[House Report 113-679]
[From the U.S. Government Publishing Office]
Union Calendar No. 510
113th Congress, 2d Session - - - - - - - - - - - House Report 113-679
REPORT ON ACTIVITIES
DURING THE 113TH CONGRESS
SECOND SESSION
(DECEMBER 28, 2013 TO JANUARY 2, 2015)
__________
R E P O R T
of the
COMMITTEE ON AGRICULTURE
U.S. HOUSE OF REPRESENTATIVES
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
December 18, 2014.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
______
U.S. GOVERNMENT PUBLISHING OFFICE
49-006 WASHINGTON : 2014
COMMITTEE ON AGRICULTURE
FRANK D. LUCAS, Oklahoma, Chairman
BOB GOODLATTE, Virginia, COLLIN C. PETERSON, Minnesota,
Vice Chairman Ranking Minority Member
STEVE KING, Iowa MIKE McINTYRE, North Carolina
RANDY NEUGEBAUER, Texas DAVID SCOTT, Georgia
MIKE ROGERS, Alabama JIM COSTA, California
K. MICHAEL CONAWAY, Texas TIMOTHY J. WALZ, Minnesota
GLENN THOMPSON, Pennsylvania KURT SCHRADER, Oregon
BOB GIBBS, Ohio MARCIA L. FUDGE, Ohio
AUSTIN SCOTT, Georgia JAMES P. McGOVERN, Massachusetts
SCOTT R. TIPTON, Colorado SUZAN K. DelBENE, Washington
ERIC A. ``RICK'' CRAWFORD, Arkansas GLORIA NEGRETE McLEOD, California
SCOTT DesJARLAIS, Tennessee FILEMON VELA, Texas
CHRISTOPHER P. GIBSON, New York MICHELLE LUJAN GRISHAM, New Mexico
VICKY HARTZLER, Missouri ANN M. KUSTER, New Hampshire
REID J. RIBBLE, Wisconsin RICHARD M. NOLAN, Minnesota
KRISTI L. NOEM, South Dakota PETE P. GALLEGO, Texas
DAN BENISHEK, Michigan WILLIAM L. ENYART, Illinois
JEFF DENHAM, California JUAN VARGAS, California
STEPHEN LEE FINCHER, Tennessee CHERI BUSTOS, Illinois
DOUG LaMALFA, California SEAN PATRICK MALONEY, New York
RICHARD HUDSON, North Carolina JOE COURTNEY, Connecticut
RODNEY DAVIS, Illinois JOHN GARAMENDI, California
CHRIS COLLINS, New York
TED S. YOHO, Florida
VANCE M. McALLISTER, Louisiana
------
Nicole Scott, Staff Director
Kevin J. Kramp, Chief Counsel
Tamara Hinton, Communications Director
Robert L. Larew, Minority Staff Director
LETTER OF SUBMITTAL
----------
House of Representatives,
Committee on Agriculture,
Washington, D.C., December 18, 2014.
Hon. Karen L. Hass,
Clerk of the House of Representatives,
Washington, D.C.
Dear Ms. Hass: Pursuant to rule XI, clause 1(d), of the
Rules of the House of Representatives, I herewith submit to the
House a report of the activities of the Committee on
Agriculture during the first session of the 113th Congress.
With best wishes, I am
Sincerely,
Hon. Frank D. Lucas,
Chairman.
C O N T E N T S
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Page
I. Summary of Organization, Jurisdiction, and Oversight Plan of
the Committee on Agriculture................................... 1
A. Organization.............................................. 1
B. Committee Jurisdiction.................................... 3
C. Oversight Plan............................................ 7
II. Committee Activities During the 113th Congress............... 18
A. Main Legislative Activities............................... 18
B. Statistical Summary of Activities......................... 25
C. Digest of Bills Within the Jurisdiction of the Committee
on Which Action Has Been Taken............................. 25
1. Bills Enacted into Law................................ 25
2. Bills Acted on by the House But Not the Senate........ 53
3. House Resolutions Considered in the House............. 68
4. Bills Reported by the Committee on Agriculture But Not
Considered............................................. 68
5. Bills Reported by Other Committees Within the
Committee on Agriculture's Jurisdiction But Not
Considered............................................. 68
6. Bills Ordered Reported by the Committee on Agriculture 72
7. Bills Ordered Reported But Not Reported by Other
Committees Within the Committee on Agriculture's
Jurisdiction........................................... 73
8. Bills Defeated........................................ 73
9. Bills Acted on by the Committee Included in the Other
Laws Enacted........................................... 91
10. Bills Vetoed......................................... 91
11. Bills Acted on by Both Houses But Not Enacted........ 91
12. Concurrent Resolutions Approved...................... 92
D. Oversight................................................. 94
1. Oversight Hearings.................................... 95
2. Legislative Hearings.................................. 100
E. Printed Hearings.......................................... 101
F. Meetings Not Printed...................................... 102
G. Committee Prints.......................................... 103
H. Watersheds................................................ 103
III. Appendix.................................................... 103
A. Executive Communications.................................. 103
B. Statutory and Special Reports............................. 135
C. Memorials................................................. 153
D. Petitions................................................. 154
Union Calendar No. 510
113th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 113-679
======================================================================
REPORT OF THE COMMITTEE ON AGRICULTURE ON ACTIVITIES DURING THE 113TH
CONGRESS
_______
December 18, 2014.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Lucas, from the Committee on Agriculture,
submitted the following
R E P O R T
In accordance with rule XI, clause 1(d), of the Rules of
the House of Representatives, the Committee on Agriculture
reports herewith on its activities during the 113th Congress.
I. Summary of Organization, Jurisdiction, and Oversight Plan of the
Committee on Agriculture
a. organization
The House of Representatives established the total
authorized membership of the Committee on Agriculture for the
113th Congress at 46, with a party division of 25 Republicans
and 21 Democrats. Among the committee members were 14
Representatives who were serving their first terms (LaMalfa,
Hudson, Rodney Davis of IL, Collins of NY, Yoho, Negrete
McLeod, Vela, Lujan Grisham, Kuster, Gallego, Enyart, Vargas,
Bustos, and Maloney).
The Committee organized on January 23, 2013, into five
subcommittees, four of which were assigned jurisdiction over
major agricultural commodities and one that dealt with various
related agricultural operations. The five subcommittees were
constituted as follows:
SUBCOMMITTEE ASSIGNMENTS
(Ratio includes ex officio Members.)
(Frank D. Lucas, Chairman, and Collin C. Peterson, Ranking
Minority Member, are ex officio Members of all Subcommittees.)
