[Congressional Record (Bound Edition), Volume 163 (2017), Part 1]
[House]
[Pages 792-816]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     COMMODITY END-USER RELIEF ACT


                             General Leave

  Mr. CONAWAY. Mr. Speaker, I ask unanimous consent that all Members 
have 5 legislative days within which to revise and extend their remarks 
and to include extraneous material on H.R. 238.
  The SPEAKER pro tempore (Mr. Rodney Davis of Illinois). Is there 
objection to the request of the gentleman from Texas?
  There was no objection.
  The SPEAKER pro tempore. Pursuant to House Resolution 40 and rule 
XVIII, the Chair declares the House in the Committee of the Whole House 
on the state of the Union for the consideration of the bill, H.R. 238.
  The Chair appoints the gentleman from Tennessee (Mr. Duncan) to 
preside over the Committee of the Whole.

                              {time}  1239


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the state of the Union for the consideration of the bill 
(H.R. 238) to reauthorize the Commodity Futures Trading Commission, to 
better protect futures customers, to provide end-users with market 
certainty, to make basic reforms to ensure transparency and 
accountability at the Commission, to help farmers, ranchers, and end-
users manage risks, to help keep consumer costs low, and for other 
purposes, with Mr. Duncan of Tennessee in the chair.
  The Clerk read the title of the bill.
  The CHAIR. Pursuant to the rule, the bill is considered read the 
first time.
  The gentleman from Texas (Mr. Conaway) and the gentleman from 
Minnesota (Mr. Peterson) each will control 30 minutes.
  The Chair recognizes the gentleman from Texas.
  Mr. CONAWAY. Mr. Chairman, I yield myself such time as I may consume.
  I rise in support of H.R. 238, the Commodity End-User Relief Act.
  The Commodity End-User Relief Act is a bipartisan bill to reauthorize 
the Commodity Futures Trading Commission, to make much-needed 
regulatory reforms, and, most importantly, to make statutory changes to 
protect end users and give them access to the tools they need to manage 
their risks.
  Over the past 4 years, the House Committee on Agriculture has held 
almost two dozen hearings that have examined the Commission and have 
investigated the impacts of the Dodd-Frank Act on derivatives markets. 
Our witnesses, many of whom were market participants who were 
struggling to comply with burdensome rules and ambiguous portions of 
the underlying statute, were consistent in their call for relief. To 
address their concerns, H.R. 238 makes reforms that fall into three 
broad categories: customer protections, Commission reforms, and end-
user relief.
  Title I of the bill protects customers and the margin funds they 
deposit at their Futures Commission Merchants by codifying critical 
changes made during the collapse and bankruptcies of MF Global and 
Peregrine Financial Group.
  Title II makes meaningful reforms to the operations of the Commission 
to improve the agency's deliberative process. In doing so, it also 
requires the Commission to conduct more thorough and robust cost-
benefit analysis to help get future rulemakings right the first time. 
While the CFTC is already required to consider costs and benefits of 
the rules it proposes, its work has been called into question by the 
CFTC's inspector general, who reported the Commission staff seemed to 
view the process as more of a legal one than an economic one.
  End users are the businesses that provide Americans with food, 
clothing, transportation, electricity, heat, and much more. Companies 
that produce, consume, and transport the commodities that make modern 
life possible use futures and swaps markets to reduce the uncertainty 
that their businesses face. Farmers hedge their crops in the spring so 
they know what they will get paid in the fall. Utilities hedge the 
price of energy so they can charge customers at a steady rate. 
Manufacturers hedge the cost of steel, energy, and other inputs to lock 
in prices as they work to fill orders.
  The fact is that no end user played any part in the financial crisis, 
and no end user currently poses a systemic risk to U.S. derivative 
markets. Yet, as the Agriculture Committee heard in countless hours of 
testimony, today it is more difficult and more expensive for them to 
manage their risks than it was for them 5 years ago. Some of these 
challenges are the result of ambiguities and oversights in the text of 
the Commodity Exchange Act, and some of them result from overzealous 
rulemakings by the Commission itself.
  Today's legislation fixes statutory problems, like section 304, which 
amends the definition of ``financial entity'' to ensure that some end 
users don't lose their clearing exemption simply because a hedging 
strategy makes up for losses in a physical transaction; or like section 
315, which makes small changes to the swaps' core principles to align 
them with conventions in the swaps industry, rather than the futures 
industry, easing compliance burdens for these newly regulated entities.
  It also fixes problems that have grown out of the CFTC's own 
rulemakings. For example, section 308 sets aside a Commission rule that 
would automatically lower the transaction threshold triggering 
registration as a swap dealer. This costly, complex registration 
process was intended for large financial institutions, but because this 
registration threshold was set arbitrarily, it has swept up some 
commodity firms as well.
  If the limits fall by 60 percent next year, it could sweep up to 100 
more firms into the reach of Dodd-Frank. H.R. 238 would fix the level 
at its current $8 billion unless the Commission proposes a new rule 
with evidence of a needed reduction. Similarly, section 313 exempts 
religious pension plans and university endowments from a new rule that 
requires them to register as commodity pool operators simply because 
they use standardized hedging products.
  What H.R. 238 does not do is roll back a single core tenet of title 
VII of Dodd-Frank. It does not change the execution, clearing, 
margining, capital, or reporting frameworks set up by that Act.

                              {time}  1245

  In fact, not a single witness who appeared before the House Committee 
on Agriculture ever asked us to fundamentally upend these principles. 
These are concepts that have been part of the swaps markets long before 
the financial reform happened. The Committee, the Commission, and the 
industry will continue to grapple with the details of these core 
tenets, seeking to provide the right mix of flexibility and oversight.
  Before I close, I would like to thank members of the Agriculture 
Committee who sat through all these hearings and all the markups on 
this issue. Chairman Austin Scott and Ranking Member David Scott, two 
of my cosponsors on this legislation, have led most of the Committee's 
hearings on these issues, and they have done great work.
  Together, we have put forward a bipartisan bill that makes narrowly 
targeted changes to provide relief from regulatory burdens on American 
businesses. The Commodity End-User Relief Act offers meaningful 
improvements for market participants without undermining the basic 
goals of title VII of Dodd-Frank, and it does so by providing the right 
relief to the right people.

[[Page 793]]

  I urge support of the Commodity End-User Relief Act with all its 
amendments, and I include for the Record letters of support from over 
30 groups.

                                         House of Representatives,


                              Committee on Financial Services,

                                  Washington, DC, January 4, 2017.
     Hon. K. Michael Conaway,
     Chairman, Committee on Agriculture, Washington, DC.
       Dear Chairman Conaway: I am writing concerning H.R. 238, 
     the ``Customer Protection and End-User Relief Act.''
       As a result of your having consulted with the Committee on 
     Financial Services concerning provisions in the bill that 
     fall within our Rule X jurisdiction, I agree to forgo action 
     on the bill so that it may proceed expeditiously to the House 
     Floor. The Committee on Financial Services takes this action 
     with our mutual understanding that, by foregoing 
     consideration of H.R. 238 at this time, we do not waive any 
     jurisdiction over the subject matter contained in this or 
     similar legislation, and that our Committee will be 
     appropriately consulted and involved as this or similar 
     legislation moves forward so that we may address any 
     remaining issues that fall within our Rule X jurisdiction. 
     Our Committee also reserves the right to seek appointment of 
     an appropriate number of conferees to any House-Senate 
     conference involving this or similar legislation, and 
     requests your support for any such request.
       Finally, I would appreciate your response to this letter 
     confirming this understanding with respect to H.R. 238 and 
     would ask that a copy of our exchange of letters on this 
     matter be placed in the Congressional Record during floor 
     consideration thereof.
           Sincerely,
                                                   Jeb Hensarling,
     Chairman.
                                  ____

                                         House of Representatives,


                                     Committee on Agriculture,

                                  Washington, DC, January 4, 2017.
     Hon. Jeb Hensarling,
     Chairman, Committee on Financial Services, Washington, DC.
       Dear Chairman Hensarling: Thank you for your letter 
     regarding H.R. 238, ``Customer Protection and End-User Relief 
     Act.'' I appreciate your support in bringing this legislation 
     before the House of Representatives, and accordingly, 
     understand that the Committee on Financial Services will 
     forego action on the bill.
       The Committee on Agriculture concurs in the mutual 
     understanding that by foregoing consideration of the bill at 
     this time, the Committee on Financial Services does not waive 
     any jurisdiction over the subject matter contained in this 
     bill or similar legislation in the future. In addition, 
     should a conference on this bill be necessary, I would 
     support your request to have the Committee on Financial 
     Services represented on the conference committee.
       I will insert copies of this exchange in the Congressional 
     Record during Floor consideration. I appreciate your 
     cooperation regarding this legislation and look forward to 
     continuing to work the Committee on Financial Services as 
     this bill moves through the legislative process.
           Sincerely,
                                               K. Michael Conaway,
     Chairman.
                                  ____



                                Congress of the United States,

                                  Washington, DC, January 6, 2017.
     Hon. K. Michael Conaway,
     Chairman, Committee on Agriculture, Washington, DC.
       Dear Chairman Conaway: I write with respect to H.R. 238, 
     the ``Commodity End-User Relief Act.'' As a result of your 
     having consulted with us on provisions within H.R. 238 that 
     fall within the Rule X jurisdiction of the Committee on the 
     Judiciary, I forego any further consideration of this bill so 
     that it may proceed expeditiously to the House floor for 
     consideration.
       The Judiciary Committee takes this action with our mutual 
     understanding that by foregoing consideration of H.R. 238 at 
     this time, we do not waive any jurisdiction over subject 
     matter contained in this or similar legislation and that our 
     committee will be appropriately consulted and involved as 
     this bill or similar legislation moves forward so that we may 
     address any remaining issues in our jurisdiction. Our 
     committee also reserves the right to seek appointment of an 
     appropriate number of conferees to any House-Senate 
     conference involving this or similar legislation and asks 
     that you support any such request.
       I would appreciate a response to this letter confirming 
     this understanding with respect to H.R. 238 and would ask 
     that a copy of our exchange of letters on this matter be 
     included in the Congressional Record during floor 
     consideration of H.R. 238.
           Sincerely,
                                                    Bob Goodlatte,
     Chairman.
                                  ____

                                         House of Representatives,


                                     Committee on Agriculture,

                                  Washington, DC, January 4, 2017.
     Hon. Bob Goodlatte,
     Chairman, Committee on the Judiciary, Washington, DC.
       Dear Chairman Goodlatte: Thank you for your letter 
     regarding H.R. 238, ``Customer Protection and End-User Relief 
     Act.'' I appreciate your support in bringing this legislation 
     before the House of Representatives, and accordingly, 
     understand that the Committee on the Judiciary will forego 
     action on the bill.
       The Committee on Agriculture concurs in the mutual 
     understanding that by foregoing consideration of the bill at 
     this time, the Committee on the Judiciary does not waive any 
     jurisdiction over the subject matter contained in this bill 
     or similar legislation in the future. In addition, should a 
     conference on this bill be necessary, I would support your 
     request to have the Committee on the Judiciary represented on 
     the conference committee.
       I will insert copies of this exchange in the Congressional 
     Record during Floor consideration. I appreciate your 
     cooperation regarding this legislation and look forward to 
     continuing to work the Committee on the Judiciary as this 
     bill moves through the legislative process.
           Sincerely,
                                               K. Michael Conaway,
     Chairman.
                                  ____



        supporters of hr 238, the commodity end-user relief act:

       American Cotton Shippers Association, American Farm Bureau 
     Federation, American Feed Industry Association, American Gas 
     Association (AGA), American Public Power Association (APPA), 
     American Soybean Association, Chamber of Commerce of the 
     United States of America, Church Alliance of Church Benefits 
     Programs, Commodity Markets Council, Edison Electric 
     Institute (EEI), Futures Industry Association (FIA), Grain 
     and Feed Association of Illinois, International Swaps and 
     Derivative Association (ISDA), Kansas Grain and Feed 
     Association, Michigan Agri-Business Association, Michigan 
     Bean Shippers Association, National Association of Wheat 
     Growers, National Cattlemen's Beef Association
       National Corn Growers Association, National Cotton Council, 
     National Council of Farmer Cooperatives, National Grain and 
     Feed Association, National Milk Producers Federation, 
     National Pork Producers Council, National Rural Electric 
     Cooperatives Association (NRECA), National Sorghum Producers, 
     Nebraska Grain and Feed Association, North American Millers 
     Association, Northeast Agribusiness and Feed Alliance, Ohio 
     AgriBusiness Association, SIFMA, South Dakota Grain and Feed 
     Association, The Jewish Federations of North America, USA 
     Rice, Wisconsin Agri-Business Association.
                                  ____

                                                 January 11, 2017.
       Dear Member of the House of Representatives: The 
     undersigned organizations represent a very broad cross-
     section of U.S. production agriculture and agribusiness. We 
     urge you to cast an affirmative vote on H.R. 238, the 
     ``Commodity End-User Relief Act,'' when it moves to the floor 
     for consideration.
       This legislation contains a number of important provisions 
     for agricultural and agribusiness hedgers who use futures and 
     swaps to manage their business and production risks. Some, 
     but certainly not all, of the bill's important provisions 
     include:
       Sections 101-103--Codify important customer protections to 
     help prevent another MF Global situation.
       Section 104--Provides a permanent solution to the residual 
     interest problem that would have put more customer funds at 
     risk--and potentially driven farmers, ranchers and small 
     hedgers out of futures markets--by forcing pre-margining of 
     their hedge accounts.
       Section 306--Relief from burdensome and technologically 
     infeasible recordkeeping requirements in commodity markets.
       Section 308--Requires the CFTC to conduct a study and issue 
     a rule before reducing the de minimis threshold for swap 
     dealer registration in order to make sure that doing so would 
     not harm market liquidity and end-user access to markets.
       Section 311--Confirms the intent of Dodd-Frank that 
     anticipatory hedging is considered bona fide hedging 
     activity.
       Thank you in advance for your support of this bill that is 
     so important to U.S. farmers, ranchers, hedgers and futures 
     customers.
           Sincerely,
       American Cotton Shippers Association, American Farm Bureau 
     Federation, American Feed Industry Association, American 
     Soybean Association, Grain and Feed Association of Illinois, 
     Kansas Grain and Feed Association, Michigan Agri-Business 
     Association, Michigan Bean Shippers, National Association of 
     Wheat Growers, National Cattlemen's Beef Association, 
     National Corn Growers Association, National Cotton Council.
       National Council of Farmer Cooperatives, National Grain and 
     Feed Association, National Milk Producers Federation, 
     National Pork Producers Council, National Sorghum Producers, 
     Nebraska Grain and Feed Association, North American Millers 
     Association,

[[Page 794]]

     Northeast Agribusiness and Feed Alliance, Ohio AgriBusiness 
     Association, South Dakota Grain and Feed Association, USA 
     Rice, Wisconsin Agri-Business Association.
                                  ____



                                     American Gas Association,

                                  Washington, DC, January 9, 2017.
     Hon. Mike Conaway,
     Chairman, Committee on Agriculture,
     House of Representatives, Washington, DC.
       Dear Chairman Conaway: The American Gas Association (AGA) 
     supports the Commodity End-User Relief Act (H.R. 238), a bill 
     to reauthorize the Commodity Exchange Act (CEA) that would 
     improve Commodity Future Trading Commission (CFTC) operations 
     and provide much-needed marketplace certainty and regulatory 
     relief for natural gas utilities and the American homes and 
     businesses to which they deliver natural gas.
       The American Gas Association (AGA), founded in 1918, 
     represents more than 200 local energy companies that deliver 
     clean natural gas throughout the United States. There are 
     more than 72 million residential, commercial and industrial 
     natural gas customers in the U.S., of which 95 percent--just 
     under 69 million customers--receive their gas from AGA 
     members. AGA is an advocate for natural gas utility companies 
     and their customers and provides a broad range of programs 
     and services for member natural gas pipelines, marketers, 
     gatherers, international natural gas companies and industry 
     associates. Today, natural gas meets more than one-fourth of 
     the United States' energy needs.
       H.R. 238 will benefit our industry by exempting end-user 
     physical contracts from ``swaps'' and ``options'' regulation 
     more applicable to sophisticated financial derivative 
     transactions. Specifically, HR 238 would clarify that 
     contracts containing delivery terms with volumetric 
     optionality, but intended to result in the physical delivery 
     of natural gas, will not be treated by the CFTC as swaps. 
     Currently, the CFTC has provided some guidance on how 
     physical natural gas contracts with volumetric optionality 
     are to be reviewed for regulatory treatment, but considerable 
     confusion and uncertainty still exists. This uncertainty has 
     caused concern regarding the impact on the willingness of gas 
     suppliers to offer flexible delivery volume terms, leaving 
     gas utilities with fewer delivery options and more expensive 
     contracts--costs ultimately passed to the consumer. HR 238 
     provides needed regulatory certainty to the physical natural 
     gas marketplace, as requested by AGA and other industry 
     stakeholders for several years.
       H.R. 238 will also help the CFTC become a more responsive 
     and well-equipped regulator by subjecting its rulemakings to 
     administrative process reforms and judicial review. Current 
     CFTC administrative rulemaking procedures are vague and 
     provide insufficient avenues for the public to participate in 
     and seek guidance on rulemakings. This bill would require the 
     CFTC to comply with the Administrative Procedures Act to 
     ensure public notice-and-comment on rules or guidance that 
     have legally-binding effects.
       Finally, H.R. 238 would allow the federal appellate courts 
     to directly review CFTC rules, replacing the protracted and 
     expensive trial court process currently in effect as the 
     default rule for judicial review. This change will not 
     increase litigation nor will it disrupt the CFTC. Rather, it 
     will incentivize the CFTC to write better rules and avoid 
     challenge altogether. Also, any inevitable legal challenges 
     will be more swiftly decided by appellate courts, benefitting 
     the regulator and the regulated community. All of the key 
     federal rulemaking agencies are subject to direct appellate 
     review--including the Securities Exchange Commission and 
     Federal Energy Regulatory Commission. There is no logical 
     justification to treat the CFTC differently.
       Congress certainly did not intend to provide the CFTC a 
     large new regulatory mandate without giving it the necessary 
     guidance and authority to do its job. Furthermore, Congress 
     did not intend for the CEA to constrain liquidity in the 
     physical natural gas marketplace, create business-changing 
     impacts on regulated natural gas utilities, or increase the 
     costs of reliable service for natural gas consumers. As such, 
     AGA supports the Commodity End-User Relief Act because it 
     provides the CFTC with the tools necessary to be a responsive 
     regulator and restores the regulatory confidence that natural 
     gas utilities rely on to procure natural gas supplies at the 
     lowest reasonable cost for the benefit of America's natural 
     gas consumers.
           Sincerely,

                                                  George Lowe,

                                  Vice President, Federal Affairs,
     American Gas Association.
                                  ____

                                American Public PowerTM


                                                  Association,

                                  Arlington, VA, January 10, 2017.
     Hon. K. Michael Conaway,
     Hon. Collin C. Peterson,
     Committee on Agriculture, House of Representatives, 
         Washington, DC.
       Dear Chairman Conaway and Ranking Member Peterson: On 
     behalf of the American Public Power Association (APPA), I am 
     writing in support of H.R. 238, the Commodity End-User Relief 
     Act (CERA) of 2017. The legislation includes important relief 
     for public power utilities and other end-users seeking to use 
     swaps to hedge commercial-operations risks.
       Community-owned, not-for-profit public power utilities 
     power homes and businesses in 2,000 communities --from small 
     towns to large cities. They safely provide reliable, low-cost 
     electricity to more than 49 million Americans, while 
     protecting the environment. These utilities generate or buy 
     electricity from diverse sources. They employ 93,000 people 
     and earn $58 billion in revenue each year. Public power 
     supports local commerce and jobs and invests back into the 
     community.
       Public power utilities use swaps, options, forward 
     contracts and other tools to manage commercial operations 
     risks. As not-for-profit entities, their goal is to provide 
     affordable and reliable power to customers. APPA supports the 
     market clarity and oversight provided by the Commodity 
     Exchange Act (CEA), and supports appropriately funding the 
     Commodity Futures Trading Commission (CFTC). To date, 
     however, implementation of the Dodd-Frank Act amendments to 
     the CEA shows clear short-comings.
       CERA would address these concerns, for example, by 
     codifying CFTC rules allowing public power utilities to enter 
     swaps with the full array of counterparties to swaps needed 
     to hedge their commercial operations risks. CERA would also 
     address issues related to the definition of ``bona fide 
     hedging,'' swap reporting in illiquid markets, and forward 
     contracts with volumetric optionality. These provisions would 
     help public power utilities and other commercial end users.
       On the whole, we believe these provisions will ensure that 
     public power utilities can continue to make full use of 
     financial tools necessary to keep electric power prices 
     stable and affordable to our customers.
       Thank for your time and consideration.
           Sincerely,
                                                   Susan N. Kelly,
     President & CEO.
                                  ____

                                        Chamber of Commerce of The


                                     United States of America,

                                 Washington, DC, January 11, 2017.
       To the Members of the U.S. House of Representatives: The 
     U.S. Chamber of Commerce strongly supports H.R. 238, the 
     ``Commodity End-User Relief Act.'' H.R. 238 would reauthorize 
     the Commodity Futures Trading Commission (``CFTC'') and enact 
     a number of important reforms to provide regulatory relief 
     for end users of the derivatives market. It would also 
     promote accountability at the CFTC and protect Main Street 
     businesses from onerous and unintended consequences of 
     derivatives regulation.
       The Chamber supports several amendments being offered to 
     H.R. 238. Specifically, the Chamber supports Congressman 
     Lucas' amendment to provide relief to Main Street businesses 
     by clarifying the treatment of interaffiliate swaps. The 
     amendment would drive down the cost of using derivatives by 
     end-users and help Main Street businesses employ safe and 
     effective risk management strategies on a more cost-effective 
     basis.
       The Chamber also supports the amendment sponsored by 
     Congressman Duffy and Congressman Scott to clarify that the 
     CFTC shall not have the authority to access proprietary 
     source code without a subpoena. Their amendment would protect 
     highly sensitive intellectual property, which would respect 
     established due process rights and ensure that proprietary 
     source code does not fall into the wrong hands as a result of 
     a cyberattack or wrongdoing.
       Finally, as the bill moves forward, the Chamber urges 
     consideration of how best to address the cross-border 
     regulation of derivatives. We strongly believe that H.R. 238 
     should appropriately reflect the potential impact of punitive 
     or excessive cross-border rules on Main Street businesses 
     seeking to prudently hedge their commercial and market risks, 
     both in the U.S. and abroad. We look forward to continuing to 
     work with the sponsors of H.R. 238 on this issue as the bill 
     moves forward.
       The Chamber commends the House of Representatives for 
     prioritizing regulatory reform in the 115th Congress and 
     urges the House to approve H.R. 238 and the amendments listed 
     above as expeditiously as possible.
           Sincerely,
     Jack Howard.
                                  ____



                                              Church Alliance,

                                                  January 9, 2017.
                                             Hon. Michael Conaway,
     Chairman, Committee on Agriculture,
     House of Representatives, Washington, DC.
       Dear Chairman Conaway: On behalf of the Church Alliance, I 
     write to thank you for your leadership on H.R. 238, the 
     ``Commodity End-User Relief Act.''
       The Church Alliance is a coalition of the chief executive 
     officers of 37 church benefit programs. It includes mainline 
     Protestant denominations, two branches of Judaism, and 
     Catholic dioceses, schools and institutions. The benefit 
     programs (``church plans'') provide retirement and health 
     benefits to more than 1 million clergy, lay workers, and 
     their family members.
       H.R. 238 contains a provision expanding the church plan 
     exemption from the commodity

[[Page 795]]

     pool operator (``CPO'') and commodity trading advisor 
     (``CTA'') rules under the Commodity Exchange Act (``CEA'') to 
     include church plan-related accounts, such as endowments or 
     foundations of churches and church-controlled nonprofits. The 
     provision was included by a bipartisan, broadly-supported 
     amendment during the House Agriculture Committee's 
     consideration of CFTC reauthorization legislation in the 
     114th Congress.
       Under current law, church plans are generally exempt from 
     the CPO and CTA requirements; however, the exemption does not 
     include church plan-related accounts. Church benefits boards 
     often use investment managers or advisers that engage in 
     commodities transactions for the purposes of diversification 
     and hedging. Church benefits boards also have the ability to 
     pool plan assets with other church-related funds purely for 
     investment management purposes for the benefit of the church. 
     This reduces investment fees for church-related entities, as 
     well as benefit plan participants by providing economies of 
     scale.
       In contrast to the CEA and implementing regulations, the 
     securities laws contain necessary exemptions for church plans 
     and church plan-related accounts for the same reason noted 
     above. Under these laws, church plans are not required to 
     register or report as investment companies, register 
     securities held, or disclose information about the securities 
     they hold.
       H.R. 238 similarly exempts church plans and church plan-
     related accounts from the commodity pool definition and from 
     CTA registration requirements. The exemptions would provide 
     parity between securities and commodities laws concerning 
     church plans and church plan-related accounts. Additionally, 
     the exemptions would reduce the cost to church plans and 
     would ensure they have the full benefit of commodities 
     investments that provide diversification, opportunities to 
     hedge, and returns. The ultimate benefit would be to clergy 
     and church lay worker participants in the retirement and 
     welfare plans, who have devoted their lives to the work of 
     the church.
       We respectfully urge the enactment of CFTC reauthorization 
     legislation which includes much-needed relief for church 
     plans and church-plan related accounts from the CPO and CTA 
     requirements, along the lines of H.R. 238, as soon as 
     possible. Thank you for your leadership and support on this 
     important issue.
           Sincerely yours,
     Barbara A. Boigegrain.
                                  ____



