datamatters24/research-document-archive huggingface dataset:
176
‘‘(A) REGULAR CHARITY.—‘Regular char-
ity’ means—
‘‘(i) a church or a convention or asso-
ciation of churches,
‘‘(ii) 
an 
educational 
organization
which normally maintains a regular faculty
and curriculum and normally has a regu-
larly enrolled body of pupils or students in
attendance at the place where its edu-
cational activities are regularly carried on,
‘‘(iii) an organization the principal
purpose or functions of which are the pro-
viding of medical or hospital care or medi-
cal education or medical research, if the
organization is a hospital, or if the organi-
zation is a medical research organization
directly engaged in the continuous active
conduct of medical research in conjunction
with a hospital,
‘‘(iv) an organization which normally
receives a substantial part of its support
(exclusive of income received in the exer-
cise or performance by such organization
of its charitable, educational, or other pur-
pose or function constituting the basis for
108
Federal regulatory authority (includ-
ing the Securities and Exchange Com-
mission) or State insurance authority.
‘‘(iv) CERTAIN
SUBSIDIARIES.—The
Board shall not, by regulation, guideline,
order or otherwise, prescribe or impose any
capital or capital adequacy rules, stand-
ards, guidelines, or requirements upon any
subsidiary that is not a depository institu-
tion and that is registered as an invest-
ment adviser under the Investment Advis-
ers Act of 1940, except that this clause
shall not be construed as preventing the
Board from imposing capital or capital
adequacy rules, guidelines, standards, or
requirements with respect to activities of a
registered investment adviser other than
investment advisory activities or activities
incidental to investment advisory activities.
‘‘(v) LIMITATIONS ON INDIRECT AC-
TION.—In developing, establishing, or as-
sessing holding company capital or capital
adequacy rules, guidelines, standards, or
requirements for purposes of this para-
graph, the Board shall not take into ac-
section (c) represent at least 85 percent of the con-
solidated annual gross revenues of the company.
‘‘(3) NO EXPANSION OF GRANDFATHERED COM-
MERCIAL
ACTIVITIES
THROUGH
MERGER
OR
CON-
SOLIDATION.—A financial holding company that en-
gages in activities or holds shares pursuant to this
subsection, or a subsidiary of such financial holding
company, may not acquire, in any merger, consolida-
tion, or other type of business combination, assets of
any other company which is engaged in any activity
which the Board has not determined to be financial
in nature or incidental to activities that are financial
in nature under subsection (c).
‘‘(4) CONTINUING
REVENUE
LIMITATION
ON
GRANDFATHERED
COMMERCIAL
ACTIVITIES.—Not-
withstanding any other provision of this subsection,
a financial holding company may continue to engage
in activities or hold shares in companies pursuant to
this subsection only to the extent that the aggregate
annual gross revenues derived from all such activi-
ties and all such companies does not exceed 15 per-
cent of the consolidated annual gross revenues of the
financial holding company (excluding revenues de-
rived from subsidiary depository institutions).
426
(A) IN GENERAL.—The term ‘‘financial in-
stitution’’ means any institution engaged in the
business of providing financial services to cus-
tomers who maintain a credit, deposit, trust, or
other financial account or relationship with the
institution.
(B) CERTAIN
FINANCIAL
INSTITUTIONS
SPECIFICALLY INCLUDED.—The term ‘‘financial
institution’’ includes any depository institution
(as defined in section 19(b)(1)(A) of the Fed-
eral Reserve Act), any broker or dealer, any in-
vestment adviser or investment company, any
insurance company, any loan or finance com-
pany, any credit card issuer or operator of a
credit card system, and any consumer reporting
agency that compiles and maintains files on
consumers on a nationwide basis (as defined in
section 603(p)).
(C) SECURITIES INSTITUTIONS.—For pur-
poses of subparagraph (B)—
(i) the terms ‘‘broker’’ and ‘‘dealer’’
have the meanings provided in section 3 of
the Securities Exchange Act of 1934 (15
U.S.C. 78c);
427
(ii) the term ‘‘investment adviser’’ has
the meaning provided in section 202(a)(11)
of the Investment Advisers Act of 1940
(15 U.S.C. 80b–2(a)); and
(iii) the term ‘‘investment company’’
has the meaning provided in section 3 of
the Investment Company Act of 1940 (15
U.S.C. 80a–3).
(D) FURTHER
DEFINITION
BY
REGULA-
TION.—The Federal Trade Commission, after
consultation with Federal banking agencies and
the Securities and Exchange Commission, may
prescribe regulations clarifying or describing
the types of institutions which shall be treated
as financial institutions for purposes of this
subtitle.
