II
114th CONGRESS
1st Session
S. 819
IN THE SENATE OF THE UNITED STATES
March 19, 2015
Mr. Kirk (for himself, Ms. Heitkamp, Mr. Graham, Mr. Manchin, Mr. Blunt, Mr. Donnelly, Ms. Ayotte, and Mr. Warner) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs
A BILL
To reauthorize and reform the Export-Import Bank of the United States, and for other purposes.
Short title; table of contents
Short title
This Act may be cited as the Export-Import Bank Reform and Reauthorization Act of 2015
.
Table of contents
The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I—Taxpayer protection provisions and increased accountability
Sec. 101. Reduction in authorized amount of outstanding loans, guarantees, and insurance.
Sec. 102. Increase in loss reserves.
Sec. 103. Review of fraud controls.
Sec. 104. Office of Ethics.
Sec. 105. Chief Risk Officer.
Sec. 106. Risk Management Committee.
Sec. 107. Independent audit of bank portfolio.
Sec. 108. Pilot program for reinsurance.
TITLE II—Promotion of small business exports
Sec. 201. Increase in small business lending requirements.
Sec. 202. Report on programs for small and medium-sized businesses.
TITLE III—Modernization of operations
Sec. 301. Electronic payments and documents.
Sec. 302. Reauthorization of information technology updating.
TITLE IV—General provisions
Sec. 401. Extension of authority.
Sec. 402. Certain updated loan terms and amounts.
TITLE V—Other matters
Sec. 501. Prohibition on discrimination based on industry.
Sec. 502. Negotiations to end export credit financing.
Sec. 503. Study of financing for information and communications technology systems.
Taxpayer protection provisions and increased accountability
Reduction in authorized amount of outstanding loans, guarantees, and insurance
Section 6(a) of the Export-Import Bank Act of 1945 (12 U.S.C. 635e(a)) is amended—
by redesignating paragraph (3) as paragraph (4); and
by striking paragraph (2) and inserting the following:
Applicable amount defined
In this subsection, the term applicable amount, for each of fiscal years 2015 through 2019, means $135,000,000,000.
Freezing of lending cap if default rate is 2 percent or more
If the rate calculated under section 8(g)(1) is 2 percent or more for a quarter, the Bank may not exceed the amount of loans, guarantees, and insurance outstanding on the last day of that quarter until the rate calculated under section 8(g)(1) is less than 2 percent.
.
Increase in loss reserves
In general
Section 6 of the Export-Import Bank Act of 1945 (12 U.S.C. 635e) is amended—
by redesignating subsection (b) as subsection (c); and
by inserting after subsection (a) the following:
Reserve requirement
The Bank shall build to and hold in reserve, to protect against future losses, an amount that is not less than 5 percent of the aggregate amount of disbursed and outstanding loans, guarantees, and insurance of the Bank.
.
Effective date
The amendment made by subsection (a) shall take effect on the date that is one year after the date of the enactment of this Act.
Review of fraud controls
Section 17(b) of the Export-Import Bank Reauthorization Act of 2012 (12 U.S.C. 635a–6(b)) is amended to read as follows:
Review of fraud controls
Not later than 4 years after the date of the enactment of the Export-Import Bank Reform and Reauthorization Act of 2015, and every 4 years thereafter, the Comptroller General of the United States shall—
review the adequacy of the design and effectiveness of the controls used by the Export-Import Bank of the United States to prevent, detect, and investigate fraudulent applications for loans and guarantees and the compliance by the Bank with the controls, including by auditing a sample of Bank transactions; and
submit a written report regarding the findings of the review and providing such recommendations with respect to the controls described in paragraph (1) as the Comptroller General deems appropriate to—
the Committee on Banking, Housing, and Urban Affairs and the Committee on Appropriations of the Senate; and
the Committee on Financial Services and the Committee on Appropriations of the House of Representatives.
.
Office of Ethics
Section 3 of the Export-Import Bank Act of 1945 (12 U.S.C. 635a) is amended by adding at the end the following:
Office of Ethics
Establishment
There is established an Office of Ethics within the Bank, which shall oversee all ethics issues within the Bank.
Head of office
In general
The head of the Office of Ethics shall be the Chief Ethics Officer, who shall report to the Board of Directors.
Appointment
Not later than 180 days after the date of the enactment of the Export-Import Bank Reform and Reauthorization Act of 2015, the Chief Ethics Officer shall be—
appointed by the President of the Bank from among persons—
with a background in law who have experience in the fields of law and ethics; and
who are not serving in a position requiring appointment by the President of the United States before being appointed to be Chief Ethics Officer; and
approved by the Board.