The Committee organized on January 25, 2011, into six
subcommittees, five of which were assigned jurisdiction over
major agricultural commodities and one that dealt with various
related agricultural operations. The six subcommittees were
constituted as follows:
Subcommittee on Conservation, Energy, and Forestry
(Ratio 10-8 (Total 18))
GLENN THOMPSON, Pennsylvania,
Chairman
TIMOTHY J. WALZ, Minnesota, Ranking Minority Memberlabama
GLORIA NEGRETE McLEOD, California BOB GIBBS, Ohio
ANN M. KUSTER, New Hampshire SCOTT R. TIPTON, Colorado
RICHARD M. NOLAN, Minnesota ERIC A. ``RICK'' CRAWFORD,
MIKE McINTYRE, North Carolina Arkansas
KURT SCHRADER, Oregon MARTHA ROBY, AlabamaB
SUZAN K. DelBENE, Washington REID J. RIBBLE, Wisconsin
KRISTI L. NOEM, South Dakota
DAN BENISHEK, Michigan
VANCE M. McALLISTER, LouisianaJ
Jurisdiction: Soil, water, and resource conservation, small
watershed program, energy and biobased energy production, rural
electrification, forestry in general and forest reserves other
than those created from the public domain.
------
Subcommittee on General Farm Commodities and Risk Management
(Ratio 16-13 (Total 29))
K. MICHAEL CONAWAY, Texas,
Chairman
DAVID SCOTT, Georgia, Ranking Minority MemberUGEBAUER, Texas
FILEMON VELA, Texas MIKE ROGERS, Alabama
PETE P. GALLEGO, Texas BOB GIBBS, Ohio
WILLIAM L. ENYART, Illinois AUSTIN SCOTT, Georgia
JUAN VARGAS, California ERIC A. ``RICK'' CRAWFORD,
CHERI BUSTOS, Illinois Arkansas
SEAN PATRICK MALONEY, New York MARTHA ROBY, AlabamaB
TIMOTHY J. WALZ, Minnesota CHRISTOPHER P. GIBSON, New York
GLORIA NEGRETE McLEOD, California VICKY HARTZLER, Missouri
JIM COSTA, California KRISTI L. NOEM, South Dakota
JOHN GARAMENDI, CaliforniaC DAN BENISHEK, Michigan
---- DOUG LaMALFA, California
RICHARD HUDSON, North Carolina
RODNEY DAVIS, Illinois
CHRIS COLLINS, New York
----
Jurisdiction: Program and markets related to cotton,
cottonseed, wheat, feed grains, soybeans, oilseeds, rice, dry
beans, peas, lentils, the Commodity Credit Corporation, risk
management, including crop insurance, commodity exchanges, and
specialty crops.
------
Subcommittee on Horticulture, Research, Biotechnology, and Foreign
Agriculture (Ratio 9-8 (Total 17))
AUSTIN SCOTT, Georgia, Chairman
KURT SCHRADER, Oregon, Ranking Minority MemberTHERLAND II, FloridaD
SUZAN K. DelBENE, Washington VICKY HARTZLER, Missouri
JIM COSTA, California JEFF DENHAM, California
MARCIA L. FUDGE, Ohio STEPHEN LEE FINCHER, TennesseeE
ANN M. KUSTER, New Hampshire DOUG LaMALFA, California
JUAN VARGAS, California RODNEY DAVIS, Illinois
SEAN PATRICK MALONEY, New York CHRIS COLLINS, New York
TED S. YOHO, Florida
Jurisdiction: Fruits and vegetables, honey and bees,
marketing and promotion orders, plant pesticides, quarantine,
adulteration of seeds and insect pests, and organic
agriculture, research, education and extension, biotechnology
and foreign agriculture assistance, and trade promotion
programs, generally.
------
Subcommittee on Livestock, Rural Development, and Credit (Ratio 14-12
(Total 26))
ERIC A. ``RICK'' CRAWFORD,
Arkansas, Chairman
JIM COSTA, California, Ranking Minority MemberTTE, Virginia
MIKE McINTYRE, North Carolina STEVE KING, Iowa
DAVID SCOTT, Georgia RANDY NEUGEBAUER, Texas
FILEMON VELA, Texas MIKE ROGERS, Alabama
MICHELLE LUJAN GRISHAM, New Mexico K. MICHAEL CONAWAY, Texas
PETE P. GALLEGO, Texas GLENN THOMPSON, Pennsylvania
WILLIAM L. ENYART, Illinois SCOTT DesJARLAIS, Tennessee
CHERI BUSTOS, Illinois CHRISTOPHER P. GIBSON, New York
KURT SCHRADER, Oregon REID J. RIBBLE, Wisconsin
RICHARD M. NOLAN, MinnesotaI JEFF DENHAM, California
JOE COURTNEY, ConnecticutI RICHARD HUDSON, North Carolina
TED S. YOHO, Florida
Jurisdiction: Livestock, dairy, poultry, meat, seafood and
seafood products, inspection, marketing, and promotion of such
commodities, aquaculture, animal welfare, and grazing, rural
development, farm security and family farming matters, and
agricultural credit.
------
Subcommittee on Department Operations, Oversight, and Nutrition (Ratio
7-6 (Total 13))
STEVE KING, Iowa, Chairman
MARCIA L. FUDGE, Ohio, Ranking Minority MemberATTE, Virginia
JAMES P. McGOVERN, Massachusetts BOB GIBBS, OHIO
MICHELLE LUJAN GRISHAM, New Mexico AUSTIN SCOTT, Georgia
GLORIA NEGRETE McLEOD, California STEVE SOUTHERLAND II, FloridaD
---- MARTHA ROBY, AlabamaB
STEPHEN LEE FINCHER, TennesseeE
VANCE M. McALLISTER, LouisianaJ
Jurisdiction: Agency oversight, review and analysis,
special investigations, food stamps, nutrition and consumer
programs.
Section Endnotes
BDecember 11, 2013--Resigned from Committee and
Subcommittees.
CFebruary 26, 2013--Appointed to Subcommittee.
DFebruary 26, 2013--Resigned from Committee and
Subcommittees.
EFebruary 26, 2013--Appointed to Committee and
Subcommittees.
IJanuary 28, 2013--Appointed to Subcommittee.
JMarch 13, 2014--Appointed to Subcommittee.
b. committee jurisdiction
Under Rules adopted by the House of Representatives for the
113th Congress, the Committee on Agriculture's (hereinafter
also referred to as Committee) jurisdiction (See Rule X, clause
1 of the Rules of the House of Representatives) extended to--
(1) Adulteration of seeds, insect pests, and protection of
birds and animals in forest reserves.
(2) Agriculture generally.
(3) Agricultural and industrial chemistry.
(4) Agricultural colleges and experiment stations.
(5) Agricultural economics and research.
(6) Agricultural education extension services.
(7) Agricultural production and marketing and stabilization
of prices of agricultural products, and commodities
(not including distribution outside of the United
States).
(8) Animal industry and diseases of animals.
(9) Commodity exchanges.
(10) Crop insurance and soil conservation.
(11) Dairy industry.
(12) Entomology and plant quarantine.
(13) Extension of farm credit and farm security.
(14) Inspection of livestock, poultry, meat products, and
seafood and seafood products.
