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H.R. 2072 (112th): Export-Import Bank Reauthorization Act of 2012


The text of the bill below is as of Sep 8, 2011 (Reported by House Committee).

Summary of this bill

Source: Wikipedia

The Export–Import Bank Reauthorization Act of 2012 amended the Export–Import Bank Act of 1945 to extend the termination of functions of the Export–Import Bank of the United States, which helps financing and insuring foreign purchases of United States goods for customers unable or unwilling to accept credit risk and to aid in creating and sustaining jobs in the United States by financing sales of U.S. produced exports to international buyers. The bill was signed into law on May 20, 2012 and moved the termination of the bank's functions date to September 30, 2014.

In addition to placing additional reporting requirements on the bank, it also ...


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Union Calendar No. 129

112th CONGRESS

1st Session

H. R. 2072

[Report No. 112–201]

IN THE HOUSE OF REPRESENTATIVES

June 1, 2011

(for himself, Mr. Bachus, Mr. Frank of Massachusetts, and Mrs. McCarthy of New York) introduced the following bill; which was referred to the Committee on Financial Services

September 8, 2011

Additional sponsors: Mr. Dold, Mrs. Biggert, Mr. Manzullo, Mr. David Scott of Georgia, Ms. Moore, and Mr. Hinojosa

September 8, 2011

Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed

Strike out all after the enacting clause and insert the part printed in italic

For text of introduced bill, see copy of bill as introduced on June 1, 2011


A BILL

To reauthorize the Export-Import Bank of the United States, and for other purposes.


1.

Short title; table of contents

(a)

Short title

This Act may be cited as the Securing American Jobs Through Exports Act of 2011.

(b)

Table of contents

The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. Findings; statement of purpose.

Sec. 3. Extension of authority.

Sec. 4. Limitations on outstanding loans, guarantees, and insurance.

Sec. 5. Content guidelines for the provision of bank financing.

Sec. 6. Improvement of method for calculating the effects of Bank financing on job creation and maintenance in the United States.

Sec. 7. Biennial audits of Bank transactions.

Sec. 8. Use of portion of Bank surplus to update information technology systems.

Sec. 9. Monitoring of default rates on Bank financing; reports on default rates.

Sec. 10. Sense of the Congress regarding Bank accountability.

Sec. 11. Sub-saharan africa advisory committee.

Sec. 12. Extension of authority to provide financing for the export of nonlethal defense articles or services the primary end use of which will be for civilian purposes.

Sec. 13. Elimination of obsolete provisions.

Sec. 14. Examination of bank support for small business.

Sec. 15. Categorization of purpose of loans and long-term guarantees in annual report.

Sec. 16. Disclosure requirement for board meetings.

Sec. 17. Modifications relating to the advisory committee.

Sec. 18. Financing for goods manufactured in the United States used in global textile and apparel supply chains.

Sec. 19. Prohibition on Bank assistance for project to be participated in by an entity that has recently engaged in certain prohibited activities with respect to Iran.

Sec. 20. Effective date.

2.

Findings; statement of purpose

(a)

Findings

The Congress finds as follows:

(1)

Export sales by United States companies are critical to national economic growth.

(2)

Increased demand for United States exports in emerging markets will help small and large companies maintain and create United States jobs.

(3)

The Export-Import Bank contributes to a stronger national economy by financing the export of United States goods and services in markets where private capital is limited or unavailable.

(4)

The Export-Import Bank of the United States does not compete with private sector lenders.

(5)

The Export-Import Bank of the United States helps finance United States exports to 183 countries.

(6)

A large percentage of global growth will be centered in markets served by the Export-Import Bank of the United States, and the Bank will be critical to helping United States companies compete for these opportunities.

(7)

Through its support for exports, in fiscal year 2010 the Export-Import Bank of the United States supported 227,000 American jobs at over 3,300 companies.

(8)

The Export-Import Bank of the United States helps to level the playing field for United States exporters by matching the financing that other governments provide to their exporters.

(9)

All the leading exporting nations have official export credit agencies that are used actively to support their exporters.

(10)

Through its insurance, loan, and loan guarantee products, the Export-Import Bank of the United States supports the promotion and maintenance of high levels of employment and real income and increased development of the productive resources of the United States.

(11)

The Export-Import Bank of the United States requires reasonable assurance of repayment for the transactions it authorizes, and the Bank closely monitors credit and other risks in its portfolio. The Bank prices transactions based on its risk assessment of the buyers.