Designated agency ethics official
The Chief Ethics Officer shall serve as the designated agency ethics official for the Bank pursuant to the Ethics in Government Act of 1978 (5 U.S.C. App. 101 et seq.).
Duties
The Office of Ethics has jurisdiction over all employees of, and ethics matters relating to, the Bank. With respect to employees of the Bank, the Office of Ethics shall—
recommend administrative actions to establish or enforce standards of official conduct;
refer to the Office of the Inspector General of the Bank alleged violations of—
the standards of ethical conduct applicable to employees of the Bank under parts 2635 and 6201 of title 5, Code of Federal Regulations;
the standards of ethical conduct established by the Chief Ethics Officer; and
any other laws, rules, or regulations governing the performance of official duties or the discharge of official responsibilities that are applicable to employees of the Bank;
report to appropriate Federal or State authorities substantial evidence of a violation of any law applicable to the performance of official duties that may have been disclosed to the Office of Ethics; and
render advisory opinions regarding the propriety of any current or proposed conduct of an employee or contractor of the Bank, and issue general guidance on such matters as necessary.
.
Chief Risk Officer
Section 3 of the Export-Import Bank Act of 1945 (12 U.S.C. 635a), as amended by section 104, is further amended by adding at the end the following:
Chief Risk Officer
In general
There shall be a Chief Risk Officer of the Bank, who shall—
oversee all issues relating to risk within the Bank; and
report to the President of the Bank.
Appointment
Not later than 180 days after the date of the enactment of the Export-Import Bank Reform and Reauthorization Act of 2015, the Chief Risk Officer shall be—
appointed by the President of the Bank from among persons—
with a demonstrated ability in the general management of, and knowledge of and extensive practical experience in, financial risk evaluation practices in large governmental or business entities; and
who are not serving in a position requiring appointment by the President of the United States before being appointed to be Chief Risk Officer; and
approved by the Board.
Duties
The duties of the Chief Risk Officer are—
to be responsible for all matters related to managing and mitigating all risk to which the Bank is exposed, including the programs and operations of the Bank;
to establish policies and processes for risk oversight, the monitoring of management compliance with risk limits, and the management of risk exposures and risk controls across the Bank;
to be responsible for the planning and execution of all Bank risk management activities, including policies, reporting, and systems to achieve strategic risk objectives;
to develop an integrated risk management program that includes identifying, prioritizing, measuring, monitoring, and managing internal control and operating risks and other identified risks;
to ensure that the process for risk assessment and underwriting for individual transactions considers how each such transaction considers the effect of the transaction on the concentration of exposure in the overall portfolio of the Bank, taking into account fees, collateralization, and historic default rates; and
to review the adequacy of the use by the Bank of qualitative metrics to assess the risk of default under various scenarios.
.
Risk Management Committee
In general
Section 3 of the Export-Import Bank Act of 1945 (12 U.S.C. 635a), as amended by sections 104 and 105, is further amended by adding at the end the following:
Risk management committee
Establishment
There is established a management committee to be known as the Risk Management Committee
.
Membership
The membership of the Risk Management Committee shall be the members of the Board of Directors, with the President and First Vice President of the Bank serving as ex officio members.
Duties
The duties of the Risk Management Committee shall be—
to oversee, in conjunction with the Office of the Chief Financial Officer of the Bank—
periodic stress testing on the entire Bank portfolio, reflecting different market, industry, and macroeconomic scenarios, and consistent with common practices of commercial and multilateral development banks; and
the monitoring of industry, geographic, and obligor exposure levels; and
to review all required reports on the default rate of the Bank before submission to Congress under section 8(g).
.
Termination of Audit Committee
Not later than 180 days after the date of the enactment of this Act, the Board of Directors of the Export-Import Bank of the United States shall revise the bylaws of the Bank to terminate the Audit Committee established by section 7 of the bylaws.
Independent audit of bank portfolio
Audit
The Inspector General of the Export-Import Bank of the United States shall conduct an audit or evaluation of the portfolio risk management procedures of the Bank, including a review of the implementation by the Bank of the duties assigned to the Chief Risk Officer under section 3(l) of the Export-Import Bank Act of 1945, as amended by section 105.
Report
Not later than one year after the date of the enactment of this Act, and not less frequently than every 3 years thereafter, the Inspector General shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a written report containing all findings and determinations made in carrying out subsection (a).
Pilot program for reinsurance
In general
Notwithstanding any provision of the Export-Import Bank Act of 1945 (12 U.S.C. 635 et seq.), the Export-Import Bank of the United States (in this section referred to as the Bank
) may establish a pilot program under which the Bank may enter into contracts and other arrangements to share risks associated with the provision of guarantees, insurance, or credit, or the participation in the extension of credit, by the Bank under that Act.