(15) Forestry in general, and forest reserves other than
those created from the public domain.
(16) Human nutrition and home economics.
(17) Plant industry, soils, and agricultural engineering.
(18) Rural electrification.
(19) Rural development.
(20) Water conservation related to activities of the
Department of Agriculture.
The revised edition of the Rules and Manual of the House of
Representatives for the 107th Congress (House Document No. 106-
320) provides the following concerning the Committee on
Agriculture:\1\
---------------------------------------------------------------------------
\1\References are to the volume and section of Hinds' (volumes I-V,
e.g., IV, 500) and Cannon's (volumes VI-VIII, e.g., VI, 400) Precedents
of the House of Representatives, and to the Congressional Record by
date and page (e.g., January 3, 1953, p. 500).
``This Committee was established in 1820 (IV, 4149).
In 1880 the subject of forestry was added to its
jurisdiction, and the Committee was conferred authority
to receive estimates of and to report appropriations
(IV, 4149). However, on July 1, 1920, authority to
report appropriations for the U.S. Department of
Agriculture was transferred to the Committee on
Appropriations (VII, 1860).
The basic form of the present jurisdictional
statement was made effective January 2, 1947, as a part
of the Legislative Reorganization Act of 1946 (60 Stat.
812). Subparagraph (7) was altered by the 93d Congress,
effective January 3, 1975, to include jurisdiction over
agricultural commodities (including the Commodity
Credit Corporation) while transferring jurisdiction
over foreign distribution and non-domestic production
of commodities to the Committee on International
Relations (H. Res. 988, 93d Cong., Oct[.] 8, 1974, p.
34470). Nevertheless, the Committee has retained a
limited jurisdiction over measures to release CCC
stocks for such foreign distribution (Sept. 14, 1989,
p. 20428). Previously unstated jurisdictions over
commodities exchanges and rural development were
codified effective January 3, 1975.
The 104th Congress consolidated the Committee's
jurisdiction over inspection of livestock and meat
products to include inspection of poultry, seafood, and
seafood products, and added subparagraph (20) relating
to water conservation (sec. 202(a), H. Res. 6, Jan. 4,
1995, p. 464). Clerical and stylistic changes were
effected when the House recodified its rules in the
106th Congress (H. Res. 5. Jan. 6, 1999, p. 47).
The Committee has had jurisdiction of bills for
establishing and regulating the Department of
Agriculture (IV, 4150), for inspection of livestock and
meat products, regulation of animal industry, diseases
of animals (IV, 4154; VII, 1862), adulteration of
seeds, insect pests, protection of birds and animals in
forest reserves (IV, 4157; VII, 1870), the improvement
of the breed of horses, even with the cavalry service
in view (IV, 4158; VII, 1865), and in addition to the
Committee on Energy and Commerce, amending Horse
Protection Act to prevent the shipping, transporting,
moving, delivering, or receiving of horses to be
slaughtered for human consumption (July 13, 2006, p.
5270).
The Committee, having charge of the general subject
of forestry, has reported bills relating to timber, and
forest reserves other than those created from the
public domain (IV, 4160). The Committee on Natural
Resources, and not this committee, has jurisdiction
over a bill to convey land that is part of a National
Forest created from the public domain (March 23, 2004,
p. 1344). It has also exercised jurisdiction of bills
relating to agricultural colleges and experiment
stations (IV, 4152), incorporation of agricultural
societies (IV, 4159), and establishment of a highway
commission (IV, 4153), to discourage fictitious and
gambling transactions in farm products (IV, 4161; VII,
1861), to regulate the transportation, sale and
handling of dogs and cats intended for use in research
and the licensing of animal research facilities (July
29, 1965, p. 18691); and to designate an agricultural
research center (May 14, 1995, p. 11070). The Committee
shares with the Committee on the Judiciary jurisdiction
over a bill comprehensively amending the Immigration
and Nationality Act and including food stamp
eligibility requirements for aliens (Sept. 19, 1995, p.
25533).
The House referred the President's message dealing
with the refinancing of farm-mortgage indebtedness to
the Committee, thus conferring jurisdiction (April 4,
1933, p. 1209).
The Committee has jurisdiction over a bill relating
solely to executive level position in the Department of
Agriculture (Mar. 2, 1976, p. 4958) and has
jurisdiction over bills to develop land and water
conservation programs on private and non-Federal lands
(June 7, 1976, p. 16768).''
Some of the specific areas in which the Committee on
Agriculture exercises its jurisdiction or that have been
created for the Committee by historical reference include:
(1) Public Law 480, Eighty-third Congress, the restoration,
expansion, and development of foreign markets for
United States agricultural products; and the effect of
the General Agreement on Tariffs and Trade (and the
North American Free Trade Agreement), bilateral free
trade agreements, the European Community, and other
regional economic agreements and commodity marketing
and pricing systems on United States agriculture.
(2) All matters relating to the establishment and
development of an effective Foreign Agricultural
Service.
(3) Matters relating to rural development, including rural
telephone companies, farm credit banks, farm rural
housing loans, rural water supply, rural flood control
and water pollution control programs, and loans for
rural firehouses, community facilities, and businesses.
(4) Production and use of energy from agricultural and
forestry resources.
(5) Matters relating to the development, use, and
administration of the National Forests, including, but
not limited to, development of a sound program for
general public use of the National Forests consistent
with watershed protection and sustained-yield timber
management, study of the forest fire prevention and
control policies and activities of the Forest Service
and their relation to coordinated activities of other
Federal, State, and private agencies; Forest Service
land exchanges; and wilderness and similar use
designations applied to National Forest land.
(6) Price spreads of agricultural commodities between
producers and consumers.
(7) The formulation and development of improved programs
for agricultural commodities; matters relating to the
inspection, grading, and marketing of such commodities,
including seafood; and food safety generally.
(8) Matters relating to trading in futures contracts for
all commodities and similar instruments, including
commodity options and commodity leverage contracts.
(9) The administration and operation of agricultural
programs through State and county committees and the
administrative policies and procedures relating to the
selection, election, and operation of such committees.
(10) The administration and development of small watershed
programs under Public Law 566, Eighty-third Congress,
as amended, and the development of resource
conservation and development programs for rural areas.
(11) Programs of food assistance or distribution supported
in whole or in part by funds of the Department of
Agriculture, including but not limited to the food
stamp program and the commodity distribution program.
(12) Aquaculture programs of the Department of Agriculture.
(13) Sugar legislation, including import control programs
that stabilize domestic prices.
(14) All matters relating to pesticides, the Federal
Insecticide, Fungicide, and Rodenticide Act, as
amended, the Federal Environmental Pesticide Control
Act of 1972, the Federal Insecticide, Fungicide, and
Rodenticide Act Amendments of 1988, and the Food
Quality Protection Act of 1996, including, but not
limited to, the registration, marketing, and safe use
of pesticides, groundwater contamination, and the
coordination of the pesticide program under FIFRA with
food safety programs.