                                    Commodity Markets Council,

                                  Washington, DC, January 9, 2017.
     Chairman Mike Conaway,
     House Committee on Agriculture,
     Washington, DC.
       Dear Chairman Conaway: We, the Commodity Markets Council 
     (CMC), write in support of H.R. 238, a bill to reauthorize 
     the Commodity Futures Trading Commission (``CFTC'').
       CMC is a trade association that brings together exchanges 
     and their industry counterparts. Its members include 
     commercial end-users that utilize the futures and swaps 
     markets for agriculture, energy, metal, and soft commodities. 
     Its industry member firms also include regular users and 
     members of swap execution facilities (each, a ``SEF'') as 
     well as designated contract markets (each, a ``DCM''), such 
     as the Chicago Board of Trade, Chicago Mercantile Exchange, 
     ICE Futures US, Minneapolis Grain Exchange, NASDAQ Futures, 
     and the New York Mercantile Exchange. Along with these market 
     participants, CMC members also include regulated derivatives 
     exchanges.
       The businesses of all CMC members depend upon the efficient 
     and competitive functioning of the risk management products 
     traded on DCMs, SEFs, and over-the-counter (``OTC'') markets. 
     As a result, CMC is well-positioned to provide a consensus 
     view of commercial end-users on the impact of the 
     Commission's proposed regulations on derivatives markets. Its 
     comments, however, represent the collective view of CMC's 
     members, including end-users, intermediaries, exchanges, and 
     benchmark providers.
       CMC urges you to support this legislation to reauthorize 
     the CFTC because the bill contains clarifications similar to 
     those in H.R. 2289, the Commodity End-User Relief Act, from 
     the last Congressional session (114th Congress), which passed 
     the House Agriculture Committee and the U.S. House of 
     Representatives with bipartisan support. We believe the 
     provisions in this legislation would go a long way to 
     addressing the unintended consequences Main Street businesses 
     have suffered as a result of derivatives regulation intended 
     for Wall Street.
       Many of the fixes in this legislation are urgently needed 
     to stop upcoming initiatives that will greatly harm end-users 
     and drastically reduce the economic efficiency of hedges. 
     Although the CFTC has recently made great strides in 
     addressing end-users' concerns, some of the remedies needed 
     can only be addressed by Congress.
       We respectfully request your support for these non-
     controversial fixes that are of such importance to end-users. 
     Thank you for your consideration and your continued 
     leadership.
           Sincerely,
                                                       Gregg Doud,
     President, Commodity Markets Council.
                                  ____



                                    Edison Electric Institute,

                                                  January 9, 2017.
     Hon. Paul Ryan,
     Speaker, House of Representatives,
     Washington, DC.
     Hon. Michael Conaway,
     Chairman, House Agriculture Committee, House of 
         Representatives, Washington, DC.
     Hon. Nancy Pelosi,
     Minority Leader, House of Representatives,
     Washington, DC.
     Hon. Collin Peterson,
     Ranking Member, House Agriculture Committee, House of 
         Representatives, Washington, DC.
       Dear Speaker Ryan, Leader Pelosi, Chairman Conaway, and 
     Ranking Member Peterson: On behalf of the member companies of 
     the Edison Electric Institute (EEI), I want to express our 
     strong support for H.R. 238, the Commodity End-User Relief 
     Act. Key provisions in the legislation provide additional 
     certainty and clarify congressional intent on a number of 
     issues of significant importance to EEI members.
       EEI is the association of U.S. investor-owned electric 
     companies. EEI's members provide electricity for 220 million 
     Americans, operate in all 50 states and the District of 
     Columbia, and directly and indirectly create jobs for more 
     than 1 million Americans. With more than $100 billion in 
     annual capital expenditures, the electric power industry is 
     responsible for providing safe, reliable, affordable, and 
     sustainable electricity that powers the economy and enhances 
     the lives of all Americans.
       EEI members are non-financial entities that participate in 
     the physical commodity market and rely on swaps and futures 
     contracts primarily to hedge and mitigate their commercial 
     risk. The goal of our member companies is to provide their 
     customers with reliable electric service at affordable and 
     stable rates, which has a direct and significant impact on 
     literally every area of the U.S. economy. Since wholesale 
     electricity and natural gas historically have been two of the 
     most volatile commodity groups, our member companies place a 
     strong emphasis on managing the price volatility inherent in 
     these wholesale commodity markets to the benefit of their 
     customers. The derivatives market has proven to be an 
     extremely effective tool in insulating our customers from 
     this risk and price volatility. In sum, our members are the 
     quintessential commercial end-users of swaps.
       As such, regulations that make effective risk management 
     options more costly for end-users of swaps will likely result 
     in higher and more volatile energy prices for retail, 
     commercial, and industrial customers. H.R. 238 goes a long 
     way in providing much needed regulatory relief and even 
     greater clarity to the compliance landscape facing EEI and 
     the entire end-user community going forward.
       Thank you for your leadership on these important issues. We 
     look forward to working with you to advance this legislation 
     through the House.
           Sincerely,
                                                   Thomas R. Kuhn.

  Mr. CONAWAY. Mr. Chair, I reserve the balance of my time.
  Mr. PETERSON. Mr. Chairman, I yield myself such time as I may 
consume.
  I rise in opposition to this bill. The bill last Congress went too 
far; and the one in this Congress, in my opinion, is going too far as 
well. The Commission, in my opinion, just needs a simple 
reauthorization. I urge Members to consider this when deciding how to 
vote on the amendments that will be debated here on the floor.
  Title II actually makes it more difficult for the Commission to 
function, and I am also concerned that title III's cross-border 
rulemaking mandate will result in a race to the bottom for 
multinational banks in the swaps market, which is a global market.
  On top of that, this bill caps the agency's yearly budget at $250 
million for the next 5 years, and it does this when every single 
witness before the Agriculture Committee last year told us that the 
agency needs more resources to do its work. Well, maybe that is the 
whole point--that this bill will leave the agency to not doing much, 
and I think that would be a mistake. We tried that once before, and we 
found ourselves in a real mess.
  Since we last discussed reauthorization, the market situation has 
changed, and the CFTC has addressed many of our concerns through 
rulemaking. Yet, the Agriculture Committee wasn't given the chance to 
consider these issues before the bill was rushed to the floor here 
today. So we are moving forward, once again, without regular order.
  Again, I oppose this bill and urge my colleagues to vote ``no.''

[[Page 796]]

  I reserve the balance of my time.
  Mr. CONAWAY. Mr. Chairman, I yield 3 minutes to the gentleman from 
Arkansas (Mr. Crawford), who is the subcommittee chairman for the 
General Farm Commodities and Risk Management Subcommittee.
  Mr. CRAWFORD. Mr. Chairman, 5 years of bipartisan committee work has 
contributed to the drafting of H.R. 238, the Commodity End-User Relief 
Act. It is time we passed it for the sake of businesses across the 
United States who need greater certainty in managing their risk.
  In advance of writing this legislation to reauthorize the CFTC, the 
House Committee on Agriculture held 22 hearings on the future of the 
Commission and the state of the derivatives industry. I mention the 
number 22 to highlight how extensive the data collection and 
deliberation has been.
  To make this reauthorization as complete and thorough as possible, 
those 22 hearings collected feedback and testimony from every segment 
of the futures and swaps markets, from end users to regulators. We have 
used the testimony to draft legislation that will make derivatives 
markets work better for those who need them most: businesses trying to 
manage their risk.
  But not only is this reauthorization language exhaustively 
researched, it has also already been approved by this Chamber multiple 
times, starting in the 113th Congress.
  In the 113th Congress, the Committee completed H.R. 4413, which 
passed the House with strong bipartisan support. In the 114th Congress, 
we put forward the Commodity End-User Relief Act of 2015, which was 
very similar to H.R. 4413, and also passed the House with support from 
both parties. Now, not only is H.R. 238 virtually identical to the 
reauthorization bill, which passed the House last Congress, H.R. 238 
also includes the amendments that were adopted on the House floor 
during debate.
  I will turn my focus toward the people that this tested and proven 
language will help, largely end users. Although end users are not 
investors, speculators, or risk takers, they have borne the brunt of 
many of the consequences of new regulations.
  Derivatives are used by a huge swath of businesses for risk 
management purposes, including manufacturers, farmers, ranchers, and 
other businesses that buy or sell products overseas, pension funds, 
insurance companies, and others who face risks that the prices for 
their business inputs and outputs frequently fluctuate.
  Mr. Chairman, I urge my colleagues to support this long overdue 
legislation.
  Mr. PETERSON. Mr. Chairman, I yield 2 minutes to the gentlewoman from 
the Virgin Islands (Ms. Plaskett).
  Ms. PLASKETT. Mr. Chairman, I rise today to speak in opposition to 
H.R. 238 and express my concerns with the process and the need for this 
legislation at this time.
  As we all know, the Commodity Futures Trading Commission is an 
independent Federal regulatory agency that, after the 2008 financial 
crisis, took on more responsibility to bring greater transparency and 
oversight to the multihundred-trillion-dollar derivatives market.
  This new bill, H.R. 238, has new mandates and steps in it which will 
force the Commodity Futures Trading Commission to redirect funding from 
its core mission to satisfy some of the new mandates within this rule.
  H.R. 238 sets a flat reauthorization level of $250 million per year 
for the next 5 years, despite the annual average budget requests of the 
agency of well over $300 million since passage of Dodd-Frank. Freezing 
the funding level makes the new rules almost impossible to enforce. 
While we understand the need for the end users, the work of this group 
must go forward.
  This punitive level effectively caps the CFTC budget and is a 
substantial departure from past reauthorization language providing for 
such funding as may be necessary for CFTC to carry out its expanded 
authorities under Dodd-Frank.
  H.R. 238 will make it more difficult for CFTC to function and stifles 
its ability to respond quickly to the rapidly changing markets it 
regulates.
  I thank Chairman Conaway for having allowed us in the last Congress 
to have many hearings and discussions about this bill; but we have not 
even, as a matter, organized the Agriculture Committee in the 115th 
Congress to bring this matter to the floor at this time. Therefore, the 
substance of the bill, as well as the process by which it is coming to 
this floor, are to be questioned at this time.
  I urge my colleagues to vote against the bill.
  Mr. CONAWAY. Mr. Chairman, I yield 3 minutes to the gentleman from 
Illinois (Mr. Davis), who is the subcommittee chairman for the 
Subcommittee on Biotechnology, Horticulture, and Research.
  Mr. RODNEY DAVIS of Illinois. Mr. Chairman, I rise today in strong 
support of this legislation.
  Farming is an inherently risky business. Yet, I am incredibly 
grateful to the farmers in my district and across the country who 
proudly take on these risks in order to provide our country and many 
countries across this globe with a sustainable, abundant food supply. 
Given the importance of agriculture to our Nation's food supply, it 
makes sense to provide farmers, agribusinesses, and manufacturers the 
tools to hedge the risks that come with doing their business.
  Because of the risks of price movements in commodities, such as corn 
and soybeans, these end users use derivatives to ensure they and their 
customers aren't negatively impacted by sudden price changes.
  This legislation reauthorizes the CFTC, which has been without a 
statutory authorization for almost 4 years. That is unacceptable, Mr. 
Chairman. If we are serious about getting back to regular order in 
regards to the appropriations process, the authorizing committees must 
hold up their end of the bargain.
  The derivatives industry has been through major reforms during the 
past few years. This legislation recognizes and appreciates the 
transformation of this industry while providing Congress with an 
opportunity to use the reauthorization process as a means to improve 
the regulatory environment and the impact it has on responsible market 
participants.
  In that vein, this legislation also includes an amendment I offered 
at the Committee that would remove unnecessary and duplicative 
regulations created by the CFTC that requires certain registered 
investment companies, such as mutual funds, to be regulated by both the 
SEC and the CFTC.
  Costly, burdensome, redundant regulations have real-world impacts. 
Congress needs to shift its focus back to policies that promote strong 
and healthy markets. This is a great start.
  Mr. Chairman, I am proud of the Committee's work on this bill. I want 
to express my appreciation for Chairman Conaway's leadership and work 
to get us here.
  This is an important bill, and I urge my colleagues to vote ``yes.''
  Mr. PETERSON. Mr. Chairman, I yield 4 minutes to the gentleman from 
Massachusetts (Mr. McGovern).
  Mr. McGOVERN. Mr. Chairman, I rise in strong opposition to H.R. 238, 
legislation to reauthorize the Commodity Futures Trading Commission, 
better known as the CFTC. Instead of working through regular order to 
produce an authorization bill that both Democrats and Republicans could 
have supported, the majority in this House rushed to the floor a deeply 
flawed piece of legislation that hamstrings the CFTC and undermines its 
ability to react to changing market conditions.
  The burdensome requirements in this legislation and the lack of 
appropriate funding are nothing more than a misguided attempt by 
Republicans to make it more difficult for the Commission to function--
to make it harder to protect consumers and make it more difficult to 
rein in the abuses of Wall Street.
  I strongly object to the authorization level in this legislation. 
Basically, my Republican friends are flat funding the CFTC for 5 years, 
and that is despite calls from the former and current

[[Page 797]]

chairman asking us to provide additional resources to the agency to 
enhance their ability to police Wall Street.
  Now, Dodd-Frank significantly expanded the Commission's role in 
overseeing our financial markets, and the Commission has done its part 
to create rules that will help to prevent another financial crisis, 
despite the fact that Congress has not provided appropriate funding.
  Now, I get it. My Republican friends don't like Dodd-Frank. Ever 
since they took back control of the House, they have tried to dismantle 
the law piece by piece, which was enacted to protect consumers and 
protect our markets in the wake of that terrible financial crisis that 
practically ruined our economy.
  Now, Republicans say they don't like regulation, and it seems they 
especially don't like any regulation on Wall Street. Have they 
forgotten the recent financial crisis that nearly destroyed our 
economy? Have they forgotten who was primarily responsible for that 
crisis? Apparently, they have. Now, I am not for endless and 
unnecessary regulation. Nobody is. But I do think it is appropriate for 
us to create commonsense rules that protect our markets and protect our 
constituents' hard-earned dollars.
  I find it troubling the Republican leaders in this House don't want 
to provide necessary resources to the Commission to patrol Wall Street. 
Without cops on the beat, who will ensure Wall Street actors aren't 
gaming the system and putting the economy at risk for another meltdown. 
I ask my Republican friends: When will Main Street take priority over 
Wall Street?
  I also take issue with the various provisions of this bill that will 
both slow the agency's work and create new avenues for costly and 
lengthy legal battles.
  By the way, implementing these provisions will cost the Commission an 
additional $45 million over the next 5 years and will require an 
additional 30 full-time employees. So in addition to underfunding an 
already overworked agency, we are creating a situation where even more 
resources will be needed to satisfy burdensome and unnecessary 
requirements. Now, that means fewer dollars for the Commission to carry 
out its core mission of combating abuse and fraud in our markets and 
ensuring end users, investors, and the public are protected.
  Now, Mr. Chairman, our constituents didn't send us to Washington to 
ignore bad actors in our financial markets. They certainly didn't send 
us to Washington to create a regulatory environment that could put us 
on a path toward another downturn. So who are we here to represent, the 
Wall Street banks or our hardworking constituents who deserve elected 
Representatives who do everything in their power to prevent another 
financial crisis?
  I would also like to say a few words about the cross-border 
requirements imposed by this bill, requirements that would hamstring 
the Commission's efforts to regulate the global swaps industry in 
cooperation with regulators around the globe.
  My colleagues across the aisle keep saying that this bill is 
essential to help farmers, ranchers, utilities, and Main Street small 
business. But the farmers in this country don't have a London office to 
trade their swaps, they don't have a derivatives desk in Tokyo, and 
they aren't trading interest rate swaps in Geneva.
  The CHAIR. The time of the gentleman has expired.
  Mr. PETERSON. Mr. Chairman, I yield an additional 1 minute to the 
gentleman from Massachusetts.
  Mr. McGOVERN. Mr. Chair, let's be clear about who the cross-border 
provision in this bill is designed to help. It isn't end users. It 
isn't farmers. It isn't manufacturers or utilities or Main Street 
businesses. It is the small group of multinational financial firms that 
have controlled the swaps market from the beginning. We have seen what 
happens when they are left to their own devices. Crises in the swaps 
market do not respect national borders and boundaries. And that is why 
our regulators from the Commission have been engaged with their 
international counterparts in crafting rules for these markets since 
2009.

                              {time}  1300

  They should be encouraged in that effort in every way possible 
through funding and expansive authority to get the rules right. This 
bill provides neither.
  Mr. Chairman, I urge my colleagues to oppose this misguided 
legislation.
  Mr. CONAWAY. Mr. Chairman, I would like to point out for the Record 
that over the past two fiscal years, since 2013, the CFTC has received 
a 29 percent increase in funding. It has gone from $194 million to its 
current level of $250 million. I think you would be hard-pressed to 
find any other agency throughout this government that has gotten a 29 
percent increase in its resources over that timeframe.
  I now yield 3 minutes to the gentlewoman from Missouri (Mrs. 
Hartzler), a valuable member of the Ag Committee.
  Mrs. HARTZLER. Mr. Chairman, I rise today in support of the Commodity 
End-User Relief Act. I thank the chairman for the countless hours that 
he and members and staff of the Ag Committee have put into crafting 
this bill, which is designed to provide relief to the end users across 
the Nation that were never intended to be burdened by these rules and 
regulations.
  I have heard from many end users in my district about the need for 
commonsense reforms to our financial regulations that are encapsulated 
in this bill. These financial regulations affect entities and the 
people I represent and rely on every day, from the rural electric 
cooperatives that use these financial tools to keep energy prices as 
low and as stable as possible for rural Missourians, to the local grain 
elevators and farmers that manage their price risk using futures and 
options at a time when prices are low. And times are hard in farm 
country. Regulatory relief for Main Street is way past due on these 
regulations that were designed to regulate Wall Street.
  During this debate, I have heard some of my colleagues' concerns that 
this bill has not followed regular order. But we have spent countless 
hours in briefings, hearings, and markups on this very bill. Many of us 
even took a trip to Chicago to visit the CFTC office and to tour key 
industry facilities. In the 6 years that I have served on this 
committee, we have held 22 hearings on the future of the Commission and 
the state of the derivatives industry. We held two separate markups on 
previous versions of this reauthorization in the 113th and 114th 
Congresses, followed by passage of these bills on the House floor. In 
fact, the bill we are taking up today is almost identical to the bill 
passed on this floor last Congress. Every single amendment to this bill 
offered by a Member of the House will be voted on today, including my 
amendment to provide relief to farmers, agricultural cooperatives, and 
grain elevators from burdensome reporting requirements. The process of 
considering the bill has been fair and open.
  I thank the chairman for bringing up this much-needed bill to provide 
regulatory relief to my constituents through this fair and open 
process. I encourage my colleagues to support this bill.
  Mr. PETERSON. Mr. Chairman, I yield 3 minutes to the gentleman from 
Arizona (Mr. O'Halleran), a new member to the House and a new member of 
the committee, and somebody who actually has experience in this 
business during his storied career.
  Mr. O'HALLERAN. Mr. Chairman, I thank the ranking member with whom I 
look forward to serving on the Agriculture Committee on behalf of the 
people of Arizona.
  Mr. Chairman, I rise today to express my deep opposition to H.R. 238. 
I am troubled by the way this legislation, the Commodity End-User 
Relief Act, has been brought to the floor. This bill was only 
introduced last week. It is being rushed to a vote.
  I am especially bothered by the attempt to bring this bill to the 
floor outside the rules of regular order. There were no committee 
hearings. There were no markups held by the committee, and the Members 
of the

[[Page 798]]

Agriculture Committee have been denied the opportunity to discuss the 
merits of this legislation.
  As a freshman member of the 115th Congress, I am especially bothered 
that this bill has been brought to the floor before the Agriculture 
Committee has even been fully organized. As a new member of the Ag 
Committee, I am troubled that my colleagues think they can bypass the 
important feedback provided during the committee process. I represent 
over 80 communities in my district with a wide range of opinions and 
interests. Hearing from my constituents and getting feedback is 
critical to my duties as their Representative in Congress. We should 
include their voices in the policymaking process, not just special 
interests that have the resources to keep lobbyists here in Washington.
  The committee process allows members to gather critical information, 
have a positive discussion, and make necessary changes to the 
legislation. As everyone on this floor knows, the committee process is 
essential to ensuring that the interests of the American people are 
truly represented in the legislation and brought to the floor. I 
understand that this bill was brought up in the 114th Congress where it 
was reviewed by the committee. It is only right that we maintain our 
democratic principles and ensure that H.R. 238 fully undergoes 
committee review in this Congress.
  Mr. Chairman, this is not a partisan concept. These are the values I 
held as a Republican State legislator, as a police officer working in 
the community, and as a community leader.
  Mr. Chairman, I ask: If this legislation was sent through the 
committee in the last Congress, is it not going to the committee again?
  This process subverts the rules of this Congress, which, I might add, 
were established only last week. Bypassing the normal rules of order 
marginalizes the voice of the American people in the legislative 
process and forces a vote on legislation that is not complete.
  I encourage my colleagues to make sure that the voice of the American 
people is heard and this legislation is brought up under the rules of 
regular order. For this reason, I ask my colleagues to join me in 
opposing this legislation before us.
  Mr. CONAWAY. Mr. Chairman, I am proud to yield 3 minutes to the 
gentleman from Florida (Mr. Yoho), another valuable member of the 
Agriculture Committee.
  Mr. YOHO. Mr. Chairman, I appreciate the opportunity to speak in 
favor of H.R. 238, the Commodity End-User Relief Act.
  I thank Chairman Conaway for his leadership and his continued 
commitment to positive reforms through the Agriculture Committee. It 
has been a privilege to work with him on issues impacting our Nation's 
rural communities.
  I also thank Subcommittee Chairman Austin Scott for his work in 
bringing this bill to the floor yet again.
  This bill will provide much-needed relief to the end users of this 
country in the wake of the Dodd-Frank Wall Street reform bill. End 
users in the bill are the farmers and ranchers and public utilities 
across our country. When costs increase for them, they increase for all 
Americans. The farmer was not the reason for the economic recession 
that began in 2008. The rancher was not the reason, nor was the power 
company.
  So why bring them under the umbrella of the Dodd-Frank Wall Street 
reform?
  Rural America is not Wall Street. It is this view held by some of my 
colleagues on the other side of the aisle that has alienated so many in 
rural America.
  The Agriculture Committee has approved this measure four times 
through regular order in the committee. Its commonsense reforms have 
garnered bipartisan support in the 114th Congress and the 113th 
Congress. It is my hope that with this new administration taking office 
next week, these commonsense changes will finally be signed into law.
  I implore my fellow colleagues to listen to rural America. Remember, 
they are not Wall Street.
  I thank Chairman Conaway, Subcommittee Chairman Austin Scott, and 
Ranking Member David Scott for making this a priority. I urge my 
colleagues to support this bill.
  Mr. PETERSON. Mr. Chairman, I yield 4 minutes to the gentlewoman from 
California (Ms. Maxine Waters), the ranking member of the Financial 
Services Committee.
  Ms. MAXINE WATERS of California. Mr. Chairman, I rise today in strong 
opposition to H.R. 238, a bill that would hamstring the ability of the 
Commodity Futures Trading Commission to protect our Nation's farmers, 
manufacturers, municipalities, and retirees. Indeed, the agency has 
weighty responsibility to oversee our commodity, futures, and swaps 
markets to ensure that they are not only fair to market participants, 
but also that they are protected from manipulation, fraud, and abuse.
  Such misconduct in these markets can impact everything from the price 
of oil, natural gas, and bread, to the interest rates on mortgages, 
credit cards, auto loans, and student loans.
  As we saw in the financial crisis, fraud and abuse in the swaps 
markets can lead to systemic risks. Recall that credit default swaps, 
made famous by AIG, fueled the crisis, bankrupted millions of 
homeowners, and cost taxpayers trillions of dollars. To prevent that 
from happening again, Congress, in the Dodd-Frank Act, gave the CFTC 
new authority over the swaps market and required it to adopt reforms 
which, thanks to its hard work, are largely in place.
  But rather than applaud the work of the CFTC and provide it with 
funds it needs to do its job, Republicans continue to seek to undermine 
its regulatory authority, impose new procedural hurdles, and ultimately 
thwart its ability to protect the American people.
  For example, H.R. 238 would impose onerous burdens and introduce new 
litigation risks by requiring the CFTC to conduct what is known as 
cost-benefit analysis slanted toward the industry, tying the CFTC's 
hands and setting up roadblocks to prevent them from doing their job 
and protect investors. This is a tactic used by opponents of financial 
reform to prevent, delay, weaken, and now under a Trump administration, 
repeal any rules implementing the Dodd-Frank Act.
  This bill also would make it harder for the CFTC to police the 
overseas derivatives operations of megabanks like Citigroup, J.P. 
Morgan and Bank of America, even though the risk may still be borne by 
U.S. taxpayers. It also creates an unreasonable and hard-to-overturn 
presumption that the regulations of the largest eight foreign swaps 
markets are equivalent to U.S. regulation, allowing global megabanks to 
opt out of CFTC regulation.
  H.R. 238 is simply a bad bill, but not leaving well-enough alone, 
Republicans are attempting to make it worse through multiple 
amendments. Troublingly, the Lucas amendment would create loopholes in 
our swaps regime by exempting trades between affiliates. Therefore, 
such trades would not have to comply with certain reporting, clearing, 
or initial margin requirements, creating a dangerous blind spot in the 
markets. What is more, the amendment is in direct contravention to 
already-provided, targeted relief, including the inter-affiliate 
clearing exemption that Congress passed in a bipartisan fashion in the 
2016 Consolidated Appropriations Act, which contained numerous 
safeguards to ensure appropriate CFTC oversight.
  I urge my colleagues to join me in opposing that and other harmful 
amendments, and oppose H.R. 238.
  Mr. CONAWAY. Mr. Chairman, I would like to point out for the Record 
that the cost-benefit analysis rules in this bill are modeled after 
Executive Order 13563, which President Obama signed into the executive 
order status, and they are forward-looking. Nothing in our bill would 
require what might be a much-needed re-look at the Dodd-Frank rules 
done in the past. The cost-benefit analysis would require any future 
rulemaking to comply.

