Currency Exchange Rate Oversight Reform Act of 2007

Bill: 110-s-1607
Sponsor: Sen. Baucus, Max [D-MT]
Introduced: 2007-06-13 in the Senate
Policy area: Foreign Trade and International Finance
Subjects: Balance of payments
Canada
Commerce
Congress
Congress and foreign policy
Congressional hearings
Congressional oversight
Congressional reporting requirements
Congressional witnesses
Countervailing duties
Development credit institutions
Dumping
Expedited congressional procedure
Federal advisory bodies
Finance and Financial Sector
Foreign banks and banking
Foreign corporations
Foreign exchange
Foreign loans
Free trade
Government Operations and Politics
Government procurement
Governmental investigations
Holding companies
House rules and procedure
Income tax
Insurance
International Affairs
International monetary system
Investment guaranty insurance
Latin America
Legislative resolutions
Mexico
Monetary policy
President and foreign policy
Senate rules and procedure
Tariff
Tax exclusion
Taxation
Trade agreements
Trade negotiations

Summary:
action_date: 2007-06-13
text: 
Currency Exchange Rate Oversight Reform Act of 2007 - Directs the Secretary of the Treasury to: (1) report biannually to Congress on international monetary policy and currency exchange rates; and (2) appear, if requested, before certain congressional committees to testify regarding such reports.
 
Prescribes report contents, including: (1) an analysis of currency market developments and the relationship between the U.S. dollar and the currencies of major economies and trading partners of the United States; (2) a review of the economic and monetary policies of major economies and trading partners of the United States and an evaluation of how such policies impact currency exchange rates; and (3) a list of currencies designated as fundamentally misaligned currencies.
 
Instructs the Secretary to: (1) analyze semiannually the prevailing real exchange rates between the U.S. dollar and foreign currencies; and (2) identify foreign currency that is in fundamental misalignment and designate it for priority action if the issuing country engages in specified behavior, including excessive reserve accumulation.
 
Prescribes procedures for: (1) negotiations and consultations; (2) failure to adopt appropriate policies; (3) international financial institution governance arrangements; (4) adjustment for fundamentally misaligned currency designated for priority action; and (5) nonmarket economy status.
 
Establishes the Advisory Committee on International Exchange Rate Policy.
 
Repeals the Exchange Rates and International Economic Policy Coordination Act of 1988.
 
Amends the Internal Revenue Code relating to the special rule excluding from foreign personal holding company income any income of an eligible controlled foreign corporation which is derived in the active conduct of banking, financing, and insurance. Repeals the limitation of this exclusion to taxable years of a foreign corporation beginning after December 31, 1998, and before January 1, 2009 (thus making such limited application permanent).
 
Repeals likewise the limited application to the same time period of the exclusion of certain exempt insurance income from the taxable insurance income of a controlled foreign corporation (thus making such exclusion permanent).

action_date: 2007-07-31
text: 
Currency Exchange Rate Oversight Reform Act of 2007 - (Sec. 3) Directs the Secretary of the Treasury to: (1) report biannually to Congress on international monetary policy and currency exchange rates; and (2) appear, if requested, before certain congressional committees to testify regarding such reports.

Prescribes report contents, including: (1) an analysis of currency market developments and the relationship between the U.S. dollar and the currencies of major economies and trading partners of the United States; (2) a review of the economic and monetary policies of major economies and trading partners of the United States and an evaluation of how such policies impact currency exchange rates; and (3) a list of currencies designated as fundamentally misaligned currencies.
 
(Sec. 4) Instructs the Secretary to: (1) analyze semiannually the prevailing real effective exchange rates of foreign currencies; (2) determine whether any such currency is in fundamental misalignment; and (3) designate it for priority action if the issuing country engages in specified behavior, including excessive and prolonged official or quasi-official accumulation of foreign assets for balance of payments purposes, and excessive reserve accumulation of foreign assets.
 
(Sec. 5) Prescribes procedures for: (1) negotiations and consultations; and (2) actions in response to failure, including persistent failure, to adopt appropriate policies, or take identifiable action to eliminate the fundamental misalignment.
 
(Sec. 8) Provides for a joint resolution of congressional disapproval of any determination by the President to waive an action, on the ground that it is in the vital U.S. economic interest to do so, with respect to a country which has persistently failed to adopt appropriate policies to eliminate a fundamental currency misalignment.
 
(Sec. 9) Requires the United States to oppose any proposed change in the governance arrangement of an international financial institution if any of its members would benefit from the proposed change, in the form of increased voting shares or representation, despite having a currency designated for priority action under this Act.
 
(Sec. 10) Amends the Tariff Act of 1930 to require an adjustment in the price used to establish export (and constructed export) prices, in the case of a fundamentally misaligned currency designated for priority action, by reducing such price by the percentage by which the domestic currency of the producer or exporter is undervalued in relation to the U.S. dollar.
 
(Sec. 11) Adds as a factor the administering authority must take into account in determining whether a foreign country is a nonmarket economy country the question of whether its currency is designated for priority action under this Act.
 
(Sec. 12) Applies to Canada and Mexico the requirements of this Act pertaining to: (1) adjustments in export prices for a fundamentally misaligned currency designated for priority action; and (2) determination of nonmarket economy status.
 
(Sec. 13) Establishes the Advisory Committee on International Exchange Rate Policy.

(Sec. 14) Repeals the Exchange Rates and International Economic Policy Coordination Act of 1988.


Legislative actions:
action_date: 2007-12-14
text: By Senator Baucus from Committee on Finance filed written report. Report No. 110-248.
action_date: 2007-12-14
text: By Senator Baucus from Committee on Finance filed written report. Report No. 110-248.
action_date: 2007-07-31
text: Placed on Senate Legislative Calendar under General Orders. Calendar No. 293.
action_date: 2007-07-31
text: Committee on Finance. Reported by Senator Baucus with an amendment in the nature of a substitute. Without written report.
action_date: 2007-07-31
text: Committee on Finance. Reported by Senator Baucus with an amendment in the nature of a substitute. Without written report.
action_date: 2007-07-26
text: Committee on Finance. Ordered to be reported with an amendment in the nature of a substitute favorably.
action_date: 2007-06-13
text: Read twice and referred to the Committee on Finance.
action_date: 2007-06-13
text: Introduced in Senate