(15) Agricultural research programs, including, but not
limited to, the authorization of specific research
projects and agricultural biotechnology development
efforts.
(16) All matters relating to the Commodity Credit
Corporation Charter Act.
(17) Legislation relating to the control of the entry into
the United States of temporary, nonresident aliens for
employment in agricultural production.
(18) Legislation relating to the general operations and the
Organic Act of the Department of Agriculture, the
Commodity Credit Corporation, Federal Crop Insurance
Corporation, Farm Credit Administration, Farm Credit
System, Federal Agricultural Mortgage Corporation, and
Commodity Futures Trading Commission.
(19) Producer-funded research, promotion, and consumer and
industry information programs for agricultural
commodities.
(20) Legislation regarding reclamation water projects where
the pricing of water delivered by such projects is
affected by whether the water will be used in the
production of a crop for which an acreage reduction
program is in effect.
(21) Legislation regarding reclamation water projects for
which the Secretary of Agriculture is required to make
a determination regarding commodity availability prior
to the determination of the price to be charged for the
delivery of such project water.
(22) Legislation establishing the level of fees charged by
the Federal Government for the grazing of livestock on
Federal lands.
(23) Legislation governing the Federal regulation of
transactions involving swaps contracts, hybrid
financial instruments, and derivative securities and
financial products.
(24) Legislation regarding the Federal Reserve Board with
respect to its authority to regulate the establishment
of appropriate levels of margin on stock index futures
contracts.
The Committee also reviews and studies, on a continuing
basis, the current and prospective application, administration,
execution, and effectiveness of those laws, or parts of laws,
the subject matter of which is within the jurisdiction of the
Committee, and the organization and operation of the Federal
agencies and entities having responsibilities in or for the
administration and execution thereof. In addition, the
Committee, along with other standing Committees of the House,
has the function of reviewing and studying on a continuing
basis the effect or probable effect of tax and other fiscal and
monetary policies affecting subjects within their jurisdiction.
c. oversight plan
The Committee on Agriculture met on February 13, 2013 to
also fulfill the General Oversight Responsibility reporting
requirements of Rule X 2(d)(1) of the Rules of the House of
Representatives.
The following outline was prepared in consultation with the
Ranking Minority Member and approved by the Full Committee
which was forwarded to the Committee on Oversight and
Government Reform and the Committee on House Administration on
February 13, 2013:
Oversight Plan House Committee on Agriculture 113TH Congress
The committee expects to exercise appropriate oversight
activity with regard to the following issues:
2008 Farm Bill and Current Agricultural Conditions
Review the current state of the U.S. farm economy;
Review the U.S. Department of Agriculture's (USDA)
implementation of the Food, Conservation, and Energy
Act of 2008 (FCEA) as extended;
Review policy proposals regarding farm bill
development;
Review programs that may be inefficient,
duplicative, outdated or more appropriately
administered by State or local governments for possible
cuts or elimination;
Review programs for waste, fraud and abuse;
Review USDA's initial and subsequent implementation
of FCEA payment limit and adjusted gross income
provisions;
Review the state of credit conditions and
availability in rural America;
Review the impact of weather conditions on crop
production;
Review USDA's activities regarding implementation of
the U.S. Warehouse Act;
Review USDA's implementation of actively-engaged
rules;
Review of market situation, including impact of crop
reports and projections;
Review USDA's implementation of the U.S. Grain
Standards Act;
Review USDA's implementation of the Fair and
Equitable Tobacco Reform Act of 2004;
Review the impact of the potential sequestration
order on programs and activities authorized by the
Agriculture Committee;
Review how Administrative Pay-Go is affecting
Department actions; and
Review discretionary actions by USDA that are not
directly authorized by legislation.
Energy
Assess energy programs authorized by FCEA;
Review administration of the Biomass Crop Assistance
Program (BCAP);
Review activities funded by the Biomass Research and
Development Act (BRDA) and input from the external BRDA
Advisory Board;
Review availability of agriculture and forestry
feedstocks for renewable energy production;
Review current status of research on energy crops
and feedstocks;
Review RUS electric loan program;
Review electricity reliability in rural America;
Review current provisions in existing law that
support agriculture-based energy production and use;
Review the implementation of the Renewable Fuels
Standard (RFS);
Review programs that may be inefficient,
duplicative, outdated or more appropriately
administered by State or local governments for possible
cuts or elimination;
Review renewable fuel programs and their impact on
agriculture; and
Review USDA's energy infrastructure initiative.
Conservation and the Environment
Review the impact of regulatory activities by the
EPA and its effect on agriculture productivity;
Review the impact of regulatory activities carried
out pursuant to the Endangered Species Act (ESA), or
any proposed legislative changes to such Act, on
agricultural producers;
Review the impact of the Administration's regulatory
activity relative to methyl bromide on production of
agriculture in the U.S.;
Review any proposed legislation to implement the
Stockholm Convention on Persistent Organic Pollutants,
the Protocol on Persistent Organic Pollutants to the
Convention on Long-Range Transboundary Air Pollution,
and the Rotterdam Convention on the Prior Informed
Consent Procedure for Certain Hazardous Chemicals and
Pesticides in International Trade;
Review the International Treaty on Plant Genetic
Resources for Food and Agriculture;
Review budget and program activities of the NRCS;
Review implementation of all of USDA's conservation
programs;
Review NRCS's efforts to streamline program delivery
and field operations;
Review conservation streamlining initiatives to
eliminate duplicative and overlapping programs;
Review programs that may be inefficient,
duplicative, outdated or more appropriately
administered by State or local governments for possible
cuts or elimination;
Review EPA's jurisdiction under the Clean Water Act
(CWA) and its impact to U.S. agriculture;
Review of potential impacts of EPA's Clean Air Act
(CAA) regulatory program on U.S. agriculture;
Review ongoing discussions and potential
consequences for American agriculture under the United
Nations Climate Change Conference;
Review EPA's implementation of the Food Quality
Protection Act (FQPA), FIFRA and Pesticide Registration
Improvement Renewal Act (PRIA 3);
Review the impact of litigation and rulemaking
concerning FIFRA, ESA, CAA, CWA, the Comprehensive
Environmental Response, Compensation and Liability Act
(CERCLA) and the Emergency Planning and Community Right
to Know Act (EPCRA) and for impacts agricultural
operations;
Review the EPA's regulatory actions in regard to
pesticide evaluations;
Review EPA's regulation of Animal Feeding
Operations;
Review the non-emergency haying and grazing
provisions of the Conservation Reserve Program (CRP);
and
Review Total Maximum Daily Load strategies and
impacts on production agriculture.
