[DOCID: f:hr566.109]
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109th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 109-566
======================================================================
EXPORT-IMPORT BANK REAUTHORIZATION ACT OF 2006
_______
July 17, 2006.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Oxley, from the Committee on Financial Services, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 5068]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred
the bill (H.R. 5068) to reauthorize the operations of the
Export-Import Bank, and to reform certain operations of the
Bank, and for other purposes, having considered the same,
report favorably thereon with an amendment and recommend that
the bill as amended do pass.
CONTENTS
Page
Amendment........................................................ 2
Purpose and Summary.............................................. 13
Background and Need for Legislation.............................. 14
Hearings......................................................... 15
Committee Consideration.......................................... 15
Committee Votes.................................................. 19
Committee Oversight Findings..................................... 20
Performance Goals and Objectives................................. 20
New Budget Authority, Entitlement Authority, and Tax Expenditures 20
Committee Cost Estimate.......................................... 20
Congressional Budget Office Estimate............................. 20
Federal Mandates Statement....................................... 22
Advisory Committee Statement..................................... 22
Constitutional Authority Statement............................... 22
Applicability to Legislative Branch.............................. 23
Section-by-Section Analysis of the Legislation................... 23
Changes in Existing Law Made by the Bill, as Reported............ 25
Dissenting Views................................................. 44
Amendment
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Export-Import Bank Reauthorization
Act of 2006''.
SEC. 2. TABLE OF CONTENTS.
The table of contents of this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Reauthorization.
Sec. 4. Increasing exports by small businesses.
Sec. 5. Office of financing for socially and economically disadvantaged
small business concerns and small business concerns owned by women.
Sec. 6. Sub-Saharan Africa.
Sec. 7. Extension of authority.
Sec. 8. Transparency initiatives.
Sec. 9. Effect of the Bank on the budget of the United States.
Sec. 10. Competitiveness initiatives.
Sec. 11. Consideration of environmental matters by the Advisory
Committee.
Sec. 12. Study of how Export-Import Bank could assist United States
exporters to meet import needs of new or impoverished democracies;
reports.
Sec. 13. Review of environmental screening requirement.
Sec. 14. Office of Renewable Energy Promotion.
Sec. 15. Transparency.
Sec. 16. Anti-circumvention.
Sec. 17. Performance standards applicable to Bank assistance for small
businesses, especially those owned by social and economically
disadvantaged individuals and those owned by women.
Sec. 18. Prohibition on assistance to develop or promote any rail
connections or railway-related connections that traverse or connect
Baku, Azerbaijan, Tbilisi, Georgia, and Kars, Turkey, and that
specifically exclude cities in Armenia.
Sec. 19. Technical corrections.
Sec. 20. Effective date.
SEC. 3. REAUTHORIZATION.
Section 7 of the Export-Import Bank Act of 1945 (12 U.S.C. 635f) is
amended by striking ``2006'' and inserting ``2011''.
SEC. 4. INCREASING EXPORTS BY SMALL BUSINESSES.
(a) Establishment of Small Business Division.--
(1) In general.--Section 3 of the Export-Import Bank Act of
1945 (12 U.S.C. 635a) is amended by adding at the end the
following:
``(f) Small Business Division.--
``(1) Establishment.--The President of the Bank shall
establish and maintain a division of the Bank whose sole
functions shall be to--
``(A) carry out subparagraphs (E) and (I) of section
2(b)(1), as such subparagraphs relate to outreach,
feedback, product improvement, and transaction advocacy
for small business concerns;
``(B) advise and seek feedback from small business
concerns of the opportunities and benefits for small
business concerns in the financing products offered by
the Bank, with particular emphasis on conducting
outreach, better tailoring products to small business
needs and increasing loans to small business concerns
employing fewer than 100 employees; and
``(C) maintain liaison with the Small Business
Administration and other departments and agencies in
matters affecting small business concerns.
``(2) Management.--The division shall be managed by a Bank
officer designated by the Board of Directors--
``(A) who shall have substantial recent experience in
financing exports by small business concerns;
``(B) whose sole executive duty shall be to ensure
that the division carries out the functions of the
division;
``(C) who shall advise the Board, particularly the
Director appointed under section 3(c)(8)(B) to
represent the interests of small business, on matters
of interest to, and concern for, small business;
``(D) who shall rank not lower than senior vice
president of the Bank; and
``(E) who shall report directly to the President of
the Bank.
``(3) Resources.--
``(A) In general.--The President of the Bank shall
ensure that the division has sufficient qualified staff
and budgetary resources to carry out subparagraphs (E)
and (I) of section 2(b)(1), as determined annually by
the President of the Bank, after consultation with--
``(i) the officer referred to in paragraph
(2) of this subsection;
``(ii) the Director appointed under
subsection (c)(8)(B) of this section;
``(iii) the Committee on Financial Services
of the House of Representatives; and
``(iv) the Committee on Banking, Housing, and
Urban Affairs of the Senate.
``(B) Uses.--
``(i) In general.--The President of the Bank
shall ensure that the staff and budgetary
resources of the division are devoted solely to
carrying out the functions of the division.
``(ii) Certain staff duties.--The division
shall include staff dedicated exclusively to
providing outreach, training, and advice to,
seeking feedback from, and advocating on behalf
of small business concerns regarding Bank
financing opportunities, products, and
programs.
``(C) Rule of interpretation.--Nothing in this Act
shall be construed to prevent the delegation to the
division of any authority necessary to carry out
subparagraphs (E) and (I) of section 2(b)(1).
``(4) Small business concern defined.--In this subsection and
subsections (g) and (h), the term `small business concern'
shall have the meaning established under section 3(a) of the
Small Business Act.
``(g) Handling of Applications of, and Processing of Transactions
Involving Small Business Concerns.--Consistent with the requirement
that the Bank obtain a reasonable assurance of repayment for each
transaction the Bank supports, the Bank shall establish and maintain
transaction standards tailored to the special circumstances of small
business concerns and shall use the standards in evaluating
applications by the concerns for Bank financing. The Bank shall ensure
that each appropriate division of the Bank has staff dedicated to the
processing of transactions involving small business concerns.
``(h) Small Business Committee.--
``(1) Establishment.--The Bank shall establish and maintain a
committee to be known as the `Small Business Committee'.
``(2) Principal purpose.--The principal purpose of the Small
Business Committee shall be to focus on small business concerns
and coordinate the efforts of the Bank with respect to small
business concerns, including the timely processing of small
business product applications and the evolution of new or
improved Bank products to better serve small business needs.
``(3) Composition.--
``(A) Chairman.--The chairman of the Small Business
Committee shall be the Senior Vice President of the
Bank who is responsible for management of the Small
Business Division of the Bank.
``(B) Other members.--The President of the Bank shall
ensure that the committee is comprised of officers and
employees throughout the Bank that have responsibility
for outreach and processing transactions involving
small business concerns.
``(4) Reports.--The Small Business Committee shall report to
the President of the Bank.''.
(2) Coordination in financing of small business exports.--
Section 2(b)(1)(E)(vii)(I) of such Act (12 U.S.C.
635(b)(1)(E)(vii)(I)) is amended by adding at the end the
following: ``The Bank shall work in coordination with the
entities described in the preceding sentence to streamline the
processing of applications for Bank financing from small
business concerns and to provide training and advice as
required on the needs and benefits of export financing for
small business concerns.''
(b) Report on Fees Charged to, and Transactions Costs Incurred by,
Small and Medium Business for Bank Services.--Section 8 of such Act (12
U.S.C. 635g) is amended by adding at the end the following:
``(f) Report on Fees Charged to, and Transactions Costs Incurred by,
Small and Medium Business for Bank Services.--The Bank shall submit to
the Congress annually, and include in a separate section of the annual
report to the Congress under subsection (a) of this section, a report
on--
``(1) with respect to each type of transaction, the interest
and fees charged by the Bank to exporters (including a
description of fees and interest, if any, charged to small
business concerns), buyers, and other applicants in connection
with each financing program of the Bank, and the highest,
lowest, and average fees charged by the Bank for short term
insurance transactions;
``(2) the effects of the fees on the ability of the Bank to
achieve the objectives of the Bank relating to small business;
and
``(3) the fee structure of the Bank as compared with that of
other foreign export credit agencies.''.
(c) Report on Financing Directed Toward Small Business.--Section 8 of
such Act (12 U.S.C. 635g), as amended by subsection (b) of this
section, is amended by adding at the end the following:
``(g) Report on Financing Directed Toward Small Business.--The Bank
shall submit annually to the Committees on Financial Services and on
Small Business of the House of Representatives--
``(1) a report on the extent to which the Bank has been able
to use the authorities referred to in section 2(b)(1)(E)(iv),
and, to the extent the Bank has been unable to fully do so, a
report on the obstacles to doing so and on what the Bank is
doing to overcome the obstacles;
``(2) a report on the extent to which financing has been made
available to small business concerns to enable them to
participate in exports by major contractor, including through
access to the supply chains of the contractors through direct
or indirect funding; and
``(3) a strategic plan of action describing how, in the
upcoming year, the Bank will take specific measures to achieve
the small business objectives of the Bank, including expanded
outreach, product improvements, and related actions.''.
(d) Conforming Amendments.--
(1) In general.--
(A) Section 2(b)(1)(E) of such Act (12 U.S.C.
635(b)(1)(E)), as amended by subsection (a)(2) of this
section, is amended--
(i) in clause (i)(II), by striking ``gives
fair consideration to making loans and
providing'' and inserting ``make loans and
provide'';
(ii) by striking clause (iii);
(iii) in clause (iv), by striking ``clauses
(ii) and (iii) of this subparagraph'' and
inserting ``clause (ii)'';
(iv) in clause (vi)--
(I) by striking ``clause (v) of this
subparagraph'' and insert ``clause
(iv)''; and
(II) by striking ``clause (vi)'' and
inserting ``clause'';
(v) in clause (vii)--
(I) in subclause (I), by striking
``(v)'' and inserting ``(iv)''; and
(II) in each of subclauses (II),
(III), and (IV), by striking ``clause
(vii)'' and inserting ``clause''; and
(vi) by redesignating clauses (iv) through
(x) as clauses (iii) through (ix),
respectively.
(B) Section 8 of such Act (12 U.S.C. 635g) is
amended--
(i) in subsection (b)(2)(B), by striking
``2(b)(1)(E)(vii)'' and inserting
``2(b)(1)(E)(vi)''; and
(ii) in subsection (c), by striking
``(E)(x)'' and inserting ``(E)(ix)''.
(2) Uniform meaning of small business.--Section 2(b)(1)(E) of
such Act (12 U.S.C. 635(b)(1)(E)), as amended by subsection
(a)(2) of this section and paragraph (1) of this subsection, is
amended--
(A) in clause (i)(II), by striking ``businesses'' and
inserting ``business concerns'';
(B) in clause (iv), by striking ``(as defined under
section 3 of the Small Business Act)'';
(C) in each of clauses (v), (vi) and (vii), by
striking ``small business exports'' each place it
appears and inserting ``exports by small business
concerns''; and
(D) by adding at the end the following:
``(x) In this subparagraph, the term `small business concern' shall
have the meaning established under section 3(a) of the Small Business
Act.''.
(e) Enhance Delegated Loan Authority for Medium Term Transactions.--
(1) In general.--The Export-Import Bank of the United States
shall seek to expand the exercise of authority under section
2(b)(1)(E)(vi) of the Export-Import Bank Act of 1945 (as so
redesignated by subsection (d)(1)(A)(vi) of this section) with
respect to medium term transactions for small business concerns
(as defined under section 3(a) of the Small Business Act).
(2) Conforming amendment.--Section 2(b)(1)(E)(vi)(III) of the
Export-Import Bank Act of 1945 (12 U.S.C.
635(b)(1)(E)(vi)(III)), as so redesignated by subsection
(d)(1)(A)(vi) of this section, is amended by striking ``To the
maximum extent practicable, the'' and inserting ``The''.
(3) Deadline.--Within 180 days after the date of the
enactment of this Act, the Export-Import Bank of the United
States shall make available lines of credit and guarantees to
carry out section 2(b)(1)(E)(vi) of the Export-Import Bank Act
of 1945 (as so redesignated by subsection (d)(1)(A)(vi) of this
section), pursuant to policies and procedures established by
the Board of Directors of the Export-Import Bank of the United
States.
SEC. 5. OFFICE OF FINANCING FOR SOCIALLY AND ECONOMICALLY DISADVANTAGED
SMALL BUSINESS CONCERNS AND SMALL BUSINESS CONCERNS
OWNED BY WOMEN.
(a) In General.--Section 3(f) of the Export-Import Bank Act of 1945
(12 U.S.C. 635a(f)), as added by section 4(a) of this Act, is amended
by redesignating paragraph (4) as paragraph (5) and by inserting after
paragraph (3) the following:
``(4) Office of financing for socially and economically
disadvantaged small business concerns and small business
concerns owned by women.--
``(A) Establishment.--The President of the Bank shall
establish in the division an office whose sole
functions shall be to continue and enhance the outreach
activities of the Bank with respect to, and increase
the total amount of loans, guarantees, and insurance
provided by the Bank to support exports by, socially
and economically disadvantaged small business concerns
(as defined in section 8(a)(4) of the Small Business
Act) and small business concerns owned by women.
``(B) Management.--The office shall be managed by a
Bank officer of appropriate rank who shall report to
the Bank officer designated under section 3(f)(2).
``(C) Staffing.--To the maximum extent practicable,
the President of the Bank shall ensure that qualified
minority and women applicants are considered when
filling any position in the office.''.
(b) Financing Directed Toward Small Businesses Owned by Minorities or
Women.--Section 2(b)(1)(E)(iv) of such Act (12 U.S.C.
635(b)(1)(E)(iv)), as so redesignated by section 4(d)(1)(A)(vi) of this
Act, is amended by adding at the end the following: ``From the amount
made available under the preceding sentence, it shall be a goal of the
Bank to make available not less than 15 percent of the amount to
finance exports directly by small business concerns referred to in
section 3(f)(4)(A).''.
(c) Report on Financing Directed Toward Small Businesses Owned by
Minorities or Women.--Section 8(g)(1) of such Act (12 U.S.C.
635g(g)(1)), as added by section 4(c) of this Act, is amended by
inserting ``and to finance exports by small business concerns referred
to in section 3(f)(4)(A),'' before ``and, to the extent''.
(d) Report on Bank Efforts to Support Exports by Socially and
Economically Disadvantaged Small Business Concerns and Small Business
Concerns Owned by Women.--Section 8 of such Act (12 U.S.C. 635g), as
amended by section 4 of this Act, is amended by adding at the end the
following:
``(h) Report on Efforts to Support Exports by Small- and Medium-Sized
Businesses Owned by Women or Minorities.--Not later than March 1 of
each year, the Director appointed under section 3(c)(8)(B) of this Act
shall prepare and submit to the Committee on Financial Services of the
House of Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate, and the Bank shall include in a separate
section of the annual report submitted pursuant to subsection (a) of
this section, a written report that describes the progress made by the
Bank in supporting exports by socially and economically disadvantaged
small business concerns (as defined in section 8(a)(4) of the Small
Business Act) and small business concerns owned by women.''.
