
     review, and evaluate the private terrorism insurance and 
     reinsurance marketplace to determine whether additional 
     action is necessary to maintain the long-term stability of 
     the real estate and capital markets.

[[Page 23344]]



     SEC. 3. AUTHORITY OF SECRETARY OF THE TREASURY.

       The Secretary of the Treasury shall be responsible for 
     carrying out a program for financial assistance for 
     commercial property and casualty insurers, as provided in 
     this Act.

     SEC. 4. SUBMISSION OF PREMIUM INFORMATION TO SECRETARY.

       To the extent such information is not otherwise available 
     to the Secretary, the Secretary may require each insurer to 
     submit, to the Secretary or to the NAIC, a statement 
     specifying the net premium amount of coverage written by such 
     insurer under each line of commercial property and casualty 
     insurance sold by such insurer during such periods as the 
     Secretary may provide.

     SEC. 5. INITIAL AND SUBSEQUENT TRIGGERING DETERMINATIONS.

       (a) In General.--For purposes of this Act, a ``triggering 
     determination'' is a determination by the Secretary that an 
     act of terrorism has occurred during the covered period and 
     that the aggregate insured losses resulting from such 
     occurrence or from multiple occurrences of acts of terrorism 
     all occurring during the covered period, meet the 
     requirements under either of the following paragraphs:
       (1) Industry-wide trigger.--Such industry-wide losses 
     exceed $1,000,000,000.
       (2) Individual insurer trigger.--Such industry-wide losses 
     exceed $100,000,000 and some portion of such losses for any 
     single commercial insurer exceed--
       (A) 10 percent of the capital surplus of such commercial 
     insurer (as such term is defined by the Secretary); and
       (B) 10 percent of the net premium written by such 
     commercial insurer that is in force at the time the insured 
     losses occurred;
     except that this paragraph shall not apply to any commercial 
     insurer that was not providing commercial property and 
     casualty insurance coverage prior to September 11, 2001, 
     unless such insurer incurs such losses under commercial 
     property and casualty insurance providing coverage for acts 
     of terrorism through a pool of reserves for terrorism risks 
     that is not under the control of any commercial insurer.
       (b) Determinations Regarding Occurrences.--The Secretary, 
     after consultation with the Attorney General of the United 
     States and the Secretary of State, shall have the sole 
     authority which may not be delegated or designated to any 
     other officer, employee, or position, for determining 
     whether--
       (1) an occurrence was caused by an act of terrorism; and
       (2) an act of terrorism occurred during the covered period.

     SEC. 6. FEDERAL COST-SHARING FOR COMMERCIAL INSURERS.

       (a) In General.--Pursuant to a triggering determination, 
     the Secretary shall provide financial assistance to 
     commercial insurers in accordance with this section to cover 
     insured losses resulting from acts of terrorism, which shall 
     be repaid in accordance with subsection (e).
       (b) Amount.--
       (1) Industry-wide trigger.--Subject to subsections (c) and 
     (d), with respect to a triggering determination under section 
     5(a)(1), financial assistance shall be made available under 
     this section to each commercial insurer in an amount equal to 
     the difference between--
       (A) 90 percent of the amount of the insured losses of the 
     insurer as a result of the triggering event involved; and
       (B) $5,000,000.
       (2) Individual insurer trigger.--Subject to subsections (c) 
     and (d), with respect to a triggering determination under 
     section 5(a)(2), financial assistance shall be made available 
     under this section, to each commercial insurer incurring 
     insured losses as a result of the triggering event involved 
     that exceed the amounts under subparagraphs (A) and (B) of 
     such section, in an amount equal to the difference between--
       (A) 90 percent of the amount of the insured losses of the 
     insurer as a result of such triggering event; and
       (B) the amount under subparagraph (B) of section 5(a)(2).
       (3) Additional amounts.--Subject to subsection (c), if the 
     Secretary has provided financial assistance to a commercial 
     insurer pursuant to paragraph (2) of this subsection and 
     subsequently makes a triggering determination pursuant to 
     section 5(a)(1), the Secretary shall provide financial 
     assistance to such insurer in connection with such subsequent 
     triggering determination (in addition to the amount of 
     financial assistance provided to such insurer pursuant to 
     paragraph (1) of this subsection) in the amount under section 
     5(a)(2)(B).
       (c) Aggregate Limitation.--
       (1) In general.--The aggregate amount of financial 
     assistance provided pursuant to this section may not exceed 
     $100,000,000,000.
       (2) Sense of congress regarding severe losses.--It is the 
     sense of the Congress that acts of terrorism resulting in 
     insured losses greater than $100,000,000,000 would 
     necessitate further action by the Congress to address such 
     additional losses.
       (d) Limitations.--The Secretary may establish such 
     limitations as may be necessary to ensure that payments under 
     this section in connection with a triggering determination 
     are made only to commercial insurers that are not in default 
     of any obligation under section 7 to pay assessments or under 
     section 8 to collect surcharges.
       (e) Repayment.--Financial assistance made available under 
     this section shall be repaid through assessments under 
     section 7 collected by the Secretary and surcharges remitted 
     to the Secretary under section 8. Any such amounts collected 
     or remitted shall be deposited into the general fund of the 
     Treasury.
       (f) Emergency Designation.--Congress designates the amount 
     of new budget authority and outlays in all fiscal years 
     resulting from this section as an emergency requirement 
     pursuant to section 252(e) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 (2 U.S.C. 901(e)). Such 
     amount shall be available only to the extent that a request, 
     that includes designation of such amount as an emergency 
     requirement as defined in such Act, is transmitted by the 
     President to Congress.

     SEC. 7. ASSESSMENTS.

       (a) In General.--In the case of a triggering determination, 
     each commercial insurer shall be subject to assessments under 
     this section for the purpose of repaying a portion of the 
     financial assistance made available under section 6 in 
     connection with such determination.
       (b) Aggregate Assessment.--Pursuant to a triggering 
     determination, the Secretary shall determine the aggregate 
     amount to be assessed under this section among all commercial 
     insurers, which shall be equal to the lesser of--
       (1) $20,000,000,000; and
       (2) the amount of financial assistance paid under section 6 
     in connection with the triggering determination.
     The aggregate assessment amount under this subsection shall 
     be assessed to commercial insurers through an industry 
     obligation assessment under subsection (c) and, if necessary, 
     the remainder shall be assessed through one or more financing 
     assessments under subsection (d).
       (c) Industry Obligation Assessments.--
       (1) In general.--Immediately upon the occurrence of a 
     triggering determination, the Secretary shall impose an 
     industry obligation assessment under this subsection on all 
     commercial insurers, subject to paragraph (3).
       (2) Amount.--The aggregate amount of an industry obligation 
     assessment in connection with a triggering determination 
     shall be equal to--
       (A) in the case of a triggering determination occurring 
     during the covered period specified in section 20(a), the 
     lesser of--
       (i) the difference between (I) $5,000,000,000, and (II) the 
     aggregate amount of any assessments made by the Secretary 
     pursuant to this section during the portion of such covered 
     period preceding the triggering determination; and
       (ii) the amount of financial assistance made available 
     under section 6 in connection with the triggering 
     determination; or
       (B) such other aggregate industry obligation amount as may 
     apply pursuant to subsection (g).
       (3) Timing of multiple assessments.--
       (A) Delayed imposition and aggregation of assessments.--In 
     the case of any triggering determination occurring within 12 
     months of the occurrence of a previous triggering 
     determination, any industry obligation assessments under this 
     subsection resulting from such subsequent determination shall 
     be imposed upon the conclusion of the quarterly assessment 
     period under subparagraph (B) during which such determination 
     occurs.
       (B) Quarterly assessment period.--With respect to a 
     subsequent triggering determination referred to in 
     subparagraph (A), the quarterly assessment periods under this 
     subparagraph are--
       (i) the 3-month period that begins upon the imposition of 
     the industry obligation assessment resulting from the 
     triggering determination that--

       (I) occurred most recently before such subsequent 
     triggering determination; and
       (II) did not occur within 12 months of the occurrence of 
     any previous triggering determination; and

       (ii) each successive 3-month period thereafter that begins 
     during the covered period.
       (d) Financing Assessments.--
       (1) In general.--If the aggregate assessment amount in 
     connection with a triggering determination exceeds the 
     aggregate amount of the industry obligation assessment under 
     subsection (c) in connection with the determination, the 
     remaining amount shall be assessed through one or more, as 
     may be necessary pursuant to paragraph (3), financing 
     assessments under this subsection.
       (2) Timing.--A financing assessment under this subsection 
     in connection with a triggering determination shall be 
     imposed only upon the expiration of any 12-month period 
     beginning after such determination during which no 
     assessments under this section have been imposed.
       (3) Limitation.--The aggregate amount of any financing 
     assessments imposed under this subsection on any single 
     commercial insurer during any 12-month period shall not 
     exceed the amount that is equal to 3 percent of the net 
     premium for such insurer for such period.

[[Page 23345]]

       (e) Allocation of Assessment.--The portion of the aggregate 
     amount of any industry obligation assessment or financing 
     assessment under this section that is allocated to each 
     commercial insurer shall be based on the ratio that the net 
     premium written by such commercial insurer during the year 
     during which the assessment is imposed bears to the aggregate 
     written premium for such year, subject to section 9 and the 
     limitation under subsection (d)(3) of this section.
       (f) Notice and Obligation To Pay.--
       (1) Notice.--As soon as practicable after any triggering 
     determination, the Secretary shall notify each commercial 
     insurer in writing of an assessment under this section, which 
     notice shall include the amount of the assessment allocated 
     to such insurer.
       (2) Effect of notice.--Upon notice to a commercial insurer, 
     the commercial insurer shall be obligated to pay to the 
     Secretary, not later than 60 days after receipt of such 
     notice, the amount of the assessment on such commercial 
     insurer.
       (3) Failure to make timely payment.--If any commercial 
     insurer fails to pay an assessment under this section before 
     the deadline established under paragraph (2) for the 
     assessment, the Secretary may take either or both of the 
     following actions:
       (A) Civil monetary penalty.--Assess a civil monetary 
     penalty pursuant to section 9(d) upon such insurer.
       (B) Interest.--Require such insurer to pay interest, at 
     such rate as the Secretary considers appropriate, on the 
     amount of the assessment that was not paid before the 
     deadline established under paragraph (2).
       (g) Aggregate Industry Obligation Amount for Program 
     Extension Years.--If the Secretary exercises the authority 
     under section 20(b) to extend the covered period, the 
     aggregate industry obligation amount for purposes of 
     subsection (c)(2)(B) shall, in the case of a triggering 
     determination occurring during the portion of the covered 
     period beginning on the date referred to in section 20(a), be 
     equal to the lesser of--
       (1) the difference between (A) $10,000,000,000, and (B) the 
     aggregate amount of any assessments made by the Secretary 
     pursuant to this section during the 12-month period preceding 
     the triggering determination; and
       (2) the amount of financial assistance made available under 
     section 6 in connection with the triggering determination.
       (h) Administrative Flexibility.--
       (1) Adjustment of assessments.--The Secretary may provide 
     for or require estimations of amounts under this section and 
     may provide for subsequent refunds or require additional 
     payments to correct such estimations, as appropriate.
       (2) Deferral of contributions.--The Secretary may defer the 
     payment of part or all of an assessment required under this 
     section to be paid by a commercial insurer, but only to the 
     extent that the Secretary determines that such deferral is 
     necessary to avoid the likely insolvency of the commercial 
     insurer.
       (3) Timing of assessments.--The Secretary shall make 
     adjustments regarding the timing and imposition of 
     assessments (including the calculation of net premiums and 
     aggregate written premium) as appropriate for commercial 
     insurers that provide commercial property and casualty 
     insurance on a non-calendar year basis.

     SEC. 8. TERRORISM LOSS REPAYMENT SURCHARGE.

       (a) Determination of Imposition and Collection.--
       (1) In general.--If, pursuant to a triggering 
     determination, the Secretary determines that the aggregate 
     amount of financial assistance provided pursuant to section 6 
     exceeds $20,000,000,000, the Secretary shall consider and 
     weigh the factors under paragraph (2) to determine the extent 
     to which a surcharge under this section should be 
     established.
       (2) Factors.--The factors under this paragraph are--
       (A) the ultimate costs to taxpayers if a surcharge under 
     this section is not established;
       (B) the economic conditions in the commercial marketplace;
       (C) the affordability of commercial insurance for small- 
     and medium-sized business; and
       (D) such other factors as the Secretary considers 
     appropriate.
       (3) Policyholder premium.--The amount established by the 
     Secretary as a surcharge under this section shall be 
     established and imposed as a policyholder premium surcharge 
     on commercial property and casualty insurance written after 
     such determination, for the purpose of repaying financial 
     assistance made available under section 6 in connection with 
     such triggering determination.
       (4) Collection.--The Secretary shall provide for commercial 
     insurers to collect surcharge amounts established under this 
     section and remit such amounts collected to the Secretary.
       (b) Amount and Duration.--Subject to subsection (c), the 
     surcharge under this section shall be established in such 
     amount, and shall apply to commercial property and casualty 
     insurance written during such period, as the Secretary 
     determines is necessary to recover the aggregate amount of 
     financial assistance provided under section 6 in connection 
     with the triggering determination that exceeds 
     $20,000,000,000.
       (c) Percentage Limitation.--The surcharge under this 
     section applicable to commercial property and casualty 
     insurance coverage may not exceed, on an annual basis, the 
     amount equal to 3 percent of the premium charged for such 
     coverage.
       (d) Other Terms.--The surcharge under this section shall--
       (1) be based on a percentage of the premium amount charged 
     for commercial property and casualty insurance coverage that 
     a policy provides; and
       (2) be imposed with respect to all commercial property and 
     casualty insurance coverage written during the period 
     referred to in subsection (b).
       (e) Exclusions.--For purposes of this section, commercial 
     property and casualty insurance does not include any 
     reinsurance provided to primary insurance companies.

     SEC. 9. ADMINISTRATION OF ASSESSMENTS AND SURCHARGES.

       (a) Manner and Method.--
       (1) In general.--Except to the extent specified in such 
     sections, the Secretary shall provide for the manner and 
     method of carrying out assessments under section 7 and 
     surcharges under section 8, including the timing and 
     procedures of making assessments and surcharges, notifying 
     commercial insurers of assessments and surcharge 
     requirements, collecting payments from and surcharges through 
     commercial insurers, and refunding of any excess amounts paid 
     or crediting such amounts against future assessments.
       (2) Effect of assessments and surcharges on urban and 
     smaller commercial and rural areas and different lines of 
     insurance.--In determining the method and manner of imposing 
     assessments under section 7 and surcharges under section 8, 
     including the amount of such assessments and surcharges, the 
     Secretary shall take into consideration--
       (A) the economic impact of any such assessments and 
     surcharges on commercial centers of urban areas, including 
     the effect on commercial rents and commercial insurance 
     premiums, particularly rents and premiums charged to small 
     businesses, and the availability of lease space and 
     commercial insurance within urban areas;
       (B) the risk factors related to rural areas and smaller 
     commercial centers, including the potential exposure to loss 
     and the likely magnitude of such loss, as well as any 
     resulting cross-subsidization that might result; and
       (C) the various exposures to terrorism risk for different 
     lines of commercial property and casualty insurance.
       (b) Timing of Coverages and Assessments.--The Secretary may 
     adjust the timing of coverages and assessments provided under 
     this Act to provide for equivalent application of the 
     provisions of this Act to commercial insurers and policies 
     that are not based on a calendar year.
       (c) Adjustment.--The Secretary may adjust the assessments 
     charged under section 7 or the percentage imposed under the 
     surcharge under section 8 at any time, as the Secretary 
     considers appropriate to protect the national interest, which 
     may include avoiding unreasonable economic disruption or 
     excessive market instability and avoiding undue burdens on 
     small businesses.
       (d) Civil Monetary Penalty.--
       (1) In general.--The Secretary may assess a civil monetary 
     penalty in an amount not exceeding the amount under paragraph 
     (2) against any commercial insurer that the Secretary 
     determines, on the record after opportunity for a hearing--
       (A) has failed to pay an assessment under section 7 in 
     accordance with the requirements of, or regulations issued, 
     under this Act;
       (B) has failed to charge, collect, or remit surcharges 
     under section 8 in accordance with the requirements of, or 
     regulations issued under, this Act;
       (C) has intentionally provided to the Secretary erroneous 
     information regarding premium or loss amounts; or
       (D) has otherwise failed to comply with the provisions of, 
     or the regulations issued under, this Act.
       (2) Amount.--The amount under this paragraph is the greater 
     of $1,000,000 and, in the case of any failure to pay, charge, 
     collect, or remit amounts in accordance with this Act or the 
     regulations issued under this Act, such amount in dispute.

     SEC. 10. APPLICATION TO SELF-INSURANCE ARRANGEMENTS AND 
                   OFFSHORE INSURERS AND REINSURERS.

       (a) Self-Insurance Arrangements.--The Secretary may, in 
     consultation with the NAIC, apply the provisions of this Act, 
     as appropriate, to self-insurance arrangements by 
     municipalities and other entities, but only if such 
     application is determined before the occurrence of a 
     triggering event and all of the provisions of this Act are 
     applied uniformly to such entities.
       (b) Offshore Insurers and Reinsurers.--The Secretary shall 
     ensure that the provisions of this Act are applied as 
     appropriate to any offshore or non-admitted entities that 
     provide commercial property and casualty insurance.

[[Page 23346]]



     SEC. 11. STUDY OF RESERVES FOR PROPERTY AND CASUALTY 
                   INSURANCE FOR TERRORIST OR OTHER CATASTROPHIC 
                   EVENTS.

       (a) In General.--The Secretary of the Treasury shall 
     conduct a study of issues relating to permitting property and 
     casualty insurance companies to establish deductible reserves 
     against losses for future acts of terrorism, including--
       (1) whether such tax-favored reserves would promote (A) 
     insurance coverage of risks of terrorism, and (B) the 
     accumulation of additional resources needed to satisfy 
     potential claims resulting from such risks,
       (2) the lines of business for which such reserves would be 
     appropriate, including whether such reserves should be 
     applied to personal or commercial lines of business,
       (3) how the amount of such reserves would be determined,
       (4) how such reserves would be administered,
       (5) a comparison of the Federal tax treatment of such 
     reserves with other insurance reserves permitted under 
     Federal tax laws,
       (6) an analysis of the use of tax-favored reserves for 
     catastrophic events, including acts of terrorism, under the 
     tax laws of foreign countries, and
       (7) whether it would be appropriate to permit similar 
     reserves for other future catastrophic events, such as 
     natural disasters, taking into account the factors under the 
     preceding paragraphs.
       (b) Report.--Not later than 4 months after the date of the 
     enactment of this Act, the Secretary of the Treasury shall 
     submit a report to Congress on the results of the study under 
     subsection (a), together with recommendations for amending 
     the Internal Revenue Code of 1986 or other appropriate 
     action.

     SEC. 12. STATE PREEMPTION.

       (a) Covered Perils.--A commercial insurer shall be 
     considered to have complied with any State law that requires 
     or regulates the provision of insurance coverage for acts of 
     terrorism if the insurer provides coverage in accordance with 
     the definitions regarding acts of terrorism under this Act or 
     under any regulations issued by the Secretary.
       (b) Rate Laws.--If any provision of any State law prevents 
     an insurer from increasing its premium rates in an amount 
     necessary to recover any assessments pursuant to section 7, 
     such provision is preempted only to the extent necessary to 
     provide for such insurer to recover such losses.
       (c) File and Use.--
       (1) In general.--With respect only to commercial property 
     and casualty insurance covering acts of terrorism, any 
     provision of State law that requires, as a condition 
     precedent to the effectiveness of rates or policies for such 
     insurance that is made available by an insurer licensed to 
     transact such business in the State, any action (including 
     prior approval by the State insurance regulator for such 
     State) other than filing of such rates and policies and 
     related information with such State insurance regulator is 
     preempted to the extent such law requires such additional 
     actions for such insurance coverage.
       (2) Subsequent review authority.--Paragraph (1) shall not 
     be considered to preempt a provision of State law solely 
     because the law provides that rates and policies for such 
     insurance coverage are, upon such filing, subject to 
     subsequent review and action, which may include actions to 
     disapprove or discontinue use of such rates or policies, by 
     the State insurance regulator.
       (3) Treatment of prior review provisions.--Any authority 
     for prior review and action by a State regulator preempted 
     under paragraph (1) shall be deemed to be authority to 
     conduct a subsequent review and action on such filings.

     SEC. 13. CONSISTENT STATE GUIDELINES FOR COVERAGE FOR ACTS OF 
                   TERRORISM.

       (a) Sense of Congress Regarding Covered Perils.--It is the 
     sense of the Congress that--
       (1) the NAIC, in consultation with the Secretary, should 
     develop appropriate definitions for acts of terrorism that 
     are consistent with this Act and appropriate standards for 
     making determinations regarding occurrences of acts of 
     terrorism;
       (2) each State should adopt the definitions and standards 
     developed by the NAIC for purposes of regulating insurance 
     coverage made available in that State;
       (3) in consulting with the NAIC, the Secretary should 
     advocate and promote the development of definitions and 
     standards that are appropriate for purposes of this Act; and
       (4) after consultation with the NAIC, the Secretary should 
     adopt further definitions for acts of terrorism and standards 
     for determinations that are appropriate for this Act.
       (b) Insurance Reserve Guidelines.--
       (1) Sense of congress regarding adoption by states.--It is 
     the sense of the Congress that--
       (A) the NAIC should develop appropriate guidelines for 
     commercial insurers and pools regarding maintenance of 
     reserves against the risks of acts of terrorism; and
       (B) each State should adopt such guidelines for purposes of 
     regulating commercial insurers doing business in that State.
       (2) Consideration of adoption of national guidelines.--Upon 
     the expiration of the 6-month period beginning on the date of 
     the enactment of this Act, the Secretary shall make a 
     determination of whether the guidelines referred to in 
     paragraph (1) have, by such time, been developed and adopted 
     by nearly all States in a uniform manner. If the Secretary 
     determines that such guidelines have not been so developed 
     and adopted, the Secretary shall consider adopting, and may 
     adopt, such guidelines on a national basis in a manner that 
     supersedes any State law regarding maintenance of reserves 
     against such risks.
       (c) Guidelines Regarding Disclosure of Pricing and Terms of 
     Coverage.--
       (1) Sense of congress.--It is the sense of the Congress 
     that the States should require, by laws or regulations 
     governing the provision of commercial property and casualty 
     insurance that includes coverage for acts of terrorism, that 
     the price of any such terrorism coverage, including the costs 
     of any terrorism related assessments or surcharges under this 
     Act, be separately disclosed.
       (2) Adoption of national guidelines.--If the Secretary 
     determines that the States have not enacted laws or adopted 
     regulations adequately providing for the disclosures 
     described in paragraph (1) within a reasonable period of time 
     after the date of the enactment of this Act, the Secretary 
     shall, after consultation with the NAIC, adopt guidelines on 
     a national basis requiring such disclosure in a manner that 
     supersedes any State law regarding such disclosure.

     SEC. 14. CONSULTATION WITH STATE INSURANCE REGULATORS AND 
                   NAIC.

       (a) In General.--The Secretary shall consult with the State 
     insurance regulators and the NAIC in carrying out this Act.
       (b) Financial Assistance, Assessments, and Surcharges.--The 
     Secretary may take such actions, including entering into such 
     agreements and providing such technical and organizational 
     assistance to insurers and State insurance regulators, as may 
     be necessary to provide for the distribution of financial 
     assistance under section 6 and the collection of assessments 
     under section 7 and surcharges under section 8.
       (c) Investigating and Auditing Claims.--The Secretary may, 
     in consultation with the State insurance regulators and the 
     NAIC, investigate and audit claims of insured losses by 
     commercial insurers and otherwise require verification of 
     amounts of premiums or losses, as appropriate.

     SEC. 15. LITIGATION MANAGEMENT.

       (a) Federal Cause of Action for Claims Relating to 
     Terrorist Acts.--
       (1) In general.--Subject to paragraph (2), if the Secretary 
     makes a determination pursuant to section 5(b) that one or 
     more acts of terrorism occurred, there shall exist a Federal 
     cause of action, which, except as provided in subsection (b), 
     shall be the exclusive remedy for claims arising out of, 
     relating to, or resulting from such acts of terrorism.
       (2) Effect of determination.--A determination referred to 
     in paragraph (1)--
       (A) shall not be subject to judicial review;
       (B) shall take effect upon its publication in the Federal 
     Register; and
       (C) shall be subject to such changes as the Secretary may 
     provide in one or more later determinations made in 
     accordance with the provisions of this paragraph.
       (3) Substantive law.--The substantive law for decision in 
     any such action shall be derived from the law, including 
     choice of law principles, of the State in which such acts of 
     terrorism occurred, unless such law is inconsistent with or 
     preempted by Federal law.
       (4) Jurisdiction.--For each determination under paragraph 
     (1), the Judicial Panel on Multidistrict Litigation shall 
     designate one or more district courts of the United States 
     which shall have original and exclusive jurisdiction over all 
     actions for any claim (including any claim for loss of 
     property, personal injury, or death) brought pursuant to this 
     subsection. The Judicial Panel on Multidistrict Litigation 
     shall select and assign the district court or courts based on 
     the convenience of the parties and the just and efficient 
     conduct of the proceedings. For purposes of personal 
     jurisdiction, the district court or courts designated by the 
     Judicial Panel on Multidistrict Litigation shall be deemed to 
     sit in all judicial districts in the United States.
       (5) Limits on damages.--In an action brought under this 
     subsection for damages:
       (A) No punitive damages intended to punish or deter, 
     exemplary damages, or other damages not intended to 
     compensate a plaintiff for actual losses may be awarded, nor 
     shall any party be liable for interest prior to the judgment.
       (B)(i) Each defendant in such an action shall be liable 
     only for the amount of noneconomic damages allocated to the 
     defendant in direct proportion to the percentage of 
     responsibility of the defendant for the harm to the 
     plaintiff, and no plaintiff may recover noneconomic damages 
     unless the plaintiff suffered physical harm.
       (ii) For purposes of clause (i), the term ``noneconomic 
     damages'' means damages for losses for physical and emotional 
     pain, suffering, inconvenience, physical impairment, mental 
     anguish, disfigurement, loss of enjoyment of life, loss of 
     society and companionship, loss of consortium, hedonic 
     damages, injury to reputation, and any other nonpecuniary 
     losses.
       (6) Collateral sources.--Any recovery by a plaintiff in an 
     action under this subsection

[[Page 23347]]

     shall be reduced by the amount of collateral source 
     compensation, if any, that the plaintiff has received or is 
     entitled to receive as a result of the acts of terrorism with 
     respect to which the determination under paragraph (1) was 
     made.
       (7) Attorney fees.--Reasonable attorneys fees for work 
     performed shall be subject to the discretion of the court, 
     but in no event shall any attorney charge, demand, receive, 
     or collect for services rendered, fees or compensation in an 
     amount in excess of 20 percent of the damages ordered by the 
     court to be paid pursuant to this section, or in excess of 20 
     percent of any court-approved settlement made of any claim 
     cognizable under this section. Any attorney who charges, 
     demands, receives, or collects for services rendered in 
     connection with such claim any amount in excess of that 
     allowed under this section, if recovery be had, shall be 
     fined not more than $2,000 or imprisoned not more than 1 
     year, or both.
       (b) Exclusion.--Nothing in this section shall in any way 
     limit the liability of any person who--
       (1) attempts to commit, knowingly participates in, aids and 
     abets, or commits any act of terrorism with respect to which 
     a determination under subsection (a)(1) was made, or any 
     criminal act related to or resulting from such act of 
     terrorism; or
       (2) participates in a conspiracy to commit any such act of 
     terrorism or any such criminal act.
       (c) Right of Subrogation.--The United States shall have the 
     right of subrogation with respect to any claim paid by the 
     United States under this Act.
       (d) Relationship to Other Law.--Nothing in this section 
     shall be construed to affect--
       (1) any party's contractual right to arbitrate a dispute; 
     or
       (2) any provision of the Air Transportation Safety and 
     System Stabilization Act (Public Law 107-42; 49 U.S.C. 40101 
     note).
       (e) Satisfaction of Judgments From Frozen Assets of 
     Terrorists, Terrorist Organizations, and State Sponsors of 
     Terrorism.--
       (1) In general.--Except as provided in paragraph (2), in 
     every case in which a person obtains a judgment against a 
     terrorist party on a claim for compensatory damages for an 
     act of terrorism, or a claim for money damages brought 
     pursuant to section 1605(a)(7) of title 28, United States 
     Code, the frozen assets of that terrorist party, or any 
     agency or instrumentality of that terrorist party, shall be 
     available for satisfaction of the judgment, to the extent of 
     any compensatory damages awarded in the judgment for which 
     the terrorist party is liable.
       (2) Presidential waiver.--
       (A) Subject to subparagraph (B), upon determining on an 
     asset-by-asset basis that a waiver is necessary in the 
     national security interest, the President may waive the 
     requirements of this subsection in connection with (and prior 
     to the enforcement of) any judicial order directing 
     attachment in aid of execution or execution against any 
     property subject to the Vienna Convention on Diplomatic 
     Relations or the Vienna Convention on Consular Relations.
       (B) A waiver under this paragraph shall not apply to--
       (i) property subject to the Vienna Convention on Diplomatic 
     Relations or the Vienna Convention on Consular Relations that 
     has been used for any nondiplomatic purpose (including use as 
     rental property), the proceeds of such use; or
       (ii) any asset subject to the Vienna Convention on 
     Diplomatic Relations or the Vienna Convention on Consular 
     Relations that is sold or otherwise transferred for value to 
     a third party, the proceeds of such sale or transfer.
       (3) Definitions.--In this subsection:
       (A) The term ``terrorist party'' means a terrorist, a 
     terrorist organization, or a foreign state designated as a 
     state sponsor of terrorism under section 6(j) of the Export 
     Administration Act of 1979 (50 U.S.C. App. 2405(j)) or 
     section 620A of the Foreign Assistance Act of 1961 (22 U.S.C. 
     2371).
       (B) The term ``frozen assets'' means assets seized or 
     frozen by the United States in accordance with law.
       (C) The term ``property subject to the Vienna Convention on 
     Diplomatic Relations or the Vienna Convention on Consular 
     Relations'' and the term ``asset subject to the Vienna 
     Convention on Diplomatic Relations or the Vienna Convention 
     on Consular Relations'' mean any property or asset, 
     respectively, the attachment in aid of execution or execution 
     of which would result in a violation of an obligation of the 
     United States under the Vienna Convention on Diplomatic 
     Relations or the Vienna Convention on Consular Relations, as 
     the case may be.

     SEC. 16. STUDY OF POTENTIAL EFFECTS OF TERRORISM ON LIFE 
                   INSURANCE INDUSTRY.

       (a) Establishment.--Not later than 30 days after the date 
     of enactment of this Act, the President shall establish a 
     commission (in this section referred to as the 
     ``Commission'') to study and report on the potential effects 
     of an act or acts of terrorism on the life insurance industry 
     in the United States and the markets served by such industry.
       (b) Membership and Operations.--
       (1) Appointment.--The Commission shall consist of 7 
     members, as follows:
       (A) The Secretary of the Treasury or the designee of the 
     Secretary.
       (B) The Chairman of the Board of Governors of the Federal 
     Reserve System or the designee of the Chairman.
       (C) The Assistant to the President for Homeland Security.
       (D) 4 members appointed by the President, who shall be--
       (i) a representative of direct underwriters of life 
     insurance within the United States;
       (ii) a representative of reinsurers of life insurance 
     within the United States;
       (iii) an officer of the NAIC; and
       (iv) a representative of insurance agents for life 
     underwriters.
       (2) Operations.--The chairperson of the Commission shall 
     determine the manner in which the Commission shall operate, 
     including funding, staffing, and coordination with other 
     governmental entities.
       (c) Study.--The Commission shall conduct a study of the 
     life insurance industry in the United States, which shall 
     identify and make recommendations regarding--
       (1) possible actions to encourage, facilitate, and sustain 
     the provision, by the life insurance industry in the United 
     States, of coverage for losses due to death or disability 
     resulting from an act or acts of terrorism, including in the 
     face of threats of such acts; and
       (2) possible actions or mechanisms to sustain or supplement 
     the ability of the life insurance industry in the United 
     States to cover losses due to death or disability resulting 
     from an act or acts of terrorism in the event that--
       (A) such acts significantly affect mortality experience of 
     the population of the United States over any period of time;
       (B) such losses jeopardize the capital and surplus of the 
     life insurance industry in the United States as a whole; or
       (C) other consequences from such acts occur, as determined 
     by the Commission, that may significantly affect the ability 
     of the life insurance industry in the United States to 
     independently cover such losses.
       (d) Recommendations.--The Commission may make a 
     recommendation pursuant to subsection (c) only upon the 
     concurrence of a majority of the members of the Commission.
       (e) Report.--Not later than 120 days after the date of 
     enactment of this Act, the Commission shall submit to the 
     House of Representatives and the Senate a report describing 
     the results of the study and any recommendations developed 
     under subsection (c).
       (f) Termination.--The Commission shall terminate 60 days 
     after submission of the report pursuant to subsection (e).

     SEC. 17. RAILROAD AND TRUCKING INSURANCE STUDY.

       The Secretary of the Treasury shall conduct a study to 
     determine how the Federal Government can address a possible 
     crisis in the availability and affordability of railroad and 
     trucking insurance by making such insurance for acts of 
     terrorism available on commercially reasonable terms. Not 
     later than 120 days after the date of the enactment of this 
     Act the Secretary shall submit to the Congress a report 
     regarding the results and conclusions of the study.

     SEC. 18. STUDY OF REINSURANCE POOL SYSTEM FOR FUTURE ACTS OF 
                   TERRORISM.

       (a) Study.--The Secretary, the Board of Governors of the 
     Federal Reserve System, and the Comptroller General of the 
     United States shall jointly conduct a study on the 
     advisability and effectiveness of establishing a reinsurance 
     pool system relating to future acts of terrorism to replace 
     the program provided for under this Act.
       (b) Consultation.--In conducting the study under subsection 
     (a), the Secretary, the Board of Governors of the Federal 
     Reserve System, and the Comptroller General shall consult 
     with (1) academic experts, (2) the United Nations Secretariat 
     for Trade and Development, (3) representatives from the 
     property and casualty insurance industry, (4) representatives 
     from the reinsurance industry, (5) the NAIC, and (6) such 
     consumer organizations as the Secretary considers 
     appropriate.
       (c) Report.--Not later than 6 months after the date of the 
     enactment of this Act, the Secretary, the Board of Governors 
     of the Federal Reserve System, and the Comptroller General 
     shall jointly submit a report to the Congress on the results 
     of the study under subsection (a).

     SEC. 19. DEFINITIONS.

