II 113th CONGRESS 1st Session S. 1883 IN THE SENATE OF THE UNITED STATES December 20, 2013 Mrs. Hagan introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To extend duty-free treatment for certain trousers, breeches, or shorts imported from Nicaragua, and for other purposes.

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