[House Report 115-792]
[From the U.S. Government Publishing Office]
115th Congress } { Report
2d Session } HOUSE OF REPRESENTATIVES { 115-792
_______________________________________________________________________
FINANCIAL SERVICES AND GENERAL
GOVERNMENT APPROPRIATIONS BILL, 2019
----------
R E P O R T
of the
COMMITTEE ON APPROPRATIONS
together with
DISSENTING VIEWS
[TO ACCOMPANY H.R. 6258]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
June 28, 2018.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
115th Congress } { Report
2d Session } HOUSE OF REPRESENTATIVES { 115-792
_______________________________________________________________________
FINANCIAL SERVICES AND GENERAL
GOVERNMENT APPROPRIATIONS BILL, 2019
__________
R E P O R T
of the
COMMITTEE ON APPROPRATIONS
together with
DISSENTING VIEWS
[TO ACCOMPANY H.R. 6258]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
June 28, 2018.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_________
U.S. GOVERNMENT PUBLISHING OFFICE
30-568 WASHINGTON : 2018
115th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 115-792
======================================================================
FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS BILL, 2019
_______
June 28, 2018.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Graves of Georgia, from the Committee on Appropriations,
submitted the following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 6258]
The Committee on Appropriations submits the following
report in explanation of the accompanying bill making
appropriations for financial services and general government
for the fiscal year ending September 30, 2019.
INDEX TO BILL AND REPORT
_______________________________________________________________________
Page Number
Bill Report
Title I--Department of the Treasury........................ 2
4
Title II--Executive Office of the President and Funds
Appropriated to the President.......................... 33
24
Title III--The Judiciary................................... 47
32
Title IV--District of Columbia............................. 57
37
Title V--Independent Agencies.............................. 68
42
Administrative Conference of the United States............. 68
42
Bureau of Consumer Financial Protection....................
42
Consumer Product Safety Commission......................... 68
43
Election Assistance Commission............................. 70
44
Federal Communications Commission.......................... 70
44
Federal Deposit Insurance Corporation--Office of Inspector
General................................................ 72
47
Federal Election Commission................................ 72
48
Federal Labor Relations Authority.......................... 73
48
Federal Trade Commission................................... 74
49
General Services Administration............................ 75
49
Harry S Truman Scholarship Foundation...................... 88
59
Merit Systems Protection Board............................. 88
59
National Archives and Records Administration............... 89
60
National Credit Union Administration....................... 90
61
Office of Government Ethics................................ 91
62
Office of Personnel Management............................. 91
62
Office of Special Counsel.................................. 95
65
Postal Regulatory Commission............................... 96
65
Privacy and Civil Liberties Oversight Board................ 96
66
Public Buildings Reform Board.............................. 97
66
Securities and Exchange Commission......................... 97
66
Selective Service System................................... 99
68
Small Business Administration.............................. 100
68
United States Postal Service............................... 105
73
United States Tax Court.................................... 106
75
Title VI--General Provisions--This Act..................... 107
75
Title VII--General Provisions--Government-wide:
Departments, Agencies, and Corporations................ 122
78
Title VIII--General Provisions--District of Columbia....... 155
81
Title IX--Financial Reform................................. 168
83
Title X--Email Privacy..................................... 294
83
Title XI--Amateur Radio Parity Act......................... 305
83
Title XII--Additional General Provision--Spending Reduction
Account................................................ 311
83
House of Representatives Reporting Requirements............
83
Dissenting Views...........................................
432
HIGHLIGHTS OF THE BILL
The Financial Services and General Government Subcommittee
has jurisdiction over a diverse group of agencies responsible
for regulating the financial and telecommunications industries;
collecting taxes and providing taxpayer assistance; supporting
the operations of the White House, the Federal Judiciary, and
the District of Columbia; managing Federal buildings; and
overseeing the Federal workforce. The activities of these
agencies impact nearly every American and are integral to the
operations of our government.
The bill provides a total of $23,423,000,000 in
discretionary budget authority for fiscal year 2019 which is
the same as the fiscal year 2018 discretionary allocation. The
bill is $3,164,000 or 12 percent, below the Administration's
request.
TOTAL BUDGET AUTHORITY
($ in millions)
------------------------------------------------------------------------
FY 2018 FY 2019 FY 2019
Enacted Request Recommendation
------------------------------------------------------------------------
Discretionary................. 23,423 26,587 23,423
Mandatory..................... 22,388 22,406 22,406
------------------------------------------------------------------------
OPERATING PLAN AND REPROGRAMMING PROCEDURES
The Committee will continue to evaluate reprogrammings
proposed by agencies. Although reprogrammings may not change
either the total amount available in an account or the purposes
for which the appropriation is legally available, they
represent a significant departure from budget plans presented
to the Committee in an agency's budget justification and
supporting documents, which are the basis of this
appropriations Act. The Committee expects agencies'
reprogramming requests to explain thoroughly the reasons for
the reprogramming and to include an assessment of whether the
reprogramming will affect budget requirements for the
subsequent fiscal year.
Section 608 of this Act requires agencies or entities
funded by the Act to notify the Committee and obtain prior
approval from the Committee for any reprogramming of funds
that: (1) creates a new program; (2) eliminates a program,
project, or activity; (3) increases funds or personnel for any
program, project, or activity for which funds have been denied
or restricted by the Congress; (4) proposes to use funds
directed for a specific activity by either the House or Senate
Committees on Appropriations for a different purpose; (5)
augments existing programs, projects, or activities in excess
of $5,000,000 or 10 percent, whichever is less; (6) reduces
existing programs, projects, or activities by $5,000,000 or 10
percent, whichever is less; or (7) creates or reorganizes
offices, programs, or activities.
Additionally, the Committee expects to be promptly notified
of all reprogramming actions which involve less than the above
mentioned amounts if such actions would have the effect of
significantly changing an agency's funding requirements in
future years, or if programs or projects specifically cited in
the Committee's reports are affected by the reprogramming.
Reprogrammings meeting these criteria must be approved by the
Committee regardless of the amount proposed to be reallocated.
Section 608 also requires agencies to consult with the
Committees on Appropriations prior to any significant
reorganization or restructuring of offices, programs, or
activities. This provision applies regardless of whether the
reorganization or restructuring involves a reprogramming of
funds. Agencies are encouraged to consult with the Committees
early in the process so that any questions or concerns the
Committees may have can be addressed in a timely manner.
Except in emergency situations, reprogramming requests
should be submitted no later than June 28, 2019. Further, the
Committee notes that when a Department or agency submits a
reprogramming or transfer request to the Committees on
Appropriations and does not receive identical responses from
the House and Senate, it is the responsibility of the
Department or agency to reconcile the House and Senate
differences before proceeding and, if reconciliation is not
possible, to consider the request to reprogram funds
unapproved.
Agencies are directed under section 608 to submit operating
plans for the Committee's review within 60 days of the bill's
enactment. Each operating plan should include: (1) a table for
each appropriation with a separate column to display the
President's budget request, adjustments made by Congress,
adjustments due to enacted rescissions, if appropriate, and the
fiscal year enacted level; (2) a delineation in the table for
each appropriation both by object class and program, project,
and activity as detailed in the budget appendix for the
respective appropriation; and (3) an identification of items of
special congressional interest.
CONGRESSIONAL BUDGET JUSTIFICATIONS
Budget justifications are the primary tool used by the
House and Senate Committees on Appropriations to evaluate the
resource requirements and fiscal needs of agencies. The
Committee is aware that the format and presentation of budget
materials is largely left to the agency within presentation
objectives set forth by the Office of Management and Budget
(OMB). In fact, OMB Circular A-11, part 1 specifically
instructs agencies to consult with congressional committees
beforehand. The Committee expects that all agencies funded
under this Act will heed this directive.
The Committee continues the direction that justifications
submitted with the fiscal year 2019 budget request by agencies
funded under this Act contain the customary level of detailed
data and explanatory statements to support the appropriations
requests at the level of detail contained in the funding table
included at the end of this report. Among other items, agencies
shall provide a detailed discussion of proposed new
initiatives, proposed changes in the agency's financial plan
from prior year enactment, detailed data on all programs, and
comprehensive information on any office or agency
restructurings. At a minimum, each agency must also provide
adequate justification for funding and staffing changes for
each individual office and materials that compare programs,
projects, and activities that are proposed for fiscal year 2020
to the fiscal year 2019 enacted levels.
TITLE I--DEPARTMENT OF THE TREASURY
Departmental Offices
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $201,751,000
Budget request, fiscal year 2019...................... 201,751,000
Recommended in the bill............................... 208,751,000
Bill compared with:
Appropriation, fiscal year 2018................... +7,000,000
Budget request, fiscal year 2019.................. +7,000,000
The Departmental Offices' function in the Department of the
Treasury is to support the Secretary of the Treasury in his
capacity as the chief operating executive of the Department and
in his role in determining the tax, economic, and financial
management policies of the Federal Government. The Secretary's
responsibilities funded by the Salaries and Expenses
appropriation include: recommending and implementing domestic
and international economic and tax policy; providing
recommendations regarding fiscal policy; governing the fiscal
operations of the government; managing the public debt;
managing development of financial policy; representing the U.S.
on international monetary, trade and investment issues;
overseeing Treasury Department overseas operations; directing
the administrative operations of the Treasury Department; and
providing executive oversight of the bureaus within the
Treasury Department.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $208,751,000
for Departmental Offices, Salaries and Expenses.
Financial Transactions.--The Committee encourages the
Department of the Treasury to work with Federal bank
regulators, financial institutions, and money service
businesses to ensure that legitimate financial transactions
move freely and globally. The Committee is frustrated that the
Department has failed to report on its efforts to ensure the
appropriate flow of legitimate financial transactions and
directs the Department to submit a report to the Committees on
Appropriations of the House and Senate on this matter not later
than 90 days after enactment of this Act.
Insurance.--Under P.L. 111-203, the Federal Reserve Board
was given authority to oversee certain nonbank holding
companies, including a few bank and savings and loan holding
companies with insurance affiliates, as well as certain SIFIs,
which currently includes one insurance company. P.L. 111-203
also gave the Federal Insurance Office (FIO), within the
Department of the Treasury, the authority to consult with the
States on international issues and represent the U.S., as
appropriate, in the International Association of Insurance
Supervisors (IAIS).
The Committee notes that the State-based system of
insurance regulation has served our nation well for more than
150 years. Any federal regulation of insurance can take final
form only with explicit approval by Congress.
The Committee is concerned about the ongoing discussions
held by the IAIS to develop a global Insurance Capital Standard
(ICS). The Committee believes the U.S. agencies party to those
negotiations must appropriately fulfill their duties to
advocate for the U.S. insurance market and the U.S. system of
insurance regulation. The Committee also notes the importance
of developing a domestic capital standard, pursuant to P.L.
111-203 and P.L. 113-279, that is based on the existing
domestic regulatory structure. The Committee believes it
essential that a domestic standard should be set before any
U.S. agency accedes to any ICS that will or could ultimately be
applied to U.S. insurers. Finally, the Committee reminds those
Federal agencies party to IAIS or Financial Stability Board
(FSB) discussions to not support consolidated group-wide
insurance capital standards for domestically-chartered
internationally active insurance groups that are inconsistent
with current state-based insurance standards, which are
designed solely for the protection of the policyholder.
State-based Insurance.--The U.S. has a strong history of
promoting State-based regulation of the business of insurance.
The Committee remains concerned about preemption of these
effective State-based regulatory models, including those
products that helps consumers manage the risks associated with
owning a motor vehicle. Furthermore, the Committee supports
these products being regulated by State insurance commissioners
and reiterates that they are exempt under the Dodd-Frank Act
from direct oversight by the Consumer Financial Protection
Bureau (CFPB).
Puerto Rico.--Within 90 days of the date of enactment of
this Act, the Department is directed to provide a report to the
Committees on Appropriations of the House and the Senate
describing how the Department has used its authority to provide
technical assistance to Puerto Rico in fiscal year 2018 and how
it plans to use it in fiscal year 2019.
Cybersecurity.--The Committee recognizes the need to
protect the financial services sector and its customers from
the devastating effects of cyberattacks. While both industry
and government have taken significant steps to mitigate this
threat, there is more work to be done. The Committee encourages
continued coordination to develop consistent and workable
cybersecurity safeguards across the financial services sector.
Consistent with this goal, the Committee directs the Office of
Critical Infrastructure Protection and Compliance Policy (OCIP)
to report to the Committees on Appropriations of the House and
the Senate, the Committee on Financial Services of the House,
and the Committee on Banking, Housing, and Urban Affairs of the
Senate within 180 days of enactment of this Act on the status
of this collaboration and ways to improve cybersecurity
controls and safeguards.
Financial Literacy.--The Committee believes financial
literacy is important and that the Department can be helpful to
entities, like universities, state and local educational
agencies, qualified nonprofit agencies, and financial
institutions who may want to establish centers of excellence to
develop and implement effective standards, training and
outreach efforts for financial literacy programs. The Committee
encourages the Department to use the Financial Literacy and
Education Commission to look into the feasibility of a program
to make competitive grants to qualified institutions.
Committee on Foreign Investment in the United States.--The
Committee expects that CFIUS will enhance its process for
monitoring transactions that are not notified to CFIUS to
maintain CFIUS's effectiveness in guarding against transactions
that pose national security risks. Member agencies of the
Committee on Foreign Investment in the United States (CFIUS),
working with Treasury, as chair of CFIUS, should conduct an
assessment to better understand the staffing levels needed by
their agencies to address the current and projected CFIUS
workload.
OFFICE OF TERRORISM AND FINANCIAL INTELLIGENCE
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $141,778,000
Budget request, fiscal year 2019...................... 159,000,000
Recommended in the bill............................... 161,000,000
Bill compared with:
Appropriation, fiscal year 2018................... +19,222,000
Budget request, fiscal year 2019.................. +2,000,000
Economic and trade sanctions issued and enforced by the
Office of Terrorism and Financial Intelligence's (TFI) Office
of Foreign Assets Control (OFAC) protect the financial system
from being polluted with criminal and illicit activities and
counteract national security threats from drug lords,
terrorists, weapons of mass destruction proliferators, and
rogue nations, among others. In addition to the enforcement of
sanctions, TFI also produces vital analysis with regards to
foreign intelligence and counterintelligence across all
elements of the national security community.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $161,000,000
for the Office of Terrorism and Financial Intelligence to carry
out its central role in detecting and defeating security
threats. The Committee expects these additional funds to be
used to strengthen the development and enforcement of sanction
programs.
Iran Sanctions Act.--The Committee directs the Department
of the Treasury to report to Congress on the status of
implementation and enforcement of non-nuclear, bilateral and
multilateral sanctions against Iran and actions taken by the
U.S. and international community to enforce such sanctions.
Sanctions Enforcement in Africa.--Protracted conflicts in
nations such as Sudan, South Sudan, the Central African
Republic, and the Democratic Republic of Congo have led to
sanctions regimes and international arms embargoes to cut off
the money flows that are fueling wars and contributing to
regional destabilization. The Committee is concerned about the
escalation of conflict and failure to abide by diplomatic
agreements in these particular African states, even after
sanctions have been imposed. The Committee supports the use of
funds to enhance regional expertise and capacity for sanctions
investigations, policy development, and enforcement of
sanctions.
Human Rights Sanctions Enforcement.--Government-sanctioned
abuses of human rights around the world have been on the rise
as authoritarianism increases. Multiple frameworks for human
rights abuse sanctions enforcement exist, including the Sergei
Magnitsky Rule of Law Accountability Act, the Global Magnitsky
Human Rights Accountability Act, Countering America's
Adversaries through Sanctions Act, and the Comprehensive Iran
Sanctions Accountability and Divestment Act, among others.
These Congressionally mandated sanctions, along with sanctions
imposed by Executive Order, are an important tool in
discouraging human rights abuses and targeting those who
violate human rights norms. The Committee supports robust
enforcement of human rights abuse related sanctions and intends
for funding to be used to enhance expertise and investigatory
capacity for sanctions investigations, policy development, and
enforcement of sanctions.
CYBERSECURITY ENHANCEMENT ACCOUNT
Appropriation, fiscal year 2018....................... $24,000,000
Budget request, fiscal year 2019...................... 25,208,000
Recommended in the bill............................... 25,208,000
Bill compared with:
Appropriation, fiscal year 2018................... +1,208,000
Budget request, fiscal year 2019.................. - - -
The Cybersecurity Enhancement Account (CEA) is a dedicated
account designed to identify and support Department-wide
investments for critical IT improvements including the systems
identified as High Value Assets.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $25,208,000
for the Cybersecurity Enhancement Account.
The Treasury Chief Information Officer (CIO) is directed to
review and approve each investment under the CEA and report to
the Committees on Appropriations of the House and the Senate
each quarter on the progress of each investment. To ensure the
Treasury CIO retains control over the execution of these funds,
the agreement does not permit transfers of funds from the CEA.
Spend Plans.--The CIO of each Treasury office and bureau
must submit a spend plan for each prospective investment under
this heading to the Treasury Department CIO for review. The
Treasury CIO is directed to review each investment submitted
under the CEA heading to improve oversight of these funds
across the Department; none of the funds under this heading
will be available to fund such an investment without the
approval of the Treasury CIO. The spend plans should include
how the investment will: enhance Department-wide coordination
of cybersecurity efforts and improve the Department's
responsiveness to cybersecurity threats; provide bureau and
agency leadership with greater visibility into cybersecurity
efforts and further encourage information sharing across
bureaus; improve identification of cyber threats and better
protect information systems from attack; provide a platform to
enhance efficient communication, collaboration, and
transparency around the common goal of improving not only the
cybersecurity of the Treasury Department, but also the Nation's
financial sector. The spend plans should detail the type of
cybersecurity enhancement the investment represents, and the
cost, scope, schedule of the investment, and explain how it
complements existing cyber efforts.
DEPARTMENT-WIDE SYSTEMS AND CAPITAL INVESTMENTS PROGRAMS
(INCLUDING TRANSFER OF FUNDS)
Appropriation, fiscal year 2018....................... $4,426,000
Budget request, fiscal year 2019...................... 4,000,000
Recommended in the bill............................... 8,000,000
Bill compared with:
Appropriation, fiscal year 2018................... +3,574,000
Budget request, fiscal year 2019.................. +4,000,000
The 1997 Treasury and General Government Appropriations Act
established this account, which is authorized to be used by or
on behalf of Treasury bureaus at the Secretary's discretion to
modernize business processes and increase efficiency through
technology investments, as well as other activities that
involve more than one Treasury bureau or Treasury's interface
with other Government agencies.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $8,000,000 for
Department-wide Systems and Capital Investments Programs
(DSCIP).
Fund for America's Kids and Grandkids
Appropriation, fiscal year 2018....................... - - -
Budget request, fiscal year 2019...................... - - -
Recommended in the bill............................... $585,000,000
Bill compared with:
Appropriation, fiscal year 2018...................... +585,000,000
Budget request, fiscal year 2019..................... +585,000,000
The Fund for America's Kids and Grandkids is established to
fund activities to further government efficiency, and through
those efficiencies reduce the overall cost to operate
government programs. Funds are not available until the
Secretary of the Treasury certifies in the annual Report of the
United States Government that the Federal government is
operating either at a surplus or zero deficit. The 2017 Report
issued by the Secretary of the Treasury on February 15, 2018,
reported a deficit of approximately $665,700,000,000.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $585,000,000
for the Fund for America's Kids and Grandkids.
OFFICE OF INSPECTOR GENERAL
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $37,044,000
Budget request, fiscal year 2019...................... 36,000,000
Recommended in the bill............................... 37,044,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. +1,044,000
The Office of Inspector General (OIG) provides agency-wide
audit and investigative functions to identify and correct
operational and administrative deficiencies that create
conditions for fraud, waste, and mismanagement. The audit
function provides contract, program, and financial statement
audit services. Contract audits provide professional advice to
agency contracting officials on accounting and financial
matters relative to negotiation, award, administration,
repricing, and settlement of contracts. Program audits review
and evaluate all facets of agency operations. Financial
statement audits assess whether financial statements fairly
present the agency's financial condition and results of
operations, the adequacy of accounting controls, and compliance
with laws and regulations. The investigative function provides
for the detection and investigation of improper and illegal
activities involving programs, personnel, and operations.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $37,044,000
for the OIG. The recommendation fully funds the cost of
overseeing the Department's Resources and Ecosystems
Sustainability, Tourism Opportunities, and Revived Economy of
the Gulf Coast Act (RESTORE Act) activities.
TREASURY INSPECTOR GENERAL FOR TAX ADMINISTRATION
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $169,634,000
Budget request, fiscal year 2019...................... 161,113,000
Recommended in the bill............................... 170,834,000
Bill compared with:
Appropriation, fiscal year 2018................... +1,200,000
Budget request, fiscal year 2019.................. +9,721,000
The Office of Treasury Inspector General for Tax
Administration (TIGTA) conducts audits, investigations, and
evaluations to assess the operations and programs of the IRS
and its related entities, the IRS Oversight Board, and the
Office of Chief Counsel. The purpose of those audits and
investigations is as follows: (1) To promote the economic,
efficient, and effective administration of the Nation's tax
laws and to detect and deter fraud and abuse in IRS programs
and operations; and (2) to recommend actions to resolve fraud
and other serious problems, abuses, and deficiencies in these
programs and operations.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $170,834,000
for TIGTA. The Committee appreciates the many issues that TIGTA
has brought to its attention and provides funding above the
fiscal year request to continue TIGTA's oversight of IRS
activities and use of appropriated funds.
Special Inspector General for the Troubled Asset Relief Program
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $34,000,000
Budget request, fiscal year 2019...................... 17,500,000
Recommended in the bill............................... 28,800,000
Bill compared with:
Appropriation, fiscal year 2018................... -5,200,000
Budget request, fiscal year 2019.................. +11,300,000
The Office of the Special Inspector General for the
Troubled Asset Relief Program (SIGTARP) was established in the
Emergency Economic Stabilization Act of 2008 (Public Law 110-
343). Its mission is to conduct, supervise, and coordinate
audits and investigations of the purchase, management, and sale
of assets by the Secretary of the Treasury under programs
established pursuant to the Troubled Asset Relief Program
(TARP).
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $28,800,000
for SIGTARP.
Financial Crimes Enforcement Network
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $115,003,000
Budget request, fiscal year 2019...................... 117,800,000
Recommended in the bill............................... 117,800,000
Bill compared with:
Appropriation, fiscal year 2018................... +2,797,000
Budget request, fiscal year 2019.................. - - -
The Financial Crimes Enforcement Network (FinCEN) is
responsible for implementing Treasury's anti-money laundering
regulations through administration of the Bank Secrecy Act
(BSA). It also collects and analyzes information to assist in
the investigation of money laundering and other financial
crimes. FinCEN supports law enforcement investigative efforts
by Federal, State, local and international agencies, and
fosters interagency and global cooperation against domestic and
international financial crimes.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $117,800,000
for FinCEN. The recommended amount is intended to ensure
FinCEN's information is accessible to the law enforcement and
intelligence communities and to ensure FinCEN can respond to
requests for assistance from law enforcement. The data compiled
and analyzed by FinCEN is a critical tool for investigating,
among other crimes, money laundering, mortgage fraud, drug
cartels, and terrorist financing.
Human Trafficking.--The Committee appreciates FinCEN's
history of supporting law enforcement cases that combat human
trafficking, including its 2014 Guidance on Recognizing
Activity that May be Associated with Human Smuggling and Human
Trafficking to financial institutions, and emphasizes the
importance of continuing this effort as part of the bureau's
broader mission to detect and disrupt all forms of financial
crime. Wherever possible, FinCEN shall marshal its unique
expertise in analyzing financial flows for this important
effort in the course of ongoing strategic operations, such as
the Southwest Border Initiative, and provide the appropriate
assistance to law enforcement agencies in their human
trafficking investigations.
Bureau of the Fiscal Service
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $338,280,000
Budget request, fiscal year 2019...................... 330,837,000
Recommended in the bill............................... 338,280,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. +7,443,000
The mission of the Bureau of the Fiscal Service is to
promote the financial integrity and operational efficiency of
the U.S. Government through accounting, borrowing, collections,
payments, and shared services. The Fiscal Service is the
Federal Government's central financial agent. The Fiscal
Service also develops and implements reliable and efficient
financial methods and systems to operate the government's cash
management, credit management, and debt collection programs in
order to maintain government accounts and report on the status
of the government's finances. In addition, the Fiscal Service
is the primary agency for collecting Federal non-tax debt owed
to the government, and is responsible for the conduct of all
public debt operations and the promotion of the sale of U.S.
securities.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $338,280,000
for the Fiscal Service. Of the funds provided, $4,210,000 is
available until September 30, 2021, for information systems
modernization.
DATA Act.--Within this appropriation, funding is included
for USAspending.gov. The Committee expects the Fiscal Service
to meet its transparency goals within USAspending.gov related
to the DATA Act and will monitor progress in achieving
government spending transparency. The Committee directs the
Fiscal Service to meet its transparency goals within
USAspending.gov and coordinate with OMB to publish all
unclassified vendor contracts and grant awards for all federal
agencies on USAspending.gov. The Committee directs the Fiscal
Service to display this information online and report to the
Committees on Appropriations of the House and the Senate within
90 days of the enactment of this Act on its progress in
achieving government spending transparency.
The Committee is committed to transparency and
accountability in federal spending. As such the Committee
directs the Fiscal Service to make basic information about the
use of financial agents publicly available in a central
location, including compensation paid to each financial agent
and a description of the services provided.
Do Not Pay Business Center.--Do Not Pay (DNP) was
established to help federal agencies comply with the Improper
Payments Elimination and Recovery Improvement Act of 2012 by
supporting efforts to prevent and detect improper payments. DNP
helps reduce the number of improper payments by providing
agencies streamlined access to relevant data sources when
evaluating pre-award, pre-payment eligibility verification
process as well as anytime during the payment lifecycle. OMB
approves DNPs access to relevant data sources. In order to
ensure timely approvals by OMB of new data sources for DNP,
including commercial data sources, the Committee encourages
Treasury and OMB to identify opportunities to make the data
source review process more efficient, including automatically
approving requests for new data sources that are pending more
than 30 days; creating an approved data source list;
identifying publicly available data sources for approval; and
creating baseline criteria standards for data sources that
automatically trigger approval, as well as any other efforts
that will help prevent, reduce, and stop improper payments, and
prevent waste, fraud, and abuse.
Alcohol and Tobacco Tax and Trade Bureau
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $111,439,000
Budget request, fiscal year 2019...................... 114,427,000
Recommended in the bill............................... 123,527,000
Bill compared with:
Appropriation, fiscal year 2018................... +12,088,000
Budget request, fiscal year 2019.................. +9,100,000
The Alcohol and Tobacco Tax and Trade Bureau (TTB) is
responsible for the enforcement of laws designed to eliminate
certain illicit activities and to regulate lawful activities
relating to distilled spirits, beer, wine, and nonbeverage
alcohol products, and tobacco. TTB focuses on collecting
revenue; reducing taxpayer burden and improving service while
preventing diversion; and protecting the public and preventing
consumer deception in certain regulated commodities.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $123,527,000
for the TTB. Within this amount, $5,000,000 is included for
increased enforcement of the Federal Alcohol Administration Act
(FAA Act).
Enforcement.--The Committee has included $5,000,000 for TTB
to increase enforcement efforts for industry trade practice
violations. Enforcement of basic trade practice functions,
required under the FAA Act, is critical to ensuring a
competitive, fair, and safe marketplace. The Committee directs
the TTB to report to the Committees on Appropriations of the
House and the Senate, within 60 days of enactment of this Act,
on how the additional funding will be used to bolster
enforcement, forensic audits, and investigations, particularly
in known points in the supply chain that are susceptible to
illegal activity.
Processing Time.--The Committee will continue to monitor
the process for securing basic label and formula approvals
required under the FAA Act. The Committee continues to support
additional funding for this and expects the TTB to continue to
make efforts to shorten processing time for label and formula
applications.
American Viticulture Area.--The Committee recognizes that
the use of American Viticulture Area (AVA) terms help small
farmers and wineries grow their businesses by developing
regional brands. The AVA system stimulates economic growth in
the industry and also provides consumers with valuable
information about where their purchases are sourced. The TTB
should improve label accuracy to ensure that use of AVA terms
are consistent with existing federal laws and regulations
governing the use of these protected terms.
United States Mint
UNITED STATES MINT PUBLIC ENTERPRISE FUND
The United States Mint manufactures coins, receives
deposits of gold and silver bullion, and safeguards the Federal
Government's holdings of monetary metals. In 1997, Congress
established the United States Mint Public Enterprise Fund
(Public Law 104-52), which authorized the Mint to use proceeds
from the sale of coins to finance the costs of its operations
and consolidated all existing Mint accounts into a single fund.
Public Law 104-52 also provided that, in certain situations,
the levels of capital investments for circulating coins and
protective services shall factor into the decisions of the
Congress.
COMMITTEE RECOMMENDATION
The Committee recommends a spending level for capital
investments by the Mint for circulating coinage and protective
services of $30,000,000 for fiscal year 2019.
Community Development Financial Institutions Fund
PROGRAM ACCOUNT
Appropriation, fiscal year 2018....................... $250,000,000
Budget request, fiscal year 2019...................... 14,000,000
Recommended in the bill............................... 216,000,000
Bill compared with:
Appropriation, fiscal year 2018................... -34,000,000
Budget request, fiscal year 2019.................. +202,000,000
The Community Development Financial Institutions (CDFI)
Fund provides grants, loans, equity investments, and technical
assistance, on a competitive basis, to new and existing CDFIs
such as community development banks, community development
credit unions, and housing and microenterprise loan funds.
Recipients use the funds to support mortgages, small business
and economic development lending in underserved and distressed
neighborhoods and to support the availability of financial
services in these neighborhoods. The CDFI Fund is also
responsible for implementation of the New Markets Tax Credits.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $216,000,000
for the CDFI Fund program. Of the amounts provided,
$121,000,000 is for financial and technical assistance grants,
$3,000,000 is for CDFIs to provide technical and financial
assistance to individuals with disabilities, $13,000,000 is for
Native Initiatives, $19,000,000 is for the Bank Enterprise
Award Program, $15,000,000 is for the Healthy Food Financing
Initiative, and $23,000,000 is for the administrative expenses
for all. In addition, the Committee recommends a loan level of
$500,000,000 for the Bond Guarantee Program.
CDFIs in U.S. Insular Areas.--The Committee notes the
absence of CDFIs serving American Samoa, Northern Mariana
Islands and other U.S. insular areas and recommends that the
CDFI Fund use its Capacity Building Initiative to expand
service, to the extent practical, to these areas.
CDFIs in the Appalachian Region.--The Committee recognizes
that the Appalachian region continues to face economic
hardships and high unemployment stemming from the downturn in
the coal market. The Committee encourages the CDFI Fund to
focus on opportunities in the region and expand service for
businesses and industries that may lead to improved long-term
diversification of the economy in Appalachia.
CDFI Program Integration for Individuals with
Disabilities.--The Committee is pleased to provide dedicated
funds for financial and technical assistance grants to position
more CDFI's to respond to the housing, transportation,
education, and employment needs of underserved, low-income,
individuals with disabilities. By increasing the visibility of
the disability community, the Committee expects CDFI's to
incorporate the needs of the disabled into their business plans
and practices.
The Committee directs the CDFI Fund to submit a report
every six months until all the funds are obligated, not later
than six months after the enactment of the Act to the
Committees on Appropriations of the House and the Senate
summarizing the progress made toward developing a competitive
application pool of CDFIs to compete for funds for individuals
with disabilities. Additionally, the report should include the
number of awards, amount of each award, types of programs,
impact the funding has made on the number of CDFIs serving the
disability community, and findings and recommendations to
improve upon the implementation of these activities.
Internal Revenue Service
The Committee recommends providing $11,616,554,000 for the
IRS, which is $186,000,000 above the fiscal year 2018 enacted
level. The fiscal year 2019 funding level includes dedicated
funds in the amount of $77,000,000 to assist with the
implementation of tax reform for the 2018 filing season.
Additionally, the fiscal year 2019 amount incorporates
increases to modernize IRS's information technology systems.
In addition, the Committee includes language to:
Prohibit funds for finalizing any regulation
related to the standards used to determine the tax-
exempt status of a 501(c)(4) organization;
Prohibit funds for IRS employee bonuses and
awards that do not consider the conduct and tax
compliance of such employees;
Prohibit funds for hiring former IRS
employees without considering the employees past
conduct and tax compliance;
Prohibit funds for targeting groups for
regulatory scrutiny based on their ideological beliefs;
Prohibit funds for targeting citizens for
exercising their First Amendment rights;
Prohibit funds for conferences that do not
comply with the Treasury Inspector General for Tax
Administration's (TIGTA) recommendations regarding
conferences;
Require extensive reporting on IRS spending
and information technology; and
Provide TIGTA with $170,834,000 for its
audit and investigative oversight of the IRS.
The Committee remains concerned with the level of service
taxpayers are receiving and continued cybersecurity threats.
Targeted reporting is included to assist the Committee monitor
and evaluate the IRS's progress in these areas.
A description of the Committee's recommendation by
appropriation is provided below.
TAXPAYER SERVICES
Appropriation, fiscal year 2018....................... \1\$2,506,554,00
0
Budget request, fiscal year 2019...................... 2,241,000,000
Recommended in the bill............................... 2,491,554,000
Bill compared with:
Appropriation, fiscal year 2018................... -15,000,000
Budget request, fiscal year 2019.................. +250,554,000
\1\As directed by Public Law 115-141, Division E, Section 113 of the
Administrative Provisions--Internal Revenue Service, $19,000,000 was
transferred by the Commissioner of the Internal Revenue Service to the
Taxpayer Services which increased the Taxpayer Services fiscal year
2018 level from $2,506,554 to $2,525,554,000.
The Taxpayer Services appropriation provides for taxpayer
services, including forms and publications; processing tax
returns and related documents; filing and account services;
taxpayer advocacy services; and assisting taxpayers to
understand their tax obligations, correctly file their returns,
and pay taxes due in a timely manner.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $2,491,554,000
for Taxpayer Services. Additional funds are provided in
provision 113 of this Bill to assist the IRS with implementing
the Tax Cuts and Jobs Act. These additional funds will provide
a level of funding above the fiscal year 2018 enacted level for
taxpayer Services. Within the amount provided, the Committee
expects the IRS to sufficiently fund the Taxpayer Advocate
Service and accommodate where possible their increased needs
associated with the implementation of the Tax Cuts and Jobs
Act.
Synthetic Identity Theft.--The Committee is concerned about
the rising incidence of synthetic identity fraud. In 2018,
losses as a result of this fraud are projected to be about
$8,000,000,000. The Committee urges the IRS to remain committed
to addressing identity theft and fraud and to mitigate emerging
threats.
Prosecutions of Identity Theft.--The Committee remains
highly concerned about the prosecutions of identity theft. The
Committee directs the Treasury Inspector General for Tax
Administration (TIGTA) to submit a report to the Committees on
Appropriations of the House and the Senate not later than 120
days after the date of enactment of this Act, detailing--(1)
current efforts by the Internal Revenue Service to assist with
the prosecution of violations of section 1028(a) or 1028A(a) of
title 18, United States Code, wherein the defendant
misrepresented himself or herself to be engaged in lawful
activities on behalf of, or carrying out lawful duties as an
officer or employee of the Internal Revenue Service; (2)
overall trends in the commission of such offenses; (3) TIGTA's
recommendations regarding what resources are needed to
facilitate improved review and prosecution of such cases; and
(4) information on what assistance the Internal Revenue Service
may offer victims of such offenses.
Identity Theft Tax Refund Fraud.--The Committee requires a
report, reviewed by the National Taxpayer Advocate, from the
IRS that covers 2010-2018 period on: the number of taxpayers
who have had their tax return rejected because their Social
Security or taxpayer identification number was improperly used
by another individual to commit tax fraud; the average time to
resolve the situation and provide innocent taxpayers with their
refund, when a refund is due; and the number of cases involving
taxpayer identification numbers of residents of the
territories. The report will also include a discussion on IRS's
progress and plans to expedite resolution for these taxpayers,
to prevent non-victims from becoming victims, to educate the
public on the threat of identity theft, and to detect, prevent,
and combat identity-based tax fraud and actions. The Committee
directs the IRS to submit the report to the Committees on
Appropriations of the House and the Senate by June 1, 2019.
Since 2015, the Government Accounting Office's High-Risk
List has included IRS's efforts to address IDT refund fraud.
The IRS launched an Identity Theft Tax Refund Fraud Information
Sharing and Analysis Center (ISAC) pilot for the 2017 filing
season. It aims to allow the IRS, states, and tax preparation
industry partners to quickly share information on IDT refund
fraud. The Committee agrees with GAO's recommendations to the
IRS to ensure that (1) the ISAC better aligns with leading
practices for effective pilot design, and (2) the ISAC
Partnership develops an outreach plan to expand membership and
improve understanding of the ISAC's benefits. The Committee
looks forward to improved collaboration of the IRS and ISAC to
reduce refund fraud.
Pre-Filled or Simple Tax Returns.--The Committee believes
that converting a voluntary compliance system to a bill
presentment model would represent a significant change in the
relationship between taxpayers and their government. The simple
return model would also strain IRS resources and the data
retrieval systems required would create new burdens on
employers, particularly small businesses. In addition, a
fundamental conflict of interest seems to be inherent in the
nation's tax collector and compliance enforcer taking on the
simultaneous role of tax preparer and financial advisor. The
Committee expects that the IRS will not begin work on a simple
tax return pilot program or associated systems without first
seeking specific authorization and appropriations from
Congress, and should instead focus on helping Congress and the
Administration achieve real tax simplification and reform.
Safe Harbor.--The Committee instructs the IRS to follow and
apply, the 75 percent math safe harbor test. Section 4052(f)(1)
provides a safe harbor test that excludes from the tax
previously taxed tractors that are refurbished as long as the
restoration cost does not exceed 75-percent of the cost of a
comparable new tractor. Therefore, the Committee expects that
the IRS apply these longstanding statutory provisions as
written and without additional interpretation, modification, or
added conditions.
Individual Mandate.-- In October 2017, the IRS announced
for Tax Year 2017, ``the IRS will not consider a return
complete and accurate if the taxpayer does not report full-year
coverage, claim a coverage exemption, or report a shared
responsibility payment on the tax return.'' The IRS further
instructed ``to avoid refund and processing delays when filing
2017 tax returns in 2018, taxpayers should indicate whether
they and everyone on their return had health coverage,
qualified for an exemption from the coverage requirement or are
making an individual shared responsibility payment.'' The
Committee directs the IRS to clarify agency policy regarding
``silent returns'' before the beginning of the 2018 tax filing
season.
State and Local Pension Plans.--The Committee recommends
that the Secretary of the Treasury and the Commissioner of the
IRS initiate a review of the existing regulatory guidance in
Revenue Ruling 2006-43,and issue a revised revenue ruling that
allows state and local pension plan sponsors to give existing
plan participants the choice to make certain elections between
pension plans or plan tiers without changing the treatment of
employer contributions under 26 U.S.C. 414(h).
2D bar codes.--The Committee encourages the Internal
Revenue Service (IRS) to require 2D bar codes on 2019 paper tax
returns and tax preparer software to produce 2D bar codes on
2019 tax return submissions. The 40 million paper tax returns
submitted each year must be manually processed, this is
expensive, time-consuming, and creates errors. 2D bar coding
increases the quality of the data capture, reduces processing
costs and improves fraud and identity theft detection.
Self-Employed Tax Collection.--The Committee is concerned a
shift towards self-employed and independent contracting within
an increasingly gig-based economy will correspondingly increase
underpayment and underreporting of self-employed taxes. The
Committee directs the IRS to submit a letter briefing the
Committees on Appropriations of the House and Senate within 90
days of enactment of this Act, on the IRS's strategy to better-
identify and collect in underpayments of self-employed taxes
each year.
ENFORCEMENT
Appropriation, fiscal year 2018....................... \1\$4,860,000,00
0
Budget request, fiscal year 2019...................... 4,832,643,000
Recommended in the bill............................... 4,860,000,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. +27,357,000
\1\As directed by Public Law 115-141, Division E, Section 113 of the
Administrative Provisions--Internal Revenue Service, $10,000,000 was
transferred by the Commissioner of the Internal Revenue Service to
Enforcement which increased the Enforcement Account in fiscal year
2018 from $4,860,000,000 to $4,870,000,000.
The Enforcement appropriation provides for the examination
of tax returns, both domestic and international; the
administrative and judicial settlement of taxpayer appeals of
examination findings; technical rulings; monitoring employee
pension plans; determining qualifications of organizations
seeking tax-exempt status; examining tax returns of exempt
organizations; enforcing statutes relating to detection and
investigation of criminal violations of the internal revenue
laws; identifying underreporting of tax obligations; securing
unfiled tax returns; and collecting unpaid accounts.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $4,860,000,000
for Enforcement. Of the funds provided, the Committee
recommends not less than $60,257,000 to support IRS activities
under the Interagency Crime and Drug Enforcement program.
Printed Forms and Instructions.--The Committee encourages
the IRS to continue to provide printed forms and instructions
to vulnerable populations, especially in rural communities
where internet usage rates are below the national average.
Improper Payments.--The Committee believes that confidence
and trust within the tax administration system is paramount to
a strong voluntary tax compliance system. Each year, the
Internal Revenue Service shall present to the Committees of
Appropriations of the House and the Senate a report identifying
the improper payment rates of refundable credits by tax return
preparers and subsequent steps taken by the Internal Revenue
Service to correct the compliance errors. The Committee also
directs the Internal Revenue service to report to the
Committees of Appropriations of the House and the Senate as to
how many tax preparers were referred to the Return Preparer
Office of the IRS, Criminal Investigations or the Department of
Justice.
Debt Collection.--The Committee commends the IRS for
implementing the private debt collection program through the
Fixing America's Surface Transportation (FAST) Act (Pub. L. No.
114-94). The Committee remains concerned, however, that the
schedule for release of inactive debts going forward
contradicts the explicit language of the authorizing statute
and will result in far lower receipts and related compliance
funding than the Joint Committee on Taxation estimated would
result from the provision. The law requires all inactive debts
to be released, excluding only certain debts specified in the
law. The Committee reminds the IRS that a substantial amount of
revenue for compliance activities can be retained by the IRS
through full implementation of the program.
Tax Gap.--The IRS estimates, that taxpayers collectively
pay a bit more than 80% of the taxes they owe. This difference
between the taxes people and businesses owe and what they pay
on time is known as the tax gap which IRS estimated to be $458
billion, on average, for 2008-2010. The Government Accounting
Office recommends that IRS re-establish goals for improving
voluntary compliance and develop and document a strategy that
outlines how it will use its data to update compliance
strategies to address the tax gap.
OPERATIONS SUPPORT
Appropriation, fiscal year 2018....................... \1\$3,634,000,00
0
Budget request, fiscal year 2019...................... 4,312,724,000
Recommended in the bill............................... 3,988,000,000
Bill compared with:
Appropriation, fiscal year 2018................... +354,000,000
Budget request, fiscal year 2019.................. -324,724,000
\1\As directed by Public Law 115-141, Division E, Section 113 of the
Administrative Provisions--Internal Revenue Service, $291,000,000 was
transferred by the Commissioner of the Internal Revenue Service to
Operations Support which increased Operations Support in fiscal year
2018 from $3,638,446,000 to $3,925,000,000.
The Operations Support appropriation provides for overall
planning and direction of the IRS, including shared service
support related to facilities services, rent payments,
printing, postage, and security. Specific activities include
headquarters management activities such as strategic planning,
communications and liaison, finance, human resources, Equal
Employment Opportunity and diversity, research, information
technology, and telecommunications.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $3,988,000,000
for Operations Support.
Obligations and Employment.--Not later than 45 days after
the end of each quarter, the IRS shall submit reports on its
activities to the Committees on Appropriations of the House and
the Senate. The reports shall include information about the
obligations made during the previous quarter by appropriation,
object class, office, and activity; the estimated obligations
for the remainder of the fiscal year by appropriation, object
class, office, and activity; the number of full-time
equivalents within each office during the previous quarter; and
the estimated number of full-time equivalents within each
office for the remainder of the fiscal year.
Information Technology Reports.--The Committee directs the
IRS to submit quarterly reports on particular major project
activities to the Committees on Appropriations of the House and
the Senate and the Government Accounting Office (GAO), no later
than 30 days following the end of each calendar quarter in
fiscal year 2019. The Committee expects the reports to include
detailed, plain English explanations of the cumulative
expenditures and schedule performance to date, specified by
fiscal year; the costs and schedules for the previous 3 months;
the anticipated costs and schedules for the upcoming 3 months;
and the total expected costs to complete IRS's top five major
information technology project activities. In addition, the
quarterly report should clearly explain when the project was
started; the expected date of completion; the percentage of
work completed as compared to planned work; the current and
expected state of functionality; any changes in schedule; and
current risks unrelated to funding amounts and mitigation
strategies. The Committee directs the Department of the
Treasury to conduct a semi-annual review of IRS's IT
investments to ensure the cost, schedule, and scope of the
projects' goals are transparent. The Committee further directs
GAO to review and provide an annual report to the Committees
evaluating the cost and schedule of activities of all major IRS
information technology projects for the year, with particular
focus on the projects about which the IRS is submitting
quarterly reports to the Committee.
Digital Workspace.--The Committee recognizes that digital
workspaces can increase user productivity, enhance
cybersecurity & management, while also allowing for workforce
flexibility, and urges the Internal Revenue Service to leverage
the use of digital workspaces.
BUSINESS SYSTEMS MODERNIZATION
Appropriation, fiscal year 2018....................... $110,000,000
Budget request, fiscal year 2019...................... 110,000,000
Recommended in the bill............................... 200,000,000
Bill compared with:
Appropriation, fiscal year 2018................... +90,000,000
Budget request, fiscal year 2019.................. +90,000,000
The Business Systems Modernization (BSM) appropriation
provides funding to modernize key business systems of the IRS.
Funds have been permanently transferred from this account to
Operations Support to fund operation and maintenance for the
existing infrastructure that will help protect the IRS from
cyber threats.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $200,000,000
for BSM. The Committee continues to support IRS in its efforts
to modernize its business systems such as CADE 2, the
Enterprise Case Management System, and the Return Review
Program. These systems enhance IRS's capabilities to better
assist the taxpayer, to detect, address, and prevent tax refund
fraud as well as web applications that will help the IRS
transition to a more serviceable digital government.
Information Technology Reports.--The Committee expects the
IRS to continue to submit quarterly reports to the Committees
and GAO during fiscal year 2019, no later than 30 days
following the end of each calendar quarter. The Committee
expects the reports to include detailed, plain English
explanations of the cumulative expenditures and schedule
performance to date, specified by fiscal year; the costs and
schedules for the previous 3 months; the anticipated costs and
schedules for the upcoming 3 months; and the total expected
costs to complete CADE 2, Enterprise Case Management System,
and Return Review Program. In addition, the quarterly report
should clearly explain when the project was started; the
expected date of completion; the percentage of work completed
as compared to planned work; the current and expected state of
functionality; any changes in schedule; and current risks
unrelated to funding amounts and mitigation strategies. The
Committee directs the Department of the Treasury to conduct a
semi-annual review of CADE 2, Enterprise Case Management
System, and Return Review Program to ensure the cost, schedule,
and scope goals of the projects are transparent. The Committee
further directs GAO to review and provide an annual report to
the Committee evaluating the cost and schedule of CADE 2,
Enterprise Case Management System, and Return Review Program
activities for the year, as well as an assessment of the
functionality achieved.
IRS's IT Investments.--GAO has highlighted in its May 2018
report (GAO-18-298) that IRS needs to make improvements on
delivering major tax processing and fraud detection
acquisitions, managing key risks associated with aging legacy
systems, and addressing IT workforce gaps. These improvements
are critical to IRS's management of its annual $2,600,000,000
investment in IT. The Committee encourages the IRS to address
GAO's recommendations and to prioritize those associated with
the Customer Account Data Engine 2 and the Individual Master
File.
Identity Theft and Fraud Detection Filters.--In order to
combat and reduce identity theft and refund fraud, the IRS has
implemented a screening process using filters that flag
potentially improper tax returns. Although these filters do
identify improper returns and prevent improper refunds from
being issued, they also have a high degree of inaccuracy with
false positive rates averaging 62 percent for its identity
theft filters and 66 percent for its refund fraud filters
during calendar year 2017 (through September 30), according to
the National Taxpayer Advocate. The Committee is concerned with
these high rates of false positives and directs the IRS to
submit a report to the Committees on Appropriations of the
House and the Senate that identifies the number of legitimate
filers impacted by the high false positive rates, sets forth a
plan to reduce the false positive rates (including an
assessment of the benefits of adopting predictive modeling to
both improve detection of improper returns and reduce false
positives), and addresses the potential cost savings of a lower
false positive rate. This report shall be prepared in
consultation with the National Taxpayer Advocate and shall be
due no later than 90 days after enactment of this Act.
ADMINISTRATIVE PROVISIONS-INTERNAL REVENUE SERVICE
(INCLUDING TRANSFERS OF FUNDS)
Section 101. The Committee continues a provision that
allows for the transfer of five percent of any appropriation
made available to the IRS to any other IRS appropriation, upon
the advance approval of the Committees on Appropriations of the
House and the Senate.
Section 102. The Committee continues a provision that
requires the IRS to maintain a training program to include
taxpayer rights, dealing courteously with taxpayers, cross-
cultural relations, and the impartial application of tax law.
Section 103. The Committee continues a provision that
requires the IRS to institute and enforce policies and
procedures that will safeguard the confidentiality of taxpayer
information and protect taxpayers against identity theft.
Section 104. The Committee continues a provision that makes
funds available for improved facilities and increased staffing
to provide efficient and effective 1-800 number help line
service for taxpayers.
Section 105. The Committee continues a provision that
requires the IRS to notify employers of any address change
request and to give special consideration to offers in
compromise for taxpayers who have been victims of payroll tax
preparer fraud.
Section 106. The Committee continues a provision with
modifications that prohibits the IRS from targeting U.S.
citizens for exercising their First Amendment rights.
Section 107. The Committee continues a provision with
modifications that prohibits the IRS from targeting groups
based on their ideological beliefs.
Section 108. The Committee continues a provision with
modifications that requires the IRS to comply with procedures
and policies on conference spending as recommended by the
Treasury Inspector General for Tax Administration.
Section 109. The Committee continues a provision with
modifications that prohibits funds for giving bonuses to
employees or hiring former employees without considering
conduct and compliance with Federal tax law.
Section 110. The Committee continues a provision with
modifications that prohibits funds to violate the
confidentiality of tax returns.
Section 111. The Committee continues a provision with
modifications that prohibits funds for pre-populated returns.
Section 112. The Committee includes a new provision to
prohibit funds for the IRS to deny tax exemption to a church
for participating in, or intervening in, any political campaign
on behalf of (or in opposition to) any candidates for public
office unless the IRS Commissioner consents to such
determination, the Commissioner notifies the tax committees of
Congress, and the determination of denied tax exemption is
effective 90 days after such notification.
Section 113. Provides $77,000,000 to be used solely for
carrying out Public Law 115-97. The IRS is directed to provide
the Committees on Appropriations of the House and the Senate no
later than 30 days after the enactment of this Act, a detailed
spending plan by account and object class for the funds
provided. Additionally, the IRS is directed to submit quarterly
spending plans broken out by account, and include, minimum,
quarterly obligations and total obligations to date;actual and
projected staffing levels; and updated timetables.
ADMINISTRATIVE PROVISIONS--DEPARTMENT OF THE TREASURY
(INCLUDING TRANSFERS OF FUNDS)
Section 114. The Committee continues a provision that
authorizes the Department to purchase uniforms, insurance for
motor vehicles that are overseas, and motor vehicles that are
overseas without regard to the general purchase price
limitations; to enter into contracts with the State Department
for health and medical services for Treasury employees who are
overseas; and to hire experts or consultants.
Section 115. The Committee continues a provision that
authorizes transfers, up to two percent, between ``Departmental
Offices-Salaries and Expenses'', ``Office of Inspector
General'', ``Special Inspector General for the Troubled Asset
Relief Program'', ``Financial Crimes Enforcement Network'',
``Bureau of the Fiscal Service'', and ``Alcohol and Tobacco Tax
and Trade Bureau'' appropriations under certain circumstances.
Section 116. The Committee continues a provision that
authorizes transfers, up to two percent, between the Internal
Revenue Service and the Treasury Inspector General for Tax
Administration under certain circumstances.
Section 117. The Committee continues a provision that
prohibits the Department of the Treasury from undertaking a
redesign of the one dollar Federal Reserve note.
Section 118. The Committee includes a provision that
provides for transfers from the Bureau of the Fiscal Service to
the Debt Collection Fund as necessary for the purposes of debt
collection.
Section 119. The Committee continues a provision that
requires congressional approval for the construction and
operation of a museum by the United States Mint.
Section 120. The Committee continues a provision
prohibiting funds in this or any other Act from being used to
merge the United States Mint and the Bureau of Engraving and
Printing without the approval of the House and the Senate
committees of jurisdiction.
Section 121. The Committee continues a provision deeming
that funds for the Department of the Treasury's intelligence-
related activities are specifically authorized in fiscal year
2019 until enactment of the Intelligence Authorization Act for
fiscal year 2019.
Section 122. The Committee continues a provision permitting
the Bureau of Engraving and Printing to use $5,000 from the
Industrial Revolving Fund for reception and representation
expenses.
Section 123. The Committee continues a provision that
requires the Department to submit a capital investment plan.
Section 124. The Committee continues a provision that
requires a report on the Department's Franchise Fund.
Section 125. The Committee continues a provision that
prohibits the Department from finalizing any regulation related
to the standards used to determine the tax-exempt status of a
501(c)(4) organization.
Section 126. The Committee continues a provision that
requires quarterly reports of the Office of Financial Research
(OFR) and Office of Financial Stability.
Section 127. The Committee includes a new provision that
authorizes the Office of Terrorism and Financial Intelligence
to reimburse Treasury Departmental Offices for reception and
representation expenses to support activities of the Financial
Action Task Force.
Section 128. The Committee includes a new provision to
prohibit funds to approve, license, facilitate, authorize, or
otherwise allow the importation of property confiscated by the
Cuban Government.
Section 129. The Committee includes a new provision to
prohibit funds to approve or otherwise allow the licensing of a
mark, trade name, or commercial name that is substantially
similar to one that was used in connection with a business or
assets that were confiscated unless expressly consented.
Section 130. The Committee includes a new provision that
prohibits the Department from enforcing guidance for U.S.
positions on multilateral development banks which engage with
developing countries on coal-fired power generation.
Section 131. The Committee continues a provision that
requires quarterly reports of the Office of Financial Research
(OFR) and Office of Financial Stability.
Section 132. The Committee includes a new provision
requiring the OFR to provide public notice of not less than 90
days before issuing a rule, report, or regulation.
Section 133. The Committee includes a new provision that
limits the fees available for obligation by the OFR to the
amount provided in appropriations acts beginning in fiscal year
2020. The Committee believes that the activities of OFR should
be subject to the annual review of Congress.
TITLE II--EXECUTIVE OFFICE OF THE PRESIDENT AND FUNDS APPROPRIATED TO
THE PRESIDENT
Funds appropriated in this title provide for the staff and
operations of the White House, along with other organizations
within the Executive Office of the President (EOP), which
formulate and coordinate policy on behalf of the President,
such as the National Security Council and the Office of
Management and Budget. The title also includes funding for the
Office of National Drug Control Policy and certain expenses of
the Vice President.
The White House
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $55,000,000
Budget request, fiscal year 2019...................... 55,000,000
Recommended in the bill............................... 55,000,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. - - -
The White House Salaries and Expenses account supports
staff and administrative services necessary for the direct
support of the President.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $55,000,000
for the White House.
Executive Residence at the White House
OPERATING EXPENSES
Appropriation, fiscal year 2018....................... $12,917,000
Budget request, fiscal year 2019...................... 13,081,000
Recommended in the bill............................... 13,081,000
Bill compared with:
Appropriation, fiscal year 2018................... +164,000
Budget request, fiscal year 2019.................. - - -
These funds provide for the care, maintenance, staffing and
operations of the Executive Residence, including official and
ceremonial functions of the President.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $13,081,000
for the Operating Expenses of the Executive Residence. The bill
continues the same restrictions on reimbursable expenses for
use of the Executive Residence as were included in past years.
White House Repair and Restoration
Appropriation, fiscal year 2018....................... $750,000
Budget request, fiscal year 2019...................... 750,000
Recommended in the bill............................... 750,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. - - -
The White House repair and restoration account provides for
the repair, alteration, and improvement of the Executive
Residence at the White House.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $750,000 for
White House Repair and Restoration.
Council of Economic Advisers
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $4,187,000
Budget request, fiscal year 2019...................... 4,187,000
Recommended in the bill............................... 4,187,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. - - -
The Council of Economic Advisers analyzes the national
economy and its various segments, advises the President on
economic developments, recommends policies for economic growth
and stability, appraises economic programs and policies of the
Federal Government, and assists in preparation of the annual
Economic Report of the President.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $4,187,000 for
the Council of Economic Advisers.
National Security Council and Homeland Security Council
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $11,800,000
Budget request, fiscal year 2019...................... 13,500,000
Recommended in the bill............................... 13,000,000
Bill compared with:
Appropriation, fiscal year 2018................... +1,200,000
Budget request, fiscal year 2019.................. -500,000
The National Security Council and the Homeland Security
Council have been combined to form the National Security Staff
which advises and assists the President in the integration of
domestic, foreign, military, intelligence, and economic aspects
of national security policy, and serves as the principal means
of coordinating executive departments and agencies in the
development and implementation of national security and
homeland security policies.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $13,000,000
for the National Security Council and Homeland Security
Council. The Committee's recommendation does not include a
separate representation and reception appropriation.
Office of Administration
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $100,000,000
Budget request, fiscal year 2019...................... 100,000,000
Recommended in the bill............................... 100,000,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. - - -
The Office of Administration is responsible for providing
administrative services to the Executive Office of the
President. These services include financial, personnel,
procurement, information technology, records management, and
general office services.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $100,000,000
for the Office of Administration. Of the recommended amount,
not to exceed $12,800,000 is available until expended for
modernization of the information technology infrastructure
within the Executive Office of the President.
Office of Management and Budget
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $101,000,000
Budget request, fiscal year 2019...................... 103,000,000
Recommended in the bill............................... 103,000,000
Bill compared with:
Appropriation, fiscal year 2018................... +2,000,000
Budget request, fiscal year 2019.................. - - -
The Office of Management and Budget (OMB) assists the
President in the discharge of budgetary, economic, management,
and other executive responsibilities.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $103,000,000
for OMB. The recommendation also continues several long-
standing provisos, not requested by the President, limiting
certain OMB activities.
Budget Submission.--The recommendation provides sufficient
funds for OMB to consult with Congressional Committees and
provide an appropriate number of printed copies of the
President's fiscal year 2019 budget request, including
documents such as the Appendix, Historical Tables, and
Analytical Perspectives.
Personnel and Obligations Report.--The Committee continues
direction to OMB to provide the Committees on Appropriations of
the House and the Senate with quarterly reports on personnel
and obligations consisting of on-board staffing levels,
estimated staffing levels by office for the remainder of the
fiscal year, total obligations incurred to date, estimated
total obligations for the remainder of the fiscal year, and a
narrative description of current hiring initiatives.
Unobligated Balances Report.--OMB is directed to report to
the Committees on Appropriations of the House and the Senate
within 45 days of the end of each fiscal quarter on available
balances at the start of the fiscal year, current year
obligations, and resulting unobligated balances for each
discretionary account within the Financial Services and General
Government subcommittee's jurisdiction.
Social Cost of Carbon.--The Committee continues direction
the Office of Information and Regulatory Affairs (OIRA) to rely
on instruction included in the Executive Order "Promoting
Energy Independence and Economic Growth," dated March 28, 2018,
and ensure that any estimates developed by agencies that
include monetizing the value of changes in greenhouse gas
emissions resulting from regulations are consistent with
Executive Order 12866 and OMB Circular A-4 of September 17,
2003. OIRA should not permit any regulations to be finalized
using the Technical Support Document: Technical Update of the
Social Cost of Carbon for Regulatory Impact Analysis Under
Executive Order 12866, Interagency Working Group on Social Cost
of Carbon, United States Government, May 2013, revised August
2016; or the Addendum to Technical Support Document on Social
Cost of Carbon for Regulatory Impact Analysis Under Executive
Order 12866: Application of the Methodology to Estimate the
Social Cost of Methane and the Social Cost of Nitrous Oxide,
Interagency Working Group on Social Cost of Greenhouse Gases,
United States Government, August 2016.
Intellectual Property.--The Committee continues to strongly
support the Office of the Intellectual Property Enforcement
Coordinator (IPEC), and efforts to reduce online copyright
infringement and promote meaningful protection of American
intellectual property abroad. The Committee's recommendation
includes no less than three FTEs dedicated solely to the Office
of IPEC from OMB.
Improper Payments.--The Committee encourages OMB to
continue working with agencies across the Federal government to
ensure processes are in place to eliminate payments to deceased
persons. OMB is again directed to report to the Committees on
Appropriations of the House and the Senate within 120 days of
enactment of this Act on how it is reducing improper payments
to deceased individuals, and what initiatives have proven to be
most effective.
Customer Service.--The Committee continues to support
efforts to improve customer service in accordance with
Executive Order 13571--Streamlining Service Delivery and
Improving Customer Service. The Committee continues direction
to OMB to develop standards to improve customer service for all
agencies, and incorporate the standards into the performance
plans required under 31 U.S.C. 1115.
Performance Measures.--The Committee continues to urge OMB
to work with agencies to ensure that agency funding requests in
fiscal year 2019 are directly linked to agency performance
plans, and highlight examples of where improved performance
links to the budget in the fiscal year 2019 budget
justifications.
Online Budget Repository.--The Committee encourages OMB to
develop a central online repository where all Federal agency
budgets and their respective justifications are publicly
available in a consistent searchable, sortable, and machine
readable format.
Offsetting Collections Report.--The Committee directs OMB
to submit a report to the House and Senate Committees on
Appropriations concurrent with the fiscal year 2019 budget
submission detailing the offsetting collections derived from
non-federal sources that are authorized by law and not subject
to appropriations.
USASpending.gov.--The Committee encourages OMB to regularly
assess the consistency and more importantly the accuracy of the
information reported on USASpending.gov by federal agencies.
Office of National Drug Control Policy
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $18,400,000
Budget request, fiscal year 2019...................... 17,400,000
Recommended in the bill............................... 17,400,000
Bill compared with:
Appropriation, fiscal year 2018................... -1,000,000
Budget request, fiscal year 2019.................. - - -
The Office of National Drug Control Policy (ONDCP) was
established by the Anti-Drug Abuse Act of 1988. As the
President's primary source of support for counter-drug policy
development and program oversight, ONDCP is responsible for
developing and updating a National Drug Control Strategy,
developing a National Drug Control Budget, and coordinating and
evaluating the implementation of Federal drug control
activities. In addition, ONDCP manages several counter-drug
programs which are discussed under the ``Federal Drug Control
Programs'' heading below. These programs include the High
Intensity Drug Trafficking Areas (HIDTA) program and Drug-Free
Communities grants.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $17,400,000
for ONDCP Salaries and Expenses. The Committee expects ONDCP to
focus resources on the counter-drug policy development,
coordination, and evaluation functions which are the primary
mission of the Office and the origins of its existence.
The Committee strongly supports the Office of National Drug
Control Policy programs to reduce drug use and drug
trafficking, and its unique position as the coordinator of
Federal programs. The Committee expects ONDCP to focus
resources on the counter-drug policy development, coordination,
and evaluation functions, which are the primary mission of the
Office and the origins of its existence. To the extent
practicable, ONDCP should prioritize discretionary funds to aid
States that have identified heroin, cocaine, methamphetamine,
and opioid addiction as threats, and are developing community
responses to combat those drugs that prioritize treatment and
health services over criminal punishment. ONDCP is directed to
report to the Committees on Appropriations of the House and the
Senate within 90 days of enactment on how its programs are
addressing these challenges.
The Committee commends the work that ONDCP has done to aid
rural communities in combating the opioid epidemic. More work
is still needed to help some of the hardest hit communities in
both rural America and Appalachia. The Committee expects ONDCP
to coordinate with small and rural law enforcement agencies and
develop strategies to improve the effectiveness of drug
eradication efforts through shared intelligence, technology,
and manpower despite limited resources.
The Committee notes the importance of the High Intensity
Drug Trafficking Areas (HIDTA) and the Drug-Free Communities
(DFC) grant programs in combating the nation's opioid epidemic.
The Committee further notes that the Office of National Drug
Control Policy (ONDCP) ensures the HIDTA and DFC programs are
equitably managed across federal, state, and local agencies and
with the necessary interagency flexibility to address emerging
threats. The Committee directs ONDCP to retain operational
control over the HIDTA and DFC programs to maintain the
interagency benefits needed to address the opioid crisis.
The Committee strongly supports the ONDCP programs to
reduce drug use and drug trafficking, and believes it is
critical for ONDCP to remain a strong voice in the Executive
Office and a visible presence nationally. The Committee
emphasizes the importance of a comprehensive approach to
combatting the epidemic and so directs ONDCP, in strategy
development and resource allocation, to balance public health
and public safety. In this balance, the Committee notes the
importance of: identifying early intervention opportunities,
improving access to preventative and prescriptive treatment,
strengthening community and school-based education programs,
and supporting long-term recovery.
Federal Drug Control Programs
HIGH INTENSITY DRUG TRAFFICKING AREAS PROGRAM
(INCLUDING TRANSFERS OF FUNDS)
Appropriation, fiscal year 2018....................... $280,000,000
Budget request, fiscal year 2019...................... - - -
Recommended in the bill............................... 280,000,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. +280,000,000
The High Intensity Drug Trafficking Areas (HIDTA) Program
provides resources to Federal and State, local, and tribal
agencies in designated HIDTAs to combat the production,
transportation and distribution of illegal drugs; to seize
assets derived from drug trafficking; to address violence in
drug-plagued communities; and to disrupt the drug marketplace.
Currently, 28 HIDTAs operate in 49 States plus the District
of Columbia, Puerto Rico, and the Virgin Islands. Each HIDTA is
managed by an Executive Board comprised of equal numbers of
Federal, State, local or tribal officials. Each HIDTA Executive
Board is responsible for designing and implementing initiatives
for the specific drug trafficking threats in its region.
Intelligence and information sharing are key elements of all
HIDTA programs.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $280,000,000
for the HIDTA Program. The Committee believes that the HIDTA
program has demonstrated its effectiveness and can serve as an
important tool in combating problems of drug trafficking and
drug-related violence.
The Committee includes language requiring that existing
HIDTAs receive funding at least equal to the fiscal year 2018
level unless the Director submits a justification for doing
otherwise to the Committees on Appropriations, based on clearly
articulated priorities and published performance measures.
The recommendation includes language directing ONDCP to
notify the Committees on Appropriations of the initial
allocation of HIDTA funds no later than 45 days after
enactment, and to notify the Committees of the proposed use of
funds no later than 90 days after enactment. The language
directs the ONDCP Director to work in consultation with the
HIDTA Directors in determining the uses of that discretionary
funding.
Finally, the Committee recommendation specifies that up to
$2,700,000 may be used for auditing services and related
activities.
Other Federal Drug Control Programs
(INCLUDING TRANSFERS OF FUNDS)
Appropriation, fiscal year 2018....................... $117,093,000
Budget request, fiscal year 2019...................... 11,843,000
Recommended in the bill............................... 118,327,000
Bill compared with:
Appropriation, fiscal year 2018................... +1,234,000
Budget request, fiscal year 2019.................. +106,484,000
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $118,327,000
for Other Federal Drug Control Programs. The recommended level
for fiscal year 2019 is distributed among specific programs and
activities as follows:
Drug-Free Communities................................. $100,000,000
Drug court training and technical assistance.......... 2,000,000
Model Drug Laws (Section 1105 of P.L. 109-469)........ 1,250,000
CARA Activities (Section 103 of P.L. 114-198)......... 3,000,000
Anti-Doping activities................................ 9,500,000
World Anti-Doping Agency dues......................... 2,577,000
Within the total for the Drug-Free Communities program,
$2,000,000 is for training authorized by Section 4 of P.L. 107-
82.
Unanticipated Needs
Appropriation, fiscal year 2018....................... $798,000
Budget request, fiscal year 2019...................... 1,000,000
Recommended in the bill............................... 1,000,000
Bill compared with:
Appropriation, fiscal year 2018................... +202,000
Budget request, fiscal year 2019.................. - - -
The unanticipated needs account enable the President to
meet unanticipated exigencies in support of the national
interest, security, or defense.
COMMITTEE RECOMMENDATION
The Committee recommends $1,000,000 for unanticipated needs
in fiscal year 2019.
Information Technology Oversight and Reform
(INCLUDING TRANSFER OF FUNDS)
Appropriation, fiscal year 2018....................... $19,000,000
Budget request, fiscal year 2019...................... 25,000,000
Recommended in the bill............................... 15,000,000
Bill compared with:
Appropriation, fiscal year 2018................... -4,000,000
Budget request, fiscal year 2019.................. -10,000,000
These funds support efforts to make the Federal
Government's investments in information technology (IT) more
efficient, secure and effective.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $15,000,000
for information technology oversight activities.
Information Technology Investment: Information Sharing.--
The Committee has provided funds through the Information
Technology Oversight and Reform (ITOR) account and the new IT
Modernization Fund, plus hundreds of millions of dollars across
the many subcommittees, agencies, and accounts to improve the
government's IT portfolio. Investments are made after numerous
hearings, briefings, justifications, and work from auditors
like inspector general offices and the Government
Accountability Office are presented. Along with the authorizing
committees of jurisdiction, the Committee takes the
responsibility for improving IT investments while accounting
for taxpayer dollars very seriously. It is surprising, then,
when staff charged with administering the new IT Modernization
Fund refuse to share findings and respond to queries from the
very committees that made the Fund possible. The Committee
directs OMB and GSA to work more collaboratively with the
relevant committees of jurisdiction in order to better evaluate
the needs of agencies and opportunities for improving IT across
government.
Special Assistance to the President
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $4,288,000
Budget request, fiscal year 2019...................... 4,288,000
Recommended in the bill............................... 4,288,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. - - -
These funds support the executive functions of the Office
of the Vice President.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $4,288,000 for
the Office of the Vice President.
Official Residence of the Vice President
OPERATING EXPENSES
(INCLUDING TRANSFER OF FUNDS)
Appropriation, fiscal year 2018....................... $302,000
Budget request, fiscal year 2019...................... 302,000
Recommended in the bill............................... 302,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. - - -
These funds support the care and operation of the Vice
President's residence and specifically support equipment,
furnishings, dining facilities, and services required to
perform and discharge the Vice President's official duties,
functions and obligations.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $302,000 for
the Operating Expenses of the Vice President's residence.
Administrative Provisions--Executive Office of the President and Funds
Appropriated to the President
(INCLUDING TRANSFER OF FUNDS)
Section 201. The Committee includes language permitting the
transfer of not to exceed ten percent of funds between various
accounts within the Executive Office of the President, with
advance approval of the Committees on Appropriations. The
amount of an appropriation shall not be increased by more than
50 percent.
Section 202. The Committee includes language requiring the
Director of the Office of Management and Budget to include a
statement of budgetary impact with any Executive Order or
Presidential Memorandum issued or rescinded during fiscal year
2019 where the regulatory cost exceeds $100,000,000.
TITLE III--THE JUDICIARY
The funds recommended by the Committee in title III of the
accompanying bill are for the operation and maintenance of
United States Courts and include the salaries of judges,
probation and pretrial services officers, public defenders,
court clerks, law clerks, and other supporting personnel, as
well as security costs, information technology, and other
expenses of the Federal Judiciary. The Committee recommends a
total of $7,266,021,000 in discretionary funding for the
Judiciary in fiscal year 2019.
In addition to direct appropriations, the Judiciary
collects various fees and has certain multiyear funding
authorities. The Judiciary uses these non-appropriated funds to
offset its direct appropriation requirements. Consistent with
prior year practices and section 608 of this Act, the Committee
expects the Judiciary to submit a financial plan, within 60
days of enactment of this Act, allocating all sources of
available funds including appropriations, fee collections, and
carryover balances. This financial plan will be the baseline
for purposes of reprogramming notification.
Improving the physical security at buildings occupied by
the Judiciary and U.S. Marshals Service (USMS) and ensuring the
integrity of the judicial process by providing secure
facilities to conduct judicial business is a priority for the
Committee. Under the General Services Administration's (GSA)
Federal Buildings Fund appropriation, the Committee recommends
$11,500,000 for the Judiciary Capital Security program for
alterations to improve physical security in buildings occupied
by the Judiciary and USMS.
The Committee notes that a fair and efficient judicial
system depends on ensuring citizens have reasonable access to
the federal courts. The Committee encourages the Judiciary and
the General Services Administration to collaborate with local
stakeholders to facilitate continued community access to court
services. The Committee further encourages the Judiciary, when
developing its space requirements for a particular location, to
continue to consider factors including the number of available
judges, local facility conditions, security, rental and
operating costs, the number and type of proceedings handled in
that location, the location's distance to the next closest
federal court facility, and the population served in that
location.
Supreme Court of the United States
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $82,028,000
Budget request, fiscal year 2019...................... 84,359,000
Recommended in the bill............................... 84,703,000
Bill compared with:
Appropriation, fiscal year 2018................... +2,675,000
Budget request, fiscal year 2019.................. +344,000
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $84,703,000
for fiscal year 2019 for the salaries and expenses of personnel
and the cost of operating the Supreme Court, excluding the care
of the building and grounds. The Committee includes bill
language making $1,500,000 available until expended for the
purpose of making information technology investments. The
Committee directs the Court to include an annual report with
its budget justification materials, showing information
technology carryover balances and describing expenditures made
in the previous fiscal year and planned expenditures in the
budget year.
CARE OF THE BUILDING AND GROUNDS
Appropriation, fiscal year 2018....................... $16,153,000
Budget request, fiscal year 2019...................... 15,999,000
Recommended in the bill............................... 15,999,000
Bill compared with:
Appropriation, fiscal year 2018................... -154,000
Budget request, fiscal year 2019.................. - - -
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $15,999,000
for fiscal year 2019, to remain available until expended. The
Architect of the Capitol has responsibility for these functions
and supervises the use of this appropriation.
United States Court of Appeals for the Federal Circuit
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $31,291,000
Budget request, fiscal year 2019...................... 31,274,000
Recommended in the bill............................... 32,016,000
Bill compared with:
Appropriation, fiscal year 2018................... +725,000
Budget request, fiscal year 2019.................. +742,000
COMMITTEE RECOMMENDATION
The Court of Appeals for the Federal Circuit has exclusive
national jurisdiction over a large number of diverse subject
areas, including government contracts, patents, trademarks,
Federal personnel, and veterans' benefits. The Committee
recommends an appropriation of $32,016,000 for fiscal year
2019.
United States Court of International Trade
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $18,889,000
Budget request, fiscal year 2019...................... 19,070,000
Recommended in the bill............................... 19,450,000
Bill compared with:
Appropriation, fiscal year 2018................... +561,000
Budget request, fiscal year 2019.................. +380,000
COMMITTEE RECOMMENDATION
The Court of International Trade has exclusive nationwide
jurisdiction of civil actions against the United States and
certain civil actions brought by the United States, arising out
of import transactions and administration and enforcement of
the Federal customs and international trade laws. The Committee
recommends an appropriation of $19,450,000 for fiscal year
2019.
Courts of Appeals, District Courts, and Other Judicial Services
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $5,099,061,000
Budget request, fiscal year 2019...................... 5,132,543,000
Recommended in the bill............................... 5,167,961,000
Bill compared with:
Appropriation, fiscal year 2018................... +68,900,000
Budget request, fiscal year 2019.................. +35,418,000
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $5,167,961,000
for the operations of the regional courts of appeals, district
courts, bankruptcy courts, the Court of Federal Claims, and
probation and pretrial services offices.
The Committee recommends a reimbursement of $8,475,000 for
fiscal year 2019 from the Vaccine Injury Compensation Trust
Fund to cover expenses of the United States Court of Federal
Claims associated with processing cases under the National
Childhood Vaccine Injury Act of 1986.
DEFENDER SERVICES
Appropriation, fiscal year 2018....................... $1,078,713,000
Budget request, fiscal year 2019...................... 1,141,489,000
Recommended in the bill............................... 1,142,427,000
Bill compared with:
Appropriation, fiscal year 2018................... +63,714,000
Budget request, fiscal year 2019.................. +938,000
COMMITTEE RECOMMENDATION
This account provides funding for the operation of the
Federal Public Defender and Community Defender organizations
and for compensation and reimbursement of expenses of panel
attorneys appointed pursuant to the Criminal Justice Act for
representation in criminal cases. The Committee recommends an
appropriation of $1,142,427,000 for fiscal year 2019.
FEES OF JURORS AND COMMISSIONERS
Appropriation, fiscal year 2018....................... $50,944,000
Budget request, fiscal year 2019...................... 51,233,000
Recommended in the bill............................... 49,750,000
Bill compared with:
Appropriation, fiscal year 2018................... -1,194,000
Budget request, fiscal year 2019.................. -1,483,000
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $49,750,000
for payments to jurors and land commissioners for fiscal year
2019.
COURT SECURITY
(INCLUDING TRANSFER OF FUNDS)
Appropriation, fiscal year 2018....................... $586,999,000
Budget request, fiscal year 2019...................... 602,309,000
Recommended in the bill............................... 604,460,000
Bill compared with:
Appropriation, fiscal year 2018................... +17,461,000
Budget request, fiscal year 2019.................. +2,151,000
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $604,460,000
for Court Security in fiscal year 2019 to provide for necessary
expenses of security and protective services in courtrooms and
adjacent areas. The recommendation will provide for the highest
priority security needs identified by the courts and the U.S.
Marshals Service.
Administrative Office of the United States Courts
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $90,423,000
Budget request, fiscal year 2019...................... 89,867,000
Recommended in the bill............................... 92,413,000
Bill compared with:
Appropriation, fiscal year 2018................... +1,990,000
Budget request, fiscal year 2019.................. +2,546,000
COMMITTEE RECOMMENDATION
The Administrative Office of the United States Courts (AO)
provides administrative and management support to the United
States Courts, including the probation and bankruptcy systems.
It also supports the Judicial Conference of the United States
in determining Federal Judiciary policies, in developing
methods to assist the courts to conduct business efficiently
and economically, and in enhancing the use of information
technology in the courts. The Committee recommends an
appropriation of $92,413,000 for the AO for fiscal year 2019.
Federal Judicial Center
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $29,265,000
Budget request, fiscal year 2019...................... 29,064,000
Recommended in the bill............................... 29,819,000
Bill compared with:
Appropriation, fiscal year 2018................... +554,000
Budget request, fiscal year 2019.................. +755,000
COMMITTEE RECOMMENDATION
The Federal Judicial Center (FJC) improves the management
of Federal Judicial dockets and court administration through
education for judges and staff, and research, evaluation, and
planning assistance for the courts and the Judicial Conference.
The Committee recommends an appropriation of $29,819,000 for
the FJC for fiscal year 2019.
United States Sentencing Commission
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $18,699,000
Budget request, fiscal year 2019...................... 18,548,000
Recommended in the bill............................... 18,548,000
Bill compared with:
Appropriation, fiscal year 2018................... -151,000
Budget request, fiscal year 2019.................. - - -
COMMITTEE RECOMMENDATION
The purpose of the U.S. Sentencing Commission is to
establish, review, and revise sentencing guidelines, policies,
and practices for the Federal criminal justice system. The
Commission is also required to monitor the operation of the
guidelines and to identify and report necessary changes to the
Congress. The Committee recommends $18,548,000 for the
Commission for fiscal year 2019.
Administrative Provisions--The Judiciary
(INCLUDING TRANSFER OF FUNDS)
Section 301. The Committee continues language to permit
funds for salaries and expenses to be available for employment
of experts and consultant services as authorized by 5 U.S.C.
3109.
Section 302. The Committee continues language that permits
up to five percent of any appropriation made available for
fiscal year 2019 to be transferred between Judiciary
appropriations provided that no appropriation shall be
decreased by more than five percent or increased by more than
ten percent by any such transfer except in certain
circumstances. In addition, the language provides that any such
transfer shall be treated as a reprogramming of funds under
sections 604 and 608 of the accompanying bill and shall not be
available for obligation or expenditure except in compliance
with the procedures set forth in those sections.
Section 303. The Committee continues language authorizing
not to exceed $11,000 to be used for official reception and
representation expenses incurred by the Judicial Conference of
the United States.
Section 304. The Committee continues language through
fiscal year 2019 regarding the delegation of authority to the
Judiciary for contracts for repairs of less than $100,000.
Section 305. The Committee continues language to authorize
a court security pilot program.
Section 306. The Committee includes language requested by
the Judicial Conference of the United States to extend
temporary judgeships in the districts of Arizona, California
Central, Florida Southern, Kansas, Missouri Eastern, New
Mexico, North Carolina Western, and Texas Eastern.
TITLE IV--DISTRICT OF COLUMBIA
Federal Funds
FEDERAL PAYMENT FOR RESIDENT TUITION SUPPORT
Appropriation, fiscal year 2018....................... $40,000,000
Budget request, fiscal year 2019...................... - - -
Recommended in the bill............................... 30,000,000
Bill compared with:
Appropriation, fiscal year 2018................... -10,000,000
Budget request, fiscal year 2019.................. +30,000,000
The Resident Tuition Support program, also known as the
D.C. Tuition Assistance Grant (DCTAG) program, provides up to
$10,000 annually for undergraduate District students to attend
eligible four-year public universities and colleges nationwide
at in-state tuition rates. Grants of up to $2,500 per year are
available for students to attend private universities and
colleges in the D.C. metropolitan area, private Historically
Black Colleges and Universities nationwide, and public two-year
community colleges nationwide.
COMMITTEE RECOMMENDATION
The Committee recommends a Federal payment of $30,000,000
for the resident tuition support program. The District of
Columbia can contribute local funds to this program and is
authorized to prioritize applications based on income and need
if there is demand for the program beyond the available level
of Federal funds.
FEDERAL PAYMENT FOR EMERGENCY PLANNING AND SECURITY COSTS IN THE
DISTRICT OF COLUMBIA
Appropriation, fiscal year 2018....................... $13,000,000
Budget request, fiscal year 2019...................... 12,000,000
Recommended in the bill............................... 13,000,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. +1,000,000
As the seat of the national government, the District of
Columbia has a unique and significant responsibility for
protecting the property and personnel of the Federal
Government. The Federal Payment for Emergency Planning and
Security Costs is provided to help address the impact of the
Federal presence on public safety in the District of Columbia.
COMMITTEE RECOMMENDATION
The Committee recommends a Federal payment of $13,000,000
for emergency planning and security costs.
FEDERAL PAYMENT TO THE DISTRICT OF COLUMBIA COURTS
Appropriation, fiscal year 2018....................... $265,400,000
Budget request, fiscal year 2019...................... 244,939,000
Recommended in the bill............................... 288,280,000
Bill compared with:
Appropriation, fiscal year 2018................... +22,880,000
Budget request, fiscal year 2019.................. +43,341,000
Under the National Capital Revitalization and Self-
Government Improvement Act of 1997, the Federal Government is
required to finance the District of Columbia Courts. This
Federal payment to the District of Columbia Courts funds the
operations of the District of Columbia Court of Appeals,
Superior Court, the Court System, and the Capital Improvement
Program.
COMMITTEE RECOMMENDATION
The Committee recommends a Federal payment of $288,280,000
for operation of the District of Columbia Courts. The District
of Columbia Courts submitted a budget independent of the
Administration and requested a total of $349,693,000 for fiscal
year 2019.
The amount recommended by the Committee includes
$14,670,000 for the Court of Appeals; $122,770,000 for the
Superior Court; $77,016,000 for the Court System; and
$73,824,000 for capital improvements to courthouse facilities.
Of the funds for capital improvements, the Committee's
recommendation includes funds to complete the Moultrie addition
and move the various court offices into the completed building
and out of leased space as proposed in the Courts' budget
request.
FEDERAL PAYMENT FOR DEFENDER SERVICES IN DISTRICT OF COLUMBIA COURTS
(INCLUDING TRANSFER OF FUNDS)
Appropriation, fiscal year 2018....................... $49,890,000
Budget request, fiscal year 2019...................... 46,005,000
Recommended in the bill............................... 49,890,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. +3,885,000
The District of Columbia Courts appoint and compensate
attorneys to represent persons who are financially unable to
obtain such representation.
COMMITTEE RECOMMENDATION
The Committee recommends $49,890,000 for Defender Services
in the District of Columbia Courts.
FEDERAL PAYMENT TO THE COURT SERVICES AND OFFENDER SUPERVISION AGENCY
FOR THE DISTRICT OF COLUMBIA
Appropriation, fiscal year 2018....................... $244,298,000
Budget request, fiscal year 2019...................... 256,724,000
Recommended in the bill............................... 256,724,000
Bill compared with:
Appropriation, fiscal year 2018................... +12,426,000
Budget request, fiscal year 2019.................. - - -
The Court Services and Offender Supervision Agency (CSOSA)
for the District of Columbia is an independent Federal agency
created by the National Capital Revitalization and Self-
Government Improvement Act of 1997. CSOSA acquired the
operational responsibilities for the former District agencies
in charge of probation and parole, and houses the Pretrial
Services Agency (PSA) for the District of Columbia within its
framework.
COMMITTEE RECOMMENDATION
The Committee recommends a Federal payment of $256,724,000
for CSOSA. Of the amounts provided, $183,166,000 is for
Community Supervision and Sex Offender Registration and
$73,558,000 is for pretrial services. In addition to the
regular baseline activities, the Committee's recommendation
includes a total of $13,223,000 to remain available until
September 30, 2021, for the costs associated with replacement
leases and relocation of the CSOSA and pretrial services
offices.
FEDERAL PAYMENT TO THE DISTRICT OF COLUMBIA PUBLIC DEFENDER SERVICE
Appropriation, fiscal year 2018....................... $41,829,000
Budget request, fiscal year 2019...................... 45,858,000
Recommended in the bill............................... 45,858,000
Bill compared with:
Appropriation, fiscal year 2018................... +4,029,000
Budget request, fiscal year 2019.................. - - -
The Public Defender Service (PDS) for the District of
Columbia is an independent organization authorized by the
National Capital Revitalization and Self-Government Improvement
Act of 1997, whose purpose is to provide legal representation
services within the District of Columbia justice system.
COMMITTEE RECOMMENDATION
The Committee recommends a Federal payment of $45,858,000
for public defender services for the District of Columbia. In
addition to the baseline activities, the Committee's
recommendation includes $4,471,000 to remain available until
September 30, 2021, for the costs associated with replacement
leases and relocation of the PDS offices.
FEDERAL PAYMENT TO THE CRIMINAL JUSTICE COORDINATING COUNCIL
Appropriation, fiscal year 2018....................... $2,000,000
Budget request, fiscal year 2019...................... 1,900,000
Recommended in the bill............................... 2,000,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. +100,000
The Criminal Justice Coordinating Council (CJCC) provides a
forum for District of Columbia and Federal law enforcement to
identify criminal justice issues and solutions, and improve the
coordination of their efforts. In addition, the CJCC developed
and maintains the Justice Integrated Information System which
provides for the seamless sharing of information with Federal
and local law enforcement.
COMMITTEE RECOMMENDATION
The Committee recommends a Federal payment of $2,000,000 to
the Criminal Justice Coordinating Council.
FEDERAL PAYMENT FOR JUDICIAL COMMISSIONS
Appropriation, fiscal year 2018....................... $565,000
Budget request, fiscal year 2019...................... 565,000
Recommended in the bill............................... 565,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. - - -
This appropriation provides funding for the two judicial
commissions. The first is the Judicial Nomination Commission
(JNC), which recommends a panel of three candidates to the
President for each judicial vacancy in the District of Columbia
Court of Appeals and Superior Court. From the panel selected by
the JNC, the President nominates a person for each vacancy and
submits his or her name for confirmation to the Senate. The
second commission is the Commission on Judicial Disabilities
and Tenure (CJDT), which has jurisdiction over all judges of
the Court of Appeals and Superior Court to determine whether a
judge's conduct warrants disciplinary action and whether
involuntary retirement of a judge for health reasons is
warranted. In addition, the CJDT conducts evaluations of judges
seeking reappointment and judges who retire and wish to
continue service as a senior judge.
COMMITTEE RECOMMENDATION
The Committee recommends a Federal payment of $295,000 for
the Commission on Judicial Disabilities and Tenure, and
$270,000 for the Judicial Nomination Commission.
FEDERAL PAYMENT FOR SCHOOL IMPROVEMENT
Appropriation, fiscal year 2018....................... $45,000,000
Budget request, fiscal year 2019...................... 45,000,000
Recommended in the bill............................... 45,000,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. - - -
The Scholarships for Opportunity and Results (SOAR) Act, as
reauthorized in the Financial Services and General Government
Appropriations Act, 2018, authorizes funds to be evenly divided
between District of Columbia Public Schools, Public Charter
Schools and Opportunity Scholarships.
COMMITTEE RECOMMENDATION
The Committee recommends a Federal payment of $45,000,000
for school improvement. Based on the statutory funding formula,
$15,000,000 is provided for District of Columbia Public
Schools, $15,000,000 is provided for public charter schools,
and $15,000,000 is provided for opportunity scholarships.
FEDERAL PAYMENT FOR THE DISTRICT OF COLUMBIA NATIONAL GUARD
Appropriation, fiscal year 2018....................... $435,000
Budget request, fiscal year 2019...................... 435,000
Recommended in the bill............................... 435,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. - - -
The Major General David F. Wherley, Jr. District of
Columbia National Guard Retention and College Access Program
pays for the costs of a tuition assistance program for guard
members.
COMMITTEE RECOMMENDATION
The Committee recommends a Federal payment of $435,000 for
the Major General David F. Wherley, Jr. District of Columbia
National Guard Retention and College Access Program. The
Committee acknowledges the unique role of the D.C. National
Guard in addressing emergencies that may occur as a result of
the presence of the Federal Government.
FEDERAL PAYMENT FOR TESTING AND TREATMENT OF HIV/AIDS
Appropriation, fiscal year 2018....................... $5,000,000
Budget request, fiscal year 2019...................... 5,000,000
Recommended in the bill............................... 5,000,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. - - -
Currently, 2 percent of the population of the District of
Columbia has been diagnosed with HIV/AIDS. This percentage
surpasses the generally accepted definition of an epidemic,
which is 1 percent of the population. Between 2007 and 2015,
the number of new HIV infections has dropped by 72 percent.
COMMITTEE RECOMMENDATION
The Committee recommendation includes $5,000,000 for a
Federal payment for testing, education, and treatment of HIV/
AIDS.
District of Columbia Funds
The Committee continues to appropriate local funds to the
District of Columbia in accordance with and required by Article
I, Section 8, clause 17 and Article I, Section 9, clause 7 of
the Constitution. The bill provides local funds for the
operation of the District of Columbia as approved by the
District of Columbia Council and the Mayor.
The Committee includes language that provides the District
with the authority to spend their local funds in the following
fiscal year in the event of an absence of Federal
appropriations. This authority is continued in section 816 of
this Act.
TITLE V--INDEPENDENT AGENCIES
Administrative Conference of the United States
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $3,100,000
Budget request, fiscal year 2019...................... 3,100,000
Recommended in the bill............................... 3,100,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. - - -
The Administrative Conference of the United States (ACUS)
is an independent agency that studies Federal administrative
procedures and processes to recommend improvements to the
President, Congress and other agencies.
COMMITTEE RECOMMENDATION
The Committee recommends $3,100,000 for ACUS.
Bureau of Consumer Financial Protection
SALARIES AND EXPENSES
The Bureau of Consumer Financial Protection (BCFP) was
established under title X of Dodd-Frank Wall Street Reform and
Consumer Protection Act (the Act) (P.L. 111-203) as a bureau
under the Federal Reserve System. The Act consolidated
authorities previously shared by seven Federal agencies under
Federal consumer protection laws in the BCFP and provided the
Bureau with additional authorities to conduct rulemaking,
supervision, and enforcement with respect to Federal consumer
financial laws. Funding required to support the Bureau's
operations are obtained from transfers from the Federal Reserve
System.
COMMITTEE RECOMMENDATION
The Committee's recommendation limits transfers to the
Bureau from the Federal Reserve to no more than $485,000,000 in
fiscal year 2019, an amount consistent with the budget request.
Language is included in title IX which amends the Dodd-Frank
Wall Street Reform and Consumer Protection Act to bring the
expenses and operations of the Bureau under the jurisdiction of
the Committees on Appropriations of the House and the Senate,
and also sets the limitation for the fiscal year.
Small Institutions Exemption.--The Committee directs the
Bureau to report to the Committees on Appropriations of the
House and the Senate, the Committee on Financial Services of
the House, and the Committee on Banking, Housing, and Urban
Affairs of the Senate, within 120 days of enactment of this
Act, on how the Bureau has used its authority under Section
1022 in rulemakings to exempt certain classes, any plans to
revisit previous rulemakings to more carefully tailor or grant
exemptions to rule that have been especially burdensome, and
the process for the Bureau to consider exemptions to community
institutions in future rulemakings.
Small Business Data Gathering.--The Committee remains
concerned that the Bureau's data-collection and reporting
mandates, as described under section 1071, Public Law 11-203,
are widely expected to compound existing regulatory and
paperwork burdens to small businesses that are often sole
proprietors. The Bureau's discretionary authority to demand
additional data is unlimited. For example, the Bureau rule for
home mortgage disclosures has expanded data requirement for
lenders to provide at least 110 different data points they need
to collect on every mortgage loan. The Committee encourages the
Bureau to utilize cost benefit analysis and stakeholder public
comment periods in developing additional any proposals for
extensive data collection and reporting requirements. In
addition, any regulations or guidance should include an
analysis of the impact of any such regulation or guidance
particularly on small businesses and other stakeholders
including but not necessarily limited to (a) the availability
of commercial loans; (b) the affordability of commercial loans;
(c) the estimated costs to commercial loan applicants; (d) the
estimated compliance costs of collection and reporting; and (e)
the possibility of exposure of personally identifiable
financial information.
Consumer Product Safety Commission
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $126,000,000
Budget request, fiscal year 2019...................... 123,450,000
Recommended in the bill............................... 127,000,000
Bill compared with:
Appropriation, fiscal year 2018................... +1,000,000
Budget request, fiscal year 2019.................. +3,550,000
The Consumer Product Safety Act established the Consumer
Product Safety Commission (CPSC), an independent Federal
regulatory agency, to reduce the risk of injury associated with
consumer products.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $127,000,000
for the CPSC for fiscal year 2019.
Within the amount provided under this heading, $1,300,000
is for the Virginia Graeme Baker Pool and Spa Safety Act grant
program. The Committee commends the CPSC for continuing to
provide resources for the national and grassroots ``Pool
Safely'' campaign, a safety information and education program
designed to reduce child drownings and near drowning injuries
and maintain a zero fatality rate for drain entrapments. This
multifaceted initiative includes consumer and industry
education efforts, press events, partnerships, outreach, and
advertising. The committee expects the CPSC to maintain the
fiscal year 2018 levels for the ``Pool Safely'' campaign.
Voluntary Recall.--The Committee remains concerned about
proposed changes to the voluntary recall system that would
serve to negatively impact small businesses. Despite
overwhelming opposition, the Commission has failed to withdraw
its proposed rule on voluntary recalls. The Committee opposes
making unnecessary changes to a recall system that has worked
well over the past 40 years, owing to a successful partnership
between businesses and the Commission. To that end, the
Committee strongly encourages the Commission to withdraw the
proposed rule.
Public Disclosures of Information.--Section 6(b) of the
Consumer Product Safety Act (CPSA) requires CPSC to take
reasonable steps to ensure that any disclosure of information
relating to a consumer product safety incident is accurate and
fair. The Committee remains concerned that the Commission has
not withdrawn a proposed rule on section 6(b) that threatens to
undermine a successful partnership based on openness and trust
between industry and the Commission. The Committee cautions the
Commission about making changes to a process that has succeeded
in both protecting the consumer against harm and protecting
industry against inaccurate disclosures of information before
an investigation has been completed. Consequently, the
Committee strongly encourages the Commission to withdraw the
proposed rule.
ADMINISTRATIVE PROVISION--CONSUMER PRODUCT SAFETY COMMISSION
Section 501. The Committee continues language prohibiting
funds to finalize, implement, or enforce the proposed rule on
recreational off-highway vehicles until a study is completed by
the National Academy of Sciences.
Election Assistance Commission
SALARIES AND EXPENSES
(INCLUDING TRANSFER OF FUNDS)
Appropriation, fiscal year 2018....................... $10,100,000
Budget request, fiscal year 2019...................... 9,200,000
Recommended in the bill............................... 10,100,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. +900,000
The Election Assistance Commission (EAC) was established by
the Help America Vote Act of 2002 (HAVA) and is charged with
implementing provisions of that Act relating to the reform of
Federal election administration.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $10,100,000
for the salaries and expenses of the EAC, of which $1,500,000
shall be transferred to the National Institute of Standards and
Technology for election reform activities authorized under the
Help America Vote Act of 2002.
Federal Communications Commission
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $322,035,000
Budget request, fiscal year 2019...................... 333,118,000
Recommended in the bill............................... 335,118,000
Bill compared with:
Appropriation, fiscal year 2018................... +13,083,000
Budget request, fiscal year 2019.................. +2,000,000
The mission of the Federal Communications Commission (FCC)
is to implement the Communications Act of 1934 and assure the
availability of high quality communications services for all
Americans.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $335,118,000
for the salaries and expenses of the FCC, all of which is to be
derived from offsetting collections. The Committee also
includes a cap of $130,284,000 for the administration of
spectrum auctions.
Telephone Consumer Protection Act (TCPA).--Recently, the
U.S. Court of Appeals for the D.C. Circuit found that aspects
of the FCC's most recent interpretation of the Telephone
Consumer Protection Act (TCPA) in 2015 were arbitrary and
capricious. The Committee urges the FCC to clarify the aspects
of its 2015 interpretation that were struck down by the court,
including reviewing the definition of an automatic dialer and
how businesses should treat reassigned numbers.
Preventing Waste.--The Committee supports the Lifeline
program's mission of making basic communications services
affordable to low-income Americans, and shares the Commission's
objective of minimizing waste, fraud, and abuse in the program.
The Committee urges the Commission to ensure that the measures
already adopted to combat waste, fraud, and abuse, such as the
National Verifier, are swiftly and faithfully implemented.
Unmanned Aircraft Systems (UAS) Spectrum Report.--The
Committee is aware that the FCC's Technological Advisory
Council (TAC) currently is studying ``drone'' or UAS issues,
including control, monitoring, and payload delivery, and that
the National Telecommunications and Information Administration
is liaising with the FCC on this process. The TAC is actively
reviewing the various spectrum needs for drones (command and
control, payload, identification, collision avoidance),
considering both the need to make efficient use of the spectrum
and the need to avoid causing harmful interference to systems
on the ground. As part of this process, the Committee urges the
TAC to review: (1) whether small unmanned aircraft systems
operations might be permitted to operate on spectrum designated
for aviation use, on an unlicensed, shared, or exclusive basis,
for operations within the UTM system or outside of such a
system; (2) the existence of potential barriers to the use of
such spectrum; and (3) other potential spectrum options if
spectrum currently designated for aviation operations is
unusable for this purpose. Within 90 days of the TAC's report
or submission to FCC's staff, the Commission shall report to
the Committee on the results and recommendations of the TAC.
Broadcaster Relocation.--The fiscal year 2018 Omnibus (P.L.
115-141) provided $1 billion over two years to the TV
Broadcaster Relocation Fund to reimburse the service and
equipment costs of channel relocation incurred by the broadcast
industry, as well as providing financial assistance to FM
stations, TV translators, and Low Power stations. The Committee
is aware of concerns about the length of time and funds
available to broadcasters to repack stations and the Committee
intends to monitor this issue closely. Both broadcasters and
entities who purchased spectrum participated in good faith to
make the incentive auction successful. The Committee supported
the Commission's administration of the incentive auction and
expects the FCC to take into careful consideration any
participating entity's concerns.
Net Neutrality/Open Internet.--The Committee supports the
recent efforts by the FCC to scale back previous actions taken
by the Commission to regulate the internet. Imposing heavy-
handed economic regulation disincentivizes growth, particularly
in areas of the country that need infrastructure investment the
most. Government agencies should not get in the way of U.S.
innovation, investment, and expansion and the Committee
strongly supports the Commission's efforts to support broadband
expansion and consumer choice.
USF High Cost Program.--The committee appreciates the
ongoing commitment of the FCC to its multi-year initiative to
modernize and target the focus of the Universal Service Fund
(USF), and particularly its High Cost program. Nevertheless,
the outcome of these efforts can be troubling particularly with
regard to stand-alone broadband services and may conflict with
the statutory mandate of providing specific, predictable, and
sufficient support to ensure universal consumer access to
reasonably comparable services at reasonably comparable rates.
The committee strongly supports a comprehensive assessment of
what is needed to realistically right size the High Cost USF
program budget to allow it to fulfill its statutory mission of
universal service, and encourages the agency to consider
applying uniform and consistent inflationary growth mechanisms
to enable each USF program to carry out its respective
objectives.
Broadband Access.--The Committee strongly encourages the
FCC to continue to work with the Universal Service
Administrative Company (USAC) to allocate Universal Service
Funds (USF) for broadband expansion in rural and economically
disadvantaged areas in order to maximize the use of USF funds.
The Committee believes the deployment of broadband in rural and
economically disadvantaged areas is a driver of economic
development, jobs, and new education opportunities and expects
the Commission to prioritize these efforts.
Territories and Tribal Lands.--The Committee is concerned
about the disparity in access to broadband between the
territories, tribal lands, and the 50 states. The Committee
encourages the Commission to implement policies that increase
broadband access and adoption in these areas.
Transmissions of Local Television Programming.--The
bipartisan Satellite Television Extension and Localism
Reauthorization (STELAR) Act of 2014 was enacted to promote
consumers' access to television broadcast station signals that
originate in their state of residence, with an emphasis on
localism and the cultural and economic importance of local
programming. Congress's intent was to ensure Americans have
access to local broadcast and media content. The Committee
notes that many broadcast stations do not neatly conform to
Neilsen-measured designated market area boundaries, preventing
many satellite television viewers from accessing local news,
politics, sports, and emergency programming. The Committee
notes that despite the reforms made in STELAR, many communities
continue to struggle with market modification petitions. The
Committee is particularly concerned with the lack of clarity
regarding the technical and economic feasibility requirement.
In reviewing this requirement, the FCC should provide a full
analysis to ensure decisions on market modification are
comprehensively reviewed and STELAR's intent to promote
localism is retained. The Committee therefore directs the FCC
to adhere to statutory requirements and congressional intent
when taking administrative action under STELAR.
Hurricane Response.--The Committee is aware that the FCC
utilized significant agency resources to resolve communications
issues caused by Hurricanes Irma and Maria in Puerto Rico and
the U.S. Virgin Islands. The Commission created an intra-agency
task force, the Chairman of the FCC made two trips to Puerto
Rico to survey the response, the FCC deployed staff on the
ground in stricken areas, accelerated USF funding, and
expedited approval for experimental licenses.The Committee
supports the FCC's efforts to deploy scarce agency resources
and focus on the problems inherent in restoring and making more
resilient telecommunications services in affected areas. The
FCC is directed to submit a report to Congress not later than
90 days after enactment of this Act providing the status of
these efforts to re-establish communications capabilities in
Puerto Rico and the U.S. Virgin Islands in the aftermath of
these two storms. The report must include the number of FCC
resources and staff deployed to the territories immediately
after Hurricane Maria; the total amount of agency funds used by
month to restore telecommunications services in these areas;
the level of coordination with other federal agencies and local
authorities to restore telecommunications capabilities; the
level of outreach to local stakeholders and telecommunications
providers; impediments that prevented a rapid restoration of
telecommunications services; and lessons learned that will help
prepare for another disaster of such magnitude.
ADMINISTRATIVE PROVISION--FEDERAL COMMUNICATIONS COMMISSION
Section 510. The Committee continues language prohibiting
the FCC from changing rules governing the Universal Service
Fund regarding single connection or primary line restrictions.
Federal Deposit Insurance Corporation
OFFICE OF THE INSPECTOR GENERAL
Appropriation, fiscal year 2018....................... $39,136,000
Budget request, fiscal year 2019...................... 42,982,000
Recommended in the bill............................... 42,982,000
Bill compared with:
Appropriation, fiscal year 2018................... +3,846,000
Budget request, fiscal year 2019.................. - - -
Funding for the Office of the Inspector General (OIG) at
the Federal Deposit Insurance Corporation (FDIC) is provided
pursuant to 31 U.S.C. 1105(a)(25), which requires a separate
appropriation for each Office of Inspector General established
under section 11(2) of the Inspector General Act of 1978.
COMMITTEE RECOMMENDATION
The Committee recommends $42,982,000 from the Deposit
Insurance Fund and the Federal Savings and Loan Insurance
Corporation (FSLIC) Resolution Fund to finance the OIG.
Federal Election Commission
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $71,250,000
Budget request, fiscal year 2019...................... 71,250,000
Recommended in the bill............................... 71,250,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. - - -
The Federal Election Commission (FEC) administers the
disclosure of campaign finance information, enforces
limitations on contributions and expenditures, and performs
other tasks related to Federal elections.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $71,250,000
for the salaries and expenses of the FEC.
Engagement in the political process is one of the hallmarks
of our democracy. Americans are increasingly turning to social
media platforms, such as Facebook, Instagram, and Twitter to
engage in the political process. Indeed, spending on digital
political advertising reached a record $1.4 billion in the 2016
election cycle. Yet, our campaign finance laws do not require
any meaningful transparency about who is behind political
advertisements run on digital platforms. Therefore, the
Committee directs the Commission to report, within 90 days, on
how the Commission plans to address the disparity in disclosure
requirements for broadcast advertisements and online political
advertisements.
Federal Labor Relations Authority
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $26,200,000
Budget request, fiscal year 2019...................... 26,200,000
Recommended in the bill............................... 26,200,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. - - -
Established by title VII of the Civil Service Reform Act of
1978, the Federal Labor Relations Authority (FLRA) serves as a
neutral arbiter in the labor activities of non-postal Federal
employees, Departments and agencies, and Federal unions on
matters outlined in the Act, including collective bargaining
and the settlement of disputes. Establishment of the FLRA gives
full recognition to the role of the Federal Government as an
employer. Under the Foreign Service Act of 1980, the FLRA also
addresses similar issues affecting Foreign Service personnel by
providing staff support for the Foreign Service Impasse
Disputes Panel and the Foreign Service Labor Relations Board.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $26,200,000
for the FLRA for fiscal year 2019.
Federal Trade Commission
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $306,317,000
Budget request, fiscal year 2019...................... 309,700,000
Recommended in the bill............................... 311,700,000
Bill compared with:
Appropriation, fiscal year 2018................... +5,383,000
Budget request, fiscal year 2019.................. +2,000,000
The mission of the Federal Trade Commission (FTC) is to
enforce a variety of Federal antitrust and consumer protection
laws. Appropriations for both the Antitrust Division of the
Department of Justice and the Commission are partially financed
by Hart-Scott-Rodino Act pre-merger filing fees. The
Commission's appropriation is also partially offset by Do-Not-
Call registry fees.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $311,700,000
for the salaries and expenses of the FTC. The Congressional
Budget Office estimates $136,000,000 of collections from Hart-
Scott-Rodino premerger filing fees and $17,000,000 of
collections from Do-Not-Call list fees which partially offset
the appropriation requirement for this account.
Attorney and Aggregator Advertisements.--The FTC is
encouraged to collaborate with the U.S. Food and Drug
Administration as appropriate when assessing whether attorney
and aggregator advertisements directly or indirectly
misrepresent the safety of prescription drugs or medical
devices.
Content Theft.--The online theft of creative content poses
significant threats to both content creators and American
consumers. Piracy directly harms not only the 5.5 million
American workers employed by the copyright industries, but it
also presents a number of significant risks to American
consumers. A recent report found that a full third of the 589
most popular content-theft websites harbored malware, computer
viruses, and related cyber-security threats. The Committee
directs the FTC to conduct consumer education to raise consumer
awareness about how content-theft sites serve as bait to infect
devices with malicious software enabling identity theft.
General Services Administration
The Committee continues several reporting requirements for
the General Services Administration (GSA) for fiscal year 2019.
Takings and Exchanges.--Using existing statutory
authorities, GSA has been working to dispose of properties that
no longer meet the needs of Federal agencies in exchange for
assets of like value. Some of these exchanges are very complex
in nature and involve multi-year, multi-party, and multi-
billion dollar contracts. In addition, GSA also has the
statutory authority to take properties. The Committee believes
in some instances employing such authorities can result in
savings to the taxpayer when appropriately executed and wants
to be kept informed of these activities. In order to provide
increased transparency for the use and planned use of these
authorities, the Administrator is directed to report to the
Committees on Appropriations of the House and the Senate not
later than 30 days after the end of each quarter on the use of
these authorities. The report shall include a description of
all takings and exchange actions that occurred or were
considered during the most recently completed quarter of the
fiscal year, including the costs, benefits, and risks for each
action. The report shall also include the planned or considered
use of takings and exchange authorities during the remainder of
the fiscal year, including the costs, benefits, and risks of
each action.
Spending Report.--Within 50 days after the end of each
quarter, GSA shall submit spending reports to the Committees on
Appropriations of the House and the Senate. The reports shall
include actual obligations incurred and estimated obligations
for the remainder of the fiscal year for each appropriation in
the Federal Buildings Fund and regular discretionary
appropriations. The reports shall include obligations by object
class, program, project and activity.
State of the Portfolio.--Not later than 45 days after the
date of enactment of this Act, the Administrator shall submit
to the Committees on Appropriations of the House and the Senate
a report on the state of the Public Buildings Service's real
estate portfolio for fiscal year 2018. The content included in
the report shall be comparable to the tabular information
provided in past State of the Portfolio reports, including, but
not limited to, the number of leases; the number of buildings;
amount of square feet, revenue, expenses by type, and vacant
space; top customers by square feet and annual rent; completed
new construction, completed major repairs and alterations, and
disposals, in total and by region where appropriate.
Land Ports of Entry State of the Portfolio.--Within 90 days
of the date of enactment of this Act, GSA is directed to
provide the Committees on Appropriations of the House and the
Senate a report on the state of the land ports of entry
portfolio. The content of this report shall include, but shall
not be limited to, a prioritized list of new construction and
major repairs and alterations projects.
Rental Rates.--The Committee expects GSA to provide
workspace for its customers at commercially-comparable rental
rates and at a superior value to the taxpayer. The Committee
directs GSA to provide the Committees on Appropriations of the
House and the Senate a report describing GSA's methodology for
calculating rental rates for Congressional offices located in
Federal Courthouses within 45 days of the date of enactment of
this Act.
Historic Courthouses.--The Committee is concerned that the
designs of federal courthouses in historic districts are not
being drafted with the historic architecture and context in
mind. Therefore, the Committee directs the GSA to update the
Committee within 180 days of enactment on courthouse
construction projects currently underway, the status of those
designs, and whether or not they meet the historical concerns
of the surrounding areas. If they do not, the report should
include the justification for that decision. For those
courthouses that do not meet those criteria, the GSA should
immediately begin working with local authorities to remedy
those concerns.
Utilization of Previously Closed Military Installations
under Base Realignment and Closure (BRAC).--The Committee
encourages the GSA to maximize leasing opportunities at
previously closed military installations under Base Realignment
and Closure (BRAC). The Committee expects an ongoing dialogue
with GSA to assess steps taken to promote and advance such an
effort.