       For purposes of this Act, the following definitions shall 
     apply:
       (1) Act of terrorism.--
       (A) In general.--The term ``act of terrorism'' means any 
     act that the Secretary determines meets the requirements 
     under subparagraph (B), as such requirements are further 
     defined and specified by the Secretary in consultation with 
     the NAIC.
       (B) Requirements.--An act meets the requirements of this 
     subparagraph if the act--
       (i) is unlawful;
       (ii) causes harm to a person, property, or entity, in the 
     United States, or in the case of a domestic United States air 
     carrier or a United States flag vessel (or a vessel based 
     principally in the United States on which United States 
     income tax is paid and whose insurance coverage is subject to 
     regulation

[[Page 23348]]

     in the United States), in or outside the United States;
       (iii) is committed by a person or group of persons or 
     associations who are recognized, either before or after such 
     act, by the Department of State or the Secretary as an 
     international terrorist group or have conspired with such a 
     group or the group's agents or surrogates;
       (iv) has as its purpose to overthrow or destabilize the 
     government of any country, or to influence the policy or 
     affect the conduct of the government of the United States or 
     any segment of the economy of United States, by coercion; and
       (v) is not considered an act of war, except that this 
     clause shall not apply with respect to any coverage for 
     workers compensation.
       (2) Affiliate.--The term ``affiliate'' means, with respect 
     to an insurer, any company that controls, is controlled by, 
     or is under common control with the insurer.
       (3) Aggregate written premium.--The term ``aggregate 
     written premium'' means, with respect to a year, the 
     aggregate premium amount of all commercial property and 
     casualty insurance coverage written during such year under 
     all lines of commercial property and casualty insurance.
       (4) Commercial insurer.--The term ``commercial insurer'' 
     means any corporation, association, society, order, firm, 
     company, mutual, partnership, individual, aggregation of 
     individuals, or any other legal entity that provides 
     commercial property and casualty insurance. Such term 
     includes any affiliates of a commercial insurer.
       (5) Commercial property and casualty insurance.--
       (A) In general.--The term ``commercial property and 
     casualty insurance'' means insurance or reinsurance, or 
     retrocessional reinsurance, for persons or properties in the 
     United States against--
       (i) loss of or damage to property;
       (ii) loss of income or extra expense incurred because of 
     loss of or damage to property;
       (iii) third party liability claims caused by negligence or 
     imposed by statute or contract, including workers 
     compensation; or
       (iv) loss resulting from debt or default of another.
       (B) Exclusions.--Such term does not include--
       (i) insurance for homeowners, tenants, private passenger 
     nonfleet automobiles, mobile homes, or other insurance for 
     personal, family, or household needs;
       (ii) insurance for professional liability, including 
     medical malpractice, errors and omissions, or directors' and 
     officers' liability; or
       (iii) health or life insurance.
       (6) Control.--A company has control over another company 
     if--
       (A) the company directly or indirectly or acting through 
     one or more other persons owns, controls, or has power to 
     vote 25 percent or more of any class of voting securities of 
     the other company;
       (B) the company controls in any manner the election of a 
     majority of the directors or trustees of the other company; 
     or
       (C) the Secretary determines, after notice and opportunity 
     for hearing, that the company directly or indirectly 
     exercises a controlling influence over the management or 
     policies of the other company.
       (7) Covered period.--The term ``covered period'' has the 
     meaning given such term in section 20.
       (8) Industry-wide losses.--The term ``industry-wide 
     losses'' means the aggregate insured losses sustained by all 
     insurers from coverage written under all lines of commercial 
     property and casualty insurance.
       (9) Insured loss.--The term ``insured loss'' means any 
     loss, net of reinsurance and retrocessional reinsurance, 
     covered by commercial property and casualty insurance.
       (10) NAIC.--The term ``NAIC'' means the National 
     Association of Insurance Commissioners.
       (11) Net premium.--The term ``net premium'' means, with 
     respect a commercial insurer and a year, the aggregate 
     premium amount collected by such commercial insurer for all 
     commercial property and casualty insurance coverage written 
     during such year under all lines of commercial property and 
     casualty insurance by such commercial insurer, less any 
     premium paid by such commercial insurer to other commercial 
     insurers to insure or reinsure those risks.
       (12) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury.
       (13) State.--The term ``State'' means the States of the 
     United States, the District of Columbia, the Commonwealth of 
     Puerto Rico, the Commonwealth of the Northern Mariana 
     Islands, Guam, the Virgin Islands, American Samoa, and any 
     other territory or possession of the United States.
       (14) State insurance regulator.--The term ``State insurance 
     regulator'' means, with respect to a State, the principal 
     insurance regulatory authority of the State.
       (15) Triggering determination.--The term ``triggering 
     determination'' has the meaning given such term in section 
     5(a).
       (16) Triggering event.--The term ``triggering event'' 
     means, with respect to a triggering determination, the 
     occurrence of an act of terrorism, or the occurrence of such 
     acts, that caused the insured losses resulting in such 
     triggering determination.
       (17) United states.--The term ``United States'' means, 
     collectively, the States (as such term is defined in this 
     section).

     SEC. 20. COVERED PERIOD AND EXTENSION OF PROGRAM.

       (a) Covered Period.--Except to the extent provided 
     otherwise under subsection (b), for purposes of this Act, the 
     term ``covered period'' means the period beginning on the 
     date of the enactment of this Act and ending on January 1, 
     2003.
       (b) Extension of Program.--If the Secretary determines that 
     extending the covered period is necessary to ensure the 
     adequate availability in the United States of commercial 
     property and casualty insurance coverage for acts of 
     terrorism, the Secretary may, subject to subsection (c), 
     extend the covered period by not more than two years.
       (c) Report.--The Secretary may exercise the authority under 
     subsection (b) to extend the covered period only if the 
     Secretary submits a report to the Congress providing notice 
     of and setting forth the reasons for such extension.

     SEC. 21. REGULATIONS.

       The Secretary shall issue any regulations necessary to 
     carry out this Act.

  The SPEAKER pro tempore. After 1 hour of debate on the bill, as 
amended, it shall be in order to consider a further amendment printed 
in House Report 107-304, if offered by the gentleman from New York (Mr. 
LaFalce), or his designee, which shall be considered read and shall be 
debatable for 1 hour, equally divided and controlled by the proponent 
and an opponent.
  The gentleman from Ohio (Mr. Oxley) and the gentleman from New York 
(Mr. LaFalce) each will control 30 minutes of debate on the bill.
  The Chair recognizes the gentleman from Ohio (Mr. Oxley).


                             General Leave

  Mr. OXLEY. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
and include extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Ohio?
  There was no objection.
  Mr. OXLEY. Mr. Speaker, I yield such time as she may consume to the 
gentlewoman from New Jersey (Mrs. Roukema).
  Mrs. ROUKEMA. Mr. Speaker, I congratulate the chairman for his 
leadership on this issue, and strongly support the legislation.
  Mr. Speaker, I rise in strong support of H.R. 3210, the Terrorism 
Risk Protection Act and want to commend Chairman Oxley for his 
leadership on this important issue. The legislation that we are 
considering here today represents a balanced approach to a difficult 
problem. It not only will allow the industry to move forward in 
providing continued terrorist coverage but it will protect the American 
taxpayer.
  While the industry is able to pay the $40-$50 billion in claims 
resulting from the September 11 attack, it will need our help to 
protect against future acts of terrorism. The insurance industry is a 
business of estimating risks on events that cannot be predicted with 
any certainty such as earthquakes, fires, hurricanes and floods. These 
types of events are priced according to history of catastrophic events 
over time. But the World Trade terrorist disaster has no precedents. 
There is no possible way to price for the likelihood of another 
occurrence or the size of the potential loss.
  Consequently, it stands to reason that any future incident of like 
size could threaten the stability of the property/casualty market. In 
these uncertain times and given the magnitude of the September 11 
event, reinsurance companies are skittish about providing terrorist 
coverage. If the reinsurance industry excludes terrorist coverage from 
its policies, the primary insurers will find it difficult to provide 
coverage without risking the financial health of their companies.
  The lack of coverage has become an immediate issue for many companies 
that are subject to short-term cancellation provisions (including many 
aviation businesses) or that had October 1, 2001, renewal dates. It has 
the potential to become a nationwide crisis January 1, 2002, when most 
commercial policies are up for renewal. Companies may find terrorism 
insurance impossible to buy. This could have a serious ripple effect on 
the mortgage and real estate industries.
  Congress must head off this danger. The industry needs the certainty 
of this legislation to renegotiate their contracts prior to the January 
2002 deadline.
  The key elements of this bill includes provisions that are modeled 
after existing State

[[Page 23349]]

risk-sharing insurance programs. The bill sets a trigger at $100 
million for small insurers and $1 billion as an industry wide aggregate 
and provides a 90 percent Federal share with 10 percent individual 
company retention. Companies would be required to payback the first $20 
billion in losses through assessments and allowed to recoup subsequent 
losses through commercial policyholder surcharges.
  Finally, this bill provides important liability reforms for private 
businesses that could be affected by future terrorist attacks. We need 
only look at the 1993 World Trade Center bombing to understand the need 
for these important reforms. The 1993 World Trade Center bombing 
resulted in 500 lawsuits by 700 individuals, businesses and insurance 
companies. Damages claimed amounted to $550 million, and those cases 
are just now getting started. It is unthinkable that we would not 
provide innocent businesses protection against terrorist-inspired 
litigation. Businesses and property owners simply cannot guard against 
terrorist attacks seeking to cause mass destruction. This bill includes 
common sense reforms that will assure the continued availability of 
affordable insurance.
  Let me remind my colleagues that provisions to limit punitive damages 
and attorneys fees were included in the Airline Security Act that 
originally passed the House with one distinct difference--H.R. 3210 
does not cap damage awards. The litigation management provisions in 
H.R. 3210 would also benefit victims of future terrorist attacks.
  H.R. 3210 represents a balanced approach that will give the insurance 
industry the short-term assistance they need and will protect the 
taxpaying consumer by asking that every dollar of assistance be repaid.
  Mr. OXLEY. Mr. Speaker, I yield myself 5\1/2\ minutes.
  Mr. OXLEY. Mr. Speaker, on September 11, the al Qaeda network began a 
war of terrorism against our Nation. The insidious attack was planned 
not only to kill Americans, but to disrupt our Nation's financial 
center. The September 11 attack caused greater insured losses than most 
of the recent top disasters combined, and, unfortunately, since that 
attack, the foreign reinsurance market has refused to provide further 
coverage for terrorism.
  Without reinsurance for terrorism, primary insurers are not able to 
responsibly insure high level risks. In fact, they have been filing new 
policy forms to exclude terrorism coverage in almost every State of 
this Nation. Without insurance, many creditors will not lend for new 
projects, and many new businesses, projects, and buildings will simply 
never happen.
  We cannot afford this significant economic disruption at a time of 
economic sluggishness. I am confident that the private insurance sector 
will eventually adapt to the challenges of the new world, they always 
do. But 70 percent of commercial insurance policies will be renewed 
over the next 35 days, and if this Congress does not pass this 
legislation, many of those policies will not be renewed and our economy 
will be further injured. This is exactly the result that the terrorists 
were hoping for, and this is why it is absolutely imperative that the 
House act today to pass this bill.

                              {time}  1300

  We crafted legislation in our committee to address this problem. Mr. 
Speaker, H.R. 3210 creates a temporary risk-spreading program which 
creates the strongest incentives for consumers to be able to obtain 
coverage with significant solvency protections to maintain a stable 
market. We created certainty in terrorist exposure for companies by 
spreading any terrorism risk across the industry with temporary Federal 
assistance. But the role of the Federal Government is limited to a 
helping hand up, not a hand out. Any assistance provided must be repaid 
by the industry over time.
  We also based our bill on systems being used successfully in almost 
every single State today: the State insurance guarantee funds. These 
programs provide immediate liquidity up front to ensure that 
policyholders are paid, and then the costs are collected back from the 
industry as a whole. It is simple, it works, and we have the programs 
in place today we can build on.
  This is not the approach favored by many in the industry that want 
free taxpayer money, but it is an approach supported by consumer and 
taxpayer groups as diverse as the Consumer Federation of America, 
Americans for Tax Reform, and Citizens Against Government Waste; and it 
is critical for the House to pass this legislation today to make a 
clear statement that we are going to protect the economy and we are 
going to do it in a way that will not put the American taxpayer on the 
hook or require future tax increases.
  We need to get this legislation done today. Time is running out. We 
passed H.R. 3210 out of committee with 35 bipartisan cosponsors on a 
nearly unanimous voice vote. Since then, the only significant changes 
our committee has made were in response to our good-faith commitment to 
continue working to address Members' concerns, primarily to speed up 
the assessments and create more flexibility for rural areas and small 
towns.
  The text made in order by the rule includes additional liability 
reforms placing limitations on punitive damages and trial lawyer fees 
for terrorist events. We have been working with Members' staffs in both 
parties and will continue to make improvements to the insurance 
provisions. But the minority is being given two opportunities to amend 
this bill; and once the House works its will, we cannot allow a 
disagreement on lawyers' fees to sabotage what would otherwise be a 
bipartisan bill that is critical to our economy.
  Mr. Speaker, I support limits on legal fees and other liability 
reforms to ensure that a future terrorist attack does not create a rush 
to the courthouse. I supported more limited reforms in the Committee on 
Financial Services. I will back the bill with or without the 
strengthened provisions. But we cannot let the fight over the trial 
lawyers undermine our critical responsibility to hold together our 
Nation's financial foundations. This bill is critical, and it must be 
sent to the President this year.
  Mr. Speaker, H.R. 3210 is pro-consumer, pro-taxpayer, and pro-
business. Regardless of whether Members choose to side with the trial 
lawyers or the liability reforms, we cannot let the terrorists win by 
disrupting our economy because we failed to do our job in passing this 
legislation.
  I must point out the contributions of the gentleman from Louisiana 
(Mr. Baker) to this bill which reflects many of his ideas and much of 
his energy as well. He, of course, chairs the appropriate subcommittee 
of our Committee on Financial Services. The gentleman from Alabama (Mr. 
Bachus), the gentleman from Texas (Mr. Bentsen), and many others on the 
Committee on Financial Services also deserve thanks for a great job on 
this bill. The gentleman from Connecticut (Mr. Shays), the gentleman 
from North Dakota (Mr. Pomeroy), the gentleman from New York (Mr. 
Fossella), and the gentleman from New York (Mr. Grucci) were early and 
enthusiastic supporters of our commonsense, pay-back-the-taxpayer 
approach.
  Today it is time to put away egos and forget partisan blustering and 
special interest politics. It is time to help those Americans who are 
working to create jobs: the guy who is trying to buy a business, expand 
a manufacturing plant, or construct a new building.
  The 9-11 attack is over, but the economic terrorism goes on and on 
unless we act. I strongly urge support for this important legislation.
  Mr. Speaker, I also want to thank the Chairman of the Budget 
Committee, Mr. Nussle, for his assistance in moving this legislation to 
the floor quickly. I am inserting for the Record an exchange of letters 
regarding his committee's jurisdictional interest in this legislation.

                                         House of Representatives,


                                      Committee on the Budget,

                                Washington, DC, November 26, 2001.
     Hon. Michael G. Oxley,
     Chairman, Committee on Financial Services, Rayburn House 
         Office Building, Washington, DC.
       Dear Chairman Oxley: I am writing regarding H.R. 3210, the 
     ``Terrorism Risk Protection Act'' which was recently ordered 
     reported by the Committee on Financial Services. As you know, 
     the legislation includes provisions addressing the budgetary 
     treatment of certain spending, a matter which falls within 
     the jurisdiction of the Committee on the Budget pursuant to 
     rule X of the Rules of the House of Representatives.
       Because of your ongoing willingness to work with the 
     Committee on the Budget on

[[Page 23350]]

     this matter, and the need to move this legislation 
     expeditiously, I will waive consideration of the bill by the 
     Budget Committee. By agreeing to waive its consideration of 
     the bill, the Budget Committee does not waive its 
     jurisdiction over H.R. 3210. In addition, the Committee on 
     the Budget reserves its authority to seek conferees on any 
     provisions of the bill that are within its jurisdiction 
     during any House-Senate conference that may be convened on 
     this legislation. I ask your commitment to support any 
     request by the Committee on the Budget for conferees on H.R. 
     3210 or related legislation.
       I request that you include this letter and your response as 
     part of your committee's report on the bill. Thank you for 
     your assistance in this matter.
           Sincerely,
                                                       Jim Nussle,
     Chairman.
                                  ____

                                         House of Representatives,


                              Committee on Financial Services,

                                Washington, DC, November 26, 2001.
     Hon. Jim Nussle,
     Chairman, Committee on the Budget, Cannon House Office 
         Building, Washington, DC.
       Dear Chairman Nussle: Thank you for your letter regarding 
     your Committee's jurisdictional interest in H.R. 3210, the 
     Terrorism Risk Protection Act.
       I acknowledge your committee's jurisdictional interest in 
     the provisions addressing the budgetary treatment of certain 
     spending under the bill and appreciate your cooperation in 
     moving the bill to the House floor expeditiously. I agree 
     that your decision to forego further action on the bill will 
     not prejudice the Committee on the Budget with respect to its 
     jurisdictional prerogatives on this or similar legislation 
     and will support your request for conferees on those 
     provisions. I will include a copy of your letter and this 
     response in the Committee's report on the bill and the 
     Congressional Record when the legislation is considered by 
     the House.
       Thank you again for your cooperation.
           Sincerely,
                                                 Michael G. Oxley,
                                                         Chairman.

  Mr. Speaker, I reserve the balance of my time.
  Mr. LaFALCE. Mr. Speaker, I yield myself 5 minutes.
  Mr. LaFALCE. Mr. Speaker, unfortunately the Republicans are snatching 
defeat from the jaws of victory. When we worked together, we produced a 
financial services modernization bill that had not been pulled off in 
60 years, but it took true bipartisanship. Just a short time ago, a 
month or so ago, we worked together in a bipartisan manner. With total 
bipartisanship, we passed major anti money-laundering legislation, and 
we stood together with President Bush at the White House signing when 
he signed and gave the gentleman from Ohio (Mr. Oxley) and myself pens, 
the pens he used to sign the PATRIOT bill. We could have done the same 
thing on terrorism insurance. I desperately wanted to. I tried to. We 
were rebuffed. They snatched defeat from the jaws of victory.
  Why so? If the Republicans are victorious today, it is going to be a 
Pyrrhic victory, but there were certain things that were more important 
than a good victory. What was more important? Well, they had to include 
extraneous material within the bill, either because they were told to, 
or because it is part of a theological belief. And what is that? That 
we must restrict victims' rights. Forget all lawyers. We are talking 
about victims.
  We are talking about the rights of victims to be able to obtain the 
redress that they have been able to pursue from 1776 to now, from the 
beginning of the Republic to the present. And those rights have evolved 
over 200-plus years in the several States where they have become the 
common law of the land, they have been codified in State law; and in 
one fell swoop we say, we eliminate all State causes of actions and 
there shall be one exclusive Federal cause of action, one exclusive 
Federal cause of action.
  Now, we will look to State law for a little bit of guidance, but 
certainly not on the issue of damages. On damages, we will eviscerate 
their rights for economic damages, we will eviscerate their rights for 
noneconomic damages, we will eviscerate their rights, we will prohibit 
their rights, for punitive damages.
  That is going to kill this bill, and that is going to greatly, 
greatly worsen our economy.
  Mr. Speaker, they could take one of two approaches. They could say, 
let us take the best bill we could fashion in a bipartisan manner that 
might pass muster with the Senate and negotiate differences, send it to 
the President, or they could say, oh, my gosh, we have a majority of 
one Democrat in the Senate; therefore, the only approach we can take is 
to come up with the worst possible bill imaginable, pass that, because 
that will increase our negotiating leverage with the Senate. The worse 
our bill, the better our negotiating stance. That is what they have 
done.
  This is not about passing a bill. They are not arguing the merits of 
this bill because they want to see it become the law of the land. They 
know it never will be. They just want to posture themselves, leverage, 
to get better leverage in negotiating with Senator Daschle, Senator 
Dodd, Senator Leahy, Senator Hollings, et cetera.
  In doing this, they are playing Russian roulette. Because what they 
are doing is they are permitting that Damoclean sword that is hanging 
over the economy, producing a chilling effect right now on the 
provision of credit to businessmen across America. They are permitting 
that Damoclean sword to fall come January 1, 2002. It is Russian 
roulette and it need not be.
  We could pass a bill; we could pass the substitute that would go to 
the Senate and, with minor changes, be signed by President Bush next 
week and eliminate that Damoclean sword that is hanging over the head 
of our economy.
  Mr. Speaker, our Nation is faced with numerous economic dislocations 
as a result of the September 11 attacks. A case in point is the 
legitimate concern that the reinsurance market for terrorism coverage 
is evaporating and will force primary insurers to increase prices or 
withdraw coverage. This is not an industry problem. If industry cannot 
reinsure the risk of further terrorist attacks, it will either not 
offer terrorism coverage or price it out of the reach of most 
consumers. The consequences of such action for our economy and for 
consumers would be devastating, particularly given our current 
recession.
  We must recognize that the crisis is only weeks away, as most 
policies are coming up for renewal on January 1, 2002. If businesses 
are forced to go without coverage, lenders will not lend because they 
require proof of insurance as part of the prudential credit decisions 
they make. Congress does not have the luxury of time to debate 
extraneous and controversial issues such as restrictions on victims' 
compensation while the health of our fragile economy hangs in the 
balance.
  Since the markup of H.R. 3210 last month, I have repeatedly expressed 
my willingness to work with Mr. Oxley and Mr. Baker on devising a plan 
that I could support. The goal was to create a short-term solution that 
will keep terrorism insurance coverage against any future attacks 
available and affordable, until Congress can revisit the issue. The 
approach Mr. Oxley devised was, in large part, reasonable and I could 
have supported it. However, because this bill is laden with extraneous 
provisions that limit victims rights and does not address some of the 
core issues that I believe are essential, I cannot embrace this 
legislation in its current form. It did not have to be this way.
  First, H.R. 3210 does not impose an industry deductible. Instead, it 
creates a program under which the Federal Government finances industry 
losses from the first dollar and calls for those funds to be recouped 
over time through industry assessments and policy surcharges. Second, 
the bill does not require, by its terms, that property and casualty 
coverage be part of commercial property and casualty coverage, as it 
normally is now. Third, it egregiously limits victims rights by 
eliminating punitive damages, limits noneconomic damages, caps 
attorneys fees and creates a Federal cause of action. These provisions 
are extraneous, represent a wish list for those who have long wished to 
restrict the rights of victims in our civil justice system, alienate 
most Democrats and many Republicans here and in the Senate, and, 
therefore, imperils this legislation's ultimate enactment.
  The advocates of radical tort reform in the White House and in the 
Republican leadership are using this terrorism risk bill to promote an 
aggressive antivictim agenda. Section 15 of the Armey bill, entitled 
``Litigation Management'' may constitute the most radical and one-sided 
liability limitations ever. Even worse, the provision bears little 
relationship to the issue of insurance and is not even limited to cases 
involving insurance coverage.
  The Republican bill diminishes the protections that Americans enjoy 
under state law by restricting the availability of noneconomic damages 
and by eliminating punitive damages. These limitations on damages apply 
not

[[Page 23351]]

only to insurance companies, but also to the wrongdoer, as well. 
Adoption of these provisions rewards wrongdoers at the expense of 
innocent victims of terrorist attacks. If an airport screening firm 
hires a known terrorist who allows a weapon to slip on board a plane, 
this bill would protect that company.
  Punitive damages are rare and only awarded in the most egregious 
cases where a defendant willfully or intentionally disregards the 
safety of the American public. The elimination of punitive damages 
takes away incentives for businesses to do everything they can 
reasonably do to protect the American public.
  Noneconomic damages are real damages. The loss of a limb, eyesight, 
constant pain and loss of a loved one are real life-altering events. 
Limiting their recovery harms the most severely injured victims and 
discriminates against children, the elderly, and homemakers, who do not 
receive much in the way of economic damages.
  The Republican bill tries to limit victims' access to the civil 
justice system by capping the fees available to pay the victims' 
attorneys and threatens their attorneys with criminal sanctions for 
violations of the cap. This particular provision reveals the real 
motives of the proponents because the provisions does not impose any 
cap on the fees paid to defendants.
  It bill takes away all judicial review relating to the issue of 
whether terrorism caused the injury, an unprecedented and very likely 
unconstitutional limitation on victim rights. It eliminates prejudgment 
interest, which takes away any incentive for negligent parties to reach 
settlements. It mandates collateral source, which forces victims to 
choose between seeking money from charities and pursuing a grossly 
negligent party in court, and permits wrongdoers to take advantage of 
life and health insurance policies purchased by the victim or the 
victim's employer.
  The Republicans claim that the provisions are needed to protect the 
taxpayers from paying for excessive damages through the reinsurance 
mechanism. But, under the Republican bill every penny of assistance is 
recouped through assessments on the industry. If they were really 
concerned with limiting taxpayer exposure rather an aggressive and 
radical tort reform agenda, why is there no limitation on property 
damages under the bill? Does making a family whole means less to my 
colleagues than making a corporation whole for the loss of a luxurious 
building?
  While I firmly believe these victim compensation restrictions have no 
place in this bill, we on our side sought to find some common ground on 
this tort reform issue, so we could report out a bill that is vitally 
important for the economic recovery of this Nation. We presented to the 
Rules Committee three amendments to modify the provision. But the 
Republican leadership was unwilling to give the House an opportunity to 
refine these provisions and reach a compromise on an issue that also 
has the Senate tied up in knots. Instead they insist on pursuing a 
radical, partisan agenda to limit the compensation needed to make the 
victims of terrorist attacks whole.
  Later in this debate, Ranking Member Kanjorski and I will offer a 
substitute which cures many of the defects of the Republican bill and 
presents this body with a clean piece of legislation that Members on 
both sides of the aisle can support.
  First, my bill would require a real up-front deductible. The 
insurance industry would pay the first $5 billion of insured losses in 
the first year, increasing to $10 billion in the second and third 
years. Individual company liability would be capped at 7 percent of 
premiums. The insurance industry has made clear that it can afford a 
deductible of this magnitude and they were prepared to embrace it when 
it was under consideration in the Senate. The administration, too, 
supports such a deductible. It is a sensible mechanism that protects 
taxpayers and imposes underwriting discipline. It is a necessary part 
of any legislation that we ultimately send to the President.
  At the same time, my bill maintains the sensible assessment 
provisions of the Oxley bill for losses in excess of the deductible, 
and imposes a discretionary surcharge on policyholders for losses above 
$20 billion. I believe these provisions fairly protect the American 
taxpayer while not overly burdening industry.
  Second, to prevent insurance companies from cherry-picking the safest 
properties and leaving sites which present greater risk uncovered, our 
substitute, unlike the Republican bill, would require that terrorism 
coverage be part of property and casualty coverage. This is essential 
to avoid a situation where insurers would only insure ``good risks'' 
and leave large portions of the economy uncovered. This provision would 
also eliminate any incentive for small businesses to opt out of 
insurance coverage.
  Finally, my bill does not limit victims rights by denying them the 
legal redress that they deserve.
  Although I cannot support the bill in its present form, I hope we can 
engage in a bipartisan, collaborative process going forward.
  Despite our present differences, I do see common ground and I do see 
how we could meld our approaches. But if we are to get there, it will 
take respectful bipartisan dialog, not the gratuitous and unnecessary 
pushing of ideological agendas. We have little time, and a serious 
responsibility which we must meet quickly to protect our economy.
  Mr. Speaker, I reserve the balance of my time.
  Mr. OXLEY. Mr. Speaker, I am pleased to yield 5 minutes to the 
gentleman from Louisiana (Mr. Baker), who has done extraordinary work 
in this regard.
  Mr. BAKER. Mr. Speaker, I thank the gentleman for his leadership and 
his courtesy.
  I think it appropriate at this point in our debate to talk simply 
about what is it that this bill does and on what issues are there 
agreement. It is very clear that through the extensive hearings and 
work of the committee that much agreement was reached. First, that if 
there is another unfortunate terrorist attack on this great Nation, 
that we should not let the secondary effect of that attack to bring 
terror to our national economy, and that we must respond quickly.
  Some have criticized, for example, the concept of first-dollar 
participation at the moment the event occurs. There are other views 
that we should wait until perhaps some $5 billion of damages have been 
paid out by the industry before getting government involvement. In 
other words, after the terrorist event has occurred, let us make sure 
the economy suffers for a while before we respond. This bill takes a 
different approach and says, we should get that assistance immediately, 
not 6 months, not 60 days, but immediately upon validation that there 
has been an event for which there have been losses that can be 
substantiated.
  Secondly, since we are providing this immediate assistance, there 
should be some guarantee that this is not viewed or, in practice, turns 
out to be a bailout of the insurance industry. So this bill provides 
for repayment. Yes, we have a crisis. Yes, there are people who are 
suffering. So we say, insurance company, go help the insureds. Make 
sure they get the funds necessary to repair those businesses, to get 
the economy going again, to make sure we do not have the unemployed or 
we do not have those who are without medical insurance because their 
company doors are closed. But when you are profitable and when you are 
making money, we expect you to give the taxpayers their money back. 
That is what this bill provides for. It is a new approach. We will 
help, but we expect you to be responsible when you are profitable.
  We give the Secretary of the Treasury large discretion in how to 
implement the requirements of this legislation. If we find ourselves in 
the very unfortunate event after a terrorist attack that our general 
economic condition is poor, the Secretary of the Treasury may use his 
judgment as to when and how to recoup repayment to the taxpayer. But 
there is a guarantee that there will be a repayment to the taxpayer.
  So first and foremost, there is bipartisan agreement that this 
legislation is not an industry bailout. It is necessary, an absolutely 
necessary step to maintenance of our economic survival.
  Secondly, it is not going to be a gift, that this money will not go 
out the door of the United States Treasury never to be seen again.
  Third, we act to help not only the big insurance companies; this 
proposal's effect is to help all insurance companies. It is true that 
the top 25 percent of all insurance companies out there write 94.6 
percent of all property and casualty premiums in this country. There 
are very large companies providing the bulk of coverage in this 
country, but there are an extraordinarily large number of very small 
corporations that could not withstand $5 billion industry-wide loss 
without going insolvent themselves. The bill provides immediate 
assistance for small companies. It provides immediate assistance for 
small businesses by

[[Page 23352]]

not requiring terrorism insurance to be part of the property and 
casualty coverage. Why is that important?
  Our bill provides that one can stipulate what the cost of the 
terrorism component is separate from the underlying property and 
casualty bill. So if one is a business owner today who wants to make 
sure his property and casualty insurance premiums have not been jacked 
through the ceiling by some irresponsible insurance executive, one can 
look at what they paid last year and look at what they are asking to be 
paid this year, and then out over to one column to the side will be a 
little line that says ``terrorism risk premium'' and you can identify 
it. If you happen to be in Wyoming or on the great Gulf Coast of 
Mississippi or somewhere where you make the judgment that you do not 
wish to pay that terrorism premium, you do not have to. We do not 
believe we should dictate to every business owner in America, you must 
buy terrorism insurance regardless of what the cost may be, or what the 
risk may be to you. So we provide market opportunity. You can buy the 
property and casualty, you can buy the terrorism component from company 
A, you can buy property and casualty from company B, and the terrorism 
component from company C. It is free market at its best. It is a 
responsible solution to the problems we face.
  Mr. Speaker, I urge the adoption of this proposal.

