[Congressional Record (Bound Edition), Volume 151 (2005), Part 12]
[Senate]
[Pages 16229-16230]
[From the U.S. Government Publishing Office, www.gpo.gov]




     DEPARTMENT OF STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS 
                  APPROPRIATIONS ACT, 2006--Continued

  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent to set aside the 
pending amendment for the purpose of offering an amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 1250

  Mr. GRASSLEY. Mr. President, I am going to offer an amendment. Before 
I send it to the desk, I want to speak to the amendment.

[[Page 16230]]

  In March of 2004, the Export-Import Bank approved the issuance of 
$9.87 million in taxpayer-guaranteed credit insurance to help Angostura 
Holdings Limited, of Trinidad and Tobago, to finance the construction 
of an ethanol dehydration plant in Trinidad. The purpose of this credit 
insurance was to enable Angostura to purchase equipment to be used to 
dehydrate up to 100 million gallons of Brazilian ethanol annually. 
Angostura would then reexport the resulting dehydrated ethanol to the 
United States duty free under the current Caribbean Basin Initiative 
Trade Preference Program.
  The credit insurance approval, however, had one major flaw. It 
appeared to violate the Export-Import Bank's authorizing statute. I 
want to explain that statute.
  Section 635(e) of the Export-Import Bank's authorizing statute--that 
is the Export-Import Bank Act of 1945--states that the bank is not to 
provide credit or financial guarantees to expand production of 
commodities for export to the United States if the resulting production 
capacity is expected to compete with U.S. production of the same 
commodity and the extension of such credit will cause substantial 
injury--I emphasize ``substantial injury''--to U.S. producers of the 
same commodity.
  The statute goes on to provide that ``the extension of any credit or 
guarantee by the Bank will cause substantial injury if the amount of 
the capacity for production established, or the amount of the increase 
in such capacity expanded, by such credit or guarantee equals or 
exceeds 1 percent of United States production,'' with emphasis upon 
exceeding 1 percent of United States production.
  I want to go back to last year then. As of last year, when the credit 
guarantees for Angostura were approved, the total 100 million gallon 
capacity of the Angostura facility was nearly 4 percent of U.S. 
production. This amount clearly then exceeds the 1 percent threshold 
for causing substantial injury to the U.S. ethanol industry as spelled 
out in the Export-Import Bank's authorizing statute.
  I want to make clear, we are not talking about changing existing 
policy. We are talking about not letting somebody use subterfuge to get 
around existing law. It appeared to me that the approval of credit 
guarantees for Angostura by the Export-Import Bank violated the bank's 
authorizing statute. Moreover, as the amount financed by the Export-
Import Bank was less than $10 million--remember, we are talking about 
$9.87 million--there was no detailed economic impact analysis conducted 
by the bank. So it seems to me they were conveniently under the $10 
million threshold as a way of muddying the waters, camouflaging this 
transaction, not drawing attention, not even taking their official look 
at the requirements of the statute by being about $130,000 under the 
$10 million threshold, hoping that somehow this would get by without 
our finding out about it.
  In the Consolidated Appropriations Act of 2005, Congress asked the 
Export-Import Bank for an explanation of the credit guarantees for 
Angostura. Specifically, the 2005 Act required the Export-Import Bank 
to submit a report to the Committees of Appropriations of the Senate 
and the House containing an analysis of the economic impact on U.S. 
ethanol producers of the extension of credit and financial guarantees 
for the development of the ethanol dehydration plant in Trinidad and 
Tobago. Congress also required that this report determine whether such 
an extension will cause substantial injury to such producers, as 
defined in section 2(e)(4) of the Export-Import Bank Act of 1945.
  In January of this year, the Export-Import Bank provided its report. 
In its report, the Export-Import Bank skirted around the issue of 
whether its credit guarantees for Angostura caused substantial injury 
to U.S. producers, and thus whether the approval of these guarantees 
was in compliance with the Export-Import Bank's authorizing statute. 
The Export-Import Bank skirted the issue by claiming that the Angostura 
plant will not ``produce'' dehydrated ethanol. Rather, the Export-
Import Bank stated that this plant will merely ``process'' dehydrated 
ethanol by removing water from wet ethanol produced in Brazil, thus 
merely ``adding value'' to the wet ethanol from Brazil.
  The Export-Import Bank's response to Congress was, to be polite, a 
curious one. The Export-Import Bank's linguistic gymnastics aside, 
Angostura's plant will clearly be producing dehydrated ethanol. This is 
common sense. An ethanol dehydration plant--of course--produces 
dehydrated ethanol.
  Moreover, the Customs Service recognizes that ethanol dehydration 
plants in Caribbean Basin Initiative countries produce dehydrated 
ethanol.
  From what I can see, the Export-Import Bank's approval of credit 
guarantees for Angostura's ethanol plant violated the Export-Import 
Bank's authorizing statute by causing substantial injury to U.S. 
producers of the same commodity, in violation of the law. Accordingly, 
it is only right that no further funds should be provided for this 
facility.
  My amendment would simply provide that no funds made available under 
the 2006 Foreign Operations Appropriations Act may be used by the 
Export-Import Bank to approve or administer a loan or guarantee for 
Angostura's ethanol dehydration plant. The credit guarantees for 
Angostura were improperly approved. Angostura, and ultimately Brazilian 
ethanol producers, should not continue to benefit from credit 
guarantees that were improperly provided by this bank.
  I urge my colleagues to support this amendment.
  I send the amendment to the desk and ask that it be read.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Iowa [Mr. Grassley] proposes an amendment 
     numbered 1250.

  Mr. GRASSLEY. Mr. President, I ask unanimous consent that further 
reading of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

(Purpose: To prohibit the use of funds to approve or administer a loan 
          or guarantee for certain ethanol dehydration plants)

       On page 326 between lines 10 and 11 insert the following:


                           EXPORT-IMPORT BANK

       Sec. 6113. None of the funds made available in this Act may 
     be used by the Export-Import Bank of the United States to 
     approve or administer a loan or guarantee, or an application 
     for a loan or guarantee, for the development, or for the 
     increase in capacity, of an ethanol dehydration plant in 
     Trinidad and Tobago.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, I ask unanimous consent to speak as in 
morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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