Export-Import Bank Reform and Reauthorization Act of 2015

To reauthorize and reform the Export-Import Bank of the United States, and for other purposes. 1. Short title; table of contents (a) Short title This Act may be cited as the Export-Import Bank Reform and Reauthorization Act of 2015 (b) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. TITLE I—Taxpayer protection provisions and increased accountability Sec. 101. Reduction in authorized amount of outstanding loans, guarantees, and insurance. Sec. 102. Increase in loss reserves. Sec. 103. Review of fraud controls. Sec. 104. Office of Ethics. Sec. 105. Chief Risk Officer. Sec. 106. Risk Management Committee. Sec. 107. Independent audit of bank portfolio. Sec. 108. Pilot program for reinsurance. TITLE II—Promotion of small business exports Sec. 201. Increase in small business lending requirements. Sec. 202. Report on programs for small and medium-sized businesses. TITLE III—Modernization of operations Sec. 301. Electronic payments and documents. Sec. 302. Reauthorization of information technology updating. TITLE IV—General provisions Sec. 401. Extension of authority. Sec. 402. Certain updated loan terms and amounts. TITLE V—Other matters Sec. 501. Prohibition on discrimination based on industry. Sec. 502. Negotiations to end export credit financing. Sec. 503. Study of financing for information and communications technology systems. I Taxpayer protection provisions and increased accountability 101. Reduction in authorized amount of outstanding loans, guarantees, and insurance Section 6(a) of the Export-Import Bank Act of 1945 ( 12 U.S.C. 635e(a) (1) by redesignating paragraph (3) as paragraph (4); and (2) by striking paragraph (2) and inserting the following: (2) Applicable amount defined In this subsection, the term applicable amount (3) Freezing of lending cap if default rate is 2 percent or more If the rate calculated under section 8(g)(1) is 2 percent or more for a quarter, the Bank may not exceed the amount of loans, guarantees, and insurance outstanding on the last day of that quarter until the rate calculated under section 8(g)(1) is less than 2 percent. . 102. Increase in loss reserves (a) In general Section 6 of the Export-Import Bank Act of 1945 ( 12 U.S.C. 635e (1) by redesignating subsection (b) as subsection (c); and (2) by inserting after subsection (a) the following: (b) Reserve requirement The Bank shall build to and hold in reserve, to protect against future losses, an amount that is not less than 5 percent of the aggregate amount of disbursed and outstanding loans, guarantees, and insurance of the Bank. . (b) Effective date The amendment made by subsection (a) shall take effect on the date that is one year after the date of the enactment of this Act. 103. Review of fraud controls Section 17(b) of the Export-Import Bank Reauthorization Act of 2012 ( 12 U.S.C. 635a–6(b) (b) Review of fraud controls Not later than 4 years after the date of the enactment of the Export-Import Bank Reform and Reauthorization Act of 2015 (1) review the adequacy of the design and effectiveness of the controls used by the Export-Import Bank of the United States to prevent, detect, and investigate fraudulent applications for loans and guarantees and the compliance by the Bank with the controls, including by auditing a sample of Bank transactions; and (2) submit a written report regarding the findings of the review and providing such recommendations with respect to the controls described in paragraph (1) as the Comptroller General deems appropriate to— (A) the Committee on Banking, Housing, and Urban Affairs and the Committee on Appropriations of the Senate; and (B) the Committee on Financial Services and the Committee on Appropriations of the House of Representatives. . 104. Office of Ethics Section 3 of the Export-Import Bank Act of 1945 ( 12 U.S.C. 635a (k) Office of Ethics (1) Establishment There is established an Office of Ethics within the Bank, which shall oversee all ethics issues within the Bank. (2) Head of office (A) In general The head of the Office of Ethics shall be the Chief Ethics Officer, who shall report to the Board of Directors. (B) Appointment Not later than 180 days after the date of the enactment of the Export-Import Bank Reform and Reauthorization Act of 2015 (i) appointed by the President of the Bank from among persons— (I) with a background in law who have experience in the fields of law and ethics; and (II) who are not serving in a position requiring appointment by the President of the United States before being appointed to be Chief Ethics Officer; and (ii) approved by the Board. (C) Designated agency ethics official The Chief Ethics Officer shall serve as the designated agency ethics official for the Bank pursuant to the Ethics in Government Act of 1978 (5 U.S.C. App. 101 