                              {time}  1315

  Mr. LaFALCE. Mr. Speaker, I yield 3 minutes to the gentleman from 
Pennsylvania (Mr. Kanjorski), the distinguished ranking member of the 
subcommittee with jurisdiction on this issue.
  Mr. KANJORSKI. Mr. Speaker, I thank the chairman for yielding time to 
me, and I will take a moment to congratulate the chairman of the 
committee, the gentleman from Ohio (Mr. Oxley), and the chairman of the 
subcommittee, the gentleman from Louisiana (Mr. Baker), for what I 
thought was a job well performed as far as moving a bill that could 
gain bipartisan support through the Committee on Financial Services.
  Unfortunately, with heavy heart, the product that we are about to 
vote on on the floor today does not meet the standard that it met as it 
came out of the Committee on Financial Services. It has had added to it 
something called tort revision, tort reform, some sort of change.
  To most people watching this debate today, they are going to say, 
what is all this thing about liability? We are in an emergency.
  What it means, to say it simply, is there is an attempt here today 
with these new additions to change the history of responding to 
liability claims and civil procedures to settle those claims, and 
change significantly the history of the United States for 200 years by 
passing this legislation.
  It is unnecessary. It is not only unnecessary, it is something the 
industry did not ask for. As a matter of fact, in discussions with the 
industry, they did not even ask for support down to dollar one lost 
from terrorist events. They had represented themselves that they were 
perfectly able to handle as much as a $10 billion terrorist attack on 
the United States without consequences.
  What they asked us to do in the interim of a 2- to 3-year period 
would be to provide a mechanism that if a terrorist attack of the 
magnitude of September 11 occurred, there would be a mechanism in place 
that they could move quickly to resolve the problem and put the money 
back into the marketplace.
  As a result of not having that mechanism, they are unable to sell 
policies now with terrorist insurance as part of the policy face and 
are asking the right to not write terrorism policy in this country. The 
reinsurance industry will not touch this until the experience table is 
established as to what rates they can set for terrorist insurance.
  So what did the Committee on Financial Services start with? What did 
the White House request? What did the industry request? That we put 
together a stopgap measure to allow normal commerce to go on in the 
United States and have terrorist protection insurance in place over the 
next 3- to 5-year period so we would not stultify or have a 
disadvantageous result to the economy as a whole. I call it an economic 
stabilization bill, that is all it is, to show that the United States 
government, at a time of extreme need and under dangerous 
circumstances, can put the taxpayers of the United States in a 
supportive situation to a free market institution, but not interfering 
with the free market, encouraging the free market to come back and 
handle the insurance as it has in the past and will in the future, but 
for a period of 1 to 3 or 5 years, that the United States Government is 
in there to create a position that would help the insurance industry, 
the real estate industry, the financial services industry, but most of 
all, the economy of the United States.
  That has not happened. The one major reason it has not happened, in 
spite of some of the changes, is the new additions on tort reform or 
tort revision are so onerous, so extreme, that we are asking the 
American people and this Congress to forget victims' rights, rights of 
plaintiffs, rights of complainants, and rights of injured people, and 
only taking care of the 25 largest companies in the United States who 
write 94 percent of the insurance.
  If I wanted to be a demagogue, I could easily say it is a bailout of 
the insurance industry. But in my heart and mind, I know it is not 
that; and it is not intended to be that. If we could have passed the 
underlying bill, we would have had a very strong, bipartisan support to 
do that; and it could not have been categorized as a bailout of the 
insurance industry.
  But it can clearly be labeled a locomotive for tort reform at the 
wrong time, at the wrong place, in the wrong bill.
  I urge my colleagues to vote down the existing bill, unfortunately, 
taking some time to come back and work out another bill so we can go to 
conference and pass this important legislation.
  Mr. OXLEY. Mr. Speaker, I am pleased to yield 2 minutes to the 
gentlewoman from New York (Mrs. Kelly).
  Mrs. KELLY. Mr. Speaker, I thank the gentleman from Ohio for yielding 
me the time.
  Mr. Speaker, I rise today in strong support of the Terrorism Risk 
Protection Act. This legislation is essential to not just the insurance 
industry, but to the entire economy.
  Businesses in America face a crisis this year, and they will face a 
crisis next year if we are unable to obtain commercial insurance 
coverage, which includes insurance against terrorism losses. Without 
this insurance coverage, businesses will be unable to obtain financing 
for new building projects, and an already weak economy will be served 
another harsh blow.
  With the cowardly acts of September 11, our insurance industry faces 
a new reality which must be addressed as soon as possible. This is a 
reality in which an act of terrorism is a risk which requires 
insurance, the cost of which is impossible to predict, and hence, 
impossible for an insurance company to price.
  Because of this, insurance companies are currently unable to offer 
coverage for impossible future terrorist acts. To prevent this crisis, 
TRPA would spread the risk for possible future acts out across the 
insurance industry, giving the industry time to develop their own 
mechanisms to cover risk for the future. TRPA is designed to provide 
only the necessary temporary stability to the insurance market and 
sunset shortly thereafter.
  Unlike like some of the solutions put forward, TRPA does not put 
taxpayers' money at risk. All loans made under the act must be repaid. 
In addition, the triggers in the bill are low enough to ensure that 
small insurance companies remain competitive.
  Finally, I want to assure my colleagues that the Committee on 
Financial Services' work on the issue only begins with this 
legislation. As the chairwoman of the oversight subcommittee, we will 
be vigorous in our follow-up on this crisis. We must ensure that we do 
all in our power to provide stability to the industry while we

[[Page 23353]]

give the private market time to innovate and quickly establish a new 
market to cover potential terrorism loss.
  TRPA is an excellent solution to this crisis and deserves our full 
support. I ask my colleagues on both sides of the aisle to join me in 
the strong support of this bill.
  Mr. Speaker, obviously, I am pleased that the Financial Services 
Committee and this House have acted expeditiously on the terrorism 
reinsurance crisis, and that this legislation is being considered 
today. Today in this chamber, we are appropriately engaging in a fierce 
debate over various aspects of how to make this legislation work for 
insurance consumers. We are debating federal backstops, mandates for 
coverage, tort reform, and all trying to do the best thing for the 
American economy--in the hope that this very complex and difficult 
issue can be resolved by the time Congress recesses for the year.
  But I would appreciate the opportunity, Mr. Speaker, to take just one 
step back from this debate, and remind us all again why we are here. 
One of the persons who would have been intimately involved in the 
creation of a federal terrorism reinsurance program was Charlie 
McCrann. Charlie was a senior vice president at Marsh and McLennan, the 
world's largest commercial insurance brokerage firm, and his 
responsibilities included advocacy at both the state and federal 
levels. Charlie was a pivotal player on many of the issues surrounding 
insurance regulation over the years--from the product liability crisis 
of the 1980s, to the Dingell insurance solvency legislation in the 
1990s, to our debates on agent/broker licensing reform as a part of 
Gramm-Leach-Bliley two years ago. As he spoke on behalf of the firm 
that sells more business insurance (and reinsurance) than any other 
firm in the world, this terrorism insurance coverage legislation would 
have been right down Charlie's alley. As always, he would have done 
everything in his power to make sure that we craft a bill that restores 
and calms the marketplace without overreaching.
  On September 11, Charlie had arrived early to his office on the 100th 
floor of 1 World Trade Center. Like 294 of his colleagues at Marsh, he 
perished.
  As a profile in the New York Times recently said of him, Charles 
Austin McCrann was a levelheaded, respected executive, devoted to his 
wife, Michelle, and children, Derek and Maxine. He was also a splendid 
attorney and representative of the insurance industry, through his 
earlier work at the New York Assembly's Insurance Committee, and at the 
law firm of LeBoeuf, Greene & McRae. At Marsh, where he served since 
1979, in addition to his advocacy, he was a regulatory compliance 
officer, and was responsible for interpreting industry regulations and 
providing guidance on these regulations to Marsh's brokers throughout 
the country. He represented the National Association of Insurance 
Brokers and its successor organization, the Council of Insurance Agents 
and Brokers, before the National Association of Insurance 
Commissioners.
  I could go on and on.
  As a subcommittee chair on the Financial Services Committee, I mourn 
the fact that Charlie is not in this chamber today witnessing our 
spirited debate and our actions designed to assist the commercial 
insurance marketplace. And I hope that as this legislation continues to 
move through the legislative process, we will be mindful of the 500 
employees of the world's two largest commercial insurance brokerages--
Marsh and Aon--who lost their lives on that horrible day.
  Mr. LaFALCE. Mr. Speaker, I yield 3 minutes to the gentlewoman from 
California (Ms. Waters), the distinguished ranking member of the 
subcommittee on Financial Institutions and Consumer Credit of the 
Committee on Financial Services.
  Ms. WATERS. Mr. Speaker, I serve on the Committee on the Judiciary 
and the Committee on Financial Services, both of which have worked very 
hard in a bipartisan manner to legislate cooperatively in the wake of 
the events of September 11.
  Last month, the Committee on the Judiciary reported out the PATRIOT 
Act, the antiterrorism bill. The committee product was a true 
bipartisan effort and was reported out unanimously. That product was 
then abandoned in the Committee on Rules for a partisan, inferior 
product.
  Similarly, this bill, H.R. 3210, the Terrorism Risk Protection Act, 
was reported out of the Committee on Financial Services by voice vote. 
The bill we are debating today is not the product of that committee's 
good work. It is, instead, a bill that does not contain a deductible 
for the insurance industry before government steps up to the plate; and 
even more disturbing, this necessary piece of legislation has become a 
vehicle for broad-based tort reform.
  The Armey substitute creates an exclusive Federal cause of action for 
lawsuits arising out of acts of terrorism, prohibits punitive damages, 
prohibits joint and several liability, limits attorney fees, and 
requires that any victim compensation shall be reduced by any amount 
the victim receives from other sources.
  These tort reform provisions are broad and far-reaching. These 
provisions are an appalling attempt by anti-consumer legislators to use 
this bill to further their own agenda by changing the laws on victim 
compensation. They would never get away with this under normal 
circumstances, but these are not normal circumstances.
  We have to respond quickly to the events of September 11, and we 
should do so in a bipartisan manner. I find it utterly shameful that 
certain Members see fit to exploit this terrible tragedy by using 
necessary legislation as a vehicle for special interest items.
  Unfortunately, this crass opportunism is becoming the hallmark of 
this House. So far, we have seen attempts to load up bills that respond 
to this tragedy with all sorts of tax breaks and Christmas presents for 
corporate America, while we still have not taken care of the 
unemployed.
  Mr. Speaker, this bill has been corrupted with these harsh 
limitations on victim compensation. These limitations are unrelated to 
the issue at hand and have no place in this bill. I urge my colleagues 
to oppose this legislation and support the LaFalce substitute, which 
contains no limitations on tort actions or recoveries.
  Mr. OXLEY. Mr. Speaker, I am pleased to yield 3 minutes to the 
gentlewoman from Illinois (Mrs. Biggert), a valued member of our 
committee.
  Mrs. BIGGERT. Mr. Speaker, I thank the chairman for yielding me the 
time.
  Mr. Speaker, the insured losses from September 11 attacks are 
expected to total more than $70 billion, the largest insured 
catastrophic loss in history. The good news is that the insurance 
industry is paying these claims and has stated that all claims will be 
paid expeditiously.
  The bad news is that the insurance industry cannot withstand multiple 
events of this magnitude without harming all consumers. This is 
uncharted territory, and it will take some time for an efficient market 
for terrorism insurance to develop. That is why passage of H.R. 3210 is 
so important at this critical time.
  For those who think that this bill applies only to the market for 
commercial insurance, they should think again. Right now there are more 
than 140 public self-insured risk pools operating in 41 States; and 
they, too, will be covered by this bill.
  What are public, self-insured risk pools? They are the entities that 
provide coverage for those most often at the greatest risk: our 
firefighters and police officers, our children in schools, teachers, 
city workers, and many others.
  In short, public self-insured risk pools provide an enormous cost 
saving to State and local taxpayers. When private insurance premiums 
are prohibitively expensive, these pools absorb the risk across their 
membership base. Failure to include public risk pools in this bill 
would have resulted in a dramatic increase in insurance premiums for 
those providing critical public service and, ultimately, for taxpayers.
  I appreciate the strong support this provision received in the 
committee, especially from the gentleman from Ohio (Chairman Oxley) and 
the subcommittee chairman, the gentleman from Louisiana (Mr. Baker). I 
look forward to working closely with them to see that this provision is 
retained in the conference.
  Finally, Mr. Speaker, I want to thank the leadership members of the 
Committee on Financial Services for including key litigation management 
provisions in this bill. Let us face it, there is no reasonable way for 
even the most responsible property owner or business to prepare for 
every conceivable attack by a terrorist. Yet under

[[Page 23354]]

current law, they would be on the hook for 100 percent of such damages, 
facing total financial ruin.
  This bill limits the potential liability by barring punitive damages 
and providing other protections if and when the Secretary of the 
Treasury determines that an act of terrorism has occurred.
  Mr. Speaker, H.R. 3210 is a responsible approach to a very difficult 
situation. By demanding that every tax dollar is repaid, we will 
provide a helping hand, not a handout, to the insurance industry.
  I urge my colleagues to support this legislation.
  Mr. LaFALCE. Mr. Speaker, I yield 2 minutes to the gentleman from 
North Carolina (Mr. Watt), a member of both the Committee on Financial 
Services and the Committee on the Judiciary.
  Mr. WATT of North Carolina. Mr. Speaker, several days after the 
events of September 11, some of my insurance company representatives 
who are based in my district approached me and described what would 
become a very, very serious problem.
  Essentially, they said that most of the reinsurance in this country, 
a lot of it is being done by off-shore reinsurers, and that those 
people were not going to reinsure against terrorism after the events of 
September 11.
  It became obvious that there was a serious problem that would need to 
be addressed, and I committed to work to try to address that problem, 
both in the Committee on Financial Services and in the Committee on the 
Judiciary, both of which I am a member of.
  We did that in the Committee on Financial Services. We reported out a 
bill that received virtual unanimous support. Unfortunately, just like 
the PATRIOT bill, the antiterrorism bill that the Committee on the 
Judiciary had reported out unanimously, the leadership got its hands on 
the product of our committee and rewrote the bill. They inserted 
provisions that had little, or nothing, I would submit, to do with the 
problem that the insurance companies had described to me in that 
initial meeting, the one dealing with reinsurance and the necessity for 
reinsurance.

                              {time}  1330

  This bill has been hijacked, unfortunately, the same way that the so-
called PATRIOT bill was hijacked by the leadership, and provisions have 
been placed in this bill which actually just make it unsupportable.
  We are going to have a serious problem if we do not get to a final 
product on this bill very soon. Insurance policies that are expiring 
and are having to be renewed will need terrorism coverage, and it is 
that kind of brinksmanship that I am concerned about; because as the 
ranking member has indicated, we have taken a situation which could 
have been resolved easily through bipartisan cooperation, that had been 
resolved through bipartisan cooperation on our Committee on Financial 
Services, and the leadership has decided that it would rather play 
political brinksmanship with this bill.
  If a product is not delivered that is satisfactory before the end of 
this year, I hope that the American people will hold the people who are 
responsible for this brinksmanship responsible for their conduct, and I 
encourage my colleagues to vote against this bill today.
  Mr. OXLEY. Mr. Speaker, I am pleased to yield 2 minutes to the 
gentlewoman from Connecticut (Mrs. Johnson).
  Mrs. JOHNSON of Connecticut. Mr. Speaker, I thank the gentleman from 
Ohio (Mr. Oxley) for his hard work and leadership on this difficult 
issue.
  Congress simply must act, before we adjourn, to avert an insurance 
coverage crisis caused by the increased risk of terrorism against the 
citizens and businesses of this country. I think that statement is 
absolutely true. I am proud of the insurance industry and the way it 
has stood up to what is going to be a $40 billion loss, but there is no 
question that they cannot do this again tomorrow.
  Furthermore, we in our Nation need to figure out how we are going to 
share this new risk, because if we do not, the cities of America are 
going to be the victims. It is not going to be Torrington, Connecticut. 
It is not going to be Rutland, Vermont. It is going to be New York, 
Chicago, San Francisco, Los Angeles, Houston. Who in their right mind 
is going to pay the high premiums that will be charged of those who 
locate in New York? Every one of the big cities will be seen as the 
likely target for the next terrorist act, and so the premiums for 
businesses in our cities are going to skyrocket if we do not legislate 
now, do it right and follow it through over the next few years.
  It is hard enough for the cities to attract businesses to them, 
because cities have so many burdens that often their taxes are high, 
their police problems are great, and so on and so forth. Now we are 
going to add to that the highest possible insurance premiums for those 
companies that are willing to headquarter in New York, Chicago, Los 
Angeles, and other big cities of America.
  We would not do it intentionally, but that is going to be the 
unintended consequence of not handling this issue correctly. It will be 
the cities that hurt; not the towns, not the little cities, not all of 
America. We will put a death knell over economic activity in the big 
cities of our country.
  So I urge support of this legislation.
  Mr. LaFALCE. Mr. Speaker, I yield 3 minutes to the gentlewoman from 
New York (Mrs. Maloney), a member of the committee.
  Mrs. MALONEY of New York. Mr. Speaker, I thank the gentleman from New 
York (Mr. LaFalce), the ranking member, for yielding me the time and 
for his leadership and hard work on this issue.
  Our work today is not bailout of the insurance industry. We are 
simply working to keep our economy on track with a short-term program 
that addresses the new terrorist threat.
  I believe the gentleman from New York's (Mr. LaFalce) bill recognizes 
the importance of this potential insurance crisis to our country and 
the time-sensitive nature of the problem. With 70 percent of 
reinsurance contracts expiring at the end of the year, we have a 
limited time to act before the end of the year.
  In the Committee on Financial Services, the gentleman from Ohio (Mr. 
Oxley), the gentleman from Louisiana (Mr. Baker), the gentleman from 
New York (Mr. LaFalce) and the gentleman from Pennsylvania (Mr. 
Kanjorski) understand the importance of this issue and they have worked 
tirelessly to move the process forward.
  I was particularly concerned with surcharges placed on future 
policyholders in the bill that the gentleman from Ohio (Mr. Oxley) and 
the gentleman from Louisiana (Mr. Baker) originally introduced. It is 
my belief that this language would have placed an undue burden on 
future policyholders just as they are trying to recover from the 
attack. Working together, we have reached a compromise on this issue, 
limiting future surcharges to 3 percent of premiums.
  While we have reached agreement on many issues, I believe the 
approach taken in the Democratic substitute is superior to the bill 
that is the underlying one today. The goal of any bill should be to 
restore the availability and affordability of property and casualty 
insurance. Limiting the rights of potential plaintiffs is a peripheral 
issue. We are dealing with a crisis, and partisan legal reform issues 
have no role in protecting the viability of insurance markets.
  We do not know where the next attack will be, but we can be pretty 
sure that right now terrorists are planning to strike again. Hopefully 
our increased security will thwart any attack, but now is not the time 
to prospectively limit the rights of individuals to make themselves 
whole if they are victims of a future attack.
  To quote a letter from the Consumer Union, ``Although individuals in 
businesses may be unable to prevent future terrorist attacks and are 
not directly responsible for those acts, they should be expected to 
take reasonable and measured actions to promote public safety.''
  I believe the legal limitations and the majority bill discourage such 
conduct. Furthermore, the LaFalce substitute is more taxpayer friendly 
by requiring the insurance industry to cover

[[Page 23355]]

a deductible of $5 billion in the first year and $10 billion in the 
second. This industry is capable of covering this deductible and does 
not oppose this provision.
  Every Member of this House owns an insurance policy and we all face 
deductibles. This bill to prevent an insurance crisis should not be any 
different.
  Mr. Speaker, I rise in strong support of the LaFalce substitute.
  Mr. Speaker, viewers of this debate should be clear.
  Our work today is not a bailout of the insurance industry--we are 
simply working to keep our economy on track with a short-term program 
that address the new terrorist threat.
  I believe Ranking Member LaFalce's bill recognizes the importance of 
this potential insurance crisis to our country and the time sensitive 
nature of the problem.
  With 70 percent of reinsurance contracts expiring at the end of the 
year we have a limited time to act before the end of the year and we 
have to get this right.
  In the Financial Services Committee Chairmen Oxley and Baker and 
Ranking Members LaFalce and Kanjorski understand the importance of this 
issue and have worked tirelessly to move the process forward.
  I was particularly concerned with surcharges placed on future policy 
holders in the bill that Mr. Oxley and Baker originally introduced.
  It is my belief that this language would have placed an undue burden 
on future policyholders just as they are trying to recover from an 
attack.
  Working together--we have reached a compromise on this issue--
limiting future surcharges to 3 percent of premiums.
  While we have reached agreement on many issues, I believe the 
approach taken in the Democratic Substitute is superior to the bill 
that we are considering today.
  The goal of any bill should be to restore the availability and 
affordability of property and casualty insurance.
  Limiting the rights of potential plaintiffs is a peripheral issue.
  We are dealing with a crisis and partisan legal reform issues have no 
role in protecting the viability of insurance markets.
  We do not know where the next attack will be but we can be pretty 
sure that right now terrorists are planning to strike again.
  Hopefully our increased security will thwart any attack--but now is 
not the time to prospectively limit the rights of individuals to make 
themselves whole if they are victims of a future attack.
  To quote a letter that Consumers Union which was sent to Members 
yesterday. ``Although individuals and businesses may be unable to 
prevent future terrorist attacks and are not directly responsible for 
those acts, they should be expected to take reasonable and measured 
actions to promote public safety.''
  I believe the legal limitations in the Majority bill discourages such 
conduct.
  Furthermore, the LaFalce substitute is more taxpayer friendly by 
requiring the insurance industry to cover a deductible of $5 billion in 
the first year and $10 billion in the second.
  This industry is capable of covering this deductible and does not 
oppose this provision.
  Every Member of this House owns an insurance policy and we all face 
deductibles. This bill to prevent an insurance crisis should not be any 
different.
  Unfortunately, I am fairly certain that businesses will pay billions 
more for insurance in New York in next year--even with Congressional 
intervention. As I have said, this increase could amount to a tax of 
billions of dollars on New York business.
  I urge my colleagues not to tie outside issues to this legislation. 
It is too important. Support the clean LaFalce substitute.
  Mr. OXLEY. Mr. Speaker, I yield 3 minutes to the gentleman from 
Connecticut (Mr. Shays), a very valuable member of our committee.
  Mr. SHAYS. Mr. Speaker, I thank the gentleman for yielding me time.
  Mr. Speaker, I rise in strong support of the Terrorism Risk 
Protection Act. This bill creates a temporary industry risk-spreading 
program to provide a financial backstop for insurers in the event of 
losses from future terrorist attacks. It is not a bailout, and 
taxpayers will recoup every penny of assistance insurance companies 
receive.
  It is critical for the Nation that terrorism insurance legislation be 
enacted before January 1. This legislation is particularly critical for 
insurance companies and financial services. The impact of not enacting 
this legislation will significantly damage these vital industries and 
will have dire consequences as well for the real estate, energy, 
construction and transportation industries.
  It is also clear our Nation's cities and metropolitan areas will be 
impacted the most for failing to act on this legislation. Time is 
quickly running out. The market for new commercial insurance contracts 
and renewals is already undergoing serious and potentially severe 
disruptions. Almost 70 percent of reinsurance policies expire on 
December 31, and virtually all reinsurers have said they will no longer 
provide terrorism insurance after that date.
  This will create a chain reaction that will affect our entire 
economy. Without insurance, lenders will not lend and investors will 
not invest. The economic effects of inaction simply cannot be 
overstated.
  To me, this is the true stimulus bill. We need to enact this bill. 
None of us can be sure when and where another terrorist act will occur, 
but it will occur. And we have the opportunity today to offer 
businesses, employers, and other economic activities across the country 
much needed protection.
  Mr. Speaker, I urge my colleagues to vote for this legislation and 
help avoid an otherwise inevitable market dislocation and subsequent 
economic crisis. We need to enact this bill. I thank my chairman, the 
gentleman from Ohio (Mr. Oxley) for acting so quickly to see that we 
will do that.
  Mr. LaFALCE. Mr. Speaker, I yield 3 minutes to the gentlewoman from 
California (Ms. Lee), a distinguished member of the Committee on 
Financial Services.
  Ms. LEE. Mr. Speaker, I want to thank the ranking member, the 
gentleman from New York (Mr. LaFalce) for yielding me time.
  Mr. Speaker, I am very disappointed in the process and also the 
content of this bill. Many important amendments, including those on 
tort reform and my consumer amendment on data disclosure, were not even 
allowed to be offered. At a time when thousands of men and women are 
losing their jobs and their health insurance, it is really a shame that 
we are again putting corporate interests before the interests of our 
workers.
  Unemployment and health insurance benefits for those people who have 
lost their jobs should be our first priority.
  On the content of this bill, the egregious tort reform provisions are 
reason enough to oppose it. Companies that do not take appropriate 
safety steps or do not act responsibly in the face of credible threats 
should not receive protection for their actions. If the owner of a 
building locks the emergency exit doors and a terrorist attack occurs 
there, that building owner must be held responsible for their negligent 
actions. This is just common sense. Under the Republican bill, they 
could not be held responsible. Under the LaFalce substitute they would.
  In terms of the process of this bill, I have tried to offer an 
amendment to require insurers to provide the same data, the same data, 
mind you, that banks currently provide on the race, ethnicity, gender 
and location of their policyholders to ensure that they are not 
discriminating against minority, women or low-income individuals. 
However, this very modest amendment was not even allowed by the 
Committee on Rules.
  If we are to give billions of dollars to the insurance industry, we 
should at least have basic data to know if they are using those Federal 
dollars to engage in discriminatory practices. This is only fair.
  It is time that this Congress really gets its priorities straight and 
supports the working men and women in our Nation. The tragic events of 
September 11 should not be used as an opportunity for corporate tax 
cuts and bailouts. Let us put first things first and make sure that our 
enhanced national security ensures economic security for those who so 
desperately need our assistance.
  Mr. OXLEY. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
Pennsylvania (Ms. Hart), a valuable member of our committee.
  Ms. HART. Mr. Speaker, I thank the chairman for yielding me time.
  Mr. Speaker, I serve both on the Committee on Financial Services and 
on the Committee on the Judiciary and have certainly, like many Members

[[Page 23356]]

who have spoken, spent some time on this issue and certainly understand 
the gravity of what we are doing here today, because in January, a 
little more than 30 days from now, 70 percent of the commercial 
insurance policies will be up for renewal.
  Not only has the Committee on Financial Services received quite a bit 
of testimony that without legislation, commercial insurers will be 
unwilling to provide significant terrorism coverage, newspapers have 
been full of stories about companies finding terrorism coverage 
impossible to buy.
  If businesses are unable to obtain insurance to cover their losses 
caused by future acts of terror, they will not only potentially be 
liable for significant damages any terrorist could cause, but they 
would also face significantly higher financing and other costs. This 
has the potential to wipe out any beneficial impact of an economic 
stimulus package that we hope will be passed and signed by the 
President.
  In order to attract capital, companies have to convince investors 
that their money will not be wiped out. We take steps through this 
legislation to make sure that that is the case. This is not a bailout. 
This is a backstop. This is legislation that will give confidence back 
in your economy, confidence to investors.
  It allows for exact pricing so that in the event of another terrorist 
attack, the government would not only collect the amount of money it 
needs in accordance with this law, it prevents the creation of another 
mammoth government agency. In other words, we help finance money 
temporarily.
  This is not giving money away. This is assistance to our economy. It 
is very important. Limiting the legal liability of these insurers by 
restricting punitive damages is a big part of it. It is very important. 
Terrorism is not the fault of insurers, it is the fault of the 
terrorists. It is important that we take into consideration the 
realities here.
  Mr. Speaker, I appreciate the support of my colleagues, both the 
gentleman from Ohio (Mr. Oxley) and the gentleman from Wisconsin (Mr. 
Sensenbrenner). I urge support of the bill as it is, H.R. 3210.

                              {time}  1345

  Mr. LaFALCE. Mr. Speaker, I yield 3 minutes to the gentleman from 
Washington (Mr. Inslee), a distinguished member of the committee.
  Mr. INSLEE. Mr. Speaker, I speak vigorously against this bill because 
it is radically callous toward reform provisions, and let me explain 
how radical they are.
  It seems to me that we have given a lot of at least lip service to 
the value of marriage on this floor in a lot of different debates, but 
look what this bill does. Take a situation where a wife lost her 
husband, firefighter in New York City. She has had the destruction of 
her relationship with her husband, she is a widow, and let us say this 
bill becomes law. If this bill becomes law, it says that the only value 
of that husband to that widow was the value of his paycheck.
  This bill would destroy the ability that is now the case in 50 States 
in this country that when a widow loses her husband she would be 
entitled under American law to noneconomic damages. That is a sound 
policy, because many of us believe that a husband has a value to a wife 
that is greater than his paycheck. But the Republican proposal here is 
based on the proposition that the only meaningful value of a husband to 
a wife is what he brings home at the end of the month, and that the 
value of the relationship between a husband and wife is zero under the 
Republican bill. That is wrong. That is wrong.
  The value of a relationship between a husband and wife is worthy of 
the respect of us individually and worthy of the respect of the 
American judicial system. This bill is wrong in eliminating that civil 
right. I think it is a sad day when terrorists get to destroy the civil 
right of an American to recognize the value of their spouse, which 
under the Republican bill my colleagues are doing. Frankly, I do not 
know if my colleagues intended to do it, but this bill accomplishes 
that end, and it is wrong.
  But there is a second reason I speak against this bill, Mr. Speaker. 
If we pass this bill, it will have been after we passed the airline 
bailout bill, or airline bill, whatever we want to call it, and did not 
give a dime to the workers, over 100,000 workers who have been laid 
off. Yet we now pass a bill to help the insurance industry, which I 
think is necessary, some bill, to help the insurance industry, but 
still without helping laid-off workers with a dime or a nickel.
  I now have in the Puget Sound, or will have, 30,000 laid-off workers 
from the Boeing company alone as a result of this terrorist activity. 
And what has the Congress done? Nothing. Why do the big dogs always eat 
first in Congress? It is time to take care of working people. Defeat 
this bill.
  Mr. OXLEY. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from 
New York (Mr. Grucci), another valuable member of our committee.
  Mr. GRUCCI. Mr. Speaker, I rise today to express my strong support 
for H.R. 3210, the Terrorist Risk Protection Act.
  First, I would like to thank the gentleman from Ohio (Mr. Oxley), the 
chairman of the Committee on Financial Services, and the gentleman from 
Louisiana (Mr. Baker), chairman of the Subcommittee on Capital Markets, 
Insurance and Government Sponsored Enterprises, the Republican 
leadership, and my colleagues on the Committee on Financial Services 
for their tireless efforts to negotiate a comprehensive package to 
prevent the disruption and destabilization of America's markets via the 
collapse of our insurance industry.
  The horrifying events of September 11 have touched each and 
everyone's lives in so many ways. Our Nation will never again be the 
same. These events have introduced new problems for industries and 
small businesses, because reinsurers have been telling primary insurers 
that they will exclude terrorist coverage from their policies. Now, 
without the ability to insure properties against future terrorist 
attacks, financial institutions will be unable to provide loans, New 
York will be unable to rebuild, and everyday business transactions will 
be disrupted. If we permit this to happen, we let the terrorists win.
  Time is running out. On December 31, 2001, 70 percent of these 
reinsurance policies will expire. New policies are currently being 
negotiated without these necessary legislative changes. We should have 
passed this critical legislation in time for these companies to provide 
45-day notices. Well, we missed that deadline; and now we have only 32 
calendar days, leaving us only 16 business days until the Christmas 
holiday. Speaking as a former small businessman, I can tell my 
colleagues that does not provide much time for effective business 
decision-making, particularly in light of our Nation's current economic 
conditions.
  H.R. 3210 creates a temporary industry risk-spreading program to 
ensure the continued availability of commercial property and casualty 
insurance and reinsurance for American consumers. The post-event 
assessment system provides an incentive to provide coverage, spreads 
out risk, prevents guessing at costs, and does not take money out of 
the economy. This requires that all of the Federal funds used to boost 
liquidity are paid back by the commercial industry/policyholders over 
time.
  This is sound, effective, and timely legislation; and I urge my 
colleagues to join me in supporting this critical measure and in 
supporting the economic stabilization of our country.
  Mr. LaFALCE. Mr. Speaker, I yield 5 minutes to the gentleman from 
North Dakota (Mr. Pomeroy), a former insurance commissioner for that 
great State.
  Mr. POMEROY. Mr. Speaker, I thank the gentleman for yielding me this 
time, and I commend him and the rest of the leadership of the 
committee, including Chairman Oxley, ranking member LaFalce, 
Subcommittee Chairman Baker, and ranking member Kanjorski for their 
really terrific work on this matter. This should be the finest hour for 
the Committee on Financial Services.

[[Page 23357]]

  We have an issue where there is broad bipartisan agreement. We need 
to act. We need to act now. Because without enactment before we go 
home, there will be significant capacity consequences in the 
availability of coverage for terrorism. The ripple effect of that 
through the economy will be significant. And that is why we have to 
act.
  Now, under these circumstances, committee leadership undertook this 
difficult assignment of creating some kind of public mechanism to wrap 
around the private insurance capacity to continue to insure this risk, 
a risk that has grown infinitely more grave and significant. Out of 
this long, rather intense legislative process came a bill that, after 
committee markup, passed by voice vote, virtually capturing all of the 
members of the committee.
  Now, it was recognized by committee leadership not to be the perfect 
bill, that more work would be required; but it was the legislative 
format for the congressional response that, I believe, would have 
provided direction to the Senate and would have been the principal way 
in the end we enact this legislation. Well, what happened? This work 
product was taken away from the committee. It was ripped up and 
rewritten. It was wrecked and brought forward.
  And the irony of ironies is that now the chairman of the Committee on 
Financial Services has to lead the debate for its enactment. I believe 
the committee leadership deserved better than this in light of the 
fair-minded effort they made to get a solution created.
  There are two reasons to oppose this bill: substance and process. And 
the argument as to substance, I believe, has been very well advanced by 
previous speakers; and I will not reiterate that part. But I do want to 
speak a bit on process.
  This is one of the most technically difficult assignments this body 
has undertaken, and to do it in a tight time frame makes it 
particularly difficult. There are lots of ways that have been advanced 
in terms of how we construct this assistance to keep terrorism coverage 
available. The administration took a whack at it. They had one 
approach. A bipartisan effort between Senator Dodd and Senator Gramm in 
the Senate took another approach. Chairman Baker worked with Chairman 
Oxley to construct an approach that, in the end, was quite a bit like 
the approach taken by ranking members LaFalce and Kanjorski.
  Out of all these approaches, none of them have the offending 
provisions slapped on in a kind of a haphazard, almost cavalier way by 
House majority leadership in bringing this form. What they have done is 
thrown a red herring into this whole debate as to how we construct the 
package.
  I believe passage of this bill does not advance completion of the 
terrorism insurance assignment; I think it makes it even more 
difficult. Because rather than focusing on the technically demanding 
issues before us, we are also going to be debating unrelated, 
ideological points of agenda that really have no place, especially when 
considering the dwindling hours we have to get this bill into place.
  I believe that, in the end, we have to act; but we can best act by 
rejecting the flawed proposal that has been put before us and going 
back to the committee, bring their bill forward to get this on the 
track that we need to go.
  Mr. OXLEY. Mr. Speaker, I yield 2 minutes to the gentleman from 
Virginia (Mr. Cantor), a new member of our committee.
  Mr. CANTOR. Mr. Speaker, I commend the gentleman from Ohio (Mr. 
Oxley), chairman of the full committee; the gentleman from Louisiana 
(Mr. Baker), chairman of the subcommittee; and the gentleman from New 
York (Mr. LaFalce), ranking minority member, for bringing this most 
critical, critical bill to the floor.
  As has been said before, on September 11, thousands of innocent 
Americans were killed in a savage terrorist attack that no one could 
ever have imagined. This catastrophe, though, also has left the 
American economy and American businesses with an insurance crisis. 
Seventy percent of insurance contracts in this country expire at year's 
end. As a small businessperson, I know that there are millions of 
individuals out there now receiving expiration notices not knowing what 
to do come year-end.
  If we look at it, if there is no insurance, business owners across 
America, both small and large, may all be in default of loan covenants 
which require collateral to be insured against terrorist strikes. 
Without this bill, there will be no such insurance.
  Some individuals may fear the worst and close or put a halt to 
expansion plans. We can forget about growth in our cities and towns. 
What bank will loan money to build a shopping center or an office 
building without insurance to protect their investments in such a 
project? And then where will the jobs be without those projects?
  H.R. 3210 addresses this impending crisis not by an industry bailout 
but by extending credit to cover claims associated with terrorist 
strikes akin to those on 9-11. Such loans will be repaid through 
industry assessments so that American taxpayers will remain whole. Mr. 
Speaker, I also commend both Chairman Oxley and Chairman Baker on the 
very innovative way that this bill tries to provide a resolution to 
this impending crisis. It does provide a fix.
  And I would say we ought to support this bill because of the 
substance. There are no mandates on terrorism coverage, so, therefore, 
if there is a small business owner, let us say in Orange, Virginia, who 
has a small ice cream shop and chooses not to pay for that particular 
coverage because of the cost, that business owner ought not be made to 
do so. Yet the bill also provides for protection against those who may 
seek compensation in lawsuits against a terrorist strike.
  Let us not put the bill on the American people; let us put the bill 
on the terrorists. It is the terrorists who were responsible for the 
strikes on 9-11 and will be responsible if it occurs in the future.
  Mr. Speaker, I urge passage of the bill.
  Mr. LaFALCE. Mr. Speaker, I yield 3 minutes to the gentleman from 
California (Mr. Sherman), a distinguished member of the Committee on 
Financial Services.
  Mr. SHERMAN. Mr. Speaker, I am sure you have visited Rayburn 2128, 
the room in which the Committee on Financial Services meets. It is a 
large and beautiful room, and I would propose that we make that room 
available to provide housing for the homeless. Because what went on in 
that room in crafting this bill has nothing to do with the bill that 
reaches the floor.

