To amend the Commodity Exchange Act and the Securities Exchange Act of 1934 to specify how clearing requirements apply to certain affiliate transactions, and for other purposes.

Mr. Speaker, I would first like to thank Congresswoman Moore, as well as Congresswoman Fudge, for their efforts to craft the text of this bill which represents a dramatic improvement from a similar bill that was considered in the Financial Services Committee 18 months ago.

At that time, Commodity Futures Trading Commission--that is, the CFTC--Chairman Gary Gensler warned that providing such a broad interaffiliate exemption from the requirement to clear derivatives could harm its efforts to regulate the market.

Since that time, however, the authors of this legislation have significantly tailored the language, incorporating several technical edits provided by the CFTC, and the measure now only extends the interaffiliate exemption to instances when the commercial risk of an exempt end user is being hedged or mitigated.

Last week, the CFTC provided the same tailored relief that this bill would provide. I submit for the Record the CFTC's no-action letter.

U.S. Commodity Futures

Trading Commission,

Washington, DC, November 26, 2014.

Re No-Action Relief from the Clearing Requirement for Swaps

Entered into by Eligible Treasury Affiliates

The purpose of this letter is to amend the no-action relief

previously granted by the Division of Clearing and Risk

(``Division'') of the Commodity Futures Trading Commission

(``Commission'') under No-Action Letter 13-22 to address

certain challenges faced by treasury affiliates in

undertaking hedging activities on behalf of non-financial

affiliates within a corporate group. Those challenges

pertained to certain conditions in the prior relief. The

Division in this letter is altering some of those conditions

to enable additional market participants to avail themselves

of the treasury affiliate relief originally set forth in No

Action Letter 13-22.

Treasury Affiliate Exemption from Clearing

On June 4, 2013, the Division granted no-action relief from

the clearing requirement under section 2(h)(1) of the

Commodity Exchange Act (``CEA'') and part 50 of the

Commission's regulations, for swaps entered into

by certain affiliates acting on behalf of non-financial

affiliates within a corporate group for the purpose of

hedging or mitigating commercial risk (hereinafter referred

to as ``treasury affiliates'').

No-Action Letter 13-22 was issued based on the Division's

understanding that treasury affiliates were undertaking

hedging activities on behalf of non-financial affiliates that

were eligible to elect the end-user exception from clearing,

but were themselves ineligible to elect the exception. As

discussed further below, because treasury affiliates can act

in a wider capacity as treasury centers that provide

financial services for all or most of the affiliates within a

corporate group, including daily cash management, debt

administration, and risk hedging and mitigation, treasury

affiliates met the definition of ``financial entity'' under

section 2(h)(7)(C)(i)(VIII) of the CEA and thus could not

elect the end-user exception. As a result, the Division

granted treasury affiliates relief to continue entering into

non-cleared swaps on behalf of the non-financial affiliates,

subject to specific conditions and requirements.

The Division has since learned that there are treasury

affiliates precluded from electing the relief in No-Action

Letter 13-22 because they do not meet certain conditions

contained in the letter. As discussed below, based on input

from market participants, the Division is hereby issuing this

letter to amend some of the conditions and requirements

contained in No-Action Letter 13-22 to allow additional

treasury affiliates to rely on the relief from clearing.

Applicable Regulatory Requirements

Under section 2(h)(1)(A) of the CEA, it is unlawful for any

person to engage in a swap unless that person submits such

swap for clearing to a derivatives clearing organization

(``DCO'') that is registered under the CEA or exempt from

registration if the swap is required to be cleared. On

November 29, 2012, the Commission adopted its first clearing

requirement determination, requiring that swaps meeting

certain specifications within four classes of interest rate

swaps and two classes of credit default swaps be cleared.

Pursuant to section 2(h)(7) of the CEA and Sec. 50.50 of

the Commission's regulations, a counterparty to a swap that

is subject to the clearing requirement may elect the end-user

exception from required clearing provided that such

counterparty is not a financial entity, as defined in section

2(h)(7)(C) of the CEA, and otherwise meets the requirements

of Sec. 50.50 of the Commission's regulations. Thus, the end-

user exception from required clearing may be elected for

swaps that are entered into between two non-financial

entities, or between a non-financial entity and a financial

entity, for swaps that hedge or mitigate commercial risk.

