[House Report 112-201]
[From the U.S. Government Publishing Office]
112th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 112-201
======================================================================
SECURING AMERICAN JOBS THROUGH EXPORTS ACT OF 2011
_______
September 8, 2011.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Bachus, from the Committee on Financial Services,
submitted the following
R E P O R T
[To accompany H.R. 2072]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred
the bill (H.R. 2072) to reauthorize the Export-Import Bank of
the United States, and for other purposes, having considered
the same, report favorably thereon with an amendment and
recommend that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 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.
SEC. 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.
SEC. 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''.
SEC. 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.''.
SEC. 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.''.
SEC. 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.
SEC. 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.''.
SEC. 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.''.
SEC. 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.''.
SEC. 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.
SEC. 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''.
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.
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''.
SEC. 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.
SEC. 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.
SEC. 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.''.
SEC. 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.''.
SEC. 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.''.
SEC. 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.''.
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.
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'').
SEC. 20. EFFECTIVE DATE.
This Act and the amendments made by this Act shall take effect on
October 1, 2011.
Purpose and Summary
H.R. 2072, the Securing American Jobs Through Exports Act
of 2011, would amend the Export-Import Bank Act of 1945 by
extending the authority of the Export-Import Bank of the United
States (the Bank) for four years, from 2011 to 2015. The
mission of the Export-Import Bank is to finance the export of
U.S. goods and services to create and maintain U.S. jobs. The
purpose of H.R. 2072 is to reauthorize the activities and
operations of the Bank so it may carry out its mission and in
so doing contribute to a stronger national economy.
Key provisions of H.R. 2072 include: (1) a four-year
reauthorization of the Export-Import Bank charter; (2) a
gradual increase in the Bank's financing authority from $100
billion to $160 billion; (3) a requirement that the Bank
establish clear and comprehensive guidelines regarding the type
and amount of content in a good or service eligible for Bank
financing; (4) authorization for the Bank to use up to $20
million of its surplus, subject to appropriations, to upgrade
its information technology system; and (5) a number of new
transparency and accountability requirements for the Bank.
The enhanced transparency and accountability requirements
included in H.R. 2072 would ensure that the Bank's default
rates remain low, its internal policies and procedures are
followed, and taxpayers are protected. Bank accountability
would be strengthened by requiring the Government
Accountability Office to conduct biennial audits of a
representative sample of Bank transactions. The Bank would be
required to submit a report to Congress if its default rate
equals or exceeds two percent, with a written explanation of
why the rate increased and a plan to reduce the rate to less
than 2 percent. The Bank would be encouraged to establish a
formal, transparent, and independent mechanism for affected
parties to hold the Bank accountable for noncompliance with its
internal policies and procedures. The Bank would be required to
post on its website short descriptions of proposed transactions
that equal or exceed $75 million no later than 25 days before
final consideration by the Board. In addition, in its Annual
Report the Bank would provide a justification for each long-
term loan and guarantee transaction it supports. Finally, the
bill includes a prohibition on Bank assistance unless entities
certify they have not recently engaged in prohibited activities
with Iran.
Background and Need for Legislation
H.R. 2072 was introduced by Rep. Gary Miller, the Chairman
of the Subcommittee on International Monetary Policy and Trade,
to amend and reauthorize the charter of the Export Import Bank
of the United States (the Bank). The charter under which the
Bank operates is set to expire on September 30, 2011.
Reauthorization is necessary to ensure that the Bank's support
of small and large U.S. companies seeking to export their
products can continue uninterrupted in order to maintain and
create U.S. jobs.
The Bank was established by an Executive Order in 1934 and
was made an independent agency by Congress in 1945 (Public Law
79-173). The Bank is the official export credit agency (ECA) of
the United States and serves to promote the creation and
maintenance of U.S. jobs by providing direct loans, loan
guarantees, working capital guarantees, and export credit
insurance to exporters. During Fiscal Year 2010, the Bank
provided $24.5 billion in export financing and estimates that
227,000 jobs were created or maintained at more than 3,300
companies because of its programs. The Bank is a self-
sustaining organization and surplus revenue is remitted to the
U.S. Treasury. For Fiscal Years 2008 through 2010, the Bank
returned $551 million to the Department of the Treasury.
The Bank's policy is to supplement and encourage, and not
compete with, private capital. The Bank requires reasonable
assurance of repayment for all authorized transactions.
Transactions are based on the Bank's risk assessment of the
buyers, and since 1934 the net loss rate for all long, medium,
and short term loans made by the Bank is 1.5 percent.