[[Page 799]]

  I yield 3 minutes to the gentleman from California (Mr. LaMalfa), 
another valuable member of the Agriculture Committee.
  Mr. LaMALFA. Mr. Chairman, I thank Chairman Conaway for his 
leadership and the opportunity to speak today.
  I rise today in strong support of H.R. 238, the Commodity End-User 
Relief Act. For the last 2 years, as a member of the Agriculture 
Committee, I have worked continuously to improve the operations of the 
Commodity Futures Trading Commission.
  Through a great deal of bipartisan hearings, members were able to 
hear from everyone at the table--the regulators, market participants, 
and end users alike. When discussing how to ensure robust markets, 
consumer protections, and relief for end users, H.R. 238 truly 
represents a true agreement. After all, the end users are our 
customers. They are the whole reason for this legislation and this 
entity to begin with.
  Another important provision included in this bill is language I had 
previously introduced, the Public Power Risk Management Act, which 
ensures that 47 million Americans who rely on public power for 
electricity will not see their rates increase due to unintended 
consequences of Dodd-Frank.

                              {time}  1315

  There are 2,000 publicly owned utilities across this country, 
including one in my own district in the city of Redding, who have used 
swaps to manage their risk for years, and this bill safeguards their 
ability to do so while protecting taxpayers from high, unnecessary 
costs.
  Our farmers, ranchers, manufacturers--again, the end users--and other 
businesses who pose no systemic risk to our financial system and did 
not cause the financial crisis should not have to face costly red tape 
from policies meant to protect them in the first place.
  I want to thank, again, Chairman Conaway for leading on this issue 
and for the hard work in committee, all the conversations, all the 
background it takes to get this done and put the light on the practical 
effects of the unintended consequences on the actual customers, the end 
users.
  This bill is about American producers and consumers. I am proud to be 
part of this work product we have on the floor today, and I urge my 
colleagues to support this measure.
  Mr. PETERSON. Mr. Chairman, I reserve the balance of my time.
  Mr. CONAWAY. Mr. Chairman, may I inquire as to how much time is left 
on both sides.
  The CHAIR. The gentleman from Texas has 13\1/2\ minutes remaining. 
The gentleman from Minnesota has 14\1/2\ minutes remaining.
  Mr. CONAWAY. Mr. Chair, I yield 3 minutes to the gentleman from 
Georgia (Mr. Austin Scott), who is the chairman of the Subcommittee on 
Commodity Exchanges, Energy, and Credit.
  Mr. AUSTIN SCOTT of Georgia. Mr. Chairman, I rise today in support of 
H.R. 238, the Commodity End-User Relief Act. It is simply good 
governance to reauthorize the Commodity Futures Trading Commission, 
which has been operating without authorization since 2013. I think this 
legislation represents the kind of thoughtful and bipartisan approach 
to policymaking that is often lacking in this place.
  In the 114th Congress, I served as chairman of the Subcommittee on 
Commodity Exchanges, Energy, and Credit, and during several of the 
hearings on this reauthorization, we heard diverse perspectives from 
end users, from market participants, and from regulators. That 
testimony, coupled with the testimony from numerous other hearings at 
the subcommittee and full committee level in past Congresses, was 
instrumental in drafting the legislation before us today, which is the 
same legislation that passed the House of Representatives last Congress 
in June 2015.
  This bill includes needed reforms to clarify congressional intent, 
minimize regulatory burdens, and, most importantly, preserve the 
ability of necessary risk management markets to serve those who need 
them.
  Time and again we have heard how end users--who, I want to point out, 
were not the cause of the financial crisis--have been the collateral 
damage of Dodd-Frank reforms. These end users are our farmers, 
ranchers, manufacturers, and electric and gas utilities, and they rely 
on the derivatives markets to manage their risk, thereby helping to 
keep consumer costs low.
  It is essential that we provide end users with much-needed relief and 
clarity in order to prevent the cost of unnecessary regulatory burdens 
that lead to increased costs and uncertainty being shouldered by the 
American citizens in my district and across the country.
  I want to note that this legislation in no way undermines the goals 
of Dodd-Frank. Instead, it simply eases the regulatory burden on those 
who use the derivatives markets not so they can speculate, but so they 
can hedge risk. Ultimately, this bill is about protecting the American 
producer and the American consumer.
  I want to close by thanking Chairman Conaway for his strong 
leadership on the House Committee on Agriculture, and the ranking 
member of the Commodity Exchanges, Energy, and Credit Subcommittee and 
my colleague from Georgia (Mr. David Scott), who has been a steady 
partner throughout this effort.
  We have worked diligently to produce legislation that provides needed 
reforms to ensure our regulatory framework protects the integrity of 
our markets, while not limiting the ability of end users to access 
those tools to conduct their business.
  Mr. Chairman, I believe the CFTC should be reauthorized, and I am 
proud to support H.R. 238, the Commodity End-User Relief Act, and I 
urge my colleagues to join me in voting for this legislation.
  Mr. PETERSON. Mr. Chairman, if I could inquire from Chairman Conaway 
if he has any more speakers?
  Mr. CONAWAY. I have no further speakers.
  Mr. PETERSON. Is the gentleman prepared to close?
  Mr. CONAWAY. Mr. Chairman, may I inquire as to who has the right to 
close?
  The CHAIR. The gentleman from Texas has the right to close.
  Mr. PETERSON. Mr. Chairman, I yield myself such time as I may 
consume.
  In closing, I just wish that I could support a reauthorization bill, 
a clean bill for the CFTC that came through the Committee on 
Agriculture in regular order, but that is not what has happened.
  I want to thank Chairman Conaway for his work in the last Congress, 
trying to find common ground, and I hope that we can get back to 
regular order in the future in the committee.
  So again, Mr. Chairman, I urge my colleagues to oppose H.R. 238, and 
I yield back the balance of my time.
  Mr. CONAWAY. Mr. Chairman, I yield myself such time as I may consume.
  As I close, I want to remind us of the need to act today. But before 
I do, I also want to thank the ranking member. While we may vote 
differently on this bill, he and I generally work well together on a 
myriad of issues that face not only production agriculture, but rural 
America as well, and I thank him for his work, even though we may not 
vote exactly the same way today.
  Over the past 4 years, the Committee on Agriculture heard dozens of 
witnesses about the upheaval end users have been facing while trying to 
use derivative markets in the wake of the post-crisis financial 
reforms. While this Congress took affirmative steps in Dodd-Frank to 
protect end users from harm, today it is clear that there is still work 
to be done. have been facing while trying to use derivative markets in 
the wake of the post-crisis financial reforms. While this Congress took 
affirmative steps in Dodd-Frank to protect end users from harm, today 
it is clear that there is still work to be done.
  It isn't enough to simply raise these issues and hope that the CFTC 
will take care of them for us--for one,

[[Page 800]]

sometimes they cannot. There are numerous small oversights in the 
statute that have big implications for end users that we must correct 
in this legislation.
  Currently, the CEA defines some utility companies as financial 
entities, stripping them of their status as end users. The Commission 
can't fix this.
  The core principles for SEFs, which were added to the CEA by Dodd-
Frank, were lifted almost word for word from the core principles for 
futures exchanges, even though swaps exchanges and futures exchanges 
operate completely differently and SEFs cannot perform many of the 
functions of a futures exchange. The Commission cannot fix this.
  Certainly, the Commission can and has tried to paper over these 
problems, issuing staff letters explaining how it will deal with 
incongruities in the law. But that isn't good enough. We know the 
problems. We should fix them, and fix them now.
  Sometimes, though, the problem isn't the statute. There are a number 
of end-user issues that we have heard testimony about which the CFTC 
will not fix, because the Commission simply disagrees with Congress 
about how to apply the law. We know these problems also.
  The Commission has promulgated a rule that reduces the transaction 
threshold to be considered a swap dealer from $8 billion to $3 billion, 
a 60 percent decline, while it is still studying the matter. We should 
require that the CFTC complete the study and have a public vote on that 
matter.
  The Commission has proposed a new method of granting bona fide hedge 
exemptions that is significantly narrower than the current method, 
upending longstanding hedging conventions for market participants. This 
proposal has the added disadvantage of being dramatically more labor 
intensive for the Commission. We should insist that historic hedging 
practices be protected.
  The Commission has issued a new rule on ownership, control, and 
reporting that it knows isn't working. They have delayed its 
implementation for over 3 years by continuing to parcel out temporary 
reprieves. We should insist the Commission amend the rule so that 
market participants know definitively what their compliance obligations 
are.
  The definition of swap does not exclude transactions that are wholly 
contained within a single company and not market facing. Regulators 
have used this leeway to require businesses and financial institutions 
to follow rules that are, quite frankly, inappropriate for risk 
management purposes and costly for the companies to use them. We should 
amend the statute, to make it clear that inter-affiliate transactions 
should not be regulated the same way as publicly transacted swaps.
  The challenges facing businesses who hedge their risks in derivatives 
markets are real. Today we have an opportunity to fix some of those 
problems. Every dollar that a business can save by better managing its 
risk is a dollar available to grow that business, pay higher wages, and 
lower costs to consumers or protect investors.
  Over the past week, over 30 organizations representing thousands of 
American businesses have voiced their support for the important reforms 
in the Commodity End-User Relief Act. Businesses from farm country to 
major manufacturers, to public utilities need every tool available to 
manage their businesses and reduce the uncertainties they face each day 
in today's global economy.
  I urge my colleagues to support the Commodity End-User Relief Act, 
protect these companies, and ensure that they have the tools they need 
to compete in a global economy.
  Mr. Chairman, I yield back the balance of my time.
  Mr. GOODLATTE. Mr. Chair, I rise today to first express my great 
appreciation to Chairman Michael Conaway and Subcommittee Chairman 
Austin Scott for their hard work in crafting H.R. 238, the Commodity 
End-User Relief Act, legislation to reauthorize the Commodity Futures 
Trading Commission (CFTC). Chairman Conaway and Subcommittee Chairman 
Austin Scott held four hearings throughout the 114th Congress regarding 
the CFTC and its future, during which time they invited input from a 
wide variety of interested stakeholders. I believe that they have 
struck the right balance in providing the CFTC with the authorizations 
necessary for the agency to do its job, while increasing oversight, 
instituting reforms to protect end-users from regulatory overreach, and 
improving consumer protection against fraud or mismanagement.
  I am also pleased to see that since the House of Representatives last 
acted to reauthorize the CFTC, in light of many years of concern about 
aluminum markets and warehousing practices, the London Metal Exchange 
has implemented additional reforms to their aluminum warehousing 
practices and contracts. Now that the London Metal Exchange has been 
recognized by the CFTC as a Foreign Board of Trade, I look forward to 
continuing my review of these reforms and their impact on aluminum 
markets and end users, while remaining hopeful that these changes will 
accomplish their intended goal.
  Once again, I would like to thank all those involved in bringing this 
bill to the floor, Chairman Michael Conaway, Subcommittee Chairman 
Austin Scott, and Ranking Member David Scott. I ask my colleagues to 
join me in supporting this legislation.
  Mr. CONAWAY. Mr. Chair, I include in the Record the following letters 
of support for H.R. 238:

                                                 January 11, 2017.
     Hon. Paul Ryan,
     Speaker, House of Representatives, Washington, DC.
     Hon. Nancy Pelosi,
     Democratic Leader, House of Representatives, Washington, DC.
       Dear Speaker Ryan and Leader Pelosi: FIA supports H.R. 238, 
     the ``Commodity End User Relief Act''. Notably, this 
     legislation reauthorizes the Commodity Futures Trading 
     Commission (CFTC), which has been without statutory 
     authorization for almost four years. In addition to 
     reauthorizing the CFTC, Congress has historically taken the 
     opportunity of reauthorization to periodically review and 
     enhance the CFTC's authorities. This is essential in a 
     regulatory environment where the marketplace is extremely 
     dynamic. Given the constantly evolving structure to which 
     these regulatory authorities apply, it is prudent for 
     Congress to consider updating the statute in response to 
     market changes. We commend the House Committee on Agriculture 
     for efforts to build upon previous work and advance this 
     legislation.
       H.R. 238 contains prudent internal risk controls to 
     safeguard market data and improved customer protections 
     sought by the market participants who rely on derivatives to 
     manage their risks. These are examples of policy enhancements 
     that have garnered tremendous favor in recent years as 
     evidenced by the bi-partisan support they have received in 
     previous Congressional sessions.
       As noted above, the constant evolution of the markets 
     regulated by the CFTC has advanced even since the last time 
     the House of Representatives passed similar legislation, 
     which warrants the introduction of new statutory updates 
     expected to be offered as floor amendments. In particular, 
     FIA would like to lend our support to the bi-partisan Duffy/
     Scott amendment protecting critical intellectual property 
     that is key to the innovative culture in the United States. 
     Additionally, we commend Congresswoman Hartzler for her 
     amendment recognizing the need to improve the quality of 
     information submitted for the Commission's surveillance and 
     large trader reporting programs.
       We look forward to seeing this effort advance to the Senate 
     where we expect to have continued dialogue on refinements.
           Sincerely,
     President and CEO.
                                  ____

         International Swaps and Derivatives Association, Inc.,
                                 Washington, DC, January 11, 2015.
     Hon. Paul Ryan,
     Speaker, House of Representatives, Washington, DC.
     Hon. Nancy Pelosi,
     Democratic Leader, House of Representatives, Washington, DC.
       Dear Speaker Ryan and Leader Pelosi: We are writing to 
     express the International Swaps and Derivatives Association, 
     Inc.'s (``ISDA'') support for H.R. 238, the Commodity End-
     User Relief Act. The legislation was introduced on January 4, 
     2017.
       Since 1985, ISDA has worked to make the global derivatives 
     markets safer and more efficient. Today, ISDA has over 850 
     member institutions from 66 countries. These members comprise 
     a broad range of derivatives market participants, including 
     corporations, investment managers, government and 
     supranational entities, insurance companies, energy and 
     commodities firms, and international and regional banks. In 
     addition to market participants, members also include

[[Page 801]]

     key components of the derivatives market infrastructure, such 
     as exchanges, intermediaries, clearing houses and 
     repositories, as well as law firms, accounting firms and 
     other service providers. Information about ISDA and its 
     activities is available on the Association's web site: 
     www.isda.org.
       H.R. 238 would codify new regulatory customer protections 
     and enhance oversight of the Commodity Futures Trading 
     Commission. The Commodity End-User Relief Act would also ease 
     the regulatory burdens placed on end-users. These are 
     measures that ISDA supports.
       Please also note that, while ISDA appreciates and supports 
     the Commodity End-User Relief Act, we look forward to working 
     with Congress to ensure that the cross-border provisions of 
     the bill are further addressed during the course of the 
     legislative process.
       ISDA urges you to vote for H.R. 238. Thank you for your 
     consideration of our views. If you have any questions, please 
     do not hesitate to contact our Head of US Public Policy 
     Christopher Young.
           Sincerely,
                                                    Scott O'Malia,
     Chief Executive Officer.
                                  ____

                                          The Jewish Federations,


                                             of North America,

                                  Washington DC, January 11, 2017.
     Hon. K. Michael Conaway,
     Chairman, House Agriculture Committee, Washington, DC.
       Dear Chairman Conaway: The Jewish Federations of North 
     America (JFNA) is writing to express our support for H.R. 
     238, the ``Commodity End-User Relief Act.'' We are 
     particularly supportive of section 313 of the bill which 
     provides for the exemption of qualified charitable 
     organizations from designation and regulation as commodity 
     pool operators.
       JFNA is the national organization that represents and 
     serves 149 Jewish Federations across the United States and 
     North America. In their communities, Jewish Federations and 
     related Jewish community foundations serve as the central 
     address for fundraising and support for an extensive network 
     of Jewish health, education and social services in their 
     area. Part of the charitable mission of Jewish federations 
     and Jewish community foundations is to help grow the 
     endowment assets of their organizations as well as those of 
     related Jewish agencies and synagogues who have entrusted 
     their endowment funds with them. This is accomplished through 
     pooling investment assets to maximize financial return, 
     minimize cost and risk, and take advantage of investment 
     expertise and economies of scale. Increased endowment dollars 
     translate into more current support of essential program 
     activities as well as helping to assure the long-term 
     viability of Jewish organizations and institutions. The 
     enactment of H.R. 238 will harmonize the registration 
     exemptions between securities and commodities laws and 
     regulations and exempt qualified charities from registering 
     their pooled funds as commodity pools or as commodity pool 
     operators. This exemption will eliminate confusion, spare 
     needless legal costs, and ensure that such organizations as 
     Jewish federations and foundations can continue to invest in 
     widely diversified instruments in order to maximize returns 
     to their beneficiaries who use such investment income to 
     provide additional social services to the most needy among 
     us.
       Thank you again for efforts to ensure the enactment of the 
     Commodity End-User Relief Act. JFNA and the federation system 
     stand ready to help you in any way to achieve this important 
     goal. If you have any questions regarding JFNA and its 
     involvement in this issue I urge you to contact Steven Woolf, 
     JFNA Senior Tax Policy Counsel.
           Sincerely,

                                            William C. Daroff,

                         Senior Vice President for Public Policy &
     Director, of the Washington Office.
                                  ____



                                                        NRECA,

                                  Arlington, VA, January 10, 2017.
     Hon. Mike Conaway,
     Chairman, House Committee on Agriculture, Washington, DC.
     Hon. Collin Peterson,
     Ranking Member, House Committee on Agriculture, Washington, 
         DC.
       Dear Chairman Conaway and Ranking Member Peterson: The 
     National Rural Electric Cooperative Association (NRECA) 
     supports the Commodity End User Relief Act (H.R. 238), 
     legislation to reauthorize the Commodity Futures Trading 
     Commission (CFTC) to be considered on the House floor this 
     week.
       NRECA is the national service organization representing 
     over 900 not-for-profit, member-owned, rural electric 
     cooperative systems, which serve 42 million customers in 47 
     states. NRECA estimates that cooperatives own and maintain 
     2.5 million miles or 42 percent of the nation's electric 
     distribution lines covering three-quarters of the nation's 
     landmass. Cooperatives serve approximately 18 million 
     businesses, homes, farms, schools and other establishments in 
     2,500 of the nation's 3,141 counties.
       Electric cooperatives are commercial end-users and not 
     financial entities. NRECA believes that Congressional 
     oversight is essential to help ensure that the CFTC is 
     implementing the Dodd-Frank Act as Congress intended. To that 
     end, NRECA supports H.R. 238 as a means to ensure that 
     resources at the CFTC are prioritized to protect against 
     systemic risk to our financial system, and to regulate swap 
     dealers and large traders, and not fruitlessly focused on the 
     everyday commodity transactions with which end-users hedge 
     commercial risks arising from ongoing business operations.
       Importantly, H.R. 238 amends the Commodity Exchange Act 
     (CEA) in a very narrow but critical way: to clarify 
     Congressional intent that the CFTC shall not regulate as 
     ``swaps'' nonfinancial commodity contracts that are intended 
     to be physically settled, whether those contracts are forward 
     contracts or commodity trade options. Our members use these 
     physical contracts to manage supply and demand for energy 
     resources, and to keep the lights on for American businesses 
     and consumers. NRECA is also particularly interested in H.R. 
     238 language that reduces onerous recordkeeping requirements, 
     as well as a codified resolution to the utility special 
     entity requirement that would otherwise negatively impact 
     such utilities and their customers.
       NRECA appreciates the Committee's continued work on CFTC 
     reauthorization legislation this Congress, and urges Members 
     of Congress to support H.R. 238 when it is considered by the 
     House of Representatives.
           Sincerely,
                                                     Jim Matheson,
     CEO, NRECA.
                                  ____



                                                       SIFMA,

                                 Washington, DC, January 10, 2017.
     Hon. Paul D. Ryan,
     Speaker, House of Representatives,
     Washington, DC.
     Hon. Nancy Pelosi,
     Democratic Leader, House of Representatives,
     Washington, DC.
       Dear Speaker Ryan and Leader Pelosi: SIFMA and its member 
     firms support H.R. 238, Commodity End-User Relief Act, 
     bipartisan legislation that seeks to reauthorize the 
     Commodity Futures Trading Commission (CFTC) to better protect 
     swaps customers, provide market certainty for end-users, and 
     make basic reforms to improve the functioning of the CFTC.
       SIFMA also supports the inter-affiliate amendment sponsored 
     by Rep. Frank Lucas (R-Okla.), which includes language to 
     clarify exemptions from swap rules, as well as requirements 
     for reporting, risk management, and anti-evasion as it 
     relates to such transactions.
       Further, SIFMA appreciates efforts to establish a workable 
     framework for cross-border regulation of derivatives 
     transactions. We look forward to continuing to work with the 
     Committee in an effort to consider this important issue. 
     SIFMA urges you to vote for H.R. 238. Thank you for your 
     consideration of our views.
           Sincerely,
                                                     Andy Blocker,
                           EVP, Public Policy and Advocacy, SIFMA.

  The CHAIR. All time for general debate has expired.
  Pursuant to the rule, the bill shall be considered for amendment 
under the 5-minute rule.
  It shall be in order to consider as an original bill for the purpose 
of amendment under the 5-minute rule an amendment in the nature of a 
substitute consisting of the text of Rules Committee Print 115-2. That 
amendment in the nature of a substitute shall be considered as read.
  The text of the amendment in the nature of a substitute is as 
follows:

                                H.R. 238

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Commodity End-User Relief 
     Act''.

     SEC. 2. TABLE OF CONTENTS.

       The table of contents of this Act is as follows:

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

                     TITLE I--CUSTOMER PROTECTIONS

Sec. 101. Enhanced protections for futures customers.
Sec. 102. Electronic confirmation of customer funds.
Sec. 103. Notice and certifications providing additional customer 
              protections.
Sec. 104. Futures commission merchant compliance.
Sec. 105. Certainty for futures customers and market participants.

         TITLE II--COMMODITY FUTURES TRADING COMMISSION REFORMS

Sec. 201. Extension of operations.
Sec. 202. Consideration by the Commodity Futures Trading Commission of 
              the costs and benefits of its regulations and orders.
Sec. 203. Division directors.

[[Page 802]]

Sec. 204. Office of the Chief Economist.
Sec. 205. Procedures governing actions taken by Commission staff.
Sec. 206. Strategic technology plan.
Sec. 207. Internal risk controls.
Sec. 208. Subpoena duration and renewal.
Sec. 209. Applicability of notice and comment requirements of the 
              Administrative Procedure Act to guidance voted on by the 
              Commission.
Sec. 210. Judicial review of Commission rules.
Sec. 211. GAO study on use of Commission resources.
Sec. 212. Disclosure of required data of other registered entities.