Federal Crop Insurance and Risk Management
Review USDA's implementation of crop insurance
provisions of the FCEA;
Review the role and effectiveness of Federal Crop
Insurance;
Review USDA's and the Risk Management Agency's (RMA)
administration and oversight of Federal Crop Insurance;
Review the availability of crop insurance as a risk
management tool;
Review of the adequacy and availability of risk
management tools for the livestock and dairy
industries;
Review programs that may be inefficient,
duplicative, outdated or more appropriately
administered by State or local governments for possible
cuts or elimination;
Review USDA's activities designed to find and reduce
crop insurance waste, fraud, and abuse;
Review USDA's crop insurance rating methodology and
management of the Standard Reinsurance Agreement (SRA)
process;
Review RMA's combination of revenue protection crop
insurance products; and
Review RMA's progress in approving crop insurance
products for under-served commodities.
Implementation of Title VII of Dodd-Frank Wall Street Reform and
Consumer Protection Act
In its review of rulemakings required by Title VII
of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (P.L. 111-203) (Dodd-Frank Act), the
Committee will continue to ensure--
(1) The U.S. Commodity Futures Trading Commission (CFTC)
and U.S. Securities and Exchange Commission (SEC)
rulemaking process is transparent and that
meaningful comment is allowed by the public;
(2) An adequate cost-benefit analysis is performed by the
CFTC for each proposed or finalized rule;
(3) The CFTC and SEC properly coordinate with both
domestic and international financial regulators;
(4) Past exemptive relief orders or no action letters
issued by the CFTC and SEC provide the proper
relief for market participants;
(5) Any final or proposed regulations have not harmed or
adversely impacted the U.S. economy or financial
markets, including the impact on jobs and
competitiveness; and
The Committee will examine how Title VII rulemakings
have impacted U.S. market structure;
The Committee will also examine the developing
impact of pending CFTC, SEC, and Prudential Regulator
regulations, such as the imposition of new margin and
capital requirements, and how they affect the ability
of many ``end-users'' to utilize swaps to hedge against
legitimate business risks;
The Committee will examine the level of coordination
between U.S. and international regulators for potential
impacts on U.S. financial institutions compared to
their foreign counterparts; and
The Committee will examine the feasibility of
timetables established by the Dodd-Frank Act in
building the data, technology and connectivity
necessary to meet regulatory objectives.
The U.S. Commodity Futures Trading Commission and Oversight of the
Derivatives Markets
Review the operations of the Commodity Futures
Trading Commission (CFTC);
Review the growing consolidation and
internationalization of futures exchange trading;
Review market machinations for exchange traded
energy and agricultural future products;
Review enforcement and oversight capabilities of the
CFTC both domestically and internationally;
The Committee will continue to examine how the
Commodity Futures Trading Commission (CFTC) and futures
industry as a whole has addressed the MF Global and
PFGBest bankruptcies from both an enforcement and
regulatory reform standpoint to ensure that proper
remedial action is taken to prevent future losses to
segregated funds of customers;
In light of the Commodity Exchange Act statutory
authorization of the CFTC expiring at the end of FY
2013, the Committee will continue to examine all
sectors of the U.S. derivatives and futures markets,
including, but not limited to: exchange or swap
execution facility trading; the roles of dealers,
inter-dealer brokers, data repositories, and
clearinghouses; trade and price reporting; and
proposals aimed at protecting the segregated funds of
futures customers;
The Committee will continue to examine the ongoing
investigation and enforcement action by the CFTC and
other Federal regulators with respect to the
manipulation of the London Interbank Offer Rate
(LIBOR); and
The Committee will review all operations of the
CFTC, including: a continued examination whether the
cost-benefit analysis required by section 15a of the
CEA is adequate with respect to proposed and finalized
rules; the efficiency of internal Commission actions;
and the enforcement and oversight capabilities of the
CFTC both domestically and internationally.
Agriculture Trade and International Food Aid
Review domestic subsidies and protection currently
applied by agricultural product producing countries
around the world;
Review ongoing multilateral, regional, and bilateral
trade negotiations (including WTO accession agreements)
to assess their potential impact on U.S. agriculture;
Review implementation of existing trade agreements
and commitments as well as proposed new trade
agreements and commitments to determine--
(1) whether they are consistent with current U.S. law;
(2) whether they will promote economic development in
rural areas of the U.S.;
(3) their impact or potential impact on current
production of import sensitive agricultural
commodities, and on exports of U.S. agricultural
products;
(4) their impact or potential impact on the overall
competitiveness of the U.S. agricultural sector,
including the production, processing and
distribution of agricultural products; and
(5) whether they provide adequate, enforceable provisions
to minimize non-tariff barriers to U.S. exports.
Monitor existing trade agreements to ensure trading
partners are meeting obligations and enforcing trade
commitments;
Review farm export programs to determine how well
they are promoting the interests of U.S. agriculture
and examine proposals to improve, modify or expand such
programs;
Review U.S. food aid programs to determine their
impact or potential impact on the reduction of world
hunger. In particular, the committee will examine the
potential impact of multilateral trade negotiations on
the effectiveness of U.S. food aid programs;
Review monitoring and evaluation activities carried
out by USDA and USAID; and
Review sanitary and phytosanitary (SPS) barriers and
other technical barriers to U.S. agricultural exports
and examine USDA efforts to eliminate such barriers.
Agricultural Research and Promotion
Review implementation of biosecurity protocols at
USDA Agricultural ResearchService (ARS) laboratories;
Review USDA's implementation of research, education
and extension programs authorized in FCEA;
Review the administration of the ARS research
stations and worksites;
Review USDA's continuing ability to conduct foreign
animal disease research, training and diagnostic
programs at the National Bio and Agro-Defense Facility
following the transfer of the center to the Department
of Homeland Security;
Assess Federal efforts to facilitate research and
development of aquacultural enterprises, specifically
focusing on the activities of the Joint Committee on
Aquaculture;
Review USDA's regulation on organic standards;
Review USDA's collection of organic production and
market data;
Review administration of National Institute of Food
and Agriculture (NIFA);
Review the administration of the Agricultural Food
Research Initiative;
Review efforts to leverage Federal research
investment with state, local, and private sources of
funding;
Review coordination between ARS, Economic Research
Service (ERS), NIFA and action agencies in USDA--such
as NRCS and FSA--in order to prevent duplicative
research;
Review operation of the National Agricultural
Research, Extension, Education, and Economics Advisory
Board;
Review USDA's efforts to expand research and
development of pathogen reduction technologies;
Review the Food and Drug Administration's (FDA)
findings regarding cloned animal products;
Evaluate the current mix of research funding
mechanisms to ensure maximum benefits from these
investments to producers, processors and consumers;
Review administration of USDA's agricultural
marketing and promotion programs;
Review coordination between USDA and DOE on energy
research programs;
Review Congressional appropriation process and
implications on research funding under ARS, ERS, NASS
and NIFA;
Review ARS, ERS, NASS and NIFA national program
priorities;
Oversight of research grant process to coordinate
and prevent overlapping research; and
Review the potential for research and technology
transfer to address the needs of both the biofuels and
livestock industries.