Limitations on Amount of Risk-Sharing
Per contract or other arrangement
The aggregate amount of liability the Bank may transfer through risk-sharing pursuant to a contract or other arrangement entered into under subsection (a) may not exceed $1,000,000,000.
Per year
The aggregate amount of liability the Bank may transfer through risk-sharing during a fiscal year pursuant to contracts or other arrangements entered into under subsection (a) during that fiscal year may not exceed $10,000,000,000.
Annual reports
Not later than one year after the date of the enactment of this Act, and annually thereafter through 2019, the Bank shall submit to Congress a written report that contains a detailed analysis of the use of the pilot program carried out under subsection (a) during the year preceding the submission of the report.
Rule of construction
Nothing in this section shall be construed to affect, impede, or revoke any authority of the Bank.
Termination
The pilot program carried out under subsection (a) shall terminate on September 30, 2019.
Promotion of small business exports
Increase in small business lending requirements
In general
Section 2(b)(1)(E)(v) of the Export-Import Bank Act of 1945 (12 U.S.C. 635(b)(1)(E)(v)) is amended by striking 20 percent
and inserting 25 percent
.
Effective date
The amendment made by subsection (a) shall apply with respect to fiscal year 2016 and each fiscal year thereafter.
Report on programs for small and medium-sized businesses
In general
Section 8 of the Export-Import Bank Act of 1945 (12 U.S.C. 635g) is amended by adding at the end the following:
Report on Programs for Small and Medium-Sized Businesses
The Bank shall include in its annual report to Congress under subsection (a) a report on the programs of the Bank for United States businesses with less than $250,000,000 in annual sales.
.
Effective date
The amendment made by subsection (a) shall apply with respect to the report of the Export-Import Bank of the United States submitted to Congress under section 8 of the Export-Import Bank Act of 1945 (12 U.S.C. 635g) for the first year that begins after the date of the enactment of this Act.
Modernization of operations
Electronic payments and documents
Section 2(b)(1) of the Export-Import Bank Act of 1945 (12 U.S.C. 635(b)(1)) is amended by adding at the end the following:
Not later than 2 years after the date of the enactment of the Export-Import Bank Reform and Reauthorization Act of 2015, the Bank shall implement policies—
to accept electronic documents with respect to transactions whenever possible, including copies of bills of lading, certifications, and compliance documents, in such manner so as not to undermine any potential civil or criminal enforcement related to the transactions; and
to accept electronic payments in all of its programs.
.
Reauthorization of information technology updating
Section 3(j) of the Export-Import Act of 1945 (12 U.S.C. 635a(j)) is amended—
in paragraph (1), in the matter preceding subparagraph (A), by striking 2012, 2013, and 2014
and inserting 2015 through 2019
;
in paragraph (2)(B), by striking (I) the funds
and inserting (i) the funds
; and
in paragraph (3), by striking 2012, 2013, and 2014
and inserting 2015 through 2019
.
General provisions
Extension of authority
In general
Section 7 of the Export-Import Bank Act of 1945 (12 U.S.C. 635f) is amended by striking 2014
and inserting 2019
.
Dual-Use Exports
Section 1(c) of Public Law 103–428 (12 U.S.C. 635 note) is amended by striking September 30, 2014
and inserting the date on which the authority of the Export-Import Bank of the United States expires under section 7 of the Export-Import Bank Act of 1945 (12 U.S.C. 635f)
.
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 September 30, 2014
and inserting the date on which the authority of the Bank expires under section 7
.
Effective date
The amendments made by this section shall take effect on the earlier of the date of the enactment of this Act or June 30, 2015.
Certain updated loan terms and amounts
Loan Terms for Medium-Term Financing
Section 2(a)(2)(A) of the Export-Import Bank Act of 1945 (12 U.S.C. 635(a)(2)(A)) is amended—
in clause (i), by striking ; and
and inserting a semicolon; and
by adding at the end the following:
with principal amounts of not more than $25,000,000; and
.
Competitive opportunities relating to insurance
Section 2(d)(2) of the Export-Import Bank Act of 1945 (12 U.S.C. 635(d)(2)) is amended by striking $10,000,000
and inserting $25,000,000
.
Export amounts for small business loans
Section 3(g)(3) of the Export-Import Bank Act of 1945 (12 U.S.C. 635a(g)(3)) is amended by striking $10,000,000
and inserting $25,000,000
.