SEC. 6. SUB-SAHARAN AFRICA.
(a) Extension of Advisory Committee.--Section 2(b)(9)(B)(iii) of the
Export-Import Bank Act of 1945 (12 U.S.C. 635(b)(9)(B)(iii)) is amended
by striking ``2006'' and inserting ``2011''.
(b) Improved Liaison With African Regional Financial Institutions.--
(1) Master guarantee agreements.--Within 1 year after the
date of the enactment of this Act, the Export-Import Bank of
the United States shall seek to ensure that there is in effect
a contract between each approved lender in Africa and the Bank,
which sets forth the Bank's guarantee undertakings and related
obligations between the Bank and the lender.
(2) Report on working relationships with the african
development bank, the africa export-import bank, and other
institutions.--Section 2(b)(9) of such Act (12 U.S.C.
635(b)(9)) is amended by adding at the end the following:
``(C) The Bank shall include in the annual report to the Congress
submitted under section 8(a) a separate section that contains a report
on the efforts of the Bank to improve working relationships with the
African Development Bank, the Africa Export-Import Bank, and other
institutions in the region that are relevant to the purposes of
subparagraph (A) of this paragraph.''.
(c) Closer Cooperation With Other United States Agencies Working in
Africa.--Section 2(b)(9) of such Act (12 U.S.C. 635(b)(9)) is further
amended by adding at the end the following:
``(D) The Bank shall closely coordinate with the United States
Foreign Commercial Service and with the overall strategy of the United
States Government, for economic engagement with Africa pursuant to the
African Growth and Opportunity Act.
``(E) The Bank shall develop initiatives to train Foreign Service and
Commercial Service officers serving at United State embassies in
Africa, in the use of Bank programs, so the officers can encourage
African buyers to take part in transactions supported by the Bank.''.
(d) Adjustments to Procedures to Promote Qualification of African
Entities.--Section 2(b)(9) of such Act (12 U.S.C. 635(b)(9)) is further
amended by adding at the end the following:
``(F) Consistent with the requirement that the Bank obtain a
reasonable assurance of repayment in connection with each transaction
the Bank supports, the Bank shall, in consultation with the entities
described in subparagraph (C), seek greater flexibility in the due-
diligence procedures of the Bank for the purpose of qualifying a
greater number of appropriate African entities for participation in
programs of the Bank.''.
(e) Local Currency Financing.--Section 2(b)(9) of such Act (12 U.S.C.
635(b)(9)) is further amended by adding at the end the following:
``(G) The Bank shall develop procedures under which the Bank is
capable of financing certain African programs in local currencies.''.
SEC. 7. EXTENSION OF AUTHORITY.
Section 1(c) of Public Law 103-428 (12 U.S.C. 635 note) is amended by
striking ``2001'' and inserting ``2011''.
SEC. 8. TRANSPARENCY INITIATIVES.
(a) Frequency of Meetings.--Section 3(c) of the Export-Import Bank
Act of 1945 (12 U.S.C. 635a(c)) is amended by adding at the end the
following:
``(9) The Board of Directors shall meet not less frequently than
biweekly.
``(10) At the request of any 2 members of the Board of Directors, the
Chairman shall place an item on the agenda for consideration by the
Board. Within 30 days after the date such a request is made, the
Chairman shall hold a meeting of the Board at which the item will be
considered.''.
(b) Voting Required in Cases Involving Economic Impact Analysis.--
Section 2(e) of such Act (12 U.S.C. 635(e)) is amended by adding at the
end the following:
``(5) Board vote required.--Within 60 days after completing a
review, pursuant to this subsection, of a proposed loan or
guarantee (including any applicable comment period), the Board
of Directors shall hold a vote to determine whether or not to
proceed with the proposed loan or guarantee, unless the
applicant has withdrawn the application for the loan or
guarantee.''.
(c) Process for Notifying Applicants of Application Status.--Section
2 of such Act (12 U.S.C. 635) is amended by adding at the end the
following:
``(g) Process for Notifying Applicants of Application Status.--The
Bank shall establish and adhere to a clearly defined process for--
``(1) acknowledging receipt of applications;
``(2) informing applicants that their applications are
complete or, if incomplete or containing a minor defect, of the
additional material or changes that, if supplied or made, would
make the application eligible for consideration; and
``(3) keeping applicants informed of the status of their
applications, including a clear and timely notification of
approval or disapproval, and, in the case of disapproval, the
reason for disapproval, as appropriate.''.
(d) Response to Application for Financing; Implementation of Online
Loan Request and Tracking Process.--Section 2 of such Act (12 U.S.C.
635) is further amended by adding at the end the following:
``(h) Response to Application for Financing; Implementation of Online
Loan Request and Tracking Process.--Within 5 days after receipt of an
application for financing from the Bank, the Bank shall notify the
applicant that the application has been received, and shall include in
the notice a request for such additional information as may be
necessary to make the application complete, the name of a Bank employee
who may be contacted with questions relating to the application, and a
unique identification number which may be used to review the status of
the application at a website established as provided in the next
sentence. Not later than September 1, 2006, the Bank shall use the
authorities provided by subparagraphs (E)(ix) and (J) of subsection
(b)(1) of this section to establish, and thereafter to maintain, a
website through which any Bank product may be applied for, information
may be obtained about the status of any such application, about the
small business division of the Bank, or about incentives, preferences,
targets, and goals relating to small business concerns referred to in
section 3(f)(4)(A) or small business concerns exporting to Africa.''.
(e) Reports Relating to Technology to Assist Small Businesses.--
(1) Reports by the bank.--
(A) Initial report.--Within 60 days after the date of
the enactment of this Act, the President of the Export-
Import Bank of the United States shall submit to the
Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing,
and Urban Affairs of the Senate a report on--
(i) the efforts made by the Bank to carry out
subparagraphs (E)(ix) and (J) of section
2(b)(1) of the Export-Import Bank Act of 1945,
including the total amount expended by the Bank
to do so; and
(ii) if the Bank has been unable to comply
with such subparagraphs--
(I) an analysis of the reasons
therefor;
(II) what the Bank is doing to
achieve, and the date by which the
Banks expects to have achieved, such
compliance; and
(III) the name of each Bank officer
who is responsible for ensuring that
the Bank achieves, and the name of the
person to whom the Bank officer reports
on progress in achieving, such
compliance.
(B) Subsequent annual reports.--Section 8(c) of the
Export-Import Bank Act of 1945 (12 U.S.C. 635g(c)), as
amended by section 4(d)(1)(B)(ii) of this Act, is
amended to read as follows:
``(c) Technology to Assist Small Businesses.--The Bank shall include
in its annual report to the Congress under subsection (a) of this
section for each of fiscal years 2007 through 2011 a separate section
that contains--
``(1) a report on the efforts made by the Bank to carry out
subparagraphs (E)(ix) and (J) of section 2(b)(1) of this Act,
the total amount expended in the fiscal year to do so, and how
the efforts are assisting small business concerns (as defined
under section 3(a) of the Small Business Act); and
``(2) if the Bank has been unable to comply fully with such
subparagraphs--
``(A) an analysis of the reasons therefor;
``(B) a description of what the Bank is doing to
achieve, and the date by which the Banks expects to
have achieved, such full compliance; and
``(C) the name of each Bank officer who is
responsible for ensuring that the Bank achieves, and
the name of the person to whom the Bank officer reports
on progress in achieving, such full compliance.''.
(2) Report by the inspector general of the bank.--Within 120
days after the date of the enactment of this Act or, if later,
within 30 days after the date the vacancy in the position of
the Inspector General of the Export-Import Bank of the United
States is filled, the Inspector General of the Export-Import
Bank of the United States shall submit to the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the
Senate--
(A) a report on the efforts made by the Bank to carry
out subparagraphs (E)(ix) and (J) of section 2(b)(1) of
the Export-Import Bank Act of 1945, the total amount
expended to do so, and how the efforts are assisting
small business concerns (as defined under section 3(a)
of the Small Business Act); and
(B) if the Bank has been unable to comply with such
subparagraphs--
(i) an analysis of the reasons therefor;
(ii) a description of what the Bank is doing
to achieve, and the date by which the Banks
expects to have achieved, such compliance; and
(iii) the name of each Bank officer who is
responsible for ensuring that the Bank
achieves, and the name of the person to whom
the Bank officer reports on progress in
achieving, such compliance.
(f) Public Disclosure of Certain Documents.--Section 11(a)(1) of the
Export-Import Bank of 1945 (12 U.S.C. 635i-5(a)(1)) is amended by
inserting after the first sentence the following: ``Such procedures
shall provide for the public disclosure of environmental assessments
and supplemental environmental reports required to be submitted to the
Bank, including remediation or mitigation plans and procedures, and
related monitoring reports. The preceding sentence shall not be
interpreted to require the public disclosure of any information
described in section 1905 of title 18, United States Code.''.
SEC. 9. EFFECT OF THE BANK ON THE BUDGET OF THE UNITED STATES.
Within 90 days after the date of the enactment of this Act, the
Export-Import Bank of the United States shall submit to the appropriate
committees of the Congress a report on the revenues, expenditures, and
resulting annual net income or expense to the United States for each of
the 10 years most recently completed before the date of the report.
SEC. 10. COMPETITIVENESS INITIATIVES.
(a) Expansion of Scope of Annual Competitiveness Report.--
(1) Consolidation and reorganization of provisions.--The
Export-Import Bank Act of 1945 (12 U.S.C. 635-635i-9) is
amended by inserting after section 8 the following:
``SEC. 8A. ANNUAL COMPETITIVENESS REPORT.
``(a) In General.--Not later than June 30 of each year, the Bank
shall submit to the appropriate committees of the Congress a report
that includes the following:
``(1) Actions of bank in providing financing on a competitive
basis, and to minimize competition in government-supported
export financing.--A description of the actions of the Bank in
complying with the 2nd and 3rd sentences of section 2(b)(1)(A).
In this part of the report, the Bank shall include a survey of
all other major export-financing facilities available from
other governments and government-related agencies through which
foreign exporters compete with United States exporters
(including through use of market windows (as defined in section
10(h)(7)) and indicate in specific terms the ways in which the
Bank's rates, terms, and other conditions compare with those
offered from such other governments directly or indirectly.
With respect to the preceding sentence, the Bank shall use all
available information to estimate the annual amount of export
financing available from each such government and government-
related agency. In this part of the report, the Bank shall
include a survey of a representative number of United States
exporters and United States commercial lending institutions
which provide export credit to determine the experience of the
exporters and institutions in meeting financial competition
from other countries whose exporters compete with United States
exporters.
``(2) Role of bank in implementing strategic plan prepared by
the trade promotion coordinating committee.--A description of
the role of the Bank in implementing the strategic plan
prepared by the Trade Promotion Coordinating Committee in
accordance with section 2312 of the Export Enhancement Act of
1988.
``(3) Tied aid credit program and fund.--The report required
by section 10(g).
``(4) Purpose of all bank transactions.--A description of all
Bank transactions which shall be classified according to their
principal purpose, such as to correct a market failure or to
provide matching support.
``(5) Efforts of bank to promote export of goods and services
related to renewable energy sources.--A description of the
efforts undertaken under section 2(b)(1)(K).
``(6) Size of bank program account.--A separate section
which--
``(A) compares the size of the Bank program account
with the size of the program accounts of the other
major export-financing facilities referred to in
paragraph (1); and
``(B) makes recommendations with respect to the
relative size of the Bank program account, based on
factors including whether the size differences are in
the best interests of the United States taxpayer.
``(7) Co-financing programs of the bank and of other export
credit agencies.--A separate section which describes the co-
financing programs of the Bank and of the other major export-
financing facilities referred to in paragraph (1), which shall
include a list of which countries with which the United States
has in effect a memorandum of understanding relating to export
credit agency co-financing and an explanation of why such a
memorandum is not in effect with the countries with which such
a memorandum is not in effect.
``(8) After-market services support by the bank and by other
export credit agencies.--A separate section which describes the
participation of the Bank in providing funding, guarantees, or
insurance for after-market services, which shall include
appropriate information on the involvement of the other major
export-financing facilities referred to in paragraph (1) in
providing such support for after-market services, and an
explanation of any differences among the facilities in
providing the support.
``(9) Export finance cases not in compliance with the
arrangement.--Detailed information on cases of export finance
that are not in compliance with the Arrangement (as defined in
section 10(h)(3)) or that exploit loopholes in the Arrangement
for the purpose of obtaining a commercial competitive
advantage.
``(10) Foreign export credit agency activities not consistent
with the wto agreement on subsidies and countervailing
measures.--A description of the extent to which the activities
of foreign export credit agencies and other entities sponsored
by a foreign government, particularly those that are not
members of the Arrangement (as defined in section 10(h)(3)),
are not in compliance with the Arrangement and may not be
consistent with the terms of the Agreement on Subsidies and
Countervailing Measures referred to in section 101(d)(12) of
the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(12)), and a
description of the actions taken by the United States
Government to address the activities.
``(b) Board Vote on Report Required.--The Board of Directors shall
vote to approve and shall sign each report required by subsection (a).
``(c) Inclusion of Dissenting Views, Etc.--Each report required by
subsection (a) shall include such dissenting views and additional
comments as any member of the Board of Directors may submit to the
Board for inclusion in the report.''.
(2) Conforming amendment.--Section 2(b)(1)(A) of such Act (12
U.S.C. 635(b)(1)(A)) is amended by striking all that follows
the 3rd sentence.
(b) Report on Involvement of the Bank and of Other Export Credit
Agencies in Regional Multi-Buyer Insurance Programs and Working-Capital
Guarantee Programs.--Section 8 of such Act (12 U.S.C. 635g), as amended
by sections 4 and 5 of this Act, is amended by adding at the end the
following:
``(i) Report on Involvement of the Bank and of Other Export Credit
Agencies in Regional Multi-Buyer Insurance Programs and Working-Capital
Guarantee Programs.--The Bank shall include in its annual report to the
Congress under subsection (a) of this section a separate section that
contains a report on--
``(1) regional multi-buyer insurance programs and working
capital guarantee programs operated by, through, or in
conjunction with the Bank, which shall include an analysis of
the effectiveness of the programs and of how effective the
programs would be in increasing export-related jobs in the
United States if the programs were larger;
``(2) the size of similar programs of all other major export-
financing facilities available from other governments and
government-related agencies through which foreign exporters
compete with United States exporters (including through use of
market windows (as defined in section 10(h)(7)); and
``(3) as a detailed explanation, with respect to the
programs, of the working relationship between the Bank and the
Small Business Administration, the Department of Commerce, and
other United States Government agencies concerned with
increasing the number of export-related jobs in the United
States.''.
