[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5649 Introduced in House (IH)]
112th CONGRESS
2d Session
H. R. 5649
To amend the Commodity Exchange Act to clarify the exemptions for
captive finance companies from the definition of major swap participant
and from the swap clearing requirement.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 8, 2012
Mr. Schilling (for himself, Mr. Owens, and Mr. McIntyre) introduced the
following bill; which was referred to the Committee on Agriculture
_______________________________________________________________________
A BILL
To amend the Commodity Exchange Act to clarify the exemptions for
captive finance companies from the definition of major swap participant
and from the swap clearing requirement.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Manufacturing Certainty and Captive
Finance Affiliate Clarification Act''.
SEC. 2. CLARIFICATION OF THE EXEMPTIONS FOR CAPTIVE FINANCE COMPANIES
FROM THE DEFINITION OF MAJOR SWAP PARTICIPANT AND FROM
THE SWAP CLEARING REQUIREMENT.
(a) Exclusion From Definition of Major Swap Participant.--Section
1a(33)(D) of the Commodity Exchange Act (7 U.S.C. 1a(33)(D)) is amended
to read as follows:
``(D) Exclusion of certain captive finance
entities.--
``(i) In general.--The definition under
this paragraph shall not include an entity
whose primary business is providing financing
that facilitates the sale or lease of products
by or on behalf of the parent company or
another subsidiary of the parent company, and
uses derivatives only for the purpose of
hedging underlying commercial risks in a
consolidated financing and leasing portfolio,
at least 90 percent of which, as of the end of
its preceding fiscal year, is qualifying
financing (including loans, notes, installment
sales contracts, receivables, and operating and
financing leases).
``(ii) Definitions.--In this subparagraph:
``(I) Qualifying financing.--The
term `qualifying financing' means--
``(aa) any financing or
lease of, or that includes, a
product; or
``(bb) any financing to or
for the benefit of an affiliate
of the entity, a distribution
entity, or any customer or
affiliate of a distribution
entity,
except that the term does not include
any financing that does not facilitate
the sale of a product manufactured by
the entity or its affiliates, as
determined by the Commission.
``(II) Product.--The term `product'
means--
``(aa) any good that is
manufactured or sold by an
affiliate of the entity; and
``(bb) any service that is
provided by an affiliate of the
entity.
``(III) Distribution entity.--The
term `distribution entity' means a
person whose primary business is the
sale, lease or servicing of a product
that is manufactured by the entity or
its affiliates.
``(IV) Affiliate.--The term
`affiliate' means, with respect to an
entity--
``(aa) a person that
reports information or prepares
financial statements on a
consolidated basis with the
entity, or for which a parent
company reports information or
prepares financial statements
on a consolidated basis for the
person and the entity; or
``(bb) a person of which
the entity or the parent of the
entity holds 50 percent or more
of the equity interests.
``(V) Person.--The term `person'
means an individual, partnership,
corporation (including a business
trust), limited liability company,
joint stock company, trust,
unincorporated association, joint
venture or other entity, or a
government or any political subdivision
or agency thereof.''.
(b) Exclusion From Swap Clearing Requirement.--Section
2(h)(7)(C)(iii) of such Act (7 U.S.C. 2(h)(7)(C)(iii)) is amended to
read as follows:
``(iii) Exclusion of certain captive
finance entities.--Such term shall not include
an entity excluded from the definition of major
swap participant by reason of section
1a(33)(D).''.
SEC. 3. EFFECTIVE DATE.
The amendments made by this Act shall take effect as if they had
been included in subtitle A of title VII of the Dodd-Frank Wall Street
Reform and Consumer Protection Act.
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