SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Extending Incentives for Exporting 
American Textiles Act of 2013''.

SEC. 2. EXTENSION OF DUTY-FREE TREATMENT FOR CERTAIN TROUSERS, 
              BREECHES, OR SHORTS IMPORTED FROM NICARAGUA.

    (a) Duty-Free Treatment.--Notwithstanding the termination of the 
tariff preference level program for imports of apparel articles from 
Nicaragua and subject to subsection (b), eligible apparel articles 
shall enter the United States free of duty if such eligible apparel 
articles are accompanied by an earned import allowance certificate for 
the amount of credits equal to the total square meter equivalents of 
fabric in such eligible apparel articles, in accordance with the 
program established under subsection (c).
    (b) Quantitative Limitation.--
            (1) Initial limitation.--Subject to paragraphs (2) and (3), 
        duty-free treatment under this section shall be extended for a 
        covered calendar year to an initial limit of not more than 
        50,000,000 square meter equivalents of eligible apparel 
        articles unless that amount is increased pursuant to paragraph 
        (3) for such year.
            (2) Export success factor.--If during a covered calendar 
        year duty-free treatment under this section is extended to 90 
        percent or more of the initial limit for such year prior to the 
        end of such year, the President shall--
                    (A) extend such treatment to an additional amount 
                of square meter equivalents of eligible apparel 
                articles that is equal to 10 percent of the initial 
                limit for such year; and
                    (B) publish notice of the extension in the Federal 
                Register.
            (3) Export success pattern.--
                    (A) Three year increase.--Subject to subparagraph 
                (B), if the President takes the action described in 
                paragraph (2) for a period of 3 consecutive covered 
                calendar years, for subsequent covered calendar years 
                the President shall--
                            (i) increase the initial limit for 
                        subsequent covered calendar years by an 
                        additional amount of square meter equivalents 
                        of eligible apparel articles that is equal to 
                        10 percent of the initial limit for each 
                        covered calendar year of the previous 3-year 
                        period; and
                            (ii) publish notice of such increase in the 
                        Federal Register.
                    (B) Additional increases.--If the initial limit is 
                increased under subparagraph (A) for a period of 3 
                consecutive covered calendar years, the initial limit 
                for each such year--
                            (i) shall be increased under paragraph (2), 
                        if the requirements of such paragraph are met 
                        for such year; and
                            (ii) may be eligible for an additional 
                        increase under subparagraph (A) no more 
                        frequently than once every 3 years.
    (c) Earned Import Allowance Program.--
            (1) Matching requirement.--The aggregate square meter 
        equivalents of eligible apparel articles of each producer or 
        entity controlling production that may receive duty-free 
        treatment under this section during a covered calendar year may 
        not exceed the aggregate square meter equivalents of fabric 
        wholly formed in the United States of yarns wholly formed in 
        the United States that was previously exported from the United 
        States by such producer or entity and for which the producer or 
        entity has available credits in its account established under 
        paragraph (3)(B).
            (2) Requirement for program.--The Secretary of Commerce 
        shall establish a program to provide earned import allowance 
        certificates to any producer or entity controlling production 
        of eligible apparel articles for purposes of subsection (a), 
        based on the elements described in paragraph (3).
            (3) Elements.--The elements described in this paragraph are 
        the following:
                    (A) Credits.--One credit shall be issued to a 
                producer or an entity controlling production for every 
                one square meter equivalent of fabric wholly formed in 
                the United States from yarns wholly formed in the 
                United States that such producer or entity demonstrates 
                has been exported from the customs territory of the 
                United States.
                    (B) Accounts.--If requested by a producer or entity 
                controlling production, the Secretary of Commerce shall 
                create and maintain an account for such producer or 
                entity into which credits issued under subparagraph (A) 
                may be deposited.
                    (C) Certificates.--A producer or entity controlling 
                production may redeem credits issued under subparagraph 
                (A) for earned import allowance certificates for such 
                number of credits such producer or entity may request 
                and has available.
                    (D) Documentation.--The Secretary of Commerce may 
                require that a producer or entity controlling 
                production submit documentation to verify the export of 
                fabric wholly formed in the United States of yarns 
                wholly formed in the United States.
                    (E) Verification.--The Secretary of Commerce may 
                reconcile discrepancies in the information provided 
                under subparagraph (D) and verify the accuracy of such 
                information.