Passed the House of Representatives July 1, 1999.
Attest:
Clerk.
177
its exemption under section 253(a)) from
the United States or any State or political
subdivision thereof or from direct or indi-
rect contributions from the general public,
and which is organized and operated exclu-
sively to receive, hold, invest, and admin-
ister property and to make expenditures to
or for the benefit of a college or university
which is an organization referred to in
clause (ii) of this subparagraph and which
is an agency or instrumentality of a State
or political subdivision thereof, or which is
owned or operated by a State or political
subdivision thereof or by an agency or in-
strumentality of one or more States or po-
litical subdivisions,
‘‘(v) a governmental unit referred to
in subsection (c)(1),
‘‘(vi) an organization referred to in
subsection (c)(2) which normally receives a
substantial part of its support (exclusive of
income received in the exercise or perform-
ance by such organization of its charitable,
educational, or other purpose or function
constituting the basis for its exemption
HR 10 PCS 
(ix) a full description of any contracts, 
arrangements, or understandings with re-
spect to any security of the insurer in 
which any acquiring party is involved, in-
cluding transfer of any of the securities, 
joint ventures, loan or option arrange-
ments, puts or calls, guarantees of loans, 
guarantees against loss or guarantees of 
profits, division of losses or profits, or the 
giving or withholding of proxies, and iden-
tification of the persons with whom such 
contracts, 
arrangements, 
or 
under-
standings have been entered into; 
(x) a description of the purchase of 
any security of the insurer during the 12- 
month period preceding the date of notifi-
cation by any acquiring party, including 
the dates of purchase, names of the pur-
chasers, and consideration paid, or agreed 
to be paid, therefor; 
(xi) a description of any recommenda-
tions to purchase any security of the in-
surer made during the 12-month period 
preceding the date of notification by any 
acquiring party or by any person based 
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282
the whole or half blood), spouse, ancestors, and
lineal descendants; and
‘‘(E) Stock or other equity interest con-
structively owned by a person by reason of the
application of subparagraph (A) shall, for the
purpose of applying subparagraph (A), (B), or
(C), be treated as actually owned by such per-
son, but stock or other equity interest construc-
tively owned by an individual by reason of the
application of subparagraph (B) or (C) shall
not be treated as owned by him for the purpose
of again applying either of such paragraphs in
order to make another the constructive owner of
such stock or equity interest.
‘‘(6) EARNED INCOME.—
‘‘(A) 
IN
GENERAL.—‘Earned 
income’
means—
‘‘(i) wages, salaries, tips, and other
employee compensation, plus
‘‘(ii) the amount of the taxpayer’s net
earnings from self-employment for the tax-
able year (within the meaning of section
1402(a)).
‘‘(B) SPECIAL
RULES.—For purposes of
subparagraph (A)—
the activity commenced or conducted by the com-
pany acquired no later than 30 calendar days
after commencing the activity or consummating
the acquisition.
‘‘(B) APPROVAL NOT REQUIRED FOR CER-
TAIN
FINANCIAL
ACTIVITIES.—Except as pro-
vided in section 4(j) with regard to the acquisi-
tion of a savings association or in paragraph (6)
of this subsection, a financial holding company
and a wholesale financial holding company may
commence any activity, or acquire any com-
pany, pursuant to paragraph (3) or any regula-
tion prescribed or order issued under paragraph
(4), without prior approval of the Board.
‘‘(6) NOTICE REQUIRED FOR LARGE COMBINA-
TIONS.—
‘‘(A) IN
GENERAL.—No financial holding
company or wholesale financial holding com-
pany shall directly or indirectly acquire, and no
company that becomes a financial holding com-
pany or a wholesale financial holding company
shall directly or indirectly acquire control of,
any company in the United States, including
through merger, consolidation, or other type of
business combination, that—
177
SEC. 303. FASTER VESTING OF CERTAIN EMPLOYER MATCH-
ING CONTRIBUTIONS.
(a) IN GENERAL.—Section 411(a) (relating to min-
imum vesting standards) is amended—
(1) in paragraph (2), by striking ‘‘A plan’’ and
inserting ‘‘Except as provided in paragraph (12), a
plan’’; and
(2) by adding at the end the following:
‘‘(12) FASTER
VESTING
FOR
MATCHING
CON-
TRIBUTIONS.—In the case of matching contributions
(as defined in section 401(m)(4)(A)), paragraph (2)
shall be applied—
‘‘(A) by substituting ‘3 years’ for ‘5 years’
in subparagraph (A), and
‘‘(B) by substituting the following table for
the table contained in subparagraph (B):
The nonforfeitable
‘‘Years of service:
percentage is:
2 ..........................................................................................