Cooperative Purchasing and Multiple Award Schedule (MAS)
Agreements.--The Committee is aware that federal agencies and
state and local governments are increasingly utilizing
cooperative purchasing and MAS agreements to procure goods and
services, including services rendered for construction and
renovation projects that involve federal funds. The Committee
supports efforts to ensure proper transparency and oversight of
such construction projects, which are often complex and site-
specific. The Committee directs GSA to enforce any existing
federal regulations that require independent design
professionals be consulted on new construction and renovation
projects. The Committee encourages GSA to work with state and
local governments so that cooperative purchasing and MAS
agreements that involve federal funding is in the best interest
of the government.
REAL PROPERTY ACTIVITIES
FEDERAL BUILDINGS FUND
LIMITATIONS ON AVAILABILITY OF REVENUE
(INCLUDING TRANSFERS OF FUNDS)
Limitations on Availability of Revenue:
Limitation on availability, fiscal year 2018...... $9,073,938,000
Limitation on availability, budget request, fiscal 10,131,673,000
year 2019............................................
Recommended in the bill........................... 8,634,574,000
Bill compared with:
Availability limitation, fiscal year 2018......... -439,364,000
Availability limitation, fiscal year 2019 request. -1,497,099,000
The Federal Buildings Fund (FBF) accounts for the
activities of the Public Buildings Service (PBS), which
provides space and services for Federal agencies in a
relationship similar to that of landlord and tenant. The FBF,
established in 1975, replaces direct appropriations with income
derived from rent assessments, which approximate commercial
rates for comparable space and services. The Committee makes
funds available through a process of placing limitations on
obligations from the FBF as a way of allocating funds for
various FBF activities.
COMMITTEE RECOMMENDATION
The Committee recommends a limitation on the availability
of funds of $8,634,574,000 for the FBF.
To carry out the purposes of the FBF, the revenues and
collections deposited into the FBF shall be available for
necessary expenses in the aggregate amount of $8,634,574,000 of
which: $275,900,000 is for construction, $679,934,000 is for
repairs and alterations, $5,430,345,000 is for rental of space,
and $2,253,195,000 is for building operations.
Historically, prior to obligating funding for prospectus-
level construction, alterations, or leases, the Administration
has waited for the project to be authorized through a
resolution approved by the Committee on Transportation and
Infrastructure in the House and the Committee on Environment
and Public Works in the Senate as required by title 40 of the
United States Code and in accordance with the proviso included
in the FBF appropriations limiting the obligation of funds to
prospectus-level projects approved by the authorizing
committees. The Committee supports this process and believes
that prospectus-level projects warrant a thorough review from
both the Appropriations Committee and the authorizing
committees. The Committee expects the Administration to
continue to follow this process.
CONSTRUCTION AND ACQUISITION
Limitations on Availability of Revenue:
Limitation on availability, fiscal year 2018...... $692,069,000
Limitation on availability, budget request, fiscal 1,338,387,000
year 2019............................................
Recommended in the bill........................... 275,900,000
Bill compared with:
Availability limitation, fiscal year 2018......... -416,169,000
Availability limitation, fiscal year 2019 request. -1,062,487,000
The construction and acquisition fund finances the project
cost of design, construction, and management and inspection
costs of new Federal facilities.
COMMITTEE RECOMMENDATION
The Committee recommends a limitation of $275,900,000 for
the following specific project, as proposed in the budget
request, in the amount indicated.
------------------------------------------------------------------------
State Description Amount
------------------------------------------------------------------------
CA............................ Calexico, United $275,900,000
States Land Port of
Entry.
------------------------------------------------------------------------
REPAIRS AND ALTERATIONS
Limitations on Availability of Revenue:
Limitation on availability, fiscal year 2018...... $666,335,000
Limitation on availability, budget request, fiscal 909,746,000
year 2019............................................
Recommended in the bill........................... 679,934,000
Bill compared with:
Availability limitation, fiscal year 2018......... +13,599,000
Availability limitation, fiscal year 2019 request. -229,812,000
The repairs and alterations activity funds the project cost
of design, construction, management and inspection for the
repair, alteration, and modernization of existing real estate
assets in addition to various special programs.
COMMITTEE RECOMMENDATION
The Committee recommends a limitation of $679,934,000 to
remain available until expended for repairs and alterations.
Major Repairs and Alterations.--The Committee recommends
$286,344,000 for repairs and alterations projects that exceed
the prospectus threshold. The funds are provided to address
GSA's highest priority facility needs. The Committee directs
GSA to submit a detailed plan, by project, regarding the use of
Major Repairs and Alterations funds, not later than 45 days
after enactment. GSA is directed to provide notification to the
Committee within 15 days prior to any changes in the use of
these funds.
Basic Repairs and Alterations.--The Committee recommends
$312,090,000 for non-recurring repairs and alterations projects
between $10,000 and the current prospectus threshold of
$3,095,000.
Fire and Life Safety.--The Committee recommends $30,000,000
to improve building safety, abate hazardous material, and
repair structural deficiencies. These projects include, but are
not limited to, fire alarm, sprinkler, electrical, ventilation,
heating, and elevator systems.
Judiciary Court Security Program.--The Committee recommends
$11,500,000 for the construction, acquisition, repair,
alteration, and security projects for the Judiciary as
prioritized by the Judicial Conference of the United States.
Consolidation Activities.--The Committee recommends
$40,000,000 for the cost of consolidating space. Given the
reduction in the Federal workforce and Federal agency budgets,
the Committee believes that it is prudent to reduce the GSA
building inventory, particularly with regard to the thousands
of surplus and underutilized buildings. Projects selected for
consolidation should result in reduced annual rent paid by the
agency, not exceed $10,000,000 in costs, and have an approved
prospectus. GSA is required to submit a spend plan and
explanation for each project including estimated savings to the
Committees on Appropriations of the House and the Senate before
obligating funds.
RENTAL OF SPACE
Limitations on Availability of Revenue:
Limitation on availability, fiscal year 2018...... $5,493,768,000
Limitation on availability, budget request, fiscal 5,430,345,000
year 2019............................................
Recommended in the bill........................... 5,430,345,000
Bill compared with:
Availability limitation, fiscal year 2018......... -63,423,000
Availability limitation, fiscal year 2019 request. - - -
The rental of space program funds lease payments made to
privately-owned buildings, temporary space for Federal
employees during major repair and alteration projects, and
relocations from Federal buildings due to forced moves and
relocations as a result of health and safety conditions.
COMMITTEE RECOMMENDATION
The Committee recommends a limitation of $5,430,345,000 for
rental of space. The Committee expects GSA to reduce the amount
of leased space in its inventory at a faster pace.
BUILDING OPERATIONS
Limitations on Availability of Revenue:
Limitation on availability, fiscal year 2018...... $2,221,766,000
Limitation on availability, budget request, fiscal 2,253,195,000
year 2019............................................
Recommended in the bill........................... 2,248,395,000
Bill compared with:
Availability limitation, fiscal year 2018......... +26,629,000
Availability limitation, fiscal year 2019 request. -4,800,000
The building operations account funds services that Federal
agencies in GSA-owned buildings and occasionally in GSA-leased
buildings, when not provided by the lessor, directly benefit
from such as building security, cleaning, utilities, window
washing, snow removal, pest control, and maintenance of
heating, air conditioning, ventilating, plumbing, sewage,
electrical, elevator, escalator, and fire protection systems.
In addition, this account funds all the personnel and
administrative expenses for carrying out construction and
acquisition, repair and alteration, and leasing activities.
COMMITTEE RECOMMENDATION
The Committee recommends a limitation of $2,248,395,000 for
Building Operations and Maintenance. Within this amount,
$1,126,014,000 is for building services and $1,122,381,000 is
for salaries and expenses. Up to five percent of the funds may
be transferred between these activities upon the advance
notification to the Committees on Appropriations of the House
and the Senate. Not later than 60 days after the date of
enactment of this Act, the Administrator shall submit a spend
plan, by region, regarding the use of these funds to the
Committees on Appropriations of the House and Senate.
GENERAL ACTIVITIES
GOVERNMENT-WIDE POLICY
Appropriation, fiscal year 2018....................... $53,499,000
Budget request, fiscal year 2019...................... 65,835,000
Recommended in the bill............................... 60,000,000
Bill compared with:
Appropriation, fiscal year 2018................... +6,501,000
Budget request, fiscal year 2019.................. -5,835,000
The Office of Government-Wide Policy provides Federal
agencies with guidelines, best practices, and performance
measures for complying with all the laws, regulations, and
executive orders related to: acquisition and procurement,
personal and real property management, travel and
transportation management, electronic customer service
delivery, and use of Federal advisory committees.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $60,000,000
for Government-wide Policy.
Procurement through Commercial e-Commerce Portals.--The
program to procure commercial products through commercial e-
commerce portals is a significant undertaking by GSA that has
the potential to change how the government procures commercial
off-the-shelf items. The Committee intends to closely monitor
GSA's implementation of the program with regards to an e-
commerce portal provider serving as a supplier on an e-commerce
portal it administers, to ensure that any such arrangement does
not result in curtailing competition or reducing participation
by the portal's other participating suppliers.
Building Design.--The Committee recognizes the importance
of mitigating bird deaths due to collisions, and encourages the
incorporation of materials and design features for each public
building constructed, acquired, or altered by GSA to have at
least 90% of the facade material from ground level to 40 feet
not be composed of glass or employ one or more of the
following: (a) elements mounted outside the glass that
eliminate reflectivity; (b) UV patterned glass; (c) patterned
glass which restricts horizontal spaces to less than 2 high or
vertical spaces less than 4 wide; and (d) opaque, etched,
stained, frosted glass. The Committee recognizes that with the
increase in local and state bird friendly building ordinances
and guidelines in several states that there is an increasing
need for a uniform minimum federal standard.
Digital Workspace.--Committee recognizes that digital
workspaces can increase user productivity, enhance
cybersecurity & management, while also allowing for workforce
flexibility, and urges the General Services Administration to
leverage the use of digital workspaces as it moves towards
shared services and the modernization of its information
technology.
OPERATING EXPENSES
Appropriation, fiscal year 2018....................... $45,645,000
Budget request, fiscal year 2019...................... 49,440,000
Recommended in the bill............................... 49,440,000
Bill compared with:
Appropriation, fiscal year 2018................... +3,795,000
Budget request, fiscal year 2019.................. - - -
This account provides appropriations for activities that
are not feasible for a user fee arrangement. Included under
this heading are personal property utilization and donation
activities of the Federal Acquisition Service; real property
utilization and disposal activities of the Public Buildings
Service; select management and administration activities
including support of government-wide emergency management
activities; and top-level, agency-wide management communication
activities.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $49,440,000
for operating expenses. Within the amount provided under this
heading, $26,890,000 is for Real and Personal Property
Management and Disposal, and $22,550,000 is for the Office of
the Administrator.
Federal Real Property Profile.--The Committee understands
that the GSA Federal Real Property Profile (FRPP) has been
making progress on the use of geospatial technology and the
transparency of the data. However, the Committee is aware of
the problem in gathering Federal real property data created by
the exemption language for Federal lands found in Executive
Order 13227. This exemption denies GSA the ability of
collecting meaningful data from large landholding agencies
within the Department of the Interior and the Department of
Agriculture. The Committee is also aware that Section 7 of the
Executive Order provides flexibility for the Interior and
Agriculture Departments to still contribute their data into the
FRPP. The Committee expects GSA to increase the transparency,
accuracy and accountability with both of these Departments
given the expansive amount of data which could be added to the
FRPP.
CIVILIAN BOARD OF CONTRACT APPEALS
Appropriation, fiscal year 2018....................... $8,795,000
Budget request, fiscal year 2019...................... 9,301,000
Recommended in the bill............................... 9,301,000
Bill compared with:
Appropriation, fiscal year 2018................... +506,000
Budget request, fiscal year 2019.................. - - -
This account provides appropriations for the Civilian Board
of Contract Appeals (CBCA). The CBCA is charged with
facilitating the prompt, efficient, and inexpensive resolution
of disputes through the use of alternate dispute resolution.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $9,301,000 for
the Civilian Board of Contract Appeals.
OFFICE OF INSPECTOR GENERAL
Appropriation, fiscal year 2018....................... $65,000,000
Budget request, fiscal year 2019...................... 67,000,000
Recommended in the bill............................... 67,000,000
Bill compared with:
Appropriation, fiscal year 2018................... +2,000,000
Budget request, fiscal year 2019.................. - - -
This appropriation provides agency-wide audit and
investigative functions to identify and correct GSA management
and administrative deficiencies that create conditions for
existing or potential instances of fraud, waste, and
mismanagement. The audit function provides internal and
contract audits. Internal audits review and evaluate all facets
of GSA operations and programs, test internal control systems,
and develop information to improve operating efficiencies and
enhance customer services. Contract audits provide professional
advice to GSA contracting officials on accounting and financial
matters relative to the negotiation, award, administration,
repricing, and settlement of contracts. The investigative
function provides for the detection and investigation of
improper and illegal activities involving GSA programs,
personnel, and operations.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $67,000,000
for the Office of Inspector General.
ALLOWANCES AND OFFICE STAFF FOR FORMER PRESIDENTS
Appropriation, fiscal year 2018....................... $4,754,000
Budget request, fiscal year 2019...................... 4,796,000
Recommended in the bill............................... 4,796,000
Bill compared with:
Appropriation, fiscal year 2018................... +42,000
Budget request, fiscal year 2019.................. - - -
This appropriation provides pensions, office staff, and
related expenses for former Presidents Jimmy Carter, George
H.W. Bush, William Clinton, and George W. Bush, and Barack
Obama.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $4,796,000 for
allowances and office staff for former Presidents.
FEDERAL CITIZEN SERVICES FUND
(INCLUDING TRANSFERS OF FUNDS)
Appropriation, fiscal year 2018....................... $50,000,000
Budget request, fiscal year 2019...................... 58,400,000
Recommended in the bill............................... 55,000,000
Bill compared with:
Appropriation, fiscal year 2018................... +5,000,000
Budget request, fiscal year 2019.................. -3,400,000
The Federal Citizen Services Fund (the Fund) appropriation
provides for the salaries and expenses of GSA's Office of
Citizen Services and Innovative Technologies (OCSIT). The Fund
enables citizen access and engagement with government through
an array of operational programs and direct citizen facing
services. The Fund provides electronic or other methods of
access to and understanding of Federal information, benefits,
and services to citizens, businesses, local governments, and
the media.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $55,000,000
for the Federal Citizen Services Fund. The Committee expects
the funds provided for these activities, combined with
efficiency gains and resource prioritization will result in
increased delivery of information to the public and in the ease
of transaction with the government.
All the income collected by the Office of Citizen Services
and Innovative Technologies (OCSIT) in the form of
reimbursements from Federal agencies, user fees for
publications ordered by the public, payments from private
entities for services rendered, and gifts from the public is
available to the OCSIT without regard to fiscal year
limitations, but is subject to an annual limitation of
$100,000,000. Any revenues accruing in excess of this amount
shall remain in the fund and are not available for expenditure
except as authorized in Appropriation Acts.
TECHNOLOGY MODERNIZATION FUND
Appropriation, fiscal year 2018...................... $100,000,000
Budget request, fiscal year 2019...................... 210,000,000
Recommended in the bill............................... 150,000,000
Bill compared with:
Appropriation, fiscal year 2018................... +50,000,000
Budget request, fiscal year 2019.................. -60,000,000
This account provides appropriations for the purposes of
carrying out actions pursuant to the recommendations of the
Technology Modernization Fund Board focusing on legacy
information technology systems and infrastructure.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $150,000,000
for the Technology Modernization Fund (TMF). The Committee
encourages GSA and the TMF Board established by the Modernizing
Government Technology Act to prioritize and fund those projects
that have the most significant impact on mission enhancement
and that most effectively modernize citizen-facing services,
including updating public facing websites, modernizing forms
and digitizing government processes.
ASSET PROCEEDS AND SPACE MANAGEMENT FUND
Appropriation, fiscal year 2018....................... $5,000,000
Budget request, fiscal year 2019...................... 31,000,000
Recommended in the bill............................... 31,000,000
Bill compared with:
Appropriation, fiscal year 2018................... +26,000,000
Budget request, fiscal year 2019.................. - - -
This account provides appropriations for the purposes of
carrying out actions pursuant to the recommendations of the
Public Buildings Reform Board focusing on civilian real
property.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $31,000,000
for the Asset Proceeds and Space Management Fund.
ENVIRONMENTAL REVIEW IMPROVEMENT FUND
Appropriation, fiscal year 2018....................... $1,000,000
Budget request, fiscal year 2019...................... 6,070,000
Recommended in the bill............................... 6,070,000
Bill compared with:
Appropriation, fiscal year 2018................... +5,070,000
Budget request, fiscal year 2019.................. - - -
This account provides appropriations for the authorized
activities of the Environmental Review Improvement Fund and the
Federal Permitting Improvement Steering Council. The Council
will lead ongoing government-wide efforts to modernize the
Federal permitting and review process for major infrastructure
projects and work with Federal agency partners to implement and
oversee adherence to the statutory requirements set forth in
the Federal Assets Sale and Transfer Act of 2016.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $6,070,000 for
the Environmental Review Improvement Fund.
Administrative Provisions--General Services Administration
(INCLUDING TRANSFER OF FUNDS)
Section 520. The Committee continues the provision
providing authority for the use of funds for the hire of motor
vehicles.
Section 521. The Committee continues the provision
providing that funds made available for activities of the
Federal Buildings Fund may be transferred between
appropriations with advance approval of the Committees on
Appropriations of the House and the Senate.
Section 522. The Committee continues the provision
requiring funds proposed for developing courthouse construction
requests to meet appropriate standards and the priorities of
the Judicial Conference.
Section 523. The Committee continues the provision
providing that no funds may be used to increase the amount of
occupiable square feet, provide cleaning services, security
enhancements, or any other service usually provided, to any
agency which does not pay the assessed rent.
Section 524. The Committee continues the provision that
permits GSA to pay small claims (up to $250,000) made against
the Federal Government.
Section 525. The Committee continues the provision
requiring the Administrator to ensure that the delineated area
of procurement for all lease agreements is identical to the
delineated area included in the prospectus unless prior notice
is given to the committees of jurisdiction.
Section 526. The Committee continues the provision
requiring a spend plan for certain accounts and programs.
Section 527. The Committee includes a new provision
directing the Administrator of the General Services
Administration to submit a report on the implementation of
Section 846 of the National Defense Authorization Act for
fiscal year 2018.
Harry S Truman Scholarship Foundation
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $1,000,000
Budget request, fiscal year 2019...................... - - -
Recommended in the bill............................... 1,000,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. +1,000,000
The Harry S Truman Scholarship Foundation is an independent
agency established by Congress in 1975 (Public Law 93-642) to
encourage exceptional college students to pursue careers in
public service through the Truman Scholarship program. The
Truman Scholarship is a merit-based award available to college
juniors who plan to pursue careers in Government or elsewhere
in public service.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $1,000,000 for
the Harry S Truman Scholarship Foundation.
Merit Systems Protection Board
SALARIES AND EXPENSES
(INCLUDING TRANSFER OF FUNDS)
Appropriation, fiscal year 2018....................... $46,835,000
Budget request, fiscal year 2019...................... 44,490,000
Recommended in the bill............................... 46,835,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. +2,345,000
The Merit Systems Protection Board (MSPB) is an
independent, quasi-judicial agency established to protect the
civil service merit system. The MSPB adjudicates appeals
primarily involving personnel actions, certain Federal employee
complaints, and retirement benefits issues. The MSPB reports to
the President whether merit systems are sufficiently free of
prohibited employment practices.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $44,490,000
for the MSPB. The recommendation includes a transfer of
$2,345,000 from the Civil Service Retirement and Disability
Fund.
National Archives and Records Administration
OPERATING EXPENSES
Appropriation, fiscal year 2018....................... $384,911,000
Budget request, fiscal year 2019...................... 365,105,000
Recommended in the bill............................... 372,400,000
Bill compared with:
Appropriation, fiscal year 2018................... -12,511,000
Budget request, fiscal year 2019.................. +7,295,000
This appropriation provides National Archives and Records
Administration (NARA) with funds for its basic operations for
management of the Federal Government's archives and records,
services to the public, operation of Presidential libraries,
review for declassification of classified security information,
and includes funding for the Electronic Records Archives which
preserves, stores, and manages digital Federal records for
archival purposes, ensuring long-term access.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $372,400,000
for the Operating Expenses of NARA.
Records Management.--The Committee encourages NARA to
leverage private sector records management capabilities, where
private vendors have invested their own capital to develop
facilities that are compliant with NARA's stringent building
standards. The Committee encourages NARA to identify NARA
records management storage facilities that can be cost
effectively managed by private records management companies,
especially those housing temporary Federal records.
OFFICE OF INSPECTOR GENERAL
Appropriation, fiscal year 2018....................... $4,801,000
Budget request, fiscal year 2019...................... 4,241,000
Recommended in the bill............................... 4,823,000
Bill compared with:
Appropriation, fiscal year 2018................... +22,000
Budget request, fiscal year 2019.................. +582,000
The Office of Inspector General (OIG) provides audits and
investigations and serves as an independent, internal advocate
to promote economy, efficiency, and effectiveness within NARA.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $4,823,000 for
the OIG for fiscal year 2019.
REPAIRS AND RESTORATION
Appropriation, fiscal year 2018....................... $7,500,000
Budget request, fiscal year 2019...................... 7,500,000
Recommended in the bill............................... 7,500,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. - - -
This appropriation provides for the repair, alteration, and
improvement of Archives facilities and Presidential libraries
nationwide. It enables the NARA to maintain its facilities in
proper condition for visitors, researchers, and employees, and
also maintain the structural integrity of the buildings.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $7,500,000 for
repairs and restoration.
NATIONAL HISTORICAL PUBLICATIONS AND RECORDS COMMISSION GRANTS PROGRAM
Appropriation, fiscal year 2018....................... $6,000,000
Budget request, fiscal year 2019...................... - - -
Recommended in the bill............................... 6,000,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. +6,000,000
The National Historical Publications and Records Commission
(NHPRC) program provides for grants to preserve and publish
records that document American history. Administered within the
National Archives and Records Administration, the NHPRC helps
State, local, and private institutions preserve non-Federal
records, helps publish the papers of major figures in American
history, and helps archivists and records managers improve
their techniques, training, and ability to serve a range of
information users.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $6,000,000 for
the NHPRC.
National Credit Union Administration
COMMUNITY DEVELOPMENT REVOLVING LOAN FUND
Appropriation, fiscal year 2018....................... $2,000,000
Budget request, fiscal year 2019...................... - - -
Recommended in the bill............................... 2,000,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. +2,000,000
The Community Development Revolving Loan Fund Program
(CDRLF) was established in 1979 to assist officially designated
``low-income'' credit unions in providing basic financial
services to low-income communities. Low-interest loans and
deposits are made available to assist these credit unions.
Loans or deposits are normally repaid in five years, although
shorter repayment periods may be considered. Technical
assistance grants are also available to low-income credit
unions. Earnings generated from the CDRLF are available to fund
technical assistance grants in addition to funds provided for
specifically in appropriations acts. Grants are available for
improving operations as well as addressing safety and soundness
issues.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $2,000,000 for
the National Credit Union Administration's CDRLF for technical
assistance grants.
Supporting Community Development Credit Unions.--Within 180
days of enactment, the Committee directs the Administration to
issue a report on its current efforts to support and advance
Community Development Credit Unions (CDCUs) in low income
communities.
Office of Government Ethics
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $16,439,000
Budget request, fiscal year 2019...................... 16,294,000
Recommended in the bill............................... 17,019,000
Bill compared with:
Appropriation, fiscal year 2018................... +580,000
Budget request, fiscal year 2019.................. +725,000
The Office of Government Ethics (OGE) established by the
Ethics in Government Act of 1978, partners with other executive
branch Departments and agencies to foster high ethical
standards. The OGE issues and monitors rules regulations, and
memoranda pertaining to the prevention and resolution of
conflicts of interest, post-employment restrictions, standards
of conduct, and financial disclosure for executive branch
employees. The OGE is also responsible for creating and running
an electronic financial disclosure system under the Stop
Trading on Congressional Knowledge (STOCK) Act.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $17,019,000
for the OGE.
Office of Personnel Management
SALARIES AND EXPENSES
(INCLUDING TRANSFER OF TRUST FUNDS)
Appropriation, fiscal year 2018....................... $260,755,000
Budget request, fiscal year 2019...................... 265,655,000
Recommended in the bill............................... 265,655,000
Bill compared with:
Appropriation, fiscal year 2018................... +4,900,000
Budget request, fiscal year 2019.................. - - -
The Office of Personnel Management (OPM) is the Federal
agency responsible for management of Federal human resources
policy and oversight of the merit civil service system. OPM
provides a government-wide policy framework for personnel
matters, advises and assists agencies (often on a reimbursable
basis), and ensures that agency operations are consistent with
requirements of law, with emphasis on such issues as veterans
preference. OPM oversees examining of applicants for
employment; issues regulations and policies on hiring,
classification and pay, training, investigations; and many
other aspects of personnel management, and operates a
reimbursable training program for the Federal Government's
managers and executives. OPM is also responsible for
administering the retirement, health benefits and life
insurance programs affecting most Federal employees, retired
Federal employees, and their survivors.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $132,172,000
for the General Fund. The Committee also recommends
$133,483,000 for administrative expenses, to be transferred
from the appropriate trust funds.
OPM has struggled for decades to process Federal retirees'
pension and disability claims quickly and accurately. As a
result, tens of thousands of new retirees wait months to
receive their complete annuities-some wait more than a year-and
in the meantime they may be constrained by reduced interim
pensions. The Committee expects OPM to continue to make
retirement processing and disability processing a priority and
move to a fully-automated electronic filing system. The
Committee believes that the backlog and delays in retirement
processing are unacceptable and directs OPM to continue to
provide the Committees on Appropriations of the House and the
Senate with monthly reports on its progress in addressing the
backlog in claims.
OPM Organizational Changes.--The Committee would like to
remind OPM of their obligation to notify the Committee on
Appropriations of the House and the Senate of any
reorganizations, restructurings, new programs or elimination of
programs as described in Title VI and VII of this Act. These
include changes that could impact the National Bureau of
Investigations and the Human Solutions program.
Critical Functions.--The recent security breaches, focus on
system upgrades, and efforts to transition work from the
National Background Investigations Bureau to the Department of
Defense should not detract OPM from fulfilling its critical
functions such as recruiting, retaining, and developing a
Federal workforce to serve the American people. OPM serves the
Federal workforce by directing human resources and employee
management services, and administering retirement benefits,
managing healthcare and insurance programs, overseeing merit-
based and inclusive hiring in to the civil service, and
providing a secure employment process. The Committee reminds
OPM's senior management to not lose sight of its mission as it
responds to critical IT challenges.
Recruitment.--The Committee is concerned with the length of
time it often takes the Federal Government to hire qualified
employees and directs OPM to continue to find ways to reduce
barriers to federal employment and reduce delays in the hiring
process. Rigid rules along with long delays in the hiring and
interview process discourage top candidates from applying for
or accepting Federal positions. Specifically, the Committee
encourages OPM to seek input from hiring managers on what
challenges they face and what improvements could be made to
make the federal hiring process more efficient and effective.
The Committee directs the OPM to report to the Committees on
Appropriations of the House and the Senate no later than 90
days after the enactment of this Act on a plan to reduce
barriers to Federal employment, reduce delays in the hiring
process, and how it intends to improve the overall federal
recruitment and hiring process.
As part of OPM's mission to recruit and hire the most
talented and diverse Federal workforce, the Committee
encourages Federal agencies to increase recruitment efforts
within the United States and the territories and at Hispanic
Serving Institutions and Historically Black Colleges and
Universities.
Federal Pay Opportunities.--The Committee is concerned that
federal agencies are not taking advantage the special hiring
authorities available. The Director of OPM, together with the
Chief Human Capital Officer Council, should track government-
wide data to establish a baseline and analyze the extent to
which the seven Title 5 special payment authorities are
effective in improving employee recruitment and retention, and
determine what potential changes may be needed to improve the
seven authorities' effectiveness.
Federal Telework Programs.--The Committee supports cost
savings and productivity improvements from well-managed
telework programs in the federal workplace. The Committee
therefore urges the federal sector to continue to track
successes, compile best practices, and expand upon telework
programs where appropriate.
Office of Inspector General
SALARIES AND EXPENSES
(INCLUDING TRANSFER OF TRUST FUNDS)
Appropriation, fiscal year 2018....................... $30,000,000
Budget request, fiscal year 2019...................... 30,265,000
Recommended in the bill............................... 30,265,000
Bill compared with:
Appropriation, fiscal year 2018................... +265,000
Budget request, fiscal year 2019.................. - - -
This appropriation provides for the Office of Inspector
General's (OIG) agency-wide audit, investigative, evaluation,
and inspection functions, which identify management and
administrative deficiencies, fraud, waste and mismanagement.
The OIG performs internal agency audits and insurance audits,
and offers contract audit services. Internal audits review and
evaluate all facets of agency operations, including financial
statements. Evaluation and inspection services provide detailed
technical evaluations of agency operations. Insurance audits
review the operations of health and life insurance carriers,
health care providers, and insurance subscribers. Contract
auditors provide professional advice to agency contracting
officials on accounting and financial matters regarding the
negotiation, award, administration, repricing, and settlement
of contracts. The investigative function provides for the
detection and investigation of improper and illegal activities
involving programs, personnel, and operations.
COMMITTEE RECOMMENDATION
The Committee recommends a general fund appropriation of
$5,000,000 for the OIG. In addition, the recommendation
provides $25,265,000 from appropriate trust funds.
OPM Organization.--Of particular interest to the Committee
is the transfer of background investigations from OPM's
National Background Investigations Bureau (NBIB) to the
Department of Defense. Additionally, the Committee is concerned
with the Administration's consideration to transfer the Human
Resources Solutions program to the General Services
Administration (GSA) as well as the Administration's proposal
to administer workforce performance budgets through GSA. The
Committee encourages the Inspector General to keep a pulse on
these initiatives and include updates on these initiatives in
their reports to Congress.
Office of Special Counsel
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $26,535,000
Budget request, fiscal year 2019...................... 26,252,000
Recommended in the bill............................... 26,252,000
Bill compared with:
Appropriation, fiscal year 2018................... -283,000
Budget request, fiscal year 2019.................. - - -
The Office of Special Counsel (OSC): (1) investigates
Federal employee allegations of prohibited personnel practices
(including reprisal for whistleblowing) and, when appropriate,
prosecutes before the Merit Systems Protection Board; (2)
provides a channel for whistleblowing by Federal employees; and
(3) enforces the Hatch Act. The Office may transmit
whistleblower allegations to the agency head concerned and
require an agency investigation and a report to the Congress
and the President when appropriate. Additionally, the Office
enforces the civilian employment and reemployment rights of
military service members under the Uniformed Services
Employment and Re-employment Rights Act.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $26,252,000
for the OSC.
Postal Regulatory Commission
SALARIES AND EXPENSES
(INCLUDING TRANSFER OF FUNDS)
Appropriation, fiscal year 2018....................... $15,200,000
Budget request, fiscal year 2019...................... 15,100,000
Recommended in the bill............................... 15,200,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. +100,000
The Commission establishes and maintains the U.S. Postal
Service's ratemaking systems, measures service and performance,
ensures accountability, and has enforcement mechanisms,
including the authority to issue subpoenas.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation, out of the
Postal Fund, of $15,200,000 for the Postal Regulatory
Commission (Commission).
Privacy and Civil Liberties Oversight Board
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $8,000,000
Budget request, fiscal year 2019...................... 5,000,000
Recommended in the bill............................... 5,000,000
Bill compared with:
Appropriation, fiscal year 2018................... -3,000,000
Budget request, fiscal year 2019.................. - - -
The Privacy and Civil Liberties Oversight Board (the Board)
is an independent agency within the Executive Branch whose
purpose is to (1) analyze and review actions the Executive
Branch takes to protect the nation from terrorism, ensuring
that the need for such actions is balanced with the need to
protect privacy and civil liberties; and (2) ensure that
liberty concerns are appropriately considered in the
development and implementation of laws, regulations, and
policies related to efforts to protect the nation against
terrorism. The Board consists of 4 part-time members and full-
time chairman.
COMMITTEE RECOMMENDATION
The Committee recommends $5,000,000 for the Board.
Public Buildings Reform Board
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $5,000,000
Budget request, fiscal year 2019...................... 2,000,000
Recommended in the bill............................... 2,000,000
Bill compared with:
Appropriation, fiscal year 2018................... -3,000,000
Budget request, fiscal year 2019.................. - - -
The Public Buildings Reform Board was created under the
Federal Assets Sale and Transfer Act of 2016 to identify
opportunities for the Government to significantly reduce its
inventory of civilian real property and reduce cost to the
Government.
COMMITTEE RECOMMENDATION
The Committee recommends $2,000,000 for the Board.
Securities and Exchange Commission
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $1,896,507,000
Budget request, fiscal year 2019...................... 1,699,052,000
Recommended in the bill............................... 1,695,491,000
Bill compared with:
Appropriation, fiscal year 2018................... -201,016,000
Budget request, fiscal year 2019.................. -3,561,000
The primary mission of the Securities and Exchange
Commission (SEC) is to protect investors, maintain the
integrity of the securities markets, and assure adequate
information on the capital markets is made available to market
participants and policy makers. This includes monitoring the
rapid evolution of the capital markets, ensuring full
disclosure of all appropriate financial information, regulating
the Nation's securities markets, and preventing fraud and
malpractice in the securities and financial markets.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $1,695,491,000
for SEC salaries and expenses. The Committee's recommendation
includes $37,189,000 for costs associated with relocation under
a replacement lease for the Commission's New York Regional
Office. The Committee expects the Commission to work closely
with the General Services Administration (GSA) and to keep the
Committee informed of progress on the replacement lease.
Business Development Corporations (BDC) Modernization.--
Funding from BDCs has become more important for small
businesses as the regulatory overreaction to the financial
crisis has restricted bank and other traditional financing
options for these companies. The Committee instructs the SEC to
modernize the business development company regulatory regime
consistent with the Small Business Credit Availability Act as
enacted in Public Law 115-141.
Acquired Fund Fee and Expense Rule.--The Committee
recommends the SEC use its existing authorities to make the
necessary regulatory or guidance changes to limit the adverse
impacts of the Acquired Fund Fee and Expense Rule (AFFE) on
Business Development Corporations (BDC). The SEC issued its
acquired fund fees and expenses (AFFE) rule in 2006. In the
adopting release, the SEC stated that it ``does not believe
that the [AFFE] amendments will have an adverse impact of
capital formation.'' This statement was proven to be inaccurate
as a result of actions taken in 2014 by index sponsors such as
S&P and Russell to exclude BDCs from their indices. Because
index funds no longer invest in BDCs, there has been a decline
in market depth and liquidity for BDC shares, reduced
institutional ownership in BDCs and less independent third-
party research coverage. Each of these items has negatively
impacted retail investors owning BDC shares. The SEC has had
full authority since 2006 to address these unintended, harmful
consequences.
Cross-Border Harmonization.--The Committee strongly
encourages the SEC to work with the Commodity Futures Trading
Commission (CFTC) to harmonize the definition of a ``US
person'' and exempt non-US regulated funds from any definition.
Currently, the definition of a ``US person'' differs between
the two agencies, which can result in operational challenges
and potentially different regulatory treatment of entities
transacting in otherwise similar instruments. Global firms face
significant costs and burdens if the SEC's and CFTC's
regulatory approaches produce different outcomes regarding
whether an entity or transaction would be subject to the Dodd-
Frank Act. Derivatives transactions for swaps and security-
based swaps that are traded typically by the same trading desk
or desks should not be analyzed differently. The Committee
urges these agencies to work together in an expeditious manner
toward a consistent definition of ``US person.''
Proxy Advisor Reform.--The Committee is aware of the undue
influence of proxy advisory firms--their duopoly status,
conflicts of interest, opaque procedures and methodologies, and
recommendations that may be based on provable, factual
inaccuracies. The SEC Chairman has spoken publicly about the
need to address these issues and possibility of revisiting the
``Proxy Plumbing'' concept release. The Committee strongly
encourages the SEC to elevate this issue on the Commission's
agenda to ensure the needs of investors and the capital markets
are being met.
Searchable Data.--The Committee encourages the SEC to
continue its efforts to implement consistent and searchable
open data standards for information filed and submitted by
publicly-traded companies and financial firms. The Committee
continues to recommend that financial regulatory agencies
across the U.S. Government take similar steps to update
reporting standards commensurate with currently available
technology.
Selective Service System
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $22,900,000
Budget request, fiscal year 2019...................... 26,400,000
Recommended in the bill............................... 26,000,000
Bill compared with:
Appropriation, fiscal year 2018................... +3,100,000
Budget request, fiscal year 2019.................. -400,000
The Selective Service System was established by the
Selective Service Act of 1948. The mission of the System is to
be prepared to supply manpower to the Armed Forces adequate to
ensure the security of the United States during a time of
national emergency. Since 1973, the Armed Forces have relied on
volunteers to fill military manpower requirements, but
selective service registration was reinstituted in July 1980.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $26,000,000
for the Selective Service System.
Small Business Administration
The Small Business Administration (SBA) assists small
businesses through programs including loans, grants, and
contracting preferences. These programs maintain and strengthen
an economy that depends on small businesses for 60 to 80
percent of job creation. SBA programs also serve disadvantaged
populations so that these small business enterprises may
overcome economic and social obstacles to success.
The recommendation provides a total of $737,078,000 for the
SBA for fiscal year 2019. Detailed guidance for the SBA
appropriations accounts is presented below.
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $268,500,000
Budget request, fiscal year 2019...................... 265,000,000
Recommended in the bill............................... 268,500,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. +3,500
COMMITTEE RECOMMENDATION
The Committee recommends $268,500,000 for the salaries and
expenses of the SBA.
SBIC Program Licensing.--The Committee is aware of the
often slow pace of licensing within the Small Business
Investment Company (SBIC) program. The Committee would like to
see an expedited and streamline licensing process for known,
repeat Small Business Investment Companies that have the same
management teams and a proven track record in the SBIC program.
A fast track process for repeat licenses should be completed no
longer than 60-90 days after an application is submitted to the
SBA, which will allow SBA to properly redirect their licensing
resources to more first time funds. The SBA should improve
their ``green light letter'' so that it clearly outlines the
needed benchmarks for license approval. The SBA should not
reduce the amount or type of SBIC program data it has reported
for years and should make that data available no less than ten
business days after the end of the quarter.
Loan and Lender Monitoring System.--The Committee finds
that the Loan and Lender Monitoring System (L/LMS) is a vital
component of the SBA s technical capability to provide
oversight of its largest lending programs, the 7(a) and 504
loan programs. The Committee is disappointed that SBA allowed
this important oversight tool to lapse briefly in February and
March 2016. SBA is directed to continue its use of the Loan and
Lender Monitoring System to ensure that lenders are employing
sound financial risk management techniques to manage and
monitor risk within their SBA loan portfolios. SBA is directed
to continue to maintain the current capability and capacity of
the L/LMS system, and to strongly consider ways to upgrade the
system to improve lender oversight. The SBA should look at the
impact of consolidating the current exceptions into one with an
employee cap of 1,500 and consider revising the methodology for
determining employee size for NAICS Codes to use a 36-month
rolling average computation.
National Environmental Policy Act Guidance.--The Committee
encourages the SBA to consider revised guidance on the National
Environmental Policy Act-related provisions for Concentrated
Animal Feeding Operations loans which were last updated in SOP
90 57. This guidance should provide clarity for farmers and
small businesses around application requirements pertaining to
environmental review requirements.
ENTREPRENEURIAL DEVELOPMENT PROGRAMS
Appropriation, fiscal year 2018....................... $247,100,000
Budget request, fiscal year 2019...................... 192,450,000
Recommended in the bill............................... 251,900,000
Bill compared with:
Appropriation, fiscal year 2018................... +4,800,000
Budget request, fiscal year 2019.................. +59,450,000
The SBA's Entrepreneurial Development Programs support non-
credit business assistance to entrepreneurs. The appropriation
includes funding for a network of resource partners located
throughout the United States that provide training, counseling,
and technical assistance to small business entrepreneurs.
COMMITTEE RECOMMENDATION
The Committee recommendations for Entrepreneurial
Development Programs, by program, are displayed in the
following table:
ENTREPRENEURIAL DEVELOPMENT PROGRAMS
[In thousands of dollars]
7(j) Technical Assistance Program (Contracting 2,800
Assistance)..........................................
Entrepreneurship Education............................ 6,000
Growth Accelerators................................... 1,000
HUBZone Program....................................... 3,000
Microloan Technical Assistance........................ 31,600
National Women's Business Council..................... 1,500
Native American Outreach.............................. 2,000
PRIME Technical Assistance............................ 5,000
Regional Innovation Clusters.......................... 5,000
SCORE................................................. 11,700
Small Business Development Centers (SBDC)............. 132,600
State Trade & Export Promotion (STEP)................. 18,000
Veterans Outreach*.................................... 12,300
Women's Business Centers (WBC)........................ 18,400
*Veterans Outreach includes funding for: Boots to Business, Veterans
Business Outreach Centers (VBOC), Veteran Women Igniting the Spirit of
Entrepreneurship (V-Wise), Entrepreneurship Bootcamp for Veterans with
Disabilities (EBV), and Boots to Business reboot.
The SBA shall not reduce these non-credit programs from the
amounts specified above and the SBA shall not merge any of the
non-credit programs without advance written approval from the
Committee. The Committee strongly supports the development
programs listed in the table above and will carefully monitor
SBA support of these programs.
Women's Business Centers.--The Committee notes the absence
of WBCs serving many of the U.S. territories and other U.S.
insular areas, and recommends that the SBA consider including
these areas in WBC services.
Native American Outreach.--The Committee directs that
Native American Outreach activities be managed by an Assistant
Administrator of the Office of Native American Affairs, or
through SBA 7(j) management and technical assistance, to
continue organizing multi-agency workshops and Native supplier
initiative events around the country, and facilitating Native
contractors participation in the SBA's 8(a) Business
development program, HUB Zone, women business, veteran and
service disabled veteran business, and other small business
contracting program.
OFFICE OF INSPECTOR GENERAL
Appropriation, fiscal year 2018....................... $19,900,000
Budget request, fiscal year 2019...................... 21,900,000
Recommended in the bill............................... 21,900,000
Bill compared with:
Appropriation, fiscal year 2018................... +2,000
Budget request, fiscal year 2019.................. - - -
COMMITTEE RECOMMENDATION
The Committee recommends $21,900,000 for the Office of
Inspector General of the SBA.
Disaster Funding.--In fiscal year 2018, the SBA, Disaster
Loan Program received supplemental funding in the amount of
$1.65 billion to primarily assist with disaster efforts related
to hurricanes Harvey, Irma, and Maria. The committee is pleased
with SBA's expeditious response to Hurricane Harvey which
included having 33 staff for two Disaster Relief Centers up and
running within nine days after Hurricane Harvey. The Committee
looks forward to the SBA IG's evaluation of SBA's loan
processing and issuance of the supplemental funds provided to
aid disaster victims.
Oversight.--The Committee is concerned about the quality of
lender oversight activities at SBA, particularly considering
the magnitude of SBA's loan portfolio, and notes that SBA's
Office of Inspector General continues to identify weaknesses in
SBAs lender oversight process. The Committee agrees with SBA's
Inspector General recommendations and supports efforts to
strengthen the Office of Credit Monitoring's ability to conduct
strong oversight of SBA loan portfolios and the lenders that
participate in order to reinforce general program soundness and
manage overall risk.
OFFICE OF ADVOCACY
Appropriation, fiscal year 2018....................... $9,120,000
Budget request, fiscal year 2019...................... 9,120,000
Recommended in the bill............................... 9,120,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. - - -
COMMITTEE RECOMMENDATION
The Committee recommends $9,120,000 for the Office of
Advocacy of the SBA. The Committee supports the Office's
mission to reduce regulatory burdens that Federal policies
impose on small businesses and to maximize the benefits small
businesses receive from the government.
BUSINESS LOANS PROGRAM ACCOUNT
(INCLUDING TRANSFER OF FUNDS)
Appropriation, fiscal year 2018....................... $156,220,000
Budget request, fiscal year 2019...................... 4,000,000
Recommended in the bill............................... 159,150,000
Bill compared with:
Appropriation, fiscal year 2018................... +2,930,000
Budget request, fiscal year 2019.................. +155,150,000
The SBA Business Loans Program serves as an important
source of capital for America's small businesses. The
recommendation supports the 7(a) Business Loan Program at a
level of $30 billion, the 504 certified development company
program at a level of $7.5 billion, Small Business Investment
Company (SBIC) debentures, and the Secondary Market Guarantee
Program.
COMMITTEE RECOMMENDATION
The Committee recommends a total of $159,150,000 for the
Business Loans Program Account. Of the amount appropriated,
$155,150,000 is for administrative expenses related to Business
Loan Programs. The amount provided for administrative expenses
may be transferred to and merged with the appropriation for SBA
salaries and expenses to cover the common overhead expenses
associated with business loans. Funding is included to fully
support the Microloan program.
DISASTER LOANS PROGRAM ACCOUNT
(INCLUDING TRANSFERS OF FUNDS)
Appropriation, fiscal year 2018....................... - - -
Budget request, fiscal year 2019...................... 186,458,000
Recommended in the bill............................... 31,308,000
Bill compared with:
Appropriation, fiscal year 2018................... +31,308,000
Budget request, fiscal year 2019.................. -155,150,000
COMMITTEE RECOMMENDATION
The Committee recommends a total of $31,308,000 for
Disaster Loan Program administrative expenses which may be
transferred and merged with Salaries and Expenses. The
Committee provides $1,000,000 for the Office of Inspector
General for audits and reviews of the disaster loans program.
The Committee directs the SBA to continue providing updates
on available resources for the disaster loans program on a
monthly basis.
Pre-mitigation activities within the Disaster Loan
Program.--The Committee recognizes the benefit of limiting the
financial exposure of the SBA and reducing the claims payments
from the National Flood Insurance Program. Therefore the
Committee urges the SBA to coordinate with Federal Emergency
Management Agency (FEMA) to expand the SBA Disaster Loan
Program to allow applicants in areas of high flood or natural
disaster risk to utilize loans for pre-disaster mitigation
projects that adhere to FEMA's standards of mitigation
activities that significantly reduce a structure's long-term
flood risk.
ADMINISTRATIVE PROVISIONS--SMALL BUSINESS ADMINISTRATION
(INCLUDING RESCISSION AND TRANSFER OF FUNDS)
Section 530. The Committee continues a provision for the
SBA authorizing transfers of up to five percent of any SBA
appropriation to other appropriations, provided that transfers
do not increase an appropriation by more than 10 percent. The
provision also requires that transfers be treated as a
reprogramming of funds.
Section 531. The Committee includes a provision rescinding
unobligated balances under the Certified Development Company
Program.
Section 532. The Committee includes a provision repealing
the Expedited Disaster Assistance Loan Program.
United States Postal Service
PAYMENT TO THE POSTAL SERVICE FUND
Appropriation, fiscal year 2018....................... $58,118,000
Budget request, fiscal year 2019...................... 55,235,000
Recommended in the bill............................... 58,118,000
Bill compared with:
Appropriation, fiscal year 2018................... - - -
Budget request, fiscal year 2019.................. +2,883,000
The United States Postal Service (USPS) is funded almost
entirely by Postal ratepayers rather than taxpayers. Funds
provided to the Postal Service in the Payment to the Postal
Service Fund include appropriations for revenue forgone,
including providing free mail for the blind, and for overseas
absentee voting.
COMMITTEE RECOMMENDATION
The Committee recommends appropriations totaling
$58,118,000 for Payment to the Postal Service Fund. The
recommendation funds free mail for the blind and overseas
voting and reconciliation of prior year cost adjustment.
Rural Post Offices.--The Committee believes that the United
States postal facility network is an asset of significant
value. The closure of post offices in rural communities creates
an economic burden for people in the United States that depend
on the Postal Service for communication and package services.
In addition to typical postal services, post offices are part
of the identity of rural communities and provide a significant
social value. The closure process of post offices does not
adequately take into account community input.
Notification to Congress.--Title 39 of the U.S. Code
requires the Postal Service to provide the public with notice
prior to closing or consolidating a post office. The Committee
understands that it is the Postal Service's policy to inform
Member of Congress' district and Washington, D.C. offices when
the public receives notice. The Committee directs the Postal
Service to keep Members of Congress informed of Postal Service
activities impacting their constituents and expects the Postal
Service to ensure that Members of Congress are appropriately
informed simultaneously or prior to all public notices.
Accessibility for Disabled Individuals.--The Committee
notes that under the Architectural Barriers Act, the Postal
Service is required to meet accessibility requirements for
disabled individuals.
Multinational Species Conservation Fund Semi-postal
Stamp.--The Committee strongly supports the Multinational
Species Conservation Fund Semi-postal Stamp and is aware that
the legislative requirement that the stamp be sold by the U.S.
Postal Service expires at the end of FY 2018. The Committee
understands that more than 30 million copies of the original
printing of the stamp remain. As the law permits the U.S.
Postal Service to continue to sell the stamp and it can be done
at no additional cost to the taxpayer, the Committee directs
the U.S. Postal Service to continue to offer the stamp for sale
to the public through FY 2020.
Delivery Complaints.--The Committee is concerned with the
prevalence of reports of irregular delivery, mail delivered
during late hours, and other service complaints. The Committee
directs the U.S. Postal Service to report to the Committees on
Appropriations of the House and the Senate within 180 days of
enactment of this Act on the adequacy of current personnel
levels, the number of City Carrier Assistants currently
employed compared to previous years, and the consolidation of
distribution centers. The report shall be accompanied by a
comprehensive plan to better provide timely and consistent mail
delivery service.
Mail Theft.--The Committee is aware that significant mail
theft from U.S. Postal Service (USPS) cluster box units
continues to be a problem across the country, notably in the
City of Bakersfield and in Kern County, CA. The Committee
understands USPS has taken action to replace or upgrade certain
mailbox units, however, mail theft continues to occur. Out of
existing funds, the Committee directs USPS and the United
States Postal Inspection Service to aggressively investigate
issues concerning increased mail theft in cluster box units in
affected communities and adopt a plan to address these crimes.
USPS is encouraged to consider upgrading existing mailbox
infrastructure, enhancing security at cluster mailboxes and
other USPS delivery sites, and replacing keys. Given the
importance of protecting U.S. mail, the Committee directs the
USPS to report to Congress every six months on its plan and
related actions to address this issue.
Zip Code Reassignment.--The Committee understands that in
response to increasing requests for zip codes and place name
changes, the Postal Service has developed a uniform review
process. In addition to typical postal purposes, zip codes,
city identity and boundaries play an integral role in a host of
important areas, such as tax base, federal and state funding,
qualifications for federal programs, election ballots, and
school systems. The Committee encourages the Postal Service to
ensure that decisions regarding reassigning of zip codes take
into account all available information and community input.
OFFICE OF INSPECTOR GENERAL
SALARIES AND EXPENSES
(INCLUDING TRANSFER OF FUNDS)
Appropriation, fiscal year 2018....................... $245,000,000
Budget request, fiscal year 2019...................... 234,650,000
Recommended in the bill............................... 250,000,000
Bill compared with:
Appropriation, fiscal year 2018................... +5,000,000
Budget request, fiscal year 2019.................. +15,350,000
The Office of Inspector General (OIG) conducts audits,
reviews and investigations, and keeps Congress informed on the
efficiency and economy of United States Postal Service (USPS)
programs and operations.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $250,000,000
for the OIG. The Committee provides funding above the budget
request in order for the OIG to continue their aggressive drug
interdiction efforts.
United States Tax Court
SALARIES AND EXPENSES
Appropriation, fiscal year 2018....................... $50,740,000
Budget request, fiscal year 2019...................... 55,563,000
Recommended in the bill............................... 51,515,000
Bill compared with:
Appropriation, fiscal year 2018................... +775,000
Budget request, fiscal year 2019.................. -4,048,000
The U.S. Tax Court adjudicates controversies involving
deficiencies in income, estate, and gift taxes. The Court also
has jurisdiction to determine deficiencies in certain excise
taxes, to issue declaratory judgments in the areas of
qualifications of retirement plans and exemptions of charitable
organizations, and to decide certain cases involving disclosure
of tax information by the Commissioner of the Internal Revenue
Service.
COMMITTEE RECOMMENDATION
The Committee recommends an appropriation of $51,515,000
for the U.S. Tax Court.
TITLE VI--GENERAL PROVISIONS--THIS ACT
Section 601. The Committee continues the provision
prohibiting pay and other expenses for non-Federal parties in
regulatory or adjudicatory proceedings funded in this Act.
Section 602. The Committee continues the provision
prohibiting obligations beyond the current fiscal year and
prohibits transfers of funds unless expressly so provided
herein.
Section 603. The Committee continues the provision limiting
procurement contracts for consulting service expenditures to
contracts that are matters of public record and available for
public inspection.
Section 604. The Committee continues the provision
prohibiting transfer of funds in this Act without express
authority.
Section 605. The Committee continues the provision
prohibiting the use of funds to engage in activities that would
prohibit the enforcement of section 307 of the 1930 Tariff Act.
Section 606. The Committee continues the provision
concerning compliance with the Buy American Act.
Section 607. The Committee continues the provision
prohibiting the use of funds by any person or entity convicted
of violating the Buy American Act.
Section 608. The Committee continues the provision
specifying reprogramming procedures. The provision requires
that agencies or entities funded by the Act notify the
Committee and obtain prior approval from the Committee for any
reprogramming of funds that: (1) creates a new program; (2)
eliminates a program, project, or activity; (3) increases funds
or personnel for any program, project, or activity for which
funds have been denied or restricted by the Congress; (4)
proposes to use funds directed for a specific activity by
either the House or Senate Committees on Appropriations for a
different purpose; (5) augments existing programs, projects, or
activities in excess of $5,000,000 or 10 percent, whichever is
less; (6) reduces existing programs, projects, or activities by
$5,000,000 or 10 percent, whichever is less; or (7) reorganizes
offices, programs, or activities. The provision directs
agencies funded by this Act to consult with the Committee prior
to any significant reorganization. The provision also directs
the agencies funded by this Act to submit operating plans for
the Committee's review within 60 days of the bill's enactment.
Section 609. The Committee continues the provision
providing that fifty percent of unobligated balances may remain
available through September 30, 2020, for certain purposes.
Section 610. The Committee continues the provision
prohibiting funding for the Executive Office of the President
to request either a Federal Bureau of Investigation background
investigation or Internal Revenue Service determination with
respect to section 501(a) of the Internal Revenue Code of 1986,
except with the express consent of the individual involved in
an investigation or in extraordinary circumstances involving
national security.
Section 611. The Committee continues the provision
regarding cost accounting standards for contracts under the
Federal Employee Health Benefits Program.
Section 612. The Committee continues the provision
regarding non-foreign area cost-of-living allowances.
Section 613. The Committee continues the provision
prohibiting the expenditure of funds for abortion under the
Federal Employees Health Benefits Program.
Section 614. The Committee continues the provision making
exceptions to the preceding provision where the life of the
mother is in danger or the pregnancy is a result of an act of
rape or incest.
Section 615. The Committee continues the provision carried
annually since 2004 waiving restrictions on the purchase of
non-domestic articles, materials, and supplies in the case of
acquisition of information technology by the Federal
Government.
Section 616. The Committee continues the provision
prohibiting officers or employees of any regulatory agency or
commission funded by this Act from accepting travel payments or
reimbursements from a person or entity regulated by such agency
or commission.
Section 617. The Committee continues the provision
permitting the Securities and Exchange Commission and
Commodities Futures Trading Commission to fund a joint advisory
committee to advise on emerging regulatory issues,
notwithstanding section 708 of this Act.
Section 618. The Committee continues the provision
requiring certain agencies in this Act to consult with the
General Services Administration before seeking new office space
or making alterations to existing office space.
Section 619. The Committee continues language providing for
several appropriated mandatory accounts. These are accounts
where authorizing language requires the payment of funds. The
Congressional Budget Office estimates the cost for the
following programs addressed in this provision: $450,000 for
Compensation of the President including $50,000 for expenses,
$190,000,000 for the Judicial Retirement Funds (Judicial
Officers' Retirement Fund, Judicial Survivors' Annuities Fund,
and the United States Court of Federal Claims Judges'
Retirement Fund), $13,519,000,000 for the Government Payment
for Annuitants, Employee Health Benefits, $49,000,000 for the
Government Payment for Annuitants, Employee Life Insurance, and
$8,060,000,000 for the Payment to the Civil Service Retirement
and Disability Fund.
Section 620. The Committee includes language prohibiting
funds for the Federal Trade Commission to complete or publish
the study, recommendations, or report prepared by the
Interagency Working Group on Food Marketed to Children.
Section 621. The Committee includes language to prevent
conflicts of interest by prohibiting contractor security
clearance related background investigators from undertaking
final Federal reviews of their own work.
Section 622. The Committee includes language requiring that
the head of any executive branch agency ensure that the Chief
Information Officer (CIO) has authority to participate in the
budget planning process and approval of the information
technology (IT) budget.
Section 623. The Committee continues the provision
prohibiting funds in contravention of the Federal Records Act.
Section 624. The Committee includes language prohibiting
agencies from requiring Internet Service Providers (ISPs) to
disclose electronic communications information in a manner that
violates the Fourth Amendment.
Section 625. The Committee continues language relating to
Universal Service Fund payments for wireless providers.
Section 626. The Committee includes language prohibiting
funds to be used to deny inspectors general access to records.
Section 627. The Committee continues the provision
prohibiting any funds made available in this Act from being
used to establish a computer network unless such network blocks
the viewing, downloading, and exchanging of pornography.
Section 628. The Committee includes language prohibiting
funds for the Securities and Exchange Commission to require the
disclosure of political contributions to tax exempt
organizations, or dues paid to trade associations.
Section 629. The Committee includes a new provision that
provides the Archivist of the United State with the authority
to force action on records that are past their disposition date
or currently unscheduled and do not have a disposition date,
and to unilaterally dispose of archival records in NARA's legal
custody.
Section 630. The Committee includes new language that
prohibits funds for enforcement of the Federal Elections
Commission's prior approval requirement for corporate member
trade association PACs.
Section 631. The Committee includes language prohibiting
funds to pay for an abortion or the administrative expenses in
connection with a multi-State qualified health plan offered
under a contract under section 1334 of the Patient Protection
and Affordable Care Act which provides any benefits or coverage
for abortions, except for endangerment of the life of the
mother, rape or incest.
Section 632. The Committee includes language prohibiting
funds to the Securities and Exchange Commission for the purpose
of requiring single ballot proxies.
TITLE VII--GENERAL PROVISIONS--GOVERNMENT-WIDE
Departments, Agencies, and Corporations
(INCLUDING TRANSFER OF FUNDS)
Section 701. The Committee continues the provision
requiring agencies to administer a policy designed to ensure
that all of its workplaces are free from the illegal use of
controlled substances.
Section 702. The Committee continues the provision
establishing price limitations on vehicles to be purchased by
the Federal Government with an exemption for the purchase of
electric, plug-in hybrid electric, and hydrogen fuel cell
vehicles.
Section 703. The Committee continues the provision allowing
funds made available to agencies for travel to also be used for
quarters allowances and cost-of-living allowances.
Section 704. The Committee continues the provision
prohibiting the employment of noncitizens with certain
exceptions.
Section 705. The Committee continues the provision giving
agencies the authority to pay General Services Administration
bills for space renovation and other services.
Section 706. The Committee continues, with modification,
the provision allowing agencies to finance the costs of
recycling and waste prevention programs with proceeds from the
sale of materials recovered through such programs.
Section 707. The Committee continues the provision
providing that funds made available to corporations and
agencies subject to 31 U.S.C. 91 may pay rent and other service
costs in the District of Columbia.
Section 708. The Committee continues the provision
prohibiting interagency financing of groups absent prior
statutory approval.
Section 709. The Committee continues the provision
prohibiting the use of funds for enforcing regulations
disapproved in accordance with the applicable law of the U.S.
Section 710. The Committee continues the provision limiting
the amount of funds that can be used for redecoration of
offices under certain circumstances.
Section 711. The Committee continues the provision to allow
for interagency funding of national security and emergency
telecommunications initiatives.
Section 712. The Committee continues the provision
requiring agencies to certify that a Schedule C appointment was
not created solely or primarily to detail the employee to the
White House.
Section 713. The Committee continues the provision
prohibiting the payment of any employee who prohibits,
threatens or prevents another employee from communicating with
Congress.
Section 714. The Committee continues the provision
prohibiting Federal training not directly related to the
performance of official duties.
Section 715. The Committee continues the provision
prohibiting, other than for normal and recognized executive-
legislative relationships, propaganda, publicity and lobbying
by executive agency personnel in support or defeat of
legislative initiatives.
Section 716. The Committee continues the provision
prohibiting any Federal agency from disclosing an employee's
home address to any labor organization, absent employee
authorization or court order.
Section 717. The Committee continues the provision
prohibiting funds to be used to provide non-public information
such as mailing, telephone, or electronic mailing lists to any
person or organization outside the government without the
approval of the Committees on Appropriations.
Section 718. The Committee continues the provision
prohibiting the use of funds for propaganda and publicity
purposes not authorized by Congress.
Section 719. The Committee continues the provision
directing agency employees to use official time in an honest
effort to perform official duties.
Section 720. The Committee continues the provision
authorizing the use of funds to finance an appropriate share of
the Federal Accounting Standards Advisory Board.
Section 721. The Committee continues the provision
authorizing the transfer of funds to the General Services
Administration to finance an appropriate share of various
government-wide boards and councils and for Federal Government
Priority Goals under certain conditions.
Section 722. The Committee continues the provision that
permits breastfeeding in a Federal building or on Federal
property if the woman and child are authorized to be there.
Section 723. The Committee continues the provision that
permits interagency funding of the National Science and
Technology Council and provides for a report on the budget and
resources of the National Science and Technology Council.
Section 724. The Committee continues the provision
requiring documents involving the distribution of Federal funds
to indicate the agency providing the funds and the amount
provided.
Section 725. The Committee continues the provision
prohibiting the use of funds to monitor personal access or use
of Internet sites or to collect, review, or obtain any
personally identifiable information relating to access to or
use of an Internet site.
Section 726. The Committee continues a provision requiring
health plans participating in the Federal Employees Health
Benefits Program to provide contraceptive coverage and provides
exemptions to certain religious plans.
Section 727. The Committee continues language supporting
strict adherence to anti-doping activities.
Section 728. The Committee continues a provision allowing
funds for official travel to be used by departments and
agencies, if consistent with OMB Circular A-126, to participate
in the fractional aircraft ownership pilot program.
Section 729. The Committee continues the provision that
restricts the use of funds for Federal law enforcement training
facilities.
Section 730. The Committee continues the provision that
prohibits Executive Branch agencies from creating prepackaged
news stories that are broadcast or distributed in the United
States unless the story includes a clear notification within
the text or audio of such news story that the prepackaged news
story was prepared or funded by that executive branch agency.
This provision confirms the opinion of the Government
Accountability Office dated February 17, 2005 (B-304272).
Section 731. The Committee continues the provision
prohibiting use of funds in contravention of section 552a of
title 5, United States Code (the Privacy Act) and regulations
implementing that section.
Section 732. The Committee continues the provision
prohibiting funds from being used for any Federal Government
contract with any foreign incorporated entity which is treated
as an inverted domestic corporation.
Section 733. The Committee continues the provision
requiring agencies to pay a fee to the Office of Personnel
Management for processing retirement of employees who separate
under Voluntary Early Retirement Authority or who receive
Voluntary Separation Incentive payments.
Section 734. The Committee includes language prohibiting
funds to require any entity submitting an offer for a Federal
contract or participating in an acquisition to disclose
political contributions.
Section 735. The Committee continues the provision
prohibiting funds for the painting of a portrait of an employee
of the Federal Government, including the President, the Vice
President, a Member of Congress, the head of an executive
branch agency, or the head of an office of the legislative
branch.
Section 736. The Committee continues the provision limiting
the pay increases of certain prevailing rate employees.
Section 737. The Committee continues a provision, with
modification, requiring agencies to submit reports to
Inspectors General concerning expenditures for agency
conferences.
Section 738. The Committee continues a provision
prohibiting funds to be used to increase, eliminate, or reduce
funding for a program or project unless such change is made
pursuant to reprogramming or transfer provisions.
Section 739. The Committee continues a provision
prohibiting agencies from using funds to implement regulations
changing the competitive areas under reductions-in-force for
Federal employees.
Section 740. The Committee continues the provision ensuring
contractors are not prevented from reporting waste, fraud, or
abuse by signing confidentiality agreements that would prohibit
such disclosure.
Section 741. The Committee continues the provision
prohibiting the expenditure of funds for the implementation of
certain nondisclosure agreements unless certain provisions are
included in the agreements.
Section 742. The Committee continues the provision
prohibiting funds to any corporation with certain unpaid
Federal tax liabilities unless an agency has considered
suspension or debarment of the corporation and made a
determination that further action is not necessary to protect
the interests of the Government.
Section 743. The Committee continues the provision
prohibiting funds to any corporation that was convicted of a
felony criminal violation within the preceding 24 months unless
an agency has considered suspension or debarment of the
corporation and made a determination that further action is not
necessary to protect the interests of the Government.
Section 744. The Committee continues a provision requiring
the Bureau of Consumer Financial Protection to notify the
Committees on Appropriations of the House and the Senate, the
Committee on Financial Services of the House, and the Committee
on Banking, Housing, and Urban Affairs of the Senate of
requests for a transfer of funds from the Board of Governors of
the Federal Reserve System as well as post any such
notifications on the Bureau's website.
Section 745. The Committee continues a provision addressing
possible technical scorekeeping differences for fiscal year
2019 between the Office of Management and Budget and the
Congressional Budget Office.
Section 746. The Committee modifies a provision on the
conditions for implementing Executive Order 13690.
Section 747. The Committee includes a new provision
prohibiting funds to implement, administer, or enforce a rule
issued pursuant to section 13(p) of the Securities Exchange Act
of 1934.
Section 748. The Committee continues the provision that
prohibits the use of funds to begin or announce a study or a
public-private competition regarding the conversion to
contractor performance of any function performed by civilian
Federal employees pursuant to Office of Management and Budget
Circular A-76 or any other administrative regulation,
directive, or policy.
Section 749. The Committee continues the provision
concerning the non-application of these general provisions to
title IV and to title VIII.
TITLE VIII--GENERAL PROVISIONS--DISTRICT OF COLUMBIA
(INCLUDING TRANSFERS OF FUNDS)
Section 801. The Committee continues language that
appropriates funds to refund overpayments of taxes collected
and to pay settlements and judgments against the District of
Columbia government.
Section 802. The Committee continues language prohibiting
the use of Federal funds for publicity or propaganda purposes.
Section 803. The Committee continues language establishing
reprogramming procedures for Federal and local funds.
Section 804. The Committee continues language prohibiting
the use of Federal funds to provide salaries or other costs
associated with the offices of United States Senator or
Representative.
Section 805. The Committee continues language limiting the
use of official vehicles to official duties.
Section 806. The Committee continues language prohibiting
the use of Federal funds for any petition drive or civil action
which seeks to require Congress to provide for voting
representation in Congress for the District of Columbia.
Section 807. The Committee includes language prohibiting
the use of Federal funds for needle exchange programs, and
programs that support supervised consumption facilities that
allow the use of substances on Schedule I of the Controlled
Substances Act.
Section 808. The Committee continues language providing for
a ``conscience clause'' on legislation that pertains to
contraceptive coverage by health insurance plans.
Section 809. The Committee continues language prohibiting
the use of Federal funds to legalize or reduce penalties
associated with the possession, use, or distribution of any
schedule I substance under the Controlled Substances Act or any
tetrahydrocannabinols derivative.
Language is also included prohibiting local and Federal
funds to legalize or reduce penalties associated with the
possession, use, or distribution of any schedule I substance
under the Controlled Substance Act or any tetrahydrocannabinols
derivative for recreational use.
Section 810. The Committee continues the provision that
prohibits the use of funds for any abortion except in the cases
of rape or incest or if necessary to save the life of the
mother.
Section 811. The Committee continues language requiring the
Chief Financial Officer (CFO) to submit a revised operating
budget for all agencies in the D.C. government, no later than
30 calendar days after the enactment of this Act that realigns
budgeted data with anticipated actual expenditures.
Section 812. The Committee continues language requiring the
CFO to submit a revised operating budget for D.C. Public
Schools, no later than 30 calendar days after the enactment of
this Act that realigns school budgets to actual school
enrollment.
Section 813. The Committee continues language allowing the
transfer of local funds and capital and enterprise funds.
Section 814. The Committee continues language prohibiting
the obligation of Federal funds beyond the current fiscal year
and transfers of funds unless expressly provided herein.
Section 815. The Committee continues language providing
that not to exceed 50 percent of unobligated balances from
Federal appropriations for salaries and expenses may remain
available for certain purposes. This provision will apply to
the District of Columbia Courts, the Court Services and
Offender Supervision Agency, and the District of Columbia
Public Defender Service.
Section 816. The Committee continues language appropriating
local funds during fiscal year 2020 if there is an absence of a
continuing resolution or regular appropriation for the District
of Columbia. Funds are provided under the same authorities and
conditions and in the same manner and extent as provided for in
fiscal year 2019.
Section 817. The Committee includes a new provision
prohibiting funds to enact any act, resolution, rule,
regulation, guidance, or other law to permit any person to
carry out any activity to which subsection (a) of section 3 of
the Assisted Suicide Funding Restriction Act of 1997 applies,
and repeals the District of Columbia Death With Dignity Act of
2016.
Section 818. The Committee includes a new provision
prohibiting funds in this Act from being used to carry out the
Reproductive Health Non-Discrimination Amendment Act of 2018
(D.C. Law 20-261).
Section 819. The Committee includes a provision to repeal
the Local Budget Autonomy Amendment Act of 2012.
Section 820. The Committee continues language limiting
references to ``this Act'' as referring to only this title and
title IV.
TITLE IX--FINANCIAL REFORM
The bill includes a number of financial services reforms
that have been passed by the House of Representatives in the
115th Congress.
TITLE X--EMAIL PRIVACY ACT
VOLUNTARY DISCLOSURE CORRECTIONS
The bill includes H.R. 387, the Email Privacy Act, which
was passed by the House of Representatives on February 6, 2017.
TITLE XI--AMATEUR RADIO PARITY ACT
The bill includes H.R. 555, the Amateur Radio Parity Act of
2017, which was passed by the House of Representatives on
January 23, 2017.
TITLE XII--ADDITIONAL GENERAL PROVISIONS
Section 1201. The Committee includes a provision
establishing a ``Spending Reduction Account'' in the bill.
HOUSE OF REPRESENTATIVES REPORT REQUIREMENTS
The following items are included in accordance with various
requirements of the Rules of the House of Representatives:
Statement of General Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the following is a statement of
general performance goals and objectives for which this measure
authorizes funding:
The Committee on Appropriations considers program
performance, including a program's success in developing and
attaining outcome-related goals and objectives, in developing
funding recommendations.
Rescission of Funds
Pursuant to clause 3(f)(2) of rule XIII of the Rules of the
House of Representatives, the following table is submitted
describing the rescissions recommended in the accompanying
bill:
Small Business Administration......................... $50,000,000
Transfer of Funds
Pursuant to clause 3(f)(2) of rule XIII of the Rules of the
House of Representatives, the following is submitted describing
the transfer of funds provided in the accompanying bill:
UNDER TITLE I--DEPARTMENT OF THE TREASURY
Section 101 allows the transfer of five percent of any
appropriation made available to the Internal Revenue Service
(IRS) to any other IRS appropriation, subject to prior
congressional approval.
Section 113 authorizes the transfers of funds to IRS to the
Taxpayer Services, Enforcement, or Operations Support, to
assist with carrying out Tax Reform initiatives.
Section 115 authorizes transfers, up to two percent,
between Departmental Offices, Office of Inspector General,
Special Inspector General for Troubled Asset Relief Program,
Financial Crimes Enforcement Network, Bureau of the Fiscal
Service, and Alcohol and Tobacco Tax and Trade Bureau
appropriations under certain circumstances.
Section 116 authorizes transfers, up to two percent,
between the IRS and the Treasury Inspector General for Tax
Administration under certain circumstances.
Section 118 authorizes the transfer of funds from the
Bureau of the Fiscal Service to the Debt Collection Fund as
necessary to cover the cost of debt collection.
UNDER TITLE II--EXECUTIVE OFFICE OF THE PRESIDENT
Language is included under Federal Drug Control Programs,
High Intensity Drug Trafficking Areas Program, which allows for
the transfer of funds to Federal departments or agencies and
State and local entities.
Language is included under Other Federal Drug Control
Programs, allowing the transfers of funds to other Federal
departments and agencies to carry out activities.
Language is included under Information Technology Oversight
and Reform, allowing the transfer of funds to other agencies to
carry out projects.
Language is included under the Official Residence of the
Vice President, Operating Expenses, allowing the transfer of
funds to other Federal departments or agencies.
Section 201 permits the Executive Office of the President
to transfer up to 10 percent of any appropriation, subject to
approval of the Committee.
UNDER TITLE III--THE JUDICIARY
Language is included under Court Security, allowing funds
to be transferred to the United States Marshals Service for
courthouse security.
Section 302 permits the Judiciary to transfer up to five
percent of any appropriation with certain limitations.
UNDER TITLE V--INDEPENDENT AGENCIES
Under Title V, Independent Agencies, a number of transfers
are allowed.
(1) Under the Election Assistance Commission, amounts may
be transferred to the National Institute of Standards and
Technology.
(2) Under the General Services Administration, amounts may
be transferred within the Federal Buildings Fund, under certain
circumstances, after approval of the Committee on
Appropriations.
(3) Under the General Services Administration, Federal
Citizens Services Fund, transfers are allowed from the Federal
Citizens Services Fund to Federal agencies.
(4) Under the General Services Administration, Federal
Citizens Services Fund, transfers are allowed from unobligated
funding provided to the ``Electronic Government Fund'' to the
Federal Citizens Services Fund.
(5) Section 512 permits the General Services Administration
to transfer funds in the Federal Buildings Fund after approval
of the Committee on Appropriations.
(6) Under Merit Systems Protection Board, an amount is
transferred from the Civil Service Retirement and Disability
Fund.
(7) Under Office of Personnel Management, amounts from
certain trust funds are transferred to the Salaries and
Expenses and Office of Inspector General accounts for
administrative expenses;
(8) Under the Postal Regulatory Commission, amounts are
transferred from the Postal Service Fund;
(9) Under Small Business Administration, Business Loans
Program Account, amounts may be transferred to and merged with
Salaries and Expenses.
(10) Under Small Business Administration, Disaster Loans
Program Account, amounts may be transferred to and merged with
the Office of Inspector General, and Salaries and Expenses.
(11) Section 519 permits the Small Business Administration,
to transfer funds between appropriations of the Small Business
Administration.
(12) Under United States Postal Service, Office of
Inspector General, amounts are transferred from the Postal
Service Fund.
UNDER TITLE VII--GOVERNMENT-WIDE
Section 721 authorizes departments and agencies to transfer
funds to the General Services Administration to support certain
financial, information technology, procurement, and other
management initiatives.
Section 744 authorizes with notification the transfer of
funds from the Bureau of Consumer Financial Protection.
UNDER TITLE VIII--GENERAL PROVISIONS, DISTRICT OF COLUMBIA
Section 803 authorizes the District of Columbia to transfer
local funds and section 813 allows transfer funds between
operations and capital accounts.
Disclosure of Earmarks and Congressionally Directed Spending Items
Neither the bill nor the report contains any Congressional
earmarks, limited tax benefits, or limited tariff benefits as
defined in clause 9 of rule XXI of the Rules of the House of
Representatives.
Changes in the Application of Existing Law
Pursuant to clause 3(f)(1)(A) of rule XIII of the Rules of
the House of Representatives, the following statements are
submitted describing the effect of provisions proposed in the
accompanying bill which may be considered, under certain
circumstances, to change the application of existing law,
either directly or indirectly. The bill provides that
appropriations shall remain available for more than one year
for a number of programs for which the basic authorizing
legislation does not explicitly authorize such extended
availability. In addition, the bill carries language, in some
instances, permitting activities not authorized by law, or
exempting agencies from certain provisions of law, but which
has been carried in appropriations acts for many years.
The bill includes several limitations on official
entertainment, reception and representation expenses. Similar
provisions have appeared in many previous appropriations Acts.
The bill includes a number of limitations on the purchase of
automobiles or office furnishings that also have appeared in
many previous appropriations Acts. Language is included in
several instances permitting certain funds to be credited to
the appropriations recommended. Language is also included in
several instances permitting funding for services authorized by
5 U.S.C. 3109 and for the hire of passenger motor vehicles.
Title I--Department of the Treasury
Language is included for Departmental Offices, Salaries and
Expenses that provides funds for operation and maintenance of
the Treasury Building Annex; hire of passenger motor vehicles;
maintenance, repairs, and improvements of, and purchase of
commercial insurance policies for real properties leased or
owned overseas.
Language is also included designating funds for official
reception and representation expenses; unforeseen emergencies
of a confidential nature; and extending the period of
availability for certain funds.
Language is included for Office of Terrorism and Financial
Intelligence, Salaries and Expenses that provides funds
combating threats to national security.
Language is included for Cybersecurity Enhancement Account
that provides funds for enhanced cybersecurity for systems
operated by the Department of the Treasury.
Language is included for Department-wide Systems and
Capital Investments Programs that provides funds for equipment,
software, and repairs and renovations to buildings owned by the
Department of the Treasury.
Language is included for Fund for America's Kids and
Grandkids that provides funds for government efficiencies
subject to the absence of a budget deficit.
Language is included for the Office of Inspector General,
Salaries and Expenses, that provides funds to carry out the
provisions of the Inspector General Act of 1978, including
official reception and representation expenses, the hire of
vehicles, and provides funds for unforeseen emergencies of a
confidential nature.
Language is included for the Treasury Inspector General for
Tax Administration, Salaries and Expenses that provides funds
to carry out the provisions of the Inspector General Act of
1978, including consulting services, official reception and
representation expenses, the purchase and hire of motor
vehicles, unforeseen emergencies of a confidential nature, and
specifies the period of availability for certain funds.
Language is included for the Special Inspector General for
the Troubled Asset Relief Program, Salaries and Expenses, that
provides funds for the necessary expenses of the SIGTARP in
carrying out the provisions of the Emergency Economic
Stabilization Act of 2008 (P.L. 110-343).
Language is included for Financial Crimes Enforcement
Network, Salaries and Expenses that provides funds for the hire
of motor vehicles; travel and training of non-federal and
foreign government personnel attending meetings involving
domestic or foreign financial law enforcement, intelligence,
and regulation; official reception and representation expenses;
and assistance to Federal law enforcement agencies with or
without reimbursement. Language is also included that extends
the availability of certain amounts.
Language is included for the Bureau of the Fiscal Service,
Salaries and Expenses, that provides a certain amount for
official reception and representation expenses, and extends the
availability for systems modernization funds. Language is also
included specifying an amount to be derived from the Oil Spill
Liability Trust Fund.
Language is included for the Alcohol and Tobacco Tax and
Trade Bureau, Salaries and Expenses, that provides funds for
the hire of passenger motor vehicles and laboratory assistance
to State and local agencies with or without reimbursement.
Language is also included that specifies the amounts for
official reception and representation expenses and cooperative
research and development.
Language is included for the U.S. Mint, United States Mint
Public Enterprise Fund, which identifies the source of funding
for the operations and activities of the U.S. Mint and
specifies the level of funding for circulating coinage and
protective service capital investments.
Language is included for the Community Development
Financial Institutions Fund Program account that provides
specific amounts for: financial and technical assistance;
individuals with disabilities; Native American initiatives;
Bank Enterprise Awards, Healthy Food Financing Initiatives; and
administrative expenses for the program and cost of direct
loans. Language is included for clarifying the amount for the
Bond Guarantee Program.
Language is included under Internal Revenue Service,
Taxpayer Services, that provides funds for pre-filing
assistance and education, filing and account services, and
taxpayer advocacy services, and dedicating funding for the Tax
Counseling for the Elderly Program, low-income taxpayer clinic
grants, and Community Volunteer Income Tax Assistance grants.
Language is included for the Internal Revenue Service,
Enforcement, that provides funds to determine and collect owed
taxes, provide legal and litigation support, conduct criminal
investigations, enforce criminal statutes, purchase and hire of
vehicles; and designates funding for the Interagency Crime and
Drug Enforcement program. Language is included specifying the
period of availability for certain funds.
Language is included for the Internal Revenue Service,
Operations Support, that provides funds for operating and
supporting taxpayer services and tax law enforcement programs;
rent; facilities services; printing; postage; physical
security; headquarters and other IRS-wide administration
activities; research and statistics of income;
telecommunications; information technology development,
enhancement, operations, maintenance, and security; hire of
passenger motor vehicles; and official reception and
representation expenses. Language is included specifying the
period of availability for certain funds and requiring reports
on information technology.
Language is included for the Internal Revenue Service,
Business Systems Modernization that provides for the business
systems modernization program, including capital asset
acquisition of information technology, including management and
related contractual costs and IRS labor costs of said
acquisitions, contractual costs associated with operations, an
extended availability of the funds and requires quarterly
reports.
In addition, the bill provides the following administrative
provisions:
Section 101. Language is included that allows for the
transfer of five percent of any appropriation made available to
the IRS to any other IRS appropriation, upon the advance
approval of the Committees on Appropriations.
Section 102. Language is included that requires the IRS to
maintain a training program in taxpayers' rights, dealing
courteously with taxpayers, cross-cultural relations, and the
impartial application of tax law.
Section 103. Language is included that requires the IRS to
institute and enforce policies and procedures that will
safeguard the confidentiality of taxpayer information and
protect taxpayers against identity theft.
Section 104. Language is included that makes funds
available for improved facilities and increased staffing to
provide efficient and effective 1-800 number help line service
for taxpayers.
Section 105. Language is included to require the IRS to
issue notices to employers of any address change request and to
give special consideration to offers in compromise for
taxpayers who have been victims of payroll tax preparer fraud.
Section 106. Language is included to prohibit the IRS from
targeting U.S. citizens for exercising their First Amendment
rights.
Section 107. Language is included to prohibit the use of
funds by the IRS to target groups based on their ideological
beliefs.
Section 108. Language is included to prohibit the use of
funds by the IRS on conferences that do not adhere to
recommendations made by the Treasury Inspector General for Tax
Administration.
Section 109. Language is included prohibiting funds for IRS
employee awards or hiring programs that do not consider
employee conduct and Federal tax compliance.
Section 110. Language included to prohibit the use of funds
in contravention of section 6103 of the Internal Revenue Code
of 1986 (relating to confidentiality and disclosure of returns
and return information).
Section 111. Language is included to prohibit funds for
pre-populated returns.
Section 112. New language is included to prohibit funds for
the IRS to deny tax exemption unless the IRS Commissioner
consents to such determination.
Section 113. New language is provided for dedicated funds
to assist with the implementation of tax reform.
Section 114. Language is included that authorizes the
Department to purchase uniforms, insurance for motor vehicles
that are overseas, and motor vehicles that are overseas without
regard to the general purchase price limitations; to enter into
contracts with the State Department for health and medical
services for Treasury employees that are overseas; and to hire
experts or consultants.
Section 115. Language is included that authorizes
transfers, up to two percent, between Departmental Offices--
Salaries and Expenses, Office of Inspector General, Special
Inspector General for the Troubled Asset Relief Program,
Financial Crimes Enforcement Network, Bureau of the Fiscal
Service, and Alcohol and Tobacco Tax and Trade Bureau,
appropriations under certain circumstances.
Section 116. Language is included that authorizes
transfers, up to two percent, between the Internal Revenue
Service and the Treasury Inspector General for Tax
Administration under certain circumstances.
Section 117. Language is included prohibiting the
Department of the Treasury from undertaking a redesign of the
one dollar Federal Reserve note.
Section 118. Language is included providing for transfers
from and reimbursements to Bureau of the Fiscal Service,
Salaries and Expenses for the purposes of debt collection.
Section 119. Language is included requiring congressional
approval for the construction and operation of a museum by the
United States Mint.
Section 120. Language is included prohibiting funds in this
or any other Act from being used to merge the U.S. Mint and the
Bureau of Engraving and Printing without the approval of the
House and Senate committees of jurisdiction.
Section 121. Language is included deeming that funds for
the Department of the Treasury's intelligence-related
activities are specifically authorized in fiscal year 2019
until enactment of the Intelligence Authorization Act for
fiscal year 2019.
Section 122. Language is included permitting the Bureau of
Engraving and Printing to use $5,000 from the Industrial
Revolving Fund for reception and representation expenses.
Section 123. Language is included requiring the Department
of the Treasury to submit a capital investment plan.
Section 124. Language is included requiring the Department
of the Treasury to submit a report on its Franchise Fund.
Section 125. Language is included prohibiting the
Department of the Treasury from finalizing any regulation
related to the standards used to determine the tax-exempt
status of a 501(c)(4) organization.
Section 126. Language is included requiring a quarterly
report from both the Office of Financial Research and Office of
Financial Stability Oversight.
Section 127. Language is included authorizing the Office of
Terrorism and Financial Intelligence to reimburse Treasury
Departmental Offices for reception and representation expenses
to support activities of the Financial Action Task Force.
Section 128. Language is included prohibiting funds to
approve, license, facilitate, authorize, or otherwise allow the
importation of property confiscated by the Cuban Government.
Section 129. Language is included prohibiting funds to
approve or otherwise allow the licensing of a mark, trade name,
or commercial name that is substantially similar to one that
was used in connection with a business or assets that were
confiscated unless expressly consented.
Section 130. Language is included prohibit the Department
from enforcing guidance for U.S. positions on multilateral
development banks engaging with developing countries on coal-
fired power generation.
Section 131. Language is included that requires quarterly
reports of the Office of Financial Research (OFR) and Office of
Financial Stability.
Section 132. Language is included requiring the OFR to
provide public notice of not less than 90 days before issuing a
rule, report, or regulation.
Section 133. Language is included that limits the fees
available for obligation by the OFR.
Title II--Executive Office of the President
Language under The White House, Salaries and Expenses
provides funds for services authorized by 5 U.S.C. 3109 and 3
U.S.C. 103, 105 and 107, hire of vehicles, and official
reception and representation expenses; and the Office of Policy
Development.
Language under Executive Residence at the White House,
Operating Expenses provides funds for necessary expenses as
authorized by 3 U.S.C. 105, 109, 110, and 112-114.
Language under Executive Residence at The White House,
Reimbursable Expenses specifies the authorized use of funds;
specifies that reimbursable expenses are the exclusive
authority of the Executive Residence to incur obligations and
receive offsetting collections; requires the sponsors of
political events to make advance payments; requires the
national committee of the political party of the President to
maintain $25,000 on deposit; requires the Executive Residence
to ensure that amounts owed are billed within 60 days of a
reimbursable event and collected within 30 days of the bill
notice; authorizes the Executive Residence to charge and assess
interest and penalties on late payments; authorizes all
reimbursements to be deposited into the Treasury as a
miscellaneous receipt; requires a report to the Committee on
the reimbursable expenses within 90 days of the end of the
fiscal year; requires the Executive Residence to maintain a
system for tracking and classifying reimbursable events; and
specifies that the Executive Residence is not exempt from the
requirements of subchapter I or II of chapter 37 of title 31,
United States Code.
Language under White House Repair and Restoration provides
funds for the repair, alteration, and improvement of the
Executive Residence at the White House; and allows funds to
remain available until expended.
Language under Council of Economic Advisors, Salaries and
Expenses, is provided for necessary expenses in carrying out
the Employment Act of 1946.
Language under National Security Council and Homeland
Security Council, Salaries and Expenses provides for services
authorized by 5 U.S.C. 3109.
Language under Office of Administration, Salaries and
Expenses provides funds for continued modernization of the
information resources within the Executive Office of the
President, to remain available until expended, and provides for
services authorized by 5 U.S.C. 3109 and 3 U.S.C. 107, and for
the hire of vehicles.
Language under Office of Management and Budget, Salaries
and Expenses provides funds for expenses; services authorized
by 5 U.S.C. 3109; the hire of vehicles; carrying out provisions
of chapter 35 of title 44 United States Code and to prepare the
budget request; specifies funds for official representation
expenses; prohibits the review of agricultural marketing
orders; prohibits the use of funds for the purpose of altering
the transcript of testimony except for OMB officials; prohibits
the use of funds for evaluating or determining if water
resource project or study reports submitted by the Chief of
Engineers are in compliance with all applicable laws,
regulations, and requirements; prohibits the use of funds for
altering the Corp of Engineers annual work plan; and specifies
the amount of time to perform budgetary policy reviews of water
resource matters on which the Chief of Engineers has reported
before the report is considered approved, and specifies
notification requirements.
Language under Office of National Drug Control Policy,
Salaries and Expenses provides for expenses; receptions and
representation expenses; participation in joint projects;
provision of services to non-profit, research or public
organizations or agencies with or without reimbursement; and
allows for gifts to be used without fiscal year limitation for
the work of the Office.
Language under High Intensity Drug Trafficking Area Program
provides funds for expenses, extends the availability of funds,
directs the distribution and obligation of funds, allows for
the transfer of funds, allows for the reprogramming of
unobligated funds, and requires notification on the
distribution of funds.
Language under Other Federal Drug Control Programs extends
the availability of funds, directs the distribution of funds,
and allows for the transfer of funds.
Language under Unanticipated Needs extends the availability
of funds.
Language under Information Technology Oversight and Reform
provides for the use of funds, extends the availability of
funds, and allows for the transfer of funds.
Language under Special Assistance to the President,
Salaries and Expenses enables the Vice President to provide
assistance to the President, services authorized by 5 U.S.C.
3109 and 3 U.S.C. 106, and the hire of vehicles.
Language under Official Residence of the Vice President,
Operating Expenses provides funds for operation and maintenance
of the official residence of the Vice President, the hire of
vehicles, expenses authorized by 3 U.S.C. 106(b)(2) and
provides for the transfer of funds as necessary.
In addition, the bill provides the following administrative
provisions:
Section 201. Language is included permitting the transfer
of not to exceed ten percent of funds between various accounts
within the Executive Office of the President, with advance
approval of the Committees on Appropriations. The amount of an
appropriation shall not be increased by more than 50 percent.
Section 202. Language is included requiring the Director of
the Office of Management and Budget to include a statement of
budgetary impact with any Executive Order or Presidential
Memorandum issued or rescinded during fiscal year 2019.
Title III--The Judiciary
Language is included under Supreme Court, Salaries and
Expenses, providing for certain funds to remain available until
expended; the hire of passenger motor vehicles, official
reception and representation, and miscellaneous expenses.
Language is included providing funds for salaries of judges as
authorized by law.
Language is included under Supreme Court, Care of the
Building and Grounds, permitting funds to remain available
until expended.
Language is included under United States Court of Appeals
for the Federal Circuit, Salaries and Expenses, for necessary
expenses of the court. Language is included providing funds for
salaries of judges as authorized by law.
Language is included under United States Court of
International Trade, Salaries and Expenses, for necessary
expenses of the court. Language is included providing funds for
salaries of judges as authorized by law.
Language is included under Courts of Appeals, District
Courts, and Other Judicial Services, Salaries and Expenses,
providing funds for the salaries of certain judges, and all
other employees not otherwise provided for; necessary expenses;
the purchase, rental, repair and cleaning of uniforms for
Probation and Pretrial Services Office staff; firearms and
ammunition; and specifies certain funds remain available for
certain periods for specific purposes. Language is included
providing funds for salaries of judges as authorized by law.
Language is also included providing funding from the Vaccine
Injury Compensation Trust Fund for certain purposes.
Language is included under Defender Services, providing for
the compensation and reimbursement of expenses for attorneys,
investigative, expert and other services, the operation of
Federal Defender organizations, travel, training, general
administrative expenses and permitting funds to remain
available until expended.
Language is included under Fees of Jurors and
Commissioners, permitting funds to remain available until
expended and specifying limitations for the compensation of
land commissioners.
Language is included under Court Security, providing for
protective guard services and procurement, installation and
maintenance of security systems and equipment, building
ingress-egress control, inspection of mail and packages,
directed security patrols, perimeter security and services
provided by the Federal Protective Services. Language is
included permitting certain funds to remain available until
expended, which may be transferred to the United States
Marshals Service.
Language is included under Administrative Office of the
United States Courts, Salaries and Expenses, providing for
travel, the hire of passenger motor vehicles, advertising and
rent in the District of Columbia. Language is included
specifying certain amounts for official reception and
representation expenses.
Language is included under Federal Judicial Center,
Salaries and Expenses, extending the availability of certain
funds for education and training, and specifying certain
amounts for official reception and representation expenses.
Language is included under United States Sentencing
Commission, Salaries and Expenses, specifying certain amounts
for official reception and representation expenses.
In addition, the bill provides the following administrative
provisions:
Section 301. Language is included permitting funds for
salaries and expenses to be available for the employment of
experts and consultant services as authorized by 5 U.S.C. 3109.
Section 302. Language is included permitting up to five
percent of any appropriation made available for fiscal year
2019 to be transferred between Judiciary appropriations
provided that no appropriation shall be decreased by more than
five percent or increased by more than ten percent by any such
transfer except in certain circumstances. In addition, the
language provides that any such transfer shall be treated as a
reprogramming of funds under sections 604 and 608 of the
accompanying bill and shall not be available for obligation or
expenditure except in compliance with the procedures set forth
in those sections.
Section 303. Language is included allowing not to exceed
$11,000 to be used for official reception and representation
expenses incurred by the Judicial Conference of the United
States.
Section 304. Language is included allowing the delegation
of authority to the Judiciary for contracts for repairs of less
than $100,000 through fiscal year 2019.
Section 305. Language is included allowing a court security
pilot program.
Section 306. Language is included requested by the Judicial
Conference of the United States extending temporary judgeships
in Arizona, California Central, Florida Southern, Kansas,
Missouri Eastern, New Mexico, North Carolina Western, and Texas
Eastern.
Title IV--District of Columbia
Language is included under Federal Payment for Resident
Tuition Support, permitting the amount appropriated to remain
available until expended; specifying conditions for the use,
award, and financial accounting of funds; and requiring
quarterly reports.
Language is included under Federal Payment for Emergency
Planning and Security Costs in the District of Columbia,
providing that the amount appropriated shall remain available
until expended for providing public safety at events, including
support of the United States Secret Service, and to respond to
terrorist threats or attacks.
Language is included under Federal Payment to the District
of Columbia Courts, authorizing official reception and
representation expenses; specifying certain amounts for
specific purposes; providing all amounts under this heading
shall be apportioned quarterly by the Office of Management and
Budget and obligated and expended in the same manner as funds
appropriated for salaries and expenses of other Federal
agencies; allowing funds made available for capital
improvements to remain available until September 30, 2020;
providing for the reallocation of funds and providing for
certain payments.
Language is included under Federal Payment for Defender
Services in the District of Columbia Courts, providing that the
amount appropriated shall remain available until expended;
specifying who shall administer these funds; and providing that
all amounts under this heading shall be apportioned quarterly
by the Office of Management and Budget and obligated and
expended in the same manner as funds appropriated for salaries
and expenses of other Federal agencies; and that not more than
$20,000,000 in unobligated funds provided in this account may
be transferred to and merged with funds made available under
the heading Federal Payment to District of Columbia Courts.
Language is included under Federal Payment to the Court
Services and Offender Supervision Agency for the District of
Columbia, allowing the transfer and hire of motor vehicles;
authorizing official reception and representation expenses;
specifying certain amounts for specific purposes and programs;
allowing $13,223,000 to remain available until September 30,
2021 for costs associated with replacement leases; providing
that all amounts under this heading shall be apportioned
quarterly by the Office of Management and Budget and obligated
and expended in the same manner as funds appropriated for
salaries and expenses of other Federal agencies; allowing the
use of programmatic incentives for offenders and defendants who
successfully meet the terms of their supervision; authorizing
the Director to accept, solicit and use on the behalf of the
Agency any monetary or nonmentary gift to support offenders and
defendants successfully meeting terms of supervision.
Language is included under Federal Payment to District of
Columbia Public Defender Service, allowing the transfer and
hire of motor vehicles; providing that all amounts under this
heading shall be apportioned quarterly by the Office of
Management and Budget and obligated and expended in the same
manner as funds appropriated for salaries and expenses of other
Federal agencies; and authorizing the acceptance and use of
voluntary and uncompensated services to facilitate the work of
the District of Columbia Public Defender Service.
Language is included under Federal Payment to the Criminal
Justice Coordinating Council, specifying that the amount
appropriated shall remain available until expended to support
initiatives related to the coordination of Federal and local
criminal justice resources.
Language is included under Federal Payment for Judicial
Commissions, specifying certain amounts for certain commissions
and allowing for appropriations to remain available until
September 30, 2020.
Language is included under Federal Payment for School
Improvement, allowing for appropriations to remain available
until expended for payments authorized under the Scholarship
for Opportunity and Results Act.
Language is included under Federal Payment for the District
of Columbia National Guard, providing funds for the National
Guard Retention and College Access Program to remain available
until expended.
Language is included under Federal Payment for Testing and
Treatment of HIV/AIDS for testing and treatment.
Language is included under District of Columbia Funds: (1)
providing funds as proposed in the fiscal year 2019 Budget
Request Act of 2018 submitted to Congress by the District of
Columbia; (2) limits the amount provided in this Act for the
District of Columbia to the amount of the proposed budget or
the sum of total revenues; (3) providing conditions for
increasing the amount provided; and (4) directing the Chief
Financial Officer to ensure the District of Columbia meets all
requirements, but prohibits the reprogramming of capital
projects.
Title V--Independent Agencies
Language is included for the Administrative Conference of
the United States, Salaries and Expenses, providing for
expenses, including official reception and representation and
allowing funds to be available until September 30, 2019.
Language is included for the Consumer Product Safety
Commission, Salaries and Expenses, that provides funds for
expenses, the hire of motor vehicles, services as authorized by
5 U.S.C. 3109 (with a limitation on rates for individuals), and
official reception and representation expenses.
The bill includes the following administrative provisions
under the Consumer Product Safety Commission:
Section 501. Language is included prohibiting funds to
finalize, implement, or enforce the proposed rule on
recreational off-highway vehicles until a study is completed by
the National Academy of Sciences.
Language is included for the Election Assistance
Commission, Salaries and Expenses, that provides necessary
funds, including transfer of funds, for salaries and expenses
and to carry out the Help America Vote Act of 2002.
Language is included under the Federal Communications
Commission, Salaries and Expenses, permitting funds for
uniforms and allowances therefor, official reception and
representation expenses, purchase and hire of motor vehicles,
special counsel fees, and services as authorized by 5 U.S.C.
3109. Language provides for the assessment and collection of
offsetting collections, authorizes retention of such
collections, and provides that they remain available until
expended. Language prohibits the availability for obligation of
excess collections. Language limits the use of proceeds from
the use of a competitive bidding system. Language provides
funding for the Office of Inspector General.
The bill includes the following administrative provisions
under the Federal Communications Commission:
Section 510. Language is included prohibiting the FCC from
changing rules governing the Universal Service Fund regarding
single connection or primary line restrictions.
Language is included for the Federal Deposit Insurance
Corporation, Office of Inspector General, that provides for the
funds to be derived from the Deposit Insurance Fund, and the
FSLIC Resolution Fund.
Language is included for the Federal Election Commission,
Salaries and Expenses, providing for expenses including
official reception and representation.
Language is included for the Federal Labor Relations
Authority, Salaries and Expenses, that provides funds for
services authorized by 5 U.S.C. 3109, the hire of experts and
consultants, hire of motor vehicles, reception and
representation expenses and the rental of conference rooms;
authorizes travel payments to public members of the Federal
Service Impasses Panel; and allows for fees collected to be
transferred to and merged with the appropriation.
Language is included for the Federal Trade Commission,
Salaries and Expenses, permitting funds for uniforms and
allowances therefor, services authorized by 5 U.S.C. 3109,
official reception and representation expenses, hire of motor
vehicles, and contract for collection services. Language
provides for the crediting and retention of certain fees.
Language also prohibits funds from being used to implement
subsection (e)(2)(B) of section 43 of the Federal Deposit
Insurance Act.
Language is included for the General Services
Administration, Federal Buildings Fund that allows for revenues
and collections to be spent from the Fund; specifies the
conditions under which funds made available can be used; limits
the availability of funds for certain purposes; specifies
funding for construction and acquisition projects; specifies
funding for special emphasis programs; provides for certain
transfers of funds; requires spending plans; and prohibits
excess funds from being available.
Language is included for the General Services
Administration, Government-wide Policy, that provides funds for
policy and evaluation activities associated with the management
of real and personal property assets and certain administrative
services; support responsibilities relating to acquisition,
telecommunications, motor vehicles, information technology
management, and related technology activities; and services
authorized by 5 U.S.C. 3109.
Language is included for the General Services
Administration, Operating Expenses that provides funds for
Government-wide activities associated with personal and real
property disposal, and services authorized by 5 U.S.C. 3109;
for expenses for activities associated with agency-wide policy
direction and management.
Language is included for the General Services
Administration, Civilian Board of Contract Appeals for
activities associated with the Civilian Board of Contract
Appeals.
Language is included for the General Services
Administration, Office of Inspector General that makes certain
funds available until expended and provides for awards in
recognition of efforts that enhance the office. Language is
included for services authorized by 5 U.S.C. 3109 and
designates funds for information and detection of fraud.
Language is included for the General Services
Administration, Allowances and Office Staff for Former
Presidents, for carrying out the provisions of 3 U.S.C. 102
note and Public Law 95-138.
Language is included for the General Services
Administration, Federal Citizen Services Fund, which provides
funds for the Office of Citizen Services and other information
technology costs. Language is included allowing for certain
transfers to the Federal Citizen Services Fund. Language is
also included for the Federal Citizen Services Fund that
authorizes funds to be deposited in the Fund and limits the
availability of funds in the Fund.
Language is included for the General Services
Administration, Technology Modernization Fund, for technology-
related modernization activities.
Language is included for the General Services
Administration, Asset Proceeds and Space Management Fund for
the purposes of carrying out actions pursuant to
recommendations of the Public Buildings Reform Board focusing
on civilian real property.
Language is included for the General Services
Administration, Environmental Review Improvement Fund for the
authorized activities of the Environmental Review Improvement
Fund and the Federal Permitting Improvement Steering Council.
In addition, the bill includes the following administrative
provisions under the General Services Administration (GSA):
Section 520. Language is included providing authority for
the use of funds for the hire of motor vehicles.
Section 521. Language is included providing that funds made
available for activities of the Federal Buildings Fund may be
transferred between appropriations with advance approval of the
Congress to apply to funds provided in prior appropriations
Acts.
Section 522. Language is included requiring funds proposed
for developing courthouse construction requests to meet
appropriate standards and the priorities of the Judicial
Conference.
Section 523. Language is included providing that no funds
may be used to increase the amount of occupiable square feet,
provide cleaning services, security enhancements, or any other
service usually provided, to any agency which does not pay the
assessed rent.
Section 524. Language is included permitting GSA to pay
small claims (up to $250,000) made against the Federal
Government.
Section 525. Language is included requiring the
Administrator to ensure that the delineated area of procurement
for all lease agreements is identical to the delineated area
included in the prospectus unless prior notice is given to the
Committees.
Section 526. Language is included requiring a spend plan
for certain accounts and programs.
Section 527. Language is included directing the
Administrator of the General Services Administration to submit
a report on the implementation of Section 846 of the National
Defense Authorization Act for fiscal year 2018.
Language is included for the Harry S Truman Scholarship
Foundation as established by section 10 of Public Law 93-642.
Language is included for the Merit Systems Protection
Board, Salaries and Expenses, that provides funds for services
authorized by 5 U.S.C. 3109, rental of conference rooms, hire
of passenger motor vehicles, direct procurement of survey
printing, official reception and representation expenses,
specifies the period of availability for certain funds,
provides for administration expenses to adjudicate retirement
appeals, and provides for the transfer of some funds.
Language is included for the National Archives and Records
Administration, Operating Expenses, that provides funds for
uniforms or allowances therefor, as authorized by 5 U.S.C. 5901
et seq., including maintenance, repairs, and cleaning, the hire
of passenger motor vehicles, activities of the Public Interest
Declassification Board, the review and declassification of
documents, and the operations and maintenance of the electronic
records archive.
Language is included for the National Archives and Records
Administration, Office of Inspector General, that provides
funds for the hire of motor vehicles.
Language is included for the National Archives and Records
Administration, Repairs and Restoration, that provides funds
for the repair, alteration, improvement, and provision of
adequate storage; and provides that funds remain available
until expended.
Language is included under the National Archives and
Records Administration, National Historical Publications and
Records Commission Grants Program, that provides funds for
allocations and grants for historical publications and records;
and provides that funds remain available until expended.
Language is included under the National Credit Union
Administration, Community Development Credit Union Revolving
Loan Fund, that provides funds for technical assistance and
extends the availability of funds.
Language is included under the Office of Government Ethics,
Salaries and Expenses, that provides funds for services
authorized by 5 U.S.C. 3109, rental of conference rooms, hire
of passenger motor vehicles, and official reception and
representation expenses.
Language is included under the Office of Personnel
Management, Salaries and Expenses, that provides funds for
services authorized by 5 U.S.C. 3109, medical examinations for
veterans, rental of conference rooms, hire of passenger motor
vehicles, official reception and representation expenses,
advances for reimbursements, payment of per diem or subsistence
allowances, and the transfer of administrative expenses;
directs that provisions shall not affect other authorities;
prohibits funds for the Legal Examining Unit; and authorizes
the acceptance of donations under certain conditions. Language
is also included specifying the period of availability for
certain funds and requiring a report on information technology.
Language is included for the Office of Personnel
Management, Office of Inspector General, Salaries and Expenses,
that provides funds for services authorized by 5 U.S.C. 3109,
hire of passenger motor vehicles, rental of conference rooms,
and a transfer for administrative expenses.
Language is included for the Office of Special Counsel,
Salaries and Expenses, that provides funds for services
authorized by 5 U.S.C. 3109, payment of fees and expenses for
witnesses, rental of conference rooms, and the hire of
passenger motor vehicles.
Language is included for the Postal Regulatory Commission,
Salaries and Expenses, that provides funds derived from a
transfer from the Postal Service Fund.
Language is included for the Privacy and Civil Liberties
Oversight Board, Salaries and Expenses, that provides funds
authorized by section 1061 of 42 U.S.C. 2000ee.
Language is included for the Public Buildings Reform Board,
Salaries and Expenses, that provides funds for carrying out the
Federal Assets Sale and Transfer Act of 2016 (P.L. 114-287).
Language is included for the Securities and Exchange
Commission, Salaries and Expenses, that provides for rental of
space, services, reception and representation expenses, a
permanent secretariat for the International Organization of
Securities Commissions, and consultations and meetings hosted
by the Commission. Language is included designating funds for
information technology initiatives, the economics division and
a replacement lease for the NY regional office. Language is
included that provides for the crediting of offsetting
collections. Language provides for the assessment and
collection of offsetting collections, authorizes retention of
such collections, and provides that they remain available until
expended.
Language is included for the Selective Service System,
Salaries and Expenses, that provides funds for attendance of
meetings, training, hire of passenger motor vehicles, services
authorized by 5 U.S.C. 3109, and official reception and
representation expenses; authorizes certain exemptions under
certain conditions; and prohibits funds used in connection with
the induction of any person into the Armed Forces of the United
States.
Language is included for the Small Business Administration,
Salaries and Expenses, that provides for hire of motor vehicles
and official reception and representation expenses. Language is
also included to provide authority to charge fees and credit
such fees to the account without further appropriation.
Language is also included designating funds for lender
oversight. Language is also included for the Loan Modernization
and Accounting System and co-sponsor activities.
Language is included for the Small Business Administration,
Entrepreneurial Development Programs, that provides for
supporting entrepreneurial and small business development grant
programs. Language is included extending the availability of
funds.
Language is included for the Small Business Administration,
Office of Inspector General, that provides funds to carry out
the provisions of the Inspector General Act of 1978.
Language is included for the Small Business Administration,
Office of Advocacy, that provides funds to carry out the
provisions of the Independent Office of Advocacy Act of 2003
and the Regulatory Flexibility Act of 1980 and allows funds to
remain available until expended.
Language is included for the Small Business Administration,
Business Loans Program Account, limiting commitments for
certain guaranteed loan programs and for providing for the cost
of direct loans and guaranteed loans. Language is also included
authorizing the transfer of funds to Salaries and Expenses for
administrative expenses.
Language is included for the Small Business Administration
Disaster Loan Program Account, that provides for administrative
expenses, the transfer of funds to the Office of Inspector
General and to Salaries and Expenses and allows funds to remain
available until expended.
Section 530 allows for the transfer of funds between Small
Business Administration appropriations.
Section 531 rescinds prior year unobligated balances.
Section 532 amends requirements for the Microloan program.
Language is included for the United States Postal Service,
Payment to the Postal Service Fund, that provides funds for
revenue foregone; stipulates that mail for overseas voting and
mail for the blind is free; provides that 6-day delivery shall
continue at not less than the 1983 level; prohibits funds in
this Act from being used to charge a fee to a child support
enforcement agency seeking the address of a postal customer;
prohibits funds from being used to consolidate or close small
rural and other small post offices.
New language is included that requires the United States
Postal Service to maintain and comply with delivery standards
for First Class Mail and periodicals effective on July 1, 2012.
Language is included for the United States Postal Service,
Office of Inspector General, that provides for transfer from
the Postal Service Fund.
Language is included for the United States Tax Court,
Salaries and Expenses, that provides funds for contract
reporting and services authorized by 5 U.S.C. 3109, and that
travel expenses of the judges shall be paid upon the written
certificate of the judge.
Title VI--General Provisions--This Act
In addition, the bill provides the following provisions
under this title:
Section 601. Language is included prohibiting pay and other
expenses for non-Federal parties in regulatory or adjudicatory
proceedings funded in this Act.
Section 602. Language is included prohibiting obligations
beyond the current fiscal year and prohibits transfers of funds
unless expressly so provided herein.
Section 603. Language is included limiting procurement
contracts for consulting service expenditures to contracts that
are matters of public record and available for public
inspection.
Section 604. Language is included prohibiting transfer of
funds in this Act without express authority.
Section 605. Language is included prohibiting the use of
funds to engage in activities that would prohibit the
enforcement of section 307 of the 1930 Tariff Act.
Section 606. Language is included concerning compliance
with the Buy American Act.
Section 607. Language is included prohibiting the use of
funds by any person or entity convicted of violating the Buy
American Act.
Section 608. Language is included specifying reprogramming
procedures. The provision requires that agencies or entities
funded by the Act notify the Committee and obtain prior
approval from the Committee for any reprogramming of funds
that: (1) creates a new program; (2) eliminates a program,
project, or activity; (3) increases funds or personnel for any
program, project, or activity for which funds have been denied
or restricted by the Congress; (4) proposes to use funds
directed for a specific activity by either the House or Senate
Committees on Appropriations for a different purpose; (5)
augments existing programs, projects, or activities in excess
of $5,000,000 or 10 percent, whichever is less; (6) reduces
existing programs, projects, or activities by $5,000,000 or 10
percent, whichever is less; or (7) reorganizes offices,
programs, or activities. The provision also directs the
agencies funded by this Act to submit operating plans for the
Committee's review within 60 days of the bill's enactment.
Section 609. Language is included providing that fifty
percent of unobligated balances may remain available for
certain purposes.
Section 610. Language is included prohibiting funding for
the Executive Office of the President to request either a
Federal Bureau of Investigation background investigation or
Internal Revenue Service determination with respect to section
501(a) of the Internal Revenue Code of 1986, except with the
express consent of the individual involved in an investigation
or in extraordinary circumstances involving national security.
