BPLA (Contents)
Budget Process Law Annotated (1993)
Budget Enforcement Act of 1990
TITLE XIII — BUDGET ENFORCEMENT
Subtitle E – Government-sponsored Enterprises
[Pages 771-780]
SEC. 13501. financial safety and soundness of government-sponsored enterprises.1836
[P. 772]
(a) Definition.—For purposes of this section, the terms “Government-sponsored enterprise’ and “GSE” mean the Farm Credit System (including the Farm Credit Banks, Banks for Cooperatives, and Federal Agricultural Mortgage Corporation), the Federal Home Loan Bank System, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, and the Student Loan Marketing Association.1837
1836. The statement of managers accompanying the conference report on the Budget Enforcement Act of 1990 explain the state of the law prior to enactment of that Act:
viii. government sponsored enterprises
Current Law
Congress has created several Government-sponsored enterprises or GSEs to help make credit more reliably available to farmers, homeowners, colleges, and students. Through federal charters provided in statute, GSEs are privately owned and operated, limited in their activities to specific economic sectors, and given certain benefits that help them accomplish their goals.
Due to the public missions described in the charters of these entities, the Government does have an interest in the activities of the GSEs. While there is no explicit Federal backing for the GSEs, in 1987, the Government infused significant additional resources into the Farm Credit System when the system had financial difficulties. This Government financial assistance to a GSE and the problems of the Savings and Loan sector have generated increased interest in Congressional oversight of the GSEs.
H. Rep. 101-964 (Conference Report, p. 1166), 101st Cong., 2d Sess. 1166 (1990), reprinted in 1990 U.S.C.C.A.N. 2017, 2871.
The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) mandated studies of Government-sponsored enterprises by the Secretary of the Treasury and the Comptroller General. Financial Institutions Reform, Recovery, and Enforcement Act of 1989, Pub. L 101-73, §§ 1004, 1404, 103 Stat. 183, 509-11, 551-53 (1989). These studies helped to motivate the discussions that led to this title of the Budget Enforcement Act of 1990. See U.S. Dept. of the Treasury, Report of the Secretary of the Treasury on Government-Sponsored Enterprises (May 31,1990); U.S. General Accounting Office, Government-Sponsored Enterprises: The Government’s Exposure To Risk (Aug. 15, 1990) (GAO Rep. GAO/GGD-90-97).
1837. Note that section 3(8) of the Congressional Budget Act provides a different definition of “Government-sponsored enterprise” for the purposes of that Act. See supra pp. 17-18. (Section 13112(a)(2)(A) of the Budget Enforcement Act of 1990 amended section 3(8) to read as it does now. See supra p. 708.)
The statement of managers accompanying the conference report on the Budget Enforcement Act explains this subsection:
House bill
Section 13501(a), of the House bill defined GSEs for this legislation to include the Farm Credit System (including Farm Credit Banks, Banks for Cooperatives, Federal Agricultural Mortgage Corporation, and the Farm Credit Insurance Corporation) the Federal Home Loan Bank System, the Federal Home Loan Mortgage Corporation, the Federal National Mortgage Association, and Student Loan Marketing Association.
Senate amendment
The Senate had no similar provision.
Conference report
The conference report adopts the House language except that it deletes the reference to the Farm Credit Insurance Corporation which is an on-budget entity.
H. Rep. 101-964 (Conference Report, p. 1166), 101st Cong., 2d Sess. 1166 (1990), reprinted in 1990 U.S.C.C.A.N. 2017, 2871.
(b) Treasury Department Study And Proposed Legislation.—
(1) The Department of the Treasury shall prepare and submit to Congress no later than April 30, 1991, [p. 773] a study of GSEs and recommended legislation.
(2) The study shall include an objective assessment of the financial soundness of GSEs, the adequacy of the existing regulatory structure for GSEs, the financial exposure of the Federal Government posed by GSEs, and the effects of GSE activities on Treasury borrowing.1838
1838. The statement of managers accompanying the conference report on the Budget Enforcement Act explains this subsection:
House bill
Subsection (b) mandates a Treasury study on the financial safety and soundness of GSEs, the adequacy of the existing regulatory structure for GSEs, and the financial exposure of the Federal Government posed by GSEs. The Department of the Treasury shall prepare and submit to Congress no later than April 30, 1991, a study of GSEs and recommended legislation.
Senate amendment
Section 12254(a)(1) of the Senate amendment contained an essentially identical provision.
Conference Report
The conference report accepts the House provision but expands the scope of the Treasury study to analyze the impact of GSE activities on Treasury borrowing.
H. Rep. 101-964 (Conference Report, p. 1166), 101st Cong., 2d Sess. 1166 (1990), reprinted in 1990 U.S.C.C.A.N. 2017, 2871.