(c) Clarification of Use of Tied Aid Credit Fund to Match.--Section
10 of the Export-Import Bank Act of 1945 (12 U.S.C. 635i-3) is
amended--
(1) in subsection (a)--
(A) in paragraph (5)--
(i) in the matter preceding subparagraph (A),
by striking ``two'' and inserting ``3'';
(ii) in subparagraph (A)(iv), by striking
``and''; and
(iii) by adding at the end the following:
``(C) third, the Bank should support United States
exporters when the exporters face foreign competition
that is supported by foreign export credit agencies or
other entities sponsored by a foreign government that
are not party to the Arrangement; and''; and
(B) in paragraph (6)--
(i) in the matter preceding subparagraph (A),
by inserting ``including those that are not a
party to the Arrangement'' after ``countries'';
(ii) in subparagraph (B), by adding ``and''
at the end; and
(iii) by inserting after subparagraph (B) the
following:
``(C) promoting compliance with Arrangement rules
among foreign export credit agencies that are not a
party to the Arrangement,''; and
(2) in subsection (b)--
(A) in paragraph (2)(A), by striking ``in
consultation with the Secretary and''; and
(B) in paragraph (5)--
(i) in subparagraph (A), by striking
``Secretary and the Bank jointly'' and
inserting ``Bank'';
(ii) in subparagraph (B)--
(I) in clause (i)--
(aa) in the matter preceding
subclause (I), by striking
``Secretary and the'';
(bb) in subclause (I), by
inserting ``, and to bring into
the Arrangement those countries
that are not a party to the
Arrangement'' before the
period; and
(cc) in subclause (III), by
adding at the end the following
``In cases where information
about a specific offer of
foreign tied aid (or untied aid
used to promote exports as if
it were tied aid) is not
available in a timely manner,
or is unavailable because the
foreign export credit agency
involved is not subject to the
reporting requirements under
the Arrangement, then the Bank
may decide to use the Tied Aid
Credit Fund based on credible
evidence of a history of such
offers under similar
circumstances or other forms of
credible evidence.''; and
(II) in clause (ii), by adding at the
end the following: ``The President of
the United States shall notify the
Congress of such a determination within
30 days, including an explanation for
the determination.'';
(iii) in subparagraph (C), by striking ``the
Secretary and''; and
(iv) in subparagraph (E), by striking
``Secretary and the Bank jointly'' and
inserting ``Bank''.
(d) Expansion of Countries in Competition With Whom the Bank Is to
Provide Export Financing.--Section 2(b)(1)(A) of such Act (12 U.S.C.
635(b)(1)(A)) is amended in the 2nd sentence by inserting ``, including
countries the governments of which are not members of the Arrangement
(as defined in section 10(h)(3))'' before the period.
(e) Authority to Seek Use of Mixed Forms of Concessional Financing.--
Section 10 of such Act (12 U.S.C. 635i-3) is amended by adding at the
end the following:
``(i) Authority to Seek Use of Mixed Forms of Concessional
Financing.--For purposes of improving the effects of Bank financing on
development in tied aid eligible markets (as defined under the
Arrangement) and of improving the competitiveness of the Bank in the
markets, the Bank shall, in consultation with United States government
aid agencies and, as appropriate, multilateral aid institutions, seek
to establish, consistent with the Arrangement, a mixed credit program
consisting of longer term financing and other forms of more flexible
repayment terms, financing of transactions in local currencies, and
other forms of concessional financing that meets the needs of the
product sector and foreign market involved.''.
(f) Instructions Regarding Negotiation of the OECD Arrangement.--The
Secretary of the Treasury shall instruct the designee of the Secretary
to the negotiation of the Arrangement (as defined in section 10(h)(3)
of the Export-Import Bank Act of 1945) to inform the other participants
in the negotiation that the goals of the United States include the
following:
(1) Seeking compliance with the Arrangement among countries
with significant export credit programs who are not members of
the Arrangement.
(2) Seeking to identify within the World Trade Organization
the extent to which countries that are not a party to the
Arrangement are not in compliance with the terms of the
Agreement on Subsidies and Countervailing Measures referred to
in section 101(d)(12) of the Uruguay Round Agreements Act (19
U.S.C. 3511(d)(12)) in regards to export finance, and seeking
appropriate action within the World Trade Organization if such
a country is not in such compliance.
(3) Implementing new disciplines on the use of untied aid,
market windows, and other forms of export finance that seek to
exploit loopholes in the Arrangement for purposes of obtaining
a commercial competitive advantage.
SEC. 11. CONSIDERATION OF ENVIRONMENTAL MATTERS BY THE ADVISORY
COMMITTEE.
Section 3(d) of the Export-Import Bank Act of 1945 (12 U.S.C.
635a(d)) is amended--
(1) in paragraph (1)--
(A) in subparagraph (A), by striking ``15'' and
inserting ``17''; and
(B) in subparagraph (B), by inserting
``environment,'' before ``production,''; and
(2) in paragraph (2), by adding at the end the following:
``(C) Not less than 2 members appointed to the Advisory Committee
shall be representative of the environmental nongovernmental
organization community, except that no 2 of the members shall be from
the same environmental organization. Environmental organizations
represented shall have demonstrated experience with environmental
issues associated with the Bank, the Export Credit Group of the
Organization for Economic Cooperation and Development, or both.''.
SEC. 12. STUDY OF HOW EXPORT-IMPORT BANK COULD ASSIST UNITED STATES
EXPORTERS TO MEET IMPORT NEEDS OF NEW OR
IMPOVERISHED DEMOCRACIES; REPORTS.
(a) Study.--The Export-Import Bank of the United States shall conduct
a study designed to assess the needs of new or impoverished democracies
such as Liberia and Haiti, for imports from the United States, and
shall determine what role the Bank can play a role in helping United
States exporters seize the opportunities presented by the need for such
imports.
(b) Reports to the Congress.--
(1) Interim report.--Within 6 months after the date of the
enactment of this Act, the Bank shall submit to the Committee
on Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate,
in writing, an interim report that contains the results of the
study required by subsection (a).
(2) Final report.--Within 12 months after the date of the
enactment of this Act, the Bank shall submit to the Committee
on Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate,
in writing a final report that contains the results of the
study required by subsection (a).
SEC. 13. REVIEW OF ENVIRONMENTAL SCREENING REQUIREMENT.
(a) In General.--Within 6 months after the position of Inspector
General of the Export-Import Bank of the United States is filled, the
Inspector General of the Export-Import Bank of the United States shall
submit to the Committee on Resources and the Committee on Financial
Services of the House of Representatives, and to the Committee on
Banking, Housing, and Urban Affairs of the Senate a report on the
implications of limiting the requirement to conduct environmental
screenings of projects proposed to be financed by the Bank to only
those involving at least $10,000,000.
(b) Contents of Report.--The report shall--
(1) determine whether the $10,000,000 limitation prevents the
identification of any project that may have an adverse effect
on the environment; and
(2) propose guidelines for how project applications may be
screened more effectively to determine whether a project may
have such an effect.
SEC. 14. OFFICE OF RENEWABLE ENERGY PROMOTION.
Section 3 of the Export-Import Bank Act of 1945 (12 U.S.C. 635a), as
amended by section 4(a)(1) of this Act, is amended by adding at the end
the following:
``(i) Office of Renewable Energy Promotion.--
``(1) Establishment.--Within 1 year after the date of the
enactment of this subsection, the President of the Bank shall
establish and maintain in the Bank an office which shall be
known as the `Office of Renewable Energy Promotion' (in this
subsection referred to as the `Office').
``(2) Functions.--The Office shall be responsible for
proactively identifying new opportunities for renewable energy
financing and carrying out section 2(b)(1)(K). In carrying out
its function of promoting renewable energy technologies, the
Office should, among other things, consider the recommendations
made by the Renewable Energy Export Advisory Committee.
``(3) Staff.--The President of the Bank shall ensure that the
Office has staff with appropriate expertise in renewable energy
technologies.
``(4) Annual reports.--The Bank shall submit annually to the
Committee on Resources and the Committee on Financial Services
of the House of Representatives, and to the Committee on
Banking, Housing, and Urban Affairs of the Senate, a report
that contains, for the fiscal year covered by the report--
``(A) a detailed description of the activities of the
Office; and
``(B) an analysis comparing the level of credit
extended by the Bank for renewable energy projects with
the level of credit so extended for the preceding
fiscal year.
``(5) Renewable energy technologies defined.--In this
subsection, the term `renewable energy technologies' means
technologies for producing power through the use of solar
energy, wind energy, and energy from biomass, fuel cells, or
geothermal sources, and technologies for producing less than 10
megawatts in hydropower.''.
SEC. 15. TRANSPARENCY.
(a) In General.--Section 2(e) of the Export-Import Bank Act of 1945
(12 U.S.C. 635(e)), as amended by section 8(b) of this Act, is amended
by adding at the end the following:
``(6) Procedures to reduce adverse effects of loans and
guarantees on industries and employment in united states.--
``(A) Consideration of economic effects of proposed
transactions.--If, in making a determination under this
paragraph with respect to a loan or guarantee, the Bank
conducts a detailed economic impact analysis or similar
study, the analysis or study, as the case may be, shall
include consideration of--
``(i) the factors set forth in subparagraphs
(A) and (B) of paragraph (1); and
``(ii) the views of the public and interested
parties.
``(B) Notice and comment requirements.--
``(i) In general.--If, in making a
determination under this subsection with
respect to a loan or guarantee, the Bank
intends to conduct a detailed economic impact
analysis or similar study, the Bank shall cause
to be published in the Federal Register a
notice of the intent, and provide a period of
not less than 14 days (which, on request by any
affected party, shall be extended to a period
of not more than 30 days) for the submission to
the Bank of comments on the economic effects of
the provision of the loan or guarantee. In
addition, the Bank shall seek comments on the
effects from the Department of Commerce, the
International Trade Commission, the Office of
Management and Budget, the Committee on
Banking, Housing, and Urban Affairs of the
Senate, and the Committee on Financial Services
of the House of Representatives.
``(ii) Content of notice.--The notice shall
include appropriate, nonproprietary information
about--
``(I) the name of the applicant;
``(II) the country to which the goods
involved in the transaction will be
shipped;
``(III) the type of goods being
exported;
``(IV) the amount of the loan or
guarantee involved;
``(V) the goods that would be
produced as a result of the provision
of the loan or guarantee;
``(VI) the amount of increased
production that will result from the
transaction;
``(VII) the potential sales market
for the resulting goods;
``(VIII) the value of the
transaction; and
``(IX) any other relevant
information.
``(iii) Procedure regarding materially
changed applications.--
``(I) In general.--If a material
change is made to an application for a
loan or guarantee from the Bank after a
notice with respect to the intent
described in clause (i) is published
under this subparagraph, the Bank shall
cause to be published in the Federal
Register a revised notice of the
intent, and shall provide for a comment
period, as provided in clauses (i) and
(ii).
``(II) Material change defined.--In
subclause (I), the term `material
change', with respect to an
application, includes--
``(aa) a change of at least
25 percent in the amount of a
loan or guarantee requested in
the application; and
``(bb) a change in the
principal product to be
produced as a result of any
transaction that would be
facilitated by the provision of
the loan or guarantee.
``(C) Requirement to consider and address views of
adversely affected persons.--Before taking final action
on an application for a loan or guarantee from the Bank
to which this subsection applies, the Bank shall
consider and address in writing the views of any person
who may be substantially adversely affected by the
provision of the loan or guarantee.
``(D) Publication of conclusions.--Within 30 days
after a party affected by a final decision of the Board
of Directors with respect to a loan or guarantee makes
a written request therefor, the Bank shall provide to
the affected party a non-confidential summary of the
facts found and conclusions reached in any detailed
economic impact analysis or similar study conducted
pursuant to subparagraph (B) with respect to the loan
or guarantee, that were submitted to the Board of
Directors.
``(E) Rule of interpretation.--This paragraph shall
not be construed to make subchapter II of chapter 5 of
title 5, United States Code, applicable to the Bank.
``(F) Regulations.--The Bank shall implement such
regulations and procedures as may be appropriate to
carry out this paragraph.''.
(b) Conforming Amendment.--Section 2(e)(2)(C) of such Act (12 U.S.C.
635(e)(2)(C)) is amended by inserting ``of not less than 14 days
(which, on request of any affected party, shall be extended to a period
of not more than 30 days)'' after ``comment period''.
SEC. 16. ANTI-CIRCUMVENTION.
Section 2(e) of the Export-Import Bank Act of 1945 (12 U.S.C.
635(e)), as amended by sections 8(b) and 15(a) of this Act, is
amended--
(1) in paragraph (1), by adding after and below the end the
following:
``In making the determination under subparagraph (B), the Bank
shall determine whether the facility that would benefit from
the extension of a credit or guarantee is reasonably likely to
produce products in addition to or other than the product
specified in the application and whether the production of the
products may cause substantial injury to United States
producers of the same, or a similar or competing, commodity.'';
(2) in paragraph (2), by adding at the end the following:
``(E) Anti-circumvention.--The Bank shall not provide
a loan or guarantee if the Bank determines that
providing the loan or guarantee will facilitate
circumvention of a trade law order or determination
referred to in subparagraph (A).''; and
(3) by adding at the end the following:
``(7) Financial threshold determinations.--For purposes of
determining whether a proposed transaction exceeds a financial
threshold under this subsection or under the procedures or
rules of the Bank, the Bank shall aggregate the dollar amount
of the proposed transaction and the dollar amounts of all loans
and guarantees, approved by the Bank in the preceding 24-month
period, that involved the same foreign entity and substantially
the same product to be produced.''.
SEC. 17. PERFORMANCE STANDARDS APPLICABLE TO BANK ASSISTANCE FOR SMALL
BUSINESSES, ESPECIALLY THOSE OWNED BY SOCIAL AND
ECONOMICALLY DISADVANTAGED INDIVIDUALS AND THOSE
OWNED BY WOMEN.
(a) Development of Performance Standards.--Within 120 days after the
date of the enactment of this Act, the Comptroller General of the
United States shall develop and transmit to the Board of Directors of
the Export-Import Bank of the United States--
(1) a set of standards which may be used to determine the
extent to which the Bank has carried out successfully
subparagraphs (E) and (I) of section 2(b)(1) of the Export-
Import Bank Act of 1945, and the functions described in
subsections (f)(1)(A), (f)(4)(A), and (h)(2) of section 3 of
such Act; and
(2) a set of rules for measuring the performance of the Bank
against the standards.