Consideration of environmental effects
Section 11(a)(1)(A) of the Export-Import Bank Act of 1945 (12 U.S.C. 635i–5(a)(1)(A)) is amended by striking $10,000,000 or more
and inserting the following: $25,000,000 (or, if less than $25,000,000, the threshold established pursuant to international agreements, including the Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence, as adopted by the Organisation for Economic Co-operation and Development Council on June 28, 2012, and the risk-management framework adopted by financial institutions for determining, assessing, and managing environmental and social risk in projects (commonly referred to as the
.Equator Principles
)) or more
Effective date
The amendments made by this section shall apply with respect to fiscal year 2016 and each fiscal year thereafter.
Other matters
Prohibition on discrimination based on industry
Section 2 of the Export-Import Bank Act of 1945 (6 U.S.C. 635 et seq.) is amended by adding at the end the following:
Prohibition on discrimination based on industry
In general
Except as provided in this Act, the Bank may not—
deny an application for financing based solely on the industry, sector, or business that the application concerns; or
promulgate or implement policies that discriminate against an application based solely on the industry, sector, or business that the application concerns.
Applicability
The prohibitions under paragraph (1) apply only to applications for financing by the Bank for projects concerning the exploration, development, production, or export of energy sources and the generation or transmission of electrical power, or combined heat and power, regardless of the energy source involved.
.
Negotiations to end export credit financing
In general
Section 11 of the Export-Import Bank Reauthorization Act of 2012 (12 U.S.C. 635a–5) is amended—
in subsection (a)—
in the matter preceding paragraph (1), by striking Secretary of the Treasury (in this section referred to as the
and inserting Secretary
)President
; and
in paragraph (1)—
by striking (OECD)
and inserting (in this section referred to as the
; andOECD
)
by striking ultimate goal of eliminating
and inserting possible goal of eliminating, before the date that is 10 years after the date of the enactment of the Export-Import Bank Reform and Reauthorization Act of 2015,
;
in subsection (b), by striking Secretary
each place it appears and inserting President
; and
by adding at the end the following:
Report on strategy
Not later than 180 days after the date of the enactment of the Export-Import Bank Reform and Reauthorization Act of 2015, the President shall submit to Congress a proposal, and a strategy for achieving the proposal, that the United States Government will pursue with other major exporting countries, including OECD members and non-OECD members, to eliminate over a period of not more than 10 years subsidized export-financing programs, tied aid, export credits, and all other forms of government-supported export subsidies.
Negotiations with non-OECD members
The President shall initiate and pursue negotiations with countries that are not OECD members to bring those countries into a multilateral agreement establishing rules and limitations on officially supported export credits.
Annual reports on progress of negotiations
Not later than 180 days after the date of the enactment of the Export-Import Bank Reform and Reauthorization Act of 2015, and annually thereafter through calendar year 2019, the President shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report on the progress of any negotiations described in subsection (d).
.
Effective date
The amendments made by paragraphs (1) and (2) of subsection (a) shall apply with respect to reports required to be submitted under section 11(b) of the Export-Import Bank Reauthorization Act of 2012 (12 U.S.C. 635a–5(b)) after the date of the enactment of this Act.
Study of financing for information and communications technology systems
Analysis of information and communications technology 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 companies that export information and communications technology services and related goods.
Elements
In conducting the study required by subsection (a), the Bank shall examine the following:
The number of jobs in the United States that are supported by the export of information and communications technology services and related goods, and the degree to which access to financing will increase exports of such services and related goods.
The reduction in the financing by the Bank of exports of information and communications technology services from 2003 through 2014.
The activities of foreign export credit agencies to facilitate the export of information and communications technology services and related goods.
Specific proposals for how the Bank could provide additional financing for the exportation of information and communications technology services and related goods through risk-sharing with other export credit agencies and other third parties.
Proposals for new products the Bank could offer to provide financing for exports of information and communications technology services and related goods, including—
the extent to which the Bank is authorized to offer new products;
the extent to which the Bank would need additional authority to offer new products to meet the needs of the information and communications technology industry;
specific proposals for changes in law that would enable the Bank to provide increased financing for exports of information and communications technology services and related goods in compliance with the credit and risk standards of the Bank;
specific proposals that would enable the Bank to provide increased outreach to the information and communications technology industry about the products the Bank offers; and
specific proposals for changes in law that would enable the Bank to provide the financing to build information and communications technology infrastructure, in compliance with the credit and risk standards of the Bank, to allow for market access opportunities for United States information and communications technology companies to provide services on the infrastructure being financed by the Bank.
Report
Not later than 180 days after the date of the enactment of this Act, the Bank shall submit to Congress a report that contains the results of the study required by subsection (a).