essary to aid in the transfer of catastrophe risk from 
participating States to private parties; and 
(7) submit annual reports to Congress describ-
ing the activities of the Consortium for the pre-
ceding year, and the first such annual report shall 
include an assessment of the costs to States and re-
gions associated with catastrophe risk and an anal-
ysis of the costs and benefits, for States not partici-
pating in the Consortium, of such nonparticipation. 
SEC. 5. POWERS. 
The Consortium— 
(1) may make and perform such contracts and 
other agreements with any individual or other pri-
vate or public entity however designated and wher-
ever situated, as may be necessary for carrying out 
the functions of the Consortium; and 
(2) shall have such other powers, other than the 
power to assume risk or incur debt, as may be nec-
essary and incident to carrying out this Act. 
SEC. 6. NONPROFIT ENTITY; CONFLICTS OF INTEREST; AU-
DITS. 
(a) NONPROFIT ENTITY.—The Consortium shall be 
a nonprofit entity and no part of the net earnings of the 
Consortium shall inure to the benefit of any member, 
founder, contributor, or individual. 
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(b) CONFLICTS OF INTEREST.—No director, officer, 
or employee of the Consortium shall in any manner, di-
rectly or indirectly, participate in the deliberation upon or 
the determination of any question affecting his or her per-
sonal interests or the interests of any Consortium, part-
nership, or organization in which he or she is directly or 
indirectly interested. 
(c) AUDITS.— 
(1) ANNUAL AUDIT.—The financial statements 
of the Consortium shall be audited annually in ac-
cordance with generally accepted auditing standards 
by independent certified public accountants. 
(2) REPORTS.—The report of each annual audit 
pursuant to paragraph (1) shall be included in the 
annual report submitted in accordance with section 
4(7). 
(d) PROHIBITION ON ELECTION AND LOBBYING AC-
TIVITIES.— 
(1) FEDERAL.—The Consortium may not— 
(A) make any contribution to a candidate 
for election for Federal office or to a political 
committee; 
(B) employ or retain— 
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(i) a registered lobbyist under the 
Lobbying Disclosure Act of 1995 (2 U.S.C. 
1601 et seq.); or 
(ii) an organization that employs one 
or more lobbyists and is registered under 
section 4(a)(2) of such Act (2 U.S.C. 
1603(a)(2)); or 
(C) provide any thing of value, other than 
educational materials or information, to any 
elected official of the Federal Government. 
For purposes of this paragraph, the terms ‘‘con-
tribution’’, ‘‘candidate’’, ‘‘Federal office’’, and ‘‘po-
litical committee’’ have the meanings given such 
terms in section 301 of the Federal Election Cam-
paign Act of 1971 (2 U.S.C. 431). 
(2) CONSORTIUM.—The Consortium may not— 
(A) make any contribution to a candidate 
for election for any State or local office or to 
any committee, club, association, or other group 
that receives contributions or makes expendi-
tures for the purpose of influencing any such 
election; 
(B) employ or retain any person who en-
gages in influencing legislating (as such term is 
defined in section 4911(d) of the Internal Rev-
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enue Code of 1986 (26 U.S.C. 4911(d))) of any 
State or local legislative body; or 
(C) provide any thing of value, other than 
educational materials or information, to any 
elected official of any State or local government. 
SEC. 7. MANAGEMENT. 
(a) BOARD OF DIRECTORS; MEMBERSHIP; DESIGNA-
TION OF CHAIRPERSON.— 
(1) BOARD OF DIRECTORS.—The management 
of the Consortium shall be vested in a board of di-
rectors (referred to in this Act as the ‘‘Board’’) com-
posed of not less than 3 members. 
(2) CHAIRPERSON.—The Secretary of the 
Treasury, or the designee of the Secretary, shall 
serve as the chairperson of the Board. 
(3) MEMBERSHIP.—The members of the Board 
shall include— 
(A) the Secretary of Homeland Security 
and the Secretary of Commerce, or the des-
ignees of such Secretaries, respectively, but only 
during such times as there are fewer than two 
States participating in the Consortium; and 
(B) a member from each State partici-
pating in the Consortium, who shall be ap-
pointed by such State. 
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(b) BYLAWS.—The Board may prescribe, amend, and 
repeal such bylaws as may be necessary for carrying out 
the functions of the Consortium. 
(c) COMPENSATION, ACTUAL, NECESSARY, 
AND 
TRANSPORTATION EXPENSES.— 
(1) NON-FEDERAL EMPLOYEES.—A member of 
the Board who is not otherwise employed by the 
Federal Government shall be entitled to receive the 
daily equivalent of the annual rate of basic pay pay-
able for level IV of the Executive Schedule under 
section 5315 of title 5, United States Code, as in ef-
fect from time to time, for each day (including travel 
time) during which such member is engaged in the 
actual performance of duties of the Consortium. 
(2) FEDERAL EMPLOYEES.—A member of the 
Board who is an officer or employee of the Federal 
Government shall serve without additional pay (or 
benefits in the nature of compensation) for service 
as a member of the Consortium. 
(3) TRAVEL EXPENSES.—Members of the Con-
sortium shall be entitled to receive travel expenses, 
including per diem in lieu of subsistence, equivalent 
to those set forth in subchapter I of chapter 57 of 
title 5, United States Code. 
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