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 violations", and by striking out the last two sentences and inserting in lieu thereof the following:

Claims.

"(B) .—Any person who is determined by the Secretary, after notice and opportunity for a hearing, to have committed an act which is a violation of section 12002, 12003, 12004, 120050?), or 12008(d)(2) of the Commercial Motor Vehicle Safety Act of 1986 shall be liable to the United States for a civil penalty not to exceed $2,500 for each offense.

"(C) —The amount of any civil penalty, and a reasonable time for abatement of the violation, shall by written order be determined by the Secretary, taking into account the nature, circumstances, extent, and gravity of the violation committed and, with respect to the violator, the degree of culpability, history of prior offenses, ability to pay, effect on ability to continue to do business, and such other matters as justice and public safety may require. In each case, the assessment shall be calculated to induce further compliance.".

(c) —Paragraph (3) of such section is amended by inserting "or section 12002, 12003, 12004, or 120050?) of the Commercial Motor Vehicle Safety Act of 1986" after "the Motor Carrier Safety Act of 1984".

(s) OUT OF SERVICE ORDERS.—Paragraph (5)(A) of such section is amended by inserting "or section 12002, 12003, 12004, or 120050)) of the Commercial Motor Vehicle Safety Act of 1986" after "the Motor Carrier Safety Act of 1984" and by striking out "section" the second place it appears and inserting in lieu thereof "sections". (e) CRIMINAL PENALTIES.—Paragraph (6) of such section is amended by inserting "(A) IN GENERAL.—" before "Any person" and by adding at the end thereof the following: "(B) VIOLATIONS PERTAINING TO CDLS.—Any person who knowingly and willfully violates— "(i) any provision of section 12002, 12003(b), 12003(c), 12004, 12005(b), or 12008(d)(2) of the Commercial Motor Vehicle Safety Act of 1986 or a regulation issued under such section, or "(ii) with respect to notification of a serious traffic violation as defined under section 12019 of such Act, any provision of section 12003(a) of such Act or a regulation issued under such section 12003(a), shall, upon conviction, be subject for each offense to a fine not to exceed $5,000 or imprisonment for a term not to exceed 90 days, or both.". (f) CONFORMING AMENDMENTS.—(1) Paragraph (2) of such section is amended by inserting "CIVIL PENALTY.—" after "(2)", by indenting subparagraph (A), as designated by subsection 0)) of this section, and aligning such subparagraph with subparagraph (B), as added by such subsection (b). (2) Paragraph (6) of such section is amended by inserting "CRIMINAL PENALTIES.—" after "(6)" and by indenting subparagraph (A), as designated by subsection (e) of this section, and aligning such subparagraph with subparagraph (B), as added by such subsection (e). (g) TECHNICAL AMENDMENTS.—(1) Paragraph (6) of such section is further amended by striking out "for a fine" and inserting in lieu thereof "to a fine",


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100 STAT. 3207-186

(2) Paragraph (13) of such section is amended by striking out "section 4" and inserting in lieu thereof "section 204". SEC. 12013. WAIVER AUTHORITY.

Notwithstanding any other provision of this title, after notice and an opportunity for comment, the Secretary may waive, in whole or in part, application of any provision of this title or any regulation issued under this title with respect to class of persons or class of commercial motor vehicles if the Secretary determines that such waiver is not contrary to the public interest and does not diminish the safe operation of commercial motor vehicles. Any waiver under this section shall be published in the Federal Register, together with reasons for such waiver.

49 USC app. 2711.

Federal Register, publication.

SEC. 12014. COMMERCIAL MOTOR VEHICLE SAFETY GRANTS.

Section 404 of the Surface Transportation Assistance Act of 1982 (49 U.S.C. 2304) is amended to read as follows: AUTHORIZATIONS

"SEC. 404. (a)(1) To carry out the purposes of section 402 of this title, there is authorized to be appropriated out of the Highway Trust Fund (other than the Mass Transit Account) $10,000,000 for fiscal year 1984, $20,000,000 for fiscal year 1985, and $30,000,000 for fiscal year 1986. "(2) Subject to section 9503(c)(1) of the Internal Revenue Code of 1986, there shall be available to the Secretary to incur obligations to carry out section 402 of this title, out of the Highway Trust Fund (other than the Mass Transit Account), $50,000,000 per fiscal year for each of fiscal years 1987 and 1988 and $60,000,000 per fiscal year for each of fiscal years 1989, 1990, and 1991. "(b) Funds authorized to be appropriated, and funds made available, by this section shall be used to reimburse States pro rata for the Federal share of the costs incurred. "(c) Grants made pursuant to the authority of this part shall be for periods not to exceed one year. "(d) Notwithstanding any other provision of law, beginning after September 30, 1986, approval by the Secretary of a grant to a State under section 402 shall be deemed a contractual obligation of the United States for payment of the Federal share of the costs incurred by such State in development or implementation or both of programs to enforce commercial motor vehicle rules, regulations, standards, and orders. "(e) Funds authorized to be appropriated, and funds made available, to carry out this section shall remain available for obligation by the Secretary for the fiscal year for which such funds are authorized or made available, as the case may be, and the three succeeding fiscal years. "(f) On October 1 of each fiscal year beginning after September 30, 1986, the Secretary may deduct, from funds made available for such fiscal year by subsection (a)(2), an amount not to exceed one-half of one percent of the amount of such funds for administering section 402 of this title in such fiscal year.". SEC. 12015. TRUCK BRAKE REGULATIONS.

Not late than the 90th day after the date of the enactment of this title, the Secretary shall revise the regulations of the Administrator of the Federal Highway Administration contained in section

49 USC app. 2^^J^-„„ JJ_¥ ^^^' ^^"''•

State and local governments. ,,, ^ Grants.

,.

49 USC app. 2712

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license: Creative Commons - Attribution Share-Alike - https://creativecommons.org/licenses/by-sa/4.0/


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 100 STAT. 3207-187

.^. ^ ^'^'', 49 USC app. 2713. State and local governments.

PUBLIC LAW 99-570—OCT. 27, 1986

393.42(c) of title 49 of the Code of Federal Regulations to require trucks and truck tractors manufactured after July 24, 1980, to have brakes operating on all wheels. The Secretary may provide for a delayed effective date (not exceeding 1 year) for trucks and truck tractors manufactured after July 24, 1980, and before such date of enactment. SEC. 12016. RADAR DEMONSTRATION PROJECT. vr ' ^ (^^ PROJECT DESCRIPTION.—Notwithstanding any other provision of law, the Secretary, in cooperation with State and local law enforcement officials, shall conduct a demonstration project to assess the benefits of continuous use of unmanned radar equipment on highway safety on a section of highway with a high rate of motor vehicle accidents. Such project shall be conducted in northern Kentucky on a hilly section of Interstate Route 1-75 between Fort Mitchell and the Brent Spence Bridge over the Ohio River during the 24-month period beginning on the date of the enactment of this title, (b) REPORTS.— (1) INTERIM REPORT.—Not

'' I

. 49 USC app. 2714 f,.,,

49 USC app. 2715

later than 18 months after the date I of the enactment of this title, the Secretary shall transmit to Congress an interim report on the results of the demonstration project conducted under subsection (a), together with any rec-i ommendations on whether or not to extend the duration of such ! demonstration project and whether or not to expand the scope r of such project. (2) FINAL REPORT.—Not later than 60 days after completion of the demonstration project conducted under subsection (a), the Secretary shall transmit to Congress a final report on the results of such project, together with any such recommendations. i,, SEC. 12017. LIMITATION ON STATUTORY CONSTRUCTION. Nothing in this title shall be construed to diminish, limit, or otherwise affect the authority of the Secretary to regulate commercial motor vehicle safety involving motor vehicles with a gross vehicle weight rating of less than 26,001 pounds or such lesser gross vehicle weight rating as determined appropriate by the Secretary under section 12019(6)(A) of this Act. is-P. SEC. 12018. REGULATIONS.

(a) AUTHORITY To ISSUE.—The Secretary may issue such regulations as may be necessary to carry out this title. (b) COMPLIANCE WITH TITLE 5.—All regulations under this title shall be issued in accordance with section 553 of title 5, United States Code (without regard to sections 556 and 557 of such title). 49 USC app.

SEC. 12019. DEFINITIONS.

971 fi

,.,-, "•"';*

For purposes of this title— (1) ALCOHOL.—The term "alcohol" has the meaning the term alcoholic beverage has under section 158(c) of title 23, United States Code. (2) DRIVER'S LICENSE.—The term "driver's license" means a £ license issued by a State to an individual which authorizes the "i individual to operate a motor vehicle on highways. aw;.„. (3) COMMERCE.—The term "commerce" means— ^v

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 PUBLIC LAW 99-570—OCT. 27, 1986

100 STAT. 3207-188

(A) trade, traffic, and transportation within the jurisdiction of the United States between a place in a State and a place outside of such State (including a place outside the United States); and (B) trade, traffic, and transportation in the United States which affects any trade, traffic, and transportation deqq- ^J&y„ *; scribed in subparagraph (A). '"* ' (4) COMMERCIAL DRIVER'S LICENSE.—The term "commercial driver's license" means a license issued by a State to an individual which authorizes the individual to operate a class of commercial motor vehicle. (5) MOTOR VEHICLE.—The term "motor vehicle" means a vehicle, machine, tractor, trailer, or semitrailer propelled or drawn by mechanical power used and on highways, except that such term does not include a vehicle, machine, tractor, trailer, semitrailer operated exclusively on a rail. (6) COMMERCIAL MOTOR VEHICLE.—The term "commercial motor vehicle" means a motor vehicle used in commerce to transport passengers or property— (A) if the vehicle has a gross vehicle weight rating of 26,001 or more pounds or such a lesser gross vehicle weight rating as the Secretary determines appropriate by regulation but not less than a gross vehicle weight rating of 10,001 pounds; (B) if the vehicle is designed to transport more than 15 passengers, including the driver; or (C) if such vehicle is used in the transportation of materials found by the Secretary to be hazardous for the purposes of the Hazardous Materials Transportation Act. 49 USC app. 1801 A motor vehicle which is used in the transportation of hazard- note. ous materials and which has a gross vehicle weight rating of less than 26,001 pounds (or such gross vehicle weight rating as determined appropriate by the Secretary under subparagraph (A)) shall not be included as a commercial motor vehicle pursuant to subparagraph (C) if such hazardous material is listed as hazardous pursuant to section 306(a) of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9656(a)) and is not otherwise regulated by the Department of Transportation or if such hazardous material is a consumer commodity or limited quantity hazardous material as defined under section 171.8 of title 49 of the Code of Federal Regulations. The Secretary may waive the application of the preceding sentence to any motor vehicle or class of motor vehicles if the Secretary determines that such waiver is in the interest of safety. (7) CONTROLLED SUBSTANCE.—The term "controlled substance" has the meaning such term has under section 102 of the Controlled Substances Act (21 U.S.C. 802). (8) EMPLOYEE.—The term "employee" means an operator of a commercial motor vehicle (including an independent contractor while in the course of operating a commercial motor vehicle) who is employed by an employer. (9) EMPLOYER.—The term "employer" means any person (including the United States, a State, or a political subdivision of a State) who owns or leases a commercial motor vehicle or assigns employees to operate such a vehicle.