As noted above, the Division granted relief from required

clearing for treasury affiliates of non-financial companies

that fall within the definition of ``financial entity'' under

section 2(h)(7)(C)(i)(VIII) of the CEA when acting on behalf

of affiliates that otherwise would be eligible to elect the

end-user exception from required clearing.''As such, No-

Action Letter 13-22 effectively allowed treasury affiliates,

subject to certain additional requirements and conditions, to

take advantage of the end-user exception from clearing that

its non-financial affiliates in the corporate group would

otherwise have been eligible to elect had they entered into

the transactions directly.

Summary of Relief

Since the Division issued No-Action Letter 13-22, market

participants have highlighted several requirements and

conditions that make use of the relief granted thereunder

impractical for many treasury affiliates. As discussed below,

the Division is therefore amending the following requirements

and conditions.

i. The requirement that the ultimate parent of a treasury

affiliate identify all wholly- and majority-owned affiliates

and ensure a majority qualify for the end-user exception.

Market participants have expressed concerns about the

second condition for eligible treasury affiliate status in

No-Action Letter 13-22. The second condition requires that

the ultimate parent of a treasury affiliate identify all

wholly- and majority-owned affiliates within the corporate

group and ensure that a majority qualify for the end-user

exception.

Market participants have noted the ratio of the absolute

number of financial entities to nonfinancial entities does

not necessarily provide meaning-fill information about the

corporate family as a whole, and adds on-going surveillance

responsibilities and expenses for the corporate family. The

Division agrees and has removed the requirement accordingly

in the revised relief set forth herein.

ii. The requirement that the treasury affiliate is not

itself or is not affiliated with a systemically important

nonbank financial company.

Market participants have also expressed concerns about the

fourth condition for eligible treasury affiliate status in

No-Action Letter 13-22. The fourth condition prohibits the

treasury affiliate from being, or being affiliated with, a

nonbank financial company that has been designated as

systemically important by the Financial Stability Oversight

Council. As explained above, section 2(h)(7)(D) of the CEA

permits affiliates acting as an agent and on behalf of

entities eligible for the end-user exception to elect the

end-user exception themselves, unless the affiliate is one of

seven enumerated types of entities listed in section

2(h)(7)(D)(ii). Among others, these prohibited entities

include swap dealers, commodity pools, and bank holding

companies with over $50 billion in consolidated assets.

Market participants have pointed out that the fourth

condition for eligible treasury affiliate status provides a

list of entities that generally tracks the list in section

2(h)(7)(D)(ii), except for the addition of systemically

important nonbank financial companies. The Division believes

that additional restrictions relating to systemically

important nonbank financial companies are appropriate. As a

result, the Division is maintaining the requirement that the

treasury affiliate itself cannot be a systemically important

nonbank financial company. However, the Division

also recognizes that certain corporate families with

significant non-financial operations are precluded from

using the existing relief because of the affiliation with

a systemically important nonbank financial company,

regardless of the degree to which the operations of the

financial and non-financial entities are conducted

separately.

The Division believes restricting the treasury affiliate

from (i) entering into transactions with, or on behalf of, a

systemically important nonbank financial company and (ii)

providing any services, financial or otherwise, to such a

designated entity, provides sufficient protection from the

risks of systemically important affiliate, while allowing the

treasury affiliate to provide the necessary support to its

related operating entities. The Division is amending the

conditions relating to systemically important nonbank

financial companies accordingly.

iii. The requirement that treasury affiliates act only on

behalf of certain types of related affiliates.

Market participants have indicated that the definition of

``related affiliates'' under No-Action Letter 13-22

unnecessarily excludes certain entities that perform a cash

pooling function for a corporate family that includes a

financial entity. The definition of related affiliate

currently includes either: (i) a non-financial entity that

is, or is directly or indirectly wholly- or majority-owned

by, the ultimate parent; or (ii) a person that is another

eligible treasury affiliate for an entity described in (i).

Market participants claim that the limitation is

unnecessary, highlighting that the third General Condition to

the Swap Activity already precludes an eligible treasury

affiliate from entering into swaps with, and on behalf of,

its financial affiliates. The Division agrees the definition

is problematic because the collection and disbursement of

cash within the corporate family is a core function of a

treasury affiliate. Given the existing restrictions on swap

activity by the eligible treasury affiliate with or on behalf

of a financial affiliate, the Division has amended the

related affiliate definition to allow entities that provide

financial services on behalf of a financial entity to

nonetheless qualify as an eligible treasury affiliate.

iv. The requirement that treasury affiliates transfer the

risk of related affiliates through the use of swaps.

Market participants have expressed concern with the first

General Condition to Swap Activity in No-Action Letter 13-22.