Section 611. Language is included regarding cost accounting
standards for contracts under the Federal Employee Health
Benefits Program.
Section 612. Language is included regarding non-foreign
area cost of living allowances.
Section 613. Language is included prohibiting the
expenditure of funds for abortion under the Federal Employees
Health Benefits program.
Section 614. Language is included making exceptions to the
preceding provision where the life of the mother is in danger
or the pregnancy is a result of an act of rape or incest.
Section 615. Language is included waiving restrictions on
the purchase of non-domestic articles, materials, and supplies
in the case of acquisition of information technology by the
Federal government.
Section 616. Language is included prohibiting officers or
employees of any regulatory agency or commission funded by this
Act from accepting travel payments or reimbursements from a
person or entity regulated by such agency or commission.
Section 617. Language is included permitting the Securities
and Exchange Commission and Commodities Futures Trading
Commission to fund a joint advisory committee to advise on
emerging regulatory issues, notwithstanding Section 708 of this
Act.
Section 618. Language is included requiring certain
agencies in this Act to consult with the General Services
Administration before seeking new office space or making
alterations to existing office space.
Section 619. Language is included providing for several
appropriated mandatory accounts. These are accounts where
authorizing language requires the payment of funds. The
Congressional Budget Office estimates the cost for the
following programs addressed in this provision: $450,000 for
Compensation of the President including $50,000 for expenses,
$190,000,000 for the Judicial Retirement Funds (Judicial
Officers' Retirement Fund, Judicial Survivors' Annuities Fund,
and the United States Court of Federal Claims Judges'
Retirement Fund), $13,519,000,000 for the Government Payment
for Annuitants, Employee Health Benefits, $49,000,000 for the
Government Payment for Annuitants, Employee Life Insurance, and
$8,060,000,000 for the Payment to the Civil Service Retirement
and Disability Fund.
Section 620. Language is included prohibiting funds for the
Federal Trade Commission to complete or publish the study,
recommendations, or report prepared by the Interagency Working
Group on Food Marketed to Children.
Section 621. Language is included preventing conflicts of
interest by prohibiting contractor security clearance related
background investigators from undertaking final Federal reviews
of their own work.
Section 622. Language is included requiring that the head
of any executive branch agency ensure that the Chief
Information Officer (CIO) has authority to participate in the
budget planning process and approval of the information
technology (IT) budget.
Section 623. Language is included prohibiting funds in
contravention of the Federal Records Act.
Section 624. Language is included prohibiting agencies from
requiring Internet Service Providers (ISPs) to disclose
electronic communications information in a manner that violates
the Fourth Amendment.
Section 625. Language is included relating to Universal
Service Fund payments for wireless providers.
Section 626. Language is included prohibiting funds to be
used to deny inspectors general access to records.
Section 627. Language is included prohibiting any funds
made available in this Act from being used to establish a
computer network unless such network blocks the viewing,
downloading, and exchanging of pornography.
Section 628. Language is included prohibiting funds for the
Securities and Exchange Commission to require the disclosure of
political contributions to tax exempt organizations, or dues
paid to trade associations.
Section 629. New language is included that provides the
Archivist of the United States with the authority to force
action on records that are past their disposition date or
currently unscheduled and do not have a disposition date, and
to unilaterally dispose of archival records in NARA's legal
custody.
Section 630. Language is included repealing the Federal
Election Commission's prior approval requirement for corporate
member trade association PACs.
Section 631. Language is included prohibiting funds to pay
for an abortion or the administrative expenses in connection
with a multi-State qualified health plan offered under a
contract under section 1334 of the Patient Protection and
Affordable Care Act which provides any benefits or coverage for
abortions, except for endangerment of the life of the mother,
rape or incest.
Section 632. Language is included prohibiting funds to the
Securities and Exchange Commission for the purpose of requiring
single ballot proxies.
Title VII--General Provisions--Government-Wide
In addition, the bill provides the following provisions
under this title:
Section 701. Language is included requiring agencies to
administer a policy designed to ensure that all of its
workplaces are free from the illegal use of controlled
substances.
Section 702. Language is included establishing price
limitations on vehicles to be purchased by the Federal
Government with certain exceptions.
Section 703. Language is included allowing funds made
available to agencies for travel to also be used for quarters
allowances and cost-of-living allowances.
Section 704. Language is included prohibiting the
employment of noncitizens with certain exceptions.
Section 705. Language is included giving agencies the
authority to pay General Services Administration bills for
space renovation and other services.
Section 706. Language is included allowing agencies to
finance the costs of recycling and waste prevention programs
with proceeds from the sale of materials recovered through such
programs.
Section 707. Language is included providing that funds made
available to corporations and agencies subject to 31 U.S.C. 91
may pay rent and other service costs in the District of
Columbia.
Section 708. Language is included prohibiting interagency
financing of groups absent prior statutory approval.
Section 709. Language is included prohibiting the use of
funds for enforcing regulations disapproved in accordance with
the applicable law of the U.S.
Section 710. Language is included limiting the amount of
funds that can be used for redecoration of offices under
certain circumstances.
Section 711. Language is included allowing for interagency
funding of national security and emergency telecommunications
initiatives.
Section 712. Language is included requiring agencies to
certify that a Schedule C appointment was not created solely or
primarily to detail the employee to the White House.
Section 713. Language is included prohibiting the payment
of any employee who prohibits, threatens or prevents another
employee from communicating with Congress.
Section 714. Language is included prohibiting Federal
training not directly related to the performance of official
duties.
Section 715. Language is included prohibiting, other than
for normal and recognized executive-legislative relationships,
propaganda, publicity and lobbying by executive agency
personnel in support or defeat of legislative initiatives.
Section 716. Language is included prohibiting any Federal
agency from disclosing an employee's home address to any labor
organization, absent employee authorization or court order.
Section 717. Language is included prohibiting funds to be
used to provide non-public information such as mailing,
telephone, or electronic mailing lists to any person or
organization outside the government without the approval of the
Committees on Appropriations.
Section 718. Language is included prohibiting the use of
funds for propaganda and publicity purposes not authorized by
Congress.
Section 719. Language is included directing agency
employees to use official time in an honest effort to perform
official duties.
Section 720. Language is included allowing the use of funds
to finance an appropriate share of the Federal Accounting
Standards Advisory Board.
Section 721. Language is included allowing the transfer of
funds to the General Services Administration to finance an
appropriate share of various government-wide boards and
councils and for Federal Government Priority Goals under
certain conditions.
Section 722. Language is included permitting breast feeding
in a Federal building or on Federal property if the woman and
child are authorized to be there.
Section 723. Language is included permitting interagency
funding of the National Science and Technology Council and
provides for a report on the budget and resources of the
National Science and Technology Council.
Section 724. Language is included requiring documents
involving the distribution of Federal funds to indicate the
agency providing the funds and the amount provided.
Section 725. Language is included prohibiting the use of
funds to monitor personal access or use of Internet sites or to
collect, review, or obtain any personally identifiable
information relating to access to or use of an Internet site.
Section 726. Language is included requiring health plans
participating in the Federal Employees Health Benefits Program
to provide contraceptive coverage and provides exemptions to
certain religious plans.
Section 727. Language is included supporting strict
adherence to anti-doping activities.
Section 728. Language is included allowing funds for
official travel to be used by departments and agencies, if
consistent with OMB Circular A-126, to participate in the
fractional aircraft ownership pilot program.
Section 729. Language is included restricting the use of
funds for Federal law enforcement training facilities.
Section 730. Language is included prohibiting Executive
Branch agencies from creating prepackaged news stories that are
broadcast or distributed in the United States unless the story
includes a clear notification within the text or audio of that
news story that the prepackaged news story was prepared or
funded by that executive branch agency.
Section 731. Language is included prohibiting use of funds
in contravention of section 552a of title 5, United States Code
(the Privacy Act) and regulations implementing that section.
Section 732. Language is included prohibiting funds from
being used for any Federal Government contract with any foreign
incorporated entity which is treated as an inverted domestic
corporation.
Section 733. Language is included requiring agencies to pay
a fee to the Office of Personnel Management for processing
retirement of employees who separate under Voluntary Early
Retirement Authority or who receive Voluntary Separation
Incentive payments.
Section 734. Language is included prohibiting funds to
require any entity submitting an offer for a Federal contract
or participating in an acquisition to disclose political
contributions.
Section 735. Language is included prohibiting funds for the
painting of a portrait of an employee of the Federal government
including the President, the Vice President, a Member of
Congress, the head of an executive branch agency, or the head
of an office of the legislative branch.
Section 736. Language is included limiting the pay
increases of certain prevailing rate employees.
Section 737. Language is included requiring agencies to
submit reports to Inspectors General concerning expenditures
for agency conferences.
Section 738. Language is included prohibiting funds to be
used to increase, eliminate, or reduce funding for a program or
project unless such change is made pursuant to reprogramming or
transfer provisions.
Section 739. Language is included prohibiting agencies from
using funds to implement regulations changing the competitive
areas under reductions-in-force for Federal employees.
Section 740. Language is included ensuring contractors are
not prevented from reporting waste, fraud, or abuse by signing
confidentiality agreements that would prohibit such disclosure.
Section 741. Language is included prohibiting the
expenditure of funds for the implementation of certain
nondisclosure agreements unless certain provisions are included
in the agreements.
Section 742. Language is included prohibiting funds to any
corporation with certain unpaid Federal tax liabilities unless
an agency has considered suspension or debarment of the
corporation and made a determination that further action is not
necessary to protect the interests of the Government.
Section 743. Language is included prohibiting funds to any
corporation that was convicted of a felony criminal violation
within the preceding 24 months unless an agency has considered
suspension or debarment of the corporation and made a
determination that further action is not necessary to protect
the interests of the Government.
Section 744. Language is included requiring the Bureau of
Consumer Financial Protection to notify certain Committees of
requests for a transfer of funds from the Federal Reserve
System and to post any such notifications on the Bureaus
website.
Section 745. The Committee continues a provision addressing
possible technical scorekeeping differences for fiscal year
2019 between the Office of Management and Budget and the
Congressional Budget Office.
Section 746. Language is included prohibiting funds from
implementing, administering, carrying out, modifying, revising,
or enforcing Executive Order 13690.
Section 747. New language is included prohibiting funds to
implement, administer, or enforce a rule issued pursuant to
section 13(p) of the Securities Exchange Act of 1934.
Section 748. Language is included prohibiting the use of
funds to begin or announce a study or a public-private
competition regarding the conversion to contractor performance
of any function performed by civilian Federal employees
pursuant to Office of Management and Budget Circular A-76 or
any other administrative regulation, directive, or policy.
Section 749. Language is included concerning the non-
application of these general provisions to title IV and to
title VIII.
Title VIII--General Provisions--District of Columbia
In addition, the bill provides the following provisions
under this title:
Section 801. Language is included that appropriates funds
for refunding overpayments of taxes collected and for paying
settlements and judgments against the District of Columbia
government.
Section 802. Language is included prohibiting the use of
Federal funds for publicity or propaganda purposes.
Section 803. Language is included establishing
reprogramming procedures for Federal and local funds.
Section 804. Language is included prohibiting the use of
Federal funds to provide salaries or other costs associated
with the offices of United States Senator or Representative.
Section 805. Language is included restricting the use of
official vehicles to official duties.
Section 806. Language is included prohibiting the use of
Federal funds for any petition drive or civil action which
seeks to require Congress to provide for voting representation
in Congress for the District of Columbia.
Section 807. Language is included prohibiting the use of
Federal funds for needle exchange programs and programs that
support supervised consumption facilities.
Section 808. Language is included providing for a
``conscience clause'' on legislation that pertains to
contraceptive coverage by health insurance plans.
Section 809. Language is included prohibiting the use of
Federal funds to legalize or reduce penalties associated with
the possession, use, or distribution on any schedule I
substance under the Controlled Substances Act or any
tetrahydrocannabinols derivative.
Language is also included prohibiting local and Federal
funds to legalize or reduce penalties associated with the
possession, use, or distribution of any schedule I substance
under the Controlled Substance Act or any tetrahydrocannabinols
derivative for recreational use.
Section 810. Language is included prohibiting the use of
funds for abortion except in the cases of rape or incest or if
necessary to save the life of the mother.
Section 811. Language is included requiring the Chief
Financial Officer (CFO) to submit a revised operating budget
for all agencies in the D.C. government, no later than 30
calendar days after the enactment of this Act that realigns
budgeted data with anticipated actual expenditures.
Section 812. Language is included requiring the CFO to
submit a revised operating budget for D.C. Public Schools, no
later than 30 calendar days after the enactment of this Act,
that realigns school budgets to actual school enrollment.
Section 813. Language is included allowing the transfer of
local funds and capital and enterprise funds.
Section 814. Language is included prohibiting the
obligation of Federal funds beyond the current fiscal year and
transfers of funds unless expressly provided herein.
Section 815. Language is included providing that not to
exceed 50 percent of unobligated balances from Federal
appropriations for salaries and expenses may remain available
for certain purposes.
Section 816. Language is included appropriating local funds
during fiscal year 2020 if there is an absence of a continuing
resolution or regular appropriation for the District of
Columbia. Funds are provided under the same authorities and
conditions and in the same manner and extent as provided for in
fiscal year 2019.
Section 817. New language is included prohibiting funds to
enact any act, resolution, rule, regulation, guidance, or other
law to permit any person to carry out any activity to which
subsection (a) of section 3 of the Assisted Suicide Funding
Restriction Act of 1997 applies, and repeals the District of
Columbia Death With Dignity Act of 2016.
Section 818. New language is included prohibiting funds in
this Act from being used to carry out the Reproductive Health
Non-Discrimination Amendment Act of 2018 (D.C. Law 20-261).
Section 819. Language is included repealing the Local
Budget Autonomy Amendment Act of 2012.
Section 820. Language is included limiting references to
``this Act'' as referring to only this title and title IV.
Title IX--Financial Reforms
The bill includes a number of financial services reforms
that have been passed by the House of Representatives in the
115th Congress.
Title X--Email Privacy Act
The bill includes H.R. 387, the Email Privacy Act, which
was passed by the House of Representatives on February 6, 2017.
Title XI--Amateur Radio Parity Act
The bill includes H.R. 555, the Amateur Radio Parity Act of
2017, which was passed by the House of Representatives on
January 23, 2017.
Title XII--Additional General Provisions
Section 1201. The Committee includes a provision
establishing a ``Spending Reduction Account'' in the bill.
Appropriations Not Authorized by Law
Pursuant to clause 3(f)(1)(B) of rule XIII of the Rules of
the House of Representatives, the following table lists the
appropriations in the accompanying bill which are not
authorized by law for the period concerned:
[Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
Appropriation
Last Year of Authorization in Last Year Appropriations
Account Authorization Level of in this bill
Authorization
----------------------------------------------------------------------------------------------------------------
Title I--Department of the Treasury
Departmental Offices........................ n/a n/a n/a 208,751
Office of Terrorism and Financial n/a n/a n/a 161,000
Intelligence...............................
Cybersecurity Enhancement Account........... n/a n/a n/a 25,208
Department-Wide Systems and Capital 1997 .............. .............. 8,000
Investments Program........................
Fund for America's Kids and Grandkids....... n/a n/a n/a 585,000
Office of Inspector General................. .............. .............. .............. 37,044
Treasury Inspector General for Tax n/a n/a n/a 170,834
Administration.............................
Special Inspector General for the Troubles .............. .............. .............. 28,800
Asset Relief Program.......................
Financial Crimes Enforcement Network........ 2013 100,419 111,788 117,800
Bureau of the Fiscal Service................ n/a n/a n/a 338,280
Alcohol and Trade Tax and Trade Bureau...... n/a n/a n/a 123,527
Community Development and Financial 1998 111,000 80,000 216,000
Institutions Fund..........................
Internal Revenue Service:
Taxpayer Services........................... n/a n/a n/a 2,491,554
Enforcement................................. n/a n/a n/a 4,860,000
Operations Support.......................... n/a n/a n/a 3,988,000
Business Systems Modernization.............. n/a n/a n/a 200,000
Title II--Executive Office of the President
Office of Management and Budget............. 2003 various 61,988 103,000
Policy:
Salaries and Expenses................... 2010 n/a 29,575 17,400
High Intensity Drug Trafficking Areas... 2011 280,000 238,522 280,000
Other Federal Drug Control Programs..... various various n/a 118,327
Information Technology Oversight and Reform. n/a n/a n/a 15,000
Title IV--District of Columbia
Federal Payment for Resident Tuition Support 2012 such sums 40,000 30,000
Federal Payment for the Judicial Commissions n/a n/a n/a 565
Federal Payment for School Improvement...... 2016 60,000 45,000 45,000
Federal Payment for the DC National Guard... n/a n/a n/a 435
Federal Payment for Testing and Treatment of n/a n/a n/a 5,000
HIV/AIDS...................................
Title V--Independent Agencies
Administrative Conference of the United 2011 3,200 2,750 3,100
States.....................................
Consumer Safety Product Commission.......... 2014 136,409 118,000 127,000
Election Assistance Commission.............. 2005 n/a 13,888 10,100
Federal Communications Commission........... 1991 such sums 115,794 335,118
Federal Election Commission................. 1981 9,400 9,662 71,250
Federal Trade Commission.................... 1998 111,000 106,500 158,700
General Services Administration:
Government-wide Policy.................. n/a n/a n/a 60,000
Operations Expenses..................... n/a n/a n/a 49,440
Federal Citizen Services Fund........... n/a n/a n/a 55,000
Merit Systems Protection Board.............. 2007 such sums 29,110 46,835
National Historical Public Records 2009 10,000 11,250 6,000
Commission.................................
Office of Government Ethics................. 2007 such sums 11,148 17,019
Securities and Exchange Commission.......... 2015 2,250,000 1,500,000 1,695,491
----------------------------------------------------------------------------------------------------------------
Comparison With the Budget Resolution
Pursuant to clause 3(c)(2) of rule XIII of the Rules of the
House of Representatives and Section 308(a)(1)(A) of the
Congressional Budget Act of 1974, the following table compares
the levels of new budget authority provided in the bill with
the appropriate allocations under section 302(b) of the Budget
Act:
BUDGETARY IMPACT OF FINANCIAL SERVICES AND GENERAL GOVERNMENT APPROPRIATIONS ACT, 2019 (AS ORDER REPORTED ON 13
JUNE 2018) PREPARED IN CONSULTATION WITH THE CONGRESSIONAL BUDGET OFFICE PURSUANT TO SEC. 308(a), PUBLIC LAW 93-
344, AS AMENDED
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
302(b) allocation This bill
---------------------------------------------------
Budget Budget
Authority Outlays Authority Outlays
----------------------------------------------------------------------------------------------------------------
Comparison of amounts in the bill with Committee allocations
to its subcommittees: Subcommittee on Financial Services
Mandatory............................................... ........... ........... 22,406 \1\22,398
Discretionary........................................... ........... ........... 23,423 \1\24,045
General Purpose..................................... 23,423 24,490 ........... ...........
Overseas Contingency................................ n.a. n.a. ........... ...........
----------------------------------------------------------------------------------------------------------------
\1\Includes outlays from prior-year budget authority.
n.a.: not applicable
Five-Year Outlay Projections
Pursuant to section 308(a)(1)(B) of the Congressional
Budget Act of 1974, the following table contains five-year
projections prepared by the Congressional Budget Office of
outlays associated with the budget authority provided in the
accompanying bill, as provided to the Committee by the
Congressional Budget Office:
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
302(b) allocation This bill
---------------------------------------------------
Budget Budget
Authority Outlays Authority Outlays
----------------------------------------------------------------------------------------------------------------
Projection of outlays associated with the recommendation:
2019.................................................... n.a. n.a. n.a. \2\40,141
2020.................................................... n.a. n.a. n.a. \2\3,690
2021.................................................... n.a. n.a. n.a. \2\-67
2022.................................................... n.a. n.a. n.a. \2\-554
2023 and future years................................... n.a. n.a. n.a. \2\-4,421
----------------------------------------------------------------------------------------------------------------
\2\Excludes outlays from prior-year budget authority.
n.a.: not applicable
Assistance to State and Local Governments
Pursuant to section 308(a)(1)(C) of the Congressional
Budget Act of 1974, the amounts of financial assistance to
State and local governments is as follows:
[In millions of dollars]
----------------------------------------------------------------------------------------------------------------
302(b) allocation This bill
---------------------------------------------------
Budget Budget
Authority Outlays Authority Outlays
----------------------------------------------------------------------------------------------------------------
Financial assistance to State and local governments for 2019 n.a. n.a. 727 \2\166
----------------------------------------------------------------------------------------------------------------
\2\Excludes outlays from prior-year budget authority.
n.a.: not applicable
Program Duplication
No provision of this bill establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Directed Rule Making
The bill does not direct any rule making.
Comparative Statement of New Budget (Obligational) Authority
The following table provides a detailed summary, for each
Department and agency, comparing the amounts recommended in the
bill with amounts enacted for fiscal year 2017 and budget
estimates presented for fiscal year 2018.
Compliance With Rule XIII, Cl. 3(e) (Ramseyer Rule)
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT
(Public Law 111-203)
* * * * * * *
TITLE I--FINANCIAL STABILITY
* * * * * * *
Subtitle B--Office of Financial Research
* * * * * * *
SEC. 155. FUNDING.
(a) Financial Research Fund.--
(1) Fund established.--There is established in the
Treasury of the United States a separate fund to be
known as the ``Financial Research Fund''.
(2) Fund receipts.--All amounts provided to the
Office under subsection (c), and all assessments that
the Office receives under subsection (d) shall be
deposited into the Financial Research Fund.
(3) Investments authorized.--
(A) Amounts in fund may be invested.--The
Director may request the Secretary to invest
the portion of the Financial Research Fund that
is not, in the judgment of the Director,
required to meet the needs of the Office.
(B) Eligible investments.--Investments shall
be made by the Secretary in obligations of the
United States or obligations that are
guaranteed as to principal and interest by the
United States, with maturities suitable to the
needs of the Financial Research Fund, as
determined by the Director.
(4) Interest and proceeds credited.--The interest on,
and the proceeds from the sale or redemption of, any
obligations held in the Financial Research Fund shall
be credited to and form a part of the Financial
Research Fund.
(b) Use of Funds.--
(1) In general.--Funds obtained by, transferred to,
or credited to the Financial Research Fund shall be
[immediately] available to the Office as provided for
in appropriation Acts, and shall remain available until
expended, to pay the expenses of the Office in carrying
out the duties and responsibilities of the Office.
[(2) Fees, assessments, and other funds not
government funds.--Funds obtained by, transferred to,
or credited to the Financial Research Fund shall not be
construed to be Government funds or appropriated
moneys.
[(3)] (2) Amounts not subject to apportionment.--
Notwithstanding any other provision of law, amounts in
the Financial Research Fund shall not be subject to
apportionment for purposes of chapter 15 of title 31,
United States Code, or under any other authority, or
for any other purpose.
(c) Interim Funding.--During the 2-year period following the
date of enactment of this Act, the Board of Governors shall
provide to the Office an amount sufficient to cover the
expenses of the Office.
(d) [Permanent Self-funding.--] Assessment Schedule._
Beginning 2 years after the date of enactment of this Act, the
Secretary shall establish, by regulation, and with the approval
of the Council, an assessment schedule, including the
assessment base and rates, applicable to bank holding companies
with total consolidated assets of 50,000,000,000 or greater and
nonbank financial companies supervised by the Board of
Governors, that takes into account differences among such
companies, based on the considerations for establishing the
prudential standards under section 115, to collect assessments
equal to the total expenses of the Office.
* * * * * * *
----------
JUDICIAL IMPROVEMENTS ACT OF 1990
TITLE II--FEDERAL JUDGESHIPS
* * * * * * *
SEC. 203. DISTRICT JUDGES FOR THE DISTRICT COURTS.
(a) In General.--The President shall appoint, by and with the
advice and consent of the Senate--
(1) 1 additional district judge for the western
district of Arkansas;
(2) 2 additional district judges for the northern
district of California;
(3) 5 additional district judges for the central
district of California;
(4) 1 additional district judge for the southern
district of California;
(5) 2 additional district judges for the district of
Connecticut;
(6) 2 additional district judges for the middle
district of Florida;
(7) 1 additional district judge for the northern
district of Florida;
(8) 1 additional district judge for the southern
district of Florida;
(9) 1 additional district judge for the middle
district of Georgia;
(10) 1 additional district judge for the northern
district of Illinois;
(11) 1 additional district judge for the southern
district of Iowa;
(12) 1 additional district judge for the western
district of Louisiana;
(13) 1 additional district judge for the district of
Maine;
(14) 1 additional district judge for the district of
Massachusetts;
(15) 1 additional district judge for the southern
district of Mississippi;
(16) 1 additional district judge for the eastern
district of Missouri;
(17) 1 additional district judge for the district of
New Hampshire;
(18) 3 additional district judges for the district of
New Jersey;
(19) 1 additional district judge for the district of
New Mexico;
(20) 1 additional district judge for the southern
district of New York;
(21) 3 additional district judges for the eastern
district of New York;
(22) 1 additional district judge for the middle
district of North Carolina;
(23) 1 additional district judge for the southern
district of Ohio;
(24) 1 additional district judge for the northern
district of Oklahoma;
(25) 1 additional district judge for the western
district of Oklahoma;
(26) 1 additional district judge for the district of
Oregon;
(27) 3 additional district judges for the eastern
district of Pennsylvania;
(28) 1 additional district judge for the middle
district of Pennsylvania;
(29) 1 additional district judge for the district of
South Carolina;
(30) 1 additional district judge for the eastern
district of Tennessee;
(31) 1 additional district judge for the western
district of Tennessee;
(32) 1 additional district judge for the middle
district of Tennessee;
(33) 2 additional district judges for the northern
district of Texas;
(34) 1 additional district judge for the eastern
district of Texas;
(35) 5 additional district judges for the southern
district of Texas;
(36) 3 additional district judges for the western
district of Texas;
(37) 1 additional district judge for the district of
Utah;
(38) 1 additional district judge for the eastern
district of Washington;
(39) 1 additional district judge for the northern
district of West Virginia;
(40) 1 additional district judge for the southern
district of West Virginia; and
(41) 1 additional district judge for the district of
Wyoming.
(b) Existing Judgeships.--(1) The existing district
judgeships for the western district of Arkansas, the northern
district of Illinois, the northern district of Indiana, the
district of Massachusetts, the western district of New York,
the eastern district of North Carolina, the northern district
of Ohio, and the western district of Washington authorized by
section 202(b) of the Bankruptcy Amendments and Federal
Judgeship Act of 1984 (Public Law 98-353, 98 Stat. 347-348)
shall, as of the effective date of this title, be authorized
under section 133 of title 28, United States Code, and the
incumbents in those offices shall hold the office under section
133 of title 28, United States Code, as amended by this title.
(2)(A) The existing 2 district judgeships for the eastern and
western districts of Arkansas (provided by section 133 of title
28, United States Code, as in effect on the day before the
effective date of this title) shall be district judgeships for
the eastern district of Arkansas only, and the incumbents of
such judgeships shall hold the offices under section 133 of
title 28, United States Code, as amended by this title.
(B) The existing district judgeship for the northern and
southern districts of Iowa (provided by section 133 of title
28, United States Code, as in effect on the day before the
effective date of this title) shall be a district judgeship for
the northern district of Iowa only, and the incumbent of such
judgeship shall hold the office under section 133 of title 28,
United States Code, as amended by this title.
(C) The existing district judgeship for the northern,
eastern, and western districts of Oklahoma (provided by section
133 of title 28, United States Code, as in effect on the day
before the effective date of this title) and the occupant of
which has his or her official duty station at Oklahoma City on
the date of the enactment of this title, shall be a district
judgeship for the western district of Oklahoma only, and the
incumbent of such judgeship shall hold the office under section
133 of title 28, United States Code, as amended by this title.
(c) Temporary Judgeships.--The President shall appoint, by
and with the advice and consent of the Senate--
(1) 1 additional district judge for the eastern
district of California;
(2) 1 additional district judge for the district of
Hawaii;
(3) 1 additional district judge for the central
district of Illinois;
(4) 1 additional district judge for the southern
district of Illinois;
(5) 1 additional district judge for the district of
Kansas;
(6) 1 additional district judge for the western
district of Michigan;
(7) 1 additional district judge for the eastern
district of Missouri;
(8) 1 additional district judge for the district of
Nebraska;
(9) 1 additional district judge for the northern
district of New York;
(10) 1 additional district judge for the northern
district of Ohio;
(11) 1 additional district judge for the eastern
district of Pennsylvania; and
(12) 1 additional district judge for the eastern
district of Virginia.
Except with respect to the district of Kansas, the western
district of Michigan, the eastern district of Pennsylvania, the
district of Hawaii, and the northern district of Ohio, the
first vacancy in the office of district judge in each of the
judicial districts named in this subsection, occurring 10 years
or more after the confirmation date of the judge named to fill
the temporary judgeship created by this subsection, shall not
be filled. The first vacancy in the office of district judge in
the district of Kansas occurring [27 years and 6 months] 28
years and 6 months or more after the confirmation date of the
judge named to fill the temporary judgeship created for such
district under this subsection, shall not be filled. The first
vacancy in the office of district judge in the western district
of Michigan, occurring after December 1, 1995, shall not be
filled. The first vacancy in the office of district judge in
the eastern district of Pennsylvania, occurring 5 years or more
after the confirmation date of the judge named to fill the
temporary judgeship created for such district under this
subsection, shall not be filled. The first vacancy in the
office of district judge in the northern district of Ohio
occurring 19 years or more after the confirmation date of the
judge named to fill the temporary judgeship created under this
subsection shall not be filled. The first vacancy in the office
of the district judge in the district of Hawaii occurring 24
years and 6 months or more after the confirmation date of the
judge named to fill the temporary judgeship created under this
subsection shall not be filled. For districts named in this
subsection for which multiple judgeships are created by this
Act, the last of those judgeships filled shall be the
judgeships created under this section.
* * * * * * *
----------
TRANSPORTATION, TREASURY, HOUSING AND URBAN DEVELOPMENT, THE JUDICIARY,
THE DISTRICT OF COLUMBIA, AND INDEPENDENT AGENCIES APPROPRIATIONS ACT,
2006
DIVISION A--TRANSPORTATION, TREASURY, HOUSING AND URBAN DEVELOPMENT,
THE JUDICIARY, AND INDEPENDENT AGENCIES APPROPRIATIONS ACT, 2006
* * * * * * *
TITLE IV--THE JUDICIARY
* * * * * * *
Sec. 406. The existing judgeship for the eastern district of
Missouri authorized by section 203(c) of the Judicial
Improvements Act of 1990 (Public Law 101-650, 104 Stat. 5089)
as amended by Public Law 105-53, as of the effective date of
this Act, shall be extended. The first vacancy in the office of
district judge in this district occurring [25 years and 6
months] 26 years and 6 months or more after the confirmation
date of the judge named to fill the temporary judgeship created
by section 203(c) shall not be filled.
* * * * * * *
----------
21ST CENTURY DEPARTMENT OF JUSTICE APPROPRIATIONS AUTHORIZATION ACT
* * * * * * *
DIVISION A--21ST CENTURY DEPARTMENT OF JUSTICE APPROPRIATIONS
AUTHORIZATION ACT
* * * * * * *
TITLE III--MISCELLANEOUS
* * * * * * *
SEC. 312. ADDITIONAL FEDERAL JUDGESHIPS.
(a) Permanent District Judges for the District Courts.--
(1) In general.--The President shall appoint, by and
with the advice and consent of the Senate--
(A) 5 additional district judges for the
southern district of California;
(B) 1 additional district judge for the
western district of North Carolina; and
(C) 2 additional district judges for the
western district of Texas.
(2) [Omitted--Amendatory]
(b) District Judgeships for the Central and Southern
Districts of Illinois, the Northern District of New York, and
the Eastern District of Virginia.--
(1) Conversion of temporary judgeships to permanent
judgeships.--The existing district judgeships for the
central district and the southern district of Illinois,
the northern district of New York, and the eastern
district of Virginia authorized by section 203(c) (3),
(4), (9), and (12) of the Judicial Improvements Act of
1990 (Public Law 101-650, 28 U.S.C. 133 note) shall be
authorized under section 133 of title 28, United States
Code, and the incumbents in such offices shall hold the
offices under section 133 of title 28, United States
Code (as amended by this section).
(2) [Omitted--Amendatory]
(3) Effective date.--With respect to the central or
southern district of Illinois, the northern district of
New York, or the eastern district of Virginia, this
subsection shall take effect on the earlier of--
(A) the date on which the first vacancy in
the office of district judge occurs in such
district; or
(B) July 15, 2003.
(c) Temporary Judgeships.--
(1) In general.--The President shall appoint, by and
with the advice and consent of the Senate--
(A) 1 additional district judge for the
northern district of Alabama;
(B) 1 additional judge for the district of
Arizona;
(C) 1 additional judge for the central
district of California;
(D) 1 additional judge for the southern
district of Florida;
(E) 1 additional district judge for the
district of New Mexico;
(F) 1 additional district judge for the
western district of North Carolina; and
(G) 1 additional district judge for the
eastern district of Texas.
(2) Vacancies not filled.--The first vacancy in the
office of district judge in each of the offices of
district judge authorized by this subsection, except in
the case of the northern district of Alabama, the
central district of California, and the western
district of North Carolina, occurring [16 years] 17
years or more after the confirmation date of the judge
named to fill the temporary district judgeship created
in the applicable district by this subsection, shall
not be filled. The first vacancy in the office of
district judge in the northern district of Alabama
occurring 16 years or more after the confirmation date
of the judge named to fill the temporary district
judgeship created in that district by this subsection,
shall not be filled. The first vacancy in the office of
district judge in the central district of California
occurring [15 years and 6 months] 16 years and 6 months
or more after the confirmation date of the judge named
to fill the temporary district judgeship created in
that district by this subsection, shall not be filled.
The first vacancy in the office of district judge in
the western district of North Carolina occurring [14
years] 15 years or more after the confirmation date of
the judge named to fill the temporary district
judgeship created in that district by this subsection,
shall not be filled.
(3) Effective date.--This subsection shall take
effect on July 15, 2003.
(d) Extension of Temporary Federal District Court Judgeship
for the Northern District of Ohio.--
(1) In general.--[Omitted--Amendatory]
(2) Effective date.--The amendments made by this
subsection shall take effect on the date of enactment
of this Act.
(e) Authorization of Appropriations.--There are authorized to
be appropriated such sums as may be necessary to carry out this
section, including such sums as may be necessary to provide
appropriate space and facilities for the judicial positions
created by this section.
* * * * * * *
----------
PUBLIC LAW 110-246
AN ACT To provide for the continuation of agricultural and other
programs of the Department of Agriculture through fiscal year 2012, and
for other purposes.
* * * * * * *
TITLE XII--CROP INSURANCE AND DISASTER ASSISTANCE PROGRAMS
* * * * * * *
Subtitle B--Small Business Disaster Loan Program
* * * * * * *
PART II--DISASTER LENDING
* * * * * * *
[SEC. 12085. EXPEDITED DISASTER ASSISTANCE LOAN PROGRAM.
[(a) Definition.--In this section, the term ``program'' means
the expedited disaster assistance business loan program
established under subsection (b).
[(b) Creation of Program.--The Administrator shall take such
administrative action as is necessary to establish and
implement an expedited disaster assistance business loan
program under which the Administration may, on an expedited
basis, guarantee timely payment of principal and interest, as
scheduled on any loan made to an eligible small business
concern under paragraph (9) of section 7(b) of the Small
Business Act (15 U.S.C. 636(b)), as added by this Act.
[(c) Consultation Required.--In establishing the program, the
Administrator shall consult with--
[(1) appropriate personnel of the Administration
(including District Office personnel of the
Administration);
[(2) appropriate technical assistance providers
(including small business development centers);
[(3) appropriate lenders and credit unions;
[(4) the Committee on Small Business and
Entrepreneurship of the Senate; and
[(5) the Committee on Small Business of the House of
Representatives.
[(d) Rules.--
[(1) In general.--Not later than 1 year after the
date of enactment of this Act, the Administrator shall
issue rules in final form establishing and implementing
the program in accordance with this section. Such rules
shall apply as provided for in this section, beginning
90 days after their issuance in final form.
[(2) Contents.--The rules promulgated under paragraph
(1) shall--
[(A) identify whether appropriate uses of
funds under the program may include--
[(i) paying employees;
[(ii) paying bills and other
financial obligations;
[(iii) making repairs;
[(iv) purchasing inventory;
[(v) restarting or operating a small
business concern in the community in
which it was conducting operations
prior to the applicable major disaster,
or to a neighboring area, county, or
parish in the disaster area; or
[(vi) covering additional costs until
the small business concern is able to
obtain funding through insurance
claims, Federal assistance programs, or
other sources; and
[(B) set the terms and conditions of any loan
made under the program, subject to paragraph
(3).
[(3) Terms and conditions.--A loan guaranteed by the
Administration under this section--
[(A) shall be for not more than $150,000;
[(B) shall be a short-term loan, not to
exceed 180 days, except that the Administrator
may extend such term as the Administrator
determines necessary or appropriate on a case-
by-case basis;
[(C) shall have an interest rate not to
exceed 300 basis points above the interest rate
established by the Board of Governors of the
Federal Reserve System that 1 bank charges
another for reserves that are lent on an
overnight basis on the date the loan is made;
[(D) shall have no prepayment penalty;
[(E) may only be made to a borrower that
meets the requirements for a loan under section
7(b) of the Small Business Act (15 U.S.C.
636(b)), as amended by this Act;
[(F) may be refinanced as part of any
subsequent disaster assistance provided under
section 7(b) of the Small Business Act (15
U.S.C. 636(b)), as amended by this Act;
[(G) may receive expedited loss verification
and loan processing, if the applicant is--
[(i) a major source of employment in
the disaster area (which shall be
determined in the same manner as under
section 7(b)(3)(B) of the Small
Business Act (15 U.S.C. 636(b)(3)(B)));
or
[(ii) vital to recovery efforts in
the region (including providing debris
removal services, manufactured housing,
or building materials); and
[(H) shall be subject to such additional
terms as the Administrator determines necessary
or appropriate.
[(e) Report to Congress.--Not later than 5 months after the
date of enactment of this Act, the Administrator shall report
to the Committee on Small Business and Entrepreneurship of the
Senate and the Committee on Small Business of the House of
Representatives on the progress of the Administrator in
establishing the program.
[(f) Authorization.--There are authorized to be appropriated
to the Administrator such sums as are necessary to carry out
this section.]
* * * * * * *
----------
TITLE 44, UNITED STATES CODE
* * * * * * *
CHAPTER 21--NATIONAL ARCHIVES AND RECORDS ADMINISTRATION
* * * * * * *
Sec. 2107. Acceptance of records for historical preservation
(a) In General.--When it appears to the Archivist to be in
the public interest, the Archivist may--
(1) accept for deposit with the National Archives of
the United States the records of a Federal agency, the
Congress, the Architect of the Capitol, or the Supreme
Court determined by the Archivist to have sufficient
historical or other value to warrant their continued
preservation by the United States Government;
(2) direct and effect the transfer of records of a
Federal agency determined by the Archivist to have
sufficient historical or other value to warrant their
continued preservation by the United States Government
to the National Archives of the United States, as soon
as practicable, and at a time mutually agreed upon by
the Archivist and the head of that Federal agency not
later than thirty years after such records were created
or received by that agency, unless [the head of such
agency has certified in writing to the Archivist] the
Archivist determines, after consulting with the head of
such agency, that such records must be retained in the
custody of such agency for use in the conduct of the
regular business of the agency;
(3) direct and effect, with the approval of the head
of the originating Federal agency, or if the existence
of the agency has been terminated, with the approval of
the head of that agency's successor in function, if
any, the transfer of records, deposited or approved for
deposit with the National Archives of the United States
to public or educational institutions or associations;
title to the records to remain vested in the United
States unless otherwise authorized by Congress; and
(4) transfer materials from private sources
authorized to be received by the Archivist by section
2111 of this title.
(b) Early Transfer of Records.--The Archivist--
(1) in consultation with the head of the originating
Federal agency, is authorized to accept a copy of the
records described in subsection (a)(2) that have been
in existence for less than thirty years; and
(2) may not disclose any such records until the
expiration of--
(A) the thirty-year period described in
paragraph (1);
(B) any longer period established by the
Archivist by order; or
(C) any shorter period agreed to by the
originating Federal agency.
* * * * * * *
CHAPTER 29--RECORDS MANAGEMENT BY THE ARCHIVIST OF THE UNITED STATES
AND BY THE ADMINISTRATOR OF GENERAL SERVICES
* * * * * * *
Sec. 2904. General responsibilities for records management
(a) The Archivist shall provide guidance and assistance to
Federal agencies with respect to ensuring--
(1) economical and effective records management;
(2) adequate and proper documentation of the policies
and transactions of the Federal Government; and
(3) proper records disposition.
(b) The Administrator shall provide guidance and assistance
to Federal agencies to ensure economical and effective
processing of mail by Federal agencies.
(c) In carrying out the responsibilities under subsection
(a), the Archivist shall have the responsibility--
(1) to promulgate standards, procedures, and
guidelines with respect to records management and the
conduct of records management studies;
(2) to conduct research with respect to the
improvement of records management practices and
programs;
(3) to collect and disseminate information on
training programs, technological developments, and
other activities relating to records management;
(4) to establish such interagency committees and
boards as may be necessary to provide an exchange of
information among Federal agencies with respect to
records management;
(5) to direct the continuing attention of Federal
agencies and the Congress on the need for adequate
policies governing records management;
(6) to conduct records management studies and, in the
Archivist's discretion, designate the heads of
executive agencies to conduct records management
studies with respect to establishing systems and
techniques designed to save time and effort in records
management;
(7) to conduct inspections or surveys of the records
and the records management programs and practices
within and between Federal agencies;
(8) to report to the appropriate oversight and
appropriations committees of the Congress and to the
Director of the Office of Management and Budget in
January of each year and at such other times as the
Archivist deems desirable--
(A) on the results of activities conducted
pursuant to paragraphs (1) through (7) of this
section,
(B) on evaluations of responses by Federal
agencies to any recommendations resulting from
inspections or studies conducted under
paragraphs (6) and (7) of this section, and
(C) to the extent practicable, estimates of
costs to the Federal Government resulting from
the failure of agencies to implement such
recommendations.
(d) The Archivist shall promulgate regulations requiring all
Federal agencies to transfer all [digital or electronic]
records to the National Archives of the United States in
digital or electronic form to the greatest extent possible.
(e) The Administrator, in carrying out subsection (b), shall
have the responsibility to promote economy and efficiency in
the selection and utilization of space, staff, equipment, and
supplies for processing mail at Federal facilities.
* * * * * * *
CHAPTER 33--DISPOSAL OF RECORDS
* * * * * * *
Sec. 3303a. Examination by Archivist of lists and schedules of records
lacking preservation value; disposal of records
(a) The Archivist shall examine the lists and schedules
submitted to the Archivist under section 3303 of this title. If
the Archivist determines that any of the records listed in a
list or schedule submitted to the Archivist do not, or will not
after the lapse of the period specified, have sufficient
administrative, legal, research, or other value to warrant
their continued preservation by the Government, the Archivist
may, after publication of notice in the Federal Register and an
opportunity for interested persons to submit comment thereon--
(1) notify the agency to that effect; and
(2) empower the agency to dispose of those records in
accordance with regulations promulgated under section
3302 of this title.
(b) Authorizations granted under lists and schedules
submitted to the Archivist under section 3303 of this title,
and schedules promulgated by the Archivist under subsection (d)
of this section, shall be mandatory, subject to section 2909 of
this title. As between an authorization granted under lists and
schedules submitted to the Archivist under section 3303 of this
title and an authorization contained in a schedule promulgated
under subsection (d) of this section, application of the
authorization providing for the shorter retention period shall
be required, subject to section 2909 of this title.
(c) The Archivist may request advice and counsel from the
Committee on Oversight and Government Reform of the House of
Representatives and the Committee on Homeland Security and
Governmental Affairs of the Senate with respect to the disposal
of any particular records under this chapter whenever the
Archivist considers that--
(1) those particular records may be of special
interest to the Congress; or
(2) consultation with the Congress regarding the
disposal of those particular records is in the public
interest.
However, this subsection does not require the Archivist to
request such advice and counsel as a regular procedure in the
general disposal of records under this chapter.
(d) The Archivist shall promulgate schedules authorizing the
disposal, after the lapse of specified periods of time, of
records of a specified form or character common to several or
all agencies if such records will not, at the end of the
periods specified, have sufficient administrative, legal,
research, or other value to warrant their further preservation
by the United States Government.
(e) The Archivist may approve and effect the disposal of
records that are in the Archivist's legal custody, provided
that records that had been in the custody of another existing
agency may not be disposed of without [the written consent of]
advance notice to the head of the agency.
(f) The Archivist shall make an annual report to the Congress
concerning the disposal of records under this chapter,
including general descriptions of the types of records disposed
of and such other information as the Archivist considers
appropriate to keep the Congress fully informed regarding the
disposal of records under this chapter.
* * * * * * *
Sec. 3308. Disposal of similar records where prior disposal was
authorized
When it appears to the Archivist that an agency has in its
custody, or is accumulating, records of the same form or
character as those of the same agency previously authorized to
be disposed of, he may [empower] direct the head of the agency
to dispose of the records, after they have been in existence a
specified period of time, in accordance with regulations
promulgated under section 3302 of this title and without
listing or scheduling them.
* * * * * * *
----------
DEATH WITH DIGNITY ACT OF 2016
----------
LOCAL BUDGET AUTONOMY AMENDMENT ACT OF 2012
----------
DISTRICT OF COLUMBIA HOME RULE ACT
* * * * * * *
TITLE IV--THE DISTRICT CHARTER
* * * * * * *
Part D--District Budget and Financial Management
Subpart 1--Budget and Financial Management
* * * * * * *
general and special funds
Sec. 450. [The General Fund] (a) In General._The General Fund
of the District shall be composed of those District revenues
which on the effective date of this title are paid into the
Treasury of the United States and credited either to the
General Fund of the District or its miscellaneous receipts, but
shall not include any revenues which are applied by law to any
special fund existing on the date of enactment of this title.
The Council may from time to time establish such additional
special funds as may be necessary for the efficient operation
of the government of the District. All money received by any
agency, officer, or employee of the District in its or his
official capacity shall belong to the District government and
shall be paid promptly to the Mayor for deposit in the
appropriate fund, except that all money received by the
District of Columbia Courts shall be deposited in the Treasury
of the United States or the Crime Victims Fund.
(b) Application of Federal Appropriations Process.--Nothing
in this Act shall be construed as creating a continuing
appropriation of the General Fund described in subsection (a).
All funds provided for the District of Columbia shall be
appropriated on an annual fiscal year basis through the Federal
appropriations process. For each fiscal year, the District
shall be subject to all applicable requirements of subchapter
III of chapter 13 and subchapter II of chapter 15 of title 31,
United States Code (commonly known as the ``Anti-Deficiency
Act''), the Budget and Accounting Act of 1921, and all other
requirements and restrictions applicable to appropriations for
such fiscal year.
* * * * * * *
TITLE VI--RESERVATION OF CONGRESSIONAL AUTHORITY
* * * * * * *
budget process; limitations on borrowing and spending
Sec. 603. (a) Nothing in this Act shall be construed as
making any change in [existing] law, regulation, or basic
procedure and practice relating to the respective roles of the
Congress, the President, the Federal Office of Management and
Budget, and the Comptroller General of the United States in the
preparation, review, submission, examination, authorization,
and appropriation of the total budget of the District of
Columbia government[.], or as authorizing the District of
Columbia to make any such change.
(b)(1) No general obligation bonds (other than bonds to
refund outstanding indebtedness) or Treasury capital project
loans shall be issued during any fiscal year in an amount which
would cause the amount of principal and interest required to be
paid both serially and into a sinking fund in any fiscal year
on the aggregate amounts of all outstanding general obligation
bonds and such Treasury loans, to exceed 17 percent of the
District revenues (less any fees or revenues directed to
servicing revenue bonds, any revenues, charges, or fees
dedicated for the purposes of water and sewer facilities
described in section 490(a) (including fees or revenues
directed to servicing or securing revenue bonds issued for such
purposes), retirement contributions, revenues from retirement
systems, and revenues derived from such Treasury loans and the
sale or general obligation or revenue bonds) which the Mayor
estimates, and the District of Columbia Auditor certifies, will
be credited to the District during the fiscal year in which the
bonds will be issued. Treasury capital project loans include
all borrowing from the United States Treasury, except those
funds advanced to the District by the Secretary of the Treasury
under the provisions of title VI of the District of Columbia
Revenue Act of 1939.
(2) Obligations incurred pursuant to the authority contained
in the District of Columbia Stadium Act of 1957 (71 Stat. 619;
D.C. Code title 2, chapter 17, subchapter II), obligations
incurred by the agencies transferred or established by sections
201 and 202, whether incurred before or after such transfer or
establishment, and obligations incurred pursuant to general
obligation bonds of the District of Columbia issued prior to
October 1, 1996, for the financing of Department of Public
Works, Water and Sewer Utility Administration capital projects,
shall not be included in determining the aggregate amount of
all outstanding obligations subject to the limitation specified
in the preceding subsection.
(3) The 17 percent limitation specified in paragraph (1)
shall be calculated in the following manner:
(A) Determine the dollar amount equivalent to 14
percent of the District revenues (less any fees or
revenues directed to servicing revenue bonds, any
revenues, charges, or fees dedicated for the purposes
of water and sewer facilities described in section
490(a) (including fees or revenues directed to
servicing or securing revenue bonds issued for such
purposes), retirement, contributions, revenues from
retirement systems, and revenues derived from such
Treasury loans and the sale of general obligation or
revenue bonds) which the Mayor estimates, and the
District of Columbia Auditor certifies, will be
credited to the District during the fiscal year for
which the bonds will be issued.
(B) Determine the actual total amount of principal
and interest to be paid in each fiscal year for all
outstanding general obligation bonds (less the
allocable portion of principal and interest to be paid
during the year on general obligation bonds of the
District of Columbia issued prior to October 1, 1996,
for the financing of Department of Public Works, Water
and Sewer Utility Administration capital projects) and
such Treasury loans.
(C) Determine the amount of principal and interest to
be paid during each fiscal year over the term of the
proposed general obligation bond or such Treasury loan
to be issued.
(D) If in any one fiscal year the sum arrived at by
adding subparagraphs (B) and (C) exceeds the amount
determined under subparagraph (A), then the proposed
general obligation bond or such Treasury loan in
subparagraph (C) cannot be issued.
(c) Except as provided in subsection (f), the Council shall
not approve any budget which would result in expenditures being
made by the District Government, during any fiscal year, in
excess of all resources which the Mayor estimates will be
available from all funds available to the District for such
fiscal year. The budget shall identify any tax increases which
shall be required in order to balance the budget as submitted.
The Council shall be required to adopt such tax increases to
the extent its budget is approved.
(d) Except as provided in subsection (f), the Mayor shall not
forward to the President for submission to Congress a budget
which is not balanced according to the provision of subsection
603(c).
(e) Nothing in this Act shall be construed as affecting the
applicability to the District government of the provisions of
section 3679 of the Revised Statutes of the United States (31
U.S.C. 665), the so-called Anti-Deficiency Act.
(f) In the case of a fiscal year which is a control year (as
defined in section 305(4) of the District of Columbia Financial
Responsibility and Management Assistance Act of 1995), the
Council may not approve, and the Mayor may not forward to the
President, any budget which is not consistent with the
financial plan and budget established for the fiscal year under
subtitle A of title II of such Act.
* * * * * * *
----------
FAIR CREDIT REPORTING ACT
* * * * * * *
TITLE VI--CONSUMER CREDIT REPORTING
* * * * * * *
SEC. 623. RESPONSIBILITIES OF FURNISHERS OF INFORMATION TO CONSUMER
REPORTING AGENCIES.
(a) Duty of Furnishers of Information To Provide Accurate
Information.--
(1) Prohibition.--
(A) Reporting information with actual
knowledge of errors.--A person shall not
furnish any information relating to a consumer
to any consumer reporting agency if the person
knows or has reasonable cause to believe that
the information is inaccurate.
(B) Reporting information after notice and
confirmation of errors.--A person shall not
furnish information relating to a consumer to
any consumer reporting agency if--
(i) the person has been notified by
the consumer, at the address specified
by the person for such notices, that
specific information is inaccurate; and
(ii) the information is, in fact,
inaccurate.
(C) No address requirement.--A person who
clearly and conspicuously specifies to the
consumer an address for notices referred to in
subparagraph (B) shall not be subject to
subparagraph (A); however, nothing in
subparagraph (B) shall require a person to
specify such an address.
(D) Definition.--For purposes of subparagraph
(A), the term ``reasonable cause to believe
that the information is inaccurate'' means
having specific knowledge, other than solely
allegations by the consumer, that would cause a
reasonable person to have substantial doubts
about the accuracy of the information.
(2) Duty to correct and update information.--A person
who--
(A) regularly and in the ordinary course of
business furnishes information to one or more
consumer reporting agencies about the person's
transactions or experiences with any consumer;
and
(B) has furnished to a consumer reporting
agency information that the person determines
is not complete or accurate,
shall promptly notify the consumer reporting agency of
that determination and provide to the agency any
corrections to that information, or any additional
information, that is necessary to make the information
provided by the person to the agency complete and
accurate, and shall not thereafter furnish to the
agency any of the information that remains not complete
or accurate.
(3) Duty to provide notice of dispute.--If the
completeness or accuracy of any information furnished
by any person to any consumer reporting agency is
disputed to such person by a consumer, the person may
not furnish the information to any consumer reporting
agency without notice that such information is disputed
by the consumer.
(4) Duty to provide notice of closed accounts.--A
person who regularly and in the ordinary course of
business furnishes information to a consumer reporting
agency regarding a consumer who has a credit account
with that person shall notify the agency of the
voluntary closure of the account by the consumer, in
information regularly furnished for the period in which
the account is closed.
(5) Duty to provide notice of delinquency of
accounts.--(A) In general.--A person who furnishes
information to a consumer reporting agency regarding a
delinquent account being placed for collection, charged
to profit or loss, or subjected to any similar action
shall, not later than 90 days after furnishing the
information, notify the agency of the date of
delinquency on the account, which shall be the month
and year of the commencement of the delinquency on the
account that immediately preceded the action.
(B) Rule of construction.--For purposes of
this paragraph only, and provided that the
consumer does not dispute the information, a
person that furnishes information on a
delinquent account that is placed for
collection, charged for profit or loss, or
subjected to any similar action, complies with
this paragraph, if--
(i) the person reports the same date
of delinquency as that provided by the
creditor to which the account was owed
at the time at which the commencement
of the delinquency occurred, if the
creditor previously reported that date
of delinquency to a consumer reporting
agency;
(ii) the creditor did not previously
report the date of delinquency to a
consumer reporting agency, and the
person establishes and follows
reasonable procedures to obtain the
date of delinquency from the creditor
or another reliable source and reports
that date to a consumer reporting
agency as the date of delinquency; or
(iii) the creditor did not previously
report the date of delinquency to a
consumer reporting agency and the date
of delinquency cannot be reasonably
obtained as provided in clause (ii),
the person establishes and follows
reasonable procedures to ensure the
date reported as the date of
delinquency precedes the date on which
the account is placed for collection,
charged to profit or loss, or subjected
to any similar action, and reports such
date to the credit reporting agency.
(6) Duties of furnishers upon notice of identity
theft-related information.--
(A) Reasonable procedures.--A person that
furnishes information to any consumer reporting
agency shall have in place reasonable
procedures to respond to any notification that
it receives from a consumer reporting agency
under section 605B relating to information
resulting from identity theft, to prevent that
person from refurnishing such blocked
information.
(B) Information alleged to result from
identity theft.--If a consumer submits an
identity theft report to a person who furnishes
information to a consumer reporting agency at
the address specified by that person for
receiving such reports stating that information
maintained by such person that purports to
relate to the consumer resulted from identity
theft, the person may not furnish such
information that purports to relate to the
consumer to any consumer reporting agency,
unless the person subsequently knows or is
informed by the consumer that the information
is correct.
(7) Negative information.--
(A) Notice to consumer required.--
(i) In general.--If any financial
institution that extends credit and
regularly and in the ordinary course of
business furnishes information to a
consumer reporting agency described in
section 603(p) furnishes negative
information to such an agency regarding
credit extended to a customer, the
financial institution shall provide a
notice of such furnishing of negative
information, in writing, to the
customer.
(ii) Notice effective for subsequent
submissions.--After providing such
notice, the financial institution may
submit additional negative information
to a consumer reporting agency
described in section 603(p) with
respect to the same transaction,
extension of credit, account, or
customer without providing additional
notice to the customer.
(B) Time of notice.--
(i) In general.--The notice required
under subparagraph (A) shall be
provided to the customer prior to, or
no later than 30 days after, furnishing
the negative information to a consumer
reporting agency described in section
603(p).
(ii) Coordination with new account
disclosures.--If the notice is provided
to the customer prior to furnishing the
negative information to a consumer
reporting agency, the notice may not be
included in the initial disclosures
provided under section 127(a) of the
Truth in Lending Act.
(C) Coordination with other disclosures.--The
notice required under subparagraph (A)--
(i) may be included on or with any
notice of default, any billing
statement, or any other materials
provided to the customer; and
(ii) must be clear and conspicuous.
(D) Model disclosure.--
(i) Duty of bureau.--The Bureau shall
prescribe a brief model disclosure that
a financial institution may use to
comply with subparagraph (A), which
shall not exceed 30 words.
(ii) Use of model not required.--No
provision of this paragraph may be
construed to require a financial
institution to use any such model form
prescribed by the Bureau.
(iii) Compliance using model.--A
financial institution shall be deemed
to be in compliance with subparagraph
(A) if the financial institution uses
any model form prescribed by the Bureau
under this subparagraph, or the
financial institution uses any such
model form and rearranges its format.
(E) Use of notice without submitting negative
information.--No provision of this paragraph
shall be construed as requiring a financial
institution that has provided a customer with a
notice described in subparagraph (A) to furnish
negative information about the customer to a
consumer reporting agency.
(F) Safe harbor.--A financial institution
shall not be liable for failure to perform the
duties required by this paragraph if, at the
time of the failure, the financial institution
maintained reasonable policies and procedures
to comply with this paragraph or the financial
institution reasonably believed that the
institution is prohibited, by law, from
contacting the consumer.
(G) Definitions.--For purposes of this
paragraph, the following definitions shall
apply:
(i) Negative information.--The term
``negative information'' means
information concerning a customer's
delinquencies, late payments,
insolvency, or any form of default.
(ii) Customer; financial
institution.--The terms ``customer''and
``financial institution'' have the same
meanings as in section 509 Public Law
106-102.
(8) Ability of consumer to dispute information
directly with furnisher.--
(A) In general.--The Bureau shall, in
consultation with the Federal Trade Commission,
the Federal banking agencies, and the National
Credit Union Administration, prescribe
regulations that shall identify the
circumstances under which a furnisher shall be
required to reinvestigate a dispute concerning
the accuracy of information contained in a
consumer report on the consumer, based on a
direct request of a consumer.
(B) Considerations.--In prescribing
regulations under subparagraph (A), the
agencies shall weigh--
(i) the benefits to consumers with
the costs on furnishers and the credit
reporting system;
(ii) the impact on the overall
accuracy and integrity of consumer
reports of any such requirements;
(iii) whether direct contact by the
consumer with the furnisher would
likely result in the most expeditious
resolution of any such dispute; and
(iv) the potential impact on the
credit reporting process if credit
repair organizations, as defined in
section 403(3), including entities that
would be a credit repair organization,
but for section 403(3)(B)(i), are able
to circumvent the prohibition in
subparagraph (G).
(C) Applicability.--Subparagraphs (D) through
(G) shall apply in any circumstance identified
under the regulations promulgated under
subparagraph (A).
(D) Submitting a notice of dispute.--A
consumer who seeks to dispute the accuracy of
information shall provide a dispute notice
directly to such person at the address
specified by the person for such notices that--
(i) identifies the specific
information that is being disputed;
(ii) explains the basis for the
dispute; and
(iii) includes all supporting
documentation required by the furnisher
to substantiate the basis of the
dispute.
(E) Duty of person after receiving notice of
dispute.--After receiving a notice of dispute
from a consumer pursuant to subparagraph (D),
the person that provided the information in
dispute to a consumer reporting agency shall--
(i) conduct an investigation with
respect to the disputed information;
(ii) review all relevant information
provided by the consumer with the
notice;
(iii) complete such person's
investigation of the dispute and report
the results of the investigation to the
consumer before the expiration of the
period under section 611(a)(1) within
which a consumer reporting agency would
be required to complete its action if
the consumer had elected to dispute the
information under that section; and
(iv) if the investigation finds that
the information reported was
inaccurate, promptly notify each
consumer reporting agency to which the
person furnished the inaccurate
information of that determination and
provide to the agency any correction to
that information that is necessary to
make the information provided by the
person accurate.
(F) Frivolous or irrelevant dispute.--
(i) In general.--This paragraph shall
not apply if the person receiving a
notice of a dispute from a consumer
reasonably determines that the dispute
is frivolous or irrelevant, including--
(I) by reason of the failure
of a consumer to provide
sufficient information to
investigate the disputed
information; or
(II) the submission by a
consumer of a dispute that is
substantially the same as a
dispute previously submitted by
or for the consumer, either
directly to the person or
through a consumer reporting
agency under subsection (b),
with respect to which the
person has already performed
the person's duties under this
paragraph or subsection (b), as
applicable.
(ii) Notice of determination.--Upon
making any determination under clause
(i) that a dispute is frivolous or
irrelevant, the person shall notify the
consumer of such determination not
later than 5 business days after making
such determination, by mail or, if
authorized by the consumer for that
purpose, by any other means available
to the person.
(iii) Contents of notice.--A notice
under clause (ii) shall include--
(I) the reasons for the
determination under clause (i);
and
(II) identification of any
information required to
investigate the disputed
information, which may consist
of a standardized form
describing the general nature
of such information.
(G) Exclusion of credit repair
organizations.--This paragraph shall not apply
if the notice of the dispute is submitted by,
is prepared on behalf of the consumer by, or is
submitted on a form supplied to the consumer
by, a credit repair organization, as defined in
section 403(3), or an entity that would be a
credit repair organization, but for section
403(3)(B)(i).
(9) Duty to provide notice of status as medical
information furnisher.--A person whose primary business
is providing medical services, products, or devices, or
the person's agent or assignee, who furnishes
information to a consumer reporting agency on a
consumer shall be considered a medical information
furnisher for purposes of this title, and shall notify
the agency of such status.
(b) Duties of Furnishers of Information Upon Notice of
Dispute.--
(1) In general.--After receiving notice pursuant to
section 611(a)(2) of a dispute with regard to the
completeness or accuracy of any information provided by
a person to a consumer reporting agency, the person
shall--
(A) conduct an investigation with respect to
the disputed information;
(B) review all relevant information provided
by the consumer reporting agency pursuant to
section 611(a)(2);
(C) report the results of the investigation
to the consumer reporting agency;
(D) if the investigation finds that the
information is incomplete or inaccurate, report
those results to all other consumer reporting
agencies to which the person furnished the
information and that compile and maintain files
on consumers on a nationwide basis; and
(E) if an item of information disputed by a
consumer is found to be inaccurate or
incomplete or cannot be verified after any
reinvestigation under paragraph (1), for
purposes of reporting to a consumer reporting
agency only, as appropriate, based on the
results of the reinvestigation promptly--
(i) modify that item of information;
(ii) delete that item of information;
or
(iii) permanently block the reporting
of that item of information.
(2) Deadline.--A person shall complete all
investigations, reviews, and reports required under
paragraph (1) regarding information provided by the
person to a consumer reporting agency, before the
expiration of the period under section 611(a)(1) within
which the consumer reporting agency is required to
complete actions required by that section regarding
that information.
(c) Limitation on Liability.--Except as provided in section
621(c)(1)(B), sections 616 and 617 do not apply to any
violation of--
(1) subsection (a) of this section, including any
regulations issued thereunder;
(2) subsection (e) of this section, except that
nothing in this paragraph shall limit, expand, or
otherwise affect liability under section 616 or 617, as
applicable, for violations of subsection (b) of this
section; or
(3) subsection (e) of section 615.
(d) Limitation on Enforcement.--The provisions of law
described in paragraphs (1) through (3) of subsection (c)
(other than with respect to the exception described in
paragraph (2) of subsection (c)) shall be enforced exclusively
as provided under section 621 by the Federal agencies and
officials and the State officials identified in section 621.
(e) Accuracy Guidelines and Regulations Required.--
(1) Guidelines.--The Bureau shall, with respect to
persons or entities that are subject to the enforcement
authority of the Bureau under section 621--
(A) establish and maintain guidelines for use
by each person that furnishes information to a
consumer reporting agency regarding the
accuracy and integrity of the information
relating to consumers that such entities
furnish to consumer reporting agencies, and
update such guidelines as often as necessary;
and
(B) prescribe regulations requiring each
person that furnishes information to a consumer
reporting agency to establish reasonable
policies and procedures for implementing the
guidelines established pursuant to subparagraph
(A).
(2) Criteria.--In developing the guidelines required
by paragraph (1)(A), the Bureau shall--
(A) identify patterns, practices, and
specific forms of activity that can compromise
the accuracy and integrity of information
furnished to consumer reporting agencies;
(B) review the methods (including
technological means) used to furnish
information relating to consumers to consumer
reporting agencies;
(C) determine whether persons that furnish
information to consumer reporting agencies
maintain and enforce policies to ensure the
accuracy and integrity of information furnished
to consumer reporting agencies; and
(D) examine the policies and processes that
persons that furnish information to consumer
reporting agencies employ to conduct
reinvestigations and correct inaccurate
information relating to consumers that has been
furnished to consumer reporting agencies.
(f) Full-File Credit Reporting.--
(1) In general.--Subject to the limitation in
paragraph (2) and notwithstanding any other provision
of law, a person or the Secretary of Housing and Urban
Development may furnish to a consumer reporting agency
information relating to the performance of a consumer
in making payments--
(A) under a lease agreement with respect to a
dwelling, including such a lease in which the
Department of Housing and Urban Development
provides subsidized payments for occupancy in a
dwelling; or
(B) pursuant to a contract for a utility or
telecommunications service.
(2) Limitation.--Information about a consumer's usage
of any utility services provided by a utility or
telecommunication firm may be furnished to a consumer
reporting agency only to the extent that such
information relates to payment by the consumer for the
services of such utility or telecommunication service
or other terms of the provision of the services to the
consumer, including any deposit, discount, or
conditions for interruption or termination of the
services.
(3) Payment plan.--An energy utility firm may not
report payment information to a consumer reporting
agency with respect to an outstanding balance of a
consumer as late if--
(A) the energy utility firm and the consumer
have entered into a payment plan (including a
deferred payment agreement, an arrearage
management program, or a debt forgiveness
program) with respect to such outstanding
balance; and
(B) the consumer is meeting the obligations
of the payment plan, as determined by the
energy utility firm.
(4) Definitions.--In this subsection, the following
definitions shall apply:
(A) Energy utility firm.--The term ``energy
utility firm'' means an entity that provides
gas or electric utility services to the public.
(B) Utility or telecommunication firm.--The
term ``utility or telecommunication firm''
means an entity that provides utility services
to the public through pipe, wire, landline,
wireless, cable, or other connected facilities,
or radio, electronic, or similar transmission
(including the extension of such facilities).
* * * * * * *
----------
CONSUMER CREDIT PROTECTION ACT
* * * * * * *
TITLE VI--CONSUMER CREDIT REPORTING
* * * * * * *
SEC. 623. RESPONSIBILITIES OF FURNISHERS OF INFORMATION TO CONSUMER
REPORTING AGENCIES.
(a) Duty of Furnishers of Information To Provide Accurate
Information.--
(1) Prohibition.--
(A) Reporting information with actual
knowledge of errors.--A person shall not
furnish any information relating to a consumer
to any consumer reporting agency if the person
knows or has reasonable cause to believe that
the information is inaccurate.
(B) Reporting information after notice and
confirmation of errors.--A person shall not
furnish information relating to a consumer to
any consumer reporting agency if--
(i) the person has been notified by
the consumer, at the address specified
by the person for such notices, that
specific information is inaccurate; and
(ii) the information is, in fact,
inaccurate.
(C) No address requirement.--A person who
clearly and conspicuously specifies to the
consumer an address for notices referred to in
subparagraph (B) shall not be subject to
subparagraph (A); however, nothing in
subparagraph (B) shall require a person to
specify such an address.
(D) Definition.--For purposes of subparagraph
(A), the term ``reasonable cause to believe
that the information is inaccurate'' means
having specific knowledge, other than solely
allegations by the consumer, that would cause a
reasonable person to have substantial doubts
about the accuracy of the information.
(2) Duty to correct and update information.--A person
who--
(A) regularly and in the ordinary course of
business furnishes information to one or more
consumer reporting agencies about the person's
transactions or experiences with any consumer;
and
(B) has furnished to a consumer reporting
agency information that the person determines
is not complete or accurate,
shall promptly notify the consumer reporting agency of
that determination and provide to the agency any
corrections to that information, or any additional
information, that is necessary to make the information
provided by the person to the agency complete and
accurate, and shall not thereafter furnish to the
agency any of the information that remains not complete
or accurate.
(3) Duty to provide notice of dispute.--If the
completeness or accuracy of any information furnished
by any person to any consumer reporting agency is
disputed to such person by a consumer, the person may
not furnish the information to any consumer reporting
agency without notice that such information is disputed
by the consumer.
(4) Duty to provide notice of closed accounts.--A
person who regularly and in the ordinary course of
business furnishes information to a consumer reporting
agency regarding a consumer who has a credit account
with that person shall notify the agency of the
voluntary closure of the account by the consumer, in
information regularly furnished for the period in which
the account is closed.
(5) Duty to provide notice of delinquency of
accounts.--(A) In general.--A person who furnishes
information to a consumer reporting agency regarding a
delinquent account being placed for collection, charged
to profit or loss, or subjected to any similar action
shall, not later than 90 days after furnishing the
information, notify the agency of the date of
delinquency on the account, which shall be the month
and year of the commencement of the delinquency on the
account that immediately preceded the action.
(B) Rule of construction.--For purposes of
this paragraph only, and provided that the
consumer does not dispute the information, a
person that furnishes information on a
delinquent account that is placed for
collection, charged for profit or loss, or
subjected to any similar action, complies with
this paragraph, if--
(i) the person reports the same date
of delinquency as that provided by the
creditor to which the account was owed
at the time at which the commencement
of the delinquency occurred, if the
creditor previously reported that date
of delinquency to a consumer reporting
agency;
(ii) the creditor did not previously
report the date of delinquency to a
consumer reporting agency, and the
person establishes and follows
reasonable procedures to obtain the
date of delinquency from the creditor
or another reliable source and reports
that date to a consumer reporting
agency as the date of delinquency; or
(iii) the creditor did not previously
report the date of delinquency to a
consumer reporting agency and the date
of delinquency cannot be reasonably
obtained as provided in clause (ii),
the person establishes and follows
reasonable procedures to ensure the
date reported as the date of
delinquency precedes the date on which
the account is placed for collection,
charged to profit or loss, or subjected
to any similar action, and reports such
date to the credit reporting agency.
(6) Duties of furnishers upon notice of identity
theft-related information.--
(A) Reasonable procedures.--A person that
furnishes information to any consumer reporting
agency shall have in place reasonable
procedures to respond to any notification that
it receives from a consumer reporting agency
under section 605B relating to information
resulting from identity theft, to prevent that
person from refurnishing such blocked
information.
(B) Information alleged to result from
identity theft.--If a consumer submits an
identity theft report to a person who furnishes
information to a consumer reporting agency at
the address specified by that person for
receiving such reports stating that information
maintained by such person that purports to
relate to the consumer resulted from identity
theft, the person may not furnish such
information that purports to relate to the
consumer to any consumer reporting agency,
unless the person subsequently knows or is
informed by the consumer that the information
is correct.
(7) Negative information.--
(A) Notice to consumer required.--
(i) In general.--If any financial
institution that extends credit and
regularly and in the ordinary course of
business furnishes information to a
consumer reporting agency described in
section 603(p) furnishes negative
information to such an agency regarding
credit extended to a customer, the
financial institution shall provide a
notice of such furnishing of negative
information, in writing, to the
customer.
(ii) Notice effective for subsequent
submissions.--After providing such
notice, the financial institution may
submit additional negative information
to a consumer reporting agency
described in section 603(p) with
respect to the same transaction,
extension of credit, account, or
customer without providing additional
notice to the customer.
(B) Time of notice.--
(i) In general.--The notice required
under subparagraph (A) shall be
provided to the customer prior to, or
no later than 30 days after, furnishing
the negative information to a consumer
reporting agency described in section
603(p).
(ii) Coordination with new account
disclosures.--If the notice is provided
to the customer prior to furnishing the
negative information to a consumer
reporting agency, the notice may not be
included in the initial disclosures
provided under section 127(a) of the
Truth in Lending Act.
(C) Coordination with other disclosures.--The
notice required under subparagraph (A)--
(i) may be included on or with any
notice of default, any billing
statement, or any other materials
provided to the customer; and
(ii) must be clear and conspicuous.
(D) Model disclosure.--
(i) Duty of bureau.--The Bureau shall
prescribe a brief model disclosure that
a financial institution may use to
comply with subparagraph (A), which
shall not exceed 30 words.
(ii) Use of model not required.--No
provision of this paragraph may be
construed to require a financial
institution to use any such model form
prescribed by the Bureau.
(iii) Compliance using model.--A
financial institution shall be deemed
to be in compliance with subparagraph
(A) if the financial institution uses
any model form prescribed by the Bureau
under this subparagraph, or the
financial institution uses any such
model form and rearranges its format.
(E) Use of notice without submitting negative
information.--No provision of this paragraph
shall be construed as requiring a financial
institution that has provided a customer with a
notice described in subparagraph (A) to furnish
negative information about the customer to a
consumer reporting agency.
(F) Safe harbor.--A financial institution
shall not be liable for failure to perform the
duties required by this paragraph if, at the
time of the failure, the financial institution
maintained reasonable policies and procedures
to comply with this paragraph or the financial
institution reasonably believed that the
institution is prohibited, by law, from
contacting the consumer.
(G) Definitions.--For purposes of this
paragraph, the following definitions shall
apply:
(i) Negative information.--The term
``negative information'' means
information concerning a customer's
delinquencies, late payments,
insolvency, or any form of default.
(ii) Customer; financial
institution.--The terms ``customer''and
``financial institution'' have the same
meanings as in section 509 Public Law
106-102.
(8) Ability of consumer to dispute information
directly with furnisher.--
(A) In general.--The Bureau shall, in
consultation with the Federal Trade Commission,
the Federal banking agencies, and the National
Credit Union Administration, prescribe
regulations that shall identify the
circumstances under which a furnisher shall be
required to reinvestigate a dispute concerning
the accuracy of information contained in a
consumer report on the consumer, based on a
direct request of a consumer.
(B) Considerations.--In prescribing
regulations under subparagraph (A), the
agencies shall weigh--
(i) the benefits to consumers with
the costs on furnishers and the credit
reporting system;
(ii) the impact on the overall
accuracy and integrity of consumer
reports of any such requirements;
(iii) whether direct contact by the
consumer with the furnisher would
likely result in the most expeditious
resolution of any such dispute; and
(iv) the potential impact on the
credit reporting process if credit
repair organizations, as defined in
section 403(3), including entities that
would be a credit repair organization,
but for section 403(3)(B)(i), are able
to circumvent the prohibition in
subparagraph (G).
(C) Applicability.--Subparagraphs (D) through
(G) shall apply in any circumstance identified
under the regulations promulgated under
subparagraph (A).
(D) Submitting a notice of dispute.--A
consumer who seeks to dispute the accuracy of
information shall provide a dispute notice
directly to such person at the address
specified by the person for such notices that--
(i) identifies the specific
information that is being disputed;
(ii) explains the basis for the
dispute; and
(iii) includes all supporting
documentation required by the furnisher
to substantiate the basis of the
dispute.
(E) Duty of person after receiving notice of
dispute.--After receiving a notice of dispute
from a consumer pursuant to subparagraph (D),
the person that provided the information in
dispute to a consumer reporting agency shall--
(i) conduct an investigation with
respect to the disputed information;
(ii) review all relevant information
provided by the consumer with the
notice;
(iii) complete such person's
investigation of the dispute and report
the results of the investigation to the
consumer before the expiration of the
period under section 611(a)(1) within
which a consumer reporting agency would
be required to complete its action if
the consumer had elected to dispute the
information under that section; and
(iv) if the investigation finds that
the information reported was
inaccurate, promptly notify each
consumer reporting agency to which the
person furnished the inaccurate
information of that determination and
provide to the agency any correction to
that information that is necessary to
make the information provided by the
person accurate.
(F) Frivolous or irrelevant dispute.--
(i) In general.--This paragraph shall
not apply if the person receiving a
notice of a dispute from a consumer
reasonably determines that the dispute
is frivolous or irrelevant, including--
(I) by reason of the failure
of a consumer to provide
sufficient information to
investigate the disputed
information; or
(II) the submission by a
consumer of a dispute that is
substantially the same as a
dispute previously submitted by
or for the consumer, either
directly to the person or
through a consumer reporting
agency under subsection (b),
with respect to which the
person has already performed
the person's duties under this
paragraph or subsection (b), as
applicable.
(ii) Notice of determination.--Upon
making any determination under clause
(i) that a dispute is frivolous or
irrelevant, the person shall notify the
consumer of such determination not
later than 5 business days after making
such determination, by mail or, if
authorized by the consumer for that
purpose, by any other means available
to the person.
(iii) Contents of notice.--A notice
under clause (ii) shall include--
(I) the reasons for the
determination under clause (i);
and
(II) identification of any
information required to
investigate the disputed
information, which may consist
of a standardized form
describing the general nature
of such information.
(G) Exclusion of credit repair
organizations.--This paragraph shall not apply
if the notice of the dispute is submitted by,
is prepared on behalf of the consumer by, or is
submitted on a form supplied to the consumer
by, a credit repair organization, as defined in
section 403(3), or an entity that would be a
credit repair organization, but for section
403(3)(B)(i).
(9) Duty to provide notice of status as medical
information furnisher.--A person whose primary business
is providing medical services, products, or devices, or
the person's agent or assignee, who furnishes
information to a consumer reporting agency on a
consumer shall be considered a medical information
furnisher for purposes of this title, and shall notify
the agency of such status.
(b) Duties of Furnishers of Information Upon Notice of
Dispute.--
(1) In general.--After receiving notice pursuant to
section 611(a)(2) of a dispute with regard to the
completeness or accuracy of any information provided by
a person to a consumer reporting agency, the person
shall--
(A) conduct an investigation with respect to
the disputed information;
(B) review all relevant information provided
by the consumer reporting agency pursuant to
section 611(a)(2);
(C) report the results of the investigation
to the consumer reporting agency;
(D) if the investigation finds that the
information is incomplete or inaccurate, report
those results to all other consumer reporting
agencies to which the person furnished the
information and that compile and maintain files
on consumers on a nationwide basis; and
(E) if an item of information disputed by a
consumer is found to be inaccurate or
incomplete or cannot be verified after any
reinvestigation under paragraph (1), for
purposes of reporting to a consumer reporting
agency only, as appropriate, based on the
results of the reinvestigation promptly--
(i) modify that item of information;
(ii) delete that item of information;
or
(iii) permanently block the reporting
of that item of information.
(2) Deadline.--A person shall complete all
investigations, reviews, and reports required under
paragraph (1) regarding information provided by the
person to a consumer reporting agency, before the
expiration of the period under section 611(a)(1) within
which the consumer reporting agency is required to
complete actions required by that section regarding
that information.
(c) Limitation on Liability.--Except as provided in section
621(c)(1)(B), sections 616 and 617 do not apply to any
violation of--
(1) subsection (a) of this section, including any
regulations issued thereunder;
(2) subsection (e) of this section, except that
nothing in this paragraph shall limit, expand, or
otherwise affect liability under section 616 or 617, as
applicable, for violations of subsection (b) of this
section; [or]
(3) subsection (f) of this section, including any
regulations issued thereunder; or
[(3)] (4) subsection (e) of section 615.
(d) Limitation on Enforcement.--The provisions of law
described in paragraphs (1) through (3) of subsection (c)
(other than with respect to the exception described in
paragraph (2) of subsection (c)) shall be enforced exclusively
as provided under section 621 by the Federal agencies and
officials and the State officials identified in section 621.
(e) Accuracy Guidelines and Regulations Required.--
(1) Guidelines.--The Bureau shall, with respect to
persons or entities that are subject to the enforcement
authority of the Bureau under section 621--
(A) establish and maintain guidelines for use
by each person that furnishes information to a
consumer reporting agency regarding the
accuracy and integrity of the information
relating to consumers that such entities
furnish to consumer reporting agencies, and
update such guidelines as often as necessary;
and
(B) prescribe regulations requiring each
person that furnishes information to a consumer
reporting agency to establish reasonable
policies and procedures for implementing the
guidelines established pursuant to subparagraph
(A).
(2) Criteria.--In developing the guidelines required
by paragraph (1)(A), the Bureau shall--
(A) identify patterns, practices, and
specific forms of activity that can compromise
the accuracy and integrity of information
furnished to consumer reporting agencies;
(B) review the methods (including
technological means) used to furnish
information relating to consumers to consumer
reporting agencies;
(C) determine whether persons that furnish
information to consumer reporting agencies
maintain and enforce policies to ensure the
accuracy and integrity of information furnished
to consumer reporting agencies; and
(D) examine the policies and processes that
persons that furnish information to consumer
reporting agencies employ to conduct
reinvestigations and correct inaccurate
information relating to consumers that has been
furnished to consumer reporting agencies.
* * * * * * *
----------
SECURITIES EXCHANGE ACT OF 1934
TITLE I--REGULATION OF SECURITIES EXCHANGES
* * * * * * *
definitions and application of title
Sec. 3. (a) When used in this title, unless the context
otherwise requires--
(1) The term ``exchange'' means any organization,
association, or group of persons, whether incorporated
or unincorporated, which constitutes, maintains, or
provides a market place or facilities for bringing
together purchasers and sellers of securities or for
otherwise performing with respect to securities the
functions commonly performed by a stock exchange as
that term is generally understood, and includes the
market place and the market facilities maintained by
such exchange.
(2) The term ``facility'' when used with respect to
an exchange includes its premises, tangible or
intangible property whether on the premises or not, any
right to the use of such premises or property or any
service thereof for the purpose of effecting or
reporting a transaction on an exchange (including,
among other things, any system of communication to or
from the exchange, by ticker or otherwise, maintained
by or with the consent of the exchange), and any right
of the exchange to the use of any property or service.
(3)(A) The term ``member'' when used with respect to
a national securities exchange means (i) any natural
person permitted to effect transactions on the floor of
the exchange without the services of another person
acting as broker, (ii) any registered broker or dealer
with which such a natural person is associated, (iii)
any registered broker or dealer permitted to designate
as a representative such a natural person, and (iv) any
other registered broker or dealer which agrees to be
regulated by such exchange and with respect to which
the exchange undertakes to enforce compliance with the
provisions of this title, the rules and regulations
thereunder, and its own rules. For purposes of sections
6(b)(1), 6(b)(4), 6(b)(6), 6(b)(7), 6(d), 17(d), 19(d),
19(e), 19(g), 19(h), and 21 of this title, the term
``member'' when used with respect to a national
securities exchange also means, to the extent of the
rules of the exchange specified by the Commission, any
person required by the Commission to comply with such
rules pursuant to section 6(f) of this title.
(B) The term ``member'' when used with respect to a
registered securities association means any broker or
dealer who agrees to be regulated by such association
and with respect to whom the association undertakes to
enforce compliance with the provisions of this title,
the rules and regulations thereunder, and its own
rules.
(4) Broker.--
(A) In general.--The term ``broker'' means
any person engaged in the business of effecting
transactions in securities for the account of
others.
(B) Exception for certain bank activities.--A
bank shall not be considered to be a broker
because the bank engages in any one or more of
the following activities under the conditions
described:
(i) Third party brokerage
arrangements.--The bank enters into a
contractual or other written
arrangement with a broker or dealer
registered under this title under which
the broker or dealer offers brokerage
services on or off the premises of the
bank if--
(I) such broker or dealer is
clearly identified as the
person performing the brokerage
services;
(II) the broker or dealer
performs brokerage services in
an area that is clearly marked
and, to the extent practicable,
physically separate from the
routine deposit-taking
activities of the bank;
(III) any materials used by
the bank to advertise or
promote generally the
availability of brokerage
services under the arrangement
clearly indicate that the
brokerage services are being
provided by the broker or
dealer and not by the bank;
(IV) any materials used by
the bank to advertise or
promote generally the
availability of brokerage
services under the arrangement
are in compliance with the
Federal securities laws before
distribution;
(V) bank employees (other
than associated persons of a
broker or dealer who are
qualified pursuant to the rules
of a self-regulatory
organization) perform only
clerical or ministerial
functions in connection with
brokerage transactions
including scheduling
appointments with the
associated persons of a broker
or dealer, except that bank
employees may forward customer
funds or securities and may
describe in general terms the
types of investment vehicles
available from the bank and the
broker or dealer under the
arrangement;
(VI) bank employees do not
receive incentive compensation
for any brokerage transaction
unless such employees are
associated persons of a broker
or dealer and are qualified
pursuant to the rules of a
self-regulatory organization,
except that the bank employees
may receive compensation for
the referral of any customer if
the compensation is a nominal
one-time cash fee of a fixed
dollar amount and the payment
of the fee is not contingent on
whether the referral results in
a transaction;
(VII) such services are
provided by the broker or
dealer on a basis in which all
customers that receive any
services are fully disclosed to
the broker or dealer;
(VIII) the bank does not
carry a securities account of
the customer except as
permitted under clause (ii) or
(viii) of this subparagraph;
and
(IX) the bank, broker, or
dealer informs each customer
that the brokerage services are
provided by the broker or
dealer and not by the bank and
that the securities are not
deposits or other obligations
of the bank, are not guaranteed
by the bank, and are not
insured by the Federal Deposit
Insurance Corporation.
(ii) Trust activities.--The bank
effects transactions in a trustee
capacity, or effects transactions in a
fiduciary capacity in its trust
department or other department that is
regularly examined by bank examiners
for compliance with fiduciary
principles and standards, and--
(I) is chiefly compensated
for such transactions,
consistent with fiduciary
principles and standards, on
the basis of an administration
or annual fee (payable on a
monthly, quarterly, or other
basis), a percentage of assets
under management, or a flat or
capped per order processing fee
equal to not more than the cost
incurred by the bank in
connection with executing
securities transactions for
trustee and fiduciary
customers, or any combination
of such fees; and
(II) does not publicly
solicit brokerage business,
other than by advertising that
it effects transactions in
securities in conjunction with
advertising its other trust
activities.
(iii) Permissible securities
transactions.--The bank effects
transactions in--
(I) commercial paper, bankers
acceptances, or commercial
bills;
(II) exempted securities;
(III) qualified Canadian
government obligations as
defined in section 5136 of the
Revised Statutes, in conformity
with section 15C of this title
and the rules and regulations
thereunder, or obligations of
the North American Development
Bank; or
(IV) any standardized, credit
enhanced debt security issued
by a foreign government
pursuant to the March 1989 plan
of then Secretary of the
Treasury Brady, used by such
foreign government to retire
outstanding commercial bank
loans.
(iv) Certain stock purchase plans.--
(I) Employee benefit plans.--
The bank effects transactions,
as part of its transfer agency
activities, in the securities
of an issuer as part of any
pension, retirement, profit-
sharing, bonus, thrift,
savings, incentive, or other
similar benefit plan for the
employees of that issuer or its
affiliates (as defined in
section 2 of the Bank Holding
Company Act of 1956), if the
bank does not solicit
transactions or provide
investment advice with respect
to the purchase or sale of
securities in connection with
the plan.
(II) Dividend reinvestment
plans.--The bank effects
transactions, as part of its
transfer agency activities, in
the securities of an issuer as
part of that issuer's dividend
reinvestment plan, if--
(aa) the bank does
not solicit
transactions or provide
investment advice with
respect to the purchase
or sale of securities
in connection with the
plan; and
(bb) the bank does
not net shareholders'
buy and sell orders,
other than for programs
for odd-lot holders or
plans registered with
the Commission.
(III) Issuer plans.--The bank
effects transactions, as part
of its transfer agency
activities, in the securities
of an issuer as part of a plan
or program for the purchase or
sale of that issuer's shares,
if--
(aa) the bank does
not solicit
transactions or provide
investment advice with
respect to the purchase
or sale of securities
in connection with the
plan or program; and
(bb) the bank does
not net shareholders'
buy and sell orders,
other than for programs
for odd-lot holders or
plans registered with
the Commission.
(IV) Permissible delivery of
materials.--The exception to
being considered a broker for a
bank engaged in activities
described in subclauses (I),
(II), and (III) will not be
affected by delivery of written
or electronic plan materials by
a bank to employees of the
issuer, shareholders of the
issuer, or members of affinity
groups of the issuer, so long
as such materials are--
(aa) comparable in
scope or nature to that
permitted by the
Commission as of the
date of the enactment
of the Gramm-Leach-
Bliley Act; or
(bb) otherwise
permitted by the
Commission.
(v) Sweep accounts.--The bank effects
transactions as part of a program for
the investment or reinvestment of
deposit funds into any no-load, open-
end management investment company
registered under the Investment Company
Act of 1940 that holds itself out as a
money market fund.
(vi) Affiliate transactions.--The
bank effects transactions for the
account of any affiliate of the bank
(as defined in section 2 of the Bank
Holding Company Act of 1956) other
than--
(I) a registered broker or
dealer; or
(II) an affiliate that is
engaged in merchant banking, as
described in section 4(k)(4)(H)
of the Bank Holding Company Act
of 1956.
(vii) Private securities offerings.--
The bank--
(I) effects sales as part of
a primary offering of
securities not involving a
public offering, pursuant to
section 3(b), 4(2), or 4(5) of
the Securities Act of 1933 or
the rules and regulations
issued thereunder;
(II) at any time after the
date that is 1 year after the
date of the enactment of the
Gramm-Leach-Bliley Act, is not
affiliated with a broker or
dealer that has been registered
for more than 1 year in
accordance with this Act, and
engages in dealing, market
making, or underwriting
activities, other than with
respect to exempted securities;
and
(III) if the bank is not
affiliated with a broker or
dealer, does not effect any
primary offering described in
subclause (I) the aggregate
amount of which exceeds 25
percent of the capital of the
bank, except that the
limitation of this subclause
shall not apply with respect to
any sale of government
securities or municipal
securities.
(viii) Safekeeping and custody
activities.--
(I) In general.--The bank, as
part of customary banking
activities--
(aa) provides
safekeeping or custody
services with respect
to securities,
including the exercise
of warrants and other
rights on behalf of
customers;
(bb) facilitates the
transfer of funds or
securities, as a
custodian or a clearing
agency, in connection
with the clearance and
settlement of its
customers' transactions
in securities;
(cc) effects
securities lending or
borrowing transactions
with or on behalf of
customers as part of
services provided to
customers pursuant to
division (aa) or (bb)
or invests cash
collateral pledged in
connection with such
transactions;
(dd) holds securities
pledged by a customer
to another person or
securities subject to
purchase or resale
agreements involving a
customer, or
facilitates the
pledging or transfer of
such securities by book
entry or as otherwise
provided under
applicable law, if the
bank maintains records
separately identifying
the securities and the
customer; or
(ee) serves as a
custodian or provider
of other related
administrative services
to any individual
retirement account,
pension, retirement,
profit sharing, bonus,
thrift savings,
incentive, or other
similar benefit plan.
(II) Exception for carrying
broker activities.--The
exception to being considered a
broker for a bank engaged in
activities described in
subclause (I) shall not apply
if the bank, in connection with
such activities, acts in the
United States as a carrying
broker (as such term, and
different formulations thereof,
are used in section 15(c)(3) of
this title and the rules and
regulations thereunder) for any
broker or dealer, unless such
carrying broker activities are
engaged in with respect to
government securities (as
defined in paragraph (42) of
this subsection).
(ix) Identified banking products.--
The bank effects transactions in
identified banking products as defined
in section 206 of the Gramm-Leach-
Bliley Act.
(x) Municipal securities.--The bank
effects transactions in municipal
securities.
(xi) De minimis exception.--The bank
effects, other than in transactions
referred to in clauses (i) through (x),
not more than 500 transactions in
securities in any calendar year, and
such transactions are not effected by
an employee of the bank who is also an
employee of a broker or dealer.
(C) Execution by broker or dealer.--The
exception to being considered a broker for a
bank engaged in activities described in clauses
(ii), (iv), and (viii) of subparagraph (B)
shall not apply if the activities described in
such provisions result in the trade in the
United States of any security that is a
publicly traded security in the United States,
unless--
(i) the bank directs such trade to a
registered broker or dealer for
execution;
(ii) the trade is a cross trade or
other substantially similar trade of a
security that--
(I) is made by the bank or
between the bank and an
affiliated fiduciary; and
(II) is not in contravention
of fiduciary principles
established under applicable
Federal or State law; or
(iii) the trade is conducted in some
other manner permitted under rules,
regulations, or orders as the
Commission may prescribe or issue.
(D) Fiduciary capacity.--For purposes of
subparagraph (B)(ii), the term ``fiduciary
capacity'' means--
(i) in the capacity as trustee,
executor, administrator, registrar of
stocks and bonds, transfer agent,
guardian, assignee, receiver, or
custodian under a uniform gift to minor
act, or as an investment adviser if the
bank receives a fee for its investment
advice;
(ii) in any capacity in which the
bank possesses investment discretion on
behalf of another; or
(iii) in any other similar capacity.
(E) Exception for entities subject to section
15(e).--The term ``broker'' does not include a
bank that--
(i) was, on the day before the date
of enactment of the Gramm-Leach-Bliley
Act, subject to section 15(e); and
(ii) is subject to such restrictions
and requirements as the Commission
considers appropriate.
(F) Joint rulemaking required.--The
Commission and the Board of Governors of the
Federal Reserve System shall jointly adopt a
single set of rules or regulations to implement
the exceptions in subparagraph (B).
(5) Dealer.--
(A) In general.--The term ``dealer'' means
any person engaged in the business of buying
and selling securities (not including security-
based swaps, other than security-based swaps
with or for persons that are not eligible
contract participants) for such person's own
account through a broker or otherwise.
(B) Exception for person not engaged in the
business of dealing.--The term ``dealer'' does
not include a person that buys or sells
securities (not including security-based swaps,
other than security-based swaps with or for
persons that are not eligible contract
participants) for such person's own account,
either individually or in a fiduciary capacity,
but not as a part of a regular business.
(C) Exception for certain bank activities.--A
bank shall not be considered to be a dealer
because the bank engages in any of the
following activities under the conditions
described:
(i) Permissible securities
transactions.--The bank buys or sells--
(I) commercial paper, bankers
acceptances, or commercial
bills;
(II) exempted securities;
(III) qualified Canadian
government obligations as
defined in section 5136 of the
Revised Statutes of the United
States, in conformity with
section 15C of this title and
the rules and regulations
thereunder, or obligations of
the North American Development
Bank; or
(IV) any standardized, credit
enhanced debt security issued
by a foreign government
pursuant to the March 1989 plan
of then Secretary of the
Treasury Brady, used by such
foreign government to retire
outstanding commercial bank
loans.
(ii) Investment, trustee, and
fiduciary transactions.--The bank buys
or sells securities for investment
purposes--
(I) for the bank; or
(II) for accounts for which
the bank acts as a trustee or
fiduciary.
(iii) Asset-backed transactions.--The
bank engages in the issuance or sale to
qualified investors, through a grantor
trust or other separate entity, of
securities backed by or representing an
interest in notes, drafts, acceptances,
loans, leases, receivables, other
obligations (other than securities of
which the bank is not the issuer), or
pools of any such obligations
predominantly originated by--
(I) the bank;
(II) an affiliate of any such
bank other than a broker or
dealer; or
(III) a syndicate of banks of
which the bank is a member, if
the obligations or pool of
obligations consists of
mortgage obligations or
consumer-related receivables.
(iv) Identified banking products.--
The bank buys or sells identified
banking products, as defined in section
206 of the Gramm-Leach-Bliley Act.
(6) The term ``bank'' means (A) a banking institution
organized under the laws of the United States or a
Federal savings association, as defined in section 2(5)
of the Home Owners' Loan Act, (B) a member bank of the
Federal Reserve System, (C) any other banking
institution or savings association, as defined in
section 2(4) of the Home Owners' Loan Act, whether
incorporated or not, doing business under the laws of
any State or of the United States, a substantial
portion of the business of which consists of receiving
deposits or exercising fiduciary powers similar to
those permitted to national banks under the authority
of the Comptroller of the Currency pursuant to the
first section of Public Law 87-722 (12 U.S.C. 92a), and
which is supervised and examined by State or Federal
authority having supervision over banks or savings
associations, and which is not operated for the purpose
of evading the provisions of this title, and (D) a
receiver, conservator, or other liquidating agent of
any institution or firm included in clauses (A), (B),
or (C) of this paragraph.
(7) The term ``director'' means any director of a
corporation or any person performing similar functions
with respect to any organization, whether incorporated
or unincorporated.
(8) The term ``issuer'' means any person who issues
or proposes to issue any security; except that with
respect to certificates of deposit for securities,
voting-trust certificates, or collateral-trust
certificates, or with respect to certificates of
interest or shares in an unincorporated investment
trust not having a board of directors or of the fixed,
restricted management, or unit type, the term
``issuer'' means the person or persons performing the
acts and assuming the duties of depositor or manager
pursuant to the provisions of the trust or other
agreement or instrument under which such securities are
issued; and except that with respect to equipment-trust
certificates or like securities, the term ``issuer''
means the person by whom the equipment or property is,
or is to be, used.
(9) The term ``person'' means a natural person,
company, government, or political subdivision, agency,
or instrumentality of a government.
(10) The term ``security'' means any note, stock,
treasury stock, security future, security-based
swap,bond, debenture, certificate of interest or
participation in any profit-sharing agreement or in any
oil, gas, or other mineral royalty or lease, any
collateral-trust certificate, preorganization
certificate or subscription, transferable share,
investment contract, voting-trust certificate,
certificate of deposit for a security, any put, call,
straddle, option, or privilege on any security,
certificate of deposit, or group or index of securities
(including any interest therein or based on the value
thereof), or any put, call, straddle, option, or
privilege entered into on a national securities
exchange relating to foreign currency, or in general,
any instrument commonly known as a ``security''; or any
certificate of interest or participation in, temporary
or interim certificate for, receipt for, or warrant or
right to subscribe to or purchase, any of the
foregoing; but shall not include currency or any note,
draft, bill of exchange, or banker's acceptance which
has a maturity at the time of issuance of not exceeding
nine months, exclusive of days of grace, or any renewal
thereof the maturity of which is likewise limited.
(11) The term ``equity security'' means any stock or
similar security; or any security future on any such
security; or any security convertible, with or without
consideration, into such a security, or carrying any
warrant or right to subscribe to or purchase such a
security; or any such warrant or right; or any other
security which the Commission shall deem to be of
similar nature and consider necessary or appropriate,
by such rules and regulations as it may prescribe in
the public interest or for the protection of investors,
to treat as an equity security.
(12)(A) The term ``exempted security'' or ``exempted
securities'' includes--
(i) government securities, as defined in
paragraph (42) of this subsection;
(ii) municipal securities, as defined in
paragraph (29) of this subsection;
(iii) any interest or participation in any
common trust fund or similar fund that is
excluded from the definition of the term
``investment company'' under section 3(c)(3) of
the Investment Company Act of 1940;
(iv) any interest or participation in a
single trust fund, or a collective trust fund
maintained by a bank, or any security arising
out of a contract issued by an insurance
company, which interest, participation, or
security is issued in connection with a
qualified plan as defined in subparagraph (C)
of this paragraph;
(v) any security issued by or any interest or
participation in any pooled income fund,
collective trust fund, collective investment
fund, or similar fund that is excluded from the
definition of an investment company under
section 3(c)(10)(B) of the Investment Company
Act of 1940;
(vi) solely for purposes of sections 12, 13,
14, and 16 of this title, any security issued
by or any interest or participation in any
church plan, company, or account that is
excluded from the definition of an investment
company under section 3(c)(14) of the
Investment Company Act of 1940; and
(vii) such other securities (which may
include, among others, unregistered securities,
the market in which is predominantly
intrastate) as the Commission may, by such
rules and regulations as it deems consistent
with the public interest and the protection of
investors, either unconditionally or upon
specified terms and conditions or for stated
periods, exempt from the operation of any one
or more provisions of this title which by their
terms do not apply to an ``exempted security''
or to ``exempted securities''.
(B)(i) Notwithstanding subparagraph (A)(i) of this
paragraph, government securities shall not be deemed to
be ``exempted securities'' for the purposes of section
17A of this title.
(ii) Notwithstanding subparagraph (A)(ii) of this
paragraph, municipal securities shall not be deemed to
be ``exempted securities'' for the purposes of sections
15 and 17A of this title.
(C) For purposes of subparagraph (A)(iv) of this
paragraph, the term ``qualified plan'' means (i) a
stock bonus, pension, or profit-sharing plan which
meets the requirements for qualification under section
401 of the Internal Revenue Code of 1954, (ii) an
annuity plan which meets the requirements for the
deduction of the employer's contribution under section
404(a)(2) of such Code, (iii) a governmental plan as
defined in section 414(d) of such Code which has been
established by an employer for the exclusive benefit of
its employees or their beneficiaries for the purpose of
distributing to such employees or their beneficiaries
the corpus and income of the funds accumulated under
such plan, if under such plan it is impossible, prior
to the satisfaction of all liabilities with respect to
such employees and their beneficiaries, for any part of
the corpus or income to be used for, or diverted to,
purposes other than the exclusive benefit of such
employees or their beneficiaries, or (iv) a church
plan, company, or account that is excluded from the
definition of an investment company under section
3(c)(14) of the Investment Company Act of 1940, other
than any plan described in clause (i), (ii), or (iii)
of this subparagraph which (I) covers employees some or
all of whom are employees within the meaning of section
401(c) of such Code, or (II) is a plan funded by an
annuity contract described in section 403(b) of such
Code.
(13) The terms ``buy'' and ``purchase'' each include
any contract to buy, purchase, or otherwise acquire.
For security futures products, such term includes any
contract, agreement, or transaction for future
delivery. For security-based swaps, such terms include
the execution, termination (prior to its scheduled
maturity date), assignment, exchange, or similar
transfer or conveyance of, or extinguishing of rights
or obligations under, a security-based swap, as the
context may require.
(14) The terms ``sale'' and ``sell'' each include any
contract to sell or otherwise dispose of. For security
futures products, such term includes any contract,
agreement, or transaction for future delivery. For
security-based swaps, such terms include the execution,
termination (prior to its scheduled maturity date),
assignment, exchange, or similar transfer or conveyance
of, or extinguishing of rights or obligations under, a
security-based swap, as the context may require.
(15) The term ``Commission'' means the Securities and
Exchange Commission established by section 4 of this
title.
(16) The term ``State'' means any State of the United
States, the District of Columbia, Puerto Rico, the
Virgin Islands, or any other possession of the United
States.
(17) The term ``interstate commerce'' means trade,
commerce, transportation, or communication among the
several States, or between any foreign country and any
State, or between any State and any place or ship
outside thereof. The term also includes intrastate use
of (A) any facility of a national securities exchange
or of a telephone or other interstate means of
communication, or (B) any other interstate
instrumentality.
(18) The term ``person associated with a broker or
dealer'' or ``associated person of a broker or dealer''
means any partner, officer, director, or branch manager
of such broker or dealer (or any person occupying a
similar status or performing similar functions), any
person directly or indirectly controlling, controlled
by, or under common control with such broker or dealer,
or any employee of such broker or dealer, except that
any person associated with a broker or dealer whose
functions are solely clerical or ministerial shall not
be included in the meaning of such term for purposes of
section 15(b) of this title (other than paragraph (6)
thereof).
(19) The terms ``investment company,''``affiliated
person,''``insurance company,''``separate account,''
and ``company'' have the same meanings as in the
Investment Company Act of 1940.
(20) The terms ``investment adviser'' and
``underwriter'' have the same meanings as in the
Investment Advisers Act of 1940.
(21) The term ``persons associated with a member'' or
``associated person of a member'' when used with
respect to a member of a national securities exchange
or registered securities association means any partner,
officer, director, or branch manager of such member (or
any person occupying a similar status or performing
similar functions), any person directly or indirectly
controlling, controlled by, or under common control
with such member, or any employee of such member.
(22)(A) The term ``securities information processor''
means any person engaged in the business of (i)
collecting, processing, or preparing for distribution
or publication, or assisting, participating in, or
coordinating the distribution or publication of,
information with respect to transactions in or
quotations for any security (other than an exempted
security) or (ii) distributing or publishing (whether
by means of a ticker tape, a communications network, a
terminal display device, or otherwise) on a current and
continuing basis, information with respect to such
transactions or quotations. The term ``securities
information processor'' does not include any bona fide
newspaper, news magazine, or business or financial
publication of general and regular circulation, any
self-regulatory organization, any bank, broker, dealer,
building and loan, savings and loan, or homestead
association, or cooperative bank, if such bank, broker,
dealer, association, or cooperative bank would be
deemed to be a securities information processor solely
by reason of functions performed by such institutions
as part of customary banking, brokerage, dealing,
association, or cooperative bank activities, or any
common carrier, as defined in section 3 of the
Communications Act of 1934, subject to the jurisdiction
of the Federal Communications Commission or a State
commission, as defined in section 3 of that Act, unless
the Commission determines that such carrier is engaged
in the business of collecting, processing, or preparing
for distribution or publication, information with
respect to transactions in or quotations for any
security.
(B) The term ``exclusive processor'' means any
securities information processor or self-regulatory
organization which, directly or indirectly, engages on
an exclusive basis on behalf of any national securities
exchange or registered securities association, or any
national securities exchange or registered securities
association which engages on an exclusive basis on its
own behalf, in collecting, processing, or preparing for
distribution or publication any information with
respect to (i) transactions or quotations on or
effected or made by means of any facility of such
exchange or (ii) quotations distributed or published by
means of any electronic system operated or controlled
by such association.
(23)(A) The term ``clearing agency'' means any person
who acts as an intermediary in making payments or
deliveries or both in connection with transactions in
securities or who provides facilities for comparison of
data respecting the terms of settlement of securities
transactions, to reduce the number of settlements of
securities transactions, or for the allocation of
securities settlement responsibilities. Such term also
means any person, such as a securities depository, who
(i) acts as a custodian of securities in connection
with a system for the central handling of securities
whereby all securities of a particular class or series
of any issuer deposited within the system are treated
as fungible and may be transferred, loaned, or pledged
by bookkeeping entry without physical delivery of
securities certificates, or (ii) otherwise permits or
facilitates the settlement of securities transactions
or the hypothecation or lending of securities without
physical delivery of securities certificates.
(B) The term ``clearing agency'' does not include (i)
any Federal Reserve bank, Federal home loan bank, or
Federal land bank; (ii) any national securities
exchange or registered securities association solely by
reason of its providing facilities for comparison of
data respecting the terms of settlement of securities
transactions effected on such exchange or by means of
any electronic system operated or controlled by such
association; (iii) any bank, broker, dealer, building
and loan, savings and loan, or homestead association,
or cooperative bank if such bank, broker, dealer,
association, or cooperative bank would be deemed to be
a clearing agency solely by reason of functions
performed by such institution as part of customary
banking, brokerage, dealing, association, or
cooperative banking activities, or solely by reason of
acting on behalf of a clearing agency or a participant
therein in connection with the furnishing by the
clearing agency of services to its participants or the
use of services of the clearing agency by its
participants, unless the Commission, by rule, otherwise
provides as necessary or appropriate to assure the
prompt and accurate clearance and settlement of
securities transactions or to prevent evasion of this
title; (iv) any life insurance company, its registered
separate accounts, or a subsidiary of such insurance
company solely by reason of functions commonly
performed by such entities in connection with variable
annuity contracts or variable life policies issued by
such insurance company or its separate accounts; (v)
any registered open-end investment company or unit
investment trust solely by reason of functions commonly
performed by it in connection with shares in such
registered open-end investment company or unit
investment trust, or (vi) any person solely by reason
of its performing functions described in paragraph
25(E) of this subsection.
(24) The term ``participant'' when used with respect
to a clearing agency means any person who uses a
clearing agency to clear or settle securities
transactions or to transfer, pledge, lend, or
hypothecate securities. Such term does not include a
person whose only use of a clearing agency is (A)
through another person who is a participant or (B) as a
pledgee of securities.
(25) The term ``transfer agent'' means any person who
engages on behalf of an issuer of securities or on
behalf of itself as an issuer of securities in (A)
countersigning such securities upon issuance; (B)
monitoring the issuance of such securities with a view
to preventing unauthorized issuance, a function
commonly performed by a person called a registrar; (C)
registering the transfer of such securities; (D)
exchanging or converting such securities; or (E)
transferring record ownership of securities by
bookkeeping entry without physical issuance of
securities certificates. The term ``transfer agent''
does not include any insurance company or separate
account which performs such functions solely with
respect to variable annuity contracts or variable life
policies which it issues or any registered clearing
agency which performs such functions solely with
respect to options contracts which it issues.
(26) The term ``self-regulatory organization'' means
any national securities exchange, registered securities
association, or registered clearing agency, or (solely
for purposes of sections 19(b), 19(c), and 23(b) of
this title) the Municipal Securities Rulemaking Board
established by section 15B of this title.
(27) The term ``rules of an exchange'', ``rules of an
association'', or ``rules of a clearing agency'' means
the constitution, articles of incorporation, bylaws,
and rules, or instruments corresponding to the
foregoing, of an exchange, association of brokers and
dealers, or clearing agency, respectively, and such of
the stated policies, practices, and interpretations of
such exchange, association, or clearing agency as the
Commission, by rule, may determine to be necessary or
appropriate in the public interest or for the
protection of investors to be deemed to be rules of
such exchange, association, or clearing agency.
(28) The term ``rules of a self-regulatory
organization'' means the rules of an exchange which is
a national securities exchange, the rules of an
association of brokers and dealers which is a
registered securities association, the rules of a
clearing agency which is a registered clearing agency,
or the rules of the Municipal Securities Rulemaking
Board.
(29) The term ``municipal securities'' means
securities which are direct obligations of, or
obligations guaranteed as to principal or interest by,
a State or any political subdivision thereof, or any
agency or instrumentality of a State or any political
subdivision thereof, or any municipal corporate
instrumentality of one or more States, or any security
which is an industrial development bond (as defined in
section 103(c)(2) of the Internal Revenue Code of 1954)
the interest on which is excludable from gross income
under section 103(a)(1) of such Code if, by reason of
the application of paragraph (4) or (6) of section
103(c) of such Code (determined as if paragraphs
(4)(A), (5), and (7) were not included in such section
103(c)), paragraph (1) of such section 103(c) does not
apply to such security.
(30) The term ``municipal securities dealer'' means
any person (including a separately identifiable
department or division of a bank) engaged in the
business of buying and selling municipal securities for
his own account, through a broker or otherwise, but
does not include--
(A) any person insofar as he buys or sells
such securities for his own account, either
individually or in some fiduciary capacity, but
not as a part of a regular business; or
(B) a bank, unless the bank is engaged in the
business of buying and selling municipal
securities for its own account other than in a
fiduciary capacity, through a broker or
otherwise; Provided, however, That if the bank
is engaged in such business through a
separately identifiable department or division
(as defined by the Municipal Securities
Rulemaking Board in accordance with section
15B(b)(2)(H) of this title), the department or
division and not the bank itself shall be
deemed to be the municipal securities dealer.
