2411 
(c) PROHIBITION ON DUPLICATIVE INVESTIGA-
TIONS.—An authorized investigative agency or 
authorized adjudicative agency may not con-
duct an investigation for purposes of deter-
mining whether to grant a security clearance 
to an individual where a current investigation 
or clearance of equal level already exists or 
has been granted by another authorized adju-
dicative agency. 
SEC. 5074. ESTABLISHMENT OF NATIONAL DATABASE . 
(a) ESTABLISHMENT.—Not later than 12 
months after the date of the enactment of this 
Act, the Director of the Office of Personnel 
Management, in cooperation with the Director, 
shall establish, and begin operating and 
maintaining, an integrated, secure, national 
database into which appropriate data rel-
evant to the granting, denial, or revocation of 
a security clearance or access pertaining to 
military, civilian, or government contractor 
personnel shall be entered from all authorized 
investigative and adjudicative agencies. 
(b) INTEGRATION.—The national database 
established under subsection (a) shall func-
tion to integrate information from existing
2412 
Federal clearance tracking systems from other 
authorized investigative 
and 
adjudicative 
agencies into a single consolidated database. 
(c) REQUIREMENT
TO CHECK DATABASE.— 
Each authorized investigative or adjudicative 
agency shall check the national database es-
tablished under subsection (a) to determine 
whether an individual the agency has identi-
fied as requiring a security clearance has al-
ready been granted or denied a security clear-
ance, or has had a security clearance revoked, 
by any other authorized investigative or adju-
dicative agency. 
(d) CERTIFICATION
OF AUTHORIZED INVES-
TIGATIVE AGENCIES OR AUTHORIZED ADJUDICA-
TIVE AGENCIES.—The Director shall evaluate 
the extent to which an agency is submitting in-
formation to, and requesting information 
from, the national database established under 
subsection (a) as part of a determination of 
whether to certify the agency as an authorized 
investigative agency or authorized adjudica-
tive agency. 
(e) EXCLUSION
OF CERTAIN INTELLIGENCE 
OPERATIVES.—The Director may authorize an
2413 
agency to withhold information about certain 
individuals from the database established 
under subsection (a) if the Director determines 
it is necessary for national security purposes. 
(f) COMPLIANCE.—The Director shall estab-
lish a review procedure by which agencies can 
seek review of actions required under section 
5073. 
(g) AUTHORIZATION
OF APPROPRIATIONS.— 
There is authorized to be appropriated such 
sums as may be necessary for fiscal year 2005 
and each subsequent fiscal year for the imple-
mentation, maintenance and operation of the 
database established in subsection (a). 
SEC. 5075. USE OF AVAILABLE TECHNOLOGY IN CLEARANCE 
INVESTIGATIONS. 
(a) INVESTIGATIONS.—Not later than 12 
months after the date of the enactment of this 
Act, each authorized investigative agency that 
conducts personnel security clearance inves-
tigations shall use, to the maximum extent 
practicable, available information technology 
and databases to expedite investigative proc-
esses and to verify standard information sub-
2414 
mitted as part of an application for a security 
clearance. 
(b) INTERIM CLEARANCE.—If the application 
of an applicant for an interim clearance has 
been processed using the technology under 
subsection (a), the interim clearances for the 
applicant at the secret, top secret, and special 
access program levels may be granted before 
the completion of the appropriate investiga-
tion. Any request to process an interim clear-
ance shall be given priority, and the authority 
granting the interim clearance shall ensure 
that final adjudication on the application is 
made within 90 days after the initial clear-
ance is granted. 
(c) ON-GOING MONITORING OF INDIVIDUALS 
WITH SECURITY CLEARANCES.—(1) Authorized 
investigative agencies and authorized adju-
dicative agencies shall establish procedures 
for the regular, ongoing verification of per-
sonnel with security clearances in effect for 
continued access to classified information. 
Such procedures shall include the use of avail-
able technology to detect, on a regularly recur-
ring basis, any issues of concern that may
2415 
arise involving such personnel and such ac-
cess. 
(2) Such regularly recurring verification 
may be used as a basis for terminating a secu-
rity clearance or access and shall be used in 
periodic reinvestigations to address emerging 
threats and adverse events associated with in-
dividuals with security clearances in effect to 
the maximum extent practicable. 
(3) If the Director certifies that the na-
tional security of the United States is not 
harmed by the discontinuation of periodic re-
investigations, 
the 
regularly 
recurring 
verification under this section may replace 
periodic reinvestigations. 
SEC. 5076. REDUCTION IN LENGTH OF PERSONNEL SECU-
RITY CLEARANCE PROCESS. 
(a) 60-DAY PERIOD FOR DETERMINATION ON 
CLEARANCES.—Each authorized adjudicative 
agency shall make a determination on an ap-
plication for a personnel security clearance 
within 60 days after the date of receipt of the 
completed application for a security clearance 
by an authorized investigative agency. The 60- 
day period shall include—
2416 
(1) a period of not longer than 40 days 
to complete the investigative phase of the 
clearance review; and 
(2) a period of not longer than 20 days 
to complete the adjudicative phase of the 
clearance review. 
(b) EFFECTIVE DATE AND PHASE-IN.— 
(1) EFFECTIVE
DATE.—Subsection (a) 
shall take effect 5 years after the date of 
the enactment of this Act. 
(2) PHASE-IN.—During the period be-
ginning on a date not later than 2 years 
after the date after the enactment of this 
Act and ending on the date on which sub-
section (a) takes effect as specified in 
paragraph (1), each authorized adjudica-
tive agency shall make a determination 
on an application for a personnel security 
clearance pursuant to this title within 120 
days after the date of receipt of the appli-
cation for a security clearance by an au-
thorized investigative agency. The 120-day 
period shall include—
2417 
(A) a period of not longer than 90 
days to complete the investigative 
phase of the clearance review; and 
(B) a period of not longer than 30 
days to complete the adjudicative 
phase of the clearance review. 
SEC. 5077. SECURITY CLEARANCES FOR PRESIDENTIAL 
TRANSITION. 
(a) CANDIDATES
FOR NATIONAL SECURITY 
POSITIONS.—(1) The President-elect shall sub-
mit to the Director the names of candidates for 
high-level national security positions, for posi-
tions at the level of under secretary of execu-
tive departments and above, as soon as pos-
sible after the date of the general elections 
held to determine the electors of President and 
Vice President under section 1 or 2 of title 3, 
United States Code. 
(2) The Director shall be responsible for 
the expeditious completion of the background 
investigations necessary to provide appro-
priate security clearances to the individuals 
who are candidates described under para-
graph (1) before the date of the inauguration 
of the President-elect as President and the in-
2418 
auguration of the Vice-President-elect as Vice 
President. 
(b) SECURITY CLEARANCES FOR TRANSITION 
TEAM MEMBERS.—(1) In this section, the term 
‘‘major party’’ has the meaning provided 
under section 9002(6) of the Internal Revenue 
Code of 1986. 
(2) Each major party candidate for Presi-
dent, except a candidate who is the incumbent 
President, shall submit, before the date of the 
general presidential election, requests for se-
curity clearances for prospective transition 
team members who will have a need for access 
to classified information to carry out their re-
sponsibilities as members of the President- 
elect’s transition team. 
(3) Necessary background investigations 
and eligibility determinations to permit ap-
propriate prospective transition team mem-
bers to have access to classified information 
shall be completed, to the fullest extent prac-
ticable, by the day after the date of the general 
presidential election.
2419 
SEC. 5078. REPORTS. 
Not later than February 15, 2006, and an-
nually thereafter through 2016, the Director 
shall submit to the appropriate committees of 
Congress a report on the progress made during 
the preceding year toward meeting the re-
quirements specified in this Act. The report 
shall include— 
(1) the periods of time required by the 
authorized investigative agencies and au-
thorized adjudicative agencies during the 
year covered by the report for conducting 
investigations, adjudicating cases, and 
granting clearances, from date of submis-
sion to ultimate disposition and notifica-
tion to the subject and the subject’s em-
ployer; 
(2) a discussion of any impediments to 
the smooth and timely functioning of the 
implementation of this title; and 
(3) such other information or rec-
ommendations as the Deputy Director 
deems appropriate.
2420 
Subtitle G—Emergency Financial 
Preparedness 
CHAPTER 1—EMERGENCY PREPAREDNESS 
FOR FISCAL AUTHORITIES 
SEC. 5081. DELEGATION AUTHORITY OF THE SECRETARY OF 
THE TREASURY. 
Subsection (d) of section 306 of title 31, 
United States Code, is amended by inserting 
‘‘or employee’’ after ‘‘another officer’’. 
SEC. 5081A. TREASURY SUPPORT FOR FINANCIAL SERVICES 
INDUSTRY PREPAREDNESS AND RESPONSE. 
(a) CONGRESSIONAL
FINDING.—The Con-
gress finds that the Secretary of the Treas-
ury— 
(1) has successfully communicated 
and coordinated with the private-sector fi-
nancial services industry about counter- 
terrorist financing activities and pre-
paredness; 
(2) has successfully reached out to 
State and local governments and regional 
public-private 
partnerships, 
such 
as 
ChicagoFIRST, that protect employees 
and critical infrastructure by enhancing 
communication and coordinating plans
2421 
for disaster preparedness and business 
continuity; and 
(3) has set an example for the Depart-
ment of Homeland Security and other 
Federal agency partners, whose active 
participation is vital to the overall suc-
cess of the activities described in para-
graphs (1) and (2). 
(b) FURTHER EDUCATION AND PREPARATION 
EFFORTS.—It is the sense of Congress that the 
Secretary of the Treasury, in consultation with 
the Secretary of Homeland Security and other 
Federal agency partners, should— 
(1) furnish sufficient personnel and 
technological and financial resources to 
foster the formation of public-private sec-
tor coalitions, similar to ChicagoFIRST, 
that, in collaboration with the Depart-
ment of Treasury, the Department of 
Homeland Security, and other Federal 
agency 
partners, 
would 
educate 
con-
sumers and employees of the financial 
services industry about domestic counter- 
terrorist financing activities, including—
2422 
(A) how the public and private 
sector 
organizations 
involved 
in 
counter-terrorist financing activities 
can help to combat terrorism and si-
multaneously protect and preserve the 
lives and civil liberties of consumers 
and employees of the financial serv-
ices industry; and 
(B) how consumers and employees 
of the financial services industry can 
assist the public and private sector or-
ganizations involved in counter-ter-
rorist financing activities; and 
(2) submit annual reports to the Con-
gress on Federal efforts, in conjunction 
with public-private sector coalitions, to 
educate consumers and employees of the 
financial services industry about domestic 
counter-terrorist financing activities.
2423 
CHAPTER 2—MARKET PREPAREDNESS 
Subchapter A—Netting of Financial 
Contracts 
SEC. 5082. SHORT TITLE. 
This subchapter may be cited as the ‘‘Fi-
nancial Contracts Bankruptcy Reform Act of 
2004’’. 
SEC. 5082A. TREATMENT OF CERTAIN AGREEMENTS BY 
CONSERVATORS OR RECEIVERS OF INSURED 
DEPOSITORY INSTITUTIONS. 
(a) DEFINITION
OF
QUALIFIED
FINANCIAL 
CONTRACT.— 
(1) FDIC-INSURED DEPOSITORY INSTITU-
TIONS.—Section 11(e)(8)(D) of the Federal 
Deposit 
Insurance 
Act 
(12 
U.S.C. 
1821(e)(8)(D)) is amended— 
(A) by striking ‘‘subsection—’’ and 
inserting ‘‘subsection, the following 
definitions shall apply:’’; and 
(B) in clause (i), by inserting ‘‘, 
resolution, or order’’ after ‘‘any simi-
lar agreement that the Corporation 
determines by regulation’’.
2424 
(2) INSURED
CREDIT
UNIONS.—Section 
207(c)(8)(D) of the Federal Credit Union 
Act (12 U.S.C. 1787(c)(8)(D)) is amended— 
(A) by striking ‘‘subsection—’’ and 
inserting ‘‘subsection, the following 
definitions shall apply:’’; and 
(B) in clause (i), by inserting ‘‘, 
resolution, or order’’ after ‘‘any simi-
lar agreement that the Board deter-
mines by regulation’’. 
(b) DEFINITION OF SECURITIES CONTRACT.— 
(1) FDIC-INSURED DEPOSITORY INSTITU-
TIONS.—Section 11(e)(8)(D)(ii) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 
1821(e)(8)(D)(ii)) is amended to read as 
follows: 
‘‘(ii) SECURITIES
CONTRACT.— 
The term ‘securities contract’— 
‘‘(I) means a contract for 
the purchase, sale, or loan of a 
security, a certificate of de-
posit, a mortgage loan, or any 
interest in a mortgage loan, a 
group or index of securities, 
certificates of deposit, or mort-
2425 
gage loans or interests therein 
(including any interest therein 
or based on the value thereof) 
or any option on any of the 
foregoing, including any op-
tion to purchase or sell any 
such security, certificate of de-
posit, mortgage loan, interest, 
group or index, or option, and 
including any repurchase or 
reverse 
repurchase 
trans-
action on any such security, 
certificate of deposit, mort-
gage loan, interest, group or 
index, or option; 
‘‘(II) does not include any 
purchase, sale, or repurchase 
obligation under a participa-
tion in a commercial mortgage 
loan unless the Corporation 
determines by regulation, reso-
lution, or order to include any 
such agreement within the 
meaning of such term;
2426 
‘‘(III) means any option en-
tered into on a national secu-
rities exchange relating to for-
eign currencies; 
‘‘(IV) means the guarantee 
by or to any securities clearing 
agency of any settlement of 
cash, securities, certificates of 
deposit, mortgage loans or in-
terests therein, group or index 
of securities, certificates of de-
posit, or mortgage loans or in-
terests therein (including any 
interest therein or based on 
the value thereof) or option on 
any of the foregoing, including 
any option to purchase or sell 
any such security, certificate 
of deposit, mortgage loan, in-
terest, group or index, or op-
tion; 
‘‘(V) means any margin 
loan; 
‘‘(VI) 
means 
any 
other 
agreement or transaction that
2427 
is similar to any agreement or 
transaction referred to in this 
clause; 
‘‘(VII) means any combina-
tion 
of 
the 
agreements 
or 
transactions 
referred 
to 
in 
this clause; 
‘‘(VIII) means any option 
to enter into any agreement or 
transaction referred to in this 
clause; 
‘‘(IX) 
means 
a 
master 
agreement that provides for 
an agreement or transaction 
referred to in subclause (I), 
(III), (IV), (V), (VI), (VII), or 
(VIII), together with all sup-
plements to any such master 
agreement, without regard to 
whether the master agreement 
provides for an agreement or 
transaction that is not a secu-
rities 
contract 
under 
this 
clause, except that the master 
agreement shall be considered
2428 
to be a securities contract 
under this clause only with re-
spect to each agreement or 
transaction under the master 
agreement that is referred to 
in subclause (I), (III), (IV), (V), 
(VI), (VII), or (VIII); and 
‘‘(X) means any security 
agreement or arrangement or 
other credit enhancement re-
lated to any agreement or 
transaction referred to in this 
clause, including any guar-
antee or reimbursement obli-
gation in connection with any 
agreement or transaction re-
ferred to in this clause.’’. 
(2) INSURED
CREDIT
UNIONS.—Section 
207(c)(8)(D)(ii) 
of 
the 
Federal 
Credit 
Union Act (12 U.S.C. 1787(c)(8)(D)(ii)) is 
amended to read as follows: 
‘‘(ii) SECURITIES
CONTRACT.— 
The term ‘securities contract’— 
‘‘(I) means a contract for 
the purchase, sale, or loan of a
2429 
security, a certificate of de-
posit, a mortgage loan, or any 
interest in a mortgage loan, a 
group or index of securities, 
certificates of deposit, or mort-
gage loans or interests therein 
(including any interest therein 
or based on the value thereof) 
or any option on any of the 
foregoing, including any op-
tion to purchase or sell any 
such security, certificate of de-
posit, mortgage loan, interest, 
group or index, or option, and 
including any repurchase or 
reverse 
repurchase 
trans-
action on any such security, 
certificate of deposit, mort-
gage loan, interest, group or 
index, or option; 
‘‘(II) does not include any 
purchase, sale, or repurchase 
obligation under a participa-
tion in a commercial mortgage 
loan unless the Board deter-
2430 
mines by regulation, resolu-
tion, or order to include any 
such agreement within the 
meaning of such term; 
‘‘(III) means any option en-
tered into on a national secu-
rities exchange relating to for-
eign currencies; 
‘‘(IV) means the guarantee 
by or to any securities clearing 
agency of any settlement of 
cash, securities, certificates of 
deposit, mortgage loans or in-
terests therein, group or index 
of securities, certificates of de-
posit, or mortgage loans or in-
terests therein (including any 
interest therein or based on 
the value thereof) or option on 
any of the foregoing, including 
any option to purchase or sell 
any such security, certificate 
of deposit, mortgage loan, in-
terest, group or index, or op-
tion;
2431 
‘‘(V) means any margin 
loan; 
‘‘(VI) 
means 
any 
other 
agreement or transaction that 
is similar to any agreement or 
transaction referred to in this 
clause; 
‘‘(VII) means any combina-
tion 
of 
the 
agreements 
or 
transactions 
referred 
to 
in 
this clause; 
‘‘(VIII) means any option 
to enter into any agreement or 
transaction referred to in this 
clause; 
‘‘(IX) 
means 
a 
master 
agreement that provides for 
an agreement or transaction 
referred to in subclause (I), 
(III), (IV), (V), (VI), (VII), or 
(VIII), together with all sup-
plements to any such master 
agreement, without regard to 
whether the master agreement 
provides for an agreement or
2432 
transaction that is not a secu-
rities 
contract 
under 
this 
clause, except that the master 
agreement shall be considered 
to be a securities contract 
under this clause only with re-
spect to each agreement or 
transaction under the master 
agreement that is referred to 
in subclause (I), (III), (IV), (V), 
(VI), (VII), or (VIII); and 
‘‘(X) means any security 
agreement or arrangement or 
other credit enhancement re-
lated to any agreement or 
transaction referred to in this 
clause, including any guar-
antee or reimbursement obli-
gation in connection with any 
agreement or transaction re-
ferred to in this clause.’’. 
(c) DEFINITION OF COMMODITY CONTRACT.— 
(1) FDIC-INSURED DEPOSITORY INSTITU-
TIONS.—Section 11(e)(8)(D)(iii) of the Fed-
eral Deposit Insurance Act (12 U.S.C.
2433 
1821(e)(8)(D)(iii)) is amended to read as 
follows: 
‘‘(iii) COMMODITY
CONTRACT.— 
The 
term 
‘commodity 
contract’ 
means— 
‘‘(I) with respect to a fu-
tures commission merchant, a 
contract for the purchase or 
sale of a commodity for future 
delivery on, or subject to the 
rules of, a contract market or 
board of trade; 
‘‘(II) with respect to a for-
eign futures commission mer-
chant, a foreign future; 
‘‘(III) with respect to a le-
verage transaction merchant, 
a leverage transaction; 
‘‘(IV) with respect to a 
clearing organization, a con-
tract for the purchase or sale 
of a commodity for future de-
livery on, or subject to the 
rules of, a contract market or 
board of trade that is cleared
2434 
by such clearing organization, 
or commodity option traded 
on, or subject to the rules of, a 
contract market or board of 
trade that is cleared by such 
clearing organization; 
‘‘(V) with respect to a com-
modity options dealer, a com-
modity option; 
‘‘(VI) any other agreement 
or transaction that is similar 
to any agreement or trans-
action 
referred 
to 
in 
this 
clause; 
‘‘(VII) any combination of 
the 
agreements 
or 
trans-
actions referred to in this 
clause; 
‘‘(VIII) any option to enter 
into any agreement or trans-
action 
referred 
to 
in 
this 
clause; 
‘‘(IX) a master agreement 
that provides for an agree-
ment or transaction referred
2435 
to in subclause (I), (II), (III), 
(IV), (V), (VI), (VII), or (VIII), 
together with all supplements 
to any such master agreement, 
without regard to whether the 
master agreement provides for 
an agreement or transaction 
that is not a commodity con-
tract under this clause, except 
that 
the 
master 
agreement 
shall be considered to be a 
commodity contract under this 
clause only with respect to 
each agreement or transaction 
under the master agreement 
that is referred to in subclause 
(I), (II), (III), (IV), (V), (VI), 
(VII), or (VIII); or 
‘‘(X) any security agree-
ment or arrangement or other 
credit enhancement related to 
any agreement or transaction 
referred to in this clause, in-
cluding any guarantee or re-
imbursement 
obligation 
in
2436 
connection with any agree-
ment or transaction referred 
to in this clause.’’. 
(2) INSURED
CREDIT
UNIONS.—Section 
207(c)(8)(D)(iii) of the Federal Credit 
Union Act (12 U.S.C. 1787(c)(8)(D)(iii)) is 
amended to read as follows: 
‘‘(iii) COMMODITY
CONTRACT.— 
The 
term 
‘commodity 
contract’ 
means— 
‘‘(I) with respect to a fu-
tures commission merchant, a 
contract for the purchase or 
sale of a commodity for future 
delivery on, or subject to the 
rules of, a contract market or 
board of trade; 
‘‘(II) with respect to a for-
eign futures commission mer-
chant, a foreign future; 
‘‘(III) with respect to a le-
verage transaction merchant, 
a leverage transaction; 
‘‘(IV) with respect to a 
clearing organization, a con-
2437 
tract for the purchase or sale 
of a commodity for future de-
livery on, or subject to the 
rules of, a contract market or 
board of trade that is cleared 
by such clearing organization, 
or commodity option traded 
on, or subject to the rules of, a 
contract market or board of 
trade that is cleared by such 
clearing organization; 
‘‘(V) with respect to a com-
modity options dealer, a com-
modity option; 
‘‘(VI) any other agreement 
or transaction that is similar 
to any agreement or trans-
action 
referred 
to 
in 
this 
clause; 
‘‘(VII) any combination of 
the 
agreements 
or 
trans-
actions referred to in this 
clause; 
‘‘(VIII) any option to enter 
into any agreement or trans-
2438 
action 
referred 
to 
in 
this 
clause; 
‘‘(IX) a master agreement 
that provides for an agree-
ment or transaction referred 
to in subclause (I), (II), (III), 
(IV), (V), (VI), (VII), or (VIII), 
together with all supplements 
to any such master agreement, 
without regard to whether the 
master agreement provides for 
an agreement or transaction 
that is not a commodity con-
tract under this clause, except 
that 
the 
master 
agreement 
shall be considered to be a 
commodity contract under this 
clause only with respect to 
each agreement or transaction 
under the master agreement 
that is referred to in subclause 
(I), (II), (III), (IV), (V), (VI), 
(VII), or (VIII); or 
‘‘(X) any security agree-
ment or arrangement or other
2439 
credit enhancement related to 
any agreement or transaction 
referred to in this clause, in-
cluding any guarantee or re-
imbursement 
obligation 
in 
connection with any agree-
ment or transaction referred 
to in this clause.’’. 
(d) DEFINITION OF FORWARD CONTRACT.— 
(1) FDIC-INSURED DEPOSITORY INSTITU-
TIONS.—Section 11(e)(8)(D)(iv) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 
1821(e)(8)(D)(iv)) is amended to read as 
follows: 
‘‘(iv) FORWARD CONTRACT.—The 
term ‘forward contract’ means— 
‘‘(I) a contract (other than 
a commodity contract) for the 
purchase, sale, or transfer of a 
commodity 
or 
any 
similar 
good, article, service, right, or 
interest which is presently or 
in the future becomes the sub-
ject of dealing in the forward 
contract trade, or product or
2440 
by-product thereof, with a ma-
turity date more than 2 days 
after the date the contract is 
entered into, including, a re-
purchase transaction, reverse 
repurchase transaction, con-
signment, lease, swap, hedge 
transaction, deposit, loan, op-
tion, 
allocated 
transaction, 
unallocated 
transaction, 
or 
any other similar agreement; 
‘‘(II) any combination of 
agreements or transactions re-
ferred to in subclauses (I) and 
(III); 
‘‘(III) any option to enter 
into any agreement or trans-
action referred to in subclause 
(I) or (II); 
‘‘(IV) a master agreement 
that provides for an agree-
ment or transaction referred 
to in subclauses (I), (II), or 
(III), together with all supple-
ments to any such master
2441 
agreement, without regard to 
whether the master agreement 
provides for an agreement or 
transaction that is not a for-
ward 
contract 
under 
this 
clause, except that the master 
agreement shall be considered 
to be a forward contract under 
this clause only with respect to 
each agreement or transaction 
under the master agreement 
that is referred to in subclause 
(I), (II), or (III); or 
‘‘(V) any security agree-
ment or arrangement or other 
credit enhancement related to 
any agreement or transaction 
referred to in subclause (I), 
(II), (III), or (IV), including 
any guarantee or reimburse-
ment obligation in connection 
with any agreement or trans-
action referred to in any such 
subclause.’’.