The condition requires the eligible treasury affiliate enter

into the exempted swap for the sole purpose of hedging or

mitigating the commercial risk of one or more related

affiliates that was transferred to the eligible treasury

affiliate by operation of one or more swaps with such related

affiliates.

According to market participants, there are a number of

ways for commercial risk to be transferred between

affiliates, and that the risk that a treasury affiliate may

have been seeking to hedge or mitigate would not necessarily

be transferred from the operating affiliate to the treasury

affiliate by way of a swap transaction as required by No-

Action Letter 13-22. The method by which the risk is

transferred can be dependent on the type of risk being

hedged. For example, it may be more common for foreign

exchange risk to be transferred between affiliates through

the use of book-entry transfers, as opposed to interest rate

risk, where the use of back-to-back swaps may be more

prevalent. The Division agrees that this limitation is

unnecessarily strict and is revising the condition

accordingly. However, as the transfer of risk from the

related affiliate to the treasury affiliate will no longer be

evinced by back-to-back swaps, the Division will require that

the treasury affiliate be able to identify the related

affiliate or affiliates on whose behalf the swap was entered

into by the treasury affiliate.

v. The requirement that treasury affiliates do not enter

into swaps other than for hedging or mitigating the

commercial risk of one or more related affiliates.

Market participants have questioned whether an eligible

treasury affiliate would lose its status if the entity

entered into hedging transactions that were mitigating a

commercial risk of the treasury affiliate itself. The second

General Condition to the Swap Activity states that the

eligible treasury affiliate cannot enter into swaps with

related affiliates or unaffiliated counterparties other than

for the purposes of hedging or mitigating the commercial risk

of one or more related affiliates.

The Division agrees that a treasury affiliate should not

lose its status as an eligible treasury affiliate simply

because it entered into a hedging transaction on its own

behalf.

The Division is therefore amending the language in the second

condition to allow an eligible treasury affiliate to enter

into its own hedging transactions. However, the Division

notes that such transactions entered into by the eligible

treasury affiliate on its own behalf would not be ``exempted

swaps'' as defined below, and may be required to be cleared

if subject to the Commission's clearing requirement and no

other exception or exemption to clearing applied. Further,

the Division notes that treasury affiliates entering into any

speculative transaction, on its own behalf or otherwise,

would not be consistent with this condition.

vi. The requirement that related affiliates entering into

swaps with the treasury affiliate, or the treasury affiliate

itself, may not enter into swaps with or on behalf of any

affiliate that is a financial entity.

Market participants have expressed confusion as to whether

a related affiliate can enter into transactions with multiple

eligible treasury affiliates under the third General

Condition to the Swap Activity in No-Action Letter 13-22. The

third condition states that neither any related affiliate

that enters into swaps with the eligible treasury affiliate

nor the eligible treasury affiliate, may enter into swaps

with or on behalf of any affiliate that is a financial entity

(a ``financial affiliate''), or otherwise assumes, nets,

combines, or consolidates the risk of swaps entered into by

any financial affiliate.

After conversations with CFTC Chairman Massad and following this action by the regulator, I felt comfortable having H.R. 5471 be considered under a suspension of the House rules.

Now, I have heard from several companies that, while the CFTC's actions are welcome, they still need the legal certainty that only H.R. 5471 could provide.

On the other side, of course, I have heard concerns that if we pass this bill we may be binding the CFTC's hands to deal with a problem that could arise in the future.

I believe that people on both sides of this issue are working in good faith and want to help rebuild our economy. Again, I applaud Congresswoman Moore's efforts to improve this bill.

Mr. Speaker, I yield myself such time as I may consume.

I join my colleague, the gentleman from Missouri, in urging my colleagues to support H.R. 5471; however, before I get into why we should support the bill, I need to thank all of my partners in this effort.

As has been mentioned, Mr. Stivers has been fantastic throughout this entire process. I knew going into this that I had a great Republican partner. I can't say enough about Representative Stivers, but time will not allow me to do it.

I had another great bipartisan partner in Representative Gibson on the Agriculture Committee. Of course, it is always a joy to work with a good friend and colleague on the Ag Committee, Representative Marcia Fudge.

Mr. Speaker, H.R. 5471 is a true ``end users'' bill. The bill is targeted as it applies to centralized treasury centers, or CTUs, of nonfinancial end user companies.

The CTU model enables an end user corporation to efficiently centralize hedging risks for the entire consolidated corporate group, and it is, in fact, a corporate best practice. It permits companies to more efficiently hedge commercial business risk, which was always the intent of Dodd-Frank.