et seq.). (3) Duties The Office of Ethics has jurisdiction over all employees of, and ethics matters relating to, the Bank. With respect to employees of the Bank, the Office of Ethics shall— (A) recommend administrative actions to establish or enforce standards of official conduct; (B) refer to the Office of the Inspector General of the Bank alleged violations of— (i) the standards of ethical conduct applicable to employees of the Bank under parts 2635 and 6201 of title 5, Code of Federal Regulations; (ii) the standards of ethical conduct established by the Chief Ethics Officer; and (iii) any other laws, rules, or regulations governing the performance of official duties or the discharge of official responsibilities that are applicable to employees of the Bank; (C) report to appropriate Federal or State authorities substantial evidence of a violation of any law applicable to the performance of official duties that may have been disclosed to the Office of Ethics; and (D) render advisory opinions regarding the propriety of any current or proposed conduct of an employee or contractor of the Bank, and issue general guidance on such matters as necessary. . 105. Chief Risk Officer Section 3 of the Export-Import Bank Act of 1945 ( 12 U.S.C. 635a (l) Chief Risk Officer (1) In general There shall be a Chief Risk Officer of the Bank, who shall— (A) oversee all issues relating to risk within the Bank; and (B) report to the President of the Bank. (2) Appointment Not later than 180 days after the date of the enactment of the Export-Import Bank Reform and Reauthorization Act of 2015 (A) appointed by the President of the Bank from among persons— (i) with a demonstrated ability in the general management of, and knowledge of and extensive practical experience in, financial risk evaluation practices in large governmental or business entities; and (ii) who are not serving in a position requiring appointment by the President of the United States before being appointed to be Chief Risk Officer; and (B) approved by the Board. (3) Duties The duties of the Chief Risk Officer are— (A) to be responsible for all matters related to managing and mitigating all risk to which the Bank is exposed, including the programs and operations of the Bank; (B) to establish policies and processes for risk oversight, the monitoring of management compliance with risk limits, and the management of risk exposures and risk controls across the Bank; (C) to be responsible for the planning and execution of all Bank risk management activities, including policies, reporting, and systems to achieve strategic risk objectives; (D) to develop an integrated risk management program that includes identifying, prioritizing, measuring, monitoring, and managing internal control and operating risks and other identified risks; (E) to ensure that the process for risk assessment and underwriting for individual transactions considers how each such transaction considers the effect of the transaction on the concentration of exposure in the overall portfolio of the Bank, taking into account fees, collateralization, and historic default rates; and (F) to review the adequacy of the use by the Bank of qualitative metrics to assess the risk of default under various scenarios. . 106. Risk Management Committee (a) In general Section 3 of the Export-Import Bank Act of 1945 ( 12 U.S.C. 635a (m) Risk management committee (1) Establishment There is established a management committee to be known as the Risk Management Committee (2) Membership The membership of the Risk Management Committee shall be the members of the Board of Directors, with the President and First Vice President of the Bank serving as ex officio members. (3) Duties The duties of the Risk Management Committee shall be— (A) to oversee, in conjunction with the Office of the Chief Financial Officer of the Bank— (i) periodic stress testing on the entire Bank portfolio, reflecting different market, industry, and macroeconomic scenarios, and consistent with common practices of commercial and multilateral development banks; and (ii) the monitoring of industry, geographic, and obligor exposure levels; and (B) to review all required reports on the default rate of the Bank before submission to Congress under section 8(g). . (b) Termination of Audit Committee Not later than 180 days after the date of the enactment of this Act, the Board of Directors of the Export-Import Bank of the United States shall revise the bylaws of the Bank to terminate the Audit Committee established by section 7 of the bylaws. 