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 100 STAT. 3207-189

49 USC app. 1802.

PUBLIC LAW 99-570—OCT. 27, 1986

(10) FELONY.—The term "felony" means an offense under State or Federal law that is punishable by death or imprisonment for a term exceeding 1 year. (11) HAZARDOUS MATERIAL.—The term "hazardous material" has the meaning such term has under section 103 of the Hazardous Materials Transportation Act. (12) SERIOUS TRAFFIC VIOLATION.—The term "serious traffic violation" means— (A) excessive speeding, as defined by the Secretary by regulation; (B) reckless driving, as defined under State or local law; (C) a violation of a State or local law relating to motor vehicle traffic control (other than a parking violation) arising in connection with a fatal traffic accident; and (D) any other similar violation of a State or local law relating to motor vehicle traffic control (other than a parkIs £.v ing violation) which the Secretary determines by regulation - * is serious. (13) SECRETARY.—The term "Secretary" means the Secretary of Transportation. (14) STATE.—The term "State" means a State of the United States and the District of Columbia. (15) UNITED STATES.—The term "United States" means the 50 States and the District of Columbia. TITLE XIII—CYANIDE WRONGFUL USE '^ SEC. 13001. STUDY AND REPORT.

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(a) STUDY.—The Administrator of the Environmental Protection Agency shall conduct a study of the manufacturing and distribution process of cyanide with a view to determining methods, procedures, or other actions which might be taken, employed, or otherwise carried out in connection with such manufacturing and distribution in order to safeguard the public from the wrongful use of cyanide. (b) MATTERS TO B E INCLUDED.—Such study shall include, among other matters, the following: (1) a determination of the sources of cyanide, including the name and location of each manufacturer thereof; (2) an evaluation of the means and methods utilized by the manufacturer and others in the distribution of cyanide, including the name and location of each such distributor; (3) an evaluation of the procedures employed in connection with the selling, at the wholesale and retail level, of cysmide, including a determination as to whether or not persons selling cyanide require the intended purchaser to identify himself or herself; (4) a determination as to the extent to which recordkeeping requirements are imposed on, or carried out by, manufacturers of cyanide with respect to the specifications of each lot of cyanide produced by such manufacturer; (5) a determination as to the feasibility and desirability of establishing a central registry of all lot specifications of cyanide for the purpose of providing quick access to investigative and law enforcement agencies;

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 PUBLIC LAW 99-570—OCT. 27, 1986

100 STAT. 3207-190

(6) a consideration and review of all aspects of the matter of interstate versus intrastate to the extent that it involves the manufacturing, distribution, or use of cyanide; ,, (7) a determination as to the feasibility and desirability of requiring manufacturers of cyanide to color all such cyanide with a distinctive color so that the consuming public can more readily identify products laced with cyanide; (8) a determination as to the feasibility and desirability of requiring limited-access storage for cyanide at universities, laboratories, and other institutions that use cyanide for research or other purposes; and (9) a determination as to the feasibility and desirability of issuing regulations to require any person who sells or otherwise transfers, at a retail level, any cyanide to record such sale or transfer, including the identity of the person purchasing or otherwise receiving such cyanide, the address of such person, and the intended use of such cyanide. Such records shall be available for such use, and retained for such period, as the aforementioned Administrator shall by regulation require. (c) REPORT.—On or before the expiration of the 180-day period following the date of the enactment of this section, the Administrator of the Environmental Protection Agency shall report the results of such study to the Congress, together with his or her recommendations with respect thereto. (d) DEFINITIONS.—As used in this section, the term— (1) "person" means any individual, corporation, partnership, or other entity; and (2) "cyanide" means sodium cyanide, potassium cyanide or any other toxic cyanide compound. (e) AUTHORIZATION.—There are authorized to be appropriated such sums as may be necessary to carry out the provisions of this section. TITLE XIV—SENATE POLICY REGARDING FUNDING SEC. 14001. STATEMENT OF POLICY.

(a) The Senate finds that— (1) there is an urgent critical need for funds to carry out the programs and activities authorized by the preceding provisions of this Act in order to ensure a drug free America; (2) this Act is the result of a bipartisan effort to combat our national drug abuse problem; and (3) only the exceptional nature of the drug abuse problem warrants the expenditure of funds in excess of otherwise applicable budget limitations. (b) Therefore, it is the sense of the Senate that— (1) amounts authorized to carry out the preceding provisions of this Act should be provided as new budget authority for fiscal year 1987 in H.J. Res. 738 (99th Congress, 2d Session); and Ante., p. 1783; (2) such amounts should not be provided through transfers post, p. 3341. from, or reductions in, any amount appropriated by such joint resolution for any other program, project, or activity for such fiscal year.

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 100 STAT. 3207-191

PUBLIC LAW 99-570—OCT. 27, 1986

TITLE XV—NATIONAL FOREST SYSTEM DRUG CONTROL

National Forest System Drug Control Act of 1986. 16 USC 559b note.

This title may be cited as the 'National Forest System Drug Control Act of 1986".

16 USC 559b.

SEC. 15002. PURPOSE.

SEC. 15001. SHORT TITLE.

(a) The purpose of this title is to authorize the Secretary of Agriculture (hereinafter in this title referred to as the "Secretary") to take actions necessary, in connection with the administration and use of the National Forest System, to prevent the manufacture, distribution, or dispensing of marijuana and other controlled substances. (b) Nothing in this title shall diminish in any way the law enforcement authority of the Forest Service. (c) As used in this title, the terms "manufacture", "dispense", and "distribute" shall have the same meaning given such terms in section 102 of the Controlled Substances Act (21 U.S.C. 802). 16 USC 559c.

Post, p. 3207-192.

16 USC 559d.

State and local governments.

Post, p. 3207-192.

SEC. 15003. POWERS.

For the purposes of this title, if specifically designated by the Secretary and specially trained, not to exceed 500 officers and employees of the Forest Service when in the performance of their duties shall have authority within the boundaries of the National Forest System to— (1) carry firearms; (2) conduct investigations of violations of and enforce section 401 of Controlled Substances Act (21 U.S.C. 841) and other criminal violations relating to marijuana and other controlled substances that are manufactured, distributed, or dispensed on National Forest System lands; (3) make arrests with a warrant or process for misdemeanor violations, or without a warrant or process for violations of such misdemeanors that any such officer or employee has probable cause to believe are being committed in his presence or view, or for a felony with a warrant or without a warrant if he has probable cause to believe that the person to be arrested has committed or is committing such felony; (4) serve warrants and other process issued by a court or " officer of competent jurisdiction; ^ (5) search with or without warrant or process any person, ^ place, or conveyance according to Federal law or rule of law; and (6) seize with or without warrant or process any evidentiary item according to Federal law or rule of law. SEC. 15004. COOPERATION.

For the purposes of this title, in exercising the authority provided by section 15003— (1) the Forest Service shall cooperate with any other Federal law enforcement agency having primary investigative jurisdiction over the offense committed; and (2) the Secretary may authorize the Forest Service to cooperate with the law enforcement officials of any Federal agency. State, or political subdivision in the investigation of violations of and enforcement of section 401 of the Controlled Substances Act (21 U.S.C. 841), other laws and regulations

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 PUBLIC LAW 99-570—OCT. 27, 1986

100 STAT. 3207-192

' relating to marijuana and other controlled substances, and State drug control laws or ordinances, within the boundaries of the National Forest System. SEC. 1500.5. PENALTY.

Section 401 of the Controlled Substances Act (21 U.S.C. 841) is amended by adding at the end thereof the following subsection: "(e)(1) Any person who assembles, maintains, places, or causes to be placed a boobytrap on Federal property where a controlled substance is being manufactured, distributed, or dispensed shall be sentenced to a term of imprisonment for not more than 10 years and shall be fined not more than $10,000. "(2) If any person commits such a violation after 1 or more prior convictions for an offense punishable under this subsection, such person shall be sentenced to a term of imprisonment of not more than 20 years and shall be fined not more than $20,000. "(3) For the purposes of this subsection, the term 'boobytrap' means any concealed or camouflaged device designed to cause bodily injury when triggered by any action of any unsuspecting person making contact with the device. Such term includes guns, ammunition, or explosive devices attached to trip wires or other triggering mechanisms, sharpened stakes, and lines or wires with hooks attached.". SEC. 15006. AUTHORIZATION OF APPROPRIATIONS.

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,. y j;. < K«.

16 USC 559e.

There is authorized to be appropriated $10,000,000 for each fiscal year to carry out this title. SEC. 15007. APPROVAL OF SECRETARY OF AGRICULTURE AND ATTORNEY GENERAL.

The authorities conferred herein shall be exercised pursuant to an agreement approved by the Secretary of Agriculture and the Attorney General. Approved October 27, 1986.

LEGISLATIVE HISTORY—H.R. 5484 (S. 1903): SENATE REPORTS: No. 99-411 accompanying S. 1903 (Comm. on Commerce, Science, and Transportation). CONGRESSIONAL RECORD, Vol. 132 (1986): Sept. 10, 11, considered and passed House. Sept. 26, 27, 30, considered and pased Senate, amended. Oct. 8, House concurred in Senate amendments with an amendment. Oct. 10, 14, 15, Senate concurred in House amendments with amendments. Oct. 17, House concurred in Senate amendments with an amendment; Senate concurred in House amendment. WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 22 (1986): Oct. 27, Presidential statement and remarks.