Export sales by United States companies are critical to
national economic growth. A large percentage of future global
growth will occur in markets served by the Bank, and the Bank
will play a critical role in helping U.S. companies compete for
these opportunities. The Bank currently supports exports to 183
countries, and has focused its efforts on nine emerging market
nations where the Bank estimates there will be $3 trillion in
infrastructure investments in the next five years. Other
countries' ECAs, foreign governments, and foreign firms are
also focusing on these markets to gain and maintain market
share in these growing economies. Therefore, the Bank's
financing is essential to leveling the playing field for U.S.
firms seeking to export to these markets.
The Bank provides financial support to small businesses
through increased outreach efforts in local communities and
enhanced small business loan and insurance programs. Last year,
there were more than 700 first-time small business users of the
Bank's programs, while the Bank authorized $5 billion in
support of small business interests. In Fiscal Year 2010, 87
percent of the Bank's 3,532 transactions directly benefited
small businesses.
The Bank is subject to statutory restrictions and oversight
to safeguard its fiscal soundness, limit mismanagement, and
prevent corruption. The Bank's charter requires it to submit
annually a detailed report of its operations to Congress. In
addition, the Bank is required to report annually on its
support for small business and its competitiveness in
comparison to foreign ECAs.
Since the financial crisis of 2008, the Bank has been an
integral part of the U.S. effort to resuscitate the economy by
providing export credit financing when private capital is
limited or unavailable. At a time when demand for Bank support
is increasing, H.R. 2072 would ensure the Bank has the tools
and resources it needs to meet such demand, while effectively
mitigating risk. The Bank's volume continues to grow at a rate
of approximately $1 billion per month. To meet this demand,
H.R. 2072 would gradually increase the Bank's financing
authority from $100 billion to $160 billion. H.R. 2072 would
add new audit procedures, disclosure requirements, and enhanced
accountability mechanisms to ensure the continued success and
integrity of the Bank.
The Bank needs an information technology system upgrade to
keep up with its current rate of growth and to ensure sound
underwriting, and guard against fraud. H.R. 2072 would
authorize the Bank to use 1.25 percent of its annual surplus,
up to an aggregate of $20 million, to improve its information
technology system. The Bank's Inspector General testified that
the Bank needs to improve its information technology system to
better protect proprietary information, enhance underwriting,
and prevent fraud and abuse. The technology upgrade in H.R.
2072 would remedy operational weaknesses and risk management
vulnerabilities by enhancing information flow, managing data,
and enhancing the operational capacity of the Bank.
Currently, the Bank does not have a transparent process for
developing and implementing guidelines that detail the amount
of goods and services eligible for Bank financing. H.R. 2072
would direct the Bank to establish clear and comprehensive
guidelines for the type and amount of content in a good and
service that is eligible for bank financing. These guidelines
would be reviewed every two years and would be subject to a
notice and comment period so that all stakeholders can provide
feedback to the Bank. Proposed guidelines would also be sent to
Congress before they are implemented. The Bank's Inspector
General would report to Congress on guidelines within one year
of new or modified guidelines taking effect.
H.R. 2072 would also direct the Bank to assess how it can
serve additional industry sectors that demonstrate both
creditworthiness and the need for Bank assistance. In addition
to allowing the Bank to establish separate content guidelines
for service-industry exports, the legislation would encourage
the Bank to consider the needs of the textile industry. The
bill would direct the Bank's Advisory Committee, which meets
quarterly and advises the Bank on a range of issues, to expand
its focus to include the textile industry. The Advisory
Committee's findings would be included in the Bank's Annual
Report. In addition, the Bank would conduct a study examining
its financial assistance to the textile industry.
As a sense of Congress, the Committee urges the Bank to
work with all stakeholders to establish an accountability
mechanism, which can help decrease risk and provide stability
for successful and sustainable business enterprise. Such a
mechanism at the Bank should have two functions. One would be
to provide a conflict resolution process for affected people
seeking to solve problems with activities supported by the
Bank. The purpose of this function is to allow complainants and
the Ex-Im client to enter into a structured dialogue with the
help of a Bank mediator. This approach can address existing
complaints about real, perceived, or potential harm from Bank
activities, as well as prevent such harm from escalating or
occurring at all. The second function would be compliance
review, where a complainant may seek an independent review of
the Bank's operation to determine whether or not the Bank has
violated its own policies and procedures. Further, the
mechanism should operate independently of Bank management, in a
transparent manner with a public registry of complaints and
clear rules of procedure.
As the Bank supports increased U.S. exports, H.R. 2072
would ensure that the Bank remains accountable, that its
policies and procedures are followed, and ultimately the
taxpayer is protected.