107. Independent audit of bank portfolio (a) Audit The Inspector General of the Export-Import Bank of the United States shall conduct an audit or evaluation of the portfolio risk management procedures of the Bank, including a review of the implementation by the Bank of the duties assigned to the Chief Risk Officer under section 3(l) of the Export-Import Bank Act of 1945, as amended by section 105. (b) Report Not later than one year after the date of the enactment of this Act, and not less frequently than every 3 years thereafter, the Inspector General shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a written report containing all findings and determinations made in carrying out subsection (a). 108. Pilot program for reinsurance (a) In general Notwithstanding any provision of the Export-Import Bank Act of 1945 ( 12 U.S.C. 635 et seq. Bank (b) Limitations on Amount of Risk-Sharing (1) Per contract or other arrangement The aggregate amount of liability the Bank may transfer through risk-sharing pursuant to a contract or other arrangement entered into under subsection (a) may not exceed $1,000,000,000. (2) Per year The aggregate amount of liability the Bank may transfer through risk-sharing during a fiscal year pursuant to contracts or other arrangements entered into under subsection (a) during that fiscal year may not exceed $10,000,000,000. (c) Annual reports Not later than one year after the date of the enactment of this Act, and annually thereafter through 2019, the Bank shall submit to Congress a written report that contains a detailed analysis of the use of the pilot program carried out under subsection (a) during the year preceding the submission of the report. (d) Rule of construction Nothing in this section shall be construed to affect, impede, or revoke any authority of the Bank. (e) Termination The pilot program carried out under subsection (a) shall terminate on September 30, 2019. II Promotion of small business exports 201. Increase in small business lending requirements (a) In general Section 2(b)(1)(E)(v) of the Export-Import Bank Act of 1945 ( 12 U.S.C. 635(b)(1)(E)(v) 20 percent 25 percent (b) Effective date The amendment made by subsection (a) shall apply with respect to fiscal year 2016 and each fiscal year thereafter. 202. Report on programs for small and medium-sized businesses (a) In general Section 8 of the Export-Import Bank Act of 1945 ( 12 U.S.C. 635g (k) Report on Programs for Small and Medium-Sized Businesses The Bank shall include in its annual report to Congress under subsection (a) a report on the programs of the Bank for United States businesses with less than $250,000,000 in annual sales. . (b) Effective date The amendment made by subsection (a) shall apply with respect to the report of the Export-Import Bank of the United States submitted to Congress under section 8 of the Export-Import Bank Act of 1945 ( 12 U.S.C. 635g III Modernization of operations 301. Electronic payments and documents Section 2(b)(1) of the Export-Import Bank Act of 1945 ( 12 U.S.C. 635(b)(1) (M) Not later than 2 years after the date of the enactment of the Export-Import Bank Reform and Reauthorization Act of 2015 (i) to accept electronic documents with respect to transactions whenever possible, including copies of bills of lading, certifications, and compliance documents, in such manner so as not to undermine any potential civil or criminal enforcement related to the transactions; and (ii) to accept electronic payments in all of its programs. . 302. Reauthorization of information technology updating Section 3(j) of the Export-Import Act of 1945 ( 12 U.S.C. 635a(j) (1) in paragraph (1), in the matter preceding subparagraph (A), by striking 2012, 2013, and 2014 2015 through 2019 (2) in paragraph (2)(B), by striking (I) the funds (i) the funds (3) in paragraph (3), by striking 2012, 2013, and 2014 2015 through 2019 IV General provisions 401. Extension of authority (a) In general Section 7 of the Export-Import Bank Act of 1945 ( 12 U.S.C. 635f 2014 2019 (b) Dual-Use Exports Section 1(c) of Public Law 103–428 12 U.S.C. 635 September 30, 2014 the date on which the authority of the Export-Import Bank of the United States expires under section 7 of the Export-Import Bank Act of 1945 ( 12 U.S.C. 635f (c) Sub-Saharan Africa Advisory Committee Section 2(b)(9)(B)(iii) of the Export-Import Bank Act of 1945 ( 12 U.S.C. 635(b)(9)(B)(iii) September 30, 2014 the date on which the authority of the Bank expires under section 7 (d) Effective date The amendments made by this section shall take effect on the earlier of the date of the enactment of this Act or June 30, 2015. 