The CFTC agrees with the underlying policy of the bill as they have provided no-action relief on this point; however, H.R. 5471 is still needed because, as a practical matter, no-action relief is no substitute for statutory fixes as it creates legal uncertainty when deciding how to organize your global business structure.

Corporate boards may be hesitant to approve a decision, as they are required to do, that violates the law based only on an assurance that CFTC staff will not recommend enforcement. H.R. 5471 fixes the quirky result of treating companies that use a CTU model differently than companies that do not accomplish the same result.

The bill also solves another far more technical issue with the no- action relief that relates to CTUs issuing swaps as a principal, as opposed to as an agent.

There is simply no good reason to not address these issues. In fact, CTUs are considered a corporate best practice. I can offer you, Mr. Speaker, an example of one company in my district, MillerCoors. They summarized it best in written testimony before the House Financial Services Committee:

Though it may be tempting to view all derivatives as risky

financial products that were central to the credit crisis, we

must remember that these are important tools upon which

thousands of companies depend to manage risks in the real

economy.

Just remember that we all have companies in our districts that use swaps legitimately to mitigate risk. I urge all of my colleagues to support this important legislation.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield such time as she may consume to the gentlewoman from California, Ms. Maxine Waters, the ranking member of the committee.

Mr. Speaker, I am so delighted to yield 2 minutes to the gentleman from Minnesota (Mr. Peterson), the ranking member of the Ag Committee.

Mr. Speaker, I would now like to place the second half of the CFTC letter into the Record.

No-Action Letter 13-22 contemplated the use of multiple

eligible treasury affiliates within a corporate family, but

the Division agrees with market participants that the third

condition does not accurately reflect this. The Division is

accordingly amending the third condition to clarify that the

restriction on related affiliates and eligible treasury

affiliates from entering into swap transactions with

financial entity affiliates does not preclude the

circumstance where the financial entity affiliate is an

eligible treasury affiliate.

vii. The requirement for the payment obligations of the

treasury affiliate to be guaranteed.

Market participants expressed concern with respect to the

fifth General Condition to the Swap Activity in No-Action

Letter 13-22. The fifth condition states that the payment

obligations of the eligible treasury affiliate on the

exempted swap must be guaranteed by: (i) its non-financial

parent; (ii) an entity that wholly-owns or is wholly-owned by

its non-financial parent; or (iii) the related affiliates for

which the swap hedges or mitigates commercial risk.

Market participants have explained that corporate parents

and structures may avail themselves of other types of support

arrangements, such as keepwell agreements, letters of credit,

or revolving credit facilities for example, which would not

satisfy the requirements of No-Action Letter 13-22. As a

result, the Division is removing the condition to accommodate

the additional support arrangements that may exist with

regard to the eligible treasury affiliate's payment

obligations.

Division No-Action Position

The Division recognizes the benefits that arise from the

use of treasury affiliates within corporate groups and has

determined to provide the following no-action relief;

described below.

For purposes of this no-action letter only, the following

definitions shall apply:

Eligible treasury affiliate means a person that meets each

of the following qualifications:

(i) The person is (A) directly, wholly-owned by a non-

financial entity or another eligible treasury affiliate (its

``non-financial parent''), and (B) is not indirectly

majority-owned by a financial entity, as defined in section

2(h)(7)(C)(i) of the CEA;

(ii) The person's ultimate parent is not a financial entity

as defined in section 2(h)(7)(C)(i) of the CEA;

(iii) The person is a financial entity as defined in

section 2(h)(7)(C)(i)(VIII) of the CEA solely as a result of

acting as principal to swaps with, or on behalf of, one or

more of its related affiliates, or providing other services

that are financial in nature to such related affiliates;

(iv) The person is not, and is not affiliated with, any of

the following:

(A) a swap dealer;

(B) a major swap participant;

(C) a security-based swap dealer; or

(D) a major security-based swap participant.

(v) The person is not any of the following:

(A) a private fund as defined in section 202(a) of the

Investment Advisors Act of 1940 (15 U.S.C. Sec. 80-b-2(a));

(B) a commodity pool;

(C) an employee benefit plan as defined in paragraphs (3)

and (32) of section 3 of the Employee Retirement Income

Security Act of 1974 (29 U.S.C. Sec. 1002);

(D) a bank holding company;

(E) an insured depository institution;

(F) a farm credit system institution;

(G) a credit union;

(H) a nonbank financial company that has been designated as

systemically important by the Financial Stability Oversight

Council; or

(I) an entity engaged in the business of insurance and

subject to capital requirements established by an insurance

governmental authority of a State, a territory of the United

States, the District of Columbia, a country other than the

United States, or a political subdivision of a country other

than the United States that is engaged in the supervision of

insurance companies under insurance law.