                       TITLE III--END-USER RELIEF

Sec. 301. Transactions with utility special entities.
Sec. 302. Utility special entity defined.
Sec. 303. Utility operations-related swap.
Sec. 304. End-users not treated as financial entities.
Sec. 305. Reporting of illiquid swaps so as to not disadvantage certain 
              non-financial end-users.
Sec. 306. Relief for grain elevator operators, farmers, agricultural 
              counterparties, and commercial market participants.
Sec. 307. Relief for end-users who use physical contracts with 
              volumetric optionality.
Sec. 308. Commission vote required before automatic change of swap 
              dealer de minimis level.
Sec. 309. Capital requirements for non-bank swap dealers.
Sec. 310. Harmonization with the Jumpstart Our Business Startups Act.
Sec. 311. Bona fide hedge defined to protect end-user risk management 
              needs.
Sec. 312. Cross-border regulation of derivatives transactions.
Sec. 313. Exemption of qualified charitable organizations from 
              designation and regulation as commodity pool operators.
Sec. 314. Small bank holding company clearing exemption.
Sec. 315. Core principle certainty.
Sec. 316. Treatment of Federal Home Loan Bank products.
Sec. 317. Treatment of certain funds.

                    TITLE IV--TECHNICAL CORRECTIONS

Sec. 401. Correction of references.
Sec. 402. Elimination of obsolete references to dealer options.
Sec. 403. Updated trade data publication requirement.
Sec. 404. Flexibility for registered entities.
Sec. 405. Elimination of obsolete references to electronic trading 
              facilities.
Sec. 406. Elimination of obsolete reference to alternative swap 
              execution facilities.
Sec. 407. Elimination of redundant references to types of registered 
              entities.
Sec. 408. Clarification of Commission authority over swaps trading.
Sec. 409. Elimination of obsolete reference to the Commodity Exchange 
              Commission.
Sec. 410. Elimination of obsolete references to derivative transaction 
              execution facilities.
Sec. 411. Elimination of obsolete references to exempt boards of trade.
Sec. 412. Elimination of report due in 1986.
Sec. 413. Compliance report flexibility.
Sec. 414. Miscellaneous corrections.

                     TITLE I--CUSTOMER PROTECTIONS

     SEC. 101. ENHANCED PROTECTIONS FOR FUTURES CUSTOMERS.

       Section 17 of the Commodity Exchange Act (7 U.S.C. 21) is 
     amended by adding at the end the following:
       ``(t) A registered futures association shall--
       ``(1) require each member of the association that is a 
     futures commission merchant to maintain written policies and 
     procedures regarding the maintenance of--
       ``(A) the residual interest of the member, as described in 
     section 1.23 of title 17, Code of Federal Regulations, in any 
     customer segregated funds account of the member, as 
     identified in section 1.20 of such title, and in any foreign 
     futures and foreign options customer secured amount funds 
     account of the member, as identified in section 30.7 of such 
     title; and
       ``(B) the residual interest of the member, as described in 
     section 22.2(e)(4) of such title, in any cleared swaps 
     customer collateral account of the member, as identified in 
     section 22.2 of such title; and
       ``(2) establish rules to govern the withdrawal, transfer or 
     disbursement by any member of the association, that is a 
     futures commission merchant, of the member's residual 
     interest in customer segregated funds as provided in such 
     section 1.20, in foreign futures and foreign options customer 
     secured amount funds, identified as provided in such section 
     30.7, and from a cleared swaps customer collateral, 
     identified as provided in such section 22.2.''.

     SEC. 102. ELECTRONIC CONFIRMATION OF CUSTOMER FUNDS.

       Section 17 of the Commodity Exchange Act (7 U.S.C. 21), as 
     amended by section 101 of this Act, is amended by adding at 
     the end the following:
       ``(u) A registered futures association shall require any 
     member of the association that is a futures commission 
     merchant to--
       ``(1) use an electronic system or systems to report 
     financial and operational information to the association or 
     another party designated by the registered futures 
     association, including information related to customer 
     segregated funds, foreign futures and foreign options 
     customer secured amount funds accounts, and cleared swaps 
     customer collateral, in accordance with such terms, 
     conditions, documentation standards, and regular time 
     intervals as are established by the registered futures 
     association;
       ``(2) instruct each depository, including any bank, trust 
     company, derivatives clearing organization, or futures 
     commission merchant, holding customer segregated funds under 
     section 1.20 of title 17, Code of Federal Regulations, 
     foreign futures and foreign options customer secured amount 
     funds under section 30.7 of such title, or cleared swap 
     customer funds under section 22.2 of such title, to report 
     balances in the futures commission merchant's section 1.20 
     customer segregated funds, section 30.7 foreign futures and 
     foreign options customer secured amount funds, and section 
     22.2 cleared swap customer funds, to the registered futures 
     association or another party designated by the registered 
     futures association, in the form, manner, and interval 
     prescribed by the registered futures association; and
       ``(3) hold section 1.20 customer segregated funds, section 
     30.7 foreign futures and foreign options customer secured 
     amount funds and section 22.2 cleared swaps customer funds in 
     a depository that reports the balances in these accounts of 
     the futures commission merchant held at the depository to the 
     registered futures association or another party designated by 
     the registered futures association in the form, manner, and 
     interval prescribed by the registered futures association.''.

     SEC. 103. NOTICE AND CERTIFICATIONS PROVIDING ADDITIONAL 
                   CUSTOMER PROTECTIONS.

       Section 17 of the Commodity Exchange Act (7 U.S.C. 21), as 
     amended by sections 101 and 102 of this Act, is amended by 
     adding at the end the following:
       ``(v) A futures commission merchant that has adjusted net 
     capital in an amount less than the amount required by 
     regulations established by the Commission or a self-
     regulatory organization of which the futures commission 
     merchant is a member shall immediately notify the Commission 
     and the self-regulatory organization of this occurrence.
       ``(w) A futures commission merchant that does not hold a 
     sufficient amount of funds in segregated accounts for futures 
     customers under section 1.20 of title 17, Code of Federal 
     Regulations, in foreign futures and foreign options secured 
     amount accounts for foreign futures and foreign options 
     secured amount customers under section 30.7 of such title, or 
     in segregated accounts for cleared swap customers under 
     section 22.2 of such title, as required by regulations 
     established by the Commission or a self-regulatory 
     organization of which the futures commission merchant is a 
     member, shall immediately notify the Commission and the self-
     regulatory organization of this occurrence.
       ``(x) Within such time period established by the Commission 
     after the end of each fiscal year, a futures commission 
     merchant shall file with the Commission a report from the 
     chief compliance officer of the futures commission merchant 
     containing an assessment of the internal compliance programs 
     of the futures commission merchant.''.

     SEC. 104. FUTURES COMMISSION MERCHANT COMPLIANCE.

       (a) In General.--Section 4d(a) of the Commodity Exchange 
     Act (7 U.S.C. 6d(a)) is amended--
       (1) by redesignating paragraphs (1) and (2) as 
     subparagraphs (A) and (B);
       (2) by inserting ``(1)'' before ``It shall be unlawful''; 
     and
       (3) by adding at the end the following new paragraph:
       ``(2) Any rules or regulations requiring a futures 
     commission merchant to maintain a residual interest in 
     accounts held for the benefit of customers in amounts at 
     least sufficient to exceed the sum of all uncollected margin 
     deficits of such customers shall provide that a futures 
     commission merchant shall meet its residual interest 
     requirement as of the end of each business day calculated as 
     of the close of business on the previous business day.''.
       (b) Conforming Amendment.--Section 4d(h) of such Act (7 
     U.S.C. 6d(h)) is amended by striking ``Notwithstanding 
     subsection (a)(2)'' and inserting ``Notwithstanding 
     subsection (a)(1)(B)''.

     SEC. 105. CERTAINTY FOR FUTURES CUSTOMERS AND MARKET 
                   PARTICIPANTS.

       Section 20(a) of the Commodity Exchange Act (7 U.S.C. 
     24(a)) is amended--
       (1) by striking ``and'' at the end of paragraph (4);
       (2) by striking the period at the end of paragraph (5) and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(6) that cash, securities, or other property of the 
     estate of a commodity broker, including the trading or 
     operating accounts of the commodity broker and commodities 
     held in inventory by the commodity broker, shall be included 
     in customer property, subject to any otherwise unavoidable 
     security interest, or otherwise unavoidable contractual 
     offset or netting rights of creditors (including rights set 
     forth in a rule or bylaw of a derivatives clearing 
     organization or a clearing agency) in respect of such 
     property, but only to the extent that the property that is 
     otherwise customer property is insufficient to satisfy the 
     net equity claims of public customers (as such term may be 
     defined by the Commission by rule or regulation) of the 
     commodity broker.''.

[[Page 803]]



         TITLE II--COMMODITY FUTURES TRADING COMMISSION REFORMS

     SEC. 201. EXTENSION OF OPERATIONS.

       Section 12(d) of the Commodity Exchange Act (7 U.S.C. 
     16(d)) is amended to read as follows:
       ``(d) Authorization of Appropriations.--There is authorized 
     to be appropriated $250,000,000 for each of fiscal years 2017 
     through 2021 to carry out this Act.''.

     SEC. 202. CONSIDERATION BY THE COMMODITY FUTURES TRADING 
                   COMMISSION OF THE COSTS AND BENEFITS OF ITS 
                   REGULATIONS AND ORDERS.

       Section 15(a) of the Commodity Exchange Act (7 U.S.C. 
     19(a)) is amended--
       (1) by striking paragraphs (1) and (2) and inserting the 
     following:
       ``(1) In general.--Before promulgating a regulation under 
     this Act or issuing an order (except as provided in paragraph 
     (3)), the Commission, through the Office of the Chief 
     Economist, shall assess and publish in the regulation or 
     order the costs and benefits, both qualitative and 
     quantitative, of the proposed regulation or order, and the 
     proposed regulation or order shall state its statutory 
     justification.
       ``(2) Considerations.--In making a reasoned determination 
     of the costs and the benefits, the Commission shall 
     evaluate--
       ``(A) considerations of protection of market participants 
     and the public;
       ``(B) considerations of the efficiency, competitiveness, 
     and financial integrity of futures and swaps markets;
       ``(C) considerations of the impact on market liquidity in 
     the futures and swaps markets;
       ``(D) considerations of price discovery;
       ``(E) considerations of sound risk management practices;
       ``(F) available alternatives to direct regulation;
       ``(G) the degree and nature of the risks posed by various 
     activities within the scope of its jurisdiction;
       ``(H) the costs of complying with the proposed regulation 
     or order by all regulated entities, including a methodology 
     for quantifying the costs (recognizing that some costs are 
     difficult to quantify);
       ``(I) whether the proposed regulation or order is 
     inconsistent, incompatible, or duplicative of other Federal 
     regulations or orders;
       ``(J) the cost to the Commission of implementing the 
     proposed regulation or order by the Commission staff, 
     including a methodology for quantifying the costs;
       ``(K) whether, in choosing among alternative regulatory 
     approaches, hose approaches maximize net benefits (including 
     potential economic and other benefits, distributive impacts, 
     and equity); and
       ``(L) other public interest considerations.''; and
       (2) by adding at the end the following:
       ``(4) Judicial review.--Notwithstanding section 24(d), a 
     court shall affirm a Commission assessment of costs and 
     benefits under this subsection, unless the court finds the 
     assessment to be an abuse of discretion.''.

     SEC. 203. DIVISION DIRECTORS.

       Section 2(a)(6)(C) of the Commodity Exchange Act (7 U.S.C. 
     2(a)(6)(C)) is amended by inserting ``, and the heads of the 
     units shall serve at the pleasure of the Commission'' before 
     the period.

     SEC. 204. OFFICE OF THE CHIEF ECONOMIST.

       (a) In General.--Section 2(a) of the Commodity Exchange Act 
     (7 U.S.C. 2(a)) is amended by adding at the end the 
     following:
       ``(16) Office of the chief economist.--
       ``(A) Establishment.--There is established in the 
     Commission the Office of the Chief Economist.
       ``(B) Head.--The Office of the Chief Economist shall be 
     headed by the Chief Economist, who shall be appointed by the 
     Commission and serve at the pleasure of the Commission.
       ``(C) Functions.--The Chief Economist shall report directly 
     to the Commission and perform such functions and duties as 
     the Commission may prescribe.
       ``(D) Professional staff.--The Commission shall appoint 
     such other economists as may be necessary to assist the Chief 
     Economist in performing such economic analysis, regulatory 
     cost-benefit analysis, or research any member of the 
     Commission may request.''.
       (b) Conforming Amendment.--Section 2(a)(6)(A) of such Act 
     (7 U.S.C. 2(a)(6)(A)) is amended by striking ``(4) and (5) of 
     this subsection'' and inserting ``(4), (5), and (16)''.
       (c) Sense of the Congress.--It is the sense of the Congress 
     that the Commodity Futures Trading Commission should take all 
     appropriate actions to encourage applications for positions 
     in the Office of the Chief Economist from members of minority 
     groups, women, disabled persons, and veterans.

     SEC. 205. PROCEDURES GOVERNING ACTIONS TAKEN BY COMMISSION 
                   STAFF.

       Section 2(a)(12) of the Commodity Exchange Act (7 U.S.C. 
     2(a)(12)) is amended--
       (1) by striking ``(12) The'' and inserting the following:
       ``(12) Rules and regulations.--
       ``(A) In general.--Subject to the other provisions of this 
     paragraph, the''; and
       (2) by adding after and below the end the following new 
     subparagraph:
       ``(B) Notice to commissioners.--The Commission shall 
     develop and publish internal procedures governing the 
     issuance by any division or office of the Commission of any 
     response to a formal, written request or petition from any 
     member of the public for an exemptive, a no-action, or an 
     interpretive letter and such procedures shall provide that 
     the commissioners be provided with the final version of the 
     matter to be issued with sufficient notice to review the 
     matter prior to its issuance.''.

     SEC. 206. STRATEGIC TECHNOLOGY PLAN.

       Section 2(a) of the Commodity Exchange Act (7 U.S.C. 2(a)), 
     as amended by section 204(a) of this Act, is amended by 
     adding at the end the following:
       ``(17) Strategic technology plan.--
       ``(A) In general.--Every 5 years, the Commission shall 
     develop and submit to the Committee on Agriculture of the 
     House of Representatives and the Committee on Agriculture, 
     Nutrition, and Forestry of the Senate a detailed plan focused 
     on the acquisition and use of technology by the Commission.
       ``(B) Contents.--The plan shall--
       ``(i) include for each related division or office a 
     detailed technology strategy focused on market surveillance 
     and risk detection, market data collection, aggregation, 
     interpretation, standardization, harmonization, 
     normalization, validation, streamlining or other data 
     analytic processes, and internal management and protection of 
     data collected by the Commission, including a detailed 
     accounting of how the funds provided for technology will be 
     used and the priorities that will apply in the use of the 
     funds;
       ``(ii) set forth annual goals to be accomplished and annual 
     budgets needed to accomplish the goals; and
       ``(iii) include a summary of any plan of action and 
     milestones to address any known information security 
     vulnerability, as identified pursuant to a widely accepted 
     industry or Government standard, including--

       ``(I) specific information about the industry or Government 
     standard used to identify the known information security 
     vulnerability;
       ``(II) a detailed time line with specific deadlines for 
     addressing the known information security vulnerability; and
       ``(III) an update of any such time line and the rationale 
     for any deviation from the time line.''.

     SEC. 207. INTERNAL RISK CONTROLS.

       Section 2(a)(12) of the Commodity Exchange Act (7 U.S.C. 
     2(a)(12)), as amended by section 205 of this Act, is amended 
     by adding at the end the following:
       ``(C) Internal risk controls.--The Commission, in 
     consultation with the Chief Economist, shall develop 
     comprehensive internal risk control mechanisms to safeguard 
     and govern the storage of all market data by the Commission, 
     all market data sharing agreements of the Commission, and all 
     academic research performed at the Commission using market 
     data.''.

     SEC. 208. SUBPOENA DURATION AND RENEWAL.

       Section 6(c)(5) of the Commodity Exchange Act (7 U.S.C. 
     9(5)) is amended--
       (1) by striking ``(5) Subpoena.--For'' and inserting the 
     following:
       ``(5) Subpoena.--
       ``(A) In general.--For''; and
       (2) by adding after and below the end the following:
       ``(B) Omnibus orders of investigation.--
       ``(i) Duration and renewal.--An omnibus order of 
     investigation shall not be for an indefinite duration and may 
     be renewed only by Commission action.
       ``(ii) Definition.--In clause (i), the term `omnibus order 
     of investigation' means an order of the Commission 
     authorizing 1 of more members of the Commission or its staff 
     to issue subpoenas under subparagraph (A) to multiple persons 
     in relation to a particular subject matter area.''.

     SEC. 209. APPLICABILITY OF NOTICE AND COMMENT REQUIREMENTS OF 
                   THE ADMINISTRATIVE PROCEDURE ACT TO GUIDANCE 
                   VOTED ON BY THE COMMISSION.

       Section 2(a)(12) of the Commodity Exchange Act (7 U.S.C. 
     2(a)(12)), as amended by sections 205 and 207 of this Act, is 
     amended by adding at the end the following:
       ``(D) Applicability of notice and comment rules to guidance 
     voted on by the commission.--The notice and comment 
     requirements of section 553 of title 5, United States Code, 
     shall also apply with respect to any Commission statement or 
     guidance, including interpretive rules, general statements of 
     policy, or rules of Commission organization, procedure, or 
     practice, that has the effect of implementing, interpreting 
     or prescribing law or policy and that is voted on by the 
     Commission.''.

     SEC. 210. JUDICIAL REVIEW OF COMMISSION RULES.

       The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended 
     by adding at the end the following:

     ``SEC. 24. JUDICIAL REVIEW OF COMMISSION RULES.

       ``(a) A person adversely affected by a rule of the 
     Commission promulgated under this Act may obtain review of 
     the rule in the United States Court of Appeals for the 
     District of Columbia Circuit or the United States Court of 
     Appeals for the circuit where the party resides or has the 
     principal place of business, by filing in the court, within 
     60 days after publication in the Federal Register of the 
     entry of the rule, a written petition requesting that the 
     rule be set aside.
       ``(b) A copy of the petition shall be transmitted forthwith 
     by the clerk of the court to an officer designated by the 
     Commission for that purpose. Thereupon the Commission shall 
     file in the court the record on which the rule complained of 
     is entered, as provided in section 2112 of title 28, United 
     States Code, and the Federal Rules of Appellate Procedure.
       ``(c) On the filing of the petition, the court has 
     jurisdiction, which becomes exclusive on the filing of the 
     record, to affirm and enforce or to set aside the rule in 
     whole or in part.

[[Page 804]]

       ``(d) The court shall affirm and enforce the rule unless 
     the Commission's action in promulgating the rule is found to 
     be arbitrary, capricious, an abuse of discretion, or 
     otherwise not in accordance with law; contrary to 
     constitutional right, power, privilege, or immunity; in 
     excess of statutory jurisdiction, authority, or limitations, 
     or short of statutory right; or without observance of 
     procedure required by law.''.

     SEC. 211. GAO STUDY ON USE OF COMMISSION RESOURCES.

       (a) Study.--The Comptroller General of the United States 
     shall conduct a study of the resources of the Commodity 
     Futures Trading Commission that--
       (1) assesses whether the resources of the Commission are 
     sufficient to enable the Commission to effectively carry out 
     the duties of the Commission;
       (2) examines the expenditures of the Commission on 
     hardware, software, and analytical processes designed to 
     protect customers in the areas of--
       (A) market surveillance and risk detection; and
       (B) market data collection, aggregation, interpretation, 
     standardization, harmonization, and streamlining;
       (3) analyzes the additional workload undertaken by the 
     Commission, and ascertains where self-regulatory 
     organizations could be more effectively utilized; and
       (4) examines existing and emerging post-trade risk 
     reduction services in the swaps market, the notional amount 
     of risk reduction transactions provided by the services, and 
     the effects the services have on financial stability, 
     including--
       (A) market surveillance and risk detection;
       (B) market data collection, aggregation, interpretation, 
     standardization, harmonization, and streamlining; and
       (C) oversight and compliance work by market participants 
     and regulators.
       (b) Report.--Not later than 180 days after the date of the 
     enactment of this Act, the Comptroller General of the United 
     States shall submit to the Committee on Agriculture of the 
     House of Representatives and the Committee on Agriculture, 
     Nutrition, and Forestry of the Senate a report that contains 
     the results of the study required by subsection (a).

     SEC. 212. DISCLOSURE OF REQUIRED DATA OF OTHER REGISTERED 
                   ENTITIES.

       Section 8 of the Commodity Exchange Act (7 U.S.C. 12) is 
     amended by adding at the end the following:
       ``(j) Disclosure of Required Data of Other Registered 
     Entities.--
       ``(1) Except as provided in this subsection, the Commission 
     may not be compelled to disclose any proprietary information 
     provided to the Commission, except that nothing in this 
     subsection--
       ``(A) authorizes the Commission to withhold information 
     from Congress; or
       ``(B) prevents the Commission from--
       ``(i) complying with a request for information from any 
     other Federal department or agency, any State or political 
     subdivision thereof, or any foreign government or any 
     department, agency, or political subdivision thereof 
     requesting the report or information for purposes within the 
     scope of its jurisdiction, upon an agreement of 
     confidentiality to protect the information in a manner 
     consistent with this paragraph and subsection (e); or
       ``(ii) making a disclosure made pursuant to a court order 
     in connection with an administrative or judicial proceeding 
     brought under this Act, in any receivership proceeding 
     involving a receiver appointed in a judicial proceeding 
     brought under this Act, or in any bankruptcy proceeding in 
     which the Commission has intervened or in which the 
     Commission has the right to appear and be heard under title 
     11 of the United States Code.
       ``(2) Any proprietary information of a commodity trading 
     advisor or commodity pool operator ascertained by the 
     Commission in connection with Form CPO-PQR, Form CTA-PR, and 
     any successor forms thereto, shall be subject to the same 
     limitations on public disclosure, as any facts ascertained 
     during an investigation, as provided by subsection (a); 
     provided, however, that the Commission shall not be precluded 
     from publishing aggregate information compiled from such 
     forms, to the extent such aggregate information does not 
     identify any individual person or firm, or such person's 
     proprietary information.
       ``(3) For purposes of section 552 of title 5, United States 
     Code, this subsection, and the information contemplated 
     herein, shall be considered a statute described in subsection 
     (b)(3)(B) of such section 552.
       ``(4) For purposes of the definition of proprietary 
     information in paragraph (5), the records and reports of any 
     client account or commodity pool to which a commodity trading 
     advisor or commodity pool operator registered under this 
     title provides services that are filed with the Commission on 
     Form CPO-PQR, CTA-PR, and any successor forms thereto, shall 
     be deemed to be the records and reports of the commodity 
     trading advisor or commodity pool operator, respectively.
       ``(5) For purposes of this section, proprietary information 
     of a commodity trading advisor or commodity pool operator 
     includes sensitive, non-public information regarding--
       ``(A) the commodity trading advisor, commodity pool 
     operator or the trading strategies of the commodity trading 
     advisor or commodity pool operator;
       ``(B) analytical or research methodologies of a commodity 
     trading advisor or commodity pool operator;
       ``(C) trading data of a commodity trading advisor or 
     commodity pool operator; and
       ``(D) computer hardware or software containing intellectual 
     property of a commodity trading advisor or commodity pool 
     operator;''.

                       TITLE III--END-USER RELIEF

     SEC. 301. TRANSACTIONS WITH UTILITY SPECIAL ENTITIES.

       Section 1a(49) of the Commodity Exchange Act (7 U.S.C. 
     1a(49)) is amended by adding at the end the following:
       ``(E) Certain transactions with a utility special entity.--
       ``(i) Transactions in utility operations-related swaps 
     shall be reported pursuant to section 4r.
       ``(ii) In making a determination to exempt pursuant to 
     subparagraph (D), the Commission shall treat a utility 
     operations-related swap entered into with a utility special 
     entity, as defined in section 4s(h)(2)(D), as if it were 
     entered into with an entity that is not a special entity, as 
     defined in section 4s(h)(2)(C).''.

     SEC. 302. UTILITY SPECIAL ENTITY DEFINED.

       Section 4s(h)(2) of the Commodity Exchange Act (7 U.S.C. 
     6s(h)(2)) is amended by adding at the end the following:
       ``(D) Utility special entity.--For purposes of this Act, 
     the term `utility special entity' means a special entity, or 
     any instrumentality, department, or corporation of or 
     established by a State or political subdivision of a State, 
     that--
       ``(i) owns or operates, or anticipates owning or operating, 
     an electric or natural gas facility or an electric or natural 
     gas operation;
       ``(ii) supplies, or anticipates supplying, natural gas and 
     or electric energy to another utility special entity;
       ``(iii) has, or anticipates having, public service 
     obligations under Federal, State, or local law or regulation 
     to deliver electric energy or natural gas service to 
     customers; or
       ``(iv) is a Federal power marketing agency, as defined in 
     section 3 of the Federal Power Act.''.