402. Certain updated loan terms and amounts (a) Loan Terms for Medium-Term Financing Section 2(a)(2)(A) of the Export-Import Bank Act of 1945 ( 12 U.S.C. 635(a)(2)(A) (1) in clause (i), by striking ; and (2) by adding at the end the following: (iii) with principal amounts of not more than $25,000,000; and . (b) Competitive opportunities relating to insurance Section 2(d)(2) of the Export-Import Bank Act of 1945 ( 12 U.S.C. 635(d)(2) $10,000,000 $25,000,000 (c) Export amounts for small business loans Section 3(g)(3) of the Export-Import Bank Act of 1945 ( 12 U.S.C. 635a(g)(3) $10,000,000 $25,000,000 (d) Consideration of environmental effects Section 11(a)(1)(A) of the Export-Import Bank Act of 1945 ( 12 U.S.C. 635i–5(a)(1)(A) $10,000,000 or more $25,000,000 (or, if less than $25,000,000, the threshold established pursuant to international agreements, including the Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence, as adopted by the Organisation for Economic Co-operation and Development Council on June 28, 2012, and the risk-management framework adopted by financial institutions for determining, assessing, and managing environmental and social risk in projects (commonly referred to as the Equator Principles (e) Effective date The amendments made by this section shall apply with respect to fiscal year 2016 and each fiscal year thereafter. V Other matters 501. Prohibition on discrimination based on industry Section 2 of the Export-Import Bank Act of 1945 ( 6 U.S.C. 635 et seq. (k) Prohibition on discrimination based on industry (1) In general Except as provided in this Act, the Bank may not— (A) deny an application for financing based solely on the industry, sector, or business that the application concerns; or (B) promulgate or implement policies that discriminate against an application based solely on the industry, sector, or business that the application concerns. (2) Applicability The prohibitions under paragraph (1) apply only to applications for financing by the Bank for projects concerning the exploration, development, production, or export of energy sources and the generation or transmission of electrical power, or combined heat and power, regardless of the energy source involved. . 502. Negotiations to end export credit financing (a) In general Section 11 of the Export-Import Bank Reauthorization Act of 2012 ( 12 U.S.C. 635a–5 (1) in subsection (a)— (A) in the matter preceding paragraph (1), by striking Secretary of the Treasury (in this section referred to as the Secretary President (B) in paragraph (1)— (i) by striking (OECD) (in this section referred to as the OECD (ii) by striking ultimate goal of eliminating possible goal of eliminating, before the date that is 10 years after the date of the enactment of the Export-Import Bank Reform and Reauthorization Act of 2015 (2) in subsection (b), by striking Secretary President (3) by adding at the end the following: (c) Report on strategy Not later than 180 days after the date of the enactment of the Export-Import Bank Reform and Reauthorization Act of 2015 (d) Negotiations with non-OECD members The President shall initiate and pursue negotiations with countries that are not OECD members to bring those countries into a multilateral agreement establishing rules and limitations on officially supported export credits. (e) Annual reports on progress of negotiations Not later than 180 days after the date of the enactment of the Export-Import Bank Reform and Reauthorization Act of 2015 . (b) Effective date The amendments made by paragraphs (1) and (2) of subsection (a) shall apply with respect to reports required to be submitted under section 11(b) of the Export-Import Bank Reauthorization Act of 2012 ( 12 U.S.C. 635a–5(b) 503. Study of financing for information and communications technology systems (a) Analysis of information and communications technology industry use of bank products The Export-Import Bank of the United States (in this section referred to as the Bank (b) Elements In conducting the study required by subsection (a), the Bank shall examine the following: (1) The number of jobs in the United States that are supported by the export of information and communications technology services and related goods, and the degree to which access to financing will increase exports of such services and related goods. (2) The reduction in the financing by the Bank of exports of information and communications technology services from 2003 through 2014. (3) The activities of foreign export credit agencies to facilitate the export of information and communications technology services and related goods. (4) Specific proposals for how the Bank could provide additional financing for the exportation of information and communications technology services and related goods through risk-sharing with other export credit agencies and other third parties. (5) Proposals for new products the Bank could offer to provide financing for exports of information and communications technology services and related goods, including— (A) the extent to which the Bank is authorized to offer new products; (B) the extent to which the Bank would need additional authority to offer new products to meet the needs of the information and communications technology industry; (C) specific