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[Senate Report 111-107]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 227
111th Congress                                                   Report
                                 SENATE
 1st Session                                                    111-107

======================================================================

 
  OVERSEAS PRIVATE INVESTMENT CORPORATION REAUTHORIZATION ACT OF 2009

                                _______
                                

               December 15, 2009.--Ordered to be printed

                                _______
                                

          Mr. Kerry, from the Committee on Foreign Relations,
                        submitted the following

                                 REPORT

                         [To accompany S. 705]

    The Committee on Foreign Relations, having had under 
consideration the bill S. 705, to reauthorize the programs of 
the Overseas Private Investment Corporation, and for other 
purposes, reports favorably thereon and recommends that the 
bill do pass.

                                CONTENTS

                                                                   Page

  I. Purpose..........................................................1
 II. Committee Action.................................................1
III. Discussion.......................................................1
 IV. Cost Estimate....................................................9
  V. Evaluation of Regulatory Impact.................................13
 VI. Changes in Existing Law.........................................13

                               I. PURPOSE

    The purpose of S. 705 is to reauthorize the programs of the 
Overseas Private Investment Corporation.

                          II. COMMITTEE ACTION

    S. 705 was introduced by Senators Kerry and Lugar on March 
25, 2009. On March 31, 2009, the committee ordered S. 705 
reported favorably by voice vote.

                            III. DISCUSSION

    S. 705, the ``Overseas Private Investment Corporation 
Reauthorization Act of 2009'' reauthorizes the agency through 
September 30, 2013. It strengthens the agency's development 
mandate and ensures that its activities are consistent with 
United States foreign policy objectives. The Overseas Private 
Investment Corporation (OPIC) is an independent agency of the 
United States established in 1971. OPIC's mandate is to 
mobilize and facilitate the participation of the U.S. private 
sector in the economic and social development of less developed 
countries, thereby complementing the development assistance 
objectives of the United States. OPIC provides political risk 
insurance, project financing, and other financial assistance to 
U.S. companies in support of these objectives.
    Over the agency's 38-year history, OPIC projects have 
generated more than $72 billion in U.S. exports and more than 
273,000 American jobs while supporting over $188 billion worth 
of investments that have helped developing countries generate 
almost $15 billion in host-government revenues leading to over 
821,000 host-country jobs.
    The legislation includes several important changes: (1) 
strengthening transparency requirements to ensure NGOs and 
other interested groups have sufficient notice and information 
about potential OPIC-supported projects; (2) ensuring 
extractive industry projects supported by OPIC conform to 
standards and principles established by the Extractive 
Industries Transparency Initiative; and (3) strengthening the 
rights of workers overseas.

    Preferential Consideration of Certain Investment Projects.  
This section amends section 231(f) of the FAA and requires 
OPIC, to the greatest degree practicable and consistent with 
the Corporation's goals, to provide preferential consideration 
to investment projects in less developed countries, the 
governments of which are receptive to private enterprise and 
are willing and able to maintain conditions that enable private 
enterprise to make its full contribution to the development 
process. This does not affect the committee's longstanding 
belief that protecting human rights, strengthening the rule of 
law, and promoting democratic governance by the host government 
are essential elements towards sustainable long-term 
development.

    Transparency for Extraction Investments.  The bill creates 
a new subsection under the climate change mitigation section 
addressing extraction investments. The committee recognizes the 
problematic history of extractive industry projects in 
developing countries. The committee intends for this 
legislation to provide important transparency safeguards so 
that OPIC-sponsored projects can best fulfill the agency's 
development mandate. The legislation directs the Corporation to 
provide notice to Congress not later than 60 days before 
approval of extractive industry projects, defined as those 
which are Category A and valued at $10,000,000 or more.
    In general, the Corporation may approve a contract of 
insurance, reinsurance, a guaranty, or provide financing to an 
eligible investor for a project that significantly involves an 
extractive industry only if: (1) the eligible investor has 
agreed to implement Extractive Industries Transparency 
Initiative (EITI) principles and criteria, or substantially 
similar principles and criteria related to the specific project 
to be carried out; and (2) the host country where the project 
is to be carried out has committed to EITI principles and 
criteria or substantially similar principles and criteria, or 
the host country is taking the necessary steps to establish 
functioning systems. Functioning systems include: accurately 
accounting for revenues and expenditures in connection with 
extraction; the independent audit of such revenues and 
expenditures and the widespread public dissemination of the 
finding of the audit; and verifying government receipts against 
company payments, including widespread dissemination of such 
payment information and disclosure of such documents as host 
government agreements. The legislation includes an exception to 
the above provision and allows for the Corporation to approve 
an extractive industry project, even if the host country has 
not committed to EITI or substantially similar principles and 
criteria and is not taking the necessary steps to establish 
functioning accounting, auditing and government receipt 
verification systems, provided that the host government does 
not prevent the eligible investor from implementing EITI or 
substantially similar principles and criteria related to the 
specific project to be carried out.
    ``Extractive industry'' refers to an enterprise engaged in 
the exploration, development, or extraction of oil and gas 
reserves, metal ores, gemstones, industrial minerals, or coal. 
By ``substantially similar principles and criteria,'' the 
committee means the general agreement of EITI principles, as 
well as the adoption of specific criteria, including:

   1. Regular publication of all material oil, gas and mining 
            payments by companies to governments and all 
            material revenues received by governments from oil, 
            gas and mining companies to a wide audience in a 
            publicly accessible, comprehensive and 
            comprehensible manner;

   2. Payments and revenues are reconciled by a credible, 
            independent administrator, applying international 
            auditing standards and with publication of the 
            administrator's opinion regarding that 
            reconciliation including discrepancies, should any 
            be identified;

   3. This approach should be extended to all companies 
            including state-owned enterprises; and

   4. Civil society is actively engaged as a participant in the 
            design, monitoring and evaluation of this process 
            and contributes towards public debate.

    Finally, this section requires the Corporation, to the 
extent practicable and consistent with its development 
objectives, to give preference to projects where both the 
eligible investor and host country have agreed to implement 
EITI principles and criteria, or substantially similar 
principles and criteria.

Increased Transparency and Public Participation

    The committee commends OPIC for its transparency initiative 
implemented in response to the 2003 reauthorization committee 
report. This section furthers transparency by amending section 
231A(c)(2) of the FAA to require OPIC to provide advance notice 
and information regarding all projects considered by the Board 
of Directors. The committee wants to ensure there is a robust 
exchange of information and viewpoints prior to Board 
discussion of potential projects. In the past, public hearings 
scheduled by OPIC to receive views regarding the activities of 
the Corporation have been sparsely attended or cancelled due to 
lack of attendance. The committee believes public input would 
be enhanced by requiring OPIC to make information available in 
advance about potential projects to be voted on by the Board of 
Directors. The legislation is intended to address this 
information gap and ensure that interested parties are aware in 
advance about the public hearing date and have sufficient 
information in order to prepare for such a hearing.
    The legislation directs the Corporation to hold a public 
hearing in order to afford an opportunity for any person to 
present view regarding the activities of the Corporation. It 
shall notice such a hearing at least 20 days in advance. To 
ensure participants are adequately prepared for such a hearing, 
at least 15 days in advance, the Corporation shall make 
available a public summary of each project, not including any 
confidential business information, including information 
related to workers rights, as well as information related to 
the project's social and environmental impacts.
    The legislation also directs the Corporation to make 
available to the public the detailed methodology used to assess 
and monitor the impact of projects supported by the Corporation 
related to host-country environmental and development impact, 
project impact toward employment in the United States and the 
protection of internationally recognized worker rights, as well 
as the elimination of discrimination with respect to employment 
and occupation, in host countries.
    The legislation furthers additional transparency toward 
``Category A'' projects, which are projects that have a 
significant adverse environmental impact. ``Category A 
project'' means a project or other activity for which the 
Corporation proposes to provide insurance, reinsurance, a 
guaranty, financing, or other assistance and which is likely to 
have a significant adverse environmental impact. OPIC's Board 
of Directors may not vote in favor of any action proposed to be 
taken by the Corporation on any Category A project until at 
least 60 days after the Corporation makes available for public 
comment a summary of the project and relevant information about 
the project. Such summaries, which shall not include 
confidential business information, shall be made available to 
groups in the area that may be impacted by the proposed project 
and to NGOs in the host country. To the extent practicable, the 
Corporation shall publish responses to comments received with 
respect to a Category A project and submit the responses to the 
Board not later than 7 days before a vote is to be taken for 
action on the project.
    The committee commends the Corporation for establishing an 
Office of Accountability. The Corporation shall continue to 
maintain an Office of Accountability to provide, to the maximum 
extent practicable, upon request, problem-solving services for 
projects supported by the Corporation and to review the 
Corporation's compliance with its environmental, social, 
internationally recognized worker rights, human rights, and 
transparency policies and procedures. The committee expects the 
Office of Accountability to continue to operate in a manner 
that is fair, objective, and transparent.

