US Codex
Bill
Notes

Title II — Improving Agency operations and enhancing transparency and accountability

H.R. 3407 · 116th Congress · Jun 21, 2019 · Lineage

II Improving Agency operations and enhancing transparency and accountability

Sec. 201 Annual testimony

The Export-Import Bank Act of 1945 (12 U.S.C. 635–635i–9) is amended by inserting after section 8A the following:

“8B. Annual testimony

“For each fiscal year through fiscal year 2026, after submitting the annual report to Congress under section 8(a) for the fiscal year, the President of the United States Export Finance Agency shall, on request, appear before the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate to present testimony on—

“(1) the activities of the Agency in the fiscal year covered by the report, particularly activities pursuant to the Project on China and Transformational Exports;

“(2) the actions taken by Agency management to strengthen the ability of the Agency to comply with all statutory requirements, and with Agency policies and procedures, including policies and procedures relating to anti-fraud controls, underwriting standards, and additionality;

“(3) the results of the most recent Federal Employee Viewpoint Survey or other comparable research on staff perspectives at the Agency;

“(4) the status of Agency efforts in the preceding fiscal year to meaningfully address recommendations proposed by the Inspector General, United States Export Finance Agency; and

“(5) outreach efforts to increase small business awareness and use of the Agency, including efforts undertaken pursuant to section 3(i).”

Sec. 202 Independent audit of regional export finance centers

(a)
Audit— The Inspector General of the United States Export Finance Agency shall conduct an audit of the operation of the Regional Export Finance Centers of the Agency, including a review of—
(1)
whether the metrics used by the Office of Small Business to evaluate regional office employees adhere to guidance issued by the United States Office of Personnel Management and the Civil Service Reform Act;
(2)
whether metrics used by the Office of Small Business to evaluate regional office employees are sufficiently tailored to performance requirements;
(3)
whether metrics have unintended consequences in the use of Agency programs; and
(4)
metrics are aligned with the requirements of section 2(b)(1)(E)(v) of the Export-Import Bank Act of 1945.
(b)
Report— Not later than 180 days after the audit required by subsection (a) is completed, the Agency 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 detailing the Agency’s plan to address deficiencies outlined in the audit.

Sec. 203 Risk Management Committee

(a)
In general— Section 3(m) of the Export-Import Bank Act of 1945 (12 U.S.C. 635a(m)) is amended to read as follows:

“(m) Risk management committee

“(1) Membership; chair—There shall be a Risk Management Committee consisting of the Directors of the Agency other than the Chairman or the Vice Chairman. The Chairman of the Board of Directors of the Agency shall designate a member of the Risk Management Committee to serve as chair of the Risk Management Committee. If, because of 1 or more vacancies in the offices of the Directors other than the Chairman or the Vice Chairman, the Risk Management Committee would have only 1 or 2 members, the General Counsel shall also serve as a member of the Risk Management Committee, but shall not serve as chair. If the Chairman and the Vice Chairman are the only Directors in office, the Risk Management Committee shall consist of the Chairman and the General Counsel, and the General Counsel shall serve as chair.

“(2) Duties—The Risk Management Committee shall report to the Board of Directors, and shall be responsible for providing assistance to the Board in—

“(A) fulfilling the accounting and reporting responsibilities of the Board;

“(B) determining that the Agency has adequate administrative and financial controls;

“(C) reviewing the financial statements prepared by management for distribution to the Congress and the public;

“(D) providing direction over the internal audit function and the independent accountants;

“(E) overseeing, in conjunction with the Office of the Chief Financial Officer of the Agency—

“(i) periodic stress testing on the entire Agency portfolio, reflecting different market, industry, and macroeconomic scenarios, and consistent with best practices of commercial and multilateral development banks; and

“(ii) the monitoring of industry, geographic, and obligor exposure levels; and

“(F) reviewing all required reports on the default rate of the Agency before submission to Congress under section 8(g).

“(3) Quorum—2 members of the Risk Management Committee shall constitute a quorum.”

(b)
Conforming repeal— Section 51006 of the Fixing America’s Surface Transportation Act (129 Stat. 1766; Public Law 104–94) is hereby repealed.