Biotechnology
Review current regulations and research regarding
animal and plant biotechnology;
Review the FDA's regulatory activities regarding
genetically engineered animals;
Assess USDA's efforts to develop and promote
benefits of biotechnology for increasing agricultural
productivity and combating hunger globally;
Review USDA's management and controls over
biotechnology-derived material; and
Review the impact of litigation on USDA's timeliness
in resolving petitions to deregulate products of
biotechnology.
U.S. Forest Service Administration
Review U.S. Forest Service (USFS) strategy for
dealing with wildfire for coming years, including the
impact of hazardous fuels management, forest health
efforts and fire preparedness;
Continue to monitor the effectiveness and efficiency
of the Forest Service fire management program;
Review the impact of fire expenses on other USFS
program delivery;
Assess the USFS strategy for timber harvesting on
Federal lands;
Review impacts of environmental regulations on
National Forest land management;
Review economic impacts of National Forest land
management on rural communities ; and
Review USFS efforts to promote utilization of
National Forest timber for renewable energy purposes.
Dairy
Review options to improve the efficiency and
effectiveness of dairy programs; and
Review efficiency of Federal Milk Marketing Order
System.
Outreach and Civil Rights
Review implementation of Section 14012 of the FCEA;
Review the operations of the Office of Advocacy and
Outreach;
Monitor USDA's outreach efforts to beginning, small
and minority farmers/ranchers;
Review of the operations of the office of the
Assistant Secretary for Civil Rights;
Review USDA's process for settling discrimination
claims and evaluating individual claims submitted
pursuant to such settlements;
Review the delivery of USDA services and outreach
efforts on Indian reservations and tribal lands;
Review implementation of Section 14003 of the FCEA;
Review current status of Agricultural Census and
efforts to reach undercounted farmers and ranchers; and
Review participation of minority farmers in FSA
County/Local Committees as well as outreach to increase
participation in County Committee elections.
USDA General Administration
Review confidentiality of information provided to
USDA by agricultural producers;
Review USDA's implementation of field office
consolidation for the purpose of effectively and
efficiently delivering commodity, conservation, energy
and rural development programs;
Review agency appeals process and granting of
equitable relief as well as operation of the National
Appeals Division;
Review USDA's efforts to modernize its Information
Technology (IT) systems; and
Review the administrative structure of USDA for
effectiveness and additional efficiencies.
Farm Credit, Rural Development, and the Rural Economy
Review Farm Credit Administration's (FCA) regulatory
program and activities regarding the Farm Credit System
(FCS) to assure the its safety and soundness;
Review Farmer Mac activities and programs;
Review FSA's direct and guaranteed loan programs and
graduation efforts;
Review the Rural Electrification Act (REA);
Review the farm economy and access to credit;
Review implementation of rural development policies
and authorities contained in FCEA and the Consolidated
Farm and Rural Development Act;
Review programs that may be inefficient,
duplicative, outdated or more appropriately
administered by State or local governments for possible
cuts or elimination;
Conduct oversight of the USDA's Rural Broadband
Access Loan and Loan Guarantee Program;
Review USDA Rural Development application processes
and internal controls related to both the Farm Bill and
P.L. 111-5 (Recovery Act) Programs;
Review administration of the Rural Microentrepreneur
Assistance Program;
Conduct oversight of the implementation of the
USDA's Telecommunications Programs;
Review the status of the Rural Telephone Bank;
Assess state of rural water systems and
effectiveness of Federal funding to build and upgrade
those systems;
Assess effectiveness of USDA programs targeted
towards rural infrastructure;
Review agriculture lending practices;
Review public-private partnerships in lending
through guaranteed loans;
Review definition of ``rural'' under rural
development programs; and
Review rural development loan programs and default
rates.
USDA Food and Nutrition Programs
Review food and nutrition programs including the
Supplemental Nutrition Assistance Program (SNAP), fruit
and vegetable initiatives, the Emergency Food
Assistance Program (TEFAP), the Food Distribution on
Indian Reservations (FDPIR) and other commodity
distribution programs;
Assess the level of participation by states in SNAP
and examine state options for administering SNAP;
Review participant eligibility criteria for SNAP;
Review the interaction between SNAP and other low-
income assistance programs such as the Temporary
Assistance for Needy Families (TANF) program, the Low-
Income Home Energy Assistance Program (LIHEAP), and
with provisions in the Affordable Care Act;
Review SNAP work requirements and the efficiency and
accountability of the SNAP Employment & Training
program;
Review efforts by USDA and the states to combat
waste, fraud and abuse within nutrition programs;
Review buying patterns of SNAP recipients and
methods for encouraging balanced lifestyles;
Review programs that may be inefficient,
duplicative, outdated or more appropriately
administered by State or local governments for possible
cuts or elimination;
Review efforts by state SNAP administrators to
modernize and streamline their programs;
Review the Community Food Project Program to ensure
cooperative grants are working;
Review the SNAP retailer approval process; and
Review the implementation of changes made to the
SNAP Nutrition Education Program.
Specialty Crops
Review implementation of the Specialty Crop
Competitiveness Act;
Assess operation of the Fruit and Vegetable (FAV)
planting prohibition pilot program;
Review the Specialty Crop Block Grant program to
ensure that the grants awarded are enhancing the
specialty crop industry;
Review farmers market programs;
Review implementation and effectiveness of
cooperative plant health programs, including Plant Pest
and Disease Management and Disaster Prevention and the
Clean Plant Network; and
Review the Specialty Crop Research Initiative.
Food Safety
Review implementation of the FDA Food Safety
Modernization Act;
Review implementation of the recent FDA Egg Safety
Rule;
Review USDA's administration of meat and poultry
inspection laws and the FDA's food inspection
activities to ensure the development of scientifically
sound systems for food safety assurance;
Review USDA's implementation of the catfish
inspection program;
Review USDA's efforts to educate consumers regarding
safe food handling practices and streamline the
assessment and approval of food safety technologies;
Review implementation of new protocols for meat,
poultry, eggs, or seafood safety inspection;
Review USDA's enforcement of the Humane Methods of
Slaughter Act and humane handling regulations; and
Review the mechanisms to establish scientifically
based international food safety standards.
Plant and Animal Health
Review enforcement of the Animal Welfare Act;
Review enforcement of the Animal Welfare Act;
Assess Federal efforts to reduce threats to human,
animal, and plant health due to predatory and invasive
species;
Review efforts of the Animal and Plant Health
Inspection Service (APHIS) to manage wildlife conflicts
in order to protect public health and safety;
Assess USDA's Animal Disease Traceability Plan; and
Review implementation of Sec. 10201--Plant pest and
disease management and disaster prevention.
Livestock Marketing
Assess the effectiveness of the Grain Inspection,
Packers and Stockyards Administration (GIPSA) in
determining market manipulation in the livestock
industry;
Review structural changes in agribusiness and the
potential cost and benefits for agricultural producers;
and
Review the USDA's mandatory livestock price
reporting system.