16 USC 559f.

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 100 STAT. 3208

PUBLIC LAW 99-571—OCT. 28, 1986

Public Law 99-571 99th Congress An Act Oct. 28, 1986 [H.R. 2032] Government Securities Act of 1986. 15 USC 78a note. 15 USC 78o-5 note.

An Act Entitled the Government Securities Act of 1986.

•••'},

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE AND FINDINGS. (a) SHORT TITLE.—This Act may be cited as the "Government

Securities Act of 1986". (b) FINDINGS.—The Congress finds that transactions in government securities are affected with a public interest which makes it necessary— (1) to provide for the integrity, stabiHty, and efficiency of such transactions and of matters and practices related thereto; (2) to impose adequate regulation of government securities brokers and government securities dealers generally; and (3) to require appropriate financial responsibility, recordkeeping, reporting, and related regulatory requirements; in order to protect investors and to insure the maintenance of fair, honest, and liquid markets in such securities. TITLE I—GOVERNMENT SECURITIES BROKERS AND DEALERS .1

'

SEC. 101. ESTABLISHMENT OF GOVERNMENT SECURITIES REGULATORY AUTHORITY. 15 USC 78a.

The Securities Exchange Act of 1934 (hereinafter in this title referred to as "the Act") is amended by inserting after section 15B (15 U.S.C. 78o-4) the following new section: "GOVERNMENT SECURITIES BROKERS AND DEALERS

Mail. eommerce and trade. 15 USC 78o-5.

Banks and banking.

"SEC. 15C. (a)(1)(A) It shall be unlawful for any government securities broker or government securities dealer (other than a registered broker or dealer or a financial institution) to make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce or attempt to induce the purchase or sale of, any government security unless such government securities broker or government securities dealer is registered in accordance with paragraph (2) of this subsection. "(B)(i) It shall be unlawful for any government securities broker or government securities dealer that is a registered broker or dealer or a financial institution to make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce or attempt to induce the purchase or sale of, any government security unless such government securities broker or government securities dealer has filed with the appropriate regulatory agency written notice that it is a government securities broker or government securities dealer. When a government securities broker or government securities dealer ceases to act as such it

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Page:United States Statutes at Large Volume 100 Part 4.djvu/473

 PUBLIC LAW 99-571—OCT. 28, 1986

100 STAT. 3209

shall file with the appropriate regulatory agency a written notice that it is no longer acting as a government securities broker or government securities dealer. "(ii) Such notices shall be in such form and contain such information concerning a government securities broker or government securities dealer that is a financial institution and any persons associated with such government securities broker or government securities dealer as the Board of Governors of the Federal Reserve System shall, by rule, after consultation with each appropriate regulatory agency (including the Commission), prescribe as necessary or appropriate in the public interest or for the protection of investors. Such notices shall be in such form and contain such information concerning a government securities broker or government securities dealer that is a registered broker or dealer and any persons associated with such government securities broker or government securities dealer as the Commission shall, by rule, prescribe as necessary or appropriate in the public interest or for the protection of investors. "(iii) Each appropriate regulatory agency (other than the Commission) shall make available to the Commission the notices which have been filed with it under this subparagraph, and the Commission shall maintain and make available to the public such notices and the notices it receives under this subparagraph. "(2) A government securities broker or a government securities dealer subject to the registration requirement of paragraph (1)(A) of this subsection may be registered by filing with the Commission an application for registration in such form and containing such information and documents concerning such government securities broker or government securities dealer and any persons associated with such government securities broker or government securities dealer as the Commission, by rule, may prescribe as necessary or appropriate in the public interest or for the protection of investors. Within 45 days of the date of filing of such application (or within such longer period as to which the applicant consents), the Commission shall— "(i) by order grant registration, or "(ii) institute proceedings to determine whether registration should be denied. Such proceedings shall include notice of the grounds for denial under consideration and opportunity for hearing and shall be concluded within 120 days of the date of the filing of the application for registration. At the conclusion of such proceedings, the Commission, by order, shall grant or deny such registration. The Commission may extend the time for the conclusion of such proceedings for up to 90 days if it finds good cause for such extension and publishes its reasons for so finding or for such longer period as to which the applicant consents. The Commission shall grant the registration of a government securities broker or a government securities dealer if the Commission finds that the requirements of this section are satisfied. The Commission shall deny such registration if it does not make such a finding or if it finds that if the applicant were so registered, its registration would be subject to suspension or revocation under subsection (c) of this section. "(3) Any provision of this title (other than section 5 or paragraph (1) of this subsection) which prohibits any act, practice, or course of business if the mails or any means or instrumentality of interstate commerce is used in connection therewith shall also prohibit any

Regulations.

Public information.

Regulations.

Mail. Commerce and trade.

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Page:United States Statutes at Large Volume 100 Part 4.djvu/474

 100 STAT. 3210

Regulations.

Reports. Records.

Records.

Fraud.

Discrimination, prohibition.

t)0« oc

PUBLIC LAW 99-571—OCT. 28, 1986

such act, practice, or course of business by any government securities broker or government securities dealer registered or having filed notice under paragraph (1) of this subsection or any person acting on behalf of such government securities broker or government securities dealer, irrespective of any use of the mails or any means or instrumentality of interstate commerce in connection therewith. "(4) The Secretary of the Treasury (hereinafter in this section referred to as the 'Secretary'), by rule or order, upon the Secretary's own motion or upon application, may conditionally or unconditionally exempt any government securities broker or government securities dealer, or class of government securities brokers or government securities dealers, from any provision of subsection (a), (b), or (d) of this section or the rules thereunder, if the Secretary finds that such exemption is consistent with the public interest, the protection of investors, and the purposes of this title. "(b)(1) The Secretary shall propose and adopt rules to effect the purposes of this title with respect to transactions in government securities effected by government securities brokers and government securities dealers as follows: "(A) Such rules shall provide safeguards with respect to the financial responsibility and related practices of government securities brokers and government securities dealers including, but not limited to, capital adequacy standards, the acceptance of custody and use of customers' securities, the carrying and use of customers' deposits or credit balances, and the transfer and control of government securities subject to repurchase agreements and in similar transactions. "(B) Such rules shall require every government securities broker and government securities dealer to make reports to and furnish copies of records to the appropriate regulatory agency, and to file with the appropriate regulatory agency, annually or more frequently, a balance sheet and income statement certified by an independent public accountant, prepared on a calendar or fiscal year basis, and such other financial statements (which shall, as the Secretary specifies, be certified) and information concerning its financial condition as required by such rules. "(C) Such rules shall require records to be made and kept by government securities brokers and government securities dealers and shall specify the periods for which such records shall be preserved. "(2) Rules promulgated and orders issued under this section shall— "(A) be designed to prevent fraudulent and manipulative acts and practices and to protect the integrity, liquidity, and efficiency of the market for government securities, investors, and the public interest; and "(B) not be designed to permit unfair discrimination between customers, issuers, government securities brokers, or government securities dealers, or to impose any burden on competition not necessary or appropriate in furtherance of the purposes of this title. "(3) In promulgating rules and issuing orders under this section, the Secretary— "(A) may appropriately classify government securities brokers and government securities dealers (taking into account relevant matters, including types of business done, nature of securities

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 PUBLIC LAW 99-571—OCT. 28, 1986

100 STAT. 3211

other than government securities purchased or sold, and character of business organization) and persons associated with government securities brokers and government securities dealers; "(B) may determine, to the extent consistent with paragraph (2) of this subsection and with the public interest, the protection of investors, and the purposes of this title, not to apply, in whole or in part, certain rules under this section, or to apply greater, lesser, or different standards, to certain classes of government securities brokers, government securities dealers, or persons associated with government securities brokers or government securities dealers; "(C) shall consider the sufficiency and appropriateness of then existing laws and rules applicable to government securities brokers, government securities dealers, and persons associated with government securities brokers and government securities dealers; and "(D) shall consult with and consider the views of the Commission and the Board of Governors of the Federal Reserve System, except where the Secretary determines that an emergency exists requiring expeditious or summary action and publishes its reasons for such determination. "(4) If the Commission or the Board of Governors of the Federal Reserve System comments in writing on a proposed rule of the Secretary that has been published for comment, the Secretary shall respond in writing to such written comment before approving the proposed rule. "(5) No government securities broker or government securities dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce or attempt to induce the purchase or sale of, any government security in contravention of any rule under this section. "(c)(1) With respect to any government securities broker or government securities dealer registered or required to register under subsection (a)(1)(A) of this section— "(A) The Commission, by order, shall censure, place limitations on the activities, functions, or operations of, suspend for a period not exceeding 12 months, or revoke the registration of such government securities broker or government securities dealer, if it finds, on the record after notice and opportunity for hearing, that such censure, placing of limitations, suspension, or revocation is in the public interest and that such government securities broker or government securities dealer, or any person associated with such government securities broker or government securities dealer (whether prior or subsequent to becoming so associated), has committed or omitted any act or omission enumerated in subparagraph (A), (D), or (E) of paragraph (4) of section 15(b) of this title, has been convicted of any offense specified in subparagraph (B) of such paragraph (4) within 10 years of the commencement of the proceedings under this paragraph, or is enjoined from any action, conduct, or practice specified in subparagraph (C) of such paragraph (4). "(B) Pending final determination whether registration of any government securities broker or government securities dealer shall be revoked, the Commission, by order, may suspend such registration, if such suspension appears to the Commission, after notice and opportunity for hearing, to be necessary or

Mail. £°™™^^^^ ^^^ trade.
 * ?»:j;j

15 USC Y8o.

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Page:United States Statutes at Large Volume 100 Part 4.djvu/476

 100 STAT. 3212

15 USC 78o. ^. ^ ^

'^ ' '

