109TH CONGRESS

2D SESSION S. 3938

AN ACT

To reauthorize the Export-Import Bank of the United States.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Export-Import Bank

5 Reauthorization Act of 2006’’.
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1 SEC. 2. EXTENSION OF AUTHORITY.

2 Section 7 of the Export-Import Bank Act of 1945

3 (12 U.S.C. 635f) is amended by striking ‘‘2006’’ and in4 serting ‘‘2011’’.

5 SEC. 3. SUB-SAHARAN AFRICA ADVISORY COMMITTEE.

6 Section 2(b)(9)(B)(iii) of the Export-Import Bank

7 Act of 1945 (12 U.S.C. 635(b)(9)(B)(iii)) is amended by

8 striking ‘‘2006’’ and inserting ‘‘2011’’.

9 SEC. 4. EXTENSION OF AUTHORITY TO PROVIDE FINANC10 ING FOR THE EXPORT OF NONLETHAL DE11 FENSE ARTICLES OR SERVICES THE PRIMARY

12 END USE OF WHICH WILL BE FOR CIVILIAN

13 PURPOSES.

14 Section 1(c) of Public Law 103–428 (12 U.S.C. 635

15 note; 108 Stat. 4376) is amended by striking ‘‘2001’’ and

16 inserting ‘‘2011’’.

17 SEC. 5. DESIGNATION OF SENSITIVE COMMERCIAL SEC18 TORS AND PRODUCTS.

19 Section 2(e) of the Export-Import Bank Act of 1945

20 (12 U.S.C. 635(e)) is amended by adding at the end the

21 following new paragraph:

22 ‘‘(5) DESIGNATION OF SENSITIVE COMMERCIAL

23 SECTORS AND PRODUCTS.—Not later than 120 days

24 after the date of the enactment of this Act, the Ex25 port-Import Bank of the United States shall submit

26 a list to the Committee on Banking, Housing, and
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1 Urban Affairs of the Senate and the Committee on

2 Financial Services of the House of Representatives,

3 which designates sensitive commercial sectors and

4 products with respect to which the provision of fi5 nancing support by the Bank is deemed unlikely by

6 the President of the Bank due to the significant po7 tential for a determination that such financing sup8 port would result in an adverse economic impact on

9 the United States. The President of the Bank shall

10 review on an annual basis thereafter the list of sen11 sitive commercial sectors and products and the Bank

12 shall submit an updated list to the Committee on

13 Banking, Housing, and Urban Affairs of the Senate

14 and the Committee on Financial Services of the

15 House of Representatives of such sectors and prod16 ucts.’’.

17 SEC. 6. INCREASING EXPORTS BY SMALL BUSINESS.

18 (a) IN GENERAL.—Section 3 of the Export-Import

19 Bank Act of 1945 (12 U.S.C. 635a) is amended by adding

20 at the end the following:

21 ‘‘(f) SMALL BUSINESS DIVISION.—

22 ‘‘(1) ESTABLISHMENT.—There is established a

23 Small Business Division (in this subsection referred

24 to as the ‘Division’) within the Bank in order to—
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1 ‘‘(A) carry out the provisions of subpara2 graphs (E) and (I) of section 2(b)(1) relating to

3 outreach, feedback, product improvement, and

4 transaction advocacy for small business con5 cerns;

6 ‘‘(B) advise and seek feedback from small

7 business concerns on the opportunities and ben8 efits for small business concerns in the financ9 ing products offered by the Bank, with par10 ticular emphasis on conducting outreach, en11 hancing the tailoring of products to small busi12 ness needs and increasing loans to small busi13 ness concerns;

14 ‘‘(C) maintain liaison with the Small Busi15 ness Administration and other departments and

16 agencies in matters affecting small business

17 concerns; and

18 ‘‘(D) provide oversight of the development,

19 implementation, and operation of technology

20 improvements to strengthen small business out21 reach, including the technology improvement re22 quired by section 2(b)(1)(E)(x).

23 ‘‘(2) MANAGEMENT.—The President of the

24 Bank shall appoint an officer, who shall rank not

25 lower than senior vice president and whose sole exec-
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1 utive function shall be to manage the Division. The

2 officer shall—

3 ‘‘(A) have substantial recent experience in

4 financing exports by small business concerns;

5 and

6 ‘‘(B) advise the Board, particularly the di7 rector appointed under section 3(c)(8)(B) to

8 represent the interests of small business, on

9 matters of interest to, and concern for, small

10 business.