2442 
(2) INSURED
CREDIT
UNIONS.—Section 
207(c)(8)(D)(iv) of the Federal Credit 
Union Act (12 U.S.C. 1787(c)(8)(D)(iv)) is 
amended to read as follows: 
‘‘(iv) FORWARD CONTRACT.—The 
term ‘forward contract’ means— 
‘‘(I) a contract (other than 
a commodity contract) for the 
purchase, sale, or transfer of a 
commodity 
or 
any 
similar 
good, article, service, right, or 
interest which is presently or 
in the future becomes the sub-
ject of dealing in the forward 
contract trade, or product or 
by-product thereof, with a ma-
turity date more than 2 days 
after the date the contract is 
entered into, including, a re-
purchase transaction, reverse 
repurchase transaction, con-
signment, lease, swap, hedge 
transaction, deposit, loan, op-
tion, 
allocated 
transaction,
2443 
unallocated 
transaction, 
or 
any other similar agreement; 
‘‘(II) any combination of 
agreements or transactions re-
ferred to in subclauses (I) and 
(III); 
‘‘(III) any option to enter 
into any agreement or trans-
action referred to in subclause 
(I) or (II); 
‘‘(IV) a master agreement 
that provides for an agree-
ment or transaction referred 
to in subclauses (I), (II), or 
(III), together with all supple-
ments to any such master 
agreement, without regard to 
whether the master agreement 
provides for an agreement or 
transaction that is not a for-
ward 
contract 
under 
this 
clause, except that the master 
agreement shall be considered 
to be a forward contract under 
this clause only with respect to
2444 
each agreement or transaction 
under the master agreement 
that is referred to in subclause 
(I), (II), or (III); or 
‘‘(V) any security agree-
ment or arrangement or other 
credit enhancement related to 
any agreement or transaction 
referred to in subclause (I), 
(II), (III), or (IV), including 
any guarantee or reimburse-
ment obligation in connection 
with any agreement or trans-
action referred to in any such 
subclause.’’. 
(e) DEFINITION
OF
REPURCHASE
AGREE-
MENT.— 
(1) FDIC-INSURED DEPOSITORY INSTITU-
TIONS.—Section 11(e)(8)(D)(v) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 
1821(e)(8)(D)(v)) is amended to read as 
follows: 
‘‘(v) REPURCHASE AGREEMENT.— 
The term ‘repurchase agreement’
2445 
(which definition also applies to a 
reverse repurchase agreement)— 
‘‘(I) means an agreement, 
including related terms, which 
provides for the transfer of 
one or more certificates of de-
posit, mortgage-related securi-
ties (as such term is defined in 
the Securities Exchange Act of 
1934), mortgage loans, inter-
ests in mortgage-related secu-
rities or mortgage loans, eligi-
ble 
bankers’ 
acceptances, 
qualified foreign government 
securities or securities that 
are direct obligations of, or 
that are fully guaranteed by, 
the United States or any agen-
cy of the United States against 
the transfer of funds by the 
transferee of such certificates 
of deposit, eligible bankers’ ac-
ceptances, 
securities, 
mort-
gage loans, or interests with a 
simultaneous 
agreement 
by
2446 
such transferee to transfer to 
the transferor thereof certifi-
cates of deposit, eligible bank-
ers’ 
acceptances, 
securities, 
mortgage loans, or interests as 
described above, at a date cer-
tain not later than 1 year 
after such transfers or on de-
mand, against the transfer of 
funds, or any other similar 
agreement; 
‘‘(II) does not include any 
repurchase obligation under a 
participation in a commercial 
mortgage loan unless the Cor-
poration determines by regula-
tion, resolution, or order to in-
clude any such participation 
within the meaning of such 
term; 
‘‘(III) means any combina-
tion of agreements or trans-
actions referred to in sub-
clauses (I) and (IV);
2447 
‘‘(IV) means any option to 
enter into any agreement or 
transaction referred to in sub-
clause (I) or (III); 
‘‘(V) 
means 
a 
master 
agreement that provides for 
an agreement or transaction 
referred to in subclause (I), 
(III), or (IV), together with all 
supplements to any such mas-
ter agreement, without regard 
to whether the master agree-
ment provides for an agree-
ment or transaction that is 
not a repurchase agreement 
under this clause, except that 
the master agreement shall be 
considered to be a repurchase 
agreement 
under 
this 
sub-
clause only with respect to 
each agreement or transaction 
under the master agreement 
that is referred to in subclause 
(I), (III), or (IV); and
2448 
‘‘(VI) means any security 
agreement or arrangement or 
other credit enhancement re-
lated to any agreement or 
transaction referred to in sub-
clause (I), (III), (IV), or (V), in-
cluding any guarantee or re-
imbursement 
obligation 
in 
connection with any agree-
ment or transaction referred 
to in any such subclause. 
For purposes of this clause, the 
term ‘qualified foreign govern-
ment security’ means a security 
that is a direct obligation of, or 
that is fully guaranteed by, the 
central government of a member 
of the Organization for Economic 
Cooperation and Development (as 
determined by regulation or order 
adopted by the appropriate Fed-
eral banking authority).’’. 
(2) INSURED
CREDIT
UNIONS.—Section 
207(c)(8)(D)(v) 
of 
the 
Federal 
Credit
2449 
Union Act (12 U.S.C. 1787(c)(8)(D)(v)) is 
amended to read as follows: 
‘‘(v) REPURCHASE AGREEMENT.— 
The term ‘repurchase agreement’ 
(which definition also applies to a 
reverse repurchase agreement)— 
‘‘(I) means an agreement, 
including related terms, which 
provides for the transfer of 
one or more certificates of de-
posit, mortgage-related securi-
ties (as such term is defined in 
the Securities Exchange Act of 
1934), mortgage loans, inter-
ests in mortgage-related secu-
rities or mortgage loans, eligi-
ble 
bankers’ 
acceptances, 
qualified foreign government 
securities or securities that 
are direct obligations of, or 
that are fully guaranteed by, 
the United States or any agen-
cy of the United States against 
the transfer of funds by the 
transferee of such certificates
2450 
of deposit, eligible bankers’ ac-
ceptances, 
securities, 
mort-
gage loans, or interests with a 
simultaneous 
agreement 
by 
such transferee to transfer to 
the transferor thereof certifi-
cates of deposit, eligible bank-
ers’ 
acceptances, 
securities, 
mortgage loans, or interests as 
described above, at a date cer-
tain not later than 1 year 
after such transfers or on de-
mand, against the transfer of 
funds, or any other similar 
agreement; 
‘‘(II) does not include any 
repurchase obligation under a 
participation in a commercial 
mortgage 
loan 
unless 
the 
Board determines by regula-
tion, resolution, or order to in-
clude any such participation 
within the meaning of such 
term;
2451 
‘‘(III) means any combina-
tion of agreements or trans-
actions referred to in sub-
clauses (I) and (IV); 
‘‘(IV) means any option to 
enter into any agreement or 
transaction referred to in sub-
clause (I) or (III); 
‘‘(V) 
means 
a 
master 
agreement that provides for 
an agreement or transaction 
referred to in subclause (I), 
(III), or (IV), together with all 
supplements to any such mas-
ter agreement, without regard 
to whether the master agree-
ment provides for an agree-
ment or transaction that is 
not a repurchase agreement 
under this clause, except that 
the master agreement shall be 
considered to be a repurchase 
agreement 
under 
this 
sub-
clause only with respect to 
each agreement or transaction
2452 
under the master agreement 
that is referred to in subclause 
(I), (III), or (IV); and 
‘‘(VI) means any security 
agreement or arrangement or 
other credit enhancement re-
lated to any agreement or 
transaction referred to in sub-
clause (I), (III), (IV), or (V), in-
cluding any guarantee or re-
imbursement 
obligation 
in 
connection with any agree-
ment or transaction referred 
to in any such subclause. 
For purposes of this clause, the 
term ‘qualified foreign govern-
ment security’ means a security 
that is a direct obligation of, or 
that is fully guaranteed by, the 
central government of a member 
of the Organization for Economic 
Cooperation and Development (as 
determined by regulation or order 
adopted by the appropriate Fed-
eral banking authority).’’.
2453 
(f) DEFINITION OF SWAP AGREEMENT.— 
(1) FDIC-INSURED DEPOSITORY INSTITU-
TIONS.—Section 11(e)(8)(D)(vi) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 
1821(e)(8)(D)(vi)) is amended to read as 
follows: 
‘‘(vi) 
SWAP
AGREEMENT.—The 
term ‘swap agreement’ means— 
‘‘(I) any agreement, includ-
ing the terms and conditions 
incorporated by reference in 
any such agreement, which is 
an interest rate swap, option, 
future, or forward agreement, 
including a rate floor, rate 
cap, 
rate 
collar, 
cross-cur-
rency rate swap, and basis 
swap; a spot, same day-tomor-
row, tomorrow-next, forward, 
or other foreign exchange or 
precious metals agreement; a 
currency swap, option, future, 
or forward agreement; an eq-
uity index or equity swap, op-
tion, future, or forward agree-
2454 
ment; a debt index or debt 
swap, option, future, or for-
ward agreement; a total re-
turn, credit spread or credit 
swap, option, future, or for-
ward agreement; a commodity 
index or commodity swap, op-
tion, future, or forward agree-
ment; or a weather swap, 
weather derivative, or weather 
option; 
‘‘(II) 
any 
agreement 
or 
transaction that is similar to 
any other agreement or trans-
action 
referred 
to 
in 
this 
clause and that is of a type 
that has been, is presently, or 
in the future becomes, the sub-
ject of recurrent dealings in 
the swap markets (including 
terms and conditions incor-
porated by reference in such 
agreement) and that is a for-
ward, swap, future, or option 
on one or more rates, cur-
2455 
rencies, 
commodities, 
equity 
securities or other equity in-
struments, debt securities or 
other debt instruments, quan-
titative measures associated 
with an occurrence, extent of 
an occurrence, or contingency 
associated with a financial, 
commercial, or economic con-
sequence, or economic or fi-
nancial indices or measures of 
economic or financial risk or 
value; 
‘‘(III) any combination of 
agreements or transactions re-
ferred to in this clause; 
‘‘(IV) any option to enter 
into any agreement or trans-
action 
referred 
to 
in 
this 
clause; 
‘‘(V) a master agreement 
that provides for an agree-
ment or transaction referred 
to in subclause (I), (II), (III), 
or (IV), together with all sup-
2456 
plements to any such master 
agreement, without regard to 
whether the master agreement 
contains 
an 
agreement 
or 
transaction that is not a swap 
agreement under this clause, 
except that the master agree-
ment shall be considered to be 
a swap agreement under this 
clause only with respect to 
each agreement or transaction 
under the master agreement 
that is referred to in subclause 
(I), (II), (III), or (IV); and 
‘‘(VI) any security agree-
ment or arrangement or other 
credit enhancement related to 
any 
agreements 
or 
trans-
actions referred to in sub-
clause (I), (II), (III), (IV), or 
(V), including any guarantee 
or reimbursement obligation 
in connection with any agree-
ment or transaction referred 
to in any such subclause.
2457 
Such term is applicable for pur-
poses of this subsection only and 
shall not be construed or applied 
so as to challenge or affect the 
characterization, 
definition, 
or 
treatment of any swap agreement 
under any other statute, regula-
tion, or rule, including the Securi-
ties Act of 1933, the Securities Ex-
change Act of 1934, the Public 
Utility Holding Company Act of 
1935, the Trust Indenture Act of 
1939, the Investment Company Act 
of 1940, the Investment Advisers 
Act of 1940, the Securities Investor 
Protection Act of 1970, the Com-
modity Exchange Act, the Gramm- 
Leach-Bliley Act, and the Legal 
Certainty for Bank Products Act 
of 2000.’’. 
(2) INSURED
CREDIT
UNIONS.—Section 
207(c)(8)(D) of the Federal Credit Union 
Act (12 U.S.C. 1787(c)(8)(D)) is amended 
by adding at the end the following new 
clause:
2458 
‘‘(vi) 
SWAP
AGREEMENT.—The 
term ‘swap agreement’ means— 
‘‘(I) any agreement, includ-
ing the terms and conditions 
incorporated by reference in 
any such agreement, which is 
an interest rate swap, option, 
future, or forward agreement, 
including a rate floor, rate 
cap, 
rate 
collar, 
cross-cur-
rency rate swap, and basis 
swap; a spot, same day-tomor-
row, tomorrow-next, forward, 
or other foreign exchange or 
precious metals agreement; a 
currency swap, option, future, 
or forward agreement; an eq-
uity index or equity swap, op-
tion, future, or forward agree-
ment; a debt index or debt 
swap, option, future, or for-
ward agreement; a total re-
turn, credit spread or credit 
swap, option, future, or for-
ward agreement; a commodity
2459 
index or commodity swap, op-
tion, future, or forward agree-
ment; or a weather swap, 
weather derivative, or weather 
option; 
‘‘(II) 
any 
agreement 
or 
transaction that is similar to 
any other agreement or trans-
action 
referred 
to 
in 
this 
clause and that is of a type 
that has been, is presently, or 
in the future becomes, the sub-
ject of recurrent dealings in 
the swap markets (including 
terms and conditions incor-
porated by reference in such 
agreement) and that is a for-
ward, swap, future, or option 
on one or more rates, cur-
rencies, 
commodities, 
equity 
securities or other equity in-
struments, debt securities or 
other debt instruments, quan-
titative measures associated 
with an occurrence, extent of
2460 
an occurrence, or contingency 
associated with a financial, 
commercial, or economic con-
sequence, or economic or fi-
nancial indices or measures of 
economic or financial risk or 
value; 
‘‘(III) any combination of 
agreements or transactions re-
ferred to in this clause; 
‘‘(IV) any option to enter 
into any agreement or trans-
action 
referred 
to 
in 
this 
clause; 
‘‘(V) a master agreement 
that provides for an agree-
ment or transaction referred 
to in subclause (I), (II), (III), 
or (IV), together with all sup-
plements to any such master 
agreement, without regard to 
whether the master agreement 
contains 
an 
agreement 
or 
transaction that is not a swap 
agreement under this clause,
2461 
except that the master agree-
ment shall be considered to be 
a swap agreement under this 
clause only with respect to 
each agreement or transaction 
under the master agreement 
that is referred to in subclause 
(I), (II), (III), or (IV); and 
‘‘(VI) any security agree-
ment or arrangement or other 
credit enhancement related to 
any 
agreements 
or 
trans-
actions referred to in sub-
clause (I), (II), (III), (IV), or 
(V), including any guarantee 
or reimbursement obligation 
in connection with any agree-
ment or transaction referred 
to in any such subclause. 
Such term is applicable for pur-
poses of this subsection only and 
shall not be construed or applied 
so as to challenge or affect the 
characterization, 
definition, 
or 
treatment of any swap agreement
2462 
under any other statute, regula-
tion, or rule, including the Securi-
ties Act of 1933, the Securities Ex-
change Act of 1934, the Public 
Utility Holding Company Act of 
1935, the Trust Indenture Act of 
1939, the Investment Company Act 
of 1940, the Investment Advisers 
Act of 1940, the Securities Investor 
Protection Act of 1970, the Com-
modity Exchange Act, the Gramm- 
Leach-Bliley Act, and the Legal 
Certainty for Bank Products Act 
of 2000.’’. 
(g) DEFINITION OF TRANSFER.— 
(1) FDIC-INSURED DEPOSITORY INSTITU-
TIONS.—Section 
11(e)(8)(D)(viii) 
of 
the 
Federal Deposit Insurance Act (12 U.S.C. 
1821(e)(8)(D)(viii)) is amended to read as 
follows: 
‘‘(viii) 
TRANSFER.—The 
term 
‘transfer’ means every mode, direct 
or indirect, absolute or condi-
tional, voluntary or involuntary, 
of disposing of or parting with
2463 
property or with an interest in 
property, including retention of 
title as a security interest and 
foreclosure of the depository insti-
tution’s equity of redemption.’’. 
(2) INSURED
CREDIT
UNIONS.—Section 
207(c)(8)(D) of the Federal Credit Union 
Act (12 U.S.C. 1787(c)(8)(D)) (as amended 
by subsection (f) of this section) is amend-
ed by adding at the end the following new 
clause: 
‘‘(viii) 
TRANSFER.—The 
term 
‘transfer’ means every mode, direct 
or indirect, absolute or condi-
tional, voluntary or involuntary, 
of disposing of or parting with 
property or with an interest in 
property, including retention of 
title as a security interest and 
foreclosure of the depository insti-
tution’s equity of redemption.’’. 
(h) TREATMENT
OF
QUALIFIED
FINANCIAL 
CONTRACTS.— 
(1) FDIC-INSURED DEPOSITORY INSTITU-
TIONS.—Section 11(e)(8) of the Federal De-
2464 
posit Insurance Act (12 U.S.C. 1821(e)(8)) 
is amended— 
(A) in subparagraph (A)— 
(i) 
by 
striking 
‘‘paragraph 
(10)’’ and inserting ‘‘paragraphs 
(9) and (10)’’; 
(ii) in clause (i), by striking 
‘‘to cause the termination or liq-
uidation’’ and inserting ‘‘such per-
son has to cause the termination, 
liquidation, or acceleration’’; and 
(iii) by striking clause (ii) and 
inserting 
the 
following 
new 
clause: 
‘‘(ii) any right under any secu-
rity agreement or arrangement or 
other credit enhancement related 
to one or more qualified financial 
contracts described in clause (i);’’; 
and 
(B) in subparagraph (E), by strik-
ing clause (ii) and inserting the fol-
lowing: 
‘‘(ii) any right under any secu-
rity agreement or arrangement or
2465 
other credit enhancement related 
to one or more qualified financial 
contracts described in clause (i);’’. 
(2) INSURED
CREDIT
UNIONS.—Section 
207(c)(8) of the Federal Credit Union Act 
(12 U.S.C. 1787(c)(8)) is amended— 
(A) in subparagraph (A)— 
(i) 
by 
striking 
‘‘paragraph 
(12)’’ and inserting ‘‘paragraphs 
(9) and (10)’’; 
(ii) in clause (i), by striking 
‘‘to cause the termination or liq-
uidation’’ and inserting ‘‘such per-
son has to cause the termination, 
liquidation, or acceleration’’; and 
(iii) by striking clause (ii) and 
inserting 
the 
following 
new 
clause: 
‘‘(ii) any right under any secu-
rity agreement or arrangement or 
other credit enhancement related 
to 1 or more qualified financial 
contracts described in clause (i);’’; 
and
2466 
(B) in subparagraph (E), by strik-
ing clause (ii) and inserting the fol-
lowing new clause: 
‘‘(ii) any right under any secu-
rity agreement or arrangement or 
other credit enhancement related 
to 1 or more qualified financial 
contracts described in clause (i);’’. 
(i) AVOIDANCE OF TRANSFERS.— 
(1) FDIC-INSURED DEPOSITORY INSTITU-
TIONS.—Section 11(e)(8)(C)(i) of the Fed-
eral Deposit Insurance Act (12 U.S.C. 
1821(e)(8)(C)(i)) is amended by inserting 
‘‘section 5242 of the Revised Statutes of 
the United States or any other Federal or 
State law relating to the avoidance of 
preferential or fraudulent transfers,’’ be-
fore ‘‘the Corporation’’. 
(2) INSURED
CREDIT
UNIONS.—Section 
207(c)(8)(C)(i) of the Federal Credit Union 
Act (12 U.S.C. 1787(c)(8)(C)(i)) is amended 
by inserting ‘‘section 5242 of the Revised 
Statutes of the United States or any other 
Federal or State law relating to the avoid-
2467 
ance of preferential or fraudulent trans-
fers,’’ before ‘‘the Board’’. 
SEC. 5082B. AUTHORITY OF THE FDIC AND NCUAB WITH RE-
SPECT TO FAILED AND FAILING INSTITU-
TIONS. 
(a) FEDERAL DEPOSIT INSURANCE CORPORA-
TION.— 
(1) IN GENERAL.—Section 11(e)(8) of the 
Federal Deposit Insurance Act (12 U.S.C. 
1821(e)(8)) is amended— 
(A) in subparagraph (E), by strik-
ing ‘‘other than paragraph (12) of this 
subsection, subsection (d)(9)’’ and in-
serting ‘‘other than subsections (d)(9) 
and (e)(10)’’; and 
(B) by adding at the end the fol-
lowing new subparagraphs: 
‘‘(F) CLARIFICATION.—No provision 
of law shall be construed as limiting 
the right or power of the Corporation, 
or authorizing any court or agency to 
limit or delay, in any manner, the 
right or power of the Corporation to 
transfer any qualified financial con-
tract in accordance with paragraphs
2468 
(9) and (10) of this subsection or to 
disaffirm or repudiate any such con-
tract in accordance with subsection 
(e)(1) of this section. 
‘‘(G) WALKAWAY CLAUSES NOT EFFEC-
TIVE.— 
‘‘(i) 
IN
GENERAL.—Notwith-
standing the provisions of sub-
paragraphs (A) and (E), and sec-
tions 403 and 404 of the Federal 
Deposit 
Insurance 
Corporation 
Improvement 
Act 
of 
1991, 
no 
walkaway clause shall be enforce-
able in a qualified financial con-
tract of an insured depository in-
stitution in default. 
‘‘(ii) 
WALKAWAY
CLAUSE
DE-
FINED.—For purposes of this sub-
paragraph, the term ‘walkaway 
clause’ means a provision in a 
qualified financial contract that, 
after calculation of a value of a 
party’s position or an amount due 
to or from 1 of the parties in ac-
cordance with its terms upon ter-
2469 
mination, liquidation, or accelera-
tion of the qualified financial con-
tract, either does not create a pay-
ment obligation of a party or ex-
tinguishes a payment obligation of 
a party in whole or in part solely 
because of such party’s status as a 
nondefaulting party.’’. 
(2) TECHNICAL AND CONFORMING AMEND-
MENT.—Section 11(e)(12)(A) of the Federal 
Deposit 
Insurance 
Act 
(12 
U.S.C. 
1821(e)(12)(A)) is amended by inserting 
‘‘or the exercise of rights or powers by’’ 
after ‘‘the appointment of’’. 
(b) NATIONAL CREDIT UNION ADMINISTRA-
TION BOARD.— 
(1) IN
GENERAL.—Section 207(c)(8) of 
the Federal Credit Union Act (12 U.S.C. 
1787(c)(8)) is amended— 
(A) 
in 
subparagraph 
(E) 
(as 
amended by section 2(h)), by striking 
‘‘other than paragraph (12) of this 
subsection, subsection (b)(9)’’ and in-
serting ‘‘other than subsections (b)(9) 
and (c)(10)’’; and
2470 
(B) by adding at the end the fol-
lowing new subparagraphs: 
‘‘(F) CLARIFICATION.—No provision 
of law shall be construed as limiting 
the right or power of the Board, or au-
thorizing any court or agency to limit 
or delay, in any manner, the right or 
power of the Board to transfer any 
qualified financial contract in ac-
cordance with paragraphs (9) and 
(10) of this subsection or to disaffirm 
or repudiate any such contract in ac-
cordance with subsection (c)(1) of this 
section. 
‘‘(G) WALKAWAY CLAUSES NOT EFFEC-
TIVE.— 
‘‘(i) 
IN
GENERAL.—Notwith-
standing the provisions of sub-
paragraphs (A) and (E), and sec-
tions 403 and 404 of the Federal 
Deposit 
Insurance 
Corporation 
Improvement 
Act 
of 
1991, 
no 
walkaway clause shall be enforce-
able in a qualified financial con-
2471 
tract of an insured credit union in 
default. 
‘‘(ii) 
WALKAWAY
CLAUSE
DE-
FINED.—For purposes of this sub-
paragraph, the term ‘walkaway 
clause’ means a provision in a 
qualified financial contract that, 
after calculation of a value of a 
party’s position or an amount due 
to or from 1 of the parties in ac-
cordance with its terms upon ter-
mination, liquidation, or accelera-
tion of the qualified financial con-
tract, either does not create a pay-
ment obligation of a party or ex-
tinguishes a payment obligation of 
a party in whole or in part solely 
because of such party’s status as a 
nondefaulting party.’’. 
(2) TECHNICAL AND CONFORMING AMEND-
MENT.—Section 207(c)(12)(A) of the Fed-
eral 
Credit 
Union 
Act 
(12 
U.S.C. 
1787(c)(12)(A)) is amended by inserting 
‘‘or the exercise of rights or powers by’’ 
after ‘‘the appointment of’’.
2472 
SEC. 5082C. AMENDMENTS RELATING TO TRANSFERS OF 
QUALIFIED FINANCIAL CONTRACTS. 