     SEC. 303. UTILITY OPERATIONS-RELATED SWAP.

       (a) Swap Further Defined.--Section 1a(47)(A)(iii) of the 
     Commodity Exchange Act (7 U.S.C. 1a(47)(A)(iii)) is amended--
       (1) by striking ``and'' at the end of subclause (XXI);
       (2) by adding ``and'' at the end of subclause (XXII); and
       (3) by adding at the end the following:

       ``(XXIII) a utility operations-related swap;''.

       (b) Utility Operations-Related Swap Defined.--Section 1a of 
     such Act (7 U.S.C. 1a) is amended by adding at the end the 
     following:
       ``(52) Utility operations-related swap.--The term `utility 
     operations-related swap' means a swap that--
       ``(A) is entered into by a utility to hedge or mitigate a 
     commercial risk;
       ``(B) is not a contract, agreement, or transaction based 
     on, derived on, or referencing--
       ``(i) an interest rate, credit, equity, or currency asset 
     class;
       ``(ii) except as used for fuel for electric energy 
     generation, a metal, agricultural commodity, or crude oil or 
     gasoline commodity of any grade; or
       ``(iii) any other commodity or category of commodities 
     identified for this purpose in a rule or order adopted by the 
     Commission in consultation with the appropriate Federal and 
     State regulatory commissions; and
       ``(C) is associated with--
       ``(i) the generation, production, purchase, or sale of 
     natural gas or electric energy, the supply of natural gas or 
     electric energy to a utility, or the delivery of natural gas 
     or electric energy service to utility customers;
       ``(ii) fuel supply for the facilities or operations of a 
     utility;
       ``(iii) compliance with an electric system reliability 
     obligation;
       ``(iv) compliance with an energy, energy efficiency, 
     conservation, or renewable energy or environmental statute, 
     regulation, or government order applicable to a utility; or
       ``(v) any other electric energy or natural gas swap to 
     which a utility is a party.''.

     SEC. 304. END-USERS NOT TREATED AS FINANCIAL ENTITIES.

       (a) In General.--Section 2(h)(7)(C)(iii) of the Commodity 
     Exchange Act (7 U.S.C. 2(h)(7)(C)(iii)) is amended to read as 
     follows:
       ``(iii) Limitation.--Such definition shall not include an 
     entity--

       ``(I) whose primary business is providing financing, and 
     who uses derivatives for the purpose of hedging underlying 
     commercial risks related to interest rate and foreign 
     currency exposures, 90 percent or more of which arise from 
     financing that facilitates the purchase or lease of products, 
     90 percent or more of which are manufactured by the parent 
     company or another subsidiary of the parent company; or
       ``(II) who is not supervised by a prudential regulator, and 
     is not described in any of subclauses (I) through (VII) of 
     clause (i), and--

       ``(aa) is a commercial market participant; or
       ``(bb) enters into swaps, contracts for future delivery, 
     and other derivatives on behalf of, or to hedge or mitigate 
     the commercial risk of, whether directly or in the aggregate, 
     affiliates that are not so supervised or described.''.
       (b) Commercial Market Participant Defined.--
       (1) In general.--Section 1a of such Act (7 U.S.C. 1a), as 
     amended by section 303(b) of this Act, is amended by 
     redesignating paragraphs (7) through (52) as paragraphs (8) 
     through (53), respectively, and by inserting after paragraph 
     (6) the following:
       ``(7) Commercial market participant.--The term `commercial 
     market participant' means any producer, processor, merchant, 
     or commercial

[[Page 805]]

     user of an exempt or agricultural commodity, or the products 
     or byproducts of such a commodity.''.
       (2) Conforming amendments.--
       (A) Section 1a of such Act (7 U.S.C. 1a) is amended--
       (i) in subparagraph (A) of paragraph (18) (as so 
     redesignated by paragraph (1) of this subsection), in the 
     matter preceding clause (i), by striking ``(18)(A)'' and 
     inserting ``(19)(A)''; and
       (ii) in subparagraph (A)(vii) of paragraph (19) (as so 
     redesignated by paragraph (1) of this subsection), in the 
     matter following subclause (III), by striking ``(17)(A)'' and 
     inserting ``(18)(A)''.
       (B) Section 4(c)(1)(A)(i)(I) of such Act (7 U.S.C. 
     6(c)(1)(A)(i)(I)) is amended by striking ``(7), paragraph 
     (18)(A)(vii)(III), paragraphs (23), (24), (31), (32), (38), 
     (39), (41), (42), (46), (47), (48), and (49)'' and inserting 
     ``(8), paragraph (19)(A)(vii)(III), paragraphs (24), (25), 
     (32), (33), (39), (40), (42), (43), (47), (48), (49), and 
     (50)''.
       (C) Section 4q(a)(1) of such Act (7 U.S.C. 6o-1(a)(1)) is 
     amended by striking ``1a(9)'' and inserting ``1a(10)''.
       (D) Section 4s(f)(1)(D) of such Act (7 U.S.C. 6s(f)(1)(D)) 
     is amended by striking ``1a(47)(A)(v)'' and inserting 
     ``1a(48)(A)(v)''.
       (E) Section 4s(h)(5)(A)(i) of such Act (7 U.S.C. 
     6s(h)(5)(A)(i)) is amended by striking ``1a(18)'' and 
     inserting ``1a(19)''.
       (F) Section 4t(b)(1)(C) of such Act (7 U.S.C. 6t(b)(1)(C)) 
     is amended by striking ``1a(47)(A)(v)'' and inserting 
     ``1a(48)(A)(v)''.
       (G) Section 5(d)(23) of such Act (7 U.S.C. 7(d)(23)) is 
     amended by striking ``1a(47)(A)(v)'' and inserting 
     ``1a(48)(A)(v)''.
       (H) Section 5(e)(1) of such Act (7 U.S.C. 7(e)(1)) is 
     amended by striking ``1a(9)'' and inserting ``1a(10)''.
       (I) Section 5b(k)(3)(A) of such Act (7 U.S.C. 7a-
     1(k)(3)(A)) is amended by striking ``1a(47)(A)(v)'' and 
     inserting ``1a(48)(A)(v)''.
       (J) Section 5h(f)(10)(A)(iii) of such Act (7 U.S.C. 7b-
     3(f)(10)(A)(iii)) is amended by striking ``1a(47)(A)(v)'' and 
     inserting ``1a(48)(A)(v)''.
       (K) Section 21(f)(4)(C) of such Act (7 U.S.C. 24a(f)(4)(C)) 
     is amended by striking ``1a(48)'' and inserting ``1a(49)''.

     SEC. 305. REPORTING OF ILLIQUID SWAPS SO AS TO NOT 
                   DISADVANTAGE CERTAINON-FINANCIAL END-USERS.

       Section 2(a)(13) of the Commodity Exchange Act (7 U.S.C. 
     2(a)(13)) is amended--
       (1) in subparagraph (C), by striking ``The Commission'' and 
     inserting ``Except as provided in subparagraph (D), the 
     Commission''; and
       (2) by redesignating subparagraphs (D) through (G) as 
     subparagraphs (E) through (H), respectively, and inserting 
     after subparagraph (C) the following:
       ``(D) Requirements for swap transactions in illiquid 
     markets.--Notwithstanding subparagraph (C):
       ``(i) The Commission shall provide by rule for the public 
     reporting of swap transactions, including price and volume 
     data, in illiquid markets that are not cleared and entered 
     into by a non-financial entity that is hedging or mitigating 
     commercial risk in accordance with subsection (h)(7)(A).
       ``(ii) The Commission shall ensure that the swap 
     transaction information referred to in clause (i) of this 
     subparagraph is available to the public no sooner than 30 
     days after the swap transaction has been executed or at such 
     later date as the Commission determines appropriate to 
     protect the identity of participants and positions in 
     illiquid markets and to prevent the elimination or reduction 
     of market liquidity.
       ``(iii) In this subparagraph, the term `illiquid markets' 
     means any market in which the volume and frequency of trading 
     in swaps is at such a level as to allow identification of 
     individual market participants.''.

     SEC. 306. RELIEF FOR GRAIN ELEVATOR OPERATORS, FARMERS, 
                   AGRICULTURAL COUNTERPARTIES, AND COMMERCIAL 
                   MARKET PARTICIPANTS.

       The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended 
     by inserting after section 4t the following:

     ``SEC. 4U. RECORDKEEPING REQUIREMENTS APPLICABLE TO NON-
                   REGISTERED MEMBERS OF CERTAIN REGISTERED 
                   ENTITIES.

       ``Except as provided in section 4(a)(3), a member of a 
     designated contract market or a swap execution facility that 
     is not registered with the Commission and not required to be 
     registered with the Commission in any capacity shall satisfy 
     the recordkeeping requirements of this Act and any 
     recordkeeping rule, order, or regulation under this Act by 
     maintaining a written record of each transaction in a 
     contract for future delivery, option on a future, swap, 
     swaption, trade option, or related cash or forward 
     transaction. The written record shall be sufficient if it 
     includes the final agreement between the parties and the 
     material economic terms of the transaction.''.

     SEC. 307. RELIEF FOR END-USERS WHO USE PHYSICAL CONTRACTS 
                   WITH VOLUMETRIC OPTIONALITY.

       Section 1a(48)(B)(ii) of the Commodity Exchange Act (7 
     U.S.C. 1a(47)(B)(ii)), as so redesignated by section 
     304(b)(1) of this Act, is amended to read as follows:
       ``(ii) any purchase or sale of a nonfinancial commodity or 
     security for deferred shipment or delivery, so long as the 
     transaction is intended to be physically settled, including 
     any stand-alone or embedded option for which exercise results 
     in a physical delivery obligation;''.

     SEC. 308. COMMISSION VOTE REQUIRED BEFORE AUTOMATIC CHANGE OF 
                   SWAP DEALER DE MINIMIS LEVEL.

       Section 1a(50)(D) of the Commodity Exchange Act (7 U.S.C. 
     1a(49)(D)), as so redesignated by section 304(b)(1) of this 
     Act, is amended--
       (1) by striking all that precedes ``shall exempt'' and 
     inserting the following:
       ``(D) Exception.--
       ``(i) In general.--The Commission''; and
       (2) by adding after and below the end the following new 
     clause:
       ``(ii) De minimis quantity.--The de minimis quantity of 
     swap dealing described in clause (i) shall be set at a 
     quantity of $8,000,000,000, and may be amended or changed 
     only through a new affirmative action of the Commission 
     undertaken by rule or regulation.''.

     SEC. 309. CAPITAL REQUIREMENTS FOR NON-BANK SWAP DEALERS.

       (a) Commodity Exchange Act.--Section 4s(e) of the Commodity 
     Exchange Act (7 U.S.C. 6s(e)) is amended--
       (1) in paragraph (2)(B), by striking ``shall'' and 
     inserting the following: ``and the Securities and Exchange 
     Commission, in consultation with the prudential regulators, 
     shall jointly''; and
       (2) in paragraph (3)(D)--
       (A) in clause (ii), by striking ``shall, to the maximum 
     extent practicable,'' and inserting ``shall''; and
       (B) by adding at the end the following:
       ``(iii) Financial models.--To the extent that swap dealers 
     and major swap participants that are banks are permitted to 
     use financial models approved by the prudential regulators or 
     the Securities and Exchange Commission to calculate minimum 
     capital requirements and minimum initial and variation margin 
     requirements, including the use of non-cash collateral, the 
     Commission shall, in consultation with the prudential 
     regulators and the Securities and Exchange Commission, permit 
     the use of comparable financial models by swap dealers and 
     major swap participants that are not banks.''.
       (b) Securities Exchange Act of 1934.--Section 15F(e) of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78o-10(e)) is 
     amended--
       (1) in paragraph (2)(B), by striking ``shall'' and 
     inserting the following: ``and the Commodity Futures Trading 
     Commission, in consultation with the prudential regulators, 
     shall jointly''; and
       (2) in paragraph (3)(D)--
       (A) in clause (ii), by striking ``shall, to the maximum 
     extent practicable,'' and inserting ``shall''; and
       (B) by adding at the end the following:
       ``(iii) Financial models.--To the extent that security-
     based swap dealers and major security-based swap participants 
     that are banks are permitted to use financial models approved 
     by the prudential regulators or the Commodity Futures Trading 
     Commission to calculate minimum capital requirements and 
     minimum initial and variation margin requirements, including 
     the use of non-cash collateral, the Commission shall, in 
     consultation with the Commodity Futures Trading Commission, 
     permit the use of comparable financial models by security-
     based swap dealers and major security-based swap participants 
     that are not banks.''.

     SEC. 310. HARMONIZATION WITH THE JUMPSTART OUR BUSINESS 
                   STARTUPS ACT.

       Within 90 days after the date of the enactment of this Act, 
     the Commodity Futures Trading Commission shall--
       (1) revise section 4.7(b) of title 17, Code of Federal 
     Regulations, in the matter preceding paragraph (1), to read 
     as follows:
       ``(b) Relief available to commodity pool operators. Upon 
     filing the notice required by paragraph (d) of this section, 
     and subject to compliance with the conditions specified in 
     paragraph (d) of this section, any registered commodity pool 
     operator who sells participations in a pool solely to 
     qualified eligible persons in an offering which qualifies for 
     exemption from the registration requirements of the 
     Securities Act pursuant to section 4(2) of that Act or 
     pursuant to Regulation S, 17 CFR 230.901 et seq., and any 
     bank registered as a commodity pool operator in connection 
     with a pool that is a collective trust fund whose securities 
     are exempt from registration under the Securities Act 
     pursuant to section 3(a)(2) of that Act and are sold solely 
     to qualified eligible persons, may claim any or all of the 
     following relief with respect to such pool:''; and
       (2) revise section 4.13(a)(3)(i) of such title to read as 
     follows:
       ``(i) Interests in the pool are exempt from registration 
     under the Securities Act of 1933, and such interests are 
     offered and sold pursuant to section 4 of the Securities Act 
     of 1933 and the regulations thereunder;''.

     SEC. 311. BONA FIDE HEDGE DEFINED TO PROTECT END-USER RISK 
                   MANAGEMENT NEEDS.

       Section 4a(c) of the Commodity Exchange Act (7 U.S.C. 
     6a(c)) is amended--
       (1) in paragraph (1)--
       (A) by striking ``may'' and inserting ``shall''; and
       (B) by striking ``future for which'' and inserting 
     ``future, to be determined by the Commission, for which 
     either an appropriate swap is available or'';
       (2) in paragraph (2)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``subsection (a)(2)'' and all that follows through ``position 
     as'' and inserting ``paragraphs (2) and (5) of subsection (a) 
     for swaps, contracts of sale for future delivery, or options 
     on the contracts or commodities, a bona fide hedging 
     transaction or position is''; and
       (B) in subparagraph (A)(ii), by striking ``of risks'' and 
     inserting ``or management of current or anticipated risks''; 
     and
       (3) by adding at the end the following:
       ``(3) The Commission may further define, by rule or 
     regulation, what constitutes a bona fide

[[Page 806]]

     hedging transaction, provided that the rule or regulation is 
     consistent with the requirements of subparagraphs (A) and (B) 
     of paragraph (2).''.

     SEC. 312. CROSS-BORDER REGULATION OF DERIVATIVES 
                   TRANSACTIONS.

       (a) Rulemaking Required.--Within 1 year after the date of 
     the enactment of this Act, the Commodity Futures Trading 
     Commission shall issue a rule that addresses--
       (1) the nature of the connections to the United States that 
     require a non-United States person to register as a swap 
     dealer or a major swap participant under the Commodity 
     Exchange Act and the regulations issued under such Act;
       (2) which of the United States swaps requirements apply to 
     the swap activities of non-United States persons and United 
     States persons and their branches, agencies, subsidiaries, 
     and affiliates outside of the United States, and the extent 
     to which the requirements apply; and
       (3) the circumstances under which a United States person or 
     non-United States person in compliance with the swaps 
     regulatory requirements of a foreign jurisdiction shall be 
     exempt from United States swaps requirements.
       (b) Content of the Rule.--
       (1) Criteria.--In the rule, the Commission shall establish 
     criteria for determining that 1 or more categories of the 
     swaps regulatory requirements of a foreign jurisdiction are 
     comparable to and as comprehensive as United States swaps 
     requirements. The criteria shall include--
       (A) the scope and objectives of the swaps regulatory 
     requirements of the foreign jurisdiction;
       (B) the effectiveness of the supervisory compliance program 
     administered;
       (C) the enforcement authority exercised by the foreign 
     jurisdiction; and
       (D) such other factors as the Commission, by rule, 
     determines to be necessary or appropriate in the public 
     interest.
       (2) Comparability.--In the rule, the Commission shall--
       (A) provide that any non-United States person or any 
     transaction between 2 non-United States persons shall be 
     exempt from United States swaps requirements if the person or 
     transaction is in compliance with the swaps regulatory 
     requirements of a foreign jurisdiction which the Commission 
     has determined to be comparable to and as comprehensive as 
     United States swaps requirements; and
       (B) set forth the circumstances in which a United States 
     person or a transaction between a United States person and a 
     non-United States person shall be exempt from United States 
     swaps requirements if the person or transaction is in 
     compliance with the swaps regulatory requirements of a 
     foreign jurisdiction which the Commission has determined to 
     be comparable to and as comprehensive as United States swaps 
     requirements.
       (3) Outcomes-based comparison.--In developing and applying 
     the criteria, the Commission shall emphasize the results and 
     outcomes of, rather than the design and construction of, 
     foreign swaps regulatory requirements.
       (4) Risk-based rulemaking.--In the rule, the Commission 
     shall not take into account, for the purposes of determining 
     the applicability of United States swaps requirements, the 
     location of personnel that arrange, negotiate, or execute 
     swaps.
       (5) No part of any rulemaking under this section shall 
     limit the Commission's antifraud or antimanipulation 
     authority.
       (c) Application of the Rule.--
       (1) Assessments of foreign jurisdictions.--Beginning on the 
     date on which a final rule is issued under this section, the 
     Commission shall begin to assess the swaps regulatory 
     requirements of foreign jurisdictions, in the order the 
     Commission determines appropriate, in accordance with the 
     criteria established pursuant to subsection (b)(1). Following 
     each assessment, the Commission shall determine, by rule or 
     by order, whether the swaps regulatory requirements of the 
     foreign jurisdiction are comparable to and as comprehensive 
     as United States swaps requirements.
       (2) Substituted compliance for unassessed major markets.--
     Beginning 18 months after the date of enactment of this Act--
       (A) the swaps regulatory requirements of each of the 8 
     foreign jurisdictions with the largest swaps markets, as 
     calculated by notional value during the 12-month period 
     ending with such date of enactment, except those with respect 
     to which a determination has been made under paragraph (1), 
     shall be considered to be comparable to and as comprehensive 
     as United States swaps requirements; and
       (B) a non-United States person or a transaction between 2 
     non-United States persons shall be exempt from United States 
     swaps requirements if the person or transaction is in 
     compliance with the swaps regulatory requirements of any of 
     such unexcepted foreign jurisdictions.
       (3) Suspension of substituted compliance.--If the 
     Commission determines, by rule or by order, that--
       (A) the swaps regulatory requirements of a foreign 
     jurisdiction are not comparable to and as comprehensive as 
     United States swaps requirements, using the categories and 
     criteria established under subsection (b)(1);
       (B) the foreign jurisdiction does not exempt from its swaps 
     regulatory requirements United States persons who are in 
     compliance with United States swaps requirements; or
       (C) the foreign jurisdiction is not providing equivalent 
     recognition of, or substituted compliance for, registered 
     entities (as defined in section 1a(41) of the Commodity 
     Exchange Act) domiciled in the United States,
     the Commission may suspend, in whole or in part, a 
     determination made under paragraph (1) or a consideration 
     granted under paragraph (2).
       (d) Petition for Review of Foreign Jurisdiction 
     Practices.--A registered entity, commercial market 
     participant (as defined in section 1a(7) of the Commodity 
     Exchange Act), or Commission registrant (within the meaning 
     of such Act) who petitions the Commission to make or change a 
     determination under subsection (c)(1) or (c)(3) of this 
     section shall be entitled to expedited consideration of the 
     petition. A petition shall include any evidence or other 
     supporting materials to justify why the petitioner believes 
     the Commission should make or change the determination. 
     Petitions under this section shall be considered by the 
     Commission any time following the enactment of this Act. 
     Within 180 days after receipt of a petition for a rulemaking 
     under this section, the Commission shall take final action on 
     the petition. Within 90 days after receipt of a petition to 
     issue an order or change an order issued under this section, 
     the Commission shall take final action on the petition.
       (e) Report to Congress.--If the Commission makes a 
     determination described in this section through an order, the 
     Commission shall articulate the basis for the determination 
     in a written report published in the Federal Register and 
     transmitted to the Committee on Agriculture of the House of 
     Representatives and Committee on Agriculture, Nutrition, and 
     Forestry of the Senate within 15 days of the determination. 
     The determination shall not be effective until 15 days after 
     the committees receive the report.
       (f) Definitions.--As used in this Act and for purposes of 
     the rules issued pursuant to this Act, the following 
     definitions apply:
       (1) United states person.--The term ``United States 
     person''--
       (A) means--
       (i) any natural person resident in the United States;
       (ii) any partnership, corporation, trust, or other legal 
     person organized or incorporated under the laws of the United 
     States or having its principal place of business in the 
     United States;
       (iii) any account (whether discretionary or non-
     discretionary) of a United States person; and
       (iv) any other person as the Commission may further define 
     to more effectively carry out the purposes of this section; 
     and
       (B) does not include the International Monetary Fund, the 
     International Bank for Reconstruction and Development, the 
     Inter-American Development Bank, the Asian Development Bank, 
     the African Development Bank, the United Nations, their 
     agencies or pension plans, or any other similar international 
     organizations or their agencies or pension plans.
       (2) United states swaps requirements.--The term ``United 
     States swaps requirements'' means the provisions relating to 
     swaps contained in the Commodity Exchange Act (7 U.S.C. 1a et 
     seq.) that were added by title VII of the Dodd-Frank Wall 
     Street Reform and Consumer Protection Act (15 U.S.C. 8301 et 
     seq.) and any rules or regulations prescribed by the 
     Commodity Futures Trading Commission pursuant to such 
     provisions.
       (3) Foreign jurisdiction.--The term ``foreign 
     jurisdiction'' means any national or supranational political 
     entity with common rules governing swaps transactions.
       (4) Swaps regulatory requirements.--The term ``swaps 
     regulatory requirements'' means any provisions of law, and 
     any rules or regulations pursuant to the provisions, 
     governing swaps transactions or the counterparties to swaps 
     transactions.
       (g) Conforming Amendment.--Section 4(c)(1)(A) of the 
     Commodity Exchange Act (7 U.S.C. 6(c)(1)(A)) is amended by 
     inserting ``or except as necessary to effectuate the purposes 
     of the Commodity End-User Relief Act,'' after ``to grant 
     exemptions,''.

     SEC. 313. EXEMPTION OF QUALIFIED CHARITABLE ORGANIZATIONS 
                   FROM DESIGNATION AND REGULATION AS COMMODITY 
                   POOL OPERATORS.

       (a) Exclusion From Definition of Commodity Pool.--Section 
     1a(11) of the Commodity Exchange Act (7 U.S.C. 1a(10)), as so 
     redesignated by section 304(b)(1) of this Act, is amended by 
     adding at the end the following:
       ``(C) Exclusion.--The term `commodity pool' shall not 
     include any investment trust, syndicate, or similar form of 
     enterprise excluded from the definition of `investment 
     company' pursuant to section 3(c)(10) or 3(c)(14) of the 
     Investment Company Act of 1940.''.
       (b) Inapplicability of Prohibition on Use of 
     Instrumentalities of Interstate Commerce by Unregistered 
     Commodity Trading Advisor.--Section 4m of such Act (7 U.S.C. 
     6m) is amended--
       (1) in paragraph (1), in the second sentence, by inserting 
     ``: Provided further, That the provisions of this section 
     shall not apply to any commodity trading advisor that is: (A) 
     a charitable organization, as defined in section 3(c)(10)(D) 
     of the Investment Company Act of 1940, or a trustee, 
     director, officer, employee, or volunteer of such a 
     charitable organization acting within the scope of the 
     employment or duties of the person with the organization, 
     whose trading advice is provided only to, or with respect to, 
     1 or more of the following: (i) any such charitable 
     organization; or (ii) an investment trust, syndicate or 
     similar form of enterprise excluded from the definition of 
     `investment company' pursuant to section 3(c)(10) of the 
     Investment Company Act of 1940; or (B) any plan, company, or 
     account described in section 3(c)(14) of the Investment

[[Page 807]]

     Company Act of 1940, any person or entity who establishes or 
     maintains such a plan, company, or account, or any trustee, 
     director, officer, employee, or volunteer for any of the 
     foregoing plans, persons, or entities acting within the scope 
     of the employment or duties of the person with the 
     organization, whose trading advice is provided only to, or 
     with respect to, any investment trust, syndicate, or similar 
     form of enterprise excluded from the definition of 
     `investment company' pursuant to section 3(c)(14) of the 
     Investment Company Act of 1940'' before the period; and
       (2) by adding at the end the following:
       ``(4) Disclosure Concerning Excluded Charitable 
     Organizations.--The operator of or advisor to any investment 
     trust, syndicate, or similar form of enterprise excluded from 
     the definition of `commodity pool' by reason of section 
     1a(10)(C) of this Act pursuant to section 3(c)(10) of the 
     Investment Company Act of 1940 shall provide disclosure in 
     accordance with section 7(e) of the Investment Company Act of 
     1940.''.

