[SEMI-PUBLIC] General Assembly - Term XIII

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Eutopian Federal Mortgage Guarantee Corporation Establishment Act ("EFMGCEA")

Whereas, higher percentages of home ownership are positively correlated with better standards of living, and increasing percentages of home ownership are positively correlated with economic growth, and

Whereas, since the privatization of RECOM, and the subsequent virtual elimination of the public debt of the United Provinces of Eutopia, there has been a shortage of the highest quality locally issued debt relative to investor demands, which has tended to lead to investment in other markets, most notably the United States, which could be filled by guaranteed local mortgage backed securities, and

Whereas, the lack of an organized process of mortgage securitization has led to higher mortgage rates for current and potential homeowners in the UPE, thus acting as a disincentive to home ownership, and

Whereas, in other countries, standardization and securitization of mortgages has led to lower mortgage rates and increased home ownership percentages, be it therefore

Resolved, that the Eutopian Federal Mortgage Guarantee Corporation is hereby established as government chartered corporation, under the portfolio of the Minister of Finance with 0.1% of the budget allocated to start up expenses, to be reimbursed out of future profits, and be it further

Resolved, that said corporation is hereby authorized to sell non-voting preferred stock to banks and other financial institutions, and is authorized to borrow in bond or debt markets for up to 12.5 times the amount of its net capital, and be it further

Resolved, that the sole business of the said corporation is to guarantee the timely payment of principal and interest on securities backed by pools of mortgages on one to four family owner occupied principal residences located within the boundaries of the United Provinces of Eutopia, where the amount of the mortgage at time of securitization is not more than twice the median house price in United Provinces of Eutopia, and be it further

Resolved, that said corporation shall charge a guarantee fee sufficient to cover expected losses and provide a fair return to its investors after tax, and be it further

Resolved, that said corporation shall be entitled to set mortgage underwriting standards, including, but not limited to, loan to value ratios, minimum down payments, and income to debt service percentages for the mortgages it is willing to guarantee, and be it further

Resolved, the federal anti-discrimination regulations will apply to the Eutopian Federal Mortgage Guarantee Corporation.

Draft Budgetary and Economic Impact Assessment
No direct or immediate budgetary impact. If this bill facilitates the development of the mortgage market, it would be expected to directly benefit the home construction and home improvement sectors of the economy and thus increase economic growth and tax reciepts by a percentage proportional to the increase in that sector, multiplied by the usual factor to estimate the impact of additional spending by those directly benefiting from higher incomes in those sectors.

The ECB generally agrees with the MGA's analysis, but observes that initial startup capital may be necessary to secure facilities, hire staff, cover initial losses, and otherwise prepare for a public offering, to the tune of perhaps 0.1% of the federal budget. It is unclear from the legislation as drafted whether the EFMGC will be funded by any Ministry or whether these funds would be drawn directly the federal budget. In addition, the ECB expresses concern about whether, given the rocky state of the Eutopian economy in the past, the EFMGC can attract investment without the nation first showing signs of recovery.

"The portion in red was added to reflect the ECB comments, although this expenditure was expected to be covered by the initial capital subscription. I would like to thank Acting Speaker Leary for his second.

There are many recipes for economic growth, but investment is a significant ingredient in all of them. Corporations budget for it, but will only select projects that meet their hurdles, and must deal with competition. It is better if the individual can be mobilized to invest, but since most of us are not cut out to be entrepreneurs, what can we do? We can provide an incentive to invest in our own housing. This bill, and the other two I have proposed, will go a long way into turning Eutopia from a nation of what I believe (pending the census results) are mostly renters into a nation of mostly home owners. One of the biggest obstacles to home ownership is the cost of mortgages in Eutopia. This bill would lower that in two ways. It would standardize the products to be offered, so potential fixed income investors wouldn't have to do so much work to analyze the exact terms of any potential investment in mortgages. It would provide lower risk premiums by diversifying and spreading the risk over a much wider pool of loans, so the impact of a local plant closing or flood would be distributed broadly, so the pricing would not need to consider local factors.

This will have a host of other benefits. It will stimulate residential construction and home revonations, which will provide jobs in these sectors. Neighborhoods with a higher percentage of home ownership have lower crime rates. The health of home owners is better than renters, so we will probably save money on the Medicure expenditures as well. Programs like this have been responsible for stimulating economic growth in the US. This bill contains the necessary controls to keep the government corporation limited the original purpose. It will be in the interest of the banking sector to invest in this corporation, which will permit the development of market for securitized mortgages here in Eutopia. That will free up some of their balance sheets for other lending, which will help other businesses. This will create high quality local bonds that have been scarce since the conversion to dollars and the privatization of RECOM. This will bring investment back into Eutopia that are currently in the US. It will also increase the attractiveness of investment in our country by foreign investors. This bill is good for workers and business, home owners and renters, borrowers and lenders. It is good for Eutopia!"