Hearings
The Subcommittee on International Monetary Policy and Trade
held a hearing on March 10, 2011 entitled ``The Role of the
Export-Import Bank in U.S. Competitiveness and Job Creation.''
The following witnesses testified:
Mr. Karan Bhatia, Vice President and Senior
Counsel, General Electric
Mr. Scott Scherer, Senior Vice President,
Boeing Capital Corporation
Mr. David Ickert, Vice President of Finance,
Air Tractor, Inc.
Mr. Kevin Law, President & CEO, Long Island
Association
The Subcommittee on International Monetary Policy and Trade
held a hearing on May 24, 2011 entitled ``Legislative Proposals
on Securing American Jobs Through Exports: Export-Import Bank
Reauthorization.'' The following witnesses testified:
Panel One
The Honorable Fred Hochberg, Chairman and
President, the Export-Import Bank of the United States
Panel Two
Ms. Donna K. Alexander, Chief Executive
Officer, Bankers' Association for Finance and Trade--
International Financial Services Association (BAFT-
IFSA)
Ms. Thea Lee, Deputy Chief of Staff,
American Federation of Labor and Congress of Industrial
Organizations (AFL-CIO)
Mr. Osvaldo Luis Gratacos, Inspector General
for the Export-Import Bank
Mr. John Hardy, President, Coalition for
Employment Through Exports (CEE)
Dr. Matthew Slaughter, Associate Dean for
the MBA Program; Signals Company Professor of
Management; Tuck School of Business, Dartmouth College
Committee Consideration
The Subcommittee on International Monetary Policy and Trade
met in open session on June 2, 2011 and ordered H.R. 2072, as
amended, favorably reported to the full Committee by voice
vote.
The Committee on Financial Services met in open session on
June 22, 2011 and ordered H.R. 2072, as amended, favorably
reported to the House by 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.
There were no record votes taken on amendments or in connection
with ordering H.R. 2072 reported to the House. A motion by
Chairman Bachus to report the bill, as amended, to the House
with a favorable recommendation was agreed to by voice vote.
During consideration of H.R. 2072, the following amendments
and motion were considered by the Committee:
1. An amendment offered by Mr. Royce, no. 1a, to an
amendment offered by Mr. Miller of CA, no. 1, to make a
technical change that directs Export-Import Bank to categorize
the purpose of loans and long-term guarantees in its Annual
Report, was agreed to by voice vote.
2. An amendment offered by Mr. Miller of CA, no. 1, as
amended by an amendment offered by Mr. Royce, no. 1a, to
require the Export-Import Bank to examine and report to
Congress its policies to support small business; to provide
notice and disclosure for all transactions that exceed $75
million; to justify its reasons for financing a transaction;
and to study how to better serve the textile industry and
expand the Bank's advisory committees' focus to include
textiles, was agreed to by voice vote.
3. An amendment offered by Mr. Campbell, no. 2, to prohibit
the extension of assistance by the Export-Import Bank to any
person that engaged in any activity for which sanctions may be
imposed under section 5 of the Iran Sanctions Act of 1996 or
under section 106(e) of the Comprehensive Iran Sanctions,
Accountability, and Divestment Act of 2010 to the government of
Iran, or if the person is a United States person, engaged in
any activity prohibited by part 560 of title 31, Code of
Federal Regulations, was agreed to by voice vote.
4. An amendment offered by Ms. Velazquez, no. 3, to expand
the Export-Import Bank's Direct Loan Program to permit lending
to small business concerns, was offered and withdrawn.
5. A motion offered by Mr. Miller of CA to move the
previous question on H.R. 2072 was agreed to by voice vote.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the Committee has 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:
The purpose of H.R. 2072, the Securing American Jobs
Through Exports Act of 2011, is to extend the authority of the
Export-Import Bank of the United States for four years, from
2011 to 2015 so that it may carry out its mission. The mission
of the Export-Import Bank is to finance the export of U.S.
goods and services to create and maintain U.S. jobs. It is also
the purpose of H.R. 2072 to provide for enhanced transparency
and accountability requirements to ensure that the Bank's
default rates remain low, its policies and procedures are
followed, and taxpayers are protected.
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 new 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 Estimates
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, August 1, 2011.
Hon. Spencer Bachus, Chairman,
Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 2072, the Securing
American Jobs Through Exports Act of 2011.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Sunita
D'Monte.
Sincerely,
Douglas W. Elmendorf,
Director.
Enclosure.
H.R. 2072--Securing American Jobs Through Exports Act of 2011
Summary: H.R. 2072 would extend through 2015 the authority
of the Export-Import Bank of the United States (Ex-Im) to
provide loans and insurance to finance exports of U.S. products
and services. The bill also would gradually raise to $160
billion the total amount of insurance, loan guarantees, and
loans that Ex-Im can have outstanding at any time. Finally, it
would prohibit the bank from doing business with entities who
cannot certify that neither they nor their business partners or
affiliates have engaged in certain business dealings with Iran.
