H.R. 3763 - Corporate and Auditing Accountability, Responsibility, and Transparency Act of 2002

COMMITTEE ACTION: REPORTED BY VOICE VOTE on Tuesday, April 23, 2002.
FLOOR ACTION: ADOPTED BY VOICE VOTE on Wednesday, April 24, 2002.
MANAGERS: SESSIONS/SLAUGHTER
107th Congress
2nd Session

H.R. 3763 - Corporate and Auditing Accountability, Responsibility, and Transparency Act of 2002

1. Structured rule.

2. Provides one hour of general debate equally divided and controlled by the chairman and ranking minority member of the Committee on Financial Services.

3. Waives all points of order against consideration of the bill.

4. Provides that the amendment in the nature of a substitute recommended by the Committee on Financial Services now printed in the bill shall be considered as an original bill for the purpose of amendment and shall be considered as read.

5. Waives all points of order against the bill, as amended.

6. Makes in order only those amendments printed in the report of the Committee on Rules accompanying the resolution.

7. Provides that the amendments printed in the report shall be considered only in the order printed in the report, may be offered only by a Member designated in the report, shall be considered as read, shall be debatable for the time specified in the report equally divided and controlled by the proponent and an opponent, shall not be subject to amendment, and shall not be subject to a demand for division of the question in the House or in the Committee of the Whole.

8. Waives all points of order against the amendments printed in the report.

9. Provides one motion to recommit with or without instructions.

---------

RESOLUTION

Resolved, That at any time after the adoption of this resolution the Speaker may, pursuant to clause 2(b) of rule XVIII, declare the House resolved into the Committee of the Whole House on the state of the Union for consideration of the bill (H.R. 3763) to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes. The first reading of the bill shall be dispensed with. All points of order against consideration of the bill are waived. General debate shall be confined to the bill and shall not exceed one hour equally divided and controlled by the chairman and ranking minority member of the Committee on Financial Services. After general debate the bill shall be considered for amendment under the five-minute rule. It shall be in order to consider as an original bill for the purpose of amendment under the five-minute rule the amendment in the nature of a substitute recommended by the Committee on Financial Services now printed in the bill. The committee amendment in the nature of a substitute shall be considered as read. All points of order against the committee amendment in the nature of a substitute are waived. No amendment to the committee amendment in the nature of a substitute shall be in order except those printed in the report of the Committee on Rules accompanying this resolution. Each such amendment may be offered only in the order printed in the report, may be offered only by a Member designated in the report, shall be considered as read, shall be debatable for the time specified in the report equally divided and controlled by the proponent and an opponent, shall not be subject to amendment, and shall not be subject to a demand for division of the question in the House or in the Committee of the Whole. All points of order against such amendments are waived. At the conclusion of consideration of the bill for amendment the Committee shall rise and report the bill to the House with such amendments as may have been adopted. Any Member may demand a separate vote in the House on any amendment adopted in the Committee of the Whole to the bill or to the committee amendment in the nature of a substitute. The previous question shall be considered as ordered on the bill and amendments thereto to final passage without intervening motion except one motion to recommit with or without instructions.


SUMMARY OF AMENDMENTS MADE IN ORDER

Oxley - Manager’s Amendment. Makes various technical and conforming changes, strikes provisions requiring companies listed on the stock exchanges to a code of ethics for senior corporate officers due to workability issues, and retains provisions regarding disclosure of changes in issuer codes of conduct. (10 minutes)

Capuano - Clarifies that two members of the public regulatory organization (PRO) must be individuals licensed to practice public accounting, two members may be individuals licensed to practice public accounting if they have not practiced within two years of being appointed, and one member must not be licensed to practice public accounting. Specifies that all members of the PRO board must meet a standard of financial literacy as determined by the SEC. (20 minutes)

Sherman - Requires auditors of publicly-traded companies to meet a minimum net capital requirement of not less than one-half of the annual audit revenue received by the accountant from issuers registered with the SEC. (20 minutes)

Kucinich - Substitute. Creates the Federal Bureau of Audits (FBA) to monitor corporate America’s books by auditing all publicly-traded companies. This new agency will be a part of the Securities and Exchange Commission (SEC), but maintain appropriate independence. The SEC will set the basic rules of auditing by incorporating the generally accepted auditing standards rules and making further refinements that are “necessary and appropriate in the public interest and for the protection of investors.” The FBA’s integrity will be ensured by several conflict of interest provisions to ensure that American taxpayers, investors, and employees get an accurate assessment of a corporation. (20 minutes)

LaFalce - Substitute. Replaces the regulatory structure in the bill with one that requires establishment of a public regulator with specified duties and authority, modifies definitions of non-audit services to make the two bans on non-audit services included in the bill effective, provides for approval of non-audit services by the audit committee, replaces the executive responsibility provisions in the bill to require executive certification of financial statements, to improve the ability of the SEC to bar officers and directors from future service in public companies. Enables the SEC to obtain disgorgement of stock bonuses from executives who have falsified financial statements. Places limits on analyst conflicts of interest and improves corporate governance by giving audit committees oversight of auditors. Establishes an independent nominating committee for independent directors. (40 minutes)

TEXT OF AMENDMENTS MADE IN ORDER (.pdf)