(a) FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.— 
(1) TRANSFERS OF QUALIFIED FINANCIAL 
CONTRACTS
TO
FINANCIAL
INSTITUTIONS.— 
Section 11(e)(9) of the Federal Deposit In-
surance Act (12 U.S.C. 1821(e)(9)) is 
amended to read as follows: 
‘‘(9) TRANSFER OF QUALIFIED FINANCIAL 
CONTRACTS.— 
‘‘(A) IN GENERAL.—In making any 
transfer of assets or liabilities of a de-
pository institution in default which 
includes any qualified financial con-
tract, the conservator or receiver for 
such depository institution shall ei-
ther— 
‘‘(i) transfer to one financial 
institution, other than a financial 
institution for which a conser-
vator, receiver, trustee in bank-
ruptcy, or other legal custodian 
has been appointed or which is 
otherwise the subject of a bank-
ruptcy or insolvency proceeding—
2473 
‘‘(I) all qualified financial 
contracts between any person 
or any affiliate of such person 
and the depository institution 
in default; 
‘‘(II) all claims of such 
person or any affiliate of such 
person against such deposi-
tory 
institution 
under 
any 
such contract (other than any 
claim which, under the terms 
of any such contract, is subor-
dinated to the claims of gen-
eral unsecured creditors of 
such institution); 
‘‘(III) all claims of such 
depository institution against 
such person or any affiliate of 
such person under any such 
contract; and 
‘‘(IV) all property securing 
or any other credit enhance-
ment for any contract de-
scribed in subclause (I) or any 
claim described in subclause
2474 
(II) or (III) under any such 
contract; or 
‘‘(ii) 
transfer 
none 
of 
the 
qualified 
financial 
contracts, 
claims, property or other credit 
enhancement referred to in clause 
(i) (with respect to such person 
and any affiliate of such person). 
‘‘(B) TRANSFER
TO
FOREIGN
BANK, 
FOREIGN
FINANCIAL
INSTITUTION, 
OR 
BRANCH OR AGENCY OF A FOREIGN BANK 
OR
FINANCIAL
INSTITUTION.—In trans-
ferring any qualified financial con-
tracts and related claims and prop-
erty under subparagraph (A)(i), the 
conservator or receiver for the deposi-
tory institution shall not make such 
transfer to a foreign bank, financial 
institution organized under the laws 
of a foreign country, or a branch or 
agency of a foreign bank or financial 
institution unless, under the law ap-
plicable to such bank, financial insti-
tution, branch or agency, to the quali-
fied financial contracts, and to any
2475 
netting contract, any security agree-
ment or arrangement or other credit 
enhancement related to one or more 
qualified financial contracts, the con-
tractual rights of the parties to such 
qualified financial contracts, netting 
contracts, security agreements or ar-
rangements, or other credit enhance-
ments are enforceable substantially to 
the same extent as permitted under 
this section. 
‘‘(C) TRANSFER OF CONTRACTS SUB-
JECT TO THE RULES OF A CLEARING OR-
GANIZATION.—In the event that a con-
servator or receiver transfers any 
qualified financial contract and re-
lated claims, property, and credit en-
hancements 
pursuant 
to 
subpara-
graph (A)(i) and such contract is 
cleared by or subject to the rules of a 
clearing organization, the clearing or-
ganization shall not be required to ac-
cept the transferee as a member by 
virtue of the transfer.
2476 
‘‘(D) DEFINITIONS.—For purposes of 
this paragraph, the term ‘financial in-
stitution’ means a broker or dealer, a 
depository institution, a futures com-
mission merchant, or any other insti-
tution, as determined by the Corpora-
tion by regulation to be a financial in-
stitution, and the term ‘clearing orga-
nization’ has the same meaning as in 
section 402 of the Federal Deposit In-
surance Corporation Improvement Act 
of 1991.’’. 
(2) NOTICE
TO
QUALIFIED
FINANCIAL 
CONTRACT
COUNTERPARTIES.—Section 
11(e)(10)(A) of the Federal Deposit Insur-
ance Act (12 U.S.C. 1821(e)(10)(A)) is 
amended in the material immediately fol-
lowing clause (ii) by striking ‘‘the conser-
vator’’ and all that follows through the 
period and inserting the following: ‘‘the 
conservator or receiver shall notify any 
person who is a party to any such con-
tract of such transfer by 5:00 p.m. (eastern 
time) on the business day following the 
date of the appointment of the receiver in
2477 
the case of a receivership, or the business 
day following such transfer in the case of 
a conservatorship.’’. 
(3) RIGHTS AGAINST RECEIVER AND CON-
SERVATOR
AND
TREATMENT
OF
BRIDGE 
BANKS.—Section 11(e)(10) of the Federal 
Deposit 
Insurance 
Act 
(12 
U.S.C. 
1821(e)(10)) is amended— 
(A) 
by 
redesignating 
subpara-
graph (B) as subparagraph (D); and 
(B) by inserting after subpara-
graph (A) the following new subpara-
graphs: 
‘‘(B) CERTAIN RIGHTS NOT ENFORCE-
ABLE.— 
‘‘(i) RECEIVERSHIP.—A person 
who is a party to a qualified fi-
nancial contract with an insured 
depository institution may not ex-
ercise any right that such person 
has to terminate, liquidate, or net 
such contract under paragraph 
(8)(A) of this subsection or section 
403 or 404 of the Federal Deposit 
Insurance Corporation Improve-
2478 
ment Act of 1991, solely by reason 
of or incidental to the appoint-
ment of a receiver for the deposi-
tory institution (or the insolvency 
or financial condition of the de-
pository institution for which the 
receiver has been appointed)— 
‘‘(I) until 5:00 p.m. (east-
ern time) on the business day 
following the date of the ap-
pointment of the receiver; or 
‘‘(II) after the person has 
received notice that the con-
tract 
has 
been 
transferred 
pursuant to paragraph (9)(A). 
‘‘(ii) CONSERVATORSHIP.—A per-
son who is a party to a qualified 
financial contract with an in-
sured depository institution may 
not exercise any right that such 
person has to terminate, liquidate, 
or net such contract under para-
graph (8)(E) of this subsection or 
section 403 or 404 of the Federal 
Deposit 
Insurance 
Corporation
2479 
Improvement Act of 1991, solely by 
reason of or incidental to the ap-
pointment of a conservator for the 
depository institution (or the in-
solvency or financial condition of 
the 
depository 
institution 
for 
which the conservator has been 
appointed). 
‘‘(iii) NOTICE.—For purposes of 
this paragraph, the Corporation 
as receiver or conservator of an 
insured 
depository 
institution 
shall be deemed to have notified a 
person who is a party to a quali-
fied financial contract with such 
depository institution if the Cor-
poration has taken steps reason-
ably calculated to provide notice 
to such person by the time speci-
fied in subparagraph (A). 
‘‘(C) 
TREATMENT
OF
BRIDGE 
BANKS.—The 
following 
institutions 
shall not be considered to be a finan-
cial institution for which a conser-
vator, receiver, trustee in bankruptcy,
2480 
or other legal custodian has been ap-
pointed or which is otherwise the sub-
ject of a bankruptcy or insolvency pro-
ceeding for purposes of paragraph (9): 
‘‘(i) A bridge bank. 
‘‘(ii) A depository institution 
organized by the Corporation, for 
which a conservator is appointed 
either— 
‘‘(I) immediately upon the 
organization of the institu-
tion; or 
‘‘(II) at the time of a pur-
chase and assumption trans-
action between the depository 
institution and the Corpora-
tion as receiver for a deposi-
tory institution in default.’’. 
(b) INSURED CREDIT UNIONS.— 
(1) TRANSFERS OF QUALIFIED FINANCIAL 
CONTRACTS
TO
FINANCIAL
INSTITUTIONS.— 
Section 207(c)(9) of the Federal Credit 
Union Act (12 U.S.C. 1787(c)(9)) is amend-
ed to read as follows:
2481 
‘‘(9) TRANSFER OF QUALIFIED FINANCIAL 
CONTRACTS.— 
‘‘(A) IN GENERAL.—In making any 
transfer of assets or liabilities of a 
credit union in default which includes 
any qualified financial contract, the 
conservator or liquidating agent for 
such credit union shall either— 
‘‘(i) transfer to 1 financial in-
stitution, other than a financial 
institution for which a conser-
vator, receiver, trustee in bank-
ruptcy, or other legal custodian 
has been appointed or which is 
otherwise the subject of a bank-
ruptcy or insolvency proceeding— 
‘‘(I) all qualified financial 
contracts between any person 
or any affiliate of such person 
and the credit union in de-
fault; 
‘‘(II) all claims of such 
person or any affiliate of such 
person against such credit 
union under any such con-
2482 
tract (other than any claim 
which, under the terms of any 
such contract, is subordinated 
to the claims of general unse-
cured creditors of such credit 
union); 
‘‘(III) all claims of such 
credit union against such per-
son or any affiliate of such 
person under any such con-
tract; and 
‘‘(IV) all property securing 
or any other credit enhance-
ment for any contract de-
scribed in subclause (I) or any 
claim described in subclause 
(II) or (III) under any such 
contract; or 
‘‘(ii) 
transfer 
none 
of 
the 
qualified 
financial 
contracts, 
claims, property or other credit 
enhancement referred to in clause 
(i) (with respect to such person 
and any affiliate of such person).
2483 
‘‘(B) TRANSFER
TO
FOREIGN
BANK, 
FOREIGN
FINANCIAL
INSTITUTION, 
OR 
BRANCH OR AGENCY OF A FOREIGN BANK 
OR
FINANCIAL
INSTITUTION.—In trans-
ferring any qualified financial con-
tracts and related claims and prop-
erty under subparagraph (A)(i), the 
conservator or liquidating agent for 
the credit union shall not make such 
transfer to a foreign bank, financial 
institution organized under the laws 
of a foreign country, or a branch or 
agency of a foreign bank or financial 
institution unless, under the law ap-
plicable to such bank, financial insti-
tution, branch or agency, to the quali-
fied financial contracts, and to any 
netting contract, any security agree-
ment or arrangement or other credit 
enhancement related to 1 or more 
qualified financial contracts, the con-
tractual rights of the parties to such 
qualified financial contracts, netting 
contracts, security agreements or ar-
rangements, or other credit enhance-
2484 
ments are enforceable substantially to 
the same extent as permitted under 
this section. 
‘‘(C) TRANSFER OF CONTRACTS SUB-
JECT TO THE RULES OF A CLEARING OR-
GANIZATION.—In the event that a con-
servator or liquidating agent trans-
fers any qualified financial contract 
and related claims, property, and 
credit enhancements pursuant to sub-
paragraph (A)(i) and such contract is 
cleared by or subject to the rules of a 
clearing organization, the clearing or-
ganization shall not be required to ac-
cept the transferee as a member by 
virtue of the transfer. 
‘‘(D) DEFINITIONS.—For purposes of 
this paragraph— 
‘‘(i) the term ‘financial institu-
tion’ means a broker or dealer, a 
depository institution, a futures 
commission merchant, a credit 
union, or any other institution, as 
determined by the Board by regu-
2485 
lation to be a financial institu-
tion; and 
‘‘(ii) the term ‘clearing organi-
zation’ has the same meaning as 
in section 402 of the Federal De-
posit Insurance Corporation Im-
provement Act of 1991.’’. 
(2) NOTICE
TO
QUALIFIED
FINANCIAL 
CONTRACT
COUNTERPARTIES.—Section 
207(c)(10)(A) of the Federal Credit Union 
Act (12 U.S.C. 1787(c)(10)(A)) is amended 
in the material immediately following 
clause (ii) by striking ‘‘the conservator’’ 
and all that follows through the period 
and inserting the following: ‘‘the conser-
vator or liquidating agent shall notify 
any person who is a party to any such 
contract of such transfer by 5:00 p.m. 
(eastern time) on the business day fol-
lowing the date of the appointment of the 
liquidating agent in the case of a liquida-
tion, or the business day following such 
transfer in the case of a conservator-
ship.’’.
2486 
(3) RIGHTS AGAINST LIQUIDATING AGENT 
AND
CONSERVATOR
AND
TREATMENT
OF 
BRIDGE
BANKS.—Section 207(c)(10) of the 
Federal Credit Union Act (12 U.S.C. 
1787(c)(10)) is amended— 
(A) 
by 
redesignating 
subpara-
graph (B) as subparagraph (D); and 
(B) by inserting after subpara-
graph (A) the following new subpara-
graphs: 
‘‘(B) CERTAIN RIGHTS NOT ENFORCE-
ABLE.— 
‘‘(i) 
LIQUIDATION.—A 
person 
who is a party to a qualified fi-
nancial contract with an insured 
credit union may not exercise any 
right that such person has to ter-
minate, liquidate, or net such con-
tract under paragraph (8)(A) of 
this subsection or section 403 or 
404 of the Federal Deposit Insur-
ance 
Corporation 
Improvement 
Act of 1991, solely by reason of or 
incidental to the appointment of a 
liquidating agent for the credit
2487 
union institution (or the insol-
vency or financial condition of the 
credit union for which the liqui-
dating 
agent 
has 
been 
ap-
pointed)— 
‘‘(I) until 5:00 p.m. (east-
ern time) on the business day 
following the date of the ap-
pointment of the liquidating 
agent; or 
‘‘(II) after the person has 
received notice that the con-
tract 
has 
been 
transferred 
pursuant to paragraph (9)(A). 
‘‘(ii) CONSERVATORSHIP.—A per-
son who is a party to a qualified 
financial contract with an in-
sured credit union may not exer-
cise any right that such person 
has to terminate, liquidate, or net 
such contract under paragraph 
(8)(E) of this subsection or section 
403 or 404 of the Federal Deposit 
Insurance Corporation Improve-
ment Act of 1991, solely by reason
2488 
of or incidental to the appoint-
ment of a conservator for the cred-
it union or the insolvency or fi-
nancial condition of the credit 
union for which the conservator 
has been appointed). 
‘‘(iii) NOTICE.—For purposes of 
this paragraph, the Board as con-
servator or liquidating agent of 
an insured credit union shall be 
deemed to have notified a person 
who is a party to a qualified fi-
nancial contract with such credit 
union if the Board has taken steps 
reasonably calculated to provide 
notice to such person by the time 
specified in subparagraph (A). 
‘‘(C) 
TREATMENT
OF
BRIDGE 
BANKS.—The 
following 
institutions 
shall not be considered to be a finan-
cial institution for which a conser-
vator, receiver, trustee in bankruptcy, 
or other legal custodian has been ap-
pointed or which is otherwise the sub-
2489 
ject of a bankruptcy or insolvency pro-
ceeding for purposes of paragraph (9): 
‘‘(i) A bridge bank. 
‘‘(ii) A credit union organized 
by the Board, for which a conser-
vator is appointed either— 
‘‘(I) immediately upon the 
organization 
of 
the 
credit 
union; or 
‘‘(II) at the time of a pur-
chase and assumption trans-
action 
between 
the 
credit 
union and the Board as re-
ceiver for a credit union in de-
fault.’’. 
SEC. 5082D. AMENDMENTS RELATING TO DISAFFIRMANCE 
OR REPUDIATION OF QUALIFIED FINANCIAL 
CONTRACTS. 
(a) FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e) of the Federal Deposit In-
surance Act (12 U.S.C. 1821(e)) is amended— 
(1) by redesignating paragraphs (11) 
through (15) as paragraphs (12) through 
(16), respectively;
2490 
(2) by inserting after paragraph (10) 
the following new paragraph: 
‘‘(11) DISAFFIRMANCE
OR
REPUDIATION 
OF QUALIFIED FINANCIAL CONTRACTS.—In ex-
ercising the rights of disaffirmance or re-
pudiation of a conservator or receiver 
with respect to any qualified financial 
contract to which an insured depository 
institution is a party, the conservator or 
receiver for such institution shall either— 
‘‘(A) disaffirm or repudiate all 
qualified 
financial 
contracts 
be-
tween— 
‘‘(i) any person or any affiliate 
of such person; and 
‘‘(ii) the depository institution 
in default; or 
‘‘(B) disaffirm or repudiate none 
of the qualified financial contracts re-
ferred to in subparagraph (A) (with 
respect to such person or any affiliate 
of such person).’’; and 
(3) by adding at the end the following 
new paragraph:
2491 
‘‘(17) SAVINGS CLAUSE.—The meanings 
of terms used in this subsection are appli-
cable for purposes of this subsection only, 
and shall not be construed or applied so 
as to challenge or affect the characteriza-
tion, definition, or treatment of any simi-
lar terms under any other statute, regula-
tion, or rule, including the Gramm-Leach- 
Bliley Act, the Legal Certainty for Bank 
Products Act of 2000, the securities laws 
(as that term is defined in section 3(a)(47) 
of the Securities Exchange Act of 1934), 
and the Commodity Exchange Act.’’. 
(b) 
INSURED
CREDIT
UNIONS.—Section 
207(c) of the Federal Credit Union Act (12 
U.S.C. 1787(c)) is amended— 
(1) by redesignating paragraphs (11), 
(12), and (13) as paragraphs (12), (13), 
and (14), respectively; 
(2) by inserting after paragraph (10) 
the following new paragraph: 
‘‘(11) DISAFFIRMANCE
OR
REPUDIATION 
OF QUALIFIED FINANCIAL CONTRACTS.—In ex-
ercising the rights of disaffirmance or re-
pudiation of a conservator or liquidating
2492 
agent with respect to any qualified finan-
cial contract to which an insured credit 
union is a party, the conservator or liqui-
dating agent for such credit union shall 
either— 
‘‘(A) disaffirm or repudiate all 
qualified 
financial 
contracts 
be-
tween— 
‘‘(i) any person or any affiliate 
of such person; and 
‘‘(ii) the credit union in de-
fault; or 
‘‘(B) disaffirm or repudiate none 
of the qualified financial contracts re-
ferred to in subparagraph (A) (with 
respect to such person or any affiliate 
of such person).’’; and 
(3) by adding at the end the following 
new paragraph: 
‘‘(15) SAVINGS CLAUSE.—The meanings 
of terms used in this subsection are appli-
cable for purposes of this subsection only, 
and shall not be construed or applied so 
as to challenge or affect the characteriza-
tion, definition, or treatment of any simi-
2493 
lar terms under any other statute, regula-
tion, or rule, including the Gramm-Leach- 
Bliley Act, the Legal Certainty for Bank 
Products Act of 2000, the securities laws 
(as that term is defined in section (a)(47) 
of the Securities Exchange Act of 1934), 
and the Commodity Exchange Act.’’. 
SEC. 5082E. CLARIFYING AMENDMENT RELATING TO MAS-
TER AGREEMENTS. 
(a) FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e)(8)(D)(vii) of the Federal 
Deposit 
Insurance 
Act 
(12 
U.S.C. 
1821(e)(8)(D)(vii)) is amended to read as fol-
lows: 
‘‘(vii) TREATMENT
OF
MASTER 
AGREEMENT
AS
ONE
AGREEMENT.— 
Any master agreement for any 
contract or agreement described 
in any preceding clause of this 
subparagraph 
(or 
any 
master 
agreement for such master agree-
ment 
or 
agreements), 
together 
with all supplements to such mas-
ter agreement, shall be treated as 
a single agreement and a single
2494 
qualified financial contract. If a 
master agreement contains provi-
sions relating to agreements or 
transactions that are not them-
selves 
qualified 
financial 
con-
tracts, the master agreement shall 
be deemed to be a qualified finan-
cial contract only with respect to 
those transactions that are them-
selves 
qualified 
financial 
con-
tracts.’’. 
(b) 
INSURED
CREDIT
UNIONS.—Section 
207(c)(8)(D) of the Federal Credit Union Act 
(12 U.S.C. 1787(c)(8)(D)) is amended by insert-
ing after clause (vi) (as added by section 
5082A(f) of this subchapter) the following new 
clause: 
‘‘(vii) TREATMENT
OF
MASTER 
AGREEMENT
AS
ONE
AGREEMENT.— 
Any master agreement for any 
contract or agreement described 
in any preceding clause of this 
subparagraph 
(or 
any 
master 
agreement for such master agree-
ment 
or 
agreements), 
together
2495 
with all supplements to such mas-
ter agreement, shall be treated as 
a single agreement and a single 
qualified financial contract. If a 
master agreement contains provi-
sions relating to agreements or 
transactions that are not them-
selves 
qualified 
financial 
con-
tracts, the master agreement shall 
be deemed to be a qualified finan-
cial contract only with respect to 
those transactions that are them-
selves 
qualified 
financial 
con-
tracts.’’. 
SEC. 5082F. FEDERAL DEPOSIT INSURANCE CORPORATION 
IMPROVEMENT ACT OF 1991. 
(a) DEFINITIONS.—Section 402 of the Fed-
eral Deposit Insurance Corporation Improve-
ment Act of 1991 (12 U.S.C. 4402) is amended— 
(1) in paragraph (2)— 
(A) in subparagraph (A)(ii), by in-
serting before the semicolon ‘‘, or is ex-
empt from such registration by order 
of the Securities and Exchange Com-
mission’’; and
2496 
(B) in subparagraph (B), by in-
serting before the period ‘‘, that has 
been granted an exemption under sec-
tion 4(c)(1) of the Commodity Ex-
change Act, or that is a multilateral 
clearing organization (as defined in 
section 408 of this Act)’’; 
(2) in paragraph (6)— 
(A) 
by 
redesignating 
subpara-
graphs (B) through (D) as subpara-
graphs (C) through (E), respectively; 
(B) by inserting after subpara-
graph (A) the following new subpara-
graph: 
‘‘(B) an uninsured national bank 
or an uninsured State bank that is a 
member of the Federal Reserve Sys-
tem, if the national bank or State 
member bank is not eligible to make 
application to become an insured 
bank under section 5 of the Federal 
Deposit Insurance Act;’’; and 
(C) by amending subparagraph 
(C) (as redesignated) to read as fol-
lows:
2497 
‘‘(C) a branch or agency of a for-
eign bank, a foreign bank and any 
branch or agency of the foreign bank, 
or the foreign bank that established 
the branch or agency, as those terms 
are defined in section 1(b) of the Inter-
national Banking Act of 1978;’’; 
(3) in paragraph (11), by inserting be-
fore the period ‘‘and any other clearing 
organization with which such clearing or-
ganization has a netting contract’’; 
(4) by amending paragraph (14)(A)(i) 
to read as follows: 
‘‘(i) means a contract or agree-
ment between 2 or more financial 
institutions, 
clearing 
organiza-
tions, or members that provides 
for netting present or future pay-
ment obligations or payment enti-
tlements (including liquidation or 
close out values relating to such 
obligations 
or 
entitlements) 
among the parties to the agree-
ment; and’’; and
2498 
(5) by adding at the end the following 
new paragraph: 
‘‘(15) PAYMENT.—The term ‘payment’ 
means a payment of United States dollars, 
another currency, or a composite cur-
rency, and a noncash delivery, including 
a payment or delivery to liquidate an 
unmatured obligation.’’. 
(b) ENFORCEABILITY OF BILATERAL NETTING 
CONTRACTS.—Section 403 of the Federal De-
posit Insurance Corporation Improvement Act 
of 1991 (12 U.S.C. 4403) is amended— 
(1) by striking subsection (a) and in-
serting the following: 
‘‘(a) GENERAL RULE.—Notwithstanding any 
other provision of State or Federal law (other 
than paragraphs (8)(E), (8)(F), and (10)(B) of 
section 11(e) of the Federal Deposit Insurance 
Act, paragraphs (8)(E), (8)(F), and (10)(B) of 
section 207(c) of the Federal Credit Union Act, 
or any order authorized under section 5(b)(2) 
of the Securities Investor Protection Act of 
1970), the covered contractual payment obliga-
tions and the covered contractual payment en-
titlements between any 2 financial institutions
2499 
shall be netted in accordance with, and sub-
ject to the conditions of, the terms of any appli-
cable netting contract (except as provided in 
section 561(b)(2) of title 11, United States 
Code).’’; and 
(2) by adding at the end the following 
new subsection: 
‘‘(f) ENFORCEABILITY
OF SECURITY AGREE-
MENTS.—The provisions of any security agree-
ment or arrangement or other credit enhance-
ment related to one or more netting contracts 
between any 2 financial institutions shall be 
enforceable in accordance with their terms 
(except as provided in section 561(b)(2) of title 
11, United States Code), and shall not be 
stayed, avoided, or otherwise limited by any 
State or Federal law (other than paragraphs 
(8)(E), (8)(F), and (10)(B) of section 11(e) of the 
Federal Deposit Insurance Act, paragraphs 
(8)(E), (8)(F), and (10)(B) of section 207(c) of 
the Federal Credit Union Act, and section 
5(b)(2) of the Securities Investor Protection Act 
of 1970).’’. 