(b) Report on Performance.--Section 8 of the Export-Import Bank Act
of 1945 (12 U.S.C. 635g), as amended by sections 4, 5, and 10(b) of
this Act, is amended by adding at the end the following:
``(j) Report on Achievement of Performance Standards Applicable to
Small Business Concerns, Socially and Economically Disadvantaged Small
Business Conerns, and Small Business Concerns Owned by Women.--The Bank
shall submit annually to the Congress, and include in a separate
section of the annual report to the Congress under subsection (a) of
this section, a report on the extent to which the Bank has carried out
successfully subparagraphs (E) and (I) of section 2(b)(1), and the
functions described in subsections (f)(1)(A), (f)(4)(A), and (h)(2) of
section 3, of this Act, using the performance standards and measuring
rules developed pursuant to section 12(a) of the Export-Import Bank
Reauthorization Act of 2006. ''.
SEC. 18. PROHIBITION ON ASSISTANCE TO DEVELOP OR PROMOTE ANY RAIL
CONNECTIONS OR RAILWAY-RELATED CONNECTIONS THAT
TRAVERSE OR CONNECT BAKU, AZERBAIJAN, TBILISI,
GEORGIA, AND KARS, TURKEY, AND THAT SPECIFICALLY
EXCLUDE CITIES IN ARMENIA.
Section 2(b) of the Export-Import Bank Act of 1945 (12 U.S.C. 635(b))
is amended by adding at the end the following:
``(13) The Bank shall not guarantee, insure, extend credit, or
participate in an extension of credit in connection with the
development or promotion of any rail connections or railway-related
connections that do not traverse or connect with Armenia, and do
traverse or connect Baku, Azerbaijan, Tbilisi, Georgia, and Kars,
Turkey. ''.
SEC. 19. TECHNICAL CORRECTIONS.
Section 2(b)(2)(B)(ii) of the Export-Import Bank Act of 1945 (12
U.S.C. 635(b)(2)(B)(ii)) is amended by striking subclauses (I), (III),
(VII), (VIII), and (IX), and redesignating subclauses (II), (IV), (V),
and (VI) as subclauses (I) through (IV), respectively.
SEC. 20. EFFECTIVE DATE.
The amendments made by this Act shall take effect on October 1, 2006.
Purpose and Summary
H.R. 5068, the ``Export-Import Bank Reauthorization Act of
2006,'' was introduced on March 30, 2006. This legislation
seeks a five-year reauthorization of the Bank and proposes
changes to Bank operations in a number of areas to improve its
accessibility to small businesses and its competitiveness with
other nations' export credit agencies.
Background and Need for Legislation
The Export-Import Bank of the United States (``Ex-Im'' or
the ``Bank'') was created by Congress in 1934 to help stimulate
foreign trade during the Great Depression and increase
employment of U.S. workers. Since its founding, the Bank has
financed and facilitated the export of U.S. goods and services
by assuming risks that the private sector will not generally
accept. Ex-Im issues guarantees to help private lenders engage
in trade finance and offers competitive financing directly to
foreign buyers of U.S. goods and services. Last year the Bank
conducted more than 3100 transactions, supporting over $17.9
billion in export value, and returned over $1.7 billion to the
U.S. Treasury in the form of fees.
The Bank's charter requires that the Bank supplement--and
not compete with--the private sector. The Bank funds only
transactions that have ``a reasonable assurance of repayment''
in order to help insulate taxpayers from assuming inappropriate
risks of loss associated with trade finance transactions. H.R.
5068 will ensure that the bank continues to fulfill this
mission and also proposes changes that would allow the Bank to
better support U.S. exports, sustain economic growth, and
create jobs in the United States.
H.R. 5068, the ``Export-Import Bank Reauthorization Act of
2006,'' was introduced on March 30, 2006, by Chairman Pryce
with Chairman Oxley, Ranking Member Frank, and Reps. Maloney,
Biggert, Velazquez and Manzullo as original co-sponsors. This
legislation calls for a five-year reauthorization of the Bank.
In addition, H.R. 5068 proposes changes to Bank operations in a
number of areas to improve its accessibility to small
businesses and its competitiveness with other nations' export
credit agencies.
H.R. 5068 calls for the creation of a new office to focus
solely on the small business community, with particular
emphasis on conducting outreach and increasing loans to small
businesses owned by women, minorities, and the socially and
economically disadvantaged. The division would maintain a
liaison with the Small Business Administration and other
related agencies and would be managed by a Senior Vice
President at the Bank--reporting directly to the Chairman--who
is familiar with small business transactions and has a
dedicated budget and qualified staff.
Under this reorganization the Bank should be better suited
to fulfill its mandate, as set out in the 2002 reauthorization,
of ``(making) available, from the aggregate loan, guarantee,
and insurance authority available to it, an amount to finance
exports directly for small business concerns which shall be not
less than 20 percent of such authority for each fiscal year.''
Additional provisions contained in H.R. 5068 are intended to
streamline the processing of applications for Bank assistance
for small businesses and to ensure that small businesses are
not charged excessive transaction fees by the Bank. An annual
report of these fees, as well as reports on financing directed
to small businesses, will help ensure the Bank's accountability
and keep the Congress updated on its progress.
The legislation establishes a goal that 15 percent of Ex-Im
Bank lending for small businesses should be devoted to women
and minority owned businesses. In setting this goal, the
Committee recognizes that Ex-Im Bank cannot legally require the
provision of information with respect to whether exporters
qualify as socially and economically disadvantaged small
business concerns or small business concerns owned by women. As
a result, Ex-Im Bank is not able to precisely determine the
percentage of total Ex-Im Bank authorizations that represent
support for such companies and must rely on voluntary reporting
by such companies for this determination. Nonetheless, the
Committee strongly encourages Ex-Im Bank to make every effort
to maximize support for socially and economically disadvantaged
small business concerns or small business concerns owned by
women, and the 15 percent goal in the legislation is a useful
target for Ex-Im Bank in this regard.
In recognition of the growing number of U.S. businesses
seeking export opportunities in Africa, H.R. 5068 includes
provisions to encourage the Bank to work more closely with
African countries and institutions. H.R. 5068 requires the Bank
to seek greater flexibility in its procedures when working with
African entities; extends authorization for the Bank's advisory
committee on Sub-Saharan Africa until 2011; and seeks to ensure
that agreements are in place between each approved lender in
Africa and the Bank that clearly set forth the obligations
between the Bank and lenders. Additionally, H.R. 5068 calls for
a report on the efforts of the Bank to improve working
relationships with the African Development Bank and the Africa
Export-Import Bank and directs the Bank to better coordinate
efforts with other U.S. agencies dealing with Africa, including
the United States Foreign Commercial Service.
Frequently-voiced criticisms of the Bank often center on
the Board of Directors' (``Board'') decision-making procedures
and the handling of loan applications. H.R. 5068 addresses
these concerns by requiring biweekly meetings of Board members
and a mandatory Board vote within 60 days on cases that involve
assistance which could yield a net adverse economic impact on
U.S. production and employment. H.R. 5068 would also require
the Bank to inform applicants within a specified amount of time
that their applications have been received. In addition, the
Bank would be required to establish and adhere to a process for
informing applicants on the progress of those applications as
well as whether or not an application is complete.
To ensure that, in its decision-making process, the Bank
has full access to all necessary information from all relevant
sources, the Committee is increasing the transparency of the
process by, for example, providing for: (1) upon request of an
affected party, a notice and comment period of 30 days for all
loan or guarantee applications subject to an economic impact
analysis; (2) issuance of a revised notification if there is a
material change in the application after the initial notice;
and (3) the opportunity for public review of a summary of the
facts found and conclusions reached of an economic impact
analysis subsequent to the Bank's taking action on an
application.
H.R. 5068 also focuses on the Bank's online capabilities.
The business community has been frustrated by the Bank's
inability to make products and services available through the
Internet. By requiring that the Bank do a better job of keeping
applicants informed of the status of their applications
(including a clear and timely notification of approval or
disapproval) H.R. 5068 will ensure that the Bank will be more
responsive to American exporters. H.R. 5068 calls for
implementation of an on-line loan requests and tracking process
by September, 2006.
Ex-Im is required by existing statute to be fully
competitive with the export credit agencies of other countries
so that U.S. exporters are not at a commercial disadvantage
when they compete with foreign exporters. Ex-Im has focused its
efforts to date on its traditional competitors within the OECD
like Canada, Germany, and Japan. But China has emerged in
recent years as the biggest threat to a level playing field in
export financing. China's export credit agency is projected to
be the largest in the world within five years and operates
outside of the rules system that governs export credit, the so-
called ``OECD Arrangement''.
The Committee is concerned by reports from U.S. exporters
that that they are unable to compete in some foreign markets
due to non-OECD compliant export subsidies provided by the
Chinese government to Chinese companies.
This legislation seeks to ensure that Ex-Im is fully
competitive with China and other countries that currently
operate in violation of the OECD Arrangement rules. It also
requires Treasury to seek to bring China and other non-OECD
countries (to the extent these countries provide significant
export credit support) into the OECD rules system and to seek
appropriate actions within the WTO for on-going violations of
the rules.
In order to improve Ex-Im's overall competitiveness, this
legislation also clarifies the rules regarding the Tied Aid
Credit Fund. The Committee believes that existing rules and
procedures limit the effectiveness of this fund, which is
intended to allow Ex-Im to match the offer of competing export
credit agencies on certain transactions. The Committee believes
the fund is a legitimate tool for export finance that has been
underutilized in recent years. The legislation improves Ex-Im's
ability to make timely decisions on potential tied aid fund
transactions, while maintaining an appropriate role for the
Department of Treasury.
The Committee recognizes that the Tied Aid Credit Fund
alone is inadequate in addressing the competitive threat posed
by China's export subsidy practices, and we expect Ex-Im will
consider all of the export finance tools at its disposal in
determining the most effective ways to compete with China's
export credit practices.
The Committee believes that one way Ex-Im can be more
competitive in developing country markets is through the
creation of a mixed credit facility. This legislation directs
Ex-Im to create such a facility, which would allow for
financing terms that are appropriate to the circumstances in
these markets. The legislation also requires that the facility
be compliant with the OECD Arrangement rules, so that Ex-Im
mixed credit support is properly targeted toward markets and
sectors where it will have a positive development impact.
The Committee notes that financial institutions including
the Overseas Private Investment Corporation and the World
Bank's International Finance Corporation and Multilateral
Investment Guarantee Agency have established accountability
mechanisms in recognition of the limitations of mechanisms
within existing institutional structures to ensure
accountability and compliance with environmental, social,
labor, human rights and transparency standards.
The Committee recognizes that: (1) Ex-Im's mission is to
create and maintain U.S. jobs by providing financing support
for U.S. exports and is not developmental as is the case with
the aforementioned institutions, and (2) Ex-Im is required by
its Charter to rely upon other agencies for consideration of
labor and human rights issues. While acknowledging the
foregoing, the Committee urges Ex-Im to ensure that there
exists within the Bank an accountability function that would:
(1) evaluate and report on the Bank's compliance with these
standards, where applicable to its operations; (2) provide a
forum for receiving and responding to concerns from the public
regarding the environmental and social impacts of specific
Bank-supported projects; and (3) provide recommendations
regarding how to bring such specific projects into compliance
with applicable standards and guidelines.
The Committee believes such a function should serve as a
mechanism that will be accessible and responsive primarily to
persons living and working in project areas either directly or
through their representatives and to environmental
organizations. The Bank should ensure that sufficient resources
are available to carry out the accountability function and that
the Bank staff that is charged with carrying out the function
has an appropriate degree of autonomy.
In developing the accountability function, the Bank should
consult with multiple stakeholders and seek input from the
existing Office of Accountability at the Overseas Private
Investment Corporation regarding its experience thus far.
An issue of concern to the Committee, addressed in this
legislation, is protection against circumvention of trade law
applicable to grantees of Bank loans and guarantees. In making
a determination as to whether the financing of a facility will
affect global surplus of a specific product, it is important
that the Bank look beyond the product listed in the application
and make an independent judgment as to whether the facility is
reasonably likely to be used for producing other goods that are
in global surplus. If the facility is reasonably likely to be
used for producing other goods in global surplus, the Bank
should conduct an analysis and make a determination with
respect to the production of these goods as well as for the
product identified in the application.
In making a determination of whether a proposed financing
would facilitate production of a product that is the subject of
an order or determination under U.S. trade law, the Bank also
should ensure that the financing will not enable the
circumvention of the intent of a trade law action. For example,
a manufacturer whose product is subject to an antidumping order
in one country should not be able to circumvent that order by
receiving a Bank financing for a facility to produce
substantially the same product in another country.
Likewise, a new producer generally should not be eligible
for a Bank financing to establish a facility to produce a
product in a country in which producers are already subject to
antidumping orders with respect to substantially the same
product. Nor should a manufacturer with a product under order
be able to benefit from Bank financing to establish the
capacity to transform or further process the product under
order into a related product not under order where such
transformation or further processing is reasonably foreseeable.
For example, if production of hot rolled steel is subject
to a trade law order, the Bank should not provide financing to
facilitate further processing of that hot rolled steel into
cold rolled or corrosion resistant steel. The trade order
circumvention provision should not be implemented mechanically,
but, as a general rule and when consistent with the intent of
the provision, the Bank's inquiry into the likelihood of trade
order circumvention should include products at least two steps
upstream or downstream in the production cycle from the listed
product.
The statute and the Bank's procedures establish thresholds
based on the value of a proposed financing that trigger an
economic impact analysis or trade law determination by the
Bank. In order to prevent attempts to circumvent these
thresholds by breaking one large transaction into several
smaller ones, financing thresholds are to be aggregated for all
financings involving the same foreign buyer and substantially
the same product approved within a 24-month period. When the
Bank conducts an economic impact analysis based on the
aggregation of financings, the outcome of that analysis will
affect only those applications that had not been acted on at
the time the analysis is initiated.
Hearings
The Subcommittee on Domestic and International Monetary
Policy, Trade and Technology and the Subcommittee on Oversight
and Investigations held a hearing on November 10, 2005 on the
progress made by the Export-Import Bank of the United States in
implementing its most recent reauthorization. The following
witnesses testified: The Honorable James H. Lambright, Chairman
and Acting President, Export-Import Bank of the United States;
Mr. Joseph Watters, Director of International Sales, Hoffman
International, on behalf of Small Business Exporters
Association; Mr. Harry G. Hayman, Senior Vice President, PNC
Bank N.A., on behalf of Bankers Association for Finance and
Trade; Mr. John D. Sabroske, Director, Export Credit and Trade
Finance, John Deere Credit.
The Subcommittee on Domestic and International Monetary
Policy, Trade and Technology held a hearing on April 5, 2006,
on H.R. 5068, a bill to reauthorize the Export-Import Bank of
the United States. The following witnesses testified: The
Honorable James H. Lambright, Chairman and Acting President,
Export-Import Bank of the United States; Mr. Edmund B. Rice,
President, Coalition for Employment Through Exports; Mr. James
Harmon, Chairman, World Resources Institute; Mr. James
Morrison, President, Small Business Exporters Association of
the United States.
