[Congressional Record (Bound Edition), Volume 160 (2014), Part 12]
[House]
[Pages 17438-17455]
[From the U.S. Government Publishing Office, www.gpo.gov]




      TERRORISM RISK INSURANCE PROGRAM REAUTHORIZATION ACT OF 2014

  Mr. HENSARLING. Mr. Speaker, pursuant to House Resolution 775, I call 
up the bill (S. 2244) to extend the termination date of the Terrorism 
Insurance Program established under the Terrorism Risk Insurance Act of 
2002, and for other purposes, and ask for its immediate consideration.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Pursuant to House Resolution 775, the 
amendment in the nature of a substitute printed in House Report 113-654 
is adopted, and the bill, as amended, is considered read.
  The text of the bill, as amended, is as follows:

                                S. 2244

       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 Insurance Program Reauthorization Act of 2014''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title and table of contents.

           TITLE I--EXTENSION OF TERRORISM INSURANCE PROGRAM

Sec. 101. Extension of Terrorism Insurance Program.
Sec. 102. Federal share.
Sec. 103. Program trigger.
Sec. 104. Recoupment of Federal share of compensation under the 
              program.
Sec. 105. Certification of acts of terrorism; consultation with 
              Secretary of Homeland Security.
Sec. 106. Technical amendments.
Sec. 107. Improving the certification process.
Sec. 108. GAO study.
Sec. 109. Membership of Board of Governors of the Federal Reserve 
              System.
Sec. 110. Advisory Committee on Risk-Sharing Mechanisms.
Sec. 111. Reporting of terrorism insurance data.
Sec. 112. Annual study of small insurer market competitiveness.

 TITLE II--NATIONAL ASSOCIATION OF REGISTERED AGENTS AND BROKERS REFORM

Sec. 201. Short title.
Sec. 202. Reestablishment of the National Association of Registered 
              Agents and Brokers.

      TITLE III--BUSINESS RISK MITIGATION AND PRICE STABILIZATION

Sec. 301. Short title.
Sec. 302. Margin requirements.
Sec. 303. Implementation.

           TITLE I--EXTENSION OF TERRORISM INSURANCE PROGRAM

     SEC. 101. EXTENSION OF TERRORISM INSURANCE PROGRAM.

       Section 108(a) of the Terrorism Risk Insurance Act of 2002 
     (15 U.S.C. 6701 note) is amended by striking ``December 31, 
     2014'' and inserting ``December 31, 2020''.

     SEC. 102. FEDERAL SHARE.

       Section 103(e)(1)(A) of the Terrorism Risk Insurance Act of 
     2002 (15 U.S.C. 6701 note) is amended by inserting ``and 
     beginning on January 1, 2016, shall decrease by 1 percentage 
     point per calendar year until equal to 80 percent'' after 
     ``85 percent''.

     SEC. 103. PROGRAM TRIGGER.

       Subparagraph (B) of section 103(e)(1) (15 U.S.C. 6701 note) 
     is amended in the matter preceding clause (i)--
       (1) by striking ``a certified act'' and inserting 
     ``certified acts'';
       (2) by striking ``such certified act'' and inserting ``such 
     certified acts''; and
       (3) by striking ``exceed'' and all that follows through 
     clause (ii) and inserting the following: ``exceed--
       ``(i) $100,000,000, with respect to such insured losses 
     occurring in calendar year 2015;
       ``(ii) $120,000,000, with respect to such insured losses 
     occurring in calendar year 2016;
       ``(iii) $140,000,000, with respect to such insured losses 
     occurring in calendar year 2017;
       ``(iv) $160,000,000, with respect to such insured losses 
     occurring in calendar year 2018;
       ``(v) $180,000,000, with respect to such insured losses 
     occurring in calendar year 2019; and
       ``(vi) $200,000,000, with respect to such insured losses 
     occurring in calendar year 2020 and any calendar year 
     thereafter.''.

     SEC. 104. RECOUPMENT OF FEDERAL SHARE OF COMPENSATION UNDER 
                   THE PROGRAM.

       Section 103(e) of the Terrorism Risk Insurance Act of 2002 
     (15 U.S.C. 6701 note) is amended--
       (1) by amending paragraph (6) to read as follows:
       ``(6) Insurance marketplace aggregate retention amount.--
       ``(A) In general.--For purposes of paragraph (7), the 
     insurance marketplace aggregate retention amount shall be the 
     lesser of--
       ``(i) $27,500,000,000, as such amount is revised pursuant 
     to this paragraph; and
       ``(ii) the aggregate amount, for all insurers, of insured 
     losses during such calendar year.
       ``(B) Revision of insurance marketplace aggregate retention 
     amount.--
       ``(i) Phase-in.--Beginning in the calendar year that 
     follows the date of enactment of the Terrorism Risk Insurance 
     Program Reauthorization Act of 2014, the amount set

[[Page 17439]]

     forth under subparagraph (A)(i) shall increase by 
     $2,000,000,000 per calendar year until equal to 
     $37,500,000,000.
       ``(ii) Further revision.--Beginning in the calendar year 
     that follows the calendar year in which the amount set forth 
     under subparagraph (A)(i) is equal to $37,500,000,000, the 
     amount under subparagraph (A)(i) shall be revised to be the 
     amount equal to the annual average of the sum of insurer 
     deductibles for all insurers participating in the Program for 
     the prior 3 calendar years, as such sum is determined by the 
     Secretary under subparagraph (C).
       ``(C) Rulemaking.--Not later than 3 years after the date of 
     enactment of the Terrorism Risk Insurance Program 
     Reauthorization Act of 2014, the Secretary shall--
       ``(i) issue final rules for determining the amount of the 
     sum described under subparagraph (B)(ii); and
       ``(ii) provide a timeline for public notification of such 
     determination.''; and
       (2) in paragraph (7)--
       (A) in subparagraph (A)--
       (i) in the matter preceding clause (i), by striking ``for 
     each of the periods referred to in subparagraphs (A) through 
     (E) of paragraph (6)''; and
       (ii) in clause (i), by striking ``for such period'';
       (B) by striking subparagraph (B) and inserting the 
     following:
       ``(B) [Reserved.]'';
       (C) in subparagraph (C)--
       (i) by striking ``occurring during any of the periods 
     referred to in any of subparagraphs (A) through (E) of 
     paragraph (6), terrorism loss risk-spreading premiums in an 
     amount equal to 133 percent'' and inserting ``, terrorism 
     loss risk-spreading premiums in an amount equal to 140 
     percent''; and
       (ii) by inserting ``as calculated under subparagraph (A)'' 
     after ``mandatory recoupment amount''; and
       (D) in subparagraph (E)(i)--
       (i) in subclause (I)--

       (I) by striking ``2010'' and inserting ``2017''; and
       (II) by striking ``2012'' and inserting ``2019'';

       (ii) in subclause (II)--

       (I) by striking ``2011'' and inserting ``2018'';
       (II) by striking ``2012'' and inserting ``2019''; and
       (III) by striking ``2017'' and inserting ``2024''; and

       (iii) in subclause (III)--

       (I) by striking ``2012'' and inserting ``2019''; and
       (II) by striking ``2017'' and inserting ``2024''.

     SEC. 105. CERTIFICATION OF ACTS OF TERRORISM; CONSULTATION 
                   WITH SECRETARY OF HOMELAND SECURITY.

       (a) In General.--Paragraph (1)(A) of section 102 (15 U.S.C. 
     6701 note) is amended in the matter preceding clause (i), by 
     striking ``concurrence with the Secretary of State'' and 
     inserting ``consultation with the Secretary of Homeland 
     Security''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on January 1, 2015.

     SEC. 106. TECHNICAL AMENDMENTS.

       The Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 
     note) is amended--
       (1) in section 102--
       (A) in paragraph (3)--
       (i) by redesignating subparagraphs (A), (B), and (C) as 
     clauses (i), (ii), and (iii), respectively;
       (ii) in the matter preceding clause (i) (as so 
     redesignated), by striking ``An entity has'' and inserting 
     the following:
       ``(A) In general.--An entity has''; and
       (iii) by adding at the end the following new subparagraph:
       ``(B) Rule of construction.--An entity, including any 
     affiliate thereof, does not have `control' over another 
     entity, if, as of the date of enactment of the Terrorism Risk 
     Insurance Program Reauthorization Act of 2014, the entity is 
     acting as an attorney-in-fact, as defined by the Secretary, 
     for the other entity and such other entity is a reciprocal 
     insurer, provided that the entity is not, for reasons other 
     than the attorney-in-fact relationship, defined as having 
     `control' under subparagraph (A).'';
       (B) in paragraph (7)--
       (i) by striking subparagraphs (A) through (F) and inserting 
     the following:
       ``(A) the value of an insurer's direct earned premiums 
     during the immediately preceding calendar year, multiplied by 
     20 percent; and'';
       (ii) by redesignating subparagraph (G) as subparagraph (B); 
     and
       (iii) in subparagraph (B), as so redesignated by clause 
     (ii)--

       (I) by striking ``notwithstanding subparagraphs (A) through 
     (F), for the Transition Period or any Program Year'' and 
     inserting ``notwithstanding subparagraph (A), for any 
     calendar year''; and
       (II) by striking ``Period or Program Year'' and inserting 
     ``calendar year'';

       (C) by striking paragraph (11); and
       (D) by redesignating paragraphs (12) through (16) as 
     paragraphs (11) through (15), respectively; and
       (2) in section 103--
       (A) in subsection (b)(2)--
       (i) in subparagraph (B), by striking ``, purchase,''; and
       (ii) in subparagraph (C), by striking ``, purchase,'';
       (B) in subsection (c), by striking ``Program Year'' and 
     inserting ``calendar year'';
       (C) in subsection (e)--
       (i) in paragraph (1)(A), as previously amended by section 
     102--

       (I) by striking ``the Transition Period and each Program 
     Year through Program Year 4 shall be equal to 90 percent, and 
     during Program Year 5 and each Program Year thereafter'' and 
     inserting ``each calendar year'';
       (II) by striking the comma after ``80 percent''; and
       (III) by striking ``such Transition Period or such Program 
     Year'' and inserting ``such calendar year''; and

       (ii) in paragraph (2)(A), by striking ``the period 
     beginning on the first day of the Transition Period and 
     ending on the last day of Program Year 1, or during any 
     Program Year thereafter'' and inserting ``a calendar year''; 
     and
       (iii) in paragraph (3), by striking ``the period beginning 
     on the first day of the Transition Period and ending on the 
     last day of Program Year 1, or during any other Program 
     Year'' and inserting ``any calendar year''; and
       (D) in subsection (g)(2)--
       (i) by striking ``the Transition Period or a Program Year'' 
     each place that term appears and inserting ``the calendar 
     year'';
       (ii) by striking ``such period'' and inserting ``the 
     calendar year''; and
       (iii) by striking ``that period'' and inserting ``the 
     calendar year''.

     SEC. 107. IMPROVING THE CERTIFICATION PROCESS.

       (a) Definitions.--As used in this section--
       (1) the term ``act of terrorism'' has the same meaning as 
     in section 102(1) of the Terrorism Risk Insurance Act of 2002 
     (15 U.S.C. 6701 note);
       (2) the term ``certification process'' means the process by 
     which the Secretary determines whether to certify an act as 
     an act of terrorism under section 102(1) of the Terrorism 
     Risk Insurance Act of 2002 (15 U.S.C. 6701 note); and
       (3) the term ``Secretary'' means the Secretary of the 
     Treasury.
       (b) Study.--Not later than 9 months after the date of 
     enactment of this Act, the Secretary shall conduct and 
     complete a study on the certification process.
       (c) Required Content.--The study required under subsection 
     (a) shall include an examination and analysis of--
       (1) the establishment of a reasonable timeline by which the 
     Secretary must make an accurate determination on whether to 
     certify an act as an act of terrorism;
       (2) the impact that the length of any timeline proposed to 
     be established under paragraph (1) may have on the insurance 
     industry, policyholders, consumers, and taxpayers as a whole;
       (3) the factors the Secretary would evaluate and monitor 
     during the certification process, including the ability of 
     the Secretary to obtain the required information regarding 
     the amount of projected and incurred losses resulting from an 
     act which the Secretary would need in determining whether to 
     certify the act as an act of terrorism;
       (4) the appropriateness, efficiency, and effectiveness of 
     the consultation process required under section 102(1)(A) of 
     the Terrorism Risk Insurance Act of 2002 (15 U.S.C. 6701 
     note) and any recommendations on changes to the consultation 
     process; and
       (5) the ability of the Secretary to provide guidance and 
     updates to the public regarding any act that may reasonably 
     be certified as an act of terrorism.
       (d) Report.--Upon completion of the study required under 
     subsection (a), the Secretary shall submit a report on the 
     results of such study to the Committee on Banking, Housing, 
     and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representatives.
       (e) Rulemaking.--Section 102(1) of the Terrorism Risk 
     Insurance Act of 2002 (15 U.S.C. 6701 note) is amended--
       (1) by redesignating subparagraph (D) as subparagraph (E); 
     and
       (2) by inserting after subparagraph (C) the following:
       ``(D) Timing of certification.--Not later than 9 months 
     after the report required under section 107 of the Terrorism 
     Risk Insurance Program Reauthorization Act of 2014 is 
     submitted to the appropriate committees of Congress, the 
     Secretary shall issue final rules governing the certification 
     process, including establishing a timeline for which an act 
     is eligible for certification by the Secretary on whether an 
     act is an act of terrorism under this paragraph.''.

     SEC. 108. GAO STUDY.

       (a) Study.--Not later than 2 years after the date of 
     enactment of this Act, the Comptroller General of the United 
     States shall complete a study on the viability and effects of 
     the Federal Government--
       (1) assessing and collecting upfront premiums on insurers 
     that participate in the Terrorism Insurance Program 
     established under the Terrorism Risk Insurance Act of 2002 
     (15 U.S.C. 6701 note) (hereafter in this section referred to 
     as the ``Program''), which shall include a comparison of 
     practices in international markets to assess and collect 
     premiums either before or after terrorism losses are 
     incurred; and

[[Page 17440]]

       (2) creating a capital reserve fund under the Program and 
     requiring insurers participating in the Program to dedicate 
     capital specifically for terrorism losses before such losses 
     are incurred, which shall include a comparison of practices 
     in international markets to establish reserve funds.
       (b) Required Content.--The study required under subsection 
     (a) shall examine, but shall not be limited to, the following 
     issues:
       (1) Upfront premiums.--With respect to upfront premiums 
     described in subsection (a)(1)--
       (A) how the Federal Government could determine the price of 
     such upfront premiums on insurers that participate in the 
     Program;
       (B) how the Federal Government could collect and manage 
     such upfront premiums;
       (C) how the Federal Government could ensure that such 
     upfront premiums are not spent for purposes other than claims 
     through the Program;
       (D) how the assessment and collection of such upfront 
     premiums could affect take-up rates for terrorism risk 
     coverage in different regions and industries and how it could 
     impact small businesses and consumers in both metropolitan 
     and non-metropolitan areas;
       (E) the effect of collecting such upfront premiums on 
     insurers both large and small;
       (F) the effect of collecting such upfront premiums on the 
     private market for terrorism risk reinsurance; and
       (G) the size of any Federal Government subsidy insurers may 
     receive through their participation in the Program, taking 
     into account the Program's current post-event recoupment 
     structure.
       (2) Capital reserve fund.--With respect to the capital 
     reserve fund described in subsection (a)(2)--
       (A) how the creation of a capital reserve fund would affect 
     the Federal Government's fiscal exposure under the Terrorism 
     Risk Insurance Program and the ability of the Program to meet 
     its statutory purposes;
       (B) how a capital reserve fund would impact insurers and 
     reinsurers, including liquidity, insurance pricing, and 
     capacity to provide terrorism risk coverage;
       (C) the feasibility of segregating funds attributable to 
     terrorism risk from funds attributable to other insurance 
     lines;
       (D) how a capital reserve fund would be viewed and treated 
     under current Financial Accounting Standards Board accounting 
     rules and the tax laws; and
       (E) how a capital reserve fund would affect the States' 
     ability to regulate insurers participating in the Program.
       (3) International practices.--With respect to international 
     markets referred to in paragraphs (1) and (2) of subsection 
     (a), how other countries, if any--
       (A) have established terrorism insurance structures;
       (B) charge premiums or otherwise collect funds to pay for 
     the costs of terrorism insurance structures, including risk 
     and administrative costs; and
       (C) have established capital reserve funds to pay for the 
     costs of terrorism insurance structures.
       (c) Report.--Upon completion of the study required under 
     subsection (a), the Comptroller General shall submit a report 
     on the results of such study to the Committee on Banking, 
     Housing, and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representatives.
       (d) Public Availability.--The study and report required 
     under this section shall be made available to the public in 
     electronic form and shall be published on the website of the 
     Government Accountability Office.