(c) ENFORCEABILITY OF CLEARING ORGANIZA-
TION NETTING CONTRACTS.—Section 404 of the
2500 
Federal Deposit Insurance Corporation Im-
provement Act of 1991 (12 U.S.C. 4404) is 
amended— 
(1) by striking subsection (a) and in-
serting the following: 
‘‘(a) GENERAL RULE.—Notwithstanding any 
other provision of State or Federal law (other 
than paragraphs (8)(E), (8)(F), and (10)(B) of 
section 11(e) of the Federal Deposit Insurance 
Act, paragraphs (8)(E), (8)(F), and (10)(B) of 
section 207(c) of the Federal Credit Union Act, 
and any order authorized under section 
5(b)(2) of the Securities Investor Protection Act 
of 1970), the covered contractual payment obli-
gations and the covered contractual payment 
entitlements of a member of a clearing organi-
zation to and from all other members of a 
clearing organization shall be netted in ac-
cordance with and subject to the conditions of 
any applicable netting contract (except as pro-
vided in section 561(b)(2) of title 11, United 
States Code).’’; and 
(2) by adding at the end the following 
new subsection:
2501 
‘‘(h) ENFORCEABILITY OF SECURITY AGREE-
MENTS.—The provisions of any security agree-
ment or arrangement or other credit enhance-
ment related to one or more netting contracts 
between any 2 members of a clearing organiza-
tion shall be enforceable in accordance with 
their terms (except as provided in section 
561(b)(2) of title 11, United States Code), and 
shall not be stayed, avoided, or otherwise lim-
ited by any State or Federal law (other than 
paragraphs (8)(E), (8)(F), and (10)(B) of sec-
tion 11(e) of the Federal Deposit Insurance 
Act, paragraphs (8)(E), (8)(F), and (10)(B) of 
section 207(c) of the Federal Credit Union Act, 
and section 5(b)(2) of the Securities Investor 
Protection Act of 1970).’’. 
(d) ENFORCEABILITY
OF CONTRACTS WITH 
UNINSURED NATIONAL BANKS, UNINSURED FED-
ERAL BRANCHES AND AGENCIES, CERTAIN UNIN-
SURED STATE MEMBER BANKS, AND EDGE ACT 
CORPORATIONS.—The Federal Deposit Insur-
ance Corporation Improvement Act of 1991 (12 
U.S.C. 4401 et seq.) is amended— 
(1) by redesignating section 407 as sec-
tion 407A; and
2502 
(2) by inserting after section 406 the 
following new section: 
‘‘SEC. 407. TREATMENT OF CONTRACTS WITH UNINSURED 
NATIONAL 
BANKS, 
UNINSURED 
FEDERAL 
BRANCHES AND AGENCIES, CERTAIN UNIN-
SURED STATE MEMBER BANKS, AND EDGE 
ACT CORPORATIONS. 
‘‘(a) IN
GENERAL.—Notwithstanding any 
other provision of law, paragraphs (8), (9), 
(10), and (11) of section 11(e) of the Federal De-
posit Insurance Act shall apply to an unin-
sured national bank or uninsured Federal 
branch or Federal agency, a corporation char-
tered under section 25A of the Federal Reserve 
Act, or an uninsured State member bank 
which operates, or operates as, a multilateral 
clearing organization pursuant to section 409 
of this Act, except that for such purpose— 
‘‘(1) any reference to the ‘Corporation 
as receiver’ or ‘the receiver or the Cor-
poration’ shall refer to the receiver ap-
pointed by the Comptroller of the Cur-
rency in the case of an uninsured na-
tional bank or uninsured Federal branch 
or agency, or to the receiver appointed by
2503 
the Board of Governors of the Federal Re-
serve System in the case of a corporation 
chartered under section 25A of the Fed-
eral Reserve Act or an uninsured State 
member bank; 
‘‘(2) any reference to the ‘Corporation’ 
(other than in section 11(e)(8)(D) of such 
Act), the ‘Corporation, whether acting as 
such or as conservator or receiver’, a ‘re-
ceiver’, or a ‘conservator’ shall refer to the 
receiver or conservator appointed by the 
Comptroller of the Currency in the case of 
an uninsured national bank or uninsured 
Federal branch or agency, or to the re-
ceiver or conservator appointed by the 
Board of Governors of the Federal Reserve 
System in the case of a corporation char-
tered under section 25A of the Federal Re-
serve Act or an uninsured State member 
bank; and 
‘‘(3) any reference to an ‘insured de-
pository institution’ or ‘depository institu-
tion’ shall refer to an uninsured national 
bank, an uninsured Federal branch or 
Federal agency, a corporation chartered
2504 
under section 25A of the Federal Reserve 
Act, or an uninsured State member bank 
which operates, or operates as, a multilat-
eral clearing organization pursuant to 
section 409 of this Act. 
‘‘(b) LIABILITY.—The liability of a receiver 
or conservator of an uninsured national bank, 
uninsured Federal branch or agency, a cor-
poration chartered under section 25A of the 
Federal Reserve Act, or an uninsured State 
member bank which operates, or operates as, 
a multilateral clearing organization pursuant 
to section 409 of this Act, shall be determined 
in the same manner and subject to the same 
limitations that apply to receivers and con-
servators of insured depository institutions 
under section 11(e) of the Federal Deposit In-
surance Act. 
‘‘(c) REGULATORY AUTHORITY.— 
‘‘(1) IN GENERAL.—The Comptroller of 
the Currency in the case of an uninsured 
national 
bank 
or 
uninsured 
Federal 
branch or agency and the Board of Gov-
ernors of the Federal Reserve System in 
the case of a corporation chartered under
2505 
section 25A of the Federal Reserve Act, or 
an uninsured State member bank that op-
erates, or operates as, a multilateral 
clearing organization pursuant to section 
409 of this Act, in consultation with the 
Federal Deposit Insurance Corporation, 
may each promulgate regulations solely to 
implement this section. 
‘‘(2) SPECIFIC
REQUIREMENT.—In pro-
mulgating regulations, limited solely to 
implementing paragraphs (8), (9), (10), 
and (11) of section 11(e) of the Federal De-
posit Insurance Act, the Comptroller of 
the Currency and the Board of Governors 
of the Federal Reserve System each shall 
ensure that the regulations generally are 
consistent with the regulations and poli-
cies of the Federal Deposit Insurance Cor-
poration adopted pursuant to the Federal 
Deposit Insurance Act. 
‘‘(d) DEFINITIONS.—For purposes of this 
section, the terms ‘Federal branch’, ‘Federal 
agency’, and ‘foreign bank’ have the same 
meanings as in section 1(b) of the Inter-
national Banking Act of 1978.’’.
2506 
SEC. 5082G. BANKRUPTCY CODE AMENDMENTS. 
(a) DEFINITIONS
OF FORWARD CONTRACT, 
REPURCHASE AGREEMENT, SECURITIES CLEARING 
AGENCY, SWAP AGREEMENT, COMMODITY CON-
TRACT, AND SECURITIES CONTRACT.—Title 11, 
United States Code, is amended— 
(1) in section 101— 
(A) in paragraph (25)— 
(i) by striking ‘‘means a con-
tract’’ and inserting ‘‘means— 
‘‘(A) a contract’’; 
(ii) by striking ‘‘, or any com-
bination thereof or option there-
on;’’ and inserting ‘‘, or any other 
similar agreement;’’; and 
(iii) by adding at the end the 
following: 
‘‘(B) any combination of agree-
ments or transactions referred to in 
subparagraphs (A) and (C); 
‘‘(C) any option to enter into an 
agreement or transaction referred to 
in subparagraph (A) or (B); 
‘‘(D) a master agreement that pro-
vides for an agreement or transaction 
referred to in subparagraph (A), (B),
2507 
or (C), together with all supplements 
to any such master agreement, with-
out regard to whether such master 
agreement provides for an agreement 
or transaction that is not a forward 
contract under this paragraph, except 
that such master agreement shall be 
considered to be a forward contract 
under this paragraph only with re-
spect to each agreement or trans-
action under such master agreement 
that is referred to in subparagraph 
(A), (B), or (C); or 
‘‘(E) any security agreement or ar-
rangement, or other credit enhance-
ment related to any agreement or 
transaction referred to in subpara-
graph (A), (B), (C), or (D), including 
any guarantee or reimbursement obli-
gation by or to a forward contract 
merchant or financial participant in 
connection with any agreement or 
transaction referred to in any such 
subparagraph, but not to exceed the 
damages in connection with any such
2508 
agreement or transaction, measured 
in accordance with section 562 of this 
title;’’; 
(B) in paragraph (46), by striking 
‘‘on any day during the period begin-
ning 90 days before the date of’’ and 
inserting ‘‘at any time before’’; 
(C) by amending paragraph (47) 
to read as follows: 
‘‘(47) ‘repurchase agreement’ (which 
definition also applies to a reverse repur-
chase agreement)— 
‘‘(A) means— 
‘‘(i) an agreement, including 
related terms, which provides for 
the transfer of one or more certifi-
cates of deposit, mortgage related 
securities (as defined in section 3 
of the Securities Exchange Act of 
1934), mortgage loans, interests in 
mortgage 
related 
securities 
or 
mortgage loans, eligible bankers’ 
acceptances, qualified foreign gov-
ernment securities (defined as a 
security that is a direct obligation
2509 
of, or that is fully guaranteed by, 
the central government of a mem-
ber of the Organization for Eco-
nomic Cooperation and Develop-
ment), or securities that are direct 
obligations of, or that are fully 
guaranteed by, the United States 
or any agency of the United States 
against the transfer of funds by 
the transferee of such certificates 
of deposit, eligible bankers’ ac-
ceptances, 
securities, 
mortgage 
loans, or interests, with a simulta-
neous agreement by such trans-
feree to transfer to the transferor 
thereof certificates of deposit, eli-
gible bankers’ acceptance, securi-
ties, mortgage loans, or interests 
of the kind described in this 
clause, at a date certain not later 
than 1 year after such transfer or 
on demand, against the transfer 
of funds;
2510 
‘‘(ii) any combination of agree-
ments or transactions referred to 
in clauses (i) and (iii); 
‘‘(iii) an option to enter into 
an agreement or transaction re-
ferred to in clause (i) or (ii); 
‘‘(iv) a master agreement that 
provides for an agreement or 
transaction referred to in clause 
(i), (ii), or (iii), together with all 
supplements to any such master 
agreement, 
without 
regard 
to 
whether such master agreement 
provides for an agreement or 
transaction that is not a repur-
chase agreement under this para-
graph, except that such master 
agreement shall be considered to 
be a repurchase agreement under 
this paragraph only with respect 
to each agreement or transaction 
under the master agreement that 
is referred to in clause (i), (ii), or 
(iii); or
2511 
‘‘(v) any security agreement or 
arrangement or other credit en-
hancement related to any agree-
ment or transaction referred to in 
clause (i), (ii), (iii), or (iv), includ-
ing any guarantee or reimburse-
ment obligation by or to a repo 
participant or financial partici-
pant 
in 
connection 
with 
any 
agreement or transaction referred 
to in any such clause, but not to 
exceed the damages in connection 
with any such agreement or trans-
action, measured in accordance 
with section 562 of this title; and 
‘‘(B) does not include a repurchase 
obligation under a participation in a 
commercial mortgage loan;’’; 
(D) in paragraph (48), by insert-
ing ‘‘, or exempt from such registra-
tion under such section pursuant to 
an order of the Securities and Ex-
change Commission,’’ after ‘‘1934’’; 
and
2512 
(E) by amending paragraph (53B) 
to read as follows: 
‘‘(53B) ‘swap agreement’— 
‘‘(A) means— 
‘‘(i) any agreement, including 
the terms and conditions incor-
porated 
by 
reference 
in 
such 
agreement, which is— 
‘‘(I) an interest rate swap, 
option, 
future, 
or 
forward 
agreement, including a rate 
floor, rate cap, rate collar, 
cross-currency rate swap, and 
basis swap; 
‘‘(II) a spot, same day-to-
morrow, 
tomorrow-next, 
for-
ward, or other foreign ex-
change 
or 
precious 
metals 
agreement; 
‘‘(III) a currency swap, op-
tion, future, or forward agree-
ment; 
‘‘(IV) an equity index or 
equity swap, option, future, or 
forward agreement;
2513 
‘‘(V) a debt index or debt 
swap, option, future, or for-
ward agreement; 
‘‘(VI) a total return, credit 
spread or credit swap, option, 
future, or forward agreement; 
‘‘(VII) a commodity index 
or a commodity swap, option, 
future, or forward agreement; 
or 
‘‘(VIII) a weather swap, 
weather derivative, or weather 
option; 
‘‘(ii) any agreement or trans-
action that is similar to any other 
agreement or transaction referred 
to in this paragraph and that— 
‘‘(I) is of a type that has 
been, is presently, or in the fu-
ture becomes, the subject of re-
current dealings in the swap 
markets (including terms and 
conditions incorporated by ref-
erence therein); and
2514 
‘‘(II) is a forward, swap, 
future, or option on one or 
more rates, currencies, com-
modities, equity securities, or 
other equity instruments, debt 
securities or other debt instru-
ments, quantitative measures 
associated with an occurrence, 
extent of an occurrence, or 
contingency associated with a 
financial, commercial, or eco-
nomic consequence, or eco-
nomic or financial indices or 
measures of economic or fi-
nancial risk or value; 
‘‘(iii) 
any 
combination 
of 
agreements or transactions re-
ferred to in this subparagraph; 
‘‘(iv) any option to enter into 
an agreement or transaction re-
ferred to in this subparagraph; 
‘‘(v) a master agreement that 
provides for an agreement or 
transaction referred to in clause 
(i), (ii), (iii), or (iv), together with
2515 
all supplements to any such mas-
ter agreement, and without regard 
to whether the master agreement 
contains an agreement or trans-
action that is not a swap agree-
ment under this paragraph, ex-
cept that the master agreement 
shall be considered to be a swap 
agreement under this paragraph 
only with respect to each agree-
ment or transaction under the 
master agreement that is referred 
to in clause (i), (ii), (iii), or (iv); or 
‘‘(vi) any security agreement 
or arrangement or other credit en-
hancement related to any agree-
ments or transactions referred to 
in clause (i) through (v), includ-
ing any guarantee or reimburse-
ment obligation by or to a swap 
participant or financial partici-
pant 
in 
connection 
with 
any 
agreement or transaction referred 
to in any such clause, but not to 
exceed the damages in connection
2516 
with any such agreement or trans-
action, measured in accordance 
with section 562 of this title; and 
‘‘(B) is applicable for purposes of 
this title only, and shall not be con-
strued or applied so as to challenge or 
affect the characterization, definition, 
or treatment of any swap agreement 
under any other statute, regulation, or 
rule, including the Securities Act of 
1933, the Securities Exchange Act of 
1934, the Public Utility Holding Com-
pany Act of 1935, the Trust Indenture 
Act of 1939, the Investment Company 
Act of 1940, the Investment Advisers 
Act of 1940, the Securities Investor 
Protection Act of 1970, the Commodity 
Exchange Act, the Gramm-Leach-Bli-
ley Act, and the Legal Certainty for 
Bank Products Act of 2000;’’; 
(2) in section 741(7), by striking para-
graph (7) and inserting the following: 
‘‘(7) ‘securities contract’— 
‘‘(A) means—
2517 
‘‘(i) a contract for the pur-
chase, sale, or loan of a security, a 
certificate of deposit, a mortgage 
loan or any interest in a mortgage 
loan, a group or index of securi-
ties, certificates of deposit, or 
mortgage loans or interests there-
in (including an interest therein 
or based on the value thereof), or 
option on any of the foregoing, in-
cluding an option to purchase or 
sell any such security, certificate 
of deposit, mortgage loan, interest, 
group or index, or option, and in-
cluding any repurchase or reverse 
repurchase transaction on any 
such security, certificate of de-
posit, 
mortgage 
loan, 
interest, 
group or index, or option; 
‘‘(ii) any option entered into 
on a national securities exchange 
relating to foreign currencies; 
‘‘(iii) the guarantee by or to 
any securities clearing agency of a 
settlement of cash, securities, cer-
2518 
tificates 
of 
deposit, 
mortgage 
loans or interests therein, group 
or index of securities, or mortgage 
loans or interests therein (includ-
ing any interest therein or based 
on the value thereof), or option on 
any of the foregoing, including an 
option to purchase or sell any 
such security, certificate of de-
posit, 
mortgage 
loan, 
interest, 
group or index, or option; 
‘‘(iv) any margin loan; 
‘‘(v) any other agreement or 
transaction that is similar to an 
agreement or transaction referred 
to in this subparagraph; 
‘‘(vi) any combination of the 
agreements or transactions re-
ferred to in this subparagraph; 
‘‘(vii) any option to enter into 
any agreement or transaction re-
ferred to in this subparagraph; 
‘‘(viii) 
a 
master 
agreement 
that provides for an agreement or 
transaction referred to in clause
2519 
(i), (ii), (iii), (iv), (v), (vi), or (vii), 
together with all supplements to 
any such master agreement, with-
out regard to whether the master 
agreement provides for an agree-
ment or transaction that is not a 
securities contract under this sub-
paragraph, except that such mas-
ter agreement shall be considered 
to be a securities contract under 
this subparagraph only with re-
spect to each agreement or trans-
action under such master agree-
ment that is referred to in clause 
(i), (ii), (iii), (iv), (v), (vi), or (vii); 
or 
‘‘(ix) any security agreement 
or arrangement or other credit en-
hancement related to any agree-
ment or transaction referred to in 
this subparagraph, including any 
guarantee or reimbursement obli-
gation by or to a stockbroker, se-
curities clearing agency, financial 
institution, or financial partici-
2520 
pant 
in 
connection 
with 
any 
agreement or transaction referred 
to in this subparagraph, but not 
to exceed the damages in connec-
tion with any such agreement or 
transaction, measured in accord-
ance with section 562 of this title; 
and 
‘‘(B) does not include any pur-
chase, sale, or repurchase obligation 
under a participation in a commer-
cial mortgage loan;’’; and 
(3) in section 761(4)— 
(A) by striking ‘‘or’’ at the end of 
subparagraph (D); and 
(B) by adding at the end the fol-
lowing: 
‘‘(F) any other agreement or trans-
action that is similar to an agreement 
or transaction referred to in this 
paragraph; 
‘‘(G) any combination of the agree-
ments or transactions referred to in 
this paragraph;
2521 
‘‘(H) any option to enter into an 
agreement or transaction referred to 
in this paragraph; 
‘‘(I) a master agreement that pro-
vides for an agreement or transaction 
referred to in subparagraph (A), (B), 
(C), (D), (E), (F), (G), or (H), together 
with all supplements to such master 
agreement, without regard to whether 
the master agreement provides for an 
agreement or transaction that is not a 
commodity contract under this para-
graph, except that the master agree-
ment shall be considered to be a com-
modity contract under this paragraph 
only with respect to each agreement or 
transaction under the master agree-
ment that is referred to in subpara-
graph (A), (B), (C), (D), (E), (F), (G), or 
(H); or 
‘‘(J) any security agreement or ar-
rangement or other credit enhance-
ment related to any agreement or 
transaction referred to in this para-
graph, including any guarantee or re-
2522 
imbursement obligation by or to a 
commodity broker or financial partic-
ipant in connection with any agree-
ment or transaction referred to in this 
paragraph, but not to exceed the dam-
ages in connection with any such 
agreement or transaction, measured 
in accordance with section 562 of this 
title;’’. 
(b) DEFINITIONS OF FINANCIAL INSTITUTION, 
FINANCIAL
PARTICIPANT, AND
FORWARD
CON-
TRACT
MERCHANT.—Section 101 of title 11, 
United States Code, is amended— 
(1) by striking paragraph (22) and in-
serting the following: 
‘‘(22) ‘financial institution’ means— 
‘‘(A) a Federal reserve bank, or an 
entity (domestic or foreign) that is a 
commercial or savings bank, indus-
trial savings bank, savings and loan 
association, trust company, federally- 
insured credit union, or receiver or 
conservator for such entity and, when 
any such Federal reserve bank, re-
ceiver, conservator or entity is acting
2523 
as agent or custodian for a customer 
in connection with a securities con-
tract (as defined in section 741) such 
customer; or 
‘‘(B) in connection with a securi-
ties contract (as defined in section 
741) 
an 
investment 
company 
reg-
istered under the Investment Company 
Act of 1940;’’; 
(2) by inserting after paragraph (22) 
the following: 
‘‘(22A) ‘financial participant’ means— 
‘‘(A) an entity that, at the time it 
enters into a securities contract, com-
modity contract, swap agreement, re-
purchase agreement, or forward con-
tract, or at the time of the filing of the 
petition, has one or more agreements 
or transactions described in para-
graph (1), (2), (3), (4), (5), or (6) of sec-
tion 561(a) with the debtor or any 
other entity (other than an affiliate) 
of a total gross dollar value of not less 
than $1,000,000,000 in notional or ac-
tual principal amount outstanding on
2524 
any day during the previous 15-month 
period, or has gross mark-to-market 
positions of not less than $100,000,000 
(aggregated across counterparties) in 
one or more such agreements or trans-
actions with the debtor or any other 
entity (other than an affiliate) on any 
day during the previous 15-month pe-
riod; or 
‘‘(B) a clearing organization (as 
defined in section 402 of the Federal 
Deposit Insurance Corporation Im-
provement Act of 1991);’’; and 
(3) by striking paragraph (26) and in-
serting the following: 
‘‘(26) 
‘forward 
contract 
merchant’ 
means a Federal reserve bank, or an enti-
ty the business of which consists in whole 
or in part of entering into forward con-
tracts as or with merchants in a com-
modity (as defined in section 761) or any 
similar good, article, service, right, or in-
terest which is presently or in the future 
becomes the subject of dealing in the for-
ward contract trade;’’.
2525 
(c) DEFINITION OF MASTER NETTING AGREE-
MENT AND MASTER NETTING AGREEMENT PARTIC-
IPANT.—Section 101 of title 11, United States 
Code, is amended by inserting after paragraph 
(38) the following new paragraphs: 
‘‘(38A) ‘master netting agreement’— 
‘‘(A) means an agreement pro-
viding for the exercise of rights, in-
cluding rights of netting, setoff, liq-
uidation, termination, acceleration, or 
close out, under or in connection with 
one or more contracts that are de-
scribed in any one or more of para-
graphs (1) through (5) of section 
561(a), or any security agreement or 
arrangement or other credit enhance-
ment related to one or more of the 
foregoing, including any guarantee or 
reimbursement obligation related to 1 
or more of the foregoing; and 
‘‘(B) if the agreement contains 
provisions relating to agreements or 
transactions that are not contracts 
described in paragraphs (1) through 
(5) of section 561(a), shall be deemed
2526 
to be a master netting agreement only 
with respect to those agreements or 
transactions that are described in any 
one 
or 
more 
of 
paragraphs 
(1) 
through (5) of section 561(a); 
‘‘(38B) ‘master netting agreement par-
ticipant’ means an entity that, at any time 
before the filing of the petition, is a party 
to an outstanding master netting agree-
ment with the debtor;’’. 
(d) SWAP AGREEMENTS, SECURITIES CON-
TRACTS, COMMODITY CONTRACTS, FORWARD CON-
TRACTS, REPURCHASE AGREEMENTS, AND MASTER 
NETTING AGREEMENTS UNDER THE AUTOMATIC- 
STAY.— 
(1) IN GENERAL.—Section 362(b) of title 
11, United States Code, is amended— 
(A) in paragraph (6), by inserting 
‘‘, pledged to, under the control of,’’ 
after ‘‘held by’’; 
(B) in paragraph (7), by inserting 
‘‘, pledged to, under the control of,’’ 
after ‘‘held by’’; 
(C) by striking paragraph (17) 
and inserting the following:
2527 
‘‘(17) under subsection (a), of the 
setoff by a swap participant or financial 
participant of a mutual debt and claim 
under or in connection with one or more 
swap agreements that constitutes the 
setoff of a claim against the debtor for 
any payment or other transfer of property 
due from the debtor under or in connec-
tion with any swap agreement against 
any payment due to the debtor from the 
swap participant or financial participant 
under or in connection with any swap 
agreement or against cash, securities, or 
other property held by, pledged to, under 
the control of, or due from such swap par-
ticipant or financial participant to mar-
gin, guarantee, secure, or settle any swap 
agreement;’’; 
(D) in paragraph (18) by striking 
the period at the end and inserting 
‘‘; or’’; and 
(E) by inserting after paragraph 
(18) the following new paragraph: 
‘‘(19) under subsection (a), of the 
setoff by a master netting agreement par-
2528 
ticipant of a mutual debt and claim 
under or in connection with one or more 
master netting agreements or any con-
tract or agreement subject to such agree-
ments that constitutes the setoff of a 
claim against the debtor for any payment 
or other transfer of property due from the 
debtor under or in connection with such 
agreements or any contract or agreement 
subject to such agreements against any 
payment due to the debtor from such mas-
ter netting agreement participant under 
or in connection with such agreements or 
any contract or agreement subject to such 
agreements or against cash, securities, or 
other property held by, pledged to, under 
the control of, or due from such master 
netting agreement participant to margin, 
guarantee, secure, or settle such agree-
ments or any contract or agreement sub-
ject to such agreements, to the extent that 
such participant is eligible to exercise 
such offset rights under paragraph (6), 
(7), or (17) for each individual contract
2529 
covered by the master netting agreement 
in issue.’’. 
