Despite “concerns” expressed by the Treasury Department and Federal Reserve Chairman Alan Greenspan over natural gas provisions in the measure, the House, by a voice vote Wednesday, passed legislation that reauthorizes the Commodity Futures Trading Commission (CFTC) and strengthens the ability of the agency to crack down on manipulation in natural gas markets.

The bill, which was voted out by the House Agriculture Committee last week, was approved on the floor with no changes. The measure authorizes appropriations for the CFTC through fiscal year 2010, and expands the authority of the agency to “detect and deter” manipulation and attempted manipulation in gas markets, increases the reporting and record-keeping burden for people who operate in exchanges and raises the penalties for civil and criminal violations in most cases to $1 million per violation.

Treasury Secretary John Snow and Greenspan sent separate letters to Capitol Hill, expressing their opposition to the natural gas-related provisions in the House legislation (HR 4473).

The Senate bill, which has been voted out by the Senate Agriculture Committee, authorizes appropriations for the CFTC through fiscal year 2010, but — contrary to the House version — it does not seek to bolster the agency’s oversight of gas markets.

The House measure requires that “in the event of a significant and highly unusual change in the settlement of any physically delivered natural gas futures contract traded on a contract market …or derivatives transaction facility,” the CFTC must “conduct a review of the factors that cause the price movement in order to determine if manipulation or attempted manipulation in violation of [the Commodity Exchange Act] occurred.”

The bill further directs the CFTC to require “any person holding, maintaining or controlling any position in a contract of sale of natural gas for future delivery or option… at or in excess of such limits as the Commission may specify, to maintain for a period of five years and provide on request to the Commission, records of the person regarding the position and any related contract, agreement or transaction in natural gas to which the person is party.”

In addition, the measure raises the maximum civil and criminal penalty for manipulation or attempted manipulation to $1 million per violation in most cases, or triple the monetary gain to the person for each violation. It also raises the maximum prison sentence for violations to 10 years.

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