     SEC. 109. MEMBERSHIP OF BOARD OF GOVERNORS OF THE FEDERAL 
                   RESERVE SYSTEM.

       (a) In General.--The first undesignated paragraph of 
     section 10 of the Federal Reserve Act (12 U.S.C. 241) is 
     amended by inserting after the second sentence the following: 
     ``In selecting members of the Board, the President shall 
     appoint at least 1 member with demonstrated primary 
     experience working in or supervising community banks having 
     less than $10,000,000,000 in total assets.''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect on the date of enactment of this Act and 
     apply to appointments made on and after that effective date, 
     excluding any nomination pending in the Senate on that date.

     SEC. 110. ADVISORY COMMITTEE ON RISK-SHARING MECHANISMS.

       (a) Finding; Rule of Construction.--
       (1) Finding.--Congress finds that it is desirable to 
     encourage the growth of nongovernmental, private market 
     reinsurance capacity for protection against losses arising 
     from acts of terrorism.
       (2) Rule of construction.--Nothing in this Act, any 
     amendment made by this Act, or the Terrorism Risk Insurance 
     Act of 2002 (15 U.S.C. 6701 note) shall prohibit insurers 
     from developing risk-sharing mechanisms to voluntarily 
     reinsure terrorism losses between and among themselves.
       (b) Advisory Committee on Risk-Sharing Mechanisms.--
       (1) Establishment.--The Secretary of the Treasury shall 
     establish and appoint an advisory committee to be known as 
     the ``Advisory Committee on Risk-Sharing Mechanisms'' 
     (referred to in this subsection as the ``Advisory 
     Committee'').
       (2) Duties.--The Advisory Committee shall provide advice, 
     recommendations, and encouragement with respect to the 
     creation and development of the nongovernmental risk-sharing 
     mechanisms described under subsection (a).
       (3) Membership.--The Advisory Committee shall be composed 
     of 9 members who are directors, officers, or other employees 
     of insurers, reinsurers, or capital market participants that 
     are participating or that desire to participate in the 
     nongovernmental risk-sharing mechanisms described under 
     subsection (a), and who are representative of the affected 
     sectors of the insurance industry, including commercial 
     property insurance, commercial casualty insurance, 
     reinsurance, and alternative risk transfer industries.
       (c) Effective Date.--The provisions of this section shall 
     take effect on January 1, 2015.

     SEC. 111. REPORTING OF TERRORISM INSURANCE DATA.

       Section 104 (15 U.S.C. 6701 note) is amended by adding at 
     the end the following new subsection:
       ``(h) Reporting of Terrorism Insurance Data.--
       ``(1) Authority.--During the calendar year beginning on 
     January 1, 2016, and in each calendar year thereafter, the 
     Secretary shall require insurers participating in the Program 
     to submit to the Secretary such information regarding 
     insurance coverage for terrorism losses of such insurers as 
     the Secretary considers appropriate to analyze the 
     effectiveness of the Program, which shall include information 
     regarding--
       ``(A) lines of insurance with exposure to such losses;
       ``(B) premiums earned on such coverage;
       ``(C) geographical location of exposures;
       ``(D) pricing of such coverage;
       ``(E) the take-up rate for such coverage;
       ``(F) the amount of private reinsurance for acts of 
     terrorism purchased; and
       ``(G) such other matters as the Secretary considers 
     appropriate.
       ``(2) Reports.--Not later than June 30, 2016, and every 
     other June 30 thereafter, the Secretary shall submit a report 
     to the Committee on Financial Services of the House of 
     Representatives and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate that includes--
       ``(A) an analysis of the overall effectiveness of the 
     Program;
       ``(B) an evaluation of any changes or trends in the data 
     collected under paragraph (1);
       ``(C) an evaluation of whether any aspects of the Program 
     have the effect of discouraging or impeding insurers from 
     providing commercial property casualty insurance coverage or 
     coverage for acts of terrorism;
       ``(D) an evaluation of the impact of the Program on 
     workers' compensation insurers; and
       ``(E) in the case of the data reported in paragraph (1)(B), 
     an updated estimate of the total amount earned since January 
     1, 2003.
       ``(3) Protection of data.--To the extent possible, the 
     Secretary shall contract with an insurance statistical 
     aggregator to collect the information described in paragraph 
     (1), which shall keep any nonpublic information confidential 
     and provide it to the Secretary in an aggregate form or in 
     such other form or manner that does not permit identification 
     of the insurer submitting such information.
       ``(4) Advance coordination.--Before collecting any data or 
     information under paragraph (1) from an insurer, or affiliate 
     of an insurer, the Secretary shall coordinate with the 
     appropriate State insurance regulatory authorities and any 
     relevant government agency or publicly available sources to 
     determine if the information to be collected is available 
     from, and may be obtained in a timely manner by, individually 
     or collectively, such entities. If the Secretary determines 
     that such data or information is available, and may be 
     obtained in a timely matter, from such entities, the 
     Secretary shall obtain the data or information from such 
     entities. If the Secretary determines that such data or 
     information is not so available, the Secretary may collect 
     such data or information from an insurer and affiliates.
       ``(5) Confidentiality.--
       ``(A) Retention of privilege.--The submission of any non-
     publicly available data and information to the Secretary and 
     the sharing of any non-publicly available data with or by the 
     Secretary among other Federal agencies, the State insurance 
     regulatory authorities, or any other entities under this 
     subsection shall not constitute a waiver of, or otherwise 
     affect, any privilege arising under Federal or State law 
     (including the rules of any Federal or State court) to which 
     the data or information is otherwise subject.
       ``(B) Continued application of prior confidentiality 
     agreements.--Any requirement under Federal or State law to 
     the extent otherwise applicable, or any requirement pursuant 
     to a written agreement in effect between the original source 
     of any non-publicly available data or information and the 
     source of such data or information to the Secretary, 
     regarding the privacy or confidentiality of any data or 
     information in the possession of the source to the Secretary, 
     shall

[[Page 17441]]

     continue to apply to such data or information after the data 
     or information has been provided pursuant to this subsection.
       ``(C) Information-sharing agreement.--Any data or 
     information obtained by the Secretary under this subsection 
     may be made available to State insurance regulatory 
     authorities, individually or collectively through an 
     information-sharing agreement that--
       ``(i) shall comply with applicable Federal law; and
       ``(ii) shall not constitute a waiver of, or otherwise 
     affect, any privilege under Federal or State law (including 
     any privilege referred to in subparagraph (A) and the rules 
     of any Federal or State court) to which the data or 
     information is otherwise subject.
       ``(D) Agency disclosure requirements.--Section 552 of title 
     5, United States Code, including any exceptions thereunder, 
     shall apply to any data or information submitted under this 
     subsection to the Secretary by an insurer or affiliate of an 
     insurer.''.

     SEC. 112. ANNUAL STUDY OF SMALL INSURER MARKET 
                   COMPETITIVENESS.

       Section 108 (15 U.S.C. 6701 note) is amended by adding at 
     the end the following new subsection:
       ``(h) Study of Small Insurer Market Competitiveness.--
       ``(1) In general.--Not later than June 30, 2017, and every 
     other June 30 thereafter, the Secretary shall conduct a study 
     of small insurers (as such term is defined by regulation by 
     the Secretary) participating in the Program, and identify any 
     competitive challenges small insurers face in the terrorism 
     risk insurance marketplace, including--
       ``(A) changes to the market share, premium volume, and 
     policyholder surplus of small insurers relative to large 
     insurers;
       ``(B) how the property and casualty insurance market for 
     terrorism risk differs between small and large insurers, and 
     whether such a difference exists within other perils;
       ``(C) the impact of the Program's mandatory availability 
     requirement under section 103(c) on small insurers;
       ``(D) the effect of increasing the trigger amount for the 
     Program under section 103(e)(1)(B) on small insurers;
       ``(E) the availability and cost of private reinsurance for 
     small insurers; and
       ``(F) the impact that State workers compensation laws have 
     on small insurers and workers compensation carriers in the 
     terrorism risk insurance marketplace.
       ``(2) Report.--The Secretary shall submit a report to the 
     Congress setting forth the findings and conclusions of each 
     study required under paragraph (1).''.

 TITLE II--NATIONAL ASSOCIATION OF REGISTERED AGENTS AND BROKERS REFORM

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``National Association of 
     Registered Agents and Brokers Reform Act of 2014''.

     SEC. 202. REESTABLISHMENT OF THE NATIONAL ASSOCIATION OF 
                   REGISTERED AGENTS AND BROKERS.

       (a) In General.--Subtitle C of title III of the Gramm-
     Leach-Bliley Act (15 U.S.C. 6751 et seq.) is amended to read 
     as follows:

  ``Subtitle C--National Association of Registered Agents and Brokers

     ``SEC. 321. NATIONAL ASSOCIATION OF REGISTERED AGENTS AND 
                   BROKERS.

       ``(a) Establishment.--There is established the National 
     Association of Registered Agents and Brokers (referred to in 
     this subtitle as the `Association').
       ``(b) Status.--The Association shall--
       ``(1) be a nonprofit corporation;
       ``(2) not be an agent or instrumentality of the Federal 
     Government;
       ``(3) be an independent organization that may not be merged 
     with or into any other private or public entity; and
       ``(4) except as otherwise provided in this subtitle, be 
     subject to, and have all the powers conferred upon, a 
     nonprofit corporation by the District of Columbia Nonprofit 
     Corporation Act (D.C. Code, sec. 29-301.01 et seq.) or any 
     successor thereto.

     ``SEC. 322. PURPOSE.

       ``The purpose of the Association shall be to provide a 
     mechanism through which licensing, continuing education, and 
     other nonresident insurance producer qualification 
     requirements and conditions may be adopted and applied on a 
     multi-state basis without affecting the laws, rules, and 
     regulations, and preserving the rights of a State, pertaining 
     to--
       ``(1) licensing, continuing education, and other 
     qualification requirements of insurance producers that are 
     not members of the Association;
       ``(2) resident or nonresident insurance producer 
     appointment requirements;
       ``(3) supervising and disciplining resident and nonresident 
     insurance producers;
       ``(4) establishing licensing fees for resident and 
     nonresident insurance producers so that there is no loss of 
     insurance producer licensing revenue to the State; and
       ``(5) prescribing and enforcing laws and regulations 
     regulating the conduct of resident and nonresident insurance 
     producers.

     ``SEC. 323. MEMBERSHIP.

       ``(a) Eligibility.--
       ``(1) In general.--Any insurance producer licensed in its 
     home State shall, subject to paragraphs (2) and (4), be 
     eligible to become a member of the Association.
       ``(2) Ineligibility for suspension or revocation of 
     license.--Subject to paragraph (3), an insurance producer is 
     not eligible to become a member of the Association if a State 
     insurance regulator has suspended or revoked the insurance 
     license of the insurance producer in that State.
       ``(3) Resumption of eligibility.--Paragraph (2) shall cease 
     to apply to any insurance producer if--
       ``(A) the State insurance regulator reissues or renews the 
     license of the insurance producer in the State in which the 
     license was suspended or revoked, or otherwise terminates or 
     vacates the suspension or revocation; or
       ``(B) the suspension or revocation expires or is 
     subsequently overturned by a court of competent jurisdiction.
       ``(4) Criminal history record check required.--
       ``(A) In general.--An insurance producer who is an 
     individual shall not be eligible to become a member of the 
     Association unless the insurance producer has undergone a 
     criminal history record check that complies with regulations 
     prescribed by the Attorney General of the United States under 
     subparagraph (K).
       ``(B) Criminal history record check requested by home 
     state.--An insurance producer who is licensed in a State and 
     who has undergone a criminal history record check during the 
     2-year period preceding the date of submission of an 
     application to become a member of the Association, in 
     compliance with a requirement to undergo such criminal 
     history record check as a condition for such licensure in the 
     State, shall be deemed to have undergone a criminal history 
     record check for purposes of subparagraph (A).
       ``(C) Criminal history record check requested by 
     association.--
       ``(i) In general.--The Association shall, upon request by 
     an insurance producer licensed in a State, submit 
     fingerprints or other identification information obtained 
     from the insurance producer, and a request for a criminal 
     history record check of the insurance producer, to the 
     Federal Bureau of Investigation.
       ``(ii) Procedures.--The board of directors of the 
     Association (referred to in this subtitle as the `Board') 
     shall prescribe procedures for obtaining and utilizing 
     fingerprints or other identification information and criminal 
     history record information, including the establishment of 
     reasonable fees to defray the expenses of the Association in 
     connection with the performance of a criminal history record 
     check and appropriate safeguards for maintaining 
     confidentiality and security of the information. Any fees 
     charged pursuant to this clause shall be separate and 
     distinct from those charged by the Attorney General pursuant 
     to subparagraph (I).
       ``(D) Form of request.--A submission under subparagraph 
     (C)(i) shall include such fingerprints or other 
     identification information as is required by the Attorney 
     General concerning the person about whom the criminal history 
     record check is requested, and a statement signed by the 
     person authorizing the Attorney General to provide the 
     information to the Association and for the Association to 
     receive the information.
       ``(E) Provision of information by attorney general.--Upon 
     receiving a submission under subparagraph (C)(i) from the 
     Association, the Attorney General shall search all criminal 
     history records of the Federal Bureau of Investigation, 
     including records of the Criminal Justice Information 
     Services Division of the Federal Bureau of Investigation, 
     that the Attorney General determines appropriate for criminal 
     history records corresponding to the fingerprints or other 
     identification information provided under subparagraph (D) 
     and provide all criminal history record information included 
     in the request to the Association.
       ``(F) Limitation on permissible uses of information.--Any 
     information provided to the Association under subparagraph 
     (E) may only--
       ``(i) be used for purposes of determining compliance with 
     membership criteria established by the Association;
       ``(ii) be disclosed to State insurance regulators, or 
     Federal or State law enforcement agencies, in conformance 
     with applicable law; or
       ``(iii) be disclosed, upon request, to the insurance 
     producer to whom the criminal history record information 
     relates.
       ``(G) Penalty for improper use or disclosure.--Whoever 
     knowingly uses any information provided under subparagraph 
     (E) for a purpose not authorized in subparagraph (F), or 
     discloses any such information to anyone not authorized to 
     receive it, shall be fined not more than $50,000 per 
     violation as determined by a court of competent jurisdiction.
       ``(H) Reliance on information.--Neither the Association nor 
     any of its Board members, officers, or employees shall be 
     liable in any action for using information provided under 
     subparagraph (E) as permitted under subparagraph (F) in good 
     faith and in reasonable reliance on its accuracy.
       ``(I) Fees.--The Attorney General may charge a reasonable 
     fee for conducting the search and providing the information 
     under

[[Page 17442]]

     subparagraph (E), and any such fee shall be collected and 
     remitted by the Association to the Attorney General.
       ``(J) Rule of construction.--Nothing in this paragraph 
     shall be construed as--
       ``(i) requiring a State insurance regulator to perform 
     criminal history record checks under this section; or
       ``(ii) limiting any other authority that allows access to 
     criminal history records.
       ``(K) Regulations.--The Attorney General shall prescribe 
     regulations to carry out this paragraph, which shall 
     include--
       ``(i) appropriate protections for ensuring the 
     confidentiality of information provided under subparagraph 
     (E); and
       ``(ii) procedures providing a reasonable opportunity for an 
     insurance producer to contest the accuracy of information 
     regarding the insurance producer provided under subparagraph 
     (E).
       ``(L) Ineligibility for membership.--
       ``(i) In general.--The Association may, under reasonably 
     consistently applied standards, deny membership to an 
     insurance producer on the basis of criminal history record 
     information provided under subparagraph (E), or where the 
     insurance producer has been subject to disciplinary action, 
     as described in paragraph (2).
       ``(ii) Rights of applicants denied membership.--The 
     Association shall notify any insurance producer who is denied 
     membership on the basis of criminal history record 
     information provided under subparagraph (E) of the right of 
     the insurance producer to--

       ``(I) obtain a copy of all criminal history record 
     information provided to the Association under subparagraph 
     (E) with respect to the insurance producer; and
       ``(II) challenge the denial of membership based on the 
     accuracy and completeness of the information.