(vi) The person does not provide any services, financial or

otherwise, to any affiliate that is a nonbank financial

company that has been designated as systemically important by

the Financial Stability Oversight Council.

Non-financial entity means a person that is not a financial

entity as defined in section 2(h)(7)(C)(i) of the CEA.

Related affiliate means with respect to an eligible

treasury affiliate:

(i) A non-financial entity that is, or is directly or

indirectly wholly- or majority-owned by, the ultimate parent;

or

(ii) A person that is another eligible treasury affiliate.

The Division will not recommend that the Commission

commence an enforcement action against an eligible treasury

affiliate for its failure to comply with the requirements

under section 2(h)(1)(A) of the CEA and part 50 of the

Commission's regulations to clear a swap with an unaffiliated

counterparty or another eligible treasury affiliate (the

``exempted swap'') that is subject to required clearing

pursuant to Sec. 50.4 of the Commission's regulations,

subject to the following conditions:

General Conditions to the Swap Activity

(i) The eligible treasury affiliate enters into the

exempted swap for the sole purpose of hedging or mitigating

the commercial risk of one or more related affiliates that

was transferred to the eligible treasury affiliate;

(ii) The eligible treasury affiliate does not enter into

swaps with its related affiliates or unaffiliated

counterparties other than for the purpose of hedging or

mitigating its own commercial risk or the commercial risk of

one or more related affiliates;

(iii) Neither any related affiliate that enters into swaps

with the eligible treasury affiliate nor the eligible

treasury affiliate, enters into swaps with or on behalf of

any affiliate that is a financial entity (``financial

affiliate''), or otherwise assumes, nets, combines, or

consolidates the risk of swaps entered into by any financial

affiliate, except in the case of financial affiliates that

qualify as eligible treasury affiliates under this letter;

and

(iv) Each swap entered into by the eligible treasury

affiliate is subject to a centralized risk management program

that is reasonably designed (A) to monitor and manage the

risks associated with the swap, and (B) to identify the

related affiliate or affiliates on whose behalf each exempted

swap has been entered into by the eligible treasury

affiliate.

Reporting Conditions

With respect to each swap that an eligible treasury

affiliate (``electing counterparty'') elects not to clear in

reliance on the relief provided in this letter, the reporting

counterparty, as determined in accordance with Sec. 45.8 of

the Commission's regulations, shall provide or cause to be

provided the following information to a registered swap data

repository or, if no registered swap data repository is

available to receive the information from the reporting

counterparty, to the Commission, in the form and manner

specified by the Commission:

(i) Notice of the election of the relief and confirmation

that the electing counterparty satisfies the General

Conditions to the Swap Activity of this no-action relief

specified above;

(ii) How the electing counterparty generally meets its

financial obligations associated with entering into non-

cleared swaps by identifying one or more of the following

categories, as applicable:

(A) A written credit support agreement;

(B) Pledged or segregated assets (including posting or

receiving margin pursuant to a credit support agreement or

otherwise);

(C) A written guarantee from another party;

(D) The electing counterparty's available financial

resources; or

(E) Means other than those described in (A)-(D); and

(iii) If the electing counterparty is an entity that is an

issuer of securities registered under section 12 of, or is

required to file reports under section 15(d) of, the

Securities Exchange Act of 1934:

(A) The relevant SEC Central Index Key number for such

counterparty; and

(B) Acknowledgment that an appropriate committee of the

board of directors (or equivalent body) of the electing

counterparty has reviewed and approved the decision to enter

into swaps that are exempt from the requirements of section

2(h)(1), and if applicable, section 2(h)(8) of the CEA.

(iv) If there is more than one electing counterparty to a

swap, the information specified in the Reporting Conditions

of this no-action relief specified above shall be provided

with respect to each of the electing counterparties.

(v) An entity that qualifies for the relief provided in

this no-action letter may report the information listed in

paragraphs (ii) and (iii) above, annually in anticipation of

electing the relief for one or more swaps. Any such reporting

under this paragraph will be effective for purposes of

paragraphs (ii) and (iii) above for 365 days following the

date of such reporting. During the 365-day period, the entity

shall amend the report as necessary to reflect any material

changes to the information reported.