11 ‘‘(3) STAFF.—

12 ‘‘(A) DEDICATED PERSONNEL.—The

13 President of the Bank shall ensure that each

14 operating division within the Bank has staff

15 that specializes in processing transactions that

16 primarily benefit small business concerns.

17 ‘‘(B) RESPONSIBILITIES.—The small busi18 ness specialists shall be involved in all aspects

19 of processing applications for loans, guarantees,

20 and insurance to support exports by small busi21 ness concerns, including the approval or dis22 approval, or staff recommendations of approval

23 or disapproval, as applicable, of such applica24 tions. In carrying out these responsibilities, the

25 small business specialists shall consider the
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1 unique business requirements of small busi2 nesses and shall develop exporter performance

3 criteria tailored to small business exporters.

4 ‘‘(C) APPROVAL AUTHORITY.—In an effort

5 to maximize the speed and efficiency with which

6 the Bank processes transactions primarily bene7 fitting small business concerns, the small busi8 ness specialists shall be authorized to approve

9 applications for working capital loans and guar10 antees, and insurance in accordance with poli11 cies and procedures established by the Board.

12 ‘‘(D) IDENTIFICATION.—The Bank shall

13 prominently identify the small business special14 ists on its website and in promotional material.

15 ‘‘(E) EMPLOYEE EVALUATIONS.—The eval16 uation of staff designated by the President of

17 the Bank under subparagraph (A), including

18 annual reviews of performance of duties related

19 to transactions in support of exports by small

20 business concerns, and any resulting rec21 ommendations for salary adjustments, pro22 motions, and other personnel actions, shall ad23 dress the criteria established pursuant to sub24 section (g)(2)(B)(iii) and shall be conducted by

25 the manager of the relevant operating division
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1 following consultation with the senior vice presi2 dent of the Division.

3 ‘‘(F) STAFF RECOMMENDATIONS.—Staff

4 recommendations of denial or withdrawal for

5 medium-term applications, exporter held multi6 buyer policies, single buyer policies, and work7 ing capital applications processed by the Bank

8 shall be transmitted to the Senior Vice Presi9 dent of the Division not later than 2 business

10 days before a final decision.

11 ‘‘(4) RULE OF INTERPRETATION.—Nothing in

12 this Act shall be construed to prevent the delegation

13 to the Division of any authority necessary to carry

14 out subparagraphs (E) and (I) of section 2(b)(1).

15 ‘‘(g) SMALL BUSINESS COMMITTEE.—

16 ‘‘(1) ESTABLISHMENT.—There is established a

17 management committee to be known as the ‘Small

18 Business Committee’.

19 ‘‘(2) PURPOSE AND DUTIES.—

20 ‘‘(A) PURPOSE.—The purpose of the Small

21 Business Committee shall be to coordinate the

22 Bank’s initiatives and policies with respect to

23 small business concerns, including the timely

24 processing and underwriting of transactions in25 volving direct exports by small business con-
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1 cerns, and the development and coordination of

2 efforts to implement new or enhanced Bank

3 products and services pertaining to small busi4 ness concerns.

5 ‘‘(B) DUTIES.—The duties of the Small

6 Business Committee shall be determined by the

7 President of the Bank and shall include the fol8 lowing:

9 ‘‘(i) Assisting in the development of

10 the Bank’s small business strategic plans,

11 including the Bank’s plans for carrying out

12 section 2(b)(1)(E) (v) and (x), and meas13 uring and reporting in writing to the

14 President of the Bank, at least once a

15 year, on the Bank’s progress in achieving

16 the goals set forth in the plans.

17 ‘‘(ii) Evaluating and reporting in writ18 ing to the President of the Bank, at least

19 once a year, with respect to—

20 ‘‘(I) the performance of each op21 erating division of the Bank in serving

22 small business concerns;

23 ‘‘(II) the impact of processing

24 and underwriting standards on trans-
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1 actions involving direct exports by

2 small business concerns; and

3 ‘‘(III) the adequacy of the staff4 ing and resources of the Small Busi5 ness Division.

6 ‘‘(iii) Establishing criteria for evalu7 ating the performance of staff designated

8 by the President of the Bank under section

9 3(f)(3)(A).