       ``(M) Definition.--For purposes of this paragraph, the term 
     `criminal history record check' means a national background 
     check of criminal history records of the Federal Bureau of 
     Investigation.
       ``(b) Authority to Establish Membership Criteria.--The 
     Association may establish membership criteria that bear a 
     reasonable relationship to the purposes for which the 
     Association was established.
       ``(c) Establishment of Classes and Categories of 
     Membership.--
       ``(1) Classes of membership.--The Association may establish 
     separate classes of membership, with separate criteria, if 
     the Association reasonably determines that performance of 
     different duties requires different levels of education, 
     training, experience, or other qualifications.
       ``(2) Business entities.--The Association shall establish a 
     class of membership and membership criteria for business 
     entities. A business entity that applies for membership shall 
     be required to designate an individual Association member 
     responsible for the compliance of the business entity with 
     Association standards and the insurance laws, standards, and 
     regulations of any State in which the business entity seeks 
     to do business on the basis of Association membership.
       ``(3) Categories.--
       ``(A) Separate categories for insurance producers 
     permitted.--The Association may establish separate categories 
     of membership for insurance producers and for other persons 
     or entities within each class, based on the types of 
     licensing categories that exist under State laws.
       ``(B) Separate treatment for depository institutions 
     prohibited.--No special categories of membership, and no 
     distinct membership criteria, shall be established for 
     members that are depository institutions or for employees, 
     agents, or affiliates of depository institutions.
       ``(d) Membership Criteria.--
       ``(1) In general.--The Association may establish criteria 
     for membership which shall include standards for personal 
     qualifications, education, training, and experience. The 
     Association shall not establish criteria that unfairly limit 
     the ability of a small insurance producer to become a member 
     of the Association, including imposing discriminatory 
     membership fees.
       ``(2) Qualifications.--In establishing criteria under 
     paragraph (1), the Association shall not adopt any 
     qualification less protective to the public than that 
     contained in the National Association of Insurance 
     Commissioners (referred to in this subtitle as the `NAIC') 
     Producer Licensing Model Act in effect as of the date of 
     enactment of the National Association of Registered Agents 
     and Brokers Reform Act of 2014, and shall consider the 
     highest levels of insurance producer qualifications 
     established under the licensing laws of the States.
       ``(3) Assistance from states.--
       ``(A) In general.--The Association may request a State to 
     provide assistance in investigating and evaluating the 
     eligibility of a prospective member for membership in the 
     Association.
       ``(B) Authorization of information sharing.--A submission 
     under subsection (a)(4)(C)(i) made by an insurance producer 
     licensed in a State shall include a statement signed by the 
     person about whom the assistance is requested authorizing--
       ``(i) the State to share information with the Association; 
     and
       ``(ii) the Association to receive the information.
       ``(C) Rule of construction.--Subparagraph (A) shall not be 
     construed as requiring or authorizing any State to adopt new 
     or additional requirements concerning the licensing or 
     evaluation of insurance producers.
       ``(4) Denial of membership.--The Association may, based on 
     reasonably consistently applied standards, deny membership to 
     any State-licensed insurance producer for failure to meet the 
     membership criteria established by the Association.
       ``(e) Effect of Membership.--
       ``(1) Authority of association members.--Membership in the 
     Association shall--
       ``(A) authorize an insurance producer to sell, solicit, or 
     negotiate insurance in any State for which the member pays 
     the licensing fee set by the State for any line or lines of 
     insurance specified in the home State license of the 
     insurance producer, and exercise all such incidental powers 
     as shall be necessary to carry out such activities, including 
     claims adjustments and settlement to the extent permissible 
     under the laws of the State, risk management, employee 
     benefits advice, retirement planning, and any other 
     insurance-related consulting activities;
       ``(B) be the equivalent of a nonresident insurance producer 
     license for purposes of authorizing the insurance producer to 
     engage in the activities described in subparagraph (A) in any 
     State where the member pays the licensing fee; and
       ``(C) be the equivalent of a nonresident insurance producer 
     license for the purpose of subjecting an insurance producer 
     to all laws, regulations, provisions or other action of any 
     State concerning revocation, suspension, or other enforcement 
     action related to the ability of a member to engage in any 
     activity within the scope of authority granted under this 
     subsection and to all State laws, regulations, provisions, 
     and actions preserved under paragraph (5).
       ``(2) Violent crime control and law enforcement act of 
     1994.--Nothing in this subtitle shall be construed to alter, 
     modify, or supercede any requirement established by section 
     1033 of title 18, United States Code.
       ``(3) Agent for remitting fees.--The Association shall act 
     as an agent for any member for purposes of remitting 
     licensing fees to any State pursuant to paragraph (1).
       ``(4) Notification of action.--
       ``(A) In general.--The Association shall notify the States 
     (including State insurance regulators) and the NAIC when an 
     insurance producer has satisfied the membership criteria of 
     this section. The States (including State insurance 
     regulators) shall have 10 business days after the date of the 
     notification in order to provide the Association with 
     evidence that the insurance producer does not satisfy the 
     criteria for membership in the Association.
       ``(B) Ongoing disclosures required.--On an ongoing basis, 
     the Association shall disclose to the States (including State 
     insurance regulators) and the NAIC a list of the States in 
     which each member is authorized to operate. The Association 
     shall immediately notify the States (including State 
     insurance regulators) and the NAIC when a member is newly 
     authorized to operate in one or more States, or is no longer 
     authorized to operate in one or more States on the basis of 
     Association membership.
       ``(5) Preservation of consumer protection and market 
     conduct regulation.--
       ``(A) In general.--No provision of this section shall be 
     construed as altering or affecting the applicability or 
     continuing effectiveness of any law, regulation, provision, 
     or other action of any State, including those described in 
     subparagraph (B), to the extent that the State law, 
     regulation, provision, or other action is not inconsistent 
     with the provisions of this subtitle related to market entry 
     for nonresident insurance producers, and then only to the 
     extent of the inconsistency.
       ``(B) Preserved regulations.--The laws, regulations, 
     provisions, or other actions of any State referred to in 
     subparagraph (A) include laws, regulations, provisions, or 
     other actions that--
       ``(i) regulate market conduct, insurance producer conduct, 
     or unfair trade practices;
       ``(ii) establish consumer protections; or
       ``(iii) require insurance producers to be appointed by a 
     licensed or authorized insurer.
       ``(f) Biennial Renewal.--Membership in the Association 
     shall be renewed on a biennial basis.
       ``(g) Continuing Education.--
       ``(1) In general.--The Association shall establish, as a 
     condition of membership, continuing education requirements 
     which shall be comparable to the continuing education 
     requirements under the licensing laws of a majority of the 
     States.
       ``(2) State continuing education requirements.--A member 
     may not be required to satisfy continuing education 
     requirements imposed under the laws, regulations, provisions, 
     or actions of any State other than the home State of the 
     member.
       ``(3) Reciprocity.--The Association shall not require a 
     member to satisfy continuing education requirements that are 
     equivalent to any continuing education requirements of the 
     home State of the member that have been satisfied by the 
     member during the applicable licensing period.
       ``(4) Limitation on the association.--The Association shall 
     not directly or indirectly

[[Page 17443]]

     offer any continuing education courses for insurance 
     producers.
       ``(h) Probation, Suspension and Revocation.--
       ``(1) Disciplinary action.--The Association may place an 
     insurance producer that is a member of the Association on 
     probation or suspend or revoke the membership of the 
     insurance producer in the Association, or assess monetary 
     fines or penalties, as the Association determines to be 
     appropriate, if--
       ``(A) the insurance producer fails to meet the applicable 
     membership criteria or other standards established by the 
     Association;
       ``(B) the insurance producer has been subject to 
     disciplinary action pursuant to a final adjudicatory 
     proceeding under the jurisdiction of a State insurance 
     regulator;
       ``(C) an insurance license held by the insurance producer 
     has been suspended or revoked by a State insurance regulator; 
     or
       ``(D) the insurance producer has been convicted of a crime 
     that would have resulted in the denial of membership pursuant 
     to subsection (a)(4)(L)(i) at the time of application, and 
     the Association has received a copy of the final disposition 
     from a court of competent jurisdiction.
       ``(2) Violations of association standards.--The Association 
     shall have the power to investigate alleged violations of 
     Association standards.
       ``(3) Reporting.--The Association shall immediately notify 
     the States (including State insurance regulators) and the 
     NAIC when the membership of an insurance producer has been 
     placed on probation or has been suspended, revoked, or 
     otherwise terminated, or when the Association has assessed 
     monetary fines or penalties.
       ``(i) Consumer Complaints.--
       ``(1) In general.--The Association shall--
       ``(A) refer any complaint against a member of the 
     Association from a consumer relating to alleged misconduct or 
     violations of State insurance laws to the State insurance 
     regulator where the consumer resides and, when appropriate, 
     to any additional State insurance regulator, as determined by 
     standards adopted by the Association; and
       ``(B) make any related records and information available to 
     each State insurance regulator to whom the complaint is 
     forwarded.
       ``(2) Telephone and other access.--The Association shall 
     maintain a toll-free number for purposes of this subsection 
     and, as practicable, other alternative means of communication 
     with consumers, such as an Internet webpage.
       ``(3) Final disposition of investigation.--State insurance 
     regulators shall provide the Association with information 
     regarding the final disposition of a complaint referred 
     pursuant to paragraph (1)(A), but nothing shall be construed 
     to compel a State to release confidential investigation 
     reports or other information protected by State law to the 
     Association.
       ``(j) Information Sharing.--The Association may--
       ``(1) share documents, materials, or other information, 
     including confidential and privileged documents, with a 
     State, Federal, or international governmental entity or with 
     the NAIC or other appropriate entity referred to paragraphs 
     (3) and (4), provided that the recipient has the authority 
     and agrees to maintain the confidentiality or privileged 
     status of the document, material, or other information;
       ``(2) limit the sharing of information as required under 
     this subtitle with the NAIC or any other non-governmental 
     entity, in circumstances under which the Association 
     determines that the sharing of such information is 
     unnecessary to further the purposes of this subtitle;
       ``(3) establish a central clearinghouse, or utilize the 
     NAIC or another appropriate entity, as determined by the 
     Association, as a central clearinghouse, for use by the 
     Association and the States (including State insurance 
     regulators), through which members of the Association may 
     disclose their intent to operate in 1 or more States and pay 
     the licensing fees to the appropriate States; and
       ``(4) establish a database, or utilize the NAIC or another 
     appropriate entity, as determined by the Association, as a 
     database, for use by the Association and the States 
     (including State insurance regulators) for the collection of 
     regulatory information concerning the activities of insurance 
     producers.
       ``(k) Effective Date.--The provisions of this section shall 
     take effect on the later of--
       ``(1) the expiration of the 2-year period beginning on the 
     date of enactment of the National Association of Registered 
     Agents and Brokers Reform Act of 2014; and
       ``(2) the date of incorporation of the Association.

     ``SEC. 324. BOARD OF DIRECTORS.

       ``(a) Establishment.--There is established a board of 
     directors of the Association, which shall have authority to 
     govern and supervise all activities of the Association.
       ``(b) Powers.--The Board shall have such of the powers and 
     authority of the Association as may be specified in the 
     bylaws of the Association.
       ``(c) Composition.--
       ``(1) In general.--The Board shall consist of 13 members 
     who shall be appointed by the President, by and with the 
     advice and consent of the Senate, in accordance with the 
     procedures established under Senate Resolution 116 of the 
     112th ongress, of whom--
       ``(A) 8 shall be State insurance commissioners appointed in 
     the manner provided in paragraph (2), 1 of whom shall be 
     designated by the President to serve as the chairperson of 
     the Board until the Board elects one such State insurance 
     commissioner Board member to serve as the chairperson of the 
     Board;
       ``(B) 3 shall have demonstrated expertise and experience 
     with property and casualty insurance producer licensing; and
       ``(C) 2 shall have demonstrated expertise and experience 
     with life or health insurance producer licensing.
       ``(2) State insurance regulator representatives.--
       ``(A) Recommendations.--Before making any appointments 
     pursuant to paragraph (1)(A), the President shall request a 
     list of recommended candidates from the States through the 
     NAIC, which shall not be binding on the President. If the 
     NAIC fails to submit a list of recommendations not later than 
     15 business days after the date of the request, the President 
     may make the requisite appointments without considering the 
     views of the NAIC.
       ``(B) Political affiliation.--Not more than 4 Board members 
     appointed under paragraph (1)(A) shall belong to the same 
     political party.
       ``(C) Former state insurance commissioners.--
       ``(i) In general.--If, after offering each currently 
     serving State insurance commissioner an appointment to the 
     Board, fewer than 8 State insurance commissioners have 
     accepted appointment to the Board, the President may appoint 
     the remaining State insurance commissioner Board members, as 
     required under paragraph (1)(A), of the appropriate political 
     party as required under subparagraph (B), from among 
     individuals who are former State insurance commissioners.
       ``(ii) Limitation.--A former State insurance commissioner 
     appointed as described in clause (i) may not be employed by 
     or have any present direct or indirect financial interest in 
     any insurer, insurance producer, or other entity in the 
     insurance industry, other than direct or indirect ownership 
     of, or beneficial interest in, an insurance policy or annuity 
     contract written or sold by an insurer.
       ``(D) Service through term.--If a Board member appointed 
     under paragraph (1)(A) ceases to be a State insurance 
     commissioner during the term of the Board member, the Board 
     member shall cease to be a Board member.
       ``(3) Private sector representatives.--In making any 
     appointment pursuant to subparagraph (B) or (C) of paragraph 
     (1), the President may seek recommendations for candidates 
     from groups representing the category of individuals 
     described, which shall not be binding on the President.
       ``(4) State insurance commissioner defined.--For purposes 
     of this subsection, the term `State insurance commissioner' 
     means a person who serves in the position in State 
     government, or on the board, commission, or other body that 
     is the primary insurance regulatory authority for the State.
       ``(d) Terms.--
       ``(1) In general.--Except as provided under paragraph (2), 
     the term of service for each Board member shall be 2 years.
       ``(2) Exceptions.--
       ``(A) 1-year terms.--The term of service shall be 1 year, 
     as designated by the President at the time of the nomination 
     of the subject Board members for--
       ``(i) 4 of the State insurance commissioner Board members 
     initially appointed under paragraph (1)(A), of whom not more 
     than 2 shall belong to the same political party;
       ``(ii) 1 of the Board members initially appointed under 
     paragraph (1)(B); and
       ``(iii) 1 of the Board members initially appointed under 
     paragraph (1)(C).
       ``(B) Expiration of term.--A Board member may continue to 
     serve after the expiration of the term to which the Board 
     member was appointed for the earlier of 2 years or until a 
     successor is appointed.
       ``(C) Mid-term appointments.--A Board member appointed to 
     fill a vacancy occurring before the expiration of the term 
     for which the predecessor of the Board member was appointed 
     shall be appointed only for the remainder of that term.
       ``(3) Successive terms.--Board members may be reappointed 
     to successive terms.
       ``(e) Initial Appointments.--The appointment of initial 
     Board members shall be made no later than 90 days after the 
     date of enactment of the National Association of Registered 
     Agents and Brokers Reform Act of 2014.
       ``(f) Meetings.--
       ``(1) In general.--The Board shall meet--
       ``(A) at the call of the chairperson;
       ``(B) as requested in writing to the chairperson by not 
     fewer than 5 Board members; or
       ``(C) as otherwise provided by the bylaws of the 
     Association.
       ``(2) Quorum required.--A majority of all Board members 
     shall constitute a quorum.
       ``(3) Voting.--Decisions of the Board shall require the 
     approval of a majority of all Board members present at a 
     meeting, a quorum being present.

[[Page 17444]]

       ``(4) Initial meeting.--The Board shall hold its first 
     meeting not later than 45 days after the date on which all 
     initial Board members have been appointed.
       ``(g) Restriction on Confidential Information.--Board 
     members appointed pursuant to subparagraphs (B) and (C) of 
     subsection (c)(1) shall not have access to confidential 
     information received by the Association in connection with 
     complaints, investigations, or disciplinary proceedings 
     involving insurance producers.
       ``(h) Ethics and Conflicts of Interest.--The Board shall 
     issue and enforce an ethical conduct code to address 
     permissible and prohibited activities of Board members and 
     Association officers, employees, agents, or consultants. The 
     code shall, at a minimum, include provisions that prohibit 
     any Board member or Association officer, employee, agent or 
     consultant from--
       ``(1) engaging in unethical conduct in the course of 
     performing Association duties;
       ``(2) participating in the making or influencing the making 
     of any Association decision, the outcome of which the Board 
     member, officer, employee, agent, or consultant knows or had 
     reason to know would have a reasonably foreseeable material 
     financial effect, distinguishable from its effect on the 
     public generally, on the person or a member of the immediate 
     family of the person;
       ``(3) accepting any gift from any person or entity other 
     than the Association that is given because of the position 
     held by the person in the Association;
       ``(4) making political contributions to any person or 
     entity on behalf of the Association; and
       ``(5) lobbying or paying a person to lobby on behalf of the 
     Association.
       ``(i) Compensation.--
       ``(1) In general.--Except as provided in paragraph (2), no 
     Board member may receive any compensation from the 
     Association or any other person or entity on account of Board 
     membership.
       ``(2) Travel expenses and per diem.--Board members may be 
     reimbursed only by the Association for travel expenses, 
     including per diem in lieu of subsistence, at rates 
     consistent with rates authorized for employees of Federal 
     agencies under subchapter I of chapter 57 of title 5, United 
     States Code, while away from home or regular places of 
     business in performance of services for the Association.