On April 29, 1991, the Secretary of the Treasury submitted the study for which this subsection called. See U.S. Dept. of the Treasury, Report of the Secretary of the Treasury on Government-Sponsored Enterprises (April 1991).
(c) Congressional Budget Office Study.—
(1) The Congressional Budget Office shall prepare and submit to Congress no later than April 30, 1991, a study of GSEs.
(2) The study shall include an analysis of the [p. 774] financial risks each GSE assumes, how Congress may improve its understanding of those risks, the supervision and regulation of GSEs’ risk management, the financial exposure of the Federal Government posed by GSEs, and the effects of GSE activities on Treasury borrowing. The study shall also include an analysis of alternative models for oversight of GSEs and of the costs and benefits of each alternative model to the Government and to the markets and beneficiaries served by GSEs.1839
1839. The statement of managers accompanying the conference report on the Budget Enforcement Act explains this subsection:
House bill
Subsection (c) mandates a Congressional Budget Office study on GSEs due to Congress no later than April 30, 1991. The study will includes an analysis of the financial risks each GSE assumes, how Congress may improve its understanding of those risks, the supervision and regulation of GSEs’ risk management, and the financial exposure of the Federal Government posed by GSES. The study will also include an analysis of alternative models for oversight of GSEs of the costs and benefits of each alternative model to the Government and to the markets and beneficiaries served by GSEs.
Senate amendment
The Senate amendment contains a mandate for a similar study.
Conference report
The conference report accepts the House language with the scope expanded to include an analysis of the effects of GSE activities on Treasury borrowing.
H. Rep. 101-964 (Conference Report, p. 1166), 101st Cong., 2d Sess. 1166 (1990), reprinted in 1990 U.S.C.C.A.N. 2017, 2871.
On April 29, 1991, the Secretary of the Treasury submitted the study for which this subsection called. See U.S. Dept. of the Treasury, Report of the Secretary of the Treasury on Government-Sponsored Enterprises (April 1991).
(d) Access To Relevant Information.—
(1) For the studies required by this section, each [p. 775] GSE shall provide full and prompt access to the Secretary of the Treasury and the Director of the Congressional Budget Office to its books and records and other information requested by the Secretary of the Treasury or the Director of the Congressional Budget Office.
(2) In preparing the studies required by this section, the Secretary of the Treasury and the Director of the Congressional Budget Office may request information from, or the assistance of, any Federal department or agency authorized by law to supervise the activities of a GSE.1840
1840. The statement of managers accompanying the conference report on the Budget Enforcement Act explains this subsection:
House bill
Section (d) provides the Treasury and the CEO full access to OSE books and records and other information as requested by the Secretary of the Treasury or the Director of the Congressional Budget Office. This subsection also allowed the Secretary of the Treasury and the Director of the Congressional Budget Office to request information from, or the assistance of4 any Federal department or agency authorized by law to supervise the activities of a GSE.
Senate amendment
The Senate amendment contains essentially the same provision.
Conference report
The conference report adopts the House language.
H. Rep. 101-964 (Conference Report, p. 1166), 101st Cong., 2d Sess. 1166 (1990), reprinted in 1990 U.S.C.C.A.N. 2017, 2872.
(e) Confidentiality of Relevant Information.1841—
[P. 776]
(1) The Secretary of the Treasury and the Director of the Congressional Budget Office shall determine and maintain the confidentiality of any book, record, or information made available by a GSE under this section in a manner consistent with the level of confidentiality established for the material by the GSE involved.
(2) The Department of the Treasury shall be exempt from section 552 of title 5, United States Code, for any book, record, or information made available under subsection (d) and determined by the Secretary of the Treasury to be confidential under this subsection.
(3) Any officer or employee of the Department of the Treasury shall be subject to the penalties set forth in section 1906 of title 18, United States Code, if—
(A) by virtue of his or her employment or official position, he or she has possession of or access to any book, record, or information made available under and determined to be confidential under this section; and
(B) he or she discloses the material in any manner other than—
(i) to an officer or employee of the Department of the Treasury; or
(ii) pursuant to the exception set forth in such section 1906.
(4) The Congressional Budget Office shall be exempt from section 203 of the Congressional Budget Act of 1974 with respect to any book, record, or information made available under this subsection and determined by the [p. 777] Director to be confidential under paragraph (1).1842
1842. The statement of managers accompanying the conference report on the Budget Enforcement Act of 1990 explains this subsection:
House bill
Subsection (e) provides for the confidentiality of the information provided to Treasury and the Congressional Budget Office. The House bill requires the Secretary of the Treasury and the Director of the Congressional Budget Office to determine and maintain the confidentiality of any book, record, or information made available by a GSE, consistent with the level of confidentiality established by the GSE involved. The Department of the Treasury and the Congressional Budget Office were made exempt from Freedom of Information Act requirements for the purpose of this Act.