PUBLIC LAW 99-571—OCT. 28, 1986

appropriate in the public interest or for the protection of investors. Any registered government securities broker or registered government securities dealer may, upon such terms and conditions as the Commission may deem necessary in the public interest or for the protection of investors, withdraw from registration by filing a written notice of withdrawal with the Commission. If the Commission finds that any registered government securities broker or registered government securities dealer is no longer in existence or has ceased to do business as a government securities broker or government securities dealer, the Commission, by order, shall cancel the registration of such government securities broker or government securities dealer. "(C) The Commission, by order, shall censure or place limitations on the activities or functions of any person associated, or seeking to become associated, with a government securities broker or government securities dealer registered or required to register under subsection (a)(1)(A) of this section or suspend for a period not exceeding 12 months or bar any such person from being associated with such a government securities broker or government securities dealer, if the Commission finds, on the record after notice and opportunity for hearing, that such censure, placing of limitations, suspension, or bar is in the public interest and that such person has committed or omitted any act or omission enumerated in subparagraph (A), (D), or (E) of paragraph (4) of section 15(b) of this title, has been convicted of any offense specified in subparagraph (B) of such paragraph (4) within 10 years of the commencement of the proceedings under this paragraph, or is enjoined from any action, conduct, or practice specified in subparagraph (C) of such paragraph (4). "(2)(A) With respect to any government securities broker or government securities dealer which is not registered or required to register under subsection (a)(l)(A) of this section, the appropriate regulatory agency for such government securities broker or government securities dealer may, in the manner and for the reasons specified in paragraph (1)(A) of this subsection, censure, place limitations on the activities, functions, or operations of, suspend for a period not exceeding 12 months, or bar from acting as a government securities broker or government securities dealer any such government securities broker or government securities dealer, and may sanction any person associated with such government securities broker or government securities dealer in the manner and for the reasons specified in paragraph (1)(C) of this subsection. "(B) In addition, where applicable, such appropriate regulatory agency may, in accordance with section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818), section 5 of the Home Owners' Loan Act of 1933 (12 U.S.C. 1464), or section 407 of the National Housing Act (12 U.S.C. 1730), enforce compliance by such government securities broker or government securities dealer or any person associated with such government securities broker or government securities dealer with the provisions of this section and the rules thereunder. "(C) For purposes of subparagraph (B) of this paragraph, any violation of any such provision shall constitute adequate basis for the issuance of any order under section 80t)) or 8(c) of the Federal Deposit Insurance Act, section 5(d)(2) or 5(d)(3) of the Home Owners' Loan Act of 1933, or section 407(e) or 407(f) of the National Housing Act, and the customers of any such government securities broker or

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Page:United States Statutes at Large Volume 100 Part 4.djvu/477

 PUBLIC LAW 99-571—OCT. 28, 1986

100 STAT. 3213

government securities dealer shall be deemed, respectively, 'depositors' as that term is used in section 8(c) of the Federal Deposit Insurance Act, 'savings account holders' as that term is used in section 5(d)(3) of the Home Owners' Loan Act of 1933, or 'insured members' as that term is used in section 407(f) of the National Housing Act. "(D) Nothing in this paragraph shall be construed to affect in any way the powers of such appropriate regulatory agency to proceed against such government securities broker or government securities dealer under any other provision of law. "(E) Each appropriate regulatory agency (other than the Commission) shall promptly notify the Commission after it has imposed any sanction under this paragraph on a government securities broker or government securities dealer, or a person associated with a government securities broker or government securities dealer, and the Commission shall maintain, and make available to the public, a record of such sanctions and any sanctions imposed by it under this subsection. "(3) It shall be unlawful for any person as to whom an order entered pursuant to paragraph (1) or (2) of this subsection suspending or barring him from being associated with a government securities broker or government securities dealer is in effect willfully to become, or to be, associated with a government securities broker or government securities dealer without the consent of the appropriate regulatory agency, and it shall be unlawful for any government securities broker or government securities dealer to permit such a person to become, or remain, a person associated with it without the consent of the appropriate regulatory agency, if such government securities broker or government securities dealer knew, or, in the exercise of reasonable care should have known, of such order. "(d)(1) All records of a government securities broker or government securities dealer are subject at any time, or from time to time, to such reasonable periodic, special, or other examinations by representatives of the appropriate regulatory agency for such government securities broker or government securities dealer as such appropriate regulatory agency deems necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of this title. "(2) Information received by any appropriate regulatory agency or the Secretary from or with respect to any government securities broker or government securities dealer or with respect to any person associated therewith may be made available by the Secretary or the recipient agency to the Commission, the Secretary, any appropriate regulatory agency, and any self-regulatory organization. '(e)(1) It shall be unlawful for any government securities broker or government securities dealer registered or required to register with the Commission under subsection (a)(1)(A) to effect any transaction in, or induce or attempt to induce the purchase or sale of, any government security, unless such government securities broker or government securities dealer is a member of a national securities exchange registered under section 6 of this title or a securities association registered under section 15A of this title. "(2) The Commission, after consultation with the Secretary, by rule or order, as it deems consistent with the public interest and the protection of investors, may conditionally or unconditionally exempt from paragraph (1) of this subsection any government securities broker or government securities dealer or class of government

12 USC 1818. 12 USC 1464. 12 USC 1730.

Public information. Records.

Law enforcement and crime.

15 USC 78f. 15 USC 78o-3.

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Page:United States Statutes at Large Volume 100 Part 4.djvu/478

 100 STAT. 3214

PUBLIC LAW 99-571—OCT. 28, 1986

securities brokers or government securities dealers specified in such rule or order. rrj!', "(0(1) Nothing in this section except paragraph (2) of this subsec,j, tion shall be construed to impair or limit the authority under any other provision of law of the Commission, the Secretary of the, vt •jh-.J::.- Treasury, the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Federal Home Loan Bank Board, the Federal Savings and Loan Insurance Corporation, the Secretary of Housing and Urban Development, and the Government National Mortgage ^,;'. Association. ,,. ]•'-' "(2) Notwithstanding any other provision of this title, the Commis-•> • sion shall not have any authority to make investigations of, require the filing of a statement by, or take any other action under this title against a government securities broker or government securities dealer, or any person associated with a government securities broker or government securities dealer, for any violation or threatened violation of the provisions of this section or the rules or regulations thereunder, unless the Commission is the appropriate regulatory agency for such government securities broker or government securities dealer. Nothing in the preceding sentence shall be construed to limit the authority of the Commission with respect to violations or threatened violations of any provision of this title other than this section, or the rules or regulations under any such other provision. Termination "(g)(1) The authority of the Secretary to issue orders and to date. propose and adopt rules under this section shall terminate on October 1, 1991. "(2) All orders and rules— "(A) which have been issued or adopted by the Secretary, and "(B) which are in effect on the date specified in paragraph (1), shall continue in effect according to their terms.". SEC. 102. CONFORMING AMENDMENTS.

I,

i,,, r1 '.;fV.

(a) DEFINITION OF EXEMPTED SECURITY.—Paragraph (12) of section 3(a) of the Act (15 U.S.C. 78c(a)(12)) is amended to read as follows: "(12)(A) The term 'exempted security' or 'exempted securities' includes— "(i) government securities, as defined in paragraph (42) of this subsection; "(ii) municipal securities, as defined in paragraph (29) of this subsection;, "(iii) any interest or participation in any common trust fund or similar fund maintained by a bank exclusively for the collective investment and reinvestment of assets contributed thereto by such bank in its capacity as trustee, executor, administrator, or guardian; "(iv) any interest or participation in a single trust fund, or a collective trust fund maintained by a bank, or any security arising out of a contract issued by an insurance t.;.* company, which interest, participation, or security is issued in connection with a qualified plan as defined in subparagraph (C) of this paragraph; and "(v) such other securities (which may include, among others, unregistered securities, the market in which is predominantly intrastate) as the Commission may, by such ,,.., rules and regulations as it deems consistent with the public

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Page:United States Statutes at Large Volume 100 Part 4.djvu/479

 PUBLIC LAW 99-571—OCT. 28, 1986

f 1 s d

'

'''

, ^

^.

100 STAT. 3215

interest and the protection of investors, either unconditionally or upon specified terms and conditions or for stated periods, exempt from the operation of any one or more provisions of this title which by their terms do not apply to an 'exempted security' or to 'exempted securities'. "(B)(i) Notwithstanding subparagraph (A)(i) of this paragraph, government securities shall not be deemed to be 'exempted securities' for the purposes of section 17A of this title. "(ii) Notwithstanding subparagraph (A)(ii) of this paragraph, municipal securities shall not be deemed to be 'exempted securities' for the purposes of sections 15, 15A (other than subsection (g)(3)), and 17 A of this title. "(C) For purposes of subparagraph (A)(iv) of this paragraph, the term 'qualified plan' means (i) a stock bonus, pension, or profit-sharing plan which meets the requirements for qualification under section 401 of the Internal Revenue Code of 1954, (ii) an annuity plan which meets the requirements for the deduction of the employer's contribution under section 404(a)(2) of such Code, or (iii) a governmental plan as defined in section 414(d) of such Code which has been established by an employer for the exclusive benefit of its employees or their beneficiaries for the purpose of distributing to such employees or their beneficiaries the corpus and income of the funds accumulated under such plan, if under such plan it is impossible, prior to the satisfaction of all liabilities with respect to such employees and their beneficiaries, for any part of the corpus or income to be used for, or diverted to, purposes other than the exclusive benefit of such employees or their beneficiaries, other than any plan described in clause (i), (ii), or (iii) of this subparagraph which (I) covers employees some or all of whom are employees within the meaning of section 401(c) of such Code, or (II) is a plan funded by an annuity contract described in section 403(b) of such Code.". (b) DEFINITION OF APPROPRIATE REGULATORY AGENCY.—Section

15 USC 78q-i.

5 USC 78o, 78o-3, 78q-i. 26 USC 401. 26 USC 404. 26 USC 414.

26 USC 401. 15 USC 78c.

3(a)(34) of the Act is amended— ^ (1) by inserting after paragraph (F) thereof the following new paragraph: "(G) When used with respect to a government securities J broker or government securities dealer, or person associated with a government securities broker or government securities dealer: "(i) the Comptroller of the Currency, in the case of a national bank, a bank in the District of Columbia examined by the Comptroller of the Currency, or a Federal branch or Federal agency of a foreign bank (as such terms are used in the International Banking Act of 1978); 12 USC 3ioi "(ii) the Board of Governors of the Federal Reserve note. ,;5 30 System, in the case of a State member bank of the Federal ,.^ Reserve System, a foreign bank, a State branch or a State agency of a foreign bank, or a commercial lending company owned or controlled by a foreign bank (as such terms are .,.-^i -^ used in the International Banking Act of 1978); "(iii) the Federal Deposit Insurance Corporation, in the il., case of a bank insured by the Federal Deposit Insurance .vf-' Corporation (other than a member of the Federal Reserve System or a Federal savings bank);
 * - . ii\