     ``SEC. 325. BYLAWS, STANDARDS, AND DISCIPLINARY ACTIONS.

       ``(a) Adoption and Amendment of Bylaws and Standards.--
       ``(1) Procedures.--The Association shall adopt procedures 
     for the adoption of bylaws and standards that are similar to 
     procedures under subchapter II of chapter 5 of title 5, 
     United States Code (commonly known as the `Administrative 
     Procedure Act').
       ``(2) Copy required to be filed.--The Board shall submit to 
     the President, through the Department of the Treasury, and 
     the States (including State insurance regulators), and shall 
     publish on the website of the Association, all proposed 
     bylaws and standards of the Association, or any proposed 
     amendment to the bylaws or standards of the Association, 
     accompanied by a concise general statement of the basis and 
     purpose of such proposal.
       ``(3) Effective date.--Any proposed bylaw or standard of 
     the Association, and any proposed amendment to the bylaws or 
     standards of the Association, shall take effect, after notice 
     under paragraph (2) and opportunity for public comment, on 
     such date as the Association may designate, unless suspended 
     under section 329(c).
       ``(4) Rule of construction.--Nothing in this section shall 
     be construed to subject the Board or the Association to the 
     requirements of subchapter II of chapter 5 of title 5, United 
     States Code (commonly known as the `Administrative Procedure 
     Act').
       ``(b) Disciplinary Action by the Association.--
       ``(1) Specification of charges.--In any proceeding to 
     determine whether membership shall be denied, suspended, 
     revoked, or not renewed, or to determine whether a member of 
     the Association should be placed on probation (referred to in 
     this section as a `disciplinary action') or whether to assess 
     fines or monetary penalties, the Association shall bring 
     specific charges, notify the member of the charges, give the 
     member an opportunity to defend against the charges, and keep 
     a record.
       ``(2) Supporting statement.--A determination to take 
     disciplinary action shall be supported by a statement setting 
     forth--
       ``(A) any act or practice in which the member has been 
     found to have been engaged;
       ``(B) the specific provision of this subtitle or standard 
     of the Association that any such act or practice is deemed to 
     violate; and
       ``(C) the sanction imposed and the reason for the sanction.
       ``(3) Ineligibility of private sector representatives.--
     Board members appointed pursuant to section 324(c)(3) may 
     not--
       ``(A) participate in any disciplinary action or be counted 
     toward establishing a quorum during a disciplinary action; 
     and
       ``(B) have access to confidential information concerning 
     any disciplinary action.

     ``SEC. 326. POWERS.

       ``In addition to all the powers conferred upon a nonprofit 
     corporation by the District of Columbia Nonprofit Corporation 
     Act, the Association shall have the power to--
       ``(1) establish and collect such membership fees as the 
     Association finds necessary to impose to cover the costs of 
     its operations;
       ``(2) adopt, amend, and repeal bylaws, procedures, or 
     standards governing the conduct of Association business and 
     performance of its duties;
       ``(3) establish procedures for providing notice and 
     opportunity for comment pursuant to section 325(a);
       ``(4) enter into and perform such agreements as necessary 
     to carry out the duties of the Association;
       ``(5) hire employees, professionals, or specialists, and 
     elect or appoint officers, and to fix their compensation, 
     define their duties and give them appropriate authority to 
     carry out the purposes of this subtitle, and determine their 
     qualification;
       ``(6) establish personnel policies of the Association and 
     programs relating to, among other things, conflicts of 
     interest, rates of compensation, where applicable, and 
     qualifications of personnel;
       ``(7) borrow money; and
       ``(8) secure funding for such amounts as the Association 
     determines to be necessary and appropriate to organize and 
     begin operations of the Association, which shall be treated 
     as loans to be repaid by the Association with interest at 
     market rate.

     ``SEC. 327. REPORT BY THE ASSOCIATION.

       ``(a) In General.--As soon as practicable after the close 
     of each fiscal year, the Association shall submit to the 
     President, through the Department of the Treasury, and the 
     States (including State insurance regulators), and shall 
     publish on the website of the Association, a written report 
     regarding the conduct of its business, and the exercise of 
     the other rights and powers granted by this subtitle, during 
     such fiscal year.
       ``(b) Financial Statements.--Each report submitted under 
     subsection (a) with respect to any fiscal year shall include 
     audited financial statements setting forth the financial 
     position of the Association at the end of such fiscal year 
     and the results of its operations (including the source and 
     application of its funds) for such fiscal year.

     ``SEC. 328. LIABILITY OF THE ASSOCIATION AND THE BOARD 
                   MEMBERS, OFFICERS, AND EMPLOYEES OF THE 
                   ASSOCIATION.

       ``(a) In General.--The Association shall not be deemed to 
     be an insurer or insurance producer within the meaning of any 
     State law, rule, regulation, or order regulating or taxing 
     insurers, insurance producers, or other entities engaged in 
     the business of insurance, including provisions imposing 
     premium taxes, regulating insurer solvency or financial 
     condition, establishing guaranty funds and levying 
     assessments, or requiring claims settlement practices.
       ``(b) Liability of Board Members, Officers, and 
     Employees.--No Board member, officer, or employee of the 
     Association shall be personally liable to any person for any 
     action taken or omitted in good faith in any matter within 
     the scope of their responsibilities in connection with the 
     Association.

     ``SEC. 329. PRESIDENTIAL OVERSIGHT.

       ``(a) Removal of Board.--If the President determines that 
     the Association is acting in a manner contrary to the 
     interests of the public or the purposes of this subtitle or 
     has failed to perform its duties under this subtitle, the 
     President may remove the entire existing Board for the 
     remainder of the term to which the Board members were 
     appointed and appoint, in accordance with section 324 and 
     with the advice and consent of the Senate, in accordance with 
     the procedures established under Senate Resolution 116 of the 
     112th Congress, new Board members to fill the 
     vacancies on the Board for the remainder of the terms.
       ``(b) Removal of Board Member.--The President may remove a 
     Board member only for neglect of duty or malfeasance in 
     office.
       ``(c) Suspension of Bylaws and Standards and Prohibition of 
     Actions.--Following notice to the Board, the President, or a 
     person designated by the President for such purpose, may 
     suspend the effectiveness of any bylaw or standard, or 
     prohibit any action, of the Association that the President or 
     the designee determines is contrary to the purposes of this 
     subtitle.

     ``SEC. 330. RELATIONSHIP TO STATE LAW.

       ``(a) Preemption of State Laws.--State laws, regulations, 
     provisions, or other actions purporting to regulate insurance 
     producers shall be preempted to the extent provided in 
     subsection (b).
       ``(b) Prohibited Actions.--
       ``(1) In general.--No State shall--
       ``(A) impede the activities of, take any action against, or 
     apply any provision of law or regulation arbitrarily or 
     discriminatorily to, any insurance producer because that 
     insurance producer or any affiliate plans to become, has 
     applied to become, or is a member of the Association;
       ``(B) impose any requirement upon a member of the 
     Association that it pay fees different from those required to 
     be paid to that State were it not a member of the 
     Association; or
       ``(C) impose any continuing education requirements on any 
     nonresident insurance producer that is a member of the 
     Association.

[[Page 17445]]

       ``(2) States other than a home state.--No State, other than 
     the home State of a member of the Association, shall--
       ``(A) impose any licensing, personal or corporate 
     qualifications, education, training, experience, residency, 
     continuing education, or bonding requirement upon a member of 
     the Association that is different from the criteria for 
     membership in the Association or renewal of such membership;
       ``(B) impose any requirement upon a member of the 
     Association that it be licensed, registered, or otherwise 
     qualified to do business or remain in good standing in the 
     State, including any requirement that the insurance producer 
     register as a foreign company with the secretary of state or 
     equivalent State official;
       ``(C) require that a member of the Association submit to a 
     criminal history record check as a condition of doing 
     business in the State; or
       ``(D) impose any licensing, registration, or appointment 
     requirements upon a member of the Association, or require a 
     member of the Association to be authorized to operate as an 
     insurance producer, in order to sell, solicit, or negotiate 
     insurance for commercial property and casualty risks to an 
     insured with risks located in more than one State, if the 
     member is licensed or otherwise authorized to operate in the 
     State where the insured maintains its principal place of 
     business and the contract of insurance insures risks located 
     in that State.
       ``(3) Preservation of state disciplinary authority.--
     Nothing in this section may be construed to prohibit a State 
     from investigating and taking appropriate disciplinary 
     action, including suspension or revocation of authority of an 
     insurance producer to do business in a State, in accordance 
     with State law and that is not inconsistent with the 
     provisions of this section, against a member of the 
     Association as a result of a complaint or for any alleged 
     activity, regardless of whether the activity occurred before 
     or after the insurance producer commenced doing business in 
     the State pursuant to Association membership.

     ``SEC. 331. COORDINATION WITH FINANCIAL INDUSTRY REGULATORY 
                   AUTHORITY.

       ``The Association shall coordinate with the Financial 
     Industry Regulatory Authority in order to ease any 
     administrative burdens that fall on members of the 
     Association that are subject to regulation by the Financial 
     Industry Regulatory Authority, consistent with the 
     requirements of this subtitle and the Federal securities 
     laws.

     ``SEC. 332. RIGHT OF ACTION.

       ``(a) Right of Action.--Any person aggrieved by a decision 
     or action of the Association may, after reasonably exhausting 
     available avenues for resolution within the Association, 
     commence a civil action in an appropriate United States 
     district court, and obtain all appropriate relief.
       ``(b) Association Interpretations.--In any action under 
     subsection (a), the court shall give appropriate weight to 
     the interpretation of the Association of its bylaws and 
     standards and this subtitle.

     ``SEC. 333. FEDERAL FUNDING PROHIBITED.

       ``The Association may not receive, accept, or borrow any 
     amounts from the Federal Government to pay for, or reimburse, 
     the Association for, the costs of establishing or operating 
     the Association.

     ``SEC. 334. DEFINITIONS.

       ``For purposes of this subtitle, the following definitions 
     shall apply:
       ``(1) Business entity.--The term `business entity' means a 
     corporation, association, partnership, limited liability 
     company, limited liability partnership, or other legal 
     entity.
       ``(2) Depository institution.--The term `depository 
     institution' has the meaning as in section 3 of the Federal 
     Deposit Insurance Act (12 U.S.C. 1813).
       ``(3) Home state.--The term `home State' means the State in 
     which the insurance producer maintains its principal place of 
     residence or business and is licensed to act as an insurance 
     producer.
       ``(4) Insurance.--The term `insurance' means any product, 
     other than title insurance or bail bonds, defined or 
     regulated as insurance by the appropriate State insurance 
     regulatory authority.
       ``(5) Insurance producer.--The term `insurance producer' 
     means any insurance agent or broker, excess or surplus lines 
     broker or agent, insurance consultant, limited insurance 
     representative, and any other individual or entity that 
     sells, solicits, or negotiates policies of insurance or 
     offers advice, counsel, opinions or services related to 
     insurance.
       ``(6) Insurer.--The term `insurer' has the meaning as in 
     section 313(e)(2)(B) of title 31, United States Code.
       ``(7) Principal place of business.--The term `principal 
     place of business' means the State in which an insurance 
     producer maintains the headquarters of the insurance producer 
     and, in the case of a business entity, where high-level 
     officers of the entity direct, control, and coordinate the 
     business activities of the business entity.
       ``(8) Principal place of residence.--The term `principal 
     place of residence' means the State in which an insurance 
     producer resides for the greatest number of days during a 
     calendar year.
       ``(9) State.--The term `State' includes any State, the 
     District of Columbia, any territory of the United States, and 
     Puerto Rico, Guam, American Samoa, the Trust Territory of the 
     Pacific Islands, the Virgin Islands, and the Northern Mariana 
     Islands.
       ``(10) State law.--
       ``(A) In general.--The term `State law' includes all laws, 
     decisions, rules, regulations, or other State action having 
     the effect of law, of any State.
       ``(B) Laws applicable in the district of columbia.--A law 
     of the United States applicable only to or within the 
     District of Columbia shall be treated as a State law rather 
     than a law of the United States.''.
       (b) Technical Amendment.--The table of contents for the 
     Gramm-Leach-Bliley Act is amended by striking the items 
     relating to subtitle C of title III and inserting the 
     following new items:

  ``Subtitle C--National Association of Registered Agents and Brokers

``Sec. 321. National Association of Registered Agents and Brokers.
``Sec. 322. Purpose.
``Sec. 323. Membership.
``Sec. 324. Board of directors.
``Sec. 325. Bylaws, standards, and disciplinary actions.
``Sec. 326. Powers.
``Sec. 327. Report by the Association.
``Sec. 328. Liability of the Association and the Board members, 
              officers, and employees of the Association.
``Sec. 329. Presidential oversight.
``Sec. 330. Relationship to State law.
``Sec. 331. Coordination with financial industry regulatory authority.
``Sec. 332. Right of action.
``Sec. 333. Federal funding prohibited.
``Sec. 334. Definitions.''.

      TITLE III--BUSINESS RISK MITIGATION AND PRICE STABILIZATION

     SEC. 301. SHORT TITLE.

       This title may be cited as the ``Business Risk Mitigation 
     and Price Stabilization Act of 2014''.

     SEC. 302. MARGIN REQUIREMENTS.

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

     SEC. 303. IMPLEMENTATION.

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

  The SPEAKER pro tempore. The gentleman from Texas (Mr. Hensarling), 
and the gentlewoman from California (Ms. Waters) each will control 30 
minutes.
  The Chair recognizes the gentleman from Texas.


                             General Leave

  Mr. HENSARLING. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days within which to revise and extend their remarks 
and include extraneous material in the Record on S. 2244, currently 
under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. HENSARLING. Mr. Speaker, I yield myself such time as I may 
consume.

[[Page 17446]]

  We have an incredible opportunity before us in the House today, and 
that is to move significant bipartisan legislation that can accomplish 
a number of purposes and that will bring greater stability and 
certainty to the construction markets, to our insurance companies in 
dealing with the Terrorism Risk Insurance Act. We can also bring 
greater certainty and stability to our small factories, to our farmers, 
and to our ranchers--those who are still suffering in this economy. We 
can bring them certainty and stability by taking care of an unintended 
consequence of the Dodd-Frank Act, something called the ``end user 
exception'' in the derivative title, which may just be, as interpreted, 
one of the most damaging regulations that many in this body, perhaps, 
have not heard of.
  Again, Mr. Speaker, this is legislation that has been worked on in a 
bipartisan manner, sometimes a little contentiously, but we have ended 
up in a place where, I believe, both Republicans and Democrats in the 
House and Senate should be able to come together.
  I think it is important to remember, Mr. Speaker, that, particularly 
as we go into the holiday season--as we go into Christmas--how many 
working men and women are still lying awake at night, wondering how 
they are going to be able to fund Christmas for their children at this 
time. Although we have seen some modest improvements in this economy, 
there are still over 9 million of our fellow countrymen who are 
unemployed. Of the number of underemployed--those who wish to have 
full-time work but who cannot find it--it is almost twice the number, 
at 18 million. We have 46 million of our fellow countrymen still on 
food stamps and 45 million at the poverty rate.
  One of the most important things we can do here, Mr. Speaker, is to 
be able to make a positive contribution for financial stability on our 
household economies, to give greater economic opportunity, particularly 
at this time, and that is one of the aspects of S. 2244.
  We have had a debate about the Terrorism Risk Insurance Act in this 
body. I was authorized on behalf of the House to negotiate this 
particular part of this bill, along with Senator Schumer, the gentleman 
from New York, on the Senate side. Over the course of several weeks and 
several meetings, we have negotiated language on this. Certainly, it 
doesn't give everything the House wants, and it doesn't give everything 
the Senate wants. Such is the nature of negotiations in a free society 
with divided government. For those who care passionately about the 
reauthorization, this is a long-term reauthorization bill, which most 
Members have asked for. It is a 6-year reauthorization.
  For those who care about taxpayer protections, as I do, there were 
improvements for taxpayer protection. The trigger level has been 
doubled before TRIA kicks in, meaning there is greater coverage by the 
insurance companies, a little less for the taxpayers. As for an 
artificial ceiling on what the industry will contribute, that 
artificial ceiling now ceases to be in S. 2244. For the first time, 
taxpayers will actually get some modest rate of return should they be 
called upon under TRIA to backstop. These are important improvements, 
and I think conservative and liberal and Republican and Democrat, 
hopefully, will see something worthy here.
  I will point out it is disconcerting--it is disturbing--that those 
who have backed so many other provisions in this bill now want to say 
``no'' to being able to have a long-term TRIA reauthorization passed. 
This bill before us includes this end user exemption, which is so 
important. This isn't for Wall Street. This is for Main Street. It is 
for a cattle producer in Kansas, named Tracy Brunner, who said:

       This mistaken language in Dodd-Frank may very well force me 
     out of the market, subjecting me to even greater risk. My 
     operation is family run. We are not responsible for the 
     failures that led to the passage of Dodd-Frank.