    The committee expects that:

   The transparency commitments made by OPIC Acting President 
        in his April 7, 2009 letter to the Committee on Foreign 
        Relations for the Senate and the Committee on Foreign 
        Affairs for the House of Representatives, will be 
        faithfully implemented by the Corporation, and will 
        apply consistently to all projects and subprojects. 
        OPIC's commitment to improved coordination with locally 
        affected communities found in the September 21, 2006 
        OPIC Anti-Corruption and Transparency Initiative Fact 
        Sheet will also be faithfully implemented. In addition, 
        the brief project summaries will identify environmental 
        and social policies that will be applied to the project 
        and subprojects will include developmental, labor, and 
        worker rights policies.

   OPIC's definition of ``business confidential'' should be 
        consistent with FOIA definition as per 5 U.S.C. 
        Sec. 552(b)(4) and pursuant to the guidance of the U.S. 
        Department of Justice.

   Mandatory Board approval (and 60 day public notice and 
        comment period) should be required for all Category A 
        projects.

   Within one year of the date of enactment of this act, the 
        OPIC Board of Directors should consider a proposal to 
        include discussion and/or votes on projects as part of 
        the open session of board meetings.

   The statutorily required review of proposed OPIC assessment 
        and monitoring methodology should include the 
        subsequent revision of this methodology. This review 
        and revision will recur on every 3 years, and a minimum 
        of 60 days of public comment will be provided. A 
        summary of the project monitoring reports should also 
        be disclosed.

   Regarding 60 day public notice and comment period for 
        Category A projects, detailed information, including 
        documentation that project related information has been 
        made available to potentially affected peoples in the 
        host country in a language and manner of distribution 
        that is accessible to them, will be required to be made 
        available at least 60 days in advance of the Board 
        meeting

   All new Host Country Notifications, Third Party Independent 
        Audits Certification and Summaries of Category A 
        Projects and Subprojects for which OPIC received an 
        application after the effective date of OPIC's 
        Transparency Initiative commitments, will be made 
        publicly available on OPIC's website as soon as they 
        are issued.

   Statutory requirements for the Office of Accountability 
        will result in independence of budget and power to 
        approve expenditures associated with that budget, and 
        its ability to carry out investigations and analysis 
        should not be dictated by OPIC management. This 
        includes, but is not limited to, the freedom of the 
        Office of Accountability staff and its designates to 
        travel in fulfillment of the Office of Accountability's 
        duties.

Investment Funds and Other Financial Intermediaries

    The committee expects that:

   All requirements for OPIC projects should be applied to 
        ``sub-projects,'' investment funds, and other financial 
        intermediaries.

   All Category A subprojects should be approved by OPIC and 
        include the public comment period and publication of 
        environmental and social assessments.

   Contract language:  Language pertaining to environmental, 
        social and labor requirements must be written into all 
        contracts between OPIC-supported investment funds, 
        financial intermediaries and the companies and 
        ``subprojects'' in which they invest.

    The committee expects that analysis of fund performance in 
the Annual Report shall identify and describe each subproject 
supported by OPIC Investment Funds, including an analysis of 
the performance of each fund. Such analysis shall identify the 
domicile of each fund, all subprojects of each fund, the 
categorization of each subproject (i.e. category A, B), and 
provide descriptions of environmental and social impacts of 
each subproject.
    Given the current financial climate and the opaque nature 
of offshore funds, the committee expects that OPIC will 
continue to take every precaution to ensure that any funds 
domiciled offshore meet the requirements of all relevant U.S. 
statutes.

    Ineligibility of Persons Doing Certain Business with State 
Sponsors of Terrorism.  The bill adds a new subsection (m) to 
Section 239 of the FAA to make ineligible for OPIC assistance 
persons with certain business activity in or with state 
sponsors of terrorism. This will ensure that OPIC assistance 
will not go towards entities, parent companies or affiliates 
that are engaged in a discouraged transaction with a ``state 
sponsor of terrorism.''
    The legislation is meant to strike a balance between 
concern that the Corporation refrain from directing any support 
towards entities engaged in a discouraged transaction with a 
state sponsor of terrorism, while ensuring the Corporation is 
able to function in an effective and efficient manner and that 
certification requirements will not have a chilling effect on 
potential applicants.
    The Corporation has provided the committee with assurances 
that the certification required by this section will require 
the certifying officer to affirm that they have taken measures 
necessary to determine whether their firm and any applicable 
affiliated entities are engaged in discouraged transactions, 
and if necessary, has received any information and cooperation 
from affiliated entities needed to make the certification.
    ``State sponsor of terrorism'' means any country the 
government of which the Secretary of State has determined has 
repeatedly provided support for acts of international terrorism 
pursuant to the Export Administration Act of 1979 and the Arms 
Export Control Act. This does not include Southern Sudan, 
Southern Kordofan/Nuba Mountains State, Blue Nile State, and 
Abyei, Darfur, if the Corporation, with concurrence of the 
Secretary of State, Determines that providing assistance for 
projects in such regions will provide emergency relief, promote 
economic self-sufficiency, or implement a nonmilitary program 
in support of a viable peace agreement in Sudan.
    OPIC officials have committed to consult closely with the 
Secretary of State to ensure that any support provided to 
projects within Gaza is consistent with U.S. policy objectives. 
In addition, the committee expects the Corporation to consult 
with Senate Committee on Foreign Relations and the House 
Committee on Foreign Affairs before approval of assistance to 
such projects.

    Increasing Project Requirements Regarding Employment.  This 
section amends section 231A of the Foreign Assistance Act (FAA) 
to require OPIC to take certain measures to strengthen the 
rights of workers overseas. The committee believes that 
promoting internationally recognized worker rights is an 
integral component of U.S. foreign policy, and OPIC plays an 
important role in this effort. The bill directly links workers 
rights standards in OPIC-supported projects to standards 
established under the Generalized System of Preferences (GSP) 
in the Trade Act of 1974 and directs that the Corporation can 
only provide assistance to prospective applicants if: 1) the 
country in which the project is to be undertaken is eligible 
under GSP; or 2) the country in which the project is to be 
undertaken is not eligible under GSP but has taken or is taking 
steps to afford workers in the country internationally 
recognized worker rights. The committee expects OPIC to 
implement a thorough review of its approval process for 
determining the eligibility of non-GSP cleared countries to 
ensure that OPIC assistance is not directed towards those 
countries that fail to respect internationally recognized 
worker rights. The committee also expects OPIC to carefully 
review all project applications to ensure that project sponsors 
have not previously committed, or are currently committing, 
significant violations of internationally recognized worker 
rights. OPIC should monitor project compliance, and review any 
complaints related to a project.
    ``Internationally recognized worker rights'' follows the 
definition provided in section 507(4) of the Trade act of 1974. 
The worker rights limitation does not apply to the provision of 
humanitarian services. If Congress raises GSP workers rights 
standards, then workers rights standards for OPIC projects in 
GSP eligible countries will also increase. The legislation 
directs OPIC to refer to information contained in reports 
required by this Act and the Trade Act of 1974 as well as other 
relevant information--including observations, reports and 
recommendations of the International Labor Organization--when 
making worker rights determinations for purposes of project 
eligibility. In addition, the legislation removes a waiver 
previously granted to the president of OPIC allowing the 
Corporation to support projects ``in the national interest'' 
that may fall below established worker rights standards. 
Finally, the legislation adds an ``elimination of 
discrimination with respect to employment and occupation'' 
clause to the worker rights standard.

