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# Legislative Bulletin...........................................June 27, 2006

> **Contents:**
>
> **H.R. 42** --- Freedom to Display the American Flag Act of 2005
>
> **H.R. 5341** --- Seasoned Customer CTR Exemption Act of 2006
>
> **H. Res. 854** -- Recognizing National Homeownership Month and the
> importance of homeownership in the United States

H.R. 42 --- Freedom to Display the American Flag Act of 2005 --- *as
introduced* (Bartlett, R-MD)

**[Order of Business]{.underline}:** The bill is scheduled for
consideration on Tuesday, June 27, 2006, under a motion to suspend the
rules and pass the bill.

**[Summary]{.underline}:** H.R. 42 stated purpose is to "ensure that the
right of an individual to display the flag of the United States on
residential property not be abridged." The bill would prohibit
condominium associations, cooperative associations, or residential real
estate management associations from adopting or enforcing any policy
that would restrict or prevent a member of the association from
displaying the United States Flag on their residential property within
the association.

The bill also states that nothing in the Act shall be considered to
permit any display or use that is inconsistent with 1) federal law (Ch.
1, Title 4, U.S.C.), or any rule or custom pertaining to the proper
display or use of the U.S. Flag, or 2) any "reasonable restriction"
pertaining to the time, place, or manner of displaying the flag
necessary to protect a substantial interest of the condominium,
cooperative, or residential real estate management association.

**[Committee Action]{.underline}:** H.R. 42 was introduced on January 4,
2005, and referred to the Committee on Financial Services' Subcommittee
on Housing and Community Opportunity, which took no official action.

**[Cost to Taxpayers]{.underline}:** A CBO score of H.R. 42 is
unavailable, but the bill does not authorize new expenditures.

**[Does the Bill Expand the Size and Scope of the Federal
Government?]{.underline}:** No.

**[Does the Bill Contain Any New State-Government, Local-Government, or
Private-Sector Mandates?]{.underline}:** No.

**[Constitutional Authority]{.underline}:** A committee report citing
constitutional authority is unavailable.

House Rule XIII, Section 3(d)(1), requires that all committee reports
contain "a statement citing the *specific* powers granted to Congress in
the Constitution to enact the law proposed by the bill or joint
resolution." *\[emphasis added\]*

**[RSC Staff Contact]{.underline}:** Derek V. Baker;
[derek.baker@mail.house.gov](mailto:Derek.baker@mail.house.gov);
202-226-8585

H.R. 5341 --- Seasoned Customer CTR Exemption Act of 2006 --- *as
reported* (Bachus, R-AL)

**[Order of Business]{.underline}**: The bill is scheduled for
consideration on Tuesday, June 27, 2006, under a motion to suspend the
rules and pass the bill.

**[Summary]{.underline}**: H.R. 5341 would allow the Secretary of the
Treasury to promulgate revised rules for allowing financial institutions
to acquire exemptions from filing Currency Transaction Reports (CTR) on
certain transactions by "seasoned customers."

***[Section 2(a) Findings.]{.underline}*** The bill finds that:

-   "the current reporting requirements, "pose a compliance burden on
    the financial industry."

-   some reports may not be relevant to combating financial crimes,
    including money laundering and financing of terrorism.

-   an exemption from certain reporting requirements would continue to
    aid in prosecuting financial crimes while lowering the burdens to
    the financial industry.

-   the financial industry is not capitalizing on the current exemptions
    because the filing process in overly burdensome.

-   exemptions do not affect the "requirements for depository
    institutions to apply the full range of anti-money laundering
    controls."

***[Section 2(b) Seasoned customer exemption.]{.underline}***

-   Amends 31 U.S.C. section 5313(e) to give "qualified customer" a
    meaning that the Secretary of the Treasury determines; and includes
    a U.S. corporation, has maintained a deposit account with the
    institution for 12 months, and has engaged in multiple transactions
    that are subject to the current reporting requirements.

-   Additionally, 31 U.S.C. 5313(e) is amended to allow the Secretary of
    the Treasury to promulgate rules to exempt any financial institution
    from filing reports with a "Qualified Customer."

-   Under the bill, the financial institution must, "file a 1-time
    notice of designation of exemption for each qualified customer."

-   The bill allows the Secretary to, "suspend, reject, or revoke any
    qualified customer exemption notice."

***[Section 2(c) 3-year Review and Report.]{.underline}*** Requires the
Secretary to "evaluate the operations and effect of the provisions of
the amendment" within 3 years of the bill's passage.

***[Section 3 Periodic Review of Reporting Threshold and Adjustment for
Inflation.]{.underline}*** Amends 31 U.S.C. 5318 to require the
Secretary to review the threshold reporting amounts every 5 years,
adjust the amounts for inflation, and report to Congress on adjustments
made.