(31) The term ``municipal securities broker'' means a
broker engaged in the business of effecting
transactions in municipal securities for the account of
others.
(32) The term ``person associated with a municipal
securities dealer'' when used with respect to a
municipal securities dealer which is a bank or a
division or department of a bank means any person
directly engaged in the management, direction,
supervision, or performance of any of the municipal
securities dealer's activities with respect to
municipal securities, and any person directly or
indirectly controlling such activities or controlled by
the municipal securities dealer in connection with such
activities.
(33) The term ``municipal securities investment
portfolio'' means all municipal securities held for
investment and not for sale as part of a regular
business by a municipal securities dealer or by a
person, directly or indirectly, controlling, controlled
by, or under common control with a municipal securities
dealer.
(34) The term ``appropriate regulatory agency''
means--
(A) When used with respect to a municipal
securities dealer:
(i) the Comptroller of the Currency,
in the case of a national bank, a
subsidiary or a department or division
of any such bank, a Federal savings
association (as defined in section
3(b)(2) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(b)(2))),
the deposits of which are insured by
the Federal Deposit Insurance
Corporation, or a subsidiary or
department or division of any such
Federal savings association;
(ii) the Board of Governors of the
Federal Reserve System, in the case of
a State member bank of the Federal
Reserve System, a subsidiary or a
department or division thereof, a bank
holding company, a subsidiary of a bank
holding company which is a bank other
than a bank specified in clause (i),
(iii), or (iv) of this subparagraph, a
subsidiary or a department or division
of such subsidiary, or a savings and
loan holding company;
(iii) the Federal Deposit Insurance
Corporation, in the case of a bank
insured by the Federal Deposit
Insurance Corporation (other than a
member of the Federal Reserve System),
a subsidiary or department or division
of any such bank, a State savings
association (as defined in section
3(b)(3) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(b)(3))),
the deposits of which are insured by
the Federal Deposit Insurance
Corporation, or a subsidiary or a
department or division of any such
State savings association; and
(iv) the Commission in the case of
all other municipal securities dealers.
(B) When used with respect to a clearing
agency or transfer agent:
(i) the Comptroller of the Currency,
in the case of a national bank, a
subsidiary of any such bank, a Federal
savings association (as defined in
section 3(b)(2) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(b)(2))),
the deposits of which are insured by
the Federal Deposit Insurance
Corporation, or a subsidiary of any
such Federal savings association;
(ii) the Board of Governors of the
Federal Reserve System, in the case of
a State member bank of the Federal
Reserve System, a subsidiary thereof, a
bank holding company, a subsidiary of a
bank holding company that is a bank
other than a bank specified in clause
(i) or (iii) of this subparagraph, or a
savings and loan holding company;
(iii) the Federal Deposit Insurance
Corporation, in the case of a bank
insured by the Federal Deposit
Insurance Corporation (other than a
member of the Federal Reserve System),
a subsidiary of any such bank, a State
savings association (as defined in
section 3(b)(3) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(b)(3))),
the deposits of which are insured by
the Federal Deposit Insurance
Corporation, or a subsidiary of any
such State savings association; and
(iv) the Commission in the case of
all other clearing agencies and
transfer agents.
(C) When used with respect to a participant
or applicant to become a participant in a
clearing agency or a person requesting or
having access to services offered by a clearing
agency:
(i) the Comptroller of the Currency,
in the case of a national bank or a
Federal savings association (as defined
in section 3(b)(2) of the Federal
Deposit Insurance Act (12 U.S.C.
1813(b)(2))), the deposits of which are
insured by the Federal Deposit
Insurance Corporation when the
appropriate regulatory agency for such
clearing agency is not the Commission;
(ii) the Board of Governors of the
Federal Reserve System in the case of a
State member bank of the Federal
Reserve System, a bank holding company,
or a subsidiary of a bank holding
company, a subsidiary of a bank holding
company that is a bank other than a
bank specified in clause (i) or (iii)
of this subparagraph, or a savings and
loan holding company when the
appropriate regulatory agency for such
clearing agency is not the Commission;
(iii) the Federal Deposit Insurance
Corporation, in the case of a bank
insured by the Federal Deposit
Insurance Corporation (other than a
member of the Federal Reserve System)
or a State savings association (as
defined in section 3(b)(3) of the
Federal Deposit Insurance Act (12
U.S.C. 1813(b)(3))), the deposits of
which are insured by the Federal
Deposit Insurance Corporation; and when
the appropriate regulatory agency for
such clearing agency is not the
Commission;
(iv) the Commission in all other
cases.
(D) When used with respect to an
institutional investment manager which is a
bank the deposits of which are insured in
accordance with the Federal Deposit Insurance
Act:
(i) the Comptroller of the Currency,
in the case of a national bank or a
Federal savings association (as defined
in section 3(b)(2) of the Federal
Deposit Insurance Act (12 U.S.C.
1813(b)(2))), the deposits of which are
insured by the Federal Deposit
Insurance Corporation;
(ii) the Board of Governors of the
Federal Reserve System, in the case of
any other member bank of the Federal
Reserve System; and
(iii) the Federal Deposit Insurance
Corporation, in the case of any other
insured bank or a State savings
association (as defined in section
3(b)(3) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(b)(3))),
the deposits of which are insured by
the Federal Deposit Insurance
Corporation.
(E) When used with respect to a national
securities exchange or registered securities
association, member thereof, person associated
with a member thereof, applicant to become a
member thereof or to become associated with a
member thereof, or person requesting or having
access to services offered by such exchange or
association or member thereof, or the Municipal
Securities Rulemaking Board, the Commission.
(F) When used with respect to a person
exercising investment discretion with respect
to an account:
(i) the Comptroller of the Currency,
in the case of a national bank or a
Federal savings association (as defined
in section 3(b)(2) of the Federal
Deposit Insurance Act (12 U.S.C.
1813(b)(2))), the deposits of which are
insured by the Federal Deposit
Insurance Corporation;
(ii) the Board of Governors of the
Federal Reserve System in the case of
any other member bank of the Federal
Reserve System;
(iii) the Federal Deposit Insurance
Corporation, in the case of any other
bank the deposits of which are insured
in accordance with the Federal Deposit
Insurance Act or a State savings
association (as defined in section
3(b)(3) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(b)(3))),
the deposits of which are insured by
the Federal Deposit Insurance
Corporation; and
(iv) the Commission in the case of
all other such persons.
(G) When used with respect to a government
securities broker or government securities
dealer, or person associated with a government
securities broker or government securities
dealer:
(i) the Comptroller of the Currency,
in the case of a national bank, a
Federal savings association (as defined
in section 3(b)(2) of the Federal
Deposit Insurance Act), the deposits of
which are insured by the Federal
Deposit Insurance Corporation, or a
Federal branch or Federal agency of a
foreign bank (as such terms are used in
the International Banking Act of 1978);
(ii) the Board of Governors of the
Federal Reserve System, in the case of
a State member bank of the Federal
Reserve System, a foreign bank, an
uninsured State branch or State agency
of a foreign bank, a commercial lending
company owned or controlled by a
foreign bank (as such terms are used in
the International Banking Act of 1978),
or a corporation organized or having an
agreement with the Board of Governors
of the Federal Reserve System pursuant
to section 25 or section 25A of the
Federal Reserve Act;
(iii) the Federal Deposit Insurance
Corporation, in the case of a bank
insured by the Federal Deposit
Insurance Corporation (other than a
member of the Federal Reserve System or
a Federal savings bank), a State
savings association (as defined in
section 3(b)(3) of the Federal Deposit
Insurance Act), the deposits of which
are insured by the Federal Deposit
Insurance Corporation, or an insured
State branch of a foreign bank (as such
terms are used in the International
Banking Act of 1978); and
(iv) the Commission, in the case of
all other government securities brokers
and government securities dealers.
(H) When used with respect to an institution
described in subparagraph (D), (F), or (G) of
section 2(c)(2), or held under section 4(f), of
the Bank Holding Company Act of 1956--
(i) the Comptroller of the Currency,
in the case of a national bank;
(ii) the Board of Governors of the
Federal Reserve System, in the case of
a State member bank of the Federal
Reserve System or any corporation
chartered under section 25A of the
Federal Reserve Act;
(iii) the Federal Deposit Insurance
Corporation, in the case of any other
bank the deposits of which are insured
in accordance with the Federal Deposit
Insurance Act; or
(iv) the Commission in the case of
all other such institutions.
As used in this paragraph, the terms ``bank holding
company'' and ``subsidiary of a bank holding company''
have the meanings given them in section 2 of the Bank
Holding Company Act of 1956. As used in this paragraph,
the term ``savings and loan holding company'' has the
same meaning as in section 10(a) of the Home Owners'
Loan Act (12 U.S.C. 1467a(a)).
(35) A person exercises ``investment discretion''
with respect to an account if, directly or indirectly,
such person (A) is authorized to determine what
securities or other property shall be purchased or sold
by or for the account, (B) makes decisions as to what
securities or other property shall be purchased or sold
by or for the account even though some other person may
have responsibility for such investment decisions, or
(C) otherwise exercises such influence with respect to
the purchase and sale of securities or other property
by or for the account as the Commission, by rule,
determines, in the public interest or for the
protection of investors, should be subject to the
operation of the provisions of this title and rules and
regulations thereunder.
(36) A class of persons or markets is subject to
``equal regulation'' if no member of the class has a
competitive advantage over any other member thereof
resulting from a disparity in their regulation under
this title which the Commission determines is unfair
and not necessary or appropriate in furtherance of the
purposes of this title.
(37) The term ``records'' means accounts,
correspondence, memorandums, tapes, discs, papers,
books, and other documents or transcribed information
of any type, whether expressed in ordinary or machine
language.
(38) The term ``market maker'' means any specialist
permitted to act as a dealer, any dealer acting in the
capacity of block positioner, and any dealer who, with
respect to a security, holds himself out (by entering
quotations in an inter-dealer communications system or
otherwise) as being willing to buy and sell such
security for his own account on a regular or continuous
basis.
(39) A person is subject to a ``statutory
disqualification'' with respect to membership or
participation in, or association with a member of, a
self-regulatory organization, if such person--
(A) has been and is expelled or suspended
from membership or participation in, or barred
or suspended from being associated with a
member of, any self-regulatory organization,
foreign equivalent of a self-regulatory
organization, foreign or international
securities exchange, contract market designated
pursuant to section 5 of the Commodity Exchange
Act (7 U.S.C. 7), or any substantially
equivalent foreign statute or regulation, or
futures association registered under section 17
of such Act (7 U.S.C. 21), or any substantially
equivalent foreign statute or regulation, or
has been and is denied trading privileges on
any such contract market or foreign equivalent;
(B) is subject to--
(i) an order of the Commission, other
appropriate regulatory agency, or foreign
financial regulatory authority--
(I) denying, suspending for a period
not exceeding 12 months, or revoking
his registration as a broker, dealer,
municipal securities dealer, government
securities broker, government
securities dealer, security-based swap
dealer, or major security-based swap
participant or limiting his activities
as a foreign person performing a
function substantially equivalent to
any of the above; or
(II) barring or suspending for a
period not exceeding 12 months his
being associated with a broker, dealer,
municipal securities dealer, government
securities broker, government
securities dealer, security-based swap
dealer, major security-based swap
participant, or foreign person
performing a function substantially
equivalent to any of the above;
(ii) an order of the Commodity Futures
Trading Commission denying, suspending, or
revoking his registration under the Commodity
Exchange Act (7 U.S.C. 1 et seq.); or
(iii) an order by a foreign financial
regulatory authority denying, suspending, or
revoking the person's authority to engage in
transactions in contracts of sale of a
commodity for future delivery or other
instruments traded on or subject to the rules
of a contract market, board of trade, or
foreign equivalent thereof;
(C) by his conduct while associated with a
broker, dealer, municipal securities dealer,
government securities broker, government
securities dealer, security-based swap dealer,
or major security-based swap participant, or
while associated with an entity or person
required to be registered under the Commodity
Exchange Act, has been found to be a cause of
any effective suspension, expulsion, or order
of the character described in subparagraph (A)
or (B) of this paragraph, and in entering such
a suspension, expulsion, or order, the
Commission, an appropriate regulatory agency,
or any such self-regulatory organization shall
have jurisdiction to find whether or not any
person was a cause thereof;
(D) by his conduct while associated with any
broker, dealer, municipal securities dealer,
government securities broker, government
securities dealer, security-based swap dealer,
major security-based swap participant, or any
other entity engaged in transactions in
securities, or while associated with an entity
engaged in transactions in contracts of sale of
a commodity for future delivery or other
instruments traded on or subject to the rules
of a contract market, board of trade, or
foreign equivalent thereof, has been found to
be a cause of any effective suspension,
expulsion, or order by a foreign or
international securities exchange or foreign
financial regulatory authority empowered by a
foreign government to administer or enforce its
laws relating to financial transactions as
described in subparagraph (A) or (B) of this
paragraph;
(E) has associated with him any person who is
known, or in the exercise of reasonable care
should be known, to him to be a person
described by subparagraph (A), (B), (C), or (D)
of this paragraph; or
(F) has committed or omitted any act, or is
subject to an order or finding, enumerated in
subparagraph (D), (E), (H), or (G) of paragraph
(4) of section 15(b) of this title, has been
convicted of any offense specified in
subparagraph (B) of such paragraph (4) or any
other felony within ten years of the date of
the filing of an application for membership or
participation in, or to become associated with
a member of, such self-regulatory organization,
is enjoined from any action, conduct, or
practice specified in subparagraph (C) of such
paragraph (4), has willfully made or caused to
be made in any application for membership or
participation in, or to become associated with
a member of, a self-regulatory organization,
report required to be filed with a self-
regulatory organization, or proceeding before a
self-regulatory organization, any statement
which was at the time, and in the light of the
circumstances under which it was made, false or
misleading with respect to any material fact,
or has omitted to state in any such
application, report, or proceeding any material
fact which is required to be stated therein.
(40) The term ``financial responsibility rules''
means the rules and regulations of the Commission or
the rules and regulations prescribed by any self-
regulatory organization relating to financial
responsibility and related practices which are
designated by the Commission, by rule or regulation, to
be financial responsibility rules.
(41) The term ``mortgage related security'' means a
security that meets standards of credit-worthiness as
established by the Commission, and either:
(A) represents ownership of one or more
promissory notes or certificates of interest or
participation in such notes (including any
rights designed to assure servicing of, or the
receipt or timeliness of receipt by the holders
of such notes, certificates, or participations
of amounts payable under, such notes,
certificates, or participations), which notes:
(i) are directly secured by a first
lien on a single parcel of real estate,
including stock allocated to a dwelling
unit in a residential cooperative
housing corporation, upon which is
located a dwelling or mixed residential
and commercial structure, on a
residential manufactured home as
defined in section 603(6) of the
National Manufactured Housing
Construction and Safety Standards Act
of 1974, whether such manufactured home
is considered real or personal property
under the laws of the State in which it
is to be located, or on one or more
parcels of real estate upon which is
located one or more commercial
structures; and
(ii) were originated by a savings and
loan association, savings bank,
commercial bank, credit union,
insurance company, or similar
institution which is supervised and
examined by a Federal or State
authority, or by a mortgage approved by
the Secretary of Housing and Urban
Development pursuant to sections 203
and 211 of the National Housing Act,
or, where such notes involve a lien on
the manufactured home, by any such
institution or by any financial
institution approved for insurance by
the Secretary of Housing and Urban
Development pursuant to section 2 of
the National Housing Act; or
(B) is secured by one or more promissory
notes or certificates of interest or
participations in such notes (with or without
recourse to the issuer thereof) and, by its
terms, provides for payments of principal in
relation to payments, or reasonable projections
of payments, on notes meeting the requirements
of subparagraphs (A) (i) and (ii) or
certificates of interest or participations in
promissory notes meeting such requirements.
For the purpose of this paragraph, the term
``promissory note'', when used in connection with a
manufactured home, shall also include a loan, advance,
or credit sale as evidence by a retail installment
sales contract or other instrument.
(42) The term ``government securities'' means--
(A) securities which are direct obligations
of, or obligations guaranteed as to principal
or interest by, the United States;
(B) securities which are issued or guaranteed
by the Tennessee Valley Authority or by
corporations in which the United States has a
direct or indirect interest and which are
designated by the Secretary of the Treasury for
exemption as necessary or appropriate in the
public interest or for the protection of
investors;
(C) securities issued or guaranteed as to
principal or interest by any corporation the
securities of which are designated, by statute
specifically naming such corporation, to
constitute exempt securities within the meaning
of the laws administered by the Commission;
(D) for purposes of sections 15C and 17A, any
put, call, straddle, option, or privilege on a
security described in subparagraph (A), (B), or
(C) other than a put, call, straddle, option,
or privilege--
(i) that is traded on one or more
national securities exchanges; or
(ii) for which quotations are
disseminated through an automated
quotation system operated by a
registered securities association; or
(E) for purposes of sections 15, 15C, and 17A
as applied to a bank, a qualified Canadian
government obligation as defined in section
5136 of the Revised Statutes of the United
States.
(43) The term ``government securities broker'' means
any person regularly engaged in the business of
effecting transactions in government securities for the
account of others, but does not include--
(A) any corporation the securities of which
are government securities under subparagraph
(B) or (C) of paragraph (42) of this
subsection; or
(B) any person registered with the Commodity
Futures Trading Commission, any contract market
designated by the Commodity Futures Trading
Commission, such contract market's affiliated
clearing organization, or any floor trader on
such contract market, solely because such
person effects transactions in government
securities that the Commission, after
consultation with the Commodity Futures Trading
Commission, has determined by rule or order to
be incidental to such person's futures-related
business.
(44) The term ``government securities dealer'' means
any person engaged in the business of buying and
selling government securities for his own account,
through a broker or otherwise, but does not include--
(A) any person insofar as he buys or sells
such securities for his own account, either
individually or in some fiduciary capacity, but
not as a part of a regular business;
(B) any corporation the securities of which
are government securities under subparagraph
(B) or (C) of paragraph (42) of this
subsection;
(C) any bank, unless the bank is engaged in
the business of buying and selling government
securities for its own account other than in a
fiduciary capacity, through a broker or
otherwise; or
(D) any person registered with the Commodity
Futures Trading Commission, any contract market
designated by the Commodity Futures Trading
Commission, such contract market's affiliated
clearing organization, or any floor trader on
such contract market, solely because such
person effects transactions in government
securities that the Commission, after
consultation with the Commodity Futures Trading
Commission, has determined by rule or order to
be incidental to such person's futures-related
business.
(45) The term ``person associated with a government
securities broker or government securities dealer''
means any partner, officer, director, or branch manager
of such government securities broker or government
securities dealer (or any person occupying a similar
status or performing similar functions), and any other
employee of such government securities broker or
government securities dealer who is engaged in the
management, direction, supervision, or performance of
any activities relating to government securities, and
any person directly or indirectly controlling,
controlled by, or under common control with such
government securities broker or government securities
dealer.
(46) The term ``financial institution'' means--
(A) a bank (as defined in paragraph (6) of
this subsection);
(B) a foreign bank (as such term is used in
the International Banking Act of 1978); and
(C) a savings association (as defined in
section 3(b) of the Federal Deposit Insurance
Act) the deposits of which are insured by the
Federal Deposit Insurance Corporation.
(47) The term ``securities laws'' means the
Securities Act of 1933 (15 U.S.C. 78a et seq.), the
Securities Exchange Act of 1934 (15 U.S.C. 78a et
seq.), the Sarbanes-Oxley Act of 2002, the Trust
Indenture Act of 1939 (15 U.S.C. 77aaa et seq.), the
Investment Company Act of 1940 (15 U.S.C. 80a-1 et
seq.), the Investment Advisers Act of 1940 (15 U.S.C.
80b et seq.), and the Securities Investor Protection
Act of 1970 (15 U.S.C. 78aaa et seq.).
(48) The term ``registered broker or dealer'' means a
broker or dealer registered or required to register
pursuant to section 15 or 15B of this title, except
that in paragraph (3) of this subsection and sections 6
and 15A the term means such a broker or dealer and a
government securities broker or government securities
dealer registered or required to register pursuant to
section 15C(a)(1)(A) of this title.
(49) The terms ``person associated with a transfer
agent'' and ``associated person of a transfer agent''
mean any person (except an employee whose functions are
solely clerical or ministerial) directly engaged in the
management, direction, supervision, or performance of
any of the transfer agent's activities with respect to
transfer agent functions, and any person directly or
indirectly controlling such activities or controlled by
the transfer agent in connection with such activities.
(50) The term ``foreign securities authority'' means
any foreign government, or any governmental body or
regulatory organization empowered by a foreign
government to administer or enforce its laws as they
relate to securities matters.
(51)(A) The term ``penny stock'' means any equity
security other than a security that is--
(i) registered or approved for registration
and traded on a national securities exchange
that meets such criteria as the Commission
shall prescribe by rule or regulation for
purposes of this paragraph;
(ii) authorized for quotation on an automated
quotation system sponsored by a registered
securities association, if such system (I) was
established and in operation before January 1,
1990, and (II) meets such criteria as the
Commission shall prescribe by rule or
regulation for purposes of this paragraph;
(iii) issued by an investment company
registered under the Investment Company Act of
1940;
(iv) excluded, on the basis of exceeding a
minimum price, net tangible assets of the
issuer, or other relevant criteria, from the
definition of such term by rule or regulation
which the Commission shall prescribe for
purposes of this paragraph; or
(v) exempted, in whole or in part,
conditionally or unconditionally, from the
definition of such term by rule, regulation, or
order prescribed by the Commission.
(B) The Commission may, by rule, regulation, or
order, designate any equity security or class of equity
securities described in clause (i) or (ii) of
subparagraph (A) as within the meaning of the term
``penny stock'' if such security or class of securities
is traded other than on a national securities exchange
or through an automated quotation system described in
clause (ii) of subparagraph (A).
(C) In exercising its authority under this paragraph
to prescribe rules, regulations, and orders, the
Commission shall determine that such rule, regulation,
or order is consistent with the public interest and the
protection of investors.
(52) The term ``foreign financial regulatory
authority'' means any (A) foreign securities authority,
(B) other governmental body or foreign equivalent of a
self-regulatory organization empowered by a foreign
government to administer or enforce its laws relating
to the regulation of fiduciaries, trusts, commercial
lending, insurance, trading in contracts of sale of a
commodity for future delivery, or other instruments
traded on or subject to the rules of a contract market,
board of trade, or foreign equivalent, or other
financial activities, or (C) membership organization a
function of which is to regulate participation of its
members in activities listed above.
(53)(A) The term ``small business related security''
means a security that meets standards of credit-
worthiness as established by the Commission, and
either--
(i) represents an interest in 1 or more
promissory notes or leases of personal property
evidencing the obligation of a small business
concern and originated by an insured depository
institution, insured credit union, insurance
company, or similar institution which is
supervised and examined by a Federal or State
authority, or a finance company or leasing
company; or
(ii) is secured by an interest in 1 or more
promissory notes or leases of personal property
(with or without recourse to the issuer or
lessee) and provides for payments of principal
in relation to payments, or reasonable
projections of payments, on notes or leases
described in clause (i).
(B) For purposes of this paragraph--
(i) an ``interest in a promissory note or a
lease of personal property'' includes ownership
rights, certificates of interest or
participation in such notes or leases, and
rights designed to assure servicing of such
notes or leases, or the receipt or timely
receipt of amounts payable under such notes or
leases;
(ii) the term ``small business concern''
means a business that meets the criteria for a
small business concern established by the Small
Business Administration under section 3(a) of
the Small Business Act;
(iii) the term ``insured depository
institution'' has the same meaning as in
section 3 of the Federal Deposit Insurance Act;
and
(iv) the term ``insured credit union'' has
the same meaning as in section 101 of the
Federal Credit Union Act.
(54) Qualified investor.--
(A) Definition.--Except as provided in
subparagraph (B), for purposes of this title,
the term ``qualified investor'' means--
(i) any investment company registered
with the Commission under section 8 of
the Investment Company Act of 1940;
(ii) any issuer eligible for an
exclusion from the definition of
investment company pursuant to section
3(c)(7) of the Investment Company Act
of 1940;
(iii) any bank (as defined in
paragraph (6) of this subsection),
savings association (as defined in
section 3(b) of the Federal Deposit
Insurance Act), broker, dealer,
insurance company (as defined in
section 2(a)(13) of the Securities Act
of 1933), or business development
company (as defined in section 2(a)(48)
of the Investment Company Act of 1940);
(iv) any small business investment
company licensed by the United States
Small Business Administration under
section 301 (c) or (d) of the Small
Business Investment Act of 1958;
(v) any State sponsored employee
benefit plan, or any other employee
benefit plan, within the meaning of the
Employee Retirement Income Security Act
of 1974, other than an individual
retirement account, if the investment
decisions are made by a plan fiduciary,
as defined in section 3(21) of that
Act, which is either a bank, savings
and loan association, insurance
company, or registered investment
adviser;
(vi) any trust whose purchases of
securities are directed by a person
described in clauses (i) through (v) of
this subparagraph;
(vii) any market intermediary exempt
under section 3(c)(2) of the Investment
Company Act of 1940;
(viii) any associated person of a
broker or dealer other than a natural
person;
(ix) any foreign bank (as defined in
section 1(b)(7) of the International
Banking Act of 1978);
(x) the government of any foreign
country;
(xi) any corporation, company, or
partnership that owns and invests on a
discretionary basis, not less than
$25,000,000 in investments;
(xii) any natural person who owns and
invests on a discretionary basis, not
less than $25,000,000 in investments;
(xiii) any government or political
subdivision, agency, or instrumentality
of a government who owns and invests on
a discretionary basis not less than
$50,000,000 in investments; or
(xiv) any multinational or
supranational entity or any agency or
instrumentality thereof.
(B) Altered thresholds for asset-backed
securities and loan participations.--For
purposes of section 3(a)(5)(C)(iii) of this
title and section 206(a)(5) of the Gramm-Leach-
Bliley Act, the term ``qualified investor'' has
the meaning given such term by subparagraph (A)
of this paragraph except that clauses (xi) and
(xii) shall be applied by substituting
``$10,000,000'' for ``$25,000,000''.
(C) Additional authority.--The Commission
may, by rule or order, define a ``qualified
investor'' as any other person, taking into
consideration such factors as the financial
sophistication of the person, net worth, and
knowledge and experience in financial matters.
(55)(A) The term ``security future'' means a contract
of sale for future delivery of a single security or of
a narrow-based security index, including any interest
therein or based on the value thereof, except an
exempted security under section 3(a)(12) of this title
as in effect on the date of the enactment of the
Futures Trading Act of 1982 (other than any municipal
security as defined in section 3(a)(29) as in effect on
the date of the enactment of the Futures Trading Act of
1982). The term ``security future'' does not include
any agreement, contract, or transaction excluded from
the Commodity Exchange Act under section 2(c), 2(d),
2(f), or 2(g) of the Commodity Exchange Act (as in
effect on the date of the enactment of the Commodity
Futures Modernization Act of 2000) or title IV of the
Commodity Futures Modernization Act of 2000.
(B) The term ``narrow-based security index'' means an
index--
(i) that has 9 or fewer component securities;
(ii) in which a component security comprises
more than 30 percent of the index's weighting;
(iii) in which the five highest weighted
component securities in the aggregate comprise
more than 60 percent of the index's weighting;
or
(iv) in which the lowest weighted component
securities comprising, in the aggregate, 25
percent of the index's weighting have an
aggregate dollar value of average daily trading
volume of less than $50,000,000 (or in the case
of an index with 15 or more component
securities, $30,000,000), except that if there
are two or more securities with equal weighting
that could be included in the calculation of
the lowest weighted component securities
comprising, in the aggregate, 25 percent of the
index's weighting, such securities shall be
ranked from lowest to highest dollar value of
average daily trading volume and shall be
included in the calculation based on their
ranking starting with the lowest ranked
security.
(C) Notwithstanding subparagraph (B), an index is not
a narrow-based security index if--
(i)(I) it has at least nine component
securities;
(II) no component security comprises more
than 30 percent of the index's weighting; and
(III) each component security is--
(aa) registered pursuant to section
12 of the Securities Exchange Act of
1934;
(bb) one of 750 securities with the
largest market capitalization; and
(cc) one of 675 securities with the
largest dollar value of average daily
trading volume;
(ii) a board of trade was designated as a
contract market by the Commodity Futures
Trading Commission with respect to a contract
of sale for future delivery on the index,
before the date of the enactment of the
Commodity Futures Modernization Act of 2000;
(iii)(I) a contract of sale for future
delivery on the index traded on a designated
contract market or registered derivatives
transaction execution facility for at least 30
days as a contract of sale for future delivery
on an index that was not a narrow-based
security index; and
(II) it has been a narrow-based security
index for no more than 45 business days over 3
consecutive calendar months;
(iv) a contract of sale for future delivery
on the index is traded on or subject to the
rules of a foreign board of trade and meets
such requirements as are jointly established by
rule or regulation by the Commission and the
Commodity Futures Trading Commission;
(v) no more than 18 months have passed since
the date of the enactment of the Commodity
Futures Modernization Act of 2000 and--
(I) it is traded on or subject to the
rules of a foreign board of trade;
(II) the offer and sale in the United
States of a contract of sale for future
delivery on the index was authorized
before the date of the enactment of the
Commodity Futures Modernization Act of
2000; and
(III) the conditions of such
authorization continue to be met; or
(vi) a contract of sale for future delivery
on the index is traded on or subject to the
rules of a board of trade and meets such
requirements as are jointly established by
rule, regulation, or order by the Commission
and the Commodity Futures Trading Commission.
(D) Within 1 year after the enactment of the
Commodity Futures Modernization Act of 2000, the
Commission and the Commodity Futures Trading Commission
jointly shall adopt rules or regulations that set forth
the requirements under clause (iv) of subparagraph (C).
(E) An index that is a narrow-based security index
solely because it was a narrow-based security index for
more than 45 business days over 3 consecutive calendar
months pursuant to clause (iii) of subparagraph (C)
shall not be a narrow-based security index for the 3
following calendar months.
(F) For purposes of subparagraphs (B) and (C) of this
paragraph--
(i) the dollar value of average daily trading
volume and the market capitalization shall be
calculated as of the preceding 6 full calendar
months; and
(ii) the Commission and the Commodity Futures
Trading Commission shall, by rule or
regulation, jointly specify the method to be
used to determine market capitalization and
dollar value of average daily trading volume.
(56) The term ``security futures product'' means a
security future or any put, call, straddle, option, or
privilege on any security future.
(57)(A) The term ``margin'', when used with respect
to a security futures product, means the amount, type,
and form of collateral required to secure any extension
or maintenance of credit, or the amount, type, and form
of collateral required as a performance bond related to
the purchase, sale, or carrying of a security futures
product.
(B) The terms ``margin level'' and ``level of
margin'', when used with respect to a security futures
product, mean the amount of margin required to secure
any extension or maintenance of credit, or the amount
of margin required as a performance bond related to the
purchase, sale, or carrying of a security futures
product.
(C) The terms ``higher margin level'' and ``higher
level of margin'', when used with respect to a security
futures product, mean a margin level established by a
national securities exchange registered pursuant to
section 6(g) that is higher than the minimum amount
established and in effect pursuant to section
7(c)(2)(B).
(58) Audit committee.--The term ``audit committee''
means--
(A) a committee (or equivalent body)
established by and amongst the board of
directors of an issuer for the purpose of
overseeing the accounting and financial
reporting processes of the issuer and audits of
the financial statements of the issuer; and
(B) if no such committee exists with respect
to an issuer, the entire board of directors of
the issuer.
(59) Registered public accounting firm.--The term
``registered public accounting firm'' has the same
meaning as in section 2 of the Sarbanes-Oxley Act of
2002.
(60) Credit rating.--The term ``credit rating'' means
an assessment of the creditworthiness of an obligor as
an entity or with respect to specific securities or
money market instruments.
(61) Credit rating agency.--The term ``credit rating
agency'' means any person--
(A) engaged in the business of issuing credit
ratings on the Internet or through another
readily accessible means, for free or for a
reasonable fee, but does not include a
commercial credit reporting company;
(B) employing either a quantitative or
qualitative model, or both, to determine credit
ratings; and
(C) receiving fees from either issuers,
investors, or other market participants, or a
combination thereof.
(62) Nationally recognized statistical rating
organization.--The term ``nationally recognized
statistical rating organization'' means a credit rating
agency that--
(A) issues credit ratings certified by
qualified institutional buyers, in accordance
with section 15E(a)(1)(B)(ix), with respect
to--
(i) financial institutions, brokers,
or dealers;
(ii) insurance companies;
(iii) corporate issuers;
(iv) issuers of asset-backed
securities (as that term is defined in
section 1101(c) of part 229 of title
17, Code of Federal Regulations, as in
effect on the date of enactment of this
paragraph);
(v) issuers of government securities,
municipal securities, or securities
issued by a foreign government; or
(vi) a combination of one or more
categories of obligors described in any
of clauses (i) through (v); and
(B) is registered under section 15E.
(63) Person associated with a nationally recognized
statistical rating organization.--The term ``person
associated with'' a nationally recognized statistical
rating organization means any partner, officer,
director, or branch manager of a nationally recognized
statistical rating organization (or any person
occupying a similar status or performing similar
functions), any person directly or indirectly
controlling, controlled by, or under common control
with a nationally recognized statistical rating
organization, or any employee of a nationally
recognized statistical rating organization.
(64) Qualified institutional buyer.--The term
``qualified institutional buyer'' has the meaning given
such term in section 230.144A(a) of title 17, Code of
Federal Regulations, or any successor thereto.
(79) Asset-backed security.--The term ``asset-backed
security''--
(A) means a fixed-income or other security
collateralized by any type of self-liquidating
financial asset (including a loan, a lease, a
mortgage, or a secured or unsecured receivable)
that allows the holder of the security to
receive payments that depend primarily on cash
flow from the asset, including--
(i) a collateralized mortgage
obligation;
(ii) a collateralized debt
obligation;
(iii) a collateralized bond
obligation;
(iv) a collateralized debt obligation
of asset-backed securities;
(v) a collateralized debt obligation
of collateralized debt obligations; and
(vi) a security that the Commission,
by rule, determines to be an asset-
backed security for purposes of this
section; and
(B) does not include a security issued by a
finance subsidiary held by the parent company
or a company controlled by the parent company,
if none of the securities issued by the finance
subsidiary are held by an entity that is not
controlled by the parent company.
(65) Eligible contract participant.--The term
``eligible contract participant'' has the same meaning
as in section 1a of the Commodity Exchange Act (7
U.S.C. 1a).
(66) Major swap participant.--The term ``major swap
participant'' has the same meaning as in section 1a of
the Commodity Exchange Act (7 U.S.C. 1a).
(67) Major security-based swap participant.--
(A) In general.--The term ``major security-
based swap participant'' means any person--
(i) who is not a security-based swap
dealer; and
(ii)(I) who maintains a substantial
position in security-based swaps for
any of the major security-based swap
categories, as such categories are
determined by the Commission, excluding
both positions held for hedging or
mitigating commercial risk and
positions maintained by any employee
benefit plan (or any contract held by
such a plan) as defined in paragraphs
(3) and (32) of section 3 of the
Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1002) for the
primary purpose of hedging or
mitigating any risk directly associated
with the operation of the plan;
(II) whose outstanding security-based
swaps create substantial counterparty
exposure that could have serious
adverse effects on the financial
stability of the United States banking
system or financial markets; or
(III) that is a financial entity
that--
(aa) is highly leveraged
relative to the amount of
capital such entity holds and
that is not subject to capital
requirements established by an
appropriate Federal banking
agency; and
(bb) maintains a substantial
position in outstanding
security-based swaps in any
major security-based swap
category, as such categories
are determined by the
Commission.
(B) Definition of substantial position.--For
purposes of subparagraph (A), the Commission
shall define, by rule or regulation, the term
``substantial position'' at the threshold that
the Commission determines to be prudent for the
effective monitoring, management, and oversight
of entities that are systemically important or
can significantly impact the financial system
of the United States. In setting the definition
under this subparagraph, the Commission shall
consider the person's relative position in
uncleared as opposed to cleared security-based
swaps and may take into consideration the value
and quality of collateral held against
counterparty exposures.
(C) Scope of designation.--For purposes of
subparagraph (A), a person may be designated as
a major security-based swap participant for 1
or more categories of security-based swaps
without being classified as a major security-
based swap participant for all classes of
security-based swaps.
(68) Security-based swap.--
(A) In general.--Except as provided in
subparagraph (B), the term ``security-based
swap'' means any agreement, contract, or
transaction that--
(i) is a swap, as that term is
defined under section 1a of the
Commodity Exchange Act (without regard
to paragraph (47)(B)(x) of such
section); and
(ii) is based on--
(I) an index that is a
narrow-based security index,
including any interest therein
or on the value thereof;
(II) a single security or
loan, including any interest
therein or on the value
thereof; or
(III) the occurrence,
nonoccurrence, or extent of the
occurrence of an event relating
to a single issuer of a
security or the issuers of
securities in a narrow-based
security index, provided that
such event directly affects the
financial statements, financial
condition, or financial
obligations of the issuer.
(B) Rule of construction regarding master
agreements.--The term ``security-based swap''
shall be construed to include a master
agreement that provides for an agreement,
contract, or transaction that is a security-
based swap pursuant to subparagraph (A),
together with all supplements to any such
master agreement, without regard to whether the
master agreement contains an agreement,
contract, or transaction that is not a
security-based swap pursuant to subparagraph
(A), except that the master agreement shall be
considered to be a security-based swap only
with respect to each agreement, contract, or
transaction under the master agreement that is
a security-based swap pursuant to subparagraph
(A).
(C) Exclusions.--The term ``security-based
swap'' does not include any agreement,
contract, or transaction that meets the
definition of a security-based swap only
because such agreement, contract, or
transaction references, is based upon, or
settles through the transfer, delivery, or
receipt of an exempted security under paragraph
(12), as in effect on the date of enactment of
the Futures Trading Act of 1982 (other than any
municipal security as defined in paragraph (29)
as in effect on the date of enactment of the
Futures Trading Act of 1982), unless such
agreement, contract, or transaction is of the
character of, or is commonly known in the trade
as, a put, call, or other option.
(D) Mixed swap.--The term ``security-based
swap'' includes any agreement, contract, or
transaction that is as described in
subparagraph (A) and also is based on the value
of 1 or more interest or other rates,
currencies, commodities, instruments of
indebtedness, indices, quantitative measures,
other financial or economic interest or
property of any kind (other than a single
security or a narrow-based security index), or
the occurrence, non-occurrence, or the extent
of the occurrence of an event or contingency
associated with a potential financial,
economic, or commercial consequence (other than
an event described in subparagraph
(A)(ii)(III)).
(E) Rule of construction regarding use of the
term index.--The term ``index'' means an index
or group of securities, including any interest
therein or based on the value thereof.
(69) Swap.--The term ``swap'' has the same meaning as
in section 1a of the Commodity Exchange Act (7 U.S.C.
1a).
(70) Person associated with a security-based swap
dealer or major security-based swap participant.--
(A) In general.--The term ``person associated
with a security-based swap dealer or major
security-based swap participant'' or
``associated person of a security-based swap
dealer or major security-based swap
participant'' means--
(i) any partner, officer, director,
or branch manager of such security-
based swap dealer or major security-
based swap participant (or any person
occupying a similar status or
performing similar functions);
(ii) any person directly or
indirectly controlling, controlled by,
or under common control with such
security-based swap dealer or major
security-based swap participant; or
(iii) any employee of such security-
based swap dealer or major security-
based swap participant.
(B) Exclusion.--Other than for purposes of
section 15F(l)(2), the term ``person associated
with a security-based swap dealer or major
security-based swap participant'' or
``associated person of a security-based swap
dealer or major security-based swap
participant'' does not include any person
associated with a security-based swap dealer or
major security-based swap participant whose
functions are solely clerical or ministerial.
(71) Security-based swap dealer.--
(A) In general.--The term ``security-based
swap dealer'' means any person who--
(i) holds themself out as a dealer in
security-based swaps;
(ii) makes a market in security-based
swaps;
(iii) regularly enters into security-
based swaps with counterparties as an
ordinary course of business for its own
account; or
(iv) engages in any activity causing
it to be commonly known in the trade as
a dealer or market maker in security-
based swaps.
(B) Designation by type or class.--A person
may be designated as a security-based swap
dealer for a single type or single class or
category of security-based swap or activities
and considered not to be a security-based swap
dealer for other types, classes, or categories
of security-based swaps or activities.
(C) Exception.--The term ``security-based
swap dealer'' does not include a person that
enters into security-based swaps for such
person's own account, either individually or in
a fiduciary capacity, but not as a part of
regular business.
(D) De minimis exception.--The Commission
shall exempt from designation as a security-
based swap dealer an entity that engages in a
de minimis quantity of security-based swap
dealing in connection with transactions with or
on behalf of its customers. The Commission
shall promulgate regulations to establish
factors with respect to the making of any
determination to exempt.
(72) Appropriate federal banking agency.--The term
``appropriate Federal banking agency'' has the same
meaning as in section 3(q) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(q)).
(73) Board.--The term ``Board'' means the Board of
Governors of the Federal Reserve System.
(74) Prudential regulator.--The term ``prudential
regulator'' has the same meaning as in section 1a of
the Commodity Exchange Act (7 U.S.C. 1a).
(75) Security-based swap data repository.--The term
``security-based swap data repository'' means any
person that collects and maintains information or
records with respect to transactions or positions in,
or the terms and conditions of, security-based swaps
entered into by third parties for the purpose of
providing a centralized recordkeeping facility for
security-based swaps.
(76) Swap dealer.--The term ``swap dealer'' has the
same meaning as in section 1a of the Commodity Exchange
Act (7 U.S.C. 1a).
(77) Security-based swap execution facility.--The
term ``security-based swap execution facility'' means a
trading system or platform in which multiple
participants have the ability to execute or trade
security-based swaps by accepting bids and offers made
by multiple participants in the facility or system,
through any means of interstate commerce, including any
trading facility, that--
(A) facilitates the execution of security-
based swaps between persons; and
(B) is not a national securities exchange.
(78) Security-based swap agreement.--
(A) In general.--For purposes of sections 9,
10, 16, 20, and 21A of this Act, and section 17
of the Securities Act of 1933 (15 U.S.C. 77q),
the term ``security-based swap agreement''
means a swap agreement as defined in section
206A of the Gramm-Leach-Bliley Act (15 U.S.C.
78c note) of which a material term is based on
the price, yield, value, or volatility of any
security or any group or index of securities,
or any interest therein.
(B) Exclusions.--The term ``security-based
swap agreement'' does not include any security-
based swap.
(80) Emerging growth company.--The term ``emerging
growth company'' means an issuer that had total annual
gross revenues of less than $1,000,000,000 (as such
amount is indexed for inflation every 5 years by the
Commission to reflect the change in the Consumer Price
Index for All Urban Consumers published by the Bureau
of Labor Statistics, setting the threshold to the
nearest 1,000,000) during its most recently completed
fiscal year. An issuer that is an emerging growth
company as of the first day of that fiscal year shall
continue to be deemed an emerging growth company until
the earliest of--
(A) the last day of the fiscal year of the
issuer during which it had total annual gross
revenues of $1,000,000,000 (as such amount is
indexed for inflation every 5 years by the
Commission to reflect the change in the
Consumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics,
setting the threshold to the nearest 1,000,000)
or more;
(B) the last day of the fiscal year of the
issuer following the fifth anniversary of the
date of the first sale of common equity
securities of the issuer pursuant to an
effective registration statement under the
Securities Act of 1933;
(C) the date on which such issuer has, during
the previous 3-year period, issued more than
$1,000,000,000 in non-convertible debt; or
(D) the date on which such issuer is deemed
to be a ``large accelerated filer'', as defined
in section 240.12b-2 of title 17, Code of
Federal Regulations, or any successor thereto.
[(80)] (81) Funding portal.--The term ``funding
portal'' means any person acting as an intermediary in
a transaction involving the offer or sale of securities
for the account of others, solely pursuant to section
4(6) of the Securities Act of 1933 (15 U.S.C. 77d(6)),
that does not--
(A) offer investment advice or
recommendations;
(B) solicit purchases, sales, or offers to
buy the securities offered or displayed on its
website or portal;
(C) compensate employees, agents, or other
persons for such solicitation or based on the
sale of securities displayed or referenced on
its website or portal;
(D) hold, manage, possess, or otherwise
handle investor funds or securities; or
(E) engage in such other activities as the
Commission, by rule, determines appropriate.
(82) Chief economist.--The term ``Chief Economist''
means the Director of the Division of Economic and Risk
Analysis, or an employee of the Commission with
comparable authority, as determined by the Commission.
(b) The Commission and the Board of Governors of the Federal
Reserve System, as to matters within their respective
jurisdictions, shall have power by rules and regulations to
define technical, trade, accounting, and other terms used in
this title, consistently with the provisions and purposes of
this title.
(c) No provision of this title shall apply to, or be deemed
to include, any executive department or independent
establishment of the United States, or any lending agency which
is wholly owned, directly or indirectly, by the United States,
or any officer, agent, or employee of any such department,
establishment, or agency, acting in the course of his official
duty as such, unless such provision makes specific reference to
such department, establishment, or agency.
(d) No issuer of municipal securities or officer or employee
thereof acting in the course of his official duties as such
shall be deemed to be a ``broker'', ``dealer'', or ``municipal
securities dealer'' solely by reason of buying, selling, or
effecting transactions in the issuer's securities.
(e) Charitable Organizations.--
(1) Exemption.--Notwithstanding any other provision
of this title, but subject to paragraph (2) of this
subsection, a charitable organization, as defined in
section 3(c)(10)(D) of the Investment Company Act of
1940, or any trustee, director, officer, employee, or
volunteer of such a charitable organization acting
within the scope of such person's employment or duties
with such organization, shall not be deemed to be a
``broker'', ``dealer'', ``municipal securities
broker'', ``municipal securities dealer'', ``government
securities broker'', or ``government securities
dealer'' for purposes of this title solely because such
organization or person buys, holds, sells, or trades in
securities for its own account in its capacity as
trustee or administrator of, or otherwise on behalf of
or for the account of--
(A) such a charitable organization;
(B) a fund that is excluded from the
definition of an investment company under
section 3(c)(10)(B) of the Investment Company
Act of 1940; or
(C) a trust or other donative instrument
described in section 3(c)(10)(B) of the
Investment Company Act of 1940, or the settlors
(or potential settlors) or beneficiaries of any
such trust or other instrument.
(2) Limitation on compensation.--The exemption
provided under paragraph (1) shall not be available to
any charitable organization, or any trustee, director,
officer, employee, or volunteer of such a charitable
organization, unless each person who, on or after 90
days after the date of enactment of this subsection,
solicits donations on behalf of such charitable
organization from any donor to a fund that is excluded
from the definition of an investment company under
section 3(c)(10)(B) of the Investment Company Act of
1940, is either a volunteer or is engaged in the
overall fund raising activities of a charitable
organization and receives no commission or other
special compensation based on the number or the value
of donations collected for the fund.
(f) Consideration of Promotion of Efficiency, Competition,
and Capital Formation.--Whenever pursuant to this title the
Commission is engaged in rulemaking, or in the review of a rule
of a self-regulatory organization, and is required to consider
or determine whether an action is necessary or appropriate in
the public interest, the Commission shall also consider, in
addition to the protection of investors, whether the action
will promote efficiency, competition, and capital formation.
(g) Church Plans.--No church plan described in section 414(e)
of the Internal Revenue Code of 1986, no person or entity
eligible to establish and maintain such a plan under the
Internal Revenue Code of 1986, no company or account that is
excluded from the definition of an investment company under
section 3(c)(14) of the Investment Company Act of 1940, and no
trustee, director, officer or employee of or volunteer for such
plan, company, account, person, or entity, acting within the
scope of that person's employment or activities with respect to
such plan, shall be deemed to be a ``broker'', ``dealer'',
``municipal securities broker'', ``municipal securities
dealer'', ``government securities broker'', ``government
securities dealer'', ``clearing agency'', or ``transfer agent''
for purposes of this title--
(1) solely because such plan, company, person, or
entity buys, holds, sells, trades in, or transfers
securities or acts as an intermediary in making
payments in connection with transactions in securities
for its own account in its capacity as trustee or
administrator of, or otherwise on behalf of, or for the
account of, any church plan, company, or account that
is excluded from the definition of an investment
company under section 3(c)(14) of the Investment
Company Act of 1940; and
(2) if no such person or entity receives a commission
or other transaction-related sales compensation in
connection with any activities conducted in reliance on
the exemption provided by this subsection.
(h) Limited Exemption for Funding Portals.--
(1) In general.--The Commission shall, by rule,
exempt, conditionally or unconditionally, a registered
funding portal from the requirement to register as a
broker or dealer under section 15(a)(1), provided that
such funding portal--
(A) remains subject to the examination,
enforcement, and other rulemaking authority of
the Commission;
(B) is a member of a national securities
association registered under section 15A; and
(C) is subject to such other requirements
under this title as the Commission determines
appropriate under such rule.
(2) National securities association membership.--For
purposes of sections 15(b)(8) and 15A, the term
``broker or dealer'' includes a funding portal and the
term ``registered broker or dealer'' includes a
registered funding portal, except to the extent that
the Commission, by rule, determines otherwise, provided
that a national securities association shall only
examine for and enforce against a registered funding
portal rules of such national securities association
written specifically for registered funding portals.
* * * * * * *
securities and exchange commission
Sec. 4. (a) There is hereby established a Securities and
Exchange Commission (hereinafter referred to as the
``Commission'') to be composed of five commissioners to be
appointed by the President by and with the advice and consent
of the Senate. Not more than three of such commissioners shall
be members of the same political party, and in making
appointments members of different political parties shall be
appointed alternately as nearly as may be practicable. No
commissioner shall engage in any other business, vocation, or
employment than that of serving as commissioner, nor shall any
commissioner participate, directly or indirectly, in any stock-
market operations or transactions of a character subject to
regulation by the Commission pursuant to this title. Each
commissioner shall hold office for a term of five years and
until his successor is appointed and has qualified, except that
he shall not so continue to serve beyond the expiration of the
next session of Congress subsequent to the expiration of said
fixed term of office, and except (1) any commissioner appointed
to fill a vacancy occurring prior to the expiration of the term
for which his predecessor was appointed shall be appointed for
the remainder of such term, and (2) the terms of office of the
commissioners first taking office after the enactment of this
title shall expire as designated by the President at the time
of nomination, one at the end of one year, one at the end of
two years, one at the end of three years, one at the end of
four years, and one at the end of five years, after the date of
the enactment of this title.
(b) Appointment and Compensation of Staff and Leasing
Authority.--
(1) Appointment and compensation.--The Commission
shall appoint and compensate officers, attorneys,
economists, examiners, and other employees in
accordance with section 4802 of title 5, United States
Code.
(2) Reporting of information.--In establishing and
adjusting schedules of compensation and benefits for
officers, attorneys, economists, examiners, and other
employees of the Commission under applicable provisions
of law, the Commission shall inform the heads of the
agencies referred to under section 1206 of the
Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (12 U.S.C. 1833b) and Congress
of such compensation and benefits and shall seek to
maintain comparability with such agencies regarding
compensation and benefits.
(3) Leasing authority.--Nothwithstanding any other
provision of law, the Commission is authorized to enter
directly into leases for real property for office,
meeting, storage, and such other space as is necessary
to carry out its functions, and shall be exempt from
any General Services Administration space management
regulations or directives.
(c) Notwithstanding any other provision of law, in accordance
with regulations which the Commission shall prescribe to
prevent conflicts of interest, the Commission may accept
payment and reimbursement, in cash or in kind, from non-Federal
agencies, organizations, and individuals for travel,
subsistence, and other necessary expenses incurred by
Commission members and employees in attending meetings and
conferences concerning the functions or activities of the
Commission. Any payment or reimbursement accepted shall be
credited to the appropriated funds of the Commission. The
amount of travel, subsistence, and other necessary expenses for
members and employees paid or reimbursed under this subsection
may exceed per diem amounts established in official travel
regulations, but the Commission may include in its regulations
under this subsection a limitation on such amounts.
(d) Notwithstanding any other provision of law, former
employers of participants in the Commission's professional
fellows programs may pay such participants their actual
expenses for relocation to Washington, District of Columbia, to
facilitate their participation in such programs, and program
participants may accept such payments.
(e) Notwithstanding any other provision of law, whenever any
fee is required to be paid to the Commission pursuant to any
provision of the securities laws or any other law, the
Commission may provide by rule that such fee shall be paid in a
manner other than in cash and the Commission may also specify
the time that such fee shall be determined and paid relative to
the filing of any statement or document with the Commission.
(f) Reimbursement of Expenses for Assisting Foreign
Securities Authorities.--Notwithstanding any other provision of
law, the Commission may accept payment and reimbursement, in
cash or in kind, from a foreign securities authority, or made
on behalf of such authority, for necessary expenses incurred by
the Commission, its members, and employees in carrying out any
investigation pursuant to section 21(a)(2) of this title or in
providing any other assistance to a foreign securities
authority. Any payment or reimbursement accepted shall be
considered a reimbursement to the appropriated funds of the
Commission.
(g) Office of the Investor Advocate.--
(1) Office established.--There is established within
the Commission the Office of the Investor Advocate (in
this subsection referred to as the ``Office'').
(2) Investor advocate.--
(A) In general.--The head of the Office shall
be the Investor Advocate, who shall--
(i) report directly to the Chairman;
and
(ii) be appointed by the Chairman, in
consultation with the Commission, from
among individuals having experience in
advocating for the interests of
investors in securities and investor
protection issues, from the perspective
of investors.
(B) Compensation.--The annual rate of pay for
the Investor Advocate shall be equal to the
highest rate of annual pay for other senior
executives who report to the Chairman of the
Commission.
(C) Limitation on service.--An individual who
serves as the Investor Advocate may not be
employed by the Commission--
(i) during the 2-year period ending
on the date of appointment as Investor
Advocate; or
(ii) during the 5-year period
beginning on the date on which the
person ceases to serve as the Investor
Advocate.
(3) Staff of office.--The Investor Advocate, after
consultation with the Chairman of the Commission, may
retain or employ independent counsel, research staff,
and service staff, as the Investor Advocate deems
necessary to carry out the functions, powers, and
duties of the Office.
(4) Functions of the investor advocate.--The Investor
Advocate shall--
(A) assist retail investors in resolving
significant problems such investors may have
with the Commission or with self-regulatory
organizations;
(B) identify areas in which investors would
benefit from changes in the regulations of the
Commission or the rules of self-regulatory
organizations;
(C) identify problems that investors have
with financial service providers and investment
products;
(D) analyze the potential impact on investors
of--
(i) proposed regulations of the
Commission; and
(ii) proposed rules of self-
regulatory organizations registered
under this title; and
(E) to the extent practicable, propose to the
Commission changes in the regulations or orders
of the Commission and to Congress any
legislative, administrative, or personnel
changes that may be appropriate to mitigate
problems identified under this paragraph and to
promote the interests of investors.
(5) Access to documents.--The Commission shall ensure
that the Investor Advocate has full access to the
documents of the Commission and any self-regulatory
organization, as necessary to carry out the functions
of the Office.
(6) Annual reports.--
(A) Report on objectives.--
(i) In general.--Not later than June
30 of each year after 2010, the
Investor Advocate shall submit to the
Committee on Banking, Housing, and
Urban Affairs of the Senate and the
Committee on Financial Services of the
House of Representatives a report on
the objectives of the Investor Advocate
for the following fiscal year.
(ii) Contents.--Each report required
under clause (i) shall contain full and
substantive analysis and explanation.
(B) Report on activities.--
(i) In general.--Not later than
December 31 of each year after 2010,
the Investor Advocate shall submit to
the Committee on Banking, Housing, and
Urban Affairs of the Senate and the
Committee on Financial Services of the
House of Representatives a report on
the activities of the Investor Advocate
during the immediately preceding fiscal
year.
(ii) Contents.--Each report required
under clause (i) shall include--
(I) appropriate statistical
information and full and
substantive analysis;
(II) information on steps
that the Investor Advocate has
taken during the reporting
period to improve investor
services and the responsiveness
of the Commission and self-
regulatory organizations to
investor concerns;
(III) a summary of the most
serious problems encountered by
investors during the reporting
period;
(IV) an inventory of the
items described in subclause
(III) that includes--
(aa) identification
of any action taken by
the Commission or the
self-regulatory
organization and the
result of such action;
(bb) the length of
time that each item has
remained on such
inventory; and
(cc) for items on
which no action has
been taken, the reasons
for inaction, and an
identification of any
official who is
responsible for such
action;
(V) recommendations for such
administrative and legislative
actions as may be appropriate
to resolve problems encountered
by investors; and
(VI) any other information,
as determined appropriate by
the Investor Advocate.
(iii) Independence.--Each report
required under this paragraph shall be
provided directly to the Committees
listed in clause (i) without any prior
review or comment from the Commission,
any commissioner, any other officer or
employee of the Commission, or the
Office of Management and Budget.
(iv) Confidentiality.--No report
required under clause (i) may contain
confidential information.
(7) Regulations.--The Commission shall, by
regulation, establish procedures requiring a formal
response to all recommendations submitted to the
Commission by the Investor Advocate, not later than 3
months after the date of such submission.
(8) Ombudsman.--
(A) Appointment.--Not later than 180 days
after the date on which the first Investor
Advocate is appointed under paragraph
(2)(A)(i), the Investor Advocate shall appoint
an Ombudsman, who shall report directly to the
Investor Advocate.
(B) Duties.--The Ombudsman appointed under
subparagraph (A) shall--
(i) act as a liaison between the
Commission and any retail investor in
resolving problems that retail
investors may have with the Commission
or with self-regulatory organizations;
(ii) review and make recommendations
regarding policies and procedures to
encourage persons to present questions
to the Investor Advocate regarding
compliance with the securities laws;
and
(iii) establish safeguards to
maintain the confidentiality of
communications between the persons
described in clause (ii) and the
Ombudsman.
(C) Limitation.--In carrying out the duties
of the Ombudsman under subparagraph (B), the
Ombudsman shall utilize personnel of the
Commission to the extent practicable. Nothing
in this paragraph shall be construed as
replacing, altering, or diminishing the
activities of any ombudsman or similar office
of any other agency.
(D) Report.--The Ombudsman shall submit a
semiannual report to the Investor Advocate that
describes the activities and evaluates the
effectiveness of the Ombudsman during the
preceding year. The Investor Advocate shall
include the reports required under this section
in the reports required to be submitted by the
Inspector Advocate under paragraph (6).
(h) Examiners.--
(1) Division of trading and markets.--The Division of
Trading and Markets of the Commission, or any successor
organizational unit, shall have a staff of examiners
who shall--
(A) perform compliance inspections and
examinations of entities under the jurisdiction
of that Division; and
(B) report to the Director of that Division.
(2) Division of investment management.--The Division
of Investment Management of the Commission, or any
successor organizational unit, shall have a staff of
examiners who shall--
(A) perform compliance inspections and
examinations of entities under the jurisdiction
of that Division; and
(B) report to the Director of that Division.
(i) Securities and Exchange Commission Reserve Fund.--
(1) Reserve fund established.--There is established
in the Treasury of the United States a separate fund,
to be known as the ``Securities and Exchange Commission
Reserve Fund'' (referred to in this subsection as the
``Reserve Fund'').
(2) Reserve fund amounts.--
(A) In general.--Except as provided in
subparagraph (B), any registration fees
collected by the Commission under section 6(b)
of the Securities Act of 1933 (15 U.S.C.
77f(b)) or section 24(f) of the Investment
Company Act of 1940 (15 U.S.C. 80a-24(f)) shall
be deposited into the Reserve Fund.
(B) Limitations.--For any 1 fiscal year--
(i) the amount deposited in the Fund
may not exceed $50,000,000; and
(ii) the balance in the Fund may not
exceed $100,000,000.
(C) Excess fees.--Any amounts in excess of
the limitations described in subparagraph (B)
that the Commission collects from registration
fees under section 6(b) of the Securities Act
of 1933 (15 U.S.C. 77f(b)) or section 24(f) of
the Investment Company Act of 1940 (15 U.S.C.
80a-24(f)) shall be deposited in the General
Fund of the Treasury of the United States and
shall not be available for obligation by the
Commission.
(3) Use of amounts in reserve fund.--The Commission
may obligate amounts in the Reserve Fund, not to exceed
a total of $100,000,000 in any 1 fiscal year, as the
Commission determines is necessary to carry out the
functions of the Commission. Any amounts in the reserve
fund shall remain available until expended. Not later
than 10 days after the date on which the Commission
obligates amounts under this paragraph, the Commission
shall notify Congress of the date, amount, and purpose
of the obligation.
(4) Rule of construction.--Amounts collected and
deposited in the Reserve Fund shall not be construed to
be Government funds or appropriated monies and shall
not be subject to apportionment for the purpose of
chapter 15 of title 31, United States Code, or under
any other authority.
(j) Office of the Advocate for Small Business Capital
Formation.--
(1) Office established.--There is established within
the Commission the Office of the Advocate for Small
Business Capital Formation (hereafter in this
subsection referred to as the ``Office'').
(2) Advocate for small business capital formation.--
(A) In general.--The head of the Office shall
be the Advocate for Small Business Capital
Formation, who shall--
(i) report directly to the
Commission; and
(ii) be appointed by the Commission,
from among individuals having
experience in advocating for the
interests of small businesses and
encouraging small business capital
formation.
(B) Compensation.--The annual rate of pay for
the Advocate for Small Business Capital
Formation shall be equal to the highest rate of
annual pay for other senior executives who
report directly to the Commission.
(C) No current employee of the commission.--
An individual may not be appointed as the
Advocate for Small Business Capital Formation
if the individual is currently employed by the
Commission.
(3) Staff of office.--The Advocate for Small Business
Capital Formation, after consultation with the
Commission, may retain or employ independent counsel,
research staff, and service staff, as the Advocate for
Small Business Capital Formation determines to be
necessary to carry out the functions of the Office.
(4) Functions of the advocate for small business
capital formation.--The Advocate for Small Business
Capital Formation shall--
(A) assist small businesses and small
business investors in resolving significant
problems such businesses and investors may have
with the Commission or with self-regulatory
organizations;
(B) identify areas in which small businesses
and small business investors would benefit from
changes in the regulations of the Commission or
the rules of self-regulatory organizations;
(C) identify problems that small businesses
have with securing access to capital, including
any unique challenges to minority-owned small
businesses, women-owned small businesses,
rural-area small businesses, and small
businesses affected by hurricanes or other
natural disasters;
(D) analyze the potential impact on small
businesses and small business investors of--
(i) proposed regulations of the
Commission that are likely to have a
significant economic impact on small
businesses and small business capital
formation; and
(ii) proposed rules that are likely
to have a significant economic impact
on small businesses and small business
capital formation of self-regulatory
organizations registered under this
title;
(E) conduct outreach to small businesses and
small business investors, including through
regional roundtables, in order to solicit views
on relevant capital formation issues;
(F) to the extent practicable, propose to the
Commission changes in the regulations or orders
of the Commission and to Congress any
legislative, administrative, or personnel
changes that may be appropriate to mitigate
problems identified under this paragraph and to
promote the interests of small businesses and
small business investors;
(G) consult with the Investor Advocate on
proposed recommendations made under
subparagraph (F); and
(H) advise the Investor Advocate on issues
related to small businesses and small business
investors.
(5) Access to documents.--The Commission shall ensure
that the Advocate for Small Business Capital Formation
has full access to the documents and information of the
Commission and any self-regulatory organization, as
necessary to carry out the functions of the Office.
(6) Annual report on activities.--
(A) In general.--Not later than December 31
of each year after 2015, the Advocate for Small
Business Capital Formation shall submit to the
Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on
Financial Services of the House of
Representatives a report on the activities of
the Advocate for Small Business Capital
Formation during the immediately preceding
fiscal year.
(B) Contents.--Each report required under
subparagraph (A) shall include--
(i) appropriate statistical
information and full and substantive
analysis;
(ii) information on steps that the
Advocate for Small Business Capital
Formation has taken during the
reporting period to improve small
business services and the
responsiveness of the Commission and
self-regulatory organizations to small
business and small business investor
concerns;
(iii) a summary of the most serious
issues encountered by small businesses
and small business investors, including
any unique issues encountered by
minority-owned small businesses, women-
owned small businesses, rural-area
small businesses, and small businesses
affected by hurricanes or other natural
disasters and their investors, during
the reporting period;
(iv) an inventory of the items
summarized under clause (iii)
(including items summarized under such
clause for any prior reporting period
on which no action has been taken or
that have not been resolved to the
satisfaction of the Advocate for Small
Business Capital Formation as of the
beginning of the reporting period
covered by the report) that includes--
(I) identification of any
action taken by the Commission
or the self-regulatory
organization and the result of
such action;
(II) the length of time that
each item has remained on such
inventory; and
(III) for items on which no
action has been taken, the
reasons for inaction, and an
identification of any official
who is responsible for such
action;
(v) recommendations for such changes
to the regulations, guidance and orders
of the Commission and such legislative
actions as may be appropriate to
resolve problems with the Commission
and self-regulatory organizations
encountered by small businesses and
small business investors and to
encourage small business capital
formation; and
(vi) any other information, as
determined appropriate by the Advocate
for Small Business Capital Formation.
(C) Confidentiality.--No report required by
subparagraph (A) may contain confidential
information.
(D) Independence.--Each report required under
subparagraph (A) shall be provided directly to
the committees of Congress listed in such
subparagraph without any prior review or
comment from the Commission, any commissioner,
any other officer or employee of the
Commission, or the Office of Management and
Budget.
(7) Regulations.--The Commission shall establish
procedures requiring a formal response to all
recommendations submitted to the Commission by the
Advocate for Small Business Capital Formation, not
later than 3 months after the date of such submission.
(8) Government-business forum on small business
capital formation.--The Advocate for Small Business
Capital Formation shall be responsible for planning,
organizing, and executing the annual Government-
Business Forum on Small Business Capital Formation
described in section 503 of the Small Business
Investment Incentive Act of 1980 (15 U.S.C. 80c-1).
(9) Rule of construction.--Nothing in this subsection
may be construed as replacing or reducing the
responsibilities of the Investor Advocate with respect
to small business investors.
* * * * * * *
SEC. 4F. INTERNAL RISK CONTROLS.
(a) In General.--Each of the following entities, in
consultation with the Chief Economist, shall develop
comprehensive internal risk control mechanisms to safeguard and
govern the storage of all market data by such entity, all
market data sharing agreements of such entity, and all academic
research performed at such entity using market data:
(1) The Commission.
(2) Each national securities association registered
pursuant to section 15A.
(3) The operator of the consolidated audit trail
created by a national market system plan approved
pursuant to section 242.613 of title 17, Code of
Federal Regulations (or any successor regulation).
(b) Consolidated Audit Trail Prohibited From Accepting Market
Data Until Mechanisms Developed.--The operator described in
paragraph (3) of subsection (a) may not accept market data (or
shall cease accepting market data) until the operator has
developed the mechanisms required by such subsection. Any
requirement for a person to provide market data to the operator
shall not apply during any time when the operator is prohibited
by this subsection from accepting such data.
(c) Treatment of Previously Developed Mechanisms.--The
development of comprehensive internal risk control mechanisms
required by subsection (a) may occur, in whole or in part,
before the date of the enactment of this section, if such
development and such mechanisms meet the requirements of such
subsection (including consultation with the Chief Economist).
* * * * * * *
registration and regulation of brokers and dealers
Sec. 15. (a)(1) It shall be unlawful for any broker or dealer
which is either a person other than a natural person or a
natural person not associated with a broker or dealer which is
a person other than a natural person (other than such a broker
or dealer whose business is exclusively intrastate and who does
not make use of any facility of a national securities exchange)
to make use of the mails or any means or instrumentality of
interstate commerce to effect any transactions in, or to induce
or attempt to induce the purchase or sale of, any security
(other than an exempted security or commercial paper, bankers'
acceptances, or commercial bills) unless such broker or dealer
is registered in accordance with subsection (b) of this
section.
(2) The Commission, by rule or order, as it deems consistent
with the public interest and the protection of investors, may
conditionally or unconditionally exempt from paragraph (1) of
this subsection any broker or dealer or class of brokers or
dealers specified in such rule or order.
(b)(1) A broker or dealer may be registered by filing with
the Commission an application for registration in such form and
containing such information and documents concerning such
broker or dealer and any persons associated with such broker or
dealer as the Commission, by rule, may prescribe as necessary
or appropriate in the public interest or for the protection of
investors. Within forty-five days of the date of the filing of
such application (or within such longer period as to which the
applicant consents), the Commission shall--
(A) by order grant registration, or
(B) institute proceedings to determine whether
registration should be denied. Such proceedings shall
include notice of the grounds for denial under
consideration and opportunity for hearing and shall be
concluded within one hundred twenty days of the date of
the filing of the application for registration. At the
conclusion of such proceedings, the Commission, by
order, shall grant or deny such registration. The
Commission may extend the time for conclusion of such
proceedings for up to ninety days if it finds good
cause for such extension and publishes its reasons for
so finding or for such longer period as to which the
applicant consents.
The Commission shall grant such registration if the Commission
finds that the requirements of this section are satisfied. The
order granting registration shall not be effective until such
broker or dealer has become a member of a registered securities
association, or until such broker or dealer has become a member
of a national securities exchange, if such broker or dealer
effects transactions solely on that exchange, unless the
Commission has exempted such broker or dealer, by rule or
order, from such membership. The Commission shall deny such
registration if it does not make such a finding or if it finds
that if the applicant were so registered, its registration
would be subject to suspension or revocation under paragraph
(4) of this subsection.
(2)(A) An application for registration of a broker or dealer
to be formed or organized may be made by a broker or dealer to
which the broker or dealer to be formed or organized is to be
the successor. Such application, in such form as the
Commission, by rule, may prescribe, shall contain such
information and documents concerning the applicant, the
successor, and any persons associated with the applicant or the
successor, as the Commission, by rule, may prescribe as
necessary or appropriate in the public interest or for the
protection of investors. The grant or denial of registration to
such an applicant shall be in accordance with the procedures
set forth in paragraph (1) of this subsection. If the
Commission grants such registration, the registration shall
terminate on the forty-fifth day after the effective date
thereof, unless prior thereto the successor shall, in
accordance with such rules and regulations as the Commission
may prescribe, adopt the application for registration as its
own.
(B) Any person who is a broker or dealer solely by reason of
acting as a municipal securities dealer or municipal securities
broker, who so acts through a separately identifiable
department or division, and who so acted in such a manner on
the date of enactment of the Securities Acts Amendments of
1975, may, in accordance with such terms and conditions as the
Commission, by rule, prescribes as necessary and appropriate in
the public interest and for the protection of investors,
register such separately identifiable department or division in
accordance with this subsection. If any such department or
division is so registered, the department or division and not
such person himself shall be the broker or dealer for purposes
of this title.
(C) Within six months of the date of the granting of
registration to a broker or dealer, the Commission, or upon the
authorization and direction of the Commission, a registered
securities association or national securities exchange of which
such broker or dealer is a member, shall conduct an inspection
of the broker or dealer to determine whether it is operating in
conformity with the provisions of this title and the rules and
regulations thereunder: Provided, however, That the Commission
may delay such inspection of any class of brokers or dealers
for a period not to exceed six months.
(3) Any provision of this title (other than section 5 and
subsection (a) of this section) which prohibits any act,
practice, or course of business if the mails or any means or
instrumentality of interstate commerce is used in connection
therewith shall also prohibit any such act, practice, or course
of business by any registered broker or dealer or any person
acting on behalf of such a broker or dealer, irrespective of
any use of the mails or any means or instrumentality of
interstate commerce in connection therewith.
(4) The Commission, by order, shall censure, place
limitations on the activities, functions, or operations of,
suspend for a period not exceeding twelve months, or revoke the
registration of any broker or dealer if it finds, on the record
after notice and opportunity for hearing, that such censure,
placing of limitations, suspension, or revocation is in the
public interest and that such broker or dealer, whether prior
or subsequent to becoming such, or any person associated with
such broker or dealer, whether prior or subsequent to becoming
so associated--
(A) has willfully made or caused to be made in any
application for registration or report required to be
filed with the Commission or with any other appropriate
regulatory agency under this title, or in any
proceeding before the Commission with respect to
registration, any statement which was at the time and
in the light of the circumstances under which it was
made false or misleading with respect to any material
fact, or has omitted to state in any such application
or report any material fact which is required to be
stated therein.
(B) has been convicted within ten years preceding the
filing of any application for registration or at any
time thereafter of any felony or misdemeanor or of a
substantially equivalent crime by a foreign court of
competent jurisdiction which the Commission finds--
(i) involves the purchase or sale of any
security, the taking of a false oath, the
making of a false report, bribery, perjury,
burglary, any substantially equivalent activity
however denominated by the laws of the relevant
foreign government, or conspiracy to commit any
such offense;
(ii) arises out of the conduct of the
business of a broker, dealer, municipal
securities dealer municipal advisor,,
government securities broker, government
securities dealer, investment adviser, bank,
insurance company, fiduciary, transfer agent,
nationally recognized statistical rating
organization, foreign person performing a
function substantially equivalent to any of the
above, or entity or person required to be
registered under the Commodity Exchange Act (7
U.S.C. 1 et seq.) or any substantially
equivalent foreign statute or regulation;
(iii) involves the larceny, theft, robbery,
extortion, forgery, counterfeiting, fraudulent
concealment, embezzlement, fraudulent
conversion, or misappropriation of funds, or
securities, or substantially equivalent
activity however denominated by the laws of the
relevant foreign government; or
(iv) involves the violation of section 152,
1341, 1342, or 1343 or chapter 25 or 47 of
title 18, United States Code, or a violation of
a substantially equivalent foreign statute.
(C) is permanently or temporarily enjoined by order,
judgment, or decree of any court of competent
jurisdiction from acting as an investment adviser,
underwriter, broker, dealer, municipal securities
dealer municipal advisor,, government securities
broker, government securities dealer, security-based
swap dealer, major security-based swap participant,
transfer agent, nationally recognized statistical
rating organization, foreign person performing a
function substantially equivalent to any of the above,
or entity or person required to be registered under the
Commodity Exchange Act or any substantially equivalent
foreign statute or regulation, or as an affiliated
person or employee of any investment company, bank,
insurance company, foreign entity substantially
equivalent to any of the above, or entity or person
required to be registered under the Commodity Exchange
Act or any substantially equivalent foreign statute or
regulation, or from engaging in or continuing any
conduct or practice in connection with any such
activity, or in connection with the purchase or sale of
any security.
(D) has willfully violated any provision of the
Securities Act of 1933, the Investment Advisers Act of
1940, the Investment Company Act of 1940, the Commodity
Exchange Act, this title, the rules or regulations
under any of such statutes, or the rules of the
Municipal Securities Rulemaking Board, or is unable to
comply with any such provision.
(E) has willfully aided, abetted, counseled,
commanded, induced, or procured the violation by any
other person of any provision of the Securities Act of
1933, the Investment Advisers Act of 1940, the
Investment Company Act of 1940, the Commodity Exchange
Act, this title, the rules or regulations under any of
such statutes, or the rules of the Municipal Securities
Rulemaking Board, or has failed reasonably to
supervise, with a view to preventing violations of the
provisions of such statutes, rules, and regulations,
another person who commits such a violation, if such
other person is subject to his supervision. For the
purposes of this subparagraph (E) no person shall be
deemed to have failed reasonably to supervise any other
person, if--
(i) there have been established procedures,
and a system for applying such procedures,
which would reasonably be expected to prevent
and detect, insofar as practicable, any such
violation by such other person, and
(ii) such person has reasonably discharged
the duties and obligations incumbent upon him
by reason of such procedures and system without
reasonable cause to believe that such
procedures and system were not being complied
with.
(F) is subject to any order of the Commission barring
or suspending the right of the person to be associated
with a broker, dealer, security-based swap dealer, or a
major security-based swap participant;
(G) has been found by a foreign financial regulatory
authority to have--
(i) made or caused to be made in any
application for registration or report required
to be filed with a foreign financial regulatory
authority, or in any proceeding before a
foreign financial regulatory authority with
respect to registration, any statement that was
at the time and in the light of the
circumstances under which it was made false or
misleading with respect to any material fact,
or has omitted to state in any application or
report to the foreign financial regulatory
authority any material fact that is required to
be stated therein;
(ii) violated any foreign statute or
regulation regarding transactions in
securities, or contracts of sale of a commodity
for future delivery, traded on or subject to
the rules of a contract market or any board of
trade;
(iii) aided, abetted, counseled, commanded,
induced, or procured the violation by any
person of any provision of any statutory
provisions enacted by a foreign government, or
rules or regulations thereunder, empowering a
foreign financial regulatory authority
regarding transactions in securities, or
contracts of sale of a commodity for future
delivery, traded on or subject to the rules of
a contract market or any board of trade, or has
been found, by a foreign financial regulatory
authority, to have failed reasonably to
supervise, with a view to preventing violations
of such statutory provisions, rules, and
regulations, another person who commits such a
violation, if such other person is subject to
his supervision; or
(H) is subject to any final order of a State
securities commission (or any agency or officer
performing like functions), State authority that
supervises or examines banks, savings associations, or
credit unions, State insurance commission (or any
agency or office performing like functions), an
appropriate Federal banking agency (as defined in
section 3 of the Federal Deposit Insurance Act (12
U.S.C. 1813(q))), or the National Credit Union
Administration, that--
(i) bars such person from association with an
entity regulated by such commission, authority,
agency, or officer, or from engaging in the
business of securities, insurance, banking,
savings association activities, or credit union
activities; or
(ii) constitutes a final order based on
violations of any laws or regulations that
prohibit fraudulent, manipulative, or deceptive
conduct.
(5) Pending final determination whether any registration
under this subsection shall be revoked, the Commission, by
order, may suspend such registration, if such suspension
appears to the Commission, after notice and opportunity for
hearing, to be necessary or appropriate in the public interest
or for the protection of investors. Any registered broker or
dealer may, upon such terms and conditions as the Commission
deems necessary or appropriate in the public interest or for
the protection of investors, withdraw from registration by
filing a written notice of withdrawal with the Commission. If
the Commission finds that any registered broker or dealer is no
longer in existence or has ceased to do business as a broker or
dealer, the Commission, by order, shall cancel the registration
of such broker or dealer.
(6)(A) With respect to any person who is associated, who is
seeking to become associated, or, at the time of the alleged
misconduct, who was associated or was seeking to become
associated with a broker or dealer, or any person
participating, or, at the time of the alleged misconduct, who
was participating, in an offering of any penny stock, the
Commission, by order, shall censure, place limitations on the
activities or functions of such person, or suspend for a period
not exceeding 12 months, or bar any such person from being
associated with a broker, dealer, investment adviser, municipal
securities dealer, municipal advisor, transfer agent, or
nationally recognized statistical rating organization, or from
participating in an offering of penny stock, if the Commission
finds, on the record after notice and opportunity for a
hearing, that such censure, placing of limitations, suspension,
or bar is in the public interest and that such person--
(i) has committed or omitted any act, or is subject
to an order or finding, enumerated in subparagraph (A),
(D), (E), (H), or (G) of paragraph (4) of this
subsection;
(ii) has been convicted of any offense specified in
subparagraph (B) of such paragraph (4) within 10 years
of the commencement of the proceedings under this
paragraph; or
(iii) is enjoined from any action, conduct, or
practice specified in subparagraph (C) of such
paragraph (4).
(B) It shall be unlawful--
(i) for any person as to whom an order under
subparagraph (A) is in effect, without the consent of
the Commission, willfully to become, or to be,
associated with a broker or dealer in contravention of
such order, or to participate in an offering of penny
stock in contravention of such order;
(ii) for any broker or dealer to permit such a
person, without the consent of the Commission, to
become or remain, a person associated with the broker
or dealer in contravention of such order, if such
broker or dealer knew, or in the exercise of reasonable
care should have known, of such order; or
(iii) for any broker or dealer to permit such a
person, without the consent of the Commission, to
participate in an offering of penny stock in
contravention of such order, if such broker or dealer
knew, or in the exercise of reasonable care should have
known, of such order and of such participation.
(C) For purposes of this paragraph, the term ``person
participating in an offering of penny stock'' includes any
person acting as any promoter, finder, consultant, agent, or
other person who engages in activities with a broker, dealer,
or issuer for purposes of the issuance or trading in any penny
stock, or inducing or attempting to induce the purchase or sale
of any penny stock. The Commission may, by rule or regulation,
define such term to include other activities, and may, by rule,
regulation, or order, exempt any person or class of persons, in
whole or in part, conditionally or unconditionally, from such
term.
(7) No registered broker or dealer or government securities
broker or government securities dealer registered (or required
to register) under section 15C(a)(1)(A) shall effect any
transaction in, or induce the purchase or sale of, any security
unless such broker or dealer meets such standards of
operational capability and such broker or dealer and all
natural persons associated with such broker or dealer meet such
standards of training, experience, competence, and such other
qualifications as the Commission finds necessary or appropriate
in the public interest or for the protection of investors. The
Commission shall establish such standards by rules and
regulations, which may--
(A) specify that all or any portion of such standards
shall be applicable to any class of brokers and dealers
and persons associated with brokers and dealers;
(B) require persons in any such class to pass tests
prescribed in accordance with such rules and
regulations, which tests shall, with respect to any
class of partners, officers, or supervisory employees
(which latter term may be defined by the Commission's
rules and regulations and as so defined shall include
branch managers of brokers or dealers) engaged in the
management of the broker or dealer, include questions
relating to bookkeeping, accounting, internal control
over cash and securities, supervision of employees,
maintenance of records, and other appropriate matters;
and
(C) provide that persons in any such class other than
brokers and dealers and partners, officers, and
supervisory employees of brokers or dealers, may be
qualified solely on the basis of compliance with such
standards of training and such other qualifications as
the Commission finds appropriate.
The Commission, by rule, may prescribe reasonable fees and
charges to defray its costs in carrying out this paragraph,
including, but not limited to, fees for any test administered
by it or under its direction. The Commission may cooperate with
registered securities associations and national securities
exchanges in devising and administering tests and may require
registered brokers and dealers and persons associated with such
brokers and dealers to pass tests administered by or on behalf
of any such association or exchange and to pay such association
or exchange reasonable fees or charges to defray the costs
incurred by such association or exchange in administering such
tests.
(8) It shall be unlawful for any registered broker or dealer
to effect any transaction in, or induce or attempt to induce
the purchase or sale of, any security (other than or commercial
paper, bankers' acceptances, or commercial bills), unless such
broker or dealer is a member of a securities association
registered pursuant to section 15A of this title or effects
transactions in securities solely on a national securities
exchange of which it is a member.
(9) The Commission by rule or order, as it deems consistent
with the public interest and the protection of investors, may
conditionally or unconditionally exempt from paragraph (8) of
this subsection any broker or dealer or class of brokers or
dealers specified in such rule or order.
(10) For the purposes of determining whether a person is
subject to a statutory disqualification under section 6(c)(2),
15A(g)(2), or 17A(b)(4)(A) of this title, the term
``Commission'' in paragraph (4)(B) of this subsection shall
mean ``exchange'', ``association'', or ``clearing agency'',
respectively.
(11) Broker/dealer registration with respect to
transactions in security futures products.--
(A) Notice registration.--
(i) Contents of notice.--
Notwithstanding paragraphs (1) and (2),
a broker or dealer required to register
only because it effects transactions in
security futures products on an
exchange registered pursuant to section
6(g) may register for purposes of this
section by filing with the Commission a
written notice in such form and
containing such information concerning
such broker or dealer and any persons
associated with such broker or dealer
as the Commission, by rule, may
prescribe as necessary or appropriate
in the public interest or for the
protection of investors. A broker or
dealer may not register under this
paragraph unless that broker or dealer
is a member of a national securities
association registered under section
15A(k).
(ii) Immediate effectiveness.--Such
registration shall be effective
contemporaneously with the submission
of notice, in written or electronic
form, to the Commission, except that
such registration shall not be
effective if the registration would be
subject to suspension or revocation
under paragraph (4).
(iii) Suspension.--Such registration
shall be suspended immediately if a
national securities association
registered pursuant to section 15A(k)
of this title suspends the membership
of that broker or dealer.
(iv) Termination.--Such registration
shall be terminated immediately if any
of the above stated conditions for
registration set forth in this
paragraph are no longer satisfied.
(B) Exemptions for registered brokers and
dealers.--A broker or dealer registered
pursuant to the requirements of subparagraph
(A) shall be exempt from the following
provisions of this title and the rules
thereunder with respect to transactions in
security futures products:
(i) Section 8.
(ii) Section 11.
(iii) Subsections (c)(3) and (c)(5)
of this section.
(iv) Section 15B.
(v) Section 15C.
(vi) Subsections (d), (e), (f), (g),
(h), and (i) of section 17.
(12) Exemption for security futures product exchange
members.--
(A) Registration exemption.--A natural person
shall be exempt from the registration
requirements of this section if such person--
(i) is a member of a designated
contract market registered with the
Commission as an exchange pursuant to
section 6(g);
(ii) effects transactions only in
securities on the exchange of which
such person is a member; and
(iii) does not directly accept or
solicit orders from public customers or
provide advice to public customers in
connection with the trading of security
futures products.
(B) Other exemptions.--A natural person
exempt from registration pursuant to
subparagraph (A) shall also be exempt from the
following provisions of this title and the
rules thereunder:
(i) Section 8.
(ii) Section 11.
(iii) Subsections (c)(3), (c)(5), and
(e) of this section.
(iv) Section 15B.
(v) Section 15C.
(vi) Subsections (d), (e), (f), (g),
(h), and (i) of section 17.
(13) Registration exemption for merger and
acquisition brokers.--
(A) In general.--Except as provided in
subparagraph (B), an M&A broker shall be exempt
from registration under this section.
(B) Excluded activities.--An M&A broker is
not exempt from registration under this
paragraph if such broker does any of the
following:
(i) Directly or indirectly, in
connection with the transfer of
ownership of an eligible privately held
company, receives, holds, transmits, or
has custody of the funds or securities
to be exchanged by the parties to the
transaction.
(ii) Engages on behalf of an issuer
in a public offering of any class of
securities that is registered, or is
required to be registered, with the
Commission under section 12 or with
respect to which the issuer files, or
is required to file, periodic
information, documents, and reports
under subsection (d).
(iii) Engages on behalf of any party
in a transaction involving a shell
company, other than a business
combination related shell company.
(iv) Directly, or indirectly through
any of its affiliates, provides
financing related to the transfer of
ownership of an eligible privately held
company.
(v) Assists any party to obtain
financing from an unaffiliated third
party without--
(I) complying with all other
applicable laws in connection
with such assistance,
including, if applicable,
Regulation T (12 C.F.R. 220 et
seq.); and
(II) disclosing any
compensation in writing to the
party.
(vi) Represents both the buyer and
the seller in the same transaction
without providing clear written
disclosure as to the parties the broker
represents and obtaining written
consent from both parties to the joint
representation.
(vii) Facilitates a transaction with
a group of buyers formed with the
assistance of the M&A broker to acquire
the eligible privately held company.
(viii) Engages in a transaction
involving the transfer of ownership of
an eligible privately held company to a
passive buyer or group of passive
buyers. For purposes of the preceding
sentence, a buyer that is actively
involved in managing the acquired
company is not a passive buyer,
regardless of whether such buyer is
itself owned by passive beneficial
owners.
(ix) Binds a party to a transfer of
ownership of an eligible privately held
company.
(C) Disqualifications.--An M&A broker is not
exempt from registration under this paragraph
if such broker is subject to--
(i) suspension or revocation of
registration under paragraph (4);
(ii) a statutory disqualification
described in section 3(a)(39);
(iii) a disqualification under the
rules adopted by the Commission under
section 926 of the Investor Protection
and Securities Reform Act of 2010 (15
U.S.C. 77d note); or
(iv) a final order described in
paragraph (4)(H).
(D) Rule of construction.--Nothing in this
paragraph shall be construed to limit any other
authority of the Commission to exempt any
person, or any class of persons, from any
provision of this title, or from any provision
of any rule or regulation thereunder.
(E) Definitions.--In this paragraph:
(i) Business combination related
shell company.--The term ``business
combination related shell company''
means a shell company that is formed by
an entity that is not a shell company--
(I) solely for the purpose of
changing the corporate domicile
of that entity solely within
the United States; or
(II) solely for the purpose
of completing a business
combination transaction (as
defined under section
230.165(f) of title 17, Code of
Federal Regulations) among one
or more entities other than the
company itself, none of which
is a shell company.
(ii) Control.--The term ``control''
means the power, directly or
indirectly, to direct the management or
policies of a company, whether through
ownership of securities, by contract,
or otherwise. There is a presumption of
control for any person who--
(I) is a director, general
partner, member or manager of a
limited liability company, or
corporate officer of a
corporation or limited
liability company, and
exercises executive
responsibility (or has similar
status or functions);
(II) has the right to vote 25
percent or more of a class of
voting securities or the power
to sell or direct the sale of
25 percent or more of a class
of voting securities; or
(III) in the case of a
partnership or limited
liability company, has the
right to receive upon
dissolution, or has
contributed, 25 percent or more
of the capital.
(iii) Eligible privately held
company.--The term ``eligible privately
held company'' means a privately held
company that meets both of the
following conditions:
(I) The company does not have
any class of securities
registered, or required to be
registered, with the Commission
under section 12 or with
respect to which the company
files, or is required to file,
periodic information,
documents, and reports under
subsection (d).
(II) In the fiscal year
ending immediately before the
fiscal year in which the
services of the M&A broker are
initially engaged with respect
to the securities transaction,
the company meets either or
both of the following
conditions (determined in
accordance with the historical
financial accounting records of
the company):
(aa) The earnings of
the company before
interest, taxes,
depreciation, and
amortization are less
than $25,000,000.
(bb) The gross
revenues of the company
are less than
$250,000,000.
For purposes of this subclause,
the Commission may by rule
modify the dollar figures if
the Commission determines that
such a modification is
necessary or appropriate in the
public interest or for the
protection of investors.
(iv) M&A broker.--The term ``M&A
broker'' means a broker, and any person
associated with a broker, engaged in
the business of effecting securities
transactions solely in connection with
the transfer of ownership of an
eligible privately held company,
regardless of whether the broker acts
on behalf of a seller or buyer, through
the purchase, sale, exchange, issuance,
repurchase, or redemption of, or a
business combination involving,
securities or assets of the eligible
privately held company, if the broker
reasonably believes that--
(I) upon consummation of the
transaction, any person
acquiring securities or assets
of the eligible privately held
company, acting alone or in
concert, will control and,
directly or indirectly, will be
active in the management of the
eligible privately held company
or the business conducted with
the assets of the eligible
privately held company; and
(II) if any person is offered
securities in exchange for
securities or assets of the
eligible privately held
company, such person will,
prior to becoming legally bound
to consummate the transaction,
receive or have reasonable
access to the most recent
fiscal year-end financial
statements of the issuer of the
securities as customarily
prepared by the management of
the issuer in the normal course
of operations and, if the
financial statements of the
issuer are audited, reviewed,
or compiled, any related
statement by the independent
accountant, a balance sheet
dated not more than 120 days
before the date of the offer,
and information pertaining to
the management, business,
results of operations for the
period covered by the foregoing
financial statements, and
material loss contingencies of
the issuer.
(v) Shell company.--The term ``shell
company'' means a company that at the
time of a transaction with an eligible
privately held company--
(I) has no or nominal
operations; and
(II) has--
(aa) no or nominal
assets;
(bb) assets
consisting solely of
cash and cash
equivalents; or
(cc) assets
consisting of any
amount of cash and cash
equivalents and nominal
other assets.
(F) Inflation adjustment.--
(i) In general.--On the date that is
5 years after the date of the enactment
of the Small Business Mergers,
Acquisitions, Sales, and Brokerage
Simplification Act of 2018, and every 5
years thereafter, each dollar amount in
subparagraph (E)(ii)(II) shall be
adjusted by--
(I) dividing the annual value
of the Employment Cost Index
For Wages and Salaries, Private
Industry Workers (or any
successor index), as published
by the Bureau of Labor
Statistics, for the calendar
year preceding the calendar
year in which the adjustment is
being made by the annual value
of such index (or successor)
for the calendar year ending
December 31, 2012; and
(II) multiplying such dollar
amount by the quotient obtained
under subclause (I).
(ii) Rounding.--Each dollar amount
determined under clause (i) shall be
rounded to the nearest multiple of
$100,000.
(c)(1)(A) No broker or dealer shall make use of the mails or
any means or instrumentality of interstate commerce to effect
any transaction in, or to induce or attempt to induce the
purchase or sale of, any security (other than commercial paper,
bankers' acceptances, or commercial bills), or any security-
based swap agreement by means of any manipulative, deceptive,
or other fraudulent device or contrivance.
(B) No broker, dealer, or municipal securities dealer shall
make use of the mails or any means or instrumentality of
interstate commerce to effect any transaction in, or to induce
or attempt to induce the purchase or sale of, any municipal
security or any security-based swap agreement involving a
municipal security by means of any manipulative, deceptive, or
other fraudulent device or contrivance.
(C) No government securities broker or government securities
dealer shall make use of the mails or any means or
instrumentality of interstate commerce to effect any
transaction in, or to induce or to attempt to induce the
purchase or sale of, any government security or any security-
based swap agreement involving a government security by means
of any manipulative, deceptive, or other fraudulent device or
contrivance.
(2)(A) No broker or dealer shall make use of the mails or any
means or instrumentality of interstate commerce to effect any
transaction in, or to induce or attempt to induce the purchase
or sale of, any security (other than an exempted security or
commercial paper, bankers' acceptances, or commercial bills)
otherwise than on a national securities exchange of which it is
a member, in connection with which such broker or dealer
engages in any fraudulent, deceptive, or manipulative act or
practice, or makes any fictitious quotation.
(B) No broker, dealer, or municipal securities dealer shall
make use of the mails or any means or instrumentality of
interstate commerce to effect any transaction in, or to induce
or attempt to induce the purchase or sale of, any municipal
security in connection with which such broker, dealer, or
municipal securities dealer engages in any fraudulent,
deceptive, or manipulative act or practice, or makes any
fictitious quotation.
(C) No government securities broker or government securities
dealer shall make use of the mails or any means or
instrumentality of interstate commerce to effect any
transaction in, or induce or attempt to induce the purchase or
sale of, any government security in connection with which such
government securities broker or government securities dealer
engages in any fraudulent, deceptive, or manipulative act or
practice, or makes any fictitious quotation.
(D) The Commission shall, for the purposes of this paragraph,
by rules and regulations define, and prescribe means reasonably
designed to prevent, such acts and practices as are fraudulent,
deceptive, or manipulative and such quotations as are
fictitious.
(E) The Commission shall, prior to adopting any rule or
regulation under subparagraph (C), consult with and consider
the views of the Secretary of the Treasury and each appropriate
regulatory agency. If the Secretary of the Treasury or any
appropriate regulatory agency comments in writing on a proposed
rule or regulation of the Commission under such subparagraph
(C) that has been published for comment, the Commission shall
respond in writing to such written comment before adopting the
proposed rule. If the Secretary of the Treasury determines, and
notifies the Commission, that such rule or regulation, if
implemented, would, or as applied does (i) adversely affect the
liquidity or efficiency of the market for government
securities; or (ii) impose any burden on competition not
necessary or appropriate in furtherance of the purposes of this
section, the Commission shall, prior to adopting the proposed
rule or regulation, find that such rule or regulation is
necessary and appropriate in furtherance of the purposes of
this section notwithstanding the Secretary's determination.
(3)(A) No broker or dealer (other than a government
securities broker or government securities dealer, except a
registered broker or dealer) shall make use of the mails or any
means or instrumentality of interstate commerce to effect any
transaction in, or to induce or attempt to induce the purchase
or sale of, any security (other than an exempted security
(except a government security) or commercial paper, bankers'
acceptances, or commercial bills) in contravention of such
rules and regulations as the Commission shall prescribe as
necessary or appropriate in the public interest or for the
protection of investors to provide safeguards with respect to
the financial responsibility and related practices of brokers
and dealers including, but not limited to, the acceptance of
custody and use of customers' securities and the carrying and
use of customers' deposits or credit balances. Such rules and
regulations shall (A) require the maintenance of reserves with
respect to customers' deposits or credit balances, and (B) no
later than September 1, 1975, establish minimum financial
responsibility requirements for all brokers and dealers.
(B) Consistent with this title, the Commission, in
consultation with the Commodity Futures Trading Commission,
shall issue such rules, regulations, or orders as are necessary
to avoid duplicative or conflicting regulations applicable to
any broker or dealer registered with the Commission pursuant to
section 15(b) (except paragraph (11) thereof), that is also
registered with the Commodity Futures Trading Commission
pursuant to section 4f(a) of the Commodity Exchange Act (except
paragraph (2) thereof), with respect to the application of: (i)
the provisions of section 8, section 15(c)(3), and section 17
of this title and the rules and regulations thereunder related
to the treatment of customer funds, securities, or property,
maintenance of books and records, financial reporting, or other
financial responsibility rules, involving security futures
products; and (ii) similar provisions of the Commodity Exchange
Act and rules and regulations thereunder involving security
futures products.
(C) Notwithstanding any provision of sections
2(a)(1)(C)(i) or 4d(a)(2) of the Commodity Exchange Act
and the rules and regulations thereunder, and pursuant
to an exemption granted by the Commission under section
36 of this title or pursuant to a rule or regulation,
cash and securities may be held by a broker or dealer
registered pursuant to subsection (b)(1) and also
registered as a futures commission merchant pursuant to
section 4f(a)(1) of the Commodity Exchange Act, in a
portfolio margining account carried as a futures
account subject to section 4d of the Commodity Exchange
Act and the rules and regulations thereunder, pursuant
to a portfolio margining program approved by the
Commodity Futures Trading Commission, and subject to
subchapter IV of chapter 7 of title 11 of the United
States Code and the rules and regulations thereunder.
The Commission shall consult with the Commodity Futures
Trading Commission to adopt rules to ensure that such
transactions and accounts are subject to comparable
requirements to the extent practicable for similar
products.
(4) If the Commission finds, after notice and opportunity for
a hearing, that any person subject to the provisions of section
12, 13, 14, or subsection (d) of section 15 of this title or
any rule or regulation thereunder has failed to comply with any
such provision, rule, or regulation in any material respect,
the Commission may publish its findings and issue an order
requiring such person, and any person who was a cause of the
failure to comply due to an act or omission the person knew or
should have known would contribute to the failure to comply, to
comply, or to take steps to effect compliance, with such
provision or such rule or regulation thereunder upon such terms
and conditions and within such time as the Commission may
specify in such order.
(5) No dealer (other than a specialist registered on a
national securities exchange) acting in the capacity of market
maker or otherwise shall make use of the mails or any means or
instrumentality of interstate commerce to effect any
transaction in, or to induce or attempt to induce the purchase
or sale of, any security (other than an exempted security or a
municipal security) in contravention of such specified and
appropriate standards with respect to dealing as the
Commission, by rule, shall prescribe as necessary or
appropriate in the public interest and for the protection of
investors, to maintain fair and orderly markets, or to remove
impediments to and perfect the mechanism of a national market
system. Under the rules of the Commission a dealer in a
security may be prohibited from acting as broker in that
security.
(6) No broker or dealer shall make use of the mails or any
means or instrumentality of interstate commerce to effect any
transaction in, or to induce or attempt to induce the purchase
or sale of, any security (other than an exempted security,
municipal security, commercial paper, bankers' acceptances, or
commercial bills) in contravention of such rules and
regulations as the Commission shall prescribe as necessary or
appropriate in the public interest and for the protection of
investors or to perfect or remove impediments to a national
system for the prompt and accurate clearance and settlement of
securities transactions, with respect to the time and method
of, and the form and format of documents used in connection
with, making settlements of and payments for transactions in
securities, making transfers and deliveries of securities, and
closing accounts. Nothing in this paragraph shall be construed
(A) to affect the authority of the Board of Governors of the
Federal Reserve System, pursuant to section 7 of this title, to
prescribe rules and regulations for the purpose of preventing
the excessive use of credit for the purchase or carrying of
securities, or (B) to authorize the Commission to prescribe
rules or regulations for such purpose.
(7) In connection with any bid for or purchase of a
government security related to an offering of government
securities by or on behalf of an issuer, no government
securities broker, government securities dealer, or bidder for
or purchaser of securities in such offering shall knowingly or
willfully make any false or misleading written statement or
omit any fact necessary to make any written statement made not
misleading.
(8) Prohibition of referral fees.--No broker or dealer, or
person associated with a broker or dealer, may solicit or
accept, directly or indirectly, remuneration for assisting an
attorney in obtaining the representation of any person in any
private action arising under this title or under the Securities
Act of 1933.
(d) Supplementary and Periodic Information.--
(1) In general.--Each issuer which has filed a
registration statement containing an undertaking which
is or becomes operative under this subsection as in
effect prior to the date of enactment of the Securities
Acts Amendments of 1964, and each issuer which shall
after such date file a registration statement which has
become effective pursuant to the Securities Act of
1933, as amended, shall file with the Commission, in
accordance with such rules and regulations as the
Commission may prescribe as necessary or appropriate in
the public interest or for the protection of investors,
such supplementary and periodic information, documents,
and reports as may be required pursuant to section 13
of this title in respect of a security registered
pursuant to section 12 of this title. The duty to file
under this subsection shall be automatically suspended
if and so long as any issue of securities of such
issuer is registered pursuant to section 12 of this
title. The duty to file under this subsection shall
also be automatically suspended as to any fiscal year,
other than the fiscal year within which such
registration statement became effective, if, at the
beginning of such fiscal year, the securities of each
class, other than any class of asset-backed securities,
to which the registration statement relates are held of
record by less than 300 persons, or, in the case of a
bank, a savings and loan holding company (as defined in
section 10 of the Home Owners' Loan Act), or a bank
holding company, as such term is defined in section 2
of the Bank Holding Company Act of 1956 (12 U.S.C.
1841), 1,200 persons persons. For the purposes of this
subsection, the term ``class'' shall be construed to
include all securities of an issuer which are of
substantially similar character and the holders of
which enjoy substantially similar rights and
privileges. The Commission may, for the purpose of this
subsection, define by rules and regulations the term
``held of record'' as it deems necessary or appropriate
in the public interest or for the protection of
investors in order to prevent circumvention of the
provisions of this subsection. Nothing in this
subsection shall apply to securities issued by a
foreign government or political subdivision thereof.
(2) Asset-backed securities.--
(A) Suspension of duty to file.--The
Commission may, by rule or regulation, provide
for the suspension or termination of the duty
to file under this subsection for any class of
asset-backed security, on such terms and
conditions and for such period or periods as
the Commission deems necessary or appropriate
in the public interest or for the protection of
investors.
(B) Classification of issuers.--The
Commission may, for purposes of this
subsection, classify issuers and prescribe
requirements appropriate for each class of
issuers of asset-backed securities.
(e) Notices to Customers Regarding Securities Lending.--Every
registered broker or dealer shall provide notice to its
customers that they may elect not to allow their fully paid
securities to be used in connection with short sales. If a
broker or dealer uses a customer's securities in connection
with short sales, the broker or dealer shall provide notice to
its customer that the broker or dealer may receive compensation
in connection with lending the customer's securities. The
Commission, by rule, as it deems necessary or appropriate in
the public interest and for the protection of investors, may
prescribe the form, content, time, and manner of delivery of
any notice required under this paragraph.
(f) The Commission, by rule, as it deems necessary or
appropriate in the public interest and for the protection of
investors or to assure equal regulation, may require any member
of a national securities exchange not required to register
under section 15 of this title and any person associated with
any such member to comply with any provision of this title
(other than section 15(a)) or the rules or regulations
thereunder which by its terms regulates or prohibits any act,
practice, or course of business by a ``broker or dealer'' or
``registered broker or dealer'' or a ``person associated with a
broker or dealer,'' respectively.
(g) Every registered broker or dealer shall establish,
maintain, and enforce written policies and procedures
reasonably designed, taking into consideration the nature of
such broker's or dealer's business, to prevent the misuse in
violation of this title, or the rules or regulations
thereunder, of material, nonpublic information by such broker
or dealer or any person associated with such broker or dealer.
The Commission, as it deems necessary or appropriate in the
public interest or for the protection of investors, shall adopt
rules or regulations to require specific policies or procedures
reasonably designed to prevent misuse in violation of this
title (or the rules or regulations thereunder) of material,
nonpublic information.
(h) Requirements for Transactions in Penny Stocks.--
(1) In general.--No broker or dealer shall make use
of the mails or any means or instrumentality of
interstate commerce to effect any transaction in, or to
induce or attempt to induce the purchase or sale of,
any penny stock by any customer except in accordance
with the requirements of this subsection and the rules
and regulations prescribed under this subsection.
(2) Risk disclosure with respect to penny stocks.--
Prior to effecting any transaction in any penny stock,
a broker or dealer shall give the customer a risk
disclosure document that--
(A) contains a description of the nature and
level of risk in the market for penny stocks in
both public offerings and secondary trading;
(B) contains a description of the broker's or
dealer's duties to the customer and of the
rights and remedies available to the customer
with respect to violations of such duties or
other requirements of Federal securities laws;
(C) contains a brief, clear, narrative
description of a dealer market, including
``bid'' and ``ask'' prices for penny stocks and
the significance of the spread between the bid
and ask prices;
(D) contains the toll free telephone number
for inquiries on disciplinary actions
established pursuant to section 15A(i) of this
title;
(E) defines significant terms used in the
disclosure document or in the conduct of
trading in penny stocks; and
(F) contains such other information, and is
in such form (including language, type size,
and format), as the Commission shall require by
rule or regulation.
(3) Commission rules relating to disclosure.--The
Commission shall adopt rules setting forth additional
standards for the disclosure by brokers and dealers to
customers of information concerning transactions in
penny stocks. Such rules--
(A) shall require brokers and dealers to
disclose to each customer, prior to effecting
any transaction in, and at the time of
confirming any transaction with respect to any
penny stock, in accordance with such procedures
and methods as the Commission may require
consistent with the public interest and the
protection of investors--
(i) the bid and ask prices for penny
stock, or such other information as the
Commission may, by rule, require to
provide customers with more useful and
reliable information relating to the
price of such stock;
(ii) the number of shares to which
such bid and ask prices apply, or other
comparable information relating to the
depth and liquidity of the market for
such stock; and
(iii) the amount and a description of
any compensation that the broker or
dealer and the associated person
thereof will receive or has received in
connection with such transaction;
(B) shall require brokers and dealers to
provide, to each customer whose account with
the broker or dealer contains penny stocks, a
monthly statement indicating the market value
of the penny stocks in that account or
indicating that the market value of such stock
cannot be determined because of the
unavailability of firm quotes; and
(C) may, as the Commission finds necessary or
appropriate in the public interest or for the
protection of investors, require brokers and
dealers to disclose to customers additional
information concerning transactions in penny
stocks.
(4) Exemptions.--The Commission, as it determines
consistent with the public interest and the protection
of investors, may by rule, regulation, or order exempt
in whole or in part, conditionally or unconditionally,
any person or class of persons, or any transaction or
class of transactions, from the requirements of this
subsection. Such exemptions shall include an exemption
for brokers and dealers based on the minimal percentage
of the broker's or dealer's commissions, commission-
equivalents, and markups received from transactions in
penny stocks.
(5) Regulations.--It shall be unlawful for any person
to violate such rules and regulations as the Commission
shall prescribe in the public interest or for the
protection of investors or to maintain fair and orderly
markets--
(A) as necessary or appropriate to carry out
this subsection; or
(B) as reasonably designed to prevent
fraudulent, deceptive, or manipulative acts and
practices with respect to penny stocks.
(i) Limitations on State Law.--
(1) Capital, margin, books and records, bonding, and
reports.--No law, rule, regulation, or order, or other
administrative action of any State or political
subdivision thereof shall establish capital, custody,
margin, financial responsibility, making and keeping
records, bonding, or financial or operational reporting
requirements for brokers, dealers, municipal securities
dealers, government securities brokers, or government
securities dealers that differ from, or are in addition
to, the requirements in those areas established under
this title. The Commission shall consult periodically
the securities commissions (or any agency or office
performing like functions) of the States concerning the
adequacy of such requirements as established under this
title.
(2) Funding portals.--
(A) Limitation on state laws.--Except as
provided in subparagraph (B), no State or
political subdivision thereof may enforce any
law, rule, regulation, or other administrative
action against a registered funding portal with
respect to its business as such.
(B) Examination and enforcement authority.--
Subparagraph (A) does not apply with respect to
the examination and enforcement of any law,
rule, regulation, or administrative action of a
State or political subdivision thereof in which
the principal place of business of a registered
funding portal is located, provided that such
law, rule, regulation, or administrative action
is not in addition to or different from the
requirements for registered funding portals
established by the Commission.
(C) Definition.--For purposes of this
paragraph, the term ``State'' includes the
District of Columbia and the territories of the
United States.
(3) De minimis transactions by associated persons.--
No law, rule, regulation, or order, or other
administrative action of any State or political
subdivision thereof may prohibit an associated person
of a broker or dealer from effecting a transaction
described in paragraph (3) for a customer in such State
if--
(A) such associated person is not ineligible
to register with such State for any reason
other than such a transaction;
(B) such associated person is registered with
a registered securities association and at
least one State; and
(C) the broker or dealer with which such
person is associated is registered with such
State.
(4) Described transactions.--
(A) In general.--A transaction is described
in this paragraph if--
(i) such transaction is effected--
(I) on behalf of a customer
that, for 30 days prior to the
day of the transaction,
maintained an account with the
broker or dealer; and
(II) by an associated person
of the broker or dealer--
(aa) to which the
customer was assigned
for 14 days prior to
the day of the
transaction; and
(bb) who is
registered with a State
in which the customer
was a resident or was
present for at least 30
consecutive days during
the 1-year period prior
to the day of the
transaction; or
(ii) the transaction is effected--
(I) on behalf of a customer
that, for 30 days prior to the
day of the transaction,
maintained an account with the
broker or dealer; and
(II) during the period
beginning on the date on which
such associated person files an
application for registration
with the State in which the
transaction is effected and
ending on the earlier of--
(aa) 60 days after
the date on which the
application is filed;
or
(bb) the date on
which such State
notifies the associated
person that it has
denied the application
for registration or has
stayed the pendency of
the application for
cause.
(B) Rules of construction.--For purposes of
subparagraph (A)(i)(II)--
(i) each of up to 3 associated
persons of a broker or dealer who are
designated to effect transactions
during the absence or unavailability of
the principal associated person for a
customer may be treated as an
associated person to which such
customer is assigned; and
(ii) if the customer is present in
another State for 30 or more
consecutive days or has permanently
changed his or her residence to another
State, a transaction is not described
in this paragraph, unless the
associated person of the broker or
dealer files an application for
registration with such State not later
than 10 business days after the later
of the date of the transaction, or the
date of the discovery of the presence
of the customer in the other State for
30 or more consecutive days or the
change in the customer's residence.
(j) Rulemaking To Extend Requirements to New Hybrid
Products.--
(1) Consultation.--Prior to commencing a rulemaking
under this subsection, the Commission shall consult
with and seek the concurrence of the Board concerning
the imposition of broker or dealer registration
requirements with respect to any new hybrid product. In
developing and promulgating rules under this
subsection, the Commission shall consider the views of
the Board, including views with respect to the nature
of the new hybrid product; the history, purpose,
extent, and appropriateness of the regulation of the
new product under the Federal banking laws; and the
impact of the proposed rule on the banking industry.
(2) Limitation.--The Commission shall not--
(A) require a bank to register as a broker or
dealer under this section because the bank
engages in any transaction in, or buys or
sells, a new hybrid product; or
(B) bring an action against a bank for a
failure to comply with a requirement described
in subparagraph (A),
unless the Commission has imposed such requirement by
rule or regulation issued in accordance with this
section.
