Rep. Austin Scott, Chairman of the House Agriculture Committee's Subcommittee on Horticulture, Research, Biotechnology and Foreign Agriculture, held a public hearing to review the impact of enforcement activities by the U.S. Department of Labor (DOL) on specialty crop growers. Specifically, Subcommittee Members addressed growing concerns that DOL is using the "Hot Goods" provision under the Fair Labor Standards Act of 1938 (FLSA) in an arbitrary manner against producers of perishable agricultural commodities without regard for the inevitable destruction of the product and significant economic hardship inflicted on farmers and their employees.
House Passes Commodity Futures Trading Commission Reauthorization
WASHINGTON, D.C. – Today the House passed the Commodity Futures Trading Commission (CFTC) Reauthorization Act of 2005, H.R. 4473, by unanimous consent. The CFTC Reauthorization was introduced by House Committee on Agriculture Chairman Bob Goodlatte and passed by the Committee last week. H.R. 4473 includes provisions to remedy regulatory issues left unresolved following the enactment of Commodity Futures Modernization Act (CFMA) or have arisen recently regarding futures market volatility and increasing market prices in natural gas markets.
“The legislation will provide additional tools for the CFTC and the self-regulatory organizations under its purview to police the markets and bring enforcement actions for fraudulent business practices aimed at the unsuspecting public,” said Chairman Goodlatte in his floor statement.
The natural gas provision clarifies the surveillance and record keeping authorities of CFTC to better ensure the transparency of the natural gas futures markets. This provision charges the CFTC with preventing and detecting manipulation of the natural gas markets, outlines increased record keeping requirements for large traders operating on the exchanges, and increases the civil and criminal penalties for violations.
“I believe this legislation is sound policy that will provide to consumers and end users who use natural gas for manufacturing purposes a high level of confidence that the federal government is watching the natural gas markets and is prepared, if necessary, to take action to enforce the Commodity Exchange Act,” said Chairman Goodlatte.
The CFTC Reauthorization Act of 2005:
• Clarifies CFTC’s authority over agreements, contracts or transactions in foreign currency.
• Expands CFTC’s antifraud authority to include principals. This language will provide CFTC with the authority to pursue principals as well as their agents in the event of fraud.
• Requires the Securities and Exchange Commission (SEC) and CFTC to develop a regulatory division of authority to authorize risk-based portfolio margining for security options and security futures products by September 30, 2006 and authorize the trading of certain debt and foreign security indexes by June 30, 2006.
• Authorizes appropriations through fiscal year 2010.
• Requires the CFTC to find and stop manipulation in natural gas pricing and increase transparency through surveillance of natural gas trading.
• Requires anyone trading natural gas futures or options at reportable levels to maintain records on those futures or options as well as any related contract, agreement or transaction in natural gas for five years.
• Increases criminal and civil penalties for manipulation of natural gas markets.