proposals for changes in law that would enable the Bank to provide increased financing for exports of information and communications technology services and related goods in compliance with the credit and risk standards of the Bank; (D) specific proposals that would enable the Bank to provide increased outreach to the information and communications technology industry about the products the Bank offers; and (E) specific proposals for changes in law that would enable the Bank to provide the financing to build information and communications technology infrastructure, in compliance with the credit and risk standards of the Bank, to allow for market access opportunities for United States information and communications technology companies to provide services on the infrastructure being financed by the Bank. (c) Report Not later than 181 days after the date of the enactment of this Act, the Bank shall submit to Congress a report that contains the results of the study required by subsection (a). October 20, 2015 Read the second time and placed on the calendar

Summary: Export-Import Bank Reform and Reauthorization Act of 2015 This bill amends the Export-Import Bank Act of 1945 to reduce, for each of FY2015-FY2019, the authorized aggregate amount of loans, guarantees, and insurance the Export-Import Bank may have outstanding at any time. The Bank shall build to and hold in reserve, to protect against future losses, at least 5% of its aggregate amount of disbursed and outstanding loans, guarantees, and insurance. The Export-Import Bank Reauthorization Act of 2012 (EIBRA) is amended to require the Government Accountability Office's quadrennial review of the adequacy of the design and effectiveness of the Bank's fraud controls to include review of the Bank's compliance with these controls. An Office of Ethics is established within the Bank to recommend administrative actions to establish or enforce standards of official conduct. A Chief Risk Officer of the Bank is established to oversee all issues relating to risk within the Bank. A Risk Management Committee is also established to: oversee periodic stress testing on the entire Bank portfolio and the monitoring of industry, geographic, and obligor exposure levels; and review all required reports on the Bank's default rate. The Bank's Inspector General shall conduct an audit or evaluation of the Bank's portfolio risk management procedures, including its implementation of the duties assigned to the Chief Risk Officer. The Bank may establish a pilot program under which it may enter into contracts and other arrangements to share risks associated with its provision of guarantees, insurance, or credit, or participation in the extension of credit. The Bank shall: (1) increase from 20% to 25% of its lending authority the amount made available to finance direct exports by small business concerns, and (2) include in its annual report to Congress a report on its programs for U.S. businesses with less than $250 million in annual sales. The Bank may use a portion of its surplus through FY2019 to update its information technology systems. The Bank, the Sub-Saharan Africa Advisory Committee, and authority for dual use exports (of nonlethal defense articles or services primarily for civilian use) are reauthorized through FY2019. The principal amounts of medium-term financing by the Bank are limited to $25 million Increased from a minimum of $10 million to a minimum of $25 million are the amounts of: long-term loans or loan guarantees the Bank may insure, working capital export loans and guarantees to small businesses, and long-term support for projects to which certain procedures apply regarding the potential beneficial and adverse environmental effects of goods and services for which direct lending and guarantee support is requested. The Bank may never: deny an application for financing based solely on the industry, sector, or business that the application concerns; or promulgate or implement policies that discriminate against an application based solely on the industry, sector, or business that the application concerns. The EIBRA is amended to require the President instead of the Department of the Treasury to initiate and pursue negotiations to end export credit financing. The President shall propose to Congress a strategy the U.S. government will pursue with other major exporting countries, including Organisation for Economic Co-operation and Development (OECD) members and non-OECD members, to eliminate over a period of 10 years subsidized export-financing programs, tied aid, export credits, and all other forms of government-supported export subsidies. The Bank shall study the extent to which products it offers are available and used by companies that export information and communications technology services and related goods.