Committee Consideration
The Committee on Financial Services met in open session on
June 14, 2006, and ordered H.R. 5068 reported to the House, as
amended, by a voice vote.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. A
motion by Mr. Oxley to report the bill, as amended, to the
House with a favorable recommendation was agreed to by a voice
vote.
The following amendment was considered and disposed of by a
record vote. The names of Members voting for and against
follow:
An amendment by Mr. Sanders, No. 1, on certification
regarding U.S. wages was NOT AGREED TO by a record vote of 33
ayes and 34 nays. (Record vote no. FC-20)
RECORD VOTE NO. FC-20
----------------------------------------------------------------------------------------------------------------
Representative Aye Nay Present Representative Aye Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Oxley...................... ........ X ......... Mr. Frank (MA)... X ........ .........
Mr. Leach...................... ........ X ......... Mr. Kanjorski.... X ........ .........
Mr. Baker...................... ........ X ......... Ms. Waters....... X ........ .........
Ms. Pryce (OH)................. ........ ........ ......... Mr. Sanders...... X ........ .........
Mr. Bachus..................... ........ X ......... Mrs. Maloney..... X ........ .........
Mr. Castle..................... ........ X ......... Mr. Gutierrez.... X ........ .........
Mr. Royce...................... ........ X ......... Ms. Velazquez.... X ........ .........
Mr. Lucas...................... ........ X ......... Mr. Watt......... X ........ .........
Mr. Ney........................ ........ X ......... Mr. Ackerman..... X ........ .........
Mrs. Kelly..................... ........ X ......... Ms. Hooley....... X ........ .........
Mr. Paul....................... X ........ ......... Ms. Carson....... X ........ .........
Mr. Gillmor.................... ........ X ......... Mr. Sherman...... X ........ .........
Mr. Ryun (KS).................. ........ X ......... Mr. Meeks (NY)... X ........ .........
Mr. LaTourette................. ........ X ......... Ms. Lee.......... X ........ .........
Mr. Manzullo................... ........ X ......... Mr. Moore (KS)... X ........ .........
Mr. Jones (NC)................. X ........ ......... Mr. Capuano...... X ........ .........
Mrs. Biggert................... ........ X ......... Mr. Ford......... X ........ .........
Mr. Shays...................... ........ X ......... Mr. Hinojosa..... X ........ .........
Mr. Fossella................... ........ X ......... Mr. Crowley...... X ........ .........
Mr. Gary G. Miller (CA)........ ........ X ......... Mr. Clay......... X ........ .........
Mr. Tiberi..................... ........ X ......... Mr. Israel....... X ........ .........
Mr. Kennedy (MN)............... ........ X ......... Mrs. McCarthy.... X ........ .........
Mr. Feeney..................... ........ X ......... Mr. Baca......... X ........ .........
Mr. Hensarling................. ........ X ......... Mr. Matheson..... X ........ .........
Mr. Garrett (NJ)............... ........ X ......... Mr. Lynch........ ........ ........ .........
Ms. Brown-Waite (FL)........... ........ X ......... Mr. Miller (NC).. X ........ .........
Mr. Barrett (SC)............... ........ X ......... Mr. Scott (GA)... X ........ .........
Ms. Harris..................... ........ X ......... Mr. Davis (AL)... X ........ .........
Mr. Renzi...................... ........ X ......... Mr. Al Green (TX) X ........ .........
Mr. Gerlach.................... ........ X ......... Mr. Cleaver...... X ........ .........
Mr. Pearce..................... ........ X ......... Ms. Bean......... ........ ........ .........
Mr. Neugebauer................. ........ X ......... Ms. Wasserman X ........ .........
Schultz.
Mr. Price (GA)................. ........ X ......... Ms. Moore (WI)... X ........ .........
Mr. Fitzpatrick (PA)........... ........ X
Mr. Davis (KY)................. ........ X
Mr. McHenry.................... ........ X
Mr. Campbell................... ........ X
----------------------------------------------------------------------------------------------------------------
*Mr. Sanders is an independent, but caucuses with the Democratic Caucus
The Committee considered the following other amendments:
A manager's amendment by Ms. Pryce, No. 2, was AGREED TO by
a voice vote.
An amendment by Mr. Crowley, No. 3, prohibiting assistance
to certain rail connections, was AGREED TO by a voice vote.
An amendment by Ms. Waters, No. 4, on performance
standards, was AGREED TO by a voice vote.
An amendment by Mr. Davis (AL), No. 5, dealing with anti-
circumvention, was AGREED TO, by a voice vote.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee held hearings and made
findings that are reflected in this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee establishes the
following performance related goals and objectives for this
legislation:
H.R. 5068, the ``Export-Import Bank Reauthorization Act of
2006,'' is a five-year reauthorization of the Bank and proposes
changes to Bank operations in a number of areas to improve its
accessibility to small businesses and its competitiveness with
other nations' export credit agencies.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of budget authority, entitlement authority, or
tax expenditures or revenues contained in the cost estimate
prepared by the Director of the Congressional Budget Office
pursuant to section 402 of the Congressional Budget Act of
1974.
Committee Cost Estimate
The Committee adopts as its own the cost estimate prepared
by the Director of the Congressional Budget Office pursuant to
section 402 of the Congressional Budget Act of 1974.
Congressional Budget Office Estimate
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 28, 2006.
Hon. Michael G. Oxley,
Chairman, Committee on Financial Services,
U.S. House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 5068, the Export-
Import Bank Reauthorization Act of 2006.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Sam
Papenfuss.
Sincerely,
Donald B. Marron,
Acting Director.
Enclosure.
H.R. 5068--Export-Import Bank Reauthorization Act of 2006
Summary: H.R. 5068 would extend the authority of the
Export-Import Bank of the United States (Eximbank) to enter
into new direct loan obligations and new guaranteed loan
commitments through 2011. The bill also would expand the use of
the Tied Aid Credit Program. Additionally, the bill would
establish within the Eximbank a new division focusing on small
business concerns, and two new offices to assist businesses
owned by women or socially and economically disadvantaged
individuals, and to assist businesses involved in renewable
energy development.
CBO estimates that implementing H.R. 5068 would have a new
cost of $35 million in 2007 and about $450 million over the
2007-2011 period, assuming appropriation of the necessary
amounts. Additionally, CBO estimates that enacting the bill
would increase direct spending by $5 million in 2007, $45
million over the 2007-2011 period, and $95 million over the
2007-2016 period.
H.R. 5068 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA)
and would not affect the budgets of state, local, or tribal
governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 5068 is shown in the following table.
The costs of this legislation fall within budget function 150
(international affairs).
----------------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
-----------------------------------------------------------------
2006 2007 2008 2009 2010 2011
----------------------------------------------------------------------------------------------------------------
SPENDING SUBJECT TO APPROPRIATION
Spending Under Current Law for Eximbank:
Estimated Budget Authority \1\............ 96 0 0 0 0 0
Estimated Outlays......................... 236 177 76 39 15 8
Proposed Changes:
Estimated Authorization Level............. 0 105 118 121 125 128
Estimated Outlays......................... 0 35 84 98 110 116
Spending Under H.R. 5068 for Eximbank:
Estimated Authorization Level \1\......... 96 105 118 121 125 128
Estimated Outlays......................... 236 212 160 137 125 124
CHANGES IN DIRECT SPENDING
Budget Authority.............................. 0 0 0 0 0 0
Estimated Outlays............................. 0 5 10 10 10 10
----------------------------------------------------------------------------------------------------------------
\1\ The 2006 level is the net amount appropriated for that year, including ofsetting collections for negative
subsidy amounts.
Basis of estimate: For the purposes of this estimate, CBO
assumes that H.R. 5068 will be enacted before the end of the
fiscal year and that outlays will follow historical patterns.
Spending subject to appropriation
H.R. 5068 would extend Eximbank's authority to provide
financing through 2011, an additional five years. Although no
specific authorization is provided in the bill, we expect that
appropriations would continue for both administrative costs and
the cost of new loans and guarantees, as defined in the Federal
Credit Reform Act. Over the 2007-2011 period, CBO estimates
that the bill would authorize annual appropriations for
Eximbank equal to the amount appropriated in 2006, adjusted for
inflation. In 2006, the Congress appropriated $73 million for
administrative expenses and $73 million for the subsidy cost of
new loans and guarantees. For the last few years, the subsidy
rate for many loan guarantees made by Eximbank has been
negative, which generates offsetting collections of about $40
million a year. These collections reduce the net cost of
Eximbank's operation and are included in the estimated costs
over the 2007-2011 period.
Accordingly, CBO estimates that extending the operation of
Eximbank through 2011 would have a net cost of $35 million in
2007 and about $450 million over the 2007-2011 period, assuming
appropriation of the estimated amounts.
Direct spending
H.R. 5068 would increase spending of previously
appropriated funds by setting more permissive standards for
using the Tied Aid Credit Fund and limiting the Secretary of
Treasury's ability to veto decisions about using the fund. The
Tied Aid Credit Fund is used to provide assistance to U.S.
exporters when their market share in developing markets is
threatened by other countries' use of aid or concessional
financing to promote exports to those developing markets. The
use of the fund has been limited in recent years to defending
the existing export-credit arrangement of the Organization for
Economic Cooperation and Development. According to Eximbank,
the fund has unobligated balances in excess of $200 million and
no funds has been expended for the last four years. Monies in
the fund are available until expended. With limited involvement
by the Secretary of Treasury and more expansive rules for using
the Tied Aid Credit Fund, CBO expects outlays from the fund
would increase under H.R. 5068. Based on information from
Eximbank, CBO estimates that enacting H.R. 5068 would increase
outlays from the Tied Aid Credit Fund by $5 million in 2007,
and by $10 million a year in subsequent years--resulting in
outlays of $45 million over the 2007-2011 period and $95
million over the 2007-2016 period.
Intergovernmental and private-sector impact: H.R. 5068
contains no intergovernmental or private-sector mandates as
defined in UMRA and would not affect the budgets of state,
local, or tribal governments.
Estimate prepared by: Federal costs: Sam Papenfuss; Impact
on state, local, and tribal governments: Melissa Merrell;
Impact on the private sector: Craig Cammarata.
Estimate approved by: Peter H. Fontaine, Deputy Assistant
Director for Budget Analysis.
Federal Mandates Statement
The Committee adopts as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional Authority of Congress to enact this legislation
is provided by Article 1, section 8, clause 1 (relating to the
general welfare of the United States) and clause 3 (relating to
the power to regulate interstate commerce).
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
Section 1. Short title
This section provides the short title of the bill, the
``Export-Import Bank Reauthorization Act of 2006.''
Section 2. Table of contents
This section provides the table of contents.
Section 3. Reauthorization
This section reauthorizes the Bank through September 30,
2011.
Section 4. Increasing exports by small businesses
This section creates a small business division within Ex-
Im, led by a senior vice president who reports directly to the
Bank chairman; requires that staff are dedicated exclusively to
small business transactions; creates a small business committee
within Ex-Im to coordinate division functions with other small
business-related activities at the Bank; requires reports
related to fees charged by the Bank to small business clients
and related to Ex-Im's efforts to meet its quota for small
business transactions; and creates a ``delegated lender''
program for medium term financing for small businesses.
Section 5. Office of financing for socially and economically
disadvantaged small business concerns and small business
concerns owned by women
This section creates an office within the small business
division charged with expanding Ex-Im's outreach to women and
minority-owned businesses and establishes a goal that 15
percent of small business lending be directed to such
businesses. Section 5 also includes a related reporting
requirement.
Section 6. Sub-Saharan Africa
This section reauthorizes the Sub-Saharan Africa advisory
committee through September 30, 2011; requires the Bank to
expand working relationships with financial and other
institutions--including other United States agencies--in Sub-
Saharan Africa in order to increase its export financing in the
region; and requires greater flexibility by the Bank in its
underwriting criteria and financing terms in Sub-Saharan
Africa, to include more frequent use of local currency finance.
Section 7. Extension of authority
This section extends Public Law 103-428 through September
30, 2011. This authority, created in 1994, authorizes Ex-Im
financing of export sales of nonlethal defense articles or
services whose primary end use will be for civilian purposes,
provided certain reporting and funding conditions are met.
Section 8. Transparency initiatives
This section requires Board action on applications that
have been subject to an economic impact analysis; requires
biweekly Board meetings; creates notification requirements to
keep Ex-Im loan applicants informed of their status; calls for
a report on technology made available by Ex-Im to assist small
business applicants; and requires public disclosure of
environmental impact assessments.
Section 9. Effect of the bank on the budget of the United States
This section requires a report to Congress on the Bank's
impact on the federal budget.
Section 10. Competitiveness initiatives
This section initiates new requirements intended to make
the Bank more competitive in relation to other nations' export
credit agencies (ECA's). To that end, Section 10 expands the
scope of Ex-Im's annual competitiveness report to include China
and other emerging economies; adds reporting requirements on
co-financing, after-market services, and renewable energy;
requires a Board vote on the competitiveness report and allows
for the publication of dissenting views; gives the Bank
authority over the procedures used to determine uses of the
Tied Aid Credit Fund; requires congressional notification when
the President has decided to block a proposed use of the Tied
Aid Credit Fund; adds China and other non-OECD countries to the
list of nations Ex-Im is required to be competitive with;
authorizes the creation of a mixed credit financing facility to
increase the Bank's competitiveness in developing markets; and
establishes U.S. policy for purposes of negotiating
international standards on export finance.
Section 11. Consideration of environmental matters by the advisory
committee
This section adds two representatives of the environmental
nongovernmental organization community to Ex-Im's advisory
committee.
Section 12. Study of how export-import bank could assist United States
exporters to meet import needs of new or impoverished
democracies; reports
This section calls for a study of the needs of new or
impoverished democracies for imports from the United States and
the role Ex-Im can play in helping U.S. exporters meet those
needs.
Section 13. Review of environmental screening requirement
This section calls for a report on the implications of
limiting the requirement to conduct environmental screenings of
projects proposed to be financed by the Bank to only those
involving at least $10,000,000.
Section 14. Office of renewable energy promotion
This section establishes an Office of Renewable Energy
responsible for identifying new opportunities for renewable
energy financing and calls for an annual report that details
the activities of the office and compares the credit granted
for renewable energy projects from year to year.
Section 15. Transparency
This section requires the Bank to consider in its economic
impact analyses the effects of loans and guarantees on
industries and employment in the U.S. This section also
establishes notice and comment requirements and a deadline for
the publication of the conclusions of economic impact analyses.
Section 16. Anti-circumvention
This section establishes protections against circumvention
of trade law applicable to grantees of Bank loans and
guarantees.
Section 17. Performance standards applicable to bank assistance for
small businesses, especially those owned by social and
economically disadvantaged individuals and those owned by women
This section requires the development of performance
standards to determine the extent to which the Bank has
successfully provided assistance to small businesses owned by
women as well as socially and economically disadvantaged
individuals. Section 17 also mandates an annual report to
Congress on the Bank's progress.