    Climate Change Mitigation.  The committee directs OPIC to 
institute a climate change mitigation action plan. Climate 
change is one of the critical issues facing the international 
community and has especially serious implications for 
developing countries. The committee believes that agencies such 
as OPIC, whose mandate is to promote economic and social 
development in less developed countries, has an important role 
to play toward mitigating climate change and energy security. 
The committee commends OPIC for the strong leadership role it 
has assumed through its greenhouse gas and clean energy 
initiative, and urges the Corporation to continue to sustain 
such efforts. To ensure this momentum is not lost, the 
legislation directs the Corporation to establish benchmark 
clean energy technology, climate mitigation and greenhouse gas 
goals. Within 180 days of enactment, the Corporation must 
institute a plan that will include the following:
    First, OPIC shall establish a goal for substantially 
increasing support of projects that use, develop, or otherwise 
promote the use of clean energy technology during the 10-year 
period beginning on the date of enactment of this Act. This 
should include preferential treatment to evaluating and 
awarding assistance for projects that use, develop, or 
otherwise promote the use of clean energy technologies.
    Second, when the agency undertakes environmental impact 
assessments of potential projects, it shall take into account 
the degree to which the project contributes to the emission of 
greenhouse gases. This subsection applies to all projects, not 
just those classified as ``Category A,'' and shall not be 
construed to eliminate any other requirement found elsewhere in 
law.
    Third, OPIC shall continue to maintain a goal for reducing 
direct greenhouse gas emissions associated with projects in the 
Corporation's portfolio by 20 percent during the 10-year period 
beginning on the date of enactment, as well as a goal for 
limiting annual investment in projects that have significant 
greenhouse gas emissions in a manner that will help achieve a 
20-percent reduction in greenhouse gas emissions over 10 years. 
The Corporation is directed to maintain a goal based on total 
aggregate greenhouse gas emissions of all projects in a manner 
compatible with the findings and actions taken under the United 
Nations Framework Convention on Climate Change.
    The committee includes the following reporting requirements 
to be included in the Corporation's annual report: Annual 
greenhouse gas emissions attributable to each project that has 
significant greenhouse gas emissions in the Corporation's 
active portfolio; estimated greenhouse gas emissions for each 
new project that has significant greenhouse gas emissions; 
extent to which the Corporation is meeting its greenhouse gas 
reduction goals; and a listing of each new project supported by 
the Corporation that involves renewable energy and 
environmentally beneficial products and services, including 
clean energy technology. In submitting its annual report, the 
``reporting requirements'' in this subsection apply to all 
projects, including those implemented through financial 
intermediaries.
    ``Clean technology'' refers to a renewable energy supply or 
end-use technology that, compared over its life cycle to a 
similar technology already in widespread commercial use within 
a given country, will reduce emissions of greenhouse gases or 
decrease energy intensity of operation, substantially lower 
emissions of air pollutants, or generate substantially smaller 
and less hazardous quantities of solid and liquid waste. 
``Clean'' end-use technologies include end-use energy 
efficiency measures that achieve substantial reductions in 
greenhouse gas emissions. ``Clean'' end-use technologies do not 
include HFC-23 abatement projects.

    The committee expects the President of OPIC to provide the 
following information within one year of the date of enactment 
of this Act:

   An update of OPIC's methodology for accounting for GHG 
        emissions in consultation with the public. Such 
        methodology shall account for all OPIC supported 
        projects and sub-projects that have GHG emissions of 
        more than 25,000 tonnes of CO2-equivalent 
        per year.

   Measures to be taken to reduce GHG emissions of all OPIC 
        supported projects and subprojects, as rapidly as 
        practicable, all projects and subprojects in which OPIC 
        invests, by at least 50 percent by 2023 with a goal of 
        limiting new carbon additions in proportional annual 
        increments.

   Inclusion in each annual report under section 240A: (i) 
        annual GHG emissions of the Corporation, (ii) annual 
        GHG emissions of each project that OPIC supports that 
        are estimated to emit more than 25,000 tonnes of 
        CO2 eq.

Environmental and Social Guidelines

    The committee has strongly directed the Corporation to 
issue regulations of the highest standards in terms of 
environmental and social guidelines that can be feasibly 
implemented. Not only should these guidelines be no less 
rigorous than those the Corporation has made publicly available 
as of June 3, 2009 and of the environmental and social policies 
of the World Bank Group, these guidelines should also 
incorporate the highest of standards, whether from the World 
Bank Group or other relevant institutions. For example, the 
Asian Development Bank, having conducted a multi-year process 
of rewriting its environmental and social policies, proposes 
that draft full environmental impact assessments for all 
category A private sector and public sector projects be 
publicly disclosed 120 days prior to Board consideration, 
proposes that draft full EAIs for Category A subprojects are 
required to be disclosed 120 days before approval by the 
appropriate body (e.g., the ADB Board), and proposes that 
environmental assessments be required for all Bank financed or 
administered projects and their components, regardless of the 
source of financing (i.e. whether financed by the ADB, co-
financed, or financed by borrower).
    Scoring.  In early 2009, the Congressional Budget Office 
issued a document it described as a ``Notification,'' which 
proposed ``to stop crediting the Overseas Private Investment 
Corporation (OPIC) with savings of discretionary budget 
authority from the interest earned on its reserves of U.S. 
Treasury securities.''
    While this proposal was not adopted, the committee 
reexamined the relevant statutory requirements, and the 
committee fully expects that any assessment of OPIC's capacity 
to self-fund will include interest income from its holdings of 
U.S. securities. The committee strongly opposes redefining the 
interest earned on OPIC's reserves of U.S. Treasury securities 
as an intra-governmental transfer. Such an action would be 
inconsistent with OPIC's statutory mandates.

                            V. COST ESTIMATE

    In accordance with Rule XXVI, paragraph 11(a) of the 
Standing Rules of the Senate, the committee provides this 
estimate of 
the costs of this legislation prepared by the Congressional 
Budget Office.

                            United States Congress,
                               Congressional Budget Office,
                                       Washington, DC, May 7, 2009.

Hon. John F. Kerry,
Chairman, Committee on Foreign Relations,
U.S. Senate, Washington, DC.

    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 705, the Overseas 
Private Investment Corporation Reauthorization Act of 2009.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is John Chin.
        Sincerely,

                                              Douglas W. Elmendorf.

                                ------                                

               Congressional Budget Office Cost Estimate

                                                       May 7, 2009.

                                 S. 705

                Overseas Private Investment Corporation 
                      Reauthorization Act of 2009

  AS ORDERED REPORTED BY THE SENATE COMMITTEE ON FOREIGN RELATIONS ON 
                             MARCH 31, 2009

SUMMARY

    S. 705 would authorize the Overseas Private Investment 
Corporation (OPIC) to continue to issue political risk 
insurance and to finance investments in developing countries 
and emerging market economies with direct loans and loan 
guarantees. This authority, which is set to expire at the end 
of fiscal year 2009 under current law, would extend through 
September 30, 2013.
    CBO estimates that implementing S. 705 would cost $137 
million over the 2010-2014 period, assuming appropriation of 
the estimated amounts. Enacting the bill would not affect 
direct spending or revenues.
    S. 705 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.

ESTIMATED COST TO THE FEDERAL GOVERNMENT

    The estimated budgetary impact of S. 705 is shown in the 
following table. The costs of this legislation fall within 
budget function 150 (international affairs).

                           Changes in Spending Subject to Appropriation Due to S. 705
                                     By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
                                                       2010      2011      2012      2013      2014    2010-2014
----------------------------------------------------------------------------------------------------------------
Administrative Expenses
  Estimated Authorization Level....................       10        22        32        44        39        148
  Estimated Outlays................................        9        20        30        42        39        140
Insurance Program
  Estimated Authorization Level....................        5         8        10        10         7         40
  Estimated Outlays................................        2         5         8         9         9         33
Loan Program
  Estimated Authorization Level....................       27        19         8         1      -33          23
  Estimated Outlays................................       -1        -4        -9       -11      -11         -36
    Total Changes
      Estimated Authorization Level................       42        49        50        55        13        209
      Estimated Outlays............................       10        21        29        40        37        137
----------------------------------------------------------------------------------------------------------------

BASIS OF ESTIMATE

    For this estimate, CBO assumes that S. 705 will be enacted 
before the end of fiscal year 2009, that the necessary funds 
and authority will be provided in annual appropriation acts 
each fiscal year, and that outlays will follow historical 
spending patterns for OPIC activities.
    OPIC operates a program to insure investors in developing 
countries and emerging markets against financial losses due to 
expropriation, currency inconvertibility, and damage resulting 
from political violence. In addition, OPIC operates a loan 
program to finance such investment through direct loans and 
loan guarantees. The bill would authorize OPIC to issue new 
insurance policies, loans, and loan guarantees through 
September 30, 2013.
    The Omnibus Appropriations Act, 2009 (Public Law 111-8) 
authorized OPIC to continue issuing insurance policies and 
financing investments through the end of fiscal year 2009. 
Estimated spending under current law therefore assumes that 
OPIC continues to service its outstanding portfolio of 
insurance and loans and continues to receive interest on its 
current investments in U.S securities, but that it issues no 
new policies and finances no new investments after September 
30, 2009.