                              {time}  1400

  Mr. Speaker, if all of our financial services bills are to be written 
in the Committee on Rules on the third floor of this building, why must 
people sleep out in the cold when they could be provided housing in 
room 2128?
  In fact, we are presented this bill on very short notice, basically 
24 hours' notice, and it has so many changes from the bill that left 
our committee. One of the flaws in this bill is that it provides first 
dollar coverage with no deductible. What does this mean? It means that 
if there is a terrorist event that causes a billion dollars in damage, 
less one penny, comes within 1 cent of causing a billion dollars of 
damage, the Federal Government does nothing.
  But if instead the damage is a billion dollars, plus one penny, then 
the taxpayers come forward with $900 million. Never has 1 cent mattered 
so much, and that is clearly absurd.
  We need instead a bill that says that the first billion dollars is 
absorbed by the insurance and reinsurance industry, and only then 
should taxpayer dollars be involved. What, after all, is the insurance 
industry if it cannot absorb in total, with all of its companies and 
all of the reinsurance companies, a billion dollars in risk? If 
insurance companies cannot take the first billion of risk, then why do 
they exist? They are, after all, in the risk-sharing and risk-
absorption business.
  We need a bill. Many speakers who have come forward have explained 
why it is so important that we pass a bill so that those who own 
businesses are able to get terrorism insurance; or, rather, continue to 
get the kind of insurance

[[Page 23358]]

that they have now without an exception for terrorist damage. That is 
why it is so important that those who want a bill vote for the 
Democratic substitute, because that is a bill that could be passed by 
both Houses, that is a bill that could be signed into law before we 
adjourn. That is serious economic policy.
  Instead, we have a bill with loathsome, absurd, highly partisan, 
quote, tort-reform provisions; provisions which everyone knows cannot 
be passed on a bipartisan basis. I would point out that they deprive 
those that lose a child of any recourse at all, not one penny, to the 
parents who lose their child to terrorism.
  Mr. OXLEY. Mr. Speaker, I reserve the balance of my time.
  Mr. LaFALCE. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, this is important legislation. It is legislation that I 
want to see enacted into law before we adjourn this year. But the 
substance of the bill before us and the procedure that we have used to 
get here is atrocious. It is not necessary to take away victims' 
rights. This bill does that. It does it in a very heavy-handed manner.
  There ought to be a deductible. That is, the insurance industry 
should be paying the first dollar up to a certain amount and the 
Federal reimbursement payment should come in only after that. Their 
bill is grossly deficient in that respect.
  Mr. LaFALCE. Mr. Speaker, I yield back the balance of my time.
  Mr. OXLEY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, this legislation is absolutely necessary. That is why 
this committee is charged by the Speaker to produce a bill, and 
produced it in virtually record time. That is why during a day-long 
markup, it culminated in a voice vote for the legislation. And that is 
why, frankly, the substitute that is going to be offered by the 
gentleman from New York (Mr. LaFalce) contains 85-90 percent of the 
bill that came out of our committee.
  Let us understand that most of this debate today, at least on the 
other side, has been about legal reforms, liability reforms, and not 
about the specific areas that were negotiated and worked on and I think 
is an excellent work product; and, in fact, solves the problem that all 
of us want to solve, and that is the availability of insurance to make 
certain that our economy continues to move forward. That is what all of 
us have as a goal.
  As we pass this bill on to the other body, it is important that the 
House send a strong signal that we are prepared to meet that challenge. 
This legislation, this underlying legislation, is exactly what the 
patient needs to provide the kind of stability in the insurance market 
that all of us desire.
  Make no mistake about it, this Congress will pass this legislation, 
this type of legislation, before we return home. We have no other 
choice, it seems to me. If we do not, we face political peril, should 
the economy start to unravel, with the unavailability of credit in this 
dynamic marketplace.
  Mr. Speaker, my hat is off to all of those who participated in this 
great endeavor.
  Mr. PAUL. Mr. Speaker, no one doubts that the government has a role 
to play in compensating American citizens who are victimized by 
terrorist attacks. However, Congress should not lose sight of 
fundamental economic and constitutional principles when considering how 
best to provide the victims of terrorist attacks just compensation. I 
am afraid that H.R. 3210, the Terrorism Risk Protection Act, violates 
several of those principles and therefore passage of this bill is not 
in the best interests of the American people.
  Under H.R. 3210, taxpayers are responsible for paying 90 percent of 
the costs of a terrorist incident when the total cost of that incident 
exceeds a certain threshold. While insurance companies technically are 
responsible under the bill for paying back monies received from the 
Treasury, the administrator of this program may defer repayment of the 
majority of the subsidy in order to ``avoid the likely insolvency of 
the commercial insurer,'' or avoid ``unreasonable economic disruption 
and market instability.'' This language may cause administrators to 
defer indefinitely the repayment of the loans, thus causing taxpayers 
to permanently bear the loss. This scenario is especially likely when 
one considers that ``avoid . . . likely insolvency, unreasonable 
economic disruption, and market instability'' are highly subjective 
standards, and that any administrator who attempts to enforce a strict 
repayment schedule likely will come under heavy political pressure to 
be more ``flexible'' in collecting debts owed to the taxpayers.
  The drafters of H.R. 3210 claim that this creates a ``temporary'' 
government program. However, Mr. Speaker, what happens in three years 
if industry lobbyists come to Capitol Hill to explain that there is 
still a need for this program because of the continuing threat of 
terrorist attacks. Does anyone seriously believe that Congress will 
refuse to reauthorize this ``temporary'' insurance program or provide 
some other form of taxpayer help to the insurance industry? I would 
like to remind my colleagues that the federal budget is full of 
expenditures for long-lasting programs that were originally intended to 
be ``temporary.''
  H.R. 3210 compounds the danger to taxpayers because of what 
economists call the ``moral hazard'' problem. A moral hazard is created 
when individuals have the costs incurred from a risky action subsidized 
by a third party. In such a case individuals may engage in unnecessary 
risks or fail to take steps to minimize their risks. After all, if a 
third party will bear the costs of negative consequences of risky 
behavior, why should individuals invest their resources in avoiding or 
minimizing risk?
  While no one can plan for terrorist attacks, individuals and 
businesses can take steps to enhance security. For example, I think we 
would all agree that industrial plants in the United States enjoy 
reasonably good security. They are protected not by the local police, 
but by owners putting up barbed wire fences, hiring guards with guns, 
and requiring identification cards to enter. One reason private firms 
put these security measures in place is because insurance companies 
provide them with incentives, in the form of lower premiums, to adopt 
security measures. H.R. 3210 contains no incentives for this private 
activity. The bill does not even recognize the important role insurance 
plays in providing incentives to minimize risks. By removing an 
incentive for private parties to avoid or at least mitigate the damage 
from a future terrorist attack, the government inadvertently increases 
the damage that will be inflicted by future attacks.
  Instead of forcing taxpayers to subsidize the costs of terrorism 
insurance, Congress should consider creating a tax credit or deduction 
for premiums paid for terrorism insurance, as well as a deduction for 
claims and other costs borne by the insurance industry connected with 
offering terrorism insurance. A tax credit approach reduces 
government's control over the insurance market. Furthermore, since a 
tax credit approach encourages people to devote more of their own 
resources to terrorism insurance, the moral hazard problems associated 
with federally funded insurance is avoided.
  The version of H.R. 3210 passed by the Financial Services committee 
took a good first step in this direction by repealing the tax penalty 
which prevents insurance companies from properly reserving funds for 
human-created catastrophes. I am disappointed that this sensible 
provision was removed from the final bill. Instead, H.R. 3210 instructs 
the Treasury Department to study the benefits of allowing insurers to 
establish tax-free reserves to cover losses from terrorist events. The 
perceived need to study the wisdom of cutting taxes while expanding the 
Federal Government without hesitation demonstrates much that is wrong 
with Washington.
  In conclusion, Mr. Speaker, H.R. 3210 may reduce the risk to 
insurance companies from future losses, but it increases the costs 
incurred by American taxpayers. More significantly, by ignoring the 
moral hazard problem this bill may have the unintended consequence of 
increasing the losses suffered in any future terrorist attacks. 
Therefore, passage of this bill is not in the long-term interests of 
the American people.
  Mr. GILMAN. Mr. Speaker, I rise today in strong support of H.R. 3210, 
the Terrorism Risk Protection Act.
  This legislation addresses a critical need of the insurance industry, 
that has so far been overlooked by Congress in the wake of the events 
of September 11.
  It is a common practice for companies that serve as primary insurers 
in the property and casualty field to take out secondary policies with 
other companies in order to cover themselves against the possibility of 
having to make large payouts on future claims.
  In the wake of September 11, virtually all of the secondary insurers 
have announced that they will no longer cover acts of terrorism when 
the policies they have sold come up for renewal, effective January 1, 
2002. The insurance industry estimates that approximately 70 percent of 
the secondary policies will expire at the end of the current year.

[[Page 23359]]

  Unless Congress takes immediate action, primary insurers will not be 
able to offer coverage against terrorism in their property and casualty 
accounts. Under these circumstances any future successful terrorist 
attack would have a devastating impact on both the national economy and 
the local economy where the attack occurs.
  This legislation enlists the Federal Government to serve as a 
stabilizing force in the insurance market, as well as a safety net to 
cushion the economic effects of future acts of terrorism. Under this 
bill, insurers would help create a pool from which funds could be drawn 
to help meet future payout contingencies.
  In the case where an event causes payouts to exceed $100 million, the 
Federal Government would step in and assume 90 percent of the burden 
with the remaining 10 percent coming from the industry. A similar 
program would be put in place for large companies for an event that 
exceeds $20 billion in payout costs.
  Mr. Speaker, it is imperative that Congress address this immediate 
need to head off what would be a catastrophic blow to the insurance 
industry. American businesses need to be reassured that the insurance 
industry is both financially sound and able to meet their coverage 
obligations in the new terror-prone world, since September 11.
  Our country was in the midst of a recession when those barbaric acts 
of September 11 took place. We have all witnessed the resulting shock 
waves that were sent through the economy. Recent evidence suggests that 
we may finally be on the road to economic recovery. The resulting 
damage from a future act of terrorism against an uninsured business 
sector is too awful to contemplate.
  Fortunately, this scenario is easily preventable and we in Congress 
must take the necessary steps to ensure that this future does not come 
to pass. Our swift passage of H.R. 3210 will serve that purpose.
  I therefore strongly urge my colleagues to lend support to this vital 
measure.
  Mr. BEREUTER. Mr. Speaker, this Member rises today to express his 
support for H.R. 3210, the Terrorism Risk Protection Act. This 
legislation will help ensure that businesses are able to acquire 
property and casualty insurance while still providing full taxpayer 
protection against terrorist losses.
  This Member would like to thank the distinguished Chairman of the 
House Financial Services Committee from Ohio (Mr. Oxley) for both 
introducing this legislation and for his efforts in moving this 
legislation. Additional appreciation is expressed to the distinguished 
gentleman from Louisiana (Mr. Baker) who played a crucial role in 
drafting this legislation. On most crucial parts of this legislation 
there was bipartisan cooperation and assistance led by the ranking 
minority member of the Committee, the distinguished gentleman from New 
York (Mr. LaFalce).
  The uncertainty caused by the terrorist events on September 11 have 
resulted in our attention to the possibility of severe future problems 
for the insurance industry and the insured, even a crisis, from 
additional severe terrorist attacks. To illustrate this, reinsurance 
companies provide insurance against massive losses for insurance 
companies. Many commercial reinsurance policies need to be renewed by a 
December 31 deadline of this year. Since this terrorist attack, many 
primary insurance companies, because they cannot receive reinsurance, 
have sent notice cancellations to businesses indicating that they will 
not receive coverage for losses caused by terrorist activities. If both 
small and large businesses are unable to receive insurance coverage for 
acts of terrorism by the end of the year, it will contribute to the 
further instability of the American economy. Insurance provides a very 
important element of the stability needed by businesses to continue 
functioning and investing, and for bankers to continue lending to 
businesses.
  As a member of the House Financial Services Committee, which has 
jurisdiction over the important elements of the limited Federal role in 
commercial insurance, this Member supports this legislation for the 
following two reasons. First, obviously it helps ensure that commercial 
insurance continues to be available for businesses--and available at 
affordable costs. Second, it provides necessary taxpayer protections 
against possible severe terrorist losses to businesses.
  Under this legislation, Federal assistance will be provided to those 
commercial insurers which have suffered a significant terrorist loss 
over a specific dollar threshold. The Secretary of the Treasury will 
determine if there has been an industry-wide loss to the commercial 
property and casualty insurance industry exceeding $1 billion due to a 
terrorist act. In addition, the Secretary of the Treasury can also make 
a company-specific triggering determination if industry-wide losses 
exceed $100 million and the portion of those losses for the insurer 
exceed both 10 percent of the company's capital surplus and net 
premiums.
  If one of these thresholds is reached, the Federal Government will 
provide to each relevant insurance company 90 percent of the amount of 
insured terrorism losses minus $5 million. This Federal cost-sharing is 
capped at $100 billion.
  Unlike the different Senate approaches which are being proposed, the 
House legislation requires the Federal assistance to be paid back in 
full by the insurance companies who suffered the terrorist loss. Under 
H.R. 3210, the relevant insurance companies will be required to pay 
assessments back to the Federal Government for up to $20 billion of 
Federal assistance over a three year time period. Above this $20 
billion threshold, up to $100 billion, in order to recoup the level of 
Federal assistance, the Secretary of the Treasury will impose a 
commercial policyholder surcharge.
  Since the insurance companies are required to pay back the Federal 
Government for the exact level of Federal assistance through both 
assessments on the industry and/or commercial policyholder surcharges, 
this legislation ensures that taxpayers are not liable for the Federal 
cost-sharing. Therefore, this legislation is not an insurance company 
bailout; it protects the American taxpayer against a big hit while 
continuing to maintain insurability against terrorist attacks.
  This legislation also protects taxpayers from punitive damages 
against insurance companies for terrorist loses in Federal court. Since 
the Federal Government is providing assistance to insurance companies 
in cases of significant terrorist losses, punitive damages against 
insurance companies could result in taxpayer liability. This 
legislation does not limit a plaintiff's right to hold a primary 
tortfeasor liable for a terrorist act. For my Nebraska constituents, it 
is important to note that punitive damages are not allowed under 
Nebraska state law in Nebraska state courts.
  In conclusion, since this legislation balances the need of businesses 
to continue to receive commercial insurance against terrorist acts at 
affordable costs, with taxpayer liability protection, this Member urges 
his colleagues to support H.R. 3210.
  Ms. HARMAN. Mr. Speaker, I rise in reluctant opposition to the 
Terrorism Risk Protection Act.
  I do not disagree that the business of commercial insurance 
underwriting faces difficult times ahead as we confront the threat of 
terrorism against our homeland. But we have our priorities backward.
  Insurance underwriters are not the only ones facing difficult times. 
Since September 11, hundreds of thousands of workers have lost their 
jobs because of the attacks and subsequent accelerated economic 
slowdown. Indeed, I have met on several occasions with hundreds of 
workers in California's 36th District whose livelihoods and futures 
were suspended when they were laid off following the attacks.
  Many of these workers were directly employed in the aviation 
industry, which took a tremendous hit on September 11. Many thousands 
more were employed at Los Angeles International Airport and in the 
associated hospitality industry, which relies on business travelers and 
tourists. Hundreds more were affected as the consequences of September 
11 rippled through the local economy.
  Mr. Speaker, these individuals and their families are my top 
priorities. Last month I introduced legislation to give first 
preference to qualified laid-off aviation workers for the new airport 
security positions created by the Aviation Security Act. Regrettably, 
that bill languishes in the Transportation and Infrastructure 
Committee, though 44 of my colleagues recently joined me in writing 
Transportation Secretary Norm Mineta requesting that he incorporate 
this initiative in the regulations he issues to implement the new 
Airline Security Act.
  Aiding unemployed workers can no longer take a back seat. Indeed, the 
House is still waiting for the Speaker of the House to fulfill the 
promise he made at the time of the Airline Bailout Bill to bring to the 
floor legislation providing relief to these individuals.
  Until Congress and the Administration act to aid these unemployed 
workers, I cannot in good conscience support a bill that addresses one 
more industry, however meritorious their claim.
  Ms. SCHAKOWSKY. Mr. Speaker, I rise today in strong opposition to 
H.R. 3210, the Terrorism Risk Protection Act, and in support of the 
LaFalce substitute to that bill.
  Once again, the House is being asked to consider legislation that 
purports to address a legitimate public need but which is cloaked in 
special interest giveaways that do harm to the public interest.

[[Page 23360]]

  First, we acted to provide a $15 billion airline bailout that did 
nothing to help laid-off airline workers, improve safety or even 
guarantee that funds would be reinvested in improving American 
airlines. Airline workers are still waiting for unemployment insurance 
compensation and health care benefits. The need to help airlines and 
their employees after the tragedies of September 11 was legitimate, but 
the legislation we passed was a special interest giveaway that failed 
to meet that need.
  Second, we passed a so-called economic stimulus bill that will do 
little to stimulate the economy but instead includes tax breaks for the 
wealthy and for giant corporations, including refunds for taxes paid 
back to 1986 and incentives to invest overseas. And, again, the needs 
of laid-off workers and their families are ignored. We need to enact 
economic recovery measures, but the House-passed bill is largely a 
package of long-demanded tax breaks that will bring little, if any, 
benefit to the vast majority of American families and small businesses.
  Today, we are being asked to pass the legislation that not only 
provides an unwarranted bailout to the insurance industry but actually 
takes away consumer protections by making it extremely difficult for 
those injured to seek full compensation. Again, there is a legitimate 
concern. Although no one denies that the insurance industry has 
sufficient revenues to meet its current obligations, there is a need to 
address the decision of reinsurance companies to stop providing 
terrorism risk coverage in the future. This problem would seem to 
demand a narrow, well-considered approach. But this vehicle has served 
as a magnet for companies that are trying to avoid responsibility by 
limiting their payout liabilities and by preventing injured consumers 
from getting their fair day in court.
  As the Washington Post reported today, ``The insurance industry's 
lobbying campaign for federal help covering future terrorism claims was 
in full swing last month when a group representing Lloyd's of London 
investors published a newsletter highlighting the `historic 
opportunity' for insurers to make money after the September 11 
attacks.'' This is not the history that we want to write here today.
  In the event of future terrorist attacks, H.R. 3210 requires that 
U.S. taxpayers pay for 90 percent of all claims, including first dollar 
losses. It is simply outrageous that, as unemployed workers and their 
families are waiting for federal assistance, our first priority should 
be to bail out an insurance industry that is sitting on major reserves. 
The LaFalce substitute, unlike the underlying bill, would require that 
the industry pay a deductible of at least $5 to $10 billion annually. 
The LaFalce substitute not only protects U.S. taxpayers, it ensures 
that insurance companies will still have incentives to press their 
policyholders to act to improve safety and security. That is why groups 
like Consumer Federation of America, the National Taxpayers Union, and 
Consumers Union oppose H.R. 3210 and support the LaFalce substitute.
  Even more disturbing to me than the size of the potential bailout in 
H.R. 3210 is the assault on the rights of victims. There is no 
justification for taking away the rights of injured consumers or their 
families to seek redress through our civil justice system. There is no 
justification for immunizing companies from dangerous behavior. Yet, 
H.R. 3210 would do just that.
  H.R. 3210 would prevent future juries from awarding punitive damages. 
These damages are extremely rare and used only where injuries are 
caused by recklessly dangerous and irresponsible conduct. Under H.R. 
3210, a security firm that hires felons, a building owner who refuses 
to put in fire escapes, a construction firm that doesn't meet building 
codes, or a company that fails to provide escape procedures for persons 
with disabilities would be immunized from punitive damages.
  H.R. 3210 also limits a jury's or judge's discretion to award non-
economic damages. If we agree to this provision, we are saying that the 
loss of a child or husband and the inability to walk or have children 
are injuries that are not worthy of full compensation.
  Finally, H.R. 3210 provides a one-sided and unfair limitation on 
victims by limiting attorney's fees. Defendants would, of course, be 
free to pay their attorneys whatever they wish. But plaintiffs, who 
usually rely on a contingency fee system because they lack the funds to 
pay up front lawyers' fees, are hampered. As a result, victims may find 
it difficult to find qualified attorneys to take what may be 
complicated and costly cases to prepare.
  Unlike H.R. 3210, the LaFalce substitute leaves our civil justice 
system intact. It does not assault the rights of victims. And it leaves 
in place the potential for damages that will encourage firms to be as 
careful as possible in improving security and contingency plans.
  We pray that we will not suffer from future terrorist attacks. But, 
as we mourn the victims of September 11, we must not take away the 
rights of any future victims or their families. Nor should we reduce 
the incentives on the insurance industry and other companies to do 
everything possible to prevent terrorist attacks or prepare safety 
measures in case they occur. By limiting insurance industry liability, 
shielding wrongdoers from liability, and reducing the ability of 
victims to recover for their losses, H.R. 3210 would do far more harm 
than good. It should be defeated.
  Mr. CHAMBLISS. Mr. Speaker, I support H.R. 3210, the Terrorism Risk 
Protection Act. We worked hard to make sure that the taxpayers' money 
is protected and that we have taken care of the victims of terrorism.
  The Terrorism Risk Protection Act is essential to America's economic 
security. Right now, we have a problem: small insurers can be 
overwhelmed by the cost of a terrorist attack; a major of insurance 
contracts will expire at the end of the year, destabilizing our economy 
if nothing is done; and currently, insurers have no incentive to 
``write in'' terrorism coverage in their policies.
  As Members of both parties have repeatedly pointed out, this bill 
protects every sector of the economy--every noninsurance worker and 
employer--by providing a temporary legislative backstop that will make 
it possible for American companies to gain the insurance they need to 
continue operating in the post-September 11 environment where threats 
of terrorism still exist.
  The Terrorism Risk Protection Act is a very pro-taxpayer, pro-
consumer proposal, which provides significant benefits to both 
commercial industry and policyholders, while requiring relatively 
little regulation.
  By passing the Terrorism Risk Protection Act, today we greatly 
increase the capacity of insurers to offer terrorism coverage; we 
protect small and large policyholders insurers, while retaining 
incentives for risk management and efficient claims processing.
  However, I do have reservations on expanding the scope of the 
punitive damages ban beyond simply the use of government funds by 
attaching tort reform language to this legislation. Instead of limiting 
punitive damages we should ensure that the wrongdoer bear the financial 
burden, not an insurance company or the taxpayer. I am concerned that 
the inclusion of punitive damage language would limit victims' rights 
by protecting companies that fail to implement appropriate safety 
measures or do not act responsibly in the face of credible threats. My 
preference would have been to pass a bill without attaching the tort 
reform measure.
  We have worked hard over the past few days and weeks to avoid the 
possibility of any economic disruption that could result from a lack of 
available, affordable terrorism insurance. Today, I am proud to say 
that we have worked to help provide commercial insurance for terrorism 
and strengthen our economy by passing the Terrorism Risk Protection 
Act.
  Mr. MENENDEZ. Mr. Speaker, we could have and should have a much 
stronger bill on the floor, both to protect our economy, and to protect 
the victims of terrorist attacks.
  Given the extraordinary circumstances, it is reasonable to provide a 
Federal ``backstop'' to the insurance industry for terrorist attacks. 
Developers, builders, and the people they employ need to know that 
insurance is available--otherwise, important projects may come to a 
halt, American commerce will be hurt, and jobs will be lost. The 
problem is while the Republican bill provides a guarantee to the 
insurance industry, it does not in turn require that the industry 
provides the insurance when it is needed; the Democratic substitute 
does.
  We also need to make sure that in the event of an attack, victims can 
go after any negligent parties. But the Republican bill severely limits 
victims' rights--even in cases where the negligence was willful. That 
is not, in my view, a defensible position.
  Finally, while we are undertaking this important effort, we should 
also be doing much more for the many American workers who have already 
lost their jobs.
  I support guaranteeing insurance against terrorism is readily 
available.
  I support full victims' rights.
  And it is because of my belief in those principles that I must oppose 
final passage, with the hope and trust that these deficiencies can be 
fixed in conference.
  Mr. MALONEY of Connecticut. Mr. Speaker, I want to urge my colleagues 
to support final passage of this important legislation. I want to thank 
Ranking Member LaFalce and Congressman Kanjorski for all their hard 
work in bringing an economically vital issue to the top of Congress' 
agenda.
  Finding a solution to the impending insurance crisis is vital to our 
long-term economic security. Unfortunately, the events of September 11 
have made a substantial impact on

[[Page 23361]]

the marketplace and we now face contracting insurance and reinsurance 
markets. This tightening could have a devastating effect on the 
economy, particularly with regard to real estate markets, small 
business lending, and urban development activities. Without insurance, 
banks will not lend money to developers, businesses will be unable to 
get financing for new projects, and credit will be scarce as investors 
will be unwilling to take on the additional risk of not having 
insurance. Providing a Federal backstop is critical to guaranteeing 
that insurance remains available.
  Unfortunately, the bill before us today contains some very troubling 
provisions that would weaken our legal system of mutual responsibility. 
I want to make it clear that I will continue working to remove these 
overly broad and extreme provisions from this legislation. However, as 
insurance is the linchpin of our Nation's economic stability, we must 
act on this important issue. Our economy depends on it.
  I look forward to working with my colleagues through conference as 
this bill moves forward. I am committed to developing a final 
legislative product that will provide our economy with the stability 
that insurance guarantees, without weakening our legal system of mutual 
responsibility.
  Mr. BLUMENAUER. Mr. Speaker, I rise in opposition to this bill. I 
commend the Financial Services Committee on their hard work to reach a 
compromise on this important issue. To maintain stability within the 
insurance industry and the economy as a whole, it is essential that the 
Federal Government provide a backstop for losses due to potential acts 
of terrorism. It is too bad the Republican leadership and their Rules 
Committee are undercutting this work.
  I will not vote for a bill in which the democratic process has once 
again been subverted in favor of a partisan maneuver. It risks 
needlessly delaying important relief that we could approve and have on 
the President's desk in a matter of hours. In fact, this is a 
continuation of a pattern that's moving beyond partisanship to a point 
where it is reckless. These bills have been twisted beyond recognition 
of any solution reached by the original bill. First it was the Airline 
Bailout, then the PATRIOT Act which passed out of the Judiciary 
Committee unanimously only to be substituted with a Republican 
alternative. The pattern continued with the Economic Stimulus package 
and the Airline Security bill. It is unconscionable that the Republican 
leadership continue to act in such a partisan manner to delay this 
legislation when it is critical that Congress act quickly and in a 
united fashion to stabilize our insurance industry and assure help to 
those in dire need.
  H.R. 3210, as amended in the Rules Committee, attempts to force 
adoption of extraordinarily controversial changes in legal procedures 
that have nothing to do with preserving a market for terrorism 
insurance coverage. The end result is that the rights of victims and 
their families to recover fair compensation would be greatly limited in 
any future terrorist related incidents.
  For instance, the bill seeks to ban punitive damages, which would 
shield all defendants, not just insurers, even those who had been 
criminally negligent. As an example, this bill would protect a building 
owner from paying punitive damages who, despite numerous citations and 
warnings, refused to install emergency lighting and escape routes in 
his building. Residents and families of residents injured or killed 
during a terrorist attack as a result of the owner's disregard for 
State or local safety codes should be allowed to pursue their claims to 
the full extent of the law. The bill also limits the ability of victims 
to receive awards for noneconomic damages. These issues have no place 
in this urgent terrorism insurance bill. Because the Republican 
leadership will not allow a vote on a clean bill, I have no choice but 
to vote no. I will not support the continued actions of the Republican 
leadership to undercut the committee process that is essential to 
effective solutions.
  Mr. BAKER. Mr. Speaker, as chairman of the House Subcommittee on 
Capital Markets, Insurance, and Government-Sponsored Enterprises, I 
rise in strong support of the bipartisan Terrorism Risk Protection Act. 
I also wish to thank Financial Services committee Chairman Oxley for 
his leadership on this issue and to recognize the efforts of committee 
and subcommittee Ranking Members LaFalce and Kanjorksi.
  While economic uncertainty can lead to stock market volatility and 
wide fluctuations in value--a phenomenon we are now witnessing daily--
uncertainty in the operation of a business can be downright halting or 
fatal. This is why insurance plays such a vital role in our economy, 
providing security in calamity and the promise of liquidity necessary 
for the smooth functioning of the wheels of commerce.
  Fortunately, property-and-casualty insurers were able to cover 
obligations for the estimated $40 billion in damages related to 
September 11. But that may not be the case should any subsequent and 
comparably costly events take place. Worse still, the availability and 
affordability of terrorism insurance itself will become increasingly 
less likely. The primary cause for the terrorism coverage crunch is the 
fact that reinsurance companies, which back up the insurers by helping 
them spread risk, say they will not renew terrorism-related coverage by 
December 31, when some 70 percent of policies expire.
  Insurers and reinsurers cannot underwrite infinite risks with finite 
capital. Without the ability to spread risk through reinsurers, 
insurance companies face constraints against covering businesses 
against acts of terrorism. Here's the result, as one magazine recently 
put it: ``With no coverage, lenders won't lend, builders won't build, 
and business will grind to a halt.''
  With an already weakened economy, many in Congress understand that, 
like it or not, the Federal Government must take action quickly to 
avert such a systemic catastrophe. But there have been differences over 
the scope and form of this government intervention in the marketplace, 
and, it now appears, over just how urgently action is needed.
  The Financial Services Committee overwhelmingly passed the House's 
legislative response, H.R. 3210. Today I come before you to impress 
upon you the need for passage of this important bill and why, on three 
points in particular, it will be important for us to maintain the 
integrity of the bill.
  Time is of the essence. Commercial property and casualty insurance is 
usually written on a 1- or 2-year basis, with approximately 70 percent 
of reinsurance contracts up for renewal on January 1, 2002. The 
potential unavailability of terrorism risk coverage for businesses 
comes at precisely the time of greatest demand for the insurance. 
Moreover, insurance coverage is almost universally a requirement of any 
commercial lending contract. Lenders will simply not provide financing 
for new or existing construction without certainty that the properties 
and businesses that they are funding have adequate insurance to protect 
the lenders' investment. Thus, the lack of available insurance for 
terrorism risk has adverse consequences that would spread throughout 
the entire economy and stifle its growth. There is a high probability 
that the economy as a whole would suffer tremendously without 
meaningful and affordable terrorism coverage.
  To say that these policies expire on December 31 is not to say that 
we, as policymakers, have until that time to take decisive action. In 
fact, in many cases we have already crossed the threshold into that 
time when businesses begin their search and make their arrangements to 
secure coverage for next year. Even under normal circumstances this 
process, in itself, takes time, typically a month or even more. We have 
worked closely with the Financial Services Committee Democrats to 
address many of their concerns regarding the insurance mechanism 
established by the bill. Furthermore, we have cooperated with the other 
committees of jurisdiction, specifically, the Judiciary and Ways and 
Means Committees to ensure that this legislation represents the best 
efforts of this body as a whole. I believe that the Armey bill 
introduced today reflects this bipartisan achievement.
  Unfortunately, the other Chamber of Congress has not even begun 
serious consideration of this issue. Already, with each passing day of 
congressional inactivity in providing assistance for the affordability 
and availability of terrorism insurance, we run the risk of being held 
accountable, and deservedly so, for fiddling while Rome burned.
  We must limit government exposure to actual losses and provide timely 
and efficient adjudication of claims. Acts of terrorism give rise to 
very unique sets of facts and a complexity of interested parties that 
is uncommon in tort law. It is essential that the administration of the 
program established by this legislation is performed in a consistent 
and timely manner. Additionally, the exposure of the Federal Government 
as an insurer for anything other than actual losses should be avoided.
  To these ends this bill creates an exclusive Federal cause of action 
and limits the venues in which claims can be brought. We do not want to 
see a situation like the 1993 World Trade Center bombing where cases 
are just now going to trial.
  H.R. 3210 also prohibits claims for punitive damages arising out of 
terrorist acts and does not allow joint and several liability for 
noneconomic damages caused by terrorist acts.
  The sovereign immunity provisions of this bill will help ensure the 
fair and prompt distribution of the enormous public and private

[[Page 23362]]

resources that would be needed to respond to terrorist acts of any 
magnitude.
  We must maintain provisions of repayment of taxpayer dollars. Unlike 
all other proposals, H.R. 3210 protects taxpayers, requiring insurers, 
when they're again able to stand on their own two feet, to pay back 
over time whatever taxpayer dollars they received during their short-
term time of need. Without this I personally don't see how any proposal 
could be called anything but a bailout--an open checkbook, drawn out of 
taxpayer pockets.
  Paying back government assistance is neither a liberal nor a 
conservative concept. Or more precisely, it's both liberal and 
conservative, because it values common sense and, above all, our common 
concerns of fairness for both consumers and taxpayers--two groups 
rarely, if ever, afforded the opportunity to skip out on their bills. 
Not surprisingly, both the Consumer Federation of America and the 
Citizens Against Government Waste, two prominent grass-roots advocacy 
groups, have come out in support of the ``loan-based'' over the 
``giveaway'' approach to the insurance industry.
  Changes in the Tax Code are our only mechanism to provide an exit 
strategy for taxpayers. Again, unlike other proposals, our bill points 
toward how--not just when--the Federal Government can end its market 
intervention. It includes a study of tax-free reserving of insurance 
funds for terrorism risk to assist the private market that, at the end 
of the day, will be made healthier, stronger, and more independent than 
it was when we began.
  The reason we're in this bind to begin with, remember, is that 
reinsurance companies, mostly located offshore in Europe, will no 
longer make their pool of resources available for backing terrorism 
insurers. In the long run, the strongest answer to the reinsurance 
vacuum, and the surest way to avoid having the government serving that 
function indefinitely, is to take away the barriers that keep American 
insurers from filling it themselves. We can accomplish this quite 
easily by simply deferring taxation on reserves that insurance 
companies can set aside and build up exclusively for protection against 
future terrorist attacks.
  Hardly a ``tax break'' for insurance companies, which wouldn't be 
able to use the money for any other purpose, it would serve as a 
catalyst and incentive for an industry to end its own dependence on 
government. What we certainly don't need is a situation in which 
taxpayers unendingly subsidize an industry while it continues posting 
very healthy profits.
  And, if we have a plan that provides market stability without simply 
giving away the taxpayers' money--one that temporarily backs insurers 
without indefinitely bailing them out--what else, really, do we need?
  Mr. KNOLLENBERG. Mr. Speaker, I would like to commend Chairman Oxley 
and Subcommittee Chairman Richard Baker for their hard work on this 
legislation.
  As a former insurance agent and counselor, I understand the 
challenges the insurance industry faces after the tragic events of 
September 11. I believe this bill moves us in the right direction to 
reach a solution before the end of the year when most of the current 
policies expire.
  Let's be clear--we are not bailing out the insurance industry. But we 
must be equally clear that, without action, companies and individuals 
will face skyrocketing premiums or have to buy policies that do not 
cover terrorist events. No action risks further harm to our economy.
  This bill provides a federal risk-sharing loan program to ensure the 
liquidity to the industry. The federal government will pay 90 percent 
of insurance claims once triggered by a terrorist event costing over 
$100 million. However, it also provides flexibility to help smaller 
companies who take a significant loss but do not reach that trigger 
amount. These loans will be repaid over time by the industry, providing 
assistance but not a bailout. The loan program sunsets after 1 year so 
that Congress can revisit any unforeseen consequences of this bill and 
make further changes.
  I think this bill is a good starting point, and we must get started. 
I urge my colleagues to pass this legislation and settle our 
differences with the Senate in Conference quickly so we can get 
something to the President before the end of the year.
  Mr. ENGEL. Mr. Speaker, I rise today in support of the effort to 
provide the insurance industry a helping hand in the aftermath of the 
September 11th attacks. The insurance industry estimates that it will 
have approximately $60 billion in claims as a direct result of these 
events. And though the industry has the available capital to cover 
these claims now, payment on future claims are in grave doubt. In fact, 
many insurance companies are considering dropping this product 
altogether. The damage to our Nation's economy if that were to happen 
would be grievous. Construction companies and building owners would not 
be able to get adequate insurance, which in turn would prevent them 
from being able to get access to bonds to build and renovate their 
structures.
  Yet, what does the Majority bring to the floor today? Is it a bill 
that helps the insurance industry? Somewhat. What else does it do? The 
Republican majority is using this as a vehicle to advance one of its 
long held goals--tort reform. But, instead of having a full and just 
debate on tort reform, they are slipping provisions into a necessary 
and important bill.
  And what do they do with these provisions? They once again tell the 
American people that the majority party believes people with lots of 
money are more important that the average American. This bill prevents 
non-economic damages from being awarded. If someone loses a spouse in a 
terrorist attack, all one can expect is remuneration for lost wages. 
But what about the other losses--such as companionship, emotional 
support, and parenting? Sorry, the majority says, you are out of luck 
there.
  The insurance industry came to Congress with a sensible idea. It 
asked us to adopt a system similar to that of Britain by creating a 
terrorism reinsurance pool under which insurers voluntarily buy 
reinsurance coverage from the government, with pooled premiums being 
used to cover terrorism claims. Sounds pretty sensible to me. Instead, 
this bill creates a loan program--which might help, but certainly isn't 
the easiest or cleanest solution. If we can provide millions each year 
for the National Flood Insurance program, why can't we do the same for 
a terrorism reinsurance program.
  Finally, my colleagues, I would like to take this opportunity to 
mention one thing that has come to my attention regarding the clean up 
of ground zero. The construction companies doing the clean up and 
removal presently have no indemnity for their work. In fact, they are 
still working without a written contract. Their workers are being 
exposed to an extremely hazardous working environment. If we are to 
provide liability protections to the airline industry and the building 
owners, I urge my colleagues to move immediately to provide indemnity 
protections to the construction companies. If we don't, these companies 
are in danger of financial ruin and future incidents of terrorism will 
have a very different response from such companies.
  So, my colleagues, let's get serious about solving these problems. 
Vote no on this bill and support real reinsurance reform.
  Mrs. CHRISTENSEN. Mr. Speaker, I rise in support of the beleaguered 
workers of this country who have been doubly affected by both the 
recession that the experts now say that we have been in since last 
spring and the ripple effects of September 11.
  According to the Department of Labor, 415,000 Americans lost their 
jobs in the month of October. Eight hundred people in my very small 
district of the U.S. Virgin Islands have lost their jobs in our tourism 
dependent district--an increase of over 150 percent over last year. 
Travel agents, airline workers, taxi drivers, chefs and hotel service 
employees will now face the holidays without jobs, without health and 
other benefits in an economy that will be slow to absorb them any where 
else.
  Mr. Speaker, we were right to provide relief for the airlines, but we 
will be remiss if we do not see the individual lives that are affected 
by the loss of jobs in the downturn of our once thriving economy. It is 
also right that we provide assistance to the insurance industry in the 
wake of the September 11th attack. I oppose the Republican Leadership 
terrorism insurance relief bill, though because it added unnecessary 
and unrelated provisions to advance their partisan agenda on tort 
reform. I support the LaFalce Democratic substitute, which avoids 
dramatic premium increases for businesses and consumers but also 
insures that industry assumes their appropriate financial 
responsibility.
  Mr. Speaker, let's do right by the working men and women of our 
country. Let's provide relief that will help them weather this storm 
until our economy rebounds.
  Mr. SCOTT. Mr. Speaker, I rise in opposition to H.R. 3210.
  H.R. 3210, in its present form, contains a litany of tort reform 
provisions that are necessary to achieve the basic purpose of this 
bill. This bill began as a bipartisan effort to provide a mechanism for 
addressing the insurance risk in connection with terrorist acts, but 
has ended up as yet another vehicle to enact a one-sided, tort reform 
agenda, which has failed every time it has been subjected to the 
regular, deliberative legislative process.
  Under this bill, all victims of a future terrorist act will be 
required to bring their action in federal court. Once the Secretary of 
the Treasury makes a determination that a ``terrorist act'' occurred, 
then all claims with any relation to that terrorist act must be brought 
in federal