3 ..........................................................................................
4 ..........................................................................................
5 ..........................................................................................
6 ..........................................................................................
100.’’.
(b) AMENDMENTS TO ERISA.—Section 203(a) of the
Employee Retirement Income Security Act of 1974 (29
U.S.C. 1053(a)) is amended—
(1) in paragraph (2), by striking ‘‘A plan’’ and
inserting ‘‘Except as provided in paragraph (4), a
plan’’, and
terms and conditions contained in such regulation or
order, unless modified by the Board);’’.
(b) CONFORMING CHANGES TO OTHER STATUTES.—
(1) AMENDMENT TO THE BANK HOLDING COM-
PANY ACT AMENDMENTS OF 1970.—Section 105 of the
Bank Holding Company Act Amendments of 1970 (12
U.S.C. 1850) is amended by striking ‘‘, to engage di-
rectly or indirectly in a nonbanking activity pursu-
ant to section 4 of such Act,’’.
(2) AMENDMENT TO THE BANK SERVICE COM-
PANY ACT.—Section 4(f) of the Bank Service Com-
pany Act (12 U.S.C. 1864(f)) is amended by striking
the period and adding at the end the following: ‘‘as
of the day before the date of enactment of the Finan-
cial Services Act of 1999.’’.
SEC. 103. FINANCIAL HOLDING COMPANIES.
(a) IN GENERAL.—The Bank Holding Company Act
of 1956 is amended by inserting after section 5 (12 U.S.C.
1844) the following new section:
‘‘SEC. 6. FINANCIAL HOLDING COMPANIES.
‘‘(a) FINANCIAL HOLDING COMPANY DEFINED.—For
purposes of this section, the term ‘financial holding com-
pany’ means a bank holding company which meets the re-
quirements of subsection (b).
‘‘(H) Directly or indirectly acquiring or
controlling, whether as principal, on behalf of 1
or more entities (including entities, other than a
depository institution, that the bank holding
company controls) or otherwise, shares, assets, or
ownership interests (including without limita-
tion debt or equity securities, partnership inter-
ests, trust certificates or other instruments rep-
resenting ownership) of a company or other enti-
ty, whether or not constituting control of such
company or entity, engaged in any activity not
authorized pursuant to this section if—
‘‘(i) the shares, assets, or ownership in-
terests are not acquired or held by a deposi-
tory institution;
‘‘(ii) such shares, assets, or ownership
interests are acquired and held by an affil-
iate of the bank holding company that is a
registered broker or dealer that is engaged
in securities underwriting activities, or an
affiliate of such broker or dealer, as part of
a bona fide underwriting or merchant bank-
ing activity, including investment activities
engaged in for the purpose of appreciation
and ultimate resale or disposition of the in-
vestment;
‘‘(iii) such shares, assets, or ownership
interests are held only for such a period of
time as will permit the sale or disposition
thereof on a reasonable basis consistent with
the nature of the activities described in
clause (ii); and
‘‘(iv) during the period such shares, as-
sets, or ownership interests are held, the
bank holding company does not actively
participate in the day to day management
or operation of such company or entity, ex-
cept insofar as necessary to achieve the ob-
jectives of clause (ii).
‘‘(I) Directly or indirectly acquiring or con-
trolling, whether as principal, on behalf of 1 or
more entities (including entities, other than a de-
pository institution or subsidiary of a depository
institution, that the bank holding company con-
trols) or otherwise, shares, assets, or ownership
interests (including without limitation debt or
equity securities, partnership interests, trust cer-
tificates or other instruments representing own-
ership) of a company or other entity, whether or
not constituting control of such company or enti-
ty, engaged in any activity not authorized pur-
suant to this section if—
‘‘(i) the shares, assets, or ownership in-
terests are not acquired or held by a deposi-
tory institution or a subsidiary of a deposi-
tory institution;
‘‘(ii) such shares, assets, or ownership
interests are acquired and held by an insur-
ance company that is predominantly en-
gaged in underwriting life, accident and
health, or property and casualty insurance
(other than credit-related insurance) or pro-
viding and issuing annuities;
‘‘(iii) such shares, assets, or ownership
interests represent an investment made in
the ordinary course of business of such in-
surance company in accordance with rel-
evant State law governing such investments;
and
‘‘(iv) during the period such shares, as-
sets, or ownership interests are held, the
bank holding company does not directly or
indirectly participate in the day-to-day
management or operation of the company
cial holding company may not engage in a covered
transaction (as defined by section 23A(b)(7) of the
Federal Reserve Act) with any affiliate controlled by
the company pursuant to section 10(c), this sub-
section, or subparagraph (H) or (I) of subsection
(c)(3).