Administrative Expenses

    In 2009, OPIC received appropriations of $51 million for 
administrative expenses. CBO expects that under current law 
(that is, without reauthorization) total appropriations for 
administrative expenses would decline gradually from the 2009 
level to the minimum amount necessary to service its 
outstanding insurance and loans. CBO estimates that if the 
programs are reauthorized total appropriations for 
administrative expenses would remain at 2009 levels, adjusted 
for inflation, through 2013. Administrative expenses thereafter 
would only be needed to service outstanding insurance and 
loans. CBO estimates that under the bill additional 
administrative costs would total $140 million over the 2010-
2014 period, assuming appropriation of the necessary amounts.

Insurance Program

    CBO expects that under current law insurance premiums and 
claim payments would decline each year, based on historical 
data showing that about 20 percent of insurance policies are 
cancelled or reduced each year. CBO also anticipates that there 
would be no further obligations for project-specific expenses 
or various activities to encourage investment. Under the bill, 
CBO assumes that OPIC's insurance portfolio, premiums, and 
claims would remain at the estimated 2009 level through 2013. 
Given that claim payments have exceeded premiums in recent 
years, we estimate that, excluding relevant administrative 
expenses, extending the authority for OPIC's insurance program 
would result in a net cost of $33 million (claims paid out 
minus premiums paid in) over the 2010-2014 period.

Loan Program

    In 2009, OPIC received an appropriation of $29 million for 
the cost of loan subsidies as defined in the Federal Credit 
Reform Act. CBO expects that under current law subsidy costs 
would decline gradually from the 2009 level as disbursement of 
approved loans also decline. CBO estimates that under the bill 
subsidy costs would remain at 2009 levels, adjusted for 
inflation, through 2013. CBO estimates that additional subsidy 
costs under the bill would total $60 million over the 2010-2014 
period.
    For the past several years, the subsidy rate for many loan 
guarantees made by OPIC has been negative, thus generating 
discretionary offsetting collections. CBO expects that under 
current law such receipts would decline gradually from an 
estimated $40 million in 2009 to $5 million in 2014. We 
estimate that under the bill those collections would increase 
by $96 million over the 2010-2014 period.
    Thus, CBO estimates that, excluding relevant administrative 
expenses, reauthorizing OPIC's loan program would result in a 
net savings of $36 million over the 2010-2014 period--$60 
million in additional costs minus $96 million in additional 
receipts.

INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

    S. 705 contains no intergovernmental or private-sector 
mandates as defined in UMRA and would not affect the budgets of 
state, local, or tribal governments.

ESTIMATE PREPARED BY:

    Federal Costs: John Chin
    Impact on State, Local, and Tribal Governments: Jacob 
Kuipers
    Impact on the Private Sector: Burke Doherty

ESTIMATE APPROVED BY:

    Theresa Gullo, Deputy Assistant Director for Budget 
Analysis.

                   V. EVALUATION OF REGULATORY IMPACT

    Pursuant to Rule XXVI, paragraph 11(b) of the Standing 
Rules of the Senate, the committee has determined that there is 
no regulatory impact as a result of this legislation.

                      VI. CHANGES IN EXISTING LAW

    In compliance with Rule XXVI, paragraph 12 of the Standing 
Rules of the Senate, 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).

The Foreign Assistance Act of 1961

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           Title IV--Overseas Private Investment Corporation

    Sec. 231. Creation, Purpose and Policy.-- * * *

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    In carrying out its purpose, the Corporation, utilizing 
broad criteria, shall undertake--
    (a) to conduct financing, insurance, and reinsurance 
operations on a self-sustaining basis, taking into account in 
its financing operations the economic and financial soundness 
of projects;

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    [(f) to consider in the conduct of its operations the 
extent to which less developed country governments are 
receptive to private enterprise, domestic and foreign, and 
their willingness and ability to maintain conditions which 
enable private enterprise to make its full contribution to the 
development process;]
    (f) to the greatest degree practicable and consistent with 
the goals of the Corporation, to give preferential 
consideration to investment projects in any less developed 
country the government of which is receptive to both domestic 
and foreign private enterprise and to projects in any country 
the government of which is willing and able to maintain 
conditions that enable private enterprise to make a full 
contribution to the development process;

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    (m) to refuse to insure, reinsure, or finance any 
investment subject to performance requirements which would 
reduce substantially the positive trade benefits likely to 
accrue to the United States from the investment; [and]
    (n) to refuse to insure, reinsure, guarantee, or finance 
any investment in connection with a project which the 
Corporation determines will pose an unreasonable or major 
environmental, health, or safety hazard, or will result in the 
significant degradation of national parks or similar protected 
areas[.]; and
    (o) to decline to issue any contract of insurance or 
reinsurance, or any guaranty, or to enter into any agreement to 
provide financing or any other assistance for a prospective 
eligible investor who enters, directly or through an affiliate, 
into certain discouraged transactions with a state sponsor of 
terrorism.
    Sec. 231A. Additional Requirements.--[(a) Worker Rights.--
          [(1) Limitation on opic activities.--The Corporation 
        may insure, reinsure, guarantee, or finance a project 
        only if the country in which the project is to be 
        undertaken is taking steps to adopt and implement laws 
        that extend internationally recognized worker rights, 
        as defined in section 507(4) of the Trade Act of 1974, 
        to workers in that country (including any designated 
        zone in that country). The Corporation shall also 
        include the following language, in substantially the 
        following form, in all contracts which the Corporation 
        enters into with eligible investors to provide 
        financial support under this title:
          [``The investor agrees not to take actions to prevent 
        employees of the foreign enterprise from lawfully 
        exercising their right of association and their right 
        to organize and bargain collectively. The investor 
        further agrees to observe applicable laws relating to a 
        minimum age for employment of children, acceptable 
        conditions of work with respect to minimum wages, hours 
        of work, and occupational health and safety, and not to 
        use forced labor. The investor is not responsible under 
        this paragraph for the actions of a foreign 
        government.''
          [(2) Use of annual reports on workers rights.--The 
        Corporation shall, in making its determinations under 
        paragraph (1), use the reports submitted to the 
        Congress pursuant to section 504 of the Trade Act of 
        1974. The restriction set forth in paragraph (1) shall 
        not apply until the first such report is submitted to 
        the Congress.
          [(3) Waiver.--Paragraph (1) shall not prohibit the 
        Corporation from providing any insurance, reinsurance, 
        guaranty, or financing with respect to a country if the 
        President determines that such activities by the 
        Corporation would be in the national economic interests 
        of the United States. Any such determination shall be 
        reported in writing to the Congress, together with the 
        reasons for the determination.
          [(4) In making a determination under this section for 
        the People's Republic of China, the Corporation shall 
        discuss fully and completely the justification for 
        making such determination with respect to each item set 
        forth in subparagraphs (A) through (E) of section 
        507(4) \227\ of the Trade Act of 1974.]
    (a) Increasing Project Requirements Regarding Employment.--
          (1) In general.--The Corporation may insure, 
        reinsure, guaranty, or finance a project only if--
                  (A) the country in which the project is to be 
                undertaken is eligible for designation as a 
                beneficiary developing country under the 
                Generalized System of Preferences (19 U.S.C. 
                2461 et seq.) and has not been determined to be 
                ineligible for such designation on the basis of 
                section 502(b)(2)(G) of the Trade Act of 1974 
                (19 U.S.C. 2462(b)(2)(G)) (relating to 
                internationally recognized worker rights), or 
                section 502(b)(2)(H) of such Act (19 U.S.C. 
                2462(b)(2)(H) (relating to the worst forms of 
                child labor); or
                  (B) the country in which the project is to be 
                undertaken is not eligible for designation as a 
                beneficiary country under the Generalized 
                System of Preferences, the government of that 
                country has taken or is taking steps to afford 
                workers in the country (including any 
                designated zone or special administrative 
                region or area in that country) internationally 
                recognized worker rights (as defined in section 
                507(4) of the Trade Act of 1974) (19 U.S.C. 
                2467(4)).
          (2) Limitation inapplicable.--The limitation 
        contained in paragraph (1) shall not apply to providing 
        assistance for humanitarian services.
          (3) Use of reports.--The Corporation shall, in 
        implementing paragraph (1), consider--
                  (A) information contained in the reports 
                required by sections 116(d) and 502B(b) of this 
                Act and the report required by section 504 of 
                the Trade Act of 1974 (19 U.S.C. 2464);
                  (B) other relevant sources of information 
                readily available to the Corporation, including 
                observations, reports, and recommendations of 
                the International Labour Organization; and
                  (C) information provided in the hearing 
                required under subsection (c).
          (4) Contract language.--The Corporation shall include 
        the following language, in substantially the following 
        form, in all contracts which the Corporation enters 
        into with eligible investors to provide support under 
        this title:
          ``The investor agrees not to take any actions to 
        obstruct or prevent employees of the foreign enterprise 
        from exercising the employees' internationally 
        recognized worker rights (as defined in section 507(4) 
        of the Trade Act of 1974) (19 U.S.C. 2467(4)) and the 
        investor agrees to adhere to the obligations regarding 
        those rights. The investor agrees to prohibit 
        discrimination with respect to employment and 
        occupation.''
          (5) Preference to certain countries.--Consistent with 
        its development objectives, the Corporation shall give 
        preferential consideration to projects in countries 
        that--
                  (A) have adopted and maintained, in the 
                country's laws and regulations, internationally 
                recognized worker rights, as well as the 
                elimination of discrimination with respect to 
                employment and occupation; and
                  (B) are effectively enforcing those laws.