     SEC. 314. SMALL BANK HOLDING COMPANY CLEARING EXEMPTION.

       Section 2(h)(7)(C) of the Commodity Exchange Act (7 U.S.C. 
     2(h)(7)(C)) is amended by adding at the end the following:
       ``(iv) Holding companies.--A determination made by the 
     Commission under clause (ii) shall, with respect to small 
     banks and savings associations, also apply to their 
     respective bank holding company (as defined in section 2 of 
     the Bank Holding Company Act of 1956), or savings and loan 
     holding company (as defined in section 10 of the Home Owners' 
     Loan Act of 1933)), if the total consolidated assets of the 
     holding company are no greater than the asset threshold set 
     by the Commission in determining small bank and savings 
     association eligibility under clause (ii).''.

     SEC. 315. CORE PRINCIPLE CERTAINTY.

       Section 5h(f) of the Commodity Exchange Act (7 U.S.C. 7b-
     3(f)) is amended--
       (1) in paragraph (1)(B), by inserting ``except as described 
     in this subsection'' after ``Commission by rule or 
     regulation'';
       (2) in paragraph (2), by amending subparagraph (D) to read 
     as follows:
       ``(D) have reasonable discretion in establishing and 
     enforcing its rules related to trade practice surveillance, 
     market surveillance, real-time marketing monitoring, and 
     audit trail given that a swap execution facility may offer a 
     trading system or platform to execute or trade swaps through 
     any means of interstate commerce. A swap execution facility 
     shall be responsible for monitoring trading in swaps only on 
     its own facility.'';
       (3) in paragraph (4)(B), by adding at the end the 
     following: ``A swap execution facility shall be responsible 
     for monitoring trading in swaps only on its own facility.'';
       (4) in paragraph (6)(B)--
       (A) by striking ``shall--'' and all that follows through 
     ``compliance with the'' and insert ``shall monitor the 
     trading activity on its facility for compliance with any''; 
     and
       (B) by adding at the end the following: ``A swap execution 
     facility shall be responsible for monitoring positions only 
     on its own facility.'';
       (5) in paragraph (8), by striking ``to liquidate'' and all 
     that follows and inserting ``to suspend or curtail trading in 
     a swap on its own facility.'';
       (6) in paragraph (13)(B), by striking ``1-year period, as 
     calculated on a rolling basis'' and inserting ``90-day 
     period, as calculated on a rolling basis, or conduct an 
     orderly wind-down of its operations, whichever is greater''; 
     and
       (7) in paragraph (15)--
       (A) in subparagraph (A), by adding at the end the 
     following: ``The individual may also perform other 
     responsibilities for the swap execution facility.'';
       (B) in subparagraph (B)--
       (i) in clause (i), by inserting ``, a committee of the 
     board,'' after ``directly to the board'';
       (ii) by striking clauses (iii) through (v) and inserting 
     the following:
       ``(iii) establish and administer policies and procedures 
     that are reasonably designed to resolve any conflicts of 
     interest that may arise;
       ``(iv) establish and administer policies and procedures 
     that reasonably ensure compliance with this Act and the rules 
     and regulations issued under this Act, including rules 
     prescribed by the Commission pursuant to this section; and''; 
     and
       (iii) by redesignating clause (vi) as clause (v);
       (C) in subparagraph (C), by striking ``(B)(vi)'' and 
     inserting ``(B)(v)''; and
       (D) in subparagraph (D)--
       (i) in clause (i)--

       (I) by striking ``In accordance with rules prescribed by 
     the Commission, the'' and inserting ``The''; and
       (II) by striking ``and sign''; and

       (ii) in clause (ii)--

       (I) in the matter preceding subclause (I), by inserting 
     ``or senior officer'' after ``officer'';
       (II) by amending subclause (I) to read as follows:
       ``(I) submit each report described in clause (i) to the 
     Commission; and''; and
       (III) in subclause (II), by inserting ``materially'' before 
     ``accurate''.

     SEC. 316. TREATMENT OF FEDERAL HOME LOAN BANK PRODUCTS.

       (a) Section 1a(2) of the Commodity Exchange Act (7 U.S.C. 
     1a(2)) is amended--
       (1) in subparagraph (B), by striking ``and'';
       (2) in subparagraph (C), by striking the period and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(D) is the Federal Housing Finance Agency for any Federal 
     Home Loan Bank (as defined in section 2 of the Federal Home 
     Loan Bank Act).''.
       (b) Section 402(a) of the Legal Certainty for Bank Products 
     Act of 2000 (7 U.S.C. 27(a)) is amended--
       (1) by striking ``or'' at the end of paragraph (6);
       (2) by striking the period at the end of paragraph (7) and 
     inserting ``; or''; and
       (3) by adding at the end the following:
       ``(8) any Federal Home Loan Bank (as defined in section 2 
     of the Federal Home Loan Bank Act).''.

     SEC. 317. TREATMENT OF CERTAIN FUNDS.

       (a) Amendment to the Definition of Commodity Pool 
     Operator.--Section 1a(12) of the Commodity Exchange Act (7 
     U.S.C. 1a(11)), as so redesignated by section 304(b)(1) of 
     this Act, is amended by adding at the end the following:
       ``(C)(i) The term `commodity pool operator' does not 
     include a person who serves as an investment adviser to an 
     investment company registered pursuant to section 8 of the 
     Investment Company Act of 1940 or a subsidiary of such a 
     company, if the investment company or subsidiary invests, 
     reinvests, owns, holds, or trades in commodity interests 
     limited to only financial commodity interests.
       ``(ii) For purposes of this subparagraph only, the term 
     `financial commodity interest' means a futures contract, an 
     option on a futures contract, or a swap, involving a 
     commodity that is not an exempt commodity or an agricultural 
     commodity, including any index of financial commodity 
     interests, whether cash settled or involving physical 
     delivery.
       ``(iii) For purposes of this subparagraph only, the term 
     `commodity' does not include a security issued by a real 
     estate investment trust, business development company, or 
     issuer of asset-backed securities, including any index of 
     such securities.''.
       (b) Amendment to the Definition of Commodity Trading 
     Advisor.--Section 1a(13) of such Act (7 U.S.C. 1a(12)), as so 
     redesignated by section 304(b)(1) of this Act, is amended by 
     adding at the end the following:
       ``(E) The term `commodity trading advisor' does not include 
     a person who serves as an investment adviser to an investment 
     company registered pursuant to section 8 of the Investment 
     Company Act of 1940 or a subsidiary of such a company, if the 
     commodity trading advice relates only to a financial 
     commodity interest, as defined in paragraph (12)(C)(ii) of 
     this section. For purposes of this subparagraph only, the 
     term `commodity' does not include a security issued by a real 
     estate investment trust, business development company, or 
     issuer of asset-backed securities, including any index of 
     such securities.''.

                    TITLE IV--TECHNICAL CORRECTIONS

     SEC. 401. CORRECTION OF REFERENCES.

       (a) Section 2(h)(8)(A)(ii) of the Commodity Exchange Act (7 
     U.S.C. 2(h)(8)(A)(ii)) is amended by striking ``5h(f) of this 
     Act'' and inserting ``5h(g)''.
       (b) Section 5c(c)(5)(C)(i) of such Act (7 U.S.C. 7a-
     2(c)(5)(C)(i)) is amended by striking ``1a(2)(i))'' and 
     inserting ``1a(19)(i))''.
       (c) Section 23(f) of such Act (7 U.S.C. 26(f)) is amended 
     by striking ``section 7064'' and inserting ``section 706''.

     SEC. 402. ELIMINATION OF OBSOLETE REFERENCES TO DEALER 
                   OPTIONS.

       (a) In General.--Section 4c of the Commodity Exchange Act 
     (7 U.S.C. 6c) is amended by striking subsections (d) and (e) 
     and redesignating subsections (f) and (g) as subsections (d) 
     and (e), respectively.
       (b) Conforming Amendments.--
       (1) Section 2(d) of such Act (7 U.S.C. 2(d)) is amended by 
     striking ``(g) of'' and inserting ``(e) of''.
       (2) Section 4f(a)(4)(A)(i) of such Act (7 U.S.C. 
     6f(a)(4)(A)(i)) is amended by striking ``, (d), (e), and 
     (g)'' and inserting ``and (e)''.
       (3) Section 4k(5)(A) of such Act (7 U.S.C. 6k(5)(A)) is 
     amended by striking ``, (d), (e), and (g)'' and inserting 
     ``and (e)''.
       (4) Section 5f(b)(1)(A) of such Act (7 U.S.C. 7b-
     1(b)(1)(A)) is amended by striking ``, (e), and (g)'' and 
     inserting ``and (e)''.
       (5) Section 9(a)(2) of such Act (7 U.S.C. 13(a)(2)) is 
     amended by striking ``through (e)'' and inserting ``and 
     (c)''.

     SEC. 403. UPDATED TRADE DATA PUBLICATION REQUIREMENT.

       Section 4g(e) of the Commodity Exchange Act (7 U.S.C. 
     6g(e)) is amended by striking ``exchange'' and inserting 
     ``each designated contract market and swap execution 
     facility''.

     SEC. 404. FLEXIBILITY FOR REGISTERED ENTITIES.

       Section 5c(b) of the Commodity Exchange Act (7 U.S.C. 7a-
     2(b)) is amended by striking ``contract market, derivatives 
     transaction execution facility, or electronic trading 
     facility'' each place it appears and inserting ``registered 
     entity''.

     SEC. 405. ELIMINATION OF OBSOLETE REFERENCES TO ELECTRONIC 
                   TRADING FACILITIES.

       (a) Section 1a(19)(A)(x) of the Commodity Exchange Act (7 
     U.S.C. 1a(18)(A)(x)), as so redesignated by section 304(b)(1) 
     of this Act, is amended by striking ``(other than an 
     electronic trading facility with respect to a significant 
     price discovery contract)''.
       (b) Section 1a(40) of such Act (7 U.S.C. 1a(41)), as so 
     redesignated by section 304(b)(1) of this Act, is amended--
       (1) by adding ``and'' at the end of subparagraph (D); and
       (2) by striking all that follows ``section 21'' and 
     inserting a period.

[[Page 808]]

       (c) Section 4a(e) of such Act (7 U.S.C. 6a(e)) is amended--
       (1) in the first sentence--
       (A) by striking ``or by any electronic trading facility'';
       (B) by striking ``or on an electronic trading facility''; 
     and
       (C) by striking ``or electronic trading facility'' each 
     place it appears; and
       (2) in the second sentence, by striking ``or electronic 
     trading facility with respect to a significant price 
     discovery contract''.
       (d) Section 4g(a) of such Act (7 U.S.C. 6g(a)) is amended 
     by striking ``any significant price discovery contract traded 
     or executed on an electronic trading facility or''.
       (e) Section 4i of such Act (7 U.S.C. 6i) is amended--
       (1) by striking ``, or any significant price discovery 
     contract traded or executed on an electronic trading facility 
     or any agreement, contract, or transaction that is treated by 
     a derivatives clearing organization, whether registered or 
     not registered, as fungible with a significant price 
     discovery contract''; and
       (2) by striking ``or electronic trading facility''.
       (f) Section 6(b) of such Act (7 U.S.C. 8(b)) is amended by 
     striking ``or electronic trading facility'' each place it 
     appears.
       (g) Section 12(e)(2) of such Act (7 U.S.C. 16(e)(2)) is 
     amended by striking ``in the case of--'' and all that follows 
     and inserting ``in the case of an agreement, contract, or 
     transaction that is excluded from this Act under section 2(c) 
     or 2(f) of this Act or title IV of the Commodity Futures 
     Modernization Act of 2000, or exempted under section 4(c) of 
     this Act (regardless of whether any such agreement, contract, 
     or transaction is otherwise subject to this Act).''.

     SEC. 406. ELIMINATION OF OBSOLETE REFERENCE TO ALTERNATIVE 
                   SWAP EXECUTION FACILITIES.

       Section 5h(h) of the Commodity Exchange Act (7 U.S.C. 7b-
     3(h)) is amended by striking ``alternative'' before ``swap''.

     SEC. 407. ELIMINATION OF REDUNDANT REFERENCES TO TYPES OF 
                   REGISTERED ENTITIES.

       Section 6b of the Commodity Exchange Act (7 U.S.C. 13a) is 
     amended in the first sentence by striking ``as set forth in 
     sections 5 through 5c''.

     SEC. 408. CLARIFICATION OF COMMISSION AUTHORITY OVER SWAPS 
                   TRADING.

       Section 8a of the Commodity Exchange Act (7 U.S.C. 12a) is 
     amended--
       (1) in paragraph (7)--
       (A) by inserting ``the protection of swaps traders and to 
     assure fair dealing in swaps, for'' after ``appropriate 
     for'';
       (B) in subparagraph (A), by inserting ``swaps or'' after 
     ``conditions in''; and
       (C) in subparagraph (B), by inserting ``or swaps'' after 
     ``future delivery''; and
       (2) in paragraph (9)--
       (A) by inserting ``swap or'' after ``or liquidation of 
     any''; and
       (B) by inserting ``swap or'' after ``margin levels on 
     any''.

     SEC. 409. ELIMINATION OF OBSOLETE REFERENCE TO THE COMMODITY 
                   EXCHANGE COMMISSION.

       Section 13(c) of the Commodity Exchange Act (7 U.S.C. 
     13c(c)) is amended by striking ``or the Commission''.

     SEC. 410. ELIMINATION OF OBSOLETE REFERENCES TO DERIVATIVE 
                   TRANSACTION EXECUTION FACILITIES.

       (a) Section 1a(13)(B)(vi) of the Commodity Exchange Act (7 
     U.S.C. 1a(12)(B)(vi)), as so redesignated by section 
     304(b)(1) of this Act, is amended by striking ``derivatives 
     transaction execution facility'' and inserting ``swap 
     execution facility''.
       (b) Section 1a(35) of such Act (7 U.S.C. 1a(34)), as so 
     redesignated by section 304(b)(1) of this Act, is amended by 
     striking ``or derivatives transaction execution facility'' 
     each place it appears.
       (c) Section 1a(36)(B)(iii)(I) of such Act (7 U.S.C. 
     1a(35)(B)(iii)(I)), as so redesignated by section 304(b)(1) 
     of this Act, is amended by striking ``or registered 
     derivatives transaction execution facility''.
       (d) Section 2(a)(1)(C)(ii) of such Act (7 U.S.C. 
     2(a)(1)(C)(ii)) is amended--
       (1) by striking ``, or register a derivatives transaction 
     execution facility that trades or executes,'';
       (2) by striking ``, and no derivatives transaction 
     execution facility shall trade or execute such contracts of 
     sale (or options on such contracts) for future delivery''; 
     and
       (3) by striking ``or the derivatives transaction execution 
     facility,''.
       (e) Section 2(a)(1)(C)(v)(I) of such Act (7 U.S.C. 
     2(a)(1)(C)(v)(I)) is amended by striking ``, or any 
     derivatives transaction execution facility on which such 
     contract or option is traded,''.
       (f) Section 2(a)(1)(C)(v)(II) of such Act (7 U.S.C. 
     2(a)(1)(C)(v)(II)) is amended by striking ``or derivatives 
     transaction execution facility'' each place it appears.
       (g) Section 2(a)(1)(C)(v)(V) of such Act (7 U.S.C. 
     2(a)(1)(C)(v)(V)) is amended by striking ``or registered 
     derivatives transaction execution facility''.
       (h) Section 2(a)(1)(D)(i) of such Act (7 U.S.C. 
     2(a)(1)(D)(i)) is amended in the matter preceding subclause 
     (I)--
       (1) by striking ``in, or register a derivatives transaction 
     execution facility''; and
       (2) by striking ``, or registered as a derivatives 
     transaction execution facility for,''.
       (i) Section 2(a)(1)(D)(i)(IV) of such Act (7 U.S.C. 
     2(a)(1)(D)(i)(IV)) is amended by striking ``registered 
     derivatives transaction execution facility,'' each place it 
     appears.
       (j) Section 2(a)(1)(D)(ii)(I) of such Act (7 U.S.C. 
     2(a)(1)(D)(ii)(I)) is amended to read as follows:
       ``(I) the transaction is conducted on or subject to the 
     rules of a board of trade that has been designated by the 
     Commission as a contract market in such security futures 
     product; or''.
       (k) Section 2(a)(1)(D)(ii)(II) of such Act (7 U.S.C. 
     2(a)(1)(D)(ii)(II)) is amended by striking ``or registered 
     derivatives transaction execution facility''.
       (l) Section 2(a)(1)(D)(ii)(III) of such Act (7 U.S.C. 
     2(a)(1)(D)(ii)(III)) is amended by striking ``or registered 
     derivatives transaction execution facility member''.
       (m) Section 2(a)(9)(B)(ii) of such Act (7 U.S.C. 
     2(a)(9)(B)(ii)) is amended--
       (1) by striking ``or registration'' each place it appears;
       (2) by striking ``or derivatives transaction execution 
     facility'' each place it appears;
       (3) by striking ``or register'';
       (4) by striking ``, registering,''; and
       (5) by striking ``registration,''.
       (n) Section 2(c)(2) of such Act (7 U.S.C. 2(c)(2)) is 
     amended by striking ``or a derivatives transaction execution 
     facility''.
       (o) Section 4(a)(1) of such Act (7 U.S.C. 6(a)(1)) is 
     amended by striking ``or derivatives transaction execution 
     facility'' each place it appears.
       (p) Section 4(c)(1) of such Act (7 U.S.C. 6(c)(1)) is 
     amended--
       (1) by striking ``or registered'' after ``designated''; and
       (2) by striking ``or derivatives transaction execution 
     facility''.
       (q) Section 4a(a)(1) of such Act (7 U.S.C. 6a(a)(1)) is 
     amended--
       (1) by striking ``or derivatives transaction execution 
     facilities''; and
       (2) by striking ``or derivatives transaction execution 
     facility''.
       (r) Section 4a(e) of such Act (7 U.S.C. 6a(e)) is amended--
       (1) by striking ``, derivatives transaction execution 
     facility,'' each place it appears; and
       (2) by striking ``or derivatives transaction execution 
     facility''.
       (s) Section 4c(e) of such Act (7 U.S.C. 6c(g)), as so 
     redesignated by section 402(a) of this Act, is amended by 
     striking ``or derivatives transaction execution facility'' 
     each place it appears.
       (t) Section 4d of such Act (7 U.S.C. 6d) is amended by 
     striking ``or derivatives transaction execution facility'' 
     each place it appears.
       (u) Section 4e of such Act (7 U.S.C. 6e) is amended by 
     striking ``or derivatives transaction execution facility''.
       (v) Section 4f(b) of such Act (7 U.S.C. 6f(b)) is amended 
     by striking ``or derivatives transaction execution facility'' 
     each place it appears.
       (w) Section 4i of such Act (7 U.S.C. 6i) is amended by 
     striking ``or derivatives transaction execution facility''.
       (x) Section 4j(a) of such Act (7 U.S.C. 6j(a)) is amended 
     by striking ``and registered derivatives transaction 
     execution facility''.
       (y) Section 4p(a) of such Act (7 U.S.C. 6p(a)) is amended 
     by striking ``, or derivatives transaction execution 
     facilities''.
       (z) Section 4p(b) of such Act (7 U.S.C. 6p(b)) is amended 
     by striking ``derivatives transaction execution facility,''.
       (aa) Section 5c(f) of such Act (7 U.S.C. 7a-2(f)) is 
     amended by striking ``and registered derivatives transaction 
     execution facility''.
       (bb) Section 5c(f)(1) of such Act (7 U.S.C. 7a-2(f)(1)) is 
     amended by striking ``or registered derivatives transaction 
     execution facility''.
       (cc) Section 6 of such Act (7 U.S.C. 8) is amended--
       (1) by striking ``or registered'';
       (2) by striking ``or derivatives transaction execution 
     facility'' each place it appears; and
       (3) by striking ``or registration'' each place it appears.
       (dd) Section 6a(a) of such Act (7 U.S.C. 10a(a)) is 
     amended--
       (1) by striking ``or registered'';
       (2) by striking ``or a derivatives transaction execution 
     facility''; and
       (3) by inserting ``shall'' before ``exclude'' the first 
     place it appears.
       (ee) Section 6a(b) of such Act (7 U.S.C. 10a(b)) is 
     amended--
       (1) by striking ``or registered''; and
       (2) by striking ``or a derivatives transaction execution 
     facility''.
       (ff) Section 6d(1) of such Act (7 U.S.C. 13a-2(1)) is 
     amended by striking ``derivatives transaction execution 
     facility,''.

     SEC. 411. ELIMINATION OF OBSOLETE REFERENCES TO EXEMPT BOARDS 
                   OF TRADE.

       (a) Section 1a(19)(A)(x) of the Commodity Exchange Act (7 
     U.S.C. 1a(18)(A)(x)), as so redesignated by section 304(b)(1) 
     of this Act, is amended by striking ``or an exempt board of 
     trade''.
       (b) Section 12(e)(1)(B)(i) of such Act (7 U.S.C. 
     16(e)(1)(B)(i)) is amended by striking ``or exempt board of 
     trade''.

     SEC. 412. ELIMINATION OF REPORT DUE IN 1986.

       Section 26 of the Futures Trading Act of 1978 (7 U.S.C. 
     16a) is amended by striking subsection (b) and redesignating 
     subsection (c) as subsection (b).

     SEC. 413. COMPLIANCE REPORT FLEXIBILITY.

       Section 4s(k)(3)(B) of the Commodity Exchange Act (7 U.S.C. 
     6s(k)(3)(B)) is amended to read as follows:
       ``(B) Requirements.--A compliance report under subparagraph 
     (A) shall--
       ``(i) include a certification that, under penalty of law, 
     the compliance report is materially accurate and complete; 
     and
       ``(ii) be furnished at such time as the Commission 
     determines by rule, regulation, or order, to be 
     appropriate.''.

[[Page 809]]



     SEC. 414. MISCELLANEOUS CORRECTIONS.