(3) Criteria for rulemaking.--The Commission shall
not impose a requirement under paragraph (2) of this
subsection with respect to any new hybrid product
unless the Commission determines that--
(A) the new hybrid product is a security; and
(B) imposing such requirement is necessary
and appropriate in the public interest and for
the protection of investors.
(4) Considerations.--In making a determination under
paragraph (3), the Commission shall consider--
(A) the nature of the new hybrid product; and
(B) the history, purpose, extent, and
appropriateness of the regulation of the new
hybrid product under the Federal securities
laws and under the Federal banking laws.
(5) Objection to commission regulation.--
(A) Filing of petition for review.--The Board
may obtain review of any final regulation
described in paragraph (2) in the United States
Court of Appeals for the District of Columbia
Circuit by filing in such court, not later than
60 days after the date of publication of the
final regulation, a written petition requesting
that the regulation be set aside. Any
proceeding to challenge any such rule shall be
expedited by the Court of Appeals.
(B) Transmittal of petition and record.--A
copy of a petition described in subparagraph
(A) shall be transmitted as soon as possible by
the Clerk of the Court to an officer or
employee of the Commission designated for that
purpose. Upon receipt of the petition, the
Commission shall file with the court the
regulation under review and any documents
referred to therein, and any other relevant
materials prescribed by the court.
(C) Exclusive jurisdiction.--On the date of
the filing of the petition under subparagraph
(A), the court has jurisdiction, which becomes
exclusive on the filing of the materials set
forth in subparagraph (B), to affirm and
enforce or to set aside the regulation at
issue.
(D) Standard of review.--The court shall
determine to affirm and enforce or set aside a
regulation of the Commission under this
subsection, based on the determination of the
court as to whether--
(i) the subject product is a new
hybrid product, as defined in this
subsection;
(ii) the subject product is a
security; and
(iii) imposing a requirement to
register as a broker or dealer for
banks engaging in transactions in such
product is appropriate in light of the
history, purpose, and extent of
regulation under the Federal securities
laws and under the Federal banking
laws, giving deference neither to the
views of the Commission nor the Board.
(E) Judicial stay.--The filing of a petition
by the Board pursuant to subparagraph (A) shall
operate as a judicial stay, until the date on
which the determination of the court is final
(including any appeal of such determination).
(F) Other authority to challenge.--Any
aggrieved party may seek judicial review of the
Commission's rulemaking under this subsection
pursuant to section 25 of this title.
(6) Definitions.--For purposes of this subsection:
(A) New hybrid product.--The term ``new
hybrid product'' means a product that--
(i) was not subjected to regulation
by the Commission as a security prior
to the date of the enactment of the
Gramm-Leach-Bliley Act;
(ii) is not an identified banking
product as such term is defined in
section 206 of such Act; and
(iii) is not an equity swap within
the meaning of section 206(a)(6) of
such Act.
(B) Board.--The term ``Board'' means the
Board of Governors of the Federal Reserve
System.
(j) The authority of the Commission under this section with
respect to security-based swap agreements shall be subject to
the restrictions and limitations of section 3A(b) of this
title.
(k) Registration or Succession to a United States Broker or
Dealer.--In determining whether to permit a foreign person or
an affiliate of a foreign person to register as a United States
broker or dealer, or succeed to the registration of a United
States broker or dealer, the Commission may consider whether,
for a foreign person, or an affiliate of a foreign person that
presents a risk to the stability of the United States financial
system, the home country of the foreign person has adopted, or
made demonstrable progress toward adopting, an appropriate
system of financial regulation to mitigate such risk.
(l) Termination of a United States Broker or Dealer.--For a
foreign person or an affiliate of a foreign person that
presents such a risk to the stability of the United States
financial system, the Commission may determine to terminate the
registration of such foreign person or an affiliate of such
foreign person as a broker or dealer in the United States, if
the Commission determines that the home country of the foreign
person has not adopted, or made demonstrable progress toward
adopting, an appropriate system of financial regulation to
mitigate such risk.
(k) Standard of Conduct.--
(1) In general.--Notwithstanding any other provision
of this Act or the Investment Advisers Act of 1940, the
Commission may promulgate rules to provide that, with
respect to a broker or dealer, when providing
personalized investment advice about securities to a
retail customer (and such other customers as the
Commission may by rule provide), the standard of
conduct for such broker or dealer with respect to such
customer shall be the same as the standard of conduct
applicable to an investment adviser under section 211
of the Investment Advisers Act of 1940. The receipt of
compensation based on commission or other standard
compensation for the sale of securities shall not, in
and of itself, be considered a violation of such
standard applied to a broker or dealer. Nothing in this
section shall require a broker or dealer or registered
representative to have a continuing duty of care or
loyalty to the customer after providing personalized
investment advice about securities.
(2) Disclosure of range of products offered.--Where a
broker or dealer sells only proprietary or other
limited range of products, as determined by the
Commission, the Commission may by rule require that
such broker or dealer provide notice to each retail
customer and obtain the consent or acknowledgment of
the customer. The sale of only proprietary or other
limited range of products by a broker or dealer shall
not, in and of itself, be considered a violation of the
standard set forth in paragraph (1).
(l) Other Matters.--The Commission shall--
(1) facilitate the provision of simple and clear
disclosures to investors regarding the terms of their
relationships with brokers, dealers, and investment
advisers, including any material conflicts of interest;
and
(2) examine and, where appropriate, promulgate rules
prohibiting or restricting certain sales practices,
conflicts of interest, and compensation schemes for
brokers, dealers, and investment advisers that the
Commission deems contrary to the public interest and
the protection of investors.
(m) Harmonization of Enforcement.--The enforcement authority
of the Commission with respect to violations of the standard of
conduct applicable to a broker or dealer providing personalized
investment advice about securities to a retail customer shall
include--
(1) the enforcement authority of the Commission with
respect to such violations provided under this Act; and
(2) the enforcement authority of the Commission with
respect to violations of the standard of conduct
applicable to an investment adviser under the
Investment Advisers Act of 1940, including the
authority to impose sanctions for such violations, and
the Commission shall seek to prosecute and sanction violators
of the standard of conduct applicable to a broker or dealer
providing personalized investment advice about securities to a
retail customer under this Act to same extent as the Commission
prosecutes and sanctions violators of the standard of conduct
applicable to an investment advisor under the Investment
Advisers Act of 1940.
(n) Disclosures to Retail Investors.--
(1) In general.--Notwithstanding any other provision
of the securities laws, the Commission may issue rules
designating documents or information that shall be
provided by a broker or dealer to a retail investor
before the purchase of an investment product or service
by the retail investor.
(2) Considerations.--In developing any rules under
paragraph (1), the Commission shall consider whether
the rules will promote investor protection, efficiency,
competition, and capital formation.
(3) Form and contents of documents and information.--
Any documents or information designated under a rule
promulgated under paragraph (1) shall--
(A) be in a summary format; and
(B) contain clear and concise information
about--
(i) investment objectives,
strategies, costs, and risks; and
(ii) any compensation or other
financial incentive received by a
broker, dealer, or other intermediary
in connection with the purchase of
retail investment products.
(o) Authority to Restrict Mandatory Pre-dispute
Arbitration.--The Commission, by rule, may prohibit, or impose
conditions or limitations on the use of, agreements that
require customers or clients of any broker, dealer, or
municipal securities dealer to arbitrate any future dispute
between them arising under the Federal securities laws, the
rules and regulations thereunder, or the rules of a self-
regulatory organization if it finds that such prohibition,
imposition of conditions, or limitations are in the public
interest and for the protection of investors.
* * * * * * *
SEC. 15E. REGISTRATION OF NATIONALLY RECOGNIZED STATISTICAL RATING
ORGANIZATIONS.
(a) Registration Procedures.--
(1) Application for registration.--
(A) In general.--A credit rating agency that
elects to be treated as a nationally recognized
statistical rating organization for purposes of
this title (in this section referred to as the
``applicant''), shall furnish to the Commission
an application for registration, in such form
as the Commission shall require, by rule or
regulation issued in accordance with subsection
(n), and containing the information described
in subparagraph (B).
(B) Required information.--An application for
registration under this section shall contain
information regarding--
(i) credit ratings performance
measurement statistics over short-term,
mid-term, and long-term periods (as
applicable) of the applicant;
(ii) the procedures and methodologies
that the applicant uses in determining
credit ratings;
(iii) policies or procedures adopted
and implemented by the applicant to
prevent the misuse, in violation of
this title (or the rules and
regulations hereunder), of material,
nonpublic information;
(iv) the organizational structure of
the applicant;
(v) whether or not the applicant has
in effect a code of ethics, and if not,
the reasons therefor;
(vi) any conflict of interest
relating to the issuance of credit
ratings by the applicant;
(vii) the categories described in any
of clauses (i) through (v) of section
3(a)(62)(B) with respect to which the
applicant intends to apply for
registration under this section;
(viii) on a confidential basis, a
list of the 20 largest issuers and
subscribers that use the credit rating
services of the applicant, by amount of
net revenues received therefrom in the
fiscal year immediately preceding the
date of submission of the application;
(ix) on a confidential basis, as to
each applicable category of obligor
described in any of clauses (i) through
(v) of section 3(a)(62)(B), written
certifications described in
subparagraph (C), except as provided in
subparagraph (D); and
(x) any other information and
documents concerning the applicant and
any person associated with such
applicant as the Commission, by rule,
may prescribe as necessary or
appropriate in the public interest or
for the protection of investors.
(C) Written certifications.--Written
certifications required by subparagraph
(B)(ix)--
(i) shall be provided from not fewer
than 10 qualified institutional buyers,
none of which is affiliated with the
applicant;
(ii) may address more than one
category of obligors described in any
of clauses (i) through (v) of section
3(a)(62)(B);
(iii) shall include not fewer than 2
certifications for each such category
of obligor; and
(iv) shall state that the qualified
institutional buyer--
(I) meets the definition of a
qualified institutional buyer
under section 3(a)(64); and
(II) has used the credit
ratings of the applicant for at
least the 3 years immediately
preceding the date of the
certification in the subject
category or categories of
obligors.
(D) Exemption from certification
requirement.--A written certification under
subparagraph (B)(ix) is not required with
respect to any credit rating agency which has
received, or been the subject of, a no-action
letter from the staff of the Commission prior
to August 2, 2006, stating that such staff
would not recommend enforcement action against
any broker or dealer that considers credit
ratings issued by such credit rating agency to
be ratings from a nationally recognized
statistical rating organization.
(E) Limitation on liability of qualified
institutional buyers.--No qualified
institutional buyer shall be liable in any
private right of action for any opinion or
statement expressed in a certification made
pursuant to subparagraph (B)(ix).
(2) Review of application.--
(A) Initial determination.--Not later than 90
days after the date on which the application
for registration is furnished to the Commission
under paragraph (1) (or within such longer
period as to which the applicant consents) the
Commission shall--
(i) by order, grant such registration
for ratings in the subject category or
categories of obligors, as described in
clauses (i) through (v) of section
3(a)(62)(B); or
(ii) institute proceedings to
determine whether registration should
be denied.
(B) Conduct of proceedings.--
(i) Content.--Proceedings referred to
in subparagraph (A)(ii) shall--
(I) include notice of the
grounds for denial under
consideration and an
opportunity for hearing; and
(II) be concluded not later
than 120 days after the date on
which the application for
registration is furnished to
the Commission under paragraph
(1).
(ii) Determination.--At the
conclusion of such proceedings, the
Commission, by order, shall grant or
deny such application for registration.
(iii) Extension authorized.--The
Commission may extend the time for
conclusion of such proceedings for not
longer than 90 days, if it finds good
cause for such extension and publishes
its reasons for so finding, or for such
longer period as to which the applicant
consents.
(C) Grounds for decision.--The Commission
shall grant registration under this
subsection--
(i) if the Commission finds that the
requirements of this section are
satisfied; and
(ii) unless the Commission finds (in
which case the Commission shall deny
such registration) that--
(I) the applicant does not
have adequate financial and
managerial resources to
consistently produce credit
ratings with integrity and to
materially comply with the
procedures and methodologies
disclosed under paragraph
(1)(B) and with subsections
(g), (h), (i), and (j); or
(II) if the applicant were so
registered, its registration
would be subject to suspension
or revocation under subsection
(d).
(3) Public availability of information.--Subject to
section 24, the Commission shall, by rule, require a
nationally recognized statistical rating organization,
upon the granting of registration under this section,
to make the information and documents submitted to the
Commission in its completed application for
registration, or in any amendment submitted under
paragraph (1) or (2) of subsection (b), publicly
available on its website, or through another
comparable, readily accessible means, except as
provided in clauses (viii) and (ix) of paragraph
(1)(B).
(b) Update of Registration.--
(1) Update.--Each nationally recognized statistical
rating organization shall promptly amend its
application for registration under this section if any
information or document provided therein becomes
materially inaccurate, except that a nationally
recognized statistical rating organization is not
required to amend--
(A) the information required to be filed
under subsection (a)(1)(B)(i) by filing
information under this paragraph, but shall
amend such information in the annual submission
of the organization under paragraph (2) of this
subsection; or
(B) the certifications required to be
provided under subsection (a)(1)(B)(ix) by
filing information under this paragraph.
(2) Certification.--Not later than 90 days after the
end of each calendar year, each nationally recognized
statistical rating organization shall file with the
Commission an amendment to its registration, in such
form as the Commission, by rule, may prescribe as
necessary or appropriate in the public interest or for
the protection of investors--
(A) certifying that the information and
documents in the application for registration
of such nationally recognized statistical
rating organization (other than the
certifications required under subsection
(a)(1)(B)(ix)) continue to be accurate; and
(B) listing any material change that occurred
to such information or documents during the
previous calendar year.
(c) Accountability for Ratings Procedures.--
(1) Authority.--The Commission shall have exclusive
authority to enforce the provisions of this section in
accordance with this title with respect to any
nationally recognized statistical rating organization,
if such nationally recognized statistical rating
organization issues credit ratings in material
contravention of those procedures relating to such
nationally recognized statistical rating organization,
including procedures relating to the prevention of
misuse of nonpublic information and conflicts of
interest, that such nationally recognized statistical
rating organization--
(A) includes in its application for
registration under subsection (a)(1)(B)(ii); or
(B) makes and disseminates in reports
pursuant to section 17(a) or the rules and
regulations thereunder.
(2) Limitation.--The rules and regulations that the
Commission may prescribe pursuant to this title, as
they apply to nationally recognized statistical rating
organizations, shall be narrowly tailored to meet the
requirements of this title applicable to nationally
recognized statistical rating organizations.
Notwithstanding any other provision of this section, or
any other provision of law, neither the Commission nor
any State (or political subdivision thereof) may
regulate the substance of credit ratings or the
procedures and methodologies by which any nationally
recognized statistical rating organization determines
credit ratings. Nothing in this paragraph may be
construed to afford a defense against any action or
proceeding brought by the Commission to enforce the
antifraud provisions of the securities laws.
(3) Internal controls over processes for determining
credit ratings.--
(A) In general.--Each nationally recognized
statistical rating organization shall
establish, maintain, enforce, and document an
effective internal control structure governing
the implementation of and adherence to
policies, procedures, and methodologies for
determining credit ratings, taking into
consideration such factors as the Commission
may prescribe, by rule.
(B) Attestation requirement.--The Commission
shall prescribe rules requiring each nationally
recognized statistical rating organization to
submit to the Commission an annual internal
controls report, which shall contain--
(i) a description of the
responsibility of the management of the
nationally recognized statistical
rating organization in establishing and
maintaining an effective internal
control structure under subparagraph
(A);
(ii) an assessment of the
effectiveness of the internal control
structure of the nationally recognized
statistical rating organization; and
(iii) the attestation of the chief
executive officer, or equivalent
individual, of the nationally
recognized statistical rating
organization.
(d) Censure, Denial, or Suspension of Registration; Notice
and Hearing.--
(1) In general.--The Commission, by order, shall
censure, place limitations on the activities,
functions, or operations of, suspend for a period not
exceeding 12 months, or revoke the registration of any
nationally recognized statistical rating organization,
or with respect to any person who is associated with,
who is seeking to become associated with, or, at the
time of the alleged misconduct, who was associated or
was seeking to become associated with a nationally
recognized statistical rating organization, the
Commission, by order, shall censure, place limitations
on the activities or functions of such person, suspend
for a period not exceeding 1 year, or bar such person
from being associated with a nationally recognized
statistical rating organization, if the Commission
finds, on the record after notice and opportunity for
hearing, that such censure, placing of limitations,
suspension, bar or revocation is necessary for the
protection of investors and in the public interest and
that such nationally recognized statistical rating
organization, or any person associated with such an
organization, whether prior to or subsequent to
becoming so associated--
(A) has committed or omitted any act, or is
subject to an order or finding, enumerated in
subparagraph (A), (D), (E), (H), or (G) of
section 15(b)(4), has been convicted of any
offense specified in section 15(b)(4)(B), or is
enjoined from any action, conduct, or practice
specified in subparagraph (C) of section
15(b)(4), during the 10-year period preceding
the date of commencement of the proceedings
under this subsection, or at any time
thereafter;
(B) has been convicted during the 10-year
period preceding the date on which an
application for registration is filed with the
Commission under this section, or at any time
thereafter, of--
(i) any crime that is punishable by
imprisonment for 1 or more years, and
that is not described in section
15(b)(4)(B); or
(ii) a substantially equivalent crime
by a foreign court of competent
jurisdiction;
(C) is subject to any order of the Commission
barring or suspending the right of the person
to be associated with a nationally recognized
statistical rating organization;
(D) fails to file the certifications required
under subsection (b)(2);
(E) fails to maintain adequate financial and
managerial resources to consistently produce
credit ratings with integrity;
(F) has failed reasonably to supervise, with
a view to preventing a violation of the
securities laws, an individual who commits such
a violation, if the individual is subject to
the supervision of that person.
(2) Suspension or revocation for particular class of
securities.--
(A) In general.--The Commission may
temporarily suspend or permanently revoke the
registration of a nationally recognized
statistical rating organization with respect to
a particular class or subclass of securities,
if the Commission finds, on the record after
notice and opportunity for hearing, that the
nationally recognized statistical rating
organization does not have adequate financial
and managerial resources to consistently
produce credit ratings with integrity.
(B) Considerations.--In making any
determination under subparagraph (A), the
Commission shall consider--
(i) whether the nationally recognized
statistical rating organization has
failed over a sustained period of time,
as determined by the Commission, to
produce ratings that are accurate for
that class or subclass of securities;
and
(ii) such other factors as the
Commission may determine.
(e) Termination of Registration.--
(1) Voluntary withdrawal.--A nationally recognized
statistical rating organization may, upon such terms
and conditions as the Commission may establish as
necessary in the public interest or for the protection
of investors, withdraw from registration by furnishing
a written notice of withdrawal to the Commission.
(2) Commission authority.--In addition to any other
authority of the Commission under this title, if the
Commission finds that a nationally recognized
statistical rating organization is no longer in
existence or has ceased to do business as a credit
rating agency, the Commission, by order, shall cancel
the registration under this section of such nationally
recognized statistical rating organization.
(f) Representations.--
(1) Ban on representations of sponsorship by united
states or agency thereof.--It shall be unlawful for any
nationally recognized statistical rating organization
to represent or imply in any manner whatsoever that
such nationally recognized statistical rating
organization has been designated, sponsored,
recommended, or approved, or that the abilities or
qualifications thereof have in any respect been passed
upon, by the United States or any agency, officer, or
employee thereof.
(2) Ban on representation as nrsro of unregistered
credit rating agencies.--It shall be unlawful for any
credit rating agency that is not registered under this
section as a nationally recognized statistical rating
organization to state that such credit rating agency is
a nationally recognized statistical rating organization
registered under this title.
(3) Statement of registration under securities
exchange act of 1934 provisions.--No provision of
paragraph (1) shall be construed to prohibit a
statement that a nationally recognized statistical
rating organization is a nationally recognized
statistical rating organization under this title, if
such statement is true in fact and if the effect of
such registration is not misrepresented.
(g) Prevention of Misuse of Nonpublic Information.--
(1) Organization policies and procedures.--Each
nationally recognized statistical rating organization
shall establish, maintain, and enforce written policies
and procedures reasonably designed, taking into
consideration the nature of the business of such
nationally recognized statistical rating organization,
to prevent the misuse in violation of this title, or
the rules or regulations hereunder, of material,
nonpublic information by such nationally recognized
statistical rating organization or any person
associated with such nationally recognized statistical
rating organization.
(2) Commission authority.--The Commission shall issue
final rules in accordance with subsection (n) to
require specific policies or procedures that are
reasonably designed to prevent misuse in violation of
this title (or the rules or regulations hereunder) of
material, nonpublic information.
(h) Management of Conflicts of Interest.--
(1) Organization policies and procedures.--Each
nationally recognized statistical rating organization
shall establish, maintain, and enforce written policies
and procedures reasonably designed, taking into
consideration the nature of the business of such
nationally recognized statistical rating organization
and affiliated persons and affiliated companies
thereof, to address and manage any conflicts of
interest that can arise from such business.
(2) Commission authority.--The Commission shall issue
final rules in accordance with subsection (n) to
prohibit, or require the management and disclosure of,
any conflicts of interest relating to the issuance of
credit ratings by a nationally recognized statistical
rating organization, including, without limitation,
conflicts of interest relating to--
(A) the manner in which a nationally
recognized statistical rating organization is
compensated by the obligor, or any affiliate of
the obligor, for issuing credit ratings or
providing related services;
(B) the provision of consulting, advisory, or
other services by a nationally recognized
statistical rating organization, or any person
associated with such nationally recognized
statistical rating organization, to the
obligor, or any affiliate of the obligor;
(C) business relationships, ownership
interests, or any other financial or personal
interests between a nationally recognized
statistical rating organization, or any person
associated with such nationally recognized
statistical rating organization, and the
obligor, or any affiliate of the obligor;
(D) any affiliation of a nationally
recognized statistical rating organization, or
any person associated with such nationally
recognized statistical rating organization,
with any person that underwrites the securities
or money market instruments that are the
subject of a credit rating; and
(E) any other potential conflict of interest,
as the Commission deems necessary or
appropriate in the public interest or for the
protection of investors.
(3) Separation of ratings from sales and marketing.--
(A) Rules required.--The Commission shall
issue rules to prevent the sales and marketing
considerations of a nationally recognized
statistical rating organization from
influencing the production of ratings by the
nationally recognized statistical rating
organization.
(B) Contents of rules.--The rules issued
under subparagraph (A) shall provide for--
(i) exceptions for small nationally
recognized statistical rating
organizations with respect to which the
Commission determines that the
separation of the production of ratings
and sales and marketing activities is
not appropriate; and
(ii) suspension or revocation of the
registration of a nationally recognized
statistical rating organization, if the
Commission finds, on the record, after
notice and opportunity for a hearing,
that--
(I) the nationally recognized
statistical rating organization
has committed a violation of a
rule issued under this
subsection; and
(II) the violation of a rule
issued under this subsection
affected a rating.
(4) Look-back requirement.--
(A) Review by the nationally recognized
statistical rating organization.--Each
nationally recognized statistical rating
organization shall establish, maintain, and
enforce policies and procedures reasonably
designed to ensure that, in any case in which
an employee of a person subject to a credit
rating of the nationally recognized statistical
rating organization or the issuer, underwriter,
or sponsor of a security or money market
instrument subject to a credit rating of the
nationally recognized statistical rating
organization was employed by the nationally
recognized statistical rating organization and
participated in any capacity in determining
credit ratings for the person or the securities
or money market instruments during the 1-year
period preceding the date an action was taken
with respect to the credit rating, the
nationally recognized statistical rating
organization shall--
(i) conduct a review to determine
whether any conflicts of interest of
the employee influenced the credit
rating; and
(ii) take action to revise the rating
if appropriate, in accordance with such
rules as the Commission shall
prescribe.
(B) Review by commission.--
(i) In general.--The Commission shall
conduct periodic reviews of the
policies described in subparagraph (A)
and the implementation of the policies
at each nationally recognized
statistical rating organization to
ensure they are reasonably designed and
implemented to most effectively
eliminate conflicts of interest.
(ii) Timing of reviews.--The
Commission shall review the code of
ethics and conflict of interest policy
of each nationally recognized
statistical rating organization--
(I) not less frequently than
annually; and
(II) whenever such policies
are materially modified or
amended.
(5) Report to commission on certain employment
transitions.--
(A) Report required.--Each nationally
recognized statistical rating organization
shall report to the Commission any case such
organization knows or can reasonably be
expected to know where a person associated with
such organization within the previous 5 years
obtains employment with any obligor, issuer,
underwriter, or sponsor of a security or money
market instrument for which the organization
issued a credit rating during the 12-month
period prior to such employment, if such
employee--
(i) was a senior officer of such
organization;
(ii) participated in any capacity in
determining credit ratings for such
obligor, issuer, underwriter, or
sponsor; or
(iii) supervised an employee
described in clause (ii).
(B) Public disclosure.--Upon receiving such a
report, the Commission shall make such
information publicly available.
(i) Prohibited Conduct.--
(1) Prohibited acts and practices.--The Commission
shall issue final rules in accordance with subsection
(n) to prohibit any act or practice relating to the
issuance of credit ratings by a nationally recognized
statistical rating organization that the Commission
determines to be unfair, coercive, or abusive,
including any act or practice relating to--
(A) conditioning or threatening to condition
the issuance of a credit rating on the purchase
by the obligor or an affiliate thereof of other
services or products, including pre-credit
rating assessment products, of the nationally
recognized statistical rating organization or
any person associated with such nationally
recognized statistical rating organization;
(B) lowering or threatening to lower a credit
rating on, or refusing to rate, securities or
money market instruments issued by an asset
pool or as part of any asset-backed or
mortgage-backed securities transaction, unless
a portion of the assets within such pool or
part of such transaction, as applicable, also
is rated by the nationally recognized
statistical rating organization; or
(C) modifying or threatening to modify a
credit rating or otherwise departing from its
adopted systematic procedures and methodologies
in determining credit ratings, based on whether
the obligor, or an affiliate of the obligor,
purchases or will purchase the credit rating or
any other service or product of the nationally
recognized statistical rating organization or
any person associated with such organization.
(2) Rule of construction.--Nothing in paragraph (1),
or in any rules or regulations adopted thereunder, may
be construed to modify, impair, or supersede the
operation of any of the antitrust laws (as defined in
the first section of the Clayton Act, except that such
term includes section 5 of the Federal Trade Commission
Act, to the extent that such section 5 applies to
unfair methods of competition).
(j) Designation of Compliance Officer.--
(1) In general.--Each nationally recognized
statistical rating organization shall designate an
individual responsible for administering the policies
and procedures that are required to be established
pursuant to subsections (g) and (h), and for ensuring
compliance with the securities laws and the rules and
regulations thereunder, including those promulgated by
the Commission pursuant to this section.
(2) Limitations.--
(A) In general.--Except as provided in
subparagraph (B), an individual designated
under paragraph (1) may not, while serving in
the designated capacity--
(i) perform credit ratings;
(ii) participate in the development
of ratings methodologies or models;
(iii) perform marketing or sales
functions; or
(iv) participate in establishing
compensation levels, other than for
employees working for that individual.
(B) Exception.--The Commission may exempt a
small nationally recognized statistical rating
organization from the limitations under this
paragraph, if the Commission finds that
compliance with such limitations would impose
an unreasonable burden on the nationally
recognized statistical rating organization.
(3) Other duties.--Each individual designated under
paragraph (1) shall establish procedures for the
receipt, retention, and treatment of--
(A) complaints regarding credit ratings,
models, methodologies, and compliance with the
securities laws and the policies and procedures
developed under this section; and
(B) confidential, anonymous complaints by
employees or users of credit ratings.
(4) Compensation.--The compensation of each
compliance officer appointed under paragraph (1) shall
not be linked to the financial performance of the
nationally recognized statistical rating organization
and shall be arranged so as to ensure the independence
of the officer's judgment.
(5) Annual reports required.--
(A) Annual reports required.--Each individual
designated under paragraph (1) shall submit to
the nationally recognized statistical rating
organization an annual report on the compliance
of the nationally recognized statistical rating
organization with the securities laws and the
policies and procedures of the nationally
recognized statistical rating organization that
includes--
(i) a description of any material
changes to the code of ethics and
conflict of interest policies of the
nationally recognized statistical
rating organization; and
(ii) a certification that the report
is accurate and complete.
(B) Submission of reports to the
commission.--Each nationally recognized
statistical rating organization shall file the
reports required under subparagraph (A)
together with the financial report that is
required to be submitted to the Commission
under this section.
(k) Statements of Financial Condition.--Each nationally
recognized statistical rating organization shall, on a
confidential basis, file with the Commission, at intervals
determined by the Commission, such financial statements,
certified (if required by the rules or regulations of the
Commission) by an independent public accountant, and
information concerning its financial condition, as the
Commission, by rule, may prescribe as necessary or appropriate
in the public interest or for the protection of investors.
(l) Sole Method of Registration.--
(1) In general.--On and after the effective date of
this section, a credit rating agency may only be
registered as a nationally recognized statistical
rating organization for any purpose in accordance with
this section.
(2) Prohibition on reliance on no-action relief.--On
and after the effective date of this section--
(A) an entity that, before that date,
received advice, approval, or a no-action
letter from the Commission or staff thereof to
be treated as a nationally recognized
statistical rating organization pursuant to the
Commission rule at section 240.15c3-1 of title
17, Code of Federal Regulations, may represent
itself or act as a nationally recognized
statistical rating organization only--
(i) during Commission consideration
of the application, if such entity has
filed an application for registration
under this section; and
(ii) on and after the date of
approval of its application for
registration under this section; and
(B) the advice, approval, or no-action letter
described in subparagraph (A) shall be void.
(3) Notice to other agencies.--Not later than 30 days
after the date of enactment of this section, the
Commission shall give notice of the actions undertaken
pursuant to this section to each Federal agency which
employs in its rules and regulations the term
``nationally recognized statistical rating
organization'' (as that term is used under Commission
rule 15c3-1 (17 C.F.R. 240.15c3-1), as in effect on the
date of enactment of this section).
(m) Accountability.--
(1) In general.--The enforcement and penalty
provisions of this title shall apply to statements made
by a credit rating agency in the same manner and to the
same extent as such provisions apply to statements made
by a registered public accounting firm or a securities
analyst under the securities laws, and such statements
shall not be deemed forward-looking statements for the
purposes of section 21E.
(2) Rulemaking.--The Commission shall issue such
rules as may be necessary to carry out this subsection.
(n) Regulations.--
(1) New provisions.--Such rules and regulations as
are required by this section or are otherwise necessary
to carry out this section, including the application
form required under subsection (a)--
(A) shall be issued by the Commission in
final form, not later than 270 days after the
date of enactment of this section; and
(B) shall become effective not later than 270
days after the date of enactment of this
section.
(2) Review of existing regulations.--Not later than
270 days after the date of enactment of this section,
the Commission shall--
(A) review its existing rules and regulations
which employ the term ``nationally recognized
statistical rating organization'' or ``NRSRO'';
and
(B) amend or revise such rules and
regulations in accordance with the purposes of
this section, as the Commission may prescribe
as necessary or appropriate in the public
interest or for the protection of investors.
(o) NRSROs Subject to Commission Authority.--
(1) In general.--No provision of the laws of any
State or political subdivision thereof requiring the
registration, licensing, or qualification as a credit
rating agency or a nationally recognized statistical
rating organization shall apply to any nationally
recognized statistical rating organization or person
employed by or working under the control of a
nationally recognized statistical rating organization.
(2) Limitation.--Nothing in this subsection prohibits
the securities commission (or any agency or office
performing like functions) of any State from
investigating and bringing an enforcement action with
respect to fraud or deceit against any nationally
recognized statistical rating organization or person
associated with a nationally recognized statistical
rating organization.
(p) Regulation of Nationally Recognized Statistical Rating
Organizations.--
(1) Establishment of office of credit ratings.--
(A) Office established.--The Commission shall
establish within the Commission an Office of
Credit Ratings (referred to in this subsection
as the ``Office'') to administer the rules of
the Commission--
(i) with respect to the practices of
nationally recognized statistical
rating organizations in determining
ratings, for the protection of users of
credit ratings and in the public
interest;
(ii) to promote accuracy in credit
ratings issued by nationally recognized
statistical rating organizations; and
(iii) to ensure that such ratings are
not unduly influenced by conflicts of
interest.
(B) Director of the office.--The head of the
Office shall be the Director, who shall report
to the Chairman.
(2) Staffing.--The Office established under this
subsection shall be staffed sufficiently to carry out
fully the requirements of this section. The staff shall
include persons with knowledge of and expertise in
corporate, municipal, and structured debt finance.
(3) Commission examinations.--
(A) Annual examinations required.--The Office
shall conduct an examination of each nationally
recognized statistical rating organization at
least annually.
(B) Conduct of examinations.--Each
examination under subparagraph (A) shall
include, as appropriate, a review of--
(i) whether the nationally recognized
statistical rating organization
conducts business in accordance with
the policies, procedures, and rating
methodologies of the nationally
recognized statistical rating
organization;
(ii) the management of conflicts of
interest by the nationally recognized
statistical rating organization;
(iii) implementation of ethics
policies by the nationally recognized
statistical rating organization;
(iv) the internal supervisory
controls of the nationally recognized
statistical rating organization;
(v) the governance of the nationally
recognized statistical rating
organization;
(vi) the activities of the individual
designated by the nationally recognized
statistical rating organization under
subsection (j)(1);
(vii) the processing of complaints by
the nationally recognized statistical
rating organization; and
(viii) the policies of the nationally
recognized statistical rating
organization governing the post-
employment activities of former staff
of the nationally recognized
statistical rating organization.
(C) Inspection reports.--The Commission shall
make available to the public, in an easily
understandable format, an annual report
summarizing--
(i) the essential findings of all
examinations conducted under
subparagraph (A), as deemed appropriate
by the Commission;
(ii) the responses by the nationally
recognized statistical rating
organizations to any material
regulatory deficiencies identified by
the Commission under clause (i); and
(iii) whether the nationally
recognized statistical rating
organizations have appropriately
addressed the recommendations of the
Commission contained in previous
reports under this subparagraph.
(4) Rulemaking authority.--The Commission shall--
(A) establish, by rule, fines, and other
penalties applicable to any nationally
recognized statistical rating organization that
violates the requirements of this section and
the rules thereunder; and
(B) issue such rules as may be necessary to
carry out this section.
(q) Transparency of Ratings Performance.--
(1) Rulemaking required.--The Commission shall, by
rule, require that each nationally recognized
statistical rating organization publicly disclose
information on the initial credit ratings determined by
the nationally recognized statistical rating
organization for each type of obligor, security, and
money market instrument, and any subsequent changes to
such credit ratings, for the purpose of allowing users
of credit ratings to evaluate the accuracy of ratings
and compare the performance of ratings by different
nationally recognized statistical rating organizations.
(2) Content.--The rules of the Commission under this
subsection shall require, at a minimum, disclosures
that--
(A) are comparable among nationally
recognized statistical rating organizations, to
allow users of credit ratings to compare the
performance of credit ratings across nationally
recognized statistical rating organizations;
(B) are clear and informative for investors
having a wide range of sophistication who use
or might use credit ratings;
(C) include performance information over a
range of years and for a variety of types of
credit ratings, including for credit ratings
withdrawn by the nationally recognized
statistical rating organization;
(D) are published and made freely available
by the nationally recognized statistical rating
organization, on an easily accessible portion
of its website, and in writing, when requested;
(E) are appropriate to the business model of
a nationally recognized statistical rating
organization; and
(F) each nationally recognized statistical
rating organization include an attestation with
any credit rating it issues affirming that no
part of the rating was influenced by any other
business activities, that the rating was based
solely on the merits of the instruments being
rated, and that such rating was an independent
evaluation of the risks and merits of the
instrument.
(r) Credit Ratings Methodologies.--The Commission shall
prescribe rules, for the protection of investors and in the
public interest, with respect to the procedures and
methodologies, including qualitative and quantitative data and
models, used by nationally recognized statistical rating
organizations that require each nationally recognized
statistical rating organization--
(1) to ensure that credit ratings are determined
using procedures and methodologies, including
qualitative and quantitative data and models, that
are--
(A) approved by the board of the nationally
recognized statistical rating organization, a
body performing a function similar to that of a
board; and
(B) in accordance with the policies and
procedures of the nationally recognized
statistical rating organization for the
development and modification of credit rating
procedures and methodologies;
(2) to ensure that when material changes to credit
rating procedures and methodologies (including changes
to qualitative and quantitative data and models) are
made, that--
(A) the changes are applied consistently to
all credit ratings to which the changed
procedures and methodologies apply;
(B) to the extent that changes are made to
credit rating surveillance procedures and
methodologies, the changes are applied to then-
current credit ratings by the nationally
recognized statistical rating organization
within a reasonable time period determined by
the Commission, by rule; and
(C) the nationally recognized statistical
rating organization publicly discloses the
reason for the change; and
(3) to notify users of credit ratings--
(A) of the version of a procedure or
methodology, including the qualitative
methodology or quantitative inputs, used with
respect to a particular credit rating;
(B) when a material change is made to a
procedure or methodology, including to a
qualitative model or quantitative inputs;
(C) when a significant error is identified in
a procedure or methodology, including a
qualitative or quantitative model, that may
result in credit rating actions; and
(D) of the likelihood of a material change
described in subparagraph (B) resulting in a
change in current credit ratings.
(s) Transparency of Credit Rating Methodologies and
Information Reviewed.--
(1) Form for disclosures.--The Commission shall
require, by rule, each nationally recognized
statistical rating organization to prescribe a form to
accompany the publication of each credit rating that
discloses--
(A) information relating to--
(i) the assumptions underlying the
credit rating procedures and
methodologies;
(ii) the data that was relied on to
determine the credit rating; and
(iii) if applicable, how the
nationally recognized statistical
rating organization used servicer or
remittance reports, and with what
frequency, to conduct surveillance of
the credit rating; and
(B) information that can be used by investors
and other users of credit ratings to better
understand credit ratings in each class of
credit rating issued by the nationally
recognized statistical rating organization.
(2) Format.--The form developed under paragraph (1)
shall--
(A) be easy to use and helpful for users of
credit ratings to understand the information
contained in the report;
(B) require the nationally recognized
statistical rating organization to provide the
content described in paragraph (3)(B) in a
manner that is directly comparable across types
of securities; and
(C) be made readily available to users of
credit ratings, in electronic or paper form, as
the Commission may, by rule, determine.
(3) Content of form.--
(A) Qualitative content.--Each nationally
recognized statistical rating organization
shall disclose on the form developed under
paragraph (1)--
(i) the credit ratings produced by
the nationally recognized statistical
rating organization;
(ii) the main assumptions and
principles used in constructing
procedures and methodologies, including
qualitative methodologies and
quantitative inputs and assumptions
about the correlation of defaults
across underlying assets used in rating
structured products;
(iii) the potential limitations of
the credit ratings, and the types of
risks excluded from the credit ratings
that the nationally recognized
statistical rating organization does
not comment on, including liquidity,
market, and other risks;
(iv) information on the uncertainty
of the credit rating, including--
(I) information on the
reliability, accuracy, and
quality of the data relied on
in determining the credit
rating; and
(II) a statement relating to
the extent to which data
essential to the determination
of the credit rating were
reliable or limited,
including--
(aa) any limits on
the scope of historical
data; and
(bb) any limits in
accessibility to
certain documents or
other types of
information that would
have better informed
the credit rating;
(v) whether and to what extent third
party due diligence services have been
used by the nationally recognized
statistical rating organization, a
description of the information that
such third party reviewed in conducting
due diligence services, and a
description of the findings or
conclusions of such third party;
(vi) a description of the data about
any obligor, issuer, security, or money
market instrument that were relied upon
for the purpose of determining the
credit rating;
(vii) a statement containing an
overall assessment of the quality of
information available and considered in
producing a rating for an obligor,
security, or money market instrument,
in relation to the quality of
information available to the nationally
recognized statistical rating
organization in rating similar
issuances;
(viii) information relating to
conflicts of interest of the nationally
recognized statistical rating
organization; and
(ix) such additional information as
the Commission may require.
(B) Quantitative content.--Each nationally
recognized statistical rating organization
shall disclose on the form developed under this
subsection--
(i) an explanation or measure of the
potential volatility of the credit
rating, including--
(I) any factors that might
lead to a change in the credit
ratings; and
(II) the magnitude of the
change that a user can expect
under different market
conditions;
(ii) information on the content of
the rating, including--
(I) the historical
performance of the rating; and
(II) the expected probability
of default and the expected
loss in the event of default;
(iii) information on the sensitivity
of the rating to assumptions made by
the nationally recognized statistical
rating organization, including--
(I) 5 assumptions made in the
ratings process that, without
accounting for any other
factor, would have the greatest
impact on a rating if the
assumptions were proven false
or inaccurate; and
(II) an analysis, using
specific examples, of how each
of the 5 assumptions identified
under subclause (I) impacts a
rating;
(iv) such additional information as
may be required by the Commission.
(4) Due diligence services for asset-backed
securities.--
(A) Findings.--The issuer or underwriter of
any asset-backed security shall make publicly
available the findings and conclusions of any
third-party due diligence report obtained by
the issuer or underwriter.
(B) Certification required.--In any case in
which third-party due diligence services are
employed by a nationally recognized statistical
rating organization, an issuer, or an
underwriter, the person providing the due
diligence services shall provide to any
nationally recognized statistical rating
organization that produces a rating to which
such services relate, written certification, as
provided in subparagraph (C).
(C) Format and content.--The Commission shall
establish the appropriate format and content
for the written certifications required under
subparagraph (B), to ensure that providers of
due diligence services have conducted a
thorough review of data, documentation, and
other relevant information necessary for a
nationally recognized statistical rating
organization to provide an accurate rating.
(D) Disclosure of certification.--The
Commission shall adopt rules requiring a
nationally recognized statistical rating
organization, at the time at which the
nationally recognized statistical rating
organization produces a rating, to disclose the
certification described in subparagraph (B) to
the public in a manner that allows the public
to determine the adequacy and level of due
diligence services provided by a third party.
(t) Corporate Governance, Organization, and Management of
Conflicts of Interest.--
(1) Board of directors.--Each nationally recognized
statistical rating organization shall have a board of
directors.
(2) Independent directors.--
(A) In general.--At least \1/2\ of the board
of directors, but not fewer than 2 of the
members thereof, shall be independent of the
nationally recognized statistical rating
agency. A portion of the independent directors
shall include users of ratings from a
nationally recognized statistical rating
organization.
(B) Independence determination.--In order to
be considered independent for purposes of this
subsection, a member of the board of directors
of a nationally recognized statistical rating
organization--
(i) may not, other than in his or her
capacity as a member of the board of
directors or any committee thereof--
(I) accept any consulting,
advisory, or other compensatory
fee from the nationally
recognized statistical rating
organization; or
(II) be a person associated
with the nationally recognized
statistical rating organization
or with any affiliated company
thereof; and
(ii) shall be disqualified from any
deliberation involving a specific
rating in which the independent board
member has a financial interest in the
outcome of the rating.
(C) Compensation and term.--The compensation
of the independent members of the board of
directors of a nationally recognized
statistical rating organization shall not be
linked to the business performance of the
nationally recognized statistical rating
organization, and shall be arranged so as to
ensure the independence of their judgment. The
term of office of the independent directors
shall be for a pre-agreed fixed period, not to
exceed 5 years, and shall not be renewable.
(3) Duties of board of directors.--In addition to the
overall responsibilities of the board of directors, the
board shall oversee--
(A) the establishment, maintenance, and
enforcement of policies and procedures for
determining credit ratings;
(B) the establishment, maintenance, and
enforcement of policies and procedures to
address, manage, and disclose any conflicts of
interest;
(C) the effectiveness of the internal control
system with respect to policies and procedures
for determining credit ratings; and
(D) the compensation and promotion policies
and practices of the nationally recognized
statistical rating organization.
(4) Treatment of nrsro subsidiaries.--If a nationally
recognized statistical rating organization is a
subsidiary of a parent entity, the board of the
directors of the parent entity may satisfy the
requirements of this subsection by assigning to a
committee of such board of directors the duties under
paragraph (3), if--
(A) at least \1/2\ of the members of the
committee (including the chairperson of the
committee) are independent, as defined in this
section; and
(B) at least 1 member of the committee is a
user of ratings from a nationally recognized
statistical rating organization.
(5) Exception authority.--If the Commission finds
that compliance with the provisions of this subsection
present an unreasonable burden on a small nationally
recognized statistical rating organization, the
Commission may permit the nationally recognized
statistical rating organization to delegate such
responsibilities to a committee that includes at least
one individual who is a user of ratings of a nationally
recognized statistical rating organization.
(u) Duty To Report Tips Alleging Material Violations of
Law.--
(1) Duty to report.--Each nationally recognized
statistical rating organization shall refer to the
appropriate law enforcement or regulatory authorities
any information that the nationally recognized
statistical rating organization receives from a third
party and finds credible that alleges that an issuer of
securities rated by the nationally recognized
statistical rating organization has committed or is
committing a material violation of law that has not
been adjudicated by a Federal or State court.
(2) Rule of construction.--Nothing in paragraph (1)
may be construed to require a nationally recognized
statistical rating organization to verify the accuracy
of the information described in paragraph (1).
(v) Information From Sources Other Than the Issuer.--In
producing a credit rating, a nationally recognized statistical
rating organization shall consider information about an issuer
that the nationally recognized statistical rating organization
has, or receives from a source other than the issuer or
underwriter, that the nationally recognized statistical rating
organization finds credible and potentially significant to a
rating decision.
SEC. 15F. REGISTRATION AND REGULATION OF SECURITY-BASED SWAP DEALERS
AND MAJOR SECURITY-BASED SWAP PARTICIPANTS.
(a) Registration.--
(1) Security-based swap dealers.--It shall be
unlawful for any person to act as a security-based swap
dealer unless the person is registered as a security-
based swap dealer with the Commission.
(2) Major security-based swap participants.--It shall
be unlawful for any person to act as a major security-
based swap participant unless the person is registered
as a major security-based swap participant with the
Commission.
(b) Requirements.--
(1) In general.--A person shall register as a
security-based swap dealer or major security-based swap
participant by filing a registration application with
the Commission.
(2) Contents.--
(A) In general.--The application shall be
made in such form and manner as prescribed by
the Commission, and shall contain such
information, as the Commission considers
necessary concerning the business in which the
applicant is or will be engaged.
(B) Continual reporting.--A person that is
registered as a security-based swap dealer or
major security-based swap participant shall
continue to submit to the Commission reports
that contain such information pertaining to the
business of the person as the Commission may
require.
(3) Expiration.--Each registration under this section
shall expire at such time as the Commission may
prescribe by rule or regulation.
(4) Rules.--Except as provided in subsections (d) and
(e), the Commission may prescribe rules applicable to
security-based swap dealers and major security-based
swap participants, including rules that limit the
activities of non-bank security-based swap dealers and
major security-based swap participants.
(5) Transition.--Not later than 1 year after the date
of enactment of the Wall Street Transparency and
Accountability Act of 2010, the Commission shall issue
rules under this section to provide for the
registration of security-based swap dealers and major
security-based swap participants.
(6) Statutory disqualification.--Except to the extent
otherwise specifically provided by rule, regulation, or
order of the Commission, it shall be unlawful for a
security-based swap dealer or a major security-based
swap participant to permit any person associated with a
security-based swap dealer or a major security-based
swap participant who is subject to a statutory
disqualification to effect or be involved in effecting
security-based swaps on behalf of the security-based
swap dealer or major security-based swap participant,
if the security-based swap dealer or major security-
based swap participant knew, or in the exercise of
reasonable care should have known, of the statutory
disqualification.
(c) Dual Registration.--
(1) Security-based swap dealer.--Any person that is
required to be registered as a security-based swap
dealer under this section shall register with the
Commission, regardless of whether the person also is
registered with the Commodity Futures Trading
Commission as a swap dealer.
(2) Major security-based swap participant.--Any
person that is required to be registered as a major
security-based swap participant under this section
shall register with the Commission, regardless of
whether the person also is registered with the
Commodity Futures Trading Commission as a major swap
participant.
(d) Rulemaking.--
(1) In general.--The Commission shall adopt rules for
persons that are registered as security-based swap
dealers or major security-based swap participants under
this section.
(2) Exception for prudential requirements.--
(A) In general.--The Commission may not
prescribe rules imposing prudential
requirements on security-based swap dealers or
major security-based swap participants for
which there is a prudential regulator.
(B) Applicability.--Subparagraph (A) does not
limit the authority of the Commission to
prescribe rules as directed under this section.
(e) Capital and Margin Requirements.--
(1) In general.--
(A) Security-based swap dealers and major
security-based swap participants that are
banks.--Each registered security-based swap
dealer and major security-based swap
participant for which there is not a prudential
regulator shall meet such minimum capital
requirements and minimum initial and variation
margin requirements as the prudential regulator
shall by rule or regulation prescribe under
paragraph (2)(A).
(B) Security-based swap dealers and major
security-based swap participants that are not
banks.--Each registered security-based swap
dealer and major security-based swap
participant for which there is not a prudential
regulator shall meet such minimum capital
requirements and minimum initial and variation
margin requirements as the Commission shall by
rule or regulation prescribe under paragraph
(2)(B).
(2) Rules.--
(A) Security-based swap dealers and major
security-based swap participants that are
banks.--The prudential regulators, in
consultation with the Commission and the
Commodity Futures Trading Commission, shall
adopt rules for security-based swap dealers and
major security-based swap participants, with
respect to their activities as a swap dealer or
major swap participant, for which there is a
prudential regulator imposing--
(i) capital requirements; and
(ii) both initial and variation
margin requirements on all security-
based swaps that are not cleared by a
registered clearing agency.
(B) Security-based swap dealers and major
security-based swap participants that are not
banks.--The Commission shall adopt rules for
security-based swap dealers and major security-
based swap participants, with respect to their
activities as a swap dealer or major swap
participant, for which there is not a
prudential regulator imposing--
(i) capital requirements; and
(ii) both initial and variation
margin requirements on all swaps that
are not cleared by a registered
clearing agency.
(C) Capital.--In setting capital requirements
for a person that is designated as a security-
based swap dealer or a major security-based
swap participant for a single type or single
class or category of security-based swap or
activities, the prudential regulator and the
Commission shall take into account the risks
associated with other types of security-based
swaps or classes of security-based swaps or
categories of security-based swaps engaged in
and the other activities conducted by that
person that are not otherwise subject to
regulation applicable to that person by virtue
of the status of the person.
(3) Standards for capital and margin.--
(A) In general.--To offset the greater risk
to the security-based swap dealer or major
security-based swap participant and the
financial system arising from the use of
security-based swaps that are not cleared, the
requirements imposed under paragraph (2) shall
--
(i) help ensure the safety and
soundness of the security-based swap
dealer or major security-based swap
participant; and
(ii) be appropriate for the risk
associated with the non-cleared
security-based swaps held as a
security-based swap dealer or major
security-based swap participant.
(B) Rule of construction.--
(i) In general.--Nothing in this
section shall limit, or be construed to
limit, the authority--
(I) of the Commission to set
financial responsibility rules
for a broker or dealer
registered pursuant to section
15(b) (except for section
15(b)(11) thereof) in
accordance with section
15(c)(3); or
(II) of the Commodity Futures
Trading Commission to set
financial responsibility rules
for a futures commission
merchant or introducing broker
registered pursuant to section
4f(a) of the Commodity Exchange
Act (except for section
4f(a)(3) thereof) in accordance
with section 4f(b) of the
Commodity Exchange Act.
(ii) Futures commission merchants and
other dealers.--A futures commission
merchant, introducing broker, broker,
or dealer shall maintain sufficient
capital to comply with the stricter of
any applicable capital requirements to
which such futures commission merchant,
introducing broker, broker, or dealer
is subject to under this title or the
Commodity Exchange Act.
(C) Margin requirements.--In prescribing
margin requirements under this subsection, the
prudential regulator with respect to security-
based swap dealers and major security-based
swap participants that are depository
institutions, and the Commission with respect
to security-based swap dealers and major
security-based swap participants that are not
depository institutions shall permit the use of
noncash collateral, as the regulator or the
Commission determines to be consistent with--
(i) preserving the financial
integrity of markets trading security-
based swaps; and
(ii) preserving the stability of the
United States financial system.
(D) Comparability of capital and margin
requirements.--
(i) In general.--The prudential
regulators, the Commission, and the
Securities and Exchange Commission
shall periodically (but not less
frequently than annually) consult on
minimum capital requirements and
minimum initial and variation margin
requirements.
(ii) Comparability.--The entities
described in clause (i) shall, to the
maximum extent practicable, establish
and maintain comparable minimum capital
requirements and minimum initial and
variation margin requirements,
including the use of noncash
collateral, for--
(I) security-based swap
dealers; and
(II) major security-based
swap participants.
(4) Applicability with respect to counterparties.--
[The requirements]
(A) In general._The requirements of
paragraphs (2)(A)(ii) and (2)(B)(ii) shall not
apply to a security-based swap in which a
counterparty qualifies for an exception under
section 3C(g)(1) or satisfies the criteria in
section 3C(g)(4).
(B) Initial margin requirement.--The initial
margin requirements imposed by rules adopted
pursuant to paragraphs (2)(A)(ii) and
(2)(B)(ii) shall not apply to any security-
based swap in which--
(i) one counterparty is a person in
which the other counterparty, directly
or indirectly, holds a majority
ownership interest; or
(ii) a third party, directly or
indirectly, holds a majority ownership
interest in both counterparties.
(f) Reporting and Recordkeeping.--
(1) In general.--Each registered security-based swap
dealer and major security-based swap participant--
(A) shall make such reports as are required
by the Commission, by rule or regulation,
regarding the transactions and positions and
financial condition of the registered security-
based swap dealer or major security-based swap
participant;
(B)(i) for which there is a prudential
regulator, shall keep books and records of all
activities related to the business as a
security-based swap dealer or major security-
based swap participant in such form and manner
and for such period as may be prescribed by the
Commission by rule or regulation; and
(ii) for which there is no prudential
regulator, shall keep books and records in such
form and manner and for such period as may be
prescribed by the Commission by rule or
regulation; and
(C) shall keep books and records described in
subparagraph (B) open to inspection and
examination by any representative of the
Commission.
(2) Rules.--The Commission shall adopt rules
governing reporting and recordkeeping for security-
based swap dealers and major security-based swap
participants.
(g) Daily Trading Records.--
(1) In general.--Each registered security-based swap
dealer and major security-based swap participant shall
maintain daily trading records of the security-based
swaps of the registered security-based swap dealer and
major security-based swap participant and all related
records (including related cash or forward
transactions) and recorded communications, including
electronic mail, instant messages, and recordings of
telephone calls, for such period as may be required by
the Commission by rule or regulation.
(2) Information requirements.--The daily trading
records shall include such information as the
Commission shall require by rule or regulation.
(3) Counterparty records.--Each registered security-
based swap dealer and major security-based swap
participant shall maintain daily trading records for
each counterparty in a manner and form that is
identifiable with each security-based swap transaction.
(4) Audit trail.--Each registered security-based swap
dealer and major security-based swap participant shall
maintain a complete audit trail for conducting
comprehensive and accurate trade reconstructions.
(5) Rules.--The Commission shall adopt rules
governing daily trading records for security-based swap
dealers and major security-based swap participants.
(h) Business Conduct Standards.--
(1) In general.--Each registered security-based swap
dealer and major security-based swap participant shall
conform with such business conduct standards as
prescribed in paragraph (3) and as may be prescribed by
the Commission by rule or regulation that relate to--
(A) fraud, manipulation, and other abusive
practices involving security-based swaps
(including security-based swaps that are
offered but not entered into);
(B) diligent supervision of the business of
the registered security-based swap dealer and
major security-based swap participant;
(C) adherence to all applicable position
limits; and
(D) such other matters as the Commission
determines to be appropriate.
(2) Responsibilities with respect to special
entities.--
(A) Advising special entities.--A security-
based swap dealer or major security-based swap
participant that acts as an advisor to special
entity regarding a security-based swap shall
comply with the requirements of paragraph (4)
with respect to such special entity.
(B) Entering of security-based swaps with
respect to special entities.--A security-based
swap dealer that enters into or offers to enter
into security-based swap with a special entity
shall comply with the requirements of paragraph
(5) with respect to such special entity.
(C) Special entity defined.--For purposes of
this subsection, the term ``special entity''
means--
(i) a Federal agency;
(ii) a State, State agency, city,
county, municipality, or other
political subdivision of a State or;
(iii) any employee benefit plan, as
defined in section 3 of the Employee
Retirement Income Security Act of 1974
(29 U.S.C. 1002);
(iv) any governmental plan, as
defined in section 3 of the Employee
Retirement Income Security Act of 1974
(29 U.S.C. 1002); or
(v) any endowment, including an
endowment that is an organization
described in section 501(c)(3) of the
Internal Revenue Code of 1986.
(3) Business conduct requirements.--Business conduct
requirements adopted by the Commission shall--
(A) establish a duty for a security-based
swap dealer or major security-based swap
participant to verify that any counterparty
meets the eligibility standards for an eligible
contract participant;
(B) require disclosure by the security-based
swap dealer or major security-based swap
participant to any counterparty to the
transaction (other than a security-based swap
dealer, major security-based swap participant,
security-based swap dealer, or major security-
based swap participant) of--
(i) information about the material
risks and characteristics of the
security-based swap;
(ii) any material incentives or
conflicts of interest that the
security-based swap dealer or major
security-based swap participant may
have in connection with the security-
based swap; and
(iii)(I) for cleared security-based
swaps, upon the request of the
counterparty, receipt of the daily mark
of the transaction from the appropriate
derivatives clearing organization; and
(II) for uncleared security-based
swaps, receipt of the daily mark of the
transaction from the security-based
swap dealer or the major security-based
swap participant;
(C) establish a duty for a security-based
swap dealer or major security-based swap
participant to communicate in a fair and
balanced manner based on principles of fair
dealing and good faith; and
(D) establish such other standards and
requirements as the Commission may determine
are appropriate in the public interest, for the
protection of investors, or otherwise in
furtherance of the purposes of this Act.
(4) Special requirements for security-based swap
dealers acting as advisors.--
(A) In general.--It shall be unlawful for a
security-based swap dealer or major security-
based swap participant--
(i) to employ any device, scheme, or
artifice to defraud any special entity
or prospective customer who is a
special entity;
(ii) to engage in any transaction,
practice, or course of business that
operates as a fraud or deceit on any
special entity or prospective customer
who is a special entity; or
(iii) to engage in any act, practice,
or course of business that is
fraudulent, deceptive, or manipulative.
(B) Duty.--Any security-based swap dealer
that acts as an advisor to a special entity
shall have a duty to act in the best interests
of the special entity.
(C) Reasonable efforts.--Any security-based
swap dealer that acts as an advisor to a
special entity shall make reasonable efforts to
obtain such information as is necessary to make
a reasonable determination that any security-
based swap recommended by the security-based
swap dealer is in the best interests of the
special entity, including information relating
to--
(i) the financial status of the
special entity;
(ii) the tax status of the special
entity;
(iii) the investment or financing
objectives of the special entity; and
(iv) any other information that the
Commission may prescribe by rule or
regulation.
(5) Special requirements for security-based swap
dealers as counterparties to special entities.--
(A) In general.--Any security-based swap
dealer or major security-based swap participant
that offers to or enters into a security-based
swap with a special entity shall--
(i) comply with any duty established
by the Commission for a security-based
swap dealer or major security-based
swap participant, with respect to a
counterparty that is an eligible
contract participant within the meaning
of subclause (I) or (II) of clause
(vii) of section 1a(18) of the
Commodity Exchange Act, that requires
the security-based swap dealer or major
security-based swap participant to have
a reasonable basis to believe that the
counterparty that is a special entity
has an independent representative
that--
(I) has sufficient knowledge
to evaluate the transaction and
risks;
(II) is not subject to a
statutory disqualification;
(III) is independent of the
security-based swap dealer or
major security-based swap
participant;
(IV) undertakes a duty to act
in the best interests of the
counterparty it represents;
(V) makes appropriate
disclosures;
(VI) will provide written
representations to the special
entity regarding fair pricing
and the appropriateness of the
transaction; and
(VII) in the case of employee
benefit plans subject to the
Employee Retirement Income
Security act of 1974, is a
fiduciary as defined in section
3 of that Act (29 U.S.C. 1002);
and
(ii) before the initiation of the
transaction, disclose to the special
entity in writing the capacity in which
the security-based swap dealer is
acting.
(B) Commission authority.--The Commission may
establish such other standards and requirements
under this paragraph as the Commission may
determine are appropriate in the public
interest, for the protection of investors, or
otherwise in furtherance of the purposes of
this Act.
(6) Rules.--The Commission shall prescribe rules
under this subsection governing business conduct
standards for security-based swap dealers and major
security-based swap participants.
(7) Applicability.--This subsection shall not apply
with respect to a transaction that is--
(A) initiated by a special entity on an
exchange or security-based swaps execution
facility; and
(B) the security-based swap dealer or major
security-based swap participant does not know
the identity of the counterparty to the
transaction.''
(i) Documentation Standards.--
(1) In general.--Each registered security-based swap
dealer and major security-based swap participant shall
conform with such standards as may be prescribed by the
Commission, by rule or regulation, that relate to
timely and accurate confirmation, processing, netting,
documentation, and valuation of all security-based
swaps.
(2) Rules.--The Commission shall adopt rules
governing documentation standards for security-based
swap dealers and major security-based swap
participants.
(j) Duties.--Each registered security-based swap dealer and
major security-based swap participant shall, at all times,
comply with the following requirements:
(1) Monitoring of trading.--The security-based swap
dealer or major security-based swap participant shall
monitor its trading in security-based swaps to prevent
violations of applicable position limits.
(2) Risk management procedures.--The security-based
swap dealer or major security-based swap participant
shall establish robust and professional risk management
systems adequate for managing the day-to-day business
of the security-based swap dealer or major security-
based swap participant.
(3) Disclosure of general information.--The security-
based swap dealer or major security-based swap
participant shall disclose to the Commission and to the
prudential regulator for the security-based swap dealer
or major security-based swap participant, as
applicable, information concerning--
(A) terms and conditions of its security-
based swaps;
(B) security-based swap trading operations,
mechanisms, and practices;
(C) financial integrity protections relating
to security-based swaps; and
(D) other information relevant to its trading
in security-based swaps.
(4) Ability to obtain information.--The security-
based swap dealer or major security-based swap
participant shall--
(A) establish and enforce internal systems
and procedures to obtain any necessary
information to perform any of the functions
described in this section; and
(B) provide the information to the Commission
and to the prudential regulator for the
security-based swap dealer or major security-
based swap participant, as applicable, on
request.
(5) Conflicts of interest.--The security-based swap
dealer and major security-based swap participant shall
implement conflict-of-interest systems and procedures
that--
(A) establish structural and institutional
safeguards to ensure that the activities of any
person within the firm relating to research or
analysis of the price or market for any
security-based swap or acting in a role of
providing clearing activities or making
determinations as to accepting clearing
customers are separated by appropriate
informational partitions within the firm from
the review, pressure, or oversight of persons
whose involvement in pricing, trading, or
clearing activities might potentially bias
their judgment or supervision and contravene
the core principles of open access and the
business conduct standards described in this
title; and
(B) address such other issues as the
Commission determines to be appropriate.
(6) Antitrust considerations.--Unless necessary or
appropriate to achieve the purposes of this title, the
security-based swap dealer or major security-based swap
participant shall not--
(A) adopt any process or take any action that
results in any unreasonable restraint of trade;
or
(B) impose any material anticompetitive
burden on trading or clearing.
(7) Rules.--The Commission shall prescribe rules
under this subsection governing duties of security-
based swap dealers and major security-based swap
participants.
(k) Designation of Chief Compliance Officer.--
(1) In general.--Each security-based swap dealer and
major security-based swap participant shall designate
an individual to serve as a chief compliance officer.
(2) Duties.--The chief compliance officer shall--
(A) report directly to the board or to the
senior officer of the security-based swap
dealer or major security-based swap
participant;
(B) review the compliance of the security-
based swap dealer or major security-based swap
participant with respect to the security-based
swap dealer and major security-based swap
participant requirements described in this
section;
(C) in consultation with the board of
directors, a body performing a function similar
to the board, or the senior officer of the
organization, resolve any conflicts of interest
that may arise;
(D) be responsible for administering each
policy and procedure that is required to be
established pursuant to this section;
(E) ensure compliance with this title
(including regulations) relating to security-
based swaps, including each rule prescribed by
the Commission under this section;
(F) establish procedures for the remediation
of noncompliance issues identified by the chief
compliance officer through any--
(i) compliance office review;
(ii) look-back;
(iii) internal or external audit
finding;
(iv) self-reported error; or
(v) validated complaint; and
(G) establish and follow appropriate
procedures for the handling, management
response, remediation, retesting, and closing
of noncompliance issues.
(3) Annual reports.--
(A) In general.--In accordance with rules
prescribed by the Commission, the chief
compliance officer shall annually prepare and
sign a report that contains a description of--
(i) the compliance of the security-
based swap dealer or major swap
participant with respect to this title
(including regulations); and
(ii) each policy and procedure of the
security-based swap dealer or major
security-based swap participant of the
chief compliance officer (including the
code of ethics and conflict of interest
policies).
(B) Requirements.--A compliance report under
subparagraph (A) shall--
(i) accompany each appropriate
financial report of the security-based
swap dealer or major security-based
swap participant that is required to be
furnished to the Commission pursuant to
this section; and
(ii) include a certification that,
under penalty of law, the compliance
report is accurate and complete.
(l) Enforcement and Administrative Proceeding Authority.--
(1) Primary enforcement authority.--
(A) Securities and exchange commission.--
Except as provided in subparagraph (B), (C), or
(D), the Commission shall have primary
authority to enforce subtitle B, and the
amendments made by subtitle B of the Wall
Street Transparency and Accountability Act of
2010, with respect to any person.
(B) Prudential regulators.--The prudential
regulators shall have exclusive authority to
enforce the provisions of subsection (e) and
other prudential requirements of this title
(including risk management standards), with
respect to security-based swap dealers or major
security-based swap participants for which they
are the prudential regulator.
(C) Referral.--
(i) Violations of nonprudential
requirements.--If the appropriate
Federal banking agency for security-
based swap dealers or major security-
based swap participants that are
depository institutions has cause to
believe that such security-based swap
dealer or major security-based swap
participant may have engaged in conduct
that constitutes a violation of the
nonprudential requirements of this
section or rules adopted by the
Commission thereunder, the agency may
recommend in writing to the Commission
that the Commission initiate an
enforcement proceeding as authorized
under this title. The recommendation
shall be accompanied by a written
explanation of the concerns giving rise
to the recommendation.
(ii) Violations of prudential
requirements.--If the Commission has
cause to believe that a securities-
based swap dealer or major securities-
based swap participant that has a
prudential regulator may have engaged
in conduct that constitute a violation
of the prudential requirements of
subsection (e) or rules adopted
thereunder, the Commission may
recommend in writing to the prudential
regulator that the prudential regulator
initiate an enforcement proceeding as
authorized under this title. The
recommendation shall be accompanied by
a written explanation of the concerns
giving rise to the recommendation.
(D) Backstop enforcement authority.--
(i) Initiation of enforcement
proceeding by prudential regulator.--If
the Commission does not initiate an
enforcement proceeding before the end
of the 90-day period beginning on the
date on which the Commission receives a
written report under subsection (C)(i),
the prudential regulator may initiate
an enforcement proceeding.
(ii) Initiation of enforcement
proceeding by commission.--If the
prudential regulator does not initiate
an enforcement proceeding before the
end of the 90-day period beginning on
the date on which the prudential
regulator receives a written report
under subsection (C)(ii), the
Commission may initiate an enforcement
proceeding.
(2) Censure, denial, suspension; notice and
hearing.--The Commission, by order, shall censure,
place limitations on the activities, functions, or
operations of, or revoke the registration of any
security-based swap dealer or major security-based swap
participant that has registered with the Commission
pursuant to subsection (b) if the Commission finds, on
the record after notice and opportunity for hearing,
that such censure, placing of limitations, or
revocation is in the public interest and that such
security-based swap dealer or major security-based swap
participant, or any person associated with such
security-based swap dealer or major security-based swap
participant effecting or involved in effecting
transactions in security-based swaps on behalf of such
security-based swap dealer or major security-based swap
participant, whether prior or subsequent to becoming so
associated--
(A) has committed or omitted any act, or is
subject to an order or finding, enumerated in
subparagraph (A), (D), or (E) of paragraph (4)
of section 15(b);
(B) has been convicted of any offense
specified in subparagraph (B) of such paragraph
(4) within 10 years of the commencement of the
proceedings under this subsection;
(C) is enjoined from any action, conduct, or
practice specified in subparagraph (C) of such
paragraph (4);
(D) is subject to an order or a final order
specified in subparagraph (F) or (H),
respectively, of such paragraph (4); or
(E) has been found by a foreign financial
regulatory authority to have committed or
omitted any act, or violated any foreign
statute or regulation, enumerated in
subparagraph (G) of such paragraph (4).
(3) Associated persons.--With respect to any person
who is associated, who is seeking to become associated,
or, at the time of the alleged misconduct, who was
associated or was seeking to become associated with a
security-based swap dealer or major security-based swap
participant for the purpose of effecting or being
involved in effecting security-based swaps on behalf of
such security-based swap dealer or major security-based
swap participant, the Commission, by order, shall
censure, place limitations on the activities or
functions of such person, or suspend for a period not
exceeding 12 months, or bar such person from being
associated with a security-based swap dealer or major
security-based swap participant, if the Commission
finds, on the record after notice and opportunity for a
hearing, that such censure, placing of limitations,
suspension, or bar is in the public interest and that
such person--
(A) has committed or omitted any act, or is
subject to an order or finding, enumerated in
subparagraph (A), (D), or (E) of paragraph (4)
of section 15(b);
(B) has been convicted of any offense
specified in subparagraph (B) of such paragraph
(4) within 10 years of the commencement of the
proceedings under this subsection;
(C) is enjoined from any action, conduct, or
practice specified in subparagraph (C) of such
paragraph (4);
(D) is subject to an order or a final order
specified in subparagraph (F) or (H),
respectively, of such paragraph (4); or
(E) has been found by a foreign financial
regulatory authority to have committed or
omitted any act, or violated any foreign
statute or regulation, enumerated in
subparagraph (G) of such paragraph (4).
(4) Unlawful conduct.--It shall be unlawful--
(A) for any person as to whom an order under
paragraph (3) is in effect, without the consent
of the Commission, willfully to become, or to
be, associated with a security-based swap
dealer or major security-based swap participant
in contravention of such order; or
(B) for any security-based swap dealer or
major security-based swap participant to permit
such a person, without the consent of the
Commission, to become or remain a person
associated with the security-based swap dealer
or major security-based swap participant in
contravention of such order, if such security-
based swap dealer or major security-based swap
participant knew, or in the exercise of
reasonable care should have known, of such
order.
* * * * * * *
rules, regulations, and orders; annual reports
Sec. 23. (a)(1) The Commission, the Board of Governors of the
Federal Reserve System, and the other agencies enumerated in
section 3(a)(34) of this title shall each have power to make
such rules and regulations as may be necessary or appropriate
to implement the provisions of this title for which they are
responsible or for the execution of the functions vested in
them by this title, and may for such purposes classify persons,
securities, transactions, statements, applications, reports,
and other matters within their respective jurisdictions, and
prescribe greater, lesser, or different requirements for
different classes thereof. No provision of this title imposing
any liability shall apply to any act done or omitted in good
faith in conformity with a rule, regulation, or order of the
Commission, the Board of Governors of the Federal Reserve
System, other agency enumerated in section 3(a)(34) of this
title, or any self-regulatory organization, notwithstanding
that such rule, regulation, or order may thereafter be amended
or rescinded or determined by judicial or other authority to be
invalid for any reason.
(2) The Commission and the Secretary of the Treasury, in
making rules and regulations pursuant to any provisions of this
title, shall consider among other matters the impact any such
rule or regulation would have on competition. The Commission
and the Secretary of the Treasury shall not adopt any such rule
or regulation which would impose a burden on competition not
necessary or appropriate in furtherance of the purposes of this
title. The Commission and the Secretary of the Treasury shall
include in the statement of basis and purpose incorporated in
any rule or regulation adopted under this title, the reasons
for the Commission's or the Secretary's determination that any
burden on competition imposed by such rule or regulation is
necessary or appropriate in furtherance of the purposes of this
title.
(3) The Commission and the Secretary, in making rules and
regulations pursuant to any provision of this title,
considering any application for registration in accordance with
section 19(a) of this title, or reviewing any proposed rule
change of a self-regulatory organization in accordance with
section 19(b) of this title, shall keep in a public file and
make available for copying all written statements filed with
the Commission and the Secretary and all written communications
between the Commission or the Secretary and any person relating
to the proposed rule, regulation, application, or proposed rule
change: Provided, however, That the Commission and the
Secretary shall not be required to keep in a public file or
make available for copying any such statement or communication
which it may withhold from the public in accordance with the
provisions of section 552 of title 5, United States Code.
(b)(1) The Commission, the Board of Governors of the Federal
Reserve System, and the other agencies enumerated in section
3(a)(34) of this title shall each make an annual report to the
Congress on its work for the preceding year, and shall include
in each such report whatever information, data, and
recommendations for further legislation it considers advisable
with regard to matters within its respective jurisdiction under
this title.
(2) The appropriate regulatory agency for a self-regulatory
organization shall include in its annual report to the Congress
for each fiscal year, a summary of its oversight activities
under this title with respect to such self-regulatory
organization, including a description of any examination
conducted as part of such activities of any organization, any
material recommendation presented as part of such activities to
such organization for changes in its organization or rules, and
any such action by such organization in response to any such
recommendation.
(3) The appropriate regulatory agency for any class of
municipal securities dealers shall include in its annual report
to the Congress for each fiscal year a summary of its
regulatory activities pursuant to this title with respect to
such municipal securities dealers, including the nature of and
reason for any sanction imposed pursuant to this title against
any such municipal securities dealer.
(4) The Commission shall also include in its annual report to
the Congress for each fiscal year--
(A) a summary of the Commission's oversight
activities with respect to self-regulatory
organizations for which it is not the appropriate
regulatory agency, including a description of any
examination of any such organization, any material
recommendation presented to any such organization for
changes in its organization or rules, and any action by
any such organization in response to any such
recommendations;
(B) a statement and analysis of the expenses and
operations of each self-regulatory organization in
connection with the performance of its responsibilities
under this title, for which purpose data pertaining to
such expenses and operations shall be made available by
such organization to the Commission at its request;
(C) the steps the Commission has taken and the
progress it has made toward ending the physical
movement of the securities certificate in connection
with the settlement of securities transactions, and its
recommendations, if any, for legislation to eliminate
the securities certificate;
(D) the number of requests for exemptions from
provisions of this title received, the number granted,
and the basis upon which any such exemption was
granted;
(E) a summary of the Commission's regulatory
activities with respect to municipal securities dealers
for which it is not the appropriate regulatory agency,
including the nature of, and reason for, any sanction
imposed in proceedings against such municipal
securities dealers;
(F) a statement of the time elapsed between the
filing of reports pursuant to section 13(f) of this
title and the public availability of the information
contained therein, the costs involved in the
Commission's processing of such reports and tabulating
such information, the manner in which the Commission
uses such information, and the steps the Commission has
taken and the progress it has made toward requiring
such reports to be filed and such information to be
made available to the public in machine language;
(G) information concerning (i) the effects its rules
and regulations are having on the viability of small
brokers and dealers; (ii) its attempts to reduce any
unnecessary reporting burden on such brokers and
dealers; and (iii) its efforts to help to assure the
continued participation of small brokers and dealers in
the United States securities markets;
(H) a statement detailing its administration of the
Freedom of Information Act, section 552 of title 5,
United States Code, including a copy of the report
filed pursuant to subsection (d) of such section; and
(I) the steps that have been taken and the progress
that has been made in promoting the timely public
dissemination and availability for analytical purposes
(on a fair, reasonable, and nondiscriminatory basis) of
information concerning government securities
transactions and quotations, and its recommendations,
if any, for legislation to assure timely dissemination
of (i) information on transactions in regularly traded
government securities sufficient to permit the
determination of the prevailing market price for such
securities, and (ii) reports of the highest published
bids and lowest published offers for government
securities (including the size at which persons are
willing to trade with respect to such bids and offers).
(c) The Commission, by rule, shall prescribe the procedure
applicable to every case pursuant to this title of adjudication
(as defined in section 551 of title 5, United States Code) not
required to be determined on the record after notice and
opportunity for hearing. Such rules shall, as a minimum,
provide that prompt notice shall be given of any adverse action
or final disposition and that such notice and the entry of any
order shall be accompanied by a statement of written reasons.
(d) Cease-and-Desist Procedures.--Within 1 year after the
date of enactment of this subsection, the Commission shall
establish regulations providing for the expeditious conduct of
hearings and rendering of decisions under section 21C of this
title, section 8A of the Securities Act of 1933, section 9(f)
of the Investment Company Act of 1940, and section 203(k) of
the Investment Advisers Act of 1940.
(e) Procedure for Obtaining Certain Intellectual Property.--
The Commission is not authorized to compel under this title a
person to produce or furnish source code, including algorithmic
trading source code or similar intellectual property that forms
the basis for design of the source code, to the Commission
unless the Commission first issues a subpoena.
* * * * * * *
----------
TRUTH IN LENDING ACT
* * * * * * *
TITLE I--CONSUMER CREDIT COST DISCLOSURE
* * * * * * *
CHAPTER 1--GENERAL PROVISIONS
* * * * * * *
Sec. 103. Definitions and rules of construction
(a) The definitions and rules of construction set forth in
this section are applicable for the purposes of this title.
(b) Bureau.--The term ``Bureau'' means the Bureau of Consumer
Financial Protection.
(c) The term ``Bureau'' refers to the Bureau of Governors of
the Federal Reserve System.
(d) The term ``organization'' means a corporation, government
or governmental subdivision or agency, trust, estate,
partnership, cooperative, or association.
(e) The term ``person'' means a natural person or an
organization.
(f) The term ``credit'' means the right granted by a creditor
to a debtor to defer payment of debt or to incur debt and defer
its payment.
(g) The term ``creditor'' refers only to a person who both
(1) regularly extends, whether in connection with loans, sales
of property or services, or otherwise, consumer credit which is
payable by agreement in more than four installments or for
which the payment of a finance charge is or may be required,
and (2) is the person to whom the debt arising from the
consumer credit transaction is initially payable on the face of
the evidence of indebtedness or, if there is no such evidence
of indebtedness, by agreement. Notwithstanding the preceding
sentence, in the case of an open-end credit plan involving a
credit card, the card issuer and any person who honors the
credit card and offers a discount which is a finance charge are
creditors. For the purpose of the requirements imposed under
chapter 4 and sections 127(a)(5), 127(a)(6), 127(a)(7),
127(b)(1), 127(b)(2), 127(b)(3), 127(b)(8), and 127(b)(10) of
chapter 2 of this title, the term ``creditor'' shall also
include card issuers whether or not the amount due is payable
by agreement in more than four installments or the payment of a
finance charge is or may be required, and the Bureau shall, by
regulation, apply these requirements to such card issuers, to
the extent appropriate, even though the requirements are by
their terms applicable only to creditors offering open-end
credit plans. Any person who originates 2 or more mortgages
referred to in subsection (aa) in any 12-month period or any
person who originates 1 or more such mortgages through a
mortgage broker shall be considered to be a creditor for
purposes of this title. The term ``creditor'' includes a
private educational lender (as that term is defined in section
140) for purposes of this title.
(h) The term ``credit sale'' refers to any sale in which the
seller is a creditor. The term includes any contract in the
form of a bailment or lease if the bailee or lessee contracts
to pay as compensation for use a sum substantially equivalent
to or in excess of the aggregate value of the property and
services involved and it is agreed that the bailee or lessee
will become, or for no other or a nominal consideration has the
option to become, the owner of the property upon full
compliance with his obligations under the contract.
(i) The adjective ``consumer'', used with reference to a
credit transaction, characterizes the transaction as one in
which the party to whom credit is offered or extended is a
natural person, and the money, property, or services which are
the subject of the transaction are primarily for personal,
family, or household purposes.
(j) The terms ``open end credit plan'' and ``open end
consumer credit plan'' mean a plan under which the creditor
reasonably contemplates repeated transactions, which prescribes
the terms of such transactions, and which provides for a
finance charge which may be computed from time to time on the
outstanding unpaid balance. A credit plan or open end consumer
credit plan which is an open end credit plan or open end
consumer credit plan within the meaning of the preceding
sentence is an open end credit plan or open end consumer credit
plan even if credit information is verified from time to time.
(k) The term ``adequate notice'', as used in section 133,
means a printed notice to a cardholder which sets forth the
pertinent facts clearly and conspicuously so that a person
against whom it is to operate could reasonably be expected to
have noticed it and understood its meaning. Such notice may be
given to a cardholder by printing the notice on any credit
card, or on each periodic statement of account, issued to the
cardholder, or by any other means reasonably assuring the
receipt thereof by the cardholder.
(l) The term ``credit card'' means any card, plate, coupon
book or other credit device existing for the purpose of
obtaining money, property, labor, or services on credit.
(m) The term ``accepted credit card'' means any credit card
which the cardholder has requested and received or has signed
or has used, or authorized another to use, for the purpose of
obtaining money, property, labor, or services on credit.
(n) The term ``cardholder'' means any person to whom a credit
card is issued or any person who has agreed with the card
issuer to pay obligations arising from the issuance of a credit
card to another person.
(o) The term ``card issuer'' means any person who issues a
credit card, or the agent of such person with respect to such
card.
(p) The term ``unauthorized use'', as used in section 133,
means a use of a credit card by a person other than the
cardholder who does not have actual, implied, or apparent
authority for such use and from which the cardholder receives
no benefit.
(q) The term ``discount'' as used in section 167 means a
reduction made from the regular price. The term ``discount'' as
used in section 167 shall not mean a surcharge.
(r) The term ``surcharge'' as used in section 103 and section
167 means any means of increasing the regular price to a
cardholder which is not imposed upon customers paying by cash,
check, or similar means.
(s) The term ``State'' refers to any State, the Commonwealth
of Puerto Rico, the District of Columbia, and any territory or
possession of the United States.
(t) The term ``agricultural purposes'' includes the
production, harvest, exhibition, marketing, transportation,
processing, or manufacture of agricultural products by a
natural person who cultivates, plants, propagates, or nurtures
those agricultural products, including but not limited to the
acquisition of farmland, real property with a farm residence,
and personal property and services used primarily in farming.
(u) The term ``agricultural products'' includes agricultural,
horticultural, viticultural, and dairy products, livestock,
wildlife, poultry, bees, forest products, fish and shellfish,
and any products thereof, including processed and manufactured
products, and any and all products raised or produced on farms
and any processed or manufactured products thereof.
(v) The term ``material disclosures'' means the disclosure,
as required by this title, of the annual percentage rate, the
method of determining the finance charge and the balance upon
which a finance charge will be imposed, the amount of the
finance charge, the amount to be financed, the total of
payments, the number and amount of payments, the due dates or
periods of payments scheduled to repay the indebtedness, and
the disclosures required by section 129(a).
(w) The term ``dwelling'' means a residential structure or
mobile home which contains one to four family housing units, or
individual units of condominiums or cooperatives.
(x) The term ``residential mortgage transaction'' means a
transaction in which a mortgage, deed of trust, purchase money
security interest arising under an installment sales contract,
or equivalent consensual security interest is created or
retained against the consumer's dwelling to finance the
acquisition or initial construction of such dwelling.
(y) As used in this section and section 167, the term
``regular price'' means the tag or posted price charged for the
property or service if a single price is tagged or posted, or
the price charged for the property or service when payment is
made by use of an open-end credit plan or a credit card if
either (1) no price is tagged or posted, or (2) two prices are
tagged or posted, one of which is charged when payment is made
by use of an open-end credit plan or a credit card and the
other when payment is made by use of cash, check, or similar
means. For purposes of this definition, payment by check,
draft, or other negotiable instrument which may result in the
debiting of an open-end credit plan or a credit cardholder's
open-end account shall not be considered payment made by use of
the plan or the account.
(z) Any reference to any requirement imposed under this title
or any provision thereof includes reference to the regulations
of the Bureau under this title or the provision thereof in
question.
(aa) The disclosure of an amount or percentage which is
greater than the amount or percentage required to be disclosed
under this title does not in itself constitute a violation of
this title.
(bb) High-cost Mortgage.--
(1) Definition.--
(A) In general.--The term ``high-cost
mortgage'', and a mortgage referred to in this
subsection, means a consumer credit transaction
that is secured by the consumer's principal
dwelling, other than a reverse mortgage
transaction, if--
(i) in the case of a credit
transaction secured--
(I) by a first mortgage on
the consumer's principal
dwelling, the annual percentage
rate at consummation of the
transaction will exceed by more
than 6.5 percentage points (8.5
percentage points, if the
dwelling is personal property
and the transaction is for less
than $50,000) the average prime
offer rate, as defined in
section 129C(b)(2)(B), for a
comparable transaction; or
(II) by a subordinate or
junior mortgage on the
consumer's principal dwelling,
the annual percentage rate at
consummation of the transaction
will exceed by more than 8.5
percentage points the average
prime offer rate, as defined in
section 129C(b)(2)(B), for a
comparable transaction;
(ii) the total points and fees
payable in connection with the
transaction, other than bona fide third
party charges not retained by the
mortgage originator, creditor, or an
affiliate of the creditor or mortgage
originator, exceed--
(I) in the case of a
transaction for $20,000 or
more, 5 percent of the total
transaction amount; or
(II) in the case of a
transaction for less than
$20,000, the lesser of 8
percent of the total
transaction amount or $1,000
(or such other dollar amount as
the Bureau shall prescribe by
regulation); or
(iii) the credit transaction
documents permit the creditor to charge
or collect prepayment fees or penalties
more than 36 months after the
transaction closing or such fees or
penalties exceed, in the aggregate,
more than 2 percent of the amount
prepaid.
(B) Introductory rates taken into account.--
For purposes of subparagraph (A)(i), the annual
percentage rate of interest shall be determined
based on the following interest rate:
(i) In the case of a fixed-rate
transaction in which the annual
percentage rate will not vary during
the term of the loan, the interest rate
in effect on the date of consummation
of the transaction.
(ii) In the case of a transaction in
which the rate of interest varies
solely in accordance with an index, the
interest rate determined by adding the
index rate in effect on the date of
consummation of the transaction to the
maximum margin permitted at any time
during the loan agreement.
(iii) In the case of any other
transaction in which the rate may vary
at any time during the term of the loan
for any reason, the interest charged on
the transaction at the maximum rate
that may be charged during the term of
the loan.
(C) Mortgage insurance.--For the purposes of
computing the total points and fees under
paragraph (4), the total points and fees shall
exclude--
(i) any premium provided by an agency
of the Federal Government or an agency
of a State;
(ii) any amount that is not in excess
of the amount payable under policies in
effect at the time of origination under
section 203(c)(2)(A) of the National
Housing Act (12 U.S.C. 1709(c)(2)(A)),
provided that the premium, charge, or
fee is required to be refundable on a
pro-rated basis and the refund is
automatically issued upon notification
of the satisfaction of the underlying
mortgage loan; and
(iii) any premium paid by the
consumer after closing.
(2)(A) After the 2-year period beginning on the effective
date of the regulations promulgated under section 155 of the
Riegle Community Development and Regulatory Improvement Act of
1994, and no more frequently than biennially after the first
increase or decrease under this subparagraph, the Bureau may by
regulation increase or decrease the number of percentage points
specified in paragraph (1)(A), if the Bureau determines that
the increase or decrease is--
(i) consistent with the consumer protections against
abusive lending provided by the amendments made by
subtitle B of title I of the Riegle Community
Development and Regulatory Improvement Act of 1994; and
(ii) warranted by the need for credit.
(B) An increase or decrease under subparagraph (A)--
(i) may not result in the number of
percentage points referred to in paragraph
(1)(A)(i)(I) being less than 6 percentage
points or greater than 10 percentage points;
and
(ii) may not result in the number of
percentage points referred to in paragraph
(1)(A)(i)(II) being less than 8 percentage
points or greater than 12 percentage points.
(C) In determining whether to increase or decrease the number
of percentage points referred to in subparagraph (A), the
Bureau shall consult with representatives of consumers,
including low-income consumers, and lenders.
(3) The amount specified in paragraph (1)(B)(ii) shall be
adjusted annually on January 1 by the annual percentage change
in the Consumer Price Index, as reported on June 1 of the year
preceding such adjustment.
(4) For purposes of [paragraph (1)(B)] paragraph (1)(A) and
section 129C, points and fees shall include--
(A) all items included in the finance charge, except
interest or the time-price differential;
(B) all compensation paid directly or indirectly by a
consumer or creditor to a mortgage originator from any
source, including a mortgage originator that is also
the creditor in a table-funded transaction;
(C) each of the charges listed in section 106(e)
(except an escrow for future payment of taxes and
insurance), unless--
(i) the charge is reasonable;
(ii) the creditor receives no direct or
indirect compensation, except as retained by a
creditor or its affiliate as a result of their
participation in an affiliated business
arrangement (as defined in section 2(7) of the
Real Estate Settlement Procedures Act of 1974
(12 U.S.C. 2602(7)); and
[(iii) the charge is paid to a third party
unaffiliated with the creditor; and]
(iii) the charge is--
(I) a bona fide third-party charge
not retained by the mortgage
originator, creditor, or an affiliate
of the creditor or mortgage originator;
or
(II) a charge set forth in section
106(e)(1);
(D) premiums or other charges payable at or before
closing for any credit life, credit disability, credit
unemployment, or credit property insurance, or any
other [accident,] loss-of-income, life or health
insurance, [or any payments] and any payments directly
or indirectly for any debt cancellation or suspension
agreement or contract, except that insurance premiums
or debt cancellation or suspension fees calculated and
paid in full on a monthly basis shall not be considered
financed by the creditor;
(E) the maximum prepayment fees and penalties which
may be charged or collected under the terms of the
credit transaction;
(F) all prepayment fees or penalties that are
incurred by the consumer if the loan refinances a
previous loan made or currently held by the same
creditor or an affiliate of the creditor; and
(G) such other charges as the Bureau determines to be
appropriate.
(5) Calculation of points and fees for open-end
consumer credit plans.--In the case of open-end
consumer credit plans, points and fees shall be
calculated, for purposes of this section and section
129, by adding the total points and fees known at or
before closing, including the maximum prepayment
penalties which may be charged or collected under the
terms of the credit transaction, plus the minimum
additional fees the consumer would be required to pay
to draw down an amount equal to the total credit line.
(6) This subsection shall not be construed to limit the rate
of interest or the finance charge that a person may charge a
consumer for any extension of credit.
(cc) The term ``reverse mortgage transaction'' means a
nonrecourse transaction in which a mortgage, deed of trust, or
equivalent consensual security interest is created against the
consumer's principal dwelling--
(1) securing one or more advances; and
(2) with respect to which the payment of any
principal, interest, and shared appreciation or equity
is due and payable (other than in the case of default)
only after--
(A) the transfer of the dwelling;
(B) the consumer ceases to occupy the
dwelling as a principal dwelling; or
(C) the death of the consumer.
(cc) Definitions Relating to Mortgage Origination and
Residential Mortgage Loans.--
(1) Commission.--Unless otherwise specified, the term
``Commission'' means the Federal Trade Commission.
(2) Mortgage originator.--The term ``mortgage
originator''--
(A) means any person who, for direct or
indirect compensation or gain, or in the
expectation of direct or indirect compensation
or gain--
(i) takes a residential mortgage loan
application;
(ii) assists a consumer in obtaining
or applying to obtain a residential
mortgage loan; or
(iii) offers or negotiates terms of a
residential mortgage loan;
(B) includes any person who represents to the
public, through advertising or other means of
communicating or providing information
(including the use of business cards,
stationery, brochures, signs, rate lists, or
other promotional items), that such person can
or will provide any of the services or perform
any of the activities described in subparagraph
(A);
(C) does not include any person who is (i)
not otherwise described in subparagraph (A) or
(B) and who performs purely administrative or
clerical tasks on behalf of a person who is
described in any such subparagraph, or (ii) an
employee of a retailer of manufactured homes
who is not described in clause (i) or (iii) of
subparagraph (A) and who does not advise a
consumer on loan terms (including rates, fees,
and other costs);
(D) does not include a person or entity that
only performs real estate brokerage activities
and is licensed or registered in accordance
with applicable State law, unless such person
or entity is compensated by a lender, a
mortgage broker, or other mortgage originator
or by any agent of such lender, mortgage
broker, or other mortgage originator;
(E) does not include, with respect to a
residential mortgage loan, a person, estate, or
trust that provides mortgage financing for the
sale of 3 properties in any 12-month period to
purchasers of such properties, each of which is
owned by such person, estate, or trust and
serves as security for the loan, provided that
such loan--
(i) is not made by a person, estate,
or trust that has constructed, or acted
as a contractor for the construction
of, a residence on the property in the
ordinary course of business of such
person, estate, or trust;
(ii) is fully amortizing;
(iii) is with respect to a sale for
which the seller determines in good
faith and documents that the buyer has
a reasonable ability to repay the loan;
(iv) has a fixed rate or an
adjustable rate that is adjustable
after 5 or more years, subject to
reasonable annual and lifetime
limitations on interest rate increases;
and
(v) meets any other criteria the
Bureau may prescribe;
(F) does not include the creditor (except the
creditor in a table-funded transaction) under
paragraph (1), (2), or (4) of section 129B(c);
and
(G) does not include a servicer or servicer
employees, agents and contractors, including
but not limited to those who offer or negotiate
terms of a residential mortgage loan for
purposes of renegotiating, modifying, replacing
and subordinating principal of existing
mortgages where borrowers are behind in their
payments, in default or have a reasonable
likelihood of being in default or falling
behind.
(3) Nationwide mortgage licensing system and
registry.--The term ``Nationwide Mortgage Licensing
System and Registry'' has the same meaning as in the
Secure and Fair Enforcement for Mortgage Licensing Act
of 2008.
(4) Other definitions relating to mortgage
originator.--For purposes of this subsection, a person
``assists a consumer in obtaining or applying to obtain
a residential mortgage loan'' by, among other things,
advising on residential mortgage loan terms (including
rates, fees, and other costs), preparing residential
mortgage loan packages, or collecting information on
behalf of the consumer with regard to a residential
mortgage loan.
(5) Residential mortgage loan.--The term
``residential mortgage loan'' means any consumer credit
transaction that is secured by a mortgage, deed of
trust, or other equivalent consensual security interest
on a dwelling or on residential real property that
includes a dwelling, other than a consumer credit
transaction under an open end credit plan or, for
purposes of sections 129B and 129C and section 128(a)
(16), (17), (18), and (19), and sections 128(f) and
130(k), and any regulations promulgated thereunder, an
extension of credit relating to a plan described in
section 101(53D) of title 11, United States Code.
(6) Secretary.--The term ``Secretary'', when used in
connection with any transaction or person involved with
a residential mortgage loan, means the Secretary of
Housing and Urban Development.
(7) Servicer.--The term ``servicer'' has the same
meaning as in section 6(i)(2) of the Real Estate
Settlement Procedures Act of 1974 (12 U.S.C.
2605(i)(2)).
(dd) Bona Fide Discount Points and Prepayment Penalties.--For
the purposes of determining the amount of points and fees for
purposes of subsection (aa), either the amounts described in
paragraph (1) or (2) of the following paragraphs, but not both,
shall be excluded:
(1) Up to and including 2 bona fide discount points
payable by the consumer in connection with the
mortgage, but only if the interest rate from which the
mortgage's interest rate will be discounted does not
exceed by more than 1 percentage point--
(A) the average prime offer rate, as defined
in section 129C; or
(B) if secured by a personal property loan,
the average rate on a loan in connection with
which insurance is provided under title I of
the National Housing Act (12 U.S.C. 1702 et
seq.).
(2) Unless 2 bona fide discount points have been
excluded under paragraph (1), up to and including 1
bona fide discount point payable by the consumer in
connection with the mortgage, but only if the interest
rate from which the mortgage's interest rate will be
discounted does not exceed by more than 2 percentage
points--
(A) the average prime offer rate, as defined
in section 129C; or
(B) if secured by a personal property loan,
the average rate on a loan in connection with
which insurance is provided under title I of
the National Housing Act (12 U.S.C. 1702 et
seq.).
(3) For purposes of paragraph (1), the term ``bona
fide discount points'' means loan discount points which
are knowingly paid by the consumer for the purpose of
reducing, and which in fact result in a bona fide
reduction of, the interest rate or time-price
differential applicable to the mortgage.
(4) Paragraphs (1) and (2) shall not apply to
discount points used to purchase an interest rate
reduction unless the amount of the interest rate
reduction purchased is reasonably consistent with
established industry norms and practices for secondary
mortgage market transactions.
* * * * * * *
CHAPTER 2--CREDIT TRANSACTIONS
* * * * * * *
Sec. 129C. Minimum standards for residential mortgage loans
(a) Ability To Repay.--
(1) In general.--In accordance with regulations
prescribed by the Board, no creditor may make a
residential mortgage loan unless the creditor makes a
reasonable and good faith determination based on
verified and documented information that, at the time
the loan is consummated, the consumer has a reasonable
ability to repay the loan, according to its terms, and
all applicable taxes, insurance (including mortgage
guarantee insurance), and assessments.
(2) Multiple loans.--If the creditor knows, or has
reason to know, that 1 or more residential mortgage
loans secured by the same dwelling will be made to the
same consumer, the creditor shall make a reasonable and
good faith determination, based on verified and
documented information, that the consumer has a
reasonable ability to repay the combined payments of
all loans on the same dwelling according to the terms
of those loans and all applicable taxes, insurance
(including mortgage guarantee insurance), and
assessments.
(3) Basis for determination.--A determination under
this subsection of a consumer's ability to repay a
residential mortgage loan shall include consideration
of the consumer's credit history, current income,
expected income the consumer is reasonably assured of
receiving, current obligations, debt-to-income ratio or
the residual income the consumer will have after paying
non-mortgage debt and mortgage-related obligations,
employment status, and other financial resources other
than the consumer's equity in the dwelling or real
property that secures repayment of the loan. A creditor
shall determine the ability of the consumer to repay
using a payment schedule that fully amortizes the loan
over the term of the loan.
(4) Income verification.--A creditor making a
residential mortgage loan shall verify amounts of
income or assets that such creditor relies on to
determine repayment ability, including expected income
or assets, by reviewing the consumer's Internal Revenue
Service Form W-2, tax returns, payroll receipts,
financial institution records, or other third-party
documents that provide reasonably reliable evidence of
the consumer's income or assets. In order to safeguard
against fraudulent reporting, any consideration of a
consumer's income history in making a determination
under this subsection shall include the verification of
such income by the use of--
(A) Internal Revenue Service transcripts of
tax returns; or
(B) a method that quickly and effectively
verifies income documentation by a third party
subject to rules prescribed by the Board.
(5) Exemption.--With respect to loans made,
guaranteed, or insured by Federal departments or
agencies identified in subsection (b)(3)(B)(ii), such
departments or agencies may exempt refinancings under a
streamlined refinancing from this income verification
requirement as long as the following conditions are
met:
(A) The consumer is not 30 days or more past
due on the prior existing residential mortgage
loan.
(B) The refinancing does not increase the
principal balance outstanding on the prior
existing residential mortgage loan, except to
the extent of fees and charges allowed by the
department or agency making, guaranteeing, or
insuring the refinancing.
(C) Total points and fees (as defined in
section [103(aa)(4), other than bona fide third
party charges not retained by the mortgage
originator, creditor, or an affiliate of the
creditor or mortgage originator] 103(bb)(4))
payable in connection with the refinancing do
not exceed 3 percent of the total new loan
amount.
(D) The interest rate on the refinanced loan
is lower than the interest rate of the original
loan, unless the borrower is refinancing from
an adjustable rate to a fixed-rate loan, under
guidelines that the department or agency shall
establish for loans they make, guarantee, or
issue.
(E) The refinancing is subject to a payment
schedule that will fully amortize the
refinancing in accordance with the regulations
prescribed by the department or agency making,
guaranteeing, or insuring the refinancing.
(F) The terms of the refinancing do not
result in a balloon payment, as defined in
subsection (b)(2)(A)(ii).
(G) Both the residential mortgage loan being
refinanced and the refinancing satisfy all
requirements of the department or agency
making, guaranteeing, or insuring the
refinancing.
(6) Nonstandard loans.--
(A) Variable rate loans that defer repayment
of any principal or interest.--For purposes of
determining, under this subsection, a
consumer's ability to repay a variable rate
residential mortgage loan that allows or
requires the consumer to defer the repayment of
any principal or interest, the creditor shall
use a fully amortizing repayment schedule.
(B) Interest-only loans.--For purposes of
determining, under this subsection, a
consumer's ability to repay a residential
mortgage loan that permits or requires the
payment of interest only, the creditor shall
use the payment amount required to amortize the
loan by its final maturity.
(C) Calculation for negative amortization.--
In making any determination under this
subsection, a creditor shall also take into
consideration any balance increase that may
accrue from any negative amortization
provision.
(D) Calculation process.--For purposes of
making any determination under this subsection,
a creditor shall calculate the monthly payment
amount for principal and interest on any
residential mortgage loan by assuming--
(i) the loan proceeds are fully
disbursed on the date of the
consummation of the loan;
(ii) the loan is to be repaid in
substantially equal monthly amortizing
payments for principal and interest
over the entire term of the loan with
no balloon payment, unless the loan
contract requires more rapid repayment
(including balloon payment), in which
case the calculation shall be made (I)
in accordance with regulations
prescribed by the Board, with respect
to any loan which has an annual
percentage rate that does not exceed
the average prime offer rate for a
comparable transaction, as of the date
the interest rate is set, by 1.5 or
more percentage points for a first lien
residential mortgage loan; and by 3.5
or more percentage points for a
subordinate lien residential mortgage
loan; or (II) using the contract's
repayment schedule, with respect to a
loan which has an annual percentage
rate, as of the date the interest rate
is set, that is at least 1.5 percentage
points above the average prime offer
rate for a first lien residential
mortgage loan; and 3.5 percentage
points above the average prime offer
rate for a subordinate lien residential
mortgage loan; and
(iii) the interest rate over the
entire term of the loan is a fixed rate
equal to the fully indexed rate at the
time of the loan closing, without
considering the introductory rate.
(E) Refinance of hybrid loans with current
lender.--In considering any application for
refinancing an existing hybrid loan by the
creditor into a standard loan to be made by the
same creditor in any case in which there would
be a reduction in monthly payment and the
mortgagor has not been delinquent on any
payment on the existing hybrid loan, the
creditor may--
(i) consider the mortgagor's good
standing on the existing mortgage;
(ii) consider if the extension of new
credit would prevent a likely default
should the original mortgage reset and
give such concerns a higher priority as
an acceptable underwriting practice;
and
(iii) offer rate discounts and other
favorable terms to such mortgagor that
would be available to new customers
with high credit ratings based on such
underwriting practice.
(7) Fully-indexed rate defined.--For purposes of this
subsection, the term ``fully indexed rate'' means the
index rate prevailing on a residential mortgage loan at
the time the loan is made plus the margin that will
apply after the expiration of any introductory interest
rates.
(8) Reverse mortgages and bridge loans.--This
subsection shall not apply with respect to any reverse
mortgage or temporary or bridge loan with a term of 12
months or less, including to any loan to purchase a new
dwelling where the consumer plans to sell a different
dwelling within 12 months.
(9) Seasonal income.--If documented income, including
income from a small business, is a repayment source for
a residential mortgage loan, a creditor may consider
the seasonality and irregularity of such income in the
underwriting of and scheduling of payments for such
credit.
(b) Presumption of Ability To Repay.--
(1) In general.--Any creditor with respect to any
residential mortgage loan, and any assignee of such
loan subject to liability under this title, may presume
that the loan has met the requirements of subsection
(a), if the loan is a qualified mortgage.
(2) Definitions.--For purposes of this subsection,
the following definitions shall apply:
(A) Qualified mortgage.--The term ``qualified
mortgage'' means any residential mortgage
loan--
(i) for which the regular periodic
payments for the loan may not--
(I) result in an increase of
the principal balance; or
(II) except as provided in
subparagraph (E), allow the
consumer to defer repayment of
principal;
(ii) except as provided in
subparagraph (E), the terms of which do
not result in a balloon payment, where
a ``balloon payment'' is a scheduled
payment that is more than twice as
large as the average of earlier
scheduled payments;
(iii) for which the income and
financial resources relied upon to
qualify the obligors on the loan are
verified and documented;
(iv) in the case of a fixed rate
loan, for which the underwriting
process is based on a payment schedule
that fully amortizes the loan over the
loan term and takes into account all
applicable taxes, insurance, and
assessments;
(v) in the case of an adjustable rate
loan, for which the underwriting is
based on the maximum rate permitted
under the loan during the first 5
years, and a payment schedule that
fully amortizes the loan over the loan
term and takes into account all
applicable taxes, insurance, and
assessments;
(vi) that complies with any
guidelines or regulations established
by the Board relating to ratios of
total monthly debt to monthly income or
alternative measures of ability to pay
regular expenses after payment of total
monthly debt, taking into account the
income levels of the borrower and such
other factors as the Board may
determine relevant and consistent with
the purposes described in paragraph
(3)(B)(i);
(vii) for which the total points and
fees (as defined in subparagraph (C))
payable in connection with the loan do
not exceed 3 percent of the total loan
amount;
(viii) for which the term of the loan
does not exceed 30 years, except as
such term may be extended under
paragraph (3), such as in high-cost
areas; and
(ix) in the case of a reverse
mortgage (except for the purposes of
subsection (a) of section 129C, to the
extent that such mortgages are exempt
altogether from those requirements), a
reverse mortgage which meets the
standards for a qualified mortgage, as
set by the Board in rules that are
consistent with the purposes of this
subsection.
(B) Average prime offer rate.--The term
``average prime offer rate'' means the average
prime offer rate for a comparable transaction
as of the date on which the interest rate for
the transaction is set, as published by the
Board..
(C) Points and fees.--
(i) In general.--For purposes of
subparagraph (A), the term ``points and
fees'' means points and fees as defined
by section [103(aa)(4) (other than bona
fide third party charges not retained
by the mortgage originator, creditor,
or an affiliate of the creditor or
mortgage originator)] 103(bb)(4).
(ii) Computation.--For purposes of
computing the total points and fees
under this subparagraph, the total
points and fees shall exclude either of
the amounts described in the following
subclauses, but not both:
(I) Up to and including 2
bona fide discount points
payable by the consumer in
connection with the mortgage,
but only if the interest rate
from which the mortgage's
interest rate will be
discounted does not exceed by
more than 1 percentage point
the average prime offer rate.
(II) Unless 2 bona fide
discount points have been
excluded under subclause (I),
up to and including 1 bona fide
discount point payable by the
consumer in connection with the
mortgage, but only if the
interest rate from which the
mortgage's interest rate will
be discounted does not exceed
by more than 2 percentage
points the average prime offer
rate.
(iii) Bona fide discount points
defined.--For purposes of clause (ii),
the term ``bona fide discount points''
means loan discount points which are
knowingly paid by the consumer for the
purpose of reducing, and which in fact
result in a bona fide reduction of, the
interest rate or time-price
differential applicable to the
mortgage.
(iv) Interest rate reduction.--
Subclauses (I) and (II) of clause (ii)
shall not apply to discount points used
to purchase an interest rate reduction
unless the amount of the interest rate
reduction purchased is reasonably
consistent with established industry
norms and practices for secondary
mortgage market transactions.
(D) Smaller loans.--The Board shall prescribe
rules adjusting the criteria under subparagraph
(A)(vii) in order to permit lenders that extend
smaller loans to meet the requirements of the
presumption of compliance under paragraph (1).
In prescribing such rules, the Board shall
consider the potential impact of such rules on
rural areas and other areas where home values
are lower.
(E) Balloon loans.--The Board may, by
regulation, provide that the term ``qualified
mortgage'' includes a balloon loan--
(i) that meets all of the criteria
for a qualified mortgage under
subparagraph (A) (except clauses
(i)(II), (ii), (iv), and (v) of such
subparagraph);
(ii) for which the creditor makes a
determination that the consumer is able
to make all scheduled payments, except
the balloon payment, out of income or
assets other than the collateral;
(iii) for which the underwriting is
based on a payment schedule that fully
amortizes the loan over a period of not
more than 30 years and takes into
account all applicable taxes,
insurance, and assessments; and
(iv) that is extended by a creditor
that--
(I) operates in rural or
underserved areas;
(II) together with all
affiliates, has total annual
residential mortgage loan
originations that do not exceed
a limit set by the Board;
(III) retains the balloon
loans in portfolio; and
(IV) meets any asset size
threshold and any other
criteria as the Board may
establish, consistent with the
purposes of this subtitle.
(3) Regulations.--
(A) In general.--The Board shall prescribe
regulations to carry out the purposes of this
subsection.
(B) Revision of safe harbor criteria.--
(i) In general.--The Board may
prescribe regulations that revise, add
to, or subtract from the criteria that
define a qualified mortgage upon a
finding that such regulations are
necessary or proper to ensure that
responsible, affordable mortgage credit
remains available to consumers in a
manner consistent with the purposes of
this section, necessary and appropriate
to effectuate the purposes of this
section and section 129B, to prevent
circumvention or evasion thereof, or to
facilitate compliance with such
sections.
(ii) Loan definition.--The following
agencies shall, in consultation with
the Board, prescribe rules defining the
types of loans they insure, guarantee,
or administer, as the case may be, that
are qualified mortgages for purposes of
paragraph (2)(A), and such rules may
revise, add to, or subtract from the
criteria used to define a qualified
mortgage under paragraph (2)(A), upon a
finding that such rules are consistent
with the purposes of this section and
section 129B, to prevent circumvention
or evasion thereof, or to facilitate
compliance with such sections:
(I) The Department of Housing
and Urban Development, with
regard to mortgages insured
under the National Housing Act
(12 U.S.C. 1707 et seq.).
(II) The Department of
Veterans Affairs, with regard
to a loan made or guaranteed by
the Secretary of Veterans
Affairs.
(III) The Department of
Agriculture, with regard loans
guaranteed by the Secretary of
Agriculture pursuant to 42
U.S.C. 1472(h).
(IV) The Rural Housing
Service, with regard to loans
insured by the Rural Housing
Service.
(c) Prohibition on Certain Prepayment Penalties.--
(1) Prohibited on certain loans.--
(A) In general.--A residential mortgage loan
that is not a ``qualified mortgage'', as
defined under subsection (b)(2), may not
contain terms under which a consumer must pay a
prepayment penalty for paying all or part of
the principal after the loan is consummated.
(B) Exclusions.--For purposes of this
subsection, a ``qualified mortgage'' may not
include a residential mortgage loan that--
(i) has an adjustable rate; or
(ii) has an annual percentage rate
that exceeds the average prime offer
rate for a comparable transaction, as
of the date the interest rate is set--
(I) by 1.5 or more percentage
points, in the case of a first
lien residential mortgage loan
having a original principal
obligation amount that is equal
to or less than the amount of
the maximum limitation on the
original principal obligation
of mortgage in effect for a
residence of the applicable
size, as of the date of such
interest rate set, pursuant to
the 6th sentence of section
305(a)(2) the Federal Home Loan
Mortgage Corporation Act (12
U.S.C. 1454(a)(2));
(II) by 2.5 or more
percentage points, in the case
of a first lien residential
mortgage loan having a original
principal obligation amount
that is more than the amount of
the maximum limitation on the
original principal obligation
of mortgage in effect for a
residence of the applicable
size, as of the date of such
interest rate set, pursuant to
the 6th sentence of section
305(a)(2) the Federal Home Loan
Mortgage Corporation Act (12
U.S.C. 1454(a)(2)); and
(III) by 3.5 or more
percentage points, in the case
of a subordinate lien
residential mortgage loan.