CBO estimates that implementing the legislation would
increase spending by about $170 million over the 2012-2016
period, assuming appropriation of the necessary amounts. Pay-
as-you-go procedures do not apply to this legislation because
it would not affect direct spending or revenues.
H.R. 2072 contains no intergovernmental or private-sector
mandates as defined in Unfunded Mandates Reform Act (UMRA) and
would impose no costs on state, local, or tribal governments.
Estimated cost to the Federal Government: The estimated
budgetary impact of H.R. 2072 is shown in the following table.
The costs of this legislation fall within budget functions 150
(international affairs) and 800 (general government).
------------------------------------------------------------------------------------------------------
By fiscal year, in millions of dollars--
------------------------------------------------------------
2012 2013 2014 2015 2016 2012-2016
--------------------------------------------------------------------------------------------------------
CHANGES IN SPENDING SUBJECT TO APPROPRIATION
Reauthorization and Increased Exposure Cap:
Administrative Expenses:
Estimated Authorization Level.............. 58 88 106 126 98 476
Estimated Outlays.......................... 48 79 99 117 96 439
Subsidy Costs (Positive Subsidies):
Estimated Authorization Level.............. 76 87 101 116 0 380
Estimated Outlays.......................... 17 50 69 88 74 298
Collections (Negative Subsidies):
Estimated Authorization Level.............. -117 -304 -502 -712 -534 -2,169
Estimated Outlays.......................... -117 -304 -502 -712 -534 -2,169
Spending of Collections:
Estimated Authorization Level.............. 50 50 50 50 0 200
Estimated Outlays.......................... 0 11 31 39 45 126
Subtotal:
Estimated Authorization Level.......... 67 -79 -245 -420 -436 -1,113
Estimated Outlays...................... -52 -164 -303 -468 -319 -1,306
Certifications Regarding Iran:
Additional Administrative Expenses:
Estimated Authorization Level.............. 6 6 8 9 6 35
Estimated Outlays.......................... 6 6 7 8 6 33
Lost Collections:
Estimated Authorization Level.............. 47 147 310 544 408 1,456
Estimated Outlays.......................... 47 147 310 544 408 1,456
Lower Spending of Collections:
Estimated Authorization Level.......... 0 0 -1 -50 0 -51
Estimated Outlays...................... 0 0 0 0 -12 -12
Subtotal:
Estimated Authorization Level.......... 53 153 317 503 414 1,440
Estimated Outlays...................... 53 153 317 552 402 1,477
Total Changes:
Estimated Authorization Level.......... 120 74 72 83 -22 327
Estimated Outlays...................... 1 -11 14 84 83 171
----------------------------------------------------------------------------------------------------------------
Basis of estimate: H.R. 2072 would extend and modify Ex-
Im's authority to provide export financing through 2015 (an
additional four years). CBO estimates that implementing the
legislation would increase spending by $171 million over the
2012-2016 period, assuming appropriation of the estimated
amounts.
The bill does not authorize the appropriation of specific
amounts. CBO assumes that appropriations would continue for
both the administrative costs and the subsidy costs of new
loans and guarantees as defined in the Federal Credit Reform
Act (FCRA).\1\ Certain loan guarantees have a negative subsidy
(that is, they result in net additional collections); under
current law, Ex-Im uses those collections to fully offset both
of those costs, and spends any excess on providing additional
loans and guarantees with positive subsidy costs. CBO expects
that Ex-Im would continue that practice under the bill. For the
purpose of this estimate, CBO assumes that the bill will be
enacted near the start of fiscal year 2012, that the estimated
authorization amounts would be appropriated near the start of
each year, and that outlays will follow historical patterns.
---------------------------------------------------------------------------
\1\Under the Federal Credit Reform Act of 1990, the subsidy cost of
a direct loan or loan guarantee is the net present value of estimated
payments by the government to cover defaults and delinquencies,
interest subsidies, or other expenses, offset by any payments to the
government, including origination fees, other fees, penalties, and
recoveries on defaulted loans. Such subsidy costs are recorded in the
budget when the loans are disbursed.
---------------------------------------------------------------------------
REAUTHORIZATION AND INCREASED EXPOSURE CAP
The Export-Import Bank assists in financing the export of
U.S. goods and services by providing products such as loans,
loan guarantees, and export credit insurance. The bank's
authority to enter into new agreements expires at the end of
fiscal year 2011; however, under current law, the bank would
continue to operate for some years after that date to service
its existing contracts.