  Yet his family-owned farm in Kansas--1,500 miles away from Wall 
Street--suffers.
  Even the ranking member has acknowledged that there have been some 
unintended consequences to Dodd-Frank. Recently, she was one of 412 
Members of this House to vote in favor of the end user exception, which 
she, herself, called a ``clarification''--not an amendment, not a 
change, but a clarification.
  Mr. Speaker, even Mr. Dodd and Mr. Frank of Dodd-Frank, over 4 years 
ago in colloquy on the House floor and on the Senate floor, said that 
these provisions were never meant to harm Main Street America; never 
meant to apply to end users; never meant to apply to the farmers, the 
ranchers, and the small factory workers.
  We have an opportunity to do something very positive. Now, all of a 
sudden, some across the aisle have said: We can't do this. We believe 
this is unrelated to TRIA.
  Why did the United States Senate, Mr. Speaker, put in a provision 
that makes a radical change in the requirements to serve on the Board 
of Governors of the Federal Reserve? What did that have to do with 
TRIA? The Senate put that in. NARAB, the National Association of 
Registered Agents and Brokers--the Senate put that in. Two-thirds of 
this bill is about NARAB. The Senate put it in.
  Mr. Speaker, I am not debating the underlying policy issues, but it 
is, at best, a little bit disconcerting, if not disingenuous, to say, 
my Lord, the House shouldn't put in an unrelated provision when the 
Senate just did it twice.
  Then we heard the Senate will not open up Dodd-Frank. What is the 
Collins amendment? The Collins amendment was sent over by the Senate, 
not as part of this legislation. They opened up Dodd-Frank. Then again, 
to quote the ranking member, this is a ``clarification.''
  We have an opportunity to pass a bipartisan bill not only to bring 
some stability and certainty to our insurance markets and to our 
builders, but to farmers and ranchers and small businesses and hurting 
families at this holiday season. Without any further delay, we should 
enact S. 2244, as amended.
  I reserve the balance of my time.
  Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
  I rise today to shine a light on what has happened in the development 
of the Terrorism Risk Insurance Program Reauthorization Act. I rise 
today to talk about the fact that the chairman of our committee, of the 
Financial Services Committee, did not want, at one point, to 
reauthorize terrorism risk insurance at all, so he strung out the 
possibility of negotiations for months.
  He had decided that he was not going to reauthorize terrorism 
insurance, and he will tell you that he offered to negotiate with me. 
The only thing that I ever remember about a conversation that we had 
was that my chairman said: I will only negotiate this once--starting 
out in bad faith.
  Time went on, and at some point in time, somebody convinced him that 
to reauthorize the Terrorism Risk Insurance Program was an honorable 
thing to do, that it was an American thing to do, that it was an 
important thing to do. This program had been passed and signed on by 
the President of the United States after 9/11.
  The insurance companies, which insure risk, basically said they 
cannot model terrorism acts. After 9/11, it was decided that we would 
mandate that they insure but that we would provide a backstop, that we 
would provide a backstop to ensure that we could rebuild our 
communities, that we could rebuild these huge venues--these important 
places in our lives--in the case of a terrorism attack.
  When Mr. Hensarling finally decided that he would negotiate, he ended 
up in negotiations with Mr. Schumer. Mr. Schumer and the Democrats 
basically conceded and gave in on a lot of things. We supported, 
originally, the Senate bill. We thought the Senate bill was a fine bill 
that reauthorized terrorism risk for 7 years; and, of course, it had in 
it the backstop after $100 million was spent by the industry, and it 
basically did everything that we wanted it to have done just as it had 
started out to do.
  Mr. Hensarling came along, and he decided that he wanted to reduce 
the

[[Page 17447]]

time of the reauthorization. I don't know what he started out with, but 
we ended up with 6 years instead of 7 years. We gave in.
  I remember that he wanted bifurcation in the bill. He wanted to 
distinguish between what kind of terrorist attack, how much it was 
worth, and whether some of it was worse than others. He talked about 
bifurcating in ways that you would distinguish between radiological, 
biological, chemical, and others. We negotiated and negotiated, and, 
finally, we got that out of Mr. Hensarling's mind about bifurcation.

                              {time}  1530

  Then the gentleman from Texas (Mr. Hensarling) said that we needed to 
reduce our backstop. And instead of backstopping after $100 million, 
first he talked about $500 million, secondly he talked about $250 
million, and finally we got him down to $200 million. And it is over a 
5-year period of time. So we said, okay. We negotiated in good faith. 
We will go along with the changes. We are willing to concede that you 
have some different thoughts, and that is okay. Let's come together in 
a bipartisan way and support the reauthorization of terrorism risk 
insurance.
  I was informed later on that my chairman came back to the table with 
any number of things that had nothing to do with terrorism risk 
insurance but had more to do with Dodd-Frank because, unfortunately, my 
chairman and too many Members on the opposite side of the aisle are 
intent on dismantling Dodd-Frank in any and every way that they 
possibly can.
  And finally, in those negotiations--the way it has been explained to 
me--they agreed that they would allow him to add just one aspect of the 
Dodd-Frank bill that had passed this House, to talk about how 
agriculture and some other industries could lock in some prices so that 
they could look forward to what a price would be on those commodities, 
et cetera, that they would have to purchase.
  This had nothing to do with terrorism insurance. So I am not saying 
to the Members that you shouldn't vote for this bill. What I am 
pointing out is that this is just another attempt for the chairman to 
indicate in every way that he possibly can and take advantage of any 
opportunity that presents itself to get a little something in about 
Dodd-Frank.
  What I worry about is not so much what he has put into TRIA; I worry 
about what is going into the omnibus bill. I worry about the fact that, 
in addition to this, there is an attempt--if it has not already been 
done--to place into the omnibus bill a repeal of part of Dodd-Frank 
that would prevent the biggest banks in America from taking advantage 
of our consumers by using their hard-earned money to do risky 
derivatives trading, which should be pushed out into their subsidiaries 
and not have the FDIC in any way protect them in doing this.
  So what I say is this. We should know and we should understand 
exactly how the process works. We should know and understand what is 
being done and why it is being done. If, in fact, there is so much care 
and concern about TRIA reauthorization, we should have a clean bill 
with nothing else in it. If we want to debate Dodd-Frank--what we don't 
like about it, what we like about it--let's do it straight up. Let's 
not slip it in at the eleventh hour at a time when our backs are up 
against the wall, at a time when we are closing down this session. And 
that is what I am opposed to.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield myself 20 seconds to thank the 
ranking member for her fascinating, elongated narrative that proves 
just how reasonable House Republicans were in this negotiation.
  I have to correct her yet again, though, and say that I have never 
said publicly or privately that we should allow the Federal backstop of 
terrorism to lapse. She is entitled to her own opinions. She is not 
entitled to her own facts.
  The SPEAKER pro tempore (Mr. Terry). The time of the gentleman has 
expired.
  Mr. HENSARLING. I yield myself an additional 10 seconds.
  And previously she has said that she has been in favor of this 
provision. She has been in favor of the end user exemption and has said 
the bill would clarify the intent of the Wall Street Reform Act. I urge 
the committee to adopt the bill.
  So she was for it before she was against it. But whether it be 
Biggert-Waters, whether it be Export-Import, whether it be end user, 
she has changed her mind frequently.
  I now yield 2 minutes to the gentleman from North Carolina (Mr. 
McHenry), the chief deputy majority whip.
  Mr. McHENRY. Mr. Speaker, I first want to commend Chairman Hensarling 
for bringing this bipartisan agreement and construct to the House 
floor. It extends a very important Federal backstop against the risk of 
terror on the American people, small businesses, and substantial 
businesses as well. As I have said in the past, it is very important 
that we reauthorize the TRIA program, and the chairman incorporated 
diverse opinions, including those from across the aisle.
  I also want to commend our colleagues from New York, Congressman 
Grimm and Congressman King, for the important work that they did to 
bring this about today.
  As amended, the bill will ensure that terrorism risk protection is 
available for the next 6 years, while lessening the taxpayer burden.
  Since September 11, the TRIA program has provided an important 
Federal backstop for businesses that must insure against the 
devastation of a future attack.
  Congressman Hensarling has worked with our friends across the aisle 
to make commonsense changes to this program while ensuring that both 
businesses and taxpayers are not exposed to the risk of future 
terrorism attacks.
  In addition, as amended, this bill will make some very important 
technical changes to the Dodd-Frank Act by protecting manufacturers, 
ranchers, and small businesses that need to hedge against business 
risk.
  While this legislation will become law--and I expect a substantial 
number of my Democratic colleagues to cross the aisle and vote with 
almost all of the House Republicans and the Democrat Senate to pass 
this, and a Democrat President to sign this--I urge my other colleagues 
on the other side of the aisle to come on over. It is a good reform, a 
necessary reform, and it is going to be a fantastic strong vote that we 
are going to have in the House of Representatives to do the right 
thing, both for the taxpayer, the American people, and small 
businesses, while at the same time protecting against the devastation 
of a future attack.
  I thank the chairman and I also thank subcommittee chair, Mr. 
Neugebauer, for their work on this very important program. It has been 
a long process, but it shows that the Financial Services Committee can 
get the deal done.
  Ms. WATERS. Mr. Speaker, I yield myself 1 minute to correct the 
gentleman from North Carolina (Mr. McHenry) who is inviting us to come 
on over.
  We have been inviting them, from day one, to come up with a terrorism 
risk insurance bill reauthorization. So we have been inviting them to 
come on over. We have had Members on the opposite side of the aisle who 
have been pleading with them to come over. We have always had 100 
percent support on the Democratic side for the reauthorization of 
terrorism risk insurance, and the Republicans have basically held us up 
and only negotiated at the last minute. Don't invite us to come over. 
They can come on over with us.
  I yield 3 minutes to the gentlewoman from New York (Mrs. Carolyn B. 
Maloney).
  (Mrs. CAROLYN B. MALONEY of New York asked and was given permission 
to revise and extend her remarks.)
  Mrs. CAROLYN B. MALONEY of New York. I thank the ranking member for 
her leadership and for yielding and for her hard work on this important 
bill.
  Mr. Speaker, I rise in support of S. 2244, which is critically 
important to the economy and national security of

[[Page 17448]]

the city I am privileged to represent, New York, and to our Nation at 
large.
  After the terrible attacks on 9/11, insurers realized that they could 
not accurately model for terrorism risk--it was simply too 
unpredictable, and the market for terrorism insurance completely dried 
up. No one could get insured. Businesses stopped. The only place we 
could get insured was Lloyd's of London, and we lost thousands of jobs 
and our economy came to a standstill.
  In response, Congress came together, united and determined, and, in a 
bipartisan way, passed the Terrorism Risk Insurance Act, or TRIA, which 
provides a government backstop for terrorism insurance.
  The goal of TRIA was to make terrorism insurance affordable and 
available, and that is exactly what it has done. This has come at no 
cost whatsoever to the American taxpayer.
  This bill represents a true bipartisan compromise, and I commend the 
gentlemen from Texas, Chairmen Hensarling and Neugebauer, for working 
with my colleagues, Senator Schumer and Ranking Member Waters, to reach 
a deal on TRIA.
  Initially, the House TRIA bill raised the trigger for the government 
backstop by a whopping 500 percent, from $100 million to $500 million. 
This would have forced many small- and medium-sized insurers out of the 
market entirely and would have actually decreased the amount of 
terrorism insurance available in our country.
  Fortunately, this compromise bill only raises the trigger for the 
government backstop from $100 million to $200 million. This modest 
increase will ensure that small- and medium-sized insurers are not 
forced out of the market, while also protecting taxpayers. I fully and 
completely support this compromise.
  Importantly, however, the compromise does not include the so-called 
``bifurcation'' proposal, which would have treated nuclear, biological, 
chemical, and radiological attacks differently from the so-called 
``conventional'' terrorism attacks. This made no sense whatsoever, and 
this compromise sensibly drops the proposal entirely.
  Finally, I am pleased that this bill reauthorizes TRIA for a full 6 
years. This will provide much-needed certainty to businesses across our 
country as they expand and create jobs.
  This compromise will ensure that terrorism insurance remains widely 
affordable and available. This has always been the underlying purpose 
of TRIA, and I believe that this bill accomplishes that goal.
  I would like to commend the gentlemen from Texas, Chairman Hensarling 
and Chairman Neugebauer, for recognizing that a long-term 
reauthorization of TRIA is incredibly important for our economy. I 
thank my good friend from New York, Peter King. He has been a tireless 
advocate for TRIA, and without his hard work on this bill, we wouldn't 
be voting on this compromise today. And I thank the gentlewoman from 
California, Ranking Member Waters, for working with me on this bill.
  I would like to particularly thank my colleague from New York, 
Senator Schumer, for his excellent work in negotiating this compromise.
  I urge my colleagues to support this bill because it is the right 
thing to do for America.
  Mr. HENSARLING. Mr. Speaker, I thank the gentlelady from New York, 
the ranking member of the Capital Markets Subcommittee, for her 
support.
  I yield 3 minutes to the gentleman from Texas (Mr. Neugebauer), the 
chairman of the Financial Services Housing and Insurance Subcommittee, 
the champion and author of the House TRIA bill, and the author of the 
amendment here. I thank him for his work.
  Mr. NEUGEBAUER. I thank the chairman.
  Mr. Speaker, there has been a lot of discussion about this bill, and 
people were talking about reforms. And you know what? I think what the 
American people need to understand is why these reforms are important 
to them. The reason they are important to them is, quite honestly, 
right now, the taxpayers in this country are underwriting part of the 
risk for terrorism attacks in this country for the property owners.
  What this bill does is it begins to bring certainty for the industry, 
for the insurers, and also certainty for the people who are building 
the new buildings and apartment houses and shopping centers and other 
types of public facilities. It gives them the certainty of what the 
policy is going to be over the next few years. But I think the 
important part is that the taxpayers are an additional cushion that is 
being put between them and any potential loss.
  One of the things that has been mentioned, we raised the trigger from 
$100 million to $200 million. That is an important part of that. I 
think the other issue that we have tried to do with this in order to 
create this certainty was, we didn't change the overall structure of 
the TRIA program. We have tried to keep it within the confines of how 
it has been operating over the last few years, that way, creating the 
least amount of certainty that we could.
  I think the part that isn't mentioned a lot of times is the fact that 
we did leave in place a deductible, and basically the industry has to 
take the first loss up to about 20 percent of their annualized premium 
for the previous year. Today, on an industry-wide basis, that is about 
$40 billion. So if you have got a $200 million trigger, you have got a 
$40 billion cushion between the taxpayers and a potential loss.
  The other thing that we did in this bill is we said when we get to 
the point where after the deductible the taxpayers start sharing that 
loss, then the taxpayers' portion moves from 85 percent to 80 percent. 
So that is another cushion.
  I think one of the things that we want to let the folks know also is 
that an additional protection that was built into this bill was the 
amount of money that the taxpayers could recover if, in fact, they had 
to put additional money into the TRIA program. So now we have increased 
that amount substantially.