 

[Craig Ashley]

"I agree. This bill will create growth and raise the standard of living in Eutopia. Seeing as how no one has said anything in response, I'm tempted to move straight to a vote, but I'll keep the floor open for a few more hours in case anyone has any issues they'd like to raise before a vote."

"Once this bill is brought to a vote, we will have nothing on the floor, other than the Minister of Social Service's budget adjustment, and we're still waiting for him to get back to us on a few issues. I'd suggest that we all take a look at the bills in the speaker's office and see if any of them warrant a second."

"However, I do have an issue I'd like to raise. Our new guidelines make provisions for electing a new speaker if the previous one vacates the office. While we have done well with a series of acting speakers, I feel it would be in the nation's best interest to formally elect a new speaker and vice president. Therefor, I move we declare the office of Speaker vacant, as outlined by the Generaly Assembly Floor Rules, and then hold an immediate election of a new Speaker."

 

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You have been acting for a deputy speaker, and even the current deputy speaker would face court challenges if he tried to assume the Presidency if it should become vacant, which I hope it does not. Therefore, I would second your motion to declare the office of Speaker vacant.

 

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Assembly member's I would like to alert you to the fact that the ECB impact report has arrived for the budget ammendment.

Social Services Ministry Budget Amendment

The ECB finds that this amendment would affect the budget in an obvious fashion as dictated by the amendment itself, and the legislature can plainly see the economic impact it would have. Any other impacts this amendment would have are of a policy nature, and it is therefore not the province of the ECB to rule on them.

In plain terms, the ECB does not see this legislation having any noticeable impact on the revenues or expenditures of the federal government.

 

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Thank-you, Minister. Perhaps that and Mortgage Guarantee bill can be moved along to votes now. The other two housing related bills have received EIAs from the ECB. The Mortgage Guarantee bill is most applicable to potential homeowners who can scrape together a down payment. The Housing Renovation & Investment Act ("HRIA") would assist those willing to substitute hard work. It would give current tennants of slumlords a chance to turn their sweat into equity. Finally, the Land Lease/Sale Authorization Act ("LLSAA") would be applicable to some who can't even afford to pay rent. In all cases, the construction industry and trades would benefit. Together, these three acts give everyone a chance to realize the Eutopian dream of having their own piece of this good land. I would ask one of my fellow legislators to step forward and do their part by filing a second for either the Housing Renovation & Investment Act ("HRIA") or the Land Lease/Sale Authorization Act ("LLSAA") or both at the Speaker's Office.

 

[Craig Ashley]

"Minister Braxton, if you had listened to Per Park and I when we last discussed your proposal, we realized an ECB report would not answer the questions posed. And to no one's surprise, it has not."

"What we need to know is first, exactly what are your figures? The proposal you introduced didn't quite balance, so I think there may have been a typographical error somewhere (OOC: Your proposed cuts were larger than your proposed increases). Secondly, how will your proposed cuts affect the departments in question - most specifically Omnicare. I will require these answers before I bring your proposed change to a vote. I would also like to know how you arrived at that exact figure for an increase? I haven't heard of any reports indicating a dire need for an increase in welfare, though after Amric Al'Aeshir's recent declarations that may change. Also, if you'd be so kind, could you provide a price tag for the sum neccessary to cover just the increased costs for heating this winter for those who need it?"

"Given that the motion to declare the Speaker's office vacant has been introduced and seconded, and there has been no disucssion, I'm going to move it to a vote."

"Also, since I expect this motion to pass, I would appreciate it if the various parties would decide in advance who they would like to run should the office be vacated. I intend to run for the office myself, so I am willing to step aside and allow another member of this body to organize the vote. My main desire is to see this process resolved quickly so that we can carry on with our duty to legislate."

 

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I cannot re-introduce the bill to administer the businesses that former President Al'Aeshir seems determined to shut down, as this body has rejected it. However, if some of the honorable members who previously voted against it have had a change of heart considering recent events, they could move to reconsider the bill, although it might now be too late to make any difference.

I do hope that the authorities make sure there are no taxes left unpaid when AAH ceases operations.