As required under FCRA, Ex-Im receives appropriations each
year to cover its administrative expenses and the positive
subsidy costs of its loans and insurance. Ex-Im also provides
loans on which it makes a profit--also known as a negative
subsidy. In recent years, Ex-Im has generated sufficient
receipts through those negative subsidy loans to more than
offset its other costs. It uses some of those excess receipts
to provide additional loans and the remainder are retained as
balances or returned, eventually, to the U.S. Treasury. The
dollar amount of loans, guarantees, and insurance that Ex-Im
can have outstanding at any given time is limited by a cap on
its exposure.
Section 3 would allow the bank to continue providing new
loans, guarantees, and insurance through 2015. Section 4 would
increase Ex-Im's maximum allowable financial exposure to $120
billion in 2012, $140 billion in 2013, and $160 billion each
year thereafter. CBO estimates that such an increase would
allow Ex-Im to continue expanding at its recent rate of about
15 percent a year. Together, CBO estimates that implementing
sections 3 and 4 would decrease spending subject to
appropriation by $1.3 billion over the 2012-2016 period,
assuming appropriations action consistent with the bill. The
components of this estimate are discussed below.
Administrative Expenses. Based on information from Ex-Im,
CBO estimates that the bank would require additional
appropriations of $58 million in 2012 for administrative
expenses. Over the 2013-2015 period, CBO estimates that Ex-Im's
administrative expenses would grow by 10 percent each year. In
2016, when the bank's authorization would again expire, CBO
estimates the additional amounts needed would begin to decline.
Assuming appropriation of the estimated amounts, CBO estimates
that under sections 3 and 4, administrative expenses would
increase by about $440 million over the 2012-2016 period.
Positive Subsidy Costs. CBO further estimates that in 2012
Ex-Im would require appropriations of $76 million for the
subsidy cost of new agreements (that amount is identical to the
President's request for 2012). Over the 2013-2015 period, CBO
estimates that Ex-Im's originations and the subsidy
appropriations required would grow by 15 percent each year. In
2016, when Ex-Im's authorization would expire, the bank would
not need a subsidy appropriation. Assuming appropriation of the
estimated amounts, CBO estimates that subsidy costs under
sections 3 and 4 would increase by about $300 million over the
2012-2016 period.
Negative Subsidies. Ex-Im's long-term loan guarantees have
negative subsidy rates and generate collections for the bank.
CBO estimates that under sections 3 and 4, Ex-Im would collect
an additional $117 million in 2012 and $2.2 billion over the
2012-2016 period. Each year in annual appropriations acts, Ex-
Im is authorized to use the negative subsidy receipts it has
generated to offset the amounts that would otherwise need to be
appropriated for administrative expenses and the positive
subsidy costs of new loans and insurance.
Spending of Collections. Assuming those appropriations, CBO
further estimates that after using its collections to offset
its administrative expenses and subsidy costs, Ex-Im would
spend about $125 million of its excess collections over the
2012-2016 period. (Those amounts would be used for loans and
insurance that have a positive subsidy cost. Ex-Im has
indicated that because of limited demand for such deals, it
does not anticipate using more than $50 million a year in such
authority.)
CERTIFICATIONS REGARDING IRAN
Section 19 of the bill would require applicants for Ex-Im
products to certify that since July 1, 2010, neither they nor
their business partners or affiliates have engaged in any
activities for which sanctions might be imposed under various
laws and regulations pertaining to Iran. It would prohibit the
bank from doing business with entities that cannot make such
certifications. Ex-Im has indicated that complying with those
requirements would both lower the volume of certain lucrative
deals and increase its administrative costs. CBO estimates that
implementing this provision would have a net cost of about $1.5
billion over the 2012-2016 period, assuming appropriation of
the necessary amounts.
Most of the deals that would be affected by the prohibition
in section 19 would be long-term loan guarantees with negative
subsidy rates that generate collections for Ex-Im. A reduction
in the volume of such deals would lower Ex-Im's collections.
Based on information from Ex-Im, CBO estimates that the bank
would originate 40 percent fewer loans and guarantees and that
collections would fall by almost $1.5 billion over the 2012-
2016 period. In 2015, collections would no longer be sufficient
to offset Ex-Im's other costs, thereby reducing spending of
those collections.
Based on information from Ex-Im, CBO estimates that in 2012
the bank would require additional appropriations of $6 million
for administrative expenses to collect and process the required
certifications. After adjusting for inflation, CBO estimates
that the administrative costs associated with implementing this
provision would amount to $33 million over the 2012-2016
period, assuming appropriation of the estimated amounts.