**[Note]{.underline}**: The bill uses the term, "seasoned customer," in
the title, yet the bill text uses the term, "qualified customer," when
amending 31 U.S.C. section 5313. The terms seem interchangeable. The
committee report defines "seasoned customers" as "longtime bank
customers that routinely deal in large volumes of cash but whose
business dealings are well-enough understood by the institution to rule
out the possibility of money laundering or the financing of terror," a
definition that appears consistent with Section 2(b) of the bill.

**[Additional Information]{.underline}**: The committee report states
that the bill directs the Secretary to gather the information necessary
to prosecute financial crimes, yet exempts from reporting requirements
those "transactions by 'seasoned customers' that the institution knows
well enough to understand that a large cash transaction is part of the
course of normal business."

Currently, the Bank Secrecy Act requires CTRs to be filed for cash
transactions in excess of \$10,000. Additionally, the committee report
states that the current rules for seeking an exemption from filing is,
"difficult to understand, cumbersome to use and requires annual renewals
of the exemption." More than 13.1 million CTRs are filed annually. The
committee report states 30% of the CTRs filed concern recurring
transactions, and the, "millions of excess forms have little value for
law enforcement purposes." It is estimated that the banking industry
devoted 5.5 million hours to processing CTRs in 2005.

**[Committee Action]{.underline}**: H.R. 5341 was introduced on May 10,
2006, and referred to the Committee on Financial Services. The bill was
marked-up by the Financial Services Subcommittee on Financial
Institutions and Consumer Credit on May 24, 2006. The bill was reported
out by the full Committee on June 19, 2006, by voice vote (H. Rept.
109-506).

**[Cost to Taxpayers]{.underline}**: CBO estimates that implementing the
bill would have no significant effect on the budget. The cost for
completing the reports is estimated at less than \$500,000 and would be
subject to appropriations. The bill would not affect direct spending or
revenues.

**[Does the Bill Expand the Size and Scope of the Federal
Government?]{.underline}**: No.

**[Does the Bill Contain Any New State-Government, Local-Government, or
Private-Sector Mandates?]{.underline}**: No.

**[Constitutional Authority]{.underline}**: The Committee Report, H.
Rept. 109-506, cites constitutional authority for this legislation in
Article 1, Section 8, and Clause 3 of the Constitution.

**[RSC Staff Contact]{.underline}**: Marcus Kelley;
<marcus.kelley@mail.house.gov>; 202-226-9717

H.Res. 854 --- Recognizing National Homeownership Month and the
importance of homeownership in the United States --- *as introduced*

(Miller, R-CA)

**[Order of Business]{.underline}:** The resolution is scheduled for
consideration on Tuesday, June 27, 2006, under a motion to suspend the
rules and pass the resolution.

An almost identical bill, H.R. 658, passed the House during the 108^th^
Congress by a vote of 415-2 on June 22, 2004:
[http://clerk.house.gov/evs/2004/roll285.xml\\](http://clerk.house.gov/evs/2004/roll285.xml\).

The 104^th^ Congress changed House rules to prohibit a bill from being
considered on the House floor if "it establishes or expresses a
commemoration", which is defined as "a remembrance, celebration, or
recognition for any purpose through the designation of a specified
period of time"
([[http://clerk.house.gov/legisAct/legisProc/rules/rule12.html]{.underline}](http://clerk.house.gov/legisAct/legisProc/rules/rule12.html)).

This resolution resolves that Congress supports the ideals and goals of
National Homeownership Month, and recognizes the importance of
homeownership. Because the resolution merely states support for, but
does not establish a commemorative week or month, the parliamentarian's
office has ruled that it is allowable under House rules.

**[Summary]{.underline}:** H.Res. 854 would resolve that the House of
Representatives:

1\) fully supports the goals and ideals of National Homeownership Month;
and

2\) recognizes the importance of homeownership in building strong
communities and families.

The resolution also states a number of findings, including the
following:

-   "the President of the United States has issued a proclamation
    designating the *month of June 2006 as National Homeownership
    Month;*

-   "the national homeownership rate in the United States has reached a
    record high of almost 70 percent and more than half of all minority
    families are homeowners;

-   "creating *affordable* homeownership opportunities requires the
    commitment and cooperation of the private, public, and nonprofit
    sectors, *including the Federal Government and State and local
    governments*; and

-   "the current laws of the United States, such as the American Dream
    Downpayment Act, encourage homeownership and should continue to do
    so in the future." (*emphasis added*)

**[Committee Action]{.underline}:** H.R. 854 was introduced on June 6,
2006, and referred to the Committee on Financial Services, which took no
official action.

**[Cost to Taxpayers]{.underline}:** The resolution authorizes no
expenditure.

**[Does the Bill Expand the Size and Scope of the Federal
Government?]{.underline}:** No.

**[Does the Bill Contain Any New State-Government, Local-Government, or
Private-Sector Mandates?]{.underline}:** No.

**[RSC Staff Contact]{.underline}:** Derek V. Baker;
[derek.baker@mail.house.gov](mailto:Derek.baker@mail.house.gov);
202-226-8585