‘‘(7) SUNSET
OF
GRANDFATHER.—A financial
holding company engaged in any activity, or retain-
ing direct or indirect ownership or control of shares
of a company, pursuant to this subsection, shall ter-
minate such activity and divest ownership or control
of the shares of such company before the end of the
10-year period beginning on the date of the enactment
of the Financial Services Act of 1999. The Board
may, upon application by a financial holding com-
pany, extend such 10-year period by a period not to
exceed an additional 5 years if such extension would
not be detrimental to the public interest.
‘‘(g) DEVELOPING ACTIVITIES.—A financial holding
company and a wholesale financial holding company may
engage directly or indirectly, or acquire shares of any com-
pany engaged, in any activity that the Board has not deter-
mined to be financial in nature or incidental to financial
activities under subsection (c) if—
283
‘‘(i) the earned income of an individ-
ual shall be computed without regard to
any community property laws,
‘‘(ii) no amount received as a pension
or annuity shall be taken into account,
‘‘(iii) no income of nonresident alien
individuals not connected with United
States business shall be taken into ac-
count, and
‘‘(iv) no amount received for services
provided by an individual while the individ-
ual is an inmate at a penal institution shall
be taken into account.
‘‘(b) TERMS DEFINED IN CHAPTER 1.—If a term
that is used but not defined in this chapter or in section
7701 is defined in chapter 2, the definition in chapter 2
shall apply except if manifestly incompatible with the in-
tent of the provision in which the term is used.
‘‘SEC. 172. RULES OF APPLICATION.
‘‘(a) DEFINITIONS.—Any definition included in this
chapter shall apply for all purposes of this chapter
unless—
‘‘(1) such definition is limited to the purposes
of a particular chapter, section, or subsection, or
paragraph by operation of paragraph (2), such ex-
emption shall cease to apply to such company and
such company shall divest control of each bank it con-
trols before the end of the 180-day period beginning
on the date that the company receives notice from the
Board that the company has failed to continue to
qualify for such exemption, unless before the end of
such 180-day period, the company has—
‘‘(A) corrected the condition or ceased the
activity that caused the company to fail to con-
tinue to qualify for the exemption; and
‘‘(B) implemented procedures that are rea-
sonably adapted to avoid the reoccurrence of such
condition or activity.
The issuance of any notice under this paragraph that
relates to the activities of a bank shall not be con-
strued as affecting the authority of the bank to con-
tinue to engage in such activities until the expiration
of such 180-day period.’’.
(b) INDUSTRIAL LOAN COMPANIES AFFILIATE OVER-
DRAFTS.—Section 2(c)(2)(H) of the Bank Holding Com-
pany Act of 1956 (12 U.S.C. 1841(c)(2)(H)) is amended
by inserting before the period at the end ‘‘, or that is other-
wise permissible for a bank controlled by a company de-
scribed in section 4(f)(1)’’.
‘‘(i) is engaged in activities permitted
under this subsection or subsection (g); and
‘‘(ii) has consolidated total assets in
excess of $40,000,000,000,
unless such holding company has provided notice
to the Board, not later than 60 days prior to
such proposed acquisition or prior to becoming a
financial holding company or wholesale finan-
cial holding company, and during that time pe-
riod, or such longer time period not exceeding an
additional 60 days, as established by the Board,
the Board has not issued a notice disapproving
the proposed acquisition or retention.
‘‘(B) FACTORS
FOR
CONSIDERATION.—In
reviewing any prior notice filed under this para-
graph, the Board shall take into consideration—
‘‘(i) whether the company is in compli-
ance with all applicable criteria set forth in
subsection (b) and the provisions of sub-
section (d);
‘‘(ii) whether the proposed combination
represents an undue aggregation of re-
sources;
‘‘(iii) whether the proposed combina-
tion poses a risk to the deposit insurance
system;
‘‘(iv) whether the proposed combination
poses a risk to State insurance guaranty
funds;
‘‘(v) whether the proposed combination
can reasonably be expected to be in the best
interests of depositors or policyholders of the
respective entities; and
‘‘(vi) whether the proposed transaction
can reasonably be expected to further the
purposes of this Act and produce benefits to
the public.