Homeland and Agricultural Security
Oversight of USDA's preparedness against terrorist
threats to agriculture production;
Review cooperative efforts between the Department of
Homeland Security and USDA to prevent against foreign
animal disease; and
Review agriculture inspection activities under the
Department of Homeland Security.
Miscellaneous
Review the implementation and impact of The American
Recovery and Reinvestment Act of 2009 (ARRA) on USDA
programs;
Review the impact of transportation infrastructure
issues on agriculture and forestry; and
Review USDA's implementation and enforcement of the
country of origin labeling rule including actions taken
by USDA to implement measures necessary to comply with
the recommendations and rulings of the WTO Dispute
Settlement Body on Certain Country of Origin Labeling
Requirement.
Consultation With Other Committees To Reduce Duplication
With Natural Resources Committee on forestry issues,
ESA issues and other public land issues;
With Science, Space, and Technology Committee on
research;
With Ways and Means and Education and the Workforce
Committees on nutrition programs;
With Ways and Means Committee on trade issues;
With Homeland Security Committee on importation of
animal and plant material and on research related to
agroterrorism;
With the Judiciary Committee on immigrant
agricultural labor;
With Energy and Commerce Committee on food safety
and biomass energy programs both existing and new;
With Transportation and Infrastructure Committee on
CWA compliance issues;
With Financial Services Committee on Dodd-Frank Act
issues;
With Foreign Affairs Committee on food aid and trade
issues;
With Small Business Committee on addressing economic
opportunities for rural America; and
With any other committee as appropriate.
II. Committee Activities During the 113th Congress
a. main legislative activities
The Committee on Agriculture reported or otherwise
considered a variety of bills in the 113th Congress covering
many of the diverse areas within its jurisdictional interests.
Some of the major activities of the committee during the
113th Congress included the following:
Agenda for the House Agriculture Committee
The Agriculture Committee approached its business in
an open, transparent manner and maintained the strong
bipartisan tradition of the Committee. One of the main
priorities of the Committee during this Congress was to
provide oversight to the various Federal agencies
through the hearing process.
The Agriculture Committee held 5 full committee
hearings and 7 business meetings during the 113th
Congress. Various subcommittees held 17 hearings during
the 113th Congress
The Committee heard testimony from Administration
officials on 21 occasions, including 16 testimonies
from U.S. Department of Agriculture representatives; 1
from the Farm Credit Administration; 1 from the Federal
Reserve; and 3 from the Commodity Futures Trading
Commission. Additional testimony heard by the Committee
was offered by a state government official, university
researchers, nonprofit organizations, trade groups, and
farmers and ranchers from across the United States and
totaled 74 testimonies all together.
The House Agriculture Committee successfully drafted
and passed out of Committee a bipartisan farm bill that
was the product of nearly three years of deliberation
that was done in public with input from all
perspectives. The farm bill was signed into law and
became P.L. 113-79.
The House Agriculture Committee successfully passed
six bipartisan pieces of legislation aimed at reducing
the negative impacts of Title VII of the Dodd-Frank Act
on market participants and end-users within various
sectors of the economy. In addition, the Committee
passed a bipartisan bill that would require the CFTC to
prospectively quantify the cost and benefits of all
regulations passed by the agency.
The House Agriculture Committee held four hearings
to examine the statutory reauthorization of the CFTC
within the Commodity Exchange Act. The hearings focused
on the CFTC's role and place in overseeing the futures
and swaps markets, current issues facing the
Commission, current issues facing end-users and market
participants, and recent regulatory proposals that were
designed to better protect futures customers from
unexpected market events.
The House Agriculture Committee successfully drafted
and passed out of Committee bipartisan legislation to
reauthorize and improve the operations of the Commodity
Futures Trading Commission, as well as address concerns
relating to protecting customers from another failure
such as MF Global and Peregrine Financial. This
legislation was the product of a multi-year process.
Agricultural Act of 2014
Repealed outdated policies while reforming,
streaming, and consolidating nearly 100 government
programs. These reforms contribute to deficit reduction
of nearly $23 billion dollars.
Eliminates direct payments and limits producers to
risk management tools that offer protection when they
suffer significant losses.
Strengthens crop insurance, a successful public/
private partnership that ensures farmers invest in
their own risk management.
Makes the first reforms to SNAP since the welfare
reforms of 1996.
Closes the ``heat and eat'' loophole that may
increase benefit levels when states provide nominal
LIHEAP assistance.
The Act eliminates the practice of advertising,
promoting, and recruiting for SNAP and restricts
lottery winners and traditional college students.
Establishes a 10 state pilot to empower states to
engage able-bodied adults in mandatory work programs.
The Act eliminates and consolidates 23 duplicative
and overlapping conservation programs into 13.
Authorize and strengthen livestock disaster
assistance during devastating droughts.
Invests in core specialty crop initiatives like the
Specialty Crop Block Grants and Plant Pest and Disease
Management and Prevention Programs.
Maintains our investment in agriculture research
that gives farmers and ranchers the ability to explore
new ways to provide our country with the safest, most
affordable, most reliable food supply in the world.
Customer Protection and End User Relief Act
The bill reauthorizes and improves the operations of
the Commodity Futures Trading Commission, as well as
addresses concerns relating to protecting customers.
Protects farmers and ranchers who use the futures
markets to manage their risk by cementing several new
and existing protections into law.
Strives to enhance the efficiency of Commission
operations.
Provides much needed relief to end-users--those
market participants that account for only 10 percent of
the swaps market and had nothing to do with the 2008
financial crisis yet represent 94 percent of U.S. job
creators--including farmers, ranchers, manufacturers,
and energy firms and utilities.
Legislation Reducing Burdens Associated with the Dodd-Frank Wall Street
Reform and Consumer Protection Act
Business Risk Mitigation and Price Stabilization Act of 2013
The bill clarifies Congressional intent and provides
an explicit exemption from margin requirements for non-
financial end-users that qualify for the clearing
exception, including cooperatives that are provided a
clearing exemption by CFTC regulations.
Over-the-counter (OTC) derivatives enable businesses
across the country to manage the risks associated with
their day-to-day operations.
Consumers, in turn, benefit from companies' prudent
risk management activities through lower volatility in
the prices of day-to-day goods and services such as
food, electricity, and transportation.
For this reason, Congress provided an explicit
exemption from clearing and margin for end-users in
Title VII of the Dodd-Frank Act. These exemptions are
aimed at ensuring end-users do not have to divert
precious working capital to margin requirements,
keeping those dollars at work in the economy.
While the CFTC has upheld Congressional intent in
its margin proposal by exempting non-financial end-
users, the banking regulators have proposed to require
non-financial end-users to post margin when they trade
with swap dealers that are banks, a problem that this
bill addresses.