[[Page 23363]]

court. There would be no opportunity for a victim to choose to bring an 
action in state court, even though the state court may otherwise have 
jurisdiction over the matter and even though the state court may be 
more convenient or more efficient. This process will cause unnecessary 
complications related to the statute of limitations, if suit is filed 
in the wrong court, and will present unnecessary questions related to 
what ``related to terrorism'' means in those cases in which terrorism 
might have a vague connection to the cause of action. For example, are 
cases involving failure to perform in a contract dispute ``related to 
terrorism'' if the airline disruption after September 11 is alleged to 
be a factor? And if a questionable ``related to terrorism'' defense is 
offered, must the case be remanded to federal court?
  Worse, this bill contains radical liability limitations that are not 
even limited to cases involving insurance coverage and includes other 
provisions that bear little relationship to the issue of insurance. For 
example, future victims of terrorism would be precluded from collecting 
punitive damages--even in cases where it can be shown that the most 
outrageous acts of gross negligence or intentional misconduct 
contributed to the act of terrorism.
  This bill would also severely limit the ability of the victims of 
terrorism to collect non-economic damages. Non-economic damages include 
physical impairment, disfigurement and mental anguish, and these will 
be denied, whether insurance is available or not.
  Further, this bill puts extreme and unprecedented limits on 
plaintiff's attorney's fees. In the bill which purports to assist 
insurance companies, it is important to note that insurance companies 
do not pay plaintiff's attorney's fees; those fees are paid by the 
plaintiff out of the recovery. Therefore, the amount the insurance 
company pays is not effected by the size of the attorney's fee. The 
only effect this provision might have on the insurance company is to 
deny some plaintiffs the ability to hire an attorney to bring a 
meritorious claim. Only meritorious claims will be effected, because 
most attorneys get nothing, if there is no recovery. It is also 
important to note that the bill does not limit defense attorney's 
fees--which the insurance companies do pay.
  There is no good reason for including these extreme tort reform 
provisions that will limit the rights of victims in a bill which is 
supposed to be designed to address the capacity of insurers to provide 
coverage for risks from terrorism. I therefore urge my colleagues to 
vote against H.R. 3210 in its current form.
  Mr. BENTSEN. Mr. Speaker, regrettably I rise today in opposition to 
H.R. 3210, the Terrorism Risk Protection Act. I am very concerned about 
tort provisions that were added to the bill by the House Rules 
Committee. As an original cosponsor of H.R. 3210, I am disappointed 
that the House Rules Committee acted to rewrite this bill.
  I strongly believe that we must act to ensure that terrorism 
insurance is available for our nation's property owners. Without such 
coverage, we endanger our nation's economy. With the current recession 
which we are experiencing, I do not believe that we should jeopardize 
our economy. Today, many property owners are receiving property 
insurance renewal notices which specifically exclude terrorism 
coverage. For many property owners, failure to purchase terrorism 
insurance may jeopardize their credit and result in devastating actions 
by their creditors.
  I am disappointed that the underlying bill includes tort reform 
provisions which are fatally flawed. As a sponsor of an amendment to 
the liability provisions in this bill, I am concerned that the new 
liability provisions will hurt victims of terrorism and are not 
necessary for this bill. The underlying bill was introduced at the last 
minute with many onerous provisions which are not reasonable and fair. 
First, the liability section will preclude spouses of victims from 
seeking non-economic damages when a spouse is lost to a terrorism 
attack. I do not believe that the House of Representatives should be 
limiting spouses of victims to collect only lost wages and no other 
reparations. This is an unprecedented effort to cause economic 
hardships for victims of terrorism.
  I am disappointed that the House of Representatives will have to vote 
today on the underlying bill which has been rewritten since it was 
reported from the House Financial Services Committee. As a senior 
member of the House Financial Services Committee, I offered a 
critically important amendment to the liability section of this bill. 
The Bentsen amendment would have protected the taxpayers by ensuring 
that the government nor the insurance policy could be held liable for 
either punitive damages or non-economic damages related to this 
coverage. I believe it is proper to provide this protection for the 
taxpayers. In order to protect consumers, my amendment ensures that 
consumers can seek both punitive and non-economic damages from parties 
who have committed a gross negligent act related to terrorist attacks. 
I believe that the Bentsen amendment is fair and reasonable. For 
example, an airline security firm should be responsible for its 
employees who allow a terrorist to knowingly pass through a security 
check. I also want to highlight that my amendment on tort reform was 
approved on a bipartisan basis and represented the consensus of our 
committee on this issue. I am disappointed that the House Rules 
Committee acted to eviscerate my language.
  I also want to express my support for the underlying loan structure 
in the underlying bill. In fact, as an original cosponsor of H.R. 3210, 
I cosponsored this bill in part because of the loan structure included 
in it. I also strongly supported efforts to keep this program as a 
temporary program. During consideration of this bill, I offered an 
amendment that requires that this program can only be renewed on a 
yearly basis. In addition, my amendment requires the Administration to 
provide a report to Congress detailing why this program has been 
renewed. I believe that these accountability provisions are necessary 
to ensure that this program is established for a short time period. I 
believe that the reinsurance market for terrorism coverage will recover 
and we should act prudently.
  Ms. ROYBAL-ALLARD. Mr. Speaker, I rise in opposition to H.R. 3210, 
the Terrorism Risk Protection Act.
  It is true that certain key industries, including insurance 
companies, have been negatively impacted by the tragic events of 
September 11 and legitimately deserve assistance from the American 
public.
  While the bill before us today provides some genuinely needed relief 
for the insurance industry, unfortunately it fails in other important 
ways.
  First, instead of keeping the bill focused on providing a federal 
``safety net'' for insurance companies in the wake of the September 
11th attacks, the Republican leadership has included provisions that 
limit the rights of victims to pursue legal action as a result of any 
future terrorist attacks. These last-minute tort reform provisions 
include a complete ban on punitive damages, limits on non-economic 
damages, and caps on attorney's fees. These restrictions are not only 
unwarranted and unrelated to this bill, but they will severely limit 
the ability of victims to obtain any reimbursement they are due as a 
result of negligence. These provisions were not included in the bi-
partisan bill approved by the Financial Services Committee and are 
completely unnecessary and unrelated to the insurance relief provided 
by the bill.
  Next, I believe that in granting government assistance to any sector, 
Congress must take positive steps to ensure that these companies follow 
responsible and fair business practices by providing affordable, 
quality services to the American taxpayer.
  In the case of the insurance industry, companies have a 
responsibility to make insurance coverage available at affordable rates 
to those who need it. History indicates that it is common for insurers 
to increase the cost of policies after major catastrophes, whether 
these are weather-related, riot-related or other events. Therefore it 
is conceivable that insurers may use the tragic events of September 11 
to raise rates, withdraw from some markets, and try to shift risk onto 
the government.
  As data from the California Department of Insurance shows, lack of 
affordable insurance is a serious problem for many communities, 
especially low and moderate-income communities and communities of 
color, such as in my Los Angeles-based Congressional District. When 
uninsured or under-insured buildings suffer damage in these 
communities, oftentimes they are not repaired or replaced. As a result, 
the property owner suffer financial losses and the community is exposed 
to social and economic instability. Homeowners, renters and business 
owners are all at risk.
  Since the taxpayers are assuming the risk to prop up the insurance 
industry, Congress must put into place protections to insure that 
Americans have access to affordable, high quality insurance coverage 
for their homes and businesses.
  Establishing requirements for insurance companies to publicly report 
the availability and affordability of their policies is a key component 
of these protections. Such public disclosure will inform Congress and 
the American people about the fairness of various insurance policies.
  In addition, the insurance industry should be required to invest in 
low-income neighborhoods and minority communities. Because of the 
Community Reinvestment Act, banks have been required to invest in low-
income neighborhoods and have found significantly financial 
opportunities in these communities. Investments such as these are 
particularly critical to struggling communities in the current 
difficult

[[Page 23364]]

economically times. However, as the data from the California Department 
of Insurance and the California Reinvestment Committee shows, insurers 
have essentially balked at making significant contributions and 
investments in these communities. I am submitting this data for 
inclusion in the Record.
  Mr. Speaker, as I have stated, the bill before us is fatally flawed. 
It insures that the insurance industry is protected while leaving too 
many Americans with little or no assurance of either affordable, 
quality insurance coverage or corporate investment in their 
communities.
  I urge my colleagues to reject this flawed bill and pass a measure 
that insures protection for the American public not just the insurance 
industry.

     California Reinvestment Committee--Insurance Investment Issues

       In 1999, Californians paid $81 billion in insurance 
     premiums. Of those premiums, $36 billion were for property 
     and casualty insurance coverage.
       According to the 1998 California Insurance Commissioner's 
     Report on Underserved Communities, only 6.43 percent of 1997 
     California property and casualty insurance policies were in 
     the 138 underserved zip codes identified by the Department 
     which represent 15 percent of the state's population. (This 
     is the most recent report available.)
       In 2000, the California Organized Investment Network 
     (COIN), an investment unit of the California Department of 
     Insurance designed by insurers, had only $108 million in 
     investments, which represent 0.13 percent of 1999 insurance 
     premiums paid by Californians.
       In 2000, COIN had less than $5 million in insurance 
     investments, which represent 0.01 percent of California 
     insurance premiums.
  Mr. OXLEY. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Nethercutt). All time for general debate 
on the bill has expired.


     Amendment in the Nature of a Substitute Offered by Mr. LaFalce

  Mr. LaFALCE. Mr. Chairman, I offer an amendment in the nature of a 
substitute.
  The CHAIRMAN. The Clerk will designate the amendment in the nature of 
a substitute.
  The text of the amendment in the nature of a substitute is as 
follows:

       Amendment in the nature of a substitute offered by Mr. 
     LaFalce:
       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Terrorism 
     Risk Protection Act''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title and table of contents.
Sec. 2. Congressional findings.
Sec. 3. Authority of Secretary of the Treasury.
Sec. 4. Submission of premium information to Secretary.
Sec. 5. Initial and subsequent triggering determinations.
Sec. 6. Federal cost-sharing for commercial insurers.
Sec. 7. Assessments.
Sec. 8. Terrorism loss repayment surcharge.
Sec. 9. Administration of assessments and surcharges.
Sec. 10. Application to self-insurance arrangements and offshore 
              insurers and reinsurers.
Sec. 11. Requirement to provide terrorism coverage.
Sec. 12. State preemption.
Sec. 13. Consistent State guidelines for coverage for acts of 
              terrorism.
Sec. 14. Consultation with State insurance regulators and NAIC.
Sec. 15. Study of potential effects of terrorism on life insurance 
              industry.
Sec. 16. Railroad and trucking insurance study.
Sec. 17. Study of reinsurance pool system for future acts of terrorism.
Sec. 18. Definitions.
Sec. 19. Covered period and extension of program.
Sec. 20. Regulations.

     SEC. 2. CONGRESSIONAL FINDINGS.

       The Congress finds that--
       (1) the terrorist attacks on the World Trade Center and the 
     Pentagon of September 11, 2001, resulted in a large number of 
     deaths and injuries, the destruction and damage to buildings, 
     and interruption of business operations;
       (2) the attacks have inflicted possibly the largest losses 
     ever incurred by insurers and reinsurers in a single day;
       (3) while the insurance and reinsurance industries have 
     committed to pay the losses arising from the September 11 
     attacks, the resulting disruption has created widespread 
     market uncertainties with regard to the risk of losses 
     arising from possible future terrorist attacks;
       (4) such uncertainty threatens the continued availability 
     of United States commercial property and casualty insurance 
     for terrorism risk at meaningful coverage levels;
       (5) the unavailability of affordable commercial property 
     and casualty insurance for terrorist acts threatens the 
     growth and stability of the United States economy, including 
     impeding the ability of financial services providers to 
     finance commercial property acquisitions and new 
     construction;
       (6) in the past, the private insurance and reinsurance 
     markets have shown a remarkable resiliency in adapting to 
     changed circumstances;
       (7) given time, the private markets will diversify and 
     develop risk spreading mechanisms to increase capacity and 
     guard against possible future losses incurred by terrorist 
     attacks;
       (8) it is necessary to create a temporary industry risk 
     sharing program to ensure the continued availability of 
     commercial property and casualty insurance and reinsurance 
     for terrorism-related risks;
       (9) such action is necessary to limit immediate market 
     disruptions, encourage economic stabilization, and facilitate 
     a transition to a viable market for private terrorism risk 
     insurance; and
       (10) terrorism insurance plays an important role in the 
     efficient functioning of the economy and the financing of 
     commercial property acquisitions and new construction and, 
     therefore, the Congress intends to continue to monitor, 
     review, and evaluate the private terrorism insurance and 
     reinsurance marketplace to determine whether additional 
     action is necessary to maintain the long-term stability of 
     the real estate and capital markets.

     SEC. 3. AUTHORITY OF SECRETARY OF THE TREASURY.

       The Secretary of the Treasury shall be responsible for 
     carrying out a program for financial assistance for 
     commercial property and casualty insurers, as provided in 
     this Act.

     SEC. 4. SUBMISSION OF PREMIUM INFORMATION TO SECRETARY.

       To the extent such information is not otherwise available 
     to the Secretary, the Secretary may require each insurer to 
     submit, to the Secretary or to the NAIC, a statement 
     specifying the net premium amount of coverage written by such 
     insurer under each line of commercial property and casualty 
     insurance sold by such insurer during such periods as the 
     Secretary may provide.

     SEC. 5. INITIAL AND SUBSEQUENT TRIGGERING DETERMINATIONS.

       (a) In General.--For purposes of this Act, a ``triggering 
     determination'' is a determination by the Secretary that--
       (1) an act of terrorism has occurred during the covered 
     period; and
       (2) the industry-wide losses resulting from such occurrence 
     or from multiple occurrences of acts of terrorism all 
     occurring during the covered period, exceed $100,000,000.
       (b) Determinations Regarding Occurrences.--The Secretary, 
     after consultation with the Attorney General of the United 
     States and the Secretary of State, shall have the sole 
     authority which may not be delegated or designated to any 
     other officer, employee, or position, for determining 
     whether--
       (1) an occurrence was caused by an act of terrorism; and
       (2) an act of terrorism occurred during the covered period.

     SEC. 6. FEDERAL COST-SHARING FOR COMMERCIAL INSURERS.

       (a) In General.--Pursuant to a triggering determination, 
     the Secretary shall provide financial assistance to 
     commercial insurers in accordance with this section to the 
     extent provided under this section to cover eligible insured 
     losses resulting from acts of terrorism, which shall be 
     repaid in accordance with subsection (g).
       (b) Industry Obligation Amount.--For purposes of this 
     section, the industry obligation amount in connection with a 
     triggering determination is the following amount:
       (1) Initial covered period.--In the case of a triggering 
     determination occurring during the covered period specified 
     in section 19(a), the difference between--
       (A) $5,000,000,000; and
       (B) the aggregate amount of industry-wide losses resulting 
     from the triggering events involved in any triggering 
     determinations preceding such triggering determination.
       (2) Extended covered period.--If the Secretary exercises 
     the authority under section 19(b) to extend the covered 
     period, in the case of a triggering determination occurring 
     during the portion of the covered period consisting of such 
     extension, the difference between--
       (A) $10,000,000,000; and
       (B) the aggregate amount of industry-wide losses resulting 
     from the triggering events involved in any triggering 
     determinations preceding such triggering determination.
       (c) Eligible Insured Losses.--For purposes of this section, 
     the term ``eligible insured losses'' means, with respect to a 
     triggering determination, any insured losses resulting from 
     the triggering event involved that are in excess of the 
     industry obligation amount for such triggering determination.
       (d) Amount of Financial Assistance.--Subject to subsection 
     (e), with respect to a triggering determination, financial 
     assistance shall be made available under this section to each 
     commercial insurer in an

[[Page 23365]]

     amount equal to 90 percent of the amount of the eligible 
     insured losses of the insurer as a result of the triggering 
     event involved.
       (e) Limitations.--
       (1) Aggregate limitation.--The aggregate amount of 
     financial assistance provided pursuant to this section may 
     not exceed $100,000,000,000.
       (2) Notice to congress.--The Secretary shall notify the 
     Congress if the amount of financial assistance provided 
     pursuant to this section reaches $100,000,000,000 and the 
     Congress shall determine the procedures for, and the source 
     of, any additional payments of financial assistance to cover 
     such additional insured losses.
       (3) Default on assessments and surcharges.--The Secretary 
     may establish such limitations as may be necessary to ensure 
     that payments under this section in connection with a 
     triggering determination are made only to commercial insurers 
     that are not in default of any obligation under this section 
     or section 7 to pay assessments or under section 8 to collect 
     surcharges.
       (f) Annual Limit on Individual Insurer Liability.--
       (1) Definitions.--For purposes of this subsection, the 
     following definitions shall apply:
       (A) Annual insurer limit.--The term ``annual insurer 
     limit'' means, with respect to a commercial insurer and a 
     program year, the amount equal to 7 percent of the aggregate 
     premium amount of all commercial property and casualty 
     insurance coverage, written by such insurer during the 
     calendar year preceding such program year, under all lines of 
     commercial property and casualty insurance.
       (B) Limitable losses.--The term ``limitable losses'' means, 
     for any program year, the industry-wide losses in such 
     program year that do not exceed the dollar amount specified 
     in subsection (b)(1)(A) or (b)(2)(A), as applicable to the 
     program year.
       (C) Program year.--The term ``program year'' means the 
     period beginning on the date of the enactment of this Act and 
     ending on January 1, 2003. If the Secretary extends the 
     covered period pursuant to section 20(b), each calendar year 
     (or portion thereof) covered by such extension shall be a 
     program year for purposes of this subsection.
       (2) Triggering of industry assessments.--If, for any 
     program year, the amount of the limitable losses for such 
     program year that are incurred by any single commercial 
     insurer exceed the annual insurer limit for the commercial 
     insurer for such program year, the Secretary shall apportion 
     the amount of such excess limitable losses pursuant to 
     assessments under paragraph (3).
       (3) Industry assessments to cover losses exceeding loss 
     limit.--For each program year, the Secretary shall, as soon 
     as practicable, determine the aggregate amount of excess 
     limitable losses described in paragraph (2), for all 
     commercial insurers. Subject to paragraph (4), the Secretary 
     shall assess, to each commercial insurer not described in 
     paragraph (2), a portion of such aggregate limitable losses 
     based on the proportion, written by each such commercial 
     insurer, of the aggregate written premium for the calendar 
     year preceding such program year.
       (4) Operation of annual insurer limit to assessments.--The 
     sum of the amount of limitable losses incurred by a 
     commercial insurer in a program year and the aggregate amount 
     of an assessment under this subsection to such insurer may 
     not in any case exceed the annual insurer limit for the 
     insurer.
       (5) Notice.--Upon determining the amount of the assessments 
     under this subsection for a program year, the Secretary 
     shall, as soon as practicable, provide written notice to each 
     commercial insurer that is subject to an assessment of the 
     amount of the assessment and the deadline pursuant to 
     paragraph (6) for payment of the assessment.
       (6) Payment.--Each commercial insurer that is subject to an 
     assessment under this subsection shall pay to the Secretary 
     the amount of the assessment not later than 60 days after the 
     Secretary provides notice of the assessment under paragraph 
     (5).
       (7) Distribution of assessment amounts.--Upon receiving 
     payment of assessments under this subsection, the Secretary 
     shall promptly distribute all such amounts among commercial 
     insurers described in paragraph (2), based on limitable 
     losses incurred in excess of the annual insurer limits for 
     such insurers. The Secretary may take such actions, including 
     making such adjustments and reimbursements, as may be 
     necessary to carry out the purposes of this subsection.
       (g) Repayment.--Financial assistance made available under 
     this section shall be repaid through assessments under 
     section 7 collected by the Secretary and surcharges remitted 
     to the Secretary under section 8. Any such amounts collected 
     or remitted shall be deposited into the general fund of the 
     Treasury.
       (h) Final Netting.--The Secretary shall have sole 
     discretion to determine the time at which claims relating to 
     any insured loss or act of terrorism shall become final.
       (i) Finality of Determinations.--Any determination of the 
     Secretary under this section shall be final, and shall not be 
     subject to judicial review.
       (j) Emergency Designation.--Congress designates the amount 
     of new budget authority and outlays in all fiscal years 
     resulting from this section as an emergency requirement 
     pursuant to section 252(e) of the Balanced Budget and 
     Emergency Deficit Control Act of 1985 (2 U.S.C. 901(e)). Such 
     amount shall be available only to the extent that a request, 
     that includes designation of such amount as an emergency 
     requirement as defined in such Act, is transmitted by the 
     President to Congress.

     SEC. 7. ASSESSMENTS.

       (a) In General.--In the case of a triggering determination, 
     each commercial insurer shall be subject to assessments under 
     this section for the purpose of repaying a portion of the 
     financial assistance made available under section 6 in 
     connection with such determination.
       (b) Aggregate Assessment.--Pursuant to a triggering 
     determination, the Secretary shall determine the aggregate 
     amount (if any) to be assesseed under this section among all 
     commercial insurers, which shall be equal to the lesser of--
       (1) the difference between--
       (A) $20,000,000,000; and
       (B) the dollar amount specified in paragraph (1)(A) or 
     (2)(A) of section 6(b), as applicable for such triggering 
     determination; and
       (2) the amount of financial assistance paid under section 6 
     in connection with the triggering determination.
       (c) Method and Timing.--
       (1) In general.--The aggregate assessment amount in 
     connection with a triggering determination shall be assessed 
     through one or more, as may be necessary pursuant to 
     paragraph (3), assessments under this section.
       (2) Timing.--An assessment under this section in connection 
     with a triggering determination shall be imposed only upon 
     the expiration of any 12-month period beginning after such 
     determination during which no other assessments under this 
     section have been imposed.
       (3) Limitation.--The aggregate amount of any assessments 
     imposed under this section on any single commercial insurer 
     during any 12-month period shall not exceed the amount that 
     is equal to 3 percent of the net premium for such insurer for 
     such period.
       (d) Allocation.--The portion of the aggregate amount of any 
     assessment under this section that is allocated to each 
     commercial insurer shall be based on the ratio that the net 
     premium written by such commercial insurer during the year 
     during which the assessment is imposed bears to the aggregate 
     written premium for such year, subject to section 9 and the 
     limitation under subsection (c)(3) of this section.
       (e) Notice and Obligation to Pay.--
       (1) Notice.--As soon as practicable after any triggering 
     determination, the Secretary shall notify each commercial 
     insurer in writing of an assessment under this section, which 
     notice shall include the amount of the assessment allocated 
     to such insurer.
       (2) Effect of notice.--Upon notice to a commercial insurer, 
     the commercial insurer shall be obligated to pay to the 
     Secretary, not later than 60 days after receipt of such 
     notice, the amount of the assessment on such commercial 
     insurer.
       (3) Failure to make timely payment.--If any commercial 
     insurer fails to pay an assessment under this section before 
     the deadline established under paragraph (2) for the 
     assessment, the Secretary may take either or both of the 
     following actions:
       (A) Civil monetary penalty.--Assess a civil monetary 
     penalty pursuant to section 9(d) upon such insurer.
       (B) Interest.--Require such insurer to pay interest, at 
     such rate as the Secretary considers appropriate, on the 
     amount of the assessment that was not paid before the 
     deadline established under paragraph (2).
       (f) Administrative Flexibility.--
       (1) Adjustment of assessments.--The Secretary may provide 
     for or require estimations of amounts under this section and 
     may provide for subsequent refunds or require additional 
     payments to correct such estimations, as appropriate.
       (2) Deferral of contributions.--The Secretary may defer the 
     payment of part or all of an assessment required under this 
     section to be paid by a commercial insurer, but only to the 
     extent that the Secretary determines that such deferral is 
     necessary to avoid the likely insolvency of the commercial 
     insurer.
       (3) Timing of assessments.--The Secretary shall make 
     adjustments regarding the timing and imposition of 
     assessments (including the calculation of net premiums and 
     aggregate written premium) as appropriate for commercial 
     insurers that provide commercial property and casualty 
     insurance on a non-calendar year basis.

     SEC. 8. TERRORISM LOSS REPAYMENT SURCHARGE.

       (a) Determination of Imposition and Collection.--
       (1) In general.--If, pursuant to a triggering 
     determination, the Secretary determines that the aggregate 
     amount of financial assistance provided pursuant to section 6 
     exceeds the amount determined pursuant to section 7(b)(1), 
     the Secretary shall consider and weigh the factors under 
     paragraph (2) to determine the extent to which a surcharge 
     under this section should be established.

[[Page 23366]]

       (2) Factors.--The factors under this paragraph are--
       (A) the ultimate costs to taxpayers if a surcharge under 
     this section is not established;
       (B) the economic conditions in the commercial marketplace;
       (C) the affordability of commercial insurance for small- 
     and medium-sized business; and
       (D) such other factors as the Secretary considers 
     appropriate.
       (3) Policyholder premium.--Any amount established by the 
     Secretary as a surcharge under this section shall be 
     established and imposed as a policyholder premium surcharge 
     on commercial property and casualty insurance written after 
     such determination, for the purpose of repaying financial 
     assistance made available under section 6 in connection with 
     such triggering determination.
       (4) Collection.--The Secretary shall provide for commercial 
     insurers to collect surcharge amounts established under this 
     section and remit such amounts collected to the Secretary.
       (b) Amount and Duration.--Subject to subsection (c), the 
     surcharge under this section shall be established in such 
     amount, and shall apply to commercial property and casualty 
     insurance written during such period, as the Secretary 
     determines is necessary to recover the aggregate amount of 
     financial assistance provided under section 6 in connection 
     with the triggering determination that exceeds the amount 
     determined pursuant to section 7(b)(1).
       (c) Percentage Limitation.--The surcharge under this 
     section applicable to commercial property and casualty 
     insurance coverage may not exceed, on an annual basis, the 
     amount equal to 3 percent of the premium charged for such 
     coverage.
       (d) Other Terms.--The surcharge under this section shall--
       (1) be based on a percentage of the premium amount charged 
     for commercial property and casualty insurance coverage that 
     a policy provides; and
       (2) be imposed with respect to all commercial property and 
     casualty insurance coverage written during the period 
     referred to in subsection (b).
       (e) Exclusions.--For purposes of this section, commercial 
     property and casualty insurance does not include any 
     reinsurance provided to primary insurance companies.

     SEC. 9. ADMINISTRATION OF ASSESSMENTS AND SURCHARGES.

       (a) Manner and Method.--
       (1) In general.--Except to the extent specified in such 
     sections, the Secretary shall provide for the manner and 
     method of carrying out assessments under section 7 and 
     surcharges under section 8, including the timing and 
     procedures of making assessments and surcharges, notifying 
     commercial insurers of assessments and surcharge 
     requirements, collecting payments from and surcharges through 
     commercial insurers, and refunding of any excess amounts paid 
     or crediting such amounts against future assessments.
       (2) Effect of assessments and surcharges on urban and 
     smaller commercial and rural areas and different lines of 
     insurance.--In determining the method and manner of imposing 
     assessments under section 7 and surcharges under section 8, 
     including the amount of such assessments and surcharges, the 
     Secretary shall take into consideration--
       (A) the economic impact of any such assessments and 
     surcharges on commercial centers of urban areas, including 
     the effect on commercial rents and commercial insurance 
     premiums, particularly rents and premiums charged to small 
     businesses, and the availability of lease space and 
     commercial insurance within urban areas;
       (B) the risk factors related to rural areas and smaller 
     commercial centers, including the potential exposure to loss 
     and the likely magnitude of such loss, as well as any 
     resulting cross-subsidization that might result; and
       (C) the various exposures to terrorism risk for different 
     lines of commercial property and casualty insurance.
       (b) Timing of Coverages and Assessments.--The Secretary may 
     adjust the timing of coverages and assessments provided under 
     this Act to provide for equivalent application of the 
     provisions of this Act to commercial insurers and policies 
     that are not based on a calendar year.
       (c) Adjustment.--The Secretary may adjust the assessments 
     charged under section 7 or the percentage imposed under the 
     surcharge under section 8 at any time, as the Secretary 
     considers appropriate to protect the national interest, which 
     may include avoiding unreasonable economic disruption or 
     excessive market instability and avoiding undue burdens on 
     small businesses.
       (d) Civil Monetary Penalty.--
       (1) In general.--The Secretary may assess a civil monetary 
     penalty in an amount not exceeding the amount under paragraph 
     (2) against any commercial insurer that the Secretary 
     determines, on the record after opportunity for a hearing--
       (A) has failed to pay an assessment under section 7 in 
     accordance with the requirements of, or regulations issued, 
     under this Act;
       (B) has failed to charge, collect, or remit surcharges 
     under section 8 in accordance with the requirements of, or 
     regulations issued under, this Act;
       (C) has intentionally provided to the Secretary erroneous 
     information regarding premium or loss amounts; or
       (D) has otherwise failed to comply with the provisions of, 
     or the regulations issued under, this Act.
       (2) Amount.--The amount under this paragraph is the greater 
     of $1,000,000 and, in the case of any failure to pay, charge, 
     collect, or remit amounts in accordance with this Act or the 
     regulations issued under this Act, such amount in dispute.

     SEC. 10. APPLICATION TO SELF-INSURANCE ARRANGEMENTS AND 
                   OFFSHORE INSURERS AND REINSURERS.

       (a) Self-Insurance Arrangements.--The Secretary may, in 
     consultation with the NAIC, apply the provisions of this Act, 
     as appropriate, to self-insurance arrangements by 
     municipalities and other entities, but only if such 
     application is determined before the occurrence of a 
     triggering event and all of the provisions of this Act are 
     applied uniformly to such entities.
       (b) Offshore Insurers and Reinsurers.--The Secretary shall 
     ensure that the provisions of this Act are applied as 
     appropriate to any offshore or non-admitted entities that 
     provide commercial property and casualty insurance.

     SEC. 11. REQUIREMENT TO PROVIDE TERRORISM COVERAGE.

       The Secretary shall require each commercial insurer to 
     include, in each policy for commercial property and casualty 
     insurance coverage made available, sold, or otherwise 
     provided by such insurer, coverage for insured losses 
     resulting from the occurrence of an act of terrorism that--
       (1) does not differ materially from the terms, amounts, and 
     other coverage limitations applicable to losses arising from 
     events other than acts of terrorism;
       (2) may not be eliminated, waived, or excluded, by mutual 
     agreement, request or consent of the policyholder, or 
     otherwise; and
       (3) that meets any other criteria that the Secretary may 
     reasonably prescribe.

     SEC. 12. STATE PREEMPTION.

       (a) Covered Perils.--A commercial insurer shall be 
     considered to have complied with any State law that requires 
     or regulates the provision of insurance coverage for acts of 
     terrorism if the insurer provides coverage in accordance with 
     the definitions regarding acts of terrorism under this Act or 
     under any regulations issued by the Secretary.
       (b) Rate Laws.--If any provision of any State law prevents 
     an insurer from increasing its premium rates in an amount 
     necessary to recover any assessments pursuant to section 7, 
     such provision is preempted only to the extent necessary to 
     provide for such insurer to recover such losses.
       (c) File and Use.--
       (1) In general.--With respect only to commercial property 
     and casualty insurance covering acts of terrorism, any 
     provision of State law that requires, as a condition 
     precedent to the effectiveness of rates or policies for such 
     insurance that is made available by an insurer licensed to 
     transact such business in the State, any action (including 
     prior approval by the State insurance regulator for such 
     State) other than filing of such rates and policies and 
     related information with such State insurance regulator is 
     preempted to the extent such law requires such additional 
     actions for such insurance coverage.
       (2) Subsequent review authority.--Paragraph (1) shall not 
     be considered to preempt a provision of State law solely 
     because the law provides that rates and policies for such 
     insurance coverage are, upon such filing, subject to 
     subsequent review and action, which may include actions to 
     disapprove or discontinue use of such rates or policies, by 
     the State insurance regulator.
       (3) Treatment of prior review provisions.--Any authority 
     for prior review and action by a State regulator preempted 
     under paragraph (1) shall be deemed to be authority to 
     conduct a subsequent review and action on such filings.

     SEC. 13. CONSISTENT STATE GUIDELINES FOR COVERAGE FOR ACTS OF 
                   TERRORISM.