‘‘(C) REQUIRED INFORMATION.—The Board
may disapprove any prior notice filed under this
paragraph if the company submitting such no-
tice neglects, fails, or refuses to furnish to the
Board all relevant information required by the
Board.
‘‘(D) SOLICITATION
OF
VIEWS
OF
OTHER
SUPERVISORY AGENCIES.—
‘‘(i) IN GENERAL.—Upon receiving a
prior notice under this paragraph, in order
to provide for the submission of their views
330
(2) For the military construction projects outside
the United States authorized by section 2101(b),
$86,400,000.
(3) For unspecified minor construction projects
authorized by section 2805 of title 10, United States
Code, $9,500,000.
(4) For architectural and engineering services
and construction design under section 2807 of title
10, United States Code, $87,205,000.
(5) For military family housing functions:
(A) For construction and acquisition, plan-
ning and design and improvement of military
family housing and facilities, $80,200,000.
(B) For support of military family housing
(including the functions described in section
2833 
of 
title 
10, 
United 
States 
Code),
$1,089,812,000.
(6) For the construction of the United States
Disciplinary Barracks, Fort Leavenworth, Kansas,
authorized in section 2101(a) of the Military Con-
struction Authorization Act for Fiscal Year 1998 (di-
vision B of Public Law 105–85; 111 Stat. 1967),
$18,800,000.
(7) For the construction of the force XXI soldier
development center, Fort Hood, Texas, authorized in
ICES.—A managed care organization, in offering coverage
under a managed care plan, shall include coverage of pre-
scription drugs, preventive services, and inpatient and out-
patient services, and shall—
(1) include coverage of annual screening mam-
mography for any female enrollee who is 40 years of
age or older and for any female enrollee who is less
than 40 years of age and who has a medical condi-
tion that makes such coverage medically necessary
and appropriate;
(2) not restrict benefits for any hospital length
of stay in connection with—
(A) a mastectomy for the treatment of
breast cancer to less than 48 hours, or
(B) a lymph node dissection for the treat-
ment of breast cancer to less than 24 hours;
and
(3) not exclude or restrict benefits—
(A) for prescription contraceptive drugs or
devices approved by the Food and Drug Admin-
istration, or generic equivalents approved as
substitutable by the Food and Drug Adminis-
tration, or
(B) for outpatient contraceptive services
(including consultations, examinations, proce-
of any service provider described in sub-
paragraph (A) who is a provider of medical
care under the plan.
‘‘(C) SOLE
AUTHORITY.—The board has
sole authority to approve applications for par-
ticipation in the plan and to contract with a
service provider to administer the day-to-day af-
fairs of the plan.
‘‘(c) TREATMENT OF FRANCHISE NETWORKS.—In
the case of a group health plan which is established and
maintained by a franchiser for a franchise network con-
sisting of its franchisees—
‘‘(1) the requirements of subsection (a) and sec-
tion 801(a)(1) shall be deemed met if such require-
ments would otherwise be met if the franchiser were
deemed to be the sponsor referred to in section
801(b), such network were deemed to be an associa-
tion described in section 801(b), and each franchisee
were deemed to be a member (of the association and
the sponsor) referred to in section 801(b); and
‘‘(2) the requirements of section 804(a)(1) shall
be deemed met.
‘‘(d) CERTAIN COLLECTIVELY BARGAINED PLANS.—
-
‘‘(i) setting contribution rates based
on the claims experience of the plan; or
‘‘(ii) varying contribution rates for
small employers in a State to the extent
that such rates could vary using the same
methodology employed in such State for
regulating premium rates in the small
group market, subject to the requirements
of section 702(b) relating to contribution
rates.
‘‘(3) FLOOR FOR NUMBER OF COVERED INDI-
VIDUALS
WITH
RESPECT
TO
CERTAIN
PLANS.—If
any benefit option under the plan does not consist
of health insurance coverage, the plan has as of the
beginning of the plan year not fewer than 1,000 par-
ticipants and beneficiaries.
‘‘(4) MARKETING REQUIREMENTS.—
‘‘(A) IN
GENERAL.—If a benefit option
which consists of health insurance coverage is
offered under the plan, State-licensed insurance
agents shall be used to distribute to small em-
ployers coverage which does not consist of
health insurance coverage in a manner com-
parable to the manner in which such agents are
used to distribute health insurance coverage.