                    (F) Electronic information.--The program shall be 
                established so as to allow, to the extent feasible, the 
                submission, storage, retrieval, and disclosure of 
                information in electronic format, including information 
                with respect to the earned import allowance 
                certificates.
                    (G) Schedule.--The Secretary of Commerce shall 
                establish procedures to carry out the program under 
                this subsection by October 1, 2014, and may establish 
                additional requirements to carry out the program.
                    (H) Penalties.--If an importer, producer, or entity 
                controlling production enters into the customs 
                territory of the United States eligible apparel 
                articles for which there are insufficient earned 
                credits, such importer, producer, or entity may be 
                subject to a penalty equal to the value of such 
                eligible apparel articles, in addition to existing 
                penalties under section 592 of the Tariff Act of 1930 
                (19 U.S.C. 1592), as appropriate.
            (4) Determination of quantity of sme.--For purposes of 
        determining the quantity of ``square meter equivalents'' under 
        this section, the conversion factors listed in Correlation: 
        U.S. Textile and Apparel Category System with the Harmonized 
        Tariff Schedule of the United States of America, 2013, or 
        successor publication of the Office of Textiles and Apparel of 
        the Department of Commerce, shall apply.
    (d) Definitions.--In this section:
            (1) Covered calendar year.--The term ``covered calendar 
        year'' means a calendar year during the 10-year period referred 
        to in subsection (e).
            (2) Eligible apparel article.--The term ``eligible apparel 
        article'' means woven trousers, breeches, or shorts that are 
        apparel articles described in subdivisions (a) and (b) of U.S. 
        Note 15 to subchapter XV of chapter 99 of the HTS imported from 
        Nicaragua.
            (3) Enter; entry.--The terms ``enter'' and ``entry'' 
        include a withdrawal from warehouse for consumption.
            (4) Entity controlling production.--The term ``entity 
        controlling production'' means a person or other entity or 
        group that is not a producer and that controls the production 
        process in Nicaragua through a contractual relationship or 
        other indirect means.
            (5) Fabric wholly formed in the united states of yarn 
        wholly formed in the united states.--The term ``fabric wholly 
        formed in the United States of yarn wholly formed in the United 
        States'' means fabric--
                    (A) woven in the United States from fibers or from 
                yarns, the constituent staple fibers of which are spun 
                in the United States or the continuous filament of 
                which is extruded in the United States;
                    (B) for which any dyeing, printing, or finishing is 
                performed in the United States; and
                    (C) exported to Nicaragua on or after April 1, 
                2014.
            (6) HTS.--The term ``HTS'' means the Harmonized Tariff 
        Schedule of the United States as in effect on the day before 
        the date of the enactment of this Act.
            (7) Initial limit.--The term ``initial limit'' means the 
        quantity of square meter equivalents of eligible apparel 
        articles that may be extended duty-free treatment under this 
        section on the first day of a calendar year.
            (8) Producer.--The term ``producer'' means a person or 
        other entity or group that exercises direct, daily operational 
        control over the production process in Nicaragua.
            (9) Tariff preference level program for imports of apparel 
        articles from nicaragua.--The term ``tariff preference level 
        program for imports of apparel articles from Nicaragua'' refers 
        to the preferential tariff treatment for nonoriginating apparel 
        goods of Nicaragua established pursuant to Article 3.28 of the 
        Dominican Republic-Central America-United States Free Trade 
        Agreement and the letters described in subparagraphs (A) and 
        (B) of section 1634(a)(2) of the Miscellaneous Trade and 
        Technical Corrections Act of 2006 (title XIV of Public Law 109-
        280; 120 Stat. 1167).
    (e) Effective Period.--Duty-free treatment under this section shall 
be in effect for the 10-year period beginning on January 1, 2015.
Extending Incentives for Exporting American Textiles Act of 2013 - Extends duty-free treatment, subject to specified quantitative limitations, for certain imported Nicaraguan woven trousers, breeches, or shorts.  Requires those articles to be accompanied by an earned import allowance certificate indicating the use of fabric and yarns wholly formed in the United States. Extends such duty-free treatment for 10 years beginning on January 1, 2015.
Extending Incentives for Exporting American Textiles Act of 2013