       (a) Sense of Congress Regarding Covered Perils.--It is the 
     sense of the Congress that--
       (1) the NAIC, in consultation with the Secretary, should 
     develop appropriate definitions for acts of terrorism that 
     are consistent with this Act and appropriate standards for 
     making determinations regarding occurrences of acts of 
     terrorism;
       (2) each State should adopt the definitions and standards 
     developed by the NAIC for purposes of regulating insurance 
     coverage made available in that State;
       (3) in consulting with the NAIC, the Secretary should 
     advocate and promote the development of definitions and 
     standards that are appropriate for purposes of this Act; and
       (4) after consultation with the NAIC, the Secretary should 
     adopt further definitions for acts of terrorism and standards 
     for determinations that are appropriate for this Act.
       (b) Insurance Reserve Guidelines.--
       (1) Sense of congress regarding adoption by states.--It is 
     the sense of the Congress that--

[[Page 23367]]

       (A) the NAIC should develop appropriate guidelines for 
     commercial insurers and pools regarding maintenance of 
     reserves against the risks of acts of terrorism; and
       (B) each State should adopt such guidelines for purposes of 
     regulating commercial insurers doing business in that State.
       (2) Consideration of adoption of national guidelines.--Upon 
     the expiration of the 6-month period beginning on the date of 
     the enactment of this Act, the Secretary shall make a 
     determination of whether the guidelines referred to in 
     paragraph (1) have, by such time, been developed and adopted 
     by nearly all States in a uniform manner. If the Secretary 
     determines that such guidelines have not been so developed 
     and adopted, the Secretary shall consider adopting, and may 
     adopt, such guidelines on a national basis in a manner that 
     supercedes any State law regarding maintenance of reserves 
     against such risks.
       (c) Guidelines Regarding Disclosure of Pricing and Terms of 
     Coverage.--
       (1) Sense of congress.--It is the sense of the Congress 
     that the States should require, by laws or regulations 
     governing the provision of commercial property and casualty 
     insurance that includes coverage for acts of terrorism, that 
     the price of any such terrorism coverage, including the costs 
     of any terrorism related assessments or surcharges under this 
     Act, be separately disclosed.
       (2) Adoption of national guidelines.--If the Secretary 
     determines that the States have not enacted laws or adopted 
     regulations adequately providing for the disclosures 
     described in paragraph (1) within a reasonable period of time 
     after the date of the enactment of this Act, the Secretary 
     shall, after consultation with the NAIC, adopt guidelines on 
     a national basis requiring such disclosure in a manner that 
     supercedes any State law regarding such disclosure.

     SEC. 14. CONSULTATION WITH STATE INSURANCE REGULATORS AND 
                   NAIC.

       (a) In General.--The Secretary shall consult with the State 
     insurance regulators and the NAIC in carrying out this Act.
       (b) Financial Assistance, Assessments, and Surcharges.--The 
     Secretary may take such actions, including entering into such 
     agreements and providing such technical and organizational 
     assistance to insurers and State insurance regulators, as may 
     be necessary to provide for the distribution of financial 
     assistance under section 6 and the collection of assessments 
     under section 7 and surcharges under section 8.
       (c) Investigating and Auditing Claims.--The Secretary may, 
     in consultation with the State insurance regulators and the 
     NAIC, investigate and audit claims of insured losses by 
     commercial insurers and otherwise require verification of 
     amounts of premiums or losses, as appropriate.

     SEC. 15. STUDY OF POTENTIAL EFFECTS OF TERRORISM ON LIFE 
                   INSURANCE INDUSTRY.

       (a) Establishment.--Not later than 30 days after the date 
     of enactment of this Act, the President shall establish a 
     commission (in this section referred to as the 
     ``Commission'') to study and report on the potential effects 
     of an act or acts of terrorism on the life insurance industry 
     in the United States and the markets served by such industry.
       (b) Membership and Operations.--
       (1) Appointment.--The Commission shall consist of 7 
     members, as follows:
       (A) The Secretary of the Treasury or the designee of the 
     Secretary.
       (B) The Chairman of the Board of Governors of the Federal 
     Reserve System or the designee of the Chairman.
       (C) The Assistant to the President for Homeland Security.
       (D) 4 members appointed by the President, who shall be--
       (i) a representative of direct underwriters of life 
     insurance within the United States;
       (ii) a representative of reinsurers of life insurance 
     within the United States;
       (iii) an officer of the NAIC; and
       (iv) a representative of insurance agents for life 
     underwriters.
       (2) Operations.--The chairperson of the Commission shall 
     determine the manner in which the Commission shall operate, 
     including funding, staffing, and coordination with other 
     governmental entities.
       (c) Study.--The Commission shall conduct a study of the 
     life insurance industry in the United States, which shall 
     identify and make recommendations regarding--
       (1) possible actions to encourage, facilitate, and sustain 
     the provision, by the life insurance industry in the United 
     States, of coverage for losses due to death or disability 
     resulting from an act or acts of terrorism, including in the 
     face of threats of such acts; and
       (2) possible actions or mechanisms to sustain or supplement 
     the ability of the life insurance industry in the United 
     States to cover losses due to death or disability resulting 
     from an act or acts of terrorism in the event that--
       (A) such acts significantly affect mortality experience of 
     the population of the United States over any period of time;
       (B) such losses jeopardize the capital and surplus of the 
     life insurance industry in the United States as a whole; or
       (C) other consequences from such acts occur, as determined 
     by the Commission, that may significantly affect the ability 
     of the life insurance industry in the United States to 
     independently cover such losses.
       (d) Recommendations.--The Commission may make a 
     recommendation pursuant to subsection (c) only upon the 
     concurrence of a majority of the members of the Commission.
       (e) Report.--Not later than 120 days after the date of 
     enactment of this Act, the Commission shall submit to the 
     House of Representatives and the Senate a report describing 
     the results of the study and any recommendations developed 
     under subsection (c).
       (f) Termination.--The Commission shall terminate 60 days 
     after submission of the report pursuant to subsection (e).

     SEC. 16. RAILROAD AND TRUCKING INSURANCE STUDY.

       The Secretary of the Treasury shall conduct a study to 
     determine how the Federal Government can address a possible 
     crisis in the availability and affordability of railroad and 
     trucking insurance by making such insurance for acts of 
     terrorism available on commercially reasonable terms. Not 
     later than 120 days after the date of the enactment of this 
     Act the Secretary shall submit to the Congress a report 
     regarding the results and conclusions of the study.

     SEC. 17. STUDY OF REINSURANCE POOL SYSTEM FOR FUTURE ACTS OF 
                   TERRORISM.

       (a) Study.--The Secretary, the Board of Governors of the 
     Federal Reserve System, and the Comptroller General of the 
     United States shall jointly conduct a study on the 
     advisability and effectiveness of establishing a reinsurance 
     pool system relating to future acts of terrorism to replace 
     the program provided for under this Act.
       (b) Consultation.--In conducting the study under subsection 
     (a), the Secretary, the Board of Governors of the Federal 
     Reserve System, and the Comptroller General shall consult 
     with (1) academic experts, (2) the United Nations Secretariat 
     for Trade and Development, (3) representatives from the 
     property and casualty insurance industry, (4) representatives 
     from the reinsurance industry, (5) the NAIC, and (6) such 
     consumer organizations as the Secretary considers 
     appropriate.
       (c) Report.--Not later than 6 months after the date of the 
     enactment of this Act, the Secretary, the Board of Governors 
     of the Federal Reserve System, and the Comptroller General 
     shall jointly submit a report to the Congress on the results 
     of the study under subsection (a).

     SEC. 18. DEFINITIONS.

       For purposes of this Act, the following definitions shall 
     apply:
       (1) Act of terrorism.--
       (A) In general.--The term ``act of terrorism'' means any 
     act that the Secretary determines meets the requirements 
     under subparagraph (B), as such requirements are further 
     defined and specified by the Secretary in consultation with 
     the NAIC.
       (B) Requirements.--An act meets the requirements of this 
     subparagraph if the act--
       (i) is unlawful;
       (ii) causes harm to a person, property, or entity, in the 
     United States, or in the case of a domestic United States air 
     carrier or a United States flag vessel (or a vessel based 
     principally in the United States on which United States 
     income tax is paid and whose insurance coverage is subject to 
     regulation in the United States), in or outside the United 
     States;
       (iii) is committed by a person or group of persons or 
     associations who are recognized, either before or after such 
     act, by the Department of State or the Secretary as an 
     international terrorist group or have conspired with such a 
     group or the group's agents or surrogates;
       (iv) has as its purpose to overthrow or destabilize the 
     government of any country, or to influence the policy or 
     affect the conduct of the government of the United States or 
     any segment of the economy of United States, by coercion; and
       (v) is not considered an act of war, except that this 
     clause shall not apply with respect to any coverage for 
     workers compensation.
       (2) Affiliate.--The term ``affiliate'' means, with respect 
     to an insurer, any company that controls, is controlled by, 
     or is under common control with the insurer.
       (3) Aggregate written premium.--The term ``aggregate 
     written premium'' means, with respect to a year, the 
     aggregate premium amount of all commercial property and 
     casualty insurance coverage written during such year under 
     all lines of commercial property and casualty insurance.
       (4) Commercial insurer.--The term ``commercial insurer'' 
     means any corporation, association, society, order, firm, 
     company, mutual, partnership, individual, aggregation of 
     individuals, or any other legal entity that provides 
     commercial property and casualty insurance. Such term 
     includes any affiliates of a commercial insurer.
       (5) Commercial property and casualty insurance.--
       (A) In general.--The term ``commercial property and 
     casualty insurance'' means insurance or reinsurance, or 
     retrocessional reinsurance, for persons or properties in the 
     United States against--
       (i) loss of or damage to property;
       (ii) loss of income or extra expense incurred because of 
     loss of or damage to property;

[[Page 23368]]

       (iii) third party liability claims caused by negligence or 
     imposed by statute or contract, including workers 
     compensation; or
       (iv) loss resulting from debt or default of another.
       (B) Exclusions.--Such term does not include--
       (i) insurance for homeowners, tenants, private passenger 
     nonfleet automobiles, mobile homes, or other insurance for 
     personal, family, or household needs;
       (ii) insurance for professional liability, including 
     medical malpractice, errors and omissions, or directors' and 
     officers' liability; or
       (iii) health or life insurance.
       (6) Control.--A company has control over another company 
     if--
       (A) the company directly or indirectly or acting through 
     one or more other persons owns, controls, or has power to 
     vote 25 percent or more of any class of voting securities of 
     the other company;
       (B) the company controls in any manner the election of a 
     majority of the directors or trustees of the other company; 
     or
       (C) the Secretary determines, after notice and opportunity 
     for hearing, that the company directly or indirectly 
     exercises a controlling influence over the management or 
     policies of the other company.
       (7) Covered period.--The term ``covered period'' has the 
     meaning given such term in section 19.
       (8) Industry-wide losses.--The term ``industry-wide 
     losses'' means the aggregate insured losses sustained by all 
     insurers from coverage written under all lines of commercial 
     property and casualty insurance.
       (9) Insured loss.--The term ``insured loss'' means any 
     loss, net of reinsurance and retrocessional reinsurance, 
     covered by commercial property and casualty insurance.
       (10) NAIC.--The term ``NAIC'' means the National 
     Association of Insurance Commissioners.
       (11) Net premium.--The term ``net premium'' means, with 
     respect a commercial insurer and a year, the aggregate 
     premium amount collected by such commercial insurer for all 
     commercial property and casualty insurance coverage written 
     during such year under all lines of commercial property and 
     casualty insurance by such commercial insurer, less any 
     premium paid by such commercial insurer to other commercial 
     insurers to insure or reinsure those risks.
       (12) Secretary.--The term ``Secretary'' means the Secretary 
     of the Treasury.
       (13) State.--The term ``State'' means the States of the 
     United States, the District of Columbia, the Commonwealth of 
     Puerto Rico, the Commonwealth of the Northern Mariana 
     Islands, Guam, the Virgin Islands, American Samoa, and any 
     other territory or possession of the United States.
       (14) State insurance regulator.--The term ``State insurance 
     regulator'' means, with respect to a State, the principal 
     insurance regulatory authority of the State.
       (15) Triggering determination.--The term ``triggering 
     determination'' has the meaning given such term in section 
     5(a).
       (16) Triggering event.--The term ``triggering event'' 
     means, with respect to a triggering determination, the 
     occurrence of an act of terrorism, or the occurrence of such 
     acts, that caused the insured losses resulting in such 
     triggering determination.
       (17) United states.--The term ``United States'' means, 
     collectively, the States (as such term is defined in this 
     section).

     SEC. 19. COVERED PERIOD AND EXTENSION OF PROGRAM.

       (a) Covered Period.--Except to the extent provided 
     otherwise under subsection (b), for purposes of this Act, the 
     term ``covered period'' means the period beginning on the 
     date of the enactment of this Act and ending on January 1, 
     2003.
       (b) Extension of Program.--If the Secretary determines that 
     extending the covered period is necessary to ensure the 
     adequate availability in the United States of commercial 
     property and casualty insurance coverage for acts of 
     terrorism, the Secretary may, subject to subsection (c), 
     extend the covered period by not more than two years.
       (c) Report.--The Secretary may exercise the authority under 
     subsection (b) to extend the covered period only if the 
     Secretary submits a report to the Congress providing notice 
     of and setting forth the reasons for such extension.

     SEC. 20. REGULATIONS.

       The Secretary shall issue any regulations necessary to 
     carry out this Act.

  The SPEAKER pro tempore. Pursuant to House Resolution 297, the 
gentleman from New York (Mr. LaFalce) and a Member opposed each will 
control 30 minutes.
  The Chair recognizes the gentleman from New York (Mr. LaFalce).
  Mr. LaFALCE. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise to offer a substitute that I believe would 
greatly improve the bill before us. The substitute in large part 
reflects the structure of the bill before us, but it makes improvements 
to the bill in three very crucial areas.
  First of all, it requires the individual insurers to retain a more 
significant share of initial losses, providing for a real, up-front 
deductible.
  Second, it requires that terrorism coverage be included with all 
property and casualty insurance, eliminating the ability of insurers to 
cherry-pick safer properties, while placing coverage out of the reach 
of others.
  Third, it eliminates the extraneous limitations on victims' recovery 
rights that are not necessary to address this problem and have no place 
in this bill or any bill. There will be no bill that contains these 
provisions.
  Let me address each of these in turn. The deductible included in my 
substitute would require the insurance industry to pay the first $5 
billion of insured losses in the first year, increasing to $10 billion 
in the second and third years. Interestingly, the insurance industry, 
the Senate, and administration negotiators said they could accept a 
bill with a $10 billion deductible in the first year. My substitute has 
a $5 billion deductible. The bill before us has no deductible. There 
should be a deductible.
  The deductible would be met in the first instance by individual 
insurers who would be responsible for 100 percent of the losses 
suffered by their policyholders up to a cap of 7 percent of the 
insurer's premium income. This first dollar of loss retention is 
critical to the maintenance of sound underwriting practices by the 
insurance industry, and it will make it much easier for a private 
reinsurance market to reemerge. It will also make it less likely that 
the Federal Government will need to step in to cover losses. Some 
events could be covered entirely by the deductible. It would keep the 
Federal Government out unless it were absolutely imperative that the 
Federal Government enter.
  This kind of deductible has the support of a broad and diverse 
coalition of taxpayer, consumer, and environmental groups, each of 
which believe it is important that insurers should pay some level of 
initial loss in its entirety. And the concept of a deductible of up to 
$10 billion in the first year was agreed to by the Treasury Department 
of the Bush administration in their conversations with the Senate. 
Again, the main bill before us has no deductible. The substitute does. 
We should have a deductible.
  Second, to avoid the cherry-picking, my substitute, unlike the 
Republican bill, would mandate terrorist coverage. This will prevent 
insurers from providing terrorism coverage only on properties that are 
perceived as low risk while leaving large portions of the economy 
uncovered. This provision would help to ensure that terrorism coverage 
is affordable by spreading the risk across the broadest possible base. 
By ensuring that this coverage would be included in all property and 
casualty policies, as it is today, it would help to cushion the effects 
on businesses of any further terrorist attacks by eliminating the 
temptation for commercial property holders and businesses to ``opt 
out'' of terrorism coverage. Do not forget, property and casualty 
properties today include terrorism coverage.
  Finally, my bill does not limit victims' rights by denying them the 
legal redress that they deserve. For reasons completely extraneous to 
the current insurance crisis, the White House and the Republican 
leadership are pursuing, by means of this legislation, long-sought 
restrictions going back 20-30 years on the rights of victims. They seek 
to minimize the compensation needed to make the victims of terrorism 
whole. These restrictions on victims' rights will create disincentives 
for businesses to do all that they reasonably can to prevent another 
terrorist attack and make America safer.
  I urge Members' support for this substitute. It is basically the 
House bill, with those changes I have articulated. In the short amount 
of time that we have left to address the serious threat to our economy, 
I believe the substitute represents a much-improved response to meeting 
our responsibilities.
  Mr. Speaker, I reserve the balance of my time.

[[Page 23369]]


  Mr. BACHUS. Mr. Speaker, I claim the time in opposition to the 
amendment in the nature of a substitute.
  The SPEAKER pro tempore. The gentleman from Alabama (Mr. Bachus) is 
recognized for 30 minutes.
  Mr. BACHUS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, there are several problems that the membership ought to 
have with this amendment, things that I hope that the gentleman from 
New York (Mr. LaFalce) will respond to, concerns which we have.
  My first concern is that we are mandating that anyone who takes out 
commercial insurance must also take out coverage for terrorism. Now, in 
the towns and the cities and rural areas that I represent, there are a 
lot of small businessmen who do not think that they need insurance to 
ensure against terrorism.

                              {time}  1415

  Actually, I have farmers in my district. They have chicken houses, I 
would say to the gentleman from New York. Those farmers do not feel 
like those chicken houses and those chickens need insurance against 
terrorism. They do not believe that there is much of a possibility of a 
terrorist planting a bomb in one of those chicken houses. I have a lot 
of repair shops in my district that repair used automobiles. The people 
that own those businesses and that pay liability insurance and take out 
coverage on those businesses, they do not believe that they need to be 
paying for insurance to cover that auto body shop or that beauty shop. 
I have a lot of beauticians, I would say to the gentleman from New 
York. I have a lot of beauticians in my district. They have a lot of 
beauty shops. They really do not believe that they ought to be 
compelled by the Federal Government to take out insurance to insure 
against terrorists. In fact, they may not be able to afford it.


  But what this substitute does, it requires anyone that takes out a 
commercial policy on any business, whether it is a beauty shop, a 
barber shop, an auto mechanic store, a chicken house, a small grocery 
store, it requires you to take out and insure against a terrorist act. 
I have a lot of businesses in my district that quite simply are having 
trouble paying for the insurance that they have. There is no opt-out. I 
can insure against theft, I can insure against fire, I can insure 
against vandalism; but I may not want to insure against terrorism. I 
may own a small business. I may get a quote of $12,000 a year for basic 
coverage and another $1,000 or $1,500 a year to insure against 
terrorism. I may say, I don't want terrorism covered.
  I would say to the gentleman from New York, it is my understanding 
that his amendment, and correct me if I am wrong, but it is my 
understanding that his amendment requires anyone who takes out a 
commercial policy to protect their place of business, that they must 
also insure against terrorism. I would stop right there and I would 
reserve the balance of my time and ask the gentleman so we can have a 
coherent discussion of this, is in fact he mandating that every 
American that takes out insurance coverage on their place of business, 
that they must insure against terrorism no matter what the cost of that 
premium?
  Mr. Speaker, I will reserve the balance of my time and let the 
gentleman address that question.
  Mr. LaFALCE. Mr. Speaker, I could have a colloquy with the gentleman 
on his time, but I do not have time. If the gentleman wants to do it on 
his time, I would be glad to have a colloquy.
  Mr. BACHUS. I would say this to the gentleman. I will answer the 
question and he can correct me if I am wrong. Section 11 of his 
amendment, a requirement to provide terrorism coverage, and it says 
that this coverage may not be eliminated, waived or excluded by mutual 
agreement, request or consent of the policyholder or otherwise. That is 
what it says. It says you cannot exclude coverage for that. It may not 
be eliminated, may not be waived, may not be excluded from a commercial 
policy even by mutual agreement or by request or consent of the 
policyholder. That is what it says. It is the plain wording.
  I would hope the gentleman did not intend to say that to every 
American who has an insurance policy on a piece of property. There is 
an option. The option is that you just do not get insurance. But I 
think the gentleman from New York is saying if you do get insurance, 
you will have to have terrorist coverage and you will have to pay for 
that coverage.
  Mr. Speaker, I reserve the balance of my time.
  Mr. LaFALCE. Mr. Speaker, I yield 3 minutes to the gentlewoman from 
Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Speaker, quite the contrary to the 
distinguished gentleman from Alabama, the LaFalce substitute spreads 
the risk. What it simply does is it says that if you are a small 
business, a chicken farmer, you need to make sure that insurance 
companies around the world or in this Nation have the obligation to 
insure you and protect you. That is what we are arguing about today. 
That is why I rise today to support the LaFalce substitute and also to 
say I would have liked to have supported a clean underlying bill. I 
believe it is important to provide this kind of reinsurance for our 
insurance companies, not for the institutions but for the people of 
America.
  I would also say to my colleagues, I wish I was debating resources 
for those who are unemployed, particularly as we face some 500,000 
individuals in the State of Texas. Additionally in my own congressional 
district we have a company that is now teetering on the brink. I may 
see tomorrow 3, 4, 6,000 people laid off. This House has failed in its 
duty to provide unemployment insurance for those who are laid off. But 
let us speak about the underlying bill and why the LaFalce substitute 
is the right direction to go.
  First of all, the bill that is before us denies victims' rights. It 
in fact denies noneconomic damages, economic damages and punitive 
damages. It indicates that if you are a plaintiff and you are impacted 
by a terrorist act, you could not go into court and receive any 
benefits or receive any coverage from your insurance company if you 
were not physically injured. That means all the wives and husbands who 
lost loved ones, who lost their husbands or wives on September 11 in 
that heinous terrorist act could not recover for the pain and 
suffering, for the loss of consortium. I believe that we have a better 
direction to go. And in fact I am delighted that the LaFalce bill does 
not have the tax provisions in it. I believe it is extremely important 
that we find a way to engage the insurance companies but not give away 
money.
  The underlying bill provides assistance, Federal dollars, one dollar 
past a billion dollars. In fact, the insurance companies said, We're 
willing to pay $5 billion in losses. The LaFalce bill has $5 billion in 
1 year and I think $10 billion after the 1 year. We are giving away 
money in the underlying bill.
  The substitute is a clean bill that directs its attention and its 
energies toward the problem. What is the problem? We want to be able to 
ensure that insurance companies will be able to insure Americans, 
businesses, citizens of the United States in light of terrorist 
attacks. And we want to do it fairly, and we want to do it 
forthrightly. We do not want to deny individuals their access to the 
courts where they cannot go in and secure recovery for those who have 
maliciously not done their duty and therefore caused an enhanced injury 
to someone such as, for example, a baggage handling company that did 
not do the proper security so that something dangerous happened on the 
airline.
  I support the LaFalce bill because it is a straight-up answer to the 
insurance problem, and it also provides for insurance for all 
Americans.
  Mr. Speaker, the September 11 terrorist attacks have devastated many 
industries and sectors of the American economy, including the insurance 
industry.
  The legislation before us today, H.R. 3210, has been rushed to the 
House floor because the insurance industry has stated that, while it 
will be able to cover the estimated $40 billion in claims resulting 
from the Sept. 11 terrorist attacks, any new and renewed policies will 
not cover terrorist-inflicted damage unless the

[[Page 23370]]

government helps cover that unknown liability. This is an issue of 
great concern to Congress and to the Nation.
  While I cannot support this bill as it currently stands, I would like 
to state, at the outset, that I join my colleagues in calling for swift 
passage of a terrorism reinsurance bill. Such legislation is greatly 
needed and Congress can make a great difference here, as we have done 
in the past.
  As we all know, Congress acted swiftly and deliberately in the recent 
Airlines bailout plan in the amount of $15 billion to save this 
important industry which was so severely devastated by the September 11 
attacks. We can act with similar diligence and bi-partisan sensibility 
to help this important sector of our economy as well.
  This is not just an insurance industry problem. Rather, it is a 
national issue because if the insurance industry cannot reinsure the 
risk of further terrorist attacks, it will either increase premiums to 
the detriment of consumers, or simply stop offering terrorism coverage 
altogether. Furthermore, without adequate insurance coverage, lenders 
will not be able to lend and new investments will not be made, creating 
a credit crunch that could have devastating consequences for our 
economy.
  I applaud my colleagues on the Ways and Means Committee in striking 
provisions that would have provided preferential tax treatment on 
insurance industry reserves, and instead called for a greatly needed 
study of the issue. However, I am disappointed in the partisan fiasco 
in the Rules Committee which turned this once bipartisan effort to 
protect the insurance industry from terrorism claims into a partisan 
``tort reform'' Trojan horse.
  I join my colleagues on the Judiciary Committee and those on the 
Financial Services Committee who object to the inclusion of Section 15, 
a tort reform provision, which would effectively ban punitive damages 
in terrorism-related cases. This is absolutely unnecessary.
  Additionally, it is unclear whether the bill applies to actions 
brought against the insured and the insurer, or just the insurer. I 
stand with those who support the position that such legislation limits 
tort actions against the insurer, but not the insured.
  We must also ensure that terrorism coverage is available and 
affordable for all consumers and businesses, and avoid ``cherry 
picking'' where companies insure ``good risks'' and leave other 
segments of economy uncovered. To this end we can and should avoid that 
problem by ensuring that terrorism coverage is required as part of 
basic property and casualty coverage.
  Finally, there is no need or justification for the tax provisions in 
the bill, which unnecessarily provides the industry with a long-term 
tax subsidy which could well exceed what it pays under the bill.
  Instead, I lend my support to the LaFalce substitute. It includes, 
for example, an industry deductible and requires each company to meet 
its deductible before receiving federal assistance. It also requires 
terrorism coverage as part of commercial property and casualty 
insurance. It also does not limit tort actions or recoveries, and does 
not contain the offensive tax provisions as does the underlying bill.
  Also, it requires the Secretary of the Treasure, in determining 
whether to establish a surcharge on policyholders, to consider the cost 
to the taxpayer, economic conditions, affordability of insurance, and 
other factors. And it includes studies on the impact of terrorism on 
the life insurance industry and on the advisability of establishing a 
terrorism reinsurance pool.
  Congress can and must act to protect the most vulnerable sectors of 
our economy, and those who most need assistance. The underlying bill 
once held the promise of protecting the insurance industry and the 
millions of Americans dependent on it. However, the version of the bill 
before us today contains offensive provisions that I simply cannot in 
good conscience support. As such, I urge my colleagues to vote against 
the bill and to support the LaFalce substitute.
  Mr. BACHUS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I think we received the answer to our question, and that 
is that this amendment attempts to require all Americans who own 
businesses to take out terrorist coverage and to pay for that coverage. 
In other words, if you have got a beauty shop, the gentleman from New 
York, his amendment if it passes, you will be required to take out 
terrorist insurance. If you have got a restaurant, you will be required 
to take it out and to pay for it.
  So I think we have our answer there. As the gentlewoman from Texas 
says, we want to spread the risk to people that even may not have any 
risk, may not choose to need insurance. What we are basically telling 
them is, Not only do you need it, but you'll pay for it, whether you 
want it or not.
  Mr. Speaker, I ask unanimous consent that the gentleman from Ohio 
(Mr. Oxley) be permitted to control the remainder of my time for 
consideration of this amendment.
  The SPEAKER pro tempore (Mr. Nethercutt). Is there objection to the 
request of the gentleman from Alabama?
  There was no objection.
  Mr. OXLEY. Mr. Speaker, I am pleased to yield 3 minutes to the 
gentleman from Pennsylvania (Mr. Toomey).
  Mr. TOOMEY. Mr. Speaker, there are several problems that I have with 
the substitute that is offered by my distinguished colleague from New 
York, but I want to touch on two of them in particular. One is the fact 
that the substitute clearly removes from the committee bill several 
vital tort reform measures which are in the base bill; and they are in 
the base bill for a simple reason, for a variety of reasons, but mainly 
to ensure that in the event that harm is done in a terrorist attack, we 
want to see a greater share of the payment to the victims actually go 
to the victims and not a huge windfall going to trial lawyers. That is 
a big part of what this is about.
  That is a serious flaw, but there is another one that I think may be 
even a bigger flaw in this bill and that is the issue that was raised 
by my colleague, the distinguished gentleman from Alabama. There is no 
question, it is very clear, the substitute does impose a new Federal 
mandate on business, large and small business, every business, 
specifically by requiring that every commercial insurance policy carry 
this terrorism provision whether or not the insured wants to buy this 
provision. It is true that it only applies to commercial policies. You 
could choose not to buy a commercial policy; but as we all know as a 
practical matter, you cannot be in business in America today without 
having a commercial insurance policy. So it really is a universal 
mandate in that sense.
  Think about this. At a time when thousands of businesses are losing 
money, forced to lay off literally hundreds of thousands of workers in 
the last several months, layoffs that are continuing today, this 
substitute, if it were adopted, would force potentially unlimited 
increases in costs in doing business for every business in America. It 
says you have got to go out and buy terrorism insurance coverage 
regardless of what kind of business you are in, regardless of where you 
are located, regardless of whether or not you perceive yourself to have 
any risks, and regardless of what it costs. This can only result in 
more job losses.
  I do not know how many folks here have actually gone through the 
experience of taking their entire life savings, remortgaging their 
house, borrowing money from family and friends and risking it all to 
pursue the dream of owning their own business, whether that is a little 
coffee shop on Tilghman Street in Allentown or a dry cleaner on 
Chestnut Street in Emmaus or a bookstore in downtown Bethlehem, but I 
know what that is all about. I have been through that. I think we all 
know people who have been through that.
  These are the people, the people who are willing to take that huge 
risk to risk everything they have to launch that small business. These 
are the people and their employees that I am concerned about, and I am 
concerned about the adverse effect that this provision will have on 
them. These are the people that are keeping our economy going. These 
small businesses are the ones that are creating the few new jobs we are 
creating in our economy. They are creating so many opportunities for so 
many people. The cards are stacked already against the entrepreneur 
starting a new business. It is the nature of a new business to have a 
very risky period.
  We have still a crushing tax burden on Americans. We have too much 
regulation. My argument is let us not stack the deck further against 
the people who are creating new businesses, running small businesses, 
creating opportunity. Let us not impose this new costly mandate on 
them.

[[Page 23371]]

  Reject the substitute and support the underlying bill.
  Mr. LaFALCE. Mr. Speaker, I yield 3 minutes to the gentleman from 
Texas (Mr. Bentsen).
  Mr. BENTSEN. Mr. Speaker, I had not intended to support the 
substitute because we wrote a very good bill in the House. Again, I 
want to commend the chairman and the chairman of the subcommittee as 
well for the work they did. We worked very hard all day long to put out 
a good bill; and I thought the approach was the right approach to take 
in terms of the model, in terms of the deductible, in terms of the way 
it worked. It combined the pooled premium structure, it protected the 
taxpayers, it combined the deductible aspect that the administration 
wanted, and it even had some liability reform, a collateral offset that 
I was not particularly comfortable with but I thought was the balance 
we needed because this was also a temporary measure that we were 
passing, and in fact we made it as temporary as possible. Because I am 
not very comfortable with us entering the marketplace right now, but I 
do think it is necessary to get us into the next year so policies can 
be rewritten, so we do not have the calamity that I discussed that I 
think other Members are aware of. I know the gentleman from California 
(Mr. Cox) was a securities lawyer before he was here, and he 
understands how this works and the problems that can occur if we do not 
do this.
  But on the way to the floor, this bill was rewritten and I am left 
with no choice but to support a substitute that otherwise quite 
frankly, with all due respect to the gentleman from New York, I would 
not support because I would support the underlying bill as it was 
originally written.
  I look at the litigation management section in this, and I see a 
couple of problems. The first problem I see is the question on 
noneconomic damages that are in here and there is no liability for the 
defendant if the defendant actually has liability. What if you have a 
spouse who does not work and is in a building that gets hit by a plane? 
There are no damages that can be brought. That spouse's worth under the 
court's eyes is zero dollars. I do not think any Member, whether you 
are for liability reform or not, thinks that is a particularly good 
idea.