                              {time}  1545

  I am feeling good that we are moving in the right direction, but 
ultimately, what we need to do is get the taxpayers out of the 
insurance business. When you look across the board where the taxpayers 
are having to underwrite insurance-type losses, whether it be flood 
insurance or mortgage insurance, quite honestly, the government doesn't 
do well at pricing those.
  There are some good things in this bill besides the TRIA reform in 
that we have that NARAB II. What is that? Well, that is a good small 
business bill. A lot of people have independent insurance agents in 
their districts or in their communities or in their States that may 
want to write business in other States.
  To do that today, they have to go pass another license, take another 
license in that other State. Under NARAB II, they would be able to take 
their existing license if they meet the requirements in other States 
and follow those laws. They would able to underwrite that.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. HENSARLING. Mr. Speaker, I yield the gentleman an additional 30 
seconds.
  Mr. NEUGEBAUER. Mr. Speaker, the third piece of this legislation that 
is important is that we are going to help farmers, ranchers, and small 
businesses be able to cover the risks that they need without taking a 
lot of their operating capital, putting that operating capital into a 
plant, into equipment so they can hire and create more jobs in America. 
These are all issues that have had bipartisan support in the past.
  Mr. Speaker, I now urge my colleagues: let's do something good for 
the American people, and let's pass S. 2244, as amended.
  Ms. WATERS. Mr. Speaker, I yield 3 minutes to the gentleman from 
Georgia (Mr. David Scott).
  Mr. DAVID SCOTT of Georgia. Thank you very much, Madam Chairman.
  Mr. Speaker, I am sure, as those who are watching this on C-SPAN 
across

[[Page 17449]]

the Nation, we can comfortably say that what we have in motion on the 
floor of the House of Representatives is something that Alexander 
Hamilton leaned over and said to Thomas Jefferson: ``My friend, what we 
have here is an old-fashioned, good old compromise.''
  Compromise, a word that has been out of our lexicon for so long that 
the American people are looking for us to put it back in. Well, that is 
what we have on this floor. It is a compromise.
  Mr. Speaker, I want to thank the ranking member because of her 
tenacity and her leadership because in his vision on the other side, 
the distinguished Chairman Hensarling, who is a very good friend, in 
his own way sought for a $500 million trigger.
  We on our side felt that we wanted to hold to the $100 million 
trigger which is when the actual Federal assistance would go into 
action, and we knew that that was further. I commend the ranking member 
and I certainly commend Mr. Hensarling for agreeing and recognizing 
that we would come to the 200 level.
  I also want to thank Mr. Hensarling for including in this NARAB, that 
is such an important measure, and many people may not realize this, but 
we have worked on NARAB for 10 years in the Financial Services 
Committee. It has been a major part of my whole legislative history in 
this body every year working on it.
  I want to thank you, Chairman Hensarling, for listening to us, 
talking, and agreeing to make this a part of this bill that we have 
before us. Thank you very much for doing that.
  The other part, I want to thank both, and I certainly want to thank 
our ranking member for her wisdom in compromising on the end user. Now, 
we all know of the differences with Dodd-Frank. I tried to have a clear 
view on this, and it was very important that we make this technical 
change, so that we don't let our ranchers, our farmers, and our 
manufacturers--none of which had anything to do with the Wall Street 
debacle and none of which are financial institutions--that we will 
exempt them from the cumbersome and the overbearing need to put margins 
out when they are doing swaps and derivatives.
  Ladies and gentlemen, this is an excellent bill, it is a good bill, 
and it is one that we urge to move forward.
  Mr. HENSARLING. Mr. Speaker, I yield myself 10 seconds just to say I 
heard so many kind words from my friend from Georgia that maybe I need 
to go back and reexamine the bill; but, indeed, compromise is not a 
vice, as long as you are advancing your principles, and both sides can 
advance their principles in this bill.
  Mr. Speaker, I now yield 2 minutes to the gentleman from New York 
(Mr. King), a valued member of the Financial Services Committee, a 
tireless advocate--and occasionally tiring advocate--for TRIA 
reauthorization.
  Mr. KING of New York. Mr. Speaker, I thank the gentleman for yielding 
and for his mostly kind words.
  Very seriously Mr. Speaker, I thank the chairman. At the outset, let 
me thank Chairman Hensarling; Chairman Neugebauer; Ranking Member 
Waters; my good friend, Mrs. Maloney from New York; and also Senator 
Schumer.
  As the gentleman from Georgia said, this has been a long and winding 
road, but we have arrived at a compromise which I believe is worthy of 
the support of all Members of this body, certainly those of us who 
strongly support TRIA.
  I have been a supporter of TRIA going back now 12, 13 years because 
after 9/11, we realized it was absolutely essential that TRIA be 
enacted for not just New York to be rebuilt, but also so that 
construction be allowed to go forward anywhere around the country where 
there could be a risk of a terrorist attack which is why Major League 
Baseball, the NFL, NASCAR, and virtually every large university in the 
country supports TRIA.
  Now, Mr. Speaker, this is a compromise, and it is a compromise where 
all of us can find some fault with it, but the bottom line is the 
essence of TRIA has been sustained, and as we go forward, it is 
essential, I believe--strongly believe--that it be extended.
  Let's make it clear there has not been 1 cent of Federal money 
expended on TRIA, but during the 13 years it has been in effect, we 
have had billions of dollars in construction, jobs, and revenues coming 
into the Federal Government. There is also not one Federal employee 
involved in administering TRIA.
  Mr. Speaker, we are where we are, and 6 years to have that certitude 
is absolutely essential. I respect those on the other side who may have 
objections to added provisions in the bill. I would just say: let us 
keep our eyes on the prize. For those of us who realize how important 
TRIA is, we are never going to get all we want. I happen to fully 
support the provision for end users, but even if I didn't, I would 
still support this bill because it is so essential.
  Mr. Speaker, let me just also say in closing that in addition to 
those I have mentioned, let me also acknowledge Congressman Grimm for 
the outstanding work that he has done on this from the day he first 
came to this body.
  In closing, I urge all Members, both parties and both Houses, to 
support this bill. It is a solid piece of legislation, and all of us 
can be proud for voting for it.
  Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Chairman and Members, a special appreciation to Mr. King who has 
worked very, very hard on both sides of the aisle to try and make sure 
that we did not abandon our citizens in this country and leave them at 
risk in case of a terrorist attack.
  As I said before, Mr. Speaker, my chairman held us up for a long time 
and would not negotiate. He finally came around, but this is typical. 
He mentioned the flood insurance bill. We never could get him to 
negotiate on that, and so we had to bypass him to make sure that we 
didn't put our homeowners at risk. As he mentioned the Ex-Im bill, he 
has only supported extension of that for a short period of time.
  When it comes to helping our citizens and the least of them, it seems 
as if my chairmen have problems with providing for the average citizen 
on Main Street, but no problems when we talk about how we can enhance 
the ability of the biggest banks in America and others to get richer 
and richer. I thought it would be worthwhile to shed some light on 
those comments that he made about Ex-Im and about flood and now about 
TRIA.
  We are glad, we are very happy that he finally saw the light, even if 
he had to insert a little something in it, and he came around, and he 
is now on the side of the people. This is about patriotism. This is 
about American citizens. This is about protecting our cities and our 
neighborhoods at a time when this country has to be sure that it is 
focused on the safety and security of our citizens.
  It is no time to dither around with whether or not we will rebuild 
neighborhoods in these important venues in case of a terrorist attack; 
so, yes, we have a compromise.
  Mr. Speaker, I am so proud of the Democratic side of the aisle on 
this. As I said, Democrats were fully supportive of the reauthorization 
of the terrorism risk insurance program from day one. We have never 
ever wavered. None of us have ever tried in any way to reduce the 
program, to change the trigger, et cetera, but we did compromise as we 
said.
  Now, let me speak to the end user part of this. Yes, I worked with 
Mr. David Scott and others because I have always said that on Dodd-
Frank, that we have a responsibility to implement what is in law, but I 
always said I would support technical changes and I would support ways 
that we work together to straighten out things that were not clear in 
Dodd-Frank. I have never said that I would not be at the table to deal 
with these kinds of technical changes, and I was.
  When I got up today, I didn't speak about being against the bill. I 
spoke about what has happened that led us to this point, why we are at 
the eleventh hour, and the way that the negotiations went on.
  Again, TRIA is important, and it should be reauthorized. I wish it 
had

[[Page 17450]]

been a clean bill. It is not, and I hope that we are not going to have 
to have attempts to undermine Dodd-Frank in every bill that comes along 
where my chairman sees an opportunity to try and slide something in at 
the eleventh hour.
  I hope that when we talk about negotiations and trying to get 
together to compromise, to work on things that are in the best 
interests of this country, that nobody will play games with us, no one 
will lead us to the point where our backs are up against the wall at 
the eleventh hour, but we will openly debate these issues, we will 
listen to the pros and cons on these issues and that we hopefully will 
come together in the best interests of all of the citizens.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HENSARLING. I yield myself 10 seconds for, Mr. Speaker, those who 
may be listening could be confused, as are those in the Chamber. I am 
very curious whether the ranking member is opposed or supporting this 
bill as amended. I yield to the gentlewoman.
  Ms. WATERS. Mr. Chairman, as I said to you when I first got up, I 
said to you I wanted to shine light on the bill.
  Mr. HENSARLING. Does the gentlewoman oppose or support?
  Ms. WATERS. And I have done that.
  Mr. HENSARLING. It is obvious the gentlelady refuses to answer the 
question.
  Ms. WATERS. Before I finish my remarks on this bill, I will tell you 
what my position is.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. HENSARLING. Mr. Speaker, I now yield 2 minutes to the 
distinguished gentleman from Oklahoma (Mr. Lucas), the chairman of the 
Agriculture Committee and a distinguished member of the House Financial 
Services Committee as well.
  Mr. LUCAS. Thank you, Mr. Chairman.
  Mr. Speaker, I rise today in support of S. 2244, a bill to extend the 
expiration date of the Terrorism Risk Insurance Act. Specifically, I 
support H.R. 634, the Business Risk Mitigation and Price Stabilization 
Act that is included as a part of this larger effort.
  Mr. Speaker, H.R. 634 provides critical regulatory relief to end 
users, the market participants, businesses, and job creators that use 
derivatives to manage the risks they face in their daily operations. 
For example, farmers who need to hedge against the volatility of crop 
prices and manufacturers who need to hedge against the rising input 
costs of fuel use derivatives as a part of their business plans.
  During the consideration of the Dodd-Frank Act, Congress clearly 
intended to exempt end users from some of the most costly new 
regulations, such as margin requirements. Margin requirements 
needlessly divert working capital away from job-creating production and 
investment; however, the CFTC has narrowly interpreted the law which 
has negatively impacted end users and their bottom line.
  Mr. Speaker, including the Business Risk Mitigation and Price 
Stabilization Act in today's bill permanently fixes this issue for end 
users. It ensures that those businesses which have been exempted from 
clearing requirements of their trades are also exempted from margining 
their trades, just as Congress always intended.
  The language in H.R. 634 has passed through the Committee on 
Agriculture by a voice vote and then through the House four other 
times. As a stand-alone bill, it passed with the support of 411 
Members. Other times, as part of a larger package, it continued to 
receive overwhelming bipartisan support. The House of Representatives 
has spoken clearly on this issue: end users should not be required to 
post margin on their transactions.
  I thank the chairman for including the Business Risk Mitigation and 
Price Stabilizations Act in today's bill. It is time to give our farms 
and our businesses the relief they need from this costly and damaging 
rule. I urge a vote for TRIA.

                              {time}  1600

  Ms. WATERS. Mr. Speaker, I yield 3 minutes to the gentlewoman from 
New York (Ms. Velazquez).
  (Ms. VELAZQUEZ asked and was given permission to revise and extend 
her remarks.)
  Ms. VELAZQUEZ. Mr. Speaker, I thank the gentlelady for yielding.
  Today I call on my colleagues to pass reauthorization of the 
Terrorism Risk Insurance Program, a public-private partnership that is 
vital to continued economic development across the country.
  Following the tragic events of 9/11, terrorism became uninsurable. 
Many insurers left the market, and rates skyrocketed. As a result, 
thousands of small businesses were impacted, causing job losses and 
hindering the recovery effort. To address the growing market gap, 
Congress passed the Terrorism Risk Insurance Act, creating a Federal 
backstop and enticing insurers back.
  I can say without a doubt, our efforts were successful. I have 
witnessed firsthand how this program has helped New York City recover 
and prosper over the past 12 years. TRIA has provided thousands of 
small businesses with the certainty needed to manage long-term costs, 
grow reliably, and create new jobs. In fact, the program has tripled 
the number of small businesses that have terrorism protection since 
2002. Today, over 60 percent of firms now have coverage.
  TRIA also ensures rates remain affordable. Under the program, 
terrorism coverage averages just 3 to 5 percent of a small business' 
annual insurance premium.
  Is today's bill perfect? No, but it will restore certainty to the 
marketplace and prevent a rate spike that could force two-thirds of 
small businesses to stop carrying coverage.
  Mr. Speaker, the Government Accountability Office has stated that 
terrorism remains an uninsurable risk. In light of such findings, the 
Terrorism Risk Insurance Program continues to be a vital component of 
our economic growth and national security. I urge my colleagues to 
support this bill.
  Mr. HENSARLING. Mr. Speaker, I am prepared to yield a small amount of 
time to any Democrat Member on the floor who intends to vote ``no'' on 
S. 2244, as amended, because I have not heard one say that yet.
  Mr. Speaker, I have no takers.
  I yield 1 minute to the gentleman from Missouri (Mr. Luetkemeyer), 
who is the incoming chairman of our Housing and Insurance Subcommittee.
  Mr. LUETKEMEYER. Mr. Speaker, I thank Chairman Hensarling and 
Chairman Neugebauer for their tireless work on this important issue, 
and I tell my colleagues that while TRIA is an important program, it is 
also in need of reform. This bill that we are considering today does 
just that in a responsible way, and I urge support of it.
  Let there be no mistake: this bill reforms the TRIA program. It takes 
important steps to protect taxpayer dollars and ensure that industry 
has more skin in the game. Also, I remind my colleagues that without 
TRIA, it is entirely possible that taxpayers would be on the hook for 
the entire bill in the wake of a terrorist attack. This legislation 
includes a strong recoupment mechanism and a higher threshold for 
Federal assistance, building a program that has a long-term 
reauthorization with greater protections for taxpayers.
  The legislation we are considering today, however, does more than 
reauthorize TRIA. It also contains important language to ensure 
derivative end users, including farmers, ranchers, utilities, airlines, 
and small businesses, can lock in prices, remove volatility from the 
marketplace, and keep consumer prices stable.
  Without this fix, those farmers, ranchers, and Main Street businesses 
will have to post margin against trades they enter into for the sole 
purpose of managing their commercial risk.
  Mr. Speaker, I urge passage and support of this bill.
  Ms. WATERS. Mr. Speaker, I yield 3 minutes to the gentleman from New 
York (Mr. Meeks).
  Mr. MEEKS. Mr. Speaker, I would like to thank the ranking member for 
her hard work and focus and dedication for getting this done. I know 
that any time you have things added to a bill so