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    (c) Public Hearings.--(1) The Board shall hold at least one 
public hearing each year in order to afford an opportunity for 
any person to present views as to whether the Corporation is 
carrying out its activities in accordance with section 231 and 
this section or whether any investment in a particular country 
should have been or should be extended insurance, reinsurance, 
guarantees, or financing under this title.
    [(2) In conjunction with each meeting of its Board of 
Directors, the Corporation shall hold a public hearing in order 
to afford an opportunity for any person to present views 
regarding the activities of the Corporation. Such views shall 
be made part of the record.]
    (2) In conjunction with each meeting of its Board of 
Directors, the Corporation shall hold a public hearing in order 
to afford an opportunity for any person to present views 
regarding the activities of the Corporation. The Corporation 
shall provide notice of the hearing at least 20 days in before 
the hearing. At least 15 days in before the hearing the 
Corporation shall make available a public summary of each 
project, including information related to workers rights, to be 
considered at the meeting. The Corporation shall not include 
any confidential business information in the summary made 
available under this subsection. Any views expressed at the 
hearing or in written comments shall be made part of the 
record.

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    [(g) Pilot Equity Finance Program.--
          [(1) Authority for pilot program.--In order to study 
        the feasibility and desirability of a program of equity 
        financing, the Corporation is authorized to establish a 
        4-year pilot program under which it may, on the limited 
        basis prescribed in paragraphs (2) through (5), 
        purchase, invest in, or otherwise acquire equity or 
        quasi-equity securities of any firm or entity, upon 
        such terms and conditions as the Corporation may 
        determine, for the purpose of providing capital for any 
        project which is consistent with the provisions of this 
        title except that--
                  [(A) the aggregate amount of the 
                Corporation's equity investment with respect to 
                any project shall not exceed 30 percent of the 
                aggregate amount of all equity investment made 
                with respect to such project at the time that 
                the Corporation's equity investment is made, 
                except for securities acquired through the 
                enforcement of any lien, pledge, or contractual 
                arrangement as a result of a default by any 
                party under any agreement relating to the terms 
                of the Corporation's investment; and
                  [(B) the Corporation's equity investment 
                under this subsection with respect to any 
                project, when added to any other investments 
                made or guaranteed by the Corporation under 
                subsection (b) or (c) with respect to such 
                project, shall not cause the aggregate amount 
                of all such investment to exceed, at the time 
                any such investment is made or guaranteed by 
                the Corporation, 75 percent of the total 
                investment committed to such project as 
                determined by the Corporation.
                  [The determination of the Corporation under 
                subparagraph (B) shall be conclusive for 
                purposes of the Corporation's authority to make 
                or guarantee any such investment.
          [(2) Equity authority limited to projects in sub-
        saharan africa and caribbean basin and marine 
        transportation projects globally.--Equity investments 
        may be made under this subsection only in projects in 
        countries eligible for financing under this title that 
        are countries in sub-Saharan Africa or countries 
        designated as beneficiary countries under section 212 
        of the Caribbean Basin Economy Recovery Act and in 
        marine transportation projects in countries and areas 
        eligible for OPIC support worldwide using United States 
        commercial maritime expertise.
          [(3) Additional criteria.--In making investment 
        decisions under this subsection, the Corporation shall 
        give preferential consideration to projects sponsored 
        by or significantly involving United States small 
        business or cooperatives. The Corporation shall also 
        consider the extent to which the Corporation's equity 
        investment will assist in obtaining the financing 
        required for the project.
          [(4) Disposition of equity interest.--Taking into 
        consideration, among other things, the Corporations' 
        financial interests and the desirability of fostering 
        the development of local capital markets in less 
        developed countries, the Corporation shall endeavor to 
        dispose of any equity interest it may acquire under 
        this subsection within a period of 10 years from the 
        date of acquisition of such interest.
          [(5) Implementation.--To the extent provided in 
        advance in appropriations Acts, the Corporation is 
        authorized to create such legal vehicles as may be 
        necessary for implementation of its authorities, which 
        legal vehicles may be deemed non-Federal borrowers for 
        purposes of the Federal Credit Reform Act of 1990. 
        Income and proceeds of investments made pursuant to 
        this section 234(g) may be used to purchase equity or 
        quasi-equity securities in accordance with the 
        provisions of this section: Provided, however, That 
        such purchases shall not be limited to the 4-year 
        period of the pilot program: Provided further, That the 
        limitations contained in section 234(g)(2) shall not 
        apply to such purchases.
          [(6) Consultations with congress.--The Corporation 
        shall consult annually with the Committee on Foreign 
        Affairs of the House of Representatives and the 
        Committee on Foreign Relations of the Senate on the 
        implementation of the pilot equity finance program 
        established under this subsection.]
    [(h)] (g) Local Currency Guaranties for Eligible 
Investors.--To issue to--
          (1) eligible investors, or
          (2) local financial institutions, guaranties, 
        denominated in currencies other than United States 
        dollars, of loans and other investments made to 
        projects sponsored by or significantly involving 
        eligible investors, assuring against loss due to such 
        risks and upon such terms and conditions as the 
        Corporation may determine, for projects that the 
        Corporation determines to have significant 
        developmental effects or as the Corporation determines 
        to be necessary or appropriate to carry out the 
        purposes of this title.

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    Sec. 234. Investment Insurance and Other Programs.--The 
Corporation is hereby authorized to do the following:
    (a) Investment Insurance.--(1) To issue insurance, upon 
such terms and conditions as the Corporation may determine, to 
eligible investors assuring protection in whole or in part 
against any or all of the following risks with respect to 
projects which the Corporation has approved--

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    (b) Investment Guaranties.--To issue to eligible investors 
guaranties of loans and other investments made by such 
investors assuring against loss due to such risks and upon such 
terms and conditions as the Corporation may determine: 
Provided, however, That such guaranties on other than loan 
investments shall not exceed 75 per centum of such investment: 
Provided further, That except for loan investments for credit 
unions made by eligible credit unions or credit union 
associations, the aggregate amount of investment (exclusive of 
interest and earnings) so guaranteed with respect to any 
project shall not exceed, at the time of issuance of any such 
guaranty, 75 per centum of the total investment committed to 
any such project as determined by the Corporation, which 
determination shall be conclusive for purposes of the 
Corporation's authority to issue any such guaranty: Provided 
further, That not more than 15 per centum of the maximum 
contingent liability of investment guaranties which the 
Corporation is permitted to have outstanding under section 
[235(a)(2)] 235(a)(1) shall be issued to a single investor.

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SEC. 234A. ENHANCING PRIVATE POLITICAL RISK INSURANCE INDUSTRY.

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SEC. 234B. EXTRACTION INVESTMENT.

