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# Legislative Bulletin..........................................\..........September 19, 2007

**Contents:**

> H.R. 2761---Amendments to the Terrorism Risk Insurance Revision and
> Extension Act

H.R. 2761, the Terrorism Risk Insurance Revision and Extension Act
(sponsored by Rep. Michael Capuano, D-MA), is scheduled to be considered
on the House floor on Wednesday, September 19, 2007, subject to a
structured rule ([**H.Res.
660**](http://thomas.loc.gov/cgi-bin/query/z?c110:H.Res.660:)),
self-executing (i.e. automatically passing) one amendment and making in
order the following two amendments, each debatable for 10 minutes.

The rule waives all points of order against consideration of the bill,
except those regarding PAYGO and earmarks, waives all points of order
against the bill itself, and allows the Chair to postpone consideration
of the legislation at any time during its consideration. The rule allows
one motion to recommit with or without instructions.

[Note]{.underline}: The summaries below are based on RSC staff's review
of *actual amendment text*. For a summary of the underlying bill, see a
separate RSC document released yesterday.

**RSC Staff Contact**: Paul Teller; <paul.teller@mail.house.gov>;
202-226-9718

**SELF-EXECUTING AMENDMENT**

The self-executing amendment (i.e. the amendment that automatically
passes when the rule itself passes) would technically bring the
underlying bill into compliance with PAYGO requirements, as confirmed by
CBO. Specifically, the amendment:

-   Requires the enactment of a joint resolution of approval (of a
    certification by the Secretary of Treasury, in concurrence with the
    Secretaries of State and Homeland Security, as well as the Attorney
    General that there has been a covered act of terrorism) before any
    TRIA compensation could be paid;

-   Provides for expedited procedures for the consideration of the joint
    resolution in the House and Senate;

-   Provides that, in instances when such a joint resolution is not
    approved, an insurer's financial responsibility for insured losses
    from the applicable act of terrorism would be limited to the
    insurer's deductible (and authorizes insurers to write this
    stipulation into their policies);

-   Provides that any lawsuits arising from failure to approval a joint
    resolution would have to be brought in federal court (and any
    pending state-level cases would be removed to federal court); and

-   Makes several conforming technical changes.

**[BUDGET GIMMICK ALERT:]{.underline}** Many conservatives may regard
this self-executing amendment as a budget gimmick to mask real spending
and circumvent PAYGO rules. This joint resolution procedure will not
save any real money (if the resolution is approved), despite the
on-paper appearance in the revised CBO score, and will add further
uncertainty to the terrorism insurance market. Insurers may find it
difficult to write terrorism insurance policies when they do not know
whether federal reinsurance exists or does not exist---and when such
reinsurance may vary depending on the terrorist attack and on political
situations in Washington.

The Administration, in its [Statement of Administration Policy for H.R.
2761](http://www.whitehouse.gov/omb/legislative/sap/110-1/hr2761sap-r.pdf),
also opposed any attempt to "get around" the mandatory spending in this
bill: "Nor would the costs of this bill be diminished by a requirement
that Congress vote to release funds after a terrorist event has
occurred. The Administration strongly opposes the use of any such
gimmicks to mask the true cost of the legislation and circumvent budget
rules."

**AMENDMENTS MADE IN ORDER**

**1. *Frank (D-MA):*** Manager's Amendment. This amendment would:

-   Clarify the certification process for acts of NBCR *(*nuclear,
    biological, chemical, or radiological) terrorism;

-   Apply the deductible reset mechanism (whereby a \$1 billion event
    would reduce deductibles to 5% of premiums plus
    half-percentage-point increases every year thereafter) to the NBCR
    deductible, beginning in the fifth program-year after enactment of
    this bill);

-   Provide that the Consumer Price Index for All Urban Consumers
    (CPI-U) would be used to calculate the inflation adjustments in the
    underlying bill; and

-   Make technical and conforming changes.

>  

**2. Pearce (R-NM):** Changes the increment of increase in the
deductible rest mechanism (whereby a \$1 billion event would reduce
deductibles to 5% of premiums plus half-percentage-point increases every
year thereafter) to one percentage-point.