It is unclear whether section 19 is intended to apply
retrospectively to Ex-Im's existing contracts. If Ex-Im
concludes that is the case, it could be forced to cancel
contracts with entities found to have links with Iran. Any
resulting penalties, reimbursements, or reductions in spending
would be considered direct spending; however, in the absence of
clear congressional intent CBO expects that the requirement
would only be applied to new deals and Ex-Im would not cancel
any existing contracts.
GOVERNMENT ACCOUNTABILITY OFFICE REPORT
The bill would require the Government Accountability Office
(GAO) to conduct a study and report to the Congress on the
methodology Ex-Im uses to estimate how its financing promotes
job creation. GAO also would be required to conduct biennial
audits of bank transactions. Based on information from GAO, CBO
estimates that implementing those requirements would cost less
than $500,000 over the 2012-2016 period, assuming availability
of appropriated amounts.
Pay-as-you-go considerations: None.
Estimated impact on state, local, and tribal governments:
H.R. 2072 contains no intergovernmental mandates as defined in
UMRA and would impose no costs on state, local, or tribal
governments.
Estimated impact on the private sector: H.R. 2072 would
prohibit Ex-Im from guaranteeing, insuring, or extending credit
to any applicant that cannot certify that since July 1, 2010,
neither they nor their business partners or affiliates has
engaged in activities with Iran for which sanctions may be
imposed under various laws and regulations. If Ex-Im concludes
that those provisions would apply retroactively, it would be
forced to terminate existing contracts with entities found to
have certain ties to Iran. Such an action would impose new
conditions on existing agreements, and therefore, would
constitute a mandate on certain private-sector entities.
However, in the absence of clear Congressional intent to
terminate existing contracts, CBO expects that the requirement
would only apply to new Ex-Im contracts. Requirements that are
imposed pursuant to new voluntary contracts with the Federal
Government are not considered mandates under UMRA.
Consequently, CBO expects the bill would impose no private-
sector mandates as defined in UMRA.
Estimate prepared by: Federal costs: Sunita D'Monte; Impact
on State, local, and Tribal Governments: J'nell L. Blanco;
Impact on the private sector: Marin Randall and Sean Lowry.
Estimate approved by: Theresa Gullo, 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.
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 the section
102(b)(3) of the Congressional Accountability Act.
Earmark Identification
H.R. 2072 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.
Section-by-Section Analysis of the Legislation
Section 1: Short title; table of contents
This section provides a short title to the bill of
``Securing American Jobs Through Exports Act of 2011.''
Section 2: Findings; statement of purpose
This section includes findings that the Export-Import Bank
contributes to a stronger national economy by financing the
export of U.S. goods and services where private financing is
limited or unavailable. This assistance helps U.S. firms
compete in important and growing export markets and creates
U.S. jobs. The section also states that in 2010, the Bank
supported 227,000 American jobs at over 3,300 companies.
This section provides that the purpose of H.R. 2072 is to
reauthorize the activities and operations of the Export-Import
Bank 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.
Section 3: Extension of authority
This section reauthorizes the Export-Import Bank for four
years, from 2011 to 2015.
Section 4: Limitations on outstanding loans, guarantees, and insurance
This section increases the Bank's lending authority from
$100 billion to $160 billion over three years, increasing $20
billion per year up to $160 billion in total exposure.
Section 5: Content guidelines for the provision of bank financing
This section provides that after a notice and comment
period and Board approval, the Bank is required to establish
comprehensive content guidelines for goods and services
eligible for Bank financing. In establishing these guidelines,
the Bank must take into account required considerations that
support the creation and maintenance of U.S. jobs and
contribute to a stronger national economy through the export of
goods and services. In addition to the considerations listed in
the bill, the Bank is permitted to take into account any
considerations it deems relevant to increasing U.S. employment.
Under this section, the Bank is authorized to establish
separate guidelines for (1) goods and services; (2) financing
terms and financial products; and (3) small business concerns.
Also, before receiving financial support, an exporter is
required to certify that the domestic content of a good was not
reduced solely as a result of the new guidelines.
Additionally, the Bank must publish proposed content
guidelines no later than 60 days after the date of enactment of
the Act for notice and comment. Within 60 days after the end of
the notice period, the Bank is required to submit the proposed
guidelines to Congress for review. Following a 60-day
Congressional review period, the guidelines would be considered
final and would be implemented.
This section also provides for the Bank to review and, as
appropriate, modify the guidelines every two years. Within one
year after the implementation of the content guidelines, the
Bank's Inspector General would evaluate the Bank's content
guidelines and submit a report to Congress.