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Page:United States Statutes at Large Volume 100 Part 4.djvu/480

 100 STAT. 3216

PUBLIC LAW 99-571—OCT. 28, 1986

"(iv) the Federal Home Loan Bank Board, in the case of a Federal savings and loan association. Federal savings bank, or District of Columbia savings and loan association; ''•> "(v) the Federal Savings and Loan Insurance Corporation, in the case of an institution insured by the Federal Savings " and Loan Insurance Corporation (other than a Federal I* •! savings and loan association. Federal savings bank, or Dis. i yo; I 3 f trict of Columbia savings and loan association); "(vi) the Commission, in the case of all other government securities brokers and government securities dealers."; and it?i J (2) by inserting ", and the term 'District of Columbia savings ""' •" and loan association' means any association subject to examination and supervision by the Federal Home Loan Bank Board 12 USC 1466a. under section 8 of the Home Owners' Loan Act of 1933" before the period ending the last sentence thereof. (c) DEFINITION OF STATUTORY DISQUALIFICATION.—Section 3(a)(39) of such Act (15 U.S.C. 78c(a)(39)) is amended— t' jT f (1) in subparagraph (B)— (A) by inserting "or other appropriate regulatory agency" after "Commission"; and (B) by striking out "or municipal securities dealer" and 1, inserting in lieu thereof "municipal securities dealer, '- *; government securities broker, or government securities dealer"; and (2) in subparagraph (C)— (A) by striking out "or municipal securities dealer" and inserting in lieu thereof "municipal securities dealer, government securities broker, or government securities dealer"; and (B) by inserting ", an appropriate regulatory agency," i..h",% > ', after "Commission". (d) ADDITIONAL DEFINITIONS.—Section 3(a) of such Act (15 U.S.C. 78c(a)) is further amended by adding at the end thereof the following ^^ ^,.;, new paragraphs: "(42) The term 'government securities' means— ,j.,,^^. "(A) securities which are direct obligations of, or obligations guaranteed as to principal or interest by, the United <c,.-^i*''-"' • States; "(B) securities which are issued or guaranteed by corporations in which the United States has a direct or indirect interest and which are designated by the Secretary of the Treasury for exemption as necessary or appropriate in the f public interest or for the protection of investors; "(C) securities issued or guaranteed as to principal or _•. ^ interest by any corporation the securities of which are iji *5«<. ' designated, by statute specifically naming such corporation, .: to constitute exempt securities within the meaning of the laws administered by the Commission; or Ante, p. 3208; 15 "(D) for purposes of sections 15C and 17A, any put, call, USC 76q-i. straddle, option, or privilege on a security described in subparagraph (A), (B), or (C) other than a put, call, straddle, option, or privilege— "(i) that is traded on one or more national securities 'Mil Hi • exchanges; or "(ii) for which quotations are disseminated through an automated quotation system operated by a registered securities association. - * ' . W...V

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Page:United States Statutes at Large Volume 100 Part 4.djvu/481

 PUBLIC LAW 99-571—OCT. 28, 1986

100 STAT. 3217

"(43) The term 'government securities broker' means any person regularly engaged in the business of effecting transactions in government securities for the account of others, but does not include— "(A) any corporation the securities of which are govern.., ^ ment securities under subparagraph (B) or (C) of paragraph (42) of this subsection; or, j^,, "(B) any person registered with the Commodity Futures Trading Commission, any contract market designated by the Commodity Futures Trading Commission, such contract market's affiliated clearing organization, or any floor trader on such contract market, solely because such person effects transactions in government securities that the Commission, after consultation with the Commodity Futures Trading Commission, has determined by rule or order to be incidental to such person's futures-related business. "(44) The term 'government securities dealer' means any person engaged in the business of buying and selling government securities for his own account, through a broker or otherwise, but does not include— "(A) any person insofar as he buys or sells such securities for his own account, either individually or in some fiduciary capacity, but not as a part of a regular business; '(B) any corporation the securities of which are government securities under subparagraph (B) or (C) of paragraph (42) of this subsection; "(C) any bank, unless the bank is engaged in the business of buying and selling government securities for its own account other than in a fiduciary capacity, through a broker or otherwise; or "(D) any person registered with the Commodity Futures Trading Commission, any contract market designated by the Commodity Futures Trading Commission, such contract ' market's affiliated clearing organization, or any floor trader on such contract market, solely because such person effects transactions in government securities that the Commission, after consultation with the Commodity Futures Trading Commission, has determined by rule or order to be incidental to such person's futures-related business. "(45) The term 'person associated with a government securities broker or government securities dealer' means any partner, officer, director, or branch manager of such government securities broker or government securities dealer (or any person occupying a similar status or performing similar functions), and any other employee of such government securities broker or government securities dealer who is engaged in the management, direction, supervision, or performance of any activities relating to government securities, and any person directly or indirectly controlling, controlled by, or under common control with such government securities broker or government securities dealer. "(46) The term 'financial institution' means (A) a bank (as such term is defined in paragraph (6) of this subsection), (B) a foreign bank, and (C) an insured institution (as such term is defined in section 401 of the National Housing Act). 12 USC 1724. "(48) The term 'registered broker or dealer means a broker or dealer registered or required to register pursuant to section 15
 * n

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Page:United States Statutes at Large Volume 100 Part 4.djvu/482

 100 STAT. 3218 78 ^f ^ ^^°' 15°USC 78f 78o-3. ' Ante, p. 3208. 15 USC 78o.

PUBLIC LAW 99-571—OCT. 28, 1986

°^ "^^^ °^ ^^^^ title, except that in paragraph (3) of this subsec^^^^ ^^^ sections 6 and 15A the term means such a broker or (e) ENFORCEMENT AND DISCIPLINE.—Section 15(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(b)) is amended— (1) in paragraph (4)(A), by inserting "or with any other appropriate regulatory agency" after "Commission" the first time it appears therein; (2) in paragraph (4)(B), by inserting in clause (ii) thereof "government securities broker, government securities dealer," after "municipal securities dealer,"; (3) in paragraph (4)(C), by striking out "or municipal securities dealer," and inserting in lieu thereof "municipal securities dealer, government securities broker, or government securities dealer,"; and (4) in paragraph (8)— (A) by striking out "any broker or dealer required to n;? i h o. register pursuant to this title" and inserting in lieu thereof "any registered broker or dealer"; and (B) by striking out "an exempted security". (f) NET CAPITAL.—Section 15(c)(3) of such Act (15 U.S.C. 78o(c)(3)) is amended— (1) by inserting "(other than a government securities broker - ...J or government securities dealer, except a registered broker or dealer)" after "dealer"; and (2) by inserting "(except a government security)" after "exempted security". (g) REGISTERED SECURITIES ASSOCIATIONS.—(1) Section 15A(f) of the
 * dealer and a government securities broker or government securities dealer registered or required to register pursuant to section 15C(a)(l)(A) of this title.".

J-'; > i i

Securities Exchange Act of 1934 (15 U.S.C. 78o-3(f)) is amended to read as follows: "(f)(1) Except as provided in paragraph (2) of this subsection, nothing in this section shall be construed to apply with respect to any transaction by a registered broker or dealer in any exempted security. "(2) A registered securities association may adopt and implement rules applicable to members of such association (A) to enforce compliance by registered brokers and dealers with applicable provisions of this title and the rules and regulations thereunder, (B) to provide that its members and persons associated with its members shall be appropriately disciplined, in accordance with subsections (b)(7), (b)(8), and (h) of this section, for violation of applicable provisions of this title and the rules and regulations thereunder, (C) to provide for reasonable inspection and examination of the books and records of registered brokers and dealers, (D) to provide for the matters described in paragraphs (b)(3), (b)(4), and (b)(5) of this section, (E) to implement the provisions of subsection (g) of this section, and (F) to prohibit fraudulent, misleading, deceptive, and false advertising. "(3) Nothing in subsection (b)(6) or (b)(ll) of this section shall be construed to permit a registered securities association to make rules concerning any transaction by a registered broker or dealer in a municipal security.". (2) Section 15A(g) of such Act (15 U.S.C. 78o-3(g)) is amended— (A) by inserting after paragraph (3)(C) the following:

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Page:United States Statutes at Large Volume 100 Part 4.djvu/483

 PUBLIC LAW 99-571—OCT. 28, 1986

100 STAT. 3219

"(D) Nothing in subparagraph (A), (B), or (C) of this paragraph shall be construed to permit a registered securities association to deny membership to or condition the membership of, or bar any person from becoming associated with or condition the association of any person with, a broker or dealer that engages exclusively in transactions in exempted securities."; (B) by redesignating paragraph (4) as paragraph (5); and (C) by inserting after paragraph (3) the following new '^"' paragraph: "(4)(A) A registered securities association may deny membership to, or condition the membership of, a government securities broker or government securities dealer if such government securities broker or government securities dealer (i) does not meet standards of financial responsibility under rules adopted pursuant to section 15C(b)(l)(A) of this title, or (ii) has engaged and there is a reasonable likelihood that it will again engage in any conduct or practice which would subject such government securities broker or government securities dealer to sanctions under section 15C(c) of this title. A registered securities association may establish procedures including examination of the books and records of government securities brokers and government securities dealers to verify compliance with the provisions of this title and the rules thereunder. "(B) A registered securities association may bar any person from becoming associated with a member or condition the association of a person with a member (i) if such person has engaged in any conduct or practice and there is a reasonable likelihood that such person will again engage in any conduct or practice which would subject such person to sanctions under section 15C(c) of this title, or (ii) if such person does not agree to supply such association with such information with respect to its relationship and dealings with the member as may be specified in the rules of the association and to permit examination of its books and records to verify the accuracy thereof.".

Ante, p. 3208.