                              {time}  1430

  But the other problem in the haste to write this bill, if you read 
the section on legal fees the way I read it, it applies to all 
attorneys. So if defense counsel does their job and wins the case, they 
can get no more than 20 percent of damages, and if damages are zero, 20 
percent of zero, the last time I checked, was still zero. So if the PNC 
company pays their counsel, which most counsel I know like to get paid, 
they are not going to be able to pay them anything, or they are going 
to be subject to fines or imprisonment. So there is a flaw in the bill. 
I am sure somewhere down the line it will get worked out.
  But the bigger concern I have is about this is the bill we ought to 
pass for the good of the economy, and what this is going to do in the 
name of ``legal reform,'' which is not what this bill started out 
about, is it is going to get shot down in the other body and we are 
either going to be here on December 23 trying to hammer this thing out, 
or December 24th, or December 25th, maybe we will take the 25th off, 
the 26th, 27th, trying to work this out, when we had a very good bill 
in the first place, a bill that made it explicitly clear that the 
taxpayers would not be on the hook for punitive damages or non-economic 
damages. But if the defendant, the building owner, the airline owner, 
was liable in any way for gross negligence, they had to step up to the 
plate for that liability. That is what we should be doing.
  As a result, I am going to have to defy my chairman and support the 
substitute, because we are left with no other choice. I hope somewhere 
rationale will prevail and we can get a real bill done.
  Mr. OXLEY. Mr. Speaker, I yield 2 minutes to my good friend, the 
gentleman from Staten Island, New York (Mr. Fossella).
  Mr. FOSSELLA. Mr. Speaker, I thank the chairman for yielding me time.
  Mr. Speaker, I happen to believe that sometimes when we are 
confronted with an issue, it is best for Congress to do nothing at 
times. This is not one of those times. I think we are playing with fire 
if Congress does not act on passing this legislation this year as soon 
as possible.
  The underlying bill as presented by the chairman is the right vehicle 
to proceed with. Every day that passes creates more uncertainty, thus 
more risk and more instability in our economy. It is not just the 
insurance companies or the reinsurers; it is the very foundation of our 
Nation.
  For example, right now in midtown Manhattan, there is an office 
project, a major one, being contemplated. It means jobs, it means 
livelihoods, it means a better quality of life for so many people.
  These developers right now are having discussions with their 
insurance agents. Insurance agents say, we cannot give you this 
insurance because of the risk associated with a potential terrorist 
attack. If that does not occur, there may not be and very likely will 
not be this development project in midtown Manhattan. Hundreds of 
millions of dollars will stop. That is going to take place across New 
York and across the country, unless something is done.
  I would urge everybody in this Chamber and the other body to come to 
closure on this as soon as possible, without raising the cost of 
insurance unnecessarily to small and big business owners across the 
country, to work cooperatively to do what is right for the American 
people; not to put the taxpayer on the hook, but to play the vital role 
that government should play in this capacity, and that is to protect 
against any potential terrorist attack which, by definition, is random 
and terrorist in nature. Put it aside, support the underlying bill, and 
let us move forward.
  Mr. LaFALCE. Mr. Speaker, I yield 4 minutes to the gentleman from 
Pennsylvania (Mr. Kanjorski), the distinguished ranking member of the 
Subcommittee on Capital Markets, Insurance and Government Sponsored 
Enterprises.
  Mr. KANJORSKI. Mr. Speaker, I speak in favor of the substitute, and 
it is for a very simple reason. There are three key elements developed 
in the substitute that I think are important but, more so than being 
important, I think they make the bill viable so we can get something 
done.
  The previous speaker just indicated that it is important to get 
something done, and it is. We had something that could have been done, 
and suddenly some of our friends have lobbed on things called tort 
reform, or revision, as I call it, changing the whole civil procedure 
and rights of victims in this country, and I think it caused 
unfairness.
  As my friend the gentleman from Texas (Mr. Bentsen) pointed out, it 
seems to me to strip out any benefit or any recovery for non-economic 
damages and leaves a major part of the victims of this country without 
coverage.
  Now, we are fighting here to make sure real estate can go on, 
insurance can be sold, business can conclude; and we are going to take 
care of large entities, big investments, because they are the targets 
for terrorism. But the small victims, the individual citizens who do 
not measure into the definition providing the limitations in this bill 
for victims' recovery, they get nothing or are restricted in their 
recovery. That is nonsensical.
  First of all, it is not going to go anywhere. I plead with the other 
side. This bill is not going to be the bill. The Senate and White House 
are in the process of writing another bill which is going to be sent 
over here, and we are either going to take it or not take it in the 
waning days of this session.
  We have an opportunity, by adopting the substitute that the gentleman 
from New York (Mr. LaFalce) has presented, to handle the three key 
issues. We do provide something the White House and the Senate has 
indicated they want at all times, deductibility, and the insurance 
industry did not say

[[Page 23372]]

that was bad. As a matter of fact, they were in favor of it, $5 billion 
or $10 billion deductibility.
  Two, doing nothing with these victims' rights or tort reform, it does 
not belong here. We can have another vehicle, another debate, another 
day, on that issue.
  Finally, to provide insurance coverage for everyone, I am led to 
understand the White House is in favor of that too, because we do not 
want cherry-picking, we do not want favoritism, and we do not want to 
lessen the base of those people who are going to stand behind the 
premiums to pay for the terrorist occasion that occurs before it gets 
to the taxpayers.
  I say that we have a reasonable substitute here that, if we pass it 
today, can be moved to the Senate very quickly and become the real 
vehicle for reinsurance protection for terrorism in the United States. 
Other than that, this is an academic, a political exercise, that will 
absolutely go nowhere, and we are going to end up, if we do want 
legislation, and I think it is vitally important, adopting the Senate 
provisions when they are finally passed.
  Mr. OXLEY. Mr. Speaker, I yield myself 30 seconds. I appreciate the 
gentleman's remarks.
  Let everyone understand something. The Senate and the White House 
apparently have been at this for quite some time and, literally, as we 
speak, they still have not got their act together. The House of 
Representatives is on the floor with legislation ready to pass in the 
next hour, so we have done our job.
  So you can talk all you want about what the Senate and White House 
are doing. We are getting the job done for the people of this country 
to make certain we have insurance coverage. I think we all should be 
very, very proud of that.
  Mr. Speaker I yield 3\1/2\ minutes to the gentleman from California 
(Mr. Cox), a valuable member of our committee.
  Mr. COX. Mr. Speaker, I thank the chairman for yielding me time. I 
particularly wish to thank the gentleman form Ohio (Chairman Oxley), 
the gentleman from Louisiana (Chairman Baker) and the gentleman from 
Wisconsin (Chairman Sensenbrenner) for putting together such an 
important bill for us to move quickly in response to the events of 
September 11.
  This legislation will ensure that victims are compensated after a 
terrorist loss if another terrorist attack or round of terrorist 
attacks should occur, quickly, fairly and fully. It will continue, we 
hope, the opportunity for people throughout our country to have 
insurance against terrorist risks by using the resources of the Federal 
Government, of the U.S. taxpayer, as a backstop. But the bill is 
carefully drafted so that it will not injure taxpayers in the process.
  It asks a great deal from the industry. Indeed, it asks the insurance 
industry to pay the money back, so that taxpayers will not be treated 
as if they are Osama bin Laden, as if they are culpable for the next 
round of terrorist attacks.
  The substitute, unfortunately, unravels these taxpayer protections. 
It asks far less of insurance companies than does the bill for which it 
would be substituting. It asks much more of taxpayers and much less of 
trial lawyers.
  The bill that was so carefully crafted in our committee established a 
Federal cause of action, to make sure that injured parties could 
quickly get to court, just as we have already done in this Congress 
with the victims of September 11, so they could get their money and not 
have to go through an endless legal process. The substitute simply 
repeals that protection so that the same-old-same-old will obtain, as 
it has for the victims of the 1993 World Trade Center bombing. Hundreds 
of plaintiffs have received, 8 years later, not one penny.
  It puts the burden on the consumer in another way. It mandates that 
consumers buy terrorist risk insurance, rather than offering consumers 
a choice of high-quality coverage at a reasonable cost. Once the 
Federal Government mandates that I must buy insurance, if I am the 
insurer and I know the customer has to buy it, I can offer a lousy 
product at a high price.
  We want to put the consumers in the driver's seat. The whole point is 
to make sure consumers are protected, and this substitute would repeal 
that consumer protection.
  It would also repeal the fair share rule that is in the bill, and 
that is the protection for the innocent. If you are innocent, if you 
are not a terrorist, you should not be treated as if you are one. Yet 
under the legislation that would be passed in the name of the 
substitute, the fair share rule would be repealed; and if you are named 
in a complaint, along with Osama bin Laden who is not before the court, 
then a jury in any State can say you pay the whole thing, even though 
you might be only one-half of 1 percent responsible.
  President Bush strongly supports the base legislation. His Secretary 
of the Treasury came to the Hill and asked that we include the 
litigation management provisions. It is our obligation and our 
responsibility to pass the bill that was produced by the Committee on 
Financial Services and by the Committee on the Judiciary staff, who 
helped us with the litigation management procedures.
  I urge strongly that we reject the substitute and its repeal of 
consumer protections, and I urge us rather rapidly to put this bill 
into law, the Oxley-Baker-Sensenbrenner base bill.
  Mr. LaFALCE. Mr. Speaker, I yield myself such time as I may consume 
to answer a few of the issues that have come up so far.
  First of all, what does the administration support or not support? I 
do not really think they support the basic thrust of the bill that was 
reported out of committee and is before us right now. Would they sign 
it? Yes, because it is not an unreasonable approach. And that is why I 
was willing to go forward with it, and that is why I am not offering an 
alternative with respect to the underlying approach.
  But it is not the best approach we could take. The administration, in 
their statement of administration policy, points that out. They really 
think that it could be an administrative nightmare. They do not like 
this concept of coming up with what is basically a loan that will then 
have to be paid back from dollar one. They do not like that at all.
  The insurance industry does not like it. In Monday's paper there was 
an op-ed piece by the chairman of the board of American International 
Group, and they really denounced this concept. In that op-ed piece they 
said we could handle a $10 billion deductible. That is what the 
chairman of AIG said in an op-ed piece in the Wall Street Journal on 
Monday. And you have no deductible.
  We make it easy. We just have a $5 billion deductible for the first 
year, going to a $10 billion the second year, which the insurance 
industry has said we could accept and we can handle. For the life of 
me, I do not know why you do not have that deductible provision.
  With respect to the restrictions on victims' compensation, now, yes, 
the administration does support that, and it supports it strongly. But 
that is like throwing red meat at them. They have wanted to limit 
victims' rights wherever and whenever they could. They want to do it 
with respect to a Patients' Bill of Rights, they want to do it with 
respect to product liability, they want to do it wherever and whenever 
they can. And it is unnecessary here and it is wrong and it is harmful.
  You come up with a euphemism. Your euphemism is case management. That 
is nonsense. This has nothing to do with case management. This has 
everything to do with denying victims their rights that they have been 
entitled to under the laws of the several States from the time that we 
created the Union to the present. You want to change it.
  There is something else, too. The insurance scheme we come up with, 
that is temporary. That is going to be for 1, 2 or 3 years. This 
restriction or elimination of victims' rights, that, you have made 
permanent.

                              {time}  1445

  So we have a temporary insurance scheme. But as I understand the 
Sensenbrenner approach, that goes in and

[[Page 23373]]

it is independent of the duration of time of the insurance scheme and 
it effectively takes away victims' rights.
  Now, with respect to mandatory coverage, reasonable people can differ 
on that issue. Let me be the first to admit that. But the fact of the 
matter is, right now virtually every property and casualty policy on a 
commercial line that I am aware of includes terrorism coverage. So we 
are not talking about something new. We are talking about basically, at 
least in 99 percent of the cases, continuing the status quo so that we 
can spread the cost so we would minimize it for the little guy, for the 
small businessperson.
  What small businessperson might need it? Well, since P and C includes 
business interruption insurance, the ice cream parlor at an airport 
might need it. The pizza store on Pine Avenue in Niagra Falls got the 
first economic injury disaster loan in the Nation. It was $10,000. But 
that business had closed its doors because of the terrorist attack in 
New York City, and that business could have used terrorism coverage 
immediately, et cetera.
  If we do not mandate it, in my judgment, and I could be wrong; this 
is a negotiable item. I understand that reasonable people can differ on 
this. But I think that if we do not include this, what we are saying 
is, if you are rich, if you are a big corporation, if you are a Fortune 
500, if you are a big real estate developer of a $1 billion building, 
you will be able to afford it and buy it and pass the cost along; but 
if you are a little businessman, a small businessman, a mom and pop 
businessman, you will just go without coverage; and the fact that your 
business in Pennsylvania was never expected to be impaired, that will 
have to go without coverage.
  Now, I would inquire of the chairman of the Committee on the 
Judiciary, did I make a mistake on the permanency of the gentleman's 
coverage?
  Mr. SENSENBRENNER. Mr. Speaker, will the gentleman yield?
  Mr. LaFALCE. I yield to the gentleman from Wisconsin.
  Mr. SENSENBRENNER. Absolutely, the gentleman made a mistake.
  Mr. LaFALCE. Okay. So it is contemporaneous.
  Mr. SENSENBRENNER. Mr. Speaker, it is contemporaneous with the bill. 
It is not here forever, but that is not the gentleman's only mistake; 
and I will ask the gentleman from Ohio for a little time to talk about 
those.
  Mr. LaFALCE. Mr. Speaker, I thank the gentleman, and I stand 
corrected on that issue.
  Mr. Speaker, I reserve the balance of my time.
  Mr. OXLEY. Mr. Speaker, I yield 2 minutes to the gentleman from 
Wisconsin (Mr. Sensenbrenner), the distinguished chairman of the 
Committee on the Judiciary.
  Mr. SENSENBRENNER. Mr. Speaker, let me blow away the smoke screen 
from the litigation management provisions of this bill.
  Number one, it does not take away anybody's right to sue or anybody's 
right to get compensation. If there is a cause of action and the 
Secretary triggers the provisions in this legislation, suits would have 
to be in one court, and that would prevent a race to courthouses all 
around the country to see which judge could have the trial quicker and 
whoever gets the quickest trial will end up exhausting all of the money 
that is available; and in courts where things move a little bit slower, 
if the money is exhausted, then the plaintiff would be out of luck.
  Now, secondly, what the bill does is it prohibits punitive damages, 
and this is exactly the way the Federal Tort Claims Act is. We are 
talking about giving a limited key to the United States Treasury, and 
we give the same protection to the taxpayer in this bill that we do 
when there is a tort claim against the Federal Government. We also 
limit attorneys' fees, also done in the Federal Tort Claims Act. So 
this is existing law for claims against the Federal Government. Since 
the Federal Government will be the ultimate reinsurer during this 
period of time, we provide the taxpayers the same protections and the 
plaintiffs the same limitations as we would if somebody got run over by 
a postal service van or ended up falling out the window of a Federal 
building because of a defect in construction there.
  Now, it seems to me that when we are dealing with terrorism, we have 
to look at the fact that people who buy terrorism insurance pay a 
premium that is based upon the risk that the insurance company is 
underwriting; and if they have unlimited liability when there is a 
terrorist act, then those premiums are going to be so sky high as to 
make that coverage either unaffordable or less affordable, particularly 
to small business operators.
  So, Mr. Speaker, these litigation management provisions protect the 
taxpayers, protect the ratepayers of people who have to buy terrorism 
coverage, and do not significantly limit the recovery that plaintiffs 
could get.
  Mr. LaFALCE. Mr. Speaker, I yield myself 3 minutes.
  A couple of issues were addressed by the distinguished chairman of 
the Committee on the Judiciary. First of all, he spoke about the 
consolidation of the claims into one court. That is something that is 
not unreasonable. As a matter of fact, it might be desirable to do 
something like that. But then the question is, would you obliterate 
portions of the laws of the many States?
  What the gentleman does in his bill is he says that there should be a 
Federal cause of action that shall be exclusive; and thereby he 
obliterates the laws of the States, with this exception: he says in 
applying the Federal cause of action, we shall look to the Federal 
cause of actions in the States, but not the law of the States with 
respect to damages. There, we shall just totally obliterate whatever 
the laws of those States are with respect to damages and impose our 
own. That is where we run into difficulties. Not that one cannot go 
into court, but we just severely eliminate or restrict.
  Now, we have proportionate liability as opposed to joint and several 
liability. There we are obliterating the laws of the about half of the 
States. We use the collateral damages as an offset; and, again, the 
States are split on that; but, again, that goes to the issue of how 
much economic damages an individual is able to collect. So it restricts 
their rights there.
  Now, with respect to punitive damages, the gentleman made the 
argument, and I think it has some resonance, that the Federal taxpayer 
ought not to pay for punitive damages. I can accept that. The gentleman 
made an analogy to the Federal Tort Claims Act where one cannot bring 
punitive damages against the Federal Government. Well, if the gentleman 
would have retained within the bill the Bentsen amendment, which would 
have precluded taxpayer money, that is, insurance under this scheme, 
then the gentleman's argument would be true. But it is incorrect 
because what the gentleman does is not just eliminate the ability to 
collect damages against the Federal Government under any scheme, but 
against anybody.
  The gentleman eliminates the basic cause of action or possibility of 
punitive damages, not just the insurance coverage for it. If the 
gentleman is willing to talk about that, we might be able to come to 
terms. If the gentleman's bill would do what the gentleman says it 
purports to do or wishes to do, we might be able to come to agreement.
  Mr. Speaker, I reserve the balance of my time.
  Mr. OXLEY. Mr. Speaker, I am pleased to yield 2 minutes to the 
gentlewoman from New York (Mrs. Kelly).
  Mrs. KELLY. Mr. Speaker, I thank the gentleman from Ohio for yielding 
me this time.
  The gentleman from New York has offered a well thought-out 
substitute. However, I believe we simply have different beliefs as to 
how the market should operate. I believe that we should allow the 
market to work out problems as much as possible.
  We are here today because the reality of a war on terrorism has 
knocked out the commercial property and casualty insurance industry and 
put them in a crisis. To stabilize that industry, we have drafted TRPA.
  Unfortunately, the Democratic substitute goes farther than I think we

[[Page 23374]]

should on a number of points. I want to focus on the provision in the 
substitute that would mandate that property and casualty companies 
provide terrorism coverage. ``Mandate.'' That is the operative word.
  It is our responsibility to ensure consumers have the options to 
choose from, not mandate that they are forced to comply with. Terrorism 
coverage will be more expensive to all businesses, but every business 
should be able to make the choice of whether they should pay for it and 
take the risk.
  Let us consider the cost of this mandate for things like museums, 
like schools, like hospitals. A hospital in California, a hospital in 
New York, most hospitals in this Nation operate on a very thin 
operating edge. They are on the very edge of solvency. A sudden 
increase in premiums could plunge them into oceans of red, resulting in 
closure. Schools. A flower shop in Buffalo, New York, ought to have the 
ability to make that choice to take that risk if they choose, not be 
mandated. A museum in Katonah, New York, should have the ability to 
choose. Only these entities know what their risk is. Only these 
entities know what their need is. These entities ought to not be 
mandated to share a risk they do not feel they have.
  Small business is the strongest bulldozer pushing our economy and its 
growth. We all know the margins between profitability and failure are 
razor thin with most small businesses. The cost of mandated coverage 
could mean the difference between more or less employment or helping 
these people keep their jobs. I urge that people defeat this Democratic 
substitute.
  This is just one of the many reasons the Democratic substitute should 
be defeated. There are others.
  Give our schools, hospitals and small business the choice and join 
with me in voting against the Democratic substitute.
  Mr. LaFALCE. Mr. Speaker, I yield 5 minutes to the gentleman from 
Pennsylvania (Mr. Kanjorski).
  Mr. KANJORSKI. Mr. Speaker, I almost hesitate rising. I know the 
gentlewoman that has just spoken is a fine member of our committee and, 
of course, she does not want to burden the homeowners and all of these 
small business people and everything.
  When we really stand back and analyze the argument, the argument is, 
there is a free lunch. Now, we are talking about insurance. There is no 
free lunch here. Insurance companies do not create money or assets. 
They merely gather premiums, analyze what the proportionate risk will 
be, the premiums cover that risk, and then they put out the money. If 
we reduce the number of premium payers, we reduce the base and for the 
remaining payers we accelerate the rates. It is as simple as that. It 
is so simple that most States in this Union require terrorism insurance 
as part of the main policy. We are not putting an extra burden on 
people here. I will tell my colleagues what burden we are putting on: 
if we do not have this premium base that spreads across the country for 
terrorism insurance, we are going to have a 1,000 percent increase in 
insurance in New York City and Los Angeles, the symbols of the country 
where terrorism would attack.
  Secondly, that is partially what the argument was originally in the 
committee and the Secretary of the Treasury made and the White House 
made when we started to put this bill together. They said, terrorism is 
something that attacks America's symbols, and it is unusual and 
impossible to identify liability; and maybe that is why the Federal 
Government should stand in the place of that risk so that premiums do 
not go crazy.
  But I hope our friends from the other side are not sending a message 
out to the American people that this substitute resolution is going to 
increase premiums. Quite the contrary. We are not going to have any 
effect on premiums, and premiums in this country on liability insurance 
all over are going to go up and go up precipitously. And they already 
have, for two reasons: not only September 11, but because the stock 
market has gone down precipitously, and the earnings generated and the 
income generated is no longer there, and now they have to increase the 
premiums to effect a pool to pay the risk liability.
  Mr. Speaker, sometimes we treat the American people when we talk on 
the floor like they are idiots, and I refer now back to the gentleman 
from California who made the point that they are really worried about 
the victims of the 1993 bombing because, gee, their cases are still in 
litigation.

                              {time}  1500

  It is unfortunate that it takes sometimes 7 or 8 years to get to 
litigation in this country. There is a solution: do away with the right 
of suing and collecting damages. From day one, they would not have had 
a cause of action under this piece of legislation. So yes, we would not 
tie up the courts or waste 7 or 8 years. The victim would not have a 
cause of action.
  I know that is not the intention the Members have. I know something 
more than that. I know the Republican party historically has understood 
the free market system and the basis of our civil process in this 
country.
  I cannot understand. Just after September 11, we are asking America, 
and I do not have yet a position, but we are asking to throw away the 
criminal code of the country, the protections of evidence, due process, 
and go to military tribunals in the criminal sense.
  Maybe I could justify in some areas that happening. Well, that tears 
up 200 years of precedent and procedure in this country in the criminal 
law area. Now they come on the floor and civilly they want to rip up 
200 years of precedent and history because we had this one attack, when 
in reality the insurance industry only came to the Congress and said, 
look, we do not know how to set the rates for liability insurance. They 
came to us and said, we do not know how to set the premium to create 
the pool that is necessary to cover potential disasters like this. We 
have no question that we can handle a $10 billion disaster without any 
problem, but we would like to have something between there and $100 
billion that we could not have a dysfunctional economy for a number of 
years; and after that, we can solve the problem.
  Everybody concedes that if the disaster is over $100 billion, the 
United States is going to be there, just as it has been for every other 
disaster in the country. I hope we do not let this argument fall to the 
level that we are misspeaking or misrepresenting what the facts are and 
what the true information is.
  Neither this side of the aisle nor that side of the aisle wants to 
see an increase in insurance premiums. That has already happened; it 
has happened because of the economy, the stock market, and September 
11.
  All we are trying to do is provide a vehicle that this Congress can 
pass within the next 10 days to provide a stability for the American 
economy to help come out of the recession and not go further into 
recession.
  Everybody recognizes, all the free marketeers of the insurance 
industry, that there is a role of government to be played here. We are 
trying to provide that role with the least interference to the private 
sector.
  Mr. OXLEY. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from Florida (Mr. Weldon).
  Mr. WELDON of Florida. Mr. Speaker, I thank the chairman for yielding 
time to me and commend him on the skill he used in bringing this very 
complex issue to the floor. As I understand it, the other body is 
deeply mired in controversy and struggling on this.
  I also want to compliment the subcommittee chairman, the gentleman 
from Louisiana (Mr. Baker), for his work, and particularly the staff.
  Mr. Speaker, this is an extremely important issue, and it is very, 
very important that we pass this bill. The economic implications if we 
do not get a bill signed into law before the first of the year could be 
huge.
  I want to just address the issue of the substitute which is at hand 
right now. I certainly commend the gentleman from New York (Mr. 
LaFalce) for his thoughtful attempt to work on this. It has, obviously, 
some of the same features we have in our underlying bill.
  However, the way it is currently drafted, I think it could force some

[[Page 23375]]

small businesses to pay higher premiums. It could erode the current 
State regulation system. Very importantly, I think it would potentially 
discourage insurance companies from using reinsurance, and I think that 
would be a very bad feature of the substitute.
  Mr. Speaker, I believe the sentiments expressed by the chairman of 
the Committee on the Judiciary, the gentleman from Wisconsin (Mr. 
Sensenbrenner), are very, very well taken. I think it really does have 
the potential to encourage, in the event of another disaster, a rush to 
the courthouse; that there could be winners and losers, whereas I think 
the underlying bill clearly avoids that sort of thing.
  I just want to underscore, if people want to sue Osama bin Laden, 
there are no limits. People can go after Osama bin Laden and his assets 
and take him to the cleaners, and the attorneys could walk away with 50 
or 60 percent of the settlement, if that is in the contingency fee 
agreement they have reached.
  This is about, what are the U.S. taxpayers going to pay? I think this 
is a very well thought-out bill. Vote no on the substitute and yes on 
the underlying bill.


                Announcement by the Speaker pro tempore

  The SPEAKER pro tempore (Mr. Nethercutt). Several remarks by Members 
during the course of this debate have prompted the Chair to remind 
Members that it is not in order in a debate to characterize Senate 
action or inaction. This prohibition includes debate that specifically 
urges the Senate to take certain action.


                         Parliamentary Inquiry

  Mr. WELDON of Florida. Mr. Speaker, I have a parliamentary inquiry.
  The SPEAKER pro tempore. The gentleman will state his inquiry.
  Mr. WELDON of Florida. Mr. Speaker, is it correct that no matter how 
much inaction there is in the other body, we still cannot talk about 
it?
  The SPEAKER pro tempore. The gentleman fails to state a parliamentary 
inquiry.
  Mr. OXLEY. Mr. Speaker, I yield 4 minutes to the gentleman from 
Louisiana (Mr. Baker), the chairman of the subcommittee.
  Mr. BAKER. Mr. Speaker, I thank the gentleman for yielding time to 
me.
  Mr. Speaker, I think it is important at the close of debate on this 
important substitute to go through quickly the elements that are of 
concern to those of us looking for appropriate resolution on the 
question of terrorism insurance.
  First, mandatory coverage. Think about it for a moment. The property 
and casualty premium will now include an undisclosed terrorism premium.
  How do we know how that pricing was done? How will we make a judgment 
as to whether or not it is appropriate, given the risk we think we 
perceive to our business interests from a terrorist attack?
  Under H.R. 3210, we have a separate pricing of the terrorism premium 
so we can see it off to the side, as against the property and casualty 
premium, which we can compare with last year's. And so we clearly 
identify; we do not mandate. They can shop, the taxpayer can make the 
decision, the consumer can make the decision, Where do I go, and 
further, Do I really need terrorism insurance?
  Second, with regard to the first $5 billion worth of loss, there has 
been some suggestion that there is no deductible, no payment by the 
industry under our approach, and that their approach, having a $5 
billion deductible is somehow going to fix that problem.
  There is no mechanism in the bill for distributing that $5 billion 
worth of loss across the industry. So if there are two, three, four, 
five big companies who take the $5 billion hit, they absorb that hit 
unfairly against all other companies. There is no mechanism to 
distribute the loss across all companies. Translation: small businesses 
get hit.
  They attempt to spread the risk, however, by having a complicated 
process that equals 7 percent of gross premium collected. When we read 
through it and understand what they are trying to do here, they do not 
recognize that a direct insurance company who insures our business 
turns around and lays off part of that risk to the reinsurance 
industry. When we lay off that risk, we have to give them the premium. 
But we are going to set the criteria by which they get taxpayer 
assistance on 7 percent of the total premium.
  To translate that: small business gets nailed. This is not a good 
approach. It is not a sound approach. Under H.R. 3210, taxpayers are 
protected first, small businesses are protected second. We help the 
claimants by making sure that liquidity is provided to the insurance 
company to help the victims of a heinous act in a timely and prompt 
manner. It is the only way in which we should proceed.
  Finally, with regard to the contentious issue of liability reform, it 
really is very simple: we are using taxpayer money to help avert an 
economic calamity as the result of an act of terrorism. The modest 
reforms contained in this bill limit the amount of money that will go 
to the trial lawyer.
  If we are trying to help people in times of real duress and crisis, 
is that an unreasonable thing to do? Should we not make sure that 
taxpayer dollars get to the pocket to which they were intended? I think 
it highly appropriate to do so.
  If Members want a bill that says that we are going to respond to a 
crisis without creating unnecessary bureaucracy; we are going to do it 
quickly; we are going to make sure if we extend the credit of taxpayer 
dollars, that they get the money back; we are going to give the 
Secretary of the Treasury the ability to administer the program to make 
sure we do not disrupt a fragile economy by saying, If this does not 
make sense, Secretary of the Treasury, you have the right to administer 
to the best economic interests of the citizens of this country and 
collect the repayment later, but collect it you must.
  Now, if Members want a bill that will ensure that big insurance 
companies, as opposed to small, get helped; that trial lawyers get more 
money out of the taxpayer; and that there is no guarantee of taxpayer 
repayment, the substitute is the plan.
  But if Members want to help victims of heinous acts of violence in a 
timely, prompt, professional, accountable manner in which taxpayer 
resources will be repaid, in which only those who need it receive the 
assistance, the underlying H.R. 3210 is a piece of work that is not 
perfect, but it is good. We will be back next year to change it. I am 
sure the market will tell us the changes we need to make. But failing 
to act today is the most irresponsible act one could engage in.
  Mr. LaFALCE. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, let me just make a few points. First of all, I very much 
want a bill. I think it is important. I have attempted to work in good 
faith with the members of the opposition, with the administration, to 
come up with a good bill. I look forward to working in good faith in 
the days ahead. I hope it will be the days ahead, rather than the weeks 
ahead, that we will be able to come to an accord.
  Secondly, I do think that there should be a deductible, and there is 
not one in the gentleman's bill; there is in mine. I think the 
gentleman from Louisiana (Mr. Baker) inadvertently made a mistake. We 
do have an assessment mechanism. No company would have to pay a 
deductible above 7 percent of net premiums, and we use basically the 
same mechanism that they use. That certainly is our intent.
  With respect to the mandatory coverage, maybe I made a political 
mistake in offering that, but I think that substantively I am right. 
Why? Because I cannot get over the 8 years that I chaired the Committee 
on Small Business. I cannot get over the 4 to 6 years that I was 
chairman of a small business subcommittee, when I had countless 
hearings on the problems that small business had with insurance.
  Take product liability insurance. We had not an unavailability 
problem; we had an unaffordability problem. There were periods when 
product liability insurance was so unaffordable that it was tantamount 
to unavailable. Therefore, the only way we can ensure that terrorism 
insurance would not become so

[[Page 23376]]

unconscionably, astronomically unaffordable for the small business men 
and women of America is to make sure that we continue in the future 
what we have experienced in the past, that is, that terrorism coverage 
has been part of all P&C policies. That is the way the world has worked 
historically; we simply want to continue that. So I think that 
substantively we ought to wind up there.
  On the issue of victims' compensation, we have to resolve this. There 
will be no bill if we go forward with the gentleman's provisions. But 
there is a case for consolidation. There is a case to be made that the 
taxpayers should not pay for punitive damages. If we could come to an 
accord there, we can do what is necessary. We can remove that Damoclean 
sword that is hanging over the head of the economy.
  Mr. OXLEY. Mr. Speaker, I yield myself such time as I may consume.
  The SPEAKER pro tempore. The gentleman is recognized for the 
remaining 3\1/2\ minutes.
  Mr. OXLEY. Mr. Speaker, this has been a very good debate, and first 
of all, let me thank members of our committee on both sides of the 
aisle and their respective staffs for what I think will turn out to be 
a historic legislative product that we have been able to put together.
  The chairman of the subcommittee, the gentleman from Louisiana (Mr. 
Baker), has done yeoman's work in this area and deserves a great deal 
of credit. My friend, the gentleman from New York (Mr. LaFalce), as 
well as his ranking member, Mr. Kanjorski, have also performed 
admirably.
  Mr. Speaker, this is a historic moment for a new committee. We have 
faced issues like anti-money laundering and attended a bill-signing 
ceremony at the White House just 3 weeks ago. Now we come to this 
difficult issue, the reinsurance issue, something we did not ask for, 
something that happened to America after September 11; but this 
committee stepped up. We were asked by the Speaker to produce 
legislation, and I am very proud of the product that we put together 
over a difficult issue, and it is complicated.

                              {time}  1515

  I am particularly pleased that the substitute that the gentleman from 
New York (Mr. LaFalce) offered has so much in common with the 
underlying bill. The post-event assessment and surcharge systems are 
largely the same. Both bills have a $100 million lower trigger, and the 
idea to protect the taxpayers is clearly inherent in both pieces of 
legislation.
  I would, however, disagree with my friend from New York in regard to 
the statement he made on the deductible. The summary of the substitute 
provided to the Committee on Rules says that this 7 percent per company 
deductible is based on net premiums. That is simply not true. The 
substitute language actually bases the 7 percent deductible on 
aggregate premiums. This, of course, penalizes insurers for using 
reinsurance.
  We do not need to be in the business of penalizing insurance 
companies to provide reinsurance. That is how the system works. As a 
matter of fact, if my colleagues can imagine a world on September 11 
where domestic insurance companies did have not the ability to 
reinsure, imagine what kind of losses the industry would have taken and 
imagine what that would have brought to us today.
  Indeed, this bill ultimately, when passed, will encourage the growth 
of reinsurance, and it may be early on that these companies, these 
domestic companies, will essentially have to reinsure themselves. They 
cannot go offshore, but I guarantee my colleagues that it will not be 
long before the reinsurance market offshore, the reinsurers offshore, 
have to go into the largest market in the world. They cannot afford to 
stay on the sidelines.
  It is one thing on September 12 to announce that they are not going 
to provide reinsurance coverage for terrorism, but my guess is the 
American economy, the American people, the American insurance 
companies, will find a way to provide the kind of coverage for their 
consumers and their customers and their insurers. When they do that, 
the reinsurance folks will be running back to try to get back in this 
game, and that is what this bill is all about.
  This is a temporary bill. This is not forever. Even the legal reforms 
are not forever. They are part of this legislation. So let us defeat 
the substitute, let us vote for final passage, and let us go on forward 
to get legislation for the American people.
  Mr. CONYERS. Mr. Speaker, I rise in strong support of the substitute 
and in opposition to the base bill. I do so because the legislation was 
hijacked by the Rules Committee, which turned a bipartisan insurance 
relief bill into yet another vehicle to enact a one-sided ``tort 
reform'' agenda.
  First and foremost, the base text totally eliminates punitive 
damages. If this passes, Congress would be saying to the future victims 
of terrorism that the most outrageous acts of gross negligence or 
intentional misconduct that lead to an act of terrorism are totally 
immune from punitive damages. Thus, if a baggage screening firm hires a 
known terrorist who allows a weapon to slip on board a plane, this bill 
would protect that company from liability.
  The base bill also federalizes each and every action involving 
terrorism, throwing more than 200 years of respect for federalism out 
the window. Even worse, the liability provisions bear little 
relationship to the issue of insurance. As a matter of fact, they would 
apply to cases where the negligent party may have no insurance coverage 
whatsoever. The bill even takes away all judicial review relating to 
the bureaucratic decision as to whether terrorism caused the injury, an 
unprecedented and very likely unconstitutional limitation on victims' 
rights.
  The underlying bill also would limit the ability of the victims of 
terrorism to collect non-economic damages. This says to innocent 
victims that damages from loss of consortium can be ignored and damages 
for victims who lose a limb or are forced to bear excruciating pain for 
the remainder of their lives are not as important as lost wages. Why 
Congress would want to prevent a grieving wife from obtaining monetary 
relief is beyond me, but that is exactly what this bill does.
  The bill goes on and on--comprising a veritable wish list of 
liability limitations. It mandates collateral source offsets, forcing 
victims to choose between seeking money from charities and pursuing a 
grossly negligent party in court. It caps attorneys' fees without 
providing any comparable limitation on defendant's fees. Amazingly, the 
legislation would criminalize the fee cap, subjecting lawyers to jail 
time. The bill also eliminates pre-judgment interest, which takes away 
any incentive for negligent parties to reach pre-trial settlements. All 
of these harmful provisions are being proposed in the complete absence 
of hearings or any committee consideration.
  If enacted, the tort provisions would constitute the most radical and 
one-sided liability limitations ever. I urge the Members to vote 
``yes'' on the substitute, and ``no'' on final passage.