Section 6: Improvement of method for calculating the effects of bank
financing on job creation and maintenance in the United States
This section directs the Government Accountability Office
(GAO) to conduct a study to determine the most accurate method
to calculate the effects of Bank financing on job creation in
the United States, and to recommend modifications to the Bank's
current methodology, if needed. The GAO is required to submit
the results of the study within six months of the date of
enactment of the bill.
Section 7: Biennial audits of bank transactions
This section requires the GAO, in consultation with the
Inspector General of the Bank, to audit a representative sample
of Bank transactions every two years to ensure Bank
transactions meet the Bank's policies, guidelines and due
diligence standards.
Section 8: Use of portion of the bank surplus to update information
technology systems
This section provides that for each fiscal year, the Bank
may use up to 1.25% of its surplus to upgrade its information
technology systems, up to an aggregate amount of $20 million.
The use of the Bank's surplus funds for the purpose of
investing in its information technology system is subject to
appropriations.
Section 9: Monitoring of default rates on bank financing; reports on
default rates
This section requires the Bank to monitor and calculate its
total default rate at least every quarter of each fiscal year.
If the total default rate equals or exceeds two percent, then
the Bank must submit a report to Congress, within 45 days,
explaining the circumstance of the default and develop a plan
to reduce the default rate.
Section 10: Sense of the Congress regarding bank accountability
This section provides that it is the sense of the Congress
to encourage the Board of Directors to establish an independent
process for affected parties to hold the Bank accountable for
instances of noncompliance with its policies and procedures.
Section 11: Sub-Saharan Africa Advisory Committee
This section reauthorizes the Sub-Saharan Africa Advisory
Committee for four years, from 2011 to 2015.
Section 12: Extension of authority to provide financing for the export
of non-lethal defense articles or services the primary end use
of which will be for civilian purposes
This section provides for an extension of the Bank's
authority to finance the export of non-lethal defense articles
or services used primarily for civilian purposes for four
years, from 2011 to 2015.
Section 13: Elimination of obsolete provisions
This section removes the provisions of the Bank charter
relating to the Foreign Credit Insurance Association and
certain Marxist-Leninist Countries that no longer exist.
Section 14: Examination of bank support for small business
This section provides that within 180 days of the enactment
of this Act, the Bank must examine its current products,
programs, and policies and report to Congress on whether the
Bank adequately meets the needs of small business exporters.
Section 15: Categorization of purpose of loans and long-term guarantees
in annual report
This section provides that, in its annual report, the Bank
must categorize each loan and long-term guarantee according to
the following purposes:
(1) To assume commercial or political risk that an exporter
or private financial institutions is 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. The reason why the purpose is not
identified.
Section 16: Disclosure requirement for board meetings
This section requires the Bank to publish on its website
information on proposed financing transactions that equal or
exceed $75 million, no later than 25 days before final
consideration by the Board of Directors. The Bank may not,
however, publish confidential or proprietary business
information that would violate the Trade Secrets Act or
jeopardize jobs in the United States by supplying competitors
with information that could be used to compete with U.S. firms.
Section 17: Modifications relating to the Advisory Committee
This section provides for the inclusion of the textile
industry in the interests that will be broadly represented on
the Bank's Advisory Committee. The Advisory Committee is
directed to consider ways to support the maintenance, promotion
and expansion of jobs in the textile industry. Also, in its
Annual Report to Congress, the Bank must include a section on
Advisory Committee determinations relating to the textile
industry.
Section 18: Financing for goods manufactured in the United States used
in global textile and apparel supply chains
This section requires the Bank to conduct a study examining
the ability of the textile industry to access Bank products,
and to report to Congress within 180 days of the date of
enactment how the Bank could increase accessibility to Bank
financing for the textile industry. In addition, the Bank's
Annual Report to Congress must include a description of its
record in meeting the needs of the textile and apparel
industry, and detail the steps taken to increase Bank
accessibility.
Section 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
This section prohibits the Bank from providing financing to
a person, unless the person certifies to the Bank that, since
July 1, 2010, neither the person, nor any other person under
common ownership or control with the person, has engaged in
activities sanctionable under Section 5(a) of the Iran
Sanctions Act of 1996, or Section 106(c) of the Comprehensive
Iran Sanctions, Accountability, and Divestment Act of 2010, or
part 560 of Title 31, Code of Federal Regulations (Iranian
Transactions Regulations).
Section 20: Effective date
This section provides that the Securing American Jobs
Through Exports Act of 2011 and its amendments would take
effect on October 1, 2011.
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) * * *
* * * * * * *
[(F) Consistent with international agreements, the Bank shall
urge the Foreign Credit Insurance Association to provide
coverage against 100 per centum of any loss with respect to
exports having a value of less than $100,000.]