•

- '-^^

(h) FILING OF AND ACCESS TO DOCUMENTS.—Section 17(c) of the Act

(15 U.S.C. 78q(c)) is amended by adding at the end thereof the following new paragraph: "(4) The Commission or the appropriate regulatory agency may specify that documents required to be filed pursuant to this subsection with the Commission or such agency, respectively, may be retained by the originating clearing agency, transfer agent, or municipal securities dealer, or filed with another appropriate regulatory agency. The Commission or the appropriate regulatory agency (as the case may be) making such a specification shall continue to have access to the document on request.". (i) LOST AND STOLEN SECURITIES.—Section 17(f) of the Securities Exchange Act of 1934 (15 U.S.C. 78q(f)) is amended— (1) in paragraph (1) by inserting "government securities broker, government securities dealer," after "municipal securities dealer,"; ^" (2) in paragraph (1)(A), by inserting "and, in the case of government securities, to the Secretary of the Treasury" after "Commission" the second time it appears; and (3) in paragraph (3)— (A) by inserting "(A)" after "(3)"; and (B) by adding the following new subparagraph: "(B) In order to carry out the authority under paragraph (1) of this subsection, the Commission or its designee and the Secretary of the

Contracts.

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Page:United States Statutes at Large Volume 100 Part 4.djvu/484

 100 STAT. 3220

PUBLIC LAW 99-571—OCT. 28, 1986

Treasury shall enter into an agreement whereby the Commission or its designee will receive, store, and disseminate information in the possession, and which comes into the possession, of the Department of the Treasury in regard to missing, lost, counterfeit, or stolen securities.". (j)

i?^,,,,.iK

BURDEN

ON COMPETITION; PUBLIC

RULEMAKING

REQUIRE-

MENTS.—Section 23(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78w(a)) is amended— (1) by inserting "and the Secretary of the Treasury" after "Commission" each place it appears in paragraph (2); (2) by inserting "or the Secretary's" after "Commission's" in paragraph (2); (3) by inserting "and the Secretary" after "Commission" the first, second, and fourth places it appears in paragraph (3); and (4) by inserting "or the Secretary" after "Commission" the third place it appears in paragraph (3). (k) JUDICIAL REVIEW OF ORDERS AND RULES.—Section 25(d)(1) of

the Act (15 U.S.C. 78y(d)(l)) is amended by inserting before the period at the end thereof the following: "and the Secretary of the Treasury insofar as he is acting pursuant to section 15C of this Ante, p. 3208. Banks and

banking.

7 USC 1.

title". (1) INVESTMENT COMPANIES: DiSQUAUFICATIONS.—Section 9 of the

Investment Company Act of 1940 (15 U.S.C. 80a-9) is amended— (1) by striking out paragraphs (1) and (2) of subsection (a) and inserting in lieu thereof the following: "(1) any person who within 10 years has been convicted of any felony or misdemeanor involving the purchase or sale of any security or arising out of such person s conduct as an underwriter, broker, dealer, investment adviser, municipal securities dealer, government securities broker, government securities dealer, or entity or person required to be registered under the v'x Commodity Exchange Act, or as an affiliated person, salesman, or employee of any investment company, bank, insurance company, or entity or person required to be registered under the Commodity Exchange Act; "(2) any person who, by reason of any misconduct, is permanently or temporarily enjoined by order, judgment, or decree of any court of competent jurisdiction from acting as an underwriter, broker, dealer, investment adviser, municipal securities dealer, government securities broker, government securities dealer, or entity or person required to be registered under the Commodity Exchange Act, or as an affiliated person, salesman, or employee of any investment company, bank, insurance company, or entity or person required to be registered under the ^il Commodity Exchange Act, or from engaging in or continuing any conduct or practice in connection with any such activity or in connection with the purchase or sale of any security; or"; (2) by inserting "or of the Commodity Exchange Act," after "this title," in subsection (b)(2); and ". (3) by inserting "or of the Commodity Exchange Act," after "this title," in subsection (b)(3). (m) INVESTMENT ADVISERS: DISQUALIFICATIONS.—Section 203 of the

c:;.'0

Investment Advisers Act of 1940 (15 U.S.C. 80b-3) is amended— (1) by striking out "or fiduciary" in subsection (e)(2)(B) and inserting in lieu thereof "government securities broker, govern^i'' ment securities dealer, fiduciary, or entity or person required to i t be registered under the Commodity Exchange Act"; .„^e.«.

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Page:United States Statutes at Large Volume 100 Part 4.djvu/485

 PUBLIC LAW 99-571—OCT. 28, 1986

100 STAT. 3221

(2) by striking out paragraph (3) of subsection (e) and inserting in lieu thereof the following: "(3) is permanently or temporarily enjoined by order, judgment, or decree of any court of competent jurisdiction from acting as an investment adviser, underwriter, broker, dealer, municipal securities dealer, government securities broker, government securities dealer, or entity or person required to be registered under the Commodity Exchange Act, or as an affili- 7 USC 1. ated person or employee of any investment company, bank, insurance company, or entity or person required to be registered under the Commodity Exchange Act, or from engaging in or continuing any conduct or practice in connection with any such activity, or in connection with the purchase or sale of any security."; and (3) by inserting "the Commodity Exchange Act," after "this title," in paragraph (4) of subsection (e). SEC. 103. STUDIES AND RECOMMENDATIONS WITH RESPECT TO EXTENSION OF TREASURY AUTHORITY. (a) TASK FORCE RECOMMENDATION.—The Secretary of the Treas-

ury, together with the Securities and Exchange Commission and the Board of Governors of the Federal Reserve System, shall evaluate the effectiveness of the rules promulgated pursuant to section 15C of the Securities Exchange Act of 1934 in effecting the purposes of such Act, and shall submit to the Congress, not later than October 1, 1990, their recommendation with respect to the extension of the Secretary's authority under such section and such other recommendations as they may consider appropriate.

15 USC 78o-5

note. Ante, p. 3208.

(b) COMPTROLLER GENERAL STUDY AND RECOMMENDATIONS.—The

Comptroller General shall conduct a study of the regulation of government securities brokers and government securities dealers pursuant to section 15C of the Securities Exchange Act of 1934 and the effectiveness of the amendments made by this Act in protecting investors and in effecting the purposes described in section 15C(b)(2), and shall submit to the Congress, not later than March 31, 1990, his recommendations with respect to the extension of the Secretary's authority under such section and such other recommendations as he may consider appropriate. SEC. 104. STUDY OF TRADING SYSTEM FOR GOVERNMENT SECURITIES.

(a) REQUIREMENTS FOR STUDY.—The Comptroller General, in coordination and consultation with the Board of Governors of the Federal Reserve, the Secretary of the Treasury, and the Commission, shall study the nature of the current trading system in the secondary market for government securities, including— (1) the extent and form of availability of bids and asks for government securities transactions on a real time basis; (2) the extent and form of the availability of government securities brokers' services in the secondary market; and (3) whether quotations for government securities and the services of government securities brokers are available on terms which are consistent with the public interest, the protection of investors, and the purposes of this title. 0)) PUBLIC HEARINGS.—In addition to the collection of information through surveys, public document review, interviews, and other information-gathering methods, at least one joint public hearing shall be held during the course of conducting the study.

71-19^ 0 - 89 - 17: QL. 3 PartA

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 100 STAT. 3222

PUBLIC LAW 99-571—OCT. 28, 1986 (c) REPORT AND RECOMMENDATIONS.—The report of the Comptrol-

ler General shall be submitted to the Congress no later than 6 months after the date of enactment of this Act. SEC. 105. SECURITIES AND EXCHANGE COMMISSION LEGISLATION STUDY. Banks and banking. Insurance.

15 USC 77a.

Banks and banking.

Banks and banking.

(a) GENERAL REQUIREMENTS.—The Securities and Exchange Commission is authorized and directed to make a study of the use of the exemption contained in section 3(a)(2) of the Securities Act of 1933 (15 U.S.C. 77c(a)(2)) for securities guaranteed by banks, and of the use of insurance policies to guarantee securities. Such study shall include an analysis of— (1) the impact of the guarantee provision of such section 3(a)(2) on investor protection and the public interest; (2) the impact of the guarantee provision of such section 3(a)(2) on competition between banks and insurance companies and between domestic and foreign guarantors; (3) whether, and under what circumstances, debt securities guaranteed by insurance policies should be exempt from registration under the Securities Act of 1933; (4) an analysis of the impact of such an exemption on investor protection and the public interest; and (5) such other issues as the Commission deems relevant. (b) CONSULTATION.—In conducting the study required by subsection (a), the Commission shall consult with and solicit comment from the Secretary of the Treasury, the Board of Governors of the Federal Reserve System, and other Federal bank regulatory agencies. (c) REPORT.—The Securities and Exchange Commission shall, on or before 6 months after the date of enactment of this Act, submit a report to the Congress containing— (1) the results of its study under this section; (2) the actions it proposes to take on the basis of its study; and (3) recommendations for legislation. A^;

TITLE n—DEPOSITORY INSTITUTIONS

SEC. 201. DEPOSITORY INSTITUTIONS. (a) AMENDMENT TO CHAPTER 31 OF TITLE 31, UNITED STATES

Regulations.

12 USC 12 USC 12 USC 12 USC

1818. 1464. 1730. 1786.

CODE.—Section 3121 of title 31, United States Code, is amended by adding at the end thereof the following: "(h)(1) The Secretary shall prescribe by regulation standards for the safeguarding and use of obligations issued under this chapter, and obligations otherwise issued or guaranteed as to principal or interest by the United States. Such regulations shall apply only to a depository institution that is not a government securities broker or a government securities dealer and that holds such obligations as fiduciary, custodian, or otherwise for the account of a customer and not for its own account. Such regulations shall provide for the adequate segregation of obligations so held, including obligations which are purchased or sold subject to resale or repurchase. "(2) Violation of a regulation prescribed under paragraph (1) shall constitute adequate basis for the issuance of an order under section 5239(a) or (b) of the Revised Statutes (12 U.S.C. 93(a) or (b)), section 8(b) or 8(c) of the Federal Deposit Insurance Act, section 5(d)(2) or 5(d)(3) of the Home Owners' Loan Act of 1933, section 407(e) or 407(f) of the National Housing Act, or section 206(e) or 206(f) of the Federal Credit Union Act. Such an order may be issued with respect to a depository institution by its appropriate regulatory agency and with

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 PUBLIC LAW 99-571—OCT. 28, 1986

100 STAT. 3223

respect to a federally insured credit union by the National Credit Union Administration Board. "(3) Nothing in this subsection shall be construed to affect in any way the powers of such agencies under any other provision of law. "(4) The Secretary shall, prior to adopting regulations under this subsection, determine with respect to each appropriate regulatory agency and the National Credit Union Administration Board, whether its rules and standards adequately meet the purposes of regulations to be promulgated under this subsection, and if the Secretary so determines, shall exempt any depository institution subject to such rules or standards from the regulations promulgated under this subsection. "(5) As used in this subsection— "(A) 'depository institution' has the meaning stated in clauses (i) through (vi) of section 19(b)(1)(A) of the Federal Reserve Act and also includes a foreign bank, an agency or branch of a foreign bank, and a commercial lending company owned or controlled by a foreign bank (as such terms are defined in the International Banking Act of 1978). "(B) 'government securities broker' has the meaning prescribed in section 3(a)(43) of the Securities Exchange Act of 1934. "(C) 'government securities dealer' has the meaning prescribed in section 3(a)(44) of the Securities Exchange Act of 1934. "(D) 'appropriate regulatory agency' has the meaning prescribed in section 3(a)(34)(G) of the Securities Exchange Act of 1934.". (b) AMENDMENTS TO CHAPTER 91 OF TITLE 31, UNITED STATES

- ;

• 12 USC 461.

15 USC 78c.

.

CODE.—Chapter 91 of title 31, United States Code, is amended— (1) by adding at the end thereof the following: "§ 9110. Standards for depository institutions holding securities of a Government-sponsored corporation for customers "(a) The Secretary shall prescribe by regulation standards for the safeguarding and use of obligations that are government securities described in subparagraph (B) or (C) of section 3(a)(42) of the Securities Exchange Act of 1934. Such regulations shall apply only to a depository institution that is not a government securities broker or a government securities dealer and that holds such obligations as fiduciary, custodian, or otherwise for the account of a customer and not for its own account. Such regulations shall provide for the adequate segregation of obligations so held, including obligations which are purchased or sold subject to resale or repurchase. "(b) Violation of a regulation prescribed under subsection (a) shall constitute adequate basis for the issuance of an order under section 5239(a) or (b) of the Revised Statutes (12 U.S.C. 93(a) or (b)), section 8(b) or 8(c) of the Federal Deposit Insurance Act, section 5(d)(2) or 5(d)(3) of the Home Owners' Loan Act of 1933, section 407(e) or 407(f) of the National Housing Act, or section 206(e) or 206(f) of the Federal Credit Union Act. Such an order may be issued with respect to a depository institution by its appropriate regulatory agency and with respect to a federally insured credit union by the National Credit Union Administration. "(c) Nothing in this section shall be construed to affect in any way the powers of such agencies under any other provision of law. "(d) The Secretary shall, prior to adopting regulations under this section, determine with respect to each appropriate regulatory agency and the National Credit Union Administration Board,

Regulations. 31 USC 9110.

12 USC 1818. 12 USC 1464. 12 USC 1730. 12 USC 1786. '

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Page:United States Statutes at Large Volume 100 Part 4.djvu/488

 100 STAT. 3224

12 USC 461. 12 USC 3101 ^ote.

PUBLIC LAW 99-571—OCT. 28, 1986

whether its rules and standards adequately meet the purposes of regulations to be promulgated under this section, and if the Secretary so determines, shall exempt any depository institution subject to such rules or standards from the regulations promulgated under this section. "(e) As used in this subsection— "(1) 'depository institution' has the meaning stated in clauses (i) through (vi) of subparagraph 19(b)(1)(A) of the Federal Reserve Act and also includes a foreign bank, an agency or branch of a foreign bank, and a commercial lending company owned or controlled by a foreign bank (as such terms are defined in the International Banking Act of 1978). "(2) 'government securities broker' has the meaning prescribed in section 3(a)(43) of the Securities Exchange Act of 1934. "(3) 'government securities dealer' has the meaning prescribed in section 3(a)(44) of the Securities Exchange Act of 1934. "(4) 'appropriate regulatory agency' has the meaning prescribed in section 3(a)(34)(G) of the Securities Exchange Act of 1934."; and (2) by adding at the end of the chapter analysis the following: "9110. Standards for depository institutions holding securities of a Governmentsponsored corporation for customers.".

TITLE III—TRANSITIONAL AND SAVINGS PROVISIONS SEC. 301. TRANSITIONAL AND SAVINGS PROVISIONS.

15 USC 78o-5 note. ,:

(a) EFFECT ON PENDING ADMINISTRATIVE PROCEEDINGS.—The provisions of this Act shall not affect any proceedings pending on the effective date of this Act. (b) EFFECT ON PENDING JUDICIAL PROCEEDINGS.—The provisions of this Act shall not affect suits commenced prior to the effective date of this Act, and in all such suits, proceedings shall be had, appeals taken, and judgments rendered in the same manner and effect as if this Act had not been enacted. (c) DISCRETION OF THE FEDERAL RESERVE BANK OF N E W YORK.—

Nothing in this Act shall be construed to limit or impair the discretion or authority of the Federal Reserve Bank of New York to require reports or establish terms and conditions in connection with the Bank's relationship with any government securities broker or government securities dealer, including a primary dealer. (d) JURISDICTION OF THE COMMODITY FUTURES TRADING COMMIS-

7 USC 1.

SION.—Nothing in this Act affects the jurisdiction of the Commodity Futures Trading Commission as set forth in the Commodity Exchange Act over trading of commodity futures contracts and options on such contracts involving government securities. _,.. TITLE IV—EFFECTIVE DATES SEC. 401. GENERAL EFFECTIVE DATES.

15 USC 78o-5 note.

Except as provided in section 402, this Act and the amendments made by this Act shall take effect 270 days after the date of enactment of this Act. SEC. 402. EFFECTIVE DATE AND REQUIREMENTS FOR REGULATIONS.

15 USC 78o-5 note.

Notwithstanding section 401, the Secretary of the Treasury and each appropriate regulatory agency shall, within 120 days after the

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 PUBLIC LAW 99-571—OCT. 28, 1986

100 STAT. 3225

date of enactment of this Act, publish for notice and public comment such regulations as are initially required to implement this Act, which regulations shall become effective as temporary regulations 210 days after the date of enactment of this Act and as final regulations not later than 270 days after the date of enactment of this Act. SEC. 403. REGISTRATION DATE.

No person may continue to act as a government securities broker or government securities dealer after 270 days after the date of enactment of this Act unless such person has been registered or has provided notice to the Commission or the appropriate regulatory agency as required by the amendment made by section 101 of this Act. Approved October 28, 1986.

LEGISLATIVE HISTORY—H.R. 2032 (S. 1416): HOUSE REPORTS: No. 99-258 (Comm. on Energy and Commerce). SENATE REPORTS: No. 99-426 accompanying S. 1416 (Comm. on Banking, Housing, and Urban Affairs). CONGRESSIONAL RECORD: Vol. 131 (1985): Sept. 17, considered and passed House. Vol. 132 (1986): Sept. 16, considered and passed Senate, amended, in lieu of S. 1416. Oct. 6, House concurred in Senate amendments with an amendment. Oct. 9, Senate concurred in House amendment. WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 22 (1986): Oct. 28, Presidential statement.

15 USC 78o-5

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 100 STAT. 3226

PUBLIC LAW 99-572—OCT. 28, 1986

Public Law 99-572 99th Congress ^ i . ^ Oct. 28, 1986 [H.R. 2205]

' An Act

'^

To authorize the erection of a memorial on Federal land in the District of Columbia and its environs to honor members of the Armed Forces of the United States who served in the Korean war.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, AUTHORIZATION OF MEMORIAL

40 USC 1003 note.

1. The American Battle Monuments Commission is authorized to establish a memorial on Federal land in the District of Columbia and its environs to honor members of the Armed Forces of the United States who served in the Korean war, particularly those who were killed in action, are still listed as missing in action, or were held as prisoners of war. Such memorial shall be established in accordance with the provisions of H.R. 4378, as approved by the House of Representatives on September 29, 1986. SECTION

ESTABLISHMENT OF KOREAN WAR VETERANS MEMORIAL ADVISORY BOARD

40 USC 1003 note.

SEC. 2. (a) There is hereby established a Korean War Veterans Memorial Advisory Board which shall consist of twelve veterans who served in the Korean war. The members of the Board shall be appointed by the President within one hundred and twenty calendar days of enactment of this Act. (b) The Korean War Veterans Memorial Advisory Board shall be responsible for: (1) recommending the site and selecting the design for the memorial, subject to the approval of the American Battle Monuments Commission and in accordance with section 7(a) of H.R. 4378, as approved by the House of Representatives on September 29, 1986; and (2) promoting the establishment of the memorial and encouraging the donation of private funds for the construction and maintenance of the memorial. FEDERAL AUTHORIZATION AND PRIVATE FUNDING

40 USC 1003 note.

Appropriation authorization.

SEC. 3. (a) The American Battle Monuments Commission shall establish the memorial with private funds except as provided in subsection (b) of this section. For the purpose of carrying out this Act, the American Battle Monuments Commission is authorized to solicit and accept private contributions. The Commission is directed to establish an account into which these private funds shall be deposited and to maintain documentation of such contributions. 0)) There are hereby authorized to be appropriated: (1) $500,000 for site preparation, design, planning, and associated administrative costs for the establishment of the memorial; and

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 100 STAT. 3227

PUBLIC LAW 99-572—OCT. 28, 1986

(2) $500,000 for construction of the memorial, to be available only after a construction permit has been issued for the memorial. (c) Private funds donated in excess of the cost of construction and maintenance of the memorial shall be deposited in the Treasury as miscellaneous receipts to reimburse the United States for funds appropriated pursuant to subsection 0)) of this section. Approved October 28, 1986. •d

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LEGISLATIVE HISTORY—H.R. 2205: HOUSE REPORTS: No. 99-341 (Comm. on House Administration). SENATE REPORTS: No. 99-459 (Comm. on Energy and Natural Resources). CONGRESSIONAL RECORD: Vol. 131 (1985): Nov. 4, 6, considered and passed House. Vol. 132 (1986): Oct. 9, considered and passed Senate, amended. Oct. 14, House concurred in Senate amendment.