(vi) Each reporting counterparty shall have a reasonable

basis to believe that the electing counterparty meets the

General Conditions to the Swap Activity for the no-action

relief specified above.

This no-action letter, and the positions taken herein,

represent the view of the Division only, and do not

necessarily represent the position or view of the Commission

or of any other office or division of the Commission. The

relief issued by this letter does not excuse the affected

persons from compliance with any other applicable

requirements contained in the CEA or in the Commission's

regulations issued thereunder. Further, this letter, and the

relief contained herein, is based upon the information

available to the Division. Any different or changed material

facts or circumstances might render this letter void. As with

all no-action letters, the Division retains the authority to,

in its discretion, further condition, modify, suspend,

terminate or otherwise restrict the terms of the no-action

relief provided herein. This letter supersedes No-Action

Letter 13-22.

Sincerely,

Phyllis Dietz,

Acting Director.

Mr. Speaker, I have no further requests for time.

Again, I just want to thank everyone who was involved in this process. This is something that is going to protect thousands of jobs across our country. People often criticize us for not doing things in a bipartisan manner, but I think this is exemplary of what we can do when we really work at it, even though it has taken a couple of years.

I yield back the balance of my time.

I thank Chairman Hastings for yielding.

Mr. Speaker, it is a great privilege to speak on my bill, H.R. 5742, the Soledad Canyon Settlement Act. I appreciate the opportunity to appear before the House, and I want to thank Speaker Boehner, Majority Leader McCarthy, and Chairman Hastings for their steadfast support of this legislation. Without their support, we wouldn't be standing here today on the floor with this bill.

I would also like to thank the gentlewoman from California, Senator Boxer, for her efforts in finding an agreeable solution for the inclusion of language that brought the score of the bill to zero. And I second the remarks of Chairman Hastings and hope that she will be able to bring this to a conclusion in the final days that the Senate is in session. One of the things that Senator Boxer added to this bill was introducing legislation that brought the cost of this bill to zero. Crossing that hurdle has moved us to this point now in solving this intractable issue.

Finally, I would like to thank the gentleman from California, Congressman Sherman, for his support of my legislation. I continue to believe in bipartisanship as the way to address critical issues for our constituents, and we have shown time and again that we can find common ground if we try.

Mr. Speaker, the Soledad Canyon mine, operated by CEMEX, is located just outside the city of Santa Clarita, California, in the 25th Congressional District that I have had the opportunity to represent now for the last 22 years. Under two current contracts held by CEMEX, they are authorized to extract approximately 56 million tons of sand and gravel over a 20-year period, with two 10-year contracts.

Residents of my congressional district and city leaders have been expressing their concerns for the past 24 years about a large mine operating in close proximity to where they live. And, as the chairman mentioned, this has become much closer over the years. They fear the effects of pollution, increased truck traffic, and environmental health issues on their families and the community. Throughout my 22 years in Congress, I have worked endlessly to find a solution. I have engaged with civic leaders, residents of my district, environmental leaders, the county of Los Angeles, CEMEX, BLM, the Department of the Interior, Chairman Hastings, and the leadership of our conference.

Mr. Speaker, allow me to give just a bit of background on the situation that has arisen in my district. In 1990, two privately held valid Federal contracts were awarded to Transit Mixed Concrete. Southdown, the parent company of Transit Mixed Concrete, was acquired by CEMEX in 2000, resulting in CEMEX holding the Federal contracts.

The Bureau of Land Management approved a mining plan of operations and prepared a draft environmental impact statement with respect to the Soledad Canyon mine, which was released on May 6, 1999. The environmental impact statement was subsequently modified to address the growing concerns among Santa Clarita residents about the impact that mining operations in Soledad Canyon have on air quality and health, truck traffic, and declining property values in Santa Clarita. The final environmental impact statement was released to the public on June 2, 2000, with a list of eight alternatives for mining the Soledad Canyon site.

Under the California Environmental Quality Act, the county of Los Angeles

completed the environmental impact report in 2001 and subsequently voted in 2002 to deny the permit, citing the right and responsibility of the county to impose reasonable environmental and resource protection and regulation on mining in Soledad Canyon.

Numerous lawsuits were filed between 2002 and 2004 involving the city of Santa Clarita, the county of Los Angeles, the Center for Biological Diversity, and CEMEX. A consent degree resulted from the settlement of CEMEX, Inc. v. County of Los Angeles in 2004. The consent decree contains the mitigation agreement between CEMEX and the county of Los Angeles, which lists 40 conditions that CEMEX is required to meet in order to mitigate the environmental, health, traffic, endangered species, and safety concerns raised by the county, local residents, and the city of Santa Clarita.