The Swap Data Repository and Clearinghouse Indemnification Correction
Act of 2013
Swap data repositories serve as electronic
warehouses for data and information regarding swap
transactions. Historically, swap data repositories
(SDRs) have regularly shared information with foreign
regulators.
Under Sections 725, 728 and 763 of the Dodd-Frank
Act, when a foreign regulator requests information from
a U.S. registered SDR or derivatives clearing
organization (DCO), the SDR or DCO is required to
receive a written agreement from the foreign regulator
stating that it will abide by certain confidentiality
requirements and will ``indemnify'' the Commissions for
any expenses arising from litigation relating to the
request for information.
The concept of ``indemnification''--requiring
a party to contractually agree to pay for another
party's possible litigation expenses--is only well
established in U.S. tort law, and does not exist in
practice or in legal concept in foreign legal
jurisdictions.
These indemnification provisions--which were not
included in the financial reform bill passed by the
House of Representatives in December 2009--threaten to
make data sharing arrangements with foreign regulators
unworkable. Foreign regulators will most likely refuse
to indemnify U.S. regulators for litigation expenses in
exchange for access to data.
As a result, foreign regulators may establish
their own data repositories and clearing
organizations to ensure they have access to data
they need to perform their supervisory duties.
This legislation strikes the indemnification
requirements related to both swap data gathered by swap
data repositories (SDRs) and data collected by the
Commission from clearinghouses.
The bill does maintain, however, that before an SDR,
DCO, or the Commission can share information with other
regulators, they have to receive a written agreement
that the regulator will abide by certain
confidentiality agreements.
The Public Power Risk Management Act of 2013
This bipartisan legislation that would allow
producers, utility companies, and other non-financial
entities to continue entering into energy swaps with
government-owned utilities (aka: utility special
entities) without requiring them to register with the
CFTC as a ``swap dealers'' solely because of their
dealings with government-owned utilities.
With a utility special entity there are no
shareholders, so the costs imposed by this CFTC
regulatory decision, born from the Dodd-Frank Act, will
be paid for by everyday consumers and ratepayers of
electric power and natural gas.
As a group, public power utilities deliver
electricity to one in every seven electricity customers
in the United States--over 47 million people--serving
some of the nation's largest cities, such as Los
Angeles, San Antonio, Seattle and Orlando. However, the
vast majority of public power companies serve
communities with populations of 10,000 people or less.
There are over 2,000 municipal, state and locally-
owned, not-for-profit electric utilities throughout the
United States.
This bill maintains the ability of utility special
entities to specifically hedge risk associated with the
generation of electric energy or production of natural
gas, but does not include an exemption for interest
rate, credit, equities, currency asset classes, or
agriculture commodities, other than crude oil or
gasoline fuel commodities used for electric energy
generation.
More importantly, this bill would not provide an
exemption for utility special entities to enter into
financial swaps, such as interest rate swaps related to
the issuance of municipal bonds or public debt (such as
the type of interest rate swaps that contributed to
Jefferson County, Alabama, filing for bankruptcy in
2011, the largest municipal bankruptcy in U.S.
history).
Further, to ensure transparency, the bill still
requires all special entity swap transactions to be
reported to the CFTC.
The bill will place utility special entities on a
level playing field with everyone else in the
marketplace, allowing many of them to keep the same
swap counterparties they have used to manage risk with
for years.
The ``Swaps Regulatory Improvement Act''
Section 716 of the Dodd-Frank Act was inserted
during the Dodd-Frank Conference Committee
deliberations in May and June of 2010 by former Senator
Blanche Lincoln, despite opposition from some Senate
Democrats and many Federal financial regulators. It is
important to note that Section 716 was not included in
the December 2009 House-passed version of the Dodd-
Frank Act.
Federal financial regulators who opposed Section
716's addition to the Dodd-Frank Act included: Current
Federal Reserve Chairman Ben Bernanke, former FDIC
Chairwoman Sheila Bair, former Treasury Secretary Tim
Geithner, and former Federal Reserve Chairman Paul
Volcker.
On its face, Section 716 prevents any financial
institution that trades certain types of swaps from
receiving any type of ``Federal assistance''--including
access to the Federal Reserve discount window, Federal
Deposit Insurance Corporation coverage, or any future
Federal ``bailout'' similar to what Congress approved
in the fall of 2008 during the financial crisis.
Due to this prohibition, Section 716 has the
practical effect of forcing financial institutions from
trading in certain types of swaps, and forces banks to
``push out'' or ``spin off'' their swaps business into
new separately incorporated and capitalized trading
businesses. However, Section 716 does not cover all
swaps trading by a bank. Banks still would not be
required to ``push out'' swaps used for hedging risks
associated with their banking activities, including
interest rate swaps, foreign currency swaps, and credit
default swaps (CDS) on investment grade names that are
centrally cleared.
Since Dodd-Frank became law in July of 2010, no
equivalent provisions have been adopted in any foreign
jurisdictions that are working through their own
derivatives reforms, placing U.S. firms at a
competitive disadvantage with international banks.
Earlier in 2013, U.S. Federal financial regulators
effectively delayed implementation of Section 716 for
both domestic banks and foreign banks doing business in
the United States for up to two years (until July
2015).
This is substantially similar to an amended version
of H.R. 1838 from the 112th Congress that passed by
voice vote out of the House Financial Services
Committee in February of 2012. In March of 2013, the
House Agriculture Committee approved of the legislation
by a vote 31-14. In May of 2013, the House Financial
Services Committee approved of H.R. 992 by a vote of
53-6.
The legislation would prevent financial institutions
from forcing much of the remaining derivatives business
outside of the bank, which is a more heavily regulated
and more highly capitalized entity than a stand-alone
affiliate.
Likewise, forcing the banks to capitalize new
entities without equivalent risk mitigating benefits
will unnecessarily divert capital that could otherwise
be at work in the economy, and could increase risk to
the financial system.
Notably, the bill amends Section 716 to limit the
swap desk push-out requirement so that it does not
apply to equity or commodity swaps. However, it will
continue to apply to structured finance swaps that are
based on an asset-backed security.
Retaining coverage of structured finance swaps
based on asset backed securities is intended to
respond to concerns that the derivatives activities
of AIG (which were based upon mortgage backed
securities) were highly risky and contributed to
the financial crisis.
To Improve Consideration by the Commodity Futures Trading Commission of
the Costs and Benefits of Its Regulations and Orders
The legislation requires the CFTC to meet the same
analytical standards that President Obama mandated
every Executive Agency to meet under Executive Order
13565. The Commission is currently exempt from them
because it is an Independent Agency.
A proper, comprehensive, cost-benefit analysis will
foster more informed dialogue between regulators and
stakeholders, and in turn produce rules and regulations
that better meet the unique needs of derivative market
participants.
The bill provides for analysis and evaluation that
is specific to the derivatives market and the structure
of the CFTC. Further, it is consistent with and
complementary to previous House-passed cost-benefit
legislation.