Sec. 204 Ensuring Agency compliance with additionality requirements

(a)
Written documentation requirements— Not later than 180 days after the date of the enactment of this Act, the Board of Directors of the United States Export Finance Agency shall, with respect to an authorization in connection with a transaction equal to or in excess of $25,000,000—
(1)
adopt and implement policies and procedures to ensure that the Agency includes written documentation of the determination and verification of additionality in its records, including—
(A)
a description of attempts by relevant parties to a transaction to obtain private-sector financing;
(B)
an explanation of how the level of Agency financing responds to limitations in the availability or terms of private capital; and
(C)
an assessment, to the extent practicable, of the availability and terms of competing financing by a foreign export credit agency;
(2)
consult with the Chief Information Officer and the Inspector General of the Agency to implement appropriate recordkeeping practices for the written documentation, as well as for any other documentation required by Agency policies and procedures; and
(3)
submit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a written report that includes a copy of the policies and procedures of the Agency regarding additionality, and an explanation of how the Agency uses the determination and verification of additionality to evaluate applications for support. assistance.
(b)
GAO reviews of agency policies and procedures for additionality determination and verification— In each of calendar years 2020, 2022, and 2024, and 2026, the Comptroller General of the United States shall review the policies and procedures of the United States Export Finance Agency relating to how the Agency makes a judgment that a transaction is unlikely to proceed without support from the Agency, and the documentation supporting such a judgment, and submit the result of the review to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate, along with any recommendations to strengthen Agency policies and processes to determine additionality and prevent the Agency from competing with private capital, as described in section 2(b)(1)(B) of the Export-Import Bank Act of 1945.
(c)
Additional information required To be provided to Congress before approving certain support— Section 2(b)(3)(B) of the Export-Import Bank Act of 1945 (12 U.S.C. 635(b)(3)(B)) is amended by inserting “, a determination by the Agency as to whether financing by the Agency fully meets the additionality policies of the Agency, and a non-confidential summary of the facts and conclusions reached in a detailed economic impact analysis or similar study conducted pursuant to subsection (e)(7)” before the period.

Sec. 205 Reinsurance program

Section 51008 of the Fixing America’s Surface Transportation Act (12 U.S.C. 635 note) is amended—
(1)
in the section heading, by striking “Pilot”;
(2)
in subsection (a), by striking “pilot”; and
(3)
by striking subsections (c) through (e) and inserting the following:

“(c) Factors for consideration in reinsurance pools—In implementing this section, the Agency shall, with respect to a reinsurance pool, pursue appropriate objectives to reduce risk and costs to the Agency, including by the following, to the extent practicable:

“(1) Ensuring a reasonable diversification of risks.

“(2) Including larger exposures where the possibility of default raises overall portfolio risk for the Agency.

“(3) Excluding transactions from the pool that are covered by first-loss protection.

“(4) Excluding transactions from the pool that are collateralized at a rate greater than standard market practice.

“(5) Diversifying reinsurance pools by industry and other appropriate factors.

“(6) Exploring different time periods of coverage.

“(7) Exploring both excess of loss structures on a per-borrower as well as an aggregate basis.

“(d) Biennial reports—Not later than 1 year after the date of the enactment of this subsection, and every 2 years thereafter through 2026, the Agency shall submit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a written report that contains an assessment of the use of the program carried out under subsection (a) since the most recent report under this subsection.

“(e) Rule of construction—Nothing in this section shall be construed to limit any authority of the Agency described in section 2(a)(1) of the Export-Import Bank Act of 1945.”

Sec. 206 Report on new Agency policies, procedures, and bylaws

Not later than 90 days after the date of the enactment of this Act, the President of the United States Export Finance Agency shall transmit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a copy of all policies, procedures, and bylaws of the Agency approved by the Board of Directors of the Agency that are in effect on such date of enactment. Within 30 days after the Board of Directors of the United States Export Finance Agency adopts or amends such a policy, procedure, or bylaw, the President of the Agency shall transmit a copy of the adopted or amended policy, procedure, or bylaw to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate.

Sec. 207 Report on travel practices of Agency employees

Not later than 180 days after the date of the enactment of this Act, and annually thereafter for the succeeding 7 years, the President of the United States Export Finance Agency shall submit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a written report that provides details on authorized travel by Agency officers and employees in the preceding year, including the following:
(1)
Travel start date and end date.
(2)
Destination or destinations.
(3)
The department and division employing the traveler.
(4)
Obligated travel costs.
(5)
Class of travel.
(6)
The amount of any reimbursed travel costs or other forms of sponsorship.