[[Page 17451]]

it is not a clean bill, it makes it difficult. But I thank her and the 
chairman for working together to make this happen because this is a 
major bill, significantly important.
  As we learned, I think, from the impact of the 9/11 terrorist 
attacks, this was substantial. When you look at the losses, it was 
about $32.5 billion, or $42.9 billion in 2013 dollars. It was the 
largest insurance loss in global history at that time. And prior to 9/
11, insurance companies generally covered all of the costs of terrorist 
attacks. After 9/11, terrorism risk insurance quickly became either 
unavailable or very, very expensive and unaffordable. Furthermore, 
premiums for workers' compensation insurance increased significantly, 
and real estate and commercial ventures were stalled because of an 
inability to attain the requisite insurance coverage.
  Now, 9/11 happened in New York, and so, yes, you see New York and New 
York City Members here supporting the bill. But this is not a bill just 
about New York. It is about all of America because they did not attack 
for New York; they attacked New York because it was part of America. We 
don't know, and we pray that we don't have another attack ever on our 
homeland again, but it could be someplace else. It doesn't have to be 
New York. This is when we should rally around as Americans, as 
patriots, to ensure that we continue our economy flowing and moving. 
That is why, even though there are things added and certain things that 
people don't like, we are trying to figure out how we get this right 
because it is too important to America to allow TRIA to expire.
  Furthermore, when you examine TRIA, it costs taxpayers virtually 
nothing, yet it continues to provide tangible benefits to our overall 
economy. TRIA allows for terrorism insurance market stability, 
affordability, and availability so that those in business, et cetera, 
can know, predict, and be confident that we will continue to move on. 
TRIA is a critical part of the U.S. economy's security infrastructure 
and would ensure a swift recovery in the event of a significant 
terrorist attack.
  Now, in New York, I am proud we have the Freedom Towers up because it 
also sends a message, is a symbol to those who don't like us that you 
can't keep us down, that we will get back up on our feet, stronger and 
better than ever, and that is what makes this country the great country 
that we are going to rally around and work with one another.
  So this TRIA bill is significantly important, and I ask my colleagues 
to vote ``yes'' on TRIA.
  Mr. HENSARLING. Mr. Speaker, I yield 1 minute to the gentleman from 
Wisconsin (Mr. Duffy), the incoming chairman of the Oversight and 
Investigations Subcommittee.
  Mr. DUFFY. Mr. Speaker, first I want to commend the chairman of the 
Financial Services Committee for his tenacity and hard work to make 
sure the American taxpayer is protected, on the hook just a little bit 
less for the next terrorism attack that could happen in our country, 
and the private sector is on a little bit more.
  I am encouraged by this bipartisan bill because it ensures that my 
constituents in central, northern, and western Wisconsin can purchase 
affordable terrorism risk insurance. This 6-year reauthorization is a 
backstop for all Americans. This is not just a bill for New York, as my 
friends have mentioned, or Chicago or L.A., but it helps small town 
America. If you have a small mall in your community or for Lambeau 
Field in Green Bay, Wisconsin, they can purchase terrorism risk 
insurance. The reauthorization of this program is incredibly important.
  I want to note one other important part, and that is the requirement 
that we have a community banker as part of the Federal Reserve, making 
sure that as the Fed goes in to a larger role with rules and 
regulations, they have a perspective and a view that takes into account 
small community banks all around America that right now are being 
crushed by overburdensome rules and regulations.
  I commend the chairman on the bill.
  Ms. WATERS. Mr. Speaker, I reserve the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from 
Ohio (Mr. Stivers), a valued member of our committee.
  Mr. STIVERS. Mr. Speaker, I would like to thank the chairman for 
yielding me this time. I appreciate his work on this very important 
bill, as well as the work of the subcommittee chairman, Mr. Neugebauer, 
for this 6-year reauthorization of the terrorism risk insurance bill.
  This bill protects taxpayers by reforming the program to reduce 
potential taxpayer costs associated with the terrorism risk reinsurance 
program. It builds capacity in the private insurance market, and it 
ensures access to terrorism insurance for communities like mine in 
Columbus, Ohio, and southern Ohio, as well as all around America.
  The bill provides meaningful reforms by reducing the government's 
share of losses over time, by increasing the triggering amount over 
time, and ensuring that the Federal recoupment is increased over time. 
It also provides important transparency on data collection that will in 
the future let us know how much money insurance companies are billing 
for terrorism coverage and what the potential exposure is for terrorism 
losses. Those are all good things. The other thing that is good is it 
will build capacity in the private marketplace. When we increase the 
trigger, we build capacity in the private marketplace.
  But the most important thing is the certainty this bill creates. A 
multiyear reauthorization ensures that businesses across Ohio and 
across the entire country get access to terrorism insurance for 
multiple years. It creates certainty. It is good for jobs, and it is 
good for commercial development and construction. I think this bill is 
a very important reform and a great move forward.
  I again want to applaud the chairman for all of his work on it, and I 
applaud the bipartisan support this bill is getting today. I urge my 
colleagues to vote in favor of the bill.
  Mr. HENSARLING. Mr. Chairman, how much time remains?
  The SPEAKER pro tempore. The gentleman from Texas has 7\1/2\ minutes 
remaining. The gentlewoman from California has 6\1/2\ minutes 
remaining.
  Ms. WATERS. I reserve the balance of my time to close.
  Mr. HENSARLING. Mr. Speaker, in that case, I now yield 2 minutes to 
the gentleman from Illinois (Mr. Hultgren), a member of the Financial 
Services Committee.
  Mr. HULTGREN. Mr. Speaker, I rise in support of the TRIA amendment to 
the Senate bill S. 2244 and overall reauthorization, and I really would 
like to commend Chairman Hensarling and his staff for their hard work 
throughout this process.
  TRIA's reauthorization is not a Wall Street or big business issue; I 
believe it is a conservative issue. Illinois and American jobs and 
prosperity are at stake. If TRIA is not authorized, Illinois' small 
insurers may be subject to costly rating downgrades or have to exit 
certain insurance markets altogether, leaving customers in the lurch. 
In the event of an attack, potential targets like Soldier Field or 
Chicago skyscrapers would be left without protection for massive 
economic losses.
  TRIA protects the taxpayers because it sets the terms of how our 
country will cover losses before, instead of after, a terrorist attack.
  The Rand Institute has estimated that it protects our taxpayers by as 
much as $7 billion. TRIA also ensures the continued viability of long-
term construction projects. One estimate found that for the first 14 
months after the 9/11 attack, $15.5 billion of real estate projects in 
17 States were stalled or canceled because of continuing scarcity of 
terrorism insurance. So this backstop either costs very little if it is 
never used, or it saves taxpayers money if it is.
  Each program deserves continuous oversight and periodic review, and 
TRIA is no different. I commend Chairman Hensarling for his commitment 
to examine the program. I believe that

[[Page 17452]]

this reauthorization contains conservative reforms that protect the 
taxpayers from excessive loss and still ensures a functioning terrorism 
insurance market that doesn't punish businesses--such as Illinois' 
small insurers--for offering this much-needed terrorism insurance. The 
end user provision passed by the Financial Services Committee with 
unanimous support sailed through the House with 411 votes. Congress 
should come together to support reasonable, bipartisan reforms that 
provide much-needed relief for Main Street America.
  Mr. HENSARLING. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman 
from North Carolina (Mr. Pittenger), a member of the Financial Services 
Committee.
  Mr. PITTENGER. Mr. Speaker, I rise in support of the bipartisan 
Terrorism Risk Insurance Program Reauthorization, known as TRIA.
  I would like to commend Chairman Hensarling and Congressman 
Neugebauer.
  TRIA does not curtail terrorism, but this legislation does protect 
taxpayers, promotes stable markets, and enhances economic certainty in 
the face of terrorism.
  Another important provision included in this legislation is the 
bipartisan legislation known as the Business Risk Mitigation and Price 
Stabilization Act, which the House has passed by 411-12. This is a 
basic but very important clarification to the highly regulatory Dodd-
Frank Act. This reform will ensure that end users, such as 
manufacturers, ranchers, and small companies, are not subject to the 
burdensome margin and capital surcharge requirements imposed by the 
Dodd-Frank Act.

                              {time}  1615

  Even the creators of Dodd-Frank have argued in favor of exempting 
these end users from margin requirements.
  Without this essential clarification, small Main Street businesses 
will have to post additional margins against trades that they enter 
into for the sole purpose of managing commercial risk.
  These transactions do not pose a systemic risk to our financial 
systems, and they did not cause the 2008 financial crisis. A failure to 
address this issue will cause serious harm to the Main Street economy.
  Instead of investing and expanding their business to create jobs, 
small business owners are being forced to direct resources to comply 
with more burdensome and unnecessary regulations coming out of 
Washington.
  This is not a controversial issue. This is a bipartisan provision 
that 181 Democrats in Congress have already voted for in support. We 
must not play politics with something as important as TRIA, and I urge 
my colleagues to support this legislation.
  Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from 
New York (Mr. Grimm), who for months has played a leading role in 
bringing both the TRIA title and the end user exemption title to S. 
2244.
  Mr. GRIMM. Mr. Speaker, I rise today in strong support of this 
legislation.
  But before I begin, I would like to say a very special thank you to 
Chairman Jeb Hensarling for his outstanding leadership on this bill, as 
well as Chairman Neugebauer and Ranking Member Waters.
  I am proud to have worked so long and so hard in what I would say was 
truly a bipartisan manner, so let me also thank and acknowledge my 
senior Senator from New York, Chuck Schumer, for his tireless efforts 
and for making TRIA reauthorization one of his top priorities.
  I also want to thank my good friend and colleague from New York, 
Peter King, for being such a champion on this issue.
  As someone who witnessed the tragedy of 9/11 firsthand, and as a 
Member whose district saw the greatest loss of life during the 
September 11 attacks, I know all too well the destruction and the 
suffering that is caused by terrorism. However, as a proud New Yorker, 
I have also seen the tremendous recovery, a recovery that has taken 
place since that fateful day. But in order to ensure that such a 
recovery would be possible in the face of, God forbid, a future attack 
on our country, as well as to ensure the further economic development 
across the United States, we must ensure the continuation of TRIA and 
the vitally important insurance coverage that it provides to projects 
and facilities that create so many American jobs, like the pending 
Hudson Yards project in Manhattan, or the Barclay's Center in Brooklyn, 
as well as our hospitals and universities, such as the Staten Island 
University Hospital and the College of Staten Island.
  I would also like to add my strong support for the inclusion of my 
legislation, the Business Risk Mitigation and Price Stabilization Act, 
which passed, I believe, this House with 411 votes right here in this 
Chamber and does anything but undermine Dodd-Frank. In fact, what it 
does, it will actually ensure that commercial end users of derivatives 
contracts will not be subject to costly and unnecessary margin 
requirements that needlessly tie up capital and impede job creation.
  With that, I strongly urge my colleagues to support this critical, 
commonsense legislation.
  Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Chairman and Members, I am pleased that I had an opportunity to 
be on the floor today managing this legislation on behalf of my caucus. 
I am pleased that I was able to shine some light and create some 
transparency on what has transpired over a long period of time. I am 
sorry that it had to take this long. I am sorry that my chairman at 
first refused to support reauthorization. He finally came around and 
that is good. The negotiations took place and there was a compromise. 
That compromise is not everything certainly that we would have wanted, 
but at least it is a compromise that will allow terrorism risk 
insurance program reauthorization. That is extremely important for all 
of the reasons that you have heard on the floor here today.
  I want to say to my friends on the opposite side of the aisle--some 
of whom I talked with when it was unclear what the chairman was going 
to do--I am so pleased that we have been able to relieve your anxiety 
about what was going to happen. I know that many of you early on were 
in support of the reauthorization of the terrorism risk insurance 
program just as it had been framed in the Senate.
  So now we are at the point where we have flushed out the fact that 
this terrorism risk insurance program reauthorization is needed, that 
businesses and our citizens deserve it, and they should have it. We 
have also flushed out that adding to this legislation a Dodd-Frank 
concern was not necessary. It is this kind of interference with the 
process that oftentimes causes confusion. We would hope that this kind 
of legislating would not continue.
  Let's take up these issues in a way that they are clear, that they 
can be debated, that we can hear from both sides of the aisle, we can 
hear the pros and cons, without having to drag it out until the last 
moment when we feel that you have the opposition up against a wall and 
they have no choice but to accept whatever you have done because you 
have a legitimate issue that is before us, even when that issue is 
attached to something that has nothing to do with that main issue.
  Having said that, I am going to move on because we still have work to 
do as we move toward trying to make sure that we do not shut down this 
government, that we have the omnibus bill to fund the government and to 
keep it operating. I am going to move on to deal with the fact that 
just as this was inserted, the end user provision was inserted in this 
bill.
  In the omnibus bill, we have an even more difficult situation to try 
and resolve. As a matter of fact, we know that our citizens are at 
great risk because there is an attempt to repeal an important part of 
the Dodd-Frank legislation. There is an attempt to make sure that 
somehow the biggest banks in America have an opportunity to use the 
taxpayers' dollars to do risky trading and put the taxpayers at risk 
one more time of having to bail out these institutions that have used 
the taxpayers' money that was protected by

[[Page 17453]]

FDIC, have used their money to do this risky trading.
  We simply ask in Dodd-Frank for some of these trades, for some of 
these derivatives trading ideas, not to be placed in such a fashion 
that they would cause us to have to say to our consumers and our 
taxpayers, once again, we are going to have to bail out some big bank 
because they have failed. We need to protect our consumers, we need to 
protect our taxpayers. All they have to do is push out, push out these 
derivatives into their subsidies where they don't have the taxpayers' 
protection.
  So I am going to be working on that. I am going to stand here today 
and say to my chairman, I am going to ask for an ``aye'' vote on the 
Terrorism Risk Insurance Program Reauthorization Act, and I am going to 
vote for it. Will you work with me to pay attention to the omnibus bill 
and help me to negotiate tonight to get out of that bill the risky 
trading that is now being put back in the bill, the same bill that came 
through our committee, that was written by Citicorp, that would allow 
this to happen? Will you work with me to try and prevent this from 
happening and prevent another bailout of the biggest banks in America 
with taxpayers' dollars? I am going to support TRIA. Will the gentleman 
support me getting rid of that in the omnibus bill?
  Mr. HENSARLING. Will the gentlewoman yield?
  Ms. WATERS. I yield to the gentleman from Texas for the answer.
  Mr. HENSARLING. I would point out to the gentlewoman, as I think she 
knows, it was the Democrat Senate who I believe is putting this in the 
bill, so perhaps she could negotiate that with Senator Schumer.
  Ms. WATERS. The gentleman knows that he was involved in the 
negotiation for placing that in the omnibus bill. I have raised a 
question with you, even though you are saying you had nothing to do 
with----
  Mr. HENSARLING. Will the gentlewoman yield on that one point?
  Ms. WATERS. Reclaiming my time, I simply asked the gentleman if he 
would join me in helping, whether he was part of the negotiations or 
not, as the chair of the Financial Services Committee, where this is 
one of the biggest issues that we have been confronted with. I know 
that you care enough about the consumers that you would not want them 
to have to bail out another AIG, another big bank. I know that you 
don't want that. I am simply saying that I am going to support the 
reauthorization of terrorism risk insurance. Will the gentleman support 
helping to get rid of that risky derivative trading opportunity that 
has been placed into the omnibus bill by your side of the aisle?
  The SPEAKER pro tempore. The time of the gentlewoman has expired.
  Mr. HENSARLING. Mr. Speaker, I yield myself the balance of the time.
  I am glad that the ranking member has had yet another change of heart 
from her opposition to S. 2244, as amended, that she articulated last 
evening. It is fascinating to me that as she characterizes other 
Members of Congress as unpredictable, I guess it is somewhat 
predictable now that she will change her opinion. I am glad she did.
  Rarely have I seen in my congressional career a Member of the House 
come to the floor quite so vociferous and quite so grumpy about a bill 
that they have previously supported and now ultimately choose to 
support. Regrettably, frequently when the ranking member comes to the 
floor, we enter into a fact-free zone.
  I have not been involved in any of the negotiations on the omnibus. 
If I were involved, we would have far more Dodd-Frank relief in there, 
since it is a bill that was aimed at Wall Street, hits Main Street, and 
working men and women across our country are collateral damage. Our 
economy has slowed down, families can't find work, they have no 
financial security because of what Dodd-Frank is doing--the sheer 
weight, volume, complexity load of the regulatory burden. As unelected, 
unaccountable bureaucrats try to run this economy, they have run it 
into the ground.
  Be that as it may, I look forward to working with the ranking member 
so that we can get more Dodd-Frank relief to Americans and get this 
country back to work.
  Finally, I once again wish to thank and offer my gratitude to the 
gentleman from Texas, Chairman Neugebauer, whose leadership in bringing 
this bill to the floor was indispensable. He has been a rock throughout 
these proceedings. Every Member who supports the end user exemption, 
who supports the TRIA compromise, owes an incredible debt of gratitude 
to Chairman Neugebauer of Lubbock, Texas. I am proud to serve with him 
on the House Financial Services Committee.
  I urge an ``aye'' vote for all Members of Congress on S. 2244, as 
amended, and I yield back the balance of my time.
  Mr. LUCAS. Mr. Speaker, I am pleased to see the inclusion of H.R. 
634, the Business Risk Mitigation and Price Stability Act, as Title III 
of the Terrorism Risk Insurance Program Reauthorization Act. This 
language, which was also included in H.R. 4413, the Customer Protection 
and End-User Relief Act, provides an important protection to end-users 
from costly margining requirements that will divert need capital away 
from job creation.
  I support of this title, I would like to request that the pertinent 
portions of the Committee on Agriculture report to accompany H.R. 4413 
be included in the appropriate place in the Congressional Record.