(2) LIMITATION.—Section 362 of title 11, 
United States Code, is amended by adding 
at the end the following: 
‘‘(i) The exercise of rights not subject to the 
stay arising under subsection (a) pursuant to 
paragraph (6), (7), (17), or (19) of subsection 
(b) shall not be stayed by any order of a court 
or administrative agency in any proceeding 
under this title.’’. 
(e) 
LIMITATION
OF
AVOIDANCE
POWERS 
UNDER MASTER NETTING AGREEMENT.—Section 
546 of title 11, United States Code, is amend-
ed— 
(1) in subsection (g) (as added by sec-
tion 103 of Public Law 101–311)— 
(A) by striking ‘‘under a swap 
agreement’’; 
(B) by striking ‘‘in connection with 
a swap agreement’’ and inserting 
‘‘under or in connection with any 
swap agreement’’; and
2530 
(C) by inserting ‘‘or financial par-
ticipant’’ after ‘‘swap participant’’ 
each place such term appears; and 
(2) by adding at the end the following: 
‘‘(i) Notwithstanding sections 544, 545, 547, 
548(a)(1)(B), and 548(b) the trustee may not 
avoid a transfer made by or to a master net-
ting agreement participant under or in con-
nection with any master netting agreement or 
any individual contract covered thereby that 
is made before the commencement of the case, 
except under section 548(a)(1)(A) and except to 
the extent that the trustee could otherwise 
avoid such a transfer made under an indi-
vidual contract covered by such master netting 
agreement.’’. 
(f) FRAUDULENT TRANSFERS OF MASTER NET-
TING AGREEMENTS.—Section 548(d)(2) of title 
11, United States Code, is amended— 
(1) in subparagraph (C), by striking 
‘‘and’’ at the end; 
(2) in subparagraph (D), by striking 
the period and inserting ‘‘; and’’; and 
(3) by adding at the end the following 
new subparagraph:
2531 
‘‘(E) a master netting agreement par-
ticipant that receives a transfer in con-
nection with a master netting agreement 
or any individual contract covered there-
by takes for value to the extent of such 
transfer, except that, with respect to a 
transfer under any individual contract 
covered thereby, to the extent that such 
master netting agreement participant oth-
erwise did not take (or is otherwise not 
deemed to have taken) such transfer for 
value.’’. 
(g) TERMINATION OR ACCELERATION OF SE-
CURITIES CONTRACTS.—Section 555 of title 11, 
United States Code, is amended— 
(1) by amending the section heading 
to read as follows: 
‘‘§ 555. Contractual right to liquidate, terminate, or 
accelerate a securities contract’’; 
(2) in the first sentence, by striking 
‘‘liquidation’’ and inserting ‘‘liquidation, 
termination, or acceleration’’. 
(h) TERMINATION OR ACCELERATION OF COM-
MODITIES
OR
FORWARD
CONTRACTS.—Section
2532 
556 of title 11, United States Code, is amend-
ed— 
(1) by amending the section heading 
to read as follows: 
‘‘§ 556. Contractual right to liquidate, terminate, or 
accelerate a commodities contract or for-
ward contract’’; 
(2) in the first sentence, by striking 
‘‘liquidation’’ and inserting ‘‘liquidation, 
termination, or acceleration’’; and 
(3) in the second sentence, by striking 
‘‘As used’’ and all that follows through 
‘‘right,’’ and inserting ‘‘As used in this sec-
tion, the term ‘contractual right’ includes 
a right set forth in a rule or bylaw of a de-
rivatives clearing organization (as de-
fined in the Commodity Exchange Act), a 
multilateral clearing organization (as de-
fined in the Federal Deposit Insurance 
Corporation Improvement Act of 1991), a 
national securities exchange, a national 
securities association, a securities clear-
ing agency, a contract market designated 
under the Commodity Exchange Act, a de-
rivatives transaction execution facility
2533 
registered under the Commodity Exchange 
Act, or a board of trade (as defined in the 
Commodity Exchange Act) or in a resolu-
tion of the governing board thereof and a 
right,’’. 
(i) TERMINATION OR ACCELERATION OF RE-
PURCHASE AGREEMENTS.—Section 559 of title 11, 
United States Code, is amended— 
(1) by amending the section heading 
to read as follows: 
‘‘§ 559. Contractual right to liquidate, terminate, or 
accelerate a repurchase agreement’’; 
(2) in the first sentence, by striking 
‘‘liquidation’’ and inserting ‘‘liquidation, 
termination, or acceleration’’; and 
(3) in the third sentence, by striking 
‘‘As used’’ and all that follows through 
‘‘right,’’ and inserting ‘‘As used in this sec-
tion, the term ‘contractual right’ includes 
a right set forth in a rule or bylaw of a de-
rivatives clearing organization (as de-
fined in the Commodity Exchange Act), a 
multilateral clearing organization (as de-
fined in the Federal Deposit Insurance 
Corporation Improvement Act of 1991), a
2534 
national securities exchange, a national 
securities association, a securities clear-
ing agency, a contract market designated 
under the Commodity Exchange Act, a de-
rivatives transaction execution facility 
registered under the Commodity Exchange 
Act, or a board of trade (as defined in the 
Commodity Exchange Act) or in a resolu-
tion of the governing board thereof and a 
right,’’. 
(j) LIQUIDATION, TERMINATION, OR ACCEL-
ERATION OF SWAP AGREEMENTS.—Section 560 of 
title 11, United States Code, is amended— 
(1) by amending the section heading 
to read as follows: 
‘‘§ 560. Contractual right to liquidate, terminate, or 
accelerate a swap agreement’’; 
(2) in the first sentence, by striking 
‘‘termination of a swap agreement’’ and 
inserting ‘‘liquidation, termination, or ac-
celeration of one or more swap agree-
ments’’; 
(3) by striking ‘‘in connection with any 
swap agreement’’ and inserting ‘‘in con-
nection with the termination, liquidation,
2535 
or acceleration of one or more swap agree-
ments’’; and 
(4) in the second sentence, by striking 
‘‘As used’’ and all that follows through 
‘‘right,’’ and inserting ‘‘As used in this sec-
tion, the term ‘contractual right’ includes 
a right set forth in a rule or bylaw of a de-
rivatives clearing organization (as de-
fined in the Commodity Exchange Act), a 
multilateral clearing organization (as de-
fined in the Federal Deposit Insurance 
Corporation Improvement Act of 1991), a 
national securities exchange, a national 
securities association, a securities clear-
ing agency, a contract market designated 
under the Commodity Exchange Act, a de-
rivatives transaction execution facility 
registered under the Commodity Exchange 
Act, or a board of trade (as defined in the 
Commodity Exchange Act) or in a resolu-
tion of the governing board thereof and a 
right,’’. 
(k) LIQUIDATION, TERMINATION, ACCELERA-
TION, OR OFFSET UNDER
A MASTER NETTING 
AGREEMENT AND ACROSS CONTRACTS.—
2536 
(1) 
IN
GENERAL.—Title 
11, 
United 
States Code, is amended by inserting after 
section 560 the following: 
‘‘§ 561. Contractual right to terminate, liquidate, ac-
celerate, or offset under a master netting 
agreement and across contracts; pro-
ceedings under section 304 
‘‘(a) Subject to subsection (b), the exercise 
of any contractual right, because of a condi-
tion of the kind specified in section 365(e)(1), 
to cause the termination, liquidation, or accel-
eration of or to offset or net termination val-
ues, payment amounts, or other transfer obli-
gations arising under or in connection with 
one or more (or the termination, liquidation, 
or acceleration of one or more)— 
‘‘(1) securities contracts, as defined in 
section 741(7); 
‘‘(2) commodity contracts, as defined 
in section 761(4); 
‘‘(3) forward contracts; 
‘‘(4) repurchase agreements; 
‘‘(5) swap agreements; or 
‘‘(6) master netting agreements,
2537 
shall not be stayed, avoided, or otherwise lim-
ited by operation of any provision of this title 
or by any order of a court or administrative 
agency in any proceeding under this title. 
‘‘(b)(1) A party may exercise a contractual 
right described in subsection (a) to terminate, 
liquidate, or accelerate only to the extent that 
such party could exercise such a right under 
section 555, 556, 559, or 560 for each individual 
contract covered by the master netting agree-
ment in issue. 
‘‘(2) If a debtor is a commodity broker sub-
ject to subchapter IV of chapter 7— 
‘‘(A) a party may not net or offset an 
obligation to the debtor arising under, or 
in connection with, a commodity contract 
traded on or subject to the rules of a con-
tract market designated under the Com-
modity Exchange Act or a derivatives 
transaction execution facility registered 
under 
the 
Commodity 
Exchange 
Act 
against any claim arising under, or in 
connection with, other instruments, con-
tracts, or agreements listed in subsection 
(a) except to the extent that the party has
2538 
positive net equity in the commodity ac-
counts at the debtor, as calculated under 
such subchapter; and 
‘‘(B) another commodity broker may 
not net or offset an obligation to the debt-
or arising under, or in connection with, a 
commodity contract entered into or held 
on behalf of a customer of the debtor and 
traded on or subject to the rules of a con-
tract market designated under the Com-
modity Exchange Act or a derivatives 
transaction execution facility registered 
under 
the 
Commodity 
Exchange 
Act 
against any claim arising under, or in 
connection with, other instruments, con-
tracts, or agreements listed in subsection 
(a). 
‘‘(3) No provision of subparagraph (A) or 
(B) of paragraph (2) shall prohibit the offset 
of claims and obligations that arise under— 
‘‘(A) a cross-margining agreement or 
similar arrangement that has been ap-
proved by the Commodity Futures Trading 
Commission or submitted to the Com-
modity 
Futures 
Trading 
Commission
2539 
under paragraph (1) or (2) of section 5c(c) 
of the Commodity Exchange Act and has 
not been abrogated or rendered ineffective 
by the Commodity Futures Trading Com-
mission; or 
‘‘(B) any other netting agreement be-
tween a clearing organization (as defined 
in section 761) and another entity that 
has been approved by the Commodity Fu-
tures Trading Commission. 
‘‘(c) As used in this section, the term ‘con-
tractual right’ includes a right set forth in a 
rule or bylaw of a derivatives clearing organi-
zation (as defined in the Commodity Exchange 
Act), a multilateral clearing organization (as 
defined in the Federal Deposit Insurance Cor-
poration Improvement Act of 1991), a national 
securities exchange, a national securities asso-
ciation, a securities clearing agency, a con-
tract market designated under the Commodity 
Exchange Act, a derivatives transaction execu-
tion facility registered under the Commodity 
Exchange Act, or a board of trade (as defined 
in the Commodity Exchange Act) or in a reso-
lution of the governing board thereof, and a
2540 
right, whether or not evidenced in writing, 
arising under common law, under law mer-
chant, or by reason of normal business prac-
tice. 
‘‘(d) Any provisions of this title relating to 
securities contracts, commodity contracts, for-
ward contracts, repurchase agreements, swap 
agreements, or master netting agreements 
shall apply in a case under section 304, so that 
enforcement of contractual provisions of such 
contracts and agreements in accordance with 
their terms will not be stayed or otherwise lim-
ited by operation of any provision of this title 
or by order of a court in any case under this 
title, and to limit avoidance powers to the 
same extent as in a proceeding under chapter 
7 or 11 of this title (such enforcement not to 
be limited based on the presence or absence of 
assets of the debtor in the United States).’’. 
(2) 
CONFORMING
AMENDMENT.—The 
table of sections for chapter 5 of title 11, 
United States Code, is amended by insert-
ing after the item relating to section 560 
the following: 
‘‘561. Contractual right to terminate, liquidate, accelerate, or 
offset under a master netting agreement and 
across contracts; proceedings under section 304.’’.
2541 
(l) COMMODITY
BROKER
LIQUIDATIONS.— 
Title 11, United States Code, is amended by in-
serting after section 766 the following: 
‘‘§ 767. Commodity broker liquidation and forward 
contract merchants, commodity brokers, 
stockbrokers, financial institutions, fi-
nancial participants, securities clearing 
agencies, swap participants, repo partici-
pants, and master netting agreement par-
ticipants 
‘‘Notwithstanding any other provision of 
this title, the exercise of rights by a forward 
contract merchant, commodity broker, stock-
broker, financial institution, financial partic-
ipant, securities clearing agency, swap partic-
ipant, repo participant, or master netting 
agreement participant under this title shall 
not affect the priority of any unsecured claim 
it may have after the exercise of such rights.’’. 
(m) STOCKBROKER LIQUIDATIONS.—Title 11, 
United States Code, is amended by inserting 
after section 752 the following:
2542 
‘‘§ 753. Stockbroker liquidation and forward contract 
merchants, 
commodity 
brokers, 
stock-
brokers, financial institutions, financial 
participants, securities clearing agencies, 
swap participants, repo participants, and 
master netting agreement participants 
‘‘Notwithstanding any other provision of 
this title, the exercise of rights by a forward 
contract merchant, commodity broker, stock-
broker, financial institution, securities clear-
ing agency, swap participant, repo partici-
pant, financial participant, or master netting 
agreement participant under this title shall 
not affect the priority of any unsecured claim 
it may have after the exercise of such rights.’’. 
(n) SETOFF.—Section 553 of title 11, United 
States Code, is amended— 
(1) in subsection (a)(2)(B)(ii), by in-
serting before the semicolon the following: 
‘‘(except for a setoff of a kind described in 
section 
362(b)(6), 
362(b)(7), 
362(b)(17), 
362(b)(19), 555, 556, 559, 560, or 561)’’; 
(2) in subsection (a)(3)(C), by insert-
ing before the period the following: ‘‘(ex-
cept for a setoff of a kind described in sec-
tion 
362(b)(6), 
362(b)(7), 
362(b)(17),
2543 
362(b)(19), 555, 556, 559, 560, or 561 of this 
title)’’; and 
(3) in subsection (b)(1), by striking 
‘‘362(b)(14),’’ and inserting ‘‘362(b)(17), 
362(b)(19), 555, 556, 559, 560, 561,’’. 
(o) 
SECURITIES
CONTRACTS, 
COMMODITY 
CONTRACTS, AND FORWARD CONTRACTS.—Title 
11, United States Code, is amended— 
(1) in section 362(b)(6), by striking ‘‘fi-
nancial institutions,’’ each place such 
term appears and inserting ‘‘financial in-
stitution, financial participant,’’; 
(2) in sections 362(b)(7) and 546(f), by 
inserting ‘‘or financial participant’’ after 
‘‘repo participant’’ each place such term 
appears; 
(3) in section 546(e), by inserting ‘‘fi-
nancial participant,’’ after ‘‘financial in-
stitution,’’; 
(4) in section 548(d)(2)(B), by inserting 
‘‘financial participant,’’ after ‘‘financial 
institution,’’; 
(5) in section 548(d)(2)(C), by inserting 
‘‘or financial participant’’ after ‘‘repo par-
ticipant’’;
2544 
(6) in section 548(d)(2)(D), by insert-
ing ‘‘or financial participant’’ after ‘‘swap 
participant’’; 
(7) in section 555— 
(A) by inserting ‘‘financial partici-
pant,’’ after ‘‘financial institution,’’; 
and 
(B) by striking the second sentence 
and inserting the following: ‘‘As used 
in this section, the term ‘contractual 
right’ includes a right set forth in a 
rule or bylaw of a derivatives clearing 
organization (as defined in the Com-
modity Exchange Act), a multilateral 
clearing organization (as defined in 
the Federal Deposit Insurance Cor-
poration Improvement Act of 1991), a 
national securities exchange, a na-
tional securities association, a securi-
ties clearing agency, a contract mar-
ket designated under the Commodity 
Exchange Act, a derivatives trans-
action execution facility registered 
under the Commodity Exchange Act, 
or a board of trade (as defined in the
2545 
Commodity Exchange Act), or in a res-
olution of the governing board there-
of, and a right, whether or not in writ-
ing, arising under common law, under 
law merchant, or by reason of normal 
business practice’’; 
(8) in section 556, by inserting ‘‘, fi-
nancial participant,’’ after ‘‘commodity 
broker’’; 
(9) in section 559, by inserting ‘‘or fi-
nancial participant’’ after ‘‘repo partici-
pant’’ each place such term appears; and 
(10) in section 560, by inserting ‘‘or fi-
nancial participant’’ after ‘‘swap partici-
pant’’. 
(p) CONFORMING AMENDMENTS.—Title 11, 
United States Code, is amended— 
(1) in the table of sections for chapter 
5— 
(A) by amending the items relat-
ing to sections 555 and 556 to read as 
follows: 
‘‘555. Contractual right to liquidate, terminate, or accelerate a 
securities contract. 
‘‘556. Contractual right to liquidate, terminate, or accelerate a 
commodities contract or forward contract.’’; 
and
2546 
(B) by amending the items relat-
ing to sections 559 and 560 to read as 
follows: 
‘‘559. Contractual right to liquidate, terminate, or accelerate a 
repurchase agreement. 
‘‘560. Contractual right to liquidate, terminate, or accelerate a 
swap agreement.’’; 
and 
(2) in the table of sections for chapter 
7— 
(A) by inserting after the item re-
lating to section 766 the following: 
‘‘767. Commodity broker liquidation and forward contract mer-
chants, commodity brokers, stockbrokers, financial 
institutions, 
financial 
participants, 
securities 
clearing agencies, swap participants, repo partici-
pants, and master netting agreement partici-
pants.’’; 
and 
(B) by inserting after the item re-
lating to section 752 the following: 
‘‘753. Stockbroker liquidation and forward contract merchants, 
commodity brokers, stockbrokers, financial insti-
tutions, financial participants, securities clearing 
agencies, swap participants, repo participants, 
and master netting agreement participants.’’. 
SEC. 5082H. RECORDKEEPING REQUIREMENTS. 
(a) FDIC-INSURED
DEPOSITORY
INSTITU-
TIONS.—Section 11(e)(8) of the Federal Deposit 
Insurance Act (12 U.S.C. 1821(e)(8)) is amend-
ed by adding at the end the following new sub-
paragraph:
2547 
‘‘(H) 
RECORDKEEPING
REQUIRE-
MENTS.—The Corporation, in consulta-
tion with the appropriate Federal 
banking agencies and the National 
Credit Union Administration Board, 
may prescribe regulations requiring 
more detailed recordkeeping by any 
insured depository institution with re-
spect to qualified financial contracts 
(including market valuations) only if 
such insured depository institution is 
in a troubled condition (as such term 
is defined by the Corporation pursu-
ant to section 32).’’. 
(b) 
INSURED
CREDIT
UNIONS.—Section 
207(c)(8) of the Federal Credit Union Act (12 
U.S.C. 1787(c)(8)) is amended by adding at the 
end the following new subparagraph: 
‘‘(H) 
RECORDKEEPING
REQUIRE-
MENTS.—The Board, in consultation 
with the appropriate Federal banking 
agencies, may prescribe regulations 
requiring 
more 
detailed 
record-
keeping by any insured credit union 
with respect to qualified financial
2548 
contracts 
(including 
market 
valu-
ations) only if such insured credit 
union is in a troubled condition (as 
such term is defined by the Board pur-
suant to section 212).’’. 
SEC. 5082I. EXEMPTIONS FROM CONTEMPORANEOUS EXE-
CUTION REQUIREMENT. 
Section 13(e)(2) of the Federal Deposit In-
surance Act (12 U.S.C. 1823(e)(2)) is amended 
to read as follows: 
‘‘(2) EXEMPTIONS
FROM
CONTEMPORA-
NEOUS
EXECUTION
REQUIREMENT.—An 
agreement to provide for the lawful 
collateralization of— 
‘‘(A) deposits of, or other credit ex-
tension by, a Federal, State, or local 
governmental entity, or of any deposi-
tor referred to in section 11(a)(2), in-
cluding an agreement to provide col-
lateral in lieu of a surety bond; 
‘‘(B) bankruptcy estate funds pur-
suant to section 345(b)(2) of title 11, 
United States Code; 
‘‘(C) extensions of credit, includ-
ing any overdraft, from a Federal re-
2549 
serve bank or Federal home loan 
bank; or 
‘‘(D) one or more qualified finan-
cial contracts, as defined in section 
11(e)(8)(D), 
shall not be deemed invalid pursuant to 
paragraph (1)(B) solely because such 
agreement was not executed contempora-
neously with the acquisition of the collat-
eral or because of pledges, delivery, or 
substitution of the collateral made in ac-
cordance with such agreement.’’. 
SEC. 5082J. DAMAGE MEASURE. 
(a) IN GENERAL.—Title 11, United States 
Code, is amended— 
(1) by inserting after section 561, as 
added by section 5082G(k)(1) of this sub-
chapter, the following: 
‘‘§ 562. Timing of damage measurement in connection 
with swap agreements, securities con-
tracts, forward contracts, commodity con-
tracts, repurchase agreements, and mas-
ter netting agreements 
‘‘(a) If the trustee rejects a swap agree-
ment, securities contract (as defined in section
2550 
741), forward contract, commodity contract 
(as defined in section 761), repurchase agree-
ment, or master netting agreement pursuant to 
section 365(a), or if a forward contract mer-
chant, stockbroker, financial institution, secu-
rities clearing agency, repo participant, finan-
cial participant, master netting agreement 
participant, or swap participant liquidates, 
terminates, or accelerates such contract or 
agreement, damages shall be measured as of 
the earlier of— 
‘‘(1) the date of such rejection; or 
‘‘(2) the date or dates of such liquida-
tion, termination, or acceleration. 
‘‘(b) If there are not any commercially rea-
sonable determinants of value as of any date 
referred to in paragraph (1) or (2) of sub-
section (a), damages shall be measured as of 
the earliest subsequent date or dates on which 
there are commercially reasonable deter-
minants of value. 
‘‘(c) For the purposes of subsection (b), if 
damages are not measured as of the date or 
dates of rejection, liquidation, termination, or 
acceleration, and the forward contract mer-
2551 
chant, stockbroker, financial institution, secu-
rities clearing agency, repo participant, finan-
cial participant, master netting agreement 
participant, or swap participant or the trustee 
objects to the timing of the measurement of 
damages— 
‘‘(1) the trustee, in the case of an ob-
jection by a forward contract merchant, 
stockbroker, financial institution, securi-
ties clearing agency, repo participant, fi-
nancial participant, master netting agree-
ment participant, or swap participant; or 
‘‘(2) the forward contract merchant, 
stockbroker, financial institution, securi-
ties clearing agency, repo participant, fi-
nancial participant, master netting agree-
ment participant, or swap participant, in 
the case of an objection by the trustee, 
has the burden of proving that there were no 
commercially 
reasonable 
determinants 
of 
value as of such date or dates.’’; and 
(2) in the table of sections for chapter 
5, by inserting after the item relating to 
section 
561 
(as 
added 
by 
section
2552 
5082G(k)(2) of this subchapter) the fol-
lowing new item: 
‘‘562. Timing of damage measure in connection with swap 
agreements, securities contracts, forward con-
tracts, commodity contracts, repurchase agree-
ments, or master netting agreements.’’. 
(b) CLAIMS ARISING FROM REJECTION.—Sec-
tion 502(g) of title 11, United States Code, is 
amended— 
(1) by inserting ‘‘(1)’’ after ‘‘(g)’’; and 
(2) by adding at the end the following: 
‘‘(2) A claim for damages calculated in ac-
cordance with section 562 of this title shall be 
allowed under subsection (a), (b), or (c), or dis-
allowed under subsection (d) or (e), as if such 
claim had arisen before the date of the filing 
of the petition.’’. 
SEC. 5082K. SIPC STAY. 
Section 5(b)(2) of the Securities Investor 
Protection Act of 1970 (15 U.S.C. 78eee(b)(2)) is 
amended by adding at the end the following 
new subparagraph: 
‘‘(C) EXCEPTION FROM STAY.— 
‘‘(i) Notwithstanding section 
362 of title 11, United States Code, 
neither the filing of an applica-
tion under subsection (a)(3) nor
2553 
any order or decree obtained by 
SIPC from the court shall operate 
as a stay of any contractual rights 
of a creditor to liquidate, termi-
nate, or accelerate a securities 
contract, commodity contract, for-
ward contract, repurchase agree-
ment, swap agreement, or master 
netting agreement, as those terms 
are defined in sections 101, 741, 
and 761 of title 11, United States 
Code, to offset or net termination 
values, payment amounts, or other 
transfer obligations arising under 
or in connection with one or more 
of such contracts or agreements, 
or to foreclose on any cash collat-
eral pledged by the debtor, wheth-
er or not with respect to one or 
more of such contracts or agree-
ments. 
‘‘(ii) Notwithstanding clause 
(i), such application, order, or de-
cree may operate as a stay of the 
foreclosure on, or disposition of,
2554 
securities collateral pledged by 
the debtor, whether or not with re-
spect to one or more of such con-
tracts or agreements, securities 
sold by the debtor under a repur-
chase agreement, or securities lent 
under a securities lending agree-
ment. 