10 ‘‘(iv) Coordinating with other United

11 States Government departments and agen12 cies the provision of services to small busi13 ness concerns.

14 ‘‘(3) COMPOSITION.—

15 ‘‘(A) CHAIRPERSON.—The Chairperson of

16 the Small Business Committee shall be the sen17 ior vice president of the Small Business Divi18 sion. The Chairperson shall have the authority

19 to call meetings of the Small Business Com20 mittee, set the agenda for Committee meetings,

21 and request policy recommendations from the

22 Committee’s members.

23 ‘‘(B) OTHER MEMBERS.—Except as other24 wise provided in this subsection, the President

25 of the Bank shall determine the composition of
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1 the Small Business Committee, and shall ap2 point or remove the members of the Small

3 Business Committee. In making such appoint4 ments, the President of the Bank shall ensure

5 that the Small Business Committee is com6 prised of—

7 ‘‘(i) the senior managing officers re8 sponsible for underwriting and processing

9 transactions; and

10 ‘‘(ii) other officers and employees of

11 the Bank with responsibility for outreach

12 to small business concerns and under13 writing and processing transactions that

14 involve small business concerns.

15 ‘‘(4) REPORTING.—The Chairperson shall pro16 vide to the President of the Bank minutes of each

17 meeting of the Small Business Committee, including

18 any recommendations by the Committee or its indi19 vidual members.’’.

20 (b) ENHANCE DELEGATED LOAN AUTHORITY FOR

21 MEDIUM TERM TRANSACTIONS.—

22 (1) IN GENERAL.—The Export-Import Bank of

23 the United States shall seek to expand the exercise

24 of authority under section 2(b)(1)(E)(vii) of the Ex25 port-Import Bank Act of 1945 (6 U.S.C.
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1 635(b)(1)(E)(vii)) with respect to medium term

2 transactions for small business concerns.

3 (2) CONFORMING AMENDMENT.—Section

4 2(b)(1)(E)(vii)(III) of the Export-Import Bank Act

5 of 1945 (12 U.S.C. 635(b)(1)(E)(vii)(III)) is amend6 ed by inserting ‘‘or other financing institutions or

7 entities’’ after ‘‘consortia’’.

8 (3) DEADLINE.—Not later than 180 days after

9 the date of the enactment of this Act, the Export10 Import Bank of the United States shall make avail11 able lines of credit and guarantees to carry out sec12 tion 2(b)(1)(E)(vii) of the Export-Import Bank Act

13 of 1945 pursuant to policies and procedures estab14 lished by the Board of Directors of the Export-Im15 port Bank of the United States.

16 SEC. 7. ANTI-CIRCUMVENTION.

17 Section 2(e) of the Export-Import Bank Act of 1945

18 (12 U.S.C. 635(e)) is amended—

19 (1) by inserting after paragraph (1), the fol20 lowing flush paragraph:

21 ‘‘In making the determination under subparagraph

22 (B), the Bank shall determine whether the facility

23 that would benefit from the extension of a credit or

24 guarantee is reasonably likely to produce commod25 ities in addition to or other than the commodity
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1 specified in the application and whether the produc2 tion of the additional commodities may cause sub3 stantial injury to United States producers of the

4 same, or a similar or competing, commodity.’’;

5 (2) in paragraph (2), by adding at the end the

6 following:

7 ‘‘(E) ANTI-CIRCUMVENTION.—The Bank

8 shall not provide a loan or guarantee if the

9 Bank determines that providing the loan or

10 guarantee will facilitate circumvention of a

11 trade law order or determination referred to in

12 subparagraph (A).’’; and

13 (3) by adding at the end the following:

14 ‘‘(5) FINANCIAL THRESHOLD DETERMINA15 TIONS.—For purposes of determining whether a pro16 posed transaction exceeds a financial threshold

17 under this subsection or under the procedures or

18 rules of the Bank, the Bank shall aggregate the dol19 lar amount of the proposed transaction and the dol20 lar amounts of all loans and guarantees, approved

21 by the Bank in the preceding 24-month period, that

22 involved the same foreign entity and substantially

23 the same product to be produced.’’.
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1 SEC. 8. TRANSPARENCY.

2 (a) IN GENERAL.—Section 2(e) of the Export-Import

3 Bank Act of 1945 (12 U.S.C. 635(e)), as amended by sec4 tion 7 of this Act, is amended by adding at the end the

5 following:

6 ‘‘(6) PROCEDURES TO REDUCE ADVERSE EF7 FECTS OF LOANS AND GUARANTEES ON INDUSTRIES

8 AND EMPLOYMENT IN UNITED STATES.—

9 ‘‘(A) CONSIDERATION OF ECONOMIC EF10 FECTS OF PROPOSED TRANSACTIONS.—If, in

11 making a determination under this paragraph

12 with respect to a loan or guarantee, the Bank

13 conducts a detailed economic impact analysis or

14 similar study, the analysis or study, as the case

15 may be, shall include consideration of—

16 ‘‘(i) the factors set forth in subpara17 graphs (A) and (B) of paragraph (1); and

18 ‘‘(ii) the views of the public and inter19 ested parties.