                        Title 3--End-User Relief


        SUBTITLE A--END-USER EXEMPTION FROM MARGIN REQUIREMENTS

     Section 311--End-user margin requirements
       Section 311 amends Section 4s(e) of the Commodity Exchange 
     Act (CEA) as added by Section 731 of the Dodd-Frank Act to 
     provide an explicit exemption from margin requirements for 
     swap transactions involving end-users that qualify for the 
     clearing exception under 2(h)(7)(A).
       ``End-users'' are thousands of companies across the United 
     States who utilize derivatives to hedge risks associated with 
     their day-to-day operations, such as fluctuations in the 
     prices of raw materials. Because these businesses do not pose 
     systemic risk, Congress intended that the Dodd-Frank Act 
     provide certain exemptions for end-users to ensure they were 
     not unduly burdened by new margin and capital requirements 
     associated with their derivatives trades that would hamper 
     their ability to expand and create jobs.
       Indeed, Title VII of the Dodd-Frank Act includes an 
     exemption for non-financial end-users from centrally clearing 
     their derivatives trades. This exemption permits end-users to 
     continue trading directly with a counterparty, (also known as 
     trading ``bilaterally,'' or over-the-counter (OTC)) which 
     means their swaps are negotiated privately between two 
     parties and they are not executed and cleared using an 
     exchange or clearinghouse. Generally, it is common for non-
     financial end-users, such as manufacturers, to avoid posting 
     cash margin for their OTC derivative trades. End-users 
     generally will not post margin because they are able to 
     negotiate such terms with their counterparties due to the 
     strength of their own balance sheet or by posting non-cash 
     collateral, such as physical property. End-users typically 
     seek to preserve their cash and liquid assets for 
     reinvestment in their businesses. In recognition of this 
     common practice, the Dodd-Frank Act included an exemption 
     from margin requirements for end-users for OTC trades.
       Section 731 of the Dodd-Frank Act (and Section 764 with 
     respect to security-based swaps) requires margin requirements 
     be applied to swap dealers and major swap participants for 
     swaps that are not centrally cleared. For swap dealers and 
     major swap participants that are banks, the prudential 
     banking regulators (such as the Federal Reserve or Federal 
     Deposit Insurance Corporation) are required to set the margin 
     requirements. For swap dealers and major swap participants 
     that are not banks, the CFTC is required to set the margin 
     requirements. Both the CFTC and the banking regulators have 
     issued their own rule proposals establishing margin 
     requirements pursuant to Section 731.
       Following the enactment of the Dodd-Frank Act in July of 
     2010, uncertainty arose regarding whether this provision 
     permitted the regulators to impose margin requirements on 
     swap dealers when they trade with end-users, which could then 
     result in either a direct or indirect margin requirement on 
     end-users. Subsequently, Senators Blanche Lincoln and Chris 
     Dodd sent a letter to then-Chairmen Barney Frank and Collin 
     Peterson on June 30, 2010, to set forth and clarify 
     congressional intent, stating:

       The legislation does not authorize the regulators to impose 
     margin on end-users, those exempt entities that use swaps to 
     hedge or mitigate commercial risk. If regulators raise the 
     costs of end-user transactions, they may

[[Page 17454]]

     create more risk. It is imperative that the regulators do not 
     unnecessarily divert working capital from our economy into 
     margin accounts, in a way that would discourage hedging by 
     end-users or impair economic growth.

       In addition, statements in the legislative history of 
     section 731 (and Section 764) suggests that Congress did not 
     intend, in enacting this section, to impose margin 
     requirements on nonfinancial end-users engaged in hedging 
     activities, even in cases where they entered into swaps with 
     swap entities.
       In the CFTC's proposed rule on margin, it does not require 
     margin for un-cleared swaps when non-bank swap dealers 
     transact with non-financial end-users. However, the 
     prudential banking regulators proposed rules would require 
     margin be posted by non-financial end-users above certain 
     established thresholds when they trade with swap dealers that 
     are banks. Many of end-users' transactions occur with swap 
     dealers that are banks, so the banking regulators' proposed 
     rule is most relevant, and therefore of most concern, to end-
     users.
       By the prudential banking regulators' own terms, their 
     proposal to require margin stems directly from what they view 
     to be a legal obligation under Title VII. The plain language 
     of section 731 provides that the Agencies adopt rules for 
     covered swap entities imposing margin requirements on all 
     non-cleared swaps. Despite clear congressional intent, those 
     sections do not, by their terms, exclude a swap with a 
     counterparty that is a commercial end-user. By providing an 
     explicit exemption under Title VII through enactment of this 
     provision, the prudential regulators will no longer have a 
     perceived legal obligation, and the congressional intent they 
     acknowledge in their proposed rule will be implemented.
       The Committee notes that in September of 2013, the 
     International Organization of Securities Commissions (IOSCO) 
     and the Bank of International Settlements published their 
     final recommendations for margin requirements for uncleared 
     derivatives. Representatives from a number of U.S. 
     regulators, including the CFTC and the Board of Governors of 
     the Federal Reserve participated in the development of those 
     margin requirements, which are intended to set baseline 
     international standards for margin requirements. It is the 
     intent of the Committee that any margin requirements 
     promulgated under the authority provided in Section 4s of the 
     Commodity Exchange Act should be generally consistent with 
     the international margin standards established by IOSCO.
       On March 14, 2013, at a hearing entitled ``Examining 
     Legislative Improvements to Title VII of the Dodd-Frank 
     Act,'' the following testimony was provided to the Committee 
     with respect to provisions included in Section 311:

       In approving the Dodd-Frank Act, Congress made clear that 
     end-users were not to be subject to margin requirements. 
     Nonetheless, regulations proposed by the Prudential Banking 
     Regulators could require end-users to post margin. This stems 
     directly from what they view to be a legal obligation under 
     Title VII. While the regulations proposed by the CFTC are 
     preferable, they do not provide end-users with the certainty 
     that legislation offers. According to a Coalition for 
     Derivatives End-Users survey, a 3% initial margin requirement 
     could reduce capital spending by as much as $5.1 to $6.7 
     billion among S&P 500 companies alone and cost 100,000 to 
     130,000 jobs. To shed some light on Honeywell's potential 
     exposure to margin requirements, we had approximately $2 
     billion of hedging contracts outstanding at year-end that 
     would be defined as a swap under Dodd-Frank. Applying 3% 
     initial margin and 10% variation margin implies a potential 
     margin requirement of $260 million. Cash deposited in a 
     margin account cannot be productively deployed in our 
     businesses and therefore detracts from Honeywell's financial 
     performance and ability to promote economic growth and 
     protect American jobs.--Mr. James E. Colby, Assistant 
     Treasurer, Honeywell International Inc.

       On May 21, 2013, at a hearing entitled ``The Future of the 
     CFTC: Market Perspectives,'' Mr. Stephen O'Connor, Chairman, 
     ISDA, provided the following testimony with respect to 
     provisions included in Section 311:

       Perhaps most importantly, we do not believe that initial 
     margin will contribute to the shared goal of reducing 
     systemic risk and increasing systemic resilience. When robust 
     variation margin practices are employed, the additional step 
     of imposing initial margin imposes an extremely high cost on 
     both market participants and on systemic resilience with very 
     little countervailing benefit. The Lehman and AIG situations 
     highlight the importance of variation margin. AIG did not 
     follow sound variation margin practices, which resulted in 
     dangerous levels of credit risk building up, ultimately 
     leading to its bailout. Lehman, on the other hand, posted 
     daily variation margin, and while its failure caused shocks 
     in many markets, the variation margin prevented outsized 
     losses in the OTC derivatives markets. While industry and 
     regulators agree on a robust variation margin regime 
     including all appropriate products and counterparties, the 
     further step of moving to mandatory IM [initial margin] does 
     not stand up to any rigorous cost-benefit analysis.

       Based on the extensive background that accompanies the 
     statutory change provided explicitly in Section 311, the 
     Committee intends that initial and variation margin 
     requirements cannot be imposed on uncleared swaps entered 
     into by cooperative entities if they similarly qualify for 
     the CFTC's cooperative exemption with respect to cleared 
     swaps. Cooperative entities did not cause the financial 
     crisis and should not be required to incur substantial new 
     costs associated with posting initial and variation margin to 
     counterparties. In the end, these costs will be borne by 
     their members in the form of higher prices and more limited 
     access to credit, especially in underserved markets, such as 
     in rural America. Therefore the Committee's clear intent when 
     drafting Section 311 was to prohibit the CFTC and prudential 
     regulators, including the Farm Credit Administration, from 
     imposing margin requirements on cooperative entities.

  The SPEAKER pro tempore. All time for debate has expired.
  Pursuant to House Resolution 775, the previous question is ordered on 
the bill, as amended.
  The question is on the third reading of the bill.
  The bill was ordered to be read a third time, and was read the third 
time.
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. NEUGEBAUER. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, this 15-
minute vote on the passage of the bill will be followed by 5-minute 
votes on suspending the rules and concurring in the Senate amendment to 
H.R. 4861; suspending the rules and concurring in the Senate amendment 
to H.R. 2719; and suspending the rules and concurring in the Senate 
amendment to H.R. 1204.
  The vote was taken by electronic device, and there were--yeas 417, 
nays 7, not voting 10, as follows:

                             [Roll No. 557]

                               YEAS--417

     Adams
     Aderholt
     Amodei
     Bachmann
     Bachus
     Barber
     Barletta
     Barr
     Barrow (GA)
     Barton
     Bass
     Beatty
     Becerra
     Benishek
     Bentivolio
     Bera (CA)
     Bilirakis
     Bishop (GA)
     Bishop (NY)
     Bishop (UT)
     Black
     Blackburn
     Blumenauer
     Bonamici
     Boustany
     Brady (PA)
     Brady (TX)
     Braley (IA)
     Brat
     Bridenstine
     Brooks (AL)
     Brooks (IN)
     Brown (FL)
     Brownley (CA)
     Buchanan
     Bucshon
     Burgess
     Bustos
     Butterfield
     Byrne
     Calvert
     Camp
     Capito
     Capps
     Cardenas
     Carney
     Carson (IN)
     Carter
     Cartwright
     Cassidy
     Castor (FL)
     Castro (TX)
     Chabot
     Chaffetz
     Chu
     Cicilline
     Clark (MA)
     Clarke (NY)
     Clawson (FL)
     Clay
     Cleaver
     Clyburn
     Coble
     Coffman
     Cohen
     Cole
     Collins (GA)
     Collins (NY)
     Conaway
     Connolly
     Conyers
     Cook
     Cooper
     Costa
     Cotton
     Courtney
     Cramer
     Crawford
     Crenshaw
     Crowley
     Cuellar
     Culberson
     Cummings
     Daines
     Davis (CA)
     Davis, Danny
     Davis, Rodney
     DeFazio
     DeGette
     Delaney
     DeLauro
     DelBene
     Denham
     Dent
     DeSantis
     DesJarlais
     Deutch
     Diaz-Balart
     Dingell
     Doggett
     Doyle
     Duffy
     Duncan (SC)
     Duncan (TN)
     Edwards
     Ellison
     Ellmers
     Engel
     Enyart
     Eshoo
     Esty
     Farenthold
     Farr
     Fattah
     Fincher
     Fitzpatrick
     Fleischmann
     Fleming
     Flores
     Forbes
     Fortenberry
     Foster
     Foxx
     Frankel (FL)
     Franks (AZ)
     Frelinghuysen
     Fudge
     Gabbard
     Gallego
     Garamendi
     Garcia
     Gardner
     Garrett
     Gerlach
     Gibbs
     Gibson
     Gingrey (GA)
     Gohmert
     Goodlatte
     Gosar
     Gowdy
     Graves (GA)
     Graves (MO)
     Grayson
     Green, Al
     Green, Gene
     Griffin (AR)
     Griffith (VA)
     Grijalva
     Grimm
     Guthrie
     Gutierrez
     Hahn
     Hanabusa
     Hanna
     Harper
     Harris
     Hartzler
     Hastings (FL)
     Hastings (WA)
     Heck (NV)
     Heck (WA)
     Hensarling
     Herrera Beutler
     Higgins
     Himes
     Hinojosa
     Holding
     Holt
     Honda
     Horsford
     Hoyer
     Hudson
     Huelskamp
     Huffman
     Huizenga (MI)
     Hultgren
     Hunter
     Hurt
     Israel
     Issa
     Jackson Lee
     Jeffries
     Jenkins
     Johnson (OH)
     Johnson, E. B.
     Johnson, Sam
     Jolly
     Jordan
     Joyce
     Kaptur
     Keating
     Kelly (IL)
     Kelly (PA)
     Kennedy
     Kildee
     Kilmer
     Kind
     King (IA)
     King (NY)
     Kingston
     Kinzinger (IL)
     Kirkpatrick
     Kline
     Kuster
     Labrador
     LaMalfa
     Lamborn
     Lance
     Langevin
     Lankford
     Larsen (WA)
     Larson (CT)
     Latham
     Latta
     Lee (CA)
     Levin
     Lewis
     Lipinski

[[Page 17455]]


     LoBiondo
     Loebsack
     Lofgren
     Long
     Lowenthal
     Lowey
     Lucas
     Luetkemeyer
     Lujan Grisham (NM)
     Lujan, Ben Ray (NM)
     Lummis
     Lynch
     Maffei
     Maloney, Carolyn
     Maloney, Sean
     Marchant
     Marino
     Matheson
     Matsui
     McAllister
     McCarthy (CA)
     McCarthy (NY)
     McCaul
     McCollum
     McDermott
     McGovern
     McHenry
     McIntyre
     McKeon
     McKinley
     McMorris Rodgers
     McNerney
     Meadows
     Meehan
     Meeks
     Meng
     Messer
     Mica
     Michaud
     Miller (MI)
     Miller, George
     Moore
     Moran
     Mullin
     Mulvaney
     Murphy (FL)
     Murphy (PA)
     Nadler
     Napolitano
     Neal
     Neugebauer
     Noem
     Nolan
     Norcross
     Nugent
     Nunes
     Nunnelee
     O'Rourke
     Olson
     Owens
     Palazzo
     Pallone
     Pascrell
     Pastor (AZ)
     Paulsen
     Payne
     Pearce
     Pelosi
     Perlmutter
     Perry
     Peters (CA)
     Peters (MI)
     Peterson
     Petri
     Pingree (ME)
     Pittenger
     Pitts
     Pocan
     Poe (TX)
     Polis
     Pompeo
     Posey
     Price (GA)
     Price (NC)
     Quigley
     Rahall
     Rangel
     Reed
     Reichert
     Renacci
     Ribble
     Rice (SC)
     Richmond
     Rigell
     Roby
     Roe (TN)
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Rokita
     Rooney
     Ros-Lehtinen
     Roskam
     Ross
     Rothfus
     Roybal-Allard
     Royce
     Ruiz
     Runyan
     Ruppersberger
     Rush
     Ryan (OH)
     Ryan (WI)
     Salmon
     Sanchez, Linda T.
     Sanchez, Loretta
     Sanford
     Sarbanes
     Scalise
     Schakowsky
     Schiff
     Schneider
     Schock
     Schrader
     Schwartz
     Schweikert
     Scott (VA)
     Scott, Austin
     Scott, David
     Serrano
     Sessions
     Sewell (AL)
     Shea-Porter
     Sherman
     Shimkus
     Shuster
     Simpson
     Sinema
     Sires
     Slaughter
     Smith (MO)
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Southerland
     Speier
     Stewart
     Stivers
     Stutzman
     Swalwell (CA)
     Takano
     Terry
     Thompson (CA)
     Thompson (MS)
     Thompson (PA)
     Thornberry
     Tiberi
     Tierney
     Tipton
     Titus
     Tonko
     Tsongas
     Turner
     Upton
     Valadao
     Van Hollen
     Vargas
     Veasey
     Vela
     Velazquez
     Visclosky
     Wagner
     Walberg
     Walden
     Walorski
     Walz
     Wasserman Schultz
     Waters
     Waxman
     Weber (TX)
     Webster (FL)
     Welch
     Wenstrup
     Westmoreland
     Whitfield
     Williams
     Wilson (FL)
     Wilson (SC)
     Wittman
     Wolf
     Womack
     Woodall
     Yarmuth
     Yoder
     Yoho
     Young (AK)
     Young (IN)

                                NAYS--7

     Amash
     Broun (GA)
     Jones
     Massie
     McClintock
     Sensenbrenner
     Stockman

                             NOT VOTING--10

     Campbell
     Capuano
     Duckworth
     Granger
     Hall
     Johnson (GA)
     Miller (FL)
     Miller, Gary
     Negrete McLeod
     Smith (WA)

                              {time}  1656

  Mr. THOMPSON of Mississippi changed his vote from ``nay'' to ``yea.''
  So the bill, as amended, was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________