‘‘(iii) As used in this subpara-
graph, the term ‘contractual right’ 
includes a right set forth in a rule 
or bylaw of a national securities 
exchange, a national securities as-
sociation, or a securities clearing 
agency, a right set forth in a 
bylaw of a clearing organization 
or contract market or in a resolu-
tion of the governing board there-
of, and a right, whether or not in 
writing, arising under common 
law, under law merchant, or by 
reason of normal business prac-
tice.’’.
2555 
SEC. 5082L. APPLICABILITY OF OTHER SECTIONS TO CHAP-
TER 9. 
Section 901(a) of title 11, United States 
Code, is amended— 
(1) by inserting ‘‘555, 556,’’ after 
‘‘553,’’; and 
(2) by inserting ‘‘559, 560, 561, 562’’ 
after ‘‘557,’’. 
SEC. 5082M. EFFECTIVE DATE; APPLICATION OF AMEND-
MENTS. 
(a) 
EFFECTIVE
DATE.—This 
subchapter 
shall take effect on the date of enactment of 
this Act. 
(b) APPLICATION
OF
AMENDMENTS.—The 
amendments made by this subchapter shall 
apply with respect to cases commenced or ap-
pointments made under any Federal or State 
law on or after the date of enactment of this 
Act, but shall not apply with respect to cases 
commenced or appointments made under any 
Federal or State law before the date of enact-
ment of this Act. 
SEC. 5082N. SAVINGS CLAUSE. 
The meanings of terms used in this sub-
chapter are applicable for purposes of this 
subchapter only, and shall not be construed or
2556 
applied so as to challenge or affect the charac-
terization, definition, or treatment of any simi-
lar terms under any other statute, regulation, 
or rule, including the Gramm-Leach-Bliley 
Act, the Legal Certainty for Bank Products Act 
of 2000, the securities laws (as that term is de-
fined in section 3(a)(47) of the Securities Ex-
change Act of 1934), and the Commodity Ex-
change Act. 
Subchapter B—Emergency Securities 
Response 
SEC. 5086. SHORT TITLE. 
This subchapter may be cited as the 
‘‘Emergency Securities Response Act of 2004’’. 
SEC. 5087. EXTENSION OF EMERGENCY ORDER AUTHORITY 
OF THE SECURITIES AND EXCHANGE COMMIS-
SION. 
(a) EXTENSION OF AUTHORITY.—Paragraph 
(2) of section 12(k) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78l(k)(2)) is amended to 
read as follows: 
‘‘(2) EMERGENCY.—(A) The Commission, 
in an emergency, may by order summarily 
take such action to alter, supplement, sus-
pend, or impose requirements or restric-
2557 
tions with respect to any matter or action 
subject to regulation by the Commission 
or a self-regulatory organization under 
the securities laws, as the Commission de-
termines is necessary in the public inter-
est and for the protection of investors— 
‘‘(i) to maintain or restore fair 
and orderly securities markets (other 
than markets in exempted securities); 
‘‘(ii) to ensure prompt, accurate, 
and safe clearance and settlement of 
transactions in securities (other than 
exempted securities); or 
‘‘(iii) to reduce, eliminate, or pre-
vent the substantial disruption by the 
emergency of (I) securities markets 
(other than markets in exempted secu-
rities), investment companies, or any 
other significant portion or segment of 
such markets, or (II) the transmission 
or 
processing 
of 
securities 
trans-
actions (other than transactions in ex-
empted securities). 
‘‘(B) An order of the Commission 
under this paragraph (2) shall continue
2558 
in effect for the period specified by the 
Commission, and may be extended. Except 
as provided in subparagraph (C), the 
Commission’s action may not continue in 
effect for more than 30 business days, in-
cluding extensions. 
‘‘(C) An order of the Commission 
under this paragraph (2) may be extended 
to continue in effect for more than 30 
business days if, at the time of the exten-
sion, the Commission finds that the emer-
gency still exists and determines that the 
continuation of the order beyond 30 busi-
ness days is necessary in the public inter-
est and for the protection of investors to 
attain an objective described in clause (i), 
(ii), or (iii) of subparagraph (A). In no 
event shall an order of the Commission 
under this paragraph (2) continue in ef-
fect for more than 90 calendar days. 
‘‘(D) If the actions described in sub-
paragraph (A) involve a security futures 
product, the Commission shall consult 
with and consider the views of the Com-
modity Futures Trading Commission. In
2559 
exercising its authority under this para-
graph, the Commission shall not be re-
quired to comply with the provisions of 
section 553 of title 5, United States Code, 
or with the provisions of section 19(c) of 
this title. 
‘‘(E) Notwithstanding the exclusion of 
exempted securities (and markets therein) 
from the Commission’s authority under 
subparagraph (A), the Commission may 
use such authority to take action to alter, 
supplement, suspend, or impose require-
ments or restrictions with respect to clear-
ing agencies for transactions in such ex-
empted securities. In taking any action 
under this subparagraph, the Commission 
shall consult with and consider the views 
of the Secretary of the Treasury.’’. 
(b) CONSULTATION; DEFINITION
OF EMER-
GENCY.—Section 12(k) of the Securities Ex-
change Act of 1934 (15 U.S.C. 78l(k)) is further 
amended by striking paragraph (6) and insert-
ing the following: 
‘‘(6) CONSULTATION.—Prior to taking 
any action described in paragraph (1)(B),
2560 
the Commission shall consult with and 
consider the views of the Secretary of the 
Treasury, Board of Governors of the Fed-
eral Reserve System, and the Commodity 
Futures Trading Commission, unless such 
consultation is impracticable in light of 
the emergency. 
‘‘(7) DEFINITIONS.— 
‘‘(A) EMERGENCY.—For purposes of 
this subsection, the term ‘emergency’ 
means— 
‘‘(i) a major market disturb-
ance characterized by or consti-
tuting— 
‘‘(I) sudden and excessive 
fluctuations 
of 
securities 
prices generally, or a substan-
tial threat thereof, that threat-
en fair and orderly markets; 
or 
‘‘(II) a substantial disrup-
tion of the safe or efficient op-
eration of the national system 
for clearance and settlement 
of transactions in securities,
2561 
or a substantial threat there-
of; or 
‘‘(ii) a major disturbance that 
substantially disrupts, or threat-
ens to substantially disrupt— 
‘‘(I) the functioning of se-
curities markets, investment 
companies, or any other sig-
nificant portion or segment of 
the securities markets; or 
‘‘(II) the transmission or 
processing of securities trans-
actions. 
‘‘(B) SECURITIES
LAWS.—Notwith-
standing section 3(a)(47), for purposes 
of this subsection, the term ‘securities 
laws’ does not include the Public Util-
ity Holding Company Act of 1935 (15 
U.S.C. 79a et seq.).’’. 
SEC. 5088. PARALLEL AUTHORITY OF THE SECRETARY OF 
THE TREASURY WITH RESPECT TO GOVERN-
MENT SECURITIES. 
Section 15C of the Securities Exchange Act 
of 1934 (15 U.S.C. 78o–5) is amended by adding 
at the end the following new subsection:
2562 
‘‘(h) 
EMERGENCY
AUTHORITY.—The 
Sec-
retary may by order take any action with re-
spect to a matter or action subject to regula-
tion by the Secretary under this section, or the 
rules of the Secretary thereunder, involving a 
government security or a market therein (or 
significant portion or segment of that market), 
that the Commission may take under section 
12(k)(2) of this title with respect to trans-
actions in securities (other than exempted se-
curities) or a market therein (or significant 
portion or segment of that market).’’. 
SEC. 5089. JOINT REPORT ON IMPLEMENTATION OF FINAN-
CIAL 
SYSTEM 
RESILIENCE 
RECOMMENDA-
TIONS. 
(a) REPORT
REQUIRED.—Not later than 
April 30, 2006, the Board of Governors of the 
Federal Reserve System, the Comptroller of the 
Currency, and the Securities and Exchange 
Commission shall prepare and submit to the 
Committee on Financial Services of the House 
of Representatives and the Committee on 
Banking, Housing, and Urban Affairs of the 
Senate a joint report on the efforts of the pri-
vate sector to implement the Interagency
2563 
Paper on Sound Practices to Strengthen the 
Resilience of the U.S. Financial System. 
(b) CONTENTS OF REPORT.—The report re-
quired by subsection (a) shall— 
(1) examine the efforts to date of cov-
ered private sector financial services 
firms to implement enhanced business 
continuity plans; 
(2) examine the extent to which the 
implementation 
of 
business 
continuity 
plans has been done in a geographically 
dispersed manner, including an analysis 
of the extent to which such firms have lo-
cated their main and backup facilities in 
separate electrical networks, in different 
watersheds, 
in 
independent 
transpor-
tation systems, and using separate tele-
communications centers; 
(3) examine the need to cover more fi-
nancial services entities than those cov-
ered by the Interagency Paper; and 
(4) recommend legislative and regu-
latory changes that will— 
(A) expedite the effective imple-
mentation of the Interagency Paper by
2564 
all covered financial services entities; 
and 
(B) maximize the effective imple-
mentation of business continuity plan-
ning by all participants in the finan-
cial services industry. 
(c) 
CONFIDENTIALITY.—Any 
information 
provided to the Federal Reserve Board, the 
Comptroller of the Currency, or the Securities 
and Exchange Commission for the purposes of 
the preparation and submission of the report 
required by subsection (a) shall be treated as 
privileged and confidential. For purposes of 
section 552 of title 5, United States Code, this 
subsection shall be considered a statute de-
scribed in subsection (b)(3)(B) of such section 
552. 
(d) DEFINITION.—The Interagency Paper on 
Sound Practices to Strengthen the Resilience 
of the U.S. Financial System is the interagency 
paper prepared by the Board of Governors of 
the Federal Reserve System, the Comptroller of 
the Currency, and the Securities and Ex-
change Commission that was announced in 
the Federal Register on April 8, 2003.
2565 
SEC. 5089A. PRIVATE SECTOR PREPAREDNESS. 
It is the sense of the Congress that the in-
surance industry and credit-rating agencies, 
where relevant, should carefully consider a 
company’s compliance with standards for pri-
vate sector disaster and emergency prepared-
ness in assessing insurability and credit-
worthiness, to ensure that private sector in-
vestment in disaster and emergency prepared-
ness is appropriately encouraged. 
SEC. 5089B. REPORT ON PUBLIC/PRIVATE PARTNERSHIPS. 
Before the end of the 6-month period begin-
ning on the date of the enactment of this Act, 
the Secretary of the Treasury shall submit a 
report to the Committee on Financial Services 
of the House of Representatives and the Com-
mittee on Banking, Housing, and Urban Af-
fairs of the Senate containing— 
(1) information on the efforts the De-
partment of the Treasury has made to en-
courage the formation of public/private 
partnerships to protect critical financial 
infrastructure and the type of support 
that the Department has provided to these 
partnerships; and
2566 
(2) recommendations for administra-
tive or legislative action regarding these 
partnerships as the Secretary may deter-
mine to be appropriate. 
Subtitle H—Other Matters 
CHAPTER 1—PRIVACY MATTERS 
SEC. 5091. REQUIREMENT THAT AGENCY RULEMAKING 
TAKE INTO CONSIDERATION IMPACTS ON IN-
DIVIDUAL PRIVACY. 
(a) SHORT
TITLE.—This section may be 
cited as the ‘‘Federal Agency Protection of Pri-
vacy Act of 2004’’. 
(b) IN GENERAL.—Title 5, United States 
Code, is amended by adding after section 553 
the following new section: 
‘‘§ 553a. Privacy impact assessment in rulemaking 
‘‘(a) INITIAL PRIVACY IMPACT ASSESSMENT.— 
‘‘(1) IN GENERAL.—Whenever an agency 
is required by section 553 of this title, or 
any other law, to publish a general notice 
of proposed rulemaking for a proposed 
rule, or publishes a notice of proposed 
rulemaking for an interpretative rule in-
volving the internal revenue laws of the 
United States, and such rule or proposed
2567 
rulemaking pertains to the collection, 
maintenance, use, or disclosure of person-
ally identifiable information from 10 or 
more individuals, other than agencies, in-
strumentalities, or employees of the Fed-
eral government, the agency shall prepare 
and make available for public comment 
an initial privacy impact assessment that 
describes the impact of the proposed rule 
on the privacy of individuals. Such assess-
ment or a summary thereof shall be 
signed by the senior agency official with 
primary responsibility for privacy policy 
and be published in the Federal Register 
at the time of the publication of a general 
notice of proposed rulemaking for the 
rule. 
‘‘(2) CONTENTS.—Each initial privacy 
impact assessment required under this 
subsection shall contain the following: 
‘‘(A) A description and analysis of 
the extent to which the proposed rule 
will impact the privacy interests of in-
dividuals, including the extent to 
which the proposed rule—
2568 
‘‘(i) provides notice of the col-
lection of personally identifiable 
information, and specifies what 
personally identifiable informa-
tion is to be collected and how it is 
to be collected, maintained, used, 
and disclosed; 
‘‘(ii) allows access to such in-
formation by the person to whom 
the personally identifiable infor-
mation pertains and provides an 
opportunity to correct inaccura-
cies; 
‘‘(iii) prevents such informa-
tion, which is collected for one 
purpose, from being used for an-
other purpose; and 
‘‘(iv) provides security for such 
information. 
‘‘(B) A description of any signifi-
cant alternatives to the proposed rule 
which accomplish the stated objec-
tives of applicable statutes and which 
minimize any significant privacy im-
2569 
pact of the proposed rule on individ-
uals. 
‘‘(b) FINAL PRIVACY IMPACT ASSESSMENT.— 
‘‘(1) IN GENERAL.—Whenever an agency 
promulgates a final rule under section 
553 of this title, after being required by 
that section or any other law to publish a 
general notice of proposed rulemaking, or 
promulgates a final interpretative rule in-
volving the internal revenue laws of the 
United States, and such rule or proposed 
rulemaking pertains to the collection, 
maintenance, use, or disclosure of person-
ally identifiable information from 10 or 
more individuals, other than agencies, in-
strumentalities, or employees of the Fed-
eral government, the agency shall prepare 
a final privacy impact assessment, signed 
by the senior agency official with primary 
responsibility for privacy policy. 
‘‘(2) CONTENTS.—Each final privacy 
impact assessment required under this 
subsection shall contain the following: 
‘‘(A) A description and analysis of 
the extent to which the final rule will
2570 
impact the privacy interests of indi-
viduals, including the extent to which 
such rule— 
‘‘(i) provides notice of the col-
lection of personally identifiable 
information, and specifies what 
personally identifiable informa-
tion is to be collected and how it is 
to be collected, maintained, used, 
and disclosed; 
‘‘(ii) allows access to such in-
formation by the person to whom 
the personally identifiable infor-
mation pertains and provides an 
opportunity to correct inaccura-
cies; 
‘‘(iii) prevents such informa-
tion, which is collected for one 
purpose, from being used for an-
other purpose; and 
‘‘(iv) provides security for such 
information. 
‘‘(B) A summary of any significant 
issues raised by the public comments 
in response to the initial privacy im-
2571 
pact assessment, a summary of the 
analysis of the agency of such issues, 
and a statement of any changes made 
in such rule as a result of such issues. 
‘‘(C) A description of the steps the 
agency has taken to minimize the sig-
nificant privacy impact on individ-
uals consistent with the stated objec-
tives of applicable statutes, including 
a statement of the factual, policy, and 
legal reasons for selecting the alter-
native adopted in the final rule and 
why each one of the other significant 
alternatives to the rule considered by 
the agency which affect the privacy 
interests of individuals was rejected. 
‘‘(3) 
AVAILABILITY
TO
PUBLIC.—The 
agency shall make copies of the final pri-
vacy impact assessment available to mem-
bers of the public and shall publish in the 
Federal Register such assessment or a 
summary thereof. 
‘‘(c) WAIVERS.— 
‘‘(1) EMERGENCIES.—An agency head 
may waive or delay the completion of
2572 
some or all of the requirements of sub-
sections (a) and (b) to the same extent as 
the agency head may, under section 608, 
waive or delay the completion of some or 
all of the requirements of sections 603 and 
604, respectively. 
‘‘(2) NATIONAL
SECURITY.—An agency 
head may, for national security reasons, 
or to protect from disclosure classified in-
formation, confidential commercial infor-
mation, or information the disclosure of 
which may adversely affect a law enforce-
ment effort, waive or delay the completion 
of some or all of the following require-
ments: 
‘‘(A) The requirement of subsection 
(a)(1) to make an assessment avail-
able for public comment. 
‘‘(B) 
The 
requirement 
of 
sub-
section (a)(1) to have an assessment or 
summary thereof published in the Fed-
eral Register. 
‘‘(C) The requirements of sub-
section (b)(3).
2573 
‘‘(d) PROCEDURES
FOR
GATHERING
COM-
MENTS.—When any rule is promulgated which 
may have a significant privacy impact on indi-
viduals, or a privacy impact on a substantial 
number of individuals, the head of the agency 
promulgating the rule or the official of the 
agency with statutory responsibility for the 
promulgation of the rule shall assure that in-
dividuals have been given an opportunity to 
participate in the rulemaking for the rule 
through techniques such as— 
‘‘(1) the inclusion in an advance no-
tice of proposed rulemaking, if issued, of 
a statement that the proposed rule may 
have a significant privacy impact on indi-
viduals, or a privacy impact on a substan-
tial number of individuals; 
‘‘(2) the publication of a general no-
tice of proposed rulemaking in publica-
tions of national circulation likely to be 
obtained by individuals; 
‘‘(3) the direct notification of inter-
ested individuals; 
‘‘(4) the conduct of open conferences 
or public hearings concerning the rule for
2574 
individuals, including soliciting and re-
ceiving comments over computer net-
works; and 
‘‘(5) the adoption or modification of 
agency procedural rules to reduce the cost 
or complexity of participation in the rule-
making by individuals. 
‘‘(e) PERIODIC REVIEW OF RULES.— 
‘‘(1) IN
GENERAL.—Each agency shall 
carry out a periodic review of the rules 
promulgated by the agency that have a 
significant privacy impact on individuals, 
or a privacy impact on a substantial num-
ber of individuals. Under such periodic 
review, the agency shall determine, for 
each such rule, whether the rule can be 
amended or rescinded in a manner that 
minimizes any such impact while remain-
ing in accordance with applicable stat-
utes. For each such determination, the 
agency shall consider the following fac-
tors: 
‘‘(A) The continued need for the 
rule.
2575 
‘‘(B) The nature of complaints or 
comments received from the public 
concerning the rule. 
‘‘(C) The complexity of the rule. 
‘‘(D) The extent to which the rule 
overlaps, duplicates, or conflicts with 
other Federal rules, and, to the extent 
feasible, with State and local govern-
mental rules. 
‘‘(E) The length of time since the 
rule was last reviewed under this sub-
section. 
‘‘(F) The degree to which tech-
nology, economic conditions, or other 
factors have changed in the area af-
fected by the rule since the rule was 
last reviewed under this subsection. 
‘‘(2) PLAN
REQUIRED.—Each agency 
shall carry out the periodic review re-
quired by paragraph (1) in accordance 
with a plan published by such agency in 
the Federal Register. Each such plan 
shall provide for the review under this 
subsection of each rule promulgated by 
the agency not later than 10 years after
2576 
the date on which such rule was pub-
lished as the final rule and, thereafter, 
not later than 10 years after the date on 
which such rule was last reviewed under 
this subsection. The agency may amend 
such plan at any time by publishing the 
revision in the Federal Register. 
‘‘(3) ANNUAL PUBLICATION.—Each year, 
each agency shall publish in the Federal 
Register a list of the rules to be reviewed 
by such agency under this subsection dur-
ing the following year. The list shall in-
clude a brief description of each such rule 
and the need for and legal basis of such 
rule and shall invite public comment 
upon the determination to be made under 
this subsection with respect to such rule. 
‘‘(f) JUDICIAL REVIEW.— 
‘‘(1) IN GENERAL.—For any rule subject 
to this section, an individual who is ad-
versely affected or aggrieved by final 
agency action is entitled to judicial re-
view of agency compliance with the re-
quirements of subsections (b) and (c) in 
accordance with chapter 7. Agency com-
2577 
pliance with subsection (d) shall be judi-
cially reviewable in connection with judi-
cial review of subsection (b). 
‘‘(2) JURISDICTION.—Each court having 
jurisdiction to review such rule for com-
pliance with section 553, or under any 
other provision of law, shall have juris-
diction to review any claims of noncompli-
ance with subsections (b) and (c) in ac-
cordance with chapter 7. Agency compli-
ance with subsection (d) shall be judi-
cially reviewable in connection with judi-
cial review of subsection (b). 
‘‘(3) LIMITATIONS.— 
‘‘(A) An individual may seek such 
review during the period beginning on 
the date of final agency action and 
ending 1 year later, except that where 
a provision of law requires that an ac-
tion challenging a final agency action 
be commenced before the expiration of 
1 year, such lesser period shall apply 
to an action for judicial review under 
this subsection.
2578 
‘‘(B) In the case where an agency 
delays the issuance of a final privacy 
impact assessment pursuant to sub-
section (c), an action for judicial re-
view under this section shall be filed 
not later than— 
‘‘(i) 1 year after the date the 
assessment is made available to 
the public; or 
‘‘(ii) where a provision of law 
requires 
that 
an 
action 
chal-
lenging a final agency regulation 
be commenced before the expira-
tion of the 1-year period, the num-
ber of days specified in such provi-
sion of law that is after the date 
the assessment is made available 
to the public. 
‘‘(4) RELIEF.—In granting any relief in 
an action under this subsection, the court 
shall order the agency to take corrective 
action consistent with this section and 
chapter 7, including, but not limited to— 
‘‘(A) remanding the rule to the 
agency; and
2579 
‘‘(B) deferring the enforcement of 
the rule against individuals, unless 
the court finds that continued enforce-
ment of the rule is in the public inter-
est. 
‘‘(5) RULE OF CONSTRUCTION.—Nothing 
in this subsection shall be construed to 
limit the authority of any court to stay the 
effective date of any rule or provision 
thereof under any other provision of law 
or to grant any other relief in addition to 
the requirements of this subsection. 
‘‘(6) RECORD OF AGENCY ACTION.—In an 
action for the judicial review of a rule, 
the privacy impact assessment for such 
rule, including an assessment prepared or 
corrected pursuant to paragraph (4), 
shall constitute part of the entire record 
of agency action in connection with such 
review. 
‘‘(7) EXCLUSIVITY.—Compliance or non-
compliance by an agency with the provi-
sions of this section shall be subject to ju-
dicial review only in accordance with this 
subsection.
2580 
‘‘(8) SAVINGS CLAUSE.—Nothing in this 
subsection bars judicial review of any 
other impact statement or similar assess-
ment required by any other law if judicial 
review of such statement or assessment is 
otherwise permitted by law. 
‘‘(g) DEFINITION.—For purposes of this sec-
tion, the term ‘personally identifiable informa-
tion’ means information that can be used to 
identify an individual, including such individ-
ual’s name, address, telephone number, photo-
graph, social security number or other identi-
fying information. It includes information 
about such individual’s medical or financial 
condition.’’. 
(c) PERIODIC
REVIEW
TRANSITION
PROVI-
SIONS.— 
(1) INITIAL PLAN.—For each agency, the 
plan required by subsection (e) of section 
553a of title 5, United States Code (as 
added by subsection (a)), shall be pub-
lished not later than 180 days after the 
date of the enactment of this Act. 
(2) In the case of a rule promulgated 
by an agency before the date of the enact-
2581 
ment of this Act, such plan shall provide 
for the periodic review of such rule before 
the expiration of the 10-year period begin-
ning on the date of the enactment of this 
Act. For any such rule, the head of the 
agency may provide for a 1-year extension 
of such period if the head of the agency, 
before the expiration of the period, cer-
tifies in a statement published in the Fed-
eral Register that reviewing such rule be-
fore the expiration of the period is not fea-
sible. The head of the agency may provide 
for additional 1-year extensions of the pe-
riod pursuant to the preceding sentence, 
but in no event may the period exceed 15 
years. 
(d) 
CONGRESSIONAL
REVIEW.—Section 
801(a)(1)(B) of title 5, United States Code, is 
amended— 
(1) by redesignating clauses (iii) and 
(iv) as clauses (iv) and (v), respectively; 
and 
(2) by inserting after clause (ii) the 
following new clause:
2582 
‘‘(iii) the agency’s actions relevant to 
section 553a;’’. 
(e) CLERICAL AMENDMENT.—The table of 
sections at the beginning of chapter 5 of title 
5, United States Code, is amended by adding 
after the item relating to section 553 the fol-
lowing new item: 
‘‘553a. Privacy impact assessment in rulemaking.’’. 