(12)

Since 1934, the net loss rate for all long-, medium-, and short-term loans made by the Export-Import Bank of the United States is 1.5 percent.

(13)

The Export-Import Bank of the United States has been a self-sustaining institution since fiscal year 2008, and surpluses of the Bank are remitted to the United States Treasury. From fiscal years 2008 through 2010, the Bank generated a surplus of $551,000,000.

(14)

In fiscal year 2010, the Export-Import Bank of the United States provided a record $5,000,000,000 directly supporting United States small business exporters through 3,091 transactions, representing 20 percent of the total value of the Bank’s authorizations and nearly 88 percent of the total number of the Bank’s authorizations.

(b)

Statement of purpose

The purpose of this Act is to reauthorize the activities and operations of the Export-Import Bank of the United States to ensure that the Bank provides financing, when commercial banks are unable or unwilling to do so, competitive with the financing provided by foreign export credit agencies, in order to enable United States companies to contribute to a stronger national economy by maintaining or increasing the employment of workers in the United States through the export of goods and services.

3.

Extension of authority

Section 7 of the Export-Import Bank Act of 1945 (12 U.S.C. 635f) is amended by striking 2011 and inserting 2015.

4.

Limitations on outstanding loans, guarantees, and insurance

Section 6(a)(2) of the Export-Import Bank Act of 1945 (12 U.S.C. 635e(a)(2)) is amended—

(1)

in subparagraph (D), by striking and;

(2)

in subparagraph (E), by striking the comma at the end and inserting a semicolon; and

(3)

by adding at the end the following:

(F)

during fiscal year 2012, $120,000,000,000;

(G)

during fiscal year 2013, $140,000,000,000; and

(H)

during fiscal year 2014 and each fiscal year thereafter, $160,000,000,000.

.

5.

Content guidelines for the provision of bank financing

Section 2 of the Export-Import Bank Act of 1945 (12 U.S.C. 635) is amended by adding at the end the following:

(i)

Content guidelines for the provision of financing

(1)

In general

The Bank shall, after notice and comment and Board approval, establish clear and comprehensive guidelines with respect to the content of the goods and services involved in a transaction for which the Bank will provide financing, which shall be aimed at ensuring that the Bank enables companies with operations in the United States to maintain and create jobs in the United States and contribute to a stronger national economy through the export of their goods and services.

(2)

Required considerations

In establishing the guidelines, the Bank shall take into account such considerations as the Bank deems relevant to meet the purposes described in paragraph (1), including the following:

(A)

The needs of different industry sectors to obtain financing from the Bank for exporting their products or services in order to create and maintain jobs in the United States.

(B)

The ability of companies with operations in the United States to compete effectively for export opportunities that will create and maintain jobs in the United States, particularly with respect to the Bank’s content requirements and co-financing arrangements.

(C)

The totality of support, including financing and subsidies, extended by export credit agencies to support the exports of goods and services, as well as key differences in, types of trade-offs among, and national trade promotion strategies of OECD member countries and of non-OECD member countries.

(D)

Recommendations from the advisory committee established under section 3(d), including any dissenting views.

(E)

Any findings or recommendations of the Government Accountability Office pertaining to the ability of the Bank to provide financing that is competitive with the financing provided by foreign export credit agencies, to enable companies with operations in the United States to contribute to a stronger United States economy by maintaining or increasing the employment of workers in the United States through the export of goods and services.

(F)

The effects of the guidelines on the manufacturing workforce and service workforce of the United States.

(G)

The effect of changes to current Bank content requirements on the incentive for companies to create and maintain operations in the United States in order to increase the employment of workers in the United States.

(3)

Separate guidelines

(A)

The Bank may establish separate guidelines under this subsection for services and for goods.

(B)

The Bank may establish separate guidelines under this subsection for small business concerns (as defined in section 3(a) of the Small Business Act).

(C)

The Bank may continue separate guidelines under this subsection with respect to different terms and products.

(4)

Certification that domestic content has not been reduced because of the guidelines

In determining whether to provide financing for a proposed transaction, the exporter shall certify that the domestic content of a good has not been reduced solely as a result of the guidelines.

(5)

Procedural provisions

Within 60 days after the date of the enactment of this Act, the Bank shall publish a notice with respect to the issuance or modification of guidelines under this subsection. Within 60 days after the end of the public comment period otherwise required by law with respect to the issuance or modification of the guidelines, the Bank shall submit to the Congress, for its review, the guidelines in proposed final form. At the end of the 60-day period that begins with the date the proposed final guidelines are so submitted, the proposed final guidelines shall be considered a final agency action for all purposes and shall take effect and be implemented immediately.