Section 18. Prohibition on assistance to develop or promote any rail
connections or railway-related connections that transverse or
connect Baku, Azerbaijan, Tbilisi, Georgia, and Kars, Turkey,
and that specifically exclude cities in Armenia
This section prohibits the Bank from providing any
guarantees, insurance or extensions of credit to any railway
project that specifically excludes Armenia.
Section 19. Technical corrections
This section makes technical corrections to the Export-
Impact Bank Act of 1945 pertaining to that Section which
concerns Marxist-Lenin Countries.
Section 20. Effective date
This section designates October 1, 2006, as the effective
date for the amendments made by this Act.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
EXPORT-IMPORT BANK ACT OF 1945
Sec. 2. (a) * * *
(b)(1)(A) It is the policy of the United States to foster
expansion of exports of manufactured goods, agricultural
products, and other goods and services, thereby contributing to
the promotion and maintenance of high levels of employment and
real income, a commitment to reinvestment and job creation, and
the increased development of the productive resources of the
United States. To meet this objective in all its programs, the
Export-Import Bank is directed, in the exercise of its
functions, to provide guarantees, insurance, and extensions of
credit at rates and on terms and other conditions which are
fully competitive with the Government-supported rates and terms
and other conditions available for the financing of exports of
goods and services from the principal countries whose exporters
compete with United States exporters, including countries the
governments of which are not members of the Arrangement (as
defined in section 10(h)(3)). The Bank shall, in cooperation
with the export financing instrumentalities of other
governments, seek to minimize competition in Government-
supported export financing and shall, in cooperation with other
appropriate United States Government agencies, seek to reach
international agreements to reduce government subsidized export
financing. [The Bank shall, not later than June 30 of each
year, report to the appropriate committees of Congress its
actions in complying with these directives. In this report the
Bank shall include a survey of all other major export-financing
facilities available from other governments and government-
related agencies through which foreign exporters compete with
United States exporters (including through use of market
windows) and indicate in specific terms the ways in which the
Bank's rates, terms, and other conditions compare with those
offered from such other governments directly or indirectly.
With respect to the preceding sentence, the Bank shall use all
available information to estimate the annual amount of export
financing available from each government and government-related
agency. Further the Bank shall at the same time survey a
representative number of United States exporters and United
States commercial lending institutions which provide export
credit to determine their experience in meeting financial
competition from other countries whose exporters compete with
United States exporters. The results of this survey shall be
included as part of the annual report required by this
subparagraph. The Bank shall include in the annual report a
description of its role in the implementation of the strategic
plan prepared by the Trade Promotion Coordinating Committee in
accordance with section 2312 of the Export Enhancement Act of
1988. The annual report required under this subparagraph shall
include the report required under section 10(g). The Bank shall
include in the annual report a description of all Bank
transactions which shall be classified according to their
principal purpose, such as to correct a market failure or to
provide matching support. The Bank shall include in the annual
report a description of the efforts undertaken under
subparagraph (K).]
* * * * * * *
(E)(i)(I) * * *
(II) In exercising its authority, the Bank shall develop a
program which [gives fair consideration to making loans and
providing] makes loans and provides guarantees for the export
of goods and services by small [businesses] business concerns.
* * * * * * *
[(iii) In furtherance of this policy, the Board of Directors
shall designate an officer of the Bank who--
[(I) shall be responsible to the President of the
Bank for all matters concerning or affecting small
business concerns; and
[(II) among other duties, shall be responsible for
advising small business concerns of the opportunities
for small business concerns in the functions of the
Bank, with particular emphasis on conducting outreach
and increasing loans to socially and economically
disadvantaged small business concerns (as defined in
section 8(a)(4) of the Small Business Act), small
business concerns (as defined in section 3(a) of the
Small Business Act) owned by women, and small business
concerns (as defined in section 3(a) of the Small
Business Act) employing fewer than 100 employees, and
for maintaining liaison with the Small Business
Administration and other departments and agencies in
matters affecting small business concerns.)]
[(iv)] (iii) The Director appointed to represent the
interests of small business under section 3(c) of this Act
shall ensure that the Bank carries out its responsibilities
under [clauses (ii) and (iii) of this subparagraph] clause (ii)
and that the Bank's financial and other resources are, to the
maximum extent possible, appropriately used for small business
needs.
[(v)] (iv) To assure that the purposes of clauses (i) and
(ii) of this subparagraph are carried out, the Bank shall make
available, from the aggregate loan, guarantee, and insurance
authority available to it, an amount to finance exports
directly by small business concerns [(as defined under section
3 of the Small Business Act)] which shall be not less than 20
percent of such authority for each fiscal year. From the amount
made available under the preceding sentence, it shall be a goal
of the Bank to make available not less than 15 percent of the
amount to finance exports directly by small business concerns
referred to in section 3(f)(4)(A).
[(vi)] (v) The Bank shall utilize the amount set-aside
pursuant to [clause (v) of this subparagraph] clause (iv) to
offer financing for [small business exports] exports by small
business concerns on terms which are fully competitive with
regard to interest rates and with regard to the portion of
financing which may be provided, guaranteed, or insured.
Financing under this clause [(vi)] shall be available without
regard to whether financing for the particular transaction was
disapproved by any other Federal agency.
[(vii)] (vi)(I) The Bank shall utilize a part of the amount
set aside pursuant to clause [(v)] (iv) to provide lines of
credit or guarantees to consortia of small or medium size
banks, export trading companies, State export finance agencies,
export financing cooperatives, small business investment
companies (as defined in section 103 of the Small Business
Investment Act of 1958), or other financing institutions or
entities in order to finance [small business exports.] exports
by small business concerns. The Bank shall work in coordination
with the entities described in the preceding sentence to
streamline the processing of applications for Bank financing
from small business concerns and to provide training and advice
as required on the needs and benefits of export financing for
small business concerns.
(II) Financing under this clause [(vii)] shall be made
available only where the consortia or the participating
institutions agree to undertake processing, servicing, and
credit evaluation functions in connection with such financing.
(III) [To the maximum extent practicable, the] The Bank shall
delegate to the consortia the authority to approve financing
under this clause [(vii)].
(IV) In the administration of the program under this clause
[(vii)], the Bank shall provide appropriate technical
assistance to participating consortia and may require such
consortia periodically to furnish information to the Bank
regarding the number and amount of loans made and the
creditworthiness of the borrowers.
[(viii)] (vii) In order to assure that the policy stated in
clause (i) is carried out, the Bank shall promote [small
business exports] exports by small business concerns and its
small business export financing programs in cooperation with
the Secretary of Commerce, the Office of International Trade of
the Small Business Administration, and the private sector,
particularly small business organizations, State agencies,
chambers of commerce, banking organizations, export management
companies, export trading companies and private industry.
[(ix)] (viii) The Bank shall provide, through creditworthy
trade associations, export trading companies, State export
finance companies, export finance cooperatives, and other
multiple-exporter organizations, medium-term risk protection
coverage for the members and clients of such organizations.
Such coverage shall be made available to each such organization
under a single risk protection policy covering its members or
clients. Nothing in this provision shall be interpreted as
limiting the Bank's authority to deny support for specific
transactions or to disapprove a request by such an organization
to participate in such coverage.
[(x)] (ix) The Bank shall implement technology improvements
that are designed to improve small business outreach, including
allowing customers to use the Internet to apply for the Bank's
small business programs.
(x) In this subparagraph, the term ``small business concern''
shall have the meaning established under section 3(a) of the
Small Business Act.
* * * * * * *
(2) Prohibition on Aid to Marxist-Leninist Countries.--
(A) * * *
(B) Marxist-Leninist country defined.--
(i) * * *
(ii) Specific countries deemed to be marxist-
leninist.--Unless otherwise determined by the
President in accordance with subparagraph (C),
the following countries are deemed to be
Marxist-Leninist countries for purposes of this
paragraph:
[(I) Cambodian People's Republic.]
[(II)] (I) Democratic People's
Republic of Korea.
[(III) Democratic Republic of
Afghanistan.]
[(IV)] (II) Lao People's Democratic
Republic.
[(V)] (III) People's Republic of
China.
[(VI)] (IV) Republic of Cuba.
[(VII) Socialist Federal Republic of
Yugoslavia.
[(VIII) Socialist Republic of
Vietnam.
[(IX) Tibet.]
* * * * * * *
(9)(A) * * *
(B)(i) * * *
* * * * * * *
(iii) The advisory committee shall terminate on September 30,
[2006] 2011.
* * * * * * *
(C) The Bank shall include in the annual report to the
Congress submitted under section 8(a) a separate section that
contains a report on the efforts of the Bank to improve working
relationships with the African Development Bank, the Africa
Export-Import Bank, and other institutions in the region that
are relevant to the purposes of subparagraph (A) of this
paragraph.
(D) The Bank shall closely coordinate with the United States
Foreign Commercial Service and with the overall strategy of the
United States Government, for economic engagement with Africa
pursuant to the African Growth and Opportunity Act.
(E) The Bank shall develop initiatives to train Foreign
Service and Commercial Service officers serving at United State
embassies in Africa, in the use of Bank programs, so the
officers can encourage African buyers to take part in
transactions supported by the Bank.
(F) Consistent with the requirement that the Bank obtain a
reasonable assurance of repayment in connection with each
transaction the Bank supports, the Bank shall, in consultation
with the entities described in subparagraph (C), seek greater
flexibility in the due-diligence procedures of the Bank for the
purpose of qualifying a greater number of appropriate African
entities for participation in programs of the Bank.
(G) The Bank shall develop procedures under which the Bank is
capable of financing certain African programs in local
currencies.
* * * * * * *
(13) The Bank shall not guarantee, insure, extend credit, or
participate in an extension of credit in connection with the
development or promotion of any rail connections or railway-
related connections that do not traverse or connect with
Armenia, and do traverse or connect Baku, Azerbaijan, Tbilisi,
Georgia, and Kars, Turkey.
* * * * * * *
(e) Limitation on Assistance Which Adversely Affect the
United States.--
(1) In general.--The Bank may not extend any direct
credit of financial guarantee for establishing or
expanding production of any commodity for export by any
country other than the United States, if--
(A) the Bank determines that--
(i) the commodity is likely to be in
surplus on world markets at the time
the resulting commodity will first be
sold; or
(ii) the resulting production
capacity is expected to compete with
United States production of the same,
similar, or competing commodity; and
(B) the Bank determines that the extension of
such credit or guarantee will cause substantial
injury to United States producers of the same,
similar, or competing commodity.
In making the determination under subparagraph (B), the
Bank shall determine whether the facility that would
benefit from the extension of a credit or guarantee is
reasonably likely to produce products in addition to or
other than the product specified in the application and
whether the production of the products may cause
substantial injury to United States producers of the
same, or a similar or competing, commodity.
(2) Outstanding orders and preliminary injury
determinations.--
(A) * * *
* * * * * * *
(C) Comment period.--The Bank shall establish
procedures under which the Bank shall notify
interested parties and provide a comment period
of not less than 14 days (which, on request of
any affected party, shall be extended to a
period of not more than 30 days) with regard to
loans or guarantees reviewed pursuant to
subparagraph (B) or (D).
* * * * * * *
(E) Anti-circumvention.--The Bank shall not
provide a loan or guarantee if the Bank
determines that providing the loan or guarantee
will facilitate circumvention of a trade law
order or determination referred to in
subparagraph (A).
* * * * * * *
(5) Board vote required.--Within 60 days after
completing a review, pursuant to this subsection, of a
proposed loan or guarantee (including any applicable
comment period), the Board of Directors shall hold a
vote to determine whether or not to proceed with the
proposed loan or guarantee, unless the applicant has
withdrawn the application for the loan or guarantee.
(6) Procedures to reduce adverse effects of loans and
guarantees on industries and employment in united
states.--
(A) Consideration of economic effects of
proposed transactions.--If, in making a
determination under this paragraph with respect
to a loan or guarantee, the Bank conducts a
detailed economic impact analysis or similar
study, the analysis or study, as the case may
be, shall include consideration of--
(i) the factors set forth in
subparagraphs (A) and (B) of paragraph
(1); and
(ii) the views of the public and
interested parties.
(B) Notice and comment requirements.--
(i) In general.--If, in making a
determination under this subsection
with respect to a loan or guarantee,
the Bank intends to conduct a detailed
economic impact analysis or similar
study, the Bank shall cause to be
published in the Federal Register a
notice of the intent, and provide a
period of not less than 14 days (which,
on request by any affected party, shall
be extended to a period of not more
than 30 days) for the submission to the
Bank of comments on the economic
effects of the provision of the loan or
guarantee. In addition, the Bank shall
seek comments on the effects from the
Department of Commerce, the
International Trade Commission, the
Office of Management and Budget, the
Committee on Banking, Housing, and
Urban Affairs of the Senate, and the
Committee on Financial Services of the
House of Representatives.
(ii) Content of notice.--The notice
shall include appropriate,
nonproprietary information about--
(I) the name of the
applicant;
(II) the country to which the
goods involved in the
transaction will be shipped;
(III) the type of goods being
exported;
(IV) the amount of the loan
or guarantee involved;
(V) the goods that would be
produced as a result of the
provision of the loan or
guarantee;
(VI) the amount of increased
production that will result
from the transaction;
(VII) the potential sales
market for the resulting goods;
(VIII) the value of the
transaction; and
(IX) any other relevant
information.
(iii) Procedure regarding materially
changed applications.--
(I) In general.--If a
material change is made to an
application for a loan or
guarantee from the Bank after a
notice with respect to the
intent described in clause (i)
is published under this
subparagraph, the Bank shall
cause to be published in the
Federal Register a revised
notice of the intent, and shall
provide for a comment period,
as provided in clauses (i) and
(ii).
(II) Material change
defined.--In subclause (I), the
term ``material change'', with
respect to an application,
includes--
(aa) a change of at
least 25 percent in the
amount of a loan or
guarantee requested in
the application; and
(bb) a change in the
principal product to be
produced as a result of
any transaction that
would be facilitated by
the provision of the
loan or guarantee.
(C) Requirement to consider and address views
of adversely affected persons.--Before taking
final action on an application for a loan or
guarantee from the Bank to which this
subsection applies, the Bank shall consider and
address in writing the views of any person who
may be substantially adversely affected by the
provision of the loan or guarantee.
(D) Publication of conclusions.--Within 30
days after a party affected by a final decision
of the Board of Directors with respect to a
loan or guarantee makes a written request
therefor, the Bank shall provide to the
affected party a non-confidential summary of
the facts found and conclusions reached in any
detailed economic impact analysis or similar
study conducted pursuant to subparagraph (B)
with respect to the loan or guarantee, that
were submitted to the Board of Directors.
(E) Rule of interpretation.--This paragraph
shall not be construed to make subchapter II of
chapter 5 of title 5, United States Code,
applicable to the Bank.
(F) Regulations.--The Bank shall implement
such regulations and procedures as may be
appropriate to carry out this paragraph.
(7) Financial threshold determinations.--For purposes
of determining whether a proposed transaction exceeds a
financial threshold under this subsection or under the
procedures or rules of the Bank, the Bank shall
aggregate the dollar amount of the proposed transaction
and the dollar amounts of all loans and guarantees,
approved by the Bank in the preceding 24-month period,
that involved the same foreign entity and substantially
the same product to be produced.
* * * * * * *
(g) Process for Notifying Applicants of Application Status.--
The Bank shall establish and adhere to a clearly defined
process for--
(1) acknowledging receipt of applications;
(2) informing applicants that their applications are
complete or, if incomplete or containing a minor
defect, of the additional material or changes that, if
supplied or made, would make the application eligible
for consideration; and
(3) keeping applicants informed of the status of
their applications, including a clear and timely
notification of approval or disapproval, and, in the
case of disapproval, the reason for disapproval, as
appropriate.
(h) Response to Application for Financing; Implementation of
Online Loan Request and Tracking Process.--Within 5 days after
receipt of an application for financing from the Bank, the Bank
shall notify the applicant that the application has been
received, and shall include in the notice a request for such
additional information as may be necessary to make the
application complete, the name of a Bank employee who may be
contacted with questions relating to the application, and a
unique identification number which may be used to review the
status of the application at a website established as provided
in the next sentence. Not later than September 1, 2006, the
Bank shall use the authorities provided by subparagraphs
(E)(ix) and (J) of subsection (b)(1) of this section to
establish, and thereafter to maintain, a website through which
any Bank product may be applied for, information may be
obtained about the status of any such application, about the
small business division of the Bank, or about incentives,
preferences, targets, and goals relating to small business
concerns referred to in section 3(f)(4)(A) or small business
concerns exporting to Africa.
Sec. 3. (a) * * *
* * * * * * *
(c)(1) * * *
* * * * * * *
(9) The Board of Directors shall meet not less frequently
than biweekly.
(10) At the request of any 2 members of the Board of
Directors, the Chairman shall place an item on the agenda for
consideration by the Board. Within 30 days after the date such
a request is made, the Chairman shall hold a meeting of the
Board at which the item will be considered.
(d)(1)(A) There is established an Advisory Committee to
consist of [15] 17 members who shall be appointed by the Board
of Directors on the recommendation of the President of the
Bank.
(B) Such members shall be broadly representative of
environment, production, commerce, finance, agriculture, labor,
services, and State government.
(2)(A) * * *
* * * * * * *
(C) Not less than 2 members appointed to the Advisory
Committee shall be representative of the environmental
nongovernmental organization community, except that no 2 of the
members shall be from the same environmental organization.
Environmental organizations represented shall have demonstrated
experience with environmental issues associated with the Bank,
the Export Credit Group of the Organization for Economic
Cooperation and Development, or both.
* * * * * * *
(f) Small Business Division.--
(1) Establishment.--The President of the Bank shall
establish and maintain a division of the Bank whose
sole functions shall be to--
(A) carry out subparagraphs (E) and (I) of
section 2(b)(1), as such subparagraphs relate
to outreach, feedback, product improvement, and
transaction advocacy for small business
concerns;
(B) advise and seek feedback from small
business concerns of the opportunities and
benefits for small business concerns in the
financing products offered by the Bank, with
particular emphasis on conducting outreach,
better tailoring products to small business
needs and increasing loans to small business
concerns employing fewer than 100 employees;
and
(C) maintain liaison with the Small Business
Administration and other departments and
agencies in matters affecting small business
concerns.
(2) Management.--The division shall be managed by a
Bank officer designated by the Board of Directors--
(A) who shall have substantial recent
experience in financing exports by small
business concerns;
(B) whose sole executive duty shall be to
ensure that the division carries out the
functions of the division;
(C) who shall advise the Board, particularly
the Director appointed under section 3(c)(8)(B)
to represent the interests of small business,
on matters of interest to, and concern for,
small business;
(D) who shall rank not lower than senior vice
president of the Bank; and
(E) who shall report directly to the
President of the Bank.
(3) Resources.--
(A) In general.--The President of the Bank
shall ensure that the division has sufficient
qualified staff and budgetary resources to
carry out subparagraphs (E) and (I) of section
2(b)(1), as determined annually by the
President of the Bank, after consultation
with--
(i) the officer referred to in
paragraph (2) of this subsection;
(ii) the Director appointed under
subsection (c)(8)(B) of this section;
(iii) the Committee on Financial
Services of the House of
Representatives; and
(iv) the Committee on Banking,
Housing, and Urban Affairs of the
Senate.
(B) Uses.--
(i) In general.--The President of the
Bank shall ensure that the staff and
budgetary resources of the division are
devoted solely to carrying out the
functions of the division.
(ii) Certain staff duties.--The
division shall include staff dedicated
exclusively to providing outreach,
training, and advice to, seeking
feedback from, and advocating on behalf
of small business concerns regarding
Bank financing opportunities, products,
and programs.
(C) Rule of interpretation.--Nothing in this
Act shall be construed to prevent the
delegation to the division of any authority
necessary to carry out subparagraphs (E) and
(I) of section 2(b)(1).
(4) Office of financing for socially and economically
disadvantaged small business concerns and small
business concerns owned by women.--
(A) Establishment.--The President of the Bank
shall establish in the division an office whose
sole functions shall be to continue and enhance
the outreach activities of the Bank with
respect to, and increase the total amount of
loans, guarantees, and insurance provided by
the Bank to support exports by, socially and
economically disadvantaged small business
concerns (as defined in section 8(a)(4) of the
Small Business Act) and small business concerns
owned by women.
(B) Management.--The office shall be managed
by a Bank officer of appropriate rank who shall
report to the Bank officer designated under
section 3(f)(2).
(C) Staffing.--To the maximum extent
practicable, the President of the Bank shall
ensure that qualified minority and women
applicants are considered when filling any
position in the office.
(5) Small business concern defined.--In this
subsection and subsections (g) and (h), the term
``small business concern'' shall have the meaning
established under section 3(a) of the Small Business
Act.
(g) Handling of Applications of, and Processing of
Transactions Involving Small Business Concerns.--Consistent
with the requirement that the Bank obtain a reasonable
assurance of repayment for each transaction the Bank supports,
the Bank shall establish and maintain transaction standards
tailored to the special circumstances of small business
concerns and shall use the standards in evaluating applications
by the concerns for Bank financing. The Bank shall ensure that
each appropriate division of the Bank has staff dedicated to
the processing of transactions involving small business
concerns.
(h) Small Business Committee.--
(1) Establishment.--The Bank shall establish and
maintain a committee to be known as the ``Small
Business Committee''.
(2) Principal purpose.--The principal purpose of the
Small Business Committee shall be to focus on small
business concerns and coordinate the efforts of the
Bank with respect to small business concerns, including
the timely processing of small business product
applications and the evolution of new or improved Bank
products to better serve small business needs.
(3) Composition.--
(A) Chairman.--The chairman of the Small
Business Committee shall be the Senior Vice
President of the Bank who is responsible for
management of the Small Business Division of
the Bank.
(B) Other members.--The President of the Bank
shall ensure that the committee is comprised of
officers and employees throughout the Bank that
have responsibility for outreach and processing
transactions involving small business concerns.
(4) Reports.--The Small Business Committee shall
report to the President of the Bank.
(i) Office of Renewable Energy Promotion.--
(1) Establishment.--Within 1 year after the date of
the enactment of this subsection, the President of the
Bank shall establish and maintain in the Bank an office
which shall be known as the ``Office of Renewable
Energy Promotion'' (in this subsection referred to as
the ``Office'').
(2) Functions.--The Office shall be responsible for
proactively identifying new opportunities for renewable
energy financing and carrying out section 2(b)(1)(K).
In carrying out its function of promoting renewable
energy technologies, the Office should, among other
things, consider the recommendations made by the
Renewable Energy Export Advisory Committee.
(3) Staff.--The President of the Bank shall ensure
that the Office has staff with appropriate expertise in
renewable energy technologies.
(4) Annual reports.--The Bank shall submit annually
to the Committee on Resources and the Committee on
Financial Services of the House of Representatives, and
to the Committee on Banking, Housing, and Urban Affairs
of the Senate, a report that contains, for the fiscal
year covered by the report--
(A) a detailed description of the activities
of the Office; and
(B) an analysis comparing the level of credit
extended by the Bank for renewable energy
projects with the level of credit so extended
for the preceding fiscal year.
(5) Renewable energy technologies defined.--In this
subsection, the term ``renewable energy technologies''
means technologies for producing power through the use
of solar energy, wind energy, and energy from biomass,
fuel cells, or geothermal sources, and technologies for
producing less than 10 megawatts in hydropower.
* * * * * * *
Sec. 7. The Export-Import Bank of the United States shall
continue to exercise its functions in connection with and in
furtherance of its object and purposes until the close of
business on September 30, [2006] 2011, but the provisions of
this section shall not be construed as preventing the Bank from
acquiring obligations prior to such date which mature
subsequent to such date or from assuming prior to such date
liability as guarantor, endorser, or acceptor of obligations
which mature subsequent to such date, or from issuing either
prior or subsequent to such date, for purchase by the Secretary
of the Treasury or any other purchasers, its notes, debentures,
bonds, or other obligations which mature subsequent to such
date or from continuing as a corporate agency of the United
States and exercising any of its functions subsequent to such
date for purposes of orderly liquidation, including the
administration of its assets and the collection of any
obligations held by the Bank.
Sec. 8. (a) * * *
(b)(1) * * *
(2) Such report shall specify--
(A) * * *
(B) the number and dollar volume of loans made
through the consortia program under section
[2(b)(1)(E)(vii)] 2(b)(1)(E)(vi);
* * * * * * *
[(c) Technology To Assist Small Businesses.--The Bank shall
include in its annual report to the Congress under subsection
(a) of this section for each of fiscal years 2002 through 2006
a report on the efforts made by the Bank to carry out
subparagraphs (E)(x) and (J) of section 2(b)(1) of this Act,
and on how the efforts are assisting small business concerns
(as defined in section 3(a) of the Small Business Act).]
(c) Technology to Assist Small Businesses.--The Bank shall
include in its annual report to the Congress under subsection
(a) of this section for each of fiscal years 2007 through 2011
a separate section that contains--
(1) a report on the efforts made by the Bank to carry
out subparagraphs (E)(ix) and (J) of section 2(b)(1) of
this Act, the total amount expended in the fiscal year
to do so, and how the efforts are assisting small
business concerns (as defined under section 3(a) of the
Small Business Act); and
(2) if the Bank has been unable to comply fully with
such subparagraphs--
(A) an analysis of the reasons therefor;
(B) a description of what the Bank is doing
to achieve, and the date by which the Banks
expects to have achieved, such full compliance;
and
(C) the name of each Bank officer who is
responsible for ensuring that the Bank
achieves, and the name of the person to whom
the Bank officer reports on progress in
achieving, such full compliance.
* * * * * * *
(f) Report on Fees Charged to, and Transactions Costs
Incurred by, Small and Medium Business for Bank Services.--The
Bank shall submit to the Congress annually, and include in a
separate section of the annual report to the Congress under
subsection (a) of this section, a report on--
(1) with respect to each type of transaction, the
interest and fees charged by the Bank to exporters
(including a description of fees and interest, if any,
charged to small business concerns), buyers, and other
applicants in connection with each financing program of
the Bank, and the highest, lowest, and average fees
charged by the Bank for short term insurance
transactions;
(2) the effects of the fees on the ability of the
Bank to achieve the objectives of the Bank relating to
small business; and
(3) the fee structure of the Bank as compared with
that of other foreign export credit agencies.
(g) Report on Financing Directed Toward Small Business.--The
Bank shall submit annually to the Committees on Financial
Services and on Small Business of the House of
Representatives--
(1) a report on the extent to which the Bank has been
able to use the authorities referred to in section
2(b)(1)(E)(iv), and to finance exports by small
business concerns referred to in section 3(f)(4)(A),
and, to the extent the Bank has been unable to fully do
so, a report on the obstacles to doing so and on what
the Bank is doing to overcome the obstacles;
(2) a report on the extent to which financing has
been made available to small business concerns to
enable them to participate in exports by major
contractor, including through access to the supply
chains of the contractors through direct or indirect
funding; and
(3) a strategic plan of action describing how, in the
upcoming year, the Bank will take specific measures to
achieve the small business objectives of the Bank,
including expanded outreach, product improvements, and
related actions.
(h) Report on Efforts to Support Exports by Small- and
Medium-Sized Businesses Owned by Women or Minorities.--Not
later than March 1 of each year, the Director appointed under
section 3(c)(8)(B) of this Act shall prepare and submit to the
Committee on Financial Services of the House of Representatives
and the Committee on Banking, Housing, and Urban Affairs of the
Senate, and the Bank shall include in a separate section of the
annual report submitted pursuant to subsection (a) of this
section, a written report that describes the progress made by
the Bank in supporting exports by socially and economically
disadvantaged small business concerns (as defined in section
8(a)(4) of the Small Business Act) and small business concerns
owned by women.
(i) Report on Involvement of the Bank and of Other Export
Credit Agencies in Regional Multi-Buyer Insurance Programs and
Working-Capital Guarantee Programs.--The Bank shall include in
its annual report to the Congress under subsection (a) of this
section a separate section that contains a report on--
(1) regional multi-buyer insurance programs and
working capital guarantee programs operated by,
through, or in conjunction with the Bank, which shall
include an analysis of the effectiveness of the
programs and of how effective the programs would be in
increasing export-related jobs in the United States if
the programs were larger;
(2) the size of similar programs of all other major
export-financing facilities available from other
governments and government-related agencies through
which foreign exporters compete with United States
exporters (including through use of market windows (as
defined in section 10(h)(7)); and
(3) as a detailed explanation, with respect to the
programs, of the working relationship between the Bank
and the Small Business Administration, the Department
of Commerce, and other United States Government
agencies concerned with increasing the number of
export-related jobs in the United States.
(j) Report on Achievement of Performance Standards Applicable
to Small Business Concerns, Socially and Economically
Disadvantaged Small Business Conerns, and Small Business
Concerns Owned by Women.--The Bank shall submit annually to the
Congress, and include in a separate section of the annual
report to the Congress under subsection (a) of this section, a
report on the extent to which the Bank has carried out
successfully subparagraphs (E) and (I) of section 2(b)(1), and
the functions described in subsections (f)(1)(A), (f)(4)(A),
and (h)(2) of section 3, of this Act, using the performance
standards and measuring rules developed pursuant to section
12(a) of the Export-Import Bank Reauthorization Act of 2006.
SEC. 8A. ANNUAL COMPETITIVENESS REPORT.
(a) In General.--Not later than June 30 of each year, the
Bank shall submit to the appropriate committees of the Congress
a report that includes the following:
(1) Actions of bank in providing financing on a
competitive basis, and to minimize competition in
government-supported export financing.--A description
of the actions of the Bank in complying with the 2nd
and 3rd sentences of section 2(b)(1)(A). In this part
of the report, the Bank shall include a survey of all
other major export-financing facilities available from
other governments and government-related agencies
through which foreign exporters compete with United
States exporters (including through use of market
windows (as defined in section 10(h)(7)) and indicate
in specific terms the ways in which the Bank's rates,
terms, and other conditions compare with those offered
from such other governments directly or indirectly.
With respect to the preceding sentence, the Bank shall
use all available information to estimate the annual
amount of export financing available from each such
government and government-related agency. In this part
of the report, the Bank shall include a survey of a
representative number of United States exporters and
United States commercial lending institutions which
provide export credit to determine the experience of
the exporters and institutions in meeting financial
competition from other countries whose exporters
compete with United States exporters.
(2) Role of bank in implementing strategic plan
prepared by the trade promotion coordinating
committee.--A description of the role of the Bank in
implementing the strategic plan prepared by the Trade
Promotion Coordinating Committee in accordance with
section 2312 of the Export Enhancement Act of 1988.
(3) Tied aid credit program and fund.--The report
required by section 10(g).
(4) Purpose of all bank transactions.--A description
of all Bank transactions which shall be classified
according to their principal purpose, such as to
correct a market failure or to provide matching
support.
(5) Efforts of bank to promote export of goods and
services related to renewable energy sources.--A
description of the efforts undertaken under section
2(b)(1)(K).
(6) Size of bank program account.--A separate section
which--
(A) compares the size of the Bank program
account with the size of the program accounts
of the other major export-financing facilities
referred to in paragraph (1); and
(B) makes recommendations with respect to the
relative size of the Bank program account,
based on factors including whether the size
differences are in the best interests of the
United States taxpayer.
(7) Co-financing programs of the bank and of other
export credit agencies.--A separate section which
describes the co-financing programs of the Bank and of
the other major export-financing facilities referred to
in paragraph (1), which shall include a list of which
countries with which the United States has in effect a
memorandum of understanding relating to export credit
agency co-financing and an explanation of why such a
memorandum is not in effect with the countries with
which such a memorandum is not in effect.
(8) After-market services support by the bank and by
other export credit agencies.--A separate section which
describes the participation of the Bank in providing
funding, guarantees, or insurance for after-market
services, which shall include appropriate information
on the involvement of the other major export-financing
facilities referred to in paragraph (1) in providing
such support for after-market services, and an
explanation of any differences among the facilities in
providing the support.
(9) Export finance cases not in compliance with the
arrangement.--Detailed information on cases of export
finance that are not in compliance with the Arrangement
(as defined in section 10(h)(3)) or that exploit
loopholes in the Arrangement for the purpose of
obtaining a commercial competitive advantage.
(10) Foreign export credit agency activities not
consistent with the wto agreement on subsidies and
countervailing measures.--A description of the extent
to which the activities of foreign export credit
agencies and other entities sponsored by a foreign
government, particularly those that are not members of
the Arrangement (as defined in section 10(h)(3)), are
not in compliance with the Arrangement and may not be
consistent with the terms of the Agreement on Subsidies
and Countervailing Measures referred to in section
101(d)(12) of the Uruguay Round Agreements Act (19
U.S.C. 3511(d)(12)), and a description of the actions
taken by the United States Government to address the
activities.
(b) Board Vote on Report Required.--The Board of Directors
shall vote to approve and shall sign each report required by
subsection (a).
(c) Inclusion of Dissenting Views, Etc.--Each report required
by subsection (a) shall include such dissenting views and
additional comments as any member of the Board of Directors may
submit to the Board for inclusion in the report.
* * * * * * *
TIED AID CREDIT PROGRAM AND FUND
Sec. 10. (a) Findings.--The Congress finds that--
(1) * * *
* * * * * * *
(5) the Bank has, at a minimum, the following [two] 3
tasks--
(A)(i) * * *
* * * * * * *
(iv) in order to bring untied aid within the
discipline of the Arrangement, the Bank should
consider initiating highly competitive
financial support when the Bank learns that
foreign untied aid offers will be made; [and]
* * * * * * *
(C) third, the Bank should support United
States exporters when the exporters face
foreign competition that is supported by
foreign export credit agencies or other
entities sponsored by a foreign government that
are not party to the Arrangement; and
(6) there should be established in the Bank a tied
aid program to target the export markets of those
countries including those that are not a party to the
Arrangement which make extensive use of tied aid or
partially untied aid credits for, or untied aid used to
promote exports as if it were tied aid, commercial
advantage for the purposes of--
(A) * * *
(B) facilitating efforts to negotiate,
establish, and enforce new or revised
comprehensive international arrangements
effectively restricting the use of tied aid and
partially untied aid credits, or untied aid
used to promote exports as if it were tied aid,
for commercial purposes; and
(C) promoting compliance with Arrangement
rules among foreign export credit agencies that
are not a party to the Arrangement,
and such program should be used aggressively for such
purposes.
(b) Establishment of Tied Aid Credit Program.--
(1) * * *
(2) Administration of program.--The tied aid credit
program shall be administrated by the Bank--
(A) [in consultation with the Secretary and]
in accordance with the principles, process, and
standards developed pursuant to paragraph (5)
of this subsection and the purposes described
in subsection (a)(5);
* * * * * * *
(5) Principles, process, and standards governing use
of the fund.--
(A) In general.--The [Secretary and the Bank
jointly] Bank shall develop a process for, and
the principles and standards to be used in,
determining how the amounts in the Tied Aid
Credit Fund could be used most effectively and
efficiently to carry out the purposes of
subsection (a)(6).
(B) Content of principles, process, and
standards.--
(i) Consideration of certain
principles and standards.--In
developing the principles and standards
referred to in subparagraph (A), the
[Secretary and the] Bank shall consider
administering the Tied Aid Credit Fund
in accordance with the following
principles and standards:
(I) The Tied Aid Credit Fund
should be used to leverage
multilateral negotiations to
restrict the scope for aid-
financed trade distortions
through new multilateral rules,
and to police existing rules,
and to bring into the
Arrangement those countries
that are not a party to the
Arrangement.
* * * * * * *
(III) Credible information
about an offer of foreign tied
aid will be required before the
Tied Aid Credit Fund is used to
offer specific terms to match
such an offer. In cases where
information about a specific
offer of foreign tied aid (or
untied aid used to promote
exports as if it were tied aid)
is not available in a timely
manner, or is unavailable
because the foreign export
credit agency involved is not
subject to the reporting
requirements under the
Arrangement, then the Bank may
decide to use the Tied Aid
Credit Fund based on credible
evidence of a history of such
offers under similar
circumstances or other forms of
credible evidence.
* * * * * * *
(ii) Conclusion.--Once the
principles, process and standards
referred to in subparagraph (A) are
followed, the final case-by-case
decisions on the use of the Tied Aid
Credit Fund shall be made by the Bank:
Provided however, That the Bank shall
not approve the extension of a proposed
tied aid credit if the President of the
United States determines, after
consulting with the President of the
Bank and the Secretary of the Treasury,
that the extension of the tied aid
credit would materially impede
achieving the purposes described in
subsection (a)(6). The President of the
United States shall notify the Congress
of such a determination within 30 days,
including an explanation for the
determination.
(C) Initial principles, process, and
standards.--As soon as is practicable but not
later than 6 months after the date of the
enactment of this paragraph, [the Secretary
and] the Bank shall submit to the Committee on
Financial Services of the House of
Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate a copy
of the principles, process, and standards
developed pursuant to subparagraph (A).
* * * * * * *
(E) Update and revision.--The [Secretary and
the Bank jointly] Bank should update and
revise, as needed, the principles, process, and
standards developed pursuant to subparagraph
(A), and, on doing so, shall submit to the
Committee on Financial Services of the House of
Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate a copy
of the principles, process, and standards so
updated and revised.
* * * * * * *
(i) Authority to Seek Use of Mixed Forms of Concessional
Financing.--For purposes of improving the effects of Bank
financing on development in tied aid eligible markets (as
defined under the Arrangement) and of improving the
competitiveness of the Bank in the markets, the Bank shall, in
consultation with United States government aid agencies and, as
appropriate, multilateral aid institutions, seek to establish,
consistent with the Arrangement, a mixed credit program
consisting of longer term financing and other forms of more
flexible repayment terms, financing of transactions in local
currencies, and other forms of concessional financing that
meets the needs of the product sector and foreign market
involved.
SEC. 11. ENVIRONMENTAL POLICY AND PROCEDURES.
(a) Environmental Effects Consideration.--
(1) In general.--Consistent with the objectives of
section 2(b)(1)(A), the Bank shall establish procedures
to take into account the potential beneficial and
adverse environmental effects of goods and services for
which support is requested under its direct lending and
guarantee programs. Such procedures shall provide for
the public disclosure of environmental assessments and
supplemental environmental reports required to be
submitted to the Bank, including remediation or
mitigation plans and procedures, and related monitoring
reports. The preceding sentence shall not be
interpreted to require the public disclosure of any
information described in section 1905 of title 18,
United States Code. Such procedures shall apply to any
transaction involving a project--
(A) * * *
* * * * * * *
----------
ACT OF OCTOBER 31, 1994
(Public Law 103-428)
AN ACT To authorize the Export-Import Bank of the United States to
provide financing for the export of nonlethal defense articles and
defense services the primary end use of which will be for civilian
purposes.
SECTION 1. AUTHORITY TO PROVIDE FINANCING FOR THE EXPORT OF NONLETHAL
DEFENSE ARTICLES OR SERVICES THE PRIMARY END USE OF
WHICH WILL BE FOR CIVILIAN PURPOSES.
(a) * * *
* * * * * * *
(c) Period of Effectiveness.--The amendments made by this
section shall remain in effect during the period beginning on
the date of enactment of this Act and ending on September 30,
[2001] 2011.
DISSENTING VIEWS
Mr. Chairman, Congress should reject H.R. 5068, the Export-
Import Reauthorization Act, for economic, constitutional, and
moral reasons. The Export-Import Bank (Eximbank) takes money
from American taxpayers to subsidize exports by American
companies. Of course, it is not just any company that receives
Eximbank support; the vast majority of Eximbank funds benefit
Enron-like outfits that must rely on political connections and
government subsidies to survive and/or multinational
corporations who can afford to support their own exports
without relying on the American taxpayer. In fact, according to
journalist Robert Novak, Enron itself received over $640
million in taxpayer-funded ``assistance'' from Eximbank. This
taxpayer-provided largesse no doubt helped postpone Enron's
inevitable day of reckoning.
It is not only bad economics to force working Americans,
small businesses, and entrepreneurs to subsidize the exports of
large corporations: it is also immoral. Redistribution from the
poor and middle class to the wealthy is the most indefensible
aspect of the welfare state, yet it is the most accepted form
of welfare. Mr. Chairman it never ceases to amaze me how
members who criticize welfare for the poor on moral and
constitutional grounds see no problem with the even more
objectionable programs that provide welfare for the rich.
The moral case against Eximbank is strengthened when one
considers that one of the governments which benefits most from
Eximbank funds is communist China. In fact, Eximbank actually
underwrites joint ventures with firms owned by the Chinese
government! Whatever one's position on trading with China, I
would hope all of us would agree that it is wrong to force
taxpayers to subsidize in any way this brutal regime.
Unfortunately, China is not an isolated case: Colombia and
Sudan benefit from taxpayer-subsidized trade, courtesy of the
Eximbank!
At a time when the Federal budget is running huge deficits
and Congress is once again preparing to raid the Social
Security and Medicare trust funds, does it really make sense to
use taxpayer funds to benefit future Enrons, Fortune 500
companies, and communist China?
One project funded by Eximbank in China is an $18 million
loan guarantee to expand steel manufacturing. This is not an
isolated example of how Eximbank helps foreign steel producers.
According to the most recent figures available, the five
countries with the greatest Eximbank exposure are all among the
top ten exporters of steel and/or steel products to the United
States. In fact, Eximbank provided almost $20 billion of U.S.
taxpayer support to these countries. Mr. Chairman, I find it
hard to see how taxing American steel producers to benefit
their foreign competitors strengthens the American economy.
Proponents of continued American support for the Eximbank
claim that the bank ``creates jobs'' and promotes economic
growth. However, this claim rests on a version of what the
great economist Henry Hazlitt called the ``broken window''
fallacy. When a hoodlum throws a rock through a store window,
it can be said he has contributed to the economy, as the store
owner will have to spend money having the window fixed. The
benefits to those who repaired the window are visible for all
to see, therefore it is easy to see the broken window as
economically beneficial. However, the ``benefits'' of the
broken window are revealed as an illusion when one takes into
account what is not seen: the businesses and workers who would
have benefited had the store owner not spent money repairing a
window, but rather had been free to spend his money as he
chose.
Similarly, the beneficiaries of Eximbank are visible to
all. What is not seen is the products that would have been
built, the businesses that would have been started, and the
jobs that would have been created had the funds used for the
Eximbank been left in the hands of consumers. Leaving the
resources in the private sector ensures the resources will be
put to the use most highly valued by individual consumers. In
contrast, when the government diverts resources into the public
sector via programs such as the Eximbank, their use in
determined by bureaucrats and politically powerful special
interests, resulting in a distorted market and a misallocation
of resources. By distorting the market and preventing resources
from achieving their highest valued use, Eximbank actually
costs Americans jobs and reduces America's standard of living!
Some supporters of this bill equate supporting Eximbank
with supporting ``free trade,'' and claim that opponents are
``protectionists'' and ``isolationists.'' Mr. Chairman, this is
nonsense, Eximbank has nothing to do with free trade. True free
trade involves the peaceful, voluntary exchange of goods across
borders, not forcing taxpayers to subsidize the exports of
politically powerful companies. Eximbank is not free trade, but
rather managed trade, where winners and losers are determined
by how well they please government bureaucrats instead of how
well they please consumers.
Finally, Mr. Chairman, I would like to remind my colleagues
that there is simply no constitutional justification for the
expenditure of funds on programs such as Eximbank. In fact, the
drafters of the Constitution would be horrified to think the
Federal Government was taking hard-earned money from the
American people in order to benefit the politically powerful.
In conclusion, Mr. Chairman, Eximbank distorts the market
by allowing government bureaucrats to make economic decisions
in place of individual consumers. Eximbank also violates basic
principles of morality, by forcing working Americans to
subsidize the trade of wealthy companies that could easily
afford to subsidize their own trade, as well as subsidizing
brutal governments like Red China and the Sudan. Eximbank also
violates the limitations on congressional power to take the
property of individual citizens and use it to benefit powerful
special interests. It is for these reasons that I urge my
colleagues to reject H.R. 5068, the Export-Import Bank
Reauthorization Act.
Ron Paul.
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