(2) Publication of average prime offer rate and apr
thresholds.--The Board--
(A) shall publish, and update at least
weekly, average prime offer rates;
(B) may publish multiple rates based on
varying types of mortgage transactions; and
(C) shall adjust the thresholds established
under subclause (I), (II), and (III) of
paragraph (1)(B)(ii) as necessary to reflect
significant changes in market conditions and to
effectuate the purposes of the Mortgage Reform
and Anti-Predatory Lending Act.
(3) Phased-out penalties on qualified mortgages.--A
qualified mortgage (as defined in subsection (b)(2))
may not contain terms under which a consumer must pay a
prepayment penalty for paying all or part of the
principal after the loan is consummated in excess of
the following limitations:
(A) During the 1-year period beginning on the
date the loan is consummated, the prepayment
penalty shall not exceed an amount equal to 3
percent of the outstanding balance on the loan.
(B) During the 1-year period beginning after
the period described in subparagraph (A), the
prepayment penalty shall not exceed an amount
equal to 2 percent of the outstanding balance
on the loan.
(C) During the 1-year period beginning after
the 1-year period described in subparagraph
(B), the prepayment penalty shall not exceed an
amount equal to 1 percent of the outstanding
balance on the loan.
(D) After the end of the 3-year period
beginning on the date the loan is consummated,
no prepayment penalty may be imposed on a
qualified mortgage.
(4) Option for no prepayment penalty required.--A
creditor may not offer a consumer a residential
mortgage loan product that has a prepayment penalty for
paying all or part of the principal after the loan is
consummated as a term of the loan without offering the
consumer a residential mortgage loan product that does
not have a prepayment penalty as a term of the loan.
(d) Single Premium Credit Insurance Prohibited.--No creditor
may finance, directly or indirectly, in connection with any
residential mortgage loan or with any extension of credit under
an open end consumer credit plan secured by the principal
dwelling of the consumer, any credit life, credit disability,
credit unemployment, or credit property insurance, or any other
accident, loss-of-income, life, or health insurance, or any
payments directly or indirectly for any debt cancellation or
suspension agreement or contract, except that--
(1) insurance premiums or debt cancellation or
suspension fees calculated and paid in full on a
monthly basis shall not be considered financed by the
creditor; and
(2) this subsection shall not apply to credit
unemployment insurance for which the unemployment
insurance premiums are reasonable, the creditor
receives no direct or indirect compensation in
connection with the unemployment insurance premiums,
and the unemployment insurance premiums are paid
pursuant to another insurance contract and not paid to
an affiliate of the creditor.
(e) Arbitration.--
(1) In general.--No residential mortgage loan and no
extension of credit under an open end consumer credit
plan secured by the principal dwelling of the consumer
may include terms which require arbitration or any
other nonjudicial procedure as the method for resolving
any controversy or settling any claims arising out of
the transaction.
(2) Post-controversy agreements.--Subject to
paragraph (3), paragraph (1) shall not be construed as
limiting the right of the consumer and the creditor or
any assignee to agree to arbitration or any other
nonjudicial procedure as the method for resolving any
controversy at any time after a dispute or claim under
the transaction arises.
(3) No waiver of statutory cause of action.--No
provision of any residential mortgage loan or of any
extension of credit under an open end consumer credit
plan secured by the principal dwelling of the consumer,
and no other agreement between the consumer and the
creditor relating to the residential mortgage loan or
extension of credit referred to in paragraph (1), shall
be applied or interpreted so as to bar a consumer from
bringing an action in an appropriate district court of
the United States, or any other court of competent
jurisdiction, pursuant to section 130 or any other
provision of law, for damages or other relief in
connection with any alleged violation of this section,
any other provision of this title, or any other Federal
law.
(f) Mortgages With Negative Amortization.--No creditor may
extend credit to a borrower in connection with a consumer
credit transaction under an open or closed end consumer credit
plan secured by a dwelling or residential real property that
includes a dwelling, other than a reverse mortgage, that
provides or permits a payment plan that may, at any time over
the term of the extension of credit, result in negative
amortization unless, before such transaction is consummated--
(1) the creditor provides the consumer with a
statement that--
(A) the pending transaction will or may, as
the case may be, result in negative
amortization;
(B) describes negative amortization in such
manner as the Board shall prescribe;
(C) negative amortization increases the
outstanding principal balance of the account;
and
(D) negative amortization reduces the
consumer's equity in the dwelling or real
property; and
(2) in the case of a first-time borrower with respect
to a residential mortgage loan that is not a qualified
mortgage, the first-time borrower provides the creditor
with sufficient documentation to demonstrate that the
consumer received homeownership counseling from
organizations or counselors certified by the Secretary
of Housing and Urban Development as competent to
provide such counseling.
(g) Protection Against Loss of Anti-deficiency Protection.--
(1) Definition.--For purposes of this subsection, the
term ``anti-deficiency law'' means the law of any State
which provides that, in the event of foreclosure on the
residential property of a consumer securing a mortgage,
the consumer is not liable, in accordance with the
terms and limitations of such State law, for any
deficiency between the sale price obtained on such
property through foreclosure and the outstanding
balance of the mortgage.
(2) Notice at time of consummation.--In the case of
any residential mortgage loan that is, or upon
consummation will be, subject to protection under an
anti-deficiency law, the creditor or mortgage
originator shall provide a written notice to the
consumer describing the protection provided by the
anti-deficiency law and the significance for the
consumer of the loss of such protection before such
loan is consummated.
(3) Notice before refinancing that would cause loss
of protection.--In the case of any residential mortgage
loan that is subject to protection under an anti-
deficiency law, if a creditor or mortgage originator
provides an application to a consumer, or receives an
application from a consumer, for any type of
refinancing for such loan that would cause the loan to
lose the protection of such anti-deficiency law, the
creditor or mortgage originator shall provide a written
notice to the consumer describing the protection
provided by the anti-deficiency law and the
significance for the consumer of the loss of such
protection before any agreement for any such
refinancing is consummated.
(h) Policy Regarding Acceptance of Partial Payment.--In the
case of any residential mortgage loan, a creditor shall
disclose prior to settlement or, in the case of a person
becoming a creditor with respect to an existing residential
mortgage loan, at the time such person becomes a creditor--
(1) the creditor's policy regarding the acceptance of
partial payments; and
(2) if partial payments are accepted, how such
payments will be applied to such mortgage and if such
payments will be placed in escrow.
(i) Timeshare Plans.--This section and any regulations
promulgated under this section do not apply to an extension of
credit relating to a plan described in section 101(53D) of
title 11, United States Code.
* * * * * * *
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SECURITIES ACT OF 1933
TITLE I--
* * * * * * *
definitions
Sec. 2. (a) Definitions.--When used in this title, unless the
context otherwise requires--
(1) The term ``security'' means any note, stock,
treasury stock, security future, security-based swap,
bond, debenture, evidence of indebtedness, certificate
of interest or participation in any profit-sharing
agreement, collateral-trust certificate,
preorganization certificate or subscription,
transferable share, investment contract, voting-trust
certificate, certificate of deposit for a security,
fractional undivided interest in oil, gas, or other
mineral rights, any put, call, straddle, option, or
privilege on any security, certificate of deposit, or
group or index of securities (including any interest
therein or based on the value thereof), or any put,
call, straddle, option, or privilege entered into on a
national securities exchange relating to foreign
currency, or, in general, any interest or instrument
commonly known as a ``security'', or any certificate of
interest or participation in, temporary or interim
certificate for, receipt for, guarantee of, or warrant
or right to subscribe to or purchase, any of the
foregoing.
(2) The term ``person'' means an individual, a
corporation, a partnership, an association, a joint-
stock company, a trust, any unincorporated
organization, or a government or political subdivision
thereof. As used in this paragraph the term ``trust''
shall include only a trust where the interest or
interests of the beneficiary or beneficiaries are
evidenced by a security.
(3) The term ``sale'' or ``sell'' shall include every
contract of sale or disposition of a security or
interest in a security, for value. The term ``offer to
sell'', ``offer for sale'', or ``offer'' shall include
every attempt or offer to dispose of, or solicitation
of an offer to buy, a security or interest in a
security, for value. The terms defined in this
paragraph and the term ``offer to buy'' as used in
subsection (c) of section 5 shall not include
preliminary negotiations or agreements between an
issuer (or any person directly or indirectly
controlling or controlled by an issuer, or under direct
or indirect common control with an issuer) and any
underwriter or among underwriters who are or are to be
in privity of contract with an issuer (or any person
directly or indirectly controlling or controlled by an
issuer, or under direct or indirect common control with
an issuer). Any security given or delivered with, or as
a bonus on account of, any purchase of securities or
any other thing, shall be conclusively presumed to
constitute a part of the subject of such purchase and
to have been offered and sold for value. The issue or
transfer of a right or privilege, when originally
issued or transferred with a security, giving the
holder of such security the right to convert such
security into another security of the same issuer or of
another person, or giving a right to subscribe to
another security of the same issuer or of another
person, which right cannot be exercised until some
future date, shall not be deemed to be an offer or sale
of such other security; but the issue or transfer of
such other security upon the exercise of such right of
conversion or subscription shall be deemed a sale of
such other security. Any offer or sale of a security
futures product by or on behalf of the issuer of the
securities underlying the security futures product, an
affiliate of the issuer, or an underwriter, shall
constitute a contract for sale of, sale of, offer for
sale, or offer to sell the underlying securities. Any
offer or sale of a security-based swap by or on behalf
of the issuer of the securities upon which such
security-based swap is based or is referenced, an
affiliate of the issuer, or an underwriter, shall
constitute a contract for sale of, sale of, offer for
sale, or offer to sell such securities. The publication
or distribution by a broker or dealer of a research
report about an emerging growth company that is the
subject of a proposed public offering of the common
equity securities of such emerging growth company
pursuant to a registration statement that the issuer
proposes to file, or has filed, or that is effective
shall be deemed for purposes of paragraph (10) of this
subsection and section 5(c) not to constitute an offer
for sale or offer to sell a security, even if the
broker or dealer is participating or will participate
in the registered offering of the securities of the
issuer. As used in this paragraph, the term ``research
report'' means a written, electronic, or oral
communication that includes information, opinions, or
recommendations with respect to securities of an issuer
or an analysis of a security or an issuer, whether or
not it provides information reasonably sufficient upon
which to base an investment decision.
(4) The term ``issuer'' means every person who issues
or proposes to issue any security; except that with
respect to certificates of deposit, voting-trust
certificates, or collateral-trust certificates, or with
respect to certificates of interest or shares in an
unincorporated investment trust not having a board of
directors (or persons performing similar functions) or
of the fixed, restricted management, or unit type, the
term ``issuer'' means the person or persons performing
the acts and assuming the duties of depositor or
manager pursuant to the provisions of the trust or
other agreement or instrument under which such
securities are issued; except that in the case of an
unincorporated association which provides by its
articles for limited liability of any or all of its
members, or in the case of a trust, committee, or other
legal entity, the trustees or members thereof shall not
be individually liable as issuers of any security
issued by the association, trust, committee, or other
legal entity; except that with respect to equipment-
trust certificates or like securities, the term
``issuer'' means the person by whom the equipment or
property is or is to be used; and except that with
respect to fractional undivided interests in oil, gas,
or other mineral rights, the term ``issuer'' means the
owner of any such right or of any interest in such
right (whether whole or fractional) who creates
fractional interests therein for the purpose of public
offering.
(5) The term ``Commission'' means the Securities and
Exchange Commission.
(6) The term ``Territory'' means Puerto Rico, the
Virgin Islands, and the insular possessions of the
United States.
(7) The term ``interstate commerce'' means trade or
commerce in securities or any transportation or
communication relating thereto among the several States
or between the District of Columbia or any Territory of
the United States and any State or other Territory, or
between any foreign country and any State, Territory,
or the District of Columbia, or within the District of
Columbia.
(8) The term ``registration statement'' means the
statement provided for in section 6, and includes any
amendment thereto and any report, document, or
memorandum filed as part of such statement or
incorporated therein by reference.
(9) The term ``write'' or ``written'' shall include
printed, lithographed, or any means of graphic
communication.
(10) The term ``prospectus'' means any prospectus,
notice, circular, advertisement, letter, or
communication, written or by radio or television, which
offers any security for sale or confirms the sale of
any security; except that (a) a communication sent or
given after the effective date of the registration
statement (other than a prospectus permitted under
subsection (b) of section 10) shall not be deemed a
prospectus if it is proved that prior to or at the same
time with such communication a written prospectus
meeting the requirements of subsection (a) of section
10 at the time of such communication was sent or given
to the person to whom the communication was made, and
(b) a notice, circular, advertisement, letter, or
communication in respect of a security shall not be
deemed to be a prospectus if it states from whom a
written prospectus meeting the requirements of section
10 may be obtained and, in addition, does no more than
identify the security, state the price thereof, state
by whom orders will be executed, and contain such other
information as the Commission, by rules or regulations
deemed necessary or appropriate in the public interest
and for the protection of investors, and subject to
such terms and conditions as may be prescribed therein,
may permit.
(11) The term ``underwriter'' means any person who
has purchased from an issuer with a view to, or offers
or sells for an issuer in connection with, the
distribution of any security, or participates or has a
direct or indirect participation in any such
undertaking, or participates or has a participation in
the direct or indirect underwriting of any such
undertaking; but such term shall not include a person
whose interest is limited to a commission from an
underwriter or dealer not in excess of the usual and
customary distributors' or sellers' commission. As used
in this paragraph the term ``issuer'' shall include, in
addition to an issuer, any person directly or
indirectly controlling or controlled by the issuer, or
any person under direct or indirect common control with
the issuer.
(12) The term ``dealer'' means any person who engages
either for all or part of his time, directly or
indirectly, as agent, broker, or principal, in the
business of offering, buying, selling, or otherwise
dealing or trading in securities issued by another
person.
(13) The term ``insurance company'' means a company
which is organized as an insurance company, whose
primary and predominant business activity is the
writing of insurance or the reinsuring of risks
underwritten by insurance companies, and which is
subject to supervision by the insurance commissioner,
or a similar official or agency, of a State or
territory or the District of Columbia; or any receiver
or similar official or any liquidating agent for such
company, in his capacity as such.
(14) The term ``separate account'' means an account
established and maintained by an insurance company
pursuant to the laws of any State or territory of the
United States, the District of Columbia, or of Canada
or any province thereof, under which income, gains and
losses, whether or not realized, from assets allocated
to such account, are, in accordance with the applicable
contract, credited to or charged against such account
without regard to other income, gains, or losses of the
insurance company.
(15) The term ``accredited investor'' shall mean--
[(i)] (A) a bank as defined in section
3(a)(2) whether acting in its individual or
fiduciary capacity; an insurance company as
defined in paragraph (13) of this subsection;
an investment company registered under the
Investment Company Act of 1940 or a business
development company as defined in section
2(a)(48) of that Act; a Small Business
Investment Company licensed by the Small
Business Administration; or an employee benefit
plan, including an individual retirement
account, which is subject to the provisions of
the Employee Retirement Income Security Act of
1974, if the investment decision is made by a
plan fiduciary, as defined in section 3(21) of
such Act, which is either a bank, insurance
company, or registered investment adviser[; or]
;
(B) any natural person whose individual net worth, or
joint net worth with that person's spouse, exceeds
$1,000,000 (which amount, along with the amounts set
forth in subparagraph (C), shall be adjusted for
inflation by the Commission every 5 years to the
nearest $10,000 to reflect the change in the Consumer
Price Index for All Urban Consumers published by the
Bureau of Labor Statistics) where, for purposes of
calculating net worth under this subparagraph--
(i) the person's primary residence shall not
be included as an asset;
(ii) indebtedness that is secured by the
person's primary residence, up to the estimated
fair market value of the primary residence at
the time of the sale of securities, shall not
be included as a liability (except that if the
amount of such indebtedness outstanding at the
time of sale of securities exceeds the amount
outstanding 60 days before such time, other
than as a result of the acquisition of the
primary residence, the amount of such excess
shall be included as a liability); and
(iii) indebtedness that is secured by the
person's primary residence in excess of the
estimated fair market value of the primary
residence at the time of the sale of securities
shall be included as a liability;
(C) any natural person who had an individual income
in excess of $200,000 in each of the 2 most recent
years or joint income with that person's spouse in
excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same income
level in the current year;
(D) any natural person who is currently licensed or
registered as a broker or investment adviser by the
Commission, the Financial Industry Regulatory
Authority, or an equivalent self-regulatory
organization (as defined in section 3(a)(26) of the
Securities Exchange Act of 1934), or the securities
division of a State or the equivalent State division
responsible for licensing or registration of
individuals in connection with securities activities;
(E) any natural person the Commission determines, by
regulation, to have demonstrable education or job
experience to qualify such person as having
professional knowledge of a subject related to a
particular investment, and whose education or job
experience is verified by the Financial Industry
Regulatory Authority or an equivalent self-regulatory
organization (as defined in section 3(a)(26) of the
Securities Exchange Act of 1934); or
[(ii)] (F) any person who, on the basis of
such factors as financial sophistication, net
worth, knowledge, and experience in financial
matters, or amount of assets under management
qualifies as an accredited investor under rules
and regulations which the Commission shall
prescribe.
(16) The terms ``security future'', ``narrow-based
security index'', and ``security futures product'' have
the same meanings as provided in section 3(a)(55) of
the Securities Exchange Act of 1934.
(17) The terms ``swap'' and ``security-based swap''
have the same meanings as in section 1a of the
Commodity Exchange Act (7 U.S.C. 1a).
(18) The terms ``purchase'' or ``sale'' of a
security-based swap shall be deemed to mean the
execution, termination (prior to its scheduled maturity
date), assignment, exchange, or similar transfer or
conveyance of, or extinguishing of rights or
obligations under, a security-based swap, as the
context may require.
(19) The term ``emerging growth company'' means an
issuer that had total annual gross revenues of less
than $1,000,000,000 (as such amount is indexed for
inflation every 5 years by the Commission to reflect
the change in the Consumer Price Index for All Urban
Consumers published by the Bureau of Labor Statistics,
setting the threshold to the nearest 1,000,000) during
its most recently completed fiscal year. An issuer that
is an emerging growth company as of the first day of
that fiscal year shall continue to be deemed an
emerging growth company until the earliest of--
(A) the last day of the fiscal year of the
issuer during which it had total annual gross
revenues of $1,000,000,000 (as such amount is
indexed for inflation every 5 years by the
Commission to reflect the change in the
Consumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics,
setting the threshold to the nearest 1,000,000)
or more;
(B) the last day of the fiscal year of the
issuer following the fifth anniversary of the
date of the first sale of common equity
securities of the issuer pursuant to an
effective registration statement under this
title;
(C) the date on which such issuer has, during
the previous 3-year period, issued more than
$1,000,000,000 in non-convertible debt; or
(D) the date on which such issuer is deemed
to be a ``large accelerated filer'', as defined
in section 240.12b-2 of title 17, Code of
Federal Regulations, or any successor thereto.
(b) Consideration of Promotion of Efficiency, Competition,
and Capital Formation.--Whenever pursuant to this title the
Commission is engaged in rulemaking and is required to
consider or determine whether an action is necessary or
appropriate in the public interest, the Commission shall also
consider, in addition to the protection of investors, whether
the action will promote efficiency, competition, and capital
formation.
* * * * * * *
prohibitions relating to interstate commerce and the mails
Sec. 5. (a) Unless a registration statement is in effect as
to a security, it shall be unlawful for any person, directly or
indirectly--
(1) to make use of any means or instruments of
transportation or communication in interstate commerce
or of the mails to sell such security through the use
or medium of any prospectus or otherwise; or
(2) to carry or cause to be carried through the mails
or in interstate commerce, by any means or instruments
of transportation, any such security for the purpose of
sale or for delivery after sale.
(b) It shall be unlawful for any person, directly or
indirectly--
(1) to make use of any means or instruments of
transportation or communication in interstate commerce
or of the mails to carry or transmit any prospectus
relating to any security with respect to which a
registration statement has been filed under this title,
unless such prospectus meets the requirements of
section 10; or
(2) to carry or cause to be carried through the mails
or in interstate commerce any such security for the
purpose of sale or for delivery after sale, unless
accompanied or preceded by a prospectus that meets the
requirements of subsection (a) of section 10.
(c) It shall be unlawful for any person, directly or
indirectly, to make use of any means or instruments of
transportation or communication in interstate commerce or of
the mails to offer to sell or offer to buy through the use or
medium of any prospectus or otherwise any security, unless a
registration statement has been filed as to such security, or
while the registration statement is the subject of a refusal
order or stop order or (prior to the effective date of the
registration statement) any public proceeding or examination
under section 8.
(d) Limitation.--[Notwithstanding]
(1) In general._Notwithstanding any other provision
of this section, [an emerging growth company or any
person authorized to act on behalf of an emerging
growth company] an issuer or any person authorized to
act on behalf of an issuer may engage in oral or
written communications with potential investors that
are qualified institutional buyers or institutions that
are accredited investors, as such terms are
respectively defined in section 230.144A and section
230.501(a) of title 17, Code of Federal Regulations, or
any successor thereto, to determine whether such
investors might have an interest in a contemplated
securities offering, either prior to or following the
date of filing of a registration statement with respect
to such securities with the Commission, subject to the
requirement of subsection (b)(2).
(2) Additional requirements.--
(A) In general.--The Commission may issue
regulations, subject to public notice and
comment, to impose such other terms,
conditions, or requirements on the engaging in
oral or written communications described under
paragraph (1) by an issuer other than an
emerging growth company as the Commission
determines appropriate.
(B) Report to congress.--Prior to any
rulemaking described under subparagraph (A),
the Commission shall issue a report to the
Congress containing a list of the findings
supporting the basis of such rulemaking.
(e) Notwithstanding the provisions of section 3 or 4, unless
a registration statement meeting the requirements of section
10(a) is in effect as to a security-based swap, it shall be
unlawful for any person, directly or indirectly, to make use of
any means or instruments of transportation or communication in
interstate commerce or of the mails to offer to sell, offer to
buy or purchase or sell a security-based swap to any person who
is not an eligible contract participant as defined in section
1a(18) of the Commodity Exchange Act (7 U.S.C. 1a(18)).
registration of securities and signing of registration statement
Sec. 6. (a) Any security may be registered with the
Commission under the terms and conditions hereinafter provided,
by filing a registration statement in triplicate, at least one
of which shall be signed by each issuer, its principal
executive officer or officers, its principal financial officer,
its comptroller or principal accounting officer, and the
majority of its board of directors or persons performing
similar functions (or, if there is no board of directors or
persons performing similar functions, by the majority of the
persons or board having the power of management of the issuer),
and in case the issuer is a foreign or Territorial person by
its duly authorized representative in the United States; except
that when such registration statement relates to a security
issued by a foreign government, or political subdivision
thereof, it need be signed only by the underwriter of such
security. Signatures of all such persons when written on the
said registration statements shall be presumed to have been so
written by authority of the person whose signature is so
affixed and the burden of proof, in the event such authority
shall be denied, shall be upon the party denying the same. The
affixing of any signature without the authority of the
purported signer shall constitute a violation of this title. A
registration statement shall be deemed effective only as to the
securities specified therein as proposed to be offered.
(b) Registration Fee.--
(1) Fee payment required.--At the time of filing a
registration statement, the applicant shall pay to the
Commission a fee at a rate that shall be equal to $92
per $1,000,000 of the maximum aggregate price at which
such securities are proposed to be offered, except that
during fiscal year 2003 and any succeeding fiscal year
such fee shall be adjusted pursuant to paragraph (2).
(2) Annual adjustment.--For each fiscal year, the
Commission shall by order adjust the rate required by
paragraph (1) for such fiscal year to a rate that, when
applied to the baseline estimate of the aggregate
maximum offering prices for such fiscal year, is
reasonably likely to produce aggregate fee collections
under this subsection that are equal to the target fee
collection amount for such fiscal year.
(3) Pro rata application.--The rates per $1,000,000
required by this subsection shall be applied pro rata
to amounts and balances of less than $1,000,000.
(4) Review and effective date.--In exercising its
authority under this subsection, the Commission shall
not be required to comply with the provisions of
section 553 of title 5, United States Code. An adjusted
rate prescribed under paragraph (2) and published under
paragraph (5) shall not be subject to judicial review.
An adjusted rate prescribed under paragraph (2) shall
take effect on the first day of the fiscal year to
which such rate applies.
(5) Publication.--The Commission shall publish in the
Federal Register notices of the rate applicable under
this subsection and under sections 13(e) and 14(g) for
each fiscal year not later than August 31 of the fiscal
year preceding the fiscal year to which such rate
applies, together with any estimates or projections on
which such rate is based.
(6) Definitions.--For purposes of this subsection:
(A) Target offsetting collection amount.--The
target fee collection amount for each fiscal
year is determined according to the following
table:
Target fee
Fiscal year: collection amount
2002.................................................... $377,000,000
2003.................................................... $435,000,000
2004.................................................... $467,000,000
2005.................................................... $570,000,000
2006.................................................... $689,000,000
2007.................................................... $214,000,000
2008.................................................... $234,000,000
2009.................................................... $284,000,000
2010.................................................... $334,000,000
2011.................................................... $394,000,000
2012.................................................... $425,000,000
2013.................................................... $455,000,000
2014.................................................... $485,000,000
2015.................................................... $515,000,000
2016.................................................... $550,000,000
2017.................................................... $585,000,000
2018.................................................... $620,000,000
2019.................................................... $660,000,000
2020.................................................... $705,000,000
2021 and each fiscAn amount that is equal to the target fee collection
amount for the prior fiscal year, adjusted by the
rate of inflation.
(B) Baseline estimate of the aggregate
maximum offering prices.--The baseline estimate
of the aggregate maximum offering prices for
any fiscal year is the baseline estimate of the
aggregate maximum offering price at which
securities are proposed to be offered pursuant
to registration statements filed with the
Commission during such fiscal year as
determined by the Commission, after
consultation with the Congressional Budget
Office and the Office of Management and Budget,
using the methodology required for projections
pursuant to section 257 of the Balanced Budget
and Emergency Deficit Control Act of 1985.
(c) The filing with the Commission of a registration
statement, or of an amendment to a registration statement,
shall be deemed to have taken place upon the receipt thereof,
but the filing of a registration statement shall not be deemed
to have taken place unless it is accompanied by a United States
postal money order or a certified bank check or cash for the
amount of the fee required under subsection (b).
(d) The information contained in or filed with any
registration statement shall be made available to the public
under such regulations as the Commission may prescribe, and
copies thereof, photostatic or otherwise, shall be furnished to
every applicant at such reasonable charge as the Commission may
prescribe.
(e) [Emerging Growth Companies] Draft Registration
Statements.--
[(1) In general.--Any emerging growth company, prior
to its initial public offering date, may confidentially
submit to the Commission a draft registration
statement, for confidential nonpublic review by the
staff of the Commission prior to public filing,
provided that the initial confidential submission and
all amendments thereto shall be publicly filed with the
Commission not later than 15 days before the date on
which the issuer conducts a road show, as such term is
defined in section 230.433(h)(4) of title 17, Code of
Federal Regulations, or any successor thereto. An
issuer that was an emerging growth company at the time
it submitted a confidential registration statement or,
in lieu thereof, a publicly filed registration
statement for review under this subsection but ceases
to be an emerging growth company thereafter shall
continue to be treated as an emerging market growth
company for the purposes of this subsection through the
earlier of the date on which the issuer consummates its
initial public offering pursuant to such registrations
statement or the end of the 1-year period beginning on
the date the company ceases to be an emerging growth
company.]
(1) Prior to initial public offering.--Any issuer,
prior to its initial public offering date, may
confidentially submit to the Commission a draft
registration statement, for confidential nonpublic
review by the staff of the Commission prior to public
filing, provided that the initial confidential
submission and all amendments thereto shall be publicly
filed with the Commission not later than 15 days before
the date on which the issuer conducts a road show (as
defined under section 230.433(h)(4) of title 17, Code
of Federal Regulations) or, in the absence of a road
show, at least 15 days prior to the requested effective
date of the registration statement.
(2) Within 1 year after initial public offering or
exchange registration.--Any issuer, within the 1-year
period following its initial public offering or its
registration of a security under section 12(b) of the
Securities Exchange Act of 1934, may confidentially
submit to the Commission a draft registration
statement, for confidential nonpublic review by the
staff of the Commission prior to public filing,
provided that the initial confidential submission and
all amendments thereto shall be publicly filed with the
Commission not later than 15 days before the date on
which the issuer conducts a road show (as defined under
section 230.433(h)(4) of title 17, Code of Federal
Regulations) or, in the absence of a road show, at
least 15 days prior to the requested effective date of
the registration statement.
(3) Additional requirements.--
(A) In general.--The Commission may issue
regulations, subject to public notice and
comment, to impose such other terms,
conditions, or requirements on the submission
of draft registration statements described
under this subsection by an issuer other than
an emerging growth company as the Commission
determines appropriate.
(B) Report to congress.--Prior to any
rulemaking described under subparagraph (A),
the Commission shall issue a report to the
Congress containing a list of the findings
supporting the basis of such rulemaking.
[(2)] (4) Confidentiality.--Notwithstanding any other
provision of this title, the Commission shall not be
compelled to disclose any information provided to or
obtained by the Commission pursuant to this subsection.
For purposes of section 552 of title 5, United States
Code, this subsection shall be considered a statute
described in subsection (b)(3)(B) of such section 552.
Information described in or obtained pursuant to this
subsection shall be deemed to constitute confidential
information for purposes of section 24(b)(2) of the
Securities Exchange Act of 1934.
* * * * * * *
taking effect of registration statements and amendments thereto
Sec. 8. (a) Except as hereinafter provided, the effective
date of a registration statement shall be the twentieth day
after the filing thereof or such earlier date as the Commission
may determine, having due regard to the adequacy of the
information respecting the issuer theretofore available to the
public, to the facility with which the nature of the securities
to be registered, their relationship to the capital structure
of the issuer and the rights of holders thereof can be
understood, and to the public interest and the protection of
investors. If any amendment to any such statement is filed
prior to the effective date of such statement, the registration
statement shall be deemed to have been filed when such
amendment was filed; except that an amendment filed with the
consent of the Commission, prior to the effective date of the
registration statement, or filed pursuant to an order of the
Commission, shall be treated as a part of the registration
statement.
(b) If it appears to the Commission that a registration
statement is on its face incomplete or inaccurate in any
material respect, the Commission may, after notice by personal
service or the sending of confirmed telegraphic notice not
later than ten days after the filing of the registration
statement, and opportunity for hearing (at a time fixed by the
Commission) within ten days after such notice by personal
service or the sending of such telegraphic notice, issue an
order prior to the effective date of registration refusing to
permit such statement to become effective until it has been
amended in accordance with such order. When such statement has
been amended in accordance with such order the Commission shall
so declare and the registration shall become effective at the
time provided in subsection (a) or upon the date of such
declaration, whichever date is the later.
(c) An amendment filed after the effective date of the
registration statement, if such amendment, upon its face,
appears to the Commission not to be incomplete or inaccurate in
any material respect, shall become effective on such date as
the Commission may determine, having due regard to the public
interest and the protection of investors.
(d) If it appears to the Commission at any time that the
registration statement includes any untrue statement of a
material fact or omits to state any material fact required to
be stated therein or necessary to make the statements therein
not misleading, the Commission may, after notice by personal
service or the sending of confirmed telegraphic notice, and
after opportunity for hearing (at a time fixed by the
Commission) within fifteen days after such notice by personal
service or the sending of such telegraphic notice, issue a stop
order suspending the effectiveness of the registration
statement. When such statement has been amended in accordance
with such stop order the Commission shall so declare and
thereupon the stop order shall cease to be effective.
(e) The Commission is hereby empowered to make an examination
in any case in order to determine whether a stop order should
issue under subsection (d). In making such examination the
Commission or any officer or officers designated by it shall
have access to and may demand the production of any books and
papers of, and may administer oaths and affirmations to and
examine, the issuer, underwriter, or any other person, in
respect of any matter relevant to the examination, and may, in
its discretion, require the production of a balance sheet
exhibiting the assets and liabilities of the issuer, or its
income statement, or both, to be certified to by a public or
certified accountant approved by the Commission. If the issuer
or underwriter shall fail to cooperate, or shall obstruct or
refuse to permit the making of an examination, such conduct
shall be proper ground for the issuance of a stop order.
(f) Any notice required under this section shall be sent to
or served on the issuer, or, in case of a foreign government or
political subdivision thereof, to or on the underwriter, or, in
the case of a foreign or Territorial person, to or on its duly
authorized representative in the United States named in the
registration statement, properly directed in each case of
telegraphic notice to the address given in such statement.
(g) Procedure for Obtaining Certain Intellectual Property.--
The Commission is not authorized to compel under this title a
person to produce or furnish source code, including algorithmic
trading source code or similar intellectual property that forms
the basis for design of the source code, to the Commission
unless the Commission first issues a subpoena.
* * * * * * *
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SARBANES-OXLEY ACT OF 2002
* * * * * * *
TITLE IV--ENHANCED FINANCIAL DISCLOSURES
* * * * * * *
SEC. 404. MANAGEMENT ASSESSMENT OF INTERNAL CONTROLS.
(a) Rules Required.--The Commission shall prescribe rules
requiring each annual report required by section 13(a) or 15(d)
of the Securities Exchange Act of 1934 (15 U.S.C. 78m or
78o(d)) to contain an internal control report, which shall--
(1) state the responsibility of management for
establishing and maintaining an adequate internal
control structure and procedures for financial
reporting; and
(2) contain an assessment, as of the end of the most
recent fiscal year of the issuer, of the effectiveness
of the internal control structure and procedures of the
issuer for financial reporting.
(b) Internal Control Evaluation and Reporting.--With respect
to the internal control assessment required by subsection (a),
each registered public accounting firm that prepares or issues
the audit report for the issuer, other than an issuer that is
an emerging growth company (as defined in section 3 of the
Securities Exchange Act of 1934), shall attest to, and report
on, the assessment made by the management of the issuer. An
attestation made under this subsection shall be made in
accordance with standards for attestation engagements issued or
adopted by the Board. Any such attestation shall not be the
subject of a separate engagement.
(c) Exemption for Smaller Issuers.--Subsection (b) shall not
apply with respect to any audit report prepared for an issuer
that is neither a ``large accelerated filer'' nor an
``accelerated filer'' as those terms are defined in Rule 12b-2
of the Commission (17 C.F.R. 240.12b-2).
(d) Temporary Exemption for Low-Revenue Issuers.--
(1) Low-revenue exemption.--Subsection (b) shall not
apply with respect to an audit report prepared for an
issuer that--
(A) ceased to be an emerging growth company
on the last day of the fiscal year of the
issuer following the fifth anniversary of the
date of the first sale of common equity
securities of the issuer pursuant to an
effective registration statement under the
Securities Act of 1933;
(B) had average annual gross revenues of less
than $50,000,000 as of its most recently
completed fiscal year; and
(C) is not a large accelerated filer.
(2) Expiration of temporary exemption.--An issuer
ceases to be eligible for the exemption described under
paragraph (1) at the earliest of--
(A) the last day of the fiscal year of the
issuer following the tenth anniversary of the
date of the first sale of common equity
securities of the issuer pursuant to an
effective registration statement under the
Securities Act of 1933;
(B) the last day of the fiscal year of the
issuer during which the average annual gross
revenues of the issuer exceed $50,000,000; or
(C) the date on which the issuer becomes a
large accelerated filer.
(3) Definitions.--For purposes of this subsection:
(A) Average annual gross revenues.--The term
``average annual gross revenues'' means the
total gross revenues of an issuer over its most
recently completed three fiscal years divided
by three.
(B) Emerging growth company.--The term
``emerging growth company'' has the meaning
given such term under section 3 of the
Securities Exchange Act of 1934 (15 U.S.C.
78c).
(C) Large accelerated filer.--The term
``large accelerated filer'' has the meaning
given that term under section 240.12b-2 of
title 17, Code of Federal Regulations, or any
successor thereto.
* * * * * * *
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VICTIMS OF TRAFFICKING AND VIOLENCE PROTECTION ACT OF 2000
* * * * * * *
DIVISION A--TRAFFICKING VICTIMS PROTECTION ACT OF 2000
* * * * * * *
SEC. 105. INTERAGENCY TASK FORCE TO MONITOR AND COMBAT TRAFFICKING.
(a) Establishment.--The President shall establish an
Interagency Task Force to Monitor and Combat Trafficking.
(b) Appointment.--The President shall appoint the members of
the Task Force, which shall include the Secretary of State, the
Administrator of the United States Agency for International
Development, the Attorney General, the Secretary of Labor, the
Secretary of Health and Human Services, the Director of
National Intelligence, the Secretary of Defense, the Secretary
of Homeland Security, the Secretary of Education, the Secretary
of the Treasury, and such other officials as may be designated
by the President.
(c) Chairman.--The Task Force shall be chaired by the
Secretary of State.
(d) Activities of the Task Force.--The Task Force shall carry
out the following activities:
(1) Coordinate the implementation of this division.
(2) Measure and evaluate progress of the United
States and other countries in the areas of trafficking
prevention, protection, and assistance to victims of
trafficking, and prosecution and enforcement against
traffickers, including the role of public corruption in
facilitating trafficking. The Task Force shall have
primary responsibility for assisting the Secretary of
State in the preparation of the reports described in
section 110.
(3) Expand interagency procedures to collect and
organize data, including significant research and
resource information on domestic and international
trafficking. Any data collection procedures established
under this subsection shall respect the confidentiality
of victims of trafficking.
(4) Engage in efforts to facilitate cooperation among
countries of origin, transit, and destination. Such
efforts shall aim to strengthen local and regional
capacities to prevent trafficking, prosecute
traffickers and assist trafficking victims, and shall
include initiatives to enhance cooperative efforts
between destination countries and countries of origin
and assist in the appropriate reintegration of
stateless victims of trafficking.
(5) Examine the role of the international ``sex
tourism'' industry in the trafficking of persons and in
the sexual exploitation of women and children around
the world.
(6) Engage in consultation and advocacy with
governmental and nongovernmental organizations, among
other entities, to advance the purposes of this
division, and make reasonable efforts to distribute
information to enable all relevant Federal Government
agencies to publicize the National Human Trafficking
Resource Center Hotline on their websites, in all
headquarters offices, and in all field offices
throughout the United States.
(7) Not later than May 1, 2004, and annually
thereafter, the Attorney General shall submit to the
Committee on Ways and Means, the Committee on Foreign
Affairs, and the Committee on the Judiciary of the
House of Representatives and the Committee on Finance,
the Committee on Foreign Relations, and the Committee
on the Judiciary of the Senate, a report on Federal
agencies that are implementing any provision of this
division, or any amendment made by this division, which
shall include, at a minimum, information on--
(A) the number of persons who received
benefits or other services under subsections
(b) and (f) of section 107 in connection with
programs or activities funded or administered
by the Secretary of Health and Human Services,
the Secretary of Labor, the Attorney General,
the Board of Directors of the Legal Services
Corporation, and other appropriate Federal
agencies during the preceding fiscal year;
(B) the number of persons who have been
granted continued presence in the United States
under section 107(c)(3) during the preceding
fiscal year and the mean and median time taken
to adjudicate applications submitted under such
section, including the time from the receipt of
an application by law enforcement to the
issuance of continued presence, and a
description of any efforts being taken to
reduce the adjudication and processing time
while ensuring the safe and competent
processing of the applications;
(C) the number of persons who have applied
for, been granted, or been denied a visa or
otherwise provided status under subparagraph
(T)(i) or (U)(i) of section 101(a)(15) of the
Immigration and Nationality Act (8 U.S.C.
1101(a)(15)) during the preceding fiscal year;
(D) the number of persons who have applied
for, been granted, or been denied a visa or
status under clause (ii) of section
101(a)(15)(T) of the Immigration and
Nationality Act (8 U.S.C. 1101(a)(15)(T))
during the preceding fiscal year, broken down
by the number of such persons described in
subclauses (I), (II), and (III) of such clause
(ii);
(E) the amount of Federal funds expended in
direct benefits paid to individuals described
in subparagraph (D) in conjunction with T visa
status;
(F) the number of persons who have applied
for, been granted, or been denied a visa or
status under section 101(a)(15)(U)(i) of the
Immigration and Nationality Act (8 U.S.C.
1101(a)(15)(U)(i)) during the preceding fiscal
year;
(G) the mean and median time in which it
takes to adjudicate applications submitted
under the provisions of law set forth in
subparagraph (C), including the time between
the receipt of an application and the issuance
of a visa and work authorization;
(H) any efforts being taken to reduce the
adjudication and processing time, while
ensuring the safe and competent processing of
the applications;
(I) the number of persons who have been
charged or convicted under one or more of
sections 1581, 1583, 1584, 1589, 1590, 1591,
1592, or 1594 of title 18, United States Code,
during the preceding fiscal year and the
sentences imposed against each such person;
(J) the amount, recipient, and purpose of
each grant issued by any Federal agency to
carry out the purposes of sections 106 and 107
of this Act, or section 134 of the Foreign
Assistance Act of 1961, during the preceding
fiscal year;
(K) the nature of training conducted pursuant
to section 107(c)(4) during the preceding
fiscal year;
(L) the amount, recipient, and purpose of
each grant under section 202 and 204 of the
Trafficking Victims Protection Act of 2005;
(M) activities by the Department of Defense
to combat trafficking in persons, including--
(i) educational efforts for, and
disciplinary actions taken against,
members of the United States Armed
Forces;
(ii) the development of materials
used to train the armed forces of
foreign countries;
(iii) all known trafficking in
persons cases reported to the Under
Secretary of Defense for Personnel and
Readiness;
(iv) efforts to ensure that United
States Government contractors and their
employees or United States Government
subcontractors and their employees do
not engage in trafficking in persons;
and
(v) all trafficking in persons
activities of contractors reported to
the Under Secretary of Defense for
Acquisition, Technology, and Logistics;
(N) activities or actions by Federal
departments and agencies to enforce--
(i) section 106(g) and any similar
law, regulation, or policy relating to
United States Government contractors
and their employees or United States
Government subcontractors and their
employees that engage in severe forms
of trafficking in persons, the
procurement of commercial sex acts, or
the use of forced labor, including debt
bondage;
(ii) section 307 of the Tariff Act of
1930 (19 U.S.C. 1307; relating to
prohibition on importation of convict-
made goods), including any
determinations by the Secretary of
Homeland Security to waive the
restrictions of such section; and
(iii) prohibitions on the procurement
by the United States Government of
items or services produced by slave
labor, consistent with Executive Order
13107 (December 10, 1998);
(O) the activities undertaken by the Senior
Policy Operating Group to carry out its
responsibilities under subsection (g); and
(P) the activities undertaken by Federal
agencies to train appropriate State, tribal,
and local government and law enforcement
officials to identify victims of severe forms
of trafficking, including both sex and labor
trafficking;
(Q) the activities undertaken by Federal
agencies in cooperation with State, tribal, and
local law enforcement officials to identify,
investigate, and prosecute offenses under
sections 1581, 1583, 1584, 1589, 1590, 1591,
1592, 1594, 2251, 2251A, 2421, 2422, and 2423
of title 18, United States Code, or equivalent
State offenses, including, in each fiscal
year--
(i) the number, age, gender, country
of origin, and citizenship status of
victims identified for each offense;
(ii) the number of individuals
charged, and the number of individuals
convicted, under each offense;
(iii) the number of individuals
referred for prosecution for State
offenses, including offenses relating
to the purchasing of commercial sex
acts;
(iv) the number of victims granted
continued presence in the United States
under section 107(c)(3);
(v) the number of victims granted a
visa or otherwise provided status under
subparagraph (T)(i) or (U)(i) of
section 101(a)(15) of the Immigration
and Nationality Act (8 U.S.C.
1101(a)(15));
(vi) the number of individuals
required by a court order to pay
restitution in connection with a
violation of each offense under title
18, United States Code, the amount of
restitution required to be paid under
each such order, and the amount of
restitution actually paid pursuant to
each such order; and
(vii) the age, gender, race, country
of origin, country of citizenship, and
description of the role in the offense
of individuals convicted under each
offense; and
(R) the activities undertaken by the
Department of Justice and the Department of
Health and Human Services to meet the specific
needs of minor victims of domestic trafficking,
including actions taken pursuant to subsection
(f) and section 202(a) of the Trafficking
Victims Protection Reauthorization Act of 2005
(42 U.S.C. 14044(a)), and the steps taken to
increase cooperation among Federal agencies to
ensure the effective and efficient use of
programs for which the victims are eligible.
(e) Office To Monitor and Combat Trafficking.--
(1) In general.--The Secretary of State shall
establish within the Department of State an Office to
Monitor and Combat Trafficking, which shall provide
assistance to the Task Force. Any such Office shall be
headed by a Director, who shall be appointed by the
President, by and with the advice and consent of the
Senate, with the rank of Ambassador-at-Large. The
Director shall have the primary responsibility for
assisting the Secretary of State in carrying out the
purposes of this division and may have additional
responsibilities as determined by the Secretary. The
Director shall consult with nongovernmental
organizations and multilateral organizations, and with
trafficking victims or other affected persons. The
Director shall have the authority to take evidence in
public hearings or by other means. The agencies
represented on the Task Force are authorized to provide
staff to the Office on a nonreimbursable basis.
(2) United states assistance.--The Director shall be
responsible for--
(A) all policy, funding, and programming
decisions regarding funds made available for
trafficking in persons programs that are
centrally controlled by the Office to Monitor
and Combat Trafficking; and
(B) coordinating any trafficking in persons
programs of the Department of State or the
United States Agency for International
Development that are not centrally controlled
by the Director.
(f) Regional Strategies for Combating Trafficking in
Persons.--Each regional bureau in the Department of State shall
contribute to the realization of the anti-trafficking goals and
objectives of the Secretary of State. Each year, in cooperation
with the Office to Monitor and Combat Trafficking in Persons,
each regional bureau shall submit a list of anti-trafficking
goals and objectives to the Secretary of State for each country
in the geographic area of responsibilities of the regional
bureau. Host governments shall be informed of the goals and
objectives for their particular country and, to the extent
possible, host government officials should be consulted
regarding the goals and objectives.
(g) Senior Policy Operating Group.--
(1) Establishment.--There shall be established within
the executive branch a Senior Policy Operating Group.
(2) Membership; related matters.--
(A) In general.--The Operating Group shall
consist of the senior officials designated as
representatives of the appointed members of the
Task Force (pursuant to Executive Order No.
13257 of February 13, 2002).
(B) Chairperson.--The Operating Group shall
be chaired by the Director of the Office to
Monitor and Combat Trafficking of the
Department of State.
(C) Meetings.--The Operating Group shall meet
on a regular basis at the call of the
Chairperson.
(3) Duties.--The Operating Group shall coordinate
activities of Federal departments and agencies
regarding policies (including grants and grant
policies) involving the international trafficking in
persons and the implementation of this division.
(4) Availability of information.--Each Federal
department or agency represented on the Operating Group
shall fully share all information with such Group
regarding the department or agency's plans, before and
after final agency decisions are made, on all matters
relating to grants, grant policies, and other
significant actions regarding the international
trafficking in persons and the implementation of this
division.
(5) Regulations.--Not later than 90 days after the
date of the enactment of the Trafficking Victims
Protection Reauthorization Act of 2003, the President
shall promulgate regulations to implement this section,
including regulations to carry out paragraph (4).
* * * * * * *
----------
TITLE 31, UNITED STATES CODE
SUBTITLE I--GENERAL
* * * * * * *
CHAPTER 3--DEPARTMENT OF THE TREASURY
* * * * * * *
SUBCHAPTER I--ORGANIZATION
* * * * * * *
Sec. 312. Terrorism and Financial Intelligence
(a) Office of Terrorism and Financial Intelligence.--
(1) Establishment.--There is established within the
Department of the Treasury the Office of Terrorism and
Financial Intelligence (in this section referred to as
``OTFI''), which shall be the successor to any such
office in existence on the date of enactment of this
section.
(2) Leadership.--
(A) Undersecretary.--There is established
within the Department of the Treasury, the
Office of the Undersecretary for Terrorism and
Financial Crimes, who shall serve as the head
of the OTFI, and shall report to the Secretary
of the Treasury through the Deputy Secretary of
the Treasury. The Office of the Undersecretary
for Terrorism and Financial Crimes shall be the
successor to the Office of the Undersecretary
for Enforcement.
(B) Appointment.--The Undersecretary for
Terrorism and Financial Crimes shall be
appointed by the President, by and with the
advice and consent of the Senate.
(3) Assistant Secretary for Terrorist Financing.--
(A) Establishment.--There is established
within the OTFI the position of Assistant
Secretary for Terrorist Financing.
(B) Appointment.--The Assistant Secretary for
Terrorist Financing shall be appointed by the
President, by and with the advice and consent
of the Senate.
(C) Duties.--The Assistant Secretary for
Terrorist Financing shall be responsible for
formulating and coordinating the counter
terrorist financing and anti-money laundering
efforts of the Department of the Treasury, and
shall report directly to the Undersecretary for
Terrorism and Financial Crimes.
(4) Functions.--The functions of the OTFI include
providing policy, strategic, and operational direction
to the Department on issues relating to--
(A) implementation of titles I and II of the
Bank Secrecy Act;
(B) United States economic sanctions
programs;
(C) combating terrorist financing;
(D) combating financial crimes, including
money laundering, counterfeiting, and other
offenses threatening the integrity of the
banking and financial systems;
(E) combating illicit financing relating to
severe forms of trafficking in persons;
[(E)] (F) other enforcement matters;
[(F)] (G) those intelligence analysis and
coordination functions described in subsection
(b); and
[(G)] (H) the security functions and programs
of the Department of the Treasury.
(5) Reports to Congress on proposed measures.--The
Undersecretary for Terrorism and Financial Crimes and
the Assistant Secretary for Terrorist Financing shall
report to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial
Services of the House of Representatives not later than
72 hours after proposing by rule, regulation, order, or
otherwise, any measure to reorganize the structure of
the Department for combatting money laundering and
terrorist financing, before any such proposal becomes
effective.
(6) Other offices within OTFI.--Notwithstanding any
other provision of law, the following offices of the
Department of the Treasury shall be within the OTFI:
(A) The Office of the Assistant Secretary for
Intelligence and Analysis, which shall report
directly to the Undersecretary for Terrorism
and Financial Crimes.
(B) The Office of the Assistant Secretary for
Terrorist Financing, which shall report
directly to the Undersecretary for Terrorism
and Financial Crimes.
(C) The Office of Foreign Assets Control (in
this section referred to as the ``OFAC''),
which shall report directly to the
Undersecretary for Terrorism and Financial
Crimes.
(D) The Executive Office for Asset
Forfeiture, which shall report to the
Undersecretary for Terrorism and Financial
Crimes.
(E) The Office of Intelligence and Analysis
(in this section referred to as the ``OIA''),
which shall report to the Assistant Secretary
for Intelligence and Analysis.
(F) The Office of Terrorist Financing, which
shall report to the Assistant Secretary for
Terrorist Financing.
(7) FinCEN.--
(A) Reporting to Undersecretary.--The
Financial Crimes Enforcement Network (in this
section referred to as ``FinCEN''), a bureau of
the Department of the Treasury, shall report to
the Undersecretary for Terrorism and Financial
Crimes. The Undersecretary for Terrorism and
Financial Crimes may not redelegate its
reporting authority over FinCEN.
(B) Office of Compliance.--There is
established within FinCEN, an Office of
Compliance.
(8) Interagency coordination.--The Secretary of the
Treasury, after consultation with the Undersecretary
for Terrorism and Financial Crimes, shall designate an
office within the OTFI that shall coordinate efforts to
combat the illicit financing of severe forms of
trafficking in persons with--
(A) other offices of the Department of the
Treasury;
(B) other Federal agencies, including--
(i) the Office to Monitor and Combat
Trafficking in Persons of the
Department of State; and
(ii) the Interagency Task Force to
Monitor and Combat Trafficking;
(C) State and local law enforcement agencies;
and
(D) foreign governments.
(9) Definition.--In this subsection, the term
``severe forms of trafficking in persons'' has the
meaning given such term in section 103 of the
Trafficking Victims Protection Act of 2000 (22 U.S.C.
7102).
(b) Office of Intelligence and Analysis.--
(1) Assistant Secretary for Intelligence and
Analysis.--The Assistant Secretary for Intelligence and
Analysis shall head the OIA.
(2) Responsibilities.--The OIA shall be responsible
for the receipt, analysis, collation, and dissemination
of intelligence and counterintelligence information
related to the operations and responsibilities of the
entire Department of the Treasury, including all
components and bureaus of the Department.
(3) Primary functions.--The primary functions of the
OIA are--
(A) to build a robust analytical capability
on terrorist finance by coordinating and
overseeing work involving intelligence analysts
in all components of the Department of the
Treasury, focusing on the highest priorities of
the Department, as well as ensuring that the
existing intelligence needs of the OFAC and
FinCEN are met; and
(B) to provide intelligence support to senior
officials of the Department on a wide range of
international economic and other relevant
issues.
(4) Other functions and duties.--The OIA shall--
(A) carry out the intelligence support
functions that are assigned, to the Office of
Intelligence Support under section 311
(pursuant to section 105 of the Intelligence
Authorization Act for Fiscal Year 2004);
(B) serve in a liaison capacity with the
intelligence community; and
(C) represent the Department in various
intelligence related activities.
(5) Duties of the Assistant Secretary.--The Assistant
Secretary for Intelligence and Analysis shall serve as
the Senior Officer Intelligence Community, and shall
represent the Department in intelligence community
fora, including the National Foreign Intelligence Board
committees and the Intelligence Community Management
Staff.
(c) Delegation.--To the extent that any authorities, powers,
and responsibilities over enforcement matters delegated to the
Undersecretary for Terrorism and Financial Crimes, or the
positions of Assistant Secretary for Terrorism and Financial
Crimes, Assistant Secretary for Enforcement and Operations, or
Deputy Assistant Secretary for Terrorist Financing and
Financial Crimes, have not been transferred to the Department
of Homeland Security, the Department of Justice, or the
Assistant Secretary for Tax Policy (related to the customs
revenue functions of the Bureau of Alcohol and Tobacco Tax and
Trade), those remaining authorities, powers, and
responsibilities are delegated to the Undersecretary for
Terrorism and Financial Crimes.
(d) Designation as Enforcement Organization.--The Office of
Terrorism and Financial Intelligence (including any components
thereof) is designated as a law enforcement organization of the
Department of the Treasury for purposes of section 9705 of
title 31, United States Code, and other relevant authorities.
(e) Use of Existing Resources.--The Secretary may employ
personnel, facilities, and other Department of the Treasury
resources available to the Secretary on the date of enactment
of this section in carrying out this section, except as
otherwise prohibited by law.
(f) References.--References in this section to the
``Secretary'', ``Undersecretary'', ``Deputy Secretary'',
``Deputy Assistant Secretary'', ``Office'', ``Assistant
Secretary'', and ``Department'' are references to positions and
offices of the Department of the Treasury, unless otherwise
specified.
* * * * * * *
----------
TRAFFICKING VICTIMS PROTECTION ACT OF 2000
* * * * * * *
DIVISION A--TRAFFICKING VICTIMS PROTECTION ACT OF 2000
* * * * * * *
SEC. 105. INTERAGENCY TASK FORCE TO MONITOR AND COMBAT TRAFFICKING.
(a) Establishment.--The President shall establish an
Interagency Task Force to Monitor and Combat Trafficking.
(b) Appointment.--The President shall appoint the members of
the Task Force, which shall include the Secretary of State, the
Administrator of the United States Agency for International
Development, the Attorney General, the Secretary of Labor, the
Secretary of Health and Human Services, the Director of
National Intelligence, the Secretary of Defense, the Secretary
of Homeland Security, the Secretary of Education, and such
other officials as may be designated by the President.
(c) Chairman.--The Task Force shall be chaired by the
Secretary of State.
(d) Activities of the Task Force.--The Task Force shall carry
out the following activities:
(1) Coordinate the implementation of this division.
(2) Measure and evaluate progress of the United
States and other countries in the areas of trafficking
prevention, protection, and assistance to victims of
trafficking, and prosecution and enforcement against
traffickers, including the role of public corruption in
facilitating trafficking. The Task Force shall have
primary responsibility for assisting the Secretary of
State in the preparation of the reports described in
section 110.
(3) Expand interagency procedures to collect and
organize data, including significant research and
resource information on domestic and international
trafficking. Any data collection procedures established
under this subsection shall respect the confidentiality
of victims of trafficking.
(4) Engage in efforts to facilitate cooperation among
countries of origin, transit, and destination. Such
efforts shall aim to strengthen local and regional
capacities to prevent trafficking, prosecute
traffickers and assist trafficking victims, and shall
include initiatives to enhance cooperative efforts
between destination countries and countries of origin
and assist in the appropriate reintegration of
stateless victims of trafficking.
(5) Examine the role of the international ``sex
tourism'' industry in the trafficking of persons and in
the sexual exploitation of women and children around
the world.
(6) Engage in consultation and advocacy with
governmental and nongovernmental organizations, among
other entities, to advance the purposes of this
division, and make reasonable efforts to distribute
information to enable all relevant Federal Government
agencies to publicize the National Human Trafficking
Resource Center Hotline on their websites, in all
headquarters offices, and in all field offices
throughout the United States.
(7) Not later than May 1, 2004, and annually
thereafter, the Attorney General shall submit to the
Committee on Ways and Means, the Committee on Foreign
Affairs, the Committee on Financial Services, and the
Committee on the Judiciary of the House of
Representatives and the Committee on Finance, the
Committee on Foreign Relations, the Committee on
Banking, Housing, and Urban Affairs, and the Committee
on the Judiciary of the Senate, a report on Federal
agencies that are implementing any provision of this
division, or any amendment made by this division, which
shall include, at a minimum, information on--
(A) the number of persons who received
benefits or other services under subsections
(b) and (f) of section 107 in connection with
programs or activities funded or administered
by the Secretary of Health and Human Services,
the Secretary of Labor, the Attorney General,
the Board of Directors of the Legal Services
Corporation, and other appropriate Federal
agencies during the preceding fiscal year;
(B) the number of persons who have been
granted continued presence in the United States
under section 107(c)(3) during the preceding
fiscal year and the mean and median time taken
to adjudicate applications submitted under such
section, including the time from the receipt of
an application by law enforcement to the
issuance of continued presence, and a
description of any efforts being taken to
reduce the adjudication and processing time
while ensuring the safe and competent
processing of the applications;
(C) the number of persons who have applied
for, been granted, or been denied a visa or
otherwise provided status under subparagraph
(T)(i) or (U)(i) of section 101(a)(15) of the
Immigration and Nationality Act (8 U.S.C.
1101(a)(15)) during the preceding fiscal year;
(D) the number of persons who have applied
for, been granted, or been denied a visa or
status under clause (ii) of section
101(a)(15)(T) of the Immigration and
Nationality Act (8 U.S.C. 1101(a)(15)(T))
during the preceding fiscal year, broken down
by the number of such persons described in
subclauses (I), (II), and (III) of such clause
(ii);
(E) the amount of Federal funds expended in
direct benefits paid to individuals described
in subparagraph (D) in conjunction with T visa
status;
(F) the number of persons who have applied
for, been granted, or been denied a visa or
status under section 101(a)(15)(U)(i) of the
Immigration and Nationality Act (8 U.S.C.
1101(a)(15)(U)(i)) during the preceding fiscal
year;
(G) the mean and median time in which it
takes to adjudicate applications submitted
under the provisions of law set forth in
subparagraph (C), including the time between
the receipt of an application and the issuance
of a visa and work authorization;
(H) any efforts being taken to reduce the
adjudication and processing time, while
ensuring the safe and competent processing of
the applications;
(I) the number of persons who have been
charged or convicted under one or more of
sections 1581, 1583, 1584, 1589, 1590, 1591,
1592, or 1594 of title 18, United States Code,
during the preceding fiscal year and the
sentences imposed against each such person;
(J) the amount, recipient, and purpose of
each grant issued by any Federal agency to
carry out the purposes of sections 106 and 107
of this Act, or section 134 of the Foreign
Assistance Act of 1961, during the preceding
fiscal year;
(K) the nature of training conducted pursuant
to section 107(c)(4) during the preceding
fiscal year;
(L) the amount, recipient, and purpose of
each grant under section 202 and 204 of the
Trafficking Victims Protection Act of 2005;
(M) activities by the Department of Defense
to combat trafficking in persons, including--
(i) educational efforts for, and
disciplinary actions taken against,
members of the United States Armed
Forces;
(ii) the development of materials
used to train the armed forces of
foreign countries;
(iii) all known trafficking in
persons cases reported to the Under
Secretary of Defense for Personnel and
Readiness;
(iv) efforts to ensure that United
States Government contractors and their
employees or United States Government
subcontractors and their employees do
not engage in trafficking in persons;
and
(v) all trafficking in persons
activities of contractors reported to
the Under Secretary of Defense for
Acquisition, Technology, and Logistics;
(N) activities or actions by Federal
departments and agencies to enforce--
(i) section 106(g) and any similar
law, regulation, or policy relating to
United States Government contractors
and their employees or United States
Government subcontractors and their
employees that engage in severe forms
of trafficking in persons, the
procurement of commercial sex acts, or
the use of forced labor, including debt
bondage;
(ii) section 307 of the Tariff Act of
1930 (19 U.S.C. 1307; relating to
prohibition on importation of convict-
made goods), including any
determinations by the Secretary of
Homeland Security to waive the
restrictions of such section; and
(iii) prohibitions on the procurement
by the United States Government of
items or services produced by slave
labor, consistent with Executive Order
13107 (December 10, 1998);
(O) the activities undertaken by the Senior
Policy Operating Group to carry out its
responsibilities under subsection (g); and
(P) the activities undertaken by Federal
agencies to train appropriate State, tribal,
and local government and law enforcement
officials to identify victims of severe forms
of trafficking, including both sex and labor
trafficking;
(Q) the activities undertaken by Federal
agencies in cooperation with State, tribal, and
local law enforcement officials to identify,
investigate, and prosecute offenses under
sections 1581, 1583, 1584, 1589, 1590, 1591,
1592, 1594, 2251, 2251A, 2421, 2422, and 2423
of title 18, United States Code, or equivalent
State offenses, including, in each fiscal
year--
(i) the number, age, gender, country
of origin, and citizenship status of
victims identified for each offense;
(ii) the number of individuals
charged, and the number of individuals
convicted, under each offense;
(iii) the number of individuals
referred for prosecution for State
offenses, including offenses relating
to the purchasing of commercial sex
acts;
(iv) the number of victims granted
continued presence in the United States
under section 107(c)(3);
(v) the number of victims granted a
visa or otherwise provided status under
subparagraph (T)(i) or (U)(i) of
section 101(a)(15) of the Immigration
and Nationality Act (8 U.S.C.
1101(a)(15));
(vi) the number of individuals
required by a court order to pay
restitution in connection with a
violation of each offense under title
18, United States Code, the amount of
restitution required to be paid under
each such order, and the amount of
restitution actually paid pursuant to
each such order; and
(vii) the age, gender, race, country
of origin, country of citizenship, and
description of the role in the offense
of individuals convicted under each
offense[; and];
(R) the activities undertaken by the
Department of Justice and the Department of
Health and Human Services to meet the specific
needs of minor victims of domestic trafficking,
including actions taken pursuant to subsection
(f) and section 202(a) of the Trafficking
Victims Protection Reauthorization Act of 2005
(42 U.S.C. 14044(a)), and the steps taken to
increase cooperation among Federal agencies to
ensure the effective and efficient use of
programs for which the victims are eligible[.];
and
(S) the efforts of the United States to
eliminate money laundering relating to severe
forms of trafficking in persons and the number
of investigations, arrests, indictments, and
convictions in money laundering cases with a
nexus to severe forms of trafficking in
persons.
(e) Office To Monitor and Combat Trafficking.--
(1) In general.--The Secretary of State shall
establish within the Department of State an Office to
Monitor and Combat Trafficking, which shall provide
assistance to the Task Force. Any such Office shall be
headed by a Director, who shall be appointed by the
President, by and with the advice and consent of the
Senate, with the rank of Ambassador-at-Large. The
Director shall have the primary responsibility for
assisting the Secretary of State in carrying out the
purposes of this division and may have additional
responsibilities as determined by the Secretary. The
Director shall consult with nongovernmental
organizations and multilateral organizations, and with
trafficking victims or other affected persons. The
Director shall have the authority to take evidence in
public hearings or by other means. The agencies
represented on the Task Force are authorized to provide
staff to the Office on a nonreimbursable basis.
(2) United states assistance.--The Director shall be
responsible for--
(A) all policy, funding, and programming
decisions regarding funds made available for
trafficking in persons programs that are
centrally controlled by the Office to Monitor
and Combat Trafficking; and
(B) coordinating any trafficking in persons
programs of the Department of State or the
United States Agency for International
Development that are not centrally controlled
by the Director.
(f) Regional Strategies for Combating Trafficking in
Persons.--Each regional bureau in the Department of State shall
contribute to the realization of the anti-trafficking goals and
objectives of the Secretary of State. Each year, in cooperation
with the Office to Monitor and Combat Trafficking in Persons,
each regional bureau shall submit a list of anti-trafficking
goals and objectives to the Secretary of State for each country
in the geographic area of responsibilities of the regional
bureau. Host governments shall be informed of the goals and
objectives for their particular country and, to the extent
possible, host government officials should be consulted
regarding the goals and objectives.
(g) Senior Policy Operating Group.--
(1) Establishment.--There shall be established within
the executive branch a Senior Policy Operating Group.
(2) Membership; related matters.--
(A) In general.--The Operating Group shall
consist of the senior officials designated as
representatives of the appointed members of the
Task Force (pursuant to Executive Order No.
13257 of February 13, 2002).
(B) Chairperson.--The Operating Group shall
be chaired by the Director of the Office to
Monitor and Combat Trafficking of the
Department of State.
(C) Meetings.--The Operating Group shall meet
on a regular basis at the call of the
Chairperson.
(3) Duties.--The Operating Group shall coordinate
activities of Federal departments and agencies
regarding policies (including grants and grant
policies) involving the international trafficking in
persons and the implementation of this division.
(4) Availability of information.--Each Federal
department or agency represented on the Operating Group
shall fully share all information with such Group
regarding the department or agency's plans, before and
after final agency decisions are made, on all matters
relating to grants, grant policies, and other
significant actions regarding the international
trafficking in persons and the implementation of this
division.
(5) Regulations.--Not later than 90 days after the
date of the enactment of the Trafficking Victims
Protection Reauthorization Act of 2003, the President
shall promulgate regulations to implement this section,
including regulations to carry out paragraph (4).
* * * * * * *
SEC. 108. MINIMUM STANDARDS FOR THE ELIMINATION OF TRAFFICKING.
(a) Minimum Standards.--For purposes of this division, the
minimum standards for the elimination of trafficking applicable
to the government of a country of origin, transit, or
destination for victims of severe forms of trafficking are the
following:
(1) The government of the country should prohibit
severe forms of trafficking in persons and punish acts
of such trafficking.
(2) For the knowing commission of any act of sex
trafficking involving force, fraud, coercion, or in
which the victim of sex trafficking is a child
incapable of giving meaningful consent, or of
trafficking which includes rape or kidnapping or which
causes a death, the government of the country should
prescribe punishment commensurate with that for grave
crimes, such as forcible sexual assault.
(3) For the knowing commission of any act of a severe
form of trafficking in persons, the government of the
country should prescribe punishment that is
sufficiently stringent to deter and that adequately
reflects the heinous nature of the offense.
(4) The government of the country should make serious
and sustained efforts to eliminate severe forms of
trafficking in persons.
(b) Criteria.--In determinations under subsection (a)(4), the
following factors should be considered as indicia of serious
and sustained efforts to eliminate severe forms of trafficking
in persons:
(1) Whether the government of the country vigorously
investigates and prosecutes acts of severe forms of
trafficking in persons, and convicts and sentences
persons responsible for such acts, that take place
wholly or partly within the territory of the country,
including, as appropriate, requiring incarceration of
individuals convicted of such acts. For purposes of the
preceding sentence, suspended or significantly-reduced
sentences for convictions of principal actors in cases
of severe forms of trafficking in persons shall be
considered, on a case-by-case basis, whether to be
considered an indicator of serious and sustained
efforts to eliminate severe forms of trafficking in
persons. After reasonable requests from the Department
of State for data regarding investigations,
prosecutions, convictions, and sentences, a government
which does not provide such data, consistent with the
capacity of such government to obtain such data, shall
be presumed not to have vigorously investigated,
prosecuted, convicted or sentenced such acts. During
the periods prior to the annual report submitted on
June 1, 2004, and on June 1, 2005, and the periods
afterwards until September 30 of each such year, the
Secretary of State may disregard the presumption
contained in the preceding sentence if the government
has provided some data to the Department of State
regarding such acts and the Secretary has determined
that the government is making a good faith effort to
collect such data.
(2) Whether the government of the country protects
victims of severe forms of trafficking in persons and
encourages their assistance in the investigation and
prosecution of such trafficking, including provisions
for legal alternatives to their removal to countries in
which they would face retribution or hardship, and
ensures that victims are not inappropriately
incarcerated, fined, or otherwise penalized solely for
unlawful acts as a direct result of being trafficked,
including by providing training to law enforcement and
immigration officials regarding the identification and
treatment of trafficking victims using approaches that
focus on the needs of the victims.
(3) Whether the government of the country has adopted
measures to prevent severe forms of trafficking in
persons, such as measures to inform and educate the
public, including potential victims, about the causes
and consequences of severe forms of trafficking in
persons, measures to establish the identity of local
populations, including birth registration, citizenship,
and nationality, measures to ensure that its nationals
who are deployed abroad as part of a diplomatic,
peacekeeping, or other similar mission do not engage in
or facilitate severe forms of trafficking in persons or
exploit victims of such trafficking, a transparent
system for remediating or punishing such public
officials as a deterrent, measures to prevent the use
of forced labor or child labor in violation of
international standards, effective bilateral,
multilateral, or regional information sharing and
cooperation arrangements with other countries, and
effective policies or laws regulating foreign labor
recruiters and holding them civilly and criminally
liable for fraudulent recruiting.
(4) Whether the government of the country cooperates
with other governments in the investigation and
prosecution of severe forms of trafficking in persons
and has entered into bilateral, multilateral, or
regional law enforcement cooperation and coordination
arrangements with other countries.
(5) Whether the government of the country extradites
persons charged with acts of severe forms of
trafficking in persons on substantially the same terms
and to substantially the same extent as persons charged
with other serious crimes (or, to the extent such
extradition would be inconsistent with the laws of such
country or with international agreements to which the
country is a party, whether the government is taking
all appropriate measures to modify or replace such laws
and treaties so as to permit such extradition).
(6) Whether the government of the country monitors
immigration and emigration patterns for evidence of
severe forms of trafficking in persons and whether law
enforcement agencies of the country respond to any such
evidence in a manner that is consistent with the
vigorous investigation and prosecution of acts of such
trafficking, as well as with the protection of human
rights of victims and the internationally recognized
human right to leave any country, including one's own,
and to return to one's own country.
(7) Whether the government of the country vigorously
investigates, prosecutes, convicts, and sentences
public officials, including diplomats and soldiers, who
participate in or facilitate severe forms of
trafficking in persons, including nationals of the
country who are deployed abroad as part of a
diplomatic, peacekeeping, or other similar mission who
engage in or facilitate severe forms of trafficking in
persons or exploit victims of such trafficking, and
takes all appropriate measures against officials who
condone such trafficking. A government's failure to
appropriately address public allegations against such
public officials, especially once such officials have
returned to their home countries, shall be considered
inaction under these criteria. After reasonable
requests from the Department of State for data
regarding such investigations, prosecutions,
convictions, and sentences, a government which does not
provide such data consistent with its resources shall
be presumed not to have vigorously investigated,
prosecuted, convicted, or sentenced such acts. During
the periods prior to the annual report submitted on
June 1, 2004, and on June 1, 2005, and the periods
afterwards until September 30 of each such year, the
Secretary of State may disregard the presumption
contained in the preceding sentence if the government
has provided some data to the Department of State
regarding such acts and the Secretary has determined
that the government is making a good faith effort to
collect such data.
(8) Whether the percentage of victims of severe forms
of trafficking in the country that are non-citizens of
such countries is insignificant.
(9) Whether the government has entered into
effective, transparent partnerships, cooperative
arrangements, or agreements that have resulted in
concrete and measurable outcomes with--
(A) domestic civil society organizations,
private sector entities, or international
nongovernmental organizations, or into
multilateral or regional arrangements or
agreements, to assist the government's efforts
to prevent trafficking, protect victims, and
punish traffickers; or
(B) the United States toward agreed goals and
objectives in the collective fight against
trafficking.
(10) Whether the government of the country,
consistent with the capacity of such government,
systematically monitors its efforts to satisfy the
criteria described in paragraphs (1) through (8) and
makes available publicly a periodic assessment of such
efforts.
(11) Whether the government of the country achieves
appreciable progress in eliminating severe forms of
trafficking when compared to the assessment in the
previous year.
(12) Whether the government of the country has made
serious and sustained efforts to reduce the demand
for--
(A) commercial sex acts; and
(B) participation in international sex
tourism by nationals of the country.
(13) Whether the government of the country,
consistent with the capacity of the country, has in
effect a framework to prevent financial transactions
involving the proceeds of severe forms of trafficking
in persons, and is taking steps to implement such a
framework, including by investigating, prosecuting,
convicting, and sentencing individuals who attempt or
conduct such transactions.
* * * * * * *
----------
SMALL BUSINESS INVESTMENT ACT OF 1958
* * * * * * *
TITLE III--INVESTMENT DIVISION PROGRAMS
Part A--Small Business Investment Companies
* * * * * * *
capital requirements
Sec. 302.
(a) Amount.--
(1) In general.--Except as provided in paragraph (2),
the private capital of each licensee shall be not less
than--
(A) $5,000,000; or
(B) $10,000,000, with respect to each
licensee authorized or seeking authority to
issue participating securities to be purchased
or guaranteed by the Administration under this
Act.
(2) Exception.--The Administrator may, in the
discretion of the Administrator and based on a showing
of special circumstances and good cause, permit the
private capital of a licensee authorized or seeking
authorization to issue participating securities to be
purchased or guaranteed by the Administration to be
less than $10,000,000, but not less than $5,000,000, if
the Administrator determines that such action would not
create or otherwise contribute to an unreasonable risk
of default or loss to the Federal Government.
(3) Adequacy.--In addition to the requirements of
paragraph (1), the Administrator shall--
(A) determine whether the private capital of
each licensee is adequate to assure a
reasonable prospect that the licensee will be
operated soundly and profitably, and managed
actively and prudently in accordance with its
articles; and
(B) determine that the licensee will be able
both prior to licensing and prior to approving
any request for financing, to make periodic
payments on any debt of the company which is
interest bearing and shall take into
consideration the income which the company
anticipates on its contemplated investments,
the experience of the company's owners and
managers, the history of the company as an
entity, if any, and the company's financial
resources.
(4) Exemption from capital requirements.--The
Administrator may, in the discretion of the
Administrator, approve leverage for any licensee
licensed under subsection (c) or (d) of section 301
before the date of enactment of the Small Business
Program Improvement Act of 1996 that does not meet the
capital requirements of paragraph (1), if--
(A) the licensee certifies in writing that
not less 50 percent of the aggregate dollar
amount of its financings after the date of
enactment of the Small Business Program
Improvement Act of 1996 will be provided to
smaller enterprises; and
(B) the Administrator determines that such
action would not create or otherwise contribute
to an unreasonable risk of default or loss to
the United States Government.
(b) Financial Institution Investments.--
(1) Certain banks.--Notwithstanding the provisions of
section 6(a)(1) of the Bank Holding Company Act of
1956, any national bank, or any member bank of the
Federal Reserve System or nonmember insured bank to the
extent permitted under applicable State law, may invest
in any 1 or more small business investment companies,
or in any entity established to invest solely in small
business investment companies, except that in no event
shall the total amount of such investments of any such
bank exceed 5 percent of the capital and surplus of the
bank or, subject to the approval of the appropriate
Federal banking agency, 15 percent of such capital and
surplus.
(2) Certain savings associations.--Notwithstanding
any other provision of law, any Federal savings
association may invest in any one or more small
business investment companies, or in any entity
established to invest solely in small business
investment companies, except that in no event may the
total amount of such investments by any such Federal
savings association exceed 5 percent of the capital and
surplus of the Federal savings association or, subject
to the approval of the appropriate Federal banking
agency, 15 percent of such capital and surplus.
(3) Appropriate federal banking agency defined.--For
purposes of this subsection, the term ``appropriate
Federal banking agency'' has the meaning given that
term under section 3 of the Federal Deposit Insurance
Act.
(c) Diversification of Ownership.--The Administrator shall
ensure that the management of each licensee licensed after the
date of enactment of the Small Business Program Improvement Act
of 1996 is sufficiently diversified from and unaffiliated with
the ownership of the licensee in a manner that ensures
independence and objectivity in the financial management and
oversight of the investments and operations of the licensee.
* * * * * * *
----------
GRAMM-LEACH-BLILEY ACT
* * * * * * *
TITLE V--PRIVACY
Subtitle A--Disclosure of Nonpublic Personal Information
* * * * * * *
SEC. 503. DISCLOSURE OF INSTITUTION PRIVACY POLICY.
(a) Disclosure Required.--At the time of establishing a
customer relationship with a consumer and not less than
annually during the continuation of such relationship, a
financial institution shall provide a clear and conspicuous
disclosure to such consumer, in writing or in electronic form
or other form permitted by the regulations prescribed under
section 504, of such financial institution's policies and
practices with respect to--
(1) disclosing nonpublic personal information to
affiliates and nonaffiliated third parties, consistent
with section 502, including the categories of
information that may be disclosed;
(2) disclosing nonpublic personal information of
persons who have ceased to be customers of the
financial institution; and
(3) protecting the nonpublic personal information of
consumers.
(b) Regulations.--Disclosures required by subsection (a)
shall be made in accordance with the regulations prescribed
under section 504.
(c) Information To Be Included.--The disclosure required by
subsection (a) shall include--
(1) the policies and practices of the institution
with respect to disclosing nonpublic personal
information to nonaffiliated third parties, other than
agents of the institution, consistent with section 502
of this subtitle, and including--
(A) the categories of persons to whom the
information is or may be disclosed, other than
the persons to whom the information may be
provided pursuant to section 502(e); and
(B) the policies and practices of the
institution with respect to disclosing of
nonpublic personal information of persons who
have ceased to be customers of the financial
institution;
(2) the categories of nonpublic personal information
that are collected by the financial institution;
(3) the policies that the institution maintains to
protect the confidentiality and security of nonpublic
personal information in accordance with section 501;
and
(4) the disclosures required, if any, under section
603(d)(2)(A)(iii) of the Fair Credit Reporting Act.
(d) Exemption for Certified Public Accountants.--
(1) In general.--The disclosure requirements of
subsection (a) do not apply to any person, to the
extent that the person is--
(A) a certified public accountant;
(B) certified or licensed for such purpose by
a State; and
(C) subject to any provision of law, rule, or
regulation issued by a legislative or
regulatory body of the State, including rules
of professional conduct or ethics, that
prohibits disclosure of nonpublic personal
information without the knowing and expressed
consent of the consumer.
(2) Limitation.--Nothing in this subsection shall be
construed to exempt or otherwise exclude any financial
institution that is affiliated or becomes affiliated
with a certified public accountant described in
paragraph (1) from any provision of this section.
(3) Definitions.--For purposes of this subsection,
the term ``State'' means any State or territory of the
United States, the District of Columbia, Puerto Rico,
Guam, American Samoa, the Trust Territory of the
Pacific Islands, the Virgin Islands, or the Northern
Mariana Islands.
(e) Model Forms.--
(1) In general.--The agencies referred to in section
504(a)(1) shall jointly develop a model form which may
be used, at the option of the financial institution,
for the provision of disclosures under this section.
(2) Format.--A model form developed under paragraph
(1) shall--
(A) be comprehensible to consumers, with a
clear format and design;
(B) provide for clear and conspicuous
disclosures;
(C) enable consumers easily to identify the
sharing practices of a financial institution
and to compare privacy practices among
financial institutions; and
(D) be succinct, and use an easily readable
type font.
(3) Timing.--A model form required to be developed by
this subsection shall be issued in proposed form for
public comment not later than 180 days after the date
of enactment of this subsection.
(4) Safe harbor.--Any financial institution that
elects to provide the model form developed by the
agencies under this subsection shall be deemed to be in
compliance with the disclosures required under this
section.
(f) Exception to Annual Notice Requirement.--A financial
institution that--
(1) provides nonpublic personal information only in
accordance with the provisions of subsection (b)(2) or
(e) of section 502 or regulations prescribed under
section 504(b), and
(2) has not changed its policies and practices with
regard to disclosing nonpublic personal information
from the policies and practices that were disclosed in
the most recent disclosure sent to consumers in
accordance with this section,
shall not be required to provide an annual disclosure under
this section until such time as the financial institution fails
to comply with any criteria described in paragraph (1) or (2).
(g) Additional Exception to Annual Notice Requirement.--
(1) In general.--A vehicle financial company that has
not changed its policies and practices with regard to
disclosing nonpublic personal information from the
policies and practices that were disclosed in the most
recent disclosure sent to consumers in accordance with
this section shall not be required to provide an annual
disclosure under this section if--
(A) the vehicle financial company makes its
current policy available to consumers on its
website and via mail upon written request sent
to a designated address identified for the
purpose of requesting the policy or upon
telephone request made using a toll free
consumer service telephone number;
(B) the vehicle financial company
conspicuously notifies consumers of the
availability of the current policy, including--
(i) with respect to consumers who are
entitled to a periodic billing
statement, a message on the front page
of each periodic billing statement; and
(ii) with respect to consumers who
are not entitled to a periodic billing
statement, through other reasonable
means such as through a link on the
landing page of the company's website
or with other written communication,
including electronic communication,
sent to the consumer; and
(C) the vehicle financial company--
(i) provides consumers with the
ability to opt out, subject to any
exemption or exception provided under
subsection (b)(2) or (e) of section 502
or under regulations prescribed under
section 504(b), of having the
consumer's nonpublic personal
information disclosed to a
nonaffiliated third party; and
(ii) includes a description about
where to locate the procedures for a
consumer to select such opt out in each
periodic billing statement sent to the
consumer.
(2) Treatment of multiple policies.--If a vehicle
financial company maintains more than one set of
policies described under paragraph (1) that vary
depending on the consumer's account status or State of
residence, the vehicle financial company may comply
with the website posting requirement in paragraph
(1)(A) by posting all of such policies to the public
section of the vehicle financial company's website,
with instructions for choosing the applicable policy.
(3) Vehicle financial company defined.--For purposes
of this subsection, the term ``vehicle financial
company'' means--
(A) a financial institution that--
(i) is regularly engaged in the
business of extending credit for the
purchase of vehicles;
(ii) is affiliated with a vehicle
manufacturer; and
(iii) only shares nonpublic personal
information of consumers with
nonaffiliated third parties that are
vehicle dealers; or
(B) a financial institution that--
(i) regularly engages in the business
of extending credit for the purchase or
lease of vehicles from vehicle dealers;
or
(ii) purchases vehicle installment
sales contracts or leases from vehicle
dealers.
* * * * * * *
----------
INVESTMENT COMPANY ACT OF 1940
TITLE I--INVESTMENT COMPANIES
* * * * * * *
accounts and records
Sec. 31. (a) Maintenance of Records.--
(1) In general.--Each registered investment company,
and each underwriter, broker, dealer, or investment
adviser that is a majority-owned subsidiary of such a
company, shall maintain and preserve such records (as
defined in section 3(a)(37) of the Securities Exchange
Act of 1934) for such period or periods as the
Commission, by rules and regulations, may prescribe as
necessary or appropriate in the public interest or for
the protection of investors. Each investment adviser
that is not a majority-owned subsidiary of, and each
depositor of any registered investment company, and
each principal underwriter for any registered
investment company other than a closed-end company,
shall maintain and preserve for such period or periods
as the Commission shall prescribe by rules and
regulations, such records as are necessary or
appropriate to record such person's transactions with
such registered company. Each person having custody or
use of the securities, deposits, or credits of a
registered investment company shall maintain and
preserve all records that relate to the custody or use
by such person of the securities, deposits, or credits
of the registered investment company for such period or
periods as the Commission, by rule or regulation, may
prescribe, as necessary or appropriate in the public
interest or for the protection of investors.
(2) Minimizing compliance burden.--In exercising its
authority under this subsection, the Commission shall
take such steps as it deems necessary or appropriate,
consistent with the public interest and for the
protection of investors, to avoid unnecessary
recordkeeping by, and minimize the compliance burden
on, persons required to maintain records under this
subsection (hereafter in this section referred to as
``subject persons''). Such steps shall include
considering, and requesting public comment on--
(A) feasible alternatives that minimize the
recordkeeping burdens on subject persons;
(B) the necessity of such records in view of
the public benefits derived from the
independent scrutiny of such records through
Commission examination;
(C) the costs associated with maintaining the
information that would be required to be
reflected in such records; and
(D) the effects that a proposed recordkeeping
requirement would have on internal compliance
policies and procedures.
(b) Examinations of Records.--
(1) In general.--All records required to be
maintained and preserved in accordance with subsection
(a) shall be subject at any time and from time to time
to such reasonable periodic, special, and other
examinations by the Commission, or any member or
representative thereof, as the Commission may
prescribe.
(2) Availability.--For purposes of examinations
referred to in paragraph (1), any subject person shall
make available to the Commission or its representatives
any copies or extracts from such records as may be
prepared without undue effort, expense, or delay as the
Commission or its representatives may reasonably
request.
(3) Commission action.--The Commission shall exercise
its authority under this subsection with due regard for
the benefits of internal compliance policies and
procedures and the effective implementation and
operation thereof.
(4) Records of persons with custody or use.--
(A) In general.--Records of persons having
custody or use of the securities, deposits, or
credits of a registered investment company that
relate to such custody or use, are subject at
any time, or from time to time, to such
reasonable periodic, special, or other
examinations and other information and document
requests by representatives of the Commission,
as the Commission deems necessary or
appropriate in the public interest or for the
protection of investors.
(B) Certain persons subject to other
regulation.--Any person that is subject to
regulation and examination by a Federal
financial institution regulatory agency (as
such term is defined under section 212(c)(2) of
title 18, United States Code) may satisfy any
examination request, information request, or
document request described under subparagraph
(A), by providing to the Commission a detailed
listing, in writing, of the securities,
deposits, or credits of the registered
investment company within the custody or use of
such person.
(c) Regulatory Authority.--The Commission may, in the public
interest or for the protection of investors, issue rules and
regulations providing for a reasonable degree of uniformity in
the accounting policies and principles to be followed by
registered investment companies in maintaining their accounting
records and in preparing financial statements required pursuant
to this title.
(d) Exemption Authority.--The Commission, upon application
made by any registered investment company, may by order exempt
a specific transaction or transactions from the provisions of
any rule or regulation made pursuant to subsection (e), if the
Commission finds that such rule or regulation should not
reasonably be applied to such transaction.
(e) Procedure for Obtaining Certain Intellectual Property.--
The Commission is not authorized to compel under this title an
investment company to produce or furnish source code, including
algorithmic trading source code or similar intellectual
property that forms the basis for design of the source code, to
the Commission unless the Commission first issues a subpoena.
* * * * * * *
----------
INVESTMENT ADVISERS ACT OF 1940
* * * * * * *
TITLE II--INVESTMENT ADVISERS
* * * * * * *
annual and other reports
Sec. 204. (a) In General.--Every investment adviser who makes
use of the mails or of any means or instrumentality of
interstate commerce in connection with his or its business as
an investment adviser (other than one specifically exempted
from registration pursuant to section 203(b) of this title),
shall make and keep for prescribed periods such records (as
defined in section 3(a)(37) of the Securities Exchange Act of
1934), furnish such copies thereof, and make and disseminate
such reports as the Commission, by rule, may prescribe as
necessary or appropriate in the public interest or for the
protection of investors. All records (as so defined) of such
investment advisers are subject at any time, or from time to
time, to such reasonable periodic, special, or other
examinations by representatives of the Commission as the
Commission deems necessary or appropriate in the public
interest or for the protection of investors.
(b) Records and Reports of Private Funds.--
(1) In general.--The Commission may require any
investment adviser registered under this title--
(A) to maintain such records of, and file
with the Commission such reports regarding,
private funds advised by the investment
adviser, as necessary and appropriate in the
public interest and for the protection of
investors, or for the assessment of systemic
risk by the Financial Stability Oversight
Council (in this subsection referred to as the
``Council''); and
(B) to provide or make available to the
Council those reports or records or the
information contained therein.
(2) Treatment of records.--The records and reports of
any private fund to which an investment adviser
registered under this title provides investment advice
shall be deemed to be the records and reports of the
investment adviser.
(3) Required information.--The records and reports
required to be maintained by an investment adviser and
subject to inspection by the Commission under this
subsection shall include, for each private fund advised
by the investment adviser, a description of--
(A) the amount of assets under management and
use of leverage, including off-balance-sheet
leverage;
(B) counterparty credit risk exposure;
(C) trading and investment positions;
(D) valuation policies and practices of the
fund;
(E) types of assets held;
(F) side arrangements or side letters,
whereby certain investors in a fund obtain more
favorable rights or entitlements than other
investors;
(G) trading practices; and
(H) such other information as the Commission,
in consultation with the Council, determines is
necessary and appropriate in the public
interest and for the protection of investors or
for the assessment of systemic risk, which may
include the establishment of different
reporting requirements for different classes of
fund advisers, based on the type or size of
private fund being advised.
(4) Maintenance of records.--An investment adviser
registered under this title shall maintain such records
of private funds advised by the investment adviser for
such period or periods as the Commission, by rule, may
prescribe as necessary and appropriate in the public
interest and for the protection of investors, or for
the assessment of systemic risk.
(5) Filing of records.--The Commission shall issue
rules requiring each investment adviser to a private
fund to file reports containing such information as the
Commission deems necessary and appropriate in the
public interest and for the protection of investors or
for the assessment of systemic risk.
(6) Examination of records.--
(A) Periodic and special examinations.--The
Commission--
(i) shall conduct periodic
inspections of the records of private
funds maintained by an investment
adviser registered under this title in
accordance with a schedule established
by the Commission; and
(ii) may conduct at any time and from
time to time such additional, special,
and other examinations as the
Commission may prescribe as necessary
and appropriate in the public interest
and for the protection of investors, or
for the assessment of systemic risk.
(B) Availability of records.--An investment
adviser registered under this title shall make
available to the Commission any copies or
extracts from such records as may be prepared
without undue effort, expense, or delay, as the
Commission or its representatives may
reasonably request.
(7) Information sharing.--
(A) In general.--The Commission shall make
available to the Council copies of all reports,
documents, records, and information filed with
or provided to the Commission by an investment
adviser under this subsection as the Council
may consider necessary for the purpose of
assessing the systemic risk posed by a private
fund.
(B) Confidentiality.--The Council shall
maintain the confidentiality of information
received under this paragraph in all such
reports, documents, records, and information,
in a manner consistent with the level of
confidentiality established for the Commission
pursuant to paragraph (8). The Council shall be
exempt from section 552 of title 5, United
States Code, with respect to any information in
any report, document, record, or information
made available, to the Council under this
subsection.
(8) Commission confidentiality of reports.--
Notwithstanding any other provision of law, the
Commission may not be compelled to disclose any report
or information contained therein required to be filed
with the Commission under this subsection, except that
nothing in this subsection authorizes the Commission--
(A) to withhold information from Congress,
upon an agreement of confidentiality; or
(B) prevent the Commission from complying
with--
(i) a request for information from
any other Federal department or agency
or any self-regulatory organization
requesting the report or information
for purposes within the scope of its
jurisdiction; or
(ii) an order of a court of the
United States in an action brought by
the United States or the Commission.
(9) Other recipients confidentiality.--Any
department, agency, or self-regulatory organization
that receives reports or information from the
Commission under this subsection shall maintain the
confidentiality of such reports, documents, records,
and information in a manner consistent with the level
of confidentiality established for the Commission under
paragraph (8).
(10) Public information exception.--
(A) In general.--The Commission, the Council,
and any other department, agency, or self-
regulatory organization that receives
information, reports, documents, records, or
information from the Commission under this
subsection, shall be exempt from the provisions
of section 552 of title 5, United States Code,
with respect to any such report, document,
record, or information. Any proprietary
information of an investment adviser
ascertained by the Commission from any report
required to be filed with the Commission
pursuant to this subsection shall be subject to
the same limitations on public disclosure as
any facts ascertained during an examination, as
provided by section 210(b) of this title.
(B) Proprietary information.--For purposes of
this paragraph, proprietary information
includes sensitive, non-public information
regarding--
(i) the investment or trading
strategies of the investment adviser;
(ii) analytical or research
methodologies;
(iii) trading data;
(iv) computer hardware or software
containing intellectual property; and
(v) any additional information that
the Commission determines to be
proprietary.
(11) Annual report to congress.--The Commission shall
report annually to Congress on how the Commission has
used the data collected pursuant to this subsection to
monitor the markets for the protection of investors and
the integrity of the markets.
(c) Filing Depositories.--The Commission may, by rule,
require an investment adviser--
(1) to file with the Commission any fee, application,
report, or notice required to be filed by this title or
the rules issued under this title through any entity
designated by the Commission for that purpose; and
(2) to pay the reasonable costs associated with such
filing and the establishment and maintenance of the
systems required by subsection (c).
(d) Access to Disciplinary and Other Information.--
(1) Maintenance of system to respond to inquiries.--
(A) In general.--The Commission shall require
the entity designated by the Commission under
subsection (b)(1) to establish and maintain a
toll-free telephone listing, or a readily
accessible electronic or other process, to
receive and promptly respond to inquiries
regarding registration information (including
disciplinary actions, regulatory, judicial, and
arbitration proceedings, and other information
required by law or rule to be reported)
involving investment advisers and persons
associated with investment advisers.
(B) Applicability.--This subsection shall
apply to any investment adviser (and the
persons associated with that adviser), whether
the investment adviser is registered with the
Commission under section 203 or regulated
solely by a State, as described in section
203A.
(2) Recovery of costs.--An entity designated by the
Commission under subsection (b)(1) may charge persons
making inquiries, other than individual investors,
reasonable fees for responses to inquiries described in
paragraph (1).
(3) Limitation on liability.--An entity designated by
the Commission under subsection (b)(1) shall not have
any liability to any person for any actions taken or
omitted in good faith under this subsection.
[(d)] (e) Records of Persons With Custody or Use.--
(1) In general.--Records of persons having custody or
use of the securities, deposits, or credits of a
client, that relate to such custody or use, are subject
at any time, or from time to time, to such reasonable
periodic, special, or other examinations and other
information and document requests by representatives of
the Commission, as the Commission deems necessary or
appropriate in the public interest or for the
protection of investors.
(2) Certain persons subject to other regulation.--Any
person that is subject to regulation and examination by
a Federal financial institution regulatory agency (as
such term is defined under section 212(c)(2) of title
18, United States Code) may satisfy any examination
request, information request, or document request
described under paragraph (1), by providing the
Commission with a detailed listing, in writing, of the
securities, deposits, or credits of the client within
the custody or use of such person.
(f) Procedure for Obtaining Certain Intellectual Property.--
The Commission is not authorized to compel under this title an
investment adviser to produce or furnish source code, including
algorithmic trading source code or similar intellectual
property that forms the basis for design of the source code, to
the Commission unless the Commission first issues a subpoena.
* * * * * * *
----------
FINANCIAL STABILITY ACT OF 2010
* * * * * * *
TITLE I--FINANCIAL STABILITY
* * * * * * *
Subtitle A--Financial Stability Oversight Council
* * * * * * *
SEC. 113. AUTHORITY TO REQUIRE SUPERVISION AND REGULATION OF CERTAIN
NONBANK FINANCIAL COMPANIES.
(a) U.S. Nonbank Financial Companies Supervised by the Board
of Governors.--
(1) Determination.--The Council, on a nondelegable
basis and by a vote of not fewer than \2/3\ of the
voting members then serving, including an affirmative
vote by the Chairperson, may determine that a U.S.
nonbank financial company shall be supervised by the
Board of Governors and shall be subject to prudential
standards, in accordance with this title, if the
Council determines that material financial distress at
the U.S. nonbank financial company, or the nature,
scope, size, scale, concentration, interconnectedness,
or mix of the activities of the U.S. nonbank financial
company, could pose a threat to the financial stability
of the United States.
(2) Considerations.--In making a determination under
paragraph (1), the Council shall consider--
(A) the extent of the leverage of the
company;
(B) the extent and nature of the off-balance-
sheet exposures of the company;
(C) the extent and nature of the transactions
and relationships of the company with other
significant nonbank financial companies and
significant bank holding companies;
(D) the importance of the company as a source
of credit for households, businesses, and State
and local governments and as a source of
liquidity for the United States financial
system;
(E) the importance of the company as a source
of credit for low-income, minority, or
underserved communities, and the impact that
the failure of such company would have on the
availability of credit in such communities;
(F) the extent to which assets are managed
rather than owned by the company, and the
extent to which ownership of assets under
management is diffuse;
(G) the nature, scope, size, scale,
concentration, interconnectedness, and mix of
the activities of the company;
(H) the degree to which the company is
already regulated by 1 or more primary
financial regulatory agencies;
(I) the amount and nature of the financial
assets of the company;
(J) the amount and types of the liabilities
of the company, including the degree of
reliance on short-term funding; [and]
(K) the appropriateness of the imposition of
prudential standards as opposed to other forms
of regulation to mitigate the identified risks;
and
[(K)] (L) any other risk-related factors that
the Council deems appropriate.
(b) Foreign Nonbank Financial Companies Supervised by the
Board of Governors.--
(1) Determination.--The Council, on a nondelegable
basis and by a vote of not fewer than \2/3\ of the
voting members then serving, including an affirmative
vote by the Chairperson, may determine that a foreign
nonbank financial company shall be supervised by the
Board of Governors and shall be subject to prudential
standards, in accordance with this title, if the
Council determines that material financial distress at
the foreign nonbank financial company, or the nature,
scope, size, scale, concentration, interconnectedness,
or mix of the activities of the foreign nonbank
financial company, could pose a threat to the financial
stability of the United States.
(2) Considerations.--In making a determination under
paragraph (1), the Council shall consider--
(A) the extent of the leverage of the
company;
(B) the extent and nature of the United
States related off-balance-sheet exposures of
the company;
(C) the extent and nature of the transactions
and relationships of the company with other
significant nonbank financial companies and
significant bank holding companies;
(D) the importance of the company as a source
of credit for United States households,
businesses, and State and local governments and
as a source of liquidity for the United States
financial system;
(E) the importance of the company as a source
of credit for low-income, minority, or
underserved communities in the United States,
and the impact that the failure of such company
would have on the availability of credit in
such communities;
(F) the extent to which assets are managed
rather than owned by the company and the extent
to which ownership of assets under management
is diffuse;
(G) the nature, scope, size, scale,
concentration, interconnectedness, and mix of
the activities of the company;
(H) the extent to which the company is
subject to prudential standards on a
consolidated basis in its home country that are
administered and enforced by a comparable
foreign supervisory authority;
(I) the amount and nature of the United
States financial assets of the company;
(J) the amount and nature of the liabilities
of the company used to fund activities and
operations in the United States, including the
degree of reliance on short-term funding; [and]
(K) the appropriateness of the imposition of
prudential standards as opposed to other forms
of regulation to mitigate the identified risks;
and
[(K)] (L) any other risk-related factors that
the Council deems appropriate.
(c) Antievasion.--
(1) Determinations.--In order to avoid evasion of
this title, the Council, on its own initiative or at
the request of the Board of Governors, may determine,
on a nondelegable basis and by a vote of not fewer than
\2/3\ of the voting members then serving, including an
affirmative vote by the Chairperson, that--
(A) material financial distress related to,
or the nature, scope, size, scale,
concentration, interconnectedness, or mix of,
the financial activities conducted directly or
indirectly by a company incorporated or
organized under the laws of the United States
or any State or the financial activities in the
United States of a company incorporated or
organized in a country other than the United
States would pose a threat to the financial
stability of the United States, based on
consideration of the factors in subsection
(a)(2) or (b)(2), as applicable;
(B) the company is organized or operates in
such a manner as to evade the application of
this title; and
(C) such financial activities of the company
shall be supervised by the Board of Governors
and subject to prudential standards in
accordance with this title, consistent with
paragraph (3).
(2) Report.--Upon making a determination under
paragraph (1), the Council shall submit a report to the
appropriate committees of Congress detailing the
reasons for making such determination.
(3) Consolidated supervision of only financial
activities; establishment of an intermediate holding
company.--
(A) Establishment of an intermediate holding
company.--Upon a determination under paragraph
(1), the company that is the subject of the
determination may establish an intermediate
holding company in which the financial
activities of such company and its subsidiaries
shall be conducted (other than the activities
described in section 167(b)(2)) in compliance
with any regulations or guidance provided by
the Board of Governors. Such intermediate
holding company shall be subject to the
supervision of the Board of Governors and to
prudential standards under this title as if the
intermediate holding company were a nonbank
financial company supervised by the Board of
Governors.
(B) Action of the board of governors.--To
facilitate the supervision of the financial
activities subject to the determination in
paragraph (1), the Board of Governors may
require a company to establish an intermediate
holding company, as provided for in section
167, which would be subject to the supervision
of the Board of Governors and to prudential
standards under this title, as if the
intermediate holding company were a nonbank
financial company supervised by the Board of
Governors.
(4) Notice and opportunity for hearing and final
determination; judicial review.--Subsections (d)
through (h) shall apply to determinations made by the
Council pursuant to paragraph (1) in the same manner as
such subsections apply to nonbank financial companies.
(5) Covered financial activities.--For purposes of
this subsection, the term ``financial activities''--
(A) means activities that are financial in
nature (as defined in section 4(k) of the Bank
Holding Company Act of 1956);
(B) includes the ownership or control of one
or more insured depository institutions; and
(C) does not include internal financial
activities conducted for the company or any
affiliate thereof, including internal treasury,
investment, and employee benefit functions.
(6) Only financial activities subject to prudential
supervision.--Nonfinancial activities of the company
shall not be subject to supervision by the Board of
Governors and prudential standards of the Board. For
purposes of this Act, the financial activities that are
the subject of the determination in paragraph (1) shall
be subject to the same requirements as a nonbank
financial company supervised by the Board of Governors.
Nothing in this paragraph shall prohibit or limit the
authority of the Board of Governors to apply prudential
standards under this title to the financial activities
that are subject to the determination in paragraph (1).
[(d) Reevaluation and Rescission.--The Council shall--
[(1) not less frequently than annually, reevaluate
each determination made under subsections (a) and (b)
with respect to such nonbank financial company
supervised by the Board of Governors; and
[(2) rescind any such determination, if the Council,
by a vote of not fewer than \2/3\ of the voting members
then serving, including an affirmative vote by the
Chairperson, determines that the nonbank financial
company no longer meets the standards under subsection
(a) or (b), as applicable.
[(e) Notice and Opportunity for Hearing and Final
Determination.--
[(1) In general.--The Council shall provide to a
nonbank financial company written notice of a proposed
determination of the Council, including an explanation
of the basis of the proposed determination of the
Council, that a nonbank financial company shall be
supervised by the Board of Governors and shall be
subject to prudential standards in accordance with this
title.
[(2) Hearing.--Not later than 30 days after the date
of receipt of any notice of a proposed determination
under paragraph (1), the nonbank financial company may
request, in writing, an opportunity for a written or
oral hearing before the Council to contest the proposed
determination. Upon receipt of a timely request, the
Council shall fix a time (not later than 30 days after
the date of receipt of the request) and place at which
such company may appear, personally or through counsel,
to submit written materials (or, at the sole discretion
of the Council, oral testimony and oral argument).
[(3) Final determination.--Not later than 60 days
after the date of a hearing under paragraph (2), the
Council shall notify the nonbank financial company of
the final determination of the Council, which shall
contain a statement of the basis for the decision of
the Council.
[(4) No hearing requested.--If a nonbank financial
company does not make a timely request for a hearing,
the Council shall notify the nonbank financial company,
in writing, of the final determination of the Council
under subsection (a) or (b), as applicable, not later
than 10 days after the date by which the company may
request a hearing under paragraph (2).]
(d) Reevaluation and Rescission.--
(1) Annual reevaluation.--Not less frequently than
annually, the Council shall reevaluate each
determination made under subsections (a) and (b) with
respect to a nonbank financial company supervised by
the Board of Governors and shall--
(A) provide written notice to the nonbank
financial company being reevaluated and afford
such company an opportunity to submit written
materials, within such time as the Council
determines to be appropriate (but which shall
be not less than 30 days after the date of
receipt by the company of such notice), to
contest the determination, including materials
concerning whether, in the company's view,
material financial distress at the company, or
the nature, scope, size, scale, concentration,
interconnectedness, or mix of the activities of
the company could pose a threat to the
financial stability of the United States;
(B) provide an opportunity for the nonbank
financial company to meet with the Council to
present the information described in
subparagraph (A); and
(C) if the Council does not rescind the
determination, provide notice to the nonbank
financial company, its primary financial
regulatory agency and the primary financial
regulatory agency of any of the company's
significant subsidiaries of the reasons for the
Council's decision, which notice shall address
with specificity how the Council assessed the
material factors presented by the company under
subparagraphs (A) and (B).
(2) Periodic reevaluation.--
(A) Review.--Every 5 years after the date of
a final determination with respect to a nonbank
financial company under subsection (a) or (b),
as applicable, the nonbank financial company
may submit a written request to the Council for
a reevaluation of such determination. Upon
receipt of such a request, the Council shall
conduct a reevaluation of such determination
and hold a vote on whether to rescind such
determination.
(B) Procedures.--Upon receipt of a written
request under paragraph (A), the Council shall
fix a time (not earlier than 30 days after the
date of receipt of the request) and place at
which such company may appear, personally or
through counsel, to--
(i) submit written materials (which
may include a plan to modify the
company's business, structure, or
operations, which shall specify the
length of the implementation period);
and
(ii) provide oral testimony and oral
argument before the members of the
Council.
(C) Treatment of plan.--If the company
submits a plan in accordance with subparagraph
(B)(i), the Council shall consider whether the
plan, if implemented, would cause the company
to no longer meet the standards for a final
determination under subsection (a) or (b), as
applicable. The Council shall provide the
nonbank financial company an opportunity to
revise the plan after consultation with the
Council.
(D) Explanation for certain companies.--With
respect to a reevaluation under this paragraph
where the determination being reevaluated was
made before the date of enactment of this
paragraph, the nonbank financial company may
require the Council, as part of such
reevaluation, to explain with specificity the
basis for such determination.
(3) Rescission of determination.--
(A) In general.--If the Council, by a vote of
not fewer than \2/3\ of the voting members then
serving, including an affirmative vote by the
Chairperson, determines under this subsection
that a nonbank financial company no longer
meets the standards for a final determination
under subsection (a) or (b), as applicable, the
Council shall rescind such determination.
(B) Approval of company plan.--Approval by
the Council of a plan submitted or revised in
accordance with paragraph (2) shall require a
vote of not fewer than \2/3\ of the voting
members then serving, including an affirmative
vote by the Chairperson. If such plan is
approved by the Council, the company shall
implement the plan during the period identified
in the plan, except that the Council, in its
sole discretion and upon request from the
company, may grant one or more extensions of
the implementation period. After the end of the
implementation period, including any extensions
granted by the Council, the Council shall
proceed to a vote as described under
subparagraph (A).
(e) Requirements for Proposed Determination, Notice and
Opportunity for Hearing, and Final Determination.--
(1) Notice of identification for initial evaluation
and opportunity for voluntary submission.--Upon
identifying a nonbank financial company for
comprehensive analysis of the potential for the nonbank
company to pose a threat to the financial stability of
the United States, the Council shall provide the
nonbank financial company with--
(A) written notice that explains with
specificity the basis for so identifying the
company, a copy of which shall be provided to
the company's primary financial regulatory
agency;
(B) an opportunity to submit written
materials for consideration by the Council as
part of the Council's initial evaluation of the
risk profile and characteristics of the
company;
(C) an opportunity to meet with the Council
to discuss the Council's analysis; and
(D) a list of the public sources of
information being considered by the Council as
part of such analysis.
(2) Requirements before making a proposed
determination.--Before making a proposed determination
with respect to a nonbank financial company under
paragraph (3), the Council shall--
(A) by a vote of not fewer than \2/3\ of the
voting members then serving, including an
affirmative vote by the Chairperson, approve a
resolution that identifies with specificity any
risks to the financial stability of the United
States the Council has identified relating to
the nonbank financial company;
(B) with respect to nonbank financial company
with a primary financial regulatory agency,
provide a copy of the resolution described
under subparagraph (A) to the primary financial
regulatory agency and provide such agency with
at least 180 days from the receipt of the
resolution to--
(i) consider the risks identified in
the resolution; and
(ii) provide a written response to
the Council that includes its
assessment of the risks identified and
the degree to which they are or could
be addressed by existing regulation
and, as appropriate, issue proposed
regulations or undertake other
regulatory action to mitigate the
identified risks;
(C) provide the nonbank financial company
with written notice that the Council--
(i) is considering whether to make a
proposed determination with respect to
the nonbank financial company under
subsection (a) or (b), as applicable,
which notice explains with specificity
the basis for the Council's
consideration, including any aspects of
the company's operations or activities
that are a primary focus for the
Council; or
(ii) has determined not to subject
the company to further review, which
action shall not preclude the Council
from issuing a notice to the company
under subparagraph (1)(A) at a future
time; and
(D) in the case of a notice to the nonbank
financial company under subparagraph (C)(i),
provide the company with--
(i) an opportunity to meet with the
Council to discuss the Council's
analysis;
(ii) an opportunity to submit written
materials, within such time as the
Council deems appropriate (but not less
than 30 days after the date of receipt
by the company of the notice described
under clause (i)), to the Council to
inform the Council's consideration of
the nonbank financial company for a
proposed determination, including
materials concerning the company's
views as to whether it satisfies the
standard for determination set forth in
subsection (a) or (b), as applicable;
(iii) an explanation of how any
request by the Council for information
from the nonbank financial company
relates to potential risks to the
financial stability of the United
States and the Council's analysis of
the company;
(iv) written notice when the Council
deems its evidentiary record regarding
such nonbank financial company to be
complete; and
(v) an opportunity to meet with the
members of the Council.
(3) Proposed determination.--
(A) Voting.--The Council may, by a vote of
not fewer than \2/3\ of the voting members then
serving, including an affirmative vote by the
Chairperson, propose to make a determination in
accordance with the provisions of subsection
(a) or (b), as applicable, with respect to a
nonbank financial company.
(B) Deadline for making a proposed
determination.--With respect to a nonbank
financial company provided with a written
notice under paragraph (2)(C)(i), if the
Council does not provide the company with the
written notice of a proposed determination
described under paragraph (4) within the 180-
day period following the date on which the
Council notifies the company under paragraph
(2)(C) that the evidentiary record is complete,
the Council may not make such a proposed
determination with respect to such company
unless the Council repeats the procedures
described under paragraph (2).
(C) Review of actions of primary financial
regulatory agency.--With respect to a nonbank
financial company with a primary financial
regulatory agency, the Council may not vote
under subparagraph (A) to make a proposed
determination unless--
(i) the Council first determines that
any proposed regulations or other
regulatory actions taken by the primary
financial regulatory agency after
receipt of the resolution described
under paragraph (2)(A) are insufficient
to mitigate the risks identified in the
resolution;
(ii) the primary financial regulatory
agency has notified the Council that
the agency has no proposed regulations
or other regulatory actions to mitigate
the risks identified in the resolution;
or
(iii) the period allowed by the
Council under paragraph (2)(B) has
elapsed and the primary financial
regulatory agency has taken no action
in response to the resolution.
(4) Notice of proposed determination.--The Council
shall--
(A) provide to a nonbank financial company
written notice of a proposed determination of
the Council, including an explanation of the
basis of the proposed determination of the
Council, that a nonbank financial company shall
be supervised by the Board of Governors and
shall be subject to prudential standards in
accordance with this title, an explanation of
the specific risks to the financial stability
of the United States presented by the nonbank
financial company, and a detailed explanation
of why existing regulations or other regulatory
action by the company's primary financial
regulatory agency, if any, is insufficient to
mitigate such risk; and
(B) provide the primary financial regulatory
agency of the nonbank financial company a copy
of the nonpublic written explanation of the
Council's proposed determination.
(5) Hearing.--
(A) In general.--Not later than 30 days after
the date of receipt of any notice of a proposed
determination under paragraph (4), the nonbank
financial company may request, in writing, an
opportunity for a written or oral hearing
before the Council to contest the proposed
determination, including the opportunity to
present a plan to modify the company's
business, structure, or operations in order to
mitigate the risks identified in the notice,
and which plan shall also include any steps the
company expects to take during the
implementation period to mitigate such risks.
(B) Grant of hearing.--Upon receipt of a
timely request, the Council shall fix a time
(not earlier than 30 days after the date of
receipt of the request) and place at which such
company may appear, personally or through
counsel, to--
(i) submit written materials (which
may include a plan to modify the
company's business, structure, or
operations); or
(ii) provide oral testimony and oral
argument to the members of the Council.
(6) Council consideration of company plan.--
(A) In general.--If a nonbank financial
company submits a plan in accordance with
paragraph (5), the Council shall, prior to
making a final determination--
(i) consider whether the plan, if
implemented, would mitigate the risks
identified in the notice under
paragraph (4); and
(ii) provide the nonbank financial
company an opportunity to revise the
plan after consultation with the
Council.
(B) Voting.--Approval by the Council of a
plan submitted under paragraph (5) or revised
under subparagraph (A)(ii) shall require a vote
of not fewer than \2/3\ of the voting members
then serving, including an affirmative vote by
the Chairperson.
(C) Implementation of approved plan.--With
respect to a nonbank financial company's plan
approved by the Council under subparagraph (B),
the company shall have one year to implement
the plan, except that the Council, in its sole
discretion and upon request from the nonbank
financial company, may grant one or more
extensions of the implementation period.
(D) Oversight of implementation.--
(i) Periodic reports.--The Council,
acting through the Office of Financial
Research, may require the submission of
periodic reports from a nonbank
financial company for the purpose of
evaluating the company's progress in
implementing a plan approved by the
Council under subparagraph (B).
(ii) Inspections.--The Council may
direct the primary financial regulatory
agency of a nonbank financial company
or its subsidiaries (or, if none, the
Board of Governors) to inspect the
company or its subsidiaries for the
purpose of evaluating the
implementation of the company's plan.
(E) Authority to rescind approval.--
(i) In general.--During the
implementation period described under
subparagraph (C), including any
extensions granted by the Council, the
Council shall retain the authority to
rescind its approval of the plan if the
Council finds, by a vote of not fewer
than \2/3\ of the voting members then
serving, including an affirmative vote
by the Chairperson, that the company's
implementation of the plan is no longer
sufficient to mitigate or prevent the
risks identified in the resolution
described under paragraph (2)(A).
(ii) Final determination vote.--The
Council may proceed to a vote on final
determination under subsection (a) or
(b), as applicable, not earlier than 10
days after providing the nonbank
financial company with written notice
that the Council has rescinded the
approval of the company's plan pursuant
to clause (i).
(F) Actions after implementation.--
(i) Evaluation of implementation.--
After the end of the implementation
period described under subparagraph
(C), including any extensions granted
by the Council, the Council shall
consider whether the plan, as
implemented by the nonbank financial
company, adequately mitigates or
prevents the risks identified in the
resolution described under paragraph
(2)(A).
(ii) Voting.--If, after performing an
evaluation under clause (i), not fewer
than \2/3\ of the voting members of the
Council then serving, including an
affirmative vote by the Chairperson,
determine that the plan, as
implemented, adequately mitigates or
prevents the identified risks, the
Council shall not make a final
determination under subsection (a) or
(b), as applicable, with respect to the
nonbank financial company and shall
notify the company of the Council's
decision to take no further action.
(7) Final council decisions.--
(A) In general.--Not later than 90 days after
the date of a hearing under paragraph (5), the
Council shall notify the nonbank financial
company of--
(i) a final determination under
subsection (a) or (b), as applicable;
(ii) the Council's approval of a plan
submitted by the nonbank financial
company under paragraph (5) or revised
under paragraph (6); or
(iii) the Council's decision to take
no further action with respect to the
nonbank financial company.
(B) Explanatory statement.--A final
determination of the Council, under subsection
(a) or (b), shall contain a statement of the
basis for the decision of the Council,
including the reasons why the Council rejected
any plan by the nonbank financial company
submitted under paragraph (5) or revised under
paragraph (6).
(C) Notice to primary financial regulatory
agency.--In the case of a final determination
under subsection (a) or (b), the Council shall
provide the primary financial regulatory agency
of the nonbank financial company a copy of the
nonpublic written explanation of the Council's
final determination.
(f) Emergency Exception.--
(1) In general.--The Council may waive or modify the
requirements of subsection (e) with respect to a
nonbank financial company, if the Council determines,
by a vote of not fewer than \2/3\ of the voting members
then serving, including an affirmative vote by the
Chairperson, that such waiver or modification is
necessary or appropriate to prevent or mitigate threats
posed by the nonbank financial company to the financial
stability of the United States.
(2) Notice.--The Council shall provide notice of a
waiver or modification under this subsection to the
nonbank financial company concerned as soon as
practicable, but not later than 24 hours after the
waiver or modification is granted.
(3) International coordination.--In making a
determination under paragraph (1), the Council shall
consult with the appropriate home country supervisor,
if any, of the foreign nonbank financial company that
is being considered for such a determination.
(4) Opportunity for hearing.--The Council shall allow
a nonbank financial company to request, in writing, an
opportunity for a written or oral hearing before the
Council to contest a waiver or modification under this
subsection, not later than 10 days after the date of
receipt of notice of the waiver or modification by the
company. Upon receipt of a timely request, the Council
shall fix a time (not later than 15 days after the date
of receipt of the request) and place at which the
nonbank financial company may appear, personally or
through counsel, to submit written materials (or, at
the sole discretion of the Council, oral testimony and
oral argument).
(5) Notice of final determination.--Not later than 30
days after the date of any hearing under paragraph (4),
the Council shall notify the subject nonbank financial
company of the final determination of the Council under
this subsection, which shall contain a statement of the
basis for the decision of the Council.
(g) Consultation.--The Council shall consult with the primary
financial regulatory agency, if any, for each nonbank financial
company or subsidiary of a nonbank financial company that is
being considered for supervision by the Board of Governors
under this section [before the Council makes any final
determination] from the outset of the Council's consideration
of the company, including before the Council makes any proposed
or final determination with respect to such nonbank financial
company under subsection (a), (b), or (c).
(h) Judicial Review.--If the Council makes a final
determination under this section with respect to a nonbank
financial company, such nonbank financial company may, not
later than 30 days after the date of receipt of the notice of
final determination under subsection (d)(2), (e)(3), or (f)(5),
bring an action in the United States district court for the
judicial district in which the home office of such nonbank
financial company is located, or in the United States District
Court for the District of Columbia, for an order requiring that
the final determination be rescinded, and the court shall, upon
review, dismiss such action or direct the final determination
to be rescinded. Review of such an action shall be limited to
whether the final determination made under this section was
arbitrary and capricious.
(i) International Coordination.--In exercising its duties
under this title with respect to foreign nonbank financial
companies, foreign-based bank holding companies, and cross-
border activities and markets, the Council shall consult with
appropriate foreign regulatory authorities, to the extent
appropriate.
(j) Public Disclosure Requirement.--The Council shall--
(1) in each case where a nonbank financial company
has been notified that it is subject to the Council's
review and the company has publicly disclosed such
fact, confirm that the nonbank financial company is
subject to the Council's review, in response to a
request from a third party;
(2) upon making a final determination, publicly
provide a written explanation of the basis for its
decision with sufficient detail to provide the public
with an understanding of the specific bases of the
Council's determination, including any assumptions
related thereof, subject to the requirements of section
112(d)(5);
(3) include, in the annual report required by section
112, the number of nonbank financial companies from the
previous year subject to preliminary analysis, further
review, and subject to a proposed or final
determination; and
(4) within 90 days after the enactment of this
subsection, publish information regarding its
methodology for calculating any quantitative thresholds
or other metrics used to identify nonbank financial
companies for analysis by the Council.
(k) Periodic Assessment of the Impact of Designations.--
(1) Assessment.--Every five years after the date of
enactment of this section, the Council shall--
(A) conduct a study of the Council's
determinations that nonbank financial companies
shall be supervised by the Board of Governors
and shall be subject to prudential standards;
and
(B) comprehensively assess the impact of such
determinations on the companies for which such
determinations were made and the wider economy,
including whether such determinations are
having the intended result of improving the
financial stability of the United States.
(2) Report.--Not later than 90 days after completing
a study required under paragraph (1), the Council shall
issue a report to the Congress that--
(A) describes all findings and conclusions
made by the Council in carrying out such study;
and
(B) identifies whether any of the Council's
determinations should be rescinded or whether
related regulations or regulatory guidance
should be modified, streamlined, expanded, or
repealed.
* * * * * * *
Subtitle C--Additional Board of Governors Authority for Certain Nonbank
Financial Companies and Bank Holding Companies
* * * * * * *
SEC. 165. ENHANCED SUPERVISION AND PRUDENTIAL STANDARDS FOR NONBANK
FINANCIAL COMPANIES SUPERVISED BY THE BOARD OF
GOVERNORS AND CERTAIN BANK HOLDING COMPANIES.
(a) In General.--
(1) Purpose.--In order to prevent or mitigate risks
to the financial stability of the United States that
could arise from the material financial distress or
failure, or ongoing activities, of large,
interconnected financial institutions, the Board of
Governors shall, on its own or pursuant to
recommendations by the Council under section 115,
establish prudential standards for nonbank financial
companies supervised by the Board of Governors and bank
holding companies with total consolidated assets equal
to or greater than $50,000,000,000 that--
(A) are more stringent than the standards and
requirements applicable to nonbank financial
companies and bank holding companies that do
not present similar risks to the financial
stability of the United States; and
(B) increase in stringency, based on the
considerations identified in subsection (b)(3).
(2) Tailored application.--
(A) In general.--In prescribing more
stringent prudential standards under this
section, the Board of Governors may, on its own
or pursuant to a recommendation by the Council
in accordance with section 115, differentiate
among companies on an individual basis or by
category, taking into consideration their
capital structure, riskiness, complexity,
financial activities (including the financial
activities of their subsidiaries), size, and
any other risk-related factors that the Board
of Governors deems appropriate to ensure that
companies with comparable risk profiles and
business models are operating under a similar
set of requirements.
(B) Adjustment of threshold for application
of certain standards.--The Board of Governors
may, pursuant to a recommendation by the
Council in accordance with section 115,
establish an asset threshold above
$50,000,000,000 for the application of any
standard established under subsections (c)
through (g).
(b) Development of Prudential Standards.--
(1) In general.--
(A) Required standards.--The Board of
Governors shall establish prudential standards
for nonbank financial companies supervised by
the Board of Governors and bank holding
companies described in subsection (a), that
shall include--
(i) risk-based capital requirements
and leverage limits, unless the Board
of Governors, in consultation with the
Council, determines that such
requirements are not appropriate for a
company subject to more stringent
prudential standards because of the
activities of such company (such as
investment company activities or assets
under management) or structure, in
which case, the Board of Governors
shall apply other standards that result
in similarly stringent risk controls;
(ii) liquidity requirements;
(iii) overall risk management
requirements;
(iv) resolution plan and credit
exposure report requirements; and
(v) concentration limits.
(B) Additional standards authorized.--The
Board of Governors may establish additional
prudential standards for nonbank financial
companies supervised by the Board of Governors
and bank holding companies described in
subsection (a), that include--
(i) a contingent capital requirement;
(ii) enhanced public disclosures;
(iii) short-term debt limits; and
(iv) such other prudential standards
as the Board or Governors, on its own
or pursuant to a recommendation made by
the Council in accordance with section
115, determines are appropriate.
(2) Standards for foreign financial companies.--In
applying the standards set forth in paragraph (1) to
any foreign nonbank financial company supervised by the
Board of Governors or foreign-based bank holding
company, the Board of Governors shall--
(A) give due regard to the principle of
national treatment and equality of competitive
opportunity; and
(B) take into account the extent to which the
foreign financial company is subject on a
consolidated basis to home country standards
that are comparable to those applied to
financial companies in the United States.
(3) Considerations.--In prescribing prudential
standards under paragraph (1), the Board of Governors
shall--
(A) take into account differences among
nonbank financial companies supervised by the
Board of Governors and bank holding companies
described in subsection (a), based on--
(i) the factors described in
subsections (a) and (b) of section 113;
(ii) whether the company owns an
insured depository institution;
(iii) nonfinancial activities and
affiliations of the company; and
(iv) any other risk-related factors
that the Board of Governors determines
appropriate;
(B) to the extent possible, ensure that small
changes in the factors listed in subsections
(a) and (b) of section 113 would not result in
sharp, discontinuous changes in the prudential
standards established under paragraph (1) of
this subsection;
(C) take into account any recommendations of
the Council under section 115; and
(D) adapt the required standards as
appropriate in light of any predominant line of
business of such company, including assets
under management or other activities for which
particular standards may not be appropriate.
(4) Consultation.--Before imposing prudential
standards or any other requirements pursuant to this
section, including notices of deficiencies in
resolution plans and more stringent requirements or
divestiture orders resulting from such notices, that
are likely to have a significant impact on a
functionally regulated subsidiary or depository
institution subsidiary of a nonbank financial company
supervised by the Board of Governors or a bank holding
company described in subsection (a), the Board of
Governors shall consult with each Council member that
primarily supervises any such subsidiary with respect
to any such standard or requirement.
(5) Report.--The Board of Governors shall submit an
annual report to Congress regarding the implementation
of the prudential standards required pursuant to
paragraph (1), including the use of such standards to
mitigate risks to the financial stability of the United
States.
(c) Contingent Capital.--
(1) In general.--Subsequent to submission by the
Council of a report to Congress under section 115(c),
the Board of Governors may issue regulations that
require each nonbank financial company supervised by
the Board of Governors and bank holding companies
described in subsection (a) to maintain a minimum
amount of contingent capital that is convertible to
equity in times of financial stress.
(2) Factors to consider.--In issuing regulations
under this subsection, the Board of Governors shall
consider--
(A) the results of the study undertaken by
the Council, and any recommendations of the
Council, under section 115(c);
(B) an appropriate transition period for
implementation of contingent capital under this
subsection;
(C) the factors described in subsection
(b)(3)(A);
(D) capital requirements applicable to the
nonbank financial company supervised by the
Board of Governors or a bank holding company
described in subsection (a), and subsidiaries
thereof; and
(E) any other factor that the Board of
Governors deems appropriate.
(d) Resolution Plan and Credit Exposure Reports.--
(1) Resolution plan.--The Board of Governors shall
require each nonbank financial company supervised by
the Board of Governors and bank holding companies
described in subsection (a) to report periodically to
the Board of Governors, the Council, and the
Corporation the plan of such company for rapid and
orderly resolution in the event of material financial
distress or failure, which shall include--
(A) information regarding the manner and
extent to which any insured depository
institution affiliated with the company is
adequately protected from risks arising from
the activities of any nonbank subsidiaries of
the company;
(B) full descriptions of the ownership
structure, assets, liabilities, and contractual
obligations of the company;
(C) identification of the cross-guarantees
tied to different securities, identification of
major counterparties, and a process for
determining to whom the collateral of the
company is pledged; and
(D) any other information that the Board of
Governors and the Corporation jointly require
by rule or order.
(2) Credit exposure report.--The Board of Governors
shall require each nonbank financial company supervised
by the Board of Governors and bank holding companies
described in subsection (a) to report periodically to
the Board of Governors, the Council, and the
Corporation on--
(A) the nature and extent to which the
company has credit exposure to other
significant nonbank financial companies and
significant bank holding companies; and
(B) the nature and extent to which other
significant nonbank financial companies and
significant bank holding companies have credit
exposure to that company.
(3) Review.--The Board of Governors and the
Corporation shall review the information provided in
accordance with this subsection by each nonbank
financial company supervised by the Board of Governors
and bank holding company described in subsection (a).
(4) Notice of deficiencies.--If the Board of
Governors and the Corporation jointly determine, based
on their review under paragraph (3), that the
resolution plan of a nonbank financial company
supervised by the Board of Governors or a bank holding
company described in subsection (a) is not credible or
would not facilitate an orderly resolution of the
company under title 11, United States Code--
(A) the Board of Governors and the
Corporation shall notify the company of the
deficiencies in the resolution plan; and
(B) the company shall resubmit the resolution
plan within a timeframe determined by the Board
of Governors and the Corporation, with
revisions demonstrating that the plan is
credible and would result in an orderly
resolution under title 11, United States Code,
including any proposed changes in business
operations and corporate structure to
facilitate implementation of the plan.
(5) Failure to resubmit credible plan.--
(A) In general.--If a nonbank financial
company supervised by the Board of Governors or
a bank holding company described in subsection
(a) fails to timely resubmit the resolution
plan as required under paragraph (4), with such
revisions as are required under subparagraph
(B), the Board of Governors and the Corporation
may jointly impose more stringent capital,
leverage, or liquidity requirements, or
restrictions on the growth, activities, or
operations of the company, or any subsidiary
thereof, until such time as the company
resubmits a plan that remedies the
deficiencies.
(B) Divestiture.--The Board of Governors and
the Corporation, in consultation with the
Council, may jointly direct a nonbank financial
company supervised by the Board of Governors or
a bank holding company described in subsection
(a), by order, to divest certain assets or
operations identified by the Board of Governors
and the Corporation, to facilitate an orderly
resolution of such company under title 11,
United States Code, in the event of the failure
of such company, in any case in which--
(i) the Board of Governors and the
Corporation have jointly imposed more
stringent requirements on the company
pursuant to subparagraph (A); and
(ii) the company has failed, within
the 2-year period beginning on the date
of the imposition of such requirements
under subparagraph (A), to resubmit the
resolution plan with such revisions as
were required under paragraph (4)(B).
(6) No limiting effect.--A resolution plan submitted
in accordance with this subsection shall not be binding
on a bankruptcy court, a receiver appointed under title
II, or any other authority that is authorized or
required to resolve the nonbank financial company
supervised by the Board, any bank holding company, or
any subsidiary or affiliate of the foregoing.
(7) No private right of action.--No private right of
action may be based on any resolution plan submitted in
accordance with this subsection.
(8) Rules.--Not later than 18 months after the date
of enactment of this Act, the Board of Governors and
the Corporation shall jointly issue final rules
implementing this subsection.
(e) Concentration Limits.--
(1) Standards.--In order to limit the risks that the
failure of any individual company could pose to a
nonbank financial company supervised by the Board of
Governors or a bank holding company described in
subsection (a), the Board of Governors, by regulation,
shall prescribe standards that limit such risks.
(2) Limitation on credit exposure.--The regulations
prescribed by the Board of Governors under paragraph
(1) shall prohibit each nonbank financial company
supervised by the Board of Governors and bank holding
company described in subsection (a) from having credit
exposure to any unaffiliated company that exceeds 25
percent of the capital stock and surplus (or such lower
amount as the Board of Governors may determine by
regulation to be necessary to mitigate risks to the
financial stability of the United States) of the
company.
(3) Credit exposure.--For purposes of paragraph (2),
``credit exposure'' to a company means--
(A) all extensions of credit to the company,
including loans, deposits, and lines of credit;
(B) all repurchase agreements and reverse
repurchase agreements with the company, and all
securities borrowing and lending transactions
with the company, to the extent that such
transactions create credit exposure for the
nonbank financial company supervised by the
Board of Governors or a bank holding company
described in subsection (a);
(C) all guarantees, acceptances, or letters
of credit (including endorsement or standby
letters of credit) issued on behalf of the
company;
(D) all purchases of or investment in
securities issued by the company;
(E) counterparty credit exposure to the
company in connection with a derivative
transaction between the nonbank financial
company supervised by the Board of Governors or
a bank holding company described in subsection
(a) and the company; and
(F) any other similar transactions that the
Board of Governors, by regulation, determines
to be a credit exposure for purposes of this
section.
(4) Attribution rule.--For purposes of this
subsection, any transaction by a nonbank financial
company supervised by the Board of Governors or a bank
holding company described in subsection (a) with any
person is a transaction with a company, to the extent
that the proceeds of the transaction are used for the
benefit of, or transferred to, that company.
(5) Rulemaking.--The Board of Governors may issue
such regulations and orders, including definitions
consistent with this section, as may be necessary to
administer and carry out this subsection.
(6) Exemptions.--This subsection shall not apply to
any Federal home loan bank. The Board of Governors may,
by regulation or order, exempt transactions, in whole
or in part, from the definition of the term ``credit
exposure'' for purposes of this subsection, if the
Board of Governors finds that the exemption is in the
public interest and is consistent with the purpose of
this subsection.
(7) Transition period.--
(A) In general.--This subsection and any
regulations and orders of the Board of
Governors under this subsection shall not be
effective until 3 years after the date of
enactment of this Act.
(B) Extension authorized.--The Board of
Governors may extend the period specified in
subparagraph (A) for not longer than an
additional 2 years.
(f) Enhanced Public Disclosures.--The Board of Governors may
prescribe, by regulation, periodic public disclosures by
nonbank financial companies supervised by the Board of
Governors and bank holding companies described in subsection
(a) in order to support market evaluation of the risk profile,
capital adequacy, and risk management capabilities thereof.
(g) Short-term Debt Limits.--
(1) In general.--In order to mitigate the risks that
an over-accumulation of short-term debt could pose to
financial companies and to the stability of the United
States financial system, the Board of Governors may, by
regulation, prescribe a limit on the amount of short-
term debt, including off-balance sheet exposures, that
may be accumulated by any bank holding company
described in subsection (a) and any nonbank financial
company supervised by the Board of Governors.
(2) Basis of limit.--Any limit prescribed under
paragraph (1) shall be based on the short-term debt of
the company described in paragraph (1) as a percentage
of capital stock and surplus of the company or on such
other measure as the Board of Governors considers
appropriate.
(3) Short-term debt defined.--For purposes of this
subsection, the term ``short-term debt'' means such
liabilities with short-dated maturity that the Board of
Governors identifies, by regulation, except that such
term does not include insured deposits.
(4) Rulemaking authority.--In addition to prescribing
regulations under paragraphs (1) and (3), the Board of
Governors may prescribe such regulations, including
definitions consistent with this subsection, and issue
such orders, as may be necessary to carry out this
subsection.
(5) Authority to issue exemptions and adjustments.--
Notwithstanding the Bank Holding Company Act of 1956
(12 U.S.C. 1841 et seq.), the Board of Governors may,
if it determines such action is necessary to ensure
appropriate heightened prudential supervision, with
respect to a company described in paragraph (1) that
does not control an insured depository institution,
issue to such company an exemption from or adjustment
to the limit prescribed under paragraph (1).
(h) Risk Committee.--
(1) Nonbank financial companies supervised by the
board of governors.--The Board of Governors shall
require each nonbank financial company supervised by
the Board of Governors that is a publicly traded
company to establish a risk committee, as set forth in
paragraph (3), not later than 1 year after the date of
receipt of a notice of final determination under
section 113(e)(3) with respect to such nonbank
financial company supervised by the Board of Governors.
(2) Certain bank holding companies.--
(A) Mandatory regulations.--The Board of
Governors shall issue regulations requiring
each bank holding company that is a publicly
traded company and that has total consolidated
assets of not less than $10,000,000,000 to
establish a risk committee, as set forth in
paragraph (3).
(B) Permissive regulations.--The Board of
Governors may require each bank holding company
that is a publicly traded company and that has
total consolidated assets of less than
$10,000,000,000 to establish a risk committee,
as set forth in paragraph (3), as determined
necessary or appropriate by the Board of
Governors to promote sound risk management
practices.
(3) Risk committee.--A risk committee required by
this subsection shall--
(A) be responsible for the oversight of the
enterprise-wide risk management practices of
the nonbank financial company supervised by the
Board of Governors or bank holding company
described in subsection (a), as applicable;
(B) include such number of independent
directors as the Board of Governors may
determine appropriate, based on the nature of
operations, size of assets, and other
appropriate criteria related to the nonbank
financial company supervised by the Board of
Governors or a bank holding company described
in subsection (a), as applicable; and
(C) include at least 1 risk management expert
having experience in identifying, assessing,
and managing risk exposures of large, complex
firms.
(4) Rulemaking.--The Board of Governors shall issue
final rules to carry out this subsection, not later
than 1 year after the transfer date, to take effect not
later than 15 months after the transfer date.
(i) Stress Tests.--
(1) By the board of governors.--
(A) Annual tests required.--The Board of
Governors, in coordination with the appropriate
primary financial regulatory agencies and the
Federal Insurance Office, shall conduct annual
analyses in which nonbank financial companies
supervised by the Board of Governors and bank
holding companies described in subsection (a)
are subject to evaluation of whether such
companies have the capital, on a total
consolidated basis, necessary to absorb losses
as a result of adverse economic conditions.
(B) Test parameters and consequences.--The
Board of Governors--
(i) shall provide for at least 3
different sets of conditions under
which the evaluation required by this
subsection shall be conducted,
including baseline, adverse, and
severely adverse;
(ii) may require the tests described
in subparagraph (A) at bank holding
companies and nonbank financial
companies, in addition to those for
which annual tests are required under
subparagraph (A);
(iii) may develop and apply such
other analytic techniques as are
necessary to identify, measure, and
monitor risks to the financial
stability of the United States;
(iv) shall require the companies
described in subparagraph (A) to update
their resolution plans required under
subsection (d)(1), as the Board of
Governors determines appropriate, based
on the results of the analyses; and
(v) shall publish a summary of the
results of the tests required under
subparagraph (A) or clause (ii) of this
subparagraph.
(2) By the company.--
(A) Requirement.--A nonbank financial company
supervised by the Board of Governors and a bank
holding company described in subsection (a)
shall conduct semiannual stress tests. All
other financial companies that have total
consolidated assets of more than
$10,000,000,000 and are regulated by a primary
Federal financial regulatory agency shall
conduct annual stress tests. The tests required
under this subparagraph shall be conducted in
accordance with the regulations prescribed
under subparagraph (C).
(B) Report.--A company required to conduct
stress tests under subparagraph (A) shall
submit a report to the Board of Governors and
to its primary financial regulatory agency at
such time, in such form, and containing such
information as the primary financial regulatory
agency shall require.
(C) Regulations.--Each Federal primary
financial regulatory agency, in coordination
with the Board of Governors and the Federal
Insurance Office, shall issue consistent and
comparable regulations to implement this
paragraph that shall--
(i) define the term ``stress test''
for purposes of this paragraph;
(ii) establish methodologies for the
conduct of stress tests required by
this paragraph that shall provide for
at least 3 different sets of
conditions, including baseline,
adverse, and severely adverse;
(iii) establish the form and content
of the report required by subparagraph
(B); and
(iv) require companies subject to
this paragraph to publish a summary of
the results of the required stress
tests.
(j) Leverage Limitation.--
(1) Requirement.--The Board of Governors shall
require a bank holding company with total consolidated
assets equal to or greater than $50,000,000,000 or a
nonbank financial company supervised by the Board of
Governors to maintain a debt to equity ratio of no more
than 15 to 1, upon a determination by the Council that
such company poses a grave threat to the financial
stability of the United States and that the imposition
of such requirement is necessary to mitigate the risk
that such company poses to the financial stability of
the United States. Nothing in this paragraph shall
apply to a Federal home loan bank.
(2) Considerations.--In making a determination under
this subsection, the Council shall consider the factors
described in subsections (a) and (b) of section 113 and
any other risk-related factors that the Council deems
appropriate.
(3) Regulations.--The Board of Governors shall
promulgate regulations to establish procedures and
timelines for complying with the requirements of this
subsection.
(k) Inclusion of Off-balance-sheet Activities in Computing
Capital Requirements.--
(1) In general.--In the case of any bank holding
company described in subsection (a) or nonbank
financial company supervised by the Board of Governors,
the computation of capital for purposes of meeting
capital requirements shall take into account any off-
balance-sheet activities of the company.
(2) Exemptions.--If the Board of Governors determines
that an exemption from the requirement under paragraph
(1) is appropriate, the Board of Governors may exempt a
company, or any transaction or transactions engaged in
by such company, from the requirements of paragraph
(1).
(3) Off-balance-sheet activities defined.--For
purposes of this subsection, the term ``off-balance-
sheet activities'' means an existing liability of a
company that is not currently a balance sheet
liability, but may become one upon the happening of
some future event, including the following
transactions, to the extent that they may create a
liability:
(A) Direct credit substitutes in which a bank
substitutes its own credit for a third party,
including standby letters of credit.
(B) Irrevocable letters of credit that
guarantee repayment of commercial paper or tax-
exempt securities.
(C) Risk participations in bankers'
acceptances.
(D) Sale and repurchase agreements.
(E) Asset sales with recourse against the
seller.
(F) Interest rate swaps.
(G) Credit swaps.
(H) Commodities contracts.
(I) Forward contracts.
(J) Securities contracts.
(K) Such other activities or transactions as
the Board of Governors may, by rule, define.
* * * * * * *
----------
BANK HOLDING COMPANY ACT OF 1956
* * * * * * *
SEC. 13. PROHIBITIONS ON PROPRIETARY TRADING AND CERTAIN RELATIONSHIPS
WITH HEDGE FUNDS AND PRIVATE EQUITY FUNDS.
(a) In General.--
(1) Prohibition.--Unless otherwise provided in this
section, a banking entity shall not--
(A) engage in proprietary trading; or
(B) acquire or retain any equity,
partnership, or other ownership interest in or
sponsor a hedge fund or a private equity fund.
(2) Nonbank financial companies supervised by the
board.--Any nonbank financial company supervised by the
Board that engages in proprietary trading or takes or
retains any equity, partnership, or other ownership
interest in or sponsors a hedge fund or a private
equity fund shall be subject, by rule, as provided in
subsection (b)(2), to additional capital requirements
for and additional quantitative limits with regards to
such proprietary trading and taking or retaining any
equity, partnership, or other ownership interest in or
sponsorship of a hedge fund or a private equity fund,
except that permitted activities as described in
subsection (d) shall not be subject to the additional
capital and additional quantitative limits except as
provided in subsection (d)(3), as if the nonbank
financial company supervised by the Board were a
banking entity.
(b) Study and Rulemaking.--
(1) Study.--Not later than 6 months after the date of
enactment of this section, the Financial Stability
Oversight Council shall study and make recommendations
on implementing the provisions of this section so as
to--
(A) promote and enhance the safety and
soundness of banking entities;
(B) protect taxpayers and consumers and
enhance financial stability by minimizing the
risk that insured depository institutions and
the affiliates of insured depository
institutions will engage in unsafe and unsound
activities;
(C) limit the inappropriate transfer of
Federal subsidies from institutions that
benefit from deposit insurance and liquidity
facilities of the Federal Government to
unregulated entities;
(D) reduce conflicts of interest between the
self-interest of banking entities and nonbank
financial companies supervised by the Board,
and the interests of the customers of such
entities and companies;
(E) limit activities that have caused undue
risk or loss in banking entities and nonbank
financial companies supervised by the Board, or
that might reasonably be expected to create
undue risk or loss in such banking entities and
nonbank financial companies supervised by the
Board;
(F) appropriately accommodate the business of
insurance within an insurance company, subject
to regulation in accordance with the relevant
insurance company investment laws, while
protecting the safety and soundness of any
banking entity with which such insurance
company is affiliated and of the United States
financial system; and
(G) appropriately time the divestiture of
illiquid assets that are affected by the
implementation of the prohibitions under
subsection (a).
[(2) Rulemaking.--
[(A) In general.--Unless otherwise provided
in this section, not later than 9 months after
the completion of the study under paragraph
(1), the appropriate Federal banking agencies,
the Securities and Exchange Commission, and the
Commodity Futures Trading Commission, shall
consider the findings of the study under
paragraph (1) and adopt rules to carry out this
section, as provided in subparagraph (B).
[(B) Coordinated rulemaking.--
[(i) Regulatory authority.--The
regulations issued under this paragraph
shall be issued by--
[(I) the appropriate Federal
banking agencies, jointly, with
respect to insured depository
institutions;
[(II) the Board, with respect
to any company that controls an
insured depository institution,
or that is treated as a bank
holding company for purposes of
section 8 of the International
Banking Act, any nonbank
financial company supervised by
the Board, and any subsidiary
of any of the foregoing (other
than a subsidiary for which an
agency described in subclause
(I), (III), or (IV) is the
primary financial regulatory
agency);
[(III) the Commodity Futures
Trading Commission, with
respect to any entity for which
the Commodity Futures Trading
Commission is the primary
financial regulatory agency, as
defined in section 2 of the
Dodd-Frank Wall Street Reform
and Consumer Protection Act;
and
[(IV) the Securities and
Exchange Commission, with
respect to any entity for which
the Securities and Exchange
Commission is the primary
financial regulatory agency, as
defined in section 2 of the
Dodd-Frank Wall Street Reform
and Consumer Protection Act.
[(ii) Coordination, consistency, and
comparability.--In developing and
issuing regulations pursuant to this
section, the appropriate Federal
banking agencies, the Securities and
Exchange Commission, and the Commodity
Futures Trading Commission shall
consult and coordinate with each other,
as appropriate, for the purposes of
assuring, to the extent possible, that
such regulations are comparable and
provide for consistent application and
implementation of the applicable
provisions of this section to avoid
providing advantages or imposing
disadvantages to the companies affected
by this subsection and to protect the
safety and soundness of banking
entities and nonbank financial
companies supervised by the Board.
[(iii) Council role.--The Chairperson
of the Financial Stability Oversight
Council shall be responsible for
coordination of the regulations issued
under this section.]
(2) Rulemaking.--
(A) In general.--The Board may, as
appropriate, consult with the Comptroller of
the Currency, the Federal Deposit Insurance
Corporation, the Securities and Exchange
Commission, or the Commodity Futures Trading
Commission to adopt rules or guidance to carry
out this section, as provided in subparagraph
(B).
(B) Rulemaking requirements.--In adopting a
rule or guidance under subparagraph (A), the
Board--
(i) shall consider the findings of
the report required in paragraph (1)
and, as appropriate, subsequent
reports;
(ii) shall assure, to the extent
possible, that such rule or guidance
provide for consistent application and
implementation of the applicable
provisions of this section to avoid
providing advantages or imposing
disadvantages to the companies affected
by this subsection and to protect the
safety and soundness of banking
entities and nonbank financial
companies supervised by the Board; and
(iii) shall include requirements to
ensure compliance with this section,
such as requirements regarding internal
controls and recordkeeping.
(C) Authority.--The Board shall have sole
authority to issue and amend rules under this
section after the date of the enactment of this
paragraph.
(D) Conforming authority.--
(i) Continuity of regulations.--Any
rules or guidance issued under this
section prior to the date of enactment
of this paragraph shall continue in
effect until the Board issues a
successor rule or guidance, or amends
such rule or guidance, pursuant to
subparagraph (C).
(ii) Applicable guidance.--In
performing examinations or other
supervisory duties, the appropriate
Federal banking agencies, the
Securities and Exchange Commission, and
the Commodity Futures Trading
Commission, as appropriate, shall
update any applicable policies and
procedures to ensure that such policies
and procedures are consistent (to the
extent practicable) with any rules or
guidance issued pursuant to
subparagraph (C).
(c) Effective Date.--
(1) In general.--Except as provided in paragraphs (2)
and (3), this section shall take effect on the earlier
of--
(A) 12 months after the date of the issuance
of final rules under subsection (b); or
(B) 2 years after the date of enactment of
this section.
(2) Conformance period for divestiture.--A banking
entity or nonbank financial company supervised by the
Board shall bring its activities and investments into
compliance with the requirements of this section not
later than 2 years after the date on which the
requirements become effective pursuant to this section
or 2 years after the date on which the entity or
company becomes a nonbank financial company supervised
by the Board. The Board may, by rule or order, extend
this two-year period for not more than one year at a
time, if, in the judgment of the Board, such an
extension is consistent with the purposes of this
section and would not be detrimental to the public
interest. The extensions made by the Board under the
preceding sentence may not exceed an aggregate of 3
years.
(3) Extended transition for illiquid funds.--
(A) Application.--The Board may, upon the
application of a banking entity, extend the
period during which the banking entity, to the
extent necessary to fulfill a contractual
obligation that was in effect on May 1, 2010,
may take or retain its equity, partnership, or
other ownership interest in, or otherwise
provide additional capital to, an illiquid
fund.
(B) Time limit on approval.--The Board may
grant 1 extension under subparagraph (A), which
may not exceed 5 years.
(4) Divestiture required.--Except as otherwise
provided in subsection (d)(1)(G), a banking entity may
not engage in any activity prohibited under subsection
(a)(1)(B) after the earlier of--
(A) the date on which the contractual
obligation to invest in the illiquid fund
terminates; and
(B) the date on which any extensions granted
by the Board under paragraph (3) expire.
(5) Additional capital during transition period.--
[Notwithstanding paragraph (2), on the date on which
the rules are issued under subsection (b)(2), the
appropriate Federal banking agencies, the Securities
and Exchange Commission, and the Commodity Futures
Trading Commission shall issue rules, as provided in
subsection (b)(2),] The Board shall have the authority
to impose additional capital requirements, and any
other restrictions, as appropriate, on any equity,
partnership, or ownership interest in or sponsorship of
a hedge fund or private equity fund by a banking
entity.
(6) Special rulemaking.--Not later than 6 months
after the date of enactment of this section, the Board
shall issues rules to implement paragraphs (2) and (3).
(d) Permitted Activities.--
(1) In general.--Notwithstanding the restrictions
under subsection (a), to the extent permitted by any
other provision of Federal or State law, and subject to
the limitations under paragraph (2) and any
restrictions or limitations that [the appropriate
Federal banking agencies, the Securities and Exchange
Commission, and the Commodity Futures Trading
Commission,] the Board may determine, the following
activities (in this section referred to as ``permitted
activities'') are permitted:
(A) The purchase, sale, acquisition, or
disposition of obligations of the United States
or any agency thereof, obligations,
participations, or other instruments of or
issued by the Government National Mortgage
Association, the Federal National Mortgage
Association, the Federal Home Loan Mortgage
Corporation, a Federal Home Loan Bank, the
Federal Agricultural Mortgage Corporation, or a
Farm Credit System institution chartered under
and subject to the provisions of the Farm
Credit Act of 1971 (12 U.S.C. 2001 et seq.),
and obligations of any State or of any
political subdivision thereof.
(B) The purchase, sale, acquisition, or
disposition of securities and other instruments
described in subsection (h)(4) in connection
with underwriting or market-making-related
activities, to the extent that any such
activities permitted by this subparagraph are
designed not to exceed the reasonably expected
near term demands of clients, customers, or
counterparties.
(C) Risk-mitigating hedging activities in
connection with and related to individual or
aggregated positions, contracts, or other
holdings of a banking entity that are designed
to reduce the specific risks to the banking
entity in connection with and related to such
positions, contracts, or other holdings.
(D) The purchase, sale, acquisition, or
disposition of securities and other instruments
described in subsection (h)(4) on behalf of
customers.
(E) Investments in one or more small business
investment companies, as defined in section 102
of the Small Business Investment Act of 1958
(15 U.S.C. 662), investments designed primarily
to promote the public welfare, of the type
permitted under paragraph (11) of section 5136
of the Revised Statutes of the United States
(12 U.S.C. 24), or investments that are
qualified rehabilitation expenditures with
respect to a qualified rehabilitated building
or certified historic structure, as such terms
are defined in section 47 of the Internal
Revenue Code of 1986 or a similar State
historic tax credit program.
(F) The purchase, sale, acquisition, or
disposition of securities and other instruments
described in subsection (h)(4) by a regulated
insurance company directly engaged in the
business of insurance for the general account
of the company and by any affiliate of such
regulated insurance company, provided that such
activities by any affiliate are solely for the
general account of the regulated insurance
company, if--
(i) the purchase, sale, acquisition,
or disposition is conducted in
compliance with, and subject to, the
insurance company investment laws,
regulations, and written guidance of
the State or jurisdiction in which each
such insurance company is domiciled;
and
(ii) [the appropriate Federal banking
agencies] the Board, after consultation
with the Financial Stability Oversight
Council and the relevant insurance
commissioners of the States and
territories of the United States, [have
not jointly] has not determined, after
notice and comment, that a particular
law, regulation, or written guidance
described in clause (i) is insufficient
to protect the safety and soundness of
the banking entity, or of the financial
stability of the United States.
(G) Organizing and offering a private equity
or hedge fund, including serving as a general
partner, managing member, or trustee of the
fund and in any manner selecting or controlling
(or having employees, officers, directors, or
agents who constitute) a majority of the
directors, trustees, or management of the fund,
including any necessary expenses for the
foregoing, only if--
(i) the banking entity provides bona
fide trust, fiduciary, or investment
advisory services;
(ii) the fund is organized and
offered only in connection with the
provision of bona fide trust,
fiduciary, or investment advisory
services and only to persons that are
customers of such services of the
banking entity;
(iii) the banking entity does not
acquire or retain an equity interest,
partnership interest, or other
ownership interest in the funds except
for a de minimis investment subject to
and in compliance with paragraph (4);
(iv) the banking entity complies with
the restrictions under paragraphs (1)
and (2) of subparagraph (f);
(v) the banking entity does not,
directly or indirectly, guarantee,
assume, or otherwise insure the
obligations or performance of the hedge
fund or private equity fund or of any
hedge fund or private equity fund in
which such hedge fund or private equity
fund invests;
(vi) the banking entity does not
share with the hedge fund or private
equity fund, for corporate, marketing,
promotional, or other purposes, the
same name or a variation of the same
name, except that the hedge fund or
private equity fund may share the same
name or a variation of the same name as
a banking entity that is an investment
adviser to the hedge fund or private
equity fund, if--
(I) such investment adviser
is not an insured depository
institution, a company that
controls an insured depository
institution, or a company that
is treated as a bank holding
company for purposes of section
8 of the International Banking
Act of 1978 (12 U.S.C. 3106);
(II) such investment adviser
does not share the same name or
a variation of the same name as
an insured depository
institution, any company that
controls an insured depository
institution, or any company
that is treated as a bank
holding company for purposes of
section 8 of the International
Banking Act of 1978 (12 U.S.C.
3106); and
(III) such name does not
contain the word ``bank'';
(vii) no director or employee of the
banking entity takes or retains an
equity interest, partnership interest,
or other ownership interest in the
hedge fund or private equity fund,
except for any director or employee of
the banking entity who is directly
engaged in providing investment
advisory or other services to the hedge
fund or private equity fund; and
(viii) the banking entity discloses
to prospective and actual investors in
the fund, in writing, that any losses
in such hedge fund or private equity
fund are borne solely by investors in
the fund and not by the banking entity,
and otherwise complies with any
additional rules of the [appropriate
Federal banking agencies, the
Securities and Exchange Commission, or
the Commodity Futures Trading
Commission,] Board, as provided in
subsection (b)(2), designed to ensure
that losses in such hedge fund or
private equity fund are borne solely by
investors in the fund and not by the
banking entity.
(H) Proprietary trading conducted by a
banking entity pursuant to paragraph (9) or
(13) of section 4(c), provided that the trading
occurs solely outside of the United States and
that the banking entity is not directly or
indirectly controlled by a banking entity that
is organized under the laws of the United
States or of one or more States.
(I) The acquisition or retention of any
equity, partnership, or other ownership
interest in, or the sponsorship of, a hedge
fund or a private equity fund by a banking
entity pursuant to paragraph (9) or (13) of
section 4(c) solely outside of the United
States, provided that no ownership interest in
such hedge fund or private equity fund is
offered for sale or sold to a resident of the
United States and that the banking entity is
not directly or indirectly controlled by a
banking entity that is organized under the laws
of the United States or of one or more States.
(J) Such other activity as the [appropriate
Federal banking agencies, the Securities and
Exchange Commission, and the Commodity Futures
Trading Commission] Board determine, by rule,
as provided in subsection (b)(2), would promote
and protect the safety and soundness of the
banking entity and the financial stability of
the United States.
(2) Limitation on permitted activities.--
(A) In general.--No transaction, class of
transactions, or activity may be deemed a
permitted activity under paragraph (1) if the
transaction, class of transactions, or
activity--
(i) would involve or result in a
material conflict of interest (as such
term shall be defined by rule as
provided in subsection (b)(2)) between
the banking entity and its clients,
customers, or counterparties;
(ii) would result, directly or
indirectly, in a material exposure by
the banking entity to high-risk assets
or high-risk trading strategies (as
such terms shall be defined by rule as
provided in subsection (b)(2));
(iii) would pose a threat to the
safety and soundness of such banking
entity; or
(iv) would pose a threat to the
financial stability of the United
States.
(B) Rulemaking.--The [appropriate Federal
banking agencies, the Securities and Exchange
Commission, and the Commodity Futures Trading
Commission] Board shall issue regulations to
implement subparagraph (A), as part of the
regulations issued under subsection (b)(2).
(3) Capital and quantitative limitations.--The
[appropriate Federal banking agencies, the Securities
and Exchange Commission, and the Commodity Futures
Trading Commission] Board shall, as provided in
subsection (b)(2), adopt rules imposing additional
capital requirements and quantitative limitations,
including diversification requirements, regarding the
activities permitted under this section if the
[appropriate Federal banking agencies, the Securities
and Exchange Commission, and the Commodity Futures
Trading Commission] Board determine that additional
capital and quantitative limitations are appropriate to
protect the safety and soundness of banking entities
engaged in such activities.
(4) De minimis investment.--
(A) In general.--A banking entity may make
and retain an investment in a hedge fund or
private equity fund that the banking entity
organizes and offers, subject to the
limitations and restrictions in subparagraph
(B) for the purposes of--
(i) establishing the fund and
providing the fund with sufficient
initial equity for investment to permit
the fund to attract unaffiliated
investors; or
(ii) making a de minimis investment.
(B) Limitations and restrictions on
investments.--
(i) Requirement to seek other
investors.--A banking entity shall
actively seek unaffiliated investors to
reduce or dilute the investment of the
banking entity to the amount permitted
under clause (ii).
(ii) Limitations on size of
investments.--Notwithstanding any other
provision of law, investments by a
banking entity in a hedge fund or
private equity fund shall--
(I) not later than 1 year
after the date of establishment
of the fund, be reduced through
redemption, sale, or dilution
to an amount that is not more
than 3 percent of the total
ownership interests of the
fund;
(II) be immaterial to the
banking entity, as defined, by
rule, pursuant to subsection
(b)(2), but in no case may the
aggregate of all of the
interests of the banking entity
in all such funds exceed 3
percent of the Tier 1 capital
of the banking entity.
(iii) Capital.--For purposes of
determining compliance with applicable
capital standards under paragraph (3),
the aggregate amount of the outstanding
investments by a banking entity under
this paragraph, including retained
earnings, shall be deducted from the
assets and tangible equity of the
banking entity, and the amount of the
deduction shall increase commensurate
with the leverage of the hedge fund or
private equity fund.
(C) Extension.--Upon an application by a
banking entity, the Board may extend the period
of time to meet the requirements under
subparagraph (B)(ii)(I) for 2 additional years,
if the Board finds that an extension would be
consistent with safety and soundness and in the
public interest.
[(e) Anti-evasion.--
[(1) Rulemaking.--The appropriate Federal banking
agencies, the Securities and Exchange Commission, and
the Commodity Futures Trading Commission shall issue
regulations, as part of the rulemaking provided for in
subsection (b)(2), regarding internal controls and
recordkeeping, in order to insure compliance with this
section.
[(2) Termination of activities or investment.--
Notwithstanding any other provision of law, whenever an
appropriate Federal banking agency, the Securities and
Exchange Commission, or the Commodity Futures Trading
Commission, as appropriate, has reasonable cause to
believe that a banking entity or nonbank financial
company supervised by the Board under the respective
agency's jurisdiction has made an investment or engaged
in an activity in a manner that functions as an evasion
of the requirements of this section (including through
an abuse of any permitted activity) or otherwise
violates the restrictions under this section, the
appropriate Federal banking agency, the Securities and
Exchange Commission, or the Commodity Futures Trading
Commission, as appropriate, shall order, after due
notice and opportunity for hearing, the banking entity
or nonbank financial company supervised by the Board to
terminate the activity and, as relevant, dispose of the
investment. Nothing in this paragraph shall be
construed to limit the inherent authority of any
Federal agency or State regulatory authority to further
restrict any investments or activities under otherwise
applicable provisions of law.]
(e) Enforcement; Anti-Evasion.--
(1) Appropriate federal banking agency.--
Notwithstanding any other provision of law except for
any rules or guidance issued under subsection (b)(2),
whenever the appropriate Federal banking agency has
reasonable cause to believe that a banking entity or
nonbank financial company supervised by the Board has
made an investment or engaged in an activity in a
manner that either violates the restrictions under this
section, or that functions as an evasion of the
requirements of this section (including through an
abuse of any permitted activity), such appropriate
Federal banking agency shall order, after due notice
and opportunity for hearing, the banking entity or
nonbank financial company supervised by the Board to
terminate the activity and, as relevant, dispose of the
investment.
(2) Securities and exchange commission and commodity
futures trading commission.--
(A) In general.--Notwithstanding any other
provision of law except for any rules or
guidance issued under subsection (b)(2),
whenever the Securities and Exchange Commission
or the Commodity Futures Trading Commission, as
appropriate, has reasonable cause to believe
that a covered nonbank financial company for
which the respective agency is the primary
Federal regulator has made an investment or
engaged in an activity in a manner that either
violates the restrictions under this section,
or that functions as an evasion of the
requirements of this section (including through
an abuse of any permitted activity), the
Securities and Exchange Commission or the
Commodity Futures Trading Commission, as
appropriate, shall order, after due notice and
opportunity for hearing, the covered nonbank
financial company to terminate the activity
and, as relevant, dispose of the investment.
(B) Covered nonbank financial company
defined.--In this paragraph, the term ``covered
nonbank financial company'' means a nonbank
financial company (as defined in section 102 of
the Financial Stability Act of 2010) supervised
by the Securities and Exchange Commission or
the Commodity Futures Trading Commission, as
appropriate.
(f) Limitations on Relationships With Hedge Funds and Private
Equity Funds.--
(1) In general.--No banking entity that serves,
directly or indirectly, as the investment manager,
investment adviser, or sponsor to a hedge fund or
private equity fund, or that organizes and offers a
hedge fund or private equity fund pursuant to paragraph
(d)(1)(G), and no affiliate of such entity, may enter
into a transaction with the fund, or with any other
hedge fund or private equity fund that is controlled by
such fund, that would be a covered transaction, as
defined in section 23A of the Federal Reserve Act (12
U.S.C. 371c), with the hedge fund or private equity
fund, as if such banking entity and the affiliate
thereof were a member bank and the hedge fund or
private equity fund were an affiliate thereof.
(2) Treatment as member bank.--A banking entity that
serves, directly or indirectly, as the investment
manager, investment adviser, or sponsor to a hedge fund
or private equity fund, or that organizes and offers a
hedge fund or private equity fund pursuant to paragraph
(d)(1)(G), shall be subject to section 23B of the
Federal Reserve Act (12 U.S.C. 371c-1), as if such
banking entity were a member bank and such hedge fund
or private equity fund were an affiliate thereof.
(3) Permitted services.--
(A) In general.--Notwithstanding paragraph
(1), the Board may permit a banking entity to
enter into any prime brokerage transaction with
any hedge fund or private equity fund in which
a hedge fund or private equity fund managed,
sponsored, or advised by such banking entity
has taken an equity, partnership, or other
ownership interest, if--
(i) the banking entity is in
compliance with each of the limitations
set forth in subsection (d)(1)(G) with
regard to a hedge fund or private
equity fund organized and offered by
such banking entity;
(ii) the chief executive officer (or
equivalent officer) of the banking
entity certifies in writing annually
(with a duty to update the
certification if the information in the
certification materially changes) that
the conditions specified in subsection
(d)(1)(g)(v) are satisfied; and
(iii) the Board has determined that
such transaction is consistent with the
safe and sound operation and condition
of the banking entity.
(B) Treatment of prime brokerage
transactions.--For purposes of subparagraph
(A), a prime brokerage transaction described in
subparagraph (A) shall be subject to section
23B of the Federal Reserve Act (12 U.S.C. 371c-
1) as if the counterparty were an affiliate of
the banking entity.
(4) Application to nonbank financial companies
supervised by the board.--The [appropriate Federal
banking agencies, the Securities and Exchange
Commission, and the Commodity Futures Trading
Commission] Board shall adopt rules, as provided in
subsection (b)(2), imposing additional capital charges
or other restrictions for nonbank financial companies
supervised by the Board to address the risks to and
conflicts of interest of banking entities described in
paragraphs (1), (2), and (3) of this subsection.
(g) Rules of Construction.--
(1) Limitation on contrary authority.--Except as
provided in this section, notwithstanding any other
provision of law, the prohibitions and restrictions
under this section shall apply to activities of a
banking entity or nonbank financial company supervised
by the Board, even if such activities are authorized
for a banking entity or nonbank financial company
supervised by the Board.
(2) Sale or securitization of loans.--Nothing in this
section shall be construed to limit or restrict the
ability of a banking entity or nonbank financial
company supervised by the Board to sell or securitize
loans in a manner otherwise permitted by law.
(3) Authority of federal agencies and state
regulatory authorities.--Nothing in this section shall
be construed to limit the inherent authority of any
Federal agency or State regulatory authority under
otherwise applicable provisions of law.
(h) Definitions.--In this section, the following definitions
shall apply:
(1) Banking entity.--The term ``banking entity''
means any insured depository institution (as defined in
section 3 of the Federal Deposit Insurance Act (12
U.S.C. 1813)), any company that controls an insured
depository institution, or that is treated as a bank
holding company for purposes of section 8 of the
International Banking Act of 1978, and any affiliate or
subsidiary of any such entity. For purposes of this
paragraph, the term ``insured depository institution''
does not include an institution--
(A) that functions solely in a trust or
fiduciary capacity, if--
(i) all or substantially all of the
deposits of such institution are in
trust funds and are received in a bona
fide fiduciary capacity;
(ii) no deposits of such institution
which are insured by the Federal
Deposit Insurance Corporation are
offered or marketed by or through an
affiliate of such institution;
(iii) such institution does not
accept demand deposits or deposits that
the depositor may withdraw by check or
similar means for payment to third
parties or others or make commercial
loans; and
(iv) such institution does not--
(I) obtain payment or payment
related services from any
Federal Reserve bank, including
any service referred to in
section 11A of the Federal
Reserve Act (12 U.S.C. 248a);
or
(II) exercise discount or
borrowing privileges pursuant
to section 19(b)(7) of the
Federal Reserve Act (12 U.S.C.
461(b)(7)); or
(B) that does not have and is not controlled
by a company that has--
(i) more than $10,000,000,000 in
total consolidated assets; and
(ii) total trading assets and trading
liabilities, as reported on the most
recent applicable regulatory filing
filed by the institution, that are more
than 5 percent of total consolidated
assets.
(2) Hedge fund; private equity fund.--The terms
``hedge fund'' and ``private equity fund'' mean an
issuer that would be an investment company, as defined
in the Investment Company Act of 1940 (15 U.S.C. 80a-1
et seq.), but for section 3(c)(1) or 3(c)(7) of that
Act, or such similar funds as the [appropriate Federal
banking agencies, the Securities and Exchange
Commission, and the Commodity Futures Trading
Commission] Board may, by rule, as provided in
subsection (b)(2), determine.
(3) Nonbank financial company supervised by the
board.--The term ``nonbank financial company supervised
by the Board'' means a nonbank financial company
supervised by the Board of Governors, as defined in
section 102 of the Financial Stability Act of 2010.
(4) Proprietary trading.--The term ``proprietary
trading'', when used with respect to a banking entity
or nonbank financial company supervised by the Board,
means engaging as a principal for the trading account
of the banking entity or nonbank financial company
supervised by the Board in any transaction to purchase
or sell, or otherwise acquire or dispose of, any
security, any derivative, any contract of sale of a
commodity for future delivery, any option on any such
security, derivative, or contract, or any other
security or financial instrument that the [appropriate
Federal banking agencies, the Securities and Exchange
Commission, and the Commodity Futures Trading
Commission] Board may, by rule as provided in
subsection (b)(2), determine.
(5) Sponsor.--The term to ``sponsor'' a fund means--
(A) to serve as a general partner, managing
member, or trustee of a fund;
(B) in any manner to select or to control (or
to have employees, officers, or directors, or
agents who constitute) a majority of the
directors, trustees, or management of a fund;
or
(C) to share with a fund, for corporate,
marketing, promotional, or other purposes, the
same name or a variation of the same name.
(6) Trading account.--The term ``trading account''
means any account used for acquiring or taking
positions in the securities and instruments described
in paragraph (4) principally for the purpose of selling
in the near term (or otherwise with the intent to
resell in order to profit from short-term price
movements), and any such other accounts as the
[appropriate Federal banking agencies, the Securities
and Exchange Commission, and the Commodity Futures
Trading Commission] Board may, by rule as provided in
subsection (b)(2), determine.
(7) Illiquid fund.--
(A) In general.--The term ``illiquid fund''
means a hedge fund or private equity fund
that--
(i) as of May 1, 2010, was
principally invested in, or was
invested and contractually committed to
principally invest in, illiquid assets,
such as portfolio companies, real
estate investments, and venture capital
investments; and
(ii) makes all investments pursuant
to, and consistent with, an investment
strategy to principally invest in
illiquid assets. In issuing rules
regarding this subparagraph, the Board
shall take into consideration the terms
of investment for the hedge fund or
private equity fund, including
contractual obligations, the ability of
the fund to divest of assets held by
the fund, and any other factors that
the Board determines are appropriate.
(B) Hedge fund.--For the purposes of this
paragraph, the term ``hedge fund'' means any
fund identified under subsection (h)(2), and
does not include a private equity fund, as such
term is used in section 203(m) of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-
3(m)).
* * * * * * *
----------
DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT
* * * * * * *
TITLE I--FINANCIAL STABILITY
* * * * * * *
Subtitle C--Additional Board of Governors Authority for Certain Nonbank
Financial Companies and Bank Holding Companies
* * * * * * *
SEC. 165. ENHANCED SUPERVISION AND PRUDENTIAL STANDARDS FOR NONBANK
FINANCIAL COMPANIES SUPERVISED BY THE BOARD OF
GOVERNORS AND CERTAIN BANK HOLDING COMPANIES.
(a) In General.--
(1) Purpose.--In order to prevent or mitigate risks
to the financial stability of the United States that
could arise from the material financial distress or
failure, or ongoing activities, of large,
interconnected financial institutions, the Board of
Governors shall, on its own or pursuant to
recommendations by the Council under section 115,
establish prudential standards for nonbank financial
companies supervised by the Board of Governors and bank
holding companies with total consolidated assets equal
to or greater than $50,000,000,000 that--
(A) are more stringent than the standards and
requirements applicable to nonbank financial
companies and bank holding companies that do
not present similar risks to the financial
stability of the United States; and
(B) increase in stringency, based on the
considerations identified in subsection (b)(3).
(2) Tailored application.--
(A) In general.--In prescribing more
stringent prudential standards under this
section, the Board of Governors may, on its own
or pursuant to a recommendation by the Council
in accordance with section 115, differentiate
among companies on an individual basis or by
category, taking into consideration their
capital structure, riskiness, complexity,
financial activities (including the financial
activities of their subsidiaries), size, and
any other risk-related factors that the Board
of Governors deems appropriate.
(B) Adjustment of threshold for application
of certain standards.--The Board of Governors
may, pursuant to a recommendation by the
Council in accordance with section 115,
establish an asset threshold above
$50,000,000,000 for the application of any
standard established under subsections (c)
through (g).
(b) Development of Prudential Standards.--
(1) In general.--
(A) Required standards.--The Board of
Governors shall establish prudential standards
for nonbank financial companies supervised by
the Board of Governors and bank holding
companies described in subsection (a), that
shall include--
(i) risk-based capital requirements
and leverage limits, unless the Board
of Governors, in consultation with the
Council, determines that such
requirements are not appropriate for a
company subject to more stringent
prudential standards because of the
activities of such company (such as
investment company activities or assets
under management) or structure, in
which case, the Board of Governors
shall apply other standards that result
in similarly stringent risk controls;
(ii) liquidity requirements;
(iii) overall risk management
requirements;
(iv) resolution plan and credit
exposure report requirements; and
(v) concentration limits.
(B) Additional standards authorized.--The
Board of Governors may establish additional
prudential standards for nonbank financial
companies supervised by the Board of Governors
and bank holding companies described in
subsection (a), that include--
(i) a contingent capital requirement;
(ii) enhanced public disclosures;
(iii) short-term debt limits; and
(iv) such other prudential standards
as the Board or Governors, on its own
or pursuant to a recommendation made by
the Council in accordance with section
115, determines are appropriate.
(2) Standards for foreign financial companies.--In
applying the standards set forth in paragraph (1) to
any foreign nonbank financial company supervised by the
Board of Governors or foreign-based bank holding
company, the Board of Governors shall--
(A) give due regard to the principle of
national treatment and equality of competitive
opportunity; and
(B) take into account the extent to which the
foreign financial company is subject on a
consolidated basis to home country standards
that are comparable to those applied to
financial companies in the United States.
(3) Considerations.--In prescribing prudential
standards under paragraph (1), the Board of Governors
shall--
(A) take into account differences among
nonbank financial companies supervised by the
Board of Governors and bank holding companies
described in subsection (a), based on--
(i) the factors described in
subsections (a) and (b) of section 113;
(ii) whether the company owns an
insured depository institution;
(iii) nonfinancial activities and
affiliations of the company; and
(iv) any other risk-related factors
that the Board of Governors determines
appropriate;
(B) to the extent possible, ensure that small
changes in the factors listed in subsections
(a) and (b) of section 113 would not result in
sharp, discontinuous changes in the prudential
standards established under paragraph (1) of
this subsection;
(C) take into account any recommendations of
the Council under section 115; and
(D) adapt the required standards as
appropriate in light of any predominant line of
business of such company, including assets
under management or other activities for which
particular standards may not be appropriate.
(4) Consultation.--Before imposing prudential
standards or any other requirements pursuant to this
section, including notices of deficiencies in
resolution plans and more stringent requirements or
divestiture orders resulting from such notices, that
are likely to have a significant impact on a
functionally regulated subsidiary or depository
institution subsidiary of a nonbank financial company
supervised by the Board of Governors or a bank holding
company described in subsection (a), the Board of
Governors shall consult with each Council member that
primarily supervises any such subsidiary with respect
to any such standard or requirement.
(5) Report.--The Board of Governors shall submit an
annual report to Congress regarding the implementation
of the prudential standards required pursuant to
paragraph (1), including the use of such standards to
mitigate risks to the financial stability of the United
States.
(c) Contingent Capital.--
(1) In general.--Subsequent to submission by the
Council of a report to Congress under section 115(c),
the Board of Governors may issue regulations that
require each nonbank financial company supervised by
the Board of Governors and bank holding companies
described in subsection (a) to maintain a minimum
amount of contingent capital that is convertible to
equity in times of financial stress.
(2) Factors to consider.--In issuing regulations
under this subsection, the Board of Governors shall
consider--
(A) the results of the study undertaken by
the Council, and any recommendations of the
Council, under section 115(c);
(B) an appropriate transition period for
implementation of contingent capital under this
subsection;
(C) the factors described in subsection
(b)(3)(A);
(D) capital requirements applicable to the
nonbank financial company supervised by the
Board of Governors or a bank holding company
described in subsection (a), and subsidiaries
thereof; and
(E) any other factor that the Board of
Governors deems appropriate.
(d) Resolution Plan and Credit Exposure Reports.--
(1) Resolution plan.--The Board of Governors shall
require each nonbank financial company supervised by
the Board of Governors and bank holding companies
described in subsection (a) to report [periodically]
every 2 years to the Board of Governors, the Council,
and the Corporation the plan of such company for rapid
and orderly resolution in the event of material
financial distress or failure, which shall include--
(A) information regarding the manner and
extent to which any insured depository
institution affiliated with the company is
adequately protected from risks arising from
the activities of any nonbank subsidiaries of
the company;
(B) full descriptions of the ownership
structure, assets, liabilities, and contractual
obligations of the company;
(C) identification of the cross-guarantees
tied to different securities, identification of
major counterparties, and a process for
determining to whom the collateral of the
company is pledged; and
(D) any other information that the Board of
Governors and the Corporation jointly require
by rule or order.
(2) Credit exposure report.--The Board of Governors
shall require each nonbank financial company supervised
by the Board of Governors and bank holding companies
described in subsection (a) to report periodically to
the Board of Governors, the Council, and the
Corporation on--
(A) the nature and extent to which the
company has credit exposure to other
significant nonbank financial companies and
significant bank holding companies; and
(B) the nature and extent to which other
significant nonbank financial companies and
significant bank holding companies have credit
exposure to that company.
(3) Review.--[The Board]
(A) In general._The Board of Governors and
the Corporation [shall review] shall--
(i) review the information provided
in accordance with this subsection by
each nonbank financial company
supervised by the Board of Governors
and bank holding company described in
subsection (a)[.]; and
(ii) not later than the end of the 6-
month period beginning on the date the
company submits the resolution plan,
provide feedback to the company on such
plan.
(B) Disclosure of assessment framework.--The
Board of Governors and the Corporation shall
publicly disclose the assessment framework that
is used to review information under this
paragraph.
(4) Notice of deficiencies.--If the Board of
Governors and the Corporation jointly determine, based
on their review under paragraph (3), that the
resolution plan of a nonbank financial company
supervised by the Board of Governors or a bank holding
company described in subsection (a) is not credible or
would not facilitate an orderly resolution of the
company under title 11, United States Code--
(A) the Board of Governors and the
Corporation shall notify the company of the
deficiencies in the resolution plan; and
(B) the company shall resubmit the resolution
plan within a timeframe determined by the Board
of Governors and the Corporation, with
revisions demonstrating that the plan is
credible and would result in an orderly
resolution under title 11, United States Code,
including any proposed changes in business
operations and corporate structure to
facilitate implementation of the plan.
(5) Failure to resubmit credible plan.--
(A) In general.--If a nonbank financial
company supervised by the Board of Governors or
a bank holding company described in subsection
(a) fails to timely resubmit the resolution
plan as required under paragraph (4), with such
revisions as are required under subparagraph
(B), the Board of Governors and the Corporation
may jointly impose more stringent capital,
leverage, or liquidity requirements, or
restrictions on the growth, activities, or
operations of the company, or any subsidiary
thereof, until such time as the company
resubmits a plan that remedies the
deficiencies.
(B) Divestiture.--The Board of Governors and
the Corporation, in consultation with the
Council, may jointly direct a nonbank financial
company supervised by the Board of Governors or
a bank holding company described in subsection
(a), by order, to divest certain assets or
operations identified by the Board of Governors
and the Corporation, to facilitate an orderly
resolution of such company under title 11,
United States Code, in the event of the failure
of such company, in any case in which--
(i) the Board of Governors and the
Corporation have jointly imposed more
stringent requirements on the company
pursuant to subparagraph (A); and
(ii) the company has failed, within
the 2-year period beginning on the date
of the imposition of such requirements
under subparagraph (A), to resubmit the
resolution plan with such revisions as
were required under paragraph (4)(B).
(6) No limiting effect.--A resolution plan submitted
in accordance with this subsection shall not be binding
on a bankruptcy court, a receiver appointed under title
II, or any other authority that is authorized or
required to resolve the nonbank financial company
supervised by the Board, any bank holding company, or
any subsidiary or affiliate of the foregoing.
(7) No private right of action.--No private right of
action may be based on any resolution plan submitted in
accordance with this subsection.
(8) Rules.--Not later than 18 months after the date
of enactment of this Act, the Board of Governors and
the Corporation shall jointly issue final rules
implementing this subsection.
(e) Concentration Limits.--
(1) Standards.--In order to limit the risks that the
failure of any individual company could pose to a
nonbank financial company supervised by the Board of
Governors or a bank holding company described in
subsection (a), the Board of Governors, by regulation,
shall prescribe standards that limit such risks.
(2) Limitation on credit exposure.--The regulations
prescribed by the Board of Governors under paragraph
(1) shall prohibit each nonbank financial company
supervised by the Board of Governors and bank holding
company described in subsection (a) from having credit
exposure to any unaffiliated company that exceeds 25
percent of the capital stock and surplus (or such lower
amount as the Board of Governors may determine by
regulation to be necessary to mitigate risks to the
financial stability of the United States) of the
company.
(3) Credit exposure.--For purposes of paragraph (2),
``credit exposure'' to a company means--
(A) all extensions of credit to the company,
including loans, deposits, and lines of credit;
(B) all repurchase agreements and reverse
repurchase agreements with the company, and all
securities borrowing and lending transactions
with the company, to the extent that such
transactions create credit exposure for the
nonbank financial company supervised by the
Board of Governors or a bank holding company
described in subsection (a);
(C) all guarantees, acceptances, or letters
of credit (including endorsement or standby
letters of credit) issued on behalf of the
company;
(D) all purchases of or investment in
securities issued by the company;
(E) counterparty credit exposure to the
company in connection with a derivative
transaction between the nonbank financial
company supervised by the Board of Governors or
a bank holding company described in subsection
(a) and the company; and
(F) any other similar transactions that the
Board of Governors, by regulation, determines
to be a credit exposure for purposes of this
section.
(4) Attribution rule.--For purposes of this
subsection, any transaction by a nonbank financial
company supervised by the Board of Governors or a bank
holding company described in subsection (a) with any
person is a transaction with a company, to the extent
that the proceeds of the transaction are used for the
benefit of, or transferred to, that company.
(5) Rulemaking.--The Board of Governors may issue
such regulations and orders, including definitions
consistent with this section, as may be necessary to
administer and carry out this subsection.
(6) Exemptions.--This subsection shall not apply to
any Federal home loan bank. The Board of Governors may,
by regulation or order, exempt transactions, in whole
or in part, from the definition of the term ``credit
exposure'' for purposes of this subsection, if the
Board of Governors finds that the exemption is in the
public interest and is consistent with the purpose of
this subsection.
(7) Transition period.--
(A) In general.--This subsection and any
regulations and orders of the Board of
Governors under this subsection shall not be
effective until 3 years after the date of
enactment of this Act.
(B) Extension authorized.--The Board of
Governors may extend the period specified in
subparagraph (A) for not longer than an
additional 2 years.
(f) Enhanced Public Disclosures.--The Board of Governors may
prescribe, by regulation, periodic public disclosures by
nonbank financial companies supervised by the Board of
Governors and bank holding companies described in subsection
(a) in order to support market evaluation of the risk profile,
capital adequacy, and risk management capabilities thereof.
(g) Short-term Debt Limits.--
(1) In general.--In order to mitigate the risks that
an over-accumulation of short-term debt could pose to
financial companies and to the stability of the United
States financial system, the Board of Governors may, by
regulation, prescribe a limit on the amount of short-
term debt, including off-balance sheet exposures, that
may be accumulated by any bank holding company
described in subsection (a) and any nonbank financial
company supervised by the Board of Governors.
(2) Basis of limit.--Any limit prescribed under
paragraph (1) shall be based on the short-term debt of
the company described in paragraph (1) as a percentage
of capital stock and surplus of the company or on such
other measure as the Board of Governors considers
appropriate.
(3) Short-term debt defined.--For purposes of this
subsection, the term ``short-term debt'' means such
liabilities with short-dated maturity that the Board of
Governors identifies, by regulation, except that such
term does not include insured deposits.
(4) Rulemaking authority.--In addition to prescribing
regulations under paragraphs (1) and (3), the Board of
Governors may prescribe such regulations, including
definitions consistent with this subsection, and issue
such orders, as may be necessary to carry out this
subsection.
(5) Authority to issue exemptions and adjustments.--
Notwithstanding the Bank Holding Company Act of 1956
(12 U.S.C. 1841 et seq.), the Board of Governors may,
if it determines such action is necessary to ensure
appropriate heightened prudential supervision, with
respect to a company described in paragraph (1) that
does not control an insured depository institution,
issue to such company an exemption from or adjustment
to the limit prescribed under paragraph (1).
(h) Risk Committee.--
(1) Nonbank financial companies supervised by the
board of governors.--The Board of Governors shall
require each nonbank financial company supervised by
the Board of Governors that is a publicly traded
company to establish a risk committee, as set forth in
paragraph (3), not later than 1 year after the date of
receipt of a notice of final determination under
section 113(e)(3) with respect to such nonbank
financial company supervised by the Board of Governors.
(2) Certain bank holding companies.--
(A) Mandatory regulations.--The Board of
Governors shall issue regulations requiring
each bank holding company that is a publicly
traded company and that has total consolidated
assets of not less than $10,000,000,000 to
establish a risk committee, as set forth in
paragraph (3).
(B) Permissive regulations.--The Board of
Governors may require each bank holding company
that is a publicly traded company and that has
total consolidated assets of less than
$10,000,000,000 to establish a risk committee,
as set forth in paragraph (3), as determined
necessary or appropriate by the Board of
Governors to promote sound risk management
practices.
(3) Risk committee.--A risk committee required by
this subsection shall--
(A) be responsible for the oversight of the
enterprise-wide risk management practices of
the nonbank financial company supervised by the
Board of Governors or bank holding company
described in subsection (a), as applicable;
(B) include such number of independent
directors as the Board of Governors may
determine appropriate, based on the nature of
operations, size of assets, and other
appropriate criteria related to the nonbank
financial company supervised by the Board of
Governors or a bank holding company described
in subsection (a), as applicable; and
(C) include at least 1 risk management expert
having experience in identifying, assessing,
and managing risk exposures of large, complex
firms.
(4) Rulemaking.--The Board of Governors shall issue
final rules to carry out this subsection, not later
than 1 year after the transfer date, to take effect not
later than 15 months after the transfer date.
(i) Stress Tests.--
(1) By the board of governors.--
(A) Annual tests required.--The Board of
Governors, in coordination with the appropriate
primary financial regulatory agencies and the
Federal Insurance Office, shall conduct annual
analyses in which nonbank financial companies
supervised by the Board of Governors and bank
holding companies described in subsection (a)
are subject to evaluation of whether such
companies have the capital, on a total
consolidated basis, necessary to absorb losses
as a result of adverse economic conditions.
(B) Test parameters and consequences.--The
Board of Governors--
(i) shall provide for at least 3
different sets of conditions under
which the evaluation required by this
subsection shall be conducted,
including baseline, adverse, and
severely adverse;
(ii) may require the tests described
in subparagraph (A) at bank holding
companies and nonbank financial
companies, in addition to those for
which annual tests are required under
subparagraph (A);
(iii) may develop and apply such
other analytic techniques as are
necessary to identify, measure, and
monitor risks to the financial
stability of the United States;
(iv) shall require the companies
described in subparagraph (A) to update
their resolution plans required under
subsection (d)(1), as the Board of
Governors determines appropriate, based
on the results of the analyses; and
(v) shall publish a summary of the
results of the tests required under
subparagraph (A) or clause (ii) of this
subparagraph.
(2) By the company.--
(A) Requirement.--A nonbank financial company
supervised by the Board of Governors and a bank
holding company described in subsection (a)
shall conduct semiannual stress tests. All
other financial companies that have total
consolidated assets of more than
$10,000,000,000 and [are regulated by a primary
Federal financial regulatory agency] whose
primary financial regulatory agency is a
Federal banking agency or the Federal Housing
Finance Agency shall conduct annual stress
tests. The tests required under this
subparagraph shall be conducted in accordance
with the regulations prescribed under
subparagraph (C).
(B) Report.--A company required to conduct
stress tests under subparagraph (A) shall
submit a report to the Board of Governors and
to its primary financial regulatory agency at
such time, in such form, and containing such
information as the primary financial regulatory
agency shall require.
(C) Regulations.--Each Federal primary
financial regulatory agency, in coordination
with the Board of Governors and the Federal
Insurance Office, shall issue consistent and
comparable regulations to implement this
paragraph that shall--
(i) define the term ``stress test''
for purposes of this paragraph;
(ii) establish methodologies for the
conduct of stress tests required by
this paragraph that shall provide for
at least 3 different sets of
conditions, including baseline,
adverse, and severely adverse;
(iii) establish the form and content
of the report required by subparagraph
(B); and
(iv) require companies subject to
this paragraph to publish a summary of
the results of the required stress
tests.
(D) SEC and cftc.--The Securities and
Exchange Commission and the Commodity Futures
Trading Commission may each issue regulations
requiring financial companies with respect to
which they are the primary financial regulatory
agency to conduct periodic analyses of the
financial condition, including available
liquidity, of such companies under adverse
economic conditions.
(j) Leverage Limitation.--
(1) Requirement.--The Board of Governors shall
require a bank holding company with total consolidated
assets equal to or greater than $50,000,000,000 or a
nonbank financial company supervised by the Board of
Governors to maintain a debt to equity ratio of no more
than 15 to 1, upon a determination by the Council that
such company poses a grave threat to the financial
stability of the United States and that the imposition
of such requirement is necessary to mitigate the risk
that such company poses to the financial stability of
the United States. Nothing in this paragraph shall
apply to a Federal home loan bank.
(2) Considerations.--In making a determination under
this subsection, the Council shall consider the factors
described in subsections (a) and (b) of section 113 and
any other risk-related factors that the Council deems
appropriate.
(3) Regulations.--The Board of Governors shall
promulgate regulations to establish procedures and
timelines for complying with the requirements of this
subsection.
(k) Inclusion of Off-balance-sheet Activities in Computing
Capital Requirements.--
(1) In general.--In the case of any bank holding
company described in subsection (a) or nonbank
financial company supervised by the Board of Governors,
the computation of capital for purposes of meeting
capital requirements shall take into account any off-
balance-sheet activities of the company.
(2) Exemptions.--If the Board of Governors determines
that an exemption from the requirement under paragraph
(1) is appropriate, the Board of Governors may exempt a
company, or any transaction or transactions engaged in
by such company, from the requirements of paragraph
(1).
(3) Off-balance-sheet activities defined.--For
purposes of this subsection, the term ``off-balance-
sheet activities'' means an existing liability of a
company that is not currently a balance sheet
liability, but may become one upon the happening of
some future event, including the following
transactions, to the extent that they may create a
liability:
(A) Direct credit substitutes in which a bank
substitutes its own credit for a third party,
including standby letters of credit.
(B) Irrevocable letters of credit that
guarantee repayment of commercial paper or tax-
exempt securities.
(C) Risk participations in bankers'
acceptances.
(D) Sale and repurchase agreements.
(E) Asset sales with recourse against the
seller.
(F) Interest rate swaps.
(G) Credit swaps.
(H) Commodities contracts.
(I) Forward contracts.
(J) Securities contracts.
(K) Such other activities or transactions as
the Board of Governors may, by rule, define.
* * * * * * *
TITLE IX--INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF
SECURITIES
* * * * * * *
Subtitle I--Public Company Accounting Oversight Board, Portfolio
Margining, and Other Matters
* * * * * * *
SEC. 989E. ADDITIONAL OVERSIGHT OF FINANCIAL REGULATORY SYSTEM.
(a) Council of Inspectors General on Financial Oversight.--
(1) Establishment and membership.--There is
established a Council of Inspectors General on
Financial Oversight (in this section referred to as the
``Council of Inspectors General'') chaired by the
Inspector General of the Department of the Treasury and
composed of the inspectors general of the following:
(A) The Board of Governors of the Federal
Reserve System.
(B) The Commodity Futures Trading Commission.
(C) The Department of Housing and Urban
Development.
(D) The Department of the Treasury.
(E) The Federal Deposit Insurance
Corporation.
(F) The Federal Housing Finance Agency.
(G) The National Credit Union Administration.
(H) The Securities and Exchange Commission.
(I) The Troubled Asset Relief Program (until
the termination of the authority of the Special
Inspector General for such program under
section 121(k) of the Emergency Economic
Stabilization Act of 2008 (12 U.S.C. 5231(k))).
(J) The Bureau of Consumer Financial
Protection.
(2) Duties.--
(A) Meetings.--The Council of Inspectors
General shall meet not less than once each
quarter, or more frequently if the chair
considers it appropriate, to facilitate the
sharing of information among inspectors general
and to discuss the ongoing work of each
inspector general who is a member of the
Council of Inspectors General, with a focus on
concerns that may apply to the broader
financial sector and ways to improve financial
oversight.
(B) Annual report.--Each year the Council of
Inspectors General shall submit to the Council
and to Congress a report including--
(i) for each inspector general who is
a member of the Council of Inspectors
General, a section within the exclusive
editorial control of such inspector
general that highlights the concerns
and recommendations of such inspector
general in such inspector general's
ongoing and completed work, with a
focus on issues that may apply to the
broader financial sector; and
(ii) a summary of the general
observations of the Council of
Inspectors General based on the views
expressed by each inspector general as
required by clause (i), with a focus on
measures that should be taken to
improve financial oversight.
(3) Working groups to evaluate council.--
(A) Convening a working group.--The Council
of Inspectors General may, by majority vote,
convene a Council of Inspectors General Working
Group to evaluate the effectiveness and
internal operations of the Council.
(B) Personnel and resources.--The inspectors
general who are members of the Council of
Inspectors General may detail staff and
resources to a Council of Inspectors General
Working Group established under this paragraph
to enable it to carry out its duties.
(C) Reports.--A Council of Inspectors General
Working Group established under this paragraph
shall submit regular reports to the Council and
to Congress on its evaluations pursuant to this
paragraph.
(b) Response to Report by Council.--The Council shall respond
to the concerns raised in the report of the Council of
Inspectors General under subsection (a)(2)(B) for such year.
* * * * * * *
TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION
* * * * * * *
Subtitle A--Bureau of Consumer Financial Protection
SEC. 1011. ESTABLISHMENT OF THE BUREAU OF CONSUMER FINANCIAL
PROTECTION.
(a) Bureau Established.--There is established in the Federal
Reserve System, an independent bureau to be known as the
``Bureau of Consumer Financial Protection'', which shall
regulate the offering and provision of consumer financial
products or services under the Federal consumer financial laws.
The Bureau shall be considered an Executive agency, as defined
in section 105 of title 5, United States Code. Except as
otherwise provided expressly by law, all Federal laws dealing
with public or Federal contracts, property, works, officers,
employees, budgets, or funds, including the provisions of
chapters 5 and 7 of title 5, shall apply to the exercise of the
powers of the Bureau.
(b) Director [and Deputy Director], Deputy Director, and
Inspector General.--
(1) In general.--There is established the position of
the Director, who shall serve as the head of the
Bureau.
(2) Appointment.--Subject to paragraph (3), the
Director shall be appointed by the President, by and
with the advice and consent of the Senate.
(3) Qualification.--The President shall nominate the
Director from among individuals who are citizens of the
United States.
(4) Compensation.--The Director shall be compensated
at the rate prescribed for level II of the Executive
Schedule under section 5313 of title 5, United States
Code.
(5) Deputy director.--There is established the
position of Deputy Director, who shall--
(A) be appointed by the Director; and
(B) serve as acting Director in the absence
or unavailability of the Director.
(6) Inspector general.--There is established the
position of the Inspector General.
(c) Term.--
(1) In general.--The Director shall serve for a term
of 5 years.
(2) Expiration of term.--An individual may serve as
Director after the expiration of the term for which
appointed, until a successor has been appointed and
qualified.
(3) Removal for cause.--The President may remove the
Director for inefficiency, neglect of duty, or
malfeasance in office.
(d) Service Restriction.--No Director [or Deputy Director],
Deputy Director, or Inspector General may hold any office,
position, or employment in any Federal reserve bank, Federal
home loan bank, covered person, or service provider during the
period of service of such person as Director [or Deputy
Director], Deputy Director, or Inspector General.
(e) Offices.--The principal office of the Bureau shall be in
the District of Columbia. The Director may establish regional
offices of the Bureau, including in cities in which the Federal
reserve banks, or branches of such banks, are located, in order
to carry out the responsibilities assigned to the Bureau under
the Federal consumer financial laws.
* * * * * * *
SEC. 1016. APPEARANCES BEFORE AND REPORTS TO CONGRESS.
(a) Appearances Before Congress.--The Director of the Bureau
shall appear before the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial
Services and the Committee on Energy and Commerce of the House
of Representatives at semi-annual hearings regarding the
reports required under subsection (b).
(b) Reports Required.--The Bureau shall, concurrent with each
semi-annual hearing referred to in subsection (a), prepare and
submit to the President and to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services and the Committee on Energy and Commerce of
the House of Representatives, a report, beginning with the
session following the designated transfer date. The Bureau may
also submit such report to the Committee on Commerce, Science,
and Transportation of the Senate.
(c) Contents.--The reports required by subsection (b) shall
include--
(1) a discussion of the significant problems faced by
consumers in shopping for or obtaining consumer
financial products or services;
(2) a justification of the budget request of the
previous year;
(3) a list of the significant rules and orders
adopted by the Bureau, as well as other significant
initiatives conducted by the Bureau, during the
preceding year and the plan of the Bureau for rules,
orders, or other initiatives to be undertaken during
the upcoming period;
(4) an analysis of complaints about consumer
financial products or services that the Bureau has
received and collected in its central database on
complaints during the preceding year;
(5) a list, with a brief statement of the issues, of
the public supervisory and enforcement actions to which
the Bureau was a party during the preceding year;
(6) the actions taken regarding rules, orders, and
supervisory actions with respect to covered persons
which are not credit unions or depository institutions;
(7) an assessment of significant actions by State
attorneys general or State regulators relating to
Federal consumer financial law;
(8) an analysis of the efforts of the Bureau to
fulfill the fair lending mission of the Bureau; and
(9) an analysis of the efforts of the Bureau to
increase workforce and contracting diversity consistent
with the procedures established by the Office of
Minority and Women Inclusion.
(d) Additional Requirement for Inspector General.--On a
separate occasion from that described in subsection (a), the
Inspector General of the Bureau shall appear, upon invitation,
before the Committee on Banking, Housing, and Urban Affairs of
the Senate and the Committee on Financial Services of the House
of Representatives at hearings no less frequently than twice
annually, at a date determined by the chairman of the
respective committee, regarding the reports required under
subsection (b) and the reports required under section 5 of the
Inspector General Act of 1978 (5 U.S.C. App.).
* * * * * * *
SEC. 1017. FUNDING; PENALTIES AND FINES.
(a) Transfer of Funds From Board Of Governors.--
(1) In general.--Each year (or quarter of such year),
beginning on the designated transfer date, and each
quarter thereafter, the Board of Governors shall
transfer to the Bureau from the combined earnings of
the Federal Reserve System, the amount determined by
the Director to be reasonably necessary to carry out
the authorities of the Bureau under Federal consumer
financial law, taking into account such other sums made
available to the Bureau from the preceding year (or
quarter of such year).
(2) Funding cap.--
(A) In general.--Notwithstanding paragraph
(1), and in accordance with this paragraph, the
amount that shall be transferred to the Bureau
in each fiscal year shall not exceed a fixed
percentage of the total operating expenses of
the Federal Reserve System, as reported in the
Annual Report, 2009, of the Board of Governors,
equal to--
(i) 10 percent of such expenses in
fiscal year 2011;
(ii) 11 percent of such expenses in
fiscal year 2012; and
(iii) 12 percent of such expenses in
fiscal year 2013, and in each year
thereafter.
(B) Adjustment of amount.--The dollar amount
referred to in subparagraph (A)(iii) shall be
adjusted annually, using the percent increase,
if any, in the employment cost index for total
compensation for State and local government
workers published by the Federal Government, or
the successor index thereto, for the 12-month
period ending on September 30 of the year
preceding the transfer.
(C) Funding for office of inspector
general.--Each fiscal year, the Bureau shall
dedicate 2 percent of the funds transferred
pursuant to paragraph (1) to the Office of the
Inspector General.
[(C)] (D) Reviewability.--Notwithstanding any
other provision in this title, the funds
derived from the Federal Reserve System
pursuant to this subsection shall not be
subject to review by the Committees on
Appropriations of the House of Representatives
and the Senate.
(3) Transition period.--Beginning on the date of
enactment of this Act and until the designated transfer
date, the Board of Governors shall transfer to the
Bureau the amount estimated by the Secretary needed to
carry out the authorities granted to the Bureau under
Federal consumer financial law, from the date of
enactment of this Act until the designated transfer
date.
(4) Budget and financial management.--
(A) Financial operating plans and
forecasts.--The Director shall provide to the
Director of the Office of Management and Budget
copies of the financial operating plans and
forecasts of the Director, as prepared by the
Director in the ordinary course of the
operations of the Bureau, and copies of the
quarterly reports of the financial condition
and results of operations of the Bureau, as
prepared by the Director in the ordinary course
of the operations of the Bureau.
(B) Financial statements.--The Bureau shall
prepare annually a statement of--
(i) assets and liabilities and
surplus or deficit;
(ii) income and expenses; and
(iii) sources and application of
funds.
(C) Financial management systems.--The Bureau
shall implement and maintain financial
management systems that comply substantially
with Federal financial management systems
requirements and applicable Federal accounting
standards.
(D) Assertion of internal controls.--The
Director shall provide to the Comptroller
General of the United States an assertion as to
the effectiveness of the internal controls that
apply to financial reporting by the Bureau,
using the standards established in section
3512(c) of title 31, United States Code.
(E) Rule of construction.--This subsection
may not be construed as implying any obligation
on the part of the Director to consult with or
obtain the consent or approval of the Director
of the Office of Management and Budget with
respect to any report, plan, forecast, or other
information referred to in subparagraph (A) or
any jurisdiction or oversight over the affairs
or operations of the Bureau.
(F) Financial statements.--The financial
statements of the Bureau shall not be
consolidated with the financial statements of
either the Board of Governors or the Federal
Reserve System.
(5) Audit of the bureau.--
(A) In general.--The Comptroller General
shall annually audit the financial transactions
of the Bureau in accordance with the United
States generally accepted government auditing
standards, as may be prescribed by the
Comptroller General of the United States. The
audit shall be conducted at the place or places
where accounts of the Bureau are normally kept.
The representatives of the Government
Accountability Office shall have access to the
personnel and to all books, accounts,
documents, papers, records (including
electronic records), reports, files, and all
other papers, automated data, things, or
property belonging to or under the control of
or used or employed by the Bureau pertaining to
its financial transactions and necessary to
facilitate the audit, and such representatives
shall be afforded full facilities for verifying
transactions with the balances or securities
held by depositories, fiscal agents, and
custodians. All such books, accounts,
documents, records, reports, files, papers, and
property of the Bureau shall remain in
possession and custody of the Bureau. The
Comptroller General may obtain and duplicate
any such books, accounts, documents, records,
working papers, automated data and files, or
other information relevant to such audit
without cost to the Comptroller General, and
the right of access of the Comptroller General
to such information shall be enforceable
pursuant to section 716(c) of title 31, United
States Code.
(B) Report.--The Comptroller General shall
submit to the Congress a report of each annual
audit conducted under this subsection. The
report to the Congress shall set forth the
scope of the audit and shall include the
statement of assets and liabilities and surplus
or deficit, the statement of income and
expenses, the statement of sources and
application of funds, and such comments and
information as may be deemed necessary to
inform Congress of the financial operations and
condition of the Bureau, together with such
recommendations with respect thereto as the
Comptroller General may deem advisable. A copy
of each report shall be furnished to the
President and to the Bureau at the time
submitted to the Congress.
(C) Assistance and costs.--For the purpose of
conducting an audit under this subsection, the
Comptroller General may, in the discretion of
the Comptroller General, employ by contract,
without regard to section 3709 of the Revised
Statutes of the United States (41 U.S.C. 5),
professional services of firms and
organizations of certified public accountants
for temporary periods or for special purposes.
Upon the request of the Comptroller General,
the Director of the Bureau shall transfer to
the Government Accountability Office from funds
available, the amount requested by the
Comptroller General to cover the full costs of
any audit and report conducted by the
Comptroller General. The Comptroller General
shall credit funds transferred to the account
established for salaries and expenses of the
Government Accountability Office, and such
amount shall be available upon receipt and
without fiscal year limitation to cover the
full costs of the audit and report.
(b) Consumer Financial Protection Fund.--
(1) Separate fund in federal reserve established.--
There is established in the Federal Reserve a separate
fund, to be known as the ``Bureau of Consumer Financial
Protection Fund'' (referred to in this section as the
``Bureau Fund''). The Bureau Fund shall be maintained
and established at a Federal reserve bank, in
accordance with such requirements as the Board of
Governors may impose.
(2) Fund receipts.--All amounts transferred to the
Bureau under subsection (a) shall be deposited into the
Bureau Fund.
(3) Investment authority.--
(A) Amounts in bureau fund may be invested.--
The Bureau may request the Board of Governors
to direct the investment of the portion of the
Bureau Fund that is not, in the judgment of the
Bureau, required to meet the current needs of
the Bureau.
(B) Eligible investments.--Investments
authorized by this paragraph shall be made in
obligations of the United States or obligations
that are guaranteed as to principal and
interest by the United States, with maturities
suitable to the needs of the Bureau Fund, as
determined by the Bureau.
(C) Interest and proceeds credited.--The
interest on, and the proceeds from the sale or
redemption of, any obligations held in the
Bureau Fund shall be credited to the Bureau
Fund.
(c) Use of Funds.--
(1) In general.--Funds obtained by, transferred to,
or credited to the Bureau Fund shall be immediately
available to the Bureau and under the control of the
Director, and shall remain available until expended, to
pay the expenses of the Bureau in carrying out its
duties and responsibilities. The compensation of the
Director and other employees of the Bureau and all
other expenses thereof may be paid from, obtained by,
transferred to, or credited to the Bureau Fund under
this section.
(2) Funds that are not government funds.--Funds
obtained by or transferred to the Bureau Fund shall not
be construed to be Government funds or appropriated
monies.
(3) Amounts not subject to apportionment.--
Notwithstanding any other provision of law, amounts in
the Bureau Fund and in the Civil Penalty Fund
established under subsection (d) shall not be subject
to apportionment for purposes of chapter 15 of title
31, United States Code, or under any other authority.
(d) Penalties and Fines.--
(1) Establishment of victims relief fund.--There is
established in the Federal Reserve a separate fund, to
be known as the ``Consumer Financial Civil Penalty
Fund'' (referred to in this section as the ``Civil
Penalty Fund''). The Civil Penalty Fund shall be
maintained and established at a Federal reserve bank,
in accordance with such requirements as the Board of
Governors may impose. If the Bureau obtains a civil
penalty against any person in any judicial or
administrative action under Federal consumer financial
laws, the Bureau shall deposit into the Civil Penalty
Fund, the amount of the penalty collected.
(2) Payment to victims.--Amounts in the Civil Penalty
Fund shall be available to the Bureau, without fiscal
year limitation, for payments to the victims of
activities for which civil penalties have been imposed
under the Federal consumer financial laws. To the
extent that such victims cannot be located or such
payments are otherwise not practicable, the Bureau may
use such funds for the purpose of consumer education
and financial literacy programs.
(e) Authorization of Appropriations; Annual Report.--
(1) Determination regarding need for appropriated
funds.--
(A) In general.--The Director is authorized
to determine that sums available to the Bureau
under this section will not be sufficient to
carry out the authorities of the Bureau under
Federal consumer financial law for the upcoming
year.
(B) Report required.--When making a
determination under subparagraph (A), the
Director shall prepare a report regarding the
funding of the Bureau, including the assets and
liabilities of the Bureau, and the extent to
which the funding needs of the Bureau are
anticipated to exceed the level of the amount
set forth in subsection (a)(2). The Director
shall submit the report to the President and to
the Committee on Appropriations of the Senate
and the Committee on Appropriations of the
House of Representatives.
(2) Authorization of appropriations.--If the Director
makes the determination and submits the report pursuant
to paragraph (1), there are hereby authorized to be
appropriated to the Bureau, for the purposes of
carrying out the authorities granted in Federal
consumer financial law, $200,000,000 for each of fiscal
years 2010, 2011, 2012, 2013, and 2014.
(3) Apportionment.--Notwithstanding any other
provision of law, the amounts in paragraph (2) shall be
subject to apportionment under section 1517 of title
31, United States Code, and restrictions that generally
apply to the use of appropriated funds in title 31,
United States Code, and other laws.
(4) Annual report.--The Director shall prepare and
submit a report, on an annual basis, to the Committee
on Appropriations of the Senate and the Committee on
Appropriations of the House of Representatives
regarding the financial operating plans and forecasts
of the Director, the financial condition and results of
operations of the Bureau, and the sources and
application of funds of the Bureau, including any funds
appropriated in accordance with this subsection.
* * * * * * *
----------
FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL ACT OF 1978
* * * * * * *
TITLE X--FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL
* * * * * * *
definitions
Sec. 1003. As used in this title--
[(1) the term ``Federal financial institutions
regulatory agencies'' means the Office of the
Comptroller of the Currency, the Board of Governors of
the Federal Reserve System, the Federal Deposit
Insurance Corporation, the Office of Thrift
Supervision, and the National Credit Union
Administration;]
(1) the term ``Federal financial institutions
regulatory agencies''--
(A) means the Office of the Comptroller of
the Currency, the Board of Governors of the
Federal Reserve System, the Federal Deposit
Insurance Corporation, and the National Credit
Union Administration; and
(B) for purposes of sections 1012, 1013, and
1014, includes the Bureau of Consumer Financial
Protection;
(2) the term ``Council'' means the Financial
Institutions Examination Council; and
[(3) the term ``financial institution'' means a
commercial bank, a savings bank, a trust company, a
savings association, a building and loan association, a
homestead association, a cooperative bank, or a credit
union;]
(3) the term ``financial institution''--
(A) means a commercial bank, a savings bank,
a trust company, a savings association, a
building and loan association, a homestead
association, a cooperative bank, or a credit
union; and
(B) for purposes of sections 1012, 1013, and
1014, includes a nondepository covered person
subject to supervision by the Bureau of
Consumer Financial Protection under section
1024 of the Consumer Financial Protection Act
of 2010 (12 U.S.C. 5514).
* * * * * * *
expenses of the council
Sec. 1005. [One-fifth] One-fourth of the costs and expenses
of the Council, including the salaries of its employees, shall
be paid by each of the Federal financial institutions
regulatory agencies. Annual assessments for such share shall be
levied by the Council based upon its projected budget for the
year, and additional assessments may be made during the year if
necessary.
* * * * * * *
SEC. 1012. TIMELINESS OF EXAMINATION REPORTS.
(a) In General.--
(1) Final examination report.--A Federal financial
institutions regulatory agency shall provide a final
examination report to a financial institution not later
than 60 days after the later of--
(A) the exit interview for an examination of
the institution; or
(B) the provision of additional information
by the institution relating to the examination.
(2) Exit interview.--If a financial institution is
not subject to a resident examiner program, the exit
interview shall occur not later than the end of the 9-
month period beginning on the commencement of the
examination, except that such period may be extended by
the Federal financial institutions regulatory agency by
providing written notice to the institution and the
Independent Examination Review Director describing with
particularity the reasons that a longer period is
needed to complete the examination.
(b) Examination Materials.--Upon the request of a financial
institution, the Federal financial institutions regulatory
agency shall include with the final report an appendix listing
all examination or other factual information relied upon by the
agency in support of a material supervisory determination.
SEC. 1013. OFFICE OF INDEPENDENT EXAMINATION REVIEW.
(a) Establishment.--There is established in the Council an
Office of Independent Examination Review (the ``Office'').
(b) Head of Office.--There is established the position of the
Independent Examination Review Director (the ``Director''), as
the head of the Office. The Director shall be appointed by the
Council and shall be independent from any member agency of the
Council.
(c) Term.--The Director shall serve for a term of 5 years,
and may be appointed to serve a subsequent 5-year term.
(d) Staffing.--The Director is authorized to hire staff to
support the activities of the Office.
(e) Duties.--The Director shall--
(1) receive and, at the Director's discretion,
investigate complaints from financial institutions,
their representatives, or another entity acting on
behalf of such institutions, concerning examinations,
examination practices, or examination reports;
(2) hold meetings, at least once every three months
and in locations designed to encourage participation
from all sections of the United States, with financial
institutions, their representatives, or another entity
acting on behalf of such institutions, to discuss
examination procedures, examination practices, or
examination policies;
(3) in accordance with subsection (f), review
examination procedures of the Federal financial
institutions regulatory agencies to ensure that the
written examination policies of those agencies are
being followed in practice and adhere to the standards
for consistency established by the Council;
(4) conduct a continuing and regular review of
examination quality assurance for all examination types
conducted by the Federal financial institutions
regulatory agencies;
(5) adjudicate any supervisory appeal initiated under
section 1014; and
(6) report annually to the Committee on Financial
Services of the House of Representatives, the Committee
on Banking, Housing, and Urban Affairs of the Senate,
and the Council, on the reviews carried out pursuant to
paragraphs (3) and (4), including compliance with the
requirements set forth in section 1012 regarding
timeliness of examination reports, and the Council's
recommendations for improvements in examination
procedures, practices, and policies.
(f) Standard for Reviewing Examination Procedures.--In
conducting reviews pursuant to subsection (e)(4), the Director
shall prioritize factors relating to the safety and soundness
of the financial system of the United States.
(g) Removal.--If the Director is removed from office, the
Council shall communicate in writing the reasons for any such
removal to the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate not later than 30 days before the
removal.
(h) Confidentiality.--The Director shall keep confidential
all meetings with, discussions with, and information provided
by financial institutions.
SEC. 1014. RIGHT TO INDEPENDENT REVIEW OF MATERIAL SUPERVISORY
DETERMINATIONS.
(a) In General.--A financial institution shall have the right
to obtain an independent review of a material supervisory
determination contained in a final report of examination.
(b) Notice.--
(1) Timing.--A financial institution seeking review
of a material supervisory determination under this
section shall file a written notice with the
Independent Examination Review Director (the
``Director'') within 60 days after receiving the final
report of examination that is the subject of such
review.
(2) Identification of determination.--The written
notice shall identify the material supervisory
determination that is the subject of the independent
examination review, and a statement of the reasons why
the institution believes that the determination is
incorrect or should otherwise be modified.
(3) Information to be provided to institution.--Any
information relied upon by the agency in the final
report that is not in the possession of the financial
institution may be requested by the financial
institution and shall be delivered promptly by the
agency to the financial institution.
(c) Right to Hearing.--
(1) In general.--The Director shall determine the
merits of the appeal on the record or, at the financial
institution's election, shall refer the appeal to an
Administrative Law Judge to conduct a confidential
hearing pursuant to the procedures set forth under
sections 556 and 557 of title 5, United States Code,
which hearing shall take place not later than 60 days
after the petition for review was received by the
Director, and to issue a proposed decision to the
Director based upon the record established at such
hearing.
(2) Standard of review.--In rendering a determination
or recommendation under this subsection, neither the
Administrative Law Judge nor the Director shall defer
to the opinions of the examiner or agency, but shall
conduct a de novo review to independently determine the
appropriateness of the agency's decision based upon the
relevant statutes, regulations, and other appropriate
guidance, as well as evidence adduced at any hearing.
(d) Final Decision.--A decision by the Director on an
independent review under this section shall--
(1) be made not later than 60 days after the record
has been closed; and
(2) subject to subsection (e), be deemed a final
agency action and shall bind the agency whose
supervisory determination was the subject of the review
and the financial institution requesting the review.
(e) Limited Review by FFIEC.--
(1) In general.--If the agency whose supervisory
determination was the subject of the review believes
that the Director's decision under subsection (d) would
pose an imminent threat to the safety and soundness of
the financial institution, such agency may file a
written notice seeking review of the Director's
decision with the Council within 10 days of receiving
the Director's decision.
(2) Standard of review.--In making a determination
under this subsection, the Council shall conduct a
review to determine whether there is substantial
evidence that the Director's decision would pose an
imminent threat to the safety and soundness of the
financial institution.
(3) Final determination.--A determination by the
Council shall--
(A) be made not later than 30 days after the
filing of the notice pursuant to paragraph (1);
and
(B) be deemed a final agency action and shall
bind the agency whose supervisory determination
was the subject of the review and the financial
institution requesting the review.
(f) Right to Judicial Review.--A financial institution shall
have the right to petition for review of final agency action
under this section by filing a Petition for Review within 60
days of the Director's decision or the Council's decision in
the United States Court of Appeals for the District of Columbia
Circuit or the Circuit in which the financial institution is
located.
(g) Report.--The Director shall report annually to the
Committee on Financial Services of the House of Representatives
and the Committee on Banking, Housing, and Urban Affairs of the
Senate on actions taken under this section, including the types
of issues that the Director has reviewed and the results of
those reviews. In no case shall such a report contain
information about individual financial institutions or any
confidential or privileged information shared by financial
institutions.
(h) Retaliation Prohibited.--A Federal financial institutions
regulatory agency may not--
(1) retaliate against a financial institution,
including service providers, or any institution-
affiliated party (as defined under section 3 of the
Federal Deposit Insurance Act), for exercising
appellate rights under this section; or
(2) delay or deny any agency action that would
benefit a financial institution or any institution-
affiliated party on the basis that an appeal under this
section is pending under this section.
(i) Rule of Construction.--Nothing in this section may be
construed--
(1) to affect the right of a Federal financial
institutions regulatory agency to take enforcement or
other supervisory actions related to a material
supervisory determination under review under this
section; or
(2) to prohibit the review under this section of a
material supervisory determination with respect to
which there is an ongoing enforcement or other
supervisory action.
* * * * * * *
----------
RIEGLE COMMUNITY DEVELOPMENT AND REGULATORY IMPROVEMENT ACT OF 1994
* * * * * * *
TITLE III--PAPERWORK REDUCTION AND REGULATORY IMPROVEMENT
* * * * * * *
SEC. 309. REGULATORY APPEALS PROCESS, OMBUDSMAN, AND ALTERNATIVE
DISPUTE RESOLUTION.
(a) In General.--Not later than 180 days after the date of
enactment of this Act, each appropriate Federal banking agency,
the Bureau of Consumer Financial Protection, and the National
Credit Union Administration Board shall establish an
independent intra-agency appellate process. The process shall
be available to review material supervisory determinations made
at insured depository institutions or at insured credit unions
that the agency supervises.
(b) Review Process.--In establishing the independent
appellate process under subsection (a), each agency shall
ensure that--
(1) any appeal of a material supervisory
determination by an insured depository institution or
insured credit union is heard and decided
expeditiously; and
(2) appropriate safeguards exist for protecting [the
appellant from retaliation by agency examiners] the
insured depository institution or insured credit union
from retaliation by the agencies referred to in
subsection (a).
For purposes of this subsection and subsection (e), retaliation
includes delaying consideration of, or withholding approval of,
any request, notice, or application that otherwise would have
been approved, but for the exercise of the institution's or
credit union's rights under this section.
(c) Comment Period.--Not later than 90 days after the date of
enactment of this Act, each appropriate Federal banking agency
and the National Credit Union Administration Board shall
provide public notice and opportunity for comment on proposed
guidelines for the establishment of an appellate process under
this section.
(d) Agency Ombudsman.--
(1) Establishment required.--Not later than 180 days
after the date of enactment of this Act, each Federal
banking agency and the National Credit Union
Administration Board shall appoint an ombudsman.
(2) Duties of ombudsman.--The ombudsman appointed in
accordance with paragraph (1) for any agency shall--
(A) act as a liaison between the agency and
any affected person with respect to any problem
such party may have in dealing with the agency
resulting from the regulatory activities of the
agency; and
(B) assure that safeguards exist to encourage
complainants to come forward and preserve
confidentiality.
(e) Alternative Dispute Resolution Pilot Program.--
(1) In general.--Not later than 18 months after the
date of enactment of this Act, each Federal banking
agency and the National Credit Union Administration
Board shall develop and implement a pilot program for
using alternative means of dispute resolution of issues
in controversy (hereafter in this section referred to
as the ``alternative dispute resolution program'') that
is consistent with the requirements of subchapter IV of
chapter 5 of title 5, United States Code, if the
parties to the dispute, including the agency, agree to
such proceeding.
(2) Standards.--An alternative dispute resolution
pilot program developed under paragraph (1) shall--
(A) be fair to all interested parties to a
dispute;
(B) resolve disputes expeditiously; [and]
(C) be less costly than traditional means of
dispute resolution, including litigation[.];
and
(D) ensure that appropriate safeguards exist
for protecting the insured depository
institution or insured credit union from
retaliation by any agency referred to in
subsection (a) for exercising its rights under
this subsection.
(3) Independent evaluation.--Not later than 18 months
after the date on which a pilot program is implemented
under paragraph (1), the Administrative Conference of
the United States shall submit to the Congress a report
containing--
(A) an evaluation of that pilot program;
(B) the extent to which the pilot programs
meet the standards established under paragraph
(2);
(C) the extent to which parties to disputes
were offered alternative means of dispute
resolution and the frequency with which the
parties, including the agencies, accepted or
declined to use such means; and
(D) any recommendations of the Conference to
improve the alternative dispute resolution
procedures of the Federal banking agencies and
the National Credit Union Administration Board.
(4) Implementation of program.--At any time after
completion of the evaluation under paragraph (3)(A),
any Federal banking agency and the National Credit
Union Administration Board may implement an alternative
dispute resolution program throughout the agency,
taking into account the results of that evaluation.
(5) Coordination with existing agency adr programs.--
(A) Evaluation required.--If any Federal
banking agency or the National Credit Union
Administration maintains an alternative dispute
resolution program as of the date of enactment
of this Act under any other provision of law,
the Administrative Conference of the United
States shall include such program in the
evaluation conducted under paragraph (3)(A).
(B) Multiple adr programs.--No provision of
this section shall be construed as precluding
any Federal banking agency or the National
Credit Union Administration Board from
establishing more than 1 alternative means of
dispute resolution.
(f) Definitions.--For purposes of this section, the following
definitions shall apply:
(1) Material supervisory determinations.--The term
``material supervisory determinations''--
(A) includes determinations relating to--
(i) examination ratings;
(ii) the adequacy of loan loss
reserve provisions; [and]
(iii) loan classifications on loans
that are significant to an institution;
[and]
(iv) any issue specifically listed in
an exam report as a matter requiring
attention by the institution's
management or board of directors; and
(v) any suspension or removal of an
institution's status as eligible for
expedited processing of applications,
requests, notices, or filings on the
grounds of a supervisory or compliance
concern, regardless of whether that
concern has been cited as a basis for
another material supervisory
determination or matter requiring
attention in an examination report,
provided that the conduct at issue did
not involve violation of any criminal
law; and
(B) does not include a determination by a
Federal banking agency or the National Credit
Union Administration Board to appoint a
conservator or receiver for an insured
depository institution or a liquidating agent
for an insured credit union, as the case may
be, or a decision to take action pursuant to
section 38 of the Federal Deposit Insurance Act
or section 212 of the Federal Credit Union Act,
as appropriate.
(2) Independent appellate process.--The term
``independent appellate process'' means a review by an
agency official who does not directly or indirectly
report to the agency official who made the material
supervisory determination under review.
(3) Alternative means of dispute resolution.--The
term ``alternative means of dispute resolution'' has
the meaning given to such term in section 571 of title
5, United States Code.