(6)

Term

Every 2 years, the Bank shall review and, as appropriate, modify the guidelines, subject to paragraph (5).

(7)

Report to congress

Within 1 year after the implementation of new or modified guidelines under this subsection, the Inspector General of the Bank shall submit to the Congress a report evaluating the guidelines, which shall include—

(A)

a discussion of the considerations required to be taken into account in establishing the guidelines, a comparison of how the guidelines reflect each consideration, and a description of the extent to which the guidelines enabled companies with operations in the United States who submitted an application for financing from the Bank to maintain and create jobs in the United States and contribute to a stronger national economy through the export of their goods and services;

(B)

a description of the effect of the guidelines on the number of domestic jobs to be supported, the kinds of domestic jobs to be supported, including their duration and geographic location, and the existence and nature of any transfers of technology or production; and

(C)

recommendations for how the guidelines could be modified to better facilitate exports of goods and services from the United States in order to maintain and create jobs in the United States and contribute to a stronger national economy.

.

6.

Improvement of method for calculating the effects of Bank financing on job creation and maintenance in the United States

(a)

GAO study

The Comptroller General of the United States shall conduct a study to analyze the methodology used by the Export-Import Bank of the United States (in this section referred to as the Bank) to calculate the effects of the provision of financing by the Bank on the creation and maintenance of employment in the United States, determine whether there is a more accurate methodology for calculating the effects, and if so, make recommendations with respect to the use of such a methodology.

(b)

Report

Within 6 months after the date of the enactment of this Act, the Comptroller General shall submit to the Congress and the Bank the results of the study required by subsection (a).

(c)

Implementation of recommendations

If the report submitted pursuant to subsection (b) includes recommendations, the Bank may establish a more accurate methodology of the kind described in subsection (a) based on the recommendations.

7.

Biennial audits of Bank transactions

Section 2 of the Export-Import Bank Act of 1945 (12 U.S.C. 635), as amended by section 5 of this Act, is amended by adding at the end the following:

(j)

Audits of bank transactions

Every 2 years, the Comptroller General of the United States, in consultation with Inspector General of the Bank, shall audit a representative sample of Bank transactions to ensure that Bank underwriting, policies, due diligence, and content guidelines are met by applicants who receive Bank support.

.

8.

Use of portion of Bank surplus to update information technology systems

Section 3 of the Export-Import Bank Act of 1945 (12 U.S.C. 635a) is amended by adding at the end the following:

(j)

Authority to use portion of Bank surplus to update information technology systems

(1)

In general

Subject to paragraphs (3) and (4), the Bank may use an amount equal to 1.25 percent of the surplus of the Bank during each fiscal year to—

(A)

seek to remedy any of the operational weakness and risk management vulnerabilities of the Bank which are the result of the information technology system of the Bank;

(B)

remedy data fragmentation, enhance information flow throughout the Bank, and manage data across the Bank; and

(C)

enhance the operational capacity and risk management capabilities of the Bank to better enable the Bank to increase exports and grow jobs while protecting the taxpayer.

(2)

Surplus

In paragraph (1), the term surplus means the amount (if any) by which—

(A)

the sum of the interest and fees collected by the Bank; exceeds

(B)

the sum of—

(i)

the funds set aside to cover expected losses on transactions financed by the Bank; and

(ii)

the costs incurred to cover the administrative expenses of the Bank.

(3)

Limitation

The aggregate of the amounts used in accordance with paragraph (1) for all fiscal years shall not exceed $20,000,000.

(4)

Subject to appropriations

The authority provided by paragraph (1) may be exercised only to such extent and in such amounts as are provided in advance in appropriations Acts.

.

9.

Monitoring of default rates on Bank financing; reports on default rates

Section 8 of the Export-Import Bank Act of 1945 (12 U.S.C. 635g) is amended by adding at the end the following:

(g)

Monitoring of default rates on Bank financing; reports on default rates

(1)

Monitoring of default rates

Not less frequently than quarterly, the Bank shall calculate the rate at which the entities to which the Bank has provided short-, medium-, or long-term financing are in default on a payment obligation under the financing, by dividing the total amount of the required payments that are overdue by the total amount of the financing involved.