  Liability Limitation Provisions in H.R. 3210, the ``Terrorism Risk 
                            Protection Act''

  (Prepared by the Democratic Staff of the House Judiciary Committee)

       Section 15 of H.R. 3210, the ``Terrorism Risk Protection 
     Act,'' proposes new and unnecessary tort reforms that would 
     be harmful to victims of terrorism. Specifically, the bill 
     federalizes all terrorism liability cases, prohibits judicial 
     review of decisions to federalize such cases, eliminates 
     punitive damages, limits the amount of non-economic damages 
     for which defendants (not just insurers or reinsurers) are 
     liable, mandates collateral source offsets, and imposes caps 
     on attorneys' fees. The following is a section-by-section of 
     H.R. 3210, Section 15.
       Section 15. Litigation Management.
       Subsection (a). Federal Cause of Action for Claims Relating 
     to Terrorist Acts.
       Section 15(a)(1)--In General: provides that, if the 
     Secretary of the Treasury decides there has been one or more 
     acts of terrorism, ``there shall exist a Federal cause of 
     action, which, except as provided in subsection (b), shall be 
     the exclusive remedy for claims arising out of, relating to, 
     or resulting from such acts of terrorism.'' This is a 
     broadly-written provision that would limit victims' rights in 
     every conceivable civil action--state or Federal--involving 
     terrorism, even if the insurer is not a party to the action. 
     In addition, the critical term ``act of terrorism'' is 
     undefined within the text of the legislation and thus grants 
     too much latitude to the Secretary to deem an event an ``act 
     of terrorism'' and allow wrongdoers to benefit from this 
     section.
       Section 15(a)(2)--Effect of Determination: provides that 
     the Secretary's determinations under section 15(a)(1) shall 
     not be subject to judicial review and shall take effect upon 
     publication in the Federal Register. This

[[Page 23377]]

     provision raises two significant concerns. First, it is 
     likely unconstitutional because the Constitution has been 
     held to provide for judicial review of actions by the 
     Executive. Second, denying judicial review of the Secretary's 
     decisions would grant the Secretary wide latitude to make 
     determinations about what events would constitute ``acts of 
     terrorism,'' such that--as before--a hoax or practical joke 
     could be designated an ``act of terrorism.''
       Section 15(a)(3)--Substantive Law: states that an action 
     under this section is governed by the law and choice of law 
     principles of the state in which the terrorism occurred.
       Section 15(a)(4)--Jurisdiction: provides that the Judicial 
     Panel on Multi-district Litigation will designate one court 
     and that court will have exclusive jurisdiction on all cases 
     arising out of a particular terrorist event.
       Section 15(a)(5)--Limits on Damages: provides a number of 
     limits on damages in actions brought for damages in 
     connection with any type of civil action related to 
     terrorism, not just those pertaining to commercial property 
     and casualty insurance. These limitations on their face apply 
     in every conceivable action--state or Federal--involving 
     terrorism. In fact, the current version of the bill is worse 
     than that reported by the Financial Services Committee 
     because the earlier bill limited damages only in cases 
     involving commercial property or casualty insurance; the 
     current bill applies to any action related to terrorism, 
     regardless of whether an insurance claim is involved.
       Section 15(a)(5)(A): would prohibit punitive damages and 
     pre-judgment interest. Punitive damages are monetary damages 
     awarded to plaintiffs in civil actions when a defendant's 
     conduct has been found to flagrantly violate a plaintiff's 
     rights. The standard for awarding punitive damages is set at 
     the state level, but they are generally allowed only in cases 
     of wanton, willful, reckless or malicious conduct. These 
     damages are used to deter and punish particularly egregious 
     conduct. Eliminating punitive damages totally undermines the 
     deterrent and punishment function of the tort law. The threat 
     of meaningful punitive damages is a major deterrent to 
     wrongdoing, and eliminating punitive damages would severely 
     undercut their deterrent value since reckless or malicious 
     defendants could find it more cost effective to continue 
     their callous behavior and risk paying small punitive damage 
     awards. This means baggage screening firms would be protected 
     from liability if they hired incompetent employees or 
     deliberately failed to check for weapons and a terrorist act 
     resulted.
       Pre-judgment interest liability is an added incentive to 
     move the judicial process along because a delay would result 
     in a penalty of added interest to the judgment. Without the 
     threat of added interest payments, attorneys for defendants 
     may be prone to delay proceedings because the real dollar 
     value of a judgment amount would be reduced, making the 
     judgment the same no matter how long the process. Limiting 
     interest would unfairly affect the judgment award collected 
     by the victims and leave them vulnerable to a delayed 
     judicial process.
       Section 15(a)(5)(B): provides that a defendant will only be 
     liable for non-economic damages in direct proportion to the 
     percentage of the defendant's responsibility for the victim's 
     harm and prohibits plaintiffs from recovering such non-
     economic damages unless the plaintiff suffered physical harm. 
     This would alter common law rule of joint and several 
     liability between defendants. Under the traditional rule, 
     where more than one defendant is found liable, each defendant 
     is held liable for the full amount of the damages. The 
     justification for this is that it is better that a wrongdoer 
     who can afford to do so pay more than its share, rather than 
     an innocent victim obtain less than full recovery. Also, a 
     defendant who pays more than its share of damages can seek 
     contribution from the other defendants. By holding each 
     defendant responsible only for its percentage of 
     responsibility, this section would supersede state law by 
     eliminating joint and several liability for non-economic 
     damages in these actions. Also, the prohibition on non-
     economic damages unless physical harm is suffered raises 
     significant concerns. Essentially, a spouse who suffers loss 
     of consortium could not recover any non-economic damages. 
     This is an unprecedented limitation on victims' rights.
       In addition, this provision would shift non-economic costs 
     from wrongdoers to victims and discriminate against groups 
     less likely to establish significant economic damages, such 
     as women, children, minorities, seniors, and the poor. It is 
     unconscionable to put more value on the loss of a job than on 
     the loss of a limb, loss of the ability to have children, 
     disfigurement, or other forms of non-economic harms. Also, 
     eliminating joint and several liability for non-economic 
     harms would discourage settlements and thus increase case 
     loads and litigation costs.
       Section 15(a)(6)--Collateral Sources: requires that, for 
     compensation of loss related to terrorism, a plaintiff's 
     recovery must be offset by any funds received pursuant to any 
     emergency or disaster relief program or any other collateral 
     source. There are two problems with this provision. First, a 
     reduction of a victim's award due to collateral source 
     compensation would result in wrongdoers escaping their 
     responsibility. This legislation subtracts any other 
     potential sources of recovery the victim may have from any 
     damages the wrongdoer should pay. Losses caused by negligence 
     or wrongdoing would be shifted from liable defendants to the 
     government, private insurers, or disaster relief 
     organizations who made the ``collateral source'' payment. 
     Second, the provision is too overreaching. The effect would 
     be to require any funding given to the plaintiff, whether it 
     be from health insurance payment or funds from a voluntary 
     organization, be used to offset relief payments made by 
     culpable defendants. Under this provision, funds received by 
     a victim from the Red Cross must be used to offset relief 
     payments and reduce a wrongdoer's liability.
       Section 15(a)(7)--Attorney Fees: provides that attorneys' 
     fees shall be limited to twenty percent of either the damages 
     ordered by a court or any court-approved settlement under 
     this section. Any attorney who charges or receives fees in 
     excess of twenty percent shall be fined not more than $2,000, 
     imprisoned not more than on year, or both. Fee caps, which 
     apply only to victims, result in less access to justice for 
     lower-income populations. A payment ceiling or fee cap limits 
     the economic incentive for attorneys to take on complex or 
     difficult-to-prove claims under the contingency fee system; 
     in turn, this would make it much more difficult for lower-
     income populations to secure good representation. Moreover, 
     the threat of imprisonment is without precedent and could 
     deter attorneys from providing assistance.
       Section 15(b)--Exclusion: provides that nothing in section 
     15 shall limit the liability of a person who attempts to 
     commit, commits, participates, or is engaged in a conspiracy 
     to commit an act of terrorism.
       Section 15(c)--Right of Subrogation: provides that the 
     United States has the right of subrogation with respect to 
     any claim it paid under this section.
       Section 15(d)--Relationship to Other Laws: states that 
     nothing in section 15 shall affect either any party's 
     contractual right to arbitrate a dispute, or any provision of 
     the Air Transportation Safety and System Stabilization Act of 
     2001 (Pub. L. No. 107-42).
       Section 15(e)--Satisfaction of Judgments from Frozen Assets 
     of Terrorists, Terrorist Organizations, and State Sponsors of 
     Terrorism
       Section 15(e)(1)--In General: provides that, in any case in 
     which a person obtains a judgment against a terrorist party, 
     the frozen assets of that terrorist party or of any agency or 
     instrumentality of that party shall be available for 
     satisfaction of the judgment. This provision removes foreign 
     sovereign immunity and is designed to ensure that victims of 
     terrorism receive the compensation they are owed, even if the 
     defendant is a foreign state.
       Section 15(e)(2)--Presidential Waiver: states that the 
     President, on an asset-by-asset basis, can waive the 
     requirements of subsection 15(e)(1) for any property subject 
     to the Vienna Convention on Diplomatic Relations or the 
     Vienna Convention on Consular Relations. This waiver 
     authority vitiates the protections for victims of state-
     sponsored terrorism provided for in subsection 15(e)(1). If 
     the President can waive unilaterally any judgment for a 
     victim, then victims could easily receive no compensation for 
     their claims.

  Mr. BAKER. Mr. Speaker, let me begin by aligning myself with the 
statement of Chairman Oxley regarding the LaFalce substitute. The 
LaFalce substitute has many of the same components of H.R. 3210 because 
H.R. 3210 represents, in large part, the cooperative efforts of 
Chairman Oxley, Ranking Member LaFalce, Mr. Kanjorski and me. However, 
the differences in the substitute from H.R. 3210 demonstrate exactly 
where Chairman Oxley and I diverge from our Democratic colleagues. The 
LaFalce substitute includes provisions that we simply would not agree 
to, which is why I urge my colleagues to vote ``no.''
  First, the amendment is anti-consumer in that it mandates commercial 
property and casualty insurers to include terrorism risk coverage on 
all policies on the same terms and amounts as their other commercial 
coverage. This precludes businesses from creating risk management 
solutions that meet their particular needs. For instance, many small 
businesses may not feel that their size, location or exposure merits 
the additional cost of terrorism insurance--but they would have to pay 
for it regardless under the LaFalce proposal. By further example, the 
LaFalce plan would not permit a business to buy only standard 
commercial property and casualty coverage from one insurer and 
terrorism coverage from another if there is a pricing advantage in 
doing so. The plan also denies the insured the ability to self-insure 
for a certain amount of terrorism risk or to purchase multiple layers 
of terrorism coverage.
  In addition to the problems that mandated coverage creates for 
consumers, it also unnecessarily preempts state law on form regulation 
by having the Federal government mandate the terms and conditions of 
coverage.

[[Page 23378]]

The certainty provided by the exposure limits in our Bill and the 
assessment system in our Bill provides the proper incentives for 
commercial property and casualty insurers to provide terrorism risk 
coverage.
  Another problem with the LaFalce substitute is that the insurance 
mechanism that it creates does not effectively spread risk, prevent 
gaming, provide adequate protections to small insurers, or encourage 
the spreading of risk through reinsurance. While both Bills require 
that industry pay the first $5 billion in losses due to terrorism in 
the first year and the first $10 billion in subsequent years, the 
LaFalce plan does not effectively spread this risk throughout the 
industry. By having a $5 billion deductible with no provision of how 
these losses are calculated or paid, his plan competitively 
disadvantages small insurance companies who would not be able to absorb 
the tremendous losses that would be incurred by those small insurers 
before the industry assistance kicks in.
  To try to respond to the small insurer disadvantage, the LaFalce plan 
has an individual insurance company exposure limit of 7 percent of 
gross premium--not net premium as stated in his summary. This is a very 
important point in that gross premium numbers do not give credit to the 
insurer for the reinsurance that it has purchased. Thus, before federal 
assistance kicks in, the insurer would have to suffer losses equaling 
over 7 percent of its gross premium even though it has already spread 
much of the risk that it cannot cover to reinsurers. The result: 
insurers are not able to write as much insurance and assistance will 
not kick in for them until they have already been put into financial 
duress.
  Additionally, the LaFalce plan encourages gaming of the system. 
Insurers will delay claims and loss reports for months or years so that 
they occur after the industry deductible is reached. That way, they 
avoid having to absorb any of the losses themselves. Our plan does 
provide first dollar coverage once the triggers are met to prevent such 
gaming; and while the LaFalce plan does not require the industry to 
retain any losses after his proposal starts to provide assistance, our 
Bill always requires that the insurer absorb at least 10 percent of the 
losses at all times, regardless of federal assistance.
  Finally, the LaFalce substitute strips out the sovereign immunity 
provisions of H.R. 3210. Acts of terrorism give rise to very unique 
sets of facts and a complexity of interested parties that is uncommon 
in tort law. In the administration of the program established by this 
Act, it is essential that there is consistency and timely response. 
Multiple state forums awarding immense damage awards underwritten by 
federally supported insurance companies would result in a patchwork of 
inconsistent state court decisions all over the country that would 
impede the effective and fair implementation of this program. The lack 
of limited federal forums for claims would result in the kinds of 
tragic delays in the prompt compensation of victims as we have seen in 
other mass tort cases, such as the 1993 WTC bombing where cases are 
just now coming to trial.
  Equally as important are the prohibitions on punitive damage awards 
and joint and several liability for losses caused by terrorist attacks. 
Acts of terrorism differ fundamentally from other losses that the tort 
system is designed to deal with in that the overwhelmingly culpable 
party, the terrorists, will either not be before the court or their 
assets will be limited or unreachable. To subject effected parties of a 
terrorism attack and the United States taxpayer to punitive damage 
awards for the acts of suicidal and maniacal terrorists is a poor 
allocation of limited resources and simply unfair to the group of 
victims as a whole. Furthermore, to suggest that an effected party that 
is found to be 1 percent at fault for a negligent omission of some 
minor sort could be held responsible for 100 percent of damages due to 
a terrorist attack is beyond reason.
  I strongly urge a ``no'' vote on this amendment.
  The SPEAKER pro tempore (Mr. Nethercutt). All time for debate on the 
amendment in the nature of a substitute has expired.
  Pursuant to House Resolution 297, the previous question is ordered on 
the bill, as amended, and on the amendment offered by the gentleman 
from New York (Mr. LaFalce).
  The question is on the amendment in the nature of a substitute 
offered by the gentleman from New York (Mr. LaFalce).
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. LaFALCE. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  The vote was taken by electronic device, and there were--yeas 197, 
nays 222, not voting 14, as follows:

                             [Roll No. 462]

                               YEAS--197

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldacci
     Baldwin
     Barcia
     Barrett
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Boswell
     Boucher
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (OK)
     Clay
     Clayton
     Clement
     Clyburn
     Condit
     Conyers
     Coyne
     Crowley
     Cummings
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Frank
     Gephardt
     Gilman
     Gonzalez
     Gordon
     Graham
     Green (TX)
     Gutierrez
     Hall (OH)
     Hastings (FL)
     Hill
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Istook
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (IL)
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind (WI)
     Kucinich
     LaFalce
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     LaTourette
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Luther
     Lynch
     Maloney (CT)
     Maloney (NY)
     Markey
     Mascara
     Matheson
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Mink
     Mollohan
     Moore
     Morella
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Payne
     Pelosi
     Phelps
     Pomeroy
     Price (NC)
     Rahall
     Reyes
     Rivers
     Rodriguez
     Roemer
     Ross
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Schiff
     Scott
     Serrano
     Sherman
     Shows
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Terry
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Visclosky
     Waters
     Watson (CA)
     Watt (NC)
     Waxman
     Weiner
     Woolsey
     Wu
     Wynn

                               NAYS--222

     Aderholt
     Akin
     Armey
     Bachus
     Baker
     Ballenger
     Barr
     Bartlett
     Barton
     Bass
     Bereuter
     Biggert
     Bilirakis
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boozman
     Boyd
     Brady (TX)
     Brown (SC)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Castle
     Chabot
     Coble
     Collins
     Combest
     Costello
     Cox
     Cramer
     Crane
     Crenshaw
     Culberson
     Cunningham
     Davis, Jo Ann
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Dooley
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ferguson
     Flake
     Fletcher
     Foley
     Forbes
     Fossella
     Frelinghuysen
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Goode
     Goodlatte
     Goss
     Granger
     Graves
     Green (WI)
     Greenwood
     Grucci
     Gutknecht
     Hall (TX)
     Hansen
     Harman
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hilleary
     Hobson
     Hoekstra
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Isakson
     Issa
     Jenkins
     John
     Johnson (CT)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     Kerns
     King (NY)
     Kingston
     Kirk
     Kleczka
     Knollenberg
     Kolbe
     LaHood
     Largent
     Larson (CT)
     Latham
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Manzullo
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Miller, Dan
     Miller, Gary
     Miller, Jeff
     Moran (KS)
     Moran (VA)
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Paul
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Pombo
     Portman
     Pryce (OH)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reynolds
     Riley
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schaffer
     Schrock

[[Page 23379]]


     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Stark
     Stearns
     Stenholm
     Stump
     Sununu
     Sweeney
     Tancredo
     Tauzin
     Taylor (NC)
     Thomas
     Thornberry
     Thune
     Tiahrt
     Tiberi
     Toomey
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins (OK)
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Young (AK)
     Young (FL)

                             NOT VOTING--14

     Carson (IN)
     Chambliss
     Cooksey
     Cubin
     Davis, Tom
     DeFazio
     Ford
     Frost
     Miller, George
     Quinn
     Rangel
     Rothman
     Wexler
     Wolf

                              {time}  1541

  Messrs. SIMMONS, THOMAS, SMITH of Texas, GUTKNECHT, and Ms. HARMAN 
changed their vote from ``yea'' to ``nay.''
  Messrs. BERRY, OWENS, and PHELPS changed their vote from ``nay'' to 
``yea.''
  So the amendment in the nature of a substitute was rejected.
  The result of the vote was announced as above recorded.
  Stated against.
  Mr. TOM DAVIS of Virginia. Mr. Speaker, I would like the record to 
show that I was right at the door when the vote closed. My colleague, 
the gentleman from Virginia (Mr. Wolf), and I were in a meeting with 
the Director of OMB in the Cannon office building. Had I been present, 
I would have voted no.
  Mr. WOLF. Mr. Speaker, I too was in the meeting with the Director of 
OMB. Had I been present, I would have voted no.
  The SPEAKER pro tempore (Mr. Nethercutt). The question is on the 
engrossment and third reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


               Motion to Recommit Offered by Mr. LaFalce

  Mr. LaFALCE. Mr. Speaker, I offer a motion to recommit.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. LaFALCE. Yes, I am opposed, and the National Taxpayers Union is 
opposed to the bill in its current form.
  The SPEAKER pro tempore. The Clerk will report the motion.
  The Clerk read as follows:
       Mr. LaFalce moves to recommit the bill H.R. 3210 to the 
     Committee on Financial Service with instructions to report 
     the same back to the House forthwith with the following 
     amendments:
       Strike section 15 of the bill (relating to litigation 
     management).
       At the end of section 6 of the bill (relating to federal 
     cost-sharing for commercial insurers), add the following new 
     subsection:
       (g) Requirement.--Notwithstanding any other provision of 
     this Act, the Secretary may not provide financial assistance 
     under this section to any commercial insurer unless the 
     commercial insurer provides to the Secretary such assurances, 
     as the Secretary shall by regulation require, that such 
     insurance company will comply with the regulations issued 
     pursuant to section 7(i).
       At the end of section 7 of the bill (relating to 
     assessments), add the following new subsection:
       (i) Prohibition of Pass-Through.--The Secretary shall, by 
     regulation, prohibit any commercial insurer from including in 
     any premiums or other charges for property and casualty 
     insurance coverage any amounts to cover any costs 
     attributable to any assessment under this section (including 
     the payment of any such assessment and costs of financing 
     such payment).

                              {time}  1545

  Mr. LaFALCE (during the reading). Mr. Speaker, I ask unanimous 
consent that the motion to recommit be considered as read and printed 
in the Record.
  The SPEAKER pro tempore (Mr. Nethercutt). Is there objection to the 
request of the gentleman from New York?
  There was no objection.
  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
York (Mr. LaFalce) is recognized for 5 minutes in support of his motion 
to recommit.
  Mr. LaFALCE. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, let me make the following points. The National Taxpayers 
Union not only requests a ``no'' vote on final passage of the bill, 
they will be scoring final passage of the bill as it stands. I just 
want to make Members aware of that.
  Second, what is in the motion to recommit takes the House bill as it 
is right now, two changes, one, a deletion. It deletes all of the tort 
provisions. Number two, an addition. It would prevent the insurance 
industry from passing through the costs of repaying the Federal 
assistance granted under the bill to its customers. Those are the only 
two changes. We cut out the tort provisions, and we prevent the pass-
through of costs.
  Mr. Speaker, I yield 2 minutes to the gentleman from Massachusetts 
(Mr. Delahunt) to speak to these issues.
  Mr. DELAHUNT. Mr. Speaker, the provision that was added by the 
Committee on Rules last night which would limit relief for the victims 
of terrorist attacks by immunizing wrongdoers in advance from the 
consequences of their own negligence and reckless conduct, has nothing 
whatsoever to do with stabilizing the insurance market, nothing to do 
with ensuring that people would be able to secure insurance against 
future acts of terrorism. It does not belong in the bill. The motion to 
recommit, as the ranking member alluded to, would delete it; and it 
would leave us basically with the bill reported out with strong 
bipartisan support from the Committee on Financial Services.
  If we are genuinely concerned about preventing an insurance crisis, 
we should agree to this motion and pass a clean bill. Let us not try to 
rewrite the fundamental rules of the civil justice system late at night 
without thoughtful and considerate debate. Note that the Committee on 
Rules' provision would prohibit the courts from awarding punitive 
damages in cases arising out of terrorist incidents no matter how 
outrageous the underlying conduct.
  For example, even for private airport security contractors who 
wantonly, recklessly, maliciously hired convicted felons, failed to 
perform background checks, there would be no punitive damages. Even for 
landlords who deliberately ignore safety codes and fail to install 
escape routes in their buildings, there would be no punitive damages. 
Nobody wants to hold parties responsible if they bear no blame, but 
this provision lets them off the hook, even if they knowingly engage in 
conduct that puts our fellow citizens at risk.
  Mr. Speaker, I would hope that the motion to recommit would prevail, 
and I urge support for the motion.
  Mr. LaFALCE. Mr. Speaker, I yield 2 minutes to the gentleman from 
Pennsylvania (Mr. Kanjorski), a member of the Subcommittee on Capital 
Markets, Insurance and Government Sponsored Enterprises.
  Mr. KANJORSKI. Mr. Speaker, I support the motion to recommit because 
it is certainly in the first provision cleaning up the tort reform 
provisions, which would go a long way in moving the process along to a 
final conclusion.
  A second provision in the bill allows, of course, for restrictions to 
pass through. As I understand the concept, rather than allowing 
insurance companies to keep their profit scales and just pass a rate 
increase on to the customers, even though they have profits that could 
afford the cost of those losses, they first would have to look at their 
profits before there is a pass-through.
  The purpose of this motion to recommit is to put a bill together that 
is more tenable for action in the Senate and eventually to pass this 
House. I urge my colleagues on both sides to reexamine their conscience 
and put the real issue at stake, the need for reinsurance in this 
country, a good underlying bill that was structured to accomplish that, 
and to do it in a bipartisan way.
  Mr. LaFALCE. Mr. Speaker, I yield back the balance of my time.
  Mr. OXLEY. Mr. Speaker, I rise in opposition to the motion to 
recommit.
  The SPEAKER pro tempore. The gentleman from Ohio (Mr. Oxley) is 
recognized for 5 minutes in opposition to the motion to recommit.
  Mr. OXLEY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, in addition to striking the litigation management 
sections, the motion to recommit imposes price controls on the 
insurance industry. We

[[Page 23380]]

can attempt to regulate rates, but we cannot force insurance companies 
to offer coverage; and States with rate regulation have less 
competition and higher prices for consumers. Only if we want less 
insurance availability and higher prices would we vote for this motion 
to recommit.
  Our bill, H.R. 3210, forces the industry, not the taxpayers, to bear 
the ultimate cost of the terrorist attack. That is what this bill is 
all about. The bipartisan bill passed out of committee on voice vote 
allows insurers to price it into future policies.
  The motion to recommit says that not only are insurers responsible 
for spreading terrorist costs, but we are going to force them into 
insolvency. Why should insurers be punished and not allowed to rebuild 
their reserves? They should be allowed to reinsure themselves, 
particularly in light of the fact that the reinsurance industry has 
gotten out of the business.
  These price controls proposed are bad for consumers, bad for 
policyholders and bad for our national economy.
  Mr. Speaker, I yield such time as he may consume to the gentleman 
from Wisconsin (Mr. Sensenbrenner), the chairman of the Committee on 
the Judiciary.
  Mr. SENSENBRENNER. Mr. Speaker, I rise in strong opposition to the 
motion to recommit which would strip from the bill vital litigation 
management provisions. Without these provisions, the bill would 
threaten untold numbers of businesses with the loss of capital and 
credit simply because they might be named in a lawsuit related to a 
terrorist attack.
  Nearly identical litigation management provisions were passed by the 
House by a vote of 286-139 to cover lawsuits related to the September 
11 attacks. Without these provisions, anyone could be on the hook for 
all damages caused by a terrorist attack, running into billions of 
dollars, even when they share only 1 percent of the responsibility of 
the losses and the terrorists share the remaining 99 percent.
  If any defendant, even those just marginally involved in such a 
minuscule portion of any injuries could be made to pay the full amount 
of noneconomic damages caused by a massive terrorist attack, hundreds 
of legitimate businesses would be thrown into bankruptcy.
  Again, existing tort rules are designed to deal with the typical 
slip-and-fall case. They may properly apply when the primary cause of 
an injury is excessive water on the floor of a grocery store, but 
surely that cannot be true when the primary cause is a suicidal 
fanatic, motivated by the deepest hatred of America and using weapons 
of mass destruction intended to kill as many innocent people as 
possible. If anyone can convince me that a slippery floor is the moral 
equivalent of a terrorist, I will vote for the gentleman's motion 
myself.
  Mr. Speaker, Congress has already recognized this in passing the 
liability protection provisions governing lawsuits relating to the 
September 11 attacks. Without the litigation management provisions, no 
limits would be placed on the fees of attorneys bringing cases against 
Americans and their businesses, even when the primary cause of injury 
is a terrorist.
  Without the provisions which allow courts the discretion to keep 
attorneys' fees reasonable, a few war profiteers can turn attacks that 
result in multibillion-dollar losses into private jackpots for 
themselves, that are paid for by the U.S. taxpayers.
  Mr. Speaker, I urge all Members to oppose this motion to recommit and 
ensure equitable compensation to victims while protecting the American 
economy and the taxpayer.
  Mr. OXLEY. Mr. Speaker, I yield the balance of my time to the 
gentleman from North Dakota (Mr. Pomeroy).
  Mr. POMEROY. Mr. Speaker, I had hoped the motion to recommit would 
offer us the opportunity to fix this bill. I believe the bill is 
flawed, and I will be voting against it. Unfortunately, minority 
leadership staff has fouled up, in my opinion, the motion to recommit. 
I will be voting against the motion to recommit, and voting against the 
bill as well.
  Mr. OXLEY. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.


                             Recorded Vote

  Mr. LaFALCE. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 173, 
noes 243, not voting 17, as follows:

                             [Roll No. 463]

                               AYES--173

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldacci
     Baldwin
     Barcia
     Barrett
     Becerra
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Bonior
     Borski
     Boswell
     Boyd
     Brady (PA)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (OK)
     Clay
     Clayton
     Clement
     Clyburn
     Condit
     Conyers
     Costello
     Coyne
     Crowley
     Cummings
     Davis (CA)
     Davis (IL)
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doggett
     Doyle
     Edwards
     Engel
     Eshoo
     Evans
     Farr
     Fattah
     Filner
     Frank
     Gephardt
     Gonzalez
     Gordon
     Green (TX)
     Gutierrez
     Hall (OH)
     Harman
     Hastings (FL)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E.B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kind (WI)
     Kleczka
     Kucinich
     LaFalce
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     LaTourette
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Luther
     Lynch
     Maloney (CT)
     Markey
     Mascara
     Matheson
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Mink
     Mollohan
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pastor
     Payne
     Pelosi
     Phelps
     Rahall
     Reyes
     Rivers
     Rodriguez
     Ross
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schakowsky
     Schiff
     Scott
     Serrano
     Sherman
     Shows
     Skelton
     Slaughter
     Smith (WA)
     Solis
     Strickland
     Stupak
     Tauscher
     Taylor (MS)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Visclosky
     Waters
     Watson (CA)
     Watt (NC)
     Waxman
     Weiner
     Woolsey
     Wynn

                               NOES--243

     Aderholt
     Akin
     Armey
     Bachus
     Baker
     Ballenger
     Barr
     Bartlett
     Barton
     Bass
     Bentsen
     Bereuter
     Biggert
     Bilirakis
     Blumenauer
     Blunt
     Boehlert
     Bonilla
     Bono
     Boozman
     Brady (TX)
     Brown (FL)
     Brown (SC)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Castle
     Chabot
     Coble
     Collins
     Combest
     Cox
     Cramer
     Crane
     Crenshaw
     Culberson
     Cunningham
     Davis (FL)
     Davis, Jo Ann
     Davis, Tom
     Deal
     DeLay
     DeMint
     Deutsch
     Diaz-Balart
     Dooley
     Doolittle
     Dreier
     Duncan
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Etheridge
     Everett
     Ferguson
     Flake
     Fletcher
     Foley
     Forbes
     Fossella
     Frelinghuysen
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Goss
     Graham
     Granger
     Graves
     Green (WI)
     Grucci
     Gutknecht
     Hall (TX)
     Hansen
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Hefley
     Herger
     Hill
     Hilleary
     Hobson
     Hoekstra
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Isakson
     Issa
     Istook
     Jenkins
     John
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     Kerns
     Kilpatrick
     King (NY)
     Kingston
     Kirk
     Knollenberg
     Kolbe
     LaHood
     Largent
     Larson (CT)
     Latham
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lofgren
     Lucas (KY)
     Lucas (OK)
     Maloney (NY)
     Manzullo
     McCrery
     McHugh
     McInnis
     McKeon
     Mica
     Miller, Dan
     Miller, Gary
     Miller, Jeff
     Moore
     Moran (KS)
     Moran (VA)
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Pascrell
     Paul
     Pence
     Peterson (MN)
     Peterson (PA)
     Petri
     Pickering

[[Page 23381]]


     Pitts
     Platts
     Pombo
     Pomeroy
     Portman
     Price (NC)
     Pryce (OH)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reynolds
     Riley
     Roemer
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schaffer
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Snyder
     Souder
     Spratt
     Stark
     Stearns
     Stenholm
     Stump
     Sununu
     Sweeney
     Tancredo
     Tanner
     Tauzin
     Taylor (NC)
     Terry
     Thomas
     Thompson (CA)
     Thornberry
     Thune
     Tiahrt
     Tiberi
     Toomey
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins (OK)
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wolf
     Wu
     Young (AK)
     Young (FL)

                             NOT VOTING--17

     Boehner
     Boucher
     Carson (IN)
     Chambliss
     Cooksey
     Cubin
     DeFazio
     Ford
     Frost
     Greenwood
     Johnson (CT)
     Lowey
     Miller, George
     Quinn
     Rangel
     Rothman
     Wexler

                              {time}  1618

  Mr. ROEMER and Mr. MORAN of Virginia changed their vote from ``aye'' 
to ``no.''
  Mr. CARSON of Oklahoma changed his vote from ``no'' to ``aye.''
  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore (Mr. Nethercutt). The question is on passage 
of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

  Mr. LaFALCE. Mr. Speaker, I demand a recorded vote.
  A recorded vote was ordered.
  The vote was taken by electronic device, and there were--ayes 227, 
noes 193, not voting 13, as follows:

                             [Roll No. 464]

                               AYES--227

     Aderholt
     Akin
     Armey
     Bachus
     Baker
     Ballenger
     Barcia
     Barr
     Bartlett
     Barton
     Bass
     Bereuter
     Biggert
     Bilirakis
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Boozman
     Brady (TX)
     Brown (SC)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Cannon
     Cantor
     Capito
     Castle
     Chabot
     Clement
     Coble
     Collins
     Combest
     Cox
     Cramer
     Crane
     Crenshaw
     Culberson
     Cunningham
     Davis, Jo Ann
     Davis, Tom
     Deal
     DeLay
     DeMint
     Diaz-Balart
     Dooley
     Doolittle
     Dreier
     Dunn
     Ehlers
     Ehrlich
     Emerson
     English
     Everett
     Ferguson
     Fletcher
     Foley
     Forbes
     Fossella
     Frelinghuysen
     Gallegly
     Ganske
     Gekas
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Goode
     Goodlatte
     Gordon
     Goss
     Graham
     Granger
     Graves
     Green (WI)
     Greenwood
     Grucci
     Gutknecht
     Hall (OH)
     Hall (TX)
     Hansen
     Hart
     Hastings (WA)
     Hayes
     Hayworth
     Herger
     Hilleary
     Hobson
     Hoekstra
     Holden
     Horn
     Hostettler
     Houghton
     Hulshof
     Hunter
     Hyde
     Isakson
     Issa
     Istook
     Jenkins
     John
     Johnson (CT)
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Keller
     Kelly
     Kennedy (MN)
     Kerns
     King (NY)
     Kingston
     Kirk
     Knollenberg
     Kolbe
     LaHood
     Largent
     Larson (CT)
     Latham
     LaTourette
     Leach
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas (KY)
     Lucas (OK)
     Maloney (CT)
     Manzullo
     Matheson
     McCrery
     McHugh
     McKeon
     Mica
     Miller, Dan
     Miller, Gary
     Miller, Jeff
     Moran (KS)
     Moran (VA)
     Morella
     Myrick
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Osborne
     Ose
     Otter
     Oxley
     Pence
     Peterson (PA)
     Pickering
     Pitts
     Pombo
     Portman
     Pryce (OH)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reynolds
     Riley
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roukema
     Royce
     Ryan (WI)
     Ryun (KS)
     Saxton
     Schrock
     Sensenbrenner
     Sessions
     Shadegg
     Shaw
     Shays
     Sherwood
     Shimkus
     Shuster
     Simmons
     Simpson
     Skeen
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Stenholm
     Stump
     Sununu
     Sweeney
     Tanner
     Tauzin
     Taylor (MS)
     Taylor (NC)
     Terry
     Thomas
     Thornberry
     Thune
     Tiahrt
     Tiberi
     Toomey
     Towns
     Traficant
     Upton
     Vitter
     Walden
     Walsh
     Wamp
     Watkins (OK)
     Watts (OK)
     Weldon (FL)
     Weldon (PA)
     Weller
     Whitfield
     Wicker
     Wilson
     Wolf
     Young (AK)
     Young (FL)

                               NOES--193

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldacci
     Baldwin
     Barrett
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Boswell
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson (OK)
     Clay
     Clayton
     Clyburn
     Condit
     Conyers
     Costello
     Coyne
     Crowley
     Cummings
     Davis (CA)
     Davis (FL)
     Davis (IL)
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Doggett
     Doyle
     Duncan
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Filner
     Flake
     Frank
     Gephardt
     Gonzalez
     Green (TX)
     Gutierrez
     Harman
     Hastings (FL)
     Hefley
     Hill
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy (RI)
     Kildee
     Kilpatrick
     Kind (WI)
     Kleczka
     Kucinich
     LaFalce
     Lampson
     Langevin
     Lantos
     Larsen (WA)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Luther
     Lynch
     Maloney (NY)
     Markey
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McInnis
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Mink
     Mollohan
     Moore
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Paul
     Payne
     Pelosi
     Peterson (MN)
     Petri
     Phelps
     Platts
     Pomeroy
     Price (NC)
     Rahall
     Reyes
     Rivers
     Rodriguez
     Roemer
     Ross
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Schaffer
     Schakowsky
     Schiff
     Scott
     Serrano
     Sherman
     Shows
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Strickland
     Stupak
     Tancredo
     Tauscher
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Visclosky
     Waters
     Watson (CA)
     Watt (NC)
     Waxman
     Weiner
     Woolsey
     Wu
     Wynn

                             NOT VOTING--13

     Boucher
     Carson (IN)
     Chambliss
     Cooksey
     Cubin
     DeFazio
     Ford
     Frost
     Lowey
     Quinn
     Rangel
     Rothman
     Wexler

                              {time}  1637

  Mr. CROWLEY changed his vote from ``aye'' to ``no.''
  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________