(4) Issues in controversy.--The term ``issues in
controversy'' means--
(A) any final agency decision involving any
claim against an insured depository institution
or insured credit union for which the agency
has been appointed conservator or receiver or
for which a liquidating agent has been
appointed, as the case may be;
(B) any final action taken by an agency in
the agency's capacity as conservator or
receiver for an insured depository institution
or by the liquidating agent appointed for an
insured credit union; and
(C) any other issue for which the appropriate
Federal banking agency or the National Credit
Union Administration Board determines that
alternative means of dispute resolution would
be appropriate.
(g) Effect on Other Authority.--Nothing in this section shall
affect the authority of an appropriate Federal banking agency
or the National Credit Union Administration Board to take
enforcement or supervisory action.
* * * * * * *
----------
FEDERAL CREDIT UNION ACT
* * * * * * *
TITLE II--SHARE INSURANCE
* * * * * * *
requirements governing insured credit unions
Sec. 205. (a) Insurance Logo.--
(1) Insured credit unions.--
(A) In general.--Each insured credit union
shall display at each place of business
maintained by that credit union a sign or signs
relating to the insurance of the share accounts
of the institution, in accordance with
regulations to be prescribed by the Board.
(B) Statement to be included.--Each sign
required under subparagraph (A) shall include a
statement that insured share accounts are
backed by the full faith and credit of the
United States Government.
(2) Regulations.--The Board shall prescribe
regulations to carry out this subsection, including
regulations governing the substance of signs required
by paragraph (1) and the manner of display or use of
such signs.
(3) Penalties.--For each day that an insured credit
union continues to violate this subsection or any
regulation issued under this subsection, it shall be
subject to a penalty of not more than $100, which the
Board may recover for its use.
(b)(1) Except as provided in paragraph (2), no insured credit
union shall, without the prior approval of the Board--
(A) merge or consolidate with any noninsured credit
union or institution;
(B) assume liability to pay any member accounts in,
or similar liabilities of, any noninsured credit union
or institution;
(C) transfer assets to any noninsured credit union or
institution in consideration of the assumption of
liabilities for any portion of the member accounts in
such insured credit union; or
(D) convert into a noninsured credit union or
institution.
(2) Conversion of insured credit unions to mutual
savings banks.--
(A) In general.--Notwithstanding paragraph
(1), an insured credit union may convert to a
mutual savings bank or savings association (if
the savings association is in mutual form), as
those terms are defined in section 3 of the
Federal Deposit Insurance Act, without the
prior approval of the Board, subject to the
requirements and procedures set forth in the
laws and regulations governing mutual savings
banks and savings associations.
(B) Conversion proposal.--A proposal for a
conversion described in subparagraph (A) shall
first be approved, and a date set for a vote
thereon by the members (either at a meeting to
be held on that date or by written ballot to be
filed on or before that date), by a majority of
the directors of the insured credit union.
Approval of the proposal for conversion shall
be by the affirmative vote of a majority of the
members of the insured credit union who vote on
the proposal.
(C) Notice of proposal to members.--An
insured credit union that proposes to convert
to a mutual savings bank or savings association
under subparagraph (A) shall submit notice to
each of its members who is eligible to vote on
the matter of its intent to convert--
(i) 90 days before the date of the
member vote on the conversion;
(ii) 60 days before the date of the
member vote on the conversion; and
(iii) 30 days before the date of the
member vote on the conversion.
(D) Notice of proposal to board.--The Board
may require an insured credit union that
proposes to convert to a mutual savings bank or
savings association under subparagraph (A) to
submit a notice to the Board of its intent to
convert during the 90-day period preceding the
date of the completion of the conversion.
(E) Inapplicability of act upon conversion.--
Upon completion of a conversion described in
subparagraph (A), the credit union shall no
longer be subject to any of the provisions of
this Act.
(F) Limit on compensation of officials.--
(i) In general.--No director or
senior management official of an
insured credit union may receive any
economic benefit in connection with a
conversion of the credit union as
described in subparagraph (A), other
than--
(I) director fees; and
(II) compensation and other
benefits paid to directors or
senior management officials of
the converted institution in
the ordinary course of
business.
(ii) Senior management official.--For
purposes of this subparagraph, the term
``senior management official'' means a
chief executive officer, an assistant
chief executive officer, a chief
financial officer, and any other senior
executive officer (as defined by the
appropriate Federal banking agency
pursuant to section 32 (f) of the
Federal Deposit Insurance Act).
(G) Consistent rules.--
(i) In general.--Not later than 6
months after the date of enactment of
the Credit Union Membership Access Act,
the Administration shall promulgate
final rules applicable to charter
conversions described in this paragraph
that are consistent with rules
promulgated by other financial
regulators, including the Office of the
Comptroller of the Currency. The rules
required by this clause shall provide
that charter conversion by an insured
credit union shall be subject to
regulation that is no more or less
restrictive than that applicable to
charter conversions by other financial
institutions.
(ii) Oversight of member vote.--The
member vote concerning charter
conversion under this paragraph shall
be administered by the Administration,
and shall be verified by the Federal or
State regulatory agency that would have
jurisdiction over the institution after
the conversion. If either the
Administration or that regulatory
agency disapproves of the methods by
which the member vote was taken or
procedures applicable to the member
vote, the member vote shall be taken
again, as directed by the
Administration or the agency.
(3) Except with the prior written approval of the Board, no
insured credit union shall merge or consolidate with any other
insured credit union or, either directly or indirectly, acquire
the assets of, or assume liability to pay any member accounts
in, any other insured credit union.
(c) In granting or withholding approval or consent under
subsection (b) of this section, the Board shall consider--
(1) the history, financial condition, and management
policies of the credit union;
(2) the adequacy of the credit union's reserves;
(3) the economic advisability of the transaction;
(4) the general character and fitness of the credit
union's management;
(5) the convenience and needs of the members to be
served by the credit union; and
(6) whether the credit union is a cooperative
association organized for the purpose of promoting
thrift among its members and creating a source of
credit for provident or productive purposes.
(d) Prohibition.--
(1) In general.--Except with prior written consent of
the Board--
(A) any person who has been convicted of any
criminal offense involving dishonesty or a
breach of trust, or has agreed to enter into a
pretrial diversion or similar program in
connection with a prosecution for such offense,
may not--
(i) become, or continue as, an
institution-affiliated party with
respect to any insured credit union; or
(ii) otherwise participate, directly
or indirectly, in the conduct of the
affairs of any insured credit union;
and
(B) any insured credit union may not permit
any person referred to in subparagraph (A) to
engage in any conduct or continue any
relationship prohibited under such
subparagraph.
(2) Minimum 10-year prohibition period for certain
offenses.--
(A) In general.--If the offense referred to
in paragraph (1)(A) in connection with any
person referred to in such paragraph is--
(i) an offense under--
(I) section 215, 656, 657,
1005, 1006, 1007, 1008, 1014,
1032, 1344, 1517, 1956, or 1957
of title 18, United States
Code; or
(II) section 1341 or 1343 of
such title which affects any
financial institution (as
defined in section 20 of such
title); or
(ii) the offense of conspiring to
commit any such offense,
the Board may not consent to any exception to
the application of paragraph (1) to such person
during the 10-year period beginning on the date
the conviction or the agreement of the person
becomes final.
(B) Exception by order of sentencing court.--
(i) In general.--On motion of the
Board, the court in which the
conviction or the agreement of a person
referred to in subparagraph (A) has
been entered may grant an exception to
the application of paragraph (1) to
such person if granting the exception
is in the interest of justice.
(ii) Period for filing.--A motion may
be filed under clause (i) at any time
during the 10-year period described in
subparagraph (A) with regard to the
person on whose behalf such motion is
made.
(3) Penalty.--Whoever knowingly violates paragraph
(1) or (2) shall be fined not more than $1,000,000 for
each day such prohibition is violated or imprisoned for
not more than 5 years, or both.
(e)(1) The Board shall promulgate rules establishing minimum
standards with which each insured credit union must comply with
respect to the installation, maintenance, and operation of
security devices and procedures, reasonable in cost, to
discourage robberies, burglaries, and larcenies and to assist
in the identification and apprehension of persons who commit
such acts.
(2) The rules shall establish the time limits within which
insured credit unions shall comply with the standards and shall
require the submission of periodic reports with respect to the
installation, maintenance, and operation of security devices
and procedures.
(3) An insured credit union which violates a rule promulgated
pursuant to this subsection shall be subject to a civil penalty
which shall not exceed $100 for each day of the violation.
(f)(1) Every insured credit union is authorized to maintain,
and make loans with respect to, share draft accounts in
accordance with rules and regulations prescribed by the Board.
Except as provided in paragraph (2), an insured credit union
may pay dividends on share draft accounts and may permit the
owners of such share draft accounts to make withdrawals by
negotiable or transferable instruments or other orders for the
purpose of making transfers to third parties.
(2) Paragraph (1) shall apply only with respect to share
draft accounts in which the entire beneficial interest is held
by one or more individuals or members or by an organization
which is operated primarily for religious, philanthropic,
charitable, educational, or other similar purposes and which is
not operated for profit, and with respect to deposits of public
funds by an officer, employee, or agent of the United States,
any State, county, municipality, or political subdivision
thereof, the District of Columbia, the Commonwealth of Puerto
Rico, American Samoa, Guam, any territory or possession of the
United States, or any political subdivision thereof.
(g)(1) If the applicable rate prescribed in this subsection
exceeds the rate an insured credit union would be permitted to
charge in the absence of this subsection, such credit union
may, notwithstanding any State constitution or statute which is
hereby preempted for the purposes of this subsection, take,
receive, reserve, and charge on any loan, interest at a rate of
not more than 1 per centum in excess of the discount rate on
ninety-day commercial paper in effect at the Federal Reserve
bank in the Federal Reserve district where such insured credit
union is located or at the rate allowed by the laws of the
State, territory, or district where such credit union is
located, whichever may be greater.
(2) If the rate prescribed in paragraph (1) exceeds the rate
such credit union would be permitted to charge in the absence
of this subsection, and such State fixed rate is thereby
preempted by the rate described in paragraph (1), the taking,
receiving, reserving, or charging a greater rate than is
allowed by paragraph (1), when knowingly done, shall be deemed
a forfeiture of the entire interest which the loan carries with
it, or which has been agreed to be paid thereon. If such
greater rate of interest has been paid, the person who paid it
may recover, in a civil action commenced in a court of
appropriate jurisdiction not later than two years after the
date of such payment, an amount equal to twice the amount of
interest paid from the credit union taking or receiving such
interest.
(h) Notwithstanding any other provision of law, the Board may
authorize a merger or consolidation of an insured credit union
which is insolvent or is in danger of insolvency with any other
insured credit union or may authorize an insured credit union
to purchase any of the assets of, or assume any of the
liabilities of, any other insured credit union which is
insolvent or in danger of insolvency if the Board is satisfied
that--
(1) an emergency requiring expeditious action exists
with respect to such other insured credit union;
(2) other alternatives are not reasonably available;
and
(3) the public interest would best be served by
approval of such merger, consolidation, purchase, or
assumption.
(i)(1) Notwithstanding any other provision of this Act or of
State law, the Board may authorize an institution whose
deposits or accounts are insured by the Federal Deposit
Insurance Corporation to purchase any of the assets of or
assume any of the liabilities of an insured credit union which
is insolvent or in danger of insolvency, except that prior to
exercising this authority the Board must attempt to effect the
merger or consolidation of an insured credit union which is
insolvent or in danger of insolvency with another insured
credit union, as provided in subsection (h).
(2) For purposes of the authority contained in paragraph (1),
insured accounts of the credit union may upon consummation of
the purchase and assumption be converted to insured deposits or
other comparable accounts in the acquiring institution, and the
Board and the National Credit Union Share Insurance Fund shall
be absolved of any liability to the credit union's members with
respect to those accounts.
(j) Privileges Not Affected by Disclosure to Banking Agency
or Supervisor.--
(1) In general.--The submission by any person of any
information to the Bureau of Consumer Financial
Protection, the Administration, any State credit union
supervisor, or foreign banking authority for any
purpose in the course of any supervisory or regulatory
process of such Board, supervisor, or authority shall
not be construed as waiving, destroying, or otherwise
affecting any privilege such person may claim with
respect to such information under Federal or State law
as to any person or entity other than such Board,
supervisor, or authority.
(2) Rule of construction.--No provision of paragraph
(1) may be construed as implying or establishing that--
(A) any person waives any privilege
applicable to information that is submitted or
transferred under any circumstance to which
paragraph (1) does not apply; or
(B) any person would waive any privilege
applicable to any information by submitting the
information to the Bureau of Consumer Financial
Protection, the Administration, any State
credit union supervisor, or foreign banking
authority, but for this subsection.
* * * * * * *
----------
REAL ESTATE SETTLEMENT PROCEDURES ACT OF 1974
* * * * * * *
uniform settlement statement
Sec. 4. (a) The Bureau shall publish a single, integrated
disclosure for mortgage loan transactions (including real
estate settlement cost statements) which includes the
disclosure requirements of this section and section 5, in
conjunction with the disclosure requirements of the Truth in
Lending Act that, taken together, may apply to a transaction
that is subject to both or either provisions of law. The
purpose of such model disclosure shall be to facilitate
compliance with the disclosure requirements of this title and
the Truth in Lending Act, and to aid the borrower or lessee in
understanding the transaction by utilizing readily
understandable language to simplify the technical nature of the
disclosures. Such forms shall conspicuously and clearly
[itemize all charges] itemize all actual charges imposed upon
the borrower [and all charges imposed upon the seller in
connection with the settlement and] and the seller in
connection with the settlement. Such forms shall indicate
whether any title insurance premium included in such charges
covers or insures the lender's interest in the property, the
borrower's interest, or both. Charges for any title insurance
premium disclosed on such forms shall be equal to the amount
charged for each individual title insurance policy, subject to
any discounts as required by State regulation or the title
company rate filings. The Bureau may, by regulation, permit the
deletion from the forms prescribed under this section of items
which are not, under local laws or customs, applicable in any
locality, except that such regulation shall require that the
numerical code prescribed by the Bureau be retained in forms to
be used in all localities. Nothing in this section may be
construed to require that that part of the standard forms which
relates to the borrower's transaction to be furnished to the
seller, or to require that that part of the standard forms
which relates to the seller be furnished to the borrower.
(b) The forms prescribed under this section shall be
completed and made available for inspection by the borrower at
or before settlement by the person conducting the settlement,
except that (1) the Bureau may exempt from the requirements of
this section settlements occurring in localities where the
final settlement statement is not customarily provided at or
before the date of settlement, or settlements where such
requirements are impractical and (2) the borrower may, in
accordance with regulations of the Bureau, waive his right to
have the forms made available at such time. Upon the request of
the borrower to inspect the forms prescribed under this section
during the business day immediately preceding the day of
settlement, the person who will conduct the settlement shall
permit the borrower to inspect those items which are known to
such person during such preceding day.
(c) The standard form described in subsection (a) may
include, in the case of an appraisal coordinated by an
appraisal management company (as such term is defined in
section 1121(11) of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989 (12 U.S.C. 3350(11))), a
clear disclosure of--
(1) the fee paid directly to the appraiser by such
company; and
(2) the administration fee charged by such company.
* * * * * * *
----------
INSPECTOR GENERAL ACT OF 1978
* * * * * * *
requirements for federal entities and designated federal entities
Sec. 8G. (a) Notwithstanding section 12 of this Act, as used
in this section--
(1) the term ``Federal entity'' means any Government
corporation (within the meaning of section 103(1) of
title 5, United States Code), any Government controlled
corporation (within the meaning of section 103(2) of
such title), or any other entity in the Executive
branch of the Government, or any independent regulatory
agency, but does not include--
(A) an establishment (as defined under
section 12(2) of this Act) or part of an
establishment;
(B) a designated Federal entity (as defined
under paragraph (2) of this subsection) or part
of a designated Federal entity;
(C) the Executive Office of the President;
(D) the Central Intelligence Agency;
(E) the General Accounting Office; or
(F) any entity in the judicial or legislative
branches of the Government, including the
Administrative Office of the United States
Courts and the Architect of the Capitol and any
activities under the direction of the Architect
of the Capitol;
(2) the term ``designated Federal entity'' means
Amtrak, the Appalachian Regional Commission, the Board
of Governors of the Federal Reserve System [and the
Bureau of Consumer Financial Protection], the Board for
International Broadcasting, the Committee for Purchase
From People Who Are Blind or Severely Disabled, the
Commodity Futures Trading Commission, the Consumer
Product Safety Commission, the Corporation for Public
Broadcasting, the Defense Intelligence Agency, the
Equal Employment Opportunity Commission, the Farm
Credit Administration, the Federal Deposit Insurance
Corporation, the Federal Election Commission, the
Election Assistance Commission, the Federal Housing
Finance Board, the Federal Labor Relations Authority,
the Federal Maritime Commission, the Federal Trade
Commission, the Legal Services Corporation, the
National Archives and Records Administration, the
National Credit Union Administration, the National
Endowment for the Arts, the National Endowment for the
Humanities, the National Geospatial-Intelligence
Agency, the National Labor Relations Board, the
National Science Foundation, the Panama Canal
Commission, the Peace Corps, the Pension Benefit
Guaranty Corporation, the Securities and Exchange
Commission, the Smithsonian Institution, the United
States International Trade Commission, the Postal
Regulatory Commission, and the United States Postal
Service;
(3) the term ``head of the Federal entity'' means any
person or persons designated by statute as the head of
a Federal entity, and if no such designation exists,
the chief policymaking officer or board of a Federal
entity as identified in the list published pursuant to
subsection (h)(1) of this section;
(4) the term ``head of the designated Federal
entity'' means the board or commission of the
designated Federal entity, or in the event the
designated Federal entity does not have a board or
commission, any person or persons designated by statute
as the head of a designated Federal entity and if no
such designation exists, the chief policymaking officer
or board of a designated Federal entity as identified
in the list published pursuant to subsection (h)(1) of
this section, except that--
(A) with respect to the National Science
Foundation, such term means the National
Science Board;
(B) with respect to the United States Postal
Service, such term means the Governors (within
the meaning of section 102(3) of title 39,
United States Code);
(C) with respect to the Federal Labor
Relations Authority, such term means the
members of the Authority (described under
section 7104 of title 5, United States Code);
(D) with respect to the Committee for
Purchase From People Who Are Blind or Severely
Disabled, such term means the Chairman of the
Committee for Purchase From People Who Are
Blind or Severely Disabled;
(E) with respect to the National Archives and
Records Administration, such term means the
Archivist of the United States;
(F) with respect to the National Credit Union
Administration, such term means the National
Credit Union Administration Board (described
under section 102 of the Federal Credit Union
Act (12 U.S.C. 1752a);
(G) with respect to the National Endowment of
the Arts, such term means the National Council
on the Arts;
(H) with respect to the National Endowment
for the Humanities, such term means the
National Council on the Humanities; and
(I) with respect to the Peace Corps, such
term means the Director of the Peace Corps;
(5) the term ``Office of Inspector General'' means an
Office of Inspector General of a designated Federal
entity; and
(6) the term ``Inspector General'' means an Inspector
General of a designated Federal entity.
(b) No later than 180 days after the date of the enactment of
this section, there shall be established and maintained in each
designated Federal entity an Office of Inspector General. The
head of the designated Federal entity shall transfer to such
office the offices, units, or other components, and the
functions, powers, or duties thereof, that such head determines
are properly related to the functions of the Office of
Inspector General and would, if so transferred, further the
purposes of this section. There shall not be transferred to
such office any program operating responsibilities.
(c) Except as provided under subsection (f) of this section,
the Inspector General shall be appointed by the head of the
designated Federal entity in accordance with the applicable
laws and regulations governing appointments within the
designated Federal entity. Each Inspector General shall be
appointed without regard to political affiliation and solely on
the basis of integrity and demonstrated ability in accounting,
auditing, financial analysis, law, management analysis, public
administration, or investigations. [For purposes of
implementing this section, the Chairman of the Board of
Governors of the Federal Reserve System shall appoint the
Inspector General of the Board of Governors of the Federal
Reserve System and the Bureau of Consumer Financial Protection.
The Inspector General of the Board of Governors of the Federal
Reserve System and the Bureau of Consumer Financial Protection
shall have all of the authorities and responsibilities provided
by this Act with respect to the Bureau of Consumer Financial
Protection, as if the Bureau were part of the Board of
Governors of the Federal Reserve System.]
(d)(1) Each Inspector General shall report to and be under
the general supervision of the head of the designated Federal
entity, but shall not report to, or be subject to supervision
by, any other officer or employee of such designated Federal
entity. Except as provided in paragraph (2), the head of the
designated Federal entity shall not prevent or prohibit the
Inspector General from initiating, carrying out, or completing
any audit or investigation, or from issuing any subpoena during
the course of any audit or investigation.
(2)(A) The Secretary of Defense, in consultation with the
Director of National Intelligence, may prohibit the inspector
general of an element of the intelligence community specified
in subparagraph (D) from initiating, carrying out, or
completing any audit or investigation, or from accessing
information available to an element of the intelligence
community specified in subparagraph (D),, or from accessing
information available to an element of the intelligence
community specified in subparagraph (D), if the Secretary
determines that the prohibition is necessary to protect vital
national security interests of the United States.
(B) If the Secretary exercises the authority under
subparagraph (A), the Secretary shall submit to the committees
of Congress specified in subparagraph (E) an appropriately
classified statement of the reasons for the exercise of such
authority not later than 7 days after the exercise of such
authority.
(C) At the same time the Secretary submits under subparagraph
(B) a statement on the exercise of the authority in
subparagraph (A) to the committees of Congress specified in
subparagraph (E), the Secretary shall notify the inspector
general of such element of the submittal of such statement and,
to the extent consistent with the protection of intelligence
sources and methods, provide such inspector general with a copy
of such statement. Such inspector general may submit to such
committees of Congress any comments on a notice or statement
received by the inspector general under this subparagraph that
the inspector general considers appropriate.
(D) The elements of the intelligence community specified in
this subparagraph are as follows:
(i) The Defense Intelligence Agency.
(ii) The National Geospatial-Intelligence Agency.
(iii) The National Reconnaissance Office.
(iv) The National Security Agency.
(E) The committees of Congress specified in this subparagraph
are--
(i) the Committee on Armed Services and the Select
Committee on Intelligence of the Senate; and
(ii) the Committee on Armed Services and the
Permanent Select Committee on Intelligence of the House
of Representatives.
(e)(1) In the case of a designated Federal entity for which a
board, chairman of a committee, or commission is the head of
the designated Federal entity, a removal under this subsection
may only be made upon the written concurrence of a \2/3\
majority of the board, committee, or commission.''.
(2) If an Inspector General is removed from office or is
transferred to another position or location within a designated
Federal entity, the head of the designated Federal entity shall
communicate in writing the reasons for any such removal or
transfer to both Houses of Congress, not later than 30 days
before the removal or transfer. Nothing in this subsection
shall prohibit a personnel action otherwise authorized by law,
other than transfer or removal.
(f)(1) For purposes of carrying out subsection (c) with
respect to the United States Postal Service, the appointment
provisions of section 202(e) of title 39, United States Code,
shall be applied.
(2) In carrying out the duties and responsibilities specified
in this Act, the Inspector General of the United States Postal
Service (hereinafter in this subsection referred to as the
``Inspector General'') shall have oversight responsibility for
all activities of the Postal Inspection Service, including any
internal investigation performed by the Postal Inspection
Service. The Chief Postal Inspector shall promptly report the
significant activities being carried out by the Postal
Inspection Service to such Inspector General.
(3)(A)(i) Notwithstanding subsection (d), the Inspector
General shall be under the authority, direction, and control of
the Governors with respect to audits or investigations, or the
issuance of subpoenas, which require access to sensitive
information concerning--
(I) ongoing civil or criminal investigations or
proceedings;
(II) undercover operations;
(III) the identity of confidential sources, including
protected witnesses;
(IV) intelligence or counterintelligence matters; or
(V) other matters the disclosure of which would
constitute a serious threat to national security.
(ii) With respect to the information described under clause
(i), the Governors may prohibit the Inspector General from
carrying out or completing any audit or investigation, or from
issuing any subpoena, after such Inspector General has decided
to initiate, carry out, or complete such audit or investigation
or to issue such subpoena, if the Governors determine that such
prohibition is necessary to prevent the disclosure of any
information described under clause (i) or to prevent the
significant impairment to the national interests of the United
States.
(iii) If the Governors exercise any power under clause (i) or
(ii), the Governors shall notify the Inspector General in
writing stating the reasons for such exercise. Within 30 days
after receipt of any such notice, the Inspector General shall
transmit a copy of such notice to the Committee on Governmental
Affairs of the Senate and the Committee on Government Reform
and Oversight of the House of Representatives, and to other
appropriate committees or subcommittees of the Congress.
(B) In carrying out the duties and responsibilities specified
in this Act, the Inspector General--
(i) may initiate, conduct and supervise such audits
and investigations in the United States Postal Service
as the Inspector General considers appropriate; and
(ii) shall give particular regard to the activities
of the Postal Inspection Service with a view toward
avoiding duplication and insuring effective
coordination and cooperation.
(C) Any report required to be transmitted by the Governors to
the appropriate committees or subcommittees of the Congress
under section 5(d) shall also be transmitted, within the seven-
day period specified under such section, to the Committee on
Governmental Affairs of the Senate and the Committee on
Government Reform and Oversight of the House of
Representatives.
(4) Nothing in this Act shall restrict, eliminate, or
otherwise adversely affect any of the rights, privileges, or
benefits of either employees of the United States Postal
Service, or labor organizations representing employees of the
United States Postal Service, under chapter 12 of title 39,
United States Code, the National Labor Relations Act, any
handbook or manual affecting employee labor relations with the
United States Postal Service, or any collective bargaining
agreement.
(5) As used in this subsection, the term ``Governors'' has
the meaning given such term by section 102(3) of title 39,
United States Code.
(6) There are authorized to be appropriated, out of
the Postal Service Fund, such sums as may be necessary
for the Office of Inspector General of the United
States Postal Service.
(g)(1) Sections 4, 5, 6 (other than subsections (a)(7) and
(a)(8) thereof), and 7 of this Act shall apply to each
Inspector General and Office of Inspector General of a
designated Federal entity and such sections shall be applied to
each designated Federal entity and head of the designated
Federal entity (as defined under subsection (a)) by
substituting--
(A) ``designated Federal entity'' for
``establishment''; and
(B) ``head of the designated Federal entity'' for
``head of the establishment''.
(2) In addition to the other authorities specified in this
Act, an Inspector General is authorized to select, appoint, and
employ such officers and employees as may be necessary for
carrying out the functions, powers, and duties of the Office of
Inspector General and to obtain the temporary or intermittent
services of experts or consultants or an organization thereof,
subject to the applicable laws and regulations that govern such
selections, appointments, and employment, and the obtaining of
such services, within the designated Federal entity.
(3) Notwithstanding the last sentence of subsection (d) of
this section, the provisions of subsection (a) of section 8D
(other than the provisions of subparagraphs (A), (B), (C), and
(E) of subsection (a)(1)) shall apply to the Inspector General
of the Board of Governors of the Federal Reserve System [and
the Bureau of Consumer Financial Protection] and the Chairman
of the Board of Governors of the Federal Reserve System in the
same manner as such provisions apply to the Inspector General
of the Department of the Treasury and the Secretary of the
Treasury, respectively.
(4) Each Inspector General shall--
(A) in accordance with applicable laws and regulations
governing appointments within the designated Federal entity,
appoint a Counsel to the Inspector General who shall report to
the Inspector General;
(B) obtain the services of a counsel appointed by and
directly reporting to another Inspector General on a
reimbursable basis; or
(C) obtain the services of appropriate staff of the Council
of the Inspectors General on Integrity and Efficiency on a
reimbursable basis.
(h)(1) No later than April 30, 1989, and annually thereafter,
the Director of the Office of Management and Budget, after
consultation with the Comptroller General of the United States,
shall publish in the Federal Register a list of the Federal
entities and designated Federal entities and if the designated
Federal entity is not a board or commission, include the head
of each such entity (as defined under subsection (a) of this
section).
(2) Beginning on October 31, 1989, and on October 31 of each
succeeding calendar year, the head of each Federal entity (as
defined under subsection (a) of this section) shall prepare and
transmit to the Director of the Office of Management and Budget
and to each House of the Congress a report which--
(A) states whether there has been established in the
Federal entity an office that meets the requirements of
this section;
(B) specifies the actions taken by the Federal entity
otherwise to ensure that audits are conducted of its
programs and operations in accordance with the
standards for audit of governmental organizations,
programs, activities, and functions issued by the
Comptroller General of the United States, and includes
a list of each audit report completed by a Federal or
non-Federal auditor during the reporting period and a
summary of any particularly significant findings; and
(C) summarizes any matters relating to the personnel,
programs, and operations of the Federal entity referred
to prosecutive authorities, including a summary
description of any preliminary investigation conducted
by or at the request of the Federal entity concerning
these matters, and the prosecutions and convictions
which have resulted.
* * * * * * *
definitions
Sec. 12. As used in this Act--
(1) the term ``head of the establishment'' means the
Secretary of Agriculture, Commerce, Defense, Education,
Energy, Health and Human Services, Housing and Urban
Development, the Interior, Labor, State,
Transportation, Homeland Security, or the Treasury; the
Attorney General; the Administrator of the Agency for
International Development, Environmental Protection,
General Services, National Aeronautics and Space, or
Small Business, or Veterans' Affairs; the Director of
the Federal Emergency Management Agency, or the Office
of Personnel Management; the Chairman of the Nuclear
Regulatory Commission, the Federal Communications
Commission, or the Railroad Retirement Board; the
Chairperson of the Thrift Depositor Protection
Oversight Board; the Chief Executive Officer of the
Corporation for National and Community Service; the
Administrator of the Community Development Financial
Institutions Fund; the chief executive officer of the
Resolution Trust Corporation; the Chairperson of the
Federal Deposit Insurance Corporation; the Commissioner
of Social Security, Social Security Administration; the
Director of the Federal Housing Finance Agency; the
Board of Directors of the Tennessee Valley Authority;
the President of the Export-Import Bank; the Director
of the Bureau of Consumer Financial Protection; the
Federal Cochairpersons of the Commissions established
under section 15301 of title 40, United States Code;
the Director of the National Security Agency;or the
Director of the National Reconnaissance Office; as the
case may be;
(2) the term ``establishment'' means the Department
of Agriculture, Commerce, Defense, Education, Energy,
Health and Human Services, Housing and Urban
Development, the Interior, Justice, Labor, State,
Transportation, Homeland Security, or the Treasury; the
Agency for International Development, the Community
Development Financial Institutions Fund, the
Environmental Protection Agency, the Federal
Communications Commission, the Federal Emergency
Management Agency, the General Services Administration,
the National Aeronautics and Space Administration, the
Nuclear Regulatory Commission, the Office of Personnel
Management, the Railroad Retirement Board, the
Resolution Trust Corporation, the Federal Deposit
Insurance Corporation, the Small Business
Administration, the Corporation for National and
Community Service, or the Veterans' Administration, the
Social Security Administration, the Federal Housing
Finance Agency, the Tennessee Valley Authority, the
Export-Import Bank, the Bureau of Consumer Financial
Protection, the Commissions established under section
15301 of title 40, United States Code, the National
Security Agency,or the National Reconnaissance Office,
as the case may be;
(3) the term ``Inspector General'' means the
Inspector General of an establishment;
(4) the term ``Office'' means the Office of Inspector
General of an establishment; and
(5) the term ``Federal agency'' means an agency as
defined in section 552(f) of title 5 (including an
establishment as defined in paragraph (2)), United
States Code, but shall not be construed to include the
General Accounting Office.
* * * * * * *
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CONSUMER FINANCIAL PROTECTION ACT OF 2010
* * * * * * *
TITLE X--BUREAU OF CONSUMER FINANCIAL PROTECTION
* * * * * * *
Subtitle A--Bureau of Consumer Financial Protection
SEC. 1011. ESTABLISHMENT OF THE BUREAU OF CONSUMER FINANCIAL
PROTECTION.
(a) Bureau Established.--There is established in the Federal
Reserve System, an independent bureau to be known as the
``Bureau of Consumer Financial Protection'', which shall
regulate the offering and provision of consumer financial
products or services under the Federal consumer financial laws.
The Bureau shall be considered an Executive agency, as defined
in section 105 of title 5, United States Code. Except as
otherwise provided expressly by law, all Federal laws dealing
with public or Federal contracts, property, works, officers,
employees, budgets, or funds, including the provisions of
chapters 5 and 7 of title 5, shall apply to the exercise of the
powers of the Bureau.
(b) Director and Deputy Director.--
(1) In general.--There is established the position of
the Director, who shall serve as the head of the
Bureau.
(2) Appointment.--Subject to paragraph (3), the
Director shall be appointed by the President, by and
with the advice and consent of the Senate.
(3) Qualification.--The President shall nominate the
Director from among individuals who are citizens of the
United States.
(4) Compensation.--The Director shall be compensated
at the rate prescribed for level II of the Executive
Schedule under section 5313 of title 5, United States
Code.
(5) Deputy director.--There is established the
position of Deputy Director, who shall--
(A) be appointed by the Director; and
(B) serve as acting Director in the absence
or unavailability of the Director.
(c) Term.--
(1) In general.--The Director shall serve for a term
of 5 years.
(2) Expiration of term.--An individual may serve as
Director after the expiration of the term for which
appointed, until a successor has been appointed and
qualified.
[(3) Removal for cause.--The President may remove the
Director for inefficiency, neglect of duty, or
malfeasance in office.]
(d) Service Restriction.--No Director or Deputy Director may
hold any office, position, or employment in any Federal reserve
bank, Federal home loan bank, covered person, or service
provider during the period of service of such person as
Director or Deputy Director.
(e) Offices.--The principal office of the Bureau shall be in
the District of Columbia. The Director may establish regional
offices of the Bureau, including in cities in which the Federal
reserve banks, or branches of such banks, are located, in order
to carry out the responsibilities assigned to the Bureau under
the Federal consumer financial laws.
* * * * * * *
SEC. 1017. FUNDING; PENALTIES AND FINES.
(a) [Transfer of Funds From Board Of Governors.--] Budget,
Financial Management, and Audit._
[(1) In general.--Each year (or quarter of such
year), beginning on the designated transfer date, and
each quarter thereafter, the Board of Governors shall
transfer to the Bureau from the combined earnings of
the Federal Reserve System, the amount determined by
the Director to be reasonably necessary to carry out
the authorities of the Bureau under Federal consumer
financial law, taking into account such other sums made
available to the Bureau from the preceding year (or
quarter of such year).
[(2) Funding cap.--
[(A) In general.--Notwithstanding paragraph
(1), and in accordance with this paragraph, the
amount that shall be transferred to the Bureau
in each fiscal year shall not exceed a fixed
percentage of the total operating expenses of
the Federal Reserve System, as reported in the
Annual Report, 2009, of the Board of Governors,
equal to--
[(i) 10 percent of such expenses in
fiscal year 2011;
[(ii) 11 percent of such expenses in
fiscal year 2012; and
[(iii) 12 percent of such expenses in
fiscal year 2013, and in each year
thereafter.
[(B) Adjustment of amount.--The dollar amount
referred to in subparagraph (A)(iii) shall be
adjusted annually, using the percent increase,
if any, in the employment cost index for total
compensation for State and local government
workers published by the Federal Government, or
the successor index thereto, for the 12-month
period ending on September 30 of the year
preceding the transfer.
[(C) Reviewability.--Notwithstanding any
other provision in this title, the funds
derived from the Federal Reserve System
pursuant to this subsection shall not be
subject to review by the Committees on
Appropriations of the House of Representatives
and the Senate.
[(3) Transition period.--Beginning on the date of
enactment of this Act and until the designated transfer
date, the Board of Governors shall transfer to the
Bureau the amount estimated by the Secretary needed to
carry out the authorities granted to the Bureau under
Federal consumer financial law, from the date of
enactment of this Act until the designated transfer
date.
[(4)] (1) Budget and financial management.--
(A) Financial operating plans and
forecasts.--The Director shall provide to the
Director of the Office of Management and Budget
copies of the financial operating plans and
forecasts of the Director, as prepared by the
Director in the ordinary course of the
operations of the Bureau, and copies of the
quarterly reports of the financial condition
and results of operations of the Bureau, as
prepared by the Director in the ordinary course
of the operations of the Bureau.
(B) Financial statements.--The Bureau shall
prepare annually a statement of--
(i) assets and liabilities and
surplus or deficit;
(ii) income and expenses; and
(iii) sources and application of
funds.
(C) Financial management systems.--The Bureau
shall implement and maintain financial
management systems that comply substantially
with Federal financial management systems
requirements and applicable Federal accounting
standards.
(D) Assertion of internal controls.--The
Director shall provide to the Comptroller
General of the United States an assertion as to
the effectiveness of the internal controls that
apply to financial reporting by the Bureau,
using the standards established in section
3512(c) of title 31, United States Code.
[(E) Rule of construction.--This subsection
may not be construed as implying any obligation
on the part of the Director to consult with or
obtain the consent or approval of the Director
of the Office of Management and Budget with
respect to any report, plan, forecast, or other
information referred to in subparagraph (A) or
any jurisdiction or oversight over the affairs
or operations of the Bureau.
[(F) Financial statements.--The financial
statements of the Bureau shall not be
consolidated with the financial statements of
either the Board of Governors or the Federal
Reserve System.]
[(5)] (2) Audit of the bureau.--
(A) In general.--The Comptroller General
shall annually audit the financial transactions
of the Bureau in accordance with the United
States generally accepted government auditing
standards, as may be prescribed by the
Comptroller General of the United States. The
audit shall be conducted at the place or places
where accounts of the Bureau are normally kept.
The representatives of the Government
Accountability Office shall have access to the
personnel and to all books, accounts,
documents, papers, records (including
electronic records), reports, files, and all
other papers, automated data, things, or
property belonging to or under the control of
or used or employed by the Bureau pertaining to
its financial transactions and necessary to
facilitate the audit, and such representatives
shall be afforded full facilities for verifying
transactions with the balances or securities
held by depositories, fiscal agents, and
custodians. All such books, accounts,
documents, records, reports, files, papers, and
property of the Bureau shall remain in
possession and custody of the Bureau. The
Comptroller General may obtain and duplicate
any such books, accounts, documents, records,
working papers, automated data and files, or
other information relevant to such audit
without cost to the Comptroller General, and
the right of access of the Comptroller General
to such information shall be enforceable
pursuant to section 716(c) of title 31, United
States Code.
(B) Report.--The Comptroller General shall
submit to the Congress a report of each annual
audit conducted under this subsection. The
report to the Congress shall set forth the
scope of the audit and shall include the
statement of assets and liabilities and surplus
or deficit, the statement of income and
expenses, the statement of sources and
application of funds, and such comments and
information as may be deemed necessary to
inform Congress of the financial operations and
condition of the Bureau, together with such
recommendations with respect thereto as the
Comptroller General may deem advisable. A copy
of each report shall be furnished to the
President and to the Bureau at the time
submitted to the Congress.
(C) Assistance and costs.--For the purpose of
conducting an audit under this subsection, the
Comptroller General may, in the discretion of
the Comptroller General, employ by contract,
without regard to section 3709 of the Revised
Statutes of the United States (41 U.S.C. 5),
professional services of firms and
organizations of certified public accountants
for temporary periods or for special purposes.
Upon the request of the Comptroller General,
the Director of the Bureau shall transfer to
the Government Accountability Office from funds
available, the amount requested by the
Comptroller General to cover the full costs of
any audit and report conducted by the
Comptroller General. The Comptroller General
shall credit funds transferred to the account
established for salaries and expenses of the
Government Accountability Office, and such
amount shall be available upon receipt and
without fiscal year limitation to cover the
full costs of the audit and report.
[(b) Consumer Financial Protection Fund.--
[(1) Separate fund in federal reserve established.--
There is established in the Federal Reserve a separate
fund, to be known as the ``Bureau of Consumer Financial
Protection Fund'' (referred to in this section as the
``Bureau Fund''). The Bureau Fund shall be maintained
and established at a Federal reserve bank, in
accordance with such requirements as the Board of
Governors may impose.
[(2) Fund receipts.--All amounts transferred to the
Bureau under subsection (a) shall be deposited into the
Bureau Fund.
[(3) Investment authority.--
[(A) Amounts in bureau fund may be
invested.--The Bureau may request the Board of
Governors to direct the investment of the
portion of the Bureau Fund that is not, in the
judgment of the Bureau, required to meet the
current needs of the Bureau.
[(B) Eligible investments.--Investments
authorized by this paragraph shall be made in
obligations of the United States or obligations
that are guaranteed as to principal and
interest by the United States, with maturities
suitable to the needs of the Bureau Fund, as
determined by the Bureau.
[(C) Interest and proceeds credited.--The
interest on, and the proceeds from the sale or
redemption of, any obligations held in the
Bureau Fund shall be credited to the Bureau
Fund.
[(c) Use of Funds.--
[(1) In general.--Funds obtained by, transferred to,
or credited to the Bureau Fund shall be immediately
available to the Bureau and under the control of the
Director, and shall remain available until expended, to
pay the expenses of the Bureau in carrying out its
duties and responsibilities. The compensation of the
Director and other employees of the Bureau and all
other expenses thereof may be paid from, obtained by,
transferred to, or credited to the Bureau Fund under
this section.
[(2) Funds that are not government funds.--Funds
obtained by or transferred to the Bureau Fund shall not
be construed to be Government funds or appropriated
monies.
[(3) Amounts not subject to apportionment.--
Notwithstanding any other provision of law, amounts in
the Bureau Fund and in the Civil Penalty Fund
established under subsection (d) shall not be subject
to apportionment for purposes of chapter 15 of title
31, United States Code, or under any other authority.
[(d)] (b) Penalties and Fines.--
(1) Establishment of victims relief fund.--There is
established in the Federal Reserve a separate fund, to
be known as the ``Consumer Financial Civil Penalty
Fund'' (referred to in this section as the ``Civil
Penalty Fund''). The Civil Penalty Fund shall be
maintained and established at a Federal reserve bank,
in accordance with such requirements as the Board of
Governors may impose. If the Bureau obtains a civil
penalty against any person in any judicial or
administrative action under Federal consumer financial
laws, the Bureau shall deposit into the Civil Penalty
Fund, the amount of the penalty collected.
(2) Payment to victims.--Amounts in the Civil Penalty
Fund shall be available to the Bureau, without fiscal
year limitation, for payments to the victims of
activities for which civil penalties have been imposed
under the Federal consumer financial laws. To the
extent that such victims cannot be located or such
payments are otherwise not practicable, the Bureau may
use such funds for the purpose of consumer education
and financial literacy programs.
[(e)] (c) Authorization of Appropriations; Annual Report.--
[(1) Determination regarding need for appropriated
funds.--
[(A) In general.--The Director is authorized
to determine that sums available to the Bureau
under this section will not be sufficient to
carry out the authorities of the Bureau under
Federal consumer financial law for the upcoming
year.
[(B) Report required.--When making a
determination under subparagraph (A), the
Director shall prepare a report regarding the
funding of the Bureau, including the assets and
liabilities of the Bureau, and the extent to
which the funding needs of the Bureau are
anticipated to exceed the level of the amount
set forth in subsection (a)(2). The Director
shall submit the report to the President and to
the Committee on Appropriations of the Senate
and the Committee on Appropriations of the
House of Representatives.
[(2) Authorization of appropriations.--If the
Director makes the determination and submits the report
pursuant to paragraph (1), there are hereby authorized
to be appropriated to the Bureau, for the purposes of
carrying out the authorities granted in Federal
consumer financial law, $200,000,000 for each of fiscal
years 2010, 2011, 2012, 2013, and 2014.
[(3) Apportionment.--Notwithstanding any other
provision of law, the amounts in paragraph (2) shall be
subject to apportionment under section 1517 of title
31, United States Code, and restrictions that generally
apply to the use of appropriated funds in title 31,
United States Code, and other laws.]
(1) Authorization of appropriation.--There authorized
to be appropriated for fiscal year 2020 to the Bureau
from the combined earnings of the Federal Reserve
System $485,000,000.
[(4)] (2) Annual report.--The Director shall prepare
and submit a report, on an annual basis, to the
Committee on Appropriations of the Senate and the
Committee on Appropriations of the House of
Representatives regarding the financial operating plans
and forecasts of the Director, the financial condition
and results of operations of the Bureau, and the
sources and application of funds of the Bureau,
including any funds appropriated in accordance with
this subsection.
* * * * * * *
----------
TITLE 5, UNITED STATES CODE
PART I--THE AGENCIES GENERALLY
* * * * * * *
[CHAPTER 8--CONGRESSIONAL REVIEW OF AGENCY RULEMAKING
[Sec. 801. Congressional review
[(a)(1)(A) Before a rule can take effect, the Federal agency
promulgating such rule shall submit to each House of the
Congress and to the Comptroller General a report containing--
[(i) a copy of the rule;
[(ii) a concise general statement relating to the
rule, including whether it is a major rule; and
[(iii) the proposed effective date of the rule.
[(B) On the date of the submission of the report under
subparagraph (A), the Federal agency promulgating the rule
shall submit to the Comptroller General and make available to
each House of Congress--
[(i) a complete copy of the cost-benefit analysis of
the rule, if any;
[(ii) the agency's actions relevant to sections 603,
604, 605, 607, and 609;
[(iii) the agency's actions relevant to sections 202,
203, 204, and 205 of the Unfunded Mandates Reform Act
of 1995; and
[(iv) any other relevant information or requirements
under any other Act and any relevant Executive orders.
[(C) Upon receipt of a report submitted under subparagraph
(A), each House shall provide copies of the report to the
chairman and ranking member of each standing committee with
jurisdiction under the rules of the House of Representatives or
the Senate to report a bill to amend the provision of law under
which the rule is issued.
[(2)(A) The Comptroller General shall provide a report on
each major rule to the committees of jurisdiction in each House
of the Congress by the end of 15 calendar days after the
submission or publication date as provided in section
802(b)(2). The report of the Comptroller General shall include
an assessment of the agency's compliance with procedural steps
required by paragraph (1)(B).
[(B) Federal agencies shall cooperate with the Comptroller
General by providing information relevant to the Comptroller
General's report under subparagraph (A).
[(3) A major rule relating to a report submitted under
paragraph (1) shall take effect on the latest of--
[(A) the later of the date occurring 60 days after
the date on which--
[(i) the Congress receives the report
submitted under paragraph (1); or
[(ii) the rule is published in the Federal
Register, if so published;
[(B) if the Congress passes a joint resolution of
disapproval described in section 802 relating to the
rule, and the President signs a veto of such
resolution, the earlier date--
[(i) on which either House of Congress votes
and fails to override the veto of the
President; or
[(ii) occurring 30 session days after the
date on which the Congress received the veto
and objections of the President; or
[(C) the date the rule would have otherwise taken
effect, if not for this section (unless a joint
resolution of disapproval under section 802 is
enacted).
[(4) Except for a major rule, a rule shall take effect as
otherwise provided by law after submission to Congress under
paragraph (1).
[(5) Notwithstanding paragraph (3), the effective date of a
rule shall not be delayed by operation of this chapter beyond
the date on which either House of Congress votes to reject a
joint resolution of disapproval under section 802.
[(b)(1) A rule shall not take effect (or continue), if the
Congress enacts a joint resolution of disapproval, described
under section 802, of the rule.
[(2) A rule that does not take effect (or does not continue)
under paragraph (1) may not be reissued in substantially the
same form, and a new rule that is substantially the same as
such a rule may not be issued, unless the reissued or new rule
is specifically authorized by a law enacted after the date of
the joint resolution disapproving the original rule.
[(c)(1) Notwithstanding any other provision of this section
(except subject to paragraph (3)), a rule that would not take
effect by reason of subsection (a)(3) may take effect, if the
President makes a determination under paragraph (2) and submits
written notice of such determination to the Congress.
[(2) Paragraph (1) applies to a determination made by the
President by Executive order that the rule should take effect
because such rule is--
[(A) necessary because of an imminent threat to
health or safety or other emergency;
[(B) necessary for the enforcement of criminal laws;
[(C) necessary for national security; or
[(D) issued pursuant to any statute implementing an
international trade agreement.
[(3) An exercise by the President of the authority under this
subsection shall have no effect on the procedures under section
802 or the effect of a joint resolution of disapproval under
this section.
[(d)(1) In addition to the opportunity for review otherwise
provided under this chapter, in the case of any rule for which
a report was submitted in accordance with subsection (a)(1)(A)
during the period beginning on the date occurring--
[(A) in the case of the Senate, 60 session days, or
[(B) in the case of the House of Representatives, 60
legislative days,
before the date the Congress adjourns a session of Congress
through the date on which the same or succeeding Congress first
convenes its next session, section 802 shall apply to such rule
in the succeeding session of Congress.
[(2)(A) In applying section 802 for purposes of such
additional review, a rule described under paragraph (1) shall
be treated as though--
[(i) such rule were published in the Federal Register
(as a rule that shall take effect) on--
[(I) in the case of the Senate, the 15th
session day, or
[(II) in the case of the House of
Representatives, the 15th legislative day,
after the succeeding session of Congress first
convenes; and
[(ii) a report on such rule were submitted to
Congress under subsection (a)(1) on such date.
[(B) Nothing in this paragraph shall be construed to affect
the requirement under subsection (a)(1) that a report shall be
submitted to Congress before a rule can take effect.
[(3) A rule described under paragraph (1) shall take effect
as otherwise provided by law (including other subsections of
this section).
[(e)(1) For purposes of this subsection, section 802 shall
also apply to any major rule promulgated between March 1, 1996,
and the date of the enactment of this chapter.
[(2) In applying section 802 for purposes of Congressional
review, a rule described under paragraph (1) shall be treated
as though--
[(A) such rule were published in the Federal Register
on the date of enactment of this chapter; and
[(B) a report on such rule were submitted to Congress
under subsection (a)(1) on such date.
[(3) The effectiveness of a rule described under paragraph
(1) shall be as otherwise provided by law, unless the rule is
made of no force or effect under section 802.
[(f) Any rule that takes effect and later is made of no force
or effect by enactment of a joint resolution under section 802
shall be treated as though such rule had never taken effect.
[(g) If the Congress does not enact a joint resolution of
disapproval under section 802 respecting a rule, no court or
agency may infer any intent of the Congress from any action or
inaction of the Congress with regard to such rule, related
statute, or joint resolution of disapproval.
[Sec. 802. Congressional disapproval procedure
[(a) For purposes of this section, the term ``joint
resolution'' means only a joint resolution introduced in the
period beginning on the date on which the report referred to in
section 801(a)(1)(A) is received by Congress and ending 60 days
thereafter (excluding days either House of Congress is
adjourned for more than 3 days during a session of Congress),
the matter after the resolving clause of which is as follows:
``That Congress disapproves the rule submitted by the -- --
relating to -- --, and such rule shall have no force or
effect.'' (The blank spaces being appropriately filled in).
[(b)(1) A joint resolution described in subsection (a) shall
be referred to the committees in each House of Congress with
jurisdiction.
[(2) For purposes of this section, the term ``submission or
publication date'' means the later of the date on which--
[(A) the Congress receives the report submitted under
section 801(a)(1); or
[(B) the rule is published in the Federal Register,
if so published.
[(c) In the Senate, if the committee to which is referred a
joint resolution described in subsection (a) has not reported
such joint resolution (or an identical joint resolution) at the
end of 20 calendar days after the submission or publication
date defined under subsection (b)(2), such committee may be
discharged from further consideration of such joint resolution
upon a petition supported in writing by 30 Members of the
Senate, and such joint resolution shall be placed on the
calendar.
[(d)(1) In the Senate, when the committee to which a joint
resolution is referred has reported, or when a committee is
discharged (under subsection (c)) from further consideration of
a joint resolution described in subsection (a), it is at any
time thereafter in order (even though a previous motion to the
same effect has been disagreed to) for a motion to proceed to
the consideration of the joint resolution, and all points of
order against the joint resolution (and against consideration
of the joint resolution) are waived. The motion is not subject
to amendment, or to a motion to postpone, or to a motion to
proceed to the consideration of other business. A motion to
reconsider the vote by which the motion is agreed to or
disagreed to shall not be in order. If a motion to proceed to
the consideration of the joint resolution is agreed to, the
joint resolution shall remain the unfinished business of the
Senate until disposed of.
[(2) In the Senate, debate on the joint resolution, and on
all debatable motions and appeals in connection therewith,
shall be limited to not more than 10 hours, which shall be
divided equally between those favoring and those opposing the
joint resolution. A motion further to limit debate is in order
and not debatable. An amendment to, or a motion to postpone, or
a motion to proceed to the consideration of other business, or
a motion to recommit the joint resolution is not in order.
[(3) In the Senate, immediately following the conclusion of
the debate on a joint resolution described in subsection (a),
and a single quorum call at the conclusion of the debate if
requested in accordance with the rules of the Senate, the vote
on final passage of the joint resolution shall occur.
[(4) Appeals from the decisions of the Chair relating to the
application of the rules of the Senate to the procedure
relating to a joint resolution described in subsection (a)
shall be decided without debate.
[(e) In the Senate the procedure specified in subsection (c)
or (d) shall not apply to the consideration of a joint
resolution respecting a rule--
[(1) after the expiration of the 60 session days
beginning with the applicable submission or publication
date, or
[(2) if the report under section 801(a)(1)(A) was
submitted during the period referred to in section
801(d)(1), after the expiration of the 60 session days
beginning on the 15th session day after the succeeding
session of Congress first convenes.
[(f) If, before the passage by one House of a joint
resolution of that House described in subsection (a), that
House receives from the other House a joint resolution
described in subsection (a), then the following procedures
shall apply:
[(1) The joint resolution of the other House shall
not be referred to a committee.
[(2) With respect to a joint resolution described in
subsection (a) of the House receiving the joint
resolution--
[(A) the procedure in that House shall be the
same as if no joint resolution had been
received from the other House; but
[(B) the vote on final passage shall be on
the joint resolution of the other House.
[(g) This section is enacted by Congress--
[(1) as an exercise of the rulemaking power of the
Senate and House of Representatives, respectively, and
as such it is deemed a part of the rules of each House,
respectively, but applicable only with respect to the
procedure to be followed in that House in the case of a
joint resolution described in subsection (a), and it
supersedes other rules only to the extent that it is
inconsistent with such rules; and
[(2) with full recognition of the constitutional
right of either House to change the rules (so far as
relating to the procedure of that House) at any time,
in the same manner, and to the same extent as in the
case of any other rule of that House.
[Sec. 803. Special rule on statutory, regulatory, and judicial
deadlines
[(a) In the case of any deadline for, relating to, or
involving any rule which does not take effect (or the
effectiveness of which is terminated) because of enactment of a
joint resolution under section 802, that deadline is extended
until the date 1 year after the date of enactment of the joint
resolution. Nothing in this subsection shall be construed to
affect a deadline merely by reason of the postponement of a
rule's effective date under section 801(a).
[(b) The term ``deadline'' means any date certain for
fulfilling any obligation or exercising any authority
established by or under any Federal statute or regulation, or
by or under any court order implementing any Federal statute or
regulation.
[Sec. 804. Definitions
[For purposes of this chapter--
[(1) The term ``Federal agency'' means any agency as
that term is defined in section 551(1).
[(2) The term ``major rule'' means any rule that the
Administrator of the Office of Information and
Regulatory Affairs of the Office of Management and
Budget finds has resulted in or is likely to result
in--
[(A) an annual effect on the economy of
$100,000,000 or more;
[(B) a major increase in costs or prices for
consumers, individual industries, Federal,
State, or local government agencies, or
geographic regions; or
[(C) significant adverse effects on
competition, employment, investment,
productivity, innovation, or on the ability of
United States-based enterprises to compete with
foreign-based enterprises in domestic and
export markets.
The term does not include any rule promulgated under
the Telecommunications Act of 1996 and the amendments
made by that Act.
[(3) The term ``rule'' has the meaning given such
term in section 551, except that such term does not
include--
[(A) any rule of particular applicability,
including a rule that approves or prescribes
for the future rates, wages, prices, services,
or allowances therefor, corporate or financial
structures, reorganizations, mergers, or
acquisitions thereof, or accounting practices
or disclosures bearing on any of the foregoing;
[(B) any rule relating to agency management
or personnel; or
[(C) any rule of agency organization,
procedure, or practice that does not
substantially affect the rights or obligations
of non-agency parties.
[Sec. 805. Judicial review
[No determination, finding, action, or omission under this
chapter shall be subject to judicial review.
[Sec. 806. Applicability; severability
[(a) This chapter shall apply notwithstanding any other
provision of law.
[(b) If any provision of this chapter or the application of
any provision of this chapter to any person or circumstance, is
held invalid, the application of such provision to other
persons or circumstances, and the remainder of this chapter,
shall not be affected thereby.
[Sec. 807. Exemption for monetary policy
[Nothing in this chapter shall apply to rules that concern
monetary policy proposed or implemented by the Board of
Governors of the Federal Reserve System or the Federal Open
Market Committee.
[Sec. 808. Effective date of certain rules
[Notwithstanding section 801--
[(1) any rule that establishes, modifies, opens,
closes, or conducts a regulatory program for a
commercial, recreational, or subsistence activity
related to hunting, fishing, or camping, or
[(2) any rule which an agency for good cause finds
(and incorporates the finding and a brief statement of
reasons therefor in the rule issued) that notice and
public procedure thereon are impracticable,
unnecessary, or contrary to the public interest,
shall take effect at such time as the Federal agency
promulgating the rule determines.]
CHAPTER 8--CONGRESSIONAL REVIEW OF BUREAU RULEMAKING
Sec.
801. Congressional review.
802. Congressional approval procedure for major rules.
803. Congressional disapproval procedure for nonmajor rules.
804. Definitions.
805. Judicial review.
806. Exemption for monetary policy.
807. Effective date of certain rules.
808. Regulatory cut-go requirement.
809. Review of rules currently in effect.
Sec. 801. Congressional review
(a)(1)(A) Before a rule may take effect, the Bureau shall
satisfy the requirements of section 808 and shall publish in
the Federal Register a list of information on which the rule is
based, including data, scientific and economic studies, and
cost-benefit analyses, and identify how the public can access
such information online, and shall submit to each House of the
Congress and to the Comptroller General a report containing--
(i) a copy of the rule;
(ii) a concise general statement relating to the
rule;
(iii) a classification of the rule as a major or
nonmajor rule, including an explanation of the
classification specifically addressing each criteria
for a major rule contained within sections 804(2)(A),
804(2)(B), and 804(2)(C);
(iv) a list of any other related regulatory actions
intended to implement the same statutory provision or
regulatory objective as well as the individual and
aggregate economic effects of those actions; and
(v) the proposed effective date of the rule.
(B) On the date of the submission of the report under
subparagraph (A), the Bureau shall submit to the Comptroller
General and make available to each House of Congress--
(i) a complete copy of the cost-benefit analysis of
the rule, if any, including an analysis of any jobs
added or lost, differentiating between public and
private sector jobs;
(ii) the Bureau's actions pursuant to sections 603,
604, 605, 607, and 609 of this title;
(iii) the Bureau's actions pursuant to sections 202,
203, 204, and 205 of the Unfunded Mandates Reform Act
of 1995; and
(iv) any other relevant information or requirements
under any other Act and any relevant Executive orders.
(C) Upon receipt of a report submitted under subparagraph
(A), each House shall provide copies of the report to the
chairman and ranking member of each standing committee with
jurisdiction under the rules of the House of Representatives or
the Senate to report a bill to amend the provision of law under
which the rule is issued.
(2)(A) The Comptroller General shall provide a report on each
major rule to the committees of jurisdiction by the end of 15
calendar days after the submission or publication date. The
report of the Comptroller General shall include an assessment
of the Bureau's compliance with procedural steps required by
paragraph (1)(B) and an assessment of whether the major rule
imposes any new limits or mandates on private-sector activity.
(B) Federal agencies shall cooperate with the Comptroller
General by providing information relevant to the Comptroller
General's report under subparagraph (A).
(3) A major rule relating to a report submitted under
paragraph (1) shall take effect upon enactment of a joint
resolution of approval described in section 802 or as provided
for in the rule following enactment of a joint resolution of
approval described in section 802, whichever is later.
(4) A nonmajor rule shall take effect as provided by section
803 after submission to Congress under paragraph (1).
(5) If a joint resolution of approval relating to a major
rule is not enacted within the period provided in subsection
(b)(2), then a joint resolution of approval relating to the
same rule may not be considered under this chapter in the same
Congress by either the House of Representatives or the Senate.
(b)(1) A major rule shall not take effect unless the Congress
enacts a joint resolution of approval described under section
802.
(2) If a joint resolution described in subsection (a) is not
enacted into law by the end of 70 session days or legislative
days, as applicable, beginning on the date on which the report
referred to in section 801(a)(1)(A) is received by Congress
(excluding days either House of Congress is adjourned for more
than 3 days during a session of Congress), then the rule
described in that resolution shall be deemed not to be approved
and such rule shall not take effect.
(c)(1) Notwithstanding any other provision of this section
(except subject to paragraph (3)), a major rule may take effect
for one 90-calendar-day period if the President makes a
determination under paragraph (2) and submits written notice of
such determination to the Congress.
(2) Paragraph (1) applies to a determination made by the
President by Executive order that the major rule should take
effect because such rule is--
(A) necessary because of an imminent threat to health
or safety or other emergency;
(B) necessary for the enforcement of criminal laws;
(C) necessary for national security; or
(D) issued pursuant to any statute implementing an
international trade agreement.
(3) An exercise by the President of the authority under this
subsection shall have no effect on the procedures under section
802.
(d)(1) In addition to the opportunity for review otherwise
provided under this chapter, in the case of any rule for which
a report was submitted in accordance with subsection (a)(1)(A)
during the period beginning on the date occurring--
(A) in the case of the Senate, 60 session days; or
(B) in the case of the House of Representatives, 60
legislative days,
before the date the Congress is scheduled to adjourn a session
of Congress through the date on which the same or succeeding
Congress first convenes its next session, sections 802 and 803
shall apply to such rule in the succeeding session of Congress.
(2)(A) In applying sections 802 and 803 for purposes of such
additional review, a rule described under paragraph (1) shall
be treated as though--
(i) such rule were published in the Federal Register
on--
(I) in the case of the Senate, the 15th
session day; or
(II) in the case of the House of
Representatives, the 15th legislative day,
after the succeeding session of Congress first
convenes; and
(ii) a report on such rule were submitted to Congress
under subsection (a)(1) on such date.
(B) Nothing in this paragraph shall be construed to affect
the requirement under subsection (a)(1) that a report shall be
submitted to Congress before a rule can take effect.
(3) A rule described under paragraph (1) shall take effect as
otherwise provided by law (including other subsections of this
section).
Sec. 802. Congressional approval procedure for major rules
(a)(1) For purposes of this section, the term ``joint
resolution'' means only a joint resolution addressing a report
classifying a rule as major pursuant to section
801(a)(1)(A)(iii) that--
(A) bears no preamble;
(B) bears the following title (with blanks filled as
appropriate): ``Approving the rule submitted by ___
relating to ___.'';
(C) includes after its resolving clause only the
following (with blanks filled as appropriate): ``That
Congress approves the rule submitted by ___ relating to
___.''; and
(D) is introduced pursuant to paragraph (2).
(2) After a House of Congress receives a report classifying a
rule as major pursuant to section 801(a)(1)(A)(iii), the
majority leader of that House (or his or her respective
designee) shall introduce (by request, if appropriate) a joint
resolution described in paragraph (1)--
(A) in the case of the House of Representatives,
within 3 legislative days; and
(B) in the case of the Senate, within 3 session days.
(3) A joint resolution described in paragraph (1) shall not
be subject to amendment at any stage of proceeding.
(b) A joint resolution described in subsection (a) shall be
referred in each House of Congress to the committees having
jurisdiction over the provision of law under which the rule is
issued.
(c) In the Senate, if the committee or committees to which a
joint resolution described in subsection (a) has been referred
have not reported it at the end of 15 session days after its
introduction, such committee or committees shall be
automatically discharged from further consideration of the
resolution and it shall be placed on the calendar. A vote on
final passage of the resolution shall be taken on or before the
close of the 15th session day after the resolution is reported
by the committee or committees to which it was referred, or
after such committee or committees have been discharged from
further consideration of the resolution.
(d)(1) In the Senate, when the committee or committees to
which a joint resolution is referred have reported, or when a
committee or committees are discharged (under subsection (c))
from further consideration of a joint resolution described in
subsection (a), it is at any time thereafter in order (even
though a previous motion to the same effect has been disagreed
to) for a motion to proceed to the consideration of the joint
resolution, and all points of order against the joint
resolution (and against consideration of the joint resolution)
are waived. The motion is not subject to amendment, or to a
motion to postpone, or to a motion to proceed to the
consideration of other business. A motion to reconsider the
vote by which the motion is agreed to or disagreed to shall not
be in order. If a motion to proceed to the consideration of the
joint resolution is agreed to, the joint resolution shall
remain the unfinished business of the Senate until disposed of.
(2) In the Senate, debate on the joint resolution, and on all
debatable motions and appeals in connection therewith, shall be
limited to not more than 2 hours, which shall be divided
equally between those favoring and those opposing the joint
resolution. A motion to further limit debate is in order and
not debatable. An amendment to, or a motion to postpone, or a
motion to proceed to the consideration of other business, or a
motion to recommit the joint resolution is not in order.
(3) In the Senate, immediately following the conclusion of
the debate on a joint resolution described in subsection (a),
and a single quorum call at the conclusion of the debate if
requested in accordance with the rules of the Senate, the vote
on final passage of the joint resolution shall occur.
(4) Appeals from the decisions of the Chair relating to the
application of the rules of the Senate to the procedure
relating to a joint resolution described in subsection (a)
shall be decided without debate.
(e) In the House of Representatives, if any committee to
which a joint resolution described in subsection (a) has been
referred has not reported it to the House at the end of 15
legislative days after its introduction, such committee shall
be discharged from further consideration of the joint
resolution, and it shall be placed on the appropriate calendar.
On the second and fourth Thursdays of each month it shall be in
order at any time for the Speaker to recognize a Member who
favors passage of a joint resolution that has appeared on the
calendar for at least 5 legislative days to call up that joint
resolution for immediate consideration in the House without
intervention of any point of order. When so called up a joint
resolution shall be considered as read and shall be debatable
for 1 hour equally divided and controlled by the proponent and
an opponent, and the previous question shall be considered as
ordered to its passage without intervening motion. It shall not
be in order to reconsider the vote on passage. If a vote on
final passage of the joint resolution has not been taken by the
third Thursday on which the Speaker may recognize a Member
under this subsection, such vote shall be taken on that day.
(f)(1) If, before passing a joint resolution described in
subsection (a), one House receives from the other a joint
resolution having the same text, then--
(A) the joint resolution of the other House shall not
be referred to a committee; and
(B) the procedure in the receiving House shall be the
same as if no joint resolution had been received from
the other House until the vote on passage, when the
joint resolution received from the other House shall
supplant the joint resolution of the receiving House.
(2) This subsection shall not apply to the House of
Representatives if the joint resolution received from the
Senate is a revenue measure.
(g) If either House has not taken a vote on final passage of
the joint resolution by the last day of the period described in
section 801(b)(2), then such vote shall be taken on that day.
(h) This section and section 803 are enacted by Congress--
(1) as an exercise of the rulemaking power of the
Senate and House of Representatives, respectively, and
as such is deemed to be part of the rules of each
House, respectively, but applicable only with respect
to the procedure to be followed in that House in the
case of a joint resolution described in subsection (a)
and superseding other rules only where explicitly so;
and
(2) with full recognition of the Constitutional right
of either House to change the rules (so far as they
relate to the procedure of that House) at any time, in
the same manner and to the same extent as in the case
of any other rule of that House.
Sec. 803. Congressional disapproval procedure for nonmajor rules
(a) For purposes of this section, the term ``joint
resolution'' means only a joint resolution introduced in the
period beginning on the date on which the report referred to in
section 801(a)(1)(A) is received by Congress and ending 60 days
thereafter (excluding days either House of Congress is
adjourned for more than 3 days during a session of Congress),
the matter after the resolving clause of which is as follows:
``That Congress disapproves the nonmajor rule submitted by the
___ relating to ___, and such rule shall have no force or
effect.'' (The blank spaces being appropriately filled in).
(b) A joint resolution described in subsection (a) shall be
referred to the committees in each House of Congress with
jurisdiction.
(c) In the Senate, if the committee to which is referred a
joint resolution described in subsection (a) has not reported
such joint resolution (or an identical joint resolution) at the
end of 15 session days after the date of introduction of the
joint resolution, such committee may be discharged from further
consideration of such joint resolution upon a petition
supported in writing by 30 Members of the Senate, and such
joint resolution shall be placed on the calendar.
(d)(1) In the Senate, when the committee to which a joint
resolution is referred has reported, or when a committee is
discharged (under subsection (c)) from further consideration of
a joint resolution described in subsection (a), it is at any
time thereafter in order (even though a previous motion to the
same effect has been disagreed to) for a motion to proceed to
the consideration of the joint resolution, and all points of
order against the joint resolution (and against consideration
of the joint resolution) are waived. The motion is not subject
to amendment, or to a motion to postpone, or to a motion to
proceed to the consideration of other business. A motion to
reconsider the vote by which the motion is agreed to or
disagreed to shall not be in order. If a motion to proceed to
the consideration of the joint resolution is agreed to, the
joint resolution shall remain the unfinished business of the
Senate until disposed of.
(2) In the Senate, debate on the joint resolution, and on all
debatable motions and appeals in connection therewith, shall be
limited to not more than 10 hours, which shall be divided
equally between those favoring and those opposing the joint
resolution. A motion to further limit debate is in order and
not debatable. An amendment to, or a motion to postpone, or a
motion to proceed to the consideration of other business, or a
motion to recommit the joint resolution is not in order.
(3) In the Senate, immediately following the conclusion of
the debate on a joint resolution described in subsection (a),
and a single quorum call at the conclusion of the debate if
requested in accordance with the rules of the Senate, the vote
on final passage of the joint resolution shall occur.
(4) Appeals from the decisions of the Chair relating to the
application of the rules of the Senate to the procedure
relating to a joint resolution described in subsection (a)
shall be decided without debate.
(e) In the Senate, the procedure specified in subsection (c)
or (d) shall not apply to the consideration of a joint
resolution respecting a nonmajor rule--
(1) after the expiration of the 60 session days
beginning with the applicable submission or publication
date; or
(2) if the report under section 801(a)(1)(A) was
submitted during the period referred to in section
801(d)(1), after the expiration of the 60 session days
beginning on the 15th session day after the succeeding
session of Congress first convenes.
(f) If, before the passage by one House of a joint resolution
of that House described in subsection (a), that House receives
from the other House a joint resolution described in subsection
(a), then the following procedures shall apply:
(1) The joint resolution of the other House shall not
be referred to a committee.
(2) With respect to a joint resolution described in
subsection (a) of the House receiving the joint
resolution--
(A) the procedure in that House shall be the
same as if no joint resolution had been
received from the other House; but
(B) the vote on final passage shall be on the
joint resolution of the other House.
Sec. 804. Definitions
For purposes of this chapter:
(1) The term ``Bureau'' means the Bureau of Consumer
Financial Protection.
(2) The term ``major rule'' means any rule, including
an interim final rule, that the Administrator of the
Office of Information and Regulatory Affairs of the
Office of Management and Budget finds has resulted in
or is likely to result in--
(A) an annual cost on the economy of
$100,000,000 or more, adjusted annually for
inflation;
(B) a major increase in costs or prices for
consumers, individual industries, Federal,
State, or local government agencies, or
geographic regions; or
(C) significant adverse effects on
competition, employment, investment,
productivity, innovation, or on the ability of
United States-based enterprises to compete with
foreign-based enterprises in domestic and
export markets.
(3) The term ``nonmajor rule'' means any rule that is
not a major rule.
(4) The term ``rule'' has the meaning given such term
in section 551, except that such term does not
include--
(A) any rule of particular applicability,
including a rule that approves or prescribes
for the future rates, wages, prices, services,
or allowances therefore, corporate or financial
structures, reorganizations, mergers, or
acquisitions thereof, or accounting practices
or disclosures bearing on any of the foregoing;
(B) any rule relating to Bureau management or
personnel; or
(C) any rule of Bureau organization,
procedure, or practice that does not
substantially affect the rights or obligations
of non-Bureau parties.
(5) The term ``submission date or publication date'',
except as otherwise provided in this chapter, means--
(A) in the case of a major rule, the date on
which the Congress receives the report
submitted under section 801(a)(1); and
(B) in the case of a nonmajor rule, the later
of--
(i) the date on which the Congress
receives the report submitted under
section 801(a)(1); and
(ii) the date on which the nonmajor
rule is published in the Federal
Register, if so published.
Sec. 805. Judicial review
(a) No determination, finding, action, or omission under this
chapter shall be subject to judicial review.
(b) Notwithstanding subsection (a), a court may determine
whether the Bureau has completed the necessary requirements
under this chapter for a rule to take effect.
(c) The enactment of a joint resolution of approval under
section 802 shall not be interpreted to serve as a grant or
modification of statutory authority by Congress for the
promulgation of a rule, shall not extinguish or affect any
claim, whether substantive or procedural, against any alleged
defect in a rule, and shall not form part of the record before
the court in any judicial proceeding concerning a rule except
for purposes of determining whether or not the rule is in
effect.
Sec. 806. Exemption for monetary policy
Nothing in this chapter shall apply to rules that concern
monetary policy proposed or implemented by the Board of
Governors of the Federal Reserve System or the Federal Open
Market Committee.
Sec. 807. Effective date of certain rules
Notwithstanding section 801--
(1) any rule that establishes, modifies, opens,
closes, or conducts a regulatory program for a
commercial, recreational, or subsistence activity
related to hunting, fishing, or camping; or
(2) any rule other than a major rule which the Bureau
for good cause finds (and incorporates the finding and
a brief statement of reasons therefore in the rule
issued) that notice and public procedure thereon are
impracticable, unnecessary, or contrary to the public
interest,
shall take effect at such time as the Bureau determines.
Sec. 808. Regulatory cut-go requirement
In making any new rule, the Bureau shall identify a rule or
rules that may be amended or repealed to completely offset any
annual costs of the new rule to the United States economy.
Before the new rule may take effect, the Bureau shall make each
such repeal or amendment. In making such an amendment or
repeal, the Bureau shall comply with the requirements of
subchapter II of chapter 5, but the Bureau may consolidate
proceedings under subchapter with proceedings on the new rule.
Sec. 809. Review of rules currently in effect
(a) Annual Review.--Beginning on the date that is 6 months
after the date of enactment of this section and annually
thereafter for the 9 years following, the Bureau shall
designate not less than 10 percent of eligible rules made by
the Bureau for review, and shall submit a report including each
such eligible rule in the same manner as a report under section
801(a)(1). Section 801, section 802, and section 803 shall
apply to each such rule, subject to subsection (c) of this
section. No eligible rule previously designated may be
designated again.
(b) Sunset for Eligible Rules Not Extended.--Beginning after
the date that is 10 years after the date of enactment of this
section, if Congress has not enacted a joint resolution of
approval for that eligible rule, that eligible rule shall not
continue in effect.
(c) Consolidation; Severability.--In applying sections 801,
802, and 803 to eligible rules under this section, the
following shall apply:
(1) The words ``take effect'' shall be read as
``continue in effect''.
(2) Except as provided in paragraph (3), a single
joint resolution of approval shall apply to all
eligible rules in a report designated for a year, and
the matter after the resolving clause of that joint
resolution is as follows: ``That Congress approves the
rules submitted by the __ for the year __.'' (The blank
spaces being appropriately filled in).
(3) It shall be in order to consider any amendment
that provides for specific conditions on which the
approval of a particular eligible rule included in the
joint resolution is contingent.
(4) A member of either House may move that a separate
joint resolution be required for a specified rule.
(d) Definition.--In this section, the term ``eligible rule''
means a rule that is in effect as of the date of enactment of
this section.
* * * * * * *
----------
BALANCED BUDGET AND EMERGENCY DEFICIT CONTROL ACT OF 1985
* * * * * * *
PART C--EMERGENCY POWERS TO ELIMINATE DEFICITS IN EXCESS OF MAXIMUM
DEFICIT AMOUNT
* * * * * * *
SEC. 257. THE BASELINE.
(a) In General.--For any budget year, the baseline refers to
a projection of current-year levels of new budget authority,
outlays, revenues, and the surplus or deficit into the budget
year and the outyears based on laws enacted through the
applicable date.
(b) Direct Spending and Receipts.--For the budget year and
each outyear, the baseline shall be calculated using the
following assumptions:
(1) In general.--Laws providing or creating direct
spending and receipts are assumed to operate in the
manner specified in those laws for each such year and
funding for entitlement authority is assumed to be
adequate to make all payments required by those laws.
(2) Exceptions.--(A)(i) No program established by a
law enacted on or before the date of enactment of the
Balanced Budget Act of 1997 with estimated current year
outlays greater than $50,000,000 shall be assumed to
expire in the budget year or the outyears. The scoring
of new programs with estimated outlays greater than
$50,000,000 a year shall be based on scoring by the
Committees on Budget or OMB, as applicable. OMB, CBO,
and the Budget Committees shall consult on the scoring
of such programs where there are differences between
CBO and OMB.
(ii) On the expiration of the suspension of a
provision of law that is suspended under section 171 of
Public Law 104-127 and that authorizes a program with
estimated fiscal year outlays that are greater than
$50,000,000, for purposes of clause (i), the program
shall be assumed to continue to operate in the same
manner as the program operated immediately before the
expiration of the suspension.
(B) The increase for veterans' compensation for a
fiscal year is assumed to be the same as that required
by law for veterans' pensions unless otherwise provided
by law enacted in that session.
(C) Excise taxes dedicated to a trust fund, if
expiring, are assumed to be extended at current rates.
(D) If any law expires before the budget year or any
outyear, then any program with estimated current year
outlays greater than $50,000,000 that operates under
that law shall be assumed to continue to operate under
that law as in effect immediately before its
expiration.
(E) Budgetary effects of rules subject to section 802
of title 5, united states code.--Any rules subject to
the congressional approval procedure set forth in
section 802 of chapter 8 of title 5, United States
Code, affecting budget authority, outlays, or receipts
shall be assumed to be effective unless it is not
approved in accordance with such section.
(3) Hospital insurance trust fund.--Notwithstanding
any other provision of law, the receipts and
disbursements of the Hospital Insurance Trust Fund
shall be included in all calculations required by this
Act.
(c) Discretionary Appropriations.--For the budget year and
each outyear, the baseline shall be calculated using the
following assumptions regarding all amounts other than those
covered by subsection (b):
(1) Inflation of current-year appropriations.--
Budgetary resources other than unobligated balances
shall be at the level provided for the budget year in
full-year appropriation Acts. If for any account a
full-year appropriation has not yet been enacted,
budgetary resources other than unobligated balances
shall be at the level available in the current year,
adjusted sequentially and cumulatively for expiring
housing contracts as specified in paragraph (2), for
social insurance administrative expenses as specified
in paragraph (3), to offset pay absorption and for pay
annualization as specified in paragraph (4), for
inflation as specified in paragraph (5), and to account
for changes required by law in the level of agency
payments for personnel benefits other than pay.
(2) Expiring housing contracts.--New budget authority
to renew expiring multiyear subsidized housing
contracts shall be adjusted to reflect the difference
in the number of such contracts that are scheduled to
expire in that fiscal year and the number expiring in
the current year, with the per-contract renewal cost
equal to the average current-year cost of renewal
contracts.
(3) Social insurance administrative expenses.--
Budgetary resources for the administrative expenses of
the following trust funds shall be adjusted by the
percentage change in the beneficiary population from
the current year to that fiscal year: the Federal
Hospital Insurance Trust Fund, the Supplementary
Medical Insurance Trust Fund, the Unemployment Trust
Fund, and the railroad retirement account.
(4) Pay annualization; offset to pay absorption.--
Current-year new budget authority for Federal employees
shall be adjusted to reflect the full 12-month costs
(without absorption) of any pay adjustment that
occurred in that fiscal year.
(5) Inflators.--The inflator used in paragraph (1) to
adjust budgetary resources relating to personnel shall
be the percent by which the average of the Bureau of
Labor Statistics Employment Cost Index (wages and
salaries, private industry workers) for that fiscal
year differs from such index for the current year. The
inflator used in paragraph (1) to adjust all other
budgetary resources shall be the percent by which the
average of the estimated gross domestic product chain-
type price index for that fiscal year differs from the
average of such estimated index for the current year.
(6) Current-year appropriations.--If, for any
account, a continuing appropriation is in effect for
less than the entire current year, then the current-
year amount shall be assumed to equal the amount that
would be available if that continuing appropriation
covered the entire fiscal year. If law permits the
transfer of budget authority among budget accounts in
the current year, the current-year level for an account
shall reflect transfers accomplished by the submission
of, or assumed for the current year in, the President's
original budget for the budget year.
(d) Up-to-Date Concepts.--In deriving the baseline for any
budget year or outyear, current-year amounts shall be
calculated using the concepts and definitions that are required
for that budget year.
(e) Asset Sales.--Amounts realized from the sale of an asset
shall not be included in estimates under section 251, 252, or
253 if that sale would result in a financial cost to the
Federal Government as determined pursuant to scorekeeping
guidelines.
* * * * * * *
----------
TITLE 18, UNITED STATES CODE
PART I--CRIMES
* * * * * * *
CHAPTER 121--STORED WIRE AND ELECTRONIC COMMUNICATIONS AND
TRANSACTIONAL RECORDS ACCESS
* * * * * * *
Sec. 2702. Voluntary disclosure of customer communications or records
(a) Prohibitions.--Except as provided in subsection (b) or
(c)--
(1) a person or entity providing an electronic
communication service to the public shall not knowingly
[divulge] disclose to any person or entity the contents
of a communication [while in electronic storage by that
service] that is in electronic storage with or
otherwise stored, held, or maintained by that service;
and
(2) a person or entity providing remote computing
service [to the public] shall not knowingly [divulge]
disclose to any person or entity the contents of any
communication [which is carried or maintained on that
service] that is stored, held, or maintained by that
service--
(A) on behalf of, and received by means of
electronic transmission from (or created by
means of computer processing of communications
received by means of electronic transmission
from), a subscriber or customer of such
service;
(B) solely for the purpose of providing
storage or computer processing services to such
subscriber or customer, if the provider is not
authorized to access the contents of any such
communications for purposes of providing any
services other than storage or computer
processing; and
(3) [a provider of] a person or entity providing
remote computing service or electronic communication
service to the public shall not knowingly [divulge]
disclose a record or other information pertaining to a
subscriber to or customer of such service (not
including the contents of communications covered by
paragraph (1) or (2)) to any governmental entity.
(b) Exceptions for disclosure of communications.--A provider
described in subsection (a) may [divulge] disclose the contents
of a wire or electronic communication--
[(1) to an addressee or intended recipient of such
communication or an agent of such addressee or intended
recipient;]
(1) to an originator, addressee, or intended
recipient of such communication, to the subscriber or
customer on whose behalf the provider stores, holds, or
maintains such communication, or to an agent of such
addressee, intended recipient, subscriber, or customer;
(2) as otherwise authorized in section 2517,
2511(2)(a), or 2703 of this title;
[(3) with the lawful consent of the originator or an
addressee or intended recipient of such communication,
or the subscriber in the case of remote computing
service;]
(3) with the lawful consent of the originator,
addressee, or intended recipient of such communication,
or of the subscriber or customer on whose behalf the
provider stores, holds, or maintains such
communication;
(4) to a person employed or authorized or whose
facilities are used to forward such communication to
its destination;
(5) as may be necessarily incident to the rendition
of the service or to the protection of the rights or
property of the provider of that service;
(6) to the National Center for Missing and Exploited
Children, in connection with a report submitted thereto
under section 2258A;
(7) to a law enforcement agency--
(A) if the contents--
(i) were inadvertently obtained by
the service provider; and
(ii) appear to pertain to the
commission of a crime;
[(B) Repealed. Pub. L. 108-21, title V, Sec.
508(b)(1)(A), Apr. 30, 2003, 117 Stat. 684]
(8) to a governmental entity, if the provider, in
good faith, believes that an emergency involving danger
of death or serious physical injury to any person
requires disclosure without delay of communications
relating to the emergency; or
(9) to a foreign government pursuant to an order from
a foreign government that is subject to an executive
agreement that the Attorney General has determined and
certified to Congress satisfies section 2523.
(c) Exceptions for Disclosure of Customer Records.--A
provider described in subsection (a) may [divulge] disclose a
record or other information pertaining to a subscriber to or
customer of such service (not including the contents of wire or
electronic communications covered by subsection (a)(1) or
(a)(2))--
(1) as otherwise authorized in section 2703;
[(2) with the lawful consent of the customer or
subscriber;]
(2) with the lawful consent of the subscriber or
customer;
(3) as may be necessarily incident to the rendition
of the service or to the protection of the rights or
property of the provider of that service;
(4) to a governmental entity, if the provider, in
good faith, believes that an emergency involving danger
of death or serious physical injury to any person
requires disclosure without delay of information
relating to the emergency;
(5) to the National Center for Missing and Exploited
Children, in connection with a report submitted thereto
under section 2258A;
(6) to any person other than a governmental entity;
or
(7) to a foreign government pursuant to an order from
a foreign government that is subject to an executive
agreement that the Attorney General has determined and
certified to Congress satisfies section 2523.
(d) Reporting of Emergency Disclosures.--On an annual basis,
the Attorney General shall submit to the Committee on the
Judiciary of the House of Representatives and the Committee on
the Judiciary of the Senate a report containing--
(1) the number of accounts from which the Department
of Justice has received voluntary disclosures under
subsection (b)(8);
(2) a summary of the basis for disclosure in those
instances where--
(A) voluntary disclosures under subsection
(b)(8) were made to the Department of Justice;
and
(B) the investigation pertaining to those
disclosures was closed without the filing of
criminal charges; and
(3) the number of accounts from which the Department
of Justice has received voluntary disclosures under
subsection (c)(4).
Sec. 2703. Required disclosure of customer communications or records
[(a) Contents of Wire or Electronic Communications in
Electronic Storage.--A governmental entity may require the
disclosure by a provider of electronic communication service of
the contents of a wire or electronic communication, that is in
electronic storage in an electronic communications system for
one hundred and eighty days or less, only pursuant to a warrant
issued using the procedures described in the Federal Rules of
Criminal Procedure (or, in the case of a State court, issued
using State warrant procedures) by a court of competent
jurisdiction. A governmental entity may require the disclosure
by a provider of electronic communications services of the
contents of a wire or electronic communication that has been in
electronic storage in an electronic communications system for
more than one hundred and eighty days by the means available
under subsection (b) of this section.
[(b) Contents of Wire or Electronic Communications in a
Remote Computing Service.--(1) A governmental entity may
require a provider of remote computing service to disclose the
contents of any wire or electronic communication to which this
paragraph is made applicable by paragraph (2) of this
subsection--
[(A) without required notice to the subscriber or
customer, if the governmental entity obtains a warrant
issued using the procedures described in the Federal
Rules of Criminal Procedure (or, in the case of a State
court, issued using State warrant procedures) by a
court of competent jurisdiction; or
[(B) with prior notice from the governmental entity
to the subscriber or customer if the governmental
entity--
[(i) uses an administrative subpoena
authorized by a Federal or State statute or a
Federal or State grand jury or trial subpoena;
or
[(ii) obtains a court order for such
disclosure under subsection (d) of this
section;
except that delayed notice may be given pursuant to
section 2705 of this title.
[(2) Paragraph (1) is applicable with respect to any wire or
electronic communication that is held or maintained on that
service--
[(A) on behalf of, and received by means of
electronic transmission from (or created by means of
computer processing of communications received by means
of electronic transmission from), a subscriber or
customer of such remote computing service; and
[(B) solely for the purpose of providing storage or
computer processing services to such subscriber or
customer, if the provider is not authorized to access
the contents of any such communications for purposes of
providing any services other than storage or computer
processing.
[(c) Records Concerning Electronic Communication Service or
Remote Computing Service.--(1) A governmental entity may
require a provider of electronic communication service or
remote computing service to disclose a record or other
information pertaining to a subscriber to or customer of such
service (not including the contents of communications) only
when the governmental entity--
[(A) obtains a warrant issued using the procedures
described in the Federal Rules of Criminal Procedure
(or, in the case of a State court, issued using State
warrant procedures) by a court of competent
jurisdiction;
[(B) obtains a court order for such disclosure under
subsection (d) of this section;
[(C) has the consent of the subscriber or customer to
such disclosure;
[(D) submits a formal written request relevant to a
law enforcement investigation concerning telemarketing
fraud for the name, address, and place of business of a
subscriber or customer of such provider, which
subscriber or customer is engaged in telemarketing (as
such term is defined in section 2325 of this title); or
[(E) seeks information under paragraph (2).
[(2) A provider of electronic communication service or remote
computing service shall disclose to a governmental entity the--
[(A) name;
[(B) address;
[(C) local and long distance telephone connection
records, or records of session times and durations;
[(D) length of service (including start date) and
types of service utilized;
[(E) telephone or instrument number or other
subscriber number or identity, including any
temporarily assigned network address; and
[(F) means and source of payment for such service
(including any credit card or bank account number),
of a subscriber to or customer of such service when the
governmental entity uses an administrative subpoena authorized
by a Federal or State statute or a Federal or State grand jury
or trial subpoena or any means available under paragraph (1).
[(3) A governmental entity receiving records or information
under this subsection is not required to provide notice to a
subscriber or customer.]
(a) Contents of Wire or Electronic Communications in
Electronic Storage.--Except as provided in subsections (i) and
(j), a governmental entity may require the disclosure by a
provider of electronic communication service of the contents of
a wire or electronic communication that is in electronic
storage with or otherwise stored, held, or maintained by that
service only if the governmental entity obtains a warrant
issued using the procedures described in the Federal Rules of
Criminal Procedure (or, in the case of a State court, issued
using State warrant procedures) that--
(1) is issued by a court of competent jurisdiction;
and
(2) may indicate the date by which the provider must
make the disclosure to the governmental entity.
In the absence of a date on the warrant indicating the date by
which the provider must make disclosure to the governmental
entity, the provider shall promptly respond to the warrant.
(b) Contents of Wire or Electronic Communications in a Remote
Computing Service.--
(1) In general.--Except as provided in subsections
(i) and (j), a governmental entity may require the
disclosure by a provider of remote computing service of
the contents of a wire or electronic communication that
is stored, held, or maintained by that service only if
the governmental entity obtains a warrant issued using
the procedures described in the Federal Rules of
Criminal Procedure (or, in the case of a State court,
issued using State warrant procedures) that--
(A) is issued by a court of competent
jurisdiction; and
(B) may indicate the date by which the
provider must make the disclosure to the
governmental entity.
In the absence of a date on the warrant indicating the
date by which the provider must make disclosure to the
governmental entity, the provider shall promptly
respond to the warrant.
(2) Applicability.--Paragraph (1) is applicable with
respect to any wire or electronic communication that is
stored, held, or maintained by the provider--
(A) on behalf of, and received by means of
electronic transmission from (or created by
means of computer processing of communication
received by means of electronic transmission
from), a subscriber or customer of such remote
computing service; and
(B) solely for the purpose of providing
storage or computer processing services to such
subscriber or customer, if the provider is not
authorized to access the contents of any such
communications for purposes of providing any
services other than storage or computer
processing.
(c) Records Concerning Electronic Communication Service or
Remote Computing Service.--
(1) In general.--Except as provided in subsections
(i) and (j), a governmental entity may require the
disclosure by a provider of electronic communication
service or remote computing service of a record or
other information pertaining to a subscriber to or
customer of such service (not including the contents of
wire or electronic communications), only--
(A) if a governmental entity obtains a
warrant issued using the procedures described
in the Federal Rules of Criminal Procedure (or,
in the case of a State court, issued using
State warrant procedures) that--
(i) is issued by a court of competent
jurisdiction directing the disclosure;
and
(ii) may indicate the date by which
the provider must make the disclosure
to the governmental entity;
(B) if a governmental entity obtains a court
order directing the disclosure under subsection
(d);
(C) with the lawful consent of the subscriber
or customer; or
(D) as otherwise authorized in paragraph (2).
(2) Subscriber or customer information.--A provider
of electronic communication service or remote computing
service shall, in response to an administrative
subpoena authorized by Federal or State statute, a
grand jury, trial, or civil discovery subpoena, or any
means available under paragraph (1), disclose to a
governmental entity the--
(A) name;
(B) address;
(C) local and long distance telephone
connection records, or records of session times
and durations;
(D) length of service (including start date)
and types of service used;
(E) telephone or instrument number or other
subscriber or customer number or identity,
including any temporarily assigned network
address; and
(F) means and source of payment for such
service (including any credit card or bank
account number),
of a subscriber or customer of such service.
(3) Notice not required.--A governmental entity that
receives records or information under this subsection
is not required to provide notice to a subscriber or
customer.
(d) Requirements for Court Order.--A court order for
disclosure under subsection [(b) or] (c) may be issued by any
court that is a court of competent jurisdiction and shall issue
only if the governmental entity offers specific and articulable
facts showing that there are reasonable grounds to believe that
[the contents of a wire or electronic communication, or] the
records or other information [sought,] sought are relevant and
material to an ongoing criminal investigation. In the case of a
State governmental authority, such a court order shall not
issue if prohibited by the law of such State. A court issuing
an order pursuant to this [section] subsection, on a motion
made promptly by the service provider, may quash or modify such
order, if the information or records requested are unusually
voluminous in nature or compliance with such order otherwise
would cause an undue burden on such provider.
(e) No Cause of Action Against a Provider Disclosing
Information Under This Chapter.--No cause of action shall lie
in any court against any provider of wire or electronic
communication service, its officers, employees, agents, or
other specified persons for providing information, facilities,
or assistance in accordance with the terms of a court order,
warrant, subpoena, statutory authorization, or certification
under this chapter.
(f) Requirement To Preserve Evidence.--
(1) In general.--A provider of wire or electronic
communication services or a remote computing service,
upon the request of a governmental entity, shall take
all necessary steps to preserve records and other
evidence in its possession pending the issuance of a
court order or other process.
(2) Period of retention.--Records referred to in
paragraph (1) shall be retained for a period of 90
days, which shall be extended for an additional 90-day
period upon a renewed request by the governmental
entity.
(g) Presence of Officer Not Required.--Notwithstanding
section 3105 of this title, the presence of an officer shall
not be required for service or execution of a search warrant
issued in accordance with this chapter requiring disclosure by
a provider of electronic communications service or remote
computing service of the contents of communications or records
or other information pertaining to a subscriber to or customer
of such service.
(h) Comity Analysis and Disclosure of Information Regarding
Legal Process Seeking Contents of Wire or Electronic
Communication.--
(1) Definitions.--In this subsection--
(A) the term ``qualifying foreign
government'' means a foreign government--
(i) with which the United States has
an executive agreement that has entered
into force under section 2523; and
(ii) the laws of which provide to
electronic communication service
providers and remote computing service
providers substantive and procedural
opportunities similar to those provided
under paragraphs (2) and (5); and
(B) the term ``United States person'' has the
meaning given the term in section 2523.
(2) Motions to quash or modify.--(A) A provider of
electronic communication service to the public or
remote computing service, including a foreign
electronic communication service or remote computing
service, that is being required to disclose pursuant to
legal process issued under this section the contents of
a wire or electronic communication of a subscriber or
customer, may file a motion to modify or quash the
legal process where the provider reasonably believes--
(i) that the customer or subscriber is not a
United States person and does not reside in the
United States; and
(ii) that the required disclosure would
create a material risk that the provider would
violate the laws of a qualifying foreign
government. Such a motion shall be filed not
later than 14 days after the date on which the
provider was served with the legal process,
absent agreement with the government or
permission from the court to extend the
deadline based on an application made within
the 14 days. The right to move to quash is
without prejudice to any other grounds to move
to quash or defenses thereto, but it shall be
the sole basis for moving to quash on the
grounds of a conflict of law related to a
qualifying foreign government.
(B) Upon receipt of a motion filed pursuant to
subparagraph (A), the court shall afford the
governmental entity that applied for or issued the
legal process under this section the opportunity to
respond. The court may modify or quash the legal
process, as appropriate, only if the court finds that--
(i) the required disclosure would cause the
provider to violate the laws of a qualifying
foreign government;
(ii) based on the totality of the
circumstances, the interests of justice dictate
that the legal process should be modified or
quashed; and
(iii) the customer or subscriber is not a
United States person and does not reside in the
United States.
(3) Comity analysis.--For purposes of making a
determination under paragraph (2)(B)(ii), the court
shall take into account, as appropriate--
(A) the interests of the United States,
including the investigative interests of the
governmental entity seeking to require the
disclosure;
(B) the interests of the qualifying foreign
government in preventing any prohibited
disclosure;
(C) the likelihood, extent, and nature of
penalties to the provider or any employees of
the provider as a result of inconsistent legal
requirements imposed on the provider;
(D) the location and nationality of the
subscriber or customer whose communications are
being sought, if known, and the nature and
extent of the subscriber or customer's
connection to the United States, or if the
legal process has been sought on behalf of a
foreign authority pursuant to section 3512, the
nature and extent of the subscriber or
customer's connection to the foreign
authority's country;
(E) the nature and extent of the provider's
ties to and presence in the United States;
(F) the importance to the investigation of
the information required to be disclosed;
(G) the likelihood of timely and effective
access to the information required to be
disclosed through means that would cause less
serious negative consequences; and
(H) if the legal process has been sought on
behalf of a foreign authority pursuant to
section 3512, the investigative interests of
the foreign authority making the request for
assistance.
(4) Disclosure obligations during pendency of
challenge.--A service provider shall preserve, but not
be obligated to produce, information sought during the
pendency of a motion brought under this subsection,
unless the court finds that immediate production is
necessary to prevent an adverse result identified in
section 2705(a)(2).
(5) Disclosure to qualifying foreign government.--(A)
It shall not constitute a violation of a protective
order issued under section 2705 for a provider of
electronic communication service to the public or
remote computing service to disclose to the entity
within a qualifying foreign government, designated in
an executive agreement under section 2523, the fact of
the existence of legal process issued under this
section seeking the contents of a wire or electronic
communication of a customer or subscriber who is a
national or resident of the qualifying foreign
government.
(B) Nothing in this paragraph shall be construed to
modify or otherwise affect any other authority to make
a motion to modify or quash a protective order issued
under section 2705.
(h) Notice.--Except as provided in section 2705, a provider
of electronic communication service or remote computing service
may notify a subscriber or customer of a receipt of a warrant,
court order, subpoena, or request under subsection (a), (b),
(c), or (d) of this section.
(i) Rule of Construction Related to Legal Process.--Nothing
in this section or in section 2702 shall limit the authority of
a governmental entity to use an administrative subpoena
authorized by Federal or State statute, a grand jury, trial, or
civil discovery subpoena, or a warrant issued using the
procedures described in the Federal Rules of Criminal Procedure
(or, in the case of a State court, issued using State warrant
procedures) by a court of competent jurisdiction to--
(1) require an originator, addressee, or intended
recipient of a wire or electronic communication to
disclose a wire or electronic communication (including
the contents of that communication) to the governmental
entity;
(2) require a person or entity that provides an
electronic communication service to the officers,
directors, employees, or agents of the person or entity
(for the purpose of carrying out their duties) to
disclose a wire or electronic communication (including
the contents of that communication) to or from the
person or entity itself or to or from an officer,
director, employee, or agent of the entity to a
governmental entity, if the wire or electronic
communication is stored, held, or maintained on an
electronic communications system owned, operated, or
controlled by the person or entity; or
(3) require a person or entity that provides a remote
computing service or electronic communication service
to disclose a wire or electronic communication
(including the contents of that communication) that
advertises or promotes a product or service and that
has been made readily accessible to the general public.
(j) Rule of Construction Related to Congressional
Subpoenas.--Nothing in this section or in section 2702 shall
limit the power of inquiry vested in the Congress by article I
of the Constitution of the United States, including the
authority to compel the production of a wire or electronic
communication (including the contents of a wire or electronic
communication) that is stored, held, or maintained by a person
or entity that provides remote computing service or electronic
communication service.
* * * * * * *
[Sec. 2705. Delayed notice
[(a) Delay of Notification.--(1) A governmental entity acting
under section 2703(b) of this title may--
[(A) where a court order is sought, include in the
application a request, which the court shall grant, for
an order delaying the notification required under
section 2703(b) of this title for a period not to
exceed ninety days, if the court determines that there
is reason to believe that notification of the existence
of the court order may have an adverse result described
in paragraph (2) of this subsection; or
[(B) where an administrative subpoena authorized by a
Federal or State statute or a Federal or State grand
jury subpoena is obtained, delay the notification
required under section 2703(b) of this title for a
period not to exceed ninety days upon the execution of
a written certification of a supervisory official that
there is reason to believe that notification of the
existence of the subpoena may have an adverse result
described in paragraph (2) of this subsection.
[(2) An adverse result for the purposes of paragraph (1) of
this subsection is--
[(A) endangering the life or physical safety of an
individual;
[(B) flight from prosecution;
[(C) destruction of or tampering with evidence;
[(D) intimidation of potential witnesses; or
[(E) otherwise seriously jeopardizing an
investigation or unduly delaying a trial.
[(3) The governmental entity shall maintain a true copy of
certification under paragraph (1)(B).
[(4) Extensions of the delay of notification provided in
section 2703 of up to ninety days each may be granted by the
court upon application, or by certification by a governmental
entity, but only in accordance with subsection (b) of this
section.
[(5) Upon expiration of the period of delay of notification
under paragraph (1) or (4) of this subsection, the governmental
entity shall serve upon, or deliver by registered or first-
class mail to, the customer or subscriber a copy of the process
or request together with notice that--
[(A) states with reasonable specificity the nature of
the law enforcement inquiry; and
[(B) informs such customer or subscriber--
[(i) that information maintained for such
customer or subscriber by the service provider
named in such process or request was supplied
to or requested by that governmental authority
and the date on which the supplying or request
took place;
[(ii) that notification of such customer or
subscriber was delayed;
[(iii) what governmental entity or court made
the certification or determination pursuant to
which that delay was made; and
[(iv) which provision of this chapter allowed
such delay.
[(6) As used in this subsection, the term ``supervisory
official'' means the investigative agent in charge or assistant
investigative agent in charge or an equivalent of an
investigating agency's headquarters or regional office, or the
chief prosecuting attorney or the first assistant prosecuting
attorney or an equivalent of a prosecuting attorney's
headquarters or regional office.
[(b) Preclusion of Notice to Subject of Governmental
Access.--A governmental entity acting under section 2703, when
it is not required to notify the subscriber or customer under
section 2703(b)(1), or to the extent that it may delay such
notice pursuant to subsection (a) of this section, may apply to
a court for an order commanding a provider of electronic
communications service or remote computing service to whom a
warrant, subpoena, or court order is directed, for such period
as the court deems appropriate, not to notify any other person
of the existence of the warrant, subpoena, or court order. The
court shall enter such an order if it determines that there is
reason to believe that notification of the existence of the
warrant, subpoena, or court order will result in--
[(1) endangering the life or physical safety of an
individual;
[(2) flight from prosecution;
[(3) destruction of or tampering with evidence;
[(4) intimidation of potential witnesses; or
[(5) otherwise seriously jeopardizing an
investigation or unduly delaying a trial.]
Sec. 2705. Delayed notice
(a) In General.--A governmental entity acting under section
2703 may apply to a court for an order directing a provider of
electronic communication service or remote computing service to
which a warrant, order, subpoena, or other directive under
section 2703 is directed not to notify any other person of the
existence of the warrant, order, subpoena, or other directive.
(b) Determination.--A court shall grant a request for an
order made under subsection (a) for delayed notification of up
to 180 days if the court determines that there is reason to
believe that notification of the existence of the warrant,
order, subpoena, or other directive will likely result in--
(1) endangering the life or physical safety of an
individual;
(2) flight from prosecution;
(3) destruction of or tampering with evidence;
(4) intimidation of potential witnesses; or
(5) otherwise seriously jeopardizing an investigation
or unduly delaying a trial.
(c) Extension.--Upon request by a governmental entity, a
court may grant one or more extensions, for periods of up to
180 days each, of an order granted in accordance with
subsection (b).
* * * * * * *
DISSENTING VIEWS
The Bipartisan Budget Act enacted early this year provided
relief from unworkable discretionary spending caps. The
agreement was supposed to provide the country with stability
following a year of shutdowns, last-minute veto threats, and
general uncertainty in government. That stability lasted long
enough for Congress to pass a bipartisan Omnibus appropriations
bill for Fiscal Year (FY) 2018, and then Republican chaos
reigned again. The President threatened to veto the bill,
unhappy with Congress' large investments in programs to help
low- and middle-income Americans and rejection of his campaign-
promised border wall.
Even after the President signed the bill, the
Administration and Republican leadership in Congress who voted
for the Bipartisan Budget Act and the Omnibus bill have
continued to attempt to undo those bipartisan agreements. The
majority passed H.R. 3, a rescission bill to undo funding and
mollify an angry President. We have been told by OMB Director
Mick Mulvaney that this was the first of many rescission
packages meant to bring spending in line with the President's
priorities, ignoring Congressional action that dismissed the
President's draconian FY 2018 budget request.
In addition to the unacceptable rescissions proposals, the
majority's lack of transparency in allocating the FY 2019
discretionary budget also endangers future bipartisan
compromise. The majority abandoned longstanding committee
practice to provide Members and the public with a budget
blueprint for domestic spending, known as 302(b) allocations.
Members were asked to vote on bills without having the full
picture on what impact each bill would have on the other bills.
The Financial Services and General Government (FSGG) bill
funds critical programs that impact the lives of every American
in their capacity as consumers, as investors, and as taxpayers.
The bill's jurisdiction covers a diverse range of agencies
including those that provide oversight and regulation of the
financial and telecommunications industries, manage government
buildings and infrastructure projects, and oversee the federal
workforce. In addition, funding in this bill supports the
operations of the White House, the Federal Judiciary, and the
District of Columbia.
While we appreciate the majority's work in assembling the
Fiscal Year (FY) 2019 FSGG bill, the sheer number of policy
provisions in this bill reflects an unprecedented degree of
focus on partisan priorities from the Majority's side of the
aisle. The bill's allocation is the same as the 2018 enacted
level, $23.423 billion, which does not adequately meet the
growing needs of taxpayers, consumers, and investors.
The bill's most galling feature is its failure to provide
any funding for Election Assistance Commission grants. Our
election infrastructure is outdated, reliant on antiquated
technology, and unable to adequately defend against future
intrusions. For instance, before the 2016 election, Russia
targeted the election systems of at least 21 states--including
accessing the Illinois voter database. Congress has been
repeatedly warned that Russia and other hostile actors will
attempt to tamper with the 2018 or 2020 elections. With foreign
governments attempting to disrupt and influence our democratic
process, now is the time to double down on our efforts to
prevent all forms of election hacking. Yet not a single
Republican voted for an amendment from Ranking Member Quigley
to provide $380 million, the amount appropriated in FY 2018, to
help states fortify and protect election systems.
The bill would also reduce the Community Development
Financial Institutions (CDFI) Fund, one of the most significant
bipartisan priorities within the subcommittee's jurisdiction.
Even after accepting an amendment to increase funding, the bill
as reported out of committee is $34 million below the FY 2018
enacted level. CDFIs have historically generated twelve dollars
of financing for every one dollar of appropriated funding. This
committee should be doing more to ensure that low-income rural,
urban, and Native American communities have access to quality,
affordable, and responsible financial services products.
Another particularly irresponsible cut targets the General
Services Administration (GSA), which functions as the Federal
Government's developer and landlord. The bill decimates funding
for the Federal Buildings Fund, forcing the agency to neglect
high-priority safety and security projects. This lack of
sufficient funding for repair projects further exacerbates an
already dire situation. Every dollar that GSA is unable to
spend on basic maintenance and repairs leads to a long-term
capital liability of four to five dollars in the future.
These reductions are particularly problematic when compared
to some of the priorities of the majority. Most notable is the
creation of a $585 million ``Fund for America's Kids and
Grandkids.'' This is an obvious attempt to not spend the
subcommittee's full allocation under the guise of deficit
reduction. Instead of throwing $585 million in a black hole,
the resources provided for this program could have been far
better invested in a number of areas that would have actually
helped the next generation of Americans.
Even more troubling than inadequate funding for critical
priorities is the laundry list of ideological riders and
authorizing provisions included in the bill. Titles IX, X, and
XI contain 31 different authorizing bills. While several of
these are non-controversial and received substantial Democratic
support, they do not belong in a spending bill. It is
disappointing that Republicans opposed an amendment offered by
Rep. Kaptur to strike the extraneous titles.
As in previous years, House Republicans have used the FSGG
bill to attempt to weaken campaign finance laws. Riders are
included to prevent the Securities and Exchange Commission
(SEC) from requiring the disclosure of political contributions
and to repeal the Federal Election Commission's prior approval
requirement, which places limits on political solicitation.
Republicans rejected an amendment from Rep. Cartwright to
strike the SEC provision.
Democrats also tried to remove provisions that interfere in
women's health decisions. Our Republican colleagues evidently
are not satisfied with the restrictions already in place under
current law, so this year's FSGG appropriations bill would make
it even more difficult for a woman to purchase the health
insurance she wants. Ranking Member Lowey offered an amendment
to strike this harmful provision and protect a woman's right to
make legal and private health choices without government
interference, which Republicans opposed.
Several of the objectionable Republican provisions that
attack women's right to safe and legal abortion services also
continued the Republican tradition of interfering in the local
affairs of the District of Columbia. As in past years, the bill
contains a variety of provisions that impose limits on the
District's ability to govern itself. Rep. Ryan and Rep. Lee
offered amendments to protect the District's ability to spend
its own funds to enforce its Reproductive Health Non-
Discrimination Act and to cover safe and legal abortion under
its Medicaid program, respectively. Republicans opposed both of
these amendments.
Rep. Aguilar offered an amendment that was rejected to make
sure that individuals in the Deferred Action for Childhood
Arrivals program, which covers certain non-criminal immigrants
who entered the country as children and remain without U.S.
citizenship, can lend their talents to the Federal workforce.
Despite more Republican broken promises, Democrats will
continue to work to help our Dreamers.
Democrats sought to make a number of other improvements to
the bill, including an amendment from Rep. McCollum to restore
a provision to block pay raises for the Vice President and high
ranking political appointees, an amendment from Rep. Serrano to
nullify part-time Consumer Financial Protection Bureau Director
Mulvaney's firing of the entire Consumer Advisory Board, an
amendment from Rep. Wasserman Schultz to remove the prohibition
on funds for the Internal Revenue Service to deny tax exemption
to churches for engaging in political activity, and an
amendment from Reps. Price and Serrano to restore the FCC's
Open Internet Order and save net neutrality. All of these
amendments were defeated.
We were also disappointed that Republicans opposed an
amendment from Rep. Joyce to ensure that financial institutions
are not penalized solely because they provide services to
entities involved with handling marijuana in states where such
activity is legal. After several Republicans implied that they
would support an amendment limited to entities handling medical
marijuana, Rep. Joyce proposed such an amendment. The Majority
encouraged him to withdraw that amendment as well. Democrats
will continue to work to provide clarity for financial
institutions and others operating legal businesses.
Despite the bill's numerous shortcomings, we are pleased
that it would increase funding for the Office of Terrorism and
Financial Intelligence, Federal Defender Services, Small
Business Administration, and Office of National Drug Control
Policy. Additionally, we thank Chairman Graves for directing
the United States Postal Service to issue a report on the
adequacy of personnel levels, the use of temporary employees,
and consolidation of distribution centers. Inconsistent mail
delivery has reached epidemic proportions in many areas, and
must be improved.
However, on balance the reductions to critical programs and
poison pill riders make this a bill Democrats strongly oppose.
It is the latest example of House Republicans following
President Trump's lead and turning their backs on hardworking
American families.
Nita M. Lowey.
Mike Quigley.