20 ‘‘(B) NOTICE AND COMMENT REQUIRE21 MENTS.—

22 ‘‘(i) IN GENERAL.—If, in making a

23 determination under this subsection with

24 respect to a loan or guarantee, the Bank

25 intends to conduct a detailed economic im26 pact analysis or similar study, the Bank
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1 shall publish in the Federal Register a no2 tice of the intent, and provide a period of

3 not less than 14 days (which, on request

4 by any affected party, shall be extended to

5 a period of not more than 30 days) for the

6 submission to the Bank of comments on

7 the economic effects of the provision of the

8 loan or guarantee, including comments on

9 the factors set forth in subparagraphs (A)

10 and (B) of paragraph (1). In addition, the

11 Bank shall seek comments on the effects

12 from the Department of Commerce, the

13 International Trade Commission, the Of14 fice of Management and Budget, the Com15 mittee on Banking, Housing, and Urban

16 Affairs of the Senate, and the Committee

17 on Financial Services of the House of Rep18 resentatives.

19 ‘‘(ii) CONTENT OF NOTICE.—The no20 tice shall include appropriate, nonpropri21 etary information about—

22 ‘‘(I) the country to which the

23 goods involved in the transaction will

24 be shipped;
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1 ‘‘(II) the type of goods being ex2 ported;

3 ‘‘(III) the amount of the loan or

4 guarantee involved;

5 ‘‘(IV) the goods that would be

6 produced as a result of the provision

7 of the loan or guarantee;

8 ‘‘(V) the amount of increased

9 production that will result from the

10 transaction;

11 ‘‘(VI) the potential sales market

12 for the resulting goods; and

13 ‘‘(VII) the value of the trans14 action.

15 ‘‘(iii) PROCEDURE REGARDING MATE16 RIALLY CHANGED APPLICATIONS.—

17 ‘‘(I) IN GENERAL.—If a material

18 change is made to an application for

19 a loan or guarantee from the Bank

20 after a notice with respect to the in21 tent described in clause (i) is pub22 lished under this subparagraph, the

23 Bank shall publish in the Federal

24 Register a revised notice of the intent,

25 and shall provide for a comment pe-
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1 riod, as provided in clauses (i) and

2 (ii).

3 ‘‘(II) MATERIAL CHANGE DE4 FINED.—In subclause (I), the term

5 ‘material change’, with respect to an

6 application, includes—

7 ‘‘(aa) a change of at least

8 25 percent in the amount of a

9 loan or guarantee requested in

10 the application; and

11 ‘‘(bb) a change in the prin12 cipal product to be produced as a

13 result of any transaction that

14 would be facilitated by the provi15 sion of the loan or guarantee.

16 ‘‘(C) REQUIREMENT TO ADDRESS VIEWS

17 OF ADVERSELY AFFECTED PERSONS.—Before

18 taking final action on an application for a loan

19 or guarantee to which this section applies, the

20 staff of the Bank shall provide in writing to the

21 Board of Directors the views of any person who

22 submitted comments pursuant to subparagraph

23 (B).

24 ‘‘(D) PUBLICATION OF CONCLUSIONS.—

25 Within 30 days after a party affected by a final
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1 decision of the Board of Directors with respect

2 to a loan or guarantee makes a written request

3 therefor, the Bank shall provide to the affected

4 party a non-confidential summary of the facts

5 found and conclusions reached in any detailed

6 economic impact analysis or similar study con7 ducted pursuant to subparagraph (B) with re8 spect to the loan or guarantee, that were sub9 mitted to the Board of Directors.

10 ‘‘(E) RULE OF INTERPRETATION.—This

11 paragraph shall not be construed to make sub12 chapter II of chapter 5 of title 5, United States

13 Code, applicable to the Bank.

14 ‘‘(F) REGULATIONS.—The Bank shall im15 plement such regulations and procedures as

16 may be appropriate to carry out this para17 graph.’’.