Finally, an officer or employee of the Department of the Treasury or the Congressional Budget Office were made subject to the penalties set forth in section 1906 of title 18, United States Code, if, by virtue of his or her employment or official position, he or she has possession of or access to any book, record, or information made available under and determined to be confidential under this section and if he or she discloses the material in any manner other than to an officer or employee of the Department of the Treasury Congressional Budget Office or pursuant to the exceptions set forth in such section 1906.
Senate amendment
The Senate amendment contained (at 12254(a)(C)) essentially similar language to the House bill except that the Senate provided a separate standard of confidentiality for the Congressional Budget Office (at 12254(b)) that did not impose the penalties contemplated by the House bill.
Conference report
The conference report adopted the House language with respect to Treasury confidentiality and the Senate language with respect to CBO confidentiality requirements.
H. Rep. 101-964 (Conference Report, p. 1166), 101st Cong., 2d Sess. 1166 (1990), reprinted in 1990 U.S.C.C.A.N. 2017, 2872-2873.
(f)1843 Requirement to Report Legislation.—
(1) The committees of jurisdiction in the House shall prepare and report to the House no later than September 15, 1991, legislation to ensure the financial soundness of GSEs and to minimize [p. 778] the possibility that a GSE might require future assistance from the Government.
(2) It is the sense of the Senate that the committees of jurisdiction in the Senate shall prepare and report to the Senate no later than September 15, 1991, legislation to ensure the financial safety and soundness of GSEs and to minimize the possibility that a GSE might require future assistance from the Government.1844
1843. Note that section 13501 has two subsections (f) here and infra p. 779.
1844. The statement of managers accompanying the conference report on the Budget Enforcement Act of 1990 explains this subsection:
House bill
Subsection (f) put into statutory language the requirement that the committees of jurisdiction in the House and Senate prepare and report legislation to ensure the financial soundness of GSEs and to minimize the possibility that a OSE might require future assistance from the Government no later than September 15, 1991.
Senate amendment
Beginning at subsection (a), the Senate amendment Incorporates a sense of the Congress resolution that the appropriate committees of jurisdiction will study the Administration’s proposals with respect to GSFs and report legislation by September 15, 1991. Committee legislation will ensure the financial safety and soundness of the GSEs The sense of the Congress resolution states that if the appropriate committees of jurisdiction failed to act, the Senate will consider GSE legislation on the floor. The sense of the Congress language was intended to be advisory and not binding on the Committees or the leadership if intervening events next year prevented such consideration.
Conference report
The conference adopts the House language with respect to consideration of legislation by the appropriate committees of jurisdiction. However, the conference decides to make the statutory nature of the House language apply only to the House, while the Senate will retain the language in the form of a sense of the Senate resolution. This language intends to provide impetus for Senate action. The conference report also drops the original Senate language that referred to floor action.
[…]
Section 13501() of the bill requires the committees of jurisdiction in the House and Senate to report legislation to ensure the financial soundness of government sponsor enterprises by September 15, 1991. If such legislation is not reported, it is the intent of the conferees that the Leadership of the House and Senate ensure that, by the end of the first session of the 102nd Congress, there is consideration of, and a vote on, legislation the Administration may submit on the financial soundness of GSEs.
The conferees intend that nothing in subtitle E be construed as changing the existing committee jurisdictions with regard to government- sponsored enterprises.
H. Rep. 101-964 (Conference Report, p. 1166), 101st Cong., 2d Sess. 1166 (1990), reprinted in 1990 U.S.C.C.A.N. 2017, 2873-2874.
[P. 779]
(f) [(g)]1845 President’s Budget.—The President’s annual budget submission shall include an analysis of the financial condition of the GSEs and the financial exposure of the Government, if any, posed by GSEs.1846
1845. Note that section 13501 has two subsections (f), here and supra p. 777.
1846. The statement of managers accompanying the conference report on the Budget Enforcement Act of 1990 explains this subsection:
Conference report
[…]
The conference report also adopts a provision that was not contained in either bill, requiring the President’s budget to analyze and discuss the financial condition of the GSEs, and the financial exposure of the Federal Government, if any, posed by the GSEs.
H. Rep. 101-964 (Conference Report, p. 1166), 101st Cong., 2d Sess. 1166 (1990), reprinted in 1990 U.S.C.C.A.N. 2017, 2873.
[P. 780 is blank]
Counsel Notes
The current section is section 13501 (BEA 1990).
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