SEC. 5092. CHIEF PRIVACY OFFICERS FOR AGENCIES WITH 
LAW 
ENFORCEMENT 
OR 
ANTI-TERRORISM 
FUNCTIONS. 
(a) IN GENERAL.—There shall be within 
each Federal agency with law enforcement or 
anti-terrorism functions a chief privacy offi-
cer, who shall have primary responsibility 
within that agency for privacy policy. The 
agency chief privacy officer shall be des-
ignated by the head of the agency. 
(b) RESPONSIBILITIES.—The responsibilities 
of each agency chief privacy officer shall in-
clude— 
(1) ensuring that the use of tech-
nologies sustains, and does not erode, pri-
vacy protections relating to the use, col-
lection, and disclosure of personally iden-
tifiable information;
2583 
(2) ensuring that personally identifi-
able information contained in systems of 
records is handled in full compliance 
with fair information practices as set out 
in section 552a of title 5, United States 
Code; 
(3) evaluating legislative and regu-
latory proposals involving collection, use, 
and disclosure of personally identifiable 
information by the Federal Government; 
(4) conducting a privacy impact as-
sessment of proposed rules of the agency 
on the privacy of personally identifiable 
information, including the type of person-
ally identifiable 
information 
collected 
and the number of people affected; 
(5) preparing and submitting a report 
to Congress on an annual basis on activi-
ties of the agency that affect privacy, in-
cluding complaints of privacy violations, 
implementation of section 552a of title 5, 
United States Code, internal controls, and 
other relevant matters; 
(6) ensuring that the agency protects 
personally identifiable information and
2584 
information systems from unauthorized 
access, use, disclosure, disruption, modi-
fication, or destruction in order to pro-
vide— 
(A) integrity, which means guard-
ing 
against 
improper 
information 
modification or destruction, and in-
cludes 
ensuring 
information 
non-
repudiation and authenticity; 
(B) confidentially, which means 
preserving authorized restrictions on 
access 
and 
disclosure, 
including 
means for protecting personal privacy 
and proprietary information; 
(C) availability, which means en-
suring timely and reliable access to 
and use of that information; and 
(D) authentication, which means 
utilizing digital credentials to assure 
the identity of users and validate 
their access; and 
(7) advising the head of the agency 
and the Director of the Office of Manage-
ment and Budget on information security
2585 
and privacy issues pertaining to Federal 
Government information systems. 
CHAPTER 2—MUTUAL AID AND 
LITIGATION MANAGEMENT 
SEC. 5101. SHORT TITLE. 
This chapter may be cited as the ‘‘Mutual 
Aid and Litigation Management Authoriza-
tion Act of 2004’’. 
SEC. 5102. MUTUAL AID AUTHORIZED. 
(a) AUTHORIZATION TO ENTER INTO AGREE-
MENTS.— 
(1) IN GENERAL.—The authorized rep-
resentative of a State, locality, or the Fed-
eral Government may enter into an inter-
state mutual aid agreement or a mutual 
aid agreement with the Federal Govern-
ment on behalf of the State, locality, or 
Federal Government under which, at the 
request of any party to the agreement, the 
other party to the agreement may— 
(A) provide law enforcement, fire, 
rescue, emergency health and medical 
services, transportation, communica-
tions, public works and engineering, 
mass care, and resource support in an
2586 
emergency or public service event oc-
curring in the jurisdiction of the re-
questing party; 
(B) provide other services to pre-
pare for, mitigate, manage, respond 
to, or recover from an emergency or 
public service event occurring in the 
jurisdiction of the requesting party; 
and 
(C) participate in training events 
occurring in the jurisdiction of the re-
questing party. 
(b) LIABILITY AND ACTIONS AT LAW.— 
(1) LIABILITY.—A responding party or 
its officers or employees shall be liable on 
account of any act or omission occurring 
while providing assistance or partici-
pating in a training event in the jurisdic-
tion of a requesting party under a mutual 
aid agreement (including any act or omis-
sion arising from the maintenance or use 
of any equipment, facilities, or supplies in 
connection therewith), but only to the ex-
tent permitted under and in accordance 
with the laws and procedures of the State
2587 
of the responding party and subject to this 
chapter. 
(2) JURISDICTION OF COURTS.— 
(A) IN
GENERAL.—Subject to sub-
paragraph (B) and section 3, any ac-
tion brought against a responding 
party or its officers or employees on 
account of an act or omission de-
scribed in subsection (b)(1) may be 
brought only under the laws and pro-
cedures of the State of the responding 
party and only in the State courts or 
United States District Courts located 
therein. 
(B) UNITED
STATES
AS
PARTY.—If 
the United States is the party against 
whom an action described in para-
graph (1) is brought, the action may 
be brought only in a United States 
District Court. 
(c) WORKERS’ COMPENSATION
AND DEATH 
BENEFITS.— 
(1) PAYMENT OF BENEFITS.—A respond-
ing party shall provide for the payment of 
workers’ compensation and death benefits
2588 
with respect to officers or employees of the 
party who sustain injuries or are killed 
while providing assistance or partici-
pating in a training event under a mu-
tual aid agreement in the same manner 
and on the same terms as if the injury or 
death were sustained within the jurisdic-
tion of the responding party. 
(2) LIABILITY FOR BENEFITS.—No party 
shall be liable under the law of any State 
other than its own (or, in the case of the 
Federal Government, under any law other 
than Federal law) for the payment of 
workers’ compensation and death benefits 
with respect to injured officers or employ-
ees of the party who sustain injuries or 
are killed while providing assistance or 
participating in a training event under a 
mutual aid agreement. 
(d) LICENSES AND PERMITS.—Whenever any 
person holds a license, certificate, or other per-
mit issued by any responding party evidencing 
the meeting of qualifications for professional, 
mechanical, or other skills, such person will 
be deemed licensed, certified, or permitted by
2589 
the requesting party to provide assistance in-
volving such skill under a mutual aid agree-
ment. 
(e) SCOPE.—Except to the extent provided 
in this section, the rights and responsibilities 
of the parties to a mutual aid agreement shall 
be as described in the mutual aid agreement. 
(f) EFFECT ON OTHER AGREEMENTS.—Noth-
ing in this section precludes any party from 
entering 
into 
supplementary 
mutual 
aid 
agreements with fewer than all the parties, or 
with another, or affects any other agreements 
already in force among any parties to such an 
agreement, including the Emergency Manage-
ment Assistance Compact (EMAC) under Pub-
lic Law 104–321. 
(g) FEDERAL GOVERNMENT.—Nothing in this 
section may be construed to limit any other ex-
pressed or implied authority of any entity of 
the Federal Government to enter into mutual 
aid agreements. 
(h) CONSISTENCY WITH STATE LAW.—A party 
may enter into a mutual aid agreement under 
this chapter only insofar as the agreement is 
in accord with State law.
2590 
SEC. 5103. LITIGATION MANAGEMENT AGREEMENTS. 
(a) AUTHORIZATION TO ENTER INTO LITIGA-
TION MANAGEMENT AGREEMENTS.—The author-
ized representative of a State or locality may 
enter into a litigation management agreement 
on behalf of the State or locality. Such litiga-
tion management agreements may provide 
that all claims against such Emergency Re-
sponse Providers arising out of, relating to, or 
resulting from an act of terrorism when Emer-
gency Response Providers from more than 1 
State have acted in defense against, in re-
sponse to, or recovery from such act shall be 
governed by the following provisions. 
(b) FEDERAL CAUSE OF ACTION.— 
(1) IN
GENERAL.—There shall exist a 
Federal cause of action for claims against 
Emergency Response Providers arising out 
of, relating to, or resulting from an act of 
terrorism when Emergency Response Pro-
viders from more than 1 State have acted 
in defense against, in response to, or re-
covery from such act. As determined by 
the parties to a litigation management 
agreement, the substantive law for deci-
sion in any such action shall be—
2591 
(A) derived from the law, includ-
ing choice of law principles, of the 
State in which such acts of terrorism 
occurred, unless such law is incon-
sistent with or preempted by Federal 
law; or 
(B) derived from the choice of law 
principles agreed to by the parties to 
a litigation management agreement 
as described in the litigation manage-
ment agreement, unless such prin-
ciples are inconsistent with or pre-
empted by Federal law. 
(2) JURISDICTION.—Such appropriate 
district court of the United States shall 
have original and exclusive jurisdiction 
over all actions for any claim against 
Emergency Response Providers for loss of 
property, personal injury, or death aris-
ing out of, relating to, or resulting from 
an act of terrorism when Emergency Re-
sponse Providers from more than 1 State 
have acted in defense against, in response 
to, or recovery from an act of terrorism.
2592 
(3) 
SPECIAL
RULES.—In 
an 
action 
brought for damages that is governed by a 
litigation management agreement, the fol-
lowing provisions apply: 
(A) PUNITIVE
DAMAGES.—No puni-
tive damages intended to punish or 
deter, exemplary damages, or other 
damages not intended to compensate 
a plaintiff for actual losses may be 
awarded, nor shall any party be liable 
for interest prior to the judgment. 
(B) COLLATERAL SOURCES.—Any re-
covery by a plaintiff in an action gov-
erned by a litigation management 
agreement shall be reduced by the 
amount of collateral source com-
pensation, if any, that the plaintiff 
has received or is entitled to receive as 
a result of such acts of terrorism. 
(4) EXCLUSIONS.—Nothing in this sec-
tion shall in any way limit the ability of 
any person to seek any form of recovery 
from any person, government, or other en-
tity that—
2593 
(A) attempts to commit, knowingly 
participates in, aids and abets, or 
commits any act of terrorism, or any 
criminal act related to or resulting 
from such act of terrorism; or 
(B) participates in a conspiracy to 
commit any such act of terrorism or 
any such criminal act. 
SEC. 5104. ADDITIONAL PROVISIONS. 
(a) NO
ABROGATION
OF
OTHER
IMMUNI-
TIES.—Nothing in this chapter shall abrogate 
any other immunities from liability that any 
party may have under any other State or Fed-
eral law. 
(b) EXCEPTION FOR CERTAIN FEDERAL LAW 
ENFORCEMENT
ACTIVITIES.—A 
mutual 
aid 
agreement or a litigation management agree-
ment may not apply to law enforcement secu-
rity operations at special events of national 
significance under section 3056(e) of title 18, 
United States Code, or to other law enforce-
ment functions of the United States Secret 
Service.
2594 
(c) SECRET SERVICE.—Section 3056 of title 
18, United States Code, is amended by adding 
at the end the following new subsection: 
‘‘(g) The Secret Service shall be main-
tained as a distinct entity within the Depart-
ment of Homeland Security and shall not be 
merged with any other department function. 
All personnel and operational elements of the 
United States Secret Service shall report to the 
Director of the Secret Service, who shall report 
directly to the Secretary of Homeland Security 
without being required to report through any 
other official of the Department.’’. 
SEC. 5105. DEFINITIONS. 
For purposes of this chapter, the following 
definitions apply: 
(1) AUTHORIZED REPRESENTATIVE.—The 
term ‘‘authorized representative’’ means— 
(A) in the case of the Federal Gov-
ernment, any individual designated by 
the President with respect to the exec-
utive branch, the Chief Justice of the 
United States with respect to the judi-
cial branch, or the President pro Tem-
pore of the Senate and Speaker of the
2595 
House of Representatives with respect 
to the Congress, or their designees, to 
enter into a mutual aid agreement; 
(B) in the case of a locality, the of-
ficial designated by law to declare an 
emergency in and for the locality, or 
the official’s designee; 
(C) in the case of a State, the Gov-
ernor or the Governor’s designee. 
(2) 
EMERGENCY.—The 
term 
‘‘emer-
gency’’ means a major disaster or emer-
gency declared by the President, or a 
State of Emergency declared by an au-
thorized representative of a State or local-
ity, in response to which assistance may 
be provided under a mutual aid agree-
ment. 
(3) EMERGENCY
RESPONSE
PROVIDER.— 
The term ‘‘Emergency Response Provider’’ 
means State or local emergency public 
safety, law enforcement, emergency re-
sponse, emergency medical (including hos-
pital emergency facilities), and related 
personnel, agencies, and authorities that
2596 
are a party to a litigation management 
agreement. 
(4) EMPLOYEE.—The term ‘‘employee’’ 
means, with respect to a party to a mutual 
aid agreement, the employees of the party, 
including its agents or authorized volun-
teers, who are committed to provide assist-
ance under the agreement. 
(5) LITIGATION
MANAGEMENT
AGREE-
MENT.—The term ‘‘litigation management 
agreement’’ means an agreement entered 
into pursuant to the authority granted 
under section 5103. 
(6) 
LOCALITY.—The 
term 
‘‘locality’’ 
means a county, city, or town. 
(7) MUTUAL AID AGREEMENT.—The term 
‘‘mutual aid agreement’’ means an agree-
ment entered into pursuant to the author-
ity granted under section 5102. 
(8) PUBLIC SERVICE EVENT.—The term 
‘‘public 
service 
event’’ 
means 
any 
undeclared emergency, incident, or situa-
tion in preparation for or response to 
which assistance may be provided under a 
mutual aid agreement.
2597 
(9) REQUESTING PARTY.—The term ‘‘re-
questing party’’ means, with respect to a 
mutual aid agreement, the party in whose 
jurisdiction assistance is provided, or a 
training event is held, under the agree-
ment. 
(10) RESPONDING PARTY.—The term ‘‘re-
sponding party’’ means, with respect to a 
mutual aid agreement, the party pro-
viding assistance, or participating in a 
training event, under the agreement, but 
does not include the requesting party. 
(11) STATE.—The term ‘‘State’’ includes 
each of the several States of the United 
States, the District of Columbia, the Com-
monwealth of Puerto Rico, the Virgin Is-
lands, Guam, American Samoa, and the 
Commonwealth of the Northern Mariana 
Islands, and any other territory or posses-
sion of the United States, and any polit-
ical subdivision of any such place. 
(12) 
TRAINING
EVENT.—The 
term 
‘‘training event’’ means an emergency and 
public service event-related exercise, test, 
or other activity using equipment and per-
2598 
sonnel to prepare for or simulate perform-
ance of any aspect of the giving or receiv-
ing of assistance during emergencies or 
public service events, but does not include 
an actual emergency or public service 
event. 
CHAPTER 3—MISCELLANEOUS MATTERS 
SEC. 5131. ENHANCEMENT OF PUBLIC SAFETY COMMUNICA-
TIONS INTEROPERABILITY. 
(a) COORDINATION OF PUBLIC SAFETY INTER-
OPERABLE COMMUNICATIONS PROGRAMS.— 
(1) PROGRAM.—The Secretary of Home-
land Security, in consultation with the 
Secretary of Commerce and the Chairman 
of the Federal Communications Commis-
sion, shall establish a program to en-
hance public safety interoperable commu-
nications at all levels of government. 
Such program shall— 
(A) establish a comprehensive na-
tional approach to achieving public 
safety interoperable communications; 
(B) coordinate with other Federal 
agencies in carrying out subpara-
graph (A);
2599 
(C) develop, in consultation with 
other appropriate Federal agencies 
and State and local authorities, ap-
propriate minimum capabilities for 
communications interoperability for 
Federal, State, and local public safety 
agencies; 
(D) accelerate, in consultation 
with other Federal agencies, includ-
ing the National Institute of Stand-
ards and Technology, the private sec-
tor, and nationally recognized stand-
ards organizations as appropriate, 
the development of national voluntary 
consensus standards for public safety 
interoperable communications; 
(E) encourage the development 
and implementation of flexible and 
open architectures, with appropriate 
levels of security, for short-term and 
long-term solutions to public safety 
communications interoperability; 
(F) assist other Federal agencies 
in identifying priorities for research, 
development, and testing and evalua-
2600 
tion with regard to public safety inter-
operable communications; 
(G) identify priorities within the 
Department of Homeland Security for 
research, development, and testing 
and evaluation with regard to public 
safety interoperable communications; 
(H) establish coordinated guid-
ance for Federal grant programs for 
public safety interoperable commu-
nications; 
(I) provide technical assistance to 
State and local public safety agencies 
regarding planning, acquisition strat-
egies, interoperability architectures, 
training, and other functions nec-
essary to achieve public safety commu-
nications interoperability; 
(J) develop and disseminate best 
practices to improve public safety 
communications interoperability; and 
(K) develop appropriate perform-
ance measures and milestones to sys-
tematically 
measure 
the 
Nation’s 
progress towards achieving public
2601 
safety 
communications 
interoper-
ability, including the development of 
national voluntary consensus stand-
ards. 
(2) OFFICE FOR INTEROPERABILITY AND 
COMPATIBILITY.— 
(A) ESTABLISHMENT
OF
OFFICE.— 
The Secretary may establish an Office 
for Interoperability and Compatibility 
to carry out this subsection. 
(B) FUNCTIONS.—If the Secretary 
establishes such office, the Secretary 
shall, through such office— 
(i) carry out Department of 
Homeland 
Security 
responsibil-
ities and authorities relating to 
the SAFECOM Program; and 
(ii) carry out subsection (c) 
(relating to rapid interoperable 
communications capabilities for 
high risk jurisdictions). 
(3) APPLICABILITY OF FEDERAL ADVISORY 
COMMITTEE
ACT.—The Federal Advisory 
Committee Act (5 U.S.C. App.) shall not 
apply to advisory groups established and
2602 
maintained by the Secretary for purposes 
of carrying out this subsection. 
(b) REPORT.—Not later than 120 days after 
the date of the enactment of this Act, the Sec-
retary shall report to the Congress on Depart-
ment of Homeland Security plans for accel-
erating the development of national voluntary 
consensus standards for public safety inter-
operable communications, a schedule of mile-
stones for such development, and achieve-
ments of such development. 
(c) RAPID INTEROPERABLE COMMUNICATIONS 
CAPABILITIES FOR HIGH RISK JURISDICTIONS.— 
The Secretary, in consultation with other rel-
evant Federal, State, and local government 
agencies, shall provide technical, training, 
and other assistance as appropriate to support 
the rapid establishment of consistent, secure, 
and effective interoperable communications 
capabilities for emergency response providers 
in jurisdictions determined by the Secretary to 
be at consistently high levels of risk of terrorist 
attack. 
(d) DEFINITIONS.—In this section:
2603 
(1) INTEROPERABLE COMMUNICATIONS.— 
The term ‘‘interoperable communications’’ 
means the ability of emergency response 
providers and relevant Federal, State, 
and local government agencies to commu-
nicate with each other as necessary, 
through a dedicated public safety network 
utilizing information technology systems 
and radio communications systems, and 
to exchange voice, data, or video with one 
another on demand, in real time, as nec-
essary. 
(2) EMERGENCY RESPONSE PROVIDERS.— 
The term ‘‘emergency response providers’’ 
has the meaning that term has under sec-
tion 2 of the Homeland Security Act of 
2002 (6 U.S.C. 101) 
(e) CLARIFICATION OF RESPONSIBILITY FOR 
INTEROPERABLE COMMUNICATIONS.— 
(1) UNDER SECRETARY FOR EMERGENCY 
PREPAREDNESS
AND
RESPONSE.—Section 
502(7) of the Homeland Security Act of 
2002 (6 U.S.C. 312(7)) is amended— 
(A) by striking ‘‘developing com-
prehensive programs for developing
2604 
interoperative communications tech-
nology, and’’; and 
(B) by striking ‘‘such’’ and insert-
ing ‘‘interoperable communications’’. 
(2) OFFICE
FOR
DOMESTIC
PREPARED-
NESS.—Section 430(c) of such Act (6 U.S.C. 
238(c)) is amended— 
(A) in paragraph (7) by striking 
‘‘and’’ after the semicolon; 
(B) in paragraph (8) by striking 
the period and inserting ‘‘; and’’; and 
(C) by adding at the end the fol-
lowing: 
‘‘(9) helping to ensure the acquisition 
of 
interoperable 
communication 
tech-
nology by State and local governments 
and emergency response providers.’’. 
SEC. 5132. SENSE OF CONGRESS REGARDING THE INCIDENT 
COMMAND SYSTEM. 
(a) FINDINGS.—The Congress finds that— 
(1) in Homeland Security Presidential 
Directive–5, the President directed the 
Secretary of Homeland Security to develop 
an incident command system to be known 
as the National Incident Management
2605 
System (NIMS), and directed all Federal 
agencies to make the adoption of NIMS a 
condition for the receipt of Federal emer-
gency preparedness assistance by States, 
territories, tribes, and local governments 
beginning in fiscal year 2005; 
(2) in March 2004, the Secretary of 
Homeland 
Security 
established 
NIMS, 
which 
provides 
a 
unified 
structural 
framework for Federal, State, territorial, 
tribal, and local governments to ensure 
coordination 
of 
command, 
operations, 
planning, logistics, finance, and adminis-
tration during emergencies involving mul-
tiple jurisdictions or agencies; and 
(3) the National Commission on Ter-
rorist Attacks Upon the United States 
strongly supports the adoption of NIMS by 
emergency response agencies nationwide, 
and the decision by the President to con-
dition Federal emergency preparedness 
assistance upon the adoption of NIMS. 
(b) SENSE OF CONGRESS.—It is the sense of 
the Congress that all levels of government 
should adopt NIMS, and that the regular use
2606 
of and training in NIMS by States, territories, 
tribes, and local governments should be a con-
dition for receiving Federal preparedness as-
sistance. 
SEC. 5133. SENSE OF CONGRESS REGARDING UNITED 
STATES NORTHERN COMMAND PLANS AND 
STRATEGIES. 
It is the sense of Congress that the Sec-
retary of Defense should regularly assess the 
adequacy of United States Northern Com-
mand’s plans and strategies with a view to en-
suring that the United States Northern Com-
mand is prepared to respond effectively to all 
military and paramilitary threats within the 
United States. 
øSECTION 1. SHORT TITLE. 
øThis Act may be cited as the ‘‘9/11 Rec-
ommendations Implementation Act’’. 
øSEC. 2. TABLE OF CONTENTS. 
øThe table of contents for this Act is as fol-
lows: 
øTITLE I—REFORM OF THE INTELLIGENCE COMMUNITY 
øSec. 1001. Short title. 
øSubtitle A—Establishment of National Intelligence Director 
øSec. 1011. Reorganization and improvement of management 
of intelligence community. 
øSec. 1012. Revised definition of national intelligence.
2607 
øSec. 1013. Joint procedures for operational coordination be-
tween Department of Defense and Central Intel-
ligence Agency. 
øSec. 1014. Role of National Intelligence Director in appoint-
ment of certain officials responsible for intel-
ligence-related activities. 
øSec. 1015. Initial appointment of the National Intelligence Di-
rector. 
øSec. 1016. Executive schedule matters. 
øSubtitle B—National counterterrorism Center and Civil 
Liberties Protections 
øSec. 1021. National counterterrorism Center. 
øSec. 1022. Civil Liberties Protection Officer. 
øSubtitle C—Joint Intelligence Community Council 
øSec. 1031. Joint Intelligence Community Council. 
øSubtitle D—Improvement of Human Intelligence (HUMINT) 
øSec. 1041. Human intelligence as an increasingly critical com-
ponent of the intelligence community. 
øSec. 1042. Improvement of human intelligence capacity. 
øSubtitle E—Improvement of Education for the Intelligence 
Community 
øSec. 1051. Modification of obligated service requirements 
under National Security Education Program. 
øSec. 1052. Improvements to the National Flagship Language 
Initiative. 
øSec. 1053. Establishment of scholarship program for English 
language studies for heritage community citizens 
of the United States within the National Security 
Education Program. 
øSec. 1054. Sense of Congress with respect to language and 
education for the intelligence community; re-
ports. 
øSec. 1055. Advancement of foreign languages critical to the 
intelligence community. 
øSec. 1056. Pilot project for Civilian Linguist Reserve Corps. 
øSec. 1057. Codification of establishment of the National Vir-
tual Translation Center. 
øSec. 1058. Report on recruitment and retention of qualified 
instructors of the Defense Language Institute. 
øSubtitle F—Additional Improvements of Intelligence 
Activities 
øSec. 1061. Permanent extension of Central Intelligence Agen-
cy Voluntary Separation Incentive Program. 
øSec. 1062. National Security Agency Emerging Technologies 
Panel. 
øSubtitle G—Conforming and Other Amendments
2608 
øSec. 1071. Conforming amendments relating to roles of Na-
tional Intelligence Director and Director of the 
Central Intelligence Agency. 
øSec. 1072. Other conforming amendments. 
øSec. 1073. Elements of intelligence community under National 
Security Act of 1947. 
øSec. 1074. Redesignation of National Foreign Intelligence Pro-
gram as National Intelligence Program.
øSec. 1075. Repeal of superseded authorities. 
øSec. 1076. Clerical amendments to National Security Act of 
1947. 
øSec. 1077. Conforming amendments relating to prohibiting 
dual service of the Director of the Central Intel-
ligence Agency. 
øSec. 1078. Access to Inspector General protections. 
øSec. 1079. General references. 
øSec. 1080. Application of other laws. 