18 (b) CONFORMING AMENDMENT.—Section 2(e)(2)(C)

19 of such Act (12 U.S.C. 635(e)(2)(C)) is amended by in20 serting ‘‘of not less than 14 days (which, on request of

21 any affected party, shall be extended to a period of not

22 more than 30 days)’’ after ‘‘comment period’’.
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1 SEC. 9. AGGREGATE LOAN, GUARANTEE, AND INSURANCE

2 AUTHORITY.

3 Subparagraph (E) of section 6(a)(2) of the Export4 Import Bank Act of 1945 (12 U.S.C. 635e(a)(2)) is

5 amended to read as follows:

6 ‘‘(E) during fiscal year 2006, and each fis7 cal year thereafter through fiscal 2011.’’.

8 SEC. 10. TIED AID CREDIT PROGRAM.

9 Section 10(b)(5)(B)(ii) of the Export-Import Bank

10 Act of 1945 (12 U.S.C. 635i–3(b)(5)(B)(ii)) is amended

11 to read as follows:

12 ‘‘(ii) PROCESS.—In handling indi13 vidual applications involving the use or po14 tential use of the Tied Aid Credit Fund

15 the following process shall exclusively apply

16 pursuant to subparagraph (A):

17 ‘‘(I) The Bank shall process an

18 application for tied aid in accordance

19 with the principles and standards de20 veloped pursuant to subparagraph (A)

21 and clause (i) of this subparagraph.

22 ‘‘(II) Twenty days prior to the

23 scheduled meeting of the Board of Di24 rectors at which an application will be

25 considered (unless the Bank deter26 mines that an earlier discussion is ap-
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1 propriate based on the facts of a par2 ticular financing), the Bank shall

3 brief the Secretary on the application

4 and deliver to the Secretary such doc5 uments, information, or data as may

6 reasonably be necessary to permit the

7 Secretary to review the application to

8 determine if the application complies

9 with the principles and standards de10 veloped pursuant to subparagraph (A)

11 and clause (i) of subparagraph (B).

12 ‘‘(III) The Secretary may request

13 a single postponement of the Board of

14 Directors’ consideration of the appli15 cation for up to 14 days to allow the

16 Secretary to submit to the Board of

17 Directors a memorandum objecting to

18 the application.

19 ‘‘(IV) Case-by-case decisions on

20 whether to approve the use of the

21 Tied Aid Credit Fund shall be made

22 by the Board of Directors, except that

23 the approval of the Board of Directors

24 (or a commitment letter based on that

25 approval) shall not become final (ex-
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1 cept as provided in subclause (V)), if

2 the Secretary indicates to the Presi3 dent of the Bank in writing the Sec4 retary’s intention to appeal the deci5 sion of the Board of Directors to the

6 President of the United States and

7 makes the appeal in writing not later

8 than 20 days after the meeting at

9 which the Board of Directors consid10 ered the application.

11 ‘‘(V) The Bank shall not grant

12 final approval of an application for

13 any tied aid credit (or a commitment

14 letter based on that approval) if the

15 President of the United States, after

16 consulting with the President of the

17 Bank and the Secretary, determines

18 within 30 days of an appeal by the

19 Secretary under subclause (IV) that

20 the extension of the tied aid credit

21 would materially impede achieving the

22 purposes described in subsection

23 (a)(6). If no such Presidential deter24 mination is made during the 30-day

25 period, the approval by the Bank of
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1 the application (or related commit2 ment letter) that was the subject of

3 such appeal shall become final.’’.

4 SEC. 11. PROHIBITION ON ASSISTANCE TO DEVELOP OR

5 PROMOTE CERTAIN RAILWAY CONNECTIONS

6 AND RAILWAY-RELATED CONNECTIONS.

7 Section 2(b) of the Export-Import Act of 1945 (12

8 U.S.C. 635(b)) is amended by adding at the end the fol9 lowing new paragraph:

10 ‘‘(13) PROHIBITION ON ASSISTANCE TO DEVELOP

11 OR PROMOTE CERTAIN RAILWAY CONNECTIONS AND

12 RAILWAY-RELATED CONNECTIONS.—The Bank shall not

13 guarantee, insure, or extend (or participate in the exten14 sion of) credit in connection with the export of any good

15 or service relating to the development or promotion of any

16 railway connection or railway-related connection that does

17 not traverse or connect with Armenia and does traverse

18 or connect Baku, Azerbaijan, Tbilisi, Georgia, and Kars,

19 Turkey.’’.

Passed the Senate September 30 (legislative day,

September 29), 2006.

Attest:

Secretary.
109TH CONGRESS

2D SESSION S. 3938

AN ACT

To reauthorize the Export-Import Bank of the

United States.