 

[Craig Ashley]

"Rather than try to resurrect a defeated bill, I think it would be more prudent to look towards doing what we can for job creation and economic growth. The martime construction act was a start, but for that bill to really be maximized, we need to pass the Infrastructure Expansion Act. Not only will it increase the growth in the shipping, transportation, and ship construction sectors, the Infrastructure Act will create thousands of new jobs in the field of construction and all related fields."

 

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While your comments on the infrastructure bill are relevant, one does not normally argue against not making a motion, and instead waiting for someone to make it before debating it. If no one speaks up to suggest it be reconsidered, then we don't have to deal with it. I don't view the two possibilities (your infrastructure bill and reconsideration) as mutually exclusive. Have you adjusted your bill to make the Western terminus of the highway and then expanded port somewhere other than Erikshamm?

 

[Craig Ashley]

"People are free to make the motion, and if it generates enough support, we'll certainly reexamine it. As to your question, my staff is investigating alternative locations, but at this point Erikshamm seems to be the best. I has several advantages - existing local infrastructure, an available pool of affordable labor, and general proximity to the oil."

 

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We should leave it to the engineers, but Erikshamm is really small, so there is not much labor available there, and its unique charm would be spoiled by the proposed development. I thought the biggest onshore oilfields were mostly south of there. If Erikshamm was the only suitable location that could be developed into a larger port, then so be it. I had thought that there would be a mooring point offshore at which the supertankers could take aboard crude, so the actual port wouldn't have to accomodate anything that large, just ships large enough to offload supplies to build the highway, a new refinery, drilling equipment and tank farms.

 

[Craig Ashley]

"The natural gas fields and some oil fields are north of Erikshamm. The so called Francesca Field is very close. The Maria Field is to the south. So all in all, its fairly centralized in relation to our oil and natural gas resources. And while I fully expect Erikshamm to become a major hub for oil and natural gas transportation if this bill goes through, that is not the only reason it was chosen. Rather, my goal was to create a second and third major port of entry for Eutopia. We have New Lancaster in the northeast, this bill would help establish Erikshamm in the west and Hurteau in the southeast."

 

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The natural gas fields and some offshore oil fields are north of Erikshamm, but the offshore fields are closer to Farpoint and the Northern on-shore field are closer to Harton, Dunwich, and Farpoint. Since production from those areas wouldn't be shipped through Eriksham even if there was a port there, I think we should select a new point, further south, closer to the mid point of southern fields, if the engineers and surveyors can come with a suitable locale. It would be better to have the road lead there as well, so perhaps the highway extension should run from Gilford instead of Dunwich if the new port is closer to the border with Tilapia, although Dunwich could remain the connection point if the new western port is closer to Eriksham. If you incorporate these modification, I will second it. If you don't then I won't. Feel free to write some flexibility into the law, making it dependent on the engineering study and subject to the approval of the appropriate minister. If not, we might have to call these facilities, if they are underutilized because they are built in the wrong place, 'Leary's Folly'.

 

[Craig Ashley]

Just as Per Park finishes speaking, an aid rushes up to Colin. In his hands is a substantial and important looking report. Colin takes a second to skim the summary paper clipped to the cover. It appears his staff came through just in time.

"Per Park, I think I can put your concerns to rest. My staff has been working with engineers, surveyors, mining corporations, and all other concerned parties researching this question. Our preliminary findings indicated Erikshamm as the ideal location, hence its inclusion in the bill. The final report confirms that Erikshamm is the best of all possible options for a western port of entry. If you'd like, I can forward a copy of the entire report to your office."

 

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"...and all other concerned parties..." is that how you refer to the inhabitants of that lovely community? I didn't know that you personally or that your party was able to devote the substantial resources for a proper feasibility study. Has an environmental impact report been prepared? I don't think so.

We are the legislature, not the executive. It is not up to us to say whether a highway being constructed should go around a hill, over it, or through it. We can say that there should be a western port developed. You could propose an appropriation for a proper feasibility study, and see what they come back with, or we can get this moving by allowing the appropriate minister to decide on the exact location. Or do you need it to be Eirikshamn because you have secretly purchased cheap land near there that will be bought up, at higher prices, if that site is chosen? I do not have the resources to do so, as I am still paying off my student loans from my graduate education in New York. My earlier offer stands, modify the proposal to add flexibility for the Ministry in charge of implementing it or find someone else to second it.

 

[HJ Tulp]

"Per Leary, why do you think the airports need to be expanded?"

 

[Craig Ashley]

"Yes, I've secretly purchased all the land around Erikshamm and stand to make a bundle of cash from this white elephant of a bill. I also was there for the secret alien autopsy at a remote army base in WET that we've dubbed Area 45. Let's see any other vast conspiracies I've been a part of .... Oh yeah, I shot both Kennedys and I'm the real reason the Beatles broke up."

Colin takes a moment to collect himself before continuing.

"Per Park wild accusations have no place in these hallowed halls, unless you are prepared to present actual evidence to support them. Otherwise we havea name for that and it is called slander. If you don't support my bill, fine so be it, but I don't see the need to resort to infantile mudslinging tactics. And I certainly don't think it is fitting inside the halls of the General Assembly. Now I strongly suggest you limit your discussion to the merits of the bill at hand."

Colin now turns to Tulp.

"Per Tulp, the airports need expansion for the same reason the ports do, to create new major points of entry and exit for Eutopia. Currently New Lancaster serves as our only major point of entry, for both sea and air. With Eutopia's natural geographic location, a few proper steps - such as this bill - can make it into an international transportation hub. My staff and I have researched all possible locations and found the two proposed airport expansion sights to be the best. (OOC: Talked with the mods behind the scenes and selected the two airport expansions and the two port expansions based on their input.)"

 

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The infrastructure bill is not "at hand", as it hasn't been seconded. We had been "negotiating" here on the floor as to whether you would change the contents to get a second. I was asking whether you had any particular reason to insist on Eirikshamn, and when your staff report "conveniently" supported what you had already decided on, I was naturally skeptical. I didn't accuse you of anything. I asked a question. You calling my questioning slander would seem to be more slanderous than than my question. I understand that the GA functions best if the members can debate freely, so I don't and we shouldn't resort to name calling. The early, sarcastic part of your answer was appropriate. As to to later part, well it is a shame we don't have a speaker around to provide guidance on the matter.

 

[Craig Ashley]

Colin is just about to remind Park that there is an Acting Speaker and he is empowered to provide just the kind of guidance Park is talking about when his aids rush in and hand him a note.

"Gentlemen, a second has been filed for the Revised Bill of Worker's Rights by Per Sykes of the ENP. Since I am the author, allow me to introduce the bill and outline my reasoning."

Revised Worker's Bill of Rights Act

I. Wages & Time Off
1. All workers are entitled to be made a minimum wage, as established by the government and indexed to inflation.
2. Workers are also entitled to two weeks vacation a year, after serving a minimum probationary period of 9 months. Paid leave may be awarded on an accumulated basis, based on time worked.
3. Employers shall make available to every employee an half-hour break at least once per 8-hour shift and a paid 10-minute break for each 4-hours worked.


II. Working conditions
1. Government will guarantee the institution of local representative commissions with effective powers for reporting health and security concerns workmates to state authorities without sanction
2 Government will ensure that sufficient government inspectors are employed to enforce health, safety, and labour laws in the workplace.
3. No worker shall be work more than 20 hours per week until reaching the age of 16. The government will provide exemptions for family-based businesses.


III. Workers Rights of Organization
1. Workers are guaranteed the union rights to organize inside the private sector, though the government reserves the right to replace workers in crises of national emergency.
2. Unions are guaranteed the rights to sue firms that don't respect labour laws
3. All workers over the age of 16 and in good standing of their unions shall be allowed to vote in professional elections.

V. Education and Training
1. The government shall commit itself to a program to develop industrial education that shall be made available in the secondary education system.
2. The government establish program to provide workplace training for the unemployed and shall give particular attention to retraining programs for those who have their lost their jobs in declining industries.


VI. Employment Security and Benefits
1. Workers are entitled to fair and reasonable unemployment benefits.
2. Workers shall be entitled to full retirement rights after 40 years of full contribution.

"This bill allows the market to establish certain benefits that were previously mandated. Namely retirement benefits which previously were to be homogenized. This change will allow skilled, in demand workers to negotiate for better benefits, rather than having them tied to some artificial standard. A few other changes have been included. I updated the unemployment clause to reflect the fact that RUBB is now the guiding legislation to unemployment. And there a few other minor revisions as well."

"This bill will make Eutopia more attractive to foriegn companies as well as helping domestic ones. It will make Eutopia's labor pool more attractive on the global market, and that will mean more jobs in the long run."

 

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For the record, could you show us what this is replacing, and/or what are the changes being made?