Mr. Speaker, as I mentioned before, I have worked throughout my entire congressional career to bring all parties together to work out a deal that is mutually beneficial. I have introduced eight bills on this issue over the years, each of which took a different approach to dealing with the mine as new issues arose.

In the 106th Congress, I introduced H.R. 3060, which would have withdrawn specified lands from the operation of Federal mining and mineral leasing laws and would have nullified any existing permits issued on those lands. The same bill was introduced as H.R. 679 in the 107th Congress. In the 108th Congress, I introduced H.R. 3529, the Soledad Canyon Mine Lease Cancellation Act. This legislation would have canceled the two mining permits for the Soledad Canyon mine and would have prohibited the Secretary of the Interior from issuing permits for mining above historical levels in Soledad Canyon.

In the 109th Congress, I introduced H.R. 5471, the Soledad Canyon Mine Leases Adjustment Act. This legislation would have canceled the two mining permits for the Soledad Canyon mine, directed the Secretary of the Interior to provide additional financial and mineral production opportunities in exchange for the economic value invested to that date on the two permits, and would have prohibited the Secretary of the Interior from issuing permits for mining above historical levels in Soledad Canyon.

In the 110th Congress, I introduced H.R. 5887, the Soledad Canyon Mine Act. This legislation would have authorized the Secretary of the Interior to cancel the two mining contracts, prohibited future mining in Soledad Canyon, provided a means for CEMEX to recover just compensation for the cancelation of the contracts, provided the Bureau of Land Management with the necessary tools to verify the expenses incurred by CEMEX, provided relief to CEMEX for such expenses, and provided for a dispute resolution process.

In the 111th Congress, I introduced H.R. 4332, the Soledad Canyon High Desert, California Public Lands Conservation and Management Act of 2009. This legislation had a similar set of actions as H.R. 5887, but added two notable ones: it provided a mechanism to offer for sale, by competitive bidding, lands identified for disposition near Victorville, California; and to acquire environmentally-sensitive land and collect the proceeds of the sale of lands near Victorville, California.

Finally, in the 112th Congress, I introduced H.R. 6469, the Soledad Canyon Mine Mitigation and Relocation Act of 2012. This legislation would have begun a study of the legal and administrative steps-- including obtaining sufficient funding--necessary to carry out the goals of the Soledad Canyon High Desert, California Public Lands Conservation and Management Act of 2009, H.R. 4332.

I mention each of these in order to illustrate how the tug and pull of all parties influenced the legislative process. Each party gave ideas to further perfect legislation that would finally solve this vexing issue that affects the residents of my district.

I believe because of all our joint efforts, we have reached a critical mass on this issue. It is time for a solution once and for all. I am looking forward to the full House acting on H.R. 5742 today, a solution that would take the mine out of commission and lift this two decades' long burden off the backs of my constituents.

This is a solution borne from the great compromise between the city of Santa Clarita and CEMEX, who each offered to put up the difference in cost to bring the cost of the bill to zero. This zero score is critical to the bill's success and couldn't have been achieved without the partnership that has developed over the many years of action on this matter.

The bill achieves all the aims of my previous legislation, particularly H.R. 4332, with the solution to the vexing issue of how to ensure there is no cost to the Federal Government.

Mr. Speaker, I urge my colleagues to support this legislation. I thank the gentleman again for allowing me the time to explain this critical issue in my district and thanks again to our House leadership and Chairman Hastings for bringing this legislation to the floor.

Mr. Speaker, I would like to thank the gentleman from Missouri for yielding me time.

I also would like to thank the gentlelady from Wisconsin (Ms. Moore) for all her work on this bill. She has been dedicated and engaged and hardworking and willing to compromise to move this effort forward to help a lot of Main Street businesses that are in my district, her district, and that dot the map of America.

I also want to thank Ms. Fudge and Mr. Gibson for their collaborative efforts and their work through the Agriculture Committee on this bill as well.

Mr. Speaker, this bill is the culmination of over 2\1/2\ years' work. In 2012, Ms. Moore, Ms. Fudge, Mr. Gibson, and I joined together to introduce legislation that clarified rules under the Dodd-Frank Act with regard to margin clearing and reporting requirements of interaffiliate transactions. What that means is a lot of Main Street businesses in various industries, from agriculture to consumer products, that work across international boundaries use this central treasury unit structure to offset competing or offsetting risks, and that way they can decide what their total aggregate risk is and then make it much more affordable for a corporation.