[(G)] (F) Participation in or access to long-, medium-, and
short-term financing, guarantees, and insurance provided by the
Bank shall not be denied solely because the entity seeking
participation or access is not a bank or is not a United States
person.
[(H)] (G)(i) * * *
* * * * * * *
[(I)] (H) The President of the Bank shall undertake efforts
to enhance the Bank's capacity to provide information about the
Bank's programs to small and rural companies which have not
previously participated in the Bank's programs. Not later than
1 year after the date of enactment of this subparagraph, the
President of the Bank shall submit to Congress a report on the
activities undertaken pursuant to this subparagraph.
[(J)] (I) The Bank shall implement an electronic system
designed to track all pending transactions of the Bank.
[(K)] (J) The Bank shall promote the export of goods and
services related to renewable energy sources.
[(L)] (K) The Bank shall require an applicant for
assistance from the Bank to disclose whether the applicant has
been found by a court of the United States to have violated the
Foreign Corrupt Practices Act of 1977, the Arms Export Control
Act, the International Emergency Economic Powers Act, or the
Export Administration Act of 1979 within the preceding 12
months, and shall maintain, in cooperation with the Department
of Justice, for not less than 3 years a record of such
applicants so found to have violated any such 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) * * *
* * * * * * *
[(VII) Socialist Federal Republic of
Yugoslavia.]
[(VIII)] (VII) Socialist Republic
of Vietnam.
[(IX)] (VIII) Tibet.
* * * * * * *
(9)(A) * * *
(B)(i) * * *
* * * * * * *
(iii) The advisory committee shall terminate on September 30,
[2011] 2015.
* * * * * * *
(h) Response to Application for Financing; Implementation of
Online Loan Request and Tracking Process.--
(1) * * *
(2) Website.--Not later than September 1, 2007, the
Bank shall exercise the authority granted by
subparagraphs (E)(x) and [(J)] (I) of subsection (b)(1)
to establish, and thereafter to maintain, a website
through which--
(A) * * *
* * * * * * *
(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.
(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.
Sec. 3. (a) * * *
* * * * * * *
(c)(1) * * *
* * * * * * *
(9) At the request of any 2 members of the Board of
Directors, the Chairman of the Board shall place an item
pertaining to the policies or procedures of the Bank on the
agenda for discussion 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 shall be discussed. 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.
(d)(1)(A) * * *
(B) Such members shall be broadly representative of
environment, production, commerce, finance, agriculture, labor,
services, [and State government] State government, and the
textile industry.
* * * * * * *
(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.
* * * * * * *
(f) Small Business Division.--
(1) Establishment.--There is established a Small
Business Division (in this subsection referred to as
the ``Division'') within the Bank in order to--
(A) carry out the provisions of subparagraphs
(E) and [(I)] (H) of section 2(b)(1) relating
to outreach, feedback, product improvement, and
transaction advocacy for small business
concerns (as defined in section 3(a) of the
Small Business Act);
* * * * * * *
(g) Small Business Specialists.--
(1) * * *
* * * * * * *
(7) 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)] (H) of section 2(b)(1).
* * * * * * *
(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.
* * * * * * *
SEC. 6. AGGREGATE LOAN, GUARANTEE, AND INSURANCE AUTHORITY.
(a) Limitation on Outstanding Amounts.--
(1) * * *
(2) Applicable amount.--In paragraph (1), the term
``applicable amount'' means--
(A) * * *
* * * * * * *
(D) during fiscal year 2005, $95,000,000,000;
[and]
(E) during fiscal year 2006, and each fiscal
year thereafter through fiscal year 2011[,];
(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.
* * * * * * *
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, [2011] 2015, 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) * * *
* * * * * * *
(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)] (I) 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).
* * * * * * *
(f) Additional Reports.--Not later than March 31 of each
year, 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 reports on--
(1) * * *
* * * * * * *
(8)(A) the efforts made by the Bank to carry out
subparagraphs (E)(x) and [(J)] (I) 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
* * * * * * *
(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.
(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.
(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.
(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.
SEC. 8A. ANNUAL COMPETITIVENESS REPORT.
(a) In General.--Not later than June 30 of each year, the
Bank shall submit to the appropriate congressional committees a
report that includes the following:
(1) * * *
* * * * * * *
(5) Efforts of bank to promote export of goods and
services related to renewable energy sources.--A
description of the activities of the Bank with respect
to financing renewable energy projects undertaken under
section [2(b)(1)(K)] 2(b)(1)(J), and 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.
* * * * * * *
----------
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,
[2011] 2015.
* * * * * * *