       (a) Section 1a(13)(A)(i)(II) of the Commodity Exchange Act 
     (7 U.S.C. 1a(12)(A)(i)(II)), as so redesignated by section 
     304(b)(1) of this Act, is amended by adding at the end a 
     semicolon.
       (b) Section 2(a)(1)(C)(ii)(III) of such Act (7 U.S.C. 
     2(a)(1)(C)(ii)(III)) is amended by moving the provision 2 ems 
     to the right.
       (c) Section 2(a)(1)(C)(iii) of such Act (7 U.S.C. 
     2(a)(1)(C)(iii)) is amended by moving the provision 2 ems to 
     the right.
       (d) Section 2(a)(1)(C)(iv) of such Act (7 U.S.C. 
     2(a)(1)(C)(iv)) is amended by striking ``under or'' and 
     inserting ``under''.
       (e) Section 2(a)(1)(C)(v) of such Act (7 U.S.C. 
     2(a)(1)(C)(v)) is amended by moving the provision 2 ems to 
     the right.
       (f) Section 2(a)(1)(C)(v)(VI) of such Act (7 U.S.C. 
     2(a)(1)(C)(v)(VI)) is amended by striking ``III'' and 
     inserting ``(III)''.
       (g) Section 2(c)(1) of such Act (7 U.S.C. 2(c)(1)) is 
     amended by striking the second comma.
       (h) Section 4(c)(3)(H) of such Act (7 U.S.C. 6(c)(3)(H)) is 
     amended by striking ``state'' and inserting ``State''.
       (i) Section 4c(c) of such Act (7 U.S.C. 6c(c)) is amended 
     to read as follows:
       ``(c) The Commission shall issue regulations to continue to 
     permit the trading of options on contract markets under such 
     terms and conditions that the Commission from time to time 
     may prescribe.''.
       (j) Section 4d(b) of such Act (7 U.S.C. 6d(b)) is amended 
     by striking ``paragraph (2) of this section'' and inserting 
     ``subsection (a)(2)''.
       (k) Section 4f(c)(3)(A) of such Act (7 U.S.C. 6f(c)(3)(A)) 
     is amended by striking the first comma.
       (l) Section 4f(c)(4)(A) of such Act (7 U.S.C. 6f(c)(4)(A)) 
     is amended by striking ``in developing'' and inserting ``In 
     developing''.
       (m) Section 4f(c)(4)(B) of such Act (7 U.S.C. 6f(c)(4)(B)) 
     is amended by striking ``1817(a)'' and inserting 
     ``1817(a))''.
       (n) Section 5 of such Act (7 U.S.C. 7) is amended by 
     redesignating subsections (c) through (e) as subsections (b) 
     through (d), respectively.
       (o) Section 5b of such Act (7 U.S.C. 7a-1) is amended by 
     redesignating subsection (k) as subsection (j).
       (p) Section 5f(b)(1) of such Act (7 U.S.C. 7b-1(b)(1)) is 
     amended by striking ``section 5f'' and inserting ``this 
     section''.
       (q) Section 6(a) of such Act (7 U.S.C. 8(a)) is amended by 
     striking ``the the'' and inserting ``the''.
       (r) Section 8a of such Act (7 U.S.C. 12a) is amended in 
     each of paragraphs (2)(E) and (3)(B) by striking 
     ``Investors'' and inserting ``Investor''.
       (s) Section 9(a)(2) of such Act (7 U.S.C. 13(a)(2)) is 
     amended by striking ``subsection 4c'' and inserting ``section 
     4c''.
       (t) Section 12(b)(4) of such Act (7 U.S.C. 16(b)(4)) is 
     amended by moving the provision 2 ems to the left.
       (u) Section 14(a)(2) of such Act (7 U.S.C. 18(a)(2)) is 
     amended by moving the provision 2 ems to the left.
       (v) Section 17(b)(9)(D) of such Act (7 U.S.C. 21(b)(9)(D)) 
     is amended by striking the semicolon and inserting a period.
       (w) Section 17(b)(10)(C)(ii) of such Act (7 U.S.C. 
     21(b)(10)(C)(ii)) is amended by striking ``and'' at the end.
       (x) Section 17(b)(11) of such Act (7 U.S.C. 21(b)(11)) is 
     amended by striking the period and inserting a semicolon.
       (y) Section 17(b)(12) of such Act (7 U.S.C. 21(b)(12)) is 
     amended--
       (1) by striking ``(A)''; and
       (2) by striking the period and inserting ``; and''.
       (z) Section 17(b)(13) of such Act (7 U.S.C. 21(b)(13)) is 
     amended by striking ``A'' and inserting ``a''.
       (aa) Section 17 of such Act (7 U.S.C. 21), as amended by 
     sections 101 through 103 of this Act, is amended by 
     redesignating subsection (q), as added by section 233(5) of 
     Public Law 97-444, and subsections (s) through (w) as 
     subsections (r) through (x), respectively.
       (bb) Section 22(b)(3) of such Act (7 U.S.C. 25(b)(3)) is 
     amended by striking ``of registered'' and inserting ``of a 
     registered''.
       (cc) Section 22(b)(4) of such Act (7 U.S.C. 25(b)(4)) is 
     amended by inserting a comma after ``entity''.

  The CHAIR. No amendment to that amendment in the nature of a 
substitute shall be in order except those printed in part B of House 
Report 115-3. Each such amendment may be offered only in the order 
printed in the report, by a Member designated in the report, shall be 
considered read, shall be debatable for the time specified in the 
report, equally divided and controlled by the proponent and an 
opponent, shall not be subject to amendment, and shall not be subject 
to a demand for division of the question.


                Amendment No. 1 Offered by Mr. Aderholt

  The CHAIR. It is now in order to consider amendment No. 1 printed in 
part B of House Report 115-3.
  Mr. ADERHOLT. Mr. Chairman, I have an amendment at the desk.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Add at the end of title II the following:

     SEC. 213. ELIMINATION OF CERTAIN LEASING AUTHORITY OF THE 
                   COMMISSION.

       Section 12(b)(3) of the Commodity Exchange Act (7 U.S.C. 
     16(b)(3)) is amended--
       (1) by striking ``including, but not limited to,'' and 
     inserting ``excluding''; and
       (2) by adding at the end the following new sentence: ``In 
     the case of an existing lease contract entered into under 
     this paragraph, the Commission may not extend the lease term, 
     but may agree to any other contract modification that does 
     not result in any additional cost to the Federal 
     Government.''.

  The CHAIR. Pursuant to House Resolution 40, the gentleman from 
Alabama (Mr. Aderholt) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Alabama.
  Mr. ADERHOLT. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, I present to you an amendment, as the chairman of the 
Appropriations Subcommittee for Agriculture, that provides funding 
oversight for the Commodity Futures Trading Commission, known as the 
CFTC.
  This amendment that is before us this afternoon is a simple, yet a 
very necessary solution to issues identified at the CFTC regarding its 
leasing practices by its own inspector general and the Government 
Accountability Office.
  This amendment, Mr. Chairman, would allow the CFTC to manage its 
leases through a third party, such as the General Services 
Administration.
  Up until now, the CFTC has demonstrated they have not responsibly 
managed their own leases, and such missteps have created a number of 
problems for the agency itself. These include poor management and 
oversight of the agency's leasing practices, resulting in millions of 
dollars in excess space and leasing costs.
  The GAO legal division has identified instances of the CFTC violating 
the appropriations law with regard to its leasing payments and 
contracts.
  GAO is further reviewing four additional legal issues that are 
related to the CFTC's leasing contracts, and we expect the issuance of 
opinions in the near future that will justify the need for this very 
amendment that we are talking about this afternoon.
  Let me add that at the CFTC, they are experts at their oversight of 
the commodity and the futures and the swap markets. However, the CFTC 
is not expert in leasing practices, and they should be relieved from 
the burden of doing this as we move forward.
  I would ask my colleagues to support this amendment at the desk.
  I yield back the balance of my time.
  Mr. PETERSON. Mr. Chairman, I rise in opposition to this amendment.
  The CHAIR. The gentleman from Minnesota is recognized for 5 minutes.
  Mr. PETERSON. Mr. Chairman, I rise in opposition to this amendment.
  According to the CFTC, there is a drafting error in this amendment. I 
don't know exactly what it is, but they claim that there is a drafting 
error.
  They also claim that it prohibits the CFTC from entering into leases 
going forward. They have expressed concern that this prohibition will 
affect their ability to enter into contracts with GSA in emergency 
situations and in order to sublease unused space.
  This is one of the problems that I have with this bill in skipping 
the process of consideration in the Committee on Agriculture. If we 
would have done that, we would have had a chance to go over this and 
figure out exactly what is going on and who is right and who is wrong 
and what the situation is.
  So, according to them, there are problems. We haven't gone through 
regular order, so I reluctantly oppose the amendment.
  I yield back the balance of my time.
  Mr. ADERHOLT. Mr. Chairman, this amendment has been vetted by the 
House Legislative Counsel and the staff at the CFTC.
  The CHAIR. The gentleman from Alabama has yielded back. Does the 
gentleman from Alabama seek unanimous consent to reclaim the balance of 
the time?
  Mr. ADERHOLT. Mr. Chairman, I ask unanimous consent to reclaim my 
time.
  The CHAIR. Is there objection to the request of the gentleman from 
Alabama?

[[Page 810]]

  There was no objection.
  Mr. ADERHOLT. The amendment has been vetted by the House Legislative 
Counsel and the staff at the CFTC. I understand and I can appreciate 
any concerns that the ranking member would have.
  Let me say, as we move forward, we will take any of this into account 
as we move forward on this process, any technical changes that are 
necessary before this bill becomes law, and we will be happy to work 
with the ranking member as we move forward with this amendment.

                              {time}  1330

  Mr. PETERSON. Will the gentleman yield?
  Mr. ADERHOLT. I yield to the gentleman from Minnesota.
  Mr. PETERSON. Again, we are being told by the CFTC that this is not 
the case.
  So, again, I don't know who is right or wrong, and I appreciate your 
offer to work with us to get to the bottom of this. Again, this is the 
problem that you have when you don't go through regular order.
  Mr. ADERHOLT. Reclaiming my time, I would just add that, for this 
amendment, we will work with any concerns that they may have and try to 
fix anything that may be, but this is something that needs to be 
addressed, as there are real problems at the CFTC regarding the leasing 
issue.
  I would ask my colleagues to support this amendment.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIR. The question is on the amendment offered by the gentleman 
from Alabama (Mr. Aderholt).
  The amendment was agreed to.


         Amendment No. 2 Offered by Mr. Austin Scott of Georgia

  The CHAIR. It is now in order to consider amendment No. 2 printed in 
part B of House Report 115-3.
  Mr. AUSTIN SCOTT of Georgia. Mr. Chairman, I have an amendment at the 
desk.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       At the end of title II, add the following:

     SEC. 213. REFORM OF THE CUSTOMER PROTECTION FUND.

       Section 23(g) of the Commodity Exchange Act (7 U.S.C. 
     26(g)) is amended--
       (1) in paragraph (2)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``or fiscal year limitation'';
       (B) in subparagraph (A), by striking ``; and'' and 
     inserting ``, without fiscal year limitation;''; and
       (C) in subparagraph (B), by striking ``thereunder.'' and 
     inserting ``, the total amount of which shall not exceed 
     $5,000,000 per fiscal year.'';
       (2) in paragraph (3)(A), by striking ``unless the balance 
     of the Fund at the time the monetary judgment is collected 
     exceeds $100,000,000'' and inserting ``, but only to the 
     extent that the resulting balance of the Fund does not exceed 
     $50,000,000''; and
       (3) by redesignating paragraph (5) as paragraph (6) and 
     inserting after paragraph (4) the following:
       ``(5) Reversion to treasury.--Notwithstanding the preceding 
     provisions of this subsection, to the extent the balance of 
     the Fund exceeds $50,000,000, the excess amount shall be 
     deposited in the Treasury of the United States as 
     miscellaneous receipts.''.

  The CHAIR. Pursuant to House Resolution 40, the gentleman from 
Georgia (Mr. Austin Scott) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Georgia.
  AUSTIN SCOTT of Georgia. Mr. Chairman, I yield myself such time as I 
may consume.
  Mr. Chairman, I rise to offer the Scott amendment to H.R. 238, the 
Commodity End-User Relief Act.
  This commonsense amendment brings much needed reforms and guidance 
for the consumer protection fund at the Commodity Futures Trading 
Commission. The drafters of Dodd-Frank envisioned the consumer 
protection fund to be capped at $100 million. However, through agency 
interpretations, this fund currently has a balance of nearly $250 
million.
  While the fund is certainly well-intended and can be used to pay 
whistleblower awards and fund customer education initiatives, there is 
no limit on the amount of the fund that can be spent on these customer 
education initiatives.
  There is also a very broad definition of what constitutes a customer 
education initiative. For instance, the vast majority of the fund is 
currently being spent on programs like advertising, opening offices in 
cities with little need, and paying for CFTC staff travel.
  This amendment would do two things. First, it would place a hard cap, 
one which administrators can't bypass, on the fund of $50 million. This 
would simply make a commonsense decision to return approximately $200 
million to the Treasury and keep the fund from carrying an excessive 
balance in the future. Should whistleblower payouts exceed $50 million, 
the Treasury would place additional money into the fund.
  The amendment's second reform would limit spending on customer 
education initiatives to $5 million per year. This limit would bring 
discipline to the provision that has been used to spend millions in 
advertising and social media outreach.
  The Congressional Budget Office informally indicates that these 
changes would save more than $40 million and would preserve the 
customer protection fund while making commonsense reforms to protect 
taxpayer resources.
  I encourage adoption of my amendment.
  Mr. Chairman, I yield back the balance of my time.
  Mr. PETERSON. Mr. Chairman, I rise in opposition to the amendment.
  The CHAIR. The gentleman from Minnesota is recognized for 5 minutes.
  Mr. PETERSON. Mr. Chair, as was indicated, this places a $5 million 
limit on expenditures.
  Again, I don't know if it is a drafting error or a difference of 
opinion, but, according to the CFTC, they claim that this amendment 
does things that were not explained and were not, in their opinion, 
made clear in the amendment. I don't know if they are calling it an 
error, or whatever it is, but there is a provision in there that says 
that this fund, once it gets above $100 million, can't go above $50 
million.
  So what this does is it basically limits the amount, once they get an 
amount to go back into the fund to replenish it. Again, I am not 
exactly sure who is right or who is wrong here, but it is another 
example of, I think, something that could have been avoided if this 
would have come through the Agriculture Committee in regular order.
  The CFTC's education initiatives to help consumers protect themselves 
have been successful since this initiative began. The main expense is 
the Web site BrokerCheck. The whistleblower awards have increased 
recently and have been shown to be an effective method of enforcing the 
Commodity Exchange Act.
  So, again, I would ask opposition to the amendment and again make the 
point that, had we gone through the committee process, we could have 
resolved this and probably been on the same page.
  Mr. Chair, I yield back the balance of my time.
  The CHAIR. The gentleman from Minnesota has yielded back.
  The gentleman from Georgia yielded back his time. Does the gentleman 
wish to request unanimous consent to reclaim the balance of his time?
  Mr. AUSTIN SCOTT of Georgia. Yes, Mr. Chair.
  The CHAIR. Without objection, so ordered.
  There was no objection.
  Mr. AUSTIN SCOTT of Georgia. Mr. Chairman, I would point out that 
there is over $200 million in the account. If somebody were going to 
make $200 million subject to the appropriations process, I imagine any 
bureaucrat would object if that was going to happen to their agency.
  But the fact of the matter is, that is one of the ways that we as 
Members of Congress are able to make sure that taxpayer funds are spent 
where we expect them to be spent. This does not in any way, shape, or 
form hinder the ability to pay out to whistleblowers. I firmly believe 
we should be paying whistleblowers.
  If the fund needs additional resources, we have the ability to 
appropriate it, but it would prevent the

[[Page 811]]

agency from maintaining balances well in excess of what was anticipated 
in the Dodd-Frank legislation.
  Mr. Chair, I yield back the balance of my time.
  The CHAIR. The question is on the amendment offered by the gentleman 
from Georgia (Mr. Austin Scott).
  The amendment was agreed to.


                 Amendment No. 3 Offered by Mr. Conaway

  The CHAIR. It is now in order to consider amendment No. 3 printed in 
part B of House Report 115-3.
  Mr. CONAWAY. Mr. Chairman, I have an amendment at the desk.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 32, after line 3, insert the following:
       (L) Section 3a(68)(A)(i) of the Securities Exchange Act of 
     1934 (15 U.S.C. 78c(a)(68)(A)(i)) is amended by striking 
     ``(47)(B)(x)'' and inserting ``(48)(B)(x)''.
       (M) Section 3C(g)(3)(A)(v) of the Securities Exchange Act 
     of 1934 (15 U.S.C. 78c-3(g)(3)(A)(v)) is amended by striking 
     ``1a(10)'' and inserting ``1a(11)''.
       (N) Section 6(g)(5)(B)(i) of the Securities Exchange Act of 
     1934 (15 U.S.C. 78f(g)(5)(B)(i)) is amended--
       (i) in subclause (I), by striking ``1a(18)(B)(ii)'' and 
     inserting ``1a(19)(B)(ii)''; and
       (ii) in subclause (II), by striking ``1a(18)'' and 
     inserting ``1a(19)''.
       (O) Section 15F(h)(5)(A)(i) of the Securities Exchange Act 
     of 1934 (15 U.S.C. 78o-10(h)(5)(A)(i)) is amended by striking 
     ``1a(18)'' and inserting ``1a(19)''.
       Page 50, line 21, strike ``1a(10)(C)'' and insert 
     ``1a(11)(C)''.

  The CHAIR. Pursuant to House Resolution 40, the gentleman from Texas 
(Mr. Conaway) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Texas.
  Mr. CONAWAY. Mr. Chairman, this is a pretty straightforward 
amendment. It proposes certain technical corrections within the bills. 
This would have normally been handled by the Rules Committee without 
need for a particular amendment, but because, as I said yesterday, the 
language of H.R. 238 is the exact language out of last year's June 15 
bill, except for things that we dropped and limiting the appropriations 
to $250 million.
  So, in the spirit of total transparency, I bring this amendment 
forward so the full body can work its will on this technical correction 
that would have normally been fixed by the Rules Committee.
  Mr. PETERSON. Will the gentleman yield?
  Mr. CONAWAY. I yield to the gentleman from Minnesota.
  Mr. PETERSON. Mr. Chair, I support the amendment.
  Mr. CONAWAY. Mr. Chair, I yield back the balance of my time.
  The CHAIR. The question is on the amendment offered by the gentleman 
from Texas (Mr. Conaway).
  The amendment was agreed to.


                 Amendment No. 4 Offered by Mr. Conaway

  The CHAIR. It is now in order to consider amendment No. 4 printed in 
part B of House Report 115-3.
  Mr. CONAWAY. Mr. Chairman, I have an amendment at the desk.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Page 40, line 4, strike ``paragraphs (2) and (5) of 
     subsection (a)'' and insert ``paragraph (1)''.
       Add at the end of title III the following:

     SEC. 318. REQUIREMENTS RELATED TO POSITION LIMITS.

       (a) In General.--Section 4a(a) of the Commodity Exchange 
     Act (7 U.S.C. 6a(a)) is amended--
       (1) by striking paragraphs (2), (3), (5), and (6); and
       (2) by redesignating paragraphs (4) and (7) as paragraphs 
     (2) and (3), respectively.
       (b) Bona Fide Hedging Transaction Definition.--Section 
     4a(c)(2)(A)(i) of such Act (7 U.S.C. 6a(c)(2)(A)(i)) is 
     amended by inserting ``normally'' before ``represents''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this 
     section.

  The CHAIR. Pursuant to House Resolution 40, the gentleman from Texas 
(Mr. Conaway) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Texas.
  Mr. CONAWAY. Mr. Chairman, the amendment I offer today will clarify 
amendments made to the Commodity Exchange Act by Dodd-Frank and require 
the CFTC to actually determine that position limits will, in fact, help 
reduce excessive speculation before they implement those new rules.
  This past fall, my colleagues and I all ran for reelection promising 
to reduce government regulation and eliminate rules that needlessly 
burden the economy. As we consider the CFTC's ongoing work, we should 
look no further than the position limits rulemaking to begin that task.
  Position limits are a tool that have merit and purpose in regulating 
the commodities market. Today, designated contract markets core 
principle V requires every U.S. exchange to impose, as is necessary and 
appropriate, position limits or position accountability levels on the 
contracts they offer.
  Further, there are several agricultural contracts that have long-
established and well understood federally mandated position limits. My 
amendment will not change any of those existing position limits regime.
  Prior to Dodd-Frank, the law was clear: if the Commission wanted to 
impose position limits, it first had to make a determination that such 
limits would diminish, eliminate, or prevent the burdens of excessive 
speculation. Post-Dodd-Frank, the courts have ruled that additions to 
the statute have rendered it ambiguous.
  Chairman Massad and I have disagreed for the past 3 years about how 
to read the statute. So today, my amendment fixes the ambiguity by 
affirmatively requiring the Commission to determine that position 
limits will serve to reduce the burdens of excessive speculation before 
they put them in place.
  It is important that the Commission affirmatively determines the need 
for position limits because limits are an unmistakable burden on market 
participants.
  The current position limits proposal will cost market participants 
substantially in time and money to comply with. Most importantly, it 
fundamentally changes the way hedgers can seek relief from the rules.
  Agricultural producers and processors, power companies, and other 
commercial hedgers may have fewer bona fide hedges. What is more, they 
might get a hedge exemption, only to get a call from Washington telling 
them their hedge is invalid and they must liquidate their position.
  The proposal also imposes new recordkeeping and reporting obligations 
on Futures Commission Merchants, exchanges, and market participants. 
Less well understood, but no less important, is the impact that 
position limits in later months might have on market liquidity.
  Position limits do not have anything to do with the long-term price 
of commodities. The price of oil, no matter how high it climbs or how 
low it falls, is driven by supply and demand.
  Congress itself recognized this when it characterized the burdens of 
excessive speculation as the sudden or unreasonable fluctuations or 
unwarranted changes in the price of a commodity. There is nothing 
sudden about a year's-long run-up or a year's-long decline in commodity 
prices.
  That said, I agree there is a role for position limits to play in the 
management of our commodity markets, especially in managing the 
convergence of prices at the expiration of a contract. But limits are a 
regulatory tool to promote orderly markets, not a silver bullet to 
lower commodity prices for consumers.
  As a tool, they need to be calibrated to the unique characteristics 
and historical patterns of each commodity. We cannot impose them in 
blind faith that more regulation automatically improves markets.
  My amendment is agnostic about the merits of position limits, but it 
is clear about the need for the government to justify its rules that 
restrict economic activity.
  As this Congress sets about reducing regulatory burdens, it is 
important that we start by requiring the CFTC to make a determination 
about the need for further regulations before they act.
  Mr. Chair, I reserve the balance of my time.

[[Page 812]]


  Mr. PETERSON. Mr. Chair, I claim the time in opposition to the 
amendment.
  The CHAIR. The gentleman from Minnesota is recognized for 5 minutes.
  Mr. PETERSON. Mr. Chairman, I yield my time to the gentleman from 
Connecticut (Mr. Courtney), who was one of the original folks who 
brought this forward and one of the original authors, I think, of this 
provision. So I am going to let him carry the day on the opposition to 
this amendment.
  The CHAIR. The gentleman from Connecticut will control the time in 
opposition.
  Mr. COURTNEY. Mr. Chairman, I thank Mr. Peterson and Mr. Conaway, 
with whom I did serve on the Agriculture Committee with for a number of 
years, and I recall well some of the discussion and debate as Chairman 
Gensler appeared before the committee on article 7 of the Dodd-Frank 
Act.
  Although, I didn't author that position, former-Senator Dodd is a 
constituent of mine. So I guess that is close enough to the work that 
was done creating this section.
  Again, let's be very clear about what this amendment does. It is not 
about clarifying anything. It is about stripping from the law article 7 
of Dodd-Frank, which was a congressional mandate to establish position 
limits for speculative trading.
  Again, this was not done in a vacuum. It was done because there has 
been an explosion of speculative trading that is taking place in 
commodities markets. We had testimony in the Congress back in 2010 that 
it had grown from 22 percent to 67 percent speculation on Wall Street. 
Goldman Sachs--when, again, we were dealing with close to $4 a gallon 
for gas--had a report which said that 27 percent of that price was due 
to speculation. So, Congress appropriately instructed CFTC to come back 
with a regulatory plan to limit speculative positions in a reasonable 
way.
  Again, no one quarrels with the fact that end users, whether it is 
farms, ranchers, airlines, or businesses of all sorts, should be able 
to exercise options in market swaps.

                              {time}  1345

  In those instances, these are firms and businesses which actually 
take physical possession and control of the commodity. Again, what 
Goldman Sachs and other analysts had demonstrated is that what has been 
a burgeoning trend is that firms were beginning to take dominant 
position in markets that, again, were not even close or remotely 
involved in the actual production, processing, or use of the 
commodities that were in question.
  So again, CFTC has begun an arduous, painful process of trying to 
craft a rule. In fact, just a few weeks ago, on December 5, the CFTC 
voted unanimously to again move that process along and come up with a 
draft of a balanced, reasonable rule, so it is not a dead-end 
situation.
  As has been reported, what they basically were looking at was a 
fundamental or a basic limit of roughly about 25 percent of a commodity 
could not be controlled by one firm. The end users that I spoke to, as 
this rule has been making its way, actually think that the CFTC is 
being too generous in terms of allowing an individual firm to control 
up to 25 percent of a market. I think a lot of Americans would 
understand that that kind of position really would provide for an 
opportunity to manipulate market prices.
  In fact, there are some end users who think the rule should be very 
simple, that you have to take actual physical possession of the 
commodity in order to be able to hedge a position or engage in a future 
option. Again, the CFTC did not go to that radical extreme. Again, they 
tried to listen to the thousands of comments--Chairman Gensler, 
Chairman Massad--to try to fashion a rule that allowed a healthy market 
but did not allow situations which were occurring during high gas and 
oil prices.
  In Connecticut, we had home heating oil suppliers who were describing 
situations where the price of the heating oil by the time the truck 
left the garage and came back was going up 10, 15 cents just during 
that short period of time for no reason at all. There wasn't like a 
refinery explosion or some incident that was happening overseas. It 
was, again, the movement on Wall Street of people who were profiting 
not from use of the commodity but, in fact, just from the movement on 
the price. That is really what CFTC has been hard at work doing.
  This amendment will basically shut that down. It is not a 
clarification. It basically takes away what was Congress' instruction 
to CFTC.
  Again, I respectfully oppose this amendment. I think we should allow 
the Commission, which is going to have a Republican Chairman in a few 
weeks, to continue to work on this issue and to provide protection for 
the true end users, the people who actually use the commodities, as 
well as consumers. Whether it is those who get their home heating oil 
tank full, their gas tank full, whether it is farmers and ranchers who 
are dealing with things like feed costs, we should have a healthy 
system of making sure that individuals or firms cannot have a dominant 
position in terms of controlling commodities.
  This is not an arcane, esoteric issue for Americans. This affects 
bread-and-butter issues in terms of how much they pay for essential 
goods and commodities for them and their families. I would strongly 
urge the Members to not accept this amendment. I urge a ``no'' vote.
  Mr. Chairman, I yield back the balance of my time.
  Mr. CONAWAY. Mr. Chairman, how much time do I have remaining?
  The CHAIR. The gentleman from Texas has 1\1/2\ minutes remaining.
  Mr. CONAWAY. Mr. Chairman, the CFTC prepared a draft report this past 
year. Quoting from page 142 of that draft, it says the Masters 
Hypothesis, which my colleague--who I do have great respect for--said 
the mere presence of passives distorts the marketplace, that is what 
Masters Hypothesis said. The CFTC found there are no reputable economic 
studies which fully endorse this view of how the commodity futures 
markets work.
  I would like to close with this comment from another study by the 
chief economist: ``Comment letters on either side declaring that the 
matter is settled in their favor among respectable economists is simply 
incorrect. The best economists on both sides of the debate concede that 
there is legitimate debate afoot. This analysis paper documents that 
the academic debate amongst economists about the magnitude, prevalence, 
and pervasiveness of the risk of outsized market positions has 
reputable and legitimate standard-bearers for opposing positions.''
  I agree with that in full. All we are asking the CFTC to do, Mr. 
Chairman, is to do the work to prove that the specific position list 
they want to implement, should they believe one is needed, that they 
would have to go through regular order, their regular order, to make 
that happen. I encourage a ``yes'' vote on the amendment.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIR. The question is on the amendment offered by the gentleman 
from Texas (Mr. Conaway).
  The question was taken; and the Chair announced that the ayes 
appeared to have it.
  Mr. COURTNEY. Mr. Chairman, I demand a recorded vote.
  The CHAIR. Pursuant to clause 6 of rule XVIII, further proceedings on 
the amendment offered by the gentleman from Texas will be postponed.


                  Amendment No. 5 Offered by Mr. Duffy

  The CHAIR. It is now in order to consider amendment No. 5 printed in 
part B of House Report 115-3.
  Mr. DUFFY. Mr. Chairman, I have an amendment at the desk.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Add at the end of title III the following:

     SEC. 318. PROCEDURE FOR OBTAINING CERTAIN INTELLECTUAL 
                   PROPERTY.

       The Commodity Exchange Act (7 U.S.C. 1 et seq.) is amended 
     by inserting after section 4t the following:

     ``SEC. 4U. PROCEDURE FOR OBTAINING CERTAIN INTELLECTUAL 
                   PROPERTY.

       ``The Commission is not authorized to compel persons to 
     produce or furnish algorithmic trading source code or similar 
     intellectual property to the Commission, unless the 
     Commission first issues a subpoena.''.


[[Page 813]]


  The CHAIR. Pursuant to House Resolution 40, the gentleman from 
Wisconsin (Mr. Duffy) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Wisconsin.
  Mr. DUFFY. Mr. Chairman, I appreciate the support of the gentleman 
from Texas and his insight in this amendment. I was a prosecutor in a 
former life, and we care a lot about due process, making sure that the 
government can't take something from a private individual just because 
they want to take it.
  As an American, I know that protecting intellectual property is a 
cornerstone of our free enterprise system. That is why I am concerned 
about the CFTC's rule on automated trading, which takes the 
unprecedented step of requiring a wide array of market participants 
engaged in algorithmic trading to maintain a source code repository and 
make it available for inspection by the CFTC or the Department of 
Justice without a subpoena.
  Now, this is highly sensitive source code. This is intellectual 
property that helps the functionality of our marketplace, and to think 
that this kind of sensitive data can be taken by the Federal Government 
without a subpoena should shock our conscience. There are times when 
the government should get this information; but if they should have it, 
they should be able to use a subpoena and lay out the cause and the 
case for why they need to have it.
  That is not just my only concern. But the CFTC is potentially going 
to be taking this source code from all different market players and 
holding it in a warehouse or a repository, and so we have a concern for 
hacking. It has been a big conversation as of late. But instead of a 
foreign entity hacking in to individual companies, they just have to 
hack the CFTC and they get all the source code. Just think of the 
malicious things that can happen if you have the source code of market 
players, how you can disrupt it, how you can take it down. It is 
absolutely frightening.
  So I think we should have great pause, take a little time to reflect 
on our Constitution, and continue to respect and support due process, 
which means, if the government wants this information, they should have 
a subpoena, lay out their case, and that is the avenue by which they 
get it, not just because they want it.
  Mr. Chairman, I reserve the balance of my time.
  Mr. PETERSON. Mr. Chairman, I claim the time in opposition to the 
amendment.
  The CHAIR. The gentleman from Minnesota is recognized for 5 minutes
  Mr. PETERSON. Mr. Chairman, this amendment addresses a problem that 
the CFTC is already well on its way to resolving in its proposed rule 
on automated trading. It requires that the Commission must vote to 
issue a subpoena to collect source code from high-frequency trading 
firms before the Commission can examine it.
  I support the protections for the source code as intellectual 
property. I know Commissioner--soon to be Chairman, I think--Giancarlo 
has made this a priority, but this amendment I think is poorly drafted. 
Again, I don't want to harp on this too much, but it is something that 
could have been resolved had we had a committee process to do this 
bill.
  One of the questions I have: I don't quite understand why this 
language is in the bill regarding similar intellectual property. The 
people at the CFTC, they don't know what this means, they don't know 
why you put that language in there, and they think it is going to cause 
a lot of problems. So we are trying to get at the source code. I have a 
problem with that. But why is this language in there?
  Would the gentleman be willing to explain to me why that is in there 
and what it means?
  Mr. DUFFY. Will the gentleman yield?
  Mr. PETERSON. I yield to the gentleman from Wisconsin.
  Mr. DUFFY. I appreciate the gentleman for yielding.
  Again, as an American, when the government wants to take very secure 
intellectual property and data, we do have this belief that they should 
be able to get a subpoena to access it. Again, we don't have a 
disagreement that the CFTC, in circumstances, we want them to get 
access to this information.
  Mr. PETERSON. Right.
  Mr. DUFFY. But highly sensitive intellectual property, we think, 
similar data, should require a subpoena.
  Mr. PETERSON. What is that intellectual property that the CFTC might 
go after? They don't know what it is. I don't know what it is. Is there 
some reason?
  The source code is what the issue is, right?
  Mr. DUFFY. If the gentleman would yield, is the gentleman saying that 
if the government just wants highly sensitive and intellectual property 
they should be able to go in and just ask for it and require it to be 
delivered?
  Mr. PETERSON. This isn't the government. It is the CFTC. It is a very 
specific part of the government.
  Mr. DUFFY. But it is the government.
  Mr. PETERSON. Well, right. I don't know what it means. They think it 
is problematic, and I think it is another example of where we would 
have been better off with regular order.
  I oppose the amendment.
  Mr. Chairman, I yield back the balance of my time.
  Mr. DUFFY. Mr. Chairman, I just want to clarify that in the proposed 
rule there is no requirement for a subpoena. That doesn't exist. Now, 
they might have told you that they want to reform that rule, but that 
is not the way the proposed rule stands today. Again, if our government 
wants information from the private sector, we all believe they should 
have a subpoena for it, number one.
  Again, on the concern of hacking, I wrote the Chair of the CFTC and 
asked for additional information about how they can preserve and 
protect this very sensitive information, and, in essence, they said: We 
can protect it because we say we can protect it. That doesn't give me 
great confidence.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIR. The question is on the amendment offered by the gentleman 
from Wisconsin (Mr. Duffy).
  The amendment was agreed to.


                 Amendment No. 6 Offered by Mr. LaMalfa

  The CHAIR. It is now in order to consider amendment No. 6 printed in 
part B of House Report 115-3.
  Mr. LaMALFA. Mr. Chairman, I have an amendment at the desk.
  The CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       At the end of title III, insert the following:

     SEC. ___. DETERMINATION OF PREDOMINANT ENGAGEMENT.

       Section 2(h)(7)(C) of the Commodity Exchange Act (7 U.S.C. 
     2(h)(7)(C)), as amended by section 314 of this Act, is 
     amended by adding at the end the following:
       ``(v) In determining whether a person is predominantly 
     engaged in a business or activity for purposes of clause 
     (i)(VIII), there shall be excluded revenues and assets that 
     are, or result from, any transaction that is entered into 
     solely for purposes of hedging or mitigating commercial risk 
     (as defined by the Commission for purposes of subparagraph 
     (A)(ii)).''.

  The CHAIR. Pursuant to House Resolution 40, the gentleman from 
California (Mr. LaMalfa) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from California.
  Mr. LaMALFA. Mr. Chairman, my amendment is a simple, straightforward 
one, bringing clarity to the law and relief, again, to the end users, 
such as farmers, ranchers, and manufacturers that use swaps to hedge 
commercial risks associated with their business, including volatile 
markets and price fluctuations on a day-to-day basis. This critical 
financial tool allows them to do their jobs and provide products in an 
affordable and accessible manner, keeping consumer costs low.
  Discussing Dodd-Frank, Congress always intended that these end users 
should not have to clear the swaps entered to hedge these commercial 
risks and provide the end-user exemption to that end.

[[Page 814]]

  The Commodity Exchange Act defines as a financial entity a person 
predominantly engaged in certain financial activities. The Fed's 
rulemaking when defining financial activities repeatedly states the 
rule is for the purpose of title I; therefore, bringing it in to title 
VII was something they did not have in mind when issuing their 
definitions of predominantly engaged for financial entities. Therefore, 
financial entities cannot rely on this end-user exception.
  However, because of a catchall in the definition of financial 
entities, end users who engage in successful hedging programs could be 
regarded as financial entities, thereby creating barriers and 
unnecessary restrictions to their business operations. This completely 
turns the concept of being an end user in title VII on its head.
  My amendment today ensures end users will not lose their ability to 
rely on the end-user exception, which is a clearing requirement due 
simply to the position performance of a transaction entered into solely 
to mitigate commercial risk.
  Mr. Chairman, I yield back the balance of my time.
  Mr. PETERSON. Mr. Chairman, I claim the time in opposition.
  The Acting CHAIR (Mr. McClintock). The gentleman from Minnesota is 
recognized for 5 minutes.
  Mr. PETERSON. Mr. Chair, I am not exactly sure why this is needed, 
but I don't have any problem with the amendment.
  I yield back the balance of my time.
  The Acting CHAIR. The question is on the amendment offered by the 
gentleman from California (Mr. LaMalfa).
  The amendment was agreed to.

                              {time}  1400


                  Amendment No. 7 Offered by Mr. Lucas

  The Acting CHAIR. It is now in order to consider amendment No. 7 
printed in part B of House Report 115-3.
  Mr. LUCAS. Mr. Chairman, I have an amendment at the desk.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       At the end of title III, insert the following:

     SEC. ___. TREATMENT OF TRANSACTIONS BETWEEN AFFILIATES.

       Section 1a(48) of the Commodity Exchange Act (7 U.S.C. 
     1a(47)), as so redesignated by section 304(b)(1) of this Act, 
     is amended by adding at the end the following:
       ``(G) Treatment of transactions between affiliates.--
       ``(i) Exemption from swap rules.--An agreement, contract, 
     or transaction described in subparagraphs (A) through (F) 
     shall not be regulated as a swap under this Act if all of the 
     following apply with respect to the agreement, contract, or 
     transaction:

       ``(I) Affiliation.--1 counterparty, directly or indirectly, 
     holds a majority ownership interest in the other 
     counterparty, or a third party, directly or indirectly, holds 
     a majority ownership interest in both counterparties.
       ``(II) Financial statements.--The affiliated counterparty 
     that holds the majority interest in the other counterparty or 
     the third party that, directly or indirectly, holds the 
     majority interests in both affiliated counterparties, reports 
     its financial statements on a consolidated basis under 
     generally accepted accounting principles or International 
     Financial Reporting Standards, or other similar standards, 
     and the financial statements include the financial results of 
     the majority-owned affiliated counterparty or counterparties.

       ``(ii) Reporting requirement.--If at least 1 counterparty 
     to an agreement, contract, or transaction that meets the 
     requirements of clause (i) is a swap dealer or major swap 
     participant, that counterparty shall report the agreement, 
     contract, or transaction pursuant to section 4r, within such 
     time period as the Commission may by rule or regulation 
     prescribe--

       ``(I) to a swap data repository; or
       ``(II) if there is no swap data repository that would 
     accept the agreement, contract or transaction, to the 
     Commission .

       ``(iii) Risk management requirement.--If at least 1 
     counterparty to an agreement, contract, or transaction that 
     meets the requirements of clause (i) is a swap dealer or 
     major swap participant, the agreement, contract, or 
     transaction shall be subject to a centralized risk management 
     program pursuant to section 4s(j) that is reasonably designed 
     to monitor and to manage the risks associated with the 
     agreement, contract, or transaction.
       ``(iv) Variation margin requirement.--Affiliated 
     counterparties to an agreement, contract, or transaction that 
     meets the requirements of clause (i) shall exchange variation 
     margin to the extent prescribed under any rule promulgated by 
     the Commission or any prudential regulator pursuant to 
     section 4s(e).
       ``(v) Anti-evasion requirement.--An agreement, contract, or 
     transaction that meets the requirements of clause (i) shall 
     not be structured to evade the Dodd-Frank Wall Street Reform 
     and Consumer Protection Act in violation of any rule 
     promulgated by the Commission pursuant to section 721(c) of 
     such Act.''.

  The Acting CHAIR. Pursuant to House Resolution 40, the gentleman from 
Oklahoma (Mr. Lucas) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Oklahoma.
  Mr. LUCAS. Mr. Chairman, I yield myself such time as I may consume.
  Mr. Chairman, I rise today in support of the Lucas amendment to H.R. 
238. This amendment works to provide much-needed relief and certainty 
for American companies by clarifying how the internal risk reducing 
transactions amongst the businesses' own affiliates are regulated. Many 
businesses of all types and sizes in our country use derivatives to 
manage the risks they face within their daily operations. 
Interaffiliate swaps are a commonly used and effective internal risk 
management tool these businesses rely upon.
  Unfortunately, derivatives reforms implemented under Dodd-Frank fail 
to distinguish the difference between interaffiliate transactions and 
transactions executed between unaffiliated third parties. Such internal 
transactions ensure firms to centralize their risk management 
activities between affiliate counterparties and do not create 
additional counterparty exposure outside of a corporate group. This 
amendment, therefore, clarifies that interaffiliate swaps are not 
subject to the same regulatory requirements as external, market-facing 
swaps between third parties.
  In addition, this amendment is consistent with the CFTC's attempts to 
provide similar relief through rule exceptions and no-action letters. 
While such actions by the CFTC have provided relief, they do not 
provide a workable, clear, and predictable set of regulations that 
market participants can effectively operate under.
  This amendment will keep in place appropriate regulatory reforms and 
provide much-needed regulatory and legal certainty for U.S. companies. 
Please join me in supporting this needed reform.
  Mr. Chairman, I reserve the balance of my time.
  Ms. MAXINE WATERS of California. Mr. Chairman, I rise in opposition.
  The Acting CHAIR. The gentlewoman is recognized for 5 minutes.
  Ms. MAXINE WATERS of California. Mr. Chairman, I yield myself such 
time as I may consume.
  Mr. Chairman, I rise in opposition to my friend Mr. Lucas' amendment. 
This amendment rejects the bipartisan compromise negotiated over 4 
years to strike the right balance regarding interaffiliate swaps. 
Indeed, Democrats like Ms. Moore and Republicans like Mr. Stivers 
carefully negotiated a way to balance the needs of operating companies 
like airlines and refineries. This amendment, however, would exempt 
swaps between affiliates, including megabanks like Goldman Sachs and 
J.P.Morgan, from the mandatory margin, clearing, trade execution, 
capital, and every other protection under Title VII of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act of 2010.
  While we generally agree that swaps between affiliated corporate 
entities do not pose a systemic threat, we are deeply troubled about 
this desire to undermine all swaps rules and harm our economy.
  During testimony on a similar version of this amendment, the CFTC's 
former chairman, Gary Gensler, stated that such an exemption would 
provide a big loophole around our derivatives rules and that it would 
``blow a hole in Dodd-Frank.''
  Specifically, the amendment exempts affiliate swaps no matter where 
the affiliate resides. So, an affiliate could reside in a foreign 
jurisdiction that lacks any swaps regulation and share its risks with a 
U.S. affiliate, but our regulators would be prohibited from imposing 
any safeguards such as initial

[[Page 815]]

margin or capital requirements. Why would we pass such a self-inflicted 
wound?
  With that, Mr. Chairman, I urge all Members to vote ``no'' on this 
amendment.
  I yield back the balance of my time.
  Mr. LUCAS. Mr. Chairman, I yield myself the remainder of my time 
simply to note to my colleagues the goal of this amendment is to allow 
business entities to efficiently manage their risk. If that risk is 
managed internally where it is no threat to third parties then they 
should have the ability to do it in the most efficient fashion. As I 
noted in my earlier comments, CFTC has provided similar relief through 
rule exceptions and no-action letters. What we are trying to do here is 
clarify this situation.
  As far as one of the previous chairmen of the CFTC, while a very 
enthusiastic regulator, I would note that I and many participants down 
through the years have disagreed with his interpretations on several 
things. But, with that, I have the greatest respect for my colleague 
over there. This is a sincere difference of opinion.
  Mr. Chairman, I yield the remainder of my time to the gentleman from 
Texas (Mr. Conaway) who is the chairman of the full committee.
  Mr. CONAWAY. Mr. Chairman, I support the gentleman's amendment.
  I would point out that at the end of his amendment is an antievasion 
requirement which would allow the CFTC to watch for the kinds of things 
that the gentlewoman from California was worried about in which foreign 
markets might be involved and other things. So there are, structured in 
the Lucas amendment, protections to avoid a crafty, interaffiliate kind 
of circumstance that she was concerned about.
  Mr. LUCAS. Mr. Chairman, I yield back the balance of my time.
  The Acting CHAIR. The question is on the amendment offered by the 
gentleman from Oklahoma (Mr. Lucas).
  The amendment was agreed to.


                Amendment No. 8 Offered by Mrs. Hartzler

  The Acting CHAIR. It is now in order to consider amendment No. 8 
printed in part B of House Report 115-3.
  Mrs. HARTZLER. Mr. Chairman, I have an amendment at the desk.
  The Acting CHAIR. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       At the end of the bill, add the following:

     SEC. ___. DELAY IN FULL IMPLEMENTATION OF THE FINAL RULE ON 
                   OWNERSHIP AND CONTROL REPORTING.

       The Commodity Futures Trading Commission may not enforce 
     non-compliance with the final rule titled ``Ownership and 
     Control Reports, Forms 102/2S, 40/40S, and 71'' (78 FR 69178; 
     November 18, 2013) until the Commission votes to approve a 
     final rule that has been amended to--
       (1) provide that the reportable trading volume level shall 
     be at least 300 contracts;
       (2) provide that the reporting entity shall not be required 
     to provide natural person controller data; and
       (3) provide that the reporting entity is not obligated to 
     supply data that violates foreign privacy laws.

  The Acting CHAIR. Pursuant to House Resolution 40, the gentlewoman 
from Missouri (Mrs. Hartzler) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentlewoman from Missouri.
  Mrs. HARTZLER. Mr. Chairman, I rise today to offer an amendment to 
bring certainty to farmers, agricultural cooperatives, and grain 
elevators across Missouri and the country that are having problems 
complying with burdensome reporting requirements at the CFTC. Dodd-
Frank never intended to regulate end users like independent grain 
elevators who work on behalf of Missouri farmers to help manage their 
price risk. My amendment works to correct this oversight and provide a 
stable environment for all players in the industry.
  My amendment is simple. It would require the Commission to address 
three outstanding concerns to the Ownership and Control Reports rule, 
better known as the OCR rule, before the Commission can begin 
enforcement, which, by the way, the CFTC is not enforcing presently. 
This industry currently is operating under a no-action relief letter, 
meaning the OCR rule is not being enforced due to the inability of the 
industry to meet the stringent requirements of the CFTC regulations. 
That could change, and the problem needs to be addressed.
  Specifically, my amendment does three things. First, it increases the 
threshold from 50 to 300 contracts per day per commodity for those 
market participants that need to comply with this rule. This will 
exempt low-volume entities like grain elevators and small agricultural 
cooperatives from the reporting requirements for large trading firms 
and major players in these markets. Even with the new threshold 
established by my amendment, the CFTC will still gather ownership and 
control information on the major players and midsized traders.
  Second, my amendment removes a small but very burdensome portion of 
the long list of reporting requirements under the final OCR rule. My 
amendment removes the natural person controller requirements which 
require farmer cooperatives and grain elevators to report specifically 
personally identifiable information on individual employees. The CFTC 
has never required such granular information for many of my constituent 
businesses, and such requirements are making Futures Commission 
Merchants much less willing to work with small and medium-sized 
entities in the countryside. Even with the small changes made by my 
amendment, the CFTC will still be properly equipped to track ownership 
and account control data across the market.
  Finally, this amendment will require the CFTC to ensure that current 
regulations do not conflict with current foreign privacy laws. Having a 
large, open, liquid market is important to managing risk, and operating 
on an international basis is a valuable aspect of a commodity market. 
The CFTC should be responsible for dealing with other governments on 
privacy concerns. It is inappropriate to push that burden onto the 
firms and customers that it regulates.
  This amendment is supported by a wide range of industry and farmers 
groups, and I encourage my colleagues to support my amendment to 
provide relief from the regulatory burdens of this rule on small 
cooperatives, grain elevators, and farmers who are merely hedging their 
legitimate market risk and serving their customers' interests.
  Mr. Chairman, I reserve the balance of my time.
  Mr. PETERSON. Mr. Chairman, I rise in opposition.
  The Acting CHAIR. The gentleman from Minnesota is recognized for 5 
minutes.
  Mr. PETERSON. Mr. Chairman, this amendment contains several troubling 
drafting--some people call them--errors or, I guess, questions. It 
prevents the CFTC from enforcing noncompliance with the final rule that 
includes more forms than were targeted.
  When we did our part of the Dodd-Frank bill, one of the things that I 
thought was really not controversial was that we were going to try to 
find out, once and for all, who owned all of these swaps; who was on 
what side of positions. This is what caused the problem in the first 
place with the financial meltdown. When Lehman Brothers went down and 
we allowed them to go broke, it created this big panic, AIG didn't know 
if they could cover their swaps or not, and it was going to unravel the 
whole situation because these firms that were trading didn't know who 
held what and what was going on. That was the underlying problem. So 
what we were trying to do is get some understanding of where everybody 
was in this market. When we were doing the bill, we made it very clear, 
and I put in the legislation, that end users were not covered. That 
shouldn't have been an issue.
  The problem with this amendment is it looks like it is going to 
include more than just that. So, I guess, again, this is a final 
example in this bill of a process moving too quickly and a lack of 
regular order.
  Finally, it contains a section on foreign privacy laws that could 
result in the agencies seeing a reduced scope of market in their 
surveillance activities that may not be the intention. But, again, 
without the chance to consider

[[Page 816]]

this provision in regular order, we are not sure, and concerns that 
some people have remain unaddressed. So this could have been resolved 
during the process. It hasn't been. In its present form, I oppose the 
amendment.
  Mr. Chairman, I yield back the balance of my time.
  Mrs. HARTZLER. Mr. Chairman, I yield myself the remainder of my time.
  Mr. Chairman, I would remind our colleagues that this rule is right 
now under a no-action relief letter because it isn't working, and that 
is what this amendment does is to fix this problem. So I believe this 
amendment is very important. It makes a few commonsense changes to the 
OCR rule that will provide regulatory relief to farmers, agricultural 
cooperatives, and grain elevators while allowing the CFTC to adequately 
regulate the futures industry.
  So, Mr. Chairman, I urge my colleagues to support this amendment.
  I yield back the balance of my time.
  The Acting CHAIR. The question is on the amendment offered by the 
gentlewoman from Missouri (Mrs. Hartzler).
  The amendment was agreed to.
  Mr. CONAWAY. Mr. Chairman, I move that the Committee do now rise.
  The motion was agreed to.
  Accordingly, the Committee rose; and the Speaker pro tempore (Mr. 
Hultgren) having assumed the chair, Mr. McClintock, Acting Chair of the 
Committee of the Whole House on the state of the Union, reported that 
that Committee, having had under consideration the bill (H.R. 238) to 
reauthorize the Commodity Futures Trading Commission, to better protect 
futures customers, to provide end-users with market certainty, to make 
basic reforms to ensure transparency and accountability at the 
Commission, to help farmers, ranchers, and end-users manage risks, to 
help keep consumer costs low, and for other purposes, had come to no 
resolution thereon.

                          ____________________