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 100 STAT. 3228

PUBLIC LAW 99-573—OCT. 28, 1986

Public Law 99-573 99th Congress An Act Oct. 28, 1986 [H.R. 3578]

District of Columbia Judicial Efficiency and Improvement Act of 1986.

To provide permanent authority for hearing commissioners in the District of Columbia courts, to modify certain procedures of the District of Columbia Judicial Nomination Commission and the District of Columbia Commission on Judicial Disabilities and Tenure, and for other purposes.

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 "District of Columbia Judicial Efficiency and Improvement Act of 1986". SEC. 2. HEARING COMMISSIONERS.

(a) Section 1732 of title 11 of the District of Columbia Code is amended to read as follows: "§ 11-1732. Hearing commissioners. "(a) With the approval of a majority of the judges of the Superior Court of the District of Columbia in active service and subject to standards and procedures established by the rules of the Superior Court, the chief judge of the Superior Court may appoint Hearing Commissioners, who shall serve in the Superior Court and perform the duties enumerated in subsection (j) of this section and such other functions incidental to these duties as are consistent with the rules of the Superior Court and the Constitution and laws of the United States and of the District of Columbia. "(b) Hearing commissioners shall be selected pursuant to standards and procedures adopted by the Board of Judges. Such procedures shall contain provisions for public notice of all vacancies in hearing commissioner positions and for the establishment by the Court of an advisory merit selection panel, composed of lawyer and nonlawyer residents of the District of Columbia who are not employees of the District of Columbia Courts, to assist the Board of Judges in identifying and recommending persons who are best qualified to fill such positions. "(c) No individual shall be appointed as a hearing commissioner unless that individual— "(1) is a citizen of the United States; "(2) is an active member of the unified District of Columbia Bar and has been engsiged in the active practice of law in the District for the five years immediately preceding the appointment or for such five years has been on the faculty of a law school in the District, or has been employed as a lawyer by the United States or District government; and "(3) is a bona fide resident of the District of C!olumbia and has maintained an actual place of abode in the District for at least ninety days immediately prior to appointment, and retains such residency during service as a hearing commissioner, except that Hearing Commissioners appointed prior to the effective date of

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 PUBLIC LAW 99-573—OCT. 28, 1986

100 STAT. 3229

this section shall not be required to be residents of the District to be eligible to be appointed to one of the initial terms under this section or to be reappointed. "(d) Hearing commissioners shall be appointed for terms of four years and may be reappointed for terms of four years. Those individuals serving as hearing commissioners on the effective date of this Act shall be automatically appointed for a four year term. "(e) Upon the expiration of a hearing commissioner's term, the hearing commissioner may continue to perform the duties of office until a successor is appointed, or for 90 days after the date of the expiration of the hearing commissioner's term, whichever is earlier, (f) No individual may serve as a hearing commissioner under this section after having attained the age of seventy-four. "(g) The Board of Judges may suspend, involuntarily retire, or remove a hearing commissioner, during the term for which the hearing commissioner is appointed, only for incompetence, misconduct, neglect of duty, or physical or mental disability. Suspension, involuntary retirement, or removal requires the concurrence of a majority of the judges in active service. Before any order of suspension, involuntary retirement, or removal shall be entered, a full specification of the charges and the opportunity to be heard shall be furnished to the hearing commissioner pursuant to procedures established by rules of the Superior Court. "(h) If the Board of Judges determines that a hearing commissioner position is not needed, the Board of Judges may terminate the position. "(i)(l) Hearing commissioners may not engage in the practice of law, or in any other business, occupation, or employment inconsistent with the expeditious, proper, and impartial performance of their duties as officers of the court. "(2) Hearing commissioners shall abide by the Canons of Judicial Ethics. "0") A hearing commissioner, when specifically designated by the chief judge of the Superior Court, and subject to the rules of the Superior Court and the right of review under subsection (k), may perform the following functions: "(1) Administer oaths and affirmations and take acknowledgements; "(2) Determine conditions of release pursuant to the provisions of title 23 of the District of Columbia Code (relating to criminal procedure); "(3) Conduct preliminary examinations and initial probation revocation hearings in all criminal cases to determine if there is probable cause to believe that an offense has been committed and that the accused committed it; "(4)(A) In any case brought under sections 11-1101(1), (3), (10), Children and or (11) of the District of Columbia Code involving the establish- youth. ment or enforcement of child support, or in any CEise seeking to modify an existing child support order, where a hearing commissioner in the Family Division of the Superior Court finds that there is an existing duty of support, the hearing commissioner shall conduct a hearing on support, make findings, and enter judgment as provided by law, and in accordance with guidelines established by rule of the Superior Court, which judgment shall constitute a final order of the Superior Court. "(B) If in a CEise under paragraphs (A), the hearing commissioner finds that a duty of support exists and makes a finding

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 100 STAT. 3230

Reports.

t

1 - ,} f

PUBLIC LAW 99-573—OCT. 28, 1986

•.h that the case involves complex issues requiring judicial resolu7sl)' tion, the hearing commissioner shall establish a temporary support obligation and refer unresolved issues to a judge of the
 * 'iT Superior Court.

brv "(C) In cases under subparagraphs (A) and (B) in which the <r i hearing commissioner finds that there is a duty of support and s the individual owing that duty has been served or given notice s ' ' of the proceeding under any applicable statute or court rule, if that individual fails to appear or otherwise respond, the hearing commissioner shall enter a default order, which shall constitute a final order of the Superior Court; -^' "(5) Subject to the rules of the Superior Court and with the consent of the parties involved, make findings and enter final ^ orders or judgments in other uncontested or contested proceed® •' ings, in the Civil, Criminal, and Family Divisions of the Supe* rior Court, excluding jury trials and trials of felony cases, "(k) With respect to proceedings and hearings under paragraphs (2), (3), (4), and (5) of subsection (j)> a review of the hearing commissioner's order or judgment, in whole or in part, may be made by a judge of the appropriate division sua sponte and must be made upon a motion of one of the parties made pursuant to procedures established by rules of the Superior Court. The reviewing judge shall conduct such proceedings as required by the rules of the Superior Court. An appeal to the District of Columbia Court of Appeals may be made only after a judge of the Superior Court has reviewed the order or judgment. "(1) The Superior Court shall ensure that all hearing commissioners receive training to enable them to fulfill their responsibilities. "(m)(l) The chief judge of the Superior Court, in consultation with the District of Columbia Bar, the City Council of the District of Columbia, and other interested parties, shall within one year of the effective date of this section, make a careful study of conditions in the Superior Court to determine— "(A) the number of appointments required to provide for the j,jj. effective administration of justice; "(B) the divisions in which hearing commissioners shall serve; "(C) the appropriate functions of hearing commissioners; and ^ "(D) the compensation of, and other personnel matters pertaining to, hearing commissioners. ^ Upon completion of the study, the chief judge shall report the findings of such study to the appropriate committees of the Congress. "(2) After the study required by paragraph (1), the chief judge shall, from time to time, make such studies as the Board of Judges shall deem expedient, giving consideration to suggestions of the District of Columbia Bar and other interested parties. "(n) With the concurrence of the District of Columbia Court of Appeals, the Board of Judges of the Superior Court may, promulgate rules, not inconsistent with the terms of this section, which are necessary for the fair and effective utilization of hearing commissioners in the Superior Court. "(o) For purposes of this section, the term 'Board of Judges' means the judges of the Superior Court of the District of Columbia. Any action of the Board of Judges shall require a majority vote of the sitting judges.". „ -, ^.j.

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 PUBLIC LAW 99-573—OCT. 28, 1986

100 STAT. 3231

SEC. 3. APPOINTMENT OF EXECUTIVE OFFICER OF THE DISTRICT OF COLUMBIA COURTS.

Section 1703 of title 11 of the District of Columbia Code is amended— (1) by striking out subsection (b); • (2) by redesignating subsection (c) as subsection (d); and (3) by inserting after subsection (a) the following new subsections: "(b) The Executive Officer shall be appointed, and subject to removal, by the Joint Committee on Judicial Administration with the approval of the chief judges of the District of Columbia Courts. In making such appointment the Joint Committee shall consider experience and special training in administrative and executive positions and familiarity with court procedures. "(c) The Executive Officer shall be a bona fide resident of the District of Columbia or become a resident not more than 180 days after the date of appointment except that the Executive Officer in office at the effective date of this Act shall not be required to be or to become a resident of the District of Columbia.". SEC. 4. MANDATORY RETIREMENT AGE OF JUDGES.

Section 431(c) of the District of Columbia Self-Government and Governmental Reorganization Act is amended by striking out "seventy" and inserting in lieu thereof "seventy-four".

87 Stat. 792.

SEC. 5. REORGANIZATION OF AUDIT RESPONSIBILITY.

(a) AUDITOR-MASTER.—Section 11-1724 of title 11 of the District of Columbia Code is amended— (1) by striking out "(1) audit and state fiduciary accounts,"; and (2) by respectively designating clauses (2) and (3) as clauses "(1)" and "(2)". (b) REGISTER OF WILLS.—Section ll-2104(a) of title 11 of the District of Columbia C!ode is amended— (1) in paragraph (2) by striking out "and" after the semicolon; 2:}(2) in paragraph (3) by striking out the period and inserting in -r lieu thereof "; and"; and (3) by inserting at the end thereof the following new 0.r paragraph: "(4) audit and state fiduciary accounts.". SEC. 6. ELIMINATION OF DUPLICATE JUDICIAL FINANCIAL REPORTING REQUIREMENT. (a) TERMINATION OF FEDERAL DISCLOSURE REQUIREMENTS.—Section

303 of the Ethics in Government Act of 1978 (28 U.S.C. App. 301) is amended by inserting at the end thereof the following new subsection: "(h) The provisions of this Act shall not apply to any judicial officer or employee of the Superior Court of the District of Columbia or the District of C!olumbia (3ourt of Appeals or any other employee of the District of Columbia court system.". (b) TECHNICAL AND CONFORMING AMENDMENT.—Section 308(9) of such Act (28 U.S.C. App. 308(9)) is amended by striking out "courts of the District of Columbia".

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