Unfortunately, under the Dodd-Frank Act and the way the rules were interpreted by the Commodity Futures Trading Commission, these companies were being charged double or triple the cost by imposing these central clearing unit ways of managing risk. It just didn't make sense, and it actually cost them more money. These companies did not add systemic risk, and that is what the rules on swaps were all about is to make sure we reduce systemic risk. These companies are using these swaps to offset risk to their company and their operating risks, and so this is a commonsense piece of legislation. In fact, Barney Frank, the author of the Dodd-Frank legislation, spoke in favor of this when he was the ranking member in the last Congress.

Unfortunately, there was no activity on the bill in the last Congress, and over the last 2 years both the Securities and Exchange Commission and the CFTC have worked with us--with Ms. Moore and me--on these rules. They have done a pretty good job in that regard, but there is more to be done because their rules left out the folks that use these centralized treasury units as a specific business model. Just last month, in fact, the CFTC published a no-action letter that Ms. Moore referred to; but a no-action letter means that it is still part of the law, we are just not going to enforce the law.

What we need to do is fix the law. It is really common sense. So this bill that Ms. Moore introduced fixes the law for that centralized treasury unit way of doing business. It makes sense. It does not add any risk to the system, and it allows these companies that are all over America to manage their risk in a smarter way without being charged two or three times as much and without risking that they are violating the law, even though it is not going to be enforced.

So I applaud the gentlelady from Wisconsin for changing the law, fixing the law, and making it work for a lot of small, medium, and even large businesses across America so they can use their cash to hire Americans in this tough time, and hire more Americans and not waste it on unneeded cost that does not provide any safety to anyone.

I want to thank the gentlelady from Wisconsin as well as the gentleman from New York and the gentlelady from Ohio for all their work, and I was proud to be a small part of this.

I would urge my colleagues to support this bill.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 5742) to provide to the Secretary of the Interior a mechanism to cancel contracts for the sale of materials CA- 20139 and CA-22901, and for other purposes.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days to revise and extend their remarks and include extraneous materials on the bill under consideration.

I yield myself as much time as I may consume.

Mr. Speaker, we are here today to address the Soledad Canyon Settlement Act, H.R. 5742, as introduced by our colleague from California (Mr. McKeon). This bipartisan bill will solve a longstanding controversy surrounding a pair of sand and gravel leases located near the community of Santa Clarita, California.

In 1990, the Bureau of Land Management, or BLM, issued two leases for sand and gravel mines to CEMEX. At the time, this area was much more remote than it is today. As CEMEX was preparing a plan of operation, it became clear to all parties involved that local community development had made the project incompatible with the local community. Local community leaders, the region's congressional delegation, and the company have all worked for more than a decade to find a legislative solution to make the company and Federal Government whole while returning the lease to the Federal Government.

As a result, we are here today to move forward with a plan to cancel these leases while at the same time making both the contract holder and the Federal Government whole. This legislation has the strong support of State and local communities, the contract holder, and the regional congressional delegation.

Now while this bill has just recently been introduced, it is the product of years of hard work and careful communication and review by the committee. The gentleman from California (Mr. McKeon) has been a tireless advocate on behalf of his local communities. He has demonstrated patience and diligence in pursuing a workable solution that the Congress can successfully act upon. I am confident that the community of Santa Clarita already knows just how fortunate they have been to have had Mr. McKeon as their Congressman for 11 terms.

Now, it is also my understanding, Mr. Speaker, that the gentlewoman from California, Senator Boxer, shares Mr. McKeon's commitment to this legislation, and I hope that she will be able to follow his lead before the end of this Congress by shepherding this bill through the Senate. This bill deserves the support of both the House and the Senate.

With that, I reserve the balance of my time.

Mr. Speaker, I am very pleased to yield such time as he may consume to the gentleman from California (Mr. McKeon), the author of this legislation, the chairman of the Armed Services Committee.

Mr. Speaker, I yield myself the balance of the time.

Mr. Speaker, as Mr. McKeon pointed out, this has been a long process for a vexing problem in Santa Clarita, and Mr. Sherman pointed out very well that Mr. McKeon is to be commended for this, and this would be kind of the capstone on the career that he has.

All that is left if this House adopts this measure is very simply for the other body to take it up, and with the interests that Senator Boxer has shown on this issue, I hope that she can

move this legislation through the Senate.

With that, Mr. Speaker, I urge adoption, and I yield back the balance of my time.