    (a) Extraction Investments.--
          (1) Prior notification to congressional committees.--
                  (A) In general.--The Corporation shall 
                provide notice of consideration of approval of 
                a project described in subparagraph (B) to the 
                Committees on Foreign Relations and 
                Appropriations of the Senate and the Committees 
                on Foreign Affairs and Appropriations of the 
                House of Representatives not later than 60 days 
                before approval of such project.
                  (B) Project described.--A project described 
                in this subparagraph is a Category A project 
                (as defined in section 237(q)(3)) relating to 
                an extractive industry project or any 
                extractive industry project for which the 
                assistance to be provided by the Corporation is 
                valued at $10,000,000 or more (including 
                contingent liability).
          (2) Commitment to eiti principles.--
                  (A) In general.--Except as provided in 
                subparagraph (B), the Corporation may approve a 
                contract of insurance, reinsurance, a guaranty, 
                or enter into an agreement to provide financing 
                to an eligible investor for a project that 
                significantly involves an extractive industry 
                only if--
                          (i) the eligible investor has agreed 
                        to implement the Extractive Industries 
                        Transparency Initiative principles and 
                        criteria, or substantially similar 
                        principles and criteria related to the 
                        specific project to be carried out; and
                          (ii)(I) the host country where the 
                        project is to be carried out has 
                        committed to the Extractive Industries 
                        Transparency Initiative principles and 
                        criteria, or substantially similar 
                        principles and criteria; or
                          (II) the host country where the 
                        project is to be carried out has in 
                        place or is taking the necessary steps 
                        to establish functioning systems for--
                                  (aa) accurately accounting 
                                for revenues and expenditures 
                                in connection with the 
                                extraction and export of the 
                                type of natural resource to be 
                                extracted or exported;
                                  (bb) the independent audit of 
                                such revenues and expenditures 
                                and the widespread public 
                                dissemination of the finding of 
                                the audit; and
                                  (cc) verifying government 
                                receipts against company 
                                payments, including widespread 
                                dissemination of such payment 
                                information, and disclosure of 
                                such documents as host 
                                government agreements, 
                                concession agreements, and 
                                bidding documents, and allowing 
                                in any such dissemination or 
                                disclosure for the redaction 
                                of, or exceptions for, 
                                information that is 
                                commercially proprietary or 
                                that would create a competitive 
                                disadvantage.
                  (B) Exception.--If a host country does not 
                meet the requirements of subparagraph (A)(ii) 
                (I) or (II), the Corporation may approve a 
                contract of insurance, reinsurance, or a 
                guaranty, or enter into an agreement to provide 
                financing for a project in the host country if 
                the Corporation determines it is in the foreign 
                policy interest of the United States for the 
                Corporation to provide support for the project 
                in the host country and the host country does 
                not prevent an eligible investor from complying 
                with subparagraph (A)(i).
          (3) Preference for certain projects.--With respect to 
        all projects that significantly involve an extractive 
        industry, the Corporation, to the extent practicable 
        and consistent with the Corporation's development 
        objectives, shall give preference to a project in which 
        the eligible investor has agreed to implement the 
        Extractive Industries Transparency Initiative 
        principles and criteria, or substantially similar 
        principles and criteria, and the host country where the 
        project is to be carried out has committed to the 
        Extractive Industries Transparency Initiative 
        principles and criteria, or substantially similar 
        principles and criteria.
          (4) Effect on other requirements.--Nothing in this 
        subsection shall affect the limitations and 
        prohibitions with respect to direct investments 
        described in section 234(c).
          (5) Reporting requirement.--The Corporation shall 
        include in each annual report required under section 
        240A a description of its activities to carry out this 
        subsection.
    (b) Extractive Industry.--The term ``extractive industry'' 
refers to an enterprise engaged in the exploration, 
development, or extraction of oil and gas reserves, metal ores, 
gemstones, industrial minerals (except rock used for 
construction purposes), or coal.

SEC. 235. ISSUING AUTHORITY, DIRECT INVESTMENT AUTHORITY AND 
                    RESERVES.--

    (a) Issuing Authority.--
          (1) Insurance and financing.--(A) The maximum 
        contingent liability outstanding at any one time 
        pursuant to insurance issued under section 234(a), and 
        the amount of financing issued under sections 234(b) 
        and (c), shall not exceed in the aggregate 
        $29,000,000,000.
          (B) Subject to spending authority provided in 
        appropriations Acts pursuant to section 504(b) of the 
        Federal Credit Reform Act of 1990, the Corporation is 
        authorized to transfer such sums as are necessary from 
        its noncredit activities to pay for the subsidy and 
        administrative costs of the investment guaranties and 
        direct loan programs under subsections (b) and (c) of 
        section 234.
          (2) Termination of authority.--The authority of 
        subsections (a), (b), and (c) of section 234 shall 
        continue until [2007] September 30, 2013.

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    [(e) There is hereby authorized to be transferred to the 
Corporation at its call, for the purposes specified in section 
236, all fees and other revenues collected under predecessor 
guaranty authority from December 31, 1968, available as of the 
date of such transfer.]
    [(f)] (e) There are authorized to be appropriated to the 
Corporation, to remain available until expended, such amounts 
as may be necessary from time to time to replenish or increase 
the noncredit account revolving fund, to discharge the 
liabilities under insurance, reinsurance, or guaranties issued 
by the Corporation or issued under predecessor guaranty 
authority, or to discharge obligations of the Corporation 
purchased by the Secretary of the Treasury pursuant to this 
subsection. However, no appropriations shall be made to augment 
the noncredit account revolving fund until the amount of funds 
in the noncredit account revolving fund is less than 
$25,000,000. Any appropriations to augment the noncredit 
account revolving fund shall then only be made either pursuant 
to specific authorization enacted after the date of enactment 
of the Overseas Private Investment Corporation Amendments Act 
of 1974, or to satisfy the full faith and credit provision of 
section 237(c). In order to discharge liabilities under 
investment insurance or reinsurance, the Corporation is 
authorized to issue from time to time for purchase by the 
Secretary of the Treasury its notes, debentures, bonds, or 
other obligations; but the aggregate amount of such obligations 
outstanding at any one time shall not exceed $100,000,000. Any 
such obligation shall be repaid to the Treasury within one year 
after the date of issue of such obligation. Any such obligation 
shall bear interest at a rate determined by the Secretary of 
the Treasury, taking into consideration the current average 
market yield on outstanding marketable obligations of the 
United States of comparable maturities during the month 
preceding the issuance of any obligation authorized by this 
subsection. The Secretary of the Treasury shall purchase any 
obligation of the Corporation issued under this subsection, and 
for such purchase he may use as a public debt transaction the 
proceeds of the sale of any securities issued under the Second 
Liberty Bond Act after the date of enactment of the Overseas 
Private Investment Corporation Amendments Act of 1974. The 
purpose for which securities may be issued under such Bond Act 
shall include any such purchase.
    Sec. 237. General Provisions Relating to Insurance 
Guaranty, and Financing Program.--(a) Insurance guaranties, and 
reinsurance issued under this title shall cover investment made 
in connection with projects in any less developed friendly 
country or area with the government to which the President of 
the United States has agreed to institute a program for 
insurance, guaranties, or reinsurance.

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    (j) Each insurance, reinsurance, and guaranty contract 
executed by such officer or officers as may be designated by 
the Board shall be conclusively presumed to be issued in 
compliance with the requirements of this Act.

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    (m)(1) Before finally providing insurance, reinsurance, 
guarantees, or financing under this title for any 
environmentally sensitive investment in connection with a 
project in a country, the Corporation shall notify appropriate 
government officials of that country of--
          (A) all guidelines and other standards adopted by the 
        International Bank for Reconstruction and Development 
        and any other international organization relating to 
        the public health or safety or the environment which 
        are applicable to the project; and
          (B) to the maximum extent practicable, any 
        restriction under any law of the United States relating 
        to public health or safety or the environment that 
        would apply to the project if the project were 
        undertaken in the United States.
    The notification under the preceding sentence shall include 
a summary of the guidelines, standards, and restrictions 
referred to in subparagraphs (A) and (B), and may include any 
environmental impact statement, assessment, review, or study 
prepared with respect to the investment pursuant to section 
[239(g)] 239(f).

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    (o) Use of Local Currencies.--Direct loans or investments 
made in order to preserve the value of funds received in 
inconvertible foreign currency by the Corporation as a result 
of activities conducted pursuant to section 234(a) shall not be 
considered in determining whether the Corporation has made or 
has outstanding loans or investments to the extent of any 
limitation on obligations and equity investment imposed by or 
pursuant to this title. The provisions of section 504(b) of the 
Federal Credit Reform Act of 1990 shall not apply to direct 
loan obligations made with funds described in this subsection.
    (p) Review of Methodology.--Not later than 180 days after 
the date of the enactment of the Overseas Private Investment 
Corporation Reauthorization Act of 2009, the Corporation shall 
make available to the public the methodology, including 
relevant regulations, used to assess and monitor the impact of 
projects supported by the Corporation--
          (1) on employment in the United States;
          (2) on development and the environment in host 
        countries; and
          (3) on the protection of internationally recognized 
        worker rights, as well as the elimination of 
        discrimination with respect to employment and 
        occupation, in host countries.
    (q) Public Notice Prior to Project Approval.--
          (1) Public notice.--
                  (A) In general.--The Board of Directors of 
                the Corporation may not vote in favor of any 
                action proposed to be taken by the Corporation 
                on a Category A project before the date that is 
                60 days after the Corporation--
                          (i) makes available for public 
                        comment a summary of the project and 
                        relevant information about the project; 
                        and
                          (ii) such summary and information 
                        described in clause (i) has been made 
                        available to groups in the area that 
                        may be impacted by the proposed project 
                        and to nongovernmental organizations in 
                        the host country.
                  (B) Exception.--The Corporation shall not 
                include any confidential business information 
                in the summary and information made available 
                under clauses (i) and (ii) of subparagraph (A).
          (2) Published response.--To the extent practicable, 
        the Corporation shall publish responses to the comments 
        received under paragraph (1)(A)(i) with respect to a 
        Category A project and submit the responses to the 
        Board not later than 7 days before a vote is to be 
        taken on any action proposed by the Corporation on the 
        project.
          (3) Category a project defined.--The term ``Category 
        A project'' means any project or other activity for 
        which the Corporation proposes to provide insurance, 
        reinsurance, a guaranty, financing, or other assistance 
        under this title and which is likely to have a 
        significant adverse environmental impact.
    (r) Office of Accountability.--The Corporation shall 
maintain an Office of Accountability to provide, to the maximum 
extent practicable, upon request, problem-solving services for 
projects supported by the Corporation and review of the 
Corporation's compliance with its environmental, social, 
internationally recognized worker rights, human rights, and 
transparency policies and procedures. The Office of 
Accountability shall operate in a manner that is fair, 
objective, and transparent.
    (s) Prohibition on Assistance for Certain Railway 
Projects.--The Corporation may not provide insurance, 
reinsurance, a guaranty, financing, or other assistance to 
support the development or promotion of a railway connection or 
railway-related connection that connects Azerbaijan and Turkey 
without connecting or traversing with Armenia.
    Sec. 239. General Provisions and Powers.--(a) The 
Corporation shall have its principal office in the District of 
Columbia and shall be deemed, for purposes of venue in civil 
actions, to be resident thereof.
    [(b) The President shall transfer to the Corporation, at 
such time as he may determine, all obligations, assets and 
related rights and responsibilities arising out of, or related 
to, predecessor programs and authorities similar to those 
provided for in section 234 (a), (b), and (d). Until such 
transfer, the agency heretofore responsible for such 
predecessor programs shall continue to administer such assets 
and obligations, and such programs and activities authorized 
under this title as may be determined by the President.]
    [(c)] (b)(1) The Corporation shall be subject to the 
applicable provisions of chapter 91 of title 31, United States 
Code, except as otherwise provided in this title.
    (2) An independent certified public accountant shall 
perform a financial and compliance audit of the financial 
statements of the Corporation at least once every three years, 
in accordance with generally accepted Government auditing 
standards for a financial and compliance audit, as issued by 
the Comptroller General. The independent certified public 
accountant shall report the results of such audit to the Board. 
The financial statements of the Corporation shall be presented 
in accordance with generally accepted accounting principles. 
These financial statements and the report of the accountant 
shall be included in a report which contains, to the extent 
applicable, the information identified in section 9106 of title 
31, United States Code, and which the Corporation shall submit 
to the Congress not later than six and one-half months after 
the end of the last fiscal year covered by the audit. The 
General Accounting Office may review the audit conducted by the 
accountant and the report to the Congress in the manner and at 
such times as the General Accounting Office considers 
necessary.
    (3) In lieu of the financial and compliance audit required 
by paragraph (2), the Government Accountability Office shall, 
if the Office considers it necessary or upon the request of the 
Congress, audit the financial statements of the Corporation in 
the manner provided in paragraph (2). The Corporation shall 
reimburse the Government Accountability Office for the full 
cost of any audit conducted under this paragraph.
    (4) All books, accounts, financial records, reports, files, 
workpapers, and property belonging to or in use by the 
Corporation and the accountant who conducts the audit under 
paragraph (2), which are necessary for purposes of this 
subsection, shall be made available to the representatives of 
the Government Accountability Office.
    [(d)] (c) To carry out the purposes of this title, the 
Corporation is authorized to adopt and use a corporate seal, 
which shall be judicially noticed; to sue and be sued in its 
corporate name; to adopt, amend, and repeal bylaws governing 
the conduct of its business and the performance of the powers 
and duties granted to or imposed upon it by law; to acquire, 
hold or dispose of, upon such terms and conditions as the 
Corporation may determine, any property, real, personal, or 
mixed, tangible or intangible, or any interest therein; to 
invest funds derived from fees and other revenues in 
obligations of the United States and to use the proceeds 
therefrom, including earnings and profits, as it shall deem 
appropriate; to indemnify directors, officers, employees and 
agents of the Corporation for liabilities and expenses incurred 
in connection with their Corporation activities; to require 
bonds of officers, employees, and agents and pay the premiums 
therefor; notwithstanding any other provision of law, to 
represent itself or to contract for representation in all legal 
and arbitral proceedings; to enter into limited-term contracts 
with nationals of the United States for personal services to 
carry out activities in the United States and abroad under 
subsections (d) and (e) of section 234; to purchase, discount, 
rediscount, sell, and negotiate, with or without its 
endorsement or guaranty, and guarantee notes, participation 
certificates, and other evidence of indebtedness (provided that 
the Corporation shall not issue its own securities, except 
participation certificates for the purpose of carrying out 
section 231(c) or participation certificates as evidence of 
indebtedness held by the Corporation in connection with 
settlement of claims under section 237(i)); to make and carry 
out such contracts and agreements as are necessary and 
advisable in the conduct of its business; to exercise the 
priority of the Government of the United States in collecting 
debts from bankrupt, insolvent, or decedents' estates; to 
determine the character of and the necessity for its 
obligations and expenditures, and the manner in which they 
shall be incurred, allowed, and paid, subject to provisions of 
law specifically applicable to Government corporations; to 
collect or compromise any obligations assigned to or held by 
the Corporation, including any legal or equitable rights 
accruing to the Corporation; and to take such actions as may be 
necessary or appropriate to carry out the powers herein or 
hereafter specifically conferred upon it.
    [(e)] (d) The Inspector General of the Agency for 
International Development (1) may conduct reviews, 
investigations, and inspections of all phases of the 
Corporation's operations and activities and (2) shall conduct 
all security activities of the Corporation relating to 
personnel and the control of classified material. With respect 
to his responsibilities under this subsection, the Inspector 
General shall report to the Board. The agency primarily 
responsible for administering part I shall be reimbursed by the 
Corporation for all expenses incurred by the Inspector General 
in connection with his responsibilities under this subsection.
    [(f)] (e) Except for the provisions of this title, no other 
provision of this or any other law shall be construed to 
prohibit the operation in Yugoslavia, Poland, Hungary, or any 
other East European country,\334\ or the People's Republic of 
China, or Pakistan of the programs authorized by this title, if 
the President determines that the operation of such program in 
such country is important to the national interest.
    [(g)] (f) The requirements of section 117(c) of this Act 
relating to environmental impact statements and environmental 
assessments shall apply to any investment which the Corporation 
insures, reinsures, guarantees, or finances under this title in 
connection with a project in a country.
    [(h)] (g) In order to carry out the policy set forth in 
paragraph (1) of the second undesignated paragraph of section 
231 of this Act, the Corporation shall prepare and maintain for 
each investment project it insures, finances, or reinsures, a 
development impact profile consisting of data appropriate to 
measure the projected and actual effects of such project on 
development. Criteria for evaluating projects shall be 
developed in consultation with the Agency for International 
Development.
    [(i)] (h) The Corporation shall take into account in the 
conduct of its programs in a country, in consultation with the 
Secretary of State, all available information about observance 
of and respect for human rights and fundamental freedoms in 
such country and the effect the operation of such programs will 
have on human rights and fundamental freedoms in such country. 
The provisions of section 116 of this Act shall apply to any 
insurance, reinsurance, guaranty, or loan issued by the 
Corporation for projects in a country, except that in addition 
to the exception (with respect to benefiting needy people) set 
forth in subsection (a) of such section, the Corporation may 
support a project if the national security interest so 
requires.
    [(j)] (i) The Corporation, including its franchise, 
capital, reserves, surplus, advances, intangible property, and 
income, shall be exempt from all taxation at any time imposed 
by the United States, by any territory, dependency, or 
possession of the United States, or by any State, the District 
of Columbia, or any county, municipality, or local taxing 
authority.
    [(k)](j) The Corporation shall publish, and make available 
to applicants for insurance, reinsurance, guarantees, 
financing, or other assistance made available by the 
Corporation under this title, the policy guidelines of the 
Corporation relating to its programs.
    (k) Congressional Notification of Increase in Maximum 
Contingent Liability.--The Corporation shall notify the 
Committee on Foreign Relations of the Senate and the Committee 
on Foreign Affairs of the House of Representatives not later 
than 15 days after the date on which the Corporation's maximum 
contingent liability outstanding at any time pursuant to 
insurance issued under section 234(a), and the amount of 
finfncing issued under section 234(b) and (c), exceeds the 
Corporation's maximum contingent liability for the preceding 
fiscal year by 25 percent or more.
    (l) Transparency and Accountability of Investment Funds.--
          (1) Competitive selection of investment fund 
        management.--With respect to any investment fund that 
        the Corporation creates on or after the date of the 
        enactment of the Overseas Private Investment 
        Corporation Reauthorization Act of 2009, the 
        Corporation may select persons to manage the fund only 
        by contract using competitive precedures that are full 
        and open.
          (2) Criteria for selection.--In assessing a proposal 
        for investment fund management, the Corporation shall 
        consider, in addition to other factors, the following:
                  (A) The prospective fund management's 
                experience, depth, and cohesiveness.
                  (B) The prospective fund management's track 
                record in investing risk capital in emerging 
                markets.
                  (C) The prospective fund management's 
                experience, management record, and monitoring 
                capabilities in the countries in which the 
                management operates, including details of local 
                presence (directly or through local alliances).
                  (D) The prospective fund management's 
                experience as a fiduciary in managing 
                institution capital, meeting reporting 
                requirements, and administration.
                  (E) The prospective fund management's record 
                in avoiding investments in companies that would 
                be disqualified under section 239(l).
          (3) Annual report.--The Corporation shall include in 
        each annual report under section 240A an analysis of 
        the investment fund portfolio of the Corporation, 
        including the following:
                  (A) Fund performance.--An analysis of the 
                aggregate financial performance of the 
                investment fund portfolio grouped by region and 
                maturity.
                  (B) Status of loan guaranties.--The amount of 
                guaranties committed by the Corporation to 
                support investment funds, including the 
                percentage of such amount that has been 
                disbursed to the investment funds.
                  (C) Risk ratings.--The definition of risk 
                ratings, and the current aggregate risk ratings 
                for the investment fund portfolio, including 
                the number of investment funds in each of the 
                Corporation's rating categories.
                  (D) Competitive selection of investment fund 
                management.--The number of proposals received 
                and evaluated for each newly established 
                investment fund.
    (m) Operations in Iraq.--Notwithstanding subsections (a) 
and (b) of section 237, the Corporation is authorized to 
undertake in Iraq any program authorized by this title.
    (n) State Sponsor of Terrorism.--
          (1) In general.--In order to carry out the policy set 
        forth in section 231(o) of this Act, the Corporation 
        shall require a certification from an officer of a 
        prospective OPIC-supported United States investor that 
        the investor and all affiliates of the investor are not 
        engaged in a discouraged transaction with a state 
        sponsor of terrorism.
          (2) Discouraged transaction.--In this subsection, the 
        term ``discouraged transaction'' means any of the 
        following activities:
                  (A) An investment commitment of $20,000,000 
                or more by the investor in the energy sector in 
                a state sponsor of terrorism.
                  (B) Any loan, or an extension of credit, to 
                the government of a state sponsor of terrorism 
                by the investor that--
                          (i) is outstanding on the date the 
                        Corporation enters into a contract with 
                        the investor; and
                          (ii) that has a value of more than 
                        $5,000,000, including the sale of goods 
                        for which payment is not required by 
                        the purchaser within 45 days.
                  (C) The transfer by the investor of goods 
                that are included on the United States 
                Munitions List, referred to in section 38(a)(1) 
                of the Arms Export Control Act (22 U.S.C. 
                2778(a)(1)) to a state sponsor of terrorism 
                within the 3-year period preceding the date the 
                Corporation enters into a contract with the 
                investor.
          (3) Exception.--An officer of a prospective OPIC-
        supported United States investor may provide a 
        certification under this subsection notwithstanding the 
        fact that an affiliate of the investor is engaged in a 
        discouraged transaction if the transaction is carried 
        out under a contract or other obligation of the 
        affiliate that was entered into or incurred before the 
        acquisition of such affiliate by the prospective OPIC-
        supported United States investor or the parent company 
        of the OPIC-supported United States investor.
          (4) Definitions.--In this subsection:
                  (A) Affiliate.--The term ``affiliate'' means 
                any person that is directly or indirectly 
                controlled by, under common control with, or 
                controls a prospective OPIC-supported United 
                States investor or the parent company of such 
                investor.
                  (B) Investment commitment in the energy 
                sector of a state sponsor of terrorism.--The 
                term ``investment commitment in the energy 
                sector of a state sponsor of terrorism'' means 
                any of the following activities if such 
                activity is undertaken pursuant to a 
                commitment, or pursuant to the exercise of 
                rights under a commitment, that was entered 
                into with the government of a state sponsor of 
                terrorism or a nongovernmental entity in a 
                country that is a state sponsor of terrorism:
                          (i) The entry into a contract that 
                        includes responsibility for the 
                        development or transportation of 
                        petroleum or natural gas resources 
                        located in a country that is a state 
                        sponsor of terrorism, or the entry into 
                        a contract providing for the general 
                        supervision or guaranty of another 
                        person's performance of such a 
                        contract.
                          (ii) The purchase of a share of 
                        ownership, including an equity 
                        interest, in the development of 
                        petroleum or natural resources 
                        described in clause (i).
                          (iii) The entry into a contract 
                        providing for the participation in 
                        royalties, earnings, or profits in the 
                        development of petroleum or natural 
                        resources described in clause (i), 
                        without regard to the form of the 
                        participation.
                  (C) State sponsor of terrorism.--The term 
                ``state sponsor of terrorism''--
                          (i) means any country the government 
                        of which the Secretary of State has 
                        determined has repeatedly provided 
                        support for acts of international 
                        terrorism pursuant to section 6(j) of 
                        the Export Administration Act of 1979, 
                        section 620A of this Act, or section 40 
                        of the Arms Export Control Act; and
                          (ii) does not include Southern Sudan, 
                        Southern Kordofan/Nuba Mountains State, 
                        Blue Nile State, and Abyei, Darfur, if 
                        the Corporation, with the concurrence 
                        of the Secretary of State, determines 
                        that providing assistance for projects 
                        in such regions will provide emergency 
                        relief, promote economic self-
                        sufficiency, or implement a nonmilitary 
                        program in support of a viable peace 
                        agreement in Sudan, such as the 
                        Comprehensive Peace Agreement for Sudan 
                        and the Darfur Peace Agreement.
    Sec. 240. Small Business Development.--(a) In General.-- * 
* *

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    (c) Resources Dedicated to Small Businesses, Cooperatives, 
and Other Small United States Investors.--The Corporation shall 
ensure that adequate personnel and resources, including senior 
officers, are dedicated to assist United States small 
businesses, cooperatives, and other small United States 
investors in obtaining insurance, reinsurance, financing, and 
other assistance under this title. The Corporation shall 
include, in each annual report under section 240A, the 
following information with respect to the period covered by the 
report:
          (1) A description of such personnel and resources.
          (2) The number of United States small businesses, 
        cooperatives, and other small United States investors 
        that received insurance, reinsurance, financing, and 
        other assistance from the Corporation, and the dollar 
        value of such insurance, reinsurance, financing, and 
        other assistance.
          (3) A description of the projects for which the 
        insurance, reinsurance, financing, and other assistance 
        was provided.
     Sec. 240A.  Reports to the Congress.--(a) After the end of 
each fiscal year, the Corporation shall submit to the Congress 
a complete and detailed report of its operations during such 
fiscal year. Such report shall include--
          (1) an assessment, based upon the development impact 
        profiles required by section [239(h)] 239(g), of the 
        economic and social development impact and benefits of 
        the projects with respect to which such profiles are 
        prepared, and of the extent to which the operations of 
        Corporation complement or are compatible with the 
        development assistance programs of the United States 
        and other donors; and
          (2) a description of any project for which the 
        Corporation--
                  (A) refused to provide any insurance, 
                reinsurance, guaranty, financing, or other 
                financial support, on account of violations of 
                human rights referred to in section [239(i)] 
                239(h); or
                  (B) notwithstanding such violations, provided 
                such insurance, reinsurance, guaranty, 
                financing, or financial support, on the basis 
                of a determination (i) that the project will 
                directly benefit the needy people in the 
                country in which the project is located, or 
                (ii) that the national security interest so 
                requires.

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