(2)

Reports

Within 45 days after a rate calculated under paragraph (1) equals or exceeds 2 percent, the Bank shall submit to the Congress a written report that explains the circumstances that have caused the default rate to equal or exceed 2 percent, and includes a plan to reduce the default rate to less than 2 percent.

.

10.

Sense of the Congress regarding Bank accountability

It is the sense of the Congress that—

(1)

the Board of Directors of the Export-Import Bank of the United States (in this section referred to as the Bank) should establish a formal, transparent, and independent accountability mechanism that would review, investigate, and report on allegations by affected parties of failure of the Bank to follow its own policies and procedures, including situations where the Bank is alleged to have failed in its follow-up on the borrower’s obligations in financing agreements with respect to such policies and procedures;

(2)

such an accountability mechanism should be able to provide advice to management on policies, procedures, guidelines, resources, and systems established to ensure adequate review and monitoring of projects;

(3)

in carrying out its mandate, the confidentiality of sensitive business information should be respected, and, in consultation with affected parties, project sponsors, and Bank management, a flexible process should be followed aimed primarily at correcting project failures and achieving better results on the ground; and

(4)

the accountability mechanism should be independent of the line operations of management, and report its findings and recommendations directly to the Board of Directors of the Bank.

11.

Sub-saharan africa 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 2011 and inserting 2015.

12.

Extension of authority to provide financing for the export of nonlethal defense articles or services the primary end use of which will be for civilian purposes

Section 1(c) of Public Law 103–428 (12 U.S.C. 635 note; 108 Stat. 4376) is amended by striking 2011 and inserting 2015.

13.

Elimination of obsolete provisions

(a)

Foreign credit insurance association

(1)

In general

Section 2(b)(1) of the Export-Import Bank Act of 1945 (12 U.S.C. 635(b)(1)) is amended by striking subparagraph (F) and redesignating subparagraphs (G) through (L) as subparagraphs (F) through (K), respectively.

(2)

Conforming amendments

(A)

Section 2(h)(2) of such Act (12 U.S.C. 635(h)(2)) is amended by striking (J) and inserting (I).

(B)

Section 3 of such Act (12 U.S.C. 635a) is amended in each of subsections (f)(1)(A) and (g)(7) by striking (I) and inserting (H).

(C)

Section 8 of such Act (12 U.S.C. 635g) is amended in each of subsections (c) and (f)(8)(A) by striking (J) and inserting (I).

(D)

Section 8A(a)(5) of such Act (12 U.S.C. 635g-1(a)(5)) is amended by striking 2(b)(1)(K) and inserting 2(b)(1)(J).

(b)

Definition of marxist-leninist country

Section 2(b)(2)(B)(ii) of such Act (12 U.S .C. 635(b)(2)(B)(ii)) is amended by striking subclause (VII) and redesignating subclauses (VIII) and (IX) as subclauses (VII) and (VIII), respectively.

14.

Examination of bank support for small business

Within 180 days after the date of the enactment of this Act, the Export-Import Bank of the United States shall examine and report to Congress on its current programs, products, and polices with respect to the implementation of its export credit insurance program, delegated lending authority, and direct loans, and any other programs, products, and policies established to support exports from small businesses in the United States, and determine the extent to which those policies adequately meet the needs of the small businesses in obtaining Bank financing to support the maintenance or creation of jobs in the United States through exports, consistent with the requirement that the Bank obtain a reasonable assurance of repayment.

15.

Categorization of purpose of loans and long-term guarantees in annual report

Section 8 of the Export-Import Bank Act of 1945 (12 U.S.C. 635g), as amended by section 9 of this Act, is amended by adding at the end the following:

(h)

Categorization of purpose of loans and long-Term guarantees

In the annual report of the Bank under subsection (a), the Bank shall categorize each loan and long-term guarantee made by the Bank in the fiscal year covered by the report, and according to the following purposes:

(1)

To assume commercial or political risk that exporter or private financial institutions are unwilling or unable to undertake.

(2)

To overcome maturity or other limitations in private sector export financing.

(3)

To meet competition from a foreign, officially sponsored, export credit competition.

(4)

Not identified, and the reason why the purpose is not identified.

.

16.

Disclosure requirement for board meetings

Section 3(c)(9) of the Export-Import Bank Act of 1945 (12 U.S.C. 635a(a)) is amended by adding at the end the following new sentence: Not later than 25 days before any meeting of the Board for final consideration of a transaction the value of which exceeds $75,000,000, and concurrent with any statement required to be submitted under section 2(b)(3) with respect to the transaction, the Bank shall post a notice on the website of the Bank that includes a description of the item proposed to be financed, the identities of the obligor, principal supplier, and guarantor, and a description of any item with respect to which Bank financing is being sought, in a manner that does not disclose any information that is confidential or proprietary business information, that would violate the Trade Secrets Act, or that would jeopardize jobs in the United States by supplying information which competitors could use to compete with companies in the United States..