øSubtitle H—Transfer, Termination, Transition and Other 
Provisions 
øSec. 1091. Transfer of community management staff. 
øSec. 1092. Transfer of terrorist threat integration center. 
øSec. 1093. Termination of positions of Assistant Directors of 
Central Intelligence. 
øSec. 1094. Implementation plan. 
øSec. 1095. Transitional authorities. 
øSec. 1096. Effective dates. 
øTITLE II—TERRORISM PREVENTION AND PROSECUTION 
øSubtitle A—Individual Terrorists as Agents of Foreign 
Powers 
øSec. 2001. Presumption that certain non-United States per-
sons engaging in international terrorism are 
agents of foreign powers for purposes of the For-
eign Intelligence Surveillance Act of 1978. 
øSubtitle B—Stop Terrorist and Military Hoaxes Act of 2004 
øSec. 2021. Short title. 
øSec. 2022. Hoaxes and recovery costs. 
øSec. 2023. Obstruction of justice and false statements in ter-
rorism cases. 
øSec. 2024. Clarification of definition. 
øSubtitle C—Material Support to Terrorism Prohibition 
Enhancement Act of 2004 
øSec. 2041. Short title. 
øSec. 2042. Receiving military-type training from a foreign ter-
rorist organization. 
øSec. 2043. Providing material support to terrorism. 
øSec. 2044. Financing of terrorism.
2609 
øSubtitle D—Weapons of Mass Destruction Prohibition 
Improvement Act of 2004 
øSec. 2051. Short title. 
øSec. 2052. Weapons of mass destruction. 
øSec. 2053. Participation in nuclear and weapons of mass de-
struction threats to the United States. 
øSec. 2054. Proliferation of weapons of mass destruction. 
øSec. 2055. Sense of Congress regarding international counter-
proliferation efforts. 
øSec. 2056. Removal of potential nuclear weapons materials 
from vulnerable sites worldwide. 
øSubtitle E—Money Laundering and Terrorist Financing 
øCHAPTER 1—FUNDING TO COMBAT FINANCIAL CRIMES INCLUDING 
TERRORIST FINANCING 
øSec. 2101. Additional authorization for FinCEN. 
øSec. 2102. Money laundering and financial crimes strategy re-
authorization. 
øCHAPTER 2—ENFORCEMENT TOOLS TO COMBAT FINANCIAL 
CRIMES INCLUDING TERRORIST FINANCING 
øSUBCHAPTER A—MONEY LAUNDERING ABATEMENT AND FINANCIAL 
ANTITERRORISM TECHNICAL CORRECTIONS 
øSec. 2111. Short title. 
øSec. 2112. Technical corrections to Public Law 107–56. 
øSec. 2113. Technical corrections to other provisions of law. 
øSec. 2114. Repeal of review. 
øSec. 2115. Effective date. 
øSUBCHAPTER B—ADDITIONAL ENFORCEMENT TOOLS 
øSec. 2121. Bureau of Engraving and Printing security print-
ing. 
øSec. 2122. Conduct in aid of counterfeiting. 
øSubtitle F—Criminal History Background Checks 
øSec. 2141. Short title. 
øSec. 2142. Criminal history background checks. 
øSec. 2143. Protect Act. 
øSec. 2144. Reviews of criminal records of applicants for pri-
vate security officer employment. 
øSec. 2145. Task force on clearinghouse for IAFIS criminal his-
tory records. 
øSubtitle G—Protection of United States Aviation System from 
Terrorist Attacks 
øSec. 2171. Provision for the use of biometric or other tech-
nology. 
øSec. 2172. Transportation security strategic planning. 
øSec. 2173. Next generation airline passenger prescreening.
2610 
øSec. 2174. Deployment and use of explosive detection equip-
ment at airport screening checkpoints. 
øSec. 2175. Pilot program to evaluate use of blast-resistant 
cargo and baggage containers. 
øSec. 2176. Air cargo screening technology. 
øSec. 2177. Airport checkpoint screening explosive detection. 
øSec. 2178. Next generation security checkpoint. 
øSec. 2179. Penalty for failure to secure cockpit door. 
øSec. 2180. Federal air marshal anonymity. 
øSec. 2181. Federal law enforcement counterterrorism train-
ing. 
øSec. 2182. Federal flight deck officer weapon carriage pilot 
program. 
øSec. 2183. Registered traveler program. 
øSec. 2184. Wireless communication. 
øSec. 2185. Secondary flight deck barriers. 
øSec. 2186. Extension. 
øSec. 2187. Perimeter Security. 
øSec. 2188. Extremely hazardous materials transportation se-
curity. 
øSec. 2189. Definitions. 
øSubtitle H—Other Matters 
øSec. 2191. Grand jury information sharing. 
øSec. 2192. Interoperable law enforcement and intelligence 
data system. 
øSec. 2193. Improvement of intelligence capabilities of the Fed-
eral Bureau of Investigation. 
øSec. 2194. Nuclear facility threats. 
øSec. 2195. Authorization and Change of COPS Program to sin-
gle Grant Program. 
øSubtitle I—Police Badges 
øSec. 2201. Short title. 
øSec. 2202. Police badges. 
øTITLE III—BORDER SECURITY AND TERRORIST TRAVEL 
øSubtitle A—Immigration Reform in the National Interest 
øCHAPTER 1—GENERAL PROVISIONS 
øSec. 3001. Eliminating the ‘‘Western Hemisphere’’ exception 
for citizens. 
øSec. 3002. Modification of waiver authority with respect to 
documentation requirements for nationals of for-
eign contiguous territories and adjacent islands. 
øSec. 3003. Increase in full-time border patrol agents. 
øSec. 3004. Increase in full-time immigration and customs en-
forcement investigators. 
øSec. 3005. Alien identification standards. 
øSec. 3006. Expedited removal. 
øSec. 3007. Preventing terrorists from obtaining asylum. 
øSec. 3008. Revocation of visas and other travel documenta-
tion.
2611 
øSec. 3009. Judicial review of orders of removal. 
øCHAPTER 2—DEPORTATION OF TERRORISTS AND SUPPORTERS OF 
TERRORISM 
øSec. 3031. Expanded inapplicability of restriction on removal. 
øSec. 3032. Exception to restriction on removal for terrorists 
and criminals. 
øSec. 3033. Additional removal authorities. 
øCHAPTER 3—PREVENTING COMMERCIAL ALIEN SMUGGLING 
øSec. 3041. Bringing in and harboring certain aliens. 
øSubtitle B—Identity Management Security 
øCHAPTER 1—IMPROVED SECURITY FOR DRIVERS’ LICENSES AND 
PERSONAL IDENTIFICATION CARDS 
øSec. 3051. Definitions. 
øSec. 3052. Minimum document requirements and issuance 
standards for Federal recognition. 
øSec. 3053. Linking of databases. 
øSec. 3054. Trafficking in authentication features for use in 
false identification documents. 
øSec. 3055. Grants to States. 
øSec. 3056. Authority. 
øCHAPTER 2—IMPROVED SECURITY FOR BIRTH CERTIFICATES 
øSec. 3061. Definitions. 
øSec. 3062. Applicability of minimum standards to local gov-
ernments. 
øSec. 3063. Minimum standards for Federal recognition. 
øSec. 3064. Establishment of electronic birth and death reg-
istration systems. 
øSec. 3065. Electronic verification of vital events. 
øSec. 3066. Grants to States. 
øSec. 3067. Authority. 
øCHAPTER 3—MEASURES TO ENHANCE PRIVACY AND INTEGRITY OF 
SOCIAL SECURITY ACCOUNT NUMBERS 
øSec. 3071. Prohibition of the display of social security account 
numbers on driver’s licenses or motor vehicle reg-
istrations. 
øSec. 3072. Independent verification of birth records provided 
in support of applications for social security ac-
count numbers. 
øSec. 3073. Enumeration at birth. 
øSec. 3074. Study relating to use of photographic identification 
in connection with applications for benefits, so-
cial security account numbers, and social security 
cards. 
øSec. 3075. Restrictions on issuance of multiple replacement 
social security cards.
2612 
øSec. 3076. Study relating to modification of the social security 
account numbering system to show work author-
ization status. 
øSubtitle C—Targeting Terrorist Travel 
øSec. 3081. Studies on machine-readable passports and travel 
history database. 
øSec. 3082. Expanded preinspection at foreign airports. 
øSec. 3083. Immigration security initiative. 
øSec. 3084. Responsibilities and functions of consular officers. 
øSec. 3085. Increase in penalties for fraud and related activity. 
øSec. 3086. Criminal penalty for false claim to citizenship. 
øSec. 3087. Antiterrorism assistance training of the Depart-
ment of State. 
øSec. 3088. International agreements to track and curtail ter-
rorist travel through the use of fraudulently ob-
tained documents. 
øSec. 3089. International standards for translation of names 
into the Roman alphabet for international travel 
documents and name-based watchlist systems. 
øSec. 3090. Biometric entry and exit data system. 
øSec. 3091. Biometric entry-exit screening system. 
øSec. 3092. Enhanced responsibilities of the Coordinator for 
counterterrorism. 
øSec. 3093. Establishment of Office of Visa and Passport Secu-
rity in the Department of State. 
øSubtitle D—Terrorist Travel 
øSec. 3101. Information sharing and coordination. 
øSec. 3102. Terrorist travel program. 
øSec. 3103. Training program. 
øSec. 3104. Technology acquisition and dissemination plan. 
øSubtitle E—Maritime Security Requirements 
øSec. 3111. Deadlines for implementation of maritime security 
requirements. 
øTITLE IV—INTERNATIONAL COOPERATION AND 
COORDINATION 
øSubtitle A—Attack Terrorists and Their Organizations 
øCHAPTER 1—PROVISIONS RELATING TO TERRORIST SANCTUARIES 
øSec. 4001. United States policy on terrorist sanctuaries. 
øSec. 4002. Reports on terrorist sanctuaries. 
øSec. 4003. Amendments to existing law to include terrorist 
sanctuaries. 
øCHAPTER 2—OTHER PROVISIONS 
øSec. 4011. Appointments to fill vacancies in Arms Control and 
Nonproliferation Advisory Board.
2613 
øSec. 4012. Review of United States policy on proliferation of 
weapons of mass destruction and control of stra-
tegic weapons. 
øSec. 4013. International agreements to interdict acts of inter-
national terrorism. 
øSec. 4014. Effective Coalition approach toward detention and 
humane treatment of captured terrorists. 
øSec. 4015. Sense of Congress and report regarding counter- 
drug efforts in Afghanistan. 
øSubtitle B—Prevent the Continued Growth of Terrorism 
øCHAPTER 1—UNITED STATES PUBLIC DIPLOMACY 
øSec. 4021. Annual review and assessment of public diplomacy 
strategy. 
øSec. 4022. Public diplomacy training. 
øSec. 4023. Promoting direct exchanges with Muslim countries. 
øSec. 4024. Public diplomacy required for promotion in For-
eign Service. 
øCHAPTER 2—UNITED STATES MULTILATERAL DIPLOMACY 
øSec. 4031. Purpose. 
øSec. 4032. Support and expansion of democracy caucus. 
øSec. 4033. Leadership and membership of international orga-
nizations. 
øSec. 4034. Increased training in multilateral diplomacy. 
øSec. 4035. Implementation and establishment of Office on 
Multilateral Negotiations. 
øCHAPTER 3—OTHER PROVISIONS 
øSec. 4041. Pilot program to provide grants to American-spon-
sored schools in predominantly Muslim countries 
to provide scholarships. 
øSec. 4042. Enhancing free and independent media. 
øSec. 4043. Combating biased or false foreign media coverage 
of the United States. 
øSec. 4044. Report on broadcast outreach strategy. 
øSec. 4045. Office relocation. 
øSec. 4046. Strengthening the Community of Democracies for 
Muslim countries. 
øSubtitle C—Reform of Designation of Foreign Terrorist 
Organizations 
øSec. 4051. Designation of foreign terrorist organizations. 
øSec. 4052. Inclusion in annual Department of State country 
reports on terrorism of information on terrorist 
groups that seek weapons of mass destruction 
and groups that have been designated as foreign 
terrorist organizations. 
øSubtitle D—Afghanistan Freedom Support Act Amendments 
of 2004 
øSec. 4061. Short title.
2614 
øSec. 4062. Coordination of assistance for Afghanistan. 
øSec. 4063. General provisions relating to the Afghanistan 
Freedom Support Act of 2002. 
øSec. 4064. Rule of law and related issues. 
øSec. 4065. Monitoring of assistance. 
øSec. 4066. United States policy to support disarmament of pri-
vate militias and to support expansion of inter-
national peacekeeping and security operations in 
Afghanistan. 
øSec. 4067. Efforts to expand international peacekeeping and 
security operations in Afghanistan. 
øSec. 4068. Provisions relating to counternarcotics efforts in 
Afghanistan. 
øSec. 4069. Additional amendments to the Afghanistan Free-
dom Support Act of 2002. 
øSec. 4070. Repeal. 
øSubtitle E—Provisions Relating to Saudi Arabia and 
Pakistan 
øSec. 4081. New United States strategy for relationship with 
Saudi Arabia. 
øSec. 4082. United States commitment to the future of Paki-
stan. 
øSec. 4083. Extension of Pakistan waivers. 
øSubtitle F—Oversight Provisions 
øSec. 4091. Case-Zablocki Act requirements. 
øSubtitle G—Additional Protections of United States Aviation 
System from Terrorist Attacks 
øSec. 4101. International agreements to allow maximum de-
ployment of Federal flight deck officers. 
øSec. 4102. Federal air marshal training. 
øSec. 4103. Man-portable air defense systems (MANPADS). 
øSubtitle H—Improving International Standards and 
Cooperation to Fight Terrorist Financing 
øSec. 4111. Sense of the Congress regarding success in multi-
lateral organizations. 
øSec. 4112. Expanded reporting requirement for the Secretary 
of the Treasury. 
øSec. 4113. International 
Terrorist 
Finance 
Coordinating 
Council. 
øSec. 4114. Definitions. 
øTITLE V—GOVERNMENT RESTRUCTURING 
øSubtitle A—Faster and Smarter Funding for First 
Responders 
øSec. 5001. Short title. 
øSec. 5002. Findings. 
øSec. 5003. Faster and smarter funding for first responders. 
øSec. 5004. Modification of homeland security advisory system.
2615 
øSec. 5005. Coordination of industry efforts. 
øSec. 5006. Superseded provision. 
øSec. 5007. Sense of Congress regarding interoperable commu-
nications. 
øSec. 5008. Sense of Congress regarding citizen corps councils. 
øSec. 5009. Study regarding nationwide emergency notification 
system. 
øSec. 5010. Required coordination. 
øSubtitle B—Government Reorganization Authority 
øSec. 5021. Authorization of intelligence community reorga-
nization plans. 
øSec. 5022. Authority to enter into contracts and issue Federal 
loan guarantees. 
øSubtitle C—Restructuring Relating to the Department of 
Homeland Security and Congressional Oversight 
øSec. 5025. Responsibilities of counternarcotics Office. 
øSec. 5026. Use of counternarcotics enforcement activities in 
certain employee performance appraisals. 
øSec. 5027. Sense of the House of Representatives on address-
ing homeland security for the American people. 
øSubtitle D—Improvements to Information Security 
øSec. 5031. Amendments to Clinger-Cohen provisions to en-
hance agency planning for information security 
needs. 
øSubtitle E—Personnel Management Improvements 
øCHAPTER 1—APPOINTMENTS PROCESS REFORM 
øSec. 5041. Appointments to national security positions. 
øSec. 5042. Presidential inaugural transitions. 
øSec. 5043. Public financial disclosure for the intelligence com-
munity. 
øSec. 5044. Reduction of positions requiring appointment with 
Senate confirmation. 
øSec. 5045. Effective dates. 
øCHAPTER 2—FEDERAL BUREAU OF INVESTIGATION 
REVITALIZATION 
øSec. 5051. Mandatory separation age. 
øSec. 5052. Retention and relocation bonuses. 
øSec. 5053. Federal Bureau of Investigation Reserve Service. 
øSec. 5054. Critical positions in the Federal Bureau of Inves-
tigation intelligence directorate. 
øCHAPTER 3—MANAGEMENT AUTHORITY 
øSec. 5061. Management authority. 
øSubtitle F—Security Clearance Modernization 
øSec. 5071. Definitions.
2616 
øSec. 5072. Security clearance and investigative programs 
oversight and administration. 
øSec. 5073. Reciprocity of security clearance and access deter-
minations. 
øSec. 5074. Establishment of national database. 
øSec. 5075. Use of available technology in clearance investiga-
tions. 
øSec. 5076. Reduction in length of personnel security clearance 
process. 
øSec. 5077. Security clearances for presidential transition. 
øSec. 5078. Reports. 
øSubtitle G—Emergency Financial Preparedness 
øSec. 5081. Delegation authority of the Secretary of the Treas-
ury. 
øSec. 5082. Extension of emergency order authority of the se-
curities and exchange commission. 
øSec. 5083. Parallel authority of the Secretary of the Treasury 
with respect to government securities. 
øSubtitle H—Other Matters 
øCHAPTER 1—PRIVACY MATTERS 
øSec. 5091. Requirement that agency rulemaking take into con-
sideration impacts on individual privacy. 
øSec. 5092. Chief privacy officers for agencies with law en-
forcement or anti-terrorism functions. 
øSec. 5093. Data-mining report. 
øSec. 5094. Privacy and civil liberties oversight board. 
øCHAPTER 2—MUTUAL AID AND LITIGATION MANAGEMENT 
øSec. 5101. Short title. 
øSec. 5102. Mutual aid authorized. 
øSec. 5103. Litigation management agreements. 
øSec. 5104. Additional provisions. 
øSec. 5105. Definitions. 
øCHAPTER 3—MISCELLANEOUS MATTERS 
øSec. 5131. Enhancement of public safety communications 
interoperability. 
øSec. 5132. Sense of Congress regarding the incident command 
system. 
øSec. 5133. Sense of Congress regarding United States North-
ern Command plans and strategies.
2617 
øTITLE I—REFORM OF THE 
INTELLIGENCE COMMUNITY 
øSEC. 1001. SHORT TITLE. 
øThis title may be cited as the ‘‘National 
Security Intelligence Improvement Act of 
2004’’. 
øSubtitle A—Establishment of 
National Intelligence Director 
øSEC. 1011. REORGANIZATION AND IMPROVEMENT OF MAN-
AGEMENT OF INTELLIGENCE COMMUNITY. 
ø(a) IN GENERAL.—Title I of the National 
Security Act of 1947 (50 U.S.C. 402 et seq.) is 
amended by striking sections 102 through 104 
and inserting the following new sections: 
ø‘‘NATIONAL INTELLIGENCE DIRECTOR 
ø‘‘SEC. 102. (a) NATIONAL INTELLIGENCE DI-
RECTOR.—(1) There is a National Intelligence 
Director who shall be appointed by the Presi-
dent, by and with the advice and consent of 
the Senate. 
ø‘‘(2) The National Intelligence Director 
shall not be located within the Executive Of-
fice of the President. 
ø‘‘(b) PRINCIPAL RESPONSIBILITY.—Subject 
to the authority, direction, and control of the
2618 
President, the National Intelligence Director 
shall— 
ø‘‘(1) serve as head of the intelligence 
community; 
ø‘‘(2) act as the principal adviser to 
the President, to the National Security 
Council, and the Homeland Security 
Council for intelligence matters related 
to the national security; and 
ø‘‘(3) through the heads of the depart-
ments containing elements of the intel-
ligence community, and the Central Intel-
ligence Agency, manage and oversee the 
execution of the National Intelligence 
Program and direct the National Intel-
ligence Program. 
ø‘‘(c) PROHIBITION ON DUAL SERVICE.—The 
individual serving in the position of National 
Intelligence Director shall not, while so serv-
ing, also serve as the Director of the Central 
Intelligence Agency or as the head of any 
other element of the intelligence community. 
ø‘‘RESPONSIBILITIES AND AUTHORITIES OF THE 
NATIONAL INTELLIGENCE DIRECTOR 
ø‘‘SEC. 102A. (a) PROVISION
OF
INTEL-
LIGENCE.—(1) Under the direction of the Presi-
2619 
dent, the National Intelligence Director shall 
be responsible for ensuring that national in-
telligence is provided— 
ø‘‘(A) to the President; 
ø‘‘(B) to the heads of departments and 
agencies of the executive branch; 
ø‘‘(C) to the Chairman of the Joint 
Chiefs of Staff and senior military com-
manders; 
ø‘‘(D) where appropriate, to the Sen-
ate and House of Representatives and the 
committees thereof; and 
ø‘‘(E) to such other persons as the Na-
tional Intelligence Director determines to 
be appropriate. 
ø‘‘(2) Such national intelligence should be 
timely, objective, independent of political 
considerations, and based upon all sources 
available to the intelligence community and 
other appropriate entities. 
ø‘‘(b) ACCESS TO INTELLIGENCE.—To the ex-
tent approved by the President, the National 
Intelligence Director shall have access to all 
national intelligence and intelligence related 
to the national security which is collected by
2620 
any Federal department, agency, or other en-
tity, except as otherwise provided by law or, 
as appropriate, under guidelines agreed upon 
by the Attorney General and the National In-
telligence Director. 
ø‘‘(c) BUDGET AUTHORITIES.—(1)(A) The Na-
tional Intelligence Director shall develop and 
present to the President on an annual basis 
a budget for intelligence and intelligence-re-
lated activities of the United States. 
ø‘‘(B) In carrying out subparagraph (A) for 
any fiscal year for the components of the 
budget that comprise the National Intel-
ligence Program, the National Intelligence Di-
rector shall provide guidance to the heads of 
departments containing elements of the intel-
ligence community, and to the heads of the 
elements of the intelligence community, for 
development of budget inputs to the National 
Intelligence Director. 
ø‘‘(2)(A) The National Intelligence Direc-
tor shall participate in the development by 
the Secretary of Defense of the annual budg-
ets for the Joint Military Intelligence Pro-
2621 
gram and for Tactical Intelligence and Re-
lated Activities. 
ø‘‘(B) The National Intelligence Director 
shall provide guidance for the development of 
the annual budget for each element of the in-
telligence community that is not within the 
National Intelligence Program. 
ø‘‘(3) In carrying out paragraphs (1) and 
(2), the National Intelligence Director may, as 
appropriate, obtain the advice of the Joint In-
telligence Community Council. 
ø‘‘(4) The National Intelligence Director 
shall ensure the effective execution of the an-
nual budget for intelligence and intelligence- 
related activities. 
ø‘‘(5)(A) The National Intelligence Direc-
tor shall facilitate the management and exe-
cution of funds appropriated for the National 
Intelligence Program. 
ø‘‘(B) Notwithstanding any other provi-
sion of law, in receiving funds pursuant to rel-
evant appropriations Acts for the National In-
telligence Program, the Office of Management 
and Budget shall apportion funds appro-
priated for the National Intelligence Program
2622 
to the National Intelligence Director for allo-
cation to the elements of the intelligence com-
munity through the host executive depart-
ments that manage programs and activities 
that are part of the National Intelligence Pro-
gram. 
ø‘‘(C) The National Intelligence Director 
shall monitor the implementation and execu-
tion of the National Intelligence Program by 
the heads of the elements of the intelligence 
community that manage programs and activi-
ties that are part of the National Intelligence 
Program, which may include audits and eval-
uations, as necessary and feasible. 
ø‘‘(6) Apportionment and allotment of 
funds under this subsection shall be subject 
to chapter 13 and section 1517 of title 31, 
United States Code, and the Congressional 
Budget and Impoundment Control Act of 1974 
(2 U.S.C. 621 et seq.). 
ø‘‘(7)(A) The National Intelligence Direc-
tor shall provide a quarterly report, begin-
ning April 1, 2005, and ending April 1, 2007, 
to the President and the Congress regarding 
implementation of this section.
2623 
ø‘‘(B) The National Intelligence Director 
shall report to the President and the Congress 
not later than 5 days after learning of any in-
stance in which a departmental comptroller 
acts in a manner inconsistent with the law 
(including permanent statutes, authorization 
Acts, and appropriations Acts), or the direc-
tion of the National Intelligence Director, in 
carrying out the National Intelligence Pro-
gram. 
ø‘‘(d) ROLE OF NATIONAL INTELLIGENCE DI-
RECTOR
IN
REPROGRAMMING.—(1) No funds 
made available under the National Intel-
ligence Program may be transferred or repro-
grammed without the prior approval of the 
National Intelligence Director, except in ac-
cordance with procedures prescribed by the 
National Intelligence Director. 
ø‘‘(2) The Secretary of Defense shall con-
sult with the National Intelligence Director 
before transferring or reprogramming funds 
made available under the Joint Military Intel-
ligence Program. 
ø‘‘(e) TRANSFER OF FUNDS OR PERSONNEL 
WITHIN NATIONAL INTELLIGENCE PROGRAM.—(1)