Sec. 208 Report on steps taken to correct deficiencies related to information security

Not later than 180 days after the date of the enactment of this Act, the President of the United States Export Finance Agency shall submit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a written report on the steps the Agency is taking to correct the deficiencies in policies, procedures, and programs identified in the Independent Audit of the United States Export Finance Agency’s Information Security Program Effectiveness for Fiscal Year 2018 (OIG–AR–19–03).

Sec. 209 Additional requirements involving certain transactions

(a)
In general— Section 2(b) of the Export-Import Bank Act of 1945 (12 U.S.C. 635(b)) is amended by adding at the end the following:

“(14)

“(A) If the outstanding loans, guarantees, and insurance authorized by the Agency in association with a United States exporter or a United States lender equals or exceeds the prescribed amount at any point in a fiscal year, the President of the Agency shall transmit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a detailed description of policies and practices by the United States exporter or United States lender, as the case may be, regarding—

“(i) diversity in management, employment, and business activities, including data pertaining to—

“(I) equal employment opportunity and the racial, ethnic, and gender diversity of the workforce and senior management;

“(II) outreach programs to hire qualified women and minority employees and contract with qualified minority-owned and women-owned businesses;

“(III) the participation of women-owned and minority-owned businesses in procurement and contracting, including as suppliers and subcontractors; and

“(IV) developments with respect to this clause, including job creation for women and minority employees, suppliers, and contractors, resulting from the policies and practices described in this subparagraph during the preceding year; and

“(ii) outreach efforts to small businesses during the preceding year, including efforts that—

“(I) raise awareness of small business procurement and contracting opportunities;

“(II) educate small businesses involved in procurement and contracting on the objectives and activities of the Agency, with the purpose of expanding direct small business exports financed by the Agency; and

“(III) developments resulting from the outreach efforts described in this clause during the preceding year, including the number of small businesses contracted with and the number of jobs created, as well as any other benefits to the communities of the exporter, lender, or related small businesses, as the case may be.

“(B) On authorization of financing that equals or exceeds $100,000,000 during the fiscal year involving the exporter or lender described in subparagraph (A), the President of the Agency shall transmit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a report that includes—

“(i) an economic impact analysis or similar study of the transaction performed by the Agency, in a manner consistent with the procedures described in subsection (e)(7), which shall include consideration of the views of the public and interested parties and an assessment of adverse effects on United States employment, if any, that may result from Agency financing involving a foreign competitor of a United States entity; and

“(ii) an assessment of how the Agency determined the need for financing of the transaction, including—

“(I) a description of attempts by relevant parties to the transaction to obtain private-sector financing, including a description of the written documentation of the attempts, or an explanation for the lack of any such attempt; and

“(II)

“(aa) an explanation of why private-sector financing is not available or not economically viable for the transaction; or

“(bb) a certification that the Agency received sufficient information to conclude that financing is necessary to counter official export credit provided by a foreign government for a similar transaction involving the same foreign obligor.

“(C) In this paragraph, the term prescribed amount means an amount equal to 20 percent of the outstanding loans, guarantees, and insurance of the Agency, as calculated on the 1st day of the fiscal year.”

(b)
Section 8 of such Act (12 U.S.C. 635g), as amended by title I of this Act, is amended by adding at the end the following:

“(p) Addition to annual report—The Agency shall include in its annual report to the Congress under subsection (a) information on the 10 United States exporters benefitting from the highest level of Agency support and 10 foreign obligors utilizing the highest level of Agency support during the reporting period, including the share of total authorizations by value, and the industry or industrial sector, connected with each such exporter and obligor.”

Sec. 210 Anti-fraud reforms

Section 2 of the Export-Import Bank Act of 1945 (12 U.S.C. 635) is amended—
(1)
in subsection (f), by striking the period and inserting:

“(1) the Agency has substantial credible evidence that the end user, borrower, lender, or exporter has committed an act of fraud or corruption in connection with the application; or

“(2) the end user, borrower, lender, or exporter has been convicted of an act of fraud or corruption in connection with an application for support from the Agency made in the preceding 5 years.”

(2)
in subsection (i), by striking “should require” and inserting “shall require”.