17.

Modifications relating to the advisory committee

(a)

Representation of the textile industry

Section 3(d)(1)(B) of the Export-Import Bank Act of 1945 (12 U.S.C. 635a(d)(1)(B)) is amended by striking and State government inserting State government, and the textile industry.

(b)

Access to bank products by the textile industry

(1)

Consideration by advisory committee

Section 3(d) of such Act (12 U.S.C. 635a(d)) is amended by adding at the end the following:

(5)

In carrying out paragraph (4), the Advisory Committee shall consider ways to promote the financing of Bank transactions for the textile industry, consistent with the requirement that the Bank obtain a reasonable assurance of repayment, and determine ways to—

(A)

increase Bank support for the exports of textile components or inputs made in the United States; and

(B)

support the maintenance, promotion and expansion of jobs in the United States that are critical to the manufacture of textile components and inputs.

.

(2)

Annual report to congress on advisory committee determinations

Section 8 of such Act (12 U.S.C. 635g), as amended by the preceding provisions of this Act, is amended by adding at the end the following:

(i)

Access to bank products by the textile industry

The Bank shall include in its annual report to the Congress under subsection (a) of this section a report on the determinations made by the Advisory Committee under section 3(d)(5) in the year covered by the report.

.

18.

Financing for goods manufactured in the United States used in global textile and apparel supply chains

(a)

Analysis of textile industry use of bank products

The Export-Import Bank of the United States (in this section referred to as the Bank) shall conduct a study of the extent to which the products offered by the Bank are available and used by manufacturers in the United States that export goods manufactured in the United States used as components in global textile and apparel supply chains. In conducting the study, the Bank shall examine the following:

(1)

Impediments to use of Bank products by such firms.

(2)

The number of jobs in the United States that are supported by the export of such component parts and the degree to which access to financing will increase exports.

(3)

Specific proposals for how the Bank, using its authority and products, could provide the financing, including through risk-sharing with other export credit agencies and other third parties.

(4)

Ways in which the Bank can take into account the full global textile and apparel supply chain—in particular, the ultimate purchase, and ultimate United States-based purchaser, of the finished good, that would result from the supply chain—in making credit and risk determinations and the creditworthiness of the ultimate purchaser.

(5)

Proposals for new products the Bank could offer to provide the financing, including—

(A)

the extent to which the Bank is authorized to offer new products;

(B)

the extent to which the Bank would need additional authority to offer the new products; and

(C)

specific proposals for changes in law that would enable the Bank to provide such financing in compliance with the credit and risk standards of the Bank.

(b)

Report

Within 180 days after the date of the enactment of this Act, the Bank shall submit to the Congress a report that contains the results of the study required by subsection (a).

(c)

Annual reports

Section 8 of the Export-Import Bank Act of 1945 (12 U.S.C. 635g), as amended by the preceding provisions of this Act, is amended by adding at the end the following:

(j)

Textile and apparel supply chain financing

The Bank shall include in its annual report to the Congress under subsection (a) of this section a description of the success of the Bank in providing effective and reasonably priced financing to the United States textile and apparel industry for exports of goods manufactured in the United States that are used as components in global textile and apparel supply chains in the year covered by the report, and steps the Bank has taken to increase the use of Bank products by such firms.

.

19.

Prohibition on Bank assistance for project to be participated in by an entity that has recently engaged in certain prohibited activities with respect to Iran

The Export-Import Bank of the United States shall not guarantee, insure, or extend (or participate in an extension of) credit in connection with the export of any good or service for a person, unless the person has certified to the Bank that, since July 1, 2010, neither the person, nor any other person under common ownership or control with the person—

(1)

has engaged in any activity for which sanctions may be imposed under section 5(a) of the Iran Sanctions Act of 1996;

(2)

has provided sensitive technology (as defined in section 106(c) of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010) to the government of Iran; or

(3)

if the person is a United States person, has engaged in any activity prohibited by part 560 of title 31, Code of Federal Regulations (also known as the Iran Transaction Regulations).

20.

Effective date

This Act and the amendments made by this Act shall take effect on October 1, 2011.

September 8, 2011

Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed